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ition (Criminal) Nos.
64 to 70 of 1983.
Under article 32 of the Constitution of India Mrs. Urmila Sirur, Sanjeev Puri and Amerdeep Jaiswal for the Petitioners.
Harbans Singh and S.K. Bagga for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
In the context of the right of the 'lifers ' (prisoners sentenced to life imprisonment prior to 18th December, 743 1978 being the date of coming into force of sec.
433A, Cr.P.C.) to have their cases considered for pre mature release under the Punjab Jail Manual two contentions were urged by counsel appearing for the lifers before us in the above matters.
First, it was contended that such lifers were entitled to have their cases for pre mature release considered by the concerned authorities on completion of ten years of sentence inclusive of remissions in the case of a female prisoner or a male prisoner of under 20 years of age at the date of the commission of the offence or completion of 14 years of sentence inclusive of remissions in the case of adult prisoners under Para 516 B of the Punjab Jail Manual but since November, 1971 the authorities concerned are not submitting their cases for such consideration until actual substantive imprisonment has been undergone for 6 years in case of female prisoners and prisoners below 20 years at the date of the commission of the offence and 8 years in case of adult prisoners and in that behalf certain executive instructions issued by the Punjab Government on 6th August, 1971 are being relied upon but according to the counsel for the lifers such executive instructions issued in 1971 cannot affect the right conferred upon the lifers under Para 516 B which has the force of a statutory rule and Statutory Rules cannot be amended or altered by any executive instructions; hence the lifers concerned in these matters are entitled to have their cases considered for pre mature release since they satisfy the requirements of Para 516 B of the Punjab Jail Manual.
In this behalf counsel relied upon the Punjab High Court 's decision dated 9.11.1982 in Naranjan Singh 's case (which decision is subject.
matter of challenge in Criminal Appeal arising from leave being granted in SLP (Crl.
No. 499/1983).
In other words, counsel canvassed for acceptance of the Punjab High Court 's view in the aforesaid case by this Court.
Secondly, counsel for the lifers urged that the State of Punjab has been erroneously making a distinction between cases of Prisoners who have been sentenced to death but whose sentences, on mercy petitions, have been commuted to life imprisonment and prisoners who have been straightaway sentenced to life imprisonment in the matter of consideration of their cases for pre mature release in that, in the case of the former completion of 14 years of actual sentence is insisted upon while in the case of the latter only 8 years of actual sentence is regarded as sufficient for such consideration, the case of Tapinder Singh s/o Manjit Singh, the petitioner in Writ Petition (Crl.
) No. 68 of 1983 being in point.
According to counsel the State Government in this behalf has been relying upon certain 744 executive instructions issued on 30th of January, 1976 but counsel pointed out that in the case of Mehar Singh vs State of Punjab(1) a Single Judge of the Punjab High Court held that those instructions will not be applicable to cases of prisoners convicted earlier to that date and Special Leave Petition (Crl.) No. 2142 of 1982 preferred by the State of Punjab against that decision was dismissed by this Court on 18th of February, 1983 and, therefore, it is not open to the State Government to rely upon those executive instructions issued on 30th January, 1976 for making the distinction and postponing the consideration of the cases of prisoners falling within the former category until 14 years of actual imprisonment has been suffered by them.
Paragraph 516 B of the Punjab Jail Manual runs thus: 516 B. (a) With the exception of females and of males who were under 20 years of age at the time of commission of offence, the cases of every convicted prisoner sentenced to: (i) Imprisonment for life.
(ii) Imprisonment/s for life and term/s of imprisonment.
(iii) Cumulative Periods of Rigorous imprisonment aggregating of more than 14 years.
(iv) a single sentence of more than 20 years.: (a) who has undergone a period of detention in jail amounting together with remission earned to 14 years, shall be submitted through the Inspectors General of Prisons, Punjab for the orders of the State Government.
(b) the case of a female prisoner and of a male prisoner under 20 years of age at the time of commission of offence, who is undergoing (i) Imprisonment/s for life.
(ii) Imprisonment/s for life and a term/s of imprisonment.
745 (iii) Cumulative periods of Rigorous imprisonment aggregating to more than 10 years.
or; (iv) A single sentence of more than 20 years shall be submitted through the Inspector General of Prisons, Punjab, for the orders of the State Government when the prisoner has undergone a period of detention in jail amounting together with remission earned to 10 years.
(v) Notwithstanding anything contained above, a Superintendent, Jail may, in his discretion, refer at any time, for the orders of the State Government through the Inspector General of Prisoners, Punjab, the case of any prisoner sentenced to imprisonment for life whose sentence might in the Superintendent 's opinion be suitably commuted into a term of imprisonment.
" It appears that from time to time the State Government had been examining the question of, and the procedure for, submission of Roles for pre mature release of prisoners as contained in the aforesaid Para 516 B of the Manual and after considerable deliberation the State Government took a policy decision in 1971 and issued instructions (hereinafter called 'the 1971 Instructions ') providing that a period of actual sentence of 8 years in the case of adult lifers and 6 years in the case of female prisoners and those below 20 years of age at the time of the commission of the offence should be regarded as the qualifying period for consideration of their cases for pre mature release and in this behalf a Memorandum No. 133116JJ 71/39656 dated 10th of November, 1971 containing the aforesaid instructions was issued by the State Government to the Inspector General of Prisons, Punjab and it was clarified that all cases of prisoners should be sent for consideration of their pre mature release in the light of said policy decision with effect from 2nd of November, 1971.
It further appears that the question of releasing pre maturely life convicts whose death sentence has been commuted was again considered by the State Government and it took a policy decision in January, 1976 that cases of such life convicts should be considered for pre mature release only after completion 14 years of actual imprisonment and in that behalf a Memorandum No. 403 6JJ 76/3456 dated 30th January, 1976 containing the necessary instructions (hereinafter called 'the 1976 Instructions ') was issued by the State Government to the Inspector General of Prisons, Punjab with a 746 request to direct the Superintendents of Jails to submit cases of such life convicts for pre mature release accordingly.
(Copies of the Memoranda dated 10th of November, 1971 and 30th January, 1976 have been annexed as Annexures and to the Affidavit of Shri C.L. Goel in support of the SLP No 499/1983 filed by the State of Punjab in Naranjan Singh 's case.
(Proceedings of SLP No. 499/83 were made available to us at the hearing.) It may be stated that these 1971 Instructions and 1976 Instructions though not incorporated in the Punjab Jail Manual as yet, are being followed and implemented and it appears that relying on these Instructions the Jail Authorities are not submitting cases of the concerned lifers to the State Government for pre mature release though they may have suffered the qualifying punishment under para 516 B of the Manual.
Hence Counsel for the petitioners herein has raised the two contentions mentioned above.
In our view, for the reasons which we are indicating presently, there is no substance in either of these contentions.
It is well settled as result of the Privy Council decision in Pandit KishoriLal 's (1) case and this Court 's decisions in Gopal Godse 's (2) case, Maru Ram 's (3) case and Kartar Singh 's (4) case that a sentence of imprisonment for life is a sentence for the remainder of the natural life of the convict and there is no question releasing such a convict earlier in the absence of a formal order of commutation passed by the State Government either under sec.
55, IPC.
or sec, 433 (b) of Cr.
P.C. 1973 and that even the Remission Rules, though statutory, cannot over ride the statutory provisions contained in the Penal Code.
In other words, unlike the cases of prisoners sentenced to terms of imprisonment, in the case of lifers even the Remission Rules though statutory are of no avail in the absence of a formal order of commutation either under sec.
55, IPC.
or sec.
433 (b) of Cr.
P.C. 1973.
Admittedly, in the case of none of the petitioners before us has any order of commutation been passed by the State Government under either of the said provisions and the petitioners are merely relying upon para 516 B of the Punjab Jail Manual for contending that they are entitled to have their cases considered for pre mature release since they have undergone the requisite period of punishment 14 years/10 years inclusive of remissions as per the provisions of the said para and the contention is 747 that since Para 516 B has the force of statutory rule the subsequent executive instructions (the 1971 Instructions or the 1976 Instructions) issued by the State Government cannot adversely affect their said right in as much as the effect of a statutory rule cannot be whittled down by executive instructions.
On the other hand counsel for the State contended that the provisions contained in Para 516 B were themselves executive instructions and not a statutory rule and as such these could be amended or altered from time to time by fresh executive instructions issued by the State Government and therefore the petitioners ' cases were not submitted to the concerned authorities for consideration of their pre mature release because of the subsequent executive instructions issued in 1971 and 1976.
We find ample material on record which supports the contention of counsel for the State.
In the first place, it may be stated that the marginal note against Para 516 B of the Punjab Jail Manual (1975 edition) clearly shows that the provisions thereof are based on a Government of India Resolution No. 159 167 dated 6th September, 1905, copy whereof was produced before us and the contents of the Resolution clearly show that various questions such as the places where transported prisoners should be kept, the nature of their punishment, remission of sentences, pre mature releases, etc. had engaged the attention of Government of India and decisions were taken on those questions.
In particular the Resolution records that the majority of the authorities consulted were in favour of the proposal of the U.P. Government that when the term of imprisonment undergone together with any remission earned under the rules amounted to 14 years the question of remitting the remainder of the imprisonment should be raised and the Governor General in Council was accordingly pleased to direct that such a rule "shall be ordinarily adopted in future, though he would not, however, lay down that such prisoners must always be released at the end of the 14 years and it would still be open to, and indeed incumbent on, the Local Government to take into consideration, when deciding on the remission to be granted, circumstances of each, case, the character of the convict, his conduct in prison and the probability of his reverting to criminal habits or instigating others to commit crimes".
What is more copies of the Resolution were forwarded to various State Government "for information and guidance.
" This clearly shows that the contents of Government 's Resolution dated 6th September, 1905, on which para 516 B of the Punjab Jail Manual is based, were in the nature of executive instructions by way of guidance and not any hard and fast rule, 748 must less a statutory rule.
Secondly, this position has been sufficiently clarified at two places in the Punjab Jail Manual (1975 edition) itself.
In the preface to that edition it has been clearly stated that the Paragraphs of the Manual against which a black line (side line) appears are in substance, either quotations from the Law or from the Rules having the force of the law while the portions of the Manual without a black line (side line) are executive instruction which have from time to time been issued by the Government of India, Local Government or the Inspector General with the sanction and approval from the Local Government and para 516 B is not side lined by any black line.
Again, Chapter XX which deals with remission system contains Para 631 to 650 which comprise what in terms are called 'remission rules ' presumably having statutory force since these paras are all side lined, but what is of importance is that at the foot of para 631 there is a Note which is nothing but a reproduction of para 516 B and at the end of Remission Rules (foot of para 650) there is a Nota bene which says that the Note to para 631 should not be regarded as part of the Statutory Rules but the same has been inserted for convenience of reference and with the object of assisting officers to interpret the rules.
It is thus clear that para 516 B of the Manual itself contained executive instructions and had no force of a statutory rule.
If that be so it would always be open to the State Government from time to time to alter or amend or even withdraw such executive instructions by issuing fresh instruction.
In other words any existing executive instructions could be substituted by issuing fresh executive instructions for processing the cases of lifers for premature release but once issued these must be uniformly and invariably applied to all cases of lifers so as to avoid the charge of discrimination under article 14.
Reliance by Counsel for the petitioners on the Punjab High Court 's decision in Naranjan Singh 's case would be of no avail However, we would like to observe that in that case the fact that the State Government had issued the 1971 Instructions which substituted para 516 B of the Manual was not properly placed before it and in the absence of such proper material the High Court took the view that the convict 's case for per mature release was required to be considered in the light of the provisions of para 516 B.
The view of the Punjab High Court cannot obviously be accepted.
The first contention urged by counsel therefore has to be rejected.
749 The second contention also must fail in view of the admitted position that cases of prisoners who have been sentenced to death but whose sentence on mercy petitions has been commuted to life imprisonment (who constitute a distinct class) will now be governed by the 1976 Instructions.
Here also the view of the Punjab High Court in the case of Mehar Singh (supra) that the 1976 Instructions issued on 30th of January, 1976 will not be applicable to cases of prisoners convicted earlier to that date is not tenable.
Clearly existing cases of life convicts falling within that category will be governed by those instructions.
It is true that SLP (Crl) No. 2142/1982 preferred by State of Punjab against that decision was dismissed by this Court on 18th February, 1983 but the dismissal order passed by this Court itself indicates that this Court did so not because it approved the view of the Punjab High Court but that it "did not consider this to be a proper cases for interference in view of the peculiar facts of that case".
This Court did not desire on the facts of that case to interfere with the direction given that the case of the convict should be submitted for consideration of his premature release.
Having regard to the above discussion it is clear there is no entitlement on the part of the petitioners other than Jang Singh and Mukhtiar Singh to have their cases considered for pre mature release immediately in view of 1971/1976 Instruction.
Their Writ Petitions are therefore dismissed.
So far as Jang Singh s/o Bagga Singh and Mukhtiar Singh s/o Harnam Singh are concerned even the Counter Affidavit of Shri K.C. Mahajan shows that in accordance with the 1971 Instruction they have undergone more than 8 years of actual imprisonment and as such they have the entitlement.
We therefore issue a writ of Mandamus that their cases be submitted for consideration of premature release forth with without any delay.
H.S.K. Two petitions allowed and five petitions dismissed.
| A news item appeared in the newspaper of which respondent No. 2 was its editor, that while addressing a rally of Judicial Employees ' Welfare Association, the Chief Minister of Jammu and Kashmir denounced and ridiculed the judiciary stating that "Justice is being bought in judicial Courts" and that he would never honour the Court 's stay orders because justice could be bought with money.
The news item also stated that the Chief Minister expressed his regret to the Chief Justice and other Judges who were present at the meeting, explaining that the strong words used by him were the voice of his conscience and that he had the greatest regard for the judiciary.
The petitioner filed the contempt petition against the Chief Minister.
Although a show cause notice was issued under the to the Chief Minister (respondent) on March 18, 1983 no counter affidavit was filed till September 26, 1983.
When the contempt petition was called out on that day his advocate accepted the notice on behalf of the respondent.
Eventually on November 21, 1983 the affidavit of the Chief Minister dated November 9, 1983 was taken on record.
While the Chief Minister denied having made the statements attributed to him, the Editor asserted that the version published in the newspaper was true.
On the question whether the statements published in the newspaper amounted to contempt of court.
Dismissing the petition, ^ HELD: What is involved in this case is criminal contempt and therefore it is necessary to apply the particular standard of proof required to be established in a criminal case.
Respondent, No.1, on the material placed on record, cannot be held to be guilty of the charge.
[764F] 761 In matters involving allegations of criminal contempt, the Court has to act both as a prosecutor and as a Judge.
It does so to uphold the authority of law and not in defence of a particular Judge.
Secondly, the right of free speech is an important right of the citizen and bona fide criticism of any system or institution is aimed at inducing the administrators of that system or institution to look inwards and improve its public image.
Courts do not like to assume the posture that they are above criticism.
At the same time though law does not restrain the expression of disapprobation against what is done in or by Courts of law, the liberty of free expression is not to be confounded with a licence to make unfounded allegations of corruption against the judiciary.
The abuse of the liberty of free speech and expression carries the case nearer the law of contempt.
Those who criticise the judiciary must remember that they are attacking an institution which is indispensable for the survival of the rule of law but which has no means of defending itself.
Therefore, Judges must receive the protection of law from unfounded attacks on their character.
[765H; 766A, B E; F G] If the Chief Minister said what was alleged in the news item he was in contempt; if he had not, the Editor had committed a contempt by publishing a false report of a scurrilous speech that was never made.
In the face of denial by one and an assertion by the other without more, it is difficult to decide who is right.
On the one hand is the tendency to ridicule the system of justice and malign those who administer it, on the other is the propensity of the fourth estate for some little sensation and its political involvement.
When political considerations pollute the stream of life, sifting truth from falsehood becomes a formidable and forbidding task.
In these circumstances it is difficult to record a positive finding that the allegation that the Chief Minister made the particular statement is proved beyond a reasonable doubt.
[764D F] Although the petitioners had asserted that the Judges of the High Court were present at one of the functions and that they walked out of the meeting on hearing the abusive language used by the Chief Minister no attempt was made to establish the truth of that assertion.
A walkout by Judges of the High Court during the speech of the Chief Minister or soon thereafter would have lent considerable weight to the allegation that the statements made by the Chief Minister were open to grave objection.
[764G H] When a Chief Minister makes a formal speech an official record of the speech, if it were a prepared speech, or even if it were an extempore speech, should have been kept.
No one taped or took down the speeches of a person as important as the Chief Minister.
No written record kept contemporaneously or prepared soon after is cited to contradict the allegation that the Chief Minister scandalised the Courts and assailed the character of Judges.
[765B D]
|
Civil Appeals Nos.
228 to 230 of 1958.
Appeals from the judgment and decree dated July 2, 1957, of the Patna High Court in Misc.
Judicial Case No. 640 of 1955.
59 N. A. Palkhivala, Thakur Prasad and R. C. Prasad for the appellant.
C. K. Daphtary, Solicitor General of India, R. Ganapathy Iyer and D. Gupta, for the respondent.
February 22.
The Judgment of the Court was delivered by KAPUR, J.
The appellant is a. Bank registered under the Co operative Societies Act, 1912 (Act II of 1912) and is deemed to be registered under the Bihar & Orissa Co operative Societies Act, 1935 (Bihar Act VI of 1935) which in Bihar has replaced.
the Cooperative Societies Act of 1912.
It was carrying on banking business in the State of Bihar.
One of the objects of the Bank is to carry on general business of banking not repugnant to the provisions of the Bihar Act and rules framed thereunder for the time being in force (Bye Law 3(a)vi).
In the calendar years 1945, 1946 and 1947, the appellant Bank received by way of interest on deposits with the Imperial Bank of India the sums of Rs. 7,192, Rs. 20,250 and Rs. 22,600 respectively.
It is these sums which are the subject matter of dispute in these three appeals which relate to the respective assessment years 1946 47, 1947 48 and 1948 49.
These sums were not assessed when assessment was made under section 23(3) of the Income tax Act, but subsequently under section 34 they were assessed as being 'income ' under the head " other sources '.
This order was upheld by the Appellate Assistant Commissioner and by the Income tax Appellate Tribunal.
A case was then stated to the High Court under section 66(1) of the Act, but was decided against the appellant.
The appellant brought three appeals in this Court in regard to the three assessment years.
In each one of them the respondent is the Commissioner of Income tax, Bihar & Orissa.
As the appeals involve a common question of law they were consolidated and can conveniently be disposed of by one judgment.
In its return the appellant showed these various sums as I other sources ', but nothing turns on the manner in which the appellant chose to show this income in its return.
The Income tax Officer, however, assessed the interest for these three years 60 under section 12 of the Income tax Act, as income from I other sources '.
The appellant took an appeal to the Appellate Assistant Commissioner where it was contended that as the business of the appellant Bank consisted of lending money and the deposits had been made not for the purpose of investment but for that business and thereby fulfilling the purpose for which the Co operative Bank was constituted, these various sums of interest were not subject to income tax because of the Notification issued by the Central Government under section 60 of the Income tax Act.
The relevant portion of that Notification, C.B.R. Notification No. 35 dated October 20, 1934, and No. 33 dated August 18, 1945, was : " The following classes of income shall be exempt from the tax payable under the said Act, but shall be taken into account in determining the total income of an assessee for the purpose of the said Act : (2) The profits of any Co operative Society other than the Sanikatta Salt Owners ' Society in the Bombay Presidency for the time being registered under the (Act II of 1912), the Bombay Co operative Societies Act, 1925 (Bombay Act VII of 1925), or the Madras Cooperative Societies Act, 1932 (Madras Act VI of 1932), or the dividends or other payments received by the members of any such Society out of such profits.
Explanation:For this purpose the profits of a Co operative Society shall not be deemed to include any income, profits or gains from : (1) Investments in (a) securities of the nature referred to in section 8 of the Indian Income tax Act; or (b) property of the nature referred to in section 9 of that Act; (2) dividends, or (3) the 'other sources ' referred to in section 12 of the Indian Income tax Act ".
The Appellate Assistant Commissioner, however, repelled the contention of the appellant.
He held that the business of the appellant consisted of I lend 61 ing money, and selling agricultural and other products to its constituents ' which could be planned ahead and required no provision for extraordinary claims.
He remarked that it appeared from the balance sheets that in the accounting year 1945 the Bank invested Rs. 13,50,000 as fixed deposits, which, in the following year was raised to Rs. 15,00,000 and it was only in the accounting year 1947 that the fixed deposits ` were realised on maturity with interest '.
He was also of the opinion that the length of the period during which this money I was kept locked in this way ' showed clearly that I not the exigencies of pressing necessities, but the motives of investment of surplus fund had actuated the deposits '.
He therefore held that the fixed deposits with the Imperial Bank were held as an investment quite apart from the business of the appellant and the interest from these deposits was not exempt from income tax.
He further held that the exemption as to the profit of a Co operative Society extended to its sphere of co operative activities and therefore interest from investments was no part of the appellant 's business profits exempt from taxation.
Against this order an appeal was 'taken to the Income tax Appellate Tribunal and it was there contended that the Bank did not make the deposits as investments, but in order that cash might be available to the appellant 'continuously ' for the carrying on of the purposes of its business, and that the deposits were intimately connected with the business of the appellant and therefore the interest should have been held to be profits arising from the business activities of the Bank, and that the finding that the short term deposits in the Imperial Bank were separate from the appellant 's banking business was erroneous.
The Income tax Appellate Tribunal, by its order dated April 11, 1955, held: " (1) That the interest was an income rightly to be included under the head of I other sources '.
(2) The profits of a Co operative Society indicates the profit derived from the business which can be truly called the business of the Co operative 62 Society.
Investments by the society either in securities or in shares or in bank fixed deposits are made out of surplus funds.
The interest or dividend derived from such investment cannot be regarded as part of the profits of the business (sic) qua such bank and therefore, it is not exempt from income tax (Vide Hoshiarvur Central Co operative Bank vs Commissioner of Income tax (1),) " Against this order a case was stated at the instance of the appellant under section 66(1) of the Act, and the following two questions of law were referred for the opinion of the High Court; (1) Whether, in the facts and circumstances of this case, the receipt of interest on fixed deposits was an income under the head of I other sources ': and (2) Whether in the facts and circumstances of this case, the receipt of interest from the fixed deposits was an income not exempt from taxation under the C. B. R. Notification No. 35 dated 20th October, 1934 and No. 33 dated the 18th August, 1945.
In the High Court the appellant 's contention was that the fixed deposits were made with the Imperial Bank of India not with the idea of making investments, but for the reason that cash should be available to the appellant is and when it was needed for the purposes of its business.
It was also contended that the deposits were short term deposits and that the Bank could not carry on its business without such short term deposits.
In other words, the contention was that making deposits with the Imperial Bank was intimately connected with the business activities of the appellant Bank and that the interest received on the deposits was profit attributable to its business activities.
But the High Court did not accept this contention.
It held that if the income derived by a Co operative Society was from the business of the Co operative Society as such, it fell within the exemption, but if it arose out of the business with third parties as in the case of investment of surplus assets, the exemption was inapplicable because the (1) 350. 63 investment of fluid assets was not a part of the business of the Co operative Bank and the reason for the Notification was to exempt profits accruing to a Cooperative Society from ` carrying on business of a mutual co operative society and upon the ground that a man cannot make profit or loss out of himself.
The ground of mutuality was not relied upon before us by the learned Solicitor General who appeared for the respondent.
So the sole question for determination is whether the investment by a Cooperative Bank of its assets in fixed deposits in the manner that the appellant Bank had deposited its moneys falls within the term I business ' and is there fore assessable under section 10 of the Income tax Act, or it is an investment the interest from which would fall under the term I other sources ' and therefore within section 12 of the Income tax Act.
It was contended by the learned Solicitor General that the finding of the Appellate Tribunal as to the nature of these deposits was one of fact.
This contention is not sustainable.
It has not been treated as a finding of fact either by the Appellate Tribunal or by the High Court.
They have both treated it as a question of law and it is on that basis that the reference was made.
The decision of the question depends on what is comprised within the ordinary business of a bank and whether the business of the appellant bank is in any way different.
Relying upon the decision of the Privy Council in The Punjab Co operative Bank Ltd vs The Commissioner of Income tax, Punjab (1), counsel for the appellant submitted that the business of a bank is one of dealing in money and credit and that laying out moneys in deposit with other banks is just as much a mode of conducting business as lending moneys to borrowers whether members of the society or to other co operative societies, and is therefore a part of the appellant 's business.
Therefore, where out of moneys in deposit with a bank a portion is put away or laid out in securities or in deposits with another banker, two objects are served: (1) the moneys which are not immediately required do not remain idle but (1) (1940] 64 earn interest; and (2) if and when money is required to meet any demand, the investment i. e. the deposits as well as the securities provide a source from which these requirements can easily be met.
Thus the credit of the bank remains unimpaired and its moneys continue to earn interest.
Counsel for the respondent argued that where moneys are so laid out they cannot be termed ` carrying on business of the bank ' and therefore any sums coming in from such investments cannot be termed profits arising from business, but they are income from I others sources,.
In support of this argument reliance was placed by counsel on The Madras Central Urban Bank Ltd. vs Commissioner of lncome Tax (1); The Madras Provincial Co operative Bank Ltd., Madras vs Commissioner of Income Tax, Madras (2) ; Commissioner of Income Tax, Burma vs Bengalee Urban Co operative Credit Society Ltd. (3) ; Commissioner of Income Tax, Madras V. Madras Provincial Co operative Bank Ltd. (4); Hoshiarpur Central Co aperative Bank Ltd. vs Commissioner of Income Tax, Simla (5); Cochin Cottage Industries Cooperative Marketing Society Ltd. vs Commissioner of Income Tax, Mysore &C. (6).
But none of these cases supports the argument raised on behalf of the respondent.
In the Madras Central Urban Bank case (1) the society was required to invest 40 per cent.
of its total liability under call deposits in a liquid or fluid form and the society invested it in Government securities which produced interest.
It was held that interest from securities was not part of the profits of the business of the society as it was not obliged to invest in such securities.
Similarly in the Madras Provincial Co operative Bank Case (2) also the income which was the subject matter of dispute was interest received by the bank from its investments in Government securities and it was held that it was not part of the income derived from its business.
The Rangoon case, Commissioner of Income tax, Burma vs Bengalee Urban Co operative Credit Society (3) was also a case relating (1) I.L.R. F.B. (2) I.L.R. F.B. (3) (4) I.L.R. (5) (6) (1956] 65 to income derived from interest on capital invested in Government securities.
At p. 128, Page, C. J., said: from securities nor income derived from CO property are I profits ' within the meaning of that term as used in the notification. . . .
It Cc may be that investment of capital in properties or securities is part of the business of an assessee, and in such a case, in my opinion, the net income accruing from such investments would be, and be chargeable as, profits of the business ".
(As the matter had not been considered from this point of view the case was sent back for doing so).
These cases before the amendment of the Notification show that the income which was exempted was profit from business and not income from sources which fell under sections 8 and 9 of the Income tax Act.
The Commissioner of Income tax, Madras vs The Madras Provincial Co operative Bank Ltd. (1) was a case where moneys had been invested in debentures and for reasons similar to the ones given in the cases above mentioned,, it was held that interest derived therefrom was not profits of the business.
Counsel for the respondent relied on a judgment of the Punjab High Court in Hoshiarpur Central Cooperative Bank vs Commissioner of Income tax, Simla (2).
In that case the Government authorised the Bank to deal in sugar, oil and standard cloth and it made profit thereform.
Those activities were neither its business under the bye laws nor within its objects.
The question was whether this profit was exempt from income tax on account of its being profits of a co operative society and it was held that the decided cases showed that where income was derived by a co operative society, the profits were within the exemption, but not if the business was of the nature not covered by the objects of the society.
This line of reasoning has not formed part of the respondent 's argument in this Court and the case therefore has no application to the facts of the present case.
The decision in Cochin Cottage Industries Co operative (1) I.L.R. (2) 9 66 Marketing Society Ltd. vs Commissioner of Income tax, Mysore & c. (1) proceeded on the same ground.
In that case the profit which was held not to be exempt under the Notification was the apportioned profit of the society from its dealings with non members.
In the Surat Peoples ' Co operative Bank Ltd. vs The Commissioner of Income tax, Ahmedabad (2) the profit arose during the course of banking business out of the sale of Government securities which formed part of the stock in trade and as it was a co operative bank the profits made from such sales were held to be exempt from taxation under the Notification.
In the instant case the co operative society (the appellant) is a Bank.
One of its objects is to carry on the general business of banking.
Like other banks money is its stock in trade or circulating capital and its normal business is to deal in money and credit.
It cannot be said that the business of such a Bank consists only in receiving deposits and lending money to its members or such other societies as are mentioned in the objects and that when it lays out its moneys so that they may be readily available to meet the demand of its depositors if and when they arise, it is not a legitimate mode of carrying on of its banking business.
The Privy Council in The Punjab Cooperative Bank Ltd. vs The Commissioner of Incometax, Lahore (3) where the profites arose from the sale of Government securities pointed out at p. 645 that in the ordinary cases the business of a Bank essentially consists of dealing with money and credit.
Depositors put their money in the Bank at a small rate of interest and in order to meet their demands if and when they arise the Bank has always to keep suffi cient cash or easily realizable securities.
That is a normal step in the carrying on of the banking business.
In other words I that is an act done in what is truly the carrying on or carrying out of a business '.
It may be added that another mode of conducting business of a Bank is to place its funds in deposit with other banks and that also is to meet demands which may be made on it.
It was however argued (1) (2) (3) 67 that in the instant case the moneys had been deposited with the Imperial Bank on long term deposits inasmuch as they were deposited for one year and were renewed from time to time also for a year; but as is shown by the accounts these deposits fell due at short intervals and would have been available to the appellant had any need arisen.
Stress was laid on the use of the word I surplus ' both by the tribunal as well as by the High Court and it was also contended before us that in the byelaws under the heading I business of the bank ' it was provided that the bank could I invest surplus funds when not required for the business of the bank in one or more ways specified in section 19 of the Bihar Act (Cl.
4 111(i) of the Bye Laws).
Whether funds invested as provided in section 19 of the Bihar Act would be surplus or not does not arise for decision in this case, but it has not been shown that the moneys which were in deposit with other banks were I surplus ' within that bye law so as to take it out of banking business.
As we have pointed out above, it is a normal mode of carrying on banking business to invest moneys in a manner that they are readily available and that is just as much a part of the mode of conducting a Bank 's business as receiving deposits or lending moneys or discounting hundies or issuing demand drafts.
That is how the circulating capital is employed and that is the normal course of business of a bank.
The moneys laid out in the form of deposits as in the instant case would not cease to be a part of the circulating capital of the appellant nor would they cease to form part of its banking business.
The returns flowing from them would form part of its profits from its business.
In a commercial sense the directors of the company owe it to the bank to make investments which earn them interest instead of letting moneys lie idle.
It cannot be said that the funds of the Bank which were not lent to borrowers but were laid out in the form of deposits in another bank to add to the profit instead of lying idle necessarily ceased to be a part of the stock in trade of the bank, or that the interest arising therefrom did not form part of its business profits.
Under the bye laws 68 one of the objects of the appellant bank is to carry on the general business of banking and therefore subject to the Co operative Societies Act, it has to carry on its business in the manner that ordinary banks do.
It may be added that the various heads under section 6 of the Income Tax Act 'and the provisions of that Act applicable to these various heads are mutually exclusive.
Section 12 is a residuary section and does not come into operation until the preceding heads are excluded.
Commissioner of Income tax vs Basant Rai Takhat Singh (1).
In our opinion, the High Court was in error in treating interest derived from deposits as not arising from the business of the Bank and therefore not falling within the income exempted under the Notification.
The appeal must therefore be allowed and the judgment and order of the High Court set aside.
The appellant will have its costs in this Court and in the Court below.
Appeal allowed.
| The Appellant Bank which was registered under the Co operative Societies 'Act, 1922, received, in the relevant account years, by way of interest on deposits with the Imperial Bank of India certain sums of money.
The Income tax Officer assessed the aforesaid sums under section 12 of the Indian Income tax Act 1922, as income from other sources, but the appellant claimed that the deposits were made not with the idea of making investments but for the purpose of carrying on its business as a bank and that as the interest received on the deposits was profit attributable to its business activities it was not subject to incometax because of the Notification issued by the Central Government under section 6o of the Act.
Under the Notification profits of any Co operative Society are exempt from the tax payable under the Act but not income derived from "other sources" referred to in section 12 of the Act.
Held, that the interest from deposits received by the Appel lant Bank in the present case arose out of a transaction entered into for the purpose of carrying on its banking business and fell within the income exempted under the Notification.
The Punjab Co operative Bank Ltd. vs The Commissioner of Income tax, Punjab, , relied on.
|
N: Criminal Appeal No. 379 of 1986.
From the Judgment and Order dated 13.7.1984 of the Punjab and Haryana High Court in Crl.
Appeal No. 82 D.B. of 1984.
R.L. Kohli and R.C. Kohli for the Appellant.
412 R.S. Suri for the Respondent.
The Judgment of the Court was delivered by JAGANNATHA SHETTY, J.
One may ask the question whether murder by poisoning is not run like any other murder? The learned counsel for the appellant purports to state that it is not.
He relies upon the judicial prescriptions as to the burden of proof in "poison murder" cases.
He contends that the prosecution must prove "that the accused had the poison in his possession".
He asserts that failure to establish that factor should entail the acquittal of the accused.
This is a vital question which goes far beyond the case and it, therefore, requires careful consideration.
Bhupinder Singh Appellant was prosecuted for the murder of his wife by poisoning.
He was sentenced for life imprisonment by the Additional Sessions Judge, Faridkot in Session Case No. 86 of 1983.
His conviction and sentence have been affirmed by the Punjab and Haryana High Court in criminal appeal No. 82 DB of 1984.
He has preferred this appeal by special leave challenging the conviction and sentence.
We may first advert to the prosecution case.
It reveals a sad story.
It runs like this: Gian Kaur, the victim in this case is the only daughter of Baltej Singh.
Baltej Singh like many other parents thought that his problems would be solved by the marriage of his daughter.
He got her married to Bhupinder Singh by spending all his savings.
His relatives also contributed for the marriage.
But ill luck would have it, his problems started immediately after the marriage.
Bhupinder Singh and his parents wanted Gian Kaur to bring Rs. 10,000 from her father.
It was nothing but a demand for dowry.
They stopped up their demand with harassment to Gian Kaur.
Gian Kaur informed her father.
The father could not arrange that much of amount.
He had already spent all that he had in connection with her marriage.
He had also then given presents in cash and kind to Bhupinder Singh.
So he felt helpless.
Unmerciful, Bhupinder Singh asked his wife to go back to her parents ' house.
So she left to seek shelter with her parents.
She remained with them for about eight months.
But how long the father could keep his married daughter away from her husband.
Some parents think that it is a reflection upon them.
Baltej Singh also must have thought like that.
He somehow arranged Rs.6,000 and sent Gian Kaur to her husband 's house.
Gian Kaur rejoined her husband upon making the payment of Rs.6,000.
That appears to have satisfied Bhupinder Singh for about 413 one year.
In the meantime, Gian Kaur had a male child.
Naturally there was jubilation for Baltej Singh.
He performed the customary Chuchhak ceremony and again gave Rs.4,000 and a buffalo as presents to Bhupinder Singh.
Bhupinder Singh ought to have been happy and satisfied.
But he was not.
It was alleged by the prosecution that this time he demanded a motorcycle.
Baltej Singh could not give it.
Gian Kaur, as usual, was again the target.
It was further alleged by the prosecution that Bhupinder Singh threatened to kill his wife if motorcycle was not given to him.
Gian Kaur had kept her father informed about the said demand and the threat.
On July 13, 1983, Gian Kaur died under mysterious circumstances.
Upon receiving that information, Baltej Singh with his brother Baldev Singh reached the place in the evening of that day.
They saw Gian Kaur, lying dead on a charpai.
They suspected foul play.
Baltej Singh gave the information to the police narrating all the above events.
He informed the police that his daughter was killed by Bhupinder Singh and his parents by administering something to her.
On the basis of that information, the F.I.R. was issued.
The investigation of the case was taken by A.S.I. (PW 4).
The body of Gian Kaur was sent to Dr. Sant Prakash Singh (PW 6) for post mortem.
The Doctor Prakash Singh noticed five minor injuries on the body of the deceased.
The brain and other vital organs were also found to be congested.
The Doctor sent stomach contents, portions of small intestine, liver, spleen and kidney to the chemical examiner for the purpose of analysis.
The chemical examiner in his report dated September 14, 1983 has stated that an Organo phosphorus compound was found in the substance sent to him for analysis.
The investigating officer sent that report for opinion of the Doctor Prakash Singh as to the cause of death of Gian Kaur.
The Doctor gave his opinion that the death of Gian Kaur was due to organo phosphorus compound poisoning.
Bhupinder Singh, his father Sher Singh and his mother Mukhtiar Kaur were tried for committing the murder of Gian kaur by administering poison.
The prosecution examined six witnesses and the accused in turn examined one.
The trial court after considering the evidence and other material on record held as follows: The accused had strong motive to get rid of Gian Kaur.
Apparently motive for the murder was the inability of Gian Kaur 414 to satisfy the demand for dowry.
The death of Gian Kaur was not accidental or suicidal.
There was no reason for her to commit suicide.
It was also not a death by food poisoning since the accused and deceased shared common food on the fateful night.
There was none else in the house on that night except Gian Kaur and the accused.
The accused had an opportunity to accomplish their design.
The accused must have administered the poison to the victim.
The injuries found on the body of the deceased indicated the resistence she must have offered when the poison was administered to her.
With these and other conclusions, the trial court finally said: "In the background of the circumstances and evidence discussed above, the only conclusion possible is that Bhupinder Singh and Mukhtiar Kaur did administer poison organo phosphorus compound to Gian Kaur and did cause her death with common intention, which was to get rid of her as she had not been able to persuade his father to meet their demand for motorcycle so as to clear way for another marriage of Bhupinder Singh in his youthful years in order to get more and more of dowry." Accordingly, the trial court found all the three accused guilty of the offence under Section 302 read with Section 34 I.P.C. They were sentenced to imprisonment for life.
Challenging the legality of the conviction and sentence the accused appealed to the High Court.
It was urged before the High Court that the death of Gian Kaur was not homicidal.
She must have in all probability committed suicide since she was suffering from tuberculosis.
It was also urged that the prosecution has failed to establish by evidence the necessary conditions for the proof of murder by poisoning.
The High Court did not agree with those contentions.
The High Court ruled out the theory of suicide.
It was observed that there was no evidence to show that Gian Kaur was suffering from tuberculosis or ever treated for that disease.
The High Court observed: "Case of murder by poisoning is always one of secrecy.
Almost in every such case one has to depend on circumstances.
Doubtless, before a person can be convicted on the strength of circumstantial evidence, the circumstances in question must be satisfactorily established 415 and the proved circumstances must bring home the offence to the accused beyond reasonable doubt.
If those circumstances or some of them can be explained by any reasonable hypothesis then the accused must have the benefit of that hypothesis.
But in assessing the evidence imaginary possibility has no place.
What has to be considered are ordinary human probabilities.
We have already referred to some important circumstances which in our opinion point out to the guilt of Bhupinder Singh and Sher Singh appellants.
In the well known case of Anant Chantman Lagu vs The State of Bombay, ; their Lordships held that in a cause of poisoning, the prosecution must establish: (a) that the death took place by poisoning; (b) that the accused had the poison in his possession; and (c) that the accused had an opportunity to administer the poison to the deceased.
All the three requirements are satisfied in this case.
There is no dispute that the death of the deceased was caused by poisoning.
It has been established by the chemical examiner 's report, that the viscera contained organo phosphorus compound poison.
The evidence of the prosecution witnesses has established that the aforesaid two appellants had the opportunity to administer poison to the deceased and that they had the motive to commit the crime.
Their running away from the house at the time when the Investigating Officer visited their house is also consistent with their guilt and not with their innocence.
" With these observations, the High Court confirmed the conviction and sentence on Sher Singh and Bhupinder Singh while acquitting Mukhtiar Kaur.
The present appeal is only by Bhupinder Singh.
Before embarking on the validity of the main submission made in this appeal, we may first dispose of one other contention urged for the appellant.
Mr. R.N. Kohli, learned counsel for the appellant submitted that it is not enough for the chemical examiner merely to state in his report that the organo phosphorus compound was present in the substance sent to him for examination.
He should have also stated that a lethal dose of the organo phosphorus compound was detected in the substance sent to him.
His report should be full and complete to take the place of evidence which he would have given if he were called to Court as witness.
In the absence of such particulars, the death by 416 poisoning cannot be inferred.
In support of this contention, learned counsel relied upon two decisions of the Allahabad High Court viz. (i) Mt. Gajrani and Anr.
vs Emperor, [A.I.R. 1933 Allahabad 394] and (ii) State vs Fateh Bahadur & Ors., [A.I.R. 1958, Allahabad 1].
In the first case, it was observed that it was not enough for the chemical examiner merely to state his opinion.
He must also state the grounds which formed the basis of his opinion.
The second case was a case of death by arsenic poisoning.
The chemical examiner did not state the quantity of arsenic poison found in the viscera of the deceased.
He did not state whether it was a fatal dose or not.
The High Court pointed out that it would be of the utmost importance before a Court could find any individual guilty of murder by arsenic poison that its complete analysis should be made.
It is not enough to state that arsenic was detected in the body of the deceased.
In our opinion, these observations cannot be taken as a rigid statement of law.
(No hard and fast rule can be laid down as regards the value to be attached to the report of the chemical examiner.
Section 293 of the Code of Criminal Procedure provides that the report ofscientific experts may be used as evidence in any inquiry, trial or other proceedings of the court.
The chemical examiner does not, as a rule, give an opinion as to the cause of death but merely gives report of the chemical examination of the substance sent to him.
The report by itself is not crucial.
It is a piece of evidence.
The only protection to it is that it does not require any formal proof.
It is, however, open to the Court if it thinks fit to call the chemical examiner and examine him as to the subject matter of the report.
The report should normally be forwarded to the Doctor who conducted the autopsy.
In the instant case, that was done.
The Doctor who conducted the autopsy was given a copy of the report of the chemical examiner.
The Doctor in the light of the report gave his opinion that the death of Gian Kaur was by poisoning i.e. organo phosphorus compound.
The report of the chemical examiner coupled with the opinion of the Doctor is, therefore, sufficient to hold that it was a death by poisoning.
This takes us to the main contention urged for the appellant.
It was urged that in a case of murder by poison there are three main points to be proved, firstly did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
It was also urged that if the prosecution fails to prove these factors, then the accused cannot be convicted.
The evidence in the case, according to learned counsel falls 417 short of these requirements and, in particular, as to the question of proof of possession of the poison with the accused and therefore the accused is entitled to acquittal.
We have been referred to some decisions of this Court in support of the contention urged.
We have also examined some other cases bearing on the question raised.
A brief survey of these cases would be useful to appreciate the contention urged for the appellant.
There are two unreported decisions of this Court of the year 1958.
The first one is in Chandra Kant Myalchand Seth 's case [Criminal Appeal No. 120 of 1957 decided on 19.2.1958].
There a woman died of alkali cyanide.
The husband of the deceased was tried and convicted by the trial court for the offence of murder.
The conviction was set aside by this Court.
In the course of the judgment, it was observed: "Before a person can be convicted of murder by poisoning, it is necessary to prove that the death of the deceased was caused by poison, that the poison in question was in possession of the accused and that poison was administered by the accused to the deceased." The acquittal, however, was based on the consideration of the entire facts and circumstances of the case.
It was found that there was a greater motive to the deceased to commit suicide than to the accused to commit murder.
This Court also took note of the concern and conduct of the accused when he found his wife lying unconscious.
The accused ran to the house of his friend and returned with a Doctor to render assistance to the victim.
The accused called another Doctor for the same purpose.
He was also found weeping all the while.
Taking into consideration of all these factors, this Court found no justification to sustain the conviction of the accused.
Dharambir Singh vs State of Punjab, (Criminal Appeal No. 98 of 1958 decided on 4.11.1958) is another case of homicidal action by cyanide poisoning.
It was perhaps in this case, the guidelines as to the proof of certain facts in "poison murder cases" were laid down by this Court.
It was observed: "Where the evidence is circumstantial the fact that the accused had motive to cause death of the deceased, though relevant, is not enough to dispense with the proof of certain facts which are essential to be proved in such cases, namely (firstly) did the deceased die of poison in 418 question? (secondly) had the accused the poison in his possession? and (thirdly) had the accused an opportunity to administer the poison in question to the deceased? It is only when the motive is there and these facts are all proved that the court may be able to draw the inference, that the poison was administered by the accused to the deceased resulting in his death.
" After laying down these principles, the court considered the entire evidence on record which indicated the likelihood of the deceased committing suicide or another person to have administered the poison to the deceased.
This Court accordingly acquitted the accused by extending the benefit of doubt.
If one prefers to go yet further back we find a decision of the Allahabad High Court which is exactly on the principles laid down in Dharambir Singh case.
In Mt. Gajrani vs Emperor, A.I.R. 1933 All.
394 Benett, J. speaking for the Court observed (at p. 394): "In a case of murder by poison there are three main points to be proved: firstly, did the deceased die of the poison in question; secondly, had the accused got the poison in question in his or her possession; and thirdly, had the accused an opportunity to administer the poison in question to the deceased.
If these three points are proved, a presumption may under certain circumstances be drawn by the Court that the accused did administer poison to the deceased and did cause the death of the deceased.
It is not usual that reliable direct evidence is available to prove that the accused did actually administer poison to the deceased.
The evidence of motive which is frequently given in these cases is of subsidiary importance, and the mere fact that the accused had a motive to cause the death of the deceased is not a fact which will dispense with the proof of the second and third points that the accused had the poison in his or her possession, and that the accused had an opportunity to administer the poison.
" The above proposition found its way into Mohan vs State of Uttar Pradesh, ; and Ram Gopal vs State of Maharashtra, A.I.R. 1972 S.C. 656.
In Mohan 's case, the death in question was by arsenic poisoning.
In that case, the prosecution was able to prove that the accused gave 'peras ' to the victim as 'pershad ' and the victim 419 died after eating the 'pershad '. 'Pershad ' contained arsenic.
There was thus direct evidence as to the possession of the poison with the accused.
This Court, therefore, had no difficulty to sustain the conviction and sentence awarded to the accused.
Ram Gopal 's case was concerned with homicidal action by administering a compound called "kerosene and orango choloro compound".
The High Court, relying upon the motive and other circumstantial evidence convicted the accused for the offence of murder although there was no evidence that the accused was in possession of poison.
This Court could not agree with the view taken by the High Court.
The analysis of the evidence produced by the prosecution revealed that the motive alleged against the accused was not fully established.
The incriminating circumstantial evidence against the accused was also found to be insufficient.
So the conviction of the accused was set aside and the acquittal was recorded.
Sharda E. Chand Sarda vs State of Maharashtra, ; is yet another case of death by cyanide poisoning for which the husband of the deceased was tried for murder.
There was no direct evidence to establish that the accused was in possession of that poison.
The High Court, however, relied upon the circumstantial evidence and convicted the accused.
In the appeal preferred by the accused, this Court did not agree with the reasoning of the High Court.
After referring to Ram Gopal 's case.
Fazal Ali, J., focussed the attention on the following four factors: The learned Judge observed (at p.167): "So far as this matter is concerned, in such cases the court must carefully scan the evidence and determine the four important circumstances which alone can justify a conviction: (1) there is a clear motive for an accused to administer poison to the deceased, (2) that the deceased died of poison said to have been administered, (3) that the accused had the poison in his possession, (4) that he had an opportunity to administer the poison to the deceased.
" 420 The learned Judge went on to state: "In the instant case, while two ingredients have been proved but two have not.
In the first place, it has no doubt been proved that Manju died of potassium cyanide and secondly, it has also been proved that there was an opportunity to administer the poison.
It has, however, not been proved by any evidence that the appellant had the poison in his possession.
On the other hand, as indicated above, there is clear evidence of PW 2 that potassium cyanide could have been available to Manju from the plastic factory of her mother, but there is no evidence to show that the accused could have procured potassium cyanide from any available source.
We might here extract a most unintelligible and extra ordinary finding of the High Court: "It is true that there is no direct evidence on these two points, because the prosecution is not able to lead evidence that the accused had secured potassium cyanide poison from a particular source.
Similarly there is no direct evidence to prove that he had administered poison to Manju.
However, it is not necessary to prove each and every fact by a direct evidence.
Circumstantial evidence can be a basis for proving this fact.
" The comment by the high Court appears to be frightfully vague and absolutely unintelligible.
While holding in the clearest possible terms that there is no evidence in this case to show that the appellant was in possession of poison, the High Court observes that this fact may prove either by direct or indirect (circumstantial) evidence.
But it fails to indicate the nature of the circumstantial or indirect evidence to show that the appellant was in possession of poison.
If the Court seems to suggest that merely because the appellant had the opportunity to administer poison had the same was found in the body of the deceased, it should be presumed that the appellant was in possession of poison, then it has committed a serious and gross error of law and has blatantly violated the principles laid down by this Court.
The High Court has not indicated as to what was the basis for coming to a finding that the accused could have procured the cyanide.
On the other hand, in view of the 421 decision in Ram Gopal 's case failure to prove possession of the cyanide poison with the accused by itself would result in failure of the prosecution to prove its case." This Court then went into the merits of the prosecution case.
It was observed that the deceased was of sensitive mind.
She had occasionally suffered mental depression due to her inability to adjust herself to her husband 's family.
It was also observed that the deceased had access to the poison in question.
She could have secured the poison from the factory of her mother.
Considering these and other circumstances, it was held "that it might be a case of suicide or murder and both were equally probable".
So the accused was given the benefit of doubt and he was acquitted.
From the foregoing cases, it will be seen that in poison murder cases, the accused was not acquitted solely on the failure of the prosecution to establish one or the other requirement which this Court has laid down in Dharambir Singh case.
We do not also find any case where the accused was acquitted solely on the ground that the prosecution has failed to prove that the accused had the poison in his possession.
The accused in all the said cases came to be acquitted by taking into consideration the totality of the circumstances including insufficient motive, weakness in the chain of circumstantial evidence and likelihood of the deceased committing suicide.
We do not consider that there should be acquittal on the failure of the prosecution to prove the possession of poison with the accused.
Murder by poison is invariably committed under the cover and cloak of secrecy.
Nobody will administer poison to another in the presence of others.
The person who administers poison to another in secrecy will not keep a portion of it for the investigating officer to come and collect it.
The person who commits such murder would naturally take care to eliminate and destroy the evidence against him.
In such cases, it would be impossible for the prosecution to prove possession of poison with the accused.
The prosecution may, however, establish other circumstances consistent only with the hypothesis of the guilt of the accused.
The court then would not be justified in acquitting the accused on the ground that the prosecution has failed to prove possession of the poison with the accused.
The poison murder cases are not to be put outside the rule of circumstantial evidence.
There may be obvious very many facts and circumstances out of which the Court may be justified in drawing 422 permissible inference that the accused was in possession of the poison in question.
There may be very many facts and circumstances proved against the accused which may call for tacit assumption of the factum of possession of poison with the accused.
The insistence on proof of possession of poison with the accused invariably in every case is neither desirable nor practicable.
It would mean to introduce an extraneous ingredient to the offence of murder by poisoning.
We cannot, therefore, accept the contention urged by the learned counsel for the appellant.
The accused in a case of murder by poisoning cannot have a better chance of being exempted from sanctions than in other kinds of murders.
Murder by poisoning is run like any other murder.
In cases where dependence is wholly on circumstantial evidence, and direct evidence not being available, the Court can legitimately draw from the circumstances an inference on any matter one way or the other.
The view that we have taken gets support from the decision of this Court in Ananth Chintaman Laguy vs The State of Bombay, ; where Hidayatullah, J., has given an anxious consideration to the three propositions laid down in Dharambir Singh case.
The learned Judge did not consider them as invariable criteria of proof to be established by the prosecution in every case of murder by poisoning.
The learned Judge said (at p. 519 520): "It is now necessary to consider the arguments which have been advanced on behalf of the appellant.
The first contention is that the essential ingredients required to be proved in all cases of murder by poisoning were not proved by the prosecution in this case.
Reference in this connection is made to a decision of the Allahabad High Court in Mt. Gajrani vs Emperor.
AIR 1933 All 394 and to two unreported decisions of this Court in Chandrakant N Nyalchand Seth vs The State of Bombay, Criminal Appeal No. 120 of 1957 decided on February 19, 1958 and Dharambir Singh vs The State of Punjab, Criminal Appeal No. 98 of 1958, decided on 4.11.1958.
In these cases, the Court referred to three propositions which the prosecution must establish in a case of poisoning; (a) that death took place by poisoning; (b) that the accused had the poison in his possession, and (c) that the accused had an opportunity to administer the poison to the deceased.
The case in Cr. A. No. 98 of 1958 D/ 4.11.1958 (SC) turned upon these three propositions.
There, the deceased had died as a result of poisoning by potassium cyanide, which poison was also found in the 423 autopsy.
The High Court had disbelieved the evidence which sought to establish that the accused had obtained potassium cyanide, but held, nevertheless that the circumstantial evidence was sufficient to convict the accused in that case.
This Court, did not, however, accept the circumstantial evidence as complete.
It is to be observed that the three propositions were laid down not as the invariable criteria of proof by direct evidence in a case of murder by poisoning, because evidently if after poisoning the victim.
the accused destroyed all traces of the body, the first proposition would be incapable of being proved except by circumstantial evidence.
Similarly, if the accused gave a victim something to eat and the victim died immediately on the ingestion of that food with symptoms of poisoning and poison, in fact, was found in the viscera, the requirement of proving that the accused was possessed of the poison would follow from the circumstances that the accused gave the victim something to eat and need not be separately proved.
" The learned Judge continued: "The cases of this Court which were decided proceeded upon their own facts, and though the three propositions must be kept in mind always, the sufficiency of the evidence, direct or circumstantial? to establish murder by poisoning will depend on the facts of each case.
If the evidence in a particular case does not justify the inference that death is the result of poisoning because of the failure of the prosecution to prove the fact satisfactorily, either directly or by circumstantial evidence, then the benefit of the doubt will have to be given to the accused person.
But if circumstantial evidence, in the absence of direct proof of the three elements, is so decisive that the Court can unhesitatingly hold that the death was a result of administration of poison (though not detected) and that the poison must have been administered by the accused person, then the conviction can be rested on it." So much for the principles for which the learned counsel for the appellant fought for.
On the facts there is concurrence of opinion between the two courts below.
This Court seldom re examines the findings of fact reached by the High Court.
We may, however, out of 424 deference to the counsel briefly refer to the evidence.
The prosecution has established the motive for the murder.
The proof of motive goes a long way to tilt the scale against the accused which provides a foundational material to connect the chain of circumstances.
The facts which hear on motive are distressing.
After the marriage, Gian Kaur was subjected to repeated harassment for not satisfying the demand for dowry made by Bhupinder Singh.
Baltej Singh (PW2) has stated that Bhupinder Singh asked Gian Kaur to bring Rs. 10,000.
The parents of Bhupinder Singh were also parties to that demand.
Baltej Singh with all difficulties satisfied that demand in part by payment of Rs.6,000.
Bhupinder Singh thereafter demanded a motorcycle.
When that was not immediately given Bhupinder Singh held out a threat to his wife that she would be killed.
This was conveyed to Baltej Singh.
Before he could take a decision in this regard he was shocked to receive the news of death of Gian Kaur.
This has been proved by the testimony of Baltej Singh (PW 2) and Nazir Singh (PW 3).
The demand for dowry followed by harassment to the deceased has been thus satisfactorily proved.
The evidence of the Doctor and the report of the chemical examiner has established beyond doubt that Gian Kaur died of organo phosphorus compound poisoning.
Bhupinder Singh had an opportunity to administer that poison.
There was nobody else in the house.
All the inmates had their common food in the night.
All of them slept in the same place.
Both the Courts have ruled out the theory of suicide by Gian Kaur.
We entirely agree with that finding.
She could not have thrown her child to the mercy of others by committing suicide and indeed no mother would venture to do that.
The postmortem report giving the description of injuries found on the body of the deceased would also defy all doubts about the theory of suicide.
She had contusion on the front of right leg.
Abrasion on the front of the left leg just below the knee joint.
Linear abrasion on the back of the right hand.
Linear abrasion on the antro lateral aspect of left fore arm in its middle.
And contusion on the back of right elbow joint.
These injuries, as the Courts below have observed could have been caused while Gian Kaur resisted the poison being administered to her.
The behaviour of Bhupinder Singh in the early hours of that fateful day by going to his field as if nothing had happened to his wife is apparently inconsistent with the normal human behaviour.
There was no attempt made by him or other inmates of the house to look out for any Doctor to give medical attention to the victim.
The movement and disposition of Bhupinder Singh towards the victim and situations 425 are incompatible with his innocence.
On the contrary, it gives sustenance to his guilt.
The Courts below having considered all these facts and circumstances had no difficulty to convict the accused for murder and we see no good reason to interfere with that conclusion.
In the result, the appeal fails and is dismissed.
R.S.S. Appeal dismissed.
| An agreement for distribution of the film "Savere Wali Gadi" was entered into on 19th March, 1983 between the petitioner as the distributor and the respondent as the producer.
The agreement contained an arbitration clause.
A sum of Rs.3.40 lakhs paid to the respondent and acknowledged by him earlier to the agreement was deemed to have been adjusted against the first instalment.
In or about 1984 about Rs. 3 lakhs were further advanced to the respondent.
As per the agreement the respondent was to hand over the prints of the film by 10th August, 1983, but it was not done.
On 11th March, 1985 a further agreement was entered into between the parties whereby the respondent agreed to pay a total sum of Rs.6.50 lakhs to the petitioner for giving up his distribution rights in the first agreement.
The first agreement was accordingly irrevocably cancelled and superseded by the subsequent agreement.
The respondent took up the matter with Motion Pictures Association to de register the film in the name of the petitioner.
The Motion Picture Association stated that de registration would be allowed only when the respondent pays Rs.6.50 lakhs to the petitioner or deposits the amount with the Association.
The petitioner 's claim before the Association was that the respondent committed breach of the subsequent agreement.
A civil suit was filed in the High Court for recovery of Rs.6.50 lakhs with interest, by the petitioner against the respondent.
Later, an application under section 20 of the was made.
The Single Judge held that the first agreement had revived and directed the 528 filing of the agreement.
On appeal, the Division Bench confirmed the order.
This special leave petition is against the order of the Division Bench of the High Court.
Dismissing the special leave petition, this Court, ^ HELD: 1.1 Whether in any particular case there was a complete novation of a contract in the sense that the new contract replaced or substituted the old contract, could depend upon the facts and circumstances of the case.
[531B C] 1.2 When the agreement of 1985 was entered into, it was the intention of the parties that the earlier agreement would be superseded and a new arrangement was sought to be brought about whereby the rights of the petitioner under the earlier agreement were to be yielded for a sum of Rs.6.50 lakhs.
This amount of Rs.6.50 lakhs was never paid by the respondent, and it was the case of the petitioner that the earlier agreement stood cancelled.
The petitioner who claimed rights under the earlier agreement, sought the continuation of his registration of distributorship.
This registration could continue only by virtue of the earlier agreement which had revived.
[530G HG; 531B] Babulal Marwari and others vs Tulsi Singh and others, A.I.R. 1940 Patna 121, refered to.
2.1 Sub section (1) of Section 20 of the gives an option to the parties by the use of the expression 'may ', but the other sub sections, if the conditions are fulfilled, make it obligatory for the Court to direct filing of an arbitration agreement.
[532G] 2.2 Indubitably, there was an arbitration clause in the agreement.
The parties have applied for reference.
The Division Bench has reiterated that the original agreement dated 19th March, 1983 which ceased to have effect and came to an end by the agreement dated 11th March, 1985 stood revived by virtue of the two letters dated 15th July, 1985 and 11th September, 1985 by the appellant.
It is clear that the petitioner in the above letters fell back on the original contract of 19th March, 1983.
This was accepted by the respondent.
Hence there was at all relevant times a valid and binding contract between the parties.
That contract contained an arbitration clause.
There was nothing to disentitle the parties to have their rights adjudicated in terms of an arbitration clause.
The civil suit filed does not by itself preclude filing of proper arbitration agreement between the parties.
There being no impediment 529 in filing the arbitration agreement which was subsisting at the relevant time when the High Court directed that the arbitration agreement be filed, that discretion should not be interfered with.
[532G H; 531F G]
|
Civil Appeal Nos.
1891 1895 of 1982.
Appeals by Special leave from the Judgment and order dated the 11th September, 1979 of the Madhya Pradesh High Court in Misc.
Petitions Nos; 77 to 81 of 1979.
J. Ramamurthy and Ms. R. Vaigai for the Appellants.
G.B. Pal, S.K. Gambhir, Ashok Mahajan and Ms. Sunita Kripalani for the Respondents.
The Judgment of the Court was delivered by DESAI, J.
Nothing appears more well settled than that the extraordinary jurisdiction under article 226 conferred on the High Court was a weapon forged to overreach injustice and secure and advance justice.
When therefore, this extraordinary power is used to defeat justice and to promote technicality not only its raison d 'etre is violated but it becomes a handy instrument for those to whom litigation cost is a luxury enjoyed at the cost of others and employed to exhaust and harass an unequal opponent.
Sad as it may appear that unfortunate situation emerges in this appeal.
The first respondent Shree Synthetics Ltd. ( 'respondent ' for short) appears to be a company governed by the .
It has set up a factory at Ujjain where it manufactures polyester fibre.
Appellants in each of these appeals were the workmen of the respondent.
There is a trade union of the workmen employed by the respondent of which at the relevant time three out of the five appellants in this group of appeals were office bearers.
Babulal Nagar was the President of the Union: Babulal Jaiswal was the General Secretary and Ramesh Chandra was the Secretary.
776 According to the respondents on June 3, 1975 around 11.10 P. M. One Verma a workman of the respondent on the shift being over went out of the compound gate and took his seat i l a tempo when Babulal Nagar and Babulal Jaiswal along with three other appellant approached him and asked Verma to alight from the tempo as they wanted to talk to him.
On Verma 's disinclination to come out of.
the vehicle, it was alleged that Babulal Nagar and Babulal Jaiswal pulled Verma out of the vehicle and all the appellants assaulted him with fists and kicks and felled him down as a result of which Verma sustained bleeding injuries on his head.
On hearing the commotion, staff of the security department intervened and rescued him.
Setting out these allegations a charge sheet was drawn up and served on the five appellants followed by a composite domestic enquiry at the end of which all of them were dismissed from service.
The appellants moved five different applications before the labour Court questioning the validity of the domestic enquiry held against them as also the legality and propriety of the orders terminating their services.
The Labour Court was of the opinion that the domestic enquiry was held according to the relevant rules and as there was evidence in support of the alleged misconduct the management was justified in imposing the penalty of dismissal from service and accordingly all the five applications were dismissed.
The appellants filed five separate revision petitions before the industrial Court under Secs.
66 and 67 of the Madhya Pradesh Industrial Relations Act, 1950 Act for short).
All the five revision petitions were heard by the President of the Industrial Court at Indore who was of the opinion that the entire approach of the inquiry officer Manager in arriving at the findings of misconduct in his enquiry appear to be biased and unfair and that the conclusions are neither fair nor reasonable and as such the dismissal cannot be sustained on the basis thereof Accordingly he, by a common judgment dated February 26, 1979, allowed all the revision petitions and set aside the orders of the Labour Court dismissing the applications and remanded the matters to the Labour Court for a fresh decision after giving both the parties due opportunity to adduce evidence in respect of the alleged misconduct.
The respondent moved five separate misc.
petitions in the High 777 Court of Madhya Pradesh, Jabalpur at Indore under articles 226 and 227 of the Constitution questioning the correctness of the decision of the Industrial Court.
A Division Bench of the High Court held that the Industrial Court exceeded its jurisdiction by interfering with the findings of facts and this was ill error apparent on the face of the award.
Accordingly, it issued a writ of certiorari and quashed the decision of the Industrial Court.
Hence these five civil appeals by special leave.
Conditions of service in respect of the employees employed by the respondent are governed by the Certified standing orders.
section O. 12 (f) which was relied upon by the respondent for imputing mis conduct to the appellants reads as under: "12.
Disciplinary action for misconduct (l) The following acts or omissions on the part of an employee shall amount to a major misconduct: (a) to (e) xx xx xx (f) drunkenness, riotous or disorderly behaviour, during working hours at the undertaking or conduct endangering the life or safety of any person, intimidation, physical duress, or any act subversive of discipline.
The allegation in the charge sheet on the basis of which the domestic enquiry was held reads as under: F "Babulal was on duty on 3.6.1975 in the B Shift from 3 p. m. to 11 p. m.
At about 8.15 p.m. when Shri Satya Prakash Verma, a Telephone Operator and Shri K. C. Bagdi, Shift time keeper were coming out of the canteen after taking their meals, Babulal Nagar and Babulal Jaiswal were sitting in the lawn in front of the canteen.
At that time, Babulal Jaiswal asked Babulal Nagar to explain to Verma the whole position in Hindi.
There upon Babulal Nagar went to Bagdi and Verma and uttered the following meaningful words: You are just a child now.
You do not understand anything; if you interfere in this, you will have to pay a heavy price, (true translation) Verma gave no reply and both Verma and Bagdi 778 went into the office.
Thereafter, at 9.15 p.m. A. K. Awasthi and Rajendra Jain went to the canteen to take their meals.
At that time both the petitioners namely, Babulal Nagar and Babulal Jaiswal were present there.
Babulal Nagar took out a false token and challenged that it may be checked by any security official.
Rajendra Jain thereupon said that he was not in his uniform.
At that time, Babulal Jaiswal uttered some filthy words and thereafter both Babulal Nagar and Babulal Jaiswal left the canteen uttering filthy abuses.
At 9.30 p.m. Babulal Nagar spoke to Verma on telephone that he should come out of the Plant as he wanted to talk to him.
Verma, therefore, come out in the lawn from his office where both Babulal Nagar and Babulal Jaiswal were present.
At that time, Babulal Jaiswal said to Verma as under: "You have put end to our movement.
In future things will not be right, if you interfere with us, and threatened, that we shall see at 11 O ' clock outside the gate.
(true translation) After the shift was over at about 11.10 p m. whom Verma went out of the gate and took his seat in the tempo.
Babulal Nagar and Babulal Jaiswal along with the other three petitioners went to him and asked Verma to come out of the tempo as they wanted to talk to him.
Verma replied that they could talk to him there.
Thereupon both Babulal Nagar and Babulal Jaiswal pulled Verma out of the tempo and all the petitioners assaulted Verma with fists and kicks and felled him down as a result of which he sustained a bleeding injury on his head.
On hearing the cresc of Verma members of the security Department rescued him and took him inside the gate.
Apart from anything else, a very serious question touching upon the jurisdiction of the Disciplinary Authority to hold an enquiry on the allegation that S.O. 12 (1) (f) was violated would arise before the Labour Court more particularly in view of the recent decision of this Court in M/s Glaxo Laboratories (I) Ltd. vs Presiding officer, Labour Court, Meerut & Ors.
wherein section O. 22 applicable to Glaxo Laboratories (I) Ltd. wh ch is in pari materia 779 with the section O. 12 (1) (f) came up for construction of this Court.
After an exhaustive review of the various decisions: on the subject, this Court after repelling the construction canvassed on behalf: of the appellant in that case that such acts as drunkenness, riotous or disorderly behaviour are per se misconduct uncomplicated with time place content and wherever committed would constitute misconduct, held that the various acts of misconduct therein set out would be misconduct for the purpose of the relevant standing orders, if committed within the premises of the establishment or in the vicinity thereof.
The Court further held that what constitutes establishment or its vicinity would depend upon the facts and circumstances of each case.
But we shall not finally pronounce on this point as the industrial Court had remanded the matter to the Labour Court which has jurisdiction to examine this case and we are inclined to uphold that order.
Therefore, the narrow question which we propose to examine in this case is whether the High Court in exercise of its extraordinary jurisdiction under articles 226 and 227 should have by giving undue importance to a technical objection of jurisdiction which on proper fathoming, it itself lacked should have set aside a well considered reasoned judgment of the President of the Industrial Court which again had merely remanded the matter thus prolonging to some extent the agony of the unemployed workers commencing from 1975.
Let us at the commencement acquaint ourselves with the scope and ambit of the power of the Labour Court as such as the Industrial Court under the Act which would provide a correct perspective to determine whether the High Court in exercise of its extraordinary jurisdiction under articles 226 and 227 was at all justified in interfering with the order mad, by the Industrial Court or that legalese prevailed over substantial social justice.
61 prescribes the powers of the Labour Court which inter alia includes the power (A) to decide (a) disputes regarding which application has been made to it under sub section (3) of section 31 of the Act Sec.
31 enables an employee to make an application for relief against all order of an Employer made under ally of the standing orders.
Dismissal from service is an order made under the relevant standing orders.
A relief against such order can be obtained by making all application under Sec.
Entry I in 780 Schedule II of the Act prior to the amendment of 1981 Provided that the Labour Court may examine: "the propriety or legality of an order passed or action taken by an employer acting or purporting to act under the Standing orders.
The only feature worth noticing is that the scope ambit and contours of the jurisdiction of the Labour Court in such an application would have to be determined within the parameters or the expression the propriety or legality of an order.
Against an order made by the Labour Court under Sec.
61, a revision would lie under Sec. 66 to the Industrial Court.
Sec. 66 has been wholly recast in 1981.
However at the relevant time, Sec. 66 read as under: "66; Revision.
(1) The Industrial Court may, on the application by any party to a case which has been finally decided by a Labour Court other than a case decided under paragraph (D) of sub section (1) of section 61, call for and examine the record of such case and may pass order in reference thereto as it thinks fit: Provided that the Industrial Court shall not vary or reverse any order of the Labour Court under this section (i) it is satisfied that the Labour Court has (a) exercised jurisdiction not vested in it by law; or (b) failed to exercise a jurisdiction so vested; or (c) acted in exercise of its jurisdiction illegally to material irregularity; (ii) notice has been served on the parties to the case and opportunity given to them for being heard.
(2) No application under sub section (I) shall lie to the Industrial Court unless it is made within thirty days of the date on which the case has been finally decided by the Labour Court; 781 Provided that in computing the period of thirty days the period requisite for obtaining a copy of the order shall be excluded.
" Having noticed the relevant provisions, it is now necessary to ascertain with precision the jurisdiction of the Labour Court under Sec.
The scheme of the standing orders applicable to the respondent Company would show that a penalty of dismissal or removal from service can be imposed after holding a domestic enquiry According to the relevant provisions in the standing orders, such an order when made would be open to challenge by a substantive application under Sec. 66 (1) and in such an application if and when made, the Labour Court will have jurisdiction to decide the legality and the propriety of the order.
When jurisdiction is conferred union the Labour Court, not only to examine the legality of the order as also the propriety of the order, the Labour Court can in exercise of the jurisdiction examine the propriety or impropriety of the order.
The expression 'propriety ' is variously understood, one meaning assigned to it being 'justice ' in Legal Thesaurus by Burton at page 902.
Amongst various shades of meaning assigned to the expression, the oxford English Dictionary, VOl.
VIII page 1484 sets out 'fitness; appropriateness; aptitude; suitability; appropriateness the circumstances or conditions, conformity with requirement; rule or principle, rightness, correctness, justness etc. ' If therefore, the justice or the justness in relation to a legal proceeding where evidence is led is questioned and the authority is conferred with jurisdiction to examine the propriety of the order or decision that authority will have the same jurisdiction as the original authority to come to a different conclusion on the same set of facts.
If any other view is taken the expression 'propriety ' would lose all significance.
The expression 'legality and propriety ' has been used in various statutes where appellate or revision jurisdiction is conferred upon a superior authority.
In Raman & Raman Ltd. vs The State of Madras & Anr.
while examining the ambit of the jurisdiction of the State Government under Sec.
64A of the as amended by the Motor Vehicles (Madras) Amendment Act, 1948 to interfere with the orders of subordinate Regional Transport Authority on the ground of propriety, this Court observed as under: "The word "propriety" has nowhere been defined in the Act and is capable of a variety of meanings.
In the 782 Oxford English Dictionary (Vol. VIII), it has been stated to mean "fitness; appropriateness; aptitude; suitability; appropriateness to the circumstances or conditions; conformity with requirement, rule or principle; rightness, correctness, justness, accuracy".
If the State Government was of the opinion that respondent No. I had better facilities for operation than the appellant and their service to the public would be more beneficial, lt could not be said that the State Government was in error in thinking that the order of the Board confirming the order of the Regional Trans port Authority was improper.
" In Moti Ram vs Suraj Bhan & Ors.
while examining the scope and ambit of jurisdiction of the High Court under Sec.
15 (5) of the East Punjab Urban Rent Restriction Act, 1949, this Court observed as under: "Under Sec. 15 (5) the High Court has jurisdiction to examine the legality or propriety of the order under revision and that would clearly justify the examination of the propriety or legality of the finding made by the authorities in the present case about the requirement of the landlord under section 13 (3) (a) (iii).
" After referring to these two decisions, in Ching Chong Sine vs Puttay Gowder, Alagiriswami, J. held that tho court exercising revisional jurisdiction to decide the legality or propriety of an order has the power to come to a conclusion different from that arrived by the subordinate court on the same set of circumstances.
In Ahmedabad Sarangpur Mills Company Ltd vs Industrial Court, Ahmedabad and Anr.
a Division Bench of the Gujarat High Court held that the expression 'legality and propriety ' in section 78(1) of the Bombay Industrial Relations Act does not limit the jurisdiction of the labour court to a revisional jurisdiction.
And that any order made by the employer under the standing order is subject to the jurisdiction conferred on the labour court under Sec. 78, which can scrutinise the legality and propriety of the order.
This jurisdiction was described by the court as original jurisdiction meaning thereby that the labour 783 court can come to an entirely different conclusion on the same set of facts.
This view was followed by another Division Bench of the Gujarat High Court in Manekchown and Ahmedabad Manufacturing Company Ltd vs Industrial Court, and another.
In Vithoba Maruti Chavan vs section Taki Bilgrami, Member Industrial Court, Bombay and Anr., a Division Bench of the Bombay High Court held that the power to decide 'propriety ' and legality of the order made under standing order does not confer a mere revisional jurisdiction but a wider jurisdiction which will enable the Labour Court to set aside the order of the employer depending upon the facts and circumstances of the case.
Mr. Pai on the other hand drew our attention to Vaidyanath vs The Madhya Pradesh vs State Road Transport Corporation and Ors.
While observing that a Labour Court cannot exercise the power of an appellate court and cannot reappraise the evidence yet both the Labour Court or the Industrial Tribunal can interfere with the findings of fact of the inquiry officer of the employer only where they are not supported by any legal evidence or are so perverse that no reasonable person would arrive at such findings on the materials placed before him It was held that the power of the Labour Court or the Industrial Court under the Act are not wider than those of Industrial Tribunal under the before the introduction of Sec.
11 A in the latter Act.
In Kymore Cement Mazdoor Congress vs Industrial Court, Indore and Ors., it was held that the expression 'illegally ar with material irregularity in sub cl.
(c) of the first proviso of Sec.
66(1) do not cover either errors of facts or law and they do not refer to the decision arrived at but to the manner in which it is reached.
Approaching the matter from this angle, the High Court set aside the decision of the Industrial Court in revision against the order of the Labour Court on the ground that the Industrial Court had interfered with a finding of fact which even if erroneous would not confer jurisdiction on the Industrial Court to interfere in exercise of revisional jurisdiction Mr. Pai emphasised that the view of M.P. High Court on the interpretation of Sec. 61 should prevail over the view of Gujarat High Court interpreting a different statute.
This does not carry conviction because Sec. 61 of the Act is in pari materia with Sec.
78 784 of the Gujarat Act.
However, it would be profitable to refer to the decision of this Court in Awdesh Kumar Bhatnagar vs The Gwalior Rayon Silk Mfg.
(Weaving) Co. Ltd. and Anr.
in which this Court while examining the scope of the jurisdiction conferred by Sec. 66 on the Industrial Court under the Act held that if the Labour Court has committed serious mistakes, the Industrial Court has jurisdiction to interfere with the same and upheld the decision of the Industrial Court which had interfered with the findings of facts recorded by the Labour Court A full Bench of the Madhya Pradesh High Court in Nand Kumar Singh vs The State Industrial Court, Indore and Ors held that perverse or arbitrary findings based on no material fall within the ambit of the phrase "exercise of jurisdiction illegally or with material irregularity" justifying interference in revision.
It is not necessary to further multiply the authorities.
Therefore, it appears well established that the Labour Court having jurisdiction to examine the legality and propriety of the order made by the employer under the standing order will have jurisdiction to examine the propriety of the order which will permit it to come to a conclusion different from the role to which the employer arrived at Such being the amplitude of the jurisdiction of the Labour Court if upon a wrong view of ambit of its jurisdiction Labour Court approaches the matter as if it exercises narrow revisional jurisdiction, the industrial Court in revision can interfere on the ground of failure to exercise jurisdiction vested in the Labour Court or material irregularity in exercise of its jurisdiction.
66(1) of the Act provides that the Industrial Court omitting the portion not relevant for the present purpose, may call for and examine the record of such case and pass order in reference thereto as it thanks fit.
If the Industrial Court has the jurisdiction to pass any order in reference to a case called for by it thinks fit, obviously it can come to a conclusion on the same set of facts different from the one to which the Labour Court had arrived.
It was however urged that this jurisdiction of wide amplitude has been cut down by the proviso which provides that the Industrial Court shall not very or reverse any order of the Labour Court under Sec.
66(1) unless (i) it is satisfied that the Labour Court has (a) exercised jurisdiction not vested in it by law; or (b) failed to exercise a 785 jurisdiction so vested; or (c) acted in exercise of its jurisdiction A illegally or with material irregularity.
It was urged that these clauses so circumscribe and cut down the jurisdiction of the Industrial Court under Sec. 66 as to be on par with Sec. 115 of the Code of Civil Procedure.
The main part of Sec.
61 clearly spells out the jurisdiction of the Industrial Court to pass any order in reference to the case brought before it as it thinks fit.
The expression 'as it thinks fit ' confers a very wide jurisdiction enabling it to take an entirely different view on the same set of facts.
The expression 'as it thinks fit ' confers a very wide jurisdiction enabling it to take an entirely different view on the same set of facts The expression 'as it thinks fit ' has the same connotation, unless context otherwise indicates, 'as he deems fit ' and the latter expression was interpreted by this Court in Raja Ram Mahadev Paranjype & Ors.
vs Aba Maruti Mali & Ors to mean to make an order in terms of the statute, an order which would give effect to a right which the Act has elsewhere conferred.
Is this jurisdiction so circumscribed as to bring it on par with Sec. 115 of the, Code of Civil Procedure ? Proviso does cut down the ambit of the main provision but it cannot be interpreted to denude the main provision of any efficacy and reduce it to a paper provision.
Both must be so interpreted as to permit interference which if not undertaken there would be miscarriage of justice.
Sub cl.
(c) of the first proviso to Sec.
66(1) will permit the Industrial Court to interfere with the order made by the Labour Court, if the Labour Court has acted with material irregularity in disposal of the dispute before it.
If the finding recorded by the Labour court is.
such to which no reasonable man can arrive, obviously, the Industrial Court in exercise of its revisional jurisdiction would be entitled to interfere with the same even if patent jurisdictional error is not pointed out.
Reverting to the facts of this case, the Industrial Court while having the revision petitions found that the petitioners were trade union workers and the three of them were the office bearers of the Union.
It was further found that a material piece of evidence clearly pointing to the contrary was wholly overlooked by the inquiry officer.
It extracted the relevant portion of the evidence of witness Balchand and pointed out in no uncertain terms that if the inquiry officer had taken note of the relevant piece of evidence and 786 had applied its mind to it and dealt with it in the report, it would have been difficult to hold the charge proved.
The non application of mind of the inquiry officer was pointed out by referring to that part of the final order which manifestly overlooked the material piece of evidence which would go to the root of the matter.
The Industrial Court observed that the inquiry officer quitely skipped over very material portion of the evidence of Balchand which went a long way to falsify the charges relating to the incidents which preceded the actual assault on Verma. 'The Industrial Court then pointed out that report (exhibit D/18) purporting to have been made by victim Verma to the factory Manager on the day following the date of the occurrence when properly scanned appears to be a highly suspicious evidence because: 'it is not dated aud does not bear the endorsement of the officer to whom it was presented. ' This is permissible because the revisional jurisdiction enables the authority to point something which is no evidence legally speaking or in the eye of law.
It was pointed out that Verma did not identify the report.
The Industrial Court concluded that the possibility of this report being introduced at a later stage to strengthen the case against the live appellants cannot be ruled out.
After referring to other infirmities in the approach of the Labour Court, the Industrial Court concluded that the entire approach of the Manager in arriving at the findings of misconduct in his inquiry 'appear to be biased and unfair ', and 'the conclusions are neither fair nor reasonable and any order of dismissal based thereon cannot be sustained. ' Can it ever be said that in reaching this conclusion, the Industrial Court exceeded its revisional jurisdiction ? The whole approach of the Labour Court dealing with the report of the inquiry as also the inquiry itself clearly disclosed material irregularity and thereby the Labour Court failed to exercise jurisdiction vested in it namely, to examine the property of the order with in it failed to do.
The Industrial Court in our opinion, was perfectly justified in interfering with the order of the Labour Court.
Even then the approach of the Industrial Court, being conscious of the severe constraints on its jurisdiction was of dignified restraint and just.
It merely set aside the award of the Labour Court and did not proceed to reappraise evidence but remitted the case to the Labour Court for a fresh decision.
It was thus an eminently just order.
Is it such an order which the High Court could have interfered with in exercise of its extraordinary jurisdiction ? The High Court 787 observed that the Labour Court can only interfere with the decision of the inquiry officer, if the findings arrived at by him were perverse.
The High Court completely missed the ambit of jurisdiction of the Labour Court in that it had the jurisdiction to decide the legality and propriety of the order.
Impropriety as converse of propriety cannot be equated with perversity as understood by the High Court.
The High Court further observed that if 'the finding of the misconduct is a plausible conclusion flowing from the evidence adduced at the enquiry, the labour tribunals have no jurisdiction to sit in judgment over the decision of the employer, as an appellate body.
This betrays complete lack of understanding of the jurisdiction of the Labour Court in respect of an order made under the standing order as set out in Schedule II item I to the Act which enables the Labour Court to examine the legality and propriety of the order.
The High Court therefore, wholly misread the relevant provision and interfered with the decision of the Industrial Court which was pre eminently just and within the four corners of its jurisdiction.
What left us guessing was that according to the High Court the Industrial Court had narrow jurisdiction while dealing with the order of the Labour Court, yet the High Court in exercise of its extraordinary jurisdiction interfered with the decision of the Industrial Tribunal.
Times without number, it has been pointed out that article 225 is a device to secure and advance justice and not otherwise.
(Sadhu Ram vs Delhi Transport Corporation) Ordinarily, the courts exercising extraordinary jurisdiction is loathe to interfere with an order remanding the matter to the authority directed to investigate facts.
The Industrial Court had made an order of remand.
The High Court was not justified in interfering with the same.
By this uncalled for interference, it has merely prolonged the agony of the unemployed workmen and permitted the jurisdiction of the High Court under Act.
226 to be exploited by those who can well afford to wait to the deteriment of those who can ill afford to wait by dragging the latter from court to court for adjudication of peripheral issues avoiding decision on issues more vital to them.
(D.P. Maheshwari vs Delhi Administration and Ors.
788 Accordingly these appeals succeed and are allowed and the decision of the High Court is.
set aside and the one of the Industrial Court is restored with costs.
As the matter is an old one, the Labour Court is directed to give top priority to this matter and dispose this of as early as possible and not later than six months from today.
| The accused was tried by a Special Judge for offences under section 409 Of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act.
He was convicted under section 409 but the judge held that the accused could not be tried under section 5(2) as there had been no investigation by a police officer not below the rank of a Deputy Superintendent of Police.
Upon appeal by the accused against the conviction under section 409, the High Court applying the doctrine of autrefois acquit held that the order of the judge in respect of the charge under section 5(2) was tantamount to an acquittal for that offence and on the same facts no conviction could be had under section 409 : Held, that the offences under section 409 of the Indian Penal Code and under section 5(2) of the Prevention of Corruption Act were distinct and separate and there could be no objection to a trial and conviction under section 469 even if the accused had been acquitted under section 5(2).
Om Prakash Gupta vs The State Of U.P., ; , applied.
Section 403(1) of the Code of Criminal Procedure has no application where there is only one trial for several offences, of some of which the accused person is acquitted though convicted of one.
Article 20 of the Constitution also does not apply where the accused had not already been, tried: and acquitted for the same offence in an earlier trial, 869 Where there are two alternate charges in the same trial, the fact that the accused is acquitted of one of them will not prevent the conviction on the other.
|
ivil Appeal No. 10085 of 1983.
From the Judgment and Order dated 15.9.1982 of the Allahabad High Court in Civil Revision No. 332 of 1981.
S.N. Kacker and R.B. Mahlotra for the Appellant.
Aruneshwar Gupta and B.B. Sharma for the Respondent.
The Judgment of the Court was delivered by VARADARAJAN, J.
The short point arising for consideration in this appeal by special leave filed against the decision of a Division Bench of the Allahabad High Court in Civil Revision No. 332 of 1981 turns upon the interpretation of section 20 (4) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act 13 of 1972 (hereinafter referred to as 'the Act ').
The appellant land lady filed the suit on 6.8.1973 for recovering possession from the respondent tenant of a portion of premises situate at Bhau Ka Nagla, Agra Road, Mauza Dholpura on the allegation that it had been let to the respondent on a rent of Rs. 360 per mensem and that the tenancy has come to an end by efflux of time fixed in the rent note on the expiry of 30.6.1973.
She alleged in the plaint that the demised property is situate beyond the municipal limits of Ferozabad and is intended for use as a factory and is exempt from the provision of the Act and that the respondent is in arrears of rent to the extent of Rs. 3,960 for the period from 1.8.1972 to 30.6.1973 and she is entitled to recover possession of the premises together with arrears of rent of Rs. 3,960 at Rs. 360 per mensem for the said period and mesne profits at Rs. 720 for the subsequent period from 1.7.1973 at Rs. 20 per day.
The respondent opposed the suit contending that the property is situate within three kilometres of Ferozabad municipal limits and was not a factory when it was let out and that it is governed by the 586 provisions of the Act.
He denied that the rent is Rs. 360 per mensem and contented that it is only Rs. 125 per mensem and that the tenancy includes a vacant land shaded green and yellow in the plan filed with the plaint which according to the plaint does not form part of the lease.
He denied that he had executed the rent note mentioned in the plaint and that the vacant land shaded green and yellow in the plaint plan had not been leased to him.
He further denied that the tenancy has come to an end by efflux of time and contended that the amounts claimed as arrears of rent and mesne profits are wrong and excessive and that the notice to quit is invalid in law as it excludes the vacant land shaded green and yellow in the plaint plan which also is the subject matter of the lease.
Finally he contended that the suit is barred by the provisions of s.20 of the Act sub section (1) whereof says that save as provided in sub section (2), no suit shall be instituted for the eviction of a tenant from a building notwithstanding the determination of his tenancy by efflux of time or on the expiration of a notice to quit or in any other manner.
The learned Fourth Additional District Judge, Agra who tried the suit exercising his Jurisdiction as a Judge of Small Causes Court found on 19.7.1975 that he had jurisdiction while recording findings on the point of jurisdiction tried as preliminary issue, and he held that though admittedly even the vacant land marked green and yellow in the plaint plan had been originally leased upto 27.7.1972 thereafter only the red marked portion had been leased on a rent of Rs. 360 per mensem under the rent note (paper No. 18A) the execution whereof has been denied by the respondent, excluding the green and yellow marked portion.
On the basis of that unregistered rent note, (paper No. 18A) he found that the rent is Rs. 360 per mensem, rejecting the respondent 's case that the old rent of Rs. 125 per mensem continued even after the dissolution of the partnership to which the premises had been leased earlier.
The respondent admitted that though the property is situate outside the Ferozabad municipal limits it is situate within three kilo metres from those limits and is therefore governed by the provisions of the Act while the appellant denied that it is situate within three kilo metres.
The learned District Judge found on the evidence that the property is situate within two kilo metres of the municipal limits and falls within the exception and is governed by the provisions of the Act.
He found that the tenancy for the period of 11 months under the rent note (paper No. 18A) had come to an end by efflux of 587 time and the parties are governed by it and that the suit is, however, governed by the provisions of s.20 of the Act.
However, the learned District Judge considered the question whether the respondent is liable for eviction in this suit and found that the appellant had served notice of demand (paper No. 35C) on the respondent and he failed to pay the rent claimed by the appellant and he is as such liable to be evicted under s.20 of the Act.
But the respondent had deposited the full amount of rent as claimed at Rs. 360 per mensem together with damages for use and occupation, interest and costs as required by s.20 (4) of the Act on 31.10.1973, a day after the first hearing date 30.10.1973.
The learned District Judge found that the sum of Rs. 7,490 was tendered in court on 30.10.1973 and passed by the court on that day and deposited into the bank on 31.10.1973 and that the tender made on 30.10.1973 was valid and the payment must be deemed to have been made on 30.10.1973 itself.
But he accepted the argument advanced on behalf of the appellant that because the respondent had contended in the written statement that the rent is Rs. 125 per mensem and it was rejected by the court and it was found that the rent is Rs. 360 per mensem the deposit of Rs. 7,490 towards arrears of rent calculated at Rs. 360 per mensem together with interest and costs was not unconditional and therefore invalid and s.20 (4) of the Act does not help the respondent.
In that view the learned District Judge decreed the suit for eviction with arrears of rent and mesne profits at Rs. 360 per mensem from 1.8.1972 and ordered credit being given for the amount deposited by the respondent towards the amount payable under the decree and granted four months time for the respondent to vacate the premises.
In C.R.P. No. 332 of 1981 filed by the respondent against the Judgment of the trial court a Division Bench of the High Court noticed that one of the conditions of s.20(4) of the Act is that the tenant should unconditionally pay or deposit the entire amount due together with interest and costs and that s.20 (6) says that any amount deposited under s.20(4) shall be paid to the landlord without prejudice to the pleadings of the parties and subject to the ultimate decision in the suit, and they have observed that the submission made before them on behalf of the appellant that the deposit to be unconditional must be on acknowledgement of the liability for rent as claimed by the landlord if accepted would render the provisions in s.20(6) of the Act nugatory.
They have observed that if the tenant makes a deposit 588 with a condition that it shall not be paid to the landlord until the suit is decided it would be a conditional deposit.
They have found that in the present case the deposit was not conditional merely because while depositing the amount inclusive of rent at the rate of Rs. 360 per mensem as claimed in the plaint the respondent had contended in the written statement that the rent is Rs. 125 per mensem and not Rs. 360 per mensem and that pleading in the written statement that the rent is Rs. 125 per mensem and not Rs. 360 per mensem does not make the deposit conditional.
In that view the learned Judges allowed the civil revision petition and dismissed the suit with costs in both the courts.
The findings dated 19.7.1975 recorded by the learned District Judge on the preliminary issue holding that he had jurisdiction to entertain the suit is not available in the records produced in this Court.
Therefore, it is not known for what reason the learned District Judge held that he had jurisdiction to entertain the suit.
The appellant came forward with the suit for recovering possession of the premises together with arrears of rent and mesne profits on the allegation that the tenancy under the rent note (paper No. 18A) was for a period of only 11 months and that it had come to an end by efflux of time and the premises was intended for use as a factory and the Act is not applicable thereto.
On the other hand, the respondent 's defence was that the property was situate within three kilo metres of Ferozabad municipal limits and is governed by the provisions of the Act and that the civil suit for recovery of possession of the property is not maintainable.
The learned District Judge accepted the respondent 's contention on the question of applicability of the provisions of the Act to the premises in question on the ground that it is located within two kilo metres of Ferozabad municipal limits.
section 20(1) of the Act lays down that save as provided in sub section (2), no suit shall be instituted for eviction of a tenant from a building, notwithstanding the determination of his tenancy by efflux of time or on the expiry of a notice to quite or in any other manner.
The present suit is not based on any of the grounds mentioned in s.20 (2) of the Act and though the respondent is alleged to have been in arrears of rent to the extent of Rs. 3, 960/ there is no allegation in the plaint that he is in arrears of rent for not less than four months and had failed to pay the same to the appellant within one month from the date of service upon him of a notice of demand, which is the ground mentioned in clause (a) of s.20(2) of the Act.
In these 589 circumstances, the learned District Judge should have normally dismissed the suit for want of jurisdiction in view of s.20(1) of the Act on his finding that the Act is applicable to the premises.
It is not known why he did not do so, but on the other hand proceeded to hold that the deposit by the respondent is not unconditional as required by s.20(4) of the Act and ordered his eviction on that basis.
We entirely agree with the learned Judges of the High Court that the deposit of the amount on the first hearing date, made up of rent at the rate of Rs. 360 per mensem as claimed in the plaint and interest and costs could not be said to be not unconditional merely because the respondent had contended in the written statement that the rent was only Rs. 125 per mensem and he did not succeed in proving it at the trial.
It is not possible to construe s.20(4) in the manner done by the learned District Judge as that would amount to foreclosure of any defence regarding the quantum of rent even in cases where the amount alleged by the landlord is more than the real rent agreed between the parties.
In this connection Mr. Kacker, learned Counsel appearing for appellant relied strongly upon the following observation made by Balakrishna Eradi, J, speaking for himself and Pathak and Venkataramiah, JJ.
in Mangal Sen vs Kanchhid Mal : "The provisions of sub section (4) will be attracted only if the tenant has, at the first hearing of the suit, unconditionally paid or tendered to the landlord the entire amount of rent and damages for use and occupation of the building due from him together with interest thereon at the rate of nine per cent per annum and the landlord 's costs of the suit in respect thereof, after deducting therefrom any amount already deposited by him under sub section (1) of section 30.
There is absolutely no material available on the record to show that the alleged deposit of Rs. 1,980 was made by the tenant on the first date of hearing itself and, what is more important, that the said deposit was made by way of an unconditional tender for payment to the landlord.
The deposit in question is said to have been made by the appellant on January 25, 1974.
It was only subsequent thereto 590 that the appellant filed his written statement in the suit.
It is noteworthy that one of the principal contentions raised by the appellant defendant in the written statement was that since he had stood surety for the landlord for arrears of sales tax, there was no default by him in the payment or rent.
In the face of the said plea taken in the written statement, disputing, the existence of any arrears of rent and denying that there had been a default, it is clear that the deposit, even it was made on the date of the first hearing, was not an unconditional tender of the amount for payment to the landlord.
Further, there is also nothing on record to show that what was deposited was the correct amount calculated in accordance with the provisions of Section 20(4).
In these circumstances, we hold that the appellant has failed to establish that he has complied with the conditions specified in sub section (4) of Section 20 and hence he is not entitled to be relieved against his liability for eviction on the ground set out in clause (a) of sub section (2) of the said Section.
" The above principle cannot apply to the facts of the present case, for in that case it was not clear whether the deposit of the correct amount was made within the time fixed in s.20(4) of the Act whereas in the present case it has been found by the learned District Judge that the arrears of rent at the rate claimed in the plaint together with interest and costs had been deposited within the time mentioned in section 20 (4) of the Act.
Mr. Kacker next drew our attention to the language used in s.20(4) and s.39 of the Act and submitted that whereas the provisions of s.39 are mandatory the Rent Controller has a discretion in s.20(4) in lieu of passing a decree for eviction on the ground of failure to deposit the arrears, interest and costs within the period mentioned in s.20(4) to pass an order relieving the tenant against his liability for eviction on that ground and that the High Court exercising revisional jurisdiction under section 115 C.P.C. should not have interfered with the discretion exercised by the learned District Judge in ordering eviction and set aside that order especially in view of the fact that the respondent had failed to prove that the rent was only Rs. 125 per mensem and not Rs. 360 per mensem.
We do not agree.
The Act is a social piece of legislation which leans in favour of tenants.
Merely because 591 the tenant had failed to prove his case that the rent was only Rs. 125 per mensem and not Rs. 360 per mensem, the discretionary relief could not be denied to him even though he had deposited the arrears of rent at the rate claimed by the landlord in the plaint together with interest and costs within the time mentioned in s.20(4) of the Act.
It is not possible to lay down any broad and general proposition that the discretionary relief should be denied to the tenant in all cases where he fails to prove his case regarding the quantum rent even though he had deposited the rent at the rate claimed by the landlord in the plaint together with interest and costs within the time as required by s.20(4) of the Act.
For the reasons mentioned above we are of the opinion that no interference with the decision of the High Court is called for in this case.
The appeal fails and is dismissed with costs.
N.V.K. Appeal dismissed.
| By virtue of Entry 36 of the First Schedule in the "footwear and parts thereof" in or on relation to the manufacture of which any process is ordinarily carried on with the aid of power, is chargeable to excise duty, the rate of duty being 10% ad valorem in respect of "footwear" and 15% ad valorem in respect of "parts of footwear".
By a Notification dated July 24, 1967, issued In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government exempted, with effect from the 26th May, 1967, footwear falling under item No. 36 of the First Schedule to the , of which the value did not exceed Rs. 5 per pair from the whole of the duty of excise leviable thereon.
During the year 1967 and 1968, Bata Shoe Company was manufacturing certain items of footwear of which the wholesale price was Rs. 6.25 per pair.
The contention of the company that since the assessable value of such items of footwear calculated in terms of section 4 of the Act, as it stood at the relevant time was only Rs. 4.94 and thus less than Rs. 5 per pair were qualified for exemption under the Notification was negatived by the department on the ground that while computing the value of the articles for the purpose of judging the applicability of the exemption, the duty element of the cost structure could not be deducted from the wholesale price and on such calculation the value of such footwear would exceed Rs. 5 per pair.
Three Writ Petitions were, therefore, filed in the High Courts of Patna, Calcutta and the Punjab & Haryana, since the company had three manufacturing establishments attracting the jurisdictions of these Courts.
The Patna High Court allowed the writ petition accepting the contention of the company and granted certificate of appeal to the department.
The High Court of Calcutta 961 dismissed the petition and accepted the stand of the Department that the expression "value" occurring in the Notification dated July 24,1967 is not the deemed "value" calculated according to the provisions of section 4 of the Act, but is the real and actual "value" of the goods after the payment of the duty.
The High Court of Punjab & Haryana dismissed the petition in limini on the ground of laches.
Both these two High Courts, however, granted certificate of appeal to the company.
Hence the three appeals by certificates.
Allowing the appeals of the company and dismissing the State appeal, he Court, ^ HELD 1.1 While computing the "value" of the articles of footwear for the purposes of testing the availability of the exemption granted under the Notification dated July 24,1967 section 4 of the gets attracted.
Section 4 is comprehensive in its coverage and it lays down the procedure to be followed for determination of "value" of any article in every case where the article is chargeable with duty at a rate dependent on the value of the article.
[966H, 967A] 1.2 While the notification makes it clear that the effect of the Notification is to render the changeability or otherwise to duty of excise of footwear falling under item 36 of the First Schedule is made wholly dependent upon the "value" of the article of footwear; in case such "value" exceeds Rs. 5 per pair, duty will be chargeable at the rate of 10%.
whereas if the value does not exceed Rs.5 per pair, no duty will be chargeable on such items of footwear, that is the rate of duty will be nil.
Thus entry 36 read along with the Notification dated July 24, 1967 clearly shows that the changeability to duty in respect of any article of footwear is made dependent upon its value in tho sense that the chargeability to duty of excise will arise only if the "value" of the article does not exceed Rs. 5 per pair.
[966D E, 967A B] 1.3 Before determining the question of availability of the exemption under the Notification dated July 24, 1967, the first essential step, therefore, is to determine the "value" of the article in the manner prescribed in section 4 of the Act.
The fact that on such a computation the article may ultimately be found to be exempted from excise duty does not have any bearing on the question of applicability of section 4 of the Act for determining the ' 'value" for purpose of duty.
[967B D] 1.4 The expression 'I`or the purpose of duty" occurring in section 4 has a wide import.
For all purposes connected with the determination of chargeability and levy of duty the provisions of the section are to be applied for computation of the "value" of the article.
Under the Explanation to section 4, it is mandatory that in determining the price of an article both trade discount as well as the amount of duty calculated as payable on the wholesale cash price payable at the time of removal of the article based on the wholesale cash price referred to in clause (a) are to be deducted from such wholesale price.
[967D E] In the instant case, in as much as the value of the articles of footwear in 962 question calculated in accordance with the provisions of section 4 of the Act did note exceed Rs.5 per pair, the articles in question were exempted from the charge to duty of excise under the Notification dated July 24, 1967 and the company is entitled, forthwith, to a refund of the amounts of duty illegally realised by the Department.
[967G H] The Collector of Central Excise, Patna & Ors.
vs The Bata Shoe Company (P) Ltd. AIR Patna approved.
The Bata Shoe Company (P) Ltd. vs The Collector of Central Excise & Ors., Calcutta, AIR Calcutta : The Bata Shoe Company (P) Ltd. vs The Collector of Central Excise & Ors., AIR Pun jab & Haryana reversed.
|
Civil Appeal No. 1597 of 1972.
Appeal from the Judgment and Order dated 25th January, 1972of the Allahabad High Court in Civil Misc.
Writ No. 3788/70.
S.T. Desai, Shri Narain, J. B. Dadachanji, Ravinder Narain, S Swarup and Talat Ansari for the Appellant.
G. N. Dikshit, M. V. Goswami and O. P. Rana for RR 1 3 and 5.
Girish Chandra for Respondent No. 4.
651 A. B. Dewan, Ravinder Narain, section Swarup and A. N. Haksar for the Intervener (M/s. Modi Rubber Ltd.).
The Judgment of the Court was delivered by BHAGWATI, J.
, This appeal by certificate raises a question of considerable importance in the field of public law.
How far and to what extent is the State bound by the doctrine of promissory estoppel ? It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrines which are looked upon almost reverentially and which have held the field for a long number of years.
The law in regard to promissory estoppel is not yet well settled though it has been the subject of considerable debate in England as well as the United States of America and it has also received consideration in some recent decisions in India and we, therefore, propose to discuss it in some detail with a view to defining its contours and demarcating its parameters.
We will first state briefly the facts giving rise to this appeal.
This is necessary because it is only where certain fact situations exist that promissory estoppel can be invoked and applied.
The appellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has also a cold storage plant and a steel foundry.
On 10th October, 1968 a news item appeared in the National Herald in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under section 4A of the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them "to come on firm footing in developing stage".
This news item was based upon a statement made by Shri M. P. Chatterjee the then Secretary in the Industries Department of the Government.
The appellant, on the basis of this announcement, addressed a letter dated 11th October, 1968 to the Director of Industries stating that in view of the sales tax holiday announced by the Government, the appellant intended to set up a Hydro genation Plant for manufacture of Vanaspati and sought for confirmation that this industrial unit, which it proposed to set up would be entitled to sales tax holiday for a period of three years from the date it commenced production.
The Director of Industries replied by his letter dated 14th October, 1968 confirming that "there will be no sales tax for three years on the finished product of your proposed Vanaspati factory from the date it gets power connection for commencing production." The appellant thereupon started taking steps to contact various financiers for financing the project and also initiated negotiations with manufacturers for purchase of machinery for setting 652 up the Vanaspati factory.
On 12th December, 1968 the appellant 's representative met the 4th respondent who was at that time the Chief Secretary to the Government as also Advisor to the Governor and intimated to him that the appellant was setting up the Vanaspati factory solely on the basis of the assurance given on behalf of the Government that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory and the 4th respondent reiterated the assurance that the appellant would be entitled to sales tax holiday in case the Vanaspati factory was put up by it.
The appellant by its letter dated 13th December, 1968 placed on record what had transpired at the meeting on the previous day and requested the 4th respondent "to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of Vanaspati from the date we start production." On the same day the appellant entered into an agreement with M/s. De Smith (India) Pvt. Ltd., Bombay for supply of plant and machinery for the Vanaspati factory, providing clearly that the appellant would have the option to terminate the agreement, if within 10 weeks exemption from sales tax was not granted by the State Government.
The 4th respondent replied on 22nd December, 1968 confirming that "the State Government will be willing to consider your request for grant of exemption from U.P. Sales Tax for a period of three years from the date of production" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the Government in the Industries Department and in the meanwhile to "go ahead with the arrangements for setting up the factory".
The appellant had in the meantime submitted an application dated 21st December, 1968 for a formal order granting exemption from sales tax under section 4A of the Act.
It appears that the letter of the 4th respondent dated 22nd December, 1968 was not regarded as sufficient by the financial institutions which were approached by the appellant for financing the project since it merely stated that the State Government would be willing to consider the request for grant of exemption and did not convey any decision of the State Government that the exemption would be granted.
The appellant, therefore, addressed a letter dated 22nd January, 1969 to the 4th respondent pointing out that the financial institutions were of the view that the letter of the 4th respondent dated 22nd December, 1968 "did not purport to commit the Government for the concession mentioned" and it was, therefore, necessary to obtain a formal order of exemption in terms of the application submitted by it.
The 4th respondent, however, stated categorically in his letter in reply dated 23rd January, 1969 that the proposed Vanaspati Factory of the appellant "will be 653 entitled to exemption from U.P. Sales Tax for a period of three years from the date of going into production and that this will apply to all Vanaspati sold during that period in Uttar Pradesh itself" and expressed his surprise that "a letter from the Chief Secretary to the State Government stating this fact in clear and unambiguous words should not carry conviction with the financial institutions.
" In view of this unequivocal assurance given by the 4th respondent, who not only occupied the post of Chief Secretary to the Government but was also Advisor to the Governor functioning under the President 's rule, the appellant went ahead with the setting up of the Vanaspati Factory.
The appellant by its letter dated 25th April, 1969 advised the 4th respondent that the U.P. Finance Corporation, being convinced by the clear and categorical assurance given by the 4th respondent that the Vanaspati Factory of the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of production, had sanctioned financial assistance to the appellant and the appellant was going ahead with the project in full speed to enable it to start production at the earliest.
The appellant made considerable progress in the setting up of the Vanaspati Factory but it seems that by the middle of May 1969 the State Government started having second thoughts on the question of exemption and a letter dated 16 May, 1969 was addressed by the 5th respondent who was Deputy Secretary to the Government in the Industries Department, intimating that a meeting has been called by the Chief Minister on 23rd May, 1969 "to discuss the question of giving concession in Sales Tax on Vanaspati products" and requesting the appellant to attend the meeting.
The appellant immediately by its letter dated 19th May, 1969 pointed out to the 5th respondent that so far as the appellant was concerned, the State Government had already granted exemption from Sales Tax by the letter of the Chief Secretary dated 23rd January, 1969 but still, the appellant would be glad to send its representative to attend the meeting as desired by the 5th respondent.
The proposed meeting was, however, postponed and the appellant was intimated by the 5th respondent by its letter dated 23rd May, 1969 that the meeting would now be held on 3rd June, 1969.
The appellant 's representative attended the meeting on that day and reiterated that so far as the appellant was concerned, it had already been granted exemption from Sales Tax and the State Government stood committed to it.
The appellant thereafter proceeded with the work of setting up the Vanaspati plant on the basis that in accordance with the assurance given by the 4th respondent on behalf of the State Government, the appellant would be exempt from payment of Sales Tax for a period of three years from the date of commencement of production.
654 The State Government however went back upon this assurance and a letter dated 20th January, 1970 was addressed by the 5th respondent intimating that the Government had taken a policy decision that new Vanaspati Units in the State which go into commercial production by 30th September, 1970 would be given partial concession in Sales Tax at the following rates for a period of three years: First year of production 31/2% Second year of production 3% Third year of production 21/2% The appellant by its letter dated 25th June, 1970 pointed out to the Secretary to the Government that the appellant proposed to start commercial production of Vanaspati with effect from 1st July, 1970, and stated that, as notified in the letter dated 20th January, 1970, the appellant would be availing of the exemption granted by the State Government and would be charging sales tax at the rate of 31/2% instead of 7% on the sales of Vanaspati manufactured by it for a period of one year commencing from 1st July, 1970.
The factory of the appellant thereafter went into production from 2nd July, 1970 and the appellant informed the Secretary to the Government about the same by its letter dated 3rd July, 1970.
The State Government however once again changed its decision and on 12th August, 1970 a news item appeared in the Northern India Patricia stating that the Government had decided to rescind the earlier decision i.e. the decision set out in the letter dated 20th January, 1970, to allow concession in the rates of Sales Tax to new Vanaspati Units.
The appellant thereupon filed a writ petition in the High Court of Allahabad asking for a writ directing the State Government to exempt the sales of Vanaspati manufactured by the appellant from sales tax for a period of three years commencing from 2nd July, 1970 by issuing a notification under section 4A and not to collect or charge sales tax from the appellant for the said period of three years.
It appears that in the writ petition as originally filed, there was no plea of promissory estoppel taken against the State Government and the writ petition was, therefore, amended by obtaining leave of the High Court with a view to introducing the plea of promissory estoppel.
The appellant urged in the amended writ petition that the 4th respondent acting on behalf of the State Government had given an unequivocal assurance to the appellant that the appellant would be entitled to exemption from payment of sales tax for a period of three years from the date of commencement of the production and this assurance was given by the 4th respondent intending or knowing that it would be acted on by the appellant and in fact 655 the appellant, acting in reliance on it, established the Vanaspati factory by investing a large amount and the State Government was, therefore, bound to honour the assurance and exempt the Vanaspati manufactured and sold by the appellant from payment of sales tax for a period of three years from 2nd July, 1970.
This plea based on the doctrine of promissory estoppel was, however rejected by the Division Bench of the High Court principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the Deputy Secretary dated 20th January, 1970.
The appellant thereupon preferred the present appeal after obtaining a certificate of fitness from the High Court.
The principal argument advanced on behalf of the appellant in support of the appeal was that the 4th respondent had given a categorical assurance on behalf of the State Government that the appellant would be exempt from payment of sales tax for a period of three years from the date of commencement of production and such assurance was given intending or knowing that it would be acted on by the appellant and in fact the appellant, acting in reliance on it, altered its position and the State Government was, therefore, bound, on the principle of promissory estoppel, to honour the assurance and exempt the appellant from sales tax for a period of three years from 2nd July, 1970, being the date on which the factory of the appellant commenced production.
The appellant assailed the view taken by the High Court that this claim of the appellant for exemption based on the doctrine of promissory estoppel was barred by waiver, because the appellant had by its letter dated 25th June, 1970 accepted that it would avail of the exemption granted under the letter of the 5th respondent dated 20th January, 1970 and charged sales tax at the concessional rate of 31/2% instead of 7% during the first year of its production.
The appellant urged that waiver was a question of fact which was required to be pleaded and since no plea of waiver was raised in the affidavit filed on behalf of the State Government in opposition to the writ petition, it was not competent to the State Government to rely on the plea of waiver for the first time at the hearing of the writ petition.
Even if the plea of waiver were allowed to be raised, notwithstanding that it did not find place in the pleadings, no waiver was made out, said the appellant, since there was nothing to show that were the circumstances in which the appellant had addressed the letter dated 25th June, 1970 stating that it would avail of the exemption granted under the letter dated 20th January, 1970 and it was not possible to say that the appellant, with full knowledge of its right to claim total exemption from payment of sales tax, waived that right and agreed to accept the concessional rates set out in the letter dated 20th January, 1970.
The 656 State Government on the other hand strongly pressed the plea of waiver and submitted that the appellant had clearly waived its right to complete exemption from payment of Sales Tax by addressing the letter dated 25th June, 1970.
The State Government also contended that, in any event, even if there was no waiver, the appellant was not entitled to enforce the assurance given by the 4th respondent, since such assurance was not binding on the State Government and more over, in the absence of notification under section 4A, the State Government could not be prevented from enforcing the liability to sales tax imposed on the appellant under the provisions of the Act.
It was urged on behalf of the State Government that there could be no promissory estoppel against the State Government so as to inhibit it from formulating and implementing its policies in public interest.
These were broadly the rival contentions urged on behalf of the parties and we shall now proceed to consider them.
We shall first deal with the question of waiver since that can be disposed of in a few words.
The High Court held that even if there was an assurance given by the 4th respondent on behalf of the State Government and such assurance was binding on the State Government on the principle of promissory estoppel, the appellant had waived its right under it by accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970.
We do not think this view taken by the High Court can be sustained.
In the first place, it is elementary that waiver is a question of fact and it must be properly pleaded and proved.
No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings.
Here it was common ground that the plea of waiver was not taken by the State Government in the affidavit filed on its behalf in reply to the writ petition, nor was it indicated even vaguely in such affidavit.
It was raised for the first time at the hearing of the writ petition.
That was clearly impermissible without an amendment of the affidavit in reply or a supplementary affidavit raising such plea.
If waiver were properly pleaded in the affidavit in reply, the appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June, 1970 and establishing that on these facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent.
But in the absence of such pleading in the affidavit in reply, this opportunity was denied to the appellant.
It was, therefore, not right for the High Court to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine.
657 Secondly, it is difficult to see how, on the facts, the plea of waiver could be said to have been made out by the State Government.
Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be "an intentional act with knowledge".
Per Lord Chelmsford, L.C. in Earl of Darnley vs London, Chatham and Dover Rly.
Co. There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it.
It is pointed out in Halsbury 's Laws of England (4 d) Volume 16 in paragraph 1472 at page 994 that for a "waiver to be effectual it is essential that the person granting it should be fully informed as to his rights" and Isaacs, J, delivering the judgment of the High Court of Australia in Craine vs Colonial Mutual Fire Insurance Co. Ltd. has also emphasised that waiver "must be with knowledge, an essential supported by many authorities".
Now in the present case there is nothing to show that at the date when the appellant addressed the letter dated 25th June, 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abandoned such right.
It is difficult to speculate what was the reason why the appellant addressed the letter dated 25th June, 1970 stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January, 1970.
It is possible that the appellant might have thought that since no notification exempting the appellant from sales tax had been issued by the State Government under section 4A, the appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by the State Government.
The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be so well defined in its scope and ambit and so free from uncertainty in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated 25th June, 1970.
In fact, in the petition as originally filed, the right to claim total exemption from sales tax was not based on the plea of promissory estoppel which was introduced only by way of amendment.
Moreover, it must be remembered that there is no presumption that every person knows the law.
It is often said that every one is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law.
Over a hundred and thirty years ago, Maule, J., pointed out in Martindala vs Faulkner(3): "There is no presumption in this country 658 that every person knows the law: it would be contrary to common sense and reason if it were so".
Scrutton, also once said: "It is impossible to know all the statutory law, and not very possible to know all the common law." But it was Lord Atkin who, as in so many other spheres, put the point in its proper context when he said in Evans vs Bartlem(1)"_____the fact is that there is not and never has been a presumption that every one knows the law.
There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application.
" It is, therefore, not possible to presume, in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June, 1970.
We accordingly reject the plea of waiver raised on behalf of the State Government.
That takes us to the question whether the assurance given by the 4th respondent on behalf of the State Government that the appellant would be exempt from sales tax for a period of three years from the date of commencement of production could be enforced against the State Government by invoking the doctrine of promissory estoppel.
Though the origin of the doctrine of promissory estoppel may be found in Hughes vs Metropolitan Railway Co.(2) and Birmingham & District Land Co. vs London & North Western Rail Co.(3) authorities of old standing decided about a century ago by the House of Lords, it was only recently in 1947 that it was rediscovered by Mr. Justice Denning, as he then was, in his celebrated judgment in Central London Property Trust Ltd. vs High Trees House Ltd.(4) This doctrine has been variously called 'promissory estoppel ', 'equitable estoppel ', 'quasi estoppel ' and 'new estoppel '.
It is a principle evolved by equity to avoid injustice and though commonly named 'promissory estoppel, it is, as we shall presently point out, neither in the realm of contract nor in the realm of estoppel.
It is interesting to trace the evolution of this doctrine in England and to refer to some of the English decisions in order to appreciate the true scope and ambit of the doctrine particularly because it has been the subject of considerable recent development and is steadily expanding.
The basis of this doctrine is the inter position of equity.
Equity has always, true to form, stepped into mitigate the rigours of strict law.
The early cases did not speak of this doctrine as estoppel.
They spoke of it as 'raising an equity '.
Lord Cairns stated 659 the doctrine in its earliest form it has undergone considerable development since then in the following words in Hughes vs Metropolitan Railway Company (supra): "It is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results. afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.
" This principle of equity laid down by Lord Cairns made sporadic appearances in stray cases now and then but it was only in 1947 that it was disinterred and restated as a recognised doctrine by Mr. Justice Denning, as he then was, in the High Trees ' case (supra).
The facts in that case were as follows: The plaintiffs leased to the defendents, a subsidiary of the plaintiffs, in 1937 a block of flats for 99 years at a rent of & 2500/ a year.
Early in 1940 and because of the war, the defendants were unable to find sub tenants for the flats and unable in consequence to pay the rent.
The plaintiffs agreed at the request of the defendants to reduce the rent to &.
1250/ from the beginning of the term.
By the beginning of 1945 the conditions had improved and tenants had been found for all the flats and the plaintiffs, therefore, claimed the full rent of the premises from the middle of that year.
The claim was allowed because the court took the view that the period for which the full rent was claimed fell out side the representation, but Mr. Justice Denning, as he then was, considered Obiter whether the plaintiffs could have recovered the covenanted rent for the whole period of the lease and observed that in equity the plaintiffs could not have been allowed to act inconsistently with their promise on which the defendants had acted.
It was pressed upon the Court that according to the well settled law as laid down in Jorden y. Money(1), no estoppel could be raised against plaintiffs since the doctrine of estoppel by representation is applicable only to representations as to some state of facts alleged to be at the time actually in existence and not to promises de futuro which, if binding at all, must be binding only as contracts and here there was no representa 660 tion of an existing state of facts by the plaintiffs but it was merely a promise or representation of intention to act in a particular manner in the future.
Mr. Justice Denning, however, pointed out: "The law has not been standing still since Jorden vs Money.
There has been a series of decisions over the last fifty years which, although they are said to be cases of estoppel are not really such.
They are cases in which a promise was made which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made, and which was in fact so acted on.
In such cases the courts have said that the promise must be honoured.
" The principle formulated by Mr. Justice Denning was, to quote his own words, "that a promise intended to be binding, intended to be acted on and in fact acted on, is binding so far as its terms properly apply".
Now Hughes vs Metropolitan Railway Co. (supra) and Birmingham and District Land Co. vs London & North Western Rail Co. (supra), the two decisions from which Mr. Justice Denning drew inspiration for evolving this new equitable principle, were clearly cases where the principle was applied as between parties who were already bound contractually one to the other.
In Hughes vs Metropolitan Railway Co. (supra) the plaintiff and the defendant were already bound in contract and the general principle stated by Lord Cairns, L.C. was: "If parties who have entered into definite and distinct terms involving certain legal results afterwards enter upon a course of negotiations".
Ten years later Bowen, L. J. also used the same terminology in Birmingham and District Land Co. vs London and North Western Rail Co. (supra) that: "If persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe ".
These two decisions might, therefore, seem to suggest that the doctrine of promissory estoppel is limited in its operation to cases where the parties are already contractually bound and one of the parties induces the other to believe that the strict rights under the contract would not be enforced.
But we do not think any such limitation can justifiably be introduced to curtail the width and amplitude of this doctrine.
We fail 661 to see why it should be necessary to the applicability of this doctrine that there should be some contractual relationship between the parties.
In fact Donaldson, J. pointed out in Durham Fancy Goods Ltd. vs Michael Jackson (Fancy Goods) Ltd. (1) : "Lord Cairns in his enunciation of the principle assumed a pre existing contractual relationship between the parties, but this does not seem to me to be essential, provided that there is a pre existing legal relationship which could in certain circumstances give rise to liabilities and penalties." But even this limitation suggested by Donaldson, J. that there should be a pre existing legal relationship which could in certain circumstances give rise to liabilities and penalties is not warranted and it is significant that the statement of the doctrine by Mr. Justice Denning in the High Trees ' case does not contain any such limitation.
The learned Judge has consistently refused to introduce any such limitation in the doctrine and while sitting in the Court of Appeal, he said in so many terms, in Evenden vs Guildford City Association Football Club Ltd.(2) "Counsel for the appellant referred us, however, to the second edition of Spencer Bower 's book on Estoppel by Representation[(1966) pp.
340 342] by Sir Alexander Turner, a judge of the New Zealand Court of Appeal.
He suggests the promissory estoppel is limited to cases where parties are already bound contractually one to the other.
I do not think it is so limited : see Durham Fancy Goods Ltd. vs Michael Jackson (Fancy Goods) Ltd. It applies whenever a representation is made, whether of fact or law, present or future, which is intended to be binding, intended to induce a person to act on it and he does act on it.
" This observation of Lord Denning clearly suggest that the parties need not be in any kind of legal relationship before the transaction from which the promissory estoppel takes its origin.
The doctrine would seem to apply even where there is no pre existing legal relationship between the parties, but the promise is intended to create legal relations or affect a legal relationship which will arise in future.
Vide Halsbury 's Laws of England, 4th ed.
16 p. 1018, Note 2 para 1514.
Of course it must be pointed out in fairness to Lord Denning that he made it clear 662 in the High Trees ' case that the doctrine of promissory estoppel cannot found a cause of action in itself, since it can never do away with the necessity of consideration in the formation of a contract, but he totally repudiated in Evenden 's case the necessity of a pre existing relationship between the parties and pointed out in Crabb vs Arun District Council(1) that equity will in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights even where they arise, not under any contract, but on his own title deeds or under statue.
The true principle of promissory estoppel, therefore seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective whether there is any preexisting relationship between the parties or not.
It may be pointed out that in England the law has been well settled for a long time, though there is some indication of a contrary trend to be found in recent juristic thinking in that country, that promissory estoppel cannot itself be the basis of an action.
It cannot found a cause of action : it can only be a shield and not a sword.
This narrow approach to a doctrine which is otherwise full of great potentialities is largely the result of an assumption, encouraged by it rather misleading nomenclature, that the doctrine is a branch of the law of estoppel.
Since estoppel has always been traditionally a principle invoked by way of defence, the doctrine of promissory estoppel has also come to be identified as a measure of defence.
The ghost of traditional estoppel continues to haunt this new doctrine and that is why we find that while boldly formulating and applying this new equity in the High Trees ' case, Lord Denning added a qualification that though in the circumstances set out, the promise would undoubtedly be held by the courts to be binding on the party making it, notwithstanding that under the old common law it might be difficult to find any consideration for it. "the courts have not gone so far as to give a cause of action in damages for the breach of such a promise, but they have refused to allow the party making it to act inconsistently with it".
Lord Denning also pointed out in Combe vs 663 Combe(2) that "Much as I am inclined to favour the principles stated in the High Trees ' case, it is important that it should not be stretched too far, lest it should be endangered.
That principle does not create new causes of action where none existed before.
It only prevents a party from insisting upon his strict legal rights, when it would be unjust to allow him to enforce them, having regard to the dealings which have taken place between the parties. " So also said Buckley, J., in the more recent case of Beesly vs Hallwood Estates Ltd.(1) "The doctrine may afford a defence against the enforcement or otherwise of enforceable rights : it cannot create a cause of action.
" It is, however, necessary to make it clear that though this doctrine has been called in various judgments and text books as promissory estoppel and it has been variously described as `equitable estoppel ', `quasi estoppel ' and `new estoppel ', it is not really based on the principle of estoppel, but it is a doctrine evolved by equity in order to prevent injustice where a promise is made by a person knowing that it would be acted on by the person to whom it is made and in fact it is so acted on and it is inequitable to allow the party making the promise to go back upon it.
Lord Denning himself observed in the High Trees ' case, expressly making a distinction between ordinary estoppel and promissory estoppel that cases like the one before him were" not cases of estoppel in the strict sense.
They are really promises, promises intended to be binding, intended to be acted upon and in fact acted upon".
Jenkins, C.J. also pointed out in Municipal Corporation of Bombay vs Secretary of State (2) that the "doctrine is often treated as one of estoppel but I doubt whether this is correct, though it may be a convenient name to apply".
The doctrine of promissory estoppel need not, therefore, be inhibited by the same limitation as estoppel in the strict sense of the term.
It is an equitable principle evolved by the courts for doing justice and there is no reason why it should be given only a limited application by way of defence.
It may be noted that even Lord Denning recognised in Crabb vs Arun Distric Council (supra) that "there are estoppels and estoppels.
Some do give rise to a cause of action.
Some don 't" and added that "in the species of estoppel called `proprietary estoppel ', it does give rise to a cause of action" The learned Law Lord, after quoting what he had said in Moorgate Mercantile Co. Ltd. vs Twitchings,(3) namely that the effect of estoppel on the true owner may be that : 664 "his own title to the property, be it land or goods, has been held to be limited or extinguished, and new rights and interests have been created therein.
And this operates by reason of his conduct what he has led the other to believe even though he never intended it.
" Proceeded to observe that "the new rights and interests, so created by estoppel, in or over land, will be protected by the courts and in this way give rise to a cause of action".
The Court of Appeal in this case allowed Crabb a declaration of "a right of access at point over the verge on to Mill Park Road and a right of way along that road to Hook Lane" on the basis of an equity arising out of the conduct of the Arun District Council.
Of course, Spencer Bower and Turner, in their Treatise on `The Law Relating to Estoppel by Representation ' have explained this decision on the basis that it is an instance of the application of the doctrine of estoppel by encouragement or acquiescence or what has now come to be known as proprietary estoppel which, according to the learned authors, forms an exception to the rule that estoppel cannot found a cause of action.
But if we look at the judgments of Lord Denning and Scarman, L.J., it is apparent that they did not base their decision on any distinctive feature of proprietary estoppel but proceeded on the assumption that there was no distinction between promissory and proprietary estoppel so far as the problem before them was concerned.
Both the learned Law Lord and the learned Lord Justice applied the principle of promissory estoppel in giving relief to Crabb.
Lord Denning, referring to what Lord Cairns had said in Hughes vs Metropolitan Railway Co.,(1) a decision from which inspiration was drawn by him for evolving the doctrine of promissory estoppel in the High Tree 's case, observed that " it is the first principle on which all courts of equity proceed. that it will prevent person from insisting on his strict legal rights whether arising under a contract, or on his title deeds, or by statute when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties".
The decision in the High Trees ' case was also referred to the learned Law Lord and so also other cases supporting the doctrine of promissory estoppel.
Scarman, L.J. also observed that in pursuing the inquiry as to whether there was an equity in favour of Crabb, he did not find helpful "the distinction between promissory and proprietary estoppel".
He added that this "distinction may indeed be valuable to those who have to teach or expound the law, but I do not think that, in solving the particular problem raised by a particular case, putting the law into categories is of the slightest assistance".
It does appear to us that this was a case deci 665 ded on the principle of promissory estoppel.
The representative of the Arun District Council clearly gave assurance to Crabb that they would give him access to the new road at point B to serve the southern portion of his land and the Arun District Council in fact constructed a gate at point B, and in the belief induced by this representation that he would have right of access to the new road at point B, Crabb agreed to sell the northern portion of his land without reserving for himself as owner of the southern portion any right of way over the northern portion for the purpose of access to the new road.
This was the reason why the Court raised an equity in favour of Crabb and held that the equity would be satisfied by giving Crabb "the right of access at point B free of charge without paying anything for it".
Arun District Council was held bound by its promise to provide Crabb access to the new road at point B and this promise was enforced against Arun District Council at the instance of Crabb.
The case was one which fell within the category of promissory estoppel and it may be regarded as supporting the view that promissory estoppel can be the basis of a cause of action.
It is possible that the case also came within the rule of proprietary estoppel enunciated by Lord Kingsdown in Ramsden vs Dyson(1) : "The rule of law applicable to the case appears to me to be this : If a man, under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the land lord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation." and Spencer Bower and Turner may be right in observing that that was perhaps the reason why it was held that the promise made by Arun District Council gave rise to a cause of action in favour of Crabb.
But, on what principle, one may ask, is the distinction to be sustained between promissory estoppel and proprietary estoppel in the matter of enforcement by action.
If proprietary estoppel can furnish a cause of action, why should promissory estoppel not ? There is no qualitative difference between the two.
Both are the off springs of equity and if equity is flexible enough to permit proprietary estoppel to be used as a cause of action, there is no reason in logic or principle why promissory estoppel should also not be available as a cause of action, if necessary to satisfy the equity.
666 But perhaps the main reason why the English Courts have been reluctant to allow promissory estoppel to found a cause of action seems to be the apprehension that the doctrine of consideration would other wise be completely displaced.
There can be no doubt that the decision of Lord Denning in the High Trees ' case represented a bold attempt to escape from the limitation imposed by the House of Lords in Jorden vs Money (supra) and it rediscovered an equity which was long embedded beneath the crust of the old decisions in Hughes vs Metropolitan Railway Co. (supra) and Birmingham and District Land Co. vs London and North Western Rail Co. (supra), and brought about a remarkable development in the law with a view to ensuring its approximation with justice, an ideal for which the law has been constantly striving.
But it is interesting to note the Lord Denning was not prepared to go further, as he thought that having regard to the doctrine of consideration which was so deeply entrenched in the jurisprudence of the country, it might be unwise to extend promissory estoppel so as to found a cause of action and that is why he uttered a word of caution in Combe vs Combe (supra) that the principle of promissory estoppel "should not be stretched too far, lest it should be endangered".
The learned Law Lord proceeded to add "seeing that the principle never stands alone as giving a cause of action in itself, it can never do away with the necessity of consideration when that is an essential part of the cause of action.
The doctrine of consideration is too firmly fixed to be overthrown by a side wind.
" Spencer Bower and Turner also point out at page 384 of their Treatise (3rd ed) that it is difficult to see how in a case of promissory estoppel a promise can be used to found a cause of action without according to it operative contractual force and it is for this reason that "a contention that a promissory estoppel may be used to found a cause of action must be regarded as an attack on the doctrine of consideration." The learned authors have also observed at page 387 that "to give a plaintiff a cause of action on a promissory estoppel must be little less than to allow an action in contract where consideration is not shown" and that cannot be done because consideration "still remains a cardinal necessity of the formation of a contract.
" It can hardly be disputed that over the last three or four centuries the doctrine of consideration has come to occupy such a predominant position in the law of contract that under the English law it is impossible to think of a contract without consideration and, therefore, it is understandable that the English courts should have hesitated to push the doctrine of promissory estoppel to its logical conclusion and stopped short at allowing it to be used merely as a weapon of defence, though, as we shall point out, there are, quite a few cases where this doctrine has been used 667 not as founding a cause of action in itself but as a part of a cause of a action.
The modern attitude towards the doctrine of consideration is, however, changing fast and there is considerable body of juristic thought which believes that this doctrine is "something of an anchronism".
Prof. Holdsworth pointed out long ago in his History of English Law that "the requirements of consideration in its present shape prevent the enforcement of many contracts, which ought to be enforced, if the law really wishes to give effect to the lawful intentions of the parties to them; and it would prevent the enforcement of many others, if the judges had not used their ingenuity to invest considerations.
But the invention of considerations, by reasoning which is both devious and technical, adds to the difficulties of the doctrine".
Lord Wright remarked in an article published in that the doctrine of consideration in its present form serves no practical purpose and ought to be abolished.
Sir Federick Pollock also said in his well known work of `Ganius of Common Law ', p. 91 that the application of the doctrine of consideration" to various unusual but not unknown cases has been made subtle and obscured by excessive dialectic refinement".
Equally strong is the condemnation of this doctrine in judicial pronouncements.
Lord Duned observed in the well known case of Dunlop Pneumatic Tyre Co. vs Selfridge and Co. Ltd.(1) "I confess that this case is to my mind apt to nip any budding affection which one might have had for the doctrine of consideration.
For the effect of that doctrine in the present case is to make it possible for a person to snap his fingers at a bargain deliberately made, a bargain not in itself unfair, and which the person seeking to enforce it has a legitimate interest to enforce.
" The doctrine of consideration has also received severe criticism at the hands of Dean Roscoe Pound in the United States.
The reason is that promise as a social and economic institution becomes of the first importance in a commercial and industrial society and it is an expression of the moral sentiment of a civilised society that a man 's word should be `as good as his bond ' and his fellow men should be able to rely on the one equally with the other.
That is why the Law Revision Committee in England in its Sixth Report made as far back as 1937 accepted Prof. Holdsworth 's view and advocated that a contract should exist if it was intended to create or affect legal relations and either consideration was present or the contract was reduced to writing.
This recommendation, however, did not fructify into law with the result that the present position remains what it was.
But having regard to the general opprobrium to which the doctrine of consideration has been subjected 668 by eminent jurists, we need not be unduly anxious to project this doctrine against assault or erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice.
It may be pointed out that the Law Commission of India in its 13th Report adopted the same approach and recommended that, by way of exception to section 25 of the Indian Contract Act, 1925, a promise, express or implied, which the promisor knows or reasonably should know, will be relied upon by the promisee, should be enforceable, if the promisee has altered his position to his detriment in reliance on the promise.
We do not see any valid reason why promissory estoppel should not be allowed to found a cause of action where, in order to satisfy the equity, it is necessary to do so.
We may point out that even in England where the judges apprehending that if a cause of action is allowed to be founded on promissory estoppel it would considerably erode, if not completely overthrow, the doctrine of consideration, have been fearful to allow promissory estoppel to be used as a weapon of offence, it is interesting to find that promissory estoppel has not been confined to a purely defensive role.
Lord Denning himself said in Combe vs Combe (supra) that promissory estoppel "may be a part of a cause of action", though "not a cause of action itself".
In fact there have been several cases where promissory estoppel has been successfully invoked by a party to support his cause of action, without actually founding his cause of action exclusively upon it.
Two such cases are : Robertson vs Minister of Pensions(1) and Evenden vs Guildford City Association Football Club Ltd.(2) The English courts have thus gone a step forward from the original position when promissory estoppel was regarded merely as a passive equity and allowed it to be used as a weapon of offence to a limited extent as a part of the cause of action, but still the doctrine of consideration continues to inhibit the judicial mind and that has thwarted the full development of this new equitable principle and the realisation of its vast potential as a juristic technique for doing justice.
It is true that to allow promissory estoppel to found a cause of action would seriously dilute the principle which requires consideration to support a contractual obligation, but that is no reason why this new principle, which is a child of equity brought into the world with a view to promoting honesty and good faith and bringing law closer to justice should be held in fetters and not allowed to operate in all the activist magnitude, so that it may fulfil the purpose for which it was conceived and born.
It must be remembered that law is not a mausoleum.
It is not an antique to be taken 669 down, dusted, admired and put back on the shelf.
It is rather like an old vigorous tree, having its roots in history, yet continuously taking new grafts and putting out new sprouts and occasionally dropping dead wood.
It is essentially a social process, the end product of which is justice and hence it must keep on growing and developing with changing social concepts and values.
Otherwise, there will be estrangement between law and justice and law will cease to have legitimacy.
It is true as pointed out by Mr. Justice Holmes, that continuity with the past is a historical necessity but it must also be remembered at the same time, as pointed out by Mr. Justice Cardozo that "conformity is not to be turned into a "fetish".
We would do well to recall the famous words uttered by Mr. Justice Cardozo while closing his first lecture on "Paradoxes of Legal Science"; "The disparity between precedent and ethos may so lengthen with the years that only covin and chicenery would be disappointed if the separation were to end.
There are many intermediate stages, mores, if inadequate to obliterate the past, may fix direction for the future.
The evil precedent may live, but so sterilized and truncated as to have small capacity for harm.
It will be prudently ignored when invoked as an apposite analogy in novel situations, though the novel element be small.
There will be brought forward other analogies, less precise, it may be, but more apposite to the needs of morals.
The weights are constantly shifted to restore the equilibrium between precedent and justice.
" Was it not Lord Denning who exhorted judges not to be timorous sours but to be bold spirits, ready to allow a new cause of action if justice so required.
(Candler vs Crane Christmas & Co.(1) We may profitably consider at this stage what the American law on the subject is because in the United States the law has always shown a greater capacity for adjustment and growth than elsewhere.
The doctrine of promissory estoppel has displayed remarkable vigour and vitality in the hands of American Judges and it is still rapidly developing and expanding in the United States.
It may be pointed out that this development does not derive its origin in any way from the decision of Lord Denning in the High Trees ' case but ante dates this decision by a number of years; perhaps it is possible that it may have helped to inspire that decision.
It was long before the decision in the High Trees 'case that the American Law Institute 's Restatement of the Law of Contract 's came out with the following proposition in Article 90 : 670 "A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcement of the promise.
" This proposition was explained and elucidated by several illustrations given in the article and one of such illustrations was as follows : "A promises B to pay him an annuity during B 's life.
B thereupon resigns a profitable employment, as A expected that he might.
B receives the annuity for some years, in the meantime becoming disqualified from again obtaining good employment.
A 's promise is binding.
" It is true that the Restatement has not the same weight, as a source of law, as actual decisions of courts of high standing, yet the principle set out in Article 90 has in fact formed the basis of a number of decisions in various states and it is now becoming increasingly clear that a promise may in the United States derive contractual enforceability if it has been made by the promisor intending that it would be acted on and the promisee has altered his position in reliance on it, notwithstanding that there is no consideration in the sense in which that word is used in English and Commonwealth jurisprudence.
Of course the basic requirement for invoking this principle must be present namely, that the fact situation should be such that "injustice can be avoided only by enforcement of the promise".
There are numerous examples of the application of this principle to be found in recent American decisions.
There is, for instance, the long line of cases in which a promise to give a charitable subscription has been consistently held to be enforceable at the suit of the charity.
Though attempts have been made to justify these decisions by reasoning that the charity by commencing or continuing its charitable work after receiving promise has given good consideration for it, we do not think that, on closer scrutiny, the enforceability of the promise in these cases can be supported by spelling out the presence of some form of consideration and the true principle on which they are really based is the principle of promissory estoppel.
This is also the view expressed in the following statement at page 657 of vol.
19 of American Jurisprudence : "A number of courts have upheld the validity of charitable subscriptions on the theory of promissory estoppel holding that while a mere promise to contribute is unenforceable for want of consideration, if money has been expended or liabilities have been incurred in reliance on the promise so 671 that non fulfillment will cause injury to the payee, the donor is estopped to assert the lack of consideration, and the promise will be enforced." Chief Justice Cardozo, presiding over the Court of Appeals of the State of New York, explained the ratio of these decisions in the same terms in Alleghany College vs National Chauteuque County Bank(1): "The half truths of one generation tend at times to perpetuate themselves in the law as the whole truths of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten.
The doctrine of consideration has not escaped the common lot.
As far back as 1881, Judge Holmes in his lectures on the Common Law (p. 292) separated the detriment which is merely a consequence of the promise from the detriment, which is in truth the motive or inducement, and yet added that the courts 'have gone far in obliterating this distinction '.
The tendency toward effacement has not lessened with the years.
On the contrary there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled a 'promissory estoppel '.
Williston, Contract, Ss. 139, 116.
Whether the exception has made its way in this State to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say.
Cases such as and be signposts on the road.
Certain at least it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions.
So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor.
The question may also be whether it can be squared with the doctrine of consideration as qualified by the doctrine of promissory estoppel".
We have said that the cases in this State have recognized this exception, if exception it is thought to be.
Thus, in the subscription was made without request, express or implied that the church do anything on the faith of it.
Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept.
We held the promise binding, though 672 consideration there was none except upon the theory of a promissory estoppel.
In a situation substantially the same became the basis for a like ruling.
So in 103 N.Y. 600 and the moulds of consideration as fixed by the old doctrine were subject to a like expansion.
Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made.
Judges have been affected by the thought that 'defences of that character ' are 'breaches of faith towards the public, and especially towards those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested '.
W. F. Allen J. in 12 N.Y. 18 and of and cases there cited.
The result speaks for itself irrespective of the motive.
Decisions which have stood so long, and which are supported by so many considerations of public policy and reason, will not be over ruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction of its justice, as from historical accidents of practice and procedure.
(8 Holdsworth, History of English Law, 7 et.
The concept survives as one of the distinctive features of our legal system.
We have no thought to suggest that it is obsolete or on the way to be abandoned.
As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form.
" It is also interesting to note that the doctrine of promissory estoppel has been widely used in the United States in diverse other situations as founding a cause of action.
The most notable instances are to be found in what may be called the "sub contractor bid cases" in which a contractor about to tender for a contract, invites a sub contractor to submit a bid for a sub contract and after receiving his bid the contractor submits a tender.
In such cases, the sub contractor has been held unable to retract his bid and be liable in damages if he does so.
It is not possible to say that any detriment which the contractor may be able to show in these cases would amount to consideration in its strict sense and these decisions have plainly been reached on an application of the doctrine of promissory estoppel.
One of such cases was Drennan vs Star Paving Company(1) where Traynor, J. explicitly adopted as good law the text of Article 90 of the Restatement of the law of Contracts quoted above and stated in so many words that "the absence of consideration is not fatal to the enforcement of such a promise".
There are also numerous cases where the doctrine of promissory estoppel has been applied against the Government where 673 the interest of justice, morality and common fairness clearly dictated such a course.
We shall refer to these cases when we discuss the applicability of the doctrine of equitable estoppel against the Government.
Suffice it to state for the present that the doctrine of promissory estoppel has been taken much further in the United States than in English and Commonwealth jurisdictions and in some States at least, it has been used to reduce, if not to destroy, the prestige of consideration as an essential of valid contract.
Vide Spencer Bower and Turner 's Estoppel by Representation (2d) page 358.
We now go on to consider whether and if so to what extent is the doctrine of promissory estoppel applicable against the Government.
So far as the law in English is concerned, the position cannot be said to be very clear.
Rowlett J., in an early decision in Rederiaktiebolaget Amphitrite vs The King(1) held that an undertaking given by the British Government to certain neutral ship owners during the First World War that if the shipowners sent a particular ship to the United Kingdom with a specified cargo, she shall not be detained, was not enforceable against the British Government in a court of law and observed that his main reason for taking this view was that: " it is not competent for the Government to fetter its future executive action, which must necessarily be determined by the needs of the community when the question arises.
It cannot by contract hamper its freedom of action in matters which concern the welfare of the State.
" This observation has however not been regarded by jurists as laying down the correct law on the subject since it is "very wide and it is difficult to determine its proper scope".
Anson 's English Law of Contract, 22d.
The doctrine of executive necessity propounded by Rowlatt, J., was in fact disapproved by Denning, J., as he then was, in Roberston vs Minister of Pensions (supra) where the learned Judge said: The Crown cannot escape by saying that estoppels do not bind the Crown for that doctrine has long been exploded.
Nor can the Crown escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
That doctrine was propounded by Rowlatt, J., in Rederiak tiebolaget Amphitrite vs The King but it was unnecessary for the decision because the statement there was not a promise which was intended to be binding but only an expression of intention.
Rowlatt, J., seems to have been influenced by 674 the cases on the right of the Crown to dismiss its servants at pleasure, but those cases must now all be read in the light of the judgment of Lord Atkin in Reily vs The King (1954) A.C. 176, 176).
In my opinion the defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract.
" It is true that the decision of Denning J., in this case was overruled by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (1) but that was on the ground that the doctrine of promissory estoppel cannot be invoked to "bar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it".
The decision of the House of Lords did not express any disapproval of the applicability of the doctrine of promissory estoppel against the Crown nor did it overrule the view taken by Denning J., that the Crown cannot escape its obligation under the doctrine of promissory estoppel by "praying in aid the doctrine of executive necessity.
" The statement of the law by Denning, J., may, therefore, still be regarded as holding the field and it may be taken to be a judicially favoured view that the Crown is not immune from liability under the doctrine of promissory estoppel.
The courts in America for a long time took the view that the doctrine of promissory estoppel does not apply to the Government but more recently the courts have started retreating from that position to a sounder one, namely, that the doctrine of promissory estoppel may apply to the Government when justice so requires.
The second edition of American Jurisprudence brought out in 1966 in paragraph 123 points out that "equitable estoppel will be invoked against the State when justified by the facts", though it does warn that this doctrine "should not be lightly invoked against the State.
" Later in the same paragraph it is stated that "as a general rule, the doctrine of estoppel will not be applied against the State in its governmental, public or sovereign capacity", but a qualification is introduced that promissory estoppel may be applied against the State even in its governmental, public or sovereign capacity if "its application is necessary to prevent fraud or manifest injustice".
Since 1966 there is an increasing trend towards applying the doctrine of promissory estoppel against the State and the old law that promissory estoppel does not apply against the government is definitely declining.
There have been numerous cases in the State courts where it has been held that promissory estoppel may be applied even against the Govern 675 ment in its governmental capacity where the accommodation of the needs of justice to the needs of effective government so requires.
The protagonists of the view that promissory estoppel cannot apply against the Government or a public authority seek to draw inspiration from the majority decision of the United States Supreme Court in Federal Crop Insurance Corporation vs Merrill.(1) But we do not think that decision can be read as laying down the proposition that the doctrine of promissory estoppel can never be invoked against the Government.
There the County Committee acting as the agent of the Federal Crop Insurance Corporation which was a wholly Government owned corporation constituted under the Federal Crop Insurance Act, advised the respondents that their entire 460 acres of spring wheat crop which included spring wheat reseeded.
On winter wheat acreage was insurable and acting upon it, the respondents made an application for insurance which was forwarded by the County Committee to the Denver office of the Corporation with a recommendation for acceptance.
The application did not mention that any part of the insured crop was reseeded and it was accepted by the Denver office of the Corporation.
There were at this time wheat crop insurance regulations framed by the Corporation and published in the Federal Register which prohibited insurance of spring wheat reseeded on winter wheat acreage but neither the respondents nor the County Committees which was acting as the agent of the Corporation was aware of them.
A few months later, most of the respondent 's crop was destroyed by drought and on a claim being made by the respondents under the policy of insurance, the Corporation refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited insurance of reseeded wheat.
The refusal was upheld by the Supreme Court by a majority of five to four.
The majority observed: "It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business theretofore conducted by private enterprises or engages in competitions with private ventures.
Whatever the form in which the Government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that be who purports to act for the Government stays within the bounds of his authority And this is so even though as here, the agent himself may have been unaware of the limitations upon his autho 676 rity. "Man must turn square corners when they deal with the Government", does not reflect a callous outlook.
It merely expresses the duty of all courts to observe the conditions defined by Congress for charging the public treasury.
" It will be seen that the Corporation was held entitled to repudiate its liability because the wheat crop insurance regulations prohibited insurance of reseeded wheat and the assurance given by the County Committee as the agent of the Corporation that the reseeded wheat was insurable being contrary to the wheat crop insurance regulations, could not be held binding on the Corporation.
It was not within the authority of the County Committee to give such assurance contrary to the wheat crop insurance regulations and hence no promissory estoppel against the Corporation could be founded upon it.
This decision did not say that even if an assurance given by an agent is within the scope of his authority and is not prohibited by law, it could still not create promissory estoppel against the Government.
But, it may be pointed out, even this limited holding has come in for considerable criticism at the hands of jurists in the United States.
See Davis on Administrative Law (3rd d.) pages 344 345.
Referring to the observation of the majority that "Men must turn square corners when they deal with the Government", Maguire and Zimet have poetically responded by saying: "It is hard to see why the Government should not be held to a like standard of rectangular rectitude when dealing with its citizens." (Maguire and Zimet, Hobson 's Choice and Similar Practices in Federal Taxation, 48 Harv.
L. Rev. 1287 at 1299).
There has so far not been any decision of the Supreme Court of the United States taking the view that the doctrine of promissory estoppel cannot be invoked against the Government.
The trend in the State courts, of late, has been strongly in favour of the application of the doctrine of promissory estoppel against the Government and public bodies "where interests of justice, morality and common fairness clearly dictate that course.
" It is being increasingly felt that "that the Government ought to set a high standard in its dealings and relationships with citizens and the word of a duly authorised Government agent, acting within the scope of his authority ought to be as good as a Government bond".
Of course, as pointed out by the United States Court of Appeals, Third Circuit in Valsonavich vs United States, (1) the Government would not be estopped "by the acts of its officers and agents who without authority enter into 677 agreements to do what the law does not sanction or permit" and "those dealing with an agent of the Government must be held to have notice of limitations of his authority" as held in Merrill 's case.
This is precisely what the House of Lords also held in England in Howell vs Falmouth Boat Construction Co. Ltd. (supra) where Lord Simonds stated the law to be: "The illegality of an act is the same whether or not the actor has been misled by an assumption of authority on the part of a Government officer however high or low in the hierachy.
The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority.
In my opinion the answer is clearly No." But if the acts or omissions of the officers of the Government are within the scope of their authority and are not otherwise impermissible under the law, they "will work estoppel against the Government.
" When we turn to the Indian law on the subject it is heartening to find that in India not only has the doctrine of promissory estoppel been adopted in its fullness but it has been recognized as affording a cause of action to the person to whom the promise is made.
The requirement of consideration has not been allowed to stand in the way of enforcement of such promise.
The doctrine of promissory estoppel has also been applied against the Government and the defence based on executive necessity has been categorically negatived.
It is remarkable that as far back as 1880, long before the doctrine of promissory estoppel was formulated by Denning, J., in England, A Division Bench of two English Judges in the Calcutta High Court applied the doctrine of promissory estoppel and recognised a cause of action founded upon it in the Ganges Manufacturing Co. vs Surajmuli and other(1).
The doctrine of promissory estoppel was also applied against the Government in a case subsequently decided by the Bombay High Court in Municipal Corporation of Bombay vs The Secretary of State.(2) The facts of this last mentioned case in Municipal Corporation of Bombay vs The Secretary of State (supra) are a little interesting and it would be profitable to refer to them.
The Government of Bombay, with a view to constructing an arterial road, requested the Municipal Commissioner to remove certain fish and vegetable 678 markets which obstructed the construction of the proposed road.
The Municipal Commissioner replied that the markets were vested in the Corporation of Justices but that he was willing to vacate certain municipal stables which occupied a portion of the proposed site if the Government would rent other land mentioned in his letter, to the Municipality at a nominal rent, the Municipality undertaking to bear the expenses of levelling the same and permit the Municipality to erect on such land "stables of wood and iron with nobble foundation to be removed at six months ' notice on other suitable ground being provided by Government".
The Government accepted the suggestion of the Municipal Commissioner and sanctioned the application of the Municipal Commissioner for a site for stabling on the terms set out above and the Municipal Commissioner thereafter entered into possession of the land and constructed stables, workshops and chawls on the same at considerable expense.
Twenty four years later the Government served a notice on the Municipal Commissioner determining the tenancy and requesting the Municipal Commissioner to deliver possession of the land within six months and in the mean time to pay rent at the rate of Rs.12,000/ per month.
The Municipal Corporation declined to hand over possession of the land or to pay the higher rent and the Secretary of State for India thereupon filed a suit against the Municipal Corporation for a declaration that the tenancy of the Municipality stood determined and for an order directing the municipality to pay rent at the rate of Rs. 12,000/ per month.
The suit was resisted by the Municipal Corporation on the ground then the events which had transpired had created an equity in favour of the Municipality which afforded an answer to the claim of the Government to eject the Municipality.
This defence was upheld by a Division Bench of the High Court and Jenkins C.J., speaking on behalf of the Division Bench, pointed out that, in view of the following facts, namely: " the Municipality gave up the old stables, levelled the ground, and erected the moveable staibles in 1866 in the belief that they had against the Government an absolute right not to be turned out until not only the expiration of six months notice, but also other suitable ground was furnished: that this belief is referable to an expectation created by the Government that their enjoyment of the land would be in accordance with this belief: and that the Government knew that the Municipality were acting in this belief so created:" 679 an equity was created in favour of the Municipality which entitled it "to appeal to the Court for its aid in assisting them to resist the Secretary of State 's claim that they shall be ejected from the ground".
The learned Chief Justice pointed out that the doctrine which he was applying took its origin "from the jurisdiction assumed by Courts of Equity to intervene in the case of or to prevent fraud" and after referring to Ramsden vs Dyson(1) observed that the Crown also came within the range of this equity.
This decision of the Bombay High Court is a clear authority for the proposition that it is open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the form of a formal contract as required by the Constitution.
That is how this decision has in fact been interpreted by this court in Union of India vs Indo Afghan Agencies:(2) We don 't find any decision of importance thereafter on the subject of promissory estoppel until we come to the decision of this Court in Collector of Bombay vs Municipal Corporation of the City of Bombay & Ors.(3).
The facts giving rise to this case were that in 1865 the Government of Bombay called upon the predecessor in title of the Municipal Corporation of Bombay to remove old markets from a certain site and vacate it and on the application of the Municipal Commissioner, the Government passed a resolution approving and authorizing the grant of another site to the Municipality.
The resolution stated further that "the Government do not consider that any rent should be charged to the Municipality as the markets will be like other public buildings, for the benefit of the whole community".
The Municipal Corporation gave up the site on which the old markets were situated and spent a sum of Rs. 17 lakhs in erecting and maintaining markets on the new site.
In 1940 the Collector of Bombay assessed the new site to land revenue and the Municipal Corporation there upon filed a suit for a declaration that the order of assessment was ultra vires and it was entitled to hold the land for ever without payment of any assessment.
The High Court of Bombay held that the Government had lost its right to assess the land in question by reason of the equity arising on the facts of the case in favour of the Municipal Corporation and there was thus a limitation on the right of the Government to assess under section 8 of the Bom 680 bay City Land Revenue Act.
On appeal by the Collector to this Court, the majority Judges held that the Government was not, under the circumstances of the case, entitled to assess land revenue on the land in question because the Municipal Corporation had taken possession of the land in terms of the Government resolution and had continued in such possession openly, uninterruptedly and of right for over seventy years and thereby acquired the limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent.
Chandrasekhra Aiyar, J., agreed with the conclusion reached by the majority but rested his decision on the doctrine of promissory estoppel.
He pointed out that the Government could not be allowed to go back on the representation made by it and stressed the point in the form of an interrogation by asking: "if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must prevent being committed?" He observed that even if the resolution of the Government amounted merely to "the holding out of a promise that no rent will be charged in the future, the Government must be deemed in the circumstances of this case to have bound themselves to fulfil it.
Whether it is the equity recognised in Ramsden 's case (supra) or it is some other form of equity, is not of much importance.
Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power.
" This was of course the solitary view of Chandrasekhara Aiyer, J., but it was approved by this Court in no uncertain terms in Indo Afghan Agencies case (supra).
Then we come to the celebrated decision of this Court in the Indo Afghan Agencies case (supra).
It was in this case that the doctrine of promissory estoppel found its most eloquent exposition.
We may briefly state the facts in order to appreciate the ratio of the decision.
Indo Afghan Agencies Ltd. who were the respondents before the Court, acting in reliance on the Export Promotion Scheme issued by the Central Government, exported woollen goods to Afghanistan and on the basis of their exports claimed to be entitled to obtain from the Textile Commissioner import entitlement certificate for the full F.O.B. value of the goods exported as provided in the scheme.
The Scheme was not a statutory Scheme having the force of law but it provided that an export of woollen goods would be entitled to import raw material of the total amount equal to 100% of the F.O.B. value of his exports.
The respondents contended that, relying on the promise contained in the Scheme, they had exported woollen goods to Afghanistan and were,.
therefore, entitled to enforce the promise against the Government and to obtain import entitlement 681 certificate for the full F.O.B. value of the goods exported on the principle of promissory estoppel.
This contention was sought to be answered on behalf of the Government by pleading the doctrine of executive necessity and the argument of the Government based on this doctrine was that it is not competent for the Government to fetter its future executive action which must necessarily be determined by the needs of the community when the question arises and no promise or undertaking can be held to be binding on the Government so as to hamper its freedom of executive action.
Certain observations of Rowlatt, J., in Rederiektiabolaget Amphitrite vs The King (supra) were sought to be pressed into service on behalf of the Government in support of this argument.
We have already referred to these observations earlier and we need not reproduce them over again.
These observation undoubtedly supported the contention of the Government but it was pointed out by this Court that these observations were disapproved by Denning J., in Robertson vs Minister of Pensions (supra) where the learned Judge said that "the Crown cannot escape by praying in aid the doctrine of executive necessity, that is the doctrine that the Crown cannot bind itself so as to fetter its future executive action.
The defence of executive necessity is of limited scope.
It only avails the Crown where there is an implied term to that effect or that is the true meaning of the contract" and this statement of Denning, J., was to be preferred as laying down the correct law of the subject.
Shah, J., speaking on behalf of the Court, observed at p. 376: "We are unable to accede to the contention that the executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment.
Under our constitutional set up no person may be deprived of his right or liberty except in due course of and by authority of law; of a member of the Executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law common or statute the Courts will be competent to and indeed would be bound to, protect the rights of the aggrieved citizen.
" The defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen, acting in reliance on the promise, had altered his position.
The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be deteated by invoking the defence of executive necessity.
682 It was also contended on behalf of the Government that if the Government were held bound by every representation made by it regarding its intention, when the exporters have acted in the manner they were invited to act, the result would be that the Government would be bound by a contractual obligation even though no formal contract in the manner required by Article 299 was executed.
But this contention was negatived and it was pointed out by this Court that the respondents "are not seeking to enforce any contractual right: they are seeking to enforce compliance with the obligation which is laid upon the Textile Commissioner by the terms of the Scheme, and we are of the view that even if the Scheme is executive in character, the respondents who were aggrieved because of the failure to carry out the terms of the Scheme were entitled to seek resort to the Court and claim that the obligation imposed upon the Textile Commissioner by the Scheme be ordered to be carried out".
It was thus laid down that a party who has, acting in reliance on a promise made by the Government, altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government.
This Court finally, after referring to the decision in the Ganges Manufacturing Co. vs Surujmull (supra).
The Municipal Corporation of the City of Bombay vs The Secretary of State for India (supra) and Collector of Bombay vs Municipal Corporation of the City of Bombay & Ors.
(supra), summed up the position as follows: "Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the Judge of its own obligation to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." The law may, therefore, now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promises, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract 683 as required by Article 299 of the Constitution.
It is elementary that in a Republic governed by the rule of law, no one, howsoever high or low, is above the law.
Every one is subject to the law as fully and completely as any other and the Government is no exception.
It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter.
It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel.
Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by considerations of "honesty and good faith"? Why should the Government not be held to a high "standard of rectangular rectitude while dealing with its citizens"? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations, but let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Indo Afghan Agencies case and the supremacy of the rule of law was established.
It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action.
If the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promisee and the promisee would alter his position relying upon it.
But if the Government makes such a promise and the promises acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual.
The law cannot acquire legitimacy and gain social acceptance unless it accords with the moral values of the society and the constant endeavor of the Courts and the legislatures must, therefore, be to close the gap between law and morality and bring about as near an approximation between the two as possible.
The doctrine of promissory estoppel is a significant judicial contribution in that direction.
But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires.
If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the 684 Government.
The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it.
When the Government is able to show that in view of the facts as have transpired, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and after this position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies.
It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it.
The Government cannot, as Shah, J., pointed out in the Indo Afghan Agencies case, claim to be exempt from the liability to carry out the promise "on some indefinite and undisclosed ground of necessity or expediency", nor can the Government claim to be the sole judge of its liability and repudiate it "on an ex parte appraisement of the circumstances".
If the Government wants to resist the liability, it will have to disclose to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether these facts and circumstances are such as to render it inequitable to enforce the liability against the Government.
Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands.
It is only if the Court is satisfied, on proper and adequate material placed by the Government, the over riding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government.
The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability.
This is the essence of the rule of law.
The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden.
But even where there is no such over riding public interest, it may still be competent to 685 the Government to resile from the promise "on giving reasonable notice which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position" provided of course it is possible for the promisee to restore status quo ante.
If however, the promisee cannot resume his position, the promise would become final and irrevocable.
Vide Emmanuel Ayodeji Ajayi vs Briscoe.(1) The doctrine of promissory estoppel was also held applicable against a public authority like a Municipal Council in Century Spinning & Manufacturing Co. Ltd. & Anr.
vs The Ulhasuagar Municipal Council & Anr.(2) The question which arose in this case was whether the Ulhas Nagar Municipal Council could be compelled to carry out a promise made by its predecessor municipality that the factories in the industrial area within its jurisdiction would be exempt from payment of octroi for seven years from the date of the levy.
The appellant company, in the belief induced by the assurance and undertaking given by the predecessor municipality that its factory would be exempt from octroi for a period of seven years, expanded its activities, but when the municipal council came into being and took over the administration of the former municipality, it sight to levy octroi duty on appellant company.
The appellant company thereupon filed a writ petition under Article 226 of the Constitution in the High Court of Bombay to restrain the municipal council from enforcing the levy of octroi duty in breach of the promise made by the predecessor municipality.
The High Court dismissed the petition in limine but, on appeal, this Court took the view that this was a case which required consideration and should have been admitted by the High Court.
Shah, J., speaking on behalf of the Court, pointed out "Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice.
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contracted by a person who acts upon the promise: when the law requires that a contract enforceable at law against a public body shall be in certain from or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity." The learned Judge then referred to the decision in the Indo Afghan Agencies case and observed that in that case it was laid down by this 686 Court that "the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice relying upon the representations as to its future conduct made by the Government".
It was also pointed out by the learned Judge that in the Indo Afghan Agencies case this Court approved of the observations made by Denning, J. in Robertson vs Minister of Pensions (supra) rejecting the doctrine of executive necessity and held them to be applicable in India.
The learned Judge concluded by saying in words pregnant in the hope and meaning for democracy: "If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted.
A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice." This Court refused to make a distinction between a private individual and a public body so far as the doctrine of promissory estoppel is concerned.
We then come to another important decision of this Court in Turner Morrison & Co. Ltd. vs Hungerford Investment Trust Ltd. (1) where the doctrine of promissory estoppel was once again affirmed by this Court.
Hegde, J, speaking on behalf of the Court, pointed out: "Estoppel" is a rule of equity.
"That rule has gained new dimensions in recent years.
A new class of estoppel i.e. promissory estoppel has come to be recognised by the courts in this Country as well as in England.
The full implication of 'promissory estoppel ' is yet to be spelled out." The learned Judge, after referring to the decisions in High Trees case, Robertson vs Minister of Pensions (supra) and the Indo Afghan Agencies case, pointed out that "the rule laid down in these decisions undoubtedly advanced the cause of justice and hence we have no hesitation in accepting it.
We must also refer to the decision of this Court in M. Ramanatha Pillai vs The State of Kerala & Anr.(1) because that was a decision strongly relied upon on behalf of the State for negativing the applicability of the doctrine of estoppel against the Government.
This was a case where the appellant was appointed to a temporary post and on the post being abolished, the service of the appellant was terminated.
The appellant challenged the validity of termination of service, inter alia, on 687 the ground that the Government was precluded from abolishing the post and terminating the service on the principle of promissory estoppel.
This ground based on the doctrine of promissory estoppel was negatived and it was pointed out by the Court that the appellant knew that the post was temporary, suggesting clearly that the appellant could not possibly be led into the belief that the post would not be abolished.
If the post was temporary to the knowledge of the appellant, it is obvious that the appellant knew that the post would be liable to be abolished at any time and if that be so, there could be no factual basis for invoking the doctrine of promissory estoppel for the purpose of precluding the Government from abolishing the post.
This view taken by the Court was sufficient to dispose of the contention based on promissory estoppel and it was not necessary to say anything more about it, but the Court proceeded to cite a passage from American Jurisprudence, Vol. 28 (2d) at 783, paragraph 123 and observed that the High Court rightly held "that the courts exclude the operation of the doctrine of estoppel, when it is found that the authority against whom estoppel is pleaded has owed a duty to the public against whom the estoppel cannot fairly operate.
" It was this observation which was heavily relied upon on behalf of the State but we fail to see how it can assist the contention of the State.
In the first place, this observation was clearly obiter, since, as pointed out by us, there was on the facts of the present case no scope for the applicability of the doctrine of promissory estoppel.
Secondly, this observation was based upon a quotation from the passage in paragraph 123 at page 783 of Volume 28 of American Jurisprudence (2 d), but unfortunately this quotation was incomplete and it overlooked, perhaps inadvertently, the following two important sentences at the commencement of the paragraph which clearly show that even in the United States the doctrine of promissory estoppel is applied against the State "when justified by the facts": "There is considerable dispute as to the application of estoppel with respect to the State.
While it is said that equitable estoppel will be invoked against the State when justified by the facts, clearly the doctrine of estoppel should not be lightly invoked against the State" (emphasis supplied).
Even the truncated passage quoted by the Court recognised in the last sentence that though, as a general rule, the doctrine of promissory estoppel would not be applied against the State in its governmental, public or sovereign capacity, the Court would unhesitatingly allow the doctrine to be invoked in cases where it is necessary in order "to prevent fraud or manifest injustice".
This passage leaves no doubt that the 688 doctrine of promissory estoppel may be applied against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice.
It is difficult to imagine that the Court citing this passage with approval could have possibly intended to lay down that in no case can the doctrine of promissory estoppel be invoked against the Government.
Lastly, a proper reading of the observation of the Court clearly shows that what the Court intended to say was that where the Government owes a duty to the public to act differently, promissory estoppel cannot be invoked to prevent the Government from doing so.
This proposition is unexceptionable, because where the Government owes a duty to the public to act in a particular manner, and here obviously duty means a course of conduct enjoined by law, the doctrine of promissory estoppel cannot be invoked for preventing the Government from acting in discharge of its duty under the law.
The doctrine of promissory estoppel cannot be applied in teeth of an obligation or liability imposed by law.
We may then refer to the decision of this Court in Assistant Custodian vs Brij Kishore Agarwala & Ors.(1) It is not necessary to reproduce the facts of this case, because the only purpose for which this decision was relied upon on behalf of the State was to show that the view taken by the House of Lords in Howell vs Falmouth Boat Construction Co. Ltd. (Supra) was preferred by this Court to that taken by Lord Denning in Robertson vs Minister of Pension (supra).
It is true that in this case the Court expressed the opinion "that the view taken by the House of Lords is the correct one and not the one taken by Lord Denning" but we fail to see how that can possibly help the argument of the State.
The House of Lords did not in Howell 's case negative the applicability of the doctrine of promissory estoppel against the Government.
What it laid down was merely this, namely, that no representation or promise made by an officer can preclude the Government from enforcing a statutory prohibition.
The doctrine of promissory estoppel cannot be availed to permit or condone a breach of the law.
The ratio of the decision was succinctly put by Lord Normand when he said" neither a minister nor any subordinate officer of the Crown can by any conduct or representation bar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it".
It may also be noted that promissory estoppel cannot be invoked to compel the Government or even a private party to do an act prohibited by law.
There can also be no promissory estoppel against the exercise of legislative power.
The Legislature can never be precluded 689 from exercising its legislative function by resort to the doctrine of promissory estoppel.
Vide State of Kerala vs Gwalior Rayon Silk Manufacturing Co. Ltd.(1) The next decision to which we must refer is that in Excise Commissioner, U.P. Allahabad vs Ram Kumar.(2) This was also a decision on which strong reliance was placed on behalf of the State.
It is true that, in this case, the Court observed that "it is now well settled by a catena of decisions that there can be no question of estoppel against the Government in the exercise of its legislative, sovereign or executive powers," but for reasons which we shall presently state, we do not think this observation can persuade us to take a different view of the law than that enunciated in the Indo Afghan Agencies ' case.
In the first place, it is clear that in this case there was factually no foundation for invoking the doctrine of promissory estoppel.
When the State auctioned the licence for retail sale of country liquor and the respondents being the highest bidders were granted such licence, there was in force a Notification dated 6th April, 1959, issued under section 4 of the U.P. Sales Tax Act, 1948, exempting sale of country liquor from payment of sales tax.
No announcement was made at the time of the auction whether the exemption from sales tax under this Notification dated 6th April, 1959 was or was not likely to be withdrawn.
However, on the day following the commencement of the licence granted to the respondents, the Government of U.P. issued a Notification dated 2nd April, 1969 superseding the earlier Notification dated 6th April, 1959 and imposing sales tax on the turnover in respect of country spirit with immediate effect.
This notification dated 2nd April, 1969 was challenged by the respondents by filing a writ petition and amongst the several grounds of challenge taken in the writ petition, one was that "since the State Government did not announce at the time of the aforesaid auction that the Notification dated 6th April, 1959 was likely to be withdrawn and the sales of country liquor were likely to be subjected to the levy of sales tax during the excise year and in reply to the query made by them at the time of the auction they were told by the authorities that there was no sales tax on the sale of country liquor, the appellants herein were estopped from making the demand in respect of sales tax and recovering the same from them".
It was in the context of this ground of challenge that the Court came to make the observation relied upon on behalf of the State.
Now, it is clear that, even taking the case of the respondents at its highest, there was no representation or promise made by the Government that they would continue the exemp 690 tion from sales tax granted under the Notification dated 6th April, 1959 and would not withdraw it, and the Notification dated 2nd April, 1969 could not, therefore, be assailed as being in breach of any such representation or promise.
There was accordingly, no factual basis for making good the plea of promissory estoppel and the observation made by the court in regard to the applicability of the doctrine of promissory estoppel against the Government was clear obiter.
That perhaps was the reason why the Court did not consider it necessary to refer to the earlier decisions in Century Spinning & manufacturing Co. 's case and Turner Morrison 's case and particularly the decision in the Indo Afghan Agencies case where the court in so many terms applied the doctrine of promissory estoppel against the Government in the exercise of its executive power.
It is not possible to believe that the Court was oblivious of these earlier decisions, particularly when one of these decisions in the Indo Afghan Agencies case was an epoch making decision which marked a definite advance in the field of administrative law.
Moreover, it may be noted that though, standing by itself, the observation made by the Court that "there can be no question of estoppel against the Government in exercise of its legislative, sovereign or executive powers" may appear to be wide and unqualified, it is not so, if read in its proper context.
This observation was made on the basis of certain decisions which the Court proceeded to discuss in the succeeding paragraphs of the judgment.
The Court first relied on the statement of the law contained in paragraph 123 at page 783, Volume 28 of the American Jurisprudence (2d), but it omitted to mention the two important sentences at the commencement of the paragraph and the words "unless its application is necessary to prevent fraud or manifest injustice" at the end, which clearly show that even according to the American Jurisprudence, the doctrine of promissory estoppel is not wholly inapplicable against the Government in its governmental, public or sovereign capacity, but it can be invoked against the Government "when justified by the facts" as for example where it is necessary to prevent fraud or injustice.
In fact, as already pointed out above, there are numerous cases in the United States where the doctrine of promissory estoppel has been applied against the Government in the exercise of its governmental, public or executive powers.
The Court then relied upon the decision in the Gwalior Rayon Silk Manufacturing Co. 's case, but that decision was confined to a case where legislation was sought to be precluded by relying on the doctrine of promissory estoppel and it was held, and in our opinion rightly, that there can be no promissory estoppel against the legislature in the exercise of its legislative function.
That decision does not negative the applicability of the 691 doctrine of promissory estoppel against the Government in the exercise of its governmental, public or executive powers.
The decision in Howell 's case was, thereafter, relied upon by the Court, but that decision merely says that the Government cannot be debarred by promissory estoppel from enforcing a statutory prohibition.
It does not countenance an absolute proposition that promissory estoppel can never be invoked against the government.
The Court also cited a passage from the judgment of the High Court of Jammu & Kashmir in Malhotra & Sons & Ors.
vs Union of India & Ors.
,(1) but this passage itself makes it clear that the courts will bind the Government by its promise where it is necessary to do so in order to prevent manifest injustice or fraud.
The last decision on which the Court relied was Federal Crop Insurance Corporation vs Morrill (supra) but this decision also does not support the view contended for on behalf of the State.
We have already referred to this decision earlier and pointed out that the Federal Crop Insurance Corporation in this case was held not liable on the policy of insurance, because the regulations made by the Corporation prohibited insurance of reseeded wheat.
The principle of this decision was that promissory estoppel cannot be invoked to compel the Government or a public authority to carry out a representation or promise which is contrary to law.
It will thus be seen from the decisions relied upon in the judgment that the Court could not possibly have intended to lay down an absolute proposition that there can be no promissory estoppel against the Government in the exercise of its governmental, public or executive powers.
That would have been in complete contradiction of the decisions of this Court in the Indo Afghan Agencies Case, Century Spinning and Manufacturing Co. 's case and Turner Morrison 's case and we find it difficult to believe that the Court could have ever intended to lay down any such proposition without expressly referring to these earlier decisions and over ruling them.
We are, therefore, of the opinion that the observation made by the Court in Ram Kumar 's case does not militate against the view we are taking on the basis of the decisions in the Indo Afghan Agencies ' case, Century Spinning & Manufacturing Co. 's case and Turner Morrison 's case in regard to the applicability of the doctrine of promissory estoppel against the Government.
We may then refer to the decision of this Court in Bihar Eastern Gangetic Fishermen Co operative Society Ltd. vs Sipahi Singh & Ors.(2) It was held in this case in paragraph 12 of the judgment that the respondent could not invoke the doctrine of promissory estoppel because he was unable to show that, relying on the representation of the Govern 692 ment, he had altered his position by investing moneys and the allegations made by him in that behalf were "much too vague and general" and there was accordingly no factual foundation for establishing the plea of promissory estoppel.
On this view, it was unnecessary to consider whether the doctrine of promissory estoppel was applicable against the Government, but the Court proceeded to reiterate, without any further discussion, the observation in Ram Kumar 's case that "there cannot be any estoppel against the Government in the exercise of its sovereign, legislative and executive functions".
This was clearly in the nature of obiter and it cannot prevail as against the statement of law laid down in the Indo Afghan Agencies case.
Moreover, it is clear from paragraph 14 of the judgment that this Court did not intend to lay down any proposition of law different from that enunciated in the Indo Afghan Agencies case because it approved of the decision in the Indo Afghan Agencies case and distinguished it on the ground that in that case there was not enforcement of contractual right but the claim was founded upon equity arising from the Scheme, while in the case before the Court, a contractual right was sought to be enforced.
There is, therefore, nothing in this decision which should compel us to take a view different from the one we are otherwise inclined to accept.
We may point out that in the latest decision on the subject in Radha Krishna Agarwal vs State of Bihar & Ors.(1) this Court approved of the decisions in the Indo Afghan Agencies case and Century Spinning and Manufacturing Co 's case and pointed out that these were cases where it could be held that public bodies or the State are as much bound as private individuals are to carry out obligations incurred by them because parties seeking to bind the authorities have altered their position to their disadvantage or have acted to their detriment on the strength of the representations made by these authorities".
It would, therefore, be seen that there is no authoritative decision of the Supreme Court which has departed from the law laid down in the celebrated decisions in the Indo Afghan Agencies case and the Century Spinning & Manufacturing Co 's case.
The law laid down in these decisions as elaborated and expounded by us continues to hold the field.
We may now turn to examine the facts in the light of the law discussed by us.
It is clear from the letter of the 4th respondent dated 23rd January, 1969 that a categorical representation was made by the 4th respondent on behalf of the Government that the proposed vanaspati factory of the appellant would be entitled to exemption from sales tax 693 in respect of sales of vanaspati effected in Uttar Pradesh for a period of three years from the date of commencement of production.
This representation was made by way of clarification in view of the suggestion in the appellant 's letter dated 22nd January, 1969 that the financial institutions were not prepared to regard the earlier letter of the 4th respondent dated 22nd December, 1968 as a definite commitment on the part of the Government to grant exemption from sales tax.
Now the letter dated 23rd January, 1969 clearly shows that the 4th respondent made this representation in his capacity as the Chief Secretary of the Government, and it was, therefore, a representation on behalf of the government.
It was faintly contended before us on behalf of the State that this representation was not binding on the Government, but we cannot countenance this argument, because, in the first place, the averment in the writ petition that the 4th respondent made this representation on behalf of the government was not denied by the State in the affidavit in reply filed on its behalf, and secondly, it is difficult to accept the contention that the 4th respondent, who was at the material time the Chief Secretary to the government and also advisor to the Governor who was discharging the functions of the Government.
We must, therefore, proceed on the basis that this representation made by the 4th respondent was a representation within the scope of his authority and was binding on the Government.
Now, there can be no doubt that this representation was made by the Government knowing or intending that it would be acted on by the appellant, because the appellant had made it clear that it was only on account of the exemption from sales tax promised by the Government that the appellant had decided to set up the factory for manufacture of vanaspati at Kanpur.
The appellant, in fact, relying on this representation of the Government, borrowed moneys from various financial institutions, purchased plant and machinery from M/s. De Smith (India) Pvt. Ltd., Bombay and set up a vanaspati factory at Kanpur.
The facts necessary for invoking the doctrine of promissory estoppel were, therefore, clearly present and the Government was bound to carry out the representation and exempt the appellant from sales tax in respect out the representation and exempt the appellant from sales tax in respect of sales of vanaspati effected by it in Uttar Pradesh for a period of three years from the date of commencement of the production.
The State, however, contended that the doctrine of promissory estoppel had no application in the present case because the appellant did not suffer any detriment by acting on the representation made by the Government : the vanaspati factory set up by the appellant was quite a profitable concern and there was no prejudice caused to the 694 appellant.
This contention of the State is clearly unsustainable and must be rejected.
We do not think it is necessary, in order to attract the applicability of the doctrine of promissory estoppel, that the promisee acting in reliance of the promise, should suffer any detriment.
What is necessary is only that the promisees should have altered his position in reliance on the promise.
This position was implied accepted by Denning, J., in the High Trees ' case when the learned Judge pointed out that the promise must be one "which was intended to create legal relations and which, to the knowledge of the person making the promise, was going to be acted on by the person to whom it was made and which was in fact acted an" (emphasis supplied).
If a promise is "acted on", "such action, in law as in physics, must necessarily result in an alteration of position.
" This was again reiterated by Lord Denning in W.J. Alan & Co. Ltd. x. El.
Nasr Export and Import Co.(1) where the learned Law Lord made it clear that alteration of position "only means that he (the promise) must have been led to act differently from what he would otherwise have done.
And if you study the cases in which the doctrine has been applied, you will see that all that is required is that the one should have acted on the belief induced by the other party." Viscount Simonds also observed in Tool Metal Manufacturing Co. Ltd vs Tungsten Electric Co. Ltd. (2) that "the gist of the equity lies in the fact that one party has by his conduct led the other to alter his position".
The judgment of Lord Tucker in the same case would be found to depend likewise on a fundamental finding of alteration of position, and the same may be said of that of Lord Coheb.
Then again in Emmanuel Avodeji vs Briscoe (supra) Lord Hodson said: "This equity,is however, subject to the qualification (1) that the other party has altered his position".
The same requirement was also emphasised by Lord Diplock in Kaminins Ballrooms Ltd. vs Zenith Investments (Torquay) Ltd. (3) What is necessary, therefore, is no more than that there should be alteration of position on the part of the promisee.
The alteration of position need not involve any detriment to the promises.
If detriment were a necessary element, there would be no need for the doctrine of promissory estoppel because in that event, in quite a few cases, the detriment would form the consideration and the promise could be binding as a contract.
There is in fact not a single case in England where detriment is insisted upon as a necessary ingredient 695 of promissory estoppel.
In fact, in W. J. Alan & Co. Ltd. vs El Nasar Export and Import Co. (supra), Lord Denning expressly rejected detriment as an essential ingredient of promissory estoppel, saying: "A seller may accept a less sum for his goods than the contracted price, thus inducing (his buyer) to believe that he will not enforce payment of the balance; see Central London Property Trust Ltd. vs High Trees House Ltd. and D. & C. Builders Ltd. vs Rees In none of these cases does the party who acts on the belief suffer any detriment.
It is not a detriment, but a benefit to him to have an extension of time or to pay less, or as the case may be.
Nevertheless, he has conducted his affairs on the basis that he has had that benefit and it would not be equitable now to deprive him of it.
" We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promise to show that he suffered detriment as a result of acting in reliance on the promise.
But we may make it clear that if by detriment we mean injustice to the promisee which could result if the promisor were to recede from his promise then detriment would certainly come in as a necessary ingredient.
The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise.
The classic exposition of detriment in this sense is to be found in the following passage from the judgment of Dixon, J in the Australian case of Grundt vs The Great Boulder Pty.
Gold Mines Ltd. (1): " It is often said simply that the party asserting the estoppel must have been induced to act to his detriment.
Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine.
That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting.
This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it.
So long as the assumption is adhered to, the party who altered his situation upon the 696 faith of it cannot complain.
His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment.
His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act or source of prejudice.
" If this is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel because it is on account of such detriment which the promisee would suffer if the promisor were to act differently from his promise, that the Court would consider it inequitable to allow the promisor to go back upon his promise.
It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to show that the promisee has acting in reliance of the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment.
Here, the appellant clearly altered its position by borrowing moneys from various financial institutions, purchasing plant and machinery from M/s. De Smet (India) Pvt. Ltd., Bombay and setting up a vanaspati plant, in the belief induced by the representation of the Government that sales tax exemption would be granted for a period of three years from the date of commencement of the production.
The Government was, therefore bound on the principle of promissory estoppel to make good the representation made by it.
Of course, it may be pointed out that if the U.P. Sales Tax Act, 1948 did not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government because the Government cannot be compelled to act contrary to the statute, but since section 4 of the U.P.Sales Tax Act, 1948 confers power on the Government to grant exemption from sales tax, the Government can legitimately be held bound by its promise to exempt the appellant from payment of sales tax.
It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government so far as the doctrine of promissory estoppel is concerned.
Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the 697 essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it.
We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant.
Now, for the assessment year 1970 71, that is, 2nd July, 1970 to 31st March, 1971, the appellant collected from its customers sales tax amounting to Rs. 6,81,178.95 calculated at the rate of 3 1/2% on the sale price.
But when the assessment was made by the Sales Tax Authorities, sales tax was levied on the appellant at the rate of 7% and the appellant was required to pay up a further sum of Rs. 6,80,969.42.
The appellant had prayed for an interim order in the present appeal staying further proceedings, but this Court, by an order dated 3rd April, 1974, granted interim stay only on the appellant paying up the amount of sales tax due for the assessment year 1970 71 before 31st July, 1974 and so far as the assessment years 1971 72, 1972 73 and 1973 74 were concerned, the Court directed that the assessments for those years may proceed, but only the final order shall not be passed.
The result was that the appellant had to pay up the further sum of Rs. 6,80,949.42 for the assessment year 1970 71.
The appellant collected from the customers for the assessment year 1971 72 an aggregate sum of Rs. 9,91,206.17 by way of sales tax at the rate of 3 1/2% for the period 1st April, 1971 to 1st July, 1971, 4% for the period 2nd July, 1971 to 24th January, 1972 and 7% for the period 25th January, 1972 to 31st March, 1972 and deposited this amount in the Treasury.
Similarly, for the assessment year 1972 73, the appellant collected from its customers an aggregate sum of Rs. 19,36,597.23 as and by way of sales tax at the rate of 7% of the sale price and this amount was deposited by the appellant in the Treasury, and so also for the first quarter of the assessment year 1973 74 upto the end of which the exemption from sales tax was to continue, the appellant collected and paid an aggregate sum of Rs. 4,84,884.05 at the rate of 7% of the sale price.
It appears that surcharge amounting to Rs. 2,83,008.09 for the period of the exemption was also paid by the appellant into the Treasury.
The assessments for the assessment years 1971 72, 1972 73 and 1973 74 were, however, not completed in view of the stay order granted by this Court.
Now, obviously since the Government is bound to exempt the appellant from payment of sales tax for a period of three years from 2nd July, 1970, being the date of commencement of the production, the appellant would not be liable to 698 pay any sales tax to the State in respect of sales of vanaspati effected during that period and hence the State would have to refund to the appellant the amount of sales tax paid for the period 2nd July, 1970 to 31st March, 1971, subject to any claim which the State may have to retain any part of such amount under any provision of law.
If the State has any such claim, it must be intimated to the appellant within one month from today and it must be adjudicated upon within a further period of one month after giving proper opportunity to be heard to the appellant.
If no such claim is made, or, if made, not adjudicated upon within the time specified, the State will refund the amount of sales tax to the appellant with interest thereon at the rate of 6% per annum from the date when such refund becomes due and if such claim is made and adjudicated upon within the specified time and it is found that a part of this amount is liable to be retained by the State under some provision of law, the State will refund the balance to the appellant with interest at the like rate.
So far as the assessment years 1971 72, 1972 73 and 1973 74 are concerned, the Sales Tax Authorities will proceed to complete the Assessments for those assessment years in the light of the law laid down in this judgment and the amounts of sales tax deposited by the appellant will be refunded to the appellant to the extent to which they are not found due and payable as a result of the assessments, subject to any claim which the State may have to retain those amounts under any provision of law.
We accordingly allow the appeal, set aside the judgment of the High Court and issue a writ, order or direction to the above effect against the respondents.
The State will pay the costs of the appellant throughout.
S.R. Appeal allowed.
| To provide for the better administration and supervision of Wakfs, the Wakfs Act 1954, sought to bring the management of wakfs under the supervision of the State.
The Act envisages the appointment of a Commissioner of Wakfs for the purpose of survey of wakf properties existing at the time of the commencement of the Act.
The Commissioner is enjoined to submit his report to the State Government after making such enquiries as he may consider necessary.
While making enquiries the Commissioner is invested with powers as are vested in a Civil Court under the Code of Civil Procedure.
Section 6 of the Act provides that if any question arises as to whether a particular property specified in the list of wakfs published under section 5(2) was wakf property or not and such other related matters, the Board of Muslim Wakfs or the Mutawalli of the wakf or any person interested therein may institute a suit in a Civil Court for decision of the question.
Respondents 1 and 2 were mortgagee purchasers of the property in dispute, which was claimed to be wakf property.
Respondent.
No. 3 in his application to the Commissioner of Wakfs alleged that the property in dispute being wakf property its transfer by the mutawalli to the respondents was invalid and prayed that the property be taken over by the wakf committee.
While denying that the property in dispute was wakf property respondents 1 and 2 contended before the Commissioner that he had no jurisdiction to make an enquiry whether a particular property was wakf property or not.
The Commissioner rejected these contentions and submitted a report to the State Government.
On receipt of the Commissioner 's report the Board of Muslim Wakfs included the property in the list of wakfs in the Stat.
In the respondents ' Writ Petition, the High Court held (i) that the jurisdiction of the Board of Wakfs was confined to matters of administration of the wakfs and not to adjudication of questions of title and that the Act did not invest either the Board or the Commissioner with power to decide the question whether a property belonged to a wakf or not and therefore the Commissioner had no jurisdiction under section 4(3) of the Act to enquire whether or not the property was wakf property and (ii) that the failure of a stranger to the wakf to institute a suit in a court of competent jurisdiction within a period of one year on the question whether a particular property was wakf property or not could not make the inclusion of such property in the list of wakfs final and conclusive.
149 In appeal to this Court it was contended on behalf of the appellants that (i) the words "for the purpose of making a survey of wakf properties" are wide enough to confer power on the Commissioner to investigate and adjudicate upon the question whether a particular property was or was not wakf property and (ii) failure of the respondents to file a suit within the time allowed by s, 6(1) made the inclusion of the property in the list of wakfs final and conclusive.
The word "therein" occurring in "any person interested therein" in section 6 ( 1 ) qualifies the words "wakf property" and not "person interested in the wakfs" as wrongly assumed by the High Court.
Dismissing the appeal to this Court ^ HELD: While the High Court was right in determining the scope of section 6(1), it was clearly in error in curtailing the ambit and scope of enquiry by the Commissioner under section 4(3 ) .
[160 E] 1.
(a) The Commissioner of wakfs acted within his jurisdiction in holding the disputed property to be wakf property.
[168 C] (b) The whole purpose of the survey of the wakfs by the Commissioner under section 4(1) is to inform the Board of Wakfs as to existence of the wakfs in the State in order that all such wakfs should be brought under the supervision and control of the Board.
[160 D] (c) The words "for the purpose of making a survey" are the key to the construction of the section.
If the Commissioner has the power to make a survey it is but implicit that in the exercise of such power he should enquire whether or not a wakf exists.
The making of such an enquiry is a necessary concomitant of the power to survey.
The High Court was, therefore, wrong in holding to the contrary.
[162 A Bl (d) It would be illogical to hold that while making a survey of wakf properties existing in the State the Commissioner of wakfs should have no power to enquire whether a particular property was wakf property or not.
After making the survey the Commissioner is required to submit a report to the State Government in regard to the several matters referred to in clauses (a) to (f) thereof.
There may be a dispute as between the Board, the mutawalli or a person interested in the wakf, as regards the existence of wakf i.e. whether a particular property is wakf property, whether it is a Shia wakf or a Sunni wakf, the extent of the property attached to the wakf, the nature and object of the wakf and so on.
While making such an enquiry, the Commissioner is invested with the powers vested in a Civil Court under the Code of Civil Procedure, 1908.
In view of the comprehensive provisions contained in the Act the enquiry which the Commissioner makes is not purely of an administrative nature but partakes of a quasi judicial character in respect of persons falling within the scope of section 6(1).
[161 F; C E] (e) The power of the Commissioner to survey wakf properties or to enquire and investigate into the several matters set out in sub section (3) cannot be curtailed by taking recourse to section 4(S).
Sub section (S) only lays down that, if during an enquiry any dispute arises as to whether a particular wakf is a Shia wakf or Sunni wakf and if there are clear indications in the deed of wakf as to its nature, the dispute shall be decided on the basis of 150 such deed.
It, therefore, makes the wakf deed conclusive as to the nature of the wakf Sub section (5) cannot be projected into sub section (1) determining the question whether a certain property is a wakf property or not.
Nor does it enter into an enquiry as to several of the matters adverted to in some of the clauses of sub section (3).
[162 D E] (f) Moreover section 6 and section 6(1) clearly envisage that the enquiry by the Commissioner was not confined to the question as to whether a particular wakf was a Shia Wakf or Sunni Wakf.
It might also embrace a dispute is to whether a wakf existed or not.
[162 H] 2.
(a) Where a stranger is a non Muslim and is in possession of certain property, his right.
title and interest therein cannot be put in jeopardy merely because the property is included in the list of wakfs.
Such a person is not required to file a suit for a declaration of his title within a period of one year.
The special rule of limitation laid down in proviso to section 6(1) is not applicable to him.
In other words, the list published by the Board of Wakfs under section 5(2) can be challenged by him by filing a suit for declaration of title even after the expiry of the period of one year, if the necessity of filing such suit arises.
h 167 A B] (b) The word "therein" occurring in section 6(1) after the words "any person interested therein" must necessarily refer to the "Wakf" which immediately precedes it.
It cannot refer to the wakf property.
Section 6 ( 1 ) enumerates the persons who can file suits and also the questions in respect of which such suits can be filed.
In enumerating the persons who are empowered to file suits under this provision only the Board, the mutawalli of the Wakf; and "any person interested therein", thereby necessarily meaning any person interested in the wakfs, are listed.
Its provisions empower only those who are interested in the wakfs to institute suits.
[164 E Fl Sirajul Hag Khan & Ors.
vs The Sunni Central Board of Wakf, U.P. Ors., , referred to.
(c) The word "therein" in section 6(1) must mean "any person interested in a wakf" as defined in section 3(h).
The object of the section is to narrow down the dispute between the Board of Wakfs, the Mutawalli and the person interested in the wakf as defined in section 3(h).
[165 H] (d) The right of the respondents 1 and 2 in respect of the disputed property, if at all they have any, will remain unaffected by the impugned Notification.
They are at liberty to bring a Suit for the establishment of their right and title, if any, to the property.
[168 E]
|
Civil Appeal No. 4742 43 of 1984.
a Appeal by Special leave from the Judgment and order dated the 9th August, 1984 of the Calcutta High Court in FMAT No. 2139 of 1984 and 2023 of 1984.
K. Parasaran, Attorney General, V. J. Francis, Chandrasekharan, N.M. Popli and Miss Savitha Sharma for the Appellant.
F. section Nariman, D. N. Gupta and Harish Salve for the Respondent.
The Judgment of the Court was delivered by CHlNNAPPA REDDY, J.
It is indeed a great pity and, we wish we did not have to say it but we are afraid;we will be signally failing in our duty if we do not do so some courts, of late, appear to have developed an unwarranted tendency to grant interim orders interim orders with a great potential for public mischief for the mere asking.
We feel greatly disturbed.
We find it more distressing that such interim orders, often ex parte and non speaking, are made even by the High Courts while entertaining writ petitions under article 226 of the Constitution, and in the Calcutta High Court, on oral application too.
Recently in Samaries Trading Company Pvt. Ltd. vs section Samuel & Ors(l).
we had occasion to condemn and prohibit this practice of entertaining oral applications under article 226 and passing interim orders thereon.
In several other cases, Siliguri Municipality vs Amelendu Das(2), Titagur Paper Mills Co. Ltd. State of Orissa,(3) Union (1) ; (2) (3) 193 Of India vs Oswal Woollen Mills Ltd(l).
, Union of India vs Jain Shubh A Vanaspati Ltd.(a), this Court was forced to point out how wrong it was to make interim orders so soon as an application was but presented, when a second thought (or a second 's thought) would expose the impairment of the public interest and often enough the existence of a suitable alternative remedy.
Despite the fact that we have set our 8 face against interfering with interim orders passed by the High Courts and made it practically a rigid rule not to so interfere, we were constrained to interfere in those cases.
In Siliguri Municipality vs Amalendu Das, (supra) A. P. Sen and M. P. Thakkar, JJ. had to deal with an interlocutory order passed by the Calcutta High Court restraining the Siliguri Municipality from recovering a graduated consolidate rate on the annual value of buildings in terms of the amended provisions of the Bengal Municipal Act.
We reiterate the following observations made therein: "We are constrained to make the observations which follows as we do feel dismayed at the tendency on the part of some of the High Courts to grant interlocutory orders for the mere asking.
Normally, the High Court should not, as a rule, in proceedings under Article 226 of the Constitution grant any stay of recovery of tax save under very exceptional circumstances.
The grant to stay in such matters, should be an exception and not a rule.
"It is needless to stress that a levy or impost does not become bad as soon as a writ petition is instituted in order to assail the validity of the levy.
So also there is no warrant for presuming the levy to be bad at the very threshold of the proceedings.
The only consideration at that juncture is to ensure that no prejudice is occasioned to the rate payers in case they ultimately succeed at the conclusion of the proceedings.
This object can be attained by requiring the body or authority levying the impost to give an undertaking to refund or adjust against future dues, the levy of tax or rate or a part thereof, as the case may be, in the event of the entire levy or a part thereof being ultimately held (l) t (2) C, A. No. 11420 of 1983 194 to be invalid by the court without obliging the tax payers to institute a civil suit in order to claim the amount already recovered from them.
On the other hand, the Court cannot be unmindful of the need to protect the authority levying the tax, for, at that stage the Court has to proceed on the hypothesis that the challenge may or may not succeed.
The Court has to show awareness of the fact that in a case like the present a municipality cannot function or meet its financial obligations if its source of revenue is blocked by an interim order restraining the municipality from recovering the taxes as per the impugned provision.
And that the municipality has to maintain essential civic services like water supply, street lighting and public streets etc., apart from cunning public institutions like schools, dispensaries, libraries etc.
What is more, supplies have to be purchased and salaries have to paid.
The grant of an interlocutory order of This nature would paralyze the administration and dislocate the entire working of the municipality.
It seems that these serious ramifications of the matter were lost sight of while making the impugned order".
In Titaghur Paper Mills Co. Ltd. vs S/ate of Orissa A. P. Sen E. section Venkataramiah and R. B. Misra, JJ.
held that where the statute itself provided the petitioners with an efficacious alternative remedy by way of an appeal to the Prescribed Authority, a second appeal to the Tribunal and there after to have the case stated to the High Court, it was not for the High Court to exercise its extra ordinary jurisdiction under article 226 of the Constitution ignoring as it were, the complete statuary machinery.
That it has become necessary, even now, to as to repeat this admonition is indeed a matter of tragic concern to us.
Article 226 is not meant to short circuit of circumvent statutory procedures.
It is only were statutory remedies are entirely ill suited to meet the demands of extraordinary situations, as for instance where the very vires of thee statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to article 226 of the Constitution.
But then the Court must have good and sufficient reason to by pass the alternative remedy provided by statute.
Surely matters involving the revenue where statutory remedies are available are not such matters.
We can also take judicial notice of the fact that the vast 195 majority of the petitions under article 226 o the Constitution are filed .
solely for the purpose of obtaining interim orders and there after prolong the proceedings by one device or the other.
The practice certainly needs to be strongly couraged.
In Union of India vs Oswal Woollen Mills Ltd., we had occasion to consider an interim order passed by the Calcutta High Court in regard to a matter no part of the cause of action relating to which appeared to arise within the jurisdiction of the Calcutta High Court.
In that case the interim order practically granted the very prayers in the writ petition.
We were forced to observe, "It is obvious that the interim order is of a drastic character with a great potential for mischief.
The principal prayer in the writ petition is the challenge to the order made or proposed to be made under Clause 8 of the Import Control order.
The interim order in terms of prayers (j) and (k) has the effect of practically allowing the writ petition at the stage of admission without hearing the opposite parties.
While we do not wish to say that a drastic interim order may never be passed without hearing the opposite parties even if the circumstances justify it, we are very firmly of the opinion that a statutory order such as the one made in the present case under Clause 8 B of the Import Control order ought not to have been stayed without at least hearing those that made the order.
Such a stay may lead to devastating consequences leaving no way of undoing the mischief.
Where a plentitude of power is given under a statute, designed to meet a dire situation, it is no answer to say that the very nature of the power and the consequences which may ensue is itself a sufficient justification for the grant of a stay of that order, unless, of course, there are sufficient circumstances to justify a strong Prima facie inference that the order was made in abuse of the power conferred by the statute.
A statutory order such as the one under Clause 8 B purports to be made in the public interest and unless there are even stronger grounds of public interest an expert interim order will not be justified.
The only appropriate order to make in such cases is to issue notice to the respondent and make it returnable within a short period.
This should particularly be so where the offices of the principals respondents and relevant records 196 lie outside the ordinary jurisdiction of the court.
To grant interim relief straightaway and leave it to the respondents to move the court to vacate the interim order may jeopardise the public interest.
It is notorious how if an interim order is once made by a court, parties employ every device and tactic to ward off the final hearing of the application.
It is, therefore, necessary for the courts to be circumspect in the matter of granting interim relief, more particularly so where the interim relief is directed against orders or actions of public officials acting in discharge of their public duty and in exercise of statutory powers.
On the facts and circumstance of the present case, we are satisfied that no interim relief should have been granted by the High Court in the terms in which it was done", We repeat and deprecate the practice of granting interim order which practically give the principal relief sought in the petition for no better reason than that a prima facie case has been made out, without being concerned about the balance of convenience, the public interest and a host of other relevant considerations.
Regarding the practice of some clever litigants of resorting to filing writ petitions in the far away courts having doubtful jurisdiction, we had this to observe: ". .
Having regard to the fact that the registered office of the Company is at Ludhiana and the principal respondents against whom the primary relief is sought are at New Delhi, one would have expected the writ petition to be filed either in the High Court of Punjab and Haryana or p in the Delhi High Court.
The writ petitioners however, have chosen the Calcutta High Court as the forum perhaps because one of the interlocutory reliefs which is sought is in respect of a consignment of beef tallow which has arrived at the Calcutta Port.
An inevitable result of the filing of writ petitions elsewhere than at the place where the concerned offices and the relevant records are located is to delay prompt return and contest.
We do not desire to probe further into the question whether the writ petition was filed by design or accident in the Calcutta High Court when the office of the Company is in the State of Punjab and all the principal respondents are in Delhi.
But we do feel disturbed that such writ petitions are of ten deliberately 197 filed in distant High Courts, as part of a manoeuvre in a A legal battle, so as to render it difficult for the officials at Delhi to move applications to vacate stay where it becomes necessary to file such applications".
In Union of India vs Jain Shudha Banaspati Ltd. (supra), Chandrachud, CJ., A. P. Sen, R. N. Misra, JJ. allowed an appeal against an interim order making the following observations: "After hearing learned counsel for the rival parties, we are of the opinion that the interim order passed by the High Court on November 29, 1983 is not warranted since it virtually grants to the respondents a substantial part of the relief claimed by them in their writ petition.
Accordingly, we set aside the said order".
We have come across cases where the collection of public revenue has been seriously jeopardised and budgets of Governments and Local Authorities affirmatively prejudiced to the point of precariousness consequent upon interim orders made by courts.
In fact instances have come to our knowledge where Governments have been forced to explore further sources for raising revenue, sources which they would rather well leave alone in the public interest, because of the stays granted by courts.
We have come across cases where an entire Service is left in a stay of flutter and unrest because of interim orders passed by courts, leaving the work they are supposed to do in a state of suspended animation.
We have come across cases where buses and lorries are being run under orders of court though they were either denied permits or their permits had been canceled or suspended by Transport Authorities.
We have come across cases where liquor shops are being run under interim orders of court.
We have come across cases where the collection of monthly rentals payable by Excise Contractors has been stayed with the result that at the and of the year the contractor has paid nothing but made his profits from the shop and walked out.
We have come across cases where dealers in food grains and essential commodities have been allowed to take back the stocks seized from them as if to permit them to continue to indulge in the very practices which were to be prevented by the seizure.
We have come across cases where land reform and important welfare legislations have been stayed by courts.
Incalculable harm has been done by such interim orders.
All this is not to say that interim orders may never be 198 made against public authorities.
There are, of course, cases which demand that interim orders should be made in the interests of justice.
Where gross violations of the law and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of the court to intervene and give appropriate interim relief.
In cases where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizen 's faith in the impartiality of public administration, a Court may well be justified in granting interim relief against public authority.
But since the law presumes that public authorities function properly and bonafide with due regard to the public interest, a court must be circumspect in granting interim orders of far reaching dimensions or orders causing administrative, burdensome inconvenience or orders preventing collection of public revenue for no better reason than that the parties have come to the Court alleging prejudice, inconvenience or harm and that a prima facie case has been shown.
There can be and there are no hard and fast rules.
But prudence, discretion and circumspection are called for.
There are several other vital considerations apart from the existence of a prima facia case.
There is the question of balance of convenience.
There is the question of irreparable injury.
There is the question of the public interest There are many such factors worthy of consideration.
We often wonder why in the case indirect taxation where the burden has already been passed on to the consumer, any interim relief should at all be given to the manufacturer, dealer and the like ! There is just one more thing that we wish to say.
In Siliguri vs Amalendu Das, the Court was put to the necessity of pointing out the following: "We will be failing in our duty if we do not advert to feature which causes us dismay and distress.
On a previous occasion, a Division Bench had vacated an interim order passed by a learned single Judge on similar facts in a similar situation.
Even so when a similar matter giving rise to the present appeal came up again, the same learned judge whose order had been reversed earlier, granted a non speaking interlocutory order of the aforesaid nature.
This order was in turn confirmed by a Division Bench without a speaking order articulating reasons for granting a stay when the earlier Bench had vacated the stay.
We 199 mean no disrespect to the High Court in emphasizing the necessity for self imposed discipline in such matters in obeisance to such weighty institutional considerations like the need to maintain decorum and comity.
So also we mean no disrespect to the High Court in stressing the need for self discipline on the part of the High Court in passing interim orders without entering into the question of amplitude and width of the powers of the High Court to grant interim relief.
The main purpose of passing an interim order is to evolve a workable formula or a workable arrangement to the extent called for by the demands of the situation keeping in mind the presumption regarding the constitutionality of the legislation and the vulnerability of the challenge, only in order that no irreparable injury is occasioned.
The Court has therefore to strike a delicate balance after considering the pros and cons of the matter lest larger public interest is not jeopardized and institutional embarrassment is eschewed".
We desire to add and as was said in Cassel and Co. Ltd. vs Broome(l) we hope it will never be necessary for us to say so again that 'in the hierarchical system of Courts ' which exists in our country, 'it is necessary for each lower tier ', including the High Court, 'to accept loyally the decisions of the higher tiers '.
"It is inevitable in a hierarchical system of Courts that there are decisions 11 of the Supreme appellate tribunal which do not attract the unanimous approval of all members of the judiciary. . .
But the judicial system only works if someone is allowed to have the last word and that last word, once spoken, is loyally accepted"(2).
The better wisdom of the Court below must yield to the higher wisdom of the Court above.
That is the strength of the hierarchical judicial system.
In Cassel vs Broome, commenting on the Court of Appeal 's comment that Rookes vs Barnard(3) was rendered per incuriam Lord Diplock observed, "The Court of Appeal found themselves able to disregard the decision of this House in Rookes vs Barnard by applying to it the label per incuriam That label is relevant only to the right of an appellate court to decline to (1) ; (2) (See observations of Lord Hailsham and Lord Dipock in Broome vs Cassell).
(3) [1984] A.C. 1129.
200 follow one of its own previous decisions, not to its right to disregard a decision of a higher appellate court or to the right of a judge of the High Court to disregard a decision of the Court of Appeal.
" It is needless to add that in India under Act.
141 of the Constitution the law declared by the Supreme Court shall be binding on all courts within the territory of India and under article 144 all authorities, civil and judicial in the territory of India shall act in aid of the Supreme Court.
Now coming to the facts of the present case, the respondent, Dunlop India Limited is a manufacturer of types, tubes and various other rubber products.
By a notification dated April 6, 1984 issued by the Government of India, Ministry of Finance (Department of Revenue) in exercise of the powers conferred by Rule 8 (1) of the Central Excise Rules, 1944, types, falling under item No. 16 of the First Schedule to the Central Excise and Salt Act, 1944, were exempt from a certain percentage of excise duty to the extent that the manufacturers had not availed themselves of the exemption granted under certain other earlier notifications The Department was of the view that the Company was not entitled to the exemption as it had cleared the goods earlier without paying central excise duty, but on furnishing Bank Guarantees under various interim orders of courts.
The Company claimed the benefit of the exemption to the tune of Rs. 6.05 crores and filed a writ petition in the Calcutta High Court and sought an interim order restraining the central excise authorities from the levy and collection of excise duty.
The learned single judge took the view that a prima facie case had been made out in favour of the Company and by an interim order allowed the benefit of the exemption to the tune of Rs. two crores ninety three lakhs and eighty five thousand for which amount the company was directed to furnish a Bank Guarantee, that is to say, the goods were directed to be released on the Bank Guarantee being furnished.
An appeal was preferred by the Assistant Collector of Central Excise under clause 10 of the Letters Patent and a Division Bench of the Calcutta High Court confirmed the order of the learned single Judge, but made a slight modification in that the Collector of Central Excise was given the liberty to encash 30% of the Bank Guarantee.
The Assistant Collector of Central Excise has preferred this appeal by special leaue.
By our interim order dated November 15, 1984, we vacated the orders granted by the learned single Judge 201 as well as by the Division Bench.
We gave two weeks ' time to the A respondent Company to file a counter No. counter has, however been filed.
Shri F.S. Nariman, learned counsel, however appeared for the respondent.
We do not have the slightest doubt that the orders of the learned single judge as well as Division Bench are wholly unsustainable and should never been made.
Even assuming that the company had established a prima facie case, about which we do not express any opinion, we do not think that it was sufficient justification for granting the interim orders as was done by High Court.
There was no question of any balance of convenience being in favour of the respondent Company.
The balance of convenience was certainly in favour of the Government of India.
Governments are not run on mere Bank Guarantees.
We notice that very often some courts act as if furnishing a Bank Guarantee would meet the ends of justice.
No governmental business or for that matter no business of any kind can be run on mere Bank Guarantees.
Liquid cash is necessary for the running of a Government as indeed any other enterprise.
We consider that where matters of public revenue are concerned, it is of utmost importance to reales that interim orders ought not to be granted merely because a prima facie case has been shown.
More is required.
The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest.
We are very sorry to remark that these considerations have not been borne in mind by the High Court and interim order of this magnitude had been granted for the mere asking.
The appeal is allowed with costs.
E N.V.K. Appeal allowed.
| Md. Safiur Rehman was a dock worker and gratuity was payable to him under one of the three prevailing schemes of the Calcutta Dock Labour Board.
Respondent No. I filed a suit before, the Court of Small Causes at Calcutta asking for recovery of a sum of money against the widow and son of the said Md. Safiur Rehman after his death and prayed for attachment of the gratuity payable to the said workman.
The Court made an order and called upon the Board to withhold payment of the amount, whereupon the Board pointed out to Court that gratuity was not liable to attachment.
The Chief Judge of the Court of Small Causes examined the objection against attachment and overruled the same.
In appeal by the appellants a Division Bench of the High Court examined the provisions under the Payment of Gratuity Act and the Code of Civil Procedure, and holding (a) clause (g) of section 6 of the Civil Procedure Code does not cover the gratuity payable by the Board to a registered dock worker since subsequent amendment of this clause have not been adopted and made applicable by the High Court to Presidency Small Causes Court; and (b) Rule 9 of the Gratuity Rules which purports to exempt gratuity from attachment, not having been made by the Central Government on powers delegated by the Parliament under the Dock workers (Regulation of Employment) Act, but by the Board on sub delegation of Dowers under the scheme cannot override the legal right of the plaintiff, and dismissed the appeal.
Hence the appeal by special leave.
Allowing the appeal, the Court, 827 ^ HELD: 1.
The preamble of the clearly indicates the legislative intention that the Act sought to provide a scheme for payment of gratuity to all employees engaged in, inter alia port and under this Act gratuity was payable to workers like Md. Safiur Rehman.
In view of The provisions in section I (3) of the Act gratuity must be taken to be covered by section 4 of the Act, in the absence of any notification contemplated under section 5.
Section 14 has also overriding effect and section 13 gives total immunity to gratuity from attachment.
The gratuity which was payable to him squaredy came within the purview of the Act and, therefore, became entitled to immunity under section 18 thereof.
[830D E] 2.
The immunity under section 13 of the , itself being adequate the Court applied non liquet on the two issues, namely, (a) consideration of the subsequent event of the amendment of section 13 of the Gratuity Act by Central Act 25 of 1984 with effect from July 1st, 1914; and (b) the necessity for remaking of the Calcutta High Court 's earlier order under section 8 of the Civil Procedure Code extending the provisions of section 60 of the Code to the Small Causes Court consequent to section 97 of the Amending Act of 1976.
[830H; 831A B]
|
Civil Appeal No. 208 of 1973.
From the Judgment and order dated the 25th September, 1973 of the Patna High Court in Election Petition No. 4 of 1972.
K. K. Prasad, K. K. Sinha and section K. Sinha for the appellant.
K. P. Varma, D. P. Mukherjee and D. Goburdhan for respondent No. 1.
U. section Prasad for respondent No. 3.
The Judgment of the Court was delivered by SARKARIA, J.
Election from 168 Katoria Bihar Legislative Assembly Constituency took place in March, 1972.
The poll was held on March 11, 1972 and the votes were counted on March 12, 1972.
Respondent No. 1 herein, an independent candidate, % as declared elected having secured 16649 votes as against 16074 polled by the appellant, a nominee of Indian National Congress (R).
There were three other candidates (Respondents 2 to 4) who secured 2347, 8001 & 1542 votes respectively.
The votes rejected as invalid, were 1219.
On April 14, 1972, the appellant filed an election petition under the Representation of the People Act, 1951 challenging the election of the returned candidate on the ground that several irregularities and illegalities were committed in the counting of votes.
The petition was resisted by the returned candidate.
The High Court framed issues, recorded the evidence produced by the parties 23 and held that the allegations had not been substantiated.
It declined the request for a recount and dismissed the petition.
Hence this appeal by the petitioner.
Mr. Prasad, learned Counsel for the appellant contends that the following irregularities/illegalities in the counting had been established : (1) Four unauthorised persons, viz., Ajudhya Prasad Singh, Q. M. Zaman, Parvez Ahmed and Radhey Sham Sah were allowed to work as Counting Supervisors at tables 4, 5, 7 and 9 in breach of the rules, and this had vitiated the counting.
(2) In the first round of counting at table No. 4 in the box relating to polling station No. 74, Madhopur U.P. School, 50 unsigned ballot papers were found in excess of those actually polled.
When this was detected and brought to the notice of the Assistant Returning officer, he, in violation of Rule 93(1) of the Conduct of Election Rules (for short, called the Rules) and to cover up the irregularity, opened that packet and inspected those unused ballot papers.
(3) The detailed result sheet which was inter alia prepared tablewise, in accordance with the instructions of the Election Commission, has been deliberately suppressed to prevent detection of mistakes and manipulations made in the counting.
(4) About 600 700 uncounted ballot papers in bundles were kept below his table by the Assistant Returning Officer.
In the final round of counting, despite protest, 600 votes were counted twice, in favour of Respondent No. 1.
That was why the petitioner who at the end of the third round was leading by a margin of 2205 votes, was shown having lost by 575 votes to Respondent No. 1, notwithstanding the fact that in the last round there were only 3800 ballot papers to be counted.
Before dealing with these contentions, we may recall, what this Court has repeatedly said, that an order for inspection and recount of the ballot papers cannot be made as a matter of course.
The reason is two fold.
Firstly such an order affects the secrecy of the ballot which under the law is not to be lightly disturbed.
Secondly, the Rules provide an elaborate procedure for counting of ballot papers.
This procedure contains so many statutory checks and effective safeguards against trickery mistakes and fraud in counting, that it can be called almost fool proof.
Although no, hard and fast rule can be laid down, yet the broad guidelines, as discernible from the decisions of this Court, may be indicated thus : The Court would be justified in ordering a recount of the ballot papers, only where : (1) the election petition contains an adequate statements of all the material facts on which the allegations of 24 irregularity or illegality in counting are founded; (2).
On the basis of evidence adduced such allegations are believing that there has been a mistake in counting prima facie established, affording a good ground for and (3) the Court trying the petition is prima facie satisfied that the making of such an order is imperatively necessary to decide the dispute and to do complete and effectual justice between the parties.
The contentions advanced in this case are to be tested in the light of these principles.
Since, on the whole, we agree with the findings and the conclusion of the court below, we will confine the discussion to the broad features of the case and the legal aspects of the contentions canvassed before 'US.
The first contention is that four unauthorised persons were allowed to act as Counting Supervisors at tables Nos. 4, 5, 7 and 9.
The argument proceeds that the list of all the persons who were appointed as Counting Supervisors/Counting Assistants, was summoned from the office of the District Election Officer, and in response thereto, the list exhibit 6, has been produced.
It is argued that since the names of Ajudhya Prasad Singh, Q. M. Zaman, Parez Ahmed and Radhey Sham Sah do not find mention in Exh. 6, they were never appointed to act a, , Counting Supervisors.
In this connection, reference has been made to the application filed on April 14, 1972, by the petitioner for summoning documents, the list exhibit 6, and the Check Memos (exhibit C/3, exhibit C/4, exhibit C/6 and exhibit C/8).
The Check Memos show that the aforesaid persons actually supervised the counting at tables Nos. 4, 5, 7 and 9.
It may be noted that there is not even an oblique hint in the election petition that any unauthorised person was allowed to act as Counting Supervisor or Counting Assistant.
Such an allegation was made for the first time in the application, dated 3 7 1973.
This application seeking a recount was made at the stage of final arguments, after the parties had closed their evidence.
It is true that in cross examination the Returning Officer and the Assistant Returning Officer were questioned by the Counsel for the petitioner with regard to the authorisation of these persons to act as Counting Supervisors.
But that could hardly constitute an adequate notice to the Respondent of this new plea which was sought to be smuggled into the case in a questionable manner at the belated stage.
The Respondent could be justified in assuming that the evidence on this plea which was not even faintly adumberated in the petition nor put in issue would not be looked into by the Court.
In any case at that stage the Respondent had no opportunity or right to produce evidence to show that apart from 'the list.
6, there was other record showing that the aforesaid persons were duly appointed by the Returning Officer to act as Counting SuperviSors.
25 Be that as it may, it has not been shown that these four persons who took part in the counting, were unauthorised persons.
It is not disputed that the are all Government officials.
The mere fact that their names do rot appear in Exh.
6 does not exclude the probability of their having been appointed and kept in reserve by a separate order or orders to act as Counting Supervisors in case of need.
That such appointments were made and a waiting list of such appointees in reserve was prepared, is clear from the answer that the Returning Officer (R.W. 14), Mr. Sinha, gave to a Court question "If an officer of this list did not turn up in time to participate in the counting then in his place another officer had to be appointed from the waiting list that was maintained in my office regarding this matter.
That waiting list contained the names of officers reserved whose services were to be utilised in case, any of the appointed officer did not turn up or % as subsequently exempted from working as such inside the counting hall.
" In reply to a further question put by the petitioner 's Counsel, the Returning Officer reiterated "There was a reserved list like this in my office regarding this matter which had been prepared under my orders." The fact that such a list of officials in reserve was prepared and exists receives further support from the evidence of R.W. 18 and R.W 19 who had worked as Counting Supervisors at tables Nos. 6 and 3.
respectively.
The petitioner appeared in the witness box as P.W. 19 on 7 5 1973.
Even then he did not make any allegation that any unauthorised persons had been admitted into the Counting Hall.
His Chief Counting Agent who appeared as P.W. 13, also did not allege anything of this kind.
The circumstances of this case fully attract the maximum omnia praesumuntur rite esee acta, and it would be presumed that the aforesaid four persons were rightly and regularly appointed and admitted into the Counting Hall to act as Counting Supervisors, by the Returning Officer.
On this score no violation of Rule 53 or any other statutory provision has been shown.
Now we turn to the second contention of Mr. Prasad.
The argument is that at the first round of counting in the box of Polling Station No. 74 (Madhopur), fifty unsigned ballot papers were found in excess of those polled.
This irregularity, it is submitted, was brought to the notice of the Returning Officer by Prof. Yadav, the Chief Counting Agent of the appellant, but to no avail.
Part I of exhibit 4 is the Ballot Paper Account sent by the Presiding Officer of Polling Station No. 74.
Its Part 11 contains the result of the initial counting of those ballot papers at table No. 4.
In Part 1, in column No. 2(a), the number of unused ballot papers is shown as 397, and in column 3, the number of ballot papers issued to voters is given as 323.
In Part 11, column 1, the total number of ballot papers found 26 in the ballot box used at the polling station, is entered as 373, and in column 2, captioned Discrepancy, if any etc. ', it is written "Found fifty excess including one ballot paper unsigned".
The entries in columns 1 and 2 of Part II purport to bear the signature of the Counting Supervisor, R. Shyam Sah who was not examined by either side.
It is common ground that when this discrepancy was brought to the notice of the Assistant Returning Officer and the Returning Officer, the sealed packet of the unused ballot papers was opened and the papers were counted.
The result of that count is to be found noted on the back of exhibit 4 by the Assistant Returning Officer, thus : "On verification by counting the actual number of unused ballot papers by opening the statutory packet in presence of the Returning Officer and the candidates,/agents, it was found that only 347 unused ?) ballot papers have been returned.
This settles the discrepancy in the ballot paper account.
" Under it is the endorsement of the Returning Officer to the effect "This was done by (A.R. O?) in my presence.
" The Assistant Returning Officer stated in the witness stand as R.W. 13, that in the Ballot paper Account, the total number of unused ballot papers was wrongly shown as 397, while it should have been 347, which was the actual number of ballot papers found in the packet.
Thus, the physical verification revealed that this apparent discrepancy did not actually exist.
The court below has accepted the genuineness of the endorsements of the Assistant Returning Officer (R.W. 13) and the Returning Officer (R.W. 14) on exhibit 4 and the evidence of those officers in preference to the, interested statements of the Counting Agent (P.W. 9) and the Chief Counting Agent (P.W. 13) of the petitioner.
It has also found that only one unused ballot paper was found unsigned, and not fifty.
We have no good reason to differ from those findings.
Indeed the main burden of the arguments of Mr. Prasad, is that the Assistant Returning Officer/Retarning Officer was not competent to open the packet of unused ballot papers and inspect the same as such a course was expressly forbidden by Rule 93 (1) of the Rules.
It is stressed that this illegality vitiating the counting, was itself a good ground for ordering a recount.
Rule 93 reads "Production and inspection of election papers. (1) While in the custody of the district election officer or, as the case may be, the returning officer (a) the packets of unused ballot papers with counterfoils attached thereto; (b) the packets of used ballot papers whether valid, tendered or rejected; 27 (c) the packets of the counterfoils of used ballot papers; (d) the packets of the marked copy of the electoral roll or, as the case may be, the list maintained under sub section (1) or sub section (2) of section 152; and (e) the packets of the declaration by electors and the attestation of their signature; shall not be opened and their contents shall not be inspected by, or produced before, any person or authority except under the order of a com petent court.
(2) Subject to such conditions and to the payment of such fee as the Election Commission may direct, (a) all other papers relating to the election shall be open to public inspection; and (b) copies thereof shall on application be furnished.
(3) Copies of the returns by the returning officer forwarded under rule 64, or as the case may be, under clause (b) of sub rule (1) of rule 84 shall be furnished by the returning officer, district election officer, chief electoral officer or the Election Commission on payment of a fee of two rupees for each copy.
For understanding the import and object of Rule 93, it would her appropriate to have a short and swift glance at the scheme of them Rules.
Part V of the Rules makes provision with regard to "Counting of Votes in Parliamentary and Assembly Constituencies.
" It cover&.
Rules 50 to 66.
Part VI relates to "Voting at Elections by Assembly Members and in Council Constituencies" '.
It includes Rules 67 to 70.
Part VII provides for "Counting of votes at Elections by Assembly Members or in Council Constituencies".
It contains Rules 71 to 85.
It will be, seen that Rule 93 has not been placed in any of the Parts relating to counting of votes.
It seems to have been advisedly placed ' in Part TX captioned "Miscellaneous", which in the serial order comes after the Parts dealing with voting and counting of votes.
Viewed in the light of the scheme of the Rules, and its setting, the language of Rule 93 seems to us clear enough to indicate that the custody of the District Election Officer or the Returning Officer spoken of in the Rule is a post election custody.
Such an indication is available in the words "unused ballot papers" which repeatedly occur in this rule.
The word "unused" in the context means that which "was made available for use in the election but remained unused in the election".
Sub rule (3) of the Rule enables the authorities mentioned therein to issue copies of the returns forwarded by the Returning Officer under Rule 64 or Rule 84(1) (b).
The supply of such copies will obviously be a post election function.
28 Any other interpretation of Rule 93 and its scope would make it difficult, if not altogether impossible, for the Returning Officer to perform the various functions and duties enjoined by the rules at the stage of counting.
This will be clear from a reference to the other Rules.
Take for instance Rule 56 which requires that the ballot papers shall first, be taken out from the boxes used in a constituency and mixed together and then arranged in convenient bundles and scrutinised.
Subrule (2) of Rule 56 further requires inter alia that if a ballot paper does not bear any mark at all or does not bear both the mark or the signature which it should have borne under the provisions of sub rule (1) of Rule 38, it shall be rejected by the Returning Officer.
To perform this duty it would be absolutely necessary for the Returning Officer to inspect such ballot papers.
Indeed, in the present case, in ,objection was raised that fifty unused ballot papers in the packet did not bear the mark or signature required by Rule 38(1).
The Returning Officer was therefore, fully competent to open the packet and inspect and count the ballot papers found therein.
Instruction 23 in the Hand Book issued by the Election Com mission, also indicates that R. 93(1) operates at a post election stage.
Under this instruction, the Returning Officer is required to seal the packets of all the papers relating to the election, specified in Clauses (a), (b), (c), (d) and (e) of R. 93(1) immediately after the counting of the votes is over, with his own seal and also with that of the Commission.
After the: sealing, the packets are to be put in a separate steel box which shall be locked with two locks and each lock shall be sealed.
Immediately after the declaration of the election results the sealed box is to be despatched to the District Election Officer who on receipt of the same shall forthright deposit it in safe custody in the Treasury under double lock.
The key of one of the locks is entrusted to the Treasury Officer.
In Union Territories such a deposit is to be made by the Returning officer.
The secret seals of the Commission are returned immediately after their required use.
Thus, it is clear that the custody contemplated by Rule 93(1) is the post election custody.
In the light of the above discussion, the conclusion is inescapable that the act of the Returning Officer in opening.
the packet, and in inspecting and counting the unused ballot papers found therein, far from amounting to an illegality, was necessary for the due performance of the duty enjoined on him by the Rules.
Accordingly, we overrule this contention.
It is urged that the detailed result sheet, prepared candidatewise, table wise and roundwise, from which figures mentioned in the final result sheet (Exh. 7) were extracted has been deliberately withheld to prevent detection of the hanky panky done in the counting.
Such a detailed result sheet, it is maintained, was required to be prepared and was admittedly prepared under instruction No. 17(q) in the Hand Book for Returning Officers (1970)" issued by the Election 'commission.
The contention appears to be attractive but does not stand a close examination.
29 Instruction 17(q) in the Hand Book runs thus "Side by side, the work of tabulating the result of counting shall be done.
The Check Memos duly signed by the Returning Officer shall be passed on to an officer seated at a separate table near the Returning Officer/Assistant Returning Officer.
This officer shall fill in the result of counting of each round of each table in Form 20.
It is desirable that a separate sheet for each round is used for the purpose.
Copies of Form 20 may be printed, cyclostyled or type written.
The entries in the form should be made on loose sheets prepared for the purpose.
A copy of Form 20 is at Annexure XIII.
" A perusal of Form 20 prescribed under rule 56(7) of the Rules would show that, it does not require that the final result sheet should be prepared tablewise, also.
It is sufficient if the final result sheet is candidate wise and round wise.
The final result sheet (Exh. 7) exactly conforms to the prescribed Form 20.
The Assistant Returning Officer (R.W. 13) in cross examination said : "On the above table where the entries used to be made in the result sheets from the check memos, those entries were made candidate wise, table wise and round wise.
The figures of total votes of the different rounds of counting, as mentioned in this abstract result sheet, Exh. 7, (the witness looks into it) were not directly taken from the figures as they found mention in the different check memos of the different tables of the different rounds of counting, but from these check memos the figures were first extracted on the detailed result sheet giving their numbers round wise, candidate wise and table wise and thereafter those figures were totalled round wise and extracted in this Exh. 7.
" From the statement of R.W. 13 extracted above, it would appear that at first a detailed result sheet in which figures were tabulated candidatewise, tablewise and roundwise was I prepared, and then, therefrom, all the figures, excepting.those showing table wise break up, were carried over to the final result sheet, Exh. 7, drawn up in the prescribed Form 20.
This detailed result sheet, though summoned, is not forthcoming from the District Election Officer might be, it hag been misplaced.
Might be, it was destroyed by the Counting Staff after the preparation of the final result sheet in the prescribed Form.
Whatever be the case, the absence of that document, does not make the checking and verification of the figures entered in the final result sheet, Exn. 7 impossible or even difficult.
Its preparation is not a requirement of any statutory provision.
It is prepared only as a matter of convenience in view of the instructions of the Election Commission, by carrying over, collating and totalling the figures from the Check Memos containing tablewise figures of each round of counting.
It is a sort of rough intermediary tabulation intended to facilitate the compilation of the final result sheet in the prescribed form.
The basic figures from which the final result sheet, whether detailed or abstracted, are worked out are 30 given in the Check Memos pertaining to the various counting tables.
,Such Check Memos are available and indeed reference to some of them namely, Exh. C/3, C/4, C/6 and C/8 was specifically made before us. 'The correctness or otherwise of the figures given in exhibit 7 could easily 'be verified by tallying the same with the aggregate of those given in the Check Memos.
Indeed, no argument has been advanced before us that the figures given in the final result sheet, exhibit 7, would not agree with the figures taken and totalled from the Check Memos.
We therefore, repel this contention.
This bring us to the last contention.
The argument advanced by Mr. Prasad is that during the fourth round of counting, 600 to 700 unused and uncounted ballot papers in bundles of 25 each were detected by the petitioner 's counting agent, Jagannath Sah, lying under the table of the Assistant Returning Officer.
Jagannath Sah protested.
The Assistant Returning Officer, however, put those uncounted ballot papers in the lot of counted votes.
P.W. 13 also, on coming to know about it, protested against that mixing.
In support of this contention, ,Counsel has.referred to the circumstance that at the end of the third round of counting, the appellant was leading by a margin of 2205 votes.
It is urged, this lead of 2205 votes could not thereafter be turned into a deficit of 575 votes when the total number of ballot papers that remained to be counted in the last round, was 3800 only.
Like the elusive cloud, this ground of objection, also, has been ever changing its hue and shape.
In the application 'Exh. 3, for a recount which was submitted by the petitioner to the Returning officer ,at 7 p.m. towards the close of.
the final round of counting all that was stated, was : "It is respectfully submitted that recounting of 168 Katoria Assembly Constituency be done.
Because one bundle of 600 votes have been recounted again.
All the votes be recounted.
" It was not alleged therein, even in an embryonic form that 600 uncounted votes in bundles were detected lying underneath the table of the Assistant Returning Officer.
Such an allegation, appeared for the first time in the election petition which was filed about 33 days after the election.
What was earlier said to have been 'counted twice over ', had now become completely 'uncounted '.
What was then alleged in exhibit 3 to have been counted on the table, has now gone underneath the table.
The original allegation in exhibit 3 (which was repeated in the second application, exhibit 3a, presented at 7 40 p.m.) was manifestly untenable.
because if there was double counting of any ballot papers, the total of the votes polled should have exceeded by the number doubly counted.
No such excess was reflected in the grand total of the final result sheet.
The total was correct.
The petitioner bad no explanation as to why the grand total of the final result sheet did not show an excess of 600 or any other number of ballot papers.
It was mainly for this reason, that the Returning Officer had rejected the applications of the petitioner for a recount.
That is why the petitioner has now come forward with a changed version, invented as an after thought.
31 The final result sheet, Exh. 7, falsifies his present contention also.
it shows that at the end of the third round, the appellant was leading by a margin of 424 votes only.
There is no good reason to doubt the authenticity of the figures given in Exh. 7.
As against it, the notes, exhibit 2 Series, on which the petitioner relies for his contention that at the end of the third round he was leading by 2205 votes, was a self serving and wholly unreliable piece of evidence.
These notes (Exh.
2 series) were not mentioned in the list of reliance filed along with the petition.
There is no reference to any such notes or their contents in the appli cations Exhs. 3 and 3a.
These notes are said to have been made by the Counting Agents of the petitioner at the time of counting.
But in the initial list submitted by the petitioner on 30 8 1972 for summoning among others his Counting Agents as witnesses, it was not mentioned that they would produce any such notes.
Subsequently on 28 3 1973 he moved the court requesting that these witnesses be required to bring their notes.
In these circumstances, the High Court was right in holding that these notes had been subsequently brought into existence for the purpose of this petition.
For the foregoing reasons, we are of the opinion that the appellant has been unable to make out a good case for a recount of the ballot papers.
We dismiss his appeal.
He shall pay the costs of Respondent No. J. V.M.K. Appeal dismissed.
| Respondents Nos. 1 and 2 were mother and daughter.
The deceased was the brother in law of respondent No. 1.
For some days before the date of the Occurrence, the relations between the two families were none too cordial.
On the clay of the occurrence there was a scuffle between the respondents and the deceased.
A little later, when the deceased was sitting in the house of his father in law in the opposite row of houses, respondent No. 1 was alleged to have gone to the deceased with a stick to beat him.
Some neighbours intervened and tried to pacify both the parties.
When the deceased was going out, respondent No. 1 put her leg across the legs of the deceased, as a result of which he fell down on his back.
Respondent No. 2 immediately caught hold of both the hands of the deceased and respondent No. 1 is stated to have squeezed his testicles and pulled them.
Eventually the deceased succumbed to the injury.
After the incident respondent No. 1 lodged a complaint before the police stating that the deceased, his wife and his mother in law caught hold of her and gave her blows and kicks with a stick as a result of Which she fell down.
Holding that the prosecution case was proved beyond reasonable doubt, the Sessions Judge convicted respondent No. 1 under section 304, Part I I.P.C. Respondent No. 2 was convicted under section 323 read with section 144, I.P.C. On appeal, the High Court, even after believing the main part of the occurrence, acquitted respondent No. 1 of the charges levelled against her and consequently respondent No. 2 also on the ground that she must have done so in exercise of her right of private defence inasmuch as she must have squeezed the testicles of the deceased when be was showering blows with a stick on her in order to protect herself.
Allowing the appeal of the State.
HELD : (1) The trial Court was right in believing the evidence of the proSecution witnesses in regard to both the incidents and the occurrence in question forming part of the second incident.
The High Court differed from the view of the trial judge on flimsy and unsustainable grounds.
[998 D E] (2) There was absolutely no basis or material on the record to enable the High Court to record an order of acquittal in favour of the respondents by extending them a right of private defence.
Even going to the maximum extent in favour of the respondents that respondent No. 1 got the blows with a stick at the hands of the deceased and in the second incident it is manifest that her action of assault on him was a deliberate counterattack to cause him such injury which at least was likely to cause his death.
The counterattack could in no sense be an attack in exercise of the right of private defence.
[100 F G] (3) Neither in her complaint before the police nor in the statement under s.342 Cr.
P.C. Was there a whisper by respondent No. 1 of her having squeezed the testicles and private parts of the deceased in exercise of her right of private defence.
Not only was the plea of private defence not taken by the respondents in their statements under section 342, Cr.
P.C. but no basis for the plea was laid in the cross examination of the prosecution witnesses or by adducing any defence evidence.
The burden of establishing that plea was not discharged in any way by the respondents even applying the test of preponderance of probabilities in favour of that plea.
There is absolutely no material on the record to lead to any such conclusion.
[999 G H] Munhi Ram and Others vs Delhi Adtministration [19681 2 S.C.R. 455, followed.
|
Appeal No. 756 of 1965.
Appeal by special leave from the judgment and order dated April 9, 1965 of the Mysore High Court in Civil Revision Petition No. 1044 of 1962.
section K. Venkatarangaiengar G. L. Sanghi, J. B. Dadachanji O. C. Mathur and Ravinder Narain, for the appellant.
Mirle N. Lakshminaraynappa O. P. Malhotra, section section Khanduja Ganpat Rai, for the respondent.
869 The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Mysore in Civil Revision Petition No. 1044 of 1962, filed under section 17 of the Mysore House Rent and Accommodation Control Act, 1951 (Mysore Act 30 of 1951)hereinafter referred to as the Act whereby the High Court set aside the order passed by the III Additional District Judge, Bangalore.
The III Additional Judge had set aside the order of ' the First Munsiff, Bangalore, who had directed the eviction of the tenant from the premises in dispute.
The appellant before us, Padmanabha Setty, hereinafter referred to as the tenant, was the tenant of a non residential premises No. 281, Old Tharagupet, Bangalore City. ] 'be tenant had installed some machinery in the premises.
The respondent, K. P. Papiah Setty, is the landlord.
He had purchased the premises for his own use and occupation, namely, for the purpose of shifting his business which hewas carrying on in a rented building to the premises in dispute.
The landlord tiled an application under s.8(3)(a)(ii) of theAct for the eviction of the tenant on the ground that he required the premises in dispute for his own use and occupation.
It is not necessary to give the other allegations made in the application as both the First Munsiff, Bangalore, and the III Additional District Judge, Bangalore, have found that the landlord required the premises for his bonafide use and occupation, namely, for shifting his business from the rented premises to the premises in dispute.
The III Additional District Judge, however, held that under section 8(3)(a)(ii) the landlord was not entitled to possession of the premises in dispute unless and until he was prepared to vacate the shops in which he was trading at the time.
This finding of the learned Additional Judge was contrary to the decision of the Mysore High Court in section G. Narayanappa and Bros. vs A. N. Narasimhiah(1).
The landlord then filed a revision petition under section 17 of the Act, and the High Court, following the decision in section G. Naravanappa and Bros. vs A. N. Narasimhiah(1) set aside the order of the Additional District Judge.
The tenant having obtained special leave, the matter is now before us.
Two points are raised before us: (1) that the construction put upon section 8(3)(a) (ii) of the Act by the Mysore High Court is erroneous and the construction put upon a similar provision by the Madras High Court in V. Thanappa Chetty vs Arcot Govindaswami Naicker(2) is correct; and (2) that the High Court was not right in setting aside the order of the Additional District Judge in a revision under section 1 7 of the Act.
(1) (2) A.I.R, 1952 Mad.
870 The Act was passed to regulate the letting of residential and non residential houses and to control the rents of such houses and to prevent unreasonable eviction of tenants therefrom in the State of Mysore.
The word "tenant" is defined as follows in sub section
(9) of section 2 of the Act: " 'tenant ' means any person by whom or on whose account rent is payable for a house and includes the surviving spouse or any son or daughter of a deceased tenant who had been living with the tenant in the house as a member of the tenant 's family up to the death of the tenant and a person continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a house by its tenant or a person to whom the collection of rents or fees in a public market, cart stand or slaughter house or of rents for shops has been farmed out or leased by a local authority.
" There is no doubt that the definition of the word "tenant" is wider than the ordinary meaning of the word and includes a person ,continuing in possession after the termination of the tenancy in his favour.
Section 4 deals with the determination of fair rent and section 5 with lawful increase of or addition to or reduction in fair rent.
Section 6 prohibits the landlord from claiming or receiving anything in excess of fair rent or agreed rent.
Section 7 deals with issue of receipts for rent.
Sections 7A and 7 B deal with the right of tenant to deposit rent in certain cases and time for deposit and savings.
Section 7 C deals with eviction of tenant in occupation of a house under an allotment order.
Section 8 deals with eviction of tenants and provides that ,a tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of s.7 C or of this section.
Sub section (2) provides the circumstances in which a landlord would be entitled to seek eviction of a tenant in possession.
For instance, a landlord is entitled to evict a tenant if the tenant has not tendered or paid the rent due by him in respect of the premises within the time fixed in the agreement of tenancy with the landlord on in the absence of any such agreement, by the last day of the month next following that for which the rent is payable; if he has transferred his right under the lease or sublet the entire premises or any portion thereof; or used the premises for the purpose other than that for which they were leased; or if the tenant has committed such acts of waste as are likely to impair materially the value or utility of the house; or if the tenant has without the landlord 's consent in writing erected on the house or any portion thereof any permanent ' structure; or if the tenant or any person residing with the tenant has been guilty of such acts and conduct as amounts to nuisance or annoyance to the adjoining or neighbouring occupiers 871 or has been using the house or allowing the house to be used for immoral or illegal purposes; or that the house is reasonably and bona fide required by the landlord for carrying out repairs or reconstruction which cannot be carried out without the house being vacated; or that the house has not been used without reasonable cause for the purpose for which it was let for a continuous period of three months immediately preceding the date of application; or that the tenant, after the commencement of the Act, has built, acquired vacant possession of or been allotted a suitable house.
We have set out these conditions in detail because it would be relevant to consider whether in view of these conditions a tenant can be said to have a right to possession of the premises of which he is a tenant.
Then we come to sub section
(3) (a) which reads as follows: "(3)(a) A landlord may, subject to the provisions of clause (d) apply to the court for an order directing the tenant to put the landlord in possession of the house (i)in case it is a residential building, if the landlord requires it for his own occupation or for the occupation of a member of his family and if he or such member, as the case may be, is not occupying a residential building of his own in the city, town or village concerned; (ii)in case it is a non residential building, if the landlord requires it for a business which he or a member of his family is carrying on and if for the purposes of the said business is not in occupation of a non residential building which is owned by or to the possession of which the landlord or such member, as the case may be, is entitled whether under this Act or otherwise.
" It is not necessary to set out the Explanation or the first proviso but the second proviso is relevant and runs thus: "Provided further that where a landlord has obtained possession of a house for his own use or occupation or for the use or occupation of a member of his family under this clause he shall not be entitled to apply again under this clause (ii)for possession of another non residential building of his own, for himself or for the same member of his family, in case he has obtained possession of a nonresidential building." The Madras High Court held in V. Thannappa Chetty vs Arcot Govindaswami Naicker (1) that the tenant under the Madras (1) A.I.R. 1952 Mad.
553 at p. 554 555.
872 Buildings (Lease and Rent Control) Act (Madras Act 15 of 1946) had a right to possession unless and until he was evicted under the provisions of the Madras Act, and, therefore, the landlord would not be entitled to possession of a non residential building if he was in possession of another non residential building as a tenant, for in such a case he would be entitled to possession of those premises.
The reasoning of Subba Rao, J., then a Judge of the High Court of Madras, was as follows: "It will, therefore, be seen that the relationship between the landlord and tenant even in cases in which such relationship terminated under the provisions of the Transfer of Property Act, continues su bject to the provisions of the Act.
The rights of the tenants as well as the landlord are defined.
The tenant tinder the Act has a right to possession unless and until he is evicted under the provisions of the Act.
Under the provisions of the Act, a landlord will not be entitled to the possession of his non residential buildings, if he obtains an order for eviction against another tenant in respect of another non residential building, or if he is in possession of another non residential building as a tenant; for in either case he is entitled to possession of that premises.
The words used in the section, viz., "to the possession of which he is entitled" are wide and I do not see any reason why the latter category should be excluded from the express words used which in their ordinary meaning take in that class." "It was argued that a statutory immunity is different from a right to possession.
But in my view a statutory immunity is not inconsistent with a right to possession.
The statutory immunity itself creates a right in him to continue in possession till he is evicted under the provisions of the Act.
" The Mysore High Court dissented from this decision of the Madras High Court, and the reasoning of Ahmed Ali Khan, J., in section G. Narayanappa and Bros. vs A. N. Narasimhiah(1) is as under: "After a careful consideration of the arguments advanced before me, I am of the opinion that the provision of the Act on the strength of which a tenant may resist the landlord 's claim to evict him cannot be described as a right to possession, but only as a statutory immunity from eviction, as observed by the Federal Court in the case Kai Khushrao vs Bai Jerbai (2).
It appears that his Lordship in the Madras case distinguished the said observations in the said case of the Federa Court by stating that a statutory immunity is not inconsistent with the right to posses (1)[1962] Mys.
L.J.76 (2) A. I. R. (128).
873 sion and that such immunity may itself create a right.
The right to immunity from eviction involves a negative element in it.
In other words it restricts the right of possession of the landlord.
Hence, it cannot be construed to have an effect of creating a right of possession to a tenant.
Though the statutory immunity from eviction may not be consistent with the right to possession, the fact remains in view of the inherent element involved in both the rights, that the immuni ty from eviction cannot be equated to the right to possession.
Therefore, with great respect, I am of the view that we will not be justified in adopting the strict view while interpreting the words which occur in section 8(3) (a)(ii) of the Mysore House Rent and Accommodation Control Act, as taken in the Madras ruling cited above.
" In our opinion, with great respect to Subba Rao, J., Ahmed Ali Khan, J., arrived at the correct conclusion.
A tenant who can be evicted under the conditions prescribed in section 8(2) of the Act cannot be said, in our view, to be entitled to the possession of the premises of which he is a tenant.
No doubt he cannot be evicted till one or more of the conditions prescribed by the section are fulfilled, but it is difficult to equate his right to stay in the premises till he is evicted to an entitlement of the possession of the premises.
Section 8(3)(a)(ii) deals with two types of cases; first where the landlord is in occupation of a non residential building which is owned by him, and secondly, a non residential building of which he is in occupation not as a landlord but otherwise.
The object of the Act is to prevent unreasonable evictions of tenants.
Can it be said that the Legislature is considering it to be unreasonable for a landlord to shift to his own premises while he is in occupation of tenanted premises over which he has not an absolute right of possession but only a right to remain in possession till one of the conditions in section 8(2) is satisfied, and over one of which he has no control.
For instance, the landlord may require the premises for repairs or reconstruction or the neighbours may complain that the tenant is guilty of nuisance or annoyance, or the landlord may think that the tenant has committed some acts of waste as are likely to impair materially the value or utility of the house.
If any of these conditions is proved, he is liable to be evicted.
In our view, in the context the words "entitled to possession" have a more positive content and are more akin to the right of possession which an owner has in respect of the building owned and occupied by him.
In conclusion we are of the view that the High Court was right in holding that the Additional District Judge erred in not following the decision of the Mysore High Court in section G. Narayanappa and Bros. vs A. N. Narasimhiah.(1) (1) M12Sup.
C.I.166 10 874 There is no force in the second point raised by the learned counsel of the tenant.
It is true that the jurisdiction of a High Court under provisions similar to section 1 7 of the Act is limited, but we cannot say that the High Court was wrong in holding that the Additional District Judge acted with material irregularity in not following the decision of the Mysore High Court when that decision had been rendered in a case arising from an earlier order of the same Additional District Judge.
It may be that this decision was not pointed out to the Additional District Judge but we cannot, in exercise of our jurisdiction under article 136 of the Constitution, say that the High Court should not have set aside the order of the Additional District Judge on this ground.
In the result the appeal fails and is dismissed with costs.
The tenant is granted two months ' time from today to vacate and deliver possession of the premises in dispute to the landlord.
Appeal dismissed.
| The appellants were mortgagees of properties including a house on the basis of a mortgage bond executed in 1928.
The interest provided in the bond was 9 % per annum compoundable annually.
In 1937 the house above referred to was sold to B subject to the earlier mortgage.
In 1939 the appellants filed a suit against the original mortgagors and others including B for the, amount due under the mortgage.
Certain amounts towards the discharge of the liability under the mortgage were received by the appellants before as well as after the filing of the suit.
A preliminary decree was passed in favour of the appellants in 1942 and the final decree in 1945.
In 1949, B was declared an evacuee.
When in 1952 the appellants put their decree in execution the property was treated as "composite property" and the Custodian of Evacuee Property contended before the Competent Officer that the appellants were not entitled to any interest higher than five per cent per annum simple from the date of the mortgage under section 9(1) of the Evacuee Interest (Separation) Act, 64 of 1951.
The Custodian accordingly claimed that the entire transaction should be rib opened from the date of the mortgage and if more than five per cent simple interest had been received by the appellants the excess should be credited towards the principal amount.
The Competent Officer held that the limit of five per cent could not apply before the Act came into force.
The Appellate Officer however upheld the contention of the Custodian.
The appellants thereupon filed a writ petition in the High Court which was dismissed in limine.
By special leave they appealed to this Court.
HELD:Section 9(1) only deals with the liability of the mortgaged property which may still be due when the claim is made before the competent officer.
Though the provision is retrospective in the sense that where the liability is still there, interest has to be calculated at five per cent per annum simple, there is nothing in the Words of section 9(1) which authorises the reopening of the accounts ,and utilising the excess over five per cent per annum simple.
towards reduction of principal provided the payment of interest al ready made in within the contractual rate.
[61 F] On the above view the maximum rite of interest laid down in s.(1) was not applicable before the date of the suit.
But under section 8(3) the decree of the Court was subject.
to section 9 and therefore after the date of the suit the said rate was applicable.
Directions 'given accordingly [61 H] L/S5SCI 6 56
|
: Criminal Appeal 227 of 1977.
Appeal by Special Leave from the Judgment and order dated 17 2 1977 of the Gujarat High Court in Special Criminal Application No. 1 of 1977.
M.F. Thakkar and section section Khanduja for the Appellant.
B.V. Patel, section P. Nayar and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
This appeal by special leave is directed against the judgment and order of the; Gujarat High Court dated February 17, 1977 in Special Criminal Application No. 1 of 1977 filed under Articles 140 226 and 227 of the Constitution whereby the High Court reversed the order of the learned Sessions Judge, Broach in Criminal Appeal No. 39 of 1975 and sent the matter back to the learned Sessions Judge for passing an appropriate order in regard to the question as to whether the entire seized stock of exercise books of the appellant or part thereof should be confiscated under section 6A of the .
The question raised in the appeal is whether exercise books are covered by the item "paper" occurring in section 2(a) (vii) of that Act as also in Entry 13 of Schedule I to the Gujarat Essential Articles Dealers ' (Regulation) order, 1971 ? The question arises in these circumstances: The appellant Maharaja Book Depot is a partnership firm dealing in books and stationery articles at Rajpipla, District Broach.
Its shop was inspected and searched by the Mamlatdar of Rajpipla on July 4, 1975 when certain alleged irregularities came to light.
During the search 78 gross exercise books of controlled variety and 97 gross exercise books of non controled variety were seized on the ground that the appellant had committed breaches of Clauses 3, 9 and 11 of the Gujarat Essential Articles Dealers ' (Regulation) order 1971 (hereinafter referred to as "the Regulation order"), in that the appellant (a) did not display at any conspicuous part of the premises the opening stock of the exercise books, (b) did not write the names of the customers on the bills issued to them for the sale of the exercise books and (c) did not keep a register showing the stock of controlled and non controlled exercise books.
A notice under section 6B of the (hereinafter referred to as 'the Act ') was served by the Collector, Broach, calling upon the appellant to show cause why the seized stock of exercise books should not be confiscated and after taking into consideration the explanation offered by the appellant the Collector by his order dated September 17, 1975 held that the appellant firm was guilty of the breaches of Clauses 3, 9 and 11 of the, Regulation order and directed that the entire seized stock be confiscated to the State Government under section 6A of the Act.
The appellant preferred an appeal to the Sessions Court at Broach being Criminal Appeal No. 39 of 1975 and the learned Sessions Judge by his judgment and order dated October 16, 1976 allowed the appeal and set aside the order of confiscation on the ground that the Act and the Regulation order did not apply to the exercise books inasmuch as an exercise book which is a distinct commodity did not fall within the item "paper" enlisted as an essential commodity in section 2(a) (vii) of the Act and in Entry 13 of Schedule I to the Regulation order.
This order was challenged by the State of Gujarat in Special Criminal Application No. 1 of 1977 under article 227 of the Constitution.
The High Court by its judgment and order dated February 17, 1977 took the view that the 141 item "paper" as enlisted both in section 2(i) (vii) of the Act and Entry 13 A in Schedule I to the Regulation order was wide enough to cover an exercise book which was nothing but collection of papers stitched together by a piece of string or pinned with pins of stappler and quashed the order of the learned Sessions Judge but instead of straightaway confirming the Collector 's confiscation order it remanded the appeal back to the Sessions Judge for passing an appropriate order after deciding the question as to whether the entire seized stock or a part thereof should be confiscated under section 6A of the Act.
The appellant has challenged the legality and or validity of the view taken by the High Court in this appeal.
In order to appreciate properly the submissions of counsel for the appellant on the construction of the expression "paper" occurring in the concerned legislations it will be necessary to set out the purpose and the relevant provisions thereof.
The Act was put on the Statute Book, as its preamble will show, with a view to provide, in the interests of the general public, for the, control of production, supply and distribution of, and trade and commerce in certain commodities defined and enlisted as "essential commodities" in section 2, which enlistment has been enlarged from time to time by Central Government Notifications.
In other words, the obvious purpose of the enactment is to control the production, supply and distribution of certain commodities which are essential for the society at large with a view to ensure that the common man gets them at fair prices without let or hindrance on the part of the trade.
Section 3 confers powers on the Central Government to regulate or prohibit the production,, supply and distribution of essential commodities and trade and commerce therein by issuance of orders in that behalf for maintaining or increasing supplies of such commodities or for securing their equitable distribution and availability at fair prices etc.
while under section 5 the Central Government can delegate its powers in that behalf to an officer or authority subordinate to it or to any State Government.
It appears that on December 8, 1971 in exercise of the powers conferred by sub section
(1) read with cls.
(d), (e), (i) and (j) of sub section
(2) of section 3 of the Act read with the order of the Government of India, Ministry of Commerce No. so 1844 dated June 18, 1966, and the order of that Government in the Ministry of Food, Agriculture, Community Development and Co operation (Department of Food) No. G.S.R. 1111 dated July 24, 1971, the State of Gujarat passed its order called "The Gujarat Essential Articles Dealers (Regulation) order, 1971", for the purpose of maintaining supplies of essential articles and for securing their equitable distribution and availability at fair prices.
Now, the Act as also the Regulation Order contain an enlistment of items which are regarded as 'essential commodities ' or '.
essential articles '; section 2(a) of the 142 Act defines 'essential commodity ' as meaning any of the classes of commodities enlisted in its various sub clauses and sub cl.
(vii) refers to the item "paper" while cl.
(v) of the Regulation order defines 'essential article ' as meaning any of the articles specified in Schedule I and item 13 in that Schedule relates to "paper" but at both the places the item has been described in identical manner, viz: "Paper, including newsprint, paper board and strawboard".
It seems that the enlistment of the item "paper" in the above manner in section 2(a) (vii) of the Act has not been amended, altered or changed but its enlistment in the Regulation order has undergone a change, for by a Notification dated July 10, 1975, the Schedule I of the Regulation order was recast and more items were added.
Schedule I so amended by the said Notification now includes the item "paper" at sl.
No. 14 which runs thus: "14.
Paper" including news print, paper board, straw board and exercise note books.
" In other words, by the Notification dated July 10, 1975 exercise note books have come to be specifically added to the item "paper".
The main question is whether exercise books are covered by the item "paper" as described in section 2 (a) (vii) of the Act and in Item 13 in Schedule I to the Regulation order as it stood before its amendment by the Notification dated July 10, 1975.
Counsel for the appellant raised two or three contentions before us in support of this appeal.
He emphasized the fact that on July 4. 1975 when the stock of exercise books was seized from the appellant 's shop by the Mamlatdar both in section 2(a) (vii) of the Act as well as under Entry 13 in Schedule I to the Regulation order the item "paper" as an essential commodity was described in a particular manner without the addition of "exercise note books" which was made in the Regulation order after the seizure had been effected.
On construction of the item "paper" he first contended that the expression "paper" ordinarily means a sheet or sheets of paper and an exercise book being a distinct commodity was excluded from that item.
Secondly, he urged that this would be.
so because even while providing for an inclusive description of the item the legislation has included only news prints, paper boards and straw boards within it but not exercise books and, therefore, the expression "paper" should be construed as excluding exercise books.
Thirdly, he urged that so far as the Gujarat Regulation order is concerned the very fact that by Notification dated July 10, 1975 Item 14 in Schedule I was enlarged so as to include specifically exercise note books within the expression "paper" clearly shows that 143 the legislative intent was to exclude exercise books from the expression "paper" under Item 13 in Schedule I as it stood prior to that date.
Lastly, he urged that since the provisions of the Act as well as the Regulation order were penal in character, the item "paper" should be construed narrowly in favour of the person proceeded against and as such the view taken by the learned Sessions Judge should be upheld.
In support of these submissions counsel relied upon a decision of this Court in State of Bihar vs Bhagirath Sharma and Another,(1) where this Court, having regard to the legislative history and penal character of the concerned order took the view that the item like "component parts and accessories of automobile", though of wide import did not cover tyres and tubes of motor cars and motor cycles.
According to him, therefore, the learned Sessions Judge was right in his view that the expression "paper" did not cover exercise book and that the seized exercise books were not liable to be confiscated under section 6A of the Act.
The question thus centres round the proper construction of the item "paper" as described in section 2(a) (vii) of the Act and item No. 13 of Schedule I to the Regulation order.
On this question the object or purpose of the Act and the Regulation order as well as the manner in which 'essential commodity ' or 'essential article has been defined therein will have considerable bearing.
As stated earlier, the object or purpose of both the pieces of legislation is to control the production, supply and distribution of essential commodities or essential articles with view to ensure that the common man gets them at fair prices without any let or hindrance on the part of the trade and it is with this object that the item "paper" has been enlisted as an essential commodity or essential article in the Act and take Regulation order.
Further though section 2(a) of the Act and Cl.
2(v) of the Regulation order purport to define 'essential commodity ' or 'essential article ' that expression has no meaning of its own and in substance both under section 2 (a) (vii) of the Act and Cl.
2 (v) of the Regulation order an enumeration or enlistment has been made of several items as constituting essential commodities or essential articles for the purposes of the Act and the Regulation Order and it will appear clear that items have been enumerated or enlisted under broad general heads and some of the items are stated to include certain things which may not in ordinary parlance fall within the broad general head.
The item 'paper" will have to be considered in the light of this position which emerges clearly on a consideration of several items enlisted as essential commodities or essential articles.
The item "paper" is described thus: "Paper including news print, paper board and straw board".
(1) ; 144 According to the Concise Oxford Dictionary paper means "A substance used for writing, printing, drawing, etc.
made of interlaced fibres of rags, straw, wood, etc.
" In Webster 's New World Dictionary (1962 Edn.) the meaning of the word "paper" is given as follows: "Paper thin flexible material in sheets or leaves, made from rags, wood pulp., or other fibrous decorate etc." In Black 's Law Dictionary (Revised Fourth Edition 1968) the expression "paper" is explained thus: "Paper a manufactured substance composed of fibres (whether vegetable or animal) adhering together in forms consisting of sheets of various sizes and of different thicknesses, used for writing or printing or other purposes to which flexible sheets are applicable." In substance, therefore, paper, whether lined or blank, means a material on which writing, printing, drawing etc.
can be done.
In light of this meaning of the expression "paper" the question is whether an exercise book would be covered by that expression or not ? It cannot be disputed that an exercise book is nothing but a collection of sheets of paper (blank or lined) stitched together by a piece of string or pinned together with pins of a stappler and is a substance used for writing and, therefore, would clearly fall within the item "paper".
The test would be whether because of stitching or pinning them together such a collection of sheets looses its identity as paper ? The answer must be in the negative.
Looked at from this angle it is difficult to accept the contention that an exercise book is a distinct commodity other than paper.
It is true that an inclusive description has been given of the item "paper" in section 2(a) (vii) of the Act and Item 13 in Schedule I to the Regulation order, but if the inclusive part is carefully scrutinised it will appear clear that the things mentioned in the inclusive part may not ordinarily be regarded as paper and, therefore, by the inclusive part an extended meaning or description is given to the expression "paper".
Since an exercise book (which is nothing but a collection of sheets of paper intended to be used for writing) squarely falls within the dictionary meaning of the word "paper" there was no necessity to mention it in the inclusive part of the description.
On a true and proper construction, therefore, we are clearly of the view that within its normal dictionary meaning the item "paper" as described in section 2(a) (vii) of the Act and Item 13 in Schedule I to the Regulation order covers an exercise book.
145 Moreover, such a construction would be in consonance with and carry out effectively the object or purpose of the Act and the Regulation order.
Counsel for the appellant undoubtedly relied upon the fact that so far as the Gujarat Regulation order is concerned it was by notification dated July 10, 1975 that the description of item "paper" (being item No. 14 in the recast Schedule I) was enlarged so as to include specifically 'exercise notebooks ' and, according to counsel, this clearly shows that initially the legislative intent was to exclude exercise book from the expression "paper" under Item 13 in Schedule I to the said order as it originally stood.
It is not possible to infer such legislative intent from the mere fact that the item "paper" has been amended and enlarged so as to include within it exercise books by means of the subsequent Notification.
In fact, as discussed earlier, since an exercise book squarely falls within the dictionary meaning of the expression "paper" we have held that it was unnecessary to mention it in the inclusive part of the description as it originally stood and in that inclusive part such things had been mentioned as could not in ordinary parlance be regarded as "paper".
In our view the amendment and enlargement of the item "paper" so as to include specifically exercise books was made ex majore cautela to make things abundantly clear and, therefore, no inference as regards the initial legislative intent of the type suggested can be drawn.
Counsel also contended that since the Act as well as the Regulation order contain penal provisions, the item "paper" should he construed strictly and narrowly in favour of the appellant firm which was being proceeded against under the said pieces of legislation.
The true rule of construction in that behalf has been set out in Maxwell on Interpretation of Statutes (12th Edn.) at page 246 where the following passage occurs: "The effect of the rule of strict construction might be sum med up by saying that, where an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself.
If there is no ambiguity, and the act or omission in question falls clearly within the mischief of the statute, the construction of a penal statute differs little, if at all, from that of any other.
" It would thus appear clear that it is only when there is some equivocation or ambiguity about a word or provision that the rule of strict construction or narrow construction in favour of the subject is to be applied 146 but if there is no ambiguity and the act or omission falls clearly within the mischief of statute then the construction of a penal statute will not differ from that of any other.
Applying this principle to the facts of the present case it is clear that there is no ambiguity or equivocation of the item "paper ' occurring in section 2(a) (vii) of the Act and Item 13 of Schedule I of the Regulation order and since an exercise book squarely falls within the dictionary meaning of "paper" as used in the said provisions, there will be no question of construing that item narrowly so as to exclude exercise book therefrom and in favour of the appellant firm.
That takes us to the decision of this Court in State of Bihar vs Bhagirath Sharma and Anr.
(supra) on which the appellant firm strongly relied.
In that case the question was whether Motor Tyres and Motor Tubes were covered by the item "Component parts and accessories of automobiles" occuring in Item No. 1 in Schedule I to the Bihar Essential Commodities Act other than Foodgrains Prices and Stocks (Display and Control) order 1947 and this Court undoubtedly took the view that though the said item I was widely worded it did not include Motor Tyres or Motor Tubes and that no interference was called for in the order passed by the High Court acquitting the respondents of the charge that they had failed to display the price list and the stock position of the Motor Tyres anywhere in their shop in contravention of Cl.
(4) of the said order.
In our view, the decision is clearly distinguishable on the ground that the drafting precedents furnished by several Notifications that obtained there warranted such a conclusion.
From the inception along with Item 1 (component parts and accessories of automobiles) there was in the concerned Prices and Stocks (Display and Control) order, 1947 another item being Item 5 which ran thus: "Cycle tyres and tubes (including cycle rickshaw tyres and tubes)" which suggested that where "Tyres and Tubes" were intended to be included as the Item in the Schedule these had actually been expressly so stated as distinct from the "component parts and accessories or automobiles"; further, by a Gazette Notification (No. GSR 82) dated September 18, 1970 published in the Bihar Government Gazette (Extra ordinary) four items were added, one of them being Item No. 11, Which ran thus: "Tyres and tubes of cars, buses, jeeps, vans, trucks automobiles of any category whatsoever, tractors and tractor trollies.
", even the Central Government had issued three Notifications a Notification dated 11 January, 1968 (No. S.O. 218) issued by the Ministry of Commerce, in which "Tyres and Tubes of Scooters" were expressly mentioned as essential commodities distinct from the component parts and accessories of automobiles; a Notification dated 22 August, 1968 (No. s o. 2878) in which "Tyres and Tubes of Cars etc." were.
147 specifically mentioned as essential commodity and a Notification dated A 3rd January, 1969 (No. S.O. 25) in which "Tyres and Tubes of Cars " were mentioned in the manner almost similar to the one found in the Bihar Government Gazette Notification No. GSR 82 dated 18 September, 1970.
It was in the back ground of these drafting precedents furnished by such Notifications that this Court took the view that the draftsman did not intend the scheduled item No. 1 in the Order as in force in May, 1969 to cover "Tyres and Tubes of Motor cars".
In the instant case before us there are no such drafting precedents of the type which obtained in the aforementioned case.
As stated earlier, the Item "paper" in s.2 (a) (vii) in the Act has all along remained the same without any modification, alteration or enlargement and it is only the item No. 13 in the Schedule to the Regulation order (a subordinate piece of legislation) that has undergone a change and the item has been amended so as to include specifically "exercise notebooks".
We have no doubt in our minds that the said amendment to the item "paper" is declaratory or clarificatory in nature.
In the circumstances, in our view, the High Court was right in coming to the conclusion that the exercise books of the appellant firm that were seized were liable to confiscation and the remand order made by the High Court was proper.
The appeal is accordingly dismissed.
N.V.K. Appeal dismissed.
| The term "paper" is described as "paper", including newsprint, paper board and strawboard" in section 2(a) (vii) of the as well as in Item 13 in Schedule I to the Gujarat Essential Articles Dealers (Regulation) order 1971.
By a notification dated July 10, 1975, the Schedule 1 of the Regulation order was recast and more items were added.
Item No. 13 of the Regulation order after it was recast by the amendment of 1975 and renumbered as section No. 14 read as follows: "14.
Paper including newsprint, paper, strawboard and exercise note books.
" The appellant is a firm dealing in books and stationery articles.
On a surprise inspection and search of the appellant 's shop it was found that in regard to exercise books the appellant committed breach of the Regulation order, in that he did not display the stock; thereof that he did not write the names of customers on the bills issued to them and that he did not maintain the stock registers properly and thereof a sizable quantity of exercise books were seized.
The Collector found that the appellant was guilty of breach of the Regulation order and directed that the seized stocks of exercise books be confiscated under section 6A of the Act.
In appeal the Sessions Judge set aside the Collector 's order on the ground that exercise books did not fall within the item "paper" as envisaged in the Act and the Regulation order.
In proceedings under article 227, the High Court book the view that the term "paper" was wide enough to cover exercise books, which was nothing but a collection of papers, stitched together by a piece of string or pinned with pins of stappler, and quashed the order of the Sessions Judge.
Dismissing the appeal to this Court: ^ HELD: (1) On a true and proper construction, within its normal dictionary meaning the item "paper" as described in section 2(a)(vii) of the Act and Item 13 in Schedule I to the Regulation order covers an exercise book Such a construction would be in consonance with and carry out effectively the object or purpose of the Act and the Regulation order.
[144H 145A] 139 Black 's Law Dictionary (Revised Fourth Edn. 1968).
Webster 's New World Dictionary (1962 Edn.); Concise oxford Dictionary, referred to.
(2) 'Though section 2(a) of the Act and cl.
2(v) of the Regulation order purport to define 'essential article ' that expression has no meaning of its own and what follows is an enumeration of articles regarded as essential for the purposes of the Act and the order.
[143 F] (3) An inclusive description has been given to the item "paper" in the Act and the Regulation order, but the inclusive part refers to things that may not ordinarily be regarded as paper and, therefore, an extended meaning or description is given to the expression "paper".
Since an exercise book (which is nothing but a collection of sheets of paper intended to be used for writing), squarely t`falls within the dictionary meaning of the word "paper" there was no necessity to mention it in the inclusive part of the description.
[144 F H] (4) The amendment and enlargement of the item ' 'paper ' ' so as to include specifically exercise books was made ex majore cautela to make things abundantly clear and, therefore, no inference as regards the initial legislative intent that it was to exclude exercise books from the expression "paper" under item 13 in Schedule I to the said order as it originally stood can be drawn.
[145 D] (5) It is only when there is some equivocation or ambiguity about a word or provision in a penal statue that the rule of strict or narrow construction in favour of the subject is to be applied but if there is no ambiguity and the act or omission falls clearly within the mischief of the statute then the construction of a penal statute will not differ from that of any other.
[145 H 146A] Maxwell on interpretation of Statutes (12th Edn.) p. 246 referred to.
(6) In the instant case there is no ambiguity or equivocation of the item 'paper" and an exercise book squarely falls within the dictionary meaning of "paper".
[146 B] State of Bihar vs Bhagirath Sharma & Anr., ; distinguished.
|
Appeal No. 124 of 1959.
Appeal by special leave from the Award dated February 8, 1957, of the Additional Industrial Tribunal, Delhi, in Misc.
I. D. Case No. 422 of 1956.
Jawala Prasad Chopra and J. K. Haranandani, for the appellants.
C. K. Daphtary, Solicitor General of India, H. J. Umrigar, M. K. Ramamurthi, V. A. Seyid Muhamad and M. R. Krishna Pillai, for the respondent.
March 22.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave is directed against the order passed by the Additional Industrial Tribunal, Delhi, directing the appellant, M/s. New India Motors Private Ltd., to reinstate its former employee, K. T. Morris, the respondent, in his original post as field service representative and to pay him his back wages from the date of his dismissal till the date of his reinstatement.
This award has been made on a complaint filed by the respondent against the appellant under section 33A of the XIV of 1947 (hereinafter called the Act).
It appears that before joining the appellant the respondent was working with a firm in Calcutta; prior to that he was field service representative of M/s. Premier Automobiles Ltd., Bombay.
The respondent joined the services of the appellant sometime in May 1954 as Works Manager.
Before he joined the services of the appellant he had been told by the appellant by its letter dated March 27, 1954, that the appellant would be willing to pay him Rs. 350 per month and something more by way of certain percentage on business.
He was, however, asked to interview the 352 appellant; an interview followed and the respondent was given a letter of appointment on May 6, 1954.
By this letter he was appointed as Workshop Manager in the appellant 's firm on three months ' probation subject to the terms and conditions specified in the letter of appointment (exhibit W 2).
The respondent continued in this post till February 28, 1955, when he was given the assignment of the appellant 's field service organiser with effect from March 1, 1955.
A letter of appointment given to him on 28 2 1955 set forth the terms and conditions of his new assignment.
It appears that on April 18, 1956, the management of the appellant called for an explanation of the respondent in respect of several complaints.
An explanation was given by the respondent.
It was, however, followed by another communication from the appellant to the respondent setting forth specific instances of the respondent 's conduct for which explanation was demanded.
The respondent again explained and disputed the correctness of the charges.
On June 30, 1956, the respondent 's services were terminated on the ground that the appellant had decided to abolish the post of field service representative.
It is this order which gave rise to the respondent 's complaint under section 33A of the Act.
The complaint was filed on July 18, 1956.
The respondent invoked section 33A because his case was that at the time when his services were terminated an industrial dispute was pending between the appellant and 7 of its employees and the respondent was one of the workmen concerned in the said industrial dispute.
The said industrial dispute had reference to the termination of the services of the said 7 employees who were working with the appellant as apprentices.
On their behalf it was alleged that their termination of service was improper and illegal and that was referred to the industrial tribunal for its adjudication on August 20, 1955.
The said dispute was finally decided on January 2, 1957.
With the merits of the said dispute or the decision thereof we are not concerned in the present appeal.
According to the respondent, since he was a workman concerned in the said dispute section 33(1)(a) applied and it was not open to the appellant to terminate his 353 services save with the express permission in writing of the authority before which the said dispute was pending.
It was on this basis that he made his complaint under section 33A of the Act.
Before the tribunal the appellant urged that the respondent was not a workman as defined by the Act, and on the ' merits it was contended that the appellant had to abolish the post of the field service organiser owing to the fact that a part of the agency work of the appellant had been lost to it.
On the other hand, the respondent contended that he was a workman under the Act and the plea made by the appellant about the necessity to abolish his post was not true and genuine.
His grievance was that his services were terminated solely because he had taken interest in the complaint of the 7 apprentices which had given rise to the main industrial dispute and had in fact given evidence in the said dispute on behalf of the said apprentices.
The tribunal has found that the respondent is a workman under the Act, that there was no evidence to justify the appellant 's contention that it had become necessary for it to abolish the respondent 's post, and that it did appear that the respondent had been discharged because the appellant disapproved of the respondent 's conduct in supporting the 7 apprentices in the main industrial dispute.
As a result of these findings the tribunal has ordered the appellant to reinstate the respondent.
The question as to whether the respondent is a workman as defined by section 2(s) of the Act is a question of fact and the finding recorded by the tribunal on the said question, after considering the relevant evidence adduced by the parties, cannot be successfully challenged before us in the present appeal.
The respondent has given evidence as to the nature of the work he was required to do as field service organiser.
The letter of appointment issued to him in that behalf expressly required, inter alia, that the respondent had, if need be, to check up and carry out necessary adjustments and repairs of the vehicles sold by the appellant to its customers and to obtain signatures of responsible persons on the satisfaction 354 forms which had been provided to him.
The respondent swore that he looked after the working of the workshop and assisted the mechanics and others in their jobs.
He attended to complicated work himself and made the workmen acquainted with Miller 's special tools and equipment needed for repairs and servicing of cars.
He denied the suggestion that he was a member of the supervisory staff.
On this evidence the tribunal has based its finding that the respondent was a workman under section 2(s), and we see no reason to interfere with it.
Then, as to the appellant 's case that it had to abolish the post of the respondent as it had lost the agency of DeSoto cars from Premier Automobiles, there is no reliable evidence to show when this agency was actually lost.
Besides, the fact that the appellant has appointed a Technical Supervisor after discharging the respondent is also not without significance.
Furthermore, the appellant is still the agent for Plymouth and Jeeps and the tribunal is right when it has found that it still needed a field representative to look after servicing of sold cars at outside stations.
On the other hand, the evidence of the respondent clearly shows that he supported the case of the 7 apprentices and that provoked the appellant to take the step of terminating his services.
The process of finding fault with his work appears to have commenced after the appellant disapproved of the respondent 's conduct in that behalf.
We are, therefore, satisfied that the tribunal was right in coming to the conclusion that the dismissal of the respondent is not sup ported on any reasonable ground, and in fact is due to the appellant 's indignation at the conduct of the respondent in the main industrial dispute between the appellant and its 7 employees.
If that be the true position the industrial tribunal was justified in treating the dismissal of the respondent as mala fide.
It has, however, been urged before us by the appellant that the complaint made by the respondent under section 33A is not competent.
It is common ground that a complaint can be made under section 33A only if section 33 has been contravened, and so the appellant 's argument is that B. 33(1)(a) is inapplicable because the respondent 355 was not a workman concerned in the main industrial dispute, and as such his dismissal cannot be said to contravene the provisions of the said section.
Indeed the principal point urged before us by the appellant is in regard to the construction of section 33(1)(a) of the Act.
Was the respondent a workman concerned with the main industrial dispute ? That is the point of law raised for our decision and its decision depends upon the construction of the relevant words used in section 33(1)(a).
Section 33(1)(a) as it stood prior to the amendment of 1956 provided, inter alia, that during the pendency of any proceedings before a tribunal, no employer shall alter to the prejudice of the workmen concerned in the said dispute the conditions of service applicable to them immediately before the commencement of the said proceedings, save with the express permission in writing of the tribunal.
Section 33 has been modified from time to time and its scope has been finally limited by the amendment made by Act 36 of 1956.
With the said amendments we are, however, not con cerned.
The, expression " the workmen concerned in such dispute " which occurred in the earlier section has not been modified and the construction which we would place upon the said expression under the unamended section would govern the construction of the said expression even in the amended section.
What does the expression " workmen concerned in such dispute " mean ? The appellant contends that the main dispute was in regard to the discharge of 7 apprentices employed by the appellant, and it is only the said 7 apprentices who were concerned in the said dispute.
The respondent was not concerned in the said dispute, and so the termination of his services cannot attract the provisions of section 33(1)(a).
Prima facie the argument that " workmen concerned in such dispute " should be limited to the workmen directly or actually concerned in such dispute appears plausible, but if we examine the scheme of the Act and the effect of its material and relevant provisions this limited construction of the clause in question cannot be accepted, 356 Let us first consider the definition of the industrial dispute prescribed by section 2(k).
It means, inter alia, any dispute or difference between employers and workmen which is connected with the employment or non employment, or the terms of employment, or with the conditions of labour, of any person.
It is well settled that before any dispute between the employer and his employee or employees can be said to be an industrial dispute under the Act it must be sponsored by a number of workmen or by a union representing them.
It is not necessary that the number of workmen of the union that sponsors the dispute should represent the majority of workmen.
Even so, an individual dispute cannot become an industrial dispute at the instance of the aggrieved individual himself It must be a dispute between the employer on the one hand and his employees acting collectively on the other.
This essential nature of an industrial dispute must be borne in mind in interpreting the material clause in section 33(1)(a).
Section 18 of the Act is also relevant for this purpose.
It deals with persons on whom awards are binding.
Section 18(3) provides, inter alia, that an award of a tribunal which has become enforceable shall be binding on (a) all parties to the industrial dispute, (b) all other parties summoned to appear in the proceedings as parties to the dispute unless the tribunal records the opinion that they were so summoned without proper cause, and (c) where a party referred to in cl.
(a) or cl.
(b) is composed of workmen all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute, and all persons who subsequently become employed in that establishment or part.
It is thus clear that the award passed in an industrial dispute raised even by a minority union binds not only the parties to the dispute but all employees in the establishment or part of the establishment, as the case may be, at the date of the dispute and even those who may join the establishment or part subsequently.
Thus the circle of persons bound by the award is very much wider than the parties to the industrial dispute.
This aspect of the 357 matter is also relevant in construing the material words in section 33(1)(a).
In this connection the object of section 33 must also be borne in mind.
It is plain that by enacting section 33 the Legislature wanted to ensure a fair and satisfactory enquiry of the industrial dispute undisturbed by any action on the part of the employer or the employee which would create fresh cause for disharmony between them.
During the pendency of an industrial dispute status quo should be maintained and no further element of discord should be introduced.
That being the object of section 33 the narrow construction of the material words used in section 33(1)(a) would tend to defeat the said object.
If it is held that the workmen concerned in the dispute are only those who are directly or immediately concerned with the dispute it would leave liberty to the employer to alter the terms and conditions of the remaining workmen and that would inevitably introduce further complications which it is intended to avoid.
Similarly it would leave liberty to the other employees to raise disputes and that again is not desirable.
That is why the main object underlying section 33 is inconsistent with the narrow construction sought to be placed by the appellant on the material words used in section 33(1)(a).
Even as a matter of construction pure and simple there is no justification for assuming that the workmen concerned in such disputes must be workmen directly or immediately concerned in the said disputes.
We do ' not see any justification for adding the further qualification of direct or immediate concern which the narrow construction necessarily assumes.
In dealing with the question as to which workmen can be said to be concerned in an industrial dispute we have to bear in mind the essential condition for the raising of an industrial dispute itself, and if an industrial dispute can be raised only by a group of workmen acting on their own or through their union then it would be difficult to resist the conclusion that all those who sponsored the dispute are concerned in it.
As we have already pointed out this construction is harmonious with the definition prescribed by section 2(s) and with the provisions contained in section 18 of the Act.
Therefore, 46 358 we are not prepared to hold that the expression " workmen concerned in such dispute " can be limited only to such of the workmen who are directly concerned with the dispute in question.
In our opinion, that expression includes all workmen on whose behalf the dispute has been raised as well as those who would be bound by the award which may be made in the said dispute.
It appears that the construction of the relevant clause had given rise to a divergence of opinion in industrial courts, but it may be stated that on the whole the consensus of opinion appears to be in favour of the construction which we are putting on the said clause.
In Eastern Plywood Manufacturing Co. Ltd. vs Eastern Plywood Manufacturing Workers ' Union (1) the appellate tribunal has referred to the said conflict of views and has.
held that the narrow construction of the clause is not justified.
The High Court of Madras appears to have taken the same view (Vide: Newtone Studios Ltd. vs Ethirajulu (T.R.) (2) ).
On the other hand, in The New Jehangir Vakil Mills Ltd., Bhavnagar vs N.L. Vyas & Ors.
(3), the Bombay High Court has adopted the narrow construction ; but for reasons which we have already explained we must hold that the Bombay view is not justified on a fair and reasonable construction of the relevant clause.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed,.
| The first appellant was the Managing Director and the second appellant a Director and technical expert of a cloth dyeing concern known as Parikh Dyeing and Printing Mills Ltd. The company entered into a contract with the Textile Commissioner undertaking to dye a large quantity of cloth which was supplied to the company for that purpose.
In pursuance of the contract certain quantity of cloth was dyed and delivered to the Textile Commissioner by the company but it failed to dye and deliver the balance of cloth which remained in its possession and was not returned to the Textile Commissioner in spite of repeated demands.
Ultimately the two appellants were prosecuted for criminal breach of trust under section 409 read with section 34 of the Indian Penal Code and were convicted for the same in a trial by jury.
320 In appeal the High Court reviewed the evidence on the ground of misdirection to the jury but found that the two appellants were liable to account for the cloth over which they had dominion, and having failed to do so each of them was guilty of the offence of criminal breach of trust.
The High Court refused to accept the appellants ' plea that the cloth was old and was eaten up by white ants and moths.
On appeal by the appellants by special leave: Held, that to establish a charge of criminal breach of trust, the prosecution was not bound to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he had dominion.
The principal ingredient of the offence of criminal breach of trust being dishonest misappropriation the mere failure of the accused to account for the property entrusted to him might not be the foundation of his conviction in all cases but where he was unable to account and rendered an explanation for his failure which was untrue, an inference of misappropriation with dishonest intent might readily be made.
The essence of liability under section 34 of the Indian Penal Code is the existence of a common intention animating the offenders and the participation in a criminal act in furtherance of the common intention.
The physical presence at the scene of offence 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 in every case.
Barendra Kumar Ghose vs The King Emperor, (1929) L.R. 52 I.A. 40, followed.
Shreekantiah Ramayya Munipalli vs The State of Bombay, ; , explained and distinguished.
|
Civil Appeal No. 497 of 1971.
Appeal by certificate from the Judgment and Decree dated 2.5.1969 of the High Court of Madhya Pradesh, (Indore Bench) in Civil First Appeal No. 91 of 1962.
V.A. Bobde, S.D. Mudaliar and A.G. Ratnaparkhi for the appellants.
G.L. Sanghi, D.N. Misra and section Sukumaran for the respondents.
The Judgment of the Court was delivered by SEN, J.
This appeal on certificate is directed against a judgment and decree of the Madhya Pradesh High Court dated May 2, 1969 substantially reversing the judgment and decree passed by the third Additional District Judge, Indore dated June 18/19,1962 487 and dismissing the plaintiffs ' suit for partition and separate possession of their half share of the suit properties detailed in Schedule 'A ' appended to the plaint except with respect to a house and the agricultural lands at Ujjain.
During the course of the hearing the parties have come to a settlement and the terms of the compromise have been recorded.
Nevertheless, the correctness of the judgment delivered by the High Court is open to serious doubt and as it involves a question of general importance, we proceed to record our views.
The facts giving rise to the appeal are as follows.
The report of the Inam Commissioner discloses that in 1837 the late Maharaja Harihar Rao Holkar made a grant of an inam of a garden known as Rambag in Kasba Indore admeasuring 15.62 acres to Abaji Ballal, the priest of the Holkar family on his representation that he was in service of the Huzur Darbar for a long period but had no garden at Kasba Indore and was therefore finding it difficult in getting tulsi leaves and flowers for making offerings to the deities.
The grant of inam to him was on Putra Pautradi Vansh Parampara condition by way of parvarish.
It appears from the report that Abaji Ballai had only one son named Laxman and he also had only one son named Raghunath Rao.
After the death of Abaji Ballal be was succeeded by Laxman.
It appears that Laxman represented in the year 1886 that he was entitled to hold as inam an area of 15.62 acres in Kasba Indore while the land in his possession was only 5.91 acres, the remaining area having been acquired by the Durbar and prayed for a grant of an area of 9.72 acres in exchange.
An inquiry was thereupon held and the claim was found to be true.
By Durbar Order No. 9 dated December 14, 1888 the inamdar was given 9.72 acres of land in Mauja Palashiya Hana.
It also appears that the family built residential houses at Indore presumably out of the income of the inam and also acquired immovable properties at Ujjain consisting of a house and some agricultural lands.
After the death of Laxman Rao, his son Raghunath Rao was recognized to be the inamdar.
The common ancestor Raghunath Rao had three sons, Madhav Rao, Sadashiv Rao and Gopal Rao.
Of these, Madhav Rao and Sadashiv Rao had predeceased their father Raghunath Rao.
Madhav Rao died without leaving an heir while Sadashiv 488 Rao left a son Purushottam Rao.
The third son Gopal Rao disappeared about an year before the death of his father Raghunath Rao and his whereabouts were not known till the news of his death in 1932 at the Secunderabad was received, after the death of Raghunath Rao in 1928.
On the death of Raghunath Rao, the last Purushottam Rao being the sole survivor of the eldest male line of holder became the inamdar and also the karta of the joint Hindu family.
The suit out of which this appeal arises was instituted by the three appellants Anant, Govind and their mother Smt.
Laxmi Bai being the legal heirs and successors of Gopal Rao, as plaintiffs on December 12, 1955 for partition and separate possession of their half share in the joint family property described in Schedule 'A ' appended to the plaint against respondents 1 and 2 Purushottam Rao and his mother Smt.
Rama Bai being defendants 1 and 2, impleading Krishna Rao, the eldest son of Gopal Rao as defendant 3 because he failed to join them as a plaintiff in the suit.
The case of the plaintiffs was that defendant No. 1 Purushottam Rao in his capacity as the karta of the joint Hindu family was in possession and management of the joint family property, including the inam lands at Kasba Indore and Mauja Palashiya Hana.
The plaintiffs ' claim was contested by defendants 1 and 2 Purushottam Rao and Smt.
Rama Bai.
They pleaded inter alia that the plaintiffs ' predecessor in interest Gopal Rao had separated from the family by taking his share in the year 1917 18 and therefore the plaintiffs had no kind of right or title in the suit properties that the inam lands and the properties acquired from out of the inam being impartible in nature, the succession to which was governed by the rule of lineal primogeniture, the properties exclusively belonged to defendant No. 1 Purushottam Rao; and that the conferral of bhumiswami rights on respondent 1 under section 158(1)(b) of the Madhya Pradesh Land Revenue Code, 1959 made the suit lands his separate and exclusive property and it was not part of the joint estate of the undivided family.
Incidentally, the Madhya Pradesh Land Revenue Code, 1959 was brought into force w.e.f. October 1, 1959 which had the effect of changing the nature of the tenure.
The point in controversy in this appeal is now limited to the 489 inam lands and the houses and other properties built from out of the income of the inam lands at Kasba Indore and Mauja Palashiya Hana.
The learned Additional District Judge held that the inam lands together with the properties acquired from the income of the inam were ancestral impartible estate since the same had devolved by survivorship by the rule of lineal primogeniture and therefore constituted joint family property and that the rule of impartibility and the special mode of succession by the rule of lineal primogeniture were nothing but incidents of the inam which stood extinguished by section 158(1)(b) of the Code by virtue of which the inam lands became bhumiswami, the succession to which was governed by the personal law of the parties.
The learned Additional District Judge accordingly held that the inam lands at Kasba Indore and Mauja Palashiya Hana constituted joint family property of the parties and decreed the plaintiffs ' claim for partition and separate possession to the extent of their half share in the properties described in Schedule 'A ' to the plaint and to mesne profits thereof.
On appeal, the High Court reversed the judgment of the learned Additional District Judge with regard to the inam lands and the houses and other property acquired at Indore out of the income of the inam holding that they constituted a special grant regulated by the Jagir Manual of the Holkar State.
According to the High Court, the plaintiffs who were the junior members of the family had no kind of right or title to the inam lands except perhaps the right of maintenance and that too up to a certain degree and subject to its determination by the State.
Accordingly the High Court held that defendant No. 1 Purushottam Rao, the inamdar for the time being, became the bhumiswami of the suit lands under section 158(1) (b) of the Code which constituted his separate property.
The High Court however maintained the decree of the learned Additional District Judge with regard to partition and separation of the plaintiffs ' share of immovable properties at Ujjain.
The short and narrow question involved in this appeal is whether the inam lands which became bhumiswami lands under section 158(1)(b) of the Code were the self acquired property of the inamdar and defendant No. 1 Purushottam Rao was entitled to remain in full and exclusive possession and enjoyment thereof, or the conferral of bhumiswami rights in respect of such inam 490 lands on him must enure to the benefit of the members of the joint Hindu family and therefore the bhumiswami lands were liable to be partitioned like any other coparcenary property.
It is common ground that the inam lands were impartible, the succession to which was governed by the rule of lineal primogeniture.
That must be so because the Jagir Manual of the Holkar State by r. 134 provides that the rule which refers to jagirs will apply to inams also except to the extent modified by any Darbar Order or circular.
Chapter II, r. 2 provides: "2.
A Jagir grant shall be indivisible and impartible property.
" R. 3 provides for the rule of lineal primogeniture and it follows: "3.
Every Jagir grant, which is not a purely lifegrant, shall descend in the order of primogeniture i.e. to the eldest male line of the last holder e.g.
If a grantee has descendants as shown in the following pedigree table: A (Grantee) | | B C D | | | | | | G H I | | | | J E F | | | N | | K L M The Jagir will after A 's death descend to B.
After B it will descend to E to K." Proviso to r.3 preserves the right of maintenance of the junior members of the family and it reads: "Provided that the right of the members of the 491 junior branches, claiming descent from the original grantee to a share in the income of the Jagir or maintenance according to the custom of the family or orders of the Government, shall not be affected thereby." Although the original sanad granted to Abaji Ballal in 1837 is not forthcoming, the report of the Inam Commissioner discloses that the grant of inam to him was on Putra Pautradi Vanash Parampara condition by way of parvarish i.e. maintenance.
Thus the grant of the inam lands was for maintenance of the members of the joint family and was also heritable.
There is ample evidence on record to show that the inam lands although impartible were always treated by members of the family as part of the joint family properties and the succession to the inam was by the rule of survivorship as modified by the rule of lineal primogeniture.
It is also clear that the junior members were in joint enjoyment of the inam lands and that was because the proviso to r. 3 expressly recognized their rights of maintenance.
Further, the evidence shows that the properties acquired by the inamdar for the time being from out of the income of the inam such as the two houses at Indore and other properties were always dealt with as part of the joint family property.
There is on record, an application for mutation made by defendant No. 1 Purushottam Rao on December 15, 1928 (exhibit
P 6) wherein he had stated that his grand father had died on August 8, 1928 and therefore he prayed for substitution of the names of the legal heirs in the inam register, the material portion of which reads: "I am his son 's son i.e. his grandson and as such his heir.
(A) Besides me the sons of my uncle i.e. (1) Krishna Rao (2) Anant Rao and (3) Govind Rao are also his heirs, Besides us no other person is his heir (A).
" The prayer was that the names of all these heirs be substituted.
There is also an affidavit of Purushottam Rao dated December 7, 1928 (exhibit P 5) regarding the death of his grand father Raghunath Rao and it mentions that he had three sons viz, Madhav Rao, Sadashiv Rao and Gopal Rao.
It was averred that Madhav 492 Rao who was the eldest had already expired leaving no issue and his wife had also died and that the whereabouts of Gopal Rao were not known since 3 1/2 or 4 years.
It was stated that Gopal Rao had three sons viz. Krishna, Anant and Govind and all the three of them were minors.
It then recites: "All the three minor sons of Gopal Rao were living jointly with me." Purushottam Rao examined as DW 24 has stated that the whereabouts of Gopal Rao were not known when his grand father Raghunath Rao was operated upon resulting in his death in the hospital.
When confronted with portion marked 'AA ' in exhibit P 6 he unequivocally admitted that he could not deny the statement made therein.
He however went on to assent that the expenditure incurred by him on the plaintiffs by way of maintenance was not incurred by reason of their being the members of the joint family but because they had no resources of their own and it was necessary to give them maintenance allowance under the Inam Rules.
It is quite apparent from the course of dealings that the inam lands at Kasba Indore and Mauja Palashiya Hana and other inam properties in the hands of the common ancestor Raghunath Rao which devolved upon defendant No. 1 Purushottam Rao were nothing but an ancestral impartible estate.
Under the scheme of the Code there was a drastic change brought about not only in the nature of the tenure of inam lands but also in the mode of succession.
S.158(1)(b) of the code provides: "158.
Bhumiswami (1) Every person who at the time of coming into force of this Code, belongs to any of the following classes shall be called a Bhumiswami and shall have all the rights and be subject to all the liabilities conferred or imposed upon a Bhumiswami by or under this code, namely: (a) ** ** ** ** ** (b) every person in respect of land held by him in the Madhya Bharat region as a Pakka Tenant or as a Muafidar, Inamdar, or Concessional Holder, as defined in the 493 Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007(66 of 1950)"; The plain language of s.158(1)(b) effected a complete extinction of the inam rights followed by simultaneous conferral of bhumiswami rights.
Every person, in respect of the land hold by him in the Madhya Bharat region as an inamdar, at the time of the coming into force of the code, became a bhumiswami thereof, and acquired all the rights and became subject to all the liabilities of a bhumiswami under the Code.
The words "in respect of land held by him" appearing in s.158(1)(b) refer to the status and character of the tenure holder in relation to the holding on the appointed day.
The accrual of the status of bhumiswami by such person was automatic and he acquired all the rights and became subject to all the liabilities conferred or imposed upon a bhumiswami by or under the Code.
As a necessary corollary, he became subject to the provisions of s.164.
S.164 provides that subject to his personal law, the interests of a Bhumiswami shall, on his death, pass by inheritance, survivorship or bequest, as the case may be.
On a combined reading of ss.158(1)(b) and 164, the legal consequence that ensued was that the incident of impartibility and the special mode of succession by the rule of primogeniture which were terms of the grant of inam lands under the Jagir Manual of the Holkar State, stood extinguished.
After the conferment of bhumiswami rights, the incidents and character of the tenure became transformed and the restrictions placed thereon disappeared, and such lands became capable of being held in joint ownership like any other coparcenary property.
It must logically follow that the conferral of bhumiswami rights on the holder for the time being under s.158(1)(b) of the Code in respect of ancestral inam lands must necessarily enure to the benefit of all the members of the joint family.
In our judgment, the view expressed by the High Court that the inam lands and the two houses constructed at Indore and other properties acquired from out of the income of the inam exclusively belonged to defendant No. 1 Purshottam Rao, the holder for the time being at the time when the Code was brought into force, can hardly be sustained.
Since the decision of the Privy Council in Shiba Prasad Singh vs Rani Prayag Kumari Debi and ors(1).
it must taken as well settled that an estate which is impartible by custom cannot be said to be the separate or exclusive 494 property of the holder of the estate.
Where the property is ancestral and the holder has succeeded to it, it would be part of the joint estate of the undivided Hindu family.
In the following illuminating passage Sir Dinshaw Mulla observes: "The keynote of the whole position, in their Lord ships view, is to be found in the following passage in the judgment in the Tipperah(1) case: "Where a custom is proved to exist, it supersedes the general law, which however, still regulates all beyond the custom." "Impartibility is essentially a creature of custom.
In the case of ordinary joint family property, the members of the family have (1) the right of partition; (2) the right to restrain alienations by the head of the family except for necessity, (3) the right of maintenance and (4) the right of survivorship.
The first of these rights cannot exist in the case of an impartible edate, though ancestral from the very nature of the estate.
The second is incompatible with the custom of impartibility as laid down in Sartaj Kumari 's case(2) and the first Pittapur case(3) and so also the third as held in the second Pittapur case(4).
To this extent the general law of the Mitakshara has been superseded by custom, and the impartible estate though ancestral is clothed with the incidents of self acquired and separate property.
But the right of survivorship is not inconsistent with the custom of impartibility.
This right, therefore, still remains and this is what was held in Baijanth 's case(6).
To this extent the estate still retains its character of joint family property, and its devolution is governed by the general Mitakshara law applicable to such property.
Though the other rights which a coparcener acquired by birth in joint family property no longer exist, the birthright of the senior member to take by survivorship still remains, Nor is this right a mere succession is similar to that of a reversioner succeeding on the death 495 of a Hindu widow to her husband 's estate.
It is a right which is capable of being renounced and surrendered.
Such being their Lordship 's view, it follows that in order to establish that a family governed by the Mitakshara in which there is an impartible estate has ceased to be joint it is necessary to prove an intention, express or implied, on the part of the junior members of the family to renounce their right of succession to the estate.
" The incidents of impartible estate laid down in Shiba Prasad Singh 's case and the law there stated have been reaffirmed in the subsequent decisions of the Privy Council and of this Court.
It is not necessary to refer to them as they have all been dealt with in a recent judgment of this Court in Nagesh Bisto Desai vs Khando Tirmal Desai(1).
Impartibility is essentially a creature of custom.
Here it is a term of the grant.
The junior members of a joint family in the case of ancient impartible joint family estate take no right in the property by birth and therefore have no right of partition having regard to the very nature of the estate that it is impartible.
The only incidence for joint property which still attaches to the joint family property is the right of survivorship which, of course, is not inconsistent with the custom of impartibility.
The incident of impartibility attached to inam lands no longer exists by reason of s.158(1)(b) of the Code aa they have now become bhumiswami lands.
The right of junior members of the family for maintenance is governed by custom and not based upon any joint right or interest in the property as owners.
In case of inams in the Holkar State such right was again a condition of the grant.
In view of the authorities cited in Nagesh Bisto Desai 's case, supra, it must be held that the inam lands though impartible were nevertheless joint family properties of the parties.
The impartibility of the tenure governed by the Jagir Manual of the Holkar State and the rule of lineal primogeniture governed by the Jagir Manual, Chapter II, rr.2 and 3 did not per se destroy its nature as joint family property or render it the separate property of the last holder so as to destroy the right of survivorship; the estate retained its character of joint family property and its devolution was governed by the rule of lineal primogeniture.
To establish that a family governed by the Mitakshara in which there is an impartible estate has ceased to be joint, it is necessary to prove an intention, express or implied on the part of the junior members of the family to renounce their succession to the estate.
496 The learned Additional District Judge during the course of his judgment has held on consideration of the evidence that there was no partition in the joint family as alleged by defendants 1 and 2 and that finding has not been reversed by the High Court in appeal.
The learned Additional District Judge has referred to several well known decisions of the Privy Council dealing with the incidents of an impartible estate, including that of Shiba Prasad Singh 's case, supra, but the High Court surprisingly did not refer to any one of them.
He has also particularly referred to the nature and incidence of a protected thekedari under s.102 of the C.P. Land Revenue Act, 1917 and relied upon the decision of the Privy Council in Thakur Bhagwan Singh vs Darbar Singh '(1) and also to several decisions of the Nagpur and Madhya Pradesh High Courts and in particular to Mani Ram vs Ram Dayal(2) and Smt.
Pilanoni Janakram vs Anandsingh Sakharam(3) where a similar question arose.
He further felt that the principles laid down by the Bombay High Court in Lingappa Rayappa Desai vs Kadappa Bapurao Desai(4) dealing with the Bombay Hereditary Offices Act, 1874 holding that watan lands stand in the same footing as ancestral impartible estate in a joint Hindu family passing by survivorship from one line to another according to primogeniture, must govern the case.
The High Court declined to follow the long line of decisions of the Nagpur and Madhya Pradesh High Courts dealing with the protected the kedari tenure under section 109 of the C.P. Land Revenue Code, 1917 saying that they were "inapplicable" to the case of jagir and inam properties which at no time were considered to be joint family properties but constituted a 'special kind of grant ' regulated by the terms of the grant or the rules governing the same.
It also declined to follow the decision of the Bombay High Court in Lingappa 's case, supra, because it did not "appeal" to the Court as it distinguished the decision of the Madras High Court in Sri Pavu Janardhana Krishna Ranga Rao Bahadur vs The State of Madras "for reasons which did not appear to be sound".
It is difficult to sustain both on principle and precedent the view of the High Court that inam lands being impartible in nature, the succession to which was governed by the rule of lineal primogeniture, the two houses constructed at Indore and other properties acquired 497 from out of the income of the inam exclusively belonged to defendant No. 1 Purushottam Rao, the holder for the time being and constituted his separate property.
In the former State of Madhya Pradesh, the existence of such and impartible tenure was not unknown.
The nature and incidence of a protected thekedari tenure under s.109 of the C.P. Land Revenue Act, 1977 came up for consideration before the Privy Council in Bhagwan Singh 's case, supra.
The Privy Council observed that though the tenure of a protected thekedari was impartible and descended by primogeniture and was made inalienable, and it was provided that only one person at a time shall be entitled to succeed to such status, at the same time: "The Act recognises that leasehold interests, though impartible, may nevertheless be joint family property of the thekedar and his family.
" This was in consonance with the view expressed by Sir Bipin Krishna Bose, Addl.
J.C. in Fagwa vs Budhram(1) that the grant of a protected thekedari tenure to the eldest male member of a family did not make the property his separate property.
In Narayan Prasad vs Laxman Prasad(2) J. Sen, J. hold that where protected thekedari rights in respect of a village were acquired out of joint family funds, the village would be joint family property and a member of the joint family would be entitled to a share in the theka and to be maintained out of it.
In Chandanlal vs Pushkarraj(3), Kaushalendra Rao, J. speaking for the Court observed: "It has always been the accepted view that the grant of protected status to a thekedar did not make the theka the exclusive property of the person on whom the protected status is conferred." The learned Judge then referred to the decision of the Privy Council in Bhagwan Singh 's case and rejected the contention that the conferral of the protected status on one of the members destroyed the pre existing rights of the other members of the family.
In Sukhanboi & Anr.
vs Ramsharan Doma Sao and Ors(4).
Mudholkar, J. tried to draw a distinction between the present tights and future rights of the members of the family and held that while the junior members have future or contingent rights such as 498 a right of survivorship, they have, apart from custom or relationship, no present rights as, for instance, a right to restrain alienation or to claim maintenance.
The decision of Mudholkar J. in Sukhambai 's case taking a narrow and restricted view of the rights of the members of a joint Hindu family to participate in the present enjoyment and management of a protected thekedari tenure was however reversed on appeal by B.P. Sinha, C.J. and Hidayatullah, J. in Shiv Prasad Sao vs Sukhan Bai (Letters Patent Appeal No. 19 of 1449 decided on December, 30, 1954) observing that if there was a family arrangement for the joint enjoyment of the theka in the past, it would bind not only the protected thekedar for the time being but the whole family and so long as the family arrangement is not rescinded by the family itself, it must continue.
The learned Judges considering the implications of s.109(1)(a) of the Act observed: "The conferral of protected status does not disturb the rights of the members inter se though they may not be recognised by the State.
As between members the rights of any particular member under the arrangement must continue.
" As regards the validity of arrangements made by the co sharers in a theka dividing the property between themselves for beneficial enjoyment of the thekedar, they said: "From the year 1881 when all existing arrangements were to continue, down to this day when private partitions and family arrangements have been recognised as binding on the family, there is an underline/current of recognition of joint family status.
Most of these villages, when they were acquired, belonged, to a joint family and the intention in conferring protection was not to disturb arrangements but to recognise one member as a Thekedar and to restrain transfers and impose impartibility and primogeniture.
Even though the Act of 1917 enacted about private partitions and arrangements, the law was merely declaratory of family custom as is apparent from a perusal of the various Settlements Reports.
" The learned Judges then added a word of caution: "Under the C.P. Land Revenue Act, a protected status could be conferred not only upon Hindus but also upon Muslims and others.
The rules of impartible 499 estates as understood in Hindu law cannot, therefore, be made applicable and the analogy is apt to be misleading." Similar question arose in Mani Ram vs Ram Dayal, supra, and Smt, Pilanoni Janakram vs Anandsingh Sakharam, supra.
The decision in Mani Ram 's case is of some importance.
Here, T.C. Shrivastava, J. had to consider the impact of s.39(1) of the M.P. Abolition of Proprietary Rights (Estates Mahals, Alienated Lands) Act, 1951 which provided that where the proprietary rights held by a protected thekedar vest in the State under section 3, the Deputy Commissioner may reserve to such proprietor the rights of an occupancy tenant in the whole or part of the home farm land and shall determine the rent thereon.
section 39(2) there of provided that any person becoming an occupancy tenant under sub s(1) shall be a tenant of the State.
The contention on behalf of the protected thekedar who brought the suit was that by virtue of such settlement he became the full and exclusive tenant thereof.
The learned Judge after referring to the decision of the Privy Council in Bhagwan Singh 's case, supra, and the aforesaid decision of the High Court in Shiv Prasad Sao 's case, supra, reiterated that although section 109(1)(a) of the C.P. Land Revenue Act, 1917 provided that protected thekedari rights would descend by the rule of primogeniture and the theka was impartible in nature, the rights of the other members of the joint Hindu family in the theka continued though they could not obtain a partition of the lands in the theka or claim to be in possession of any lands pertaining to the theka.
He referred to the observations made in Shiv Prasad Sao 's case set out above and observed that it was open to the protected thekedar to come to an arrangement with his co sharers to divide the lands attached to the theka and such a family arrangement would be binding on the co sharers.
Repelling the contention based on section 39 (1) of that Act he held that after the abolition of the proprietary rights in 1950, the rights of protected thekedars had completely disappeared and the statutory bar of impartibility and inalienability removed and therefore the lands which were joint family lands subject to statutory restrictions assumed the character of normal joint family property free from the statutory restrictions.
In Smt.
Pilanoni 's case, supra, K.L. Pandey, J. held that although under cl.(5) of the Sarangarh State Wazib ul erz there was no right of partition given to a thekedar gaontia, but it permitted joint and divided management of the bhogra lands attached to the theka 500 among the members of the family and though the State had reserved to itself under cl.(15) the right to induct a new thekedar who became entitled to the entire bhogra lands in the village, the effect of the two provisions was that the State could not be bound by a partition effected among the members of the family by way or a family arrangement but it would be binding on the members or the family, including the new thekedar who may have succeeded to the status of a thekedar gaontia.
As to the settlement of such bhogra lands with the thekedar in raiyati rights under s.54(1) of the M.P. Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1951, the Court held that such settlement must enure to the benefit of the bhogra holders under a family arrangement since the lands continued to be impressed with the character of being joint family property.
The point in controversy really stands concluded by the recent decision of this Court in Nagesh Bisto Desai 's case, supra.
There, the question was whether the plaintiff being the holder for the time being of the Kundgol Deshgat estate which was an impartible estate, the succession to which was governed by the rule of lineal primogeniture, was entitled to remain in full and exclusive possession and enjoyment of the watan lands resumed under section 3(4) of the Bombay Pargana & Kulkarni Watans (Abolition) Act, 1950 and section 4 of the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 which had been regranted to him as an occupant thereof under sections 4 and 7 of the Acts respectively.
It was held that the plaintiff 's contention ran counter to the scheme of the Bombay Hereditary Offices Act, 1874 and was against settled legal principles, and that the Watans Act was designed to preserve the pre existing rights of the members of the joint Hindu family.
The submission based on the alleged impartibility of watan property and the applicability of the rule of lineal primogeniture regulating succession to the estate was rejected on the ground that it could not prevail as these being nothing more than the incidents of the watans stood abrogated by section 3(4) of the 1950 Act and section 4 of the 1955 Act.
It was held that the effect of the non obstante clause in section 3(4) of the 1950 Act was to bring about a change in the tenure or character of the holding as watan lands but did not affect the other legal incidents of the property under the personal law and if the property belonged to the joint Hindu family, then the normal rights of the members 501 of the family to ask for partition were not in any way affected and therefore the re grant of the lands to the watandar under section 4(1) of the 1959 Act and section 7 of the 1955 Act must ensure to the benefit of the entire joint Hindu family.
That precisely is the position here.
Although under the Bombay Pargana & Kulkarni Watans (Abolition) Act, 1950 and the Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955 there was at first an abolition of watans and resumption of watan lands, followed by re grant of such lands to the watandar as an occupant under the Bombay Land Revenue Code, 1879, that hardly makes a difference in principle.
The only difference is that under section 158(1)(b) of the M.P. Land Revenue Code, there was a simultaneous extinction of the inams resulting in conferral of bhumiswami rights on every person holding inam lands on the date on which the Code was brought into force.
The result therefore is that the appeal must succeed and is allowed.
The judgment and decree passed by the High Court are reversed and those of the learned Additional District Judge decreeing the plaintiff 's suit for partition and separate possession of their half share in the properties described in Schedule 'A ' to the plaint are restored.
The decree shall be drawn in terms of the compromise arrived at.
There shall be no order as to costs.
N.V.K. Appeal allowed.
| The respondent along with three others were accused of having committed offences punishable under sections 3,5 and 9 of the Official Secrets Act, 1923 read with section 120 B of the Indian Penal Code and therefore committed to the Court of Sessions for the said offences which are of a serious nature.
During the investigation, the respondent made an application for bail before the Additional Sessions Judge, New Delhi and it was rejected in January, 1984.
Then again he made another application for bail before the Sessions Court.
Before the said application could be taken up he made an application under section 482 of the Criminal Procedure Code before the High Court of Delhi for bail.
The learned Judge of the High Court who heard the bail application went into the merits of the case and after holding that the material before the Court was insufficient to sustain the conviction of the respondent proceeded to enlarge him on bail subject to his furnishing a Personal bond in the sum of Rs. 5,000/ with one surety in the like amount.
However, the very same Learned Judge had dismissed earlier the bail application of Jasbir Singh who was the employee of the respondent.
Aggrieved by the order of the High Court enlarging the respondent on bail, the prosecution has filed this special leave petition for revoking the said order of bail: Allowing the petition, the Court.
^ HELD: 1:1.
The Court before granting bail in cases involving non bailable offences particularly where the trial has not yet commenced should 994 take into consideration various matters such as the nature and seriousness of the offence, the character of the evidence, circumstance which are peculiar to the accused, a reasonable possibility of the presence of the accused not being secured at the trial, reasonable apprehension of witnesses being tampered with, the larger undressed of the public or the State and similar other considerations.
Further, the Court should exercise a greater degree of care in enlarging on bail an accused who is charged with the offence punishable under section 3 of the Official Secrets Act when it relates to military affairs.
Here the offence punishable under section 3 of the Official Secrets Act, 1923 with which the respondent is charged relates to military affairs and it is punishable with imprisonment which may extend to fourteen years.
The State vs Captain Jagjit Singh, ; Gurcharan Singh & Ors vs State (Delhi Admn.), ; ; Gudikanti Narsaimhulu & Ors.
vs Public Prosecutor, High Court of Andhra Pradesh, [1978] 2 S.C.R. 361, referred to [998C D; 998A; 997H] 1:2.
The decision of the High Court that the material collected by the prosecution and the evidence to be adduced at the trial would not be sufficient to sustain a conviction appears to be a premature one in the circumstances of this case.
The allegations made by the prosecution which no doubt have still to be established at the trial suggest that the respondent and the persons accused alongwith him are persons of easy conscience in so far as the interests and security of the country is concerned.
The current situation in the country is such that it can easily be exploited by unscrupulous men to their own or to some foreign power 's advantage.
These aspects of the case do not appear to have been considered by the High Court.
Further, while dismissing the bail application of Jasbir Singh on April 24, 1984, the learned Judge of the High Court had relied on the decision of this Court in Captain Jagjit Singh 's case, he has not even referred to that decision while granting bail to the respondent on May 3, 1984.
Some of the observations made by the High Court against the sustainability of the case of criminal conspiracy alleged by the prosecution at this stage were not called for.
The circumstance of this case are such that the question whether the case of criminal conspiracy had been made out or not should have been left to be decided by the trial court at the end of the trial on a consideration of the entire evidence adduced in the case.
Therefore, the High Court should not have enlarged the respondent on bail in the larger interest of the State.
[998E; 999B F]
|
Appeal No. 766 of 1964.
Appeal by special leave from the judgment and order, dated September 19, 1963 of the Allahabad High Court in Special Appeal No. 268 of 1963.
section P. Sinha and Shaukat Husain, for the appellant.
Niren De, Additional Solicitor General, K. C. Chawla and R. H. Dhebar, for the respondent.
The Judgment of the Court was delivered by Satyanarayana Raju, J.
This appeal, by special leave, is against the judgment of a Division Bench of the Allahabad High Court which affirmed the judgment of a Single Judge of that Court.
The facts giving rise to this appeal may be shortly stated as follows.
The appellant had been in the service of North Eastern Rail way holding the substantive post of Travelling Ticket Examiner.
The post of Travelling Ticket Inspector, which is the next higher post, is a selection post.
Selection is made by a Selection Board in accordance with the Promotion and Selection Rules (Non Gazetted) framed under para 158 of the Indian Railway Establishment Code, Volume I (hereinafter referred to as the rules).
Every year, an assessment of the number of vacancies that are likely to occur during that year is made.
The Chief Commercial Superintendent is the appointing authority for the posts of Ticket Inspectors.
In accordance with r. 8(7), eligible staff, up to four times the number of anticipated vacancies, shall be called up for written and viva voce tests.
After the examination and the interview, the Board prepares a panel and promotions are made from the said panel.
In the year 1959, a Selection Board for preparing a panel for the ex Muzaffarpur region was constituted.
There were, during that year, eight existing vacancies which were to be fined up immediately.
In addition, a panel of six was required to be drawn up.
It was also expected that there would be nine more vacancies on account of upgrading of posts but this did not actually materialise.
But, due to an incorrect assessment of the anticipated number of vacancies, 92 persons were called up for examination, whereas 56 persons should have been called up for written and viva voce tests.
There was a written examination on February 22, 1959 and March 31, 1959, and thereafter the Selection Board interviewed 63 the candidates.
As a result of the examination and the viva voce test, the Selection Board prepared a panel of fourteen persons and the appellant was given the twelfth rank in the panel.
He was posted as officiating Travelling Ticket Inspector on or about July 28, 1960.
The final list of persons brought on the panel was published in the Railway Gazette on January 1, 1961 and the appellant was shown at serial No. 13 in that panel.
But a note was appended to the notification stating that the selection of the appellant and five others was provisional.
By a letter, dated September 29, 1961, the Chief Commercial Superintendent, North Eastern Railway, Gorakhpur, under the orders of the General Manager, the prescribed authority, deleted the name of the appellant and five others who were shown at serial numbers 9 to 14 in the panel.
On November 28, 1961, the appellant filed a petition under article 226 of the Constitution for the issue of a writ of certiorari, impugning the validity of the order dated September 29, 1961 in and by which his name had been removed from the panel.
Her contended that the deletion of his name from the panel indefinitely postponed his right of promotion and therefore amounted to a reduction in rank.
The respondents contested the petition.
They averred that the name of the appellant was deleted from the panel in accordance with rules, that he had no subsisting right to the post merely by reason of the fact that his name was included in the panel, that the appellant and five other persons were called up for examination on an incorrect assessment of the number of vacancies.
It was also contended for the respondents that the provisions of article 311 were not attracted.
By judgment, dated March 14, 1963, the learned Single Judge dismissed the writ petition filed by the appellant.
He held that the deletion of the appellant 's name from the panel did not amount to reduction in rank under article 311 and that therefore he was not entitled to the notice prescribed by that article.
The learned Judge also held that the appellant had not established that the decision of the respondent amounted to a violation of any constitutional provision or statutory rule.
The appellant preferred an appeal which was summarily dismissed by a Division Bench.
An application for leave to appeal to this Court was also rejected.
Thereupon, the appellant obtained special leave from this Court.
64 In support of the appeal, it is contended for the appellant by Mr. section P. Sinha, that the deletion of the appellants name from the panel amounted to a reduction in rank and that the order was bad in law for the reason that the appellant was not given an opportunity to explain or defend himself before his name was deleted from the panel.
Now, as has been explained by this Court in Parshotam Lal Dhingra vs The Union of India(1) the expressions "dismissal ', 'removal ' or 'reduction in rank ' are technical words taken from the service rules where they are used, to denote the three major categories of punishments.
The question for determination is whether the deletion of the appellant 's name from the panel amounts to a reduction in rank within the meaning of article 311.
Mention has already been made of the fact that the panel was prepared under the rules.
Rule 8 lays down the procedure to be followed by the Selection Board.
Sub rule (7) of that rule reads : "Eligible staff up to 4 times the number of anticipated vacancies as defined below shall be called up for written and/or viva voce test." Under the above rule, eligible staff up to four times the number of anticipated vacancies should be called for written and viva voce test.
The vacancies to be filled up were 8 and in addition a panel of 6 was required to be drawn up; thus for the 14 persons to be included in the panel, 56 eligible staff were to be called.
On account of an incorrect assessment of the anticipated vacancies, 92 persons were called to take the promotion examination.
The appellant 's number in the eligible staff was after 56 and, but for the mistake, he would not have been called for the examination.
Rule 11 Provides that panels for selection posts framed by a duly constituted Selection Board and approved by the competent authority shall not be cancelled or amended without reference to an authority next above the one that approved the panel.
Now, the panel was prepared by (he Chief Commercial Superintendent, Gorakhpur, who was subordinate to the General Manager, North Eastern Railway.
The panel, as originally drawn, was subsequently amended by the Chief Commercial Superintendent under instructions from the General Manager.
This was in accordance with rule II.
In the final list of the personnel included in the panel, the names of Sahai and Ramanand were included.
The name of the first of them was included by reason of the fact that his marks (1) [958] S.C.R. 828.
65 were not correctly totaled up and the second was included by reason of the fact that he belonged to the Scheduled Caste.
The complaint made by the appellant is that by reason of the inclusion of the said two persons in the final panel of Travelling Ticket Inspectors there was no post in which he could be kept and he was therefore reverted till another vacancy occurred, that by reason of the deletion of his name from the panel it would be necessary for him to appear before another Selection Board and until his name was again brought into the panel he would have no chance of being promoted to the post of Travelling Ticket Inspector.
It is to be noted that in the panel prepared by the Selection Board the word 'provisional ' was specifically noted against the name of the appellant which clearly shows that he did not acquire a right to the post.
The deletion of his name from the panel therefore does not attract the provisions of article 311.
If a civil servant has a right to a particular rank, then the very reduction from that rank will operate as a penalty, for he will then lose the emoluments and privileges of that rank.
If, however, he has no right to the particular rank, his reduction from an officiating higher rank to his substantive lower rank will not ordinarily be a punishment : vide Dhingra 's Case(1).
It is no doubt true that in the said case it has been held that when reversion entails penal consequences, it would be reduction in rank, but the instant case is not one in which penal consequences have been visited on the appellant.
Learned counsel for the appellant has relied upon the decision of a Single Judge of the High Court of Calcutta as supporting his contention that the deletion of the appellant 's name from the panel would amount to a reduction in rank.
That decision is reported as Dineshwar vs Chief Commercial Superintendent, Eastern Railway (2).
At p. 21 1, the learned Judge observed: "The question is whether the striking of the petitioner 's name from the panel, has affected his future right of promotion.
In my opinion, the escapable conclusion is that it has so affected the petitioner.
As I have mentioned above, promotion from Class III post to a Class II post is to be done according to the recommendations made by Selection Boards.
Where there is such a list or a panel, then a person not in the list cannot hope to be promoted. .
It is implied, that in order (1) ; (2) A.I.R. 1960 Cal.
209 66 to have a chance of promotion the petitioner would have to be in the selection list, that is to say, in the panel But with regard to the second contention, viz., that the striking out of his name from the panel affected his chances of future promotion, it is a point of substance and must be upheld.
What the authorities should have done before striking out the name of the petitioner from the panel was to give him an opportunity of showing cause as to why his name should not be struck off from the panel and the order could only be made after giving the petitioner an opportunity of being heard.
" We are of opinion that this is not a correct statement of the law, in view of the decision of this Court in High Court, Calcutta vs Amal Kumar Roy(1).
There the facts were these.
The respondent was a Munsif in the West Bengal, Civil Service (Judicial).
When the cases of several Munsifs came up for consideration before the High Court for inclusion of names in the panel of officers to officiate as Subordinate Judges, the respondent 's name was excluded.
He was told by the Registrar of the Court, on a representation made by him, that the Court had decided to consider his case after a year.
As the result of such exclusion, the respon dent, who was then the senior most in the list of Munsifs, lost eight places in the cadre of Subordinate Judges before he was actually appointed to act as an Additional Subordinate Judge.
He filed a suit praying that a declaration might be made that he occupied the same position in respect of seniority in the cadre of Subordinate Judges as he would have done if no supersession had taken place.
His case, in substance, was that as a result of the High Court 's order he was reduced by eight places in the list of Subordinate Judges, and that in law amounted to reduction in rank within the meaning of article 311(2) of the Constitution.
This Court held at p. 453 as follows : "In our opinion, there is no substance in this contention because losing places in the same cadre, namely, of Subordinate Judges does not amount to reduction in rank, within the meaning of article 311(2).
The plaintiff sought to argue that 'rank ', in accordance with dic tionary meaning, signifies 'relative position or status or place '.
According to Oxford English Dictionary, the word 'rank ' can be and has been used in different senses in different contexts.
The expression 'rank ' in article (1) ; 67 311(2) has reference to a person 's classification and not his particular place in the same cadre in the hierarchy of the service to which he belongs.
Hence, in the context of the Judicial Service of West Bengal, 'reduc tion in rank ' would imply that a person who is already holding the post of a Subordinate Judge has been reduced to the position of a Munsif, the rank of a Subordinate Judge being higher than that of a Munsif.
But Subordinate Judges in the same cadre hold the same rank, though they have to be listed in order of seniority in the Civil List.
Therefore, losing some places in the seniority list is not tantamount to reduction in rank.
Hence, it must be held that the provisions of article 311(2) of the Constitution are not attracted to this case.
" This decision has established the following principle, viz., the expression 'rank ' in article 311(2) has reference to a person 's classification and not his particular place in the same cadre in the, hierarchy of the service to which he belongs and therefore losing some places in the seniority list is not tantamount to reduction in, rank within the meaning of article 311(2) of the Constitution.
It is perhaps true that the hopes of the appellant were raised ' by reason of the inclusion of his name in the panel.
It is also true that the respondent made an incorrect assessment of the anticipated number of vacancies, but the fact remains that his inclusion in the panel was expressly stated to be provisional.
The appellant cannot therefore complain of any infraction of the guarantee given by the Constitution to Government servants.
The appeal fails and is dismissed.
In all the circumstances of ' the case, there will be no order as to costs.
| Selection to the post of Travelling Ticket Inspector from that of Travelling Ticket Examiner is made by a Selection Board in accordance with the Promotion and Selection Rules (Non Gazetted) framed under the Indian Railway Establishment Code Every year, the number of vacancies that are likely to occur during the year is assessed and in accordance with r. 8(7), eligible staff upto 4 times the number of anticipated vacancies are called up for written and viva voce tests.
Thereafter, the Board prepares a panel and promotions are made from the panel.
In 1959, there were 8 vacancies, in the ex Muzaffarpur region of the North Eastern Railway, which were to be filled up immediately and in addition a panel of 6 was required to be drawn up.
But, due to an incorrect assessment, 92 persons of whom the appellant was one, were called up for examination instead of 56.
As a result of the tests a panel of 14 persons was prepared and the appellant was given the 12th rank.
The final list was then prepared and the appellant was given the 13th rank; but a note was appended that the selection of candidates 9 to 14 was provisional.
Later, under orders of the General Manager, who was the prescribed authority, the names of candidates 9 to 14 were deleted from the panel.
The appellant filed a petition under article 226, but the High court dismissed it.
In appeal to this Court it was contended by the appellant that the deletion amounted to a reduction in rank and that the order was bad in law, because, the appellant was not given an opportunity before his name was deleted.
HELD : If a civil servant has a right to a particular rank, then the very reduction from that rank will operate as a penalty, for he win then lose the emoluments and privileges of that rank.
If, however, he has no right to the particular rank, his reduction from an officiating higher rank to his substantive lower rank will not ordinarily be a punishment.
Since, in the panel prepared, the word "provisional" was specifically noted against the name of the appellant, it shows that he did not acquire a right to the post.
The appellant could not complain of any infraction of the guarantee given by the Constitution to government servants and no penal consequences have been visited on him.
Therefore the deletion of his name from the panel did not attract the provisions of article 311.
[65 C E,, 67 E] Parshotam Lal Dhingra vs The Union of India, [1958] S.C.R. 828, followed.
Dineshwar vs Chief Commercial Superintendent Eastern Railway, A.I.R. 1960 Cal.
209, overruled.
|
Appeal No. 1527 of 1974.
Appeal by Special Leave from the Judgment & Order dated the 14th December, 1973 of the Delhi High Court in Civil Writ No. 1678 of 1967.
F. section Nariman, Addl.
Gen. of India, D. N. Mukherjee and R. N. Sahthey, for the Appellants.
N. A. Palkhiala, Ravinder Narain, J. B. Dadachanji, O. C. Mathur, K. J. John and K. R. Jhaveri, for the Respondent.
419 The Judgment of the, Court was delivered by Goswami, J.
This appeal is by special leave from the judgment of the Delhi High Court in a writ application there under article, 226 of the Constitution.
The respondent manufactures various other items hot rolled finished steel products in rectangular cross section of thickness varying between 1.7 mm and 6.55 mm and width varying between 16.2 mm and 311.2 mm and rolled in coils which it supplies to the, Indian Tube Company Limited at Jamshedpur for making tubes and also to others.
This article is subjected to Central Excise Duty under the (hereinafter called the Act).
The dispute between the respondent and the appellants is that while the former describes the said manufactured product as strip the appellants classify it as skelp.
This difference in classifying the product differently results in fiscal misfortune to the respondent since skelp is subjected to a higher Central Excise Duty than strip.
It may be stated that during the period from April 24, 1962 to February 28, 1964, the respondent described its product as skelp and it was subjected then to a lower rate of,duty From February 19, 1964, the respondent claimed that the aforesaid product be classified as strip since there.
had been a levy of higher duty for skelp.
The Assistant Collector, Central Excise, Jamshedpur, who is the primary taxing authority, the Collector of Central Excise, Patna, in appeal, and the Central Government in revision rejected the contention of the respondent by successive orders, each authority upon its own test of the definition of the product as skelp.
That led to the successful writ application of the respondent in the High Court resulting in this appeal.
In the forefront of his argument the learned Additional Solicitor General for the appellants relying upon two decisions of this Court, namely, The Collector of Customs, Madras vs K. Ganga Setty(1) and V. V. Iyer of Bombay vs Jasjit Singh, Collector of Customs and Another,(2) submitted that "it is primarily for the taxing authorities to determine the heads or entry under which any particular commodity fell; but that if in doing so, these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was preverse then it was a case in which the Court was competent to interfere.
In other worlds, if there were two constructions which an entry could reasonably bear, and, one of them which was in favour of Revenue was adopted, the Court has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the Court as the better one to adopt '.
On the other hand with equal emphasis Mr. Palkhivala for the respondent submitted that an assessment without the application of an identifiable test is nothing but perverse and arbitrary.
He submits that in the present case there was no identifiable test before the taxing authorities by which the (1) ; (2) 420 product of the, respondent could be held to be skelp and not strip subjecting the respondent to a heavier duty.
According to the learned counsel there is no difference.
between sklep and strip, the two items being interchangeable.
It may be, noted for our purpose that under section 3 of the Act Central excise Duties are leviable on all excisable goods which are produced or manufactured in India at the rates set out in the First Schedule.
Item No. 26AA in that Schedule relates to iron and steel products and mentions in sub item (iii) therein flats, skelp and strips showing the rate of duty in the third column.
Under rule 8 of the Central Excise Rules, 1944, made under section 37 of the Act, the Central Government may from time to time by notification in the official gazette exempt, subject to such conditions as may be specified in the notification, any excisable goods from whole or any part of the duty leviable on such goods.
In exercise of the power under this rule the Central Government has made such exemptions in the rates of duty as have made it higher on skelp than on strip.
Before we proceed further we may notice how the various Excise authorities dealt with the matter at different.stages.
The first order is that of the Assistant Collector of Central Excise, Jamshedpur, which was on June 17, 1964.
According to him "skelp is the name used in reference to a plate of wrought iron or steel used for making pipe or tubing by rolling the skelp into shape and lap welding or brevetting ,edges together and strip is a term used to describe a flat rolled product of smaller cross section than sheet or bar." He accordingly adopted the definition given in Marymen 's Dictionary of Metallurgy.
The order of the Collector of Central Excise in appeal made on October 24/29, 1964, shows that the authority noted the definition of strip as follows : "Hot or cold rolled finished steel product in rectangular cross section of thickness below 5 mm and of width below 800 mm and supplied, in straight length".
This definition is substantially in.
conformity with the one given by the Indian Standards Institution (ISI).
The appellate authority held that "since the products have not satisfied the above specifications, they have been correctly, classified as 'skelp ' by.
the Assistant Collec tor.
Then comes the order in revision of the Central Government of August 18, 1967.
Inter alia it was held that "the product does have bevel edge, .; peculiar to skelp and not found in strips.
Under the circumstances, there is no doubt whatever that the product in question is correctly classified as skelp".
From the above three orders it is clear that the authorities were not at all certain about a uniform definition of 'skelp ' distinguishing it from 'strip.
Extensive arguments were advanced at the bar with regard to the definitions of there two words.
We may, therefore, look 421 at the various definitions to which our attention has been drawn.
Since the appellants largely upon the definitions given by the Indian Standards Institution, "an expert body", we will first note these definitions.
The ISI 's definitions of strip and skelp as given in IS 1956 1962 (amended upto July 1968) are as follows Upto 1965 the ISI gave, no description of strip.
It had defined skelp in 1962 as follows: Skelp.
"Hot rolled narrow strip with rolled (square, slightly round or beveled) edge.
Strip .
A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edge.
(a) Narrow strip strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form.
(b) Wide Strip Strip of width 600 mm above and supplied in coil form only.
" Upto 1965 the ISI gave no description of strip.
It had defined skelp in 1962 as follows "Hot rolled.
strip with square or slightly beveled edges, used for making welded tubes".
In 1968 the ISI 's definition of skelp stands as follows "Hot rolled narrow strip with rolled (square, slightly round or beveled edge.
,, Strip was defined by the ISI for the first time in 1965 as follows: "Coiled Strip A hot or cold rolled flat product, rolled in rectangular cross section and supplied in coil form.
Strip A hot or cold rolled flat product, rolled in rectangular cross section thickness below 5 mm and of width below 600mm and supplied in straight lengths".
The ISI 's definition of strip given in 1968 is as follows "A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edges.
(a) Narrow strip Strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form.
(b) Wide strip Strip of width 600 mm and above and supplied in coil form only".
Annexure 'J ' submitted by the respondent along 'with its rejoinder affidavit in the High Court at page 101 of the record, gives various 422 definitions of skelp taken.
from various dictionaries and treatises such as Hornor J. G. Dictionary of Terms, page 323, year 1952; Brandt D.J.C. Manufacture of Iron & Steel, pages 318 and 319, year 1953; Henderson J.C. Metallurgical Dictionary, page 192, year 1953; Backert A.O.L. A.B.C. of Iron & Steel, page 1912, year 1925 5th edition; Chamber 's Technical Dictionary, year 1967.
Similarly definition of strip is also given from these Dictionaries and books.
It is also pointed out that there is no category of skelp mentioned in Brussels Nomenclature.
British Standards 2094, Part 4; 1954, defines skelp as follows : "Hot rolled strip with square or slightly bevelled edges used for making welded tubes".
Chamber 's Technical Dictionary Revised Edition (Reprinted 1954) defines skelp as follows "Skelp (P. 775) Mild steel strip from which tubes are made by drawing through a bell at welding temperature, to produce lap welded or butt welded tubes".
We may not add to the list but are satisfied that there are a large number of definitions out of which one can be picked up to satisfy the definition of skelp according to some authority and another definition to fit in with the concept of strip according to another authority Since the duties on strip and skelp are not the same, it is absolutely necessary to define the word skelp so that there can be no doubt or confusion in the mind of either of the taxing authority or of the tax payer with regard to the tax liability qua skelp as opposed to strip.
Since, however.
there is no statutory definition of this controversial item different tests have naturally been resorted to by the different authorities and the same variation is discernible even in the affidavits of the appellants submitted before the High Court.
The short question, therefore, that arises for consideration is whether in the above background the High Court was right in interfering with the orders under article 226 of the Constitution.
It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp.
That undoubtedly would require some evidence be taken at the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip.
In the mass of documents filed before us and the extensive arguments addressed at the bar with regard to the definitions 'culled from various dictionaries, handbooks and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests.
A particular type, of strip may according to certain definitions.
be skelp and according to others not Skelp.
however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding contro 423 versy as in this case unless the, matter is beyond doubt in view of the popular meaning, or meaning ascribed to the term in commercial parlance.
In absence of any clear criterion to determine what is skelp.
and not strip, no useful purpose would be served by even remanding, the matter to the Excise authorities for a decision after taking necessary evidence.
It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip of skelp it may be possible for the authorities.
to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test.
This is, however, not possible in this ' case in view of the fact that there is no identifiable standard.
The best way is to define the product for the purpose of excise duty in approximate terms demarcating clearly the distinction between.
the two terms.
The absence of any identifiable standard would, therefore, naturally give rise, to the scope for arbitrary assessment at the hands of different authorities.
Whether this has happened in this case, as. ' complained by the respondent citing the instance of the Hindustan Steel Company, Rourkela, it is not necessary for us to pursue in this,, appeal.
We are, therefore, unable to hold that the High Court has.
gone wrong in granting the reliefs prayed for.
The appellants strenuously emphasized upon the test relied upon in the Revisional order as to skelp having bevelled edges which, according to them, is peculiar to skelp and not to strip.
But this does not bear scrutiny as on the counter affidavit of the Union of India in the High Court at page 57 of this record it shows that "as regards tested Hot rolled Strips the edges are never looked into, they can be bevelled, square or have Mill edge" (emphasis added).
This is an admission of the appellants that strips may also have bevelled edges.
The two decisions relied upon by the appellants do not come to their aid in this case since there is no identifiable standard or test to determine clearly which product can be skelp and not strip.
In Ganga Setty 's case (supra) the controversy arose with regard to whether "feed oats" fell within item 42 (fodder) or within item 32 (grain) of parti cular circular.
Dealing with the matter this Court observed as follows: ". any particular species of grain cannot be excluded merely because it is capable of being used as cattle or horse feeds.
The decision of the Customs authorities, therefore, this Court held could not be characterized as Perverse or mala fide calling for interference.
Similarly following Ganga Setty 's case (supra) in Jasjit Singh 's case (supra) the conclusion and findings of the Customs authorities were accepted a reasonable.
In both the above cases there were definite tests by which the particular article could be held to fall under one item and not under the other and the construction of the authorities 424 with regard to the scope of the particular entries was, therefore, held to be reasonable and not calling for interference by the court.
The ,question that arises in the instant case is of a completely different nature as pointed out above there being no identifiable test reasonably capable ,of distinguishing skelp from strip.
In the result the appeal fails and is dismissed with costs.
P.H.P. Appeal dismissed.
| The appellant is a tenant or Plot No. 428.
A notification was issued under Section 4 (1) of the Land Acquisition Act for setting up an industrial estate in respect of Plot No. 428 and Plot No. 436.
By a notification under Section 17 (4) the provisions of section 5A were dispensed with in the ground that provisions of section 17(1) (Urgency) were applicable.
The appellant filed a Writ Petition in Hugh Court challenging the said notification issued under section 17 (4) The Single judge dismissed the Writ Petition.
An appeal filed to the Division Bench was also dismissed.
On an appeal by Special Leave, it was contended by the appellant that there was a pucca construction on Plot No. 436 which was also notified for acquisition under the impugned notification and consequently the provisions of Section 17 (4) would not be applicable to that land as it was not arable or waste land and could not be acquired by dispensing with the enquiry under section 5A and as such, the whole notification is bad and should be quashed.
Dismissing the appeal, ^ HELD: 1.
Admittedly the appellant 's land is a waste and arable land and thus falls under section 17(1).
The person who could have taken objection to the enquiry under section 5A being dispensed: with was the owner of Plot No. 436.
He has not objected to the acquisition it is, therefore, not open to the appellant to question the validity of the notification.
If the owner of Plot No. 436 had objected to the notification different considerations might arise.
Sarjoo Prasad vs State of U.P. (AIR distinguished.
[1827E F] 2.
Section 5A should be understood in the back ground of section 4(1).
Section 4 ( I ) requires only the locality in which the land is situate, to be mentioned in the notification.
But in actual practice the survey numbers of the lands sought to be acquired are given in such notifications.
The question of notifying the locality might probably arise when all the lands in village are sought to be acquired.
Otherwise.
the word locality is a word of such indefinite import that it is difficult to conceive of any locality in any particular village being notified for acquisition.
When a locality in the sense of a village or a group of villages in notified for acquisition any person interested in any land in that locality would be entitled to be, heard under section 5A.
But where land proposed to be acquired is specifically mentioned in the notification it is only the person interested in that land who is entitled to be heard under section 5A.
That is why section 5A provides that any person interested may object to the acquisition of land or of any land in the locality as the case may be.
The latter part would apply to a case where lands in.
any locality are notified under section 4 ( 1 ) .
That is the significance of the use of the words "as the case may be.
" Any person unconnected with land cannot object to the acquisition of the land in the locality since he would not be a person interested.
[828 F H 829A C]
|
minal Appeal No. 178 of 1967.
Appeal by special leave from the judgment and order dated January 5, 1967 of the Madras High Court in Criminal Appeal Nos.
34 to 38 of 1965.
R. N. Sachthey, for the appellant.
H. R. Gokhale, M. K. Ramamurthi, Vineet Kumar and Shyamala Pappu, for respondent No. 1.
A. V. Rangam, for respondent No. 6.
The Judgment of the Court was delivered by Dua, J.
A complaint under section 6 of the Imports and Exports Control Act, 1947 dated 24th February, 1964 was presented by the Chief Controller of Imports and Exports, New Delhi in the court of the Chief Presidency Magistrate, Madras against (1) K. T. Kosalram, Director in charge of Messrs Dina Seithi Ltd., Madras, (2) K. T. Janakiram, Director, Messrs Dina Seithi Ltd., (3) K. Natarajan, Manager, Messrs Mohan Ram Press, Madras, (4) Messrs Dina Seithi Ltd., Madras, (5) Sri T. N. Ramachandran son of section Natesa lyer, Madras and (6) T. Natarajan, Manager, Messrs Dina Seithi Ltd., Madras.
Accord 5 10 ing to the broad allegations in the complaint, on November 28, 1959 accused No. 4 (hereafter called the Company) was registered under the , as a public limited company with the Registrar of Companies, Madras.
Accused nos.
1 and 2 who are brothers were both directors of the Company, accused No. 1 being the Director in charge attending to its day to day management and administration.
He was also authorised to operate its accounts with the banks.
The primary object of the Company was publication of a Tamil daily newspaper "Dina Seithi".
Accused No. 3 was the Manager of Messrs Mohan Ram Press located in the same building in which the Company was located.
Srimati Gomati Devi, wife of accused No. 1 was the sole proprietress of this Press.
She had given power of attorney to her husband for operating the bank account of her Press.
The daily newspaper (Dina Seithi) used to be printed at this press.
Accused No. 5 was a broker engaged in the business of negotiating sale and purchase of printing machinery.
Between 1949 and 1951 he was working as Chief Salesman of Printers ' House, Madras and before that for about two years he had worked as a salesman with Messrs Standard Printing Machinery Company, Madras.
In 1951 he started his independent business as a broker; in addition he also used to work as a correspondent of "Kerala Kaumudi" belonging to the Company.
Accused No. 6 was the Manager of the Company and his wife Smt.
Sarojini was one of its Directors.
On May 5, 1960 accused No. 1 applied on behalf of the Company to the Chief Controller of Imports and Exports, New Delhi, for the grant of an import licence in favour of the Company for importing two secondhand rotary printing presses valued at Rs. 3 lakhs in the category of "Actual Users".
The Chief Controller of Imports & Exports, on the recommendation of the Committee constituted for the purpose, issued in the first instance aft import licence for Rs. 1,50,000 (exhibit P 12).
The number of this licence was A 759626/60/AU/CCI/HO and it was dated September 19, 1960.
Later, on the request of accused No. 2 on behalf of the Company, the value of this licence was raised to Rs. 3 lakhs on the recommendation of the Press Registrar of India.
The licence was returned to the Company on December 16, 1960.
The original period of validity of the licence having expired on June 19, 1961 accused No. 2 requested the Licensing Authority on behalf of the Company to extend the period on the ground that the machinery could not be fixed up by the Company 's Directors.
Under the orders of the Controller in charge of the newsprint sale, the validity of the licence was extended upto March 19, 1962.
Oil July 2, 1961 accused No. 1 sought permission of the Licensing Authority on behalf of the Company to import two secondhand rotary presses instead of one already permitted within the licence value of Rs. 3 lakhs under the import 51 1 licence exhibit P/12 on the ground that one more printing press was required for the proposed office at Madurai (exhibit P/15).
After securing further necessary information about the machinery proposed to be imported the Chief Controller approved the request with the result that the amended licence for two presses was sent to the Company, on August 16, 1961.
On December 19, 1961 the Company as per letter sent by accused No. 1, informed the Chief Controller that one rotary printing press had been imported and the other was expected to arrive by January, 1962.
It was requested that in the import licence the description of the goods be changed from "Rotary Press" to "Rotary Press with Stereo equipment and Turtles".
We find from exhibit P/17 and exhibit P/17(a) that it was represented that the Company was incurring heavy demurrage as the cases were lying on the wharf uncleared for want of the required amendment of the licence.
This was described as a purely technical amendment in the licence.
This request was granted with the approval of the Chief Controller of Imports and Exports.
The amended licence was despatched to, the Company on January 3, 1962.
According to condition (c) reproduced on the reverse of the import licence the licence holder had to utilise the goods imported only for consumption in his own factory and its sale to or use by other parties was specifically prohibited.
The licence holder was further prohibited from pledging the imported goods in whole or in part except with a scheduled bank duly authorised to deal in foreign exchange and that also with prior permission of the Licensing Authority.
One Dr. K. G. Thomas owned "Kerala Dhwani", a daily newspaper of Kottayam having circulation in the State of Kerala.
It has started on August 20, 1959 and C. J. Mani was its general business manager ever since its inception.
On November 10, 1960 Dr. Thomas applied to the Chief Controller of Imports and Exports on behalf of his firm for importing a rotary printing press under a Customs Clearance Permit.
But this was rejected.
On October 25, 1961 he sent another application dated October 3, 1961 on behalf of ,the firm requesting for an import licence for importing a secondhand rotary press for the period October March, 1962.
But this was also rejected.
Still another application dated May 10, 1962 for licence for importing two mono typefacing units was also rejected on April 29, 1963.
C. J. Mani, the General Manager of this concern was also independently trying to secure a rotary printing press through various parties and firms.
Accused No. 5 was known to C. J. Mani and during the former 's visit to Kottayam in the first quarter of 1961 he learnt that Dr. Thomas was desirous of securing a secondhand rotary printing press.
Sometime in April or May, 1961 accused nos.
2 and 5 visited Kottayam and on meeting Dr. Thomas they told him that accused No. 1 was going to have an import licence for two rotary 512 printing presses but he needed only one, with the result that one R. Hoe & Co eight page rotary printing press would be available for sale.
After some correspondence and discussion between accused No. 5 and C. J. Mani and Dr. Thomas and after a personal meeting between Dr. Thomas and accused No. 1 (at the instance of accused No. 5) the terms of sale of rotary press to Dr. Thomas were finally settled on July 17, 1961.
The price was settled at Rs. 2 lakhs ex godown, Madras, The same day Dr. Thomas paid to accused No. 5 Rs. 15,000 by means of a cheque by way of advance money.
Accused No. 5 issued a stamped receipt which was also signed by accused No. 1.
On July 19, 1961 the photo prints of the press offered for sale were forwarded by accused No. 5 to Dr. Thomas.
On the reverse of these prints were the rubber stamp impressions of the Company.
On August 2, 1961 a further sum of Rs. 25,000 was paid by Dr. Thomas for which a receipt was given by accused nos.
1 and 5.
Between September 23, 1961 and March 17, 1962 the balance of Rs. 1,76,700 (total being Rs. 2,16,700) was paid by Dr. Thomas in instalments towards the price of the rotary press and its accessories.
On September 1, 1961 accused No. 1 had 'opened a letter of credit with a nil margin with the Indian Overseas Bank Ltd., Madras on Messrs Universal Printing Equipment Company, ,New York for importing a secondhand rotary press for dollars equivalent to Rs. 1,00, 1 12 against import licence No. A 759626/ 60/AU/CCI/HQ.
On October 28, 1961, the Bank received the relevant import documents and on December 13, 1961 it received from the Company the remittance of the amount in cash towards the letter of credit.
On October 20, 1961 Messrs Binny & Co., Madras, the agents of the ' Shipping Company Messrs Isthmian Lines Inc., U. section A. had requested the Company to remit Rs. 12,712 being the freight payable at Madras towards the con signment of 19 boxes containing secondhand rotary press due to arrive from New York by s.s.
"Steel Vendor" so as to enable them to cable to their principals at New York to issue the bills of leding to the shippers.
A cheque for Rs. 12,712 was accordingly sent by the Company to Messrs Binny & Co., on October 31, 1961.
The necessary cable was then sent to New York.
The import documents pertaining to the rotary press were sent by accused No. 1 on behalf of the Company to Messrs Natesa lyer & Co., Clearing Agents, Madras for clearing the goods from the Madras Port by the Indian Overseas Bank Ltd., Pursawalakam, Madras.
This invoice was issued by the Universal Printing Equipment Company, Lindhurst in the name of Messrs Dina Seithi Ltd., indicating shipment of the goods imported contained in the 19 boxes bearing marks "Dina Seithi".
The customs duty and the clearance charges were paid by the Company.
It is unnecessary to state at length further details of the complaint.
Suffice it to 513 started functioning from May 20, 1962.
In March, 1962 the Deputy Superintendent of Police, Madras, visited the premises of this newspaper and found the rotary printing Press tallying with the description given in the invoice issued to the Company by R. Hoe & Co., New York/London.
The number 458 assigned to the press was also found on its major parts.
No rotary press imported by accused No. 1 on behalf of the Company was found at its (the Company 's) premises.
The amount received by cheques and drafts from Dr. Thomas were credited to the account of Messrs Mohan Ram Press of which Smt.
Gomati Devi, wife of accused No. 1, was the sole proprietress.
On these broad avermerits it was prayed in the complaint that accused nos.
1 to 3 and 5 and 6 be proceeded against for offences under section 120 B, I.P.C. read with section 5 of Imports and Exports (Control) Act, 1947 ' Lind also for an offence under section 5 of the said Act.
The Company was alleged to be guilty under section 5 of the said Act read with cl.
(5), sub cl.
(iv) of Imports (Control) Order, 1955.
The Chief Presidency Magistrate who tried the complaint acquitted accused No. 6 holding that he had nothing to do with the impugned transaction but convicted the rest.
The Company was sentenced to fine only and so were accused nos.
2, 3 and 5; three individual accused persons were directed, in case of default to undergo rigorous imprisonment for three months on each count.
Leniency was shown to accused nos.
2, 3 and 5 because they had acted under the directions given by accused No. 1 who was sentenced to rigorous imprisonment for six months under each count and also to pay fine and in default to undergo further rigorous imprisonment for three months.
The convicted accused appealed to the High Court at Madras and the State applied for enhancement of sentences.
The, High Court acquitted all the accused persons with the result that the revision for enhancement necessarily failed.
The High Court having declined certificate of fitness under article 1 3 4 ( 1 ) (c) of the Constitution the Deputy Chief Controller of Imports & Exports secured special leave to appeal under article 136 of the Constitution against the order of acquittal by the High, Court.
In the High Court, though in the memorandum of appeal several grounds were taken, during arguments the appellant 's counsel confined his submission mainly to the point that condition.
(c) of the licence issued to accused No. 4 (exhibit P/ 1 2) related only to raw material or accessories and that as such the sale of printing press which was neither raw material nor accessories, did not contravene that clause.
The factum of sale of the printing press, 514 to Dr. Thomas (P. W. 16) was not disputed.
The High Court accepting this contention held condition (c) in exhibit P/12 to be inapplicable to printing presses and observed that the Licensing Authority had not applied its mind when this condition was inserted in the licence for importing the printing press in question.
On this ground the conviction recorded by the trial court was set aside.
The appellant 's learned counsel in this Court has questioned the correctness of this view and has submitted that it is not sustainable on the statutory provisions and has resulted in grave failure of justice.
Before dealing with this question we may dispose of a pre liminary objection to the competency of this appeal at the instance of the Deputy Chief Controller of Imports and Exports, raised by Shri H. R. Gokhale on behalf of the respondents.
It has been pointed out that the special leave petition in this Court purports to be filed by the Deputy Chief Controller of Imports & Exports and not by the State.
As the State had conducted the prosecution the complainant, it is argued, cannot seek leave nor can he prosecute this appeal.
Leave already granted ex parte is, according, to Shri Gokhale liable to be revoked.
Reliance has been placed on Management of Hindustan Commercial Bank Ltd., Kanpur vs Bhagwandass(1).
There the appellant had secured from this Court ex parte special leave to appeal under article 136 of the Constitution without first moving the High Court for the necessary certificate and this Court, on objection by the respondent, revoked the special leave as being in contravention of O. 13, r. 2 of the Supreme Court Rules.
The respondents ' contention before us is that the Public Prosecutor and not the Deputy Chief Controller of Imports & Exports had applied to the High Court for the necessary certificate and, therefore, the Deputy Chief Controller has no locus standi to apply for special leave.
Having been granted on an incompetent petition the special leave deserves to be revoked, argues Shri Gokhale.
We are unable to uphold this objection.
The complaint was filed in the court of the Chief Presidency Magistrate by the Deputy Chief Controller of Imports and Exports under section 6 of the Imports and Exports (Control Act, 1947.
It is not disputed that this officer was, as stated in para 1 of the complaint, duly authorised to make the complaint within the contemplation of section 6.
In the appeals filed by the accused against their conviction the State was impleaded, as represented by the Deputy Chief Controller of Imports and Exports (complainant), as the respondent.
It is true that in a petition for enhancement of sentence filed in the High Court the Public Prosecutor was shown as the petitioner and similarly the application for leave to appeal from the judgment of the High Court was (1) ; 515 also filed in that Court by the Public Prosecutor.
But that, in our view, does not in any way disentitle the Deputy Chief Controller of Imports and Exports (the original complainant duly authorised by the statute) to apply for special leave to appeal to this Court and to prosecute the appeal.
, Our attention has not been drawn to any provision of law which can be said to deprive the Deputy Chief Controller the lawfully authorised complainant in this case to seek special leave and prosecute this appeal.
In any event article 136 of the Constitution and the Supreme Court Rules are wide enough in their language to empower this Court to grant special leave to the Deputy Chief Controller in cases like the present and deal with the appeal on the merits.
The preliminary objection must accordingly be repelled.
Coming to the merits we may for a while again turn to con dition (c) of the licence which has already been noticed earlier.
It may be recalled that this condition expressly provides that the goods would be utilised only for consumption as raw material or accessories in the licence holder 's factory and no portion thereof would be sold to, or, be permitted to be utilised by, any other party.
The goods imported are also not to be pledged with any financier other than banks authorised to deal in foreign exchange, provided that particulars of the goods so pledged are reported in advance to the licensing authority.
Under section 3 of the Imports and Exports Act , 18 of 1947 the Central Government is empowered to provide by order published in the official Gazette for prohibiting, restricting or otherwise controlling the import, export, carriage or shipment etc., of goods of any specified description and also the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried.
The Central Government by Order dated December 7, 1955 made the Import Control Order under sections 3 and 4A of the said Act.
Clause (3) of this Order provides for restriction on import of certain goods in these words : "Save as otherwise provided in this Order, no person shall import any goods of the description specified in Schedule 1, except under, and in accordance with, a licence or a customs clearance permit granted by the Central Government or by any officer specified in Schedule II.
" Clause 7 of this Order empowers the Licensing Authority suo motu or on application by the licensee to amend the licences granted under this Order in such manner as may be necessary to make them conform to the aforesaid Act or this Order or any other law in force or to rectify any error or omission in the licence : on the licensee 's request, however, the licence may be 5 1 6 amended in any manner consonant with the Import and Export Control Regulations.
Item No. 67(1) in Schedule 1, Part V, which appears to us to be relevant for this case reads : "Printing and Lithographic material, namely, presses, lithographic plates, composing sticks, chases, imposing tables, lithographic stones, stero blocks, wood blocks, half tone blocks, electrotype blocks, process blocks, roller moulds, roller frames and stocks, roller composition, lithographic nap rollers, standing screw and hot presses, perforating machines, gold blocking presses, galley presses, proof presses, arming presses, copper plate printing presses, rolling presses, ruling machines, ruling pen making machines, lead cutters, rule cutters, slug cutters, type casting machines, type setting and casting machines, paper in rolls with side perforations to be used after further perforation for typecasting, rule bending machines, rule mitreing machines, bronzing machines, stereotyping apparatus, paper fold ing machines, paging machines, but excluding ink and paper and sets of mats when imported as advertising material in connection with composed films." This item which contains a very large number of various components of a printing press corresponds to item No. 72(2) of the Indian Tariff Act, 1934 which consolidates the law relating to customs duties.
Item No. 67(2) in Schedule I speaks of component parts as defined in import tariff item No. 72(3), of machinery specified in cl.
(1) excluding those covered by sl.
no 6 8 of this schedule.
Serial No. 68 refers to rubber blankets for printing presses etc.
Item No. 67 (1) would suggest that printing presses are included in the expression "printing and lithographic material.
" Our attention has not been drawn to any other entry either in Schedule I of the Imports Control Order or in the first Schedule of the Indian Tariff Act which would cover the import of printing presses and payment of customs duty on such import.
These two statutes forming parts of the Import Control Scheme may appropriately be considered as throwing some light on each other.
The principal argument advanced on behalf of the respondents is that cl.
(c) of the conditions of the licence does not cover the printing presses in question because the plain language of this clause postulates that goods covered by it should be capable of being utilised for consumption as raw material or accessory in a factory.
A complete printing press, it is contended, is neither raw material nor accessories and it cannot be said that by fixing a printing press for running it, the press is utilised for consumption as raw material or accessory.
This argument, though attractive on first impression seems to us on a deeper thought to 517 be unacceptable.
A close scrutiny of the scheme and language of the relevant provisions of the import and export legislation and of the Import Control Policy formulated by the Government leaves no doubt that the argument is unfounded.
Clause (c) reads : " (c) The goods will be utilised only for con sumption as raw materials or accessories in the licence holders ' factory and that no portion thereof will be sold to or be permitted to be utilised by any other party or pledged with any financier other than Banks authorised to deal in foreign exchange provided that particulars of goods so pledged are reported in advance to the licensing authority.
" The respondents have sought assistance for their argument principally from the dictionary meaning of the words "consumption", "raw material" and "utilised" used in this clause.
"Consumption", it is argued, conveys the idea of destruction of the commodity consumed and "raw material" according to this submission, must be "utilised" in this sense.
In our opinion dictionary meanings, however helpful in understanding the general sense of the words cannot control where the scheme of the statute or the instrument considered as a whole clearly conveys a somewhat different shade of meaning.
It is not always a safe way to construe a statute or a contract by dividing it by a process of etymological dissection and after separating words from their context to give each word some particular definition given by lexicographers and then to reconstruct the instrument upon the basis of those definitions.
What particular meaning should be attached to words and phrases in a given instrument is usually to be gathered ?from the context, the nature of the subject matter, the purpose or the intention of the author and the effect of giving to them one or the other permissible meaning on the object to be achieved.
Words are after all used merely as a vehicle to convey the idea of the speaker or the writer and the words have naturally, therefore, to be so construed as to fit in with the idea which emerges on a consideration of the entire context.
Each word is but a symbol which may stand for one or a number of objects.
The context, in which a word con veying different shades of meanings is used, is of importance in determining the precise sense which fits in with the context as intended to be conveyed by the author.
The words used in the licence (exhibit P/12) have accordingly to be construed in the background of the scheme of the Import Control Order, 1955, the entry No. 67 of Schedule I to this Order and the Import Trade Control Policy.
The word "consumption" as used in cl.
(c) in the licence seems to us to convey the idea of using up the goods by L 436 Sup Cl/71 518 fixing them in the factory along with other components.
This is clear from the fact that entry No. 67(1) in Schedule 1 of the Import Control Order does not contain any single item denoting a complete printing press and from the fact that the various ;articles mentioned in this item seem as if to have been intended to constitute "raw material".
This construction fits in with the scheme and policy of the Import Trade Control as we will presently show.
The dictionary meaning of the three words in cl.
(c) on which the respondent relies also seems, in our opinion to harmo nise with this view.
The Government of India (Ministry of Commerce and Industry) has been publishing from time to time Import Trade Control Handbook on rules and procedure providing for the assistance of those interested in imports up to date information as to the manner in which applications for import licences should be made, the appropriate authority to be addressed in each case, the procedure governing the grant of licences for different classes of goods, the validity and use of import licences and other similar matters.
In the Handbook of 1956, which is the relevant Handbook for this case which relates to the licence originally granted in 1960, Schedule I commonly known as the ITC Schedule serves broadly to classify the articles that enter into the import trade.
Part V of the Schedule covers 'industrial requirements and it is in this part that the printing and lithographic material including and Other items are entered at sl.
No. 67(1), already noticed by us.
This Handbook emphasises the importance of correct classification with reference to the serial number and part of the ITC Schedule.
In Appendix III of the Handbook application forms are prescribed.
Form B is the one which was used by the respondents.
This form is meant for the import of goods by actual users not borne on the registers maintained by the Industrial Advisers, Ministry of Commerce and Industry, when licence is sought for import of goods (other than those falling under the capital goods licensing procedure) vide : Government of India, Ministry of Commerce and Industry Order No. 17/55 dated 7th December, 1955.
It is expressly stated in the respondents ' application exhibit P/ 11 (b) 1 that the raw material was required by them for printing newspaper (Dina Seithi, Tamil Daily) : full particulars of the raw materials required to be imported were given as printing machinery and proforma was attached with the application.
ITC number and part was specifically stated to be 67 (1 ) (i), Part V.
It was on the basis of this application that the licence exhibit P/12 was granted subject inter alia to condition (c).
The Government of India, Ministry of Commerce and Industry also publishes from time to time Import Trade Control Policy 519 for the various licensing periods.
in the publication for the licensing period April September, 1960 we find the policy statement, showing the list of items licensable to actual users.
At p. 360 in Appendix IV, Part V, items 67 (1) (i) and 67 (2) occur.
Item 67 (1 ) (i) reads : "Printing machinery (for Newspaper Establishments and quality printers).
" Item 67 (2) reads : "Component parts of printing machinery".
It is obvious that in the respondents ' application serial No. 67(1) (i) refers to this item in the Import Trade Control Policy, AprilSeptember, 1960, the period relevant for this case.
There is no other item in any one of the lists which covers printing presses as a separate item.
This clearly shows that the printing presses are treated by legislative intendment as Printing material or Printing machinery.
Form 'B ' used in the present case indicates that the Press intended to be imported was not considered to fall under the Capital Goods Licensing Procedure.
It seems that it is for all these reasons that in the licence it was provided that these goods would be utilised only for consumption as raw material or accessories in the licence holder 's factory.
The words "utilised", "consumption" and "raw material" have to be fitted into the clearly discernable statutory scheme and this is possible without doing violence to the dictionary meaning of these words.
The appropriate dictionary meaning of words possessing variable shades of meanings has not to be arbitrarily selected and mechanically applied without considering the setting in which they are, used and the purpose sought to be achieved.
There is another very cogent factor in this case, namely, that the respondents, when they sought licence for the import of printing press expressly represented that the imported goods were required to meet the increasing demand of circulation of their newspaper.
This indeed was the sole round for importing the press.
The amended licence was.
also secured by the respondents so as to enable them to import two printing presses on the ground that one press was required for their Madurai office as well.
Licence for both the printing presses was obtained for actual use by them for their newspapers.
Had they not complied with the procedure meant for the import of goods by actual users, they might not have secured the necessary licence.
Having secured a licence expressly for the import of goods for their use they may not be permitted to ignore the condition of actual user on the plea (which by no means seems to be virtuous) that cl.
(c) is inapplicable to actual users.
5 20 The respondents on their own showing clearly knew their dis ability under the conditions imposed by cl.
(c) of the licence.
Knowing full well the condition prohibiting the transfer of the press to other persons the respondents as the correspondence to which our attention has been drawn shows were actually negotiating for the sale of one of the presses during the period when the procedure in regard to its import was being carried out.
On July 2, 1961 amendment of the licence was sought so as to import one more printing press and on July 17, 1961 its resale was actually finalised and a part of the price also received.
These facts do not need any comment on the intention and bona fides of the respondents.
It is unnecessary to go into the evidence on this point because, as already noticed, it is not disputed that one of the printing presses was actually sold to Dr. Thomas prior to its arrival in India.
The amendment of the licence also appears to have been sought with the object of reselling the second press.
The only argument urged namely that condition (c) was inapplicable to the present case having been repelled, the appeal, in our view, must succeed and the order of the High Court reversed.
The validity of condition (c) in the licence has not been questioned and in our opinion rightly in view of the decision of this Court in M/s. Ramchand Jagdish Chand vs Union of India(1).
There is neither any legal nor equitable justification for reselling the printing press.
The suggestion faintly thrown that the Company was the holder of the licence and, therefore, the other respondents (accused persons) should not be held liable is also without merit.
On the facts found and on the authority of State of West Bengal vs Motilal Kanoria (2 ) all the respondents (the individual accused persons along with the Company) are guilty.
The argument that the High Court having acquitted the,res pondents on a view which is a possible view this Court should not convert acquittal into conviction under article 136 of the Constitution has not appealed to us.
The view of the High Court does not seem to be sustainable on the statutory language and on the Import Control Policy of which the respondents were fully aware.
Their own application is proof positive of their awareness of the true position and the breach of the conditions of the licence on their part was deliberate.
Indeed, as observed earlier, the permission for the import of the second press was apparently sought with the object of its resale.
Breach of conditions for import of goods is a serious matter because it prejudicially affects our country 's national economy.
The import licence for the second press having, in our view, been sought on false representation with (1) ; (2) [1966] 3 section C. R. 933.
521 the object and purpose of its resale the breach of the licence was, therefore, fully intended and designed.
The respondents are guilty of malpractices and of abuse of the import licence with the object of making money.
We, however, think that in view of the fact that this litigation has been pending since a long time, it would meet the ends of justice if we impose merely fine and do not sentence anyone to imprisonment.
The final result is that the order of the High Court is set aside and accused nos.
1, 2, 3 and 5 are convicted under section 120 B, I.P.C. and section 5 of the Imports & Exports Act, 1947 read with cl. 5 of the Import Control Order, 1955 and each of the accused nos.
2, 3 and 5 are sentenced to pay a fine of Rs. 2,000/ under each count.
Accused No. 1 who is the principal culprit and who was sen tenced by the trial court to imprisonment and fine is sentenced to pay a fine of Rs. 5,000/ under each count.
In default of payment of fine the defaulting accused persons will undergo rigorous imprisonment for three months.
The Company is convicted only under section 5 of the Imports & Exports Act read with cl. 5 of the Import Control Order and sentenced to pay a fine of Rs. 2,000/ .
V.P.S. Appeal allowed.
| Prior to January 18, 1944 six companies including M/s. Lakshmiratan.
Cotton Mills Co. Ltd. (the appellant company) and the Aluminium Corporation of India Ltd. (respondent corporation) were jointly managed by two groups known as the Singhania and Gupta groups.
As a result of disputes between the two groups there was a reference to arbitration.
After January 18, 1944, the date of the award, the aforesaid six concerns were brought under the management and control of one or the other of the two groups The Corporation came under the control and management of the Singhania group.
In cl. 9 of the award it was said that the award did not cover the advances which either party or their separate firms may have made to all or any of them or their moneys which may be in deposit with them and that they would be payable and paid in their usual course.
After the award the appellant Company sent a statement of account in respect of advances made to the respondent corporation, and expenditure incurred on its behalf.
The statement was objected to.
on the ground that the appellant company had not properly maintained its accounts during the period of joint management.
Efforts at reconciliation of accounts having faded the appellants filed two suits claiming Rs. 3,56,207.9.6 and Rs. 72,595.4.6 from the Corporation, being suits Nos. 63 and 65 of 1949.
In suit No. 63 of 1949 it was claimed that the suit was within time as after adjustment of several items in 1946 and 1947 a sum of Rs. 2,96,110. 11.6 was found due to the appellant company and that in any event the suit was saved from being barred by limitation by a letter (exhibit 1) dated April 16, 1946 addressed by s the Secretarycum Chief Accountant of the Corporation, thereby acknowledging the liability of the Corporation to pay the amount which would be found due and payable under the said accounts.
Similar averments were made in, Suit No. 65 of 1949.
The written statements filed on behalf of the Corporation inter alia pleaded that the said claim was barred by limitation, that the said letter didnot amount to an acknowledgement within the meaning of section 19 of theLimitation Act, 1908 which was then applicable to the suits, and lastly,that even if the said letter did amount to an acknowledgement, it wasnot binding on the Corporation.
The trial court decreed the suits but theHigh Court dismissed them as being time barred.
In appeals to this Courtthe questions that fell for consideration were (i) whether the letter in question amounted to an acknowledgment;(ii) whether it was an acknowledgement by the corporation, and if not (iii) whethe 'r the Secretary cum Chief Accountant had authority express or implied.
to acknowledge liability on behalf of the Corporation so as, to bind that corporation.
Allowing the appeals, HELD: (1) (a) From the provisions of section 19(1) of the Limitation Act, 1908 it is clear that the statement on which the plea of acknowledgement is founded must relate to a subsisting liability as the section requires 624 that it must be made before the expiration of the period prescribed by the Act.
It need not, however, amount to a promise to pay, for an acknowledgement does not create a new right of action but merely extends the period of limitation.
The statement need not indicate the exact nature or the specific character of the liability.
The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the partes such as, for instance, that of a debtor and a creditor and the intention to admit such a jural relationship Such an intention need not be in express terms and can be inferred by implication or the nature of the admission and the surrounding circumstances.
Generally speaking a liberal construction of the statement in question should be given.
That of course does not mean that where a statement is made without intending to admit the existence of a particular jural relationship, such an intention should be fastened on the person making the statement by an involved or a far fetched reasoning.
[629 C E] Khan Bchadur Shapoor Freedoom Mazda vs Durga Prosad Chamaria, , Tilak Ram vs Nathu, A.I.R. , 938, 939, Green vs Humphreva, [1884] 26 Ch. D. 474, 481, Tajpal Saraogi vs Lallanjee Jain, C.A. No. 766/62 dt.
8 2 1965 and Abdul Rahim Oosman & Co. vs Ojamshee Prushottamdas & Co., Cal.
6,39, referred to.
(b) From the correspondence between the parties and the surrounding circumstances it must follow that there was a subsisting account in the name of the appellannt company in the books of the Corporation in which interest on the balance shown therein from time to time was being credited and in which amounts in respect of items passed during the course of reconciliation were also duly credited.
The statement in the letter exhibit 1 that "after all the above adjustments the position will be as per statement attached", that is to say, that there 'was a balance of Rs. 107447/13/11 due and payable to the appellant company must clearly amount to acknowledgement within the meaning of section 19(1).
If the letter be looked at in the background of the controversy between the parties which controversy was limited to the question as to the correct ness of the amount claimed by the appellant company as also the correspondence which ensued in regard to it, it would be impossible to say that the letter and the statement of account enclosed therewith were merely explanatory and did not amount to an admission of the jural reship of debtor and creditor and of the liability to pay the amount found due at the foot of the account on finalisation.
[635 D F] The mere fact that letter called for confirmation of the amount of the balance mentioned therein and the fact that the appellant company failed to confirm it, could not lead to a conclusion that the admission of liability was conditional and therefore could not operate as an acknow ledgement.
The confirmation sought in the letter was not a condition to the admission as to the existence of a subsisting account and the liability to pay when accounts were finalised but to the specific amount which according to the corporation would be the amount payable by it according to its calculation. 'There was no condition subject to which the admission was to be made which remained unperformed.
[635 G; 636 F G; 637 B] Maniram vs Rupchand, L.R. 33 I.A. 165, Raja Kayali Arunachella Row Bahadur vs Sri Rajah Rangiah Appa Row Bahadur, Mad.
519 and Ballapragada Ramamurthy vs Thammana Gopayya, Mad. 701, distinguished.
625 LAXMIRATAN COTTON MILLS V. ALUMINIUM CORP. (Shelat, J.) In re River Steamer Co. vs Mitchell, , 828, referred to.
, (ii) The plea that the letter exhibit I should be regarded as an acknowledgement by the corporation itself was not included among the issues formulated before the courts below.
It could not be allowed to be raised for the first time in this Court.
[628 B] (iii) If the correspondence between the parties together with the statements of accounts enclosed therewith was closely examined it became clear that S was authorised to scrutinise the claim made by the appellant company, the various items for which the appellant _company claimed credit and to reject the same and, what is important, to allow others.
That he had such an authority was clear from the fact that in respect of such of the items which he allowed, credit was given to the appellant and necessary entries to the credit of the appellant company were posted in the account maintained by the Corporation in its books of account.
It was impossible to say that in the course of finalising the accounts, S accorded his assent to various items claimed by the appellant company without having been authorised so to do.
Nor was it possible to say that on his passing those items necessary entries were made in the books of accounts of the corporation without his having so authorised.
Further, he could not have sent to the appellant company statements of account showing the balance due to it "as per the ledger" unless he was authorised to finalise the accounts and arrive at the amount due and payable to, the company.
[637 E F; 638 B C] Uma Shankar vs Govind Narain, I.L.R. 46 All. 982, referred to.
|
Civil Appeal No. 2481 of 1978.
Appeal by Special Leave from the Judgment and order dated 10 10 67 of the Jammu and Kashmir High Court in Civil First Appeal No 18 of 1966 Lal Narain Sinha, E. C. Agarwala, M. M. L. Srivastava, R. Satish and Altaf Ahmed for the Appellant.
section N. Andley, B. P. Maheshwari and Suresh Sethi for the Respondent The Judgment of the Court was delivered by FAZAL ALI, J.
This is a plaintiffs ' appeal by special leave against a judgment dated 10th October, 1966 of the Jammu & Kashmir High Court dismissing the plaintiff 's suit.
4 The facts of the case lie within a very narrow compass and after hearing counsel for the parties we propose to decide only one point, viz., the question as to whether or not the plaintiffs were entitled to a decree of ejectment against the defendants in respect of the house in question on the ground of personal necessity, and, therefore, we shall narrate only those facts which are germane for this purpose.
The property in suit was a four storeyed building situated at Maisuma Lal Chowk, Srinagar and belonged to one Peer Ali Mohammad, the ancestor of the plaintiffs.
This building was leased out to the defendants by a registered lease deed dated 1st December 1947 for a period of 10 years.
Under the lease the lessor had provided some furniture and crockery to the lessees.
Furthermore, it was clearly stipulated that the building was leased out for the purpose of running a hotel by the lessees, and for this purpose the lessees were given the right to make suitable alterations in the same, but were prohibited from making any alteration which may affect the durability or damage the building.
On the expiry of the period of the lease, the appellants demanded possession of the building from the respondents and despite certain notices given by the appellants the respondents failed to give possession of the building.
Hence the plaintiff 's suit.
The plaintiffs had taken three main grounds in support of their contention for ejectment of the defendants from the suit premises.
In the first place, the appellants alleged that they required the building in order to extend their business by running a hotel there themselves; secondly, as the lease had expired by efflux of time, the respondents were legally bound to surrender possession.
Thirdly, it was averred by the plaintiffs that the Jammu & Kashmir Houses and Shops Rent Control Act, 1966 (hereinafter referred to as the Act) was wholly inapplicable to the premises in dispute, because the yearly income of the defendants far exceeded Rs. 20,000 and that running a hotel did not fall within the purview of section 2(3) of the Act.
The suit was resisted by the respondents who took, inter alia, a number of objections to the grant of the relief to the appellants.
In the first place, it was pleaded that tho income of the respondents being less than Rs. 20,000/ per year the suit was clearly covered by the Act.
Secondly, it was averred that the definition of the word 'house ' in section 2(3) of the Act was wide enough to include a hotel.
It was next averred that the plaintiffs had no personal necessity and had filed the suit merely for the purpose of getting a higher rent.
Lastly, it was contended that as the plaintiffs required the house for running a hotel, such a purpose did not fall within the ambit of section ll(h) of the Act which applied only to such a case where the landlord required the house for his occupation and, at any 5 rate, having regard to the comparative advantages or disadvantages of the landlord and the tenant, there was no equity on the side of the plaintiffs.
The case was tried by the City Judge, Srinagar who accepted the case of the defendants (respondents) and dismissed the plaintiffs ' suit.
The plaintiffs thereupon filed an appeal before the High Court of Jammu & Kashmir which held that the plaintiffs had not proved their personal plaintiffs filed an application for leave to appeal to this Court and the same having been refused, they obtained special leave of this Court and hence the appeal before us.
In support of the appeal Mr. Lal Narayan Sinha, counsel for the appellants submitted three points.
In the first place, he contended that there was sufficient evidence to indicate that the income of the defendants respondents was more than Rs. 20,000/ a year, and, therefore, the provisions of the Act were not applicable and as the leave has expired due to efflux of time, the plaintiffs were entitled to a decree for ejectment straightway.
Secondly, it was argued that the word 'house ' used in section 2(3) of the Act cannot include a hotel, and, therefore, the Act was not applicable.
Lastly, it was submitted that the High Court committed a grave error of law in holding that the plaintiffs hold not been able to prove personal necessity" although the High Court gave a clear finding that the plaintiffs had undoubtedly proved that they had a strong desire to occupy the building for running a hotel.
It was argued that the finding of the High Court was not based on a discussion of the evidence and circumstances of the case and the High Court has taken an erroneous view of law on the nature of the need of the appellants as also on the question of the comparative advantages or disadvantages of the landlord and the tenant if a decree for eviction followed.
After having heard counsel for the parties we are clearly of the opinion that the appeal must succeed on the third point raised by learned counsel for the appellants, i.e., the question of personal necessity and in this view of the matter we refrain from expressing any opinion on the applicability of the Act to the suit premises as averred by the respondents.
Learned counsel for the appellants contended that there was sufficient material before the Court to show that the plaintiffs did not merely have a desire to occupy the building, but they actually needed the same and their need is both genuine and reasonable.
In this connection, reliance was placed on the evidence of the witnesses for the plaintiffs which does not appear to have been considered by the High Court.
We find that the plaintiffs had clearly mentioned in their plaint 6 that they required the house for the purpose of running the hotel business.
On behalf of the plaintiffs P.W. Mohd. Yusuf had made it absolutely clear that they required the lease property for their personal need as they wanted to run the hotel themselves.
The witness had further explained that this was necessary, because the plaintiffs could not maintain themselves from the income of the leased property.
It is true that the plaintiffs were doing a small business, but the witness had made it clear that their income was very low so much so that they paid income tax of only Rs. 70 to Rs. 80/ per annum.
These facts have not been demolished either in the cross examination of the witness or in the evidence of rebuttal given by the defendants.
The above evidence of the plaintiffs is corroborated by the other witnesses examined by them.
P.W. Girdhari Lal has clearly stated that the plaintiffs want to extend their business and want to have the hotel in their own possession to run the same.
He has further stated that the plaintiffs are running their business on a small scale, and he categorically stated that he had personally observed that there is very little work at the plaintiff 's shop now a days.
That is why they want to run a hotel.
The witness is a neighbour of the plaintiffs.
shop and was, therefore, competent to depose to the facts mentioned above which have not been shaken in cross examination.
P.W. Peer Ahmad Ullah has also stated that now a days people give up other occupations and take up hotel business because hotel business is itself a profitable business.
The witness added that the plaintiff also want to extend their business and start a hotel in this building.
P.W. Ghulam Nabi Dar also says that although the plaintiffs had a l? Boot shop they also want to run the hotel themselves, because their business has become dull.
P W. Ghulam Mohd. whose shop is in front of the shop of the plain tiffs states as follows: "The plaintiffs require the suit property for their own use, as they have been telling me for the last two or four years Previously, the business at Boot shops was running well but now it has become dull.
The plaintiffs intend to run the hotel themselves. . .
As for plaintiffs I say that they are in need of the hotel.
The plaintiffs require the; hotel in order to extend their business".
Another neighbour of the plaintiffs P.W. Yash Paul states that the plaintiffs say that they will start a hotel in the suit property.
He fur 7 ther deposes that there is little work in the shop of the plaintiffs, and, therefore, they want to start a hotel, P.W. Ghulam Mohd. who is the brother in law of P.W. Pir Ali.
Mohd., father of the plaintiffs and was looking after his children on the death of P.W. Pir Ali Mohd. has also stated that the plaintiffs want to start business in the shape of a hotel in the house and they also want to run the shop.
It is, therefore, proved by the evidence discussed above ( 1 ) that the plaintiffs required the house for their personal necessity in order to augment their income, (2) that as their income from the Boot shop is very small and they are not able to maintain themselves.
so they want to run the hotel business in the suit premises.
The High Court has not at all discussed this part of the evidence of the plaintiffs, but at the some time being impressed by the fact that the need of the plaintiffs was genuine the High Court gave a finding to at the plaintiffs had a strong desire to occupy the house and use it for commercial purposes.
Thereafter the High Court appears to have lost itself in wilderness by entering into a hair splitting distinction between desire and need.
Here the High Court has misdirected itself.
If the plaintiffs had proved that their necessity was both genuine and reasonable, that the present premises which belonged to them were required for augmenting their income as the income so far received by them was not sufficient for them to make the two ends meet, there could be no question of a mere desire, but it is a case of real requirement or genuine need.
In fact the irresistible inference which could be drawn from the facts is that the plaintiffs had a pressing necessity of occupying the premises for the purposes of conducting hotel business so as to supplement their income and maintain themselves property.
The Act is a piece of social legislation and aimed at easing the problem of accommodation, protecting the tenants from evictions inspired by profit hunting motives and providing certain safeguards for the tenants and saving them from great expense, inconvenience and trouble.
But the Act does not completely overlook the interest of the landlord and has under certain conditions granted a clear right to the landlord to seek eviction on proof of the grounds mentioned in section 11 of the Act.
Thus, the Act appears to have struck a just balance between the genuine need of the landlord on the one hand and great inconvenience and trouble of the tenant on the other.
It was also not disputed that the defendants had taken the property on lease only for a period of 10 years and now they have been in possession of the same for over 30 years.
If the plaintiffs found that their present business had become dull and was not yielding sufficient income to maintain themselves and, therefore, it was necessary to occupy the house so as to run a hotel business, it cannot by any stretch of imagination be said that the plaintiffs had merely a desire rather than 8 a bonafide need for evicting the tenants.
We therefore, disagree with the finding of he High Court that the plaintiffs had not proved that they had a bonafide need for occupation of the building in dispute.
Moreover section 11(h) of the Act uses the words 'reasonable requirement ' which undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish.
The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire as the High Court has done in this case.
It seems to us that the connotation of the term 'need ' or 'requirement should not be artificially extended nor its language so unduly stretched or strained as to make it impossible or extremely difficult for one landlord to get a decree for eviction.
Such a course would defeat the very purpose of the Act which affords the facility of eviction of the tenant to the landlord on certain specified grounds.
This appears to us to be the general scheme of all the Rent Control Acts, prevalent in other State in the country.
This Court has considered the import of the word requirement and pointed out that it merely connotes that there should be an element of need.
In the case of Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors.
(1) Justice Bhagwati speaking for the Court observed as follows: The District Judge did not misdirect himself in regard to the true meaning of the word 'requires ' in section 13(1) (g) and interpreted it correctly to mean that there must be an element of need before a landlord can be said to 'require ' premises for his own use and occupation.
It is not enough that the landlord should merely desire to use and occupy the premises.
What is necessary is that he should need them for his own use and occupation.
" Thus, this Court has held that in such cases the main test should be whether it was necessary for the landlords to need the premises for their use or occupation.
In the case of B. Balaiah vs Chandoor Lachaiah(2) a Division Bench of the High Court observed as follows: "As long as such requirement is bona fide, the petitioner can certainly claim for a direction for eviction of the tenant".
It had become necessary for us to enter into the evidence led by the plaintiffs, because the High Court has in a general way made a sweeping obvervation that although the plaintiffs had a strong desire, they (1) [1974] I S.C.C. 661 (2) A.I.R 1965 A.P 435. 9 were not able to prove reasonable requirement and the High Court came to this finding without at all considering the evidence of competent and important witnesses examined by the plaintiffs on this point which has been discussed above.
For these reasons, therefore, we are clearly of the opinion that in the instant case the plaintiffs had proved that the requirement for the house for starting a hotel business was both genuine and reasonable and even imperative, because the scanty income of the plaintiffs was not sufficient to maintain them or to afford them a decent or comfortable living.
This brings us to the next limb of the argument of the learned counsel for the respondents regarding the interpretation of section 11 ( 1 ) (h) of the Act.
Section ll(l)(h) of the Act runs thus: 11(1)(h) . . . . where the house or shop is reasonably required by the landlord either for purposes of building or re building, or for his own occupation or for the occupation of any person for whose benefit the house or shop is held; Explanation: The Court in determining the reasonableness of requirement for purposes of building or rebuilding shall have regard to the comparative public benefit or disadvantage by extending or diminishing accommodation, and in determining reasonableness of requirement for occupation shall have regard to the comparative advantage or disadvantage of the landlord or the person for whose benefit the house or shop is held and of the tenant".
It was submitted by Mr. Andley learned counsel for the respondents that the words used in section ll(l)(h) are "that the house should be required by the landlord for his own occupation or for the occupation of and person for whose benefit the house or shop is held.
" It was argued that the words `own occupation ' clearly postulate that the landlord must require it for his personal residence and not for starting any business in the house.
We are, however, unable to agree with this argument.
The provision is meant for the benefit of the landlord and, therefore, it must be so construed as to advance the object of the Act.
The word 'occupation ' does not exclude the possibility of the landlord starting a business or running a hotel in the shop which also would amount to personal occupation by the landlord.
In our opinion, the section contemplates the actual possession of the landlord, whether for his own residence or for his business.
It is manifest that even if the landlord is running a hotel in the house, he is undoubtedly in possession or occupation of the house in the legal sense of the term.
2 817SCI/78 10 Furthermore, the section is wide enough to include the necessity of not only the landlord but also of the persons who are living with him as members or the same family.
In the instant case there can be no manner of doubt that the house was required for the personal residence or occupation of all the three plaintiffs who admittedly were the owners of the house.
The fact that the plaintiffs wanted to occupy the property for running hotel would not take their case out of the ambit of personal necessity as already indicated above, occupation of a house may be required by the owner for personal purposes.
He may choose to reside himself in the house or run a business in the house or use it as a paying guest house and derive income therefrom.
In all these cases even though the owner may not physically reside in the house, the house in law would nevertheless be deemed to be in actual occupation of the owner.
Having regard, therefore, to the circumstances mentioned above, we are unable to subscribe to the view that the words 'own occupation 'must be so narrowly interpreted so as to indicate actual physical possession of the landlord personally and nothing short of that.
We, therefore, overrule the argument of the respondents on this point.
The last argument that was advanced before us by Mr. Andley for the respondents was that taking an overall picture of the various aspects of the present case, it cannot be said that the balance of comparative advantages and disadvantages was in favour of the landlord.
In this connection, our attention was drawn to the evidence led by the defendants that the main source of their income is the hotel business carried on by them in the premises and if they are thrown out they are not likely to get any alternative accommodation.
The High Court has accepted the case of the defendants on this point, but does not appear to have considered the natural consequences which flow from a comparative assessment of the advantages and disadvantages of a landlord and the tenant if a decree for eviction follows.
It is no doubt true that the tenant will have to be ousted from the house if a decree for eviction ii passed, but such an event would happen whenever a decree for eviction is passed and was fully in contemplation of the legislature when section ll(l)(h) of the Act was introduced in the Act.
This by itself would not be a valid ground for refusing the plaintiffs a decree for eviction.
Let us now probe into the extent of the hardship that may be caused to one party or the other, in case a decree for eviction is passed or is refused.
It seems to us that in deciding this aspect of the matter each party has to prove its relative advantages or disadvantages and the entire 11 Onus cannot be thrown on the plaintiffs to prove that lesser disadvantages will be suffered by the defendants and that they were remediable.
This matter was considered by this Court in an unreported decision in the case of M/s Central Tobacco Co. vs Chandra Prakash(l) where this Court observed as follows: "We do not find ourselves able to accept the broad pro position that as soon as the landlord establishes his need for additional accommodation he is relieved of all further obligation under section 21 sub section
(4) and that once the landlord 's need is accepted by the court all further evidence must be adduced by the tenant if he claims protection under the Act.
Each party must adduce evidence to show what hardship would be caused to him by the granting or refusal of the decree and it will be for the court to determine wether the suffering of the tenant, in case a decree was made, would be more than that of the landlord by its refusal.
The whole object of the Act is to provide for the control of rents and evictions, for the leasing of buildings etc.
and section 21 specifically enumerates the grounds which alone will entitle a landlord to evict his tenant.
The onus of proof of this is certainly on the landlord.
We see no Sufficient reason for holding that once that onus is discharged by the landlord it shifts to the tenants making it obligatory on him to show that greater hardship would be caused to him by passing the decree than be refusing to pass it.
In our opinion both sides must adduce all relevant evidence before the court; the landlord must show that other reasonable accommodation was not available to him and the tenant must also adduce evidence to that effect.
It is only after shifting such evidence that the court must form its conclusion on consideration of all the circumstances of the case as to whether greater hardship would be caused by passing the decree than by refusing to pass it".
This case was followed in Phiroze Ramanji Desai vs Chandrakant N. Patel & Ors (supra).
In the case of Kelley vs Goodwin(2) Lynskey, J. Observed as follows: "The next matter one has to consider is whether there was evidence on which the county court judge could come to the conclusion that there would be greater hardship in mak (1) C.A. 1175 of 1969 decided on 23 4 1969.
(2) 12 ing the order than not making the order.
He has taken into account, in relation to that question, first, the position of the landlord, and, secondly, the position of the tenant.
He has taken into account the financial means of the tenant.
It is argued before us that he was wrong in doing that.
In my view, he was quite entitled, in considering hardship, to have regard to the financial means of the tenant in considering whether he could obtain other accommodation because, by reason of his means, he was in a position, not merely to rent, but to buy a house.
It seems to me also that, on this question cf hardship, the judge was entitled to take into account the fact that the tenant had taken no real steps to try and find other accommodation or no real steps to buy a house".
To the same effect is the decision in the case of K. Parasuramaiah vs Pokuri Lakshmamma(1) where a Division Bench of the High Court narrated the mode and circumstances in which the comparative advantages and disadvantages of the landlord and the tenant could be weighed.
In this connection, the Court observed as follows: "Thus the hardship of the tenant was first to be found out in case eviction is to be directed.
That hardship then has to be placed against the relative advantages which the land lord would stand to gain if an order of eviction is passed .
What is however required is a careful consideration of all the relevant factors in weighing the relative hardship which is likely to be caused to the tenant with the likely ad vantage of the landlord on the basis of the available material on record. '.
The proviso however should not be read as if it confers a practical immunity on the tenant from being evicted.
That would destroy the very purpose of Sec. 10(3)(c).
Likewise the requirement of the land lord in accordance with that provision alone cannot be given absolute value, because that would mean to underestimate the value of the proviso to that section.
Keeping in view therefore the purpose of the provision and the necessity of balancing the various factors each individual case has to be decided in the light of the facts and circumstances of that case ' '.
In view of our findings it has been established that the landlords have not only a genuine requirement to possess the house, but it is necessary for them to do so in order to augment their income and maintain themselves properly.
Being the owners of the house they (1) A.I.R. 1965 A.P.220 13 cannot be denied eviction and be compelled to live below the poverty line merely to enable the respondents to carry on their flourishing hotel business, at the cost of the appellants.
This shows the great prejudice that will be caused to the plaintiffs if their suit is dismissed.
The plaintiffs have already produced material before the court to show that their income does not exceed more than Rs. 8000 to Rs. 9000/ per year as the yearly income tax paid by them is Rs. 70 to Rs. 80 only.
There is no other means for them to augment their income except to get their own house vacated by the defendants so as to run a hotel business.
It was vehemently contended by Mr. Andley that there is nothing to show that the plaintiff Mohd. Yusuf or his mother had any experience of running the hotel, and, therefore, it is fruitless to allow them to run the hotel by evicting the respondents.
Mohd. Yusuf is admittedly doing shoe business, and has got sufficient experience of business.
Nothing has been brought on the record to show that he is incapable of running a hotel in the premises.
The building belongs to him and there is Do reason for us to think that he cannot establish a hotel business.
On the other hand the defendants have been running the hotel for the last 30 years and must have made sufficient profits.
To begin with, the defendants had taken the lease only for 10 years which now by virtue of the statute has been extended to 30 years which is a sufficiently long period for which the plaintiffs have been deprived the possession of the house.
There is thus no equity in favour of the respondents for continuing in possession any further.
It was then submitted by Mr. Andley, counsel for the respondents that if the respondents are evicted they will be thrown out on the road; that hotel is the only source of their sustenance and they are not likely to get any alternative accommodation on being evicted.
If the defendants had proved that they will not be able to get any accommodation any where in the city where they could set up a hotel, this might have been a weighty consideration, but the evidence of all the witnesses examined by the defendants only shows that the defendants may not get alternative accommodation in that very locality where the house in dispute is situated.
There is no satisfactory evidence to prove that even in other business localities there is no possibility of the defendants getting a house.
To insist on getting an alternative accommodation of a similar nature in the same locality will be asking for the impossible.
The defendants are tenants and had taken the lease only for 10 years but had overstayed for 20 years and they cannot be allowed to dictate to the landlord that they cannot be evicted unless they get a similar accommodation in the very same locality.
14 G. M. Khan the defendant himself has stated that if he is evicted from the house, he cannot get such a place any where.
Great stress is laid that he must get a house of the size of the house in dispute.
It was suggested to him that if one of the houses of the plaintiffs is given to him that will be sufficient for him, to which he said that the said house situated in Hari Singh High Street is not suitable because he can not run his hotel business there.
The witness has further stated towards the end that the defendants cannot get any place for the purpose of running a hotel in this Ilaqa (locality).
D.W. Ghani Hajam also says that the defendants cannot get any other building for the purpose of the hotel at this place like the one under dispute.
Similarly, D. W. Ghulam Mohd. Khan, another witness for the defendants says that the defendants will not get such a building in this Ilaqa for running a hotel.
D.W. Haji Noor Mohd. also endorses the fact that if the defendants are ejected, it is difficult for them to get such a building in this place.
D.W. Mohd, Ramzan deposes that if the defendants are ejected from the building, they will not get such a building in this locality for running a hotel.
To the same effect is the evidence of D. W. Rasool Dar who says that it is impossible for the defendants to get a house like the suit house for the purposes of running a hotel at the site or nearabout where the suit house is situated.
D. W. Ghulam Mohd. has made a similar statement in his deposition when he says that the defendants will not get such a building nor is there any such building vacant in the locality.
It is true that there are some witnesses like D. W. Aslam Khan, Ghulam Hassan, Mohd. Abdullah Pandey who has said that the defendants might not get any other place for running a hotel but the evidence is extremely vague and nebulous.
D. W. Abdul Kabir however merely says that he had no knowledge that the defendants could get any other house.
Thus, what is established from the evidence of the defendants is that if they are ejected, they might not get a house as big as the house in dispute in the very locality where the disputed house is situated.
There is no clear evidence in the first place to show that there is no other business locality in the city at all or that if there is any other business locality attempts were made by the defendants but they Were unable to get any house.
Furthermore, as indicated above, the plaintiff necessity is imperative and their requirement is undoubtedly reasonable, because the income which they are receiving including the rent of the house which is in the region of Rs. 5000/ per year, is not sufficient to maintain them.
Thus, on a careful comparison and assessment of the relative advantages and disadvantages of the landlord and the tenant it seems to us that the scale is tilted in favour of the plaintiffs.
15 The inconvenience, loss and trouble resulting from denial of a decree for eviction in favour of the plaintiffs far outweigh the prejudice or the inconvenience which will be caused to the defendants.
The High Court has unfortunately not weighed the evidence from this point of view.
Before closing the judgment we would like to observe that normally this Court does not interfere with concurrent findings of facts but as the High Court as also the Trial Court have made a legally wrong approach to this case and have committed a substantial and patent error of law in interpreting the scope and ambit of the words "reasonable requirement" and "own possession" appearing in section 11 (1) (h) of the Act and have thus misapplied the law and overlooked some of the essential features of the evidence as discussed by us, we had to enter into the merits of the case in order to prevent grave and substantial injustice being done to the appellants.
For the reasons given above, the appeal is allowed.
The judgment and decree of the High Court are set aside, and a decree for ejectment of the defendants from the house in dispute is hereby passed against the defendants.
In the peculiar circumstances of this case, there will be no order as to costs.
S.R. Appeal allowed.
| The facts of only one petition are set out because they are similar to facts in other petitions.
Excel Wear is a partnership firm manufacturing garments for export.
About 400 workmen were employed in the petitioners ' factory.
The case of the petitioners is that the relations between the management and the employees started deteriorating and became very strained from 1976.
The workmen became very militant, aggressive, violent and indulged in unjustifiable or illegal strikes.
Various incidents have been mentioned in the Writ Petition in support of the said allegations.
However, since those facts were seriously challenged and disputed by the workmen, the Court did not refer to them in any detail nor expressed any view one way or the other.
(2) According to the petitioners it became almost impossible to carry on the business.
The petitioners, therefore, served a notice dated 2nd May, 1977 on the Government of Maharashtra, respondent No 2 for previous approval of the intended closure of the undertaking in accordance with section 25(O)(1).
The State Government refused to accord the approval on the ground that the intended closure was prejudicial to public interest.
(3 ) The petitioners contended: (a) A right to close down a business is an integral part of the right to carry on a business guaranteed under article 19(1)(g) of the Constitution.
The impugned law imposes a restriction on the said fundamental right which is highly unreasonable.
excessive and arbitrary.
It is not a restriction but almost amounts to the destruction or negation of that right.
The restrictions imposed is manifestly beyond the permissible bounds of article 19(6) of the Constitution.
(b) A right to carry on a business includes a right not to carry on a business which is like any other right mentioned under Article 19(1) such as the right to freedom of speech includes a right not to speak and the right not to form an association is inherent under the right to form association.
(c) The restrictions are unreasonable because (i) Section 25(o) does not require giving of reasons in the order.
(ii) No time limit is to he fixed while refusing permission to close down.
(iii)Even if the reasons are adequate and sufficient, approval can be denied in the purported public interest of security of labour.
Labour is bound to suffer because of unemployment brought about in almost every case of closure.
1010 (iv) It has been left to the caprice and whims of the authority to decide one way or the other.
No guidelines have been given.
(v) Apart from the civil liability which is to be incurred under sub section (5), the closure, however, compulsive it may be, if brought about against the direction given under sub section (2) is visited with penal consequences as provided in section 25 R. (vi) There is no deemed provision as to the according of approval in sub section (2) as in sub section (4).
(vii)Refusal to accord approval would merely mean technically that the business continues but a factory owner cannot be compelled to carry on the business and go on with the production and thus one of the objectives sought to be achieved by this provision cannot be achieved.
(viii)There is no provision of appeal, revision or review of the order even after sometime.
(ix) Restriction being much more excessive than is necessary for the achievement of the object is highly unreasonable.
(x) There may be several other methods to regulate and restrict the right of closure by providing for extra compensation over and above the retrenchment compensation if the closure is found to be mala fide and unreasonable.
(xi) To direct the employer not to close down is a negation of the right to close.
It is not regulatory.
(xii)If carrying on any business is prohibited in public interest, a person can do another business.
But to prohibit the closure of a running business is destruction of the right to close.
(xiii) The reasonableness of the impugned restrictions must be examined both from procedural and substantive aspects of the law.
Sub section (2) of section 25 D does not make it obligatory for any higher authority of the Government to take a decision.
It may be taken even by a lower officer in the hierarchy.
(4) The respondents ' contentions: (a) Some counsel for the respondents did not dispute that the right to close down a business is an integral part of the right to carry on a business.
They however, contended that the restrictions imposed by the impugned law are quite reasonable and justified to put a stop to the unfair labour practice and for the welfare of the workmen.
It is a progressive legislation for the protection of a weaker section of society.
(b) Some other counsel for the respondents, however, did not accept that a right to close down a business is an integral part of the right to carry on any business.
According to them, the total prohibition of closure only affects a part of the right to carry on the business and not a total annihilation of this.
The restriction imposed was in public interest and there is a presumption of reasonableness in favour of a statute.
Reliance was also placed on social and welfare legislation as expounded by renowned jurists and judges abroad.
It was also contended that the legislation was protected by Article 31C of the Constitution.
1011 (5) Allowing the petitions, the Court ^ HELD: The right to close down a business cannot be equated with a right not to start or carry on n business at all.
The extreme proposition urged on behalf of the employer by equating the two rights and placing them at par is not quite apposite and sound.
If one does not start a business at all, then perhaps under no circumstances, he can be compelled to start one.
Such a negative aspect of a right to carry on a business may be equated with the negative aspect of the right embedded in the concept of the right to freedom of speech, to form an association or to acquire or hold property.
Perhaps under no circumstances, a person can be compelled to speak, to form an association or to acquire or hold a property.
But by imposing reasonable restrictions, he can be compelled not to speak, not to form an association or not to acquire or not to hold property.
A total prohibition of business is possible by putting reasonable restrictions under Article 19(6) on the right to carry on a business.
[1027 B D, 1028 A] Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner, Ajmer & Ors.; ; ; Narendra Kumar & ors.
vs The Union of India & ors. ; relied on.
However, the greater the restriction, the more the need for strict scrutiny by the Court.
The contention put forward on behalf of the labour unions that the right to close down a business is not an integral part of the right to carry on a business or that it is not a fundamental right at all is also wrong.
In one sense the right does appertain to property.
But such a faint overlapping of the night to property engrafted in article 19(1)(f) or article 31 must not be allowed to cast any shade or eclipse on the simple nature of the right.
However, the right to close down is not an absolute right.
It can certainly be restricted, regulated or controlled by law in the interest of the general public.
[1027 1028 A C] Concept of socialism or socialistic state has undergone changes from time to time, from country to country and from thinkers to thinkers.
But some basic concept still holds the field.
In the case of Akadasi Padhan the question for consideration was whether a law creating a state monopoly is valid under the latter part of Article 19(6).
The Court pointed out the difference between the doctrinaire approach to the problem of socialism and the pragmatic one.
But so long as the private ownership of an industry is recognised governs an overwhelmingly large proportion of our economic structure, it is not possible to say that principles of socialism and social justice can be pushed to such an extreme so as to ignore completely or to a very large extent the interests of another section of the public namely the private owners of the undertakings.
[1030 G H. 1031 E G] Akadasi Padhan vs State of Orissa, [1963] Suppl.
2 SCR 691 referred to.
There are creditors and depository and various other persons connected with or having dealings with the undertaking, whose rights are also affected by the impugned legislation.
[1031 G] Section 25 O (2) does not require the giving of reasons in the order.
In two of the orders in the present cases, it is merely stated that the reasons for the intended closure are prejudicial to public interest suggesting thereby that the reasons given by the employers are correct, adequate and sufficient, yet they are prejudicial to the public interest.
In case of bona fide closures, it would be 1012 generally so.
Yet the interest of labour for the time being is bound to suffer because it makes a worker unemployed.
Such a situation as far as reasonably possible should be prevented.
Public interest and social justice do require the protection of the labour.
But it is not reasonable to give them protection against all unemployment after affecting the interests of so many persons interested including persons who have no connection with the management.
It is not possible to compel the employers to manage the undertaking even if they find that it is not safe or practicable to do so.
They cannot be asked to go on facing tremendous difficulties of management even at the risk of their person and property.
They cannot be compelled to go on incurring losses year after year.
[1032 C F] In the third Writ Petition, the Government has given two reasons, for refusing to grant permission.
Both of them are too vague to give an exact idea in support of the refusal of permission, to, close down.
It says that the reasons are not adequate and sufficient and that the intended closure is prejudicial to the public interest.
The latter reason will be universal in all cases of closure.
The former demonstrates to what extent the order can be unreasonable.
If the reasons given by the petitioner in great detail are correct, as the impugned order suggests they are, it is preposterous to say that they are not adequate and sufficient for a closure.
Such an unreasonable order was possible to be passed because of the unreasonableness of the law.
Whimsically and capriciously, the authority can refuse permission to close down.
[1033 B E] If the Government order is not communicated to the employer within 90 days, strictly speaking, criminal liability in section 25(R) may not be attracted, if on the expiry of that period an employer closes down the undertaking.
But it seems the civil liability under Section 25(O) (5) will come into play even after the passing of the order of refusal of permission to close down on the expiry of the period of 90 days.
Provision in Chapter V(B) of the Act suggests that the object of carrying on production can be achieved by the refusal to grant permission although in the objects and reasons of the amending act such an object seems to be there although remotely and secondly it is highly unreasonable to achieve the object by compelling the employee not to close down in public interest for maintaining production.
The order passed by the authority is not subject to any scrutiny by any higher authority or tribunal either in appeal or revision.
The order cannot be reviewed either.
[1033 F H, 1034 A B] It is not always easy to strike the balance between the parallel and conflicting interest, and it is not fair to unreasonably tilt the balance in favour of one interest by ignoring the other.
In the case of fixation of minimum wages this Court has repeatedly rejected the contention of the employers that he has no capacity to pay minimum wages and therefore his right to carry on the business is affected.
[1034E, 1035 A B] U. Unichoyi & Ors.
vs The State of Kerala. ; relied on.
But this principle, rather, in contrast, illustrates the unreasonableness of the present impugned law.
Nobody has got a right to carry on business if he cannot pay even the minimum wages.
He must then retire from business, But to tell him to pay and not to retire if he cannot pay is pushing the matter to an extreme.
It has been observed that where an industry had been closed and the closure was real and bona fide, there cannot be an industrial dispute after closure.
[1035 B D] 1013 Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union, referred to.
The law may provide to prevent and regulate unfair unjust or mala fide closure.
[1036 C] The reasonableness has got to be tested both from the procedural and substantive aspects of the law.
It is true that Chapter V (B) deals with certain comparatively bigger undertakings and for a few types only but with all this it has not made the law reasonable.
It may be a reasonable law for saving the law from violation of article 14 but certainly it does not make the restriction reasonable within the meaning of article 19(6).
Not to permit the employer to close down is essentially an interference with the fundamental right to carry on the business.
[1036 D, H, 1037 A, G] If a law is otherwise good and does not contravene any of the fundamental rights of the non citizens, non citizens cannot take advantage of the voidness of law for the reason that it contravenes the fundamental rights of the citizens and claim that there is no law at all.
In the case of Ambica Mills this Court has not said that even if there is violation of the fundamental rights guaranteed by article 19(1)(b) and not saved by clause (6) of the said right has been conferred only on the citizens of India and not upon the corporate bodies like a company.
[1()38 A D] State of Gujarat and Anr.
vs Shri Ambica Mills Ltd., Ahmedabad, etc.
; explained.
Bennet Coleman & Co. & ors.
vs Union of India & Ors.
, ; , Rustom Cavasjee Cooper vs Union of India, ; relied on.
It was laid down in the case of Bennet Coleman & Co. & Ors.
and Rustom Cavasjee Cooper that if a shareholder 's right is impaired the State cannot impair the right of the shareholder as well as of the company and the Court can strike down the law for violation of fundamental right guaranteed only to the citizens if the challenge is by the company as well as by the shareholders.
The partners can challenge the validity in the name of firm.
In the present case where company is petitioner a shareholder has also been joined with the company to challenge the law. [1038 E F, H, 1039 A] The impugned law is not for giving effect to the policy of the State towards securing any of the principles in Articles 39(1) or 41.
The law does not fit in with the said directive principles.
The argument that it is protected by article 31(C) is not sustainable.
The amendment was prospective and not retrospective.
[1039 H, 1040 A B, E] The argument that when the amendment was brought the proclamation of emergency was in operation and thereafter before emergency was lifted, the amend article 31C had come into force and thus by the continuous process the latter became immune on the ground of violation of article 19 is not maintainable.
[1042 C] As soon as the emergency is lifted the law becomes bad because it was bad when it was enacted, although it could not be taken to be so during the period 1014 of Emergency.
Therefore, article 31C cannot protect the law.
Apart from the fact that article 31C has no application the law was bad for violation of article 19(1)(b) when it was enacted but it was not taken to be bad during the period of emergency.
Its invalidity sprouted out with full vigour on the lifting of emergency.
[1041 H, 1042 C D] Keshavan Madhava Menon vs The State of Bombay, ; Dhirubha Devi Singh Gohil vs The State of Bombay ; ; M.P.V. Sunderaramier & Co. vs The State of A. P. & Anr., ; , Jagannath etc., etc.
vs Authorised Officer, Land Reforms and Ors.
; , ; distinguished.
Bhikaji Narain Dhakras and Ors vs The State of M.P. & Anr., ; ; Basheshar Nath vs The Commissioner of Income Tax, Delhi and Rajasthan and Anr., [1959] Suppl.
1 SCR 528; Deep Chand vs The State of U.P. & ors.
, [1559] Suppl.
2 SCR 8; Mahendra Lal Jaini vs The State of U.P. and ORS.
, [1963] Suppl.
1 SCR 912 referred t(b.
The Court declared section 25 (o) as a whole and Section 25R in so for as it relates to the awarding of punishment for infringement of the provisions of Section 25(o) constitutionally bad and invalid for violation of article 19(1) of the Constitution.
The Court declared the impugned order passed in all the cases to be void and restrained the respondents from enforcing them.
The Court however did not express any opinion on the merits of the case, since the orders fall on the ground of constitutional invalidity.
[1046 A C]
|
Appeal No. 107 of 1960.
Appeal by special leave from the judgment and order dated September 21, 1959, of the Mysore High Court, Bangalore, in Misc.
Appeal No. 68 of 1959.
Purshottam Prikamdas, section N. Andley, J. B. DadaChanji, Rameshwar Nath and P. L. Vohra, for the appellant.
715 K. R. Karanth and Naunit Lal, for the respondent.
April 27.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
The respondent, Pothan Joseph, who was working as the Editor of the Deccan Herald owned and published by the appellant, The ' Printers (Mysore) Private Ltd., in Bangalore has filed a suit against the appellant on two contracts executed between the parties on April 1, 1948, and February 20, 1953, respectively, and has claimed accounts of the working of the Deccan Herald newspaper from April 1, 1948, to March 31, 1958, as well as payment of the amount that may be found due to him from the appellant tinder the provisions of cls.
2(d) and 1(d) of the said contracts.
The services of the respondent were terminated by the appellant by its letter dated September 28, 1957, in which the respondent was told that the termination would take effect from March 31, 1958.
However, by a subsequent letter written by the appellant to the respondent on March 17, 1958, the respondent was told that his services had been terminated with immediate effect and he was asked to hand over charge to his successor, Mr. T. section Ramachandra Rao.
Thereafter on July 14, 1958, the respondent, filed the present suit against the appellant.
The appellant contended that the two contracts on which the respondent 's claim was based were subject to an arbitration agreement, and so it was not open to the respondent to file the present suit against the appellant.
The appellant, therefore, requested the Court under section 34 of the Indian , (hereinafter called the Act), to stay the proceedings initiated by the respondent and refer the dispute to arbitration in accordance with the arbitration agreement between the parties.
The learned trial judge who heard the appellant 's application, however, exercised his discretion against it and refused to stay the proceedings in the respondent 's suit.
Thereupon the appellant preferred an appeal in the Mysore High Court but his appeal failed and the High Court confirmed the order passed by the trial court though for different reasons.
The High 716 Court, however, thought that the learned trial judge, in dealing with the appellant 's application " bad gone much further than he should have done, and hence it was desirable that the case should be tried by some other judge ".
The respondent did not object, and so the High Court directed that the suit may be transferred to the file of the Additional Civil Judge, Bangalore.
The appellant then applied to the High Court for a certificate.
His application was, however, rejected on the ground that the decision under appeal could not be considered as a judgment, decree or final order under article 133(1) of the Constitution ; on that view it was thought unnecessary to decide whether on the merits the case was fit to be taken in appeal to this Court.
Then the appellant applied for and obtained special leave from this Court.
That is how this appeal has come before us; and the substantial point which arises for our decision is whether the courts below were in error in refusing to stay the suit filed by the respondent against the appellant in view of the arbitration agreement between them.
Before we deal with the merits of the contentions raised by the parties in this appeal it is necessary to set out briefly the relevant facts leading to the present litigation.
The appellant is a printing company and it owns and publishes the Deccan Herald in English and Prajavani in Kannada at Bangalore.
By a contract dated April 1, 1948, the appellant engaged the respondent as Editor of the Deccan Herald for a period of five years on terms and conditions specified in the said contract.
As provided by el.
(5) of the said contract the period of the respondent 's employment was extended by another five years by a subsequent contract entered into between the parties on February 20, 1953.
As we have already mentioned the services of the respondent came to be terminated abruptly on March 17, 1958.
It appears that by his letter dated October 16, 1957, the respondent made certain claims against the appellant under the provisions of the Working Journalists Act.
Besides, he demanded 1/10th of the profits made by the Deccan Herald from 1948 up to the date of the termination of his service under the two respective contracts.
This claim was 717 denied by the appellant.
Correspondence then ensued between the parties but since no common ground was discovered between them the respondent filed the present suit.
His case is that the two contracts entitled him to claim 1/10th of the profits made by the Deccan Herald during the period of his employment,, and so he claims an account of the said profits and his due share in them.
The learned trial judge found that the respective contentions raised by the parties before him showed that there was no dispute as such between them which could attract the arbitration agreement.
He also held that an attempt was made by the parties to settle their differences amicably through the mediation of Mr. Behram Doctor but the said attempt failed because the appellant was not serious about it and was just trying " to protract, defeat and delay the plaintiff 's moves".
According to the learned trial judge a plea of limitation would fall to be considered in the present suit and it was desirable that the said plea should be tried by a competent court rather than by arbitrators.
He was, however, not impressed by the respondent 's contention that his character had been impeached by the appellant and so he should be allowed to vindicate his character in a trial before a court rather than before the arbitrators.
In dismissing the appellant 's claim for stay of the suit the learned judge observed that if the accounts of the Deccan Herald had not been separately maintained it would be competent for a qualified accountant to allocate expenses and capital expenses among the different activities of the appellant and then very little would be left for arbitrators to decide.
He had no doubt that the contract by which the respondent was entitled to claim 1/10th share in the profits of the Deccan Herald necessarily postulated that the accounts of the Deccan Herald would be separately maintained.
On these considerations the trial judge refused to stay the suit.
When the matter went in appeal the High Court held that the dispute between the parties did not fall within the arbitration agreement.
The High Court also considered the other points decided by the trial court; it held that Mr, Behram Doctor had not been 93 718 appointed as an arbitrator between the parties and that the proceedings before him merely showed that the parties were exploring the possibility of having an arbitration.
It observed that the appellant company was a big concern and referred to the respondent 's apprehension that it was in a position to dodge the respondent 's claim.
However, the High Court was not impressed by these apprehensions, and it was not inclined to find fault with the conduct of the appellant in the trial court.
It was also not satisfied that the question of limitation which would arise in the suit as well as the question of interpreting the contracts could not be properly tried by arbitration.
It recognised that there had been a complete change of front on the part of the appellant in regard to the pleas raised by the appellant under the arbitration agreement when the matter was discussed before Mr. Behram Doctor, and when it reached the court in the form of the present suit.
The High Court then considered other facts which it thought were relevant.
It stated that there was great deal of bad blood between the parties and there was no meeting ground between them.
The appellant 's plea that recourse to arbitration may help an early disposal of the dispute did not appeal to the High Court as sound, and so, on the whole, the High Court thought that the order passed by the trial court refusing to stay the proceedings in suit should be confirmed.
The appellant contends that the reasons given by the High Court in refusing to stay the suit are not convincing and that the discretion vesting in the High Court in that behalf has not been properly or judiciously exercised.
Section 34 of the Act confers power on the court to stay legal proceedings where there is an arbitration agreement subject to the conditions specified in the section.
The conditions thus specified are satisfied in the present case, but the section clearly contemplates that, even though there is an arbitration agreement and the requisite conditions specified by it are satisfied, the court may nevertheless refuse to grant stay if it is satisfied that there are sufficient reasons why the matter should not be referred in accordance with the arbitration agreement.
In other words, the power to 719 stay legal proceedings is discretionary, and so a party to an arbitration agreement against whom legal proceedings have been commenced cannot by relying on the arbitration agreement claim the stay of legal proceedings instituted in a court as a matter of right.
It is, however, clear that the discretion vested in the court, must be properly and judicially exercised.
Ordinarily where a dispute between the parties has by agreement between them to be referred to the decision of a domestic tribunal the court would direct the parties to go before the tribunal of their choice and stay the legal proceedings instituted before it by one of them.
As in other matters of judicial discretion, so in the case of the discretion conferred on the court by section 34 it would be difficult, and it is indeed inexpedient, to lay down any inflexible rules which should govern the exercise of the said discretion.
No test can indeed be laid down the automatic application of which will help the solution of the problem of the exercise of judicial discretion.
As was observed by Bowen, L. J., in Gardner vs Jay (1) " that discretion, like other judicial discretion, must be exercised according to common sense and according to justice.
" In exercising its discretion under section 34 the court should not refuse to stay the legal proceedings merely because one of the parties to the arbitration agreement is unwilling to go before an arbitrator and in effect wants to resile from the said agreement, nor can stay be refused merely on the ground that the relations between the parties to the dispute have been embittered or that the proceedings before the arbitrator may cause unnecessary delay as a result of the said relations.
It may not always be reasonable or proper to refuse to stay legal proceedings merely because some questions of law would arise in resolving the dispute between the parties.
On the other hand, if fraud or dishonesty is alleged against a party it may be open to the party whose character is impeached to claim that it should be given an opportunity to vindicate its character in an open trial before the court rather than.
before the domestic tribunal, and in a proper case the.
court may consider that fact as relevant for deciding (1) 58, 720 whether stay should be granted or not.
If there has been a long delay in making an application for stay and the said delay may reasonably be attributed to the fact that the parties may have abandoned the arbitration agreement the court may consider the delay as a relevant fact in deciding whether stay should be granted or not.
Similarly, if complicated questions of law or constitutional issues arise in the decision of the dispute and the court is satisfied that it would be inexpedient to leave the decision of such complex issues to the arbitrator, it may, in a proper case, refuse to grant stay on that ground; indeed, in such cases the arbitrator can and may state a special case for the opinion of the court under section 13(b) of the Act.
Thus, the question as to whether legal proceedings should be stayed under section 34 must always be decided by the court in a judicial manner having regard to the relevant facts and circumstances of each case.
Where the discretion vested in the court under section 34 has been exercised by the trial court the appellate court should be slow to interfere with the exercise of the said discretion.
In dealing with the matter raised before it at the appellate stage the appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion.
If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court 's exercise of discretion.
As is often said, it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial judge; but if it appears to the appellate court that in exercising its discretion the trial court has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach then it would certainly be open to the appellate court and in many cases it may be its duty to interfere with the trial court 's exercise of discretion.
In cases falling under this class the exercise of discretion by the trial 721 court is in law wrongful and improper and that would certainly justify and call for interference from the appellate court.
These principles are well established; but, as has been observed by Viscount Simon, L. C., in Charles Osenton & Co. vs Johnston (1) " the law as to the reversal by a court of appeal of an order made by a, judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case".
In the present case there is one more fact which has to be borne in mind in dealing with the merits of the controversy before us.
The appellant has come to this Court by special leave under article 136; in other words, the appellant is not entitled to challenge the correctness of the decision of the High Court as a matter of right.
It is only in the discretion of this Court that it can be permitted to dispute the correctness or the propriety of the decision of the High Court, and so in deciding whether or not this Court should interfere with the order under appeal it would be relevant for us to take into account the fact that the remedy sought for by the appellant is by an appeal which is a discretionary matter so far as this Court is concerned.
It is in the light of these principles that we must consider whether or not the appellant 's complaint against the High Court 's order can be upheld.
The first point which calls for a decision relates to the construction of the contracts between the parties.
As we have already stated two contracts were executed between them but their terms are substantially the same and so we may deal with the subsequent contract which was executed on February 20, 1953 (P. 2).
Under this contract the respondent was engaged as the Editor of the Deccan Herald and his salary was fixed at Rs. 1,500 permensem under paragraph 1 (a).
Paragraph 1(b) and (c) deal with the other amenities to which the respondent was entitled.
Clause (d) of paragraph 1 provides that when the newspaper shows a profit in the annual accounts the Editor shall be entitled to 1/10th share of it is on this clause that the respondent 's claim in the present proceedings is (1) , 138.
722 based.
The terms on which the respondent had to remain in the service of the appellant are specified in paragraph 2(a) and (b).
Paragraph 3 provides for the renewal of the contract for a further period of five years if it is found that such renewal is for the mutual advantage of the parties.
This paragraph also provides that during the continuance of his employment the respondent shall not directly or indirectly be interested in any other newspaper business than that of the appellant or any other journalistic activities in competition with that of the appellant.
It also stipulates that if the contract is determined the respondent shall not for a period of three years thereafter be directly or indirectly interested in any newspaper business of the same kind as is carried on by the appellant within the Mysore State.
It would thus be seen that this paragraph shows the liability imposed on the respondent as a consideration for the benefit conferred on him by paragraph 1 in general and cl.
(d) of the said paragraph in particular.
Paragraph 4 contains an arbitration agreement.
It provides that if in the interpretation or application of the contract any difference of opinion arises between the parties the same shall be referred to arbitration.
The arbitrator can be named by both the parties but if they failed to choose the same person each side will choose an arbitrator and the two will elect another person to complete the panel.
Their award shall be final and binding on both the parties.
The High Court has held that the present suit is outside the arbitration agreement because neither party disputes the applicability of the terms of the contract in the decision of the dispute.
The High Court thought that in the context the words 'application of the contract ' meant a dispute as to the applicability of the contract, and since the applicability of the contract was not in question and no dispute as to the interpretation of the contract arose, the High Court held that paragraph 4 was inapplicable to the present suit.
Mr. Purshottam, for the appellant, con.
tends that the construction placed by the High Court on the word " application " is erroneous.
According to him, any difference of opinion in regard to the application of the contract must in the context mean 723 the, working out of the contract or giving effect to its terms.
In our opinion, this contention is well founded.
The words 'interpretation or application of the contract ' are frequently used in arbitration agreements and they generally cover disputes between the parties in regard to the construction of the relevant terms of the contract as well as their effect, and unless the con ' text compels a contrary construction, a dispute in regard to the working of the contract would generally fall within the clause in question.
It is not easy to appreciate what kind of dispute according to the High Court would have attracted paragraph 4 when it refers to a difference of opinion in the application of the contract.
Since both the parties have signed the contract the question about its applicability in that form can hardly arise.
Differences may, however, arise and in fact have arisen as to the manner in which the contract has to be worked out and given effect to, and it is precisely such differences that are covered by the arbitration agreement.
We would accordingly hold that the High Court was in error in coming to the conclusion that the present dispute between the parties was outside the scope of paragraph 4 of the contract.
If the High Court had refused to stay the present proceedings only on this ground the appellant would no doubt have succeeded; but the High Court has based its decision not only, nor even mainly, on the construction of the contract.
The tenor of the judgment suggests that the High Court considered the other relevant facts to which its attention was invited and the material findings recorded by the trial judge, and though it differed from some of the findings of the trial judge, on the whole it felt no difficulty in coming to the conclusion that there was no reason to interfere with the trial court 's exercise of discretion under section 34.
That is why, even though the appellant has succeeded before us on the question of the construction of the arbitration agreement, having regard to the limits which we generally impose on the exercise of the jurisdiction under article 136, he must still satisfy us that we would be justified in interfering with the concurrent exercise of discretion by the two courts below, and that would inevitably depend upon the other 724 relevant facts to which both the courts have referred, and on which both of them have relied though in different ways.
What then are the broad features of the case on which the trial judge and the High Court have respectively relied ? It is clear that the present dispute is not the result of an ordinary commercial transaction containing an arbitration clause.
The contract in question is between a journalist and his employer by which the remuneration of the journalist has been fixed in a somewhat unusual manner by giving him a specified percentage in the profit which the Deccan Herald would make from year to year.
According to the respondent he was surprised when the General Manager of the paper informed him that 75% of the overall expenditure incurred in the several activities of the appellant was being charged to the Deccan Herald, and that the capital liabilities were charged in the same proportion; he thought that this system of accounting adopted by the appellant was repugnant to the material provisions in his contract.
Indeed his case is that after he came to know about this system he protested to the Director, Mr. Venkataswamy, who has been taking active part in the affairs of the appellant, and Mr. Venkataswamy assured him that as from the beginning of 1955 the accounts were being separately maintained.
It would appear that the information received by the respondent from the General Manager disillusioned him and that appears to be the beginning of the present dispute, according to the respondent 's letter of May 24, 1955, (D. 1).
On February 18, 1956, the respondent invoked the arbitration agreement and told Mr. Venkataswamy that Mr. Behram Doctor had agreed to work as arbitrator and give his award (D. 2).
Mr. Venkataswamy who was addressed by the respondent as the Managing Director told him by his reply of March 5, 1956, that he was not the Managing Director and added that in his ' view it was not open to the respondent to invoke cl. 4 of the contract because he was aware that no monies were payable to the respondent under el. 1(d).
It would thus be seen that Mr. Venkataswamy 's immediate response to the res pondent 's request for arbitration was that the respon 725 dent could not invoke the arbitration clause (D. 3).
It is true that on April 23, 1956, Mr. Venkataswamy attempted to explain this statement by saying that all that he intended to suggest was that no occasion for invoking the arbitration agreement had arisen.
That, however, appears to be an unsatisfactory explanation (D. 10).
Even so, Mr. Venkataswamy agreed to meet Mr. Behram Doctor and so on March 9, 1956, the respondent gave to Mr. Venkataswamy the address of Mr. Behram Doctor and asked him to see him (D. 5).
He informed Mr. Behram Doctor accordingly (D. 6).
It appears that subsequently Mr. Behrain Doctor met both the respondent and Mr. Venkataswamy on May 9, 1956.
The proceedings of this meeting which have been kept by Mr. Behram Doctor and copies of which have been supplied by him to both the parties indicate that Mr. Behram Doctor attempted to mediate between the parties and presumably the parties were agreeable to secure the mediation of Mr. Behram Doctor to resolve the dispute.
We ought to add that the copy of the said proceedings produced by the appellant contains a statement that Mr. Venkataswamy at the outset told Mr. Behram Doctor that he had; come on an unofficial visit and was speaking without the consent of the other directors.
This statement is, however, not to be found in the copy supplied by Mr. Behram Doctor to the respondent.
Prima facie it is not easy to understand why Mr. Behram Doctor should have omitted this material statement in the copy supplied by him to the respondent.
That, however, is a matter which we do not propose to pursue in the present appeal.
It is thus clear that though Mr. Behram Doctor was not appointed an arbitrator and no reference in writing was made to him an attempt was made by the parties to settle the dispute with the assistance of Mr. Behram Doctor, and that attempt failed.
Having regard to the facts which have come on the record it may not be unreasonable to infer that the appellant was not too keen to pursue the matter on the lines originally adopted by both the parties before Mr. Behram Doctor.
It also appears that for some years the, accounts of the Deccan Herald had not been separately kept as 94 726 they should have been according to the respondent 's case.
The respondent alleges that they have not been kept separately throughout the ten years ; but that is a matter which is yet to be investigated.
If the accounts are not separately kept the question of allocating expenditure would inevitably arise and that can be decided after adopting some ad hoc principle in that behalf.
A plea of limitation has also been indicated by the appellant and it has been suggested that the first contract having merged in the second it is only under the latter contract that the respondent may have a cause of action.
"Thus the effect of the two contracts considered together may have to be adjudged in dealing with the question of limitation.
It has also been suggested that the respondent knew how the accounts were kept from year to year and in substance he may be deemed to have agreed with the method adopted in keeping the accounts.
If this point is raised by the appellant it may involve the decision of the question about the effect of the respondent 's conduct on his present claim.
The appel lant has also suggested that the respondent has adopted an attitude of blackmailing the appellant and the respondent treats that as an aspersion on his character.
The relations between the parties have been very much embittered and the respondent apprehends that the appellant, being a powerful company, may delay and seek to defeat the respondent 's claim by protracting the proceedings before the arbitrators.
It now looks impossible that the parties would agree to appoint one arbitrator, and so if the matter goes before the domestic tribunal the two arbitrators appointed by the two parties respectively may have to nominate a third one to complete the constitution of the domestic tribunal, and that it is said may easily lead to a deadlock.
In the trial court attempts were made to settle this unfortunate dispute but they failed and the respondent 's grievance is that the appellant adopted an unhelpful and noncooperative attitude.
It appears fairly clear that when the parties entered into the present contract and agreed that differences between them in regard to the interpretation and application of the contract should be referred to 727 arbitration they did not anticipate the complications which have subsequently arisen.
That is why an arbitration agreement may have been introduced in the contract in question.
All these facts have been considered by both the courts, and though it is true that in their approach and final decisions in respect of these facts the two courts have differed in material particulars, they have in the result agreed with the conclusion that the discretion vested in them should be exercised in not granting stay as claimed by the appellant.
Under these circumstances we do not think we would be justified in substituting our discretion for that of the courts below.
It may be that if we were trying the appellant 's application under section 34 we might have come to a different conclusion; and also that we may have hesitated to confirm the order of the trial court if we had been dealing with the matter as a court of first appeal; but the matter has now come to us under article 136, and so we can justly interfere with the concurrent exercise of the discretion by the courts below only if we feel that the said exercise of discretion is patently and manifestly unreasonable, capricious or perverse and that it may defeat the ends of justice.
Having regard to all the circumstances and facts of this case we are not disposed to hold that a case for our interference has been made out by the appellant.
That is why we dismiss this appeal but make no order as to costs throughout.
Appeal dismissed.
| The respondent was the Editor of the Deccan Herald, owned and published by the appellant, and the two contracts executed by the parties contained an arbitration clause that if in the interpretation or application of the contract any difference arose between the parties the same shall be referred to arbitration and the award shall be binding between the parties and also provided for, apart from his monthly salary, the payment of 10% of the profits to the respondent.
Upon the termination of his services by the appellant, the respondent brought a suit for accounts and payment of the profits found due to him.
The appellant by an 714 application pleaded that the suit ought to be stayed under section 34 of the , and the dispute referred to arbitration in accordance with the agreement between the parties.
The trial judge refused to exercise his discretion in favour of the appellant and refused to stay the suit.
On appeal the High Court confirmed the decision of the trial court.
The appellant came up to this Court by special leave under article 136 of the Constitution: Held, that the power conferred on the court by section 34 Of the , is discretionary and even though the conditions specified therein were fulfilled no party could claim there under a stay of legal proceedings instituted in a court as a matter of right.
But the discretion vested in the court is a judicial discretion and must be exercised as such in the facts and circumstances of each case.
No inflexible rules can, therefore, be laid down f or its exercise and the court has to act according to common sense and justice.
Gardner vs Jay, , referred to Where the discretion under the section has been properly and judiciously exercised by the trial court the appellate court would not be justified in interfering with such exercise of discretion merely on the ground that it would have taken a contrary decision if it had considered the matter at the trial stage.
But if it appears to the appellate court that the trial court has exercised its discretion unreasonably or capriciously or has ignored relevant facts or has approached the matter unjudiciously, it would be its duty to interfere.
Charles Osenton & Co. vs jhanaton, , referred to.
The words " interpretation and application of the contract frequently used in arbitration clauses, as they have been in the contracts in question, cover not only disputes relating to the construction of the relevant terms of the contract but also their effect, and unless the context compels a contrary construction, a dispute relating to the working of the contract falls within such a clause.
But the Supreme Court would not lightly interfere under article 136 of the Constitution with the concurrent exercise of dis cretion of the courts below under section 34 Of the Act.
Before it can justly do so, the appellant must satisfy the Court, on the relevant facts referred to by the courts below, that they exercised their discretion in a manifestly unreasonable or perverse way which was likely to defeat the ends of justice.
|
minal Appeal No. 190 of 1962.
Appeal by special leave from the judgment and order dated September 27, 1962 of the Punjab High Court in Criminal Revision No. 1172 of 1962.
Nanak Chand, for the appellant.
Gopal Singh, R.N. Sachthey and R.H. Dhebar, for the respondent.
April 10, 1964.
The Judgment of Subba Rao and Das Gupta JJ. was delivered by Subba Rao J. Raghubar Dayal, J. delivered a dissenting Opinion.
678 SUBBA RAO, J.
This appeal by special leave raises the question of jurisdiction of an appellate court to exercise its power under s.6 of the (Act, No. 20 of 1958), hereinafter called the Act, in respect of an accused who was convicted by the trial court before the Act The facts are not now in dispute.
The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years.
He was sent up for trial before the Magistrate, First Class, Palwal.
The said Magistrate, on May 31, 1962, convicted him under sections 451 and 354 of the Indian Penal Code and sentenced him to six months ' rigorous imprisonment under each count and directed that the sentences should run concurrently.
He further imposed a fine of Rs. 200/ on the appellant under section 451 of the Indian Penal Code and ordered that, in default of payment of fine, he should undergo rigorous imprisonment for two months.
The appellant was 16 years old at the time of his conviction.
The Act was extended to Gurgaon District on September 1, 1962 and, therefore, at the time the appellant was convicted by the Magistrate, the Magistrate had no power or duty to make any order under the Act.
The appellant preferred an appeal against his conviction and sentences to the Additional Sessions Judge, Gurgaon, who by his judgment dated September 22, 1962, dismissed the appeal.
Though by the time the Additional Sessions Judge disposed of the appeal the said Act had come into force, neither the appellant relied upon the provisions of the Act nor did the learned Additional Sessions Judge exercised his power there under.
The revision filed in the High Court by the Appellant was dismissed on September 27, 1962.
The revision petition was dismissed in limine, but no ground was taken in the revision petition that the Additional Sessions Judge should have acted under s.6 of the Act.
After the revision petition was disposed of, it appears that the appellant filed Criminal Miscellaneous Petition No. 793 of 1962 requesting the High Court to exercise its jurisdiction under section 1 of the Act and to pass orders under sections 3, 4 or 6 thereof.
The said application was also dismissed.
Unfortunately the said application is not on the record and we are not in a position to know the exact scope of the relief asked for in the application and the reasons for which it was dismissed.
The appellant filed a petition in the High Court under article 134(1) (c) of the Constitution for a certificate of fitness to appeal to this Court.
One of the grounds for seeking such a certificate was that the High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 thereof.
That petition having been dismissed, the appellant has preferred the present appeal to this Court by obtaining special leave.
679 Learned counsel for the appellant contends that, having regard to the admitted facts in the case, the High Court should have acted under section 11 of the Act and released the appellant on probation of good conduct instead of sending him to prison.
On the other hand, learned counsel for the State argues that the Act is not retrospective in operation and, therefore, it will not apply to the appellant, as he was convicted before it came into force in Gurgaon District.
Further he contends that neither section II of the Act nor s.6 thereof, on the basis of the express phraseology used therein, can be invoked in the circumstances of the present case.
In any view, he says that the appellant, not having raised this plea till after the revision petition was dis posed of by the High Court, is precluded by his default to raise this contention at this very late stage.
The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
Broadly stated, the Act distinguishes offenders below 21 years of age and those above that age, and offenders who are guilty of having committed an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the age of 21 years absolute discretion is given to the court to release them after admonition or on probation of good conduct, subject to the conditions laid down in the appropriate provisions of the Act, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to 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 offenders.
it is not desirable to deal with them under ss, 3 and 4 of the Act.
With this short background we shall now read the relevant provisions of the Act.
Section 6.(1) When any person under twenty one years of 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 sentence him to 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 tinder section 3 or section 4, and if the Court passes any sentence of imprisonment on the offender, it shall record its reasons for doing so.
680 (2) For the purpose of satisfying itself whether it would not be desirable to deal under section 3 or section 4 with an offender referred to in sub section (1) the Court shall call for a report from the probation officer and consider the report, if any, and any other information available to it relating to the character and physical and mental condition of the offender.
Section 11.
(1) Notwithstanding anything contained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case comes before it on appeal or in revision.
(2) Notwithstanding anything contained in the Code, where an order under section 3 or section 4 is made by any Court trying the offender (other than a High Court), an appeal shall lie to the Court to which appeals ordinarily lie from the sentences of the former Court.
(3) In any case where any person under twenty one years of age is found guilty of having committed an offence and the Court by which he is found guilty declines to deal with him under section 3 or section 4, and passed against him any sentence of imprisonment with or without fine from which no appeal lies or is preferred, then, notwithstanding any thing contained in the Code or any other law, the Court to which appeals ordinarily lie from the sentences of the former Court may, either of its own motion or on an application made to it by the convicted person or the probation officer, call for and examine the record of the case and pass such order thereon as it thinks fit.
(4) The first question is whether the High Court, acting under section II of the Act, can exercise the power conferred on a court under s.6 of the Act.
It is said that the jurisdiction of the High Court under section 11(3) of the Act is confined only to a case that has been brought to its file by appeal or revision and, therefore, it can only exercise such jurisdiction as the trial court had, and in the present case the trial court could not have made any order under s.6 of the Act, as at the time it made the order the Act had not been extended to Gurgaon District.
On this assumption, the argument proceeds, the Act should not be given retrospective operation, as, if so given, it would affect the criminal liability of a person for an act committed by him before the Act came into operation.
In support of this contention a number of decisions bearing on the question of retroactivity of a 681 statute in the context of vested rights have been cited.
Every law that takes away or impairs a vested right is retrospective.
Every ex post facto law is necessarily retrospective.
Under article St 20 of the Constitution, no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence, nor be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.
But an ex post facto law which only mollifies the rigour of a criminal law does not fall within the said prohibition.
If a particular law makes a provision to that effect, though retrospective in operation, it will be valid.
The question whether such a, law is retrospective and if so, to what extent depends, upon the interpretation of a particular statute, having regard to the well settled rules of construction. "Maxwell On Interpretation of Statutes", 11th edition, at pp.
274 275, summarizes the relevant rule of construction thus: "The tendency of modern decision, upon the whole, is to narrow materially the difference between what is called a strict and a beneficial construction.
All statutes are now construed with a more attentive regard to the language, and criminal statutes with a more rational regard to the aim and intention of the legislature, than formerly.
It is unquestionably right that the distinction should not be altogether erased from the judicial mind, for it is required by the spirit of our free institutions that the interpretation of all statutes should be favourable to personal liberty, and this tendency is still evinced in a certain reluctance to supply the defects of language, or to eke out the meaning of an obscure passage by strained or doubtful influences.
The effect of the rule of strict construction might almost be summed up in the remark that, were an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself.
But it yields to the paramount rule that every statute is to be expounded according to its expressed or manifest intention and that all cases within the mischiefs aimed at are, if the language permits, to be held to fall within its remedial influence.
" Let us now proceed to consider the question raised in the present case.
This is not a case where an act, which was not an offence before the Act, is made an offence under the Act; nor 682 is this a case where under the Act a punishment higher than that obtaining for an offence before the Act is imposed.
This is an instance where neither the ingredients of the offence nor the limits of the sentence are disturbed, but a provision is made to help the reformation of an accused through the agency of the court.
Even so the statute affects an offence committed before it was extended to the area in question.
It is, therefore, a post facto law and has retrospective operation.
In considering the scope of such a provision we must adopt the rule of beneficial construction as enunciated by the modern trend of judicial opinion without doing violence to the provisions of the relevant section.
Section 11(3) of the Act, on the basis of which the learned counsel for the State advances most of his arguments, has no relevance to the present appeal: the said subsection applies only to a case where no appeal lies or is preferred against the order of a court declining to deal with an accused under s.3 or s.4 of the Act, and in the instant case an appeal lay to the Sessions Judge and indeed an appeal was preferred from the order of the Magistrate.
The provision that directly applies to the present case is section 1 1 (1) of the Act, where under an order under the Act may be made any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other court when the case comes before it on appeal or in revision.
The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order.
The phraseology used therein is wide enough to enable the appellate court or the High Court, when the case comes before it, to make such an order.
It was purposely made comprehensive, as the Act was made to im plement a social reform.
As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the Legislature should have prohibited the exercise of such a power, even if the case was pending against the accused at one stage or other in the hierarchy of tribunals.
If the provisions of section 6(1) of the Act were read along with section 11, we would reach the same result.
When section 11 (1) says that an appellate court or a revisional court can make an order under the Act, it means that it can make an order also under s.6(1) of the Act.
If so, "court" in s.6(1) will include an appellate court as well as a revisional court.
If an appellate court or a revisional court finds a person guilty, under that section it shall not sentence him to imprisonment unless the conditions laid down in that section are satisfied.
Can it be said that the expression "the court by which the person is found guilty" does not include the appellate or revisional court? When an appellate court or a revisional court confirms a conviction made by a trial court or sets aside an acquittal made by it and convicts the accused, in either case it 683 finds the accused guilty, for without finding the accused guilty it cannot either confirm the conviction or set aside the order of acquittal and convict him.
If the contention advanced by learned counsel for the State, namely, that the Act will apply only to convictions made by the trial court after the Act came into force, be accepted, it would lead to several anomalies; it would mean that the Act would apply to a conviction made by a trial court after the Act came into force, but would not apply to an accused, though his appeal was pending after the Act came into force; it would apply to the accused if the appellate court set aside the conviction and sent back the case to the trial court for fresh disposal, but would not, if the appellate court itself convicted him.
On the other hand if the expression "found guilty" was given the natural meaning, it would take in the finding of guilty made by any court in a pending criminal proceeding in the hierarchy of tribunals after the Act came into force.
This view gets support from the judgment of this Court in Ramji Missar vs State of Bihar(1).
The facts of that case relevant to the present case were as follows: The Assistant Sessions Judge, Arrah, convicted one Basist under section 307 and section 326 of the Indian Penal Code.
As the offences under the said sections were punishable with imprisonment for life, the provisions of the , were not applicable to Basist and, therefore, the Assistant Sessions Judge sentenced him to undergo rigorous imprisonment for 6 years under section 307 of the Indian Penal Code and for 4 years rigorous imprisonment under section 326 of the said Code and ordered the sentences to run concurrently.
But the High Court on appeal found Basist guilty of an offence under s.324 of the Indian Penal Code.
It was contended that the High Court could not make an order under s.6(1) of the , on the ground that section 11 of the Act did not confer such a power on the High Court.
Dealing with this argument, this Court observed: "It is however possible that the words in section 11(1) "pass an order under the Act" are not to be construed so strictly and literally, but to be understood to mean "to exercise the powers or jurisdiction conferred by the Act." This wide interpretation might perhaps be justified by the scope and object of this section.
Section 11 is to apply "notwithstanding anything in the Code or any other law" to all courts empowered to sentence offenders to imprisonment.
To read a beneficial provision of this universal type in a restricted sense, so as to confine the power of these courts to the exercise of the [1963] Supp. 2 S.C.R. 745, 755.
684 powers under sections 3 and 4 alone would not, in our opinion, be in accord with sound principles of statutory interpretation.
We are therefore inclined to hold that the Courts mentioned in section II be they trial courts or exercising appellate or revisional jurisdiction are thereby empowered to exercise the jurisdiction conferred on Courts not only under sections 3 and 4 and the consequential provisions but also under s.6.
" When it was contended that the word "may" in section 11 of the Act empowers the appellate court or the High Court to exercise the power at its option and the words "any order under the Act" empower it to make an order without reference to the standards laid down in the Act, this Court rejected both the contentions.
It held that the expression "may" has compulsory force and that the power conferred on the ap pellate court was of the same nature and characteristic and subject to the same criteria and limitations as those ,conferred on courts under sections 3 and 4 of the Act.
This decision lays down three propositions, namely, (i) an appel late court or a revisional court can make an order under s.6(1) of the Act in exercise of its power under s.11(1) thereof; (ii) it can make such an order for the first time even though the trial court could not have made such an order, having regard to the finding given by it; and (iii) in making such an order it is subject to the conditions laid down in sections 3, 4 and 6 of the Act.
The only distinguishing feature between the present case and the said decision is that in the present case the trial court did not make the order as the Act was not extended to the area within its jurisdiction and in the said decision the trial court did not make the order as it could not, on its finding that the accused was guilty of an offence Dunishable with imprison ment for life.
But what is important is that this Court held that the High Court for the first time could make such an order under section 11 of the Act, as such a power was expressly conferred on it by section 11 of the Act.
We, therefore, hold that the appellate court in appeal or the High Court in revision can, in exercise of the power conferred under section 11 of the Act, make an order under section 6(1) thereof, as the appellate court and the High Court, agreeing with the Magistrate, found the accused guilty of the offences for which he was charged.
The next question is whether this Court can exercise the same power under section 11(1) of the Act.
This Court in disposing of an appeal against an order of the High Court would be deciding what the High Court should have held in the revision before it.
This Court 's power would also be confined to the scope of the power exercisable by the High Court.
This Court, therefore, can either make an order under s.6(1) of the Act or 685 ,direct the High Court to do so.
But whether this Court directly makes an order under s.6(1) or directs the High Court to do :so, it is bound to comply with the provisions of s.6 of the Act.
A court cannot impose a sentence of imprisonment on a person under 21 years of age found guilty of having committed ,an offence punishable with imprisonment (but not with imprisonment for life) 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 under s.3 or s.4 of the Act.
For The purpose of satisfying itself in regard to the said action, under sub section
(2) of section 6 of the Act the Court shall call for a report from the probation officer and consider the report, if any, and any other information available to it relating to the character and physical and mental condition of the offender.
After con sidering the said material the court shall satisfy itself whether it is desirable to deal with the offender under section 3 or section 4 of the Act.
If it is not satisfied that the offender should be dealt with under either of the said two sections, it can pass the sentence of imprisonment on the offender after recording the reasons for doing so.
It is suggested that the expression "if any" in sub section
(2) of s.6 indicates that it is open to the court to call for a report or not; but the word "shall" makes it a mandatory condition and the expression "if any" can in the context only cover a case where notwithstanding such requisition the Probation Officer for one reason or other, has not submitted a report.
Briefly stated the calling for a report from the Probation Officer is a condition precedent for the exercise of the power under s.6(1) of the Act by the Court.
We think that in the circumstances of the case the best course is to remand the matter to the High Court to make an order after complying with section 6(1) of the Act.
lastly it is contended that we should not at this very late stage of the proceeding, and especially in view of the observations of the Additional Sessions Judge in sentencing the accused, interfere with the order of the High Court.
Ordinarily this Court would be reluctant to allow a party to raise a point for the first time before it.
But in this case both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act.
It is true that the accused did not bring the provisions of the Act to the notice of the court till after the revision was disposed of.
But that does not absolve the court from discharging its duty under the Act.
The observations made by the Additional Sessions Judge in sentencing the accused were made de hors the provisions of the Act.
these observations it cannot be held that the learned Additional Sessions Judge had satisfied himself of the conditions laid down in s.6(1) of the Act.
That apart, as we have pointed out, he could not have legally satisfied himself of the matters mentioned in s.6(1) of the Act without complying with the conditions laid down therein.
We are satisfied that, as the Act was recently extended to Gurgaon District, its existence had escaped the attention of the Additional Sessions Judge as well.
as of the High Court and, therefore, it is a fit case for our interference under article 136 of the Constitution.
We set aside the order of the High Court and direct it to make an order under s.6 of the Act, or, if it so desires, to remand it to the Sessions Court for doing so.
We should also make it clear that we do not intend to question the correctness of the finding of the courts in regard to the guilt of the accused; indeed, the learned counsel for the appellant did not question the said finding.
that when a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the (Act No. XX of 1958), hereinafter called the Act, could apply, and such finding, be it of the trial Court or of the appellate Court, is arrived at before the application of the Act, the Court of appeal or revision cannot take action under section 11 (1) of the Act when the case comes, before it in appeal or revision.
In this case, the trial Court had convicted the appellant prior to the application of the Act in that area and could not take into consideration the provisions of that Act in the passing of the sentences on convicting the appellant.
The appellant was convicted by the trial Court on May 31, 1962, prior to the application of the Act to that area,.
The Act was applied on September 1, 1962, by a Government Notification, when the appellant 's appeal was pending in the Court of the Sessions Judge.
The appeal was dismissed on September 22, 1962.
The appellant did not draw the attention of the Court to the provisions of the Act.
The Court did not consider them.
The appellant went in revision to the High Court.
The revision was dismissed on September 27, 1962.
The High Court also did not refer to the provisions of the Act.
On September 28, 1962 the appellant filed a petition praying that under sections 3, 4 and 6 of the Act the petitioner be released or that he be dealt with under section 562(2) of the Code of Criminal Procedure, hereinafter, called the Code.
That application was rejected.
Neither this petition nor the order of ' rejection was mentioned in the petition for special leave to appeal.
Reference to these is found in the petition filed in the High Court for leave to appeal to this Court under article 134(1)(c) of the Constitution dated October 3, 1962, printed at 687 p. 25 of the appeal record and in the grounds of appeal accompanying it.
The petition for special leave filed in this Court sought leave to appeal against the order and judgement dated September 27, 1962 in the main revision case and not against the order rejecting the petition, Criminal Miscellaneous, No. 793 of 1962.
It was not a correct statement in paragraph 9 of the special leave petition, to the effect that the petitioner filed an application under article 134(1)(c) of the Constitution for grant of certificate of fitness for leave to appeal to this Court, but it was refused on October 19, 1962.
The ground, as recorded, prima facie showed that such an application was for leave to appeal against the order in the Criminal Revision, No. 1172 of 1962.
In these circumstances, the special leave granted is liable to be revoked.
The appellate court sees that the order of the court below ,on the material on record is correct or not and has to pass a correct order on that material.
If the trial Court could not have taken action under the provisions of the Act which was riot in force at the time it found the accused guilty, the appellate Court could not have taken action under those provisions unless the Act specifically provided for those provisions to be applicable to cases which had been decided earlier, prior to its application.
There is no such express provision in the Act and I do not find any necessary implication from the provisions of the Act in that regard.
It is true that appellate Courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings.
Such a ground is not available in the present case.
Ordinarily, it takes a few years for a case decided by a Magistrate who tries it in the first instance, and the passing of the final order by the High Court in revision.
Ordinarily, an appeal lies to the Sessions Judge from the order of the Magistrate and a revision against the Sessions Judge 's order to the High Court.
The two proceedings before the Sessions Judge and the High Court do take time.
The Act is an all India Act and there would be a very large number of persons convicted by trial Courts prior to the enforcement of the Act.
It is too much to suppose that the legislature intended that all the orders of the Magistrates in such cases of conviction against persons under 21 years of age automatically become illegal and liable to correction by the Courts of appeal and revision.
Not only would they be liable to be set aside, the setting aside of the Magistrates ' orders about sentences would not have ended the matters but would have led to further proceedings to be taken by the Magistrates or the appellate Courts for the purpose of coming to a conclusion whether action can be taken in accordance with the provisions of sections 3, 4 and 6 of the Act.
All those numerous cases would have to be reopened and I cannot believe that the legislature would have intended such a result and would not have expressed itself very clearly if it had really intended so.
Section 3 of the Act empowers the Court to release certain offenders after admonition and section 4 empowers the Court to release certain offenders on probation of good conduct.
The Court which is to take action under these sections is the Court by which the person is found guilty of the offences in the respective sections and in circumstances specified in the respective sections.
Such orders are made instead of sentencing the person found guilty to any punishment which could be awarded to him.
It is clear that action under these sections can be taken by the Court which finds a person guilty of the offence for the first time.
A person may be found guilty of the respective offence by the trial Court or by appellate Court if it alters his conviction for an offence which did not fall under either of those sections to one which falls under any of them, or by the High Court if it finds the accused person guilty on appeal against acquittal.
It is in these circumstances that it can be said that the trial Court or the appellate Court or the High Court has found an accused guilty.
A Court of revision cannot convert a finding of acquittal into a finding of conviction and therefore no such case can arise in which a Court of revision for the first time finds an accused guilty of an offence to which the provisions of sections 3 and 4 of the Act apply.
When an appellate Court confirms the conviction of a person it is not the Court which finds him guilty but is the, Court which confirms the finding of the trial Court about the person being guilty on forming an opinion that the order of the trial Court is correct.
If the expression 'the Court by which the person is found guilty ' was to include the appellate Court confirming the conviction of a person for the offence which fell under any of the two sections, it would not have been necessary to clothe the appellate Court with a power to take action under these sections, as sub section
(1) of section 11 does.
This subsection reads: "Notwithstanding anything contained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case comes before it on appeal or in re vision.
" It is clear from the language of this sub section that the Court which is empowered to order under the Act in the first instance is the Court which is empowered to try and sentence the offender to imprisonment, i.e., the original trial 689 Court.
It is given the power to take action under the Act.
Orders under the Act can also be made by the High Court or any other Court when the case comes before it on appeal or in revision.
The question is as to in which case the High Court or any other Court, can exercise its power.
It can exercise it, when the case in which the trial Court could have exercised the power comes before it.
This is to be deduced from the use of the word 'also ' and from the occasion when the High Court or any other Court can make such an order, it being when the case comes before it on appeal or in revision.
It must, therefore, be the case in which the trial Court could take a certain action in which the High Court or any other Court could also take action only when it came before it on appeal or in revision.
I do not consider it reasonable to construe the language of sub section (1) to mean that the High Court or any other Court could take action in all cases of appeal or revision before it irrespective of the fact whether the trial Court could have made an order tinder the Act in those cases or not.
The scheme of section 11 seems to support this view sub section (1) mentions the Courts which can make orders under the Act.
Sub section (2) provides an appeal where an order under section 3 or section 4 is made by any Court in trying an offender.
This means that when a Court trying an offender convicts him and takes action under section 3 or section 4, an appeal in that case will lie.
Of course no question of the appellate Court taking action under section 3 or section 4 arises in such appeals because action has already been taken by the trial Court and the appellate Court would only look to the correctness of the conviction and in case it finds action under section 3 or section 4 to be unjustified, may even set aside that order and pass suitable sentence as provided in sub section
Sub section (2) makes provision for an appeal and sub section
(4) makes provision for the appellate Court to consider the propriety of any order made under sections 3 or 4 of the Act.
These provisions in sub section
(2) and sub section
(4) exhaust the cases in which orders under sections 3 or 4 could be made by the High Court or any other Court.
While sections 3 and 4 confer a discretionary power in the Court to make an order under those sections in certain cir cumstances, sub section
(1) of section 6 makes it incumbent on the Court finding a person under 21 years of age guilty of offences punishable with imprisonment not to sentence such person convicted of such an offence to imprisonment unless it is satisfied, having regard to the facts mentioned in the sub section that it would not be desirable to deal with him under section 3 or section 4 and in that case it has to record its reasons for sentencing him to imprisonment.
Sub section (2) makes it incumbent on the Court to get a report from the Probation Officer and consider it in order to satisfy itself whether it would not be desirable to deal under section 3 or section 4.
These provisions of section 6 restrict 690 the discretion of the trial Court for taking action under section 3 and section 4 in regard to persons under 21 years of age and constricted of all offences except offences punishable with imprisonment for life.
A Court can, however, sentence such a person to imprisonment only after considering various matters and finally satisfying itself that it would not be desirable to make an order under section 3 or section 4 in regard to that person.
A case to which the provisions of section 6 apply is dealt with by sub section
(3) of section II which provides that when a Court has declined to deal with the person under section 3 or section 4 and has passed a sentence of imprisonment and when no appeal lies or none has been preferred from that order, the Court to which appeals ordinarily lie from the sentence of the Court may, suo motu or on an application made to it by the convicted person or the Probation Officer, call for and examine the record of the case and pass such order thereon as it thinks fit.
Of course, if the order is appealable, the appellate Court can consider the matter in view of the power conferred under sub section
(1), which enables the appellate Court when the case comes before it to make any order under the Act.
Action under sub section
(3), it is clear, can be taken by the appellate Court only in cases in which the trial Court has declined to take action under section 3 or section 4, that is to say, the trial Court, at the time of conviction and sentencing a person, had the power to make an order under section 3 or section 4 and had felt satisfied that such an order was not desirable.
If it has no such power at the time and has passed a non appealable order, or when the convicted person does not appeal, action cannot be taken under sub section
(3) because it cannot be said with any propriety that the trial Court had declined to take action under section 3 or section 4.
This is a strong indication of the fact that powers conferred on the High Court or any Court of appeal or revision under section II are to be exercised in the cases coming before them in which the trial Court itself could have made an order under the Act.
Reference may also be made to an incidental matter.
An order of admonition under section 3 puts an end of the case it being the final order against the convicted person, subject of course to the orders of the appellate Court in case the convicted person appeals against his conviction.
This cannot be said with respect to an order under section 4, an order which would direct that the convicted person be released on his entering into a bond to appear and receive sentence when called upon during such period, not exceeding 3 years, as the Court may direct and in the meantime to keep the peace and be of good behaviour.
The passing of the sentence provided for the offence is put off and the convicted person stands the risk of a proper sentence being passed against him in future in 691 certain circumstances.
Section 9 provides in case of the convict 's failure to observe the conditions of the bond that he and his sureties be summoned to Court which may remand the accused to custody or grant him bail and, if satisfied that he had failed to observe any of the conditions of the bond, forthwith to sentence him for the original offence and where the failure is for the first time to impose upon him a penalty not exceeding Rs. 50/ without prejudice to the continuance in force of the bond.
In case a convicted person has not been able to observe the conditions of the bond, he, in a way, stands to suffer larger punishment than what he would have got in the first instance in case in addition to the sentence which would be passed upon him he had already, for a certain period, observed the conditions of the bond and had also, in view of the provisions of section 5, paid compensation to the victim of the offence and costs of the proceedings which are recovered as fine.
The Code does not provide for the payment of costs and provides for the payment of compensation when ordered out of the fine imposed on an accused; vide sections 545 and 546A of the Code.
This Court considered certain provisions of the Act in Ramji Missar vs State of Bihar(1) and held that the crucial date for the application of the aforesaid sections viz., sections 3, 4 and 6 of the Act to, the case of an accused whose conviction by the trial Court of offences to which those sections do not apply, was altered by the appellate Court to an offence to which the provisions of those sections applied, would be the (late of the decision of the trial Court in view of the terms of the section on grounds of logic as well as on the theory that the order passed by an appellate Court was the correct order which the trial Court should have passed.
This tends to support the view I have expressed above.
It may be mentioned that in that case the trial Court could make an order under section 4 of the Act at the time it convicted one Basist, who was then under 21 years of age, if it had convicted him of the offence to which the provisions of section 4 applied.
The High Court altered the conviction to such an offence but held that it was not competent to pass an order under section 6 of the Act.
This Court held that it could.
In the instant case, the trial Court could not take any action in accordance with the provisions of the Act for the simple reason that the Act was not in force on the day it convicted the appellant.
I am, therefore of opinion that the point for determination before us.
that is, whether the appellate Court can make an order under the Act in cases in which the trial Court on the date of conviction could not have made an order under the Act did not arise for decision in that case.
This question, (1) [1963] Supp. 2 S.C.R. 745.
692 is very different from the question whether an appellate Court can make an order under the Act when it alters the conviction of an appellant to an offence with respect to which an order under the Act could have been made by the trial Court as arose in Ramji 's Case(1).
I am therefore of opinion that the High Court could not have made an order under the Act in this case and that therefore this appeal should fail.
I would accordingly dismiss it.
ORDER In accordance with the opinion of the majority, we set aside the order of the High Court and direct it to make an order under section 6 of the , or, if it so desires, to remand it to the Sessions Court for doing so.
Appeal allowed.
(1) [1963] Supp. 2 S.C.R. 745.
| The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years.
By an order dated May 31, 1962, he was convicted by magistrate and sentenced to rigorous imprisonment.
He was also ordered to pay fine.
At the time of his conviction, he was 16 years old.
The was extended to Gurgaon on September 1, 1962 and hence at the time of his conviction the magistrate had no power or duty to make any order under the Act.
The appeal of the appellant was dismissed by the Additional Sessions Judge, Gurgaon by his order dated Sep tember 22, 1962.
His revision petition was also dismissed by the High Court on September 27, 1962.
No ground was taken either before the Additional Sessions Judge or High Court that the provisions of the should be applied in the case.
After the dismissal of the revision petition, appellant filed a criminal miscellaneous petition requesting the High Court to exercise its powers under section 11 of the Act and pass orders under sections 3, 4 or 6 of the Act.
The application was also dismissed by High Court.
The appellant filed a petition in the High Court for the grant of a certificate of fitness to appeal to this Court and one of the grounds taken was that High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 of the Act.
The certificate having been refused by High Court, the appellant came to this Court by special leave.
Accepting the appeal, Held (Per Subba Rao and Das Gupta, JJ.): The order of the High Court be set aside and High Court be directed to make an order under section 6 or if it so desires, remand the case to the Sessions Court for doing so.
It is true that ordinarily, this court is reluctant to allow a party to raise a point for the first time before it, but in this case, both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act.
It is true that the appellant did not bring the provisions of the Act to the notice of the Court till after the disposal of the revision petition, but that does not absolve the court from discharging its duty under the Act.
The appellate court in appeal or the High Court on revision can, in exercise of the powers conferred under section 11 of the Act, make an order under section 6(1).
The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
The Act distinguishes offenders below 21 years of age and those 677 above that age and offenders who are guilty of committing an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the age of 21 years, absolute discretion is given to the court to release them after admonition or on probation of good conduct, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to 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 offenders, it is not desirable to deal with them under sections 3 and 4 of the Act.
An order under section 1 1 (1) of the Act can be made by any court empowered to try and sentence the offender to imprisonment and also by High Court or any other court when case comes before it on appeal or in revision.
The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order.
The phraseology used therein is wide enough to enable the appellate court or High Court, when the case come before, it, to make such an order.
It was purposely made comprehensive as the Act was made to implement a social reform.
As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the legislature should have prohibited the exercise of such a power even if the case was pending against the accused at one stage or other in the hierarchy of tribunals.
The term "court" in section 6(1) includes an appellate court as well as revisional court.
Per Raghubar Dayal, J. (dissenting) When a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the could apply, and such finding, be it of the trial court or of the appellate court, is arrived at before the application of the Act, the court of appeal or revision cannot take action under section 11(1) of the Act when the case comes before it in appeal or revision.
It is true that appellate courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings.
Such a ground is not available in the present case.
Ramji Missar vs State of Bihar, [1963] Supp.
2 S.C.R. 745, referred to.
|
Civil Appeal No 797 of 1976.
From the Judgment and Order dated 14.7.1972 of the Calcutta High Court in Appeal No. 59 of 1971 V.C. Mahajan, Mrs. Subhadra and C.V. Subba Rao for the Appellants.
Harish N. Salve, Ravinder Narain, P.K. Ram, D.N. Mishra and K. Sukumaran for the Respondent.
The Judgment of the Court was delivered by THAKKAR, J.
Whether Section 12(2)1 of Foreign Exchange Regulation Act of 1947 (Act) designed to prevent wholesale or partial evasion of repatriation of earnings from export of goods covers only sale proceeds of goods exported "for sale* ' as held by the High Court of Calcutta by the judgment under appeal, or to sale proceeds of goods exported "on sale" in the context of sales completed before export also, as held by the Madras High Court2 and as contended by the appellants is the problem.
"12(2) Where any export of goods has been made to which a notification under sub section (1) applies, no person entitled to sell, or procure the sale of the said goods shall, except with the permission of the Reserve Bank, do or refrain from doing anything or take or refrain from taking any action which has the effect of securing that (a) the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary course of trade, or (b) payment for the goods is made otherwise than in the prescribed manner or does not represent the full amount payable by the foreign buyer in respect of the goods, sub ject to such deductions if any, as may be allowed by the Reserve Bank, or is delayed to such extent as aforesaid.
Provided that no proceedings in respect of any contravention of this sub section shall be instituted unless the pre scribed period has expired and payment for the goods repre senting the full amount as aforesaid has not been made in the prescribed manner.
" 2. R. Venkatasubbu and Ors.
vs The Director of Enforcement.
Enforcement Directorate, New Delhi and Anr., ILR Vol.
3MAD 1968 p.18. 985 The learned Single Judge of the Calcutta High Court dismissed a Writ Petition instituted by the Respondent Company and refused to quash two show cause notices dated November 5, 1966 issued under Section 12 (2) of the Act as it stood at the material time on taking the view canvassed by the appellants in this appeal.
A Division Bench of the High Court however allowed the appeal preferred by the Respondent Company, reversed the order of the learned Single Judge dismissing the Writ Petition, and issued a Writ of Mandamus commanding the competent authorities under the Act (appellants herein) to forbear from giving effect to the said notices and from commencing any proceedings pursuant thereto.
The competent authorities under the Act have ap proached this Court by way of the present appeal by a cer tificate under Article 133 (1)(a) of the Constitution of India.
The hub of the argument addressed by the respondent company, which found favour with the Calcutta High Court, but failed to impress the Madras High Court, is the expres sion "no person entitled to sell or procure the sale of the said good" employed by the legislature in the opening part of Section 12(2) of the Act, which to the material extent deserves to be quoted: "12(2) Where any export of goods has 'been made to which a notification under sub section (1) applies, no person enti tled to sell, or procure the sale of the said goods shall, except with the permission of the Reserve Bank, do or re frain from doing anything or take or refrain from taking any action which has the effect of securing that . " The argument runs thus: Section 12 (2) of the Foreign Exchange Regulations Act 1942, on its plain terms, applies only to "persons" who are "entitled to sell or procure the sale of the said goods.
" The word "entitled" governs the word "sell" as well as the expression "procure the sale of".
Further, both these ex pressions are used with respect to the "said goods" which means the goods which have already been exported.
It is in these premises submitted that Section 12(2) applies only to such persons who are entitled to sell or procure the sale of goods which have already been exported.
We are not impressed by this submission that the afore said expression can be so narrowly construed so as to govern the scope of Section 12 (2) in such a truncated manner which renders it virtually 986 impotent in so far as transactions of "exports on sale" are concerned.
Too much is being read into too little for no more laudable a purpose than to paralyze the provision.
It appears to us that this expression does not necessarily induce one to the conclusion that the legislature wanted to prevent abuse in the context of exports for sale ' only.
The expression is meaningful, relevant, and can co exist in the context of abuse arising from 'exports on sale ' from com pleted transactions as well.
The expression "no person entitled to sell, or procure the sale of the said goods" is merely descriptive of the person who is accountable under the said provisions as has been held by the Madras High Court in R. Venkata Subbu 's case, I.L.R. Vol.
3 Madras , which has made a correct meaningful, and purposeful approach with which we unhesitatingly agree.
The whole purpose is to 'identify ' the accountable persons to prevent malpractises and ensure compliance.
It is conceivable that the exports might be made in the name of or through the agency of a person other than the 'owner of goods ' or the person entitled to sell the goods arising out of an 'export on sale.
In our view, Anantaraman, C J, who spoke for the Madras High Court in Venkatasubbu 's case (supra) was right in taking the view that the words "no person entitled to sell or procure the sale of the goods" are descriptive words which refer to the person in the capacity of the seller of the goods or the person entitled to procure the sale of the goods after the export of the goods has been made and that this expression does not necessarily imply that the export must be to a nominee of the consignor at the other end in pursuance to a contemplated transaction of sale.
We are therefore unable to accede to the submission urged on behalf of the Respondent Company (original Writ Petitioner) that Section 12 (2) can apply only to such persons who are enti tled to sell or procure the sale of goods which have already been exported for sale and not to the exports made in pursu ance to sales which have already been effected to a foreign buyer before the exports.
In our opinion, the said expres sion has been employed by the Legislature merely in order to identify the accountable persons and is merely descriptive in that sense.
The said expression does not restrict the operation of the Act to the persons who have not yet sold the goods.
One would have to take a quantum jump in order to conclude that persons referred to in Section 12 (2) are the persons who have not yet sold the goods but are entitled to sell the goods in future merely because the expression 'entitled to sell ' has been employed.
The persons who have exported the goods to a foreign buyer, in our view, are not sought to be excluded from the operation of section 12 (2).
This conclusion is reinforced if clauses (a) and (b) of Section 12(2) are taken into account.
Clause (a) in terms adverts to the sale of goods being delayed.
Clause (b) of Section 12(2) adverts to payment for the goods, otherwise than in the 987 prescribed manner, and also envisions a case where the payment does not represent the full amount payable by the foreign buyer in respect of the goods.
Clauses (a) and (b) are compatible both with transactions of export on sale as also to transactions of export for sale.
They are compatible with all transactions pertaining to both types of sales.
There is no warrant to assume that the Legislature has not made any provision in order to ensure that the full amount of the sale price is repatriated and foreign exchange earned therefrom is not lost to the Nation regardless of whether it is in respect of export on sale ' or 'export for sale '.
The avowed and the evident object of Section 12 is to ensure that that the Nation does not lose foreign exchange which is very much essential for the economic survival of the Nation.
The exporter cannot be allowed to syphon away a part of the foreign exchange or to deprive the Nation of the foreign exchange earned by the exports.
Such is the philosophy of Sec. 12.
To take the view that the legitimate National interest in the sphere of preservation of foreign exchange has relevance only in the context of transactions of exports for sales and that the Legislature exhibited total unconcern for the foreign exchange earned in the context of transac tions of completed sales or consignment sales, is to at tribute to the Legislature irrationality.
And to impute to the Legislature that it did not know its job inasmuch as it has tackled the problem only partially without any rational basis for excluding the transactions of completed sales from the purview of the legislation which would substantially erode or defeat the purpose of the legislation.
When it is equally possible to take the view which would be conducive to the conclusion that there is no lacuna in the legisla tion, it would be unreasonable to take the view that the Legislature has left a lacuna either by negligence or by lack of foresight or because it did not know its job.
In order to escape from the clutches of this answer less argu ment learned counsel for the Respondent Company contended that in so far as completed sales are concerned, they would be governed by Section 10 1and that the lacuna argument would 1.
Duty of persons entitled to receive foreign exchange etc. (1) No person who has a fight to receive any foreign exchange or to receive from a person resident outside India a payment in rupees shall, except with the general or spe cial permission of the Reserve Bank, do or refrain from doing anything or take or refrain from taking any action which has the effect of securing (a) that the receipt by him of the whole or part of that foreign exchange or payment is delayed, or, (b) that the foreign exchange or payment ceases in whole or in part to be receivable by him.
(2) Where a person has failed to comply with the require ments of sub section(1) in relation to any foreign exchange or payment in rupees, the Reserve Bank may give to him such directions as appear to be expedient for the purpose of securing the receipt of the foreign exchange or payment as the case may be." 988 accordingly lose significance.
It is our firm opinion that Sec. 10 has no application in respect of foreign exchange earnings related to export of goods.
Section 10 is designed primarily to impose an obligation on persons who have a right to receive any foreign exchange from a person resident outside India.
This section has nothing to do with the foreign exchange earned by export of goods.
The entire matter pertaining to payments for exported goods and the foreign exchange earnings arising therefrom in our consid ered opinion, has been dealt with in Section 12 which is a complete Code in itself.
It would be an irrational approach to make to hold that while Section 12 deals with payments for exported goods and foreign exchange earnings arising therefrom in all situations, it excludes from its purview one particular situation namely that arising in the context of failure to repatriate the sale proceeds of goods exported pursuant to a completed transaction of sale.
Evidently Section 12 has been very carefully designed.
Every possible situation has been conceived of and appropriate prophylactic measures to ensure the preservation of foreign exchange and prevention of syphoning off the foreign exchange, which is very much essential to the economic life of the Nation, have been embeded therein.
The entire subject of foreign exchange earnings relatable to export of goods has been specifically and specially dealt with in Section 12.
It would therefore be futile to search for an alibi in Section 10 merely in order to support the plea that Section 12 does not take within its fold the foreign exchange earnings relatable to transactions of completed sales.
Pray what is the reason or the purpose for doing so? Why take care to deal with 'all ' matters pertaining to export of goods and foreign exchange earnings therefrom in Section 12, but even so exclude for eign exchange earnings arising out of completed transaction of sale from its scope and ambit? When there is a specific provision which can reasonably be interpreted to cover this aspect of foreign exchange earnings also, be embodied in Section 12, which appears to us to be a complete Code in itself.
why leave this important vital matter of no less importance to be dealt with by section 10 which essentially deals with foreign exchange receivable from individuals and has nothing to do with export of goods? On a plain reading of Section 10, the matter pertaining to the foreign exchange earned by exports in the context of completed sales will not directly fail within the ambit of it.
It will have to be strained beyond the point of endurance in order to accommo date this aspect.
Section 10 is akin to a complementary provision which deals with preservation of foreign exchange which does not fall within a specific provision like Section 12.
What is more, if completed transactions are excluded from Section 12, the purpose of the legislation 989 will not be served, because sub section (6) of Section 121 which has been designed to ensure compliance with the provi sions made in Section 12 (1) to Section 12(5) cannot be availed of.
In that event, in regard to the persons who syphon off foreign exchange earned out of the transactions in the context of a completed sale or export on sale they cannot be dealt with under Section 12 (6) and no sanction to ensure compliance will be available.
The Act will be thus rendered toothless to ensure compliance with evasion in the context of a completed sale.
There is accordingly no compul sion of law, logic, or philosophy, to adopt such a view.
We accordingly allow this appeal and set aside the order of the High Court quashing the show cause notices impugned in the Writ Petition by the original Writ Petitioner.
The matter will now go back to the competent authority for proceeding in accordance with law.
The competent authority will extend the time for showing cause to the Respondent Company and after affording a reasonable opportunity of hearing, proceed to pass appropriate orders in accordance with law as may be called for by the relevant records and the material and such materials as may have been produced, before him in the light of the cause shown by the Respond ent Company on merits in response to the show cause notice.
It will be open to the competent authority to pass appropri ate order uninhibited by any observations which may have been made by the High Court touching the facts or merits of the case or in regard to the incidental matters.
We issue this direction having regard to the fact that it was in the first instance for the competent authority to form an opin ion on merits on the basis of the relevant material in so far as the factual aspect was concerned.
Since the High Court was quashing the notice on a jurisdictional issue there was no occasion for making any observation touching the facts of the case or the merits of the other contentions incidental thereto.
We also wish to make it clear that the question regarding the validity or otherwise of the views expressed by the High Court in regard to points other than the aforesaid point regarding the applicability of Section 12(2) have been kept open for decision in future as and when an occasion arises.
12(6) "For the purpose of ensuring compliance with the provisions of this section and any orders or directions made thereunder, the Reserve Bank may require any person making any export of goods to which a notification under sub sec tion (1) applies to exhibit contracts with his foreign buyer or other evidence to show that the full amount payable by the said buyer in respect of the goods has been, or will within the prescribed period be, paid in the prescribed manner.
" 990 We should not be understood as having pronounced on these matters one way or the other.
We, therefore, allow this appeal, set aside the order passed by the High Court and dismiss the Writ Petition instituted by the Respondents, with liberty to the parties to raise all contentions on facts and law barring the con tention that Section 12(2) of the Act is not attracted.
No order as to costs.
Appeal allowed.
| The appellant and the respondent, who were already related as lint cousins being the issues of two sisters, were married on 11.5.1973.
The marriage lasted only for 17 months, since the respondent divorced the appellant on 16.10.1974.
When the parties were in wedlock, the appellant delivered a female child on 5.12.1973.
After the Respondent effected the divorce in October, 1974, the appellant tiled a Petition under section 125 Criminal Procedure Code in the Court of the Special Judicial Magistrate No. 1, Ramput for grant of maintenance of Rs.50 p.m. to the child.
The respondent refuted his liability to provide mainte nance to the child on the ground that he was not the father of the child and that the child had been conceived even before marriage and the appellant had suppressed the fact of her being enceinte at the time of the marriage.
The Trial Magistrate after taking into consideration the evidence adduced in the case and the conduct of the parties held that since the child had been born when the parents were in wedlock and since the respondent had not discarded the wife or disowned the child forthwith but had waited for about 10 months to divorce the appellant, it would be rea sonable to hold that the child should have been conceived to the 1087 respondent and as such he is by law obligated to provide maintenance to the child.
He accordingly awarded maintenance to the child Rs.30 p.m. as against the claim of Rs. 50 p.m.
A Revision Petition preferred against the order of the Magistrate to the Sessions Judge, Rampur proved of no avail and hence the respondent filed Criminal Misc.
Petition No. 1816 of 1978 to the High Court of Calcutta under section 482 Cr.
P.C. for quashing the order of maintenance.
A Single Judge of the High Court allowed the petition and quashed the order of maintenance in favour of the child, by taking the view that since the child had been born in about 7 months ' time from the date of marriage and since the child was not claimed to be prematurely born it has to be necessarily held that the appellant should have conceived even before she married the respondent and consequently the respondent cannot be held to be the father of the child and called upon to pay maintenance to it.
However the High Court granted a certificate under Article 134 (1)(c) read with Article I34A of the Constitution to the appellant to prefer an appeal for consideration of a question of law formulated as "Whether, in an application under Section 482 Cr.
P.C. the High Court can interfere with concurrent findings rendered by the courts below. ' ' Allowing the appeal, the Court, HELD 1.1 Proceedings under section 125 of the Code of Criminal Procedure are of a summary nature and are intended to enable destitute wives and children, the latter whether they are legitimate or illegitimate, to get maintenance in a speedy manner.
In the instant case, the order of the High Court of Calcutta quashing the order of maintenance in favour of the child by setting aside the concurrent findings rendered by the Courts below is not in order.
[1094E F] 1.2 The proper course for the High Court, even if enti tled to interfere with the concurrent findings of the courts below in exercise of its powers under Section 482 Cr.
P.C., should have been to sustain the order of maintenance and direct the respondent to seek an appropriate declaration in the Civil Court, after a full fledged trial, that the child was not born to him and as such he is not legally liable to maintainit.
[1094D E] 1 .3
The facts of the case and the conduct of the par ties and the attendant circumstances reveal a preponderance of materials to support the case of the appellant rather than that of the respondent.
[1093E] 1088 If the appellant was pregnant even at the time of the marriage she could not have concealed that fact for long and in any event the respondent would have come to know of it within two or three months of the marriage and thereupon he would have immediately protested and either discarded the appellant or reported the matter to the village elders and relatives and sought for a divorce.
On the contrary the respondent had Continued tO lead life with the appellant in a normal manner till the birth of the child.
Even the con finement appears to have taken place in his house as other wise the child 's birth would not have been registered in his village.
The respondent had not disowned the child immedi ately after its birth or sent away the appellant to her parents ' house.
Such would not have been his conduct if he had any doubt about the paternity of the child.
Moreover, there is an entry in the birth register (Exhibit Kha I) setting out the respondent as the father of the child.
Though the respondent has attempted to neutralise the entry in Exhibit Kha I by examining D.W.2 and making it appear that the entry had been made on the basis of the information given by a third party, the lower courts have refused to give credence to the vague and uncorrobarated testimony of D.W.2.
Further, the respondent had allowed eleven months to pass before effecting a divorce.
By his inaction for such a long period the respondent has given room for inference that the divorce may have been effected for other reasons and not on account of the appellant giving birth to a child con ceived through someone else.
Lastly, even if the child had been born alter a full term pregnancy it has to be borne in mind that the possibility of the respondent having had access to the appellant before marriage cannot be ruled out because they were closely related and would therefore have been moving on close terms.
AH these factors negate the plea of the respondent that the minor child was not lathered by him.
Giving birth to a viable child after 28 weeks ' duration of pregnancy, according to medical science is not biologi cally an improbable or impossible event.
[1093F H; 1094A D] 2.
Section 112 of the Indian Evidence Act lays down that if a person was born during the continuance of a valid marriage between his mother and any man or within two hun dred and eighty days after its dissolution and the mother remains unmarried, it shall be taken as conclusive proof that he is the legitimate son of that man, unless it can be shown that the parties to the marriage had no access to each other at any time when he could have been begotten.
This rule of law based on the dictates of justice has always made the courts incline towards upholding the legitimacy of a child unless the facts are so compulsive and clinching as to necessarily warrant a finding that the child could not at all have been begotten to the father and as such a legitima tion of the 1089 child would result in rank injustice to the father.
Courts have always desisted from lightly or hastily rendering a verdict and that too, on the basis of slender materials, which will have the effect of branding a child as a bastard and its mother an unchaste woman.
[1092D F] Mahbub Ali vs Taj Khan, AIR 1915 Lahore 77(2); Kahan Singh vs Natha Singh, AIR 1925 Lahore 414; Sibt Mohamed vs Md. Maneed, AIR 1926 Allahabad 589 and Ponnamal vs Addi Aivan, AIR 1953 TRACO 434 (Vol. 40, C.N. 169), approved.
|
vil Appeal Nos. 4180 and 4181 of 1989.
From the Judgment and Order dated 20/21/22 7 1988 and 18/298 1988 of the Bombay High Court in Writ Petition Nos.
3313 and 3417 of 1987.
N.N. Keshwani and R.N. Keshwani for the Appellants.
383 A.B. Rohatgi, Mrs. Gool Barucha, M.J. Paul, Kailash Vasdev, R. Karanjawala, Mrs.M Karanjawala (NP) and H.S. Anand for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
These civil appeals have been preferred against a common judgment of the Bombay High Court dismissing writ petition No. 33 13/87 filed by Arjun Khiamal Makhijani who is the appellant in one of these appeals and writ petition No. 3417/87 by Prithdayal Chetandas and others who are the appellants in the other civil appeal.
Jamnadas C. Tuliani who is respondent No. 1 in both these appeals is the owner and tile landlord of the suit premises comprising two bed rooms flat together with a garage on the ground floor and a store room on Bhulabhai Desai Road in the city of Bombay.
A suit was instituted by him for ejectment from the said premises against five defendants on the ground that they were tenants of the said premises and were in arrears of rent for a period of more than six months which they had not paid in spite of a notice of demand having been served on them as contemplated by sub section (2) of Section 12 of the Bombay Rents, Hotel and Lodging House Rates Control Act 1947 (hereinafter referred to as the Act) and were consequently liable for eviction under sub section (3)(a) of the Act as it then stood.
Two other grounds were pleaded by the re spondent No. 1 namely that the tenants had changed the user of the suit premises and that they had committed breach of terms and conditions of the tenancy.
Subsequently, Arjun Khiamal Makhijani aforesaid was impleaded as defendant No. 6 in the suit on the assertion that the tenants had illegally sublet a portion of the suit premises namely the garage to him and were consequently liable to be evicted on this ground also.
The suit was contested both by the tenants as well as by defendant No. 6.
The Trial Court recorded find ings in favour of the landlord in so far as the pleas of default in payment of rent and illegal sub tenancy are concerned.
The other two pleas namely that the tenants had changed the user of the suit premises and had also committed breach of terms and conditions of the tenancy were decided against the landlord.
On the basis of the findings on the pleas of default in payment of rent and illegal subletting, the suit was decreed.
Two appeals were preferred against the judgment of the Trial Court, one by the tenants and the other by defendant No. 6.
Both these appeals were dismissed and the tenants and defendant No. 6 aggrieved by the said decree filed two writ petitions in the High Court.
384 Against the common judgment of the High Court dismissing these writ petitions, the present civil appeals have been preferred.
Before dealing with the respective submissions made by learned counsel for the parties it may be pointed out that even though the finding that the tenants were defaulters in payment of rent has been upheld by the High Court, the other finding namely that the tenants had illegally sublet the garage of the suit premises to defendant No. 6 has been set aside and it has been held accepting the case of the tenants that the defendant No. 6 was a trespasser.
The tenants had also claimed before the High Court the benefit of sub sec tion (3) of Section 12 of the Act as substituted by Amend ment Act 18 of 1987 which came into force on 1st October 1987.
This plea too was repelled.
The defendant No. 6 before the High Court on the other hand took up the plea that in view of the finding in the suit that he was an illegal sub tenant of the garage since 1967, he was entitled to the benefit of sub section (2) of Section 15 of the Act as amended by the aforesaid Amendment Act 18 of 1987.
The High Court repelled this plea on the finding that he was not a sub tenant but a trespasser and also on the ground that he was not in possession on 1st February 1973, the relevant date mentioned in the said sub section.
The High Court also held that benefit of subsection (2) of Section 15 as amend ed, could not be given to defendant No. 6 in a writ peti tion, the same being not a proceeding contemplated by Sec tion 25 of the Amendment Act.
In order to appreciate the submissions made by learned counsel for the parties, it will be useful to extract sub section (3) as it stood at the time when the suit was instituted and sub section (3) as it stands after its amendment.
Subsection (3) as it stood when the suit was instituted reads as hereunder: "3(a) Where the rent is payable by the month and there is no dispute regarding the amount of standard rent or permitted increases, if such rent or increases are in arrears for a period of six months or more and the tenant neglects to make payment thereof until the expiration of the period of one month after notice referred to in sub section (2), the Court.
shall pass a decree for eviction in any such suit for recovery of possession.
(b) In any other case no decree for eviction shall be passed in any such suit if, on the first day of hearing of the suit or on or before such other date as the Court max fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and thereafter continues to 385 pay or tender in Court regularly such rent and permitted increases till the suit is finally decided and also pays costs of the suit as directed by the Court.
" After its amendment as aforesaid, it reads: "(3) No decree for eviction shall be passed by the Court in any suit for recovery of posses sion on the ground of arrears of standard rent and permitted increases if, on the first day of hearing of the suit or on or before such other date as the Court may fix, the tenant pays or tenders in Court the standard rent and permitted increases then due and together with simple interest on the amount of arrears of such standard rent and permitted increases at the rate of nine per cent per annum; and thereafter continues to pay or tenders in Court regularly such standard rent and permit ted increases till the suit is finally decided and also pays costs of the suit as directed by the Court; Provided that, the relief provided under this sub section shall not be available to a tenant to whom relief against forfeiture was given in any two suits previously instituted by the landlord against such tenant." Sub section (2) of Section 15, on the other hand, after its amendment as aforesaid runs thus: "(2) The prohibition against the sub letting of the whole of any part of the premises which have been let to any tenant, and against the assignment or transfer in any other manner of the interest of the tenant therein, contained in subsection (1), shall, subject to the provisions of this subsection, be deemed to have had to effect before the 1st day of February 1973, in any area in which this Act was in operation before such commencement; and accordingly, notwithstanding anything con tained in any contract or in the judgment, decree or order of a Court, any such sublease, assignment or transfer of any such purported sublease, assignment or transfer in favour of any person who has entered into possession, despite the prohibition in subsection (1), as purported sub lessee, assignee or transferee and has continued in a possession on the date aforesaid shall be deemed to be valid and effectual for all purposes, 386 and any tenant who has sub let any premises or part thereof, assigned or transferred any interest therein, shall not be liable to eviction under clause (e) of sub section (1) of Section 13.
The provisions aforesaid of this sub section shall not affect in any manner the operation of sub section (1) after the date aforesaid." Since considerable emphasis has been placed on Section 25 of the Amendment Act 18 of 1987, the same may also be usefully quoted.
It reads: 25.
Nothing contained in the principal Act, as amended by this Act, shall be deemed to autho rise the re opening of any suit or proceeding for the eviction of any person from any prem ises to which the principal Act applies as if such proceeding had been finally disposed of before the commencement of this Act.
Explanation For the purposes of this section, suit or proceeding, as the case may be, shall not be deemed to have been finally disposed of, if in relation to that suit or proceeding, any appeal or proceeding is pending, or, if the period of limitation for preferring an appeal or proceeding, as the case may be, had not expired before the com mencement of this Act.
" It has been urged by the learned counsel for the tenants that 14th November 1967 was the first day of hearing of the suit and since in pursuance of an order passed by the Trial Court on that day, the tenants had deposited the entire arrears of rent on 9th January 1968 within the time granted by the Court and continued to deposit the monthly rent thereafter they could not be treated as defaulters in pay ment of rent even if the amendment made in sub section (3) of Section 12 by the Amendment Act 18 of 1987 was ignored.
We, however, find it difficult to agree with this submis sion.
It is not denied that the arrears of rent which were for a period of more than six months and in respect of which a notice of demand had been served on the tenants under sub section (2) of Section 12 of the Act had not been paid by the tenants to the landlord within one month of the service of the notice.
It is also not denied that during the said period of one month, no dispute regarding the amount of standard rent or permitted 387 increases was raised by the tenants.
On a plain reading of clause (a) of sub section (3) of Section 12 of the Act as it stood at the relevant time, the said clause was clearly attracted and the consequence provided therein had to follow namely a decree for eviction against the tenants had to be passed.
Clause (b) of sub section (3) on the face of it was not attracted inasmuch.
as the said clause applied only to a case not covered by clause (a).
This is amply borne out by the use of the opening words "In any other case" of clause (b).
In Harbanslal Jagmohandas and Anr.
vs Prabhudas Shiv lal, [1977] 1 S.C.C. page 576, these clauses (a) and (b) of sub section (3) of Section 12 of the Act came up for consid eration and it was held that the tenant can claim protection from the operation of the Section 12(3)(a) of the Act only if he makes an application raising a dispute as to standard rent within one month of the service of the notice terminat ing the tenancy.
In the instant case this had not admittedly been done by the tenants.
The consequence of non payment of arrears of rent claimed in the notice of demand was, there fore, inevitable.
In Jaywant section Kulkarni and Others vs Minochar Dosabhai Shroff and Others, [1988] 4 S.C.C.p.108, clauses (a) and (b) of sub section 3 of Section 12 again came up for consideration.
It was held: "Sub section (3)(a) of Section 12 categorical ly provided that where the rent was payable by the month and there was no dispute regarding the amount of standard rent or permitted increases, if such rent or increases were in arrears for a period of six months or more and the tenant neglected to make payment thereof until the expiration of the period of one month after notice referred to in subsection (2), the court shall pass a decree for evic tion in any such suit for recovery of posses sion.
In the instant case, as has been found by the court, the rent is payable month by month.
There is no dispute regarding the amount of standard rent or permitted in creases.
Such rent or increases are in arrears for a period of six months or more.
The tenant had neglected to make payment until the expi ration of the period of one month after notice referred to in subsection (2).
The Court was bound to pass a decree for eviction in any such suit for recovery of possession." Faced with this difficulty, learned counsel for the tenants urged that since the Act was a beneficial legisla tion the tenants having deposited the arrears of rent within the time granted by the Trial Court and having continued to deposit future rent thereafter the decree for 388 their eviction deserves to be reversed by this Court.
In so far as this submission is concerned, it may be pointed out that in Ganpat Ram Sharma and others vs Gayatri Devi, [1987] 3 SCC page 576, while dealing with almost a similar Rent Control Legislation it was held: "But quite apart from the suit being barred by lapse of time, this is a beneficial legisla tion, beneficial to both the landlord and the tenant.
It protects the tenant against unrea sonable eviction and exorbitant rent.
It also ensures certain limited rights to the landlord to recover possession on stated contingencies.
In Ganpat Ladha vs Sashikant Vishnu Shinde, [1978] 2 SCC page 73 while dealing with the scope of clauses (a) and (b) of sub section (3) of Section 12 of the Act, it was held: "It is clear to us that the Act interferes with the landlord 's right to property and freedom of contract only for the limited purpose of protecting tenants from misuse of the landlord 's power to evict them, in these days of scarcity of accommodation, by assert ing his superior rights in property or trying to exploit his position by extracting too high rents from helpless tenants.
The object was not to deprive the landlord altogether of his rights in property which have also to be respected.
Another object was to make possible eviction of tenants who fail to carry out their obligation to pay rent to the landlord despite opportunities given by law in that behalf.
Thus Section 12(3)(a) of the Act makes it obligatory for the Court to pass a decree when its conditions are satisfied as was pointed out by one of us (Bhagwati, J.) in Ratilal Balabhai Nazar vs Ranchhodbhai Shan kerbhai Patel, AIR 1968 Guj 172.
If there is statutory default or neglect on the part of the tenant, whatever may be its cause, the landlord acquires a right under Section 12(3)(a) to get a decree for eviction.
But where the conditions of Section 12(3)(a) are not satisfied, there is a further opportunity given to the tenant to protect himself against eviction.
He can comply with the conditions set out in section 12(3)(b) and defeat the landlord 's claim for eviction.
If, however, he does not fulfil those conditions, he cannot claim the protection of Section 12(3)(b) and in that event, there being no other protection available to him, a decree for eviction would have to go against him.
It is difficult to 389 see how by any judicial valour discretion exercisable in favour of the tenant can be found in Section 12(3)(b) even where the conditions laid down by it are satisfied to be strictly confined within the limits prescribed for their operation." (Emphasis supplied).
When the Act contains provisions, some of which fall under the category of beneficial legislation with regard to the tenant and the others with regard to the landlord, the assertion that even with regard to such provisions of the Act which fall under the purview of beneficial legislation for the landlord an effort should be made to interpret them also in favour of the tenant is a negation of the very principle of interpretation of a beneficial legislation on which reliance is placed on behalf of the tenants.
The argument indeed is self defeating and only justifies the cynical proverb Head I win tail you lose.
It is difficult to countenance the sentimental approach made by learned counsel for the tenants, for the simple reason that as pointed out in Latham vs
R. Johnson and Nephew Ltd., (408) sentiment is a dangerous will of the wisp to take as a guide in the search for legal principles.
Reliance was placed by learned counsel for the tenants on Vatan Mal vs Kailash Nath, [1989] 3 SCC page 79.
In that case provisions of Amending Ordinance No. 26 of 1975 whereby Section 13(a) was inserted in the Rajasthan Premises (Con trol of Rent and Eviction) Act, 1950, came up for considera tion.
After pointing Out that the object of inserting Sec tion 13(a) was to confer benefit on all tenants against whom suits for eviction on ground of default in payment of rent were pending and to achieve that object, the said Section had been given overriding effect, it was held that the interpretation of Section 13(a) must conform to the legisla tive intent and the courts should not take narrow restricted view which will defeat the purpose of the Act.
In our opin ion, in view of the mandatory provisions contained in Sec tion 12(3)(a) of the Act, the decision in the case of Vatan Mal, (supra) is not at all attracted to the facts of the instant case.
Clauses (a) and (b) of sub section (3) of Section 12 of Act are calculated to meet entirely different situations and the object of clause (b) was not to defeat the mandatory requirement of clause (a) scope of which has already been discussed above.
For the same reason, the decision of this Court in B.P. Khemka Pvt. Ltd. vs Birendra Kumar Bhowmick & Anr., [1987] 2 SCR page 559 on which too reliance has been placed by the learned counsel for the tenants is of no assistance to them.
390 It was then urged by the learned counsel for the tenants that notwithstanding the provisions contained in Section 12(3)(a) of the Act, this Court can still grant relief to the tenants in view of the power conferred on it under Article 142 of the Constitution "for doing complete justice" in the case.
Reliance in support of this submission has been placed on Smt.
Kamala Devi Budhia and others vs Hem Prabha Ganguli and Others, [1989] 3 SCC page 145.
This submission ignores the basic concept that Article 142 does not contem plate doing justice to one party by ignoring mandatory statutory provisions and thereby doing complete injustice to the other party by depriving such party of the benefit of the mandatory statutory provision.
In the case of Smt.
Kamala Devi Budhia, (supra), the question arose as to wheth er an application under Section 12 of the Bihar Buildings (Lease, Rent and Eviction) Control Act was competent or in the circumstances of the case only a suit under Section 11 thereof could be filed.
It was pointed out that it is the same Court before which both a suit under Section 11 and an application under Section 12 are to be filed and it was in this background that it was held: "If it is assumed that an application under Section 12 of the Act is not maintainable in the facts and circumstances of the present case, in our opinion, the proceeding has to be treated as a suit and the judgment of the learned Munsif as a decree therein.
A further question may arise as to the effect of the Judicial Commissioner, Ranchi declining to pass a formal decree of eviction and directing the appellants to make an application under Section 12(3) of the Act for that purpose.
Can this Court restore the decree of the trial court in absence of an appeal by the appel lants before the High Court? We think.that we can and we should. the question does not affect the substantive right of the parties as the controversy was concluded by the first appellate court in favour of the appellants.
What was left was only procedural in nature and inconsistent with our decision to treat the proceeding as a suit.
The occasion for filing an application under Section 12(3) can arise only where the matter is covered by Section 12, and as we have made an assumption in favour of the respondents that Section 12 has no application to the present case, there is no point in asking the appellants to file such an application.
As mentioned in Article 142 of the Constitution of India, this Court may pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it, 391 and the present case is a most appropriate one for exercise of such power." (Emphasis supplied) The said decision apparently cannot be applied to the facts of the instant case.
Learned counsel for the tenants then urged, relying on Praduman Kumar vs Virendra Goyal (Dead) by L.Rs., [1969] 3 SCR page 950, that at all events the tenants were entitled to be relieved against forfeiture for non payment of rent under Section 114 of the Transfer of Property Act benefit of which could be given if deposit of rent was made at any stage of the hearing of the suit.
In our opinion, there is no substance in this submission either inasmuch as Section 114 of the Transfer of Property Act cannot be applied to a case where the suit for eviction of a tenant has been insti tuted not on the basis of forfeiture of lease under the Transfer of Property Act but on the basis of statutory provision dealing specifically with the rights and obliga tions of the landlords and tenants such as Section 12 of the Act.
In a case where a tenant renders himself liable to be evicted on the ground of being defaulter in the payment of rent as contemplated by sub sections (2) and (3)(a) of Section 12 of the Act, bar from the way of the landlord in instituting a suit for ejectment of a tenant is removed and he gets a right to have a decree for eviction.
Such removal of bar is not in any sense forfeiture of any rights under lease which the tenant held.
Section 114 of the Transfer of Property Act which provides relief against forfeiture for non payment of rent applies to a case where a lease of immovable property has determined by forfeiture for non payment of rent.
Section 111 of the Transfer of Property Act deals with various contingencies whereunder a lease of an immovable property determines.
Clause (g) contains one.of such contingencies being by forfeiture inter alia in case the lessee breaks an express condition which provides that on breach thereof the lessor may re enter.
In a case where forfeiture of lease is claimed for non payment of rent, it would, therefore, have to be established that one of the express conditions of the lease provided that on breach of that condition namely on nonpayment of rent the lessor was entitled to re enter.
It is only in those cases where such an express condition is contained in the lease and the lessee breaks the said condition and the lessor on his part gives notice in writing to the lessee of his intention to determine the lease that a lease of immovable property determines by forfeiture for non payment of rent.
In the instant case, the suit was not based on any such forfeiture of lease under the Transfer of Property Act but was filed for the 392 enforcement of the statutory right conferred on the landlord by subsections (2) and (3)(a) of Section 12 of the Act.
Lastly, it was urged by the learned counsel for the tenants that after clauses (a) and (b) of sub section (3) of Section 12 were substituted by the consolidated sub section (3) of the Amendment Act 18 of 1987, the tenants should have been given the benefit of the deposit of arrears of rent on the first day of hearing in pursuance of the order of the Trial Court dated 14th November, 1967, and of the deposits of future rent thereafter and at all events they were enti tled to make the necessary deposit after the commencement of the Amendment Act 18 of 1987.
In our opinion, the tenants are not entitled even to the benefit of the amended sub section (3) of Section 12 of the Act inasmuch as on a plain reading of the sub section it is not possible to give it a retrospective operation.
In this connection, it will be useful to notice that while amending sub section (2) of Section 15 of the Act, it was provided by the Amendment Act 18 of 1987 that the provisions which were substituted in the said sub section, shall be deemed to have been substituted on the 1st day of February 1973.
No such provision was made with regard to the substitution of sub section (3) of Sec tion 12 of the Act.
Sub section (3) uses the words "on the first day of the hearing of the suit or on or before such other day as the Court may fix".
If the deposit of arrears of rent on 9th January 1968 is pleaded as compliance of the deposit contemplated by the amended sub section (3) and even if for the sake of argument this plea is accepted, the said deposit would still not confer on the tenants the benefit of sub section (3) for the obvious reason that the said sub section contemplates not only the deposit of standard rent and permitted increases then due but also of simple interest on the amount of arrears of such rent and permitted in creases at the rate of nine per cent per annum.
Such amount of interest was admittedly not deposited by the tenants either on 9th January 1968 or on any date thereafter.
We owe turn to the submission of the learned counsel for the ten ants that the tenants were entitled to make the deposit contemplated by sub section (3) "on the first day of the hearing of the suit or on such other day as the Court may fix" after sub section (3) being substituted by the Amend ment Act 18 of 1987.
This argument ignores the difference between the terms "at the hearing of the suit" as used in Section 114 of the Transfer of Property Act and the term "on the first day of the hearing of the suit".
In the case of former, it may be possible to argue that the deposit can be made at any hearing of the suit either in the Trial Court or the Appellate Court, an appeal being a continuation of the suit but the said argument is not available in the latter case where the words used are "on the first day 393 of the hearing of the suit".
In the very nature of things it is not possible to contemplate numerous dates all of which may fulfil the requirement of being "the first day of the hearing of the suit".
In this connection, it would be useful to notice that the words "on the first day of the hearing of the suit or on or before such other day as the Court may fix" occurring in sub section (3) of Section 12 of the Act after its amendment by the Amendment Act 18 of 1987 occurred in clause (b) of the unamended sub section (3) also.
In S.D. Chagan Lal vs Dalichand Virchand Shroff and Others, [1968] 3 S.C.R. page 346 while dealing with the clauses (a) and (b) of the unamended sub section (3) of the Section 12 of the Act, it was held that the date fixed for settlement of issues was September 3, 1956 which can be taken to be the date of the first hearing of the suit for the purpose of the Act.
The same meaning obviously has to be given to the aforesaid words when they have been repeated in the amended sub section (3) of Section 12 of the Act.
The date fixed for settlement of issues in a suit cannot be equated with any other date or dates which may be fixed in the suit or the appeal.
The words "on or before such other dates as the Court may fix" occurring after the words "on the first day of the hearing of the suit" in subsection (3) of Section 12 of the Act were obviously meant to meet a situation where for some inevitable reason the necessary deposit could not be made on the day of the hearing of the suit and the Court extended the time to make such deposit.
A deposit made on or before such extended date would also meet the requirement of the subsection.
Even Section 25 of the Amendment Act 18 of 1987 would be of no assistance in so far as the interpreta tion of Section 12(3) of the Act is concerned.
The said Section provides for certain exceptions in which a suit or proceeding for the eviction of any person may be reopened.
A provision containing exceptions cannot be interpreted so as to enlarge the scope of sub section (3) of Section 12 of the Act.
The said Section 25 may be applicable to sub section (2) of Section 15 as amended by the Amendment Act 18 of 1987, the amendments whereunder were given retrospective effect as indicated earlier or also to a similar provision.
Clause (a) of the unamended sub section (3) of the Section 12 of the Act conferred a substantive right on the landlord to have a decree for eviction in his favour as held by this Court in the case of Ganpat Ladha, (supra) and such a right could be taken away only by a provision which either ex pressly took away that fight or could be interpreted to have taken away that right by necessary inendment We do not find any such indication either in the amended sub section (3) of Section 12 of the Act or even in Section 25 of the Amendment Act 18 of 1987.
By taking recourse to the process of reopen ing of proceedings one cannot put the hands of the clock back and create an artificial 394 date as the "first day of the heating of the suit".
No other point has been urged by learned counsel for the tenants and consequently we find no merit in the appeal filed on behalf of the tenants.
We now turn to the appeal filed by defendant No. 6 to whom the garage was found by the courts below to have been illegally sub let but who has been found to be a trespasser by the High Court.
As seen above, the High Court in its judgment under appeal repelled the claim of defendant No. 6 that he was entitled to the benefit of the amended sub section (2) of Section 15 of the Act on three grounds (i) that he was a trespasser and not a person to whom the garage had been illegally sub let, (ii) that he was not in posses sion on the relevant date namely 1st February, 1973 and (iii) that the said benefit could be extended only in a suit or proceeding under the Act and not in a writ petition which did not constitute a continuation of a suit or proceeding under the Act but was an independent proceeding under the Constitution.
It has been urged by learned counsel for defendant No. 6 that since the finding of the Courts below that the garage had been illegally sub let to the defendant No. 6 was in consonance with the pleading of the landlord in this behalf, the said finding could not be reversed in a. writ petition first, because it was not within the competence of the High Court to reverse that finding either under Article 227 or even under Article 226 of the Constitution and .secondly, that the landlord was bound by his admission in the plead ing.
In so far as the submission that the landlord was bound by his admission in the pleading is concerned, it is true that such an admission being a judicial admission under Section 58 of the Evidence Act stands on a higher footing than evidentiary admissions as held by this Court in Nagin das Ramdas vs Dalpatram Ichharam, [1974] 1 SCC page 242 but on the facts of the instant case to which reference shall be shortly made, it is the proviso to Section 58 which comes into play and the rights of the parties had to be determined de hors the said admission.
The said proviso contemplates that the Court may in its discretion require the facts admitted to be proved otherwise than by such admissions.
The scope of this provision did not fall for consideration in the case of Nagain Das (supra).
Reverting to the facts of the instant case it would be seen that there was a triangu lar dispute in this case.
After getting the plaint amended the landlord no doubt set up the case that the tenants had illegally sub let the garage to the defendant No. 6.
The case of the tenants, on the other hand, was that defendant No. 6 was a trespasser and they had never sub let the garage to him.
In so far as the defendant No. 6 is 395 concerned, the plea set up by him was that he came into possession of the garage in pursuance of an agreement en tered into between him and Daulat, son of one of the ten ants, for a period of six months.
As pointed out by the High Court in its judgment under appeal no positive plea of sub tenancy, whether lawful or unlawful was raised by defendant No. 6 in the Trial Court.
It is in this background that the controversy on the question as to whether the garage had been illegally sub let by the tenants to the defendant No. 6 had to be resolved.
First, since the defendant No. 6 himself had disputed the contention of the landlord that the garage had been illegally sub let to him by the tenants and had set up the agreement with Daulat who apparently had no interest whatsoever in the garage apart from being the son of one of the tenants, a finding that the garage had been sub let to the defendant No. 6 illegally could obviously not be given simply on the basis of the case set up by the landlord in this behalf.
Even if defendant No. 6 was permitted to take a somersault and set up a plea contrary to his pleadings, admitting the case of the landlord, any finding given on the basis of such admission would not be binding on the tenants who were contesting the plea of the landlord and had set up a case that defendant No. 6 was a trespasser and that the garage had never been sub let by them to him.
Such a finding as aforesaid vis a vis tenants would be a finding based on the admission of the landlord in his own favour.
To resolve the controversy as between the landlord and the tenants in this behalf, therefore, an independent finding on merits based on evidence and not on the basis of the plea raised by the landlord had to be given.
These are the peculiar facts of this case on account of which the proviso to Section 58 of the Evidence Act was clearly attracted and the parties had to be required to prove their respective cases by adduc ing evidence de hors the admission of the landlord in his plaint.
In so far as the submission made by learned counsel for defendant No. 6 that a finding of fact could not be inter fered with in a writ petition by the High Court is con cerned, by and large no exception can be taken thereto.
The rule in this behalf, however, is not inflexible but has exceptions recognised by judicial decisions which being well known are not necessary to be recapitulated.
For in stance this rule will not apply if a finding is arbitrary or based on no evidence or is such that no one properly in structed in law could have given it the same being in the teeth of some statutory provision or in ignorance of binding precedents.
In our opinion, the instant case is one which falls within the exception to the said rule.
It is true that the landlord by getting his plaint subsequently amended set up the plea that the garage had been illegally sub let by the tenants to defendant No. 6.
It is, 396 however, equally true that the said plea was categorically denied by the tenants and it was specifically asserted by them that they had never sub let the garage to defendant No. 6 and that the defendant No. 6 was a trespasser.
As regards the defendant No. 6 himself he pleaded to have come into possession of the garage for a period of six months on the basis of an agreement entered into between him and Daulat, the son of one of the tenants.
In the life time of his father Daulat could not have the status of a joint tenant and in the eye of law he had no interest in the garage, apart from using it in his capacity as the son of one of the tenants.
He was not in a position either to sub let the garage or even to grant a licence thereof.
As seen above, the High Court has emphasised in its judgment under appeal that no positive plea of sub tenancy, whether lawful or unlawful, was raised by defendant No. 6 in the Trial Court.
That apart, defendant No. 6 in unequivocal terms admitted in his deposition also before the Trial Court that he came in possession by virtue of the agreement with Daulat, the son of defendant No. 1.
He further admitted that he did not know that the defendant Nos. 1 to 5 were the tenants of the flat, store room and garage and that he did not make enquiry as to who were the tenants.
This being the situation there was no scope for even drawing an inference that taking of posses sion of the garage for six months by defendant No. 6 in pursuance of the agreement entered into between him and Daulat may have been with the tacit approval of the tenants namely defendant Nos. 1 to 5.
Nothing has been brought to our notice to indicate that the case of the landlord was that the tenants had sub let the garage to defendant No. 6 in his presence and he had personal knowledge about the transaction of sub letting.
The High Court has also pointed out in paragraph 25 of its judgment under appeal that in support of their plea that defendant No. 6 was a trespasser defendant Nos. 1 to 5 had led evidence and that the lower court had no justification to ignore that evidence.
It was apparently, therefore, a case where no one properly in structed in law could have come to the conclusion that the tenants had illegally sub let the garage to defendant No. 6.
In this state of affairs it cannot obviously be said that the High Court committed any error in holding that defendant No. 6 was a trespasser.
This being so, defendant No. 6 indisputably could not derive any benefit out of the amended subsection (2) of Section 15 of the Act.
The finding of the High Court that defendant No. 6 was not in possession on the relevant date namely 1st February, 1973 was based on the circumstance that on that date admit tedly the garage was in possession of a receiver appointed by the Court and not in possession of defendant No. 6.
It has been urged by learned counsel for defendant 397 No. 6 that possession of the receiver would enure to the benefit of defendant No. 6.
This proposition has been con tested by the learned counsel for the landlord.
We, however, do not find it necessary to go into this question in view of our conclusion that the finding of the High Court that the garage had not illegally been sub let to defendant No. 6 and that the said defendant was a trespasser is unassailable.
Even if the submission of learned counsel for defendant No. 6 in this behalf is accepted the nature of possession of defendant No. 6 on 1st February 1973 would be in no way better than of a trespasser.
For the same reason, we find it unnecessary to go into the correctness or otherwise of the view of the High Court that a writ petition being an inde pendent proceeding was not a proceeding in relation to a suit or proceeding under the Act.
It was lastly urged by learned counsel for defendant No. 6 that after the judgment had been delivered by the High Court on 22 July 1988 dismissing the two writ petitions it was not open to the High Court to reopen and hear the writ petitions on 18 August 1988 and 29 August 1988.
So far as this submission is concerned it may be pointed out that the very first sentence of the order of the High Court dated 18 August 1988 indicates that the judgment had not been deliv ered earlier but had only been dictated and the transcript was ready.
Listing the matter again for further hearing became necessary inasmuch as while dictating the judgment a factual position was noticed that defendant No. 4 had died and there was nothing to show that his heirs had been brought on record.
Learned counsel for the parties appeared on that date and an affidavit was taken on record.
They prayed for time to make submissions on the said question.
The matter was ordered to stand over till 29 August 1988 and in the meantime an affidavit in reply to the affidavit taken on record as aforesaid was permitted to be filed.
Time given to defendant No. 1 to file affidavit in support of the undertaking given by him earlier was also extended to 29 August 1988.
This submission also made by learned counsel for defendant No. 6 has, therefore, no substance.
In view of the foregoing discussion, there is no merit even in the appeal filed by defendant No.6.
In the result, both the appeals fail and are dismissed.
In the circumstances of the case, however, there shall be no order as to costs.
R.N.J. Appeals dismissed.
| Jamunadas C. Tuliani is the owner and the landlord of the suit premises.
He instituted a suit for ejectment against five defendants on the ground that they were tenants of the said premises and were in arrears of rent for a period of more than six months which had not been paid inspite of notice having been served on them as required by Section 12(2) of the Bombay Rents, Hotel and Lodging House Rates, Control Act, 1947 (hereinafter referred to as the Act) and were consequently liable for eviction under sub section 3(a) of the Act as it then stood.
Two other grounds were that the tenants had changed the user of the suit premises and they had committed breach of the terms and conditions of the tenancy.
Subsequently Arjun Khiamal Mak hijani was impleaded as defendant No. 6 in the suit on the assertion that the tenants had illegally sub let a portion of the premises namely garage to him and were thus liable to be evicted on that ground also.
The Trial Court decreed the suit in favour of the land lord on the plea of default in payment of rent and illegal sub letting.
The other two pleas that the tenants had changed the user of the suit premises and had committed breach of terms and conditions of tenancy were decided against the landlord.
Two appeals were preferred against the judgment of the Trial Court, one by the tenants and the other by the defend ant No. 6 and both these appeals were dismissed.
Aggrieved by the said decree the tenants and defendant No. 6 filed two writ petitions in the High Court.
Against the common judg ment of the High Court dismissing these writ petitions, the present civil appeals have been preferred.
381 Dismissing both the appeals, the Court, HELD: (i) On a plain reading of clause (a) of sub sec tion (3) of section 12 of the Act as it stood at the rele vant time, the said clause was clearly attracted and the consequence provided therein had to follow namely a decree for eviction against the tenants had to be passed.
Clause (b) of sub section (3) of the face of it was not attracted inasmuch as the said clause applied only to a case not covered by clause (a).
This is amply borne out by the use of the opening words "In any other case" of clause (b).
[387A B] (ii) Article 142 of the Constitution does not contem plate doing justice to one party by ignoring mandatory statutory provisions and thereby doing complete injustice to the other party by depriving such party of the benefit of the mandatory statutory provisions.
[390B] (iii) In a case where a tenant renders himself liable to be evicted on the ground of being defaulter in the payment of rent as contemplated by sub sections (2) and 3(a) of Section 12 of the Act, bar from the way of the landlord in instituting a suit for ejectment of a tenant is removed and he gets a right to have a decree for eviction.
Such removal of bar is not in any sense forfeiture of any rights under the lease which the tenant held.
In the instant case, the suit was not based on such forfeiture of lease under the Transfer of Property Act but was filed for the enforcement of the statutory right conferred on the landlord by sub sections (2) and 3(a) of Section 12 of the Act.
[391D; 391H;392A] (iv) The tenants are not entitled even to the benefit of the amended sub section (3) of Section 12 of the Act inas much as on a plain reading of the sub section it is not possible to give it a retrospective operation.
[392C ] The date fixed for settlement of issues in a suit cannot be equated with any other date or dates which may be fixed in the suit or the appeal.
[393C] The words "on or before such other date as the Court may fix" occurring after the words "on the first day of the hearing of the suit" in sub section (3) of Section 12 of the Act were obviously meant to meet a situation where for some inevitable reason the necessary deposit could not be made on the day of the hearing of the suit and the Court extended the time to make such deposit.
[393D] 382 By taking recourse to the process of reopening of pro ceedings one cannot put the hands of the clock back and create an artificial date as the "first day of the hearing of the suit." [393H; 394A] (v) Interpretation of statutes: "When the Act contains provisions, some of which fall under the category of beneficial legislation with regard to the tenant and the others with regard to the landlord, the assertion that even with regard to such provisions of the Act which fail under the purview of beneficial legislation for the landlord an effort should be made to interpret them also in favour of the tenant is a negation of the very principle of interpretation of a beneficial legislation on which reliance is placed on behalf of the tenants.
The argument indeed is self defeating and only justifies the cynical proverb Head I win tail you lose.
It is difficult to countenance the sentimental approach made by learned counsel for the tenants, for the simple reason that as pointed out in Latham vs R. Johnson and Nephew Ltd., (408) sentiment is a dangerous will of the wisp to take as a guide in the search for legal principles." [389B D] Harbanslal Jagmohandas and Anr.
vs Prabhudas Sivlal, [1977] 1 SCC page 576; Jaywant section Kulkarni & Ors.
vs Mino char Dosabhai Shroff & Ors., [1988] 4 SCC P. 108; Ganpat Ram Sharma & Ors.
vs Gayatri Devi, [1987] 3 SCC P. 576; Ganpat Ladha vs Sashikant Vishnu Shinde, [1978] 2 S.C.C.P. 573; Latham vs R. Johnson & Newhew Ltd., (408); Vatan Mal vs Kailash Nath, [1989] 3 S.C.C.P. 79; B.P. Khemda Pvt. Ltd. vs Birendra Kumar Bhowmick & Anr., [1987] 2 S.C.R.P. 559; Smt.
Kamala Devi Budhia & Ors.
vs Hem Prabha Ganguli & Ors., [1989] 3 S.C.C.P. 145; Praduman Kumar vs Virendra Goyal (Dead) by L.Rs., [1969] 3 S.C.R.P. 950; S.D. Chagan Lal vs Dalichand Virchand Shroff & Ors., [1968] 3 S.C.R.P. 346 and Nagindas Ramdas vs Dalpatram Ichharam, [1974] 1 S.C.C.P. 242, referred to.
|
Civil Appeal No. 1068 of 1987.
From the Judgment and Order dated 16.5.86 of the Patna High Court in Civil Writ Jurisdiction Case No. 2523 of 1981.
A.K. Sil and S.K. Sinha for the Appellants.
D.N. Goburdhan for the Respondents.
The following Order of the Court was delivered: O R D E R The 1st respondent Subodh Chandra is working as an operator grade III under the Hindustan Fertilizer Corporation Ltd. at Sindhri.
The date of birth recorded in the register maintained by the Hindustan Fertilizer Corporation Ltd. was 1.6.1931 and in the usual course he has to retire from service on 1.6.1989 on completion of 58 years of age.
He, however, filed a writ petition in the High Court of Patna claiming that his date of birth should be altered to 20th October, 1938.
In support of his case he relied on a certificate issued by the Chief Medical Officer, Sindhri.
The petition was contested by the Hindustan Fertilizer Corporation of India Ltd.
After hearing the learned counsel for the parties, the learned Judge who heard the petition held that it was not possible to accept the case of the 1st respondent that he was born in the year 1938 and he further found that the date of birth as recorded in the register of the Corporation should not be interfered with.
The learned Judge, however, passed the following order: "section Shamsul Hasan, J.: After the matter had been heard at great length and legal and factual pros and cons had been examined it appeared that the year of the birth of the petitioner being 1931 cannot be assailed nor interfered with.
Consequently, Mr. Ojha felt that since the petitioner has his problem domestic or otherwise and he in 1971 was in fact given to understand that his year of birth would be 1938, some compassionate endowment may be made in his favour.
I am entirely in agreement with Mr. Ojha.
I, therefore, dispose of this application with an expression of my desire, which may be treated as a mandate, that the petitioner may be given three more years of service as a 864 special case after his due date of retirement, which could be done by reappointing him for that period.
It is made clear that this may not be treated as a precedent for any other employee of the Institution or in any other case.
" We are of opinion that the learned Single Judge having found that the date of birth of the 1st respondent as recorded in the register of the appellant Corporation should not be interfered with, committed a serious error in making an order directing the appellant Corporation 'as a special case ' to reappoint the 1st respondent for a period of three more years after his 'due date of retirement ', which is 1.6.1989.
There was hardly any justification for passing such an order under Article 226 of the Constitution.
The reason given by the High Court is wholly untenable.
This appeal filed by the Corporation against the order passed by the learned Single Judge before this Court has, therefore, to be allowed.
We set aside the judgment of the High Court and dismiss the writ petition filed by the 1st respondent.
The appeal is disposed of accordingly.
No order as to costs.
N.P.V. Appeal allowed.
| The appellant was charged under section 120 B of the Indian Penal Code and section 167(8i) of the Sea Customs Act, i878, which were bailable offences, and was released on bail by the Chief Presidency Magistrate under section 496 of the Code of Criminal Procedure.
An application made subsequently by the complainant for cancellation of the bail was dismissed by the Magistrate on the ground that under section 496 he had no jurisdiction to cancel the bail.
The complainant invoked the inherent power of the High Court under section 561A of the Code and the High Court took the view that under that section it had inherent power to cancel the bail,and finding that on the material produced before the Court it would not be safe to permit the appellant to be at large, it cancelled the bail.
On appeal to the Supreme Court: Held, that though under section 496 of the Code of Criminal Procedure a person accused of a bailable offence is entitled to be released on bail pending his trial, if his conduct subsequent to his release is found to be prejudicial to a fair trial, he forfeits his right to be released on bail and such forfeiture can be made effective by invoking the inherent power of the High Court under section 561A of the Code.
But the inherent power has to be exercised sparingly, carefully and with caution and only where such exercise is justified by the tests specifically laid down in the section itself.
Lala jairam Das & Others vs King Emperor, (1945) L.R. 72 I.A. 120, distinguished.
|
Appeal No. 18 of 1952.
Appeal from the Judgment and Order dated December 12, 1949, of the High Court of Judicature at Bombay (Weston and Shah JJ.) in First Appeal No. 456 of 1949, arising out of Judg ment and Decree dated January 24, 1949, of the 186 Bombay City Civil Court in Civil Suit No. 106 of 1948.
M.C. Setalvad, Attorney General for India, (S.B.Jatharwith him) for the appellant.
N. P. Engineer (E. H. Bhaba with him) for the respondent.
November 5.
The Judgment of the Court was delivered by DAS J.
This is an appeal filed with the special leave of this Court.
It is directed against the judgment and decree passed December 2, 1949, by a Division Bench (Weston and Shah JJ.) of the Bombay High Court reversing, the ground of absence of jurisdiction, the judgment and decree for possession passed January 24, 1949, by the Bombay City Civil Court and directing the return of the plaint for presentation to the proper Court.
There is no dispute as to the facts material for the purposes of this appeal.
or about April 15, 1908, the Board of Trustees for the Improvement of the City of Bombay put up to auction plots Nos. 16, 17 and 18 of new survey Nos. 8234, 8235 and 8244 situate the Princess Street Estate of the Board containing an area of 2235 square yards for being let certain conditions.
One Sitaram Luxman was the highest bidder and was declared the tenant at an annual rent per square yard to be calculated at the rate of 41/2 per cent of Rs. 29 per square yard and he signed the memorandum of agreement incorporating the conditions upon which the auction was held and by which he agreed to be bound.
He deposited the moneys in terms of clause 3 of the conditions, and upon such payment entered into possession of the plots.
By clause 7 Sitaram Luxman agreed, within the time specified therein, to build and complete at a cost of not less than Rs. 50,000 a building consisting of 5 floors with suitable offices, drains etc.
according to plans and specifications to be made by an approved architect and approvedby the Board By clause 17 187 he agreed, so soon as the main building should be roofed in, to insure in the joint names of the Board and of himself and, until the granting of the lease thereinafter provided, keep insured the buildings and works the plots for the full value thereof.
Clause 18 of the conditions was as follows: "18.
The lease.
Immediately after the completion within the time limited by condition 7 of the said buildings and works to the satisfaction of the Trust Engineer testified by his certificate the Trustees will if the contract has not previously been determined grant to the tenant or his approved nominee who shall accept the same a lease of the said plot with buildings thereon for the term of 999 years from the date of the auction at the yearly rent calculated in accordance with the accepted bidding for the plot.
" Clause 25 gave power to the Board, if the buildings were not completely finished within the stipulated time and certain other contingencies, to forfeit the deposit and to enter upon and retain possession of the plots and all buildings and works then standing thereon.
Pursuant to this agreement the said Sitaram Luxman erected those plots a building which has since come to be known as the New Sitaram Building.
the completion of the building, by an Indenture of lease made April 19, 1916, between, the Trustees for the Improvement of the City of Bombay and one Rustomji Dhunjibhoy Sethna the receiver of the estate of Sitaram Luxman appointed by the High Court in Suit No. 720 of 1913, the Trustees, pursuant to the said agreement and in consideration of the monies which had been expended in the erection of the buildings and of the rent and the covenants thereinafter reserved and contained, demised unto the lessee all that piece of land situate their Princess Street estate together with the buildings erected thereon to hold the same for 999 years from April 15, 1908, paying therefor up to January, 15, 1909, the rent of Re. I and during the remainder of 188 the term the yearly rent of Rs. 2,916 by equal quarterly payments.
By the said Indenture the lessee covenanted to pay all rates and taxes, not to use or to permit to be used, without the lessor 's consent, the portion of land not built upon except as open space, not to pull down, add to or alter the buildings without such consent, to keep in repair all drains sewers etc., to repair, pave, cleanse and paint and amend all the buildings, walls etc., to permit the lessors and their employees to enter upon the premises to inspect the conditions thereof 48 hours ' notice, to use the demised premises for residential purposes or as offices and schools only and not as a public house or liquor shop or for any business or trade, throughout the term to keep the buildings insured against fire in the joint names of the lessor and the lessee and to rebuild or reinstate and repair the building if destroyed or damaged by fire or otherwise.
There was a proviso for re entry for nonpayment of rent for 30 days or for breach of any of the lessee 's covenants.
In 1925 all the properties of the Trustees for the Improvement of the City of Bombay vested in the Bombay Municipality under and by virtue of Bombay Act XVI of 1925.
By a deed of assignment made April 26, 1948, Shri Bhatia Co operative Housing Society Limited, a society registered under the Bombay Co operative Societies Act, VII of 1921, the appellant before us, acquired the lessee 's interest in the demised premises.
June 29, 1948, the appellant served a notice the respondent before us who was a monthly tenant in occupation of Block No. B/2 the ground floor of the New Sitaram Building at a monthly rental of Rs. 52 5 9 to quit and vacate the same July 31, 1948.
By his advocate 's reply the respondent maintained that he had been paying the rent regularly and otherwise performing the terms of his tenancy and claimed the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act LVII of 1947); 189 The respondent not having vacated the block under his occupation the expiry of the notice to quit, the appellant filed summary Suit No. 106 of 1948 against the respondent in the City Civil Court at Bombay for vacant possession of the said Block No. B/2 the ground floor of the said New Sitaram Buildings and mesne profits from August 1, 1948, until delivery of possession.
After stating the material facts, the appellant submitted that the Bombay Act LVII of 1947 did not apply to the demised premises.
The respondent filed his written statement maintaining that under section 28 of the Bombay Act the CityCivil Court had no jurisdiction to entertain the suit.
He averred that he had performed and observed all the conditions of his tenancy and was ready and willing to do so, that the New Sitaram Building had been constructed at the expense of the appellant 's predecessor in title and that the premises belonged to the appellant and not to the Government or a local authority and that the respondent was entitled to the protection of the Bombay Act LVII of 1947.
Leaving out the issue as to whether the appellant was entitled to any compensation, there were 4 issues raising in effect two points, namely, (1) whether the Court had jurisdiction and (2) whether the Bombay Act LVII of 1947 applied to the premises in suit.
The learned City Civil Court Judge in a well considered and careful judgment answered the issues in favour of the appellant and decreed the suit.
The respondent appealed to the High Court.
The High Court reversed the decision of the trial Judge and holding that the Bombay Act LVII of 1947 did apply to the premises and consequently that the City Civil Court, by virtue of section 28 of that Act, had no jurisdiction to entertain the suit, directed that the plaint, be returned to the appellant for being filed in the proper Court.
The High Court having declined to grant leave to the appellant to appeal to this Court, the appellant applied for and obtained special leave 190 of this Court to prefer this appeal and filed this appeal pursuant to such leave.
Learned counsel for the respondent took a preli minary objection, founded the provisions of section 28 of the Bombay Act, that the City Civil Court had no jurisdiction to entertain the suit, for that section clearly states that in Greater Bombay the Court of Small Causes alone shall have jurisdiction to entertain and try any suit between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of that Part of the Act applied and to decide any application made under the Act and to deal with any claim or question arising out of the Act and no other Court should have jurisdiction to entertain any suit or proceeding or to deal with such claim or question.
If, as contended for by the appellant, the Act does not apply to the premises, then section 28 which is an integral part of the Act and takes away the jurisdiction of all Courts other than the Small Causes Court in Greater Bombay cannot obviously be invoked by the respondent.
The crucial point, therefore, in order to determine the question of the jurisdiction of the City Civil Court to entertain the suit, is to ascertain whether, in view of section 4 of the Act, the Act applies to the premises at all.
If it does, the City Civil Court has no jurisdiction but if it does not, then it has such jurisdiction.
The question at once arises as to who is to decide this point in controversy.
It is well settled that a Civil Court has inherent power to decide the question of its own jurisdiction, although, as a result of its enquiry, it may turn out that it has no jurisdiction over the suit.
Accordingly we think, in agreement with the High Court, that this preliminary objection is not well founded in principle or authority and should be rejected.
The main controversy between the parties is as to whether the Act applies to the demised premises.
The solution of that controversy depends upon a true construction of section 4 (1) of the Bombay Act LVII of 1947, Which runs as follows: 191 "4.
(1) This Act shall not apply to any promises belonging to the Government or a local authority or apply as against the Government to any tenancy or other like relationship created by a grant from the$ Government in respect of premises,taken lease or requisitioned by the Government; but it shall apply in respect of premises let to the Government or a local authority.
" It is clear that the above sub section has three parts, namely (1) This Act shall not apply to premises belonging to the Government or a local authority, (2) This Act shall not apply as against the Government to any tenancy or other like relationship created by grant from the Government in respect of premises taken lease or requisitioned by the Government, (3) This Act shall apply in respect of premises lot out to the Government or a local authority.
The contention of the appellant Society is that the demised premises belonged to the Trustees for the improvement of the City of Bombay and now belong to the Bombay Municipality both of which bodies are local authorities and, therefore, the Act does not apply to the demised premises.
Learned counsel for the respondent, however, urges that the object of the Act, as recited in the preamble, is inter alia, to control rent.
It follows, therefore, that the object of the legislation was that the provisions of the Act would be applicable only as between the landlord and tenant.
Section 4 (1) provides for an exemption from or exception to that general object.
The purpose of the; first two parts of section 4 (1) is to exempt two cases of relationship of landlord and tenant from the operation of the Act, namely, (1) where the Government or a local authority lets out premises belonging to it, and (2) where the Government lets out premises taken on lease or requisitioned by it.
It will be observed that the second part of section 4 (1) quite clearly exempts "any tenancy or other like relationship" created by the Government but the first part makes no 192 reference to Any tenancy or other like relationship at all but exempts the premises belonging to the Government or a local authority.
If the intention of the first #part were as formulated in item (1), then the first part of section 4 (1), like the second part, would have run thus: This Act shall not apply to any tenancy or other like relationship created by Government or local authority in respect of premises belonging to it.
The Legislature was familiar with this form of expression, for it adopted it in the second part and yet it did not use that form in the first.
The conclusion is, therefore, irresistible that the Legislature did not by the first part intend to exempt the relationship of landlord and tenant but intended to confer the premises belonging to Government an immunity from the operation of the Act.
Learned counsel for the respondent next contends that the immunity given by the first part should be held to be available only to the Government or a local authority to which the premises belong.
If that were the intention then the Legislature would have used phraseology similar to what it did in the second part, namely, it would have expressly made the Act inapplicable "as against the Government or a local authority".
This it did not do and the only inference that can be drawn from this circumstance is that this departure was made deliberately with a view to exempt the premises itself.
It is said that if the first part of the section is so construed as to exempt the premises from the operation of the Act, not only as between the Government or a local authority the one hand and its lessee the other, but also as between that lessee and his subtenant, then the whole purpose of the Act will be frustrated, for it is well known that most of the lands in Greater Bombay belong to the Government or one or other local authority, e.g., Bombay Port Trust and Bombay Municipality and the greater number of tenants will not be able to avail themselves of the benefit and protection of the Act.
In the first place, the 193 preamble to the Act clearly shows that the object of the Act was to consolidate the law relating to the control of rents and repairs of certain premises and not of all premises.
The Legislature may well have thought that an immunity given to premises belonging to the Government or a local authority will facilitate the speedy development of its lands by inducing lessees to take up building leases terms advantageous to the Government or a local authority.
Further, as pointed out by Romer L. J. in Clark vs Downes(1), which case was approved by Lord Goddard C.J. in Rudler vs Franks(1) such immunity will increase the value of the right of reversion belonging to the Government or a local authority.
The fact that the Government or a local authority may be trusted to act fairly and reasonably may have induced the Legislature all the more readily to give such immunity to premises belonging to the Government or a local authority but it cannot be overlooked that the primary object of giving this immunity was to protect the interests of the Government or a local authority.
This protection requires that the immunity should be held to attach to the premises itself and the benefit of it should be available not only to the Government or a local authority but also to the lessee deriving title from it.
If the benefit of the immunity was given only to the Government or a local authority and not to its lessee as suggested by learned counsel for the respondent and the Act applied to the premises as against the lessee, then it must follow that under section 15 of the Act it will not be lawful for the lessee to sublet the premises or any part of it.
If such were the consequences, nobody will take a building lease from the Government or a local authority and the immunity given to the Government or a local authority will, for all practical purposes and in so far at any rate as the building leases are concerned, be wholly illusory and worthless and the underlying purpose for bestowing such immunity will be rendered wholly ineffective.
In our opinion, therefore, the consideration of the (I) (2) 194 protection of the interests of the sub tenants in premises belonging to the Government or a local authority cannot override the plain meaning of the preamble or the first part of section 4 (1) and frustrate the real purpose of protecting and furthering the interests of the Government or a local authority by conf erring its property an immunity from the operation of the Act.
Finally, learned counsel for the respondent urges that the words "belonging to" have not been used in a technical sense and should be read in their popular sense.
It is pointed out that it was the lessee who erected the building at his own cost, he is to hold it for 999 years, he has the right of subletting the building in whole or in part rent and terms to be fixed by him, of ejecting sub tenants, and of assigning the lease.
Therefore, it may fairly be said that the premises or, at any rate, the building belongs to the lessee and the rights reserved by the lease to the lessor are only by way of security for the preservation of the building which, the expiry or sooner determination of the lease, will vest in the lessor.
This line of reasoning has found favour with the High Court which has held that although in form the building belongs to the Bombay Municipality who are the successors in interest of the lessors, in substance the building belongs to the appellant, the assignee of the lessee, and not to the Bombay Municipality.
We are unable to accept this reasoning, for we see no reason to hold, in the circumstances of this case, that the substance does not follow the form.
By the opera tive part of the lease the demise is not only of the land but also of the building standing thereon.
This demise is 'certainly an act of ownership exercised by the lessor over the land as well as the buildings.
Under section 105 of the Transfer of Property Act a lease is a transfer only of a right to enjoy the demised, premises, but there is no transfer of ownership or interest in the demised promises to the lessee such as there is in a sale (section 54) or a mortgage (section 58).
In the present case, the lessee cannot, his 195 own covenant, use the buildings in any way he likes.
He has to use the game only as offices or schools or for residential purposes and cannot, without the lessor 's consent, use them for purposes of any trade or, business.
He cannot pull down the buildings or make any additions or alterations without the lessor 's consent.
He cannot build upon the open space.
He must, if the premises are destroyed by fire or otherwise, reinstate it.
The lessor has the right to enter upon and inspect the premises at any time giving 48 hours ' notice.
All these covenants clearly indicate that the lessor ha$ the dominant voice and the real ownership.
What are called attributes of ownership of the lessee are only the rights of enjoyment which are common to all lessees under well drawn leases, but the ownership, in the land and in the building is in the lessor.
It is true that the lessee erected the building a this own cost but he did so for the lessor and the lessor 's land agreed terms.
The fact that the lessee incurred expenses in putting up the building is precisely the consideration for the lessor granting him a lease for 999 years not only of the building but of the land as well at what may, for all we know, be a cheap rent which the lessor may not have otherwise agreed to do.
By the agreement the building became the property of the lessor and the lessor demised the land and the building which, in the circumstances, in law and in fact belonged to the lessor.
The law of fixtures under section 108 of the Transfer of Property Act may be different from the English law, but section 108 is subject to any agreement that the parties may choose to make.
Here, by the agreement the building became part of the land and the property of the lessor and the lessee took a lease that footing.
The lessee or a person claiming title through him cannot now be heard to say that the building does not belong to the lessor.
Forfeiture does not, for the first time, give title to the lessor.
forfeiture he re enters upon what has all along been his own property.
Said Lord Macnaghten in Heritable Reversionary Company vs Mullar(1): (I) (1892] A.C. 598 at 021, 196 "The words 'Property ' and 'belonging to ' are not technical words in the law of Scotland.
They are to be understood, I think, in their ordinary signification.
They are infact convertible terms; you can hardly explain the one except by using the other.
A man 's property is that which is his own, that which belongs to him.
What belongs to him is his pro perty.
" In our opinion the interest of the lessor in the demised premises cannot possibly be described as a contingent interest which will become vested the expiry or sooner determination of the lease, for then the lessor could not have demised the premises including the building as he did or before the determination, of the lease exercise any act of ownership or any control over it as he obviously has the right to do under the covenants referred to above.
The truth is that the lessor, after the building was erected, became the owner of it and all the time thereafter the demised premises which include the building have belonged to him subject to the right of enjoyment of the lessee in terms of the lease.
If it were to be held that the building belonged to the lessee by reason of his having put it up at his own cost and by reason of the attributes of ownership relied by learned counsel, then as between the local authority (the lessor) and the lessee also the building must for the same reason founded what,have been called the attributes of ownership be held to belong to the lessee and the Act will apply.
Surely that could not possibly be the case, for it would mean that the Government or a local authority will always be bound by the Act in respect of the building put up by the lessee under building leases granted by it in respect of land belonging to it.
In that case the immunity given to the Government or a local authority will be wholly illusory and worthless.
In ' our view in the case before us the demised premises including the building belong to a local authority and are outside the operation of the Act.
This Act being out of the way, the appellants were well within their 197 rights to file the suit in ejectment in the City Civil Court and that Court had jurisdiction to entertain the suit and to pass the decree that it did.
I The result, therefore, is that we allow this appeal, set aside the judgment and decree of the High Court and restore the decree passed by the City Civil Court.
The appellant will be entitled to costs throughout in all Courts.
Appeal allowed.
| The appellant, who was an elected member of the West Bengal Legislative Assembly, gave notice of his intention to put certain questions in the Assembly and on those questions being disallowed by the Speaker published them in a journal called Janamat of Ghatal, his own constituency.
The first respondent who was then the Sub Divisional Magistrate of Ghatal and whose conduct was the subject matter of some of those questions, filed a complaint against the appellant and two others, the editor and the printer and publisher of the janamat, under sections 500 and 501 of the Indian Penal Code.
The appellant pleaded privilege and immunity under article 194 of the Constitution as a bar to criminal prosecution.
The trial Magistrate as also the High Court found against him.
On appeal by special leave it was claimed on his behalf that he had an absolute privilege under article 194 of the Constitution to publish the disallowed questions and could not be prosecuted therefor.
Held, that the claim of immunity under article 194 of the Constitution must be negatived.
Clause (1) of article 194 had no application since the matter was clearly outside the scope of that clause.
Clause (2) of that Article was also inapplicable since it was not the case of the appellant that the publication was under the authority of the Legislative Assembly and it could not also be said that it came within the expression " anything said or any vote given " in that clause.
The publication of a disallowed question by a member of the Assembly does not come within the powers, privileges and immunities enjoyed by a member of the House of Commons and, consequently, cl.
(3) of article 194 also cannot be of any help to the appellant.
The immunity enjoyed by a member of the House of Commons is clearly confined to speeches made in Parliament and does not extend to the publication of the debate outside.
If he publishes his speech, made in the House, separately from the rest of the proceedings of the House, he is liable for defamation, in case.it is defamatory.
Abingdon 's case, Espinasse 's Reports, Nisi Prius 1793 1810, 228 and Creevey 's case, I Maule and Selwyn 's Reports, King 's Bench, 1813 1817, 273, referred to.
487 There is no absolute privilege attaching to the publication of extracts from the proceedings in the House of Commons and a member, who has absolute privilege in respect of his speech in) the House itself, can claim only a qualified privilege in respect of it if he causes the same to be published in the public press.
Quaere: Whether publication of parliamentary proceedings, not authorised by the House, stands on the same footing as the publication of proceedings in a court of law.
Wason vs Walter, (1868 69) L.R. 4 Q.B. 73, referred to.
M. section M. Sharma vs Sri Krishna Sinha, [1959] SUPP.
1 S.C.R. 806, distinguished.
Dr. Suresh Chandra Banerjee vs Punit Goala, , referred to.
|
Civil Appeal No. 219 of 1974.
Appeal by Special Leave from the Judgment and Order dated the 3 3 1972 of the Madras High Court in Writ Appeal No. 416 of 1970.
R. M. Mehta and section P. Nayar for the Appellant.
A. V. Rangam and Miss A Subhashini for Respondent.
The Judgment of the Court was delivered by RAY, C.J.
This appeal is by special leave from the judgment dated 3 March 1972 of the High Court of Madras.
The respondent in an application under Article 226 of the Constitution asked for a writ of mandamus directing the appellant Unison to pay the respondent pension at the rate of 1s 9d per rupee in accordance with Regulations 934 A and 934 D of the Civil Service Regulations.
862 The respondent is a Ceylonese national.
He joined the Indian Civil Service on 6th October 1933.
After 15 August 1947 he continued to serve in our country until his retirement on 31 December 1949.
At his retirement he was sanctioned an annuity of $ 743 2 shillings 6 pence per annum.
He commuted a part of his pension leaving a balance of Rs. 500 per month.
Between March, 1968 and October 1969 he resided in Uganda in East Africa.
When the respondent was in Uganda he claimed pension at the rate of 1s 9d to a rupee.
His request was accepted by the Accountant General, Madras.
The Union Government reversed the decision and directed that the conversion rate should be 1s 6d to a rupee and the excess payment should be recovered from the respondent.
The respondent thereafter made an application under Article 226 of the Constitution.
The High Court accepted the petition of the respondent on the ground that the respondent shifted his residence from Ceylon to Uganda and was, therefore, entitled to benefit under the second proviso to Article 934 of the Civil Service Regulations.
The second proviso to Article 934 was as follows: "Provided that save where a pensioner resides in India (which for the purpose of this Article and Articles 934 A, 934 B, 934 C. 934 D and 935 shall be deemed to include Burma, Ceylon, Nepal, and the French and Portuguese establishments in India) the minimum rate of conversion shall be 1/9 per rupee".
The question of payment of pension to Members of the Indian Civil Service in Sterling was examined by this Court in V. B. Raju & Ors.
vs State of Gujarat & Ors.
The Constitution (Twentyeighth Amendment) Act, 1972 introduced Article 312 A. Article 312 A confers power on Parliament to make law, inter alia, to vary or revoke prospectively or retrospectively the conditions of service as respects pension of persons who having been appointed by Secretary of State or Secretary of State in Council to a Civil Service of the Crown in India before the commencement of the Constitution retired or otherwise ceased to be in service at any time before the commencement of the Constitution (28th Amendment) Act, 1972.
The Constitution (28th Amendment) Act, 1972 came into existence on 27 August 1972.
Parliament on 21 September 1972 made the law called the Former Secretary of State Service Officers (Conditions Service) Act, 1972.
A former Secretary of State officer means a person referred to in sub clause (a) or sub clause (b) sub clause (1) of Article 312 A of the Constitution.
The respondent is a former Secretary of State Service officer within the meaning of sub clause (a) of clause (1) of Article 312 A. Section 8(1) of the Conditions of Service Act, 1972 enacts that no former Secretary of State Service officer shall be entitled or be deemed to have been entitled, to claim (a) pension in sterling; or (b) 863 that his pension shall be paid outside India; or (c) where his pension was expressed in sterling or a fixed sterling minimum was applicable in respect of the pension payable to him, that his pension shall be commuted in the rupee equivalent of the amount fixed in sterling at a rate of exchange exceeding the rate of rupees thirteen and one third to the pound sterling.
Section 12 of the Former Secretary of State Service officers (Conditions of Service) Act, 1972 states that the provisions of this Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than this Act or in any rule, regulation or order or other instrument having effect by virtue of any law other than the 1972 Act.
The Constitution Bench of this Court in V. B. Raju 's case (supra) held that the former Members of the Indian Civil Service as a result of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India or by converting $ 1000 at the rate of exchange exceeding the rate of exchange of Rupees thirteen and one third to the pound sterling.
The judgment of the High Court cannot be sustained by reason of change in law.
The appeal is accepted and the judgment of the High Court is set aside.
Parties will pay and bear their own costs.
S.R. Appeal allowed.
| Section 3 of the Drugs and Magic Remedies (objectionable Advertisements) Act provides that no person shall take 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 the maintenance or improvement of the capacity of human beings for sexual pleasure or the diagnosis, cure or treatment of any disease or condition specified in the Schedule to the Act.
Section 7 of the Act makes it penal to contravene any of the provisions of the Act.
The appellant inserted an advertisement in a newspaper to the effect that he would treat diseases "with new methods, new machines of science and electric treatment".
He was prosecuted under section 7 read with section 3 of the Act and was convicted and sentenced.
The High Court confirmed the conviction and sentence.
On appeal to this Court.
it was contended that the particular advertisement did not refer to any "drug" and, therefore, the provisions of the Act were not attracted.
Dismissing the appeal, ^ HELD: "Machines of science" designed to confer on mankind the blessings of "New Life, New Vigour, New Spirit, New Wave" advertised by the appellant are most likely to trap the ignorant and the unwary.
The articles of commerce which the appellant had banefully advertised must be brought within the mischief of the Act.
[784 GH] (1) Any article other than food which is intended to affect or influence in any way any organic function of the body of a human being is a drug within the meaning of that provision.
The so called "machines of science" or of "electric treatment" whose magically curative properties were advertised by the appellant are articles intended to influence the organic function of the human body.
[784C] (2) A machine is a tangible thing which can both be seen and felt and as such, it answers the description of an article within the meaning of section 2(b)(iii) of the Act.
A machine is intended to be and is conceived as a useful thing and is therefore, an "article".
It does no violence either to commonsense or to rules of interpretation to say that a machine is an "article".
[784 D E]
|
Civil Appeal No. 38 of 1954.
Appeal from the Judgment and Decree dated the 14th day of March 1951 of the High Court of Judicature at Patna in M.J.C. No. 230 of 1949.
Mahabir Prasad, Advocate General for the State of Bihar (R. J. Bahadur and section P. Varma, with him '), for the appellant.
C. K. Daphtary, Solicitor General for India (Porus A. Mehta and P.O. Gokhale, with him), for the respondent.
April 18.
The Judgment of the Court was delivered by JAGANNADHADAS J.
This is an appeal by the assessee on leave granted under section 66 A of the Indian Income Tax Act.
The assessee by name Chatturam Horilram Ltd., who is the appellant before us, is a private limited company carrying on in Chota Nagpur the business of exporting mica for sale to foreign countries.
The assessment in question is for the year 1939 40 and the accounting year is the calendar year 1938.
These proceedings were initiated on a notice issued to the assessee under section 34 of the Indian Income tax Act, 1922, (Act XI of 1922) (hereinafter referred to as the Act).
It is the applicability of this section to the facts of this case that is the sole matter for consideration in this appeal.
The circumstances under which the above mentioned notice under section 34 was issued are as follows.
The appellant had previously been assessed to tax on an income of Rs. 1,09,200 for the same year 1939 40.
by an order dated the 22nd December, 1939, which was reduced on appeal by Rs. 31,315.
That assessment was set aside by the Income Tax Appellate Tribunal on the 28th March, 1942, on the ground that the Indian Finance Act of 1939 was not in force during 292 the assessment year 1939 40 in Chota Nagpur, which was a partially excluded area.
On a reference by the Tribunal at the instance of the Income tax authorities, the High Court of Patna agreed with this view and pronounced on the 30th September, 1943, its judgment confirming the setting aside of the assessment.
Meanwhile, the Governor of Bihar promulgated Bihar Regulation IV of 1942, Which was assented to by the Governor General on the 30th June, 1942.
By this Regulation, the Indian Finance Act of 1939 (along with Finance Acts of other years with which we are not concerned) was brought into force in Chota Nagpur retrospectively as from the 30th March 1939.
The relevant portion of the Regulation was in the following terms.
"The Indian Finance Act, 1939, shall be deemed to have come into force in the area to which this Regulation extends on the 30th day of March, 1939".
On the 8th February, 1944, the Income tax Officer passed an order as follows: "Due to recent judgment of the High Court the assessment under section 23(3) stands cancelled and with it the notice under section 34 issued in this case becomes ineffective and is withdrawn.
Assessee derives income from mica mining and dealing, moneylending, mining rents and non agricultural sources of zamindary, and this has escaped assessment in its entirety.
Issue notice under section 22(2) read with section 34 again to file a return of income in the prescribed form and within the prescribed time, and inform the assessee that the original notice under section 34 has been cancelled".
It may be mentioned, in passing, that the notice under section 34 which is referred to in the above order as having become ineffective and as, therefore, withdrawn was a prior one which was issued on the 8th July, 1941, i.e., during the pendency of the assessee 's appeal relating to the earlier assessment before the Income tax Appellate Tribunal.
It is not quite clear from the record in what circumstances 'that notice came to be issued.
But it looks probable that it relates to certain items appearing in the accounts as 293 cash credits to the tune of four lakhs which, as will appear presently, were treated in the later proceedings as concealed income in the absence of any proper explanation by the assessee.
This prior notice under section 34, having been withdrawn, has no bearing on the question at issue before us in this appeal and has not been relied on by either side.
In pursuance of the order dated the 8th February, 1944, quoted above, a fresh notice under section 34 of the Act was issued to the appellant on the, 12th February, 1944.
The income of the assessee company was thereupon determined at a sum of Rs. 4,86,351, which on appeal to the Assistant Commissioner, was reduced by Rs. 11,187.
Out of this amount a sum of Rs. 4,04,618 related to two items of cash credits appearing in the name of the partners of the Company which in the absence of any satisfactory explanation, was treated by the Income tax authorities as secreted profits of the Company.
Before the Income tax Appellate Tribunal two points were raised.
(1) Whether the notice dated the 12th February, 1944, under section 34 of the Act was validly issued.
(2) Whether the Income tax authorities were right in holding that the cash credit items were secret profits.
Both the points were decided against the assessee.
On the assessee 's application to refer both the points for the decision of the High Court, the Tribunal declined to make a reference as regards the second point but referred the first for the opinion of the Court in the following terms: "Whether in the circumstances of the case, the notice issued on 12 2 1944 under section 34 of the Indian Income tax Act was validly issued for the assessment year 1939 40?" The question was answered against the assessee by the High Court and hence this appeal before us.
The assessee attempted to reopen the second question relating to secret profits before the High Court but the learned Judges declined to allow it to be canvassed, since the Tribunal did not refer the question to them.
We are, therefore, concerned in this appeal only with the question relating to the validity of the notice 294 issued on the 12th February, 1944, under section 34 of the Act.
It is obvious that if this notice is found to be invalid the assessee would get relief for the entire amount including the amount of secret profits.
The answer to the question which arises for consideration in this appeal depends on a correct appreciation of the requirements of section 34 of the Act.
Now, it has to be mentioned that section 34 of the Act as it originally stood in the Act of 1922, was amended by Act VII of 1939 and this was in turn amended by Act XLVIII of 1948.
At the relevant date, i.e., for the assessment year 1939 40, section 34 (1) as amended by Act VII of 1939 (and before its amendment in 1948) was in force.
It was as follows: "If in consequence of definite information which has come into his possession the Income tax Officer discovers that income, profits or gains chargeable to income tax have escaped assessment in any year, (or have been under assessed, or have been assessed at too low a rate, or have been the subject of excessive relief under this Act) the Income tax Officer may, (in any case in which be has reason to believe that the assessee has concealed the particulars of his income or deliberately furnished inaccurate particulars thereof, at any time within eight years and) in any other case at any time within four years of the end,of that year, serve on the person liable to pay tax on such income, profits or gains, or, in the case of a company, on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22, and may proceed to assess or re assess such income, profits or gains and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section".
Omitting from the above sub section those portions which are inapplicable to the facts of the present case marked out within brackets it may be seen that the facts which require to be established for the validity of the notice under this sub section are (I ' the income, profits or gains sought to be assessed should be chargeable to income tax and have escaped assess 295 ment in any year, and (2) the Income tax Officer should have discovered it in consequence of definite information which has come into his possession.
The contention of the learned counsel for the appellant is that, with reference to the facts of this case, none of these conditions can be said to have been satisfied.
It is urged that the income sought to be assessed under these proceedings was not, as a fact, chargeable to income tax during the assessment year 1939 40.
It is said that in any case there can be no question of the income having escaped assessment because, as a fact, the income tax authorities did proceed to assess the income and that what happened is that the proceedings became infructuous by reason of the High Court having pronounced them to be void.
It is also contended that there is no question of discovery of any relevant fact or information, because the non assessment of the income of the assessee for the period in question was in spite of all the information relating to the income of the assessee having been previously furnished and being in the possession of the Income tax Officer as would appear from the order of the Officer dated the 22nd December, 1939.
It is convenient to deal with this last objection in the first instance.
It may be true that all the information relating to the relevant income of the assessee which is now sought to be taxed was in the possession of the Income tax Officer in the year 1939 itself when the return was submitted in compliance with the notice under section 22(2) of the Act then issued.
But what was required under section 34(1) was not merely fresh information as to the income that escaped assessment but information as to the fact of escapement from assessment of the chargeable income.
In the present case the income tax authorities proceeded to assess the appellant in the normal way during the assessment year 1939 40 itself.
Those proceedings became infructuous, by virtue of the decision of the Income tax Appellate Tribunal and the decision of the High Court confirming it, which disclosed that the Indian Finance Act of 1939 was not in operation in 296 the relevant area at the relevant period and that in the absence thereof no valid assessment could be made.
The fact, therefore, that the income of the appellant for the relevant year remained without any valid assessment emerged only on the High Court finally giving its decision that the assessment proceedings previously taken were invalid.
If, in the circumstances, there was "escapement of chargeable income from assessment" a question to be dealt with presently there can be no doubt that this fact can be reasonably said to have been discovered by the Income tax Officer only when he got definite information as to (1) the passing of the Bihar Regulation IV of 1942 applying the Indian Finance Act of 1939 retrospectively for the relevant accounting period, and (2) the judgment of the High Court pronouncing prior proceedings to be invalid It is knowledge of both these facts, together, that would, with reference to the circumstances of the present case, constitute the discovery of the relevant fact in consequence of definite information received by the Income tax Officer.
The information as to both these facts taken together could only be after the decision of the High Court on the 30th September, 1943.
As already stated, the notice under section 34(1) , whose validity is in question, was based on the order of the Income tax Officer dated the 8th February, 1944, after the judgment of the High Court was pronounced.
That order which has been extracted above, shows clearly that it was in consequence of the judgment of the High Court in the back ground of the promulgation of Regulation IV of 1942 that fresh action under section 34 (1) was being initiated.
A number of cases (C.I. T. Bombay vs Sir Mahomed Yusuf Ismail(1); Fazal Dhala vs C.I. T., B.& 0.
Raghavalu Naidu & Sons vs C.I. T., Madras(3); and Raja Benoy Kumar Sahas Roy vs C. I. T., West Bengal(,) have been cited before us to show how the phrase "definite information" and the word "discovery" used in this section have been interpreted by the various (1) [1944] 12 I.T.R. section (3) (2) (4) 297 High Courts.
It is unnecessary to deal with these cases at any length.
There is here no question as to any new subjective facts such as change of opinion consequent on a correct appreciation of law by the very same, or another, or higher officer, that is pressed into service as bringing about "definite information " and "discovery".
We are quite clear that the promulgation of the Regulation and the decision of the High Court are objective facts, information regarding which became available to the Income tax Officer when he passed the order dated the 8th February, 1944, and it is only when these facts came to his knowledge, that the Income tax Officer can be said to have discovered that chargeable income escaped assessment in the relevant year.
The main question that requires consideration in this case is whether, on the facts, it can be said that "income chargeable to income tax has escaped assessment in the relevant year".
The contention of the learned counsel for the appellant is that during the relevant year 1939 40 the income was not chargeable to tax as a fact and that the retrospective operation of the Finance Act for the relevant year by virtue of a later legislation does not make a difference for this purpose.
To decide this question it is necessary to have a clear idea of the scheme of the Income tax Act and its correlation to the Finance Act of each year.
The Income tax Act is a standing piece of legislation which provides the entire machinery for the levy of income tax.
The Finance Act of each year imposes the obligation for the payment of a determinate sum for each such year calculated with reference to that machinery.
As has been pointed out by the Federal Court in Chatturam vs C.I. T., Bihar(1) (quoting from the judgment of Lord Dunedin in Whitney vs Commissioners of Inland Revenue (2).
"there are three stages in the imposition of a tax.
There is the declaration of liability, that is the part of the statute which deter mines what persons in respect of what property are (1) at 126.
(2) 38 298 liable.
Next, there is the assessment.
Liability does not depend on assessment.
That, ex hypothesi, has already been fixed.
But assessment particularises the exact sum which a person liable has to pay.
Lastly, come the methods of recovery if the person taxed does not voluntarily pay".
The same idea has been expressed in slightly different language by Lord Romer in the judgment of the Privy Council reported in C.I.T., Bombay & Aden vs Khemchand Ramdas(1).
Chapter III of the Income tax Act headed "Taxable Income" contains the various provisions with reference to which taxable income is determined.
The tax is leviable under section 3 and is in respect of the total income of an assessee in the previous year.
The total income is defined in section 2, sub section (15).
The application of the Act to the total income in the hands of an assessee is governed by sections 4, 4 A and 4 B and is determined with reference to concepts relating to residence, receipt and accrual, as indicated therein.
Section 3, under which the actual charge of income tax arises, is as follows: "Where any Central Act enacts that income tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually".
It is by virtue of this section that the actual levy of the tax and the rates at which the tax has to be computed is determined each year by the annual Finance Acts.
Thus, under the scheme of the Income tax Act, the income of an assessee attracts the quality of taxability with reference to the standing provisions of the Act but the payability and the quantification of the tax depend on the passing and application of the annual Finance Act.
Thus, income is chargeable to tax independent of the passing of the (1) at 428.
299 Finance Act but until the Finance Act is passed no tax can be actually levied.
A comparison of sections 3 and 6 of the Act shows that the Act recognises the distinction between chargeability and the actual operation of the charge.
Section 6 says "save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income tax in the manner hereinafter appearing, etc.
" while section 3, as already quoted above, says 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, etc." Though, no doubt, sections 3 and 4 are the charging sections in the Act as pointed out in Chatturam vs C.I.T., Bihar(1) at page 125, the wording of section 3 assumes the pre existence of chargeable income as indicated in section 6.
Hence, according to the scheme of the Act the quality of chargeability of any income is independent of the passing of the Finance Act.
In this view, therefore, though, as a fact, on account of the Finance Act not having been extended to the relevant area during the year 1939 40, legal authority was then lacking for the quantification of the tax and imposition of the liability therefor, the income of the assessee for the relevant year was nonetheless chargeable to tax at the time, in the sense explained above.
Indeed, it can also be said that the very fact of Regulation IV of 1942, having brought the Finance Act of 1939 into operation retrospectively, in this area, has factually brought about, in any case, the chargeability of the tax during that very year.
The relevant portion of the Regulation says that "the Indian Finance Act of 1939 shall be deemed to have come into force in the area to which this Regulation extends on the 30th day of March, 1939".
By virtue of this deeming provision the Indian Finance Act of 1939 must be assumed even factually to have come into operation on the date specified and the tax must be taken to have become chargeable in that very year, though the actual liability for payment could not arise until proper and (1) 300 valid steps 'are taken for quantification of the tax.
The contention, therefore, of the appellant that the income was not chargeable to tax in the year 1939 40 cannot be accepted.
The next question that arises is whether the income, though chargeable to tax in the year, can be said to have escaped assessment in the relevant year.
The argument of the learned counsel for the appellant is that since assessment proceedings had in fact been taken during the year 1939 40 by an order of assessment dated the 22nd December, 1939, it cannot be said that the income "escaped" assessment.
He urges that what happened was that, in spite of assessment having been made, the assessment proceedings became infructuous on account of the decision of the Income tax Appellate Tribunal setting aside the same and High Court agreeing with it.
He contends that, in the circumstances, this is no more than a failure of the assessment proceedings but that it is not an escapement from assessment.
He relied upon the Privy Council case in Sir Rajendranath Mukherjee vs C.I. P., Bengal(1), where their Lordships say that "the expression 'has escaped assessment ' cannot be read as equivalent to 'has not been assessed" ' and that "such a reading gives too narrow a meaning to the word 'assessment ' and too wide a meaning to the word 'escaped" '.
Learned counsel for the respondent relies on a number of subsequent 'cases of the various High Courts (Madan Mohan Lal vs C.I.T., Punjab(1); C.I. T., Bombay vs Pirojbai N. Contractor(3); and Kunwar Bishwanath Singh vs C.I. T., C.P.(4) ) which have explained.
this decision of the Privy Council and pointed out that the particular passage in that judgment which is relied upon bad reference to the, facts of that case, viz., the proceedings by way of initial assessment being still pending.
While no doubt the Privy Council case is thus distinguishable, the contention of the learned counsel for the appellant that the escapement from assessment is not to be equated to (1) at 77.
(3) (2) (4) 301 non assessment simpliciter is not without force.
Here again, it is unnecessary to lay down what exactly constitutes "escapement from assessment".
For the purpose of the present case it appears to us sufficient to say that, where earlier assessment proceedings had in fact been taken but failed to result in a valid assessment owing to some lacuna other than that attributable to the assessing authorities, notwithstanding the chargeability of income to the tax, it would be a case of chargeable income escaping assessment and not a case of mere non assessment of income tax.
The proceedings for assessment in the present case have failed to result in a valid assessment by virtue of a legal lacuna, viz., the fact of the Indian Finance Act of 1939 not having been extended to the relevant area for the relevant assessment year.
Learned counsel for the appellant suggests that the failure of the assessment proceedings in this case must be taken to have been due to the lapse of the income tax authorities.
It is said that inasmuch as Regulation IV of 1942 was actually passed during the pendency of the reference in the High Court in respect of the prior proceedings, the result would have been different, if the Regulation had been brought to the notice of the High Court.
There is, however, no reason to think so.
The High Court 's jurisdiction was only to answer the particular question that was referred to it by the Income tax Appellate Tribunal and it is extremely doubtful whether they could have taken notice of a subsequent legislation and answered a different question.
Learned counsel for the appellant also urged that in any case the deeming provision enacted in Regulation IV of 1942, may be taken to have validated the assessment proceedings previously taken in the year 1939 and at best to have restored the assessment order passed by the Income tax Officer on the 22nd December, 1939, and confirmed by the Assistant Commissioner.
But this overlooks the fact that the order had in fact been set aside by the Income tax Appellate Tribunal and that the setting aside was confirmed by the High Court on the reference made to it.
Admittedly the Regulation was passed after the decision of the 302 Income tax Appellate Tribunal.
Notwithstanding that the Regulation IV of 1942 purported to be retrospective) it cannot have the effect of effacing the result brought about by the decision of the Income tax Appellate Tribunal and the High Court on reference, unless there are clear and express words to that effect.
It might have been quite a different matter, if by the date of the Regulation the assessment pro ceedings themselves were still pending as in fact happened with reference to assessment proceedings in this area, in respect of a number of assessees for the subsequent assessment year, 1940 41, which were pending by the date of the relevant Regulation and were continued up to their termination.
They were held to be valid both by the High Court and by the Federal Court when challenged by the assessees.
(See Raja Bahadur Kamakshya Narain Singh vs C.I.T., B. & O.(1); Chatturam vs C.I. T., B. & O.(1); as also Chatturam vs C.I.T., Bihar(1).
It follows, therefore, that, in our view, the income of the assessee 'Chargeable to income tax escaped assessment in the relevant year 1939 40.
The High Court was, therefore, right in answering as it did the question referred to it.
The appeal accordingly fails and is dismissed with costs.
(1) (1946) 14 I.T R. (2) (a) at 126.
| If a lessor purchases the whole of the lessee 's interest, the lease is extinguished by merger, but there can be no merger or extinction where one of several joint holders of the mokarrari interest purchases portion of the lakhraj interest.
A partition inter se amongst several mokarraridars does not in any way affect the integrity of the tenancy or make each holder of an interest in it a separate holder of a different tenancy, and notwithstanding such partition the mokarraridars remain liable qua the lessor for the payment of the whole rent as one tenant.
White vs Tyndall (13 App.
Cas. 263) referred to.
|
thority has made a huge profit by levy of surcharge is without merits.
On the contrary it appears that the overall working of the Authority is deficit ridden.
[723 A B] & ORIGINAL JURISDICTION: Writ Petitions Nos.4660/78 & 562/79 (Under Article 32 of the Constitution).
Y. section Chitale and R. B. Datar for the Petitioner in W.P. No. 4660/78.
L. M. Singhvi, Sardar Bahadur Sahariya, Vishnu Bahadur Sahariya and L. K. Pandey for the Respondent No. 1 in both the Writ Petitions.
F. section Nariman and B. Datta and K. K. Manchanda for the Petitioner in W.P. No. 562/79.
The Judgment of the Court was delivered by DESAI, J.
Allottees of flats, constructed by the Delhi Development Authority ( 'Authority ' for short), located at Rajouri, Garden, 708 Prasad Nagar and Lawrence Road comprised in Middle Income Group scheme, question the decision of first respondent (Delhi Development Authority) to collect surcharge as part of the sale price of each flat from each of them as unauthorized and discriminatory i character, in there two petitions under Article 32 of tho Constitution.
Both the petitions raise identical contentions and i was said that Writ Petition No. 562 of 1979 is more comprehensive in character and, therefore, the facts alleged therein may be taken as representative character.
They may be briefly stated.
Delhi Development Authority was set up under the Delhi Development Act, 1957.
The Act was enacted to provide for the development of Delhi according to plan and for matters ancillary thereto and for carrying out the objects underlying the Act, the Authority has prepared Master and Zonal development plans for Delhi.
With a view to easing the acute housing problems in the capital city the Authority undertakes construction of dwelling units for people belonging to different income groups styled as Middle Income Group ( 'MIG ' for short), Low Income Group ( 'LIG ' for short), Janta and Community Personnel Service ( 'CPS ' for short).
In 1971 the Authority commenced registration of intending applicants desirous of having n dwelling unit in different income groups.
Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it and made the initial deposits as required by the terms and conditions.
Petitioners had applied and got themselves registered for allotment of flats in MIG scheme situated at Lawrence Road.
As the number of available flats in this scheme were less than the number of allottees registered, lots were drawn and the petitioners were informed that they have been allotted flats and that each of them should deposit the amount mentioned in the letter of allotment.
It appears that the petitioners paid the amount they were called upon to pay and a flat was allotted to each of them and they have entered into possession.
Petitioners now contend that the Authority being a statutory body formed with an object of working on 'no profit no loss ' basis and having prescribed a formula for working out the cost price of flats has levied and collected a surcharge from each of the petitioner.
According to the petitioners the cost price worked out in accordance with the formula prescribed by the Authority cost of each flat would be between Rs. 51,800 and Rs. 55,600 depending upon the area, extra balcony etc.
However, each one of them had to pay between Rs. 56,000 to Rs. 60,000 and that according to the petitioners a surcharge varying from Rs. 3,400 to Rs. 6,000 for a flat has been illegally and unlawfully collected by way of premium or profit.
It is further alleged that the 709 Authority has not levied and collected such surcharge from other A allottees of flats in some other MIG Schemes and that this action of levying and collecting surcharge is violative of article 14 inasmuch as persons belonging to the same class, namely, allottees of flats in MIG Scheme have been unequally treated.
It is also alleged that there was no valid or understandable justification of levying and collecting surcharge as price of flats comprised in MIG Schemes, between 1976 and 1977, and that from May 10, 1978, this unauthorised surcharge has been abolished.
Petitioners also contend that the assertion of the Authority that this surcharge was levied and collected with a view to financing housing projects for lower income groups, Janta and CPS dwelling units so as to provide these weaker sections of the society, houses at a price lower than cost price with a view to making them affordable by such members of the weaker sections of the society, is belied by facts undisputed and that the whole attempt of the Authority, in violation of its avowed policy, was to make profit by levying such illegal surcharge.
The petitioners, therefore, prayed for issue of a writ or order or direction declaring the levy of surcharge as illegal and unconstitutional and for a direction for refund thereof together with the interest at the rate of 12% per annum from the date of levy and collection till the date of refund.
In the cognate petition the petitioners are allottees of flats situated at Prasad Nagar and Rajouri Garden under MIG scheme and they complain that in their case surcharge varies from Rs. 19,200 to 22,600.
Respondents to the petition are Delhi Development Authority, No. 1 and Chairman and Vice Chairman of the Authoring, Nos. 2 and 3 respectively.
In Writ Petition No. 4660/78 the Authority is respondent 1 and Union of India, respondent 2.
Petitions were mainly contested by and on behalf of the Authority.
The Delhi Development Act, 1957 ( 'Act ' for short), was enacted as its long title shows with the a view to providing for the development of Delhi according to the plan and for arresting haphazard growth and for matters ancillary thereto.
It envisages the setting up of an Authority to be styled as Delhi Development Authority which would be a body corporate by the name aforesaid having perpetual succession and a common seal with power 'o acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name, sue and be sued.
The composition of the Authority is set out in sub section (iii) of section 3.
Amongst others, Administrator of Union Territory of Delhi would be an ex officio Chairman and a Vice Chairman to be appointed by the Central Government.
The 710 Vice Chairman may be either a whole time or part time officer as the Central Government may think fit.
Section S contemplates the constitution of an Advisory Council for the purpose of advising, the Authority on the preparation of the master plan and on such matters relating to the planning of development or arising out of or in connection with the administration of the Act.
Section 5A which was added by amending Act 56 of 1963 confers power on the Authority to constitute as many committees consisting wholly of members or wholly of other persons or partly of members and partly of other persons and for such purpose or purposes as it may think fit.
Chapter Ill A which was inserted by the Amending Act of 1963 confers power for modification of the master plain once prepared.
Chapter IV provides for development of lands.
Chapter V confers power on the Central Government to acquire land for the purposes of development or for any other purpose under the Act under the provisions to the Land Acquisition Act, 1894, and further authorises the Central Government to transfer the land so acquired to he Authority.
Chapter VI provides for finances and audit of the accounts of the Authority Chapter VII provides for supplemental and miscellaneous provisions.
Section 52 confers power on the Authority to delegate any power exercisable by it under the Act, except the power to make regulations, on such officer or local authority or committee constitued under section 5A as may be mentioned, by a notification to be published in the Official Gazette in such cases and subject to such conditions, if any, as may be specified therein.
One more section of which notice should be taken is section 57 which confers power on the Authority with the previous approval of the Central Government by notification in the official Gazette to make regulations consistent; with the Act and the rules made thereunder to carry out the purposes of this Act.
Sub section provides that until the Authority is established under the Act any regulation which may be made under sub section may be made by the Central Government and any regulation so made may be altered or rescinded by the Authority in exercise of its powers under sub section
Section 58 makes it obligatory to lay every rule and regulation made under this Act before each House of Parliament in session for a period of 30 days and subject to any alteration or modification therein the rule or regulation shall after expiry of the prescribed period mentioned have effect only in such modified form or be of no effect as the case may be, so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under the rule or regulation.
Petitioners belong to MIG, each of whom registered himself as an intending applicant for a flat in MIG scheme and each of whom has 711 been allotted a flat either in Rajouri Garden, Prasad Nagar or Lawrence Road.
Number of persons desirous of having a flat registered with the Authority far outnumbered the available flats with the result that lots had to be drawn and the lucky ones got a letter of allotment to pay the price set out in the brochure in respect of each scheme and to obtain a flat.
Each petitioner had paid the price and has entered into possession of the allotted flat.
All the petitioners now contend that the Authority has levied and collected a surcharge as part o: purchase price of flat arbitrarily and without the authority of law and has collected the same from them in violation of its object of functioning on 'no profit no loss ' basis and thereby made a huge profit.
They further contend that they have been subjected to discriminatory treatment in contravention of article 14 of the Constitution inasmuch as no surcharge has been collected from allottees of flats in MIG schemes prior to November 1976 and subsequent to January 1977 except these three schemes and one Wazirpur MIG scheme.
Further, no other MIG scheme flats have been subjected to such unauthorised levy of surcharge.
It is pointed out that the levy of surcharge has been scrapped in 1978.
The petitioners contend that levy of surcharge has no nexus to the object for which the Authority was set up namely, providing housing accommodation at reasonable price by the Authority whose declared policy is 'no profit no loss '.
It was said on behalf of the petitioners that even if the Authority was set up for providing housing accommodation to the people in different income groups (keeping in view their financial capacity/affordability) yet a statutory body like the Authority operating on 'no profit no, loss ' basis must have a scientifically prescribed formula for working out its price structure and that must be uniformly applied to all those who apply for flats and to whom they are allotted and such a statutory Authority cannot discriminate in working out the disposal price of the flats by including surcharge in respect of some MIG schemes within a certain specified period, a surcharge not authorised by law and not sanctioned by the Authority as a component of price and unknown to pricing of flats, while others similarly situated and similarly circumstanced and belonging to the same income group enjoyed the benefit cf getting flats at cost price and, therefore, petitioners have been accorded discriminatory treatment in the matter of price of flats allotted to them.
Petitioners, therefore, contend that even if they applied for flats anc got registered and were offered flats and accepted the same at the price stated in the brochure and even if it has resulted in a concluded contract yet the Court should not turn a blind eye to such gross discrimination by a statutory authority charged with a duty to provide housing accommodation acting on the declared policy of 'no profit no 712 loss '.
It was simultaneously contended that the Vice Chairman of the Authority authorised to determine the prices of flats in each income group has not made any order or has not given any direction for levy of surcharge and that the levy of surcharge was wholly unauthorised.
A preliminary objection was raised by the Authority that the petitions are not maintainable under article 32 of the Constitution inasmuch as The petitioners have not come to the Court for enforcement of a t fundamental right conferred upon the petitioners under Part III of the Constitution but the petitioners have invoked jurisdiction of this Court for a relief of re opening concluded contracts.
It was also submitted that if the Court accepts the contention of the petitioners they would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for flats at a lower price and, there fore, also the Court should not entertain the petitions.
Though we are not inclined to reject the petitions on this preliminary objection as we have heard them on merits it is undeniable that camouflage of article 14 cannot conceal the real purpose motivating these petitions, namely, to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained and petition to this Court under article 32 is not a proper remedy nor is this Court a proper forum for re opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken.
The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the, Authority for MIG scheme.
After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority.
One such brochure for ', allotment of MIG flats in Lawrence Road residential scheme is Annexure R 1.
This brochure specifies the terms and conditions including price on which flat will be offered.
It also reserved the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession.
There is an application form annexed to the brochure.
Annexure 'A ' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively.
It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor, first floor and second floor.
The statement also shows the earnest money deposited at the time of the registration and the balance payable.
It is on the basis of these brochures that the applicants applied for the flats in Lawrence Road and other MIG schemes.
They knew and are presumed to know the contents of the brochure and particularly the price 713 payable.
They offered to purchase the flats at the price on which the Authority offered to sell the same.
After the lots were drawn and they were lucky enough to be found eligible for allotment of flats, each one of them paid the price set out in the brochure and took possession of the flat, and thus sale became complete.
There is no suggestion that there was a mis statement or incorrect statement or any fraudulent concealment in the information supplied in the brochure published by the Authority on the strength of which they applied and obtained flats.
How the seller works out his price is a matter of his own choice unless it is subject to statutory control.
Price of property is in the realm of contract between a seller and buyer.
There is no obligation on the purchaser to purchase the flat at the price offered.
Even afar registration the registered applicants may opt for other schemes.
His light to enter into other scheme opting out of present offer is not thereby jeopardised or negatived and applicants so outnumbered the available flats that lots had to be drawn.
With this background the petitioners now contend that the Authority has collected surcharge as component of price which the Authority was not authorised or entitled to collect.
Even if there may be any merit in this contention, though there is none, such a relief of refund cannot be the subject matter of a petition under article 32.
And article 14 cannot camouflage the real bone of contention.
Conceding for this submission that the Authority has the trappings of a State or would be comprehended in 'other authority ' for the purpose of article 12, while determining price of flats constructed by it, it acts purely in its executive capacity and "is bound by the obligations which dealings of the State with the individual citizens import into every transacting entered into the exercise of its constitutional powers But after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se.
No question arises of violation of article 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act.
In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract" (see Radhakrishna Agarwal & Ors.vs State of Bihar & Ors.)
Petitioners were under no obligation to seek allotment of flats even after they had registered themselves.
They looked at the price and flats and applied for the flats.
This they did voluntarily.
They were advised by the brochures to look at the flats before going 714 in for the same.
They were lucky enough to get allotment when the lots were drawn.
Each one of them was allotted a flat and he paid the price voluntarily.
They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat.
I The Authority in its affidavit in reply in terms stated that it is willing to take back the fiats and to repay them the full price.
The transaction is complete, viz., possession of the flat is taken and price is paid.
At a later stage when they are secure in possession with title, petitioners are trying to get back a part of the purchase price and thus trying to re open and wriggle out of a concluded contract only partially.
In a similar and identical situation a Constitution Bench of this Court in Har Shankar & ors.vs The Dy.Excise & Taxation Commr.& ors.has observed that those who contract with open eyes must accept the burdens of the contract along with its benefits.
Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract.
By such a test no contract would ever have a binding force.
The jurisdiction of this Court under article 32 of the Constitution is not intended to facilitate avoidance of obligations voluntarily incurred.
It would thus appear that petitions ought not to have been entertained.
However, as the petitions were heard on merits, the contentions canvassed on behalf of the petitioners may as well be examined The principal contention canvassed on behalf of the petitioners is that the treatment meted to them by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG scheme constructed and allotted prior to November 1976 and after January 1977.
MIG flats involved in these petitions were constructed and were available for allotment in November 1976 and the lots were drawn in January 1977.
There is one more MIG scheme at Munirka where the allotment took place at or about the same time but in which case no surcharge was levied.
The contention is that once for the purpose of eligibility to acquire a flat, the criterion is grounded in income brackets, MIG, LIG, et .
those in the same income bracket form one class even for the purpose of determining disposal price of flat allotable to them irrespective of situation, location or other relevant determinants which enter into price calculation and therefore, in the same income group there cannot be differentiation by levying of surcharge in some cases and charging only the cost price in other cases and that the discrimination is thus writ large on the face of the record 715 because by levying surcharge in case of petitioners they have been treated unequally and with an evil eye.
It is difficult to appreciate how article 14 can be attracted in the circumstances hereinabove mentioned.
Cost price of a property offered for sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula.
Except the submission that the Authority has a proclaimed policy of constructing and offering flats on 'no profit no loss ' basis which according to Mr. Nariman has a statutory flavour in the regulations enacted under the Act, the Authority is under no statutory obligation about its pricing policy of the flats constructed by it.
When the flats were offered to the petitioners the price in round figure in respect of each flat was mentioned and surcharge was not separately set out and this price has been accepted by the petitioners.
The obligation that regulations are binding on the Authority and have provided for a statutory price fixation formula on 'no profit no loss ' basis will be presently examined but save this the Authority is under no obligation to fix price of different flats in differed schemes albeit in the same income group at the same level or by any particular statutory or binding formula.
The Authority having the trappings of a State might be covered by the expression 'other authority ' in article 12 and would certainly be precluded from according discriminatory treatment to persons offering to purchase flats in the same scheme.
Those who opt to take flats in a particular income wise area wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment in the same class may attract article 14.
But to say that throughout its course of existence the Authority would be bound to offer flats income groupwise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure.
In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide.
The experts alone can work out the mechanics of price determination; Court can certainly not be expected to decide without ' the assistance of the experts (See Prag Ice & oil Mills and Anr.vs Union of India) In the leading judgment it has been observed that mechanics of price fixation have necessarily to be left to the executive and unless it is patent that there is hostile discrimination against a class the processual basis of price fixation has to be accepted in the generality of cases as valid.
716 This Court in Avinder Singh vs State of Punjab,(l) approved the following dictum of Willis on Constitutional Law, page 587: "The State does not have to tax everything in order to tax something.
It is allowed to pick and choose districts, objects, persons, methods and even rates for taxation if it does so reasonably .
The Supreme Court has been practical and has permitted a very wide latitude in classification for taxation.
What is forbidden by article 14 is discrimination amongst persons of the same class and for the purposes of allotment of flats scheme wise, allottees of flats in the same scheme, not different schemes in the same income bracket, will have to be treated as a class and unless in each such class there is unequal treatment or unreasonable or arbitrary treatment, the complaint that article 14 is violated cannot be entertained.
Therefore, in the State of Gujarat & Another vs Shri Ambica Mills Ltd., Ahmedabad, etc., Mathew, J., speaking for the Court observed as under: "A reasonable classification is one which includes all who are similarly situated and none who are not.
The question then is what does the phrase 'similarly situated ' mean ?
The answer to the question is that we must look beyond the classification to the purpose of the law.
A reasonable classification is one which includes all persons who are similarly situated with respect to the purpose of the law.
The purpose of a law may be either the elimination of a public mischief or the achievement of some positive public good."
" Is the classification income wise scheme wise violative of article 14 in any manner ? The Authority formulates income wise area wise schemes for constructing flats.
Petitioners contend that there should be only income wise classification wholly ignoring area and time factor for classification.
They say that allottees of flats in all MIG schemes irrespective of area and location and irrespective of when the flats were constructed form one class for determining price of flats.
There is no merit in this contenting.
What are price determinants ?
Price of land, building material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation.
Their cost varies time wise, place wise, availability wise.
All these uncertain factors cannot 717 be overlooked for the purpose of classification.
Therefore, it is not possible to hold that allottees of flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy only valid basis for classification would be income wise, area wise, time wise, scheme wise, meaning all flats constructed at or about the same time in same area in one project for particular income group will form a class.
And there is no discrimination amongst them.
Pricing policy is an executive policy.
If the Authority was set up for making available dwelling units at reasonable price to persons belonging to different income groups it would not be precluded from devising its own price formula for different income groups.
If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination.
In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply or can afford it on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract article 14.
People in, the MIG can be charged more than the actual cost price so as to give benefit to allottees of flats in LIG, Janata and CPS.
And yet record shows that those better off got flats comparatively cheaper to such flats in open market.
It is a well recognised policy underlying tax law that the State has wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others.
It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a violation of article 14, (see East India Tobacco Co. vs State of Andhra Pradesh).
Can it be said that classification, income wise cum scheme wise is unreasonable ?
The answer is a firm No.
Even the petitioners could not point out unequal treatment in same class.
However, a feeble attempt was made to urge that allottees of flats in MIG scheme at Munirka which project came up at or about the same time were not subjected to surcharge.
This will be presently examined but aside from that, contention is that why within a particular period, namely, November 1976 to January 1977 the policy of levying surcharge was resorted to and t hat in MIG schemes pertaining to period prior to November 1976 and later April 1977 no surcharge was levied.
718 If a certain pricing policy was adopted for a certain period and was uniformly applied to projects coming up during that period, it cannot be the foundation for a submission why such policy was not adopted earlier or abandoned later.
It was, however, said that levying of surcharge runs counter to object for which the Authority was set up, namely, to make available housing accommodation on 'no profit no loss ' basis.
The argument proceeds on the assumption that the principle of 'no profit no loss ' implies that in respect of each flat the cost of its construction must be worked out and that alone can be the disposal price of each flat.
Principle of 'no profit no loss ' has been explained by the respondents.
It IS said that in the over all working, planning and execution of projects which the Authority undertakes as part of development of Delhi, the integral part of it being construction of flats for different income groups the motives and working of it would not be profit oriented but would work on 'no profit no loss ' economic doctrine.
This would not for a moment suggest that the principle of 'no profit no loss ' should apply either to every flat or to every scheme or to every piece of land developed by the Authority.
It would be impossible for the Authority to function on such fragmented basis and such a policy statement has not been made by the Authority.
Of course, some public statement appears to have been made that the overall working of the Authority is on "no profit no loss ' basis.
Respondent 1 has been able to point out that the Authority 's housing scheme, as a whole has been running in a heavy deficit because flats including such as those of the petitioners actually cost much more than the initially determined estimates and by the time flats are ready for occupation initial estimates founded on prevalent market prices of materials and labour escalate and revised estimates have to be made.
It is also shown that till Municipal authority takes over municipal services the Authority spends for the same and incurs cost.
Apart from that petitioners have not been able to show that the Authority is actuated by commercial profit oriented approach in its overall working.
It is, however, necessary to examine the contention whether this 'no profit no loss ' policy statement has any statutory flavour as contended by Mr Nariman.
The regulations styled as the Delhi Development Authority (Management and Disposal of Housing Estates) Regulations, 1968, ( 'Regulations ' for short) are framed in exercise of the powers conferred by section 57 and were laid before the Houses of Parliament as required by section 58.
Disposal price has been defined in Regulation 2(13) to mean in relation to a property such price as may be fixed by the Authority for such property.
There is not the slightest or even a remote reference to 'no profit no loss ' formula for 719 determining the cost price.
A quick survey of the Regulations do A not spell out any formula for price determination on the basis of 'no profit no loss '.
Whether the power to determine disposal price is in the Housing Committee will be presently examined.
Regulations, however, on the contrary indicate that the power to determine the disposal price is vested in the Authority and as price has been fixed by the delegate of the Authority even if it is inclusive of surcharge it cannot be said that it runs counter to the declared policy of the Authority.
It is at this stage necessary to examine the contention that in the case of Wazirpur and Munirka LIG schemes which came up during this very period no surcharge was levied and, therefore, there is invidious discrimination amongst members of the same class.
Again the argument proceeds that income wise classification alone is valid.
Here time wise (November 1976 to January 1977) classification is relied upon.
It is an admitted position that no surcharge is levied on MIG flats at Munirka.
The affidavit in reply shows that the land on which flats are constructed in Munirka MIG scheme turned out to be very rocky with the result that the construction cost in respect of flats at Munirka MIG scheme worked out at Rs. 456 per plinth area per metre whereas in respect of Lawrence Road it came to Rs. 401.54 p. Only.
The Authority, therefore, thought that if surcharge is levied on flats under MIG scheme in Munirka area the disposal price would be very high and would be beyond the reach of MIG.
It is in this background of the special facts that 'no surcharge was levied in respect of any flat in MIG in Munirka area.
Project wise price fixation cannot be dubbed as arbitrary or discriminatory in comparison with other projects at different places.
It was, however, pointed out that 132 flats in Rajouri Garden MIG scheme were disposed of without levying surcharge as component of sale price.
It is pointed out in affidavit in reply that those flats were handed over to the Government of India for meeting their needs for staff quarters and that was done in the year 1978.
It is also pointed out that the Government charged half the price of the land in respect of these 132 flats and, therefore, surcharge was not levied.
There is two fold fallacy in this submission.
Government ordinarily is in a class by itself and its needs of staff quarters deserve to be met in large public interest.
Government has not got any undeserved benefit at the cost and risk of petitioners.
Hence their complaint in this behalf is without merits.
It was next contended that surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not answer any 720 rational, tangible, scientific cr understandable formula.
How the figure of surcharge has been worked out has been explained in detail in affidavit in reply.
Briefly recapitulating the same, it may be mentioned that initial estimates for 304 MIG flats in Prasad Nagar area were prepared in or about 1971 and the estimated cost was Rs. 1,17,83,200 and that on March 21, 1972, an estimate of Rs 1,09,97,100 was sanctioned.
After the work commenced and the actual cost started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000 which was approved by the Vice Chairman on September 18, 1976.
According to the revised estimate the approximate disposal cost for each flat came to Rs. 68,202 and the cost of land per dwelling unit was Rs. 7,008.
Extracts of original notes of Financial Adviser (Housing) and the approval of the same by the Vice Chairman have been set out in the affidavit in reply.
The subsequent revised estimates show that disposal price of each flat would be Rs. 75,200.
In the meantime the Income Tax Department wanted to acquire 40 MIG flats in Prasad Nagar area and the same were offered at the price of Rs. 75,000, per flat.
Commissioner of Income Tax accepted the price.
This became the starting point for working out the disposal price in that period.
The difference between the cost price and the disposal price of Rs. 75,000 per flat was treated as surcharge and the purpose was to use the extra money for extending cost reduction benefit to the allottees of flats in LIG, Janata and CPS schemes.
Affidavit in reply of the Secretary of Respondent 1 provides further information which show that the cost price would be Rs. 78,000.
Therefore, at best the component of surcharge would be between Rs. 1700 to Rs. 2200 in Rajouri Garden MIG flats.
Similarly, with regard to MIG flats at Lawrence Road the actual cost price would be in close proximity of the disposal price would be in close proximity of the disposal price charged from the petitioners.
It is, therefore, difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.
The next contention is that Vice Chairman had no authority to levy surcharge and that even if he has authorised the same it runs counter to the principle of fixing disposal price incorporated in Resolution No. 209 dated November 26, 1974.
The Vice Chairman is to be appointed by the Central Government as per section 3(3)(b) of the Act.
It appears that this Vice Chairman is whole time officer and will be the Chief Executive of the Authority.
This becomes clear from regulation 3 of the Regulations which provides as under: "3.These regulations shall be administered by the Vice Chairman, subject to general guidance and resolutions of the 721 Authority, who may delegate his powers to any officer of the Authority".
Thus the Vice Chairman, subject to general guidance and resolutions cf the Authority, shall administer the regulations.
He can delegate the functions to any officer of the Authority.
Regulation 59 is important which reads as under: "59.The Authority may delegate all or any of its powers under these regulations to the Vice Chairman or to a whole time member".
Armed with this power of delegation the Authority adopted Resolution No. 60 dated February 21, 1970 which reads as under: "Resolved that the recommendations of the Committee be approved and all the powers of Delhi Development Authority be exercised by the Housing Committee and the Chairman, Delhi Development Authority be authorised to constitute the said committee, determine the organisational set up and take (sic) all efforts for implementing the housing and allied schemes".
Serious exception was taken to this gross abdication of its powers and functions by the Authority.
The composition of the Authority as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of Municipal Corporations of Delhi and representatives of Metropolitan Council as and when set up.
Three other persons were to be nominated by Central Government of whom one shall be person with experience of planning.
It is a high power body.
Yet it completely abdicated its power and authority in favour of Housing Committee.
The Housing Committee will practically supplant the Authority.
But the more objectionable part of Resolution No. 60 is that such Housing Committee which is to enjoy all powers and functions of the Authority was to be constituted by the Chairman at his sole discretion because he was authorised not only to constitute the Housing Committee but to determine organisational set up and then make all efforts for implementing the housing and allied schemes.
It is really difficult to appreciate such whole sale abdication or delegation of powers by a statutory authority in favour of a Committee whose composition would be determined by one man, the Chairman.
By a process of elimination the Housing Committee could supplant the Authority and the Chairman could constitute Housing Committee.
Therefore, the Chairman enjoyed 722 a very wide discretionary power.
Though Mr. Nariman did challenge the validity of Resolution No. 60, Mr. Chitaley in cognate petition refrained from doing so.
Once the power to delegate is given by the Regulations the challenge to validity on the ground of delegation must fail It is, however, necessary to examine the submission whether Vice Chairman could have permitted levy of surcharge as a component of the price of flats in MIG schemes.
In this connection it would be advantageous to refer to Resolution No. 20 dated June 18, 1968.
Of the Authority by which the recommendations of the Standing Committee, inter alia, empowering the Vice Chairman to approve forms of application as well as to fix the disposal and hire purchase price were accepted.
Resolution No. 209 is the one adopted by the Housing Committee.
It takes note of the delegation of powers to fix disposal and hire purchase price of flats to the Vice Chairman and further provides that if there is a marginal saving in any scheme the amount is always diverted to subsidies cost of Janata and CPS houses.
It seems the Resolution is for information of the Housing Committee and the Housing Committee has merely resolved that the information be noted.
The Resolution No. 200 of the Authority with Resolution No. 209 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with section 59 clearly envisages such delegation of powers.
It is, therefore, idle to contend that the Vice Chairman had no authority to levy the surcharge as component of disposal price of flats.
It was next contended that even if Vice Chairman had such power there is nothing to show that he has exercised this power and that, therefore, somewhere without any authority someone has added the surcharge to the disposal price and that, therefore, the levy of surcharge is unauthorised.
The submission seems to be factually incorrect.
The note of Accounts officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000 to the Commissioner of Income Tax for the Income Tax Department and that should be the disposal price This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice Chairman.
There fore, the price of Rs. 75,000 as the disposal price is approved by the Vice Chairman.
Even if it includes surcharge it cannot be said with confidence that the Vice Chairman has not approved the surcharge as a component of disposal price.
723 The last contention is that the Authority has made a huge profit by levy of surcharge.
In this connection statistical table was annexed to the petition and there was serious controversy about the facts and figures set out therein, by the other side.
Having gone through the detailed affidavit in reply it transpires that the contention is without merits.
Therefore, there is no substance in the contention that the Authority has made a huge profit.
On the contrary it appears that the overall working of the Authority is deficit ridden.
These were all the contentions in these petitions and as there is no Merit in any of them the petitions are dismissed.
There will be no order as to cost.
N.K.A Petitions dismissed.
| The Delhi Development Authority Act was enacted to provide for the development of Delhi through Master and Zonal Plans.
The authority undertakes constructions of dwelling units for people belonging to different income groups styled as Middle Income, Low Income, Janata and Community Personnel Service.
In 1971, the authority commenced registration of intending applicants desirous of having dwelling units in different Income Groups.
Some of the petitioners got themselves registered with the authority in accordance with the terms and conditions laid down by it, for allotment of flats in deposits as required by the terms and conditions for MIG Scheme at Lawrence Road, Prasad Nagar and Rajouri Garden and made the initial deposit.
The number of available flats being less in each scheme compared to the number of applicants registered, lots were drawn and the petitioners were informed that each of them should deposit the amount mentioned in the letter of allotment.
The Petitioners paid the amount as intimated and consequently a flat was allotted to each of them and they entered into possession.
In their writ petitions under Article 32, the petitioners assailed the levy and collection of surcharge in addition to the cost price of the flats.
It was con tended on their behalf that; (i) The treatment meted by the Authority is discriminatory inasmuch as no surcharge was levied on flats in MIG schemes constructed and allotted prior to November, 1976 and after January, 1977; (ii) As the authority formulates income wise, area wise schemes for constructing flats, there should be only income wise classification wholly ignoring area and time factor for classification; (iii) Levying of surcharge runs counter to the object for which the authority was set up namely to make available housing accommodation on "no profit no loss" basis; (iv) Surcharge is arbitrary inasmuch as how the surcharge is worked out in each case does not conform to any rational, tangible, scientific or understandable formula; (v) The Vice Chairman had no authority to levy surcharge and that even if he has authorised the same, it runs counter to the principle of fixing disposal price incorporated in resolution No. 209 dated November 26, 1974; (vi) Even if the Vice Chairman had such power there is nothing to show that he has exercised this power and given direction for adding the surcharge to the disposal price and that therefore, the levy of surcharge is unauthorised; and (vii) that the authority has made a, huge profit by levy of surcharge.
The respondents raised a preliminary objection that the petitions were not maintainable under Article 32 of the Constitution inasmuch as the petitioners have not come to the Court.
fol enforcement of a fundamental right conferred upon.
705 them under Part III of the Constitution but that the petitioners have invoked the jurisdiction of the Court for the relief of reopening concluded contracts, and that if the court accepts the contentions, the petitioners would derive an unfair advantage over others who may not have applied for flats because of the price set out in the brochure and if surcharge is excluded they may have applied for Flats at a lower price.
The Court should not therefore entertain the petitions.
Dismissing the petitions, ^ HELD: 1.
As the Court has heard the petitions on merits it is not inclined to reject them on the preliminary objections.
It is undeniable that camouflage of article 14 cannot conceal the real purpose motivating the petitions, namely to get back a part of the purchase price of flats paid by the petitioners with wide open eyes after flats have been securely obtained.
Petition to this Court under article 32 is not a proper remedy nor is the Supreme Court a proper forum for re opening concluded contracts with a view to getting back a part of the purchase price paid after the benefit is taken.
[712 D E] In the instant case it is difficult to appreciate how article 14 can be attracted.
Cost price of a property offered for Sale is determined according to the volition of the owner who has constructed the property unless it is shown that he is under any statutory obligation to determine cost price according to certain statutory formula.
The authority is under no obligation to fix price of different flats in different schemes albeit in the same income group at the same level or by any particular statutory or binding formula.
Those who opt to take flats in a particular income wise, area wise scheme in which all flats came up together as one project, may form a class and any discriminatory treatment In the same class may attract article 14.
But to say that the Authority would be bound to offer flats income group wise according to the same price formula is to expect the Authority to ignore time, situation, location and other relevant factors which all enter the price structure.
[713 E, 715 A F] Radhakrishna Agarwal & Ors.
vs State of Bihar & Ors. ; at 255; Har Shankar & Ors. etc.
vs The Dy.
Excise & Taxation Commr.
& Ors. ; , referred to.
In price fixation executive has a wide discretion and is only answerable provided there is any statutory control over its policy of price fixation and it is not the function of the Court to sit in judgment over such matters of economic policy as must be necessarily left to the Government of the day to decide.
The experts alone can work out the mechanics of price determination, Court can certainly not be expected to decide without the assistance of the experts.
[715 F G] Prag Ice & Oil Mills and Anr. etc.
vs Union of India; , at 330; Avinder Singh vs State of Punjab ; ; State of Gujarat & another vs Shri Ambica Mills Ltd. Ahmedabad, etc.
[974] 3 S.C.R 760 at 782; referred to.
Price of land, building, material, labour charges and cost of transport, quality and availability of land, supervision and management charges are all variable factors that enter into price fixation.
Their cost varies time wise, place wise and availability wise.
All these uncertain factors cannot be overlooked for the purpose of classification.
It is not possible therefore to hold that allottees of 706 flats in MIG scheme at any place and executed at any time will form one class for the purpose of pricing policy.
The only valid basis for classification would be income wise, area wise, time wise, scheme wise, meaning all flats constructed at or about the same time in same area in one project for particular income group will form a class, and there is no discrimination amongst them.
[716 G H. 717 A B] 4.
Pricing policy is an executive policy.
If the Authority was set up for making available dwelling units at reasonable prices to persons belonging to different groups it would not be precluded from devising its own price formula for different income groups.
If in so doing it uniformally collects something more than cost price from those with cushion to benefit those who are less fortunate it cannot be accused of discrimination.
In this country where weaker and poorer sections are unable to enjoy the basic necessities, namely, food, shelter and clothing, a body like the Authority undertaking, a comprehensive policy of providing shelter to those who cannot afford to have the same in the competitive albeit harsh market of demand and supply nor can afford on their own meagre emoluments or income, a little more from those who can afford for the benefit of those who need succour, can by no stretch of imagination attract article 14.
[717 B D] 5.
It is a well recognised policy underlying tax law that the State has a wide discretion in selecting the persons or objects it will tax and that the statute is not open to attack on the ground that it taxes some persons or objects and not others.
It is only when within the range of its selection the law operates unequally, and this cannot be justified on the basis of a valid classification, that there would be a. violation of article 14.
[717 E F] East India Tobacco Co. vs State of Andhra Pradesh, ; 6.
The principle of "no profit no loss" cannot apply either to every flat or to every scheme or to every piece of land developed by the Authority.
It would be impossible for the Authority lo function on such fragmented basis and such a policy statement has not been made by the Authority.
[718 D E] 7.
There is not the slightest or even a remote reference to "no profit no loss" formula for determining the cost price.
A survey of the Regulations do not spell out any formula for price determination on the basis of "no profit no loss".
Project wise price fixation cannot be dubbed as arbitrary or discriminatory by comparing it with other projects at different places or at different times.
[719 A B In the instant case after the work commenced and the actual cost estimate started coming in the revised estimate for 304 flats was of the order of Rs. 2,07,33,000/ which was approved by the Vice Chairman on September 18, 1976.
According to the revised estimate the approximate disposal cost for each flat.
came tc Rs. 68.202/ and the cost of land per dwelling; unit was Rs. 7008/ .
The revised estimate showed the disposal price of each flat as Rs. 75.200/ .
The Commissioner of Income Tax who wanted to acquire 40 MIG flats in Prasad Nagar area offered the price of Rs. 75,000/ per flat which price was accepted.
The difference between the cost price and the disposal price of Rs. 75,000/ per flat was treated as surcharge and the purpose was to use the extra money for extending price reduction benefit to The allottees of flats in LIG, Janata and CPS schemes.
It is therefore difficult to entertain the contention that even if surcharge could be justified its actual computation is arbitrary and irrational.
[720 B E, E F] 707 8 .
The Vice Chairman is appointed by the Central Government as per Section.
3(3)(b) of the Act.
He is a whole time officer and the Chief Executive of the Authority.
The composition of the Authority as set out in section 3 would include such persons as Finance and Accounts Member, Engineering Member, representatives of Municipal Corporation of Delhi and representatives of Metropolitan Council.
Three other persons, were to be nominated by Central Government of whom one shall be person with experience of planning.
It is a high power body.
Yet it completely abdicated its power and authority in favour of Housing Committee.
The Housing Committee will practically supplant the Authority.
By a process of elimination the Housing Committee would supplant the Authority and the Chairman could constitute the Housing Committee.
Therefore, the Chairman enjoyed a very wide discretionary power.
However once the power to delegate is given by the Regulations, the challenge to validity on the ground of delegation must fail.
[720 G H; 721 E H, 722 A] 9.
Resolution No. 209 is the one adopted by the Housing Committee.
It takes note of the delegation of powers to fix disposal and hire purchase price of flats to the Vice Chairman and further provides that if there is a marginal saving in any scheme the amount be diverted to subsidies cost of Janata and CPS houses.
The Resolution No. 200 of the Authority read with Resolution No. 709 of the Housing Committee sets out clearly that the power to fix the disposal price was delegated to the Vice Chairman and ordinarily such excessive delegation to one man may be galling to a judicial body yet the scheme of regulations and the provisions contained in Regulation 3 read with Section 59 clearly envisages such delegation of powers.
[722 C E] 10.
The note of Accounts Officer (Housing) dated September 8, 1976, submitted to the Financial Advisor (Housing) shows that the flats have been offered at the rate of Rs. 75,000/ to the Commissioner of Income Tax for the Income Tax Department and that should be the disposal price.
This note was approved by the Financial Advisor (Housing) and ultimately countersigned by the Vice Chairman Even if it includes surcharge it cannot be said with confidence that the Vice Chairman has not approved has not approved the surcharge as a component of disposal price.
[722 G H]
|
N: Criminal Appeal Nos.
208 209 of 1974.
Appeals by Special Leave from the Judgment and order dated 18/19 1 1974 of the Bombay High Court in Criminal Revision Application Nos.
821/72 and 305/74.
AND SPECIAL LEAVE PETITION (CRL.) No 630 OF 1977.
From the Judgment and order dated 30 6 1972 of the Madhya Pradesh High Court in Crl.
Rev. No. 81/72.
R. K. Garg, B. A. Desai.
V. J. Francis, and D. K. Garg for the Appellant in Crl.
A. Nos. 208 209.
section K. Gambhir and Miss Ram Rikhyani for the Petitioner in SLP No. 630/77.
J. L. Nain and M. N. Shroff for the Respondent in Crl.
Nos. 208 209.
179 The Judgment of the Court was delivered by SARKARIA, J.
These appeals by special leave directed against judgments dated January 17, 1974 and March 29, 1974, of the Bombay High Court, raise, among others, three important questions, namely: (1) Whether an officer of the Railway Protection Force, making an inquiry under the Railway Property (Unlawful Possession) Act, 1966 (hereinafter referred to as the 1966 Act, in respect of an offence under Section 3 of that Act of unlawful possession of the railway property, is a Police officer for the purposes of Section 25, Evidence Act and Section 162 of the Code of Criminal Procedure.
1898; and as such.
any confession or incriminating statement recorded by him in the course of an inquiry under Section 9 of the Act is inadmissible in evidence.
(2) Whether a person arrested by an officer of the Railway Protection Force under Section 6 of the Act for the alleged commission of an offence under Section 3 of the Act, is a "person accused of an offence" within the meaning of Article 20(3) of the Constitution.
(3) Whether Section 9 of the Act is violative of Article 14 of the Constitution.
E The appeals arise in these circumstances: The Inspector, Central Intelligence Bureau, Head Quarters, Bombay (Shri P. A. Kakade) filed a complaint before the Presidency Magistrate, 35th Court, Victoria Terminus, Bombay, complaining of the commission of an offence by the appellants, herein, (in Crl.
Appeals 208 and 209 of 1974), under Section 3 of the Act.
The allegations in the complaint, as summarised in the judgment of the High Court in Criminal Revision Application No. 821 of 1973, are as under: On November 21, 1970, the Assistant Security officer, Central Railway, Bhusawal intimated to the Chief Security officer, Bombay V.T. that two wagons Nos.
ERKC 9447 exhibit HSPG BNDN to Akola and Wagon No. ERKC 75531 exhibit were unloaded by Unloading Foreman, one B. D. Raverkar of Akola Goods Shed.
Seventynine M. section Plates (Mild Steel Plates) were unloaded from Wagon No. ERKC 75531.
On November 14, 1970, one Ram Singh who was having R. R. No. 982859 Invoice No. 3 for 78 M.S. Plates and Invoice No. 2 RR No. 892857 for 60 M.S. Plates signed the RRs.
and endorsed the same to M/s. Vallabhaji Brothers, Clearing Agents at Akola Goods Shed for 180 taking the delivery.
Clerk Onkar of the said firm was sent to take delivery.
He took delivery of 78 plates from one J. Meshram after paying the necessary railway dues of Rs. 1,813.80 P., and the 78 Plates were removed by the said party in lorries.
The Delivery of the second consignment of 60 M.S. Plates was taken on November 16, 1970 after paying the railway dues of Rs. 2.247.40 P. The said Ram Singh posed as a proprietor of Modern Industries which was found to be a fictitious firm, which never existed.
The Deputy Commercial Superintendent, Bhusawal, on November 19, 1970, informed all concerned that the delivery from these wagons was obtained on fraudulent Railway Receipts.
The inquiry into this case was entrusted to the Complainant Inspector, P. A. Kakade, who is an officer of the Railway Protection Force.
In the course of that inquiry, the statements of certain persons, including that of Balkishan, appellant herein, were recorded by the said Inspector.
On January 31, 1971, while inquiring into another case of Wadi Bunder in which Balkishan was involved, the Inspector recorded the confessional statement of Balkishan, appellant, herein.
After making that confessional statement, Balkishan is said to have led Inspector Kakade, in the presence of Panchas, to Tulsiram Gupta Mills Estate Compound, wherefrom 35 M.S. Plates were recovered.
The Inspector further discovered that the M.S. Plates were shifted from Devi Dayal 's compound to Nittal Estate, Kurla Andheri Road, Marol Naka and they were transported from there for Devi Dayal 's Estates.
He recorded the statement of Tukaram, the owner of one of these motor trucks on February 7, 1971.
Tukaram stated that his lorry was engaged on November 1, 1971, by the appellant.
In the meantime, investigation regarding the offences of forgery and cheating was being done at Akola by the concerned Police Sub Inspector, who was directed to suspend his inquiry till further orders were received by him.
In the complaint, Inspector Kakade stated that accused 2 and 3 are absconding Annexed to the complaint was a list of prosecution witnesses numbering, in all, 40 and a list of documents numbering 62.
The appellant (accused 1) appeared before the Presidency Magistrate.
He was then supplied the list of prosecution witnesses and the list of documents to be relied upon by the prosecution.
The list of documents included the list of statements of various persons recorded by the Inspector of the Railway Protection Force.
The Presidency Magistrate commenced an inquiry and recorded the 181 statements of four witnesses, of one on March 2, 1973 and of the other three on June 12, 1973.
On June 11, 1973, an application was filed by the appellant to the Magistrate, making a grievance that although three witnesses had been examined, no copies of the documents were furnished to him by the prosecution.
On June 25, 1973, the appellant made a further application to the Magistrate, requesting for supply of true copies of all the documents in the case to enable him to prepare his defence.
He further prayed that he should be allowed to take photostats of all the documents in the presence of the court officer.
The Magistrate on August 3, 1973, passed an order rejecting the accused 's application, dated June 11, 1973, on the ground that the offence complained of against him was non cognizable and the provisions of Section 251A of the Code of Criminal Procedure were not applicable, and consequently.
he (accused 1) had no right to obtain copies of the documents concerned.
The Magistrate further passed an order on August 3, 1973.
declining to allow the accused to take photostats of all the documents, on the ground that the documents could not be allowed to be taken outside the court.
He, however, added that "if any request to secure the photostat copies in the Court comes, it will be considered".
On August 24, 1973, the Magistrate framed a charge under Section 3(a) of the Act to the effect? that on or after November 14, 1970 the accused was found in possession of M.S. Plates numbering about 110, which were the Railway property unlawfully possessed by him.
The accused pleaded 'not guilty ' and again made an application repeating his request for copies of the statements of witnesses recorded by Inspector Kakade.
He also prayed that he be allowed to inspect all the statements recorded by the prosecution and take copies thereof.
The Magistrate rejected this application, also, by an order on September 7, 1973.
Feeling aggrieved by the orders passed by the Magistrate on August 9. 1973 and September 7, 1973, and the framing of the charge against him, the appellant invoked the inherent jurisdiction of the High Court by a petition under Section 561A of the Code of Criminal Procedure, 1898, and prayed that the said orders be quashed.
In this petition, he challenged the constitutional validity of Section 9 of the Act.
The petition was heard by a Bench consisting of Vaidya and Gandhi, JJ.
The learned Judges answered all the questions, posed above, in the negative.
But, on the other aspects of the case, the Assistant Government Pleader, appearing on behalf of the State, stated before the High Court that the prosecution did not desire to keep back 182 any material from the accused and that they would produce copies of statements of all the witnesses and the documents on which the prosecution intends to rely or which the accused wanted to examine.
In view of this statement of the Government Pleader, the High Court set aside the orders of the Magistrate and directed the complainant under Section 165 of the Evidence Act to produce in the trial court the true copies of the statement of the witnesses already examined and to be examined hereafter By the complainant and of the documents on which the complainant desired to depend.
The High Court further declared that the accused and his counsel shall be entitled to inspect those documents and take copies thereof, if necessary, in the court.
If further declared that Section 9 of the Act, is not ultra vires the Constitution.
Hence, these appeals by the accused persons.
Question No. 1 The first question for consideration is.
whether an Inspector of the Railway Protection Force, (for short, RPF) is a "police officer", and therefore any confessional statement made to him comes within the prohibition of Section 25.
Evidence Act.
Section 25 reads thus: "No confession made to a police officer shall be proved as against a person accused of any offence.
" As explained by this Court in Ariel vs State the policy behind Sections 25 and 26.
Evidence Act is to make a substantive rule of law that confessions whenever and wherever made to the police shall be presumed to have been obtained under the circumstances mentioned in p Section 24 and, therefore, inadmissible except so far as is provided in Section 27, of that Act.
The term "Police officer" has not been defined in the Evidence Act.
Shri R. K. Garg, appearing for the appellant, submits that the expression "police officer" in Section 25, Evidence Act must be construed in a wide popular sense, so as to include within its ambit all officers of Government who are, in substance, invested with the power to investigate certain offences in accordance with the provisions of the Code of Criminal Procedure 1898 (for short, called the Code).
irrespective of the fact that they are differently labelled such as, Excise officers or Customs officers or members of the RPF, otherwise, the very object of Section 25 will be defeated.
In support of this contention, the learned counsel has referred to the decision of this Court 183 in Raja Ram Jaiswal vs State of Bihar.
The point pressed into argument is that an Inspector of the RPF making an inquiry under the Railway Property (Unlawful Possession) Act.
1966 into an offence under Section 3 of that Act, in substance.
acts and exercises almost all the powers of a 'Police officer ' making an investigation under the Code of Criminal Procedure.
If that be the correct position proceeds the argument any confessional statement recorded by such Inspector will be hit by section 25, Evidence Act, and if that statement falls short of a 'confession ', then also, it will not be admissible in evidence against its maker, at his trial because of the bar in section 162.
Criminal Procedure Code.
As against the above, Shri Nain submits that an officer of the RPF while making an inquiry under the 1966 Act cannot be equated with a Police officer in charge of a Police Station making an investigation under the Code.
One important difference in their powers is, that the RPF Inspector has no power to submit a report or chargesheet under section 173 of the Code.
Shri Nain has further pointed out that Raja Ram Jaiswal 's case stands on its own peculiar facts, and was distinguished in a later decision by a Constitution Bench of this Court in Badku Joti Savant vs State of Mysore.
According to Shri Nain, the correct test for determining whether or not a RPF officer is a 'Police officer ' for the purpose of section 25.
Evidence Act, is the one which was consistently applied in State of Punjab vs Barkat Ram; Badku Joti Savant (ibid); Romesh Chandra Mehta vs West Bengal.
To top it all, it is maintained, the question is now no longer res integra and has been concluded by the recent judgment of this Court in State of U.P. vs Durga Prasad.
In reply, Shri R.K. Garg has tried to distinguish Durga Prasad 's case, ibid, on the ground, that therein the question whether or not an officer of the RPF is a Police officer within the contemplation of section 25 of the Evidence Act, was not directly in issue.
It is maintained that the only question for decision in that case was.
Whether an enquiry conducted under section 8(1) of the 1966 Act can be deemed to be an investigation for the purpose of section 162 of the Code of Criminal Procedure.
and this question was answered in the negative.
In the alternative, it is urged that Durga Prasad 's case was not correctly decided and its ratio needs reconsideration by a larger Bench because it has overlooked the test laid down by the 3 Judge Bench in Raja Ram laiswal 's case.
184 Although Durga Prasad 's case very largely appears to conclude this question, yet, in deference to the last argument of Shri Garg, we propose to deal with the other decisions of this Court.
which have been referred to by counsel on both sides.
At the outset, for the sake of perspective, we may notice the relevant provisions of the 1966 Act and the Railway Protection Force Act ]957 (for short called the 1957 Act).
First we will notice the relevant features of the 1957 Act whereunder the RPF was constituted.
The preamble of the 1957 Act states that its object is to provide for the constitution and regulation of a Force called the Railway Protection Force for the better protection and security of railway property.
The various clauses in Section 2 contains definitions.
The definition of "railway property" in clause (e) "includes any goods, money or valuable security, or animal, belonging to, or in the charge or possession of.
a railway administration." "Member of The Force" means "a person appointed to the Force under this Act other than a superior officer".
Clause (c) "superior officer" means any of the officers appointed under section 4.
Clause (g) says that the words and expressions used but not defined in this Act and defined in the Indian Railways Act 1890, shall have the meanings respectively assigned to them under that Act.
Section 3 gives powers to the Central Government to constitute and maintain the Force.
Section 5 enumerates the classes of officers; Inspector/Sub Inspector/Assistant Sub Inspector.
Section 10 says that the officers and members of the Force shall be deemed to be 'railway servants ' within the meaning of the Indian Railways Act.
Section 11 is important.
It enumerates That, the duty of every superior officer and member of the Force shall be (a) promptly to execute all orders lawfully issued to him by his superior authority; (b) to protect and safeguard railway property; (c) to remove any obstruction in the movement of railway property; and (d) to do any other act conducive to the better protection and security of railway property.
Section 12 enables any superior officer or member of the Force to arrest, without an order from a Magistrate and without a warrant "(a) any person who has been concerned in an offence relating to railway property punishable with imprisonment for a term exceeding six months, or against whom a reasonable suspicion exists of his having been so concerned; or 185 (b) any person found taking precautions to conceal his presence within railway limits under circumstances which afford reason to believe that he is taking such precautions with a view to committing theft of, or damage to, railway property.
" Section 13 provides: "Whenever any superior officer, or any member of the Force, not below the rank of a Senior Rakshak, has reason to believe that any such offence as is referred to in section 12 has been nor is being committed and that a search warrant cannot be obtained without affording the offender an opportunity of escaping or of concealing evidence of the offence, he may detain him and search his person and belongings forthwith and, if he thinks proper, arrest any person whom he has reason to believe to have committed the offence.
Under sub section (2), the provisions of the Code, relating to searches under that Code shall, so far as may be, apply to searches under this section.
Section 14 indicates the procedure to be followed after arrest.
According to it, any superior officer or member of the Force making an arrest under this Act, shall without unnecessary delay.
make over the person arrested to a police officer, or, in the absence of a Police officer, take such person or cause him to be taken to the nearest police station.
Section 17 provides penalties for neglect of duty, etc.
Section 20 gives protection to a member of the Force for any act done by him in the discharge of his duties.
Section 21 gives powers to the Central Government to make rules for carrying out the purposes of this Act.
Clause (b) of sub section (2) of this section says that such rules may provide, inter alia, for regulating the powers and duties of superior officers and members of the Force authorised to exercise any functions by or under this Act.
From the above survey, it will be seen that the primary object of constituting the Railway Protection Force is to secure better "protection and security of the railway property." The restricted power of arrest and search given to the officers or members of the Force is incidental to the efficient discharge of their basic duty to protect and safeguard Railway Property.
No general power to investigate all cognizable offences relating to Railway Property, under the Criminal Procedure Code has been conferred on any superior officer or member of the Force by the 1957 Act.
Section 14 itself makes it clear that even with regard to an offence relating to 'railway property ', the superior officer or member of the Force making an arrest under section 13 shall forthwith make over the person arrested to a police officer, or cause his production in the nearest police station.
Now, we will take up the 1966 Act, which came into force on September 16, 1966.
As is evident from its preamble, it is an Act to consolidate and amend the law relating to unlawful possession of 186 Railway Property.
The material part of the objects and Reasons for moving the Bill which became this Act, is as under: "2.
At present, offences against Railway property are being dealt with under Railway Stores (Unlawful Possession) Act, 1955, but this Act has been found, by experience, to be ineffective in tackling with the enormity of the problems of theft and pilferages on Railways.
As it is, this Act makes unlawful possession of Railway Stores an Defence, but it is only applicable to unlawful possession of Railway property owned by the Railways, and does not cover the offences relating to goods and parcels entrusted to Railways for transport.
Further, the offences under this Act are investigated and enquired into by local police in accordance with the provisions of the Code of Criminal Procedure, 1898.
It has been observed that the two Agencies, i.e. the Government Railway Police and Railway Protection Force, which are at present provided to deal with crimes on railways find themselves handicapped, for different reasons, in effectively dealing with the problem of theft and pilferage of Railway Property.
The Railways are spread out over a large part of the country and property, etc., entrusted to them is carried from one part to another usually crossing boundaries of different states.
The jurisdiction of State Police being restricted to the State boundary only, it becomes difficult at times for the Police to make thorough and fruitful investigation into offences relating to Railway Property.
Besides, investigation of cases in respect of Railway Property also requires a specialised knowledge of Railway working.
The Railway Protection Force, on the other hand, are not at present equipped with requisite powers of investigation and prosecution, with the result that whatever action they take in respect of prevention etc., is taken just in aid of the State Police who conduct investigation and prosecution etc.
Due to this fact of two agencies being responsible for achieving the same object, the machinery has not proved as effective as it ought to have.
4, It is, therefore, proposed to replace the Railway Stores (Unlawful Possession) Act, 1955, by a more comprehensive Act so as to bring with its ambit the unlawful possession of goods entrusted to the Railways as common carriers and to make the punishment for such offences more deterrent.
It is also proposed to invest powers of investigation and prosecution of offences relating to Railway Property in the Railway Protection Force in the same manner as in the Excise and Customs." (emphasis added) 187 From what has been quoted above, it is clear that the main purpose of passing the 1966 Act was to "invest powers of investigation and prosecution" of offences relating to railway property in the RPF "in the same manner as in the Excise and Customs".
We will advert to this point later.
Suffice it to say here that in view of the aforesaid object of enacting the 1966 Act.
the decisions of this Court on the question as to whether an Excise officer/Customs officer is a "Police officer", within the purview of section 25, Evidence Act, or section 162, Criminal Procedure Code, assume analogical importance for the purpose of deciding the precise question before us.
The various clauses of section 2 of the 1966 Act, contain definitions.
Clause (c) defines "officer of the Force" to mean "an officer of and above the rank of Assistant Sub Inspector appointed to the Force and includes a superior officer.
" The definition of "railway property" in clause (d) has been expanded so as to include goods entrusted to the Railway for carriage or transport, belonging to another person.
Section 3 provides: "Whoever is found.
Or is proved to have been, in possession of any railway property reasonably suspected of having been stolen or unlawfully obtained shall, unless he proves that the railway property came into his possession lawfully be punishable (a) for the first offence with imprisonment for a term which may extend to five years, or with fine, or with both and; in the absence of .
special and adequate reasons to be mentioned in the judgment of the Court, such imprisonment shall not be less than two years and such fine shall not be less than two thousand rupees; and (b) for the second or a subsequent offence, with imprisonment for a term which may extend to five years and also with fine and in the absence of special and adequate reasons to be mentioned in the judgment of the Court such imprisonment shall not be less than two years and such fine shall not be less than two thousand rupees".
It will be seen that if any person is found or proved to be in possession of any 'railway property ', which is reasonably suspected of having been stolen or unlawfully obtained, the burden shall shift on to that person to prove his innocence, that is to say, to establish that he came into possession of the 'railway property ' lawfully.
Section 4 provides punishment for persons wilfully conniving at an offence under the provisions of this Act.
188 Section 5 says: "Notwithstanding anything contained in the Code of Criminal Procedure, 1898, an offence under this Act shall not be cognizable".
It may be noted that in spite of provision in the Code of Criminal Procedure to the contrary, offences under this Act have been made non cognizable and, as such, cannot be investigated by a police officer under the Code.
It follows that the initiation of prosecution for an offence inquired into under this Act can only be on the basis of a complaint by an officer of RPF and not on the report of a police officer under section 173(4) of the Criminal Procedure Code, 1898.
Section 6 gives powers to any superior officer or member of the Force to arrest without an order from a Magistrate and without a warrant, any person who has been concerned in an offence punishable under this Act, or against whom a reasonable suspicion existed of his having been so concerned.
Section 7 of the Act provides that the procedure for investigation of a cognizable offence has to be followed by the officer before whom the accused Person is produced.
Reading section 7 of the 1966 Act with that of section 14 of the 1957 Act, it is clear that while in the case of a person arrested under section 12 of the 1957 Act the only course open to the superior officer or member of the Force was to make over the person arrested to a police officer, in the case of a person arrested for a suspected offence under the 1966 Act, he is required to be produced without delay before the nearest officer of the Force, who shall obviously be bound (in view of Article 22(1) of the Constitution) to produce him further before the Magistrate concerned.
Section 8 of the 1966 Act is new.
It provides for an inquiry to be made against the arrested persons.
According to it, when any person is arrested by an officer of the Force for an offence punishable under this Act or is forwarded to him under section 7, he shall proceed to inquire into the charge against such person.
It is to be noted that such power of inquiry, has been conferred on an officer of the Force, although he is not an officer incharge of a police station as envisaged by section 173 of the Code of Criminal Procedure, Sub section (2) of this section confers on the officer of the Force "the same powers" for the purpose of the inquiry under sub section (1) and subject to the same provisions "as the officer incharge of a police station may exercise and is subject under the Code of.
Criminal Procedure, 1898 when investigating a cognizable case.
" Then there is a proviso which says: 189 "Provided that (a) if the officer of the Force is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused person, he shall either admit him to bail to appear before a Magistrate having jurisdiction in the case, or forward him in custody to such Magistrate; (b) if it appears to the officer of the Force that there is not sufficient evidence or reasonable ground of suspicion against the accused person, he shall release the accused person on his executing a bond, with or without sureties as the officer of the Force may direct, to appear, if and when so required, before the Magistrate having jurisdiction, and shall make a full report of all the particulars of the case to his official superior.
" Section 9 gives powers to an officer of the Force to summon persons to give evidence and produce documents, or any other thing in any inquiry for any of the purposes of this Act.
Sub sections (3) and (4) provide: "(3) All persons, so summoned, shall be bound to attend either in person or by an authorised agent as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and to produce such documents and other things as may be required: Provided that the exemption under section 132 and 133 of the Code of Civil Procedure, 1908, shall be applicable to requisitions for attendance under this section." "(4) Every such inquiry as aforesaid shall be deemed to be a 'judicial proceeding ' within the meaning of section 193 and section 228 of the Indian Penal Code." Section 10 enables an officer of the Force, having reason for the requisite belief to apply for a search warrant to the Magistrate.
Section 11 provides that searches and arrests shall be in accordance with the provisions of the Code.
Section 14 makes it clear that the provisions of the Act shall override all other laws.
This means that if there is anything in the 1966 Act which is inconsistent with the Code, then on that point, the 1966 Act will prevail and the application of the Code pro tanto will be excluded.
The most important example of such exclusion, as already noticed, is to be found in section 5 of the 1966 Act which makes as offence under this Act non cognizable, notwithstanding anything in the Code.
This clearly shows that the provisions of the Code cannot 190 proprio vigore apply to an enquiry conducted under section 8(1) of the 1966 Act by an officer of the Force.
Further, section 6 of the 1966 Act empowers an officer or member of the Force to arrest without a warrant and without an order of the Magistrate any person concerned, or reasonably suspected of being concerned in an offence under the 1966 Act.
This again is contrary to the scheme and content of the Code which must give way to the 1966 Act in this matter.
The third material aspect in which an inquiry under the 1966 Act, differs from investigation under the Code, is to be found in Section 9(3) whereunder persons summoned to, appear in the inquiry are expressly mandated to state the truth.
In contrast with this, Section 160 of the Code does not expressly bind persons examined in Police investigation, to state the truth.
The inquiry under Section 8(1) of the 1966 Act in view of Section 9(4) shall be deemed to be a judicial proceeding for the purpose of Sections 193 and 228 of the Penal Code.
But a police investigation under Section 160 of the Code does not partake of the character of a judicial proceeding for any purpose and a witness examined during such investigation cannot be prosecuted under Section 193, Penal Code.
The fourth important aspect in which the power and duty of an officer of the RPF conducting an inquiry under the 1966 Act, differs from a police investigation under the Code, is this Sub section (3) of Section 161 of the Code says that the police officer may reduce into writing any statement made to him in the course of investigation.
Section 162(1), which is to be read in continuation of Section 161 of the Code, prohibits the obtaining of signature of the person on his statement recorded by the investigating officer.
But no such prohibition attaches to statements recorded in the course of an inquiry under the 1966 Act; rather, from the obligation to state the truth under pain of prosecution enjoined by Section 9(3) and (4), it follows as a corollary, that the officer conducting the inquiry may obtain signature of the person who made the statement.
Fifthly, under the provision to sub section (1) of Section 162 of the Code, oral or recorded statement made to a police officer during investigation may be used by the accused, and with the permission of the Court, by the prosecution to contradict the statement made by the witness in Court in the manner provided in Section 145, Evidence Act, or when the witness ' statement is so used in cross examination, he may be reexamined if any explanation is necessary.
The statement of a witness made to a police officer during investigation cannot be used for any other purpose, whatever, except of course 191 when it falls within Sections 32 or 27 of he Evidence Act.
The prohibition contained in Section 162 extends to all statements, confessional or otherwise during a police investigation made by any person whether accused or not, whether reduced to writing or not, subject to the proviso.
In contrast with the Code, in the 1966 Act, there is no provision analogous to the proviso to Section 162(1) of the Code, which restricts or prohibits the use of a statement recorded by an officer in the course of an inquiry under Sections 8 and 9 of the Act.
Sixthly, the primary duty of a member/officer of RPF is to safeguard and protect railway property.
Only such powers of arrest and inquiry have been conferred by the 1966 Act on members of RPF as are necessary and incidental to the efficient and effective discharge of the basic duty of watch and ward.
Unlike a police officer who has a general power under the Code to investigate all cognizable cases, the power of an officer of the RPF to make an inquiry is restricted to offences under the 1966 Act.
Last but not the least, under Section 190 of the Code, a Magistrate is empowered to take cognizance of an offence only in three ways, namely, (a) "upon receiving a complaint of facts which constitute an offence; (b) upon a report in writing of such facts made by any police officer, and (c) upon information received from any person other than a Police officer, or upon his own knowledge or suspicion, that such offence has been committed".
The 'report ' mentioned in clause (b), includes the report made by a police officer under Section 173 after completing investigation under Chapter XIV of the Code.
Section 173, in terms makes is clear that the duty of making a report thereunder on completion of the investigation to the Magistrate, is that of the officer in charge of the police station.
Such a report shall include the opinion of the police officer as to the result of the investigation.
The formation of such opinion is the final step in the investigation and that final step is to be taken by the police officer in charge of the station and by no other authority (Abhinandan Jha vs Dinesh Mishra).
An officer of the RPF making an inquiry under the 1966 Act, cannot, by any stretch of imagination, be called an "officer in charge of a Police Station" within the meaning of Sections 173 and 190(b) of the Code.
The made of initiating prosecution by submitting a report under Section 173 read with clause (b) of Section 190 of the Code is, therefore, not available to an officer of the RPF who has completed an inquiry into an offence under the 1966 Act.
The only mode of initiating prosecution of the 192 person against whom he has successfully completed the inquiry, available to an officer of the RPF, is by making a complaint under Section 190(1)(a) of the Code to the Magistrate empowered to try the offence.
That an officer of the Force conducting an inquiry under Section 8(1) cannot initiate proceedings in court by a report under Sections 173/190(1)(b) of the Code, is also evident from the provisos to sub section (2) of Section 8 of the 1966 Act.
Under proviso (a), if such officer is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused, he shall either direct him (after admitting him to bail) to appear before the Magistrate having jurisdiction or forward him in custody to such Magistrate.
Under proviso (b), if it appears to he officer that there is no sufficient evidence or reasonable ground of suspicion against the accused, he shall release him on bond to appear before the Magistrate concerned "and shall make a full report of all the particulars of the case to his superior officer".
Provisos (a) and (b) put it beyond doubt that where after completing an inquiry, the officer of the Force is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused, he must initiate prosecution of the accused by making a complaint under Section 190(1) (a) of the Code to the Magistrate competent to try the case.
From the comparative study of the relevant provisions of the 1966 Act and the Code, it is abundantly clear that an officer of the RPF making an inquiry under Section 8(1) of the 1966 Act does not possess several important attributes of an officer in charge of a police station conducting an investigation under Chapter XIV of the Code.
The character of the 'inquiry ' is different from that of an 'investigation ' under the Code.
The official status and powers of an officer of the Force in the matter of inquiry under the 1966 Act differ in material aspects from those of a police officer conducting an investigation under the Code.
The ground is now clear for noticing the rulings cited at the Bar.
In State of Punjab vs Barkat Ram (ibid), the question was whether a Customs officer can be regarded as a 'police officer ' within the purview of Section Evidence Act.
This decision was rendered by a Bench of three learned Judges.
The judgment of the Court was delivered by majority (consisting of Raghubar Dayal and J.L. Kapur JJ.).
Subba Rao J. (as he then was wrote a dissenting opinion.
The view taken by the Court Majority was to the effect: "that the powers which the police officers enjoy are powers for the effective prevention and detection of crime in order to maintain law and order.
Although the expression 'police officer" has to be construed in a wide and popular sense, yet it has not 193 so wide a meaning as to include officers interested in the duty of detecting and preventing smuggling and similar offences with the object of safeguarding the levying and recovery of Customs duties.
He is more concerned with the goods and customs duty than with the offender.
The duties of customs officers are very much different from those of police officers and their possessing certain powers, which may have similarity with those of police officers, for the purpose of detecting the smuggling of goods and the persons responsible for it, would not make them police officers.
Merely because similar powers in regard to the detection of infraction of Customs laws have been conferred on officers of the Police is not a sufficient ground for holding them to be police officers within the purview of Section 25 of the Evidence Act.
The Customs officers, when they act under the Sea Customs Act to prevent the smuggling of goods by imposing confiscation and penalties, act judicially.
The Police officers never act judicially.
Hence, a Customs officer either under the , or under the , is not a police officer for the purpose of Section 25, Evidence Act.
" In his dissenting opinion, Subba Rao J., held that Section 25, Evidence Act was enacted to subserve a high purpose and that is to prevent the police from obtaining confession by force, torture or inducement.
The salutary principle underlying the Section would apply equally to other officers, by whatever designation they may be known, who have the power and duty to detect and investigate into crimes and is for that purpose in a position to extract confessions from the accused It is not the garb or the designation under which the officer functions that matters, but the nature of the power he exercises or the character of the function he performs, is decisive.
The question therefore, in each case is, does the officer under a particular Act substantially exercise the powers and discharge the duties of prevention and detection of crime? If he does, he will be a police officer.
The learned Judge quoted with approval the view of Balakrishna Ayyar, J. in Paramasivam 's case that if the officer 's powers and duties are substantially those of a police officer, but are confined to a particular extent of territory or to a particular subject matter he will be a police officer only in respect of that territory or that subject matter.
On this reasoning, Subba Rao J. held that a Customs officer is a police officer qua his police functions.
The next case is Raja Ram Jaiswal (ibid) decided by a three Judge Bench.
There, the question was, whether an Excise officer 194 exercising the power of investigation under the Bihar and Orissa Excise Act, 1915, is a 'police officer ' within the meaning of Section 25, Evidence Act, Mudholkar, J. speaking for himself and Subba Rao, J., answered this question in the affirmative.
What the majority held in that case may be summed up as under: The test for determining whether a person is a "police officer" for the purpose of Section 25, Evidence Act would be whether the powers of a police officer which are conferred on him or which are exercisable by him because he is deemed to be an officer in charge of a police station establish a direct or substantial relationship with the prohibition enacted by Section 25, Evidence Act, that is, the recording of a confession.
In other words, whether the powers conferred on the Excise officer under the Act are such as would tend to facilitate the obtaining by him of a confession from a suspect delinquent.
If they do, then it is unnecessary to consider the dominant purpose for which he is appointed or the question as to what other powers he enjoys.
It was further held that unlike the Customs officer on whom are conferred by the , powers of a limited character, which are analogous to those conferred on police officers, are not by themselves sufficient to facilitate the obtaining by him of a confession.
It is the possession of these powers which enables police officers and those who are deemed to be police officers to exercise a kind of authority over the persons arrested which facilitate the obtaining from them statements which may be incriminating to the persons making them.
The law allows the police officer to obtain such statements with a view to facilitate the investigation of the offences.
But, it renders them inadmissible in evidence for the obvious reason that a suspicion about voluntariness would attach to them.
It is the power of investigation which establishes a direct relationship with the prohibition enacted in Section 25.
Therefore, where such a power is conferred upon an officer, the mere fact that he possesses some other powers under another law would not make him any the less a police officer for the purposes of Section 25.
Hence, a confession made by an accused under the Bihar and Orissa Act, recorded by an Excise Inspector who is empowered to investigate any offence under the Act, is inadmissible by reasons of the provisions of Section 25 of the Evidence Act.
Raghubar Dayal, J., however, expressed a contrary opinion.
He held that the Excise Inspectors empowered by the State Government under Section 77(2) of the Bihar Act, are not 'police officers ' within the meaning of Section 25 of the Evidence Act and that the aforesaid officers cannot be treated to he police officers for the purposes of Section 162 of the Code of Criminal Procedure, Section 162 does not 195 confer any power on a police officer.
It deals with the use which can be made of the statements recorded by a police officer carrying out investigation under Chapter XIV of the Code.
The investigation which the aforesaid Excise officer conducts is not under Chapter XIV of the Code, but is under the provisions of the Act and therefore, this is a further reason for non applicability of Section 162 of the Code to any statements made by a person to an Excise officer during the course of his investigating an offence under the Act.
Although in Raja Ram Jaiswal 's case, the majority judgment distinguished the earlier decision in Barkat Ram 's case on the ground that therein, the question whether officers of departments other than the police on whom powers of an officer in charge of a police station under clause 14 of the Code of Criminal Procedure are conferred are police officers or not for the purpose of Section 25, Evidence Act, was left open and undecided, yet the fact remains that some of the criteria adopted by the majority in Barkat Ram 's case in arriving at the decision they did, in a Customs officer 's case was rejected and the test indicated by Subba Rao, J. in his minority judgment was substantially approved.
Be that as it may, on facts, the distinguishing feature of Raja Ram Jaiswal 's case was that under the Bihar Excise Act, the powers of an officer in charge of a Police Station were expressly conferred on the Excise officer concerned in respect of the area to which he was appointed.
The question whether a Deputy Superintendent of Customs and Excise was a 'police officer ' within the meaning of Section 25, Evidence Act, again came up for consideration before a Constitution Bench in Badku Joti Savant 's case, ibid.
, Wanchoo, J. who delivered the unanimous opinion of the Bench, answered this question (at page 701), thus: "There has been difference of opinion among the High Courts in India as to the meaning of the words "police officer" used in Section 25 of the Evidence Act.
One view has been that those words must be construed in a broad way and all officers whether they are police officers properly so called or not would be police officers within the meaning of those words if they have all the powers of a police officer with respect to investigation of offences with which they are concerned.
The leading case i support of this view is Nanoo Sheikh Ahmed vs Emperor.
This view approved by Subba Rao J. in his minority judgment in Barkat Ram 's case).
The other view which may be called the 196 narrow view is that the words "police officer" in Section 25 of the Evidence Act mean a police officer properly so called and do not include officers of other departments of government who may be charged with the duty to investigate under special Acts special crimes thereunder like excise offences or customs offences, and so on.
The leading case in support of this view is Radha Kishun Marwari vs King Emperor.
The other High Courts have followed one view or the other, the majority being in favour of the view taken by the Bombay High Court.
We shall proceed on the assumption that the broad view may be accepted and that requires an examination of the various provisions of the Act to which we turn now. (After examining some provision of the Central Act 1 of 1944, the judgment proceeded)".
"It is urged that under sub section (2) of Section 21 a Central Excise officer under the Act has all the powers of an officer in charge of a police station under Chapter XIV of the Code of Criminal Procedure and therefore he must be deemed to be a police officer within the meaning of those words in Section 25 of the Evidence Act.
It is true that sub section (2) confers on the Central Excise officer under the Act the same powers as an officer in charge of a police station has when investigating a cognizable case; but this power is conferred for the purpose of sub section (1) which gives power to a Central Excise officer to whom any arrested person is forwarded to inquire into the charge against him.
Thus under section 21 it is the duty of the Central Excise officer to whom an arrested person is forwarded to inquire into the charge made against such person.
Further under proviso (a) to sub section {2) of section 21 if the Central Excise officer is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused person, he shall either admit him to bail to appear before a Magistrate having jurisdiction in the case, or forward him in custody to such Magistrate.
It does not however appear that a Central Excise officer under the Act has power to submit a charge sheet under Section 173 of the Code of Criminal Procedure.
Under Section 190 of the Code of Criminal Procedure, a Magistrate can take cognizance of any offence either (a) upon receiving a complaint of facts which constitute such offence, of (b) upon a report in writing of such facts made by any police officer, or (c) upon information received from any person other than a police officer or upon his own knowledge or suspicion, that such offence has been committed.
197 police officer for purposes of clause (b) above can in our opinion only be a police officer properly so called as the scheme of the Code of Criminal Procedure shows and it seems therefore that a Central Excise officer will have to make a complaint under clause (a) above if he wants the Magistrate to take cognizance of an offence, for example, under Section 9 of the Act.
Thus though under sub section (2) of Section 21 of the Central Excise officer under the Act has the powers of an officer in charge of a police station when investigating a cognizable case that is for the purpose of his inquiry under sub section (1) of Section 21.
" The Court then distinguished Raja Ram Jaiswal 's case, thus: "Section 21 (of the Central Excises and Salt Act No. 44) is in terms different from Section 78(3) of the Bihar and Orissa Excise Act, 1915, which came to be considered in Raja Ram Jaiswal 's case, and which provided in terms that "for the purposes of Section 156 of the Code of Criminal Procedure, 1898, the area to which an excise officer empowered under Section 77, Sub section (2), is appointed shall be deemed to be a police station, and such officer shall be deemed to be the officer in charge of such station".
It, therefore, cannot be said that the provision in Section 21 is on par with the provision in Section 78(3) of the Bihar and Orissa Excise Act.
All that Section 21 provides is that for the purpose his inquiry, a Central Excise officer shall have the powers of an officer in charge of a police station when investigating a cognizable case.
But even so it appears that these powers do not include the power to submit a charge sheet under Section 173 of the Code of Criminal Procedure, for unlike the Bihar and Orissa Excise Act, the Central Excise officer is not deemed to be an officer in charge of a police station.
" On the above reasoning, the Court concluded that "mere conferment of powers of investigation into criminal offences under Section 9 of the Act does not make the Central Excise officer a police officer even in the broader view mentioned above".
Following the decisions in Punjab State vs Barkat Ram (ibid), and Badku Joti Savant vs Mysore State (ibid), a Constitution Bench of this Court, in Ramesh Chandra vs State of West Bengal (ibid), reiterated that the test for determining whether an officer of customs is to be deemed a police officer is whether he is invested with all the powers of a police officer qua investigation of an offence, including the power to submit a report under Section 173, Code of Criminal Procedure.
Applying this test, the Court held that since a Customs officer exercising power to make an inquiry cannot submit a report under Section 198 173 of the Code, he is not a police officer within the meaning of Section 25 of the Evidence Act.
Again in Illias vs Collector of Customs, this Court held that although a Customs officer under the , has been invested with many of the powers similar to those exercisable by a police officer under Chapter XIV of the Code which he did not have under the old Act yet he is not empowered to file a chargesheet under Section 173 of the Code and therefore, he cannot be regarded as a "police officer" within the meaning of Section 25, Evidence Act.
Shri Garg tried to distinguish these cases on the ground that they relate to Customs officers or Excise officers whose primary duties are to collect and prevent evasion of revenues, and that some of the powers of a police officer are conferred on them merely for the effective discharge of their duties as revenue officers.
It is submitted that the members of the RPF are not revenue officers and their duties are confined to the protection of railway property, and prevention, detection and investigation of crimes relating to 'railway property '.
Relying on the decision in Raja Ram Jaiswal 's case, it is urged that the real test to be applied for determining this question, is, whether the police powers conferred on an officer of the RPF are such as would tend to tempt or facilitate the obtaining by him a confession from a person suspected of the commission of an offence under the 1966 Act.
It is argued that since an officer of the RPF conducting an inquiry has been invested qua 'railway property ' with almost all the powers or an officer in charge of a Police Station making an investigation under Chapter XIV of the Code, this test is amply satisfied to hold that he is a 'police officer ' within the meaning of Section 25 of the Evidence Act.
At one stage, it was contended by Shri Garg that it could be spelled out from Section 8(2) of the 1966 Act that an officer of the Force had the power to present a charge sheet under Section 173 of the Code, also.
In the alternative, it was submitted that the mere fact that an officer of the Force could initiate prosecution only by filing a complaint and not by making a report under Section 173 of the Code, was immaterial in regard to the satisfaction of This test, if, in fact, he had been invested with all other powers of investigation exercisable by a police officer under the Code, qua offences under the 1966 Act.
Prima facie there is much to be said for the reasoning advanced by the learned counsel for the appellant, but as a matter of judicial discipline we cannot deviate from the ratio of Punjab State vs Barkat 199 Ram and Badku Joti Savant 's case, and the primary test enunciated therein for determining this question.
Indeed, we are bound by the decision in State of U.P. vs Durga Prasad (ibid) which, following the ratio of the aforesaid cases, has held that an officer of the RPF conducting an inquiry under Section 8(1) of the 1966 Act, cannot be equated with an officer in charge of a Police Station making an investigation under Chapter XIV of the Code.
It may be recalled that the primary test evolved in Badku Joti Savant 's case by the Constitution Bench, is: Whether the officer concerned under the special Act, has been invested with all the powers exercisable by an officer in charge of a Police Station under Chapter XIV of the Code, qua investigation of offences under that Act, including the power to initiate prosecution by submitting a report (chargesheet) under Section 173 of the Code.
In order to bring him within The purview of a 'police officer ' for the purpose of Section 25.
Evidence Act, it is not enough to show that he exercises some or even many of the powers of a police officer conducting an investigation under the Code.
Nor is the ratio of the aforesaid decisions inapplicable merely because they related to a Customs officer or an Excise officer, and not to an officer of the RPF.
The factual premises on which the ratio of Badku Joti Savant 's rests were substantially analogous to those of the instant case.
That is to say, the powers of arrest, inquiry and investigation conferred on the Central Excise officers under Act 1 of 1944 (which was under consideration in that case) are very similar to those with which an officer of the RPF is invested under the 1966 Act.
Under Section 13 of that Act of 1944, any Central Excise officer duly empowered by the Central Government in this behalf can arrest any person whom he has reason to believe to be liable to punishment. 'Section 18 provides that all searches made under that Act or any rules made thereunder shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898.
Section 19 of that Act lays down that every person arrested under the Act shall be forwarded without delay to the nearest Central Excise officer empowered to send person so arrested to a Magistrate, or, if there is no such Central Excise officer within a reasonable distance, to the officer in charge of the nearest police station.
Section 21 of the Act provides: "(1) When any person is forwarded under Section 19 to a Central Excise officer empowered to send persons so arrested to a Magistrate, the Central Excise officer shall proceed to inquire into the charge against him.
200 (2) For this purpose the Central Excise officer may exercise the same powers and shall be subject to the same provisions as the officer in charge of a police station may exercise and is subject to under the Code of Criminal Procedure, 1898, when investigating a cognizable case.
" It will be seen that these provisions in Sections 13, 18, 19 and 21 of the Central Act I of 1944, substantially correspond to the provisions in Sections 6, 7, 8 etc.
Of the 1966 Act, which we have already noticed It will bear repetition that sub section 12) of section 8, under which an officer of the Force conducting an inquiry may exercise the same powers as an officer in charge of a police station investigating a cognizable case under the Code, is in pari materia with sub section (2) of Section 21 of Act 1 of 1944.
It may be recalled that in the objects and Reasons of the Bill, which was enacted as 1966 Act, it was stated that this measure invests "powers of investigation and prosecution of offences relating to Railway Property in the Railway Protection Force in the same manner as in the Excise and Customs".
The 1966 Act thus brings the status of officers of the RPF in the matter of inquiry, investigation and prosecution of offences under the Act substantially at par with that of an Excise officer under the Central Act 1 of 1944 and that of a Customs Officer under the .
The ratio of all the decisions noticed earlier, therefore, applies in full force to the case of an officer of the RPF making an inquiry into an offence under the 1966 Act.
In State of U.P. vs Durga Prasad (ibid), after carefully examining and comparing the powers of arrest, inquiry and investigation of an officer of the Force under the 1966 Act with those of a police officer under he Code, it was pointed out that such an officer of the RPF does not possess all the attributes of an officer in charge of a police station investigating a case under Chapter XIV of the Code.
He possesses but a part of those attributes limited to the purpose of holding the inquiry under the Act.
On these premises, it was held that an officer of the RPF making an inquiry under the 1966 Act, cannot be equated with an investigating police officer.
In reaching this conclusion, Chandrachud, J. (as he then was), speaking for the Court, appears to have applied the same test which was adopted in Badku Joti Savant 's case, when he observed: "The right and duty of an investigating officer to file a police report or a charge sheet on the conclusion of investigation is the hallmark of an investigation under the Code.
Section 173(1)(a) of 201 the Code provides that as soon as the investigation is completed the officer in charge of the police station shall forward to a Magistrate empowered to take cognizance of the offence on a police report, a report in the form prescribed by the State Government.
The officer conducting an inquiry under Section 8(1) cannot initiate court proceedings by filing a police report.
" The decision in Raja Ram Jaiswal 's case, on which Shri Garg relies, was distinguished, as was done in Badku Joti Savant 's case, on the ground that Jaiswal 's case involved the interpretation of Section 78(3) of the Bihar and Orissa Excise Act, 1915.
In the light of the above discussion, it is clear that an officer of the RPF conducting an enquiry under Section 8(1) of the 1966 Act has not been invested with all the powers of an officer in charge of a police station making an investigation under Chapter XIV of the Code.
Particularly, he has no power to initiate prosecution by filing a charge sheet before the Magistrate concerned under Section 173 of the Code, which has been held to be the clinching attribute of an investigating 'police officer '.
Thus, judged by the test laid down in Badku Jyoti Savant 's, which has been consistently adopted in the subsequent decisions noticed above, Inspector Kakade of the RPF could not be deemed to be a 'police officer ' within the meaning of Section 25 of the Evidence Act, and therefore, any confessional or incriminating statement recorded by him in the course of an inquiry under Section 8(1) of the 1966 Act, cannot be excluded from evidence under the said section.
This takes us to the second question.
Question II The main contention of Shri Garg is that any confessional or incriminating statements recorded by an officer of the Force in the course of an inquiry under section 8(1) of the 1966 Act, cannot be used as evidence against the appellant in view of the constitutional ban against "compelled testimony" imposed by Article 20(3) of the Constitution.
The argument is that as soon as a person is arrested by an officer of the Force on a suspicion or charge of committing an offence punishable under the 1966 Act, he stands in the character of a "person accused of an offence".
That being the case proceeds the argument a statement made by such an accused person to an officer of the RPF making an inquiry against him can never be said to be voluntary, being subject to a legal compulsion under Section 9(3) of the 1966 Act to state the truth 202 upon any subject respecting which he is examined even if such state of might incriminate him.
On these premises it is maintained that both the conditions necessary for attraction of the ban in Article 20(3) of the Constitution exist in the case of such statements.
In this connection, Shri Garg has referred to the dissenting judgment of Subba Rao, J. in Barkat Ram (ibid); Kathi Raning Rawat vs The State of Saurashtra; K. Joseph Augusthi & Ors.
vs M.A. Narayanan; Mohamed Dastagir vs The State of Madras; Bhagwan Das vs Union of India; Ramanlal Bhogilal Shah & Anr.
vs D.K. Guha & Ors.; M.P. Sharma vs Satish Chandra; Smt.
Nandini Satpathy vs P.L. Dani & Anr.
; and In re The Special Courts Bill.
As against this, Mr. Nain, appearing for the respondent State, submits that the conditions necessary for the attraction of the ban in Article 20(3) do not exist in the instant case, because before the filing of the complaint in the Court, the appellant was not a "person accused of an offence".
It is further urged that the compulsion contemplated by Clause (3) of Article 20 means "physical or mental compulsion" and not compulsion of law to state the truth; that freedom to tell lies is not within the protection of this clause.
It was nowhere alleged that the confessional or incriminating statements in question were extorted by the RPF officer under physical duress, threat, inducement or mental torture.
It is added that in any case, it is a question of fact to be established by evidence that any such compulsion was used in obtaining the incriminating statements.
Clause (3) of Article 20 of the Constitution reads, thus: "No person accused of any offence shall be compelled to be a witness against himself.
" An analysis of this clause shows three things: Firstly, its protection is available only to a "person accused of any offence".
Secondly, the protection is against compulsion "to be a witness".
Thirdly, this protection avails "against himself".
It follows that if any of these ingredients does not exist, this clause (3), will not be attracted.
Keeping this in mind, it will be appropriate to concentrate on the first point, as to whether during the inquiry 203 under Section 8 of the 1966 Act when the appellant made the incriminating statement in question, he was a "person accused of any offence" within the contemplation of Article 20(3).
In M. P. Sharma vs Satish Chandra (ibid) which is a decision by a seven Judge Bench of this Court, it was held that determination of this issue will depend on whether at the time when the person made the self incriminatory statement, a formal accusation of the commission of an offence had been made against him.
"Formal accusation" is ordinarily brought into existence by lodging of an F.I.R. Or a formal complaint to the appropriate authority or court against the specific individual, accusing him of the commission of a crime which, in the normal course, would result in his prosecution.
It is only on the making of such formal accusation that clause (3) of Article 20 becomes operative covering that individual with its protective umbrella against testimonial compulsion.
The interpretation placed by the Court in M. P. Sharma 's case.
On the phrase "person accused of any offence" used in Article 20(3) was reiterated in Bhagwan Das vs Union of India (ibid) was reaffirmed in Raja Narayanlal Bansilal vs Maneck Phiroz Mistry & Anr.
Again, in the State of Bombay vs Kathi Kalu Oghad & Ors; one of the propositions enunciated by the Court was, that to bring a statement within the prohibition of Article 20(3), the person accused must have stood in the character of an accused person at the time he made the statement.
It is not enough, that he should become an accused, any time after the statement has been made.
The same proposition was reiterated by Gajendragadkar C.J. in Joseph Augusthi (ibid), and again by the Constitution Bench in Ramesh Chand Mehta 's (ibid).
In the instant case, at the time when the alleged incriminating statement was made before the officer of the RPF, no formal complaint in regard to the commission of an offence had been filed against him in Court, nor had any F.I.R. been lodged with the Police, specifically accusing the appellant or the author of that statement of the commission of an offence.
It is, therefore, manifest that at the material time the author of the self incriminatory statements in question, did not fulfil the character of a "person accused of an offence" within the meaning of Article 20(3).
The last authority to be noticed in regard to the interpretation of the phrase "person accused of any offence", is Ramanlal Bhogilal Shah 's case (ibid).
The petitioner Ramanlal Bhogilal Shah was arrested under Section 19B of the Foreign Exchange Act.
The grounds 204 purportedly served on him under sub section (1) of Section 19B for the offence under Section 4(2) and Section 22 of the Act, punishable under Section 23, were elaborate.
The question arose whether after these grounds had been served on the petitioner, it could be said that he was 'a person accused of an offence ' within Article 20(3) of the Constitution.
The petitioner was produced before the Magistrate, who released him on bail.
Thereafter, First Information Report was recorded under Section 154, Criminal Procedure Code, and an order was obtained from the Magistrate, permitting the investigation to be made under Section 155(2), Criminal Procedure Code.
The Enforcement Officer had examined the petitioner and put his conclusions in the grounds of arrest which were served on the petitioner.
Under these circumstances, the Court held that the petitioner was definitely a "person accused of an offence" within the meaning of Article 20(3) of the Constitution and at any rate, the petitioner was accused of an offence when the F.I.R. was recorded and therefore, the summons issued by the Enforcement Directorate would be illegal.
At the same time, it was held that although the petitioner is a 'person accused of an offence ', the only protection that Article 20(3) gave him is that he could not be compelled to be a witness against himself, but this did not mean that he need not give information regarding matters which do not tend to incriminate him.
Consequently, the Court did not set aside the summons and held that the petitioner was bound to appear before the Enforcement Directorate and answer such questions that did not incriminate him.
To sum up, only a person against whom a formal accusation of the commission of an offence has been made can be a person "accused of an offence" within the meaning of Article 20(3).
Such formal accusation may be specifically made against him in an F.I.R. Or a formal complaint or any other formal document or notice served on that person, which ordinarily results in his prosecution in court.
In the instant case no such formal accusation had been made against the appellant when his statement(s) in question were recorded by the RPF Officer.
At the relevant time of making the self incriminatory statements in question, therefore, the appellant did not stand in the character of a person accused of an offence and, as such, the protection of Article 20(3), will not be available to him.
In view of this finding, we do not think it necessary for the decision of these appeals to go into the question whether legal compulsion to state the truth such as the one contained in Section 9(3) of the 1966 Act is, also, a compulsion interdicted by Article 20(3).
205 In the light of what has been said above, we would answer the legal proposition (formulated as Question No. II) propounded by the learned counsel for the appellant, in the negative.
Question No. 3 was not raised or pressed at the time of arguments in the courts below.
We, therefore, refuse to go into this question and pronounce in regard thereto.
Before we part with this judgment, we may note here that the learned counsel for the respondent State has very fairly stated at the bar, that the State shall have no objection to the supply of copies of all the relevant documents and statements on which the prosecution intends to rely, to the accused appellants in the trial court.
In view of this undertaking we thought it unnecessary to go into the legal aspects of this question.
We will however, add that the prosecution shall also permit the accused appellant to inspect the other material that may have been collected by the inquiry officer, relevant to the charge against the accused appellant.
With this observation, we would dismiss these appeals (Nos. 208 209 of 1974) and send the case back to the trial court for further proceedings in accordance with law.
Since the case is already old, the proceedings shall be conducted as far as possible, from day to day on top priority basis, and disposed of preferably within three months of the date or which the records are received in the trial court.
Since the legal questions raised before us in Special Leave Petition (Crl.) No. 630 of 1977 are the same as in Criminal Appeals Nos. 208 209 of 1974, and the learned counsel for the petitioners therein has adopted the arguments of Shri R.K. Garg, appearing for the appellant in Criminal Appeals Nos. 208 209 of 1974, that Special Leave Petition, after granting special leave to appeal, will also stand disposed of by this judgment.
N.V.K. Appeals dismissed.
| The Punjab Cycle Rickshaws (Regulation of Rickshaws) Act, 1976 (Punjab Act 41 of 1975), was designed to regulate the issue of licenses to actual drivers of cycle rickshaws, plying within the municipal areas of the State.
The petitioners in their Writ Petitions challenged the Act. ^ HELD: (Per Krishna Iyer & Chinnappa Reddy, JJ.
Pathak J. agreeing with the scheme of directions framed).
The Court framed the following scheme: (a) Every rickshaw puller including every petitioner, who has been a licensee within one year of the coming into force of the Act shall be entitled to apply to the Municipal Commissioner for a certificate or other document to the effect that he has been a licensee for rickshaw pulling.
[369 F] (b) The Municipal Commissioner will verify the records and will grant the necessary certificate or other document within one month from the date of the application.
[369 G] (c) on receipt of the municipal certificate the rickshaw puller will apply to the Credit Guarantee Corporation of India (Small Loans) under the Guarantee Scheme of 1971 for advance of a loan upto Rs. 900.
[369 H 370 A] (d) The loan amount shall be repaid by the rickshaw puller in 15 monthly instalments.
If there are delayed payments of instalments of loan, higher rate of interest will be recoverable.
[370 F] (e) When the rickshaw pullers during the agricultural season go to work in their fields, they shall nominate other rickshaw pullers without employment to ply the rickshaws during that season.
The Municipal Commissioner, if satisfied that the nomination made is bona fide will issue licence to such pullers or nominees of the licensed rickshaw pullers, in the agricultural season.
[370 H 371 A] B. (I) Under the Constitutional system courts are havens of refuge for the toiler, not the exploiter, for the weaker claimant of social justice, not the stronger pretender who seeks to sustain the status quo ante by judicial writ in the name of fundamental rights.
[367 E] 367 (2) No higher duty or more solemn responsibility rests upon this Court A than to uphold every State measure that translates into living law the preambular promise of social justice reiterated in Article 38 of the Constitution.
[F] (3) The success of well meant statutory schemes depends on the symbiosis of legislative embargo on exploitative working conditions and viable facilities or acceptable alternatives whereby shackles are shaken off and self ownership substituted.
Judicial engineering to wards this goal is better social justice than dehumanised adjudication on the vires of legislation.
[H 368 A]
|
26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956, 12, 16, 17 and 73 of 1957.
Petition under Article 32 of the Constitution of India for the enforcement of Fundamental Rights.
M.S. K. Sastri, for the petitioners in Petitions Nos. 26 and 27 of 54 and 24 of 1955.
V.N. Swami and M. section K. Sastri, for the petitioners in Petitions Nos.
437 of 55 and 256 of 56.
341 L.K. Jha, J. M. Thakur, section N. Andley and J. B. Dadachanji, for the petitioner in Petition No. 12 of 1957.
N.S. Bindra and Harbans Singh, for the petitioners in Petitions Nos. 16 and 17 of 1957.
N.S. Bindra and Govind Saran Singh, for the petitioner in Petition No. 73 of 1957.
H. N. Sanyal, Additional Solicitor General of India, H.J. Umrigar and R. H. Dhebar, for the respondent in Petitions Nos. 26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956 and 12 of 1957.
M.Adhikary, Advocate General for the State Of Madhya Pradesh and I. N. Shroff, for the respondent in Petitions Nos. 16, 17 and 73 of 1957.
March 9.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The judgment in Petition No. 12 of 1957 shall also dispose of petitions Nos. 26 and 27 of 1954, 24 and 437 of 1955, 256 of 1956 and 16, 17 and 73 of 1957.
These petitions under article 32 arise out of alleged agreements by which some of the proprietors in the former State of Madhya Pradesh granted to one or other of the petitioners the right to take forest produce, mainly tendu leaves, from the forests included in Zamindari and Malguzari villages of the grantors.
Government has disclaimed these agreements and auctioned the rights afresh.
The petitioners state that this is an invasion of their fundamental rights.
The dates on which these alleged agreements were entered into, the terms thereof and the periods during which they were to subsist are different from case to case.
It is not necessary in this judgment to recite the terms of these documents, and it is sufficient to group them for purpose of decision on the bases whether the said agreements still subsist, and whether they are incorporated in a registered instrument or not.
Petitions Nos. 437 of 1955 and 256 of 1956 are founded on unregistered documents.
The answering respondent does not admit these documents, and contends that they cannot be looked into to prove their 342 terms, in view of the decision of this Court in Shri mathi Shantabai vs State of Bombay (1).
Petitions Nos. 16, 17 and 73 of 1957 form another group, inasmuch as the period during which the alleged agreements were to operate expired in 1955.
Additionally, the documents on which the 'claim is founded in those petitions are unregistered.
In the last mentioned case, it is pleaded that the answering State Government had recognised the agreements in favour of the petitioner but resiled from that position subsequently, which allegation has been adequately explained by the State Government in its affidavit.
The recognition was not in favour of the petitioner but in favour of one Thakur Kamta Singh, who claimed under an agreement entered into by one Vishwanath Singh on a date when he had already transferred his interest in the Zamindari to his son Onkar Prasad Singh.
This point was therefore not taken before us at the hearing, and nothing more Deed be said about it.
The main objection against these petitions is that the agreements having expired, there is nothing left to enforce either in favour of the petitioners or against the State Government, and the remedy, if any, of the petitioners is to sue the State and/or the proprietors for the breach.
The last group consists of Petitions Nos. 26 and 27 of 1954, 24 of 1955 and the present petition (No. 12 of 1957).
In these petitions, the agreements with the petitioners are made by registered documents and the terms during which they are to operate have yet to expire.
These cases, it is stated, fall outside the rule in Shantabai 's case (1), to which reference has already been made.
They are stated to fall within the decision of this Court reported in Firm Chhotabhai Jethabai Patel and Co. vs The State of Madhya Pradesh (2).
In all these petitions, counsel argue that the view expressed in the last mentioned case is correct, while the view in Shantabai 's case (1) needs further consider ation.
The argument of the petitioners in these several cases is that Government steps into the shoes of the (1) ; (2) ; 343 quondam proprietors, and is bound by the agreements into which the latter had entered, before their proprietary rights were taken over by Government.
They also raise the contention that the petitioners were not proprietors as defined in the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (hereinafter called the Act), and thus sections 3 and 4 in terms do not apply to them.
These sections, it is contended, do not apply to profit a prendre, which the petitioners enjoy under these agreements.
In support of this contention, reference is made to the decision of this Court in Chhotabhai 's case (1), and to the definition of ' proprietor ' in the Act.
Reference is also made to some provisions of the C. P. Land Revenue Act to be mentioned hereafter, to prove that the persons on whom the right to collect forest produce was conferred by the proprietors can not be regarded as proprietors even under that Act.
This, in main, is the argument in these cases, and even those petitioners whose agreements are incorporated in unregistered documents or whose agreements have since expired, adopted the same line of argument denying the necessity for registration of such agreements.
The matter in so far as it relates to the first two groups is simple.
It has already been ruled in Shantabai 's case (2) that if the right be claimed on foot of an unregistered agreement, it cannot be entertained.
Such documents were examined from five different angles in that case, and it was held that the document if it conferred a part or share in the proprietary right, or even a right to profit a prendre needed registration to convey the right.
If it created a bare licence, the licence came to an end with the interest of the licensors in the forests.
If proprietary right was otherwise acquired, it vested in the State, and lastly, if the agreements created a purely personal right by contract, there was no deprivation of property, because the contract did not run with the land.
Bose, J., who delivered a separate judgment, also held that in the absence of registration no right was created.
(1) ; (2) ; 344 In view of the clear pronouncement of this Court, the first two groups of petitions must fail.
Petitions Nos. 16, 17 and 73 of 1957 also fail for the added reason that the agreements having expired, the only remedy, if any, is to sue for breach of contract and no writ to enforce expired agreements can issue.
This brings us to the arguments advanced in the last four petitions in the third group which were also adopted by the other petitioners, whose petitions we have just considered.
All these petitioners strongly relied upon Chhotabhai 's case (1).
It is therefore necessary to examine attentively what was decided there.
In that case, it was held at p. 483 that: " The contracts and agreements appear to be in essence and effect licenses granted to the transferees to cut, gather, and carry away the produce, in the shape of tendu leaves, or lac, or timber, or wood." Reference in this behalf was made to a decision of the Privy Council in Mohanlal Hargovind of Jubbalpore vs Commissioner of Income tax, Central Provinces and Berar (2), where it was observed: " The contracts grant no interest in land and no interest in the trees or plants themselves.
They are simply and solely contracts giving to the grantees the right to pick and carry away leaves, which, of course, implies the right to appropriate them as their own property.
The small right of cultivation given in the first of the two contracts is merely ancillary and is of Do more significance than would be, e.g., a right to spray a fruit tree given to the person who has bought the crop of apples.
The contracts are short term contracts.
The picking of the leaves under them has to start at once, or practically at once, and to proceed continuously.
" The Bench next observed that there was nothing in the Act to affect the validity of the several contracts and agreements, and that the petitioners were, neither proprietors within the meaning of the Act, nor persons having " any interest in the proprietary right through the proprietors ".
After quoting from Baden Powell 's (1) ; (2) I.L.R. , 898, 345 Land Systems of British India, Vol.
1,p. 217, as to what was meant by ' proprietorship ' in the Land Revenue Systems in India, it was observed that the definition of ' proprietor ' in the Act conveyed the same sense.
Finally, repelling the argument that the agreements concerned " future goods ", it was held on the basis of a passage in Benjamin on Sale, 8th Edition, page 136, that a present sale of the right to goods having a " potential existence " could be made.
Since possession was taken under the agreements and consideration had also passed, there could be " a sale of a present right to the goods as soon as they come into existence.
" Reference was also made (at pp. 480, 481) to section 6 of the Act, which provides: " (1) Except as provided in sub section (2), the transfer of any right in the property which is liable to vest in the State under this Act made by the pro prietor at any time after the 16th March, 1950, shall, as from the date of vesting, be void.
" It was observed in the case as follows: " The date, 16th March, 1950, is probably the date when legislation on these lines was actively thought of, and sub section (1) hits at transfers made after this date.
This means that transfers before that date are not to be regarded as void.
Even in the case of transfers after the said date, sub section (2) provides that the Deputy Commissioner may declare that they are not void after the date of vesting, provided they were made in good faith and in the ordinary course of management.
The scheme of the Act as can be gathered from the provisions referred to above makes it reasonably clear that whatever was done before 16th March, 1950, by the proprietors by way of transfer of rights is not to be disturbed or affected, and that what vests in the State is what the proprietors had on the vesting date.
If the proprietor had any rights after the date of vesting which he could enforce against the transferee such as a lessee or a licensee, those rights would no doubt vest in the State." 44 346 It was accordingly held that the State Government could not interfere with such agreements but had only the right to enforce rights arising therefrom " standing in the shoes of the proprietors.
" It is clear from the foregoing analysis of the decision in Chhotabhai 's case (1) that on a construction of the documents there under consideration and adopting a principle enunciated by the Privy Council in Mohanlal Hargovind of Jubbalpore vs Commissioner of Incometax, Central Provinces and Berar (2) and relying upon a passage each in Benjamin on Sale and the wellknown treatise of Baden Powell, the Bench came to the conclusion that the documents there under consi deration did not create any interest in land and did not constitute any grant of any proprietary interest in the estate but were merely contracts or licenses given to the petitioners " to cut, gather and carry away the produce in the shape of tendu leaves, or lac , or timber or wood ".
But then, it necessarily followed that the Act did not purport to affect the petitioners ' rights under the contracts or licenses.
But what was the nature of those rights of the petitioners ? It is plain, that if they were merely contractual rights, then as pointed out in the two later decisions, in Ananda Behera vs The State of Orissa (3), Shantabai 's case (4), the State has not acquired or taken possession of those rights but has only declined to be bound by the agreements to which they were not a party.
If, on the other hand, the petitioners were mere licensees, then also, as pointed out in the second of the two cases cited, the licenses came to an end on the extinction of the title of the licensors.
In either case there was no question of the breach of any fundamental right of the petitioners which could support the petitions which were presented under article 32 of the Constitution.
It is this aspect of the matter which was not brought to the notice of the Court, and the resulting omission to advert to it has seriously impaired, if not completely nullified, the effect and weight of the decision in Chhotabhai 's case (1) as a precedent.
(1)[1953] S.C.R. 476.
(3)[1955] 2 S.C.R. 265.
(2) I.L.R. , 898.
(4) ; 347 The argument of counsel in these cases followed the broad pattern of the decision in Chhotabhai 's case (1).
and we next proceed to consider it.
It is contended that what vests in the State is the right which the proprietors had on the date of vesting because section 3 of the Act is not retrospective, and that the agreements are " in essence and effect licenses granted to the transferees to out, gather and carry away the produce in the shape of tendu leaves, or lac or timber or wood ".
These agreements, it is submitted, grant no 'interest in land ' or I benefit to arise out of land ', the object of the agreements can only be described as sale of ' goods ' as defined in the Indian Sale of Goods Act, and the grant of such a right is not comprehended in the firstsub section of section 3 where it says : " . . all proprietary rights in an estate, mahal in the area specified in the notification, vesting in a proprietor of such estate, Mahal or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances ".
It is finally contended that the interest of these peti tioners is not I proprietary right ' at all but a right to get I goods in the shape of leaves, lac, etc.
We have to examine these contentions critically.
Before we do so, it is necessary to set out in brief the terms of the agreements which have been produced in these cases.
In Petition No. 12 of 1957 there were two agreements, Annexures A and B. The first was executed in 1944 and granted the right from 1947 to 1956; the second was executed in 1946 and granted the right from 1957 to 1966.
These are long term agreements and they are typical from case to case.
Indeed, the second agreement was made even before the first began, and the total period is 20 years.
In addition to the right to the leaves the documents pro vided for many other matters.
It is convenient to quote only from Annexure 'B ': " Before this I had given you a similar contract selling Tendu leaves produce by contract dated (1)[1953] S C.R. 476.
348 7 7 1944 registered on 12 7 1944.
In pursuance of that registered contract, which is for five years from 1947 to 1951 and another for subsequent five years from 1952 to 1956 in all for ten years, you are to remain in possession and occupation of the areas and the Tendu leaves produce till the termination of the year 1956 for which time you continue your possession and thereafter in pursuance of this contract you continue for further period of ten years your possession and occupation from 1957 to 1966 as is usual and customary pruning and coppicing Tendu leaves plants, burning them, and instal Fadis for collection of Tendu leaves and construct Kothas (godowns) for storage of the leaves at your sweet will and choice on any open plot or land within the estate with my permission and you are allowed to take free of all costs any Adjat timber, bamboos, etc., from my forests for constructing them.
I shall charge you no further consideration.
In the same manner, for the purpose of constructing these godowns and such thing you may according to your convenience (you may) manufacture bricks at any place you like in the vicinity of any rivers, rivulet, Nala or pond at your costs.
I shall not receive from you any extra amount as rent for the use and occupation of land that will be used for construction of Kothas, for manufacturing bricks and for locating Fadis (Bidi leaves collection centres).
All those are included in the consideration fixed for this contract.
All these rights are already conferred on you in the previous contract dated 7 7 1944 and under this contract for the entire contract period.
It is also open to you to collect Tendu leaves not only those growing in the summer season but also those growing in Kartik.
During the term of this contract, if for one reason or another it becomes necessary for you to sell the Tendu leaves produce and assign this contract to any other person you can do so.
But you shall be responsible for me to give my consent after inquiring of the fitness of the intended transferee.
However, you shall continue to be responsible to pay to me the agreed amount of instalments on or before the agreed dates; and if the agreed amount of instalment is not paid to me on or 349 before the agreed date, I shall have full right to start proper proceedings in that connection ".
In Petition No. 26 of 1954, the period of the two agreements was from 1944 to 1963.
There too, the rights were similar to those in Petition No. 12 of 1957, and analogous terms are to be found in Petitions Nos. 27 of 1954 and 24 of 1955.
The question that arises is, what is the nature of this right? In English law, distinction was made between easements and profit a prendre and a right to take the produce of the soil was regarded as a profit a prendre.
While easements were not regarded as an interest in land, a right to take the produce of the soil or a portion of it was an interest in land: Fitzgerald vs Fairbanks (1).
Profit a prendre can be the subject of a grant.
Where they take the form of a grant, they are benefits arising from land.
In all these cases, there is not a naked right to take the leaves of Tendu trees together with a right of ingress and of regress from the land; there are further benefits including the right to occupy the land, to erect buildings and to take other forest produce not necessarily standing timber, growing crop or grass.
The right of ingress and of regress over land vesting in the State can only be exercised if the State as the owner of the land allows it, and even apart from the essential nature of the transaction, the State can prohibit it as the owner of the land.
Whether the right to the leaves can be regarded as a right to a growing crop has, however, to be examined with reference to all the terms of the documents and all the rights conveyed thereunder.
If the right conveyed comprises more than the leaves of the trees, it may not be correct to refer to it as being in respect of growing crop ' simpliciter.
We are not concerned with the subtle distinctions made in English law between emblements, fructus naturals and fructus industriales, but we have to consider whether the transaction concerns " goods " or "moveable property " or " immovable property ".
The law is made difficult by the definitions which exist in the General Clauses Act, the Sale of Goods Act, the (1)[1897] 2 Ch.
350 Transfer of Property Act and the Registration Act.
These definitions must be placed alongside one another to get their ambits.
If the definitions are viewed together, it is plain that they do not tell us what " immovable property " ' is.
They only tell us what is either included or not included therein.
One thing is clear, however, that things rooted in the earth as in the case of trees and shrubs, are immovable property both within the General Clauses Act and the Transfer of Property Act, but in the latter, " standing timber ", " growing crop " and " grass " though rooted in earth are not included.
Of these, " growing crop " and " grass form the subjectmatter of the sale of goods, and standing timber " comes within the last part of the definition of ' goods ' in the Indian Sale of Goods Act, to be subject thereto if the condition about severing mentioned in the definition of ' goods ' exists.
It has already been pointed out that the agreements conveyed more than the tendu leaves to the petitioners.
They conveyed other forest produce like timber, bamboos, etc., the soil for making bricks, the right to prune, coppice and burn tendu trees and the right to build on and occupy land for the purpose of their business.
These rights were spread over many years, and were not so simple as buying leaves, so to speak, in a shop.
The expression " growing crop " might appropriately comprehend tendu leaves, but would not include, Adjat timber ', bamboos, nor even tendu plants.
The petitioners were not to get leaves from the extant trees but also such trees as might grow in the future.
They could even burn the old trees, presumably, so that others might grow in their place.
In these circumstances, the agreements cannot be said to be contracts of sale of 'goods ' simpliciter.
It remains now to consider whether the rights enjoyed by the petitioners can be said to fall within section 3(1) of the Act.
That section divests the proprietors of their proprietary rights, as also any other person having an interest in the proprietary right through the proprietor and vests those rights in the State.
That section has to be read with the section which 351 follows, and which sets out the consequences of vesting of such rights in the State.
The rights which vest can be stated briefly to be (a) all proprietary rights in the proprietor, and (b) all proprietary rights in any person having interest in such proprietary rights through the proprietor.
These rights vest in the State free of all encumbrances.
Section 4 of the Act provides inter alia that after the notification has been issued, then, ' notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force and save as otherwise provided in this Act ' the following consequences (among others) shall ensue: " (a) all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including Land (cultivable or barren), grassland, scrubjungle, forest, trees, fisheries, wells, tanks, ponds, water channels, ferries, pathways, village sites, hats, bazars and melas; and in all subsoil, including rights, if any, in mines and minerals, whether being worked or not, shall cease and be vested in the State for purposes of the State free of all encumbrances; and the mortgage debt or charge on any proprietary right shall be a charge on the amount of compensation payable for such proprietary right to the proprietor under the provisions of this Act; (b)all grants and confirmation of title of or to land in the property so vesting or of or to any right or privilege in respect of such property or land revenue in respect thereof shall, whether liable to resumption or not, determine: ".
If these petitioners can be said to be possessing " an interest in the proprietary right ", then their rights, title and interest in the land determine under the Act, and vest in the State.
The petitioners, therefore, contend that their rights under the agreements cannot be described as 'proprietary right ' or even a share of it.
They rely on the definition of 'proprietor ' in the Act, and refer under the authority of section 2(b) of the Act to the Central Provinces Land Revenue Act, 1917.
The definition in the Act is not exhaustive.
It only 352 tells us who, besides the proprietor, is included in the term 'proprietor '.
Further, the definitions in the Act are subordinate to the requirements of the context and the subject matter of any particular enactment.
From the Act, we know that the proprietor 's interest in forest, trees, shrub, grass and the like passes to the State.
The question thus resolves into two short ones did the former proprietors own proprietary interest in these trees, and did they part with that proprietary interest and convey it to the petitioners ? There is but little doubt that in so far as the Act is concerned, it does contemplate cesser of all proprietary rights in land, grass land, scrub jungle, forest and trees, whether owned by the proprietor or through him by some other person.
The contention of the petitioners is that by the term " proprietor " is meant what that term conveys in the Central Provinces Land Revenue Act, and reference is made for this purpose to various sections therein.
The term " proprietor " is defined in the Central Provinces Land Revenue Act thus: " " Proprietor " except in sections 68, 93 and 94, includes a gaontia of a Government village in Sambalpur Territory.
" This definition does not advance the matter any further.
In several sections, special explanations are added to define " proprietors ".
In all those explanations, the term is not defined, but is said to include 'thekedars or headmen with protected status ', I mortgagee with possession ', I lessees holding under leases from year to year ' and the like.
In addition, there is invariably the inclusion of I a transferee of proprietary, rights in possession ', which again leaves the matter at large.
See sections 2(5), 2(21), 53 and 68.
Counsel faced with this difficulty rely upon the scheme of settlement in Ch.
VI of the Central Provinces Land Revenue Act , and the record of rights which consists of Khewat, a statement of persons possessing proprietary rights in the mahal including inferior proprietors or lessees or mortgagees in possession, specifying the nature and extent of the interest of each; and Khasra or field book and Jamabandi or list of persons 353 cultivating or occupying land in the village.
these documents are prepard separately.
The petitioners contend that by 'proprietary right ' is meant that right which can find, a place or be entered in the Khewat, and the rights enjoyed by the petitioners are not and cannot be entered in the Khewat because thay are not 'proprietary rights '.
They also refer to the schemes of settlement under which proprietors subproprietors etc.
, are determined and offered assessment.
In our opinion, these arguments, though attractive, do not represent the whole of the matter.
What these documents record and what the settlement operations determine are the kinds of ' proprietors ' among whom the entire bundle of rights is shared.
Every proprietor or sub proprietor enjoys proprietary rights over land, forests, etc., falling within his interest.
The right to forest trees, etc., is the consequence of proprietorship, and indeed, under section 47(3) the State Government can declare which rights and interest must be regarded as ' proprietary rights '.
That sub section provides: " The State Government may declare the rights and interests which shall be deemed to be proprietary rights and interests within the meaning of sub section (2).
" The second sub section provides: " The Deputy Commissioner shall cause to be recorded, in accordance with rules made under section 227, all changes that have taken place in respect of, and all transactions that have affected, any of the proprietary rights and interests in any land.
" The matter is made clear if one refers to the provisions of section 202 of the Land Revenue Act.
That section confers on Government the power to regulate the control and management of the forest growth on the lands of any estate or mahal.
A reading of sub sections
(4) to (8) of that section clearly shows that forests belong to the proprietors from whom under those sub sections they can be taken over for management, the profits of the management less expenses being paid to the proprietors or to superior and inferior proprietors as the case may be.
Sub sections (9) and (10) provide 45 354 (9)" No lease, lien, encumbrance or contract with respect to the forest land held under direct manage ment shall be binding upon the Government.
(10)On the expiration of the period fixed for the direct management, the forest land shall be restored to the proprietor thereof" Even here, the term ' proprietor ' is explained by the usual explanation showing the same category of persons as included in the section.
From this, it is quite clear that forests and trees belonged to the proprietors, and they were items of proprietary rights.
The first of the two questions posed by us, therefore, admits of none but an affirmative answer.
If then the forest and the trees belonged to the proprietors as items in their ' proprietary rights ', it is quite clear that these items of proprietary rights have been transferred to the petitioners.
The answer to the second question is also in the affirmative.
Being a 1 proprietary right ', it vests in the State under sections 3 and 4 of the Act.
The decision in Chhotabhai 's case (1) treated these rights as bare licenses, and it was apparently given per incuriam, and cannot therefore befollowed.
Even assuming that the documents in question do not amount to grant of any proprietary right by the proprietors to the petitioners, the latter can have only the benefit of their respective contracts or licenses.
In either case, the State has not, by the Act, acquired or taken possession of such contracts or licenses and consequently, there has been no infringement of the petitioners , fundamental right which alone can support a petition under article 32 of the Constitution.
The result is that these petitions fail, and are dismissed, but in view of the fact that they were filed because of the decision in Chhotabhai 's case (1), there shall be no order about costs.
Petitions dismissed.
| Some of the proprietors of the former State of Madhya Pradesh granted to the several petitioners rights to take forest produce, mainly tendu leaves, from the forests included in the Zamindaris belonging to the proprietors.
The agreements conveyed to the petitioners in addition to the tendu leaves other forest produce like timber, bamboos, etc., the soil for making bricks, and the right to build on and occupy land for the purpose of their business.
These rights were spread over many years, but in the case of a few the period during which the agreements were to operate expired in 1955.
Some of the agreements were registered and the others unregistered.
After the coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, the Government disclaimed the agreements and auctioned the rights afresh, acting under section 3 of the Act under which " all proprietary rights in an estate . . in the area specified in the notification, vesting in a proprietor of such estate. or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances".
The petitioners filed petitions under article 32 of the Constitution of India challenging the legality of the action taken.
by the Government on the ground that it was an invasion of their fundamental rights.
They contended (1) that the Government stepped into the shoes of the quondam proprietors and was bound by the agreements into which the latter had entered, before their proprietary rights were taken over by the Government, (2) that the petitioners were not proprietors as defined in the Act and therefore sections 3 and 4 of the Act did not apply to them, (3) that the agreements were in essence and effect licenses granted to them to cut, gather and carry away the produce in the shape of 340 tendu leaves, or lac, or timber or wood, (4) that the agreements granted no 'interest in land ' or 'benefit to arise out of land ' and that object of the agreements could only be described as sale of goods as defined in the Indian Sale of Goods Act, and (5) that the interest of the petitioners was not proprietary right but only a right to get goods in the shape of leaves, etc The petitioners relied on the decision in Firm Chhotabhai jethabai Patel and Co. vs The State of Madhya Pradesh; , Held : (1) that the agreements required registration and in the absence of it the rights could not be entertained.
Srimathi Shantabai vs State of Bombay, ; , followed.
(2)that in cases where the period stipulated in the agree ment had expired, the only remedy, if any, was to sue for breach of contract and no writ to enforce expired agreements could issue.
, (3) that on their true construction the agreements in question were not contracts of sale of goods.
(4) that both under the Act in question and the Central Provinces Land Revenue Act, 1917, the forests and trees in the Zamindari area belonged to the proprietors and they were items of proprietary rights.
Consequently, the rights conveyed to the petitioners under the agreements were proprietary rights, which under sections 3 and 4 of the Act, became vested in the State.
(5)that assuming that the agreements did not amount to grant of any proprietary right by the proprietors to the petitioners, the latter could have only the benefit of their respective contracts or licenses.
In either case, the State had not, by the Act, acquired or taken possession of such contracts or licenses and, consequently, there had been no infringement of the petitioners ' fundamental rights which alone could support a petition under article 32 of the Constitution.
Chhotabai jethabai Patel and Co. vs The State of Madhya Pradesh, ; , not followed.
Ananda Behera vs The State of Orissa, [1955] 2 S.C.R. gig, followed.
|
Appeal No. 209/58.
Appeal by special leave from the Award dated September 16, 1957 of the Industrial Tribunal No. 11, Ernakulam, in Industrial Dispute No. 34 of 1957.
G. B. Pai and Sardar Bahadur,for the appellants.
A. V. Viswanatha Sastri and M. section K. Sastri, for the respondents.
March 9.
The Judgment of the Court was delivered by DAS GUPTA, J.
The appellant M/s.
Peirce Leslie & Co., Ltd., is a private limited company engaged in various enterprises mainly in South.
India.
It started business in this country over a century ago and though it is registered in England almost all its activities appear to be carried on in this country.
The principal activities that require mention are the business in cashew nuts which the Company sells after roasting raw cashew nuts purchased in this country and in Africa, and business in coir products and several other country produce like ginger, lemon grass oil etc.
A large portion of the products in which it trades is exported to foreign countries.
Apart from these trading activities the company is also engaged in agency business including working as managing agents of many companies.
For many years the company as a whole had made good profits, though in some of its many lines, losses were incurred.
The company has on its pay roll a large number of employees and apart from superior officers in its covenanted and uncovenanted staff both Indian and European it employs in its various lines of business a large number of workmen including clerical staff.
The 196 clerical staff alone consists of 882 monthly paid employees.
For many years the Company has voluntarily paid bonus to all its employees out of the surplus profits.
To the monthly paid employees with whom we are concerned in the present appeal the company paid during the year 1954 55 a sum equivalent to three months ' basic wages as bonus.
Not content with this these employees through their Union put forward a claim for additional bonus.
The industrial dispute thus raised was referred by the Government to the Industrial Tribunal sitting at Coimbatore.
Before the Tribunal the workmen claimed an additional bonus equal to seven months ' basic wages.
The company 's case was that the peculiar nature of its activities specially the fact that in its agency business very little capital was employed and the fact that in the cashew business and other produce business the element of risk was unusually treat justify material alteration in the Full Bench Formula for ascertainment of the available surplus in several respects.
The main alteration asked for before the Tribunal appears to have been that rates higher than 6% of paid up capital and 4% on reserves employed as working capital should be, allowed in working the Full Bench Formula in view of the special risks in its business and the further fact that its agency business requires very little capital.
These claims were rejected by the Tribunal.
The Tribunal also accepted only partially the company 's claims as regards rehabilitation allowances for the year and as regards actual amounts used as working capital.
Having arrived on its calculations at the figure of pound 55,137 as the available surplus after meeting all prior and necessary charges the Tribunal awarded bonus equal to five months ' basic wages in addition to three months ' basic wages already voluntarily paid by the company.
In making this distribution the Tribunal rejected the company 's case that as this claim was raised by only a small percentage of the workmen the entire available surplus should not be treated as available in distributing bonus to these few workmen.
The first contention urged in appeal before us is that the Tribunal was wrong in rejecting the com 197 pany 's claim for higher return than usual on paid up capital and reserves used as working capital.
The appellants ' counsel has taken us through the evidence, oral and documentary, as regards what he ' characterized as the heavy " fluctuations " in the price of raw cashew nuts which the company had to purchase and the price in the foreign market of the finished goods.
That there is some amount of risk is undoubtedly true.
We are not convinced however that the company 's business whether in cashew nuts or in any other line is attended with such unusual risk as would justify the provision of more than the usual rate of return.
Return on invested capital has always to provide for pure interest plus compensation for the risks of the business.
Prevailing interest in the money market yielded by giltedged security is ordinarily taken to be a fair index of what should be considered reasonable as pure interest.
For many years now this figure has varied from 3 to 4 per cent.
If no risks were involved, this percentage should have been considered a fair return on invested capital.
It is because most businesses contain an element of risksome more some less because of fluctuations, on the one hand in the prices of raw material and on the other hand in the effective demand for the finished goods apart from cyclical booms and depressions that an additional return of 2 to 3% is generally considered necessary to compensate for the risks.
It is in view of this that a return of 6% is ordinarily considered to be a fair return on the capital invested in the shape of paid up capital.
In a particular industry where the risk is appreciably less than usual there will be good cause for providing less than 6%.
And similarly, in an industry where extraordinary risks are run more than 6% should reasonably be provided for.
If therefore there was reason to think that the appellant company 's contention that its business was attended with unusual risks was correct there would have been good reason to allow a higher rate than 6% on the paid up capital and also a higher rate than 4% on the reserves used as working capital.
We are not however satisfied that any such unusual risk is 198 run.
There is no more speculation in buying raw nuts and roasting the same and selling them than there is, say, in buying raw cotton in the market, spinning yarn therefrom, making it into cloth and selling such cloth, or in buying.
raw jute, spinning yarn therefrom weaving it into gunny cloth and selling the same.
No case for any higher return on the paid up capital or working capital has been made out by the evidence.
Nor can the fact that the agency business of the company does not require much in the way of capital be considered to be a reason for allowing a higher rate of return in those lines.
If in the agency businesses considerable profits are earned with a small amount of capital the contribution to such earning by labour including both those at the top and those at the bottom is necessarily considerable.
There is no justification for compensating the entrepreneur for the fact that with a small amount of capital considerable profits are earned.
This brings us to the appellant 's case about higher rehabilitation allowance than what has been allowed by the Tribunal.
The company put its claim for rehabilitation allowance at the figure of pound, 31,780 but the Tribunal accepted only a sum of pound 9 11,250 as the reasonable figure towards statutory depreciation and rehabilitation together.
In support of its claim, the Company produced a number of statements prepared by witnesses claimed to be experts showing the replacement value of buildings, machinery, furniture and sundry plants which constituted the fixed capital of the company.
Statements are also produced showing the further expectation of life of each of these items.
The services of a chartered accountant firm were also requisitioned and we have on the record a statement showing how the figures required for replacement have been worked out for the various items of buildings, machinery and furniture and sundry plants.
According to Exhibit E 50, the statement on which great reliance was place by the company, the total replacement value of its assets was RS.
1,08,02,330 made up of Rs. 77,86,350 for buildings, Rs. 18,52,320 for plants ' and machinery, ' 199 Rs. 3,63,550 for furniture and Rs. 8,00,110 for sundry plants.
Different items of buildings and machinery are put in separate groups according as the replacement is necessary in view of the residual age, during 1955 60, 1960 65, 1965 70, 1970 75, 1975 80, 1980 85, 1985 90, 1990 95, 1995 2000, 2000 2005.
2005 is taken as.
the last year, as the residual age is calculated from 1955 and the maximum residual age is taken to be 50 years.
Exhibit E 43 shows the detailed calculations on this basis how the sum of Rs. 77,86,335 was arrived at as the replacement cost of buildings.
Exhibit E 46 is a similar statement in respect of replacement costs of plant and machinery.
exhibit E 29A shows how after taking reserves for rehabilitation for the different groups of buildings into consideration, the rehabilitation charge for the season 1952 53 is worked out at Rs. 19,878 for buildings and the rehabilitation for plant and machinery is worked out as pound, 5,435.
Details are also given as regards the calculation of pound, 4,744 as the rehabilitation costs to be provided for sundry plants and pound, 1,723 as the rehabilitation costs for furniture in the year 1954 55.
The very fact that such care has been taken in furnishing details to the Court inclines one prima, facie to accept the correctness of these figures without much scrutiny.
Scrutiny is however very much needed before the figures and the calculations are ,accepted.
Mention may first be made of the fact that though it was stated by the witness who is responsible for the preparation of the replacement costs of the machinery that he obtained quotations from different firms, no such quotation has been placed on record.
That, as the Tribunal itself recognized, affected very much the value of these figures.
As however after mentioning the infirmities of the evidence the Tribunal decided to accept as_a reasonably accurate statement this figure of Rs. 1,08,02,330 as the total replacement value we need not consider whether we ourselves would have been prepared to accept the evidence if the matter was being considered by us in the first instance.
200 A more serious question however is whether the basis adopted by the appellant 's expert for the calculation of this sum as the replacement costs to be provided over the years in the application of the Full Bench Formula can be accepted.
As the appellant 's expert himself has stated the value he has given as the rehabilitation cost for any particular building is on the basis of what would be required to construct a, similar building if the existing building was pulled down in 1955.
He has proceeded on the same way as regards the machinery and other assets.
The Tribunal after accepting the figure of Rs. 1,08,02,330 as the correct figure for replacement deducted the sum which in its opinion was available in the reserves towards such rehabilitation and then divided the remainder by 50 as 50 years would be the period that these buildings and machinery would last if replaced in 1955 by new buildings and new machinery.
It has been urged before us that the Tribunal was wrong in dividing the sum obtained after the total amount to be provided was ascertained by 50 inasmuch as the figure of Rs. 1,08,02,330 was itself arrived at on the basis of the sum that would have to be provided for the different groups of buildings and the sum to be provided in 1954 55 for all these different groups should have been accepted at these figures worked out in Exhibit E 29A.
It appears to us that this method of arriving at the rehabilitation costs to be provided in a particular year is not useful and cannot be safely relied upon.
To understand the fallacy of the method applied we may briefly state the logic behind the provisions for rehabilitation.
Because the fixed capital of any industry is the victim of gradual deterioration the prudent businessman creates reserves out of his profits so that as soon as any portion of the fixed capital has become too deteriorated for efficient working it may be replaced.
The economic welfare of the country as a whole no less than the interests of the businessman requires that the company 's capital fund should remain :Intact.
It is for this reason that an amount reasonably sufficient for the notional requirement of rehabilitation during the relevant 201 year is deducted as a prior charge in ascertaining suprlus profits from which bonus can be paid.
The basis of the prior charge is the assumption that rehabilitation is a continuing process and so needs allotment from year to year.
That is why it has now been held that if the amount allotted for a specific year is not used, it should be taken into account in the later year.
This has been recognized in the Full Bench Formula and has received the authoritative recognition from this Court in numerous cases.
A full discussion of the principle involved can be found in Associated Cement Company 's Case (1).
It is important to note what was pointed out there as regards the replacement value being calculated on the basis of what would be required to replace the fixed assets in question at the date when replacement is due.
One way of ascertaining that was to multiply the original cost, by the figure which would reflect the expected rise or fall in prices at the date for replacement.
After the replacement cost is ascertained it is necessary to deduct therefrom the amount already lying in reserves for this purpose and then to see over what period the balance will have to be found.
There will no doubt be difficulties in the way of estimating the replacement costs in this manner, but that cannot justify the attempt at over simplification by working out the replacement cost on the hypothesis that replacement cost at the date of replacement will be the same as on the present date.
If the prices fall in the meantime too much will have been set apart for rehabilitation, if prices rise too little.
To take the instance of buildings which form the greater portion of the assets of the appellant company, it may well be that by the time some of these buildings require replacement, the cost of construction will have become less than at the present time by reason of more efficient production of cement and steel in the country.
So, also the price of machinery some years later, may well be less than the price now, by reason of such machinery being produced in our own country.
The layman 's apprehension that prices rise (1) 26 202 never to fall again cannot be accepted as a correct basis for calculation of the replacement cost on a future date.
The entire basis of the calculation of the replacement cost by the appellant 's experts is what such costs will be if the building was pulled down or the machinery scrapped in 1955 and had to be replaced by a new machinery on that date.
His estimate of the replacement cost cannot therefore be accepted as a sure basis for any calculation of the rehabilitation costs to be provided.
It is unnecessary therefore to go into the further question as to whether the Tribunal was justified in treating the sum of pound 20,000/ and also another sum of pound 44,760 as available towards rehabilitation.
We may however indicate that if it were necessary to go into the question we would have probably hesitated to hold that these sums were not in fact available for rehabilitation.
A strict view of the evidence thus justifies a. conclusion that the appellant company has failed to make out any case for rehabilitation allowance in addition to the ordinary depreciation.
As however the learned counsel for the respondent did not challenge the correctness of the allowance of pound,11,250 assessed by the Tribunal as the total allowances towards statutory depreciation and rehabilitation together it would be proper to apply the formula on that basis.
The other question in dispute was as regards the amount of reserves actually used as working capital.
Out of what was claimed by the company as reserves employed as working capital the Tribunal disallowed two items.
One was in respect of a sum of pound 2,09,339 which appeared in the balance sheet as provision for taxation liability; another was an item of pound 8,250 as provision for proposed dividend on deferred ordinary shares.
The Tribunal was of opinion that the company had not made any attempt to prove that these amounts had actually been used in the business.
The appellant contends before us that a scrutiny of the balance sheet is sufficient to satisfy any one that these amounts had actually been employed as working 203 capital.
It is stressed in this connection that when the balance sheets were put in evidence through the company 's officer no challenge as to the correctness of the statement made therein Was made in cross examination.
Though no direct challenge to the correctness of the statements appearing in the balancesheets about the value of the different assets appears to have been made it is important to notice that the employer 's witness No. 2 through whom the balancesheets and the profit and loss accounts of the company were put in evidence was asked in cross examination as regards the discrepancy between the statements in the balance sheet E 8 where the bank overdraft was shown as pound1,95,990 and the statement Exhibit E 12 which showed the bank overdraft in June 1955 as 37 5 lakhs which is equivalent to pound 2,75,000.
The difference being of about pound80,000, the witness was asked which is correct, whether E 8 or E 127 and when the witness answered that both were correct, he was asked "how".
His answer was "I do not know".
It may be that there is a satisfactory explanation of this difference but the evidence on record does not disclose this.
When there remains prima facie such discrepancy as regards the very important figure as regards bank overdraft the Tribunal would well be justified in refusing to base any conclusion on the valuation of different assets as stated therein.
There is apart from this the important fact that the company itself does not claim that whatever appears to be on the asset side over and above the paid up capital has come from the reserves.
Exhibit E 30 is the statement prepared by the company 's Chartered Accountant to show "Reconciliation of working capital as on 30th June, 1958.
" It arrives at the figure of pound6,05,564 as the working capital by deducting from the current assets as per balance sheet as on June 30, 1955, six out of nine items under "Current liabilities & provisions", 3 items not deducted are those under (1) liability for taxation other than U.K. Income tax,(2) proposed dividend on deferred ordinary shares and (3) capital profits on proposed distribution.
The obvious reason for deducting the six items from the current assets to arrive at the working capital is that 204 these items in the balance sheets under current liabilities and provision would have to be met during the year out of a portion of the current assets, which portion would accordingly not be available for use as working capital.
If that is the case as regards the other items under current liabilities and provisions it is not clear why that should not also be the case as regards the current liabilities under "liabilities for taxation other than U.K. Income tax" and under "proposed dividend on deferred ordinary shares".
In the absence of evidence to the contrary there is no ground for thinking that these current liabilities had not also to be met out of the current assets during the year.
No such evidence has been produced.
The Tribunal is therefore right in our opinion in rejecting the company 's claim that these amounts were also employed as working capital.
As regards the other prior charges there is no dispute.
The Tribunal applying the Full Bench Formula on the basis of the different findings hold after deducting the bonus already paid voluntarily by the company that the company had still in its hand a sum of pound55,137 out of which it could pay a reasonable amount to these workmen.
When deciding how much out of this pound956,137 could reasonably be paid as additional bonus to these workmen the Tribunal had to consider the contention raised on behalf of the appellant company that it would be unfair to ignore the fact that not these staff members alone but 11,247 other workmen as well have contributed to the emergence of this surplus.
The appellant 's argument was that staff members who have raised this dispute should not be allowed to steal an advantage over the numerous other workers of the company and that just as results of the different branches of the company have been considered as a whole in arriving at the figure of available surplus it is just and proper that these workmen who have raised the dispute should be given only a fair share out of that portion of the surplus which may be considered properly payable to all the workmen of the company.
In dealing with this question the Tribunal has said 205 " But the fortune of the 11,247 workers depend upon the trading results of the department in which they are working; the bonus of the workers is decided compartment wise and not on the basis of the overall profits of the company.
Cashew workers are given bonus on the basis of the cashew depart ment profits and not on the basis of the total profits of the company.
The staff members are transferable from one department to another and from one branch to another branch.
" We are not able to understand how in spite of the way the company 's balance sheets and profit and loss accounts have been kept the different departments of the company could be treated separately for the purposes of bonus.
The mere fact that the company has actually done so does not make such distribution right.
Obviously if cashew workers would in fact be entitled to a larger bonus on the overall results of the company they have been unfairly treated by the company in having been given lesser bonus on the basis of cashew department profits.
It is urged on behalf of the,appellant that the fact that the workmen other than these staff members have got less than they would have been entitled to does not justify the grant of a larger share to the present workmen than what they would be entitled to if those other workmen had been given a fair share.
This Court had to deal with a somewhat similar position in Indian Hume Pipe Co. vs Their Workmen(1).
The respondents there were workmen only of the Wadala factory.
The appellant had however paid to various workmen elsewhere as and by way of bonus varying between 4% and 29% of the basic wages for the year in question.
It was clear that the sum of Rs. 1,23,138/only had been paid in full and final settlement to the workmen in some of the factories and the bonus calculations on an all India basis would work to the advantage of the appellant, in so far as they would result in saving to the appellant of the difference between the amounts to which those workmen would be entitled to on the basis of the all India figures adopted by the tribunal and the amounts actually (1) [1959] SUPP.
2 S.C.R. 948.
206 paid to them as a result of agreements, conciliation or adjudication.
On behalf of the respondents it was therefore contended that the calculations should be made after taking into account the savings thus effected:.
Dealing with this contention this Court observed : " We are afraid we cannot accept this contention.
If this contention was accepted, the respondents before us would have an advantage over those workmen with whom settlements have been made and would get larger amounts by way of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen ,at lesser figures.
If this contention of the respondents was pushed to its logical extent, it would also mean that in the event of the non fulfilment of the conditions imposed by the tribunal in the award of bonus herein bringing in savings in the hands of the appellant, the respondents would be entitled to take advantage of those savings also and should be awarded larger amounts by way of bonus, which would really be the result of the claimants entitled to the same not receiving it under certain circumstances an event which would be purely an extraneous one and unconnected with the contribution of the respondents towards the gross profits earned by the appellant.
The tribunal was, therefore, right in calculating the bonus on an all India basis." Though in the present case there has been no settlement" strictly speaking with the other workers in the various branches, the considerations which weighed with the Court in the above case are fully applicable to this case and the Tribunal must be held to have committed an error in treating the sum still in the hands of the company as a matter only between the company and these present claimants.
In deciding what relief may reasonably be given to the appellant company in view of this error in the Tribunal 's approach to the question of distribution of the amount still available, we have however to take into account two errors which have been made by the Tribunal in this connection in favour of the appellant.
One of these is that in distributing the available 207 surplus the Tribunal omitted to take into account the important fact that a sum of no less than pound1,10,000/has been capitalised out of the reserves at the beginning of the year.
The second error was that the Tribunal in saying that after paying 8 months ' bonus there is a balance of pound 34,397 with the employer, omitted to take into consideration the fact that the company would also have the benefit of a large amount as income tax rebate in respect of the bonus paid to its clerical staff.
Taking all these facts into consideration we are of opinion that a fair order would be to award to the staff bonus equivalent to 3 months ' basic wages in addition to the amount already paid voluntarily.
We therefore allow the appeal in part and in modification of the award made by the Industrial Tribunal award to the staff of M/s. Peirce Leslie Co., Ltd., bonus equivalent to 3 months ' basic wages in addition to the amount already voluntarily paid by the company.
There will be no order as to costs.
Appeal partly allowed.
| During the year 1954 1955, the appellant paid a sum equiva lent to 3 months basic wages as bonus to its monthly paid clerical staff.
These employees raised an industrial dispute claiming an additional bonus equal to 7 months basic wages.
The Industrial Tribunal to which the dispute was referred awarded additional bonus equal to 5 months basic wages.
The appellant contended that (i) since the element of risk in the business was great and the capital employed was small the Full Bench formula had to be materially altered and rates higher than 6% on paid up capital and 4% on reserves employed as working capital should be allowed (ii) a higher allowance ought to be made for rehabilitation; and (iii) the entire surplus ought not to be treated as available for distribution as only a small percentage of the workmen had made the claim for bonus.
Held, that since the claim for additional bonus was made only by a small percentage of the workmen the entire available surplus could not be treated as available in distributing bonus to them.
Not only the 882 staff members who had raised the claim but II, 247 other workmen as well had contributed to the emergence of the surplus.
The sum still in the hands of the company could not be treated as a matter only between the company and these present claimants.
Indian Hume Pipe Co., vs Their Workmen, [1959] SUPP.
2 S.C.R. 948.
L.L.I. 357, applied.
Return on invested capital had always to provide for pure interest plus compensation for the risks of business.
In a particular industry where the risk was appreciably less than usual there would be good cause for providing less than 6 % ; and in an industry where extraordinary risks were run more than 6% could reasonably be provided for.
There was no unusual risk run by the appellants in their business and no case was made out for allowing any higher return on the paid up capital or working capital.
There was no justification for compensation of the entrepreneur for the fact that with a small amount of capital considerable profits were earned.
As fixed capital was liable to gradual deterioration reserves had to be created out of profits for replacing any portion of it as soon as it became too deteriorated for efficient use.
It was neces 195 sary that the company 's capital fund remained intact.
An amount reasonably sufficient for the notional requirement of rehabilitation during the relevant year was deducted as a prior charge in ascertaining surplus profits from which bonus could be paid.
The basis of the prior charge was the assumption that rehabilitation was a continuing process and needed allotment from year to year.
But in the present 'case the appellant had failed to make out any case for rehabilitation allowance in addition to the ordinary depreciation.
Associated Cement Company 's case, , relied on.
|
Appeals Nos. 436 to 438 of 1961.
Appeals by special leave from the judgment and order dated December 9, 1959, of the Punjab 886 High Court in Letters Patent Appeals Nos. 407, 408 and 409 of 1959.
Achhru Ram and B. D. Jain, for the appellants.
Gian Singh Vohra, for the respondents.
October 4.
The Judgement of the Court was delivered by GAJENDRAGADKAR, J.
What is the effect of the retrospective operation of section 31 introduced by the Punjab Pre emption (Amendment) Act, 1960 (X of 1960) in the parent Act of Pre emption (No. 1 of 1913).
That is the short question which arises for our decision in these three appeals which have been ordered to be consolidated for the purpose of hearing by this Court.
These appeals arise from three pre emption suits instituted by the respondents against the respective appellants.
The respondents ' case was that the properties in suit had been sold by Aftab Rai on May 31, 1956, for Rs. 10,000/ to the appellants and it is these sales which they wanted to preempt.
They alleged that they are the owners of agricultural land in Patti Aulakli and Patti Rode, in Mauza Marahar Kalan, and as such, they had the statutory right to claim pre emption, under section 15(c) (ii) and (iii).
The appellants resisted this claim on the ground that the respective vendees from Aftab Rai had transferred by exchanges about 2 kenals out of the lands purchased by them and as a result of the said exchanges the appellants had themselves become entitled to preempt the said sales under the same statutory provision.
Since the appellants had acquired equal status with the respondents who claimed to be the preemptors, their claim for pre emption cannot be sustained.
That, in brief, was the nature of the contest between the parties.
887 The trial Court held that the exchanges on which the appellants relied bad not been proved and so, it gave effect to the respondents ' right to preempt under section 15(c) (ii) & (iii).
The appellants took the matter before the Addl.
District Judge in appeal.
The lower appellate Court was pleased to admit additional evidence under 0.41, r. 27, of the Code of Civil Procedure and held that the exchanges in question had in fact been proved and were, in law, valid.
It, therefore came to the conclusion that the appellants acquired equal status with the respondents and so, the respondents ' claim for pre emption must fail.
That is why the appeals preferred by the appellants were allowed and the respondents ' suits were dismissed.
The dispute was then taken up before the High Court of Panjab by the respondents by second appeals.
Mahajan, J., who heard these appeals held that the property acquired by exchange in lieu of the part of the property purchased by the vendees did not give the appellants a right to preempt.
He referred to the fact that exchange of lands was sometimes recognised as conferring on the party the right to preempt, but that was where the land exchanged did not form part of the land sold and preempted.
In the result, the High Court held that the plea made by the appellants was not well founded in law and so, the respondents were entitled to pre empt.
As a result of this finding, the decrees passed by the lower appellate Court were reversed and the respondents ' suits were decreed.
The appellants then moved the Division Bench by Letters Patent appeals, but these appeals were dismissed.
It is against the decrees thus passed by the Division Bench in Letters Patent appeals that the appellants have come to this Court by special leave.
We have already noticed that both the appellants and the respondents are claiming a right to 888 preempt under section 15(c) (ii) and (iii) of the Parent Act of 1913.
On February 4, 1960, the amending Act No. 10 of J960 was passed.
Section 4 of the amending Act has substituted anew s.15 of the old s.15 after making substantial changes in the provisionsof the earlier section.
Clauses (ii) and (iii) of theoriginal s.15(c) have been deleted, with the result that the claims for preemption made both by the appellants and the respondents have ceased to be recognised by the amended provisions.
The appellants contend that since the respondents have got a decree for pre emption in their favour on the provisions of the unamended s.15, that decree can no longer be sustained because of the provisions of s.31 of the amending Act.
Section 31 provides that no Court shall pass a decree in a suit for pre emption whether instituted before or after the commencement of the Punjab Pre emption (Amendment) Act, 1959(1960) which is inconsistent with the provisions of the said Act.
In support of his argument that s.31 being retrospective in operation the respondents ' title to claim pre emption can no longer be entertained.
Mr. Achhru Ram for the appellants has invited our attention to a recent decision of this Court in the case of Ram Sarup vs Munshi (1) pronounced on August 30, 1962.
In that case, Ayyangar, J., who spoke for the Constitution Bench considered the question about the retrospective operation of section 31 and has observed that the said provision is retrospective and that the language used in the said section is "plain the comprehensive so as to require an appellate Court to give effect to the substantive provisions of the amending Act whether the appeal before it is one against a decree granting preemption or one refusing that relief," It was no doubt urged before the Court in that case that the words used in section 31 did (1) ; 889 not justify the application of the amended provisions to proceedings pending before the appellate Court; them said words showed that the said provisions could be invoked only in cases which were pending before the trial Court.
This contention was rejected and so, it must be taken to be settled that the provisions of section 31 are retrospective and can be relied upon by the appellants in their present appeals before this Court.
This position would undoubtedly have helped the appellants but for another complication which has been introduced by the relevant provisions of the amended section 15 enacted by the amending Act.
We have already noticed that some persons whose right to preempt was recognised by the corresponding provisions of the parent Act, have been omitted by the amended section.
The amended section has also introduced another class of persons on whom the right to claim pre emption has been conferred.
These persons are the tenants who hold under tenancy of the vendors the land or property sold or a part thereof.
This class of tenants has been introduced in clauses (a), (b) and (c) of amended section 15.
Clause four of section 15(1) (c) provides that the right of pre emption in respect of agricultural land and village immovable property shall vest in the tenants who hold under tenancy of the vendors or any one of them the land or property sold or a part thereof.
Similar provisions are made in clauses (a) & (b) of the said section.
For the respondents Mr. Vohra contends that they are the tenants who hold under tenancy of the vendor the lands in question and as such, they are now clothed with the right to claim pre emption.
In other words, the respondents argument is that though the right to preempt which they possessed under clauses (ii) and (iii) of the unmended section 15(c) of the parent Act have been taken ,way retrospectively by the amending Act, they have been clothed with the same right by virtue of 890 the fact that they fall under the fourth clause of the amended s, 15 (1) (c) and the conferment of this right like the destruction of their right under the deleted provisions of the unamended section must operate retrospectively.
He, therefore, suggests that the respondents ought to be given an opportunity to prove their case under the fourth clause of section 15(c) as amended.
In this connection, he has referred us to the fact that this plea has been specifically taken by the respondents in their statement of the case before this Court.
It is on this plea that the question about the effect of the retrospective operation of section 31 arises.
Mr. Achhru Ram contends that though section 31 is retrospective and in that sense the rights to preempt which vested in the respondents at the time when they instituted the present suits have been retrospectively taken away from them, it cannot be said that the right to preempt to which the respondents lay claim in the present appeals has been retrospectively created.
His argument is that by the amending Act, the Legislature has no doubt provided that certain classes of persons who were entitled to preempt under the old Act should not be given that right and the extinction of the said right should operate retrospectively, but that cannot be said to be the policy of the legislature in regard to the rights which have been created for the first time by the amending Act.
The argument thus presented may prima facie appear to be attractive; but a close examination of the words used in section 31 shows that it is not well founded.
Section 31, in substance, requires the appellate Court to pass a decree in a preemption matter which is not inconsistent with the provisions of the amending Act.
In the present appeals, if we were to uphold the respondents ' right to claim preemption on the strength of the provisions of section 15(c) 891 as they stood prior to the amendment, that would be inconsistent with the provisions of the amending Act, and so, the change made by the amending Act has to be given effect to and the right which once vested in the respondents must be deemed to have been retrospectively taken away from them.
On this point there is no dispute.
Would it make any difference in the legal position when we are dealing with rights which are created for the first time by the amending Act on the date when this Court will pass a decree in the present appeals? If the rights created in favour of the tenants are not recognised and a decree is passed ignoring the said rights, that decree would be inconsistent with the relevant provisions of the amending Act, and section 31 has clearly enjoined that no Court shall pass a decree which is inconsistent with the provisions of the amending Act.
The position, therefore, appears to be clear that when a decree is passed in a preemption matter pending before the appellate Court, that Court must refuse to recognise the right to preempt which was recognised by the unamended Act but has been dropped by the amending Act just as much as it must recognise rights which were not recognised by the unamended Act but have been created by the amending Act.
The retrospective operation of s.31 necessarily involves effect being given to the substantive provisions of section 15 retrospectively and that will apply as much to the extinction of the old rights as to the creation of new ones.
The retrospective operation of section 15 which is consequential on the retrospective operation of s.31 is not affected by the fact that the right of preemption prescribed by section 15 if; referred to as a right which shall vest in the persons specified in subsections (a), (b) and (c) of section 15(1).
It is, however, urged that the law of preemption requires that the preemptor must possess the right to preempt at the date of the sale, at the 892 date of the suit and at the date of the decree.
This position cannot be disputed.
But when it is suggested that the respondents cannot claim that they had the right when they brought the present suit or when the sales were effected, the argument ignores the true effect of the retrospective operation of section 31 and section 15.
If the inevitable consequence of the retrospective operation of s.31 is to make the substantive provisions of section 15 also retrospective, it follows that by fiction introduced by the retrospective operation, the rights which the respondents claim under the amended provisions of section 15 must be deemed to have vested in them at the relevant time.
If the relevant provisions are made retrospective by the legislature, the retrospective operation must be given full effect to, and that meets the argument that the right to preempt did not exist in the respondents at the time when the sale transactions in question took place.
Therefore, we are satisfied that the respondents are entitled to claim that they should be given an opportunity to prove their case that as tenants of the lands in suit they have a right to claim preemption.
Incidentally, when the respondents filed the present suits, they had a right to preempt under the relevant provisions of the Act as they stood at that time; by the amendment, that right has been taken away, but instead they claim another right by virtue of their status as tenants of the lands, and this right is, by the retrospective operation of section 31, available to them.
We must accordingly set aside the decrees passed by the High Court and send the matters back to the trial Court with a direction that it should allow the respondents an opportunity to amend their claims by putting forth their right to ask for preemption as tenants under the amended provision of 8. 15.
After the amendments are thus made, the appellants should be given an opportunity 893 to file their written statements and then appropriate issues should be framed and the suits tried and disposed of in the light of the findings on those issues in accordance with law.
Under the unusual circumstances in which the litigation has thus secured a further lease of life, we direct that the costs incurred so far should be borne by the parties.
| Each of the appellants in the two appeals who were tenants of land in Tanjore on which non residential premises had been constructed by them, applied to the Munsif under section 9 of the Madras City Tenants Protection Act, 1921 (111 of 1922) to have the respective sites conveyed to them after fixing the sale price as contemplated by the Act.
Pending the decision of he applications by the Munsif, the protection and rights given to the tenants who had constructed buildings on leased and by the Principal Act was withdrawn by Act XIII of 1960, in respect of non residential buildings in Tanjore but with regard to the cities of Madras, Salem, Madurai, Coimbatore and Tiruchirappalli the protection and rights were retained both as regards residential buildings and non residential buildings.
The appellants applied under article 226 of the Constitution to the High Court of Madras praying for a mandamus directing the Munsif to determine their applications under section 9 of the Principal Act as extended to the town of Tanjore by Notification and the Act of 1955 ignoring Act XIII of 1960 which was impugned as offending articles 14, 19 and 31 of the Constitution.
The High Court upheld the validity of the Act following the earlier decision of that Court.
Held that confining the protection to residential buildings only in the town of Tanjore while giving protection to tenants of both residential and non residential buildings in the other 283 towns was based upon real differences between Tanjore and the other towns regarding the pressure on non residential accommodation and other relevant factors including population and that the differentiation was related to the object namely protecting tenants of residential buildings principally and also of nonresidential buildings where the need was most felt.
Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar ; , Bhudan Choudhury vs State of Bihar, ; and The State of West Bengal.
vs Anuwar Ali, ; , referred to.
Held, further, that article 19(1) (f) guarantees both abstract as well as concrete rights of property and that property has the same meaning in article 19(1) (f) and article 31 (1).
State of West Bengal vs Subodh Gopal Bose ; , The Commissioner Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Nutt, ; and Chiranjit Lal Choudhury vs Union of India, [1950] 869, referred to.
Held, further, that law ' under article 31 must be a valid law and to be valid it must stand the test of other fundamental rights including article 19(1) (f) of the Constitution.
Kavalappara Kottarathil Kochuni vs State of Madras, referred to.
Held, further, that the right to purchase property conferred by a Statute is in its nature the same as the right of purchase conferred by contract and in neither event could it amount to a right of property.
Maharana Shri Jayvantsinghji Ranmalsinghji etc.
vs The, State of Gujrat, [1662] Supp. 2 section C. R. 41 1.
Held, also that the principal Act did not confer a right on the tenant to the superstructure and therefore, the impugned Act did riot take away any such right.
|
Civil Appeal No. 5313 of 1983.
Appeal by Special leave from the Judgment and Order dated the 17th January, 1983 in CMWP.
No. 8397 of 1982.
Shanti Bhushan and section Markandeya for the Appellant.
Gopal Subramaniam and Mrs. section Dikshit for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
About 45 plots of land of Kheragarh village and about 15 adjoining plots of land of Nagala Udaiya village situated in the district of Agra were notified under section 4 (1) of the Land Acquisition Act, 1894 (Act No. 1 of 1894) (hereinafter referred to as 'the Act ') for acquisition for a public purpose, namely, for the construction of the Market Yard of the Krishi Utpadan Mandi Samiti, Kheragarh under a notification dated January 8, 1980 issued by the Government of the State of Uttar Pradesh.
As the plots of land in question which 419 were agricultural lands were urgently required for the aforesaid purpose and the Government was of the view that it was necessary to direct that section 5 A of the Act should not apply to the said acquisition proceedings, it simultaneously made an order under section 17 (4) of the Act directing that section 5 A would not apply to the said proceedings and incorporated the said order also in the notification issued.
under section 4 (1) of the Act.
The notification was published in the Official Gazette dated January 9, 1980.
This was followed by a notification dated January 9, 1980 under section 6 of the Act published in the Official Gazette dated January 10, 1980.
That notification contained an order made under section 17 (1) of the Act authorising the Collector to take possession of the plots on the expiration of fifteen days from the publication of the notice under section 9 (1) of the Act though no award under section 11 of the Act had been made.
The above said plots of land which were in all about 60 in number belonged to a number of persons.
The total extent of land proposed to be acquired was about 41.46 acres.
The possession of all the plots of land was also taken in the course of the said acquisition proceedings.
In or about June 1982, notices were issued by the Collector to various persons having interest in the said plots under section 9 (3) of the Act for the purpose of determining the compensation payable to them.
After the issue of the said notices, three persons Hari Singh (appellant No. 1), Pooran Chand (appellant No. 2) and Munna Lal (appellant No. 3) filed a writ petition in Civil Misc.
Writ Petition No. 8397 of 1982 on the file of the High Court of Allahabad questioning the validity of the acquisition proceedings as regards 6 plots of land in Kheragarh village out of the total of about 60 plots of land which had been acquired by the State Government in the above said proceedings.
Appellant No. 1 claimed to be the owner of plots Nos 249, 250 and 252.
Appellant No 2 claimed to be the owner of plot No. 261 and appellant No 3 claimed to be the owner of plots Nos. 133 and 134.
Appellant No. 1 pleaded that there was a house situated on plot No. 249 and that he had also installed a flour mill on it.
They all pleaded that they had no knowledge of the acquisition proceedings and were prejudiced by the order made under section 17 (4) of the Act exempting the operation of section 5 A of the Act in the case of these proceedings.
They further pleaded that there was no urgency sufficient in law to sustain the order made under section 17 (4) of the Act as nothing had been done on the lands for nearly two years.
Appellant No. 1 also pleaded that 420 section 17 (4) of the Act would not be applicable because on a part of his land there was a house.
They also applied for an interim order restraining the Collector from dispossessing them from the plots in question.
On September 9, 1982 the High Court made an interim order restraining the respondents from dispossessing the appellants from the plots until further orders, unless they had already been dispossessed.
But on January 17, 1983, the High Court rejected the writ petition at the stage of admission after hearing the advocates for both the parties.
This appeal by special leave is filed by the appellants under Article 136 of the Constitution on against the order of the High Court.
The High Court has not given any reasons for its order dismissing the writ petition.
The order reads: 'Rejected '.
We have been taken through the writ petition, counter affidavits and other papers filed in the High Court and in this Court.
At the out set we are of the view that the writ petition filed in July, 1982 questioning the notification issued in January, 1980 after a delay of nearly two and a half years is liable to be dismissed on the ground of laches only.
It is no doubt true that the appellant have pleaded that they did not know anything about the notifications which had been published in the Gazette till they came to know of the notices issued under section 9 (3) of the Act but they have not pleaded that there was no publication in the locality of the public notice of the substance of the notification as required by section 4 (1) of the Act.
It should be presumed that official acts would have been performed duly as required by law.
It is significant that a large number of persons who own the remaining plots have not challenged the acquisition proceedings.
The only other petition in which these proceedings.
are challenged is Civil Misc.
Writ Petition No. 11476 of 1982 on the file of the High Court filed subsequently by Amar Singh and four others.
Moreover in a small place like Kheragarh where these plots are situate, the acquisition of these lands would be the talk of the town in a shortwhile and it is difficult to believe that the appellant who are residents of that place would not have known till July, 1982 that the impugned notification had been published in 1980.
Any interference in this case filed after two and a half years with the acquisition proceedings is likely to cause serious public prejudice.
This appeal should, therefore, fail on the ground of delay alone.
421 Now even on merits there appears to be no substance in the case of the appellants.
At the hearing of this appeal, the appellants have confined their case to plots Nos. 249, 261 and 133 and have given up their case in regard to plots Nos. 250, 252 and 134.
Appellant No. 1 claims to be the owner of plot No. 249.
On behalf of the respondents it is urged that appellant No. 1 is recorded only as a co tenure holder alongwith five others and they have not impeached the notifications.
With regard to the allegation about the existence of a house on this plot, it is seen that the said fact is denied.
The respondents rely upon some statements recorded by the revenue authorities suggesting that there was no house on this plot on the date of the notification.
This is a disputed question of fact.
Appellant No. 2 who claims to be the owner of plot No. 261 is stated to have purchased it on November 17, 1980 after the impugned notifications were published.
The title of appellant No. 3 to plot No. 133 is denied by R. K Kannaujia, Secretary, Krishi Utpadan Mandi Samiti, Kheragarh.
In this state of affairs where there are disputed questions of fact it cannot be said that the appellants have made out any case for interference under Article 226 of the Constitution.
On behalf of the appellants reliance is, however, placed on a decision of this Court in State of Punjab vs Gurdial Singh & Ors.(I) In that decision the main point made out was that the acquisition proceedings had been engineered mala fide by a State Minister.
We do not have any such allegation in the present case.
In the circumstances of this case we do not find that there is any ground to hold that the order made under section 17 (4) of the Act exempting the operation of section 5 A of the Act is bad in law even though there appears to be some administrative delay in commencing the construction of the Market Yard.
Some photographs of the land produced before us, however, show that the work of construction has already been commenced.
We do not, therefore, find that there is any ground to interfere with the order of the High Court dismissing the writ petition.
The appeal fails and it is dismissed with costs.
H.S.K. Appeal dismissed.
| In compliance with directions given by the Constitution Bench of the Supreme Court, the Bombay High Court withdrew to itself Special Case No. 24 of 1982 and Special Case No. 5/83 pending in the Court of the Special Judge, Greater Bombay and assigned the said two cases to Mr. Justice S.N. Khatri a sitting Judge of the said court.
When the cases were taken up for hearing, two preliminary contentions were raised as to whether State should appoint a Public Prosecutor to conduct the trial and what should be the procedure to be followed and from what stage of the trial.
Hence the two applications for classification.
The Court; ^ HELD: 1.
The learned Judge has to hold the trial according to the procedure prescribed in chapter XIX B i.e., the procedure prescribed in section 244 to 247 (both inclusive) of the Code of Criminal Procedure.
To be precise, the learned Judge has to try the case according to the procedure prescribed.
for cases instituted otherwise than on police report by Magistrate.
The trial was to proceed from the stage when the accused was discharged.
[414D E] 2.
If the cognizance of an offence is taken under section 8( ') of the criminal law (Amendment) Act, 1952, and the trial has to be held according to the procedure prescribed therein, under section 8(3), the learned advocate engaged by the complainant to conduct the prosecution will be deemed to be a public prosecutor.
In such a situation, there is no question of the State appointed Public Prosecutor to conduct, the prosecution.
It is for the complainant to decide who should be his learned advocate in charge of the Prosecution.
[415B C]
|
Appeal No.84 of 1960.
888 Appeal from the judgment and decree dated July 26, 1956.
of the Bombay, High Court in Appeal No. he 138 of 1956.
The appellant in person.
B. R. L. Ayengar and D. Gupta, for the respondent.
April 12.
The Judgment of the Court was delivered by SINHA, C. J.
The main question for decision in this appeal, on a certificate of fitness granted by the ' High Court of Judicature at Bombay, is whether a public servant, who has been officiating in a higher post but has been reverted to his substantive rank as a result of an adverse finding against him in a departmental enquiry for misconduct, can be said to have been reduced in rank within the meaning of section 240(3) of the Government of India Act, 1935.
The learned Civil Judge, Senior Division, by his, Judgment and Decree dated October 31, 1955, held that it was so.
The High Court of Bombay, on a first appeal from that decision, by its Judgment and Decree dated July 26, 1956, has held to the contrary.
In so far as it is necessary for the determination of this appeal, the facts of this case may shortly be stated as follows.
The appellant was holding the rank of a Mamlatdar in the First Grade and Was officiating as a District Deputy Collector.
In the latter capacity he was functioning as a District Supplies Officer.
He had to undertake tours in the discharge of his official duties for which he maintained a motor car.
In respect of one of his travelling allowance bills, it was found that he had charged travelling allowance in respect of 59 miles whereas the correct distance was only 51 miles.
A departmental enquiry was held against him as a result of which he was reverted to his original rank as Mamlatdar, by virtue of the Order of the Government dated August 11, 1948, (exhibit 35), which was to the following effect: "After careful consideration Government have decided to revert you to Mamlatdar for a period of 889 three years and have further directed that you should refund the excess mileage drawn by you in respect of the three journeys.
" The appellant made a number of representations to the Government challenging the correctness of the findings against him and praying for re consideration of the Order of Reversion passed against, him but to no effect, in spite of the fact that ultimately the Accountant General gave his opinion that the appellant had not overcharged and that there was no fraud involved in the travelling allowance bill which was the subject matter of the charge against him.
But ultimately, by a Notification date& March 26, 1951, (exhibit 61), the appellant was promoted to the Selection Grade with effect from August 1, 1950, but even so the Order of Reversion passed against the appellant remained effective and appears to have affected his place in the Selection Grade.
Eventually, the appellant retired from service on superannuation with effect from November 28, 1953.
He filed his suit against the State of Bombay on August 2, 1954, for a declaration that the Order of the Government dated August 11, 1948, was void, inoperative, wrongful, illegal and ultra vires, and for recovery of Rs. 12,866 odd or account of his arrears of salary, allowances, etc.
with interest and future interest.
The learned Civil Judge Senior Division, at Belgaum, came to the conclusion that the first part of the departmental enquiry held against the plaintiff leading up to the findings against him was free from any defect but that he had no been given the opportunity of showing cause against the punishment proposed to be inflicted upon him a a result of those findings, in so far as no show cause notice was given to him nor a copy of the enquire, report showing the grounds on which the findings ha, been based.
There was, thus, according to the finding of the Trial Court, no full compliance with the requirements of section 240(3) of the Government of India Act 1935.
The Court also held that the Order of Reversion amounted to a penalty imposed upon the plaintiff as a result of the enquiry.
The Court, therefore, cam 890 to the conclusion that the Order aforesaid passed by the Government reverting him to the substantive rank was void and granted him that declaration, but dismissed his suit, with costs, in respect of the arrears Claimed by him as aforesaid on the ground that it was based on tort and not on contract.
There was an appeal by the plaintiff in respect of the dismissal of his claim for arrears, and cross objections by the State in respect of that part of the judgment and decree which had granted declaration in favour of the plaintiff.
The High Court dismissed the appeal by the plaintiff and allowed the cross objections of the de fendant respondent in respect of the declaration, but made no orders as to the costs of the appeal and the cross objections.
The High Court held that the Order of Reversion, even assuming that it was a punishment as a result of the departmental enquiry against the appellant, was not a punishment within the meaning of section 240(3) of the Government of India Act, 1935.
It also held that the Order of Reversion was not a punishment at all.
In this Court, the appellant, who has argued his own case with ability, has urged in the first place, and in our opinion rightly, that his case is covered by the observations of this Court in Parshotam Lal Dhingra vs Union of Indid (1).
Those observations are as follows: "A reduction in rank likewise may be by way of punishment or it may be an innocuous thing.
If the Government servant has a right to a particular rank, then the very reduction from that rank will operate as a penalty, for he will then lose the emoluments and privileges of that rank.
If, however, he has no right to the particular rank, his reduction from an officiating higher rank to his substantive lower rank will not ordinarily be a punishment.
But the mere fact that the servant has no title to the post or the rank and the Government has, by contract, express or implied, or under the rules, the right to reduce him to a lower post does not mean that an order of reduction of a servant to a lower (1) , 863 64.
891 post or rank cannot in any circumstances be a punishment.
The real test for determining whether the reduction in such cases is or is not by way of punishment is to find out if the order for the reduction also visits the servant with any penal consequences.
Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion, then that circumstance may indicate that although in form the Government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the Government has terminated the employment as and by way of penalty.
The use of the expression "termi nate" or "discharge" is not conclusive.
Tn spite of the use of such innocuous expressions, the court has to apply the two tests mentioned above, namely, (1) whether the servant bad a right to the post or the rank or (2) whether he ha,,; been visited with evil consequences of the kind hereinbefore referred to? If the case satisfies either of the two tests then it must be held that the servant has been punished and the termination of his service must be taken as a dismissal or removal from service or the reversion to his substantive rank must be regarded as a reduction in rank and if the requirements of rules and article 311, which give protection to Government servant have not been complied with, the termination of the service or the reduction in rank must be held to be wrongful and in violation of the consti tutional right of the servant.
" He has rightly pointed out that he would have continued as a Deputy Collector but for the Order of the Government, dated August 11, 1948, impugned in this case, as a result of the enquiry held against him, and that his reversion was not as a matter of course or for administrative convenience.
The Order, in terms, held him back for three years.
Thus his emoluments, present as well as future, were adversely affected by the 892 Order aforesaid of the Government.
In the ordinary course, he would have continued as a Deputy Collector with all the emoluments of the post and would have been entitled to further promotion but for the setback in his service as a result of the adverse finding against him, which finding was ultimately declared by the Account ant General to have been under a misapprehension of the true facts.
It is true that he was promoted as a result of the Government Order dated March 26, 1951, with effect from August 1, 1950.
B ' that promotion did not entirely cover the ground lost by him as a result of the Government Order impugned in this case.
It is noteworthy that the Judgment of the High Court under appeal was given in July, 1956, when the decision of this Court in Dhingra 's case (1) had not been given.
The decision of this Court was given in November, 1957.
Of the two tests laid down by this Court, certainly the second test applies, if not also the first one.
He may or may not have a right to hold the post or the rank, but there is no doubt that he was visited with evil consequences.
Ordinarily, if a public servant has been officiating in a higher rank it cannot be said that he has a substantive right to that higher rank.
He may have to revert to his substantive rank as a result of the exigencies of the service or he may be reverted as a result of an adverse finding in an enquiry against him for misconduct.
In every case of reversion from an officiating higher post to his substantive post, the civil servant concerned is deprived of the emoluments of the higher post.
But that cannot, by itself, be a ground for holding that the second test in Dhingra 's case (1), namely, whether he has been visited with evil consequences, can be said to have been satisfied.
Hence, mere deprivation of higher emoluments as a consequence of a reversion cannot amount to the "evil consequences" referred to in the second test in Dhingra 's case (1); they must mean something more than mere deprivation of higher emoluments.
That being so, they include, for example, forfeiture of substantive pay, loss of seniority, etc.
Applying that (1) [1058] S.C.P. 326, 863 64. 893 test to the present case, it cannot be said that simply because the appellant did not get a Deputy Collector 's salary for three years, he was visited with evil conse quences of the type contemplated in Dhingra 's case (1).
Even if he had been reverted in the ordinary course of the exigencies of the service, the same consequences would have ensued.
If the logs of the emoluments attaching to the higher rank in which he was officiating was the only consequence of his reversion as a result of the enquiry against him, the appellant would ' have no cause of action.
But it is clear that as a result of the Order dated August 11, 1948 (exhibit 35), the appellant lost his seniority as a Mamlatdar, which was his substantive post: That being so, it was not a simple case of reversion with no evil consequences; it had such consequences as would come within the test of punishment as laid down in Dhingra 's case.
If the reversion had not been for a period of three years, it could not be said that the appellant had been punished within the meaning of the rule laid down in Dhingra 's case, (1).
It cannot be asserted that his reversion to a substantive post for a period of three years was not by way of punishment.
From the facts of this case it is clear that the appellant was on the upward move in the cadre of his service and but for this aberration in his progress to a higher post, he would have, in ordinary course, been promoted as he actually was sometime later when the authorities realised perhaps that he had not been justly treated, as is clear from the Order of the Government, dated March 26, 1951, promoting him to the higher rank with effect from August 1, 1950.
But that belated justice meted out to him by the Government did not completely undo the mischief of the Order of Reversion impugned in this case.
It is clear to us, therefore, that as a result of the Order of Reversion aforesaid, the appellant had been punished and that the Order of the Government punishing him was not wholly regular.
It has been found that the requirements of section 240(3) of the Government of India Act, 1935, corresponding to article 311 (2) of the Constitution, had not been fully complied with.
His (1) ,863 64. 894 reversion in rank, therefore, was in violation of the Constitutional guarantee.
In view of these considerations it must be held that the High Court was not right in holding against the appellant that his reversion was not a punishment contemplated by section 240(3) of the Government of India Act, 1935.
On this part of the case, in our opinion, the decision of the High part has to be reversed and that of the Trial Court hat his reversion to his substantive rank was void, must be restored.
The question then arises whether he is entitled to any relief in respect of his claim for arrears of salary and dearness allowance.
He has claimed Rs. 10,777 odd as arrears of pay, Rs. 951 odd as arrears of dearness allowance, as also Rs. 688 odd as arrears of daily allowance plus interest of Rs. 471 odd, thus aggregating to the sum of Rs. 12,886 odd.
This claim is spread over the period August, 1946, to November, 1953, that is to say, until the date of his retirement from Government service, plus future interest also.
On this part of the case the learned Trial Judge, relying upon the case of the High Commissioner for India and Pakistan vs I. M. Lall (1) held that a government servant has no right to recover arrears of pay by an action in a Civil Court.
He got over the decision of this Court in the State of Bihar vs Abdul Majid (2) on the ground that that case has made a distinction between a claim based on a contract and that on a tort.
In the instant case, he came to the conclusion that as the plaintiff had claimed the difference between the pay and allowance actually drawn and those to which he would have been entitled but for the wrongful orders, the claim was based on tort and, therefore, the plaintiff was not entitled to any relief.
On the question of limitation, he held that the suit would be governed by article 102 of the Indian Limitation Act (IX of 1908) as laid down by the Federal Court in the case of The Punjab Province vs Pandit Tarachand (3).
In that view of the matter, the learned Judge held that adding the period of two months of the statutory notice under section 80 of the Code of Civil Procedure given to (1) (1948) L.R. 75 I.A. 225.
(2) ; (3) 895 Government, the claim would be in time from June 2, 1951.
Hence the Trial Court, while giving the declaration that the Order impugned was void, dismissed, the rest of the claim with a direction that the plaintiff was to pay 3/4ths of the costs of the suit to the defendant.
The High Court dismissed the suit in its entirety after allowing the cross objections of the State.
The appellant contended that his suit for arrears of salary would not be governed by the three years rule laid down in article 102 of the Limitation Act and that the decision of the Federal Court in Tarachand 's case (1) was not correct.
The sole ground on which this contention was based was that "salary" was not included within the term "wages".
In our opinion, no good reasons have been adduced before us for not following the aforesaid decision of the Federal Court.
In the result, the appeal is allowed in part, that is to say, the declaration granted by the Trial Court that the Order of the Government impugned in this case is void, is restored, in disagreement with the decision of the High Court.
The claim as regards arrears of salary and allowance is allowed in part only from the 2nd of June, 1951, until the date of the plaintiff 's retirement from Government service.
There will be no decree for interest before the date of the suit, but the decretal sum shall bear interest at 6% per annum from the date of the suit until realisation.
The plaintiff appellant will be entitled to three fourths of his costs throughout, in view of the fact that his entire claim is not being allowed.
Appeal allowed in part.
| When there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of the witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial judge 's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lies, the appellate court should not interfere with the finding of the trial judge on a question of fact.
It would not detract from the value to be attached to a trial judge 's finding of fact if the judge does not express ly base his conclusion upon the impressions he gathers from the demeanour of witnesses.
The rule is, however, only a rule of practice and does not mean that the court of first instance can be treated as infallible in determining which side is telling the truth or is refraining from exaggeration.
[Where the High Court reversed a finding of fact arrived at by the trial court depending on oral evidence on the ground that the rule that the appellate court should be s1ow to differ from the conclusions arrived at by the trial judge who had seen and heard the witnesses did not apply to the case as the trial judge did not base his conclusions on the impressions created in his mind by the witnesses who deposed before him, but upon the inherent improbability of the circumstances deposed to ,the Supreme Court held that the high court 's approach to the case was not proper and, after weighing the whole evidence in case reversed the finding of the High Court.] W.C. Macdonald vs Fred Latimer (A.I.R. 1929 P.C.15 at p. 18), Watts vs Thomas ([1947] A.C. 484 at p. 486), Sarave eraswami vs Talluri (A.I.R. 1949 P. C. 39.), Nether landsche Handel Maatschappij vs
R.M.P. Chettiar Firm and Others (A.I.R. ,205), referred
|
Appeal No. 1044 of 1968.
Appeal from the judgment and order dated October 3, 1967 of the Gujarat High Court in Special Civil Application No. 380 of 1965.
section T. Desai, V. B. Patel and I. N. Shroff, for the appellant.
section S Shukla, for respondents Nos. 1 to 9.
The Judgment of the Court was delivered by Dua, J.
This appeal has been presented to this Court by the Ahmedabad Manufacturing & Calico Printing Co., Ltd., pursuant to the certificate granted by the Gujarat High Court under article 187 133(1)(c) of the Constitution.
The Gujarat High Court had, on being approached by the respondents under article 227 of the Constitution, quashed and set aside the order of the Industrial Court, Gujarat dated February 5, 1964 which had affirmed the order of the Second Labour Court, Ahmedabad dated August 9, 1963, and after setting aside that order had directed the Industrial, Court to decide the matter afresh in the light of the observations made by the High Court in the impugned order.
The respondents in this Court had applied to the Labour Court under section 79 of the Bombay Industrial Relations Act, No. XI of 1947 (hereinafter called the Act) in December, 1962 complaining that the appellant company was liable to pay to the respondents (applicants before the Labour Court) dearness allowance every month according to the Dearness Allowance Award made by the Industrial Court but the same had not been paid for the month of September, 1962 which was distributed in October, 1962.
It was alleged that from October, 1962 the Company had been committing breach of the Dearness Allowance Award of the Industrial Court.
In that application the present respondents had based their claim on the following averments in para 3: ". the applicants are being paid Rs. 68 as basic pay by the opponent.
The maintenance of the garden is the legal responsibility of the opponent and for the health, welfare, recreation of the employees working in the several departments and for the decency of the adjacent offices the opponents are maintaining it.
The applicants are doing the entire work in respect thereof.
" In the written statement the appellant company raised several pleas in opposing that application.
The pleas which were pressed in the Second Labour Court and in the Industrial Court and which are now strongly pressed before us are contained in paras 3. 8 and 10 which so far as relevant may be reproduced: 3.
That the applicants not being in the employment of the opponent they have no locus standi to make an approach or to file this application.
That the opponent is not the employer of the applicants and the applicants are not its employees within the meanings of those words in the Act and as such the application is misconceived and not legally tenable.
With respect to the allegations and averments made in paras 1 to 4 of the application it is denied that the applicants are the employees of the opponent within the meaning of that term of the Act as alleged or that 188 they are entitled to the benefits of the dearness allowance as alleged or otherwise.
The true fact is that the applicants are not employed in any work which is ordinarily a part of the undertaking and as such they are not the employees within the definition of that word in the Act.
The applicants are employed as coolies by a gardening contractor Messrs Dbiraj Painters and they are paid by the said contractor.
The said garden lands include a large area of offices of some other concerns, a Government Post Office and a Museum which are open to the public, some quarters for workers as well as assistants and officers a hospital.
It is for the garden of the area which comprises these buildings and the area round caustic plant factory as well as the field in Dani Limda that this agreement was entered into with the contractor for keeping the trees and plants in proper trim.
Hence the work which they are performing has been held to be not ordinarily a part of the undertaking and as such the application is wholly misconceived and not legally tenable and is clearly barred by res judicata.
" The Second Labour Court dismissed the respondent 's appli cations.
In that Court 's view the real question in issue was whether the appellants did any work which is ordinary part of the undertaking.
The plea of res judicata based on the decision of the Labour Appellate Tribunal of India, Bombay (Appeal No. 135 of 1954 reported in was negatived but it was observed that the principle laid down in the earlier case would govern the present case as well.
After quoting the following passage from the earlier case "Now the Industrial Court was correct in holding that the agreement applied to the area which was outside the factory proper.
But to our mind the principle question involved is whether the maintenance of trees and plants can be said to be work which is ordinarily part of the undertaking.
In another case, this Tribunal had decided that a ration shop was a part of the work which is ordinarily a part of the, undertaking, but the maintenance of these trees and plants stands on a different footing and can hardly be regarged as part of the work of this particular undertaking which in fact is concerned with the production of cloth.
We can see no intrinsic connection between the maintenance of the trees and plants and the work which is ordinary part of the undertaking." the Labour Court observed that the "applicants ' gardeners or malis who are contractor 's employees cannot thus invoke the statutory definition of the employer".
189 On appeal by the aggrieved malis the Industrial Court in the course of its judgment observed that there was no dispute that the appellants in that court had been working as gardeners or garden mazdoors and had been employed through a contractor and not directly by the mill.
After referring to the decision of this Court in J.K. Cotton Spg. & Wvg.
Mills Co. Ltd., vs Labour Appellate Tribunal of India (1) and to the decision of the Madras High Court in Thyagaraja Chettiar vs Employees State Insurance Corporation( ' ') the, Industrial, Court observed : "Shri Jyotikar had urged that the term 'mill premises ' as interpreted by the courts would include even Places around the factory and so the question whether the appellants were working in one compound or the other would not be material.
But it is not necessary to consider this contention because looking to the nature of the work done by the appellants and to the fact that they were .not directly employed by the employer but through a contractor, it has been held that they cannot be covered within the scope of section 3(13).
Shri Jyotikar had also argued that under the Standing Orders, the term 'operative 'has been defined to include persons employed through contractor; but the Standing Orders would apply to a particular person only if he is an employee as defined under the Bombay Industrial Relations Act.
The definition under the Standing Orders cannot; therefore.
be of any help in considering whether a person is covered within the scope of the Bombay Industrial Relations Act or not.
Shri Jyotikar had then urged that in view of the fact that matters concerning health, safety and welfare of the employees are included in Item 3 of Schedule III, maintenance of gardens would be an ordinary part of the work of the undertaking.
It is true that maintenance of gardens may be a matter concerning health or welfare of the employees, but there is no, legal obligation to maintain such gardens.
Had any such obligation been created under any provision of law, the position might have been as urged by Shri Jyotikar; but, as the facts stand at present, it is not mandatory on a management of a cotton textile undertaking to maintain any garden and hence the work of maintenance of a garden cannot be said to be a work which is a part of the ordinary work of a cotton textile mill.
It is clear from the above that the appellants cannot be held to be employees as, defined under the Bombay Industrial Relations Act and so the Labour Court was right in dismissing the a plication." (1) [1964] 3 S.Ck. 24.
(2) [1963] II L.L.J. 207.
190 The High Court, on being approached by the aggreived malis tinder article 227 of the Constitution, went into the matter at considerable, length and after copiously quoting from the decision in the case of J. K. Cotton Spg.
& Wvg.
Mills case (supra) the High Court found it difficult to agree with the reasoning of the Industrial Court that the work of maintaining the garden was not a part of the ordinary work of a cotton textile mtill.
Earlier in the course of its judgment the High Court, after referring to the definitions of the term "employee" in section 3(13) and of the word "industry" in section 3(19) of the Act had observed : ".
The definition of the term 'industry ' is thus wide enough to include a workman employed in any calling, service, employment, handicraft, or industrial occupation or avocation of employees and it would not be correct to assume that simply because a workman happened to be engaged as a gardener, he would not fall within the definition of the term 'employee ' as given in the Bombay Industrial Relations Act.
A garden when attached to a mill is an amenity that is provided to the workers employed in the mill and it is not necessary that an amenity should arise from a statutory requirement or obligation and it hardly makes any difference if the garden was provided for voluntarily or under a statutory obligation.
The activities in an undertaking suck as a textile mill are not confined purely to factory work of manufacturing textile fabric within the mill premises, but various other incidental and connected institutions such as hospital, a canteen, a playground and a garden might be maintained by the mill to provide amenities to its workers and these activities could be considered as the activities made in relation to and in the usual course of conducting the affairs of the mill.
Not merely within the turning of the wheels of the machine which, no doubt, is directly responsible for the production of the article for which the plant of the particular industry was installed and not merely in utilising the power to move the machine to action, the field of activities of the undertaking is restricted and exhausted, but there are many more varieties though allied and complementary activities which are being carried on by the management and which help, though in an indirect manner, in creat ing a healthy atmosphere of well being and cooperation amongst the workers by providing essential facilities such as means for treating of their ailments, for general entertainment and care not only of the workers but of the children who are left unattended while their parents are engaged in their work in the factory.
While, there 191 fore, construing the words 'in the course of ' and 'ordinarily a part of the undertaking ' we must give them a meaning which is natural and consistent with the working of a factory as it exists in the present times and while doing so, our approach should not be theoretical and academic but pragmatic and practical.
The activities that are usually conducted as a part of an undertaking by which not only workers participate in the actual running of the machinery but also activities which conduce to the smooth working of the plant as a whole must be considered to fall within the ambit of the definition.
We are, therefore, unable to agree with the contention of Mr. Patel that the application of the Act must be restricted to only those workers who are directly engaged in the manufacture of textile fabric." While commenting on the order of the Industrial Court where it is stated that the maintenance of gardens though a matter concerning health or welfare of the employees was not mandatory on the management of a cotton textile mill undertaking and hence the work of maintenance of a garden could not be said to be part of the ordinary work of such mill, the High Court observed that " an activity undertaken as a part of the undertaking and in the course of its conduct may be undertaken voluntarily or as a result of a statutory duty or obligation but what is necessary is that the activity must reasonably be attributable to the undertaking in its, usual and ordinary course in the conduct of the business or undertaking, and if that be so then such an activity could be considered as the activity of a, worker who would fall within the definition of employee within section 3(13) of the Act.
" It was, however, contended in the High Court on behalf of the present appellant that the garden in which the present respondents had been working as gardeners was not situated within the premises of the mill and that the garden area included office of some other concerns, a Government post office and a museum which was open to the public and, some quarters for workers as well as assistance and officers of the hospital.
The garden area, according to Mr. Patel who reprented the present appellants in the High Court comprised of the buildings just mentioned and the area round the caustic plant factory as well as the field at Dami Limda in respect of which an agreement had been entered into with the contractor for keeping the trees and plants in proper trim.
This contention having not been considered by the 192 Industrial Court the High Court, as already observed, sent the case back to the Industrial Court for a fresh decision in the light of the observations of the High Court.
In this Court Shri Desai on behalf of appellants contended that the High Court, while exercising its jurisdiction under article 227 of the Constitution, was not =powered to reverse the findings of the Industrial Court and the Labour Court because under that Article it could not perform the functions of an appellate or a revisional court.
On the merits also he contended that having regard to section 2(3) of the Act read with the notification dated May 30, 1939, the Act only applied to cotton spinning and cotton weaving department, mechanics shops, dyeing and bleaching and printing departments and offices of the appellant, and to no other activities of the appellant company.
The counsel further contended that cis.
(13) and 14(e) of section 3 of the Act have to be road together and when so read they could not take within their fold a person employed by an independent contractor because such a person could by no means be considered as an employee of the appellant company unless the work done by him can be described as "ordinarily part of the textile undertaking".
While developing this point the learned counsel said that the word "ordinarily" occurring in the context "work which is ordinarily a part of the undertaking" in section 3 (14) (e) conveys the idea that the work should be in the line or in the regular or norm* course of the textile undertaking or any part of it.
The work 'it was explained, should be such as, in the regular or normal course, is part and parcel of the textile undertaking and not merely having some sort of incidental connection with the same.
The work of gardening, added the counsel, cannot be considered to have done in "execution" of any "work" which is "ordinarily" part of the textile undertaking.
Before considering these points it would not be out of place to mention that in the certificate of fitness granted by the High Court there is no indication about the precise point or points which induced the High Court to certify the case to be fit for appeal under cl.(c) of article 133(1).
This clause though couched in general terms is intended to apply to special cases in which the question raised is of such great public or private importance as deserves appropriately to be authoritatively settled by this Court.
This clause of course does not in terms say so but it has always been so construed.
The question whether or not to certify a given case to be fit for appeal under this clause is a matter for the judicial discretion of the High Court.
The word "certify" used in this clause suggests that the High Court is expected to apply its mind before certifying the case to be fit for appeal.
The mere grant of a certificate would, however, not preclude this Court from determining whether the conditions pre requisite for the grant are 193 satisfied.
It is, therefore, always desirable and expedient for the High Court to give its reasons for granting the certificate.
That would assist this Court better in appreciating if the conditions pre requisite are satisfied.
In the application for certificate in the present case a number of grounds were stated for securing it.
We are unable to find from the certificate as to which ground was considered by the High Court to be important enough to justify the certificate.
Now, in this case the respondents in fact questioned before us the competence of the High Court to grant the certificate of fitness but the objection raised by Shri Shukla was based only on the Submission that Art 133 is inapplicable because the impugned order is not a final order, We may first deal with this preliminary objection.
Article 227 of the Constitution no doubt does not confer on the High Court power similar to that of an ordinary court of appeal.
The material part of this Article substantially reproduces the provisions of section 107 of the Government of India Act, 1915 except that the power of superintendence has been extended by this Article to Tribunals as well.
Section 107 according to preponderance of judicial opinion clothed the High Courts with a power of judicial superintendence apart from and independently of the provisions of the other laws conferring on them revisional jurisdiction The power under article 227 of the Constitution is intended to be used sparingly and only in appropriate cases, for the purpose of keeping the subordinate courts and tribunals within the bounds of their authority and, not for correcting mere errors: see Naryan Singh vs A mar Nath (1).
At this stage we consider it proper to refer to some of the judicial pronouncements by this Court with regard to the right of appeal under article 133 from interlocutary orders.
In Tarapur & Co. vs M/s. V/O Tractors Export(2) it was observed that an order of the High Court in appeal which does not dispose of the suit but merely refuses to grant an interim injunction is not a final order within the meaning of article 133 even though as a result thereof the pending suit as framed may become infructuous requiring amendment of the plant.
On the other hand, an order dismissing a writ petition challenging industrial award which disposes of only one of the items of a charter of demands by the workmen, leaving the rest of the items to be adjudicated by a subsequent award was held in Asbestos Cement Ltd. vs Savarkar(3) to be a final order in a civil proceeding and, therefore, appealable under article 133.
Under article 226 of the Constitution it may in this connection be pointed out the High Court does not bear an appeal or a revision : that court is moved to interfere after (2) [1969] 2 S.C.R. 699.
(1) ; (3) ; 194 bringing before itself the, record of a case decided by or pending before a court, a tribunal or an authority, within its jurisdiction.
A decision in the exercise of this extraordinary jurisdiction which finally disposes of the proceedings is a final order, in an original proceeding.
An appeal or a revision on the other hand is generally.
considered to be a continuation of the original suit or proceeding and in a case, where the High Court deals with an appeal or a revision, finality for the purpose of article 133 must attach to the whole of the matter so that after the decision of the High Court the matter is not a live one.
, (see Ramesh vs Ganda Lal(1) The impugned order before us was made by the Gujarat High Court on an application under article 227 of the Constitution, the prayer in that application being, to remove the record of the case of the High Court "and after examining the same" (a) to quash the order and judgment of respondent No. 2 at Annexure 'B ' and (b), to direct respondent No. 2 to dispose of the appeal of the petitioner according to law." Now, in some, High Courts article 227 is utilised for the purpose of securing relief by way of writs or directions in the nature of writs more accurately contemplated by article 226 of the Constitution : (Ramesh vs Ganda Lal(1) and in some this Article is invoked for getting orders of tribunals revised just as section 115, C.P.C. is utilised for revision of orders of subordinate courts : (Surinder Nath vs Stiphen ( 2 ) (P) Ltd.
As such power under article 227 may also be exercised suo motu.
In the present case article 227 appears to us to have been used in effect as a substitute for article 226 for seeking a direction in nature of a writ for quashing the orders of the subordinate tribunals.
At least it appears that the proceeding before the High Court was so treated by all concerned.
We should, however, not be understood to express our approval of the use of article 227 for seeking relief by way of writs or directions in the nature of writs for which purpose article 226 is expressly and in precise language designed.
From that point of view if otherwise the High Court, while disposing of a petition under article 227, finally settles some points affecting the rights of the parties then to that extent the impunged order may be considered to operate as a final order just as an order made under article 226 would.
As to whether the High Court has jurisdiction to make the impugned order while exercising its power under article 227 will depend on our conclusion when considering the merits of the case.
Coming to the merits of the case we should like first to reproduce the notification dated May 30, 1939 and the definitions of the word "employee" and "employer" so far as relevant for our purpose as contained in the Act.
The notification reads : (1) A.T.R. at 1449.
(1) ; 195 "BOMBAY CASTEL, 30th May, 1939 BOMBAY INDUSTRIAL DISPUTES ACT, 1939 No. 2847/34 A.
In exercise of the powers conferred by sub section (3) of Section 2 of the Bombay Industrial Disputes Act, 1938 (Bom.
XXV of 1938), and in supersession of Government Notification in the Political and Service Department No. 2847/34 2 dated the 14th March, 1939, the Government of Bombay is pleased to direct that the provisions of the Act which have been extended to the Province of Bombay under Government Notification in the Political and Services Department No. 2847/34 1, dated the 14th March, 1939, shall apply to the cotton Textile Industry as specified below: (a) All concerns using power and employing twenty or more workers which are engaged in cotton spinning; (b) all concerns using power and employing twenty or more workers which are engaged in cotton weaving with or without an admixture of silk, rayon, artificial silk or one or more of these; (c) all mechanics shops attached to and (all dyeing bleaching and printing departments, whether situated within or outside the precincts, of and forming integral part of) the concerns falling under clause (a) or (b).
(d) All the offices, whether situated within or outside the precincts of the concerns falling under clause (a) or (b)." "Employee" and "employer" so far as relevant for our purpose ,ire defined as "3.
In this Act unless there is anything repugnant in the subject or context (13) 'employee ' means any person employed to do any skilled or unskilled work for hire or reward in any industry, and includes (a) a person employed by a contractor to do any work for him in the execution of a contract with an employer within the meaning of sub clause (e) of clause (14); (14) 'employer ' includes (e) where the owner of any undertaking in the course of or for the purpose of conducting the undertaking 196 contracts with any person for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the undertaking, the owner of the undertaking." Shri Desai on behalf of the appellant submitted that the respondents in this Court who were gardeners employed by a contractor cannot fall within the definition of the word employee as contained in section 14(e) of the Act.
He further contended that the notification issued under the Act extending its applicability to the textile undertaking does not take within its fold the respondents who are not directly connected with any part of the activity with which the appellant textile industry is directly concerned.
In support of his contention he relied on some decided cases.
The first decision to which our attention was drawn is reported as Kesar Lal Narsing Bhai vs Mls.
Calico Printing Ltd.(1).
This is a decision by the Labour Appellate Tribunal of India, Bombay and the present appellant was a respondent in that case.
There, the gardeners who used to work outside the gate of the factory and had been employed through a contractor had applied under section 78(1 ) (A) (c) of the Act for a declaration from the first Labour Court that the mill 's failure to pay wages and Dearness Allowance in accordance with the Standardisation Award amounted to an illegal change.
The Labour Court had granted their application but the Industrial Court on appeal had reversed that decision.
The employees took the matter on further appeal to the Appellate Tribunal but without success.
In that case the employees had wrongly asserted in their applications that they were direct employees of the mills in question and the relief claimed was based on this erroneous assertion.
The Standardisation Award by which the company was bound, it is pertinent to point out, was given only in respect of those persons who had been employed directly for the purpose of looking after the garden of, the factory proper.
it would thus be obvious that the employees ' claim there was liable to fail on the short ground that they were not direct employees as wrongly claimed by them and that the relief under the award was confined to direct employees only.
But this apart, it is further clear from the decision of the Appellate Tribunal that under the agreement with the contractor there the latter had been employed for the purpose of looking after the garden not within the factory compound proper but beyond it.
Indeed, the contractor 's obligation to look after the garden extended further beyond even that area.
It is in this context and background that the Appellate Tribunal observed in the concluding part of its order that "statutory definition of an employee in our opinion cannot be invoked by a gardener who has been employed through a contractor for the work as undertaken here." (emphasis supplied).
This decision, (1) 1955 Industrial Court Reporter 1105.
197 therefore, does not assist us on the precise question raised.
The next decision relied upon by Mr. Desai is reported as Hakim Singh vs J. C. Mills Ltd.(1).
In that case the mills had employed a contractor to supply packing material.
The contractor because of the nature, of his work was given a room in the mills premises for preparing a particular packing material.
An employee of the contractor applied to the Industrial Court for relief under the pro visions of the Act.
It was held that he could not be deemed to be an employee of the mills because the work which was carried on by the employer of the petitioner was not a part of the industrial undertaking.
While commenting on the scope of section 3 (13) (a) and section 14(e) of the Act which define the words "employee" and " employer", it was said that for the purpose of these provisions, there must be an industrial undertaking owned by somebody ' some work, which is ordinary part of the undertaking must have been entrusted by the owner to the contractor: that contractor must be employed an employee ' that employee can then by the combined operation of these provisions insist upon being treated as employee of the owner himself, the obvious idea behind this scheme being that the owner of an industrial undertaking should not be allowed to evade responsibilities towards his employees which are imposed by the labour laws, by entrusting a part or whole of the undertaking to a contractor.
The actual decision of this case is on different facts and is clearly not of much help though the observations regarding the purpose of the provisions of the definitions admit of no controversy.
Reliance was further placed by Shri Desai on the decision of this Court in Messrs Godavari Sugar Mills Ltd. vs D. K. Worlikar(2) where a notification applicable to the manufacture of sugar and its by products was held not to cover the head office of the sugar mills at Bombay and the employees engaged there, when the head office was Separated from the factories by, hundreds of miles.
The notification was held not to cover sugar industry as such Shri Desai also sought support from Begibhai M. Chokshi vs Ahmedabad Manufacturing & Calico Printing Co. Ltd. (3 ) (a decision of the Industrial Court, Bombay) which dealt with running of a retail shop; New India Tannis vs Aurora Singh Moibi ( 4 ) a case of doing repairs to the machinery of the factory and from section M. Ghose vs National Street & Metal Works Ltd.(5) a case of an employee of a contractor engaged to paint the premises.
Both the Calcutta.
decisions are under the Workmen 's Compensation Act.
(1) [1963] M.P.L.J.714.
(2) ; (3) (4) A.I.R. 1947 Cal.
(5) A.t.
R. 198 The respondents ' learned counsel, apart from urging that the High Court has sent the case back for deciding the nature of work done by the malis in this case and that, there are, tie appellant cannot appropriately ask this Court to determine these questions which are awaiting decision by the Industrial Court, also relied on Basti Sugar Mills Ltd. vs Ramjagar(1) and on J. K. Colton Spg. & W. vs Mills (supra).
In the former case the respondents there employed by a contractor to remove press and from the sugar factory were held to be workmen employed by the factory because removing press.
mud was considered ordinarily to be a part of the sugar industry.
The latter case is an authority for the proposition that an employee engaged in any work or operation which is incidentally connected with the main industry is a workman if other requirements of section 2(s) of the Industrial Disputes Act, 14 of 1947 ,are satisfied and that the malis in that case were workers within the meaning of section 2 of U.P. Industrial Disputes Act, 28 of 1947.
The bungalows and gardens on which the malis in that case worked were a kind of amenity supplied by the mills to its officers and on this, reasoning the malis were held to be engaged in operations incidentally connectd with the main industry carried on by the employer.
It was by relying on the ratio of this decision that the High Court in the present case came to the conclusion that the workers in order to come within the definition of "employee" need not necessarily be directly connected with the manufacture of textile fabrics.
This decision.
is binding on us and indeed Shri Desai also fairly accepted its ratio.
He only contended that the malis employed by a contractor unless, directly connected with the textile operations cannot get the benefit of this decision.
In our view on the conclusions of the High Court which have not been shown to be erroneous justifying interference it is not possible to reverse its decision on the basis of the abstract submission advanced by Shri Desai.
As observed in J. K. Cotton Spg. & Wvg.
Mills case (supra) the problem has to be looked at from the considerations of social justice which has become an integral part of our industrial law.
This concept of social justice has a comprehensive sweep and it is neither pedantic nor one sided but, is founded on socioeconomic equality.
It demands a realistic and pragmatic approach for resolving the controversy between capital and labour by weighing it on an even scale with the consciousness that industrial operations in modem times have become complex and complicated and for the efficient and successful functioning of an industry various amenities for those working in it are deemed as essential for a peaceful and healthy atmosphere.
The High Court has left open for the decision by the Industrial Court the question as to the nature of the work done by the (1) [1964]2 S.C.R. 838.
199 respondents for determining whether or not, in view of the fact that they are employed through a contractor and not directly, their case falls within section 3(13).
This is what the High Court has said "It was urged by Mr. Patel that the garden in which the petitioners were working as gardeners was not situated within the premises of the mill and that the garden area included a large area of offices of some other concerns, a Government Post Office and Museum which were open to public and some quarters for workers as well as assistants and officers of a hospital.
It was also urged by Mr. Patel that the garden area comprised of the above buildings and the area round the caustic plant factory as well as the field at Dani Limda in respect of which an agreement was entered into with the contractor for keeping the trees and plants in proper trim.
It appears that this contention made on behalf of the mills was not considered by the Industrial Court as it appears from para 7 of the order of the Industrial Court because according to the Industrial Court, looking to the nature of the, work done by the petitioners and to the fact that they were not directly employed by the employer but through a contractor, they could not be covered within the scope of section 3 (13) of the Bombay Industrial Relations Act.
Since this contention has not been considered by the Industrial Court, we do not wish to express any opinion as regards the merits of this contention and it would be open to Respondent No. 1 to raise the contention before the Industrial Court which will decide on the merits of the contention if raised.
Subject to this, the order of the Second Labour Court Ahmedabad dated 9th August, 1963 passed in Application No. 2005 of 1962 and the order of the Industrial Court, Ahmedabad dated 5th February, 1964 passed in Appeal (I.C) No. 123 of 1963 must be quashed and set aside and we direct that the matter should now be decided by the Industrial Court in the light of the observations made above 200 There is no cogent ground why this matter should be, decided by this Court and not by the Industrial Court in the normal course as directed by the High Court, In our opinion the order of the High Court is legally correct and is also eminently.
just and fair.
We are unable, therefore, to.
agree with Mr. Desai that this order requires any intereference.
The principle followed by the High Court is the one which was laid down by this Court in J. K. Cotton Spg. & Wvg.
Mills case (supra).
The decisions of the Labour Court and the Industrial Court were based on misconception of the legal position and the High Court was within its authority to interfere under article 227 of the Constitution to quash them.
The appeal accordingly fails and is dismissed with costs.
G.C. Appeal dismissed.
| The appellant vs as convicted by the Sessions Judge of offences under sections 148,323 and 302 I.P.C.
The High Court maintained his conviction and confirmed the sentence to death.
in appeal by special leave to this Court it was contended that (i) the evidence of the eye witnesses went against the medical evidence and thereof the former was wrongly relied on by the courts below; (ii) the evidence of the three eye witnesses on which the conviction of the appellant was based was contradicted by the F.I.R. lodged by S, one of the victims of the incident and therefore should not have been relied on; and (iii) the sentence of death passed against the appellant was excessive.
Dismissing the appeal, HELD:(i) The fact remained that an arrow was actually found ,underneath A 's dead body and according to the doctor the injury on the ,deceased could be caused by that arrow.
The mere fact, therefore that in the opinion of the doctor the arrow with the hook, unless skillfully pulled out of the wound was likely to cause more damage was not a sufficiently strong factor to reject the testimony of the three eye witnesses believed by the courts below and about whose trustworthiness there could 'be no reasonable doubt.
(ii)The F.I.R. could only discredit the testimony of S whose evidence had not been relied upon to support the appellant 's conviction.
The F.I.R. could by no means be utilised for contradicting or discrediting the other witnesses who obviously could not have any desire to spare the real culprit and to falsely implicate the appellant.
The evidence of the eye witnewes believed by the two courts appeared to be free from any serious infirmity justifying its rejection.
The case was obviously not one in which any reasonable doubt could be cast on the testimony of the eye witnesses on the mere ground that S who apparently in his attempt to save himself from the fierce indiscriminate assault by the assailants was not able carefully to see and remember as to in what manner and 'by what weapon his parents and eldest brother had been killed.
(iii)The relevant considerations in determining the sentence, broadly stated, include the Motive for, and the magnitude of, the offence and the manner of its commission.
In this case the victims of the assault had given no offence to the appellant or his associates.
They were actually runni ng in panic on seeing the mob, to save themselves.
The commission of offences motivated only by the fact that the victim professes a different religious faith could not be treated with leniency.
|
ivil Appeal No. 2368 of 1986 Etc. 656 From the Judgment and Order dated 30.5.1986 of the Delhi High Court in CW No. 1295 of 1986.
K.K. Venugopal, A.K. Ganguli, Yogeshwar Prasad, P.R. Seetharaman, S.K. Gupta and A.K. Srivastava for the Appel lants.
Soli J. Sorabjee, Attorney General, Kapil Sibbal, Addi tional Solicitor General.
G.L. Sanghi, section Ganesh, Mrs. Sushma Suri, EMS Anam, Atul Namda.
Aman Vachher, S.K. Mehta, Kailash Vasdev and S.R. Srivastava for the Respondents.
The Judgment of the Court was delivered by S.C. AGRAWAL, J.
The common question which arises for consideration in these appeals, by special leave, and the writ petition filed under Article 32 of the Constitution is, whether a person who was inducted as a tenant in premises, which are public premises for the purpose of the (hereinafter referred to as the 'Public Premises Act '), and whose tenancy has expired or has been terminated, can be evicted from the said premises as being a person in unautho rised occupation of the premises under the provisions of the Public Premises Act and whether such a person can invoke the protection of the Delhi Rent Control Act, 1958 (hereinafter referred to as the 'Rent Control Act ').
In short, the ques tion is, whether the provisions of the Public Premises Act would override the provisions of the Rent Control Act in relation to premises which fall within the ambit of both the enactments.
Civil Appeals Nos. 2368 and 2369 of 1986 relate to the premises which are part of a building situated at 5 Parlia ment Street, New Delhi.
The said building originally be longed to Punjab National Bank Ltd., a banking company.
Ashoka Marketing Ltd. (Appellate No. 1 in Civil Appeal No. 2368 of 1986) and M/s Sahu Jain Services Ltd. (Appellant No. 1 in Civil Appeal No. 2369 of 1986) were tenants of premises located in the said building since July 1st, 1958.
As a result of the enactment of the Banking Companies (Acquisi tion and Transfer of Undertakings) Act.
1970 (hereinafter referred to as the 'Banks Nationalisation Act '), the under taking of the Punjab National Bank Ltd., was transferred and vested in Punjab National Bank a body corporate constituted under the provisions of the said Act and the aforesaid appellants became the tenants of Punjab National Bank.
By notices dated May 18, 1971 issued under Section 106 of the Transfer of Property Act, the tenancies of both the appel lants were terminated by 657 Punjab National Bank, with effect from, November, 30, 1971.
Thereafter, the said Bank initiated proceedings under the Rent Control Act against both the appellants.
In those proceedings an objection was raised by the said appellants that proceedings for eviction under the Rent Control Act were not maintainable in view of the provisions contained in the Public Premises Act.
During the pendency of the said proceedings under the Rent Control Act, proceedings were initiated by the Estate Officer against the appellants under the provisions of the Public Premises Act and while the said proceedings under Public Premises Act were pending the earlier proceedings initiated under the Rent Control Act were dismissed by the Additional Rent Controller, Delhi, by orders dated August 6, 1979.
In the proceedings, under the Public Premises Act, the Estate Officer passed orders for eviction against the appellants and the appeals filed by the appellants against the said orders of the Estate Officer were dismissed by the Additional District Judge.
Delhi.
The appellants filed writ petitions under Article 226 of the Constitution, in the Delhi High Court.
The said writ peti tions were dismissed by the High Court by orders dated May 30, 1986.
Aggrieved by the said orders of the High Court, the appellants have filed these appeals after obtaining special leave to appeal.
Civil Appeal No. 3725 of 1986 relates to an office room in the Allahabad Bank Building situated at 17, Parliament Street, New Delhi.
The said building belongs to Allahabad Bank, a body corporate constituted under the provisions of the Banks Nationalisation Act.
The said premises were let out to Pt.
K.B. Parsai, the appellant in this appeal, for a period of three years with effect from, February 1, 1982.
After the expiry of the said period eviction proceedings under the provisions of the Public Premises Act were initi ated to evict the appellant and in those proceedings the Estate Officer passed an order dated March 29, 1986.
The appellant filed a writ petition under Article 226 of the Constitution, wherein he challenged the validity of the order passed by the Estate Officer.
The said writ petition was dismissed by the Delhi High Court by order dated August 7, 1986.
The appellant has filed this appeal against the said decision of the Delhi High Court after obtaining Spe cial Leave to Appeal.
Writ Petition No. 864 of 1985, relates to premises in the building located at 10, Darya Ganj, New Delhi.
The said building originally belonged to Bharat Insurance Company Limited, as Insurance Company which was carrying on life insurance business.
M/s Bennett Coleman & Co. Ltd., (peti tioner No. 1 in the writ petition) was in occupation of a part of the said property as a tenant under M/s Bharat 658 Insurance Co. Ltd. since 1948.
The life insurance business was nationalised under the whereby the Life Insurance Corporation was established and the life insurance business carried on by the various insurance companies, including M/s Bharat Insurance Company Ltd., was nationalised and vested in the Life Insurance Corporation.
As a result petitioner No. 1 became a tenant of the Life Insurance Corporation.
The Life Insurance Corpora tion gave a notice under Section 106 of the Transfer of Property Act terminating a tenancy of petitioner No. 1 with effect from, August 31, 1953 and thereafter proceedings for eviction were initiated against petitioner No. 1 under the provisions of the Public Premises Act and notices dated December 15, 1984 were issued by the Estate Officer under Section 4(1) and Section 7(3) of the Public Premises Act.
Feeling aggrieved by these notices the petitioners have filed the writ petition.
Before we proceed to deal with the submissions of the learned counsel for the appellants in the appeals and for the petitioners in the writ petition (hereinafter referred to as 'the petitioners ') it would be relevant to advert to the legislative history of Public Premises Act.
The Public Premises Act was preceded by two such enact ments.
The first enactments was the Government Premises (Eviction) Act, 1950 (hereinafter referred to as 'the 1950 Act ') which was enacted by Parliament to provide for the eviction of certain persons from Government premises and for certain matters connected therewith.
It was confined, in its application, to premises (a building or a part of a build ing) belonging to or taken on lease or requisitioned by the Central Government and it empowered the competent authority tO evict a person in unauthorised occupation of such prem ises after issuing a notice to such person.
The 1950 Act did not define the expression "unauthorised occupation" and it also did not prescribe the procedure to be followed by the competent authority before passing the order of eviction.
There was a provision for appeal to the Central Government against the order of the competent authority.
The 1950 Act was declared as unconstitutional by the Calcutta High Court (in Jagu Singh vs M. Shaukat Ali, and by the Punjab High Court (in Satish Chander & Anr.
vs Delhi Im provement Trust, Etc., AIR 1958 Punjab 1) on the ground that it imposed unreasonable restriction on the fight of the citizens to acquire, hold and dispose of property guaranteed under Article 19(1)(f) of the Constitution, and by the Allahabad High Court (in Brigade Commander, Meerut Sub Area vs Ganga Prasad, on the ground that it was violative 659 of the rights to equality guaranteed under Article 14 of the Constitution.
Thereupon Parliament enacted the Public Premises (Evic tion of Unauthorised Occupants) Act, 1958 (hereinafter referred to as 'the 1958 Act ').
In the 1958 Act, the defini tion of Public Premises was enlarged to include, in relation to the Union Territory of Delhi, premises belonging to Municipal Corporation of Delhi, or any municipal committee or notified area committee and premises belonging to Delhi Development Authority.
In the 1958 Act, the expression "unauthorised occupation" was defined.
It also laid down the procedure to be followed by the Estate Officer for evicting a person in unauthorised occupation of public premises and it made provision for filing an appeal against every order of the Estate Officer before the District Judge or such other Judicial Officer in that district of not less than ten years standing as the District Judge may designate in that behalf.
In Northern India Caterers Private Limited vs The State of Punjab & Anr., ; Section 5 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act, 1959 was held to be void by this Court on the ground that the said provision conferred an additional remedy over and above the remedy by way of suit and that by providing two alternative remedies to the Government and in leaving it to the unguided discretion of the Collector to resort to one or the other and to pick and choose some of those in occupa tion of public properties and premises for the application of the more drastic procedure under Section 5, the said provision was violative of Article 14 of the Constitution.
The provisions contained in the Punjab Act were similar to those contained in the 1958 Act.
Keeping in view the deci sion of this Court in Northern India Caterers Private Limit ed 's case (supra), Parliament enacted Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1968 whereby the 1958 Act was amended and Section 10E was intro duced and a bar was created to the jurisdiction of civil court to entertain any suit or proceeding in respect of eviction of any person in unauthorised occupation of any public premises or the recovery of the arrears of the rent or damages payable under the provisions of the 1958 Act.
The Delhi High Court (in P.L. Mehra etc.
vs D.R. Khanna, etc., AIR 1971 Delhi 1)held that whole of the 1958 Act was void under Article 15(2) being violative of the provisions of Article 14 of the Constitution and the amendment of 1968 was ineffective This led to the enactment of the Public Premises Act by Parliament in 1971.
It was brought into effect from 16th September, 1958, 660 the date on which the 1958 Act came into force.
The provi sions of the Public Premises Act are similar to those con tained in the 1958 Act.
The definition of 'public premises ' contained in Section 2(e) of the Public Premises Act has been widened so as to include premises belonging to or taken on lease by or on behalf of a company, as defined in Section 3 of the , in which not less than fifty one per cent of the paid up capital is held by the Central Government as well as premises belonging to or taken on lease by or on behalf of any corporation (not being a compa ny, as defined in Section 3 of the in 1956, or a local authority) established by or under a Central Act and owned and controlled by the Central Government.
It contains certain additional provisions, providing for offences and penalties (Section 11), liability of heirs and representa tives (Section 13) recovery of rent etc.
as an arrear of land revenue (Section 14) and bar of jurisdiction of Courts (Section 15).
The validity of the Public Premises Act was upheld by this Court in Hari Singh & Ors.
vs The Military Estate Officer & Anr., 15.
The Public Premises Act was amended in 1980 by the Public Premises (Eviction of Unauthorised Occupants) Amend ment Act, 1980, whereby the definition of 'public premises ' in Section 2(e) was amended to include premises belonging to or taken on lease by or on behalf of certain autonomous and statutory organisations, viz., any University established or incorporated by any Central Act, any Institute incorporated by the , any Board of Trustees constituted under the major Port Trusts Act, 1963, and the Bhakra Management Board and as well as premises belonging to or taken on lease by any Company which is subsidiary of a Company as defined in Section 3 of the in which not less than fifty one per cent of the paid up capital is held by the Central Govern ment.
By the said Amending Act of 1980, the total period taken in eviction proceedings was also sought to be cur tailed by reducing the period for showing cause against notice of eviction, the period within which an unauthorised occupant should vacate the premises after eviction order has been passed and the period for filing an appeal against the order of an Estate Officer.
By the said Amending Act of 1980 provisions were also made, by inserting Sections 5A, 5B and 5C, to deal with the squatting or spreading of goods on or against or in front of any public premises and removal of unauthorised constructions or encroachments on public prem ises.
The Public Premises Act was further amended in 1984 by the Public Premises (Eviction of Unauthorised Occupants) Amendment Act, 1984 whereby certain further amendments were made to provide for increased penalties and 661 making the offences under the Act cognisable and to enable the Estate Officers to exercise their powers under the Act effectively.
As stated in the preamble, the Public Premises Act has been enacted to provide for the eviction of unauthorised occupants from public premises and, for certain incidental matters.
In Section 2, various expressions have been de fined.
The definitions of the following expressions which are of relevance are reproduced as under: "(c) "Premises" means any land or any building or part of a building and includes (i) the garden, grounds and out houses.
if any, appertaining to such building or part of a building, and (ii) any fitting affixed to such building or part of a building for the more beneficial enjoyment thereof;" "(e) "Public Premises" means (1) any premises belonging to, or taken on lease or requisi tioned by, or on behalf of, the Central Government, and includes any such premises which have been placed by that Government, whether before or after the commencement of the Public Premises (Eviction of Unauthorised Occupants) Amend ment act, 1980 under the control of Secretariat of either House of Parliament for providing residential accommodation to any member of the staff of that Secretariat; (2) any premises belonging to, or taken on lease by, or on behalf of, (i) any company as defined in Section 3 of the (1 of 1956) in which not less than fifty one per cent of the paid up share capital is held by the Central Government or any Company which is a subsidiary (within the meaning of the Act) of the first mentioned company, (ii) any corporation (not being a company as defined in Section 3 of the ( 1 of 1956), or a local authority) established by or under a Central Act and owned or controlled by the Central Government, 662 (iii) any University established or incorporated by any Central Act, (iv) any Institute incorporated by the Institutes of Tech nology Act, 1961 (59 of 1961); (v) any Board of Trustees constituted under the (38 of 1963); (vi) the Bhakra Management Board constituted under Section 79 of the Punjab Recoganisation Act, 1966 (31 of 1966) and that Board as and when renamed as the Bhakra Beas Management Board under Sub section (6) of Section 80 of the Act; and (3) in relation to the Union Territory of Delhi (i) any premises belonging to the Municipal Corporation of Delhi, or any municipal committee or notified area committee and (ii) any premises belonging to the Delhi Development Author ity, whether such premises are in the possession of, or leased out by the said Authority." "(g) "Unauthorised Occupation", in relation to any public premises, means the occupation by any person of the public premises without authority for such occupation, and includes the continuance by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been expired for any reason whatsoever." Section 3 makes provision for appointment by Central Govern ment of gazetted officer of Government or officers of equal rank of the statutory authority as Estate Officers.
Section 4 relates to issue of show cause against order of eviction and provides as under: "(1) If the Estate Officer is of opinion that any persons are in unauthorised occupation of any public premises and that they should be evicted, the Estate Officer shall issue in the manner hereinafter provided a notice in writing calling 663 upon all persons concerned to show cause why an order of eviction should not be made.
(2) The notice shall (a) specify the grounds on which the order of eviction is proposed to be made; and (b) require all persons concerned, that is to say, all persons who are, or may be, in occupation of, or claim interest in, the public premises , (i) to show cause, if any, against the proposed order on or before such date as is specified in the notice, being a date not earlier than seven days from the date of issue thereof; and (ii) to appear before the Estate Officer on the date speci fied in the notice alongwith the evidence which they intend to produce in support of the cause shown, and also for personal hearing, if such hearing is desired.
(3) The Estate Officer shall cause the notice to be served by having it affixed on the outer door or some other con spicuous part of the public premises and in such other manner as may be prescribed, whereupon the notice shall be deemed to have been duly given to all persons concerned.
(4) Where the Estate Officer knows or has reasons to believe that any persons are in occupation of the public premises, then, without prejudice to the provisions of subsection (3), he shall cause a copy of the notice to be served on every such person by post or by delivering or tendering it to that person or in such other manner as may be prescribed.
" Section 5 relates to eviction of unauthorised occupants and provides as under ' "(1) If, after considering the cause, if any, shown by any person in pursuance of a notice under Section 4 and any evidence produced by him in support of the same and after personal hearing, if any, given under clause (b) of sub 664 section (2) of Section 4, the estate officer is satisfied that occupation of public premises is unauthorised, the estate officer may make an order of eviction, for reasons to be recorded therein, directing that the public premises shall be vacated on such date as may be specified in the order, by all persons who may be in occupation thereof or any part thereof, and cause a copy of the order to be af fixed on the outer door or some other conspicuous part of the public premises.
(2) If any person refuses or fails to comply with the order of eviction on or before the date specified in the said order or within fifteen days of the date of its publication under sub section (1) whichever is later, the estate officer of any other officer duly authorised by the estate officer in this behalf may after the date so specified or after the expiry of the period aforesaid, whichever is later, evict that person from, and take possession of the public premises and may, for that purpose, use such force as may be neces sary." Section 5A provides for removal of unauthorised construc tions/structures or fixtures, cattle or other animal from public premises.
Section 5B deals with demolition of unau thorised constructions.
Section 5C empowers the Estate Officer to seal unauthorised constructions.
Section 6 pro vides for disposal of property left on public premises by unauthorised occupants.
Section 7 empowers the Estate Offi cer to require payment of rent or damages on account of use and occupation of public premises alongwith interest by the person found in unauthorised occupation.
Section 8 lays down that an Estate Officer shall, for the purpose of holding any inquiry under the Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying to suit in respect of certain matters, viz. summoning and enforcing the attendance of any person and examining him on oath, requiring discovery and production of documents; and any other matter which may be prescribed.
Section 9 provides for an appeal from every order of the Estate Offi cer in respect of any public premises passed under Sections 5, 5B, 5C and 7 to an appellate officer who shall be a district judge of the district in which the public premises are situated or such other judicial officer in the district of not less than ten years ' standing as the district judge may designate in this behalf.
It also prescribes the period of limitation for filing such appeals and also lays down that the appeal shall be disposed of by the appellate offi cer as expeditiously as possible.
Sections 10 attaches finality to the orders 665 made by an Estate Officer or appellate officer and provides that the said orders shall not be called in questions in any original suit application or execution proceeding and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under the Act.
Section 11 provides for offences and penalties and Section 11A lays down mat the offences under Section 11 would be treated as cognizable offences under the Code of Criminal Procedure, 1973.
Section 15 relates to bar of jurisdiction and it provides as under: "No court shall have jurisdiction to entertain any suit or proceeding in respect of (a) the eviction of any person who is in unauthorised occu pation of any such public premises, or (b) the removal of any building, structure of fixture or goods, cattle or other animal from any public premises under Section 5 A, or (C) the demolition of any building or other structure made, or ordered to be made, under Section 5B, or (cc) the sealing of any erection or work or of any public premises under Section 5 C, (d) the arrears of rent payable under sub section (1) of Section 7 or damages payable under sub section (2), or interest payable under sub section (2 A) of that section, (e) the recovery of (i) costs of removal of any building, structure or fixture or g.gods.
cattle or other animal under Section 5 A, or (ii) expenses of demolition under Section 5 B, or (iii) costs awarded to the Central Government or statutory authority under sub section (5) of Section 9, or (iv) any portion of such rent, damages, cost of removal, expenses of demolition or costs awarded to the Central Government or the statutory authority.
" 666 In exercise of the powers conferred by Section 18 of the Public Premises Act, the Central Government has made the Public Premises (Eviction of Unauthorised Occupants) Rule, 1971 (hereinafter referred to as the 'Public Premises Rules ').
Rule 5 of said Rules relates to holding of in quiries and Rule 9 relates to procedure in appeals.
We will first deal with the contentions urged by the learned counsel for the petitioners with regard to the scope of the definition of the expression 'Public Premises ' con tained in Section 2(e) and 'unauthorised occupation ', con tained in Section 2(g) of the Public Premises Act.
As mentioned earlier, the appeals relate to premises belonging to nationalised Banks, viz. Punjab National Bank and Allahabad Bank, constituted under the provisions of the Banks Nationalisation Act.
It has been urged by Shri Yogesh wer Prasad, that the premises belonging to a nationalised bank do not fall within the ambit of the definition of 'Public Premises ' contained in Section 2(e) of the Public Premises Act, for the reason that nationalised bank is not a company as defined in Section 3 of the and it is also not a corporation established by or under a Central Act.
The submission of the learned counsel for the respondent banks is that the nationalised bank is a corpora tion established by a Central Act, viz. the Banks Nationali sation Act, and the premises belonging to a nationalised bank are 'public premises ' under Section 2(e)(2)(ii) of the Public Premises Act.
The question which, therefore, requires to be considered is whether a nationalised bank is a corpo ration established by or under a Central Act and is owned or controlled by the Central Government.
The nationalised banks have been established under the Banks Nationalisation Act, wherein the nationalised banks have been described as 'corresponding new bank '.
In sub section (i) of Section 3 of the Banks Nationalisation Act, it has been provided that on the commencement of the said Act, there shall be constituted such corresponding new banks as are specified in the First Schedule.
In subsection (2) of Section 3, it is laid down that the paid up capital of every corresponding new bank constituted under sub section (1) shall, until any provision is made in this behalf in any scheme made under Section 9, be equal to the paid up capital of the existing bank in relation to which it is the corre sponding new bank.
Sub section(3) of Section 3 provides that the entire capital of the new bank shall stand vested in, and allotted to the Central Government.
Sub section (4) of Section 3 lays down that every corresponding new bank shall be a body corpo 667 rate with perpetual succession and a common seal with power, subject to the provisions of the said Act, to acquire, hold and dispose of property, and to contract, and may sue and be sued in its name.
From the aforesaid provisions contained in Section 3 of the Banks Nationalisation act it is evident that the nationalised banks have been established under the provisions of the said Act and the same are distinct juris tic persons with perpetual succession and the power to acquire, hold and dispose of property and to contract and having the right to sue and be sued in their own name and further that the entire capital of the said banks is vested in the Central Government, meaning thereby, that the said banks are owned by the Central Government.
Shri Yogeshwer Prasad has pointed out that, in view of Section 3(4) of the Banks Nationalisation Act, the nationa lised bank is a body corporate and not a corporation and that there is a distinction between a body corporate and a corporation inasmuch as a body corporate includes bodies, such as companies, co operative societies, etc., which are not corporations.
Reliance has been placed in this regard on the decision of Delhi High Court in Oriental Bank of Com merce and Another vs Delhi Development Authority and Anoth er, We find no substance in this contention.
In English law a corporation has been defined as "a body of persons or an office which is recognised by the law has having a personality which is distinct from the separate personalities of the members of the body or the personality of the individual holder for the time being of the office in question." (See Halsbury 's Laws of England, Fourth Edition, Volume 9, Para 1201).
Generally speaking, corporations are of two kinds; corporation aggregate and corporation sole.
A corporation aggregate has been described as an incorporated group of co existing persons and a corporation sole as an incorporated series of successive persons, (Salmond on Jurisprudence, 12th Edition P 308.
The distinctive feature of a corporation are that it has the capacity of continuous existence and succession, notwithstanding changes in its membership and it possesses the capacity of taking, holding and conveying property, entering into contracts.
suing and being sued, and exercising such other powers and priviledges conferred on it by law of its creation just as a natural person may (See S.S. Dhanoa vs Municipal Corporation, Delhi & Ors.
, ; Corporations aggregate may be public or private.
A public corporation is a corporation formed for a public purpose e.g. local government authori ties, and it is usually incorporated by a public general Act of Parliament.
A private corporation is a corporation formed for profit 668 e.g. a limited company, and it is usually incorporated under a statutory enactment.
After the second world war there has been development of a new pattern of public corporations in England as an instrument of planning in the mixed economy.
The general characteristics of such a public corporation is that it is normally created by a special statute; it has no shares and no shareholders either private or public, and its shareholder, in the symbolic sense, is the nation represent ed through Government and Parliament; the responsibility of the public corporation is to the Government, represented by the competent Minister and through the Minister to Parlia ment; the administration of the public corporation is en tirely in the hands of a board which is appointed by the competent Minister; and it has the legal status of a corpo rate body with independent legal personality.
(See W. Fried man: The New Public Corporations and the Law [1947] 12 Mod.
LR 234 236.) There is a similar growth of this type of public corporation in other countries.
This trend is also evident in our country since independence and a number of such public corporations have been constituted by Acts of Parliament.
The distinction between such a public corporation and a corporation generally known in law has been explained in the following observations of Denning L.J., as he then was: "The Transport Act, 1947, brings into being the British Transport Commission, which is a statutory corporation of a kind comparatively new to English law.
It has many of the qualities which belong to corporations of other kinds to which we have been accustomed.
It has, for instance, defined powers which it cannot exceed; and it is directed by a group of men whose duty it is to see that those powers are proper ly used.
It may own property, carry on business, borrow and lend money, just as any other corporation may do, so long as it keeps within the bounds which Parliament has set.
But the significant difference in this corporation is that there are no shareholders to subscribe the capital or to have any voice in its affairs.
The money which the Corporation needs is not raised by the issue of shares but by borrowings and its borrowing is not served by debentures; but is guaranteed by the Treasury.
If it cannot repay, the loss falls on the Consolidated Fund of the United Kingdom; that is to say, on the taxpayer.
There are no shareholders to elect the direc tors or to fix their remuneration.
There are no profits to be made or distributed." (Tamfin vs Hannaford, 669 Reference has already been made to the provisions of the Banks Nationalisation Act which show that the nationalised bank has been constituted as a distinct juristic person by the Act and it is owned by the Central Government.
There are other provisions in the Banks Nationalisation Act which show that the general superintendence, direction and management of the affairs of the business of the bank is vested in a Board of Directors constituted by the Central Government and the Central Government has the power to remove a person from the membership of the Board of Directors (Section 7(2) & 7(3) and in the discharge of its functions the Bank is to be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, give (Section 8).
This indicates that the nationalised bank has all the attributes of the new pattern of public corpora tion.
Merely because the expression 'body corporate ' has been used in relation to the nationalised banks in Section 3(4) of the Banks Nationalisation Act and the expression 'corpo ration ' has not been used, does not mean that the nationa lised bank is not a corporation.
The expression 'body corpo rate ' is used in legal parlance to mean a 'public or private corporation ' (Black 's Law Dictionary p. 159).
Shri Yogeshwer Prasad has urged that in order to consti tute a corporation there must exist persons, i.e. members, composing it, and that this element is missing in the natio nalised banks inasmuch as the Banks Natiolisation Act does not provide for any membership to these banks.
This conten tion is without any merit because, as noticed earlier, in the new pattern of public corporations which have developed, there are no shares and no shareholders, either public or private, and its shareholder, in the symbolic sense, is the nation represented through Government and Parliament.
A similar contention was raised before the High Court of Australia in the Bank of New South Wales & Ors.
vs The Commonwealth, in relation to the Common wealth Bank established as a body corporate by the Common wealth Bank Act, 1945.
While rejecting this contention, Latham C.J. has observed: "The Commonwealth Parliament has declared that the bank is a corporation and the Court must on this, as on many previous occasions, accept that the bank (though it has no corpora tors) exists as a new kind of juristic person." (p. 227) 670 Similarly Dixon J. has observed: "Although the Commonwealth Bank is declared to be a body corporate there are no corporators.
I see no reason to doubt the constitutional power of the Federal Parliament, for a purpose within its competence, to create a juristic person without identifying an individual or a group of natural persons with it, as the living constituent or constituents of the corporation.
In other legal systems an abstraction or even an inanimate physical thing has been made an artificial person as the object of rights and duties." (p. 36 1) It may also be mentioned that in R.C. Cooper vs Union of India, ; this Court, while referring to nationalised banks constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969, has treated the nationalised banks as corporations.
While construing the expression 'corporation ' in Section 2(e) (2)(ii) of the Public Premises Act it cannot be ignored that the object of the legislation in enlarging the defini tion of 'public premises ' in Section 2(e) is to make avail able the machinery of the Act for evicting unauthorised occupants not only from the premises belonging to the Cen tral Government but also from premises belonging to Compa nies, Corporations and statutory bodies in which the Central Government has a substantial interest.
Under Section 2(e)(2)(i) premises belonging to a company incorporated under the , in which not less than fifty one per cent of the paid up capital is held by the Central Government, are to be treated as public premises.
It could not be the intention of Parliament that premises belonging to public corporations whose entire paid up capital vests in the Central Government and who are the instrumentalities of State would be excluded from the ambit of the definition of 'public premises '.
In our opinion,.
therefore, the expres sion 'corporation ' in Section 2(e)(2)(ii) of the Public Premises Act would include public corporations of the new pattern constituted under the Central Acts wherein the entire paid up capital vests in the Central Government.
Shri Yogeshwere Prasad has placed reliance on the deci sion of this Court in S.S. Dhanoa 's case (supra) wherein this Court has considered the question whether the Co opera tive Store Ltd., a cooperative society registered under the Bombay Co operative Societies is a corporation established by or under a Cen tral, Provincial or State Act, for the purposes of clause Twelfth of Section 21 of the Indian Penal Code.
This Court has observed that a corporation established by or under an Act of legislature could only mean a body corporate which owes its existence and not merely its corporate status to the Act and a distinction has been drawn between a corpora tion established by or under an Act and a body incorporated under an Act.
It has been held that the Co operative Store Ltd., which is a society registered under the Bombay Co operative Societies Act, 1925, is not a statutory body because it is not created by a statute and that it is a body created by an act of a group of individuals in accordance with the provisions of a Statute.
This decision does not lend any assistance to the contention of Shri Yogeshwer Prasad.
In Oriental Bank of Commerce 's case (Supra) the over ruled question for consideration was, whether the Chairman of a nationalised bank is a public servant and sanction under Section 197 of Code of Criminal Procedure was neces sary to prosecute him.
M.L. Jain, J. has held that the nationalised bank is a body corporate and not a corporation within the meaning of clause Twelfth of Section 21 I.P.C. and, therefore, the Chairman of the nationalised bank is not a public servant under Section 21 I.P.C.
The learned Judge has further held that even if the nationalised bank is a corporation, the Chairman of the said bank is not in the service or pay of the bank and further (in the facts of the case) it could not be said that the Chairman was acting or purporting to act in the discharge of official duty.
Sachar, J. did not consider it necessary to deal with the question, as to whether the nationalised bank is a corporation because he was of the view that Section 197 Cr.
P.C. was not at tracted.
For the reasons mentioned earlier, the judgment of Jian, J. insofar as it draws a distinction between a 'body corporate ' and a 'corporation ' and laws down that the natio nalised bank, though a 'body corporate ' is not a corpora tion, cannot be upheld.
The other reason given by Jain, J. is that the nationalised bank is merely a personified insti tution having no members and is, therefore, not a corpora tion.
This view also cannot be sustained.
We have already pointed out that in order to constitute a corporation it is not necessary that there should be shareholders or members and that in the new pattern of public corporation that has developed there are no shareholders or members.
Keeping in view the provisions of the Banks Nationalisa tion Act we are of the opinion that the nationalised bank is a corporation established by a Central Act and it is owned and controlled by the 672 Central Government.
The premises belonging to a nationalised bank are public premises under Section 2(e)(2)(ii) of the Public Premises Act.
We are, therefore, unable to accept the contention of Shri Yogeshwar Prasad that premises belonging to a nationalised bank do not fall within the ambit of the definition of 'public premises ' contained in Section 2(e) of the Public Premises Act.
Shri Yogeshwer Prasad has also urged that 'public prem ises ' as defined in Section 2(e) of the Public Premises Act, must be confined to premises let out for residential pur poses only and should not cover premises let out for commer cial purposes and that if premises let out for commercial purposes are included, Section 2(e) would be rendered uncon stitutional as being violative of the provisions of Articles 14, 19(1)(g) and 21 read with Articles 39 and 41 of the Constitution.
The submission of Shri Yogeshwer Prasad is that a construction which would sustain the constitutionali ty of the provisions of Section 2(e) should be preferred over a construction which would render them constitutional.
We find no force in this contention.
There is no warrant for confining the scope of the definition of 'public premises ' contained in Section 2(e) to premises used for residential purposes only and to excluded premises used for commercial purposes from its ambit.
In Hari Singh vs Military Estate Officer, (Supra) a similar contention was advanced and it was argued that the expres sion 'premises ' in Public Premises Act would not apply to agricultural land.
This Court rejected that contention with the observation: "The word 'premises ' is defined to mean any land.
Any land will include agricultural land.
There is nothing in the Act to exclude the applicability of the Act to agricultural land.
" We are also unable to hold that the inclusion of prem ises used for commercial purposes within the ambit of the definition of 'public premises ', would render the Public Premises Act as violative.of the right to equality guaran teed under Article 14 of the Constitution or right to free dom to carry on any occupation, trade or business guaranteed under Article 19(1)(g) of the Constitution or the right to liberty guaranteed under Article 21 of the Constitution.
It is difficult to appreciate how a person in unauthorised occupation of public premises used for commercial purposes, can invoke the Directive Principles under Article 39 and 41 of the Constitution.
As indicated in the 673 statement of Objects and Reasons the Public Premises Act has been enacted to provide for a speedy machinery for the eviction of unauthorised occupants of public premises.
It serves a public purpose, viz. making available, for use, public premises after eviction of persons in authorised occupation.
The need to provide speedy machinery for evic tion of persons in unauthorised occupation cannot be con fined to premises used for residential purposes.
There is no reason to assume that such a need will not be there in respect of premises used for commercial purposes.
No dis tinction can, therefore, be made between premises used for residential purposes and premises used for commercial pur poses in the matter of eviction of unauthorised occupants of public premises and the considerations which necessitate providing a speedy machinery for eviction of persons in unauthorised occupation of public premises apply equally to both the types of public premises.
We are, therefore, unable to accept the contention of Shri Yogeshwer Prasad that the definition of public premises contained in Section 2(e) of the Public Premises Act should be so construed as to exclude premises used for commercial purposes from its ambit.
Shri A.K. Ganguli, has urged that a person who was put in occupation of the premises as a tenant and who was con tinued in such occupation after the expiry or the termina tion of his tenancy cannot be regarded as a person in unau thorised occupation under Section 2(g) of the Public Prem ises Act.
The submission of Shri Ganguli is that, the occu pation of a person who was put in possession as a tenant is juridical possession and such an occupation cannot be re garded as unauthorised occupation.
In support of this sub mission, Shri Ganguli has placed reliance on the decision of the Bombay High Court in Brigadier K.K. Verma & Anr.
vs Union of India & Anr., A.I.R. 1954 Bombay 358 which has been approved by this Court in Lallu Yeshwant Singh vs Rao Jag dish Singh & Ors., ; The definition of the expression 'unauthorised occupa tion ' contained in Section 2(g) of the Public Premises Act is in two parts.
In the first part the said expression has been defined to mean the occupation by any person of the Public premises without authority for such occupation.
It implies occupation by a person who has entered into occupa tion of any public premises without lawful authority as well as occupation which was permissive at the inception but has ceased to be so.
The second part of the definition is inclu sive in nature and it expressly covers continuance in occu pation by any person of the public premises after the au thority (whether by way of grant or any other mode of trans fer) under which he was allowed to occupy the premises has 674 expired or has been determined for any reason whatsoever.
This part covers a case where a person had entered into occupation legally under valid authority but who continues in occupation after the authority under which he was put in occupation has expired or has been determined.
The words "whether by way of grant or any other mode of transfer" in this part of the definition are wide in amplitude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act.
The definition of unauthorised occupation contained in Section 2(g) of the Public Premises Act would, therefore, cover a case where a person has en tered into occupation of the public premises legally as a tenant under a lease but whose tenancy has expired or has been determined in accordance with law.
Brigadier K.K. Verma & Anr.
vs Union of India & Anr.
(Supra) was decided under the provisions of the Government Premises (Eviction) Act, 1950, which did not contain the definition of the expression 'unauthorised occupation '.
In that case it has been held that under the Indian law, the possession of a tenant who has ceased to be a tenant is protected by law and although he may not have the right to continue in possession, after the termination of the tenan cy, his possession is juridical and that possession is protected by statute, and therefore, an erstwhile tenant can never become a trespasser and his possession cannot be regarded as unauthorised occupation.
The learned Judges have also observed that unless the legislature had given indica tion of a clear intention that by the expression 'unautho rised occupation ' it meant not only person who had no title at all but also persons who are titled at the inception and whose title came to an end, it would not be proper to give an interpretation to the expression 'unauthorised occupa tion ' which would run counter to the principles of law which have been accepted in this country.
After this decision the legislature intervened and introduced the definition of the expression 'unauthorised occupation ' in the , which defi nition has been reproduced in Section 2(e) of the Public Premises Act and in the said definition the legislature has taken care to make an express provision indicating that the expression 'unauthorised occupation ' includes the continu ance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoever.
In the circumstances the petitioners cannot derive any assistance from the decision of the Bombay High Court in Brigadier K.K. Verma 's case (supra).
675 Shri Ganguli has placed reliance on the decision of A.P. Sen, J. in Express Newspapers Pvt. Ltd. & Ors.
vs Union of India & Others, [1985] Suppt.
3 S.C.R. 382 and has submitted that in that case the learned Judge has held that cases involving relationship between the lessor and lessee fall outside the purview of the Public Premises Act.
We have carefully perused the said decision and we are unable to agree with Shri Ganguli.
In that case A.P. Sen, J. has observed that the new building had been constructed by the Express Newspapers Pvt. Ltd. after the grant of permission by the lessor, and, therefore, the Express Newspapers Pvt.
Ltd. was not in unauthorised occupation of the same within the meaning of Section 2(g) of the Public Premises Act.
It was also held by the learned Judge that the Express Building constructed by the Express Newspapers Ltd. with the sanction of lessor on plots Nos. 9 and 10 demised on perpetual lease can, by no process of reasoning, be regarded as public premises belonging to the Central Government under Section 2(e) of the Public Premises Act, and therefore, there was no question of the lessor applying for eviction of the Express Newspapers Pvt. Ltd. under the provisions of the Public Premises Act.
The aforesaid observations indicate that the learned Judge did not proceed on the basis that cases in volving relationship of lessor and lessee fall outside the purview of the Public Premises Act.
On the other hand the said observations show that the learned Judge has held that the provisions of the Public Premises Act could not be invoked in the facts of that case.
Another submission that has been urged by Shri Ganguli is that the question whether a tease has been determined or not involves complicated questions of law and the estate officer, who is not required to be an officer well versed in law, cannot be expected to decide such question and, there fore, it must be held that the provisions of the Public Premises Act have no application to a case when the person sought to be evicted had obtained possession of the premises as a lessee.
It is true that there is no requirement in the Public Premises Act that the estate officer must be a person well versed in law.
But, that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorised occupation of persons who obtained possession of the said premises under a lease.
Section 4 of the Public Premises Act requires issuing of a notice to the person in unauthorised occupation of any Public Premises requiring him to show cause why an order of eviction should not be made.
Section 5 makes provisions for production of evidence in support of the cause shown by the person who has been served with a notice under Section 4 and giving of a personal hearing by the estate officer.
Section 8 provides that an estate 676 officer, shall, for the purpose of holding any enquiry under the said Act have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying a suit in respect of the matters specified therein namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring discovery and production of documents; and (c) any other matters which may be prescribed.
Rule 5(2) of the Public Premises (Eviction of Unautho rised Occupants) Rules, 1971, requires the estate officer to record the summary of evidence tendered before him.
Moreover Section 9 confers a right of appeal against an order of the estate officer and the said appeal has to be heard either by the district judge of the district in which the public premises are situate or such other judicial officer in that district of not less than ten years ' standing as the dis trict judge may designate in that behalf.
In shows that the final order that is passed is by a judicial officer in the rank of a district judge.
A similar contention was raised before this Court in Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Others, ; wherein the validity of the provisions of Chapter VA of the Bombay Municipal Corporation Act, ' 1888 and the Bombay Government Premises (Eviction) Act, 1955 were challenged before this Court and the said contention was negatived.
Aligiriswami, J. speaking for the majority, has observed as under: "Even though the officers deciding these questions would be administrative officers there is provision in these Acts for giving notice to the party affected, to inform him of the grounds on which the order of eviction is proposed to be made, for the party affected to file a written statement and produce documents and be represented by lawyers.
The provi sions of the Civil Procedure Code regarding summoning and enforcing attendance of persons and examining them on oath, and requiring the discovery and production of documents are a valuable safeguard for the person affected.
So is the provision for appeal to the Principal Judge of the City Civil Court in the city of Bombay, or to a District Judge in the district who has got to deal with the 677 matter as expeditiously as possible, also a sufficient safeguard as was recognised in Suraj Mail Mehta 's case.
" Having dealt with the submissions of learned counsel for the petitioners on the applicability of the provisions of Public Premises Act, we may come to the main question in volved in these matters, namely, whether the provisions of the Public Premises Act override the provisions of the Rent Control Act.
For appreciating the submissions of the learned counsel on this question it is necessary to examine the provisions of both the enactments.
The relevant provisions of the Public Premises Act have already been set out.
We may briefly refer to the provisions of the Rent Control Act.
The Rent Control Act has been enacted by Parliament to provide for the control of rents and evictions and of rate of hotels and lodging houses and for the lease of vacant premises to Government, in certain areas in the Union Terri tory of Delhi.
It extends to the areas included within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board and to such urban areas within the limits of the Municipal Corporation of Delhi as are specified in the First Schedule to the Act (Section 1(2).
The expression 'premises is defined in Section 2(i) as under: "Premises means any building or part of a building which is or, is intended to be, let separately for use as a residence or for commercial use or for any other purpose, and in cludes: (i) the garden, grounds and outhouses, if any,, appertaining to such building or part of the building; (ii) any furniture supplied by the landlord for use in such building or part of the building; but does not include a room in a hotel or lodging house.
" Section 3, which excludes the applicability of the Act to certain premises, provide as under: "Nothing in this Act shall apply: (a) to any premises belonging to the Government; (b) to any tenancy or other like relationship created by a 678 grant from the Government in respect of the premises taken on lease, or requisitioned, by the Government Provided that where any premises belonging to Government have been or are lawfully let by any person by virtue of an agreement with the Government or otherwise, then, notwith standing any judgment, decree or order of any court or other authority, the provisions 'of this Act shall apply to such tenancy.
(c) to any premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees; or (d) to any premises constructed on or after the commencement of the Delhi Rent Control (Amendment) Act, 1988, for a period of ten years from the date of completion of such construction." Chapter II (Sections 4 to 13) contains provisions re garding rent including fixation of standard rent.
Chapter III (Sections 14 to 25) contains provisions for control of eviction, of tenants.
Section 14 gives protection to tenants against eviction and provides that an order for eviction of a tenant can be passed only on one or more of the grounds mentioned in clauses (a) to (1) of sub section (1).
Special provisions have been made for recovery of immediate posses sion of premises in Sections 14A to 14D in respect of cer tain classes of landlords.
Section 22 contains a special provision for recovery of possession of premises where the landlord is a company or a body corporate or a local author ity or a public institution if the premises are required for the use of employees of such landlord or, in the case of a public institution, for the furtherance of its activities.
In Chapter IIIA (Sections 25 A to 25 C) provisions have been made for summary trial of certain applications for eviction on the ground of bona fide requirement of the landlord.
Chapter IV (Sections 26 to 29) contains provisions relating to deposit of rent.
Chapter V (Sections 30 to 34) contains provisions relating hotels and lodging houses.
Chapter VI (Sections 35 to 43) contains provisions relating to appoint ment of controllers and their powers and functions and appeals.
Section 42 makes provisions for execution of orders passed by the Controller or in appeal, as a decree of civil court.
Section 43 attaches finality to the order passed by the Controller and the order passed in appeal.
Chapter VII (Sections 44 to 49) contains provisions regarding special obligations of landlords and 679 penalties.
Chapter VIII (Sections 50 to 57) contains miscel laneous provisions.
Under Section 50 jurisdiction of civil courts is barred in respect of matters specified therein.
Section 54 saves the operation of certain enactments, name ly, , the and the Delhi Tenants (Temporary Protection) Act, 1956.
On a comparison of the provisions of the Public Premises Act and the Rent Control Act it will be found that: 1.
By virtue of Section 1(2) of the Public Premises Act, the said Act is applicable throughout the territory of India, whereas, view of Section 1(2) of the Rent Control Act, the said Act is confined in its application to areas included within the limits of the New Delhi Municipal Com mittee and the Delhi Cantonment Board and to such urban areas within the limits of the Municipal Corporation of Delhi as are specified in the First Schedule and any other urban area included within the limits of the Municipal Corporation of Delhi to which provisions of the said Act are extended by the Central Government by notification in the Official Gazette.
(2) Under Clauses (c) of Section 2 of the Public Premises Act, the expression 'premises ' has a wider connotation and it includes open land as well as building or part of a building.
Under the Rent Control Act the expression 'prem ises ' as defined in clause (i) of Section 2 has a narrower connotation to mean any building or a part of building and it does not cover open land.
In view of the definition of the expression 'public premises ' contained in clause (e) of Section 2 of the Public Premises Act, the said Act, in addition to the premises belonging to or taken on lease or requisitioned by, or on behalf of, the Central Government, is applicable to premises belonging to or taken on lease by or on behalf of the compa nies and statutory bodies mentioned in clauses (2) and (3) of Section 2(e).
The Rent Control Act, on the other hand, is applicable to all premises except premises belonging to the Government or to any tenancy or other like relationship created by a grant from the Government in respect of the premises taken on lease, or requisitioned, by the Government (Section 3).
In view of the amendment introduced in Section 3 by the Delhi Rent Con 680 trol Act is not applicable to premises, whether residential or not, whose monthly rent exceeds three thousand and five hundred rupees and premises constructed on or after the commencement of the said Amendment Act, for a period of ten years from the date of completion of such construction.
The provisions of the Public Premises Act are applica ble to Public Premises in occupation of a person having no authority for such occupation, including a person who was allowed to occupy the public premises under a grant or any other mode of transfer and who has continued in occupation after the authority under which he was allowed to occupy that premises has expired or has been terminated.
The provi sions of the Delhi Rent Control Act are applicable only to persons who have obtained possession of the premises as tenants and whose tenancy is continuing as well as persons who after the expiration or termination of the tenancy have continued in occupation of the premises.
As a result of this comparison it can be said that certain premises, viz. building or parts of buildings lying within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board and in urban areas within the limits of the Municipal Corporation of Delhi, which belong to or are taken on lease by any of the companies or statuto ry bodies mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act and which are in occupation of a person who obtained possession of the said premises as a tenant and whose tenancy has expired or has been terminated but who is continuing in occupation of the same, would ex facie fall within the purview of both the enactments.
The question which, therefore, arises is whether the occupant of such premises can seek the protection available under the provisions of Rent Control Act and he can be evicted from the premises only in accordance with the said provisions and proceedings for eviction of such a person cannot be initiat ed under the provisions of the Public Premises Act.
Shri Venugopal and other learned counsel representing the petitioners have urged that the Rent Control Act is a self contained code providing for regulating the relation ship of landlords and tenants and it makes comprehensive provisions with regard to control of rents as well as evic tion of tenants and that the provision of the Rent Control Act, being special in nature insofar as lease hold proper ties in Delhi are concerned, would prevail over the provi sions of the Public 681 Premises Act which are in the nature of general provisions relating to eviction of unauthorised occupants from Govern ment premises in the whole country.
In support of this submission the learned counsel for the petitioners have placed reliance on Sections 22 and 54 and the non obstante clause contained in Section 14(1) of the rent Control Act.
It has also been urged by the learned counsel for the peti tioners that the Public Premises Act does not contain any machinery for the termination of the tenancy and that in view of the decision of this Court in V. Dhanapal Chettiar vs Yesodai Ammal, ; , the jural relationship of landlord and tenant can come to an end only on the pass ing of an order of eviction by a competent court in accor ding with the provisions of the Rent Control Act and that in the absence of an order of eviction under the provisions of the Rent Control Act no proceedings can be initiated against a person who came into occupation of the premises as a tenant and who is continuing in occupation of the said premises after the contractual tenancy has expired or has been terminated.
The learned Attorney General and Shri G.L. Sanghi, appearing on behalf of the respondents in the appeals, have urged that the Public Premises Act is in the nature of a special enactment making provision for speedy and expedi tious recovery of possession of public premises from persons in unauthorised occupation of the same whereas the Rent Control Act is general enactment regulating the relationship of landlord and tenant and since the Public Premises Act is a special enactment it would override the provisions of the Rent Control Act.
It has also been urged that the Public Premises Act is a later enactment, having been enacted in 1971, whereas the Rent Control Act was enacted in 1958, and, therefore, the Public Premises Act would prevail over the Rent Control Act.
It has been urged that Section 15 of the Public Premises Act which bars the jurisdiction of other Courts is in the nature of a non obstante clause which gives overriding effect to the provisions of the Public Premises Act.
The learned Addl.
Solicitor General, appearing for the respondents in the writ petitions, has adopted a different line of argument.
He has contended that the Public Premises Act had been enacted by Parliament in exercise of its legis lative power under Article 246(1) read with entries 32, 95 and 97 of List I of the Seventh Schedule to the Constitution whereas the Rent Control Act has been enacted by Parliament in exercise of its legislative power under Article 246(4) read with entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and since the Public Premises Act has been enacted in 682 exercise of the legislative power under Article 246(1) of the Constitution, it would prevail over the Rent Control Act enacted in exercise of legislative power under Article 246(4) of the Constitution.
At this stage, it may be mentioned that in Jain Ink Manufacturing Company vs Life Insurance Corporation of India & Another, ; decided by a bench of three Judges, it has been held that the Public Premises Act over rides the provisions of the Delhi Rent Control Act.
In that case it has been observed that the scope and object of the Public Premises Act is quite different from that of Rent Control Act and while the Public Premises Act operates in a very limited field in that it applies only to a limited nature of premises belonging only to particular sets of individuals, a particular set of juristic persons like Companies, Corporations or the Central Government, whereas the Rent Control Act is of much wider application and it applies to all private premises which do not fall within the limited exceptions indicated in Section 2 of the Public Premises Act and the object of the Rent Control Act is to afford special protection to all the tenants or private landlords or landlords who are neither a Corporation nor Government or Corporate Bodies.
It was, therefore, held that the Public Premises Act is a special Act as compared to the Rent Control Act and it overrides the provisions of the Rent Control Act.
The learned counsel for the petitioners have assailed the correctness of the said decision and have submitted that it needs reconsideration.
As regards rent control legislation enacted by the State legislatures the position is well settled that such legisla tion fall within the ambit of entries 6, 7 and 13 List III of the Seventh Schedule to the Constitution (See: Indu Bhushan Bose vs Rama Sundari Devi & Another, ; ; V Dhanpal Chettiar 's case (supra); Jai Singh Jairam Tyagi etc.
vs Mamanchand Ratilal Agarwal & Others, ; and Accountant and Secretarial Services Pvt. Ltd. & Another vs Union of India & Others, ; The Rent Control Act has been enacted by Parliament in relation to the Union Territory of Delhi in exercise of the legislative power conferred under Article 246(4) of the Constitution which empowers Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
The Public Premises Act deals with Government property as well as property belonging to other legal entities men tioned in clauses (2) 683 and (3) of Section 2(e) of the Public Premises Act.
In so far as it relates to eviction of unauthorised occupants from premises belonging to or taken on lease or requisitioned by or on behalf of the Central Government the Public Premises Act would fall within entry 32 of List I being law with respect to a property of the Union.
The property belonging to the various legal entities mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act cannot be regarded as property of the Union and the Public Premises Act cannot be held to have been enacted under entry 32 of List I in respect of the said properties.
In Accountant and Secretarial Services Pvt. Ltd. and Another vs Union of India and Others, (supra) this Court has held that the Public Premises Act, in relation to properties other than the properties belonging to the Central Government has been enacted under the concurrent list.
The learned Additional Solicitor General has placed reliance on the decision of this Court in Smt.
Saiyada Mossarrat vs Hindustan Steel Ltd., ; wherein it has been held that with regard to the subject matter of speedy eviction of unautho rised occupants from properties belonging to a Government company, wherein the Central Government has more than fifty one per cent of the paid up capital, the source of authority can be traced to entry 97 read with entry 95 of Union List (List 1).
This Court has, however, affirmed the decision of the Division Bench of Madhya Pradesh High Court in L.S. Nair vs Hindustan Steel Ltd., AIR 1980 MP 106 wherein it has been held that insofar as the Public Premises Act deals with a lessee or licence of premises belonging to a Government company, the subject matter of the Act would be covered by entries 6, 7 and 46 of List III.
After quoting the observa tions of the Madhya Pradesh High Court in this regard, this Court has observed: "Learned counsel for the petitioner has not been able to show that there is any infirmity in the reasoning of the High Court." This shows that the decision of this Court is rounded on the view mentioned above.
Since the Act was held to be covered by entries 6, 7 and 46 of List III, it was not necessary to invoke the residuary power of legislation under entry 97 of List I.
The observations made by this Court that the source of authority in the matter of speedy eviction of unautho rised occupants from properties belonging to a Government company wherein the Central Government has more than fifty one per cent of the paid up share capital can, in any case, be traced to entry 97 read with entry 95 of List I are obiter in nature only.
There is, therefore, no inconsistency between the decisions of this Court in Accoun 684 tant and Secretarial Services Pvt.
Ltd. (supra) and Smt.
Saiyada Mossarrat case (supra) inasmuch as in both the decisions it is held that the Public Premises Act insofar as it deals with a lessee or licencee of premises other than premises belonging to the Central Government has been enact ed in exercise of the legislative powers in respect of matters enumerated in the Concurrent List.
We are in agree ment with this view.
This means that both the statutes, viz. the PubLic Premises Act and the Rent Control Act, have been enacted by the same legislature, Parliament, in exercise of the legis lative powers in respect of the matters enumerated in the Concurrent List.
We are, therefore, unable to accept the contention of the learned Additional Solicitor General that the Public Premises Act, having been enacted by Parliament in exercise of legislative powers in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers in respect of matters enumerated in the Concurrent List.
In our opinion the question as to whether the provisions of the Public Premises Act override the provisions of the Rent Control Act will have to be considered in the light of the principles of statutory interpretion applicable to laws made by the same legisla ture.
One such principle of statutory interpretation which is applied is contained in the latin maxim: leges posteriors priores conterarias abrogant, (later laws abrogate earlier contrary.
laws).
This principle is subject to the exception embodied in the maxim: generalia specialibus non derogant, (a general provision does not derogate from a special one).
This means that where the literal meaning of the general enactment covers a situation for which specific provision is made by another enactment contained in an earlier Act, it is presumed that the situation was intended to continue to be dealt with by the specific provision rather than the later general one (Benion: Statutory Interpretation p. 433 34).
The rationale of this rule is thus explained by this Court in the J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh & Others, ; "The rule that general provisions should yield to specific provisions is not an arbitrary principle made by lawyers Judges but springs from the common understanding of man and women that when the same person gives two directions 685 one covering a large number of matters in general and anoth er to only some of them his intention is that these latter directions should prevail as regards these while as regards all the rest the earlier directions should have effect." (p. 94) In U.P. State Electricity Board & Ors.
vs Hari Shankar Jain & Ors., ; this Court has observed: "In passing a special Act, Parliament devotes its entire consideration to a particular subject.
When a General Act is subsequently passed, it is logical to presume that Parlia ment has not repealed or modified the former Special Act unless it appears that the Special Act again received con sideration from Parliament." (p. 366) In Life Insurance Corporation vs
D.J. Bahadur; , Krishna Iyer, J. has pointed out: "In determining whether a statute is a special or a general one, the focus must be on the principal subject matter plus the particular perspective.
For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with liner points of law." (p. 1127) The Public Premises Act is a later enactment, having been enacted on 23rd August, 1971, whereas the Rent Control Act was enacted on 31st December, 1958.
It represents the later will of Parliament and should prevail over the Rent Control Act unless it can be said that the Public Premises Act is a general enactment, whereas the Rent Control Act is a special enactment and being a special enactment the Rent Control Act should prevail over the Public Premises Act.
The submission of learned counsel for the petitioners is that the Rent Control Act is a special enactment dealing with premises in occupation of tenants, whereas the Public Prem ises Act is a general enactment dealing with the occupants of Public Premises and that insofar as public premises in occupation of tenants are concerned the provisions of the Rent Control Act would continue to apply and to that extent the provisions of the Public Premises Act would not be applicable.
In support of this submission reliance has been placed on the non obstante clauses contained in Section 14 and 22 of the Rent Control Act as well as the provisions contained in Sections 50 and 54 of the said Act.
On the 686 other hand the learned counsel for the respondents have urged that the Rent Control Act is a general enactment dealing with the relationship of landlord and tenant gener ally, whereas the Public Premises Act is a special enactment making provision for speedy recovery of possession of Public Premises in unauthorised occupation and that the provisions of the Public Premises Act, a later Special Act, will, therefore, override the provisions of the Rent Control Act in so far as they are applicable to Public Premises in occupation of persons who have continued in occupation after the lease has expired or has been determined.
The learned counsel for the respondents have placed reliance on Section 15 of the Public Premises Act which bars the jurisdiction of all courts in respect of the eviction of any person who is in unauthorised occupation of any Public Premises and other matters specified herein.
It has been submitted that the said provision is also in the nature of a non obstante clause which gives overriding effect to the provisions of the Public Premises Act.
Thus each side claims the enactment relied upon by it is a special statute and the other enact ment is general and also invokes the non obstante clause contained in the enactment relied upon.
The Rent Control Act makes a departure from the general law regulating the relationship of landlord and tenant contained in the Trnasfer of Property Act inasmuch as it makes provision for determination of standard rent, it specifies the grounds on which a landlord can seek the evic tion of a tenant, it prescribes the forum for adjudication of disputes between landlords and tenants and the procedure which has to be followed in such proceedings.
The rent Control Act can, therefore, be said to be a special statute regulating the relationship of landlord and tenant in the Union Territory of Delhi.
The Public premises Act makes provision for a speedy machinery to secure eviction of unau thorised occupants from public premises.
As opposed to the general law which provides for filing of a regular suit for recovery of possession of property in a competent Court and for trial of such a suit in accordance with the procedure laid down in the Code of Civil procedure, the Public Prem ises Act confers the power to pass an order or eviction of an unauthorised occupant in a public premises on a designat ed officer and prescribes the procedure to be followed by the said officer before passing such an order.
Therefore, the Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises.
In other words, both the enactments, namely, the Rent Con trol Act and the Public Premises Act, are special statutes in relation to the matters dealt with therein.
Since, the Public premises Act is a special statute and not a general enactment the 687 exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act.
We arrive at the same conclusion by applying the princi ple which is followed for resolving a conflict between the provisions of two special enactments made by the same legis lature.
We may in this context refer to some of the cases which have come before this Court where the provisions of two enactments made by the same legislature were found to be inconsistent and each enactment was claimed to be a special enactment and had a non obstante clause giving overriding effect to its provisions.
In Shri Ram Narain vs The Simla Banking and Industrial Co. Ltd., ; this Court was considering the provisions contained in the Banking Companies Act, 1949 and the .
Both the enactments contained provisions giving overriding effect to the provisions of the enactment over any other law.
This Court has observed: "Each enactment being a Special Act, the ordinary principle that a special law overrides a general law does not afford any clear solution in this case" (p. 613) "It is, therefore, desirable to determine the overriding effect of one or the other of the relevant provisions in these two Acts, in a given case, on much broader considera tions of the purpose and policy underlying the two Acts and the clear intendment conveyed by the language of the rele vant provisions therein." (p. 615) Similarly in Kumaon Motor Owners ' Union Ltd. and Another vs The State of Uttar Pradesh, 1 there was conflict between the provisions contained in Rule 131(2)(gg) and (i) of the Defence of India Rules, 1962 and Chapter IV A of the Motor Vehicle Act, 1939.
Section 68 B gave overriding effect to the provisions of Chapter IV(A) of the Motor Vehicle Act whereas Section 43 of the Defence of India Act, 1962, gave overriding effect to the provisions contained in the Defence of India Rules.
This Court held that the Defence of India Act was later than the Motor Vehicles Act and, therefore, if there was anything repugnant, the provisions of the later 688 Act should prevail.
This Court also looked into object behind the two statutes, namely, Defence of India Act and Motor Vehicles Act and on that basis also it was held that the provisions contained in the Defence of India Rules would have an overriding effect over the provisions of the Motor Vehicles Act.
In Sarwan Singh & Another vs Kasturi Lal, ; , the question for consideration was, whether the provi sions of Section 14A and Chapter IIIA of the Rent Control Act will prevail over those contained in Sections 19 and 39 of the .
Section 14A and 25A of the Rent Control Act contained non obstante clauses but in Section 54 of the Rent Control Act it was expressly provided that nothing in the said Act shall effect the provisions of the .
Moreover in Section 19 of the mere was non obstante clause and Section 39 of the said Act gave overrid ing effect to the provisions of the said enactment over any other Jaw.
This Court has observed: "When two or more laws operate in the same field and each contains a non obstante clause stating that its provisions will override those of any other law, stimulating and inci sive problems of interpretation arise.
Since statutory interpretation has no conventional protocol, cases of such conflict have to be decided in reference to the obeject and purpose of the laws under consideration." (p. 433) After examining the special and specific purpose under lying the enactment of Section 14A and Chapter IIIA of the Rent Control act and the fact that the Rent Control Act was a later enactment this Court held that the provisions of the Rent Control Act would prevail over those contained in the .
The principle which emerges from these decisions is that in the case of inconsistency between the provisions of two enactments, both of which can be regarded as Special in nature, the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein.
We propose to consider this matter in the light of this principle.
The statement of objects and reasons for the enactment of the 689 Rent Control Act, indicates that it has been enacted with a view: (a) to devise a suitable machinery for expeditious adjudica tion of proceedings between landlords and tenants; (b) to provide for the determination of the standard rent payable by tenants of the various categories of premises which should be fair to the tenants, and at the same time, provide incentive for keeping the existing houses in good repairs, and for further investment in house construction; and (c) to give tenants a larger measure of protection against eviction.
This indicates that the object underlying the Rent Control Act is to make provision for expeditious adjudication of disputes between landlords and tenants, determination of standard rent payable by tenants and giving protection against eviction to tenants.
The premises belonging to the Government are excluded from the ambit of the Rent Control Act which means that the Act has been enacted primarily to regulate the private relationship between landlords and tenants with a view to confer certain benefits on the ten ants and at the same time to balance the interest of the landlords by providing for expeditious adjudication of proceedings between landlords and tenant.
As mentioned earlier, the Public Premises Act has been enacted with a view to provide for eviction of unauthorised occupants from public premises.
In the statement of objects and reasons for this enactment reference has been made to the judicial decisions whereby by the 1958 Act was declared as unconstitutional and it has been mentioned: "The court decisions, referred to above, have created seri ous difficulties for the Government inasmuch as the proceed ings taken by the various Estate Officers appointed under the Act either for the eviction of persons who are in unau thorised occupation of public premises or for the recovery of rent or damages from such persons stand null and void.
It has become impossible for Government to take expeditious action even inflagrant cases of unauthorised occupation of public premises and recovery of rent or damages for such unauthorised occupation.
It is, therefore, considered imper ative to restore a speedy machinery for the eviction of persons who are in unauthorised occupation 690 of public premises keeping in view at the same time the necessity of complying with the provision of the Constitu tion and the judicial pronouncements, referred to above." This shows that the Public Premises Act has been enacted to deal with the mischief of rampant unauthorised occupation of public premises by providing a speedy machinery for the eviction of persons in unauthorised occupation.
In order to secure this object the said Act prescribes the time period for the various steps which are enquired to be taken for securing eviction of the persons in unauthorised occupation.
The object underlying the enactment is to safeguard public interest by making available for public use premises belonging to Central Government, Companies in which the Central Government has substantial interest, Corpora tions owned or controlled by the Central Government and certain autonomous bodies and to prevent misuse of such premises.
It would thus appear that, while the Rent Control Act is intended to deal with the general relationship of landlords and tenants in respect of premises other than government premises, the Public Premises Act is intended to deal with speedy recovery of possession of premises of public nature, i.e. property belonging to the Central Government, or Compa nies in which the Central Government has substantial inter est or Corporations owned or controlled by the Central Government and certain corporations, institutions, autono mous bodies and local authorities.
The effect of giving overriding effect to the provisions of the Pubic Premises Act over the Rent Control Act, would be that buildings belonging to Companies Corporations and Autonomous bodies referred to in Section 2(e) of the Public Permises Act would be excluded from the ambit of the Rent Control Act in the same manner as properties belonging to the Central Govern ment.
The reason underlying the exclusion of property be longing to the Government from the ambit of the Rent Control Act, is that Government while dealing with the citizens in respect of property belonging to it would not act for its own purpose as a private landlord but would act in public interest.
What can be said with regard to Government in relation to property belonging to it can also be said with regard to companies, corporations and other statutory bodies mentioned in Section 2(e) of the Public Premises Act.
In our opinion, therefore, keeping in view the object and purpose underlying both the enactments viz., the Rent Control Act and the Public Premises Act, the provisions of the Public Premises Act have to be construed as overriding the provi sions contained in the Rent Control Act.
691 As regards the non obstante clauses contained in Sec tions 14 and 22 and the provisions contained in Sections 50 and 54 of the Rent Control Act, it may be stated that Par liament was aware of these provisions when it enacted the Public Premises Act contained a specific provision in Sec tion 15 barring jurisdiction of all courts (which would include the Rent Controller under the Rent Control Act).
This indicates that Parliament intended that the provisions of the Public Premises Act would prevail over the provisions of the Rent Control Act inspite of the above mentioned provisions contained in the Rent Control Act.
It has been urged by the learned counsel for the peti tioner that there is no conflict between the provisions of the Rent Control Act and the Public Premises Act and that both the provisions can be given effect to without one overriding the other.
In this regard, it has been pointed out that since no provisions has been made in the Public Premises Act for the termination of the lease, the provi sions of the Rent Control Act can be held applicable upto the stage of termination of the lease, and thereafter, proceedings can be initiated for eviction under the provi sions of the Public Premises Act.
In support of this submis sion, reliance has been placed on Dhanpal Chettiar 's case (supra), wherein it has been held that in view of the spe cial provisions contained in the State Rent Control Acts, it is no longer necessary to issue a notice under Section 106 of the Transfer of Property Act to terminate the tenancy because inspite of the said notice the tenant is entitled to continue in occupation by virtue of the provisions of the said Acts.
In the said case, it has been further laid down that the relationship between the landlord and tenant con tinues till the passing of the order of eviction in accord ance with the provisions of the Rent act, and therefore, for the eviction of the tenant in accordance with the law, an order of the competent Court under the Rent Control Act is necessary.
This would mean that in order to evict a person who is continuing in occupation after the expiration or termination of his contractual tenancy in accordance with law, two proceedings will have to be initiated.
First, there will be proceedings under Rent Control Act before the Rent Controller followed by appeal before the Rent Control Tribu nal and revision before the High Court.
After these proceed ings have ended they would be followed by proceedings under the Public Premises Act, before the Estate Officer and the Appellate Authority.
In other words, persons in occupation of public premises would receive greater protection than tenants in premises owned by private persons.
It could not be the intention of Parliament to confer this dual benefit on persons in occupation of public premises.
692 It has also been urged that in Section 22 of the Rent Control Act, special provision has been made for recovery of possession of premises belonging to a company or other body corporate or any local authority or any public institution and that premises belonging to companies, corporations and autonomous bodies mentioned in clauses (2) and (3) of Sec tion 2(e) of the Public Premises would be covered by the said provision and that in view of this special provision it is not necessary to have a further provision in the Public Premises Act for the recovery of possession belonging to those bodies, and therefore, the provisions of the Public Premises Act should be confined in their application to premises other than premises covered by the Rent Control Act.
Section 22 of the Rent Control Act provides as under: "Where the landlord in respect of any premises is any compa ny or other body corporate of any local authority or any public institution and the premises are required for the use of employees of such landlord or in the case of a public institution for the furtherance of its activities, then, notwithstanding anything contained in Section 14 or any other law, the Controller may, on an application made to him in this behalf by such landlord, place the landlord in vacant possession of such premises by evicting the tenant and every other person who may be in occupation thereof, if the Controller is satisfied (a) that the tenant to whom such premises were let for use as a residence at a time when he was in the service or employment of the landlord, has ceased to be in such service or employment; or (b) that the tenant has acted in contravention of the terms, express or implied, under which he was authorised to occupy such premises; or (c) that any other person is in unauthorised occupation of such premises; or (d) that the premises are required bona fide by the public institution for the furtherance of its activities.
Explanation For the purpose of this section, "public in stitution" includes any educational institutional, library, hospital and charitable dispensary but does not include any 693 such institution set up by any private trust.
" The said special provision shows that, it enables recov ery of possession or premises of which the landlord is a company or other body corporate or any local authority or any public institution in certain circumstances viz., if the premises are required for the use of the employees or such landlord.
In the case of public institutions possession can also be obtained under this provision if the premises are required for the furtherance of its activities.
In other words, recovery of possession is permissible under this provision only in certain circumstances and for certain purposes.
Inspite of this provision Parliament has consid ered it necessary tO extend the Public Premises Act to premises belonging to companies, corporations and statutory bodies mentioned in Clauses (2) and (3) of Section 2(e) by widening the definition of the expression "public premises" in Section 2(e) of the Public Premises Act.
The scope and ambit of the aforesaid power conferred under the Public Premises Act cannot be restricted by reference to the provi sion contained in Section 22 of the Rent Control Act.
It has been urged by the learned counsel for the peti tioners that many of the corporations referred to in Section 2(e)(2)(ii) of the Public Premises Act, like the nationa lised banks and the Life Insurance Corporation, are trading corporations and under the provisions of the enactments whereby they are constituted these corporations are required to carry on their business with a view to earn profit, and that there is nothing to preclude these corporations to buy property in possession of tenants at a low price and after buying such property evict the tenants after terminating the tenancy and thereafter sell the said property at a much higher value because the value of property in possession of tenants is much less as compared to vacant property.
We are unable to cut down the scope of the provisions of the Public Premises Act on the basis of such an apprehension because as pointed out by this Court in M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay, ; "Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigour of the Rent Act, must be informed by reason and guided by the public interest.
All exercise of discretion or power by public authorities as the respondent, in respect of dealing with tenants in respect of which they have been treated separately and distinctly from other landlords on the assumption that they would not act 694 as private landlords, must be judged by that standard." These observations were made in the context of the provi sions of the Bombay Rents, Hotel and Lodging Houses Rates (Control) Act, 1947 whereby exemption from the provisions of the Act has been granted to premises belonging to the Bombay Port Trust.
The consequence of giving overriding effect to the provisions of the Public Premises Act is that premises belonging to companies and statutory bodies referred to in Clauses (2) and (3) of Section 2(e) of the Public Premises Act would be exempted from the provisions of the Rent Con trol Act.
The actions of the companies and statutory bodies mentioned in Clauses (2) and (3) of Section 2(e) of the Public Premises Act while dealing with their properties under the Pubic Premises Act will, therefore, have to be judged by the same standard.
For the reasons aforesaid, we are unable to accept the contention of the learned counsel for the petitioners that the provisions contained in the Public Premises Act cannot be applied to premises which fall within the ambit of the Rent Control Act.
In our opinion, the provisions of the Public Premises Act, to the extent they cover premises falling within the ambit of the Rent Control Act, override the provisions of the Rent Control Act and a person in unauthorised occupation of public premises under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act.
In Civil Appeal No. 3723 of 1966, Shri Yogeshwer Prasad sought to raise contentions relating to the particular facts of that case, namely, that the termination of the lease of the appellant is vitiated by mala fides and that the said appellant could not be held to be a person in unauthorised occupation of the premises and further that the proceedings have not been taken in accordance with the provisions of the Public Premises Act.
We find that in this case the appellant filed a writ petition in the High Court directly against the order passed by the Estate Officer without filing an appeal against the said order before the Appellate Authority.
The High Court has held that the question of mala fides is a disputed question of fact and the same could not be gone into in proceedings under Article 226 of the Constitution.
We are in agreement of the said view of the High Court.
As regards the other contentions we are of the view that the appellant cannot be permitted to agitate matters which could be agitated by him in appeal before the Appellate Authority.
In Civil Appeals Nos. 2368 and 2369 of 1986 the learned counsel 695 for the respondents have raised a preliminary objection with regard to the maintainability of these appeals on the ground that the appellants, on account of their conduct, are not entitled to invoke the jurisdiction of this Court under Article 136 of the Constitution.
The submission of the learned counsel is that before initiating proceedings under the provisions of the Public Premises Act the respondent Bank, viz. the Punjab National Bank, had initiated proceed ings under the Rent Control Act for the eviction of the appellants had in those proceedings the appellants had filed an objection with regard to the maintainability of the eviction proceedings under the Rent Control Act before the Additional Rent Controller and thereupon the Respondent Bank initiated proceedings for eviction of the appellants under the Public Premises Act and thereafter the proceedings initiated by the respondent Bank under the Rent Control Act were dismissed by the Additional Rent Controller by orders dated the 6th August, 1989.
The learned counsel of the respondents have urged that the appellants, having raised the objection against the maintainability of the proceedings for eviction under the Rent Control Act on the ground that proceedings could only be maintained under the provisions of the Public Premises Act and having got them dismissed, cannot turn round and raise an objection that the proceed ings for eviction under the Public Premises Act are not maintainable and the proceedings can only be taken under the Rent Control Act.
The learned counsel for the appellants have submitted that special leave to appeal was granted by this Court after notice to the respondents and at that stage the respondents had raised this objection but this Court granted special leave and it is not permissible for the respondents to agitate this question now.
The orders dated the 6th August, 1989 which were passed by the Additional Rent Controller in the proceedings for eviction initiated by the respondent Bank under Rent Control Act against the appellants in these appeals have been placed on record by the respondents and from the said orders it appears that in the proceedings initiated under the Rent Control Act the appellants had raised a plea that the premises in question had been declared public premises under the Public Premises Act and in view of that the proceedings under the Rent Control Act were not competent.
The said orders also show that the Additional Rent Controller dismissed the proceed ings for eviction under the Rent Control Act on the view that the Public Premises Act is applicable to premises in question and his jurisdiction was excluded.
This would show that the proceedings which were initiated by the Respondent Bank for the eviction of the appellants under the Rent Control Act were dismissed as not maintainable on the ground that the Rent Control Act was not applicable to the premises and the premises are governed by the provisions of the 696 Public Premises Act.
This finding was recorded by the Addi tional Rent Controller in view of the objection raised by the appellants with regard to the maintainability of those proceedings.
In other words, the appellants succeeded in those proceedings on the basis of their plea that the prem ises were not governed by the Rent Control Act and were governed by the provisions of the Public Premises Act.
Having got the proceedings under the Rent Control Act dis missed the appellants are now raising the plea that the proceedings under the Public Premises Act are not maintain able and that the only remedy available is under the Rent Control Act.
This conduct of the appellants would have disentitled them from invoking the jurisdiction of this Court under Article 136 of the Constitution.
Since we are of the view that the appellants cannot succeed on the merits, we do not propose to dismiss the appeals on this preliminary ground.
In the result the appeals and the writ petition are dismissed.
There will be no order as to costs.
The appellants in Civil Appeals Nos. 2368 and 2369 of 1986 had been dispossessed from the premises in their occu pation after the dismissal of their appeals by the Addition al District Judge.
During the pendency of these appeals interim orders were passed by this Court whereunder posses sion of a part of the premises was restored to the appel lants.
Since these appeals have been dismissed the appel lants in both the appeals are directed to handover the possession of the portion of the premises in their occupa tion to the Respondent Bank within one month.
In Civil Appeal No. 3725 of 1986 and Writ Petition No. 864 of 1985, this Court had passed interim orders staying the eviction of the petitioners in those matters.
Since the appeal and the writ petition are being dismissed the said interim orders shall stand vacated.
R.S.S. Petitions dismissed.
| The appellants/petitioners were tenants in the premises belonging to the respondent Banks/Life Insurance Corporation of India.
Their tenancy had expired or had been terminated by the respondents and eviction proceedings initiated against them under the provisions of the .
Writ peti tions under Article 226 were filled by the appellants in the High Court challenging the orders of eviction passed against them, which were dismissed; hence these appeals.
The writ petitioners moved this Court directly under Article 32 of the Constitution against the notices of termination of tenancy issued to them.
The Public Premises Act of 1971 was preceded by two enactments the Government Premises (Eviction) Act 1950, and the Public Premises (eviction of unauthorised occupants) Act, 1958 which were declared unconstitutional by different High Courts.
Jagu Singh vs M. Shaukat Ali, ; Satish Chander & Anr.
vs Delhi Improvement Trust, AIR 1958 Punjab 1; Brigade Commander, Meerut Sub Area vs Ganga Pra sad, ; P.L. Mehar etc.
vs D.R. Khanna, etc., AIR 1971 Delhi 1 and Northern India Caterers Private Ltd. vs State of Punjab & Anr.
, ; 650 This led to the enactment of the Public Premises Act in 1971.
The validity of this act was upheld by this Court in Hari Singh vs The Military Estate Officer, ; Before this Court, the contentions were advanced by the parties mainly on two questions (i) whether the provisions of the Public Premises Act were applicable to the Premises belonging to a nationalised bank; and (ii) whether the provisions of the Public Premises Act override the provi sions of the Delhi Rent Control Act.
In regard to the applicability of the Public Premises act, it was inter alia contended that the premises belonging to a nationalised bank or insurance company did not fall within the ambit of the definition of 'Public Premises ' contained in Section 2(e) of the Public Premises Act for the reason that the nationalised bank was not a company as defined in Section 3 of the and it was also not a corporation established by or under a Central Act.
On the other hand, it was contended that the respond ents being nationalised bank, was a corporation established by a Central Act, viz., the Bank Nationalisation Act, and the premises belonging to a nationalised bank were 'public premises ' under section 2(e)(2)(ii) of the Public Premises Act.
In regard to the second question, each side claimed that the enactment relied upon by it was a special statute and the other enactment was general, and also invoked the not obstante clause contained in the enactment relied upon.
In this connection, it was argued on behalf of the respondents that the Public Premises Act having been enacted by Parlia ment in exercise of legislative power under Article 246(1) of the Constitution in respect of matters enumerated in the Union List would ipso facto override the provisions of the Rent Control Act enacted in exercise of the legislative powers under Article 246(4) in respect of matters enumerated in the concurrent list.
Dismissing the appeals and the writ petition, this Court, HELD: (1) The provisions of the Public Premises Act, to the extent they cover premises failing within the ambit of the Rent Control Act, override the provisions of the Rent Control Act, and a person in unauthorised occupation of public premises under Section 2(e) of the Act cannot invoke the protection of the Rent Control Act.
[694D E] (2) After the second world war there has been develop ment of a new pattern of public corporation in England as an instrument of plan 651 ning in the mixed economy.
The general characteristics of such a public corporation is that it is normally created by a special statute; it has no shares and no share holders, either private or public, and its share holder, in the symbolic sense, is the nation represented through Government and Parliament; and it has the legal status of a corporate body with independent legal personality.
There has been a similar growth of this type of public corporation in other.
countries.
This trend is also evident in our country.
since Independence and a number of such public corporations have been constituted by Acts of Parliament.
[668A C] (3) The expression 'Corporation ' in Section 2(e)(2)(ii) of the Public Premises Act would include public corporations of the new pattern constituted under the Central Acts where in the entire paid up capital vests in the Central Govern ment.
[670G] S.S. Dhanoa vs Municipal Corporation, Delhi, ; , distinguished.
(4) In order to constitute a corporation it is not necessary that there should be shareholders or members and that in the new pattern of public corporation that has developed there are no shareholders or members.
[671G] Bank of New South Wales & Ors.
vs The Common wealth, ; and R.C. Cooper vs Union of India, ; , referred to.
Oriental Bank of Commerce vs Delhi Development Authori ty, , overruled.
(5) Provisions of the Banks Nationalisation Act show that the nationalised Bank has been constituted as a dis tinct juristic person by the Act and it is owned by the Central Government.
They further indicate that the nationa lised bank has all the attributes of the new pattern of public corporation.
[667B] (6) The object of the legislation in enlarging the definition of 'public premises ' in Section 2(e) of the Public Premises Act is to make available the machinery of the Act for evicting unauthorised occupants not only from the premises belonging to the Central Government but also from premises belonging to Companies, Corporation and statu tory bodies in which the Central Government has a substan tial interest.
[670D E] 652 (7) Under Section 2(e)(2)(i) premises belonging to a company incorporated under the , in which not less than fifty one percent of the paid up capital is held by the Central Government, are to be treated as public enterprises.
It could not be the intention of Parliament that premises belonging to public corporations whose entire paid up capital vests in the Central Government and who are the instrumentalities of State would be excluded from the ambit of the definition of 'public premises '.
[670E G] (8) Keeping in view the provisions of the Banks Nation alisation Act the nationalised bank is a corporation estab lished by a Central Act and it is owned and controlled by the Central Government.
The premises belonging to a nationa lised bank are public premises under Section 2(e)(2)(ii) of the Public Premises Act.
[671 H; 672A] (9) There is no warrant for confining the scope of the definition of 'public premises ' contained in section 2(e) to premises used for residential purposes only and to exclude premises used for commercial purposes from its ambit.
[672D] Hari Singh vs Military Estate Officer, ; , referred to.
(10) No distinction can be made between premises used for residential purposes and premises used for commercial purposes in the matter of eviction of unauthorised occupants of public premises and the consideration which necessitate providing a speedy machinery for eviction of persons in unauthorised occupation of public premises apply equally to both the types of public premises.
[673B C] (11) The definition of the expression 'unauthorised occupation ' contained in Section 2(g) of the Public Premises Act is in two parts.
The second part of the definition is inclusive in nature and expressly covers continuance in occupation by any person of the public premises after the authority (whether by way of grant or any other mode of transfer) under which he was allowed to occupy the premises has expired or has been determined for any reason whatsoev er.
The words "whether by way of grant or any other mode of transfer" in this part of the definition are wide in ampli tude and would cover a lease because lease is a mode of transfer under the Transfer of Property Act.
[673F; G H; 674B] Brigadier K.K. Verma vs Union of India, AIR 1954 Bom 358, distinguished.
653 Lallu Yeshwant Singh vs Rao Jagdish Singh & Ors., ; , and Express Newspapers Pvt. Ltd. & Ors.
vs Union of India & Ors.
, [1985] Suppl.
3 SCR 302, referred to.
(12) It is true that there is no requirement in the Public Premises Act that the Estate Officer must be a person well versed in law.
But, that, by itself, cannot be a ground for excluding from the ambit of the said Act premises in unauthorised occupation of persons who obtained possession of the said premises under a lease when the Public Premises Act and the Rules framed thereunder provide for a right of appeal of the District Judge against an order of the Estate Officer.
which shows that the final order that is passed is by a judicial officer.
[675F H] Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors., ; , referred to.
(13) As regards rent control legislations enacted by the State legislatures, the position is well settled that such legislation fail within the ambit of entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution.
[682E] Indu Bhushan Bose vs Rama Sundari Devi & Anr.
, ; ; V. Dhanpal Chettiar 's vs Yesodai Ammal, ; ; Jai Singh Jairam Tyagi Etc.
vs Mamanchand Ratilal Agarwal & Ors., ; ; Accountant and Secretari al Services Pvt. Ltd. & Anr.
vs Union of India & Ors.
, ; , referred to.
(14) The Rent Control Act has been enacted by Parliament in relation to the Union Territory of Delhi in exercise of the legislative power conferred under Article 246(4) of the Constitution which empowers Parliament to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List.
[682G] (15) The Public Premises Act deals with Government property as well as property belonging to other legal enti ties mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act.
In so far as it relates to eviction of unauthorised occupants from premises belonging to or taken on lease or requisitioned by or on behalf of the Central Government, the Public Premises Act would fail within entry 32 of List I being law with respect to a property of the Union.
The property belonging to the various legal entities mentioned in clauses (2) and (3) of Section 2(e) of the Public Premises Act cannot be regarded as property of 654 the Union and the Public Premises Act cannot be held to have been enacted under entry 32 of List I in respect of the said properties.
In so far as it deals with a lessee or licensee of premises other than premises belonging to the Central Govt; the Public Premises Act has been enacted in exercising the legislative power in respect of matters enumerated in the concurrent list.
[682H; 683A C] (16) Both the statutes, viz. the Public Premises Act and the Rent Control Act, have been enacted by the same legisla ture, Parliament, in exercise of the legislative powers in respect of the matters enumerated in the Concurrent List.
[684C] Accountant and Secretarial Services Pvt. Ltd. vs Union of India And Ors., ; ; Smt.
Saiyada Mossarrat vs Hindustan Steel Ltd.; , and L.S. Nair vs Hindustan Steel Ltd., AIR 1980 MP.
106, referred to.
(17) The Rent Control Act makes a departure from the general law regulating the relationship of landlord and tenant contained in the Transfer of Property Act inasmuch as it makes provision for determination of standard rent, it specifies the grounds on which a landlord can seek the eviction of a tenant, it prescribes the forum for adjudica tion of disputes between landlords and tenants and the procedure which has to be followed in such proceedings.
The Rent Control Act can, therefore, be said to be a special statute regulating the relationship of landlord and tenant in the Union Territory of Delhi.
[686D F] (18) The Public Premises Act is also a special statute relating to eviction of unauthorised occupants from public premises.
[689E] Jain Ink Manufacturing Company vs Life Insurance Corpo ration of India & Anr., ; , referred to.
(19) Both the enactments, namely, the Rent Control Act and the Public Premises Act, are special statutes in rela tion to the matters dealt with therein.
Therefore, the exception contained in the principle that a subsequent general law cannot derogate from an earlier special law cannot be invoked and in accordance with the principle that the later laws abrogate earlier contrary laws, the Public Premises Act must prevail over the Rent Control Act.
[686H; 687A] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh, ; ; U.P. State Elec tricity Board vs Hari 655 Shankar Jain; , and Life Insurance Corpora tion vs D.J. Bahadur; , , referred to.
(20) In the case of inconsistency between the provisions of two enactments, both of which can be regarded as Special in nature.
the conflict has to be resolved by reference to the purpose and policy underlying the two enactments and the clear intendment conveyed by the language of the relevant provisions therein.
[688G] Shri Ram Narain vs The Simla Banking and Industrial Co. Ltd.; , ; Kumaon Motor Owners ' Union Ltd. vs The State of Uttar Pradesh, ; and Sarwan Singh vs Kasturi Lal; , , referred to.
(21) Keeping in view the object and purpose underlying both the enactments viz., the Rent Control Act and the Public Premises Act, the provisions of the Public Premises have to be construed as overriding the provisions contained in the Rent Control Act.
[690H] The Parliament was aware of the non obstante clauses contained in Section 14 and 22 and the provisions contained in Sections 50 and 54 of the Rent Control Act when it enact ed the Public Premises Act containing a specific provision in Section 15 barring jurisdiction of all courts (which would include the Rent Controller under the Rent Control Act).
This indicates that Parliament intended that the provisions of the Public Premises Act would prevail over the provisions of the Rent Control Act inspite of the above mentioned provisions contained in the Rent Control Act.
[691A B] (23) The scope of the provisions of the Public Premises Act cannot be cut down on the basis of an apprehension that the corporations may be induced to earn profits by purchas ing property in possession of tenants at a low price and after buying such property evict the tenants after terminat ing their tenancy and thereafter sell the said property at a much higher value.
Every activity of a public authority especially in the background of the assumption on which such authority enjoys immunity from the rigours of the Rent Act, must be informed by reason and guided by the public inter est.
[693F; E G] M/s Dwarkadas Marfatia and Sons vs Board of Trustees of the Port of Bombay, ; , referred to.
|
Appeal No. 212/55.
Appeal from the Judgment and Decree dated July 7, 1953, of the Calcutta High Court in Appeal from Original Order No. 157 of 1952, arising out of the Judgment and Decree dated March 28, 1952, of the said High Court in Civil Rule No. 1409 of 1951.
B. Sen and P. K. Bose for the appellants.
P. K. Ghosh for the respondent.
section C. Mazumdar for the Intervener (Gopalpur Land Development Society, Ltd.).
August 29.
The Judgment of the Court was delivered by SINHA C. J.
The only substantial question that arises for determination in this appeal, on a certificate granted by the Calcutta High Court under article 133 (1)(c) of the Constitution, is whether the Government of West Bengal was bound to frame a development scheme under the provisions of the West Bengal Land Development and Planning Act, 21 of 1948, which hereinafter will be referred to as the Act, when it exercised its power of emergency under section 7 of the Act.
The facts of this case lie within a very narrow compass and are as follows: The respondent was the owner of about 18 bighas of land in a certain village in the district of 24 Parganas.
By a notification dated January 6, 1950, and published in the Calcutta Gazette dated January 12, 1950, under section 4 of the Act, the Government declared that the cadastral survey 370 plots, particulars whereof were given in the notification, were likely to be needed for the settlement of immigrants and for creation of better living conditions in the locality.
Thereafter a notification was ' issued under section 6 read with section 7 of the Act and published in the Calcutta Gazette dated April 27, 1950, declaring that the plots covered by the notification under section 4 aforesaid were needed for the very same purposes as stated in the notification under section 4.
On or about December 16, 1950, possession of those plots, except three, was taken by the Government.
When the Government started to erect certain structures on the land thus acquired and stored building materials near about, the respondent moved the High Court under article 226 of the Constitution challenging the vires of the Act and impugning the legality of the proceedings taken under the Act.
The matter was heard by H. K. Bose, J., sitting singly.
Before him the grounds urged in support of the petition were that the release of the three plots from the acquisition proceedings rendered the entire proceedings bad in law; that there was no urgency for the Government to take steps under section 7 of the Act, and for issuing the notifi cation under section 6 ; and that the provisions of the Act infringed the fundamental rights of the respondent, petitioner in the High Court, enshrined in article 19(1)(f) of the Constitution.
The learned Judge, by his judgment dated March 28, 1952, negatived all those contentions and discharged the rule issued by the High Court on the Government of West Bengal and others under article 226 of the Constitution.
The respondent preferred an appeal under the Letters Patent.
The appeal was heard by a Division Bench consisting of G. N. Das and Debabrata Mookerjee, JJ.
By their judgment dated July 7, 1953, it was held that the Act did not infringe the provisions of article 31 (2) of the Constitution and that therefore it became unnecessary to express any opinion with respect to the provisions of article 19(1)(f).
But the Bench also examined the provisions of the Act in the light of article 19(1)(f) of the Constitution and came to the conclusion that there was no infirmity in the Act, 371 even on that score, Having decided all the points raised on behalf of the appellant before it, the High Court allowed the appellant to raise another controversy, which had not been raised before the learned single Judge, namely, whether it was incumbent on the Government to frame a development scheme, after A possession had been taken by it, of the land in question.
Ordinarily, such a controversy should not have been allowed to be raised for the first time in the court of appeal.
Be that as it may, it came to the conclusion that even though the Government was entitled to deal with the land on an emergency basis under section 7 of the Act, it was incumbent on the State Government to frame a development scheme after possession had been taken.
The main reason for this conclusion as given by the High Court is that though section 7 had armed the Government with the power to take possession of the property before framing a scheme of development, the section does not, in terms, dispense with the necessity of framing a development scheme, after the emergency had been declared and possession taken.
In that view of the matter, the court of appeal allowed the appeal in part and directed a writ of mandamus to issue to the respondents before it, requiring them to proceed to frame a development scheme in terms of the Act.
The State of West Bengal and other officials who had been impleaded as respondents in the High Court applied for leave to appeal to this Court from the said judgment of the appeal court.
The High Court granted the leave prayed for, on condition that the appellants paid for the representation of the respondent before this Court by a junior Advocate of this Court.
That is how the matter comes before this Court.
It was argued on behalf of the appellants that the appeal court had misapprehended the scope and effect of sections 4, 5, 6 and 7 of the Act; that the Act contemplated two categories of acquisition proceedings, namely, (1) acquisition under section 6, after compliance with the provisions of section 5 and (2) acquisition in case of an emergency under section 7 read with section 6 of the Act; that the condition precedent laid down in section 5 necessitating 48 372 the framing of a scheme before a declaration under section 6 of the Act was made, is specifically excluded in cases of emergency once a declaration of emergency under section 7 is made.
The High Court was, therefore, in error in insisting upon the framing of a development scheme under section 5 of the Act, when that section had not been made applicable to the case of an emergency acquisition.
Once the property has been acquired it vests in the Government and thereafter the original holder of the property has no say in the matter, except on the question of amount of compensation.
Mr. Sen, for the appellants, finally contended that if the High Court was right in insisting upon a scheme of development being framed, the whole purpose of declaring an emergency would be defeated.
The learned counsel for the respondent has not made any serious attempt to meet the contentions raised on behalf of the appellants, but has attempted to show that the provisions of the Act, in so far as they give special powers to Government to declare an emergency and then to proceed with the acquisition without the necessity of framing a scheme of development, were unconstitutional, both in view of the provisions of article 31(2) and article 19(1)(f).
He also made a very feeble attempt to rely upon the provisions of article 14 of the Constitution and to suggest that the respondent was being discriminated against in the application of the emergency provisions of the Act to his case.
In our opinion, the contentions raised on behalf of the appellants are manifestly well founded and the High Court was clearly in error in issuing the mandamus against the appellants.
Before dealing with the contentions raised on behalf of the parties, it is convenient, at this stage, to set out the relevant provisions of the Act.
The Act replaced the West Bengal Land Development and Planning Ordinance, 11 of 1948, which was in similar terms.
The Act and the Ordinance, which it replaced, were enacted apparently as a result of the emergency created by the continual exodus of Hindus from East Pakistan on a mass scale and the consequent immigration of a very large population into West Bengal ' as a result of the 373 partition.
The Act was enacted " to provide for the acquisition and development of land for public purposes ".
It adopts the definitions of " land ", " Collector " and " company " as in the Land Acquisition Act, 1 of 1894, to which it is, in its terms, supplementary.
In the definition section 2, " development scheme " means, a scheme for the development of land for any public purpose; and a " notified area " has been defined as an area declared as such under sub section
(1) of section 4.
" Public purpose " has been defined in cl.
(d) of section 2 as including (i) the settlement of immigrants who have migrated into the State of West Bengal on account of circumstances beyond their control, (ii) the establishment of towns, model villages and agricultural colonies, (iii) the creation of better living conditions in urban and rural areas, and (iv) the improvement and development of agriculture, forestry, fisheries and industries ; but does not include a purpose of the Union.
Section 3 authorises the State Government to appoint the " prescribed authority " for carrying out the purposes of the Act.
Section 4 is, in terms, analogous to section 4 of the Land Acquisition Act and authorises the State Government by notification in the Official Gazette to declare any area to be a notified area on being satisfied that that specified area is needed or is likely to be needed for any public purpose.
The Act was amended in 1955 by the West Bengal Act, XXIII of 1955, and one of the amendments made by that Act was to add section 4A making provision for objections to be taken by any person interested in any land within the notified area, for an opportunity of being heard and for an enquiry being made on the merits of such objections, and finally for submission to the State Government of a report on the objections raised.
We are not concerned in this case with section 4A, because it was inserted into the Act after the decision of the case by the High Court.
Section 5, with which we are mainly concerned in this case is in these terms: "5(1).
The State Government may direct the prescribed authority, or, if it so thinks fit in any case, authorise any Company ' or local authority, to prepare, in accordance with the rules, a development scheme 374 in respect of any notified area and thereupon such scheme shall be prepared accordingly and submitted, together with such particulars as may be prescribed by the rules, to the State Government for its sanction : Provided that no scheme shall be necessary for acquisition of land for the public purpose specified in sub clause (i) of clause (d) of section 2.
A development scheme submitted to the State Government under subsection (1) may, after taking into consideration any report submitted under sub.
section (2) of section 4A, be sanctioned by it either without any modification or subject to such modifications as it may deem fit.
" The proviso to a. 5 was added by the same amending Act (West Bengal Act XXIII of 1955) and is likewise inapplicable to this case.
Section 6 again is, in terms, analogous to section 6 of the Land Acquisition Act, which provides for the declaration to be published in the Official Gazette to the effect that the State Government was satisfied that any land in a notified area, for which a development scheme has been sanctioned under section 5(2) of the Act, is needed for the purpose of executing such a scheme, unless there already has been a declaration made under section 7 of the Act.
Section 7, which is another section, the construction of which is involved in this case, is in these terms: " In cases of urgency, if in respect of any notified area the State Government is satisfied that the preparation of a development scheme is likely to be delayed, the State Government may, at any time, make a declaration under section 6, in respect of such notified area or any part thereof though no development scheme has either been prepared or sanctioned under section 5." Section 8 makes the provisions of the Land Acquisition Act applicable to acquisition proceedings taken in pursuance of the declaration made, either under section 6 or section 7 of the Act, subject to certain reservations made in pursuance of the provisos to section 8, relating to taking possession, determination of the amount of compensation, and of market value.
The other sections of the Act are not relevant to the point in controversy in this case and, therefore, need not be adverted to.
375 It will be noticed that section 7 is in the nature of a proviso to section 6.
Section 7 provides that in cases of urgency, if the State Government is satisfied that the preparation of a development scheme is likely to be delayed, it may make a declaration tinder section 6 that the land was needed for a public purpose, even though no development scheme has either been prepared or sanctioned under section 5.
The section, therefore, in clear terms, authorises the State Government to issue the necessary declaration under section 6, which puts the machinery of land acquisition proceedings into motion, if it is satisfied that the public purpose necessitating the acquisition of the land in question would be subserved without the preparation of a development scheme.
The Act itself came into existence in circumstances of great urgency.
Naturally, therefore, in suitable cases, where the preparation of a development scheme would cause delay, the Government was authorised to proceed with the acquisition of land after making the necessary declaration under section 6.
As already indicated after that declaration has been made by Government in the Official Gazette and the necessary enquiry made about compensation and the making of the award, the property becomes vested in tile Government.
The question naturally arises whether there is anything in the Act which makes it obligatory on the State Government to prepare a scheme of development thereafter.
The High Court has recognised the need for taking speedy action to meet the emergency created by the heavy influx of immigrants.
The High Court has observed that section 7 does not, in terms, dispense with the framing of a development scheme and that it merely says that the Government may issue a declaration under section 6, even though no development scheme has been framed.
But the High Court has further observed that even after taking possession of the property under r. 8, framed under the Act, within three days, there is no reason why the normal process envisaged in the Act should not be gone through.
The argument proceeds further that the Act itself contemplated land planning and development and therefore the framing of a development scheme was an essential part of the 376 process.
Hence, in the view of the High Court the framing of a development scheme was necessary in the normal course before the declaration under section 6 is made by the Government, and in the case of urgency under section 7, after taking possession of the land in question.
In our opinion, such a construction of the provisions of the Act is not warranted by the terms of the Act.
The addition of the proviso to section 5, quoted above, makes it clear that the Legislature has recognised the necessity in special circumstances of not framing a scheme in the case of the public purpose contemplated in cl.
(d)(i) of section 2, namely, for the purpose of settlement of immigrants.
On a fair reading of the relevant provisions of the Statute, it becomes clear that the Act contemplated acquisitions of two distinct classes, namely, (1) where the Government bad first considered and sanctioned a development scheme under the provisions of section 5 and then made a declaration that the land in a notified area was needed for the purpose of executing the particular development scheme and (2) where the notification under section 6 is made without any development scheme being prepared and sanctioned under section 5.
Once the declaration is made under section 6, the machinery of the Land Acquisition Act, 1 of 1894, comes into operation, of course subject to the reservations contained in the provios to section 8, as aforesaid.
The Land Acquisition Act itself does not contemplate the preparation of any such scheme of development.
In other words, section 7 completely dispenses with the statutory necessity of pre paring a scheme of development as envisaged in section 5 of the Act in cases where the Government has taken the decision that it is necessary to proceed further with the acquisition proceedings without waiting for the preparation of a scheme.
To insist upon the preparation of a development scheme would amount to rendering the provisions of section 7 otiose.
There is no justification for the observation made by the High Court that the Legislature did not intend that the State Government should proceed with the land acquisition proceedings under the Act without framing a scheme of development.
377 The High Court has recognised the legal position that it is open to the Government to take possession of the land under acquisition within three days after the making of the declaration of urgency under section 7, but has insisted that, even after taking possession as a measure of urgency, the Government was bound to,, prepare a scheme of development.
If that were so, the question naturally arises: to what use the land so taken possession of was to be put.
The taking of possession in cases of urgency would itself predicate the use of the land thus taken possession of by the Government.
But if the Government were to wait for the preparation and sanction of the scheme before putting the land acquired to any use, the very purpose of declaring the urgency and the taking of possession would be defeated.
It is clear, therefore, that the Legislature did not mean to insist upon the preparation of a scheme of development in cases of land acquisition brought within the purview of section 7 of the Act.
That disposes of the appeal.
But the learned counsel for the respondent appealed to the provisions of articles 14, 19(1)(f) and 31(2) of the Constitution in aid of his contention that section 7 of the Act was ultra vires.
Apparently, there is no discrimination.
As already indicated, there are two classes of cases into which the land acquisition proceedings envisaged by the Act fall.
The two classes can be easily identified and the purpose of the classification is based on a rational consideration, having due regard to the purpose and policy underlying the Act, namely, to acquire land for the public purpose, inter alia, of resettling immigrants who had to leave their hearth and home on account of circumstances beyond their control.
Such cases of urgency, as come under section 7, are clearly meant to serve the main purpose of the Act.
In our opinion, therefore, there is no substance in the contention that discrimination is implicit in the provisions of section 7.
The attack on the Act based on articles 19(1)(f) and 31(2) of the Constitution is futile in view of the provisions of article 31B, which is in these terms: 378 " Without prejudice to the generality of the provisions contained in article 31A, none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void, or ever to have become void, on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part, and notwithstanding any judgment, decree or order of any court or tribunal to the contrary, each of the said Acts and Regulations shall, subject to the power of any competent Legislature to repeal or amended it, continue in force.
" The Act in question is the last entry (serial number 20) in the Ninth Schedule.
Article 31B, quoted above, which renders the Act immune from all attacks based on the provisions of Part III of the Constitution relating to fundamental rights, makes it unnecessary to discuss with reference to the provisions of the statute that, even if the question were open, the Act does not stiffer from any such infirmity, as is attributed to it.
In view of the considerations set out above, we allow this appeal, set aside the judgment under appeal with costs here and in the High Court.
The respondent 's petition questioning the vires of the Act is dismissed.
Appeal allowed.
| By a notification under section 4 of the West Bengal Land Deve lopment and Planning Act, 1948, the Government declared that certain plots of land belonging to the respondent were needed for the settlement of immigrants from East Pakistan and for improving living conditions in the locality.
Thereafter a second notification was issued by the Government under section 6 read with section 7 of the Act declaring that the plots covered by the previous notification were needed for the same purpose as stated therein.
When the Government started to erect structures on the land thus acquired the respondent moved the High Court under article 226 of the Constitution challenging the vires of the Act and impugning the legality of the proceedings taken under tile Act.
The petition was heard by a judge of the High Court sitting singly who negatived all the contentions of the petitioner and discharged the rule.
On appeal by the respondent under the Letters Patent, a Division Bench of the High Court held that the Act did not infringe the provisions of articles 19(i)(f) and 31(2) of the Constitution.
The High Court further held that it was incumbent on the State Government to frame a development scheme after possession of the land had been taken even though the Government was entitled to deal with the land on an emergency basis under section 7 of the Act, which runs thus: " In cases of urgency, if in respect of any notified area the State Government is satisfied that the preparation of a development scheme is likely to be delayed, the State Government may, at any time, make a declaration under section 6, in respect of such notified area or any part thereof though no development scheme has either been prepared or sanctioned under section 5 ".
The High Court allowed the respondent 's appeal and directed a writ of mandamus to issue to the Government requiring them to proceed to frame a development scheme in terms of the Act.
On appeal by the State of West Bengal on a certificate granted by the High Court, 369 Held, that the High Court was in error in issuing the mandamus against the appellants.
Section 7 of the Act com pletely dispensed with the statutory necessity of preparing a scheme of development as envisaged in section 5 of the Act in cases where the Government had taken the decision that it was necessary to proceed further with the acquisition proceedings without waiting for a development scheme.
No discrimination was implicit in the provisions of section 7 of the Act and no fundamental right of the appellant was infringed either under article 14 or articles 19(1)(f) and 31(2) of the Constitution.
|
as a populist measure to describe some provisions in the Finance Bill in the explanatory memorandum while introducing the Bill in the Parliament can neither be determinative of, nor can it camouflage the true object of the legislation.
It is not unlikely that the phrase 'welfare measures ' was used to emphasise more on the effect of the provisions thereunder on the taxpayer for populism.
[457G] & ORIGINAL JURISDICTION: Writ Petition No. 136 of 1989.
(Under Article 32 of the Constitution of India).
Narayan B. Shatye, Mukul Mudgal, Venkatesh Rao, Sudhir Gopi for the Petitioners.
A.B. Divan, V. Gauri Shankar, S.C. Manchanda, Ashok Sagar, Ms. Amrita Mitra, Ms. A. Subhashini, Ravinder Narain, section Sukumaran, M.K. Shashidharan, section Rajappa for the Respond ents.
The Judgment of the Court was delivered by VERMA, J.
This petition under Article 32 of the Consti tution challenges the constitutional validity of clause (10 C) inserted in section 10 of the Indian Income tax Act, 1961 (hereinafter referred to as 'the Act ') by the Finance Act, 1987 with effect from 1.4.1987.
Section 10 deals with incomes not included in total income for the purpose of taxation under the Act.
The effect of clause (10 C) so inserted in section 10 of the Act is that any payment re ceived by an employee of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to the economic viability of such company and other relevant cir cumstances, approve in this behalf, is not included in the total income of such employee resulting in grant of tax exemption to that extent to him.
The petitioners contend that the denial of this benefit to an employee of a private sector company at the time of his voluntary retirement amounts to an invidious distinction between public sector employees and private sector employees in the matter of taxation and is arbitrary and unintelligible amounting to hostile discrimination.
The initial submission on behalf of the petitioners was that the aforesaid clause (10 C) of section 10 of the Act is constitutionally invalid for this reason.
However, during the course of arguments the 447 stand of the petitioners was modified to contend that the provision must be so construed as to apply to all employees equally, whether of the public or private sector, in order to uphold its validity.
The question, therefore, is whether there is any such hostile discrimination as alleged by the petitioners and if so, is it possible to construe the provi sion in the manner suggested on behalf of the petitioners to apply it equally to all employees of the public as well as private sectors? The first petitioner is an employee of second respond ent Peico Electronic and Electricals Limited, a private sector company and the second petitioner is a registered trade union representing the employees of the second re spondent company.
Counsel for the second respondent company sought to support the petitioners ' case.
Counsel for the first respondent supporting the validity of the provision indicated that employees of the public sector constituted a distinct class for the purpose of taxation so that there was no discrimination between employees of the same class if the real object of the provision is borne in mind.
We shall refer to the arguments of the two sides in some detail later.
Chapter III of the Indian Income Tax Act, 1961 relates to "incomes which do not form part of the total income".
Section 10 in Chapter III deals with "incomes not included in total income".
It provides that in computing the total income of a previous year of any person, any income falling within any of the clauses therein shall not be included.
The several clauses in section 10 specify different incomes which would ordinarily be included in the total income of the assessee for the purpose of taxation but for such a provision.
Clause (10 C) of Section 10 is as under: "(10 C): any payment received by an employee ' of a public sector company at the time of his voluntary retirement in accordance with any scheme which the Central Government may, having regard to the economic viability of such company and other relevant circumstances, approve in this behalf.
" We may now summarise the arguments advanced before us.
Shri Shetye for the petitioners first contended that the reason given for enacting clause (10 C) as indicated in the memorandum explaining provisions of the Finance Bill, 1987 is that the tax benefit is given as a welfare measure.
He argued, if so, all employees whether of private or of public sector are in the same class and are entitled equally to the 448 benefit of a welfare measure for employees.
His next conten tion is that, if that be the only stated basis of the clas sification, it has no rational nexus with the object of the provision and it violates Article 14 of the Constitution.
Learned counsel for the petitioners referred to certain other clauses in section 10 of the Act which apply equally to all employees irrespective of the category of their employer, to suggest that all such measures being for bene fit of employees, no further classification of the employees is permissible with reference to the category of their employer.
It was further urged that consequently the exclu sion of non public sector employees is not only discrimina tory but also arbitrary.
On this basis it was contended that instead of striking down the provision as invalid which while denying the benefit to the public sector employees would not also serve any useful purpose for the private sector employees, the court should adopt a positive and constructive approach and the provision so construed as to extend its benefit to all employees irrespective of the category of their employer to uphold its validity.
Shri Dewan for the second respondent, a private sector company, supported learned counsel for the petitioners.
He contended that if there be any such discrimination then the question to ask is: whether the Parliament intended to confine the benefit of this welfare measure only to employ ees of the public sector? He further contended that it is possible to read the provision in such a manner as to extend its benefit to all employees instead of confining it only to the public sector employees.
In reply, Dr. Gauri Shankar for the first respondent contended that the employees of public sector constitute a distinct class for this purpose in view of the fact that the public sector undertakings have a distinct character and role in the national economy.
He argued that to make the public sector undertakings economically more viable and thereby contribute more to the national economy, it has become necessary to streamline and trim the higher echelons by inducing the unwanted personnel to leave voluntarily with a "golden hand shake" instead of resorting to retrenchment which involves several complication including protracted litigation which is not conducive to the wellbeing of the public sector undertakings.
He argued that this problem does not exist in the private sector where the higher employees can leave or be asked to leave, without corresponding diffi culties, experienced in the public sector.
This provision is meant essentially for employees at the higher levels in the public sector undertakings whose economic status cannot be equated with their counterpart in the 449 private sector.
For this reason equating the two sets of employees for the tax benefit was urged to be unjustified, there being an intelligible differentia between them.
Dr. Gauri Shankar also contended that the real object of the enactment was to streamline the public sector by reducing overstaffing at the higher level and the consequent tax exemption to the retiring employee was merely the effect or fall out of the real object.
The provision was meant to induce the unwanted personnel to seek voluntary retirement and thereby promote the real object of streamlining the ailing public sector.
To support his argument, he produced material indicating the historical background and factual matrix including material to show the great disparity in the emoluments and perquisites, i.e., compensation package of the private sector and the public sector employees particu larly at the higher levels.
The main question for decision is the discrimination alleged by the petitioners.
The principles of valid classi fication are long settled by a catena of decisions of this Court but their application to a given case is quite often a vexed question.
The problem is more vexed in cases falling within the grey zone.
The principles are that those grouped together in one class must possess a common characteristic which distinguishes them from those excluded from the group; and this characteristic or intelligible differentia must have a rational nexus with the object sought to be achieved by the enactment.
It is sufficient to cite the decision in Re The Special Courts Bill, 1978 and to refer to the propositions quoted at p. 534 537 therein.
Some of the propositions are stated thus: "2.
The State, in the exercise of its governmental power, has of necessity to make laws operating differently on different groups or classes of persons within its territory to attain particular ends in giving effect to its policies, and it must possess for that purpose large powers of distin guishing and classifying persons or things to be subjected to such laws.
The Constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula.
Therefore, classification need not be constituted by an exact or scien tific exclusion or inclusion of persons or things.
The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classifi cation in any given case.
Classification is justified if it is not palpably arbitrary.
450 4.
The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same reme dies should be made available to them irrespective of dif ferences of circumstances.
It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed.
Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.
The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience.
It can recognise even degree of evil, but the classification should never be arbitrary, artificial or evasive.
The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation.
In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be rounded on ' an intelligible differentia which distinguishes those that are grouped together from others and (2) that differentia must have a rational relation to the object sought to be achieved by the Act.
The differentia which is the basis of the classification and the object of the Act are distinct things and what is necessary is that there must be a nexus between them.
In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon person arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legisla tion, provided such classification is not arbitrary in the sense above mentioned.
451 11.
Classification necessarily implied the making of a distinction or discrimination between persons classified and those who are not members of that class.
It is the essence of a classification that upon the class are cast duties and burdens different from those resting upon the general pub lic.
Indeed, the very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality ,n no manner determines the matter of constitutionality." (emphasis supplied) It is well settled that the latitude for classification in a taxing statute is much greater; and in order to tax something it is not necessary to tax everything.
These basic postulates have to be borne in mind while determining the constitutional validity of a taxing provision challenged on the ground of discrimination.
The scope for permissible classification in a taxing statute was once again considered in a recent decision.
of this Court in P.H. Ashwathanarayana vs State of Karnataka, [1989] Suppl.
1 SCC 696.
After a review of earlier deci sions, it was stated therein as under: "It is for the State to decide what economic and socialpoli cy it should pursue and what discriminations advance those social and economic policies.
In view of the inherent com plexity of these fiscal adjustments, courts give a larger discretion to the legislature in the matter of its prefer ences of economic and social policies and effectuate the chosen system in all possible and reasonable ways . . " (emphasis supplied) In Federation of Hotel and Restaurant Association of India vs Union of India, , it was said as under: ".
The test could only be one of palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience." ".
A reasonable classification is.
one which includes all who are similarly situated and none who are not.
In order to ascertain whether persons are similarly placed, one must look beyond the classification and to the purposes of the law." (emphasis supplied) 452 This Court has held in Kerala Hotel and Restaurant Association & Ors.
vs State of Kerala & Ors.
, ; as under: "The scope for classification permitted in taxation is greater and unless the classification made can be termed to be palpably arbitrary, it must be left to the legislative wisdom to choose the yardstick for classification, in the background of the fiscal policy of the State to promote economic equality as well . . ' ' "Thus, it is clear that the test applicable for striking down a taxing provision on this ground is one of palpable arbitrariness applied in the context of the felt needs of the times and societal exigencies informed by experience, and the courts should not interfere with the legislative wisdom of making the classification unless the classifica tion is found to be invalid by this test." (emphasis supplied) It is useful to refer also to the decision of this Court in 1.
T.O. vs N. Takin Roy Rymbai, a similar question relating to validity of classification in another clause of section 10 of the In come Tax Act, 1961 arose for consideration.
This Court while upholding the validity of the classification summarised the principles applied, as under: ". it must be remembered that the State has, in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerably wide discretion in the matter of classification for taxation purposes.
Given legislative competence, the legislature has ample freedom to select and classify persons, districts, goods, properties, incomes and objects which it would tax, and which it would not tax.
So long as the classification made within this wide and flexi ble range by a taxing statute does not transgress the funda mental principles underlying the doctrine of equality, it is not vulnerable on the ground of discrimination merely be cause it taxes or exempts from tax some incomes or objects and not others.
Nor is the mere fact that a tax falls more heavily on some in the same category, by itself a ground to render the law invalid.
It is only when within the range of its selection, the law operates unequally and cannot be justified on the basis of a valid classification, that there 453 would be a violation of Article 14.
(see East India Tobacco Co. vs Andhra Pradesh; Vivian Joseph Ferriera vs Municipal Corporation of Greater Bombay; Jaipur Hosiery Mills vs State of Rajasthan)" (emphasis supplied) We must, therefore, look beyond the ostensible.
classi fication and to the purpose of the law and apply the test of 'palpable arbitrariness ' in the context of the felt needs of the times and societal exigencies informed by experience to determine reasonableness of the classification.
It is clear that the role of public sector in the sphere of promoting the national economy and the context of felt needs of the times and societal exigencies informed by experience gained from its functioning till the enactment are of significance.
There is no dispute that the impugned provision includes all employees of the public sector and none not in the public sector.
The question is whether those left out are similarly situated for the purpose of the enactment to render the classification palpably arbitrary.
It is only if this test of palpable arbitrariness applied in this manner is satis fied, that the provision can be faulted as discriminatory but not otherwise.
Unless such a defect can be found, the further question of construing the provision in such a manner as to include all employees and not merely employees of public sector companies, does not arise.
It is first necessary to discern the true purpose or object of the impugned enactment because it is only with reference to the true object of the enactment that the existence of a rational nexus of the differntia on which the classification is based, with the object sought to be achieved by the enactment, can be examined to test the validity of the classification.
In Francis Bennion 's Statu tory Interpretation, 1984 edition, the distinction between the legislative intention and the purpose or object of the legislation has been succinctly summarised at p. 237 as under: "The distinction between the purpose or object of an enact ment and the legislative intention governing it is that the former relates to the mischief to which the enactment is directed and its remedy, while the latter relates to the legal meaning of the enactment.
" There is thus a clear distinction between the two.
While the purpose or object of the legislation is to provide a remedy for the malady, the legislative intention relates to the meaning or exposition 454 of the remedy as enacted.
While dealing with the validity of a classification, the rational nexus of the differentia on which the classification is based has to exist with the purpose or object of the legislation, so determined.
The question next is of the manner in which the purpose or object of the enactment has to be determined and the materi al which can be used for this exercise.
For determining the purpose or object of the legisla tion, it is permissible to look into the circumstances which.
prevailed at the time when the law was passed and which necessitated the passing of that law.
For the limited purpose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady.
In A. Thangal Kunju Musaliar vs
M. Venkitachalam Potti & Anr., ; , the State ment of Objects and Reasons was used for judging the reason ableness of a classification made in an enactment to see if it infringed or was contrary to the constitution.
In that decision for determining the question, even affidavit on behalf of the State of "the circumstances which prevailed at the time when the law there under consideration had been passed and which necessitated the passing of that law" was relied on.
It was reiterated in State of West Bengal vs Union of India, 1 that the Statement of Objects and Reasons accompanying a Bill, when introduced in Parliament, can be used for 'the limited purpose of under standing the background and the antecedent state of affairs leading up to the legislation. ' Similarly, in Pannalal Binjraj vs Union of India, ; challenge to the validity of classification was repelled placing reliance on an affidavit filed on behalf of the Central Board of Revenue disclosing the true object of enacting the impugned provision in the Income Tax Act.
Not only this, to sustain the presumption of constitu tionality, consideration may be had even to matters of common knowledge; the history of the times; and every con ceivable state of facts existing at the time of legislation which can be assumed.
Even though for the purpose of con struing the meaning of the enacted provision, it is not permissible to use these aids, yet it is permissible to look into the historical facts and surrounding circumstances for ascertaining the evil sought to be remedied.
The distinction between the purpose or object of the legislation and the legislative intention, indicated earlier, is significant in this exercise to emphasise the availability of larger mate rial to the Court for reliance when determining the purpose or object of the legislation as distinguished from the meaning of the enacted provision.
455 We propose to utilise these permissible aids for dis cerning the purpose or object of the legislative provision in order to examine the validity of the classification made therein.
Strong reliance has been placed on behalf of the peti tioners on the Memorandum explaining the provisions in the Finance Bill, 1987, wherein the explanatory note relating to clause 4(a) of the Bill proposing insertion of clause (10 C) in Section 10 of the Income tax Act, 1961 appears under the heading 'Welfare Measures '.
It may be mentioned that this heading is only in the explanatory memorandum and not in the 'Notes on Clauses ' appended to the 'Statement of Objects and Reasons ' of the Bill.
(See [1987] 165 ITR (Statutes) at pp. 119, 122 & 155).
We would presently show that the petition ers cannot draw support from this heading in the explanatory memorandum.
Moreover, an explanatory memorandum is usually 'not an accurate guide of the final Act '.
(See Francis Bennion 's Statutory Interpretation, 1984 Ed.
at p. 529).
It was urged that the impugned provision being described as a welfare measure in the explanatory memorandum, the object of the enactment was the welfare of the employees and, therefore, no further classification of the employees could be made.
It was argued that the heading 'welfare measures ' is, therefore, decisive of the object of its enactment.
In our opinion, this cannot be accepted.
The Statement of Objects and Reasons (See (1987) 165 ITR (Stat utes) at p. 119) is as under: "The object of the Bill is to give effect to the financial proposals of the Central Government for the financial year 1987 88.
The Notes on Clauses explain the various provisions contained in the Bill.
" Thereafter, the Notes on clauses in the Finance Bill, 1987 are from pp. 119 151.
The Note relating to this clause at p. 122 is as under: "Clause 4 seeks to amend section 10 of the Income Tax Act.
Sub Clause (a) of this clause proposes to insert a new clause (10 C) in this section.
Under the proposed amendment, any payment received by an employee of a public sector company at the time of his voluntary retirement in accord ance with any scheme which the Central Govern 456 ment may, having regard to.
the economic viability of the public sector company and other relevant circumstances, approve in this behalf, shall be exempt from tax.
This amendment will take effect from 1st April, 1987, and will, accordingly apply in relation to the assessment year 1987 88 and subsequent years.
" No where in the 'Notes on Clauses ' the proposal in the Bill is described as a welfare measure.
It is then in the memo randum explaining the provisions in the Finance Bill, 1987 that the provisions are divided under different heads, one of which is 'welfare measures '.
The subheading relating to this proposal is mentioned as 'Exemption of compensation received by public sector employees on voluntary retire ment '.
It is mentioned in paragraph 13 of the explanatory memorandum that a number of public sector undertakings have formulated voluntary retirement schemes for their employees; that under section 10(10 B) of the Income Tax Act any com pensation received by a workman at the time of his retrench ment is exempt upto the specified limit; and that this limit of exemption under section 10 (10 B) is, however, not ap plicable in respect of compensation received under certain schemes approved by the Central Government.
By enacting section 10 (10 C), the proposal obviously was to extend the same benefit to the payment made under these approved schemes as was existing for compensation under approved scheme given by section 10 (lOB).
The heading of 'welfare measures ' applies also to paragraph 14 in the memorandum relating to modification of provisions relating to deduction in respect of donations to certain funds etc.
It is, there fore, clear that in this explanatory memorandum the headings are fairly wide and matters collected under the same heading may be diverse not giving a true indication of the object of the provision.
It is also significant that the proposal to amend sec tion 10 by inserting a new clause (10 C) therein was con tained in sub clause (a) of clause 4 of the Finance Bill, while sub clause (b) of clause 4 of the Finance Bill pro posed to insert a new item in sub clause (iv) of clause (15) of section 10 to provide that interest payable by the public sector companies on certain specified bonds and debentures will not form part of the tax payer 's total income subject to the specified conditions.
This was in pursuance of a series of public sector bonds being floated which are in tended to yield tax free return to the holders of such bonds.
The effect of the amendment so made yielding tax free return to the holders of public sector bonds is similar to the amendment by 457 insertion of a new clause (10 C), the effect of which is to grant tax exemption to employees of the public sector in respect of the amount received under the voluntary retire ment scheme approved by the Central Government.
Both these proposals relating to the amendment of section 10 were in sub clauses (a) and (b) of clause 4 of the Finance Bill.
Ordinarily in the memorandum explaining the provisions in the Finance Bill both the sub clauses of clause 4 should have been, therefore, mentioned under the same heading being of essentially the same nature.
It is interesting to note that the proposal in clause 4(b) was mentioned in paragraph 17 of the explanatory memorandum under the heading 'Incen tives for growth and modernisation ' with the sub heading 'Measures for raising resources for the public sector '.
Admittedly, the effect of this provision was to grant a tax benefit to the holders of the public sector bonds by amend ing section 10 in this manner but the real object for giving that benefit to the tax payer was to provide an incentive for growth and modernisation by adopting a measure for raising the resources for the public sector.
If the proposal in sub clause of clause 4 of the Finance Bill fell in this category, there is no reason why the proposal in sub clause (a) of the same clause of the Bill, both sub clauses relat ing to amendment of section 10, can be treated differently merely because in the explanatory memorandum the two sub clauses are under different headings.
This distribution of the sub clauses of the same clause in the Finance Bill under different heads in the explanatory memorandum is sufficient to show that no particular significance can be attached to the heading 'welfare measures under which the proposal to insert clause (10 C) in section 10 of the Act was placed in that memorandum.
We see no reason why insertion of clause (10 C) in section10 cannot also be described as incentive for growth and modernisation being a measure for improvement of the public sector.
Obviously the incentive given thereby is to the employees of the public sector companies to resort more readily to the voluntary retirement scheme which would enable improvement of public sector by streamlining its staff.
A catch phrase possibly used as a populist measure to describe some provisions in the Finance Bill in the explana tory memorandum while introducing the Bill in the Parliament can neither be determinative of, nor can it camouflage the true object of the legislation.
It is not unlikely that the phrase 'welfare measures ' was used to emphasise more on the effect of the provisions thereunder on the tax payer for populism.
In view of the fact that the challenge is based on the initial 458 assumption of equality between all employees of the public sector and the private sector, it will be useful to refer to the nature and role of the public sector undertakings vis a vis those of the private sector along with the histor ical background and surrounding circumstances leading to enactment of the impugned provision.
For this purpose, we would first refer to the counter affidavit of Shri S.K. Abrol, Officer onSpecial Duty, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, New Delhi, which states the reasons for insertion of clause (10 C) in section 10 of the Income Tax Act, 1961.
The coun ter affidavit states with reference to some other clauses of section 10 of the Act that the legislature for purposes of exemption from income tax has always differentiated between private sector employees and those in the public sector and Government employment.
It states further as follows: "As submitted in the paragraph above, sectionl 10 (10 C) was introduced by the Finance Act, 1987 w.e.f.
1.4.1987 and the legislature in its wisdom sought to restrict these benefits to only the employees in the public sector.
The reason for introducing this provision is contained in the Circular of the Central Board of Direct Taxes explaining the Finance Act, 1987, relevant extract from which is reproduced hereun der: 15.1.
At present under section 10 (10B) any com pensation received by a workmen at the time of his retire ment is exempted upto the amount calculated in accordance with section 25F of the Industrial Disputes Act or Rs.50,000, whichever is less.
The limit is, however, not applicable in respect of compensation received under certain schemes approved by the Central Government.
15.2 A number of public sector undertakings.have formulated voluntary retirement schemes for their employees.
With a view to extend relief to such employees, the Finance Act, 1987, by introducing new clause (10C) in section 10, provides exemption in respect of any payment received by them at the time of their voluntary retirement in accordance with any scheme which the Central Government may approve, having regard to the economic viability of the public sector company and other relevant circumstances.
This exemption will be available to any employee whether a workman or an executive.
459 15.3.
This amendment shall come into force w.e,f.
1.4.1987 and will, accordingly, apply to assessment year 1987 88 and subsequent year. ' "It is submitted that for all purposes, the private sector and the public sector have been treated differently and are known to be different classes.
The Industrial Policy Resolu tion, 1956, which reviewed the earlier Industrial Policy, clearly distinguished industries in the public sector and those in the private sector.
The Industrial Policy Resolu tion mentioned that for adoption of socialist pattern of society as the national objective, the requirement was that industries of basic and strategic importance, or in the nature of public utility service, should be in the public sector.
The Industrial Policy Resolution placed the indus tries in three different categories; . .
Thus, this categorisation of industries into public sector, private sector was on the basis of Articles 38 and 39 of the Consti tution of India, as has been mentioned in the Industrial Policy Resolution, 1956." "The respondent submits that there were certain basic distinctions between the undertakings in the private sector and in the public sector as has been observed by this Hon ' ble Court in the case of R.D. Shetry vs International Air port Authority of India; , A public sector undertaking is either established by a statute or incorpo rated under law.
Public Sector Undertakings are wholly controlled by Government not only in their policy making but also in carrying out the functions entrusted to them by law establishing it or by charter of their in corporation.
As such public sector undertakings are bound by any directions that may be issued by Government from time to time in re spect of policy matters.
The entire share capital of the public sector undertakings is held by the Government and it is under the direct control and supervision of Government.
The pay scales of the employees in the public sector are fixed by the administrative Ministry inconsultation with the Bureau of Public Enterprises, who exercise complete control over the actions of public sector undertakings.
The public sector undertakings are answerable to the Parliament through their administrative Ministries.
The entire budget of the public sector undertakings is controlled by the 460 administrative Ministries.
The Comptroller and Auditor General audits the accounts of the public sector undertak ings and any leakages etc.
are brought to the notice of Parliament.
The recruitment and conduct rules of the public sector employees are subject to overall control of Govern ment through Bureau of Public Enterprises . . " " . .
Section 10 (10C), while extending the benefit to employees of public sector has, as its basis, exempted incomes received from Government through public sector undertakings.
The distinction is based on intelligent differentiation and the object of this differentiation is to promote the interests of the employees of public sector undertakings so as to bring this at par with the private sector employees whose emoluments and other conditions of service are not governed by any statute or are not under any control." "The respondent submits that the legislature is aware of the differentiation between the public sector undertakings and private sector undertakings.
and in its wisdom. has chosen to restrict the benefit only to the public sector employees . . " "The respondent submits that the extension of the benefit of section 10 (10C) of the Income Tax Act to the employees of the private sector is likely to be misused by way of fre quent payment to the employees in the garb of voluntary retirement benefits and it will not be possible to provide necessary safeguards in law to check such practices.
This would defeat the very purpose of the Scheme of Voluntary Retirement, besides leading to large scale revenue loss." (emphasis supplied) The counter affidavit filed on behalf of respondent No. 1 disclosing the reasons which led to the insertion of clause (10C) in section 10 of the Act confining the benefit granted thereby only to employees of the public sector indicates that the purposes of the legislation include reduction in the existing gap between the lower compensation package in public sector and the higher compensation package of the counterpart in private sector in addition to prevent ing misuse of the benefit in private sector which is not subject to the control of administration by Government like that in the public sector.
It is evident from the material produced before us that the compensation package in the public 461 sector, particularly at the higher levels, is much lower than that in the private sector.
Some insight into the existing state of the public sector undertakings and their viability with suggestions for improvement are found in the First Dr. L.K. Jha Memorial Lecture, delivered on the 6th December, 1988, by Shri R.N. Malhotra, Governor, Reserve Bank of India, on "Growth and Current Fiscal Challenges".
While giving an overview of the progress during the last four decades, the speaker referred to the 'performance of the public sector ' as under: "The public sector which now accounts for about half the total national investment has made crucial contributions to the development of the economy by expanding the infrastruc ture, establishing basic industries and producing goods and services of strategic importance.
The public sector has, however, not been able to generate surpluses commensurate with its share in plan outlays.
" On "planning and resources" and "financing of public sector", he said: "An analysis of the financing pattern of public sector plan expenditures indicates that over time the shares of balance from current revenues and additional resource mobilisation have been declining while reliance on borrowed funds has been rising . . " Therefore, he referred to the deterioration in the finances with reference to the growing expenditure, as under: " . .
Interestingly, about two thirds of the savings of these enterprises represent provisions for depreciation which are supposed to cover replacement costs, Though sever al of these enterprises are operating efficiently, The savings of public sector enterprises as a group are not commensurate with the investment made in them.
According to the public enterprises survey, the capital employed in the Central Public Sector Enterprises amounted to about Rs.52,000 crores at the end of 1986 87.
About 100 of these units made losses amounting to Rs. 1,708 crores and 109 units were making after tax profit of Rs.3,478 crores of which Rs.2,142 crores came from the oil sector.
The rate of 462 return was 6.0 per cent before tax and 3.4 per cent after tax.
If the oil sector which benefits from the oil price policy is excluded, the rate of return would be negative . .
There is imperative need for substantial improvement in the working and profitability of public sector undertakings.
" Referring to the existing state of "public debt", he said: "The Long Term Fiscal Policy (LTFP) had raised concern about increasing reliance on borrowings to finance the budgetary outlays and had suggested containment of domestic borrowings including those from the Reserve Bank . .
In the event, the level of borrowings has been much higher than that envisaged in the Seventh Plan . .This has happened de spite the fact that some public sector enterprises, previ ously dependent on the budget, were allowed to raise re sources directly from the capital market through bond float ations of the order of Rs.2,000 crores each year from 1986 87 . .
Growing levels of borrowing by the Government and public sector undertakings raise two major concerns.
First, whether the present level of Government borrowing is sus tainable? Unless there are adequate surpluses in the revenue account which can be utilised for debt servicing, the budge tary deficit would widen.
The increased borrowings for debt servicing would create the vicious circle of progressively higher interest burdens and still higher borrowing.
The second issue is whether the increasing level of Government borrowing coupled with that of public sector undertakings would result in crowding out of private sector investments.
Since the total investment in the economy is shared about equally between the public and private sectors, it is impor tant to ensure that the 'requirements of the private sector are also adequately met so that the overall growth targets of the national economy are achieved. ' ' Dealing with the efficiency issues, he said as under: "I shall now refer briefly to the efficiency issues with special reference to the public sector . .
The persist ence of a high ICOR would, however, indicate considerable scope of improvement in efficiency . . 463 Cost and time over runs are major contributors to the high ICOR . .
The public sector has rendered great service in providing infrastructure and establishing basic and strategic industries.
Managerial skills in that sector are generally of a high order.
The aim should there fore be to promote productivity and profitability of this sector by introducing the requisite policy changes and improvements.
One of the important aims of this sector which needs reiteration is its financial viability.
Efficient use of manpower is imperative.
This is difficulty to ensure if overmanning persists along with restrictive practices which resist technological change and systems improvement . . " (emphasis supplied) The factual matrix and historical background appearing from the above material prove that the public sector needs toning up.
One of its affliction is overmanning or surplus staff, the obvious remedy of which is streamlining, by removing the non productive and unwanted personnel, if possible, without any complication.
Retrenchment is often an unsafe course to adopt.since it may lead to protracted litigation and uncertain outcome.
We cannot overlook this well known, though unfortunate fact.
A safe mode to relieve the public sector of its unpro ductive and surplus manpower is to induce those persons to seek voluntary retirement under a scheme providing some incentive or inducement for seeking voluntary retirement.
Clause (10 B) of section 10 of Incometax Act, 1961, does grant tax exemption in respect of any compensation received at the time of retrenchment upto the prescribed limit.
That limit, however, does not apply to compensation received under certain schemes approved by the Central Government.
It is, therefore, reasonable that same benefit be also extended in respect of any payment received by an employee of the public sector on his voluntary retirement under a scheme similarly approved by the Central Government.
The public sector 's role visualised on advent of freedom was as an 'instrument of development and national strength ', a 'key to our self reliance ', 'catalyst of social change ' and for attaining 'commanding heights of the economy ' in keeping with our national aim of Welfare State and a social ist economy.
Unfortunately, inspite of a 464 strong rationale for setting up and promoting public sector in the national economy, it has not so far fully justified the legitimate expectation and a large number of the public sector undertakings are losing concerns.
A study into the causes which all the public sector has shown that one of its drawbacks is overstaffing.
Streamlining the public sector to get rid of its unproductive and unwanted personnel is, therefore, a felt need.
A scheme whereby such unwanted personnel can be induced to leave voluntarily granting some incentive for doing so is, therefore, ultimately beneficial to the health and prosperity of the public sector and conse quently to the national economy.
These factors alone are sufficient to provide an intelligible differentia between public and private sectors and its rational nexus with the object of improving the performance of public sector, pro moting national economy.
It is useful to remember that the country having opted for mixed economy, the healthy and vigorous functioning of the public sector undertakings is conducive to the benefit of the private sector as well, in addition to promoting the well being of the national economy.
A point of view emerging currently is that just as public sector undertakings are outside the purview of the Monopolies and Restrictive Trade Practices Act by virtue of the exemption conferred on them, the Income tax Act should confer similar exemption to it from tax liability by suitable amendment in section 10 of the Act as is given to local authorities, housing boards, etc.
This view is supported on the ground that the exemption from tax liability or public sector undertakings would ultimately benefit the consumers of the products of the public sector undertakings.
This is not an irrelevant cir cumstances to indicate that according to the general percep tion, there is a distinction between the public and private sectors.
In some earlier decisions of this Court, the public sector has been treated as a distinct class for the purpose of exemption under Statutes.
In Hindustan Paper Corporation Ltd. vs Government of Kerala & Ors., ; , a provision granting exemp tion to Government companies and cooperative societies alone for selling forest produce at less than selling price fixed under the Kerala Forest Produce (Fixation of Selling Price) Act, 1978 was held to be constitutionally valid and not violative of Articles 14 and 19(1)(g) of the Constitution of India.
It was held that the Government or public sector undertakings formed a distinct class.
In this context, it was held as under: " . .
As far as Government undertakings and companies are concerned, it has to be held that they form a class by 465 themselves since any profit that they may make would in the end result in the benefit to the members of the generalpub lic.
The profit, if any, enriches the public coffer and not the private coffer.
The role of industries in the public sector is very sensitive and critical from the point of view of national economy.
Their survival very often depends upon the budgetary.
provision and not upon private resources which are available to the industries in the private sector . . " (emphasis supplied) Similarly, in M. Jhangir Bhatusha etc.
vs Union of India & Ors. etc.
, 1982 Judgments Today 2 SC 465, a concession in import duty granted to the State Trading Corporation was upheld on the ground that public policy can support the differentiation.
It is clear that the Government or the public sector undertakings have been treated as a distinct class separate from those in the private sector and the fact that the profit earned in the former is for public benefit instead of private benefit, provides an intelligible differentia from the social point of view which is of prime importance for the national economy.
Thus, there exists an intelligible differentia between the two categories which has a rational nexus with the main object of promoting the national econom ic policy or the public policy.
This element also appears in the impugned enactment itself wherein 'economic viability of such company ' is specified as the most relevant circumstance of grant of approval of the scheme by the Central Govern ment.
This intrinsic element in the provision itself sup ports the view that the main object thereof is to promote and improve the health of the public sector companies even though its effect is a benefit to its employees.
As already indicated, clause (10 C) of section 10 of the Act itself mentions economic viability of a public sector company as the most relevant circumstance to attract the provision.
The economic status of employees of a public sector company who get the benefit of the provision is also lower as compared to their counterpart in the private sec tor.
If this be the correct perspective as we think it is in the present case, the very foundation of the challenge to the impugned provision on the basis of economic equality of employees in both sectors is non existent.
Once the stage is reached where the differentiation is rightly made between a public sector company and a private sector company and that too essentially on the ground of economic viability of the public sector company and other relevant circumstances, the 466 argument based on equality does not survive.
This is inde pendent of the disparity in the compensation package of employees in the private sector and the public sector.
The argument of discrimination is based on initial equality between the two classes alleging bifurcation thereafter between those who stood integrated earlier as one class.
This basic assumption being fallacious, the question of any hostile discrimination by granting the benefit only to a few in the same class denying the same to those left out does not arise.
We shall now refer to some other clauses of section 10 of the Act to which reference was made at the hearing in support of the rival contentions.
Sub clause (i) of clause (10) of section 10 confines the benefit thereunder only to the Government servants, defence personnel and employees of a local authority.
Sub clause (i) of clause (10 A) similarly confines the benefit to Government servants, defence person nel and employees of a local authority or a corporation established by a statute.
Clause (10 A) also makes a dis tinction between the Government employees and other employ ees.
Clause (10 B) also removes the limit in respect of any payment as retrenchment compensation under a scheme approved by the Central Government.
Some other clauses in section 10 of the Act further show that the scheme of section 10 con templates a distinction between employees based on the category of their employer.
Accordingly, clause (10 C) therein is not a departure from the existing scheme but in conformity with some clauses earlier enacted therein.
Once the impugned provision contained in the newly inserted clause (10 C) of section 10 of the Income Tax Act, 1961 is viewed in the above perspective keeping in mind the true object of the provision, there is no foundation for the argument that it is either discriminatory or arbitrary.
There is a definite purpose for its enactment.
One of the purposes is streamlining the public sector to cure it of one of its ailments of overstaffing which is realised from experience of almost four decades of its functioning.
In view of the role attributed to the public sector in the sphere of national economy, improvement in the functioning thereof must be achieved in all possible ways.
A measure adopted to cure it of one of its ailments is undoubtedly a forward step towards promoting the national economy.
The provision is an incentive to the unwanted personnel to seek voluntary retirement thereby enabling the public sector to achieve the true object indicated.
The personnel seeking voluntary retirement no doubt get a tax benefit but then that is an incentive for seeking voluntary retirement and at any rate that is the effect of the provision or its fall out and not its true 467 object.
It is similar to the incentive given to the taX payers to invest in the public sector bonds by non inclusion of the interest earned thereon in the tax payer 's total income which promotes the true object of raising the re sources of the public sector for its growth and modernisa tion.
The real distinction between the true object of an enactment and the effect thereof, even though appearing to be blurred at times, has to be borne in mind, particularly in a situation like this.
With this perspective, keeping in view the true object of the impugned enactment, there is no doubt that employees of the private sector who are left out of the ambit of the impugned provision do not fall in the same class as employees of the public sector and the benefit or the fall out of the provision being available only to the public sector employees cannot render the classification invalid or arbitrary.
This classification cannot, therefore, be faulted.
Some of the cases cited by the petitioners in support of the contention of equality of employees in the public and private sectors in the present context also are inapplica ble.
The decision in Hindustan Antibiotics vs Workmen, ; related to wage fixation and is distin guishable.
S.K. Dutta, I.T.O. vs Lawrence Singh Ingty, distinguished and explained in relied on by us.
Moreover, which also related to a provision in Section 10 of Income tax Act, 1961 itself says as under: "Classification for purposes of taxation or for exempting from tax with reference to the source of the income is integral to the fundamental scheme of the Income tax Act.
Indeed, the entire warp and woof of the 1961 Act has been woven on this pattern." " . .
Suffice it to say that classification of sources of income is integral to the basic scheme of the 1961 Act.
It is nobody 's case that the entire scheme of the Act is irrational and violative of article 14 of the Constitution.
Such an extravagent contention has not been canvassed before us.
Thus, the classification made by the aforesaid sub clause (a) for purposes of exemption is not unreal or un known.
It conforms to a well recognised pattern.
It is based on intelligible differentia.
The object of this differentia tion between income accruing or received from a source in the specified areas and the income accruing or received from a source outside such areas, is to benefit not only the members of the Scheduled Tribes residing in the specified 468 areas but also to benefit economically such areas . . " The other submission of the petitioners is to read the provision in a manner which would cover all employees in cluding employees of the private sector within the ambit of the impugned provision.
This further question does not arise in view of our conclusion that there is no discrimination made out.
We may, however, mention that the Finance Bill, 1987 while inserting a new clause (10 C) in section 10 of the Income tax Act simultaneously inserted a new clause (36 A) in section 2 of the Act with effect from 1.4.1987 defining 'public sector company ', which expression has been used in the newly inserted clause (10 C) of section 10.
In view of the simultaneous definition of 'public sector compa ny ' in the Act, there can be no occasion to construe this expression differently without which a private sector compa ny cannot be included in it.
It is, therefore, not possible to construe the impugned provision while upholding its validity in such a manner as to include a private sector company also within its ambit.
Consequently, the writ petition is dismissed, but in the facts and circumstances of the case, there shall be no order as to costs.
All the interim orders shall stand vacated.
T.N.A. Petition dismissed.
| By Finance Act, 1987, clause (10 C) was inserted in section 10 of the Income Tax Act, 1961.
The effect of this clause was to grant tax exemption to employees of the public sector in respect of the amount received under the voluntary retirement scheme approved by the Central Government.
The petitioners an employee of a private sector company and the trade union of the said private company flied a writ petition in this 442 court challenging the validity of clause (10 C) contending; (i) the denial of benefit of tax exemption to employees of private sector company being arbitrary and discriminatory, the impugned clause was unconstitutional as violative of Article 14: (ii) the heading 'Welfare Measures ' to the Memorandum explaining the provisions in the Finance Bill 1987 proposing insertion of clause (10 C) in section 10 of the Income Tax Act, 1961 was decisive of the object of its enactment; the tax benefit being in the nature of welfare measure the impugned clause must be so construed as to apply to all employees equally, whether of the public sector or private sector in order to uphold its validity.
Dismissing the petition, this Court, HELD: There is a distinction between the public and private sectors.
The Government or the public sector under takings are as a distinct class separate from those in the private sector and the fact that the profit earned in the former is for public benefit instead of private benefit, provides an intelligible differentia from the social point of view which is of prime importance for the national econo my.
Thus, there exists an intelligible differentia between the two categories which has a rational nexus with the main object of promoting the national economic policy or the public policy.
This element also appears in the impugned enactment itself wherein 'economic viability of such compa ny ' is specified as the most relevant circumstance for grant of approval of the scheme by the Central Government.
This intrinsic element in the provision itself supports the view that the main object thereof is to promote and improve the health of the public sector companies even though its effect is a benefit of its employees.
The economic status of em ployees of a public sector company who get the benefit of the provision is also lower as compared to their counterpart in the private sector.
Viewed in this perspective, the very foundation of the challenge to the impugned provision on the basis of economic equality of employees in both sectors is non existent.
Once the stage is reached where the differen tiation is rightly made between a public sector company and a private sector company and that too essentially on the ground of economic viability of the public sector company and other relevant circumstances, the argument based on equality does not survive.
This is independent of the dis parity in the compensation package of employees in the private sector and the public sector.
The argument of dis crimination is based on initial equality between the two classes alleging bifurcation thereafter between those who stood integrated earlier as one class.
This basic assumption being fallacious, the question of any hostile discrimination by granting the benefit only to a few in the same class denying the same to those left out does not arise.
[465D H; 466A B] 443 2.
The purposes of the impugned legislation include reduction in the existing gap between the lower compensation package in public sector and the higher compensation package of the counterpart in private sector in addition to prevent ing misuse of the benefit in private sector which is not subject to the control of administration by Government like that in the public sector.
One of the purposes is streamlin ing the public sector to cure it of one of its ailments of overstaffing.
The provision is an incentive to the unwanted personnel to seek voluntary retirement thereby enabling the public sector to achieve the true object indicated.
The personnel seeking voluntary retirement no doubt get a tax benefit but then that is an incentive for seeking voluntary retirement and at any rate that is the effect of the provi sion or its fallout and not its true object.
The real dis tinction between the true object of an enactment and the effect thereof, even though appearing to be blurred at times, has to be borne in mind, particularly in a situation like this.
[466F H; 467A B] 2.1 Keeping in view the true object of the impugned enactment, there is no doubt that employees of the private sector who are left out of the ambit of the impugned provi sion do not fall in the same class as employees of the public sector and the benefit of the fall out of the provi sion being available only to the public sector employees cannot render the classification invalid or arbitrary.
The other clauses in section of the Act further show that the scheme of section 10 contemplates a distinction between employees based on the category of their employer.
This classification cannot, therefore, be faulted.
[67B C] Hindustan Paper Corporation Ltd. vs Government of Kerala vs Union of India & Ors.
, Judgments Today ; L.K. Jha Memorial Lecture, delivered on the 6th December 1988, by Shri R.N. Malhotra, Governor, Reserve Bank of India, on "Growth and Current Fiscal Challenges", re ferred to.
Hindustan Antibiotics vs Workmen, ; and S.K. Dutta, 1.
T.O. vs Lawrence Singh Ingty, , distinguished and held inapplicable.
R.D. Shetty vs International Airport Authority of India, ; , cited.
2.2 In view of the simultaneous definition of 'public sector company ' in the Income Tax Act, there can be no occasion to construe this 444 expression differently without which a private sector compa ny cannot be included in it.
It is, therefore, not possible to construe the impugned provision while upholding its validity in such a manner as to include a private sector company also within its ambit.
[468C D] 3.
The principles of valid classification are that those grouped together in one class must possess a common charac teristic which distinguishes them from those excluded from the group; and this characteristic or intelligible differen tia must have a rational nexus with the object sought to be achieved by the enactment.
[449D] Re The Special Courts Bill, 1978, , referred to.
The latitude for classification in a taxing is much greater; and in order to tax something it is not necessary to tax everything.
These basic postulates have to be borne in mind while determining the constitutional validity of a taxing provision challenged on the ground of discrimination.
1451C] P.H. Ashwathanarayana vs State of Karnataka, [1989] (Supp.) 1 S.C.C. 696; Federation of Hotel and Restaurant Association of India vs Union of India, [1989] 178 I.T.R. 97; Kerala Hotel and Restaurant Association & Ors.
vs State of Kerala & Ors.
, ; and 1. T.O. vs N. Takin Roy Rymbai, SC, referred to.
East India Tobacco Co. vs Andhra Pradesh, ; ; Vivian Joseph Ferriera vs Municipal Corporation of Greater Bombay, ; and Jaipur Hosiery Mills vs State of Rajasthan, ; , cited.
The Court should, therefore, look beyond the obsten sible classification and to the purpose of the law and apply the test of 'palpable arbitrariness ' in the context of the felt needs of the times and societal exigencies informed by experience to determine reasonableness of the classifica tion.
[453B] 5.1 It is necessary to discern the true purpose or object of the impugned enactment because it is only with reference to the true object of the enactment that the existence of a rational nexus of the differentia on which the classification is based, with the object sought to be achieved by the enactment, can be examined to test the validity of the classification.
[453E F] 445 5.2 There is a clear distinction between the legislative intention and the purpose or object of the legislation.
While the purpose or object of the legislation is to provide a remedy for the malady, the legislative intention relates to the meaning or exposition of the remedy as enacted.
While dealing with the validity of a classification, the rational nexus of the differentia on which the classification is based has to exist with the purpose of object of the legis lation, so determined.
[453H; 454A] Francis Bennion 's Statutory Interpretation, 1984 edi tion, page 237, referred to.
For determining the purpose or object of the legisla tion, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law.
For the limited pur pose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady.
[454B C] A.
Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr., ; ; State of West Bengal vs Union of India, [1964] 1 S.C.R. 371 and Pannalal Binjraj vs Union of India, ; , referred to.
6.1 To sustain the presumption of constitutionality, consideration may be had even to matters of common knowl edge; the history of the times; and very conceivable state of facts existing at the time of legislation which can be assumed.
Even though for the purpose of construing the meaning of the enacted provision, it is not permissible to use these aids, yet it is permissible to look into the historical facts and surrounding circumstances for ascer taining the evil sought to be remedied.
The distinction between the purpose or object of the legislation and the legislative intention is significant in this exercise to emphasise the availability of larger material to the Court for reliance when determining the purpose or object of the legislation as distinguished from the meaning of the enacted provision.
[454F H] 7.
An explanatory memorandum is usually 'not an accurate guide of the final Act '.
[455C] Francis Bennion 's Statutory Interpretation, 1984 Edn.
page 529,referred to. 446
|
ION: Criminal Appeal No. 60 of 1955.
Appeal from the judgment and order dated the 2nd February, 1955, of the Calcutta High Court in Criminal Revision No. 1113 of 1954, against the judgment and order dated the 14th November, 1953, of the Court of the Sessions Judge, Howrah in Criminal Appeal No. 185 of 1953, arising out of the judgment and order dated the 8th September, 1953, of the Municipal Magistrate, Second Class, Howrah, in Case No. 1407C/1952.
Sukumar Ghose, for the appellant.
B. Sen and P. K. Ghosh (for P. K. Bose), for the respondent 1957.
October 29.
The following Judgment of the Court was delivered by SINHA J.
This appeal on a certificate of fitness granted by the Calcutta High Court under article 134 (1) (c) of the Constitution, is directed against the judgment and order of a Single Judge of that Court in its criminal revisional jurisdiction, convicting the appellant under section 488/300 of the Calcutta Municipal Act, 1923 (which will hereinafter be referred to as the Act), and sentencing him to a fine of Rs. 50, in substitution of the order of conviction under section 488/299 of the Act, of a fine of Rs. 75, passed by the lower courts.
The facts found by the courts below which are necessary to be stated for the purpose of this appeal, are as follows: The appellant who is the owner of the premises No. 10/3, Swarnamoyee Road, Howrah, encroached upon an area of 57 ' x 3 ' of the road side land of the Howrah Municipality to which the 776 provisions of the Act have been extended.
A notice, the terms of which we shall set out hereinafter, was served on the appellant to remove the encroachment aforesaid, and as he failed to carry out the terms of the notice within the specified time, the prosecution leading up to this appeal, was instituted before the magistrate who, under section 531, is called 'Municipal Magistrate '.
The Municipal Magistrate who tried the appellant in the first instance, convicted him, but on appeal, the learned Sessions Judge acquitted him on the ground that the prosecution had been launched beyond three months which was the prescribed period of limitation under section 534 of the Act.
The Municipality moved the High Court of Calcutta in its revisional jurisdiction and a Division Bench of that Court (J. P. Mitter and section K. Sen JJ.), set aside the order of acquittal and directed the appeal to be re heard, after giving the Municipality an opportunity of formally bringing on record certain official documents showing the date of the institution of the complaint.
The relevant documents were proved and exhibited on behalf of the prosecution in the Sessions Court and the learned Additional Sessions Judge confirmed the conviction and the sentence, and dismissed the appeal.
Thereupon, the appellant moved the High Court in its revisional jurisdiction.
His application in revision was heard and disposed of by P.N. Mukherjee J. by his order dated February 2, 1955, which is the subject matter of this appeal.
Before him, the appellant as petitioner, urged at the forefront of the arguments, the question of limitation, and the learned Judge took the view that the matter was now concluded in view of what had taken place in the High Court and in the court of Session in pursuance of the order of remand passed by the High Court.
The learned Judge agreed with the appellate court that the complaint was not barred.
The High Court also agreed with the lower courts on their findings on the merits, that is to say, it affirmed the finding that the appellant had encroached upon the road side land of the Municipality.
The High Court accepted the argument raised on behalf of the appellant that on the facts found, namely, that the 777 offending structure was a compound wall and not something which was a part and parcel of the main building, the offence if any, would come under section 300, and not section 299, read with section 488 of the Act.
The High Court further took the view that as the accused was fully aware of the nature of the accusation against him, it would not cause any prejudice to him if the conviction and the sentence were altered into those under section 300, read with section 488 of the Act, the sentence being reduced to the statutory limit of 50 rupees.
The appellant moved the High Court and obtained the necessary certificate from the Bench presided over by the learned Chief Justice who observed, while granting the certificate: "It seems to me to be arguable and arguable with some force that such alteration of the conviction could not possibly be correct in law. .
It would therefore be arguable that a notice under section 299 to remove a compound wall unattached to any building could not be a notice 'lawfully given ' or a requisition 'lawfully made ' within the meaning of section 488(1)(c) of the Calcutta Municipal Act, 1923.
It appears to me that the alteration of the conviction by this Court does raise a question of law which makes the case a fit case for further appeal to the Supreme Court.
" In this Court, the learned counsel for the appellant has placed at the forefront of his arugments the points suggested in the portion of the learned Chief Justice 's order quoted above, but in our opinion, there is absolutely no substance in those contentions.
The alteration of the conviction from section 299 to section 300, read with section 488 of the Act, was no alteration in the substance of the accusation but only in the section more properly applicable to the facts found.
A similar question was raised before their Lordships of the Judicial Committee of the Privy Council in the case of Begu vs The King Emperor (1).
It was argued before their Lordships that the conviction of the appellants before the Judicial Committee under section 201, Indian Penal Code, without a charge under that section, was a serious departure from the procedure laid down in the Code of Criminal Procedure.
In that 778 case the initial conviction was for murder under section 302 of the Indian Penal Code, but the High Court had set aside that conviction and substituted a conviction under the lesser section 201.
After discussing the provisions of sections 236 and 237 of the Code of Criminal Procedure, their Lordships made the following observations which fully cover the present controversy " A man may be convicted of an offence, although there has been no charge in respect of it, if the evidence is such as to establish a charge that might have been made.
" It will be noticed that in the case before the Privy Council, the alteration was not only in respect of the section but also of the substance of the accusation, but as the lesser offence under section 201, had been made out by the evidence led on behalf of the prosecution which was primarily for an offence of murder, their Lordships ruled that sections 236 and 237 of the Code of Criminal Procedure authorize the Court to alter the conviction and the sentence to be passed in respect of the offence made out in the evidence.
In the case in hand, it is manifest that the facts sought to be proved and found by the courts below remained the same even after the alteration of the conviction from section 299 to section 300, read with section 488 of the Act.
There was, therefore, no illegality in the alteration of the conviction under one section to the other.
It was next argued that the notice served upon the appellant was not lawful within the meaning of section 488(1)(c) of the Act, which runs as follows: 488(1) Whoever commits any offence by (a). . . . . . . . . . (b). . . . . . . . . . (c) failing to comply with any direction lawfully given to him or any requisition lawfully made upon him under any of the said sections, sub sections, clauses, provisos or rules, shall be punished. . . . . . ." The substantive portion of the notice is in these terms: "Take notice that you are hereby required by the Municipal Commissioners of Howrah, within 779 thirty days from the date of service of this notice to remove the encroachment caused by a compound wall measuring 57 ' 0" x 3 ' 0" upon Swarnamoyee Road attached to premises No. 10/3 and that in default, the provisions of the above Act will be enforced.
" This notice is headed as under section 299 of the Act.
It is no more in controversy, as found by the courts below, that the offending part of the structure comes under section 300 which refers to a wall, etc., not being a portion of a building or fixture, as contemplated in section 299.
The contention now has narrowed down to this that the notice having been headed as under section 299 of the Act, the conviction under section 300 is illegal, because, it is further argued, the requisition had not been 'lawfully made '.
According to this argument, the requisition would have been 'lawfully made ', if the notice had been headed as under section 300.
Hence, the label given to the notice makes all the difference between a requisition 'lawfully made ' and a requisition not so made.
In our opinion, this argument has only to be stated to be rejected.
It is the substance and not the form of the notice that has to be regarded.
The effective part of the notice quoted above, leaves no doubt in the mind of the parties concerned that the requisition is to remove the encroachment caused by the compound wall.
As it has not been contended that the appellant had not received the notice, and it is common ground that the appellant had not carried out the terms of the notice, there cannot be the least doubt that the appellant has incurred the penalty under section 488(1)(c), read with section 300.
It must, therefore, be held that notwithstanding the label given to the notice, the requisition bad been lawfully made in the sense that the appellant had made the encroachment complained of, and that the Municipality was entitled to call upon him to remove the encroachment.
The appellant was bound to carry out the terms of the requisition, and as he admittedly failed therein, he had incurred the penalty of the law.
It was next sought to be contended that there was substantial prejudice to the appellant inasmuch as if 99 780 the conviction were under section 299 and not section 300, read with section 488, he may have been entitled to claim compensation.
There are several answers to this contention.
In the first instance, he himself invited the High Court to interfere with the order of conviction passed by the lower courts.
If the High Court has set right the technical defect, as it was bound to do when the matter had been brought to its notice, the appellant has no just grievance, keeping in view the fact that the amount of fine has been reduced as a result of the alteration in the section.
Secondly, if he has any rights to claim compensation in a civil court the judgment and order of the criminal court is wholly irrelevant; and thirdly, the prejudice must have reference to any irregularity in the trial of the case.
It has not been shown that the appellant had, in any way, been prejudiced in the trial of the case as a result of the alteration in the section, that is to say, that he was deprived of some opportunity to make a proper defence to the prosecution if the right section had been named in the notice or in the charge, if any.
Nor has he been able to show that he was misled as a result of any such technical error.
Lastly, it was sought to be made out that the prosecution itself was beyond time.
This contention was attempted to be made good with reference to the additional evidence adduced at the appellate stage as a result of the direction of the High Court when the case came before it on the first occasion, as mentioned above.
In our opinion, there is no substance in this contention because as pointed out by the learned Additional Sessions Judge, the additional evidence placed before the Court puts the matter beyond all reasonable doubt that the complaint had been lodged in time before the relevant authority.
In view of these considerations, it must be held that there is no merit in this appeal.
It is, accordingly, dismissed.
Appeal dismissed.
| Section 8(1)(b) of the provides for appointment of an arbitrator by the Central Government in a case where there is no agreement for determining compensation.
Sub section (4) of section 40 of the Andhra Pradesh (Telanga na Area) Tenancy and Agricultural Lands Act, 1950 stipulates the interest of a protected tenant in the land at sixty per cent.
The expression 'protected tenant ' is defined in section 2(r) to mean a person who is deemed to be a protected tenant under the provisions of the Act.
One of the conditions to be fulfilled by such a person under section 34(1)(a), sub cls.
(ii) and (iii) is that he should have held the land as tenant continuously for a period of six years immediately preceding the 1st day of January, 1948 or for a period of six years commencing not earlier than 6th October, 1943 and completed before the commencement of the Act.
Section 35 makes the decision of the Revenue Authorities on the question conclu sive.
Section 37 mentions other persons not entitled under section 34 to be deemed to be protected tenants.
Section 37A enables persons holding lands as tenants at the commencement of the Act to be deemed to be protected tenants.
Section 99 bars the jurisdiction of Civil Courts and section 102 exempts lands leased, granted, alienated or acquired in favour of or by the Central Government.
Certain lands settled in favour of the appellant by his grandfather were requisitioned in 1963 by the Military Estate Officer, Secunderabad.
Respondent claimed rights as a tenant of the said land.
1230 His claim was settled by sharing of the rent.
The property was acquired under the Central Act subsequently in 1970.
The entry in the Protected Tenancy Register prepared under section 37A of the Andhra Pradesh Act in favour of the respondent was cancelled by the Tahsildar in 1970 suspecting it not to be genuine.
That order was challenged by the respondent in a writ petition before the High Court which held that whether the petitioner was a protected tenant or whether he had any prima facie interest in the suit property were matters entirely within the sole jurisdiction of the arbitrator who was to be appointed under section 8 of the Central Act.
The District Revenue Officer in the proceedings before him held that entry in the Protected Tenancy Register was a spurious one as it was not supported by an inquiry.
This order was upheld by the High Court in revision filed by the respondent, In its order dated 30th January, 1975 in tile special leave petition this Court left it open to the High Court and the arbitrator to decide the question whether the respondent was a protected tenant or not.
The arbitrator after exhaustively discussing the evi dence on record held that the respondent was a protected tenant and as such he was entitled to sixty per cent of the compensation money payable.
In the statutory appeal of the appellant before the High Court an application filed by the respondent for adducing additional evidence was allowed and a Commissioner appointed.
Disposing of the appeal against the aforesaid order this Court in its order dated 19th August, 1985 reiterated its earlier view that the High Court should determine this issue.
The HIgh Court took the view that the arbitrator was not in error in deciding the issue in the manner it did, that there was surfeit of evidence to conclude that the respond ent was a protected tenant under section 34 read with section 37 or under section 37A of the Andhra Pradesh Act and, therefore, he was entitled to sixty per cent of the compensation payable.
In this Appeal by Special Leave, it was contended for the appellant that it was mandatory under section 99 read with section 102 of the Andhra Pradesh Act for the Revenue Authorities to decide whether a person was a protected tenant or not and the Revenue Authorities having found that he was not a protected tenant, it was not open to the arbitrator to decide the question of protected tenancy.
On behalf of the respondent it 1231 was contended that the compensation payable must be deter mined under the Central Act and the arbitrator was the authority to decide that question.
Dismissing the appeal, the Court, HELD: The challenge to the award is rejected.
The re spondent was a 'protected tenant ' under the Andhra Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950.
He was, therefore, entitled to get sixty per cent of the compensation amount.
[l242D, H; 1243A] Under section 99 of the Andhra Pradesh Act, which makes the determination by the Tahsildar to be final, the bar of jurisdiction is not against the arbitrator appointed under section 8 of the but against a civil court.
In determining the amount of compensation payable to a person under the Central Act his interest in the property had to be deter mined.
[1242DE] Atchi Appalareddi and another vs Special Tahsildar Land Acquisition, Visakhapatnam Municipality and another, (1979 Andhra Weekly Reporter, Vol.
1 p. 101), referred to.
By the scheme of the Central Act compensation was pay able to persons who had interest in the land acquired.
Who were those persons had to be decided in accordance with law and the evidence.
Determination by the revenue authorities and non determination was not conclusive or decisive.
Sec tion 102 of the Andhra Pradesh Act lays down that after acquisition of the lands by the Central Government the Act was not to apply in respect of such lands.
Section 99 of that Act, therefore, had no application.
[124 1 G 1242B] In its two orders dated 30th January, 1975 and 19th August, 1985 this Court had left it open to the High Court and to the arbitrator to decide whether the respondent was a protected tenant or not.
What was the interest of the re spondent in the land acquired had to be determined in deter mining the question of payment of compensation to him and in so determining the facts and circumstances and proceedings before the revenue authorities and entries and subsequent deletions had to be taken into consideration by the arbitra tor.
The arbitrator had done so and held that the respondent was a protected tenant and as such entitled to sixty per cent of money payable for the acquisition of land.
He had jurisdiction to do so.
The High Court found overwhelming evidence in support of this view.
It discussed 18 documents and concluded (a) 1232 that because the respondent was a tenant of the said land between January 1942 to January 1948 for six years he was a protected tenant under sub cl.
(ii) of cl.(a) of sub section
(1) of section 34 of the Andhra Pradesh Act, and (b) that because he held the land from October 1943 to October 1949 he was a protected tenant under sub cl.
(iii) and held that he was entitled to sixty per cent of the compensation.
This view has to be upheld however unsatisfactory it might appear that a fruit plucker gets sixty per cent of the compensation while the owners get only forty per cent.
If that is the law let it be. ]1242G, C; 1239AB; 1242H 1243A; 1239DE; 1240EF; 1243A]
|
s Nos. 114 and 115 of 1961.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
832 M. K. Nambiar, M. K. Govind Bhatt, section N. Andley, and Rameshwar Nath, for the petitioners.
M. C. Setalvad, Attorney General of India, K. K. Mathew, Advocate General for the State of Kerala, Sardar Bahadur, George Pudissary and V. A. Seyid Muhammad, for the respondents.
December 5.
The Judgment of Gajendra gadkar, Wanchoo and Das Gupta, JJ., was deliverd by Wanchoo, J. Sarkar, J. and Ayyangar, J. delivered separate Judgment.
WANCHOO, J. These two writ petitions which were heard along with Purushothaman Nambudiri vs The State of Kerala (1) raise the constitutionality of the Kerala Agrarina Relations Act, No. IV of 1961 hereinafter referred to as the Act.
The petitioners come from that part of the State of Kerala which was formerly in the South Canara district of the State of Madras and came to the State of kerala by the State Reorganisation Act of 1956.
Their lands are situate in Hosdrug and kasargod Taluks which have now been made part of the Cannanore District in the State of Kerala.
They hold large areas of lands, the major part of which is held by them as ryotwari parradars, of Madras under the Board 's Standing Orders of that State.
In these lands they have areca and pepper plantations besides rubber plantation.
They also grow other crops on some of the lands.
The Act is being attacked on the ground that it contravenes articles 14, 19 and 31 of the Constitution.
Besides this, it is also contended on behalf of the petitioners that the Bill which became the Act lapsed under the provisions of the Constitution, and therefore the assent given to the Bill by the President was of no effect and did not result in the Bill becoming an Act.
We do not think it necessary to set out the details of the attack on this last score in the present petitions as the matter 833 has been considered in full in the judgment in the connected Writ Petition No. 105 of 1961.
The petitioners further submit that their lands which they hold as ryotwari pattadars are not estates within the meaning of article 31A (2)(a) of the Constitution and therefore the Act so far as it affects them is not protected under article 31A, and it is open to them to assail it as violative of the rights conferred on them by articles 14, 19 and 31 of the Constitution.
They have attacked the Act on a number of grounds as ultra vires the Constitution in view of the provisions of articles 14, 19 and 31.
We do not however think it necessary to detail all the attacks on the constitutionality of the Act for present purposes.
It is enough to say that the main attack on the constitutionality of the Act has been made on the following six grounds: (1) The Bill which became the Act had lapsed before it was assented to by the President and therefore the assent of the President to a lapsed bill was of no avail to turn it into law.
(2) The Act is a piece of colourable legislation as it has made certain deductions from the compensation payable to landholders under Chap.
II and to others who held excess land under Chap.
III and this amounts to acquisition of money by the State which it is not competent to do under the power conferred on it in Lists II and III of the Seventh Schedule to the Constitution.
(3) The properties of the petitioners who are ryotwari pattadars are not estates within the meaning of article 31A of the Constitution and therefore the Act is not protected under that Article so far as it applies to lands of ryotwari pattadars like the petitioners.
(4) The Act exempts plantation of tea, coffee, rubber and cardamom from certain 834 provisions thereof, but no such exemption has been granted to plantations of areca and pepper, and this is clearly discriminatory and is violative of article 14.
(5) The manner in which ceiling is fixed under the Act results in discrimination and is therefore violative of article 14.
(6) The compensation which is payable under Chapters II and III of the Act has been reduced by progressive cuts as the amount of compensation increase and this amounts to discrimination between persons similarly situate and is therefore violative of article 14.
The petitions have been opposed on behalf of the State and its contention is, firstly, that the Bill did not lapse and the President 's assent was rightly given to it rightly became law; secondly, that the petitioners ' estates lands are estates within the meaning of article 31A (2)(a) and the Act is therefore protected under that Article; thirdly, that the Act is not a piece of colourable legislation and the State Legislature was competent to enact the Act under item 18 of List II and item 42 of List III of the Seventh Schedule and there is no acquisition of money by the state under the Act and reference is made to section 80 of the Act in this connection; and lastly, that the discrimination alleged with respect to plantations, the fixation of ceiling and the deductions from compensation payable under Chapters II and III is really no discrimination at all and the provisions in that behalf are based on an intelligible differentia which is in accordance with the object and purpose of the Act.
The question whether the Bill which finally received the assent of the President on January 21, 1961, had lapsed because the legislative assembly which originally passed it was dissolved and a new legislative assembly which came into being after 835 the general elections reconsidered and re passed it under article 201 of the Constitution has been considered by us in Writ Petition No. 105 of 1961, judgment in which has just been delivered and it has been held there that the bill did not lapse and therefore it validly became law when the President assented to it.
The attack on the Act therefore on this grounds must fail.
We now come to the attack made on the Act on the ground that it is a piece of colourable legislation beyond the legislative competence of the State legislature.
What is colourable legislation is now well settled: see K. C. Gajapati Narayan Deo vs The State of Orissa (1), where it was held "that the question whether a law was a colourable legislation and as such void did not depend on the motive or bona fides of the legislature in passing the law but upon the competency of the legislature to pass that particular law, and what the courts have to determine in such cases is whether though the legislature has purported to act within the limits of its powers, it has in substance and reality transgressed those powers, the transgession being veiled by what appears, on proper examination, to be a mere pretence or disguise.
The whole doctrine of colourable legislating is based upon the maxim that you cannot do indirectly what you cannot do directly.
The Act has been passed under the legislative powers vested in the State legislature under item 18 of List II and item 42 of List III of the Seventh Schedule.
Item 18 of List II deals inter alia with "land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents" Item 42 of list III deals with "acquisition and requisitioning of property.
" The contention on behalf of the petitioners is that in the guise of legislating under these two entries the State legislature by the employment of certain 836 devices has taken away money, which should have gone to land owners or to those from whom excess lands were being acquired.
The attack is based on the facts that in section 52 of the Act compensation payable to a land owner is reduced after the purchase price to be paid by the tenant to whom the land is to be assigned has been ascertained, and that in section 64 of the Act the compensation payable to a person from whome excess land is taken in reduced by certain percentage after the market value of the land has been determined.
It is urged that by these devices the State is acquiring money which should properly have gone to the land owner to whome compensation is payable under section 52 and to the person who surrenders excess land to whome compensation is payable under section 64.
There is no doubt that certain deductions are made from the purchase price payable by the tenant under section 45 and from the market value before compensation is arrived at for payment to the land owner under section 52 and to the person surrendering excess land under section 64.
But if one looks at the purpose and object of the Act it will be clear that the main provisions of the Act are clearly within the legislative competence of the State legislature under item 18 of List II and item 42 of List III.
The scheme of the Act so far as Chap.
II dealing with extinction of the land owner 's right is concerned is that the land owner 's right vested in the State under sections 41 and 42 on a day to be notified by the Government in that behalf.
Thereafter, section 43 provides that cultivating tenants of the lands which have vested in the State shall have a right to assignment of the right, title and interest so vested in the State on payment of a certain price which is calculated under section 45 and is called the purchase price.
After the purchase price is determined, the compensation to be paid to the land owner is provided by section 52 and there is reduction in the purchase price for the purpose of given compensation.
It is however obvious that the object of Chap.
II is to vest proprietorship in the land in the 837 cultivating tenants and for that purpose Chap.
II provides for carrying out the object in two stages.
In the first stage, the property of the landowner is vested in the State.
Thereafter the tenant is given the right to acquire that property from the State.
What price the tenant is to pay for the land is worked out under section 45, and what compensation the State is to pay to the land owner is worked out under section 52, which however reduces the purchase price arrived at under section 45 for the purpose of giving compensation.
It is however clear that tenants are not bound to apply to acquire the land which they hold as tenants and where they do not do so, section 44 (3) provides that they become the tenants of Government and shall be liable to pay to the Government the rent payable in respect of the land from the date on which the right, title and interest over the land vested in the Government.
It cannot therefore be said that the scheme which provides for two stages, namely, first acquisition by Government and secondly assignment to tenants is a camoflage devised for the purpose of taking away the money which would otherwise have been payable to the land owner in case the interest of the landowner was directly transferred to the cultivating tenants.
It is also clear that there is bound to be a time lag between the acquisition under sections 41 and 42 and the assignment to tenants under section 43 and the subsequent sections and in the meantime the Government would be the owner of the rights acquired.
Clearly, therefore Chap.
II of the Act envisages first the acquirement of the land owner 's interest by the State for which compensation is payable under s.52.
Thereafter the State will assign to such cultivating tenants as may apply the rights acquired by the State and there is likely to be an interval between the two transactions.
Besides some cultivating tenants may not apply at all and that part of the property will remain with the State Government.
In these circumstances it cannot be said that the scheme evolved in Chap.
II is a device for 838 taking away any part of the money to the landowner from the tenant to whom his interest may eventually be assigned.
Besides the adequacy of compensation provided under section 52 for acquisition by the State of the interest of the land owner cannot be challenge on the ground that the compensation provided by the law is not adequate: See article 31(2).
It is only because the compensation provided under section 52 is a percentage of the purchase price as calculated under section 45 that it appears as if the State is taking away a part of the compensation due to the landowner.
Section 52 is however only a method for determining compensation and the whole compensation due to the land owner is to be found in section 52 and it cannot therefore be said that any part of the compensation is being taken away by the State.
Similarly the scheme of Chap.
III which provides a ceiling is that any land in excess of the ceiling shall vest in the Government under section 62.
Thereafter the land so vested in Government can be assigned under section 70 to persons who do not possess any land or possess land less than 5 acres of double crop nilam or its equivalent.
It is true that Government may assign the lands to those who apply under section 70 but it is not bound to do so and here again there will be a time lag between the vesting of the excess land in the Government under s.62 and its assignment to those who are eligible under section 70.
The charge that in this Chapter there is a device for taking away the compensation due to the land owner is based on the fact that section 72 the person to whom the land is assigned under section 70 has to pay 55 per cent.
Of the market value of the land while the person from whom the excess land is taken is not always paid 55 per cent.
Of the market value, inasmuch as the percentage goes down to 25 per cent.
Of the market value in certain circumstances.
But here again the compensation is provided entirely under section 64 and it is that section which sets out the manner in which the compensation is to be 839 provided.
The adequacy of that compensation cannot be questioned in view of article 31(2).
The fact that under sections 70 and 72 when the Government in its turn assigns land to those who are eligible for such assignment, a different percentage of market value is fixed would not make these provisions a device to take away the money due to those who surrender excess land.
As we have already said the compensation to those who surrender excess land is all provided by section 64 and even if there is a difference between the price payable under section 72 by the assignee and the compensation payable to the landowner under section 64 that would not amount to taking away the money of the landowner by a device particularly when the assignment is bound to take place sometime after the property has been acquired by Government.
It is also clear from the provisions contained in Chapters II and III of the Act that the main purpose of the Act is to do away with intermediaries and to fix a ceiling and give the excess land, if any, to the landless or those who hold land much below the ceiling.
The method employed to carry out this object is first to acquire the land for the State and thereafter to assign it to the cultivating tenants or to the landless or to those with small amounts of land.
The main provisions of the Act therefore are clearly within the legislative competence of the State legislature under item 18 of List II and item 42 of List III and this is not being disputed on behalf of the petitioners.
But what they contend is that in the process of doing this, the Government has by adopting certain devices taken away the money which was due to the land owner or to the person from whom the excess land is acquired.
This argument is however fallacious because the compensation due to the land owner or the person from whom excess land is acquired is not what is provided by section 45 and s 72 but what is provided in section 52 and s 64.
The adequacy of that compensation cannot be 840 challenged in view of article 31(2), and there is therefore no justification for saying that the money due to the landowner or the person from whom the excess land is acquired is being taken away by the State.
That argument would only be possible if the compensation was the whole amount arrived at under section 45 or under section 72 and from that the Government deducted money due to the landowner.
That however is not so and the compensation to which the landowner or the person from whom the excess land is acquired is to be found only in sections 52 and 64 and there is thus no question of taking away any money due to the landowner.
Further, whatever unfairness might appear because of the difference between sections 45 and 52 on the one hand and sections 64 and 72 on the other and the manner in which the compensation is shown as a percentage of the purchase price or the market value is removed by the provision in section 80 of the Act.
That section provides for the constitution of an agriculturist rehabilitation fund in which the surplus, if any, of the purchase price after the disbursement therefrom of the compensation is to be put along with other moneys.
This surplus does not to go to the revenues of the State and the State cannot be said to have taken away for its own purpose any part of the compensation.
Further section 80 provides that the fund shall be utilised for rendering help by way of loan, grant or otherwise to persons affected by the Act who are eligible for the same in accordance with the rules framed by the Government.
The fund therefore created under section 80 of the surplus, if any, is to be utilised for rendering help to persons affected by the Act.
That in our opinion clearly means either the landowners whose rights are affected by Chap.
II or the persons from whom excess land is taken under Chap.
The surplus money therefore is to be utilised for the benefit of the persons affected by the Act as indicated above.
This section also 841 provides that the Government will frame rules with respect to the persons affected and their eligibility for help from the fund.
Our attention in this connection has been drawn to the eligibility rules framed under this section for the administration of the fund, and in particular to r. 161 which provides for eligibility for grants and loan.
That rule in our opinion goes beyond the scope of section 80 in so far as it provides for making of grants or loans to persons not affected by the Act.
We may in this connection refer to r. 161 (a)(i) and (ii) and r. 161 (b) (i) and (ii) which are so framed as to take within their scope even persons not affected by the Act, though r. 161 (a)(iii) and r. 161(b)(iii) are with respect to persons who may be affected by the Act.
Rule 161(a)(i) and (ii) and r. 161(b)(i) and (ii) in so far as they take in persons not affected by the Act are ultra vires of the provisions of section 80 and must be struck down on that ground and may have to be replaced by more suitable rules.
But the rules which have been actually framed will not affect the provisions of section 80 which clearly show that the fund is for the benefit of those who are affected by the Act, namely, those who are affected by Chapters II and III of the Act, i.e., those landowners whose rights have been acquired under sections 41 and 42 and those persons from whom excess land is taken away under section 62.
Section 80 thus clearly shows that any surplus that may arise is not taken away by the State for its own revenue purposes but is meant to be used for the benefit of those affected by the Act and therefore even the apparent result of the difference between sections 45 and 62 and ss 64 and 72 is taken away by the constitution of the fund under section 80, and it cannot be said at all under the circumstances that any device has been employed in the Act to take away the moneys of the landowners or the persons from whom excess land is taken away for the purpose of adding to the revenue of the State.
We are therefore of opinion that 842 the Act" cannot be struck down as a colourable piece of legislation which is beyond the competence of the State Legislature.
Article 31A was inserted in the Constitution by the Constitution (First Amendment) Act, 1951, with retrospective effect so that it must be deemed to have been in the Constitution from the very beginning, i.e., January 26, 1950.
The article was further amended by the Constitution (Fourth Amendment) Act, 1955 which was also made retrospective and therefore article 31A as it stands today must be deemed to have been part of the Constitution right from the start, i.e., January 26, 1950.
We are not concerned in the present petitions with cl.
(1) of article 31A, which was extensively amended in 1955 but only with cl.
This clause originally read as follows: "In this article, (a) the expression 'estate ' shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant.
(b) the expression 'right ' in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure holder or other intermediary and any rights or privileges in respect of land revenue.
" In 1955, in sub cl.
(a) the words "and in the States of Madras and Travancore Cochin any janmam rights " were added at the end while in sub cl.
(b) the words " raiyat under raiyat " were added after the word " tenure holder " and before the words "or other intermediary".
843 It will be seen therefore that so far as the meaning of the word "estate" is concerned, there was no change in sub cl.
(a) and the only change was with respect to the inclusive part of the definition of the word "estate".
The word "estate has all along been defined to have the same meaning in relation to any local area as that expression or its local equivalent has in the existing law relating to landtenures in force in that area.
It is also remarkable that the word "intermediary" does not occur in sub cl.
(a) though it occurs in sub cl.
The definition in sub cl.
(a) is self contained and there is no scope for importing any idea of intermediary in the definition from sub cl.
The reason why the words "other intermediary" are used in sub cl.
(b) which defines rights in relation to an estate, is that sub clause mentions a number of intermediaries as such, like sub proprietors, under proprietors, tenure holders but does not give a complete enumeration of all intermediaries that may be existing in an estates all over India and therefore uses the words "other intermediary" to bring in all kinds of intermediaries existing in an estate.
As an example we may mention that formerly in Uttar Pradesh there were fixed rate tenants in the permanently settled districts who were also intermediaries and it is such persons or their likes who were brought in within the sweep of the definition of rights in relation to an estate by the use of the words "other intermediary".
Therefore, when the words "raiyat, under raiyat " were added in sub cl.
(b) in 1955, it was further enumeration within a class already there; further as held in The State of Bihar vs Rameshwar Pratap Narain Singh (1), their inclusion in the circumstances and in the particular setting showed that the words "or other intermediary" did not necessarily qualify or colour the meaning to be attached to these new tenures.
The meaning of the word "estate" has however to be found in 844 sub cl.
(a) and it is the words used in that sub clause only which will determine its meaning irrespective of whether any intermediary existed in an estate or not.
The meaning of the word "estate" in sub cl (a) is the same as it might be in the existing law relating to land tenure in force in a particular area.
Where therefore there is an existing law in a particular area in which the word "estate" as such is defined the word would have that meaning for that area and there is no necessity then for looking for its local equivalent.
But if in existing law of a particular area the word "estate" as such is not defined, but there is a definition of some other term which in that area is the local equivalent of the word "estate" then the word "estate" would have the meaning assigned to that term in the existing law in that area.
In order, however, that one may be able to say that a particular term in an existing law in a particular area is a local equivalent of the word "estate" used in sub cl (a) it is necessary to have some basic idea of the meaning of the word "estate" for that purpose.
That basic idea seems to be that the person holding the estate should be the proprietor of the soil and should be in direct relationship with the State paying land revenue to it, when it is not remitted in whole or in part.
If a term therefore is defined in any existing law in a local area which corresponds to this basic idea of an estate that term would be a local equivalent of the word "estate" in that area.
It is unnecessary to pursue the matter further because this aspect of the case has also been considered in Writ Petition No. 105 of 1961.
It may be added that as the definition of the word "estate" came into the Constitution from January 26, 1950, and is based on existing law we have to look into law existing on January 26, 1950, for the purpose of finding out the meaning of the word "estate" in article 31A. 845 Let us therefore look at state of the law as it was in the State of Madras on January 26, 1950, for the area from which these petitions come was then in the district of South Canara, which was then a part of the Province of Madras, which became the State of Madras on January 26, 1950.
The usual feature of land tenure in Madras was the ryotwari form but in some districts, a landlord class had grown up both in the northern and southern parts of the Presidency of Madras as it was before the Constitution.
The permanent settlement was introduced in a part of the Madras Presidency in 1802.
There were also various tenures arising out of revenue free grants all over the Province (see Chap.
IV, Vol.
III of land Systems of British India by Baden Powell) and sometimes in some districts both kinds of tenures, namely, landlord tenures and the ryotwari tenures were prevalent.
There were various Acts in force in the Presidency of Madras with respect to landlord tenures while ryotwari tenures were governed by the Standing orders of the Board of Revenue.
Eventually, in 1908, the Madras legislature passed the Madras Estate Land Act, No. 1 of 1908, which was later amended from time to time.
It contains a definition of the word "estate" as such in section 3(2) and when the Constitution came into force the relevant part of the definition was as follows: "Estates ' means: (a) any permanently settled estate or temporarily settled zamindari; (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that 846 subsequent to the grant, the village has been partitioned among the grantees or the successors in title of the grantee or grantees.
" This Act applied to the entire Presidency of Madras except the Presidency town of Madras, the district of Malabar and the portion of the Nilgiri district known as South East Wynaad.
It thus applied to the district of South Canara from where these petitions come.
So far therefore as the District of South Canara was concerned, there was an existing law which defined the word "estate" for that local area.
Shortly before the Constitution came into force the Madras legislature had passed the Madras Estates (Abolition and Conversion into Ryotwari) Act No. XXVI of 1948.
That Act provided for the abolition of estates subject to certain restrictions with which we are not concerned.
It also provided for repeal of the Madras Permanent Settlement Regulation, 1802, and the Estates Land Act of 1908 to the extent and from the date on which notifications were made under section 3 of that Act.
There was thus no repeal of Act I of 1908 by the Act of 1948, and it is not in dispute that Act No. 1 of 1908 was in force on January 26, 1950, in large parts of the Province of Madras including South Canara, and is still in force in such parts of it as have not been notified under section 3 of the Act of 1948.
Therefore, we reach the position that when article 31 became applicable from January 26, 1950, Act No. 1 of 1908 was still in force in large parts of the Madras State and it contained a definition of the word "estate" as such.
Further, Act I of 1908 was clearly a law of land tenures as a brief review of its provisions will show.
Section 6 of the Act conferred occupancy rights on tenants of certain lands in "estates" as defined in the Act of 1908.
Chapter II dealt with the general rights of landlords and tenants.
Chapter III dealt with provisions relating to rate of rent payable by tenants and provided for enhancement, reduction, commutation, alteration 847 and remission of rent.
Chapter IV dealt with pattas and muchilikas.
Chapter V provided for payment of rent and for realisation of arrears of rent.
Chapter VI provided the procedure for recovery of rent.
Other Chapters dealt with other matters including Chap.
X which dealt with relinquishment and ejectment.
It is clear therefore that the Act of 1908 was a law relating to landtenures.
Therefore, we reach the position that in a law relating to land tenures which was in force in the State of Madras when the Constitution came into force the word "estate" was specifically defined.
This law was in force in the whole of the State of Madras except some parts and was thus in force in the area from which the present petitions come.
This area was then in the south Canara district of the State of Madras.
We are therefore of opinion that the word "estate" in the circumstances can only have the meaning given to it in the Act of 1908 as amended up to 1950 in the State of Madras as it was on the date the Constitution came into force.
We have already said that the Act of 1908 dealt with landlord tenures of Madras and was an existing law relating to land tenures.
The other class of land tenures consisted of ryotwari pattadars which were governed by the Board 's Standing Orders, there being no Act of the legislature with respect to them.
The holders of ryotwari pattas used to hold lands on lease from Government.
The basic idea of ryotwari settlement is that every bit of land is assessed to a certain revenue and assigned a survey number for a period of years, which is usually thirty and each occupant of such land holds it subject to his paying the land revenue fixed on that land.
But it is open to the occupant to relinquish his land or to take new land which has been relinquished by some other occupant or become otherwise available on payment of assessment, (see Land Systems of British India by Baden Powell, Vol.
III, Chap.
IV, section II, p. 128).
Though, theoretically, according to some authorities, the occupant of ryotwari 848 land held it under an annual lease (see Macleane, Vol.
I Revenue Settlement, p. 104), it appears that in fact the Collector had no power to terminate the tenant 's holding for any cause whatever except failure to pay the revenue or the ryot 's own relinquishment or abandonment.
The ryot is generally called a tenant of Government but he is not a tenant, from year to year and cannot be ousted as long as he pays the land revenue assessed.
He has also the right to sell or mortgage or gift the land or lease it and the transferee becomes liable in his place for the revenue.
Further, the lessee of a ryotwari pattadar has no rights except those conferred under the lease and is generally a sub tenant at will liable to ejectment at the end of each year.
In the Manual of Administration, as quoted by BadenPowell, in Vol.
III of Land Systems of British India at p. 129, the ryotwari tenure is summarised as that of a tenant of the State enjoying a tenant right which can be inherited, sold, or burdened for debt in precisely the same manner as a proprietary right subject always to payment of the revenue due to the State".
Though therefore the ryotwari pattadar is virtually like a proprietor and has many of the advantages of such a proprietor, he could still relinquish or abandon his land in favour of the government.
It is because of this position that the ryotwari pattadar was never considered a proprietor of the land under his patta, though he had many of the advantages of a proprietor.
Considering, however, that the Act of 1908 was in force all over the State of Madras but did not apply to lands held on ryotwari settlement and contained a definition of the word "estate" which was also applicable throughout the State of Madras except the areas indicated above, it is clear that in the existing law relating to land tenures the word "estate" did not include the lands of ryotwari pattadars, however valuable might be their rights in lands as they eventually came to be recognised.
849 Turning now to the district of South Canara and the areas from which the present petitions come it appears that originally the ryotwari settlement was not in force in this area and two kinds of tenures were recognised, namely, mulawargdar and Sarkarigniwargdar.
It is, however, unnecessary to go into the past history of the matter, for it is not in dispute that the ryotwari system was introduced in South Canara district in the early years of this century.
The history will be found in the Book "Land Tenures in the Madras Presidency" by section Sunderaraja Iyengar, IIEdn., pp.
45 47, where it is said that "after the introduction of the ryotwari system into South Canara, no distinction now exists between the wargadar, the mnulawargadar and kudutaledar and they are all ryotwari pattadars" Therefore, when the Constitution came into force the ryotwari pattadars of South Canara were on the same position as the ryotwari pattadars of the rest of the State of Madras.
Further, as the Act of 1908 was in force in South Canara also, though there may not be many estates as defined in that Act in this area it follows that in this area also the word "estate" would have the same meaning as in the Act of 1908 and therefore ryotwari pattadars and their lands would not be covered by the word "estate".
Further, there can be no question of seeking for a local equivalent so far as this parts of the State of Kerala which has come to it from the former State of Madras is concerned.
We are therefore of opinion that lands held by ryotwari pattadars in this part which has come to the State of Kerala by virtue of the States Reorganisation Act from the State of Madras are not estates within the meaning of article 31A (2)(a) of the Constitution and therefore the Act is not protected under article 31A (I) from attack under articles 14, 19 and 31 of the Constitution.
850 Re.
The next contention on behalf of the petitioners is that the Act makes a discrimination between areca and pepper plantations on the one hand and certain other plantations on the other and should therefore be struck down as violative of article 14 of the Constitution.
Section 2(39) of the Act defines "plantation" to mean any land used by a person principally for the cultivation of tea, coffee, rubber or cardamom or such other kind of special crops as may be specified by the Government by notification in the gazette.
Areca and pepper plantations have however not been included in this definition.
It is urged on behalf of the petitioners that in this part of the State there are a large number of areca and pepper plantations which are practically run on the same lines as tea, coffee and rubber plantations and there is no reason why discrimination should be made between areca and pepper plantations on the other hand and tea, coffee and rubber plantations on the other.
The discrimination is said to arise from the provisions of section 3 and section 57 of the Act.
Section 3(viii) which occurs in Chap.
II dealing with the acquisition of the interest of landowners by tenants excepts tenancies in respect of plantations exceeding thirty acres in extent from the application of that chapter.
The result of this is that tenants in plantations exceeding thirty acres in extent cannot acquire the interest of the landowners with respect to such plantations and the landowners continue to own such plantations as before.
Further section 57 which is in Chap.
III provides for exemption of all plantations whatever their extent from the provisions of that Chapter.
Thus the ceiling area provided in section 58 will not apply to plantations which will be left out in calculating the ceiling area for the purpose of s.58.
Further, s.59(2) provides that in calculating the ceiling area any cashew estate if it was a cashew estate on April, 11, 1957 and continued as such at the 851 commencement of section 59 (provided the cashew estate was principally planted with cashewnuts tree and be a contiguous area not below 10 acres) will continue to be owned or held as before, though the ceiling in such cases would be reduced to half of that provided in s.58.
These provisions inter alia confer benefits on those who hold plantations as defined in section 2(39) and also on those who have cashew estates as defined in the Explanation to section 59(2).
The contention on behalf of the petitioners is that there is no reason why the same benefits which have been conferred on plantations as defined in the Act should not be conferred on those who hold areca and pepper plantations, and that there are no intelligible differentia which would justify the State legislature in treating the pepper and areca plantations differently from rubber, tea and coffee plantations.
Article 14 has been the subject of consideration by this Court on a number of occasions and the principles which govern its application have been summarised in Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1), in these words: "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems 852 made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.
" The petitioners rely on cl.(f) of this summary and contention is that there is nothing to show either in the Act or even in the affidavit filed on behalf of the State in reply to the petitions or in the circumstances brought to the notice of the court that the classification in this case which excludes areca and pepper plantations and includes tea, coffee and rubber plantations is a proper classification based on intelligible differentia which are related to the objects and purposes of the Act.
853 This brings us to a consideration of the reasons which may have impelled the legislature to treat plantations as a class differently from other lands.
The objective of land reform including the imposition of ceilings on land holdings is to remove all impediments which arise from the agrarian structure inherited from the past in order to increase agricultural production, and to create conditions for evolving as speedily as possible an agrarian economy with a high level of efficiency and productivity (see p. 178 of the Second Five Year Plan).
It is with this object in view that ceiling on land holdings has been imposed in various States.
Even so, it is recognised that some exemptions will have to be granted from the ceiling in order that production may not suffer.
This was considered in the Second Five Year Plan at p. 196 and three main factors were taken into account in deciding upon exemptions from the ceiling, namely: (1) integrated nature of operations, especially where industrial and agricultural work are undertaken as a composite enterprise, (2) specialised character of operations, and (3) from the aspect of agricultural production the need to ensure that efficiently managed farms which fulfil certain conditions are not broken up.
Bearing these criteria in mind it was recommended in the Second Five Year Plan (see p. 196) that the following categories of farms may be exempted from the operation of ceiling namely: "(1)tea, coffee and rubber plantation; (2) orchards where they constitute reasonably compact areas; 854 (3) specialised farms engaged in cattle breeding, dairying, wool raising etc; (4) sugarcane farms operated by sugar factories; and (5) efficiently managed farms which consist of compact blocks, on which heavy investment or permanent structural improvements have been made and whose break up is likely to lead to a fall in production.
" The same view has been reiterated in Chap.
XIV of the Third Five Year Plan dealing with Land Reform and ceiling on agricultural holdings and para 28 thereof refers to the grounds of exemption envisaged by the Second Five Year Plan.
It is obvious therefore that when the State legislature in this case exempted tea, coffee, rubber and cardamom plantations from the ceiling under Chap.
III and treated plantations of over 30 acres as a special case for the purpose of Chap.
II, it must have had the principles enunciated above in mind to differentiate them from ordinary cultivation of other crops.
If that be so, the question immediately arises whether there is any reason for treating areca and pepper plantations differently.
If there is none and areca and pepper plantations stand so far as these conditions are concerned on the same footing as tea, coffee and rubber plantations there will clearly be a discrimination against them by the provisions of the Act referred to above.
Turning now to pepper plantations, first, we may refer to the information contained in Farm Bulletin No. 55 relating to pepper cultivation in India issued by the Farm Information Unit, Directorate of Extension, Ministry of Food and Agriculture, New Delhi in September 1959.
It appears from this bulletin that Kerala is the most important pepper producing State in India, where pepper is cultivated on an organised plantation scale over 855 fairly extensive areas.
There are three distinct regions of the pepper growing belt, namely, (1) The Travancore and Cochin region.
(2) The Malabar and South Canara region, and (3) the Coorg and North Canara region.
Though pepper is essentially a homestead garden crop, growers were encouraged to grow it on plantation scale since 1928 when the price of pepper rose to about Rs. 700/ per candy.
Since then there has been a further rise in the price of pepper with the result that new homestead gardens and plantations have sprung up and pepper cultivation has extended a good deal.
During the last fifty years, pepper which was largely a household garden crop has emerged as a plantation crop and fairly large sized plantations of pepper exist in the submontane eastern parts of North Malabar and the Hosdrug taluk of South Canara, (the area from which these petitions come).
In Hosdrug taluk in particular pepper is grown mostly on large scale plantations and it is here that the finest and the best organised pepper plantations in India exist.
Some of the largest plantations among them have an area of a 100 to 150 acres.
Pepper vines commence yielding usually from the third year, the yield increasing gradually until the vines come to full bearing in about ten years.
The economic life of a vine varies from place to place.
From the tenth to the 25th year, the vines are in full bearing, and the yield begins to decline after the 30th year.
The initial outlay on pepper plantations is heavy and the pepper crop requires continuous attention and care.
The total area under pepper is over 2 lakhs acres out of which about 20,000 acres are under pure pepper plantations.
The initial expenditure on laying out a pepper plantation can be recovered only after several years and the best organised and most extensive pepper plantations of India are in the Hosdrug taluk, South Canara (from where these petitions come) and North Malabar.
856 This information taken from Farm Bulletin 55 shows that in the last fifty years pepper in India has reached the plantation stage and in particular in Hosdrug taluk from where these petitions come there are the best organized and most extensive pepper plantations in India.
The initial cost of laying out a pepper plantation is heavy and the pepper vines yield nothing for three years and full production comes only in the tenth year.
Therefore, where pepper is cultivated as a plantation crop on a large scale the cost is heavy and may be comparable to the outlay on large scale tea, coffee and rubber plantations.
It is in these circumstances that we have to consider whether there has been discrimination against pepper plantations when they have not been included in the definition of plantation under section 2(39) of the Act.
Turning to arecanut, reference may be made to Farm Bulletin No. 14 issued by the same authority.
The major arecanut growing belt in India is again the same regions, i.e., South Canara, Malabar, Coorg and Travancore Cochin along with parts of Mysore, Bengal and Assam.
Arecanut is also grown on plantation scale.
Since the crop begins to bear fruit after about eight years, large sums have to be expended up to the bearing stage without any income till then.
The estimated life of an arecanut garden is about 50 to 60 years, though some of the palms in the garden will be dying occasionally or becoming uneconomic and it will be necessary to replace them.
For this reason underplanting is taken up periodically.
It appears further from the Proceedings of the Ninth Annual General Special and Twelfth Ordinary Meetings of the Indian Central Arecanut Committee held on January 23, 1958, that the question whether arecanut gardens should be put under ceiling or not and whether there would be hampering of production which would be against national interest if a ceiling were imposed on such gardens had been referred to a Sub committee for consideration.
857 The Sub committee reported that if areca gardens were brought under the ceiling it would hamper production which would be against the national interest and recommended to the Planning Commission, the Central Government and the State Governments that, as proposed by the Planning Commission in respect of tea, coffee and rubber plantations, orchards, specialised farms and efficiently managed farms, arecanut gardens be also similarly exempted from ceiling.
The Sub committee also noticed that arecanut cultivation involved heavy capital outlay in establishing, maintaining and protecting the arecanut trees.
This recommendation of the Sub committee came up for consideration before the Indian Central Arecanut Committee on January 23, 1958, and was accepted.
Thus these proceedings show that fixation of ceiling on arecanut gardens would hamper production which would be detrimental to national economy.
It is in this background therefore that we have to consider whether the non inclusion of areca and pepper plantations in the definition in section 2(39) with the result that areca and pepper plantations do not enjoy similar benefits as others, is discriminatory.
From what we have said above it has not been shown that there is any appreciable difference between the economics of tea, coffee and rubber plantations and areca and pepper plantations.
It is true that plantations in areca and pepper are not so widespread as tea, coffee and rubber plantations but it is equally true that in this particular area from which these petitions come areca and pepper plantations are very common.
The fact however that areca and pepper plantations are very common only in this area of the State of Kerala is no reason for treating them differently from tea, coffee and rubber plantations which are apparently more evenly distributed throughout the State.
If the criteria evolved by the Planning Commission, as already indicated, apply to tea, coffee and rubber 858 plantations in our opinion they equally apply to areca and pepper plantations and there is no reason for differentiating between these two sets of plantations.
So far as areca is concerned we have the recommendation of the Sub committee, mentioned above, endorsed by the Indian Central Arecanut Committee, that it would be detrimental to national economy not to extend the benefit of exemption from ceiling to arecanut plantations in the same way as is done in the case of tea, coffee and rubber plantations.
As for pepper we have it from Farm Bulletin No. 55 that the best organised and most extensive pepper plantations of India are in Hosdrug Taluk of South Canara and that some of them are even as large as 100 to 150 acres each.
The result of the application of the ceiling and other provisions of the Act would mean the break up of these plantations and may result in fall in production.
It is to avoid the break up of tea, coffee and rubber plantations and the consequent fall in production that ceiling has not been imposed on these plantations.
The same reasons in our opinion lead to the conclusion that pepper plantations should also be treated similarly.
In this connection reference may be made to the opinion expressed in Farm Bulletin No. 55 where the author has said that it is impossible to keep a large plantation of pepper in good tip top condition, without incurring heavy expenditure and without great efforts and has added that in the existing conditions no one planter should have more than 10 acres of pepper plantation.
This would seem to suggest that 10 acres is the economic optimum limit for pepper plantations.
It is not clear however on what basis this recommendation is based, for undoubtedly the bulletin shows that there are plantations of much larger extent in this area and the plantations here are the best organised and the most extensive throughout the whole of India.
The only reason which seems to have been given in support of the opinion that 859 10 acres is the optimum area for a pepper plantation is that one planter in that region was of the view that unless the price of one candy of pepper remained at a high level of anything between Rs. 1,500/ and Rs. 2,000/ it will be impracticable and unprofitable to maintain large scale plantations of pepper in these regions, and if prices go down for below this level, large scale pepper plantations may have even to be abandoned.
This does not afford a sufficient basis for holding that 10 acres is the optimum holding for a pepper plantation.
In the first place, it is mentioned at p. 8 of the bulletin that pepper began to be grown on plantation scale when the price rose to about Rs. 700/ per candy in 1928.
Therefore even if the price falls below Rs. 1,500/ to Rs. 2,000/ per candy there is no reason why pepper cultivation on a plantation scale should become impracticable, particularly as it is unlikely that the cost of only pepper will fall and not all other commodities.
At p. 72 the bulletin mentions that the cost of cultivation of pepper can be brought down only if the general price level is brought down substantially.
Now there is no reason to suppose that there would be a catastrophic fall in the price level of pepper only which would make all pepper plantations above 10 acres uneconomic and unprofitable.
In any case this is not the reason urged on behalf of the State in support of not including pepper plantations in the definition of plantation.
In this connection we ought to add that the counter affidavit filed by the respondent is very unsatisfactory; no serious attempt has been made at all to justify the exclusion of pepper and arecanut from the exemption granted to tea, coffee, rubber and cardamom; no facts are stated and no data supplied in reply to the detailed allegations made in the petitions challenging the validity of the classification in question.
The only reason given by the State in the counter affidavit is that a plantation crop is generally understood 860 to refer only to tea, coffee and rubber and cardamom.
It is not quite clear what exactly is meant by this one sentence in the counter affidavit in support of the definition.
If a plantation crop is generally understood to refer to only tea, coffee, rubber and cardamom, it is not understood why the definition provides for extending the word "plantation to other crops by notification.
The very fact that power has been reserved for extending the definition by notification to other crops shows that other crops can also be grown on plantation scale.
In view therefore of what we have said above with respect to the economics of areca and pepper cultivation, it is obvious that no sufficient reason has been shown for differentiating areca and pepper plantations in this area from tea, coffee and rubber plantations in the State.
Making all the presumptions in favour of the classification made under s.2(39) it is clear that there is nothing on the face of the law or the surrounding circumstances which has been brought to our notice in this case on which the classification contained in section 2(39) can be said to be reasonably based.
Considering the object and purpose of the Act and the basis on which exemption has been granted under Chapters II and III to plantations as defined in the Act, there appears to be no reason for making any distinction between tea, coffee and rubber on the one hand and areca and pepper on the other in this particular case.
It is not as if tea, coffee and rubber are grown only on a large scale while areca and pepper are mostly grown on a small scale.
We find from the report of the Plantation Inquiry Commission, 1956, that small holdings exist in tea, coffee and rubber plantations also and are in fact the majority of such plantations.
For example, in the report of the Plantation Inquiry Commission relating to coffee at pp. 9 and 14 we find that out of the total number of registered estates more than 4,500 are between 5 acres and 25 acres while only about 2,200 861 estates are above 25 acres.
Further there are more than 24,000 estates below 5 acres.
Similarly at p. 97, Chap.
XI, Part III of the Report dealing with rubber, out of the total of over 26, 709 rubber estates, 23,300 are up to 5 acres, 1,900 up to 10 acres and only about 1,500 above 10 acres.
So it appears that the large majority of plantations whether they be of coffee or rubber are below 10 acres and that is also the case with area and pepper plantations.
Thus there is no reason for giving preference to plantations of tea, coffee and rubber over plantations of area and pepper for the conditions in the two sets of plantations whether for the purpose of ceiling under Chap.
III or for the purpose of acquisition of landowners ' rights under Chap.
II are the same.
The reasons therefore which call for exemption of tea, coffee and rubber plantations equally apply to areca and pepper plantations and there is no intelligible differentia related to the object and purpose of the Act which would justify any distinction in the case of tea, coffee and rubber plantations as against area and pepper plantations.
We are therefore of opinion that the provisions relating to plantations are violative of article 14 of the Constitution.
The next question is whether these provisions are severable, that is to say, whether the Kerala legislature would have passed the Act without these provisions.
That depends upon the intention of the legislature and as far as we can judge that intention from the provisions of the Act, it seems clear to us that the legislature did not intend that the provisions relating to acquisition by tenants and ceilings should apply to plantations as defined in the Act, so that they may have to be broken up with consequent loss of production and detriment to national economy.
It seems that the legislature could not have intended in order to carry out the purpose of the legislation to do so even after breaking up all the plantations which 862 existed in the State.
It follows therefore that the legislature would not have passed the rest of the Act without the provisions relating to plantations.
As these provisions affect the entire working out of Chapter II and III of the Act which are the main provisions thereof, it follows that these provisions relating to plantations cannot be severed from the Act and struck down only by themselves.
Therefore, the whole Act must be struck down as violative of article 14 of the Constitution so far as it applies to ryotwari lands in those areas of the State which were transferred to it from the State of Madras, and we order accordingly.
Then we come to the attack that the Act is violative of article 14 on account of the manner in which ceiling has been fixed under section 58 thereof.
Section 2(12) defines a "family" as meaning husband, wife and their unmarried minor children or such of them as exist.
There are three kinds of families existing in this State namely, the joint Hindu family, Marumakhathayam family and Aliyasanthana family, the latter two being matriarchal.
In the matriarchal family the husband and wife are not members of the same family but belong to different families.
The joint Hindu family does not merely consist of the husband, wife and unmarried minor children; it consists at least of the husband wife and all the children whether married or unmarried and whether minor or adult.
The definition of "family" therefore in the Act is an artificial one which does not conform to any of the three kinds of families prevalent in the State.
Turning now to section 58, the ceiling has been fixed in two ways.
The first is by reference to a family as defined in the Act of not more than five members which is allowed 15 acres of double crop nilam or its equivalent with an addition of one acre of double crop nilam or its equivalent for each 863 member in excess of five, so however that the total extent of the land shall not exceed 25 acres of double crop nilam or its equivalent.
The second is by reference to an adult unmarried person who is allowed 7.50 acres of double crop nilam or its equivalent.
It has been urged on behalf of the State that the provisions as they stand do not make any discrimination whatsoever for there is the same provision for all adult unmarried persons and the same for all families as defined in the Act.
This in our opinion is an over simplification of the provision relating to ceiling under section 58.
On an argument of this kind no provision would ever be discriminatory for it is unlikely that a provision would on the face of it make a discrimination.
The discriminatory nature of the provision has to be judged from the results that follow from it and we have no doubt that the results which follow from this double provision as to ceiling are bound to be discriminatory.
If the ceiling had been fixed with respect to one standard whether it be of an individual person or of a natural family by which we mean a family recognised in personal law, the results may not have been discriminatory.
But where the ceiling is fixed as in the present case by a double standard and over and above that the family has been given an artificial definition which does not correspond with a natural family as known to personal law, there is bound to be discrimination resulting from such a provision.
A simple illustration will explain how the results of the manner in which the ceiling has been fixed by section 58 will lead to clear discrimination between person and person.
Take the case of an adult unmarried person and a minor who is an orphan with no father, mother brother or sister.
Assume further that each owns 25 acres of land under personal cultivation.
The former who is an adult unmarried person will retain 7 acres and will have to surrender 17.50 acres as excess land.
The latter will be an artificial family under the definition of that word 864 in section 2(12).
This follows from the fact that a family consists of husband, wife and their unmarried minor children or such of them as exist.
This is also made clear by section 61(2) which shows that even a minor who has no parents, and no brothers or sisters will constitute a family under section 2(12).
This minor therefore as constituting a family will be entitled to 15 acres of land and will have to surrender only 10 acres as excess land.
No justification has been shown to us on behalf of the State for this discriminatory treatment of two individual persons; nor are we able to understand why such discrimination which clearly results from the application of the provisions of section 58(1)is not violative of article 14 of the Constitution.
Examples can be multiplied with reference to joint Hindu families also, which would show that in many cases discrimination will result on the application of these provisions to joint Hindu families.
Similar would in our opinion be the case with Marumakhathayam and Aliyasanthana families where as we have already pointed out the husband and wife do not belong to the same family as known to personal law.
Discrimination therefore is writ large on the consequences that follow from the provisions of section 58(1).
We are therefore of opinion that section 58(1) is violative of the fundamental right enshrined in article 14; as that section is the basis of entire Chap.
III the whole Chapter must fall with it.
This would be an additional reason why Chap.
III should be struck down as violative of Art 14 in its application to ryotwari landas which have come to the State of Kerala from the State of Madras.
(6) It is contended that the manner in which the compensation is cut down progressively in sections 52 and 64 of the Act is violative of article 14.
The Compensation payable under section 52 is determined in this manner.
First the purchase price is arrived at under section 45.
Thereafter section 52(2)(b) provides that the landowner or the intermediary, except in the 865 case of religious, charitable and educational institution of a public nature, would be entitled to compensation.
The compensation would consist of (1) the value of structures, wells and embankments of a permanent nature situated in the land and belonging to the landowner or the intermediary, as the case may be, and (2) the percentage of the value of interest of the landowner or the intermediary in respect of the land and the improvements other than those falling under sub cl.
(i) according to the scales specified in Sch.
Schedule II then provides that the first Rs. 15,000/ .
of the compensation will be paid in full.
Thereafter there will be a reduction of 5 per cent.
in each slab of Rs. 10,000/ till we reach compensation above Rs. 1,45,000/ Thereafter the compensation arrived at under section 52 read with section 45 is reduced by 70 per cent so that the landowner or the intermediary gets only 30 per cent of what has been arrived at under section 52 (2) (b) read with section 45.
Similarly in section 64 the compensation payable for excess land surrendered is (i) the full value of any structures, wells and embankments of a permanent nature situate in the land and belonging to the person who surrenders such land, and (ii) the percentage of the market value of the land and improvements other than those specified above.
Here again on the first Rs. 15,000/ compensation at 60 per cent is to be paid.
Thereafter the compensation is reduced by 5 per cent for each slab of Rs. 15,000/ till we reach over Rs. 1,75,000/ when the compensation is reduced by 75 per cent.
The contention on behalf of the petitioners is that there is no intelligible differentia on which the purchase price determined under section 45 or the market value is to be reduced by different percentages depending on the total purchase price or the total market value of the interest to be acquired.
The reply on behalf of the State is that there is really no discrimination inasmuch 866 as the same percentage is reduced where the compensation payable to different persons is the same.
That is undoubtedly so.
But that alone is not in our opinion the end of the matter.
The question which is posed for our consideration is why a person in whose case the purchase price or the market value Rs. 15,000/ should get the full purchase price or suffer a reduction in the market value at a certain rate while another person in whose case compensation is more than Rs. 15,000/ should suffer reductions at a different rate which reductions become progressively higher as the purchase price or the market value increases.
We could understand once the purchase price or the market value had been determined a uniform cut therefrom for all persons entitled to compensation.
That would then raise the question of adequacy of compensation and unless the cut was so large as to make the compensation illusory the cut may be protected by Art.31(2).
But in the present case there is not a uniform cut on the purchase price or the market value for all persons, the cut is higher as the purchase price or the market value gets bigger and bigger after the first slab of Rs. 15,000/ .
This difference in cut in being justified on behalf of the State on the same principle on which (for example) the slab system exists for purposes of income tax.
We are however of opinion that there is no comparison between the slab system of income tax rates and the present cuts.
Taxation is a compulsory levy from each individual for the purpose of the maintenance of the State.
We may therefore reasonably expect that a rich man may be required to make a contribution which may be higher than what may be proportionately due from his income for that purpose as compared to a poor man.
This principle cannot be applied in a case where a person is deprived of his property under the power of eminent domain for which he is entitled to compensation.
There is no reason why when two persons are deprived of their property one richer than the other, they should be paid at 867 different rates when the property of which they are deprived is of the same kind and differs only in extent.
No such principle can be applied in case where compensation is being granted to a person for deprivation of his property.
Where one person owns property valued at Rs. 15,000/ while another owns property valued at Rs. 30,000/ , both are equally deprived of the property.
When therefore it comes to a question of payment of compensation we can see no reason why a person whose compensation amounts to Rs. 15,000/ should get the whole of it or a large part of it while another person whose compensation amounts to (say) Rs. 30,000/ should get something less than the first person.
It is not as if there is some difference in the nature of the property which might justify different payments of compensation.
What the Act provides is to work out the purchase price or the market value first for the purpose of determining compensation and then make different cuts from the purchase price or the market value according to whether in one case the purchase price or the market value is Rs. 15,000/ and in another case it is more than Rs. 15,000/ .
No justification, is pointed out for this discrimination except the principle on which the slab system for the purpose of income tax is justified.
That principles as we have just pointed out does not apply to a case of compensation.
Nor are we able to see any rational classification which would justify different cuts based simply on the amount of compensation worked out on the basis of purchase price or market value.
The only thing we can see is that because a person is possibly richer he must be paid less for the same type of land while a person who is poorer must be paid more.
This kind of discrimination in the payment of compensation cannot in our opinion be possibly justified on the objects and purposes of the Act.
The object and purpose of the Act, as we have already said, is to grant rights to cultivating tenants so that they may 868 improve their lands resulting in larger production to the benefit of the national economy.
Secondly, the object of the Act is to provide land for the landless and to those who may have little land by taking excess land from those who have large tracts of lands so that peasant proprietorship may increase with consequent increase in production due to greater interest of the cultivator in the soil.
But these objects have no rational relation which would justify the making of different cuts from the purchase price or the market value for the purpose of giving compensation to those whose interests are being acquired under the Act.
We can therefore see no justification for giving different compensation based on different cuts from the purchase price or the market value as provided in sections 52 and 64 of the Act.
We may in this connection refer to Kameshwar Singh vs The State of Bihar (1), in which similar question with respect to compensation provided in the Bihar Land Reforms Act, 1950, came up for consideration.
There the Act provided compensation at different rates depending upon the net income.
The landowner having the smallest net income below Rs. 500/ was to get twenty times the net income as compensation while the landowner having the largest net income, i. e., above 1,00,000/ was to get only three times of the net income.
Intermediate slabs provided different multiples for different amounts of net income.
That provision was struck down by the Special Bench of the Patna High Court as violative of article 14.
It may be mentioned that decision was given before the Constitution (First Amendment) Act adding article 31A and the Ninth Schedule to the Constitution was passed.
Three learned Judges composing the Special Bench who heard that case were unanimously of the 869 opinion that such difference in payment was violative of article 14 and the principle of progressive taxation did not apply to compensation for land acquired.
We are of opinion that the view taken in that case is correct and the same applies to the present case.
We may point out that case came in appeal to this Court (see, The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh (1) ).
The appeal however was heard after article 31A and the Ninth Schedule had been introduced in the Constitution and therefore this Court had no occasion to consider whether such difference in payment of compensation would be violative of article 14.
We are therefore clearly of opinion that the manner in which progressive cuts have been imposed on the purchase price under section 52 and the market value under section 64 in order to determine the compensation payable to land owners or intermediaries in one case and to persons from whom excess land is taken in another results in discrimination and cannot be justified on any intelligible differentia which has any relation to the objects and purposes of the Act.
As the provision as to compensation is all pervasives, the entire Act must be struck down as violative of article 14 in its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
In view of what we have said above on the main points urged in the petitions, it is unnecessary to consider other subsidiary points attacking particular sections of the Act on the ground that they were unreasonable restrictions on the right to acquire, hold and dispose of property under article 19(1)(f).
We therefore allow the petitions and strike down the Act in relation to its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
The petitioners will get their costs from the State of Kerala, one set of hearing costs.
870 SARKAR, J. I wish to say a few words on two of the questions that arise in these cases.
The Act, the validity of which is challenged, provides for acquisition of lands for equitable distribution among the people who require it for cultivation by themselves.
It provides for payment of compensation to those whose interests are acquired.
It also provides for a mode of valuation of these interests.
Then it provides by sections 52 and 64 for payment of compensation at a progressively smaller rate for larger valuations.
For the higher slabs in the valuation made as provided by the Act, less and less is paid by way of compensation.
It is said that these provisions for progressively diminishing compensation are discriminatory and unconstitutional.
This is the first point with which I propose to deal.
The question is whether the payment of compensation at a progressively smaller rate as the valuation is higher offends article 14 of the Constitution.
Now it is not disputed that progressively higher rate of taxation by an Act taxing income is not unconstitutional.
I think such taxation is too well recognised now to be challenged.
If that is so and that was the basis on which arguments proceeded in this case I am unable to see that a statute providing for acquisition of property and for payment of compensation at a progressively lower rate for the higher slabs of valuation can be unconstitutional.
"The reason for progressive taxation in the case of inheritance taxes and income taxes is the ability of those receiving or giving to pay": Willis 's Constitutional Law (1936 ed.) p. 597.
The cases in America that I have looked up also put the matter on the same basis.
The classification by progressively higher taxation in a taxing statute is therefore good if based on the tax payers ' ability to pay.
It is however said that what applies in the case of a taxing statute cannot apply to a statute 871 permitting acquisition of property on payment of compensation.
I do not see why ? I am not aware that the test for determining whether there has been unequal treatment is different with different varieties of statutes, that the test for a taxing statute is not the same as that for a statute providing for acquisition on payment of compensation.
I think the test is the same for all statutes, and it is that there must be an intelligible differentia having a rational relation to the object of the Act.
Now the object of a taxing statute is to collect revenue for the governance of the country.
Ability to pay is acknowledged to be an intelligible differentia having a relation to such an object.
The object of the statute with which we are concerned is to acquire land on payment of compensation so that the land may be equitably distributed among the people.
If under a statute whose object is to collect revenue more can be legitimately demanded from a person having more, it seems to me that under a statute whose object is to acquire land by paying compensation less can equally legitimately be paid to a person who has more.
Ability to pay, or which is the same thing as ability to bear the loss arising from smaller payment received, would in either case be an intelligible differentia having a rational relation to the object of the Act.
In one case it serves the object by collecting more revenue for adding to the resources for governing the country and in the other case it serves the object by making it possible for the State by payment of less money out of its resources to acquire lands for better distribution.
In both cases the State resources are benefited, in one by augmentation and in the other by prevention of larger depletion.
Therefore, I would accept the learned Attorney General 's argument that sections 52 and 64 of the Act cannot be held to be discriminatory and void for the same reason on which 872 progressive rates of taxation are held not to be so in the case of an Income tax Act.
The next question on which I wish to say a few words concerns those provisions of the Act which exempt plantations of tea, coffee, rubber or cardamom or such other kinds of special crops as the Government may specify, from certain provisions of the Act.
Plantations have been defined in section 2(39) of the Act as land used by a person principally for the cultivation of tea, coffee, rubber or cardamom or other notified crops.
No other crop appears to have been notified yet.
Section 58 of the Act provides the ceiling area of land which may be held by any individual proprietor.
Land above the ceiling has to be surrendered to the Government.
Section 57 of the Act provides that this provision would not apply to plantations as defined in section 2(39).
Again, Ch. 2 of the Act which gives the tenants the right to purchase land from the landlords and vests in the Government the lands of the landlords not themselves cultivating them above the ceiling fixed, is by section 3 (viii) not made applicable to plantations exceeding thirty acres in extent.
The question is whether the benefit so given to the plantations as defined in the Act is discriminatory.
The petitioners own large scale cultivation of areca and pepper.
They contend that no legitimate differentiation is possible between lands on which areca and pepper are grown and lands on which tea, coffee, rubber and cardamom are grown.
No doubt the presumption is that a statute is constitutional but such presumption is not conclusive.
It is also true that a court is entitled to assume the existence of all rational basis on which the classification made by an Act may be justified.
Even so, it seems to me, that the present classification is, on the materials now before us not justified.
It may be that plantations of tea, coffee 873 rubber and cardamom, especially the first three, are usually large in size and require big investments.
It may be that they are carried on as industries which give employment to a large labour force.
These characteristics may however only justify the putting of large plantations of these crops in a class.
The Act however exempts all lands on which tea, coffee, rubber or cardamom is grown irrespective of the size of the business carried on or of labour employed on them, as a class.
Materials have been placed before us to show that there are a very large number of smaller plantations growing tea, coffee and rubber.
There are also many areca and pepper plantations exceeding thirty acres in area.
There is no reason to put tea, coffee, rubber and cardamom plantations in a class as distinguished from similar sizes of plantations of areca and pepper.
None at least has been shown by the State of Kerala to exist.
The only ground shown in the affidavit of the State of Kerala seeking to justify the classification of tea, coffee, rubber and cardamom plantations in one class is that "plantation crop is generally understood to refer only to tea, coffee, rubber and cardamom" and that "areca and pepper are not generally grown on a plantation scale".
I am unable to think that these afford sufficient justification for making a discrimination in favour of tea, coffee, rubber and cardamom plantations.
It would appear from the Planning Commission 's Report that other kinds of crops might profitably be grown as plantation crops.
In any case, a general understanding even if there was one, is not sufficient basis for discrimination.
With regard to the other statements of the State, it is enough to say that the Act does not make a discrimination because of the size of the plantations.
Therefore, there is no point in saying that areca and pepper are not grown on a plantation scale.
For these reasons I think the provisions in the Act making a discrimination in favour of tea, 874 coffee, rubber and cardamom plantations cannot be upheld.
For the same reason, I think the discriminatory treatment made in favour of cashew plantation also cannot be sustained.
Sections 3(viii), 57(1)(d) and 59(2) of the Act are therefore, in my opinion, invalid.
I think however that these provisions are severable from other parts of the Act.
I think it cannot be reasonably said that the legislature would not put the Act into operation if these provisions are taken out of it.
The deletion of the provisions does not further make it impossible for the rest of the Act to operate.
I am, therefore, unable, to hold that because the sections mentioned above are bad, the whole Act should be declared to be bad.
That is all I wish to say in this judgment.
With regard to the other matters arising in this case, I agree with the judgment delivered by Wanchoo J. AYYANGAR, J. I entirely agree with the order that the petitions should be allowed and the impugned Act struck down in relation to its application to ryotwari lands which came into the State of Kerala from the State of Madras this being the only relief which the petitioners seek from this Court.
My only reason for this separate judgment is because I do not agree with that portion of the reasoning in the judgment just now pronounced in these petitions where it deals with the interpretation of article 31A(2).
In my judgment in the companion case Writ Petition No. 105 of 1961 I have endeavored to point out what according to me is the proper construction of this Article and I adhere to that view.
I consider that on article 31A(2) as it stands even after the fourth Amendment, properties held on ryotwari tenures and the interest of the royt in such lands would not be "estates" for the purposes of that Article.
No doubt as pointed out by me in the 875 other judgment, if there was a law existing on the date of the Constitution in relation to land tenures under which "estate" were defined as including not merely lands held by intermediaries and of others holding under favourable tenurers, but also of ryotwari proprietors having direct relationship with the Government and paying full assessment, such latter category of interests might also be comprehended within the term "estate" by reason of the words "have the same meaning as that expression. .has in the existing law relating to land tenures in force in that area" in Art.31A(2)(a).
That is the real basis and the ratio underlying the decisions of this Court in Ram Ram Narain Medhi vs State of Bombay(1), and Atma Ram vs State of Punjab(2).
In all other cases (apart from the two categories specially added by the Fourth Amendment) no lands other than those held by intermediaries or held on a favourable tenure would fall within the definition of "an estate" this being according to me the central concept or the thread which runs through the entire definition.
The choice between the different interpretations of the Article does not however present itself for the disposal of this petition which has to be answered in favour of the petitioner even on the view of the scope of article 31A which has commended itself to my colleagues.
Where an "existing law in relation to land tenures in force in an area" contains a definition of an "estate" and that definition excludes the interest of a roytwari proprietor, the very words of Art.31A(2)(a) which I have extracted earlier would negative the applicability of its provisions to that tenure.
article 31A being out of the way I agree that the provision in (1) section 2 (39) of the Act which by definition excludes pepper and areca plantations from the category of the plantations which are named in it which are exempted from the operative provisions of the impugned Act, (2)s. 58 for the 876 determination of the ceiling in respect of different individuals who are brought within the scope of the enactment, and (3) ss.52 and 64 for determining the compensation payable to the several classes of persons whose lands are acquired under Act, all these are violative the guarantee of the equal protection of laws under article 14 of the Constitution.
I therefore agree in the order proposed that the petitions be allowed, and with costs.
Petitions allowed.
| The Kerala Agrarian Relations Act was impugned on various grounds.
^ Held, (per Gajendragadkar, Wanchoo and Das Gupta, JJ.) that (1) the bill which was originally passed by a Legislative Assembly which as dissolved and was reconsidered and re passed by a new legislative assembly did not lapse and validly became the law when the President assented to it after it was passed by the second legislative assembly.
830 Purushothaman Nambudiri vs State of Kerala, [1962] Supp. 1 S.C.R. 753, followed.
(II) The Act which made certain deductions from the compensation payable to the landholders under Ch.
II and to others who held excess land under Ch.
III cannot be struck down as a piece of colourable legislation which is beyond the competence of the State Legislature, and it cannot be said that any device has been employed in the Act to take away the moneys of the landowners or the persons from whom excess land is taken away for the purpose of adding to the revenue of the State.
Section 80 of the Act provides for the Constitution of an agriculturist rehabilitation fund for the purpose of rendering help by way of loan, grant or otherwise to persons affected by the Act and eligible for the same under the rules but rr. 161 (a) (III) and 161 (b) (III) are so framed as to take within their scope even persons not affected by the Act.
Those rules are ultra vires of section 80 and must be struck down.
(III) The lands held by ryotwari pattadars in the area which came to the State of Kerala by virtue of the States Reorganisation Act from the State of Madras are not 'estates ' within the meaning of article 31A(2)(a) of the Constitution and therefore the Act is not protected under article 31A (1) from attack under articles 14, 19 and 31 of the Constitution.
State of Bihar vs Rameshwar Pratap Narain Singh, ; , referred to.
(IV) The reasons which call for exemption of tea, coffee and rubber plantations from certain provisions of the Act equally apply to areca and pepper plantations and there is no intelligible differentia related to the object and purpose of the Act which would justify any distinction in the case of tea, coffee and rubber plantations as against areca and pepper plantations.
The provisions in the Act relating to plantations are violative of article 14 of the Constitution.
The provisions relating to plantations cannot be severed from the Act and struck down only by themselves.
The whole Act must be struck down as violative of article 14 of the Constitution so far as it applied to ryotwari lands in those areas of the State which were transferred to it from the State of Madras.
(V) The manner in which ceiling has been fixed under section 58(1) is violative of the fundamental right enshrined in article 14 of the constitution and as that section is the basis of entire Ch.
III the whole chapter must fall with it 831 (IV) The manner in which progressive cuts have been imposed on the purchase price under section 52 and the market value under section 64 in order to determine the compensation payable to landowners or intermediaries in one case and to persons from whom excess land is taken in another, results in discrimination and cannot be justified on any intelligible differentia which has any relation to the objects and purposes of the Act.
The provision as to compensation is all pervasive and the entire Act must be struck down as violative of article 14 of the Constitution in its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
Per Sarkar, J. Sections 52 and 64 of the Act which provide for payment of Compensation at progressively smaller rates for larger valuations of the interests acquired are not invalid as offending article 14 of the Constitution.
The provisions in the act making a discrimination in favour of tea, coffee, rubber and cardamom plantation and also in favour of cashew plantations cannot be upheld.
Sections 3(viii), 57 (1) (d) and 59 (2) are therefore invalid.
These are however severable from the other parts of the Act and the whole Act cannot be held to be bad merely because those provisions are bad.
Per Ayyangar, J. Properties held on ryotwari tenures and the interest of the ryot in such lands would not be "estate" for the purposes of article 31A(2) as it stood even after the Fourth Amendment of the Constitution.
Where an existing law in relation to land tenures in force in an area contains a definition of an 'estates ' and that definition excludes the interest of a ryotwari proprietor, the very words of article 31A(2) of the Constitution negatived the applicability of its provisions to that tenure.
Ram Ram Narain Medhi, vs State of Bombay, [1959] Supp.
I S.C.R. 489 and Atma Ram vs State of Punjab, [1959] Supp.
I S.C.R. 748, referred to.
Section 2(39) which by definition excludes pepper and areca plantations from the category of the plantations named in it which are exempted from the operative provisions of the impugned Act, section 58 for the determination of the ceiling in respect of different individuals who are brought within the scope of the enactment and sections 52 and 64 for determining the compensation payable to the several classes of persons whose lands are acquired under the Act are all violative of the guarantee of equal protection of laws under article 14 of the Constitution.
|
tion (C) No. 9960 61 of 1985.
163 (Under Article 32 of the Constitution of India).
Gobind Mukhoty and S.K. Verma for the Petitioners.
Dr. Shankar Ghosh and Prabir Choudhary for the Respondents.
The Judgment of the Court was delivered by OZA, J.
This Writ Petition was filed challenging the action taken by the respondent the State Government of Assam under the Asom Rashtrabhasha Prachar Samiti (Taking over management and Control) Act 1984 (Assam Act No. XXIII of 1984) which was an Act enacted by the Legislative Assembly of Assam and received the assent by the Governor of Assam and published in the Assam Gazette Extraordinary dated 15.12.84.
It also challenged the orders contained in Notifi cation Nos.
EPG 57/84/25/A EPG 57/84/30 A and EPG 57/84/ 51 A dated 1.10.84, 10.11.84 and 19.3.85 respectively issued by the Education (Personal) Department of the Government of Assam.
According to the petitioner in 1929 Lahore Congress under the leadership of Mahatma Gandhi adopted a resolution for the spread of Hindi as the common language for the whole of India with a view to promote national integrity and in pursuance of this resolution institutions for the spread and prachar of Hindi in the non Hindi areas were established.
First of this kind was established in Madras City in the name of Dakshin Bharat Hindi Prachar Samiti then in Wardha for the development and spread of Hindi.
in the rest of India.
Late Baba Raghab Das a devoted disciple of Gandhiji undertook the task of spreading Hindi in the North Eastern part of India and in 1934 eminent local leaders of this region Late Tarun Ram Phukan, Late Nabin Chandra Bardaloi, Late Gopinath Bardaloi, Late Krishna Nath Sarma and others joined Baba Raghab Das and the first institution named Asom Hindi Prachar Samiti was formed on 3.11.38 at Gauhati with late Gopinath Bardaloi the first Chief Minister of Assam under the 1935 Act as its President.
In 1948 Asom Hindi Prachar Samiti was renamed as Assam Rashtrabhasha Prachar Samiti with its head Office at Gauhati.
It is this Assam Rashtrabhasha Prachar Samiti, the petitioner No. 1, which is a registered society under the with its registered office at Hedayatpur, Gauhati 3 District Kamrup.
The registration No. of the Samiti which is 18th of 1951 and according to the petitioner this Society has a membership of about 164 22,000 persons scattered all over the States and Union Territories of North Eastern part of India.
The Samiti has district committees under its control.
The Samiti also has two affiliated bodies namely Manipur Hindi Prachar Sabha, Imphal and the Asom Rashtrabhasha Sewak Sangh.
This Samiti has a sole constitution known as Bidhan which is also regis tered with the Registrar of Societies Assam at Gauhati.
This Samiti is a literary body and under Section 4 of the Bidban the objects of the Samiti have been stated thus: (a) To propogate and promote Hindi as a na tional language in Assam, Meghalaya, Mizoram, Nagaland, Manipur, Tripura and Arunachal Pradesh as provided in Article 351 of the Constitution of India.
(b) to promote efficient, educated, qualified workers of good character to hold out the Indian ideal before the future generations (c) to serve the State languages and litera tures together with the promotion of Hindi.
(d) to serve the tribal language and culture through the medium of Hindi language and to create kindness with the tribal brethren.
(e) to undertake a programme of literacy amongst the illiterate.
This Samiti according to the petitioners discharge its functions including the holding of examinations in Hindi in the State of Assam, Meghalaya and the Union Territory (as they were then) of Mizoram and also production and publica tion of prescribed text books in Hindi for Primary Schools, High School, Higher Secondary schools and the Colleges upto the degree standard.
The Samiti holds different examinations twice in a year in which about 60,000 candidates at the time of the filing of this petition on an average used to appear.
The successful candidates are issued certificates which are recognised by the Government of India and the Government of Assam and various All India Organisation.
The Samiti also imparts training and teaching in Hindi through a large number of Vidyalayas numbering about 400 and through Prama nita Pracharaks i.e. authorised propagators numbering about 5000 scattered all over in the North Eastern part of India.
It is also alleged that the Samiti from the very inception had acquired assets 165 and properties and the assets and properties at the time of the filing of the petition were stated to be: 1.
Buildings Rs.70,64,000.00 2.
Printing Press with Machines Rs.15,00,000.00 and accessories 3.
Furniture Fixture Rs. 3,00,000.00 4.
Two portraits Rs. 10,000.00 5.
Vehicle Rs. 35,000.00 6.
Typewriting Schools including Rs. 60,000.00 machines and furnitures 7.
Iron Safe Rs. 30,000.00 8.
Compound fixing (leasedias) Rs. 30,000.00 9.
Bank Deposits Rs. 3,43,000.00 10.
Security Deposit with Ashok Rs. 30,000.00 Paper Mill Ltd. 11.
Shares of Assam Coop apex Rs. 5,000.00 Bank Ltd. 12.
Stock of printing papers Rs. 50,000.00 and stationaries 13.
Stock of text books Rs.22,00,000.00 14.
articles including Rs.50,00,000.00 utensils 15.
Building Materials Rs.25,00,000.00 16.
Central Library Rs.10,00,000.00 17.
Value of the old books Rs. 3,00,000.00 TOTAL Rs. 124,42,000.00 According to the Bidhan of the Samiti the management and administration of the Samiti is run by elected bodies namely Byabasthapika Sabha (meaning the General Council) and the Karyapalika (meaning the Executive Committee), the term of each body is 5 years from the date of holding of their first meeting.
Accordingly the term of 166 the Byabasthapika Sabha was to expire on 9.8.87 (five years from the date of holding the first meeting) which was held on 10.8.82 and the term of Karyapalika was to expire on 18.8.87 (five years from the date of the first meeting which was 19.8.82).
That under Section 10 of the Bidhan the Karyapalika of the Samiti consisted of 17 members with the following of fice bearers: (i) Adhyakasha (President) (ii) Karyadhakshya (Working President) (iii) Upadhakshya (Vice President) (iv) Mantri (General Secretary) (v) Koshadhyaksha (Treasurer) (vi) Six members elected by the Byabasthapika Sabha (vii) The Education Secretary to the Government of Assam or a member nominated by him.
(viii) Five members of the Byabasthapika Sabha nominated by the Adhyaksha, and (ix) Pradhan Sachib (Chief Secretary) and other departmental secretaries of the Samiti.
According to the petitioner the first meeting of this last Byabasthapika Sabha was held on 10.8.82 wherein peti tioner No. 2 was elected unanimously as its Mantri (General Secretary) besides other office bearers.
According to the Bidhan of the Samiti as it stood in 1982, the Chief Minister of Assam was the Ex Officio Adhyaksha of the Samiti but as at the time of holding of the first meeting the State of Assam was under President 's rule, consequently the ' office of Adhyaksha of the Samiti remained vacant as then there was no Chief Minister of Assam.
Petitioner No. 2 and other office bearers of the Karyapalika of the Samiti held the first meeting of the Karyapalika on 19.8.82 and the Karyapa lika was running the day to day administration and was managing the affairs of the Samiti according to the Peti tioner very efficiently and diligently.
It is alleged that in early part of 1983 President 's rule was lifted from Assam and a Ministry headed by Shri Hiteswar Saikia was installed in power in Assam.
But in the meantime the Samiti in its meeting of the Byabasthapika Sabha held on 17.7.83 passed a resolution for 167 amendment of the provisions of the Bidhan in the following manner: "That the words contained in Section 16 at page 21 of the Bidhan to the effect that the Chief Minister of Assam shall be the Ex offi cio Adhyaksha of the Samiti be deleted.
All other such references contained in the Bidhan be also accordingly amended.
This amendment shall come into force from today the 17.7.83.
" That the said resolution was adopted in full compliance of Section 30 of the Bidhan and all members present in the meeting except one supported the resolution.
This resolution amending Section 16 of the Bidhan was passed considering the difficulties that arose in the working of the Samiti by keeping Chief Minister as the Adhyaksha of the Samiti.
According to the petitioner this amendment was sought neces sary to keep the Samiti away from politics.
According to the petitioner this amendment was introduced in accordance with Section 30 of the Constitution (Bidban) of the Samiti which provided: "The Constitution of the Samiti may be amended as follows: (Ka) The proposal for amendment must reach the head office within the month of January every year.
(Kha) The amendment proposals will be sent for information to all the members of the Byabas thapika Sabha from the Office.
(Ga) The amendment will be carried out by the 2/3rd members present." According to the petitioner the procedure stated in this Section of the Constitution was followed and as only one person opposed the Constitution amendment was passed.
It is further alleged by the petitioner that as this amendment was passed on 17.7.83 from this date the Chief Minister ceased to be the Ex officio President and since then according to the petitioner he had nothing to do with the Samiti.
The post of Ex officio President was abolished.
According to the petitioner that Respondent No. 4 after passing of this amendment of the Bidhan on political consid eration passed an order dated 7.7.84 contained in the noti fication No. CMS 202/79/319 168 dated 7.7.84 whereby respondent No. 4 purportedly to act as the Ex Officio Adhyaksha of the Samiti declared as a state of emergency in the Samiti in exercise of his powers con ferred under section 16 (Gha) of the Bidban and dissolved the existing Karyapalika of the Samiti with immediate effect and also constituted an ad hoc body with himself as Chairman and five others as members to manage the affairs of the Samiti.
The petitioner has also filed a copy of this order.
It is alleged by the petitioner that under this order peti tioners Nos. 1 and 2 were asked to hand over the charges of the management of the Samiti to the Ad hoc Committee.
There upon the petitioner filed a suit being a Title Suit No. 110 of 1984 in the Court of the Assistant District Judge No. 1, Gauhati for a declaration that the order dated 7.7.84 passed by Respondent No. 4 declaring a state of emergency and by which he dissolved the existing Karyapalika of the Samiti and constituted an Ad hoc Committee, as void, illegal and without jurisdiction and unenforceable against the petition er Society.
As on the day on which he passed the Order he was no longer the Adhyaksha as the Constitution has been amended before that day.
Petitioner also prayed for perma nent injunction restraining the respondent No. 4 and other members of the Ad hoc committee, their agents and servants from giving effect to the order.
The petitioners also filed an application under Order 39 Rule 1 and 2 of the Code of Civil Procedure for the issuance of a temporary injunction.
It is alleged that the Assistant District Judge No. 1, Gauhati by his order dated 19.7.84 issued a notice to the defendants of that suit to show cause as to why a temporary injunction as prayed for by the petitioners should not be granted and fixed 13.8.84 as the date for showing cause.
The defendants filed their objection on 21.8.84 and the case was fixed on 25.10.84 for consideration of the question of issuing a temporary injunction.
When the matter was pending in the Court for considera tion of the question of temporary injunction the Governor of Assam purported to act under Clause 1 of Article 230 of the Constitution of India promulgated an Ordinance called the Asom Rashtrabhasha Prachar Samiti (taking over of Management and Control) Ordinance, 1984 and Section 1 sub clause (ii) of this Ordinance provided that the Ordinance shall extend to all areas over which the Asom Rashtrabhasha Prachar Samiti had its jurisdiction immediately before the commence ment of the Ordinance by a Notification No. EPG 57/84/16 issued under the signatures of Respondent No. 3 the Governor of Assam fixed Ist of October, 1984 as the appointed day on which the aforesaid Ordinance 169 came into force and Section 3 of the said Ordinance provided that the Government may constitute a Board for the purposes of taking over the management and control of the Samiti consisting of not more than 9 members.
According to the petitioners this Ordinance was issued at the instance of the Chief Minister which was unnecessary, unwarranted and un called for and was against the law laid down by the Consti tution Bench of this Court.
Notification was issued on 7.7.84, Preamble of which reads as under: "Whereas the Chief Minister of Assam in his capacity as Ex officio Adhyakasha of the Asom R.B.P. Samiti is satisfied that deterioration of the financial condition of the Samiti has resulted in financial deadlock and the group rivalry among the members, confrontation between the management and the employees culminating in institution of law suits, hunger strikes by employees and chaos in administration matters have resulted in admin istration deadlock.
" The petitioners contended that what is stated in the Pream ble is incorrect and misconceived.
The financial condition of the Samiti had never deteriorated nor there were any adverse remark by any auditor in the regular auditing of the accounts of the Samiti.
It is alleged that even other facts leading to the taking over are wholly incorrect and mala cious.
Thereafter in 1984 Assam Legislative Assembly passed an Act i.e. Act No. XXIII of 1984 replacing the Ordinance and this Act received the assent of the Governor of Assam on 12.8.84 and was published in the Gazette Extraordinary dated 15.12.84.
Under Section 3 of this Act the Assam Rashtrabha sha Prachar Samiti (taking over of Management and Control) Act, 1984, the number of members constituting the Board was raised to 13.
By the provisions of this Act virtually the Samiti which was a public body constituted by its members having elected Byabasthapika Sabha and Karyapalika were substituted by Board appointed by the Government and all the functions, properties and affairs of the Samiti were taken over by this Board and it is this action taken under the Ordinance and the Act and ultimately the Act which is the subject matter of challenge in this Writ Petition.
As this infringes the fundamental rights of the members who consti tute the Samiti their rights under Article 19(1)(c) and by this process of taking over the Samiti has been deprived of its assets and properties and even as alleged by the peti tioners Government has gone to the 170 extent of changing the name of the institution also.
It is alleged that after the passing of this Act the notification under section 3 was issued which was EPG 57/34/75 dated 1.10.84 by which the Rashtrabhasha Prachar Board was consti tuted with respondents 11, 12 and 13 as members and by this order all persons except respondent No. 12 who was not even the member of the Rashtrabhasha Prachar Samiti were nominat ed.
The petitioners also alleged that in fact all this happened because when the then Chief Minister of Assam learnt about the amendment of the Constitution carried out by Byabasthapika Sabha learnt that under the unamended Bidhan was the Ex officio Adhyaksha has been dropped by the amendment of the Constitution that with mala fide intention he started taking action in a manner in which he could retain the control of the institution.
First,he invoked the Constitution itself by superseding the body by invoking emergency provisions but when that was challenged by a suit, an ordinance was brought taking over the Samiti as a whole specially replacing the Byabasthapika Sabha and the Karyapa lika and later the ordinance was replaced by the Act and it was contended that this all was the mala fide action of the then Chief Minister of Assam and it is further contended that unfortunately even after the new elections and a new Government comes in power in Assam the Act which as its title discloses was a temporary measure was continued at perpetuity, and the Samiti is being run by nominated members and the rights of the members of the Samiti under Article 19 has not only been restricted but has been taken away.
It was also contended that the history of the Samiti and the manner in which it was formed and the persons who initially consti tuted the Samiti is of significance because its history and historical background touches the ideological and sentimen tal aspirations of the people of Assam and the infringement of this right to form an association under Article 19(1)(c) is challenged as mala fide action motivated with selfish political motivation.
It is also contended that by the operation of this Act those who have nothing to do with the Samiti or its ideals and who were not even the members of the Samiti have been nominated as the members of the Board and they are supposed to run the affairs of the Samiti whereas those who have contributed their heart and soul for the ideals of the Samiti and who have put in long years of hard labour to build up are deprived of their right to manage the affairs of the Samiti.
It is also contended that even the assets and the properties of the Rashtrabhasha Prachar Samiti is being mismanaged by nominated board as it has no moral attachment to the ideals nor aptitude with the work of the Samiti and the assets are being neutralized.
171 It was also contended that the heading of the Act as it disclosed "An Act to provide for temporary transfer of the management and control of the affairs of A.R.B.P.S. from the Byabasthapika Sabha, Karyapalika and other holders of office of the Assam Rashtrabhasha Prachar Samiti to a Board".
This heading of the Act, according to the learned counsel, is just an eye wash as this heading shows that a temporary arrangement was made because the management of the Samiti was not in proper hands and the temporary arrangement was only to improve the functioning of the society and ultimate ly it has to be handed over back to the elected body consti tuted under the Bidhan (constitution of the society regis tered under the ) but in fact after the passing of this Act in 1984 till today the re spondent State had no point of time, even thought of restor ing the body to the normal functioning after holding elec tion in accordance with the constitution of the Society.
In fact even during the hearing of this Writ Petition the counsel appearing for the State was asked to intimate the Court if even now the State knowing that this was a tempo rary measure is intending to restore the society back with elected functionaries under the constitution.
It was indi cated that the Government of Assam has no intentions even now to end this temporary arrangement of the Samiti.
It is plain that although the Act talks of a temporary measure but it is only an eye wash and by this process the State Govern ment intends to deprive the members of the society their rights under Article 19(1)(c) for all times to come.
In the Act there is no provision providing for restoration of the elected bodies which shows that the use of phrase 'tempo rary ' was just an eye wash.
Learned counsel appearing for the State attempted to justify the action however denying that it was not because the constitution was amended and therefore the Chief Minis ter was annoyed but attempted to suggest that there was some mismanagement of the society but in any event there was no logic which could be suggested for such a permanent taking over of the society registered discharging functions which could not be said to be not ideal and which had started working on some ideals which could not be said 'not for public good '.
It is clear that now as the Act of 1984 and a Board nominated or appointed under Section 3 of the Act is con trolling the affairs of the Society it is not necessary to go into the orders passed by the Chief Minister invoking the emergency powers although the facts which were alleged clearly go to show that except that constitution was amended and the Chief Minister was dropped from the place which he used to enjoy before the amendment of the Bidhan (Constitu tion).
There was 172 nothing serious and the Chief Minister who in fact had ceased to be an Adhyaksha because of the constitutional amendment took that action only to stick to the position and the subsequent acts even if mala fide action is not clearly established, as was alleged, we have no hesitation in ob serving that there appears to be no .justification as it is clear that if the Act was enacted to meet a temporary con tingency for taking over of the management temporarily it could have provided for the restoration of the elected body in due course.
It is significant that this Act is silent and although as quoted above it talks of being temporary act, it continues and even as stated above there appears to be no intention of the State Government to restore the body back to the elected bodies under the constitution of the society itself.
In these circumstances therefore there appears to be no justification for all these actions starting from invok ing the emergency provisions till enacting the present Act i.e. Asom Rashtrabhasha Prachar Samiti (taking over of the Management and Control) Act, 1984.
Except the allegations of mala fide which are not admit ted, rest of the facts are not in dispute.
The only sugges tion made in the counter is that there was mismanagement, delay in examinations and results and it was because of that that management only under this Act was taken over.
But neither in the counter nor during the course of arguments anything could be said on behalf of the State for a perma nent justification of taking over of the management of the Samiti depriving its members the right under Article 19(1)(c) of the Constitution of India.
In the counter it was contended that the Legislature of the State was competent under Entry 25 of the List Ill (concurrent list) Schedule 7 of the Constitution to enact this law.
Entry 25 List III reads: "25.
Education, including technical education, medical education and universities, subject to the provisions of Entries 63, 64, 65 and 66 of List I; vocational and technical training of labour." The mere perusal of Entry 25 will reveal as to how difficult it will be to stretch Entry 25 to mean the authority to deprive an association of its right under Article 19(1)(c) of the Constitution of India.
It would have been different situation, if the state felt that it wanted to do the same thing what this Samiti was doing and further the acts of education and for that purpose if it had taken steps to start similar functions at the 173 state level probably the things would have been different.
But here we are simply concerned with the taking over of the management of a registered society having large membership and assets and properties following programme and policies living to the ideals which could not be in any way chal lenged or adversely commented.
Article 19(1)(c) of the Constitution provides: "19.
Protection of certain rights regarding freedom of speech, etc. (1) All citizens shall have the right (a) xx xx xx (b) xx xx xx (c) to form associations or unions; (d) xx xx xx (e) xx xx xx (f) xx xx xx (g) xx xx xx" The Constitution Bench of this Court had an occasion to consider exactly a similar situation when a Hindi Sahitya Sammelan was taken over first by a State law and later by an Act of Parliament and this Court considering the question in Damyanti Naranga vs The Union of India and Others, ; , observed: "Further, under Section 7(2) of the Act, the Governing Body of the new Sammelan is to consist of such number of persons, not exceed ing 55, as the Central Government may from time to time determine; and out of these, a number not exceeding 7 are to be nominated by the Central Government from among education ists of repute and eminent Hindi scholars.
These 7 nominees are to be chosen by the Central Government.
" In the present case the Government has taken the power under Section 3 to appoint a Board and the Government can appoint any one not connected with the Society at all to be in the Board.
In the Act which was being examined by the Constitution Bench there were some restrictions on the nominations of persons although the persons were to be nominated by the Central Government but in the present Act it is left to the discretion of the Government to appoint the whole of the Board which will take place of not only 'the Managing Committee i.e. the Karyapalika but also the place of Byabasthapika Sabha which normally used to be an elected body.
In this view the observation of 174 the Constitution Bench in Damyanti Naranga 's case goes a long way.
It is observed in this judgment: "This is clear interference with the right to form an association which had been exercised by the members of the Society by informing the Society with its Constitution, under which they were members and future members could only come in as a result of their choice by being elected by their working Committee.
" It is therefore clear that so far as the present case is concerned it is not only that the new members are intro duced, not only that the complete control is left to the Board to be nominated by the Government, about the persons no norms have been laid down, the person so nominated could be anyone and no control is kept to those who formed the Society, those who had a right to form an association will be kept away and the Society shall be run by group of per sons nominated by the Government in accordance with Section 3.
It is therefore clear that what was done in the Sammelan Acts which were under examination in the Constitution Bench judgment referred to above, much more has been done in this case.
In this case virtually the right of association has been taken away and not only that it is a sort of depriva tion for all times as it is not even provided that this Board may be an interim Board and thereafter a proper Board will be elected but here this Board will continue to control and manage the affairs of the Society.
In the Constitution Bench case their Lordships considered the scope of Article 19(1)(c) in the context of what was contemplated in that Act and observed: "The right to form an association, in our opinion, necessarily implies that the persons forming the Association have also the right to continue to be associated with only those whom they voluntarily admit in the Association.
Any law, by which members are introduced in the voluntary Association without any option being given to the members to keep them out, or any law which takes away the membership of those who have voluntarily joined it, will be a law violating the right to form an association.
If we were to accept the submission that the right guaranteed by article 19(1)(c) is confined to the initial stage of forming an Association and does not protect the right to continue the Association with the membership either chosen by the founders or regulated by rules made by the Association 175 itself, the right would be meaningless be cause, as soon as an Association is formed, a law may be passed interfering with its compo sition, so that the Association formed may not be able to function at all.
The right can be effective only if it is held to include within it the right to continue the Association with its composition as voluntarily agreed upon by the persons forming the association.
" It is therefore clear that even on the basis of the pro nouncement of the Constitution Bench, the Act and the noti fication issued under this Act taking over the management of the Rashtrabhasha Prachar Samiti could not be accepted to be in accordance with the Constitution.
Apart from this it is also clear that although when the Act talks of a temporary measure in fact, the Act does not provide for as to how when the temporary measures comes to an end the elected Byabasthapika Sabha and Karyapalika would be restored.
It is not only that but it is also apparent that since 1984 when this Act was passed and a notification appointing a Board was issued, the Government has not chosen to take any steps to restore the Society back to its elected authorities and office bearers, inspite of the fact that we indicated and asked the counsel appearing for the State to let us know even if now the State is intending to restore it back to the Society but unfortunately it appears that with out considering the question and its constitutional aspects the reply came that the State has no desire to restore the Samiti and therefore we are left with no option but to decide and decide upholding the Constitution and the right of association conferred under Article 19(1)(c) of the Constitution.
We therefore allow these writ petitions, set aside the notification issued under the Act enacted by the Assam Legislature holding that the Act itself is ultra vires of the Constitution.
We therefore also quash the notifica tion issued under Section 3 of the Act as ultra vires by which a Board was nominated to replace the Karyapalika and Byabasthapika Sabha.
At the time when this Board was constituted under Sec tion 3 the Karyapalika and Byabasthapika Sabha duly elected were functioning and they had sufficient time to go on and in this view of the matter we further direct that the Karya palika and Byabasthapika Sabha which were in existence in 1984 when initially the action under the emergency provi sions was taken followed by the notification under the Ordinance and the Act shall be restored back and they shall take over the management of the Samiti from the Board imme diately but it is made clear that the Karyapalika and Bya basthapika Sabha which were 176 functioning in 1984 and which we are restoring will within six months from the date of this Order will hold proper elections in accordance with the Constitution to elect a Byabasthapika and Karyapalika.
This is necessary because the period of the Karyapalika and Byabasthapika Sabha which was functioning in 1984 has come to an end although from 1984 till today they were not allowed to function.
It is further directed that the authorities, officers appointed by the Board or the State Government shall restore back all assets and properties of the Samiti to the Karyapalika which will be restored immediately after the passing of this Order.
The petitioners shall also be entitled to costs of this peti tion.
Costs quantified at Rs. 10,000.
R.N.J. Petition allowed.
| For the spread of Hindi in North Eastern part of India an institution named Asom Hindi Prachar Samiti was formed on 3.11.38 at Gauhati.
In 1948 this Samiti was renamed as Assam Rashtrabhasha Prachar Samiti.
The Petitioner No. 1 herein is a registered body which claims to have a membership of about 22000 persons scattered all over the North Eastern part of India.
This Samity has a sole constitution known as Bidhan which is also a duly registered body.
The Samiti holds different examinations in Hindi twice a year, publishes text books in Hindi for Primary Schools, High Schools, Higher Secondary Schools and Colleges upto the degree standard.
Certificates issued by the Samity are recognised by the Government of India, the Government of Assam and various other organisations.
The Samiti also imparts training and teaching in Hindi through a number of Vidyalayas and Prama nita Pracharaks.
The assets and properties of the Samiti at the time of filing this Petition are stated to be worth Rs. 1,24,42,000.00.
According to the Bidhart, the management and administra tion of the Samiti is run by elected bodies namely Byabas thapika Sabha and Karyapalika, each having 5 years term from the date of holding of its first meeting.
The Karyapalika consisted of 17 members.
The Chief Minister of Assam was the Ex officio Adhyaksa of the Samiti but at the time of holding of the first meeting, the State of Assam was under Presi dent 's rule and consequently the office of Adhyaksha re mained vacant.
Petitioner No. 2 was unanimously elected Mantri.
Petitioner No. 2 and other office bearers of the Karyapalika held the first meeting on 19.8.1982 and the Karyapalika was running and managing the day 161 to day affairs of the Samiti efficiently and diligently.
The Samiti in its meeting held on 17.7.83 passed a resolution amending the Bidhan deleting the provision that the Chief Minister of Assam shall be the ex officio Adhyak sha of the Samiti.
This resolution was adopted in full compliance of Section 30 of the Bidhan and all members present in the meeting except one supported the resolution.
After the passing of this amendment, the Respondent No. 4 as alleged by the petitioners, passed an order dated 7.7.84 on political considerations purportedly to act as the Ex offi cio Adhyaksha of the Samiti declared a state of emergency in the Samiti in exercise of the powers conferred under section 16(Gha) of the Bidhan, dissolved the existing Karyapalika and constituted an ad hoc body with himself as Chairman and five others as members to manage the affairs of the Samiti and asked the Petitioners to hand over the charge of the Samiti to this Ad hoc committee.
Thereupon, the petitioners filed a suit for a declaration that the order dated 7.7.84 passed by Respondent No. 4 was void, illegal, without juris diction and unenforceable against the petitioner society.
The Petitioners also prayed for a permanent injunction restraining the respondents from giving effect to the order and also moved an application for issuance of a temporary injunction upon which a show cause notice was issued to the defendants who filed their objections.
While the matter was pending consideration of the question of issuing of a tempo rary injunction the Governor of Assam purporting to act under clause I of Article 230 of the Constitution of India promulgated an ordinance called the Asom Rashtrabhasha Prachar Samiti (taking over of management and control) Ordinance, 1984.
In due course the Ordinance was replaced by an Act passed by the Assam Legislative Assembly.
Under the Ordinance and the Act virtually the Samity which was a public body was substituted by a Board appointed by the Government and all the functions, properties and affairs of the Samiti were taken over by the Board.
It is this action taken under the Ordinance and ultimately the Act which is the subject matter of challenge in this Writ Petition.
It is contended that although the Act as its title discloses, was a temporary measure, was continued at perpetuity and the Samiti is being run by nominated members and the rights of the members of the Samiti under Article 19 of the Constitu tion of India have not only been restricted but taken away.
Even during the hearing it was indicated that the Government of Assam has no intention to end the temporary arrangement of the Samiti and by this process the State Government intends to deprive the members of the society their rights under Article 19(1)(C) for all times to 162 come.
In the Act there is no provision providing for resto ration of the elected bodies which shows that the use of phrase 'temporary ' was just an eye wash.
Accepting the contentions of the Petitioners, this Court while allowing the Writ Petition.
HELD: As the Act of 1984 and the Board nominated or appointed under Section 3 of the Act is controlling the affairs of the Society it is not necessary to go into the orders passed by the Chief Minister invoking the emergency powers although the facts alleged clearly go to show that except that the Constitution (Bidhan) was amended and the Chief Minister was dropped from the place which he used to enjoy before the amendment of the Bidhan, there was nothing serious justifying all these actions starting from invoking the emergency provisions till enacting the present Act.
[171G H; 172A] It is also apparent that since 1984 when this Act was passed and a notification appointing a Board was issued, the Government has not chosen to take any steps to restore the Society back to its elected authorities and office bearers and nor does it intend to do so even now.
Thus this Court is left with no option but to decide and decide upholding the Constitution and the right of association conferred under Article 19(1)(C) of the Constitution.
[175D E] The Complete Control has been taken away from the Peti tioner Society and is given to Board nominated by the Gov ernment.
The Board is not as an interim measure.
But will continue to control and manage the affairs of the society.
This amounts to taking away the fundamental right of the Petitioner Society to form an Association guaranteed under Article 19(1)(C) of the Constitution of India.
[170E] The Notification under the Act enacted by the Assam Legislature is set aside holding that the Act itself is ultra vires of the Constitution.
The Notification issued under Section 3 of the Act by which a Board was nominated to replace the Karyapalika and Byabasthapika Sabha is also quashed.
[175E] Damyanti Narang vs The Union of India and others, , referred to.
|
: Criminal Appeals Nos. 15 and 35 of 1967.
Appeals from the judgment and order dated October 12, 1966 of the Bombay High Court in Criminal Revision Application No. 289 of 1966.
N.S.Bindra,R.M.Parikh and S.P. Nayar, for the appellants (in Cr. A. No. 15 of 1967) and the respondents (in Cr. A. No. 35 of 1967).
N.N. Keswani, for the appellants (in Cr. A. No. 35 of 1967) and the respondents (in Cr. A. No. 15 of 1967).
K.R. Chaudhuri, for the intervener (in Cr. A. No. 15 of 1967).
The Judgment of the Court was delivered by Hegde, J.
These appeals by certificate arise from the decision of the High Court of Bombay in Criminal Revision Application No. 238 of 1966 wherein the following questions of law arise for decision: (i) Whether the prosecution from which these Criminal Revision Petitions arose is barred under article 20 (2) of the Constitution as against accused Nos. 1 and 2 in that case by reason of the decision of the Collector of Customs in the proceedings under the ? (ii) Whether under any circumstance the finding of the Collector of Customs that the Ist and 2nd accused are not proved to be guilty operated as an issue estoppel in the criminal case against those accused ? (iii) Whether the present prosecution amounts to an abuse of the process of the Court in view of inordinate delay in launching the same and consequently whether it is liable to be quashed ? (iv) Whether section 173(4), Criminal Procedure Code is applicable to the facts of this case and (v) Whether the documents mentioned in the petition filed by the 1st accused on August 3, 1965 are required tO be summoned under section 94, Criminal Procedure Code ? The aforementioned questions were raised before the trial Magistrate by the 1st accused by means of an application but 441 the learned Magistrate ' found ,no substance in the pleas advanced in that application and accordingly he dismissed the same as per his order dated 25,1 1966.
In revision, a .Division Bench of the Bombay High Court agreeing with the trial Magistrate negatived all but one of the contentions advanced on behalf of accused Nos. 1 and 2.
It did not agree with the learned Magistrate that there was no need, at that stage to summon the statements of witnesses recorded Customs Act.
It directed the learned Magistrate to summon hose statements and curiously enough, it went further and directed him to see that the prosecution made available the copies of those statements to the accused before the commencement of the enquiry in the case.
In so far as.
the Other documents called for are concerned, the High Court after indicating, what according to it, is the law on the subject left the matter to the discretion of the learned Magistrate.
Criminal Appeal No. 15 of 1967 is filed by the Assistant Collector of Customs, Bombay and the State of Maharashtra and Criminal Appeal No. 35 of 1967 is the appeal filed by accused Nos. 1 and 2 in the case (Case No. 98 of 1965 in the Court of the Chief Presidency Magistrate, Bombay).
The appellants in Criminal Appeal No. 15 of 1967 challenge the correctness of the decision of the Bombay High Court in so far as it went against them and the appellants in Criminal Appeal No. 35 of 1967 challenge that decision in other respects.
The prosecution case is that the accused persons and some other unknown persons had entered into a conspiracy at Bombay and other places in the beginning Of October, 1959 or India and in pursuance of that conspiracy they had smuggled several items of foreign goods in the years 1959 and 1960.
In that connection an enquiry was held by the Customs authorities.
In the course of the enquiry some of the goods said to have been smuggled were seized.
After the close of the enquiry those goods were ordered to be confiscated.
In addition penalty was imposed on some of the accused.
Thereafter on February 19, 1965, the Assistant Collector of Customs, Bombay after obtaining the required sanction of the Government flied a complaint against five persons including the appellants in Criminal Appeal No. 35 of 1967 (accused Nos. 1 and 2 in the case) under section 120 B,I.P.C. read with cls.
(37), (75), (76) and (81) of section 167 of the (Act VIII of 1878) as well as under section 5 of the Imports and Exports (Control) Act, 1947.
Before the commencement of the enquiry in that complaint, the 1st accused filed on August 3, 1965, the application mentioned above.
C.I./69 11 442 Now we shall proceed to examine the contentions set out earlier.
Reliance on article 20(2) is placed under the following circumstances.
In the enquiry held by the Collector of Customs, he gave the benefit of doubt to accused Nos. 1 and 2.
This is what he stated therein: "As regards M/s. Lamel Enterprises (of which accused No. 1 is the proprietor and accused No. 2 is the Manager) although it is apparent that they have directly assisted the importers in their illegal activities and are morally guilty.
Since there is no conclusive evidence against them to hold them as persons concerned in the act of unauthorised importation, they escape on a benefit of doubt." Despite this finding the Assistant Collector in his complaint referred to earlier seeks to prosecute these accused persons.
Hence the question is whether that prosecution is barred under article 20(2) of the Constitution which says that no person shall be prosecuted and punished for the same offence more than once.
This article has no direct bearing on the question at issue.
Evedently those accused persons want to spell out from this article the rule of autrefois acquit embodied in section 403, Criminal Procedure Code.
Assuming we can do that still it is not possible to hold that a proceeding before the Collector of Customs is a prosecution for an offence.
In order to get the benefit of section 403, Criminal Procedure Code or article 20(2), it is necessary for an accused person to establish that he had been tried by a "court of competent jurisdiction" for an offence and he is convicted or acquitted of that offence and the said conviction or acquittal is in force.
If that much is established, it can be contended that he is not liable to be tried again for the same offence nor on the same facts for any other offence for which a different charge from the one made against him might have been made under section 236 or for which he ' might have been convicted under section 237.
It has been repeatedly held by this Court that adjudication before a Collector of Customs is not a "prosecution" nor the Collector of Customs a "Court".
In Maqbool Hussain vs The State of Bombay(1), this Court held that the wording of article 20 of the Constitution and the words used therein show that the proceedings therein contemplated are proceedings of the nature of criminal proceedings before a court of law or a judicial tribunal and "prosecution" in this context would mean an initiation or starting of proceedings of a criminal nature before a court of law or a judicial tribunal in accordance with the procedure prescribed in the statute (1) ; 443 which creates the offence and regulates the procedure.
This Court further held that where a person against whom proceedings had been taken by the Sea Customs authorities under section 167 of the and an order for confiscation of goods had been passed, was subsequently prosecuted before a criminal court for an offence under section 23 of the Foreign Exchange Regulation Act in respect of the same act, the proceeding before the Sea Customs authorities was not a "prosecution" and the order for confiscation was not a "punishment" inflicted by a Court or judicial tribunal within the meaning of article 20(2) of the Constitution and hence his subsequent prosecution was not barred.
The said rule was reiterated in Thomas Dana vs State of Punjab(1) and in several other cases.
We shall not take up the contention that the finding of the Collector of Customs referred to earlier operated as an issue estoppel in the present prosecution.
The issue estoppel rule is but a facet of the doctrine of autrefois acquit.
In Sambasivan vs Public Prosecutor, Federation of Malaya(a), Lord MacDermott enunciated the said rule thus: "The effect of a verdict of acquittal pronounced by a competent court on a lawful charge and after a lawful trial is not completely stated by saying that the person acquitted cannot be tried again for the same offence.
To that it must be added that the verdict is binding and conclusive in all subsequent proceedings between the parties to the adjudication.
The maxim "Res judicata pro veritate accipitur" is no less appliCable to criminal than to civil proceedings.
Here, the appellant having been acquitted at the first trial on the charge of having ammunition in his possession, the prosecution was bound to accept the correctness of that verdict and was precluded from taking any step to challenge it at the second trial.
And the appellant was no less entitled to rely on his acquittal in so far as it might be relevant in his defence.
That it was not conclusive of his innocence on the firearm charge is plain, but it undoubtedly reduced in some degree the weight of the case against him, for at the first trial the facts proved in support of one charge were clearly relevant to the other having regard to the circumstances in which the ammunition and revolver were found and the fact that they fitted each other.
" The rule laid down in that decision was adopted ' by this Court in Pritam Singh vs State of Punjab(a) and again in N.R. Ghose alias Nikhil Ranjan Ghose vs State of West Bengal(4).
(1) (2) at p. 479.
(3) AI.R. 1956 S.C, 415.
(4) ; 444 But before an accused can call into aid the above rule, he 'must establish that in a previous lawful trial before a competent court,he has secured a verdict of acquittal which verdict is binding on his prosecutor.
In the instant case for the reasons already mentioned, we are unable to hold that the proceeding before the Collector of Customs is a criminal trial.
From this it follows that the decision of the Collector does not amount to a verdict of acquittal in favour of accused Nos. 1 and 2.
This takes us to the contention whether the prosecution must be quashed because of the delay in instituting the same.
It is urged on behalf of the accused that because of the delay in launching the same, the present prosecution amounts to an abuse of the process of the Court.
The High Court has repelled that contention.
It has come to the conclusion that the delay in filing the complaint is satisfactorily explained.
That apart, it is not the case.
of the accused that any period of limitation is prescribed for filing.
the complaint.
Hence the court before which the complaint was filed could not have thrown out the same on the sole ground that there has been delay in filing it.
The question of delay in filing a complaint may be a circumstance to be taken into consideration in arriving at the final verdict.
But by itself it affords no ground for dismissing the complaint.
Hence we see no substance in the contention that the prosecution should be quashed on the ground that there, was delay in instituting the complaint.
We also see no merit in the contention that the accused in this case are entitled to the benefit of section 173(4), Criminal Procedure Code which provides that before the commencement of the enquiry or trial the officer in charge of the police station who forwards a report under section 173, Criminal Procedure Code, should furnish or cause to be furnished to the accused, free of cost, a copy of the report forwarded under section 173(1), Criminal Procedure Code of the first information report recorded under section 154, Criminal Procedure Code and all other documents or relevant extracts thereof on which the prosecution proposes to rely, including the statements and confessions, if any, recorded under section 164, Criminal Procedure Code and the statements recorded under section 161, Criminal Procedure Code of all the persons whom the prosecution proposes to examine as its witnesses.
On a plain reading of section 173, Criminal Procedure Code, it is clear that the same is wholly inapplicable to the facts of the present case.
In the instant case no report had been sent under section 173, Criminal Procedure Code.
Therefore that provision is not attracted.
That provision is attracted only in a case investigated by a police officer under Chapter XIV of the Criminal Procedure Code, followed up by a final report under section 173, Criminal Procedure Code.
It may be remembered that sub section
(4) of 445 173, was incorporated into the Criminal Procedure Code for the first time by Central Act 26 of 1955, presumably because of the changes effected in the mode of trials in cases instituted on police reports.
Before the Criminal Procedure Code was amended by Act 26 of 1955, there was no difference in the procedure to be adopted in the cases instituted on police reports and in other cases.
Till then in all.
cases irrespective of the fact whether they were instituted on police reports or on private complaints, the procedure regarding enquiries or trials was identical.
In both type of cases, there were two distinct stages i.e. the enquiry stage and the trial stage.
When the prosecution witnesses were examined in a case before a charge is framed, it was open to the accused to cross examine them.
Hence there was no need for making available to the accused the documents mentioned in subs.(4) of section 173, Criminal Procedure Code.
The right given to him under section 162, Criminal Procedure Code was thought to be sufficient to safeguard his interest.
But Act 26 of 1955 as mentioned earlier made substantial changes in the procedure to be adopted in the matter of enquiry in cases instituted on police reports.
That procedure is now set out in section 251(A), Criminal Procedure Code.
This new procedure truncated the enquiry stage.
Section 251 (A), Criminal Procedure Code says that the Magistrate, if upon consideration of all the documents referred to in section 173 and making such examination if any, of the accused as he thinks necessary and after giving the prosecution and the accused an opportunity of being heard considers the charge against the accused to be groundless he shall discharge him but if he is of opinion that there is ground for presuming that the accused has committed an offence triable as a warrant case which he is competent to try.
and which in his opinion could be adequately punished by him, he shall frame in writing a charge against him.
Under the procedure prescribed in section 251 (A), Criminal Procedure Code but for the facility provided to him under s.173(4)of that Code an accused person would have been greatly handicapped in his defence.
But in a case instituted on a complaint, like the one before us and governed by sections 252 to 259 of the Criminal Procedure Code, no such difficulty arises.
Therein the position is as it was before the amendment of the Criminal Procedure Code in 1955.
We are unable to agree with the learned fudges of the High Court that the legislature did not make available the benefit of s.173(4), Criminal Procedure Code in cases instituted otherwise than on police reports by oversight.
The observations of the learned Judges in the course of their judgment that "Even the great Homer occasionally nods.
There is nothing to show that the,legislature has applied its mind to the question of the amendment of the procedure so far as the investigation of an offence 446 under the is concerned at the time when it was considering amendments to the Criminal Procedure Code" is without any basis.
In the first place, it is not proper to assume except on very good grounds that there is any lacuna in any statute or that the legislature has not done its duty properly.
Secondly from the history of the legislation to which reference has been made earlier, the reason for introducing section 173(4) is clear.
The learned judges of the High Court were constrained to hold that s, 173(4), Criminal Procedure Code in terms does not apply to the present case.
But strangely enough that even after coming to the conclusion that provision is inapplicable to the facts of the present case, they have directed the learned Magistrate to require the prosecution to make available to the accused, the copies, of the statements recorded from the prosecution witnesses during the enquiry under the Customs Act.
They have purported to make that order under section 94(1), Criminal Procedure Code which to the extent material for our present purpose reads: "Whenever any Court . . considers that production of any document or other thing is necessary or desirable for the purposes of any . enquiry, trial or other proceeding under this Code by or before such Court . such Court may issue a summons . to the person in whose possession and power such document or thing is believed to be, requiring him to attend and produce it.
or to produce it, at the time and place stated in the summons or order.
" This section does not empower a Magistrate to direct the prosecution to give copies of any documents to an accused person That much appears to be plain from the language of that section it was impermissible for the High Court to read into section 94, Criminal Procedure Code the requirements of section 173(4), Criminal Procedure Code.
The High Court was not justified, in indirectly applying to cases instituted on private complaints the requirements of section 173(4), Criminal Procedure Code.
That apart we do not think that the High Court was justified in interfering with the discretion of the learned Magistrate Whether a particular document should be summoned or not is essentially in the discretion of the trial court.
In the instant case the Special Public Prosecutor had assured the learned trial Magistrate that he would keep in readiness the statements of witnesses recorded by the Customs authorities and shall make avail able to the defence Counsel the statement of the concerned witness as and when he is examined.
In view of that assurance, the learned Magistrate observed in his order: "The recording of the prosecution evidence is yet commence in this case and at present there are no male 447 before me to decide whether or not the production of any of the statements and documents named by the accused in his application is desirable or necessary for the purpose of the enquiry or trial.
As stated at the outset, the learned Special Prosecutor has given an undertaking that he would produce all the relevant statements and documents at the proper time in the course of the heating of the case.
The request made for the issue of the summons under section 94, Criminal Procedure Code is also omnibus." The reasons given by the learned Magistrate in support of his order are good reasons.
The High Court has not come to the conclusion that the documents in question, if not produced in court are likely to be destroyed or tampered with or the same are not likely to be made available when required.
It has proceeded on the erroneous basis that the accused will not have a fair trial unless they are supplied with the copies of those statements even before the enquiry commences.
Except for very good reasons, the High Court should not interfere with the discretion conferred on the trial courts in the matter of summoning documents.
Such interferences would unnecessarily impede the progress of eases and result in waste of public money and time as has happened in this case.
For the reasons mentioned above, we allow Criminal Appeal No. 15 of 1967 and dismiss Criminal Appeal No. 35 of 1967.
In other words, we restore the order of the learned Magistrate.
G.C. Criminal Appeal No. 15 of 1967 allowed.
Criminal Appeal No. 35 of 1967 dismissed.
| The appellant entered into a contract with the Government of India.
The contract contained an arbitration clause.
For certain supplies made under the contract the appellant made representations to the Government or payment and for arbitration of disputes.
On or about July 10, 1958 Government refused to refer the matter for arbitration.
On July 11, 1961 the appellant flied an application in the Court of the District Judge under sections 8 and 20 of the , for filing the arbitration agreement and for an order of reference of the disputes to an arbitrator appointed by the court.
The respondent contended that the application was barred by Limitation.
The District Judge allowed the application, holding that there was no limitation for making an application under sections 8 and 20.
The defendant 's appeal was dismissed by the High Court as incompetent in so far as it challenged the order under section 8 but was allowed in so far as it challenged the order under section 20.
The High Court held that an application under section 20 is governed 'by article 181 of the Indian Limitation Act, 1908.
In coming to this conclusion the High Court took into account the settled judicial view that the.
operation of article 181 is limited to applications under the Code of Civil Procedure.
and reasoned as follows: Article 181 should be construed as if the words 'under the Code ' were added in it.
The repealed paragraph 17 of the second schedule to the Code and re enacted it in section 70 with minor modifications.
That being so section 8(1) of the applied and the implied reference in article 181 to paragraph 17 of the second schedule to the Code should be construed as a reference to section 20 of the .
Appeal against the High Court 's judgment was filed with certificate.
HELD: The 'appeal must be allowed.
By the the Legislature amended articles 158 and 178 of the Limitation Act and made them applicable to the relevant proceedings under the but no similar change was made in article 181.
It is manifest that save as provided in articles 158 and 178 there would not be any limitation for other applications under the Act.
Further there is nothing to indicate that for the purpose of limitation section 20 of the 1940 Act should be regarded as a re enactment of the corresponding provision of the Code and not of the Indian Arbitration Act, 1899.
[236 D G] In the circumstances it is not possible to construe the implied reference in article 181 to the Code of Civil Procedure as a reference to the or to hold that article 181 applies to applications under that Act.
The rule of construction given in section 8(1)of the cannot be applied, as it appears that the legislature had a 233 different intention.
It follows that an application under sections 8 and 20 of the is not governed by article 181.
The Limitation Act does not prescribe any period of limitation for such an application.
[236 G H] The present application under sections 8 and 20 was therefore not barred by limitation.
[237 A] Bai Manekbai vs Manekji Kavasji, Born.
213, 214 Hansraj Gupta vs Official Liquidator Dehra Dun Mussourie Electric Tramway Company, (1933) L.R. 60 I.A. 13, 20, Shah Mulchand & Co. vs Jawahar Mills Ltd. ; , 371, Bombay Gas Co. vs Gopal Bhiva, ; and Wazirchand Mahajan & Anr.
vs Union of India, ; , referred
|
Civil Appeal No. 142 of 1956.
Appeal by special leave from the judgment and order dated September 13, 1954, of the Labour Appellate Tribunal of India (Calcutta Bench) in Appeal No. Cal 87 of 1953.
H. N. Sanyal, Additional Solicitor General of India, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants.
P. K. Chatterjee, for the respondents.
November 5.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave arises out of an application made by the appellant to the Industrial Tribunal, Bihar under section 33 of the (hereinafter referred to as " 'the Act"), seeking permission to discharge the respondents from its employ.
873 The respondents were in the employ of the appellant and were staying in a two storeyed house in the city of Patna which had been rented by the appellant for housing its workmen.
On November 20, 1952, an occurrence took place in the said house wherein the respondents were involved.
Written reports of the said occurrence were sent on November 21, 1952, to the appellant 's Chief Engineer and the respondents were placed under suspension the same day.
An industrial dispute was then pending between the parties i.e., the appellant and its workmen before the Industrial Tribunal, Bihar, and the appellant therefore made an application to the said Tribunal under section 33 of the Act for permission to dismiss the respondents on the ground of misconduct as per cl.
17(b)(viii) of the appellant 's Standing Orders.
On November 27, 1952, the respondents also made an application before the said Tribunal under section 33A of the Act inter alia on the ground that their suspension by the appellant as aforesaid was a breach of section 33 of the Act.
On December 6, 1952, the appellant made an application before the said Tribunal stating that on a reconsideration of the facts of the case of the respondents the original prayer for permission to dismiss the the respondents was not being pressed, and for the ends of justice it would be sufficient if the appellant was granted permission to discharge the respondents under cl.
14(a) of the Standing Orders instead of the original prayer for dismissal under cl.
17(b)(viii) thereof.
This application was resisted by the respondents.
The Industrial Tribunal, however, entertained the same and after hearing the parties duly made its award on May 14, 1953, dismissing the respondents ' application under section 33A of the Act and granting the appellant permission to discharge the respondents from its employ with effect from the date of the order on payment to the respondents of one month 's pay in lieu of notice within 15 days therefrom.
The respondents carried an appeal against the said order of the Industrial Tribunal granting the appellant 's application under section 33 of the Act before the Labour Appellate Tribunal of India, Calcutta.
A 874 preliminary objection was taken on behalf of the appellant before the Labour Appellate Tribunal that no substantial question of law was involved and as such the appeal was not maintainable.
The Labour Appellate Tribunal was of the opinion that the appellant had alleged misconduct against the respondents and could not be allowed to adopt the expedient of terminating their services by giving notice for the requisite period or payment of salary in lieu of notice and that the Industrial Tribunal, therefore, ought not to have entertained the application for amendment of the prayer of the original application in which the appellant wanted to dismiss the respondents for misconduct.
This according to the Labour Appellate Tribunal was a substantial question of law and it therefore entertained the appeal.
The Labour Appellate Tribunal thereafter considered whether the appel lant had made out a case under cl.
17(b)(viii) of the Standing Orders and came to the conclusion that the respondents had not been guilty of any misconduct within the meaning of that clause and that therefore the order made by the Industrial Tribunal granting permission to the appellant to terminate the services of the respondents was liable to be set aside.
In so far, however, as after obtaining the permission from the Industrial Tribunal the appellant had given notice of discharge to the respondents, the Labour Appellate Tribunal expressed its inability to give the respondents any substantial relief either in the shape of reinstatement or compensation.
The appellant has come up in appeal before us against this order of the Labour Appellate Tribunal.
Shri H. N. Sanyal, appearing for the appellant, has urged in the fore front the contention that no appeal from the order of the Industrial Tribunal lay to the Labour Appellate Tribunal under section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
He contended that the said order was not a "decision" within the meaning of that expression in section 7 and even assuming that it was so, the appeal neither involved any substantial question of law nor was it a decision in respect of any of the matters specified in sub section (1)(b) 875 of that section.
The answer of Shri P. K. Chatterjee on behalf of the respondents was that the action of the appellant in the matter of the termination of the services of the respondents was punitive in character, that the discharge of the respondents for which permission was sought by the appellant was a punitive discharge, that such discharge was by reason of the alleged misconduct of the respondents falling within cl.
17(b)(viii) of the Standing Orders and not within cl.
14(a) thereof and that the substantial question of law which arose in the appeal was whether the appellant could be allowed to adopt the expedient of terminating the services of the respondents, without going through the procedure of submitting a charge sheet to the respondents and holding a proper enquiry in the matter of those charges, by merely giving notice for the requisite period or payment of salary in lieu of notice and thus resorting to el.
14(a) of the Standing Orders instead of cl.
17(b)(viii) of the same.
The other answer made by Shri P. K. Chatterjee was that having regard to the definition of the term "retrenchment" to be found in section 2(oo) of the Act the discharge of the respondents by the appellant really amounted to retrenchment and retrenchment being one of the matters specified in sub section
(1)(b) of section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950, the respondents had a right of appeal to the Labour Appellate Tribunal.
It is necessary, therefore, to appreciate what was sought to be done by the appellant when it made the application before the Industrial Tribunal on December 6, 1952.
This application has been described by the Labour Appellate Tribunal as an application for amendment of the original application which had been filed by the appellant on November 21, 1952, for permission to dismiss the respondents from its employ as per el.
17(b)(viii) of the Standing Orders.
It must be noted, however, that what the appellant purported to do by its application of December 6, 1952, was, in effect, to substitute another application asking for permission to discharge the respondents from its 111 876 employ under el.
14(a) of the Standing Orders, thus abandoning the relief which it had prayed for in the original application.
The application dated December 6, 1952, was thus, in substance, a new application made by the appellant to the Industrial Tribunal, no doubt relying upon the facts and circumstances which were set out in the original application but asking for the permission of the Industrial Tribunal to discharge the respondents from its employ under cl.
14(a) of the Standing Orders instead of dismissing them from its employ under el.
17(b)(viii) thereof.
We do not see how it was not competent to the Industrial Tribunal to allow the appellant to do so.
If the appellant bad been actuated by any oblique motives and wanted to evade the consequences of its not having held a proper enquiry, after submitting a charge sheet to the respondents one could have understood the criticism made by the Labour Appellate Tribunal in regard to the same.
The Industrial Tribunal, however, expressly recorded the finding that the application for leave to discharge the respondents from its employ was bona fide and what the appellant did by making the application dated December 6, 1952, was actuated by an honest motive of exercising its right to discharge the respondents under el.
14(a) of the Standing Orders instead of visiting upon the respondents the penalty of dismissing them from its employ under el.
17(b)(viii) thereof.
The discharge of the respondents was a discharge simpliciter in exercise of the rights of the employer under el.
14(a) of the Standing Orders and was not a punitive discharge under el.
17(b)(viii) thereof and if it was merely a discharge simpliciter, then, no objection could be taken to the same and the appellant would be well within its rights to do so, provided, however, that it was not arbitrary or apricious but was bona fide.
The only question relevant to be considered by the Industrial Tribunal would be that in taking the step which it did the appellant was not guilty of any unfair labour practice or victimization.
If the Industrial Tribunal did not come to a conclusion adverse to the appellant on these counts, it would have no jurisdiction to refuse, 877 'the permission asked for by the appellant.
Once the Industrial Tribunal was of opinion that the application dated December 6, 1952, and the discharge of the respondents for which .
the permission of the Industrial Tribunal was sought were in the honest exercise of the appellant 's rights, no question of law, much less a substantial question of law could arise in the appeal filed by the respondents against the decision of the Industrial Tribunal and the Labour Appellate Tribunal was clearly in error when it entertained the appeal.
In view of the above finding, we do not propose to deal with the contention that the order passed by the Industrial Tribunal under section 33 of the Act is not a "decision" within the meaning of that term in section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
The argument that the discharge of the respondents though patently it was a discharge simpliciter was, in substance, retrenchment within the meaning of the definition contained in section 2(oo) of the Act is equally untenable, for the simple reason that the term "retrenchment" was for the first time defined in the manner in which it has been done by an Ordinance promulgated in October 1953 which was followed by Act 43 of 1953 which was published in the Gazette of India on December 23, 1953.
The Industrial Tribunal made its order granting the permission under section 33 of the Act on May 14, 1953, so that, this definition of the term "retrenchment" could not apply to the facts of the present case.
If, therefore, at the relevant period the discharge simpliciter could not be deemed to be retrenchment of the respondents by the appellant, the decision of the Industrial Tribunal could not be said to be one in respect of any of the matters specified in sub section
(1)(b) of section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950.
In that view also no appeal could lie from the decision of the Industrial Tribunal to the Labour Appellate Tribunal.
It must be observed that neither of these two points was taken by the respondents either in the proceedings before the Industrial Tribunal or the Labour 878 Appellate Tribunal nor was either of them mentioned in the statement of case filed by the respondents in this Court.
They were taken for the first time in the arguments advanced before us by Shri P. K. Chatterjee.
We have, however, dealt with the same because we thought that we should not deprive tile respondents of the benefit of any argument which could possibly be advanced in their favour.
We are, therefore, of opinion that no appeal lay from the decision of the Industrial Tribunal to the Labour Appellate Tribunal, that the Labour Appellate Tribunal had no jurisdiction to interfere with the order made by the Industrial Tribunal granting the appellant permission to discharge the respondents under section 33 of the Act and that the decision of the Labour Appellate Tribunal is liable to be set aside.
We accordingly allow the appeal, set aside the decision of the Labour Appellate Tribunal and restore the order made by the Industrial Tribunal, Bihar, on date May 14, 1953.
The appellant will be entitled to its costs of this appeal from the respondents.
Appeal allowed.
| The petitioner, an advocate, filed the application by way of a public interest litigation alleging that the working of the Judges of the apex Court was cocktail, based on Western Common Law and American techniques; that the Court had become a constitutional liability without having control over the illegal acts of Government, and that the Court was sleeping over the issues.
Dismissing the writ petition, ^ HELD: The petitioner is prima facie guilty of contempt.
The petition is clearly intended to denigrate the Court in.
the esteem of the people of India.
The allegations are clumsy.
It is an intentional attempt at lowering the prestige of the Court as the apex Judicial Institution.
[442G, D; 443A] The Registry to draw up an appropriate proceeding for contempt of court and issue notice to the petitioner.
[443C] The petition is an act against public interest.
The petitioner has certainly overstepped the limit of self restraint so much necessary in such litigation.
The Registry directed not to entertain any public interest litigation application filed by the petitioner in future.
[443E]
|
tition (Criminal) Nos.
271 272 of 1982.
(Under Article 32 of the Constitution of India) Ram Jethmalani and Miss Rani Jethmalani for the Petitioner.
R.K. Garg and A.V. Rangam, for the Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Richard Beale and Paul Duncan Zawadzki, two British nationals, said to be friends and collaborators in smuggling enterprises are now under detention under the provisions of the .
Richard Beale arrived at Madras from Singapore on December 11, 1981.
He brought with him a Mercedez Benz van.
On examination by the customs authorities, the van was found to have secret compartments and hidden cavities.
It was laced and lined, as it were, with all manner of electronic equipment and goods worth several lakhs of rupees.
Richard Beale was interrogated and made a statement.
He was arrested and produced before the learned Metropolitan Magistrate of Madras.
His friend and collaborator Paul Duncan Zawadzki, who had separately arrived in India and who attempted to contact Richard Beale, was also interrogated, later arrested and produced before the Metropolitan Magistrate.
Orders of detention under the COFEPOSA 771 were made against both of them on January 7, 1982 and grounds of detention were duly served on them.
The detenus moved the High Court of Tamil Nadu for their release from detention, but their applications were dismissed.
They have now come to this Court seeking Writs of Habeas Corpus under article 32 of the Constitution.
The two petitions were argued together by Shri Jethmalani and they may be conveniently disposed of by a single order.
The first submission of the learned Counsel was that the representation made by the detenus to the Central Government to revoke the orders of detention so long back as March, 1982 remained undisposed of till this day and on that ground alone, the detenus were entitled to be released.
Shri Jethmalani drew my attention to section 11 of the COFEPOSA which enables the Central Government to revoke or modify an order of detention made by the State Government or its officers and to the decisions of this Court laying down that delay by the Central Government in dealing with representations of the detenu would also entail the detention invalidating itself.
Apart from the fact that there is no proper foundation for the submission, I am not satisfied that there is any merit in the submission.
The Writ Petitions were filed on March 12, 1982 and there was then no hint of this submission.
The counter affidavit on behalf of the State of Tamil Nadu was filed on April 5, 1982.
Thereafter, the clerk of the learned Counsel for the Petitioners has sworn to an affidavit mentioning the facts giving rise to the present submission.
It appears from the affidavit that when the Prime Minister of India was recently in England, a Bout De Papier was presented to the delegation accompanying her, expressing concern about the detention without trial of Richard Beale and Paul Duncan Zawadzki and suggesting that the detention order might be 'lifted ' and the detenus either released or charged and brought to trial without delay.
It further appears that the British High Commission in India also addressed the Ministry of External Affairs, Government of India, and reminded them about the Bout De Papiere presented to the Prime Minister 's delegation in Britain during her visit to that country.
According to Shri Jethmalani, the Bout De Papiere presented to the Prime Minister 's delegation in Britain and the subsequent reminder by the British High Commission constitute a representation to the Central Government demanding their immediate consideration in terms of the provisions of the COFEPOSA.
I have no doubt that the Bout De Papier and the reminder, diplomatic 772 communications that they are between the Governments of the two countries, will be attended to and answered through appropriate diplomatic channels in proper time and with necessary expedition.
But I find it difficult to treat such diplomatic communications between one country and another as representations to the statutory authorities functioning under the COFEPOSA, as representations which require immediate consideration by the statutory authorities and which if not considered immediately, would entitle the detenus to be set at liberty.
Nor is it possible to treat the countless petitions, memorials and representations which are everywhere presented to the Prime Minister and other Ministers as statutory appeals or petitions, statutorily obliging them to consider and dispose of such appeals and petitions in the manner provided by statute.
No doubt the Prime Minister and other Ministers, as leaders in whom the people have reposed faith and confidence, will deal with such appeals and petitions with due and deserved despatch.
But quite obviously that will not be because they are discharging statutory obligations.
It is not also possible to treat representations from whatever source addressed to whomsoever officer of one or other department of the Government as a representation to the Government requiring the appropriate authority under the COFEPOSA to consider the matter.
I do not consider that the Bout de Papiere presented to the Prime Minister during her visit to Britain and the subsequent reminder addressed to the External Affairs Ministry by the British High Commission are representations to the Central Government which are required to be dealt with in the manner provided by the COFEPOSA.
It was next submitted by the learned Counsel that the Chief Minister, who according to the Rules of Business of the Government of Tamil Nadu, was required to deal with matters relating to preventive detention neither applied his mind to the making of the orders of detention, nor considered the representation of the detenus himself.
The relevant files have been produced by the learned Counsel for the State of Tamil Nadu and on perusing them, I find no substance in the submission of the learned Counsel.
The submission which was most strenuously urged by the learned counsel was that the detenus had been denied the right to 773 be represented before the Advisory Board by an Advocate or at least by a friend and that they were thus denied the right to make a proper and effective representation to the Advisory Board.
This was sufficient, said the learned Counsel, to vitiate the detention.
The learned Counsel urged that the detenus were foreign nationals and they were under a handicap being ignorant of the laws and procedures of this country.
To deny legal representation to them was an unreasonable exercise of the discretion vested in the Advisory Board to permit or not to permit legal representation.
According to the learned Counsel, this was a clear case where legal representation should have been permitted.
In any case, it was urged, the detenus ought to have been offered at least 'friendly ' representation, if not legal representation.
Reliance was placed upon the following observations of the Constitution Bench in A.K. Roy vs Union of India : "Another aspect of this matter which needs to be mentioned is that the embargo on the appearance of legal practitioners should not be extended so as to prevent the detenu from being aided or assisted by a friend who, in truth and substance, is not a legal practitioner.
Every person whose interests are adversely affected as a result of the proceedings which have a serious import, is entitled to be heard in those proceedings and be assisted by a friend.
A detenu, taken straight from his cell to the Board 's room, may lack the ease and composure to present his point of view.
He may be "tongue tied, nervous, confused or wanting in intelligence" (see Pett vs Greyhound Racing Association Ltd., , and if justice is to be done, he must at least have the help of a friend who can assist him to give coherence to his stray and wandering ideas.
Incarceration makes a man and his thoughts dishevelled.
Just as a person who is dumb is entitled, as he must, to be represented by a person who has speech, even so, a person who finds himself unable to present his own case is entitled to take the aid and advice of a person who is better situated to appreciate the facts of the case and the language of the law.
It may be that denial of legal representation is not denial of natural justice 774 per se, and, therefore, if a statute excludes that facility expressly, it would not be open to the Tribunal to allow it.
Fairness, as said by Lord Denning M.R., in Maynard vs Osmond , 253, can be obtained without legal representation.
But, it is not fair, and the statute does not exclude that right, that the detenu should not even be allowed to take the aid of a friend.
Whenever demanded, the Advisory Boards must grant that facility.
" In the present case, the Advisory Board consisting of three Judges of the High Court of Tamil Nadu considered it unnecessary and inadvisable to allow legal representation to the detenus.
It was a matter for the decision of the Advisory Board and I do not think I will be justified in substituting my judgment in the place of their judgment.
The detenus were heard personally by the Advisory Board.
After seeing and hearing them personally also, the Board did not feel it necessary to provide legal representation to them which they would certainly have done if they had thought that the detenus appeared to require such representation.
Regarding representation by a friend, there was never any such demand by the detenus.
A 'friendly ' representation would certainly have been provided if it had been so demanded.
It was not for the Advisory Board to offer 'friendly ' representation to the detenus even if the latter did not ask for it.
Relying upon a sentence in the counter Affidavit of Shri Thiru Bhaskaran that representation not only by a lawyer, but by a friend was also considered not necessary by the Advisory Board, it was argued that the Advisory Board had, without warrant, refused even friendly representation.
Shri Thiru Bhaskaran was speaking for the State of Tamil Nadu and not for the Advisory Board.
I have perused the file of the Advisory Board which was produced before me and I have also perused the communications addressed by the Advisory Board to the Government of Tamil Nadu and to the detenus.
I do not find the slightest hint of a demand for 'friendly ' representation or its denial anywhere.
The Advisory Board was neither asked nor did the Board deny any 'friendly ' representation.
A charge was made against the Advisory Board that there was inequality of treatment.
It was said that while the detaining authority was allowed to be represented by its officers and advisers, the detenus were allowed no representation.
There is no substance 775 in this charge.
From the affidavit of the Chairman of the Advisory Board, I find that all that happened was that some customs officers were allowed to be present in the corridor so as to enable them to produce the relevant files whenever required for perusal by the Board.
The charge of inequality of treatment is, therefore, baseless.
Yet another submission of the learned Counsel was that the Advisory Board failed to consider the question whether the detention continued to be justified on the date of the report of the Advisory Board, even if it was justified on the date of the making of the order of detention.
The order of detention was made on 7.1.82 and the consideration by the Advisory Board was on 8.2.82.
The passage of time was not so long nor had any circumstances intervened to justify any compartment wise consideration of the justification for the detention on the date of the making of the order of detention and on the date of the report of the Advisory Board.
In the circumstances of the case, I think that the report of the Advisory Board that there was sufficient cause for the detention of Richard Beale and Paul Duncan Zawadzki necessarily implied that the detention was found by the Board to be justified on the date of its report as also on the date of the making of the order of detention.
A complaint was also made that the Advisory Board carried on its correspondence with the detenus through the Government.
This, it was stated, gave rise to a suspicion that everything was done by the Board at the behest or in consultation with the Government.
This complaint is wholly unjustified.
As already mentioned by me, the Advisory Board consisted of three Judges of the High Court of Tamil Nadu and as explained by the Chairman in his Affidavit, the correspondence etc.
is carried on through the Government because the Board has no separate administrative office of its own.
All the points urged on behalf of the detenus fail and the petitions are, therefore, dismissed.
N.V.K. Petitions dismissed.
| The word 'retrenchment ' as defined in section 2(oo) and the word retrenched ' in section 25F of the , as amended by Act XLIII of 1953, have no wider meaning than the ordinary accepted connotation of those words and mean the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by ' way of disciplinary action, and do not include termination of services of all workmen on a bona fide closure of industry or on change of ownership or management thereof.
Pipraich Sugar Mills Ltd. vs Pipraich Sugar Mills Mazdoor Union , followed.
Burn & Co., Calcutta vs Their Employees ; , referred to.
The provisions of the Act have in view an existing and continuing industry and cls.
(a), (b) and (c) of the definition only exclude certain categories of termination of service from within its ambit but do not indicate what are to be included therein.
The word 'retrenchment ' has acquired no special meaning so as to include a discharge of workmen on a bona fide closure of an industry, as a result of certain Labour Appellate Tribunals awarding compensation to workmen on such closure as an equitable relief for a variety of reasons.
The intention of the legislature in enacting section 25F of the Act appears to have been to simplify and standardise the payment of compensation for retrenchment, as ordinarily understood, on the basis of the length of service of the retrenched workman.
The Hyderabad Vegetable Oil Products Ltd. vs Their Workers , Employees of Messrs. India Reconstruction Corporation and Kandan Textiles Ltd. vs Their Workers , considered.
Section 25FF, which was inserted into the Act by the amending Act of 1956, is not retrospective and does not apply to the instant 16 122 cases, and the object the legislature had in view in enacting the same was to partially nullify the effect of certain judicial decisions relating to the effect of a change of ownership or management and it was not intended to be a parliamentary exposition of the pre existing law.
The language of item Io of the third and fourth schedules, engrafted into the Act by section 29 Of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, indicates that the legislature envisaged a distinction between retrenchment and closure and the former does not include the latter.
Although on such construction, section 25F applies only to an existing industry and section 25FF becomes largely redundant, no question of any hardship arises as the judicial decisions on the basis of which section 25FF was enacted were themselves incorrect and must be overruled.
In construing a parliamentary statute the time when and the circumstances in which it was enacted may be taken into consideration and the general principle of parliamentary exposition or subsequent legislation as an aid to construction of prior legislation, can have no application where the subsequent statute itself was based on incorrect assumptions and judicial decisions based on such assumptions.
Great Northern Railway vs United States of America, 315 U.S. 262 and Ormond Investment Co. Limited vs Betts [1928] A.C. 143, referred to.
If the other conditions of the definition clause are fulfilled, the transfer of ownership or management of an industry and its closure stand on the same footing so far as the definition clause is concerned, notwithstanding that there is a distinction in fact between the two; there is, however, no retrenchment within the meaning of the definition clause unless there is a discharge of surplus labour or staff by the employer in a continuing industry, for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action.
Consequently, in the instant cases, where in one the services of all the workmen were terminated by the employer on a real and bona fide closure of the industry and in the other on a change of ownership, such termination did not amount to retrenchment within the meaning Of section 2(00) or section 25F of the Act and the appellants were not bound to pay any compensation under cl.
(b) Of section 25F of the Act.
|
ivil Appeal No. 1135 of 1981.
From the Judgment and Order dated 15.12.1980 of the Allahabad High Court in Civil Writ Petition No. 1096 of 1974.
R.N. Trivedi, R. Ramachandran and Ms. Sadhna Ramachan dran (N.P.) for the Appellant.
Anil Deo Singh, Gopal Subramanium, Ms. section Dikshit, S.S. Hussain, S.A. Syed, R.S.M. Verma and Shakil Ahmed Syed for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Karamat Husain Muslim Girls College, Luc know (hereinafter called the 'College ') is being managed by Anjuman Muslimat e Hind which is a society registered under the .
The avowed object of the society is to advance the cause of education among the women of India.
The College has been recognised by the State of Uttar Pradesh as a religious 701 minority institution within the meaning of Article 30(1) of the Constitution of India and is an affiliated associate of Lucknow University.
The post of lady Principal in the degree section of the college was advertised on April 5, 1974 indicating the following qualifications/ requirements: (1) First or good second class Masters Degree in any of the subject taught in the institution; (2) At least five years experience of teaching degree classes as also administrative experience; (3) Must possess working knowledge of Urdu; (4) Willing to reside in the college premises.
In response to the advertisement the appellant along with others applied for the post.
The appellant did not fulfil the qualification of five years experience.
She alone appeared for the interview and the Selection Committee relaxed the qualification of experience in her favour and selected her.
The Management thereafter sought the approval of the University to appoint the appellant as required under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 (hereinafter called the 'Act ').
The University, howev er, declined to approve and directed the management to re advertise the post.
The appellant challenged the decision of the University by way of a writ petition under Article 226 of the Constitution of India before the Lucknow Bench of the Allahabad High Court on the ground that the college being a minority institution any interference by the University under the Act is violative of Article 30(1) of the Constitu tion.
It was also contended that there was no basis or justification to withhold the approval.
The High Court rejected the attack on the ground of Article 30 of the Constitution of India by holding that the provisions of the Act are regulatory and are primarily for the purpose of maintaining uniformity, efficiency and stand ards of education in the minority institutions.
On the merits the High Court held that the Selection Committee was not justified in relaxing the qualification without reserv ing that fight to itself in the advertisement.
The High Court also found that the qualification "possessing working knowledge of Urdu" was unjust On the above findings the writ petition was dismissed.
This 702 is how the appellant is before us via Article 136 of the Constitution of India.
The High Court has tightly held the relaxation granted by the Selection Committee to be arbitrary.
In the absence of statutory rules providing power of relaxation, the adver tisement must indicate that the Selection Committee/Appoint ing Authority has the power to relax the qualifications.
Regarding "Working knowledge of Urdu" we do not agree with the High Court that the said qualification is unjust.
The college being a Muslim minority institution prescribing the said qualification for the post of Principal, is in conform ity with the object of establishing the institution.
In the view which we are taking in this case it is not necessary to go into the argument based on Article 30(1) of the Constitution of India.
We heard the arguments in this case on February 23, 1990 and adjourned the case with the following order: "It is admitted by the parties that as a result of the Court orders the appellant Ms. Shainda Hasan is continuing to work as Principal in the Karamat Husain Muslim Girls College, Lucknow since 1974.
Having served the institution for over 16 years it would be unjust to make her leave the post.
Under the circumstances let the University reconsider the whole matter sympathetically.
" The case was taken up in Chambers on April 20, 1990 when Mrs. Shobha Dixit learned counsel for the State after ob taining instructions from the University agreed with us that asking the appellant to leave the job after sixteen years would be doing injustice to her.
Keeping in view the facts and circumstances of the case and in the interest of justice we direct the Lucknow Univer sity and its Vice Chancellor to grant the necessary approval to the appointment of the appellant as Principal of Karamat Husain MusIim Girls College, Lucknow, with effect from the date she is holding the said post.
We further direct that the appellant shall be entitled to the salary,allowances and all other consequential benefits to which a regular princi pal of the said college would have been and is entitled.
We dispose of the appeal with the above directions.
There shall be no order as to costs.
T.N.A. Appeal dis missed.
| The respondent college, a religions minority institu tion, invited application for the post of Principal from candidates possessing First or Second class Master 's Degree, five years teaching experience and possession of working knowledge of Urdu.
The Selection Committee selected the appellant by relaxing the qualification of experience in her favour but the University declined its approval to the appointment under Section 31(11) of the Uttar Pradesh State Universities Act, 1973 and directed the Management Committee to readvertise the post.
The appellant challenged the University 's decision before the High Court contending that the college being a minority institution any interference by the University under the Act was violative of Article 30(1) of the Consti tution and that there was no justification to withhold the approval.
The High Court rejected the attack on the ground of Article 30 by holding that the provisions of the Act were regulatory but held that the Selection Committee was not justified in relaxing the qualification and that the quali fication 'possessing working knowledge of Urdu ' was unjust.
Hence this appeal by special leave.
700 Dismissing the appeal, this Court, HELD: 1.
In the absence of statutory rules providing power of relaxation, the advertisement must indicate that the Selection Committee/Appointing Authority has the power to relax the qualifications.
The High Court has rightly held the relaxation granted by the Selection Committee to be arbitrary.
[702B] 2.
The college being a Muslim minority institution, the prescribing of the qualification of possession working knowledge of Urdu for the post of Principal, is in.
conform ity with the object of establishing the institution.
The said qualification is not unjust.
[702B] [In the interest of justice and in view of the facts and circumstances of the case, the Lucknow University and its Vice Chancellor are directed to grant the necessary approval to the appointment of the appellant to the post of Principal of College, which the appellant is holding as a result of the Court orders, with effect from the date she is holding the said post, and the appellant shah be entitled to salary, allowances and all other consequential benefits to which a regular Principal of the said college would have been enti tled.] [702G]
|
minal Appeal No. 162 of 1965.
Appeal by special leave from the judgment and order dated January 8, 1965 of the Gujarat High Court in Criminal Appeal No. 345 of 1964.
Urmila Kapur and section P. Nayar, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Hidayatullah C.J.
This is an appeal by special leave against the judgment and order of a learned Single Judge of the High 448 Court of Gujarat, January 8, 1965, by which an order confiscating 1500 and odd bottles said to contain intoxicating liquor by the City Magistrate, 8th Court, Ahmedabad, has been set aside.
The facts of the case are as follows.
On January 9, 1963, Sub Inspector, Benot of Ahmedabad City raided a godown con sisting of two rooms in Serial No. 151010 and Survey No. 324/0.
He found several deal boxes which were opened and each box was found to contain 144 bottles packed with grass, each bottle containing 4 oz. of some liquid.
Bottles were of two kinds, one containing yellow liquid and the other a red liquid.
The bottles containing Yellow liquid were labeled 'U. D. Colon Solvek Cosmetics Bombay, 28. , and the bottles containing red liquid were labeled 'Jasmine Batch No. 3.
Solvek Cosmetics Bombay.
From these bottles, two bottles, one of each kind, were selected and were sent to the Chemical Examiner.
Baroda for test.
Before sending them, the Panchas were allowed to seal the bottles with paper slips containing the signature of panchas pasted on them for identification.
On analysis, they were found to contain alcohol and the respondent Chinubhai Gopaldas was prosecuted under section 66(b) of the Bombay Prohibition Act.
The other bottles numbering 1584 containing 6336 oz. of alleged alcohol were kept intact.
Gopal Das 's prosecution failed.
He was, acquitted by the City Magistrate, because according to him, it was not proved beyond reasonable doubt that he was in possession of these bottles on his own.
It was found 'that he possessed them as agents of a wholesale merchant.
It is in evidence however that he did not possess a permit or licence for possessing alcohol.
The Magistrate while acquitting him ordered the confiscation of the remaining bottles under section 98 of the Prohibition Act.
The State Government did not appeal against the acquittal.
Gopaldas went to the High Court 'in appeal against the order of confiscation.
The learned Single Judge of the High Court ordered return of the bottles, because according to him it was not proved that the 1500 and odd other bottles also contained intoxicants.
He therefore held that the confiscation of the bottles was illegal as no order under section 98 of the Bombay Prohibition Act could be passed.
In this appeal by the State of Gujarat it is contended that section 98 applies to the case.
That section reads as follows : "Whenever any offence punishable under this Act has been committed, (a) any intoxicant, hemp, shora, flowers, molasses, materials.
still, utensil, implement or 449 apparatus in respect of which the offence has been committed, shall be confiscated by the order of the Court.
" The short question therefore is whether it can be said that in respect of the 1500 and odd bottles, an offence punishable under the Prohibition Act had been committed.
It is no doubt true that the person who was charged with committing an offence was found not guilty, but the question is not whether the accused has been successfully brought to book, but whether the offence in respect of the property has been committed or not.
There is distinction between the two.
An offence may be demonstrated to be committed although the accused who committed it may not be successfully prosecuted.
We may give an example.
Suppose in a house a vast quantity of contraband opium is found.
The householder may get off because the opium was found from a place which was open and had access to strangers.
He may get the benefit of doubt and be acquitted, but it is clear that in so far as the opium is concerned, an offence must be deemed to have been committed, and if it is proved that , the contraband article was opium, it would be remarkable that the order should be that the opium be returned to the householder.
In these circumstances, on proof that the contraband article in respect of which an offence has been committed is proved to exist, the obvious course would be to confiscate it to the State.
In the present case, the two bottles which were sent to the Chemical Examiner were said to contain alcohol although there was some doubt in the mind of the Magistrate as to whether there was no chance of any malpractice.
Be that as it may, there are the other bottles intact.
There is some evidence to show that they were in the original packing and were a proprietary product.
The manufacturer came as a witness and deposed that the liquids were bottled by him as a proprietary manufacture.
In these circumstances, it would be fair to assume that all of them were of the same kind as the ones which were sent for chemical examination.
However an examination of random samples can be made and if they satisfy the court that the bottles contain contraband articles the bottles can be confiscated.
The order of the High Court is thus set aside, but instead of restoring the order of confiscation we order that a few bottles at random should be, analysed and if contraband stuff against the Prohibition Act is found the whole stock shall be confiscated.
The appeal is allowed and the case is remanded as ordered.
G.C. Appeal allowed.
| A stock of bottles apparently containing cosmetic preparations was found from the possession of the respondent.
On analysis the bottles which were taken as samples were found to contain alcohol and as the respondent did not have any licence for possessing alcohol he was Pro secuted under section 66(b) of the Bombay Prohibition Act.
The trying Magistrate acquitted him.
on the ground that he did not hold the bottles on his own but only as the agent of a wholesale dealer who acknowledged his ownership.
While acquitting the respondent the Magistrate ordered the confiscation of the remaining bottles under section 98 of the Prohibition Act.
The respondent went to the High Court against the order of confiscation.
The learned Single Judge ordered return of the bottles because according to him it was not proved that the 1500 and odd other bottles also con tained intoxicants, and therefore the order under section 98 of the Act was illegal.
The State appealed, HELD : Under section 98 what has to be seen is whether an offence under the Prohibition Act in respect of the property in question has been committed or not.
An offence may be demonstrated to be committed although the accused who committed it may not be successfully prosecuted.
On proof that there is a contraband article in respect of which an offence has been committed the obvious course is to confiscate, it to the State.
Therefore in the present case if the court was satisfied that the bottles contained contraband article the bottles could be confiscated.[449C E] [Order of the High Court set aside with the direction that a few bottles at random should be analysed and if contraband stuff against the prohibition act was found the whole stock should be confiscated.]
|
N: Criminal Appeal No. 249 of 1976.
Appeal by Special leave from the Judgment and order dated the 10th July, 1975 of the Allahabad High Court in Criminal Misc.
No 1104 of 1975.
Prithvi Raj and Dalveer Bhandari for the Appellant.
N.M. Ghatate for the Respondents.
The Judgment of the Court was delivered by DESAI, J.
: Respondents Lakshmi Brahman and Naval Garg were suspected of having committed an offence punishable with death or imprisonment for life under section 302 IPC.
Both of them surrendered before the Magistrate on November 2, 1974 and were taken into custody.
The investigation was then in progress.
The investigating officer failed to submit the charge sheet against 540 them within a period of 60 days as contemplated by sub sec 2 of sec.
167 of 1973 Code prior to its amendment by the Criminal Procedure Code (Amendment) Act, 1978 which enlarges the period from 60 to 90 days where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than 10 years.
In this case we are concerned with the proviso to sec.
167 (2) of the Cr. P. C. 1973 prior to its amendment in 1978.
It appears that the Investigating officer failed to submit the charge sheet within the prescribed period and according to the High Court till as late as February 5, 1975.
Thereupon the two respondents moved an application under sec.
439 of the Cr. P. C. invoking the power of the High Court to grant bail to any person accused of an offence, even where the offence is punishable with death or imprisonment for life.
A Division Bench of the Allahabad High Court which heard the application was of the opinion that after the charge sheet has been submitted under sec.
170 Cr. P. C., the Magistrate has no jurisdiction to authorise the detention of an accused in custody under sec.
167 Cr. P. C., and therefore, the authority to remand the accused to custody after the charge sheet has been submitted, has to be gathered from other provisions of the Code.
The High Court then posed to itself the question whether in a case instituted upon a police report exclusively triable by the Court of Sessions, the Magistrate while committing the accused to the Court of Sessions, under sec.
209 Cr. P. C. has, after the accused is brought before him and before the order committing the accused to the Court of Sessions is made, jurisdiction to remand the accused to custody other than the police custody ? The High Court was of opinion that since after the enactment of Code of Criminal Procedure, 1973, the proceeding before the Magistrate under Chapter XVI of the Code would not be an enquiry within the meaning of the expression in sec.
2 (g) and, therefore, sec.209 would not confer power on the Magistrate to commit the accused to custody.
Proceeding along the line, the High Court held that in view of the provision contained in sec.
207 read with sec.
209 of the Cr. P. C. the Magistrate has to commit the accused forthwith to the Court of Sessions and only after the order of commitment is made, the Magistrate will have power to remand accused to the custody during and until the conclusion of the trial.
Tho High Court according held that the Magistrate has no 541 jurisdiction, power or authority to remand the accused to custody after the charge sheet is submitted and before the commitment order is made, and therefore the accused were entitled to be released on bail.
So saying, the High Court directed that the respondents be released on bail pending the trial by the Court of Sessions.
State of U.P. has preferred this appeal by special leave.
Respondents have not appeared even though served and the notice of lodgment of appeal has also been served upon them.
As the respondents had not entered appearance, a fresh notice of hearing the appeal was also issued, but the respondents have not chosen to appear at the hearing of the appeal.
Mr. Prithviraj, learned counsel appeared for the appellant, State of U.P.
At the commencement of the hearing of the appeal, we enquired from him as to what has happened to the case against the respondents, whether the trial had taken place; whether they were acquitted or convicted and whether any useful purpose would be served by hearing of the appeal which appears to us to have become practically infructuous.
Mr. Prithviraj had no information about the stage of trial and the present position of the respondents.
But it was urged that the interpretation put by the High Court on secs.
207, 209 and 309 if not examined by this Court is likely to result in miscarriage of justice in a large number of cases as the High Court has introduced a stage of compulsory grant of bail to persons accused of serious offence not warranted by the Code, and who would not be otherwise entitled to the discretionary relief of bail.
It is this submission which has persuaded us to examine the contention on merits.
Section 2(g) of the Code defines inquiry to mean every inquiry, other than a trial, conducted under the Code by a Magistrate or Court.
Cognizable offence has been defined in sec, 2(c) to mean an offence for which, a police officer may, in accordance with the First Schedule or under any other law for the time in force, arrest without warrant.
57 provides that no police officer shall detain in custody a person arrested without warrant for a longer period than under all the circumstances of the case is reasonable and such period shall not, in the absence of a special order of a Magistrate under Sec. 167, exceed twenty four hours, exclusive of the time necessary for the journey from the place of arrest to the Magistrate 's Court.
In fact, the provision contained in sec, 57 incorporates the fundamental right guaranteed by article 22 of the 542 Constitution.
Chapter XII of the Code incorporates provisions for initiation of investigation on receipt of information of a cognizable offence continuing the investigation culminating in the submission of a police report otherwise styled as charge sheet under sec.
170 to the Magistrate having jurisdiction, which would imply the end of investigation.
Subsequent proceeding before the Magistrate would be the commencement of inquiry or trial leading to either commitment for trial in the Session Court or to discharge or acquittal of the accused by the Court having jurisdiction to try the case.
167 finds its place in Chapter XII.
Prior to its amendment by the amending Act of 1978, it read as under: "(1) Whenever any person is arrested and detained in custody, and it appears that the investigation cannot be completed within the period of twenty four hours fixed by sec.
57, and there are grounds for believing that the accusation or information is well founded, the officer in charge of the police station or the police officer making the investigation, if he is not below the rank of sub inspector, shall forthwith transmit to the nearest Judicial Magistrate a copy of the entries in the diary hereinafter prescribed relating to the case, and shall at the same time forward the accused to such Magistrate.
(2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to Magistrate having such jurisdiction: Provided that: (a) the Magistrate may authorise detention of the accused person, otherwise than in custody of the police, beyond the period of fifteen days if he is satisfied, that adequate grounds exist for doing so, but, no Magistrate shall authorise the detention of the accused person in custody under this section for a total period exceeding sixty days, and on the 543 expiry of the said period of sixty days, the accused person shall be released on bail; and every person released on bail under this section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of the Chapter; (b) no Magistrate shall authorise detention in any custody under this section unless the accused is produced before him; (c) no Magistrate of the second class, not specially empowered in this behalf by the High Court, shall authorise detention in the custody of the police.
" In this appeal, we are concerned with sec.
167 hereinabove extracted.
The High Court after examining the scheme of sec.
167(1) and (2) with the Proviso rightly concluded that, on the expiry of 60 days from the date of the arrest of the accused, his further detention does not become ipso facto illegal or void, but if the charge sheet is not submitted within the period of 60 days, then notwithstanding to the contrary in sec.
437(1), the accused would be entitled to an order for being released on bail if he is prepared to and does furnish bail.
In this case, it is an admitted position that the respondents did not apply to the Magistrate for being released on bail on the expiry of 60 days from the date of their arrest.
The High Court was of the opinion that as the respondents did not apply for bail on the expiry of sixty days from the date of their arrest, their continued detention would not be illegal or without the authority of law.
So far there is no controversy.
It was next contended before the High Court that after the submission of the charge sheet, when the investigation could be said to have ended, it was not open to the Magistrate to authorise the detention of an accused in custody under sec.
167 of the Code, and therefore, if the accused is to be detained in custody after the submission of the charge sheet upon which the Magistrate takes cognizance of an offence, the power to remand the accused to custody will have to be gathered from other provisions of the Code.
The High Court then took notice of the fact that the police report discloses an offence exclusively triable by the Court of Sessions and the Magistrate will have to proceed according to the provision contained in sec.
209 of the Code.
Shorn of embellishment the High Court proceeded to find out how the accused against whom the allegation is that he is 544 suspected of having committed an offence punishable with death or imprisonment for life and in respect of whom the period for completion of investigation has elapsed and in the absence of charge sheet, order committing him to Court of Sessions to stand his trial cannot be made and the accused does not apply for bail, how is he to be dealt with by the Magistrate.
In other words during the interregnum, has the Magistrate power or jurisdiction to remand him to custody other than police custody and if there is such power, in which provision it is located.
The High Court then combed other provisions of the Code, and, ultimately, concluded that since the 1973 Code does not envisage a preliminary enquiry to be held by the Magistrate under Chapter XVI, the Magistrate is not expected to hold any enquiry before committing the accused and therefore sec.
309, would not enable him to remand the accused to custody.
In the terms High Court held that in such a situation for want of power in the Magistrate to remand accused to custody, the Magistrate must forthwith on receipt of charge sheet pass an order committing the accused to Court of Sessions to stand his trial and then exercise power under sec.
309 or to release him on bail notwithstanding the fact that accused has not sought an order of bail.
The High Court left the question unanswered what would happen if the accused is unable to furnish bail by suggesting that the best thing to do for the Magistrate in such a situation is to forthwith pass an order committing the accused to Sessions to stand his trail and then invoke his jurisdiction to remand the accused to custody under sec.
309 of the Code.
The High Court held that as the Magistrate before whom the charge sheet was submitted remanded the respondents to custody without making the order of commitment, the order remanding the accused to custody, cannot be sustained under secs.
167 (2), 209, 309 of the Code, and no other provision under which the respondents could be remanded to the custody at that stage having been indicated to the Court, the High Court considered it a compelling necessity to accede to the request of the respondents to direct that they should be released on bail.
Serious exception is taken to this view of the High Court by the learned counsel for the appellant.
Respondents were suspected of having committed an offence punishable under sec.
302 IPC.
On their having surrendered, they were taken into custody.
When the matter was before the High Court as noticed by the High Court, the charge sheet was not submitted against them by the Investigating Officer meaning thereby that 545 investigation was still in progress.
The High Court proceeded to examine the powers of the Magistrate to whom the charge sheet is submitted, in case of an offence exclusively triable by the Court of Sessions for dealing with an accused after he is produced before him presumably under sec.
170 and before an order committing the accused to the Court of Sessions as envisaged under sec.
209 is made.
If the High Court had no information when the application for bail moved by respondents for being enlarged on bail was heard as to whether the charge sheet against respondents was submitted to the Magistrate or not, in our opinion, it was futile for the High Court to undertake investigation of a point of law which would not directly arise in the facts before the High Court and ordinarily the academic exercise is hardly undertaken.
However, now as the High Court has dealt with the matter it becomes a precedent and, therefore, it becomes necessary for us to examine whether the view of the High Court is in consonance with the provision of the Code.
And if not whether in the larger interest of criminal justice, it is necessary to interfere with the same.
We would proceed on the assumption as done by the High Court that the Investigating Officer has submitted the police report as contemplated by sec. 170 and as required therein forwarded the accused under custody to the Magistrate to whom the police report is submitted.
Now, the High Court is right in holding that the jurisdiction to grant bail, in case investigation is not completed within the prescribed time limit as incorporated in the provision as it then stood, vests in the Magistrate if the accused applies and is prepared to furnish bail.
Section 167 envisages a stage when a suspect is arrested and the investigation is not completed within the prescribed period.
The investigation would come to an end the moment charge sheet is submitted as required under sec.
170 unless the Magistrate directs further investigation.
This view is in accord with the decision of this Court in State of Bihar Anr.
vs I.A.C. Saldanha & Ors.
(1) The question is how the Magistrate is to deal with the accused forwarded to him with the police report under sec.
170 and the police report disclose an offence exclusively triable by the Court of Sessions.
Provisions contained in Chapter XVI provide for commencement of proceedings before the Magistrate.
But before we refer to 546 those provisions, w must make a passing reference to the provision contained in sec.
190 which provides for taking cognizance of any offence by Magistrate, one such mode of taking cognizance of an offence being upon police report if the facts disclose an offence.
The police report contemplated by sec.
190(1)(b) is the one submitted to the Magistrate under sec.
provides for issue of process.
207 provides that in any case where the proceeding has been instituted on a police report, the Magistrate shall without delay furnish to the accused, free of costs, a copy of each of the documents set out therein.
There are two provisos to this section which are not material for the present purpose.
209 confers power on the Magistrate to commit the accused to the Court of Sessions when the offence disclosed in the police report is triable exclusively by it.
Section 209 reads as under: "209.
Commitment of case to Court of Sessions when offence is triable exclusively by it; When in a case instituted on a police report or otherwise the accused appears or is brought before the Magistrate and it appears to the Magistrate that the offence is triable exclusively by the Court of Session, he shall (a) commit the case to Court of Sessions; (b) subject to the provisions of this Code, relating to bail, remand the accused to custody during, and until the conclusion of the trial;. " The High Court was of the opinion that on the submission of the police report under sec.
170, the Magistrate has to forthwith commit the accused to the Court of Sessions if the offence disclosed in the charge sheet is the one exclusively triable by the Court of Sessions.
This being the only function of the Magistrate according to the High Court, the proceeding before the Magistrate under sec.
207 read with sec.
209 would not be an inquiry within the meaning of the expression in sec.
2(g) of the Code.
In reaching this conclusion, the High Court referred to secs.
84, 116, 125, 137, 138, 145 and 146 as well as secs.
159 and 202 of the Code to ascertain the meaning of expression 'inquiry ' in the context in which it is used in these provisions.
These provisions would hardly shed any light on the nature of the proceedings and the function discharged by the Magistrate from the time of receipt of a police report 547 under sec.
170 disclosing an offence exclusively triable by the Court of Sessions and until making of an order committing the accused to the Court of Sessions to stand his trial.
The question posed is: is it an administrative function or it is a judicial function ? It is certainly not an administration function.
If it is judicial function, it has to be either an inquiry or a trial because the Code does not envisage discharge of judicial function by the Magistrate under the Code in any other manner.
The High Court in this context has observed as under: "These sections (207 209) do not contemplate that before committing the case to Sessions, the Magistrate should conduct some proceeding with a view to ascertain or verify facts.
209 of the Code merely required the Magistrate, taking cognizance of an offence on the basis of a police report, to look into the report and if he finds that the case is triable exclusively by Court of Sessions to make an order committing the case to Sessions.
Since in such a case the Magistrate taking cognizance of the offence is not required to conduct any proceeding for ascertaining or verifying facts with a view to commit the case to Sessions, it cannot be said that the provisions contained in secs.
204, 207 to 209 of the Code contemplate an inquiry under the Code.
" With respect this approach is not only not borne out by the relevant provisions of the Code but it overlooks the scheme of the sections and the purpose underlying the same.
Section 170 obligates the Investigating Officer to submit the police report if in the course of investigation sufficient evidence or reasonable ground is made out for the trial or for commitment of the accused, to the Magistrate empowered to take cognizance of the offence upon a police report.
On this report being submitted the Magistrate takes cognizance of the offence disclosed in investigation as envisaged by sec. 190.
It is indisputable that taking cognizance of an offence under sec.
190 is a purely judicial function subject to judicial review by court of appeal or revision to which the Magistrate is subject.
Cognizance of an offence even if exclusively triable by the Court of Sessions has to be taken by the Magistrate because section 193 precludes it from taking cognizance 548 of any offence when it provides that no Court of Sessions shall take cognizance of any offence as a court of original jurisdiction unless the accused has been committed by the Magistrate under the Code.
Thus even in case of an offence exclusively triable by the Court of Sessions, the police report on completion of investigation has to be submitted to the Magistrate having jurisdiction to commit the accused for trial.
It is the Magistrate who takes cognizance of the offence and not the Court of Sessions though the case is one exclusively triable by the latter.
Sec. 170 directs that if the accused in respect of whom police report is being submitted is in police custody, he has to be forwarded alongwith the police report to the Magistrate.
When the Magistrate receives the report and the accused is produced before him it is necessary for him to pass some order for his further detention subject to provisions contained in Chapter XXXIII as to Bails and Bonds.
The view taken by the High Court makes it a necessity for the Magistrate to release the accused on bail even if the accused is not otherwise entitled to the discretionary order of bail nor he applies for nor is ready to furnish bail only because the Magistrate has no jurisdiction to keep the accused in custody till an order committing the accused for trial is made.
The High Court referred to sec.
209 which provides that the Magistrate shall commit the accused to Court of Sessions and subject to the provisions of the Code relating to bail, remand the accused to custody during and until the conclusion of the trial.
This according to the High Court implies that the Magistrate can exercise power to release on bail or remand to the custody the accused only after making the order of commitment but the Magistrate has no such power anterior to the order of commitment and during the interregnum since the receipt of the charge sheet.
This dichotomy read by the High Court in secs.
207 and 209 is certainly not borne out by the provisions of the Code.
Sec. 207 as it then stood made it obligatory for the Magistrate to supply free of costs, copies of the documents set out in the section.
The duty cast on the Magistrate by sec.
207 had to be performed in a judicial manner.
To comply with sec.
207 which is cast in a mandatory language, when the accused is produced before the Magistrate, he has to enquire from the accused by recording his statement whether the copies of the various documents set out in sec.
207 have been supplied to him or not.
No order committing the accused to the Court of Sessions can be made under sec.
209 unless the Magistrate fully complies with the provisions of sec.
And if it is shown that the copies of relevant documents or some 549 of them are not supplied, the matter will have to be adjourned to get the copies prepared and supplied to the accused.
This is implicit in section 207 and sec.
209 provides that on being satisfied that the requisite copies have been supplied to the accused, the Magistrate may proceed to commit the accused to the Court of Sessions to stand his trial.
The statutory obligation imposed by sec.
207 read with sec.
209 on the Magistrate to furnish free of costs copies of documents is a judicial obligation.
It is not an administrative function.
It is a judicial function which is to be discharged in a judicial manner.
It is distinctly possible that the copies may not be ready.
That makes it necessary to adjourn the matter for some time which nay be spent in preparing the copies and supplying the same to the accused.
The Magistrate can proceed to commit the accused for trial to the Court of Sessions only after he judicially discharges the function imposed upon him by sec.
This conclusion is fortified by the provisions contained in Chapter XVIII which prescribed the procedure for trial of a case by Court of Sessions.
Sec. 226 provides for opening the case for the prosecution.
227 confers power on the Court of Sessions to discharge the accused if upon consideration of the record of the case and the documents submitted therewith, the Judge considers that there is no sufficient ground for proceeding against the accused.
No duty is cast on the Court of Sessions to enquire before proceeding to hear the case of the prosecution under sec.
226 to ascertain whether the copies of the documents have been furnished to the accused because section 207 casts the obligation upon the Magistrate to perform the judicial function.
Now, if under sec.
207, the Magistrate is performing a judicial function of ascertaining whether copies have been supplied or not, it would undoubtedly be an inquiry for the purpose of satisfying himself that sec.
207 has been complied with in letter and spirit.
That satisfaction has to be judicial satisfaction.
It is not a trial but something other than a trial and being judicial function it would necessarily be an inquiry.
The making of an order committing the accused to the Court of Sessions will equally be a stage in the inquiry and the inquiry culminates in making the order of commitment.
Thus, from the time the accused appears or is produced before the Magistrate with the police report under sec.
170 and the Magistrate proceeds to enquire whether sec.
207 has been complied with and then proceeds to commit the accused to the Court of Sessions, the proceeding before the Magistrate would be an inquiry as contemplated by sec.
2(g) of the Code.
We find it difficult 550 to agree with the High Court that the function discharged by the Magistrate under sec.
207 is something other than a judicial function and while discharging the function the Magistrate is not holding an inquiry as contemplated by the Code.
If the Magistrate is holding the inquiry obviously sec.
309 would enable the Magistrate to remand the accused to the custody till the inquiry to be made is complete.
Sub sec.
2 of sec.
309 provides that if the Court, after taking cognizance of an offence or commencement of trial, finds it necessary or advisable to postpone the commencement or adjourn any inquiry or trial, it may, from time to time, for reasons to be recorded, postpone or adjourn the same on such terms as it thinks fit, for such time as it considers reasonable, and may by a warrant remand the accused if in custody.
There are three provisos to sub sec. 2 which are not material.
If, therefore, the proceedings before the Magistrate since the submission of the police report under sec.
170 and till the order of commitment is made under sec.
209 would be an inquiry and if it is an inquiry, during the period, the inquiry is completed, sec.
309(2) would enable the Magistrate to remand the accused to the custody.
Therefore with respect, the High Court committed an error in holding "that the order remanding the respondents to custody, made after cognizance of offence was taken cannot be justified under section 167(2), 209 and 309 of the Code and no other provision under which the respondents can be remanded to custody at this stage, has been indicated by the learned Government Advocate, we feel that it would be proper to accede to the request made by the respondents and to direct that they would be released on bail after furnishing adequate security to the satisfaction of the Chief Judicial Magistrate, Banda.
" The view taken by the High Court introduces a stage of compulsory bail not envisaged by the Code, and therefore, also the view of the High Court cannot be upheld.
According to the High Court after the accused is brought before the court alongwith the police report, the Magistrate must forthwith commit the accused to the Court of Sessions because the Magistrate would have no jurisdiction in the absence of any provision to remand the accused to custody till the order committing the case to Court of Sessions is made.
The view with respect is wholly untenable and must be set aside.
Mr. Prithviraj, learned counsel, drew our attention to the decision of this Court in Gauri Shanker Jha vs The State of Bihar 551 and Ors '(1) This case is of no assistance because it dealt with the situation under the Code of Criminal Procedure, 1898 which did require the Magistrate to be satisfied with prima facie case before an order committing an accused to the Court of Sessions could be made.
In view of the discussion, this appeal is allowed and the order of the High Court granting bail to the respondents on the short ground that they could not be remanded to the custody before the order committing them to the Court of Sessions is made, is set aside, However, if in the meantime, the trial is over, no question of taking the respondents into custody pursuant to the order would arise.
H.L.C. Appeal allowed.
| The appellants, who were serving in the office of the Chief Engineer Nagarjuna Unit as officiating Upper Division Clerks, were transferred to the office of Deputy Chief Accounts officer,.
N.S. Project by an order dated February 8, 1964.
Respondents 2 to 108 were initially recruited as Lower Division Clerks during the period 1959 65 and some of them were promoted as Upper Division Clerks from 1961 onwards.
After their transfer, their services were regularised by the Chief Engineer, as per his proceedings dated August 11, 3 1968.
This was challenged by some of the persons similarly situated like the present respondent and the High Court dismissed the Writ Petition as well as the writ appeal, holding that the transfer was on administrative grounds and therefore their length of service in the parent department had to be taken into account for the purpose of determining their seniority.
By its order G.O.M.S. 27 P.W.D. dated February 3,1972, the State Government accorded sanction to the permanent retention of the posts set out in the order with effect from 1 4.1967 in the office of the Deputy Chief Accounts officer.
Among other, 38 posts of the Upper Division Clerks were thus made permanent by this order with a further provision that the posts so made permanent shall be filled in by personnel already working in the Accounts organisation.
The appellants, whose services were already regularised were now made permanent by the Deputy Chief Accounts officer.
Feeling aggrieved by the said orders the respondents filed a writ petition before the High Court of Andhra Pradesh which was transferred to the A.P. Administrative Tribunal.
The Tribunal allowing the petition held that the Deputy Chief Accounts officer had not the powers of the Head of a Department and was, therefore, not competent to absorb and retain the appellants in his office and confirm them against the posts made permanent.
Hence the appeal by special leave.
405 Allowing the appeal, tho Court ^ HELD: 1:1.
The Deputy Chief Accounts officer DOW redesignated as Director of Accounts is the Head of Department for the purpose of Rule 3(2) of Service Rules and, therefore, the confirmation of the appellants against the permanent posts of Upper Division Clerk is in order.
[411 E, 415 A B] 1:2.
The Deputy Chief Accounts officer is shown to be directly working 8 under a secretariat department without intervention of any higher office.
When the office of the Financial Adviser and Chief Accounts officer under whom the Dy.
C.A.O. was directly working, was declared in 1966 as Secretariat department, the Dy.
C.A.O. was invested with power of appointing authority which comprehended the power to appoint persons who would be eligible for pay scales applicable to the staff in the offices of the Heads of Department.
The unofficial note dated June 11, 1969 of the F.A. and C.A.O. makes the position clear.
[412 G; 413 A B] 1:3.
Even without reference to Rule 3(2), tho appellants could be absorbed, in tho instant case.
Appellants were transferred to tho office of Dy.
C.A.O. in 1964.
Their regularisation was held as valid and regular by an earlier decision of the A.P. High Court They having rendered service for eleven long years in the Accounts organisation before the impugned action was taken, they were entitled to be absorbed in the department by virtue of tho proviso in G.O.M.S. 27 dated 3rd February 1972.
[415 D,E,F H, 416 A] 2.1 The inter se seniority of the appellants and the respondents would be governed by the first proviso to Rule 36(e) and not by the second proviso thereto.
This position not only stands concluded by tho earlier decision of the A.P. High Court but also by the very orders of transfer.
[417 A B] 2:2.
The transfers were on administrative grounds and certainly not at the request of the appellant.
Further tho transferred personnel could not have been considered as on deputation because if a Government servant is sent outside his office on deputation, there are certain benefits to which be would be entitled which in this case are not shown to have been made available to the appellants.
[412 A B]
|
N: Criminal Appeal No. 158 of 1972.
Appeal by special leave from the Judgment and order dated the 12th November, 1971 of the Gujarat High Court at Ahmedabad in Criminal Appeal No. 219 of 1970.
H.S. Patel, S.S. Khanduja and Lalita Kohli, for the appellant.
section K. Zauri, Amaresh Kumar and M. V. Goswami, for the respondents 1 2.
H. R. Khanna and M. N. Shroff, for respondent No. 3.
The Judgment of the Court was delivered by CHANDRACHUD, J.
This is an appeal by special leave from the judgment of the Gujarat High Court convicting the appellant under section 36 read with section 8 of the Gujarat Agricultural Produce Markets Act, 20 of 1964 (referred to herein as "the Act"), and sentencing him to pay a fine of Rs. 10/ .
The judgment of conviction was recorded by the High Court in an appeal from an order of acquittal passed by the learned Judicial Magistrate, First Class, Godhra.
An Inspector of Godhra Agricultural Produce Market Committee filed a complaint against the appellant charging him with having purchased a certain quantity of ginger in January and February, 1969 without obtaining a licence as required by the Act.
The learned Magistrate accepted the factum of purchase but he acquitted the appellant on the ground that the relevant notification in regard to the inclusion of ginger was not shown to have been promulgated and published as required by the Act.
The case was tried by the learned Magistrate by the application of procedure appointed for summary trials.
That circumstance together with the token sentence of fine imposed by the High Court gives to the case a petty appearance.
But occasionally, matters apparently petty seem on closer thought to contain points of importance though, regretfully, such importance comes to be realized by stages as the matter travels slowly from one court to another.
As before the Magistrate so in the High Court, the matter failed to receive due attention: a fundamental premise on which the judgment of the High Court is based contains an assumption contrary to the record.
Evidently, the attention of the High Court was not drawn either to the error of that assumption or to some of the more important aspects of the case which the parties have now perceived.
It is necessary, in order to understand the controversy, to notice some of the relevant statutory provisions.
In the erstwhile composite State of Bombay there was in operation an Act called the Bombay Agricultural Produce Markets Act, 22 of 1939.
On the bifurcation of that State on May 1, 1960 the new State of Gujarat was formed.
The Bombay Act of 1939 was extended by 454 an appropriate order to the State of Gujarat by the Government of that State.
That Act remained in operation in Gujarat till September 1, 1964 on which date the Gujarat Agricultural Produce Markets Act, 20 of 1964, came into force.
The Act was passed "to consolidate and amend the law relating to the regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Gujarat".
Section 4 of the Act empowers the State Government to appoint an officer to be the Director of Agricultural Marketing and Rural Finance.
Sections 5, 6(1) and 6(5) of the Act read thus: "5.
Declaration of intention of regulating purchase and sale of agricultural produce in specified area. (1) The Director may, by notification in the Official Gazette, declare his intention of regulating the purchase and sale of such agricultural produce and in such area, as may be specified therein.
Such notification shall also be published in Gujarati in a newspaper having circulation in the area and in such other manner as may be prescribed.
(2) Such notification shall state that any objection or suggestion received by the Director within the period specified in the notification which shall not be less than one month from the date of the publication of the notification, shall be considered by the Director.
(3) The Director shall also send a copy of the notification to each of the local authorities functioning in the area specified in the notification with a request to submit its objections and suggestions if any, in writing to the Director within the period specified in the notification.
Declaration of market areas. (1) After the expiry of the period specified in the notification issued under section 5 (hereinafter referred to in this section as 'the said notification '), and after considering the objections and suggestions received before its expiry and holding such inquiry as may be necessary, the Director may, by notification in the Official Gazette, declare the area specified in the said notification or any portion thereof to be a market area for the purposes of this Act in respect of all or any of the kinds of agricultural produce specified in the said notification.
A notification under this section shall also be published in Gujarati in a newspaper having circulation in the said area and in such other manner, as may be prescribed.
(5) After declaring in the manner specified in section 5 his intention of so doing, and following the procedure there in, the Director may, at any time by notification in the Official Gazette.
exclude any area from a market area specified in a notification issued under sub section (1), or include any area therein and exclude from or add to the kinds of agricultural produce so specified any kind of agricultural produce.
" 455 By section 8, no person can operate in the market area or any part thereof except under and in accordance with the conditions of a licence granted under the Act.
Section 36 of the Act provides, to the extent material, that whoever without holding a licence uses any place in a market area for the purchase or sale of any agricultural produce and thereby contravenes section 8 shall on conviction be punished with the sentence mentioned therein.
Rule 3 of the Gujarat Agricultural Produce Markets Rules, 1965 provides that a notification under section 5 (1) or section 6(1) shall also be published by affixing a copy thereof at some conspicuous place in the office of each of the local authorities functioning in the area specified in the notification.
The simple question, though important, is whether the notification issued under section 6(5) of the Act, covering additional varieties of agricultural produce like ginger and onion, must not only be published in the official gazette but must also be published in Gujarati in a newspaper.
The concluding sentence of section 6(1) says that a notification under "this section" "shall also be published in Gujarati in a newspaper" having circulation in the particular area.
The argument of the appellant is twofold: Firstly, that "this section" means this subsection so that the procedure in regard to publication which is laid down in subsection (1) of section 6 must be restricted to notifications issued under that subsection and cannot be extended to those issued under subsection (5) of section 6; and secondly, assuming that the words "this section" are wide enough to cover every sub section of section 6 the word "shall" ought to be read as "may".
First, as to the meaning of the provision contained in section 6 (1) of the Act.
It means what it says.
That is the normal rule of construction of statutes, a rule not certainly absolute and unqualified, but the conditions which bring into play the exceptions to that rule do not exist here.
Far from it; because, the scheme of the Act and the purpose of the particular provision in section 6(1) underline the need to give to the provision its plain, natural meaning.
It is not reasonable to assume in the legislature an ignorance of the distinction between a "section" of the statute and the "subsections" of that section.
Therefore, the requirement laid down by section 6(1) that a notification under "this section" shall also be published in Gujarati in a newspaper would govern any and every notification issued under any part of section 6, that is to say, under any of the sub sections of section 6.
If this requirement was to govern notifications issued under sub section (1) of section 6 only.
the legislature would have said so.
But the little complexity that there is in this matter arises out of a known phenomenon, judicially noticed but otherwise disputed, that sometimes the legislature does not say what it means.
That has given rise to a series of technical rules of interpretation devised or designed to unravel the mind of the law makers.
If the words used in a statute are ambiguous, it is said, consider the object of the statute, have regard to the purpose for which the particular provision is put on the statute book 456 and then decide what interpretation best carries out that object and purpose.
The words of the concluding portion of section 6(1) are plain and unambiguous rendering superfluous the aid of artificial guide lines to interpretation.
But the matter does not rest there.
The appellant has made an alternative argument that the requirement regarding the publication in Gujarati in a newspaper is directory and not mandatory, despite the use of the word "shall".
That word, according to the appellant, really means "may".
Maxwell, Crawford and Craies abound in illustrations where the words "shall" and "may" are treated as interchangeable, "Shall be liable to pay interest" does not mean "must be made liable to pay interest", and "may not drive on the wrong side of the road" must mean "shall not drive on the wrong side of the road".
But the problem which the use of the language of command poses is: Does the legislature intend that its command shall at all events be performed ? Or is it enough to comply with the command in substance ? In other words, the question is : is the provision mandatory or directory ? Plainly, "shall" must normally be construed to mean "shall" and not "may", for the distinction between the two is fundamental.
Granting the application of mind, there is little or no chance that one who intends to leave a lee way will use the language of command in the performance of an act.
But since, even lesser directions are occasionally clothed in words of authority, it becomes necessary to delve deeper and ascertain the true meaning lying behind mere words.
Crawford on 'Statutory Construction ' (Ed. 1940, article 261, p. 516) sets out the following passage from an American case approvingly: "The question as to whether a statute is mandatory or directory depends upon the intent of the legislature and not upon the language in which the intent is clothed.
The meaning and intention of the legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other.
" Thus, the governing factor is the meaning and intent of the legislature, which should be gathered not merely from the words used by the legislature but from a variety of other circumstances and considerations.
In other words, the use of the word 'shall ' or 'may ' is not conclusive on the question whether the particular requirement of law is mandatory or directory.
But the circumstance that the legislature has used a language of compulsive force is always of great relevance and in the absence of anything contrary in the context indicating that a permissive interpretation is permissible, the statute ought to be construed as pre emptory.
One of the fundamental rules of interpretation is that if the words of a statute are themselves precise and unambiguous, no more is necessary than to expound those words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature(1).
Section 6(1) of the Act provides in terms, plain and precise that a notification issued under the section "shall also" be published in Gujarati in a newspaper.
The word 'also ' provides an 457 important clue to the intention of the legislature because having provided that the notification shall be published in the Official Gazette, section 6(1) goes on to say that the notification shall also be published in Gujarati in a newspaper.
The additional mode of publication prescribed by law must, in the absence of anything to the contrary appearing from the context of the provision or its object, be assumed to have a meaning and a purpose.
In Khub Chand vs State of Rajasthan, it was observed that "the term 'shall ' in its ordinary significance is mandatory and the court shall ordinarily give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or be at variance with the intent of the Legislature, to be collected from other parts of the Act.
The construction of the said expression depends on the provisions of a particular Act, the setting in which the expression appears, the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations".
The same principle was expressed thus in Haridwar Singh vs Begum Sumbrui.
"Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule is mandatory or directory.
No universal rule can be laid down on this matter.
In each case one must look to the subject matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured.
" Recently in the Presidential Election Case(3), the learned Chief Justice speaking on behalf of a seven Judge Bench observed: "In determining the question whether a provision is mandatory or directory, the subject matter, the importance of the provision, the relation of that provision to the general object intended to be secured by the Act will decide whether the provision is directory or mandatory.
It is the duty of the courts to get at the real intention of the legislature by carefully attending to the whole scope of the provision to be construed. 'The Key to the opening of every law is the reason and spirit of the law, it is the animus imponentis, the intention of the law maker expressed in the law itself, taken as a whole '.
" The scheme of the Act is like this: Under section 5(1) the Director of Marketing and Rural Finance may by a notification in the Official Gazette declare his intention of regulating purchase and sale of agricultural produce in the specified area.
Such notification is also required to be published in Gujarati in a newspaper having circulation in the particular area.
By the notification, the Director under section 5(2) has to invite objections and suggestions and the notification has to be stated that any such objections or suggestions received by the Director within the specified period, which shall not be less than one month from the date of the publication of the notification, shall be considered by the Director.
After the expiry of the aforesaid period the Director, under section 6(1), has the power to declare an area as the market area in respect of the particular kinds of agricultural produce.
This power is not absolute because by the terms of section 6(1) it can only be exercised after considering the objections and suggestions received by the Director within the stipulated period.
The notification under section 6(1) is also required to be published in Gujarati in a newspaper.
The 458 power conferred by section 5(1) or 6(1) is not exhausted by the issuance of the initial notification covering a particular area or relating to a particular agricultural produce.
An area initially included in the market area may later be excluded, a new area may be added and likewise an agricultural produce included in the notification may be excluded or a new variety of agricultural produce may be added.
This is a salutary power because experience gained by working the Act may show the necessity for amending the notification issued under section 6(1).
This power is conferred by section 6(5).
By section 6(5), if the Director intends to add or exclude an area or an agricultural produce, he is to declare his intention of doing so in the manner specified in section 5 and after following the procedure prescribed therein.
Thus, an amendment to the section 6(1) notification in regard to matters described therein is equated with a fresh declaration of intention in regard to those matters, rendering it obligatory to follow afresh the whole of the procedure prescribed by section 5.
That is to say, if the Director intends to add or exclude an area or an agricultural produce, he must declare his intention by notification in the Official Gazette and such notification must also be published in Gujarati in a newspaper.
Secondly, the Director must invite objections or suggestions by such notification and the notification must state that any objections or suggestions received within the stipulated time shall be considered by him.
The Director must also comply with the requirement of sub section (5) of section 3 by sending a copy of the notification to each of the local authorities functioning in the particular area with a request that they may submit their objections and suggestions within the specified period.
After the expiry of the period aforesaid and after considering the objections or suggestions received within that period, the Director may declare that the particular area or agricultural produce be added or excluded to or from the previous notification.
This declaration has to be by a notification in the Official Gazette and the notification has to be published in Gujarati in a newspaper having circulation in the particular area.
The last of these obligations arises out of the mandate contained in the concluding sentence of section 6(1).
The object of these requirements is quite clear.
The fresh notification can be issued only after considering the objections and suggestions which the Director receives within the specified time.
In fact, the initial notification has to state expressly that the Director shall consider the objections and suggestions received by him within the stated period.
Publication of the notification in the Official Gazette was evidently thought by the legislature not an adequate means of communicating the Director 's intention to those who would be vitally affected by the proposed declaration and who would therefore be interested in offering their objections and suggestions.
It is a matter of common knowledge that publication in a newspaper attracts greater public attention than publication in the Official Gazette.
That is why the legislature has taken care to direct that the notification shall also be published in Gujarati in a newspaper.
A violation of this requirement is likely to affect valuable rights of traders and agriculturists because in the absence of proper and adequate publicity, their right of trade and business shall have been hampered without affording to them an opportunity to offer objections and suggestions, an opportunity which the statute clearly deems so 459 desirable.
By section 6(2), once an area is declared to be a market area, no place in the said area can be used for the purchase or sale of any agricultural produce specified in the notification except in accordance with the provisions of the Act.
By section 8 no person can operate in the market area or any part thereof except under and in accordance with the conditions of a licence granted under the Act.
A violation of these provisions attracts penal consequences under section 36 of the Act.
It is therefore vital from the point of view of the citizens ' right to carry on trade or business, no less than for the consideration that violation of the Act leads to penal consequences, that the notification must receive due publicity.
As the statute itself has devised an adequate means of such publicity, there is no reason to permit a departure from that mode.
There is something in the very nature of the duty imposed by sections 5 and 6, something in the very object for which that duty is cast, that the duty must be performed.
"Some Rules", as said in Thakur Pratap Singh vs Sri Krishna, "are vital and go to the root of the matter: they cannot be broken".
The words of the statute here must therefore be followed punctiliously.
The legislative history of the Act reinforces this conclusion.
As stated before, the Bombay Agricultural Produce Markets Act, 1939 was in force in Gujarat till September 1, 1964 on which date the present Act replaced it.
Section 3(1) of the Bombay Act corresponding to section 5(1) of the Act provided that the notification `may ' also be published in the regional languages of the area.
Section 4(1) of the Bombay Act which corresponds to section 6(1) of the Act provided that "A notification under this section may also be published in the regional languages of the area in a newspaper circulated in the said area".
Section 4(4) of the Bombay Act corresponding to section 6(5) of the Act provided that exclusion or inclusion of an area of an agricultural produce may be made by the Commissioner by notification in the Official Gazette, "subject to the provisions of section 3".
Section 4(4) did not provide in terms as section 6(5) does, that the procedure prescribed in regard to the original notification shall be followed if an area or an agricultural produce is to be excluded or included.
The Gujarat legislature, having before it the model of the Bombay Act, made a conscious departure from it by providing for the publication of the notification in a newspaper and by substituting the word `shall ' for the word `may '.
These are significant modifications in the statute which was in force in Gujarat for over 4 years from the date of reorganisation till September 1, 1964.
These modifications bespeak the mind of the legislature that what was optional must be made obligatory.
We are therefore of the opinion that the notification issued under section 6(5) of the Act, like that under section 6(1), must also be published in Gujarati in a newspaper having circulation in the particular area.
This requirement is mandatory and must be fulfilled.
Admittedly the notification (exhibit 10) issued under section 6(5) on February 16, 1968 was not published in a newspaper at all, much less in Gujarati, Accordingly, the inclusion of new varieties of agricultural produce in that notification lacks legal validity and no prosecution can be founded upon its breach.
460 Rule 3 of the Gujarat Agricultural Produce Markets Rules, 1965 relates specifically and exclusively to notifications "issued under subsection (1) of section 5 or under sub section (1) of section 6.
" As we are concerned with a notification issued under sub section (5) of section 6, we need not go into the question whether Rule 3 is complied with.
We may however indicate that the authorities concerned must comply with Rule 3 also in regard to notifications issued under sections 5(1) and 6(1) of the Act.
After all, the rule is calculated to cause no inconvenience to the authorities charged with the duty of administering the Act.
It only requires publication by affixing a copy of the notification at some conspicuous place in the office of each of the local authorities functioning in the area specified in the notification.
The prosecution was conducted before the learned Magistrate in an indifferent manner.
That is not surprising because the beneficent purpose of summary trials is almost always defeated by a summary approach.
Bhailalbhai Chaturbhai Patel, an Inspector in the Godhra Agricultural Produce Market Committee, who was a material witness for proving the offence, said in his evidence that he did not know whether or not the notifications were published in any newspaper or on the notice board of the Godhra Municipality.
The learned Magistrate acquitted the appellant holding that the prosecution had failed to prove beyond a reasonable doubt that the notifications were published and promulgated as required by law.
In appeal, the High Court of Gujarat began the operative part of its judgment with a wrong assumption that exhibit 9 dated April 19, 1962 was a "notification constituting the Godhra Market area." In fact exhibit 9 was issued under section 4 A(3) of the Bombay Act as amended by Gujarat Act XXXI of 1961 declaring certain areas as "market proper" within the Godhra Market area.
The High Court was really concerned with the notification, exhibit 10, dated February 16, 1968 which was issued under section 6(5) of the Act and by which new varieties of agricultural produce like onion, ginger, sunhemp and jowar were added to the old list.
The High Court set aside the acquittal by following the judgment dated February 12, 1971 rendered by A. D. Desai, J. in Cr.
Appeal 695 of 1969.
That judgment has no application because it arose out of the Bombay Act and the question before Desai, J. was whether section 4(1) of the Bombay Act was mandatory or directory.
That section, as noticed earlier, provided that the notification "may" also be published in the regional language of the area in a newspaper circulated in that area.
The High Court, in the instant case, was concerned with section 6(5) of the Act which has made a conscious departure from the Bombay Act in important respect.
The High Court did not even refer to the provisions of the Act and it is doubtful whether those provisions were at all brought to its notice.
Everyone concerned assumed that the matter was concluded by the earlier judgment of Desai, J.
For these reasons we set aside the judgment of the High Court and restore that of the learned Judicial Magistrate, First Class, Godhra.
Fine, if paid, shall be refunded to the appellant.
P.H.P. Appeal allowed.
| Section 2(15) of the Income tax Act provides that 'charitable purpose ' includes relief of the poor, education medical relief.
and the advancement of any other object of general public utility.
The appellant is a sole trustee of the "Loka Shikshana Trust", holding properties mentioned in a schedule attached to a deed of trust executed on 19 2 1962 by himself purporting to re declare a trust of 15 7 1935.
The total assets of the earlier trust of 1935 consisted of a sum of Rs. 4308.109 only.
Under the provisions the earlier trust of the trustee had carried on a lucrative business of printing at Belgaum, and, thereafter, he started publishing a daily newspaper.
The value of the redeclared trust of 1962 stood at Rs. 2,97,658/ .
Clause 2 of the trust deed provided that the object of the Trust shall be to educate the people of India in general and of Karnatak in particular by (a) establishing conducting and helping directly or indirectly institutions calculated to educate the people by spread of knowledge on all matters of general interest and welfare; (b) founding and running reading rooms and libraries and keeping and conducting printing houses and publishing or aiding the publication of books, booklets, leaflets, pamphlets, magazines etc,, in Kannada and other languages, all these activities being started, conducted and carried on with the object of educating the people; (c) supplying the Kannada speaking people with an organ or organs of educated public opinion and conducting journals in Kannada and other language for the dissemination of useful news and information and for the ventilation of public opinion on matters of general public utility; and (d) helping directly or indirectly societies and institutions which have all or any of the aforesaid objects in view.
The Income tax officer sent a communication to the trust on April 27, 1963 to the effect that, since the only activity of the trust was printing, publication, and sale of newspaper.
weekly and monthly journal, the trust carried on an activity for profit.
The claim of the sole trustee was rejected, and, having been unsuccessful through out the appellant has preferred this appeal after certification of the case under section 261 of the Income tax Act, 1961.
Dismissing the appeal, ^ HELD: (Per H. R. Khanna and A. C. Gupta, JJ.) (1) It is not correct to say that the word "profit" in section 2(15) of the Act means private profit.
The word used in the definition provision is profit and not private profit and it would not be permissible to read in the definition the word 462 "private" as qualifying profit even though such word is not there.
There is also no apparent justification or cogent reason for placing much a construction on the word "profit".
[472B] The words "general public utility" contained in the definition of charitable purpose are very wide.
These words exclude objects of private gain [472C] All India Spinners ' Association vs Commissioner of Income tax, , relied on.
It is also not correct to say that the newly added words "not involving the carrying on of any activity for profit" merely qualify and affirm what was the position as it obtained under the definition in the Act of 1922.
If the legislature intended that the concept of charitable purpose should be the same under the Act of 1961 as it was in the Act of 1922, there was no necessity for it to add the new words in the definition.
The earlier definition did not involve any ambiguity.
and the position in law was clear and admitted of no doubt after the pronoumcement of the Judicial Committee in the Tribune case and in the case of All India Spinners ' Association.
If despite that fact, the legislature added new words in the definition of charitable purpose, it would be contrary to all rules of construction to ignore the impact or the newly added words and to so construe the definition as it the newly added words were either not there or were intended to be otiose and redundant.
[47CC E] (ii) The sense in which the word "education" has been used in section 2(15) is the systematic instruction, schooling, or training given to the young in preparation for the work of life.
It also connotes the whole course of scholastic instruction which a person has received.
The word "education" has, not been used in that wide and extended sense according to which every acquisition of further knowledge constitutes education.
According to this wide and extended sense, travelling is education, because as a result of travelling you acquire fresh knowledge.
Likewise, if you read newspapers and magazines, see pictures, visit art galleries, museums and zoos, you thereby add to your knowledge.
Again, when your grow up and have dealings with other people, some of whom are not straight, you learn by experience and thus add to your knowledge of the ways of the world.
If you are not careful, your wallet is liable to be stolen or you are liable to be cheated by some unscrupulous is liable to be stolen or you are liable to be cheated by some unscrupulous person.
The thief who removes your wallet and the swindler who cheats you teach you a lesson and in the process make you wiser though poorer.
If you visit a night club, you get acquainted wit and add to your knowledge about some to the not much revealed realities and mysteries of life.
All this in a way is education in the great school of life.
But, that is not the sense in which the word "education" is used in clause (15) of section 2.
What education connotes in that clause is the process of training and developing the knowledge, skill mind, and character of students by formal schooling.
[469C F] (iii) The fact that the appellant trust is engaged in the business of printing and publication of newspaper and journals and the further fact that the afore said activity vields or is one likely to yield profit and there are no restrictions on the appellant trust earning profits in the course of its business would go to show that the purpose of the appellant trust does not satisfy the requirement that it should be one "not involving the carrying on of any activity for profit." [471C D] In re The Trustees of the 'Tribune , State of Gujarat vs M/s Raipur Mfg. Co., [1967] 1 S.C.R. 618, and Commissioner of Income tax vs Lahore Electric Supply Co. Ltd., , referred to.
(i) It has been declared repeatedly by the Courts, even before the addition of the words "not involving the carrying on of any activity for profit" to the definition of "charitab1e purpose".
that activities motivated by private profit making fell outside the concept of charity altogether.
It is more reasonable to infer that the words used clearly imposed a new qualification on public utilities entitled to exemption.
It was obvious that, unless such a limitation was introduced, the fourth and last category would become too wide to prevent 463 its abuse.
Wide words so used could have been limited in Scope by judicial interpretations ejusdem generis so as to confine the last category to objects similar to those in the previous categories and also subject to a dominant concept of charity which must govern all the four categories.
But, the declaration of law by the Privy Council, in the Tribune case had barred this method of limiting an obviously wide category of profitable activities of general public utility found entitled to exemption.
Hence, the only other way of cutting down the wide sweep of objects of "general public utility" entitled to exemption was by legislation.
This, therefore, was the method Parliament adopted as is clear from the speech of the Finance Minister who introduced the amendment in Parliament.
[482F H] Income Tax Commissioners vs Pemsel, ; , 583; Morice vs Bishop of Durham, ; All India Spinners ' Association vs Commissioner of Income Tax, Bombay, 1944(12) ITR 482, 486; commissioner of Income Tax, Madras vs Andhra Chamber of Commerce, 1965(55) I.T.R. 722, 732; In re Grove Gredy , 582; Cape Brandy Syndicate vs I.R.C. , 71; Rt.
Hon 'ble Jerald Lord Strickland vs Carmelo Mifud Bonnici, A.I.R. 1935 P.C. 34; The Englishman Ltd. vs Engineering Mazdoor Sang & Anr., A.I.R. 1975 S.C. p. 946 @ 949; Commissioner of Income tax Gujarat vs Vadilal Lallubhai, 1972 (86) I.T.R. p. 2; Commissioner of Income tax vs Sadora Devi, 1957 (32) I.T.R. 615 @ 627 [1958] 1 I.S.C. 1 and In re the Tribune, , referred to.
(ii) If the profits must necessarily feed a charitable purpose, under the terms of the trust, the mere fact that the activities of the trust yield profit will not alter the charitable character of the trust.
The test is the genuineness of the purpose tested by the obligation created to spend the money exclusively or essentially on "charity".
If that obligation is there, the income becomes entitled to exemption.
That is the most reliable test.
The governing idea of charity must qualify purpose of every category enumerated in section 2(15) of the Act of 1961.
[483 C D] (iii) Although the term 'education ', as used in section 2(15) of the Act, seems wider and more comprehensive than education through educational institutions, such as Universities, whose income is given an exemption from income tax separately under section 10(22) of the Act, provided the educational institution concerned does not exist "for purposes of profit", yet the educational effects of a newspaper or publishing business are only indirect, problematical and quite incidental so that, without imposing any condition or qualification upon the nature of information to be disseminated or material to be published, the mere publication of news or views cannot be said to serve a purely or even predeminantly educational purpose in its ordinary and usual sense.
Judging from the facts set out in the trust deed itself, the sole trustee had managed to make the satisfaction of the needs mentioned in clause 2(c) a highly profitable business.
The deed puts no condition upon the conduct of the newspaper and publishing business from which one could infer that is was to be on "no profit and no loss" basis.
The High Court was right in coming to the conclusion that the appellant is not entitled to claim exemption from income tax.
[485 E G, 486 D] East India Industries (Madras) Pvt. Ltd. vs Commissioner of Income tax Madras, ; Commissioner of Income tax, Madras vs Andhra Chamber of Commerce, ; Md. Ibrahim Riza vs Commissioner of Income tax, Nagpur, (1930) L.R. I.A. 260 and Commissioner of Income tax, West Bengla II vs Indian Chamber of Commerce, ARGUMENTS For the appellant (1) The objects clause of the Trust is so worded as to make it clear that the whole and sole object of the Trust is education of the people of India 464 in general and of Karnatak in particular by the four means or modes set out h in that clause.
Those four means or modes are not separate objects of the Trust but are merely the instrumentalities prescribed by the Settlor for achieving the specified object of education.
Even assuming for the purpose of argument that sub clauses (a) to (d) of clause 4 of the Trust Deed are separate and distinct objects of the Trust, clause (c) which covers a newspaper or a journal is itself an object falling within the category of "education".
(2) The words added in the 1961 Act "not involving the carrying on of any activity for profit" go only with the last head viz "any other object of general public utility" and not with the first three heads.
This is put beyond doubt by the comma which appears after each of the first three heads, there being no comma after the fourth head.
(3) The present case falls within the second head of "charitable purpose", viz. education.
The ruling of the Privy Council in the Tribune case does not apply to the facts of the present case.
(4) Assuming that the case does not fall within the category of "education" it falls within the last head "any other object of general public utility, and the qualifying words "not involving the carrying on of any activity for profit" are satisfied.
First the word "profit" means private gain, and the qualifying words merely say expressly what was implicit in the 1922 Act at 423, and at 488).
Even assuming the word "profit" covers profit for the Trust, involving no private gain, the qualifying words are still satisfied.
They require that the object of the Trust should not involve, i.e. entail that the trustees should carry on the activity for profit.
No such condition about making profit is imposed by the trust deed.
That profit may result from the activities of the Trust in a particular year is wholly irrelevant.
Profit making is not the motive of the Trust.
(5) Provisions of section ll of the Act clearly reveal that it is implicit in the very scheme of the Act that a business undertaking can be held in trust for an object of general public utility.
For the respondent (i) The decision of the Privy Council in the Tribune case squarely applies to the facts of the present case; (ii) For ascertaining that true meaning of the expression "not involving the carrying on of an activity for profit" it was not only permissible but only proper for the Courts to refer to parliamentary debates and other proceedings of the legislature.
(iii) Where a business undertaking is held as property of the Trust and income resulting therefrom is wholly applied for charitable purposes such as education, medical relief of the poor, or for any other object of general public utility but with which object the production or income is not linked it would be still exempt.
But if that income is utilised only for the purposes of advancing the very object from the advancement of which it is derived it would cease to be exempt.
The means and processes adopted by the Trustee for the advancement of the object were such as rendered the object itself as non charitable.
(iv) The expression "activity for profit" was much wider in cope than merely a business activity.
The legislature had intentionally used the expression "activity" instead of business because in some cases the income produced from the activity may not be legally assessable under the provisions of the Income tax Act, 1961 under the head "Income, profits and gains of business" (Section 28).
The expression 'activity for profit" in the context meant activity for profit making; (v) Since the advancement of education was being achieved by means involving the carrying on of an activity for profit, the Trust would still be denied exemption.
In other words, the qualifying words added to the definition at the end did not govern merely the last category of charity i.e. the object of general public utility but equally governed the earlier three well known categories namely medical relief, relief of the poor, and education.
The effect of the qualifying words "not involving the carrying on an activity for profit" was to deny exemption to trusts which carried on a profit making activity for advancing the object of general public utility.
|
ition No. 350 of 1980.
(Under Article 32 of the Constitution) M. M. Abdul Khoder, V. M. Tarkunde and EMS Enam for the.
Petitioner.
V. J. Francis for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
The lament of the petitioner, Gopalanachari, a septuagenarian languishing in a Kerala prison, is that in his case the law has become lawless and justice has fallen as the first casualty, a lot shared by several other prison mates.
He wrote a letter dated nil to one of us (Krishna Iyer, J) complaining of illegal detention under section 110 Criminal Procedure Code (for short, the Code) where upon the jurisdiction of this Court was invoked and the following order was made: Shri M. M. Abdul Kader Senior Advocate with Mr. E. M. Sardul Enarn, Advocate on Record will be appointed as amicus curiae for the petitioner.
Issue Show Cause Notice to the respondent state with a direction that the State shall furnish the total number of prisoners in the Sub Jail Kottayam, who are now kept in custody under section 110 Cr. P. C. and give further particulars as to how long they have been in prison on this score and whether the hearing of the cases under section 110 Cr. P. C. is over.
The Superintendent of the Jail will further furnish the number of prisoners in prison who are above seventy years old and below 25 years.
Copy of the Notice will be served on advocate amicus curiae as well as on Shri V. J. Francis, Advocate for the State.
order will also be issued to the Superintendent of the Jail apart from the State.
Post the matter on 2nd April, 1980.
1273 Even here we may state that Shri M. M. AbdulKader, Senior Advocate assisted by Shri E. M. Sadrul Enam, Advocate on Record, has rendered help as amicus curiae and enabled the court to set human rights in perspective in a section 110 situation.
Shri Tarkunde also, as intervener, has helped the court which, incidentally strengthens the current of participative justice since leading members of the bar and public organisations in the field taking part in the court process in the shape of assistance in the cause of justice lends reality to the democracy of judicial remedies.
The State, in response to the notice, put in a statement that in the Sub Jail at Kottayam there are as many as six prisoners detained under section 110 cf the Code.
Apparently, they have been suffering incarceration for several months, the petitioner himself having been in Jail iron 23 2 1980.
It is added by the Superintendent, Sub Jail that the petitioner "is well known habitual prisoner of the Kerala State. he is known as 'Kallan Gopalan ' " i.e., thief Gopalan.
In pathetic contrast to this stigmatising generalisation that the petitioner is a well known 'habitual ' we find the averment in the petition of the detainee that he has been falsely implicated without any regard for human rights.
His averments which have not been specifically contested may well be extracted: The case charged against me by the Kottayam Arpukkara .
Police in the Ettumanur Court is on night patrol, found hiding in the varanda of a shop, on asking the name and address: answered the name as Shankunni of Pala; on again questioning answered as Krishnan Kutty of Pankunnari.
and again on questioning, arrested on doubt as a "K. D." on the Pathanam Thitta Police Station and on enquiry it is found that the person is an ex criminal and not to be free; and for that, to obtain bail for two years, this is the charge against the person, submitted by the Police before the court.
I am 71 years old.
My native place is Pathanamthitta of Kottayam District.
While I was living in my house having loss of eyesight and hearing power due to old age, a Police man known to me earlier, saw me on a road near my house, saying that he has to enquire something, taken me in a van to Arpukkara Police Station, after putting me in the lock up for ten days produced me before the Court after making the record as having arrested me on the previous night of producing me before the Court.
But, it is such a position that if the bail alongwith the Bond as aforesaid is not furnished for a period of two years, I have to be inside the Jail for the said period.
1274 I submit before your Honour that I have much pain and agony that without considering that I am 71 years old and have difficulties due to that, and without seeing or giving remedy keeping me in the jail on such a fabricated case.
There is no indication even in the statement put in by the Superintendent that there has been any conviction by a criminal courts as yet.
The cases are pending, apparently without any sense of urgency and oblivious to the fact that for several months the petitioner has been deprived of his personal liberty even at the advanced age of 70.
If men can be whisked away by the Police and imprisoned for long months and the court can keep the cases pending without thought to the fact that an old man is lying in cellular confinement without hope of his case being disposed of, article 21, read with articles 14 and 19 of the Constitution, remain symbolic and scriptural rather than a shield against unjust deprivation.
Law is not a mascot but a defender of the faith.
Surely, if law behaves lawlessly, social justice becomes a judicial hoax.
A closer look at section 110 of the Code in the setting of peril to personal liberty thus becomes a necessity in this case.
Counsel for the State, Shri Francis, amicus curiae Shri Abdul Kader and Senior Advocate Shri Tarkunde, agreed that unless the preventive power under section 110 were prevented from pervasive misuse by zealous judicial vigilance and interpretative strictness; many a poor man, maybe cast into prison by sticking the label of 'habitual ' or by using such frightening expressions as 'desperate ', 'dangerous ' and 'hazardous to the community '.
Law is what the law does, even as freedom is what freedom does.
Going by that test, section 110 cannot be permitted in our free Republic to pick up the homeless and the have nots as it did when under British subjection because to day to be poor is not a crime in this country.
George Bernard Shaw, though ignorant of section 110, did sardonically comment that "the greatest of evils and the worst of crimes is poverty".
Article 21 insists that no man shall be deprived of his life or personal liberty except according to the procedure established by law.
In Maneka Gandhi case(l) this Court in clearest terms strengthened the rule of law vis a vis personal liberty by insisting on the procedure contemplated by article 21 having to be fair and reasonable, not vagarious, vague and arbitrary: The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non 1275 arbitrariness pervades Article 14 like a brooding omnipresence and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14.
It must be "right and just and fair" and not arbitrary, fanciful or oppressive; otherwise, it would be no procedure at all and the requirement of Article 21 would not be satisfied.(l) The principles and procedures are to be applied which, in .
any particular situation or set of circumstances, are right and just and fair.
Natural justice, it has been said, is only "fair play .
in action".
Nor do we wait for directions from Parliament.
The . common law has abundant riches; there may we find what Byles, J., called "the justice of the common law".
Procedural safeguards are the indispensable essence of liberty.
In fact, the history of personal liberty is largely the history of procedural safeguards and right to a hearing has a human right ring.
In India, because of poverty and illiteracy, the people are unable to protect and defend their rights; observance of fundamental rights is not regarded as good politics and their transgression as bad politics.
I sometimes pensively reflect that people 's militant awareness of rights and duties is a surer constitutional assurance of governmental respect and response than the sound and fury of the 'question hour ' and the slow and unsure delivery of court writ. .
To sum up, 'procedure ' in Article 21 means fair, not formal procedure. 'Law ' is reasonable law, not any enacted piece.
As Article 22 specifically spells out the procedural safeguards for preventive and punitive detention, a law providing for such detentions should conform to Article 22.
It has been rightly pointed out that for other rights forming part of personal liberty, the procedural safeguards enshrined in Article 21 arc available.
The constitutional survival of section 110 certainly depends on its obedience to article 21, as this Court has expounded.
Words of wide import, vague amplitude and far too generalised to be safe in the hands of the Police cannot be constitutionalised in the context of article 21 unless read down to be as a fair and reasonable legislation with reverence for human rights.
A glance at section 110 shows that only a narrow signification can be attached to the words in clauses (a) to (g), "by habit a robber. ", "by habit a receiver of stolen property. ", 1276 "habitually protects or harbours thieve. ", "habitually commits or attempts to commit or abets the commission of . ", "is so desperate and dangerous as to render his being at large without security hazardous to the community".
These expressions, when they become part of the preventive chapter with potential for deprivation of a man 's personal freedom upto a period of three years, must be scrutinised by the court closely and anxiously.
The poor are picked up or brought up, habitual witnesses swear away their freedom and courts ritualistically commit them to prison and article 21 is for them a freedom under total eclipse in practice.
Courts are guardians of human rights.
The common man looks upon the trial court as the protector.
The poor and the illiterate, who have hardly the capability to defend themselves, are nevertheless not 'non persons ', the trial judges must remember, This Court in Hoskot 's case has laid down the law that a person in prison shall be given legal aid at the expense of the State by the court assigning counsel.
In cases under section 110 of the Code, the exercise is often an idle ritual deprived of reality although a man 's liberty is at stake.
We direct the trial magistrates to discharge their duties, when trying cases under section 11(), with great responsibility and whenever the counter petitioner is a prisoner give him the facility of being defended by counsel now that article 21 has been reinforced by article 39A.
Otherwise the order to bind over will be bad and void.
We have not the slightest doubt that expressions like "by habit", "habitual", "desperate", "dangerous", "hazardous" cannot be flung in the face of a man with laxity of semantics.
The Court must insist on specificity of facts and be satisfied that one swallow does not make a summer and a consistent course of conduct convincing enough to draw the rigorous inference that by confirmed habit, which is second nature, the counter petitioner .
is sure to commit the offences mentioned if he is not kept captive.
Preventive sections privative of freedom, if incautiously proved by indolent judicial processes, may do deeper injury.
They will have the effect of detention of one who has not been held guilty of a crime and carry with it the judicial imprimatur, to boot.
To call a man dangerous is itself dangerous; to call a man desperate is to affix a desperate adjective to stigmatise a person as hazardous to the community is itself a judicial hazard unless compulsive testimony carrying credence is abundantly available.
A sociologist may pardonably take the view that it is the poor man, the man without political clout the person without economic stamina, who in practice gets caught in .
the coils of section 110 of the Code, although, we as court, cannot subscribe to any such proposition on mere assertion without copious 1277 substantiation.
Even so, the court cannot be unmindful of social realities and be careful to require strict proof when personal liberty may possibly be the casuality.
After all, the judicial process must not fail functionally as the protector of personal liberty.
Indeed, several commissions, spread over decades, and even the Central Law Commission, in some of its reports, disclosed the presence in our midst of many habitual economic offenders and chronic corporate Criminals who, perhaps, may not be on the wanted list of the Police under section 110 of the Code although their dangerous activities may prove a hazard to the health and wealth of nation.
Referring to a similar situation in American Society, Ralph Nader in his introduction to a well documented book titled "America Inc." has observed: In no clearer fashion has the corporation held the law at bay than in the latter 's paralysis toward the corporate crime wave.
Crime statistics almost wholly ignore corporate or business crime; there is no list of the ten most wanted corporations; the law afford no means of regularly collecting data on corporate crime; and much corporate criminal behaviour (such as pollution) has not been made a crime because of corporate opposition.
For example, willful and knowing violations of auto, tire, radiation, and gas pipeline safety standards are not considered crimes under the relevant statutes even if lives are lost as a result.
The description of an array of corporate crimes in this forthright book reveals a legal process requiring courage, not routine duty, by officials to enforce the laws against such out rages.
The law is much more comfortable sentencing a telephone coin box 'thief to five years than sentencing a billion dollar price fixing executive to six weeks in jail.
In one recounting after another, the authors pile up the evidence towards one searing conclusion that corporate economic, product, and environmental crimes dwarf other crimes in damage to health, safety and property, in confiscation of theft of other people 's monies, and in control of the agencies which arc supposed to .
stop this crime and fraud.
And it all goes on year after year by blue chip corporate recidivists.
Why ? It is easy to answer "power".
But that is the beginning, not the end, of understanding.(l) True, American conditions are different from Indian conditions and these observations may not have necessary application to our societal situation.
The point of Ralph Nader has, however, some relevance.
1278 Let us allay misunderstandings.
We are clear in our mind that prevention is better than cure, in criminal law as in medicines especially when there is judicial supervision.
Society cannot be left at the mercy of predators and bandits who, like wild beasts, prey upon the weak and the innocent and become a menace to peace and security of society.
But personal liberty is a prized value and that is why we have insisted not merely upon the Police having to be careful before marching poor people into court under section but the Court itself having to be gravely concerned about using preventive provisions against helpless persons, not on formal testimony readily produced to order as we have noticed in a recent case, but on convincing testimony of clear and present danger to society.
In the present case, the petitioner has been too long in prison, and we take it that no circumstances placed before us justify keeping him longer in custody.
The trial magistrate will, having regard to the observations we have made, drop the proceedings in the interests of justice.
The other prisoner above 70 years also should be enlarged right away (Kutty Thankappan, U.T. No. 665).
We expect any Government which has any regard for human rights not to use section 110 of the Code, torturesome fashion, against the weak and the poor merely because they belong to the 'have not ' class and can be easily apprehended as 'habitual ' this or that or dangerous or desperate.
We draw the attention of the State Government to the likely misuse of the preventive provisions and expect it to issue suitable instructions to the Police minions so that the law will be legitimated by going into action where it must strike and by being kept sheathed where there is no need for indiscriminate display.
With these observations, we direct the release of the petitioner and Kutty Thankappan, U.T. No. 665 on their.
Own bonds until formal orders are passed by the trial court in the regular criminal proceedings under section 110 of the Code.
P.B.R. Petition allowed.
| In a letter addressed to one of the Judges of this Court (V. R. Krishna Iyer, J.) the petitioner complained that he had been illegally detained under section 110, Cr. P. C.
In response to this Court 's notice the Superintendent of Sub Jail stated that the petitioner was "a well known habitual prisoner" of the Kerala State and was known as "thief Gopalan".
In his reply the detenu stated that being unable to see or hear because of his extreme old age of 71 years he was staying in his house in his native place and that one night a policeman took him from his house in a van to the police station saying that he had to inquire something from him and after putting him in the lock up for 10 days produced him before the Court as a person having been arrested the previous night.
He further stated that the charge against him was that on the night patrol one night a policeman found him hiding in a verandah of a shop and that on being asked his name and address he gave one name first and another name a little later and that on inquiry it was found that he was an ex criminal not to be let free.
Allowing the petition.
^ HELD: In the interests of justice proceedings against the petitioner must be dropped.
Section 110 cannot be permitted to pick up the homeless and the have nots as it did under British subjection because today to be poor is not a crime in this country.
[1274F] Article 21 insists that no man shall be deprived of his life or personal liberty except according to the procedure established by law.
In Maneka Gandhi vs Union of India [1978] 1 SCC 248 this Court in clearest terms strengthened the rule of law vis a vis the personal liberty by insisting on the procedure contemplated by article 21 having to be fair and reasonable not vagarious, vague and arbitrary.
[1274G] The constitutional survival of section 110 depends on its obedience to article 21.
Words of wide import, vague amplitude and far too generalised to be safe in the hands of the Police cannot be constitutionalised in the context of article 21 unless read down to be as a fair and reasonable legislation with reverence for human rights.
A glance at section 110 shows that only a narrow signification can be attached to the words in clauses (a) to (g) namely "by habit a robber", "by habit a receiver of stolen property", "habitually protects or harbours thieves", "habitually commits or attempts to commit or abets the commission of . " "is so desperate and dangerous as to render his being at large without security hazardous to the community '.
Expressions like these cannot be flung in the face of a man with laxity of semantics.
The Court must insist on specificity of facts and be satisfied that one swallow 1272 does not make a summer and a consistent course of conduct convincing enough to draw the rigorous inference that by confirmed habit which is second nature the counter petitioner is sure to commit the offences mentioned if he is not kept captive.
Preventive sections privative of freedom, if incautiously proved by indolent judicial processes, may do deeper injury.
They will have the effect of detention of one who has not been held guilty of a crime and carry with it the judicial imprimatur, to boot.
To call a man dangerous is itself dangerous; to call a man desperate is to affix a desperate adjective to stigmatise a person as hazardous to the community is itself a judicial hazard unless compulsive testimony carrying credence is abundantly available.
[1275 G H, 1276 E G]
|
iminal Appeal No. 32 of 1982.
From the Judgment and Order dated 1.10.1981 of the Delhi High Court in Criminal Misc.
(Main) No. 304 of 1980.
S.L. Chowdhary and Pradeep Misra for the Appellant.
Rakesh K. Khanna and R.P. Singh for the Respondent.
The following order of the Court is delivered: Even though the dispute between the parties came to this Court from an initial order passed under Section 145 of the Code of Criminal Procedure, this Court realising that the dispute was between close relatives in respect of their interests in certain properties which were also the subject matter in a Civil Suit No. 434/78 (Remand) of the Court of Sub Judge, First Class, Delhi, advised the parties to have the same resolved through an Arbitrator.
On the parties agreeing, this Court passed an order on September 5, 1986 recording the agreement to refer the dispute to arbitration and appointed Mr. Justice V.D. Misra, retired Chief Justice of the High Court of Himachal Pradesh, as the Sole Arbitrator.
The parties had agreed to deposit a sum of Rs. 3,000 each with the Arbitrator to meet with his expenses and remuneration subject to further directions that may be made in that behalf.
It was further directed that the learned Arbitrator will render a speaking award within four months.
In view of the said agreement, the appeal was allowed and the High Court 's impugned order was set aside.
It appears that thereafter one of the parties, namely, Jagdish Chander Bhatia, did not deposit the expenses with the Arbitrator and raised objection in regard to the arbitration proceedings on the plea that the property in dispute was proposed to be resumed by the Union of India.
In the meantime, it appears that the sole Arbitrator passed away and in his place Mr. Justice M.S. Gujral retired Chief Justice of the High Court of Sikkim, was appointed the Sole Arbitrator.
This Court did not approve of the conduct of Jagdish Chander Bhatia in not depositing the amount and 'in trying to avoid adjudication of the dispute through arbitration.
After this 54 order was passed on October 12, 1990 by which a further sum of Rs. 8,000 was directed to be deposited with the Arbitrator, subject to the Arbitrator deciding who should bear the cost, the newly appointed Arbitrator entered upon the reference and submitted his award on November 14, 1991.
This concluding part of his Award reads as under: "House No. 17 would entirely belong to Lachhman Das Bhatia whereas House No.18 would be jointly owned by Lachhman Das and Jagdish Chander.
Lachhman Das would have 76.50% share whereas Jagdish Chander would have 23.50% share in House No.18.
As House No.17 has entirely been given to Lachhman Das Bhatia in all fairness, Jagdish Chander Bhatia should give vacant possession of House No.17 to Lachhman Das Bhatia.
" The parties were directed to bear their own costs of the arbitration proceedings except that Jagdish Chander Bhatia had to pay Rs. 4,000 to Lachhman Das Bhatia as his share of the Arbitrator 's fees which he had initially failed to deposit.
Against this award, Jagdish Chander Bhatia (hereinafter called 'the objector ') has filed objections under Section 30 of the which provision reads as under: "An award shall not be set aside except on one or more of the following grounds, namely (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration proceedings have become invalid under Section 35; (c) that an award has been improperly procured or is otherwise invalid.
" It was conceded by the learned counsel for the Objector that clause (b) would not be attracted.
His main submission was that the Arbitrator had misconducted himself, in that, he did not take into consideration several documents which were placed on record before him which support the Objector 's case and hence the Award was invalid.
He, therefore, partly relied on clauses (a) and (c) for setting aside the Award.
55 The documents to which the learned counsel for the objector invited our attention, are to be found in Vol.2 of the paper book placed before us.
These documents are 31 in number and they mainly relate to the rights and interests of the parties in properties situate in that part which now belongs to the Dominion of Pakistan.
Since they were refugees they had made certain claims under the law governing rehabilitation of displaced persons in respect of the properties left behind by them.
These documents show that the claim was sanctioned in the name of Punnu Ram Lachhman Das in respect of the properties left behind by the family.
On the strength of that claim, House No.18 was purchased in the said name.
The Arbitrator, however, came to the conclusion, as is evident from the discussion from paragraph 26 and onwards of the Award, that the property in question was purchased for Rs. 12,850 from the funds contributed by Punnu Ram and Lachhman Das, the former paying Rs. 9,233 and the latter Rs. 3,617.
This is the conclusion reached by the Arbitrator as is evident from paragraph 37 of the Award.
The share of the Objector was held to be 1/7th in the share of Punnu Ram, since deceased.
It was on this finding recorded by the Arbitrator that he passed the ultimate order extracted above.
The arbitrator has made a speaking award setting out his reasons for the conclusions reached by him.
He has thus complied with the direction of this Court given earlier.
On a perusal of the award, it becomes clear that the Arbitrator did not go into the rights and interests of the parties including the HUF in the properties left behind in the Dominion of Pakistan.
That was, in our opinion, not necessary because the fact that the claim was sanctioned in the name to the Punnu Ram Lachhman Das was never in dispute.
The short question, which the Arbitrator was required to consider, was as regards the title of the properties which were the subject matter of the reference which included the property purchased for Rs. 12,850 on the strength of that claim.
In dealing with that question the Arbitrator came to the conclusion that Punnu Ram and Lachhman Das had contributed the entire consideration of Rs. 12,850 and hence they were the owners of the property and on the death of Punnu Ram inheritance opened insofar as his share in the property was concerned and the Arbitrator came to the conclusion that the Objector was entitled to 1/7th out of the share of the deceased.
Since the contribution made for payment of the price was not equal, the Arbitrator allotted a larger share to Punnu Ram and consequently the Objector has got a share on the basis thereof.
Practically, all the documents included in Vol.2 relate to the interest of the 56 parties and their HUF in the properties left behind in the Dominion of Pakistan.
The learned counsel for the Objector then tried to take us into the rights and interests of the parties in those properties, but we declined to go into the same as we thought that the Arbitrator was right that he was called upon to decide the interest of the parties in Houses Nos. 17 and 18 alone which were the subject matter of the reference.
We are, therefore, of the opinion that the Arbitrator had not misconducted himself by refusing to enumerate those documents in Vol.2 in his award because he was bound by the scope of the reference which was limited to Houses Nos. 17 and 18 and not the properties left behind in the Dominion of Pakistan by the parties.
For this reason, we are of the opinion that there is no infirmity on the face of the award which would entitle us to exercise jurisdiction under Section 30 of the .
This Court pointed out in Food Corporation of India vs Joginderpal Mohinderpal & Anr., [1989] 2 SCC 347 that an award of an Arbitrator can only be interfered with or set aside or modified within the four comers of the procedure provided by the statute.
The Court must find out whether the Arbitrator has misconducted himself or there was any infirmity in the procedure, such as, the Arbitrator having travelled beyond the terms of the reference or there being an error apparent on the face of the award.
It is not misconduct on the part of an Arbitrator to come to an erroneous conclusion on a disputed issue.
In case of error apparent on the face of the award, the award can be set aside only if there is any proposition of law on which the award is based which is in conflict with law.
It must be demonstrated to the Court that the reasons given by the Arbitrator are so palpably erroneous in law that they have resulted in the Arbitrator taking a view which cannot be sustained in law.
To put it differently the Court does not sit in appeal and does not re assess the evidence.
Even if the Court feels that had it been left to it, it would have assessed the evidence differently that would not be a valid ground for setting aside the award.
In Hind Builders vs Union of India, [1990] 3 SCC 338, this Court pointed out that where on an interpretation of any contract or document, two views are possible and the Arbitrator accepts one view while the other view is more appealing it would not be open to the Court to interfere with the Award.
We, therefore, in the facts and circumstances of this case, see so reason to interfere with the award of the Arbitrator.
The Suit No. 434/78 pending in the Court of the Sub Judge, Delhi 57 was disposed of by that Court, and an appeal, being Civil Appeal No. 211 of 1979 (Jagdish Chander Bhatia vs Lachhman Das Bhatia) preferred on April 23, 1979 against that decree, is pending in the Court of the District Judge, Delhi.
We transfer that appeal to our file and make the Arbitrator 's award the rule of the Court.
The decree of the trial court is set aside and a decree in terms of the award will be drawn up in the appeal proceedings arising out of Suit No. 434/78.
We, however, do not make any order as to costs in the present proceedings.
N.P.V. Appeal disposed of.
| The suit premises was let out by the appellant landlord to the respondent on a monthly rent of Rs. 550 solely for residential purpose.
In a part of the premises, the respondent 's husband, a lawyer established his office and started using the same for that purpose.
Teh appellant landlord riled a petition before the Rent Controller seeking eviction of the respondent tenant.
The Rent Controller made an order of eviction of the respondent tenant on the ground of change of user under section 13(2) (II) (b), of the East Punjab Urban Rent Restriction Act, 1940.
The tenant 's appeal was dismissed by the appellate authority, against which a revision to the High Court was preferred.
The Single Judge of the High Court allowed the revision and set aside the eviction order, holding that the building let out as a 'residential building became a 'scheduled building ' by use of a part thereof as lawyer 's office by the tenants husband; and therefore, the ground of eviction was not available.
Hence this appeal by the landlord by special leave, contending that the ground of change of user contained in section 13(2) (II) (b) was clearly made out from the facts and the High Court erred In setting aside the order of eviction.
172 The respondent tenant submitted that the landlord waived the ground of change of user by acquiescence to use of a part of the premises as lawyer 's office; that the ground in section 13(2)(ii)(b) was not available unless the change of user was of substantial, if not the entire building and, therefore, mere use of a small part of the residential building as lawyer 's office does not constitute such change.
Allowing the appeal of the landlord, this court, HELD : 1.01.
Use of the building for a purpose other than that for which it was leased, without the written consent of the landlord is a ground of eviction.
Ile object dearly is that the parties must remain bound by the terms on which the building is let out, including the condition relating to Its use for the purpose for which it was leased.
In other words, breach of the covenant regarding the kind of user of the building let out is the ground of eviction contained in section 13(2) (ii) (b) of the East Punjab Urban Rent Restriction Act.
[177A B] 1.02.
If the change in user of the building is of the kind that it makes the residential building let out for residential purpose alone change its character and become a 'scheduled building ' as defined in section 2(h) of the Act without the written consent of the landlord, the ground of eviction under section 13(2) (ii) (b) is made out.
[177C] 1.03.
This test is fully satisfied In the present case and the order of eviction was made by the Rent Controller and affirmed by the appellate authority on this basis.
The High Court misconstrued the provisions to take the contrary view.
[177D] Telu Ram vs Om Parkash Garg , approved.
Sant Ram vs Rajinder Lal and Ors., ; Dr. Sewa Singh vs Smt.
Ravinder Kaur and another, , distinguished.
Even though a 'scheduled building continues to be a residential building as defined in section 2(g), a residential building of which even a part is used for a scheduled purpose, becomes and is called a 'schedule building when user of the building is significant or the criterion.
[176F] 2.02 Where user of a building is of significance, a distinction is made In the Act between a residential building which is not a scheduled building and 173 that which is a scheduled building.
This is so in section 4 of the Act dealing with determination of fair rent wherein fixation of rent is made on the basis of user and for that purpose a 'scheduled building ' is treated differently from a residential building which is not a scheduled building.
[176G]
|
Civil Appeal No. 783 of 1975.
Appeal by special leave from the judgment and order dated the 9th April 1975 of the Allahabad High Court in Application No. A. 7 ion Petition No. 22 of 1974.
R K. Garg, section C. Agarwala and V. J. Francis, for the appellant.
D. Mukherjee and Pramod Swarup, for respondent No. 1.
The Judgment of the Court was delivered by SARKRIA J.
We have already announced our order in this appeal on the 2nd May 1975.
We now proceed to give our reasons therefor.
193 The appellant, Shri Ram Autar Singh Bhadauria.
Respondent No. 1 Chaudhari Ram Gopal Singh and Respondents 2 to 11 contested election, as rival candidates from U. P. Legislative Assembly Constituency (No. 293), Sarsaul.
The poll was held on 24 2 1974.
The appellant was declared elected.
The total number of votes polled was 72735.
Out of these, the appellant secured 23626 and Respondent 1, his nearest rival polled 23604, the margin being of 22 votes only.
Respondent 1 filed an election petition challenging the election of the appellant inter alia on the ground (vide para 9(1) of the petition) that the result of the election so far as the returned candidate was concerned materially affected by improper reception and rejection of votes and mistakes in counting.
It was alleged: "para 11(a).
That in a number of polling stations, the instruments supplied to the electors for the purposes of stamping on or near the symbol of the candidate to whom he intends to vote, was seal of Presiding officer which was meant to be put on the reverse of the ballot papers.
Since the electors were supplied these instruments by the Presiding officer for marking the ballot papers the electors indicated their choice by marking in the column of the petitioner with that instrument.
There were 41 such ballot papers which were clear votes for the petitioner that were illegally rejected by the Presiding officer on the ground that the electors ' choice was expressed through the instrument meant for the Presiding officer for stamping on the reverse side of the ballot papers.
Particulars of such ballot papers are given in Schedule I attached to the Election Petition.
(b) That in a number of polling stations, the electors were issued ballot papers along with the counter foil.
While issuing the ballot papers to the electors, the polling staff .
deputed there did not detach the counter foil and the electors after putting seal mark put the ballot papers along with the counter foil in the ballot box.
It was due to the mistake of the staff deputed at the polling station.
The number of some of such ballot papers are 100976, 100977, 100978, 100979, 100980, 100982, 100983 and 100984.
These ballot papers clearly indicate the votes for the petitioner but they were illegally rejected on the ground that the identity of the elector can be established.
The reason on which it was rejected was wholly illegal.
The particulars of such bal lot papers are given in Schedule IT attached to this election petition.
" In his written statement, the successful candidate stated: "65(1).
That the contents of paragraph No. 9(1) of the Election Petition are not admitted.
The result of the election in so far as the answering respondent is concerned has not been materially affected by any improper reception or 194 rejection, or by wrong arithmetical and clerical mistake in counting of votes and/or counting and acceptance of void votes in favour of the answering respondent.
In fact no improper reception or rejection or arithmetical mistake or any clerical mistake was done in favour of the answering respondent 16.
That the contents of paragraph No. 11 (a) of the petition are wrong and denied.
It is wrong to say that 41 ii ballot papers mentioned in Schedule I or any ballot paper counted in favour of the respondent No. 1 by marking with the seal of the Presiding officer.
It is admitted that the ballot papers on which unauthorised seal was found were rejected.
Some of these rejected ballot papers may be of the petitioner but most of them were of respondent No. 1 and other contesting candidates.
That the contents of para 11 (b) of the petition and Schedule II are not admitted as stated.
Only on one polling station, due to the mistake of the Presiding officer some bal lot papers were issued along with their counter foils.
The counterfoils did contain the name and signature or thumb impression of the voters attached to the ballot paper.
In these circumstances such ballot papers were rejected by the Returning officer.
It is submitted that such ballot paper were in respect of all the candidates including the respondent No. 1.
Further, no such objection was raised at the time of counting by the Petitioner or his election agent and/or his counting Agent.
That no different criteria was adopted by the Returning officer in the matter of acceptance or rejection of ballot papers and the respondent No. 1 maintains that many ballot papers in which the Electors expressed their choice in favour of the respondent No. 1 by putting the seal of the Presiding officer as supplied by the Presiding officer, were wrongly rejected during the counting by the Returning officer.
" Respondent 1 did not adduce any evidence in support of the allegations extracted above.
But on 24 2 1975, he made an application before the High Court, praying for scrutiny and recount of the ballot papers.
The allegations in para 11(a) and (b) of the election petition were reiterated in the application.
The appellant in reply filed a counter affidavit which was substantially a reproduction of his reply in the written statement.
The learned Judge of the High Court by his order, dated 9 4 1975, allowed that application and directed scrutiny and recount of ballot papers on the view that: (a) The appellant "was declared to have won by a very small margin of only 22 votes".
195 (b) "lt is not in dispute that a number of ballot papers were rejected by the Returning officer as invalid be cause the polling staff of a particular polling station forgot to detach the counter foils of a number of ballot papers.
As the counter foils contained the identity of the voters, the ballot papers were rejected for no fault of the voters, but because of negligence or incompetence on the part of the polling staff".
(c) "It is also the admitted case of the parties that a number of ballot papers were rejected because the voters cast their votes by putting their mark not with the marking instrument issued by the Election Com mission but with the marking or stamping instrument issued by the Election Commission for the use of the Presiding officers.
This happened because instead of the instrument which the polling staff should have given to a voter to put the mark showing for which candidate he wanted to vote, the polling staff by mis take handed over to the voter the stamp meant for the Presiding officer. to affix on the back of the ballot paper.
" (d) lt "The petition, the written statement, the recriminatory petition filed by the respondent (now appellant) and the reply thereto filed by the petitioner would show that this is a case in which both parties have pleaded that there was wrong reception, rejection and u counting of votes.
" It is against this order, dated 9 4 75 of the High Court that this appeal has been filed by the returned candidate after obtaining special leave.
Having heard learned Counsel on both sides, we are or opinion that the order made by the High Court for a general scrutiny and re count of all the ballot papers cast at the election, was not justified.
The returned candidate had not categorically and specifically admitted the allegations made in the election petition with regard to the improper rejection of the ballot papers.
This will be clear from a comparative reading of Paragraph 11 (a) and (b) of the petition and the answers thereto given in the written statement, which have been reproduced above verbatim.
It is to be noted that the reply of the returned candidate to the contents of the aforesaid sub paras (a) and (b) starts with a denial or a non admission.
Such a traverse is then followed by qualified and vague admissions that some ballot papers were rejected because they were not marked with the instrument meant for this purpose, or bore the names or signatures of the voters on the counter foils that remained attached to them, owing to the mistake of the Presiding Officer.
After having thus replied to the petitioner 's allegations, the returned candidate said that most of these rejected 196 ballots had been cast for him and not for the petitioner.
This was a counter assertion which was not, strictly speaking, relevant to the case set up in the petition.
Mr. Mukherjee, learned Counsel for Respondent 1 (election petitioner) has drawn our attention to the "Additional Pleas" in the written statement of the appellant.
According to Counsel it were these pleas, more than anything else, that led to the finding "that this is a case in which both parties have pleaded that there was wrong reception, rejection and counting of votes.
" We will discuss this aspect of the case a little later.
At this place it will be sufficient to say that since the returned candidate in his written statement did not specifically and fully admit all the facts alleged in Paragraph 11 (a) and (b) of the petition, the Court could not dispense with proof of those facts altogether.
For instance, in reply to the facts alleged in Para 11 (a) of the petition, the returned candidate did not admit that the instrument with which such rejected ballot papers were found stamped, was supplied by the Presiding officer.
On the contrary, the reply to sub para (a) begins with a clear traverse: "that the contents of paragraph No. 11 (a) of the petition are wrong and denied".
This denial notwithstanding, the learned Judge appears to have erroneously assumed this fact as admitted by the returned candidate.
The parties being at variance on this material point, this issue of fact was required to be proved by the party alleging lt.
Now, we come to the finding of the learned Judge as to the wrong reception and rejection of votes being a common ground between the parties.
We have catalogued this finding as ground (b) which is one of the four pillars on which the impugned order rests.
This ground, according to Mr. Mukherji, draws particulars support from the "Additional Pleas" set up in the written statement.
We do not propose to over burden this judgment by reproducing all that has been stated in Paragraph 47 to 56 of the written statement under the caption "Additional Pleas".
It will be sufficient to extract some of it by way of sample : "47.
That the Returning officer did not allow any improper acceptance or rejection against the interest or the election petitioner, rather mistakes of improper acceptance and rejection of ballot papers were done against the interests of the answering respondent.
That many ballot papers which bore the major portion of the stamp mark within the column of the Respondent No. 1 were wrongly rejected by the Returning officer at the time of counting.
That as in the case of the Election Petitioner the Ballot Papers in favour of the Respondent No. 1 with which counterfoils were attached were rejected.
In case the Hon 'ble Court finds that similar ballot papers in favour of 197 the election petitioner are to be accepted, the ballot papers in favour of the Respondent No. 1 in the same condition should also be accepted and counted as valid votes in favour of the Respondent No. 1.
That many ballot papers containing votes in favour of the Respondent No. 1. were wrongly put in the bundles of the votes in favour of the Election Petitioner.
That the bundles of ballot papers in favour of the Respondent No. 1 in fact contained more than SO ballot papers and there was thus wrong counting.
I say that the Respondent No. 1 filed application before the Returning officer on 27 2 74 but the Returning officer without considering the submissions made therein rejected it and did not order for recount.
" If we may say so with respect, in taking these Additional Pleas into account, the learned Judge completely misdirected himself.
He overlooked the fact that these Pleas were irrelevant to and beyond the scope of the enquiry into the allegations in the election petition falling under section 100(1)(d)(iii) of the Representation of the people Act, 1951.
These "Additional Pleas" were in the nature of recriminatory` pleas which could not be investigated in this election petition.
As clarified by this Court in Jabar Singh vs Genda Lal(1), the scope of the inquiry in a case under section 100(1) (d) (iii) is to determine whether any votes had been improperly cast in favour of the returned candidate or any votes had been improperly refused or rejected in regard to any other candidate.
These are the only two matters which would be relevant for deciding whether the election of the returned candidate had been materially affected or not.
At such an enquiry the burden is on the petitioner to prove his allegations.
In fact section 97(1) of the Act has no application to a case falling under section 100(1) (d) (iii).
The scope of the enquiry is limited for the simple reason that what the clause requires to be considered, is, whether the election of the returned candidate has been materially affected and nothing else.
It is true that in a composite election petition wherein the petitioner claims not only that the election of the returned candidate is void but also that the petitioner or some other person be declared to have been duly elected, section 97 would also come into play and allow the returned candidate to recriminate and raise counter pleas in support of his case, "but the pleas of the returned candidate under section 97 have to be tried after a declaration has been made under section 100 of the Act.
The first part of the enquiry in regard to the validity of the election of the returned candidate has therefore to be tried within the narrow limits prescribed by section 100(1) (d) (iii) and the latter part of the enquiry governed by section 101 (a) will have to be tried on a broader basis permitting the returned candidate to lead evidence in support of the please taken by him in his recriminatory petition; but even in such a case the 198 enquiry.
necessary while dealing with the dispute under section 101 (a) will not be wider if the returned candidate has failed to recriminate and in a case of this type, the duty of the Election Tribunal will not be to count and scrutinise all the votes cast at the election.
Moreover, in the instant case, it is a matter of controversy to be decided as to whether the recriminatory petition filed by the appellant is within time or not.
The above being the law on the point, it is clear that the learned Judge was in error in ordering general inspection and recount of the total votes polled at the election, merely because in these Additional Pleas the returned candidate also had by way of recrimination, complained of wrong reception and rejection of votes and wrong counting of votes.
The pleas at this stage could not be investigated even in the recriminatory petition filed by the returned candidate.
They were beyond the scope of the enquiry into the petitioner 's case which (as set up in Para 11 of the petition) fall under section 100(1)(d)(iii) of the Act Further, the High Court did not properly apply its mind to the question, whether on the facts alleged in Para 11 (a) and (b) of the petition assuming the same to be correct a prima facie case for improper rejection of The 50 ballot papers referred to therein, had been made out.
In other words, if the defects in these SO ballot papers were attributable to the mistakes or negligence of the Presiding officer or his staff, would it take those ballot papers out of the mischief of clauses (a) and (b) of Rule 56(2) of the Conduct of Election Rules, 1961 Rule 56 runs thus: "(1) Subject to such general or special directions, if any, as may be given by Election Commission in this behalf, the ballot papers taken out of all boxes used in a constituency shall be mixed together and then arranged in convenient bundles and scrutinised.
(2) The returning officer shall reject a ballot paper (a) if it bears any mark or writing by which the elector can be identified, or (b) if, to indicate the vote, it bears no mark at all or bears a mark made otherwise than with the instrument supplied for the purpose, or (c) if votes are given on it in favour of more than one candidate, or (d) if the mark indicating the vote thereon is placed in such manner as to make it doubtful to which candidate the vote has been given, or 199 (e) if it is a spurious ballot paper, or (f) if it is so damaged or mutilated that its identity as a genuine ballot paper cannot be established, or (g) if it bears a serial number, or is of a design different from the serial numbers, or, as the case may be, design, or the ballot papers authorised for use at the particular polling station, or (h) if it does not bear (both, the mark and the signature) which it should have borne under the provisions of sub rule (1) of rule 38; Provided that where the returning officer is satisfied that any such defect as is mentioned in clause (g) or clause (h) has been caused by any mistake or failure on the part of a Presiding officer or polling officer, the ballot paper shall not be rejected merely on the ground of such defect; Provided further that a ballot paper shall not be rejected merely on the ground that the mark indicating the vote is indistinct or made more than once, if the intention that the vote shall be for a particular candidate clearly appears from the way the paper is marked.
(3) to (5): . .
(6) Every ballot paper which is not rejected under this rule shall be counted as one valid vote: Clauses (a) and (b) of Rule 56(2) are referable to Rule 38 which requires every elector to whom ballot paper has been issued under Rule 38 to maintain secrecy of voting and "to make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbol of the candidate for whom he intends to vote.
" Rule 38 is also relevant.
This Rule requires every ballot paper and the counterfoil attached thereto to be stamped on the back by the Presiding officer with such distinguishing mark as the Election Commission may direct.
Every such ballot paper before it is issued is required to be signed in full on its back by the Presiding officer.
Sub rule (2) requires that at the time of issuing of ballot paper, the Polling officer shall on its counterfoil record the electoral roll number of the elector and obtain his signature or thumb impression.
The object of these rules is to secure not only the secrecy of the ballot but also to eliminate chances of sharp practices in the conduct of elections.
Their requirements are therefore mandatory, and a defect arising from their non observance inexorably entails rejection of the defective ballot paper except to the extent covered by the Provisions to Rule 56(2).
200 In the case of 41 ballot papers mentioned in para 11(a), what happened was that instead of marking those ballot papers with the instrument supplied for this purpose by the Election Commission the electors concerned stamped it with the instrument meant to be used exclusively by the Presiding officer for stamping the counterfoils and lacks of the ballot papers.
The Court had to apply its mind as to whether these facts by themselves were sufficient to attract Rule 56 2 (b) ? This question would further resolve itself into two issues: (i) Was the stamping instrument with which these electors "marked" the ballot papers, given to them by the Presiding officer cr any member of his staff ? (ii) If so, could these ballot papers be deemed to have been marked with "the instrument supplied for the purpose" within the contemplation of Rules 38 and 56(2)(b) ? The first one was an issue of fact, the determination of which would depend on evidence.
The second issue would arise only on proof of tile first, and involve the question of interpreting and applying the phrase "instrument supplied for the purpose".
This phrase is capable two interpretations one narrow and literal, and the other liberal and contextual.
Without there being any proof of the fact that the stamping instrument was handed over to the 41 electors by the Presiding officer/Polling officer, a final expression of opinion on our part would be academic and premature.
It will be sufficient to reiterate that the provisions of Rules 38 and 56(2) (a) and (b) with which we are concerned in this case are mandatory and strict compliance therewith is essential.
Once it is established that the fault specified in clauses (a) or (b) of Rule 56(2) has been committed, there is no option left with the Returning officer but to reject the faulty ballot paper.
We would further make it clear that even if any such defect as is mentioned in clauses (a) or (b) of Rule 56 is caused by any mistake or failure on the part of the Returning officer or Polling Officer, the Returning officer would be bound to reject the ballot paper on the ground of such defect.
That such is the imperative of Rule 56(2) is clear from the fact that the said clauses (a) and (b) have advisedly been excluded from the first Proviso to Rule 56(2) which gives a limited discretion in the matter of rejection to the Returning officer only where the defect is of a kind mentioned in clauses (g) and (h) of this sub rule.
In the view that such Rules relating to the conduct of elections, are required to be observed strictly, we are fortified by the ratio of this Court 's decision in Hari Vishnu Kamath vs Syed Ishaque and ors.(1) In That case, voters for the House of the People in Polling Stations Nos. 316 and 317 in Sobhapur were given ballot papers with brown bar intended for the State Assembly, instead of ballot papers with green bar which had to be used for the House of the People.
The total number of votes so polled was 443, out of which, 62 were in favour of the then appellant, 301 in favour of the first respondent therein and the remaining in favour of the other candidates.
Rule 47(1)(c) of the Conduct of the Election Rules, 1951 provided that "a ballot paper contained in a ballot box shall be rejected if it bears 201 any serial number or mark different from the serial number or marks of ballot papers authorised for use at the polling station or the polling booth at which the ballot box in which it was found, was used.
" The election petitioner contended that in accordance with this rule, the ballot papers received at the two polling stations, not having the requisite mark; should have been excluded.
The returned candidate pleaded that the Returning officer had rightly accepted 301 votes be cause Rule 47 was directory and not mandatory.
It was contended that the electors were not at fault and that the wrong ballot papers were issued due to the lapse on the part of the Returning officer and that to reject the votes of the electors for the failure of the Polling officer to deliver the correct ballot papers under Rule 23 would be to disfranchise them, and that a construction which involve such a consequence should not be adopted.
This Court repelled the contention in these terms: "If the word 'shall is thus to be construed in a mandatory sense in Rule 47(1) (a), (b) and (d), it would be proper to construe it in the same sense in Rule 47(1) (c) also.
There is another reason which clinches the matter against the 1st respondent.
The practical bearing of the distinction between a provision which is mandatory and one which is directory is that while the former must be strictly observed in the case of the latter it is sufficient that it is substantially complied with.
How is this rule to be worked when the Rule provides that a ballot paper shall be rejected ? There can be no degrees of compliance so far as rejection is concerned, and that is conclusive to show that the provision is mandatory.
" The above observations are apposite.
Judged by the guiding principle enunciated therein, it can safely be said that the provisions of rule 56(2) (a) and (b) read with Rule 38, are mandatory and not merely directory.
It was contended by the learned Counsel for the respondent before us, that the Provisos to sub rule (2) of Rule 56 are only illustrative and not exhaustive, and consequently, the principles underlying these Provisos would give a discretion to the Returning Officer not to reject a ballot paper on the ground of a defect caused by mistake or negligence of the Presiding officer/or Polling officer, notwithstanding that such defect is one mentioned in clauses (a), (b), (c), (d), (e) and (f) of Rule 56(2).
This contention is not tenable.
The word 'shall ' used in the opening Part of sub rule (2) read in the context of the general scheme of this Rule shows that it is mandatory.
Sub rule (5)puts the matter beyond doubt.
It says that "every ballot paper which is not rejected under this sub rule shall be counted as one valid vote".
Rule 56 is a complete code by itself.
The Provisos to Sub rule (2) are exhaustive of the kinds of defects which the Returning officer may condone, if those defects are caused by the mistake or failure of the Polling Staff.
The first Proviso is in terms limited to defects falling under Clause 202 (g) or (h).
Neither of these Provisos appears to be attracted if the A defects is any of the defects mentioned in clauses (a) or (b).
The learned Judge of the High Court has not applied his mind as to whether the facts alleged in Paragraph 11(b) of the petition, if correct, would fall within the mischief of clause (d) of Rule 56(2).
This will necessarily require consideration of the issue whether there has been an infringement if any of the provisions of Rule 38, referable to clause (a) of Rule 56(2).
Another point in this context, for consideration will be whether the "counterfoil" can be said to be an integral part of the "ballot paper" so that any writing or marks of identification of the voter on a counterfoil issued to the voter by mistake, is to be deemed to be a defect of the nature mentioned in clause (a) of Rule 56(2).
The High Court has not at all addressed itself any of these questions.
Times out of number, this Court has pointed out that a general Scrutiny and recount of the ballot papers should not be lightly ordered.
Before making such an extraordinary order, the Court must be satisfied that all the material facts have been pleaded and proved and that such a course is imperatively necessary in the interest of justice.
In the case in hand.
the allegations in the election petition (vide Paragraph 11) are confined to 41 plus 9, total 50 votes only (vide Paragraph).
There was no foundation in the petition for ordering a general recount.
Nor could the Additional Pleas in the written statement of the returned candidate be taken into account for making an order for general inspection of the ballots, because investigation of those pleas was beyond the scope of the case alleged in Para 11 of the petition falling under section 100(1) (d) (iii) of the Act.
We have said enough.
We will close the discussion by repeating the note of caution that this Court speaking through V. Krishna Iyer J. recently sounded in Chanda Singh vs Ch.
Shiv Ram(1).
"A democracy runs smooth on the wheels of periodic and pure elections.
The verdict at the polls announced by the Returning Officers leads to the formation of Governments.
A certain amount of stability in the electoral process is essential.
If the counting of the ballots are interfered with by too frequent and flippant recounts by courts a new system is introduced through the judicial instrument.
Moreover, the secrecy of the ballot which is sacrosanct becomes exposed to deleterious prying, if recount of votes is made easy.
The general reaction, if there is judicial relaxation on this issue, may well be a fresh pressure on luckless candidates, particularly when the winning margin is only of a few hundred votes as here, to ask for a recount Micawberishly looking for numerical good fortune or windfall of chance discovery of illegal rejection or reception of ballots.
This may tend to a dangerous disorientation which invades the democratic order by injecting widespread scope for reopen 203 ing of declared returns, unless the Court restricts recourse to recount to cases of genuine apprehension of miscount or illegality or other compulsions of justice necessitating such a drastic step." In the result we allow the appeal and set aside the order of the High Court for general scrutiny and recount of the ballot papers.
However, the High Court will have to determine, (after taking such evidence as may be necessary) inter alia, (i) whether.
the instrument which was used for marking the 41 votes (referred to in the election petition) was supplied to the voters by the Presiding officer or any other member of his Polling Staff.
If on evidence adduced, the learned Judge finds this issue in the affirmative, the further question to be considered would be (ii) whether such supply would answer the legal requirement of "instrument supplied for the purpose" in Rule 56(2) (b).
If both these issues (i) and (ii) are answered in the positive, then and then only he may proceed to inspection and recount of these votes mentioned in the petition.
Similarly, after considering the legal questions indicated above, he may order recount of the 9 votes alleged to have counterfoils attached thereto.
There appears to be no justification for ordering a general inspection of the ballots on the facts of this case.
The learned Judge shall proceed with the trial of the election petition in the light of what has been said above.
Costs to abide the event in the High Court.
P.H.P. Appeal allowed.
| Under section 2(6A)(e), Income Tax Act, 1922, dividend includes any payment by a company, not being a company in which the public are substantially interested within the meaning of section 23A, of any sum by way of advance to a share holder to the extent to which the company possesses accumu lated profits.
The appellant assessee was a shareholder in a company in which the public were not substantially interested within the meaning of section 23A.
He had withdrawn some amounts from the company 's account.
The company had been allowed devel opment rebate under section 10(2)(vi b) and that amount was debited in the profit and loss account of the company for the accounting year leaving a small balance of profit in the profit and loss account.
The Appellate Assistant Commis sioner treated the entire sum, that is, the amount allowed as development rebate and the amount of balance in the profit and loss account, as the amount of accumulated prof its possessed by the company.
Treating the withdrawals by the appellant as advances by the company to him and finding the highest amount of advance to the assessee to be within the total figure of accumulated profits as arrived at by him, he directed the addition of the advance to the asses see 's income as dividend under section 2(6A)(e) of the Act.
The Tribunal held that the development rebate was not liable to be treated as accumulated profits; but, on reference.
the High Court substantially confirmed the order of the Appel late Assistant Commissioner.
On the question whether the development rebate could be treated as accumulated profits in the hands of the company under section 2(6A)(e), the appellant contended that the develop ment rebate, being identical with initial depreciation is in the nature of depreciation allowance, and since it is de ductible from the assessable profits of the company, it is also a type of outgoing expenditure or out of pocket cost, and was therefore, deductible from the company 's commercial profits.
Dismissing the appeal, HELD: The development rebate reserve created by the company, although it does not form part of the assessable profits, undoubtedly forms part of the commercial profits and hence constituted accumulated profits of the company. within the meaning of section 2(6A)(e).
[648D] (1) The term 'profits ' in taxation law varies in its meaning according to the context.
The expression 'accumu lated profits ' occurring in section 2(6A) means profits in the commercial sense that is profits in the real and true sense of the term and not assessable or taxable profits.
[642E] E.D. Sassoon & Company Ltd. and Others vs Commissioner of Income tax, Bombay City at page 46, Commission er of Income taX, Bombay vs Ahmedbhai Umarbhai.
& Co., Bombay 18 ITR 472 at 502, Commissioner of Income tax.
Bombay City vs Bipinchandra Maganlal & Co. Ltd. and Gobaid Motor Service (P) Ltd. vs Commissioner of Income tax, Madras followed.
(2) Although they are not identical and differ in some material particulars, initial depreciation and development rebate are similar in nature as both are by 639 way of incentive for installation of new machinery or plant.
But the initial depreciation or the development rebate is not a recurring allowance for the subsequent years like the normal depreciation allowance provided in section 10(2)(vi) or the additional depreciation provided in section 10(2)(vi a).
The normal depreciation and the additional depreciation are permitted to be deducted from the written down value.
But the amount of the initial depreciation is not deductible in determining the written down value.
[644D E] (3) Normal depreciation reserve of the company may not form part of the accumulated past profits as held in Commis sioner of Income tax, Bombay vs Viramgam .Mills Co. Ltd. But since the initial depreciation or the devel opment rebate cannot be equated with normal depreciation, it is not a deductible item of cost or expenditure in.
arriving at the commercial profits.
The initial depreciation or the development rebate is not allowed as an extra deductible allowance of business expenses for meeting the costs of replacement in future years, but they are meant merely to reduce the tax liability of the assessee for the year of installation only, in order to give him an incentive to instal new machinery or plant [645D F] (4) The purpose of section 2(6A) is to include within the term 'dividend ', for the purpose of taxation, certain dis tributions or payments as deemed dividend.
Section 2(6A)(c) provides that 'dividend ' includes any distribution to the shareholders liquidation to the extent to which the distri bution is attributable to accumulated profits.
In Tea Estate India Pvt. Ltd. vs C.I.T., W. Bengal it was held that accumulated profits in cl.
(c) include devel opment Tebate.
If for the purpose of distribution the amount of development rebate could form part of the accumu lated profits of the company, a fortiori, it would be so far the purpose of cl.
(e) also.
[646B; 645G] (5) The use of the expression 'whether capitalised or not ', as qualifying the expression 'accumulated profits ' in cls.
(a) to (d), but not in cl.
(e), shows that the legisla ture does not intend to rope in capitalised profits in el.
That is, to the extent the profits have been capita lised in accordance with the law and its Articles of Associ ation, a company cannot be said to possess any accumulated profits.
But in the present case, the accumulated profits of the company were never capitalised.
Merely transferring the sum to the development reserve account by debiting it to the profit and loss account did not amount to capitalisation of profits.
The nature of the assets did not change out continued to remain as profits.
[646E G; 647A B] Ann Bouch and William Bouch vs William Bouch Sprou (12 Appeal Cases, 385 applied.
Commissioner of Income tax, Madras vs
K. Srinivasan and others approved.
Sheth Haridas Achratlal vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Baroda referred to.
|
minal Appeal No. 128 of 1962.
Appeal from the judgment and order dated January 30, 1962, of the Calcutta High Court in Criminal Appeal No. 429 of 1960.
section C. Mazumdar, for the appellant.
P. K. Chakravarti and P. K. Bose, for the respondent No. 2.
The Judgment of the Court was delivered by Wanchoo, J.
This is an appeal on a certificate granted by the Calcutta High Court.
The appellant hired a westing house, 399 D. C. motor from the Modem Electrical Works (hereinafter referred to as the Works) on April 4, 1958 on a rent of Rs. 40 per month.
The hiring period was to last for at least three months and it was agreed that if the motor or parts thereof were lost or damaged by the appellant, he would be bound to pay the whole cost of the motor and the parts.
The motor remained in the use of the appellant and hire charges were paid by him from April 1958 to January 1959.
Thereafter it is said that no hire charges were paid.
On June 8, 1959, the appellant wrote a letter to the Works in which he said that he had purchased the motor in question for Rs. 600 on condition that the same would be tried for three months, and if it was found satisfactory the money would be paid and the purchase completed.
The letter also stated that the agreement was that if the motor was not found satisfactory, the appellant would pay three months ' hire at Rs. 40 per month and the motor would be returned thereafter.
Finally, the appellant said in the letter that the Works had been paid Rs. 620 in all and thus the purchase had been completed.
The appellant therefore requested the Works to give him a slip saying that the motor had been sold to the appellant, as no further money was due to the Works.
On June 15, 1959, the Works sent a reply to the appellant denying that any such agreement as was alleged by the appellant had been made.
It was also denied that Rs. 620 had been paid, and therefore the purchase was complete.
Finally it was said that the appellant had only paid Rs. 400 and Rs. 200 were still due from him for the months of February to June 1959.
The appellant replied to this letter in which he reiterated his stand taken in the earlier letter and gave details of how the payment of Rs. 620 had been made.
Thereafter the Works filed a complaint through its servant Mohd. Ayub on July 1, 1959 in which after stating its case it urged that the appellant had committed criminal breach of trust and was therefore guilty under section 406 of the Indian Penal Code.
On this complaint the appellant was summoned by the Presi dency Magistrate 9th Court, Calcutta and after taking some evidence for the prosecution, the Magistrate discharged the appellant holding that there was no satisfactory evidence of dishonest misappropriation or conversion of the motor by the appellant to his own use and that the dispute between the parties was essentially of a civil nature.
Mohd. Ayub then went in revision to the High Court.
The High Court set aside the order of discharge and directed further enquiry in the matter by another Magistrate.
The case then went back to the Third Presidency Magistrate, Calcutta, 400 who eventually found the appellant not guilty and ordered his acquittal on the ground that there was dispute between the parties as to the actual nature of the transaction and it could not be said that there was any dishonest intention on the part of the appellant to misappropriate the motor.
Mohd. Ayub then filed an appeal before the High Court under section 417(3) of the Code of Criminal Procedure.
Eventually the matter was heard by a Division Bench of the High Court, and it came to the conclusion that it was clear from the letter of June 8, 1959 (to which we have already referred) that the same could not have been written unless the appellant dishonestly in violation of the entrustment wanted to cause wrongful loss to the complainant and wrongful gain to himself.
It was further held that the letter did not show that there was a bona fide claim of ownership over the property and the claim was merely a pretence which could not exonerate the appellant from being punished under section 406 of the Indian Penal Code. 'The appellant then applied for a certificate to enable him to file an appeal to this Court, which was granted; and that is how the matter has come up before us.
We are of the opinion that this appeal must succeed.
It is not in dispute between the parties that the motor was entrusted to the appellant by the Works for his use.
The dispute was whether this entrustment was merely by way of hire (which was the case of the Works) or, as was the case of the appellant, was on the basis of an agreement between the parties that the appellant would purchase the motor if he found it satisfactory after trying it for .three months and pay Rs. 600 as the price and that he would return it if he found it unsatisfactory during this period of three months and pay Rs. 40 each month as hire for that period.
The real dispute between the parties therefore was as to the nature of the agreement between them when the motor was entrusted to the appellant in April 1958.
That dispute was clearly of a civil nature.
The Works however contended that by writing the letter of June 8, 1959 the appellant committed breach of trust and was guilty under section 406 of the Indian Penal Code.
Now in that letter the appellant put forward his side of the case as to the terms of the agreement when he took delivery of the motor in April 1958.
The question is whether by writing that letter the appellant could be said to have committed the offence defined in section 405 of the Indian Penal Code and punishable under section 406 thereof.
Now section 405 runs as follows : "Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly mis 401 appropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust.
" It may be accepted that the appellant was entrusted with the motor by virtue of the agreement between him and the Works, the terms of which are seriously in dispute.
The question however is whether the 'appellant dishonestly misappropriated or converted to his own use that motor.
On the facts in the present case the motor was handed over to the appellant for his use even according to the case of the Works.
Unless therefore it can be shown that the appellant by doing something to the motor which he was not entitled to do dishonestly misappropriated or converted the motor to his own use, he cannot be guilty of breach of trust under this part of section 405.
Now the case of the Works is that the appellant must be deemed to have misappropriated or converted to his own use the motor by writing the letter of June 8th.
It is clear however that the letter shows no change in the use of the motor, which, according to the Works, the appellant had hired for his own use.
Therefore it cannot be said that merely by writing that letter of June 8, the appellant dealt with the motor in such manner as would amount to its misappropriation or conversion to his own use by him.
Clearly the appellant was using the motor for his own purpose before that letter and continued to use it in the same way after the letter.
That letter therefore cannot in our opinion result in the misappropriation or conversion of the motor to his own use by the appellant within the meaning of these words in section 405 in the circumstances of the present case.
It is however urged that even if that be so, the appellant must be held to have dishonestly used or disposed of the motor in violation of the legal contract, express or implied, which he had made touching the discharge of such trust, because of the letter of June 8.
Now it is clear from the receipt given by the appellant to the Works when he took the motor in April 1958 that he was taking it for his own use on certain terms.
There is however nothing to show that by writing the letter of June 8 the appellant used the motor in violation of any legal contract, express or implied, which he bad made with respect to it for use of the motor was the same before the letter as well as after it.
Nor can it be 402 said that the appellant had disposed of the motor in violation of any legal contract which he had made with respect thereto for it is not the case of the Works that the appellant had parted with the possession of the motor to somebody else.
If, for example, the appellant had sold that motor, there might have been something to be said for the view that he had disposed of the motor in violation of the contract with respect to it even if it was a hirepurchase contract.
But on the facts of this case all that the letter of June 8 does is to put forward the case of the appellant with respect to the transaction of April 4, 1958.
So far as the use of the motor is concerned there has not been any change in it to indicate either misappropriation or conversion or disposal of it in any manner against the terms of the contract, express or implied.
Clearly section 405 contemplates something being done with respect to the property which would indicate either misappropriation or conversion or its use or disposal in violation of the contract, express or implied.
But where, as in the present case, nothing was done with respect to the use of the property which was not in accordance with the hiring agreement between the parties, it cannot be said that there was misappropriation or conversion of the property or its use or disposal in violation of the contract.
We are not expressing any opinion as to the correctness of the case either of the appellant or of the Works in this behalf.
All that we emphasise is that the letter of June 8 merely raises a ' dispute of civil nature between the parties and there is no question of any criminal breach of trust with respect to the motor on the basis of that letter.
In this view of the matter we allow the appeal, set aside the conviction of the appellant and order his acquittal.
The fine, if paid.
will be refunded to him.
Appeal allowed.
| The Income tax Officer issued a notice to the assessee under section 34 on the ground that two items of the assessee 's income, namely forest income and interest income, were not included in the original assessment for the year 1942 43.
In response the assessee filed a return fully disclosing his interest income but raised the plea that his forest income was not taxable.
The, Income tax Officer however, assessed both items to tax.
On appeal, the Appellate Tribunal in its order dated April 25, 1961, although dealing only with the forest income and holding that the Income tax Officer had no jurisdiction to initiate proceedings under section 34 in respect of such income, by inadvertence or by mistake, set aside the entire order of reassessment both in respect of forest income, as well as the interest income.
The Department did not take any steps to rectify the mistake under section 35 or to have the question of illegality referred to the High Court.
Having allowed the order of the Tribunal to become final, the Income tax Officer initiated fresh proceedings under section 34 in respect of the interest income and made a revised assessment order which included this income.
The Appellate Tribunal confirmed the assessment but the High Court, on a reference to it under section 66(1), took the view that fresh proceedings under section 24 could not be taken for the reason, inter alia, that the Tribunal 's order dated April 25, 1949 had become final.
HELD : The Tribunal had committed a mistake in setting aside the reassessment order in respect of interest income also, but the income tax Officer did not resort to the obvious remedy of having the mistake rectified as provided for under section 35 and allowed the Tribunal 's order dated April 25, 1949 to become final.
He could not in the circumstances, reopen the assessment by initiating proceedings under section 34, as otherwise there would be an unrestricted power of review in the hands of the Income tax Officer to go behind the findings of a hierarchy of Tribunals and Courts.
[995 E F; 996 F H] C.I.T. Bombay and Aden vs Khemchand Ramdas, (1938)6 I.T.R. 414 and C.I.T. West Punjab vs The Tribune Trust, Lahore, (1948)16 I.T.R. 214, referred to.
R. K. Das & Co. vs C.I.T., West Bengal, (1956)30 I.T.R. 439 and C.I.T., Bihar & Orissa vs Maharaja Pratapsingh Bahadur of Gidhaur, distinguished.
|
vil Appeal Nos.
1339 40 of 1988.
From the judgment dated 7.7.1987 of the Madras High Court in W.P. Nos. 9781 and 10545 of 1986.
G.L. Sanghi, P.P. Rao, R. Mohan, R. Perumal, V. Krishna murthy, M.N. Krishnamani, V. Sekhar, K.V. Vishwanathan, T. Raja, S.R. Setia, P. Chaudhary, A. Mariarputham and M.A. Krishnamurthy for the appearing parties.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
In these appeals by special leave, the legality of the judgment of the Madras High Court dated 7 July 1987 quashing the promotions made to the cadre of professors in law colleges in the State of Tamil Nadu has been called into question.
The appeals arise in the following circumstances: During the period from 197 1 to 1982 the Government appointed temporary junior professors in different law colleges in the State.
The appointments were made under Rule 10(a)(i)(1) of the Tamil Nadu State and SubOrdinate Services Rules, 1955 (Viz.
Preliminary and The General Rules) (hereinafter called 'the Rules ').
In 1979 the State Public Service Com mission invited applications for regular appointment of junior professors.
The temporary junior professors and others applied for the posts.
The Public Service Commission selected 25 candidates out of whom 21 were already working as temporary junior professors.
The selected candidates were arranged in the list called "approved list '. ' in the order of merit.
The list was prepared by the Public Service Com mission on 16 August 1983.
It was approved by the Government 'on 9 December 1983.
On 27 June 1985 the State Government made an order regularising the services of those 21 junior professors.
Their services were regularised with effect from the dates of original appointments as temporary junior professors.
On 10 September 1986 some of the junior professors were promoted and appointed as professors in the law colleges.
promotion was challenged before the Madras High Court on the ground that the claim of the seniors has been over looked ' It, was urged before the High Court that once the temporary services have been regularised retrospectively with effect from the date of entry in the service, the seniority should be reckoned by giving the benefit of regu larised service 621 notwithstanding the ranking in the approved list prepared by the Public Service Commission.
The High Court accepted that plea and queshed the promotion of professors and directed the Government to make a proper order of promotion in the light of the views expressed in the judgment.
The correctness of the judgment of the High Court has been assailed in these appeals.
We must first outline the necessary statutory provisions bearing on the question raised.
Section 10(a)(i)(1) provides as follows: "10.
Temporary appointments: (a)(i)(1) Where it is necessary in the public interest owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the ap pointing authority may temporarily appoint a person, otherwise than in accordance with the said rules.
Rule 22 so far as relevant reads: "Reservation of Appointments Where the Spe cial Rules lay down that the principle of reservation of appointments shall apply to any service, class or category, selection for appointment thereto shall with effect on and from the 7th June 197.1, in cases such selec tion is made by the Commission, and 8th Novem ber 1971, in other cases, be made on the following basis (a) The unit of selection for appointment, for the purpose of this rule, shall be one hun dred, of which ,eighteen shall be reserved for the Scheduled Castes and the Scheduled Tribes and thirty one shall be reserved for the Backward Classes and the remaining fifty one shall be filled on the basis of merit.
(b) The claims Of members of the Scheduled Castes and the Scheduled Tribes and the Back ward Classes shall also be considered for the fifty one appointments, which shall be filled on the basis of merit; and where a candidate 622 belonging to a Scheduled Caste, Scheduled Tribe or Back ' ward Class is selected on the basis of merit, the number of posts reserved for the Scheduled Castes and the Scheduled Tribes or for the BackWard Classes, as the case may be, shall not in any way be affected.
XXXXX XXXX XXXX Rule 23, so far.
as material, is as follows: "23(a)(i) Date of Commencement of probation of persons first appointment temporarily If a person appointed temporarily either under sub rule (a) or sub rule.
(d) of rule 10 to fill a vacancy in any service, class or cate gory otherwise than in accordance with the rules governing appointment thereto, such vacancy being a vacancy which may be filled by direct recruitment, is subsequently appointed to the service, class or category in accord ance with the rules, he shall commence his probation; if any, in such category either from the date of his first temporary appoint ment or from such subsequent date, as the appointing authority may determine.
XXXXX XXXXX XXXXX Provided that on the date so determined, the person possesses all the qualifications pre scribed for appointment to the service, class or category, as the case may be.
(ii) A person who commences probation under clause (i) shall also be eligible to draw increments in the time scale of pay applicable to him from the date of commencement of his probation.
Where commencement of probation is ordered from a date earlier than the date of the order and if this has not been enabled by relaxation of any rule, he shall draw incre ments, including arrears, in the time scale Of pay applicable to him from such ' earlier date.
The appointing authority shall include a provision to this effect while issuing orders in all such cases.
Rule 35 omitting immaterial words, is in these terms: "35(a) The seniority of a person in a service, class or cate 623 gory or grade shall unless he has been reduced to a lower rank as a punishment, be determined by the rank obtained by him in the list of approved candidates drawn up by the T.N.P.S.C. or other appointing authoritY, as the case may be, subject to the rule of reser vation.
where it applies.
The date of com mencement of his probation shall be the date on which he joins duty irrespective of his seniority.
" , It is under these Rules the Public Service Commission invit ed applications for selecting candidates for direct recruit ment to the cadre of Assistant professors in Law.
The Public Service Commission prepared the list of selected candidates by following the reservation provided under rule 22.
The list was approved by the State Government. ' Rule 35(a) states that seniority of a person ' be determined by the rank 'obtained by him in the list of approved candidates drawn by the Public Service Commission subject to rule of reservation where it applies.
The contention urged for the respondents, is.
that since their temporary service as junior professors were regula rised, the regularised service should count for the purpose of determining, their seniority and not the rankings in the select ,list approved by the Government.
We find little substance in it.
The order of regularisation is in these terms: "ORDER DATED 27.6.1985 In G.O Ms. No. 2288 Education dated 9.12.1983 the Government approved the selection made by the Tamil Nadu Public Serv ice Commission of the 25 candidates mentioned therein for appointment by direct recruitment as Junior Professor in the Tamil Nadu 'Legal Educational Service These 25 candidates were appointed temporarily as from their taking charge 'in G.O.
Ms. No. 897 Education dated 11.7.
The Government have however, decided to appoint them, regularly with effect from, the dates on which, they were declared fully qualified to hold the post of Junior professor in the Law Colleges in Tamil Nadu prior to their selection by the Tamil.
Public.
Service.
Commission and appointment as Junior ,Profes sors,in Law Colleges with reference to their selection.
The Government accordingly direct that the services of the 21 individuals men tioned in 624 the Annexure to this order as Junior Profes sors in the Tamil Nadu Legal Educational Service, be regularised with retrospective effect from the dates noted against them.
The inter se seniority of the 21 candi dates.indicated in the annexure is in accord ance with the seniority fixed by the Tamil Nadu Public Service Commission.
The inter se seniority position will not be affected in any way with reference to the dates 'of regulari sation mentioned in column 3 of the annexure.
Under Rule 23(a)(ii) of the General Rules for State and Subordinate Services, the incum bents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date.
The increments already sanctioned to them, for their services as temporary.
junior professors prior to regular appointment, is ratified.
XXXXX XXXXX ' ' The first paragraph of the order refers to the selection of 25 candidates by the Public Service Commission for ap pointment as Junior Professors in the ' law colleges and their appointment with effect from their ' taking charges.
The second paragraph of the order deals with the regularisa tion of the services of/21 candidates out of 25 appointed.
The Government directed that the services of the 21 Junior Professors specified in the order be regularised with retro spective effect from the date noted against them.
In the third paragraph it is stated that the inter se seniority of the 21 candidates is in accordance with the seniority fixed by the Public Service Commission and the inter se seniority position will not be affected in any way with reference to the dates of regularisation of their services.
The paragraph four of the order deals with the rights of the candidates to draw increments under rule 23(a)(ii) in the service rendered as temporary Junior Professors.
The High Court has stated that Rule 35(a) could not have been properly invoked by the State Government after the regularisation of :he services of the candidates and it would be against the very concept of order of regularisa tion.
It has been pointed out that by regularisaion the period of temporary service has been converted into a period of regular service and a deeming, fiction is introduced that the candidates whose services have been regularised retro spectively must be 625 treated for all purposes as being in regular service from the respective dates of regularisation.
In our opinion, the view.
expressed by the.
High Court not only runs counter to the terms of the order of the.
regularisation but also is inconsistent with Statutory principle of determining seniority under Rule 35(a).
In the first place the order of regularisation of the services 'of the candidateS expressly states that the inter se seniority of, the candidates would be in accordance with the rankings in the approved list prepared by the Public Service Commis sion and will not be affected in any way by the date of regularisation of services.
When the ' order of regularisa tion of temporary service itself denies such service for the purpose of determining seniority, the Court cannot count that service for the purpose of seniority.
Secondly, Rule 3.5(a) provides for determining the inter se seniority of the candidates selected by the Public Service Commission.
It states that the seniority of a person in a service, class or category or trade shall be determined unless he has been reduced to a lower rank as a punishment, by the rank ob tained by him in the list of approved candidates drawn by the Public Service Commission or other appointing authority as the case may be '.
Since the parties in these cases ap peared for selection before the Public Service Commission for regular recruitment as Junior Professors, the list of approved candidates prepared by the Public Service 'Commis sion in the order.of merit and accepted by the Government should be the basis for determining their inter se seniori ty.
It is not open to the parties to claim that their tempo rary service as Junior Professors upon regularisation should be counted for the purpose of determining the seniority in the cadre.
There is no rule supporting such contention.
The services rendered in the temporary post is available either for earning increments or for commencement of probation.
That would be clear from Rule 23(a).
Consistent with the Rule 23(a), the Government in the order of regularisation has directed that the incumbents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date.
The increments already sanctioned to them during their services as tempo rary Junior Professors prior to.regular appointment has been ratified by the said order.
The High Court was plainly in error in ignoring the statutory Rules and the terms and conditions of the order of regularisation of services.
Apart from that, Rule 10(a)(i)(1) provides for making of temporary appointments when it is necessary in the public interest to do so owing to an emergency which has arisen for filling a vacancy immediately.
Such appointments are made otherwise than in accor 626 dance with the procedure prescribed under the Rules.
In the instant case the respondents were appointed temporarily and otherwise than in accordance with 'the Rules.
They were later selected along with others for direct ,recruitment.by the Public Service CommisSion.
They were not entitled to count their temporary service for seniority.
In A.P.M. Mayakutty etc, vs Secretary, Public Service Department etc., at 942 this Court observed that the serv ices rendered by the applicants under Rule 10(a)(i)(1) cannot be considered for the purpose of seniority as such appointment is a matter of stop gap, emergency or fortuitous arrangement.
The present case cannot ' be an exception to this principle even though their temporary services have been regularised, since regularisation 'was only for limited purposes.
In any view of the matter the decision of the High Court cannot be sustained.
In the result the appeals are allowed and the impugned judgment is set aside with no order as to costs.
V.P.R. Appeals allowed.
| The Government appointed temporary junior professors in different law colleges in the State under Rule 10(a)(1)(1) of the TamilNadu State and Subordinate Services Rules, 1955 during 1971 1982.
In 1979 the State Public Service Commission invited applications for regular appointment of junior professors.
The temporary junior professors and others applied for the posts.
The Commission selected 25 candidates out of whom 21 were already working as temporary junior professors.
On 16.8.1983, the selected candidates were arranged in the list called "approved list" in the order of merit prepared by the Commission which was approved by the Government on 9.12.1983.
On 27.6.1985 the State Government regularised the serv ices of the 21 junior professors with effect from 'the dates of original appointments as temporary junior professors.
Some of the junior professors were promoted on 10.9.1986 and appointed as professors.
The respondents challenged that promotion before the.
High Court contending that once the temporary services were regularised retrospectively with effect from the date of entry in the. service, the seniori ty should he reckoned by glvlng the benefit of regularised service notwithstanding the ranking in the approved list.
The High Court allowing the writ petitions directed the Govern 619 ment to make a proper order of promotion in the light of the views expressed in the judgment, against which appeals were made in this Court.
Allowing the appeals, this Court, HELD: 1.
The order of regularisation of the services of the candidates expressly States that the inter se seniority of the candidates would be in accordance with the rankings in the approved list prepared by the Public Service Commis sion and will not be affected in any way by the date of regularisation of services.
When the order of regularisation of temporary service itself denies such service for the purpose of determining seniority, the Court cannot count that service for the purpose of seniority.
[625B C] 2.
Since the parties in these cases appeared for selec tion before the Public Service Commission for regular re cruitment as Junior professors, the list of approved candi dates prepared by the Public Service Commission in the order of merit and accepted by the Government should be the basis for the determining inter se seniority.
It is not open to the parties to claim that their temporary service aS junior professors upon regularisation should be counted for the purpose of determining the seniority in the cadre.
[625D E] 3.
Rule 10(a)(i)(1) provides for making of temporary appointments.
Such appointments are made otherwise than in accordance with the procedure prescribed under the Rules.
[625H 626A] 4.
In the instant case, the respondents were appointed temporarily and otherwise than in accordance with the Rules.
They were later selected along with others for direct re cruitment by the Public Service Commission.
They were not entitled to count the temporary service for seniority.
The services rented by the applicants under Rule 10(a)(i)(1) cannot be considered for the purpose of seniority as such appointment is a matter of stop gap, emergency or fortuitous arrangement.
Even though their temporary services have been regularised, since regularisation was only for limited purposes.
[626A C] A.P.M. Mayakutty etc.
vs Secretary, 'Public Service Department etc.
, at 942, followed.
The services rendered in the temporary post is avail able either for earning increments or for commencement of probation.
[625E F] 620
|
minal Appeal No. 240 of 1960.
Appeal by special leave from the judgment and order dated November 25, 1958, of the Punjab High Court in Criminal Appeal No. 114 of 1954.
Jai Gopal Sethi, C. L. Sareen and R. L. Kohli, for the appellant.
N. section Bindra, R. H. Dhebar and D. Gupta, for respondent.
August 30.
The Judgement of the Court was delivered by SARKAR, J.
The appellant Payare Lal was the Tehsildar of Patiala.
He and Bishan Chand, a Patwar. clerk of the Tehsil Office, were prosecuted for offences under s.5(2) of the Prevention of 330 Corruption Act, 1947.
The Criminal Law Amendment Act, 1952 (Act XLVI of 1952), to which it will be convenient hereafter to refer as the Act, required the trial to be held by a special Judge appointed under it and in accordance with certain provisions of the Code of Criminal Procedure mentioned in section 8 of the Act.
The Principal question in this appeal turns on the construction of sub section
(1) of this .section which we will later set out.
The trial commenced before section Narinder Singh the special Judge, Patiala.
He heard the evidence but before he could deliver a judgment he was transferred and was succeeded by section Jagjit Singh.
section Jagjit Singh did not recall the witnesses and hear the evidence over again, but proceeded without any objection from either side, with the trial from the stage at which his predecessor had left it and having heard the arguments of the advocates for the parties, delivered his judgment convicting both the accused of the offences with which they had been charged and passed certain sentences on them.
The accused appealed against their conviction to the High Court of Punjab.
The appeals came to be heard by Mehar Singh J., who,, though no point had been taken by the accused, himself felt considerable difficulty as to whether section Jagjit Singh had the power to decide the case on the evidence recorded by his predecessor and referred the matter to a larger bench taking the view that if the course followed was defective, the defect would be one of jurisdiction of the Court and could not be cured by the consent of parties.
The case was thereupon heard by a bench of that High, Court constituted by Gurnam Singh and Mehar Singh JJ.
who took different views.
Gurnam Singh J. held that section 350 of the Code applied to the trial before a special Judge in view of section 8(1) of the Act and under the terms of section 350, which we will later set out, section Jagjit Singh was entitled to proceed on the evidence recorded by his predecessor 331 section Narinder Singh, while Mehar Singh J., was of the opinion that section 8(1) of the Act did not make section 350 of that Code applicable to such a trial.
He also held that what section Jagjit Singh had done was not a matter of mere irregularity curable under section 537 of the Code.
The matter was then referred to Passey J., who agreed with Gurnam Singh J. On the question of section 537 of the Code, Gurnam Singh and Passey JJ.
expressed no opinion in the view that they had taken of section 8(1) of the Act.
The appeals were thereafter heard on the merits by Tek Chand J. who upheld the conviction of the appellant but reduced the sentence passed on him.
He,, however, acquitted the other accused Bishan Chand giving him the benefit of doubt.
The appellant has now come up to this Court in further appeal with special leave.
There is no appeal by the State against the acquittal of Bishan Chand.
There is no covntroversy that the general principle of law is that a judge or magistrate can decide a case only on evidence taken by him.
Section 350 of the Code is a statutory departure from this principle.
That section so far as material was at the date section Jagjit Singh decided the case in these terms : section 350.
Whenever any Magistrate, after having heard and recorded the whole or any part of the evidence in an inquiry or a trial, ceases to exercise jurisdiction therein, and is succeeded by another Magistrate who has and who exercises such jurisdictions, the Magistrate so succeeding may act on the evidence so recorded by his predecessor, or partly recorded by his predecessor and partly recorded by himself or be may resumption the witnesses and recommence the inquiry or trial It is only if this provision was available to section Jagjit Singh that the course taken by him can be supported.
332 As we have said earlier, section 8 of the Act makes certain provisions of the Code applicable to the proceedings before a special Judge The question is whether section 350 of the Code.
was one of such provisions.
The answer to this question will depend on the construction of sub ss.(1) and (3) of section 8 of the Act the material portions of which we now set out.
section 8 (1) A special judge may take cognizance of offences without the accused being committed to him.
for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 . for the trial of warrant ' cases by magistrates.
(3) Save as provided in sub section (1) . . the provisions of the Code of Criminal Procedure, 1898, shall, so far as they are not inconsistent with this Act, apply to the proceedings before a special Judge ; and for the purposes of the said provisions, the Court of the special judge shall be deemed to be a Court of session trying cases without a jury or without the aid of assessors. . . .
In substance these sub sections provide that a special Judge shall follow the procedure prescribed by the Code for the trial of warrant cases by magistrates and save to this extent.
, the provision ,, of the Code applicable to a Court of session, shall govern him as if he were such a Court subject to certain qualifications which are not relevant for the present case.
There is no controversy that section 350 of the Code is applicable only to magistrates and not a Court of session and cannot therefore be applied to a special Judge under sub section
(3) as it makes only those provisions of the Code applicable to him which would apply to a Court of session.
The only controversy is whether that section is applicable to a special Judge under sub s.(1) of section 8 of the Act.
If it is so applicable, it must be applied 333 though under sub section
(3) it is not applicable, for this sub section, is to have effect " 'Save as provided in subsection (1)".
The real question is, what is meant by the words "the procedure prescribed by the Code . . . for the trial of warrant cases by magistrates" In section 8(1) of the Act ? Does section 350 of the Code prescribe one of the rules of such procedure ? It is necessary however to point out that by an amendment made in the Act after judgment had been delivered in this case by section Jagjit Singh, it has been expressly provided that section 350 of the Code applies to the proceedings before a special Judge.
On the amended Act, therefore, the question that has arisen in this case, would no longer arise.
For reasons to be hereafter stated, this amendment clearly does not govern the proceedings before section Jagjit Singh and this case has to be decided without reference to the amendment.
Is was once held by the Madras High Court in In re, Vaidyanatha Iyer (1) that section 350 of the Code prescribed a rule of procedure for the trial of warrant cases as mentioned in section 8 (1) of the Act.
This seems to be the only reported decision taking that view.
All other decisions which have been brought to our notice take the contrary view.
Even in Madras, in In re Fernandez (2), a Full Bench of the High Court has now hold that section 350 of the Code was not applicable to a special Judge and has overruled In re Vaidyanatha Iyer (1).
That appears to be the position on the authorities.
It is true that section 350 of the Code is a provision applying to all magistrates and therefore, also to a magistrate trying a warrant case.
That however does not in our opinion decide the question.
We think it 'relevant to observe that it is a right of an accused person that his case should be decided by a judge who has heard the whole of it and we agree with the view expressed in Fernandez 's case(2) (1) ; A.I.R. (1954) Mad.
(2) 334 that very clear words would be necessary to take away such an important and well 'established right.
We find no such clear words here.
We turn now to the word used.
When sub section
(1) of section 8 of the Act talks of a procedure prescribed by the Code for the trial of warrant cases by magistrates it is reasonable to think that it has the provisions and the language of the Code in view.
When we look at the Code, we find that ch.
XXI is headed "of the.
Trial of Warrant Cases by Magi strates".
This chapter consists of sections 251 to 259.
Section 251 is in these terms : section 251 In the trial of warrant cases by Magistrates, the Magistrate shall, (a) in any case instituted on a police report, follow the procedure specified in section 251A; and (b) in any other case, follow the procedure specified in the other provisions of this Chapter.
The Code, therefore, expressly refers to sections 251 259 as containing the procedure specified for the trial of warrant cases by magistrates; this then,, is the procedure it prescribes for the trial of such cases.
It would be legitimate, therefore, to think that the Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrates" also meant only these sections of the Code and did not contemplate section 350 of the Code as a procedure so prescribed, though that section is applicable to the proceedings before a magistrate trying a warrant case.
It does not seem to us that the words "the procedure prescribed by the Code. . for the trial of warrant cases by magistrates" meant a procedure which may be followed by magistrates in all cases.
Further more section 350 occurs in a chapter of the Code which deals with general provisions relating to inquiries and trials and is not a provision which has been specifically prescribed by the Code for application to the 335 trial of warrant cases by magistrates, as are sections 251 to 259.
Again, section 350 of the Code cannot, without doing violence to the language used in it, be applied to the proceedings before a special Judge Clearly it cannot be, applied where its terms make such application impossible.
Now the section can be applied only when one magistrate succeeds another.
It lays down what the succeeding magistrate can do.
Now suppose one special Judge succeeds another.
How can he exercise the powers conferred by the section ? The section applies only when the predecessor is a magistrate.
The predecessor in the case assumed is however a special Judge.
Such a Judge is not a magistrate for the purpose of the Act, nor does the Act require that he is to be deemed to be such.
Section 8 (1) of the Act which only requires a special Judge to follow the procedure for the trial of a warrant case, cannot justify the creation of a fiction making the predecessor special Judge, a magistrate.
It is of some interest to note here that the amendment to the Act which expressly makes section 350 of the Code applicable to proceedings before a special Judge also provides that for the purposes of so applying the section, "a special Judge shall be deemed to be a magistrate".
Clearly, the legislature thought that unless such a fiction was created, the application of the section to the proceedings before a special Judge would create difficulties or anomalies.
Therefore also, the Act could not in our view, have intended that section 350 of the Code would be available to a special Judge as a rule, of procedure prescribed for the trial of warrant cases.
For all these reasons, we would prefer the opinion expressed by Mehar Singh J.
We think that under the Act, as it stood before its amendment as aforesaid, section 350 of the Code was not available when one special Judge succeeded another. 'we hold that section Jagjit Singh had no authority 336 under the law to proceed with the trial of the case from the stage at which section Narinder Singh left it.
The conviction by section Jagjit Singh of the appellant cannot be supported as he had not heard the evidence in the case himself The proceedings before him were clearly incompetent.
It is then said that this defect was a mere irregularity and the conviction of the appellant can, if sustainable on the evidence, be upheld under EA.
537 of the Code.
In regard to this section, it was said by the Privy Council in Pulukuri Kotayyam vs King Emperor (1), "When a trial is conducted in a manner different from that prescribed by the Code (as in N. A. Subramania Iyer 's case, 1901 L.R. 28 I.A. 257), the trial is bad, and no question of curing an irregularity arises but if the trial is conducted substantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves, as must nearly always be the case, a breach of one or more of the very comprehensive, provisions of the Code".
It seems to us that the case falls within the first category mentioned by the Privy Council.
This is not a case of irregularity but want of competency.
Apart from section 350 which, as we have said, is not applicable to the present case, the, Code, does not conceive of such a trial.
The trial offends the cardinal principle of law earlier stated, the acceptance of which by the Code is clearly manifest from the fact that the Code embodies an exception to that principle in section 350.
Therefore, we think that section .537 of the Code has no application.
It cannot be called in aid to make what was incompetent, competent.
There has been no proper trial of the case and there should be one.
(1) (1947) L.R. 74 I.A. 65, 75.
337 'Then it is said or,.
behalf of the appellant that we should not send the case back for a fresh trial but decide it ourselves on the evidence on the record.
Coming from the appellant, it is a somewhat surprising contention.
According to him, a point which we have accepted, there has realy been no proper trial of the case.
It would follow from this that there has to be one.
In the absence of such a trial we cannot even look at the evidence on the record.
Lastly, we have to say a few words on the amendment of the Act expressly making section 350 of the Code applicable to the proceedings, before a special Judge.
The amendment came long after the decision of the case by section Jagjit Singh and had not expressly been made retrospective.
It was said on behalf of the respondent, the prosecutor, that the amendment being 'in a procedural provision was necessarily retrospective, and, therefore, no exception can now be taken to the action taken by section Jagjit Singh.
Assuming that the rule contained in section 350 of the Code is only a rule of procedure, all that would follow would be that it would be presumed to apply to all actions pending as well as future : Kimbray vs Draper (1).
Such a retrospective operation does not assist the respondent 's contention.
Nor do we think it an argument against sending the case back for retrial that the special Judge now hearing the case would be entitled to proceed on the evidence recorded by section Narinder Singh in view of the amendment.
Whether he would be entitled to do so or not would depend on whether the amended Act would apply to proceedings commenced before the amendment.
It has to be noted that the impugned part of the proceedings was concluded before the amendment.
On this question, we do not propose to express any opinion.
In any event, under section 350 as it now stands a succeeding magistrate (1) 338 liar, power to resummon and examine a witness further.
We cannot speculate what the special Judge who tries the case afresh will think fit to do if section 350 of the Code is now applicable to the proceedings before him.
For all these considerations, we think it fit to send the case back for retrial.
We therefore, allow the appeal and set aside the conviction of the appellant and the sentence passed on him.
The case will now go back for retrial According to law.
| The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly.
The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government.
The Government appealed against the said award to the High Court.
During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated.
Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal.
If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it.
Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed.
The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly.
When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated.
In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.
|
Criminal Appeal No. 225 of 1978.
From the Judgment and order dated 19.4.1978 of the Punjab and Haryana High Court in Criminal Appeal No. 1106 of 1974.
A.N. Mulla, Mrs. Pravawati, Mrs. Urmila Kapur and Ms. section Janani for the Appellants.
R.S. Sodhi for the Respondent.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
After hearing Shri A.N. Mulla, Sr.
Advocate for appellants and Shri R.S. Sodhi, Counsel appear ing on behalf of the respondent and having carefully exam ined all aspects of the case in the light of the submissions made at the Bar, we have unhesitatingly come to the conclu sion that this appeal has to be allowed.
749 The four appellants before us Tota Singh, Dauli Singh, Mithu Singh and Mukhtiar Singh were tried by the Court of Sessions, Faridkot on charges under Section 302 IPC read with Section 34 IPC and Section 323 IPC read with Section 34 IPC.
After detailed consideration of the entire evidence adduced in the case, the learned Sessions Judge by his judgment dated May 30, 1974 acquitted the appellants of all the charges laid against them.
Against the said decision of the Sessions Judge, the State of Punjab preferred Criminal Appeal No. 1106 of 1974 in the High Court of Punjab and Haryana.
A Division Bench of the High Court by its judgment dated April 9, 1978 allowed the State 's appeal, set aside the order of the Sessions acquitting the appellants and convicted the appellants under Section 302 IPC read with Section 34 IPC as well as under Section 323 1PC read with Section 34 IPC.
On the first count all the appellants were sentenced to undergo rigorous imprisonment for life and on the second account they were ordered to undergo rigorous imprisonment for one year each with a further direction that the substantive sentence of imprisonment in respect of all the appellants shall run concurrently.
We do not propose to set out in extenso the facts of the case nor to discuss in detail the oral and documentary evidence adduced.
We say this for the reason that we are fully satisfied that the approach made by the High Court to a consideration of the appeal was wholly vitiated by a manifest illegality inasmuch as the High Court has acted in total disregard of the principles repeatedly laid down by this Court delineating the restricted grounds on which alone interference may be made by a Court of appeal with an order of acquittal passed by a lower Court.
The occurrence that led to the prosecution took place on July 19, 1973 at about 4 P.M. in village Bishmandi, Police Station Jaitu in District Faridkot.
The case of the prosecu tion is that the deceased Gurdev Singh accompained by Ajmer Singh P.W. 2 and Malkiat Singh P.W. 6 was going from the house of the Ajmer Singh to the house of the deceased on that fateful day.
While they were approaching the house of one Moda Singh Jat, the four appellants, all carrying a gandasa each, suddenly besieged them from behind the Cheli anwali Street raising a "lalkara" proclaiming that they were going to take their revenge for outraging the modesty of Malkiat Kaur and they attacked the deacased as well as Ajmer Singh and Malkiat Singh by inflicting gandasa blows on them.
It was alleged that this was a preplanned and concerted attack made by the appellants as a reappraisal for an inci dent of alleged rape of one Malkiagt Kaur by Ajmer Singh 750 (P.W. 2), Gurdev Singh (deceased) is said to have fallen down on the spot as a result of the blows inflicted on him and P.Ws. 2 and 6 are said to have suffered simple injuries due to the attack with gandasa.
According to the prosecution version on hearing the cries for help raised by P.W. 2 and P.W. 6, Kaur Singh, son of deceased Gurdev Singh came to the place of occurrence and thereupon all the four appellants ran away from the spot leaving P.W. 6 near Gurdev Singh, who was lying on the ground in an injured condition.
P.W. 2 is said to have gone to the Sarpanch and the Panch of the village and informed them about the incident.
Thereafter he returned to the scene of occurrence and himself along with P.W. 6 are said to have put Gurdev Singh on a bullock cart and got him admitted in the injured condition in the hospi tal.
P.W.2 and P.W.6 were also admitted in the same hospi tal.
Gurdev Singh was subsequently transferred to the Chris tan Medical College at Ludhiana, where he succumbed to his injuries on July 30, 1973.
The learned Sessions Judge after a careful analysis of all the facts and circumstances as disclosed by the evidence adduced in the case came to the conclusion that the testimo ny of Ajmer Singh P.W. 2 and Malkiat Singh P.W. 6 who were examined by the prosecution as eyewitnesses to prove the occurrence could not be safely accepted and acted upon as true.
The trial Judge set out in his judgment detailed and cogent grounds for arriving at the said conclusion.
In his opinion there was no proper explanation for the inordinate delay in reporting the crime to the police and there was also no adequate proof of any motive.
The learned Sessions Judge rejected the theory put forward by the prosecu tion 'that it was a pre planned attack made by the appellants with a view to avenge the alleged molestation of Malkiat Kaur by Ajmer Singh P.W. 2 by pointing out that if such had been really the case, the target of attack by the appellants would have been Ajmer Singh to whom only simple injuries were caused and not Gurdev Singh who had nothing to do with the alleged incident of molestation.
The learned Sessions Judge was inclined to accept the defence version that the appellants being 'siris ' had some trouble with P.W. 2 and P.W. 6 about the apportionment of 'batai ' and this might have led to their false implication in the case.
In the absence of any independent corroboration of the testimony given by the two alleged eye witnesses (P.W. 2 and P.W. 6), the learned Sessions Judge who had seen them giving evidence in the box was not impressed by their evidence specially having regard to the fact that both of them had been appear ing as prosecution witnesses in a large number of police cases.
The testimony of P.W. 2 and P.W. 6 having been found to be not worthy of belief, the 751 learned Sessions Judge acquitted the appellants on both the charges levelled against them.
The High Court has not found in its judgment that the reasons given by the learned Sessions Judge for discarding the testimony of P.W. 2 and P.W. 6 were either unreasonable or perverse.
What the High Court has done is to make an independent reappraisal of the evidence on its own and to set aside the acquittal merely on the ground that as a result of such reappreciation, the High Court was inclined to reach a conclusion different from the one recorded by the learned Sessions Judge.
This Court has repeatedly pointed out that the mere fact that the Appellate Court is inclined on a reappreciation of the evidence to reach a conclusion which is at variance with the one recorded in the order of acquittal passed by the Court below will not constitute a valid and sufficient ground for setting aside the acquittal.
The jurisdiction of the Appellate Court in dealing with an appeal against an order of acquittal is circumscribed by the limitation that no interference is to be made with the order of acquittal unless the approach made by the lower Court to the consideration of the evidence in the case is vitiated by some manifest illegality or the conclusion recorded by the Court below is such which could not have been possibly arrived at by any Court acting reasonably and judiciously and is, therefore, liable to be characterised as perverse.
Where two views are possible on an appraisal of the evidence adduced in the case and the Court below has taken a view which is a plausible one, the Appellate Court cannot legally interfere with an order of acquittal even it is of the opinion that the view taken by the Court below on its con sideration of the evidence is erroneous.
Tested in the light of the above principles, it must be held that the interference made in the present case by the High Court with the order of acquittal passed by the learned Sessions Judge was wholly unwarranted.
We accordingly, allow this appeal, set aside the judgment of the High Court and restore the judgment and order of the learned Sessions Judge acquitting the appellants of all the charges framed against them.
M.L.A. Appeal allowed.
| On the date of incident when the deceased was returning from the 'house of PW 2 after reciting Bhagbat, where some other villagers including the respondent were also present, and reached near the house of the respondent he was assaulted by the respondent.
On hearing a hue and cry several villagers including PWs.
2, 3, 4 and 5 ran to the place and saw the deceased lying on the ground in a pool of blood with a head injury.
The respondent along with his mother and wife were tending the deceased and wiping out blood.
The deceased told the villagers that the respondent had assaulted him.
The respondent stated that during the day time his bell metal utensils had been stolen and he was keeping a watch for the thief, he saw a person coming inside his premises and think ing him to be a thief he dealt a lathi blow but subsequently discovered that it was the deceased.
The deceased also told his wife that he had been assaulted by the respondent.
On the basis of the evidence on record the trial court convict ed and sentenced the respondent under section 304 Part Il of the IPC.
On appeal the High Court accepted the defence plea and held that the respondent had not committed any offence and was protected under section 79 of the IPC and acquitted him.
Allowing the appeal of the State, 786 HELD: 1.
The judgment of acquittal entered by the High Court was apparently erroneous and has caused manifest miscarriage of justice.
It is surprising that the High Court should have given credence to the defence plea of mistake of fact under section 79 of the IPC 1860.
[787E F] 2.
Under section 79 of the IPC although an act may not be justified by law, yet if it is done under a mistake of fact, in the belief of good faith that it is justified by law it will not be an offence.
The question of good faith must be considered with reference to the position of the accused and the circumstances under which he acted.
In view of section 52 of the IPC "good faith" requires not logical infallibility but due care and attention.
The question of good faith is always a question of fact to be determined in accordance with the proved facts and circumstances of each case.
It may be laid down as general rule that an alleged offender is deemed to have acted under that state of things which he in good faith and on reasonable grounds believed to exist when he did the act alleged to be an offence.
Section 79 is attracted where the circumstances showed that the accused acted under a bona fide belief that he was legally justified in doing the act owing to ignorance of the existence of relevant facts, or mistake as to them.
[789A E; 790A] Rattan Lal and Dhirajlal 's Law of Crimes, 23rd edn., p. 199 and Russel on crimes, vol.
1, p. 76; 79 relied upon and Emperor vs Jagmohan Thukral & Anr., AIR (1947) All. 99, Dhara Singh vs Emperor, AIR (1947) Lahore 249 and Chiranji vs State, AIR (1952) Nag. 282, distinguished.
But the present case was not the one where a person being ignorant of the existence of the relevant facts or mistaken as to them is guilty of conduct which may produce harmful result which he never intended.
There was complete absence of good faith on the part of the respondent.
Un doubtedly the deceased and the respondent were having strained relations.
From the dying declaration as well as the extrajudicial confession it is apparent that the de ceased after the recital of Bhagbat had gone near to the pond to take the bell metal utensils.
Apparently, the re spondent was waiting for an opportunity to settle the ac count when he struck the deceased with the lathi blow and there was no occasion for him in the circumstances proved to have believed that he was striking at a thief.
Even if he was a thief, that fact by itself would not justify the respondent dealing a lathi blow on the head of the deceased.
The deceased had not effected an entry into the house nor he was anywhere near it.
It appears that the respondent stealthily followed him and took the opportunity to settle score by dealing him with lathi 787 with great force on a vulnerable part of the body like the head which resulted in his death.
There is no suggestion that he wielded the lathi in the right of self defence.
The respondent, therefore, must face the consequences.
Although it cannot be said from the circumstances appearing that the respondent had any intention to kill the deceased, he must in the circumstances be attributed with knowledge when he struck the deceased on the head with a lathi that it was likely to cause his death.
Therefore, the respondent is convicted under section 304 Part I1 of the IPC and sentenced to undergo rigorous imprisonment for three years.
[791C G]
|
l Appeal No. 1041 of 1965.
Appeal from the judgment and decree dated August 9, 1962 of the Bombav High Court, Nagpur Bench, in Letters Patent Appeal No. 12 of 1961.
section V. Natu and A. G. Ratnaparkhi, for the appellant.
S.N. Kherdekar and M.R.K. Pillai, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by certificate granted under article 133 (1)(a) and (b) of the Constitution is directed against the judgment of the High Court of Judicature at Bombay, Nagpur Bench, in a Letters Patent appeal allowing the appeal and restoring the decree made in favour of the plaintiff Ganpatlal respondent before us and hereinafter called the respondent by the Trial Court as confirmed by the District Court.
The facts relevant for the determination of the points raised before us are as follows: The respondent, Ganpatlal, was the owner of Field Survey No. 56, measuring 25 acres 4 gunthas, in Yeotmal District.
It appears that the respondent used to lease the land to the defendant Dewaji appellant before us and hereillafter called the appellant on yearly lease.
For the year 1950 51 he gave the land to the appellant on the condition that at the end of the year the lease will stand determined and the appellant will hand over possession.
On May 7, 1951, the respondent served a notice on the appellant requiting him to vacate the land in suit.
The appellant however, continued to remain in possession.
Thereupon the respondent filed a suit on September 17, 1951.
praying for possession, damages and mesne profits, On November 15, 1951, the Berar Regulation of Agricultural 575 Leases Act, 1951 (Madhya Pradesh No. XXIV of 1951) hereinafter called the 1951 Act came into force, section 16 of which provides as follows: "Except as otherwise provid.ed in this Act, no Civil Court shall entertain any suit instituted, or application made, to obtain a decision or order on any matter which a Revenue Officer is by or under this Act, empowered to determine, decide or dispose of.
" One of the pleas which the appellant took was that he had been recorded as a 'protected tenant ' under the 1951 Act and that the Civil Courts had no jurisdiction to eject him in view of 8 of that Act.
The Trial Court held that the appellant was not a protected tenant under section 3(3) of the 1951 Act and the Civil Court had , jurisdiction.
The appellant then appealed to the District Judge and the Additional District Judge held that the Civil Court had jurisdiction.
He observed that "there is nothing in this section (section 16 of the 1951 Act) to suggest that the powers of the Civil Court were in any way curtailed in regard to the question whether a particular person was a tenant or not under section 3 of the Act.
Moreover, there is nothing in that Act to show that it was intended to apply to suits which were pending at the date when this Act came into force.
" By the time the appeal was heard by the Additional District Judge, section 16 of the 1951 Act had been substituted by sections 16.
I6 A and 16 B by the Berar Regulation of Agricultural Leases (Amendment) Act, 1953 hereinafter called the i953 Act.
These.
sections run as follows: "16(1) Whenever any question arises whether any transaction between a landholder and a person claiming to be his lessee is a lease within the meaning of this Act, such question shall be decided by the Revenue Officer.
(2) In deciding the question referred to in subsection (1) the Revenue Officer shall, notwithstanding anything contained in section 92 of the , or in section 49 of the Indian .
or in any other law for the time being in force, have power to inquire into and determine the real nature of the transaction and shall be at liberty, notwithstanding anything contained in any law as aforesaid to admit evidence of any oral agreement or a statement or unregistered document with a view to such determination.
(3) Any decision of the Revenue Officer under this section shall be binding on the parties to the proceedings and persons claiming through them.
576 16 A (1 ) Whenever any question as is referred to in section 16 arises before a Civil Court in any suit or proceeding, the Court shall, unless such question has already been determined by a Revenue Officer, refer the question to the Revenue Officer for decision and shall stay the suit or proceeding so far as it relates to the decision of such question.
(2) The Civil Court shall accept the decision of the Revenue Officer on the question and decide the suit or proceeding before it accordingly.
16 B: Except as otherwise provided in this Act, no Civil Court shah entertain any suit instituted, or application made, to obtain a decision or order on any matter which a Revenue Officer is by or under this Act, empowered to determine, decide or dispose of.
" Before the Additional District Judge the appellant relied on these sections and asserted that the determination of the question whether a person is a tenant or not was, under the 1953 Act, a matter entirely within the jurisdiction of the Revenue Courts and the jurisdiction of the Civil Courts had been ousted.
The learned Additional District Judge repelled the argument and held that the 1953 Act did not affect pending proceedings.
The learned Additional District Judge thereupon dismissed the appeal.
The appellant then appealed to the High Court.
The appeal first came up for hearing before Vyas, J.
By an order dated August 21, 1957, he held that in view of the amendments made by the 1953 Act, "it is not for the Civil Court to ' decide but for the Revenue Officer to determine whether in the year 1951 52 also the defendant was paying to his landlord every week by way of rent one third share in the produce of the garden and was his lessee for that year also." He further observed that "if the answer to this question is in the affrmative, the defendant would be entitled to all the benefits of a protected tenancy, as observed by the learned Chief Justice in Paika vs Rajeshwar(1). ' ' In the result he set aside the judgment and decree passed by the learned Additional District Judge and directed "that the record and proceedings in this case be sent to the Revenue Officer that is, the SubDivisional Officer, Yeotmal, and the said Revenue Officer is directed to decide whether the defendant 's averment is right or otherwise, namely, that even after the expiry of the year 1950 51, that is, even after 31st March, 1951, the defendant used to pay to his landlord, the plaintiff, every week by way of rent one third share F in the produce of the garden.
The decision of the Revenue Officer (1) 577 shall be subject to the usual course of appeal and revision, and.
when the question which is referred to the Revenue Officer by this judgment is finally decided by the highest Revenue Authority, the finding shall be communicated to this Court.
Until such time that this Court receives a finding upon the question mentioned above from the highest Revenue Authority, this appeal shall stand stayed.
It shall be disposed of by this Court after the finding of the highest Revenue Authority is received by it." The Revenue Court then remitted the finding.
The Commissioner, which was the last Revenue Court, gave a finding confirming the one as given by the Sub Divisional Officer that the appellant was paying rent to the respondent for the year 1951 52.
The appeal was then heard by Badkas, J.
It was argued before him that Vyas, J., should not have referred the issue to the Revenue Officer for decision under section 16 of the 1951 Act, but Badkas, J., held that it would not be appropriate for him to sit in judgment over the decision given by Vyas, J., and that the reference made by Vyas, J., under section 16 of the 1951 Act had to be accepted.
Accepting the finding of ,the Revenue Courts, Badkas, J., held that the respondent was not entitled to eject the appellant.
He further held that it was not necessary to decide whether the 1951 Act was retrospective or not as the 1951 Act came into force during the.year in which the defendant held survey numbers in question as lessee.
He accordingly allowed the appeal.
Having obtained leave, the respondent appealed under the Letters Patent.
It was urged before the Letters Patent Bench on behalf of the appellant that the Bench could not deal with the question whether the 1953 Act applied to pending proceedings on the ground that this point had not been argued before the learned Single Judge.
The Bench found no substance in this contention as the point had been raised before the learned Single Judges.
The Bench further held that there was no bar to the question of applicability of the 1953 Act being allowed to be raised.
Dealing with the merits, the Bench held that "taking the scheme of the Act into account and the fact that there is no section in the Act which makes the Act applicable to pending proceedings, it is at once clear that it was not intended to affect pending proceedings.
Pending proceedings must continue unaffected by the provision of the Act and whatever quest.ions arose in those proceedings must be decided by the Civil Courts.
" The Bench then accepting the finding of the Civil Courts, held that there was no defence to the suit and the suit must succeed.
The Bench also repelled the argument that it was not open to R to consider the entire merits of the Second Appeal as the leave had 578 been given by Badkas, J., and not by Vyas, J.
The Bench observed that there was no substance in the contention since the judgment of Vyas, J., was never open to the appeal it being an interlocutory judgment.
The learned counsel for the appellant contends that sections 16, 16A and 16B, as substituted by the 1953 Act, had clearly ousted the jurisdiction of the Civil Courts and Vyas, J, was right in sending the case to Revenue Courts for decision on the question whether the appellant was a tenant in the year 1951 52 or not.
He stresses the word "whenever" appearing in section 16 and says that this is a wide word and no limitation can be placed on it.
In our view there is no substance in this contention.
The first point to be noticed in this connection is that the 1953 Act came into force after the Trial Court had decreed the suit and an appeal was pending before the District Judge.
It cannot be disputed that if the Legislature intends to oust the jurisdiction of Civil Courts, it must say so expressly or by necessary implication.
We cannot find any words in sections 16, 16A and 16B which can lead to the necessary inference that these provisions were intended to apply to appeals pending when the 1953 Act came into force.
It is true that the word "whenever" is wide but section 16A uses the words "suit or proceeding" and these words do not ordinarily indicate appellate proceedings.
Further, section 16B uses the word "entertain" and not the words "entertain or try any suit" as contained in section 15 (2) of the 1951 Act.
If the intention was to affect pending proceedings, the word "try" alongwith the word "entertain" would have been ' used in section 16B of the 1953 Act.
It seems to us that the intention was not to apply the 1953 Act to pending appeals.
If sections 16A and 16B do not bar the jurisdiction of the Civil Courts in this case the Letters Patent Bench was right in accepting the findings given by the Trial Court and the District Court in holding that the appellant was not a tenant for the year 1951 52.
The learned counsel then contends that it was not open to the Letters Patent Bench to decide .this question of the applicability of sections 16, 16A and 16B because Vyas, J., had decided to the contrary and had not given leave to appeal against his order.
It seems to us that the order of Vyas, J, was interlocutory and it was not necessary for the respondent to obtain separate leave to appeal against this order.
It was open to the Letters Patent Bench to decide all points decided by Vyas, J., in the interlocutory 'order dated August 21, 1957.
At any rate the same point was raised before Badkas, J. Further as held by this Court in Satyadhyan Ghosal vs Sm.
Deorajin Devi(1), "an interlocutory order which did not terminate the proceedings and which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from (1) ; 579 the final decree or order." Section 105(2), C.P.C., does not apply in this case, and therefore, the Letters Patent Bench was entitled to go into the validity of the order passed by Vyas, J. The learned counsel then urges that this was a new point and the Letters Patent Bench should not have allowed it to be taken.
But we agree with the Bench that the point had been raised before the learned Single Judges.
In view of this it is not necessary to decide whether a new point can be taken up in a Letters Patent appeal or not.
In the result the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
| The respondent leased his land to the appellant on yearly lease for the year 1950 51.
As the appellant did not vacate at the end of the year the respondent filed a suit for his eviction.
Pending the suit, the Bera Regulation of Agricultural Leases Act, 1951, came into force and the appellant contended that he continued to be a tenant for the year 1951 52, that he was a 'protected tenant ', and that the civil court had no jurisdiction to eject him.
The trial court rejected the contentions.
The appellant appealed and while the appeal was pending the Act was amended by the 1953 Act.
Sections 16A and 16B of the Act as amended provided, that whenever any question as to whether a transaction between a landholder and a person claiming to be his lessee was a lease, arose in any suit or proceeding, it should be referred to the revenue officer that the revenue officer 's decision shall be accepted by the civil court; and that no civil court shall entertain any suit to obtain a decision on a matter which the revenue officer was empowered to determine.
The appellant contended in the appellate court that the determination of the question whether he was the respondent 's tenant was a matter entirely within the jurisdiction of the revenue courts only.
The appellate court held that the 1953 Act did not affect pending proceedings, that the appellant was not the respondent 's tenant for the year 1951 52, and dismissed the appeal.
In second appeal, a single Judge of the High Court held that in view of the 1953 amendments, it was for the revenue courts to decide whether the appellant was the respondent 's lessee for the year 1951 52 and referred the matter to the revenue courts.
The revenue courts held that the appellant was paying rent to the respondent for the year 1951 52, and remitted the finding to the .High Court.
Another Single Judge of the High Court, before whom the matter came up for final disposal, accepted the finding and held that.
the respondent was not entitled to eject the appellant.
He also rejected the respondent"s contentions that the 1953 amendments were not applicable and that the matter should never have been referred to the revenue courts.
The respondent thereupon appealed under Letters Patent.
The Bench held that sections 16, 16A and 16B of the Act were not intended to affect pending proceedings, that the civil court could decide the question whether the appellant was the respondent 's tenant in 1951 52, and allowed the appeal accepting the findings of the trial court and the first appellate court that the appellant was not the respondent 's tenant for the year 1951 52.
In appeal to this Court.
HELD: (1) It was open to the Letters Patent Bench to decide all points decided by the single Judges even though no appeal was filed against the order referring the matter to the revenue courts, as that order 574 was only an interlocutory one to which section 105(2) C.P.C.; was not applicable.
[578H; 579A B.] Satyadhyan Ghosal vs Smt.
Deorajin Devi, [1960] 3 S.C.R. 590, (2) The intention of the Legislature was not to apply the 1953 Act to pending proceedings and therefore sections 16, 16A and 16B did not bar the jurisdiction of the civil.courts in the present case.
The 1953 Act came into force after the trial court decreed the suit and an appeal was pending in the first appellate Court.
The words 'suit or proceeding in section 16A do not ordinarily, indicate appllate proceedings and there is nothing in sections 16, 16A or 16B which can lead to the necessary inference that these provisions were intended to apply to appeals pending when the 1953 Act came into force.
Further, the words used in section 16B are 'entertain ' and not 'entertain and try. '.
If the intention was to affect pending proceedings the word 'try. ' would have been in the section along with the word 'entertain '.
[578 C El
|
Appeals Nos.
1091 1103 of 1964.
Appeals from the judgment and decree dated April 17, 1957 of the Patna High Court In Second Appeals Nos.
1447 of 1950 etc.
C.B. Agarwala and D. Goburdhun, for the appellant (in all the appeals).
U.P. Singh and K.C. Dua, for respondents Nos. 3 and 4 (in C.A. No. 1091 of 1964) respondent No. 3 (in C.A. No. 1092 of 1964) respondent No. 4 (in C.A. No. 1093 of 1964), respondent No. 7 (in C.A. No. 1094 of 1964), respondent No. 3 (in C.A. No. 1096 of 1964) respondents Nos. 4 and 5 (in C.A. No. 1095 of 1964) and respondent No. 4 (in C.As.
1099, 1100 and 1101 of 1964).
The Judgment of the Court was delivered by Hidayatullah, C.J.
These are 13 appeals by certificate against the common judgment in second appeal, April 17, 1957, of the High Court of Patna.
The appellants are the original plaintiffs.
The appellants had filed 12 title suits for ejectment in the court of the Second Munsif at Buxar.
Eleven suits were dismissed.
It was held that the plaintiffs had no title to suit lands.
One suit was compromised and decreed in terms of the compromise.
Two other suits one by Kedar Nath (one of the plaintiffs in the 12 title suits) and the other by one Udholal were filed for rent for 1335 1337 Fasli in respect of some lands comprised in Survey No. 3385 of Mouza Buxar against the tenant Ram Chhabi Lal.
The two rent suits were heard together.
Kedar Nath was held to be the landlord and not Udholal.
The suit of the former was decreed and that of the latter dismissed.
On appeals filed by Udholal the decision was reversed.
Appeals by Kedar Nath to the High Court were dismissed on the ground that in the title suits from which eleven appeals were filed it was held by the High Court affirming the decision of the courts below that Kedar Nath had no title.
Since the success of the last two appeals depended on whether Kedar Nath had title or not it is not necessary to refer to them at this stage.
We shall deal with the other eleven appeals first.
in these appeals, plaintiffs and defendants 1 to 3 are common.
Plaintiffs are purchasers from the mortgagees of the suit 206 lands who had purchased the suit lands in an auction sale in execution of the mortgage decree.
Defendants 1 to 3 were the former owners of these suit lands and the other defendants were either purchasers at auction sales in execution of money decrees against the owners or transferees from the auction purchasers.
The suits concern plots formed out of two Survey Nos. 3384 and 3385.
It is thus that the other two suits get connected with the title suits because in those suits the rent of certain plots from Survey No. 3385 was involved.
The history of the plots is as follows : One Laxmi Narain was the previous owner of these 2 Survey Nos.
On his death his daughter 's sons Ram Narain Ram, Sheonarain Ram and Gopal Ram inherited these Survey Nos.
alongwith other properties.
The first two sons were defendants 1 to 2 in the suits and defendant 3 is the son of Sheonarain Ram.
In 1930 the other two brothers sued Gopal Ram for a partition.
Preliminary decree was passed on April 15, 1931 and the final decree on September 10, 1932.
Half share in the property went to Gopal Ram and the other half jointly to the other two brothers.
The suit Survey Nos.
came to the share of Ram Narain Ram and Sheonarain Ram.
On April 27, 1931 Ram Narain Ram executed a mortgage of a half share in 27 plots made in the two Survey Nos.
and some other property with Buxar Trading Co operative Society.
On April 20, 1933, the Society released Ram Narain Ram 'S share in the 27 plots from the mortgage by a registered release deed.
On September 20, 1932 Sheonarain Ram filed a suit for 'partition against Ram Narain Ram.
The preliminary decree was passed in May 1933, that is to say, after the release by the Society.
The two brothers divided the two Survey Nos.
half and half between them.
No final decree in this partition suit seems to have been passed.
Devendra Nath (one of the defendants) obtained settlement of 3 k 13 d of land out of Survey No. 3384 from Sheonarain Ram on June 10, 1933 and in execution of a money decree against Ram Narain Ram and Sheonarain Ram purchased on August 13, 1934 the remaining portion of Survey No. 3384 and Survey No. 3385.
He obtained possession on February 27, 1935.
He had obtained attachment of the two plots before judgment, on April 23, 1934.
Devendra Nath disposed of 3 k 13 d by settling them on his wife and she was one of the defendants in the suits.
Devendra Nath 's title depends on whet.her the release by the Society was valid and binding on the Society or not.
If the release was valid and binding on the Society, the Society could not obtain a decree in respect of these two Survey Nos.
and bring them to sale.
207 This is one of the points for consideration in these appeals.
The High Court and the court below have decided unanimously that the release was binding on the Society and Devendra Nath obtained no title.
On April 26, 1934, that is to say, before Devendra Nath 's purchase but after attachment by him, the Society applied to ,.he
Registrar, Co operative Societies for a mortgage award.
In that application the surety of Ram Narain Ram was also joined.
On August 16, 1934 a money award was given against Ram Narain Ram and his surety.
On September 20, 1934 the money award was cancelled and a preliminary mortgage award was passed.
Admittedly the mortgage award had the force of a mortgage decree.
The final mortgage award was made on May 28, 1935.
The award ordered sale of all .mortgage properties including the half share of Ram Narain Ram in survey Nos. 3384 and 3385.
No mention was made of the earlier release of the Survey Nos.
by the Society by a registered deed.
In execution of the decree the Society purchased the two Survey Nos.
on February 7, 1936 and obtained possession o.n July 20, 1937.
One Dwarikanath had a money decree against the Society and he attached the two disputed Survey Nos. and brought them to sale.
The Buxar Central Co operative Bank purchased the two Survey Nos.
in auction sale on February 8, 1940 obtaining possession on July 5, 1941.
On March 28, 1943 the Society and the Bank went into liquidation.
The right, title and interest of the Society and the Bank was sold by the common Liquidator to Kedar Nath including the 27 plots made in the two Survey Nos.
Kedar Nath 's purchase was on March 20, 1943 but he took the sale benami in the name of Dhanesar Pandey, who was plaint.
ill No. 2 in the title suits while Kedarnath was plaintiff No. 1.
The title of the plaintiffs Kedar Nath and Dhanesar Pandey is based on this purchase.
After the release of the two Survey Nos.
by the Society, Ram Narain Ram and Sheonarain Ram, and after his purchase, Devendra Nath, made settlement of the plots to various persons.
They are the remaining defendants in the suits and respondents in the various appeals before us.
The High Court has given a chart of these persons and the dates of pattas but as nothing turns upon these details it is not necessary to mention them here.
The plaintiffs (Kedar Nath and Dhanesar Pandey) in these title suits asked for declaration of title and possession.
Their case was that the release was void and inoperative and not binding on the Society.
Therefore, the mortgage award and the auction sale was binding on Ram Narain Ram and all those who derive title 208 from him.
Their next contention is that.
, in any event, the transfers to the defendants were effected during the pendency of the mortgage award proceedings and were affected by the doctrine of lis pendens.
These two grounds were not accepted by the High Court and the courts below and it is these two grounds which were urged before us in these appeals.
The other side seeks to avoid the effect of lis pendens by pleading that the mortgage award was claimed mala fide against the suit plots after their release and, in any event, there was attachment of these plots before the petition for the mortgage award was made.
Before we deal with these two points it may be mentioned at once that neither ground of appeal applies to the transfers by Sheonarain who was not a mortgagor and who was not affected by the release deed made by the Society.
Mr. C.B. Aggarwal frankly conceded that the transfer by him could not be assailed and must stand.
He, therefore, did not press Civil Appeals Nos.
1091, 1092, 1093 and 1094 of 1964.
These appeals are accordingly dismissed with costs.
We may first consider whether the release was binding on the Society or not.
When Ram Narain Ram mortgaged the property to raise a loan from the Society of which he was a member, half share in the plots belonged to him because these plots had fallen in the preliminary decree to.
the share of his brother Sheonarain Ram and himself.
That preliminary decree was passed on April 15, 193 1.
The Society had fixed a ceiling on the amount which could be borrowed, at Rs. 3000/ .
The mortgage deed recited that the amount borrowed was Rs. 3000/ with interest at Actually Rs. 1890/ were given as a loan.
The release deed, releasing the suit plots was executed in pursuance of a resolution of the Society (Res.
No. 4 dated April 4, 1933).
The release stated thus: " . relinquished and released the properties, specified below, from the debt due to the said Ram Narain Ram, to the said society, entered in the said mortgage bond, in favour of Ram Narain Ram .
The said property shall not be made liable for any debt of the said society nor shall any incumbrance be recovered from the said property.
The said property shall come in possession of Ram Narain Ram.
The said Ram Narain Ram shall have right to sell the property to keep the same in whatever ways he likes.
The said society neither has nor shall have any objection thereto.
" 209 Why the release was granted by the Society was stated in the following words: " .
A petition was filed on behalf of the said Ram Narain Ram in the meeting of the members in the presence of all the members of the society for releasing some land from the said mortgage in order to repay the debt.
of Rs. 500/ forming part of the debt due by the said Ram Narain Ram to the said co operative society which was put up before all the members and accepted by them . ".
It appears that Ram Narain Ram did not pay the amount of Rs. 500/ to the Society and the Society considered itself free to include these two plots, notwithstanding the release, in their application for an award decree.
In our opinion the release was binding on the Society.
The argument.
in opposition to the binding nature of the release is that it was conditional on payment of Rs. 500/ .
This is no true.
No. doubt the motive for the release was the payment of Rs. 500/ to the Society promised by Ram Narain Ram, but the payment was not made a condition of the release.
There was no attempt to release this amount from Ram Narain Ram.
Therefore, the release being absolute and unconditional and by a registered deed must be treated as binding.
It is open to the promisee to waive the performance of any part of the contract or to release any property from the operation of a 'mortgage or charge.
If he wishes his rights to continue in the.
event of some condition simultaneously imposed on the promisor, he must see that the release is made dependent on the performance by the promisor of his part of the agreement.
Here the Society merely released the two plots without making the payment a condition precedent, and the release operated.
That, however, is not the end of the matter.
The Society filed on April 5, 1934 a petit.ion for a mortgage award before the Assistant Registrar, Co operative Societies.
The petition is headed 'Petition for mortgage decree '.
The petition mentioned that the mortgage was made on April 27, 1931 and that the amount secured was Rs. 3,000/ with interest at 121/2% per annum.
The petition then described the property mortgaged and it included plots Nos.
3385 and 3384.
The amount due on December 31, 1933 was said to be Rs. 2440/3.
The relief asked for was: "We the punches therefore pray that a decree may be passed by your honour against the said member and he may be directed under the decree to pay the debt, principal and interest, amounting to Rs. 2440/3/ within 3 months, that in case of non payment this order may be passed that the entire amount may be realized by 210 auction sale of the mortgaged property and that if the mortgaged property would not be sufficient for the satisfaction of the entire amount of the decree the punches of the committee be allowed to pray for passing a personal decree against the said member.
" When the Registrar made his order he overlooked that a mortgage award had to be pass.ed.
On August 16, 1934 he ordered that an award jointly with sureties be issued.
However, on September 2, 1934, .he corrected Iris earlier order thus: "S1. '6.
Read along with S1.
By mistake of the 2nd Asst.
simple award was issued instead of Mortgage award.
Issue mortgage award and ask the C.B. to return the simple award which will be cancelled here.
Syed Ozair.
D.F.A. Addl.
A.R. 2 9 34.
" After 'this mortgage award which had the force of a preliminary decree, the Society on December 16, 1934 resolved that a final mortgage decree be obtained from the Assistant Registrar, and a final decree was obtained and the property brought to sale on February 7, 1936 and purchased by the Society itself with the permission of the court executing the decree.
Possession was obtained on July 20, 1937.
Therefore, litigation in respect of this mortgage remained pending from April 5, 1934 to July 20, 1937.
Under Explanation to section 52 of the the whole of this period denoted pendency of the proceeding for purposes of application of the doctrine of lis pendens.
All the leases made by Devendranath were after the proceedings commenced.
Devendranath purchased the right title and interest of Ram Narain Ram on August 13, 1934.
His acquisition was prima facie hit by the doctrine of lis pendens.
Three arguments were advanced before us to meet this situation and we shall now deal with them seriatim.
The first argument is that there could be no lis pendens till August 16, when the money award was issued because a money suit for proceeding cannot lead to the application of the doctrine of lis pendens.
As a proposition of law the argument is sound but it is wrongly grounded on fact.
The proceeding was to get a mortgage award, the equivalent of a mortgage decree.
The Court made a mistake and treated it as a proceeding for a money decree.
When the court corrected its,order, the mortgage award related back to the petition as made and the whole of the proceeding must be treated as covered by the doctrine.
We cannot, therefore, accede to the suggestion that the doctrine did not apply; at any rate, on this suggested ground.
211 The second ground of attack is that before the proceedings commenced before the Registrar these fields had been attached and, therefore, the doctrine of lis pendens again cannot apply.
We are unable to accept this argument either.
If the property was acquired pendente lite, the acquirer is bound by the decree ultimately obtained in the proceedings pending at the time of acquisition.
This result is not avoided by reason of the earlier attachment.
Attachment of property is only effective in preventing alienation but it is not intended to create any title to the property.
On the other hand, section 52 places a complete embargo on the transfer of immovable property right to which is directly and specifically in question in a pending litigation.
Therefore the attachment was ineffective against the doctrine.
Authority for this clear position is hardly necessary but if one is desired it will be found in Moti Lal vs Karrab ul Din and others(1).
Lastly it was contended that the sale was by court auction and the doctrine of lis pendens would not apply to such a sale.
This point was considered in Samarendra Nath Sinha and Anr.
vs Krishna Kumar Nag(2) by one of us (Shelat, J.) and it was observed as follows : " .
The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to it so it must bind the person driving his right, title and interest from or through him.
This principle is well illustrated in Radhamadhub Holdar vs Monohar(3) where the facts were almost similar to those in the instant case.
It is true that section 52 strictly speaking does not apply to involuntary alienations such as court sales but it is well established that he principle of lis pendens applies to such alienations.
(See Nilkant vs Suresh Chandra(4) and Moti Lal vs Karrab ul Din(1). ' ' This ground also has no validity.
Lastly it was argued that if the fields were released from the operation of the mortgage they could not be made the, subject of a mortgage decree, and whatever was done in the mortgage proceedings was not of any consequence.
this there are two answers.
Firstly, the respondent before the Registrar (Ram Narain Ram) made no objection to ,the inclusion of the plots in the petition for a mortgage award.
Secondly, the doctrine of lis pendens applies irrespective of the strength or weakness of the case on one side or other.
See Gouri Dutt Maharaj vs Sukur Mohammed and Ors.(5).
There is, however, one condition that (1) 24 I.A. 170.
(3) 15 I.A. 97.
(2) ; (4) 12 I.A. 171.
(5) 75 i.
A. x65.
212 the proceedings must be bona fide.
Here no doubt the Society knew that the plots had been released from the mortgage, but it was also clear that the release was to enable Ram Narain Ram to dispose of some of the plots and pay Rs. 500/ to the Society.
This amount was never paid and the Society must have bona fide felt that the plots still remained encumbered.
In fact the attitude of Ram Narain Ram in not claiming that these plots be removed from the mortgage award shows that he too felt that this was the true position.
In Gouri Dutt Maharaj 's(1) case referred to by us, it was said that if the proceedings were bona fide, the applicability of section 52 was not avoided.
For the above reasons we are clear that the purchase by Kedarnath was protected by the doctrine of lis pendens, the prior transfer to the defendants notwithstanding.
In this view of the matter the judgment of the High Court cannot be sustained.
The appeals will, therefore, be allowed.
The judgment and decree of the High Court will be set aside and the suits of the appellant will be decreed with costs throughout.
In this Court the costs will be one set.
R.K.P.S. Appeals allowed.
(1) 75 X.A. 165 L 1 Sup./70 6 7 70 GIPF.
| One R executed a mortgage of his share in two survey Nos.
to a Cooperative Society.
On his application and in order to enable him to repay a sum of Rs. 500/ , the Society released the property in 1933, but R never paid the amount to the Society.
The Society filed an application for a mortgage award on April 5, 1934 and the Assistant Registrar made an award in the nature of a preliminary decree, on December 16, 1934.
Thereafter a final mortgage decree was passed by the Assistant Registrar and the two survey nos.
were brought to sale and purchased by the.
Society and possession was obtained on July 20, 1937.
Meanwhile, one D obtained attachment before judgment of the two survey nos., as the property of R, in a suit for money against R, and, in execution of the money decree, purchased the two survey nos.
on August 13, 1934.
In 1943, the Society went into liquidation and the liquidator sold the properties of the Society and the appellant bought the two.
survey nos.
He filed a suit for a declaration of his title and possession of the properties in the two, survey nos.
from various persons who were in possession of the properties under R and D.
The High Court dismissed the .suit.
In appeal to this Court, HELD: (1) The motive of the release, in 1933, of the properties by the Society in favour of R was the payment of Rs. 500/ by R to the Society, but it was not a condition Of the release.
Therefore, the release was binding on the Society.
[209 D E] (2) But R did not object to the inclusion of the items in the mortgage award.
Therefore, the Society must have bona fide felt that the properties remained encumbered.
[211 G] (3) The proceedings in respect of the mortgage were pending from April 5, 1934 to July 20, 1937.
The proceedings were for obtaining a mortgage award equivalent to a mortgage decree and not for a money decree.
The fact that they were attached before judgment in D 's suit does not affect the application of the doctrine of lis pendens.
Attachment is only effective in preventing alienation and does not create title to property.
If in fact, the property was.
acquired pendente lite, the acquirer is bound by the decree ultimately obtained.
Therefore, D 's purchase on August 13, 1934, was hit by the. doctrine.
of lis pendens in section 52 of the .
Since D 's purchase was hit by the doctrine the properties continued to be those of the Society and hence, the appellant was entitled to them.
[210 E, G H; 211 A C] 205 Samarendra Nath Sinha & Anr.
vs Krishna Kumar Nag, ; , followed.
Moti Lal vs Karrab ul Din & Ors.
24 I.A. 170 and Gouri Dutt Maharaj vs Sukur Mohammed and Ors.
75 I.A. 165, applied.
|
minal ' Appeal No. 93 of 1956.
Appeal by special leave from the judgment and order dated the April 14, 1955, of the Bombay High Court in Criminal Appeal No. 156 of 1955 and Criminal Revision Application No. 435 of 1955 arising out of Judgment dated the January 3,1955, of the Court of 636 the Additional Chief Presidency Magistrate, Bombay, in Case No. 9/p of 1954.
Purshottam Tricumdas, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellant.
C. K. Daphtary, Solicitor General of India, Porus A. Mehta and R. H. Dhebar, for the respondent.
February 12.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with special leave under article 136 of the Constitution raises the question whether the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 (Ordinance No. III of 1946) promulgated by the Governor General of India on January 12, 1946, was in operation on July 11, 1953, when the offence under section 7 read with section 4 thereof was committed by the appellant herein.
The appellant who was the accused No. 1 before the Additional Chief Presidency Magistrate 's Court, Bombay, was charged along with the accused Nos. 2, 3, 5 and 6 with having on or about July II, 1953, transferred by sale 10 High Denomination Bank Notes of the Denomination of Rs. 1,000 each to one Velji Lakhamshi Joshi for Rs. 1,800 at the rate of Rs. 180 per note and thus contravened the provisions of section 4 of the Ordinance and committed an offence punishable under section 7 of the Ordinance read with section 109 of the Indian Penal Code.
A preliminary objection was urged by the learned counsel for the appellant that the said Ordinance was not in operation at the date when the offence was alleged to have been committed and that therefore the prosecution was not maintainable.
This objection was overruled by the learned Presidency Magistrate and the trial ended in the conviction of the appellant along with the co accused of the offence with which they had been charged.
The appellant was sentenced to pay a fine of Rs. 8,000 and in default suffer six months ' rigorous imprisonment and the co accused of the appellant were awarded varying sentences of fine with which however we are not concerned.
The appellant took an appeal to the High Court of Judicature at Bombay being Criminal Appeal No. 156 637 of 1955.
The State of Bombay, the respondent herein, also filed an application for enhancement of the sentence, being Criminal Revision Application No. 435 of 1955.
The co accused of the appellant had also filed appeals against their convictions and sentences of fine imposed upon them and all these appeals and the application of the respondent were heard together by a Division, Bench of the High Court.
The High Court agreed with the learned Presidency Magistrate in regard to the finding of fact and held that the appellant had in fact transferred by sale 10 High Denomination Bank Notes of Rs. 1,000 each to the possession of Velji Lakhamshi and his act fell within the prohibition enacted in section 4 of the Ordinance.
The High Court also overruled the contentions which were urged before it in regard to the Ordinance having lapsed and ceased to be in operation before July 11, 1953, the date on which the offence was alleged to have been committed.
It accordingly confirmed the conviction recorded against the appellant by the learned Additional Chief Presidency Magistrate.
In regard to the sentence the High Court saw no ground for enhancing the same and confirmed the sentence of fine of Rs. 8,000 and in default six months ' rigorous imprisonment which had been awarded by the learned Presidency Magistrate to the appellant.
The appellant applied to the High Court for a certificate under article 134 (1) (c) of the Constitution.
The said application was however dismissed by the High Court with the result that he applied for and obtained from this Court special leave under article 136 of the Constitution.
The decision of this appeal turns on the construction of section 72 of the 9th Sch.
of the Government of India Act, 1935 (25 and 26 Geo.
42) and section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940 (3 and 4 Geo.
Section 72 of the 9th sch.
of the Government of India Act, 1935, read as follows: " The Governor General may, in cases of emergency, make and promulgate ordinances for the peace and good Government of British India or any part thereof, and any ordinance so made shall, for the 638 space of not more than six months from its promulgation, have the like force of law as an Act passed by the Indian Legislature; but the power of making ordinances under this section is subject to the like restrictions as the power of the Indian Legislature to make laws; and any ordinance made under this section is subject to the like disallowance as an Act passed by the Indian Legislature, and may be controlled or ,superseded by any such Acts.
" Section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, ran as under: " Section seventy two of the Government of India Act, (which, as set out in the Ninth Schedule to the Government of India Act, 1935, confers on the Governor General power to make Ordinances in cases of emergency) shall, as respects Ordinances made during the period specified in section three of this Act, have effect as if the words "for the space of not more than six months from its promulgation" were omitted; and, notwithstanding the provision in the said section seventy two that the power of making Ordinances thereunder is subject to the like restrictions as the power of the Indian Legislature to make laws (a) Ordinances may, during the said period, be made under that section affecting the Army Act, the Air Force Act, or the Naval Discipline Act; and (b) Section one hundred and eleven of the Government of India Act, 1935 (which exempts certain British subjects from certain Indian Laws) shall not apply to any ordinance made under the said section seventy two during that period.
" Section 3 referred to hereinabove was in the terms following: " The period referred to in the preceding sections is the period beginning with the date of the passing of this Act and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency which was the occasion of the passing of this Act.
" The India and Burma (Emergency Provisions) Act, 1940, was passed on June 27, 1940 , and was an Act to 639 make emergency provisions with respect to Government of India and Burma.
On April 1, 1946, was published in the Gazette of India Extraordinary His Majesty 's Order in Council called " The India and Burma (Termination of Emergency) Order, 1946 ".
By the said order the period of emergency referred to in section 3 of the India and Burma (Emergency Provisions) Act, 1940, was declared to have ended on April 1, 1946.
The period specified in section 3 of the said Act thus extended from June 27, 1940, to April 1, 1946.
The Ordinance in question was promulgated on January 12, 1946, and was therefore within the said period.
The argument which was addressed before us by the learned counsel for the appellant based on these provisions was (a) that as soon as the declaration that the emergency was at an end was made on April 1, 1946, the original position was restored and the Ordinance in question which had been promulgated in exercise of the emergency powers ipso facto lapsed when the emergency was declared to have ended, (b) that, in the alternative, section 72.
of the 9th Sch.
of the Government of India Act, 1935, having been thus restored with effect from April 1, 1946, one must look to its terms as they originally stood to justify the continuance of the ordinance in question after April 1, 1946, whensoever it may have been promulgated.
It will be useful at this stage to see what was the scheme provided in the Government of India Act, 1935, for enacting legislative measures.
It may be noted that the Act envisaged the establishment of the Federation of India.
Part II, ch. 3 provided for the constitution of the Federal Legislature which was to consist of two chambers known respectively as the Council of States and the House of Assembly.
The normal legislative procedure required a bill to be passed by both the Chambers of the Federal Legislature and assented to by the Governor General.
There was a distribution of legislative powers between the Federal Legislature and the Provincial Legislatures and the Federal Legislature was invested with the power to make laws for.
the whole or any part of British India or for any Federated State with respect to any of the matters enumerated 640 in the Federal Legislative List and any of the matters enumerated in the Concurrent Legislative List.
Power was however given, to the Federal Legislature, if the Governor General in his discretion declared by a "Proclamation of Emergency" that a grave emergency existed whereby the security of India was threatened, whether by war or internal disturbance, to make laws for a Province or any part thereof with respect to any of the matters enumerated in the Provincial Legislative List.
These were the powers of the Federal Legislature to enact legislative measures.
The Governor General was, however, conferred certain legislative powers in Part II, ch. 4.
Power was conferred upon him to promulgate Ordinances if at any time when the Federal Legislature was not in session he was satisfied that circumstances existed which rendered it necessary for him to take immediate action.
Ordinances thus promulgated were to have the same force and effect as Acts of the Federal Legislature assented to by the Governor General.
But every such Ordinance would cease to operate at the expiration of six months from the re assembly of the Legislature.
Similar power was conferred upon the Governor General to promulgate Ordinances if at any time he was satisfied that circumstances existed which rendered it necessary for him to take immediate action for the purpose of enabling him satisfactorily to discharge his functions in so far as he was required in the exercise thereof to act in his discretion or to exercise his individual judgment.
Such Ordinances also were to have the same force and effect as the Acts of the Federal Legislature assented to by the Governor General and were to continue in operation for such period not exceeding six months as may be specified therein but could by subsequent Ordinances be extended for a further period not exceeding six months.
Power was also conferred upon the Governor General if at any time it appeared to him that for the purpose of enabling him satisfactorily to discharge his functions in so far as he was required in the exercise thereof to act in his discretion or, to exercise his individual judgment it was essential that provision should be made by legislation, to enact I SUPREME COURT REPORTS 641 Governor General 's Acts which when enacted were to have the same force and effect as Acts of the Federal Legislature assented to by the Governor General.
These were the special legislative powers conferred upon the Governor General which could be exercised by him when the normal legislative procedure could not be resorted to.
It is worthy of note however that howsoever and under whatever circumstances the legislative powers vested in the Governor General were exercised by him, the Governor General 's Acts thus enacted and the Ordinances thus promulgated were equated with the Acts of the Federal Legislature assented to by the Governor General.
Part XIII enacted Transitional Provisions.
A period of time was bound to elapse between the commencement of Part III of the Act which related to the Governor 's Provinces and the establishment of the Federation and section 317 of the Act continued in force certain provisions of the Government of India Act with amendments consequential on the provisions of the Act set out in the 9th Sch.
thereof until the estab lishment of the Federation.
Section 72 above quoted formed part of the 9th Sch.
under the caption " Indian Legislature" and conferred upon the Governor General power to make and promulgate Ordinances for the peace and good Government of British India or any part thereof in cases of emergency.
Ordinances thus promulgated by the Governor General in exercise of the power thus conferred upon him were to continue in operation for the space of not more than six months from the date of their promulgation and were to have the like force of law as Acts passed by the Indian Legislature.
They were also equated with the.
Acts passed by the Indian Legislature by having resort to the normal legislative procedure set out in the Government of India Act.
Even though the Governor General 's Acts and the Ordinances promulgated by him were thus equated with the Acts passed by the Federal Legislature or the Indian Legislature as the case may be, the period of duration thereof had to be determined.
Every statute for which no time is limited is I 642 SUPREME COURT REPORTS [1957] called a perpetual Act, and its duration is prima facie perpetual.
It continues in force until it is repealed.
(Vide Craies on Statute Law, 5th Ed.
p. 374; Halsbury 's Laws of England, Hailsham Ed., Vol.
XXXI, p. 511, para.
If an Act contains a proviso that it is to continue in force only for a certain specified time, it is called a Temporary Act.
This result would follow not only from the terms of the Act itself but also from the fact that it was intended only as a temporary measure.
This ratio has also been applied to emergency measures which continue during the subsistence of the emergency but lapse with the cessation thereof.
It was therefore contended that Ordinances promulgated under the emergency powers vested in the Governor General would be in operation during the period of emergency but would cease to be in operation once the emergency was declared to have ended.
In the instant case before us the Ordinance in question was promulgated in exercise of the emergency powers vested in the Governor General under section 72 of the 9th Sch.
of the Government of India Act, 1935, and it was urged that the Ordinance thus promulgated would cease to be in operation after the emergency was declared to have ended on April 1, 1946, by the India and Burma (Termination of Emergency) Order, 1946, in spite of the words of limitation " for the space of not more than six months from its promulgation " having been omitted from section 72 by section 1(3) of the India and Burma (Emergency Provisions) Act, 1940.
Reliance was placed in support of this contention on the observations of Vardachariar C. J. in King Emperor vs Benoari Lall Sharma and others(1): " Legislation by Ordinance has no doubt been given the same effect as ordinary legislation and the ambit as to the subject matter is the same in both cases.
But there are two fundamental points of difference which have a material bearing on the present question: One is that by the very terms of s.72 of the Ninth Schedule to the Constitution Act, the operation of the Ordinance is limited to a period of (1) , 137.
643 six months (and even now it is only temporary, though the particular limit has been removed), and secondly, it is avowedly the exercise of a special power intended to meet an emergency." Zafrulla Khan J. also had expressed himself to the same effect in King Emperor vs Sibnath Banerjee (1): " The legislature can at any time enact a measure and such measure can remain in force without any limit of time; but the exercise of the Ordinance making power is limited in two ways (1) by the limitation as to the circumstances in which it can be exercised, and (ii) by the limitation as to the time during which any measure so enacted can remain in operation.
The existence of an emergency is a condition precedent to the exercise of the power.
The fact that the Court cannot go behind a declaration of emergency made by the Ordinance making authority cannot affect this question.
The power was intended to be availed of and could be availed of only in an emergency, whereas ordinary legislation is not governed by any such limitation.
Similarly, an Ordinance is necessarily of limited duration, whether under section 72 or under the terms of the India and Burma (Emergency Provisions) Act of 1940.
" An argument was accordingly addressed before us that even though the Ordinance in question had been promulgated during the period specified in a. 3 of the India and Burma (Emergency Provisions) Act, 1940, viz., between June 27, 1940, and April 1, 1946, and section 72 of the 9th Sch.
of the Government of India Act, 1935, was to be read with the omission of the words " for the space of not more than six months from its promulgation " therefrom, the effect of such omission was not to continue the duration of the Ordinance in question in any event beyond April 1, 1946.
The Ordinance lapsed or ceased to be in operation on the, declaration having been made on April 1, 1946, that the emergency had ended.
This argument however ignores the fact that whatever Governor General 's Acts were enacted or (1) , 12. 83 644 Ordinances promulgated by him in exercise of his special legislative powers or in exercise of the emergency_ power conferred upon him by section 72 of the 9th Sch.
of the Government of India Act, 1935, were all equated with the Acts of the Federal Legislature or the Indian Legislature, as the case may be, assented to by the Governor General.
If there was a limitation to be found in the Acts or the Ordinances themselves in regard to the duration thereof the same was to prevail.
But if no time was limited in the enactment itself for its duration it was to continue in force until it was repealed.
If by the operation of section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, the words " for the space of not more than six months from its promulgation " were omitted from section 72 during the period specified in section 3 of that Act, viz., June 27,1940 to April 1, 1946, there was no limitation of the period of duration of the Ordinance in question and the Ordinance having the like force of law as an Act passed by the Indian Legislature without any limitation on its duration was to continue in force until it was repealed.
The emergency under which the Governor General was invested with the power to make and promulgate Ordinances for the peace and good government of British India or any part thereof under section 72 was the condition of the exercise of such power, by the Governor General and did not impose any limitation on the duration of the Ordinances thus promulgated.
For determining the duration of such Ordinances one had to look to the substantive provisions of section 72 which in terms enacted and laid down the limitation of "not more than six months from its promulgation " on the life of the Ordinance.
If these words had not been omitted by section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, the Ordinances thus promulgated would have been of a duration of not more than six months from their promulgation.
Once these words were omitted by a. 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, section 72 of the 9th Sch.
of the Government of India Act, 1935, would read as under: 645 The Governor General may, in cases of emergency, make and promulgate ordinances for the peace and good government of British India or any part thereof and any ordinance so made shall. . . have the like force of law as an Act passed by the Indian Legislature; but the power of making ordinances under this section is subject to the like restrictions as the power of the Indian Legislature to make laws; and the like disallowance as an Act passed by the Indian Legislature, and may be controlled or superseded by any such Act.
" The effect of the deletion of these words from section 72 leaving the section to be read as above had the necessary effect of equating the Ordinances which were promulgated between June 27, 1940, and April 1, 1946, with Acts passed by the Indian Legislature without any limitation of time as regards their duration.
Ordinances thus promulgated were perpetual in duration and continued in force until they were repealed.
This position was considered by the Federal Court in J. K. Gas Plant Manufacturing Co., (Rampur) Ltd. and others vs King Emperor (1) where Spens C. J. observed: " These Ordinances were made under the powers conferred on the Governor General by section 72 of the Ninth Schedule to the Constitution Act, as amended by the India and Burma (Emergency Provisions) Act, 1940 (3 & 4 Geo.
6, Ch. 33).
Under the said section 72, as it originally stood, Ordinances were limited to an effective life of six months only from the date of promulgation.
Sub section (3) of section I of the said Act, however, provided that in respect of Ordinances made under section 72 during the period specified in section 3 of the Act, section 72 should have effect as if the words ,for the space of not more than six months from its promulgation" were omitted.
The period specified in section 3 of the Act is " the period beginning with the date of the passing of this Act and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency which was the occasion of the passing of this Act.
" The date of `the passing of the (1) , 161. 646 said Act was the 27th June, 1940, and the emergency was not notified to have come to an end on the 1st April, 1946.
It was contended on behalf of the appellants that the true construction to be given to section 72 as so amended was in effect to substitute in section 72 in respect of the duration of an Ordinance, the period specified in section 3 of the Act for the original six months ' period and that accordingly on the expiration of that period, viz., on the 1st April, 1946, Ordinances made after the passing of the Act automatically came to an end.
It was not made very clear how one could arrive at such a construction.
It appears to be based on the suggestion that the power to promulgate an Ordinance under section 72 was by the section confined to the existence of an emergency, Cf: the words in the sub section "in cases of emergency ", and that the Act was intituled an Act to make emergency provision with respect to the Government of India and Burma and defined the period of emergency.
Unless therefore the construction contended for by the appellants was accepted no period would be provided for the continuance of these Ordinances, and that could not have been the intention of the legislature, as the ordinance making power of the Governor General was recognised as temporary only.
In our opinion, the emergency on the happening of which an Ordinance can be promulgated is separate and distinct from and must not be confused with the, emergency which occasioned the pawing of the Act and the clear effect of the words of the, Act on section 72 is that Ordinances promulgated under that subsection during the period specified in section 3 of the Act are subject to no time limit as regards their existence and validity, unless imposed by the Ordinances themselves, or other amending or repealing legislation, whether by Ordinance or other.
In our judgment, it is clear that the second Lahore Tribunal did not cease to exist or to have jurisdiction in the case under appeal by reason of the expiration on the 1st April, 1946, of the period specified in section 3 of the Act in question.
" In our opinion, the above observations of Spens C. J. enunciate the correct position.
The Ordinance in 641 question having been promulgated during the period between June 27, 1940, 'and April 1, 1946, was perpetual in duration and continued in force until it was repealed.
Our attention has not been drawn to any subsequent Ordinance or Act of the Indian Legislature amending or repealing the said Ordinance with the result that it continues to be in force and was in operation on July 11, 1953, the date on which the offence in question was committed by the appellant.
This position was recognized in the Adaptation of Laws Order, 1950, issued under the Constitution Of India.
In the Second Schedule to the said Order were contained several Central Ordinances enacted between 1940 and 1946 including the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 (Ordinance No. III of 1946) where in section II thereof the words " Part A States and Part C States " were to be sub stituted for "the provinces".
It is not necessary to refer to the other Ordinances appearing in this compilation but suffice it to say that in respect of all the Ordinances which were thus promulgated by the Governor General in exercise of the power conferred upon him under section 72 of the 9th Sch.
of the Government of India Act, 1935, the continuance thereof even after April 1, 1946, was predicated and the adaptations prescribed in the Adaptation of Laws Order, 1950, issued under the Constitution of India were made applicable thereto.
This position is further supported by referring to the relevant provisions of the (II of 1934).
Section 26 of that Act provided ill (1) Subject to the provisions of sub section (2), every bank note shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government.
(2)On recommendation of the Central Board the Central Government may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination, shall cease to be legal tender save at such office or a agency of the bank and to such extent as may be specified in the notification.
648 Under section 1 (2) of the Act as it stood, the Act extended to whole of India excepting the State of Jammu and Kashmir.
The ' High Denomination Bank Notes (Demonetisation) Ordinance, 1946 (Ordinance No. III of 1946) declared that Denomination Notes of the denominational value of Rs. 500, Rs. 1,000 or Rs. 10,000 ceased to be legal tender in payment or on account at any place in British India on the expiry of January 12, 1946.
The Ordinance having continued in operation even after the declaration of the emergency having come to an end was made on April 1, 1946, the said notes continued to be ineffective as legal tender in India, though the position in Jammu and Kashmir in regard to the same could not be affected by reason of the , not having been made applicable to the State of Jammu and Kashmir as stated above.
On September 25, 1956, however, the (LXII of 1956) being an Act to provide for the extension of certain laws to the State of Jammu and Kashmir was passed by the Parliament.
In the Schedule to that Act was contained the (II of 1934).
The words " except the State of Jammu and Kashmir" were omitted from section 1, sub section
(2) and section 26A was added after section 26 of the Act.
Section 26A provides: ,, Notwithstanding anything contained in section 26, no bank note of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees issued before the 13th day of January, 1946, shall be legal tender in payment or on account for the amount expressed therein.
The law in the State of Jammu and Kashmir with regard to these High Denomination Bank Notes issued before January 13, 1946, was thus brought into line with the law as it obtained in the rest of India.
This would certainly have not been done but for the acceptance of the position that the Ordinance in question continued in operation even after April 1, 1946, and was in operation right throughout even after April 1, 1946.
649 The alternative argument addressed before us by the learned counsel for the appellant need not detain us at all, for the simple reason that reading section 72 in the manner suggested would be tantamount to giving a retrospective effect to the section as it originally stood in regard to Ordinances which had been promulgated between June 27, 1940, and April 1, 1946.
There is nothing to justify such retrospective operation.
As regards such Ordinances the period of their duration had to be determined having regard to the provisions of section 72 as they stood with the omission of the words " for the space of not more than six months from its promulgation " therefrom during tHe period specified in section 3 of the India and Burma (Emergency Provisions) Act, 1940, and the Ordinance in question was therefore not limited to the space of not more than six months from the date of its promulgation but was perpetual in its duration with the result that it continues in operation until it is repealed.
There is no warrant for reading the provisions of section 72 with the omitted words restored to their original position after April 1, 1946, while determining the duration of the Ordinances which had been promulgated between June 27, 1940, and April 1, 1946.
Both the contentions urged by the learned counsel for the appellant before us having thus failed, it follows that the High Denomination Bank Notes (Demonetization) Ordinance, 1946 (Ordinance No. III of 1946) was in operation on July 11, 1953, the date on which the offence was committed by the appellant and the appellant was rightly convicted by both the courts below.
The appeal will accordingly stand dismissed.
Appeal dismissed.
| From 1968, the Haryana State Electricity Board has been collecting security from every consumer to ensure timely clearance of energy bills and in the case of industrial consumers the security was worked out at Rs. 30 per KW.
With effect from 1st April 1981, the amount was changed to Rs. 100 per KW.
Similarly in regard to the industrial meter a different basis has been adopted and from April 1, 1981 the security deposit now varies between Rs. 5,000 and Rs. 10,000 in regard to industrial consumers.
The petitioners have therefore, challenged the said unilateral increase on the ground that the enhancement is without any justification.
Dismissing the petitions, the Court HELD: 1.
To contend that the and the Rules made thereunder do not contemplate any provision for security for the timely payment of energy charges is not correct.
Sub para (a) of the first proviso to clause VI of the schedule to the would be applicable and what would be sufficient security should be left to the Electricity Board to decide.
[171 E F] Krishna Cement Works vs The Secretary APSEB, AIR 1979 AP 291 approved.
M/s. B. R. Oil Mills vs Assistant Engineer (D) (RSEB), Bharatpur & Anr., ; and M/s. Goodyear India Ltd. vs H.S.E.B. & Ors.
4765/81 dated 9.4.82 Pb. & Haryana H.C. referred to Modi Industries Ltd. (Steel Section) vs U.P. State Electricity Board AIR 1979 All. 375; M/s. Devidayal Metal Industries vs The Municipal Corporation for Greater Bombay & Anr.
distinguished.
2:1 Section 49(1) of the Indian clearly indicates that the Board may supply electricity to any person upon such terms and conditions as the Board thinks fit.
In exercise of this power the Board 166 had initially introduced the condition regarding security and each of the petitioners had accepted the term.
The Board has been conferred statutory power under section 49(1) of the Act to determine the conditions on the basis of which supply is to be made.
This Court in Bisra Stone Lime Company Ltd. & Anr.
vs Orissa State Electricity Board & Anr., ; , took the view that enhancement of rates by way of surcharge was well within the power of the Board to fix or revise the rates of tariff under the provisions of the Act.
What applied to the tariff would equally apply to the security, that being a condition in the contract of supply.
Each of the petitioning consumers had agreed to furnish security in cash for payment of energy bills at the time of entering into their respective supply agreements.
There was no challenge in these writ petitions that the demand of security at the time of entering into supply agreements has to be struck down as being without jurisdiction.
[172 G H; E F] 2:2 Under clause 31 of the Agreement the Board reserved to itself the right to amend, cancel or add to any of the schedules and conditions at any time.
The provisions of this clause are similar to clause 13 of the agreement which came to be considered in Bisra Lime Stone Company 's case (supra).
Therefore, the Board had authority under the agreement itself to amend the conditions.
In exercise of that power the Board has now raised the additional demand.
[173 A B] 2:3.
It is true that the affairs of the Boards in the different States of the country are not upto the expectation of the consumers and there have been instances which give rise to genuine anguish and dissatisfaction.
The scheme of the Act clearly indicates a legislative mandate that the Board should manage its commercial activities in such a way that it does not make any loss.
It is also clear that the Board being a public utility organisation is not expected to make any undue profit by abusing its monopoly position.
An inbuilt system of control and supervision has been set up and the State Governments have been given power to give policy directions.
Situation seems to have arisen when stricter control and supervision are called for and if organisational changes and provision for greater control appear necessary, to improve the functioning of the Boards, steps should be taken without delay in this regard.
The Board should always remember that it is a public utility service and not a governmental agency enjoying wide powers and expected to have a share in the governance of the country.
On the facts placed that the stand of the Board that a demand equal to the energy bill of two months or a little more is not unreasonable,) when the Board has the power to unilaterally revise the conditions of supply, it must follow that the demand of higher additional security for payment of energy bills is unassailable, provided that the power is not exercised arbitrarily or unreasonably.
[173 E H; 174 A B] 3:1.
The argument that the security should be in the shape of Bank guarantee does not call for consideration, in view of the acceptance of the court 's, suggestion to increase the interest @ 10% per annum on per with the interest payable by the Scheduled Banks.
174 E; C] 3:2.
In regard to the enhanced security for the meter the explanation advanced by the Board is that the meters are required to be replaced or many 167 costly parts have to be substituted by way of repair.
In view of the High cost of the meters the Board is justified in enhancing the security.
Petitioners have not disputed their obligation to furnish security for the meter.
But the challenge is to the enhancement.
Indisputably all the meters to the petitioning consumers have been supplied prior to the decision to enhance the security.
Keeping in view the likelihood of replacement or substantial repair, the court suggested that the escalation may be reduced by 50% to which the Board has accepted.
The Board under took to evolve a new formula accordingly and introduce it from 1 10 83 and not to enforce the rates impugned.
[174 E G; H; 175 A]
|
ivil Appeals Nos. 29 and 30 of 1951.
Appeals from the judgment and decree dated 26th October, 1943, of the High Court of Judicature at Allahabad (Verma and Yorke JJ.) in First Appeal No. 48 of 1938 arising out of the judgment and decree dated 6th August, 1937, of the Court of the Additional Civil Judge at Agra in Suit No. 30 of 1936.
M.C. Setalvad and Kirpa Ram (K. B. Asthana, with them) for the appellant in Civil Appeal No. 29 of 1951.
K.N. Agarwal for the appellant in Civil Appeal No. 30 of 1951.
C.K. Daphtary (G. C. Mathur, with him) for the respond ents in both the appeals.
April 24.
The Judgment of the Court was deliv ered by MAHAJAN J.
796 Mst.
Khem Kuer, the young widow of Shah Chiranji Lal, was murdered on the 28th August, 1919, and Mst.
Mohan Kuer, the mother, died on the 5th December, 1932.
Prem Kuer, the respondent in the appeal, claiming herself to be the heir to Shah Chiranji Lal as his sister, brought the suit giving rise to this appeal in the court of the civil judge, Agra, against, amongst others, Mst.
Phool Kuer, the present appellant, for recovery of possession of the properties of Shah Chiranji Lal and mesne profits.
Prem Kuer joined her half sister Mst.
Ram Kuer and their sons as plaintiffs along with herself.
In the array of defendants were impleaded Mst.
Phool Kuer and Mst.
Khem Kuer, widows of Shah Jwala Prasad and Shah Madho Lal and his sons and a host of others as transferees of the properties.
The main defence to the suit was that Shah Jwala Prasad and Shah Madho Lal were recognized to be the owners and heirs to the entire estate of Shah Chiranji Lal by Khem Kuer and Mohan Kuer in a family settlement arrived at between the parties in suit No. 120 of 1915, that by virtue of this family settlement the estate of the deceased was vested in them subject to the life estates of the two women and that the plaintiffs who came to be recognized as reversioners by the Hindu Law of Inheritance (Amendment) Act, 11 of 1929, were not entitled to claim it.
It was further pleaded that on the death of Khem Kuer in 1919, Mohan Kuer surrendered the estate in favour of Jwala Prasad and Madho Lal and they took possession of it as owners and the plaintiffs who subsequently became statutory heirs in 1919 could not be allowed to question the surrender and reopen the succession which could not remain in abeyance.
The learned additional civil judge who tried the suit, dismissed it holding that the compromise of 1915 was a bona fide settlement of a bona fide dispute and was binding as a family settlement being for the benefit of the estate, that Mohan Kuer surrendered the estate validly in favour of Jwala Prasad and Madho 795 MAHAJAN J.
The dispute in this appeal concerns the zemindari and house properties last owned by Shah Chiranji Lal who died at a young age on the 14th May, 1913, leaving him surviving a widow, Mst.
Khem Kuer, and his mother Mst.
Mohan Kuer, besides a number of collaterals, indicated in the pedigree table below : Shah Pirthi Raj : : : : : : : : Mst.
Tulsa Kuer=Shah Lal Chand=Mst.
Mohan Kuer : : : : : : : : : : : : Hira Lal : : : : : : : : Shah Jai : : : Kisen : : : Mst.
Ram Kuer : =Kherpal : : : : : : : : :Shah Jwala Shah Sri :Prasad Kisen : : : :(1)Khem : : : : : Kuer Shah Madho Ram Chand Lachman Kishen Lal :(2)Phool Lal Prasad =Mst.
Umri : Kuer : : : : : : : : : Sudar Mad : Dwarka shan sudan : Prasad Lal Lal : : : : : : : : : : : : Ganga Prasad Jamna Mst.
Prem Kuer Shah Chiranji Lal Prasad =Lekh Raj =Mst.
Khem Kuer : : : : : : Manohar Lal Lachmi Narain 797 Lal and they entered into possession of it after the death of Khem Kuer.
Some of the transferees who had been implead ed as defendants compromised the suit with the plaintiffs and that part of the suit was decided according to the terms thereof between those parties.
Prem Kuer preferred an appeal to the High Court of Judicature at Allahabad against the decree dismissing her suit.
The High Court by its judgment dated the 26th Octo ber, 1943, allowed the appeal, reversed the findings of the learned additional civil judge on the above issues and decreed the plaintiffs ' suit with costs.
Some of the trans feree defendants compromised with the plaintiff appellant in the High Court and the appeal was decided in terms thereof in their favour.
Two main points which are in controversy in this appeal and require consideration, are: 1.
Whether the compromise in suit No. 120 of 1915 amounts to a family settlement and binds the plaintiff respondent, and, 2.
Whether the surrender by Mst.
Mohan Kuer was a valid surrender under Hindu law.
In order to appreciate the respective contentions of the parties, it is necessary to set out shortly in chronological order the history of the events which has resulted in this controversy.
As already stated, Shah Chiranji Lal died on the 14th May, 1913, leaving considerable movable and immovable property.
At the time of his death, his widow Khem Kuer was about eleven years old and his mother Mohan Kuer was about 53 years old.
The two reversioners, Shah Jwala Prasad and Shah Madho Lal, made an application for mutation of names of the estate in their favour claiming it on the basis of a will alleged to have been made by Shah Chiranji Lal on the 13th May, 1913, a day before his death.
On the 10th of September, 1913, an application was made by Mohan Kuer for herself and as guardian of Khem Kuer Challenging the genu ineness of the will and claiming 798 that the estate of the late Shah Chiranji Lal should be mutated in their names.
Notice of this application was given to the two reversioners but they thought it prudent not to appear and to contest the contentions raised by the two ladies.
with the result that the inheritance of the late Chiranji Lal was mutated in the name of the widow as sole heir under the guardianship of Mohan Kuer by an order dated the 28th October, 1913.
The reversioners had also made applications in pending suits for getting themselves im pleaded as legal representatives.
Mohan Kuer applied for the removal of their names and for substitution of the name of the widow and of herself in those cases.
Pending decision of these matters, on the 11th May, 1915, suit No. 120 of 1915 was filed by Jwala Prasad and Madho Lal on the basis of the alleged will of the 13th May, 1913.
On the same day an application was made for the appointment of a receiver and an interim order appointing a receiver was passed by the court.
On the 18th May, 1915, Mohan Kuer for herself and as guardian of the minor widow made an application praying for the discharge of the receiver.
By an order dated the 23rd September, 1915, the receiver was discharged and it was held by the civil judge that the plaintiffs had no prima facie case and that the will propounded by them was a suspicious document.
On the 18th December, 1915, suit No. 120 of 1915 was compromised between the parties.
This compromise is in the following terms : "1.
The plaintiffs relinquish their claim for possession over the estate of Shah Chiranji Lal.
The defendants shall have all those rights to the estate of Shah Chiranji Lal, which she had as a Hindu widow according to law.
After the death of the two Musammats, the plaintiffs in equal shares and, after them, their heirs, who might have the right of survivorship one after the other, shall be the owners of the estate of Shah Chiranji Lal.
The name of Mst.
Mohan Kunwar defendant against one half of the property in lieu of maintenance, shall continue.
799 4.
Mohan Kunwar and Mst.
Khem Kunwar shall have power to do anything they might choose with the entire income from the movable and immovable property, cash, orna ments, amount of decrees and documents, household goods and other movables, which they might have in their possession.
The plaintiffs or anyone else shall have no power to inter fere or to ask for rendition of accounts.
In case Mohan Kunwar defendant dies first, Mst.
Khem Kunwar shall, as a Hindu widow, become the owner in posses sion of the entire property, of which Mst, Mohan Kuer might have been in possession in any way, subject to the provi sions of condition No. 4.
In ,case Mst.
Khem Kuer defendant dies first, Mst, Mohan Kuer shall as a Hindu widow, become the owner in possession of the entire property of which.
Mst, Khem Kuer might have been in possession in any way, subject to the provisions of condition No. 4." In accordance with the terms of this compromise suit No. 120 of 1915 was dismissed.
In the proceedings that were pending for substitution of names the court on the 22nd December, 1915, ordered that Khem Kuer and Mohan Kuer be impleaded as legal representatives of the late Shah Chiranji Lal.
On the 2nd September, 1918, Khem Kuer brought a suit against her mother in law Mohan Kuer for a declaration to the effect that she alone was the lawful heir of Chiranji Lal and was the owner of the property, mentioned in schedule A and that the defendant had no concern with it.
This suit was compromised between the parties on the 22nd April, 1919.
Mohan Kuer agreed that Khem Kuer 's suit be decreed.
Khem Kuer undertook to look after Mohan Kuer in every way and if she desired to live separately from her, she agreed to pay her a sum of Rs. 3000 per annum by way of maintenance.
Khem Kuer did not live long after her having become owner of the entire estate of her husband under the terms of this compromise.
As stated already, she was murdered on the 28th August, 1919.
The estate 104 800 thus became vested in Mohan Kuer both according to Hindu law as well as in accordance with the terms of the compromise of the 18th December, 1915.
It is alleged that either on the fourth or the thirteenth day after the death of Khem Kuer, Mohan Kuer when asked about the mutation of the estate, said that she had no concern with it and had relinquished it and had devoted herself to worship.
On the 15th September, 1919, an application bearing the signature of Mohan Kuer in Hindi was presented by her mukhtar Chaturbhuj in the court of the subordinate judge at Agra, praying that the sale certificate in suit No. 1919 (Shah Jwala Prasad vs Rai Bahadur Shah Durga Prasad), be prepared in the names of Shah Jwala Prasad and Shah Madho Lal, for they were the heirs in possession of the properties of Shah Chiranji Lal.
This application (Exhibit N 31) contains the following recital: "Mst.
Khem Kuer died on the 28th of August, 1919.
I do not want to take any proceedings in my own name.
Shah Jwala Prasad and Shah Madho Lal are the subsequent heirs and it is in their names that all the mutation proceedings etc. are being taken in the revenue court.
They have been made the heirs in possession of the entire property and an applica tion has been filed in their names in this court for prepara tion of the sale certificate.
This petitioner has got no objection to the preparation of the sale certificate in their names, for they are the heirs and are in possession of the property.
" The sale certificate was prepared accordingly.
On the 16th September, 1919, Jwala Prasad and Madho Lal applied for mutation in respect of the lands relating to mauza Somra in the court of the tahsildar of Etmadpur.
In column 5 of this application (Exhibit A 14) it was alleged that they were entitled to mutation by right of inheritance.
Similar appli cations were made in respect of other villages also.
(Vide Exhibit 128 etc.) Mutations were entered in all the villages on the basis that both of them were heirs in equal shares to the property of the deceased, though according to Hindu law, Shah Jwala Prasad alone was the 801 next heir.
During the course of the mutation proceedings one Chintaman, general attorney of Shah Jwala Prasad was exam ined on the 11th October, 1919 and he stated that Mst.
Khem Kuer died on the 28th August, 1919, that Shah Jwala Prasad and Shah Madho Lal were her heirs in equal shares, that Mohan Kuer was the mother in law of the deceased and she did not want her name to be recorded and had made relinquishment in favour of Shah Madho Lal and Shah Jwala Prasad in the civil court on the 15th September, 1919.
Chaturbhuj, gener al attorney of Mohan Kuer was examined in the same proceed ings on the 27th October, 1919, and he stated that Mohan Kuer did not want her name to be recorded in place of the name of the deceased, that she had no objection to the entry of the names of Shah Jwala Prasad and Shah Madho Lal, that she had sent him for making that statement.
He admitted the relinquishment filed by Mohan Kuer in the civil court with respect to the property of Mst.
Khem Kuer but he was not able to state when that relinquishment had taken place.
The tahsildar after recording these statements ordered the mutation of names in favour of the two reversioners (Exhibit M 2).
On the 22nd November, 1919, the two reversioners Shah Jwala Prasad and Shah Madho Lal, having entered into possession of the estate after the death of Khem Kuer made a gift of property of the value of about Rs. 50,000 in favour of the sisters of Shah Chiranji Lal by means of two deeds of gift.
(Vide Exhibit M 16).
These gift deeds contain the following recitals : "Shah Chiranji Lal deceased was the owner of Katariha estate in which besides other villages the villages speci fied below were also included, and as he had no issue after his death Mst.
Khem Kuer became his heir as a Hindu widow of a joint family subject to Mitakshara school of law.
On her death we the executants who were entitled to become the absolute owners of the estate of Shah Chiranji Lal according to Shastras became the absolute owner of the entire property 802 of Shah Chiranji Lal by inheriting the estate from him.
We obtained possession over everything and mutation of names also were effected in our favour from the revenue court in respect of all villages.
Shah Chiranji Lal deceased had two sisters Mst.
Ram Kuer and Mst.
Prem Kuer and he had a desire during his lifetime to give them some property but owing to sudden death he could not himself fulfil his intention during his lifetime.
We the executants accept this fact as desired by him.
Besides this the mother of Shah Chiranji Lal also desires the same thing and it is our duty to fulfil the same, and to give property to the Musammats aforesaid is considered to be a pious and good act from the religious point of view.
It is our duty also to respect their wishes and fulfil the same, so that the people of our caste and family might not think that after the death of Shah Chiranji Lal his wishes remained unfulfilled.
Hence for the reasons set forth above and keeping in view the honour of the family and pious nature of the act we the executants while in a sound state of body and mind . . . make a gift of the following villages in favour of the donees.
" The donees subsequently made a number of transfers of the property gifted to them and in every respect the gift deeds were acted upon.
Jwala Prasad, the presumptive rever sioner, died in the year 1980.
In suit No. 49 of 1928 (same as No. 89 of 1929) one Pandit Rikh Ram had obtained a decree against Shah Madho Lal and his sons and they appealed against it to the High Court and also applied for postponement of the preparation of the final decree.
Stay was ordered on the applicants furnishing security in the sum of Rs. 20,000 for future interest, costs, etc.
On the 26th May, 1930, in compliance with the order of the High Court a security bond was executed by Shah Madho Lal and his sons as first party and by Mst.
Mohan Kuer as second party, containing the following recitals : "After the death of Mst.
Khem Kuer Mst.
Mohan Kuer was to become the owner of the property with 803 limited interests as a Hindu mother, but she relinquished her inheritance and did not agree to accept any property.
By means of a private arrangement, i.e., a family arrange ment, it was decided as between Shah Jwala Prasad and Shah Madho Lal that they should be the owners of the property aforesaid in equal shares.
Documents in that connection were registered.
Thus Shah Madho Lal executant No.1 is the exclusive owner of the property given below which is being pledged and hypothecated under this security bond.
Execu tant No. 4, the second party, has, after hearing and under standing the contents of this security bond, joined in token of the veracity of the facts noted above so that in future she might not be able to take objection to it and so that she might have no objection of any sort to the security bond." (Executant No. 4 was Mst.
Mohan Kuer).
On the 30th June, 1930, an affidavit bearing the thumb impression of Mst.
Mohan Kuer was filed in the same pro ceedings containing the following statements : "I solemnly affirm and say that after the death of Mst.
Khem Kuer I did not agree to accept property nor was I the heir and that I relinquished the entire property in favour of Shah Jwala Prasad who became the owner of the entire property which was in possession of Khem Kuer.
" The Subordinate Judge expressed the view that the bond could not be held to have been executed by Mohan Kuer, she being a pardanashin lady.
He declined to accept the deed as sufficient and valid security.
On the 9th July, 1930, the High Court of Judicature at Allahabad dismissed the applica tion for stay of proceedings.
On the 15th July, 1931, Mohan Kuer instituted suit No. 24 of 1931 in the court of the subordinate judge of Mathura against the widows of Shah Jwala Prasad, Shah Madho Lal and his sons and a number of transferees who had taken the property from these two reversioners.
In para 8 of the plaint it was alleged 804 that the plaintiff was an old pardanashin woman, was simple and of week intellect and illiterate, that on account of the murder of Mst.
Khem Kuer, she was very terror stricken and was full of sorrow and had no knowledge about her rights, that the third defendant and Jwala Prasad who wanted to get the property took undue advantage of the plaintiff 's afore said condition and unlawfully entered into possession of the property left by Chiranji Lal deceased and caused the muta tion of names in their favour.
In para.
12 it was said that the defendants had got the thumb impressions of the plain tiff on certain documents without telling her the contents of those papers, simply by saying that a decree for a con siderable amount had been passed against the property and it was going to be sold in auction and that a security bond must be furnished for saving the property.
She prayed for a decree for possession of the property in dispute in her favour against the defendants.
During the pendency of this suit Mohan Kuer died on the 5th December, and on her death an attempt was made by the present plaintiffs to get them selves impleaded as her legal representatives but on the 9th October 1934 it was held that the claim of Mst.
Mohan Kuer was of a personal character and the suit therefore could not proceed owing to abatement.
It was, however, noted that the legal representatives could file a separate suit, if so advised.
It is in consequence of this order that the suit out of which this appeal arises was filed on the 30th April 1936.
It was contended by the learned Attorney General that the High Court on mere suspicions and unwarranted assump tions had found the main issues in the case against the appellant and had erroneously held that the compromise in suit No. 120 of 1915 was not binding on the 'plaintiffs and that the surrender by Mohan Kuer was not valid surrender under Hindu law.
After hearing the learned counsel at considerable length, we did not think it necessary to hear the respondent in reply, as in our opinion, the decision of the High Court on both the points was right.
805 On the point of surrender, the learned Attorney General contended that the widow effaced herself and put both the reversioners in possession of the property half and half, and agreed to take Rs. 3,000 from them for her maintenance and that the fact of surrender was satisfactorily proved from the conduct of Mohan Kuer in allowing the estate to be mutated in the names of the reversioners and in allowing them to take possession of it, also by the different state ments made by her and from the other documentary and oral evidence led in the case.
Emphasis was laid on the state ments contained in the application (Exhibit M 31), on the statement of her mukhtar Chaturbhuj, and on the recitals of the security bond and the affidavit, Exhibit P 30.
Whether Mohan Kuer effaced herself and surrendered the property, or whether she merely abandoned it, or whether she entered into an arrangement for the division of the estate between herself, the two reversioners and the daughters and their sons it is not possible to predicate with any amount of certainty.
No definite opinion can be offered on the question whether whatever she did, she did voluntarily after fully realizing the consequences of her act and wheth er as a pardanashin lady she had.been properly advised on the matter or whether she merely acted on sentiment.
Considerable doubt is cast on the story of surrender set up by the defendants by the recitals in the two deeds of gift, dated 22nd November, 1919, extracted above.
The donors did not base their title to the property either on the compromise of 1915 or on the surrender of Mohan Kuer of the year 1919 or on the will; on the other hand, they said that they had become owners of the property of Chiranji Lal by inheritance under Hindu law after the death of his widow.
Both of them could not possibly inherit the property half and half under Hindu law.
Moreover, there is no clear or definite evidence of either the time when the arrangement was made or of the terms thereof.
The evidence on these points is vague and 806 unsatisfactory.
It is completely wanting as to the arrange ment under which Mohan Kuer became entitled to receive Rs. 3,000 from them.
The conduct of Mohan Kuer and the various statements by her no doubt do indicate that she cut off her connection with the bulk of the estate of Chiranji Lal after the death of the widow and received a sum of Rs. 3,000 from the rever sioners and it is also clear that at her instance the rever sioners gave property of the value of Rs. 50,000 to her daughters, but in the absence of any satisfactory evidence as to the precise nature of this arrangement it is not possible to conclude that the widow after fully realizing as to what she was doing and after proper advice effaced her self.
In this connection the allegations made by her in the suit of 1931 cannot be altogether ruled out from considera tion.
Assuming however for the sake of argument that Mobart Kuer purported to relinquish her estate in favour of Jwala Prasad and Madho Lal, in our opinion, the relinquishment connot in law operate as an extinction of her title in the estate.
The principle underlying the doctrine of surrender is that it cannot possibly be made in favour of anybody except the next heir of the husband.
Vesting of the estate in the next reversioner takes place under operation of law and it is not possible for the widow to say that she is withdrawing herself from the husband 's estate in order that it may vest in somebody other than the next heir of the husband.
It was held by this court in Mummareddi Nagi Reddi vs Pitti Durairaja Naidu(1) that so far as the next heir is concerned, there cannot be a surrender of the total ity of the interest which the widow had, if she actually directs that a portion of it should be held or enjoyed by somebody else other than the husband 's heirs and that the position is not materially altered if the surrender is made in favour of the next heir with whom a stranger is associat ed and the widow purports to.
relinquish the estate in order that it may vest in (1) [1951] s.c.
R. 655.
807 both of them.
Though in the written statements of the two sets of defendants different versions of the character of the arrangement were pleaded, the learned Attorney General before us stated that the surrender by the widow was made both in favour of Jwala Prasad and Madho Lal in equal moie ties.
Madho Lal admittedly was not the next reversioner entitled to succeed to the estate.
Thus the surrender of the totality of the interest of the widow was not made in favour of the next heir.
That being so, it cannot operate as a valid surrender.
If the surrender could be held a valid one, then obviously succession that had opened out in 1919 and vested in the next heirs could not be divested at the instance of the plaintiffs in the year 1932 on the death of Mohan Kuer, but in view of the invalidity of the surren der it has to be held that succession to Shah Chiranji Lal 's estate opened in 1932 and the plaintiffs as next heirs were entitled to take it.
The next question for consideration is whether the compromise of 1915 entered into between Mohan Kuer as guardian of Khem Kuer, and the two reversioners who had claimed the estate on the basis of a will, was a bona fide family arrangement and thus binding on the ultimate rever sioners, the plaintiffs.
It is well settled that when the estate of a deceased Hindu vests in a female heir, a decree fairly and properly obtained against her in regard to the estate is in the absence of fraud or collusion binding on the reversionary heir, but the decree against the female holder must have involved the decision of a question of title and not merely a question of the widow 's possession during her life (vide Venayeck Anundrow vs Luxumeebaee (1).
This principle of res judicata is not limited to decrees in suits contested and it is competent to a widow to enter into a compromise in the course of a suit bona fide in the inter est of the estate, and not for ' her personal advantage, and a decree passed on such compromise is binding upon the reversioner.
The question whether the transaction (1) 808 is a bona fide settlement of a disputed right between the parties depends on the substance of the transaction and in order that it may bind the estate it should be a prudent and reasonable act in the circumstances of the case.
As observed by their Lordships of the Privy Council in Ram sumran Prasad vs Shyam Kumari (1), the true doctrine is laid down in Mohendra Nath Biswas vs Shamsunnessa Khatun(2), decided in 1914, and it is that a compromise made bona fide for the benefit of the estate and not for the personal advantage of a limited owner will bind the reversioner quite as much as a decree against her after contest.
That being so,we proceed to inquire whether the compromise in the present case is one that can be supported on these principles.
In agreement with the High Court we are of the opinion that it cannot be so supported.
Mohan Kuer in entering into the compromise on behalf of the minor widow never applied her mind to the interests of the ultimate reversioners.
She entered into it for her own personal benefit and for the personal benefit of the minor widow in complete indifference as to what was to happen to the estate after their respective deaths.
Under this compromise these two ladies got all the rights they had under Hindu law without sacrificing an iota of their property and then they agreed that after their death the plaintiffs in equal shares and after them their heirs shall be the owners of the estate of Chiranji Lal.
It did not matter in the least to the two ladies what was to happen to the estate after their deaths and they were quite willing to let this estate go to the plaintiffs in the suit, though one of them was a remote reversioner.
The compromise therefore was made in the interest of the actual parties to the suit in complete disregard of the interests of the ultimate reversioners.
The widows undoubtedly acted with reasonableness and pru dence so far as their personal interest was concerned but further than that they did not see.
The claim, of the two plaintiffs in Suit No. 120 of 1916 was adverse to the inter est of the (1) (1922) 49 I,A. 342.
(2) 809 reversion as they were claiming as legatees under the will.
The widows while entering into the compromise safeguarded their personal rights only and thus in entering into it they only represented themselves and not the estate or the rever sioners and surrendered nothing out of their rights, and it cannot be said that in the true sense of the term it was a bona fide settlement of disputed rights where each party gave up something of its own rights to the other.
The plain tiffs got an admission from the widows in regard to the future succession of the estate that after their deaths they would succeed though they were not heirs in accordance with Hindu law.
By this admission the widows lost nothing what soever.
Those who lost were the ultimate reversioners and their interest was not in the least either considered or safeguarded.
In these circumstances it seems to us that the compromise cannot be held to be a bona fide settlement or family arrangement of disputed rights and was entered into by Mohan Kuer for her personal advantage and of the advan tage of Khem Kuer.
The present case is analogous to the decision of the Privy Council in Imrit Konwur vs Roop Narain Singh (1).
There in a dispute between a person claiming to be an adopted son of the previous owner and the widow and her daughters who would have title after her, the widow gave up her daughters ' rights in consideration of her receiving practically unimpaired what she could.
Their Lordships held that such a compromise could not stand, as indeed it was not a compromise at all.
The learned Attorney General laid considerable emphasis on the decision of their Lordships of the Privy Council in Mata Prasad vs Nageshar Sahai (2).
In that case the widow admitted the right of the reversioner under Act I of 1869 and agreed that succession will be governed by that Act.
The reversioner agreed to let her remain in possession and undertook that he would not alienate the property during that period.
The widow in that case was not constituted a full owner under Hindu law and she did not get her full rights (1) (2) (1925) 52 I.A.393 810 under the compromise but as a matter of concession was allowed to remain in possession by the reversioner and as a matter of fact she sacrificed her rights to a considerable extent and did not act for her personal benefit at all except to the limited extent mentioned above.
In the cir cumstances of that case it was held "that the compromise was a bona fide family settlement of disputed claims and was binding on the reversioners.
In the present case the devolu tion of the property after the death of Chiranji Lal was agreed to be in accordance with Hindu law and that being so, the further devolution of the property after their death was no concern of the widows.
That was a matter of law.
The ultimate reversioners were stabbed in the back by the widow and such a compromise cannot be held to be binding on them.
A large number of cases were cited before us in which com promises under different circumstances had been held to be binding on the reversioners.
We consider that it is wholly unnecessary to examine those cases because the circum stances in which those compromises were made were quite different from the circumstances of the present case.
Considering all the materials which were placed before us, we hold in agreement with the High Court that the compromise in the present case was neither prudent nor reasonable so far as it affected the interests of the estate and that of the ultimate reversioners and that being so, is not binding on the plaintiffs.
For the reasons given above this appeal fails and is dismissed with costs.
Civil Appeal No. 30 of 1951.
This is an appeal by one of the transferees and arises out of the same suit out of which arises appeal No. 29 of 1951.
On the 13th June, 1928, Shah Madho Lal and his son Shah Madhusudan Lal executed a sale deed (Exhibit M 13) in favour of the appellant for the sum of Rs. 21,000.
The transferee while adopting the defence taken by Madho Lal and by the heirs of Jwala Prasad, pleaded that he was protected by the provisions of section 41 of the Transfer of Property Act.
811 The High Court held that in cases where a person who has allowed another to occupy the position of an ostensible owner has a limited estate, the rule of section 41 applies only during the lifetime of the limited owner and is not available to protect transferees against the claim of the reversioners.
A number of authorities were cited in support of this proposition.
The learned counsel for the appellant was unable to displace this proposition.
It is quite clear that the plea of section 41 of the Transfer of Property Act could only be raised against Mohan Kuer or her legal repre sentatives but is not available against the plaintiff, Mohan Kuer having acquired a limited life estate.
This contention is therefore rejected.
The learned counsel then contended that the plaintiff Prem Kuer had relinquished her rights in favour of her sons in 1933 and she had no locus standi to maintain the suit or to appeal against the decision of the trial judge as the title to the estate had vested in her sons.
The plaintiffs had alleged in para.
13 of the plaint that the relinquish ment was inoperative and void.
The defendants did not dis pute that allegation and it is not open to them at this stage to take up the plea which they could have taken in the trial court or in the appellate court.
Even in the grounds of appeal to this court the point was not taken.
If the point was taken at the proper stage the plaintiffs might well have proved that the relinquishment was no longer operative or they might have amended the plaint and put it in proper form.
The learned counsel adopted the arguments of the learned Attorney General in the other appeal and for the reasons given therein these points are decided against him.
This appeal therefore also fails and is dismissed with costs.
Appeals dismissed.
Agent for the appellant in Civil Appeal No. 29 of 1951: section section Shukla.
Agent for the appellant in Civil Appeal No. 80 of 195 I:P. C. Agarwal.
Agent for the respondents in both: Rajinder Narain.
| The petitioner who entered into contracts with the Government of India for the supply of certain quantities of sugar of foreign origin, placed orders with dealers in foreign countries and made arrangements for transporting the goods to Bombay by engaging steamers.
When the goods were on the high seas and before the vessels arrived at Bombay harbour, the petitioner delivered to the Government the shipping documents including the bill of lading pertaining to the goods and received the price.
After the goods reached the port, they were taken delivery of by the Government of India after paying the requisite customs duties to the authorities concerned For the assessment year 1954 55, the Assistant Collector of Sales Tax held that sales tax was payable by the petitioner in respect of the transaction relating to the sugar sold to the Government.
The petitioner claimed, inter alia, that the sales had taken place in the course of import and therefore they were not liable to sales tax under article 286(1)(b) of the Constitution of India.
But it was contended for the Sales Tax Authorities that the sales were not in the course of import and that, in any case, under the terms of the contracts the intention of the parties was that notwithstanding the delivery of the bills of lading against payment the property in the goods should not pass to the Government till actual delivery was made.
Held: (1) that under article 286(1)(b) of the Constitution of India the course of the import of the goods starts at a point when the goods cross the customs barrier of the foreign country and ends at a point in the importing country after the goods cross the customs barrier; (2) that an importer can, if he receives the shipping documents, transfer the property in the goods when they, are on the high seas to a third party by delivering to him shipping documents against payment and such a sale is one made in the course of import; (3) that the delivery of a bill of lading while the goods are afloat is equivalent to the delivery of the goods themselves; Sanders Brothers vs Maclcan & Co., , relied on.
(4) that on a true construction of the contracts in question the property in the goods passed to the Government of India 853 when the shipping documents were delivered to them against payment; and (5) that the sales in question took place in the course of.
import into India and were exempted from sales tax under Art.286(1)(b) of the constitution.
State of Travancore Cochi vs The Bombay Co. Ltd., ; , followed.
|
Appeals Nos. 130 and 131 of 1951.
Appeals from.
the Judgment and Decrees, dated the 12th August, 1948, of the High Court of Judicature at Calcutta in Appeals from Original Decrees Nos.
214 of 1942 and 231 of 1943 arising from the Decrees, dated the 16th June, 1942, of the Court of the Subordinate Judge, Burdwan, in Money Suit No. 261 of 1932/ Miscellaneous Case No. 132 of 1941 and Money Suit No. 262 of 1932/Miscellaneous Case No. 131 of 1941.
N. C. Chatterjee (A. K. Dutt and Sukumar Ghose, with him) for the appellant.
Manmohan.
Mukherjee and P. K. Chatterjee for respondent No. 1. 989 1954.
March 12.
The Judgment of the Court was delivered by MUKHERJEA J.
These two analogous appeals, which are between the same parties and involve the same points in dispute, are directed against a common judgment of a Division Bench of the Calcutta High Court dated the 12th of August, 1948, by which the learned Judges affirmed, in appeal, the decision of the Subordinate Judge of Burdwan passed in two analogous proceedings under section 36 of the Bengal MoneyLenders Act.
The facts material for our present purpose lie within a narrow compass and may be stated as follows: The principal respondents are certain idols, represented by their managing Shebait Ram Govinda Roy.
The idols are the family deities of the Roys of Bonpash in the district of Burdwan, and the number of Shebaits being very large, there is a recognised usage in this family that the seniormost member amongst the descendants of the founder acts as the managing Shebait and it is he who manages the endowed properties and looks after the due performance of the worship of the idols.
It is not disputed by the parties that it is within the competence of the managing Shebait to borrow money to meet the necessities of the idols and to execute such documents as may be necessary for that purpose.
Admittedly Adwaita Charan Roy was the managing Shebait of the deities from 1926 to 1930 and as Shebait, he executed a Hatchita in favour of one Nanitosh Chakraborty some time in April, 1928, on the basis of which he received advances of money from time to time from the latter.
The last entry in the Hatchita was made in March, 1929, and the total amount borrowed up to that date came up to Rs. 3,801.
Adwaita died in March, 1930, and after his death, Satish Chandra Roy became the managing Shebait and continued to act as such till his death in 1940.
There was an adjustment of accounts between Nanitosh, the creditor,in whose favour the Hatchita was executed, and Satish Chandra, the managing Shebait some time in October, 1931, and a sum of Rs. 5,068, having been found due to the 128 990 creditor, Satish Chandra gave him a renewed Hatchita for that amount.
It appears that while Adwaita was still the managing Shebait, a suit was instituted by some of his co Shebaits to remove him from his office and pending the hearing of the suit, Ramjanaki Roy, another co Shebait, was appointed a Receiver of the debutter property by the court.
With the permission of the court, Ramjanaki borrowed from the same Nanitosh Chakraborty three sums of money on three different promissory notes executed respectively on the 27th September, 1929, 1st October, 1929, and 14th January, 1930.
The suit was eventually dismissed for non prosecution after Adwaita 's death.
Nanitosh died in 193 1, and in 1932) his two sons Aditya and Dhirendra, who figure as respondents 14 and 15 in these appeals, instituted two money suits against Satish Chnandra, the managing Shebait, in the Court of the Subordinate Judge, Burdwan, being Money Suits Nos. 261 and 262 of 1932, for recovery of the moneys due in respect of the Hatchita and the promissory notes mentioned aforesaid.
Both the suits were decreed on the basis of a compromise dated the 23rd July, 1933, and two consent decrees were passed, one for a sum of Rs. 5,800, and the other for Rs. 2,200, both payable in sixteen yearly instalments with a further stipulation that in default of payment of any one of the instalments, the whole or balance of the decretal amount would become due and payable in each.
The instalments not having been paid in either of the cases both the decrees were put into execution.
In Execution Cases Nos. 76 and 77 of 1936, arising out of Money Suits Nos. 261 and 262 of 1932, the properties mentioned in Schedule Ka in each case were put up to sale and they were purchased ostensibly by the two decreeholders Aditya and Dhiren.
Three years later, Execution Cases Nos. 17 and 18 of 1939 were started again in connection with the said decrees and this time the properties specified in Schedule Kha were attached and put up to sale and they were also purchased by the Chakraborty decreeholders.
Finally, in Execution Cases Nos. 163 of 1939 and 5 of 1940, the properties described in Schedule GA were sold and 991 they were, knocked down to Srimati Oramba Sundari Dasi, who figures as the appellant in the appeals before us and who, it may be noted, is the wife of Aghore Nath Roy, a son of Adwaita, the former managing Shebait of the debutter estate.
Subsequently, the decreeholders, who purchased Ka and Kha Schedule properties sold them by a registered Kobala to the said Oramba Sundari Dasi on the 26th of July, 1940.
The result, therefore, was that the properties described in the three Schedules came to vest in Oramba Sundari, the wife of Aghore Nath Roy.
On the 28th August, 1941, the deities represented by some of the Shebaits filed two applications under section 36 (6) (a) (ii) of the Bengal Money Lenders Act praying for the reopening of the two compromise decrees mentioned aforesaid and the passing of.
new installment decrees in accordance with the provisions of the Act.
There were prayers also for restoration.
to the deities of all the properties mentioned in Schedules, Ka, Kha and Ga which were purchased in execution of the decrees.
The principal opposite parties to these proceedings were the Chakraborty decreeholders, Oramba Sundari, the ostensible purchaser, and Aghore Nath Roy, her husband.
The allegations in the applications, in substance, were that the Chakrabortys were mere benamidars for Aghore Nath Roy, who was the real lender and the real decreeholder in both these suits.
It was alleged that Aghore Nath Roy purchased these properties in the benami of the decreeholders in two out of the three execution proceedings and in the benami of his wife Oramba Sundari in the third.
The subsequent Kobala executed by the Chakrabortys in favour of Oramba .
Sundari was also asserted to be a fictitious conveyance made in favour of Aghore Nath Roy in the name of his wife.
In these circumstances, the judgment debtors prayed that they were entitled to have the two compromise decrees reopened and on the passing of new instalment decrees to have the properties, which were in possession of the real decreeholder, restored to the deities in terms of section 36(2)(c) of the Bengal Money Lenders Act.
The trial judge decided 992 in favour of the judgment debtors and granted their prayers in both the applications.
Orders were made for reopening of the decrees and making of fresh decrees in their places in accordance with the provisions of the Bengal Money Lenders Act.
Direction was also given for restoration of the properties mentioned in Schedules Ka, Kha and Ga to the deities under the provision of section 36(2)(c).
Against this decision, Oramba Sundari took two appeals to the High Court of Calcutta and the learned Judges, who heard the appeals, affirmed the decision of the court below and dismissed both the appeals.
Oramba Sundari has now come up in appeal to this court on the strength of a certificate given by the High Court under sections 109 (a) and 110 of the Civil Procedure Code.
Mr. Chatterjee who appeared in support of the appeals, has not challenged before us the findings of fact concurrently arrived at by the courts below, viz.
,that the appellant Oramba Sundari was a mere benamidar for her husband Aghore in respect of the purchase of Ga Schedule properties in court sale, and also that the Kobala executed by the Chakrabortys in her favour on July 26, 1940, was a fictitious transaction.
The point, which he has pressed for our consideration, is that in a proceeding under section 36 of the Bengal Money Lenders Act, it is not open to the court to go behind the decree and launch an enquiry as to whether the decreeholders on record were in fact benamidars for another person.
In other words, the contention is that, even if Aghore was proved to have advanced the money upon which the Chakrabortys obtained the decrees, in reopening the decrees and in working out the rights of the parties in accordance with the provisions of the Bengal Money Lenders Act the court could treat the Chakrabortys alone as the decreeholders.
For a proper determination of this point, it is necessary to examine the scope of section 36 of the Bengal Money Lenders Act and the reliefs which the Court is competent to grant in terms of that section.
Section, 36 of the Bengal Money Lenders Act sets out the various powers which the court can exercise, 993 if it has reason to believe that the exercise of one or more of the powers will give relief to the borrower as contemplated by the Act; and one of the powers, which is mentioned in clause (a) of sub section (1) of the section is to reopen any transaction and take an account between the parties.
The drafting of section 36 is indeed obscure and somewhat clumsy, but it is clear, as the Privy Council (1) has pointed out, that the power of reopening a transaction, as contemplated by the section, extends to reopening of decrees as well.
Sub section (2) of section 36 contains detailed provisions as to what the court may or may not do when a decree is reopened.
It cannot be disputed that the court reopens a decree under section 36(2) only for the purpose and so far as it is necessary to give relief to the borrower in the manner provided for in the Act, namely, to release him from all liability for interest in excess of the limits prescribed by section 30 of the Act.
A new decree is passed only for the purpose of substituting the method of accounting sanctioned by the Act for the calculations upon which the original decree was passed and to give an opportunity to the judgment debtor to pay the decretal dues thus ascertained by instalments.
But save and except for these, the old decree as well as the adjudications made thereunder are not wiped out and the parties are not relegated to their rights and liabilities under the original cause of action (2).
How the rights of the parties are to be adjusted and worked out when a decree hat; been reopened has been dealt with exhaustively in the several clauses of section 36 (2) of the Bengal Money Lenders Act, and an examination of these clauses makes it clear to our minds that an enquiry as to whether the decree holder was in fact a benamidar for another person in respect of the decree, does not come within the purview of these provisions.
Clause (a) of section 36(2) empowers the court to pass a new decree in accordance with the provisions of the Act.
Obviously, this new decree is to be passed in favour of the original decreeholder and only the calculations upon which the old (1) Vide Renula vs Manmatha, 72 I.A. 156.
(2) Vide Bank of Commerce Ltd. vs Amulya Krishna Babu Roy Chowdhury 994 decree was based would be changed by substituting the statutory method of accounting in place of what rested upon the contract between the parties.
Clauses (b) and (C) contemplate cases where properties have been sold in execution of the original decree.
If the purchaser is the decreeholder, himself and he is in possession of the property when the decree is reopened, it is incumbent upon the court to order restoration of these properties to the judgment debtor under clause (c).
If, on the other hand, the properties had been acquired by strangers either by purchase at the execution sale or from the decreeholder purchaser, their interests would be protected if they have acquired these rights bona fide as contemplated by clause (b).
Under clause (d), the court has to order the payment of the decretal amount in such instalments as it thinks proper, and clause (e) further imposes a duty on the court to give a direction in such cases that if there is default in the payment of any one of the instalments, the properties restored to the judgment debtor under clause (e) would be put back into the possession of the decreeholder.
It is quite true that the object of restoring possession of the properties sold in execution of the decree to the judgment debtor is to enable the latter to pay off the decretal dues, but it is to be remembered that the sale itself is not annulled, and in case of default in payment of any of the instalments, the properties are returned to the decreeholder purchaser.
We agree that if the purchaser is a mere benamidar for the decreeholder, clause (b), subsection (2) of the section would not afford protection to him in any way.
He could not be regarded as a person other than the decreeholder acquiring rights bona fide as contemplated by that clause.
For the purpose of giving effect to clauses (b) and (c), therefore, the court has not only the right but is under a duty to make an enquiry as to whether the ostensible purchaser at the execution sale, or the person who purports to have acquired an interest therein under a subsequent transfer from the decreeholder purchaser, has bonafide acquired such rights within the meaning of clause (b).
But we do not agree with the learned 995 Judges of the High Court that in making a new decree under clause (a) of section 36(2) and giving the judgment debtor consequential relief under clause (c) of the sub section, the court can at all enter into the question as to whether the decreeholder on record is himself a benamidar for another person in respect of the decree.
Such enquiry, it seems to us, is altogether outside the purview of the different clauses of section 36(2) of the Bengal Money Lenders Act.
These provisions do not recognise any other decreeholder than the one in whose favour the original decree was passed.
It is between him and the judgment debtor that the rights are to be adjusted in accordance with the provisions of the Act; to him would the instalments have to be paid under the new decree, and he alone would be compelled to restore the properties which he had purchased in execution proceedings.
None but the decreeholder on record can give a valid discharge or record satisfaction of the decree.
This being the position, it is altogether immaterial, in our opinion, that it was Aghore, the husband of the appellant, who, really advanced the money upon which the decrees were obtained.
We must treat the Chakrabortys and the Chakrabortys alone as the decreeholders and see to what extent the provisions of the Act could be applied against them in the circumstances of the present case.
So far as the properties described in Schedules Ka and Kha are concerned, it is not disputed that they were purchased by the decreeholders themselves.
No price was actually paid by the decreeholders, but the sale proceeds were set off against the decretal dues.
The decreeholders, therefore, must be deemed to be the purchasers of these properties within the meaning of clause (c) of section 36(2); and as the subsequent conveyance of these properties in favour of Oramba Sundari, the appellant, has been held by both the courts below to be a fictitious transaction, we must hold that Oramba Sundari did not bona fide acquire any right which could be protected under clause (b) of section 36(2).
With regard to these properties, therefore, the order for restoration of possession made by both the courts below should stand.
As regards Ga 996 Schedule properties, however, Oramba Sundari was the purchaser at the execution sale and whether or not the money for such purchase was paid by her husband becomes immaterial.
This was not the property purchased by the decreeholders and there is no proof of the decreeholders being in possession of the same either by themselves or through Oramba Sundari.
In these circumstances, clause (e) of section 36(2) cannot be attracted in favour of judgment debtors so far as this property is concerned and the possession of it must remain with the appellant.
We, therefore, allow the appeal in part and set aside the order for restoration of possession made by the courts below in respect to the Ga Schedule property.
The rest of the decision of the High Court will stand.
We make no order as to costs of these appeals.
Appeal partly allowed.
| The appellant had dealings with the respondent in respect of a ruqqa and a mortgage.
The respondent filed two suits against the appellant for recovery of the moneys due on the ruqqa and the mortgage respectively.
The summons in the suits was not duly served on the appellant and the suits were decreed ex parte.
The appellant then filed an application to set aside the ex parte decree in the suit on the ruqqa.
The court passed an order on 16th August 1958.
, setting aside that ex parte decree and also informed the appellant who was present in court on that day, of the passing of the ex parte decree in the mortgage suit.
On 16th April 1959 the appellant filed an application for setting aside the ex parte decree in the mortgage suit.
The trial court and the High Court held that the application was barred by limitation under article 164 of the Indian Limitation Act, 1908, as more than 30 days had expired after the appellant had knowledge of the ex parte decree.
In appeal to this Court, HELD The application was rightly dismissed.
Under article 164 of the Limitation Act, the period of 30 days is counted, when the summons is not duly served, from the date when the applicant had knowledge of the decree; and the expression "knowledge of the decree" means knowledge of the particular decree which is sought to be set aside.
It is a question 'of fait 'in each case whether the information` conveyed is sufficient to impute the knowledge, and, the test is not what the information would mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff and the facts and circumstances known to him [759 B; 760B D] Pundlik Rowji vs Vasantrao Madhav Rao 11 B.L.R. 1296; Kumud Nath, Roy Choudhury vs Jotindra Nath Chowdhury I.L.R. ; Bapuraa Sitaram Karmarkar vs Sadbu Bhiva Gholap.
I.L.R. and Batulan.v.
S.K. Dwivedi, I.L.R. 33 Patna, 1025, approved.
|
No. 11 of 1967.
Petition under article 32 of the Constitution of India for the enforcement of fundamental rights.
N. C. ChatterJee, K. B. Rohtagi and section BalakriShnan, for Petitioner.
C. K. Daphtary, Attorney General, A. section Nambiar, R. H. Dhebar and section P. Nayar, for the respondents.
K. B. Rohtagi, for the interveners.
723 Ramaswami, J.
In this case the petitioner, C. A. Rajendran has obtained rule from this Court calling upon the respondents to show cause why a writ in the nature of mandamus under article 32 of the Constitution should not be issued for quashing the office Memorandum dated November 8, 1963 which is Annexure C ' to the Writ Petition, and for directing respondent No. 1 to restore the orders passed by it in Office Memorandum No. 2 /11/ 55 RPS dated May 7, 1955 and No. 5/4/55 SCT (1) dated January 4, 1957.
Cause has been shown by the Attorney General on behalf of the respondents to whom notice of the rule was ordered to be given.
The petitioner is a permanent Assistant in Grade IV (Class 11, non gazetted ministerial) of the Railway Board Secretariat Service.
He was initially appointed as Accounts Clerk on February 6, 1953 in Southern Railway.
He was appointed as an Assistant on October 22, 1956 in the Railway Board and confirmed as Assistant on April 1, 1960.
The pay scale of the Assistant 's grade is Rs. 210 530.
The next post to which the petitioner claims promotion is that of the Section Officer in the same service.
The post of Section Officer is classified as Class II, Grade 11, Gazetted and it carries a pay scale of Rs. 350 900.
The Railway Board Secretariat Service (Reorganisation and Reinforcement) Scheme was drawn up in consultation with the Ministry of Home Affairs and introduced with effect from December 1, 954 with the approval of the Union Public Service Commission.
According to the new Scheme the Railway Board Secretariat Service consists of the following grades: "Grade IV Assistants in the scale of Rs. 210 530 (Class III non gazetted) (to which Petitioner belongs).
Grade III Section Officers in the scale of Rs. 350 900 (Class II gazetted) with effect from 1 7 1959.
(Section Offcers grade).
Grade II Amalgamated with effect from 1 7 1959 as Section Officers grade.
Grade I Assistant Directors/Under Secretaries in the scale of Rs. 900 1,250.
(Grade III was called, before 1 7 59, Assistant Superintendent in the scale of Rs. 275 500 and the scale of Grade II Superintendents was Rs. 530 800).
" L/P(N)7SCI 7 724 Recruitment to permanent vacancies of Grade III of the Rail way Board Secretariat Service are made by the following three methods as per para 18 of the Railway Board Secretariat Service Scheme: "(a) 33 1/3% by direct recruitment on the results of the combined Examinations held by the UPSC for the IAS, IPS & other Central Services Class I and Class 11.
(b) 33 1/3% by promotion on the basis of seniority subject to the rejection of the unfit.
(c) 33 1/3% by limited competitive examination on the basis of a test to be prescribed and conducted, by the UPSC for Assistants/Stenographers Grade 11 between 5 years and 10 years of service in the grade in the Board 's office.
Note For the years 1961 65 only 1/4 of the substantive vacancies were to be filled by direct recruitment on the results of the competitive examination under item (a) above.
In 1955 the Government issued Office Memorandum dated May 7, 1955 (Annexure 'E ' to the Writ Petition) whereby it reaffirmed its decision that there will be no reservation for Scheduled Castes and Scheduled Tribes in posts filled by promotion but that certain concessions were to be given to Scheduled Castes and Scheduled Tribes in the matter of promotion.
The concessions were as follows: "(i) While there would be no reservation for Scheduled Castes and Scheduled Tribes in regard to vacancies filled by promotion, where the passing of tests or examinations had been laid down as a condition for promotion, the authority prescribing the rules for the tests or examinations might issue suitable instructions to ensure that the standard of qualification in respect of members of Scheduled Castes and Scheduled Tribes was not unduly high.
(ii) Where promotions were made on the basis of seniority subject to fitness, cases of persons belonging to Scheduled Castes and Scheduled Tribes were to be judged in a sympathetic manner without applying too rigid a standard and cases of supersession of Scheduled Castes and Scheduled Tribes employees reviewed at a high level viz., if a, Scheduled Caste/Scheduled Tribes employee was superseded in the matter of promotion to Class I and II posts filled on the basis of seniority subject to fitness, the prior orders of the Minister or 725 Deputy Minister concerned were to be taken.
If, however, the supersession was in a Class III or IV post filled on the basis of seniority subject to fitness, the matter was to be reported to the Minister or Deputy Minister concerned within a month of the decision.
(Ministries were given powers to modify this procedure to suit their requirements with the approval of the Minister in charge)" In 1957 the Government decided that there should be provision for reservations for Scheduled Castes and Scheduled Tribes in all grades of services filled by promotion through competitive examination limited to departmental candidates, the quantum of reservation being 12 1/2% for Scheduled Castes and 5% for Scheduled Tribes.
The order of the Government is contained in Office Memorandum dated January 4, 1957, Annexure 'D ' to the Writ Petition.
In April, 1959 the Ministry of Railways issued an order laying down that in the case of any promotion from Class IV to Class III and from Class III to Class 11 and for any promotion from one grade to another in Class 111, where such promotions were made by "selection" and not on the basis of " seniority cum fitness", there should be reservation for the Scheduled Castes and Scheduled Tribes on the same scale as in the direct recruitment.
This order was challenged by Rangachari by a Writ Petition under article 226 of the Constitution which was allowed by the Madras High Court and a writ in the nature of mandamus was granted restraining the Railway Authorities from giving effect to the order of the Railway Board directing reservation of selection posts in Class III of the Railway service in favour of the members of the Scheduled Castes and Scheduled Tribes.
An appeal was brought to this Court by the General Manager, Southern Railway (The General Manager, Southern Railway vs Rangachari)(1) against the judgment of the Madras High Court and it was held in the majority judgment of this Court that the impugned circulars of the Railway Board were within the ambit of article 16(4) of the Constitution and the appeal must succeed.
Consequent upon the judgment in this case the matter was reviewed by the Union Government and it was advised that there was no constitutional compulsion to make reservations for Scheduled Castes and Scheduled Tribes in posts filled by promotion and the question whether the reservation should be continued or withdrawn Was entirely a matter of public policy.
The Union Government came to the conclusion that there should not be any special treatment of Government servants belonging to Scheduled Castes and Scheduled Tribes in the matter of promotions particularly in promotion to Class I and Class II services which require higher degree of efficiency and (1) ; L/P(W)78CI 7(a) 726 responsibility.
As a result of this review of the matter the Central Government issued a memorandum dated November 8, 1963 (Annexure 'C ' to the Writ Petition) which reads as follows: "In posts filled by promotion through competitive examinations limited to departmental candidates, reservations at 12 1/2 per cent and 5 1/2 per cent of vacancies were provided for Scheduled Castes and Scheduled Tribes respectively vide this Ministry 's O.M. No. 5/4/ 55 SCT(1) dated 4th January, 1957 and para 3(iii) of the Brochure issued with O.M. No. 1/2/61 SCT(1) dated 27th April, 1962.
In regard to promotions on the basis of seniority subject to fitness, and those by selection no reservations were provided, but certain concessions were allowed to persons belonging to scheduled ca stes and scheduled tribes vide Ministry of Home Affairs Office Memorandum No. 2/11/55 RPS dated 7th May, 1955 (as amended from time to time), No. 1/1/59 RPS dated 17th March, 1958 and No. 1/4/60 RPS dated 5th March 1960 and paras 20 and 21 of the aforesaid brochure.
The Government of India have reviewed their policy in regard to reservations and other concessions granted to scheduled castes and scheduled tribes in posts filled by promotion and have, in supersession of all previous orders in this regard, decided as follows: (1) Class I and Class II appointments: (a) There will be no reservation for Scheduled Castes and Scheduled Tribes in appointments made by promotion to a Class 11 or a higher service of post whether on the basis of seniority cum fitness, selection, or competitive examination limited to departmental candidates.
(b) In the case of promotions made in or to Class I or Class II on the basis of seniority subject to fitness, cases involving supersession of Scheduled Castes and Scheduled Tribe Officers, will, however, continue to be submitted for prior approval of the Minister or Dy.
Minister concerned.
(2) Class III and Class IV appointments: (a) In the cases of Class III and Class IV appointments, in grades or services to which there is no direct recruitment whatever, there will be reservation at 121 and, 5 per cent vacancies for Scheduled Castes and Scheduled tribes respectively in promotions made by (i) selection or (ii) on the results of competitive examinations limited to departmental candidates.
727 (b) Lists of Scheduled Castes and Scheduled Tribes Officers should be drawn up separately to fill the reserved vacancies; officers belonging to these classes will be adjudged separately and not along with other officers and if they should be included in the list irrespective of their merit as compared to that of the other officers '.
Promotions against reserved vacancies will continue to be subject to the candidates satisfying the prescribed minimum standards.
(e) There will be no reservation in appointments made by promotion on the basis of seniority subject to fitness; but cases involving supersession of Scheduled Caste and Scheduled Tribe Officers, if any, will as at present be reported within a month to the Minister or Deputy Minister concerned for information.
The above decisions take effect from the date of issue of these orders except where selections by the Departmental Promotion Committee under the old orders have already been made, or rules for a competitive examination published.
The contention of the petitioner is that this Office Memorandum (Annexure 'C ' to the Writ Petition) violates the guarantee given to backward classes under article 16(4) of the Constitution and is illegal and ultra vires.
It was alleged that the impugned Office Memorandum (Annexure 'C ') made a discrimination by making provision for reservations in certain types of Class III and IV Services only and not in Class II and I Services, and the classification was discriminatory and there was no rational nexus sought to be achieved by the impugned Office Memorandum.
The argument was also stressed that, Art ' 16(4) was not an exception engrafted on article 16, but was in itself a fundamental right granted to Scheduled Castes and Scheduled Tribes and backward classes and as such it was untrammeled by any other provision of the Constitution.
The petitioner accordingly prays for the grant of a writ in the nature of mandamus quashing the Office Memorandum (Annexure 'C ') and directing respondent No. 1 to restore retrospectively the orders made in its Office Memoranda No. 2/ 11/55 R.PS dated May 7, 1955 and No. 5/4/55 SCT I dated January 4, 1957 and, to consider the claim of the petitioner as member of the Scheduled taste for promotion as Section Officer in the Railway Board Secretariat Service.
Article 14 of the Constitution states: "The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.
" 728 Article 15 provides: "(1).
The State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
(2) (3) (4) Nothing in this article or in clause (2) of Article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Sche duled Castes and the Scheduled Tribes.
" Article 16 is to the following effect: "(1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.
(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place 'of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.
(3) (4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the 'opinion of the State, is not adequately represented in the services under the State.
(5) Article 335 reads as follows: "The claims of the members of the Scheduled Castes and the Scheduled Tribes shall be taken into consideration, consistently with the maintenance of efficiency of administration, in the making of appointments to services and posts in connection with the affairs of the Union or of a State.
" The first question to be considered in this case is whether there is a constitutional duty or obligation imposed upon the Union Government to make reservations for Scheduled Castes and Scheduled Tribes either at the initial stage of recruitment and at the stage of promotion in the Railway Board Secretariat Service Scheme.
The relevant law on the subject 'is well settled,.
Under article 16 of the Constitution, there shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State or to promotion from one office to a higher office thereunder.
Articles 14, 15 and 16 from part of the 729 same constitutional code of guarantees and supplement each other.
In other words, article 16 of the Constitution is only an incident of the application of the concept of equality enshrined.
in article 14 thereof.
It gives effect to the doctrine of equality in the matter of appointment and promotion.
It follows therefore that there can be a reasonable classification of the employees for the purpose of appointment and promotion.
To put it differently, the equality of opportunity guaranteed by article 16(1) means equality as between members of the same class of employees, and not equality between members of separate, independent classes.
Dealing with the extent of protection of article 16(1) of the Constitution, this Court stated in General Manager, Southern Railway vs Rangachari(1) at pages 596 597 of the Report as follows: "It would, be clear that matters relating to employment cannot be confined only to the initial matters prior to the act of employment.
The narrow construction would confine the application of article 16(1) to the initial employment and nothing else; but that clearly is only one of the matters relating to employment.
The other matters relating to employment would inevitably be the provision as to the salary and periodical increments therein, terms as to leave, as to gratuity, as to pension and as to the age of superannuation.
These are all matters relating to employment and they are, and must be.
deemed to be included in the expression 'matters relating to employment ' in Article 16(1).
What Article 16(1) guarantees is equality of opportunity to all citizens in respect of all the matters relating to employment illustrated by us as well as to an appointment to any office as explained by us.
The three provisions Article 16(1), article 14 and article 15(1) form part of the same constitu tional code of guarantees and supplement each other.
If that be so, there would be no difficulty in holding that the matters relating to employment must include all matters in relation to employment both prior and subsequent, to the employment which are incidental to the employment and form part of the terms and conditions of such employment.
" The Court further observed in that case: "Article 16(2) prohibits discrimination and thus assures the effective enforcement of the fundamental right of equality of opportunity guaranteed by Article 16(1).
The words, in respect of any employment used in Article 16(2) must, therefore, include all matters relating to employment as specified in Article 16(1).
There fore, we are satisfied that promotion to selection posts is included both under Article 16(1) and (2)".
(1) ; , 730 It is manifest that the scope of cl.
(4) of article 16 is not co extensive with the guarantee of equality offered to all citizens by cl.
(1) of that Article.
In other words, cl.
(4) of article 16 does not cover the entire field covered by cls.
(1) and (2) of that Article.
For instance, some of the matters relating to employment in respect of which equality of opportunity has been guaranteed by cls.
(1) and (2) do not fall within the mischief of the exception cl.
As regards the conditions of service relating to employment such as salary, increment, gratuity, pension and age of superannuation, there can be no exception even in regard to the backward classes of citizens.
The only matter which cl.
(4) covers is a provision for the reservation of appointments in favour of a backward, class of citizens.
It is well settled that cl.
(4) of Art.16 is an exception clause and is not an independent provision and it has to be strictly construed (See the judgment of this Court in General Manager, Southern Railway vs Rangachari)(2).
It is also apparent that the language of article 16(4) has to be interpreted in the context and background of article 335 of the Constitution.
In other words, in making a provision for reservation of appointments or posts the Government has to take into consideration not only the claims of the members of the backward classes but also the maintenance of efficiency of administration which is a matter of paramount importance.
In this connection, GaJendragadkar, J., as he then was, speaking for the majority in General Manager, Southern Railway vs Rangachari,(1) observed at page 606 of the Report as follows: "It is true that in providing for the reservation of appointments or posts under article 16(4) the State has to take into consideration the claims of the members of the backward classes consistently with the maintenance of the efficiency of administration.
It must not be forgotten that the efficiency of administration is of such paramount importance that it would be unwise and impermissible to make any reservation at the cost of efficiency of administration.
That undoubtedly is the effect of article 335.
Reservation of appointments or posts may theoretically and, conceivably mean some impairment of efficiency; but the risk involved in sacrificing efficiency of administration must always be borne in mind when any State sets about making a provision for reservation of appointments or posts.
It is also true that the reservation which can be made under article 16(4) is intended merely to give adequate representation to backward communities.
It cannot be used for creating monopolies or for unduly or illegitimately disturbing the legitimate interests of other employees.
In exercising the powers under article 16(4) the problem of adequate representation of the back ward class of citizens must be fairly and (1) [1962) 2 S.C.R. 586. 731 objectively considered and an attempt must always be made to strike a reasonable balance between the claims of backward classes and the claims of other employees as well as the important consideration of the efficiency of administration.
" The same view has been reiterated in a later case, M. R. Balaji and Others vs State of Mysore(1), in which Gajendragadkar, J., as he then was, speaking for the unanimous Court stated as follows: "Whilst we are dealing with this question, it would be relevant to add that the provisions of article 15(4) are similar to those of article 16(4) which fell to be considered in the case of The General Manager, Southern Railway vs Rangachari ([1962] 2 S.C.R. 586).
In that case, the majority decision of this Court held that the power of reservation which is conferred on the State under article 16(4) can be exercised by the State in a proper case not only by providing for reservation of appointments, but also by providing for reservation of selection posts.
This conclusion was reached on the basis that it served to give effect to the intention of the Constitution makers to make adequate safeguards for the advancement of Backward Classes and to securer their adequate repre sentation in the Services.
The judgment shows that the only point which was raised for the decision of this Court in that case was whether the reservation made was outside article 16(4) and that posed the bare question about the construction of article 16(4).
The propriety, the reasonableness or the wisdom of the impugned order was not questioned, because it was not the respondent 's case that if the order was justified under article 16(4), it was a fraud on the Constitution.
Even so, it was pointed out in the judgment that the efficiency of administration is of such a paramount importance that it would be unwise.
and impermissible to make any reservation at the cost of efficiency of administration; that, it was stated, was undoubtedly the effect of article 335.
Therefore, what is true in regard to article 15(4) is equally true in regard to article 16(4).
There can be no doubt that the Constitution makers assumed, as they were entitled to, that while making adequate reservation under article 16(4), care would be taken not to provide for unreasonable, excessive or extravagant reservation, for that would, by eliminating general competition in a large filed and by creating wide spread dissatisfaction amongst the employees, materially affect efficiency.
Therefore, (1) [1963] Supp. 1 S.C.R. 439. 732 like the special provision improperly made under article 15(4), reservation made under article 16(4) beyond the permissible and legitimate limits would be liable to be challenged as a fraud on the Constitution.
" In the present case the respondents have alleged in the counteraffidavit that after the decision of Rangachari 's(1) case the Union Government reviewed the whole position and decided that there should not be any special treatment to Government servants belonging to the Scheduled Castes and Scheduled Tribes in the matter of promotion to Class I and Class II Services which require higher degree of efficiency and responsibility.
It was stated in the counter affidavit that the Union Government was satisfied that reservation quotas of promotion were harmful from the point of view of efficiency of Railway Service and therefore the Government issued the memorandum dated November 8, 1963 withdrawing the reservation quotas for Scheduled Castes and Scheduled Tribes officers made in the previous Government orders.
On behalf of the petitioner Mr. N. C. Chatterjee submitted the argument that the provision contained in article 16(4) of the Constitution was in itself a fundamental right of Scheduled Castes and, Scheduled Tribes and it was not open to the Government to withdraw the benefits conferred on Scheduled Castes and Scheduled Tribes by the Government orders dated May 7, 1955 and January 4, 1957.
The learned Counsel based his argument on the following observations of Subba Rao, J., as he then was, in the minority judgment of this Court in T. Devadasan vs The Union of India and Another(1): "The expression 'nothing in this article ' is a legislative device to express its intention in a most emphatic way that the power conferred thereunder is not limited in any way by the main provision but falls outside it.
It has not really carved out an exception, but has preserved a power untrammelled by the other provisions of the Article.
" But the majority judgment of this Court in that case took the view that article 16(4) was an exception and it could not be so construed as to render nugatory or illusory the guarantee conferred by article 16(1).
It was pointed out that though under article 16(4) of the Constitution a reservation of a reasonable percentage of posts for members of the Scheduled Castes and Tribes was within the competence of the State, the method evolved by the Government must be such as to strike a reasonable balance between the claims of the backward classes and claims of other employees, in order to effectuate the guarantee contained in article 16(1).
and for (1) ; (2) ; , at page 700.
733 this purpose each year of recruitment would have to be considered by itself.
Accordingly, the Court struck down the "Carry forward rule" on the ground that it contravened articles 14, 16 and 335 of the Constitution.
In any case, even the minority judgment of Subba Rao, J. does not support the contention of Mr. N. C. Chatterjee that article 16(4) confers a right on the backward classes and not merely a power to be exercised at the discretion of the Government for making a provision for reservation of appointments for backward classes which, in its opinion, are not adequately represented in the Services of the State.
Our conclusion therefore is that article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the Government to make a reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage of recruitment or at the stage of promotion.
In other words, article 16(4) is an enabling provision and confers a discretionary power on the State to make a reservation of appointments in favour of backward class of citizens which, in its opinion, is not adequately represented in the Services of the State.
We are accordingly of the opinion that the petitioner is unable to make good his submission on this aspect of the case.
We shall next deal with the contention of the petitioner that there is discrimination between the employees belonging to Scheduled Castes and Scheduled Tribes in the Railway Service and similar employees in the Central Secretariat Service.
It was said that the competitive departmental examination for promotion to the grade of Section Officers was not held by the Railway Board for the years 1955 1963.
On the contrary, such examinations were held for the Central Secretariat Service and 74 employees belonging to Scheduled Castes and Scheduled Tribes secured the benefit of the provisions of reservation.
In our opinion, there is no substance in this contention.
The petitioner being an employee of the Railway Board ' is governed by the rules applicable to the officers in the Service to which he belongs.
The employees of the Central Secretariat Service belong to a different class and it is not possible to accept the argument that there is any discrimination against the petitioner and violation of the guarantee under article 14 of the Constitution.
It was also contended by Mr. N. C. Chatterjee that the im pugned order, Annexure 'C ', arbitrarily discriminates among Class III employees themselves and Class IV employees them selves.
Under the impugned order reservation is kept for appointments for which there is direct recruitment and for promotions made by (1) selection, or (2) on the result of a competitive examination limited to departmental candidates.
There is no reservation for appointments made by promotion on the basis of seniority cum fitness.
In our opinion, there is no justification for this argument as it is well established that there can be a reasonable 734 classification of employees for the purpose of appointment by promotion and the classification as between direct recruits and promotees is reasonable (See the decisions of this Court in Mervyn Coutindo vs Collector of Customs(1), Bombay, and in section G. Jaisinghani vs Union of India(2).
A grievance was also made by Mr. N. C. Chatterjee that there is discrimination as between Classes I and II where there is no reservation and Classes III and TV where reservation has been made for Scheduled Castes and Scheduled Tribes.
The respondent stated in the counter affidavit that in Classes I and II posts a higher degree of efficiency and responsibility was required and therefore reservation was considered harmful so far as Classes I and II were concerned.
In view of the requirement of efficiency in the higher echelons of Service it is obvious that the classification made in the impugned order is reasonable and the argument of Mr. Chatterjee on this point must also be rejected as untenable.
For the reasons expressed we hold that the petitioner has made out no case for the grant of a writ under article 32 of the Constitution.
The application accordingly fails but, in the circumstances of the case, we do not propose to make any order as to costs.
R.K.P.S. Appeal dismissed.
| By an office memorandum of the Central Government issued on the 4th January 1957, in respect of posts filled by promotion through competitive examinations limited to departmental candidates, reservations at 12 1/2% and 5 1/2% of vacancies were provided for Scheduled Castes and Scheduled Tribes respectively.
By an earlier office memorandum of the 7th May 1955, in regard to promotions on the basis of seniority subject to fitness and those by selection, no reservations were provided but certain concessions were allowed to members of the backward classes.
After the decision of the Supreme Court in the case of the General Manager, Southern Railway vs Rangachari, ; , the matter was reviewed by the Central Government and it was advised that there was no consti tutional compulsion to make reservations for Scheduled Castes and Scheduled Tribes in posts filled by promotion and the question whether the reservation should be continued or withdrawn was entirely a matter of public policy.
Subsequent to the review, by a further office memorandum issued on the 8th November 1963 the Government notified its decision inter alia, that there would be no reservation for Scheduled Castes and Scheduled Tribes in appointments made by promotions to Class I and II services as these required a higher degree of efficiency and responsibility; but that such reservations would continue in certain grades and services in Class III and Class IV.
The petitioner was a class III employee of the Railway Board Secretariat Service and claimed promotion to the post of a Section Officer in Class II on the basis of the provision for reservations made in the Government 's Memorandum of January 4, 1957.
By a writ petition under article 32 of the Constitution he challenged the latest office memorandum of November 8, 1963 and prayed for a restoration with retrospective effect of the office memoranda issued on May 7, 1955 and January 4, 1957.
It was contended on his behalf, inter alia (i) that the impugned order violated the guarantee given to the backward classes under article 16(4) of the Constitution; article 16(4) was not an exception engrafted on article 16 but was in itself a fundamental right granted to the Scheduled Castes and Scheduled Tribes.
(ii) that the order was discriminatory,, because (a) it made a discrimination by making Provision for reservation in certain types of Class III and Class IV services only and not in Class II and I Services, (b) reservation was kept within Class III and Class IV for appointments for which there was direct recruitment and for promotions made by (1) selection, or (2) on the 722 result of a competitive examination limited to departmental candidates, but no reservation was provided for in respect of appointments made by promotion on the basis of seniority cum fitness; and (c) there was discrimination between the employees belonging to Scheduled Castes and Scheduled Tribes in the Railway Service and similar employees in the Central Secretariat Service on the ground that a competitive departmental examination for promotion to the grade of Section Officers was not held by the Railway Board for the years 1955 63 but such an examination was held for the Central Secretariat Service and 74 employees belonging to the Scheduled Castes and Scheduled Tribes secured the benefit of the provisions for reservation.
Held: (i) Article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the Government to make a reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage of recruitment or at the stage of promotion.
Article 16(4) is an enabling provision and confers a discretionary power on the State to make a reservation of appointments in favour of a backward class of citizens which, in its opinion, is not adequately represented in the Services of the State [734 B D].
General Manager, Southern Railway vs Rangachari, ; , referred.
(ii) The impugned order was not discriminatory.
(a) In view of the requirement of efficiency in the higher echelons of service it is obvious that the classification made in the impugned order between Classes I and II where no reservation was made and Classes III and IV where reservation was provided for, was reasonable.
[735 B, C].
(b) It is well established that there can be a reasonable classification of employees for the purpose of appointment by promotion and the classification as between direct recruits and promotees is reasonable [734 H 735 A].
Mervyn Coutindo vs Collector of Customs, Bombay, ; and section G. Jaisinghani vs Union of India, ; referred to.
(c) The petitioner being an employee of the Railway Board was governed by the rules applicable to the officers in the Service to Which he belonged.
The employees of the Central Secretariat Service belonged to a different class and it could not be said that there was any discrimination against the petitioner in violation of article 14.
[734 F G].
|
Appeal No. 580 of 1962.
Appeal from the judgment and decree dated May 1, 1961, of the Madras High Court in Writ Petition No. 975 of 1959.
R.M. Seshadri.
and R. Gopalakrishnan, for the appellant.
R. Ganapathy lyer, for respondent No. 1.
A. Ranganadham Chetty and A. V. Rangam, for respondent No. 2.
March 3, 1964.
The Judgment of the Court was delivered by AYYANGAR, J.
This appeal comes before us by virtue of a certificate of fitness granted by the High Court of Madras under article 133(1)(c) of the Constitution against its judgment dismissing a petition filed by the appellant under article 226 of the Constitution seeking a writ of prohibition against the Corporation of Madras challenging the constitutional validity.
of a notice requiring the appellant to pay profession tax.
The appellant held office as the last Governor General of India.
Under section 3 of Central Act XXX of 1951 the appellant is entitled to a pension of Rs. 15,000/ per annum and has been drawing this sum residing in the city of Madras.
The Corporation of Madras the first respondent before us demanded profession tax from the appellant under section 111(1)(b) of the City Municipal Act, 1919 hereinafter called the Act for the year 1958 1959 on the ground of the appellant 's residence within the city for the period therein specified and his drawing the pension to which he was entitled.
The appellant addressed a communication to the Corporation asserting that this demand was illegal as the Corporation was empowered by the relevant constitutional provisions merely to levy a tax "on a profession, 965 trade, calling or employment" and that as he as a pensioner did not fall under any of these classes, the said demand was illegal.
The authorities of the Corporation, however, insisted on compliance with the demand on the ground that under the express terms of the Act persons in receipt of pensions were also liable to the tax.
The appellant thereupon filed a writ petition for the relief already set out, and as the validity of the State Act was impugned impleaded the State of Madras also as a respondent.
It would be seen from the foregoing that the question for consideration is whether the 1st respondent Corporation is entitled to levy a tax on pensioners in respect of the pensions received by them.
In order to appreciate the submissions made to us by learned Counsel for the appellant it would be necessary to set out the history of the legislation in relation to profession tax and the impugned tax on persons in receipt of pensions applicable to the City of Madras because it is on a construction of these provisions that the learned Judges of the High Court have upheld the validity of the levy and dismissed the appellant 's writ petition.
For this purpose it is not necessary to travel to any period anterior to the enactment of the Madras City Municipal Act (Madras Act IV of 1919) which with certain amendments to be referred to presently is still in force.
The Act received the assent of the Governor on March 26, 1919, of the Governor General in June, 1919 and came into force on publication in the Gazette which was in the same month.
Having been enacted while the powers of the Local Legislatures were governed by the Government of India Act, 1915, the constitutional validity of the legislation is not open to any challenge.
Section 111(1 of this enactment ran "Every person not liable for the companies ' tax.
who, within the city and for the period prescribed in Sec. 113, exercises a profession, art, trade or calling or holds an appointment, public or private, bringing him within one or more of the classes of persons specified in the taxation rules in Schedule IV shall pay by way of licence fee and in addition to any other licence fee 966 that may be leviable under this Act a tax as determined under the said rules but in no case exceeding rupees five hundred in the half year and such tax may be described as the profession tax.
" The Section had two explanations of which the second is material and this reads: Explanation 2 "A person in receipt of a pension paid from any source shall be deemed to be a person holding an appointment within the meaning of this section. ' The next change in the relevant provision was effected by Madras City Municipal Amendment Act, 193,6 (Madras Act X of 1936) which came into force on 14th April 1936.
By this amendment a new section section
III was substituted ,for the old one just set out, and under this Explanation (2) was deleted and the substituted provision ran : "III(1).
If the Council by a resolution determines that a profession tax shall be levied, every person not liable to the tax, on companies, who after the date specified in the notice published under sub sec.
(2) of Sec.
98 A in any half year (a) exercises a profession , art or calling or transacts business or holds any appointment, public or private (i) within the city for not less than sixty days in the aggregate, or (ii) outside the city but who resides in the city for not less than sixty days in the aggregate; or (b) resides in the city for not less than sixty days in the aggregate and is in receipt of any pension or income from investments, shall pay in addition to any licence fee that may 967 be leviable under this Act, a half yearly tax assessed in accordance with the rules in Schedule IV in no case exceeding rupees five, hundred.
" Along with this was added a new section section
98 A which ran : Sec. 98 A(1): "Before the council passes any resolution imposing a tax or duty for the first time it shall direct the Commissioner to publish a notice in the Fort St. George Gazette and in the local papers of its intention and fix a reasonable period not being less than one month from the date of publication of such notice in the Fort St. George Gazette for submission of objections.
The Council may, after considering the objections, if any, received within the period specified, determine by resolution to levy the tax or duty.
Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied.
When the Council shall have determined to levy any tax or duty for the first time or at a new rate the Commissioner shall forthwith publish a notice in the manner laid down in sub section (1) specifying the date from which the rate at which and the period of levy, if any, for which such tax or duty shall be levied.
" At this stage it is necessary to refer to Schedule IV in accordance with which the tax has to be assessed under the terms of section 111(1).
In the Act as enacted in 1919 the relevant rule in Schedule IV divided persons assessed to profession tax etc.
into 8 classes, based upon the amount of ,monthly salary received in the case of those holding appointments, and income derived in the case of those in trade, art calling etc.
Each of these classes was again sub divided ,into two the first sub class comprising "Persons holding appointments upon a monthly salary" and the other of 968 "persons exercising any profession, trade, art, calling or transacting business".
It would be seen that having regard to Explanation 2 to section 111, as it stood in 1919, before its amendment by Act X of 1936 by reason of the provision which enacted that "persons in receipt of pension" were deemed to be "persons holding appointments" when the rule in Schedule IV referred to "persons holding appointments" it included by the statutory fiction pensioners who on the basis of the amount of pension which they derived were classified as "persons holding appointments" under the various classes.
But when this Explanation to section Ill was deleted by the Amending Act X of 1936 and when the new section 111,(1)(b) referred to the "half yearly tax assessed in accordance with rules in Schedule IV, it was urged that there could not have been an assessment of persons in receipt of pension unless they could be comprehended as within the category of persons holding appointments, or of persons exercising any profession, trade, or art or calling",as these were the only classes relevant to the present purpose who were within the scope of the rules under Schedule IV.
We shall refer to the submission based on this feature as regards the terminology employed in Schedule IV in its proper place.
The Corporation of Madras availed itself of the provisions of section 98 A and after the issue of the notices prescribed by it passed a resolution at a meeting held on March 31, 1937 to levy inter alia "profession tax" for the year 1937 38 at the rates which were specified in the resolution.
As regards "profession tax", the resolution read : "Resolved that the profession tax in respect of clauses 1, 2, 3, 4, 5 and 6 be fixed at the maximum rate and 25 per cent over and above the minimum rates prescribed in Schedule IV of the Act in respect of clauses 7, 8 and 9." This resolution further specified that the tax at the rates therein set out which were higher 'than what prevailed before, were to have effect from April 1, 1937.
Notwith standing the apparent inapplicability of the rules in Schedule IV to the levy of profession tax on pensioners, the Corporation continued to assess pensioners to the said tax and 969 collected the same.
The lacuna in the enactment was Apparently noticed in 1942 when by a notification in the Official gazette the Schedule was amended in exercise of the powers conferred on Government by section 347(3) of the Act.
Under the amendment instead of the words "Persons holding any appointment or persons exercising profession, trade or calling etc. "the classes 'Were divided, on the basis of "the half yearly income received by the individual specified in section 111(1)".
This amendment to the Schedule was directed to come into force from April 1, 1942.
The relevant terms of Schedule IV have continued up to date in the same from as amended in 1942 only the rate of tax has been progressively increased; first in 1950, then in 1958 and again in 1961, but in the view we take of the principal contention raised by the appellant it is not necessary to set out or deal with these increases.
Pausing here the ground upon which the demand for "profession tax" made by the Corporation was impugned may be briefly stated.
The power of the Corporation to levy the tax is dependent on the subject of the tax being within State legislative power under the Constitution.
The relevant 'entry in the Legislative Lists conferring taxing power on the State under which alone, if possible, the present levy could be supported was item 60 in the State List in Schedule VII of the Constitution reading: "Taxes on profession, trades, callings and ' employments.
" Being a "pensioner" cannot be a "profession, trade, business or calling", nor could a tax on a person because he is in receipt of a pension be said to be a tax on "employments".
The tax therefore under the last portion of section 111(1)(b) reading Profession tax on persons "in receipt of any pension or income from investments" is nothing but a tax on income falling within Entry 82 of the Union list.
If, therefore, the Corporation could not justify the tax as being within the State legislative power the only manner in which it could be done would be by reference to article 277 of the Constitution by which "taxes, duties, etc." ' which "were being lawfully levied" prior to the commencement of the 970 Constitution were permitted to be levied "notwithstanding that the tax was in the Union List" and "to be applied to the same purposes" as before.
Unless therefore the Corporation could make out that the tax now impugned was being lawfully levied from before the Constitution the levy would be illegal and besides there was the complication introduced by the enhancement of the rates of tax which, as stated earlier, were effected in April, 1950, April 1958 and in 1961.
Leaving aside for the moment the question of the effect of the enhancement of the rate, we have to see whether it has been established that the duty was lawfully levied by the Corporation prior to the Constitution.
The answer to the question whether it was "lawfully levied" prior to 26th January, 1950 when the Constitution came into force would depend upon the effect of certain provisions of the Government of India Act, 1935.
Under that enactment, as under the Constitution, the State legislative power as regards taxes of the nature now in controversy was couched in terms identical with that employed in entry 60 of the State List in the Constitution.
Entry 46 in the Provincial Legislative List under the Government of India Act, 1935 ran: "Taxes on profession, trades, callings and employments" : and "taxes on income" fell within the exclusive Federal 'Legislative power under Entry 54 of List I.
By the Indo Burma Miscellaneous Provisions Act, 1940 the Parliament of the U.K. enacted section 142 A to whose terms we shall advert later and by the same enactment entry 46 was amended and the words : "Subject, however, to the provisions of section 142 A" were added at the end of entry 46.
Here, again, it would be seen that if the right of the Corporation to levy profession tax on the pension received by a pensioner had to rest on the legislative entries it would fail because it was ,outside the legislative power of the Province under the Lists read with section 100 of that Act corresponding, to article 246 of the Constitution.
The validity of the levy during the period when the Government of India Act was in force i.e. between 1st April, 1937 and 25th January, 1950 was dependent on 971 its falling within the saving contained in section 143 (2) of the Government of India Act which ran : "Any taxes, duties, cesses or fees which, immediately before the commencement of Part III of this Act, were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the Province, municipality, district or other local area under a law in force on the first day of January, nineteen hundred and thirty five, may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Federal Legislative List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by the Federal Legislature." No doubt the Amending Act was not in force on 1st January, 1935 having been passed in April 1936, but this would not take it out of section 143 (2) because para.3 of the Indo Burma (Transitory Provisions) Order, 1937, being an Order in Council by His Majesty in Council authorised by section 310 of the Government of India Act, provided : "Para 3(1): For a period of two years from the commencement of Part III of the Indian Act, the provisions of subsection (2) of section one hundred and forty three of that Act (which authorises the continuance until provision to the contrary is made by the Federal Legislature, of certain provincial taxes falling within the Federal List) shall have effect as if the reference to the first of January nineteen hundred and thirty five were a reference to the commencement of the said Part Ill." It would follow, therefore, that for the present demand to be sustained as valid it would be sufficient if it was shown that the tax was lawfully levied immediately prior to the commencement of Part III of the Government of India Act, 1935, i.e., on 31st March, 1937.
The learned Judges of the High Court held that this condition was satisfied and on this basis they have dismissed the appellant 's petition.
972 Learned Counsel for the appellant submitted four points in support of the appeal : (1) That the amending Act X of 1936 Was not validly passed by reason of its contravening the Devolution Rules framed under section 45 A of the Government of India Act, 1919 by which Local Governments were given legislative power inter alia to levy taxes on professions, trades, etc.
but that the present tax which is really a "tax on income" was a Central subject outside the competence of the Local Legislature, (2) Even assuming that Act X of 1936 was valid, the tax which was permitted to be levied under it was, having regard to the terms of section 111 ( 1 ) a new tax which was levied for the first time by the resolution of the Corporation only on and from April 1, 1937 and, therefore, the present tax was not in operation prior to the commencement of Part III of the Government of India Act, 1935 and not therefore saved by section 143(2) of that Act, (3) Besides, between 1st April, 1937 to 1st April, 1942 it was not lawfully levied by reason of the lacuna created by the words of the rules in Schedule IV being inapplicable to the levy of a tax on pensioners, (4) The increase.
in the rates from 1937 onwards could not be justified even under section 143 (2) or article 277 and by reason of these changes in rates the tax became virtually a new tax and could not continue to be lawfully levied to any extent after the increases.
The first point need not detain us long.
Prima facie it would seem that there being no rigid distribution of legis lative power between the Central and Local Governments under the Government of India Act, 1919 any infraction of the rules made under the Devolution Rules framed under section 45 A would be validated by section 80 A(3) and section 84(2) of the Government of India Act, 1919.
The learned Judges of the High Court before whom this contention was urged rejected it, and the learned counsel submitted that the decision on this point was not correct.
But in the view that we took of the other submissions made to us, we did not hear learned counsel fully on this point and therefore do not propose to express any final opinion on the tenability of the argument on this head.
973 As preliminary to the consideration of the second point it would be necessary to advert to one feature of the change effected by the Amending Act of 1936 to the tax levy.
Under section 111, as it originally stood, the liability to pay the tax, i.e., the charge for the tax, was imposed by virtue of the statute itself, on persons who for the period prescribed "exercised a profession or trade or calling or held an appointment", persons in receipt of pensions being deemed to be persons holding appointments.
This structure as regards the imposition of liability was altered by the Amending Act.
Under the provision, as recast, before a liability to pay the tax could arise the Council had to determine by a resolution that profession tax shall be levied and it was only that resolution which brought the charge into operation.
Thus, the resolution of the Council was substi tuted for the statute itself as the mode by which the charge was to be imposed.
There was also a second change that was introduced by rendering residence for six months within the city, besides the receipt of pension in the city, a necessary ingredient of the chargeability of the "profession tax" on pensioners.
The effect of these two changes now calls for consideration.
On the amendment of section Ill by the Act of 1935 coming into force in April 1936, the statutory imposition of the charge to tax laid on persons in receipt of pensions within the city of Madras ceased, and the liability to tax as regards the period after that date was dependent on the passing of a resolution by the Council in terms of the amended section III( 1 ) of the Act.
In this con nection it has to be pointed out that though recourse to the procedure as respects previous publication etc.
prescribed by section 98 A was necessary only in the case of taxes newly levied, and might have been adopted in the present case because of the enhancement of the rates, still, a resolution ,of the Council was necessary to impose the tax as without it, no liability to profession tax would arise.
The charge to tax was imposed, as stated earlier by the resolution of the Council which was to have effect from April 1, 1937.
In other words by reason of the repeal of the original section III, the statutory charge to tax on pensions ceased in April 1936.
A charge was imposed again under the resolution of the Council effective from 1st April, 1937, so that 974 between April 1936 to 31st March, 1937, no charge was imposed by virtue of any "law".
Learned Counsel for the Appellant submits that this is in effect a new levy a levy of a tax which was not legally in existence on 31st March, 1937, and if this levy could not be supported as being sanctioned by section 143(2) of the Government of India Act, 1935, it is common ground that the lawfulness of the levy cannot be sustained.
We consider this submission well founded.
If the statutory charge to profession tax imposed on pensioners by the Act of 1919, was lifted by the Act of 1936, and the tax again came into operation only on 1st April, 1937, it would follow that there was no "levy of the tax" "immediately before" the commencement of Part III of the Government of India Act, 1935, so as to bring it within the saving in section 143(2) of that Act.
Besides, the two circumstances.
viz. : that residence within the city for a specified period was made a condition of the liability to the tax, as well as the increase in the rates would both serve to emphasise that the levy was a new one, with a different texture and not a continuance of the tax which was levied just prior to the 1st April, 1937.
Learned Counsel for the respondents the Corporation of Madras and the State have urged that it was in substance the old levy.
We are unable to agree.
The mere fact that prior to 1st April, 1937 the Corporation had under Act X of 1936 the power to bring the tax into force by a resolution does not on a proper construction of section 143(2) bring it within the range of those taxes or duties which "were being lawfully levied" prior to the commencement of Part III of the Government of India Act which alone are permitted to be continued to be levied notwithstanding that these duties were in the Federal Legislative List.
This question has been considered by us in great detail in The Town Municipal Committee, Amravati vs Ram Chandra Vasudeo Chimote and Another, etc.(1) in which judgment has been pronounced today and it is unnecessary to re examine the same.
The mere existence of a power to bring a tax into operation, cannot, as pointed out, be equated with "a tax (1) ; 975 which was being lawfully levied" before Part III of the Government of India Act, 1935.
The 3rd submission of learned Counsel for the appellant is also well founded.
The conclusion we have reached as to the effect of the amendment to section 111 by Act X of 1936, and of the tax being imposed by resolution of the Council from 1st April, 1937 not being a tax which was being lawfully levied immediately prior to 1st April, 1942, is reinforced by reference to the rules in Schedule IV which; remained unamended till 1942.
Under section 111(1) as amended, the tax could be levied only in accordance with the rules in Schedule IV and as those rules did not make a provision for the levy of a tax on pensioners, it would follow that the tax "was not being lawfully levied" on them.
As already pointed out, the relevant rules in that Schedule were framed at a time when Explanation 2 formed part of section III and "pensioners" were deemed to "hold appointments".
With the deletion of the Explanation, the fiction created by the original Madras Act IV of 1919 ceased and thereafter if the rules in Schedule IV had to be applied to them these had to be suitably modified.
This, as we have pointed out earlier, was done only from April 1, 1942, so that in reality taxes on pensioners were "lawfully" levied upto 1936 and then after a break from April 1, 1942, we use the word "lawfully" on the assumption that this could ' have been legally done under the Government of India Act, 1935, a point already discussed.
The learned Judges of the High Court have rejected the argument addressed to them under this head by reference to section 18 of the Madras General Clause Act corresponding to section 24 of the General Clauses Act (Central Act X of 1897).
With great respect to the learned Judges we do not see how this provision affords any assistance in the matter.
The Schedule and the rules continued without repeal or amendment when the new section III (1) was substituted in 1936, and when this section made a reference to the rules in Schedule IV it could only be a reference to the rules in the Schedule IV which stood ' unaltered.
If the phraseology employed in the Schedule was inappropriate to a class which fell within section 111(1), the, only effect would be that the tax could not be levied, because 976 of the defect in the law imposing the tax, but such a situation is not remedied by reference to the provision in the General Clauses Act on which the learned Judges have relied.
If, therefore, the, tax was one not lawfully levied just prior to April 1, 1937 and was one brought in after the Government of India Act, 1935 came into force, and really only from April 1, 1942 assuming this to be lawful it is obvious that the validity of this tax could not be sustained as a continuation of a lawful pre existing levy under section 143 (2).
In this view it is not necessary to consider the last of the points urged by learned Counsel and examine whether in case of an increase of rate, the entire tax would become a new tax and so unconstitutional or whether it is only the increase in the rate that would become unenforceable.
Learned Counsel for the respondent Corporation submitted that the tax could not be deemed to be a tax on income, as was suggested by the appellant, but was really a tax on employment because it was in consideration of past services during employment that pension was payable.
This argument was admittedly not urged before the learned Judges of the High Court and is obviously untenable.
The taxes specified in item 60 are taxes on the carrying on of a profession, trade, etc.
and would, therefore, apply only to a case of present employment.
The mere fact that a person has previously been in a profession or carried on a trade, etc.
cannot justify a tax under this Entry.
The tax on the receipt of pension or on the income from investments which is referred to in the last part of section 1 1 1 ( 1 ) is in truth and substance a tax on income and in fact the argument before the High Court proceeded on this basis, so have the learned Judges.
At the time the tax is levied the pensioner is in no employment but is only in receipt of income though it might be for past services, in an employment.
He next submitted that Act X of 1936 which had been enacted prior to the Government of India Act, 1935 was continued as an existing law by section 292 of the Government of India Act and as there was nothing in the Government of India Act against its continuance it would have effect 977 even if the terms of section 143 (2) were not satisfied by the present levy.
The learned Judges of the High Court accepted this submission.
In our opinion, they were in order.
The question of the correlation between article 372 corresponding to section 292 of the Government of India Act and article 277 corresponding to section 143(2) of the Government of India Act was considered by this Court in South India Corporation (P) Ltd. vs The Secretary, Board of Revenue, Trivandrum(1) and this Court said: "It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to control cases where the special provision does not apply.
The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finances, and article 277 saves the existing taxes etc.
levied by States, if the conditions mentioned therein are complied with.
While article 372 saves all pre Constitution valid laws, article 277 is confined only to taxes, duties, cesses or fees lawfully levied immediately before the Constitution.
Therefore, article 372 cannot be construed in such a way as to enlarge the scope of the saving of taxes, duties, cesses or fees.
To state it differently, article 372 must be read subject to article 277.
" Learned Counsel next drew our attention to section 142 A(1) of the Government of India Act, 1935 and faintly suggested that it might afford him some assistance.
This provision, again, was not adverted to before the learned Judges of the High Court and for a proper reason.
section 142 A(1) which corresponds to article 276(1) of the Constitution enacted : "Notwithstanding anything in section one hundred of this Act, no Provincial law relating to taxes for the benefit of a Province or of a municipality, district board, local board or other local authority therein in respect of professions, (1) ; 134 159 S.C. 62 978 trades, callings or employments shall be invalid on the ground that it relates to a tax on income.
" This section would assist the respondent only if tax imposed were one on a profession, trade, calling, or employment and in that event the section provides that such a tax shall not be deemed to be a tax on income, but where the tax imposed is one not on a profession, etc.
at all, it does not mean that the State might levy a tax on income and call it "profession tax".
This is sufficient to dispose of a similar argument as regards the scope of the amended Entry 46 in the Provincial Legislature List (List II) to which we have adverted earlier.
The appeal accordingly succeeds and the appellant is held entitled to the relief prayed by him in the, filed in the High Court, viz., a writ of Prohibition against the respondent Corporation from enforcing the demand.
The appellant will be entitled to his costs from the respond ents here and in the High Court.
Appeal allowed.
| Section 76(l) of the , provides that an appeal shall lie from any decision of the Registrar under the Act or the rules made thereunder, to the High Court having jurisdiction, but the Act did not make any provision with regard to the procedure to be followed by the High Court in the appeal or as to whether the order of the High Court was appealable: Held that the High Court had to exercise its appellate jurisdiction under section 76 of the Act in the same manner as it exercised its other appellate jurisdiction, and when such jurisdiction was exercised by a Single Judge, his judgment was appealable under el.
15 of the Letters Patent.
National Telephone Co. vs Postmaster General ([1913] A.C. 546),R. M. A. R. A. Adaikappa Chettiar vs Ra.
chandrasekhara Thevar (74 I.A. 264), Secretary of State vs Chellikani Rama Rao (I. L.R. 39 Mad. 617) referred to.
The power conferred by section 108 of the Government of India Act, 1915, on the High Courts, of making rules for the exercise of their jurisdiction by Single Judges or by Division Courts could be exercised not only in respect to such jurisdiction 1O29 as the High Courts possessed when the Act of 1915 came into ' force; but also in respects of jurisdictions I conferred on the High Court by subsequent legislation, e.g., s, 76 of the .
Under the rules (if construction enunciated in section 8 of the General Clauses Act and section 38 of the Interpretation Act, which are of general application, the reference to s.108 of the Government of India Act, 1915, in el.
15 of the Letters Patent should, after the enactment of the Constitution of 1950, be read as reference to the corresponding provisions of article 225 of the Constitution.
The ambit of the power conferred on the High Courts by a.108 of the Government of India Act, 1915, is not limited by s.106(l) of the said Act or by el. 16 of the Letters Patent of the Calcutta High Court.
Indian Electric Works vs Registrar of Trade Marks (A.I.R. overruled.
Secretary of State vs Mask & Co. (67 I.A. 222) and the Gur dwara Case (63 I.A. 180) distinguished.
The respondents, a company registered in England, manu factured sewing thread with the device of an Eagle with outspread wings known as the "Eagle Mark" as their trade mark, and since 1896 this thread was being sold in the Indian markets on an extensive scale.
The appellants, a company registered in India, began in 1940 to sell sewing thread with the device of a bird resembling an eagle with wings fully spread out with the words "Eagle Brand" as their mark.
On the objection of the respondents the appellants subsequently changed the name to "Vulture Brand" without changing the mark in other respects.
The respondents instituted an action against the appellants for passing off, but that was dismissed.
The appellats subsequently applied for registration of their trade mark but their application was disraissed by the Registrar on the ground that the appellants ' mark so nearly resembled the respondents ' mark as to be likely to deceive the public and cause confusion.
This order was reversed by a Single Judge of the High Court of Bombay but restored on appeal by a Division Bench: Held (i) that the judgment of the Division Bench upholding the order of the Registrar rejecting the application, on the ground that the mark was likely to deceive and cause confusion, was right; (ii) that the considerations relevant in a passing off action are somewhat different from those which are relevant in an application for registration of a trade mark under the , and the earlier judgment of the High Court in the action for passing off was not conclusive on the matter.
|
Civil Appeal No. 54 of 1969.
From the Judgment and Order dated 23 10 1968 of the Mysore High Court in R.F.A. No. 25/63.
B. D. Dal, section Bhandare, A. N. Karkhanis and Miss M. Palival for the Appellant.
V. section Desai and N. Nettar for the Respondent.
164 The Judgment of the Court was delivered by SARKARIA, J.
This appeal by the defendant, on certificate, is directed against a judgment, dated October 23, 1968, whereby in First Appeal, the High Court of Mysore set aside the judgment and decree passed by the joint Civil Judge, Senior Division, Belgaum.
The pedigree of the family given below will be helpful in understanding the facts leading to this appeal: Ravalojirao (died before 1900) | | | Narayanarao Ramachandrarao (died in 1924) (died on 20 1 1955) | | Tuljeramarao Krishnabai (died in 1944) (Defendant appellant) | | | | Appasaheb Nanasaheb (Pltf.1.) (Pltf.2.) Sou.
Vasundhararaje (Pltf. 3.) | | | | | | | Ashok Kumar Pushpendra Virendra Indrajit Ravalogirao | (Pltf.3) Singh Singh Singh (Pltf.9) | (pltf.6) (pltf.7) (pltf.9) Narayanarao (Pltf.10) By a registered document, dated July 25, 1902 (exhibit 39), executed by Narayanarao, six Desgat lands situated in villages Nanandi, Umarani and Nandikurli totalling about 120 acres, were received by Ramachandrarao, for separate living and maintenance of himself and his male lineal descendants.
Out of the lands covered by the said deed, three lands comprised in Survey Nos. 114 (26 acres 30 gunthas), 115 (9 acres 38 gunthas) and 116 (26 acres 34 gunthas), totalling about 63 acres and 22 gunthas, situate in the area of village Umarani, Taluka Chikodi, are the subject matter of the suit, out of which this appeal has arisen.
The respondents herein, who are the grand sons and great grandsons of Narayanarao, on July 24, 1960, instituted Suit No. 26/60 in the Court of Civil Judge, Belgaum against Smt.
Krishnabai, appellant, for possession of the said lands and for recovery of past and future mesne profits, with these allegations: (i) that the suit lands were Desgat Watan lands and were part of the Desgat Watan estate of Nanandi, (ii) that by virtue of an ancient and immemorial family and territorial custom, the Desgat estate of Nanandi was impartible and descended from generation to generation to the seniormost member by the rule of primogeniture, while the junior members of the family were only given some lands for their maintenance by the holder of the Desgat for the time being; (iii) that till his death, 165 the appellant 's father continued to be an undivided member of the Joint family consisting of himself and the plaintiffs; and (iv) that on July 31, 1956, a partition by metes and bounds has taken place between the plaintiffs inter se under a partition deed.
The suit was resisted by the defendant appellant.
She denied the alleged ancient, family and territorial custom of primogeniture.
She denied that the property formed part of the Desgat Watan estate of Nanandi.
She further denied that her father, Ramachandrarao, came into possession of the suit land for his maintenance.
She further pleaded that Ramachandrarao and his brother Narayanarao had separated during their life time and the suit lands and some other lands were given to Ramachandrarao in the partition between the two brothers towards a part of his share, and it was agreed that the share of Ramchandrarao in other family properties would be separated and settled at some future convenient time.
She further stated that since 1902, Ramachandrarao was in separate possession and enjoyment of the suit lands till his death on January 20, 1955, and that at the time of his death he was not an undivided member of the joint family of himself and the plaintiffs.
She further pleaded that on her father 's death she succeeded to the suit lands, which were his separate property.
She further relied on the Bombay Pargana and Kulkarni Wantans (Abolition) Act, 1950 (Bombay Act No. 60 of 1950), (for short, called the Act), and the re grant of the land made in favour of her father, under that Act.
The learned trial judge by his judgment, dated September 29, 1962, dismissed the respondents ' suit with these findings: (a) that the alleged custom of impartibility and devolution of property by the rule of primogeniture had not been proved; (b) that there was a severance of the joint family consisting of the two brothers, in 1902, when they had agreed to separate, that since then for about 53 years till his death in 1955, Ramachandrarao was living separately and enjoying the suit land as his separate property; (c) that the suit lands were originally Watan lands, but they were not so at the date of the suit because the Bombay Act 60 of 1950, which came into force on May 1, 1951, had abolished Watans and thereafter the suit lands were, on the application of its holder, Ramachandrarao, regranted in his favour; that the plaintiffs were aware of Ramachandrarao 's application for the regrant and they had tacitly assented to the regrant in his favour.
166 Aggrieved, the plaintiffs preferred an appeal in the High Court of Mysore.
The High Court affirmed the finding of the trial court, that the custom pleaded by the plaintiffs with regard to the impartibility of the property had not been established.
It observed that "the onus of proving partition is on the defendant, "but the only evidence in support of her case that Ramachandrarao was divided, is Exhibit No. 39".
The High Court construed the deed (exhibit 39) with the aid of its translations into English, one made by the trial judge and the other by the High Court Translator.
It then took note of these features in support of the 'theory of partition ': "(a) Permanency of the arrangement.
The deed provides that Ramachandrarao and his descendants in the male line shall enjoy the property from generation to generation without interference from the grantor.
(b) Cesser of commonsality.
The deed says that Ramachandrarao desired to live separately and therefore the lands were granted to him.
The evidence is that Ramachandrarao lived separate from 1902.
There is no evidence to the contrary.
" It then listed these features to negative the 'theory of partition ': "(a) The nomenclature of the deed.
It is styled as a deed of maintenance.
(b) It was executed by one of the parties only.
If it was intended to be a partition deed it would have been executed by both the parties each relinquishing his rights in the properties not allotted to him.
(c) The deed says that the lands were given to the grantee and his descendants in the male line for maintenance only and they should enjoy the lands continuously.
(d) The total extent of the Desgat lands was over eight thousand acres; if partition was intended, Ramachandrarao who was entitled to a one half share would not have been contented with 90 acres valued at Rs. 3,400/ .
" After cataloguing these pros and cons the High Court concluded: "In our judgment, Exhibit 39 considered along with the circumstances in which it was executed, does not establish the defendant 's case that Ramachandrarao was divided from Narayanarao in 1902 and that the suit lands, among others, were allotted to Ramachandrarao 's share.
We are of the view that on the erroneous but honest belief that Des 167 gat was an impartible estate, Narayanarao granted the lands to Ramachandrarao and his descendants in the male line in lieu of their maintenance.
When Ramachandrarao died without male issue, the interest granted ceased or the tenure came to an end.
The plaintiffs who are the surviving members of the family are entitled to resume the lands.
" Although no such plea was taken by the plaintiffs in the plaint, the High Court held that in view of Section 90 of the Indian Trust Act, the regrant made, after the abolition of Watans, under the Act in favour of Ramachandrarao must ensure for the benefit of the family of the Watandars including the plaintiffs, because Ramachandrarao at the time of his death was holding the suit land as an undivided member of the joint family, for his own benefit and that of the other members of the undivided family.
Since there was no evidence as to the occupancy price paid by Ramachandrarao to obtain the regrant, the High Court, after allowing the appeal and setting aside the decree of the Trial Court, remanded the matter to the court below, with a direction that it should ascertain the amount of occupancy price paid by Ramachandrarao, and then pass a decree for possession in favour of the plaintiffs subject to the repayment of the said amount.
Hence this appeal by the defendant on the basis of a certificate granted by the High Court under Article 133(1)(e) and (c) of the Constitution.
Shri B. A. Bal, learned counsel for the appellant, has, in the course of his arguments, sought to make out two main points: 1.
(a) Sometime prior to the execution of the deed.
(exhibit 39) dated July 25, 1902, there was a severance of the joint Hindu family as a result of an intimation by Ramachandrarao of his intention to separate and Narayanarao 's acceptance of the same.
Such severance can he clearly inferred from: (i) the recitals in the deed (exhibit 39), the permanent allocation of the suit land along with some other land, to Ramachandrarao and his descendants, and (ii) the subsequent conduct of the members of the erstwhile joint family.
(b) Since the deed (exhibit 39) (it is argued) is more than 75 years old and Narayanarao, Ramachandrarao and others who might have given evidence with regard to the circumstances resulting in this transaction are all deed and gone, the recitals, in the deed coupled with the subsequent conduct of the parties, and supplemented by reasonable inferences, were more than sufficient to discharge the initial 168 onus, if any, on the defendant to show severance of the joint family since 1902 or thereabout and the same continued till Ramachandrarao 's death in 1955.
Reference in this connection has been made to Bhagwan Dayal vs Mst.
Reoti Devi.(1) (c) Since at the time of his death in 1955, Ramachandrarao was not a member of an undivided Hindu family and the suit land was his separate property, his daughter the defendant would, even according to traditional Hindu Law, inherit his estate to the exclusion of the plaintiff collaterals.
(2) Section 4 of the Bombay act 60 of 1950 abolished Watons with effect from May 1, 1951.
Section 5 of the same Act abrogated the rule of primogeniture and also every law or custom by virtue of which females were postponed to males in the matter of succession.
After the abolition of the Watons Ramachandrarao alone, to the knowledge of the plaintiff respondents, obtained a regrant of the suit land from the Government in his favour.
Similarly, the plaintiffs applied for regrant of the other Ex watan lands measuring about 8000 acres, to the exclusion of Ramachandrarao.
The regrant of the suit land in favour of Ramachandrarao created new rights exclusively in his favour.
Since on May 1, 1951 he was holding the suit land separately as a divided member of the family, the regrant did not ensure for benefit of the plaintiffs.
As against this, Shri V. section Desai submits that since it was the admitted case of the parties that sometime before the execution of the deed (exhibit 39) dated July 25, 1902.
Narayanarao and Ramachandrarao constituted a joint Hindu family governed by Mitakshra, and the presumption of jointness in case of brothers is stronger, the burden was on the defendant to prove by cogent and convincing evidence that the joint family had disrupted and Ramachandrarao had separated in 1902 and the suit land was his separate property which fell to his share in partition.
It is maintained that the recitals in the deed, exhibit 39, do not furnish any evidence that Ramachandrarao had communicated an unambiguous and clear intention to separate from his brother in estate and thenceforth hold it in defined shares.
It is urged that the transaction evidenced by the deed should be construed by the Court, not according to its own sense of right and wrong, but according to the notions and beliefs prevailing among orthodox Hindus in 1902, of a strata of society to which Narayanarao and Ramachandrarao belonged.
In 1902, proceeds the argument, to cause disruption of a joint Hindu family of Watandars 169 was considered to be a sin.
According to Shri Desai, if the document, exhibit 39, is considered from that view point it would appear that the arrangement devised thereby was consistent with the continuance and preservation of the jointness of the family and its estate, rather than its division and disruption.
It is pointed out that the area of Watan Land held by the joint Hindu family in 1902 was about eight thousand acres, and if the intention of the brothers was to sever the joint family status, there was no difficulty in declaring that thenceforth the two brothers would hold the entire estate in equal, defined shares.
It is emphasised, though Ramchandrarao, died in 1955, he never asked for partition and possession of his one half share in the remaining seven or eight thousand acres held by Narayanarao and his descendants, but remained contented with a mere 118 or 120 acres given to him for maintenance under exhibit 39 in 1902.
It is further submitted that the Court cannot construe the deed exhibit 39, as a deed of partition, but only as a deed of maintenance, as it, expressly purports to be, because in view of Section 92 of the Evidence Act no extrinsic evidence is admissible to contradict or vary its terms.
In support of his arguments Shri Desai has referred to Paragraph 448 of Mayne 's Hindu Law (1953 Edn.).
Learned counsel further submits that in view of the paucity of evidence produced by the defendant appellant to show division of the joint family, the High Court was right in holding that Ramchandrarao died as an undivided member of the joint Hindu family consisting of himself and the plaintiffs.
It is submitted, in that view of the matter, the second point urged by Shri Bal does not survive for decision.
Nevertheless, Shri Desai took us through the relevant provisions of the Bombay Act LX of 1950 and the Watan Act of 1874, to show that there is nothing in those provisions which militates against the finding of the High Court to the effect, that if Ramchandrarao died as an undivided member of the joint family, the regrant would enure for the benefit of all the members of the family.
We will take Point No. 1 canvassed by Shri Bal.
The primary question that falls to be considered is, whether in 1902 or shortly prior to it, there was a partition between the two brothers Narayanarao and Ramchandrarao in a manner known to law.
In this connection, it is necessary, at the outset, to notice the fundamental principles of Hindu Law bearing on the point.
The parties are admittedly governed by Mitakshra School of Hindu Law.
In an undivided Hindu family of Mitakshra concept, no member can say that he is 170 the owner of one half, one third or one fourth share in the family property, there being unity of ownership and commonsality of enjoyment while the family remains undivided.
Such unity and commonsality or the essential attributes of the concept of joint family status.
Cesser of this unity and commonsality means cesser or severance of the joint family status, or, which under Hindu Law is 'partition ' irrespective of whether it is accompanied or followed by a division of the properties by metes and bounds.
Disruption of joint status, itself, as Lord Westbury put it in Appovier vs Rama Subha Aivan.
,(1) in effect, "covers both a division of right and division of property.
" Reiterating the same position, in Giria Bai vs Sadashiv,(2) the Judicial Committee explained that division of the joint status, or partition 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.
" The division of the joint status may be brought about by any adult member of the joint family by intimating, indicating or representing to the other members in clear and unambiguous terms, his intention to separate and enjoy his share in the family property, in severality.
Such intimation, indication or representation may take diverse forms.
Sometimes it is evidenced by an explicit declaration (written or oral); sometimes, it is manifested by conduct of the members of the family in dealing separately with the former family properties.
Service of notice or institution of a suit by one member/coparcener against the other members/coparceners for partition and separate possession may be sufficient to cause disruption of the joint status.
We will now deal with the first proposition propounded by Shri Bal, in the light of these principles.
The primary question that arises for consideration is, whether Ramchandrarao had brought about a division of the joint family status or partition by intimating to his brother in clear terms, sometime in 1902 or shortly prior thereto, his intention to separate and enjoy his share in severality.
Answer to this question depends on inferences which may, reasonably be drawn from the contents of the deed (exhibit 39) and the subsequent conduct of the parties.
The original deed, Ex.39 is in Marathi.
It was rendered into English by the trial judge himself, who concededly had adequate knowledge of Marathi.
According to him, the deed (Ex.39) speaks of a division of 171 the joint family status and separation of interests.
For this construction, the trial judge drew much on the word "Vibhaktarahave" which, according to him, connotes division of status.
The learned Judges of the High Court however, did not accept this interpretation.
They preferred to rely on the English translator of this deed made by the High Court Translator.
Since there is some variation between the two translations, it will be worthwhile to extract the same here for facility of comparison and reference.
The translation effected by the trial judge, reads as under: "You (Ramchandra Rao) are my younger brother.
We were living jointly till today.
Recently you have desired to take some property for maintenance (Nirwah Kurat) and live separate after division (Vibhaktarahave).
Since I have deemed it proper to give you some property for your maintenance as befits our Sansthan, I have given you the following properties for your maintenance.
(Then follows the description of the properties).
All these lands have been given to you along with the appurtenances for meeting the livelihood of you and your family members.
Hence, you and your successors i.e., your natural born male descendants should enjoy the properties from generation to generation and live happily.
The Sansthan will not interfere with the lands any longer.
Only you and your natural male descendants should enjoy the property.
You shall also pay the Joodi to the Government hereafter." (The disputed words have now been underlined).
The translation made by the High Court Translator reads as below: "You are my younger brother and you have been residing with me only in jointness up till now.
As you have been recently thinking of residing separately yourself by receiving some properties for your maintenance, I found it proper to give you some property for your maintenace as befits our Sansthan and have given you for your maintenance the 'Desgat ' lands of our Khata situate in the below mentioned villages in Taluka Chikodi Sub District, Belgaum District.
Particulars thereof are as under: Lands situate at Village Nanadi.
(1) Bagayat Land of No. bearing Survey No. 189 measuring 14 acres 23 guntas assessed at Rs. 20 0 0.
The land together with a well valued at Rs. 1000/ .
(2) The land 172 measuring 9 acres 30 guntas assessed at Rs. 41 8 0 out of Survey No. 187 is bounded on the east by a land in our possession out of the same No. on the west by the village limits, on the south by the land No. 196 and on the north by the land bearing Survey No. 198.
In the land enclosed within the aforesaid boundary there is a well.
This well has two "Veravantas" i.e. one on the Eastern side and another on the Southern side.
It has 10 'motes '.
Out of the 'motes ' of that well we are to get water with 3 'motes ' and you are to get water with 2 'motes '.
Repairs to the said well also are to be carried in that portion only and the expenses required to remove the mud etc., are also to be borne in the same proportion itself.
Value Rs. 1000/ Lands situate at the Village Umarani.
Rs. No. Acres Assessment 3 99 26 30 14 0 0 The said 3 4 100 9 38 9 0 0 lands are 5 101 26 34 17 0 0 entire No. and are valueed at Rs. 1000/ together with the appurte nant thereof.
Land situate at Majere Kenpatte in the Village Nandikurli.
6 120 24 18 9 0 0 This land of entire No. together with the appurtenances thereof is valued at Rs.400/ .
The lands as mentioned above are given to you for your maintenance and the maintenance of your dependants.
Hence, you and your descendants, i.e., natural male descendants should enjoy the said lands continuously and live happily.
In respect of the said lands given to you, you will not be put to any trouble from the state (Sansthan) in any manner but, the said lands are to be continued with you and your natural male descendants.
You should go on paying the joodi payable by you to the Government in respect of the said lands in our possession are given to your possession today.
To the above effect the deed of maintenance is duly executed.
" A comparative study of the above extracts would show that except for the English rendering of the word "Vibhaktarahave" by the learned trial judge, there is no substantial difference between the two translations.
The Marathi word "Vibhaktarahave", according to my learned Brother on this Bench, who has working knowledge of Marathi, is a compound of two words, namely, "Vibhakta" and "Rahave".
"Vibhakta" appears to have its root in the Sanskrit word "Vibhaga".
"In the Mitakshra, Vijnanesvara defines the word 173 "Vibhaga" which is usually rendered into English by the word "partition" as the adjustment of diverse rights regarding the whole, by distributing them in particular portions of the aggregate." (See Para 448 of Mayne 's Hindu Law, 11th Edition.) 'Rahave ' means "living".
In view of this etymological analysis, it cannot be said that the learned trial judge 's interpretation of the word "Vibhaktarahave" as equivalent to "live separately after division" was literally wrong.
Even the learned Judges of the High Court (who did not claim to know Marathi), have not held in categoric terms that this translation of "Vibhaktarahave" made by the trial judge is grammatically wrong.
What the learned Judges appear to say is that the context in which the word "Vibhaktarahave" has been used, gives it a meaning different from its grammatical sense, so that it cannot be understood as signifying an intention to divide, but connotes only a desire to live separately.
The learned Judges have sorted out four features from the context of the deed, exhibit 39, which, according to them, militate against the literal interpretation of the word "Vibhaktarahave" and negative the theory of division of status.
Those features it will bear repetition are: (i) The deed is styled as one for maintenance, (ii) It was executed by Narayanarao only, (iii) The lands under the deed were given to Ramchandrarao and his descendants in the male line for maintenance only, (iv) The total extent of 'Desgat ' lands was over 8000 acres.
Ramchandrarao should have claimed half of the entire 'Desgat ' area and not remained contented with about 90 acres given to him under the deed exhibit 39).
In our opinion, none of these features, if appreciated in the right perspective, detracts from the conclusion that there was a division of joint family status as a result of an intimation to Narayanarao by Ramchandrarao, of his intention to separate, followed by allotment to Ramchandrarao in furtherance of that division, the lands mentioned in exhibit 39.
The four features listed above rested on erroneous assumptions.
Even according to the High Court, both the brothers were, at the time of execution of the document exhibit 39, labouring under an erroneous belief that the 'Desgat ' lands were impartible and held by the eldest member of the family in the male line, while the junior members were entitled only to maintenance.
The High Court has expressly upheld the finding of the trial Court that no custom was established according to which, the 'Desgat ' lands of the family were impartible and vested only in the eldest male member of the family to the exclusion of the junior members.
The High Court has further not disagreed with the trial courts finding that no custom of primogeniture in this family has been established.
174 Once it is held that this two fold assumption or belief about the impartibility of the estate and its devolution in the male line by rule of primogeniture was fallacious, the said four features stemming therefrom, lose their significance.
These features which purport to give the transaction (exhibit 39) the colour of a mere maintenance arrangement as distinguished from an absolute transfer or allotment, have to be credited with no more substance than phantoms conjured out of phantasy, probably by the sole executant of the deed with a self serving motive.
In any case, they are words of vain show or form lacking reality.
We have therefore, to peal aside this jejune and illusory cover, to reach at the kernel and concentrate on the crucial features of the document exhibit 39.
We are unable to accept Shri Desai 's argument that the process adopted by us would involve contravention of Section 92 of the Evidence Act.
Firstly, in this process, which is essentially one of construction of the deed, exhibit 39, no question of contradicting, varying, adding to or subtracting any term of the disposition is involved.
The deed, exhibit 39, falls into two distinct parts: The first of them comprises the preamble or the preliminary recital of a past fact.
This part does not contain any term of disposition of property.
Such terms are confined only to the second part.
Section 92 prohibits only the varying of terms of the documents, not the memoranda or recitals of facts, bereft of dispositive terms, particularly when the correctness of the whole or any part of the recital is in question.
We are primarily concerned with this preliminary recital which does not fall under the dispositive or operative portion of the document.
The question is, whether or not this recital of a past oral intimation by Ramchandrarao to Narayanarao had caused severance of joint family status.
It is settled law that a clear intimation by a coparcener to the other coparcener of his intention to sever the joint status need not be in writing.
For these two fold reasons, the bar in section 92 against the admissibility of extrinsic evidence for the purpose of showing that the insertion of the words "for your maintenance" in the recital is wrong, unreal, unmeaning and the coinage of the executant 's own brain, is not attracted.
Secondly, there is ample authority for the proposition that when there is a dispute in regard to the true character of a writing evidence de hors the document can be led to show that the writing was not the real nature of the transaction, but was only an illusory, fictitious and colourable device which cloaked something else, and that the appa 175 rent state of affairs was not the real state of affairs.
[See Chandi Prasad Singh vs Piari Bedi C.A. No. 75 of 1964, decided on 16 3 1966, and Bhagwan Dayal vs Mst.
Reoti Devi (supra) ].
This preliminary recital in the deed, exhibit 39 (as translated by the learned trial judge), with due emphasis on the words 'recently ' and 'Vibhaktarahave ', coupled with the surrounding circumstances and natural probabilities of the case, definitely raises the inference that sometime in the recent past, prior to the date of the deed, exhibit 39, Ramchandrarao had clearly and persistently intimated to his coparcener, Narayanarao, his intention to sever the joint family status and to hold and enjoy his share of the joint family property in severalty.
The immediate and inexorable consequence of this intimation was disruption or division of the joint status, which, in the eye of Hindu Law, amounted to 'partition '.
From that date onwards, which preceded the date of the deed, exhibit 39 Narayanarao and Ramchandrarao ceased to be coparceners and held the former coparcenary property as tenants in common.
Thus, at the time of execution of the deed exhibit 39, the joint family status did not exist; it had already been put an end to by Ramchandrarao 's intimation to Narayanarao, of his intention to divide and separate.
If that be the true position, it was not open even to Ramchandrarao, much less to Narayanarao, to nullify the effect of the communication of the former 's intention which had resulted in severance of the joint status, by revoking or withdrawing that communication.
Ramchandrarao could not get back to the old position by mere revocation of the intention.
A coparcenary is purely a creature of Hindu Law; it cannot be created, or recreated after disruption, by the act of par ties, save in so far that by adoption a stranger may be introduced as a member thereof or in the case of reunion.
[See paragraphs 214 and 325 of Mulla 's Hindu Law and this Court 's decision in Puttorangama vs Ranganna; Bhagwan Dayal vs Mst.
Reoti Devi (supra).] There is hot evidence that after the severance of the joint family status, there was a reunion.
As before the High Court, here also, an argument was raised that the preliminary recital in the deed, exhibit 39, being qualified, furnishes little or no evidence for a finding that Ramchandrarao had declared and intimated in clear and unambiguous terms his intention to sever the joint family status.
176 We are unable to accept this argument.
It has to be borne in mind that this document has been let in evidence more than 70 years after its execution.
Narayanarao and Ramchandrarao and all others who might have given evidence with regard to the circumstances of this recital in particular, and the deed in general, are long deed and gone.
There is no dearth of authority for the proposition that in such a situation, it is permissible to draw reasonable inferences to fill the gaps or details obliterated by time.
[See Chintamanibhatia Vankat Reddy vs Rani of Wadhavan; Sree Sree Iswar Gopal Jien Thakur vs Pratapmal Bagaria.
The preliminary recital in the deed, therefore, assumes importance.
Read in the light of the surrounding circumstances and in the perspective that the 'Desgat ' land was partible coparcenary property of the two brothers, each of whom had an equal interest therein and an equal right to get his share divided and thereafter enjoy it in severalty, this recital establishes with a preponderance of probability, that sometime before the execution of the deed, exhibit 39, Ramachandrarao had communicated to his brother, in clear, unmistakable terms his intention not only to separate in residence and user and put an end to commonsality, but also to sever the unity of ownership and enjoy his share in severalty.
The result was division of the joint status.
Once it is found that the division of the joint status preceded the execution of the deed, exhibit 39, then the disposition made thereunder could only be a step towards the implementation of that division and in recognition of Ramchandrarao 's right to have his share, wholly or partly demarcated and specified for separate enjoyment as an absolute and exclusive owner thereof.
While giving the land measuring 118 or 120 acres to Ramchandrarao in recognition of the latter 's equal right in the Desgat, Narayanarao had no power to impose the futile condition that the land was being given to Ramchandrarao and his male lineal descendants for maintenance.
As already discussed, this insertion by the executant from an ulterior self serving motive was devoid of substance; it could not be attached any greater importance and realty than the phantasmic assumption, from which it was conjured up: a fortiori, when in the deed, exhibit 39, there is no stipulation that in the event of Ramchandrarao 's male line becoming extinct, the land would revert to the 'Desgat ', and Narayanarao or his descendants would have a right of re entry.
177 We are in agreement with the trial court that the expressions "Potgi" (maintenance) or "Nirwahkrit" in the deed cannot be construed as conferring an estate with restricted rights of 'ownership ', limited to the lifetime of Ramchandrarao and his linear male descendants.
The deed evidence a permanent transfer or allotment of about 118 or 120 acres of land to Ramchandrarao to be enjoyed from generation to generation to the entire exclusion of Narayanarao and his descendants.
In terms, Narayanarao did not reserve any right of reversion in favour of himself and his branch in any circumstances.
Irrigation rights also with regard to the land transferred or allotted under this deed, were divided.
It was further provided that from the date of the deed, payment of Joodi to the Government in respect of this land, shall also be the exclusive liability of Ramchandrarao and his descendants.
The inference that this land, measuring about 118 acres was given to Ramchandrarao in partial implementation of division of joint family status or partition, receives further confirmation from the following circumstances: (a) From the date of the deed, exhibit 39, till Ramchandrarao 's death in 1955, for a period of about 53 years, the lands disposed of by the deed, throughout remained in the full, exclusive and uninterrupted enjoyment of Ramchandrarao.
The relevant entries in the revenue records during this period, also, stand exclusively in his name as owner in possession thereof.
(b) After the abolition of Watans in 1951, Ramchandrarao alone applied for regrant of this land in his favour, under the Watan Abolition Act.
The plaintiffs were at all material times, admittedly aware that Ramchandrarao had applied for the regrant of this land exclusively in his favour, but they never objected, and tacitly assented to the same.
On the other hand, the plaintiffs applied and obtained regrant of the 'Desgat ' lands (other than those which were the subject of the deed, exhibit 39), in their favour to the exclusion of Ramchandrarao.
In the light of the above discussion, we are of opinion (i) that there was partition or division of the joint family status sometime prior to the execution of deed, exhibit 39, and (ii) that the disposition of about 118 or 120 acres made under that deed was, in substance an absolute allotment of that land to Ramchandrarao, towards implementation of that division or partition in recognition of the latter 's right to have his share demarcated by metes and bounds to be enjoyed exclusively in severalty.
Point No. 1 is thus found in favour of the appellant.
In view of the above finding that the suit property was the separate, divided 178 property of Ramchandrarao at the date of his death, and under the traditional Hindu Law, would go by succession to his daughter, the appellant herein, to the exclusion of the plaintiff collaterals, it is not necessary to decide Point No. 2 canvassed by the appellant.
In the result, for all the reasons aforesaid, we allow this appeal and dismiss the plaintiffs suit with costs throughout.
P.B.R. Appeal allowed.
| In 1948 on the formation of Saurashtra State, Jaffrabad came within its territorial limits and the Bombay District Municipal Act, 1901 as adapted and applied to the said State became applicable to Jaffrabad.
Jaffrabad Municipality the predecessor of the respondent was constituted under the Bombay District Municipal Act, 1901.
The State of Saurashtra, within the territorial limits of which the said Municipality was situate, promulgated ordinance No. 47 of 1949 on 31 X 49 called the Saurashtra Terminal octroi ordinance, 1949.
Section 2 cl.
(2) of the said ordinance defines "octroi" as including a terminal tax.
Section 3 empowered the Government to impose terminal tax and octroi duty, and provided that octroi may be imposed on "animals or goods, or both, within the octroi limits brought for consumption or use therein.
" Section 4 empowered the Government to make rules in exercise of which the State Government made the Saurashtra octroi and Terminal Tax Rules on 8th December, 1949.
Rule 3, the charging rule provided that octroi is payable in respect of goods set out in Schedule I of the Rules and prescribed that it shall be payable at the nakas at rates set out therein.
Item No. 23 is "Salt for Factory".
Schedule II enumerated a list of items which are exempt from octroi duty and contained in Item No. 6, a sub item in Gujarat which means "salt".
The appellant was running a salt manufacturing works at Jaffrabad.
The company had constructed salt works, grinding mills, trolly tracks and a jetty at the port site.
The major portion of the salt works is situated out of the municipal limits.
The salt is manufactured outside the municipal limits.
The grinding mills and the part of the trolly track leading to jetty came within the municipal limits of the respondent Jaffrabad Municipality.
The salt is prepared in the salt pans outside the octori limit and the salt which is crushed is taken to the crushing factory and the salt which is not to be crushed is taken in uncrushed form.
directly to the jetty over the trolly track part of which passes through the octroi limits of the municipality.
The salt that is crushed in the crushing factory is also after crushing taken by trolly to the jetty.
From the jetty the salt whether crushed or uncrushed, as the case may be is exported by steamers.
244 The Municipality demanded from the appellant octroi in respect of salt manufactured by it.
The appellant paid under protest and filed a suit against the respondent for declaration that the salt manufactured by the appellant at its salt works at Jaffrabad and exported uncrushed and/or crushed was not liable to octroi duty and the goods passing through municipal limits from the salt works are not liable to octroi duty and for an injunction restraining the respondent from recovering the amount claimed as octroi.
Another suit claiming refund of the octroi paid was also filed.
The two suits were decreed, the court declaring that the salt manufactured by the appellant company is not liable to octroi duty.
The Municipality being aggrieved preferred appeals and the appellate court while dismissing the appeals and confirming the decrees of the trial court held that the perpetual injunction granted by the trial court would not apply to the salt entering the octroi limits for consumption or use for the factory situated within the octroi limits of the Municipality.
The Municipality preferred second appeals to the High Court, which allowed them except to the extent of confirming the declaration that uncrushed salt of the appellant company which is directly sent from the stacking ground to the jetty is not liable to octroi provided the plaintiff company followed the prescribed rules and formalities.
The other claims in the suits were however dismissed.
On the question whether the salt manufactured by the appellant outside the octroi limits of the respondent and brought within those limits for the purpose of being crushed into powder in the appellant 's factory situated within those limits and then exported is liable to octroi.
^ HELD: 1.
Octroi is leviable on the uncrushed salt which is brought to the octroi area and crushed as the activity would amount to both consumption and use of the uncrushed salt.
[249 F] Burmah Shell oil Storage Distributing Co. India Ltd. vs The Belgaum Borough Municipality [1963] Supp.
2 SCR 216; M/s. Anwarklan Mahboob Co. vs The State of Bombay (now Maharashtra) [161] 1 SCR 709, State of Travancore Cochin & Ors.
vs Shanmugha Vilas Cashew Nut Factory & ors.
; , referred to.
In the Constitution of India, Entry 52 in List II in Seventh Schedule a right to impose tax "on entry of goods into the local area for consumption, use or sale" is conferred.
The precise meaning to be given to the words "consumption" and "use" will depend upon the context in which they are used.
These words are of wide import, the word "use" being of wider import than "consumption".
[248A. 247H, 249E].
While terminal tax is a kind of octroi which is concerned only with the entry of goods in a local area irrespective of whether they would be used there or not, octrois were taxes on goods brought into the area for consumption, use or sale.
They are leviable in respect of the goods put to some use or the other in the area but only if they were meant for such use.
[248B] 4.
The word "consumption" in its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article.
But in some leal contents the word 245 "consumption" has a wider meaning.
It is not necessary that by the act of consumption the commodity must be destroyed or used up.
[248C D] In the instant case the uncrushed salt is crushed in the factory which is commercially a different article and the uncrushed salt must be held to have been consumed.
The uncrushed salt has been used and by the use a new product crushed salt has come into existence.
[249E]
|
: Criminal Appeal No. 68 of 1977.
Appeal by Special Leave from the Judgment and order dated 15th November, 1976 of the Gujarat High Court in Criminal Appeal No. 832 of 1976.
R.H. Dhebar and B. V. Desai for the Appellant.
R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by 284 THAKKAR, J.
To say at the beginning what we cannot help saying at the end: human goodness has limits human depravity has none.
The need of the hour however, is not exasperation.
The need of the hour is to mould and evolve the law so as to make it more sensitive and responsive to the demands of the time in order to resolve the basic problem: "Whether, when, and to what extent corroboration to the testimony of a victim of rape is essential to establish the charge.
" And the problem has special significance for the women in India, for, while they have often been idolized, adored, and even worshipped, for ages they have also been exploited and denied even handed justice Sixty crores anxious eyes of Indian a women are therefore focussed on this problem.
And to that problem we will presently address ourselves.
The learned Sessions Judge Mehsana found the appellant, a Government servant employed in the Sachivalaya at Gandhinagar, guilty of serious charges of sexual misbenaviour with two young girls (aged about 10 or 12) and convicted the appellant for the offence of rape, outraging the modesty of women, and wrongful confinement.
The appeal carried to the High Court substantially failed.
The High Court affirmed the order of conviction under Sec.
342 of the Indian Penal Code for wrongfully confining the girls.
The High Court also sustained the order of conviction under Sec. 354 of the Indian Penal Code for outraging the modesty of the two girls.
With regard to the more serious charge of rape on one of the girls, the High Court came to the conclusion that what was established by evidence was an offence of attempt to commit rape and not of rape.
Accordingly the conviction under Sec. 376 was altered into one under Sec.
376 read with Sec.
511 of the Indian Penal Code.
The appellant has preferred the present appeal with special leave.
The incident occurred on Sunday, September 7, 1975, at about 5.30 p.m. at the house of the appellant.
The evidence of P.W. 1 and P.W. 2 shows that they went to the house of the appellant in order to meet his daughter (belonging to their own age group of 10 or 12) who happened to be their friend.
The appellant induced them to enter his house by creating an impression that she was at home, though, in fact she was not.
Once they were inside, the appellant closed the door, undressed himself in the presence of both the girls, and exposed himself.
He asked P.W. 2 to indulge in an indecent act.
P.W. 2 started crying and fled from there.
P.W. 1 285 however could not escape.
She was pushed into a cot, and was made to undress.
The appellant sexually assaulted her.
P.W. 1 was in distress and was weeping as she went out.
She however could not apprise her parents about what had transpired because both of them were out of Gandhinagar (they returned after 4 or 5 days).
It appears that the parents of P.W. 1 as well as parents of P.W. 2 wanted to hush up the matter.
Some unexpected developments however forced the issue.
The residents of the locality somehow came to know about the incident.
And an alert Woman Social Worker, P.W. 5 Kundanben, President of the Mahila Mandal in Sector 17, Gandhinagar, took up the cause.
She felt indignant at the way in which the appellant had misbehaved with two girls of the age of his own daughter, who also happened to be friends of his daughter, taking advantage of their helplessness, when no one else was present.
Having ascertained from P.W. 1 and P.W. 2 as to what had transpired, she felt that the appellant should atone for his infamous conduct.
She therefore called on the appellant at his house.
It appears that about 500 women of the locality had also gathered near the house of the appellant.
Kundanben requested the appellant to apologize publicly in the presence of the woman who had assembled there.
If the appellant had acceded to .
this request possibly the matter might have rested there and might not have come to the court.
The appellant, however, made it a prestige issue and refused to apologize.
Thereupon the police was contacted and a complaint was lodged by P.W. 1 on 19 Sept. 1975.
P.W. 1 was then sent to the Medical officer for medical examination.
The medical examination disclosed that there was evidence to show that an attempt to commit rape on her had been made a few days back.
The Sessions Court as well as the High Court have accepted the evidence and concluded that the appellant was guilty of sexual misbehavior with P.W. 1 and P.W. 2 in the manner alleged by the prosecution and established by the evidence of P.W. 1 and P.W. 2.
Their evidence has been considered to be worthy of acceptance lt is a pure.
finding of fact recorded by the Sessions Court and affirmed by the High Court.
Such a concurrent finding of fact cannot be reopened in an appeal by special leave unless it is established: (1) that the finding is based on no evidence or (2) that the finding is perverse, it being such as no reasonable person could have arrived at even if the evidence was taken at its face value or (3) the finding is based and built on inadmissible evidence, which evidence, if excluded from vision, would negate the prosecution case or substantially discredit 286 or impair it or (43 some vital piece of evidence which would tilt the balance in favour of the convict has been overlooked, disregarded, or wrongly discarded.
The present is not a case of such a nature.
The finding of guilt recorded by the Sessions Court as affirmed by the High Court has been challenged mainly on the basis of minor discrepancies in the evidence.
We do not consider it appropriate or permissible to enter upon a reappraisal or reappreciation of the evidence in the context of the minor discrepancies painstakingly highlighted by learned counsel for the appellant.
Over much importance cannot be attached to minor discrepancies.
The reasons are obvious: (1) By and large a witness cannot be expected to possess a photographic memory and to recall the details of an incident.
It is not as if a video tape is replayed on the mental screen.
(2) ordinarily it so happens that a witness is overtaken by events.
The witness could not have anticipated the occurrence which so often has an element of surprise.
The mental faculties therefore cannot be expected to be attuned to absorb the details.
(3) The powers of observation differ from person to person.
What one may notice, another may not.
An object or movement might emboss its image on one person 's mind whereas it might go unnoticed on the part of another.
(4) By and large people cannot accurately recall a conversation and reproduce the very words used by them or heard by them.
They can only recall the main purport of the conversation.
It is unrealistic to expect a witness to be a human tape recorder.
(5) In regard to exact time of an incident, or the time duration of an occurrence, usually, people make their estimates by guess work on the spur of the moment 1.1 at the time of interrogation.
And one cannot expect people to make very precise or reliable estimates in such matters.
Again, it depends on the time sense of individuals which varies from person to person.
287 (6) Ordinarily a witness cannot be expected to recall accurately the sequence of events which take place in rapid succession or in a short time span.
A witness is liable to get confused, or mixed up when interrogated later on.
(7) A witness, though wholly truthful, is liable to be overawed by the court atmosphere and the piercing cross examination made by counsel and out of nervousness mix up facts, get confused regarding sequence of events, or fill up details from imagination on the spur of the moment.
The sub conscious mind of the witness sometimes so operates on account of the fear of looking foolish or being disbelieved though the witness is giving a truthful and honest account of the occurrence witnessed by him Perhaps it is a sort of a psychological defence mechanism activated on the spur of the moment.
Discrepancies which do not go to the root of the matter and shake the basic version of the witnesses therefore cannot be annexed with undue importance.
More so when the all important "probabilities factor" echoes in favour of the version narrated by the witnesses.
It is now time to tackle the pivotal issue as regards the need for insisting on corroboration to the testimony of the prosecutrix in sex offences.
This Court, in Rameshwar vs The State of Rajasthan,(1) has declared that corroboration is not the sine que non for a conviction in a rape case.
The utterance of the Court in Rameshwar may be replayed, across the time gap of three decades which have whistled past, in the inimitable voice of Vivian Bose, J. who spoke for the Court The rule, which according to the cases has hardened into one of law, is not that corroboration is essential before there can be a conviction but that the necessity of corroboration, as a matter of prudence, except where the circumstances make it safe to dispense with it, must be present to the mind of the judge . . 288 The only rule of law is that this rule of prudence must be present to the mind of the Judge or the jury as the case may be and be understood and appreciated by him or them.
There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed to stand.
" And whilst the sands were running out in the time glass, the crime graph of offences against women in India has been scaling new peaks from day to day.
That is why an elaborate rescanning of the jurisprudential sky through the lenses of 'logos ' and 'ethos ', has been necessitated.
In the Indian setting, refusal to act on the testimony of a victim of sexual assault in the absence of corroboration as a rule, is adding insult to injury.
Why should the evidence of the girl or the woman who complains of rape or sexual molestation be viewed with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion ? To do so is to justify the charge of male chauvinism in a male dominated society.
We must analyze the argument in support of the need for corroboration and subject it to relentless and remorseless cross examination.
And we must do so with a logical, and not an opiniated, eye in the light of probabilities with our feet firmly planted on the soil of India and with our eyes focussed on the Indian horizon.
We must not be swept off the feet by the approach made in the Western World which has its own social mileu, its own social mores, its own permissive values, and its own code of life.
Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World.
It is wholly unnecessary to import the said concept on a turn key basis and to transplate it on the Indian soil regardless of the altogether different atmosphere, attitudes, mores, responses of the Indian Society and its profile.
The identities of the two worlds are different.
The solution of problems cannot therefore be identical.
It is conceivable in the Western Society that a female may level false accusation as regards sexual molestation against a male for several reasons such as: (1) The female may be a 'gold digger ' and may well have an economic motive to extract money by holding out the gun of prosecution or public exposure.
289 (2) She may be suffering from psychological neurosis and may seek an escape from the neurotic prison by phantasizing or imagining a situation where she is desired, wanted, and chased by males.
(3) She may want to wreak vengence on the male for real or imaginary wrongs.
She may have a grudge against a particular male, or males in general, and may have the design to square the account.
(4) She may have been induced to do so in consideration of economic rewards, by a person interested in placing the accused in a compromising or embarassing position, on account of personal or political vendatta.
(5) She may do so to gain notoriety or publicity or to appease her own ego or to satisfy her feeling of self importance in the context of her inferiority complex.
(6) She may do so on account of jealousy.
(7) She may do so to win sympathy of others.
(8) She may do so upon being repulsed.
By and large these factors are not relevant to India, and the Indian conditions.
Without the fear of making too wide a statements or of overstating the case, it can be said that rarely will a girl or a woman in India make false allegations of sexual assault on account of any such factor as has been just enlisted.
The statement is generally true in the context of the urban as also rural Society.
It is also by and large true in the context of the sophisticated, not so sophisticated, and unsophisticated society.
Only very rarely can one conceivably come across an exception or two and that too possibly from amongst the urban elites.
Because: (1) A girl or a woman in the tradition bound non permissive Society of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred.
(2) She would be conscious of the danger of being ostracised by the Society or being looked down by the Society including by her own family members, relatives, friends and neighbours.
(3) She would have to brave the 290 whole world.
(4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered.
(S) If she is unmarried, she would apprehend that it would be difficult to secure an alliance with a suitable match from a respectable or an acceptable family.
(6) It would almost inevitably and almost invariably result in mental torture and suffering to herself.
(7) The fear of being taunted by others will always haunt her.
(8) She would feel extremely embarrassed in relating the incident to others being over powered by a feeling of shame on account of the upbringing in a tradition bound society where by and large sex is taboo.
(9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy.
(10) The parents of an unmarried girl as also the husband and members of the husband 's family of a married woman would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour.
(11) The fear of the victim herself being considered to be promiscuous or in some way responsible for the incident regardless of her innocence.
(12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent.
In view of these factors the victims and their relatives are not too keen to bring the culprit to books.
And when in the face of these factors the crime is brought to light there is a built in assurance that the charge is genuine rather than fabricated.
On principle the evidence of a victim of sexual assault stands on par with evidence of an injured witness.
Just as a witness who has sustained an injury (which is not shown or believed to be self inflicted) is the best witness in the sense that he is least likely to exculpate the real offender, the evidence of a victim of a sex offence is entitled to great weight, absence of corroboration notwithstanding.
And while corroboration in the form of eye witness account of an independent witness may often be forthcoming in physical assault cases, such evidence cannot be expected in sex offences, having regard to the very nature of the offence.
It would therefore be adding insult to injury to insist on corroboration drawing inspiration from the rules devised by the courts in the Western World.
Obseisance to which has perhaps become a habit presumably on account of the colonial hangover.
We are therefore of the opinion that if the evidence of the victim does not suffer from any basic infirmity, and the probabilities factors does not render it unworthy of credence, as a general 291 rule, there is no reason to insist on corroboration except from the medical evidence, where, having regard to the circumstances of the case, medical evidence can be expected to be forthcoming, subject to the following qualification: Corroboration may be insisted upon when a woman having attained majority is found in a compromising position and there is a likelihood of her having levelled such an accusation on account of the instinct of self preservation.
Or when the 'probabilities factor ' is found to be out of tune.
Now we return to the facts of the present case.
Testing the evidence from this perspective, the evidence of P.W. 1 and P.W. 2 inspires confidence.
The only motive suggested by defence was that there was some history of past trade union rivalry between the father of P.W. 2 and the appellant.
It must be realized that having regard to the prevailing mores of the Indian Society, it is inconceivable that a girl of 10 or 12 would invent on her own a false story of sexual molestation.
Even at the age of 10 or 12 a girl in India can be trusted to be aware of the fact that the reputation of the entire family would be jeopardised, upon such a story being spread.
She can be trusted to know that in the Indian Society her own future chances of getting married and settling down in a respectable or acceptable family would be greatly marred if any such story calling into question her chastity were to gain circulation in the Society.
It is also unthinkable that the parents would tutor their minor daughter to invent such a story in order to wreak vengence on someone.
They would not do so for the simple reason that it would bring down their own social status in the Society apart from ruining the future prospects of their own child.
They would also be expected to be conscious of The traumatic effect on the psychology of the child and the disastrous consequences likely to ensue when she grows up.
She herself would prefer to suffer the injury and the harassment, rather than to undergo the harrowing experience of lodging a complaint in regard to a charge reflecting on her own chastity.
We therefore refuse to countenance the suggestion made by the defence that the appellant has been falsely roped in at the instance of the father of P.W. 2 who was supposed to have some enmity against the appellant.
It is unthinkable that the parents of P.W. 2 would tutor her to invent a story of sexual misbehavior on the part of the appellant merely in order to implicate him on account of past trade union rivalry.
The parents would have also realized the danger of traumatic effect on the psychology of their daughter.
In fact it would have been considered to be extremely distasteful to 292 broach the subject.
It is unthinkable that the parents would go to the length of inventing a story of sexual assault on their own daughter and tutor her to narrate such a version which would bring down their own social status and spoil their reputation in Society.
Ordinarily no parents would do so in Indian society as at present.
Under the circumstances the defence version that the father of P.W. 2 had tutored her to concoct a false version in order to falsely implicate the appellant must be unceremoniously thrown overboard.
Besides, why should the parents of P.W. 1 mar the future prospects of their own daughter ? It is not alleged that P.W. 1 had any motive to falsely implicate the appellant.
So also it is not even suggested why P.W. 1 should falsely implicate the appellant.
From the stand point of probabilities it is not possible to countenance the suggestion that a false story has been concocted in order to falsely implicate the appellant.
The medical evidence provided by P.W 6, Dr. Hemangini Desai, fully supports the finding of the High Court that there was an attempt to commit rape on P.W. 1.
Under the circumstances the conclusion reached by the High Court cannot be successfully assailed.
The only question that now remains to be considered is as regards the sentence.
The appellant has behaved in a shockingly indecent manner.
The magnitude of his offence cannot be overemphasized m the context of the fact that he misused his position as a father of a girl friend of P.W. 1 and P.W. 2.
P.W. 1 and P.W. 2 were visiting his house unhesitatingly because of the fact that his daughter was their friend.
To have misused this position and to have tricked them into entering the house, and to have taken undue advantage of the situation by subjecting them to sexual harassment, is a crime of which a serious view must be taken.
But for the following facts and circumstances, we would not have countenanced the prayer for leniency addressed to us on behalf of the appellant.
The special circumstances are these.
The appellant has lost his job in view of the conviction recorded by the High Court.
The incident occurred some 7 years back.
The appeal preferred to the High Court was dismissed in November 15, 1976.
About 6 1/2 years have elapsed thereafter.
In the view that we are taking the appellant will have to be sent back to jail after an interval of about 6 1/2 years.
The appellant must have suffered great humiliation in the Society.
The prospects of getting a suitable match for his own daughter have perhaps been marred in view of the stigma in the wake of the finding of guilt recorded against him in the context of such an offence.
293 Taking into account the cumulative effect of these circumstances, and an overall view of the matter, we are of the opinion that the ends of Justice will be satisfied if the substantive sentence imposed by the High Court for the offence under Sec. 376 read with Sec.
511 is reduced from one of 2 1/2 years ' R. I., to one of 15 months ' R.I.
The sentence of fine, and in default of fine, will be course remain undisturbed.
So also the sentence imposed in the context of the offence under Sec.
342 and Sec 354 of the Indian Penal Code will remain intact.
Subject to the modification in the sentence to the aforesaid extent the appeal fails and is dismissed The appellant shall surrender in order to undergo the sentence.
The bail bonds will stand cancelled.
S.R. Appeal dismissed.
| The appellant, a government servant employed in the Sachivalaya at Gandhinagar was found guilty, by the Sessions Judge, Mehsna, of serious charges of sexual misbehaviour with two young girls (aged about 10 or 12 and was convicted for the offence of rape, outraging the modesty of women, and wrongful confinement The appeal carried to the High Court substantially failed.
The High Court affirmed the orders of conviction under section 342 I.P.C. for wrongfully confining the girls and conviction under Section 354 I.P.C. for outraging the modesty of the two girls.
With regard to the more serious charge of rape on one of the girls, the High Court came to the conclusion that what was established by evidence was an offence or attempt to commit rape and not of rape.
Accordingly, the conviction under Section 376 was altered into one under Section 376 read with Section Sl I I.P.C. Dismissing the appeal and maintaining the conviction on all counts, Court ^ HELD: 1:1 A concurrent finding of fact as recorded by the Sessions Court and affirmed by the High Court, cannot be reopened in an appeal by Special Leave unless it is established (1) that the finding is based on no evidence or (2) that the finding is perverse, it being such as no reasonable person could have arrived at even if the evidence was taken at its face value or (3) the finding is based and built on inadmissible evidence, which evidence if excluded from vision, would negate the prosecution case or substantially discredit or impair it or (4) some vital piece of evidence which would tilt the balance in favour of the convict has been overlooked, disregarded, or wrongly discarded.
The present is not a case of such a nature.
[285 G H, 286 A] 1:2.
Discrepancies which do not go to the root of the matter and shake the basic version of the witnesses therefore cannot be annexed with undue 281 importance.
More so when the all important "probabilities factor" echoes in favour of the version narrated by the witnesses.
The reasons are: (1) By and large a witness cannot be expected to possess a photographic memory and to recall the details of an incident.
It is not as if a video tape is replayed on the mental screen; (2) ordinarily it so happens that a witness is overtaken by events.
The witness could not have anticipated the occurrence which so often has an element of surprise.
The mental faculties therefore cannot be expected to be attuned to absorb the details; (3) The powers of observation differ from person to person.
What one may notice, another may not.
An object or movement might emboss its image on one person 's mind whereas it might go unnoticed on the part of another; (4) By and large people cannot accurately recall a conversation and reproduce the very words used by them or heard by them.
They can only recall the main purport of the conversation.
It is unrealistic to expect a witness to be a human tape recorder; (5) In regard to exact time of an incident, or the time duration of an occurrence, usually, people make their estimates by guess work on the spur of the moment at the time of interrogation.
And one cannot expect people to make very precise or reliable estimates in such matters.
Again, it depends.
On the 'timesense ' of individuals which varies from person to person.
(6) ordinarily a witness cannot be expected to recall accurately the sequence of events which take place in rapid succession or in a short time span.
A witness is liable to get confused, or mixed up, when interrogated later on; (7) A witness, though wholly truthful, is liable to be overawed by the court atmosphere and the piercing cross examination made by counsel and out of nervousness mix up facts; get confused regarding sequence of events, or fill up details from imagination on the spur of moment.
The subconscious mind of the witness sometimes so operates on account of the fear of looking foolish, or being disbelieved, though the witness is giving a truthful and honest account of the occurrence witnessed by him Perhaps it is a sort of a psychological defence mechanism activated on the spur of the moment.
[286 B H, 287 A E] 2:1.
Corroboration is not the sine quo non for a conviction in a rape case.
In the Indian setting, refusal to act on the testimony of a victum of sexual assault in the absence of corroboration as a rule, is adding insult to injury.
Viewing the evidence of the girl or the women who complains of rape or sexual molestation with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion, is to justify the charge of male chauvinism in a male dominated society.
C D] Rameshwar vs The State of Rajasthan, ; @ 386 followed.
Corroboration may be considered essential to establish a sexual offence in the backdrop of the social ecology of the Western World.
It is wholly unnecessary to import the said concept on a turn key basis and to transplant it on the Indian soil regardless of the altogether different atmosphere, attitudes, mores, responses of the Indian Society, and its profile.
The identities of the two worlds are different.
The solution of problems cannot therefore be idential.
It is conceivable in the Western Society that a female may level false accusation as regards sexual molestation against a male for several reasons such as: (1) The female may be a 'gold 282 digger ' and may well have an economic motive to extract money by holding out the gun of prosecution or public exposure; (2) She may be suffering from psychological neurosis and may seek an escape from the neurotic prison by phantasizing or imagining a situation where she is desired, wanted and chased, by males.
(3) She may want to wreak vengence on the male for real or imaginary wrongs.
She may have a grudge against a particular male, or males in general, and may have the design to square the account; (4) She may have been induced to do so in consideration of economic rewards, by a person interested in placing the accused in a compromising or embarassing position, on account of personal or political vendetta; (5) She may do so to gain notoriety or publicity or to appease her own ego, or to satisfy her feeling of self importance in the context of her inferiority complex; (6) She may do so on account of jealousy; (7) She may do so to win sympathy of others; (8) She may do so upon being repulsed.
By and large these factors are not relevant to India, and the Indian Conditions.
[288 F H, 289 A E] 2:3.
Rarely will a girl or a woman in India make such false allegations of sexual assault, whether she belongs to the urban or rural society, or, sophisticated, or, not so sophisticated, or, unsophisticated society.
Only very rerely can one conceivably come accross an exception or two and that too possibily from amongst the urban elites.
Because: (1) A girl or a woman in the tradition bound non permissive Society of India would be extremely reluctant even to admit that any incident which is likely to reflect on her chastity had ever occurred; (2) She would be conscious of the danger of being ostracised by the Society or being looked down by the society including by her own family members, relatives, friends, and neighbours; (3) She would have to brave the whole world; (4) She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered; (5) If she is unmarried, she would apprehend that it would be, difficult to secure an alliance with a suitable match from a respectable or an acceptable family; (6) lt would almost inevitably and almost invariably result in mental torture and suffering to herself; (7) The tear of being taunted by others will always haunt her; (8) She would feel extremely embarrassed in relating the incident to others being over powered by feeling of shame on account of the upbringing in a tradition bound society where by and large sex is taboo; (9) The natural inclination would be to avoid giving publicity to the incident lest the family name and family honour is brought into controversy; (10) The parents of an unmarried girl as also the husband and members of the husband 's family of a married woman, would also more often than not, want to avoid publicity on account of the fear of social stigma on the family name and family honour; (11) The fear of the victim herself being considered to be promiscuous or in some way responsible for the incident regardless of her innocence; (12) The reluctance to face interrogation by the investigating agency, to face the court, to face the cross examination by Counsel for the culprit, and the risk of being disbelieved, acts as a deterrent.
In view of these factors the victims and their relatives are not too keen to bring the culprit to books.
And when in the face of these factors the crime is brought to light there is a built in assurance that the charge is genuine rather than fabricated.
[289 F H, 290 A E] 283 2:4.
On principle the evidence of a victim of sexual assault stands on par with evidence of an injured witness.
Just as a witness who has sustained an injury (which is not shown or believed to be self inflicted) is the best witness in the sense that he is least likely to exculpate the real offender, the evidence of a victim of a sex offence is entitled to great weight, absence of corroboration notwithstanding.
And while corroboration in the form of eye witness account of an independent witness may often be forthcoming in physical assault cases, such evidence cannot be expected in sex offences, having regard to the very nature of the offence.
It would therefore be adding insult to injury to insist on corroboration drawing inspiration from the rules devised by the courts in the Western World.
[290 E G] 2:5.
Therefore, if the evidence of the victim does not suffer from any basic infirmity, and the 'probabilities factor ' does not render it unworth of credence, as a general rule, there is no reason to insist on corroboration except from the medical evidence, where, having regard to the circumstances of the case, medical evidence can be expected to be forthcoming, subject to the following qualification: Corroboration may be insisted upon when a woman having attained majority is surprised in a compromising position and there is a likelihood of her having levelled such an accusation on account of the instinct of self preservation.
Or when the 'probabilities factor ' is found to be out of tune.
[290 G H, 291 A B] 2:6.
To countenance the suggestion, in the instant case, that the appellant has been falsely roped in at the instance of the father of P.W. 2 who was supposed to have some enmity against the appellant would be wrong.
Ordinarily no parents would do so in Indian Society as at present and thereby bring down their own social status and spoil their reputation in Society, not to speak of the danger of traumatic effect on the psychology of their daughter.
Having regard to the prevailing mores of the Indian Society, it is inconceivable that a girl of 10 or 12 would invent on her own a false story of sexual molestation.
Moreover, the medical evidence fully supports the finding of the High Court that there was an attempt to commit rape on P.W. 1 by the appellant.
[291 G H, 292 A D]
|
Civil Appeal Nos.
973 74 of 1985.
From the Judgment and order dated 15.7.1983 of the Allahabad High Court in Writ Petition Nos.
3532 of 1979 & 357 of 1981.
Dr. L.M. Singhvi, K.R. Nagaraja, R.S. Hegde and C. Mukhopadhyay for the Appellants.
A.D. Singh, Mrs. section Dikshit, A.K. Gupta, Raju Ramachandaran and B.S. Chauhan for the Respondents.
Subhash Chandra, Respondent No. 34 in person.
The Judgment of the Court was delivered by DUTT, J.
These two appeals by special leave involve the interpretation of the Uttar Pradesh Non Technical (Class II) Services (Reservation of Vacancies for Demobilised officers) Rules, 1973, hereinafter referred to as 'the 1973 Rules ', and the Uttar Pradesh Non Technical (Class II/Group 'B ') Services (Appointment of Demobilised officers) Rules, 1980, hereinafter referred to as 'the 1980 Rules ', relating to the seniority of the appellants vis a vis the private respondents.
577 The appellants have all been appointed in the Provincial Civil Service of the State of Uttar Pradesh as direct recruits on the basis of competitive examinations held by the Uttar Pradesh Public Service Commission.
The appointments of the appellants were made under the U.P. Civil Service (Executive Branch) Rules, 1941 framed under section 241(1)(b) of the Government of India Act, 1935, hereinafter referred to as 'the Service Rules '.
The respondents were recruited under the 1973 Rules and/or the 1980 Rules.
The respondents were either Emergency Commissioned officers or the Short Service Commissioned officers of the armed forces of the Union of India and were commissioned on or before November 1, 1962 during the Indo Chinese war.
They were demobilised from armed forces in or about 1968.
These respondents, therefore, rendered services to the country during the operation of the emergency when the nation 's security was in peril due to external aggression.
In order to rehabilitate such persons and to ensure them that in civil life, after the cessation of emergency, they were not to suffer for rendering services to the nation and with a view to putting the respondents at par with other persons, the 1973 Rules were framed by the Governor of U.P. in exercise of his powers under the proviso to Article 309 of the Constitution of India.
Rule 1(3) of the 1973 Rules provide that they shall remain in force for a period of five years from the date of their commencement.
Rule 3, inter alia, provides for the reservation of ten per cent of the permanent vacancies in all Non Technical (Class II) Services to be filled substantively by direct recruitment through competitive examination in any year.
Rule 6 relating to seniority and pay, which is important for the purpose of these appeals, is extracted below: "R.6.
Seniority and pay (1) Seniority and pay of candidates appointed against the vacancies reserved under sub rule (1) of rule 3, shall be determined on the assumption that they entered the service concerned at their second opportunity, of competing for recruitment, and they shall be assigned the same year of allotment as successful candidates of the relevant competitive examination: Provided that any such candidate who had two opportunities before the date of his joining the training 578 prior to his commission whether he actually availed any A such opportunity or not, shall be assigned the same year of allotment as successful candidates of the first competitive examination held after the said date.
Explanation The year of a candidate 's second opportunity will be determined by the date of his birth in relation to the prescribed minimum age for competing for recruitment to the service.
(2) Seniority inter se of candidates who are appointed against vacancies reserved under sub rule (1) of rule 3 and allotted to a particular year shall be determined according to the merit list prepared by the Ayog on the basis of the results of their performance at the examination.
(3) All candidates appointed against vacancies reserved under sub rule (1) of rule 3 and allotted to any particular year shall rank below the candidates who were successful at the competitive examination held for recruitment to the service in that year.
(4) The pay of candidates appointed against vacancies referred to in sub rule (3) of rule 3 shall also be determined in the same manner as indicated in sub rule (1) of this rule but their seniority shall be determined in accordance with the foregoing sub rules only if and at the point of time when they are appointed substantively against permanent vacancies.
" For the purpose of seniority and pay, rule 6 takes into account the period of war service rendered by a candidate who, after his demobilisation from such service, successfully competes in the relevant examination which is in the present case, the Provincial Civil Service Examination.
Under Rule 6, when such a candidate is recruited after his successfully competing in the relevant examination, it will be assumed that he had entered service with retrospective effect from the year in which he had the second opportunity of taking the relevant examination for his recruitment, which he could not take on account of his having joined the service of the armed forces of the Union of India.
So far as the actual period rendered by the respondents in the 579 armed forces during the emergency is concerned, there is no dispute that such period shall be taken into consideration for the purpose of computing the seniority and pay.
The grievance of the appellants is that although there were long gaps between the dates of demobilisation and the dates of recruitment of the respondents, the State of Uttar Pradesh had, in computing the seniority of the respondents, taken into consideration not only the period during which the respondents were in the services of the armed forces, but also such long gaps.
It is pointed out by the appellants that in the cases of one or two respondents, the gaps were even of about 11 years and these long gaps had been taken into account in computing their seniority.
As a result of such computation, the respondents after their appointments were placed above the appellants, although the appellants were recruited to the Provincial Civil Service under the Service Rules long before the respondents were recruited.
If such gaps are excluded from consideration, the appellants will be seniors to the respondents.
It is also alleged by the appellants that several of the respondents, after coming back from the army, joined various services, both Government and private services, and had spent 3 to 10 years or more in those services before they were recruited under the 1973 Rules or 1980 Rules.
In 1976, a seniority list was prepared showing the respondents seniors to the appellants on the basis of the period of their service in the armed forces and the gaps between their discharge and recruitment.
In 1980 also, a seniority list was prepared in like manner showing the appellants as juniors to the respondents.
Being aggrieved by the 1976 seniority list, the appellants moved two writ petitions under Article 226 of the Constitution before the Allahabad High Court, inter alia, challenging the validity of the 1973 Rules and also 1980 Rules.
The High Court overruled the contention of the appellants that the 1973 Rules and 1980 Rules were invalid being violative of Article 14 of the Constitution of India and held that both these Rules were legal and valid.
It, however, took the view that under rule 6 of the 1973 Rules or rule 5 of 1980 Rules, which are verbatim the same, the period during which the respondents had no employment or were employed elsewhere till recruitment in the Provincial Civil Service after competing in the relevant examination, will be taken into account along with the period during which they were in the services of the armed forces for the purpose of computing their seniority in the Provincial Civil Service.
Accordingly, the High Court upheld the vali 580 dity of the impugned seniority list.
Hence this appeal.
It is urged by Dr. Singhvi, learned Counsel appearing on behalf of the appellants, that the interpretation given by the High Court of rule 6 of the 1973 Rules relating to seniority and pay is in excess of the relief intended to be granted by that rule.
It is submitted that rule 6 was framed for the purpose of taking into consideration the period of service in the armed forces in computing the seniority of a candidate appointed in the Provincial Civil Service after competing in the relevant examination, so that he does not suffer because of joining the armed forces.
Rule 6 does not provide for taking into consideration the gap between the date of demobilisation of a candidate and the date on which he is appointed in the Provincial Civil Service after competing in the relevant examination.
If such gaps are also taken into consideration, it would be doing injustice to the appellants who have been appointed long before the respondents.
Accordingly, Dr. Singhvi submits that when a candidate who was in the armed forces of the Union joined the Provincial Civil Service after his discharge from the armed forces, it would be assumed that he had entered the Provincial Civil Service at the second opportunity of competing for the recruitment, but no other period including that between the discharge and recruitment will be taken into account for the purpose of computing the seniority of such a candidate.
on the other hand, it is submitted by Mr. Anil Dev Singh and Mr. Gupta, learned Counsel for the respondents, and Mr. Subhash Chandra, respondent No. 34, appearing in person, that rule 6 does not prohibit, either expressly or by necessary implication, the taking into account of the period between demobilisation and recruitment in the Provincial Civil Service.
It is submitted that not only the length of the war service but also such gaps should be considered for the purpose of computation of seniority.
They submit that as only ten per cent of the vacancies were reserved for war service candidates, it was difficult for such candidates to get a chance within a reasonable time after their discharge from war service and it would be quite consistent with rules of natural justice to take into account the interregnum between the date of discharge and the date of recruitment.
Rule 6 only provides that after the discharge of a candidate from the armed forces and his subsequent appointment in civil service on the basis of competitive examination, it will be assumed that he had joined the service at the second opportunity of competing for the recruitment.
The second opportunity has been explained in the Expla 581 nation to rule 6.
It provides that the year of a candidate 's second opportunity will be determined by the date of his birth in relation to the prescribed minimum age for competing for recruitment to the service.
For example, if the minimum age for taking the competitive examination for recruitment is 21 years, the first opportunity of a candidate will be in the year he attains that age and the second opportunity will be in the next year, that is, at the age of 22 years.
Under rule 6, the recruitment of a war service candidate will be assumed to have been made in the year in which he had the second opportunity of competing for such recruitment.
In other words, the seniority of such a candidate will be computed on the basis that he had joined the civil service in the year of his second opportunity of competing for the recruitment.
It is true that rule 6 does not provide for the period between demobilisation and recruitment of a war service candidate in the civil service.
Nor does it forbid consideration of such period.
It cannot, however, be deemed that after the discharge from war service, there will be some lapse of time for the recruitment of a candidate in the Provincial Civil Service.
Immediately after discharge, one cannot get himself recruited in the Provincial Civil Service.
There is a question of competing in the examination.
Rule 6 does not provide for any gap to be taken into consideration, yet it is apparent that some reasonable period has to be allowed to a candidate so as to enable him to avail himself of the opportunity of appearing at the competitive examination for his recruitment in the Provincial Civil Service.
It cannot be gainsaid that to compete in the examination, a candidate has to make preparation for that.
Competitive examinations are generally difficult and, in our opinion, at least two years ' time should be allowed to a candidate, after his discharge, for his preparation for the competitive examination and that will be his first opportunity.
The second opportunity will arise in the next year, that is, in the third year of his discharge from the armed forces.
In other words, he should be allowed three years for competing in the relevant examination for recruitment in the civil service.
Even after he becomes successful, he is not recruited immediately.
There is the question of availability of vacancies and posting.
It is common knowledge that some time is taken for posting.
On a proper construction of rule 6, the period spent by a candidate for competing in the examination which, in our opinion, will not be more than three years, and the period of time taken for his recruitment or posting will also be taken into consideration for the purpose of computing the 582 seniority of a war service candidate.
Thus, if a candidate is discharged in the year 1968, he should be given three years ' time to avail himself of the opportunity of competing in the examination.
Suppose, he is successful in the examination held in 1971 and posted in 1973.
In view of rule 6, he would be deemed to have entered service at the second opportunity of competing for recruitment and the entire period from the date of assumed entry in the service up to his recruitment in 1973 shall be taken into account for the purpose of computing seniority and pay.
If, however, a candidate does not avail himself of the opportunity within three years of his discharge from war service or takes the examination but becomes unsuccessful, the period between his discharge and subsequent recruitment will not be taken into account for the purpose of computing the seniority.
Rule 6 should be given a reasonable interpretation.
We do not find any reason to interpret rule 6 in a way which will be doing injustice to the appellants who have been recruited under the Service rules after competing successfully in the examination.
We agree with the High Court that the 1973 Rules as also the 1980 Rules are quite legal and valid.
We are, however, of the view that under rule 6 of the 1973 Rules or rule 5 of the 1980 Rules only a reasonable period, namely, the period of three years, required for taking the examination and the time taken for recruitment or posting, as discussed above, along with the period of war service, but no other period, will be taken into consideration for the purpose of computing the seniority and pay.
The impugned seniority list prepared in 1976 and also that prepared subsequently in the year 1980 cannot be sustained, as they have been prepared by taking into consideration the entire period between the discharge and the recruitment without any reservation for computing the seniority.
For the reasons aforesaid, we set aside the judgment of the High Court relating to the interpretation of rule 6 of the 1973 Rules.
The impugned seniority lists of 1976 and 1980 are also quashed.
The State of Uttar Pradesh is directed to prepare the seniority list in the light of the observations made hereinabove within a period of six months from date.
The appeals are allowed to the extent indicated above.
There will, however, be no order as to costs in either of these appeals.
G.N. Appeals allowed.
| The respondent plaintiff filed a suit in the High Court against the appellants inter alia for dissolution of partnership and for accounts.
The plaintiff valued the suit for the purpose of jurisdiction at Rs.25 lakhs and for the purpose of court fee at Rs.500.
The appellants raised a preliminary objection as to the valuation of the suit contending that the relief sought for in the suit had been grossly undervalued and the Court should reject the plaint under order VII, Rule 11(b), Civil Procedure Code.
The learned Single Judge overruled the preliminary objection and held that the suit was not undervalued.
The Division Bench in dismissing the appeal; followed a Full Bench decision of the same High Court wherein it was observed that paragraph (iv) of section 7 of the Court Fees Act gave the right to the plaintiff in any of the suits mentioned in the clauses of that paragraph to place any value that he liked on the relief he sought, subject, however, to any rule made under section 9 of the Suits Valuation Act, and the Court had no power to interfere with the plaintiff 's valuation.
Before this Court, the appellant contended (1) that in a suit for accounts the plaintiff could not value the suit most arbitrarily according to her whims and (2) that an objective standard or positive material 432 appeared on the face of the plaint and the valuation of the relief ignoring such objective standard was demonstratively arbitrary.
Dismissing the appeal it was, ^ HELD: (1) The suits which are mentioned under section 7(iv) are of such nature that it is difficult to lay down any standard of valuation.
Indeed, the Legislature has not laid down any standard of valuation in the Court Fees Act.
[435B C] (2) It is apparent from Rule 4(i) of the Rules framed by the Punjab High Court under section 9 of the Suits Valuation Act, which are applicable to the Union Territory of Delhi, that valuation for the purposes of Court Fee and jurisdiction is not the same.
Under these Rules, the value of suit for accounts for purposes of court fee will have to be determined by the plaintiff.
[434G H] (3) It is manifestly clear from the provision of order VII, Rule 11 (b), that a Court has to come to a finding that the relief claimed has been undervalued which necessarily means that the Court is able to decide and specify proper and correct valuation of the relief.
But ordinarily it is not possible for the Court at a preliminary stage to determine the value of the relief in a suit for accounts simpliciter and the Court has no other alternative than to accept plaintiff`s valuation tentatively.
[435G H; 436B C] (4) Where there are objective standard of valuation or, in other words, the plaintiff or the Court can reasonably value the relief correctly on certain definite and positive materials, the plaintiff will not be permitted to put an arbitrary valuation dehors such objective standards or materials.
[439C D] (5) The plaintiff cannot whimsically choose a ridiculous figure for filling the suit where there are positive materials and/or objective standards of valuation of the relief appearing on the face of the plaint.
These materials or objective standards will also enable the Court to determine the valuation for the purpose of Order VlI, Rule 11(b), of the Code of Civil Procedure.[441C D] (6) The valuation of the relief in the instant case, for the rendition of accounts under Section 7(iv)(f) of the Court Fees Act.
is neither unreasonable nor it is demonstratively arbitrary.[442E] 433 Smt.
Sheila Devi & Ors.
vs Shri Kishan Lal Kalra & Ors., ILR 1974 Delhi 491; section Rm.
Sathappa Chettiar vs section Rm.
Ramanathan Chettiar, 119581 SCR 1024; Urmilabala Biswas vs Binapani Biswas, AIR 1938 Cal 161; Kishori Lal Marwari vs Kumar Chandra Narain Deo, AIR 1939 Patna 572; Nalini Nath Mallik Thakur vs Radhashyam Marwari, AIR 1940 Cal 482; Meenakshisundaram Chettiar vs Venkatachalam Chettiar; , ; Tara Devi vs Sri Thakur Radha Krishna Maharaj, [1987] 4 SCC; Abdul Hamid Shamsi vs Abdul Majid, JT and Atma Ram Charan Das vs Bisheshar Nath Dina Nath, AIR 1935 Lah 689 referred to.
|
minal Appeal No. 202 of 1962.
Appeal by special leave from the Judgment and Order dated August 1, 1962, of the Mysore High Court in Criminal Appeal No. 213 of 1961.
W. section Barlingay and A. G. Ratnaparkhi, for the appellant.
R. Gopalakrishnan and B. R. G. K. Achar, for the res pondent.
April 1, 1964.
The Judgment of SUBBA RAO and DAS GUPTA JJ. was delivered by DAs GUPTA J. RAGHUBAR DAYAL J delivered a dissenting opinion.
DAS GUPTA, J.
The appellant, who was a registration clerk in the Haveri Post Office in the Mysore State, was tried by the Sessions Judge, Dharwar, on charges under section 52, section 53 and section 55 of the Indian Post Office Act.
The prosecution case is that on the 18th October 1955 a registered letter containin half portion of a ten rupee note and petition on behalf of one Muppayyagonda asking for the said note to be exchanged for a fresh note was received at the Haveri Post Office at 4.30 p.m. from the Branch Post Office at Kabbur.
The appellant who was a, registration clerk at Haveri at the time, however, detained the registered envelope instead of 608 despatching it that very day as he should have done.
He despatched it the next day.
It was the prosecution case that the appellant removed the half portion of the ten rupee currency note from inside the envelope and to cover up his misconduct made alterations in the petition contained in the envelope and in the list of registered articles.
All this was discovered, it is said, when the Reserve Bank of India, to which this envelope was addressed made enquiries in the matter on finding that no note had been enclosed with the petition.
The appellant admitted that the envelope was received at the Haveri Post Office on October 18, 1955 and also, that he did not despatch it on that date.
His case was that it was received at about 5.30 p.m. on the 18th and so it was too late for despatch on that date but that he despatched it duly on the 19th, On a consideration of the evidence the Sessions Judge held that the charge under section 52 of the Indian Post Office Act for the theft of currency note and for secreting the registered articles had not been established and acquitted him of that charge.
He, however, found it proved that the appellant bad fraudulently altered the lists of registered articles and thereby committed an offence under section 55 of the Indian Post Office Act.
He also held that the appellant had wilfully detained the envelope and thus committed an offence under section 53 of the Indian Post Office Act.
He accordingly convicted the appellant of the charges under Ss. 53 and 55 of the Indian Post Office Act and sentenced him to undergo two months ' imprisonment on each charge.
The sentences were directed to run concurrently.
On appeal.
the High Court of Mysore set aside the ap pellant 's conviction under section 55 of the Indian Post Office Act but maintained his conviction under section 53, being of opinion that while the wilful detention of the envelope by the appellant had been proved, the alleged alterations by him in the list of registered articles had not been established.
Against the High Court 's decision the present appeal has been preferred by the appellant, Ramchandra Narasimha Kulkarni.
In support of the appeal it is contended by Dr. Barlingey that as the allegations of theft of the note or of alterations in the list of registered articles by the appellant have not been established, the appellant must be held not to have committed any offence under section 53 of the Indian Post Office Act.
It is argued that assuming that the envelope was detained by the appellant as alleged, he cannot be said to have detained it `wilfully" unless it is shown that he bad some purpose in doing it.
But, the purpose alleged by the prosecution was that he wanted to commit theft of the currency note, and to cover this up, to make alterations in the list of registered articles, these purposes have not been established.
So, argues the learned Counsel, the detention of the envelope should be held 609 to have been made without any purpose but only through inadvertence or mere carelessness.
That would not constitute, according to the learned Counsel, a, wilful detention.
The words "wilful" and "wilfully" are frequently used in many statutes and have come up for judicial consideration in the courts of this country as also elsewhere.
The meaning given to these words have differed in different contexts.
Sometimes, any intentional act has been held to be a wilful act.
(Re Young and Harston)(1).
Often, it has been said that the word wilful suggests bad conduct or action though it does not necessarily connote blame.
(Wheeler vs New Merton Board Mills)(2) Not infrequently the word has been used to mean that the act had been done with a bad purpose or without justifiable excuse or stubbornly, obstinately or perversely.
(United States of America vs Harry Murdock)(3).
Some decisions stress the requirement of deliberation or reckless disregard of the fact whether the act was or was not in breach of duty in deciding whether it has been wilful.
(Hudson vs Official Liquidator(4); and In re T.N.K. Govindarajulu Chetty)(5).
In the last mentioned case, viz., In re T.N.K. Govindarajulu Chetty 's case, the Madras High Court held that a submission of a false return cannot be a wilful submission unless the dealer has deliberately made the return with the knowledge that he was excluding a taxable item, though in almost similar circumstances another Bench of the same High Court took a different view and held that even though when an assessee, under the impression that a particular item is not taxable and, therefore, need be excluded in the return, omits lo make a mention, of it in the return which he furnished with the full knowledge of his having committed the same, he has "wilfully" omitted it.
(In re Jayarama Chettiar) (6).
A review of these various decisions brings out clearly the guiding principle that the meaning to be attached to the words " wilful" or "wilfully" has to be ascertained on a close examination of the scheme and nature of the legislation in which the words appear and the context in which they are used.
Turning now, for this purpose, to the Indian Post Office Act, we notice that s.53 which makes punishable the wilful detention or delay of a postal article by an officer of the post office in one of the several sections which create offences under this Act.
There are 21 such sections, being sections 49 (1)31 Ch. D. 174.
(2) 1933(2) K.B. 669.
(3)78 Law E. 389.
(4) A.I.R. 1929 All. 826.
(5)1951 2 S.T.C. 27.
(6) I.L.R. 1949 Madras, 121.
L/P(D)ISCI 20 610 to 56 and 58 to 70, all in Chapter X of the Act.
Some of these offences, viz., those under Ss. 49, 58, 59, 63, 64, 65, 66 and 67 are punishable only with fine.
The offences under Ss. 50, 51, 52, 53, 54, 55, 56, 60, 61, 62, 68 and 69 are made punishable also with imprisonment.
Of these again, the offences under section 53, are punishable with imprisonment which, may extend to seven years; offences under Ss. 53, 54, 55, 56, 60, and 68 are punishable with imprisonment which may extend to two years; offences under Ss. 61 and 62 are punishable with imprisonment which may extend to one year while offences under Ss. 51 and 69 are punishable with imprisonment which may extend to six months only.
An offence under s, 50 is punishable with imprisonment extending to one month or with fine extending to Rs. 50/ .
This comparison clearly shows that the legislature took a more serious view of the offence of wilful detention of a postal articles (section 52) than of many other offences in this Chapter.
Delay in the conveyance or delivery of a mail bag or other postal articles in the course of transmission by a person employed to carry the same is made punishable with only a fine of Rs. 501 (section 49).
Withdrawal from duties of office without permission or without having given a month 's previous, notice in writing by a person employed to carry or deliver a mail bag or postal article is also made punishable only with imprisonment extending to one month or with fine extending to Rs. 501 .
Making of a false entry in the register with intention to induce the belief that an article has been delivered is made punishable with imprisonment extending to only six months or with fine extending to Rs. 100/ .
But Wilful, detention of a postal article is made punishable with imprisonment extending to two years.
Is it reasonable to thin that the legislature would prescribe this heavy punishment for detention of a postal article which was not deliberate and on purpose, while prescribing lighter punishment as mentioned above for the offences under Ss. 49, 50 and 5 1.
We do not think so.
The very fact that this comparatively heavy punishment of two years ' imprisonment has been prescribed for wilful detention while lighter punishment has been prescribed under Ss. 49, 50 and 51, justifies, in our opinion, the concclusion that the word "wilful" was used by the legislature to mean only such detention which was deliberate and for some purpose.
It is interesting to notice in this connection that in the, preceding section 52 the legislature after making punishable the offence of theft of a postal article or of dishonest misappropriation of the same, also made punishable the secretion, destruction or throwing away any postal article if done "for any purpose whatsoever".
It is, in our opinion, reasonable to think that in section 53 when the word "wilfully" was used, the 611 legislature also intended that the detention would be punishable only if made for some purpose.
Coining now to the facts of the present case, we find that the prosecution alleged a definite purpose, viz., the purpose of theft of the contents of the envelope as the purpose with which the postal article was detained.
The existence of that purpose has not, however, been established.
Nothing was suggested before us as to, what other purpose the appellant could 'have had in detaining the article.
There is, therefore, no escape from the conclusion that the detention was not deliberate and on purpose, but as a result of either inadvertence or carelessness or negligence.
So, the appellant cannot be said to have detained or delayed the article 'wilfully '.
Accordingly, we allow the appeal, set aside the order of conviction and sentence passed by the High Court and order that the appellant be acquitted of the charge against him.
RAGHUBAR DAYAL, J.
The main question to determine, in this case, is what the expression 'wilfully detains or delays ' in section 53 of the Indian Post Office Act, 1898 (Act VI of 1898), hereinafter called the Act, means.
I do not agree that it means such detention which was deliberate and for some purpose.
I am of opinion that the detention or delay would be 'wilful ' if it was intentional and deliberate on the part of the officer of the post office, as opposed to detention or delay on account of negligence or inadvertence.
The word 'wilful ' or 'wilfully ' used in other enactments have been construed by Court in this manner.
I may refer 'to some of these cases.
In Taylor vs Vergette(1) 'wilful delay ' has been construed ,to mean 'intional delay '. 'Wilfully ' means that the act is done deliberately and intentionally, not by accident or inadvertence, but so that the mind of the person who does the act goes with it".
In Tamboli vs Great Indian Peninsular Railway Company(3) the Privy Council had to construe the expression 'wilful neglect ' in determining the responsibility of the railway administration or its servants and approved of what was said by Lord Russel in Reg.
vs Senior(2).
(1) (2) , 290.
(3) L.R. 55 I.A. 67=I.L.R. L.P(D)LSCI 20(a) 612 In Wheeler vs New Merton Board Mills, Ltd.(1) it was said: " 'Wilful act ' is plain English, and I can entertain no doubt that the installing of this machine without guard or fence for use in the factory was a wilful act by some one.
It was an act, and it was intentional.
It is true that though 'wilful ' and 'intentional ' are synonymous. . wilful ' is more commonly used in modern speech of bad conduct or actions than of good, though it does not necessarily connote blame; but that is far from supporting the strange contention that wilful act in section 29, sub section 1, must be confined to something done with intent to injure".
In Hudson vs Official Liquidator(2) 'wilful default ' was construed and it was said at p. 930: "The adjective 'wilful ' in 'wilful acts or defaults ' has evidently been used as a description and not as a definition.
The idea intended to be conveyed is that the default is occasioned by the exercise of volition or as the result of the non exercise of will due to supine indifference, although the defaulter knew or was in a position to know that loss or harm was likely to result.
The word does not necessarily suggest the idea of moral turpitude.
We have also to eliminate the elements of accident or inadvertence or honest error of judgement.
The default must be the result of deliberation or intent or be the consequence of a reckless omission. 'Wilful default ', therefore, is indicative of some misconduct in the transaction of business or in the discharge of duty by omitting to do something either deliberately or by a reckless disregard of the fact whether the act or omission was or was not a breach of duty".
This view was accepted by the Madras High Court in T.N.K. Govindarajulu Chetty, In re(3).
The words 'wilful ' and 'wilfully ' have been used in the various provisions of the Act do not lead to any different interpretation of these words.
Section 6 of the Act provides, inter alia, that no officer of the Post Office shall incur any liability by reason of any loss, mis delivery, delay or damage, unless he has caused the same fraudulently or by his wilful act or default.
(1)[1933] 2 K.B. 669.
(2) A.I.R. 1929 All.
826 (3) 1951 2.
S.T.C. 27.
613 Section 48(c) provides that no suit or other legal proceed ing shall be instituted against the Government or any officer of the post office in respect of the payment of any money order being refused or delayed by, or on account of, any accidental neglect, omission or mistake by, or on the part of an Officer of the post office, or for any other cause whatsoever, other than the fraud or wilful act or default such officer; and brings out effectively the contradistinction between wilful act or default of an officer and an act done on account of accidental neglect, omission or mistake.
Section 49 to 70 provide for offences.
Sections 49, 50 and 51 deal with offences which are committed by persons who are employed to carry or deliver any mail bag or any postal article, in course of transmission by post.
They are thus offences by carriers of postal articles.
They can be committed both by the officers of the postal department and by others as well.
Such of the acts contemplated by those sections which can also fall under the other sections exclusively applicable to officers of the post office, will naturally be dealt with under those sections.
The persons who will be dealt with under Ss. 49 to 51 or other sections providing for lighter punishments will be those who are not officers of the postal department but are concerned in any manner with the transmission of the post.
Clause (c) of section 49 makes punishable the loitering or making delay in the conveyance or delivery of any mail bag or postal article, and thus emphasizes the necessity of prompt transport of postal articles.
Sections 52 to 66 provide for offences by officers of a post office.
Section 52 provides punishment for committing theft or dishonestly misappropriating in respect of or, for any purpose whatsoever, secreting, destroying or throwing away any postal article in the course of transmission by post or anything contained therein.
The offence is punishable with imprisonment upto seven years and also with fine.
This is the most serious offence.
It is to be noted for our purpose that the secreting, des troying or throwing away of the postal article for any pur pose whatsoever is an offence.
An act done with a purpose must be a deliberate act and a, deliberate act must also be one done with some purpose.
The legislature, where it intended to make the purpose behind an act an ingredient of the offence, expressly stated so.
If the word 'wilful ' or 'wilfully ' is used in the Act as a synonym for an act done deliberately and for some purpose, the expression 'wilfully ' could have been used in the place of 'for any purpose whatsoever '.
This, however, the legislature did not do, though it used that word in the very next section, viz., section 53 which reads: 614 .lm15 "Whoever, being an officer of the Post Office, contrary to his duty, opens, or causes or suffers to be opened, any postal article in course of transmission by post, or wilfully detains or delayed or causes or suffers to be detained or delayed, any such postal article, shall be punishable with imprisonment for a term which may extend to two years, or with fine or with both: Provided that nothing in this section shall extend to the opening, detaining or delaying of any postal article under the authority of this Act or in obedience to the order in writing of the Central Government or the direction of a competent Court".
Sections 54, 55 and 56 make certain acts done fraudulently, knowingly or with intent, punishable with imprisonment upto two years or fine.
Section 55 makes the fraudulent altering or secreting or destroying of a document which an officer of the post office is entrusted with keeping, punishable with imprisonment upto two years and with fine.
This act is con sidered less heinous than that of secreting, destroying or throwing away of any postal article in the course of transmission by post, for any purpose whatsoever.
Section 66(1) makes the master of a ship who, in certian circumstances, knowingly has in his baggage or in his possession or custody, any postal article within the exclusive privilege conferred on the Central Government by section 4, punishable with fine which may extend to Rs. 50/ for every such postal article.
Here a certain act committed knowingly is made an offence.
Sub section
(2) of section 66 makes the detention of any postal article, after a demand for it has been made by an officer of the post office, punishable.
Here, the mere detention after a demand is made penal irrespective of the intention or purpose behind such detention.
Section 67 makes the detention of mails or any postal article in the course of transmission by post by anyone except under the various circumstances mentioned in the section, in offence.
Here again, mere detention is made an offence irrespective of the circumstances in which it is made, excepting for reasons mentioned in the section iteself.
Section 68 reads: "Whoever, fraudulently retains, or wilfully secretes or makes away with, or keeps or detains, or when required by an officer of the post office, neglects or refuses to deliver up, any postal article in 615 course of transmission by post which ought to have been delivered to any other person, or a mail bag containing a postal, article, shall be punishable with imprisonment for a term which may extend to two years, and shall also be punishable with fine".
It is to be noticed that 'wilfully ' secreting any postal article in the course of transmission by post is an offence under this section.
A comparison with the provisions of section 52 of the Act indicates that the legislature must have used the expresssions 'wilfully ' and 'for any purpose whatsoever ' in different senses.
maliciously with intent to injure any person, offences. 'Wilfully" here is used as something distinct from 'maliciously ' and is, further used in addition to the expression 'with intent to injure any person ', that is to say, the particular purpose or intent is in ingredient of the offence in addition to 'wilfully '.
Sections 6 and 48(c) provide that an officer of a post office would be liable for the loss, misdelivery, delay or of damage to any postal article in the course of transmission or for the delay in the payment of a money order, only when this happens as a result of his wilful act or default.
The person suffering from such misdelivery etc., has no claim against the officer of the post office if that thing has been the result of something which could not be said to be the wilful act or default of a postal officer.
It is no concern of the addressee or recipient of an article in transit by post that the wilful act or default of the postal officer was with a certain purpose or not and whether that officer succeeded in that purpose or not.
:Vie should be successful in his claim if the postal officer has deliberately not acted in the manner he is required to act tinder the Act or the rules framed thereunder or if he has deliberately acted in violation of the duties entrusted to him.
In either case, the act of the officer concerned would be wilful inasmuch as he would act intentionally in violation of his duty or in a manner in which he is not to act and not accidently or inadvertently.
The provision of s.53 of the Act require that the office wilfully detains ' the postal article and that the act of detention be contrary to his duty prescribed by or under the Act.
Section 21(2)(c) empowers the Central Government to make rules providing for the detention and disposal of articles in course of transmission by post in certain circumstances.
Sections 22(1), 23, 26.
27B and 37(2) provide for the circumstances in which postal articles can be detained or delayed.
It is not necessary to detail those circumstances.
The clause 'contrary to his duty ' governs both the act of opening 616 of the Postal article and to the act of detaining it.
The first necessary ingredient of the offence under section 53 is that the postal officer should act contrary to his duty.
Such an act, however, can take place by accident or negligence also, without the officer 's knowing it or even giving any thou ]it to it and therefore without his exercising his will in that matter.
The legislature, therefore, felt that accidental or negligent acts be not made offences and that detention of the postal article, even if it be contrary to duty, be protected and that only such detention of the articles be made punishable which be committed wilfully, i.e., when the officer applied his mind towards the act and has committed it deliberately with the intention of committing it.
The mere act of detaining mails or postal articles by any person other than a postal officer is made punishable only with fine under section 67 of the Act.
This indicates that the punishment under section 53 is severe because the culprit is an officer of the post office who has opportunities to detain the postal article and who acts contrary to his duty.
The proviso to section 53 refers to cases which would have come within the main provisions, and provides that the main provisions do not extend to the opening, detaining or delay ing of any postal article under the authority of the Act or in obedience to the order in writing of the Central Government or the direction of a competent Court.
Such acts would be undoubtedly deliberate and without any criminal purpose.
The use of the expression 'for any purpose whatsoever ' in section 52 is no guide to construe the word 'wilfully ' in section 53.
It appears to have been used in section 52 in contradistinction to the mens rea necessary for the commission of the offence of theft or of dishonest misappropriation.
Its use makes it clear that the act of secreting, destroying or throwing away of the postal article will be punishable if with a purpose, whatever that may have been.
I, therefore, construe 'wilfully ' in section 53 to mean 'inten tionally and deliberately ' and not accidently or negligently and hold that the appellant has been rightly convicted of the offence under that section.
I am further of opinion that even if the expression 'wil fully detains ' in section 53 of the Act means a detention delibe rate and for some purpose, the appellant is not entitled to an acquittal on the findings the Courts have arrived at.
The appellant, in ordinary course of business, would have forwarded the registered letter by the mail on October 18, 1955 when it had been received at the usual hour and the ap pellant 's contention that it was received after the despatch 617 of the mail has not been accepted.
It follows that the appellant deliberately detained the registered letter.
The intention and deliberation was directed towards the detaining of the registered letter and to the non forwarding of it in due course With the mail that day.
Every intentional and deliberate act must be with some purpose or object.
It may be that in some cases the object be achieved by the mere doing of the act intended, that is to say, the object was just the doing of that act.
In other cases, an act may be done with some further object also.
The appellant 's purpose behind his intentional act of detaining the registered letter must have been to remove what he might have suspected the letter to contain.
If he did not have any such object, he could not have any reason to depart from his duty and detain the letter instead of sending it by the next mail in the ordinary course of his duties.
His act, therefore, in detaining the letter, amounted to his detain ing it wilfully.
that he himself opened the letter, tempered with its contents, and removed the half currency note, facts which have been proved to have been committed by someone, does not mean that his detaining the letter was not on purpose.
A person may do an act with a certain purpose and yet may not succeed in his purpose.
Even if he succeeds it may not be possible for any other person to establish that he did that act for that purpose and did succeed in achieving that purpose.
I would, therefore, dismiss the appeal.
ORDER BY COURT In accordance with the majority opinion, the appeal is, allowed, the order of conviction and sentence set aside and the appellant ordered to be acquitted of the charge against him.
Appeal allowed.
| The appellant was a registration clerk in a post office.
He was prosecuted on the allegation that he committed theft of a half of a ten rupee note contained in a registered letter along with a petition for exchanging it, for altering the petition and for detaining the registered letter for a day with the purpose of committing the theft and making the alteration.
He was charged under Ss. 52, 53 and 54 respectively of the Post Offices Act, 1898.
The Sessions Judges who tried the case found him not guilty of the offence under section 52 but guilty under Ss. 53 and 55.
On appeal to the High Court he was found not to be guilty of the offence under section 55; the conviction under section 53 was maintained.
Thereupon he appealed to this Court.
It was contended by the appellant before this Court that as suming that he detained the envelope he cannot be said to have detained it "wilfully", unless it is shown that he had some purpose in doing it and since the purpose alleged by the prosecution has not been proved the appellant cannot be said to have committed the offence under section 53.
Held: per K. Subba Rao and K. C. Das Gupta, JJ.
A review of the case law brings out clearly the guiding principle that the meaning to be attached to the words "wilful ' or ',wilfully" has to be ascertained on a close examination of the scheme and nature of the legislation in which the words appear and the context in which they are used.
Re Young and Harston, Wheeler vs New Merton Board Mills, United States of America vs Harry Murdock, , Hudson vs Official Liquidator, A.I.R. 1929 All. 826, In re T. M. K. Govindarajulu Chetty, 1951 2 S.T.C. 27 and In re Jayarama Chettiar, I.L.R. referred to.
(ii) A comparison of the various sections of the Act shows that the legislature took a more serious view of the offence of wilful detention of postal articles than any of the offences in Ch.
X and has, therefore, prescribed a comparatively heavy punishment.
Hence it is reasonable to think that in section 53 when the word "wilfully" was used the legislature also intended that the detention would be punishable only if made for some purpose.
(iii) The prosecution alleged in the present case that the purpose was theft of the note but the existence of that purpose has not been established and detention was not deliberate and hence the appellant cannot be said to have detained the article wilfully.
Per Raghubar Dayal, J. (dissenting) The legislature where it intended to make the purpose behind an act an ingredient expressly stated so, as for example in section 52.
If the word "wilful" or "wilfully" is used in the Act as 607 a synonym for an act done deliberately and for some purpose, the expression wilful could have been used in the place of "for any purpose whatsoever".
This the legislature did not do though it used that in section 53.
(ii) The mere act of detaining a postal article by any person other than a postal officer is made punishable with only fine under s, 67 and a higher punishment is provided under section 53 because the culprit is an officer of the post office who has opportunities to detain the, postal articles and who acts contrary to his duties.
(iii) The expression "wilfully" in section 53 means "intentionally and deliberately" and not "accidently" or "negligently".
(iv) From the facts of the case it is proved that the appel lant deliberately detained the registered letter.
His intention and deliberation were directed towards the detaining of the registered letter and to the non forwarding of it in due course with the mail that day.
Every intentional and relevant act must be with some purpose or object.
He, therefore obtained the letter wilfully and is guilty of the offence under section 53.
Taylor vs Vergette (861) , Reg.
vs Senior , Tamboli vs Great India Peninsular Railway Company, L.R. 55 I.A. 67, Wheeler vs New Merton Board Mills Ltd. , Hudson vs Official Liquidator, A.I.R., 1929 All. 826 and T. N. K. Govindarajulu Chetty, 1951 S.T.C. Vol. 2, 26, referred to.
|
Appeals Nos. 489 & 490 of 1961.
Appeals by special leave from the award dated March 16, 1959, of the Second Industrial Tribunal, Delhi in Reference I. D. No. 20 of 1958.
G.S. Pathak, section T. Desai, M. L. Sethi, B. Dutta and Anand Prakash, for the appellant (in C. A. No. 489/61) and the respondent (in C. A. No. 490/61).
M. C. Setalvad, Attorney General for India M.K. Ramamurthi, D. P. Singh, R. K. Garg and S.C. Agarwal, for the respondents (in C.A. No. 489/61) and the appellants (in C. A. No. 490/61).
December 14.
The judgment of the Court was delivered by DAs GUPTA,. ' J.
These two appeals by special leave, one by the employer and the other by the workmen, arise out of an industrial dispute that was referred for adjudication to the Industrial Tribunal Delhi, by an order made on January 23, 1958 by the Chief Commissioner, Delhi.
The Tribunal made its award on March 16, 1959.
Out of the numerous 237 matters that were included in the terms of reference, we are concerned in these appeals only with a few.
The employer challenges the award as regards : (1) Scales of pay, (2) Dearness allowance, (3) Adjustments, (4) Leave Rules, (5) Gratuity and (6) Retrospective effect of the award.
The workmen also attacked the award as regards the scales of pay and dearness allowance.
In addition, they have attacked the award as regards the working hours, leave rules, night shift allowance, retirement age and procedure for taking disciplinary action.
At the time of the hearing before us however the learned Attorney General, appearing for the workmen, did not press their claim for modification of the award as regards, night shift allowance, leave rules and procedure for taking disciplinary action and working hours.
It appears that when the dispute was before the Conciliation Officer, Delhi, for settlement an interim agreement was arrived at between the parties on December 20, 1957 by which the management agreed to give certain interim reliefs, ranging between Rs. 6/ to Rs. 10/ per month from the month of November 1957.
One of the terms of the agreement was that this payment "will be adjusted against the final outcome of the demands by constitutional means".
The Tribunal has in its award given a direction that this interim relief shall remain unaffected.
Taking this to be a direction that the adjustment as agreed upon of payments under the interim arrangement shall not be made, the employer has in its appeal challenged the correctness of this direction also.
The most important of the matters in dispute are the questions of the wage scale, the dearness allowance and the adjustment of existing employees into the new scales.
It appears that from 1946 onwards the Company 's workmen have had a consolidated wage scale, no distinction being made between 238 the basic wage and the dearness allowance.
This wage scale has remained practically unaltered except for some special increments given in the year 1948.
By the award the Tribunal has introduced new wage scale for certain existing categories of workmen and in some cases has introduced new scales, after amalgamating more than one category.
Thus certain railway despatchers, advertisers, Box No. sorters, filing clerks and bank clerks who were formerly in the scale of Rs. 50 4 90 EB 4 115 and Junior Clerks etc., who had a scale of Rs. 60 100EB 4 115 have all been put on a new scale of Rs. 70 5 100 EB 5 150.
There has been a similar amalgamation or clerks, assistants, cashiers, record keepers and others some of whom were on Rs. 80 175 and some on Rs. 80 203 scale, all of them being now put on a new scale of Rs. 90 200.
In both cases the starting salary has been raised; the maximum has been raised for the first category.
Supervisors and others who were formerly on three different scales, some on Rs. 125 350, some on Rs. 125 300, and some on Rs. 100 250, have all been amalgamated and have been put on a new scale of Rs. 100 350.
Obviously, this would mean a lower starting salary for some and maximum for some.
,job I)Daftries some of whom were on Rs. 70 115 scale and others on Rs. 100 155 have all been put on a new scale of Rs. 80 to Rs. 11,15, resulting thus in a lowering of starting salary for some and a rise of a higher maximum for all.
A similar lowering in the starting salary has also occurred in cases of some of the jobmachinemen.
They were formerly on two scales, one of Rs.125 175 and the other of Rs. 75 175.
The Assistant Foremen in the job Department formerly on Rs. 125 175 are put on a scale of Rs. 125 202.
Where there has been no amalgamation the new scale has resulted in a slight increase in some cases both in the starting salary and the maximum.
In some catagories, no change has been made at all, 239 It is unnecessary to give more details of the difference between the old scale and the new scale as what has been mentioned above is sufficient to indicate that there has been some change in favour of the workmen, though this change is not much.
The employer 's contention before us is that there was no case for any revision whatsoever and the Tribunal acted wrongly in making any change in the old wage scale.
The workmen 's contention on the contrary is that the changes do not go far enough.
The fixation of wage structure is among the most difficult tasks that industrial adjudication has to tackle.
On the one hand not only the demands of social justice but also the claims of national economy require that attempts should be made to secure to workmen a fair share of the national income which they help to produce, on the other hand, care has to be taken that the attempt at a fair distribution does not tend to dry up the source of the national income itself On the one hand, better living conditions for workmen that can only be possible by giving them a "living wage" will tend to increase the nation 's wealth and income on the other hand, unreasonable inroads on the profits of the capitalists might have a tendency to drive capital away from fruitful employment and even to affect prejudicially capital formation itself.
The rise in prices that often results from the rise of the workmen 's wages may in its turn affect other members of the community and may even affect prejudicially the living conditions of the workmen themselves.
The effect of such a rise in price on the Country 's international trade cannot also be always ignored.
Thus numerous complex factors, some of which are economic and some spring from social philosophy give rise to conflicting considerations that have to be borne in mind.
Nor does the process of valuation of the numorous factors remain static.
While international movements in the cause of labour have for many years influenced thinking and 240 some times even judicial thinking in such matters, in this country, the emergence of an independent demo cratic India has influenced the matter even more profoundly.
Gajendragadkar, J. speaking for the Court in Standard vacuum Refining Co., of India vs Its Workmen (1), has observed : "In constructing a wage structure in a given case industrial adjudication does take into account to some extent considerations of right and wrong, propriety and impropriety, fairness and unfairness.
As the social conscience of the general community becomes more alive and active, as the welfare policy of the State takes a more dynamic form, as the national economy progresses from stage to stage, and as under the growing strength of the trade union movement, collective bargaining enters the field, wage structure ceases to be a purely arithmetical problem.
Considerations of the financial position of the employer and the state of national economy have their say, and the requirements of a workman living in a civilised and progressive society also come to be recognised.
" In trying to keep true to the two points of social philosophy and economic necessities which vie for consideration, industrial adjudication has set for itself certain standards in the matter of wage fixation.
At the bottom of the ladder, there is the minimum basic wage which the employer of any industrial labour must pay in order to be allowed to continue an industry.
Above this is the fair wage, which may roughly be said to approximate to the need based minimum, in the sense of a wage which is "adequate to cover the normal needs of the average employee regarded as a human being in a civilised society.
" Above the fair wage is the "living wage" a wage "which will maintain the workman in the highest state of industrial efficiency, which will enable him to (1) , 543.
241 provide his family with all the material things which are needed for their health and physical well being, enough to enable him to qualify to discharge his duties as a citizen." (Cited with approval by Mr. justice Gajendragadkar in Standard Vacuum Company 's Case (1) from "The living Wage" by Philip Snowden).
While industrial adjudication will be happy to fix a wage structure which would give the workmen generally a living wage economic considerations make that only a dream for the future.
That is why the industrial tribunals in this country generally confine their horizon to the target of fixing a fair wage.
But there again, the economic factors have to be carefully considered.
For these reasons, this court has repeatedly emphasised the need of considering the problem on an industry cum region basis, and of giving careful consideration to the ability of the industry to pay.
(Vide Crown Aluminium 's Case (2); the Express Newspapers Ltd., Case (8) and the Lipton 's Case (4).
On an examination of the Tribunal 's award as regards the wage scale, we are satisfied that all the considerations mentioned above were present in the mind of the adjudicator and we are of opinion that there is nothing that would justify us in modifying the award either in favour of the employer or in favour of the workmen.
It is stated in the award that before the Tribunal the Company 's representative desired that a fair wage level within its paying capacity should be evolved though at the time he argued that existing wage structure is quite fair ""looking to the Company 's financial position as well as the comparative rates prevailing in the other concern.
" The Tribunal has not accepted the Company 's contention that the existing wage structure is fair, though at the same time it has held that the wage system needs no such radical change as alleged by the Union.
(1) , 543.
(3) (2) ; (4) [1959] Supp. 2 S.C.R. 150.
242 Mr. Pathak, who appeared before us for the Company, did not seriously suggest that the present wage structure gives the employees "a fair wage." He argued generally that no case was made out for any revision of the wage structure.
Such an extreme proposition has only to be mentioned to deserve rejection.
At the time the Tribunal was dealing with this question the wage scale of the workmen in this concern had remained practically unaltered for almost 12 years 12 years of momentous change through which social ideas have moved forward in favour of workmen getting a better share of the national income; 12 years during which the new India was born and a Constitution was framed for this new democracy "to secure to all its citizens, justice, social and economic and political" and enshrining in its 43rd Article the principle that ,the State shall endeavour to secure by suitable legislation or economic Organisation or in any other way to all workers agricultural, industrial or otherwise" among other things tea living wage and conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. . . . ".
The mere passage of time and these revolutionary changes would be sufficient to convince any right thinking man of the need for revision of wage scales which, on the face of it, were far below the "living wage" and mostly also below the " 'fair wage", provided the industry could bear the additional burden.
The case for revision becomes irresistible when one takes into consideration the further fact that the cost of living rose steeply during this period.
On the basis of 1939 cost as 100, the index for 1946 was 282.
By 1958 it had risen to 389.
It may be mentioned that since then there has been a further rise.
Nor can it be seriously suggested that this concern cannot bear the burden of an increased wage scale.
The Tribunal was, in our opinion, right in its conclusion that the material on record shows that the Company has been prospering and has financial 243 stability.
We have for ourselves examined the balance sheets and the other materials on the record and have no hesitation in agreeing with that conclusion.
Mr. Pathak 's uphill task in the face of these balance sheets already on the record to show that the Company would not be able to bear the burden of an increased wage scale has been made more difficult by the discovery that even after the imple mentation of the award the Company has made large profits during the years 1959 60, 1960 61 and 1961 62.
It appears that when the Company was given special leave to appeal to this Court the operation of the Tribunal 's award was stayed only in so far as it directed the management to pay arrears of the wages determined thereby but the operation of the award in so far as it related to the payment of wages from the date of the award was not stayed; and the management was directed to pay to the workmen from that date wages in accordance with the wage scale fixed by the Tribunal by its award under appeal.
The result of this has been that the Tribunal 's award as regards the wage scales has been implemented with effect from the date of the award and it is possible for this Court to know how such additional payment has affected the financial position of the Company.
It appears that after meeting the additional charges and also after payment of bonus and appropriation to reserves the net profits for the year 1959 60 rose to Rs. 8,04,508/ .
For the year 1960 61 these profits were Rs. 8,44,627/ .
For the year 1961 62 the profits are shown in the balance sheet as Rs. 59,955/ .
That the Company has been prospering is clear.
It has its own aeroplanes and possesses immovable properties of considerable value.
It has built up good reserves and inspite of that it has been making good profits.
It is reasonable to think that with the progress of education in the country and the increasing news mindedness of the people the future prospects of the Company are no less bright.
On a consideration 244 of all this,, we are clearly of opinion that Mr. Pathak 's contention that the wage scale fixed by the Tribunal is too heavy for the Company to bear, must be rejected.
Equally unacceptable is Mr. Pathak 's next contention that the wage scale fixed by the Tribunal operates unfavourably on this Company vis a vis two other concerns in Delhi region, viz., the Times of India, Delhi and the Statesman, Delhi.
We have compared the wage scales in these two concerns viz., the Times of India, Delhi and the Statesman, Delhi, with the wage scale under the award and have for the purpose of comparison taken into consideration the dearness allowance as fixed by the Tribunal.
The comparison shows that while in some cases the Company (the Hindustan Times) will have to pay more to its workmen than what is being paid to workmen of the same category by the Times of India, Delhi and the Statesman, Delhi, in several cases it will be less.
It has also to be borne in mind that the Times of India, Delhi and the Statesman, Delhi, are much smaller units of the newspaper industry than the Hindustan Times.
These Companies are mere adjuncts to the Times of India, Bombay and the Statesman, Calcutta, respectively.
Therefore, even if for some categories the wage scale under the award is higher than that in the Times of India, Delhi and the Statesman, Delhi, that would be no ground for modifying the award in favour of the Company.
We have therefore come to the conclusion that there is no ground whatsoever for modifying the wage scale fixed by the award in favour of the Company.
On behalf of the workmen it was strenuously contended that the increase given by the award over the previous wage scale falls far short of justice.
It is pointed out that even the Times of India, Delhi and the Statesman, Delhi, which are much smaller 245 concerns and of lesser financial stability and strength, pay to some categories of its workmen higher wages than what has been fixed by the award.
Thus our attention has been drawn to the fact that for Assistants, the Times of India, Delhi, rate is Rs. 241 402, and in the Statesman, Delhi, it is Rs. 190 297 for some and Rs. 264 463 for others while under the award the scale is Rs. 125 375.
There are several other cases also where the wage scale under the award appears to be lower than what is being paid by the Times of India, Delhi and the Statesman, Delhi.
It has been urged by the learned Attorney General that in view of the fact that the wage scale of the Company has remained practically stationary for the last 12 years and that it is indisputably well below the fair wage and the further fact that even smaller concerns in this region, like the Times of India, Delhi and the Statesman, Delhi, have been paying more to some categories of its workmen, the wage scale as fixed by the Tribunal should be raised at least for some of the categories.
There is undoubtedly some force in the contention and it maybe said that the Tribunal has been rather cautious in the matter of revision of wage scales.
Even so, it has to be remembered that where, as in the present case, the proper principles have been applied by the Tribunal, it is not the practice of this Court to interfere, ordinarily, with details of this nature when exercising its special jurisdiction under article 136 of the Constitution.
It also appears to us that the very fact that the Tribunal has been cautious in the matter of raising the wage scales has influenced it in the directions it has given on the question of adjustment of the present employees into the wage scale.
In this way some relief has been given to the present employees which might otherwise have been given by raising the wage scale.
On a consideration of all these facts we have reached the conclusion that it will not be 246 proper for us to modify the wage scales fixed by the Tribunal in favour of the workmen also.
On the question of dearness allowance it is not disputed before us that in the circumstances of the resent case the Tribunal acted rightly in awarding dearness allowance at a flat rate for all categories of workmen.
On behalf of the Company it was however urged that the Tribunal has made an obvious mistake in fixing the amount of dearness allowance at Rs. 25/ .
For fixing the rate at Rs. 25/ the Tribunal has said : "In view of the revised scales as now laid down, I think the same should further be supplemented in the circumstances stated above by a flat rate of dearness allowance in all cases, viz., Rs. 25/ with retrospective effect from the date of reference so that the lowest paid worker will start not less than Rs. 75/ .
1 direct accordingly.
" Mr. Pathak points out that the lowest paid worker for whom wage scales have been fixed will be getting under the award a minimum of Rs. 6l0/ so that with the dearness allowance of Rs. 25/ "the lowest paid worker" will start at Rs. 85/ and not Rs. 75/ .
Mr. Pathak suggests that the Tribunal has made a mistake in its calculations and that having decided that the lowest paid worker will start at not less than Rs. 75/ , it should have fixed Rs. 15/ and not Rs. 25/as the dearness allowance.
This argument however overlooks the fact that the reference as regards the dearness allowance was in respect of all categories of workmen, though the reference as regards scales of pay did not cover some categories, viz., mazdoors and canteen boys.
They therefore continue to remain on their old scale of Rs. 50 3 85.
When the Tribunal in considering the question of dearness allowance was thinking of the starting pay of the lowest paid worker 247 it had obviously these categories in mind.
Having concluded that the lowest paid worker should start at Rs. 75/ as the total amount of basic pay and dearness allowance the necessary conclusion reached by the Tribunal was that Rs. 25/ should be fixed as the dearness allowance.
It is, in our opinion, proper and desirable that the dearness allowance should not remain fixed at this figure but should be on a sliding scale.
As was pointed out in Workmen of Hindusthan Motors vs Hindusthan Motors (1), the whole purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living.
On a consideration of all the circumstances of this case, we direct that a sliding scale be attached to the dearness allowance of Rs. 25/ per month as awarded by the Tribunal on the lines that it will be liable to be increased or decreased on the basis of Re. 1/ for every ten points in case of rise and fall in the cost of living from the base of 400, the 1939 index being taken to be 100 the sliding scale to take effect from April 1, 1959.
This brings us to the question of adjustment of the existing employees into the new scale.
The Tribunal has dealt with this matter thus : " '. the adjustment in the new scales shall be made with retrospective effect from the date of the reference, viz., 23rd January, 1958.
In making adjustment in the new scales no one shall be adversely affected and it shall be on the line laid down by the Industrial Tribunal in the case of Caltex India Ltd., at p. 659 read with para.
23 of the decision of the Labour Appellate Tribunal, reported in at page 188.
" It appears that in the case of Caltex India Ltd.
,(Supra) the Industrial Tribunal, West Bengal, gave (1) 248 the following directions for adjustment of employees into the wage scale fixed by it.
All employees for whom the scale has been stated above should be stepped up in the stage next above which the present pay is drawn.
A special increment at the rate of one increment in the new scale for every three completed years of service should be given.
The employees whose salaries are less than the minimum prescribed will be pulled up to the minimum of the prescribed scale.
If the existing salary of an employee is higher than the salary he will be entitled to under the prescribed scale, there will be no cut and he will be stepped up to the nearest increase with the increments given above.
After the salaries are adjusted, no employee should be staggered and he will continue to get future increments.
If an employee be already drawing a salary which is higher than the maximum prescribed by the award, he will be subjected to no cut in his salary.
" This was followed by a direction as regards the date by which the adjustment was to be made.
The Labour Appellate Tribunal modified these directions by introducing two provisions : (1) that the maximum of the grade should not be exceeded and (2) that the basic wage that was being paid to an employee at the date of the award of the Tribunal is not to be affected to the employees 'prejudice.
The employer 's objection is to the provision that a special increment at the rate of one increment in the new scale for every 249 three completed years of service should be given.
It is argued that such a provision may well be appropriate in a case where wage scale is being fixed for the first time or where even if there was already a wage scale in force the rate of increment in the new scale is much higher than that in the old wage scale, but not where, as in the present case, the increments under the new scale and the old scale are practically the same.
We are not impressed by this argument.
As was pointed out by this Court in a recent judgment in French Motor Car Co., Ltd. vs Its Workmen (1), what adjustment should be given is to be decided when fixing wage scales whether for the first time or in place of an old existing scale has to be decided by industrial adjudication after consideration of all the circumstances of the case.
It may well be true that in the absence of any special circumstances and adjustment of the nature as allowed in this case by allowing special increment in the new scale on the basis of service already rendered may not be appropriate.
Clearly, however, in the present case the Tribunal took into consideration in deciding this question of adjustment the fact that it had been extremely cautious as regards increasing the old wage scales.
Apparently, it thought that it would be fair to give some relief to the existing employees by means of such increase by way of adjustment while at the same time not burdening the employer with higher rates of wages for new incumbents.
In these circumstances, we do not see ally Justification for interfering with the directions given by the Tribunal in the matter of adjustment.
It will be convenient to consider at this stage the objection raised in the Company 's appeal to the Tribunal 's direction in connection with the interim agreement.
As has been stated earlier, this agreement was arrived at between the parties when the dispute was before the Conciliation Officer.
The (1)(1962) 250 relevant portion of the agreement is in these words : "It is hereby agreed between the parties that: 1.
The Management agrees to make interim relief on the following terms to every employee, excluding working journalists, drawing salary up to Rs. 400 p.m. (i)Advance payment ranging between Rs. 6/ to Rs. 10/ per month beginning from the month of November, 1957 in the following manner : (a) Those with annual increment of Rs. 3/ , Rs. 4/ , and Rs. 5/ Rs. 6/ (b) Those with annual increment of Rs. 6/ Rs.
7/ (c) Thosewith annual increment of Rs. 7/ Rs.
8/ (d) Thosewith annual increment of Rs. 10/ Rs. 10/ Note.
(i) In case any employee has already reached the ceiling of his grade, even then he would he entitled for the above benefit.
(ii) This payment will be adjusted against the final out come of the present demands by constitutional means." "The final out come of the present demands by constitutional means 's is the Tribunal 's award.
Under the agreement therefore what has been received by 251 the workmen as advance payment at Rs. 6/ or Rs. 71or Rs. 8/ or Rs. 10/ per month as interim relief has to be adjusted against what is due to be paid to them under the award.
In other words, the Company is entitled under the agreement to deduct the payments made as interim relief from what is payable to these very employees under the award.
The Tribunal 's direction that the interim relief shall remain unaffected is in effect an order that term (ii) of the agreement need not be complied with.
We can find no justification for such an order.
While it is true that industrial adjudication can and often has to modifiy existing contracts between an employer and its workmen, there can be no justification for modification of an agreement of this nature pending final settlement of a dispute.
Such a direction that the solemn words of the workmen 's representatives that interim relief which may be given will be adjusted against the relief finally given need not be complied with, is not only unfair to the employer but is also not calculated to serve the best interests of the workmen themselves.
For one thing, an order of this nature in one case by a Tribunal that such an undertaking need not be carried out is likely to hamper interim settlements generally; it is also not desirable that workmen should be encouraged to treat their undertakings as of no value.
Industrial adjudication must be careful not to encourage bad faith on the part of the workmen or the employer.
A direction as given by the Tribunal in this case that the term in the agreement that payments made will be adjusted against the final outcome need not be complied with, is unfortunately to have such effect on workmen.
We therefore set aside the Tribunal 's direction that interim relief will remain unaffected and direct that adjustments should be made in terms of the said interim arrangement.
This brings us to the question of Leave Rules.
The Company objects to the award as regards this matter in so far as it directs the Company to allow 15 252 day 's sick leave with full pay and allowances with accumulation up to six months on production of medical certificate given by a registered medical practitioner.
It also objects to the direction that the present practice as to insistence on previous application for the purpose of casual leave should not be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and the direction that up to 3 days no medical certificate should be asked for.
It appears that at present the Management grants 10 days ' casual leave to the business staff and 7 days ' casual leave to all the other categories and there is no sick leave facility available.
Mr. Pathak has tried to convince us that in view of the provisions of the , no provision need be made about sickness leave at all.
, That this Act has been applied to the Company and that the workmen of the Company get the benefit of this Act is not disputed.
It is difficult to see however how the benefit that the workmen will get under this Act can affect the question of sickness leave being provided for the workmen.
This Act it has to be noticed does not provide for any leave to the workmen on the ground of sickness.
It provides in section 46 (1) (a) for periodical treatment of any insured person in case of his sickness if certified by a duly appointed medical practitioner.
It is unnecessary to mention here the several provisions in the Act; viz., Sections, 47, 48 and 49 which deal with the eligibility of workmen for sickness benefit and the extent of the benefit that may be granted.
Section 56 of the Act provides for medical benefits to the insured workman or in certain cases to the members of his family.
It appears to us clear however that in providing for periodical payments to an insured worker in case of sickness (sickness benefit) or for medical treatment or, attendance to him or the members of his family, the legislature did not intend 253 to substitute any of these benefits for the workmen 's right to get leave on full pay on the ground of sickness.
It is next contended that the Tribunal 's direction as regards sickness leave offend the provisions of Delhi Shops and Establishments Act, 1954.
Admittedly, a large number of workmen covered by the reference are governed by the provisions as regards leave under the Delhi Shops and Establishments Act, 1954.
Section 22 of that Act fixes the maximum for sickness or casual leave with wages to a period of 12 days and further provides that such leave shall riot be accumulated.
It is thus clear that as regards those workmen to whom the Delhi Shops and Establishments Act, 1954 applies the Tribunal has acted illegally in fixing the period of sick leave at 15 days and permitting accumulation.
We therefore set aside this direction in the award and direct instead that the Company shall allow to the workmen to whom the Delhi Shops and Establishments Act, 1954 applies, sickness or casual leave of a total of 12 days with full pay and allowances and that such leave shall not be accumulated.
We are also of opinion that it will not be right to have two separate leave rules for the two classes of workmen, one to whom the Delhi Shops and Establishments Act, 1954 applies and the other two whom it does not apply.
For that is likely to be a source of much discord and heartburning.
Therefore, in respect also of those workmen to whom the Delhi Shops and Establishments Act, 1954 does not apply, we think that the same period of 12 days in a year with full pay and allowances should be fixed for sickness or causal leave, and there should be no accumultation of such leave; and we direct accordingly.
We cannot find any justification for the direction of the Tribunal that the practice of insistence on 254 previous application for the purpose of casual leave should be relaxed in cases where it cannot possibly be so done in emergent and unforeseen circumstances and that upto 3 days no medical certificate should be asked for.
The leave rules of the Company as they now stand provide that ordinarily previous permission of the head of the department and the Establishment Manager shall be obtained before casual leave is taken but that when this is not possible due to sudden illness, the head of the Department or the Manager as soon as may be practicable should be informed in writing of the absence from work and of the probable duration of such absence.
In our opinion, this provision is reasonable and is calculated to meet the needs of workmen for taking leave without previous permission, in case of emergency.
In these circumstances, the further directions as regards this that have been given by the Tribunal appear to us to be unnecessary and are hereby set aside.
On the question of gratuity, the only argument seriously pressed by Mr. Pathak was that the scheme as framed by the Tribunal would put undue strain on the Company 's sources.
We have already expressed our agreement with the Tribunal 's conclusion that the Company 's financial resources are strong and stable and that not only has the Company been prospering in recent years but that its future prospects are also bright.
Therefore, we do not think that the scheme of gratuity as framed by the Tribunal is unduly favourable to the workmen or that it places any undue strain on the Company 's financial resources.
One provision in the gratuity scheme which ought to be mentioned is that under it an employee who is dismissed for misconduct shall not be entitled to any gratuity.
It has been pointed out by this Court in more than one case that having regard to the nature of gratuity it will not be proper to deprive 255 an employee of the gratuity earned by him because of his dismissal for misconduct and the proper provision to make in this connection is that where an employee is dismissed for misconduct which has resulted in financial loss to the employer the amount lost should be deducted from the amount of gratuity due.
As however in the present case, the workmen have not appealed against the award as regards the gratuity scheme framed by the Tribunal, it will not be proper for us to make the modification as indicated above.
Coming now to the question of retirement age on which the workmen have appealed, we find there is some controversy as regards the existing position.
The workmen stated in their written statement before the Tribunal that " 'at present there are no set rules in the Company in this matter.
" Their claim was that the retirement age should be fixed at 60 for all the employees of the Company.
According to the Management 's written statement "the existing superannuation system is that the age of retirement is fixed at 55." The Magagement further stated that the age of retirement " 'as fixed, that is, 55 years" is appropriate and should not be raised.
In respect of this controversy as regards the existing position there appears to be little material on the record.
From the appointment letters of some of the employees that we find on the record it appears that for some appointments made in 1955 the age of retirement was mentioned as 55.
In the several letters of appointments made prior to that year no age of retirement has been mentioned.
It is not clear, therefore, how on the question of retirement age the Tribunal proceeded on the basis that the "existing retirement" age is 55.
Proceeding on this basis the Tribunal directed "that the existing retirement age at 55 years should continue but the workers may be allowed to remain in employment and work up to 60 years if found fit.
The question of the further extension 256 should rest with the discretion of the Management.
" On behalf of the workmen the learned Attorney General has contended that the assumption that the existing retirement age is 55 is wrong in respect of most of the workmen and that except for a few persons appointed after 1955 no retirement age is fixed either in the letters of appointment or in the standing orders of the Company.
For all these employees for whom no retirement age has been fixed already, the learned Attorney General argued on the basis of the decision of this Court in Guest Keen, Williams Private Ltd., vs P. J. Sterling., (1) that it would not be fair to fix any age of superannuation.
It was held in that case that it was unfair to fix the age of superannuation of previous employees by a subsequent standing order.
The Labour Appellate Tribunal had held that it would be unreasonable and unfair to introduce a condition of retirement at the age of 55 in regard to the prior employees having regard to the fact that when they entered service there was no such limitation.
This Court felt that it would not be justified in reversing this decision of the Labour Appellate Tribunal.
Dealing next with the question whether it followed that there should be no rule of superannuation in regard to these previous employees the Court said : "In our opinion it is necessary to fix the age of superannuation even with regard to the prior employees, and we feel no difficulty in holding that it would not be unfair or unreasonable to direct that these employees should retire on attaining the age of 60.
An option to continue in service even thereafter which the respondent claimed is wholly unreasonable and is entirely inconsistent with the notion of fixing the age of superannuation itself.
Once the age of superannuation is fixed it may be open to the employer for special reasons to continue in its employment a workman who has passed that (1) ; 257 age : but it is inconceivable that when the age of superannuation is fixed it should be in the option of the employee to continue in service thereafter.
We would accordingly hold that in the circumstances of this case the rule of retirement for the previous employees in the concern should be 60 instead of 55 and that the rule of 55 should apply to all employees who enter the service of the appellant after the relevant standing orders came into force." Assuming therefore that for the majority of the employees there is no existing retirement age it would on the authority of the above case, be open to the Tribunal to fix the age of superannuation even with respect to them.
As however the Tribunal 's decision that this age should be 55 is vitiated by the incorrect assumption that there is an existing retirement age of 55 it has been necessary for us to consider the question for ourselves.
It appears that before the Tribunal the Union 's representative himself desired that the retirement age should be fixed at 58 years which may be extended up to 60 years in fit cases.
Before us the Counsel for the Company did not seriously contest that in consideration of the present day circumstances in the country it would be fair to fix the retirement age at 58.
Accordingly, we set aside the Tribunals award on this question of retirement age and fix the age at 58 years, subject to the proviso that it will be open to the Company to continue in its employment a workman who has passed that age.
This rule should apply to all the employees of the Company.
There remains for consideration the question of retrospective operation of the award.
Under section 17A of the , an award shall come into operation with effect from such date as may be specified therein but where no date is so specified it shall come into 258 operation on the date when the award becomes enforceable.
Even without a specific reference being made on this question it is open to an industrial tribunal to fix in its discretion a date from which it shall come into operation.
The reference, in the present case, included as a matter in dispute the question of retrospective effect in these words : "Whether all the above demands should be made applicable retrospectively with effect from April 1, 1956 and what directions are necessary in this respect ?" The Tribunal rejected the workmen 's claim for giving effect to its award from April 1956.
Wherever however the Tribunal has given relief the Tribunal has directed that the award should come into effect from the date of reference, i. e., January 23, 1958.
On behalf of the Company Mr. Pathak contends that there is no reason why the award should be given effect to from any date prior to the date of its pronouncement.
We are not impressed by this argument .
No general formula can be laid down as to the date from which a Tribunal should make its award effective.
That question has to be decided by the Tribunal on a consideration of circumstances of each case.
There have been cases where this Court has made an award effective from the date when the demand was first made.
There are other cases where the orders of the Tribunal directing the award to be made effective from the date of the award has not been interfered with.
It is true that in some cases this Court has modified the Tribunal 's award in such a case.
But it does not appear however that any general principles have been laid down.
Indeed, it is difficult and not even desirable that this Court should try to lay down general principles on such matters that require careful consideration of the 259 peculiar circumstances of each case for the exercise of discretion.
It is sufficient to say that we find no reason to interfere with the Tribunal 's direction in this case that the reliefs given by it would become effective from the date of the reference.
We therefore allow both the appeals in part by modifying the Tribunal 's award as regards dearness allowance, leave rules and retirement age and also as regards the adjustment of the interim relief as mentioned above.
In all other matters in appeal before us the award is confirmed.
The modifications made as regards dearness allowance will, as already stated, take effect from April 1, 1959.
The modifications as regards leave rules and as regards retirement age will take effect from this date.
In both the appeals the parties will bear their own costs.
Appeals allowed in part.
| The Chief Commissioner, Delhi, referred an industrial dispute for adjudication to the Industrial Tribunal, Delhi, which gave its award on March 16, 1959.
Both the appellant and the respondents were dissatisfied with the award and they came to this Court by special leave.
The award was challenged by the appellant with regard to scales of pay, dearness allowance, adjustments, leave rules, gratuity and retrospective effect of the award.
The respondents attacked the award as regards the working hours, leave rules and retirement age.
Held, that while social justice demands that workmen should get a fair share of the national income which they help to produce, it has also to be seen that that does not result in the drying up of the source of national income itself.
Inroads 235 on the profits of the capitalists should not be such as have a tendency to drive capital away from fruitful employment and thereby affect prejudicially capital formation itself The Tribunal had applied the correct principles and the award should not be disturbed, Held, also, that the Tribunal had erred in awarding a fixed dearness allowance of Rs. 25 / .
The object of dearness allowance being to neutralise part of the rise or fall in the cost of living, it should ordinarily be on a sliding scale.
Held, that the contention of the appellant that in view of the provisions of the , no provision need be made about sickness leave at all, was rejected.
It was pointed out that in providing for periodical payments to an insured worker in case of sickness or for medical treatment or attendance to him or the members of his family under the Act of 1948, the Legislature did not intend to substitute any of these benefits for the workmen 's right to get leave on full 'Pay on the ground of sickness.
Held, that as regards those workmen to whom the Delhi Shops and Establishments Act, 1954, applied,.
the Tribunal had acted illegally in fixing the period of sick leave at 15 days and permitting accumulation.
The appellant shall allow to the workmen to whom the Delhi Shops and Establishments Act applied, sickness or casual leave for a total period of 12 days with full pay and allowances, and such leave shall not accumulate.
As it was not desirable to have two separate leave rules for two classes of workmen, one to whom the Act of 1954 applied and tile other to whom the Act did not apply, it was held that the same rule should apply to other workers also.
Held, also, that tile scheme of gratuity as framed by the tribunal was not unduly favourable to workmen and it also did not place any undue strain on the financial resources of tile Company.
As regards the provision in the gratuity scheme that an employee who is dismissed for misconduct shall not be entitled to any gratuity; it was held that the proper provision should be that where an employee is dismissed for misconduct which has resulted in financial loss to the employer, the amount of loss should be deducted from the amount of gratuity due.
The award of the Tribunal on tile question of retirement age was set aside and the retirement age was fixed at 58, subject to the proviso that it would be open to the company to continue in its employment a workmen who had passed that age, The rule was to apply to all tile employees of the Company.
236 No general formula could be laid down as to the date from which a Tribunal should make its award effective.
That question has to be decided by the Tribunal on consideration of the circumstances of each case.
There was no justification for interfering with the direction of the Tribunal that in this case the reliefs given by it should become effective from the date of the reference.
Standard Vacuum Refining Co., of India vs Its workmen, , M/s. Crown Aluminium Works vs Its workmen; , , Express Newspapers Ltd. vs Union of India, , M/S. Lipton Ltd. vs Their Workmen [1959] Supp. 2 section C. R. 150, Workmen Hindustan Motors vs Hidustan Motors, 52, French Motor Car Co. vs Their Workmen, and Guest Keen, Williams (P) Ltd. vs P. J. Sterling [1961] 1 section C. R. 348, referred to.
|
Civil Appeal No. 1998 of 1969.
Appeal by Special Leave from the Judgment and Decree dated 3 10 1968 of the Punjab and Haryana High Court in L.P.A. No. 348/64.
V. C. Mahajan, Mrs. Urmila Kapoor and Mrs. Shobha Dikshit for the Appellants.
Hardev Singh for the Respondent.
465 The Judgment of the Court was delivered by SARKARIA, J.
This appeal by special leave is directed against a judgment, dated October 3, 1968, of the High Court of Punjab and Haryana.
The facts leading to this appeal are that the appellants are partners of a firm, Bharat Industries, Chheharta.
By a Notification, dated May 15, 1946, the Chheharta Municipal Committee levied a profession tax under Section 61(1)(b) of the Punjab Municipal Act, 1911.
Initially, the tax was Rs. 15/ per annum and was levied on all the partners of the said firm.
By a Notification, dated July 4, 1958, the annual tax for trade, profession or calling for the owner of a factory registered under the Indian Factories Act, was raised to Rs. 200/ per annum and each of the six partners of the said firm were assessed to annual tax of Rs. 200/ by the Municipal Committee.
On October 30, 1960, the appellants filed a suit for permanent injunction restraining the defendant Committee from realising the profession tax demanded by it per letters Nos.
15 to 20, dated May 31, 1960, amounting to Rs. 1,200/ .
The appellants challenged the validity of the assessment contending that construed in the light of the definition given in section 2(40) of the Punjab General Clauses Act, the term "person" occurring in section 6(1)(b) of the Punjab Municipal Act, 1911, includes a 'firm ' and since the trade carried on by the 'firm ' is one, the tax could be levied only on the firm, and not on the partners individually.
On these premises, it was pleaded that the Municipal Committee in levying the tax on the individual partners had exceeded its statutory powers under Section 61(1)(b) of the Municipal Act.
The trial court dismissed the suit.
On appeal by the plaintiffs, the Additional District Judge, Amritsar, reversed the judgment of the trial court and decreed the suit.
The Municipal Committee carried a further appeal to the High Court.
The learned Single Judge, who heard the appeal, affirmed the judgment and decree of the first appellate court, on the reasoning which may be summed up as under: The term "person" in Section 61(1)(b) of the Municipal Act, interpreted in the light of the definition given in Section 2(40) of the Punjab General Clauses Act, includes a 'partnership '.
Under clause (b) of Section 61(1) of the Municipal Act, the basis on which the liability to pay tax arises, is the trade, profession or business; and if the 466 trade and business is one carried on by several persons collectively in partnership, then the partnership alone, and not the individual partners, are liable to pay the tax; that the liability on the partners will fall twice which is not contemplated by the scheme and language of the Municipal Act, even though all the partners are jointly and severally liable to any tax for the partnership business.
In support of his conclusion that the tax was on trade and not on persons, the learned Judge by way of analogy, referred to clauses (a), (c), (d), (e) and (f) of sub Section (1).
He also referred to two Madras decisions in The Municipal Commissioners of Nagapatam vs Sadaya Pillay(1) and Davies vs President of the Madras Municipal Commission(2): and found himself in entire agreement with the reasoning of the learned Judges in those cases.
Aggrieved, the Municipal Committee preferred a Letters Patent Appeal.
The Appellate Bench of the High Court held that to import the definition of the term "person" occuring in Section 2(40) of the Punjab General Clauses Act into Section 61(1) (b) of the Municipal Act, will be repugnant to the subject.
In the opinion of the Bench, under the scheme of the statute in question, the tax cannot be levied on a firm or factory as such, but only on the individual owners of the factory or of the firm.
On this reasoning, the Bench reached the conclusion "that under Section 61(1) (b) of the Act, it is the individual who is to be assessed and is liable to pay the tax mentioned therein and so the assessment as well as the demand of the tax from each of the plaintiffs does not suffer from any legal infirmity.
" The Bench further held that since the Committee in imposing the tax on the appellants herein, has not acted outside the provisions of the statute, "it would, on the basis of the judgment of the Supreme Court in Firm Seth Radha Kishan (Deceased) represented by Hari Kishan & Ors.
vs Administrator Municipal Committee, Ludhiana,(3) which also dealt with the provisions of the Municipal Act, follow that the impugned assessment could only be questioned under the provisions of Sections 84 and 86 of the Act, and the jurisdiction of the Civil Court in respect of tax levied or the assessment made is excluded".
In the result, the appeal was allowed and the trial court 's decision dismissing the suit was restored.
Before us, Mr. V. K. Mahajan, learned counsel for the plaintiffs appellants, has adopted the reasons given by the learned Single Judge of the High Court.
In support of his contentions, he has relied upon the 467 aforesaid Madras decisions.
His argument is that if the interpretation placed by the Appellate Bench of the High Court is allowed to stand, it will lead to anamolous and unconstitutional results.
Mr. Mahajan concedes that the individual partners are also 'persons ' within the meaning of clause (b) of Section 61(1).
He, however, maintains that the firm, also, is a 'person ' within the contemplation of this provision and as such, liable to be taxed; that if in respect of the one trade, which is being carried on by the firm, apart from each of the individual partners, the firm, also is separately assessed to Rs. 200/ per annum, not only the incidence of the tax will fall twice, the total liability therefor will far exceed the ceiling of Rs. 250/ per annum fixed by Article 276(2) of the Constitution.
In these premises, it is contended that an interpretation of Section 61(1) (b), which may lead to unconstitutional on irrational results should be eschewed.
With regard to the question of jurisdiction it is contended that since the Municipal Committee had in the exercise of its powers clearly acted beyond its jurisdiction, the suit was maintainable in the Civil Court.
Section 61(1)(b) of the Municipal Act, so far as material for this case, reads as under: "Subject to any general or special orders which the State Government may make in this behalf, and the rules, any committee may, from time to time for the purposes of this Act, and in the manner directed by this Act, impose in the whole or any part of the municipality any of the following taxes, namely: (1) (a). . . . (i) to (iii) . . . . (b) a tax on persons practising any profession or art or carrying on any trade or calling in the municipality.
Explanation.
A person in the service or person holding an office under the State Government or the Central Government or a local or other public authority shall be deemed to be practising a profession within the meaning of this sub section.
" From a plain reading of the extracted provision, it is clear that a tax leviable under clause (b) is, in terms, a tax on "persons".
The expression "persons" undoubtedly includes natural persons.
The class of such taxable persons has been indicated by the Legislature with reference to their occupational activity.
Thus, in order to be authorised, a tax under clause (b) of Section 61(1) must satisfy two conditions: 468 First, it must be a tax on "persons".
Second such persons must be practising any profession or art or carrying on any trade or calling in the municipality.
There can be no dispute that the appellants are "persons" and, as such, satisfy the first condition.
Even the learned counsel for the appellants has candidly conceded that the individual partners are also "persons" within the meaning of the said clause (b).
Controversy thus becomes narrowed down into the issue; Whether persons collectively doing business in partnership, in the municipality, fulfil the second condition ? That is to say, do such persons "carry of any trade or calling in the municipality" within the contemplation of clause (b) ? In our opinion, for reasons that follow, the answer to this question must be in the affimative. 'Partnership ' as defined in Section 4 of the , is the relation between persons who have agreed to share the profits of a business carried on by all or any of them for the benefit of all.
The Section further makes it clear that a firm or partnership is not a legal entity separate and distinct from the partners.
Firm is only a compendious description of the individuals who compose the firm.
The crucial words in the definition of 'partnership ' are those that have been underlined.
They hold the key to the question posed above.
They show that the business is carried on by all or any of the partners.
In the instant case, admittedly, all the plaintiff appellants are carrying on the business in partnership.
All the six partners are sharing the profits and losses.
All the partners are jointly and severally responsible for the liabilities incurred or obligations incurred in the course of the business.
Each partner is considered an agent of the other.
This being the position, it is not possible to hold that each of the six partners is not carrying on a trade or calling within the purview of clause (b) of Section 61(1) of the Municipal Act.
At the most, it can be said that each of these six persons is severally as well as collectively carrying on a trade in the Municipality.
There is nothing in the language of Section 61 or the scheme of the Municipal Act which warrants the construction that persons who are carrying on a trade in association or partnership with each other cannot be individually taxed under clause (b) of Section 61(1).
On the contrary, definite indication is available in the language and the scheme of this statute that such partners can be taxed as persons in their individual capacity.
As noticed already, clause (b) makes it clear in no uncertain terms that this is a tax on 'persons. ' Its incidence falls on individuals, who belong to a class practising any profession or art; or carrying on a trade or calling in the municipality.
469 To hold that persons who are collectively carrying on a trade in the municipality cannot be taxed individually, would be to read into the statute words which are not there.
There are no words in clause (b) or elsewhere in the statute which, expressly or by necessary implication, exclude or exempt persons carrying on a trade collectively in the municipality from being taxed as individuals.
To attract liability to a tax under this clause, it is sufficient that the person concerned is carrying on a trade in the municipality, irrespective of whether such trade is being carried on by him individually or in partnership with others.
Thus, both the conditions necessary for levying a tax under clause (b) of subsection (1) of Section 61 of the Municipal Act existed in this case.
The appellants are "persons" and they are carrying on a trade in Chheharata Municipality.
In the view we take, we do not think it necessary to go further into the question, whether the definition of 'person ' given in Section 2(40) of the Punjab General Clauses Act, can be imported into the statute under consideration, so as to include a contractual firm, also, within the purview of the expression 'persons ' used in clause (b) of Section 61(1).
Indeed, the entire effort to import the definition of 'person ' given in the General Clauses Act, into Section 61(1)(b) of the Municipal Act, is directed to find a foundation for the argument, that the construction adopted by the High Court could lead to double taxation and even unconstitutional results.
But in the instant case, nothing of this kind has happened.
The firm has not been assessed.
No question of double taxation or exceeding the Constitutional ceiling of Rs. 250/ fixed by Article 276(2) of the Constitution, arises on the facts of the present case.
The arguments advanced on behalf of the appellants on this aspect of the matter are merely hypothetical, and speculative.
This takes us to the second question, whether the Civil Court had jurisdiction to hear and determine the suit.
Section 84(1) of the Punjab Municipal Act provides that "an appeal against the assessment or levy of any. tax under this Act, shall lie to the Deputy Commissioner or to such other officer as may be empowered by the State Government in this behalf".
Then, there is a proviso to this sub section which says that when the Deputy Commissioner or such other officer, as aforesaid, is or was, when the tax was imposed, a member of the Committee, the appeal shall lie to the Commissioner of the Division.
Sub section (2) is important.
It provides: "84(2).
If, on the hearing of an appeal under the section, any question as to the liability to, or the principle of assessment of, a tax arises, on which the officer hearing the appeal entertains reasonable dobut, he may, either of his own 470 motion or on the application of any person interested, draw up a statement of the facts of the case and the point on which doubt is entertained, and refer the statement with his own opinion on the point for the decision of the High Court.
" Section 86 mandates that "no objection shall be taken to any valuation or assessment, nor shall the liability of any person to be assessed or taxed be questioned, in any other manner or by any other authority than is provided in this Act.
" From a conjoint reading of sections 84 and 86, it is plain that the Municipal Act, gives a special and particular remedy for the person aggrieved by an assessment of tax under this Act, irrespective of whether the grievance relates to the rate or quantum of tax or the principle of assessment.
The Act further provides a particular forum and a specific mode of having this remedy which analogous to that provided in Section 66 (2) of the Indian Income tax Act, 1922.
Section 86 forbids in clear terms the person aggrieved by an assessment from seeking his remedy in any other forum or in any other manner than that provided in the Municipal Act.
It is well recognised that where a Revenue Statute provides for a person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking it are excluded.
Construed in the light of this principle, it is clear that sections 84 and 86 of the Municipal Act bar, by inevitable implication" the jurisdiction of the Civil Court where the grievance of the party relates to an assessment or the principle of assessment under this Act.
In the view we take, we are fortified by the decision of this Court in Firm Seth Radha Kishan vs Administrator, Municipal Committee, Ludhiana, (supra) wherein sections 84 and 86 of this very Punjab Municipal Act, 1911 came up for consideration.
Therein, the Municipal Committee, Ludhiana, imposed a terminal tax on Sambhar salt and assessed the appellant, therein, to a sum of Rs. 5,893/ towards that tax at the rate of Rs. 10/ per maund under item 69 of the Government Notification by which the terminal tax was imposed.
The assessee filed a suit against the Municipal Committee in the Civil Court, contending that Sambhar salt ought to have been assessed at the rate of 3 pies per maund under item 68, that he had been illegally assessed under item 69 at the higher rate, and claimed refund of the amount paid by him, with interest.
The Committee, inter alia, contended that Sambhar salt was not common salt, and the Civil Court had no jurisdiction to entertain the suit.
The trial court held that Sambhar salt was common salt within the meaning of item 68 of the Schedule, that 471 the imposition of tax on it under item 69 of the Schedule was illegal, and, therefore, the Civil Court had jurisdiction to hear and determine the suit by virtue of section 9 of the Code of Civil Procedure.
On appeal, the High Court held that the Civil Court had no jurisdiction, and dismissed the suit.
The assessee came in appeal to this Court by certificate granted by the High Court, and contended that since the impugned levy was not made under the Municipal Act but in derogation thereof, the Civil Court had jurisdiction to entertain and determine the suit.
Delivering the judgment of the Court, Subba Rao, J. (as he then was) repelled this contention, observing that the rate of the tax to be levied depended upon the character of the salt, and it was not possible to say that in ascertaining this fact the authorities concerned travelled outside the provisions of the Municipal Act, even if they wrongly applied item 69 of the schedule; that the mistake in applying the wrong item of the Schedule to the tax could be corrected only in the manner prescribed by the Act, and the aggrieved person cannot file a suit in the Civil Court in that regard, the Civil Court 's jurisdiction having been excluded by the provisions of Sections 84 and 86 of the Act.
The Court distinguished that class of cases where the Municipal Committee in levying a tax or committing an Act, clearly acts outside or in abuse of its powers under the Municipal Act, and explained that it is only in such cases, the bar to the jurisdiction of the Civil Court would not apply.
Can the case before us be said to belong to that class of cases where the Municipal Committee in levying a Tax acts beyond or in abuse of its powers under the Act ? The answer to this question must be in the negative.
By no stretch of imagination, can it be said in the facts and circumstances of the case, that in assessing the appellants, individually, and not collectively, to the tax in question, the Municipal Committee abused its powers under the Act.
We have already discussed and held that in levying this tax, the Municipal Committee did not travel beyond or act contrary to the provisions of Section 61(1)(b) of the Act.
In short, the present case is one where the Municipal Committee acted "under the Act".
It follows, therefore, that the Civil Court 's jurisdiction to entertain and decide the suit was barred, even if the dispute raised therein related to the principle of assessment to be followed.
For the foregoing reasons, the appeal fails and is dismissed with costs.
V.D.K. Appeal dismissed.
| The appellant was a manufacturer of a preparation called Para Excellent and Para Asli The outer label of the package describe the contents as "as sweet as saccharin".
Under the directions for use it was mentioned on the label that the preparation was para saccharin.
The appellant was prosecuted under s.2(ix)(a) and (g) of the for misbranding the goods and for selling it as saccharin.
While the trial court convicted and sentenced the appellant to imprisonment and a fine on the ground that though a case of misbranding under section 2(ix) (a) and (g) had not been made out, it was a case of misbranding contemplated by section 2(ix) (k), the High Court, in revision, enhanced the sentence and fine under sections 7 and 16 read with section 2(ix)(a) and (g) of the Act.
On behalf of the prosecution it was contended in the appellant 's appeal to this Court that the use of the word saccharin gave the impression that the preparation was saccharin or something akin to it and it was, therefore, a case of misbranding punishable under the Act.
Allowing the appeal.
^ HELD :1.
There is nothing on the facts of the case to show that the appellant in any way tried to give an impression to the purchasers that either saccharin or some preparation of the type of saccharin was being sold so as to amount to misbranding as contemplated by section 2(iv)(a) and (g) of the Act.
Nor was there an attempt to sell the preparation as saccharin or some kind of saccharin.
When the label described that the preparation was as sweet as saccharin it merely laid emphasis on the sweetness of the preparation when compared to the sweetness of the saccharin.
Similarly when the label described the preparation was not as bitter as saccharin it was intended to convey that it was neither something like saccharin nor saccharin itself in any form or of any type.
[553 C D] 2.
Nor again was there any evidence of intention on the part of the appellant to sell a preparation which resembles saccharin in any respect.
The words "as sweet as saccarin" were merely meant to convey one of the qualities of the preparation itself and not the quality of saccharin.
That by itself would not attract the provisions of section 2(ix)(a) of the Act.
[554 B] 3.
The use of the word para saccharin appears to be a mistake.
In the Hindi portion of the directions contained in the label the words "para Saccharin" were not used.
Secondly the word "para saccharin" would not indicate that 552 the preparation sold was saccharin in any form or of any kind.
It was just a way of describing the contents because the preparation was "as sweet as saccharin. ' The manufacturer wanted to convey that the preparation wasa also much sweeter than sugar and could be used for preparing soda water.
[554 C D]
|
vil Appeal Nos. 801 and 802 of 1962.
Appeals from the judgment and d. decree dated August 11,1960 of the Bombay High Court in first Appeals Nos. 819, 820 of 1955.
Purshottam Trikamdas, V.J. Jhaveri and S.N. Andley for the appellants (in both the appeals).
K.H. Bhabha, lqbal Chagla and J.B. Dadachanji, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Bachawat, J.
The Bank of Poona Ltd., (hereinafter referred to as the Company) now amalgamated with the SangIi Bank, Ltd. was incorporated in 1945.
The Company was promoted by N.G. Parulekar and Murlidhar Chaturbhuj Loya.
The authorised capital of the Company was Rupees fifty lakhs divided into 50,000 ordinary shares of Rs. 100/ each.
By the end of April, 1946, the Company was able to find subscribers for 4,860 shares only.
In view of section 277(1) of the Indian Companies Act, 1913, the Company was unable to carry on business unless the subscribed capital was not less than half the authorised capital.
In order to comply with the requirements of section 277(1), the directors of the Company decided that they or their nominees would subscribe for a large number of shares.
Narayandas Shriram Somani was one of the directors of the Company.
Ramnath Shriram Somani is his brother.
They carried on business in the name of Ramkisan Ramratan Somani.
Jivanbai is the mother of Narayandas and Ramnath Goverjabai is the wife of Narayandas, and Kamalabai is the wife of Ramnath.
Narayandas decided to subscribe for 2000 shares in the names of the three ladies.
At a meeting held on May 25, 1946, the board of directors of the Company allotted 500 shares to Goverjabai, 500 shares to Kamalabai and 1000 shares to Jivanbai against three separate applications for shares signed by them.
The applications were accompanied by three separate hundis dated May 25, 1946 for Rs. 25,000, Rs. 12,500 and Rs. 12,500 drawn by Narayandas in favour of the Company.
The meeting of May 25, 1946 was attended by three directors, Murlidhar Loya, D. R,, Nayak and Narayandas.
At that meeting, the directors also sanctioned a 779 loan of Rs. 60,000 to Ramnath.
On May 28, 1946, Ramnath obtained from the Company the loan of Rs. 60,000 against his promissory note, and a separate loan account No. 1/18 was opened in his name in the books of the Company.
The three hundis were honoured on May 29, 1946.
The directors of the Company at a meeting held on June 8, 1946 resolved to give an overdraft of Rs. 40,000 to Ramnath.
A separate overdraft account L.A./C No. 71 in the name of Ramnath was opened in the books of the Company, and Ramnath obtained the sanctioned overdraft by a cheque dated June 27, 1946 for Rs. 15,000/ and another cheque dated June 29, 1946 for Rs. 25,000.
The balance of the application and allotment moneys amounting to Rs. 12,500, Rs. 12,500 and Rs. 25,000 in respect of the shares of Goverjabai, Kamalabai and Jivanbai were paid to the Company on June 22, June 28 and June 29 respectively.
There is reason to believe that the subscription of the 2000 shares was financed.
, by the advances to Ramnath.
On December 28, 1948, Ramnath was indebted to the Company in his loan account for Rs. 65,743 6 6 and in his overdraft account for Rs. 41,909 10 0.
On that date, both accounts were closed, and a new loan account No. 9 with a debit of Rs. 1,09,500/was opened in the name of Ramnath, who executed a promissory note.
The Reserve Bank of India was pressing the Company to take steps in respect of the advances to Ramnath.
In these circumstances, Ramnath repaid to the Company Rs. 18,500/ on December 29, 1950 and Rs. 1,500/ on January 2, 1951.
At the same time, on January 6, 1951, the Company gave a new loan of Rs. 20,000/ to Ramkisan Ramratan Somani and Ramnath, and the borrowers executed a joint and several promissory note in favour of the Company for the sum of Rs. 20,000/ .
In respect of this loan, a separate loan account was opened in the books of the Company.
In his loan 'account No. 9, Ramnath repaid Rs. 1,00,000/ on December 27, 1951 and Rs. 4,198 8 0 on December 29, 195.1, and as a result of the last payment, the account was closed.
The above sum of.
1,00,000/ was paid on behalf of Ramnath by Narayandas, who on the same date obtained a loan of Rs. 1,00,000/ from the Company.
On the same date, Narayandas executed a promissory note for the sum of Rs. 1,00,000/ , a letter of pledge and trust receipt in respect of cloth, saris etc., valued at Rs. 1,50,000/ , and a separate loan account No. 6/184 in his name was opened, in the books Of the Company.
In spite of demands, the Company was unable to realise its dues in respect of the outstanding loans.
On March 18, 1954, the Company instituted Special Suit No. 39 of 1954 in the Court of the Civil Judge, Senior Division of Poona, against Ramkisan Ramratan Somani and Ramnath for the recovery of Rs. 22,964 13 0 due from them in respect of their loan account and the promissory note dated January 6, 1051.
The suit was dismissed by the trial (N) 5SCI 11 780 Court on April 23, 1955, but in First Appeal No. 819 of 1955 preferred.
by the Company, the High Court decreed the suit.
Civil Appeal No. 801 of 1962 arises out of this claim.
On April 24, 1954, the Company instituted Special Suit No. 78 of 1954 in the Court of the Civil Judge, Senior Division, Poona against Narayandas for the recovery of, Rs. 1;09,099 14 4 due from him in respect of the loan account No. 6/184 and the promissory note dated December 27, 1951.
On April 23, 1955, the trial Court dismissed the suit, 'but in First Appeal No. 820 of 1955 preferred by the Company, the High Court decreed the suit.
Civil Appeal No. 802 of 1962 arises out of this claim.
On behalf of the appellants, Mr. Purushottam Tricamdas contended ' that the allotment of the 2000 shares and the several loans in the names of Ramnath and Narayandas were not genuine transactions, and that the parties did not intend that the allottees would be the holders 'of the shares or that Narayandas and Ramnath would be liable to repay the loans.
It is to be noticed that the plea that the allotment of the 2000 shares was not intended to be operative, was not sufficiently raised in the pleadings.
Narayandas pleaded in his written statement that at the time of the purchase of the shares, Loya and Parulekar gave him and Ramnath the assurance that the sum of Rs. 1,00,000/ required for the purchase of the shares would be paid by the Company on interest at 41/2 per cent per annum and Loya and Parulekar would not demand and recover the amount but they would sell the shares and credit the amount of the sale proceeds towards the principal and interest in the loan account and would not allow Narayandas and Ramnath to suffer loss with regard thereto.
Narayandas swore that it was agreed between him, Parulekar and Loya that he would nominally take the 2000 shares which would be finally sold to others and he would be out of liability and he and Ramnath would not repay the loans nor take any benefit thereunder.
He also suggested that he or Ramnath did not repay any moneys out of their own pocket, and all repayments in the accounts were made out of the moneys received by him from the Company.
At the trial, the Company did not examine either Loya or Parulekar.
It may be that Loya and Parulekar gave some understanding to Narayandas with regard to the disposal of.
the shares, and in view of this understanding, they subsequently.
executed in favour of Narayandas two letters dated December 27, 1951, whereby Parulekar agreed to buy from him 500 shares and Loya agreed to buy from him 800 shares.
But these assurances, if any, were given to Narayandas by Parulekar and Loya in their individual capacity and not as directorS, of the Company.
There is no record of any assurance given on behalf of the Company to; Narayandas in the minutes of the board meetings.
Narayandas and ' his nominees, Goverjabai, Kamalabai and,.
Jivanbai dealt with the shares on the footing that they.
were the owners of.
the shares some of the shares.were transferred to third parties under transfer 781 deeds executed by Jivanbai, and the sale proceeds were credited to the loan account of Narayandas Jivanbai received from the Company all the 1000 shares allotted to her and executed a receipt dated February 25, 1953.
Narayandas obtained from Loya and Parulekar written undertakings dated December 27, 1951 for the purchase of 800 and 500 shares respectively.
By letter dated June 28, 1954, Narayandas called upon Parulekar to fulfil his undertaking for the purchase of 500 shares.
All these circumstances prove that the allotment of the 2000 shares was intended to be operative and the allottees were intended to be the holders of the shares.
Ramnath out of his own funds paid several sums of money towards discharge of his indebtedness in the loan accounts.
He paid Rs. 750 4 0 in the overdraft account towards interest on December 12, 1946 and Rs. 1,484 7 0 in the loan account No. 1/18 on April 21, 1947, and we are not satisfied that these sums were paid out of commission earned by Narayandas from the Company.
Similarly, on December 29, 1951, he paid Rs. 4,198 8 0 in the loan account No. 9 and on January 4, 1954, Rs. 100/ was paid by Ramkisan Ramratan and Ramnath in their loan account.
The loan accounts were secured by promissory notes.
Moreover, the loan account of Narayandas was secured by a trust receipt and a letter of pledge.
Even on March 3, 1953, Narayandas executed a letter in favour of the Company declaring that he held as security a stock of sarees valued at Rs. 1,50,000/ .
In respect of other loan transactions, the Company charged the appellants interest at the rate of 6 per cent and those loans were repaid quickly.
But the loan transactions in suit were intended to be of a more permanent nature, and in order to accommodate Narayandas and Ramnath, the Company agreed to charge interest at 41/2 per cent.
We are satisfied that the allotment of the 2000 shares was intended to be operative and the allottees became the owners of the shares.
We are also satisfied that the loans to Ramnath and Narayandas were intended to be operative, and the Company did not give any assurance to them that.
they would not be called upon to repay the loans.
The next contention of Mr. Purushottam Tricamdas arises in this way.
Article 126 of the articles of association of the Company provides that the directors may determine the quorum necessary for the transaction of business, and unless and until otherwise determined, three directors shall be the quorum.
The directors did not make any other determination with regard to quorum, and at all material times, a quorum of three was required for a directors ' meeting.
The board meeting of May 25, 1946 was attended by three directors only, namely, M. C. Loya, D. R. Nayak and Narayandas.
At this meeting, the directors resolved to allot 2000 shares to the nominees of Narayandas.
Narayandas was dearly interested in the allotment of the shares.
Section 91B(1) of the Indian Companies Act, 1913 provided that "No director shall, as a director, 782 vote on any contract or arrangement in which he is either directly or indirectly concerned or interested nor shall his presence count for the purpose of forming a quorum at the time of any such vote; and if he does so vote, the vote shall not be counted".
The Poona Bank, Ltd. was a public company, and section 91B(1) applied to its directors.
Narayandas, therefore, ought not to have.
voted at the meeting of May 25, 1946.
If his vote is excluded, there was no quorum for the meeting.
Mr. Purushottam Tricamdas, therefore, contended that the allotment of 2000 shares to the nominees of Narayandas at this meeting was invalid and no title passed to the allottees in respect of the shares, and in the circumstances, there was a total failure of the consideration paid for the shares, and as the consideration was paid out of the loans, the appellants are not liable to repay the same.
Now, a director of a company stands in a fiduciary position towards the company and is bound to protect its interests.
For long, it has been an established rule of equity that he must not place himself in a position in which his personal interest conflicts with his duty, and unless authorised by the company 's articles, he must not vote as a director on any contract or arrangement in which he is directly or indirectly interested.
Standard articles give effect to this rule of equity.
See Palmer 's Company Precedents, 17th Edn, Part I, p. 553.
If he votes in such a case, his vote would not be counted, and his presence would not count towards the quorum, that is to say, the minimum number fixed for the transaction of business by a board meeting, for a quorum must be a disinterested quorum, and must be comprised of directors who are entitled to vote on the particular matter before the meeting.
See In re.
Yuill vs Greymouth Point Elizabeth Railway and Coal Company, LimitedC).
If an interested director votes and without his vote being counted there is no quorum, the meeting is irregular, and the contract sanctioned at the meeting is voidable by the company against the director and any other contracting party who has notice of the irregularity, see Transvaal Lands Company vs New Belgium (Transvaal) Land and Development CompanyC); but the company may waive the irregularity and affirm the transaction.
The matter is put succinctly by Gore Browne in Handbook on Joint Stock Companies, 41st Edn., p. 363 thus: "According to the well established rule that an agent can not act on behalf of his principal in a matter in which the agent has a conflicting interest or duty, directors are precluded from taking part in any resolution under which they take a benefit or which adopts a contract that concerns them unless the Articles authorises their doing so.
It must be here noted that if interested directors take part in any transaction there is an irregularity (1) [1904] 1 ch.
(2) [1914] 2 Ch.
488. 783 which renders the transaction voidable by the company as against the directors and any persons who have knowledge of the facts".
Section 91 B embodied the existing rule of equity in the form of a statutory provision.
In Pratt (Bombay) Ltd. vs
M.T. Ltd. and Sassoon & Co. Ltd. vs Pratt (Bombay) Ltd.(1), Sir George Rankin observed that the section is a concise statement of the general rule of equity explained in the Transvaal Lands Company 's caseC), and he pointed out that the impugned transactions on which the interested directors had voted, were voidable by the official liquidator of the company.
The voting by the interested director, of itself, does not invalidate the contract.
The effect of section 9lB is that the vote of the interested director must be excluded, and if as a result of such exclusion there is no quorum, the resolution sanctioning the contract is irregular and the contract is liable to be avoided by the company against the directors and any other contracting party having notice of the irregularity.
Section 9lB is meant for the protection of the company, and the company may, if it chooses, waive the irregularity and affirm the contract.
We think that the allotment of the 2000 shares to the nominees of Narayandas in the meeting of the directors of the company held on May 25, 1946 was not void.
In view of the fact that Narayandas was not entitled to vote on the allotment and after exclusion of his vote there was no quorum, the allotment was irregular, and the Company was entitled to avoid the. allotment.
Instead of avoiding the allotment, the Company has chosen to affirm it.
The allotment is, therefore, valid and binding on the allottees.
Moreover, Narayandas cannot be heard to say that there was no valid allotment of the shares.
For the purpose of satisfying the requirement of section 277(I) it was necessary to allot the shares, and he allowed the Company to commence business on the footing that the shares had been subscribed.
He was a director of the Company and a party to the resolution allotting the shares.
He dealt with the shares on the footing that the allottees were the holders of the shares with a clear knowledge of the circumstances on which he might have rounded his present objection.
He cannot now be heard to say that he was interested in the allotment and could not vote.
Like the director in York Tramways Company vs Willows(3), he is now estopped from contending that the allotment is invalid.
For all these reasons, we hold that the allotment is valid, and there is no failure of consideration.
In the plaint in Suit No. 78 of 1954, the Company pleaded that ,on December 27, 1951 Narayandas took from it on loan a sum of (1) I.L.R. (2) [1914]2 Ch.
(3) [1882] 8 QB.V. 685, 784 Rs. 1,00,000/ and executed an on demand promissory note for the amount.
Mr. Purushottam Tricamdas contended that, as a matter of fact, no cash amount was paid and no loan was advanced by the Company to Narayandas on December 27, 1951, and consequently, the suit as framed is not maintainable.
Now, at the relevant time, Ramnath was indebted to the Company for Rs. 1,04,198/ in respect of loan account No. 9.
On December 27, 1951, at the request of Narayandas, the Company credited Ramnath with Rs. 1,00,000/ in his loan account and debited Narayandas with Rs. 1,00,000/ in a new loan account opened in his name.
On the same date, Narayandas acknowledged in writing the receipt of Rs. 1,00,000/ and executed a promissory note for the amount in favour of the Company.
Ramnath took full advantage of the credit of Rs. 1,00,000/ and on payment of the balance of Rs. 4,198 8 0 closed his loan account No. 9.
Though no actual money passed, the two entries in the books of account amounted to payment of Rs. 1,00,000/ by the Company to Narayandas by way of a loan and repayment of the same amount by Narayandas to the Company towards discharge of the indebtedness of Ramnath in the latter 's loan account with the Company.
The result was as if the Company had paid a sum of Rs. 1,00,000/ in cash to Narayandas and then Narayandas had returned the amount to the Company with instructions to credit it to Ramnath.
To support a plea of payment, it is not necessary to show that cash passed.
Illustration (a) to section 50 of the shows that payment may be made by means of transfer entries in books of account.
The Company has sufficiently established a payment of Rs. 1,00,000/ by it to Narayandas by way of loan on December 27, 1951.
Mr. Purushottam Tricamdas contended that the loans to Narayandas and Ramnath were financial assistance by the Company for the purpose of or in connection with the purchase of its shares by Narayandas or his nominees, and the loans being in contravention of section 54A(2) of the Indian Companies Act, 1913 were illegal and could not be recovered.
Mr. K.N. Bhabha contended (1) that the appellants ought not to be allowed to take this new point in this appeal; (2) the lending of the money was a part of the ordinary business of a banking company and the loans to Ramnath and Narayandas were made by the Company in the course of its business; and (3) having regard to the decision in Re V.G.M. Holdings, Ltd(1), the word "purchase" in section 54A(2) did not include the acquisition of shares by subscription or allotment, and in this case, the loans were given in connection with the acquisition by Narayandas or his nominees of shares by subscription or allotment.
and not in connection with acquisition of shares by :purchase, and consequently, section 54A(2) had no application.
Now, it appears that in paragraph 15 of his written statement Narayandas pleaded that (1) 785 the advance of loans to him in connection with the purchase of shares was illegal, but no issue was raised on the question whether the loans were financial assistance in connection with the purchase of the shares and were in contravention of section 54A(2).
There is a passing reference to this contention in paragraph 15 of the judgment of the trial Court, but there is no reference to it in the judgment of the High Court.
We find also that this contention finds no place in the statement of the case filed on behalf of the appellants.
Mr. Purushottam Tricamdas relied on ground No. 12 of the appellants statement of case, but, we think that this ground is wholly insufficient to raise this contention.
In these circumstances, we think that it is not open to the appellants to urge this contention, and we indicated this to Mr. Purushottam Tricamdas in the course of the argument.
In the Courts below, the appellants contended that Kamalabai was a minor, and, therefore, the allotment of 1000 shares to her was.
invalid '.
This contention is no longer pressed, and does not survive.
No other contentions were advanced before us.
In the result, the appeals are dismissed with costs, one hearing fee.
Appeals dismissed.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
|
il Appeal No. 1520 (NT) of 1986.
From the Judgment and Order dated 10.8.1977 of the Bombay High Court in I.T.R. No. 34 of 1968.
V.S. Desai and Ms. A. Subhashini for the Appellant.
Harish Salve, Mrs. A.K. Verma and Joel Peres for the Respondents.
Three private limited companies, the Italindia Cotton Co. (P) Ltd., who is the assessee before us, the India Corporation (P) Ltd and the International Cotton (P) Ltd. were controlled by three groups of share holders, who may be described as the Chunilal Group, the Babubhai Group and the Purushottam Group.
There was a change in the share holding of the three companies during the accounting year ending 3 1 March, 1963.
The Chunilal Group acquired controlling interest in India Corporation (P) Ltd., the Babubhai group acquired controlling interest in the assessee company and the Purushottam Group acquired controlling interest in International Cotton (P) Ltd. The assessee suffered a loss in the accounting year ending 31 March 1960, relevant to the assessment year 1960 61, in the amount of Rs.12,172.
This was available for a set off in a subsequent year.
But having regard to the change in the share holding of the assessee during the accounting year ending 31 March, 1963 relevant to the assessment year 1964 64,the question arose whether the assessee was entitled to of carrying forward that loss for the purpose of computing PG NO 817 its assessable profits for that assessment year.
The Income tax Officer held that section 79 of the Income tax Act, 1961 disentitled the assessee from claiming such a set off.
He said that 51% of the voting power held by persons on the last day of the year in which the loss was suffered was no longer held by them on 31 March, 1963.
On appeal by the assessee, the Appellate Assistant Commissioner of Income tax took a different view.
He held that before the right to set off a loss could be denied to an assessee, not only should there be a change in the persons holding a voting power of not less than 51% but further the change should have been effected with a view to avoiding or reducing the liability to tax.
The Revenue appealed to the Income Tax Appellate Tribunal.
Upon an analysis of section 79 the Tribunal observed that the denial of the set off of a loss incurred in an earlier year was subject to two exceptions, the first being that the beneficial holding representing not less than 51% of the voting power should not change hands between the last day of the year in which the loss was incurred and the last day of the relevant previous year, and the second exception was that any change in the share holding contemplated by the parent provision should not have been effected with a view to avoiding or reducing any liability to tax.
According to the Tribunal the two exceptions applied independently, and if either came into play the prohibition contained in section 79 against the setting off of a loss could not be invoked by the Revenue.
It appears to have been admitted before the Tribunal that the assessee was not entitled to the benefit of the first exception, and in the view which it took it rendered no definite finding on whether the assessee fell within the terms of the second exception .
At the instance of the assessee the Tribunal referred the following question to the Bombay High Court for its opinion: "Whether both the conditions mentioned in clause (a) and clause (b) of section 79 must apply for disentitling the loss of a prior year being allowed as set off in accordance with the substantive provisions of section 79 of the Income tax Act, 1961?" The High Court answered the question in favour of the assessee.
holding that even if a change in the voting power of not less than 51% between the two relevant dates has taken place, for the Revenue to succeed such change should be effected with a view to avoiding or reducing any liability to tax.
It observed that as the Tribunal had not considered the question whether the change in the voting power had taken place with a view to avoiding or reducing any liability to tax that question should now be decided by PG NO 818 the Tribunal before the claim for a set off could be finally disposed of.
And now this appeal.
Chapter VI of the Income tax Act, 1961 contains a number of provisions entitling the assessee to the carry forward and set off of a loss suffered by him.
Section 70 provides for the set off of a loss from one source against income from another source under the same head of income.
Section 71 provides for the set off of a loss from one head against income from another head.
Section 72 entitles an assessee to carry forward and set off a business loss which could not be set off wholly during the year in which it arose.
Then follow provisions relating to the setting off of losses in certain particular cases.
Section 79, with which we are concerned, provides: "Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless (a) on the last day of the previous year the shares of the company carrying not less than fifty one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty one per cent of the voting power on the last day of the year or years in which the loss was incurred; or (b) the Income tax Officer is satisfied that the change in the share holding was not effected with a view to avoiding or reducing any liability to tax." Section 79 is an exception to the scheme enacted in Chapter VI for the carry forward and setting off of a loss incurred in any earlier year against the income of the relevant previous year.
The provision was enacted in the Income tax Act 1961 for the first time in order to deny that benefit to companies not being companies in which the public are substantially interested.
On its plain terms section 79 provides that in the case of such companies, if a change in shareholding has taken place in a previous year, no loss incurred in any year prior to the previous year shall be carried forward or set off against the income of the previous year unless (a) both on the last day of the previous year and on the last day of the year or years in PG NO 819 which the loss was incurred the shares of the company carrying not loss than 51 per cent of the voting power were beneficially held by the same persons (b) the Income tax Officer is satisfied that the change in the share in holding was not affected with a view to avoiding or reducing any liability to tax.
The question before us is whether the two conditions operate cumulatively or in the alternative.
In other words, should both conditions exist together to nullify the prohibition against carry forward and set off of the loss? Upon careful consideration we are of opinion that the conditions are intended to operate as alternative to one another.
If the terms of either cl.(a) or cl.(b) are satisfied, the disqualification suffered by a company, by reason of a change in share holding in the previous year, is removed, and the company is entitled to the benefit of the provisions in Chapter VI relating to the carry forward and set off of losses.
The benefit is available notwithstanding the change in share holding in the previous year, if shares representing not less than 51% of the voting power remain beneficially held by the same persons on the relevant dates.
Similarly, the benefit is available notwithstanding the change in shareholding in the previous year if the change was not effected with a view to avoiding or reducing any liability to tax.
The object sought to be served by enacting section 79 appears to be to discourage persons claiming a reduction of their tax liability on the profits earned in companies which had sustained losses in earlier years.
It was not unusual for a group of persons to acquire a company, which had suffered losses in earlier years, in the expectation that the company would earn substantial profits after such acquisition, and they would benefit by a reduction of the tax liability on those profits on a set off of losses carried forward from earlier years before the acquisition.
The acquisition of a company in such a case would be effected by a change in its share holding and the control over the company could be ensured by securing the beneficial ownership of shares carrying 51 per cent or more of the voting power.
If the change in share holding did not result in holding voting power of 51 per cent or it was established that the shares of the company carrying not less than 51 percent of the voting power were beneficially held by the same persons, both on the last day of the previous year as well as the last day of the year or years in which the loss was incurred, it could be presumed that there was no change in the control over the company, and the disqualification imposed on the company because of the change in its share holding would stand removed.
But there may be a change in the share holding, and it may result in a change of control of the company.
Yet every PG NO 820 such change of shareholding need not fall within the prohibition.
There can be a case where persons already owing a shareholding carrying less than 51 percent of the voting power in the company may enlarge their share holding during the previous year in order that control over the company may pass to them.
Attempts to acquire control over a company by controlling a majority of the share holding are not unknown.
The acquisition of control over a company provides a source of both direct and indirect financial benefit as well as power over its policies and activities.
On the other side, there can be a case where the change is affected with a view to avoiding or reducing some liability to tax.
The change is effected not for business or commercial reasons but in order that tax liability may be avoided or reduced.
In that event, the change in the share holding will tend to bring about the result which section 79 was designed to prevent.
In our opinion, to avoid falling within the scope of section 79 it is sufficient for the assessee to show that the case attracts either cl.
(a) of cl.
If the assessee succeeds in doing so, he will be entitled to the benefit of the provisions of the Income Tax Act entitling him to claim a carry forward and set off losses suffered by the company in an earlier year or years against the income of the previous year.
We are fortified in our conclusion by the view expressed by the Gujarat High Court in Commissioner of Income tax, Gujarat III vs Shri Subhalaxmi Mills Ltd., and by the Madras High Court in Commissioner of Income tax vs Saravanabhava Mills Pvt Ltd.,[1983] I.T.R.856.
In our judgment, the High Court is right in the view taken by it and the appeal must be dismissed.
The appeal is dismissed with costs.
| The respondent assessee which had suffered a loss during the assessment year 1960 61, and whose share holding had undergone a change subsequently, claimed a set off against the same in its assessment for the year 1963 64, but the Income tax Officer turned it down on the ground that section 79 of the Income tax Act, 1961 dis entitled the assessee from claiming such a set off since 51% of the voting power held by persons on the last day of the year in which the loss was suffered was no longer held by them on March 31, 1963.
On appeal, the Appellate Assistant Commissioner held that before the right to set off a loss could be denied to an assessee, not only should there be a change in the persons holding a voting power of not less than 51% but further the change should have been effected with a view to avoiding or reducing the liability to tax.
On appeal by the Revenue, the Appellate Tribunal observed that the denial of the set off of a loss incurred in an earlier year was subject to two exceptions: (i) that the beneficial holding representing not less than 51% of the voting power should not change hands between the last day of the year in which the loss was incurred and the last day of the relevant previous year, and (ii) that any change in the share holding should not have been effected with a view to avoiding or reducing any liability to tax; that these two exceptions applied independently, and if either came into play, the prohibition contained in section 79 against the setting off of a loss could not be invoked by the Revenue.
However, at the instance of the assessee, the Tribunal referred the following question to the High Court for its opinion: "Whether both the conditions mentioned in clause (a) and clause (b) of section 79 must apply for disentitling the loss of a prior year being allowed as set off in accordance with the substantive provisions of section 79 of the Income tax Act, 1961?" PG NO 814 PG NO 815 The If High Court answered the question in favour of the assessee, holding that even if a change in the voting power of not less than 51% between the two relevant dates has taken place, for the Revenue to succeed, such change should be effected with a view to avoiding or reducing any liability to tax.
Dismissing the appeal, HELD: In our opinion, to avoid falling within the scope of section 79 it is sufficient for the assessee to show that the case attracts either cl.(a) or cl.(b).
If the assessee succeeds in doing so, he will be entitled to the benefit of the provisions of the Income Tax Act entitling him to claim a carry forward and set off losses suffered by the company in an earlier year or years against the income of the previous year.
[820C D] Section 79 is an exception to the scheme enacted in Chapter VI for the carry forward and setting off of a loss incurred in any earlier year against the income of the relevant previous year.
The provision was enacted in the Income tax Act, 1961 for the first time in order to deny that benefit to companies not being companies in which the public are substantially interested.
On its plain terms section 79 provides that in the case of such companies, if a change in share holding has taken place in a previous year, no loss incurred in any year prior to the previous year.
shall be carried forward or set off against the income of the previous year unless (a) both on the last day of the previous year and on the last day of the year or years in which the loss was incurred the shares of the company carrying not less than 5l per cent of the voting power were beneficially held by the same persons (b) the Income tax Officer is satisfied that the change in the share holding was not effected with a view to avoiding or reducing any liability to tax.
The question before us is whether the two conditions operate cumulatively or in the alternative.
In other words, should both conditions exist together to nullify the prohibition against carry forward and set off of the loss? Upon careful consideration we are of opinion that the conditions are intended to operate as alternative to one another.
If the terms of either cl.
(a) or cl.
(b) are satisfied, the disqualification suffered by a company.
by reason of a change in share holding in the previous year, is removed, and the company is entitled to the benefit of the provisions in Chapter VI relating to the carry forward and set off of losses.
The benefit is available notwithstanding the change in share holding in the previous year, if shares representing not less than 51% of the voting power remain beneficially held by the same persons on the relevant dates.
Similarly, the benefit is available notwithstanding the PG NO 816 change in shareholding in the previous year if the change was not effected with a view to avoiding or reducing any liability to tax.
[818F H, 819A D] Commissoner of Income tax, Gujarat III vs Shri Subhalaxmi Mills Ltd., and Commissioner of Income tax vs Saravanabhava Mills Pvt. Ltd., [1983]143I.T.R.856, approved.
|
Civil Appeals Nos. 356 and 357 of 1961.
Appeals by special leave and certificate from the judgment and orders dated October 16, 1959, and February 16,1960, of the Madhya Pradesh High Court in L. P. A. No. 93 of 1957 and Misc.
Petition No. 254 of 1959 respectively.
152 section T. Desai and N. H. Hingorani, for the appellant.
M. R. Nambiar, section N. Andley, Rameshwar Nath and P. L. Vohra, for respondent No. 1. 1960.
October 20.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These two appeals by special leave have been filed by the Municipal Committee, Raipur, against two different respondents who carry on business of extraction of oil from oil seeds.
The case involves an interpretation of the Byelaws of the Municipal Committee and the determination of octroi duty which was payable by the respondents in the relevant years of assessment on sarso oil seeds brought by them within the area of the appellant Committee for purposes of their business.
The Municipal Committee demanded an ad valorem octroi duty Rs. 4 11 0 per cent from the respondents, claiming to levy it under item 44 of the Schedule of goods liable to octroi duty in the Raipur Municipality, appended to the Rules framed on June 4, 1951.
The respondents, on the other hand contended that a duty of 2 annas per maund was leviable under item 4 of the same Schedule, which covered the case of oil seeds.
The respondents made representations described as appeals, but were unsuccessful.
Their demand for refund of octroi duty paid by them was refused and they, therefore, filed petitions under article 226 of the Constitution in the High Court of Nagpur (later, of Madhya Pradesh) against the appellants alleging inter alia that this imposition of octroi duty ad valorem at Rs. 4 11 0 percent on sarso oil seeds as against other oil seeds was ultra vires the Municipal Committee under article 14 of the Constitution.
They also averred that octroi duty was properly leviable under item 4 and not under item 44.
In the High Court, the petition out of which Civil Appeal No. 356 of 1961 arises, was heard by a learned single Judge, who held that 153 sarso oil seeds were chargeable to duty under item 44 and not under item 4.
From the order of the learned single Judge, it does appear that the constitutional question was urged before him.
Against this order, a Letters Patent Appeal was filed, and the Divisional Bench, which heard the appeal, held, disagreeing with the learned single Judge, that duty was properly leviable only under item 4.
Before the Divisional Bench also, it does not appear that the constitutional question was argued.
The petition, out of which Civil Appeal No. 357 of 1961 arises was heard by a Divisional Bench, which, following the earlier decision, decided against the appellant Committee.
The entries in the Schedule of goods liable to octroi duty in the Raipur Municipality contain eight classes of goods.
Under them are grouped 67 items, the serial numbers running consecutively through all the classes.
Class I is headed "Articles of food or drink or use for men or animals".
Item 4, which is in that Class reads "Oil seeds of every description not specifically mentioned elsewhere".
Class V is headed "Drugs, spices and gums, toilet requisites and perfumes", and item 44 reads "Betel nuts, gums, spices, Indian herbs and Indian raw medicines and drugs, such as nuts, ilaichi, laung, jaiphal, jaipatri, dalchini., sont, katha, zeera, Dhania garlic, dry chillies, pepper, shahzeera, maithi, sarso, etc.
and known as kirana" (groceries).
Item 4 is chargeable to a duty of 2 annas per maund, and item 44 is chargeable ad valorem at Rs. 4 11 0 per cent.
In addition to these entries, there is item 17, which reads "Vegetable oils (not hydrogenated) not provided elsewhere such as Tilli Tel, Sarso Tel, Alsi Tel, Falli Tel, Narial Tel, Andi Tel ', which are chargeable to a duty of 4 annas per maund.
It is conceded on all hands that sarso is an oil seed, and if there was nothing more in the Schedule a duty of 2 annas per maund would be leviable on sarso as an oil seed.
The dispute arises, because 154 sarso is mentioned again in Item 44 with a very much higher duty, and it is contended by the appellant Committee that the words "not specifically mentioned elsewhere" in item 4 exclude sarso from that item, and that its specific mention in item 44 makes it liable to the higher duty indicated there.
The learned single Judge of the High Court held in favour of the Municipality.
According to him, this reason was sound and the higher duty demanded was the proper duty payable.
The Divisional Bench on the other hand, points out that the two classes (I and V) are entirely different.
Class 1 deals with articles of food or drink for use for men and animals while Class V deals with drugs, spices and gums, toilet requisites and perfumes.
The division indicates clearly that goods belonging to one category are not included in the goods belonging to the other.
The Divisional Bench also points out that item 4 must be read as it stood and the specific mention must be in the same manner in which that entry was framed.
Item 4 deals with "oil seeds", and the specific mention must be as "oil seeds" elsewhere in the Schedule.
It was also argued for the respondents that "elsewhere" meant elsewhere in the same Class.
But the appellant Committee pointed out that the serial numbers were all consecutive, and that the specific mention could be anywhere in the Schedule.
The two arguments are equally plausible, and nothing much, therefore turns upon them.
In our opinion, the Divisional Bench of the High Court was right when it said that the specific mention elsewhere must be as oil seeds and not as something else.
Class V deals with spices and groceries and the concluding words of item 44 known as "kirana" determine the ambit of that item.
Though sarso might be mentioned there, it must be taken to have been mentioned as a spice or as kirana and not as oil seed.
The extent of item 4, which deals with oil seeds of every descrip 155 tion, could only be cut down by a specific mention elsewhere of an item as an oil seed.
Item 44 contains fairly long list, out of which we have quoted a few illustrative items.
Each of these items is referable to the general heading either as a drug or a spice or gum, etc.
Sarso, it is admitted, is sold as kirana and as a spice.
The mention of sarso there is limited by the general heading to which it belongs, namely, a spice, drug or herb sold as kirana.
No doubt, sarso as an oil seed is the same article as sarso sold as kirana but we must take into account the intention behind the bye law and give effect to it.
If it was intended that sarso as an oil seed was to be taxed in a special way, it would be reasonable to expect that it would have be found a specific in mention as an oil seed with a different duty.
One would not expect that it would be included in a long list of articles of kirana and in this indirect way be taken out from a very comprehensive entry like item 4, where oil seeds of every description are mentioned.
Though the next argument is not conclusive because there is no logic behind a tax, still it is to be noticed that sarso oil (a maund of which, as the affidavit of the respondents shows, is expressed from three maunds of oil seed) bears only an octroi duty of 4 annas per maund, while three maunds of sarso oil seed under item 44, if it were applicable, bear a duty of Rs. 4 3 6 per maund, if the price of sarso is taken as Rs. 30 per maund as stated in the affidavit.
This leads to an anomaly, which, in our opinion, could hot have been intended.
Finally, it may be said that if there be any doubt, the Divisional Bench of the High Court very properly resolved it in favour of the taxpayer.
We, therefore, hold that the judgment of the High Court is correct, and dismiss these appeals with costs.
Appeals dismissed,.
| The appellant companies which were carrying on business in Calcutta in petroleum and petroleum products maintained supply depots at Dum Dum Airport from which motor spirit for B the purposes of aviation was sold and delivered to aircraft which either proceeded to foreign countries directly from that Airport or did so ultimately, though landing en route at some place or places in the Indian territory.
Dum Dum Airport was a customs aerodrome and all aircraft coming into it or leaving it had to comply with ordinary customs formalities.
The sales tax authorities of West Bengal sought to levy tax on the sales of motor spirit as aforesaid under the provisions of the Bengal Motor Spirit Sales Taxation Act, 1941, as amended.
The appellant companies claimed that the sales were exempted from taxation under both the clauses (a) and (b) of article 286(i) of the Constitution of India on the grounds (i) that the sales in question had taken place outside the State of West Bengal, as they did not .come within the Explanation to article 286(1)(a), (2) that aviation spirit was delivered outside the customs barrier and therefore the sales were outside the State, and (3) that the sales had taken place in the course of export, as aviation spirit was taken out of the territory of India.
Held: (i) that by sale in article 286(i)(a) is meant a completed transaction by which property in the goods passes.
Before property in the goods passes the contract of sale is only executory and the buyer has only a chose in action.
The taxable event is not to be found at an earlier stage because the critical taxable event is the passing of property.
The Explanation to cl.
(1) of article 286 was added to avoid, among other things, multiple taxation of the same transaction.
It indicates the State where the tax can be levied and also the State where it cannot.
It achieves it by excluding from consideration the place where the property in the goods passed according to the law relating to sale of goods.
The non obstante clause establishes this.
By the fiction created by the Explanation a sale is deemed to have taken place in the State where the goods are delivered as a direct result of the sale for purposes of consumption in that State.
Where there are more States than one involved, any State claiming to tax a sale by reason of something anterior to the passing of property would not be able to claim that the sale took place there unless it was also the State of delivery.
The Explanation is meant to explain the Article and must be interpreted according to its tenor and the Explanation is not to be explained with the aid of the Article because that would reverse their roles.
The Explanation is not applicable unless there are more States than one involved.
The State of Bombay vs The United Motors (India) Ltd., , State of Travancore Cochin vs Shanmugha Vilas Cashewnut Factory, ; , Ramnayain Sons Ltd. vs Asst.
904 Commissioner of Sales Tax; , and The Bengal Immunity Company Ltd. vs The State of Bihar, [1955] 2 S.C.P. 603, considered.
(2) that to exclude the power of taxation of the State of West Bengal under article 286(i)(a), read with the Explanation, the appellant companies must be able to point out some other State where the goods could be said to have been delivered as a result of the sale for the purpose of consumption in that other State, and that where, as in the present case, aviation spirit was delivered to the aircraft, there was no such rival State, and therefore, the ban contained in article 286(i)(a) and the Explanation, did not apply.
(3) that in the phrase " in the course of export out of the territory of India " in article 286(i)(b) the word " export " does not merely mean 'taking out of the country '.
Export here means that the goods are being sent to a foreign destination at which the goods can be said to be imported.
In the Article the notions of import and export go in pairs.
State of Travancore Cockin vs The Bombay Co. Ltd., ; and State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory, ; , relied on.
(4) that aviation spirit loaded on board the aircraft for consumption, though taken out of the country, was not exported since it had no destination where it could be said to be imported.
The sales in question could not, therefore, be said to have occasioned the export, nor were they in the course of export.
Accordingly, article 286(i)(b) was not applicable.
(5) that the sales must be treated as made within the State of West Bengal.
The customs barrier did not set a terminal limit to the territory of West Bengal for the purposes of sales tax, and the sales, though beyond the customs barrier, were still within the territory of the taxing State.
|
Appeals Nos. 386 and 387 of 1966.
Appeal by special leave from the judgment and_decree dated April 16, 1963 of the Madhya Pradesh High Court in First Appeal No. 217 of 1959.
section V. Gupte, P. C. Bhartari and J. B. Dadachanji, for the appellants (in C.A. No. 386 of 1966) and the respondents (in C.A. No. 387 of 1966).
I. N. Shroff and Rama Gupta, for the State of Madhya Pradesh.
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by special leave from the judgment of the High Court of Madhya Pradesh dated 16th April, 1963 in ' First Appeal No. 217 of 1959, whereby the High Court modified partly the judgment of the first Additional District Judge, Jabalpur dismissing Civil Suit No. 10 A of 1954.
The suit was instituted against the State of Madhya Pradesh by Beohar Raghubir Singh and his three grand sons.
Beohar Raghubir Singh 's son, Beohar Rajendra Sinha, was a pro forma defendant.
A notice under section 80 of Civil Procedure Code had been given by Raghubir Singh on 11th January, 1954.
Plaintiffs 2, 3 and 4, his grand sons were joined as plaintiffs because in a partition made subsequent to the giving of the notice, they were each entitled to 1/5th share along with the first plaintiff.
Beohar, Rajendra Sinha was joined as a defendant because he did not choose to join as the plaintiff.
The plaintiffs sought a declaration (1) that the three nazul plots in suit had been in possession of the plaintiffs and the predecessors in their own right from time immemorial and their status was that of Raiyat Sarkar; and (2) that the order of the State Government in the Survey and Settlement Department refusing to recognise their possession over the plots was wrong and ultra vires.
The dispute relates to Phoota Tal a tank situated within the town of Jabalpur.
It was plot No. 282 in the settlement of 1863 A.D.
Its area then was 957 5.24 acres.
it was recorded as malkiat Sarkar and in the last column there was an entry showing possession of Aman Singh Thakur Prasad.
The next settlement took place in 1890 91.
The survey number of Phoota Tal was changed to plot No. 325.
Its area remained the same, it was recorded as "water (pani)" and in the last column, the entry showed the possession of Beohar Narpatsingh Raghubir Singh.
, The third settlement took placed in 1909 10.
The plot number of Phoota Tal was then , it was still recorded change to 327.
Its area remained the same it was still recorded as 'water", but there was no entry in favour of any one showing possession.
The nazul settlement took place in 1922 23.
In this settlement, the tank was given numbers 33, 34, 35, 36, 37 and 171.
Its area was recorded as 5.24 acres.
In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur.
The land so found to be occupied was recorded in the possession of the Muncipal Committee, Jabalpur and the remaining land was again recorded as "Milkiat Sarkar".
There was no entry regarding possession in the remarks column so far as the remaining land was concerned.
The plaintiffs alleged that Thakur Prasad and Aman Singh were their ancestors, that they had been in continuous possession of the disputed landand the omission to record their possession in the last two settle ments of 1909 10 and 1922 23 was due to some oversight.
In 1948 the first plaintiff made an application for correction to the Deputy Commissioner, Jabalpur who made an order in his favour exhibit P 5.
The order of the Deputy Commissioner was however set aside by the State Government on 28th May, 1953 and it was held that the plaintiffs had no title to the disputed land.
The plaintiff therefore prayed for a declaration of the title to the disputed plots and for the correction of the entry in the settlement record showing the status of the plaintiff as that of "Raiyat Sarkar".
The suit was contested by the State of Madhya Pradesh.
It was urged that the plaintiff had no possession over the disputed land and the order of the State Government dated 28th May, 1953 was correct.
It was contended that plaintiffs 2, 3 and 4 had no right to institute the suit because no notice under section 80 of the Civil Procedure Code was given on their behalf.
The suit was not contested by the second defendant Beohar Rajendra Sinha.
By its judgment dated 24th January, 1959 the trial court held that there was no documentary evidence from 1891 to 1932 to support the possession of the ancestors of the plaintiffs regarding Phoota Tal.
The trial court also held that in all the settlement entries, the land was recorded as belonging to the Government "Milkiat Sarkar".
In any event, between 1891 to 1932 there was no evidence regarding the user of the property by the plaintiffs and in the subsequent years a part of the property was found in possession of the Municipal Committee.
The trial court dismissed the suit.
Against the judgment of the trial court 958 the plaintiffs preferred an appeal to the High Court.
The High Court held in the first place the notice exhibit P 8 was not in conformity with section 80 of the Civil Procedure Code.
The High Court held that Beohar Raghubir Singh had lost the right to represent the joint family as karta at the time of institution of the suit because there had been a severence of joint status and the notice served by Beohar Raghubir Singh could not ensure to, the benefit of the other plaintiffs.
On the merits of the case, the High Court found that the plaintiffs had established their possession for the statutory period of 60 years.
The High Court held that the plaintiffs had acquired the right of Raiyat Sarkar and that the order of the State Government refusing to correct the revenue record was illegal.
On these findings the High Court modified the judgment of the trial court to the extent that there was a declaration in favour of the plaintiffs that they were entitled to 1/5th share of the property in dispute and the claim regarding the 4/5th share was dismissed The order of the State Government dated 28th May, 1953 refusing to recognise the possession of the plaintiffs was held to be wrong and illegal.
The first question to be considered in these appeals is whether the High Court was right in holding that the notice given under section 80 of the Civil Procedure Code by the first plaintiff was effective only with regard to Raghubir Singh and.
the notice was ineffective with regard to the other plaintiffs and therefore Raghubir Singh alone was entitled to a declaration as regards the 1/5th share of the dispute plot.
On behalf of defendant No. 1 it was contended by Mr. Shroff that at the time of giving notice the plaintiffs and the second defendant were joint and plaintiff No. 1 Raghubir Singh was karta of the joint family.
The notice was given on 11th January, 1954 and the suit was instituted on 20th July, 1954.
It was admitted that between these two dates there was a disruption of the joint family of which Raghubir Singh was a karta.
It was argued that the right of the first plaintiff to represent the family had come to an end before the institution of the suit, and hence plaintiffs 2, 3 and 4 had to comply individually with the provisions of section 80 of the Civil Procedure Code before appearing as plaintiffs in the suit, In our opinion, there is no justification for this argument.
, We consider that there is substantial identity between the person giving the notice and the persons filing the suit in the present case.
At the time of giving notice the first plaintiff Beohar Raghubir Singh was admittedly the eldest member of the joint family and being a karta he was entitled to represent the joint family in all its affairs.
The cause of action had accrued at the time of giving of the notice and it was not necessary to give a second notice merely because there was a severence of the joint family, before 20th July, 1954 when the suit was actually instituted.
It is obvious 959 that the notice was given by Beohar Raghubir Singh as a representative of the joint family and in view of the subsequent partition the suit had to be instituted by, all the divided members of the joint family.
We are of the opinion that the notice given by Beohar Raghubir Singh on 11th January, 1954 was sufficient in law to sustain a suit brought by all the divided coparceners who must be deemed to be as much the authors of the notice as the karta who was the actual signatory of the notice.
There is substantial identity between the person giving the notice and the persons bringing the suit in the present case and the argument of defendant No. 1 on this point must be rejected.
The object of the notice under section 80, Civil Procedure Code is to give to the Government or the public servant concerned an opportunity to reconsider its or his legal position and if that course is justified to make amends or settle the claim out of court.
The section is no doubt imperative; failure to serve notice complying with the requirements of the statute will entail dismissal of the suit.
But the notice must be reasonably construed.
Any unimportant error or defect cannot be permitted to be treated as an excuse for defeating a just claim.
In considering whether the provisions of the statute are complied with, the Court must take into account the following matters in each case (1) whether the name, description and residence of the plaintiff are given so as to enable the authorities to identify the person serving the notice; (2) whether the cause of action and the relief which the plaintiff claims are set out with sufficient particularity; (3) whether a notice in writing has been delivered to or left at the office of the appropriate authority mentioned in the section; and (4) whether the suit is instituted after the expiration of two months next after notice has been served, and the plaint contains a statement that such a notice has been so delivered or left.
In construing the notice the Court cannot ignore the object of the legislature, viz., to give to the Government or the public servant concerned an opportunity to reconsider its or his legal position.
If on a reasonable reading of the notice the plaintiff is shown to have given the information which the statute requires him to give, any incidental defects or irregularities should be ignored.
In the present case, the notice was served on 11th January, 1954 by Beohar Raghubir Singh.
The notice stated the cause of action arising in favour of the joint family.
The requirements as to cause of action, the name, description and residence of the plaintiff were complied with and the reliefs which the plaintiff claimed were duly set out in the notice.
It is true that Beohar Raghubir Singh did not expressly describe himself as the karta.
But reading the contents of the notice exhibit P 8 in a reasonable manner it appears to us that the claim of Beohar Raghubir Singh 960 was made on behalf of the joint family.
It is true that the term of section 80 of the Civil Procedure Code must be strictly complied but that does not mean that the terms of the notice should be scrutinised in an artificial or pedantic manner.
In Dhian Singh Sobha , Singh & Anr.
vs The Union of India & Anr.
(1) Bhagwati, J. observed in the course of his judgment : "We are constrained to observe that the approach of the High Court to this question was not well founded.
The Privy Council no doubt laid down in Bhagchand Dagadusa vs Secretary of State (2) that the terms of this section should be strictly complied with.
That does not however mean that the terms of the notice should be scrutinised in a pedantic manner or in a manner completely divorced from common sense.
As was stated by Pollock C. B. in Jones vs Nicholls(3) We must impprt a little common sense into notices of this kind '.
Beaumonth, C.J., also observed in Chandu Lal Vadilal vs Government of Bombay(4) "One must construe section 80 with some regard to common sense and to the object with which it appears to have been passed. ." As already pointed out, the suit was instituted in the present case by the divided members of Hindu joint family on 20th July, 1954.
The notice had been given on 11th January, 1954 by Beohar Raghubir Singh who was the karta of the undivided joint family.
In our opinion there was identity between the person giving a notice and the persons filing the suit because it must be deemed in law that each of the plaintiffs had given the notice under section 80 of the Civil Procedure Code through the karta Beohar Raghubir Singh.
It is not disputed that the cause of action set out in the notice remained unchanged in the suit.
It is also not said that the relief set out in the plaint is different from the relief set out in the notice.
We are accordingly of the opinion that the notice given by the karta was sufficient to sustain the suit brought by the divided coparceners and the decision of the High Court on this point must be over ruled.
The view that we have expressed is borne out by the judgment of this Court in State of Andhra Pradesh vs Gundugola Venkata Suryanarayan Garu(5).
In that case, the Government of Madras applied the provisions of the Madras Estates Rent Reduction Act, 1947 to the lands in the village Mallindhapuram on the ground that the grant was of the whole village and hence an estate within the meaning of section 3 (2) (d)of the Madras Estates (1) ; (2) [1927] L.R. 54 I.A. 338.
(3) ; , 363; ; ,150.(4) I.L.R. (5) ; 961 Land Act, 1908.
The respondent and another person served a notice under section 80 of the Code of Civil Procedure upon the Government of the State of Madras in which they challenged the above mentioned notification and asked the Government not to act upon it.
Out of the two persons who gave the notice, the respondent alone filed the suit.
The trial court held that the original grant was not of the entire village and was not so confirmed or recognised by the Government of Madras and as it was not an "Estate" within the meaning of section 3 (2) (d) of the Madras Estates Land Act, the Madras Rent Reduction Act, 1947 did not apply to it.
But the suit was dismissed on the ground that although two persons had given notice under section 80 of the Code of Civil Procedure, only one person had filed the suit.
The High Court agreed with the trial court that the grant was not of an entire village but it also held that the notice was not defective and the suit was maintainable as it was a representative suit and the permission of the Court under 0.1, r. 8 had been obtained in this case.
The High Court granted the respondent the relief prayed for 'by him.
Against the order of the High Court the appellant appealed to this Court which dismissed the appeal holding that in the circumstances of the case there was no illegality even though the notice was given by two persons and the suit was filed by only one.
If the Court grants permission to one person to institute a representative suit and if the person had served the notice under section 80, the circumstance that another person had joined him in serving the notice but did not join him in the suit, was not a sufficient ground for regarding the suit as defective.
At page 953 of the Report Shah, J. observed as follows : "The notice in the, present suit was served by the plaintiff and Yegneswara Sastri.
They raised a grievance about the notification issued by the Government of Madras on May 16, 1950; it was not an individual grievance of the two persons who served the notice but of all the Inamdars or agrahamdars.
The relief for which the suit was intended to be filed was also not restricted to their personal claim.
The notice stated the cause of action arising in favour of all the Inamdars, and it is not disputed that the notice set out the relief which would be claimable by all the Inamdars or on their behalf in default of compliance with the requisition.
The plaintiff it is true alone filed the suit, but he was permitted to sue for and on behalf of ' all the Inamdars by an order of the Court unuder O. 1, r. 8 of the Code of Civil Procedure.
The requirements as to the cause of action, the name, description and place of residence of the plaintiff was therefore 962 complied with and the relief which the plaintiff claimed was duly set out in the notice.
The only departure from the notice was that two persons served a notice under section 80 informing the Government that proceedings would be started, in default of compliance with the requisition, for violation of the rights of the Inamdars, and one person only out of the two instituted the suit.
That in our judgment is not a defect which brings the case within the terms of section 80".
On behalf of respondent No. 1 reference was made, to the two decisions of the Judicial Committee in Vellayan Chettiar & Ors.
vs Government of the Province of Madras and Anr.(1) and Government of the Province of Bombay vs Pestonji Ardeshir Wadia & Ors.(2) But the 'principle of these decisions has no bearing on the question presented for determination in the present case.
In Vellayan Chettiar 's case(1) a notice was given by one plaintiff stating the cause of action, his name, description and place of his residence and the relief which he claimed although the suit was instituted by him and another.
It was observed by the Judicial Committee: "The section according to its plain meaning requires that there should be in the language of the High Court of Madras 'identity of the person who issues the notice with the person who brings the suit ' : See Venkata Rangiah Appa Rao vs Secretary of State(3) and on appeal Venkata Rangiah Appa Rao vs Secretary of State (4).
To hold otherwise would be to admit an implication or exception for which there is no jurisdiction" Two persons had sued for a declaration that certain lands belonged to them, and for an order setting aside the decision of the Appellate Survey Officer in regard to those lands.
It was found that one alone out of the two persons had served the notice.
The relief claimed by the two persons was personal to them and the right thereto arose out of their title to the land claimed by them.
It was held by the Judicial Committee that without a proper notice under section 80 the suit could not be instituted for to hold otherwise would be to admit an, implication or exception for which there was no justification.
In the other case, in Pestonji Ardeshir Wadia 's case(2) two trustees of a trust served a notice in October, 1933 upon the Government of Bombay under section 80 intimating that the trustees intended to institute a suit against the Government on the cause of action and for the relief set out (1) A.I.R. 1947 P.C. 197.
(2) 76 I.A. 85.
(3) I.L.R. Mad 416.
(4) 963 therein.
One of the trustees died before the plaint was lodged in court, and two more trustees were appointed in the place of the deceased trustee.
Thereafter the two now trustees and the surviving trustee filed the suit out of which the appeal arose which was decided by the Judicial Committee.
No notice was served on the Government on behalf of the two new trustees.
The Judicial Committee accepted the view of the High Court that where there were three plaintiffs, the names and addresses of all of them must be given in the notice.
Their Lordships observed that : "the provisions of section 80 of the Code are imperative and should be strictly complied with before it can be said that a notice valid in law has been served on the Government.
In the present case it is not contended that any notice on behalf of plaintiffs 2 and 3 was served on the Government before the filing of the suit".
It is clear that the principle of these two decisions of the Judicial Committee has no application in the present case because the material facts are different.
We proceed to consider the next question arising in these appeals viz., whether the High Court was right in holding that the plaintiffs had established their title as raiyat sarkar with regard to 1/5th share in nazul plots Nos.
34/3, 33 and 171/1 mentioned in the Deputy Commissioner 's order dated 7th May, 1948 in Revenue Case No. 9/45 46.
It was argued on behalf of defendant No. 1 that there was no evidence to show that the plaintiffs were in possession of the land from 1909 to 1932, and the plaintiffs had not established their title by prescription for the statutory period of 60 years.
It was contended that the High Court had no justification for holding that the plaintiffs had established the title of "Raiyat Sarkar" and the finding of the High Court was not based upon any evidence.
In our opinion, the argument put forward on behalf of defendant No. 1 is wellfounded and must be accepted as correct.
In the settlement of the names of Amansingh and Thakurprasad were noted in the remarks column.
But the column regarding tenancy right is definitely blank.
The owner is shown in the Khasra as the State "Milkiat Sarkar".
In the settlement of 189091 Amansingh Narpatsingh is again shown in the remarks column of the khata.
But the column regarding any kind of tenancy right is again blank.
It is clear that in the settlements of 1860 and 1890 91 the ownership of the land is recorded as that of the Government.
The possession of the plaintiffs or of their ancestors could not be attributed to ownership or tenancy right of the property.
In the settlement of 1909 10, exhibit
P 3 there is no entry in the remarks column showing the possession of the ancestors of the plaintiffs.
It was said on behalf of the plaintiffs that no (1) 76 I.A. 85.
L11 Sup.
C.I./69 12 96 4 notice was given to them of the proceedings of the. settlement of 1909 10.
Even assuming that this allegation is correct, the entries of the khasra P 3 cannot be treated to be a nullity and of no effect.
In any event, it was open to the plaintiffs to adduce other reliable evidence to prove their possession between the years 1909 to 1932.
But the plaintiffs have failed to produce any such evidence.
ln the nazul settlement of 1922 23 the tank was given new plot numbers 33, 34, 35,36, 37 and 171 and its area was recorded as 5.24 acres.
In this settlement about 2 acres of land was found to be occupied by the Municipal Committee, Jabalpur.
The land so found to be occupied was recorded in the possession of the Municipal Committee, Jabalpur and the remaining land was again recorded as "Milkiat Sarkar".
There is no entry as regards the remaining land recording anybody 's possession in the.
remarks column.
Actually proclamations were made during this settlement and objections were invited as per exhibit
ID 14.
A date was fixed upto 31 8 1924 but no one came forward.
The proclamation clearly recited that the vacant sites which were not in possession of anybody were not recognised as belonging to any person.
It is impossible to believe that the plaintiffs or their ancestors were unaware of such a proclamation.
Had they been in possession they would not have failed to make a claim.
For the period after 1933 34 the plaintiffs produced account books to show that they exercised certain rights.
Certain receipts were also proved but they also relate to a period after 1939.
We have gone through the oral evidence produced by the plaintiffs and it appears to be unreliable.
The result is that for the period 1891 till 1932 there is no reliable oral or documentary evidence to prove that the plaintiffs or their ancestors had any possession over the disputed land.
On the contrary the disputed land i.e. Phoota Tal was always recognised as Milkiat Sarkar and the State Government was justified in holding that the order of the Deputy Commissioner dated 7th May, 1948 should be set aside.
In the course of the argument reference was made by Mr. Gupte to the following passage in the Central Provinces Settlement Instructions (Reprint of 1953) page 213 "In dealing with proposed method of the settlement of titles it will be convenient in order to remove all causes for misapprehension among residents, to lay emphasis on the policy of Government in making these settlements.
That policy was defined in the Chief Commissioner 's Resolution No. 502 B X dated the 19th October, 1917, in the Revenue & Scarcity Department, but its main principles will bear repetition.
As it is not the intention of Government in making the settlement to disturb long possession, but only to 965 obtain an accurate record of the lands which are its property and to secure its right to any land revenue to which it may be entitled, long possession even without clear proof of a definite grant from Government will be recognised as entitled the holder to possession.
In deciding what constitutes long possession in any individual town, regard will be had to the special circumstances of the place, and while this point will be dealt with more particularly in the Deputy Commissioner 's report, the following general principles will ordinarily be observed : (1) all occupants who are able to prove possession to any land prior to 1891 or such later date as may be fixed for each town, either by themselves or by a valid title from a previous holder, and all occupants who can prove a definite grant or lease from Government will be recorded as entitled to hold such land as against Government (paragraph 6 of the Resolution) On the basis of this passage it was argued that it was the duty of the settlement officer to treat the plaintiffs as having established their title because they were shown to be in possession in the settlement of the year 1890 91.
We are unable to accept this argument as correct.
The passage quoted above only applies to a case where the ownership of the land was unknown i.e. where possession is proved for a long time, but its original title could not be traced, and not to a case where the land is recorded as Government land.
For the reasons expressed, we hold that the suit brought by the plaintiffs being Civil Suit No. 10 A of 1954 should be dismissed.
Civil Appeal 386 of 1966 is accordingly dismissed and Civil Appeal 387 of 1966 is allowed with costs in favour of defendant No. 1 i.e. State of Madhya Pradesh.
There will be one hearing fee.
R.K.P.S. Civil Appeal 386/66 dismissed.
Civil Appeal 387/66 allowed.
| Manoharlal s/o Jai Jai Ram commenced an action in the Court of the Subordinate Judge, for valuer of timber supplied to the defendant.
The action was instituted in the name of 'Jai Jai Ram Manohar Lal ' which was the name in which the business was carried on.
The plaintiff signed and verified the plaint as 'Jai Jai Ram Manohar Lal, by the pen of Manohar lal. ' Later he applied to the Court for leave to amend the plaint.
In the application he averred that the business carried on under the name Jai Jai Ram Manohar Lal was a joint Hindu family business and the name was not an assumed or fictitious one as it contained his name and that of his father.
On these averments he prayed that he be allowed to describe him ' self in the cause title as Manohar Lal proprietor of Jai Jai Ram Manohar Lal and in paragraph 1 to state that he carried on the business in timber in the name of 'Jai Jai Ram Manohar Lal '.
The application was 'allowed by the trial Judge.
The defendant then filed a supplementary written statement raising two additional contentions : (1) that the plaintiff was not the sole owner of the business and that his other brothers were also the owners of the business; and (2) that the amendment took effect from the ' date on which it was made and if so, the suit was barred by limitation.
The trial court rejecting these contentions decreed the suit.
The High Court in appeal took the view that the action having been instituted in the name of a nonexisting person ', and Manohar Lal having failed to aver in the application for amendment that the action was instituted in the name of 'Jai Jai Ram Manohar Lal ' on account of a bona fide mistake or omission, the Subordinate Judge was incompetent to grant leave to amend the plaint.
The High Court further held that the amendment allowed by the trial Court took effect only from the date of amendment, and the action was barred by limitation.
Against the judgment of the High Court the plaintiff, by special leave, appealed to this Court.
HELD : (i) The order passed by the High Court could not be sustained.
Rules of procedure are, intended to, be a handmaid to the administration of justice.
A party cannot be refused relief merely because of same mistake, negligence, inadvertence or even infraction of the rules of procedure.
The Court always gives leave to amend the pleading of a party, unless it is satisfied that the party applying was acting mala fide , or that by his blunder he had caused injury to his opponent which may not be com pensated for by an order of costs.
However negligent or careless may have been the first omission and however late the proposed amendment, the amendment may be allowed if it can be made without injustice to the other side.
[25 C E] Purshottam Umedbhai & Co. V. M/S. Manilal and Sons, ; , explained and applied.
Amulakchand Mewaram & Ors.
vs Babulal Kanalal Taliwala, , applied.
23 In the present case the plaintiff was carrying on business as commission agent in the name of 'Jai Jai Ram Maryohar Lal '.
The plaintiff was competent to sue in his own name as manager of the Hindu undivided family to which the business belonged; he claimed to have filed the suit on behalf of the family in the business name.
The observations made by the High Court that the application for amendment of the plaint could not be granted, because there was no averment therein that the misdescription was 'On account of a bona fide mistake, and on that account the suit must fail, could not be accepted.
There is no rule that unless in an application for 'amendment of the plaint it is expressly averred that the error, omission or misdescription is due to a bona fide mistake the court has no power to grant leave to amend the plaint.
The power to grant amendment of the pleadings is intended to serve the ends of justice and is not governed by any such narrow or technical limitations.
[57 B D] (ii) Since the name in which the action was instituted was merely a misdescription of the original plaintiff, no question of limitation arose and the plaint must be deemed on amendment to have been instituted in the name of the real plaintiff on the date on which it was originally instituted.
[27 E] (iii)The defendant raised and persisted in a plea which had no merit even after the amendment was allowed by the trial court.
In the circumstances he must pay the costs in this Court and the High Court.
[27 F G]
|
ivil Appeal Nos. 415 and 962 of 1976.
(Appeals by Special Leave from the Judgment and Orders dated 2 3 1976 and 21 7 1976 of the Punjab & Haryana High Court in Civil Writ Petition Nos. 561 and 1961 of 1976 respectively).
S.T. Desai, Talat Ansari and Shri Narain for J.B. Dadac hanji, for the Appellants (in both appeals).
718 M.C. Bhandare and R.N. Sachthey, for the Respondents (in both appeals).
The Judgment of the Court was delivered by UNTWALIA, J.
In these two appeals by special leave a common question of law falls for our determination, hence, they have been heard together and are being disposed of by this judgment.
The Indian Aluminium Cables Ltd., appellant No. 1 in both the appeals has got its factory at Faridabad in the State of Haryana.
It sells and supplies aluminium cables to several State Electricity Undertakings or Boards situated in the various States.
In respect of the assessment year 1962 63, the Company raised a dispute that it was not liable to pay Central Sales Tax under the , as it claimed to be exempt from inter State tax on the sales of its products to the various State Undertakings or Boards by reason of the provisions contained in section 5 (2)(a)(iv) of the Punjab General Sales Tax Act, 1948 hereinafter referred to as the Act.
The Tribunal decided the matter in favour of the assessee Company but the High Court of Punjab and Haryana answered the Sales Tax Reference made at the instance of the Revenue against the assessee.
The decision of the High Court is reported in The State vs Indian Aluminium Cable Ltd., Faridabad(1).
The matter was brought to this Court in appeal and by a decision given on April 2, 1976 the view of the High Court was af firmed and it was held that the sales were not exempt from tax generally within the meaning of section 8(2A) of the Central Act read with section 5(2)(a)(iv) of the Punjab Act.
The decision of this Court is reported in Indian Aluminium Cables Ltd. and another vs State of Haryana(2).
The period of assessment concerning the appellant is each quarter of the year.
In respect of.all the 8 quarters of the years 1969 70 and.
1970 71, Returns were filed by the Company in time, i.e. on or before the last day of the month following the quarter concerned.
The Assessing Authority did not accept the Returns and issued notices on May 22, 1970 under section 11 (2) of the Act in respect of the 4 quarters of 1969 70 requiring the assessee Company to pro duce evidence in support of the Returns.
Since the ques tion of assessee 's liability to pay Central Sales Tax was pending in reference before the High Court the matter was not pursued by the Assessing Authority and as per the re quest of the asses.see it was kept pending.
Even though the High Court decision was given on November 5, 1973, the matter became subjudice in appeal filed in this Court.
It appears that the matter of assessment in respect of the year 1969 70 was taken up by the Assessing Authority again by issuance of a notice on September 15, 1975.
Thereupon, the Company filed Civil Writ Petition No. 561/1976 in the High Court on January 27, 1976 to quash the notice dated Septem ber 15, 1975 and to re.strain the State.
of Haryana and its Officer the Excise and Taxation Officer, Faridabad, from proceeding with the assessment.
It is said that in respect of the 4 quarters of the (2) 38 S.T.C. 108. 719 year 1970 71 notices under section 11(2) of the Act were issued for the first time by the assessing authority on January 30, 1976.
Thereupon, the Company filed in the High Court Civil Writ Petition No. 1961/1976 for reliefs simi lar to the ones asked for in the other writ petition.
According to the appellant, in the first writ petition were raised before the High Court the two main questions in the following terms: "(i) Whether the assessment proceedings with regard to assessment year 1969 70 could be proceed ed with and whether assessment order could be passed beyond a period of 5 years after the expiry of the period to which the assessment relates.
In other words, whether the Sales Tax Officer had jurisdiction to make assessment for the assessment year 1969 70 which had become time barred; (ii) Whether Central Sales Tax was payable in respect of sale of electric cables manufactured and sold by the petitioner Company to State Electricity Boards in view of the exemption granted generally under section 8(2A) of the read with section 5 (2) (a) (iv) of the Punjab General Sales Tax Act, 1948".
This writ petition was dismissed in limine by a Bench of the High Court stating "Reply has been filed.
The matter is covered in favour of the respondent by 33 STC 152.
Dismissed".
It appears by the time the second writ petition came to be filed the appellant 's liability to pay Central Sales Tax was decided by this Court in the case referred to above.
Therefore, in the second writ petition, in the main, the question raised was one of limitation as in the other writ petition.
Another Bench of the High Court dismissed this writ petition in limine on July 21, 1976.
In substance and in effect, in spite of the Full Bench decision (by the majority) of the High Court in the case of Rameshwar Lal Sarup Chand vs Shri U.S. Naurath, Excise & Taxation Officer, Assessing Authority, Amritsar and Another(1), on which Mr. S.T. Desai, learned counsel for the appellant heavily relied upon before us, neither Bench found any substance in the point of limitation raised by the Company and dismissed the two writ petitions in limine.
In our opinion the High Court was right, for the reasons to be stated hereinafter in this judgment, in not entertaining the point of limitation in spite of the full Bench decision aforesaid, as, the said decision in view of many pronouncements of this Court to be alluded to hereinafter is no longer good law.
In face of the decision of this Court in Indian Alumini um Cables Ltd. & Anr.
vs State of Haryana (supra) the ques tion of the appellant 's tax liability under the was not reagitated before (1) 15 S.T.C. 932.
720 US.
Learned counsel for the appellant, however, strenuously urged that the assessing authority could not assess the tax payable by the appellant on expiry of the period of 5 years from the end of each quarter.
The 4th quarter of the year 1969 70 expired on March 31, 1970 and the period of 5 years having expired on March 31, 1975 no assessment could be made thereafter.
In relation to the year 1970 71 even the notice for the first time was issued under section 11 (2) of the Act after the expiry of the period of 5 years in relation to the first three quarters, although it was within time apropos the last quarter.
The period of the last quar ter expired on March 31, 1971; but no assessment could be made, according to the appellant 's counsel, even in regard to the assessment year 1970 71 in respect of any quarter on the expiry of the 5 years ' period reckoning from the last date of the quarter.
Mr. M.C. Bhandare, learned counsel for the respondents submitted that although a time limit had been ' fixed in sub sections (4), (5) ,and (6) of section 11 of the Act, no time limit was fixed by the Legis lature for actions and orders to be taken and passed under sub ' sections ( 1 ), ( 2 ) and ( 3 ).
Counsel, therefore, urged that neither the issuance of any notice under section 11 (2) of the Act was beyond any period of time nor was the assessing authority under any disability of any period of limitation in passing the final order of assessment in respect of any of the quarters in question.
The alternative submission of Mr. Desai that in any view of the matter notice had to be issued under section 11 (2) and assessments had to be completed under section 11 (3) within a reasonable time was also refuted by Mr. Bhandare.
It is beyond any dispute and debate that under section 10 of the Act read along with the Rules framed thereunder, Return has to be filed by a dealer for each quarter by the last day of the following month of the quarter and admitted sales tax as per the Return has also got to 'be deposited and challan filed along with the Return.
It will be seen hereinafter from the authoritative pronouncements of this Court that the mere statutory liability of a dealer to file the Return or to pay the tax has not the effect of commence ment of any proceeding under the Act.
If a dealer does not file a Return being liable to pay tax, then action under sub section (5) or sub section (6), as the case may be, has to be taken by the Assessing Authority within the period of 5 years prescribed therein.
The expression "proceed to assess" in those two sub sections as also in sub section (4) means taking some effective step towards proceeding to make the best judgment assessment in accordance with the sub section which may be applicable.
In a given case action may be taken under section 11 A (1 ) of the Act treating the case as a case of escaped assessment within the meaning of said section.
But the assessing authority has got to.
pro ceed to assess or reassess within 5 years following the close of the year for which the turnover is proposed to be assessed or reassessed.
But in a case where the assessee has filed the Return the proceeding under the Act commences on the filing of the Return.
"If the Assessing Authority is satisfied without requiring the presence of dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall assess the amount of tax due from the dealer on the basis of such returns" as provided for in section 11 (1 ).
The assessment under sub section(1) can be made at any time even 721 according to the Full Bench decision of the Bombay High Court in Bisesar House vs State of Bombay and Others(1), followed in Rameshwar Lal Sarup Chand(3).
But the view of the Bombay High Court on a consideration of the similar provisions of the other State Statutes that a notice under sub section (2) must be issued within the period of limita tion mentioned in other sub sections of section 11 or sec tion 11 A no longer holds good.
A notice under sub section (2) requiring the dealer to produce evidence can be issued at any time after the filing of the Return.
The expectancy of taking steps without any undue delay and within a reasonable time is an expectancy of prudence.
But legally the action cannot be nullified merely on the ground of delay in the issuance of the notice under section 11 (2).
Sub section (3) of section 11 says : "On the day specified in the notice or as soon afterwards as may be, the Assessing Authority shall, after hearing such evidence as the dealer may produce, and such other evidence as the Assess ing Authority may require on specified points, assess the amount of tax due from the dealer".
On a correct interpretation of the provision afore said what emerges as follows : (i) That the Assessing Authority shall hear the evidence produced by the dealer on the day speci fied in the notice issued under sub section (2).
(ii) It can adjourn the hearing to some other day and hear the evidence produced by the dealer on the adjourned day or days.
(iii) The Assessing Authority may require the dealer to produce further evidence on specified points on the adjourned day or days.
(iv) The Assessing Authority should assess the amount of tax due from the dealer, that is to say, pass the order of assessment, on the day on which the.
hearing ,of the evidence is completed or "as soon afterwards as may be".
"the last phrase is absent in some of the similar statutes.
It, therefor may be open to argument whether the assessment order passed under section 11(3) of the Act after undue delay of the comple tion of the hearing of the evidence produced or required to be produced by the dealer is valid or not.
But we are not concerned with the said ques tion in this case as on the facts and in the cir cumstances appearing relation to the assessment proceedings of either of the two years to produc tion of evidence by the assessee could not and has not start as yet because of the filing of the writ petitions and the appeals in the Court.
It goes without saying that the assessing authority will be well advised to complete the assessment proceedings in question as soon as it may be possible to do so after the delivery of this judgment.
(1) 9 S.T.C. 654.
(2) 15 S.T.C, 932.
722 Sub section (4) of section 11 is attracted in a case where a dealer having furnished a Return in respect of a period fails to comply with the terms of a notice issued under sub section (2).
In such a case the Assessing Authority has to take some effective step, such as issuance of a notice to the assessee intimating to him that he is proceeding to assess to the best of his judgment the amount of tax due from the dealer.
On failure of a dealer to furnish a Return in respect of any period by the prescribed date the Assessing Authority after giving the dealer a reasonable opportunity of being heard can proceed to assess to the best of his judgment the amount of tax, if any, due from the dealer.
In such a case also an effective Step such as issuance of a notice to the dealer concerned showing that the Assessing.
Authority is proceeding to assess has got to be taken within 5 years of the expiry of the period concerned.
Sub section (6) is attracted in the case of a dealer who being liable to pay tax under the Act has failed to apply for registration.
Similar steps as the ones to be taken under subsection (5),are to be taken under sub section (6) within a period of 5 years after the expiry of the concerned period.
But the Legis lature advisedly did not fix any period of limita tion for taking up of the steps or the passing of the assessment order under any of the sub sections (1), (2) or (3).
The reason is obvious.
Best judgment assessments in the circumstances mentioned in any of the sub sections (4), (5) or (6) could not be allowed to be made after the expiry of a certain reasonable time which the Legislature thought was three years previously but made it five years by Punjab Act 28 of 1965.
But where a regis tered dealer has filed the Return the assessing authority can pass the assessment order under sub section (1 ) and accept the Return filed by the dealer as correct and complete.
In such a case the formality of passing an order of assessment is to be completed without any further demand of tax from the dealer.
For the issuance of a notice under subsection (2) no time limit has been fixed, but the assessing authority must remain on its guard of taking the steps and completing the assessment as soon as it may be possible to do so.
Other wise, the risk involved may just be pointed out.
Take a case where a notice under sub section (2) is issued after the expiry or just on the verge of expiry of the period of 5 years and the dealer fails to comply with the terms of the notice.
In such a case the assessing authority may have to proceed to make the best judgment assessment under sub section (4) attracting the bar of limitation of 5 years.
But, of course, there may be a case where in spite of the failure of the dealer to comply with the terms of a notice issued under sub section (2) the assessing authority may be in a position to complete the assessment under sub section (3), treating the alleged failure of the dealer as not a real failure on his part.
We now proceed to discuss some of the relevant decisions on the points at issue.
In Bisesar House case (supra), Chagla, C.J. delivering the judgment of a Full Bench of the Bombay High Court on a consideration of the similar provisions of section 11 of the C.P. and Berar Sales Tax Act, 1947 applied the ratio of his decision in Commissioner of Income tax, Bombay City vs Natsee Nagsee & Co.(1), to a case covered by (1) 723 section 11 (2) of the Sales Tax Act.
With respect to the learned Chief Justice we say that he was not right when he said at page 669: "Section 11 (2) is in the substantial sense an initiation of fresh proceedings by the Commission er.
It is open to the Commissioner to be satisfied with what the assessee has done and pass an order under section 11 (1).
But if he is not satisfied, then he initiates fresh proceedings under section 11(2) by issuing a notice.
That undoubtedly is putting the assessee to the peril of the apprehension that as a result of the notice his tax might be enhanced.
If the principle we have laid down in Narsee Nagsee 's case 31 I.T.R. 164 is correct, then that princi ple would undoubtedly apply to the issuing of a notice under section 11(2)".
As held by this Court in the case of Ghanshyamdas vs Regional Assistant Commissioner of Sales Tax, Nagpur & others(1), even the filing of a Return by a dealer is tantamount to initiation or commencement of a proceeding under the Sales Tax Act.
The decision of the Bombay High Court in Narsee Nagsee 's case Was affirmed by a Division Bench (by majority) of this Court in Commissioner of Income tax, Bombay City Iv.
Narsee Nagsee & Co. (2).
Subba Rao, J. as he then was, delivering the majority opinion of a Constitution Bench of this Court in Ghanshyam das 's case (supra) referring to the decision of the Privy Council in Rajendranath Mukherjee vs Income tax Commission er(1), said at page 983 of 14 S.T.C. "This decision is a clear authority for the position that if a return was duly made, the assessment could be made at any time unless the statute prescribed a time limit.
This can only be for the reason that the proceedings duly initiated in time will be pending and can, therefore, be completed without time limit".
At page 987 says the learned Judge: "It is manifest that in the case of a registered dealer the proceedings before the Commissioner start factually when a return is made or when a notice is issued to him either under section 10(3) or under section 11(2) of the Act".
As rightly point ed out by Shah, J. as he then was, at page 436, if we may say so with respect, in the case of Regional Assistant Commissioner of Sales Tax, Indore vs Malwa Vanaspati and Chemical Co. Ltd.(4), section 11 (2) is a typographical error in the sentence extracted above.
In disapproval of the view of the Full Bench expressed in Bisesar House case (supra) it was reiterated at page 989 in Ghanshyamdas 's case "AS we have held that the submission of a statutory return would initiate the proceedings and that the proceedings would be pending till a final order of assessment was made on the said return, no question of limitation would arise . . .
For the foregoing reason we hold that a statutory obligation to make a return within a prescribed time does not proprio vigore initiate the assessment proceedings before the Commissioner; but the proceedings would commence after the return was submitted and would continue till a final order of assessment was made in regard to the said return".
(1) 14 S.T.C. 976 . (2) (3) (4) 21 S.T.C. 431.
724 In Narsee Nagsee 's case (supra) it has been pointed out by the majority of the Bench that a notice under section 11(1) of the Business Profits Tax Act, 1947 "must be given within the financial year which commences next after the expiry of the accounting period or the previous year which is by itself or includes the chargeable accounting period in question".
(vide page 317 of 40 I.T.R.).
It was also pointed out in that case that the words "profits escaping assessment" ' in section 14 of the Business Profits Tax Act applied equally to cases where notice had been given but had resulted in no assessment and to cases where due to inadvertence, oversight or any other reason no notice was given and therefore no assessment was made.
This Court in The State of Punjab & Others vs Tara Chand Lajpatt Rai(1), reversed the decision of the Punjab High Court in Civil Writ No. 1088/61 and following the decision of this Court in Ghanshyamdas 's case (supra) stated at page 501: "This decision is, therefore, a clear authority for the proposition that assessment proceedings commence in the case of a registered dealer either when he furnishes a return or when a notice is issued to him under section 11(2) of the present Act, and that if such proceedings are taken within the prescribed time though the assessment is fina lised subsequently, even after the expiry of the prescribed period, no question of limitation would arise".
In the case of Tarachand Lajpat Rai (supra) the dealer had filed the Returns after the expiry of 30 days from the relevant date but they were not rejected by the Department on that ground.
Notice under section 11 (2) of the Act was issued and that also was done before the expiry of period of 3 years ' as the period of limitation stood then in the other sub sections.
On the authority of Ghan shyamdas 's case it was held "the assessment pro ceedings commenced either when the respondent firm filed the returns or in any event from the date of the said notice.
Both the events, therefore, were within the prescribed time.
" The decision of the Full Bench of the Punjab High Court in the case of Rameshwar Lal Sarup Chand (supra) was merely distinguished on the ground that the question decided in Ghanshyamdas 's case did not come up for consideration in Rameshwar Lal 's case.
But we think it is high time that the decision of the Full Bench of the High Court in Rameshwar Lal 's case should be clearly and expressly over ruled now.
An identical view had been expressed by his Court reversing the decision of the Punjab High Court in Letters Patent Appeal No. 319/63 in the case of The State of Punjab and another vs Murlidhar Mahabir prasad(2).
The challenge before this Court in the case of Madhya Pradesh Industries Ltd. vs State of Maharashtra and Others(3), was whether sub section (3) of section 11A of the C.P. and Berar Sales Tax Act, 1947 was violative of Article 14 of the Constitution.
The argument was repelled and it was stated at page 402 by Hegde, J. (1) 19 S.T C:.
493 (2) 21 S.T.C. 29.
(3) 22 S.T.C. 400.
725 delevering the judgment on behalf of himself, Wanchoo, C.J. and Mitter,J.: "This Court in Ghanshyamdas 's case specifically overruled the decision of the Bombay High Court in Bisesar House case.
Therein this Court held that while s.11 (2) deals with pending proceedings, section 11A concerns itself with matters which are not pending.
This Court .further ruled that in the case of pending proceedings the Act has not pre scribed any period of limitation.
That decision proceeds on the basis that section 11 (2) and section 11A cover different fields and that they do not overlap".
Bachawat, J. speaking for himself and Ramaswami, J. went a step further and in their concurring judg ment stated at page 403: "There is no limitation for the issue of a notice under section 11 (2).
This follows from a plain, reading of section 11(2) independently of section 11A(3).
Neither section 11(2) nor sec tion 11A(3) is violative of Article 14.
A notice under section 11 (2) is issued in a pending pro ceeding, where as a notice under section 1 I A( 1 ) initiates a new proceeding.
There is a reasona ble basis for classification and differential treatment of the notices under sections 11(2) and 11A(1) for the purposes of limitation.
" The majority opinion of the Full Bench of the Punjab High Court was delivered by two judges in the case of Rameshwar lal Sarupchandra (Supra) Pandit J ave a dissenting opin ion.
It is wrong to say, as stated by the majority, that the expression "proceed to assess" and the word "assess" connote the same meaning.
The ratio of the majority opinion is chiefly based upon the decision of the Full Bench of the Bombay High Court in Bisesar House 's case which decision was not approved by this Court and must be deemed to have been overruled.
The majority we may also point out with respect, committed a mistake in appreciating the deci sion of this Court in the case of Madan Lal Arora vs The Excise and Taxation Officer ', Amritsar(1) Sarkar, J., as he then was, delivering the judgment on behalf of a Constitu tion Bench of this Court adverted to the facts of the case and stated that the registered dealer under the Punjab General Sales Tax Act had filed returns for the 4 quarters of the financial year ending on March 31, 1955 as also for the 4 quarters for the financial year ending on March 31, 1956.
In respect of each year the Sales Tax Assessing Officer served three successive notices on the dealer one on March 7, 1958, the other on April 4, 1958, and the third on August 18, 1959.
The first two notices were merely under section 11(2) of the Act.
But in the last notice which was issued after the expiry of 3 years it was stated that on the dealer 's failure to produce the docu ments and other evi dence mentioned in the notice, the case would be decided on best judgment assessment basis.
The dealer did not comply with any of the notices and challenged with success by a petition under Article 32 of the Constitution the right of the authorities to, make a best judgment assess ment.
In that connection it was (1) 12 S.T.C. 387 726 pointed out that the period of 3 years mentioned in sub section (4) of section 11 of the Act had to be counted from the expiry of the period in relation to which the returns had been filed and on expiry of the said period the author ities could not proceed to make the best judgment assess ment.
The third and the last notice given on August 18, 1959 was taken to be a notice to the dealer that the as sessing authority was proceeding to make the best judgment assessment and since this was done more than 3 years after expiry of all the 8 quarters ' in respect of the two years it was held to be without jurisdiction and the respondent was restrained from making any best judgment assessment on the petitioner for sales tax for any quarter of the financial years 1954 55 and 1955 56.
The decision of this Court in Madan Lal Arora 's(1) case justifies our apprehension which we have mentioned in the beginning of our judgment to the effect that if a dealer fails to comply with the notice issued under section 11 (2) of the Act, then in such a case, even though there may not be any time limit for issuance of a notice, but on the dealer 's failure to comply with it the assessing authority may be obliged to take recourse to sub section (4) attracting the bar of limitation of 5 years for proceeding to assess on the best judgment basis.
The majority, however, was wrong when they said at page 949 of 15 S.T.C. with reference to Madan Lal Arora 's case: "In the case before the Supreme Court, two notices were within three years and the third notice was beyond three years and their Lord ' ships held that the third notice beyond three years, the Assessing Authority had no jurisdiction to make the assessment.
If the phrase "proceed to assess" bears the meaning which the learned counsel for the State contends for, namely, that only a step towards assessment has to be taken and the assessment can be made at any time after the period of three years, their Lordships would on the basis of the two notices within the period of limitation, have come to a different conclusion and that is not what has been done.
" This was, it appears to us, clearly a mistaken reading of the judgment of this Court.
The majority in our opin ion, was also wrong in importing the period of limitation provided in sub sections (4), (5) and (6) of section 11 of the Act into sub section (3) and in holding, therefore, that an assessment under sub section (3) must also be completed within 3 years from the last date on which the return should be filed under the Act.
We are again constrained to point out that the majority of the Full Bench committed a mistake in thinking that, this Court had held in Madan Lal Arora 's case that the period of 3 years had to be counted from the last date on which the return should be filed.
The deci sion of the Full Bench of the Punjab High Court in the case of Ramashwar Lal 's case (supra) is clearly erroneous and must be over ruled.
Pandit, J. in his dissenting opinion had, by and large, taken a correct view in favour of the Revenue.
(1) 12 S.T.C. 387.
727 Lastly, we may also make a reference to a recent deci sion of this Court delivered by one of us (Untwalia, J.) in the case of Gurbaksh Singh vs Union of India & Others(1) An argument quite similar to the one advanced before us was advanced on behalf of the assessee appellant in that case before this Court.
It was argued that the period of 4 years of limitation prescribed under sub section (2a) of section 11 of the Bengal Finance (Sales Tax) Act, 1941 as extended to the Union Territory of Delhi, should be imported into the revisional and the appellate power of the authori ties conferred on them under section 20.
This argument was repelled and it was pointed out that .the legislature had not provided any period within which an order was to be made by an Appellate or Revisional authority; no such period should be imported in the exercise of the power on the basis of section 11 (2a).
Mr. Desai relied upon the penal timate paragraph of this decision in support of his conten tion that in any view of the matter notice under section 11 (2) had to be issued and the assessment completed within a reasonable time.
We do not accept this contention to be sound.
The argument as presented cannot be accepted to be correct.
In Gurbaksh Singh 's case it was not stated that the exercise of the revisional power suo moto could not be made after an undue long delay.
On such an assumption it was merely found as a fact that there was no undue delay in the suo moto exercise of the power.
In the result we do not find any merit in the appeals.
They are dismissed with costs.
Hearing fee one set only.
V.P.S. Appeals dismissed.
| The respondents Nos. 1 to 10 who were Writ PetitiOners in the High Court, were appointed as clerks between June, 1963 to January, 1967 on temporary basis and were promoted to higher posts thereafter.
They contended that at the rele vant time there was, no rule or order requiring that ap pointments to their posts shall be made through Public Service Commission.
The Gujarat Government issued Gujarat Non Secretariat Clerks, Clerk Typists and 'Typists (Direct Recruitment Procedure) Rules, 1970.
Thereafter, by resolu tion dated 15 4 1971, it was stated that seniority of the candidates who were to be selected for the posts of Clerks, Clerk typists and typists shall be determined as if their allotment or appointment was from 17 4 1970 irrespective of the question whether they were in service or not, and that their names shall be arranged in a common seniority list in order of merit in accordance with the principles laid down in the Rules.
The Writ petitioners filed a Writ Petition in the Guja rat High Court feeling aggrieved by the said 1970 Rules and the 1971 resolution.
The Writ Petitioners contended that the Government should be directed to treat their entire service as regular and that their seniority should be fixed on the basis of the dates on which they had joined their respective posts.
The State Government in its counter affidavit pointed out that the Writ Petitioners were not recruited through proper channel; that even though the centralised recruitment scheme was in existence and was applicable with effect from January, 1963, the Writ Petitioners did not come through the employment exchanges that their appointments were by way of a stop gap arrangement.
The State, however, admitted in its affidavit that the Writ Petitioners were not under the purview of the Gujarat Public Service Commission at the time of their appointment.
The State contended that the Writ Petitioners were irregularly appointed and that 1970 Rules were framed on humanitarian considerations to regularise their appointments and that, their seniority could not be counted from the dates of their appointment and could be counted only from 17th April, 1970.
The High Court came to the conclusion that the Centra lised Recruitment Scheme was not applicable when the Writ Petitioners were appointed and that the posts were also not within the purview of the Gujarat Public Service Commission until March, 1969.
The High Court therefore, held that the appointments of the petitioners were regular and were not required to be regularised under the 1970 Rules.
It also held that the State Government had no power to issue the circular under rule 30 of the Rules for allotment and fixa tion of a seniority and that the instructions contained in the resolution of 1971 were not applicable to the Writ Petitioners.
The High Court allowed the Writ Petition, struck down the seniority list, and directed the State Government and the Director of Civil Supplies to treat the services of the petitioners as regular from the dates when they were appointed initially and not to apply the instruc tions contained in the resolution of 1971 to compute their seniority.
The appellants, who claimed to have been appointed regularly from the beginning and who contend that the ap pointments of the writ petitioners were irregular filed appeal by Special Leave.
The appellants contended: 1.
That the initial appointment of the Writ Petitioners was irregular, being in violation of the centralised recruitment scheme, since the office 678 of the Director of Civil Supplies became a part and parcel of the Directorate of Civil Supplies, and that the centralised recruitment scheme was ap plicable to the recruitment of the Writ Petition ers.
The appointment to the posts held by the Writ Petitioners were required to be made through Public Service Commission, but as they were not made through P.S.C. the appointments were irregular.
Dismissing the appeal with a modification, HELD: 1.
The High Court has rightly negatived both the contentions of the appellants.
The State in its affidavit had admitted that the posts, the Writ Petitioners were not within under the purview of the Public Service Commission at the time of their appointment.
The High Court has also rightly held ' that by describing the cadre in question as a "State Cadre", it could not be said that the modified scheme was made applicable to the Directorate.
It is clear from the scheme that it governed the recruitment to the regional offices and not to the offices of the Directorate.
[680 C E, F G] 2.
Rule 29 of the 1970 Rules can apply only if the initial appointment was irregular, i.e., if the Public Service Commission was not consulted when the consultation was required and if the recruitment had not taken place through the Centralised Recruitment Scheme when it was necessary to do so.
In the ' present case Rule 29 cannot apply because the appointments of the Writ Petitioners were regular.
[681 G H] 3.
The view taken by the High Court is quite justified and does not call for interference.
[681 F] 4.
The High Court, however, was not justified in direct ing that the seniority should be counted from the respective dates of the appointment of the Writ Petitioners. 'the High Court ought to have left the matter to the State Government to re examine the question of fixing the seniority to give effect to their intention of ameliorating the lot of the writ petitioners.
[682 A B]
|
Appeal No. 2296 of 1970.
On appeal by Certificate from the Judgment and Decree dated 17th August, 1963 of the High Court of Patna from Original Decree No 248 of 1955 D. Goburdhan for the Appellant J.
P. Goyal and R. A. Gupta for the Respondents The Judgment of the Court was delivered by VENKATARAMIAH, J.
This appeal by certificate under Article 133 (1) (a) of the Constitution arises out of an action in tort for damages 531 for trespass and unauthorised interference by the defendants with the A proprietary interest of the plaintiff.
The defendants were the State of Bihar and J.P. Mukherjee, an officer in the service of the Bihar Government.
The plaintiff, Prithwi Chand Lall Choudhary was the karta of a Hindu joint family which owned extensive properties collectively known as the "Raj Nazarganj".
The said properties were spread over the District of Purnea and some other districts in the State of Bihar as also in the State of West Bengal.
The plaintiff was the recorded proprietor of several tauzis situated in the Districts of Purnea and Monghyr and also the proprietor of several tenures and patnis within the said Districts.
The plaintiff was liable to pay about Rs. 2,50,000 by way of taxes, cesses etc.
annually.
In the year 1949, the Bihar Legislature passed a law known as the Bihar State Management of Estates and Tenures Act, 1949 (Bihar Act XXI of 1949) (hereinafter referred to as 'the Act ') to provide for the management of estates and tenures in the Province of Bihar.
It received the assent of the Governor General on September 29, 1949 and was published in the Bihar Gazette Extraordinary of October 17, 1919.
On the coming into force of the Constitution of January 26, 1950, the Act was certified by the President in exercise of his powers conferred by Article 31 (6) of the Constitution.
The said certificate which was published in Notification No. 43/3/50 Judicial dated March 11, 1950 read as follows: "that the said Act shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of Article 31, or has contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935.
" Clauses (2) and (6) of Article 31 which are relevant for these cases as they stood at the commencement of the Constitution read as follows: "31. (1) (2) No property, moveable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or 532 acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given. . . . . . (6) Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the President for his certification; and thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935.
" A persual of the provisions of the Act shows that it was intended to bring about a reform in the land distribution system of Bihar for the general benefit of the community.
l`he taking over of the management and control over land was found to be necessary as a preliminary step towards the implementation of the Directive Principles of State Policy.
The Act was similar in nature to the Bihar Land Reforms Act (Act XXX of 1950), the constitutional validity of which was considered by this Court in The State of Bihar v Maharajadhiraja Sir Kameshwar Singh of Darbanga Ors (1) The object of the Act was to bring the Government face to face with the cultivators of the soil in order to facilitate the further reform of abolition of zamindari.
It was also intended to make provision for better irrigation facilities and to prevent realisation of excessive rent or revenue from the cultivators.
The Statement of Objects and Reasons of the Act published in the Bihar Gazette said: "For some years past there has been wide spread anti zamindari agitation amongst the cultivators of the province leading to frequent agrarian troubles.
These troubles, as is well known, owe their origin to the feeling of dissatisfaction that the tenants have against the landlords owing to the (1) 533 latter 's failure to provide for the upkeep of irrigational facilities, to the realisation of abwab, to the enhancement of rents and to ejectment from holdings and other similar causes.
The landlord 's apathy towards the upkeep of the irrigational facilities has been considerably accentuated recently on account of the large scale commutation of rents in kind into cash rents.
In the interest of all concerned and particularly in order to further the programme of Grow More Food, it has become necessary to assume the management by Government of estates and tenures.
Hence this Bill.
It is proposed under Government management to make adequate arrangements for saving the cultivators from the harassment to which they are often subjected at present by the amlas of the zamindars, to save them from the ruinous financial drain of litigation for the recovery of arrears of rents and above all to benefit them by providing for irrigation facilities.
After making payment for objects specified in the Bill and reserving a reasonable balance for cost of management, the net surplus will be paid over to the proprietors.
" Section 3 to 5 c f the Act were in Chapter 11 of the Act.
Section 3 provided as follows : "3.
(1) The Provincial Government may, by notification declare that the estates or tenures of a proprietor or tenure holder, specified in the notification, shall be placed under the management of the Provincial Government, and on the publication of the said notification, the estates or tenures of such proprietor or tenure holder shall, so long as the notification remains in force, be deemed to have been placed under the management of the Provincial Government with effect from the date of the commencement of management.
(2) The notification under sub section (1) shall (a) specify such particulars of the estates or tenures as may be prescribed; (b) specify the period for which the estates or tenures shall be placed under the management of the Provincial Government; and 534 (c) vest the management of such estates or tenures in a person who shall be an officer not below the rank of Deputy Collector (hereinafter called the Manager) (3) The notification under sub section (1) shall be published in the Official Gazette and a copy of such notification shall be sent by registered post, with an acknowledgment due, to the proprietor of the estates recorded in the general registers of revenue paying or revenue free lands maintained under the Land Registration Act, 1876, or in case such estates are not recorded in any such registers, and in the case of tenure holders, to the proprietor or tenure holder of the estates or tenures, as the case may be, if the Collector of the district is in possession of a list of Such proprietors or tenure holders together with their addresses (4) The publication and posting of such notification, where such notification is sent by post, in the manner provided in sub section (3), shall be conclusive evidence of the notice of the declaration to the proprietor or tenure holder whose estates or tenures are affected by the notification under sub section (1) and of the service of such notice on the proprietor or tenure holder 7 ' Section 4 of the Act laid down the consequences of the issue of a notification in respect of any estate or tenure.
It provided inter alia that (a) the proprietor or tenure holder shall cease to have any power of management of his estates or tenures and (b) subject to the provisions of sections 7, 8, 9, 10.
11 and 12, the Manager shall take charge of such estates or tenures together with such buildings, papers and other properties appertaining to the estates or tenures, as in the opinion of the Manager are essential for the proper management of the estates or tenures.
Section 5 of the Act read as follows: "5.
The Manager may, by a written order, require the proprietor or tenure holder or his agents and employees on a date to be specified in such order to produce before him such documents, papers or registers relating to the estates or tenures of such proprietor or tenure holder or to furnish him with such information as the Manager may deem necessary for the management of the estates or tenures: 535 Provided that the proprietor or tenure holder shall have A the option to comply with such written order either himself or through authorised agent." Chapter III of the Act contained the special provisions regarding trust estates or tenures, homesteads and lands used for agricultural and horticultural purposes and certain buildings comprised in estates or tenures placed under the management of the Provincial Government.
Chapter IV of the Act authorised the removal of mortgagees and lessees in possession of an estate or tenure.
Chapter V contained provisions regarding the filing of claims by secured creditors and other persons in possession of the estate or tenure, determination of liabilities and preparation of scheme for their liquidation.
Chapter VI of the Act provided for the filing of claims by creditors other than secured creditors.
Chapter VII made provisions for granting protection from sale of certain estates.
Chapter VIII of the Act contained detailed provisions regarding the management of the estates by the Manager.
Section 22 of the Act which was in Chapter VIII provided that 'every Manager shall manage the property committed to him diligently and faithfully and shall, in every respect, act to the best of his judgment '.
Chapter IX of the Act provided for an appeal to the order of prescribed authority against the Manager.
Chapter X made provision for the constitution of Estates and Tenures Management Advisory Committee and their functions.
Sections 30 and 31 of the Act which were in Chapter XI of the Act barred the jurisdiction of courts regarding matters referred to therein.
They read as under: "30.
Notwithstanding anything contained in any law or anything having the force of law, the declaration of the Provincial Government under sub section (1) of section 3 and the order of the Manager under sub section (1) of section 13 or where on appeal has been preferred, the order of the appellate authority under section 27, shall, subject to the provisions of this Act, be final and shall not be questioned in any Court; and so long as the management of the estates and tenures by the Provincial Government continues, it shall not be lawful for any court to pass any order or do anything which may in any way interfere or have the effect of interfering with such management by the Provincial Government.
No suit or other legal proceeding shall lie in any court against the Crown or any servant of the Crown or 536 against any person acting under the orders of a servant of the Crown for, or on account of, or in respect of, anything done or purporting to be done in good faith under this Act or in respect of any alleged neglect or omission to perform any duty devolving on the Provincial Government or any of the officers subordinate to it and acting under this Act or in respect of the exercise of, or the failure to exercise, any power conferred by this Act, on the Provincial Government or any officer subordinate to it and acting under this Act, except for the loss or the misapplication occasioned by the wilful default or gross negligence of any officer of the Provincial Government." Chapter XII of the Act contained some miscellaneous provisions regarding suits and appeals by or against the proprietor or tenure holder during the period of management by the Government.
Section 33 in Chapter XIII of the Act provided for relinquishment of management of an estate taken over by the Government and other consequential matters.
The other parts of the Act contained provisions regarding other miscellaneous matters.
By a notification dated November 19, 1949 issued under section 3 (1) of the Act the estate of the plaintiff i.e. the 'Raj Nazarganj Estate ' was taken under the management of the State Government.
J P Mukherjee, defendant No. 2, who was the Additional Collector of Darbhanga, was appointed as the Manager of the said estate.
In the meanwhile the Maharajadhiraja of Darbhanga, Sir Kameshwar Singh filed a suit in the Civil Court challenging the validity of the Act as his estate also had been similarly notified under section 3 (1) of the Act.
That suit was withdrawn by the Patna High Court being tried in its Extraordinary Original Civil Jurisdiction.
That suit was decided on June 5, 1950.
The judgment of the High Court in that suit is reported as M.D. Sir Kameshwar Singh vs State of Bihar.(1) By that judgment the Patna High Court declared that the Act was ultra vires and wholly void and an injunction was issued restraining the State Government from enforcing the Act.
Against that judgment, the State of Bihar preferred an appeal before this Court.
But the plaintiff in the case before us, however, on the basis of the judgment of the High Court demanded on June 9, 1950 that he should be put back in possession of the estate whose management had been taken over from him.
On July 3, 1950 the then Collector by his letter informed the plaintiff (1) I.L.R. '29 Patna 790.
537 that the Government had decided to relinquish charge of the estates A and tenures of the plaintiff and that the plaintiff should cooperate in taking over charge by July 15, 1950.
On July 6, 1950 the Government had already cancelled the notification s issued under section 3 (1) of the Act.
The charge of collection papers was handed by the middle of July, 1950.
The abstracts and synopsis of accounts were given on August 7, 1950.
About Rs. 1, 46,00" had been collected on behalf of the estate during the Government 's management.
After the estate was thus handed over to him, the plaintiff filed a suit on September 21, 1951 in the court of the Subordinate Judge, Purnea for damages of Rs. 2,00,000 for wrongful and illegal interference with the plaintiff 's estates and tenures and for other consequential reliefs.
The plaint proceeded on the basis that the Act was unconstitutional as declared by the High Court earlier and that taking over of the possession and management of the estate etc.
was illegal.
The plaintiff pleaded that the Act having been declared void, the defendants were liable for not only the amount of loss actually suffered by the plaintiff but were also liable to recoup the amount spent by them during their management of the estate which was wrongful.
It was alleged that the action of the defendants suffered from negligence, bad faith and malice.
The plaint claimed that the defendants were liable jointly and severally as tort feasors for all such losses suffered by him.
In paragraph 27 of the plaint the plaintiff set out broadly the grounds of his claim thus: (a) that due to gross negligence and wilful default the defendants contravened the provisions of section 3 (1) in notifying and taking possession of part only of plaintiff interests in Estates and Tenures and in omitting to notify other parts of his Estates and Tenures on the first occasion when the notification dated November 19, 1949 was issued the Government was unable to realise all the rents and other dues, (b) that due to wrong notification and omission to notify all parts of his Estates and Tenures and also on account of amalgamated rentals maintained by the plaintiff in respect of his estates and tenures, the plaintiff could not fully realise the balance share of unnotified estates and tenures, (c) that certain rents and decrees had been allowed to become barred by time and (d) that on account of non payment of Agricultural Income Tax and consequent imposition of penalty which was no doubt reduced to Rs. 2,000 on appeal the Estate suffered a loss of Rs. 2,000 He also pleaded that on account of the issue of wrong collection certificates by defendant No. 2 and his staff the plaintiff had suffered some loss which was yet to be ascertained.
538 In the written statement the defendants traversed all the material allegations in the plaint.
They pleaded inter alia that the notification was issued in November, 1949 on the basis of the requisition of the Collector, P.K.J. Menon and that defendant No. 2 was appointed as Manager by that notification.
The allegations of negligence, bad faith and malice were denied.
The defendants pleaded that on the basis of information available in the records of the Government the notification was issued in November, 1949 and at the request of the plaintiff after verification second notification was issued on March 16, 1950, and that plaintiff requested for the issue of the second notification in order to escape the processes of law which had been taken out against him by his creditors and to shield his entire properties from the creditors.
In fact the Government appointed the very collecting agents who were working under the plaintiff and after the management was handed back he reappointed them as his collecting agents.
The plaintiff had accepted without protest the final accounts which had been prepared at the end of the period of management.
Tauzis Nos. 7/8, 30 and 38 about which there was some dispute remained all along with the plaintiff and the collection papers pertaining to them were made over to defendant No. 2 only in the latter part of April, 1950 and if no collection could be made prior thereto in the said area till then the defendants could not be blamed.
The defendants pleaded that they had bona fide carried out their duties.
One fact which requires to be noted here is that the plaint did not have any reference to the effect of section 31 of the Act which is set out above, but it proceeded on the basis that the Act was unconstitutional.
At the conclusion of the trial, the trial court held that the cost of management incurred by defendant No 2 over and above 12.1/2% of gross collection was excessive and the dependents should refund such excess amount.
Secondly, it held that the mistake in not notifying all the shares held by the plaintiff in Tauzis Nos. 718 and 3 at the first instance resulted in non collection of the dues and the plaintiff thereby had suffered.
The trial court held that the defendants being trespassers, the plaintiff owed no duty to them to make available to them the separated Jamabandi to facilitate collection of dues in the said Tauzis.
The trial court, therefore, held that the defendants should reimburse the plaintiff the amount he would have been able to collect from those tauzis during the period of their management.
Similarly, the defendants were liable to make good the loss caused on account of arrears or decrees which had been allowed to become barred.
The trial court directed that a commissioner should enquire into the above items.
Accordingly a preliminary decree was passed.
539 Against the said preliminary decree the defendants filed an appeal before the High Court.
When the appeal came up before a Division bench of the High Court, the defendants contended that the decision of the High Court in which the Act had been declared as unconstitutional required to be reconsidered by the High Court in view of some later decisions of this Court.
Accordingly the Division Bench referred the case to a larger Bench on July 14, 1962.
The case was then heard by a Full Bench of five learned Judges of the Patna High Court.
By its judgment dated February 15, 1963 the Full Bench overruled the earlier decision in MD.
Sir Kameshwar Singh vs State of Bihar (supra) and declared that the Act was constitutional.
The appeal was then referred back to the Division Bench for disposal in accordance with the opinion of the Full Bench.
The Division Bench which finally heard the appeal was of the view that though it was open to the State to notify only a fraction of an estate under section 3 (1) of the Act yet the defendants were not absolved from the duty of taking appropriate steps for the preparation of suitable collection papers in respect of the notified shares in Tauzis Nos. 718 and 300.
It held that the defendants were liable to compensate the plaintiff for not preparing the collection papers in time.
The Division Bench further held that even though the plaintiff had been told to file suits for rents in respect of unnotified share of the estate, the defendants were negligent in the matter of issuing certificates for recovery, some Of which were later on struck off.
The Division Bench also held that the material on the record did not indicate that necessary steps were taken by defendant No. 2 with regard to pending suits and execution proceedings and there was every 17 probability that loss had been suffered by the plaintiff on account of the inaction or failure to continue pending proceedings which amounted to wilful default and gross negligence.
The Division Bench agreed with the trial court that the defendants were liable to reimburse the plaintiff to the extent of Rs. 2,000 levied as penalty for non payment of Agricultural Income Tax.
In so far as the cost of management of Rs. 43,507 which was in the order of 30 per cent of the gross collection was concerned while the trial court had allowed 12.112 per cent, the Division Bench allowed 25 per cent of the gross collection.
In other words the Division bench found that about Rs. 8,000 had been incurred as cost of management in excess of what was authorised.
The Division Bench found that the plaintiff was entitled to it.
The Division Bench held that section 31 of the Act did not give protection in respect of loss which was caused by wilful 540 default and gross negligence.
The appeal of the defendants was accordingly dismissed.
The cross objections of the plaintiff regarding certain matters disallowed by the trial court were also dismissed Aggrieved by the decree passed by the High Court, the State of Bihar applied for a certificate under Article 133 (1) (a) of the Constitution in S.C.A. No. 137/63 on the file of the High Court to file an appeal before this Court.
On the HIGH Court granting the certificate accordingly on December 10,1961, the State of Bihar has filed the above appeal.
The plaintiff also applied for a similar certificate in S.C.A No. 1/64 on the file of the High Court to file an appeal against the decree in so far as it had gone against him.
The High Court granted in his case also a similar certificate by She same order on December 10,1964 but the said certificate was later on cancelled by the High Court on July 6, 1965.
Thus the said proceedings came to an end.
We are now concerned with only the appeal field by the State of Bihar.
In this appeal, the constitutionality of the Act is not questioned before us.
On going through the record of the case, we find that the following facts are established.
The notification issued on November 19,1949 under section 3 (1) of the Act referred to the name of the proprietor, the name of the estate, tauzi numbers of the estate and the share of the proprietor in the tauzis.
Defendant No. 2, J.P. Mukherjee who was then the Additional Collector of Purnea was appointed as the Manager of the estate.
On December 14, 1949, the plaintiff was informed by the Collector at Purnea that the management of the estate was to commence from December 30, 1949 and that he should produce before the Manager a list of villages included in the estate and also the Jamabandis, Karchas and Wasil Baukis upto date before December 27,1949 and also to make over a complete and clear list of the papers showing Jamabandis of each village, the arrears collected and the arrears outstanding before the commencement of the management under the Act.
He was requested to cooperate in the matter and was also informed that if he did not do so the responsibility for any loss would be his.
On December 27, 1949 the plaintiff wrote a letter to the Collectorate.
In that he stated that the work of handing over papers properly of a big and complicated estate was not an easy task and it would certainly take a considerable number of days to complete it.
He pointed out that the Government had committed an error in taking over the management of only 2A 11A 2C 2K 541 share out of Tauzi No 7/8 under the notification, because the collection papers had been maintained for 5 12. 1 /2 and odd share in respect said of the said tauzi.
He pleaded that unless the whole of 5 12.1/2 share was notified, the work of separation of the notified share from the notified share could not be completed even within a period of six months.
He, therefore, asked for the modification of the notification.
Then we find that the plaintiff had met the Collector many times when the affairs of the estate were discussed.
On March I 1,195 ', the Collector wrote the following letter to the plaintiff: "District Office, Purnea The 11th March.
1950 My dear Raja Saheb, 1.
With reference to our discussions on the 7th March.
1950, the following action may be taken with regard to the notified and unnotified portions of your estate as agreed to between us.
We will not be taking over the unnotified portion until the notification is made.
As soon as a notification is made we will take over these portions.
Meanwhile in order to see that no limitation occurs with regard to any rent payable to you, you are requested to prepare a copy of arrear list for the unnotified portions.
With regard to Tauzi No. 7, sufficient number of Tahsildars and other staff required may be employed after selection on the 14th of March, 1950, at Kishanganj, by the Additional Collector and by your Circle Officer.
A certain number of these, according to the proportion that is notified will be selected by the Additional Collector and paid by Government.
You are requested to employ a certain number according to the proportion of the unnotified interest.
These staff together may be put on the job of preparing the arrear list.
If notification is made before the Tamadi Day, we will arrange to issue certificates in respect of arrears due.
however, notification for some reason or other is not made, 542 then we will arrange to file joint suits for these arrears before the Tamds Day.
Yours sincerely, sd/ (Illeg ) 13/3 Raja P.C. Lal Choudhuri, C.B.E. Nazarganj Palace, Purnea City. " A supplementary notification was issued on March 16, 1950 as desired by the plaintiff.
Then we find that there is some further discussion and correspondence between the plaintiff and the Manager.
On April 7,1950, the Manager wrote to the plaintiff that he had been able to persuade the Government to advance Rs. 35,000 to meet the expenses of suits to be field for recovery of rents due to the estate.
The plaintiff replied to that letter on the same date appreciating the step taken by the Government in advancing Rs. 35,000 as loan to the estate.
On April 14,1950, the Manager sent a telegram to the plaintiff stating that since he had not cooperated in sending the previous records of cases in time in respect of Tauzi No. 7/8, it was not possible to file joint suits in respect of both the notified share and the unnotified share and that he was responsible for filing Tamadi suits in respect of the unnotified share in Tauzi No. 718.
The defendant No. 2 in his evidence has stated that he could not make any collection in Tauzis Nos. 7/8 and 30 prior to the second notification because the collection papers were with the plaintiff and they were actually received by him on April 24,.1950.
In the lengthy cross examination of defendant No. 2 we do not find any material which would discredit his evidence or which would show that he had either acted in excess of his powers or mala fide.
We also find that a large number of suits had been filed for recovery of the arrears due to the estate and merely because some of the suits were dismissed on merits or on the ground that some of the persons sued were dead or not traceable, it cannot be said that there was lack of bona fides on the part of the Manager.
By the middle of July, 1950, the management of the estate itself was relinquished.
From the foregoing, we find that it could not be said that there was want of good faith on the part of either the Government or defendant No. 2 who was the Manager.
If a certain share in a tauzi had not been notified on the first occasion it again cannot be said as having been done either mala fide or deliberately to harm the plaintiff.
We shall now deal with the specific findings recorded by the Division Bench of the High Court.
543 The first ground on which the Division Bench has held that the A defendants were liable to pay damages is that defendant No. 2 had failed to get the collection papers prepared in respect of Tauzis Nos. 7/8 and 30 in time and thus caused loss to the plaintiff.
it may be stated here that the Division Bench accepted and we think rightly in view of the definition of the expression 'tenure ' in section 5 of the Act that it was open to the Government to notify even a fraction of a tenure under section 3 (1) of the Act It, however, omitted to notice that the plaintiff had failed to discharge his duty imposed on him under section 5 of the Act which provided that the Manager could by a written order require the proprietor or tenure holder or his agents and employees on a date to be specified in such order to produce before him such documents or papers or registers relating to the estate or tenure concerned or to furnish him with such information as he may deem necessary for the management of the estate or tenure.
In the present case defendant No. 2 did call upon the plaintiff to submit the documents from which it was possible to find out the ability of persons in respect of the notified share in Tauzis Nos. 718 and 30.
The plaintiff pleaded that he had not maintained such separate set of ' accounts and that it would take a long time to prepare it.
He, how ever, produced the registers by the end of April, 1950 only, after the remaining shares were also notified.
Hence if the collection papers were not prepared till then by defendant No 2 in time it was not on account of any negligence on the part of defendant No. 2.
On the other hand he recommended that the unnotified share also should be notified as desired by the plaintiff and such notification was also issued.
By the time steps could be taken to prepare the collections papers the Act had been struck down by the High Court.
Then steps were taken to hand over the estate back to the plaintiff.
It is difficult to agree with the High Court that there was any wilful default or gross negligence on the part of defendant No. 2 in this regard.
With regard to the charge that defendant No. 2 had filed a large number of certificate cases, some of which were later on struck off, the observation of the High Court itself supports that there was no negligence on the part of defendant No. 2 but on the other hand the plaintiff was responsible for it.
The High Court has observed thus: "It appears that it was on the basis of some arrears list submitted by the plaintiff of defendant No. 2 and without subjecting it to proper scrutiny, that a large number of certificate cases were hurriedly filed by the defendants at the time of the Tamadi in the middle of April 1950, and, it was.
544 therefore, not strange that quite a large number of them had subsequently to be struck off, with the result that a considerable portion of the arrears of rents and profits of the plaintiff 's estate remained unrealised and became time barred.
It is manifest that the loss caused to the plaintiff 's estate on this account was due to the inaction of defendant No. 2 amounting to wilful default and gross negligence on his part.
The responsibility for such loss must undoubtedly lie with the defendants." (underlining by us) The High Court omitted to notice that the certificate cases had been filed though hurriedly on the basis of the arrears list submitted by the plaintiff, himself.
In the circumstances it is difficult to charge defendant No. 2 with wilful default or gross negligence on a complaint by the plaintiff.
Further the High Court did not refer in the course of its judgment at least to a few such cases which showed that there was gross negligence.
The High Court overlooked that nearly 7,000 certificate cases had to he filed in a short period.
On the material before us we are not satisfied that the above ground has been made out against the defendants.
The third ground that defendant No. 2 had not diligently attended to any pending proceeding is also not made out since no specific case is dealt with by the High Court which prima facie established that charge.
With regard to the penalty of Rs. 2,000 imposed for non payment of the Agricultural Income Tax it is seen that a penalty of Rs. 5,000 was first imposed as the plaintiff was unable to pay the Agricultural Income Tax in time because he could not collect arrears in time.
In fact on the intervention of the Collector it was reduced to Rs. 2,000.
Even then it was too remote to the management of the notified estate by defendant No. 2.
The trial court had held that it was due to the issue of a wrong notification at the first instance.
But when once it is conceded that the first notification was not an unauthorised one the defendants could not be held liable for reimbursing the penalty of Rs 2,000 paid by the plaintiff.
In so far as the cost of management is concerned, the dispute is confined to about Rs. 8000.
It is seen that the estate had to be returned prematurely to the plaintiff Owing to the judgment of the High 545 Court declaring the Act as unconstitutional within a period of about seven months.
But since defendant No. 2 had offered to refund any expenditure incurred in excess of 25% of the gross collections to the plaintiff, defendant No. I has to pay back Rs. 8,000 to the plaintiff.
It is seen that in present case while the trial court proceeded on the basis that the Act was unconstitutional that the defendants were trespassers on the plaintiff 's estate and that the plaintiff owed no duty to them, the Division Bench of the High Court which finally disposed of the appeal failed to give due attention to section 31 of the Act which had been held to be constitutional earlier.
Section 31 of the Act provided that no suit or other legal proceeding would lie in any court against the State Government or against any servant of the State Government or against any person acting under the orders of a servant of the State Government for or on account of or in respect of anything done or purporting to he done in good faith under the Act or in respect of any alleged neglect or omission to perform any duty devolving on the State Government or any of the officers subordinate to it or acting under the Act or in respect of the exercise of or on failure to exercise any power conferred by the Act on the State Government or any officer subordinate to it and acting under the Act, except for the loss or the misapplication occasioned by the wilful default or gross negligence of any officer of the State Government.
Under section 4 (22) of the Bihar and Orissa General Clauses Act, 1917, a thing shall be deemed to be done in 'good faith ' where it is in fact done honestly, whether it is done negligently or not.
There is no ground to hold that either the State Government or any of the officers acting under it in performance of their duties under the Act had not acted honestly either in issuing the notification under section 3 (l) of the Act on November 19,1949 by which only parts of Tauzis No. 7/8 and 30 had been notified or in not preparing separate collection statements before April, 1950.
the mistake appears to have occurred because the plaintiff himself had acquired the said Tauzis in installments.
Further as soon as the error was pointed out steps were taken by defendant No. 2 to get the unnotified share also notified and the Government issued a notification accordingly within about four months.
It is b cause the plaintiff did not hand over even the consolidated collection statements by April, l950, the separate collection statements could not be got prepared by defendant No. 2 by April, 1950 and even according to the plaintiff himself it would have taken six months to prepare separate collection statements on the basis of the consolidated statements.
It is not shown that either the State Government or any of its officers knew before hand that the plaintiff 546 had maintained a consolidated statement of accounts and that deliberately in order to cause loss to the plaintiff the first notification had been issued in respect of a portion of Tauzis Nos. 7/8 and 30.
These facts constituted a good defence under Section 31 of the Act against any claim based on any alleged neglect or omission since there was no proof of any wilful default or gross negligence on the part of the defendants.
There was also no proof of deliberate abuse of statutory power nor of usurpation of a power which the authorities knew that they did not possess.
In the circumstances the claim for damages on all counts should fail except with regard to the claim for Rs. 8,000 which had been incurred as cost of management in excess of what was authorised by law.
For the foregoing reasons, we set aside the judgment and decree by the trial court and the judgment and decree dated August 17, 1963 passed by the Division Bench of the High Court and pass a decree against defendant No. 1, the State of Bihar directing it to pay the plaintiff 's legal representatives a sum of Rs. 8,000/ with interest thereon at 6 per cent per annum from the date of suit i.e. September 21, 1951 till the date of payment.
The rest of the claim in the suit is dismissed.
Parties shall bear their own costs in all the courts.
The appeal is accordingly allowed in part.
S.R. Appeal allowed.
| By a Notification dated November 19, 1949 issued under section 3(1) of the Bihar State Management of Estates and Tenures Act, 1949 (Bihar Act XXI of 1949), as duly certified by the President under clause (6) of Article 31 of the Constitution, the estate of the Prithwi Chand Lall Choudhary called "Raj Nazarganj" spread over the District of Purnea and some other districts in the State of Bihar as also in the State of West Bengal, was taken under the management of the Bihar State Government.
One J.P. Mukherjee who was the Additional Collector of Darbhanga was appointed as the Manager of the estate.
In the meanwhile, the Maharajadhiraja of Darbhanga Sir Kameshwar Singh filed a civil suit challenging the validity of the Act as his estate was also similarly notified under the said section.
The Patna High Court withdrew that Suit to its own file for being tried in its Extra ordinary Original Civil Jurisdiction and by its judgment dated June 5, 1950 reported as M D. Sir Kameshwar Singh V. State of Bihar ILR 29 Patna 790, declaring the Act to be ultra vires and wholly void, issued an injunction restraining the State Government from enforcing the Act.
Against that judgment the State of Bihar preferred an appeal to the Supreme Court.
However, on the basis of the judgment of the High Court, Prithwi Chand Lall Choudhary demanded on June 9, 1950 that he should be put back in possession of the estate whose management had been taken over from him.
On July 3, 1950 the then Collector by his letter informed Choudhary that the Government had decided to relinquish charge of the estates and tenures and that Choudhary should co operate in taking over charge by July 15, 1950.
On July 6, 1950 the Government cancelled the Notification issued under section 3(1) of the Act.
The charge of collection papers was handed over by the middle of July, 1950 to Choudhary.
The abstracts and synopsis of accounts were given on August 7, 1950.
About Rs. 1,46,000/had been collected on behalf of the estate during the Government 's management.
After the estate was thus handed over to him, Choudhary filed a suit on September 21, 1951 in the Court of the Subordinate Judge, Purnea, for damages of Rs. 2,00,000 for wrongful and illegal interference with his estates and tenures and for other consequential reliefs, 528 Broadly the grounds of the claim were (a) that due to gross negligence ., and wilful default the appellant herein, contravened the provisions of section 'S 3(1) in notifying and taking possession of part only of Choudhary 's interest in Estates and Tenures and in omitting to notify other parts of his Estates and Tenures on the first occasion when the Notification dated November 19, 1949 was issued the Government was unable to realise all the rents and other dues, (b) that due to wrong Notification and omission to notify all parts of his Estates and Tenures and also on account of amalgamated rentals maintained by the Respondent in respect of his estates and tenures he could not fully realies the balance share of unnotified estates and tenures, (c) that certain rents and decress had been allowed to become barred by time, (d) that on account of non payment of Agricultural Income Tax and consequent imposition of penalty which was no doubt reduced to Rs. 2,000 on appeal the Estate suffered a loss of Rs. 12,000 and, (e) that on account of issue of wrong collection certificates by Collector and his staff the respondent had suffered some loss which was yet to be ascertained.
It was alleged that the action of the appellant suffered from negligence, bad faith and malice and the appellant alongwith its Manager as tortfeasor was jointly and severally for all such losses suffered by him.
The appellant traversed all the material allegations in the plaint and the plea was one of bona fides carrying out of their duties under the Act.
The Trial Court which proceeded on the basis that the Act was unconstitutional, and the appellant was a trespasser on the respondents ' estate held: (1) that the cost of management incurred by the Collector over and above 12 1/2% of the gross collection was excessive, and therefore, the State should refund such excess amount; (2) that the mistake in not notifying all the shares held by Choudhary in Tauzis Nos. 7/8 and 30 at the first instance resulted in non collection of the dues and Choudhary thereby had suffered; (3) that the State being trespassers, Choudhary owed no duty to make available to them the separated Jamabandi to facilitate collection of dues in the said Tauzis, and therefore, the State should reimburse Choudhary the amount he would have been able to collect from those tauzis during the period of their management, and also to make good the loss caused on account of arrears or decreaes which had been allowed to become barred.
The Trial Court, accordingly, passed a preliminary decree and directed that a Commissioner should enquire into the above items.
Against the said preliminary decree the State, filed an appeal before the High Court.
At the instance of the State and on a reference by the Division Bench hearing the appeal, a Full Bench of the Court reconsidered the decision reported in ILR 29 Patna 790, by its judgment dated February 15, 1963 overruled the said decision, and declared that the Act was constitutional.
Thereafter the Division Bench finally heard the appeal and took the view that though it was open to the State to notify only a fraction of an estate under section 3(1) of the Act, yet, it was not absolved from the duty of taking appropriate steps for the preparation of suitable collection papers in respect of the notified shares in Tauzis No. 7/8 and 30.
The Division Bench held that the State was liable to compensate Choudhary for not preparing the collection papers in time; (i) that even though Choudhary had been told to file suits for rents in respect of unnotified share of the estate, the State were negligent in the matter of issuing certificates for recovery, some of which were later on struck off; (ii) that the material on 529 the record did not indicate that necessary steps were taken by the Collector with regard to pending suits and execution proceedings and there was every probability that loss had been suffered by Choudhary on account of the inaction or failure to continue pending proceedings which amounted to wilful default and gross negligence; (iii) that the State was liable to reimburse Choudhary to the extent of Rs. 2,000 levied as penalty for non payment of Agricultural Income Tax; (iv) in so far as the cost of management of Rs. 43,507 which was in the order of 30 per cent of the gross collection was concerned about a sum of Rs. 8,000 (=25% of the gross collection) had been incurred as cost of management in excess of what was authorised and that (Choudhary was entitled to it; and (v) that section 31 of the Act did not give protection in respect of loss which was caused by wilful default and gross negligence.
The appeal of the State and the cross objections of Choudhary regarding certain matters disallowed by the trial Court were, accordingly, dismissed.
Hence the State Appeal by certificate.
Allowing the appeal in part, the Court C ^ HELD 1.1 The Bihar State Management of Estates and Tenures Act, 1949 (Bihar Act XXI of 1949) was intended to bring about a reform in the land distribution system of Bihar for the general benefit of the community.
The taking over of the management and control over land was found to be necessary as a preliminary step towards the implementation of the Directive Principles of State Policy.
Therefore, section 31 of the Act provided that no suit or other legal proceeding would lie in any Court against the State Government or against any servant of the state Government or against any person acting under the orders of a servant of the State Government for or on account of or in respect of anything done or purporting to be done in good faith under the Act or in respect of any alleged neglect or omission to perform any duty devolving on the State Government or any of the officers subordinate to it or acting under the Act, or in respect of the exercise of or on failure to exercise any power conferred by the Act on the State Government or any officer subordinate to it and acting under the Act, except for the loss or the misapplication occasioned by the wilful default or gross negligence of any officer of the State Government.
Under section 4(22) of the Bihar and Orissa General Clauses Act, 1917, a thing shall be deemed to be done in 'good faith ' where it is in fact done honestly, whether it is done negligently or not.
[532E; 545C E] 1.2.
In the instant case, there was no proof of deliberate abuse of statutory power nor of usurpation of a power which the authorities knew that they did not possess.
It cannot be said that either the State Government or any of the officers acting under it in performance of their duties under the Act had not acted honestly either in issuing the Notification under section 3(1) of the Act, on November 19, 1949 by which only parts of Tauzis Nos. 7/8 and 30 had been notified or in not preparing separate collection statements before April 1950.
Further, the following facts, namely, (a) the respondent himself had acquired the said Tauzis in instalments; (b) as soon as the error was pointed out steps were taken by the Manager to get the unnotified share also notified and the Government issued a Notification accordingly within about four months; (c) on account of not handing over by the respondent even the consolidated collection statements by April 1950, the separate collection statements could not be got prepared by the Manager 530 By April 1950; (d) even according to the respondent himself if would have taken six months to prepare separate collection statements on the basis of the consolidated statements; and (e) unawareness of the State Government or any of its officers before hand that the respondent had maintained a consolidated statement of accounts on the date of issue of the first Notification in respect of a portion of Tauzis Nos. 718 and 30, constituted a good defence under section 31 of the Act against any claim based on any alleged neglect or omission since there was no proof of any wilful default or gross negligence on the part of the defendants.
[545F H; 546A B] 1.3.
In the instant case; (i) the claim for damages on all counts should fail except with regard to the claim for Rs. 8,000 which had been incurred as cost of management in excess of what was authorised by law.
With regard to the penalty of Rs. 2,000 imposed for non payment of the Agricultural Income Tax when once it was conceded that the first notification was not unauthorised one, the State could not be held liable for reimbursing the penalty of Rs. 2,000 to the respondent; (ii) It cannot be said that the Manager acted in excess of his powers vested under the Act of 1949 or mala fide.
Lack of bona fides cannot be attributed to him merely because some of the suits out of a large number of suits filed for recovery of the arrears due to the Estate, were dismissed on merits or on the ground that some of the persons sued were dead or not traceable.
In fact nearly, 7,000 certificate cases had to be filed in a short period and hurriedly on the basis of arrears list submitted by the respondent himself and by the middle of July 1950 the management of the state itself was relinquished.
Further if a certain share in a tauzi had not been notified on the first occasion it again cannot be said as having been done either mala fide or deliberately to harm the respondent.
The Manager therefore, could not be charged for wilful default or gross negligence in as much as in view of the definition of the expression 'tenure ' in section 2(k) of the, Act it was open to the government to notify even a fraction of a tenure under section 3(1) of the Act; (iii) Since the respondent himself failed to discharge his duty imposed the State cannot be made liable to any damages on the ground that the Manager had failed to get the collection papers prepared in respect of Tauzis Nos. 718 and 30 in time and thus caused loss to the respondent.
[546C; 544G; 542F G; 543A B]
|
Appeal No. 1769 of 1981 From the Judgment and Order dated 21.10.1980 of the Bombay High Court in Special Civil Appln.
No. 952 of 1980.
V.A. Bobde, S.D. Mudliar and A.G. Ratnaparkhi, for the Appellant.
U.R. Lalit, A.K. Sanghi, Prakash Khanzodi and Ravinder Bana for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
The story behind this appeal, though not very relevant, reveals interesting facts.
One N.H. Ray of Calcutta either abandoned or disappeared or died since about 1929 and his house being the premises in dispute in Nagpur lay abandoned and his heirs were not known, 404 letters written by authorities in Nagpur and by the tenants in Nagpur to the address 'N.H. Ray, Calcutta ' naturally remained unanswered.
It is alleged that a notice of sale of the premises in question was given in the name of one Tapan Roy in the local newspaper.
But one Bratindranath Roy de scribing himself to be the holder of the power of attorney on behalf of the heirs of late N.H. Ray is alleged to have sold the premises 'in question.
The Southern portion was sold to the respondent D.V. Hingwe and one M. Lapalikar became the allottee of the premises in question in 1960.
He wants to stay on in the premises.
The alleged transferee or alienee of the property from the alleged heirs of N.H. Ray fights this appeal in this Court after the allotment has been cancelled by the House Allotment Officer in favour of the appellant, Lapalikar.
But in this appeal this Court is concerned with a very short question whether the appellant was granted allotment as a government employee or evictee in terms of the Central Provinces and Berar Letting of House and Rent Control Order, 1949 (hereinafter called the said 'Rent Control Order ').
In order to appreciate the point, it is necessary to bear in mind that the appellant previously was residing in another house since 1941 at House No. 546 situated at Dhan toli area at Nagpur.
The landlord of the appellant sued for permission to evict the appellant from the said premises on the grounds of bona fide need of the landlord.
Such permis sion was granted against the appellant in respect of the said house on 23rd May, 1955.
The appeal in respect of the same was dismissed by an order dated 26th November, 1955.
Since then the appellant had been evicted from the premises which was in his occupation and has no residential accommo dation of his own.
He was a Central Government employee being an employee of the Post and Telegraph De partment of the Government of India.
He made an application for allotment of the premises in dispute, namely 406/1 in Nagpur under clause 24 A under the said Control Order.
It is necessary in order to appreciate the controversy in this appeal to refer to certain documents in this connec tion.
On or about 25th January, 1960, Shri Lapalikar, the appellant herein, wrote a letter to the Additional Collec tor, Nagpur.
In the said letter the appellant described himself after stating his name 'Clerk P.M.G. Office, Nagpur and a registered evictee '.
In the said letter, the appellant stated that one Dr. Shirali occupied the premises in ques tion which belonged to one Shri N.H. Ray.
As Shri Shirali proposed to vacate the premises in near future, he had agreed to let it out to the appellant in case permission was granted to him to that effect.
He, therefore, prayed that the said house might be allotted to him in his own name in view of his difficulties and priorities.
This document appears in the Paper Book as 'a copy '.
Thereafter on 27th January, 405 1960, the Additional Deputy Collector, Nagpur, communicated to the appellant at P.M.G. Office, Nagpur that the premises in question has been 'provisionally allotted to you under clause 24 A of the C.P. & Berar Letting of Houses and Rent Control Order 1948 subject to further orders by the Addi tional Deputy Collector, Nagpur '.
This is also a copy which appears in the Paper Book and which was produced by the appellant.
It is necessary to emphasise this aspect of the production by the appellant in order to consider a conten tion urged by Shri Lalit, the learned advocate on behalf of the appellant.
On the same date, intimation was given to one 'Shri N.H. Ray, Calcutta ' without any further address and intimation was sent that information had been received that the said house belonging to Shri N.H. Ray would fall vacant on or about 15th January.
He was further informed that the house was provisionally allotted to the appellant, P.M.G. Office, Nagpur.
He was informed that in case he had objection, he might submit the same within a fortnight thereof.
This is also a copy produced by the appellant.
Though not relevant for the present purpose, it makes interesting reading as to how Government functioned in the past.
It is not known whether it has improved since then.
It was addressed to one "Shri N.H. Ray, Calcutta '.
How a letter addressed in such manner could ever be conceived by anybody to be received by the addressee is beyond imagination.
It informs on 27th January, 1960 that the house would fall vacant 'on 15th instant '.
What happened to that letter no one knows.
There is a copy of Misc.
Document No. 33/a/71 (6 A) of 59 60.
This is regarding the allotment of the premises in question.
The Order sheet notes that this was an application from Dr. Shirali who proposed to let out the house belonging to Shri N.H. Ray of Calcutta.
She had proposed to let it out to the applicant, employee of the P.M.G. Office.
Further it was stated that he is an evictee.
This sentence was underlined.
The said document indicated that the officer concerned had directed registration of the case and for issue of a provi sional order of allotment and one copy to be addressed to the landlord on address given, another copy pasted on the house.
The copy of the landlord was addressed to N.H. Ray, Calcutta which was naturally returned to the sender for full address.
The order sheet further recorded that on 16th February, 1960, Dr. Shirali had informed that she had handed over the possession to the appellant as per orders of allot ment.
The order further recorded that no objection was received from landlord as invited.
To the same effect there is a copy of a letter from Dr. Shirali to the Additional Collector, Nagpur.
A copy of the certified copy of Record Room Register was also produced by the appellant.
The same reads as follows: 406 Application No. 3615/79 Office of the Collector, Nagpur Name of the Register Rent Controller, Nagpur.
Certified copy of Record Room Register Register No. 10 Form 'C ' Record from register for Kuliyat Papers (Rule 6).
Serial No. of major Name of Name of case Date of Date of number and minor case in with date deposit elimi in head.
Officer and purport of case nation Record regis of final or in re with Room ter.
der and abs cord initia Register tract of the room.
ls of order passed elimi in appeal or nating in revision, officer 1220 A 71(6 A) A.G. Applicant: 5.8.60 A. file 33/59 60 Nagpur Shri M.M. destro Lapalikar yed Subject: Allotment of house.
Order: 16.2.60 provisio nal allot ment con firmed.
Sd/illegible 4.2.67 (True translation) Advocate.
On 10th September, 1979, there was an application by one Shri Mude who is one of the respondents in this appeal stating that the appellant was a government servant and had retired two years back and should vacate the premises in dispute.
Written statement was filed on behalf of the appellant wherein he stated after dealing with the facts that the appellant was previously staying at premises No. 406/1 standing on plot number (Sheet No. 20 B) which was in occu pation of one Dr. Shirali with whom the appellant had inti mate relations and who was knowing the evictee position of the appellant herein non applicant therein stated that the appellant came to know from them that they wanted to shift to some other place for their family reasons.
So both of them had approached the Rent Controller, Nagpur and submit ted an application and thereafter the order had been made.
The contention of the appellant was that he was given the premises in question as an evictee though his description included that he was a government servant.
The short question that fails for consideration in this case, is, whether the summary procedure contemplated by clause 25 of the said Rent Control Order was applicable for obtaining possession from the appellant.
The appellant retired indisputably on 1st May, 1978 and the House Allot ment Officer was 407 moved by an application filed by one Vijay Mude, the re spondent herein for taking action under clause 25 of the said Rent Control Order.
The Additional District Magistrate and House Allotment Officer, Nagpur passed an order dated 13th March, 1980 and ordered the appellant to vacate the premises in question within one month from the date of the order.
The said order had been challenged by the appellant by a petition filed before.the High Court under Article 226 of the Constitution.
The High Court by its judgment and order upheld the eviction order.
The appellant challenged the same in this Court and special leave was sought for.
In the meantime the appellant was dispossessed by virtue of the order of eviction which was confirmed by the High Court.
In the Special Leave Peti tion on 16th December, 1980, this Court had directed resto ration of possession and had further directed the House Allotment Officer to make a report.
The House Allotment Officer has made a report.
Special Leave was granted and this appeal was expedited.
The documents annexed to the report of the House Allotment Officer are the same which have been noticed herein.
Clause 2(2) of the said Rent Control Order defines 'displaced person ' and 'evicted person ' is defined under sub clause (2 a) of clause 2 of the said Order.
There is no dispute that the appellant is and was an evicted person.
Clause 22 of the Order deals with the collection of informa tion and letting of accommodation.
Clause 23 is important and the relevant part of the same is as follows: "23.
(1) On receipt of the intimation in accordance with clause 22, the Collector may, within fifteen days from the date of receipt of the said intimation, order the landlord to let the vacant house to any person holding an office of profit under the Union or State Government or to any person holding a post under the Madhya Pradesh Electricity Board, or to a displaced person or to an evicted person and thereupon notwithstanding any agreement to, the contrary, the landlord shall let the house to such person and place him in posses sion thereof immediately, if it is vacant or as soon as it becomes vacant".
Clauses 24, 24 A and 24 B deal with the power to allot the house in the manner indicated in those clauses of the Order.
Clause 25 is relevant and is as follows.
The tenancy of any person holding an office of profit under the Union or State Government or to any person holding a post under the Madhya Pradesh Electricity Board and placed in 408 possession of a house by an order under clause 23 or 24 A shall terminate on the date of the transfer of, or gram of leave other than casual leave, to such person or on the date from which such person ceases to hold an office of profit under the Union or State Government or ceases to hold a post under the Madhya Pradesh Electricity Board, as the case may be, and the said person shall vacate the said house within seven days of such date and the landlord and tenant shall give the intima tion prescribed in clause 22 to the Collector in respect of such house; Provided that on sufficient cause being shown to the Collector he may, in his discretion, extend the tenancy by a period not exceeding four months.
The position is that the appellant is both an evictee as well as a Government servant of the category contemplated under clause 23.
The fact that the appellant is an evictee is indisputable.
The fact that the appellant is a government servant of the category contemplated by clause 23 is also indisputable.
The fact that the appellant has retired from government service is also indisputable.
The question, is, whether he could be evicted under the summary procedure contemplated under clause 25.
This will depend upon in what category or in what capacity the appellant was allotted the premises in question.
There is no evidence of the applica tion made by the appellant for the allotment.
No copy is available in the records and no copy was produced by the appellant.
The appellant has produced other documents rele vant to this issue as we have indicated hereinbefore.
Shri Bobde appearing for the appellant contends in this appeal that the appellant was allotted the premises in question as an evictee.
He draws our attention to the documents produced as we have indicated before.
He submits that the appellant was allotted the premises in question as an evictee.
He was not entitled to be evicted on his retirement.
On the other hand, Shri Lalit, advocate for the trans feree of the landlord as supported by Shri Bandra, advocate for the claimant respondent submits that from the order it was apparant that the premises in question was given as a government servant.
The priority in which the appellant was classed was because of his being a government servant.
He drew our attention to the relevant clauses of the Order.
On the scheme of the different clauses, we are of the opinion that it was only when a person was granted an allotment as a government servant, then and then only can clause 25 be invoked for his eviction.
In other cases, clause 13 will be relevant.
The summary procedure of clause 25 could only be available in case of recovery of possession given to a person as a government servant on his retirement.
Indeed the provisions are peculiar.
Even if a government servant goes on earned leave or is transferred even then he becomes disentitled to remain in possession of the premises in 409 question and would be liable to be evicted by virtue of clause 25 of the said Rent Control Order.
Being drastic in nature, therefore, one who seeks allottee 's eviction has to establish that the allotment to thee person whose eviction is sought was made in the capacity contemplated under clause 25.
Shri Lalit contends strenuously that the appellant had the chance to produce all the documents before the Allotment Officer, but he failed to do so.
He had another chance to produce the relevant documents after the Order of this Court when the matter was remanded back for fresh enquiry.
He failed to do so.
Shri Lalit contends that on this ground, adverse presumption should be drawn against the appellant as he has produced other documents in his custody.
It is undis puted that the original records are not available, and are destroyed.
There is nothing on evidence to show that the copy of the original application of allotment made by the appellant was still in possession of the appellant.
That is not in evidence.
It was submitted that he was given an opportunity to give evidence and as such subject himself to cross examination when there was an enquiry ordered by the Enquiry Officer directed by this Court, but the appellant failed to avail of that opportunity.
Therefore adverse presumption,was to be drawn against him.
It is not, however, possible to draw such adverse presumption in the facts and circumstances of this case.
No ground has been made for compelling the appellant to step into the witness box and subject himself to cross examination.
It cannot be presumed simply because some documents or some copies of some docu ments were in the custody of the party, all other documents or all copies relevant for the issue would be in the custody of that person and nonproduction of such documents cannot expose him open to adverse presumption.
Such argument cannot be sustained.
It was submitted before the High Court that clause 25 applies only to the premises which were let out to a person under clauses 23 and 24 A of the Control Order and where the allottee was an evictee, clause 25 had no application.
The High Court was of the view that it is clear from clause 25 that two conditions were required to be fulfilled before the said clause could be applied namely, (i) the allottee must be holding an office of profit under the Union or the State Government, or holding a post under the Madhya Pradesh Electricity Board, and (ii) that he was placed in possession of the premises under clause 23 or clause 24 A.
But it is clear that clause 25 read as a whole indicates clearly that the person against whom the clause would be operative must be an allottee of the premises allotted to him in his capac ity as a government servant and was placed in possession of the premises as a government servant.
We are unable to accept the High Court 's view, that the clause does not make any exception in case of a government servant who happened to be an evictee.
These clauses deal with three independent categories of persons and the summary procedure on proper construction of clause 25 was applicable only where allot ment is given to a tenant as a government servant.
The High Court was of the view that even if a government servant happened to be the evictee on his 410 retirement, clause 25 would operate.
We are unable to sus tain this reasoning.
If allotment was made to an allottee in his capacity as an evictee then clause 25, in our opinion, on a proper construction of the said clause, would have no application.
Further on a construction of the various docu ments and the evidence adduced in this appeal under these proceedings, it is clear that allotment was given to the appellant as an evictee who happened to be at the relevant time a government servant.
Therefore, on his retirement from the government service, he did not cease to be an evictee and did not come within the mischief of clause 25 of the said Control Order.
We are further of the opinion that even if allotment is made to a person who is both an evictee as well as a govern ment servant then if one of the grounds of the order namely, that he was a government servant ceases to exist on retire ment, the other reason operates i.e. he was an evictee and still continues to be an evictee then the allotment would continue.
See in this connection the observations of this Court in The State of Maharashtra & Anr.
vs B.K. Takkamore & Ors., ; Where this Court reiterated that an administrative or quasi judicial order based on several grounds, all taken together, could not be sustained if it was found that some of the grounds were non existent or irrelevant and there was nothing to show that the authority would have passed the Order on the basis of the other rele vant and existing grounds.
But, an Order based on several grounds some of which were found to be non existent or irrelevant could be sustained if the Court was satisfied that the authority would have passed the Order on the basis of other relevant and existing grounds and the exclusion of the irrelevant or non existent grounds would not have af fected the ultimate opinion or decision.
In this case even if it be held that it cannot be conclusively determined that the order of allotment was made in favour of the appellant only on the ground that the appellant was an evictee but it was made also on the ground that the appellant was a government servant, and after his retirement the other ground namely the allottee still being an evictee remained valid it can be sustained.
In the premises we are of the opinion that the High Court was in error and the appeal must be allowed.
We, however, make it quite clear that this order will not preju dice the rights, if any, of the respondents or whoever may be entitled to get possession to proceed under clause 13 of the said Control Order to evict the appellant.
In the premises this appeal is allowed.
The order and judgment of the High Court are set aside.
In the facts and circumstances of the case, we direct that the parties will pay and hear their own costs.
S.R. Appeal allowed.
| The appellant landlord instituted an eviction suit in 1970 against the respondent tenant on the ground of unlawful subletting.
The respondent had inherited the tenancy upon the death of his father in 1968.
The subletting was created, in 1952 during the life time of appellants father.
Neither the appellant, nor the respondent had any personal knowledge about the terms and conditions of the lease originally granted by the father of the appellant in favour of the father of the respondent.
The High Court, while dismissing the appeal of the appellant landlord, held that a tenant sought to be evicted on the ground of unlawful subletting under s.10(2)(ii)(a) of the Tamil Nadu Buildings (Lease and Rent control) Act, 1960 must himself have been guilty of the contravention and that the alleged contravention by his father when he was a tenant can be of no avail for evicting the tenant.
Dismissing the Appeal of the appellant landlord, this Court, HELD: 1(i) Section 10(2) of the Act opens with the words, "a landlord who seeks to evict his tenant" and pro vides that if the tenant has created a subtenancy without the written consent of the landlord, he will he liable to be evicted.
When the statute says the tenant who is sought to he evicted must he guilty of the contravention, the Court cannot say, "guilt of his predecessor in interest" will suffice.
[382C D] (ii) The flouting of the law, the sin under the Rent Act, must he the sin of the tenant sought to be evicted and not that of his father or predecessor in interest.
It being a penal provision in the sense that it visits the violator with the punishment of eviction, it must he strictly con strued, for it causes less misery to be sheltered in a jail, than to be shelterless without.
[382E] In the instant case, there is nothing on record to show that the subletting 380 which was made in 1952,18 years before the institution of the eviction suit in 1970, was in violation of the relevant provisions of law.
There is no evidence, direct or circum stantial, on the basis of which it can be said that the lease did not confer on the father of the respondent the right to create a sub tenancy, or that it was done without the written consent of the then landlord, the father of the appellant.
Under these circumstances, the appellant cannot successfully evict the respondent on the ground of having created an unlawful sub tenancy within the meaning of S.10(2)(ii)(a) of the Act.
[381G, 382A B]
|
N: Criminal.
Appeal No. 330 of 1980.
From the judgement and Order dated 3.4.1980 of the Madras High Court in Crl.
Appeal No. 360 of 1974.
Hardev Singh and Ms. Madhu Moolchandani for the Appellants.
V.C. Mahajan, B. Parthasarthi and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The appellant N.M. Parthasarathy is the sole proprietor of a firm called "Elector technik".
He was formerly working as Inspector of Industries.
He along with an Inspector of Industries, was prosecuted on the allegations that between February, 1967 and February, 1969 they entered into a criminal conspiracy to obtain Small Scale Industries Registration Certificate for additional lines of manufacture, Essentiality Certificate and import licences on false representations made to the Director of Industries, Assistant Director of Industries, Joint Chief Controller of Imports/Exports and the Iron and Steel Controller.
The first 251 charge framed against both of them was for an offence of conspiracy punishable under section 120 B read with section 420 IPC and section 5(1) (b) read with section 5(2) of the Prevention of Corruption Act, 1947.
Charges 2, 4 and 6 framed against him were for offence of cheating punishable under section 420 IPC.
Charges 3, 5 and 7 were framed against the second accused for abetment of cheating punishable under section 420 read with section 109 IPC.
The 8th charge was also against the second accused under section 5 (1) (b) read with section 5 (2) of the Prevention of Corruption Act, 1947.
The trial court acquitted both of them on all the charges.
The State went in appeal against the judgment of acquittal and the High Court on re appreciation of evidence set side the acquittal and convicted both of them on all the counts.
The appellant was sentenced to undergo rigorous imprisonment for two years under Section 120 B IPC and rigorous imprisonment for two years for each of the three counts of cheating under section 420 IPC.
The sentences were to run concurrently.
We have heard Mr. Hardev Singh, learned counsel for the appellant and Mr. V.C. Mahajan, Senior Advocate for the respondents.
Mr. Hardev Singh has taken us through the judgment of the trial court and that of the High Court.
Mr. Hardev Singh has primarily argued that the High Court has grossly erred in reversing the judgment of acquittal rendered by the trial court.
According to him even if two views were possible the High Court was not justified in taking a different view than the trial court and reversing the acquittal.
This precise argument was raised before the High Court on behalf of the appellant.
The High Court rejected the same as under: "In the circumstances, I am of the opinion that this is not a case where, on the evidence available on record, two conclusions are possible and therefore this Court could not interfere with the acquittal of the accused by the learned Special Judge.
I am of the opinion that only one conclusion is possible on the evidence on record and that it is that the accused are guilty of all the charges framed against them and that interference with the acquittal of the accused by the learned Special Judge is called for in this case.
" We are of the view that the High Court was justified in reaching the above conclusion.
The High Court examined the evidence on the record in detail and rightly came to the conclusion that the guilt against the appellant was established beyond reasonable doubt.
The High Court on re appreciation of the evidence, independently reached the following findings: 252 "Thus it is established by Exhibit D 36 as well as the evidence of P.Ws 3 and 6 that the first accused had only a single phase domestic supply of electricity at his premises in Katpadi Extension even in August, 1969, that he could not have used that supply of electricity validly for any non domestic purposes and that it would not have been possible to produce any industrial machinery with that single phase power.
" "The evidence of P.W.s 6, 13, 15 and 19 shows that the machinery found in the premises of Electro technic during their inspections were worth only about Rs. 9,200 or Rs. 10,000 and not of the value of Rs. 94,000 as represented by the first accused in the list submitted by him along with his application, Exhibit P 18." "It has already been found that with the 230 Volts domestic supply he could not have produced any of the new end products.
The additional machinery required for producing these new end products had not been installed in the first accused 's factory.
It is hardly likely that all the alleged additional machinery could have been installed in the factory whose dimensions are only 18 feet by 12 feet." "It is made clear by the evidence that the second accused had made false statements in Exhibit P 96 about the alleged installation of the additional items of machinery in the first accused 's factory.
For the reasons stated above I find that the prosecution has proved charges 2 and 3 satisfactorily, beyond all reasonable doubt." "The first accused has succeeded in obtaining the Essentiality Certificate, Exhibit P.5, by making these false representations and the 2nd accused has induced P.W.5 to recommend in Exhibit P.24 the issue of the Essentiality Certificate and P.W.12 to issue the Essentiality Certificate and Exhibit P 14 by making the false representations Exhibit P 22 and P 23, as in Exhibit P 19, which have been found to be false in the earlier part of his judgment.
Therefore, I find that the prosecution has proved these two charges 4 and 5 against the accused satisfactorily and beyond all reasonable doubt." "In the present case both the accused have acted in concert in the first accused obtaining the S.S.I. registration certificate, Exhibit P 20 as amended by Exhibit P 21, the Essentiality Certificate, Exhibit P 5 and the import licenses, Exhibits P 6 and P 7, and the second accused enabling him to obtain the 253 same by his recommendations, Exhibits P 19, P 22 and P 23 which contain false particulars.
This would show that both the accused have acted in concert for committing these offences and that they would not have done so if there had been no conspiracy.
In these circumstances I find that the prosecution has established the charge of conspiracy framed against both the accused satisfactorily and beyond reasonable doubt.
" We agree with the above quoted reasoning and the conclusions reached by the High Court.
We, therefore, uphold the conviction and sentence awarded by the High Court.
While upholding the judgment of the High Court, we are inclined to agree with the learned counsel for the appellant that this is fit case where benefit of section 360, Criminal Procedure Code be extended to the appellant.
The occurrence in this case relates to the period between February, 1967 and February, 1969.
The Special Judge, Madras by his judgment dated July 23, 1973 acquitted the appellant.
The High Court on April 3, 1980 reversed the trial court and convicted the appellant.
This Court granted bail to the appellant on April 29, 1980.
Mr. Hardev Singh has placed before us documents showing several achievements of the appellant in the industrial field since then.
The appellant 's industry has manufactured the largest Hot Air Kiln in India for Ministry of Railways, largest Degreasing plant for Nuclear Fuel Complex, Sintering Furnace for anti tank missiles and various other items for the Ministry of Defence and other Departments of the Government of India.
The appellant claims that he has set up 100 per cent export unit with Rs. 75 crores export per annum.
For all these reasons we are of the view that it is expedient that the appellant be released on probation.
We, therefore, direct that he be released on his entering into a bond to the satisfaction of the Special Court, Madras.
The Special Court shall pass an order in terms of Section 360, Criminal Procedure Code, 1973 to its satisfaction.
A copy of this order be sent to the Special Court, Madras immediately.
The appellant is directed to appear before the Special Court, Madras within two months from today to enable the Special Court, Madras to pass an order as directed by us.
In the event of appellant 's failure to present himself before the Special Court as directed he shall undergo the original sentence awarded by the High Court.
The appeal is disposed of in the above terms.
T.N.A Appeal disposed of.
| The respondent was the daughter of the original landlord who had let out the premises to the appellant on October 1, 1961.
She purchased the property from her father on June 27, 1964 and thus stepped into his shoes as the `landlord ' as defined under section 2 (e) of the Delhi Rent Control Act, 1958.
The respondent sought eviction of the appellant from the demised premises on the ground of personal bonafide requirement.
The appellant resisted the eviction petition on the grounds that the premises were not let out for residential purpose only but for commercial purpose also i.e. for keeping foreign students as paying guests, and that the respondent does not have a bonafide need or requirement as such.
Relying upon the Rent Note and the appellant 's letters dated October 7, 1961 and August 18, 1962 addressed to the respondent 's father, and the earlier proceedings between them for eviction of the appellant on the ground of sub letting the premises for commercial purpose, both the statutory authorities the Additional Rent Controller and the Rent Control Tribunal found that the premises which had also been used incidentally for commercial purposes so as to exclude the application of section 14(1) (e) read with the explanation thereto, and dismissed the respondent 's application for eviction.
473 This finding was reversed by the High Court in the respondent 's second appeal under Section 29 of the Act.
The High Court found that there was no evidence for the statutory authorities to come to the conclusion, which they did, as regards the premises having been used for commercial purpose.
The High Court accepted the appeal and set aside the judgment and order of the Rent Controller and the Rent Control Tribunal, and allowed the eviction application.
The tenant appealed to this Court by Special appeal.
On behalf of the respondent landlord it was submitted that even if the High Court was wrong in coming to the conclusion that there was no evidence about foreign students being lodged by the tenant, the mere fact that foreign students stayed as paying guests in the premises did not imply either that they lodged with the consent of the landlord or that such lodging amounted to a commercial use of the building, and that the High Court was right in saying that the ground contained in clause (e) of sub section (1) of section 14 was attracted.
Allowing the appeal, and setting aside the judgment of the High Court, and restoring the orders of the Additional Rent Controller and the Rent Control Tribunal, this Court, HELD: 1.
The finding of the High Court is unsustainable.
The High Court was not justified in saying that there was no evidence to hold that the premises were used for boarding and lodging foreign students.
The specific plea of the landlord in the earlier proceedings was that the tenant had sub let the premises for commercial purposes.
The tenant contended that she had never parted with her exclusive possession of any part of the premises and the foreign students who were lodging with her were her paying guests and were not her tenants.
The plea of sub tenancy raised by the landlord was thus rejected on the ground that those who lodged with her were not sub tenants but only paying guests.
[476 G H] 2.
The letters dated October 7, 1961 and August 18, 1962 clearly disclosed the fact that foreign students were lodged in the premises as the guests of the appellant.
The evidence let in by the appellant and not contradicted by the respondent clearly showed that apart from the appellant all the other inmates of the premises were foreign students staying with her as her paying guests.
The appellant testified that she earned her livelihood from the income she received as lodging fee from students who lodged with her, and 474 that is was out of that income that all her personal expenses including the rent payable by her for the premises had been met.
These are the findings of the two fact finding authorities, and those findings are based on oral and documentary evidence.
To have reversed those findings by the High Court in Second Appeal on the ground that they were perverse was totally uncalled for.
[477 A C] 3.
In the absence of any question of law, much less any substantial question of law, the High Court was not justified in reversing the concurrent findings of the statutory authorities.
[480 B] 4.
Clause (e) of section 14(1) of the Act is applicable only if the landlord is in a position to establish that the premises let for residential purposes are required bona fide by him for occupations as residence.
Assuming that the bona fide requirement of the landlord is established the landlord must still prove that the premises had been let for residential purposes.
The Explanation of clause (e) makes it clear that the words `premises let for residential purposes ' included any premises let for residential purposes but used incidentally, without the consent of the landlord, for commercial or other purposes.
The Explanation is attracted when : (1) the premises have been let for residential purposes, (ii) the premises have been used incidentally for commercial or other purposes,and (iii) the landlord has not given his consent for such incidental use for commercial or other purpose.
[478 D F] 5.
If the premises have never been used for any non residential purpose, the aid of the explanation is unnecessary to attract clause (e).
The Explanation is called in aid only where premises let for residential purpose have been used incidentally for commercial or other non residential purpose, but without the consent of the landlord.
[478 G] 6.
If the landlord is in a position to establish that the premises have been let for residential purposes and that he has never consented to the user of the premises for any other purpose, the mere fact that such premises have been incidentally used for commercial or other purposes would not change or affect the residential character of the premises.
[479 A] 7.
If the premises have been regularly and openly used for non residential purposes, the knowledge and consent of the landlord, unless proved to the contrary, are ordinarily presumed and in 475 that event the explanation would be of no avail to save the ground under clause (e).
[479 B] 8.
In the instant case, it is not disputed that the premises had been let for residential purposes, but it is also beyond doubt that to the knowledge of the landlord the premises have been regularly used by the tenant not only for her own residence but also for her foreign guests.
The landlord has as all material times known or is presumed to have known that foreign students have been staying with the appellant as her paying guests and that she has been ever since 1961 running a boarding house in the premises.
At no time did the landlord object to the user of the premises by the appellant for such purpose.
[479 C D] 9.
The continued user of the building ever since 1961 for the purpose of lodging paying guests shows that the respondent landlord and her father have not only been aware of such user of the building, but have also impliedly consented to such user.
This presumption is irresistible from the evidence on record.
Such user takes the premises in question out of the ambit of `premises let for residential purpose ' so as to exclude the ground contained in clause (e).
[479 E] Dr. Gopal Dass Verma vs Dr. S.K. Bhardwaj & Anr., ; ; Kartar Singh vs Chaman Lal & Ors., (SC) (1969) IV All India Rent Control Journal 349; Hobson vs Tulloch, [1898] 1 Chancery Division 424; Thorn & Ors.
vs Madden, [1925] All E.R.321 and Tandler vs Sproula , referred to.
|
minal Appeal No. 169 of 1959.
Appeal by special leave from the judgment and order dated March 27, 1958, of the Allahabad High Court in Criminal Appeal No. 785 of 1955.
972 Nuruddin Ahmad and Naunit Lal, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
December 7.
The Judgment of the Court was delivered by S.K. DAS, J.
This is an appeal by special leave from the judgment and order of the High Court of Judicature at Allahabad dated March 27, 1958, whereby the said High Court maintained the conviction of the appellant under section 5(2) of the Prevention of Corruption Act, 1947 (2 of 1947) but reduced the sentence of four years ' rigorous imprisonment passed on the appellant by the Special Judge, Kanpur, to two years ' rigorous imprisonment.
The short facts are these.
The appellant Surajpal Singh was employed in the Police Department of the Uttar Pradesh Government.
He started his service as a constable on a salary of Rs. 13 per month from August 1, 1930.
In 1946 his pay was increased to Rs. 46 per month.
He was appointed a Head constable on a salary of Rs. 50 per month in 1947.
He officiated as a Sub Inspector of Police sometime in 1948 and 1949 on a salary of Rs. 150 per month.
On March 1, 1949, he was reverted to his post of Head constable.
Between the dates February 27, 1951, and September 9, 1952, he was posted as a Head constable attached to the Sadar Malkhana, Kanpur.
The charge against him was that in that capacity he dishonestly or fraudulently misappropriated or otherwise converted to his own use many articles, principally those seized in connection with excise offences kept in deposit in the said Malkhana.
These articles included opium, bottles of liquor etc.
The charge further stated that a sum of Rs. 9,284 1 0 was recovered on a search of his house on September 9 and 10, 1952 and this amount was disproportionate to the known sources of income of the appellant.
There was an allegation by the prosecution that the acts of dishonest misappropriation etc. were committed by the appellant in conspiracy with two other persons called Bhagawat Singh and Gulab Singh.
Therefore, the charges against the 973 appellant were (1) for the offence of conspiracy under section 120B of the Indian Penal Code; (2) for the offence under section 5(1)(c) of the Prevention of Corruption Act, 1947, for the acts of dishonest misappropriation or user, read with section 5(2) of the said Act; and (3) for an offence under section 465 of the Indian Penal Code in respect of a particular entry said to have been forged in the Register of Properties kept in the Sadar Malkhana.
The learned Special Judge who tried the appellant Bhagawat Singh and Gulab Singh recorded an order of acquittal in respect of the latter two persons.
As to the appellant, he was also acquitted of all the charges except the charge under section 5(2) of the Prevention of Corruption Act.
On this charge the learned Special Judge recorded an order of conviction, but this was based on the sole ground that the appellant had failed to account satisfactorily for the possession of Rs. 9,284 1 0 which, according to the finding of the learned Special Judge, was disproportionate to the known sources of income of the appellant.
It should be noted here that the learned Special Judge held the appellant not guilty of the various acts of dishonest misappropriation or user alleged against him in respect of the properties kept in the Sadar Malkhana.
In his appeal to the High Court the appellant urged various grounds, one of which was that he could not be convicted on the rule of presumption laid down in sub section
(3) of section 5 of the Prevention of Corruption Act, 1947, when on the only charge of criminal misconduct alleged under section 5(1)(c) of the said Act he had been found not guilty.
The High Court repelled this contention and upheld the conviction of the appellant but reduced the sentence.
The principal question before us is whether in the circumstances of this case, the conviction of the appellant on the charge under sub section
(2) of section 5 of the Prevention of Corruption Act, 1947, by invoking the rule of presumption as laid down in sub section
(3) of that section, is correct.
It is convenient to read here section 5 of the Prevention 123 974 of Corruption Act, 1947, in so far as it is relevant for our purpose. "section 5(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (a)if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the Indian Penal Code, or (b)if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or (c)if he dishonestly or fraudulently misappropriated or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or (d)if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
(2)Any public servant who commits criminal misconduct in the discharge of his duty shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine: Provided that the Court may, for any special reasons recorded in writing ' impose a sentence of imprisonment of less than one year.
(2A). . . . . . . . . . (3) In any trial of an offence punishable under sub section (2) the fact that the accused person or any 975 other person on his behalf is in possession, for which the accused person cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income may be proved, and on such proof the court shall presume, unless the contrary is proved, that the accused person is guilty of criminal misconduct in the discharge of his official duty and his conviction therefor shall not be invalid by reason only that it is based solely on such pre sumption.
" Now, learned Counsel for the appellant has put his argument on the principal question in the following way: he has submitted that the is not in a position in an appeal by special leave to go behind the finding of fact arrived at by the courts below.
The appellant, it appears, gave some explanation with regard to the possession of Rs. 9,284 1 0.
That explanation was not, however, accepted by the courts below.
Learned Counsel has submitted that he does not wish to go behind that finding of fact.
He has submitted, how ever, that the scheme of section 5 of the Prevention of Corruption Act, 1947 is this: sub section
(1) defines the offence of criminal misconduct in the discharge of his duties by a public servant; the offence can be one or more of four categories mentioned in cls.
(a), (b), (c) and (d): sub section
(2) is the penal section which states the punishment for the offence of criminal misconduct; and sub section
(3) lays down a rule of presumption and states that no conviction for the offence shall be invalid by reason only that it is based solely on such presumption.
Learned Counsel has pointed out, rightly in our opinion, that the charge against the appellant in the present case referred only to criminal misconduct in the discharge of his duty by a public servant of the nature mentioned in cl.
(c) of sub section
In other words, the charge against the appellant was that he had dishonestly or fraudulently misappropriated or otherwise converted for his own use property entrusted to him etc.
It was open to the learned Special Judge to have convicted the appellant of that offence by invoking the rule of presumption laid down in sub section
He did not, however, do so.
On the 976 contrary, he acquitted the appellant on that charge.
Therefore, learned Counsel has submitted that by calling in aid the rule of presumption laid down in sub section
(3), the appellant could not be found guilty of any other type of criminal misconduct referred to in cls.
(a), (b) or (d) of sub section
(1) in respect of which there was no charge against the appellant.
We consider that the above argument of learned Counsel for the appellant is correct and must be, accepted.
This Court pointed out in C. section D. Swamy vs The State (1) that sub section
(3) of section 5 of the Prevention of Corruption Act, 1947 does not create a new offence but only lays down a rule of evidence which empowers the Court to presume the guilt of the accused in certain circumstances, contrary to the well known principle of Criminal law that the burden of proof is always on the prosecution and never shifts on to the accused person.
In Swamy 's case there were charges for the offence of criminal misconduct under two heads, cl.
(a) and cl.
The trial court held the accused person ' in that case not guilty of the offence under cl.
(a) but guilty of the offence under cl.
(d) by invoking the rule of presumption laid down in sub section
(3) of section 5.
The distinction between that case and the case under our consideration is this: in Swamy 's case there were two charges either of which could be founded on the rule of presumption laid down in sub section
(3); but in our case there is only one charge of criminal misconduct of which the appellant has been acquitted; therefore, there is no other charge which can be founded on the rule of presumption referred to in sub section
This is the difficulty with which the respondent is faced in the present case.
It appears to us that the learned Special Judge and the High Court proceeded wrongly on the footing as though sub section
(2) or sub section
(3) of section 5 of the Act creates an offence.
The offence which is punished under sub section
(2) or can be founded on the rule of presumption laid down in sub section
(3) must be the offence of criminal misconduct of one or more of the categories mentioned in cls.
(a) to (d) of sub section
In the case before us the only category which was alleged against the appellant was that of category (c), (1) ; 977 namely, dishonest or fraudulent misappropriation etc.
That charge having failed, there was no other charge which could be founded on the rule of presumption laid down in sub section
Learned Counsel for the respondent State has contended before us that it was open to the appellate Court to affirm the conviction of the appellant under sub section
(2) of section 5 by holding him guilty of the offence of criminal misconduct of the category mentioned in cl.
(a) or cl.
(d) of sub section
We are unable to accept this contention as correct.
The prosecution never alleged that the sum of Rs. 9,284 1 0 was the result of the appellant habitually accepting or obtaining illegal gratification etc.
The prosecution case was that the sum of Rs. 9,284 1 0 was the result of the dishonest user of property which was entrusted with the appellant.
It is not open to the appellate Court to affirm the conviction of the Appellant on an entirely new case never suggested against the appellant at any earlier stage.
It is unfortunate that in this case the courts below did not choose to rely on the rule of presumption laid down in sub section (3) with reference to the charge under cl.
(c) of sub section
(1) of section 5.
But that misfortune cannot now be repaired by evolving out of a vacuum as it were a new case against the appellant based on cl.
(a) or cl.
(d) of sub section
(1) of section 5 in support of which no facts were ever alleged or suggested.
For the reasons given above, we allow this appeal and set aside the conviction and sentence passed against the appellant.
Appeal allowed.
| The appellant was a Head Constable attached to a malkhana where articles seized in connection with excise offences were kept in deposit.
The appellant was charged under section 5(1)(c) read with section 5(2), Prevention of Corruption Act, 1947, in that he had dishonestly or fraudulently misappropriated or otherwise converted to his use these articles; the charge further stated that a sum of Rs. 9,284 1 0 was recovered from him which was disproportionate to his known sources of income.
He was acquitted of the charge under section 5(1)(c) but was convicted under section 5(2) on the ground that he had failed to account satisfactorily for the possession of Rs. 9,284 1 0 which was disproportionate to his known sources of income.
Held, that the conviction of the appellant under section 5(2) of the Prevention of Corruption Act, 1947, was illegal.
The only charge against the appellant was of criminal misconduct under section 5(1)(c) of the Act for dishonestly or fraudulently misappropriating property entrusted to him and of this charge he could have been convicted by invoking the rule of presumption under section 5(3).
But since this was not done and he was acquitted of that charge, he could not be convicted of criminal misconduct referred to in cls.
(a), (b) or (d) of section 5(1) for which he had not been charged.
The Courts below had proceeded wrongly on the footing as though sub section
(2) or sub section
(3) of section 5 created an offence; the offence which was punishable under section 5 (2) or which could be founded on the rule of presumption under section 5(3) was the offence of criminal misconduct of one or more of the cate gories mentioned in cls.
(a) to (d) of sub section
(1) of S 5.
C.S. D. Swamy vs The State; , , refer red to.
|
Special Leave Petition (Civil) No. 9096 of 1988.
From the Judgment and Order dated 2.12.87 of the Kerala High Court in W.A. No. 933 of 1987.
P.S. Potti and E.M. Anam for the Petitioner.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
A piece of land measuring ten and a half cents situated at Kozhippathi Village of Chittur Taluk, Palghat District, State of Kerala originally belonged to Indrani, wife of the petitioner and it now belongs to the petitioner.
Under a preliminary notification issued under section 3(1) of the Kerala Land Acquisition Act on 24.2.1981 the said piece of land along with some other lands was PG NO 650 proposed to be acquired for a certain public purpose.
Both Indrani and the petitioner filed objections to the proposed acquisition.
After overruling the objections the State Government published a declaration under section 6 of the Kerala Land Acquisition Act on 19.1.1984.
On 24.9.1984 the Land Acquisition (Amendment) Act, 1984 passed by Parliament came into force in the State of Kerala and some other parts of India to which it applies.
By section 9 of the Land Acquisition (Amendment) Act, 1984 a new section, i.e. section 11 A was introduced into the Land Acquisition Act, 1894 (hereinafter referred to as `the Act ') which reads thus: "11 A. Period within which an award shall be made The Collector shall make an award under section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceedings for the acquisition of the land shall lapse: Provided that in a case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act, 1984, the award shall be made within a period of two years from such commencement.
Explanation In computing the period of two years referred to in this section, the period during which any action or proceeding to be taken in pursuance of the said declaration is stayed by an order of a Court shall be excluded.
" The Land Acquisition Officer, i.e., the Sub Collector of Palghat who was exercising the powers of the Collector under the Act made an award in respect of the land of the Petitioner on 23.9.1986 which was filed in the office of the Collector on 24.9.1986.
The notice of the award was served on the petitioner on 30.9.1986.
The petitioner and his wife challenged the acquisition proceeding in a petition filed under Article 226 of the Constitution of India before the High Court of Kerala in O.P. No. 1536 of 1987.
The learned Single Judge, who heard the said petition overruled the objections of the petitioner and his wife and dismissed the petition.
Aggrieved by the decision of the learned Single Judge the petitioner and his wife preferred an appeal before the Division Bench of the High Court in W.A. No. 933 of 1987.
The said Writ Appeal was dismissed by the Division Bench of the Kerala High Court.
Aggrieved by the decision of PG NO 651 the Division Bench the petitioner has filed this petition under Article 136 of the Constitution of India seeking special leave to appeal against the judgments of the Division Bench of the High Court.
The two grounds on which the acquisition proceeding was challenged by the petitioner and his wife before the High Court were: (i) that the award not having been made within a period of two years from the date of the commencement of the Land Acquisition (Amendment) Act, 1984, that is, 24.9.1984, as required by the proviso to section 11 A of the Act, the acquisition proceeding should be deemed to have lapsed; and (ii) that the land acquisition proceeding was liable to be quashed on the ground that there was inordinate delay in making the award.
The contention of the petitioner and his wife before the High Court was that the notice of the award having been served on him on 30th September, 1986 it must be held that the award was actually made on 30th September, 1986 and since more than two years had elapsed from 24.9.1984, from the date on which the Land Acquisition (Amendment) Act, 1984 came into force by the time the notice of award was served on him, the acquisition proceeding should be declared as having lapsed by virtue of the proviso to section 11 A of the Act.
In support of his contention the petitioner relied upon a decision of this Court in Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer and Another, [1962] 1 S.C.R. 676 in which this Court had taken the view that for purposes of calculating the period of limitation prescribed for making an application requesting the Collector to refer the question relating to the valuation of the land acquired under the Act to the Civil Court under section 18 of the Act, the date on which the notice of the award was served on the owner of the land should be treated as the date of the award and that the period of limitation should be counted from the date of the service of the said notice.
Both the learned Single Judge and the Division Bench of the High Court have declined to accept the said contention and we think rightly.
Before the insertion of the new section.
i.e., section 11 A of the Act there was no provision corresponding to it in the Act which provided for the period within which an award should be passed by the Land Acquisition Officer, that is, the Collector under the Act.
Since in a large number of cases there used to be abnormal delay in making the award, Parliament stepped in and introduced section Il A to the Act which is set out above.
In the Statement of Objects and Reasons attached to the Bill introducing the Land Acquisition (Amendment) Act, PG NO 652 1984 by which section 11 A was introduced into the Act it was stated that "the pendency of acquisition proceedings for long periods often causes hardship to the affected parties and renders unrealistic the scale of compensation offered to them".
It was further stated in it that "it is proposed to provide for a period of two years from the date of publication of the declaration under section 6 of the Act within which the Collector should make his award under the Act.
If no award is made within that period, the entire proceedings for the acquisition of the land would lapse".
Pursuant to the above object section 11 A of the Act was enacted.
It provides that the Collector shall make an award under section 11 of the Act within a period of two years from the date of the publication of the declaration and if no award is made within that period the entire proceedings for the acquisition of the land shall lapse.
In the case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act, 1984 the award shall be made within two years from such commencement.
We are not concerned with the rest of the provisions of section 11 A of the Act in this case.
The crucial words which require to be interpreted are "the Collector shall make an award" appearing in section 11 A and the words `the award shall be made ' in the proviso to section 11 A.
The statute prescribes the maximum period of two years for making an award from the date of the publication of the declaration under section 6 of the Act and further attaches a condition that if the award is not made within the said period the proceeding for the acquisition of the land shall lapse.
Similarly in the case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act l984 the award shall be made within two years from such commencement and if the award is not so made the proceeding for acquisition shall lapse.
Thus it is seen that the consequence of not making an award within the period of two years from the date of the publication of the declaration or from the date of the commencement of the Act, as the case may be, is that the entire project for which the land is acquired will have to be abandoned or if it is intended to proceed with the project for which the land had been originally notified for acquisition it would become necessary for the Government to restart the proceedings once again with the publication of a fresh preliminary notification under section 4 of the Act or the corresponding provision in any local statute in force in a State.
If the date of the communication of the notice of the award to the person interested in the land is treated as the date of making the award then the maximum period prescribed under section 11 A of the Act for making the award would get reduced by the period for serving the notice of the award on the owner of the land.
Such maximum period may vary from one PG NO 653 case to another.
Even in the same land acquisition case if a notice of the award is to be served on two or more persons interested in the land the maximum period for making the award may vary from person to person interested in the property depending upon the date of service of notice of the award on each one of them.
If the person interested in the land is an unwilling person who is interested in defeating the land acquisition proceeding it is likely that it may not be possible to serve him with the notice of the award at all within the prescribed time and if he can avoid the service of said notice until the period of two years is over from the date of the publication of the declaration under section 6 of the Act or the date of commencement of the Land Acquisition (Amendment) Act, 1984, as the case may be insofar as his interest in the land is concerned, the proceedings for the acquisition would lapse thus affecting seriously the public interest.
It would also lead to absurd and inconvenient results since the acquisition proceeding may be valid against some persons and may become invalid in the case of some others.
It is no doubt true that in Raja Harish Chandra 's case (supra) while construing section 18 of the Act this Court held by giving an extended meaning that the date of the award for purposes of calculating the period of limitation should be the date on which the notice of the award is served on the owner of the land.
The said interpretation was given by this Court on the principle that if a person is given a right to resort to a remedy to get rid of an adverse order within a prescribed time limitation should not be computed from a date earlier than that on which the party aggrieved actually knew of the order or had an opportunity of knowing the order and, therefore, must be presumed to have the knowledge of the order.
Under section 18 of the Act the person on whom the notice of the award is served has to make an application before the Land Acquisition Officer within six weeks from the date of the award if such person was present or represented before the Land Acquisition Officer at the time when he made his award and in other cases within six weeks of the receipt of the notice of the Collector under section 12(2) or within six months from the date of the award whichever expires first.
In a case where a person interested in the land is not present at the time when the award is made by the Collector he is entitled to make an application under section 18 of the Act seeking a reference of the case to the Civil Court for the determination of the proper compensation within six weeks of the receipt of the notice from the Collector under section 12(2) of the Act or within six months from the date of the Collector 's date whichever expires first.
Since the process of service of notice issued under section 12(2) would occupy PG NO 654 some time this Court was of the view that it would lead to injustice if the period of limitation prescribed by section 18 of the Act was computed from the date on which the award was actually made and not from the date on which the notice under section 12(2) of the Act was served on the person interested in the land as it would result in the reduction of the period of six weeks by the time required for serving the notice on the person interested in the land.
There is no doubt a difference between the meaning given by this Court in Raja Harish Chandra 's case (supra) to the words "date of the award" in section 18 of the Act and the interpretation of the High Court of the words `the Collector shall make an award ' or `the award shall be made ' in section 11 A of the Act but such a distinction had to be maintained because the object of and the reason for prescribing the period of limitation under section 11 A of the Act are different from the object of and the reason for prescribing the period of limitation under section 18 of the Act and the consequences that would flow from the violation of the rule of limitation in the two cases are also different.
In the former case the period of limitation is prescribed for preventing official delay in making the award and the consequent adverse effect on the person or persons interested in the land but in the latter case the period of limitation is prescribed for providing a remedy to the persons whose lands are acquired to seek a reference to the civil court for the determination of proper and just compensation.
Secondly, while in the former case violation of the rule of limitation would result in the acquisition proceeding becoming ineffective, in the latter case such a violation will not have any effect on the validity of acquisition proceeding.
Thirdly, while in the former case the period of limitation prescribed represents the outer limit within which an award can be made in the latter case we are concerned with the point of time at which the time to make an application under section 18 of the Act will begin to run against the person interested in the land.
The provisions of section 11 A have to be construed bearing in mind these points of difference.
It is well known that the meaning to be assigned to the words in a statute depends upon the context in which they are found and the purpose behind them.
Under section 11 A of the Act the Collector is empowered to make an award before the expiry of the period of two years from the date of the publication of the declaration under section 6 of the Act and in a case where the said declaration has been published before the commencement of the Land Acquisition (Amendment) Act, 1984 before the expiry of the period of two years from the date of its commencement.
If an award is not made within the prescribed period of two years in either case, it is open to the person PG NO 655 interested in the land to approach the Collector and tell him that the acquisition proceeding should be dropped unless the Collector is able to produce before him an award made by him within the period of two years.
He may also in such a case question the continuance of the acquisition proceeding in court.
Thus no prejudice will be caused to the person interested in the land.
At the same time it would not be open to a person interested in the land to get rid of the acquisition of proceeding by avoiding service of notice issued by the Collector within the prescribed period.
We are of the view that under section 11 A of the Act the words "the Collector shall make an award. .within a period of two years from the date of the publication of the declaration" mean that the Collector is empowered to make an award till the expiry of the last date of the period of two years irrespective of the date on which the notice of the award is served upon the persons interested in the land.
`To make an award ' in this section means `sign the award '.
That is the ordinary meaning to be ascribed to the words `to make an award '.
An extended or a different meaning assigned to the words `the date of the award ' by this court in Raja Harish Chandra 's case (supra) cannot be applied in this case since such an extended or different meaning is neither warranted by equity nor will it advance the object of the statute.
Similarly under the proviso to section 11 A of the Collector, the Collector is empowered to make an award within two years from the date of commencement of the Land Acquisition (Amendment) Act, 1984 irrespective of the date on which the notice of award is served on the person concerned.
We do not find any analogy between section 11 A and section 18 of the Act insofar as the above question is concerned.
The High Court was, therefore, right in rejecting the above contention of the petitioner.
We find very little substance in the other contention of the petitioner, namely, that the award was liable to be quashed on the ground of inordinate delay since it had been made at the end of two years from the date of commencement of the Land Acquisition (Amendment) Act, 1984.
While we expect an award to be passed by the Collector as early as possible without delaying till the close of the period of two years prescribed by section 11 A of the Act, we do not see any good reason to set aside a proceeding for acquisition on the ground of delay by applying our own standard of speed in the matter of making awards even where the period occupied is less than two years from the date of publication of the declaration under section 6 of the Act as such an approach may drive the Collector to make awards without giving adequate time to the claimants to adduce evidence in support of the valuation of the property PG NO 656 proposed to be acquired and without giving sufficient consideration to the material placed before him.
It would be safer in such cases to rely upon the statute for guidance as regards the maximum time that can be taken to make an award, instead of proceeding to strike down acquisition proceedings on the ground of delay in making the awards by applying varying standards to different cases even though the maximum time of two years has not been exceeded.
The very fact that section 11 A has prescribed the period of two years from the date of the commencement of the Land Acquisition (Amendment) Act, 1984 as the maximum period within which the award can be made suggests that the time taken by the Land Acquisition Officer in this case to make the award cannot be considered to be fatal to the acquisition proceeding.
We, therefore, affirm the decision of the High Court and reject this Special Leave Petition.
R.S.S. Petition dismissed.
| The Kerala State Government, after completion of preliminary steps, published a declaration on 18.1.1984 concerning the acquisition of petitioner 's land for a public purpose.
On 24.9.1984 the Land Acquisition (Amendment) Act, 1984 came into force whereby section 11 A was introduced into the Land Acquisition Act, 1894.
Section 11 A provided that the Collector shall make an award under section 11 of the Act within a period of two years from the date of publication of the declaration, and in the case where the said declaration had been published before the commencement of the Land Acquisition (Amendment) Act, 1984 within two years from such commencement.
The Collector made the award on 23.9.1986.
The notice of the award was served on the petitioner on 30.9.1986.
The petitioner challenged the award before the High Court of Kerala on the grounds (1) that the notice of the award having been served on 30.9.1986, the award was not made within the prescribed period of two years, and (ii) that there was inordinate delay in making the award.
Both the writ petition and the writ appeal were dismissed by the High Court.
Dismissing the special leave petition, it was, HELD: (1) In section 11 A the words "the Collector shall make an award within a period of two years from the date of the publication of the declaration" mean that the Collector is empowered to make an award till the expiry of the last date of the period of two years irrespective of he date on which the notice of the award is served upon the persons interested in the land.
`To make an award ' in this section PG NO 648 PG NO 649 means `sign the award '.
That is the ordinary meaning to be ascribed to the words `to make an award '.
[655C D] (2) It is well known that the meaning to be assigned to the words in a statute depends upon the context in which they are found and the purpose behind them.
(3) The object of and the reason for prescribing the period of limitation under section 11 A are different from the object of and the reason for prescribing the period of limitation under section 18 of the Act and the consequences that would flow from the violation of the rule of limitation in the two cases are also different.
There is no analogy between section 11 A and section 18 of the Act insofar as the above question is concerned.
[654C D; 655E] (4) It would be safer in such cases to rely upon the statute for guidance as regards the maximum time that can be taken to make an award, instead of proceeding to strike down acquisition proceedings on the ground of delay in making the award by applying varying standards to different cases even though the maximum time of two years has not been exceeded.
The time taken by the Land Acquisition Officer in this case to make the award cannot be considered to be fatal to the acquisition proceeding.
[656B C] Raja Harish Chandra Raj Singh vs The Deputy Land Acquisition Officer, [1962] 1 S.C.R. 676, distinguished.
|
vil Appeal Nos.
2839 40 of 1989 etc.
From the Judgment and Order dated 6.12.
1984 of the Delhi High Court in R.F.A. Nos. 113 and 114 of 1968.
K. Parasaran, Attorney General, T.S. Krishnamurthy Iyer, B.R.L. Iyengar, M.S. Gujaral, F.S. Nariman, A.K. Ganguli, K. Swamy, C.V. Subba Rao, R.D. Agrawala, P. Parmeshwaran, O.P. Sharma, R.C. Gubrele, K.R. Gupta, R.K. Sharma, K.L. Rathee, Chandulal Verma, Subhash Mittal, section Balakrishnan, N.B. Sinha, K.K. Gupta, Sanjiv B. Sinha, M.M. Kashyap, P.C. Khunger, Swaraj 321 Kaushal, Pankaj Kalra, S.K. Bagga, Ravinder Narain, Sumeet Kachwala, section Sukumaran, K.R. Nagaraja, S.S. Javali, Ms. Lira Goswami, D.K. Das, B.P. Singh, Ranjit Kumar, Santosh Hegde, M.N. Shroff, P.N. Misra, D.C. Taneja, P.K. Jena, A.K. Sanghi and M. Veerappa for the appearing parties.
The Judgment of the Court was delivered by PATHAK, CJ.
The question of law referred to us for decision in these cases is: "Whether under the Land Acquisition Act, 1894 as amended by the Land Acquisition (Amendment) Act, 1984 the claimants are entitled to sola tium at 30 per cent of the market value irre spective of the dates on which the acquisition proceedings were initiated or the dates on which the award had been passed"? It would suffice if we briefly refer to the facts in the Civil Appeals arising out of Special Leave Petitions Nos.
8194 8195 of 1985: Union of India & Another vs Raghubir Singh.
The land belonging to the respondents in village Dhaka was taken by compulsory acquisition initiated by a notifica tion under section 4 of the Land Acquisition Act, 1894 issued on 13 November, 1959.
The award with regard to compensation was made by the Collector on 30 March, 1963.
A reference under section 18 of the Act was disposed of by the Additional District Judge on 10 June, 1968.
He enhanced the compensation.
The respondents preferred an appeal to the High Court claiming further compensation.
During the pendency of the appeal the Land Acquisition (Amendment) Bill 1982 was introduced in Parliament on 30 April, 1982, and became law as the Land Acquisition (Amendment) Act, 1984 when it received the assent of the President on 24 September, 1984.
The High Court disposed of the appeal by its Judgment and Order dated 6 December, 1984.
While it raised the rate of compensation, it also raised the rate of interest payable on the compensa tion, and taking into account the change in the law effected by the Land Acquisition (Amendment) Act, 1984 (referred to hereinafter as "the Amendment Act") it awarded solatium at 30 per cent of the market value.
The Judgment and Order of the High Court is the subject of these appeals.
When these cases came up before a Bench of two learned Judges 322 (E.S. Venkataramiah and R.B. Misra, JJ.) on 23 September, 1985, they referred to two earlier decisions of this Court and expressed the view that the question set forth above required re examination by a larger Bench of five Judges.
It was further directed that the other questions involved in the petitions would be considered after the aforesaid ques tion had been resolved by the larger Bench.
The two deci sions referred to in the Order of the learned Judges are K. Kamalajammanniavaru (dead) by Lrs.
vs Special Land Acquisi tion Officer, decided by O. Chinnappa Reddy and Sabyasachi Mukharji, JJ.
on 14 February, 1985 and Bhag Singh and Ors.
vs Union Territory of Chandigarh, ; decided by P.N. Bhagwati, C.J., A.N. Sen and D.P. Madon, JJ.
on 14 August, 1985.
Solatium is awarded under sub section
(2) of section 23 of the Land Acquisition Act.
Before the Amendment Act was enacted the sub section provided for solatium at 15 per cent of the market value.
By the change introduced by the Amendment Act the amount has been raised to 30 per cent of the market value.
Sub section
(2) of section 30 of the Amendment Act specifies the category of cases to which the amended rate of solatium is attracted.
In K. Kamalajammanniavaru, (supra), the two learned Judges held that sub section
(2) of section 30 referred to orders made by the High Court or the Supreme Court in ap peals against an award made between 30 April, 1982 and 22 September, 1984, and that therefore solatium at 30 per cent alone pursuant to sub section
(2) of section 30 had to be awarded in such cases only.
In Bhag Singh (supra), however, the three learned Judges held that sub section
(2) of section 30 referred to proceedings relating to compensation pending on 30 April, 1982 or filed subsequent to that date, whether before the Collector or before the Court or the High Court or the Supreme Court, even if they had finally terminated before the enactment of the Amending Act.
In taking that view they overruled K. Kamalajammanniavaru, (supra) and approved of the opinion expressed in another case, State of Punjab vs Mohinder Singh and another, decided by section Murtaza Fazal Ali, A. Varadarajan and Ranganath Misra, JJ.
on 1 May, 1985.
At the outset, a preliminary objection has been raised by Shri B.R.L. Iyengar to the validity of the reference of these cases to a larger Bench.
He contends that the mere circumstance that a Bench of two learned Judges finds itself in doubt about the correctness of the view taken by a Bench of three learned Judges should not provide reason for refer ring the matter to a larger Bench.
The preliminary objection raised by Shri Iyengar has been vigorously resisted by the 323 appellants.
Having regard to the submissions made before us, we think it necessary to lay down the law on the point.
India is governed by a judicial system identified by a hierarchy of courts, where the doctrine of binding precedent is a cardinal feature of its jurisprudence.
It used to be disputed that Judges make law.
Today, it is no longer a matter of doubt that a substantial volume of the law govern ing the lives of citizens and regulating the functions of the State flows from the decisions of the superior courts.
"There was a time: ' observed Lord Reid, "when it was thought almost indecent to suggest that Judges make law They only declare it . .
But we do not believe in fairy tales any more "The Judge as law Maker" p. 22.
" In countries such as the United Kingdom, where Parliament as the legislative organ is supreme and stands at the apex of the constitution al structure of the State, the role played by judicial law making is limited.
In the first place the function of the courts is restricted to the interpretation of laws made by Parliament, and the courts have no power to question the validity of Parliamentary statutes, the Diceyan dictum holding true that the British Parliament is paramount and all powerful.
In the second place, the law enunciated in every decision of the courts in England can be superseded by an Act of Parliament.
As Cockburn CJ.
observed in Exp.
Canon Selwyn, "There is no judicial body in the country by which the validity of an Act of Parliament could be questioned.
An act of the Legislature is superior in authority to any Court of Law".
And Ungoed Thomas J., in Cheney vs Conn, referred to a Parliamentary statute as "the highest form of law . .which prevails over every other form, of law.
" The position is substantially different under a written Consti tution such as the one which governs us.
The Constitution of India, which represents the Supreme Law of the land, envis ages three distinct organs of the State, each with its own distinctive functions, each a pillar of the State.
Broadly, while Parliament and the State Legislature in India enact the law and the Executive government implements it, the judiciary sits in judgment not only on the implementation of the law by the Executive but also on the validity of the Legislation sought to be implemented.
One of the functions of the superior judiciary in India is to examine the compe tence and validity of legislation, both in point of legisla tive competence as well as its consistency with the Funda mental Rights.
In this regard, the courts in India possess a power not known to the English 324 Courts.
Where a statute is declared invalid in India it cannot be reinstated unless constitutional sanction is obtained therefore by a constitutional amendment or an appropriately modified version of the statute is enacted which accords with constitutional prescription.
The range of judicial review recognised in the superior judiciary of India is perhaps the widest and the most extensive known to the world of law.
The power extends to examining the validi ty of even an amendment to the Constitution, for now it has been repeatedly held that no constitutional amendment can be sustained which violates the basic structure of the Consti tution.
(See His Holiness Kesavananda Bharati Sripadagalava ru vs State of Kerala, ; Smt.
Indira Nehru Gandhi vs Shri Raj Narain, ; Minerva Mills Ltd. and others vs Union of India and others, [1980] 2 SCC 591 and recently in S.P. Sampath Kumar etc.
vs Union of India and Ors.
, ; With this impressive expanse of judicial power, it is only right that the superi or courts in India should be conscious of the enormous responsibility which rests on them.
This is specially true of the Supreme Court, for as the highest Court in the entire judicial system the law declared it is, by Article 141 of the Constitution, binding on all courts within the territory of India.
Taking note of the hierarchical character of the judi cial system in India, it is of paramount importance that the law declared by this Court should be certain, clear and consistent.
It is commonly known that most decisions of the courts are of significance not merely because they consti tute an adjudication on the rights of the parties and re solve the dispute between them, but also because in doing so they embody a declaration of law operating as a binding principle in future cases.
In this latter aspect lies their particular value in developing the jurisprudence of the law.
The doctrine of binding precedent has the merit of promoting a certainty and consistency in judicial decisions, and enables an organic development of the law, besides providing assurance to the individual as to the consequence of transaction forming part of his daily affairs.
And, therefore, the need for a clear and consistent enunciation of legal principle in the decisions of a Court.
But like all principles evolved by man for the regula tion of the social order, the doctrine of binding precedent is circumscribed in its governance by perceptible limita tions, limitations arising by reference to the need for re adjustment in a changing society, a re adjustment of legal norms demanded by a changed social context.
This need for 325 adapting the law to new urges in society brings home the truth of the Holmesian aphorism that "the life of the law has not been logic it has been experience".
Oliver Wendell Holmes, "The Common Law" p. 5 and again when he declared in another study that Oliver Wendell Holmes, "Common Carriers and the Common Law", (1943) 9 Curr.
L.T. 387, 388 "the law is forever adopting new principles from life at one end," and "sloughing off" old ones at the other.
Explaining the conceptual import of what Holmes had said, Julius Stone elaborated that it is by the introduction of new extra legal propositions emerging from experience to serve as premises, or by experience guided choice between competing legal propositions, rather than by the operation of logic upon existing legal propositions, that the growth of law tends to be determined.
Julius Stone, "Legal Systems & Lawyers Rea soning", pp.
58 59.
Legal compulsions cannot be limited by existing legal propositions, because there will always be, beyond the frontiers of the existing law, new areas inviting judicial scrutiny and judicial choice making which could well affect the validity of existing legal dogma.
The search for solu tions responsive to a changed social era involves a search not only among competing propositions of law, or competing versions of a legal proposition, or the modalities of an indeterminacy such as "fairness" or "reasonableness", but also among propositions from outside the ruling law, corre sponding to the empirical knowledge or accepted values of present time and place, relevant to the dispensing of jus tice within the new parameters.
The universe of problems presented for judicial choice making at the growing points of the law is an expanding universe.
The areas brought under control by accumulation of past judicial choice may be large.
Yet the areas newly presented for still further choice, because of changing social, economic and technological conditions are far from inconsiderable.
It has also to be remembered, that many occasions for new options arise by the mere fact that no generation looks out on the world from quite the same van tage point as its predecessor, nor for the matter with the same perception.
A different vantage point or a different quality of perception often reveals the need for choice making where formerly no alternatives, and no problems at all, were Perceived.
The extensiveness of the areas for judicial choice at a particular time is a function not only of the accumulation of past decisions, not only of changes in the environment, but also of new insights and perspec tives both on old problems and on the new problems thrown up by changes entering the cultural and social heritage.
326 Not infrequently, in the nature of things there is a gravity heavy inclination to follow the groove set by prece dential law.
Yet a sensitive judicial conscience often persuades the mind to search for a different set of norms more responsive to the changed social context.
The dilemma before the Judge poses the task of finding a new equilibri um, prompted not seldom by the desire to reconcile opposing mobilities.
The competing goals, according to Dean Roscoe Pound, invest the Judge with the responsibility "of proving to mankind that the law was something fixed and settled, whose authority was beyond question, while at the same time enabling it to make constant readjustments and occasional radical changes under the pressure of infinite and variable human desires." Roscoe Pound, "an Introduction to the Phi losophy of Law" p. 19.
The reconciliation suggested by Lord Reid in "The Judges as Law Maker" pp. 25 6 lies in keeping both objectives in view, "that the law shall be certain, and that it shall be just move with the times.
" An elaboration of his opinion is contained in Myers vs Director of Public Prosecutions, , where he expressed the need for change in the law by the court and the limits within which such change could be brought about.
He said: ibid at p. 1021.
"I have never taken a narrow view of the functions of this House as an appellate tribu nal.
The common law must be developed to meet changing economic conditions and habits of thought, and I would not be deterred by ex pressions of opinion in this House in old cases.
But there are limits to what we can or should do.
If we are to extend the law it must be by the development and application of fundamental principles.
We cannot introduce arbitrary conditions or limitations: that must be left to legislation.
And if we do in effect change the law, we ought in my opinion only to do that in cases where our decision will produce some finality or certainty.
" Whatever the degree of success in resolving the dilemma, the Court would do well to ensure that although the new legal norm chosen in response to the changed social climate repre sents a departure from the previously ruling norm, it must, nevertheless.
carry within it the same principle of certain ty, clarity and stability.
The profound responsibility which is.borne by this Court in its choice between earlier established standards and the formulation of a new code of norms is all the more sensitive and significant because the 327 response lies in relation to a rapidly changing social and economic society.
In a developing society such as India the law does not assume its true function when it follows a groove chased amidst a context which has long since crum bled.
There will be found among some of the areas of the law norms selected by a judicial choice educated in the experi ence and values of a world which passed away 40 years ago.
The social forces which demand attention in the cauldron of change from which a new society is emerging appear to call for new perceptions and new perspectives.
The recognition that the times are changing and that there is occasion for a new jurisprudence to take birth is evidenced by what this Court said in The Bengal Immunity Company Limited vs The State of Bihar and Others, , when it ob served that it was not bound by its earlier judgments and possessed the freedom to overrule its judgments when it thought fit to do so to keep pace with the needs of changing times.
The acceptance of this principle ensured the preser vation and legitimation provided to the doctrine of binding precedent, and therefore, certainty and finality in the law, while permitting necessary scope for judicial creativity and adaptability of the law to the changing demands of society.
The question then is not whether the Supreme Court is bound by its own previous decisions.
It is not.
The question is under what circumstances and within what limits and in what manner should the highest Court over turn its own pronouncements.
In the examination of this question it would perhaps be appropriate to refer to the response of other jurisdictions, specially those with which the judicial system in India has borne an historical relationship.
The House of Lords in England provides the extreme example of a judicial body which until recently disclaimed the power to overrule it self.
It used to be said that the House of Lords did never overrule itself but only distinguished its earlier deci sions.
An erroneous decision of the House of Lords could be set right only by an Act of Parliament.
(See Street Tramways vs London County Council, ; and Radcliffe vs Ribble Motor Services Ltd., ,245. ) Apparent ly bowing to the pressure of a reality forced upon it by reason of a rapidly gathering change in the prevailing socio economic structure, on 26 July, 1966, Lord Gardiner, L.C., made the following statement on behalf of himself and the Lords of Appeal in Ordinary: "Their lordship regard the use of precedent as an indispensable foundation upon which to decide what is the law and its application to individual cases.
It provides at least 328 some degree of certainty upon which individu als can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules.
Their lordships nevertheless recog nise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law.
They propose therefore to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal Law.
" Since then the House of Lords has framed guidelines in a series of cases decided upto to 1975 and the guidelines have been summarised in Dr. Alan Paterson 's "Law Lords" 1982: pp.
156 157.
He refers to several criteria articulated by Lord Reid in those cases.
The freedom granted by the 1966 Practice Statement ought to be exercised sparingly (the 'use sparingly ' crite rion) (Jones vs Secretary of State for Social Services, [1972] A.C. at 966.
A decision ought not to be overruled if to do so would upset the legitimate expectations of people who have entered into contracts or settlements or otherwise regulated their affairs in reliance on the validity of that decision (the 'legitimate expectations ' criterion) (Ross Smith vs Ross Smith, , 303 and Indyka vs Indyka, [1969] I A.C. 33, 69.) 3.
A decision concerning questions of construction of statute or other documents ought not to be overruled except in rare and exceptional cases (the 'Construction ' criterion) Jones, at 966.
4(a) A decision ought not to be overruled if it would be impracticable for the Lords to foresee the consequences of departing from it (the 'unforseeable consequences ' crite rion) (Steadman vs Steadman, ,542.
(b) A decision ought not to be overruled if to do so would involve a change that ought to be part of a 329 comprehensive reform of the law.
Such changes are best done 'by legislation following on a wide survey of the whole field ' (the 'need for comprehensive reform ' criterion) (DPP vs Myers, , 1022; Cassell vs Broome, ; , 11086 and Haughton vs Smith, [1975] A.C. 476,500).
In the interest of certainty, a decision ought not to be overruled merely because the Law Lords consider that it was wrongly decided.
There must be some additional reasons to justify such a step (the 'precedent merely wrong ' crite rion) Knuller vs DPP, [1973] A .C. 435,455; 6.
A decision ought to be overruled if it causes such great uncertainty in practice that the Parties ' advisers are unable to give any clear indication as to what the courts will hold the law to be (the 'rectification of uncertainty ' criterion) Jones, at 966; Oldendroll & Co. vs Tradex Export, S.A. 1974 479,533,535. 7.
A decision ought to be overruled if .in relation to some broad issue or principle it is not considered just or in keeping with contemporary social conditions or modern conceptions of public policy (the 'unjust or outmoded ' criterion) ibid Conway vs Rimmer, ; ,938.
Dr. Paterson noted that between the years 1966 and 1988 there were twenty nine cases in which the House of Lords was invited to overrule one of its own precedents, that the House of Lords did so in eight of them, while in a further ten cases at least one of the Law Lords was willing to overrule the previous House of Lords precedent.
In a consid erable number of other cases, however, the Law Lords seemed to prefer to distinguish the earlier decisions rather than overrule them.
The High Court of Australia, the highest Court in the Commonwealth, has reserved to itself the power to reconsider its own decision, but has laid down that the power should not be exercised upon a mere suggestion that some or all the member of the later Court would arrive at a different con clusion if the matter were res integra.
In the Tramways case; , , Griffith, C.J., while doing so administered the following caution: "In my opinion, it is impossible to maintain as an abstract proposition that Court is either legally or technically bound by previ ous decisions.
Indeed, it may, in a proper case, be 330 its duty to disregard them.
But the rule should be applied with great caution, and only when the previous decision is manifestly wrong, as, for instance, if it proceeded upon the mistaken assumption of the continuance of a repealed or expired Statute, or is contrary to a decision of another Court which this Court is bound to follow; not, I think, upon a mere suggestion, that some or all of the members of the later Court might arrive at a different conclusion if the matter was res integra.
Otherwise there would be grate danger of want of continuity in the interpretation of law.
" In the same case, Barton, J. observed at p. 69: " . .
I would say that I never thought that it was not open to this Court to review its previous decisions upon good cause.
The question is not whether the Court can do so, but whether it will, having due regard to the need for continuity and consistency in the judicial decision.
Changes in the number of appointed Justices can, I take it, never of themselves furnish a reason for review . .
But the Court can always listen to argument as to whether it ought to review a particular decision, and the strongest reason for an overruling is that a decision is manifestly wrong and its continuance is injurious to the public interest".
In the United States of America the Supreme Court has explicitly overruled its prior decision in a number of cases and reference will be found to them in the judgment of Brandeis, J. in State of Washington vs Dawson & Co., ; where he said: "The doctrine of Stare decisis should not deter us from overruling that case and those which follow it.
The decisions are recent ones.
They have not been acquiesced in.
They have not created a rule of property around which vested interests have clustered.
They affect solely matters of a transitory nature.
On the other hand, they affect seriously the lives of men, women and children, and the general welfare.
Stare decisis is ordinarily, a wise rule of action.
But it is not a univer sal, inexorable command.
The instances in which the Courts have disregarded its admonition a re many.
" 331 Elaborating his point in his dissenting judgment in David Burnel vs Coronado Oil & Gas Company, ; ; 76 L.Ed. 815, Brandeis, J. observed: "Stare decisis usually the wise policy, because in most matters it is more important that the applicable rule of law be settled right.
Compare National Bank vs Whitney, 103 U.S. 99; 26 L.Ed.
443 444.
This is commonly true even where the error is a matter of serious concern, provided correction can be had by legislation.
But in cases involving the Feder al Constitution, where correction through legislative action is practically impossible, this Court has often overruled its earlier decisions.
The Court bows to the lessons of experience and the force of better reasoning recognising that the process of trial and error, so fruitful in the physical sciences, is appropriate also in the judicial function.
" The Judicial.
Committee of the Privy Council also took the view that it was not bound in law by its earlier deci sions, but in In re Compensation to Civil Servants, L.R. ; A.I.R. 1929 P.C. 84, 87 it declared that it "would hesitate long before disturbing a solemn decision by a previous Board, which raised an identical or even a simi lar issue for determination" and reiterated that reservation in the Attorney General of Ontario vs The Canada Temperance Federation, L.R. 76 Q.A. 10 and Phanindra Chandra Neogy vs The King; , These cases from England, Australia and the United States were considered by this Court in The Bengal Immunity Company Limited vs The State of Bihar and others, (supra), perhaps the first recorded instance of the Supreme Court in this country being called upon to consider whether it could overrule an earlier decision rendered by it.
A Bench of seven Judges assembled to consider whether the majority decision of a Constitution Bench of five Judges in State of Bombay vs The United Motors (India) Ltd., ; should be reconsidered.
Four Judges of the Bench of seven said it should and voted to overrule the majority decision in the United Motors, (supra).
The remaining three voted to the contrary.
Das, Acting C.J., speaking for himself and on behalf of Bose, Bhagwati and Jafar Imam, JJ, preferred the approach adopted by the United States Supreme Court since, in the view of that learned Judge, the position in India approximated more closely to that obtaining in the United states rather than to the position in England, where Parlia ment could rectify the situation by a simple majority, and to that in Australia, where the mistake could be 332 corrected in appeal to the Privy Council.
The learned Judge observed: "There is nothing in our Constitution which pre vents us from departing from a previous decision if we are convinced of its error and its baneful effect on the general interests of the public." And reference was made to the circumstance that Article 141 of the Constitution made the law declared by this Court binding on all Courts in India.
Speaking with reference to the specific case before the Court, the learned Judge referred to the far reaching effect of the earlier decision in the United Motors (supra) on the general body of the consuming public, and that the error committed in the earlier decision would result in perpetuat ing a tax burden erroneously imposed on the people, giving rise to a consequence "manifestly and wholly unauthorised." The learned Judge observed: "It is not an ordinary pronouncement declaring the rights of two private individuals inter se.
It involves an adjudication on the taxing power of the States as against the consuming public generally.
If the decision is errone ous, as indeed we conceive it to be, we owe it to the public to protect them against the illegal tax burdens which the States are seeking to impose on the strength of that errone ous recentdecision".
Cautioned that the Court should not differ merely because a contrary view appeared preferable, the learned Judge affirmed that "we should not lightly dissent from a previous pronouncement of this Court.
" But if the previous decision was plainly erroneous, he pointed out, there was a duty on the Court to say so and not perpetuate the mistake.
The appeal to the principle of stare decisis was rejected on the ground that (a) the decision intended to be overruled was a very recent decision and it did not involve overruling a series of decisions, and (b) the doc trine of stare decisis was not an inflexible rule, and must, in any event, yield where following it would result in perpetuating an error to the detriment of the general wel fare of the public or a considerable section thereof.
Since then the question as to when should the Supreme Court overrule its own decision has been considered in several cases.
Relying on the Bengal Immunity case, Khanna, J. remarked that certainly in the law, which was an essen tial ingredient of the Rule of Law, would be considerably eroded if the highest court of the land lightly overruled the view expressed by it in earlier cases.
One instance where such overruling could be permissible was a situation where contextual values giving birth to the earlier view had altered substantially since.
333 In Maganlal Chhagganlal (P) Ltd. vs Municipal Corporation of Greater Bombay & Ors.
, ; he explained: "Some new aspects may come to light and it may become essen tial to cover fresh grounds to meet the new situations or to overcome difficulties which did not manifest themselves or were not taken into account when the earlier view was pro pounded.
Precedents have a value and the ratio decidendi of a case can no doubt be of assistance in the decision of future cases.
At the same time we have to, as observed by Cardozo, guard against the notion that because a principle has been formulated as the ratio decidendi of a given prob lem, it is therefore to be applied as a solvent of other problems, regardless of consequences, regardless of deflect ing factors, inflexibly.
and automatically, in all its pristine generality (see Selected Writings, p. 31).
As in life so in law things are not static.
" In Lt. Col. Khajoor Singh vs The Union of India & Anoth er; , the majority of this court emphasised that the court, should not depart from an interpretation given in an earlier judgment of the court unless there was a fair amount of unanimity that the earlier decision was manifestly wrong.
In Keshav Mills Company vs Commissioner of Income Tax, ; ,921 this court observed that a revision of its earlier decision would be justified if there were compelling and substantial reasons to do so.
In Sajjan Singh vs State of Rajasthan, ; ,947 948 the court laid down the test: 'Is it absolutely necessary and essential that the question already decided should be reo pened? ', and went on to observe: 'the answer to this ques tion would depend on the nature of the infirmity alleged in the earlier decision, its impact on public good and the validity and compelling character of the considerations urged in support of the contrary view. ' There can be no doubt, as was observed in Girdhari Lal Gupta vs D.H. Mill, ; that where an earlier relevant statutory provision has not been brought to the notice of the court, the decision may be reviewed, or as in Pillani Investment Corporation Ltd. vs I.T.O. 'A ' Ward, Calcutta & Anr., ; , if a vital point was not considered.
A more compendious examination of the problem was undertaken in Keshav Mills Company vs Commissioner of Income Tax, (supra) where the Court pointed out: "It is not possible or desirable, and in any case it would be inexpedient to lay down any principles which should 334 govern the approach of the Court in dealing with the ques tion of reviewing and revising its earlier decisions.
It would always depend upon several relevant considerations: What is the nature of the infirmity or error on which a plea for a review and revision of the earlier view is based? On the earlier occasion, did some patent aspects of the question remain unnoticed, or was the attention of the Court not drawn to any relevant and materi al statutory provision, or was any previous decision of this Court bearing on the point not noticed? Is the court hearing such plea fairly unanimous that there is such an error in the earlier view? What would be the impact of the error on the general administration of law or on public good? Has the earlier decision been followed on subsequent occasions either by this Court or by the High Courts? And, would the reversal of the earlier decision lead to public inconven ience, hardship or mischief? These and other relevant con siderations must be carefully borne in mind whenever this Court is called upon to exercise its jurisdiction to review and revise its earlier decisions.
These considerations become still more significant when the earlier decision happens to be a unanimous decision of the Bench of five learned Judges of this Court.
" Much importance has been laid on observing the finality of decisions rendered by the Constitution Bench of this Court, and in Ganga Sugar Company vs State of Uttar Pradesh, ; , 782 the Court held against the finality only where the subject was 'of such fundamental importance to national life or the reasoning is so plainly erroneous in the light of later thought that it is wiser to be ultimately right rather than to be consistently wrong '.
It is not necessary to refer to all the cases on the point.
The broad guidelines are easily deducible from what has gone before.
The possibility of further defining these guiding principles can be envisaged with further juridical experience, and when common jurisprudential values linking different national systems of law may make a consensual pattern possible.
But that lies in the future.
There was some debate on the question whether a Division Bench of Judges is obliged to follow the law laid down by a Division Bench of a larger number of Judges.
Doubt has arisen on the point because of certain observations made by O. Chinnappa Reddy, J. in 335 Javed Ahmed Abdul Hamid Pawala vs State of Maharashtra, AIR 1985 SC 23 1.
Earlier, a Division Bench of two Judges, of whom he was one, had expressed the view in T.V. Vatheeswaran vs The State of Tamil Nadu, that delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle a person under sentence of death to invoke Article 21 of the Constitution and demand the quashing of the sentence of death.
This would be so, he observed, even if the delay in the execution was occasioned by the time necessary for filing an appeal or for considering the reprieve of the accused or some other cause for which the accused himself may be responsible.
This view was found unacceptable by a Bench of three Judges in Sher Singh & Ors.
vs State of Punjab, ; where the learned Judges observed that no hard and fast rule could be laid down in the matter.
In direct disagreement with the view in T.V. Vatheeswaran, (supra), the learned Judges said that account had to be taken of the time occupied by pro ceedings in the High Court and in the Supreme Court and before the executive authorities, and it was relevant to consider whether the delay was attributable to the conduct of the accused.
As a member of another Bench of two Judges, in Javed Ahmed Abdul Hamid Pawala, (supra) O. Chinnappa Reddy, J. questioned the validity of the observations made in Sher Singh, (supra) and went on to note, without express ing any concluded opinion on the point, that it was a seri ous question "whether a Division Bench of three Judges could purport to overrule the judgment of a Division Bench of two Judges merely because there is larger than two.
The Court sits in Divisions of two and three Judges for the sake of convenience and it may be inappropriate for a Division Bench of three Judges to purport to overrule the decision of a Division Bench of two Judges.
Vide Young vs Bristol Aero plane Co. Ltd., It may be otherwise where a Full Bench or a Constitution Bench does so.
" It is pertinent to record here that because of the doubt cast on the validity of the opinion in Sher Singh, (supra), the question of the effect of delay on the execution of a death sentence was referred to a Division Bench of five Judges, and in Triveniben vs State of Gujarat, AIR 1989 SC 142 the Constitution Bench overruled T.V. Vatheeswaran, (supra).
What then should be the position in regard to the effect of the law pronounced by a Division Bench in relation to a case raising the same point subsequently before a Division Bench of a smaller number of Judges? There is no constitu tional or statutory prescription in the matter, and the point is governed entirely by the practice in India of the Courts sanctified by repeated affirmation over a century of time.
It cannot be doubted that in order to promote consist ency and certainty 336 in the law laid down by a superior Court, the ideal condi tion would be that the entire Court should sit in all cases to decide questions of law, and for that reason the Supreme Court of the United States does so.
But having regard to the volume of work demanding the attention of the Court, it has been found necessary in India as a general rule of practice and convenience that the Court should sit in Divisions, each Division being constituted of Judges whose number may be determined by the exigencies of judicial need, by the nature of the case including any statutory mandate relative there to, and by such other considerations which the Chief Jus tice, in whom such authority devolves by convention, may find most appropriate.
It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the rule has been evolved, in order to promote consistency and certainty in the devel opment of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges.
This principle has been followed in India by several generations of Judges.
We may refer to a few of the recent cases on the point.
In John Martin vs The State of West Bengal, ; a Division Bench of three Judges found it right to follow the law declared in Haradhan Saha vs State of West Bengal, ; decided by a Division Bench of five Judges, in preference to Bhut Nath Mate vs State of West Bengal, ; decided by a Division Bench of two Judges.
Again in Smt.
India Nehru Gandhi vs Shri Raj Narain, Beg, J. held that the Constitution Bench of five Judges was bound by the Constitution Bench 01 ' thirteen Judges in His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala, [1973] Suppl.
1 SCR.
In Ganapati Sitaram Balvalkar & Anr.
vs Waman Shripad Mage (Since Dead) Through Lrs., this Court expressly stated that the view taken on a point of law by a Division Bench of four Judges of this Court was binding on a Division Bench of three Judges of the Court.
And in Mattulal vs Radhe Lal, ; this Court specifically observed that where the view expressed by two different Division Benches of this Court could not be reconciled, the pronouncement of a Division Bench of a larger number of Judges had to be, preferred over the deci sion of a Division Bench of a smaller number of Judges.
This Court also laid down in Acharaya Maharajshri Narandrapra sadji AnandprasadjiMaharaj etc.
vs The State of Gujarat & Ors., ; that even where the strength of two differing Division Benches consisted of the same number of Judges, it was not open to one Division Bench to decide the correctness or other wise of the views of the other.
The principle was reaffirmed in Union of India & Ors.
vs Godfrey Philips India Ltd., [1985] 4 337 SCC 369 which noted that a Division Bench of two Judges of this Court in Jit Ram vs State of Haryana, ; had differed from the view taken by an earlier Division Bench of two Judges in Motilal Padampat Sugar Mills vs State of U.P., ; on the point whether the doctrine of promissory estoppel could be defeated by invoking the defence of executive necessity, and holding that to do so was wholly unacceptable reference was made to the well accepted and desirable practice of the later Bench referring the case to a larger Bench when the learned Judges found that the situation called for such reference.
We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court.
We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three Judges un less, for compelling reasons that is not conveniently possi ble.
Upon the aforesaid considerations, and in view of the nature and potential of the questions raised in these cases we are of the view that there was sufficient justification for the order dated 23 September, 1985 made by the Bench of two learned judges referring these cases to a larger Bench for reconsideration of the question decided in K. Kamalajam mannivaru (dead) by Lrs., (supra) and Bhag Singh and Ors., (supra).
The preliminary objection raised by learned counsel for the respondents to the validity of the reference is overrruled.
We now come to the merits of the reference.
The refer ence is limited to the interpretation of section 30(2) of the Land Acquisition (Amendment) Act of 1984.
Before the enact ment of the Amendment Act, solatium was provided under section 23(2) of the Land Acquisition Act (shortly, "the parent Act") at 15% on the market value of the Land computed in accordance with section 23(1) of the Act, the solatium being provided in consideration of the compulsory nature of the acquisition.
The Land Acquisition Amendment Bill, 1982 was introduced in the House of the People on 30 April, 1982 and upon enactment the Land Acquisition Amendment Act 1984 commenced operation with effect from 24 September, 1984.
section 15 of the Amendment Act amended section 23(2) of the parent Act and substituted the words '30 per centum ' in place of the words '15 per centum '.
Parliament intended that the be 338 nefit of the enhanced solatium should be made available albeit to a limited degree, even in respect of acquisition proceedings taken before that date.
It sought to effectuate that intention by enacting section 30(2) in the Amendment Act, section 30(2) of the Amendment Act provides: "(2) the provisions of sub section
(2) of section 23 . of the principal Act, as amended by clause (b) of section 15 . . of this Act . . shall apply and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award under the provisions of the principal Act after the 30th day of April, 1982 [the date of introduction of the Land Acquisition (Amendment) Bill, 1982, in the House of the People] and before the commencement of this Act." In construing section 30(2), it is just as well to be clear that the award made by the Collector referred to here is the award made by the Collector under section 11 of the parent Act, and the award made by the Court is the award made by the Principal Civil Court of Original Jurisdiction under section 23 of the parent Act on a reference made to it by the Collector under section 19 of the parent Act.
There can be no doubt that the benefit of the enhanced solatium is intended by section 30(2) in respect of an award made by the Collector between 30 April 1982 and 24 September, 1984.
Likewise the benefit of the enhanced solatium is extended by section 30(2) to the case of an award made by the Court between 30 April 1982 and .24 September 1984, even though it be upon reference from an award made before 30 April, 1982.
The question is: what is the meaning of the words "or to any order passed by the High Court or Supreme Court on appeal against any such award?" Are they limited, as con tended by the appellants, to appeals against an award of the Collector or the Court made between 30 April 1982 and 24 September 1984, or do they include also, as contended by the respondents, appeals disposed of between 30 April, 1982 and 24 September 1984 even though arising out of awards of the Collector or the Court made before 30 April, 1982.
We are of opinion that the interpretation placed by the appellants should be preferred over that suggested by the respondents.
Parliament has identified the appeal before the High Court and the appeal before the Supreme Court by describing it as an appeal against 'any such award '.
The submission on behalf of the respondents is that the words 'any such award ' mean the award made by the Collector or Court, and carry no 339 greater limiting sense; and that in this context, upon the language of section 30(2), the order in appeal is an appellate order made between 30 April 1982 and 24 September 1984 in which case the related award of the Collector or of the Court may have been made before 30 April 1982.
To our mind, the words 'any such award ' cannot bear the broad meaning suggested by learned counsel for the respondents.
No such words of description by way of identifying the appellate order of the High Court or of the Supreme Court were neces sary.
Plainly, having regard to the existing hierarchical structure of for a contemplated in the parent Act those appellate orders could only be orders arising in appeal against the award of the Collector or of the Court.
The words 'any such award ' are intended to have deeper signifi cance, and in the context in which those words appear in section 30(2) it is clear that they are intended to refer to awards made by the Collector or Court between 30 April, 1982 and 24 September, 1984.
In other words section 30(2) of the Amendment Act extends the benefit of the enhanced solatium to cases where the award by the Collector or by the Court is made between 30 April, 1982 and 24 September, 1984 or to appeals against such awards decided by the High Court and the Su preme Court whether the decisions of the High Court or the Supreme Court are rendered before 24 September, 1984 or after that date.
All that is material is that the award by the Collector or by the Court should have been made between 30 April, 1982 and 24 September, 1984.
We find ourselves in agreement with the conclusion reached by this Court in K. Kamalajammanniavaru (dead) by Lrs.
vs Special Land Acquisi tion Officer, (supra), and find ourselves unable to agree with the view taken in Bhag Singh and Others vs Union Terri tory of Chandigarh, (supra).
The expanded meaning given to section 30(2) in the latter case does not, in our opinion, flow reasonably from the language of that sub section.
It seems to us that the learned judges in that case missed the sig nificance of the word 'such ' in the collocation 'any such award ' in section 30(2).
Due significance must be attached to that word, and to our mind it must necessarily intend that the appeal to the High Court or the Supreme Court, in which the benefit of the enhanced solatium is to be given, must be confined to an appeal against an award of the Collector or of the Court rendered between 30 April, 1982 and 24 Septem ber, 1984.
We find substance in the contention of the learned Attorney General that if Parliament had intended that the benefit of enhanced solatium should be extended to all pending proceedings it would have said so in clear language.
On the contrary, as he says, the terms in which section 30(2) is couched indicate a limited extension of the benefit.
The Amendment Act has not been made generally retrospective with 340 effect from any particular date, and such retrospectivity as appears is restricted to certain areas covered by the parent Act and must be discovered from the specific terms of the provision concerned.
Since it is necessary to spell out the degree of retrospectivity from the language of the relevant provision itself, close attention must be paid to the provi sions of section 30(2) for determining the scope of retrospective relief intended by Parliament in the matter of enhanced solatium.
The learned Attorney General is also right when he points out that it was never intended to define the scope of the enhanced solatium on the mere accident of the disposal of a case in appeal on a certain date.
Delays in the superi or Courts extend now to limits which were never anticipated when the right to approach them for relief was granted by statute.
If it was intended that section 30(2) should refer to appeals pending before the High Court or the Supreme Court between 30 April, 1982 and 24 September, 1984, they could well refer to proceedings in which an award had been made by the Collector from anything between 10 to 20 years before.
It could never have been intended that rates of compensation and solatium applicable to acquisition proceedings initiated so long ago should now enjoy the benefit of statutory en hancement.
It must be remembered that the value of the land is taken under section 11(1) and section 23(1) with reference to the date of publication of the notification under s.4(1), and it is that date which is usually material for the purpose of determining the quantum of compensation and solatium.
Both section 11(1) and section 23(1) speak of compensation being determined on the basis, inter alia, of the market value of the land on that date, and solatium by section 23(2), is computed as a per centage on such market value.
Our attention was drawn to the order made in State of Punjab vs Mohinder Singh, (supra), but in the absence of a statement of the reasons which persuaded the learned Judges to take the view they did we find it difficult to endorse that decision.
It received the approval of the learned Judges who decided Bhag Singh (supra), but the judgment in Bhag Singh, (supra) as we have said earlier, has omitted to give due significance to all the material provisions of section 30(2), and consequently we find ourselves at variance with it.
The learned Judges proceeded to apply the principle that an appeal is a continuation of the proceeding initiated before the Court by way of reference under section
18 but, in our opinion, the application of a general principle must yield to the limiting terms of the statutory provision itself.
Learned counsel for the respondents has strenuously relied on the general principle that the appeal is a re hearing of the original matter, but we are not satisfied that he is on good ground in invoking that principle.
Learned counsel 341 for the respondents points out that the word 'or ' has been used in section 30(2), as a disjunctive between the reference to the award made by the Collector or the Court and an order passed by the High Court or the Supreme Court in appeal and, he says, properly understood it must mean that the period 30 April, 1982 to 24 September, 1984 is as much applicable to the appellate order of the High Court or of the Supreme Court as it is to the award made by the Collector or the Court.
We think that what Parliament intends to say is that the benefit of section 30(2) will be available to an award by the Collector or the Court made between the aforesaid two dates or to an appellate order of the High Court or of the Supreme Court which arises out of an award of the Collector or the Court made between the said two dates.
The word 'or ' is used with reference to the stage at which the proceeding rests at the time when the benefit under section
30(2) is sought to be extended.
If the proceeding has terminated with the award of the Collector or of the Court made between the aforesaid two dates, the benefit of section 30(2) will be applied to such award made between the aforesaid two dates.
If the proceeding has passed to the stage of appeal before the High Court or the Supreme Court, it is at that stage when the benefit of section 30(2) will be applied.
But in every case, the award of the Collector or of the Court must have been made between 30 April, 1982 and 24 September, 1984.
In the result we overrule the statement of the law laid down in Mohinder Singh, (supra) and in Bhag Singh and Anoth er, (supra) and prefer instead the interpretation of section 30(2) of the Amendment Act rendered in K. Kamalajammanniava ru (dead) by Lrs.
(supra).
The cases will now be listed before a Division Bench of three learned Judges for hearing on the merits of the other points raised in the cases.
| These writ Petitions have been filed by the employees of the Supreme Court through their Welfare Associations pray ing, in substance, for enhancement of their present pay scales.
Writ Petition No. 801 of 1986 has been filed by the Welfare Association representing class II and class 111 employees whereas Writ Petition No. 1201/86 has been filed by Welfare Association representing class IV employees and the third Writ Petition has been filed by retired employees.
In order to deal with and make recommendations in regard to various representations highlighting grievances regarding service conditions made by the staff.
of the Supreme Court, the Chief Justice of India constituted a committee consist ing of five Judges of the Supreme Court.
The committee was also asked to make recommendations whether the pay scales of different categories of the staff warranted 489 upward revision.
The Committee after consideration of the issues raised, made several recommendations but as regards the pay scale revision, it recommended that the matter be referred to the Third Pay Commission, then sitting.
However in the meanwhile, the High Court of Delhi, allowed various Writ Petitions filed before it by the members of the staff of Delhi High Court belonging to different categories.
The result of the Orders passed by the Delhi High Court was.
that the staff of that High Court started drawing more pay in some categories of class IV, class Il & III employees, than the employees of the Supreme Court similarly placed.
Taking cue from the orders of the Delhi High Court, the petitioners have filed these petitions invoking in aid the principle of "Equal pay for equal work".
It is urged by the petitioners that the duties performed by the staff of the Supreme Court are similar rather more responsible, arduous and onerous to those performed by the members of the staff of Delhi High Court, hence they are entitled to pay like similar if not enhanced pay scales.
It is urged that Special Leave Petition filed by the Government before this Court against the orders of the Delhi High Court having been dismissed by this Court, the order of Delhi High Court has became final.
In Writ Petition No. 801 of 1986, by an interim order dated 25.7.86 this Court directed that the officers and members of the staff of the registry should get the same pay and allowances which were then being enjoyed by the officers and the members of the staff of the Delhi High Court belong ing to the same category with effect from the date from which such scales of pay has been allowed to the officers and the members of the staff of the Delhi High Court.
The Court also by the same order directed Respondent Nos. 1 and 2 to take necessary steps to refer the question of revision of pay scales to the Fourth Pay Commission as suggested by the five Judges Committee.
Some other interim orders were also passed giving higher pay to certain categories of employees, as was done by Delhi High Court.
The Fourth Pay Commission to which the question of revision of pay scales of the staff of Supreme Court was referred did not grant any enhancement.
It did not even grant the benefit of higher pay given under the interim orders of this Court.
After the report of Fourth Pay Commis sion, the petitions have been listed for final hearing.
Disposing of the Writ Petitions, this Court 490 HELD: Per M. M. Dutt, J.
When no reason is given, but a Special Leave Petition is dismissed simpliciter, it cannot be said that there has been a declaration of law by this Court under Article 141 of the Constitution.
[505B] Indian Oil Corporation Ltd. vs State of Bihar, ; ; Union of India vs All India Services Pensioner Association, ; A decision on an abstract question of law unrelated to facts which give rise to a right cannot operate as res judicata.
Nor, also can a decision on the question of juris diction be res judicata in a subsequent suit or proceeding but, if the question of law is related to the fact in issue, an erroneous decision on such a question of law may operate as res judicata between the parties in a subsequent, suit or proceeding, if the cause of action is the same.
[506G H; 507A B] Mathura.
Prasad Rajoo Jaiswal vs Dossibai N.B. Jeejeeb hoy; , and Thakore Sobhag Singh vs Thakur Jai Singh, The doctrine of res judicata is a universal doctrine laying down the finality of litigation between the parties.
When a particular decision has become final and binding between the parties, it cannot be set at naught on the ground that such a decision is violative of Article 14 of the Constitution.
So far as the parties are concerned, they will always be bound by the said decision.
In other words, either of the parties will not be permitted to reopen the issue decided by such decision on the ground that such decision violates the equality clause under the Constitu tion.
[508H; 509A B] From Article 146(2) it is apparent that it is primarily the responsibility of Parliament to lay down the conditions of service of the officers and servants of the Supreme Court, but so long as Parliament does not lay down such conditions of service.
the Chief Justice of India or some other Judge or officer of the Court authorised by the Chief Justice of India is empowered to make rules for the purpose.
[516B C] The conditions of service that may be prescribed by the rules framed by the Chief Justice of India under Article 146(2) will also necessarily include salary.
allowances, leave and pensions of the officers and servants of the Supreme Court.
[516D] 491 The proviso to Article 146(2) puts a restriction on the power of the Chief Justice of India by providing that the rules made under Article 146(2) shall.
so far as they.
relate to salaries, allowances, leave or pensions, require the approval of the President of India.
[516E] The rules framed by the Chief Justice of India though it is a piece of subordinate legislation, it is not a full fledged legislative act requiring assent of the President of India.
[517C] Going strictly by Article 146(2) of the Constitution, the question of any reference to the Pay Commission does not arise.
The Chief Justice of India has to frame rules with the aid and assistance of his own officers and other Judges.
The Chief Justice of India may appoint a Committee of Judges or a Committee of experts for the purpose of assisting him in framing the rules relating to the conditions of service of the employees of the Supreme Court.
Although there is no such provision in Article 146(2), but that is implied and it may be said that the reference to the Fourth Pay Commission was made so that the report or the recommendations of the Fourth Pay Commission relating to the revision of the pay scales of the Supreme Court employees will be of some as sistance to the Chief Justice of India to frame rules.
[523D F] What should go to the President of India for his approv al under the proviso to Article 146(2) is not the report or the recommendation of the Fourth Pay Commission, but the rules framed by the Chief Justice of India.
In considering the rules framed by the Chief Justice of India relating to salaries, allowances, leave and pension, it will not be the concern of the President of India how and in what manner the Chief Justice of India has laid down the rules.
[523F G] All this can be done by the Chief Justice of India or by some other Judge or officer of this Court authorised by the Chief Justice of India.
The Chief Justice of India may appoint a Committee of Judges to submit a report relating to all relevant matters and, thereafter, the Chief Justice of India may frame rules after taking into consideration the report of the Committee.
It will be absolutely in the dis cretion of the Chief Justice of India or his nominee as to how and in what manner the rules will be framed.
[529D E] Per Thommen, J.
The regulation of the conditions of service of the Supreme Court 492 employees is the constitutional responsibility and power of the Chief justice of India, subject.
of course, to the two conditions postulated in clause (2) of Article 146.
[538E] Rules were made in this regard by the Chief Justice of India with the approval of the President of India and they are contained in Part II of the Supreme Court Officers and Servants ' (Conditions of Service and Conduct) Rules, 1961 as amended upto 16th December, 1985.
No amendment of these Rules has been made subsequent to 1985 and consequently the Rules do not reflect the enhanced pay scales adopted on the basis of the interim Orders of this Court or the pay scales recommended by the Pay Commission.
[538C D] Rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end/or violative of the general principles of the law of the land or so vague that it cannot be predi cated with certainty as to what is prohibited by them or so unreasonable that they cannot be attributed to the power delegated or otherwise disclose bad faith.
[542F] Union of India & Ant.
vs Cynamide India Ltd. & Anr., [1987] 2 SCC 720, 734; S.I. Syndicate Ltd. vs Union of India, ; ; P.C.S. Mills vs Union of India, ; ; Shree Meenakshi Mills ' vs Union of India, ; ; E.P. Royappa vs State of Tamil Nadu. ; ; Maneka Gandhi vs Union of India, AIR (1978) SC 597; Ajay Hasia vs Khalid Mujib, AIR (1981) SC 485; D.S. Nakara vs Union of India, ; ; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; Westminster Corporation vs London and North Western Railway, 430; Barium Chemi cals Ltd. vs Company Law Board, ; referred to.
Until the rules are made by the Chief Justice (or by a Judge or Officer of the Court authorised by him), the ques tion of approval or disapproval by the President does not arise.
In making the rules, the Chief Justice would no doubt take into account the recommendations of the Pay Commission or of any other body of experts he may have consulted.
He will also take into account the objections raised by the Government to the suggestions made by the Registrar General who, of course.
acted as an agent of the Chief Justice.
But the refusal of the Government to accede to the proposals of the Registrar General is not a refusal of the President under Article 146(2), 1or such refusal or approval can arise only upon submission to him to duly framed rules.
[546G H; 547A B] 493 The approval of the President is not a matter of mere formality.
It would, of course, be wrong to say that in no case can the President, which means the Government, refuse to accord approval.
However.
once the rules are duly framed by so high a constitutional dignitary as the Chief Justice of India, it will only be in the truly exceptional cases that the President would withhold assent.
[547D E] Kirit Kumar Chaman Lal Kundaliya vs State of Gujarat, ; State of Orissa vs Durga Charan Das, ; ; G.V. Ramanaiah vs The Superintendent of Central Jail.
Rajahmundry.
; ; Chandra Bansi Singh vs State of Bihar, ; ; Waman Rao vs Union of India; , ; Minor P. Rajendran vs State of Madras, ; ; State of M.P.v.
Ram Raghubir Prasad Agarwal; , ; Roshanlal Kuthiala vs R.B. Mohan Singh Oberai.
; ; Tamil Nadu Education Department Ministerial & General Subordinate Service Associ ation vs State of Tamil Nadu; , ; Kishori Mohanlal Bakshi vs Union of India, AIR 1962 SC 1139; State of Punjab vs Joginder Singh.
[1963] Supp. 2 SCR 169; Randhir Singh vs Union of India, ; ; Dhirendra Chamoli vs State of U.P., [1986] 1 SCC 687; State of Andhra Pradesh vs
G. Sreenivasa Rao, [1989] 1 .IT 615; V. Markendeya vs State of Andhra Pradesh; , ; State of U.P. vs J.P. Chaurasia; , ; Umesh Chandra Gupta vs Oil & Natural Gas Commission, AIR 1989 SC 29; Tarsera Lal Gautam vs State Bank of Patiala, AIR 1989 SC 30;Narinder Chand Hem Raj vs Lt. Governor, Administrator, Union Territory, Hima chal Pradesh; , ; State of Andhra Pradesh vs
T. Gopalakrishnan Murthi; , ; A.K. Roy vs Union of India,, ; ; Gurumoorthy vs Accountant General Assam & Nagaland, ; K. Nagaraj & Ors.
vs State of A.P. & Anr.
, ; , 548; R.K. Garg vs Union of India, ; , 687; Aeltemesh Rein, Advocate Supreme Court of India vs Union of India & Ors.
, ; ; State of U. P. & Ors.
vs Renusagar Power Co. & Ors., ; , 104; Kruse vs Johnson, ; Associated Provincial Picture Houses Ltd. vs Wednesbury Corporation, ; ; Mixnam Properties Ltd. vs Chertsey U.D.C., ; Commissioners of Customs & Excise vs Cure & Deeley Ltd., ; Mceldowney vs Forde, [1971] AC 632; Carltona Ltd., vs Commissioners of Works & Ors., , 564; Point of Ayr.
Collieries Ltd. vs Lloyd George, ; Scott vs Glasgow Corporation.
,492; Robert Baird L.D. & Ors.
vs City of Glas gow, ; Manhattan General Equipment Co. vs Commissioner. ; , 134; Yates (Arthur) & 494 Co. Pty Ltd., vs Vegetable Seeds Committee, ; Bailey vs Conole, ; ; Boyd Build ers Ltd. vs City of Ottawa, [1964] 45 D.L.R. (2nd) 211; Re Burns &.
Township of Haldimand, and Lynch vs Tilden Produce Co., ; , 320 322, referred to.
|
Civil Appeal No. 466 of 1960.
Appeal from the judgment and order dated October 31, 1958 of the Kerala High Court in I. T. R. No. 2 of 1956 (K).
K. N. Rajagopal Sastri and P. D. Menon, for appellant.
The respondent did not appear.
January 16.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The Commissioner of Income Tax, Kerala and Coimbatore, has filed this appeal against the judgment and order of the High Court of Kerala dated October 31, 1958, by which the High Court answered in favour of the respondent (Helen Rubber Industries, Ltd., Kottayam) the following question: "Whether under the provisions of the Indian Income tax Act the petitioner is entitled to carry forward the loss for a period of six years notwithstanding the fact that during the period when the loss had occurred, the law applicable was the Travancore Income tax Act ?" The High Court has granted a certificate under section 66A(2) of the Income tax Act.
Two questions were referred to the High Court in compliance with an earlier order of the High Court under section 66(2); 607 but with the other question, we are not concerned in this appeal.
Messrs. Helen Rubber Industries, Ltd. is a Company, which was incorporated in the former State of Travancore with its registered office at Kottayam.
In the year 1941, the assessee Company granted a lease of the factory to certain persons for a period of 15 years.
From that year, the rent and royalty received from the lessees were the only source of income.
Disputes having arisen, the lessees suspended payment from June 1946.
Litigation followed; but the dispute was settled by the assessee Company receiving Rs. 23,000/ odd in full satisfaction.
With the details of these disputes and their settlement, we are not concerned.
The year of account of the assessee Company is the Calendar year.
Before the extension of the Indian Income tax Act, there was in force in Travancore State, the Travancore Income tax Act, 1121 M. E. (Act XXIII of 1121 M. E.), which came into force on the first day of Chingom 1122 M. E. (August 17, 1946).
The assessment year under the Travancore Act ended on the last day of Karkadakom, which corresponds to August 16, 1947.
Thus for the account year, 1 1 1946 to 31 12 1946 of the firm the assessment year was 1123 M. E. (17 8 1947 to 16 8 1948).
The assessee Company declared losses in the account years, 1946, 1947 and 1948.
These losses, together with the dates of the account years and the assessment years are tabulated below: Year of account Year of assessment.
Loss 1946(1 1 1946 to 1123 M. E. (17 8 1947 Rs. 4031 10 0 31 12 1946) to 16 8 1948) 1947(1 1 1947 to 1124 M. E.(17 8 1948 Rs. 6605 1 6 31 12 1947) to 16 8 1949) 1948 (1 1 1948 to 1125 M. E. (17 8 1949 Rs. 2604 13 9 31 12 1948) to 16 8 1950) Total Rs. 13241 9 3 608 The dispute in this case is about the right of the assessee Company to carry forward the loss of the year 1946 under the provisions of the Travancore Act read with section 24(2) of the Indian Income tax Act and the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 to the assessment year, 1951 52, in the assessment of the Company for its year of account, the Calendar Year, 1950.
The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year, since it had lapsed after two years under section 32 of the Travancore Act, and section 24(2) was not applicable, in view of paragraph 3 of the Order, mentioned above.
The order of the Income tax Officer was confirmed in appeal by the Appellate Assistant Commissioner and the Appellate Tribunal.
The Tribunal was moved for a case, but declined to state one; but the High Court called for a statement of the case under section 66(2) and the above mentioned question was decided in favour of the assessee Company.
The only question argued in this appeal is whether the High Court was right in the answer it gave.
The assessee Company was not represented at the hearing before this Court.
The Indian Income tax Act was extended to Travancore Cochin by section 3 of the Indian Finance Act, 1950.
By section 13(1) of the same Act, it was provided: "If immediately before the 1st day of April, 1950, there is in force in any part B State. any law relating to income tax that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax. . in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922 (XI of 1922), for the year ending on the 31st day of March, 1951, or for any subsequent year. " 609 By this section a clear division was made between the operation of the prior law and the Indian Income tax Act.
The assessment for the year, 1951 52, was thus made on the assessee Company under the Indian Income tax Act.
Under section 24(2) of the Indian Income tax Act, as it existed prior to its amendment by the Finance Act, 1955, it was provided: "Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March 1940, under the head 'Profits and gains of business, profession or vocation ' and the loss cannot be wholly set off under sub section(1), the portion not so set off shall be carried forward to the following year, and so on, but no loss shall be so carried forward for more than six years, and a loss arising in the previous years for the assessment for "the years ending on the 31st day of March, 1940, the 31st day of March, 1941, the 31st day of March, 1942, the 31st day of March, 1943, and the 31st day of March 1944 respectively shall be carried forward only for one, two, three, four and five years respectively.
" Since we are concerned with the loss for the year, which does not correspond to the years named in the latter part of the section above quoted, that part of the section does not apply to the assessee Company 's case.
What was thus claimed was the benefit of the earlier part, where the loss was allowed to be carried forward for six years.
This position taken by the assessee Company can hardly be considered in view of the provisions of section 32 of the Travancore Act, read with the Removal of Difficulties Order passed in 1950.
Section 32 of the Travancore Act was a reproduction of the Indian section 24(2) except for a change of the 610 dates mentioned therein, due obviously to the fact that the Travancore Act came into force on the first day of Chingom, 1122 M. E. (August, 17, 1946).
It is enough to point out that instead of "31st March", wherever they occurred, the words "the last day of Karkadakom" (August, 16) were substituted, and instead of the years, 1940, 1941, 1942, 1943 and 1944, were substituted the Malayalam years, 1122 (17 8 1946 to 16 8 1947), 1123 (17 8 1947 to 16 8 1948), 1124 (17 8 1948 to 16 8 1949), 1125 (17 8 1949 to 16 8 1950), and 1126 (17 8 1950 to 16 8 1951).
These were the only differences between the two sections, and section 24(2) of the Indian Income tax Act, so modified, can be read as section 32 of the Travancore Act.
The existance of these two sections in the two Acts was likely to lead to some difficulty, and a question was likely to arise which law was to prevail.
Section 12 of the Indian Finance Act, 1950, therefore, enabled the Central Government to pass an Order removing any such difficulty.
The Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 was thus passed.
Paragraph 3 of that order provided: "3.
Carry forward and set off of previous losses where in any previous year prior to the previous year for "the assessment for the year ending on the 31st day of March 1950, an assessee has sustained a loss of profits or gains in any business, profession or vocation carried on by him, and such loss would, had the State law continued to be in force, have been set off against the profits and gains, if any, from the same business chargeable to tax in the said year of assessment or in any year subsequent thereto, such loss would be so set off in the same manner, to the same extent, and up to the same year of assessment as it would have been set off had the State law continued to be in force.
" 611 The critical words are those contained in the later part, namely, "in the same manner, to the same extent, and up to the same year of assessment, as it would have been set off had the State law continued to be in force".
They show that the law to apply to the loss of "any previous year prior to the previous year for the assessment for the year ending on the 31st day of March, 1950" was the law in force in a Part B State here, the Travancore Act.
Now, taking the case of the assessee Company, we shall indicate which previous year or years would be governed by the Travancore Act.
The previous year of the assessee Company for the assessment year ending 31st day of March 1950 would be the Calendar year, 1 1 1949 to 31 12 1949.
To that, the Indian Income tax Act would apply.
The application of the Travancore Act by para 3 of the order was limited to the previous year before 1 1 1949 and other earlier previous years.
The previous year, with which we are concerned, 1 1 1946 to 31 12 1946, is so clearly a previous year, to which the Travancore Act applies.
that it does not admit of any doubt or difference.
The matter is thus governed by the Travancore Act.
The Travancore Act laid down, inter alia, that a loss arising in the previous year for the assessment for the year ending on the last day of Karkadakom, 1123, could be carried forward for two years.
The assessment year for 1123, M.E. covered the period, 17 8 1947 to 16 8 1948, and the previous year of the assessee Company relative to that assessment year was 1 1 1946 to 31 12 1946.
The loss of the Calendar year, 1946 could be carried forward to the Calendar years, 1947 and 1948 and given effect to, till the assessment year, 1125 (17 8 1949 to 16 8 1950).
The assessment year, 1 4 1951 to 31 3 1952, corresponded to the account year of the assessee Company, 1 1 1950 to 31 12 1950, and that is beyond two years, whether one takes 612 the account year or the assessment year as the basis of the calculation of two years.
The High Court, with all due respect, was not right in thinking that the Removal of Difficulties Order, 1950 was meant to enlarge the rights of the new assessees brought within the reach of the Indian Income tax law.
The intention of the law was to make a dividing line between those previous years to which the provisions of the earlier law would apply, and those previous years to which the provisions of the Indian Income tax Act would apply.
The rights were neither enlarged nor curtailed.
As pointed out by Chagla, C.J. in the Indore Malwa United Mills Ltd. vs Commissioner of Income tax (1).
"the only right integration has given to an assessee is the right contained in clauses (sic) 3 of the (Removal of Difficulties) Order, 1950 and that right is that if the law of his own State permitted him to carry forward the losses, then that right is preserved under the Indian Income tax Act.
" paragraph 3 of the Order clearly said that the right was available in the same manner, to the same extent and up to the year of assessment, as laid down in the State law (here, the Travancore Act).
Since in this case, the carry forward of the loss was for only two years and those years were before the previous year from which the Indian Income tax Act began to apply, there is no question of the application of the Indian Income tax Act.
The appeal thus succeeds, and is allowed.
The assessee Company shall pay the costs of the appeal in the High Court, but there shall be no order about costs in this Court.
Appeal allowed.
| The respondent company was incorporated in the former State of Travancore.
The dispute was about the right of the respondent assessee company to carry forward the loss of the years 1946 under the provisions of the Travancore Act read with section 24 (2) of the Indian Income tax Act and the Taxation laws (Part B States)(Removal of Difficulties) Order, 1950, to the assessment year 1951 52 in the assessment of the company for its year of account.
The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year, since it had lapsed after two years under section 32 of the Travancore Act and section 24 (2) was not applicable, in view of para 3 of the order. ^ Held, that the Taxation laws (Part B State) (Removal of Difficulties) Order, 1950, passed under section 12 of the Indian 606 Finance Act, 1950, was not intended to make a dividing line between those previous years to which the provisions of the earlier law would apply, and those previous years to which the provisions of the Income tax Act would apply.
The rights were neither enlarged or curtailed by para 3 of the order.
That paragraph said that the right was available in the same manner, to the same extent and upto the same year of assessment as laid down in the State law.
The law to apply was thus the State law and the carry forward could only be for two years.
Indore Malwa United Mills Ltd. vs Commissioner of Income tax, (1959) 35 I. T. R. 271, approved.
|
Civil Appeal Nos.
1286 1291 of 1973.
Appeals by certificate from the judgment and order dated the 30th June, 1972 of the Andhra Pradesh High Court at Hyderabad in Referred Case No. 5 of 1971.
507 A. Subba Rao for the Appellant.
S.C. Manchanda, and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The only question which arises for consideration in these six appeals by certificate is whether an order of assessment passed under the Indian Income tax Act, 1922 (hereinafter referred to as 'the Act ') by the Income tax Officer in the case of a Hindu undivided family without holding an inquiry into the validity of the claim made within a reasonable time by a member of the Hindu family that a partition had taken place among the family is liable to be merely cancelled in appeal by the Income tax Appellate Tribunal (for short, 'the Tribunal ') without a further direction to the assessing authority either to modify the assessment suitably or to pass a fresh order of assessment in accordance with law.
The assessee is a Hindu undivided family and the assessment years are 1955 56 and 1957 58 to 1961 62.
An assessment order made on May 30, 1959 in respect of the assessment year 1955 56 had been set aside by the Appellate Assistant Commissioner on February 24, 1962 with a direction to make a fresh assessment.
When fresh assessment proceedings were commenced pursuant to the above said direction in respect of the assessment year 1955 56,, the assessment proceedings for the assessment years 1957 58 and 1958 59 were also taken up.
Earlier a letter had been addressed on October, 10, 1960 by Kapurchand Shrimal to the Income tax Officer in connection with a notice received by the assessee under section 18A (1) of the Act in respect of the assessment year 1961 62 stating that all the movable and immovable properties of the assessee had been partitioned by metes and bounds under partition deeds and that the Hindu undivided family (the assessee) was no longer receiving any income as such and there was therefore no question of payment of any advance tax by it.
The second para of that letter contained a specific request to record the factum of the partition for the purpose of the Act.
Again on June 16, 1961 M/s S.G. Dastagir and Co. addressed a letter on behalf of the assessee in connection with advance tax demanded for the assessment year 1962 63, the second para of which contained a similar request for recording the factum of partition.
Before the fresh assessments were completed for the three years referred to above a third letter dated March 11, 1962 was addressed to the same 508 officer who received it on the next day itself in which again there was a claim made regarding the partition.
But this letter however was written specifically in respect of the assessment year 1957 58.
On March 21, 1962, M/s S.G. Dastagir too addressed a further letter to the Income tax Officer reminding him of the earlier letters of October 10, 1960 and June 16, 1961 and that letter stated: "Apart from these letters the matter has been discussed with you on a number of occasions personally during the course of the assessment proceedings of the year 1957 58 and your attention has already been drawn to the facts that an order under section 25A has to be passed before the completion of the assessment for the year 1957 58.
The letter dated 11th March, 1962 was addressed to you by the assessee only when it was gathered that you were going to pass the assessment order for the year 1957 58 without making the contemplated enquiry under section 25A." The assessments for the years 1955 56 to 1958 59 were however completed between August 31, 1962 and March 27, 1963 without holding an inquiry as contemplated by section 25A of the Act regarding the factum of partition.
The Income tax Officer, thereafter started an inquiry under section 25A and by his order dated March 30, 1965 refused to record the partition.
On appeal the Appellate Assistant Commissioner by his order dated November 8, 1967 set aside the said order and directed the Income tax Officer to record the partition under section 25A as on July 10, 1960.
That order became final as no appeal was filed against it by the Department.
It should be stated here that the Income tax Officer passed assessment orders against the assessee for the assessment years 1959 60, 1960 61 and 1961 62 on March 26, 1964, March 30, 1965 and March 26, 1966 respectively before the Appellate Assistant Commissioner held that the partition had taken place on July 10, 1960.
In the appeals filed before the Appellate Assistant Commissioner against the assessment orders for the years in question i.e. 1955 56 and 1957 58 to 1961 62 it was contended that the assessments were liable to be set aside on the ground that the inquiry into the claim of partition which was a condition precedent for making an order of assessment on the Hindu undivided family had not been made as required by section 25A of the Act.
The Appellate Assistant Commissioner rejected the above contention.
The assessee there upon filed appeals before the Tribunal against the orders of the 509 Appellate Assistant Commissioner and one question which was A common to all the appeals that was urged before the Tribunal was about the validity of the assessment made against the assessee (Hindu undivided family) without holding an inquiry regarding the claim of partition before the assessment proceedings were completed.
While the assessee contended that the assessments were liable to be cancelled on account of the non compliance with the mandatory provisions of section 25A of the Act it was urged on behalf of the Department that in fact there was no violation at all of section 25A and even if it was held that there was any such violation the proper order to be passed was either to direct the Income tax officer to give effect to section 25A (2) of the Act without cancelling the assessments made on the assessee or to set aside the assessments with a direction to the Income tax Officer to pass fresh orders of assessment.
On a consideration of the submissions made by the parties, the Tribunal came to the conclusion that the assessments which had been made without holding an inquiry into the claim of partition as required by section 25A of the Act were illegal and void Accordingly it cancelled the assessments and added 'We do not consider it necessary to direct fresh assessments.
It would be open to the Income tax Officer to do so if the law otherwise so permits. ' Thereafter at the instance of the Revenue a reference was made by the Tribunal to the High Court of Andhra Pradesh under section 66(1) of the Act in all the cases for a decision on the following question: "Whether on the facts and in the circumstances of the case, the assessments made by the Income tax Officer on the Hindu undivided family of Shri Kapurchand Shrimal for the years under reference without passing an order under section 25A were valid ?" We are not concerned in these appeals with another question arising out of the assessment order made for the year 1958 59 which was also referred alongwith the above common question.
The High Court after hearing the learned counsel for the parties answered the common question which arose in all the appeals stating that the assessment made by the Income tax Officer without passing the order under section 25A on the claim of partition were valid but only required modification and directed the Tribunal while giving effect to the order of the High Court to direct the Income tax Officer to modify the assessments in the light of section 25A (2) of 510 the Act.
Aggrieved by the decision of the High Court the assessee has filed these appeals.
Section 25A of the Act which arises for consideration in these cases reads thus: "25A. Assessment after partition of a Hindu undivided family (1) Where, at the time of making an assessment under section 23, it is claimed by or on behalf of any member of a Hindu family hitherto assessed as undivided that a partition has taken place among the members of such family, the Income tax Officer shall make such inquiry thereinto as he may think fit, and, if he is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions he shall record an order to that effect: Provided that no such order shall be recorded until notices of the inquiry have been served on all the members of the family.
(2) Where such an order has been passed, or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family whose joint family property has been partitioned on or after the last day on which it carried on such business, profession or vocation, the Income tax Officer shall make an assessment of the total income received by or on behalf of the joint family as such, as if no partition had taken place, and each member or group of members, shall in addition to any income tax for which he or it may be separately liable and notwithstanding anything contained in sub section (1) of section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it; and the Income tax Officer shall make assessments accordingly on the various members and groups of members in accordance with the provisions of section 23; Provided that all the members and groups of members whose joint family property has been partitioned shall be liable jointly and severally for the tax assessed on the total income received by or on behalf of the joint family as such.
511 (3) Where such an order has not been passed in respect A of a Hindu family hitherto assessed as undivided, such family shall be deemed, for the purposes of this Act, to continue to be a Hindu undivided family.
A Hindu undivided family is an entity which is treated as an assessee for the purposes of the Act.
In the Act as it was originally passed there was no effective machinery to assess the income which was received by a Hindu undivided family during an accounting year but was no longer in existence as such at the time of assessment.
By reason of section 14(1) of the Act which provided that no tax would be payable by an assessee in respect of any sum which he received as a member of a Hindu undivided family, there was further difficulty in subjecting such income tax.
Section 25A was, therefore, enacted to get over these difficulties by providing for a special procedure to be followed in a case where a claim was made that there has been a partition satisfying the tests laid down in that section.
Sub section (3) of section 25A of the Act provides that a Hindu undivided family which is being assessed as such shall be deemed for the purposes of the Act to continue to be a Hindu undivided family until an order is passed under sub section (1) of section 25A that a partition has taken place among the members of the family as stated therein.
Sub section (1) of section 25A provides that if at the time of making as assessment a claim is made by or on behalf of any member of a Hindu undivided family which is being assessed till then as undivided that a partition has taken place among the members of such family, the Income tax officer shall make such inquiry there into as he may think fit and if he is satisfied that the joint family property has been partitioned among the various members groups of members in definite portions he shall record an order to that effect.
Such order can however be made only after notices of the inquiry have been served on all the members of the family.
It may be noted that sub section (I) of section 25A does not actually prescribe the form in which such a claim can be made.
It does not also state the specific stage of the assessment proceedings when such claim should be made.
Sub section (2) of section 25A of the Act provides that where an order is passed under sub section (1) thereof recording the partition or where any person has succeeded to a business, profession or vocation formerly carried on by a Hindu undivided family where joint family property has been partitioned on or after the last day on which it carried on such business, profession or vocation the Income tax officer shall make an assessment of the total income received by or on behalf of the 512 joint family as such as if no partition had taken place and each member or group of members shall, in addition to any income tax for which he or it may be separately liable and notwithstanding any thing contained in sub section (section 14, be liable for a share of the tax on the income so assessed according to the portion of the joint family property allotted to him or it.
The Income tax officer is further authorised to make assessments accordingly on various members and groups of members in accordance with section 23 of the Act.
By virtue of the proviso to sub section (2) of section 25A of the Act the liability which so long as an order was not recorded under sub section (I) of section 25A was restricted to the assets of ., the Hindu undivided family is transformed when such an order is recorded into the personal liability of the members for the amount of tax due by the family.
In these appeals there is a finding of fact recorded by the Tribunal that a proper and valid request for recording a partition had been made as far back as October 10, 1960.
The first of the assessment orders impugned in these appeals was passed on August 31, 1962 by the Income tax officer and the other assessment orders were passed subsequently.
It is not shown that the Income tax officer before whom the claim of partition had been made on October 10, 1960 had not got reasonable time to inquire into the claim and then to make the assessment orders on the basis of the finding on the question of partition.
Admittedly all the orders of assessment were passed against the assessee (Hindu undivided family) before holding an inquiry as required by section 25A (I) of the Act into the claim of partition.
In fact the Income tax officer refused to record the partition only on March 30, 1965 but in appeal the Appellate Assistant Commissioner held that a partition had taken place as on July 10, 1960 by his order dated November 8, 1967 and that order had become final.
The questions for consideration are whether under these circumstances the orders of assessment can be treated as valid orders and if they are not whether the Income tax officer can be directed by the appellate authority to pass fresh orders of assessment in accordance with law.
The first decision relied on by the assessee is Kalwa Devadattam and two ors.
vs The Union of.
India and ors.(l) That was a case arising out of a suit in which the validity of certain assessment 513 Orders passed against a Hindu undivided family under the Act and A the proceedings instituted to recover the amounts payable under these assessment orders by sale of certain properties had been questioned.
The plaintiffs in that suit were the sons of one Nagappa.
Nagappa and the plaintiffs who formed a Hindu joint family had carried on business and the said family had been assessed to tax under the Act.
When proceedings were instituted to recover the dues under the assessment orders for the sale of some properties, the plaintiffs filed the suit contending that some of the properties could not be sold as they were their separate properties and the remaining properties could not be sold as they had been allotted to them on partition of the joint family estate on March 14, 1947 before the orders of assessment were made by the income tax authorities.
The claim of the plaintiffs based on the ground of non compliance with section 25A of the Act was rejected by this Court with these observations: "It may be assumed that by this statement within the meaning of section 25A it was claimed "by or on behalf of any member of a Hindu family hitherto assessed as undivided" that a partition had taken place among the members of his family and that the Income tax officer was bound to make an inquiry contemplated by section 25A.
But no inquiry was in fact made and no order was recorded by the Income tax officer about the partition: by virtue of sub section
(3) the Hindu family originally assessed as undivided had to be deemed for the purposes of the Act to continue to be a Hindu undivided family.
If by the assessment of the family on the footing that it continued to remain undivided Nagappa or his sons were aggrieved their remedy was to take an appropriate appeal under section 30 of the Indian Income tax Act and not a suit challenging the assessment.
The method of assessment and the procedure to be followed in that behalf are statutory, and any error or irregularity in the assessment may be rectified in the manner provided by the statute alone, for section 67 of the Indian Income tax Act bars a suit in any Civil Court to set aside or modify any assessment made under the Act.
The Income tax officer made the assessment of tax under the Act.
Granting that he committed an error in making the assessment without holding an inquiry into the partition alleged by Nagappa, the error could be rectified by resort to the machinery provided under the Act and not by a suit in a Civil Court.
" 514 This Court dismissed the suit against the Revenue on three independent grounds: (1) the suit which was in substance one for setting aside an assessment was in law not maintainable because of section 67 of the Act; (2) that in the absence of an order under section 25A (1 assessment of the Hindu joint family was properly made; and (3) even if an order recording partition was made the liability of the plaintiffs to pay income tax assessed on the family could still be enforced against them jointly and severally under section 25A (2) proviso.
The above case was not obviously one in which an order of assessment which had been passed contrary to section 25A of the Act had been challenged in an appeal under the Act.
The next case relied on by the assessee is Additional Income tax officer, Cuddapah vs A. Thimmayya & Anr.(l) There again the question raised was a different one although some of the material facts were similar to the facts in these appeals.
The facts there were those: Krishnappa and his two sons Thimmayya and Venkatanarsu constituted a Hindu undivided family which had carried on some business during the previous years corresponding to assessment years 1941 42 to 1946 47.
When the assessment proceedings for these years were pending, on May 20, 1946 Venkatanarsu claimed before the 'Income tax officer that the property of the family had been partitioned among the members of the family in definite portions.
The said claim was not disposed of till June 30, 1952.
In the meanwhile assessments for the five years in question were completed between September 30, 1948 and November 30, 1950 resulting in a tax liability of Rs. 67,750/ in the aggregate for the five years.
Appeals were preferred against the said orders of assessment but in the appeals it was not contended that the orders were illegal as no inquiry had been made as contemplated in section 25A (1).
The appeals were unsuccessful.
On June 30, 1952, the Income tax officer made an order under section 25A recording that a partition had taken place on November 2, 1946.
As the tax due was not paid the Income tax officer made the order under section 46(S) of the Act on June 25, 1958 calling upon the managing director of a private limited company which had taken over the business of Krishnappa and his two sons not to pay the salaries payable to Thimmayya and Venkatanarsu by the company and to pay it to the credit of Government of India towards the payment of arrears of income tax referred to above.
Thimmayya and 515 Venkatanarsu questioned that order before the High Court under A Article 226 of the Constitution.
The High Court held that the order on the claim made under section 25A(I) on June 30, 1952, was given "a clear retrospective operation", and the Income tax officer was bound "to give effect to that order recognising the partition and to follow up the consequences which flowed from the order".
In the view of the High Court, the petitioners were entitled to insist upon an order for apportionment under section 25A (2) and without such an order, proceedings for collection of tax could not be commenced against them under the proviso to sub section (2) of section 25A.
On appeal this Court held that because prior to the orders of assessment there was no order recording that the property of the family had been partitioned among the members of the family no personal liability of the members arose under the proviso to section 25A (2) to pay the tax assessed thereunder and the remedy of income tax authorities was to proceed against the property, if any, of the Hindu undivided family.
It was therefore held that the Income tax officer was not competent to make the order under section 46 (5) directing the company to withhold the tax from the salaries payable to Thimmayya and Venkatanarasu.
The relevant observations of this Court are these: "In the present case no orders were recorded by the lncome tax officer at the time of making assessments in respect of the five years, and therefore no personal liability of the members of the family arose under the proviso to sub section (2).
The Income tax officer does not seek to reach in the hands of Thimmayya and Venkatanarsu the property which was once the property of the Hindu undivided family: he seeks to reach the personal income of the two respondents.
That the Income tax officer could do only if by virtue of the proviso to sub section (2) a personal liability has arisen against them.
In the absence of an order under sub section (1), however, such a liability does not arise against the members of the Hindu undivided family, even if the family is disrupted.
We are therefore of the view, but not for the reasons mentioned by the High Court, that because there has been before the orders of assessment no order recording that the property of the family has been partitioned among the members, the two respondents are not personally liable to satisfy the tax due by the joint family.
The remedy of the income tax authorities, in the circumstances of the case, 516 was to proceed against the property, if any, of the Hindu undivided family.
That admittedly they have not done.
" It will be seen that in this case no question was raised as to whether the assessment orders were void as they were passed without holding an inquiry as required by section 25A (I) of the Act.
The only question was whether in the absence of an order under section 25A (1), any personal liability can be enforced against the members of the joint family.
Strong reliance is, however, placed on behalf of the assessee on the decision of the Andhra Pradesh High Court in Karri Ramakrishna Reddy vs Tax Recovery officer, Vijayawada( ') which involved the interpretation of section 171 of the Income tax Act, 1961, which, in so far as the question involved in these appeals is concerned, contains similar provisions.
In that case a person who was a member of a Hindu undivided family questioned in a proceeding under Article 226 of the Constitution an assessment made against the Hindu undivided family after it had been partitioned without holding an inquiry as required by section 1.71 (2) of the Income tax Act, 1961 even when a claim of partition had been made by his father in the assessment proceedings.
The petitioner therein con tended that such an order would not be binding upon the other members of the family.
The High Court accepted the contention of the petitioner therein and held that the assessment order could not be enforced against him.
This again is a case where the validity of the assessment order had been questioned not in an appeal filed against it but in a separate proceeding.
The observations made therein may not, therefore, be of much assistance to the assessee because we are concerned in these appeals with the powers of the appellate authority where appeals are filed against the assessment orders themselves contending that there has been non compliance with section 25A(I).
Moreover it appears that certain observations made in that case in respect of the decision of this Court in Additional Income tax officer, Cuddapah vs A. Thimmayya & Anr.(2) and the Full Bench decision of the Andhra Pradesh High Court in Commissioner of Income tax vs Tatavarthy Narayanamurthy (3) need further examination.
We refrain from expressing any opinion on 517 the correctness of this decision which does not even appear to have been cited before the High Court when the reference out of which these appeals arise was argued.
From a fair reading of section 25A of the Act it appears that the Income tax officer is bound to hold an inquiry into the claim of partition if it is made by or on behalf of any member of the Hindu undivided family which is being assessed hitherto as such and record a finding thereon If no such finding is recorded, sub section (3) of section 2SA of the Act becomes clearly attracted.
When a claim is made in time and the assessment is made on the Hindu undivided family without holding an inquiry as contemplated by section 25A (1), the assessment is liable to be set aside in appeal as it is in clear violation of the procedure prescribed for that purpose.
The Tribunal was, therefore, right in holding that the assessments in question were liable to be set aside as there was no compliance with section 25A (l) of the Act.
It is, however, difficult to agree with the submission made on behalf of the assessee that the duty of the Tribunal ends with making a declaration that the assessments are illegal and it has no duty to issue any further direction.
It is well known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute.
The statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature.
In interpreting section 25A (l) we cannot also be oblivious to cases where there is a possibility of claims of partition being made almost at the end of the period within which assessments can be completed making it impossible for the Income tax officer to hold an inquiry as required by section 25A (1) of the Act by following the procedure prescribed therefor.
We, however, do not propose to express any opinion on the consequence that may ensue in a case where the claim of partition is made at a very late stage where it may not be reasonably possible at all to complete the inquiry before the last date before which the assessment must be completed.
In the instant case, however, since it is not established that the claim was a belated one the proper order to be passed is to set aside the assessments and to direct the Income tax officer to make fresh assessments in accordance with the procedure prescribed by law.
The Tribunal, therefore, erred in merely cancelling the assessment orders and in not issuing further directions as stated above.
518 We do not, however, agree with the orders made by the High Court by which it upheld the assessments and directed the Income tax officer to make appropriate modifications.
Such an order is clearly unwarranted in the circumstances of this case.
The order of the High Court is, therefore, set aside.
The question referred by the Tribunal to the High Court does not appear to be comprehensive enough to decide the matter satisfactorily.
The question may have to be read as including a further question regarding the nature of the orders to be passed by the Tribunal if the orders of assessments are held to be contrary to law.
In the light of the above, we hold that the orders of assessments are liable to be set aside but the Tribunal should direct the Income tax officer to make fresh assessments in accordance with law.
The appeals are accordingly disposed of.
There shall be no order as to costs.
S.R. Appeals allowed.
| Inderjit alias Billa has been detained by an order dated June 1, 1981 passed by the District Magistrate under sub section (2) of section 3 of the Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980 (PBMSECA).
The detenu submitted his representation challenging the order of detention on various grounds.
He had also made a request in writing that he be allowed the assistance of counsel during the hearing before the Advisory Board, but the Government did not accede to his request in view of section 11 of the Act.
On the contrary.
at the time of hearing before the Advisory Board the State was assisted by Public Prosecutor, two attorneys, a District Legal Advisor and a Legal Assistant.
Even at this stage, the detenu requested in writing for aid of a counsel but the same was rejected.
The State Government confirmed the detention under section 12 of the Act.
The father of the detenu, therefore, challenges the order of confirmation of the detention by the State.
Allowing the writ petition, the Court. ^ HELD 1:1.
Under Article 22(3)(b) of the Constitution, the right to consult and be defended by a legal practitioner of his choice is denied to any person who is arrested or detained under any law providing for preventive detention.
Subsection (3) of section 11 of the Prevention of Black marketing and Maintenance of Supplies of Essential Commodities Act, 1980 is undoubtedly in conformity with Article 22(3) (b) of the Constitution.
Normally, lawyers have no place in the proceedings before the Advisory Board.
[723 D] 1:2.
Upon the terms of sub section (4) of section 11 of the Act the detenu had no right to legal assistance in the proceedings before the Advisory Board but it did not preclude the Board to allow such assistance to the detenu when it allowed the State to be represented by an array of lawyers.
Kavita vs The State of Maharashtra & Ors., [1982] 1 SCR p. 138 is an authority for the proposition that while there is no right under section 8(e) of the COFEPOSA Act to legal 719 assistance to a detenu in the proceedings before the Advisory Board is entitled to make such a request to the Board and the Board is bound to consider such a request when so made.
[727 G H, 728 A B] Smt.
Kavita vs The State of Maharashtra & Ors., [1982] 1 SCR p. 138 distinguished.
The Advisory Board is entitled to devise its own procedure.
The functions of the Advisory Board are purely consultative.
It is an independent body constituted under section 9 of the Act consisting of a sitting judge as the Chairman and not less than two other members, who may be sitting or retired judges of the High Court.
It is expected that the Advisory Board would set in a fair and impartial manner in making a report whether or not there is, in its opinion, sufficient cause for the detention of person.
In coming to that conclusion, the Board has to make an objective determination on the question as to whether there was sufficient material on which the subjective satisfaction of the detaining authority could be based.
Under sub section (1) of section 11 of the Act, the Advisory Board may also call for such further information as it may deem necessary for the appropriate Govt.
Or from the person 'concerned and if, in any particular case, it considers essential to do so or if the person concerned desires to be heard, shall hear him in person.
Arbitrariness is the very antithesis of Article 14.
The principle of reasonableness is an essential element of equality and the procedure contemplated by Article 21 must answer the test of reasonableness in order to be in conformity with Article 14.
The history of personal liberty is largely the history of procedural safeguards.
The need for observance of procedural safeguards, particularly in cases of deprivation of life and liberty is, therefore, of prime importance to the body politic.
In the context of 'deprivation of life and liberty ' under Article 21, the 'procedure established by law ' carried with it the inherent right to legal assistance.
The right to be heard before the Advisory Board would be, in many cases, of little avail it did not comprehend the right to be heard by the counsel.
[723 D G, 725 C D, F, 726 B C] E.P. Royappa vs Tamil Nadu, [ , Maneka Gandhi vs Union of India.
[1978] 2 SCR 621; Francis Coralie Mullin vs The Administrator, Union Territory of Delhi and Ors. ; at 531; reiterated.
The State Government while confirming the detention order under section 12 of the Act has not only to peruse the report of the Advisory Board, but also to apply its mind to the material on record.
If the record itself was not before the State Government as is evident from there turns filed in reply to the writ petition before this Court, it follows that the order passed by the State Government under section 12 of the Act was without due application of mind, which is a serious infirmity in the case which makes the continued detention of the detenu illegal.
[728 B D] OBlTER: It is expected that Parliament while making a law regulate the procedure before an Advisory Board under Article 22(7) (c) of the Constitution should provide the right to consult and be defended by a legal practitioner of his choice.
It is incomprehensible that a person committing a crime should 720 have under Article 22(1) of the Constitution the right to consult and be defended by a legal practitioner of his choice, but a person under preventive detention more often than not for his political beliefs should be deprived of this valuable right.
It cannot be denied that preventive detention is an anachronism in a democratic society like ours.
The detention of individuals without trial for any length of time, however short, is wholly inconsistent with the basic ideals of a parliamentary system of government.
In the nature of things, under the law as it exists, a person under preventive detention is not entitled to legal assistance.
The matter is essentially political and as such it is the concern of the statesmen and, therefore, within the domain of the Legislature, and not Judiciary.
[726 C F]
|
Appeal No. 165 of 1951.
Appeal by special leave granted by the Supreme Court on the 27th March, 1951, from the Judgement and Order dated the 22nd March, 1950, of the High Court of Judicature at Bombay (Chagla C. J. and Tendolkar J.) in its Original Civil Jurisdiction in Income tax Reference No. 30 of 1947.
M.C. Setalvad, Attorney General for India (G. N. Joshi, with him) for the Commissioner of Income tax.
B.J. M. Mackenna (P. N. Mehta, with him) for the res pondent.
October 26.
The Judgement of the Court was deli vered by DAS J. L/B(D)2SCI 5(a) 292 DAS J.
This is an appeal, by special leave granted by this court, from the judgment and order pronounced by the High Court of Judicature at Bombay on the 22nd March, 1950, on a reference (I. T. Reference No. 30 of 1947) made by the Income tax Appellate Tribunal at the instance of the appellant under section 66(1) of the Income tax Act (XI of 1922).
The facts necessary to be stated for the purpose of disposing of the present appeal are these: The Royal Western India Turf Club Ltd. (hereinafter referred to as the "com pany") was incorporated in 1925 under the Indian Companies Act, 1913.
The objects for which the company was incorporated were, inter alia as follows: (a) To take over the assets, effects and liabilities of the then unincorported club known as the Western India Turf Club; (b) to carry on the business of a Race Course Company in all its branches. . . ; (c) to establish any Clubs, Hotels and other conveniences in connection with the property of the company; (d) to carry on the business of Hotel Keepers, Tavern Keepers,licensed victuallers and refreshment purveyors , (e) to sell, improve, manage, develop, lease, mortgage, dispose of or otherwise deal with all or any part of the property of the company, whether movable or immovable, with power especially to sell and distribute or to permit to be sold and distributed wines, spirits, tobacco and other stores.
The liability of the members is limited by guarantee, each member undertaking to contribute to the assests of the company, in the event of its being wound up, such sum as May be required, not exceeding one rupee, for payment of the debts and liabilities of the company and the costs, charges and expenses of the winding up.
Clause 6 of the memorandum provides that if upon the winding up or dissolution of the company there remains after the satisfaction of all debts and liabilities any property whatsoever, the same would be 293 paid to or distributed among the members of the club in equal shares.
Under the company 's articles of association that were in force during the accounting year, besides Honorary Stand Members, Visiting Members and Temporary Members there were two main categories of members, namely, the Club Members and Stand Members.
The number of Club Members was limited to 350, exclusive of four designated high dignitaries and the number of Stand, Members was liable to be limited by the committee at any time.
Club Members and Stand Members had to be elected by ballot by the committee.
On election every Club member had to pay an entrance fee of Rs. 150 and a stand member had to pay an entrance fee of Rs. 75 Members of either class had also to pay an annual subscription of Rs. 25.
The entire management of the company and the control over its funds and property were left in the hands of a committee of nine Club Members elected as provided in the articles of association of the company.
The company was and is the lessee of two plots of land,, one in Bombay and the other in Poona.
Two race courses have been laid out on these plots of land.
On each race course there are three enclosures known as Members ' Enclosure, First Enclosure and Second Enclosure.
Each enclosure has a stand or stands from which races are watched.
The Members ' Enclosure is for the exclusive use of the members, their wives and unmarried daughters above the age of 12 years and their guests.
The First and Second Enclosures are open to the public.
For admission into each of the three enclosures an admission fee is charged.
In the Members ' Enclosure admission is by season tickets or daily admission gate tickets.
Private Boxes in the Members ' Enclosure are avilable to members on payment according to the number of chairs in the box.
In addition to the admission fees to the Members ' Enclosure, a member has to pay, in respect of his guests, an additional fee.
In each of the enclosures there is a totalisator run on the parimutuel system at which 294 persons in that enclosure place their bets on each race.
These several totalisators are linked by electric appliances, so that the moneys received from members and non members are included in one pool and distributed amongst the holders of the winning tickets in equal proportions.
In each enclosure there is arrangement for the supply of refreshments on payment.
The present disputes arose in connection with the assessment of the company 's income, profits or gains in the accounting year 1st July, 1938, to 30th June, 1939.
The company received large sums of money on admission tickets from members as well as from non members besides other moneys on other accounts.
The company claimed that in computing its total income, the following four items of receipts should be excluded: (1) Season admission tickets from members Rs. 23,635 (2) Daily admission gate tickets from members Rs. 51,777 (3) Use of private boxes by members Rs. 21,490 (4) Income from entries and forfeits received from the members whose horses did not run in the races durring the season Rs. 82,490 There was no dispute as to the liability of the company in respect of moneys received from non members and moneys received on all other accounts.
The Income tax 0officer held that all the four items mentioned above were receipts from business falling under section 10(1) of the Income tax Act or, in the alternative, were receipts by an association performing specific services for its members for remuneration definitely related to those services within the meaning of section 10(6) of the Act and assessed accordingly.
On appeal by the company the Appellate Assistant Commissioner dismissed the appeal.
He held that the company was carrying ing on business and that all the above mentioned four on business and that all the above mentioned four items were receipts from business within the meaning of section 10(1), although none of those items fell within section 10(6).
295 On a further appeal by the company to the Income tax Appel late Tribunal the latter came to the conclusion that none of the sums in question could be said to be profits or gains of a business coming under section 10(1).
The Tribunal also held that items 1, 2 and 3 did not also come within the ambit of section 10(6) of the Act.
Apparently the Tribunal did not consider the applicability of section 10(6) with regard to the fourth item.
On the application of the Commissioner of Income tax, Bombay, the Appellate Tribunal, under section 66(i) of the Act referred the following two questions for the opinion of the Bombay High Court, namely (1) whether on the facts found or admitted in the case, The Royal Western India Turf Club Ltd., Bombay, received the sums of Rs. 23,635, Rs. 51,777, Rs. 21,490 and Rs. 82,490 from a business carried on by it with the members within the meaning of section 10(1) of the Indian Income, tax Act? (2) whether on the facts found or admitted in the case, The Royal Western India Turf Club Ltd., Bombay, received the sums of Rs. 23,635, Rs. 51,777 and Rs. 21,490 [and Rs. 82,490 with regard to which sum the Tribunal did not consider the applicability of section 10(6)] as a trade, professional or similar association performing services for its members for remuneration definitely related to those services within the meaning of section 10(6) of the Indian Income tax Act? The reference having come up for hearing the High Court found that the statement of the case was insufficient and incomplete and accordingly it sent back the reference to the Appellate Tribunal with directions to submit a proper statement of facts.
The Appellate Tribunal thereupon sub mitted a supplementary statement of the case setting forth in greater detail the facts necessary for the disposal of the reference.
On further hearing of the reference in the light of this supplementary statement of the case the High Court held that the company performed two distinct functions, namely, the carrying on of the business of racing and the carrying on of the club and that the first three items of 296 Rs. 23,635, Rs. 51,777 and Rs. 21,490 were charged to the members in respect of the various amenities specified in the supplementary statement of the case which were given by the club only to its members namely, the use of the Members ' Enclosure on payment of admission fee, the use of the members ' totalisator, the right to watch the races from the lawn or from an unreserved seat in the Members ' stand, the use of a private box subject to payment and the use of the Guest House at Poona.
Accordingly the High Court held that the said first three items did not fall either under section 10(1) or section 10(6) of the Act.
With regard to the sum of Rs. 82,490 the High Court held that it did not come under section 10(6) but was a part of the income of the business of horse racing done by the company.
Accordingly the High Court answered question No. I in the negative as regards the first three items of Rs. 23,635, Rs. 51,777 and Rs. 21,490 and in the affirmative as regards the fourth item of Rs. 82,490 and it answered question No. 2 in the negative in respect of the first three items and in the affirmative with regard to the fourth item.
In effect the High Court held that the first three items were not taxable either under section 10 (1) or section 10(6) and that the fourth item was taxable under both the said sub sections of that section.
The Bombay High Court having dismissed the application of the Commissioner of Income tax under section 66 A (2) to appeal to this court, the Commissioner applied for and obtained special leave to appeal to this court.
The company has not appealed from that part of the order which declared that the fourth item of Rs. 82,490 was taxable.
Therefore, the questions we have to decide in this appeal are: (1) whether the first three items are receipts from business carried on by the company, and (2) whether those three items are receipts by a trade or professional or similar association performing specific services for its members for remuneration definitely related to those services.
On the first point our attention is drawn to the objects of the company as set forth in its memorandum of associa 297 tion.
It appears that the objects of the company are, inter alia, to carry on the business of a Race Course company in all its branches and to carry on the business of Hotel Keepers, tavern keepers, licensed victuallers and refreshment purveyors.
Although this circumstance may not be decisive, it cannot ,it the same time be overlooked altogether.
It has to be noted as one of the material facts.
Then we have the fact that so far as non members are concerned the company does carry on a horse racing business and the moneys it realises from nonmembers for admission into the First and Second Enclosures to watch the races from an unreserved seat therein and for the use of the totalisator and other amenities are income, profits or gains of that business.
It is also to be noted that the rates of daily admission fee charged on the non members for ad mission into the First Enclosure and for the railway tickets are exactly the same as those charged from the members for admission into the Members ' Enclosure.
Finally, it has been declared by the High Court by the order under appeal and it is now accepted by the company that the company derived the sum of Rs. 82,490 (the fourth item mentioned above) from the horse racing business carried on by it with its members within the meaning of section 10(1) of the Act.
If this sum of Rs. 82,490 received from members represents, as held by the High Court, a part of the income of the horse racing business, why are not the first three items of receipts also parts of the income, profits or gains of that very business? On what principle or authority are those three items to be excluded from the computation of the total business, income of the company? In support of its claim for exemption from tax liability in respect of these three items the company relies on the principles laid down by the House of Lords in the much dis cussed case of The New York Life Insurance Co. vs Styles (Surveyor of Taxes)(1).
The appellant in that case was an incorporated company.
The company issued life policies of two kinds, namely, participating and non participating.
There were no shares or shareholders in the ordinary sense of (1) ; L.R. 14 App.
298 the term but each and every holder of a participating policy became ipso facto a member of the company and as such became entitled to a share in the assets and liable for a share in the losses.
A calculation was made by the company of the probable death rate among the members and the probable expenses and liabilities and calls in the shape of premia were made on the members accordingly.
An account used to be taken annually and the greater part of the surplus of such premia over the expenditure referable to such policies was returned to the members i.e., (holders of participating policies) and the balance was carried forward as fund in hand to the credit of the general body of members.
The question was whether the surplus returned to the members was liable to be assessed to income tax as profits or gains.
The majority of the Law Lords answered the question in the negative.
It will be noticed that in that case the members had associated themselves together for the purpose of insuring each other 's life on the principle of mutual assurance, that is to say, they contributed annually to a common fund out of which payments were to be made, in the event of death, to the representatives of the deceased members.
Those persons were alone the owners of the common fund and they alone were entitled to participate in the surplus.
It was, therefore, a case of mutual assurance and the individuals insured and those associated for the purpose of meeting the policies when they fell in and receiving the surplus, were identical and it was said that that identity was not destroyed by the incorporation of the company.
Lord Watson even went to the length of saying that the company in that case did not carry on any business at all, which perhaps was stating the position a little too widely as pointed out by Viscount Cave in a later case; but, be that as it may, all the noble Lords who formed the majority were of the view that what the members received were not profits but were their respective shares of the excess amount contributed by themselves.
The cases of The Cornish Mutual Assurance Co. Ltd. vs The Commissioners of Inland Revenue(1) and Jones vs South (1) ; ; 299 Wales Lanacashire Coal Owners ' Association Ltd.(1), both of which were cases of mutual assurance companies with the liability of the members limited by guarantee carry the mater no further.
Indeed, the decision in the Cornish case as to the surplus of the contributions over the expenses would have been the same as in Styles ' case (supra) but for the special provisions of section 52(2)(b) according to which profit was made to include in the case of mutual trading concerns the surplus arising from transactions with members.
Jones ' case also shows that the fact that under the rules the surplus was not distributable except on the winding up of the company makes no difference in the application of the principle laid down in Styles ' case (supra).
Municipal Mutual Insurance Ltd. vs Hills(2) was relied on by the learned Attorney General as showing the real ground on which Styles ' case (supra) was decided.
The appellant there was an incorporated company.
It was formed by the representatives of various local authorities by co operation to insure against fire on favourable terms.
Effective control was in the hands of the fire policy holders who alone were entitled, on winding up of the company, to participate in the surplus assets.
In course of time the company undertook an extensive business in employers ' liability and miscellaneous insurance.
The Crown admitted that fire insurance business which was a mutual business was not taxable.
The company admitted that the employers ' liability and miscellaneous insurance business done with outsiders were liable to tax.
The question was whether the employers ' liability and miscellaneous insurance business done with fire policy holders who were members of the company were liable to be brought to charge.
It was held by Rowlatt J. that they were and this decision was upheld by the Court of Appeal and the House of Lords.
The argument in that case was that where the person with whom employers ' liability or miscellaneous insurance business was done happened to be also a fire policy holder, the profit or surplus arising from that (1) ; (2) [1932] 16 Tax Cas.
430; 48 T.L.R. 301; 300 operation came back into a body of which he himself was a member.
This circumstance, it was claimed, made it mutual and as such exempt from taxation under Styles ' case.
This argument was repelled by Rowlatt J. on the ground, inter alia, that there was not the slightest distinction between what was made out of a member in respect of non fire busi ness and what was made out of a non member out of non fire business, for qua that business the member was a stranger.
In other words, there was no identity in character of the contributor and the participator.
Said Viscount Dunedin in the House of Lords: "In so far as the surplus arises from a fire policy they are really entitled to the money as being those who contri buted it and accordingly it has been admitted that any profit made on the fire policies is governed by the New York case.
But as regards employers liability business and miscellaneous business it does not go to the contributors for, as fire policy holders in a body, they have not 00contributed and therefore the business is in the same position as business with complete outsiders, the surpluses in which are admitted to be profit.
" Lord, Macmillan said at page 447 of the report in Tax Cases: "The cardinal requirement is that all contributors to the common fund must be entitled to participate in the surplus and that all the participators in the surplus must be contributors to the common fund; in other words there must be complete identity between the contributors and the participators.
If this requirement is satisfied, the particular form which the association takes is immaterial.
" Styles ' case (supra) has recently been examined and explained by the Judicial Committee in English & Scottish Joint Co operative Wholesale Society Ltd. vs Commissioner of Agricultural Income tax, Assam(1).
After referring to various passages from the speeches of the different Law Lords in Styles ' case, Lord Normand, who delivered the judg ment of the Board, summarised the grounds of the decision in Styles ' case as follows: (1) ; 75 I.A. 196; 301 "From these quotations it appears that the exemption was based on (1) the identity of the contributors to the fund and the recipients from the fund, (2) the treatment of the company, though incorporated as a mere entity for the con venience of the members and policy holders, in other words, as an instrument obedient to their mandate and (3) the im possibility that contributors should derive profits from contributions made by themselves to a fund which could only be expended or returned to themselves." The Judicial Committee held that none of these grounds was available on the special facts of the case before them and, therefore, the principles laid down in Styles ' case (supra) were wholly inapplicable to that case.
It is clear to us, taking the facts admitted or found in the case before us, that the principles of Styles ' case, as ex plained by subsequent decisions noted above, can have no application to this case.
Here there is no mutual dealing between the members inter se in the nature of mutual insur ance, no contribution to a common fund put up for payment of liabilities undertaken by each contributor to the other contributors and no refund of surplus to the contributors.
There being no mutual dealing the question as to the com plete identity of the contributors and the participators need not be raised or considered.
Suffice it to say that in the absence, as there is in the present case, of any dealing between the members inter se in the nature of mutual insurance the principles laid down in Styles ' case and the cases that followed it can have no application here.
The principle that no one can make a profit out of himself is true enough but may in its application easily lead to confusion.
There is nothing per se to prevent a company from making a profit out of its own members.
Thus a railway company which earns profits by carrying passengers may also make a profit by carrying its shareholders or a trading company may make a profit out of its trading with its members besides the profit it makes from the general public which deals with it but that profit belongs to the members as shareholders and does not come back to them as persons who had contribued 302 them.
Where a company collects money from its members and applies it for their benefit not as shareholders but as per sons who put up the fund the company makes no profit.
In such cases where there is identity in the character of those who contribute and, of those who participate in the surplus, the fact of incorporation may be immaterial and the incor porated company may well be regarded as a mere instrument, a convenient agent for carrying out what the members might more laboriously do for themselves.
But it cannot be said that incorporation which brings into being a legal entity separate from its constituent members is to be disregarded always and that the legal entity can never make a profit out of its own members.
What kinds of business other than mutual insurance may claim exemption from tax liability under section 10(1) of the Act under the principles of Styles ' case need not be here considered; it is clear to us that those principles cannot apply to an incorporated com pany which carries on the business of horse racing and realises money both from the members and from non members for the same consideration, namely, by the giving of the same or similar facilities to all alike in course of one and the same business carried on by it.
Learned counsel for the company then contends that the carrying on of the business of horse racing is not the only function or activity of the company.
It also runs a club, that is to say, an association of persons who co operate to provide for themselves social, sporting and similar amenities.
If the contributions from the members of the club exceed the cost of providing the amenities and if the surplus is held for the benefit of the members such surplus, according to him, is not taxable.
For this purpose no dis tinction, it is said, can be made between the entrance fees or the periodical subscriptions or any other sum (e.g., ad mission fee, daily or seasonal) paid by the members for the right to make use of the amenities provided by the club.
For the purposes of this argument it is said to be immaterial whether the club is an incorporated company or an unregistered association.
Finally it is urged that the fact that a 303 club has business dealings with the public in respect of which tax is payable does not render the club liable to tax in respect of the difference between the cost of providing amenities for its members and the contribution towards this cost which the club takes from its members either by way of subscription or of charges for the use of club amenities.
The advantage of a member, it is pointed out, is that he can meet his fellow members in the Members ' Enclosure without having to rub his shoulders with the members of the public who have no right of entry in the Members ' Enclosure and he cart also have the various other amenities provided ex clusively for members which are listed in the supplementary statement of the case.
Reference is made by learned counsel to several club cases, English and Indian, and other cases in support of his contentions.
Styles ' case and other cases of mutual dealing have already been dealt with and need not be referred to again.
It will suffice now to examine the club cases.
The earliest club case cited before us is that of Carlisle and Silloth Golf Club vs Smith(1).
In that case the club was an unincorporated association of members who paid subs cription and became entitled to play on the golf links of the club.
There was no question of division of profits.
Under the lease between the club and its lessors the club was bound to admit visitors on payment of "green fees".
The only question was whether the profits arising out of the "green fees" collected from outsiders were taxable.
In course of his judgment Buckley L. J. referred to Styles ' case and said that a man could not make a profit or loss out of himself and, that that was the ground of decision in Styles ' case.
It should not, however, be overlooked that the question whether the profits arising out of the members ' subscription were assessable or not was not in issue in that case at all.
That decision, therefore, does not help the company in this case.
In the Royal Calcutta Turf Club vs Secretary of State(1) the assessee was an unincorporated club.
It was held that (1) [1913]3 K.B. 75; (2) Cal. 841; A.I.R. (1921) Cal 633; 304 the club carried on business within the meaning of the Excess Profits Duty Act (X of 1919) and was liable to pay tax in respect of money received from the public by way of entrance fees to the stand, entry fees for race horses, book makers ' license fees and percentages of the totalisator.
There, as in the Carlisle and Siiloth Golf Club case (supra), no question was raised as to the taxability of moneys paid by the members of the clubs.
The case of the United Services Club, Simla vs The Crown(1) has been strongly relied on by learned counsel for the company.
There the club was an incorporated company.
it had no dealings with outsiders and derived no profit from outsiders.
The question was directly raised as to whether the income derived from its members was taxable profit.
It was held, on the authority of Styles ' case and the Carlisle & Silloth Golf Club case.
that under the English law the in come derived by a society or club from its members was not liable to tax and that the same principle should be followed in India.
The proposition so broadly stated overlooks the real grounds of the decision in Styles ' case as explained in later cases and cannot be accepted as an accurate statement of the English law.
In Carlisle & Silloth Golf Club case as in the Royal Calcutta Turf Club case, as already stated, the question of the moneys received from members was not in issue at all.
In this case, namely, in the United Services Club case, there was no dealing between the company and the outside public at all and the surplus was derived by the club only out of its dealings with its members.
There was no mutual dealing between the members inter se and there was no question of distribution of any surplus amongst the members and, therefore, there could be no question of identity of contributors and participators and as such the company could not claim exemption from tax under the principles of either of the two cases relied on by Martineau J.
His decision can only be supported on the ground that the (1) Lah. 109; A.I.R. 1921 Lab. 208; 1 I.T.C. 113.
305 club did not really carry on any business with its members with a view to earning profits and, therefore, the surplus of receipts from the members over the expenditure could not be said, to be profit of any business which could be assessed to tax.
The next case is what is known as the Eccentric Club case(1).
In that case a company limited by guarantee carried on a social club, its objects being to promote social intercourse amongst gentlemen connected (directly or indirectly) with literature, art, music, the drama, the scientific and liberal professions, sports and commerce, to establish a club and generally to afford to members the usual privileges and advantages of a club, to sell and deal in or arrange for supply of all kinds of provisions and refreshments.
By its memorandum of association the profits made by it were not distributable among its members either before or even after its winding up.
Payments were made by the members for services they received at the club premises, e.g., the provision of meals etc.
The company 's account showed a surplus of income over expenditure.
There was no receipt in the nature of trade from non members.
It was held by the Court of Appeal that the company was not carrying on any undertaking of a similar character to that of a trade or business within the meaning of section 53(2)(h) of the Finance Act, 1920.
Warington L.J. observed at pages 421 422 of the report in the Law Reports series: "The club proprietor, whether an individual or a company, carries on a business with a view to profit as an ordinary commercial concern.
This the present company certainly does not do.
I think the proper mode of regarding the company in the present case is as a convenient instrument for enabling the members to conduct a social club, the objects of which are immune from every taint of commerciality, the transactions of sale and purchase being purely incidental to the attainment of the main object.
What is in fact being carried on, putting technicalities aside, is a members club and not a proprietary club nor any undertaking of a similar character.
" (1) [ ; 12 Tax Cas, 05 8. 306 There was in that case no carrying on of any business with any outsider.
The dealings with members were really not in the way of any trade or business and it is only on that basis that the profits were held not to fall within the Finance Act.
The position of the company in the United Services Club case (supra) was similar and, as already stated, that decision can be supported only on this principle.
The case of Dibrugarh District Club Ltd., vs Commissioner of Income tax, Assam(1), is, if anything, against the company.
There an incorporated company carried on a club for the benefit of such persons as might become members.
Under the articles of association no shareholder was entitled to the benefits and privileges of the club unless he was elected as a member.
All shareholders were not members and all members were not shareholders.
Profits were distributable only amongst the shareholders every year.
It was held that the company was assessable on the full amount of its profits derived from shareholder members as well as from non share holder members as the company was not a mutual trading society making quasi profits by trading with its own members and returning such profits to its members.
The absence of identity between the contributors and participators was quite obvious.
The case of The Maharaj Bag Club Ltd. vs Commissioner of Income tax, C.P. & Berar(2) follows the Dibrugarh Club case and carries the matter no further.
In Commissioners of Inland Revenue vs Stonehaven Recreation Ground Trustees(1) a recreation ground with facilities for tennis, bowls etc. was held on lease and managed.
by 9 trustees.
Admission to the ground was by daily, fort nightly, monthly or season tickets issued to any applicant.
Of the 9 trustees 6 were elected by the season ticket holders and the remaining by the Local Town Council.
The trustees were held assessable as carrying on a trade.
The position of the trustees was akin to that of the owner 'of a proprietary club who carried on the club with a view to earning profits.
(1) [1927]1.L. R. ; A.I.R.192S Cal.
577 ; 2I.T.C.521.
(2) (3) 8 An n. Tax Cas.
307 National Association of Local Government Officers vs Watkins(1) was concerned with an unregistered trade union having for its object the protection of the interest of employees in Local Governments and the promotion of the physical and social welfare of its members.
The Association 2purchased an existing holiday camp to provide cheap holiday facilities for its members.
Bookings were, however, for a short time accepted from non members who had previously used the camp.
By its rules the property of the Association belonged to the members and its profits enured for all members as a whole and not only for those members who used the camp.
The Association contended that its liability should be confined to the profits made from non members.
The Crown claimed, on the other hand, that as the users of the camp were not identifiable with the whole membership there was no mutual trading and the whole of the profits had been properly assessed.
Finley J. gave effect to the contentions of the Association.
The learned Judge laid emphasis on the fact that the Association was not a registered body and that, therefore, the property was the property, not of the Association but of the members themselves and that as the members owned the whole they had a right to participate in the whole and, therefore, there could not be any trade between the Association and a member or any sale to a member.
The two decisions of the Judicial Commissioners ' Court, namely, Commissioner of Income tax, Bombay vs Karachi Chamber of Commerce(1) and Commissioner of Income tax, Bombay vs Karachi Indian Merchants Association(1) were concerned with mutual dealings between members who had put up money for their mutual benefit.
The surplus went to them not as shareholders but as persons who had contributed in excess and was in no sense a profit and could not, therefore, be brought to charge.
(1) , (2) I.L.R. (1940) Ear. 140; (3) ; L/B(D)2SCI 6(a) 308 As already stated, in the instant case there is no mutual dealing between the members inter se and no putting up of a common fund for discharging the common obligations to each other undertaken by the contributors for their mutual benefit.
On the contrary, we have here an incorporated company authorised to carry on an ordinary business of a race course company and that of licensed victuallers and refreshment purveyors and in fact carrying on such a business.
There is no dispute that the dealings of the company with non members take place in the ordinary course of business carried on with a view to earning profits as in any other commercial concern.
It is further admitted that some of the dealings of the company with its members take place in the ordinary course of business and the profits arising out of those dealings, e.g, the fourth item of receipt of Rs. 82,490, are taxable.
The company gives to its members the same or similar amenities as it gives to non members, namely, the use of an unreserved seat in a stand, the facility to watch the races and to bet on the horses in the races, use of the totalisator in that stand and the facility for refreshment.
In fact the daily ticket fee for admission into the Members ' Enclosure is exactly the same as that for admission into the First Enclosure to which the public have access.
The only difference is that a sepa rate enclosure with a separate totalisator is provided for the members where they can meet their fellow members and not be disturbed by the intrusion of non members.
This privi lege is referable to their membership of the company for which they pay an entrance fee on their election as members and for which they pay the periodical subscriptions both of which are not sought to be brought to charge.
The rest of the facilities mentioned above which the members get are in substance the same as those enjoyed by the public.
Those facilities are given to members and non members alike for a price.
The character of the charge made on members is precisely the same as or is similar to that of the charges made on non members, for the company receives moneys from both members and non members in return for the same or similar facilities given to both in the course of one and the 309 same business.
The dealings in both cases disclose the same profit earning motive and are alike tainted with com merciality.
In the circumstances, all the four items of receipts from members must be taken into account in com puting the total income of the company.
In fact that the company has so long enjoyed exemption from taxation is neither here nor there, for there can be no question of acquiring any prescriptive right to exemption from taxation.
The second question need not detain us long.
The answer to that question depends on a true construction of section 10(6) of the Act.
What is the meaning of "a trade or professional or similar association"? Does this company come within any of those descriptions? It is certainly not a professional association.
Learned counsel for the company contends that a "trade association" is not the same thing as a "trading association".
According to Webster 's New Inter national Dictionary, 2nd Edn., page 264 the meaning of a "trade association" is an association of tradesmen, businessmen or manufacturers for the protection and advancement of their common interest.
In our view the company before us is not a "trade association" in this sense although it carries on a business.
In this view of the matter it is unnecessary to discuss the further question whether the facilities or amenities given by the company to its members may be regarded as "services" within the meaning of section 10(6).
We are of opinion that section 10(6) has no application, for the company is not a trade or professional or similar association within the meaning of that sub section.
The result, therefore, is that we hold that all the items of receipts from members referred to in the questions were received by the company from business with its members within the meaning of section 10(1) and that none of them was received by the company as a trade, professional or similar association within the meaning of section 10(6).
In our judgment the High Court should have answered question No. I in the affirmative and question No. 2 in the negative.
310 The appeal is allowed and we award to the Commissioner of Income tax the costs of this appeal and those of the pro ceedings in the High Court.
Appeal allowed.
| On 17th March 1948, the assessee entered into an agreement to sell his factory to a company, and on the very same day possession of all the assets of the factory was handed over to the company.
A few days later an entry was made in the company 's account showing that a sum of Rs. 2,00,000/ had been paid to the assessee and there were corresponding entries in the assessee 's accounts also.
In fact only a lakh and odd was paid to the assessee and even that amount was paid only in March 1949.
In November 1948 a sale deed was executed and registered and in March 1949 the Board of Directors of the Company ratified the sale.
For the assessment year 1948 49, the assessee had included in his return the sum of Rs. 2 lakhs as capital gains.
The Income tax Officer held that the assessee realised an excess of Rs. 79,494/ over and above the original cost, as capital gains assessable under section 12B of the Income tax Act.
The Appellate Assistant Commissioner, and the Tribunal confirmed the order.
In reference, the High Court held that it was immaterial as to when the money was actually paid because the transfer had already been made to the company by possession, that for the purpose of the section the assessee should have the right to receive the profits and not that he should have in fact received it, that entire property was transferred by giving possession to the company in the year of account, and that the income had arisen to the assessee in the year of account.
In appeal to this Court, it was contended that as the sale took place only in March 1949, when the Directors ratified the agreement of sale, no sale or transfer took place before 1st April 1948, as required by section 12B, and hence the amount was not liable to tax.
HELD: Title to the assets could not pass to the company till the conveyance was executed and registered and consequently no sale, in the instant case, took place of the assets before 1st April 1948 as required by section 12B. [574B] Commissioner of Income tax vs Bhurangya Coal Co. 34 I.T.R. 802, referred to.
Before section 12B can be attracted, title must pass to the company by any of the modes mentioned in section 12B i.e., sales exchange or transfer It is true that the word 'transfer ' is used in addition to the word 'sale ' but even so, in the context, transfer must mean effective conveyance.
of the capital asset to the transferee.
Delivery of possession of immovable property cannot by itself be treated as equivalent to conveyance of the immovable property.
[574E] The date of sale or transfer according to section 12B is the date when the sale or transfer takes place, and the entries in the account books are irrelevant for the purpose of determining such a date.
[574F G] In the present case, machinery, electrical fittings, buildings and site were not sold or transferred in the relevant year of account; only 568 one asset, namely, furniture was transferred on 17th March 1948 as title to furniture can pass by delivery.
Capital gains, if any, made by the transfer of furniture accrued on that date.
The position of goodwill is however different.
It is an intangible asset and it ordinarily passes along with the transference of the whole business and so it was not transferred before 1st April 1948.
[575A E]
|
N: Criminal Appeal No. 4 of 1976.
279 Appeal by special leave from the judgment and order dated the 29th August 1975/1st Sept., 1975 of the Bombay High Court in Criminal Appeal No. 1639 of 1972.
Ram Jethmalani, Mrs. section Bhandare, A.N. Karkhanis, T. Sridharan and C.K. Sucharita for the Appellant.
J.L. Nain, and H.R. Khanna and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
This appeal by special leave is directed against a judgment dated 29th August 1975/1st September 1975, of the Bombay High Court convicting the appellant, Mohanlal Gangaram Gehani (hereinafter referred to as A 1) under section 326, I.P.C. and sentencing him to rigorous imprisonment for three years.
He was also convicted under section 323 read with section 34 I.P.C. but no separate sentence was awarded.
The trial court had convicted A 1 under section 326/34 I.P.C. which was altered by the High Court to one under section 326 simpliciter.
The details of the prosecution case are to be found in the judgment of the High Court and it is not necessary for us to repeat the same.
We shall, however, give a brief resume of the important facts which are germane for deciding the short points raised by Mr. Jethmalani, counsel for the appellant.
The occurrence out of which the present appeal arises appears to have taken place on April 2, 1972 at about 11 11.30 p.m.
According to the prosecution while Ishrat Malik Faqih (hereinafter referred to as 'Ishrat ') was returning from a movie in Paradise Cinema, situated at Lady Jamashedji Road, Mahim at about 12 15 a.m. he met Salim, a friend of his, alongwith Shaikh Abdul Kalim alias Pappu (P.W. 4).
He also saw another person standing with Salim and Pappu.
All of them started talking to one another when suddenly they saw a black Fiat car coming from Lady Jamashedji Road and taking a turn to Chotani Road.
The car stopped near the place where the aforesaid persons were talking and A 1, A 2 (Shashi) and A 3 (Kumar) emerged from the car.
According to the informant, Ishrat, all the three accused were known to him before.
These persons were dead drunk and asked Ishrat and party as to who amongst them was their leader.
Some sort of 280 an altercation took place in the course of which A 2 caught hold of the shirt of Shanker Shetty and assaulted him with fists.
He was joined by A 3 and the altercation culminated in a murderous assault said to have been made by A 1 who took out a dagger and stabbed Shetty on the right side of the stomach below the chest.
Shetty fell down.
Thereafter A 1 ran back to his car and sped away leaving behind A 3 who could not get into the car.
Ishrat immediately proceeded to the Mahim police station and lodged an F.I.R. with Sub Inspector Sawant (P.W. 7) at 00.50 hrs.
On April 3, 1972.
According to the prosecution, the informant had rushed to the police station and lodged the F.I.R. within an hour of the occurrence.
Subsequently, it appears that a wireless police van which passed through the place of occurrence having found Shetty lying injured picked him up and removed him to K.E.M. Hospital.
Dr. Heena (P.W. 11) admitted Shetty and made a note of the injuries received by him in the notesheet of the hospital register and also mentioned the fact that the injured had named his assailant as one Tiny.
It was further alleged by the prosecution that Sawant after recording the F.I.R. rushed to the hospital and contacted Shetty and recorded his statement at 1.45 a.m. After the usual investigation, chargesheet was submitted against A 1 to A 3 who were ultimately tried and convicted for an offence under section 326 read with section 34 I.P.C. and A 1 was sentenced as mentioned hereinbefore.
A 2 and A 3 each was sentenced to suffer rigorous imprisonment for two years.
A 1 pleaded innocence and his defence was that he was falsely implicated due to enmity because Ishrat and his friends were carrying on Matka business and the appellant being an informer of the Customs Department had made certain reports against the prosecution witnesses particularly Ishrat who was a smuggler.
We need not refer to the defence of A 2 or A 3 as they have been acquitted by the High Court.
The appellant raised several points before the High Court which after hearing the parties confirmed his conviction but reduced his sentence to rigorous imprisonment for three years.
In support of the appeal Mr. Jethmalani has argued three important points relating to certain circumstances which completely demolish the entire prosecution case against the appellant.
281 In the first place, it was argued that the F.I.R. was not at all lodged at 00.50 hrs.
as alleged by the prosecution but much later.
Secondly, Shetty did not know the appellant before the occurrence and thirdly, Mr. Jethmalani argued, that his version that the name of the appellant was disclosed to him by Salim should not be accepted.
Another important circumstance to which our attention was drawn and which has greatly impressed us is that the hospital register (Ext. 22) shows that when Shetty was taken to the hospital and produced before Dr. Heena (P.W. 11) he gave the name of his assailant as one Tiny or Tony.
The evidence further shows that Tiny or Tony was undoubtedly a known person who was living in a locality near the place of occurrence and was not a fictitious red herring as the prosecution would have us believe.
According to Ext.
22 Shetty made a statement to Dr. Heena at 1.
15 a.m. on April 3, 1972.
Dr. Heena, who appeared as P.W. 11, fully supported the contents of Ext.
It is manifest that once the statement of P.W. 11 is accepted then the entire prosecution case against the appellant falls.
The High Court realising the importance of this document and the evidence of P.W. 11 seems to have explained it away on three main grounds.
In the first place, the High Court laid great emphasis on the fact that where Dr. Heena had mentioned the name of Tiny, there was no particular column where the name of assailant could be given.
We have examined the original document ourselves and we find that the entire part of the register where the statement has been recorded by P.W. 11 is described as Registrar 's note which comprehends everything including the nature of injuries of the injured, any statement made by him or similar other matters.
We are, therefore, unable to agree with the High Court that there was no particular column under which the name of the assailant could be mentioned.
Moreover, there is absolutely no evidence on the record to show that P.W. 11 was in any way friendly with the appellant or had any animus against Shetty which might impel her to make false entries in order to oblige the appellant.
P.W. 11 was an absolutely disinterested and independent witness.
After going through her evidence we find no reason why her evidence should not be accepted in toto.
The High Court further observed that from the hospital register it appears that the word 'Tony ' was first written, then crossed 282 and changed into 'Tiny '.
This may be a mistake in the pronunciation of the name and much significance cannot be attached to this circumstance because P.W. 11 had initialled the change and it is not a case of forgery at all.
Moreover, P.W. 11 was examined as a prosecution witness and if the learned prosecutor had thought that she (P.W. 11) had given false evidence to help the appellant, he could have declared her hostile and sought the permission of the court to cross examine her but no such course was adopted.
Hence, the mere change of the word 'Tony ' to Tiny ' can be explained on the basis of a bona fide mistake.
There is no erasure.
Both names are decipherable.
What may have happened was that the injured may have pronounced Tiny in such a way that P.W. 11 thought it was Tony but on further clarification the injured must have said that it was Tiny.
P.W. 11 in her evidence has clearly stated that she had examined the patient and had given the history of the assault with knife by a person called Tiny and that the patient was fully conscious.
There is nothing in her evidence to show that her statement could be untrue.
The High Court then sought to exclude the evidence of P.W. 11 as being inadmissible as the provisions of section 145 of the Evidence Act were not complied with.
It was suggested that Shetty had mentioned the name of the appellant in his statement in court but the statement of P. W. 11 shows that he had named Tiny as his assailant and, therefore, Dr. Heena (P.W. 11) should have been cross examined on this point to explain the contradiction.
With great respect, the High Court has erred on this point and has misconstrued the provisions of section 145 of the Evidence Act which may be extracted thus: "145.
Cross examination as to previous statements in writing.
A witness may be cross examined as to previous statements made by him in writing or reduced into writing, and relevant to matters in question, without such writing being shown to him, or being proved, but, if it is intended to contradict him by the writing, his attention must, before the writing can be proved, be called to those parts of it which are to be used for the purpose of contradicting him.
" 283 It is obvious from a perusal of section 145 that it applies only to cases where the same person makes two contradictory statements either in different proceedings or in two different stages of a proceeding.
If the maker of a statement is sought to be contradicted, his attention should be drawn to his previous statement under section 145.
In other words, where the statement made by a person or witness is contradicted not by his own statement but by the statement of another prosecution witness, the question of the application of section 145 does not arise.
To illustrate, we might give an instance suppose A, a prosecution witness, makes a particular statement regarding the part played by an accused but another witness B makes a statement which is inconsistent with the statement made by A, in such a case section 145 of the Evidence Act is not at all attracted.
Indeed, if the interpretation placed by the High Court is accepted, then it will be extremely difficult for an accused or a party to rely on the inter se contradiction of various witnesses and every time when the contradiction is made, the previous witness would have to be recalled for the purpose of contradiction.
This was neither the purport nor the object of section 145 of the Evidence Act.
For instance, in the instant case, if P.W. 11 had been examined under section 164 of Code of Criminal Procedure or before a committing court and made a particular statement which was contradictory to a statement made in the Sessions Court, then section 145 would have applied if the accused wanted to rely on the contradiction.
Such, however, is not the position because the evidence of P.W. 11 is not only consistent throughout but the earlier statement recorded by her can be taken to corroborate her.
There was no question of contradicting the statement of P.W. 11 by her previous or subsequent statement.
On the other hand, Dr. Heena was a prosecution witness whose statement that Shetty had named Tiny on the earliest occasion, was an admission by a prosecution witness which threw considerable doubt on the complicity of the appellant in the occurrence.
If Shetty stated in his evidence that he named A 1 (Mohanlal) then that would be a statement which was contradictory to that of P. W. 11 and the question will be which of the two statements should be preferred.
If Dr. Heena had made two inconsistent statements then only section 145 would have applied.
284 In Bishwanath Prasad & Ors.
vs Dwarka Prasad and Ors.(1) while dwelling upon a distinction between an admission and a statement to which section 145 would apply, this Court observed as follows: "In the former case an admission by a party is substantive evidence if it fulfills the requirements of section 21 of the Evidence Act; in the latter case a prior statement is used to discredit the credibility of the witness and does not become substantive evidence.
In the former there is no necessary requirement of the statement containing the admission having to be put to the party because it is evidence proprio vigor: in the latter case the Court cannot be invited to disbelieve a witness on the strength of a prior contradictory statement unless it has been put to him, as required by section 145 of the Evidence Act.
" The statement made by P.W. 11 was, therefore, an admission of a prosecution witness and if it was inconsistent with the statement made by another prosecution witness namely Shetty, there was no question of the application of section 145 of the Evidence Act which did not apply to such a case in terms.
Thus, the reason given by the High Court for distrusting the evidence of Dr. Heena is wholly unsustainable.
Moreover, the statement of the injured to Dr. Heena being the first statement in point of time must be preferred to any subsequent statement that Shetty may have made.
In fact, the admitted position is that Shetty did not know the appellant before the occurrence nor did he know his name which was disclosed to him by one Salim.
Therefore, Salim who is now dead, being the source of information of Shetty would be of doubtful admissibility as it is not covered by section 32 of the Evidence Act.
And, once we believe the evidence of P.W. 11, as we must, then the entire bottom out of the prosecution case is knocked out.
Apart from this, there is another circumstance which renders the testimony of Shetty (P.W. 5) valueless.
He admits in para 10 of his evidence (page 35 of the paperbook) that he had not seen the accused before the date of the incident, that he did not know him at all, and that he came to know the name of the accused on the 285 date of the incident and that it was Salim who had given him the name of the accused while he was being taken to the hospital.
The fact that Salim disclosed the name of the appellant to Shetty is falsified by the fact that he did not name the appellant to Dr. Heena when he reached the hospital but named one Tiny.
It is also relevant to note that Tiny Advani is not an unknown figure but is a living person as would appear from the evidence of P.W. 3, Shaikh, where he says that he knew Tiny Advani who is also known to Ishrat, Salim and Pappu and they are on greeting terms.
Another important circumstance which discredits the testimony of P.W. 5 (Shetty) is that he admits that although he did not know the accused from before the occurrence yet the accused was shown to him by the police at the police station.
The relevant statement of P.W. 5 may be extracted thus: "I had seen the accused before coming to the Court and after the incident, I had seen the accused ten days after I was discharged from the hospital.
I was shown these accused by the Police at the Police Station." Thus, as Shetty did not know the appellant before the occurrence and no Test Identification parade was held to test his power of identification and he was also shown by the police before he identified the appellant in court, his evidence becomes absolutely valueless on the question of identification.
On this ground alone, the appellant is entitled to be acquitted.
It is rather surprising that this important circumstance escaped the attention of the High Court while it laid very great stress in criticising the evidence of Dr. Heena when her evidence was true and straight forward.
For these reasons, therefore, we are unable to place any reliance on the evidence of Shetty so far as the identification of the appellant is concerned.
The other witness who knew the accused is P.W. 1 (Ishrat) who is said to have lodged the F.I.R. at Mahim police station at 12.50 a.m. on 3.4.1972.
There is clear intrinsic evidence in the case to show that the FIR was ante timed and could not have been lodged at 12.50 a.m. P.W. 7, Sawant had clearly admitted in his evidence at page 41 of the Paperbook that the station diary entry which has to contain the contents of the F.I.R. does mention that Ishrat had 286 visited the Police station and lodged the complaint.
The witness further admits that the station diary entry does not also mention anywhere that he (P.W. 7) had left the police station for K.E.M. hospital accompanied by P.W. 1, Ishrat.
He also admits that he knew the accused before the incident.
The witness further admits that although he had come to know the name of the assailant at 12.50 a.m. yet he did not take any step to arrest or cause the arrest of any one of the accused.
He has not given any explanation for this unusual conduct.
It is extremely doubtful if P.W. 1 had actually named the appellant, inspector Sawant would not have arrested him immediately after the F.I.R. was lodged or, at any rate, after he returned from the Hospital.
The evidence, however, shows that A 1 was arrested on 5.4.72, that is to say, two days after the occurrence.
No explanation for this unusual phenomenon has been given by the prosecution.
For these reasons, therefore, the statement of P.W. 1 that he lodged the F.I.R. at 12.50 a.m. on 3.4.72 and disclosed the name of the appellant becomes absolutely doubtful.
If we reject this part of the evidence of P.W. 1, then his evidence on the question of complicity of the appellant in the crime also becomes extremely doubtful.
The only other evidence against the appellant is that of P.Ws. 3 and 4.
So far as P.W. 3 is concerned his evidence also suffers from the same infirmity as that of Shetty.
P.W. 3 (Shaikh) admits at page 22 of the Paperbook that he had not seen the accused or any of the three accused before the date of the incident and that he had seen all the three for the first time at the time of the incident.
He further admits that the names of the accused were given to him by the police.
In these circumstances, therefore, if the appellant was not known to him before the incident and was identified for the first time in the court, in the absence of a test identification parade the evidence of P.W. 3 was valueless and could not be relied upon as held by this court in V.C. Shukla vs State (Delhi Administration)(1) Where this Court made the following observations: "Moreover, the identification of Tripathi by the witness for the first time in the court without being tested by a prior test identification parade was valueless.
" 287 Same view was taken in a Federal Court decision in Sahdeo Gosain & Anr.
vs The King Emperor.(1) This, therefore, disposes of the evidence of P.W. 3.
As regards the evidence of P.W. 4, the High Court itself found at page 129 of the paperbook that the learned Additional Sessions Judge had disbelieved P.W. 4, Shaikh alias Pappu.
Therefore, the evidence of P.W. 4 also goes out of consideration.
The position, therefore, is that there is absolutely no legal evidence on the basis of which the appellant could be convicted.
For the reasons given above, we are satisfied that the prosecution has not been able to prove its case against the appellant beyond reasonable doubt.
The appeal is accordingly allowed and the appellant is acquitted of the charges framed against him.
He will now be discharged from his bailbonds and need not surrender.
P.B.R. Appeal allowed.
| One Daya Ram had been murdered by shooting with a country made pistol.
The circumstantial evidence established against the appellant was (1) that he had a motive for the murder, (2) that three days before the murder the appellant had held out a threat to murder the deceased, (3) that a cartridge exhibit I was found near the cot of the deceased, and (4) that the appellant produced a country made pistol exhibit III from his house in circumstances which clearly showed that he alone could have known of its existence there.
The fire arms expert examined the recovered pistol and the cartridge and after making scientific tests was of the definite opinion that the cartridge exhibit I had been fired from the pistol exhibit III : Held, that the opinion of the fire arms expert conclusively proved that the cartridge exhibit I had been fired from the pistol exhibit III.
The circumstantial evidence was sufficient to establish the guilt of the appellant.
|
Civil Appeal No. 626 of 1981 Etc.
From the Judgment and Order dated 12.12.1980 of the Kerala High Court in Civil Revision Petition No. 2939 of 1978.
P.S. Poti, G. Viswanatha Iyer, A.K. Ganguli, T.S. Krishnamoorthy Iyer, E.M.S. Anam.
R. Sathish, M.A. Firoz, N. Sudhakar, Miss Nalini Poduval and section Balakrishnan for the appearing parties.
The following Judgments of the Court were delivered: NATARAJAN, J.
These appeals by special leave and the special leave petition have been clubbed together and listed for consideration of a common question of law involved in them, viz. whether against an order of a District Court in revision under Section 20 of the Kerala Building (Lease & Rent) Control Act 2 of 1965 (for short the Kerala Act), a further revision would lie to the High Court under Section 115 of the Code of Civil Procedure.
877 Though the question is not res integra in view of the decision of this Court in Aundal Ammal vs Sadasivan Pillai, ; [1987] 1 SCC 133: , the appeals have been listed for consideration by a Bench of three Judges of the very same question in order to see whether there is any conflict between the views taken in Aundal Ammal 's case (supra) and a later decision of this Court in Shyamaraju Hedge vs G. Venkatesha Bhat & Ors., ; and whether the view taken in the earlier case requires reconsideration.
Even at the threshold of the judgment it has to be mentioned that Aundal Ammal 's case arose under the Kerala Act whereas Shyamaraju Hedge 's case (supra) pertained to the Karnataka Rent Control Act.
Since there are essential differences between the two Acts, it is necessary to set out the relevant provisions of the two Acts and the circumstances in which the decision pertaining to each Act came to be rendered by this Court.
As per section 20(5) of the Kerala Act "a Rent Control Court" means a Court constituted under Section 3.
Under Section 3(1) "the Government may, by Notification in the Gazette appoint a person who is or is qualified to be appointed, a Munsif to be the Rent Control Court for such local areas as may be specified therein.
" Section 11 of the Act provides that a landlord can seek eviction of his tenant only by making an application to the Rent Control Court and it also sets out the grounds on which a landlord can seek eviction of his tenant.
Section 18 of the Act provides for an Appeal being preferred by an aggrieved person to the Appellate Authority.
The relevant portions of Section 18 are as under: "18.
Appeal:(1)(a) The Government may, by general or special order notified in the Gazette, confer on such officers and authorities not below the rank of a Subordinate Judge the powers of appellate authorities for the purposes of this Act in such areas or in such classes of cases as may be specified in the order.
(b) . . (2) . . (3) . . Explanation . . 878 (4) The appellate authority shall have all the powers of the Rent Control Court including the fixing of arrears or rent.
(5) The decision of the appellate authority, and subject to such decision, an order of the Rent Control Court shall be final and shall not be liable to be called in question in any Court of law, except as provided in section 20." (Emphasis supplied).
Then comes Section 20 which provides for Revisions and it reads as follows: "20.
Revision:(1) In cases where the appellate authority empowered under section 18 is a subordinate Judge, the District Court, and in other cases the High Court may, at any time, on the application of any aggrieved party, call for and examine the records relating to any order passed or proceedings taken under this Act by such authority for the purpose of satisfying itself as to the legality, regularity or propriety of such order or proceedings and may pass such order in reference thereto as it thinks fit.
(2) The costs of and incident to all proceedings before the High Court or District Court under sub section (1) shall be in it discretion.
20A. Power to remand: In disposing of an appeal or application for revision under this Act, the appellate authority, or the revising authority, as the case may be, may remand the case for fresh disposal according to such directions as it may give.
" The scope and effect of Section 20(1) read with Section 18(5) of the Kerala Act came to be examined by a Full Bench of the Kerala High Court in Vareed vs Mary, AIR 1969 Kerala 103.
The Full Bench held that since the District Court exercising revisional powers under Section 20(1) of the Kerala Act functions as a Court and not as a persona designata, the ordinary incidence of the procedure of that Court including any right of appeal or revision will be inhered to the decision rendered by the District Court.
In that view of the matter the Full Bench held that a decision of a District Court under Section 20 of the Kerala Act is undoubtedly amenable to the revisional jurisdiction 879 of the High Court especially when there is no provision in the Act providing for an appeal against an order of the District Court under Section 20 or in the alternative any express provision declaring the finality of the said order.
The decision of the Full Bench held the field for a number of years in the State of Kerala and in all subsequent cases where the competence of the High Court to entertain a revision under Section 115 C.P.C. against an order of a District Court passed under Section 20(1) of the Kerala Act was challenged the contention was repelled by reference to the judgment of the Full Bench.
One such case in point is Balagangadhara Menon vs T.V. Peter, [1984]KLT 845.
The question decided by the Full Bench, however, came to be raised before this Court, in Aundal Ammal 's case (supra).
A Bench consisting of E.S. Venkataramiah, J. and one of us (Sabyasachi Mukharji, J.) held that the ratio laid down by the Kerala High Court in Vareed 's case (supra) cannot be approved because the High Court had not properly construed Sections 18(5) and 20 of the Kerala Act.
The relevant passage in the judgment is in the following terms: "In our opinion, the Full Bench misconstrued the provisions of sub section (5) of Section 18 of the Act.
Sub section (5) of Section 18 clearly states that such decision of the appellate authority as mentioned in Section 18 of the Act shall not be liable to be questioned except in the manner under Section 20 of the Act.
There was thereby an implied prohibition or exclusion of a second revision under Section 115 of the Code of Civil Procedure to the High Court when a revision has been provided under Section 20 of the Act in question.
When Section 18(5) of the Act specifically states that "shall not be liable to be called in question in any court of law" except in the manner provided under Section 20, it cannot be said that the High Court which is a court of law and which is a civil court under the Code of Civil Procedure under Section 115 of the Code of Civil Produce could revise an order once again after revision under Section 20 of the Act.
That would mean there would be a trial by four courts, that would be repugnant to the scheme manifest in the different sections of the Act in question.
Public policy or public interest demands curtailment of law 's delay and justice demands finality with quick disposal of case.
The language of the provisions of Section 18(5) read with Section 20 inhibits further revision.
The courts must so construe.
" 880 The Bench drew support for its conclusion from an earlier decision of this Court in Veshesh Kumar vs Shanti Prasad, ; 1980(2) SCC 378: ; In that case the two questions that case the two questions that fell for consideration were: "(1) Whether the High Court possesses revisional jurisdiction under section 115, Code of Civil Procedure in respect of an order of the District Court under section 115 disposing of a revision petition? (2) Whether the High Court possesses revisional jurisdiction under section 115 against an order of the District Court under section 25, Provisional Small Cause Courts Act disposing of a revision petition?" Answering both the questions in the negative, it was held in so far as question No. 1 is concerned, as follows: ". .
In determining whether the Legislature intended a further revision petition to the High Court, regard must be had to the principle that the construction given to a statute should be such as would advance the object of the legislation and suppress the mischief sought to be cured by it.
It seems to us that to recognise a revisional power in the High Court over a revisional order passed by the District Judge would plainly defeat the object of the legislative scheme.
The intent behind the bifurcation of jurisdiction to reduce the number of revision petitions filed in the High Court would be frustrated.
The scheme would, in large measure, lose its meaning.
If a revision petition is permitted to the High Court against the revisional order of the District Court arising out of a suit of a value less than Rs.20,000, a fundamental contradiction would be allowed to invade and destroy the division of revisional power between the High Court and the District Court, for the High Court would then enjoy jurisdictional power in respect of an order arising out of a suit of a valuation below Rs.20,000.
That was never intended at all.
" The second question was answered as under: "The question before us arises in those cases only where the District Judge has exercised revisional power under section 881 25.
Is an order so made open to revision by the High Court under section 115.
Code of Civil Procedure? An examination of the several provisions of the Provincial Small Cause Courts Act indicates that it is a self sufficient code so far as the present enquiry is concerned.
For the purpose of correcting decrees or orders made by a Court of Small Causes the Act provides for an appeal and a revision in cases falling under section 24 and section 25 respectively.
Cases in which the District Judge and High Court respectively exercise revisional power, revisional powers are specifically mentioned.
A complete set of superior remedies has been incorporated in the Act.
Moreover, section 27 of the Act provides: "27.
Finality of decrees and orders.
Save as provided by this Act, a decree or order made under the foregoing provisions of this Act by a Court of Small Causes shall be final.
" The Legislature clearly intended that a decree or order made by a Court of Small Causes should be final subject only to correction by the remedies provided under the Provincial Small Cause Courts Act.
It is a point for consideration that had section 25, in its application to the State of Uttar Pradesh continued in its original form the High Court would have exercised the revisional power under section 25, and no question could have arisen of invoking the revisional power of the High Court under section 115 of the Code.
All the indications point to the conclusion that a case falling within the Provincial Small Cause Courts Act was never intended to be subject to the remedies provided by the Code of Civil Procedure.
By way of abundant caution section 7 of the Code made express provision barring the application of sections 96 to 112 and 115 of the Code to courts constituted under the Provincial Small Cause Courts Act.
Section 7 of the Code merely embodies the general principle against resort to remedies outside the Provincial Small Cause Courts Act.
Although the court of the District Judge is not a court constituted under the Act the general principle continues to take effect.
No change in the principle was brought about merely because revisional power under section 25, before the proviso was added, was now entrusted to the District Judge.
It must be remembered that the legislative intention behind the amendment was to relieve the High Court of the 882 burden of exercising revisional jurisdiction in respect of cases decided under the Provincial Small Cause Courts Act.
We are of firm opinion that the central principle continues to hold, notwithstanding the amendment effected in section 25, that the hierarchy of remedies enacted in the Provincial Small Cause Court Act represents a complete and final order of remedies, and it is not possible to proceed outside the Act to avail of a superior remedy provided by another statute.
" Taking the same view of the Kerala Act, which is also a selfcontained Act it was held in Aundal Ammal 's case (supra) that "the Full Bench of the Kerala High Court was in error and the High Court in the instant case had no jurisdiction to interfere in this matter under Section 115 CPC.
" Coming now to the Karnataka Act and the decisions of the High Court and of this Court pertaining to Section 50 read with Section 48(6) of the said Act, it is first necessary to refer to the relevant provisions of the Act as they stood before and after the amendments effected by the Amendment Act 31 of 1975.
The relevant portions of Section 48 and 50, as they stood before the amendment and after the amendment are as under: Before the Amendment After the Amendment 48.
Appeals: (1)Notwithstanding Appeals: (1) omitted.
anything contained in any law for the time being in force, every person aggrieved by an order under section 14, Section 16, Section 17 or section 21, passed by the Controller or the Court may within thirty days from the date of the order, prefer an appeal in writing to the District Judge having jurisd iction over the area in which the premises are situate.
2. . 2. . . 3. . 3. . . 4. . 4. . . 5.
The appellate authority 5.
The appllate authority shall send for the records shall send for the records of 883 of the case from the Courtthe case from the Controller and or the Controller, as the caseafter giving the parties an oppor may be, and after giving thetunity of being heard and if parties an opportunity of beingnecessary after making such further heard and if necessary afterenquiry as it thinks fit either itself making such further enquiry asor through the Controller shall it thinks fit, either itself ordecide the appeal.
through the Court or the Contro ller, as the case may be, shall decide the appeal.
Explanation . . . 6.
Subject to any decision of the6.
An order of the court or the High Court under section 50 theController shall, subject to the decision of the District Judge shalldecision of the District Judge or th e be final, and an order of the CourtHigh Court under section 50 or of or the Controller shall, subject tothe relevant appellate authority the decision of the relevant appel under this Act be final and shall late authority under this Act or ofnot be liable to be called in questio n the High Court under section 50,in any court of law whether in a be final and shall not be liable tosuit or other proceeding or by way be called in question in any courtof appeal or revision.
of law whether in a suit or other proceedings or by way of appeal or revision.
Revision by the High Court50.
Revision.
The High Court may, at any(1).The High Court may,at any time, call for and examine time,call for examine any order passed or proceeding taken by the (i) the records relating to anycourt of Civil Judge under this Act decision given or proceedingsor any order passed by the Con taken by the District Judge.troller under sections 14,15 16,or 17 for the purpose of satisfying itself (ii) any order passed or proceed as to the legality or correctness of ing taken by the Court under thissuch order or proceeding and may Act or any order passed by thepass such order in reference Controller under section 14,thereto as it thinks fit.
section 15 or section 16.
for the purpose of satisfying itself as to the legality or correctness of such decision, order or proceeding and may pass such order in reference thereto as it think fit; 2.
The costs of, and incidental2.
The District Judge may, at any all proceedings before the Hightime, call for and examine any order Court shall be in its distretion.passed or proceeding taken by the 884 Court of Munsiff referred to in sub clause(iii)of clause (d) of section(3)for the purpose of satisfying himself as to the legality or correctness of such order in reference thereto as he thinks fit.
the order of the District Judge shall be final.
The costs of and incidental to all proceedings before the High Court or the District Judge shall be in the discretion of the High Court or the District Judge, as the case may be.
" On a reading of the provisions it may be seen that under Section 48 as it stood prior to the amendment, an appeal lay to the District Judge against an order passed under Sections 14, 16, 17 or 21 by the Rent Controller or the Court and thereafter a revision lay to the High Court under Section 50 of the Act.
Sub section (6) of Section 48 further provided that the decision of the District Judge shall, subject to the decision of the High Court under Section 50, be final and the order of the Court or the Controller shall subject to the decision of the relevant Appellate Authoirty under the Act or of the High Court under Section 50 be final and shall not be liable to be called in question in any court of law, whether in a suit or other proceedings or by way of appeal or revision.
One of the changes effected by the Amending Act was to confer jurisdiction on Civil Judges in the place of District Munsifs in respect of house rent control cases arising in the city of Mangalore.
Another change effected was to take away the right of appeal to the District Judge against a decision of a Rent Control Court by deleting sub section (1) of Section 48.
The third change effected is of a two fold nature.
The first is to restrict the High Court 's powers of revision under Section 50 to only those cases decided by the city Civil Judges and the second is to confer revisional powers on District Judges in respect of cases decided by the Munsifs exercising jurisdiction in areas outside the city of Bangalore.
Thus what the legislature had done was to do away with the remedy of an appeal so as to save the litigants from "a large segment of time and much expenses".
The resultant position is that as against the orders of District Munsifs acting as Rent Controllers a right of appeal to the District Judge and a further revision to the High Court has been taken away and instead only a right of revision to the District Court is provided.
In so far as the cases disposed of by the Civil Judges in the city of Bangalore are concerned, a right of revision is provided to the High Court.
Notwithstanding the changes effected, 885 Section 48(6) inter alia provided that an order of the Court or the Controller shall, subject to the decision of the District Judge or the High Court under Section 50 be final and shall not be liable to be called in question in any court of law, whether in a suit or other proceeding or by way of appeal or revision.
In the background of the changes made by the legislature, a Full Bench of the Karnataka High Court went into the question in Krishnaji Venkatesh Shirodkar vs Gurupad Shivram Kavalekar & Others, ILR 1978 Karnataka 1585 whether by reason of Section 48(6) a further revision against a revisional order passed by the District Judge under Section 50(2) of the Karnataka Act would lie or not to the High Court under Section 115 of C.P.C. Venkataramiah, J. (as he then was), who spoke for the Full Bench held that in the light of the decisions of the Supreme Court in Chhaganlal vs The Municipal Corporation, Indore, ; and Krishnadass Bhatija vs A.S. Venkatachala Shetty, SLP (Civil) No. 913 of 1978 decided on 13th February 1978 the jurisdiction of the High Court under Section 115 C.P.C. to revise an order of the District Judge passed under Section 50(2) will stand unaffected.
The correctness of this view was questioned before another Full Bench of the Karnataka High Court in M.M. Yaragatti vs Vasant & Others, AIR 1987 Karnataka 186.
The Full Bench took the view that in the light of the decisions of the Supreme Court in two subsequent cases, viz. Aundal Ammal 's case (supra) and Vishesh Kumar 's case (supra), the law laid down in Krishnaji 's case (supra) cannot be considered good law any longer and as such a further revision to the High Court under Section 115 C.P.C. will not lie against an order passed by a District Judge in exercise of his revisional powers under Section 50(2) of the Karnataka Act.
The correctness of the view taken by the Full Bench in Yaragatti 's case (supra) fell for consideration by this Court in Shyamaraju 's case (supra).
A Bench of this Court held that in so far as the Karnataka Act is concerned, the relevant provisions warranted invoking the ratio in Chhaganlal 's case (supra) and Krishna Das Bahtija (supra) and therefore the view taken by the earlier Full Bench in Krishnaji 's case (supra) is the correct one and not the view taken in Yaragatti 's case (supra).
The position, therefore, is that so far as the Karnataka Act is concerned an order of a District Judge under Section 50(2), though conferred finality under the Act is nevertheless open to challenge before the High Court by means of a further revision under Section 115 C.P.C. by the aggrieved party.
886 What now falls for consideration is whether there is any conflict between the decision in Aundal Ammal 's case (supra) and Shyamaraju Hegde 's case (supra) and whether the ratio in the former case requires reconsideration.
Even without any discussion it may be seen from the narrative given above that there is really no conflict between the two decisions because the provisions in the two Acts are materially different.
However, to clarify matters further we may point out the differences between the two Acts in greater detail and clarity.
Under the Kerala Act, against an order passed by a Rent Control Court presided over by a District Munsif, the aggrieved party is conferred a right of appeal under Section 18.
The Appellate Authority has to be a judicial officer not below the rank of a Subordinate Judge.
The Appellate Authority has been conferred powers co extensive with those of the Rent Control Court but having over riding effect.
Having these factors in mind, the Legislature has declared that in so far as an order of a Rent Control Court is concerned it shall be final subject only to any modification or revision by an Appellate Authority; and in so far as an Appellate Authority is concerned, its decision shall be final and shall not be liable to be called in question in any Court of law except as provided in section 20.
As regards Section 20, a division of the powers of revision exercisable thereunder has been made between the High Court and the District Court.
In all those cases where a revision is preferred against a decision of an Appellate Authority of the rank of a Subordinate Judge under Section 18, the District Judge has been constituted the revisional authority.
It is only in other cases i.e. where the decision sought to be revised is that of a judicial officer of a higher rank than a Subordinate Judge, the High Court has been constituted the Revisional authority.
The revisional powers conferred under Section 20, whether it be on the District Judge or the High Court as the case may be are of greater amplitude than the powers of revision exercisable by a High Court under Section 115 C.P.C. Under Section 20 the Revisional Authority is entitled to satisfy itself about the legality, regularity or propriety of the orders sought to be revised.
Not only that, the Appellate Authority and the Revisional Authority have been expressly conferred powers of remand under Section 20A of the Act.
Therefore, a party is afforded an opportunity to put forth his case before the Rent Control Court and then before the Appellate Authority and thereafter if need be before the Court of Revision viz. the District Court if the Appellate Authority is of the rank of a Subordinate Judge.
The Legislature in its wisdom has thought that on account of the ample opportunity given to a party to put forth his case before 887 three courts, viz. the Trial Court, the Appellate Court and the Revisional Court, there was no need to make the revisional order of the District Court subject to further scrutiny by the High Court by means of a second revision either under the Act or under the Civil Procedure Code.
It has been pointed out in Aundal Ammal 's case (supra) that the Full Bench of the Kerala High Court had failed to construe the terms of Section 20 read with Section 18(5) in their proper perspective and this failing had affected its conclusion.
According to the Full Bench, a revisional order of a District Court under Section 20 laid itself open for further challenge to the High Court under Section 115 C.P.C. because of two factors viz. (1) there was no mention in the Act that the order would be final and (2) there was no provision in the Act for an appeal being filed against a revisional order under Section 20.
The Full Bench failed to notice certain crucial factors.
In the first place, Section 20 is a composite section and refers to the powers of revision exercisable under that Section by a District Judge as well as by the High Court.
Such being the case if it is to be taken that an order passed by a District Court under Section 20 will not have finality because the Section does not specifically say so, then it will follow that a revisional order passed by the High Court under Section 20(1) also will not have finality.
Surely it cannot be contended by anyone that an order passed by a High Court in exercise of its powers of revision under Section 20(1) can be subjected to further revision because Section 20(1) has not expressly conferred finality to an order passed under that Section.
Secondly, the terms of Section 20(1) have to be read in conjunction with Section 18(5).
Section 18(5), as already seen, declares that an order of a Rent Control Court shall be final subject to the decision of the Appellate Authority and an order of an Appellate Authority shall be final and shall not be liable to be called in question in any court of law except as provided for in Section 20.
When the Legislature has declared that even an order of the Rent Control Court and the decision of the Appellate Authority shall be final at their respective states unless the order is modified by the Appellate Authority or the Revisional Authority as the case may be, there is no necessity for the legislature to declare once over again that an order passed in revision under Section 20(1) by the District Judge or the High Court as the case may be will also have the seal of finality.
The third aspect is that the Legislature has not merely conferred finality to the decision of an Appellate Authority but has further laid down that the decision shall not be liable to be called in question in any court of law except as provided for in Section 20.
These additional words clearly spell out the prohibition or exclusion of a second revision under Section 115 C.P.C. to the High Court against a revisional order passed by a District Court 888 under Section 20 of the Act.
This position has been succinctly set out in para 20 of the judgment in Aundal Ammal 's case (supra).
As was noticed in Vishesh Kumar 's case, the intent behind the bifurcation of the jurisdiction is to reduce the number of revision petitions filed in the High Court and for determining the legislative intent, the Court must as far as possible construe a statute in such a manner as would advance the object of the legislation and suppress the mischief sought to be cured by it.
A thought may occur to some whether by a rigid construction of Section 20(1) read with Section 18(5), the High Court 's power of superintendence over the District Court, even when it functions as a revisional court under Section 20(1) of the Kerala Act, will not stand forfeited.
We may only state that legislative history would indicate that the superintending and visitorial powers exercisable by a High Court under Section 115 C.P.C. appear to have been conferred and vested "because the supervisory jurisdiction to issue writs of certiorari and prohibition over Subordinate Courts in the mofussil could not be exercised, (and hence) it would be reasonable to hold that it was intended . . to be analogous with the jurisdiction to issue the high prerogative writs and the power of supervision under the Charter Act and its successor provisions in the Constitution Acts." vide para 10 S.S. Khanna vs Dillon, ; Incidentally, we may also point out that the Legislature has not taken away and indeed it cannot take away the power of superintendence of the High Court under Article 227 of the Constitution over all courts and tribunals which are within the territories in relation to which the High Court exercise its jurisdiction.
Having said so much it is really not necessary for us to dwell at length about the decision in Shyamaraju 's case restoring the ratio in Krishnaji 's case and disapproving the decision in Yaragatti 's case.
Even so we cannot but refer to the fact that in the Karnataka Act the right of appeal has been completely taken away and the entire proceedings are sought to be limited to a two tier system viz. the Rent Control Court and the Revisional Court, whereas under the Kerala Act there is a three tier system viz. the Rent Control Court, the Appellate Court and the Revisional Court.
Though Section 48(6) of the Karnataka Act (as amended) also speaks of the finality of the order of the Rent Control Court, subject to the decision of the Revisional Court under Section 50 in more or less the same terms as in Section 18(5) of the Kerala Act, the force underlying the words "shall be final 889 and shall not be liable to be called in question" etc.
has to be reckoned at a lesser degree than the terms in the Kerala Act because the words of finality in the two Acts under the relevant provisions present distinctly different perspections.
It is in that situation it was found in Shyamaraju 's case that the relevant provisions of the Karnataka Act warranted the application of the ratio in Chhaganlal 's case and Krishnadas Bhatija 's case rather than the ratio in Vishesh Kumar 's case and Aundal Ammal 's case.
In fact, it is worthy of notice that Venkataramiah, J. who spoke for the Full Bench in Krishnaji 's case was a party to the judgment in Aundal Ammal 's case and the learned judge, while concurring with Sabyasachi Mukharji, J., who spoke for the Bench, has not deemed it necessary to make any reference to the Full Bench decision in Krishnaji 's case.
There is, therefore, no conflict between the decision rendered in Aundal Ammal 's case (supra) and Shyamaraju 's case (supra).
As to the question whether a fresh thinking is called for on the scope of Section 20 read with Section 18(5) of the Kerala Act, we do not find any grounds for reconsidering the view taken in Aundal Ammal 's case and on the contrary our renewed discussion of the matter only calls for a reiteration of the view expressed in Aundal Ammal 's case.
An argument was advanced that since the decision in Vareed vs Mary had been good law for a number of years in Kerala State and since the High Court had been entertaining revision petitions under Section 115 C.P.C. against the revisional orders of District Courts under Section 20(1) of the Kerala Act, the decision should have been allowed to stand even though the reasoning therein was not commendable for acceptance by this Court.
We are unable to countenance this argument in the circumstances of the case and the reason therefore can be set out by refering to certain English decisions and the reasoning adopted therein.
In West Ham Union vs Edmonton Union, 13 at page 4 Lord Loreburn, L.C. spoke as under: "Great importance is to be attached to old authorities, on the strength of which many transactions may have been adjusted and rights determined.
But where they are plainly wrong, and especially where the subsequent course of judicial decisions has disclosed weakness in the reasoning on which they were based, and practical injustice in the consequences that must flow from them, I consider it is the duty of this House to overrule them, if it has not lost the right to do so by itself expressly affirming them." 890 In Robinson Brothers (Brewers) Ltd. vs Houghton & Chesteric Street Assessment Committee, 12 1937 2 All E.R. 298, affirmed in , the members of the Court, having concluded that a decision on a question of rating pronounced some forty years previously by a Divisional Court was plainly wrong, overruled it accordingly, although the earlier decision had, without doubt, been frequently acted on in rating matters in the meantime, and although no judicial doubt had previously been cast on its correctness.
These decisions have been referred to and followed in Brownsee Haven Properties Ltd. vs Poole Corporation, All E.R. 1958 1205.
On similar lines this Court deemed it necessary to overrule the ratio in Vareed vs Mary, (supra) as the decision suffered from misconstruction of the relevant Sections in the Act and the weakness in the reasoning became manifest in the light of the subsequent decision of this Court such as in Vishesh Kumar (supra).
In the light of our conclusion all the appeals must succeed in so far as the challenge to the right of the High Court to entertain revision petitions under Section 115 C.P.C. is concerned.
In Civil Appeal Nos.
626 of 1981 and 624 of 1985, the High Court allowed the revision petition under Section 115 C.P.C. and ordered the eviction of the tenant.
In Civil Appeal No. 2079 of 1981 the District Judge set aside the order of eviction but the High Court restored the order of eviction.
In Civil Appeal No. 1619 of 1986 the District Court allowed the Revision and restored the order of eviction passed by the Rent Controller and the High Court has confirmed the said order in the revision preferred to it.
In Civil Appeal No. 7505 of 1983 the District Court reversed the decisions of the Rent Controller and the Appellate Authority and ordered eviction and order of the District Court has been confirmed by the High Court.
In Special Leave Petition No. 4311 of 1985 the Appellate Authority sustained the claim of the landlord for eviction under Section 11(3) of the Act but remanded the case to the Rent Control Court for deciding the question whether the tenant is entitled to resist the claim for eviction on the basis of the second proviso to Section 11(3) of the Act.
The order of remand was confirmed by the District Court and the High Court.
In accordance with our pronouncement it follows that the order of the High Court under Section 115 C.P.C. in each of the appeals concerned, viz., Civil Appeal Nos.
626 of 1981, 624 of 1985, 2079 of 1981, 1619 of 1986 and 7505 of 1983 will stand set aside and the revisional order of the District Judge in each case will stand restored and become operative.
As the appeals are directed only against the order 891 of the High Court passed in revision the appeals will stand disposed of with the said pronouncement on the above lines.
In Special Leave Petition (Civil) No. 4311 of 1985 also the order of the High Court under Section 115 C.P.C. is not sustainable but even so we do not find any merit in the petition because the finding of the Appellate Authority and the order of remand passed by it have been confirmed by the District Court and as such, there are no merits in the petition, accordingly it is dismissed.
Interim orders, if any, passed in the appeals and the special leave petition will stand vacated.
The parties in all the cases are directed to bear their respective costs.
section RANGANATHAN, J. 1.
I find on a cursory perusal of various State enactments on rent control that, while a number of them do confer s .
cific jurisdiction on the State High Court, some others are broadly on the same pattern as the Kerala and Karnataka enactments.
Thus, though we are concerned only with Kerala and Karnataka enactments in these cases, a similar question might well arise under the corresponding enactments of some other States as well.
It is in view of this importance of the question raised that I have considered it necessary to state my views in a separate order.
The Kerala and Karnataka Rent Control Acts vest a power of revision in the District Judge against certain orders.
The question in these matters is whether the jurisdiction of the High Court under section 115 of the Code of Civil Procedure (C.P.C.) can be invoked to seek a further revision of the revisional order passed by the District Judge.
This question has been answered in the negative in Aundal Ammal vs Sadasivan Pillai, (a decision under the Kerala Act) but in the affirmative in Shyamaraju Hegde vs Venkatesha Bhat, ; (a decision under the Karnataka Act) and hence this reference to a larger Bench.
My learned brothers are of the view that there is no conflict between the above two decisions as the two enactments are not in pari materia and that, so far as the Kerala Act is concerned, Aundal Ammal should be followed.
With respect, I am unable to agree.
Normally, a revision lies to the High Court under section 115 of the C.P.C. against any order of the District Judge/Court.
The fact that the order may have been passed under a special statute or that the statute contains expressions purporting to confer finality on the order of the District Judge/Court or a subordinate authority or Court have been held insufficient to take away this jurisdiction.
This is the effect 892 of the decisions in Chhaganlal vs The Municipal Corporation, Indore, ; , a case under the Madhya Pradesh Municipal Corporation Act and in Krishandas Bhatija vs Venkatachala Shetty, SLP No. 913 of 1978 decided on 13.2.1978 and Shyamaraju 's case (supra), which are direct decisions under the Karnataka Act.
In my opinion, there is no vital or material difference between the two enactments in this respect and that the same result should follow under the Kerala Act also.
The relevant provisions of the two enactments have been extracted in the order of Natarajan J. and need not be set out again, Under the Karnataka Act, after its amendment in 1975, rent control matters are decided, in the first instance, by the District Munsiff or the Civil Judge/Rent Controller, according as the case arises outside or inside the city of Bangalore.
There is no provision for an appeal from this order but there is one for revision.
This revisional power is bifurcated under section 50 between the High Court and the District Judge.
The High Court is empowered to revise the order of the Civil Judge/Rent Controller and the District Judge that of the District Munsiff.
Section 50(2) specifically declares that the order of the District Judge under this provision is final.
The Kerala pattern is the same except that an appeal intervenes before the revision.
Section 18 provides for an appeal from the Rent Controller to an officer or an authority of the rank of a Subordinate Judge or of a superior rank.
Section 20 provides for revision.
The revisional power is to be exercised by the District Court where the appellate authority is the Subordinate Judge and the High Court in other cases.
Section 20 does not provide, as does Section 50 of the Karnataka Act, that the decision of the District Judge shall be final.
It is true that section 18(5) of the Kerala Act lays down that the order of the Rent Control court or, where there is an appeal, the decision of the appellate authority shall be final and shall not be called into question in any court of law except as provided in section 20 but the language of section 48(5) of the Karnataka Act is even stronger.
It provides that the order of the Court or the Rent Controller shall (subject to the decision in appeal or of the District Judge or the High Court in revision under section 50) be final and "shall not be liable to be called into question in any court of law whether in a suit or other proceeding or by way of appeal or revision.
" If the much wider and more emphatic language of the Karnataka Act does not exclude the jurisdiction of the High Court under section 115, as has been held in the two cases referred to above, it is difficult to see the justification for reading any such exclusion into the Kerala Act.
893 5.
This poses then the question of a choice between the two views of this court: the one in Shyamaraju and the one in Aundal Ammal.
As has already been pointed out, Shyamaraju follows the earlier decisions of this Court in Chhagan Lal and Krishnadas Bhatija.
The only other decision of this Court, which has relevance in the present context, is Vihesh Kumar vs Shanti Prasad, ; which has been relied upon in Aundal Ammal.
I am in agreement with the view expressed in Shyamaraju that Vishesh Kumar was rendered in a totally different statutory context.
That decision turned largely on the legislative history of section 115 of the C.P.C. and section 25 of the Provincial Small Causes Courts Act in their application to the State of Uttar Pradesh.
I am therefore inclined to lean in favour of the view that has commended itself to this Court as to the interpretation of the Karnataka Act and to hold that the High Court has a power of revision over the order of the the District Judge under the Kerala Act as well.
Aundal Ammal has pointed out that such an interpretation would enable parties to have recourse to four courts under the Kerala Rent Control Act viz: the court of the first instance, the appellate court, the district court and then the High Court whereas under the Karnataka Act there are only three courts, viz: the court of the first instance, the district court by way of revision and the High Court by way of further revision.
This is no doubt true but can this alone be a reason why identical statutory language should be given different interpretation under the two enactments? I think not.
That apart, the result of applying Aundal Ammal would be to completely exclude the High Court in rent control matters and this, if I am right in thinking that the two Acts are pari materia, will leave the litigant in Karnataka with only a right of revision to the District Court.
I venture to doubt whether in the absence of clear language the Legislature can be held to have intended to completely exclude the jurisdiction of the High Court in such an important branch of the law.
Moreover to exclude the revisional jurisdiction of the High Court under section 115 would only encourage the recourse, by aggrieved parties, to articles 136, 226 and 227 of the Constitution and the conclusion may not even result in reducing the spate of litigation under the Rent Control Acts in the High Courts and Supreme Court.
I am, therefore, not inclined to attach muct importance to this circumstance as a guide to the interpretation of the relevant provisions of the statute.
The above interpretation will not render the language and scheme of section 18(5) read with section 20 totally redundant as was suggested in arguments before us.
Section 20 is necessary because 894 though, at present, Subordinate Judges have been constituted as the appellate authorities under the Act, the appellate authority need not necessarily be a regular civil court and, but for such a specific statutory provision, there would be no remedy to a party aggrieved by an order of the appellate authority.
Section 18(5) is a provision of a general nature intended to prevent the orders of the Rent Controller from being challenged in the courts.
These provisions, in my opinion, do not and cannot preclude the applicability of section 115 of the C.P.C. to an order passed by the District Court, not as a persona designata, but as a civil court of the land.
In this view of the matter, sections 18 and 20 have a vital part to play but their effect is not to eliminate the revisional jurisdiction of the High Court under section 115.
One more circumstance which I think has a bearing on the interpretation to be placed on this procedural problem is this.
In the State of Kerala, as early as in Vareed vs Mary, AIR 1969 Ker. 101, a view was taken that the High Court can entertain a second revision and, though Shri Potti suggested that this view has been often challenged, the above Full Bench decision hold the field till Aundal Ammal was decided.
In Karnataka, the maintainability of a second revision appears to have been taken for granted untill a doubt was raised in view of certain observations made in a decision under the Cooperative Societies Act.
This doubt was dispelled and it was held in Krishnaji 's case (ILR 1978 Kar.
1585) that the High Court could maintain a second revision.
This view was sought to be reversed by the subsequent Full Bench in Yaragatti 's case, in the light of the decision in Aundal Ammal, but that attempt was overruled in Shyamaraju 's case.
In the result, the position has been that, right through in the State of Karnataka and for atleast for a period of almost twenty years in the State of Kerala, the prevalent view has been in favour, of the maintainability of a second revision by the High Court.
I think that in a matter of procedure such a long standing practice should not be disturbed unless the statutory indication is quite clear to the contrary.
I would, therefore, hold that the revision petitions before the High Court were maintainable and that the matters before us should be disposed of accordingly.
However, the petitions and appeals will stand disposed of in accordance with the majority view of my learned brothers.
S.L. Appeals and petitions disposed of.
| % A person had two sons, the appellant Dharma and another Miragu.
Miragu died issueless in 1928 leaving behind his widow, respondent No. 2.
The Joint family property devolved on the appellant as sole surviving coparcener.
The appellant disposed of certain properties.
In 1956 the came into force.
In 1968 the widow took respondent No. 1 in adoption.
Respondent Nos. 1 and 2 filed a suit for partition and separate possession of one half share in the property of the joint family.
Trial Court dismissed the suit.
Respondent Nos. 1 and 2 filed an appeal which was allowed by the District Judge and a preliminary decree for partition and separate possession was passed.
The appellant filed an appeal before the High Court and the High Court affirmed the decree passed by the District Judge.
Hence this appeal by special leave.
The contention of the appellant was that respondent No. 1 could not divest him of any part of the estate which had been vested in him before the adoption of respondent No. 1 in view of clause (c) of the proviso to section 12 of the Act.
Dismissing the appeal, this Court, ^ HELD: The Joint family property does not cease to be joint family property when it passes to the hands of a sole surviving coparcener.
1078 If a son is born to the sole surviving coparcener, the said properties become the joint family properties in his hands and in the hands of his son.
The only difference between the right of a manager of a joint Hindu family over the joint family properties where there are two or more coparceners and the right of a sole surviving coparceners in respect of the joint family properties is that while the former can alienate the joint family properties only for legal necessity or for family benefit, the latter is entitled to dispose of the coparcenary property as if it were his separate property as long as he remains a sole surviving coparcener and he may sell or mortgage the coparcenary property even though there is no legal necessity or family benefit or may even make a gift of the coparcenary property.
If a son is subsequently born to or adopted by the sole surviving coparcener or a new coparcener is inducted into the family on an adoption made by a widow of a deceased coparcener an alienation made by the sole surviving coparcener before the birth of a new coparcener or the induction of a coparcener by adoption into the family whether by way of sale, mortgage or gift would however stand, for the coparcener who is born or adopted after the alienation cannot object to alienations made before he was begotten or adopted.
[1085G H; 1086A C] In the instant case the joint family properties which belonged to the joint family consisting of Dharma the appellant and his brother Miragu continued to retain the character of joint family properties in the hands of Dharma the appellant as Champabai, the widow of Miragu was still alive and continued to enjoy the right of maintenance out of the said joint family properties.
Pandurang the 1st respondent on adoption became the adopted son of Miragu and became a coparcener with Dharma the appellant in the joint family properties.
When once he became a member of the coparcenary which owned the joint family properties he was entitled to institute a suit for partition and separate possession of his one half share in the joint family properties, of course, except those which had been alienated in favour of third parties before the adoption by Dharma the appellant.
[1084E G] Clause (c) to proviso of section 12 of the Act would not be attracted in the instant case since there was no 'vesting ' of joint family property in Dharma the appellant which took place on the death of Miragu and no 'divesting ' of property took place when Pandurang the first respondent was adopted.
[1086D E] The Joint family properties continued to remain in the hands of Dharma the appellant as joint family properties and that on his adoption Pandurang the 1st respondent became a member of the coparce 1079 nary entitled to claim one half share in them except those items which had been sold by Dharma the appellant.
[1086F] Y.K. Nalavade and Ors.
vs Anand G. Chavan and Ors., A.I.R. 1981 Bombay 109, approved.
Sawan Ram & Ors.
vs Kala Wanti & Ors., [1967] 3 S.C.R. 687; Sitabai and Anr.
vs Ram Chandra, ; , referred to.
Narra Hanumantha Rao vs Narra Hanumayya and Ors., [1964] 1 Andhra Weekly Reporter 156 I.L.R. , overruled.
Gowli Buddanna vs Commissioner of Income Tax, Mysore Bangalore, ; ; Vasant and Anr.
vs Dattu and Ors., A.I.R. 1987 S.C. 399, followed.
|
Civil Appeal No. 2371 of 1969.
From the Judgment and order dated 23 5 1968 of the Allahabad High Court in Special Appeal No. 247/66.
G. L. Sanghi, Mrs. section Bagga for the Appellant.
G. N. Dikshit and O. P. Rana for Respondents 1 5.
section K. Bagga for Respondent No. 6 The Judgment of the Court was delivered by 181 SEN J.
This appeal, by certificate, is directed against a judgment of the Allahabad High Court dated May 23, 1968, whereby it upheld a judgment of a Single Judge of that Court dated March 16, 1966, dismissing the applicants writ petition to quash recovery proceedings initiated by the Collector, Azamgarh for realisation of the sum remaining due on account of a taccavi loan under s.7 (1) of the .
The facts leading to this appeal, in brief, are as follows: The appellant and his brother Shashi Bhushan Gupta the sixth respondent, constituted a joint Hindu family owning extensive zamindari properties, over several districts in United Provinces including Azamgarh zamindari comprising of 34 villages.
They owned an agricultural farm known as Mukundpur Farm situated in Azamgarh zamindari.
It is alleged that by virtue of a family settlement in 1940, the appellant even though younger in age, became the karta of the joint family.
By his application dated February 25, 1947 the appellant applied for a taccavi loan of Rs. 1,22,000 in the prescribed form for improvement of Mukundpur Farm, to the Director of Agriculture, United Provinces through the Collector, Azamgarh.
The property offered as security for advance of the loan was the zamindari rights in Azamgarh zamindari comprising of the aforesaid 34 villages bearing a land revenue of Rs. 11,000/ .
During the verification proceedings, the appellant by his application dated February 22, 1948, offered a security of his half share in Azamgarh zamindari, which on enquiry by the Collector for the grant of sanction for the loan, was evaluated at Rs. 1,43,869.66p.
The taccavi loan was duly sanctioned by the Government on September 23, 1948.
The appellant having defaulted in payment of the loan, the Collector, Azamgarh by his order dated March 24, 1952 directed that the entire ilaqa lying in Tahsil Sagri, district Azamgarh forming part of the hypothecated property be attached under section 150 of the U.P. Land Revenue Act, 1901.
It, however, seems that no attachment of any land situated in Tahsil Sagri forming part of the hypothecated property had, in fact ', been effected either under s.150 of the U.P. Land Revenue Act or section 289 (1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
It appears that some plots at the Mukundpur Farm lying in two villages, Mahnajpur and Ghaibipur, were later taken under the management of the Collector under section 290 of that Act and half share 'hereof let out to tenants, and the proceeds were adjusted towards the 182 outstanding taccavi dues.
It also appears that a sum of Rs. 38,951.8P representing the appellant 's half share of the compensation money due ,, and payable to him were adjusted under s.6 (e) of the Act towards the loan.
It is the appellant 's case that there was a partition between the appellant and his brother, the sixth respondent in 1951, and the hypothecated property was allocated to the share of the sixth respondent.
This resulted in a compromise decree between the appellant and his brother, the sixth respondent, in Civil Suit No. 72 of 1952 under the terms of which, the sixth respondent undertook upon himself the liability to discharge the loan as the property offered in security had fallen to his share.
In compliance thereof, the sixth respondent actually paid Rs. 16,012.50P.
The Government was admittedly not impleaded as a party to, the suit.
On July 15, 1952, the sixth respondent resiled from the terms of compromise and objected to the recovery proceedings being taken against him on the ground that the loan in question had not been taken by him nor had the appellant borrowed it in the capacity as karta of the joint family.
He, indeed, denied the factum of partition.
These objections were, however, over ruled by the Sales officer, Azamgarh on October 22, 1952.
On May 15, 1953, the appellant applied to the State Government for expunging his name from the debtor sheet.
The application was forwarded by the Government to the Collector, Azamgarh for enquiry and report.
The appellant raised an objection alleging inter alia that the loan had been incurred by him in his capacity as karta of the joint Hindu family and that since the hypothecated property had fallen to .
to the share of the sixth respondent, he was not personally liable to repay the loan.
The Collector by his order dated January 18, 1955, after holding an enquiry held that the appellant had taken the taccavi loan in his individual capacity and not as karta of the joint family and accordingly he was personally liable to repay the loan.
He, however, directed the Sales officer that the recovery be made, in the first . instance, from the hypothecated property before proceeding against the appellant personally.
The action taken by the Collector was duly endorsed by the Land Reforms Commissioner by his letter dated April 7, 1955, and approved of the State Government by its order dated July 22, 1955.
The recovery proceedings were accordingly initiated against the appellant.
lt appears that the appellant was a Member of the Legislative Assembly and apparently wielded considerable influence.
He appears 183 to have addressed a representation to the Chief Minister on April 1(), A 1956.
The State Government referred the matter to the Commissioner, Gorakhpur Division, Gorakhpur who by his letter dated October 19, 1956 stated that he was fully in agreement with the Collector that the appellant must be treated as having taken the loan in his individual capacity and proceedings for its recovery had to be taken against the hypothecated property as well as against him personally.
The latter also mentioned that the Collector had been asked, if necessary, to explain the case personally to the Chief Minister.
Evidently, the State Government after reviewing the matter at all levels, by its order dated August 13, 1957 directed that the realisation of the taccavi dues outstanding against the appellant should be made from the hypothecated property as well as from his person immediately.
It further directed that 'all the modes for recovery legally permissible should be adopted against him simultaneously and pursued vigorously '.
Despite all this, the appellant has not paid a pie towards the outstanding debt except through coercive process.
On December 17, 1) 1957, the appellant addressed a representation to the Board of Revenue although under the taccavi rules no appeal or revision lay to the Board.
It is somewhat strange that the Addl.
Land Reforms Commissioner, contrary to the Government 's orders in that behalf, submitted a report, on his own, upholding the appellant 's contention that he had borrowed the loan in his capacity as karta of the joint family, and recommending that the loan in question should be recovered from the hypothecated property.
The state Government naturally did not act upon this gratuitous advice.
On June 19, 1959, the appellant has informed of the Government 's decision.
Thereafter, the Collector started proceedings for realisation of Rs. 72,152.50P as principal and Rs. 23,689.81P as interest.
Thereupon, the appellant on August 4, 1959 moved the Allahabad High Court under article 226.
The appellant 's writ petition was dismissed by a learned Single Judge.
It appears that the contention that the loan was incurred by him as karta of the joint Hindu family was not raised before the learned Single Judge, as he observes "It appears that recovery proceedings were taken against the Mukundpur Farm, which, it is not disputed, belongs exclusively to the petitioner".
He negatived the contention that the Collector had let out a part of the Mukundpur Farm in 1952 and therefore, after expiry of a period often years, the Government was precluded by reason of s.291 (3) of the U.P. Zamindari Abolition and Land Reforms Act from further continuing the recovery proceedings.
He held that this involved a 13 475 SCI/79 184 disputed question of fact as according to the Government certain plots of Munkundpur Farm were first let out in 1959 60 and not in 1952, and therefore, the bar of s.291 (3) was not applicable.
As regards the contention based on s.6 (e) of the Act that the Government had no power to make the recovery except from out of the compensation amount, he held that the provision did not debar the Government from proceeding otherwise.
On the question of accounting he held that the submission calls for an accounting of the amount received by such letting out and there was no material upon which the decision of the Court could rest.
On appeal, the appellant for the first time raised an objection as to his personal liability alleging that the loan in question was incurred by him in the capacity of karta, and, therefore, recoverable from the hypothecated property alone.
There was a difference of opinion on the question between the learned Judges constituting the Bench as to whether he had taken the loan as karta of the joint family or in his individual capacity, but nonetheless the appeal failed because they repelled all other contentions.
Four questions arise in this appeal: 1.
Whether the taccavi loan was incurred by the appellant as a karta of the joint Hindu family and not in his individual capacity and, therefore, the loan in question has to be recovered from the sixth respondent, inasmuch as the hypothecated property had fallen to his share in a family partition ? 2.
Is the Collector precluded from taking resort to any one or other modes prescribed by s.7 (1) of the , for recovery of the sum remaining unrealised towards the taccavi loan, by reason of s.289 (2) or s.291 (3) of the U.P. Zamindari Abolition and Land Reforms Act, 1950? 3.
Have the Government no right to recover the outstanding amount due except from the compensation amount in terms of s.6 (e) thereof? 4.
Was the Government bound to render an account of the rents and profits derived from letting out of the plots of Mukundpur Farm? Section 7 (1) of the , reads as follows: "7 (1) Subject to such rules as may be made under section ten, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; 185 (b) from his surety (if any) as if they were arrears of land A revenue due by him; (c) (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realization of land revenue by the sale of immovable property other than the land on which that revenue is due.
" on the first point, we agree with one of the learned Judges (Uniyal J.).
The conclusion reached by the learned Judge that 'the taccavi loan was taken by the appellant in his individual capacity ' is the only conclusion possible.
The appellant maintained that the loan was incurred for family purposes i.e., for improvement of Munkundpur Farm by the appellant in his capacity as the karta and it having fallen to the share of the sixth respondent in the family partition, the recovery proceedings against the appellant under section 7 were not maintainable.
We fail to see how can the appellant escape liability on this account.
The Government was not a party to Civil Suit No. 72 of 1952 and was, therefore, not bound by the terms of the compromise decree.
Nor was the Government bound by the alleged partition effected between the appellant and the sixth respondent.
It matters little whether there was a partition or not in 1951; and if so, whether the hypothecated property had fallen to the share of the sixth respondent.
The appellant had bound himself by the terms of the taccavi bond to discharge the liability from his property The instrument is not on record.
The document was, however, before the High Court.
Uniyal J. in the course of his judgment, with regard to appellant 's personal liability, observes: "He pledged his half share in 34 villages of Tahsil Sagri.
After verification of the proprietary rights of the appellant in the hypothecated property, the Collector issued a certificate declaring that the same as sufficient to cover the amount of taccavi loan.
Thereupon a formal document in the nature of taccavi bond was executed by the appellant of the one part and the Collector of the other part evidencing the transaction of loan.
A list containing particulars of the immovable property was annexed to the bond, and it was stated therein that a half share of the appellant in the said zamindari property had been pledged by way of security." (Emphasis supplied) The correctness of this observation is not open to question.
The learned Judge then goes on to say: 186 "The naqsha maliyat attached to the taccavi bond clearly mentioned the details of the hypothecated property in tahsil Saygri consisting of one half share of the appellant.
" He then rightly concludes, saying: "It is of no consequence if the creditor proceeds against the share of the Karta alone in the joint family property hypothecated as security for the loan, or from his person, or both.
" We concur in the conclusion reached by the learned Judge that the loan in question was taken by the appellant in his individual capacity and not as a karta of the joint Hindu family.
Even assuming he took the loan as karta, still he would be personally and severally liable to repay it.
The remaining points are equally devoid of substance.
The contention based on section 289 (2) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 does not arise.
No doubt, the Collector is em powered under section 7 (1) of the to recover all the taccavi dues from the defaulter as arrears of land revenue, and by reason of section 288, the provisions of section 289 are attracted.
By section 288 it is provided that the provisions of the Act with regard to the recovery of arrears of land revenue shall apply to all arrears of land revenue and ' 'sums of money recoverable as arrears of land revenue ' due at the commencement of the Act.
The Collector could, therefore, have taken resort to section 289 (1) for the recovery of the unrealised amount of the taccavi loan by attachment and sale of properties belonging to the appellant.
But, the ilaka of Tahsil Sagri was not, in fact, ever attached under section 289 (1).
In the instant case, no previous sanction of the Board of Revenue was obtained under section 272(2).
Consequently, the attachment could not be said to be one made under section 289 (1).
Further, section 289 applies only to those cases in which the provisions of section 243(1) have been made applicable by the Government under a notification issued under section 243 (2) .
It is nobody 's case that a notification contemplated by section 243 (2) was ever issued.
The question of section 289 (2) operating as a bar to the recovery proceedings after expiry of a period of three years, therefore, does not arise.
There is also a fallacy in the argument.
The provisions of section 289 run thus.
Attachment of village for arrears of land revenue. (1) At any time after an arrear of land revenue has accrued, the Collector may attach the village or any area therein 187 in respect of which the arrear is due and place it under his own A management or that of an agent appointed by him for that purpose for such period as he may consider necessary: Provided that the period for which any village or any area therein may be so attached, shall not exceed three years from the commencement of the agricultural year next following the date of attachment, and the attachment shall be cancelled if the arrears are sooner liquidated.
(2) Upon the expiry of the period of attachment, the village shall be restored free of any claim on the part of the Government for any arrear of land revenue due in respect thereof.
" When an arrear of land revenue has accrued, the Collector may under section 289(1) attach a village or any area therein in respect of which the arrear is due and place it under his own management or that of an agent appointed by him for that purpose.
The proviso to section 289 (1), however, interdicts that the period for which any village or any area therein may be so attached, shall not exceed three years from the commencement of the agricultural year next following the date of attachment, and the attachment shall be cancelled if the arrears are sooner liquidated.
If section 289 (2) is read in the context of sub section
(1), it will be clear that upon the expiry of the period of three years the village has to be restored free of any claim on the part of the Government for any arrear of land revenue due in respect thereof.
The consequence that ensues is that liability for payment of land revenue in respect of the village or any area therein in respect of which arrears are due stands discharged.
There is a distinction between arrears of land revenue and other government dues recoverable as if they were arrears of land Revenue.
In respect of other sums of money recoverable as arrears of land revenue, the debtor is not discharged of his liability for payment of such dues even after three years.
The next question is whether by virtue of section 291 (3), the appellant stood relieved of all liability for payment of arrears of taccavi due after the expiry of ten years.
We may here read section 291 (3).
It is in these terms: "291 (3) Upon the expiry of the period of lease the holding shall be restored to the tenure holder concerned free of any claim on the part of the State Government for any arrears in respect of such holding.
" 188 The High Court has relied upon the affidavit of the Chief Revenue Accountant, Collectorate stating that certain plots of Mukundpur Farm were for the first time let out in the year 1959 60.
It would, therefore, appear that the period of ten years had not expired when the recovery proceedings were initiated.
There remains the question whether the Government is bound to recover the unrealised sum of taccavi loan from the amount of compensation money and relying upon section 6 (e) of the U.P. Zamindari Abolition and Land Reforms Act it is urged that is the only remedy left.
The contention, we are afraid, proceeds on a misconception of the purport and effect of section 6 (e) of the Act, which reads: "6(e).
all amounts ordered to be paid by an intermediary to the State Government under Sections 27 and 28 of the U.P. Encumbered states Act, 1934, and all amounts due from him under the , or the Agricultural Loans Act, 1884, shall, notwithstanding anything contained in the said enactments, become due forthwith and may, without prejudice to any other mode of recovery provided therefor, be realized by deducting the amount from the compensation money payable to such intermediary under Chapter III.
" It is plain upon its terms, that the provisions of section 6(e) are not obligatory.
It is an enabling provision.
It provides that all amounts due under the , shall notwithstanding anything contained therein, become due 'forthwith ', upon the vesting of the zamindari rights.
It then lays down that such dues may, with out prejudice to any other mode of recovery provided therefor, be realised by deducting the amount from the compensation money payable to such intermediary.
It, therefore, provides an additional mode of recovery for realisation of the dues.
The word 'may ' in section 6(e) clearly indicates that the Government has the option to fall back upon the compensation amount.
It does not entail in the consequence that the mode indicated in section 6(e) is the one and the only mode available.
The High Court has observed that the entire amount of compensation money which fell to the appellant 's share amounting to Rs. 38,951.8P had been adjusted towards the loan, on the basis that the half share of the appellant in the zamindari property had been hypothecated as security for the loan.
The recovery proceedings now pending before the Collector is for the balance remaining after such adjustment together with interest.
It was faintly argued by learned counsel for the appellant that the Government was bound to render an account of the rents and profits 189 realised from the letting of plots of Mukundpur Farm, but he did not A pursue the argument any further and rightly so.
The High Court has observed that it had scrutinized the accounts maintained by the Government and the same have been maintained as required by the taccavi rules as per appendix 'A ' to Form VII.
It was certainly not open to the High Court to grant any such relief under article 226 of the Constitution particularly when it involved consideration of disputed question of fact.
The result, therefore, is that the appeal fails and is dismissed with costs.
P.B.R. Appeal dismissed.
| Accepting the plea of self defence, the Sessions Judge held that the accused was entitled to the protection of Section 96 Penal Code and had therefore committed no offence.
However the ordered confiscation to Government of M.O. 1, the licensed gun surrendered by the accused.
A revision petition filed against the said direction having failed before the Kerala High Court, the appellant obtained special leave from this Court.
Allowing the appeal, the Court ^ HELD: 1.
The impugned order of confiscation of the gun being arbitrary and unjust, cannot be sustained.
(a) The Sessions Judge did not give any reason, whatever, for directing confiscation of this licensed gun admittedly belonging to the appellant accused.
There was no material before him indicating the special circumstances which would warrant a departure from the general rule.
There was nothing on the record to show that the Sessions Judge had, before passing the order of confiscation, given an opportunity of being heard to the accused specifically with regard to this matter; (b) there was absolutely no material before the High Court to show that in the past twenty years during which the appellant had been in lawful possession of this gun under a licence, he had ever used or attempted to use this gun for commission of any offence from which, in the event of the gun being restored to the appellant, a likelihood of his misusing the gun "again" could be reasonably predicated or even suspected.
[232B D & E F] Pushkar Singh vs State of Madhya Bharat, A.I.R. 1953 SC 508, followed.
Lalluram Mohanlal vs State of Gujarat, A.I.R. 1967 Guj.
268, approved.
An analysis of the provision in Section 517 of the Code of Criminal Procedure, 1898 would show that it refers to property or document (a) which is produced before the Court, or (b! which is in the custody of the Court, or (c) regarding which any offence appears to have been committed, or (d) which has been used for the commission of any offence.
Then, at the conclusion of the enquiry or trial, the disposal of any] class of the property listed above, may be made by (i) destruction, (ii) confiscation, or (iii) delivery to any person entitled to be possession thereof.
[231D E] In the instant case, the gun in question does not fall either under class (c) or class (d) because it is neither property "regarding which any offence appears to have been committed", nor "which has been used for the commission of any 229 offence".
The acquittal of the accused on the ground that this gun was used in causing the fatal injury to the deceased, only in self defence, necessarily involved a finding that the gun was not used in the commission of any offence for which the accused was tried.
The gun was obviously property falling under class (b).
[231 E G] 3.
The words "may make such order as it thinks fit" in the section, vest the Court with a discretion to dispose of the property in any of the three modes specified in the Section.
But the exercise of such discretion is inherently judicial function.
The choice of the mode or manner of disposal is not to be made arbitrarily, but judicially in accordance with sound principles founded on reason and justice, keeping in view the class and nature of the property and the material before the Court.
One of such well recognised principles is that when after an inquiry or trial the accused is discharged or acquitted, the Court should normally restore the property of class (a) or (b) to the person from whose custody it was taken.
Departure from this salutary rule of practice is not to be lightly made when there is no dispute or doubt as in the instant case that the property in question was seized from the custody of such accused and belonged to him.
[231G H, 232 A B] Arjun Padhy and Ors.
vs State of Orissa & Anr.
A.I.R. 1965 Orissa 198; disapproved.
|
Appeal No.793 of 1957.
Appeal by special leave from the judgment and order dated September 20, of the Patna High Court in M.J.C. No. 392 of 1955.
C. K. Daphtary, Solicitor General of India, A. B. N. Sinha and B. P. Maheshwari, for the appellant.
section P. Varma, for respondents Nos.
1,2,6 8 and 10 23. 1958.
November 4.
The Judgment of the Court was delivered by BHAGWATI, J.
This appeal with special leave is directed against the judgment of the High Court of Judicature at Patna dismissing the writ application of the appellant seeking to quash the proceedings in Miscellaneous Cases Nos. 26 and 27 of 1955 before the Industrial Tribunal, Bihar, Patna.
Gaya Sugar Mills Ltd., a Company incorporated in 1934 owned a Sugar Factory at Guraru, District Gaya.
An order for the compulsory winding up of the Company was passed on November 4,1951, and by a subsequent order dated February 1, 1952, one Dhansukh Lal Mehta was appointed liquidator of the Company.
In order to preserve the aforesaid Sugar Mills at Guraru in proper running order and also for the beneficial 256 winding up of the Company the liquidator obtained under section III (b) of the Indian Companies Act sanction of the Court to lease out the said Mills with all the lands, factory and residential buildings and machineries etc.
The Guraru Cane Development and Cane Marketing Union Ltd., were the former lessees of the said mills but on the expiration of their lease, the liquidator obtained from the Court an order on December 3, 1954, sanctioning the lease in favour of Shri Krishna Gyanody sugar Ltd .; the appellant herein, for the period December 5,1954 up to and inclusive of November 14,1955.
The liquidator executed in favour of the appellant lease of the said Mills on December 6, 1954, and handed over possession of the same to the appellant the same day.
The terms and conditions of the lease, in so far as they are material for our purposes provided that the appellant would be put into possession of the leasehold properties in a proper working order and would work and run the factory without any interference or obstruction by or on behalf of the lessor and would appropriate the entire income and profit thereof and the lessor would have no concern with profit or loss made by the lessee in running the said factory and would not be entitled to any sum or amount over and above the rent therein reserved.
The appellant was not to be in any way liable or responsible for any of the liabi lities of the Company or of the liquidator or of the out going lessees incurred whether before or after the appellant entered into possession except those mentioned therein.
The appellant was at its own cost entitled always to install 'any additional or other machinery or machineries and erect god owns or structures for the Purposes of and in connection with the running of the said Mills after intimation to the lessor.
The appellant was not bound to engage any or all of the employees of the lessor or of the" Outgoing lessees or any of the persons who had been working from before except the 18 employees who were mentioned in Cl. 11 of the lease and the appellant also agreed not to retrench any staff already employed at that date in the Factory at Guraru (vide cl.
13(v),of the lease).
The 257 properties demised by the said lease were deemed to be in the control of the Patna High Court and any dispute between the lessor and the appellant in respect of the said lease was to be placed before the said Court for decision and the decision made by the said Court was to be binding on all the parties.
It appears that on December 2, 1954, i.e., 4 (lays before, the execution of the said lease and delivery of possession of the said Mills by the liquidator to the appellant, the; Government of Bihar issued a notification referring certain disputes between the Managements of the, Sugar factories specified in Appendix I thereto and their workmen represented by the Unions specified in Appendix It for adjudication to an Industrial Tribunal of which Shri Ali Hassan, the respondent No. 1 herein, was to be tile sole member.
The terms of the reference stated : " Whereas the State Government is of opinion that ail Industrial dispute exists or is apprehended between the Management of the Sugar factories as specified in Appendix I and their workmen represented by the Unions as specified in Appendix 11 regarding the matters specified in Annexure A ; Now, therefore, in exercise of the powers conferred by section 7 read with sub section (1) of section 10 of the (XIV of 1947) and in supersession of Notification No. III/ DI 14020/54L15146 dated the 1st October, 1954, the Governor of Bihar is pleased to constitute an Industrial Tribunal of which Mr. Ali Hussan shall be the sole member and to refer the said dispute to the said Tribunal for adjudication.
Annexure "A" 1.
Retaining allowance to seasonal employees in Sugar factories in Bihar.
Leave and holidays to the employees including seasonal employees in Sugar factories.
Whether the deduction made in leave and holidays of the employees of the Management of the Sugar factories is unjustified and if so what compensation or relief, the workmen are entitled to 33 258 There were as many as 28 Sugar factories specified in Appendix I and as many as 38 Labour Unions specified in Appendix 11.
The Gaya Sugar Mills Ltd., Guraru was the second item in Appendix I and the Chini Mazdoor Sangh Guraru was mentioned at the third item in Appendix 11.
The respondent No. 1 entered upon the said reference.
Even though Gaya Sugar Mills Ltd., Guraru which was then in liquidation was not specifically described as such in Appendix 1, notice was given to the, liquidator by the respondent No. 1 for January 11, 1955, which was the date fixed for hearing before him.
The said letter however reached the liquidator on January 13, 1955, whereupon by his letter dated January 14, 1955, he informed respondent No.1 about it.
Respondent No. 1 however satisfied himself by merely endorsing on the letter of the liquidator that the hearing had already concluded and nothing further than inquiring of the post office as to the reason of the delay in the delivery of the letter could be done.
Respondent No.1 made his award on February 17, 1955, and it was published in the Official Gazette on February 23, 1955.
The adjudication proceedings which had thus commenced on the date of the reference viz., December 2, 1954, came to a conclusion on the expiry of 30 days of the publication of the award viz., on March 25, 1955, under section 20(3) of the .
It appears that an appeal was taken to the Labour Appellate Tribunal against this award and the appeal was decided on August 31, 1956.
Even though the appellant was in possession of the said Mills under the terms of the lease dated December 6, 1954, no notice was given by respondent No. 1 to the appellant and the appellant therefore could not and did not appear before respondent No. 1.
So far as the appellant was concerned the proceedings before respondent No. 1 were ex parte.
Two applications were, however, made on March 23, 1955, under section 33A of the , one by 15 persons alleging that the appellant had without any reason and without any notice discharged them from employ one by one during the months of January and February 259 1955 and the other by 5 persons alleging that the appellant had changed their conditions of service without any reason, contending that the said discharges and the change in conditions of service had been effected by the appellant during the pendency of the disputes before the Industrial Tribunal aforesaid without the permission of the Industrial Tribunal having been obtained under section 33 of the Act.
These applications were numbered as Miscellaneous Cases Nos. 26 and 27 of 1955 and the appellant received on April 7, 1955, two notices from respondent No. 1, both dated March 25, 1955, informing the appellant about the filing of the two miscellaneous cases and calling upon the appellant to file statements showing cause by April 19, 1955.
The appellant accordingly filed before respondent No. 1 two applications or statements contending inter alia that the application under section 33 A of the , filed by those persons (respondents Nos. 4 to 23 herein) were not maintain.
able and were otherwise fit to be rejected.
It was asserted on behalf of the appellant that the appellant as lessee of the said Mills had strictly complied with the terms and conditions of the lease and there had been no contravention on its part of section 33 of the Act, in regard to any of the workmen concerned in the aforesaid two miscellaneous cases.
It was pointed out that none of the persons who had filed the said applications was comprised in the 18 persons who were specifically mentioned in Cl. 11 of the lease and who were specifically exempted from the operation of the said clause nor were they comprised in the category of members of the staff whom the appellant as lessee, was not entitled to retrench under Cl.
13(v) of the lease, with the result that none of the said clauses of the lease could be said to have been violated by the appellant.
On July 13, 1955, the appellant filed in the High Court of Judicature at Patna a writ application under articles 226 and 227 of the Constitution being Miscellaneous Judicial Case No. 392 of 1955 impleading the Chairman, Industrial Tribunal, Bihar as respondent No. 1, the State of Bihar as respondent No. 2, the liquidator as respondent No. 3 and the applicants in 260 the said miscellaneous cases Nos. 26 and 27 of 1955 pending before the Industrial Tribunal as respondents 'Nos. 4 to 23 for a writ of certiorari quashing the said Miscellaneous Cases Nos. 26 and 27 of 1955, a writ of Mandamus restraining the respondent No. 1 from proceeding with or otherwise dealing with the said miscellaneous cases costs and further and other reliefs.
The main Contentions urged by the appellant in the said petition were: (1) that under each one of the points referred for adjudication, considerable burden was sought to be imposed on the sugar factories concerned ; that all the properties and effects of the Gay Sugar Mills Ltd., were in the custody of the Court as from the date of the order for Winding up viz., November 14,1951 ; that ,the said notification did not purport to include Gaya Sugar Mills Ltd., in that light and did not describe the company as having already gone into liquidation ; that no leave of the Court was obtained before commencing or continuing the proceedings before the Tribunal and in fact the liquidator was neither named as a party nor was any notice given to him of the commencement of the proceedings and that therefore go far as the Gava Stugar Mills Ltd., (In Liquidation) was concerned there was no proceedingly in the eye of the law before respondent No. 1 and as such the Miscellaneous Cases Nos. 26 and 27 of 1955 of which notices had been sent to the appellant were not maintainable; and (2) that no notice of the adjudication proceedings arising out of the aforesaid Notification dated December 2, 1954, " as at any stage given to the appellant who was in possession under the terms of the lease granted by the Court ; that the appellant being lessee under orders and under terms of the lease approved by the Court was liable for breach of the terms of the lease, if any, and that also to the Court alone; that there was no violation of section 33 of the , if the appellant bona fide acted up to the terms of the lease and being itself no party to any adjudication proceedings before any Tribunal or before respondent No. 1 there could be no breach of section 33 of 261 the Act and as such no application under section 33A.of the, Act could be maintained against the appellant.
No affidavit in reply was filed by or on behalf of any of the respondents and the application came up for hearing before Ramaswami, C. J. and Raj Kishore Prasad, J. who delivered the judgment of the Court on September 20, 1956, dismissing the application with costs.
Assuming but without, expressing any opinion that the reference made by the State Government under section 10(1) of the Industrial Disputes Act was a legal proceeding within the meaning of section 171 of the Indian Companies Act the High Court held that section 10(1) of the Industrial , Disputes Act, was not controlled by section 171 of the Indian Companies Act and therefore no leave of the Court was necessary before making a reference of the Industrial Disputes under section 10 (1) of the Industrial Disputes, Act.
It was also of opinion that even though the reference under section 10(1) of the Industrial Dispute Act was made by the State Government on December 2, 1954, and the applicant had taken the lease of the said Mills subsequently i. e., on December 6, 1954, the applicant was an " employer " within the meaning of the term used in sections 33 and 33A of the Act, and that it was not necessary for the application of either of those sections that the employer who discharges or punishes the workmen or who alters the conditions of service of the workmen should be the identical employer concerned in the industrial dispute which is the subject matter of adjudication.
It was sufficient for invoking the provisions of either of those sections that there is the relationship of employer and employee at the time the workman is discharged or punished or at the time his conditions of service are altered to his prejudice.
It was further of opinion that even though the liquidator was not made a party to the reference made by the State Government under section 10(1) of the , the Gaya Sugar Mills Ltd., Guraru was specifically mentioned as one.
of the parties in Appendix I, that the Gaya Sugar Mills Ltd., continued to be a legal personality though an order for winding up had been made and that there 262 fore the Company was properly made a party to the reference under section 10(1) of the Act.
The fact that the notice given to the liquidator on January 11, 1955, might have been received late by the liquidator did not, in the opinion of the Court, make any difference to the position inasmuch as the award of the Industrial Tribunal was made on February 17, 1955, i. e., long after the date of the notice and there was no lack of jurisdiction in the Industrial Tribunal to make the award valid and binding on the Gaya Sugar Mills Ltd., Guraru.
The High Court accordingly rejected the application as stated above.
The applicant applied for leave to appeal to this Court on November 9, 1956, but the High Court refused to grant the certificate on the ground that the proceeding for grant of a writ of certiorari under article 226 is not a civil proceeding within the meaning of article 133 of the Constitution.
The applicant thereupon applied for and obtained from this Court on April 1, 1957, special leave to appeal and the appeal has now come up for hearing and final disposal before us.
The two main contentions which were urged before us by the learned Counsel for the appellant were: (1) that the Gaya Sugar Mills Ltd., Guraru had been taken into liquidation and respondent No. 3 had been appointed the liquidator thereof; that the reference made by the State Government to the Industrial Tribunal on December 2, 1954, involved considerable financial burden on the said Mills and the State Government ought to have obtained the sanction of the Court under section 171 of the Indian Companies Act before making a reference of the industrial disputes to the Industrial Tribunal under section 10(1) of the , qua the said Mills and that not having been done, the reference was bad in law and there was no question of the applicability of either section 33 or section 33A of the Act, and (2) that on a true construction of sections 33 and 33A of the Act, the " employer " therein mentioned could only be the " employer " concerned in the industrial dispute which was the subject matter of reference, that the applicant had taken the lease of the said: 263 sugar Mills on December 6, 1954, 4 days after the date of reference made by the State Government under, section 10(1) of the Act, and that therefore the applicant was not an " employer " within the meaning of the terms as used in section 33 or section 33A of the Act, and even if the allegations made by the applicants in Miscellaneous Cases Nos. 26 and 27 of 1955 before respondent No. 1 were correct, it was not necessary for the applicant to have obtained the permission of the Industrial Tribunal under a. 33 of the Act, and therefore the said applications under section 33A of the Act, filed by res pondents 4 to 23 were not maintainable.
It will be appropriate at this stage to set out the relevant sections of the Indian Companies Act and the (as they then stood) which fall to be considered by us in this appeal.
section 171 (Indian Companies Act): " Suits stayed on winding up order: When a winding up order has been made or a provisional liquidator has been appointed no suit or other legal proceeding shall be proceeded with or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
" S.10(1) (Industrial Disputes Act, 1947):Reference of disputes to Boards, Courts or Tribunals: Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time, by order in writing (a) refer the dispute to a Board for promoting a settlement thereof; (b) refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry or (c) refer the.
dispute or any matter appearing to be connected with or relevant to, the dispute to a Tribunal for adjudication: Provided that where the dispute relates to a public utility service and a notice under section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so 264 to do, make a reference under this subsection not withstanding that any other proceedings under this Act in respect of the dispute may have commenced," section 33 (Ibid): Conditions of service etc., to remain unchanged during pendency of proceedings During the pendency of any conciliation proceedings or proceedings before a Tribunal in respect of any industrial dispute, no employer shall (a) alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applicable, to them immediately before the commencement of such proceedings; or (b) discharge or punish, whether by dismissal or otherwise, any workman concerned in such dispute, save with the express permission in writing of the conciliation officer, Board or Tribunal, as the case may be." 33 A (Ibid): Special provisions for adjudication as to whether conditions of service etc., changed during pendency of proceedings: " Where an employer contravenes the provisions of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the prescribed manner to such Tribunal and on receipt of such complaint that Tribunal shall adjudicate upon the complaint as if it were a dispute referred to or pending before it, in accordance with the provisions of this Act and shall submit its award to the appropriate Government and the provision of this Act shall apply accordingly.
" As to (1): Section 171 of the Indian Companies Act occurs in Part V which relates to the winding up of companies and prescribes that once a winding up order has been made no suit or other legal proceedings shall be proceeded with or commenced against the Company except by leave.of the winding up Court and subject to such terms as the Court may impose.
The Court is in custody of all.
the properties and assets of the Company through the liquidator and is in control of the winding up proceedings with a view to the proper realization of the assets: and, the equitable, 265 distribution thereof amongst the creditors of the Company.
No suit or other legal proceeding can therefore be proceeded with or, commenced against the ' Company except by leave of the Court and such leave is a necessary prerequisite of the prosecution of such legal proceeding.
In order to decide the question of the applicability of section 171 of the Indian Companies Act it has to be ascertained (a) whether the reference in question is a proceeding against the Company, and, if So (b) whether such reference can be said to be a legal proceeding within the meaning of section 171 of the Indian Companies Act.
There has been unfortunately a considerable confusion of thought in the court below and the facts have not been properly appreciated.
The first question to determine was who was the party to the reference.
It appears to have been assumed that the Gay a Sugar Mills Ltd., was a party to the reference and that the only defect in the order of reference was that the liquidator was not made a party to the refer ence.
This difficulty was sought to be got over by holding that the Gaya Sugar Mills Ltd., continued to be a legal personality though an order for winding up had been made, that the Company had not ceased to exist as a legal.
entity, and, therefore, the Company was properly made a party to the reference under section 10(1) of the .
This was, however, not the correct position on a true interpretation of the terms of reference.
The reference was between the managements of the Sugar factories specified in Appendix I and their workmen represented by the Unions specified in Appendix 11.
Gaya Sugar Mills Ltd., Guraru was mentioned as item 2 in Appendix I but it is quite clear that what was intended to be made a party to the reference under this item was the: management of the Sugar factory which belonged to the Company called the Gaya Sugar Mills Ltd., whoever.
that management may be.
The mention of the Company was to indicate and to point out the particular factory whose management for the time being was to be one of the parties to the reference and 34 266 it required to be ascertained who was comprised within the " management " of the Mills.
The State Government could not have been oblivious of the fact that the Company had gone into liquidation and a liquidator of the Company had been appointed by the court and was leasing out the factory to different lessees.
If the Company itself were a party to the reference the liquidator ought to have been mentioned there as such but that apparently was not done for the simple reason that the factory was being worked by the lessees under the terms of the leases duly sanctioned by the court.
The liquidator was therefore not in management of the factory and the only persons who were in management were the then lessees to whom leases were granted by the liquidator with the sanction of the court.
The Industrial Tribunal was obviously in error when it gave notice of the proceedings to the liquidator.
The liquidator was no more in management of the factory and was therefore not entitled to be served with any notice; the then lessees were in management and they were the only parties to whom notice of the proceedings should have been given.
The liquidator no doubt wrote to the Industrial Tribunal that he had received the notice too late for him to attend.
This letter of the liquidator was treated with scant courtesy by the Industrial Tribunal who merely endorsed at the foot of the letter that the hearing had already concluded and nothing further than enquiring of the Post Office as to the reason of the delay in the delivery of the letter could be done.
The Industrial Tribunal proceeded to make its award on February 17, 1955, without having before it the management of the factory, viz., the lessees who had obtained the lease of the said Mills from the liquidator and for all practical purposes the said award was ex parte so far as the lessees who were at the date of the reference in management of the factory and were obviously intended to be a party to the reference were concerned.
The appellant came into management of the factory after the reference and could not at the date of the reference be in contemplation of the State Government as a party and in any 267 event, no notice whatever was given to the appellant ' of the proceedings before the Tribunal.
By no stretch of imagination could it be said that the Company (In Liquidation) was a party to the reference, the said Mills having been given on lease to the lessees who worked the Mills thereafter not for and on behalf of the Company but on their own account, they being responsible for the profit and loss in the working of the Mills.
The Company thus not being a party to the reference the proceedings which were commenced on December 2, 1954, before the Tribunal were not proceedings against the Company (In Liquidation).
This being the position on a true construction of the terms of the notification by which the reference was made the question whether the reference was a legal proceeding within the meaning of section 171 Of the Indian Companies Act does not arise for our decision and we prefer not to express any opinion on that part of the question.
As to (2): The next question to consider is the connotation of the term " employer " as used in sections 33 and 33A of the .
These sections postulate the pendency of a proceeding of an industrial dispute.
It requires two to raise a dispute.
An Industrial Dispute is thus defined in section 2(k) of the Act:,, Industrial dispute " means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with conditions of labour, of any person.
If this definition is bodily lifted from section 2 (k) and substituted for the expression " industrial dispute " ,occurring in section 33 and sections 33 and 33A of the Act are then read, it will at once become clear that the employer can be no other than the employer with whom the workers had the industrial dispute and cannot mean merely an employ who discharges or punishes or who alters the conditions of service of the workmen concerned.
If the interpretation adopted by the High Court was correct it would mean that the Industrial 668 dispute which is referred for adjudication to the Industrial Tribunal may have arisen between employer A and his workmen but during the pendency of those proceedings employer B who had nothing to do with employer A would be prevented from discharging or punishing the workmen or altering their conditions of service, provided only that the workmen concerned happened to be interested in the industrial dispute which was pending before the Industrial Tribunal.
If there is no connection at all between the employer A and the employer B in the illustration given above, one fails to see how a mere identity of the establishments or the identity of the workmen could be enough to bring the employer B within the purview of these sections.
The very purpose of the enactment of as.
33 and 33A of the is, as observed by this Court in the Automobile Products of India Ltd. vs Bukmaji Bala (1). " to ensure that proceedings in connection with industrial disputes already pending should be brought to a termination in a peaceful atmosphere and that no employer should during the pendency of those proceedings take any action of the kind mentioned in the sections which may give rise to fresh disputes likely to further exacerbate the already strained relation between the employer and the workmen.
To achieve this object a ban has been imposed upon the ordinary right which the employer has under the ordinary law governing a contract of employment.
Section 22 of the 1950 Act and section 33 of the 1947 Act which impose the ban also provide for the removal of that ban by the granting of express permission in writing in appropriate cases by the authority mentioned therein.
" The scope of the enquiry under section 33 of the has also been the subject matter of adjudication by this Court and it was held in Atherton West & Co., Ltd. vs Suti Mill Mazdoor Union (2) that the authority: " concerned would institute an enquiry and come to the conclusion whether there was a prima facie case (1) [1955] i S.C.R. 1241, 1256.
(2) ; , 787. 269 made out for the discharge or dismissal of the workman and the employer, his agent or manager was not actuated by any improper motives or did not resort to any unfair practice or victimisation in the matter of the proposed discharge or dismissal of the workman.
" A similar ratio would apply where an employer changes the conditions of service of the workmen concerned.
If this be the criterion for determining whether an employer was entitled to discharge or punish the workmen or alter their conditions of service without the permission in writing of the authority concerned that employer cannot be any other than the one who is concerned in the industrial dispute which is the subject matter of adjudication.
If employer B has nothing to do at all with employer A who is really the party concerned in such industrial dispute which is the subject matter of adjudication, there will be no question of attributing any improper motives or unfair practice or victimization to the employer B in regard to the action which he proposed to take against the workmen.
Whether the employer B would be entitled to such action or not would have to be determined in other proceedings which may be taken in the matter of industrial disputes which may subsequently arise between himself and his workmen after such action was taken.
But he would certainly not be bound before taking such action to seek the permission in writing of the Industrial Tribunal before which an industrial dispute was pending as between those workmen and another employer with whom he had no concern.
The latter interpretation is therefore more in consonance with the principle underlying the enactment of section 33 of the and it must be held that the employer contemplated by sections 33 and 33A of the must be the identical employer concerned in the industrial dispute which is the subject matter of adjudication.
In other words, the employer contemplated by sections 33 and 33A of the must be the employer with whom the workmen mentioned as aggrieved under section 33 had a subsisting relationship of employer 270 and employees at the commencement of the proceedings referred to in those sections.
The identity of the employer at the commencement of the reference with the employer who intends to take proceedings within the ban of section 33 of the Act must be established and if the latter has no concern with or relationship with the former sections 33 and 33A of the Act do not dome into operation at all.
Such identity could in the event of change in the employers be established by showing that the latter employer was merely a nominee or Benamidar of the former or that on the analogy of section 18(3)(c) of the he came with in the description of " his heirs, successors or assigns in respect of the establishment to which the dispute relates, in which event the award made by the Indus.
trial Tribunal would be binding on him just as much as on the former employer of the workmen concerned.
These are, however, the only cases in which according to the provisions of the the identity of the employers at the commencement of the proceedings and the intended discharge or punishment or change in the conditions of service of the workmen concerned could be established and unless the employer who intended to discharge or punish or change the conditions of service of the workmen was in this sense identical with the employer who was concerned in the industrial dispute which is the subject matter of adjudication no question could arise of the operation of section 33 or section 33A of the .
What then was the position of the appellant under the reference in question ? It does not appear from the record as to who was the management of the said Mills on December 2, 1954.
The lease in favour of the old lessees, Guraru Cane Development and Cane Marketing Union Ltd., had apparently come to an end by efflux of time, the period of the lease presumably being up to the end of the crushing season which would end some time in the month of November, 1954.
An application had been made by the liquidator to grant a lease in favour of the appellant and this application was granted by the Court on December 3, 1954, so that in any event before December 3, 1954, the appellant could 271 not be said to be in management of 'the said Mills.
As a matter of fact, the lease was executed in favour of the appellant on December 6, 1954, and the possession of the said Mills was also given to the appellant by the liquidator on the same day.
It could not, therefore, be said that the appellant was comprised within the description of the management of the Gaya Sugar Mills Ltd., at the date when the reference was made by the State Government.
If that was so, a reference Of a previous date, without anything more, could not comprise the appellant within its scope and that appears to have been the position as understood even by the Industrial Tribunal which gave no notice to the appellant but gave notice of the proceedings erroneously as we hold to the liquidator of the Company.
The appellant was not in management of the said Mills and it could not be bound by the reference because at no stage was any attempt made either to amend the terms of the reference or even to serve on the appellant a notice of the proceedings which were to take place before the Industrial Tribunal.
Under the Industrial Disputes (Central) Rules, 1947, enacted by the Central Government in exercise of the powers conferred upon it by section 38 of the , intimation of the place and time of hearing had got to be given to the parties to the reference (Rule 10); and the Industrial Tribunal was enjoined to call upon the parties at the first sitting to state their case (Rule 11) the only power given to the Industrial Tribunal to proceed ex parte was when a party to the proceedings failed to attend or to be represented without good cause shown (Rule 19) ; and the representatives of the parties appearing before an Industrial Tribunal were to have the right of examination, cross examination and of addressing the Tribunal when evidence had been called (Rule 24) : The 'whole of this procedure envisaged the parties to the reference being properly notified of the proceedings before the Industrial Tribunal and taking part therein either by themselves or through, their authorised representatives.
The fact that no such notice was given to the appellant by the Industrial Tribunal goes to show that in the circum 272 stances that obtained the appellant was certainly not understood by the Tribunal as having been a party to the reference and it could not be said on the terms of the reference itself which was made on December 2, 1954, that the appellant, which came into existence as the lessees of the said Mills on December 6, 1954, was a party to the said reference.
If the old lessees were in management of the said Mills on December 2 1954, there was no identity of employers as between them and the appellant, the appellant certainly did not claim under the old lessees nor could it be described as their " heirs, successors or assigns " in respect of the establishment to which the dispute related within the meaning of section 18(3) (c) of the , There is no suggestion whatever that the appellant was or is a benamidar of the previous lessees.
In no event could the appellant therefore be held to be, bound either by the reference or the award made by the Industrial Tribunal, the identity of the employers at the date of the reference with the employers at the time when the acts complained of in the applications under section 33 A of the were purported to be done by them not having been established.
If that is the true position, no question of the appellant obtaining written permission of the Industrial Tribunal under section 33 of the Act for discharging or punishing or for effecting a change in the conditions of service of the workmen concerned could arise.
If no such permission were needed, section 33A of the Act also could not come into operation and the applications in Miscellaneous Cases Nos. 26 and 27 of 1955 we 're not maintainable.
The result is no doubt unfortunate ; because the Industrial disputes which were referred to the Industrial Tribunal by the reference in question were general in their nature and would comprise within their scope the workmen who were working in the Gaya Sugar Mills Ltd., at all relevant times.
The appellant came in management of the said Mills from and after December 6, 1954, and it was certainly intended that these, disputes which had either existed or were apprehended between the appellant on the one hand and the workmen 273 working in the said Mills on the other should be adjudicated upon under the terms of that reference.
If the appellant could be comprised within the description of the " management " of the said Mills at the date of the reference, viz., December 2, 1954, the object and the purpose of the reference qua the workmen of the said Mills would be accomplished.
The difficulty, however, is that the several managements which would come into existence on successive leases being granted by the Court in the present case cannot be said to have been comprised within the term "managements of the Sugar factories specified in Appendix I" even though the Gaya Sugar Mills Ltd., Guraru is mentioned as item 2 therein.
Such a construction would make the several successive lessees who came into existence during the whole of the period when the reference was pending before the Industrial Tribunal parties to the reference involving fresh notices to be issued, fresh statements of case to be furnished, fresh hearing to be granted, to each of the successive lessees under the Industrial Disputes (Central) Rules, 1947, a result which certainly could not have been contemplated by the State Government when the reference was made.
It, therefore, follows that the appellant was not by any count a party to the reference dated December 2, 1954, and not being such a party was not an "employer" within the meaning of sections 33 and 33 A of the qua the workmen who filed the applications in Miscellaneous Cases Nos. 26 and 27 of 1955.
If the workmen felt that they have been victimised or that there had been an unfair labour practice, they could perhaps raise fresh industrial disputes and press the State Government to make a fresh reference of their industrial disputes under section 10(1) of the Act, as to which we say nothing, but it is quite clear to us that the workmen cannot in the circumstances of this case raise an industrial dispute indirectly by having recourse to an application under section 33 A of the Act.
In the premises if the appellant was not bound, as we hold it was not, to ask for the written permission of the 35 274 Industrial Tribunal before discharging, punishing or effecting a change in the conditions of service of the workmen concerned no application under section 33 A of the Act could be maintained against it even on the assumption that the allegations made in the said applications were correct.
The result, therefore, is that the proceedings in Mis cellaneous Cases Nos. 26 and 27 of 1955 before the res pondent No. 1, Industrial Tribunal, Bihar, Patna are without jurisdiction and liable to be quashed.
The appeal of the appellant will therefore be allowed, the order made by the High Court on September 20, 1956, will be set aside and a writ of certiorari will issue against respondent No. 1 quashing the proceedings in the said Miscellaneous Cases Nos. 26 and 27 of 1955.
The appellant will be entitled to its costs throughout against the contesting respondents.
Appeal allowed.
| The contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before February 11, 1981 in (1) transportation of materials within the plant which was not dependent on outside supply, (2) processes connected with manufacturing process, (3) removal and handling of waste products, and (4) sweeping and cleaning of machines etc., sought permanent employment under the principal em ployer.
The dispute was referred by the State Government under section 10 of the to the Industrial Tribunal.
The Tribunal held that the workmen constituted the contract labour and, therefore, the reference was not main tainable.
It further held that action, if any, had to be taken under section 10 of the , power to take steps for which vested in the State Government and not in the Tribunal.
The writ petition challenging the award was dismissed by the High Court in limine.
In the appeal by special leave it was brought to the notice of the Court on behalf of the management that con tract labour was now confined to item 3 only.
Disposing of the appeal, the Court ordered: 1.
The reference to the Tribunal shall now read: "Wheth er the contract workers engaged by the management of the Tata Iron and Steel Company Ltd., Jamshedpur in the perma nent and regular nature of work before 11.2.1981 are enti tled to permanent employment in 978 regard to items 1, 2 and 4 under the principal employer".
[980B C] 2.
The State Government to take its own decision within three months under the provisions of the in regard to item No. 3 as to whether the contract labour employment should be terminated.
[980D] 3.
The Tribunal to dispose of the dispute within six months.
[980F]
|
Civil Appeal No. 353 (N) of 1971.
From the Judgment and Order dated 29.7.
1970 of the Punjab and Haryana High Court in C.W. No. 2331/70.
Civil Appeal No. 1469 (N) of 1972.
From the judgment and order dated 28.
1971 of the Patna High Court in C.W No. 1330/10).
AND Civil Appeal No. 1470 of 1972.
From the judgment and order dated 24.
1971 of the Calcutta High Court in F.M.A. No. 201 of 1971) Dr. Y. section Chitale, Anil Sharma and Praveen Kumar for the Appellants.
M. section Gujaral, V. K. Punjwani, C. V. Subba Rao and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by BALAKRISHNA ERADI, J.
In these three appeals the parties involved are the same and the point arising for determination is identical.
Hence they were heard together and are being disposed of by this judgment.
963 The Bata Shoe Company Ltd. (hereinafter called 'the company ') is an existing company within the meaning of The ; with its head office at No. 30, Shakespeare Sarani, Calcutta 17.
The company is engaged in the business of manufacturing and dealing in articles of footwear and accessories.
For the purposes of the said business, the company has three manufacturing establishments namely, a factory a Batanagar in the district of 24 Parganas, West Bengal, another factory at Batanagar near Patna in the State of Bihar and a third manufacturing establishment at Faridabad in the State of Haryana.
By virtue of Entry 36 of the First Schedule in the (hereinafter called the 'Act ' ), footwear and parts thereof in or in relation to the manufacture of which any process is ordinarily carried on with the aid of power, is chargeable to excise duty, the rate of duty being ten per cent ad valorem in respect of 'footwear and fifteen per cent ad valorem in respect of 'parts of footwear '.
By a Notification G. section R. 360, dated February 28, 1965 issued by the Central Government in exercise of the powers conferred by Sub rule (1) of Rule 8 of the Central Excise Rules, 1944 for short "the Rules" footwear and parts thereof were completely exempted from levy of excise duty.
However, shortly thereafter, by other Notification dated May 26, 1967, the exemption from duty granted in respect of footwear and parts thereof by the preceding Notification dated February 28, 1965 was withdrawn.
Thereafter followed yet another Notification dated July 24, 1967 which was in the following terms: "NOTIFICATION CENTRAL EXCISES G. section R.
In exercises of the powers conferred by Sub rule (1) of rule g of the Central Excise Rule, 1944 the Central Government hereby exempts, with effect from the 26th may, 1967, footwear falling under Item No. 36 of the First Schedule to the (I of 1944) of which the value does not exceed Rs. 5.00 per pair, from the whole of the duty of excise leviable thereon.
(No. 171/67)" 964 The sole question raised in these appeals Concerns the interpretation of this Notification.
During the year 1967 and 1968, the company was manufacturing certain items of footwear of which the wholesale price was RS. 6.25 per pair The company contended that since the assess able value of such items of footwear calculated in accordance with the provisions of Section 4 of the Act, as they stood at the relevant time was only Rs. 4.94 and hence less than Rs. 5 per pair, such items qualified for exemption from duty under the Notification dated July 26,1967.
Though originally the Department appears to have been inclined to accept the correctness of the stand taken by the company.
Later on they changed their stand and informed the company that the articles of footwear manufactured by it, of which the wholesale price was Rs. 6.25 per pair were chargeable to excise duty since while computing the "value" of the articles for the purpose of judging the applicability of the exemption, the duty element of the cost structure could not be deducted from the whole sale price and on such calculation the value of such footwear would exceed Rs. 5 per pair.
The company took up the matter with the respective Collectors of Central Excise in West Bengal, Bihar and Haryana but without success In the meantime the Department continued to levy and collected from the company substantial amounts by way of duty on such articles of footwear.
The company, therefore, instituted separate Writ Petition in the High Courts of Calcutta, Patna and Punjab and Haryana The Patna High Court allowed Writ Petition of the company and upheld its contention that the articles of footwear in question were not exigible to duty since they fell within the scope of exemption granted the Notification of July 26, 1967.
Accordingly a mandamus refund of the duty illegally collected from the Company was issued by the Patna High Court.
The High Court of Calcutta however, took a different view and accepted the stand of the Department that the expression "value" occurring in the Notification dated July 26, 1967 is not the deemed 'value ' calculated according to the provisions of Section 4 of the Act but is the real and actual 'value ' of the goods after payment of duty.
The High Court of Punjab and Haryana was moved by the company only after short interval of time during which it had been pursuing its remedies before the highest Departmental a Authorities as well 965 as before the Patna and Calcutta High Courts.
A Division Bench consisting of two learned Judges of the Punjab and Haryana High Court dismissed the company 's Writ Petition in limini on the ground that the company had approached the High Court at a very belated stage.
The Division Bench however, certified the case to be St one to this Court under Article 133 of the Constitution of India.
Similar certificates were granted to the company and to the Union of India respectively by the High Courts of Calcutta and Patna.
That is how these appeals have come to be filed in this Court.
After hearing Counsel appearing on both sides and giving our anxious consideration to the matter in all its aspects, we are clearly of the opinion that the view taken by the High Court of Patna is the correct one and the contrary view taken by the High Court of Calcutta cannot be sustained We are also of opinion that on the facts and circumstances of the High Court of Punjab and Haryana was not justified in dismissing the Writ Petition of the company in limini on the ground of delay especially having regard to the fact that the matter was throughout being actively pursued by the company before the Departmental Authorities as well as before the two other High Courts.
Section 3 of the Act is the charging section and Sub section (1) thereof lays down that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into any part of India as, and at the rates, set forth in the First Schedule Section 4 deals with the subject of valuation of excisable goods for purposes of charging of duty of excise.
We shall reproduce that section as it stood at the relevant time, omitting portions thereof which are unnecessary for our present purpose: "4.
Determination of value for the purposes of duty where under this Act, any article is chargeable with duty at a rate dependent on the value of the article, such value shall be deemed to be (a) the wholesale cash price for which an article of the like kind and quality is sold or is capable of being sold at the time of the removal of the articles chargeable 966 with duty from the factory or any other premises of manufacture or production for delivery at the place of manufacture of production, or if a wholesale market does not exist for such article at such place, at the nearest place where market exists.
(b) (Not relevant) Explanation In determining the price of any article under this section no abatement or deduction shall be allowed except in respect of trade discount and amount of duty payable at the time of removal of the article chargeable with duty from the factory or other premises aforesaid.
" Under this Section, in all cases where any article is charge able with duty at a rate 'dependent upon its value ' such 'value ' is to be computed by deducting from the wholesale cash price referred to in clause (a) two components of the price structure namely (1) trade discount and (2) the amount of duty payable on the article at the time of its removal from the factory or other premises of manufacture or production.
The short question for consideration is whether the mode of determination of "value" prescribed by Section 4 is not attracted while computing the "value ' of the articles of footwear for the purposes of testing the availability of the exemption granted under the Notification dated July 26, 1967.
To our mind the answer to the question is perfectly simple.
Section 4 is comprehensive in its coverage and it lays down the procedure to be followed for determination of "value" of any article in every case where the article is chargeable with duty at rate dependent on the value of the article.
On a careful reading of the Notification dated Jul y 26, 1967, it also become clear that the effect of the Notification is to render the chargeability or otherwise to duty of excise of footwear falling under Item 36 of the First Schedule is made wholly dependent upon the 'value ' of the article of footwear; in case such 'value ' exceeds Rs. 5 per pair, duty will be chargeable at the rate of 10% whereas if the value does not exceed Rs. 5 per pair, no duty will be chargeable on such items of footwear, that is the rate of duty will be 'nil '.
It is precisely to such a situation that the provision of Section 4 gets attracted because as expressly stated in the opening part 967 part of the said section the mode of determination of 'value ' specified in the section will be applicable to; all cases where any article is chargeable with duty at a rate dependent upon the value of the article.
In the case of a total exemption, the rate will be 'nil '.
Thus Entry 36 read along with the Notification dated July 24, 1967 clearly shows that the chargeability to duty in respect of any article of footwear is made dependent upon its value in the sense that the chargeability to duty of excise ill arise only if the 'value ' of the article does not exceed RS.
5 per pair.
; It is therefore, plain that before determining the question of availability of the exemption under the Notification dated July 24, 1967, the first essential step is to determine the value of the article in the manner prescribed in Section 4 of the Act.
The fact that on such a computation the article may ultimately be found to be exempted from excise duty does not have any bearing on the question of applicability of Section 4 of the Act for.
determining the 'value, for purpose of duty.
The expression 'for the purposes of duty ' occurring in Section 4 has a wide import.
For all purposes connected with the determination of chargeability and levy of duty the provisions of the section are to be applied for comuptation of the value ' of the article.
Under the Explanation to Section 4, it is mandatory that in determining the price of an article both trade discount as well as the amount of duty calculated as payable on the wholesale cash price payable at the time of removal of the article based on the wholesale cash price referred to in clause (a) are to be deducted from such wholesale price.
This is the view taken by the High Court of Patna in the judgment appealed against C. A. No. 1469 of 1972 and we have no hesitation to agree with the said view.
The High Court of Calcutta was of opinion that Section 4 only lays down the formula or the principle for determination of "value for the purpose of duty" and it has not laid down any principle or formula for the determination of value for exemption from duty as already indicated.
In our opinion this is not a correct interpretation of the scope and ambit of Section 4 of the Act.
In the result, we hold that inasmuch as the value of the articles of footwear in question calculated in accordance with the provisions of Section 4 of the Act did not exceed Rs. 5 per pair, the articles in question were exempt from the charge to duty of excise under the Notification dated July 24, 1967.
968 In the result C. A. No. 1470 of 1972 arising out of the judgment of the High Court of Calcutta, C. A. No. 353 of 1971 filed against the order of the High Court of Punjab and Haryana and the Writ Petitions filed by the company in the High Courts will stand allowed with the direction that the amounts of duty illegally realised by the Department from the company should be forthwith refunded to it.
C. A. No. 1469 of 1972 filed by the Collector of Central Excise, Patna against the decision of the Patna High Court will stand dismissed In C. A. No. 1470 of 1972 and C, A. No. 353 of 1971 the appellants will get their costs from the respondents.
There will be no order as to costs in C. A. No. 1469 of 1972.
S.R. Civil Appeal Nos.
353/1971 and 1470/2 allowed.
Civil Appeal No. 1469/72 dismissed.
| The appellant landlady filed a suit for recovering possession from the respondent tenant on the allegation that the demised property was situated beyond the municipal limits of the town, and was exempt from the provisions of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction), Act 1972, that it was let out to the respondent on a rent of Rs. 360 per mensem, that the tenancy had come to an end by efflux of the time fixed in the rent note, and that as the respondent was in arrears of rent to the extent of Rs. 3,960 she was entitled to recover possession of the premises with the arrears of rent.
The respondent oppose the suit contending that the property was situated within three kilometres of the municipal limits of the town and was, therefore, governed by the provisions of the Act, denied that the rent was Rs. 360 per mensem and contended that it was only Rs. 125 per mensem, denied that he had executed the rent note, and the tenancy had come to an end by efflux of time, that the amounts claimed as arrears of rent and mesne profits were wrong and excessive, that the notice to quit was invalid in law and that the suit was barred by the provisions of section 20 of the Act.
The Additional District Judge who tried the suit exercising jurisdiction as a Judge of Small Causes Court, found that the property was situate within three kilometres of the municipal limits and was governed by the provisions of the Act, that the tenancy for the period of 11 months under the rent note had come to an end by efflux of time, and the parties were governed by it, and that the suit was governed by the provisions of section 20 of the Act.
On the question whether the respondent was liable for eviction it was held that though the respondent had deposited the full amount of rent as claimed at Rs. 360 per mensem together with damages for use and occupation, interest and costs as required by section 20(4) of the Act amounting to Rs. 7,490 a day after the first hearing date fixed for the suit, as the respondent had contended in the written statement that the rent was Rs. 125 per mensem the deposit of Rs. 7,490 towards arrears, interest and costs was not unconditional and therefore invalid 584 and section 20(4) of the Act did not help the respondent.
The suit was accordingly decreed for eviction with arrears of rent and mesne profits.
The respondent filed a revision petition and a Division Bench of the High Court noticed that one of the conditions of section 20(4) of the Act was that the tenant should unconditionally pay or deposit the entire amount due together with interest and costs, and that section 20(6) says that any amount deposited under section 20(4) shall be paid to the landlord without prejudice to the pleadings of the parties, and that in the instant case the deposit would not be a conditional deposit merely because the respondent had contended in the written statement that the rent was Rs. 125 per mensem and not Rs. 360 per mensem as alleged in the plaint.
The civil revision petition was allowed and the suit was dismissed with costs.
Dismissing the appeal, ^ HELD: 1.
The suit in the instant case, is not based on any of the grounds mentioned in section 20(2) of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 and though the respondent is alleged to have been in arrears of rent to the extent of Rs. 3,960 there is no allegation in the plaint that he is in arrears of rent for not less than four months and had failed to pay the same to the appellant within one month from the date of service upon him of a notice of demand, which is the ground mentioned in clause (a) of section 20(2) of the Act.
[588 G H] 2.
No interference with the decision of the High Court is called for.
The District Judge should have normally dismissed the suit for want of jurisdiction in view of section 20(1) of the Act on his finding that the Act is applicable to the premises.
It is not known why he did not do so, but on the other hand proceeded to hold that the deposit by the respondent is not unconditional as required by section 20(4) of the Act and ordered his eviction on that basis.
[589 A B] 3.
It is not possible to construe section 20(4) in the manner done by the District Judge as that would amount to foreclosure of any defence regarding the quantum of rent even in cases where the amount alleged by the landlord is more than the actual rent agreed to between the parties.
[589 C] In the instant case, it had been found by the District Judge that the arrears of rent at the rate claimed in the plaint together with interest and cost had been deposited within the time mentioned in section 20(4) of the Act.
Merely because the tenant had failed to prove his case that the rent was only Rs. 125 per mensem and not Rs. 360 per mensem, the discretionary relief could not be denied to him.
[590 E; 591] Mangal Sen vs Kanchhid Mal, [1982] I SCR 331 at 336 distinguished.
The Act is a social piece of legislation which leans in favour of tenants.
It is not possible to lay down any broad and general proposition that 585 the discretionary relief should be denied to the tenant in all cases where he fails to prove his case regarding the quantum of rent even though he had deposited the rent at the rate claimed by the landlord in the plaint together with interest and costs within the time as required by section 20(4) of the Act.
[590 H; 591 B]
|
Appeal No. 1107 of 1963.
Appeal from the judgment and order dated September 8, 1959 of the Punjab High Court (Circuit Bench) at Delhi, in Civil Regular Appeal No. 17 D of 1954.
B, D. fain, for the appellants.
N. section Bindra and B. R. G. K. Achar, for the respondent.
The Judgment of the Court was delivered by Shah, J.
By a notification issued on March 2, 1937 under section 7 of the Delhi Laws Act, 13 of 1912, the Government of India extended, subject to certain modifications, the United Provinces Town Improvement Act, 8 of 1919, to the territory of Delhi, and thereafter set up an Improvement Trust under the Act for that territory.
The Trust prepared an industrial development scheme with the object of relieving congestion by inducing a flow of population from the crowded parts of the town of Delhi to certain other areas.
Under the scheme land in those areas was to be developed and after construction of roads, storm water drains, street lighting.
29 refuse and sewage disposal works, schools, parks, playgrounds, dispensaries, welfare centres and police station a part of the land was to be allotted to industrial concerns for construction of industrial buildings and the rest for construction of residential and other buildings.
The scheme was sanctioned under section 42 of the Act by the government of India, and was duly promulgated.
Thereafter the Trust resolved in June 1942 to make a supplementary scheme as the land covered by the original scheme was inadequate.
It appeared that the Trust had agreed to provide under the original scheme a block of land comprising 268 acres of land to the Delhi Cloth & General Mills Co. Ltd. hereinafter called 'the Company ' on certain terms and conditions embodied in a resolution dated January 9, 1942, but the Trust was able to offer to the Company under the lay out of the original scheme only 174.84 acres.
It was before proposed by the Trust to modify the scheme as sanctioned and to provide for acquisition of an additional area of 103.16 cres under a supplementary scheme.
On July,18, 1942 notice under section 36 of the Act was published in respect of the supplementary scheme for development of the industrial area, specifying the boundaries of the land in which the scheme was to be worked and inviting objections to the scheme, within one month from the date of publication.
No objections were, it appears raised to the proposed supplementary scheme, and it was finally approved by resolution dated July 31, 1944, and was notified under section 42 of the Act on June 28, 1946.
Land acquisition proceedings were then commenced under section 58 of the Act and awards were made assessing compensation to be paid to the owners of the land for compulsory acquisition.
In the scheme so notified was included an area of 13 bighas of land belonging to the appellants and that land was acquired.
On May 3, 1949 the appellants sued the Delhi Improvement Trust for a declaration that the awards were "wrong and illegal and did not result in acquisition of the suit property" and for an order restraining the Trust from taking possession of their lands under the awards and from interfering in any way with their enjoyment of the lands.
The appellants in support of their claim contended that the notification extending the United Provinces twon Improvement Act, 8 of 1919, was invalid, that the Improvement Trust was not lawfully constituted, that the industrial development schemes were invalid, that the Trust had no power to acquire lands for the purposes mentioned in the scheme, and that the resolutions and proceedings of the Trust being procedurally defective the scheme "was illegal".
The appellants also contended that the scheme was framed at the instance of and solely for the benefit of the Company, since the land was intended to be given after acquisition to that Company or to other industrialists for 30 development by them for their own benefit.
The Subordinate Judge, Delhi, held that the Act was properly extended to the Delhi territory.
that the scheme was valid and the Trust had power to acquire the land, but in the view of the Subordinate Judge there was "nothing on the record to show that the area in suit" was "necessary for or" was "affected by the execution of this scheme," and that "the Act does not authorise compulsory acquisition for purposes of recoupment or for allotment to some company".
The Subordinate Judge accordingly decreed the suit as claimed by the appellants.
In appeal to the Senior Subordinate Judge with appellate powers the decree passed by the Trial Court was affirmed.
In second appeal to the High Court of Punjab, Falshaw, J., reversed the decree passed by the First Appellate Court.
In the view of the learned Judge, since the original industrial area scheme framed in 1940, was a valid scheme, acquisition of an additional area of land for meeting the requirements of that scheme was a legitimate extension thereof and merely because the Trust had resolved to acquire land for sale to the Company after development, the scheme was not open to challenge.
He also held that the acquisition not being for the Company, Part VII of the Land Acquisition Act had no application and that the supplementary scheme was not invalid merely because the plan for development was to be worked out not by the Trust directly but by the Company under the general supervision and control of the Trust, and in accordance with the town planning scheme framed under section 192 of the Punjab Municipal Act.
The decree passed by Falshaw, J., was confirmed by a Division Bench of the High Court.
With certificate granted by the High Court, this appeal has been preferred.
The arguments in this case have ranged over a wide field, but in the main three questions of law fall to be decided: (1) Whether acquisition of land of the appellants under the supplementary scheme was for the purposes of the Act; (2) whether for executing the supplementary scheme the Trust had power to compulsorily acquire land; and (3) whether land of the appellants could be acquired only in the manner provided by the Part VII of the Land Acquisition Act, 1894.
The Act as the preamble discloses was enacted with a view to make provision for the improvement and expansion of towns Chapter 11 of the Act deals with the constitution of Improvement Trusts for carrying out the provisions of the Act.
Chapter III deals with the proceedings of the Trust and Committees thereof.
Chapter TV deals with different forms of improvement schemes.
Section 2 ' describes in cls.
(a) to (p) matters which may be provided for in an improvement scheme.
Clauses (a) & (g) thereof read as follows: "(a) The acquisition by purchase, exchange, or otherwise any property necessary for or affected by the execution of the scheme.
" 31 "(g) The sale, letting, or exchange of any property comprised in the scheme." By section 24 it is provided that an improvement scheme shall be one of the following types, or may combine any two or more of such types, or of any special features of, that is to say, (a) a general improvement scheme; (b) a re building scheme; (c) a re housing scheme , (d) a street scheme; (e) a deferred street scheme; (f) a development scheme , (g) a housing accommodation scheme , and (h) a town expansion scheme.
Sections 25 to 32 set out the conditions in which the different classes of schemes may be framed and provisions which may be made in those schemes.
Provisions relating to development schemes in section 30 and town expansion schemes in section 32 alone are material.
By section 30 cls.
(1) & (2) it is provided . "(1) In regard to any area to which this Act is extended, the Trust may, from time to time, prepare a scheme of proposed public streets with plans showing the direction of such streets, the streets alignment and building line on each side of them, their intended width and such other details as may appear desirable.
(2) When any such scheme has been notified under section 42 the street to which it refers shall be deemed to be a projected public street.
" Restrictions are then placed upon the right of occupants of the buildings to erect, re erect, add to or alter any building or wan, and provision is made for other related matters.
Section 32 reads: "(1) Whenever the Trust is of opinion that it is expedient and for the public advantage to control and provide for the future expansion of a municipality in any area to which this Act is extended, the Trust may frame, a scheme (to be called a "town expansion scheme").
(2) Such scheme shall show the method in which it is proposed to lay out the area to be developed and the purposes for which particular areas are to be utilized.
(3) For the purposes of a town expansion scheme the provisions of clause (a) of sub section (2) of section 40 shall not be applicable, but the Trust shall be required to supply such details as the State Government may consider necessary.
(4) When any such scheme has been notified under section 42, if any person desires to erect, re erect, add to or alter any building or wall within the area comprised in the said scheme, he shall apply to the Trust for permission to do so. 32 (5) If the Trust refuses to grant permission to any person to erect, re erect, add to or alter any building or wall on his land in the area aforesaid, and if it does not proceed to acquire such land within one year from the date of such refusal, it shall pay reasonable compensation to such person for any damage sustained by him in consequence of such refusal." Section 33 deals with the procedure to be followed in framing improvement schemes.
Section 36, inter alia, deals with the preparation, publication and transmission of notices about the improvement schemes.
Section 38 deals with notice of proposed acquisition of land.
Section 40 authorises the abandonment of and submission of the schemes for sanction to the State Government with such modifications as the Trust may consider necessary after considering the objections or representations which may be received.
Section 41 authorises the State Government to sanction with or without modification, or refuse to sanction, or return for reconsideration, ,any improvement scheme submitted to it under section 40.
Section 42 provides: "(1) Whenever the State Government sanctions an improvement scheme it shall announce the fact by notification, and except in the case of a deferred street scheme, development scheme, or town expansion scheme, the Trust shall forthwith proceed to execute the same.
(2) The publication of a notification under sub section (1) in respect of any scheme shall be conclusive evidence that the scheme has been duly framed and sanctioned.
" Section 43 provides for alteration in an improvement scheme before it had been carried into execution, subject to certain conditions specified therein.
Chapter V deals with the powers and duties of the Trust in respect of a scheme which has been sanctioned.
Section 55 authorises the Trust to enter into an agreement with any person for the purchase, lease or exchange by the Trust of any land which the Trust is authorised to acquire or any interest in such land Section 56 provides that the Trust may, with the previous sanction of the State Government, acquire land under the provisions of the Land Acquisition Act, 1894, as modified by the provisions of the Act for carrying out any of the purposes of the Act.
Section 58 provides that for the purpose of acquiring land under the Land Acquisition Act for the Trust, the Tribunal constituted under section 57 shall be deemed to be the Court, and the President of the Tribunal shall be deemed to be the Judge under the said Act subject to further modifications indicated in the Schedule, and that the award of the Tribunal shall be deemed to be the award of a Court under the Land Acquisition Act, 1894, and shall be final.
At this stage, the material provisions of the Schedule referred to in section 58 may be referred to.
The Schedule amends the Land Aoquisition Act in certain respects.
The expression "local authority" in section 3(ee) of the Land Acquisition Act includes a Trust constituted 33 under the United Provinces Town Improvement Act, 1919.
By cl.
2(1) the first publication of the notice of an improvement scheme under section 36 of the Act is substituted for and has the same effect as publication in the Official Gazette and in the locality, of a notification under sub section (1) of section 4 of the Act, except where a declaration under section 4 or section 6 of the Act had previously been made and was still in force.
By sub cl.
(2) of cl. 2, inter alia, publication of a notification under section 42 is substituted for and has the same effect as a declaration by the State Government under section 6 of the Act, unless a declaration under the last mentioned section had previously been made and was still in force.
By cl. 6, section 17 A is incorporated in the Land Acquisition Act, and it reads: "In every case referred to in section 16 or section 17, the Collector shall, upon payment of the cost of acquisition, make over charge of the land to the Trust; and the land shall thereupon vest in the Trust, subject to the liability of the Trust to pay any further costs which may be incurred on account of its acquisition.
" Section 65 of the Act deals with disposal of land.
It provides: Subject to any rules made by the State Government under section 72 of this Act, the Trust may retain, or may let on hire, lease, sell, exchange or otherwise dispose of, any land vested in or acquired by it under this Act.
" Broadly stated the scheme of the Act is that with a view to make improvements in towns the Trust may make certain order after framing an appropriate scheme of a type or containing special features of different types of schemes mentioned in section 24.
The scheme so framed may make provisions for matters which are prescribed by section 23 and such other matters as are provided for specially in the appropriate sections dealing with the different classes of schemes.
The relevant resolutions adopted by the Trust for framing the original and supplementary schemes may be briefly noticed.
On June 30, 1942 it was resolved by the Trust to acquire an additional area of 103.16 acres to be sold to the Company.
The resolution reads as follows: "A reference is invited to Board 's resolution No. 78 of the 29th March, 1940 relating to the Trust 's Industrial Area Scheme.
The scheme as approved by the Board and sanctioned by the Chief Commissioner covers an area of about 479.81 acres. . and provides for the acquisition and development of 271.21 acres of land. . at a cost not exceeding Rs. 6.84 lakhs, and the acquisition and development of the remaining 208.6 acres provided any one or more reputable industrialists deposit with or guarantee to the Trust the cost of acquiring and developing this additional area.
As decided by the Board in their Resolution Nos. 108 and 109 34 of the 16th May, 194.1 the scheme as regards block 'I ' in sub.
scheme 'A ' has been held in abeyance and land in block 11 has been acquired and is under development for factory sites.
The Board have now agreed to sell 268 acres of land in the Industrial Area to the Delhi Cloth and General Mills Co. Ltd., on the terms and conditions embodied in Resolution No. 19 of the 9th of January, 1942 as amended by Resolution No. 50 of the 27th March, 1942.
"The Trust can. . offer only 174.84 acres out of the land falling within the boundaries of the sanctioned scheme to the Company for the present. . .
It is therefore proposed to alter under section 43 of the Trust Law, the scheme as sanctioned so as to provide for the acquisition of this additional area of 103.16 acres to be sold to the Company.
As under the terms of the sale this additional area is to be developed by the Company, the Trust will have to incur initially expenditure only on acquisition of this land, Pursuant to this resolution notices were issued under section 36 of the Act in respect of the acquisition of the area.
Thereafter a resolution was passed on July 31, 1944 and it was stated in the introductory part of the resolution: "The present site of the industrial area was selected as being suitably located vis a vis the city and the newly developed Trust area.
There was no other site available where such facilities for roads and railway lines existed.
The sizes of the plots were fixed on the basis of the demand of different indus trialists.
" The scheme was then sanctioned under section 42 of the Act.
The resolution of the Trust dated March 29, 1940, clearly indicates that the original scheme was intended to secure growth of an industrial area and thereby to relieve congestion in the over crowded localities in the town of Delhi.
Such a scheme was primarily a town expansion scheme within the meaning of section 24(b) read with section 32.
In framing such a scheme the provisions of a development scheme were incidentally incorporated, and that the Trust, by express enactment in section 24 was competent to do.
It appears that neither before Falshaw, J., nor before the High Court the validity of the original scheme of 1940 was challenged.
Counsel for the appellants contended that no reliance was ever placed by the Trust before the Trial Court or the First Appellate Court upon the original scheme and the appellants had no opportunity for challenging the validity of that scheme, but we are unable to accept that contention.
The appellants by their plaint challenged the application of the U.P. Town Improvement Act, the constitu tion of the Trust and the various steps taken by the Trust resulting 35 in the acquisition of their land.
The original scheme was tendered in evidence before the Court of First Instance.
It is true that arguments in the Trial Court and the First Appellate Court were primarily directed to canvassing the validity of the supplementary scheme in enforcement of which the property of the appellants was acquired.
But it cannot be said that the original scheme was not before the Court or that its validity was not challenged.
In any event counsel for the appellants has not been able to suggest any ground on which that scheme is open to challenge.
The supple mentary scheme, as the resolution dated June 30, 1942 clearly indicates, was framed for the further progress of the original scheme.
The scheme was one for town expansion, and acquisition of land for town expansion, i.e. providing for industrial development and making provision for the residence of employees in the industries and of others, would clearly fall within the terms of section 24(h) read with section 32.
It is true that in the resolution dated June 30, 1942 it is recited that the scheme was to provide for the acquisition of "an additional area of 103.16 acres to be sold to the Company".
But from a perusal of the primary scheme it is clear that the Company had expressed its requirement for a large area of land under the development scheme and the resolution dated March 29, 1940 had approved of that requirement.
It was recited in the resolution that the Company was employing a large number of labourers and removal of the factory to the outskirts of Delhi would contribute in a substantial measure to relief of congestion and also because establishment of a big concern in the industrial area would afford great stimulus to the development of the area.
It was found after Part 'A ' of the original scheme was carried out that the area provided for the Company was inadequate for its requirements and the Company requested that a larger area may be provided, and accordingly the supplementary scheme was framed.
Resort to the provisions of the Act for acquiring land with a view to hand it over to an industrial concern for private gain may not fall within the terms of the Act.
But in the circumstances already set out a scheme framed which contemplates acquisition of land for effectuating the object of the original scheme is not open to challenge on the ground that it is a device to acquire land to be disposed of for private gain of an industrialist.
The original and the supplementary schemes must be regarded as one composite scheme conceived in the interests of industrial development and relief of congestion by inducing a flow of population from the congested areas.
The object of the supplementary scheme was to effectuate the purpose of the original scheme and failure to frame that scheme may seriously have affected the utility of the original scheme.
There is no warrant for the contention raised by the appellants that the land was not to be developed by the Trust, but was to be acquired and handed over to the Company.
It is clear from the scheme that the general supervision and control over the execution 36 of the supplementary scheme as over the original scheme was retained by the Trust and the Company was to develop the land subject to control under the Town Planning Scheme.
The argument that in a town expansion scheme under section 32 read with section 24(h) of the Act, there is no power to acquire land compulsorily is futile.
Section 23(a) in terms authorises acquisition by purchase, exchange, or otherwise of any property necessary for or affected by the execution of the scheme.
That provision may be incorporated in any of the improvement schemes of the types mentioned in section 24.
Again Section 32 clearly implies that in a town expansion scheme such a power would be reserved, for the Trust is statutorily declared liable to pay compensation when permission to alter any building or wall on the land in the area is denied, if the Trust does not proceed to acquire such land within one year from the date of such refusal.
By section 55 a general power to purchase orlease by agreement of any land which the Trust is authorised to acquire is granted and by section 56 power to acquire land under the Land Acquisition Act, 1894, is expressly conferred.
It is true that under the provisions relating to other classes of schemes, for instance, section 26(2)(f), section 28(2)(a), section 29(3) an express provision with regard to acquisition of land is made, and there is no such express provision in section 32.
But that by itself is not sufficient to justify an inference that the provisions of section 23(a) relating to acquisition of land necessary for or affected by the execution of the scheme may not be conferred in sanctioning a town expansion scheme.
If the view contended for be correct, section 23(a) will not have application to any scheme.
We are unable to see any reason why section 56 which authorises the Trust to acquire land is to be restricted only to those cases in which in the case of a specific scheme an express provision conferring power of acquisition apart from section 23(a) is conferred.
Nor is there any substance in the contention that the provi sions of Part VII of the Land Acquisition Act had to be resorted to by the Trust for acquiring land which was to be allotted to a Company after development.
If the land is to be notified for acquisition under the Land Acquisition Act for a Company, the requirements of Part VII of the Land Acquisition Act must undoubtedly be complied with, and failure to do so would render the acquisition invalid.
In this case, land was not to be acquired for the Company: it, was to be acquired for carrying out the industrial development and town expansion scheme of the Trust, and then it was to be allotted for carrying out the scheme to the Company for development.
Power to include provision for sale of land comprised in the scheme may competently be conferred under section 23(g) of the Act and may be exercised under section 65.
Mere inclusion of a power of sale of land acquired under a scheme does not therefore vitiate a scheme.
The argument that in passing the resolution for bringing into force the supplementary scheme one of the Directors of the Company had participated need not detain us.
This argument was 37 apparently not raised before the High Court, and having regard to the terms of sections 42 & 100 of the Act has no force.
It is true that if the land of the appellants had been acquired under the Land Acquisition Act, the appellants may have become entitled to the statutory solatium in addition to the market value.
But if the Act is valid, and could be resorted to for compulsorily acquiring land of the appellants, the awards made under the Act are not open to challenge on the ground that if another scheme of acquisition had been resorted to, the appellants may possibly have obtained more compensation.
The appeal must therefore fail.
Having regard however to the circumstances of the case, we think that in this case there should be no order as to costs throughout.
Appeal dismissed.
| The respondent was the director of a company and also a partner in the firm managing it.
On behalf of the company he made an application for an import licence under the Imports and Exports (Control) Act 1947, and in May 1955 the licence was granted.
At that time the grant of licence was governed by an Order issued in 1948 issued under section 32 of the Act, and under that Order the Controller of Imports and Exports could attach conditions to licences issued by him.
According to the terms of the licence granted to the aforesaid company the goods imported under the licence were to be employed for the company 's own use.
In December 1955 the Imports (Control) Order No. 17 of 1955 was passed.
Under cl.
5(3) of the Order certain conditions were deemed to be part of every licence and under cl.
5(4) every licencee was enjoined to observe the condition of the licence.
In 1956 the respondent secured a revalidation of the licence issued to the company.
Thereafter when the goods arrived they were sold by the respondent to another party.
A complaint was filed against the respondent and the company for an offence under section 5 of the Imports and Exports (Control) Act 1947 read with cl.
(5) of the Imports (Control) Order 1955.
The respondent faced the trial as an accused and participated in the proceedings without any objection.
He was convicted by the trial Magistrate but the High Court acquitted him on the ground that at the time when the transaction of sale was entered into i.e. in December 1956, breach of a condition of licence did not constitute an offence under section 5 of the Act of 1947.
The State appealed to this Court.
The questions that fell for determination were : (i) whether by disposing of the imported goods without permission any offence was committed; and (ii) if so whether the respondent was personally liable.
HELD: (i) Although section 5 of the Imports and Exports (Control) Act, 1947 did not, before its amendment in 1960, specially provide that breach of a condition of licence would be deemed to be a breach of the Imports (Control) Order, yet by virtue of cls.
5(3) and (4) read with cl. 12 of the Imports (Control) Order 1955 the transfer of a licence was a breach of the said order and constituted an offence.
No distinction could validly be made in the circumstances of this case between transfer of a licence and transfer of goods imported under it.
[945 E G; 946 B C] C.T.S. Pillai vs H. P. Lohia & Anr.
A.I.R. 1957 Cal. 83, referred to.
East India Commercial Co. Ltd. Calcutta vs Collector of Customs, Calcutta, ; , distinguished.
934 Stare vs Abdul Aziz ; , applied.
(ii) The fact that the licence was obtained by 'the respondent while the 1948 Order was in operation did not help the respondent as under cl. 12 of the 1955 Order any licence issued under any of the earlier Orders was deemed to have been issued under the corresponding provisions of the 1955 Order.
The goods under the licence were, moreover, imported and sold after 1955.
The licence itself was revalidated in 1956 and that could only have been done by power derived under cl. 7 of the 1955 Order.
[945 B, D] (iii) The respondent was responsible for the issuance of the licence and for the transfer of the goods imported under it.
He was therefore responsible principally along with the company.
The complaint no doubt was not clear as to whom was really meant to be prosecuted but it described the respondent as an accused to which he did not object at his trial.
The error, omission or irregularity, if any, in the complaint was curable under section 537 of the Code of Criminal Procedure and in the present case could not be said to have led to a failure of justice.
[946 E H]
|
Civil Appeal No. 2031 of 1977.
Appeal by special Leave from the judgment and order dated the 30th June, 1977 of the Andhra Pradesh High Court in Writ Petition No. 905 of 1975.
WITH Civil Appeal Nos. 136 & 137 of 1978.
From the judgment and order dated the 30th June, 1977 of the Andhra Pradesh High Court in Writ Petition Nos.
796 & 922 of 1975 respectively.
Ramachandra Reddy, Advocate General and B. Parthasarthi for the Appellants P. Rama Reddy and A.V.V. Nair for Respondent No. 2 in CA.
2031, R. 3 in 136 & R. 2 in 137.
A. Subba Rao for RR I & 2 in CA.
136/78.
A.K. Sen, e. Rajendra Choudhury, G.R. Subbaryan, I. Koti Reddy and Mahabir Singh for Respondent No. 1 in CA.
137/78.
B. Ranta Rao for Respondent No. 1 in CA.
2031/77.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
these three appeals arise out of a common judgment dated June 30.
1977 of a Division Bench of the High Court of Andhra Pradesh, setting aside the judgment of a learned single Judge dated November 18, 1975 in Writ Petitions Nos.
1539 of 1974 and 798 of 1975.
Civil Appeal No. 2031 (NCM) of 1977 is by special leave while the other two appeals are by certi 503 ficate granted by the High Court The question which these appeals involve is whether the appellant, the Government of Andhra Pradesh, has the power to evict the respondents summarily in exercise of the power conferred by the Andhra Pradesh Land Encroachment Act, 1905.
This question arises on the following facts: We are concerned in these appeals with three groups of lands situated in Habsiguda, Hyderabad East Taluk, Andhra Pradesh.
Those lands are: R.S.
No 10/1, which corresponds to plot No. 94 admeasuring 10 acres and 2 guntas, R.S. No. 10/2 which corresponds to plot No. 104 admeasuring 9 acres and 33 guntas; and R.S. Nos. 7, 8 and 9 which correspond to plot No. 111 admeasuring 26 acres and 14 guntas.
These lands belonged originally to Nawab Zainuddin and after his death, they devolved on Nawab Habibuddin.
Sometime between the years 1932 and 1937, certain lands were acquired by the Government of the Nizam of Hyderabad under the Hyderabad Land Acquisition Act of 1309 Fasli, the provisions of which are in material respects similar to those of the Land Acquisition Act, 1894.
The lands were acquired for the benefit of the osmania University which was then administered as a Department of the Government of Hyderabad.
The University acquired an independent legal status of its own under the osmania University Revised Charter, 1947, which was promulgated by the Nizam.
E The question whether the aforesaid three plots of land were included in the acquisition notified by the Government of Nizam became a bone of contention between the parties, the osmania University contending that they were so included and that they were acquired for its benefit and the owner, Nawab Habibuddin, contending that the three plots were not acquired.
On February 13, 1956 the osmania University filed a suit (O.S. No. 1 of 1956) against Nawab Habibuddin, in the City Civil Court, Hyderabad, claiming that the three lands were acquired by the Government for its benefit and asking for his eviction from those lands.
That suit was dismissed in 1959 on the ground that plot No. 111 was not acquired by the Government and that though plots Nos. 94 and 104 were acquired, the University failed to prove its possession thereof within twelve years before the filing of the suit.
In regard to plots Nos. 94 & 104, it was found by the trial court that Habibuddio had encroached thereupon in the year 1942, which was more than twelve years before the filing of the suit.
Civil Appeal No. 61 of 1959 filed by 504 the University against that judgment was dismissed on January 24, 1964 by the High Court which affirmed the findings of the trial court.
The State Government was not impleaded as a party to those proceedings.
On May 8, 1964 the osmania University wrote a letter to the Government of Andhra Pradesh, requesting it to take steps for the summary eviction of persons who were allegedly in unauthorised occupation of the 3 plots.
On December 8, 1964, the Tahsildar, Government of Andhra Pradesh, acting under section 7 of the Land Encroachment Act, 1905, issued a notice to Nawab Habibuddin to vacate the lands and on December 15, 1964 the Tahsildar passed an order evicting him iron the lands.
The appeal filed by Habibuddin to the Collector was dismissed in 1965 and the appeal against the decision of the Collector was dismissed by the Revenue Board in 1968 During the pendency of the appeal before the Revenue Board, the respondents purchased the plots from Habibuddin for valuable consideration and on the death of Habibuddin, they were impleaded to the proceedings before the Revenue Board.
They preferred an appeal from the decision of the Revenue Board to the Government but that appeal was dismissed on November 26, 1973.
On March 19, 1974, the respondents filed Writ Petitions in the High Court of Andhra Pradesh challenging the order by which they were evicted from the plots summarily under the provisions of the Act of 1905.
The learned single Judge dismissed those Writ Petitions observing: "The question whether the lands with which we are concerned in the writ petition were acquired by the Government or not and the question whether the Government had transferred its title to the University or not are questions which cannot properly be decided by me in an application under article 226 of the Constitution.
The appropriate remedy of the petitioners is to file a suit to establish their title.
" The learned Judge held that: "Though the title of the Government is not admitted by the alleged encroacher, there is a finding by the Civil 505 Court that there was encroachment by the alleged encroacher.
That is sufficient to entitle the Government to initiate action under the provisions of the Land Encroachment Act.
" Three appeals were preferred to The Division Bench against the judgment of the learned single Judge, two of them being by the petitioners in one writ petition and the third by the petitioner in the other writ petition.
The Division Bench, while setting aside the judgment of the learned single Judge, held: "The question whether the lands.
belong to osmania University or not will have to be decided as and when the Government comes forward with a suit for the purpose.
Even if we assume for the purpose of our judgment, as we are not pronouncing any conclusion as to whether the land vested in the Government or University, that the Government is the owner, the dispute going back from 1942 cannot be dealt with in summary proceeding under section 7 of the Land Encroachment Act.
" The summary remedy provided by section 7, according to the Division Bench, cannot be resorted to "unless there is an attempted encroachment or encroachment of a very recent origin" and further, that it cannot be availed of in cases where complicated questions of title arise for decision.
We are in respectful agreement with the view taken by the Division Bench, subject however to the observations made herein below.
The Andhra Pradesh Land Encroachment Act, 1905, was passed in order "to provide measures for checking unauthorised occupation of lands which are the property of Government.
" The preamble to the Act says that it had been the practice to check unauthorised occupation of lands which are the property of the Government "by the imposition of penal or prohibitory assessment or charge" and since doubts had arisen whether such practice was authorised by law, it had become necessary to make statutory provisions for checking unauthorised occupations.
Section 2 (1) of the Act provides that all public roads, streets, lands, paths, bridges, etc.
shall be deemed to be the property belonging to Government, unless it falls under clauses (a) to (e) of that section.
Section 2 (2) provides that all public roads and streets 506 vested in any public authority shall be deemed to be the property of the Government by section 3 (1), any person who is in unauthorised occupation of any land which is the property of Government, is liable to pay assessment as provided in clauses (i) and (ii) of that section.
Section S provides that any person liable to pay assessment under section 3 shall also be liable, at the discretion of the Collector, to pay an additional sum by way of penalty.
Sections 6 (1) and 7, which are relevant for our purpose, read thus: "Sec. 6 (1) Any person unauthorisedly occupying any land for which he is liable to pay assessment under section 3 may be summarily evicted by the Collector, Tahsildar or Deputy Tahsildar and any crop or other product raised on the land shall be liable to forfeiture and any building or other construction erected or anything deposited thereon shall also, if not removed by him after such written notice as the Collection Tahsildar.
or Deputy Tahsildar may deem reasonable, be liable to forfeiture.
Forfeitures under this section shall be adjudged by the Collector, Tahsildar or Deputy Tahsildar and any property so forfeited shall be disposed of as the Collector, Tahsildar or Deputy Tahsildar may direct." "Sec. 7.
Before taking proceedings under section 5 or section 6, the Collector or Tahsildar or Deputy Tahsildar as the case may be shall cause to be served on the person reputed to be in unauthorised occupation of land being the property of Government, a notice specifying the land so occupied and calling on him to show cause before a certain date why he should not be proceeded against under section S or section 6.
" It seems to us clear from these provisions that the summary remedy for eviction which is provided for by section 6 of the Act can be resorted to by the Government only against persons who are in 507 unauthorized occupation of any land which is "the property of Government".
In regard to properly described in sub sections (I) and (2) of section 2, there can be no doubt, difficulty or dispute as to the title of the Government and, therefore, in respect of such property, the Government would be free to take recourse to the summary remedy of eviction provided for in section 6.
A person who occupies a part of a public road, street, bridge, the bed of the sea and the like, is in unauthorised occupation of property which is declared by section 2 to be the property of the Government and, therefore, it is in public interest to evict him expeditiously which can only be done by resorting to the summary remedy provided by the Act.
But section 6 (1) which confers the power of summary eviction on the Government limits that power to cases in which a person is in unauthorised occupation of a land "for which he is liable to pay assessment under section 3 ' '.
Section 3, in turn, refers to unauthorised occupation of any land "which is the property of Government" If there is a bond dispute regarding the title of the Government to any property the Government cannot take a unilateral decision in its own favour that the property belongs to it, and on the basis of such decision take recourse to the summary remedy provided by section 6 for evicting the person who is in possession of the property under a bona fide claim or title.
In the instant case, there is unquestionably a genuine dispute between The State Government and the respondents as to whether The three plots of land were the subject matter of acquisition proceedings taken by the then Government of Hyderabad and whether the osmania University.
for whose benefit the plots are alleged to have been acquired, had lost title to the property by operation of the law of limitation.
The suit filed by the University was dismissed on the ground of limitation, inter alia, since Nawab Habibuddin was found to have encroached on the properly more than twelve years before the date of the suit and the University was not in possession of the property at any time within that period.
Having tailed in the suit, the University activated the Government to evict the Nawab and his transferees summarily, which seems to us impermissible.
The respondents have a bona fide claim to litigate and they cannot be evicted save by the due process of law.
The summary remedy prescribed by section 6 is not the kind of legal process which is suited to an adjudication of complicated questions of title.
That procedure is, therefore, not the due process of law for evicting the respondents.
508 The view of the Division Bench that the summary remedy provided for by section 6 cannot be resorted to unless the alleged encroachment is of "a very recent origin", cannot be stretched too far That was also the view taken by the learned single Judge him self in another case which is reported in Meherunnissa Begum vs State of A.P. which was affirmed by a Division Bench.(2) It is not the duration, short or long, of encroachment that is conclusive of the question whether the summary remedy prescribed by the Act can be put into operation for evicting a person.
What is relevant for the decision of that question is more the nature of the property on which the encroachment is alleged to have been committed and the consideration whether the claim of the occupant is bona fide.
Facts " which raise a bond fide dispute of title between the Government and the occupant must be adjudicated upon by the Ordinary courts of law.
The Government cannot decide such questions unilaterally in its own favour and evict any person summarily on the basis of such decision.
But duration of occupation is relevant in the sense that a person who is hl occupation of a property openly for an appreciable length of time can be taken, prima facie, to have a bonafide claim to the property requiring an impartial adjudication according to the established procedure of law.
The conspectus of facts in the instant case justifies the view that the question as to the title to the three plots cannot appropriately be decided in a summary inquiry contemplated by sections 6 and 7 of the Act.
The long possession of the respondents and their predecessors in title of these plots raises a genuine dispute between them and the Government on the question of title, remembering especially that the property, admittedly, belonged originally to the family of Nawab Habibuddio from whom the respondents claim to have purchased it.
The question as to whether the title to the property came to be vested in the Government as a result of acquisition and the further question whether the Nawab encroached upon that property thereafter and perfected his title by adverse possession must be decided in a properly constituted suit.
May be, that the Government may succeed in establishing its title to the property but, until that is done, the respondents cannot be evicted summarily.
For these reasons, we uphold the judgment of the Division Bench of the High Court and dismiss these appeals with costs.
509 We do not propose to pass any orders on Civil Misc.
Petitions A Nos.
18974, 18975, 18976, 18497, 18498 and 18499 of 1981 which have been filed for adding certain parties as respondents to these appeals.
Those petitions involve the question of a Will alleged to have been made by Nawab Habibuddin in favour of Entashamuddin alias Anwar Siddiqui and his elder brother.
We cannot go into the validity of that Will and other incidental questions in these ap peals.
H.L.C. Appeals dismissed.
| The petitioner who was held at the Central Jail in connection with some of the offences committed by him, was served with an order of detention passed by the Commissioner of Police, under sub section (2) of section 3 of the , stating that his detention was necessary with a view to preventing him from "acting in any manner prejudicial to the maintenance of public order." Two days later he was served with the grounds of detention and copies of documents and statements relied upon in the grounds of detention.
The Commissioner made a report to the Administrator about the passing of the detention order together with the grounds of detention.
The Administrator approved the detention order and sent the report to the Central Government, and also informed the petitioner that the order of detention had been approved by him and that he had a right to make a representation.
The case of the petitioner was placed before the Advisory Board who was of the opinion that there was sufficient cause for his detention.
The Administrator confirmed the detention order under sub section (1) of section 12 and further directed under section 13 of the Act that the petitioner be detained for a period of 12 months from the date of his detention.
In his petition under Article 32 of the Constitution the petitioner contended that: (1) the unexplained delay of two days in furnishing the grounds of detention was a denial of the constitutional imperatives of article 22(5) read with section 8 of the Act which cast a duty on the detaining authority to afford the detenu "the earliest opportunity of making a representation against the order of detention", (2) there was a failure on the part of the Commissioner as well as the 708 Administrator to apply their minds and specify the period of detention while making the order of detention under sub section (2) of section 3 of the Act, and (3) the grounds of detention served were not connected with "maintenance of public order", but relate to "maintenance of law and order".
Dismissing the petition, ^ HELD: 1.
(i) Sub section (1) of section 8 of the Act which is in conformity with Article 22(5) provides that where a person is detained in pursuance of a detention order made under sub section (1) or sub section (2) of section 3 of the Act, the authority making the order shall, "as soon as may be", but ordinarily not later than five days and in exceptional circumstances and for reasons to be recorded in writing not later than ten days from the date of detention, communicate to him the grounds on which the order has been made.
Parliament has thus by law defined the words "as soon as may be" occurring in article 22(5) as meaning normally a period of five days.
[711 F] (ii) The law is that the detaining authority must, as soon as may be, i.e. as soon as practicable, communicate to the detenu the grounds on which the order of detention has been made.
That period has been specified by section 8 of the Act to mean a period ranging from five to ten days depending upon the facts and circumstances of each case.
[712 D] In the instant case, the petitioner was served with the grounds of detention within a period of two days i.e. within the period allowed by section 8 of the Act and that was "as soon as practicable.
" The order of detention is therefore not rendered invalid merely because the grounds of detention were furnished two days later.
[712 E F] (iii) In A.K. Roy vs Union of India, [1982] 1 S.C.C. 271 this Court has not laid down that the detaining authority making an order of detention under sub section (1) or sub section (2) of section 3 of the Act or the authority approving of the same, must specify the period of detention in the order.
[714 B] 2.
Under the scheme of the Act, the period of detention must necessarily vary according to the exigencies of each case i.e. the nature of the prejudicial activity complained of.
It is not that the period of detention must in all circumstances extend to the maximum period of 12 months as laid down in section 13 of the Act.
[714 E] 3.(i) The true distinction between the areas of 'public order ' and 'law and order ' lies not in the nature or quality of the act, but in the degree and extent of its reach upon society.
The distinction between the two concepts of 'law and order ' and 'public order ' is a fine one but this does not mean that there can be no overlapping.
Acts similar in nature but committed in different contexts and circumstances might cause different reactions.
In one case it might affect specific individuals only and therefore touch the problem of 'law and order ' while in another it might affect 'public order '.
The act by itself therefore is not determinant of its own gravity.
It is the potentiality of the act to disturb the even 709 tempo of the life of the community which make it prejudicial to the 'maintenance of public order. ' [715 C E] (ii) Preventive detention is devised to afford protection to society.
The object is not to punish a man for having done something but to intercept before he does it and to prevent him from doing.
Justification for such detention is suspicion or reasonable probability and not criminal conviction which can only be warranted by legal evidence.
It follows that any preventive measures, even if they involve some restraint or hardship upon individuals, do not partake in any way of the nature of punishment, but are taken by way of precaution to prevent mischief to the State.
[715 F G] (iii) The Executive can take recourse to its power of preventive detention in those cases where the Court is genuinely satisfied that no prosecution could possibly succeed against the detenu because he is a dangerous person who has overawed witnesses or against whom no one is prepared to depose.
[716 B] (iv) What essentially is a problem relating to 'law and order ' may due to sudden sporadic and intermittent acts of physical violence on innocent victims in a metropolitan city result in serious 'public disorder '.
It is the length, magnitude and intensity of the terror wave, unleashed by a particular act of violence creating disorder that distinguished it as an act affecting 'public order ' from that concerning 'law and order '.
Some offences primarily injure specific individuals and only secondarily the public interest, while others directly injure the public interest, and affect individuals only remotely.
[717 D E] In the instant case the particular acts enumerated in the grounds of detention clearly shows that the activities of the detenu cover a wide field and fall within the contours of the concept of 'public order '.
[717 G]
|
Civil Appeal No. 1442 of 1986 From the Judgment and Order dated 5.10.1984 of the Bombay High Court in Writ Petition No. 4063 of 1984.
S.B. Bhasme and M.A. Firoz for the Appellant.
V.A. Bobde.
A.K. Sanghi and Shyam Murlidhar for the Respondents.
The Judgment of the Court was delivered by RAY J.
This application for special leave involves a very short but very important and substantial question of law namely whether a court while hearing writ petitions is under an obligation to pass a speaking order an order recording in brief at least the reasons which weighed with the court in determining the salient questions raised by the parties to the action while dismissing or rejecting the writ petition in order to enable the parties to know the reasons for such order, more particularly when there is provision for appeal including appeal on special leave to this Court under Article 136 of the Constitution of India to apprise the appellate court of the reasons of the order in order to conform the basic principles of justice and fair play and as well as the rule of law which pervades our constitutional system and also in consonance with the principles of natural justice.
On this vital ground we 461 deem it just and proper to grant special leave and accordingly special leave granted.
The facts of the case in brief are inter alia that the petitioner a B.Sc.
with 2nd Class honours, was appointed as an assistant Teacher in 195 I in the New English Institute Girls High School conducted and managed by a registered society named New Education Institute, the respondent No. 1.
The petitioner was transferred in New High School in June 1953.
The petitioner passed the Secondary Teacher 's Certificate Examination and he also passed the Diploma of Education Examination conducted by Basic Training Centre, Dhule.
This diploma is considered as equivalent to Bachelor of Education Degree for the purpose of considering suitability for additional benefits.
The petitioner was promoted as supervisor in the same school in 1961 and thereafter From June 1968 he was working as Principal till his reversion by a resolution of the managing committee of the Institute dated October 28.
The petitioner challenged the said resolution of reversion in a suit being regular Civil Suit No. 755 of 1973.
The said suit was dismissed.
The petitioner challenged the said degree of dismissal in Civil Appeal No. 107 of 1979.
The appellate court allowed the appeal on reversing the degree of the trial court holding inter alia that the order of reversion was illegal and bad and the petitioner was entitled to have all the benefits and emoluments as principal of the said institution.
The opposite party No. 1 preferred a Second Appeal No. 162 of 1981 in the High Court of Judicature at Bombay which is pending for hearing.
During the pendency of the said appeal the opposite party No. 1 commenced a departmental enquiry against the petitioner under the provisions of Clause 77.3 of Secondary School Code.
A notice to show cause was issued to the petitioner wherefrom it would appear that the said proceeding mainly related to mistakes in accounting in matters pertaining to the society and not relating to the school.
The Enquiry Committee on 7.4.1975 recommended the termination of the petitioner 's services.
Against that recommendation the petitioner filed an appeal to the Deputy Director of Education, Nasik, the respondent No. 4.
The respondent No. 4 by his order dated 27.12.1975 was of the opinion that the order terminating service of the petitioner was disproportionate to the findings recorded by the Enquiry Committee and directed that the petitioner 's service should not be terminated till the Civil Court would decide the suit.
This order of respondent No. 4 was challenged by the management in an appeal filed to the Director of 462 Education.
Though it was submitted that the said appeal was not maintainable under the said Secondary School Code, the Joint Director of Education however after hearing allowed the said appeal by his order dated 6.9.1979 holding that all the charges levelled against the petitioner were of account matters.
He further held that the management was equally responsible in as much as it left financial matters pertaining to the management of the society to the Headmaster and his clerks.
Since it was not the duty of the Headmaster he could not be held responsible in management of accounts in the capacity of Headmaster.
Some of the charges pertaining to the duties as Head Master had been fully proved and some partly against the petitioner.
To be guilty under a single charge pertaining to financial matters is very serious.
The Joint Director, therefore, held that the recommendations made by the Enquiry Committee regarding the termination of the service of the petitioner had to be upheld.
The petitioner, thereafter, challenged the impugned order in writ petition No. 1837 of 1980 before the High Court of Judicature at Bombay.
On 12.8.1980 the writ petition was rejected by merely re cording the order, 'rejected '.
No reasons whatsoever were recorded which impelled the court to reject the petition.
The petitioner, thereafter, brought an action being Civil Suit No. 199 of 1981 in the Court of Civil Judge, Senior Division, Nasik, which is pending for hearing.
During the pendency of these proceedings the management again commenced an enquiry under the provisions of Clause 77.3 of the Secondary Schools Code.
This enquiry was completed without any compliance of the principles of natural justice in as much as the petitioner was not served with the chargesheet by the Enquiry Committee nor his nominee one Mr. R.G. Kunte, a teacher, was allowed to participate in the proceedings of the Enquiry Committee.
It was also alleged that out of 75 documents which the petitioner demanded inspection of only 25 documents were given inspection and the Enquiry Committee merely supplied him its findings without giving copy of summary of the proceedings of the Enquiry Committee.
The findings recorded by the Enquiry Committee was received by the petitioner on 26.4.1979 recommending termination of his service from the post of Assistant Teacher.
The management also, sent its order terminating the petitioner 's service and this was received by him on 26.4.1979.
It was submitted that the entire procedure adopted by the Enquiry Com 463 mittee was in violation of Clause 77.3 of Secondary Schools Code and in fact the enquiry was exparte.
Petitioner prayed for setting aside the order of the Enquiry Committee and for allowing the appeal.
The Deputy Director of Education, Nasik without giving any hearing to the petitioner sent a letter dated 12.2.1980 informing the petitioner that under instruction from the Director of Education the decision of termination of service on the basis of the first enquiry held by the management of the Institute against him being upheld by the Director of Education it was not necessary to entertain his appeal against the decision of the enquiry subsequently held.
The appeal was, therefore, filed.
The respondent No. 4, the Deputy Director of Education, thus did not at all consider and decide the appeal after hearing the parties including the petitioner.
The petitioner then made a representation to the Government by letter dated 8.4.1981 to decide the appeal in accordance with law.
The government by letter dated 24.4.1981 informed the petitioner that his appeal and his letter with the enclosures had been forwarded to the School Tribunal for hearing of the appeal and deciding it.
This School Tribunal dismissed the said appeal without giving any decisions on merits.
Against the order of the School Tribunal the petitioner filed a writ petition No. 4063 of 1984 before the High Court, Bombay.
This writ petition was rejected by recording the following order: "Heard.
In view of the earlier rejection of W.P. as well as the application to file appeal to Supreme Court, this W.P.is also rejected.
Aggrieved by the said judgment the petitioner filed the instant petition for special leave to appeal in this Court.
lt was pleaded in the special leave petition that the third enquiry proceeding was commenced by the management under the provisions of Clause 77.3 of the Secondary School Code.
During the pendency of the aforesaid proceedings it was further pleaded that the enquiry committee while proceeding with the enquiry arbitrarily violated the principles of natural justice as well as the provisions of Clause 77.3 of the said code.
The Headmaster who was biased against the petitioner was appointed as one of the members of the Enquiry Com 464 mittee and he did not permit the petitioner 's nominee to be.
present in the enquiry which was held exparte.
The petitioner was asked by the opposite party No. 1, the New Education Institute, by its letter dated 15.1.1979 to nominate his representative.
The petitioner by his letter dated 29.1.1979 enquired of the management whether his nominee should be a Headmaster or an Assistant Teacher or a member of the Governing Council as the charges related to his actions as Headmaster as well as Assistant Teacher.
No reply was received by the petitioner to this letter; on the other hand an intimation was received by him on February 28, 1979 about the formation of the Enquiry Committee.
Immediately, he nominated Mr. R.G. Kunte as his nominee in the Enquiry Committee.
The Enquiry Committee did not permit Mr.
R.G. Kunte to be associated with the enquiry and it did neither send any chargesheet to the petitioner nor did it supply him the proceedings of the Enquiry Committee.
It merely communicated to the petitioner its findings recorded on 25.4.1479 and the same was received by the petitioner on 26.4.1979 whereby the service of the petitioner as Assistant Teacher was terminated.
The appeal filed by the petitioner against the said order to the respondent No. 4 Deputy Director of Education, Nasik was also not heard and decided after giving hearing to the petitioner.
But respondent No. 4 merely communicated by his letter dated 12.2.1980 to the petitioner that as the decision of termination by the management on the basis of the first enquiry had been upheld, so the appeal was filed.
It was urged on behalf of the petitioner that the representation made by him to the Government was sent to the School 's Tribunal with a direction to hear the appeal of the petitioner.
The School 's Tribunal dismissed the appeal without at all considering and determining the relevant questions involved in the appeal by simply holding that since writ petition against the earlier order of termination of service of the petitioner was rejected by the High Court, the petitioner had no right to prefer any appeal to this Tribunal for agitating the same question though the appeal was filed against the subsequent order of termination made by the managing committee of the Institution.
It was also urged on behalf of the petitioner that the Enquiry Committee was biased against the petitioner and one of the nominee; in the Enquiry Committee was the Headmaster of the Institute who was the original complainant against the petitioner and therefore he was nominated by management to act as a Judge of his own cause.
It was also submitted that the High Court of Bombay did not at all consider and decide both 465 the writ petitions i.e. the writ petition No. 1837 of 1980 and writ A petition No. 4063 of 1984 on merits which were dismissed by recording the laconic order 'rejected '.
No speaking order was made assigning any reason whatsoever for rejecting the aforesaid two writ petitions which involved substantial questions of law and facts.
It is a cardinal principle of rule of law which governs our policy that the Court including Writ Court is required to record reasons while disposing of a writ petition in order to enable the litigents more particularly the aggrieved party to know the reasons which weighed with the mind of the Court in determining the questions of facts and law raised in the writ petition or in the action brought.
This is imperative for the fair and equitable administration of justice.
More so when there is a statutory provision for appeal to the higher court in the hierarchy of courts in order to enable the superior court or the Appellate Court to know or to be apprised of the reasons which impelled the court to pass the order in question.
This recording of reasons in deciding cases or applications affecting rights of parties is also a mandatory requirement to be fulfilled in consonance with the principles of natural justice.
It is no answer at all to this legal position that for the purpose of expeditious disposal of cases a laconic order like 'dismissed ' or 'rejected ' will be made without passing a reasoned order or a speaking order.
It is not, however, necessary that the order disposing of a writ petition or of a cause must be a lengthy one recording in detail all the reasons that played in the mind of the court in coming to the decision.
What is imperative is that the order must in a nutshell record the relevant reasons which were taken into consideration by the Court in coming to its final conclusions and in disposing of the petition or the cause by making the order, thereby enabling both the party seeking justice as well as the superior court where an appeal lies to know the mind of the court as well as the reasons for its finding on questions of law and facts in deciding the said petition or cause.
In other words fair play and justice demands that justice must not only be done but must seem to have been done.
It is pertinent to refer in this connection some of the decisions rendered by this Court.
In Mahabir Prasad vs State of M.P., ; at 13()4 it has been observed as follows: "opportunity to a party interested in the dispute to present his case on questions of law as well of fact, ascertainment of facts from materials before the Tribunal after disclosing 466 the materials to the party against whom it is intended to use them, and adjudication by reasoned judgment upon a finding of the facts in controversy and application of the law to the facts found, are attributes of even a quasi judicial determination.
It must appear not merely that the authority entrusted with quasi judicial authority has reached a conclusion or the problem before him, it must appear that he has reached a conclusion which is according to law and just, and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution.
Satisfactory decision of a disputed claim may be reached only if it be supported by most cogent reasons the appeal to the authority.
Recording of reasons in support of a decision on a disputed claim by a quasi judicial authority ensures that the decision is reached according to law as is not the result of caprice, whim or fancy or reached on the grounds of policy or expediency.
A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim if the order is subjected to appeal, the necessity to record reasons in greater for with out recorded reasons, the appellate authority has no mate rial on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just.
" This decision was rendered in connection with the cancellation of the license of a wholesale distributor in sugar under U.P. Sugar Dealer 's Licensing order, 1962, by the District Magistrate and the rejection of the appeal by the State Government without recording any reasons.
The above decision referred to in the case of Madhya Pradesh Industries Ltd. vs Union of India Ors., ; where it has been observed that the practice of the executive authority dismissing statutory appeals against order which seriously prejudice the rights of the aggrieved party without giving reasons is a negation of rule of law.
Similar observations have been made in the case of Mahabir Jute Mills vs Shibbon Lal, A.l.
R. at 2060.
The same view was also reiterated in Siemen Engineering & Manufacturing Co. vs Union of India, ; and Bachhan Singh vs State of Punjab, AIR 1980 SC 1355 at 1358 paras 18 & 19 and it was observed that where an authority made an order in exercise of a quasi judicial func 467 tion it must record its reasons in support of the order it made.
Similar A view was expressed by this Court in the case of Rangnath vs Daulat Rao and others; , at 690 para 7.
Every quasi judicial order must be supported by reasons.
This well settled principle will undoubtedly apply to orders made by a Court in disposing of writ applications.
In the premises aforesaid the appeal is allowed and the judgment and order passed on 8.10.1984 in writ petition No. 4063 of 1984 is hereby set aside.
The Court below is directed to dispose of the said writ petition in accordance with law after giving hearing to the parties and by passing a speaking order as expeditiously as possible preferably within a period of four months from the date of receipt of the records by the court below.
Let the records be sent to the court below forthwith.
There will, however, be no order as to costs.
A.P.J. Appeal allowed.
| The appellant, a temporary lady constable, was discharged from service by an order under Rule 12.21 Volume 7 of the Punjab Police Rules 1934 on the allegation that she was unlikely to prove an efficient police officer.
A representation made by her to the Deputy Inspector General of Police against that order was rejected.
A revision filed by the appellant against the latter order was dismissed.
A suit filed by her challenging the order of discharge as bad, arbitrary and against the principles of law was dismissed.
This order was confirmed by the District Judge and the High Court in appeal.
In the appeal to this Court by special leave it was contended for the appellant that the impugned order of discharge from service was made not in accordance with the said Rule, in accordance with the terms and conditions of the service, but was made by way of punishment on the ground of her misconduct, as found on the basis of the investigation of certain allegations behind her back, without giving her any opportunity of hearing in the enquiry or to cross examine the witnesses.
Allowing the appeal, the Court, ^ HELD: The impugned order of discharge, though couched in innocuous terms and stated to be made in accordance with the provisions of Rule 12.21, Vol.7 of the Punjab Police Rules, 1934, was really a camouflage for an order of dismissal from service on the ground of misconduct as found on an enquiry into the allegations behind her back.
It was penal in nature as it cast a stigma on the service career of the 501 appellant.
This order was made without serving the appellant any chargesheet without asking for any explanation from her without giving any opportunity to show cause against the purported order of dismissal from service and without giving any opportunity to cross examine the witnesses.
It, therefore, contravenes article 311(2) of the Constitution and is liabie to be quashed and set aside.
[503F G; 504B; 506B C] P.L. Dhingra vs Union of India, [1958] SCR p. 828 at 862, K.H. Phadnis vs State of Maharashtra, [1971] SCR (Supp.)) p. 118, State of Bihar & Ors.
vs Shiva Bhikshuk Mishra, at 196, Shamsher Singh & Anr.
vs State of Punjab, [1975] 1 SCR p. 814 at 837 and Anoop Jaiswal vs Government of India & Anr., [1984] 2 SCR p. 453, referred to.
|
: Criminal Appeal No.49 of 1983.
694 From the Judgment and Order dated May 14, 1981 of the Orissa High Court in Crl.
R. No. 21 of 1981.
V.J. Francis for the Appellant.
Anil B. Divan, D.P. Singh, G.S. Chatterjee, R.K. Mehta, Salaman Khurshid, L.R. Singh and Vinoo Bhagat for the Re spondents.
I am of the view that the decision in The State of Bihar vs Ram Naresh Pandey, interpreting section 494 of the Code of Criminal Procedure, 1898 and the decision in R.K. Jain etc.
vs State through Special Police Establishment and Others, ; interpreting section 321 of the Code of Criminal Procedure, 1973 do not call for any reconsideration.
I am in full agreement with the views expressed in these decisions.
I am satisfied that the Public Prosecutor had applied his mind to the case before applying for withdrawal and the Chief Judicial Magis trate has not committed any error in giving his consent to such withdrawal.
Such consent can be given at any time before the judgment is pronounced.
The framing of the charge cannot be an impediment to give consent to such withdrawal as it is evident from section 321(b) of the Code of Criminal Procedure, 1973.
The appeal is, therefore, dismissed.
KHALID, J: I have just received (at 3.45 p.m. on 19th December, 1986) a draft Judgment by Oza.
J. in the above case.
I agree with the conclusion that the appeal has to be dismissed, but not, with respect, with the reasoning con tained in the Judgment.
Since the case is listed for Judg ment on 20th December, 1986, I do not have time to write a detailed Judgment.
The question to be decided in this appeal is the scope of Section 321 of Criminal Procedure Code.
Oza, J. has set aside the permission granted by the Court to withdraw the prosecution under Section 32 1, Criminal Procedure Code, but allowed the appeal quashing the charge framed against re spondent No. 1 under Section 239 of the Code of Criminal Procedure.
I regret to state that I cannot re concile myself with this approach.
A cursory.
glance at Section 32 1 will satisfy anyone that consent can be given for withdrawal from the prosecution of a case, 695 not only when the charge is not flamed, but even after the charge is framed and at any time before the Judgment.
This appeal along with Criminal Appeal No. 48 of 1983 were directed to be posted before a Constitution Bench to consider the scope of Section 32 1, Criminal Procedure Code.
That being so, I do not think it proper to abandon that pursuit and take refuge under Section 239 of Criminal Proce dure Code.
In a separate Judgment to be pronounced by me in Crimi nal Appeal No. 241 of 1983, I have outlined the scope of Section 321 of Criminal Procedure Code.
What is to be decid ed in this case is whether the order passed by the MagiS trate under Section 32 1, Criminal Procedure Code, is proper or not.
We are not called upon to consider the propriety of the charge framed and then examine the evidence and see whether the accused should be discharged or the charge framed should be upheld.
I adopt the reasons given by me in Criminal Appeal No. 241 of 1983, relying upon the decision reported in of Bihar vs Ram Naresh Pandey) and in ; Jain vs State) and uphold the order of withdrawal passed by the Additional Chief Judicial Magis trate, Bhubaneswar, and upheld by the High Court in revi sion, and dismiss the appeal.
OZA, J: [For himself and on behalf of Bhagwati CJ.] The present appeal by special leave is directed against the judgment of the High Court of Orissa dated 14th May 1981 in Criminal Revision No. 21 of 1981 arising out of an order dated 20th September, 1980 passed by Additional Chief Judi cial Magistrate, Bhubaneswar allowing an application filed by the Special Public Prosecutor wherein he prayed for withdrawal from the prosecution of the Vigilance Case No. 33 of 1977 against Respondent No. 1 By the impugned judgment, the High Court dismissed Criminal Revision filed by the appellant petitioner and confirmed the order passed by Additional Chief Judicial Magistrate.
The Vigilance Department submitted a charge sheet against respondent No. 1 on the allegation that All India Congress Party some time before the General Election of the Parliament in the year 1971 set out a programme to raise funds for publication of Souvenir on behalf of the said party by each of the District Congress Committees under different provincial Congress Committees to educate people about the policy and programme of the Congress Party and the achievements in 696 the context of 1971 Elections.
It was alleged that the Souvenir Committee was formed and huge amount was collected from different companies at Delhi and Bombay for publication of advertisements in the Souvenirs.
It is further alleged that Smt.
Nandini Satpathy respondent No. 1 misappropriated a sum of Rs. 1,02,200 out of this amount collected from the companies and did not take steps for asking the Companies ' advertisements for publication in the Souvenirs.
It is alleged that forgery was committed and Shri Ramanath Panda, respondent No. 2 was also alleged to have participated with respondent No. 1 in misappropriation of the aforesaid amount.
On the information of Shri Shyamsunder Mohapatra, Ex Member of Parliament, a case was registered by the Vigi lance Department and ultimately a charge sheet was submitted against respondent Nos. 1 and 2.
Shri B.M. Patnaik the then Advocate General of Orissa was appointed as a Special Public Prosecutor to conduct the case.
By order dated 27.9.
1979, the Additional Chief Judicial Magistrate framed charges under Sections 406, 467, 471 and 120 of the I.P.C. against respondent No. 1 and under Section 406 read with Section 34 of the I.P.C. against respondent No. 2.
After the General Elections of May/June, 1980, Shri Patnaik resigned from the office.
Of Advocate General and also informed the State Government that he was not inclined to continue as Special Public Prosecutor in the case against Smt.
Nandini Satpathy.
In fact, though the case had been fixed on a number of dates between July and November, 1980 Shri Patnaik did 'not appear in the case on any one of these dates.
Thereafter respondent No. 4 who had been appointed as Special Public Prosecutor to conduct the cases of the Vigi lance Department under Section 24(6) of the Code of Criminal Procedure was instructed by the Government in the Vigilance Department to take charge of this case.
On 5.11.80, Shri P.K. Mohanty, Advocate sent a letter to the then Advocate General Shri Gobind Das requesting him for withdrawal of this .case and by letter dated 6.11.
1980 the learned Advo cate General Shri Gobind Das forwarded this letter of Shri P.K. Mohanty, Advocate to the Chief Secretary who endorsed the letter to Inspector General (Vigilance) asking him for his comments.
I.G. of Police (Vigilance) suggested that it would be proper to obtain the views of the Law Department, and after receipt of the comments of I.G. of Police (Vigi lance) the Chief Secretary referred the matter to the Law Department for advice and the Legal Remembrancer after considering the legal position regarding the withdrawal of the prosecution observed as under: 697 "As it sometimes happens, Political leaders are subjected to victimisation.
Resort is had to law courts to harass politi cal rivals.
In view of the law laid down by the Supreme Court Government may take a policy decision to curb such political victimisation through law Courts and direct with drawal irrespective of the question whether or not there is sufficient evidence in support of the prosecution.
The instant case is one instituted against Smt.
Nandini Satpathy, Ex Chief Minister of Orissa. ' It is possi ble for Government to take notice of the intense political rivalry between Smt.
Nandini Satpathy, on the one hand and the erstwhile leaders of Janta Party on the other hand that motive behind institution of such cases was political vic timisation rather than vindication of the law.
Government may suggest withdrawal of such cases to the concerned Public Prosecutor." On the receipt of this opinion from the law Department, the file was endorsed by the Chief Secretary to the Law Minister and the Law Minister endorsed the file to the Chief Minister.
After considering the matter from all angles, the Chief Minister passed an order dated 13.11.1980 that the case be withdrawn.
By letter dated 15.11.1980, the I.G. (Vigilance) communicated the decision of the Government to withdraw the prosecution to the Special Public Prosecutor Shri Dibakar Bhuyan and requested him to take necessary action in the matter.
After respondent No. 4 was put in charge of the case, he examined the case diary and the connected papers and on being satisfied that the charge of criminal breach of trust would fail against Smt.
Nandini Satpathy, he filed an application under Section 32 1 of the Code of Criminal Procedure for withdrawal from the prosecu tion on, having found that the charged amounts in this case are contributions to Souvenir Committee of the All India Congress Committee and that none of the members of the Central Souvenir Committee has complained of any dishonest use or fraud or injury or wrongful loss to the Committee or AICC for such non utilisation of the funds and that the offences charged would ultimately depend upon the proof of dishonest intention or fraud or wrongfUl loss to the ' Cen tral Souvenir Committee or to the AICC.
On 16.12.
1980 the Special Public Prosecutor made an application for additional ground to be added in the application for withdrawal and the additional ground alleged was that in public interest and in the changed circumstances, the State Government desired to withdraw from the prosecution.
698 After consideration of the case, the Additional Chief Judicial Magistrate by order dated 20th December, 1980 recorded his consent and permitted the Special Public Prose cutor to withdraw from the prosecution.
Thereafter one Mohd. Mumtaz, the present appellant who was not a party to these proceedings filed a revision petition in the High Court of Orissa challenging the order of the Additional Chief Judi cial Magistrate permitting withdrawal of the case.
But by an order dated 14.5.81 the High Court dismissed the revision petition.
Hence this appeal by special leave.
The F.I.R. in this case was lodged by one Shyamsunder Mohapatra against respondents Nos. 1 and 2 alleging that in January and February 1971 certain companies had issued 49 cheques in the names of Presidents of the District Congress Committees of Orissa totalling Rs.1,08,200 for advertise ments to be published in Souvenirs to be brought out in each district by the respective District Congress Committee.
These cheques were deposited in the account of Chairman, Souvenir Committee in Canara Bank, Bhubaneswar.
It is al leged that respondent No. 1 misappropriated the amount by drawing.
in favour of self bearer 9 cheques aggregating to Rs.95,000 and two bearer cheques aggregating to Rs.32,854 in the name of respondent No. 2.
It was alleged that neither advertisements were published nor the amounts returned to the companies.
It is significant to note that Shri Shyamsun der Mohapatra was neither an office bearer of the U.P.C.C. nor of the A.I.C.C.
Admittedly he was neither a member of the Central Souvenir Committee to which the money was en trusted for transmission to the State or the District Con gress Committee nor was he in any manner connected with any of the companies which paid the money for publication of the advertisements.
Shri Shyamsunder Mohapatra lodged the com plaint when respondent No. 1 was not the Chief Minister of the State.
He had been suspended from the Congress Party for his anti party activities when respondent No. 1 was the President of the U.P.C.C. and the Chief Minister of Orissa.
It is significant that these monies were paid by various companies in the name of All India Souvenir Committee and there is no material to indicate how the All India Souvenir Committee transferred these cheques to the respective State Congress Committees or the District Congress Committees.
There is no complaint also from any one of the companies that the monies paid by them were not utilised for the purpose for which they were given or were utilised for a different purpose without their consent.
Now it is difficult to appreciate how the learned Special Public 699 Prosecutor could make an application for withdrawal from the prosecution and the learned Chief Judicial Magistrate gave his consent to such withdrawal on the ground that there is no evidence to sustain the prosecution when a charge was already framed against respondent No. 1 on the basis that in the opinion of the learned Chief Judicial Magistrate who framed the charge there was ground for presuming that re spondent No. 1 had committed the offences charged against her.
There can therefore be no doubt that the withdrawal from the prosecution could not be permitted on the ground that there was insufficient ' or no evidence to sustain the prosecution.
But since entire record is before us and the matter has been argued at great length on :he basis of the material on record we propose to consider whether the charge was rightly framed and if we take the view that on the basis of the material on record no charge could be framed we must quash the charge against respondent No. 1.
It is clear from the material on record that various companies all over India gave monies by way of cheques to the Souvenir Committee of the All India Congress Committee.
We will assume for the purpose.
of argument that these amounts were given by the companies for the purpose of publication of advertisements in the souvenir which were entitled to be brought out by each District Congress Commit tee, but there is no material on record at all to show that when these amounts were distributed by the All India Con gress Committee to the respective provincial Congress Com mittees and by the provincial Congress Committees in their turn to the respective District Congress Committees, the entrustment of these amounts by the All India Congress Committee was expressed to be for the specific purpose of publication of advertisements in the souvenirs.
When there is nothing to indicate that the entrustment of these amounts to respondent No. 1 was for the specific purpose of being utilised only for the purpose of publication of advertise ments in the souvenirs, it is difficult to see how any charge of criminal breach of trust can be sustained against respondent No. 1.
It is not the case of the prosecution that any of these amounts were handedover by any of the companies to respondent No. 1.
The entrustment of these amounts, if at all, was to the Souvenir Committee of the All India Congress Committee and respondent No. 1 could not therefore possibly be charged for utilising any of these amounts for a purpose other than that for which it was entrusted to her.
We are therefore of the view that the charge framed against re spondent No. 1 was totally groundless and we would therefore quash it.
We accordingly dismiss the appeal but instead of permitting the 700 prosecution to be withdrawn under Section 321 we quash the charge framed against respondent No. 1 under Section 239 of the Code of Criminal Procedure, 1973.
NATARAJAN, J: This is a case where the Special Public Prosecutor (Vig.) C.D. Cuttack had filed a petition under Section 321 Cr.
P.C. and sought the permission of the Court for withdrawal of the case against the first respondent when the case was posted for consideration of charge.
Under Section 321 Cr.
P.C. a Public Prosecutor or Assistant Public Prosecutor incharge of a case may, with the consent of the court, at any time before the judgment is pronounced, with draw from the prosecution of any person either generally or in respect of any one or more of the offences for which he is tried.
In this case the Special Public Prosecutor had set out in paras 5 and 6 of his application the relevant materials which had prevailed upon him to seek withdrawal of prosecu tion of the case, after obtaining the consent of the Court, to subserve the interests of justice better.
There is no material in the case to show that the Special Public Prose cutor was influenced by any improper motives for filing the application for withdrawal of the prosecution or that he had acted against his will at the behest of any one else.
The learned Additional Chief Judicial Magistrate has bestowed judicial consideration over the matter and has thereafter passed a reasoned order.
While giving his consent for the withdrawal of the prosecution the learned Magistrate has borne in mind the principles laid down by this Court in R.K. Jain vs State, ; which has followed the earlier decision of this Court in State of Bihar vs Ram Naresh Pandey, Before passing the order, the learned Magistrate has been fully alive to the responsibili ty of the Court before it grants consent to an application made under Section 321 Cr.
P.C. The portion extracted below from the order of the learned Additional Chief Judicial Magistrate fully reveals this position : "While mentioning the facts in the petition, I have already indicated the reasons for which the prosecutor does not want to prosecute.
Now the Court has to consider whether consent should be given or not.
The discretion as to whether consent should be given to withdraw is with the court but it should be exercised judiciously and on correct legal principles.
It is not to be given as a matter of course nor the court shall surrender its own inde pendence of judgment." 701 After making an objective assessment of the merit of the application, the learned Additional Chief Judicial Magis trate held that the withdrawal of the prosecution "would in no way affect any public interest or improve any public confidence" and concluded as follows: "Considering all these circumstances if the public prosecutor most judiciously thought it proper to withdraw from the case in my opin ion, the court should be not a stumbling block by disallowing its consent.
I feel it just and proper to allow the petition".
The order of the learned Additional Chief Judicial Magistrate was affirmed, after a careful scrutiny by a learned Judge of the Orissa High Court in Crl.
Rev. No. 21 of 1981 filed in the High Court.
The learned Judge observed that the ratio laid down in R.K. Jain vs State (supra) "would not justify entertaining this application when a public prosecutor in his application had indicated that the evidence already collected did not support the prosecution and there was no prospect of a conviction and the appropri ate authority had taken the view that the prosecution in the broad ends of justice need not continue".
It may be thus seen that not only the learned Magistrate but also the High Court has found, after a careful scrutiny of relevant factors and circumstances, that the application for withdrawal of the prosecution made by the Special Public Prosecutor fully satisfied the tests laid down by this Court in State of Bihar vs Ram Naresh Pandey (supra) reiterated in R.K. Jain vs State (supra) for its being allowed viz. that the executive function of the public prosecutor in applying for withdrawal of the prosecution has not been improperly exercised and that it is not an attempt to interfere with the normal course of justice for illegitimate reasons or purposes.
The appellant has failed to establish in this appeal that the consent given by the learned Additional Chief Judicial Magistrate to the Special Public Prosecutor for withdrawal of the prosecution suffers from any error of law, patent or latent.
Consequently, the appeal fails and has, therefore, to be dismissed.
P.S.S. Appeal dismissed.
| Section 321 Criminal Procedure Code, 1973 empowers a Public Prosecutor incharge of a case to withdraw with the consent of the court from the prosecution of any person in respect of any one or more of the offences for which he is tried, at any time before the judgment is pronounced.
Respondent No.1 Ex Chief Minister of Orissa, was alleged to have misappropriated a huge sum, said to have been col lected by District Congress Committees from various compa nies for publication of their advertisements in party 's souvenirs before the 1971 General Elections.
A case was registered by the Vigilance Department against her and a charge sheet submitted.
The Addl.
Chief Judicial Magistrate framed charges under ss.406,467,471 and 120 of the IPC.
After the 1980 General Election, the State Government took a policy decision to withdraw cases against political leaders who were subjected to victimisation.
The Special Public Prosecutor on being satisfied that the charge of criminal breach of trust would fail against respondent No.1 filed a petition under s.321 Cr.
P.C. and sought the permis sion of the court in public interest for withdrawal of the case, when the case was posted for consideration of charge.
After making an objective assessment of the merits of the application and being satisfied that the withdrawal of the prosecution would in no way affect any public interest or improve any public confidence the Addl.
Chief Judicial Magistrate granted consent to withdraw from the prosecution.
The appellant 's revision petition having been dismissed by the High Court he appealed by special leave to this Court.
Dismissing the appeal the Court, 692 HELD: Per Oza, J. (Bhagwati C.J.I. and Oza, J.) I. Once a charge has been framed against the accused on the basis that there was ground for presuming that he had committed the offence charged against him, the Public Prose cutor cannot make an application for withdrawal from the prosecution and the Magistrate cannot give his consent to such withdrawal on the ground that there was insufficient or no evidence to sustain the prosecution.
[698H 699B] 2.
The charge of criminal breach of trust framed against respondent No. 1, however, was totally groundless.
There was nothing on record to indicate that the entrustment of funds to her was for the specific purpose of being utilised only for the purpose of publication of advertisements in the souvenirs.
It was not the case of the prosecution that any of these amounts were handed over by any of the companies to her.
The entrustment of these amounts, if at all, was to the souvenir committee of the All India Congress Committee and respondent No. 1 could not be charged for utilising any of these amounts for the purpose other than that for which it was entrusted to her.
The charge against her, therefore, could not he sustained.
[699E G] Instead of permitting the prosecution to he withdrawn under s.321 the charge framed against respondent No. 1 is quashed under s.239 of the Code of Criminal Procedure, 1973.
[699H 700A] Per Venkataramiah, J. I.I. Consent can he given under s.321 of the Code of Criminal Procedure, 1973 for withdrawal from the prosecution of a case at any time before the judgment is pronounced.
The framing of the charge cannot be an impediment to give con sent to such withdrawal.
In the instant case, the Public Prosecutor had applied his mind to the case before applying for withdrawal and the Chief Judicial Magistrate had not committed any error in giving his consent to such withdrawal.
The order was, therefore, fully justified.
The decision in State of Bihar vs Ram Naresh Pandey, , interpreting s.494 of the Code of Criminal Procedure, 1898 and the decision in R.K. Jain vs State through Special Police Establishment & Ors., ; , interpreting s.321 of the Code of Criminal Procedure, 1973 do not call for any reconsideration.[694C E] 693 Per Khalid, J. I. Order of withdrawal passed by the Additional Chief Judicial Magistrate is upheld.
[695D] 2.
Consent can be given under s.321 of the Code of Criminal Procedure for withdrawal from the prosecution of a case, not only when the charge is not framed but even after the charge is framed and at any time before the judgment.
[694H 695A] 3.
Section 239 of the Code of Criminal Procedure 1973 is not attracted to the facts of the case for the propriety of the charge framed was not at issue.
[695B, C] Sheo Nandan Paswan vs State of Bihar, Criminal Appeal No. 241 of 1983 decided on 20th December 1986, applied.
State of Bihar vs Ram Naresh Pandey, and R.K. Jain vs State, ; , referred to.
Per Natarajan, J. 1.
The consent given by the Additional Chief Judicial Magistrate to the Special Public Prosecutor for withdrawal of the prosecution suffers from no error of law, patent or latent.
[701G] 2.
There is no material in the case to show that the Special Public Prosecutor was influenced by any improper motives for filing the application for withdrawal of the prosecution or that he had acted against his will at the behest of anyone else.
The Additional Chief Judicial Magis trate had bestowed judicial consideration over the matter and had thereafter passed a reasoned order.
Not only he but also the High Court had found after a careful scrutiny of relevant factors and circumstances, that the application for withdrawal of the prosecution made by the Special Public Prosecutor fully satisfied the tests laid down by the Su preme Court inasmuch as the Public Prosecutor had not exer cised his executive function improperly and also had not attempted to interfere with the normal course of justice for illegitimate reasons or purposes.
[700D E, 701.E F] State of Bihar vs Ram Naresh Pandey, and R.K. Jain vs State, ; , referred to.
|
Appeal No. 1164 of 1966.
66 Appeal by special leave from the judgment and order dated September 27, 1965 of the Kerala High Court ' in O.P. No. 688 of 1965.
D. Narsaraju, S.A.L. Narayana Rao, R.N. Sachthey and B.D. Sharma, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Grover, J.
The short but important question which is involved in this appeal 'by special leave from a judgment of the Kerala High Court is whether the Appellate Income tax Tribunal has the power, under the relevant provisions of the Income tax Act, 1961, (hereinafter called the Act) to stay the recovery of the realization of the penalty imposed by the departmental authorities on an assessee during the pendency of an appeal before it.
The assessee, who is the respondent, was imposed penalties in the sum of Rs. 18,000/ , 1,700/ and 14,000/ respectively in respect of the assessment years 1954 55, 1960 61 and 1961 62.
These penalties were imposed .under section 271(1)(c) read with section 274(2) of the Act for concealment of particular income and furnishing inaccurate particulars.
The assessee preferred appeals to the Income tax Appellate Tribunal and made an interim prayer for stay of collection of the penalties imposed.
The Tribunal declined to order any stay holding that it had no power to grant such a prayer.
The assessee then moved the High Court under article 226 of the Constitution.
The High Court held that the Tribunal had the power to stay the proceedings as also the collection of the penalties pending the appeal since that power was incidental and ancillary to its appellate jurisdiction.
The Tribunal was consequently directed to dispose of the stay application in accordance with law.
The relevant provisions.
of the Act may be first noticed.
Section 156 provides that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under the Act, the Income tax Officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.
Under section 220( 1 ) any amount specified in the notice of demand under section 156 has to be paid within 35 days of the service of the notice or within such lesser period as may be specified under the proviso to sub section
If the amount is not paid within the period limited or extended (the assessee can ask for an extension) the assessee shall be deemed to be in default.
Sub section (6) of section 220 provides that where an assessee has presented an appeal under section 246 the Income tax Officer may, in his discretion and subject to such conditions as he may think fit, treat the assessee as not being in default so long as the appeal .remains pending.
67 Section 221 provides for the imposition of penalty when the assessee is in default.
Sections 222 to 224 relate to the issuance of a certificate to the Tax Recovery Officer.
Under section 225 the Income tax Officer can order stay of proceedings, even after the certificate has been issued to the Tax Recovery Officer.
It may be mentioned that the last four sections in terms relate to recovery of tax, but by virtue of section 229 any penalty imposed is also recoverable in the same manner.
Section 246 to which reference has been made in section 220(6) gives the appealable orders against which an assessee may appeal to the Appellate Assistant Commissioner.
Appeals to the Tribunal are dealt with by sections 252 to 255.
Section 252 provides merely for constitution of the Tribunal.
Section 253 says that any assessee aggrieved by the orders set out in cls.
(a), (b) and (c) of sub section
(1) may appeal to the Tribunal.
The Commissioner is also entitled to direct the Income tax Officer to file an appeal against the order of an Appellate Assistant Commissioner made under section 250.
Section 254 specifies the orders which the Tribunal can make.
Sub section (1 ) which is material may be reproduced below : "254.
Orders of Appellate Tribunal. ( 1 ) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit.
" Section 255 gives the procedure of the Appellate Tribunal.
Subsections (5) and (6) of this section need alone be noticed.
"255 (1) . . . . . (2) (3) (4) (5) Subject to the provisions of this Act, the Appellate Tribunal shall have power to regulate its own procedure and the procedure of Benches thereof in all matters arising out of the exercise of its powers or of the discharge of its functions, including the places at which the Benches shall hold their sittings.
(6) The Appellate Tribunal shaH, for the purpose of discharging its functions, have all the powers which are vested in the Income tax authorities referred to in section 131, and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 68 228 and for the purpose of section 196 of the Indian Penal Code (XLV of 1860) and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898 (V of 1898).
" Section 131 may at this stage be referred to.
It gives to the Income tax Officer, the Appellate Assistant Commissioner and the Commissioner the same powers as are vested in the court under the Code of Civil Procedure when trying a suit in respect of the matters specified in the section.
But these powers relate to discovery and inspection; enforcing the attendance of witnesses; compelling production of books of account etc.; issuing commissions and allied matters.
There can be no manner of doubt that by the provisions of the Act or the Income tax Appellate Tribunal Rules, 1963 powers have not been expressly conferred upon the Appellate Tribunal to stay proceedings relating to the recovery of penalty or tax due from an assessee.
At the same time it is significant that under section 220 (6) the power of stay by treating the assessee as not being in default during the pendency of an appeal has been given to the Income tax Officer only when an appeal has been presented under section 246 .which will be to the Appellate Assistant Commissioner and not to the Appellate Tribunal.
There is no provision in section 220 under which the Income tax Officer or any of his superior departmental officers can be moved for granting stay in the recovery of penalty or tax.
It may be that under section 225 notwithstanding that a certificate has been issued to the Tax Recovery Officer for the recovery of any tax (the position will be the same with regard to penalty) the Income tax Officer may grant time for the payment of the tax.
In this manner he can probably keep on granting extensions until the disposal of the appeal by the Tribunal.
It may also be that as a matter of practice prevailing in the department the Commissioner or the Inspecting Assistant Commissioner in exercise of administrative powers can give the necessary relief of staying recovery to the assessee but that can hardly be put at par with a statutory power as is contained in section 220(6) which is confined only to the stage of pendency of an appeal before the Appellate Assistant Commissioner.
The argument advanced on behalf of the appellant before us that in the absence of any express provisions in sections 254 and 255 of the Act relating to stay of recovery during the pendency of an appeal it must be held that no such power can be exercised by the Tribunal, suffers from a fundamental infirmity inasmuch as it assumes and proceeds on the premise that the statute confers such a power on the Income tax Officer who can give the necessary 69 relief to an assessee.
The right of appeal is a substantive right and the questions of fact and law are at large and are open to review by the Appellate Tribunal.
Indeed the Tribunal has been given very wide powers under section 254(1) for it may pass such orders as it thinks fit after giving full hearing to both the parties to the appeal.
If the Income tax Officer and the Appellate Assistant Commissioner have made assessments or imposed penalties raising very large demands and if the Appellate Tribunal is entirely helpless in the matter of stay or recovery the entire purpose of the appeal can be defeated if ultimately the orders of the departmental authorities are set aside.
It is difficult to conceive that the Legislature should have left the entire matter to the administrative authorities to make such orders as they choose to pass in exercise of unfettered discretion.
The assessee, as has been pointed out before, has no right to even move an application when an appeal is pending before the Appellate Tribunal under section 220 (6 ) and it is only at the earlier stage of appeal before the Appellate Assistant Commissioner that the statute provides for such a matter being dealt with by the Income tax Officer.
It is a firmly established rule that an express grant of statutory.
power carries with it by necessary implication the authority to use all reasonable means to make such grant effective (Sutherland Statutory Construction, Third Edition, articles 5401 and 5402).
The powers which have been conferred by section 254 on the Appellate Tribunal with widest possible amplitude must carry with them by necessary implication all powers and duties incidental and necessary to make the exercise of those powers, fully effective.
In Domat 's Civil Law Cushing 's Edition, Vol. 1 at page 88, it has been stated: "It is the duty of the Judges to apply the laws, not only to what appears to be regulated by their express dispositions, but to all the cases where a just application of them may be made, and which appear to be comprehended either within the consequences that may be gathered from it." Maxwell on Interpretation of Statutes, Eleventh Edition, contains a statement at p. 350 that "where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.
Cui jurisdiction data est, ea quoque concessa esse videntur, sine quibus jurisdiction explicari non potuit.
" An instance is given based on exhibit parte Martin(x) that "where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced." (1) , 491. 70 The High Court in the present case has referred to certain decisions under the Motor Vehicles Act in which the question arose whether an interim order of stay could be passed although section 64(2) of the Motor Vehicles Act as amended did not expressly confer a power on the authority to pass such an order.
It was held in those cases that the power to stay was a necessary corollary to the power to entertain an appeal or revision: Swarnambikar Motor Service vs Wahite Motor Service(D; Themmalpuram Bus Transport Ltd. vs The Regional Transport Officer, Malabar(2).
The full bench decision in Dharmadas vs State Transport Appellate Tribunal(3) related to the question whether a remand could be ordered in exercise of appellate jurisdiction under section 64 of the Motor Vehicles Act in the absence of any express power to that effect existing in the statute.
It was held that the power to remand was incidental to and implicit in the appellate jurisdiction created by section 64.
According to the decision in the Burhanpur Tapti Mill Ltd. vs The Board of Revenue, Madhya Pradesh & Ors.
(4), since the Board of Revenue had the power to adjudge the correctness of an order passed by the Commissioner under section 22B reopening an assessment the Board had also the power to stay the fresh assessment proceedings started by the Assistant Commissioner in pursuance of that order.
It was said that the general principle was that in a taxing statute there was no room for what could be called the equitable construction, but that principle applied only to the taxing part of the statute and not to the procedural part.
It has further been observed that "where the legislature invests an Appellate Tribunal with powers to prevent an injustice, it impliedly empowers it to stay the proceedings which may result in causing further mischief.
" It is well known that an Income tax Appellate Tribunal is not a court but it exercises judicial powers.
The Tribunal 's powers in dealing with appeals are of the widest amplitude and have in some cases been held similar to and identical with the powers of an appellate court under the Civil Procedure Code.
(See Commissioner of Income tax, Bombay City vs Hazarimal Nagji & Co.(5) and New India Assurance Co. Ltd. vs Commissioner of Income tax, Excess Profits, Bombay City(6).
In Polini vs Grey(7), this is what Jessel M.R. said about the powers of the Court of Appeal to.
grant stay at page 443: "It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party, is to Shortnotes (1956) 2M.L.J. 12.
(2) A.I.R. 1957 Kerala.
(3) [1962] Kerala L.J. 1133.
(4) (1955) 6 S.T.C. 670.
(5)46 I.T.R. 1168.
(6) 31 I.T.R. 844.
(7) 71 reap the fruits of that litigation, and not obtain merely a barren success.
That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of Appeal before the second trial, as to.
the Court of last instance before the hearing of the final appeal".
There are certain decisions, however, in which difficulty was felt that the Appellate Tribunal did not possess the power to stay recovery during the pendency of an appeal.
In Vetcha Sreeramamurthy vs The Income tax Officer Vizianagram & Another(1), the assessee had to file a writ petition because the realisation of the tax assessed had not been stayed during the pendency of an appeal before the Tribunal.
The controversy centred in that case mainly on the scope of the discretionary power conferred by section 45 of the Indian Income tax Act, 1922, on the Income tax Officer.
It was held that a writ petition to compel the Income tax Officer to exercise his discretion under section 45 or to exercise it honestly and, objectively was not barred.
But on the merits the Court declined issue a writ.
Viswanatha Sastri J., in his separate judgment made the following observations at page 271: "Lastly it has to 'be observed that section 45 of the Income tax Act is somewhat cryptic in its terms and merely gives the Income tax Officer power to declare a person to be not in default pending the appeal.
There is no provision for stay similar to Order XLI, Rules 5 & 6, of the Civil Procedure Code.
There is no conferment of an express power of granting a stay of realisation of the tax, though the effect of an order in favour of the assessee under section 45 of the Act is a stay.
Nor is there a provision for allowing the tax to be paid in instalments or for taking security for deferred payment.
Neither the Appellate Assistant Commissioner nor the Appellate Tribunal is given the power to stay the collection of tax.
Whether the law should not be made more, liberal so as to enable an assessee who has preferred an appeal, to obtain from the appellate forum, a stay of collection of the tax, either in whole or in part, on furnishing suitable security, is a matter for the legislature to consider.
" It is interesting that in another case Pollisetti Narayana Rao vs Commissioner of Income tax, Hyderabad(2), the same High Court held that stay could be granted by it pending reference of a case by the Appellate Tribunal to the High Court.
This power the High Court had under section 151 of the Civil Procedure Code and under article 227 of the Constitution.
(1) (2) 72 The High Court, in the present case, referred to a passage from Halsbury 's Laws of England, 3rd Edition, Vol. 20, p. 705 where it is stated that "no tax is payable while the assessment is the subject matter of an appeal except such part of the tax assessed as appears to the Commissioners seized of the appeal not to be in dispute.
" This statement is apparently based on the provisions of the English Statutes and it is not possible to derive any assistance from it.
Section 255(5) of the Act does empower the Appellate Tribunal to regulate its own procedure, but it is very doubtful if the power of stay can be spelt out from that provision.
In our opinion the Appellate Tribunal must be held to have the power to grant stay as incidental or ancillary to its appellate jurisdiction.
This is particularly so when section 220(6) deals expressly with a situation when an appeal is pending before the Appellate Assistant Commissioner, but the Act is silent in that behalf when an .appeal is pending before the Appellate Tribunal.
It could well be said that when section 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory.
A certain apprehension may legitimately arise in the minds of the authorities administering the Act that if the Appellate Tribunals proceed to stay recovery of taxes or penalties payable by or imposed on the assessees as a matter of course the revenue will be put to great loss because of the inordinate delay in the disposal of appeals by the Appellate Tribunals.
It is needless to point out that the power of stay by the Tribunal is not likely to be exercised in a routine way or as a matter of course in view of the special nature of taxation and revenue.
It wilt only be when ' a strong prima facie case is made out that the Tribunal will consider whether to stay the recovery proceedings and on what conditions and the stay will be granted in most deserving and appropriate cases where the Tribunal is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the recovery proceedings to continue during the pendency of the appeal.
For all the reasons given above, the appeal fails and it is hereby dismissed.
But in view of the entire circumstances the parties are left to bear their own costs.
V.P.S. Appeal dismissed.
| Certain amounts were imposed as penalty upon the assessee (respondent) under sections 271(1)(c) and 274(2) of the Income tax Act, 1961, for concealment of particulars of income and for furnishing inaccurate particulars.
The assessee preferred appeals before the Appellate Tribunal and prayed for stay of recovery of the penalties pending disposal of the appeals, but the Tribunal declined to stay on the ground that it had no power to do so.
The assessee moved the High.
Court under article 226 and the High Court held that the Tribunal had the power to stay and directed the Tribunal to dispose of the stay application in accordance with law.
In appeal to this Court, HELD: The Tribunal has the power to order the stay of recovery of the penalty as an incidental and ancillary power to its appellate jurisdiction.
[72 C] Under section 220(6) the Income tax Officer has a power not to treat an assessee as being in default, when an appeal under section 246 before the Appellate Assistant Commissioner is pending.
But neither the Income tax Officer nor any other departmental officer has the power to stay the recovery of penalty when an appeal is pending before the Tribunal.
The Act is silent in that behalf, and there is no provision in the Act or the Income tax Appellate Tribunal Rules, 1963, granting expressly such a power to the Tribunal.
That is because, the Tribunal, though not a court, exercises in its appellate jurisdiction under section 254 judicial powers of an appellate court of the widest possible amplitude 'and such a statutory power impliedly grants the power of doing all such acts, or employing such means as are essentially necessary to the execution of such jurisdiction and carries with.
it the power to stay proceedings in proper cases.
In view of the special nature of taxation 'and revenue laws.
such power can be exercised after imposing conditions for safeguarding the revenue only in deserving and appropriate cases where the appeal will be otherwise frustrated or rendered nugatory.
The general principle that in a taxing statute there is no room for what could be called equitable construction applies only to the taxing part of the statute and not to its procedural part.
[68 C E; 69 E; 70 D E; 72 F G] Burhanpur Tapti Mills Ltd. vs Board of Revenue, Madhya Pradesh, (1955) 6 S.T.C. 670, referred to.
Observations in Vatcha Sreeramamurthy vs I.T.O. Vizianagaram, at p. 271, disapproved.
|
Appeal No.193 of 1958.
Appeal by special leave from the judgment and decree dated October 3, 1955, of the High Court of Judicature, Madhya Bharat, Indore, in Civil First Appeal No. 58 of 1952.
C. B. Aggarwala and Bhagwan Das Jain, for the appellant.
Radhey Lal Aggarwal and A. G. Ratnaparkhi, for respondent No. 1. 1961.
March 29.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave from the judgment of the High Court of Madhya Bharat.
A suit was filed by firm Messrs. Harishchandra Dwarkadas (hereinafter called the respondent) against the appellant firm Messrs. Murlidhar Chiranjilal and one Babulal.
The case of the respondent was that a contract had been entered into between the appellant and the respondent through Babulal for sale of certain canvas at Re. I per yard.
The delivery was to be made through railway receipt for Calcutta f. o. r. Kanpur.
The cost of transport from Kanpur to Calcutta and the labour charges in that connection were to be borne by the respondent.
It was also agreed that the railway receipt would be delivered on August 5, 1947.
The appellant however failed to 655 deliver the railway receipt and informed the respondent on August 8, 1947, that as booking from Kanpur to Calcutta was closed the contract had become impossible of performance; consequently the appellant cancelled the contract and returned the advance that had been received.
The respondent did not accept that the contract had become impossible of performance and informed the appellant that it had committed a breach of the contract and was thus liable in damages.
After further exchange of notices between the parties, the present suit was filed in November, 1947.
Written statements were filed both by the appellant and Babulal.
The contention of Babulal was that the contract had become incapable of performance and was therefore rightly rescinded.
Further Babulal contended that he was not in any case liable to pay any damages.
The appellant on the other hand denied all knowledge of the contract and did not admit that it was liable to pay any damages.
Certain other pleas were raised by the appellant with which we are however not concerned in the present appeal.
Three main questions arose for determination on the pleadings of the parties.
The first was whether Babulal had acted as agent of the appellant in the matter of this contract; the second was whether the contract had become impossible of performance because the booking of goods from Kanpur to Calcutta was stopped; and the last was whether the respondent was entitled to damages at the rate claimed by it.
The trial court held that Babulal had acted as the agent of the appellant in the matter of the contract and the appellant was therefore bound by it.
It further hold that the contract had become impossible of performance.
Lastly it hold that it was the respondent 's duty when the appellant had failed to perform the contract to buy the goods in Kanpur and the respondent had failed to prove the rate prevalent in Kanpur on the date of the breach (namely, August 5, 1947) and therefore was not entitled to any damages.
On this view the suit was dismissed.
The respondent went in appeal to the High Court 656 and the two main questions that arose there were about the impossibility of the performance of the contract and the liability of the appellant for damages.
The High Court held that the contract had not become impossible of performance as it had not been proved that the booking between Kanpur and Calcutta was closed at the relevant time.
It further held that the respondent was entitled to damages on the basis of the rate prevalent in Calcutta on the date of breach and after making certain deductions decreed the suit for Rs. 16,946.
Thereupon there was an application by the appellant for a certificate to appeal to this Court, which was rejected.
This was followed by an application to this Court for special leave which was granted; and that is how the matter has come up before us.
The same two questions which were in dispute before the High Court have been raised before us on behalf of the appellant.
We think it unnecessary to decide whether the contract had become impossible of performance, as we have come to the conclusion that the appeal must succeed on the other point raised on behalf of the appellant.
The necessary facts in that connection are these: The contract was to be performed by delivery of railway receipt f. o. r. Kanpur by the appellant to the respondent on August 5, 1947.
This was not done and therefore there was undoubtedly a breach of the contract on that date.
The question therefore that arises is whether the respondent has proved the damages which it claims to be entitled to for the breach.
The respondent 's evidence on this point was that it proved the rate of coloured canvas in Calcutta on or about the date of the breach.
This rate was Rs. 1 8 3 per yard and the respondent claimed that it was therefore entitled to damages at the rate of Re. 0 8 3 per yard, as the contract rate settled between the parties was R.s. 1 per yard, The quantum of damages in a case of this kind has to be determined under section 73 of the Contract Act, No. IX of 1872.
The relevant part of it is as follows: 657 "When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it. " Explanation In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non performance of the contract must be taken into account.
" The contention on behalf of the appellant is that the contract was for delivery f. o. r. Kanpur and the respondent had therefore to prove the rate of plain (not coloured) canvas at Kanpur on or about the date of breach to be entitled to any damages at all.
The respondent admittedly has not proved the rate of such canvas prevalent in Kanpur on or about the date of breach and therefore it was not entitled to any damages at all, for there is no measure for arriving at the quantum of damages on the record in this case.
Where goods are available in the market, it is the difference between the market price on the date of the breach and the contract price which is the measure of damages.
The appellant therefore contends that as it is not the case of the respondent that similar canvas was not available in the market at Kanpur on or about the (late of breach, it was the duty of the respondent to buy the canvas in Kanpur and rail it for Calcutta and if it suffered any damage because of the rise in price over the contract price on that account it would be entitled to such damages.
But it has failed to prove the rate of similar canvas in Kanpur on the relevant date.
There is thus no way in which it can be found that the respondent suffered any damage by the breach of this contract.
The two principles on which damages in such cases are calculated are well settled.
The first is that, as far as possible, he who has proved a breach of a bargain .
83 658 to supply what he contracted to get is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; but this principle is qualified by a second, which imposes on a plaintiff the duty of taking all reasonable step" to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps: (British Westinghouse Electric and Manufacturing Company Limited vs Underground Electric Railways Company of London (1)).
These two principles also follow from the law as laid down in section 73 read with the Explanation thereof If therefore the contract was to be performed at Kanpur it was the respondent 's duty to buy the goods in Kanpur and rail them to Calcutta on the date of the breach and if it suffered any damage thereby because of the rise in price on the date of the breach as compared to the contract price, it would be entitled to be reimbursed for the loss.
Even if the respondent did not actually buy them in the market at Kanpur on the date of breach it would be entitled to damages on proof of the rate for similar canvas prevalent in Kanpur on the date of breach, if that rate was above the contracted rate resulting in loss to it.
Bat the respondent did not make any attempt to prove the rate for similar canvas prevalent in Kanpur on the date of breach.
Therefore it would obviously be not entitled to any damages at all, for on this state of the evidence it could not be said that any damage naturally arose in the usual course of things.
But the learned counsel for the respondent relies on that part of section 73 which says that dam ages may be measured by what the parties knew when they made the contract to be likely to result from the breach of it.
It is contended that the contract clearly showed that the goods were to be transported to and sold in Calcutta and therefore it was the price in Calcutta which would have to be taken into account in arriving at the measure of damages for the parties knew when they made the contract that the goods were to be sold in Calcutta.
Reliance in this connection is placed on (1) 689.
659 two cases, the first of which is Re. R. and H. Hall Ltd. and W. H. Pim (Junior) & Co. 's Arbitration (1).
In that case it was held that damages recoverable ' by the buyers should not be limited merely to the difference between the contract price and the market price on the date of breach but should include both the buyers ' own loss of profit on the resale and the damages for which they would be liable for their breach of the contract of resale, because such damages must reason ably be supposed to have been in the contemplation of the parties at the time the contract was made since the contract itself expressly provided for are sale before delivery, and because the parties knew that it was not unlikely that such resale would occur. 'That was a case where the seller sold unspecified cargo of Australian wheat at a fixed price.
The contract provided that notice of appropriation to the contract of a specific cargo in a specific ship should be given within a specified time and also contained express provisions as to what should be done in various circumstances if the cargo should be resold one or more times before delivery.
That was thus a case of a special type in which both buyers and seller knew at the time the contract was made that there was an even chance that the buyers could resell the cargo before delivery and not retain it themselves.
The second case on which reliance was placed is Victoria Laundry (Windsor) Ltd. vs Newman Industries Ltd, (2).
That was a case of a boiler being sold to a laundry and it was held that damages for loss of profit were recoverable if it was apparent to the defendant as reasonable persons that the delay in delivery was liable to lead to such loss to the plaintiffs.
These two cases exemplify that provision of section 73 of the Contract Act, which provides that the measure of damages in certain circumstances may be what the parties knew when they made the contract to be likely to result from the breach of it.
But they are cases of a special type; in one case the parties knew that goods purchased were likely to be resold before delivery and therefore any loss by the breach of contract eventually (1) (2) 660 may include loss that may have been suffered by the buyers because of the failure to honour the intermediate contract of resale made by them; in the other the goods were purchased by the party for his own business for a particular purpose which the sellers were expected to know and if any loss resulted from the delay in the supply the sellers would be liable for that loss also, if they had knowledge that such loss was likely to result.
The question is whether the present is a case like these two cases at all.
It is urged on behalf of the respondent that the seller knew that the goods were to be sent to Calcutta; therefore it should be presumed to know that the goods would be sold in Calcutta and any loss of profit to the buyer resulting from the difference between the rate in Calcutta on the date of the breach and the contract rate would be the measure of damages.
Now there is no dispute that the buyer had purchased canvas in this case for resale; but we cannot infer from the mere fact that the goods were to be booked for Calcutta that the seller knew that the goods were for resale in Calcutta only.
As a matter of fact it cannot be denied that it was open to the buyer in this case to sell the railway receipt as soon at it was received in Kanpnr and there can be no inference from the mere fact that the goods were to be sent to Calcutta that they were meant only for sale in Calcutta.
It was open to the buyer to sell them any where it liked.
Therefore this is not a case where it can be said that the parties knew when they made the contract that the goods were meant for sale in Calcutta alone and thus the difference between the price in Calcutta at the date of the breach and the contract price would be the measure of damages as the likely result from the breach.
The contract was for delivery for Kanpur and was an ordinary contract in which it was open to the buyer to sell the goods where it liked.
We may in this connection refer to the following observations in Chao and others vs British Traders and Shippers Ltd. (1), which are, apposite to the facts of the present case: (1) ,797.
661 "It is true that the defendants knew that the plaintiffs were merchants and, therefore, had bought for resale, but every one who sells to a merchant knows that he has bought for are sale, and it does not, as I understand it, make any difference to the ordinary measure of damages where there is a market.
What is contemplated is that the merchant buys for are sale, but, if the goods are not delivered to him, he will go out into the market and buy similar goods and honour his contract in that way.
If the market has fallen he has not suffered any damage, if the market has risen the measure of damages is the difference in the market price.
" In these circumstances this is not a case where it can be said that the parties when they made the contract knew that the likely result of breach would be that the buyer would not be able to make profit in Calcutta.
This is a simple case of purchase of goods for resale anywhere and therefore the measure of damages has to be calculated as they would naturally arise in the usual course of things from such breach.
That means that the respondent had to prove the market rate at Kanpur on the date of breach for similar goods and that would fix the amount of damages, in case that rate had gone above the contract rate on the (late of breach.
We are therefore of opinion that this is not a case of the special type to which the words "which the parties knew, when they made the contract, to be likely to result from the breach of it" appearing in section 73 of the Contract Act apply.
This is ,in ordinary case of contract between traders which is covered by the words "which naturally arose in the usual course of things from such breach" appearing in section 73.
As the respondent had failed to prove the rate for similar canvas in Kanpur on the date of breach it is not entitled to any damages in the circumstances.
The appeal is therefore allowed, the decree of the High Court set aside and of the trial court restored with costs to the appellant throughout.
| The questions for determination in the appeal were whether the award in question was invalid, (1) by reason of the court failing to comply with the mandatory requirement of section 23(l) Of the , that the time within which the award is to be made, must be specified in the order, and (2) whether the arbitrator was in error in allotting to the appellant less than half share in the properties.
Held, that under section 23(l) Of the , it is imperative that the time for making the award must be fixed; but that does not mean that where the court omits to specify the time in the order of reference and does so elsewhere in the proceedings, the reference is invalid.
Consequently, in a case where the order sheet of the court read with the order of reference made it clear that the arbitrator was to file his award by the date to which the suit was adjourned, it could not be said that the section had not been complied with.
Raja Har Narain Singh vs Chaudbrain Bhagwant Kuar (1891) L.R. 18 I.A. 55, referred to.
Held, further, that the award could not be said to be bad on the face of it and "otherwise invalid" merely because the appellant had received less than his due share.
The court cannot interfere with the findings of an arbitrator based on the best of his judgment unless it is shown that he has acted dishonestly.
|
vil Appeal No. 211 of 1964.
Appeal from the judgment and order dated February ,22, 1961 of the Bombay High Court in Miscellaneous Application No. 352 of 1959.
Niren De, Additional Solicitor General, R. Ganapathy lyer and R.N. Sachthey, for the appellants.
A.V. Viswanatha Sastri, T.A. Ramachandran, J.B. Dadachanji, O.C. Mathur and Ravinder Narain, for the respondents.
The Judgment of the Court was delivered by Sikri, J.
This appeal is in pursuant to a certificate of fitness granted by the High Court of Maharashtra at Bombay under article 133(1)(c)of the Constitution is directed against the judgment of the said High Court in a petition under article 226 of the Constitution filed by the respondent.
The India Fisheries (P) Ltd. hereinafter called the respondent was a private limited company and was directed to be wound up by an order of the Bombay High Court, dated October 11, 1950, and a Court Liquidator was appointed as the Official Liquidator thereof with all powers under section 179 of the Indian Companies Act.
1913 (VII of 1913) to be exercised by him under section 180 without sanction or intervention of the Court save and except in case of sales of immovable property belonging to the respondent.
For the assessment year 1948 49, the respondent was assessed on December 8. 1950, the tax being assessed at Rs. 8,737/15/ .
On or about March 15.
1951, the Income Tax Officer lodged a claim in respect of this tax with the Official Liquidator.
That claim was adjudged and allowed as an ordinary claim and certified as such on April 2 1952.
in August, 1954, the Official Liquidator declared a dividend of 9 1/2 annas in a rupee and paid to the Income Tax Department a sum of Rs. 5,188/3/ against the claim made by the Income Tax Officer as an ordinary creditor.
Thus a balance of Rs. 3,549/12 still remained payable to the Income Tax Department from the assets of the respondent.
For the year 1955 56, the Department made a demand from the respondent on June 22, 1954, for a sum of Rs. 2,565/6/ as advance tax.
This was paid by the Official Liquidator.
On a 681 regular assessment being made for the said year, only Rs. 1,1 26/12/was assessed as payable by the respondent.
After adjusting this sum against the advance payment of Rs. 2,565/6/ , Rs. 1,460/1/became refundable to the respondent, inclusive of interest.
Instead refunding the said balance to the respondent, the Income Tax Officer set off the said amount against the balance of Rs. 3,549/12/which was still outstanding in respect of the Income tax demand for the year 1948 49.
The respondent filed a revision petition to the Commissioner of Income tax, but the said petition was rejected by the Commissioner on September 21.
holding that the action of the Income Tax Officer was perfectly justified under the provision of section 49E of the Income Tax Act.
On November 25, 1959, the respondent filed a petition under article 226 of the Constitution and prayed for a writ, direction or order for setting aside the orders of the Income Tax Officer and the Income Tax Commissioner.
He further prayed for any further writ, direction or order restraining the Department from setting off the refund against the tax dues and directing them to hand over the balance to the Official Liquidator.
The High Court held that the demand of Rs. 8.737/12/ in respect of the assessment year 1948 49.
being adjudged and certified, came to have all the incidents and character of an unsecured debt payable by the Official Liquidator to the Department.
The High Court observed that "this claim thereafter was governed by the provisions of the Company law and could be paid to the creditor only in accordance with the provisions of the Company law.
No other remedy nor any other method of obtaining satisfaction of this claim was available to the creditor thereafter.
It was no longer the amount of tax remaining payable by a person to whom the refund was due within the meaning of Section 49E of the Income Tax Act.
In our opinion, therefore.
the provision of Section 49E was not available to the Department for setting off the amount of the excess towards the balance of its claim of Rs. 8,737/15/ which the department had proved in the insolvency of the company and was being dealt with in the Insolvency." The High Court accordingly set aside the orders passed by the Department in so far as they set off the amount of the refund towards the tax remaining payable, and directed the Income Tax Officer to deal with and dispose of the claim of the present respondent for the refund and pass appropriate orders in respect of the said amount of refund under the provisions of section 48 of the Income Tax Act.
The learned Additional Solicitor General on behalf of the appellant.
contends that s, 49E gives statutory power to the Income tax Officer.
inter alia, to set off the amount to be refunded or any part of that amount against the tax remaining payable by the person to whom the refund is due, and this statutory power is not subject to any provision of any other law.
He says that the Companies Act 682 does not take away this power.
Section 49E is in the following terms: "Where under any of the provisions of this Act, a refund is found to be due to any person, the Income tax Officer, Appellate Assistant Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded, or any part of that amount against the tax, interest or penalty, if any, remaining payable by the person to whom the refund is due.
" On the face of this provision, there is no doubt that this section is not subject to any other provision of law.
But it will be surprising if this power can be exercised in such a way as to defeat the provisions of the Indian Companies Act.
It is not denied by the learned Additional Solicitor General that the State has no priority in respect of this claim.
The question then arises whether section 49E is subject to the Insolvency Rules contained in the Companies Act.
Section 228 of the Companies Act, 1913, provides: "228.
Debts of all descriptions to be proved.
In every winding up (subject in the case of insolvent companies to the application in accordance with the provisions of this Act of the law of insolvency) all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, shall be admissible to proof against the company, a just estimate being made, so far as possible, of the value of such debts or claims as may be subject to any contingency or for some other reason do not bear a certain value.
" Section 229 provides: "Application of insolvency rules in winding up of insolvent companies.
In the winding up of an insolvent company the same rules shall prevail and be observed with regard to the respective rights of secured and unsecured creditors and to debate provable and to the valuation of annuities and future and contingent liabilities as are in force for the time being under the law of insolvency with respect to the estates of persons adjudged insolvent; and all persons who in any such case, would be entitled to prove for and receive dividends out of the assets of the company may come in under the winding up, and make such claims against the company as they respectively are entitled to by virtue of this section.
" The effect of these statutory provisions is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts 683 are to be paid pari passu.
Therefore, once the claim of the Department has to be proved and is proved in the liquidation proceedings, the Department cannot by exercising the right under section 49E of the Income Tax Act get priority over the other unsecured creditors.
If we were to read section 49E in the way suggested by the learned Additional Solicitor General, it would be defeating the very object underlying sections 228 and 229 of the Companies Act, 1913.
If there is an apparent conflict between two independant provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees and in all circumstances; sections 228 and 229 deal with the proof of debts and their payment in liquidation.
In our opinion, section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolvency rules do not apply.
Accordingly, agreeing with the High Court, we hold that the Income Tax Officer was in error in applying section 49E and setting off the refund due.
The Commissioner was equally in error in affirming this order.
The learned Additional Solicitor General also urged that the application under article 226 was misconceived because the Income Tax Officer had jurisdiction.
But if we interpret section 49E as we have done, it is a clear case of lack of jurisdiction.
At any rate, there is an error apparent on the face of the orders and the High Court was quite right in exercising its jurisdiction under article 226.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| The respondent company was directed to be wound up and an official liquidator appointed by an order of the High Court in October, 1950.
In December, 1950, the respondent was assessed to tax amounting to Rs. 3737/ for the year 1948 49.
A claim made for this tax on the official liquidator was adjudged and allowed as an ordinary claim and certified as such in April, 1952.
The Liquidator declared a dividend of 91/2 annas in the Rupee in August, 1954 and paid a sum of Rs. 5188 to the Department, leaving a balance of Rs. 3549.
In June, 1954.
the Department made a demand from the respondent and was paid Rs. 2565 as advance tax for the year 1955 56.
On a regular assessment being made for that year, only Rs. 1126 was assessed as payable, so that a sum of Rs. 1460, inclusive of interest, became refundable to the respondent.
However, the Income Tax Officer, purporting to exercise the power available to him under section 49E of the Income Tax Act, 1922, set off this amount against the balance of Rs. 3549 due for the year 194849.
A revision petition filed by respondent in respect of this set off was rejected by the Commissioner of Income Tax.
Thereafter, a petition under article 226 filed by the respondent to set aside the orders of the Income Tax Officer and the Commissioner was allowed by the High Court, mainly on the ground that the demand for Rs. 8737 in respect of 1948 49, being adjudged and certified came to have all the incidents and character of an unsecured debt payable by the liquidator to the Department; it was therefore governed by the provisions of Company Law and no other remedy or method to obtain satisfaction of the claim was available to the creditor.
In the appeal to this Court it was contended on behalf of the appellant that section 49E gave statutory power to Income tax Officer to set off a refundable amount against any tax remaining payable and that this power was not subject to any provision of any other law.
HELD:The Income Tax Officer was in error in applying section 49E and setting off the refund due to the respondent.
[683C D] The effect of sections 228 and 229 of the Companies Act, 1913, is, inter alia, that an unsecured creditor must prove his debts and all unsecured debts are to be paid part passu.
Once the claim of the Department has to be proved and is proved in liquidation proceedings, it 680 cannot, by exercising the right under section 49E get priority over the other unsecured creditors and thus defeat the very object of sections 228 and 229 of the Companies Act.
Furthermore, if there is an apparent conflict between two independant provisions of law, the special provision must prevail.
Section 49E is a general provision applicable to all assessees in all circumstances; sections 228 and 229 deal with proof of does and their payment in liquidation.
Section 49E can be reconciled with sections 228 and 229 by holding that section 49E applies when insolpency rules do not apply.
[682H 683D]
|
minal Appeal No. 264 of 1972.
Appeal by special leave from the judgment and order dated March 6, 1972 of the Bombay High Court at Bombay in Cr. A. No. 164 of 1972.
M. N. Sharma, for the appellant.
section B. Wad and Rine Sachthey, for the respondent.
The Judgment of the Court was delivered by DUA, J.
The appellant in this appeal by special leave was tried in the court of Session for Greater Bombay at Bombay for offences under section 467, under section 471 read with section 467 and under section 420, I.P.C.
According to the prosecution the appellant was running an octroi clearing agency under the name and style of "National Octroi Clearing Agency" at the Mulund check post.
He used to attend to certain transactions relating to the transport companies, one of those companies being the Montgomery Transport Company.
On December 16, 1962 a truck belonging to the said transport company bearing No. MPR 2147 arrived at the check post carrying a Depleix Machine to be delivered to Messrs Imperial Tobacco Company.
There were two drivers and one cleaner in the truck.
On being approached by them the appellant telephoned to manager Bakshi of the Transport Company to arrange for the payment of octroi which amounted to more than Rs. 8,000/ .
The Manager, Bakshi and Director, Inderjit Singh went to the Imperial Tobacco Company the following day and after getting Rs. 8,196/ /for the octroi reached the Mulund Check post.
The amount was handed over to the appellant in the presence of the driver.
Actually only Rs. 81 80/ were required for the octroi with the result that Rs. 16/ were paid back to Messrs Imperial Tobacco Company by means of a cheque.
During the investigation of another case arising out of an alleged forged receipt relating to octroi in respect of some imports by Messrs Pure Drinks Private.Ltd., it came to light that proper octroi had not been paid on December 17, 1968 in respect of the transaction in question in the present case.
The Assistant Assessor and Collector, Shri Karkhanis, after sending his superintendent Govind Charan to, the office of Messrs Imperial Tobacco Company he himself also visited the Company 's office and they both felt that the receipt for the payment of octroi held by the said Company was not genuine.
Having failed to trace the necessary relevant documents in the office files Shri Karkhanis lodged the complaint in February, 1969 and a case 3 L761Sup.
CI/73 550 was registered After preliminary enquiry under Ch.
XVIII Cr.
P.C. the appellant was committed for trial to the court of Session.
According to,the trial court the following points arose for determination : 1.
Whether it is proved that the receipt, Article A is a forged document ? 2.
Whether it is proved that it is the accused who forged that receipt with intent to commit fraud ? 3.
Whether it is proved that the accused used this receipt as genuine knowing it to be forged ? 4.
Whether it is proved that he cheated the Bombay Municipal Corporation, as alleged ? 5.
Whether it is proved that the accused cheated the Imperial Tobacco Co. of India Ltd., as alleged ?" The conclusions of the trial court on these points were "1.
In the affirmative.
Not proved.
In the affirmative, 4.
In the affirmative.
Not proved.
" The evidence in this case is mainly, if not wholly, circumstantial and about 20 witnesses were examined including a handwriting expert.
The trial court felt that the case required evaluation of the evidence of Bakshi (P.W. 4), Inderjit Singh (P.W. 18) and Handwriting Expert (P.W. 17).
Driver Balwant Singh was not examined in the case.
The trial court in a lengthy judgment exhaustively discussed the evidence of these witnesses.
It did not place implicit reliance either on Bakshi (P.W. 4) or on Inderjit Singh (P.W. 18) as, indeed in the testimony of 'both of them the trial court found partly reliable and partly unreliable statements.
The court did not feel inclined to hold that their evidence was wholly unreliable.
On evaluation of the evidence of the Handwriting Expert the trial court felt that the receipt in question could not necessarily be held to have been forged by the appellant.
After this ' observation follows the following passage in the judgment "I do not, however, feel that this earns an acquittal for him The direct charge regarding the forgery could be taken as not proved we will have however to weigh the other evidence for finding out whether he could have used the document which is necessarily a fogged docu ment, as a genuine document.
For this purpose we will have to appreciate the evidence of the two witnesses 551 about whom I have spoken quite a long time and we have also to appreciate the interval of time.
What exactly the accused did within that half an hour when he took the money and returned, will have to be surmised, particularly in the absence of categorical evidence showing that the disputed receipt is executed by him.
The evidence shows, it is a forged receipt.
It is not prepared at the counter.
We may not be sure in finding out as to who wrote it.
The accused may have had his associates it he himself has not written it.
Considering the way in which counters are stated to be working, considering the amount involved and the short time 'limit when the accused reappeared legitimate payment across the counter will have to be ruled out.
That is not even suggested on behalf of the accused.
He may have his own collaborators.
If we accept the version, which I do, then it was this receipt which was in the hands of the accused that was given over to the driver and from there onwards it reached the firm Messrs Imperial Tobacco Co. of India Ltd. I feel, the accused ought to be supposed to be aware that the real payment was made and what he carried could not be the real receipt.
It is for this reason that I am feeling that the charge of using a forged receipt knowing it to be forged could be brought home to him." The trial court thereafter dealt with the, charges of cheating and ultimately convicted the appellant for offence under sections 471 read with 467, I.P.C. and for an offence under section 420, I.P.C. Under the former he was sentenced to five, years ' rigorous imprisonment and a fine of Rs. 500/ with six months ' further rigorous imprisonment in case of default.
Under section 420 he was sentenced to rigorous imprisonment for two years.
The substantive sentences were directed to be concurrent.
The appeal to the High Court was dismissed in limine with one word "Dismissed".
Before us on appeal by special leave the short point but one of vital importance to the appellant requiring our decision is whether the High Court was justified on the facts and circumstances of this case in unceremoniously dismissing the appeal in limine with one word "Dismissed" without making a speaking order indicating the reasons for the dismissal.
The facts briefly stated by us and a close study of the lengthy judgment of the trial court quite clearly show that the appeal in the High Court did raise points which were not only arguable, but were also substantial requiring critical scrutiny and serious appraisal and evaluation of the prosecution evidence and the circumstances of the case.
The impor 552 tance of the opinion of the High Court on arguable points requiring consideration on appeal in that court when questions of fact or law are open to challenge by the appellant was emphasised more than 20 years ago by this Court in Mushtak Hussein vs The State of Bombay(1) when Mahajan J., (as he then was) observed at p. 820 : "With great respect we are however constrained to observe that it was not right for the High Court to have dismissed the appeal preferred by the appellant to that court summarily, as it certainly raised some arguable points which required consideration though we have not thought it fit to deal with all of them.
In cases which prima facie raise no arguable issue that course is, of course, justified, but this court would appreciate it if in arguable cases the summary rejection order gives some indication of the views of the High Court on the points raised.
Without the opinion of the High Court on such points in special leave petitions under article 136 of the Constitution this Court sometimes feels embarrassed if it has to deal with those matters, without the benefit of that opinion.
" Since then in a series of decisions (quite a number of them reported and several unreported) this Court has consistently drawn the attention of the High Courts to the eminent desirability of giving an indication of their views on the points raised in arguable cases in accordance with the legal position enunciated by this Court.
Such a course is normal in cases which raise fairly arguable questions of fact or law.
In one of the latest decisions of this Court in K. K. Jain vs State of Maharashtra(2) some of the earlier decisions were again noticed and it was considered necessary to repeat the emphasis laid on the necessity of recording reasons by the High Court for dismissing appeals raising questions which cannot be considered to be unsubstantial or not arguable.
In that decision it was reiterated, inter alia, that reasons prevailing with the High Court for dismissing the appeal, if recorded, would have been of valuable assistance to this Court in finally disposing of the appeal on merits.
Another advantage of recording such reasons.
is that the accused appellant who may not always be present in court would have the satisfaction of knowing from the judgment that the points appropriately arising for consideration in his case were actually argued and only considered by the High Court while dismissing his appeal.
This would, inter alia, tend to promote confidence of the parties concerned in our judicial process.
in the present case had the High Court recorded its reasons for dismissing the appeal it would have better enabled the appellant 's lawyer to consider the advisibility of appealing (1) ; (2) A.I.R. 1973 S.C. 243.
553 under article 136 of the Constitution and after filing the appeal would have afforded valuable assistance both to the counsel appearing in this Court and to us in the final disposal of the appeal without feeling the necessity of remanding the case to the High Court for re hearing.
The remand no doubt must result in further delay in the final disposal of the appellant 's appeal in the High Court, and this indeed is regrettable.
But in the absence of the opinion of the High Court which that Court was under the law expected to record we are left guessing about the line of reasoning the High Court would have adopted after appropriate scrutiny of the evidence on the record.
The appellant is entitled to have a proper decision on the points arising in his appeal by the High Court on due appraisal of the evidence in accordance with law.
The legal position on the point in question has been authoritatively settled and declared by this Court and the same has been frequently reiterated in its decisions.
The law reports are so full of them that it appears to us to be somewhat surprising that the counsel appearing in the appeal in the High Court Should have been unaware of it.
It, however, does seem that the attention of the High Court was not drawn to these decisions, for had that Court been apprised of the law as authoritatively declared by this Court, it is inconceivable ,that the present appeal would still have been dismissed without indicating the reasons in support of it.
Had the High Court recorded reasons the delay necessitated by this remand could have been avoided.
But in the circumstances we have no option but, to allow the appeal and remand ' the case to the High Court for rehearing and deciding the appeal after considering the points raised and recording its reasons in accordance with law.
We have taken care not to express any opinion on the merits of the case either way.
It is hoped that this appeal would now be disposed of by ,the High Court expeditiously and without avoidable delay.
section C. Appeal allowed.
| The assessee, a trading company, paid wealth tax and sought to, deduct it as a business expense under section 10(1) and section 10(2) (xv) of the Income Tax Act, 1922, in computing its assessable incomes from business for the purpose of the Income Tax Act.
The High Court held against the assessee following the decision of this Court in Travancore Titanium Product Ltd. vs C.I.T., ; The test adopted by this Court in the Travancore Titanium case was that "to be a permissible deduction, there must be a direct and intimate connection between the expenditure and the business, that is, between the expenditure and the character of the assessee as a trader, and not as an owner of the assets, even if they are the assets of the business".
Allowing the appeal to this Court, HELD : The Court is unanimous that the test laid down in the decision in the Travancore Titanium case should be modified.
[20A, 39B] (Per S.M. Sikri, C. J., A. N. Grover, A. N. Ray and D. G. Palekar, JJ.) : (1) Certain important aspects of the question were not brought to the attention of this Court when the earlier case was decided.
if that decision is modified as erroneous, it is not likely to cause any public inconvenience hardship or mischief; and numerous assessees would be affected by the decision.
[20A B] Keshav Mills, Co. Ltd. vs C.I.T. ; , 922, followed.
(2) There is no doubt that in one sense when rates and taxes on property are paid by a trader he pays them as owner or occupier, because taxes are either on possession of property or on its ownership.
But when a person has the dual capacity of a trader cum owner, and he pays tax in respect of property which is used for the purpose of trade, the payment must be taken to be in the capacity of a trader according to ordinary commercial principles.
[25A B, C D] Moffatt vs Webb, ; applied (Not cited in the Travancore Titanium case.
Smith vs Lion Brewery Company, , Usher 's Wiltshire Brewery Ltd. vs Bruce, , Harrods (Buenos Ayres) Ltd. vs TaylorGooby, and observations of Lord Davey in Strong and Co. Romsey Ltd, case ; , referred to.
(3) In the case of a trading company all the assets are owned and the liabilities are incurred for the purpose of trading, as outlined in its memorandum of association.
If all the assets are owned and used for the purpose of trade, the net wealth would also be owned and used for the ,purpose of trade.
The net wealth is as much an instrument of trade as the capital value of assets.
Therefore,.the test laid down in the earlier case should be qualified, by stating that, if the expenditure is I aid out by the 16 assessee as owner cum trader, and the expenditure is really incidental to the carrying on of his business, it must be treated as having bean laid out by him as a trader and as incidental to his business.
[29F H, 3OA C] (4) It may be difficult for the Revenue to allow the deduction of debts, and non business assets and debts.
But the wealth tax return form itself requires the assessee to show what are business assets and liabilities and what are the non business assets and liabilities.
At any rate, it should not be difficult to evolve a principle or frame statutory rules to find out the proportion of the tax which is 'really incidental to the carrying on of the trade.
[30C E] (Per M. H. Beg, J.) : (1) One of the tests laid down in Keshav Mills co 's case ([1965]/2 S.C.R.908), for deciding whether a previous erroneous view should be set right by this Court, is whether any Possible advantage to public resulting from doing so would be outweighed by the mischief or harm a revision may cause.
[38E F] The Wealth Tax Act was not intended to strike at or check expansion of commercial activities by either individuals or companies.
Its underlying purpose is the removal of disparities of individual or personal wealth and not injury to trade.
The interpretation placed in the Travancore Titanium case ([1966] 3 S.C.R. 321) seems to penalise mere expansion of business and trade without serving the underlying purpose of wealth tax.
Therefore, a revision of opinion does not involve any such mischief or Such injury to the public interest as would stand in the way of correcting an erroneous view.
[38G H, 39A B] (2) The error which crept into the Travancore Titanium decision could be traced to an application of the criterion stated by the Lord Chancellor in Strong and Co. of Romsey vs Woodfield ; , that if.
the expenses fall on the trader in some character other than that of a trader, they could not be deducted in computing profits.
But in the same case, another Law Lord laid down a somewhat different test that the payment to be deductible must have been made for the purpose of earning profits.
[30G H, 31A B] (3) Liabilities incurred by a trader to pay damages for injury to his customer due to his personal neglect in maintaining his premises, even though the premises were used for trade, could be looked upon as outside the course of trading altogether even if they arise out of commercial activity or result from something connected with or meant to serve a commercial purpose.
But in Strong and co. 's case the negligence which resulted in payment of damages, for which the deduction was claimed, was that of servants employed as an ordinary incident of trading, so that, the master was only vicariously liable; and the language used by the Lord Chancellor in that case covers more than what could be attributed to the trade man 's own personal wrongs.
[31B E] (4) In later English cases the test adopted is whether the expenses sought to deducted 'wholly or exclusively laid out for the purpose of earning profits.
[31F] Smith vs Lion Brewery Company Limited, ; Usher 's Wiltshire Brewery Ltd. vs Bruce ; Atherton vs British Insulted and Halsby Cables Ltd., ; Margan vs Tate and Lyle Ltd., , referred to.
Rushden Hell Co. Ltd, vs Commissioner of Inland Revenue, and Smith 's Potato Estates Ltd. vs Bolland, 30 T.C. 267 explained 17 Where profits, the net gains of business, determined after making all permissible deductions.
are taxed, the disbursements to meet such taxes cannot be deducted.
But, when the tax 'was levied on capital, or assets used for the purpose of earning those profits, it was a permissible de duction in calculating profits.
[32G H] Harrods (Buenos Ayres) Ltd. vs ' Taylor Gooby, , referred to.
(6) The principle, that tax paid by an assessee on property used by him to earn income is deductible in computing the income for paying income tax, was also laid down in Moffatt vs Webb ; , which was not cited before this Court when the Travancore Titanum case was argued.[34A B] (7) The test of trading character when incurring an expense for which deduction is claimed can be utilised usefully only in cases where the question is whether a payment was gratuitous or unnecessary or not made for a bona fide commercial purpose or connected more with some ulterior object really failing outside the normal sphere or regular course of commerce, such as the compounding of an offence even if committed while trading; but this could not be so in cases of payment of taxes[34D F] J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs Commissioner of Income Tax, A.I.R. 1957 All. 513, referred to; (8) There is no accepted commercial practice or trading principle according to which wealth tax could not be deducted in the computation of profits under section 10(i) and (ii) of the Income Tax Act.
Except the observation in the Travancore Titanium case, all the other cases indicate that commercial practice and trading principles 'also warrant such deductions of tax on capital assets used wholly and exclusively for carrying on trade or for earning profits.
Deductions of taxes on net profits may not be permited, but those imposed on net assets or wealth, used exclusively for making profits, can be deducted in, computing income for purposes of income tax.
Moreover, whatever commercial practice or trading principles may imply or import, they could not alter the meaning of statutory provisions.
All that the Language of section 10(2)(xv) requires, for claiming its benefit, is proof of direct causal connection between an outgoing and the commercial purpose which necessitated it.
To lay down that it is the causal connection between the payment of tax and that part of the net wealth which is used wholly and exclusively for trade, and not the mere character or capacity for the possession of which the tax is demanded, which determines whether it is an allowable deduction or not, under section 10(2) (xv), nothing more than giving effect to the plain and literal meaning of a provision of a taxing statute.
[35A B, 35B C] (9) To exclude from the purview of section 10(2)(xv) wealth tax simply because it was a tax on assets or net wealth paid by its owner so as to reduce his wealth, is to bring in the misleading test of either of capacity of the owner for the possession of which, or the purpose for which, the wealth tax may be demanded.
instead of the inevitable need and the purpose of the trader in paying the tax, as relevant matters.
[35D F] (10) Wealth tax is imposed on net wealth of of assessees who are persons both natural and artificial.
In the case of an artificial or juristic person like a company, it is difficult to separate the purpose of the Juristic "persona" which is certainly commercial, from the character of the "persona" itself.
Even as regards other traders that part of the tax which falls on assets used exclusively for I trade could 'be really ascribed 18 only to a trading character.
To the extent it is a tax on property used for earning profits it must enter into a computation of profits from trading.
Therefore, nothing less than express, statutory provision would justify a denial of the right to a deduction which the language of section 10(2) (xv) confers upon assessees.
[36D F] (11) The Court is not concerned with any difficulty in separating that pail of the tax which is levied on any part of the net wealth, used wholly or exclusively for trade, from the rest of it.
The Court is concerned only with the interpretation of section 10(2)(xv) and not with any difficulty which may arise in actually computing the deductible amount.
Moreover, since net wealth is an amount by which an aggregation of all the assets exceeds all the debts there can be no intractable difficulty in calculating what part of the net Wealth is used for trade or business of an a sessee and what is not, an aggregation being collection of items n being collection of items which can be separated, and not a mixture whose ingredients became inseparable.
Further, the wealth tax return form divides wealth under two heads, one of business assets and another of other assets, showing that the Wealth Tax Act its itself makes that part of the net wealth separable which is used wholly and 'exclusively for trade from the reminder of it.
If this can be done, there is no difficulty in separating that part of the wealth tax which could be deducted under section 10(2)(xv) of the Income Tax Act.
[37D G] Assuming there is some difficulty the principle involved or.
the meaning of the relevant previsions will not be affected thereby.
|
ivil Appeal Nos.
2349 61 of 1988.
From the order dated 8.7.1987 of the Customs Excise and Gold Control Appellate Tribunal, New Delhi in Appeal Nos.
E/l583 to l589/ 86 A and 1533, 1521, 1528, 1529 31/1986 A and order No. 491 to 503 of 1987.
A.K. Ganguli, Mrs. Indu Malhotra and Mrs. Sushma Suri for the Appellant.
Soli J. Sorabji, M. Chandrasekharan Mrs. V.J. Francis and N.M. Popli for the Respondent.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals are under Section 35L,(b) of the Central Excises & Salt Act, 1944 (hereinafter called 'the Act ') directed against the decision of the Customs Excise (Gold) Control Appellate Tribunal, New Delhi, (hereinafter called 'the CEGAT ').
The respondent M/s. Indian oxygen Ltd., Visakhapatnam, are manufacturers of dissolved acetylene gas and campressed oxygen gas (hereinafter called 'the gases ').
The respondent was supplying these gases in cylinders at their factory gate.
For taking delivery of these gases, some consumers/customers used to bring their own cylinders and take the delivery, while others used to have the delivery in the cylinders supplied by the respondent.
For the purpose of such supply of cylinders, certain rentals were charged by the respondent and also to ensure that these cylinders are returned properly, certain amount of deposit used to be taken from the customers.
On those deposits notional interest @ 18% per annum was calculated.
These two amounts with which we are concerned, namely, the rentals of the cylinders and the notional interest earned on the deposit of cylinders, are the subject matters of the dispute herein.
Whether these two amounts were includible in the value under Section 4 of the Act, is the question.
The revenue 's case is that the notional income on deposit of 764 cylinders and the rental are part of the asessable value and, hence, should be included in computing the assessable value.
The respondent, however, disputed that.
They had neither included such rentals nor the interest received from the buyers in the price list for the assessment.
Therefore, the revenue issued show cause notices to the respondent.
In their reply the respondent stated that the deposits from buyers were only to ensure return of the gas clinders from the customers.
The Asstt.
Collector Central Excise, Visakhapatnam, by an order dated 3.6.1965 held that the respondent had to pay excise duty on the interest earned @ 18% during the relevant period.
He further held that since the respondent had suppressed this fact from the revenue, in the past 5 years, under Rule 8 read with Section 11A of the Act, these are includible.
He also included the rentals of these cylinders in the value.
On an appeal, the Collector of Central Excise, Madras, upheld the said order with certain modifications.
Dissatisfied with the aforesaid, the respondents appealed to the CEGAT.
In its order under appeal, the Tribunal observed, inter alia, as follows: "As regards charge on account of rental for the cylinders and the interest which accrues on account of deposit receipts for the supply of gases in returnable cylinders, we are not persuaded that either of these charges is related to the cost of manufacture of the goods as such." The Tribunal, therefore, under Section 4 deleted from the value, rentals for the cylinders and interest which accrued on account of deposit receipts for the supply of gases.
Hence, this appeal by the Collector.
It is well settled that the levy under the Act, is on the manufacture.
Under Section 4(1)(a) of the Act, excise duty is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this Section, be deemed to be the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale.
Here the sale is of the gases.
The levy is on the manufacture of gases and the excisable goods are these gases.
765 The scope of Section 4 has been explained by this Court in Union of India & ors.
vs Bombay Tyre International Ltd., ; as well as the ramifications thereof in Asstt.
Collector of Central Excise vs Madras Rubber Factory Ltd., [19861 Supp SCC 751.
In the light of the aforesaid principles it has to be borne in mind that the supply of gas cylinders is ancillary to the supply of gases but it is strictly not incidental thereto because there are classes of persons who can take delivery of these gases without supply of cylinders by the respondent and in those cases no question of charging rental nor interest on those deposits for cylinders, would arise.
It is true that the gas being a commodity of peculiar nature, had to be delivered in cylinders but these cylinders might be supplied either by the supplier as an ancillary activity or brought by the consumer or purchasers at their own risk and cost.
For purchasers taking it in their own cylinders supplied by them, there was no charge for them.
This is not an activity for the manufacture of gases.
This is ancillary to it but not incidental.
Any income either in the shape of interest on deposits, notional or real, may be earned on the deposit for the safe return of cylinders, or any rental would be though ancillary but would not be the price for the manufacture.
These might be profits or gains, if any, of any ancillary or allied venture.
If that is the true position, then on the principle under Section 4(1)(a) of the Act, the Tribunal was right in excluding these two amounts while computing the value of the excisable goods.
Mr. A.K. Ganguli, learned counsel appearing for the revenue, sought to urge before us that there are two different classes of buyers, one class of such buyers was who used to bring their own cylinders and the others used to get their supplies through the cylinders of the suppliers.
According to him, different rates for these two classes of buyers.
, in fact, constitute two different markets and are permissible.
This, according to him, is contemplated under the first proviso to Section 4(1)(a) of the Act, which reads as follows: "(i) where, in accordance with the normal practice of the wholesale trade in such goods, such goods are sold by the assessee at different prices to different classes of buyers (not being related persons) each such price shall, subject to the existence of the other circumstances specified in clause (a), be deemed to be the normal price of such goods in relation to each such class of buyers. ' There may be different classes of buyers for different classes of goods.
Section 4(1)(a) of the Act emphasises that if the goods is of the 766 same type, the prices should also be the same.
The proviso to the said Section postulates that where in accordance with normal practice such goods, namely, the gases are sold to different classes of buyers then different prices may be charged.
If gases had been sold to different classes of buyers at different rates, it is possible that there might be different markets for the same.
But here the charges like rentals for the cylinders and the notional interest income, are for ancillary or allied services and that is not an activity of manufacture.
Hence, Section 4(1)(a) proviso can be of no avail to the renenue.
It is a case of two different supplies.
One is supply of gases and the other is incidental supply of cylinders for rent.
In that view of the matter, in our opinion, the Tribunal was right in the view it took.
The interest, notional or real, accruing on deposits for the safe return of cylinders as well as the rentals would not constitute part of the assessable value.
In the aforesaid view of the matter the order of the Tribunal needs no interference.
The appeals, accordingly, fail and are dismissed There will be no order as to costs.
N.V.K. Appeals dismissed.
| The respondent firm are manufacturers of dissolved acetylene gas and compressed oxygen gas.
They were supplying these gases in cylinders at their factory gate.
For taking delivery some consumers/ customers used to bring their own cylinders and take the delivery.
Others, used to have the delivery in the cylinders supplied by the respondent firm.
For the purpose of such supply of cylinders certain rentals were charged by the firm, and also to ensure that these cylinders are returned, a certain amount as deposit used to be taken from the customers.
On these deposits notional interest at 18 percent per annum was calculated.
The Central Excise Authorities issued show cause notices to the respondent on the ground that the notional income on the deposit of cylinders and the rental are part of the assessable value, and hence should be included in computing the assessable value.
In their reply the respondent stated that the deposits from the buyers were only to ensure return of the gas cylinders from the customers.
The Assistant Collector by his order dated 3rd June, 1965 held that the respondent had to pay excise duty on the interest earned at 18% during the relevant period, and that as the respondent had suppressed this fact from the revenue during the past 5 years, the amount was includible and recoverable under Rule 8 read with Section 11A of the .
He also included the rentals of the cylinders in the value.
In appeal the Collector upheld the order of the Assistant Collector but with certain modifications.
762 The respondent appealed to the Central Excise and Gold Control Appellate Tribunal, which allowed the appeal, and held that the charge on account of rentals for the cylinders and the interest which accrued on the deposit for the cylinder are not relatable to the cost of manufacture of the goods, and therefore under Section 4 deleted from the value, rentals for the cylinders and the interest on the deposit.
In the appeals to this Court it was contended on behalf of the Revenue that there are two different classes of buyers, one class who brings their own cylinders, and the others who get their supply through the cylinders of the suppliers, and that different rates for these two classes of buyers constitute two different markets and are contemplated and permissible, under the first proviso to Section 4(1)(a) of the Act.
Dismissing the Appeals, ^ HELD: 1.
Section 4(1)(a) proviso can be of no avail to the Revenue.
There may be different classes of buyers for different classes of goods.
In the instant case, if the respondent company sold the gases to different classes of buyers then different prices may be charged.
If the gases had been sold to different classes of buyers at different rates, it is possible that there might be different markets for the same.
The charges like rental for the cylinders and the notional interest income are for ancillary or allied services and that is not an activity of manufacture.
[766A B] Union of India & Ors.
vs Bombay Tyre International Ltd., ; and Asstt.
Collector of Central Excise vs Madras Rubber Factory Ltd., [1986] Supp SCC 751, referred to. 2.
It is well settled that levy under the Central Excises Salt Act is on manufacture.
In the instant case, the sale is of gases.
The levy is on the manufacture of gases and the excisable goods are these gases.
[764G,H] 3.
Gas being a commodity of peculiar nature, has to be delivered by cylinders, but these cylinders might be supplied either by the supplier as an ancillary activity or brought by the consumers or purchasers at their own risk and cost.
For purchasers taking it in their own cylinders supplied by them, there was no charge for them.
This is not an activity for the manufacture of gases.
This is ancillary to it but not incidental.
[765C] In the instant case, there are two different supplies.
One is supply 763 of gases and the other is an incidental supply of cylinders on rent.
The interest notional or real accruing on deposits for the safe return of cylinders as well as the rental would not constitute part of the assessable value.
The Tribunal was right in the view it took.
[766C D]
|
minal Appeals Nos.
30 34 of 1964.
Appeals by special leave from the judgment and order dated October 22, 1963 of the Allahabad High Court in Criminal Appeals Nos. 77 and 78 of 1963.
M. section K. Sastri, for the appellant (in Cr. A. No. 30 of 1964).
I. M. Lall and Ganpat Rai, for the appellants (in Cr. A. No. 31 of 1964).
V. 'Y. Sawhney, for the appellants (in Cr. A. Nos.
32 34/64).
0. P. Rana, Atiqur Pehman and C. P. Lal, for the res pondents May, 4.
The Judgment of the Court delivered by GAJENDRAGADKAR, C. J. Forty person were charged with having committed several offences the principal one of which was under section 302 read with section 149 of the Indian Penal Code.
The case against these persons was tried by the first Additional Sessions judge at Jhansi.
The other charges framed against them were under section 307 / 149, 201/ 149 & SI 1, 395, 396, 149 & 449, 1.
The learned trial Judge held that none of the char es had been proved against five of the accused persons. '.He also found that the charges under sections 395 & 396 were not proved against any of them.
In regard to the remaining charges.
he found that 35 out of 40 accused persons were guilty.
For the major offence charged under section 302/149, he sentenced 10 accused persons to death and 25 others to imprisonment for life.
He also directed that the said accused persons should undergo different terms of imprisonment for the remaining offences; but for the purpose of the present appeals, it is unnecessary to refer to them.
136 After the learned trial Judge pronounced his judgment on the 31st December 1962, the 35 accused persons who had been convicted by him preferred three appeals between them before the Allababad High Court, whereas the sentences of death imposed on 10 accused persons by the learned trial Judge were submitted to the said High Court for confirmation.
The High Court has held that 7 out of the 35 appellants before it were not proved to have committed any of the offences, and so, they were ordered to be acquitted.
In regard to the remaining 28 appellants, the High Court has confirmed the orders of conviction and sentence imposed on them by the trial Court.
In the result, the reference made to the High Court for confirmation of the sentences of death imposed on the 10 accused persons by the trial Court was allowed.
It is against this decision of the High Court that the present five appeals have been brought to this Court by special leave, and the number of accused persons who have brought these appeals before us is 16.
Before dealing with the points raised in these appeals, it is necessary to set out very briefly the relevant facts on which the prosecution case against the appellants and their co accused substantially rests.
The incident which has given rise to the present criminal proceedings took place on the 29th November, 1961 in village Bilati Khet in the district of Jhansi at about 8 a.m. It is clear that this village is cursed with keen rivalry and enmity between two factionsOne group was led by Gayadin who and four other members of his family were murdered on the said date.
All these murders were committed, according to the prosecution, by the members of the rival faction amongst whom are included the present appellants before us.
Criminal proceedings have continued between the parties for several years almost without interruption.
The rival group was led by Laxmi Prasad alias Laxmi Narain who is one of the appellants in this Court.
In the last election of the village Panchayat Laxmi Prasad succeeded as Pradhan of the village and defeated the candidate set up by Gayadin.
On the 28th November, 1961, a boundary dispute led to an incident between the members of the two groups.
This dispute related to two fields one of which belonged to Gayadin and 137 the other to Laxmi Prasad.
Attempts were made to settle this dispute by arbitration, but they failed.
It appears that Laxmi Prasad and the members of his group did not agree to submit to any arbitration and they left the meeting called for the purpose threatening that they would see that the matter in dispute between them was settled the next day.
It is on this grim note that the incident of the 28th November ended.
On the 29th November in the early morning, Bahoran, one of the sons of Gayadin, had gone out to ease himself.
He was then carrying a pharsa.
In the field he met Laxmi Prasad who attacked him with a lathi.
Bahoran retaliated this attack with his own pharsa and in the scuffle the nose of Laxmi Prasad was injured and it began to bleed; in fact, a part of the nose was actually cut.
Infuriated by this injury, Laxmi Prasad went to his house and collected the whole crowd belonging to his faction.
Bahoran eased himself and returned to his house.
Soon there after he washed his hands and went to the north where his father, brothers and other relations were warming themselves by fire.
At that stage, Ram Prasad and Dayaram rushed to the scene and informed them that Laxmi Prasad and his companions were all armed with guns, spears, swords, gandasas and lathis and were proceeding to the house of Gayadin determined to kill all the members of Gayadin 's family.
On receiving this alarming information, Gavadin and his friends and relatives thought of proceeding towards the house of Gayadin.
About that time, Laxmi Prasad and his companions reached near the house of Gayadin whereon Laxmi Prasad fired a gun.
Bhagwati was carrying a large quantity of cartridges in the folds of his dhoti and was instigating Laxmi Prasad to fire at everyone sitting near the fire to the north of the house and to exterminate the family of Gayadin.
On hearing this, everyone of the group sitting near the fire rushed into the house and closed the doors.
The assailants then broke open the doors of the house and entered the sehan of Gayadin.
Inside the house the assailants pursued Gayadin on the upper storey and killed him there.
Brindaban, Radha Saran and Dayaram were hiding in different rooms of the house; the doors of these rooms 138 were broken open and all the three of them were shot dead.
Bahoran and Shiroman Singh, both sons of Gayadin, escaped through the tiled roof into the cattleshed of Harbans which is situated towards the south east of Gayadin 's house.
Shiroman concealed himself in the godown while Bahoran concealed himself in the room in the upper storey where chaff had been stored.
After killing Gayadin, Brindaban, Radha Saran and Dayaram, the assailants mercilessly dragged the bodies of the victims out of the house of Gayadin and began their search for Bahoran and other male inmates of the house.
When the dead bodies were thus being dragged, Gori Dulaiya wife of Gayadin rushed after the assailants and implored them not to take the dead bodies away.
One of the assailants, however, struck her with a stick and she was forced to retrace her steps.
The dead bodies were then dragged towards the east of the house.
On reaching the cattleshed of Harbans, the assailants broke open the outer door of the house and entered into it.
They then injured Harbans and managed to discover Shiroman Singh who was promptly killed.
The five dead bodies were then taken into the field of Bhagwati.
In the field two big piles of cowdung cakes were prepared.
On one of the piles the bodies of Gayadin, Brindaban, Radha Saran and Davaram were placed and on the other Shiroman Singh 's body was put.
Kerosene oil was sprinkled on the bodies and fire was set to them.
That, in brief, is the story of the gruesome murders which have given rise to the present proceedings.
When the assailants had left the house of Gayadin dragging the dead bodies with them.
Rahoran came out of hi,, hiding place and rushed to the Police Station Krichh and lodged the First Information Report at about 11 o 'clock.
In this report,. .he gave all the material details in regard to the commission.of the offence and named the 35 persons as the assailants. .In fact, the first committal order passed on the 31st March,. .1962 in the present proceedings referred to 35 assailants.
Later.
five more persons were added to the list of assailants by the committal order made on the 14th May, 1962.
On receiving the first information report, the police party rushed to the scene of occurrence on cycles and they put off the burning fire and took out the half burnt 139 bodies of the five murdered persons.
These bodies were identified aid were sent for post mortem examination.
The injured persons Harbans, Ram Prasad, Mansa Ram and Smt.
Gori Dulaiya were sent for medical examination.
Post mortem examination was then held on the dead bodies and statements of witnesses were recorded in the course of investigation.
That led to the several charges framed against 40 persons and ultimately their trial in the Court of the First Additional Sessions Judge at Jhansi.
The case for the prosecution is sought to be established by the testimony of 12 eye witnesses.
All the accused persons denied that they had anything to do with the offences charged.
Their main contention was that a false case had been made against them and it was attempted to be supported by evidence of witnesses who were hostile to them and who had no regard for cruth.
The trial Judge, in substance.
rejected the defence plea and accepted the prosecution evi dence.
except in the case of five accused persons.
In appeal, several contentions were raised on behalf of the appellants, but they were rejected and in the result, the findings of the trial Court against the appellants were confirmed.
The High Court, however, reversed the conclusion of the trial Court in respect of 7 accused persons with whose cases we are not concerned in the present appeals.
The 12 persons who gave direct evidence against the appellants and their co accused persons are: Bahoran P.W. 1; Basanti Lal P.W.2; Rameshwar Dayal P.W.3; Prabhu Dayal P.W.5; Pancham P.W.6: Swarup Singh P.W.14; Kasturi P.W.15; Thakur Das P.W.16.
Shyamlal P.W.17; Harbans P.W.18; Dropadi P.W.19; and Kishori Lal P.W.20.
The High Court has critically examined the evidence given by these witnesses and has held that the evidence of Bahoran and Prabhu Dayal may be left out of account as it appeared to the High Court that the said evidence suffered from material infirmities.
The evidence given by the remaining 10 witnesses has, however, been accepted by the High Court as substantially true and correct.
Jr. dealing with this oral evidence, the High Court took into account the fact that most of these witnesses belonged to the faction of Gayadin and must, therefore, be regarded 140 as partisan.
It also considered another feature which characterised the evidence of all the witnesses and that was that they gave their account of the incident substantially in similar terms and did not assign particular parts in respect of overt acts to any of the assailants except Laxmi Prasad accused No. 1.
The approach adopted by the High Court shows that it decided to confirm the conviction of the accused persons against whom four or more witnesses gave a consistent account, and it is by the application of this test that 7 accused persons have been acquitted.
As to the sentence, the High Court realised that 10 persons had been ordered to be hanged and that it could not be said about all of them, except Laxmi Prasad, that they had actually fired a gun and caused the death of any of the five victims.
Even so, the High Court held that since they all formed members of the unlawful assembly the common object of which was to exterminate the male members of the family of Gayadin, they were all equally guilty of murder under s.302,/149, I.P.C. and it would not, therefore, be unreasonable to impose the penalty of death on such of the assailants is were shown to have carried guns in their hands on that occasion.
That is how the High Court upheld the orders of conviction passed against 28 persons who had brought their cases before it in appeal and confirmed the sentences of death imposed on I 0 of them.
In these appeals, Mr. Sawhney who has addressed the principal argument before us on behalf of the appellants, has urged that the High Court has failed in discharging its duty properly when it dealt with the appeals brought before it by the appellants and decided to confirm the sentences of death imposed on 10 of the accused persons.
In support of this argument, Mr. Sawhney has relied upon the decision of this Court in the case of Jumman & Ors.
vs The State of Punjab.
(1) In that case, this Court has emphasised the fact that the mandatory requirement prescribed by s.374 of the Code of Criminal Procedure shows that in dealing with reference for confirmation of death sentence imposed by the Sessions Judge, the High Court has to consider the entire case for itself before deciding whether the sentence of death (1) A.T.R. I957 S.C. 469 141 should be confirmed or not.
Section 374 provides that the sentence of death shall not be executed unless it is confirmed by the High Court.
In other words, the sentence of death imposed by the Court of Sessions is not effective until and unless it is confirmed by the High Court.
It is only when the High Court confirms the sentence of death that it is capable of execution.
That is why this Court emphasised the solemnity of the Proceedings brought before the High Court under s.374, and it pointed out that under s.375, the High Court is given the power to admit additional evidence if it thinks necessary to do so.
Proceedings brought before the High Court for confirmation of a death sentence give a right to the condemned prisoner to be heard on the merits and to require the High Court to consider the matter for itself without being influenced by the conclusions recorded by the Court of Sessions.
The conclusions of the High Court on the merits in such proceedings must be independent,.
and so, the High Court inevitably has to go into the whole of the evidence.
consider all the pros and cons of the case and satisfy itself that the offence charged under section 302, I.P.C. is established beyond reasonable doubt and the sentence of death submitted to it for its confirmation is fully justified.
Mr. Sawhney contends that this essential requirement of s.374 has not been complied with by the High Court when it dealt with the appeals brought before it in the present proceedings.
He also adds that since 10 persons have been ordered to be hanged, that itself is a reason why this Court should examine the evidence for itself and not hold that the appellants are concluded by concurrent findings of fact recorded by the Court below.
We are not impressed by this argument.
It is perfectly true that, in a murder trial when an accused person stands charged with the commission of an offence punishable under s.302, he stands the risk of being subjected to the highest penalty prescribed by the Indian Penal Code; and naturally judicial approach in dealing with such cases has to be cautious, circumspect and careful.
In dealing with such appeals or reference proceedings where the question of con firming a death sentence is involved, the High Court has also 142 to deal with the matter carefully and to examine all relevant and material circumstances before upholding the conviction and confirming the sentence of death.
All arguments urged by the appellants and all material infirmities pressed before the High Court on their behalf must be scrupulously examined and considered be fore a final decision is reached.
The fact that 10. persons had been ordered to be hanged by the trial Judge necessarily imposed a more serious and onerous res ponsibility on the High Court in dealing with the present appeals.
We have carefully considered the judgment delivered by the High Court in these appeals and we are satisfied that the criticism made by Mr. Sawhney that the High Court did not bestow due care and attention on the points involved in the case, cannot be regarded as well founded, The judgment shows that the arguments which were urged on behalf of the appellants, have been carefully examined, the evidence given by the respective witnesses has been accurately summarised and the infirmities in the said evidence closely scrutinised.
The relevance of the argument of the admitted enmity between the two factions of the village has been taken into account and the common features of the evidence tendered by the witnesses have not been overlooked.
After taking into account all the points which were urged before the High Court the High Court adopted what it thought to be a safe test before acting on direct evidence.
It has held that unless at least four witnesses are shown to have given a consistent account against any of the appellants.
the case against them cannot be said to have been proved beyond reasonable doubt.
Having regard to the manner in which the High Court has dealt with the appeals brought before it, we are not prepared to hold that the general criticism made by Mr. Sawhney against the judgment of the High Court can be accepted.
In this connection, Mr. Sawhney strongly relied on the fact that the High Court has not considered one important point in favour of the defence, and that is in to the failure of the prosecution to tender three material witnesses whose names had been shown in the witness list in the calendar sent by the committing Magistrate to the trial Judge.
These witnesses are: Ram Prasad, Mansa Ram and 143 Rani Dulhan.
It appears that this contention was raised by the defence before the Trial Court and had been rejected by it.
The Government counsel appearing for the prosecution had made an application to the trial Court expressing his inability to examine the three witnesses for the reason that Ram Prasad and Mansa Ram had been won over by the defence and Rani Dulhan, the widow of one of the victims, was suffering from such mental shock that she was unable to depose coherently.
After this application was made and granted, the learned trial Judge did not insist upon the prosecution examining the three said witnesses.
Then followed three other applications by the defence (Nos. 247B, 248B and 249B) in which it was urged that the said three witnesses should be examined under s.540, Cr.
The learned trial Judge rejected these applications, and so, the case concluded without the said three witnesses giving evidence before the trial Court.
In rejecting the applica tions made by the defence, the learned Judge has carefully examined the validity of the defence contention that the evidence given by the said witnesses before the Committing Magistrate showed that they were material witnesses and the plea raised by them that the absence of their evidence would cause prejudice to the defence, and has held that the evidence which the said three witnesses may give was not essential for a just decision of the case and that it was unreasonable to suggest that the prosecution had an oblique moive in supressing their evidence.
This part of the judg ment clearly shows that all relevant aspects of the matter were examined by the trial Judge before he refused to exercise his powers under s.540, Cr.
It is obvious that this contention was not urged before the High Court, and so, we find no discussion of the point in the judgment of the High Court.
We are not prepared to accept Mr. Sawhney 's argument that even if this point was not raised by the appellants before the High Court, they are entitled to ask us to consider that point having regard to the fact that 10 persons have been ordered to be hanged.
It may be conceded that if a point of fact which plainly arises on the record, or a point of law which is relevant and material and can be argued with 144 out any further evidence being taken, was urged before the trial Court and after it was rejected by it was not repeated before the High Court, it may, in a proper case, be permis sible to the appellants to ask this Court to consider that point in an appeal under article 136 of the Constitution; afterall in criminal proceedings of this character where sentences of death are imposed on the appellants, it may not be appropriate to refuse to consider relevant and material pleas of fact and law only on the ground that they were not urged before the High Court.
If it is shown that the pleas were actually urged before the High Court and had not been considered by it, then, of course, the party is entitled as a matter of right to obtain a decision on those pleas from this Court.
But even otherwise no hard and fast rule can be laid down prohibiting such pleas being raised in appeals under article 136.
In the present case, however, we are satisfied that there is no substance in the contention which Mr. Sawhney seeks to raise before us.
It is not unknown that where serious offences like the present are committed and a large number of accused persons are tried, attempts are made either to terrorise or win over prosecution witnesses, and if the prosecutor honestly and bonafide believes that some of his witnesses have been won over, it would be unreasonable to insist that he must tender such witnesses before the Court.
It is undoubtedly the duty of the prosecution to lay before the Court all material evidence available to it which is necessary for unfolding its case; but it would be unsound to lay down is a general rule that every witness must be exa mined even though his evidence may not be very material or even if it is known that he has been won over or terrorised.
In such a case, it is always open to the defence to examine such witnesses is their witnesses and the Court can also call such witnesses in the box in the interest of justice under s.540, Cr.
As we have already seen, the defence did not examine these witnesses and the Court, after due deliberation, refused to exercise its power under s.540, Cr.
That is one aspect of the matter which we have to take into account.
145 The other aspect of the matter is that the trial Court has found that the evidence which these witnesses would have given was not essential for a just decision of the case.
What these witnesses might have said in the Sessions Court was judged by the trial Court in the light of their previous statements already recorded, and that is a finding which is purely one of fact.
If this finding was not challenged by the appellants before the High Court, we do not see how they can claim to argue before us now that the said finding is erroneous.
Besides, so far as Rani Dulhan is concerned, it seems to us utterly unreasonable to insist that before per mitting the prosecutor not to examine her, evidence should have been led to show that she was suffering from such mental shock that she was unable to give a coherent account of the tragic events that happened on that fateful morning.
One has merely to recall the fact that five male members of her family were butchered to death by the assailants to realise that the prosecutor 's statement that she was mentally unbalanced must be true.
Then, as to Ram Prasad and Mansa Ram having been won over by the defence, that again is a matter on which the trial Court appears to have been satisfied; otherwise it would have readily acceded to the request of the defence to exercise its powers under section 540.
We are inclined to think that it is because this part of the defence contention was felt to be inarguable that the Advocate for the appellants did not raise this point before the Court.
Therefore, we are not prepared to allow Mr. Sawhney to take us through the evidence in the case on the ground that one important contention raised by the defence has not been examined by the High Court.
Mr. Sawhney has then argued that where witnesses giving evidence in a murder trial like the present are shown to belong to the faction of victims, their evidence should not be accepted, because they are prone to involve falsely mem bers of the rival faction out of enmity and partisan feeling.
There is no doubt that when a criminal Court has to appreciate evidence given by witnesses who are partisan or interested, it has to be very careful in weighing such evidence.
51 S.C. IO 146 Whether or not there are discrepancies in the evidence; whether or not the evidence strikes the Court as genuine; whether or not the story disclosed by the evidence is prob able, are all matters which must be taken into account.
But it would, we think, be unreasonable to contend that evidence given by witnesses should be discarded only on the ground that it is evidence of partisan or interested witnesses.
Often enough, where factions prevail in villages and murders are committed as a result of enmity between such factions, criminal Courts have to deal with evidence of a partisan type.
The mechanical rejection of such evidence on the sole ground that it is partisan would invariably lead to failure of justice.
No hard and fast rule can be laid down as to how much evidence should be appreciated.
Judicial approach has to be cautious in dealing with such evidence; but the plea that such evidence should be rejected because it is partisan cannot be accepted as correct.
Then it is urged that the evidence given by the witnesses conforms to the same uniform pattern and since no specific part is assigned to all the assailants, that evidence should not have been accepted.
This criticism again is not well founded.
Where a crowd of assailants who are members of an unlawful assembly proceeds to commit an offence of murder in pursuance of the common object of the unlawful assembly, it is often not possible for witnesses to describe accurately the part played by each one of the assailants.
Besides, if a large crowd of persons armed with weapons assaults the intended victims, it may not be necessary that all of them have to take part in the actual assault.
In the present case, for instance, several weapons were carried by different members of the unlawful assembly, but it appears that the guns were used and that was enough to kill 5 per sons.
In such a case, it would be unreasonable to contend that because the other weapons carried by the members of the unlawful assembly were not used, the story in regard to the said weapons itself should be rejected.
Appreciation of evidence in such a complex case is no doubt a difficult task: but criminal courts have to do their best in dealing with such cases and it is their duty to sift the evidence carefully and decide which part of it is true and which is not.
In the 147 present case, the High Court has in fact refused to act upon the, evidence of Bahoran and Prabhu Dayal, because it appeared to the High Court that the evidence of these two witnesses suffered from serious infirmities.
Mr. Sawhney also urged that the test applied by the High Court in convicting the appellants is mechanical.
He argues that under the Indian Evidence Act, trustworthy evidence given by a single witness would be enough to convict an accused person, whereas evidence given by half a dozen witnesses which is not trustworthy would not be enough to sustain the conviction.
That, no doubt is true; but where a criminal court has to deal with evidence pertaining to the commission of an offence involving a large number of offenders and a large number of victims, it is usual to adopt the test that the conviction could be sustained only if it is supported by two or three or more witnesses who give a consistent account of the incident.
In a sense, the test may be described as mechanical; but it is difficult to see how it can be treated as irrational or unreasonable.
Therefore, we do not think that any grievance can be made by the appellants against the adoption of this test.
If at all the prosecution may be entitled to say that the seven accused persons were acquitted because their cases did not satisfy the mechanical test of four witnesses, and if the said test had not been applied, they might as well have been convicted.
It is, no doubt, the quality of the evidence that matters and not the number of witnesses who give such evidence.
But, sometimes it is useful to adopt a test like the one which the High Court has adopted in dealing with the present case.
Mr. Sawhney then attempted to argue that the High Court failed to give effect to the principles enunciated by this Court in the case of Baladin vs State of Uttar Pradesh( ').
In that case, it was observed by Sinha, J., who spoke for the Court, that it is well settled that mere presence in an assembly does not make a person, who is present, a number of an unlawful assembly unless it is shown that he had done something or omitted to do something which would make him a member of an unlawful assembly, or unless the case falls under s.142, I.P.C. The argument is (1) A.I.R. 1956 S.C. 181 148 that evidence adduced by the prosecution in the present case does not assign any specific part to most of the accused persons in relation to any overt act, and so, the High Court was in error in holding that the appellants were members of an unlawful assembly.
The observation of which Mr. Sawhney relies, prima facie, does seem to support his contention; but, with respect, we ought to add that the said observation cannot be read as laying down a general proposition of law that unless an overt act is proved against a person who is alleged to be a member of an unlawful assembly, it cannot be said that he is a member of such an unlawful assembly.
In appreciating the effect of the relevant observation on which Mr. Sawhney has built his argument, we must bear in mind the facts which were found in that case.
It appears that in the case of Baladin(1), the members of the family of the appellants and other residents of the village had assembled together; some of them shared the common object of the unlawful assembly, while others were merely passive wit nesses.
Dealing with such an assembly, this Court observed that the presence of a person in an assembly of that kind would not necessarily show that he was a member of an un lawful assembly.
What has to be proved against a person who is alleged to be a member of an unlawful assembly is that he was one of the persons constituting the assembly ,and he entertained along with the other members of the assembly the common object as defined by s.141, I.P.C. Section 142 provides that whoever, being aware of facts which render any assembly an unlawful assembly, intentionally joins that assembly, or continues in it, is said to be a member of an unlawful assembly.
In other words, an assembly of five or more persons actuated by, and entertaining one or more of the common objects specified by the five clauses of section 141, is an unlawful assembly.
The crucial question to determine in such a case is whether the assembly consisted of five or more persons and whether the said persons entertained one or more of the common objects as specified by section 141.
While determining this question, it becomes relevant. to consider whether the assembly consisted of some persons. .who were merely passive witnesses and had (1) A.I.R. 1956 S.C. 181 I49 joined the assembly as a matter of idle curiosity without intending to entertain the common object of the assembly.
It is in that context that the observations made by this Court in the case of Baladin(1) assume significance; otherwise, in law, it would not be correct to say that before a person is held to be a member of an unlawful assembly, it must be shown that he had committed some illegal overt act or had been guilty of some illegal omission in pursuance of the common object of the assembly.
In fact, s.149 makes it clear that if an offence is committed by any member of an unlawful assembly in prosecution of the common object of that assembly, or such as the members of that assembly knew to be likely to be committed in prosecution of that object, every person who, at the time of the committing of that offence.
is a member of the same assembly, is guilty of that offence; and that emphatically brings out the principle that the punishment prescribed by s.149 is in a sense vicarious and does not always proceed on the basis that the offence has been actually committed by every member of the unlawful assembly.
Therefore, we are satisfied that the observations made in the case of Baladin(l) must be read in the context of the special facts of that case and cannot be treated as laying down an unqualified proposition of law such as Mr. Sawhney suggests.
In this case, the High Court has carefully examined the evidence and has made a finding that the whole group of persons who constituted the assembly were members of the faction of Laxmi Prasad and they assembled together, armed with several weapons, because they entertained a common object in pursuance of which the five murders were committed on that day.
Therefore, there is no substance in the argument that the conclusion of the High Court that the appellants are guilty of the offences charged is not sup ported by the principles of law enunciated by this Court in the case of Baladin(1).
It is thus clear that the general grounds of attack urged before us by Mr. Sawhney in challenging the validity of the conclusions recorded by the High Court fail, and so, there (1) A.I.R.
I956 S.C. 181 150 would be no occasion or justification for this Court to con sider the evidence for itself.
That leaves one question still to be considered and that has relation to the sentence of death imposed on 10 persons.
Mr. Sawhney argues that in confirming the sentences of death imposed by the trial Court on 10 accused persons in this case, the High Court has adopted a mechanical rule.
The High Court has held that the 10 persons who carried fire arms should be ordered to be hanged, whereas others who have also been convicted under section 302/149, should be sentenced to imprisonment for life.
It is true that except for Laxmi Prasad, the charge under section 302/149 rests against the other accused persons on the ground that five murders have been committed by some members of the unlawfui assembly of which they were members, and the argument is that unless it is shown that a particular accused person has himself committed the murder of one or the other of the victims, the sentence of death should not be imposed on him.
In other words, the contention is that if a person is found guilty of murder under section 302/149 and it is not shown that he himself committed the murder in question, he is not liable to be sentenced to death.
In support of this argument, Mr. Sawhney has relied on certain observations made by Bose J. who spoke for the Court in Dalip Singh vs State of Punjab( ').
In that case, what this Court observed was that the power to. enhance a sentence from transportation to death should very. rarely be exercised and only for the stron gest reasons; and. it was added that it is not enough for the appellate court to. say or think that if left to itself it would have awarded the. greater penalty because the discretion does ,not belong to the. appellate court but to the trial Judge, and the only ground on which the appellate court can interfere is that the discretion has been improperly exercised.
These observations have no relevance in the present case, because we are not dealing With a case where the High Court has enhanced the sentence imposed by the trial Judge at all.
In fact, both the trial Court and the High Court are agreed that the sentences of death imposed on 10 persons are justi fied by the circumstances of the case and by the requirements (1) (1954] S.C.R. 145 151 of justice.
As a mere proposition of law, it should be difficult to accept the argument that the sentence of death can be legitimately imposed only where an accused person is found to have committed the murder himself.
Whether or not sentences of death should be imposed on persons who are found to be guilty not because they themselves committed the murder, but because they were members of an unlawful assembly and the offence of murder was committed by one or more of the members of such an assembly in pursuance of the common object of that assembly, is a matter which had to be decided on the facts and circumstances of each case.
In the present case, it is clear that the whole group of persons belonged to Laxmi Prasad 's faction, joined together armed with deadly weapons and they were inspired by the common object of exterminating the male members in the family of Gayadin, 10 of these persons were armed with fire arms and the others with several other deadly weapons, and evidence shows that five murders by shooting were committed by the members of this unlawful assesmbly.
The conduct of the members of the unlawful assembly both before and after the commission of the offence has been considered by the courts below and it has been held that in order to suppress such fantastic criminal conduct on the part of villagers it is necessary to impose the sentences of death on 10 members of the unlawful assembly who were armed with firearms.
It cannot be said that discretion in the matter has been improperly exercised either by the trial Court or by the High Court.
Therefore we see no reason to accept the argument urged by Mr. Sawhney that the test adopted by the High Court in dealing with the question of sentence is mechanical and unreasonable.
There are, however, three cases in which we think we ought to interfere.
These are the, case of accused No. 9 Ram Saran who is aged 18; accused No. II Asha Ram who is aged 23 and accused No. 16 Deo prasad who is aged 24, Ram Saran and Asha Ram are the sons of Bhagwati who is accused No. 2.
Both of them have been sentenced to death.
Similarly, Deo prasad has also been sentenced to death.
Having regard to the circumstances under which the unlawful assembly came to be formed, we are satisfied that these 152 young men must have joined the unlawful assembly under pressure and influence of the elders of their respective families.
The list of accused persons shows that the unlaw ful assembly was constituted by members of different families and having regard to the manner in which these factions ordinarily conduct themselves in villages, it would not be unreasonable to hold that these three young men must have been compelled to join the unlawful assembly that morning by their elders, and so, we think that the ends of justice would be met if the sentences of death imposed on them are modified into sentences of life imprisonment.
Accordingly, we confirm the orders of conviction and sentence passed against all the appellants except accused Nos. 9, 11 and 16 in whose cases the sentences are altered to those of imprisonment for life.
In the result, the appeals are dismissed, subject to the said modification.
Appeals dismissed.
| Income tax was assessed upon the total income in the hands of the respondent assessee, an association of several persons combined together for the purpose of purchase of coal and its supply to customers for domestic purposes and other small scale industries.
The assessee claimed that it should not be assessed to tax as an association of persons, but the proportion of the income in the hands of each members of the association might be assessed to tax instead.
The Income tax Officer refused this request and an appeal to the Appellate Assistant Commissioner was dismissed.
The Income tax Appellate Tribunal, on a further appeal.
held that though the Income tax Officer had power to assess income of the association of persons as such or in the alternative on the individual members thereof in respect of their proportionate share in the income, the tribunal had no power under the Act to direct the Income tax Officer to exercise his power in one way or other.
On a 86 reference, the High Court held that the Appellate Tribunal had power to set aside the Income tax Officer 's assessment against the association and to give consequential and ancillary 'directions to the said officer to assess individuals.
HELD: (i) Section 3 of the Income tax Act impliedly gives an option to an appropriate authority to assess the total income of either the association of persons or the members of such association individually.
Commissioner of Income tax vs Reddy Mallaram, followed.
(ii) Such an assessee has a right to appeal under section 30 of the Act against the order of the Income tax Officer assessing the association of persons instead of the members individually.
(iii) The Appellate Tribunal has jurisdiction to give directions to the appropriate authority to cancel the assessment made on the association of persons and to give appropriate directions to the authority concerned to make fresh assessment on the members of that associations individually.
The phraseology used both in section 31 and section 33 does not restrict the powers of the Appellate Assistant Commissioner or the Appellate Tribunal; both have the power of such direction.
|
Appeals Nos. 984 and 985 of 1965.
Appeals by special leave from the judgment and decree dated April 28, 1961 of the Madhya Pradesh High Court in Second Appeals Nos. 176 and 177 of 1969.
H. R. Gokhale, section T. Khirwadkar and I. N. Shroff, for the appellants.
R. section Dabir, O. P. Malhotra, P. C. Bhartari and J. B. Dadachanji for the respondent.
The Judgment of the Court was delivered by Bhargava, J.
The appellants brought a suit against the res pondent for possession of a plot Kharsa No. 1227 having an area of 58.35 acres of Monza Shahpur, Tehsil Burhanpur in November, 1950 on the ground that they had been unlawfully dispossessed from this land.
This land formed part of the property of one Laxmanrao who had two sons Vishwasrao and Krishnarao.
Krishnarao had two sons Dinkerrao and Shamrao.
Shamrao was adopted by Vishwasrao in the year 1895.
The rights in certain village properties, including 'Sir ' lands, vested in this joint family consisting of Vishwasrao, his adopted son Shamrao, and 272 his nephew Dinkerrao.
The three of them jointly executed two mortgage deeds in that year, and, in the mortgage deeds, mentioned that they were mortgaging the property which was described as 'Malguzari Mouzas and Sir land of Tehsil Burhanpur District Nimar ', and 'Maufi Government land ' situate in certain villages in Pargana Jainabad, Tehsil Burhanpur.
The mortgages were in favour of the predecessors in title of the appellants.
In the year 1928, there was a partition in the joint Hindu family of the mortgagors.
By this time, Dinkerrao had died leaving two sons Ramchandrarao and Wamanrao.
Vishwasrao and Shamrao had also died and Shamrao left an adopted son Shankerrao alias Narayanrao, who was the natural son of Dinkerrao, but had been adopted by Shamrao.
The parties to the partition were, therefore, Shankerrao, the adopted son of Shamrao Ramachandrarao and Wamanrao the sons of Dinkerrao.
Shankerrao received 1 share in the property, while Ramachandrarao and Wamanrao received 1/4 share each.
In that partition Wamanrao separated from Shankerrao and Ramachandrarao who continued to be joint, and, with the consent of the mortgagee, the mortgage liability was not continued against the share of Wamanrao.
The liability under the mortgages was undertaken entirely by Shankerrao and Ramachandrarao.
On this partition, in the property remaining joint with Shankerrao and Ramachandrarao, Shankerrao had 2/3rd share.and Ramachandrarao had 1/3rd share, because, originally, before partition Shankerrao was entitled to 1/2 share and Wamanrao to 1 share.
In the year 1939, the proprietary rights of Shankerrao were purchased by one Vinayakrao, so that, under the law then existing, Shankerrao became the ex proprietary occupancy tenant of his share in the 'Sir ' plot No. 1227.
In 1940, 'Ramachandrarao was declared insolvent and his share in the proprietary rights, which vested in the Insolvency Court, was sold and purchased by the mortgagee.
The result was that Ramachandrarao also became ex proprietary occupancy tenant of his 'sir ' plot No. 1227, so that this plot became a co tenancy of Shankerrao and Ramachandrarao in the capacity of ex proprietary occupancy tenants.
Thereafter, there was some dispute about the amount and the right of redemption under the mortgage between Shankerrao and the mortgagee, and this dispute was referred to an arbitrator, Sri Vipat.
who gave his award, on the basis of which a decree was passed by the Court of Additional District Judge, Khandwa.
In pursuance of that decree, Shankerrao 's 2/3rd share, including his rights in the 'sir ' plot No. 1227, was purchased by the mortagee.
In 1940, Ramachandrarao had died and his ex proprietary occupancy rights in that plot No. 1227 had vested in his widow, Sitabai, the respondent in these appeals.
In 1942,when she was dispossessed from this plot No. 1227 in pursuance of the mortgage 273 decree passed in terms of the award, she filed an application to the Revenue Court under sections 12 and 13 of the Central Provinces Tenancy Act 1 of 1920 (hereinafter referred to as "the Act") for restoration of possession of her occupancy rights in this plot No. 1227.
The Revenue Court allowed her claim and restored her to the possession of this plot.
Thereupon, the appellants filed the suit claiming possession of this plot as mentioned above.
The suit was partially decreed by the trial Court granting to the appellants the right to joint possession with Sitabai on the basis that they had 1/3rd share in the plot, while Sitabai continued to be entitled to the remaining 2/3rd share.
Both parties filed appeals to the Court of the District Judge, Khandwa.
The lower appellate Court dismissed the appeal of the appellants in respect of the 2/3rd share in this plot No. 1227, and allowed the respondent 's appeal in respect of the 1/3rd share of the same plot, with the result that the whole suit of the appellants stood dismissed.
The appellants then filed two appeals before 'the High Court of Madhya Pradesh.
The High Court dismissed both the appeals and consequently, the appellants have now come up to this Court against that judgment of the High Court in this appeal by special leave.
The High Court in its judgment held that the finding of fact recorded by the lower appellate court that the mortgagees in the year 1895 did not get possession over cultivatory rights in this plot was decisive of the claim put forward in this case on behalf of the appellants.
The Court was of the view that, not having obtained possession over the cultivatory rights, the appellants were not entitled to claim actual possession from the mortgagors, who had become occupancy tenants of this plot.
We consider that this decision arrived at by the High Court is perfectly correct.
It is true that the two mortgages of the year 1895 were both usufructuary mortgages and they included mortgage of the 'sir ' land.
There was, however, no express mention in those mortgages that the mortgage was to operate in respect of the cultivatory rights also in this 'sir ' land.
The mere mention of the 'sir ' land as part of the property mortgaged can only be interpreted as laying down that the proprietary rights in the 'sir ' land were the subject of the mortgages, so that the cultivatory rights continued to remain with the mortgagors.
This circumstance is further borne out by the finding of fact recorded that, even after the execution of the usufructuary mortgages in 1895, the mortgagors continued to cultivate this land and actual possession over this land for purposes of cultivating it was not obtained by the mort gagee.
In these circumstances, it is clear that the mortgagors must have become ex proprietary occupancy tenants of this land in the year 1895.
274 Learned counsel appearing on behalf of the appellants put before us one provision of the C.P. and Berar Tenancy Act of 1883, which was then in force, to show that the rights of ex proprietary tenant could only accrue if the proprietary rights in 'sir ' land were transferred by sale and not if they were transferred by usufructuary mortgage.
The whole of that Act was not placed before us and, consequently we have been handicapped in our effort to determine what rights accrued to the mortgagors when the usufructuary mortgages were executed by them, but possession over cultivatory rights in the 'sir ' land was retained.
In the cir cumstances, we considered it advisable to examine the position on the basis of both alternatives.
One alternative is that they became ex proprietary occupancy tenants when the usufructuary mortgages were executed.
The other alternative is that the rights of ex proprietary tenants did not accrue, but they did become tenants of the mortgagees in whom the proprietary rights vested because of the usufructuary mortgages.
Even if the mortgagors became ordinary tenants in 1895 it is clear that, by the time the Act came into force in the year 1920, they must have become occupancy tenants as defined in section 10 of the Act.
Section 10 lays down that "Every tenant who is not an absolute occupancy tenant or a sub tenant is an occupancy tenant.
" Clearly, the mortgagors were not sub tenants nor is it the case of any party that they were absolute occupancy tenants of this plot No. 1227.
Consequently, they must be held to be occupancy tenants of this plot under the Act.
Long before the year 1939, therefore, the mortgagors must be held to have become occupancy tenants of this land or ex proprietary occupancy tenants of it.
The claim of the appellants that they acquired rights to possession of this land on the basis of the mortgages of 1895, in these circumstances, must fail.
The alternative claim put forward on behalf of the appellants was that, under the decree passed on the basis of the award, and in the proceedings for insolvency of Ramachandrarao, the rights in this land were acquired by the mortgagees through the proceedings taken by the courts.
The claim was that the rights of Shankerrao passed to the mortgagees when the mortgagees purchased his rights in execution of the decree in Civil Suit No. 12 A of 1942 of the Court of Additional District Judge, Khandwa passed on the basis of the award given by Sri Vipat, while the remaining 1/3rd share of Ramachandrarao also passed to them when his rights were transferred by the Insolvency Court.
This claim, clearly, fails in view of the provisions of section 12 or section 49 of the Act as they stood at the relevant time.
Section 49 deals with the right of transfer of lands cultivated by an ex proprietary occupancy tenant, while section 12 deals with the right of transfer of lands cultivated by an occupancy tenant.
We need not go into 275 the question whether the expression "occupancy tenant" in section 12 does or does not include an ex proprietary occupancy tenant.
If it be held that the mortgagees had become ex proprietary occupancy tenants of the land in 1895 as a result of the execution of usufructuary mortgages, the provisions of section 49 would apply.
As a result of those provisions, the rights of the ex proprietary occupancy tenant could not have been transferred in favour of the mortgagees.
Section 50, as it was at that time, did permit transfer of certain rights of an ex proprietary occupancy tenant; but, to be valid, such transfers required permission of the appropriate revenue authority.
In this case, there is no suggestion that, when transfers were obtained by the mortgagees in pursuance of the decree in Suit No. 12 A of 1942 and in pursuance of the insolvency proceedings against Ramachandrarao, the transfers purported to be effected were made with the permission of the appropriate authority.
Consequently, under section 49, those transfers would be void.
Taking the case of the second alternative that the mortgagors did not become ex proprietary occupancy tenants in 1895 and were occupancy tenants simpliciter when the Act came into force, the transfers in favour of the mortgagees under the decree in Civil Suit No. 12 A of 1942 and in the insolvency proceedings would be in contravention of section 12 of the Act.
It appears that the revenue authorities, in restoring possession to Sitabai on her application purporting to be under section 13 of the Act, proceeded on the basis of this second alternative that the rights of the mortgagors were governed by section 12 of the Act.
We are unable to hold that, in this proceeding, the revenue authorities committed any error.
Section 12 barred the transfer of the cultivatory rights of an occupancy tenant in execution of the decree of a civil court or in insolvency proceedings.
In fact, such rights did not vest in the Insolvency Court at all under the Provincial Insolvency Act.
Consequently, the mortgagees could not acquire title to cultivatory right by virtue of the proceedings taken in execution of the decree in civil suit or in the insolvency proceedings.
The right continued to vest in the mortgagors and the respondent, who was entitled as the sole survivor to those rights, was rightly restored to possession by the revenue authorities.
The decision of the revenue authorities was challenged on one other ground viz., that the jurisdiction to grant relief under section 13 of the Act is confined to cases where one of the co tenants claims possession on being illegally dispossessed and not in a case where the sole tenant has been dispossessed.
It appears to us that this is immaterial, because relief from the same revenue authority could be claimed by a sole tenant by an application under section 100 of the Act.
The application filed by Sitabai for restoration of possession could, therefore, be treated as an appli 276 cation under section 100 of the Act in case she was the sole tenant, and the grant of relief to her was not without jurisdiction.
In these circumstances, it is clear that the appellants are not entitled to claim possession in this suit.
The appeals fail and are dismissed with costs.
One hearing fee.
Y.P. Appeals dismissed.
| The appellant was a partnership firm carrying on the business of manufacturing Khandsari Sugar in the District of Muzaffarnagar, U.P.
Under section 114 of the U.P. District Boards Act X of 1922 a District Board had power to levy a tax on circumstances and property subject to certain conditions and restrictions.
The powers of District Boards, under the aforesaid Act were by virtue of the U.P. Antarim Zila Parishad Act, 1958 conferred on the Parishads formed under the latter Act.
The U.P. Antarim Zila Parishad Act 1958 expired on 31st December, 1959 but its life was extended to 31st December, 1960 by .Amending
Act No. 1 1960 which received the assent of the Governor on January 5, 1960.
When the taxing officer of the Antarim Zila Parishad Muzaffarnagar subjected the appellant to circumstances and property tax for 1959 60 the appellant filed a writ petition in the High Court contending inter alia that Amending Act No. 1 of 1960 could not continue the Act of 1958 because the latter had already expired on 31st December, 1959 while the former received the consent of the Governor on January 5, 1960.
The constitutionality of the taxing provisions was also challenged.
The writ petition was dismissed by the High Court on the sole ground that the remedy by way of appeal under section 128 of the District Boards Act 1922, had not been exhausted.
The U.P. Kshetra Samitis and Zila Parishads Adhiniyam of 1961 (U.P. Act 32 of 1961) was passed in November, 1961.
Acting under it the .taxing officer of the Zila Parishad subjected the appellant to circumstances and property tax for the year 1961 62 without giving any notice or inviting objections.
In respect of this assessment also the appellant filed a writ petition in the High Court pleading denial of natural justice as well as challenging the constitutionality of the taxing provisions.
This petition was also dismissed on the same ground as the earlier one.
The appellant came to this Court.
HELD: The rule of exhaustion of statutory remedies before a writ is granted is a rule of self imposed limitation, a rule of policy and discretion rather than a rule of law and the court may therefore in exceptional cases issue a writ such as a writ of certiorari notwithstanding the fact that the statutory remedies have not been exhausted.
[522 C] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, relied on.
There are at least two well recognised exceptions to the doctrine with regard to the exhaustion Of statutory remedies.
In the first place it is well settled that where proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the High Court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent.
without his being obliged to wait until those proceedings run their full course.
[523 C] 519 Cart Still G.M.B.H.v.
State of Bihar, A.I.R. 1961 S.C. 1615 and The Bengal Immunity Co. Ltd. vs State of Bihar, , relied on.
In the second place the doctrine has no application in a case where the impugned order has been made in violation of the principle of natural justice.
[523 D] State of Uttar Pradesh vs Mohammad Nooh, [1958] S.C.R. 596, 605, referred to.
In the present case in view of the allegations of the appellant that the .taxing provisions were ultra vires and that there was a violation of the principles of natural justice the High Court was in error in summarily dismissing the writ petition on the ground that the appellant had an alternative remedy of statutory appeal.
The High Court was no doubt vested with a discretion but in the present case the discretion had not been exercised in accordance with law.
[523 C 524 A]
|
Appeals Nos. 31 and 32 of 1968.
Appeals by special leave from the judgment and order dated January 25, 1967 of the Mysore High Court in Writ Petitions Nos. 774 and 2171 of 1965.
R. H. Dhebar, Shyamala Pappu and section P. Nayar, for the appellants (in both the appeals).
section section Javali and M. Veerappa for respondent No. (in both the appeals).
364 The Judgment of the Court was delivered by Bachawat, J.
On the reorganisation of States on November 1, 1956, the services of Syed Mahmood and Bhao Rao were allotted to the State of Mysore and they were employed there as junior statistical assistants.
On January 16, 1958 the Head of the Department of Statistics under the directions of the Government of State of Mysore prepared a tentative seniority list of nongazetted staff of that department treating junior statistical assistants and senior statistical inspectors of the former State of Hyderabad, junior statistical assistants and senior compilers of the former State of Mysore, statistical assistants and statistical inspectors from Bombay and the head compiler of Coorg as holding the equivalent posts of junior statistical assistants in the State of Mysore.
In 1959, before revising this tentative seniority list the State Government directed that all the statistical assistants and statistical inspectors of Bombay State and the head compiler of Coorg, should be treated and promoted as senior statistical assis tants.
As a result of this direction officers ranking below Syed Mahmood and Bhao Rao in the seniority list published on January 16, 1958 were promoted to the higher posts.
In makintheir promotions, the State Government did not consider the fitness of Syed Mahmood and Bhao Rao for promotion at all.
At a much later date, they were promoted as senior statistical assistants.
On May 3, 1963, the State Government published a revised seniority list placing inspectors from Bombay and head compilers from Coorg in the catecory of senior statistical assistants.
Syed Mahmood and Bhao Rao filed separate writ petitions in the High Court of Mysore asking for appropriate writs quashing the seniority list published on May 3, 1963, and directing the State Government to consider their case for promotion as senior statistical assistants with retrospective effect.
As the .objections to the seniority list published on May 3, 1963 were still under consideration by the State Government the High Court refused to quash this seniority list but it directed the State Government to promote Syed Mahmood and Bhao Rao as from the respective dates on which respondents junior to them were promoted as senior statistical assistants and to treat such promotions as effective up to May 3, 1963.
The State of Mysore has filed the present appeals from the orders directing the promotion of Syed Mahmood and Bhao Rao after obtaining special leave.
Promotion to the posts of senior statistical assistants is made from the cadre of junior statistical assistants and progress assistants.
Rule 4(3)(b) of the Mysore State Civil Services General Recruitment Rules, 1957 requires such promotions to be made by selection on the basis of seniority cum merit, that is seniority subject to the fitness of the candidate to discharge the duties of the post from among persons eligible for promotion.
In 1959 365 the seniority of junior statistical assistants was governed by the seniority list published on January 16, 1958.
Syed Mahmood and Bhao Rao were junior statistical assistants.
While making selections for promotion to the posts of senior statistical assistants from the cadre of junior statistical assistants in 1959, the State Government was under a duty to consider whether having regard to their seniority and fitness they should be promoted.
But without considering their case at all, the State Government promoted junior statistical assistants ranking below them in point of senio rity.
The promotions were irregularly made and they were, therefore , entitled to ask the State Government to reconsider their case.
In the circumstances, the High Court could issue a writ to the State Government compelling it to perform its duty and to consider whether having regard to their seniority and fitness they should have been promoted on the relevant dates when officers junior to them were promoted.
Instead of issuing such a writ, the High Court wrongly issued writs directing the State Government to promote them with retrospective effect.
The High Court ought not to have issued such writs without giving the State Government an opportunity in the first instance to consider their fitness for promotion in 1959.
Mr. Javali submitted that Syed Mahmood and Bhao Rao by virtue of their seniority were entitled to promotion at the time when persons junior to them were promoted.
The argument overlooks the fact that promotion to the post of senior statistical assistant was based on seniority cum merit.
In spite of their seniority officers junior to them could be promoted if they were unfit to discharge the duties of the post.
Promotion could not be claimed as a matter of right by virtue of seniority alone.
Mr. Javali argued that even in the case of promotion based ,on seniority cum merit, an officer is entitled to promotion by virtue of seniority alone, and he relied on the decision in State of Mysore vs H. M. Bellary(1).
In that cast, an officer of the Bombay Government was sent on deputation from his parent department to another department.
After long and satisfactory service and a number of promotions in the new department, he was reverted to his parent department and was posted in a lower grade though in the meantime an officer next below him in the parent department had been promoted to a higher grade.
The promotion to the higher grade was based on seniority cum merit.
The Court held that under r. 50(b) of the Bombay Civil Services Rules and the circular of the Government of Bombay dated October 31, 1950, an officer on deputation in another department on reversion to his parent department was entitled to be restored to the position he would have occupied in his parent department had he not been deputed.
Rule 50(b) treated the service of an (1) ; 366 officer on deputation in the new department as equivalent to service in the parent department.
As he rendered satisfactory service and was considered fit for obtaining increments and promotions in the new department, he should be deemed to be fit for promotion in the parent department and was entitled to promotion in that department when an officer next below him there was getting promotion based on seniority cum merit.
In official language, this is the "next below rule" under which 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.
In our opinion, this case is entirely distinguishable.
It decided that under the relevant service rules the fitness for promotion of an officer on deputation in the new department was equivalent to fitness for promotion in the parent department and the officer was entitled to promotion in the parent department when the officer next below him there was obtaining promotion based on seniority cum merit.
But it is not an authority for the proposition that the officer on deputation is entitled to promotion in either the new or the parent department as a matter of right by virtue of his seniority alone, or that he should be deemed to be promoted whenever the officer next below him is being promoted.
Where the promotion is based on seniority cum merit the officer cannot claim promotion as a matter of right by virtue of his seniority alone.
If he is found unfit to discharge the duties of the higher post, he may be passed over and an officer junior to him may be promoted.
We are of the opinion that the State Government should be directed at this stage to consider the fitness of Syed Mahmood and Bhao Rao for promotion in 1959.
If on such examination the State Government arbitrarily refuses to promote them, different considerations would arise.
The State Government would upon such consideration be under a duty to promote them as from 1959 if they were then fit to discharge the duties of the higher post and if it fails to perform its duty, the Court may direct it to promote them as from 1959.
In the result, we allow the appeals and set aside the orders passed by the High Court.
We direct the State Government to consider whether Syed Mahmood and Bhao Rao should have been promoted to the posts of senior statistical assistants on the relevant dates when officers junior to them were promoted, and if so, what consequential monetary benefits should be allowed to them.
While granting special leave, this Court directed that the appellants shall pay the costs of the respondents in any event.
Accordingly, the appellants are directed to pay the costs of these appeals to the respondents.
One hearing fee.
Y.P. Appeals allowed.
| Rule 4(3)(b) of the Mysore State Civil services General Recruitment Rules, 1957 requires promotion to be made by selection on the basis of seniority cum merit, that is seniority subject to the fitness of the candidate to discharge the duties of the Post from among persons eligible for promotion.
While making selections for promotions to the posts of senior statistical assistants from the cadre of junior statistical assistants, the State Government did not consider the case of the respondents who were junior statistical assistants, and published a list promoting persons ranking below them in point of seniority.
The respondents filed writ petitions, in which the High Court refused to quash the seniority list but directed the appellant State to Promote the respondents as from the dates on which their juniors were promoted and treat their promotion as effective from that date.
Allowing the appeal, this Court, HELD : While making selections for promotion to the posts of senior statistical assistants from the cadre of junior statistical assistants in 1959, the State Government was under a duty to consider whether having regard to their seniority and fitness they should be promoted.
The promotions were irregularly made and they were, therefore, entitled to ask the State Government to reconsider their case.
In the circumstances, the High Court could issue a writ to the State Government compelling it to perform its duty and to consider whether having regard to their seniority and fitness they should have been promoted on the relevant dates when officers junior to them were promoted.
Instead of issuing such a writ, the High Court wrongly issued writs directing the State Government to promote them with retrospective effect.
The High Court ought not to have issued such writs without giving the State Government an opportunity in the first instance to consider their fitness for promotion in 1959.
[365 B D] Promotion to the post of senior statistical assistant was based on seniority cum merit.
In spite of their seniority, officers junior to them could be promoted if they were unfit to discharge the duties of the post.
Promotion could not be claimed as a matter of right by virtue of seniority alone.
[366 C D] State of Mysore vs H. M. Ballary, [1964] 7 S.C .R. 471, distinguished.
|
etition (Criminal) No. 1166 of 1982.
(Under article 32 of the Constitution of India) AND Writ Petition (Criminal) No. 1167 of 1982 (Under article 32 of the Constitution of India) Gobinda Mukhoty, N.R. Choudhury and S.K. Bhattacharya for the Petitioners.
P. Ram Reddy and G.N. Rao for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
On October 8, 1982, we quashed and set aside the detention order dated December 26, 1981 in respect of detenu Merugu Satyanarayana s/o Ramchander, deferring the giving of the reasons to a later date.
On the same day we quashed the detention order dated February 13, 1982, in respect of detenu Bandela Ramulu @ Lehidas @ Peddi Rajulu @ Ramesh, s/o Venkati, deferring the giving of the reasons to a later date.
Identical contentions were raised in both these petitions and, therefore, by this common order we proceed to give our reasons on the basis of which we made the aforementioned orders.
1166/82.
Detenu M. Satyanarayana was working in Belampalli Coal Mines.
According to him he was arrested on October 22, 1981, but was kept in unlawful custody till October 31, 1981, when he was produced before the Judicial Magistrate who took him in judicial custody and sent him to Central Jail, Warangal.
According to the respondents detenu was arrested on October 30, 1981, and was produced before the Judicial Magistrate on October 31, 1981.
When he was thus confined in jail a detention order dated December 26, 1981 (in the counter affidavit the date of the detention order is shown to be December 28, 1981) made by the District Magistrate, Adilabad, in exercise of the power conferred by sub section
(2) read with sub section
(3) of section 3 of the ( 'Act ' for short) 639 was served upon him on December 29, 1981.
The District Magistrate also served upon the detenu grounds of detention on January 2, 1982.
It is not clear from the record or from the counter affidavit filed on behalf of respondents 1 to 3 whether any representation was made by the detenu and when the matter was disposed of by the Advisory Board.
1167/82.
Detenu Bandela Kamulu according to him was arrested on January 1, 1982, and he was produced before the Judicial Magistrate on January 11, 1982.
The dates herein mentioned are controverted by the respondents and they assert in the counter affidavit that the detenu was arrested on January 8, 1982, and was produced before the Judicial Magistrate on January 9, 1982.
During the period of his incarceration the District Magistrate, Adilabad in exercise of the power conferred by sub section
(2) read with sub s (3) of section 3 of the made an order of detention which was served on the detenu in District Jail, Nizamabad, on February 14, 1982.
Even in this case it is not clear from the record whether the detenu made any representation on how his case was dealt with by the Advisory Board.
The detenu in each of these petitions filed a petition for writ of habeas corpus in the Andhra Pradesh High Court It appears both the petitions were rejected.
Thereafter the present petitions were filed.
It may be stated at the outset that there is some dispute about the date of arrest of detenu in each case.
But in order to focus attention on the substantial contention canvassed in each case we would proceed on the assumption that the date of arrest given in each case by the respondents is correct.
We do not mean to suggest that the averment of the respondents with regard to the date of arrest is correct but that would be merely a presumption for the purpose of disposal of these petitions.
Mr. Gobinda Mukhoty, learned counsel who appeared for the detenu in each petition urged that on the date on which the detention order came to be made against each detenu he was already deprived of his liberty as he was already arrested and was confined in jail and, therefore, he was already prevented from pursuing any activity which may prove prejudicial to the maintenance of public order.
Hence no order of detention could be made against him.
640 The impugned detention order in each case recites that the detaining authority, the District Magistrate of Adilabad, made the impugned detention order with a view to preventing the detenu from continuing to act further in the manner prejudicial to the maintenance of public order.
The fact situation in each case as transpires from the counter affidavit filed on behalf of the respondents is that detenu Merugu Satyanarayan was in jail since October 31, 1981, and the detention order in his case was made on December 28, 1981, meaning thereby that the detenu was already confined in jail for a period of nearly two months prior to the date of the detention order.
Similarly, in the case of detenu Bandela Ramulu according to the counter affidavit he was arrested on January 8, 1982, and was confined to jail under the orders of the First Class Magistrate from January 9, 1982.
The detention order in his case was made on February 13, 1982, meaning thereby that the detenu was already confined to jail for a period of one month and four days prior to the date of the detention order.
It is in the background of this fact situation in each case that the contention canvassed on behalf of the detenu by Mr. Mukhoty may be examined Sub section (2) of section 3 of the confers power on the Central Government or the State Government to make an order of detention with a view to preventing any person from acting in any manner prejudicial to the security of the State or from acting in any manner prejudicial to the maintenance of public order, etc.
In this case the detaining authority has made the order on being satisfied that it is necessary to detain the detenu with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
A preventive action postulates that if preventive step is not taken the person sought to be prevented may indulge into an activity pre judicial to the maintenance of public order.
In other words, unless the activity is interdicted by a preventive detention order the activity which is being indulged into is likely to be repeated.
This is the postulate of the section.
And this indubitably transpires from the language employed in sub section
(2) which says that the detention order can be made with a view to preventing the person sought to be detained from acting in any manner prejudicial to the maintenance of public order.
Now, if it is shown that the man sought to be prevented by a preventive order is already effectively prevented, the power under sub section
(2) of section 3, if exercised, would imply that one who is already is sought to be further prevented which is not the mandate 641 of the section, and would appear tautologous.
An order for preventive detention is made on the subjective satisfaction of the detaining authority.
The detaining authority before exercising the power of preventive detention would take into consideration the past conduct or antecedent history of the person and as a matter of fact it is largely from the prior events showing the tendencies or inclinations of a man that an inference could be drawn whether he is likely even in the future to act in a manner prejudicial to the maintenance of public order.
If the subjective satisfaction of the detaining authority leads to this conclusion it can put an end to the activity by making a preventive detention order.
(see Ujagar Singh vs State of Punjab, and Jagir Singh vs State of Punjab)(1).
Now, if the man is already detained, can a detaining authority be said to have been subjectively satisfied that a preventive detention order be made ? In Rameshwar Shaw vs District Magistrate, Burdwan & Anr.(2), this Court held that as an abstract proposition of the law detention order can be made in respect of a person who is already detained.
But having said this, the Court proceeded to observe as under: "As an abstract proposition of law, there may not be any doubt that section 3(1)(a) does not preclude the authority from passing an order of detention against a person whilst he is in detention or in jail, but the relevant facts in connection with the making of the order may differ and that may make a difference in the application of the principle that a detention order can be passed against a person in jail.
Take for instance, a case where a person has been sentenced to rigorous imprisonment for ten years.
It cannot be seriously suggested that soon after the sentence of imprisonment is pronounced on the person, the detaining authority can make an order directing the detention of the said person after he is released from jail at the end of the period of the sentence imposed on him.
In dealing with this question, again the consideration of proximity of time will not be irrelevant.
On the other hand, if a person who is undergoing imprisonment, for a very short period, say for a month or two or so, and it is known that he would soon be released from jail, it may be possible for the authority to consider the antecedent history of the said person and decide whether after he is released from jail, and if the authority is bona fide satisfied that such detention is necessary, he can make a 642 valid order of detention a few days before the person is likely to be released.
The antecedent history and the past conduct on which the order of detention would be based would, in such a case, be proximate in point of time and would have a rational connection with the conclusion drawn by the authority that the detention of the person after his release is necessary.
It may not be easy to discover such rational connection between the antecedent history of the person who has been sentenced to ten years ' rigorous imprisonment and the view that his detention should be ordered after he is released after running the whole of his sentence.
Therefore, we are satisfied that the question as to whether an order of detention can be passed against a person who is in detention or in jail, will always have to be determined in the circumstances of each case.
" One can envisage a hypothetical case where a preventive order may have to be made against a person already confined to jail or detained.
But in such a situation as held by this Court it must be present to the mind of the detaining authority that keeping in view the fact that the person is already detained a preventive detention order is still necessary.
The subjective satisfaction of the detaining authority must comprehend the very fact that the person sought to be detained is already in jail or under detention and yet a preventive detention order is a compelling necessity.
If the subjective satisfaction is reached without the awareness of this very relevant fact the detention order is likely to be vitiated.
But as stated by this Court it will depend on the facts and circumstances of each case.
The view herein taken finds further support from the decision of this Court in Vijay Kumar vs State of J & K and Ors (1), wherein this Court recently held as under: "Preventive detention is resorted to, to thwart future action.
If the detenu is already in jail charged with a serious offence, he is thereby prevented from acting in a manner prejudicial to the security of the State.
Maybe, in a given case there yet may be the need to order preventive detention of a person already in jail.
But in such a situation the detaining authority must disclose awareness of the fact that 643 the person against whom an order of preventive detention is being made is to the knowledge of the authority already in jail and yet for compelling reasons a preventive detention order needs to be made.
There is nothing to indicate the awareness of the detaining authority that detenu was already in jail and yet the impugned order is required to be made.
This, in our opinion, clearly exhibits non application of mind and would result in invalidation of the order." Mr. Mukhoty next contended that even if a hypothetical case can be envisaged as contemplated by the decision of this Court in Rameshwar Shaw that a preventive detention order becomes necessitous in respect of a person already confined to jail, the detaining authority must show its awareness of the fact that the person in respect of whom detention order is being made is already in jail and yet a detention order is a compelling necessity.
It was urged that this awareness must appear on the face of the record as being set out in the detention order or at least in the affidavit in opposition filed in a proceeding challenging the detention order.
Otherwise, according to Mr. Mukhoty, the detention order would suffer from the vice of non application of mind.
The awareness must be of the fact that the person against whom the detention order is being made is already under detention or in jail in respect of some offence or for some reason.
This would show that such a person is not a free person to indulge into a prejudicial activity which is required to be prevented by detention order.
And this awareness must find its place either in the detention order or in the affidavit justifying the detention order when challenged.
The absence of this awareness would permit an inference that the detaining authority was not even aware of this vital fact and mechanically proceeded to pass the order which would unmistakably indicate that there was non application of mind to the most relevant fact and any order of such serious consequence resulting in deprivation of liberty, if mechanically passed without application of mind, is obviously liable to be set aside as invalid.
And that is the case here.
Coming to the facts of each case, the detention order refers to the name of the detenu and the place of his residence.
There is not even a remote indication that the person against whom the detention order is being made is already in jail in one case for a period of roughly two months and in another case for a period of one month and four days.
The detenu is referred to as one who is staying at a 644 certain place and appears to be a free person.
Assuming that this inference from the mere description of the detenu in the detention order is impermissible, the affidavit is conspicuously silent on this point.
Not a word is said that the detaining authority was aware of the fact that the detenu was already in jail and yet it became a compelling necessity to pass the detention order.
Therefore, the subjective satisfaction arrived at clearly discloses a non application of mind to the relevant facts and the order is vitiated.
The next contention urged by Mr. Mukhoty was that the detaining authority has not filed an affidavit in opposition but the same has been filed by one Sub Inspector of Police and it speaks about the subjective satisfaction of the detaining authority viz., the District Magistrate and this would show that the District Magistrate had completely abdicated his functions in favour of the Sub Inspector of Police.
The affidavit in opposition on behalf of respondents 1 to 3 who are the State of Andhra Pradesh, the District Magistrate, Adilabad and the Jailor, Central Prison, Hyderabad, has been filed by M. Venkatanarasayya who has described himself as Sub Inspector of Police.
The same Sub Inspector has filed affidavit in opposition in both the cases.
In para 1 of the affidavit in opposition it is stated that the deponent as a Sub Inspector of police is well acquainted with all the facts of the case.
In para 7 of the affidavit in opposition in writ petition 1166/82 he has stated that: 'Only after deriving the subjective satisfaction, the detaining authority passed order of detention against the detenu, as his being at large, will prejudice the maintenance of public order.
We are completely at a loss to under stand how a Sub Inspector of Police can arrogate to himself the knowledge about the subjective satisfaction of the District Magistrate on whom the power is conferred by the .
If the power of preventive detention is to be conferred on an officer of the level and standing of a Sub Inspector of Police, we would not be far from a Police State.
Parliament has conferred power primarily on the Central Government and the State Government and in some specific cases, if the conditions set out in sub section (3) of section 3 are satisfied and the notification is issued by the State Government to that effect, this extra ordinary power of directing preventive detention can be exercised by such highly placed officers as District Magistrate or Commissioner of Police.
In this case the District Magistrate, the detaining authority has not chosen to file his affidavit.
The affidavit in opposition is filed by a Sub Inspector of Police.
Would this imply that Sub Inspector of Police had access to the file of the District Magistrate or was the Sub Inspector the person who influenced the 645 decision of the District Magistrate for making the detention order ? From the very fact that the respondents sought to sustain the order by filing an affidavit of Sub Inspector of Police, we have serious apprehension as to whether the District Magistrate completely abdicated his functions in favour of the Sub Inspector of Police.
The file was not made available to the Court at the time of hearing of the petitions.
But number of inferences are permissible from the fact that the District Magistrate though a party did not file his affidavit justifying the order and left it to the Sub Inspector of police to fill in the bill.
And the Sub Inspector of Police does not say how he came to know about the subjective satisfaction of the District Magistrate.
He does not say that he had access to the file or he is making the affidavit on the basis of the record maintained by the District Magistrate.
Therefore, the inference is irresistible that at the behest of the Sub Inspector of Police who appears to be the investigating officer in some criminal case in which each of the detenu is implicated, the District Magistrate completely abdicating his responsibilities, made the detention order.
This Court in A.K. Roy vs Union of India & Ors.(1), while upholding the validity of the , repelled the contention that it is wholly unreasonable to confer upon the District Magistrate or Commissioner of Police the power to issue orders of detention for reasons mentioned in sub section
(2) of section 3, observing that the District Magistrate or the Commissioner of Police can take the action under sub section
(2) of section 3 during the periods specified in the order of the State Government only.
This Court also noticed another safeguard, namely, that the order of the State Government under sub section
(3) of section 3 can remain in force for a period of three months only and it is during this period that the District Magistrate or the Commissioner of Police, as the case may be, can exercise power under sub section
(2) of section 3.
The further safeguard noticed by this Court is that both these officers have to forthwith intimate the fact of detention to the State Government and no such order of detention can remain in force for more than 12 days after the making thereof unless, in the meantime, it has been approved by the State Government.
The Court observed that in view of these in built safeguards it can not be said that excessive or unreasonable power is conferred upon the District Magistrate or the Commissioner of Police to pass orders under sub section
(2) (see para 72).
646 If the District Magistrate is to act in the manner he has done in this case by completely abdicating his functions in favour of an officer of the level of a Sub Inspector of Police, the safeguards noticed by this Court are likely to prove wholly illusory and the fundamental right of personal liberty will be exposed to serious jeopardy.
We only hope that in future the District Magistrate would act with responsibility, circumspection and wisdom expected of him by this Court as set out earlier.
However, the conclusion is inescapable that the errors pointed out by the petitioners which have appealed to us remain uncontroverted in the absence of an affidavit of the detaining authority.
We refuse to take any notice of an affidavit in opposition filed by a Sub Inspector of Police in the facts and circumstances of this case.
The last contention canvassed by Mr. Mukhoty is that even though assurances were given on the floor of Parliament as well as while hearing the case of A.K. Roy wherein constitutional validity of the was challenged that the drastic and draconian power of preventive detention will not be exercised against political opponents, in flagrant violation thereof the affidavit in opposition would show that the power of preventive detention was exercised on extraneous and irrelevant consideration, the detenu in each case being a member and organiser of CPI (ML) (People 's War Group), a political party operating in this country.
In the affidavit in opposition in writ petition 1166/82, the relevant averments on this point read as under : "In reply to para 7 of the petition these answering respondents submit that it is not correct to say that the grounds of detention failed to disclose any proximity with the order of detention and underlying purpose and object of the inasmuch as the detenu is one of the active organisers of CPI (ML) (People 's War Group) believing in violent activities with the main object to overthrow the lawfully established Government by creating chaotic conditions in rural and urban areas by annihilating the class enemies, went underground to preach the party ideology and to build up the cadres by indoctrinating them for armed struggle".
There is a similar averment in the affidavit in opposition in the connected petition also.
We would have gone into this contention 647 but for the fact that having found the detention order invalid for more than one reason, it is unnecessary to examine this contention on merits.
Non examination of the contention need not lead to the inference that the contention is rejected.
We keep it open to be examined in an appropriate case.
These were the reasons for which we quashed and set aside the order of detention in each case.
S.R. Petitions allowed.
| The Gujarat Panchayat Act, 1961 (Gujarat Act No. VI of 1962) came into force on June 15, 1962 in the State of Gujarat except in Kutch area and the district of Dangs.
By an order made by the State Government on March 4, 1963, the areas which were within the jurisdiction of the several municipalities constituted under the Bombay Municipal Act, 1901 were declared to be gram or nagar, as the case may be.
On April 1, 1963, sections 203 to 205 of the Panchayats Act were brought into operation.
On March 26, 1963, the State Government entrusted some of its functions relating to recovery of land revenue etc.
to the nagar and gram panchayats with effect from April 15, 1963.
On August 1, 1963 by a notification issued under section 149 of the Panchayats Act, the State Government delegated some of its powers under the Land Revenue Code and rules made thereunder to the gram and nagar panchayats.
Service rules like the Gujarat Panchayat Service (Conduct) Rules, 1964, the Gujarat Service (Discipline & Appeal) Rules, 1964, Gujarat Panchayat Service (Absorption Seniority, Pay & Allowances) Rules, the Gujarat Panchayat Service (Transfer of Servants) Rules, 1968, Gujarat Panchayat Service (Promotion to Cadres in State Service) Rules, 1974, Gujarat Panchayat Service (Pension) Rules, 1976 were promulgated and issued by the State Government.
On January 2, 1967, the State Government passed an order under sub section (2) of section 203 of the Panchayats Act directing that the Panchayat Service shall consist of district cadre, taluka cadre and local cadre and specified the posts which were to belong to each of such cadres in the Schedule appended to the said order.
In Part III of the Schedule to that Order, the posts belonging to the local cadre were specified.
Although the above steps were taken by the State for the constitution of the Panchayat Service, the State Government did not make any order regarding the equation of posts of the staff in the local cadre and fixation of their pay scale till 1975 notwithstanding repeated representations made by the ex municipal employees and others who were included in the local cadre.
The State Government also did not make any rules prescribing the promotional 145 avenues for the staff borne on the local cadre of the Panchayat Service, nor extended the benefit of revisions of pay scales and other allowances which were made on the basis of the recommendations of the First Pay Commission (Sarela Commission) and of the Second Pay Commission (Desai Commission).
The Respondent Nos. 1 to 5 in the appeal filed a writ application in a representative capacity for and on behalf of themselves and other officers and servants who were originally in the employment of several municipalities which had been constituted under the Bombay District Municipal Act, 1901 and who were working as employees under gram panchayats or nagar panchayats which were established in the place of municipalities under the provisions of the Gujarat Panchayats Act, 1961 for a Writ, order or direction to the Appellant (State of Gujarat) and others who had been impleaded as respondents directing them: (i) to pass orders regarding appointment in equivalent posts in the Panchayat Service of the State Government, fixation of seniority, pay scales and allowances in the equivalent posts with retrospective effect and payment of the difference in salary and allowances, (ii) to frame rules providing for promotional avenues in the Panchayat Service as also in the State Service, and (iii) to extend the benefits flowing from pay revisions ordered by the State Government on the basis of the recommendations of the First Pay Commission (Sarela Commission) and the Second Pay Commission (Desai Commission) retrospectively.
It was contended that the Panchayat Service was as much a service under the State as any other Civil Service, that the State Government had failed to discharge its statutory duties in relation to the members of the staff included in the local cadre of the Panchayat Service and that the denial of benefits similar to those extended to other members of the State Civil Service on the basis of the reports of the two Pay Commissions amounted to hostile discrimination.
The State Government contested the application alleging that the members of the Panchayat Service were not government servants.
Following its earlier decision in G. L. Shukla & another vs The State of Gujarat & Ors.
the High Court held that the respondents who belonged to the local cadre were government servants and allowed the application.
During the pendency of the appeal to this Court, the Gujarat Panchayats (Amendment) Ordinance 1978 was promulgated by the Governor amending some of the provisions of the Panchayats Act and the said Ordinance was repealed and replaced by the Gujarat Panchayats (Third Amendment) Act, 1978.
As the Ordinance and the Amending Act adversely affected the interests of the employees, writ petitions were filed questioning the validity of the Amending Act.
In the appeal and writ petitions to this Court on the questions: (1) Whether the Panchayat Service was a Civil Service of the State, and (2) Whether under the unamended Act, there was a common Centralized Panchayat Service.
^ HELD: 1.
(i) The Panchayat Service constituted under section 203 of the Panchayats Act has all the characteristics of a Civil Service of the State.
This also appears to have been the view of the State Government when it constituted the Second Pay Commission (Desai Commission) to examine the 146 general conditions of service applicable to Government employees other than officers of the all India services but including employees in the Panchayat Service.
[165H 166B] (ii) It is a question of fact to be decided in the circumstances of each case whether every employee of a Panchayat should be treated as a member of the State Civil Service.
[166H 167A] 2.
The provisions contained in section 206 of the Panchayats Act and the provisions in sub sections (2), (2A), (3) and (4) of section 203 clearly establish that the Panchayat service constituted under section 203 can only be a centralized service and recruitment of candidates to be made under section 210 of the Panchayats Act by the Gujarat Panchayat Service Selection Board can only be to that centralised service.
The division of the Panchayat Service into district cadre, taluka cadre and local cadre does not affect the integrity of the Panchayat Service.
It continues to be a single service notwithstanding such division.
When the Panchayat Service is a Statewise service, it has necessarily to be a common centralised service.
[167B C] 3.
Municipal Corporations, city municipalities, town municipalities, municipal boroughs, district boards, zilla parishads, taluka development boards, town panchayats, village panchayats, sanitary boards and town area committees were some of the different kinds of local bodies which were constituted under the local laws and the management of their affairs were entrusted subject to the control of the State Government to elected bodies.
Each one of them was treated as a body corporate.
In the staffing pattern of these bodies there were at least three classes of persons.
Officers holding high administrative posts such as commissioners of corporations, deputy commissioners of corporations, municipal health officers, municipal educational officers, district development officers and chief executive officers of district boards were usually drawn from the ranks of the provincial or the State Services and they were deputed to the various bodies to discharge functions which were either statutory or non statutory.
Even though they drew their salary and allowances from the local bodies to which they were deputed, they still retained their identity as officers of the State Civil Service and their services were liable to be withdrawn by the State Government at any time it pleased.
[159D E] 4.
The expressions 'civil service ' or 'civil post ' are not formally defined.
Entry 70 of List I of the Seventh Schedule to the Constitution refers to Union Public Services and All India Services, and Entry 41 of List II of that Schedule refers to State Public Services.
Part XIV of the Constitution deals with services under the Union and the States.
In Article 309 of the Constitution, there is reference to persons appointed to public services and posts in connection with the affairs of the Union or of any State.
Article 310 of the Constitution distinguishes the defence service from the civil service when it refers to members of a 'defence service or of a civil service '.
But all persons who are members of a defence service or of a civil service of the Union or of an all India service or persons who hold any post connected with defence or any civil post under the Union are treated as persons serving the Union and every person who is a member of the civil service of a State or holds any civil post under a State is treated as a person serving a State.
[160D F] 5.
The true test for determination of the question whether a person is holding a civil post or is a member of a civil service is the existence of a relationship of master and servant between the State and the person holding 147 a post under it and that the existence of such relationship is dependent upon the right of the State to select and appoint the holder of the post, its right to suspend and dismiss him, its right to control the manner and method of his doing the work and the payment by it of his wages and remuneration.
The relationship of master and servant may be established by the presence of all or some of the above factors in conjunction with other circumstances.
[161E F] State of Assam & Ors.
vs Shri Nanak Chandra Dutta, ; Superintendent of Post Offices etc.
vs P. K. Rajamma etc. ; , referred to.
Entry 5 of List II of the Seventh Schedule to the Constitution specifically refers to local authorities established for the purpose of local self Government or village administration as part of local government.
The local authorities are included in the definition of the expression 'State ' in Article 12 of the Constitution.
[165D] 7.
The Panchayats exercise many governmental functions which the State Government can perform.
They are entrusted with the power to levy taxes and to exercise large number of powers which are loosely called as "police powers" regulating several aspects of human life.
Articles 276 and 277 of the Constitution also take note of the powers of local authorities to levy certain taxes.
[165E] 8.
The Panchayats Act was enacted for the purpose of consolidating and amending the law relating to village Panchayats and district local boards in the State of Gujarat with a view to reorganising the administration pertaining to the local Government in furtherance of the object of democratic decentralisation of powers in favour of different classes of panchayats.
It provided for the establishment of Panchayats of different tiers viz. a gram panchayat for each gram, a nagar panchayat for each nagar, a taluka panchayat for each taluka and a district panchayat for a district.
[151C D] 9.
Section 203 of the Panchayats Act provided for the constitution of a Panchayat Service which shall be distinct from the State Service.
The State Government was authorised to determine by orders issued from time to time the several classes, cadres and posts in the Panchayat Service and the initial strength of the officers and servants in each such class and cadres.
The Panchayat Service consisted of district cadres, taluka cadres and local cadres.
A servant belonging to a district cadre was liable to be posted either by promotion or transfer to any post in any taluka in the district, a servant belonging to a taluka cadre was liable to be posted similarly to any post in any gram or nagar in the same taluka, and a servant belonging to a local cadre similarly to be posted in the same gram or, as the case may be, nagar.
The Panchayat Service was also to consist of certain posts designed as deputation posts, which may be filled in accordance with section 207.
The State Government was empowered to make rules regulating the mode of recruitment and conditions of service of persons appointed to the Panchayat Service and the powers in respect of appointments, transfers and promotions of officers and servants in the panchayat Service and disciplinary action against any such officers or servants.
[154B E] 10.
Under section 206 of the Panchayats Act, it is open to the State Government to allocate to the Panchayat Service such number of officers and servants out of the staff allotted or transferred to a panchayat under sections 157, 158 and 325 as it may deem fit.
[154G] 148 11.
Sections 102, 122 and 142 of the Panchayats Act provide that the gram panchayat or the nagar panchayat or the taluka panchayat or the district panchayat as the case may be, shall have such other officers and servants as may be determined under section 203 of the Panchayats Act and such officers and servants shall be appointed by such authority and their conditions of service shall be such as may be prescribed.
Clause (c) of sub section (2) of section 143 of the Panchayats Act empowers the District Development Officer to appoint such class of officers and servants as may be prescribed.
[163C, B] 12.
The Panchayat Service contemplated under section 203 is a single service for the whole State and it is not a collection of distinct and separate services of each individual panchayat.
That Panchayat Service is a service under the State is again emphasized by section 206 which authorises the State Government to pool together the four classes of persons mentioned therein who originally belonged to four different sources and to allocate them to the Panchayat Service and one class of such persons are those who belong to the State Service.
Unless the Panchayat Service is held to be a State Service, inclusion of officers and servants in the State Service will be unconstitutional.
[163E F] State of Mysore vs H. Papanna Gowda & Anr.
; , , referred to.
In the instant case there is no compelling reason to hold that the Panchayat Service is not a civil service under the State.
Further recruitment of candidates to the Panchayat Service had to be made by the Gujarat Panchayat Service Selection Board constituted by the State Government.
[163H] Jalgaon Zilla Parishad vs Duman Govind & Ors.
Civil Appeals Nos.
24 and 25 of 1968 decided on December 20, 1968 distinguished.
Entry 41 of List II of the Seventh Schedule to the Constitution, refers to State Public Services suggesting that there can be more than one State Public Service under the State.
A number of such services under a State e.g. Police Service, educational service, revenue service etc.
State Public Services may be constituted or established either by a law made by the State Legislature or by rules made under the proviso to Article 309 of the Constitution or even by an executive order made by the State Government in exercise of its powers under Article 162 of the Constitution.
The recruitment and conditions of service of the officers and servants of the State Government may also be regulated by statute, rules or executive orders.
[164A B] 14.
The administration of a service under a State involves broadly the following functions: (1) the organisation of the Civil Service and the determination of the remuneration, conditions of service, expenses and allowances of persons serving in it; (ii) the manner of admitting persons to civil service; (iii) exercise of disciplinary control over members of the service and power to transfer, suspend, remove or dismiss them in the public interest as and when occasion to do so arises.
[164C D] In the instant case, the Panchayat Service is constituted by the Panchayats Act and the State Government is empowered to make orders and rules regarding its organisation and management.
Having regard to the broad features of the Panchayat Service, the declaration in Section 203 that the Panchayat Service, shall be distinct from the State Service, appears to have been made only to distinguish the Panchayat Service from other services of the State attached to the several departments which are under the direct control of the State Government.
[164E] 149 15.
If the members of the Panchayat Service are not to be members of a Service under the State Government but are to be the officers and servants of the panchayat unit to which they are allotted then sub sections (2), (2A) and 4(a) of section 203 of the Panchayats Act would to some extent become unworkable, as every time there is a transfer of an officer borne on the Panchayat Service there would be a change of master.
The Legislature could not have contended such a bizarre result.
[164F] 16.
The reason for treating Panchayat Service as a service distinct from State Service appears to be that the law intended that persons belonging to the Panchayat Service should be transferable from one post in a panchayat to another post in a panchayat and unless there was an order of promotion, such persons could not be transferred to posts outside the Panchayats.
[165B] 17.
Merely because the Panchayats are declared to be body corporates, it cannot be said that any of the persons working under them cannot be considered as members of a civil service under a State.
The panchayats constituted under the Panchayats Act derive their authority from the statute and are under the control of the State Government.
They form part of the local self Government organisation which the State Government is under an obligation to foster under Article 40 of the Constitution.
[165C]
|
minal Appeal No. 629 of 1985.
From the Judgment and Order dated 25.6.1985 of the Andhra Pradesh High Court in Criminal Appeal No. 637 of 1983.
K.Madhava Reddy, A. Subba Rao and A.D.N. Rao for the Appellants.
G. Prabhakar for the Respondent.
The Judgment of the Court was delivered by DR.ANAND, J.
The curse of dowry has claimed yet another victim.
Kundula Bala Subrahmanyam, the husband of the deceased Kundula Koti Nagbani and his mother Kundula Annapurna (mother in law of the deceased) have filed this appeal under Section 2(a) of the against the judgment of the High Court of Andhra Pradesh, Hyderabad, dated 25.6.1985, setting aside the judgment of acquittal passed by the Sessions Judge, East Godavari Division and convicting both the appellants for an offence under Section 302/34 IPC and sentencing each of them to suffer imprisonment for life.
On 23rd of August, 1981, between 12.30.1.00 p.m. on hearing screams and cry of deceased Kundula Koti Nagbani, at that time aged about 18 years, Pulapa Lakshmi PW2, Vempati Paparao PW3 and Vempati Radha PW4, rushed to the house of the appellant and found both the appellants along with the father of appellant No. 1 (father in law of the deceased) hurriedly coming out of the kitchen while the deceased was lying on the floor engulfed in flames.
Since, the appellants or the father in law of the deceased were making no attempts to put off the flames, PW2 asked appellant No. 1 to give her something so that she could extinguish the fire.
He, however, did not respond.
She then requested first appellant 's father to give something to her so that the fire could be put off.
The father of appellant No. 1 enquired if he should get a bucket of water.
PW2, thereupon, requested him to give either a bed sheet or a blanket.
The father of appellant No. 1 then brought out a bed sheet (Bontha) from the cot and 675 as he was passing it on, to PW2, the mother in law of the deceased, appellant No. 2, told her husband not to give the bontha to PW2.
PW2, in the meanwhile, took the bontha from the father of the first appellant and tried to extinguish the fire.
The deceased turned her side.
She was alive.
The deceased asked PW2 for some water.
Since, the petticoat of the deceased was burning, PW3, the father of PW2, who had also rushed along with her to the house of the appellant broke the thread of the petticoat to save her from further burning and threw away the burning garments In the process, he also received some burn injuries.
PW2 poured water into the mouth of the deceased and enquired from her as to what had happened.
The deceased told her that "her mother in law had poured kerosene over her and her husband had set fire to her".
The deceased again felt thirsty and asked for more water which was again given to her by PW2.
The above statement made by the deceased to PW2 was overheard by PW3 and some others, who had also reached on hearing the cries.
Vempati Nagabhushanam PW5, another immediate neighbor of the appellants living only about 2 yards away also heard the cries of the deceased and rushed to the house of the appellant.
He noticed PW3 was pulling out the petticoat of the deceased while PW2 was attempting to extinguish fire.
He saw PW2 pouring water into the mouth of the deceased.
He also heard the statement made by the deceased to PW2 about the manner in which she had been set on fire.
PW5 thereupon went away to inform the maternal uncle of the deceased at Malakapalli.
On the way, he met one Ramakrishna coming on a motor cycle and at his request Ramakrishna gave him a ride to Malakapalli.
On reaching the house of the maternal uncle of the deceased, they found the brother of the deceased Vempati Sreerama Krishna Sreeram PWl was also present there.
He conveyed to them the information regarding the burning of the deceased and also what he had heard the deceased telling PW2.
Ramarao and PWl then went on the same motorcycle to Dharmavaram.
PWl reached the house of the appellant and saw a number of persons including PWs 2 and 3 gathered there.
The deceased was lying on the floor and at that time she had no clothes on her.
He noticed that she had received burn injuries from her breasts downwards to her legs.
On seeing her plight, PW1 started crying and hitting his head against a pillar.
When the deceased noticed that PW1 had come, she asked PW2 to call her brother PWl inside.
PW2 thereupon went out and brought PW1 to the kitchen where the deceased took the palm of PWl into her own palms and told him in Hindi "please tell mother and father as I am 676 telling you.
My mother in law poured kerosene on me and my husband set fire.
You tell father and mother about this.
Don 't fight.
Anyhow I am dying.
" She also told her brother PW1 to take back the cash given to her and divide it amongst the sisters in equal share and get them married off to nice persons.
At this juncture, the first appellant, husband of the deceased came inside the kitchen and with folded hands begged the deceased for forgiveness saying that he would not repeat what he had done and therefore he may be pardoned.
PWl got wild and caught hold of the neck of the first appellant.
PW2 and PW3 rushed towards them and released the first appellant from the hold of PW1 and sent PWl to another uncle 's house and told the uncle that since PWl was in an agitated mood he should take care of him.
Within an hour, however, PWl went back to the house of the deceased and by that time, a local Doctor PW6, Dr. R. Radha krishnamurthy had arrived at the house and was giving first aid to her and she was lying on a cot in the verandah.
PW6 at about 3.30 p.m. advised the removal of the deceased to the Government Hospital at Kovvur.
A matador van was secured and at about 4.30 p.m. PW1, Ramarao, his maternal uncle, the wife of Ramarao and some other neighbors took the deceased to the Government Hospital at Kovvur in the matador van reaching there at about 5 p.m.
At about 5.30 p.m., Dr. K. Parameswaradas PW9 examined the deceased and declared her dead.
PWl thereupon went to the police station which is adjacent to the hospital alongwith his uncle and lodged the report exhibit
P4 with the Head Constable Md. Navabjani PW12.
A case under section 302 IPC was registered and information was sent to Inspector of Police G. Scendavce Rao PW14 on telephone.
After collecting a copy of the FIR, PW14 proceeded to the Government Hospital and from there went to the scene of occurrence.
He seized M.0 's 1 to 3, drew the site plan of the scene of occurrence and examined PWs 1 to 5 and PW9 at Dharmavaram.
He also held the inquest proceedings from 6.30 a.m. to 8.30 a.m. on August 24 1981 and after getting the postmortem conducted handed over the dead body to the family of the deceased.
PW9 Dr. K. Parameswaradas who conducted the postmortem examination in his report Ex.Pl8 noted extensive burns to the extent of 90% on the body of the deceased and opined that the deceased had died due to the extensive burns all over the body and that the injuries were sufficient in the ordinary course of nature to cause death.
During the investigation, the investigating officer made a request for the preservation of viscera of the deceased so that it could be sent for chemical examination, as according to the state 677 ment of PW6, the deceased had allegedly told him that she had consumed dettol to commit suicide and since she could not bear the pain she had set herself on fire.
The report of the chemical examiner exhibit
Pl6, however, revealed that no poison was detected and that the death had been caused due to extensive burns.
Further investigation into the case was, carried out by Md. Baduruddin PW15, Inspector of the Crime Branch.
During the investigation, the father of the deceased Venkataramana handed over letters Exs.
Pl P3 to the investigating officer.
Both the appellants had made themselves scarce and were not found in the village when search for them was made by the investigating officer.
The first appellant surrendered in the court on 10.11.1981 while the second appellant surrendered in the court on 7th of December, 1981.
After the investigation was over, challan was filed and both the appellants were sent up for trial in the Court of Sessions Judge East Godavari Division at Rajahmundry.
At the trial, the prosecution inter alia relied upon the following circumstances with a view to connect the appellant with the crime: (1) Motive; (2) Two dying declarations made to PW2 and to PW1; (3) Medical Evidence; (4) Conduct of the appellant immediately and after the occurrence; (5) Absconding of the appellants.
The appellants when examined under Section 313 of the Criminal Procedure Code denied their involvement and stated the case to be a false one.
They, however, produced no defence.
The learned Trial Court did not accept the prosecution version and held that there was no motive for the appellant to commit the crime; that the evidence of PWs 2 to 4 could not be relied upon; that PWI had made improvements in his statements recorded at the trial and, therefore, the oral dying declaration made to him could not be relied upon.
The Trial court also held that there had been unexplained delay in lodging report with the police.
The Trial Court placed reliance on the testimony of hostile 678 witness PW6 and held that the case was one of suicide and not of murder.
On those findings, the learned Sessions Judge acquitted both the appellants.
On an appeal, filed by the State, a Division Bench of the High Court of Andhra Pradesh set aside the judgment of the learned Sessions Judge and convicted both the appellants for an offence under Section 302/34 IPC.
Speaking for the Division Bench, K. Ramaswamy J. (as His Lordship then was) found no hesitation to hold PWl as a witness of truth and a wholly reliable witness and also opined that the evidence of 'PWs 2 and 3 was trustworthy and reliable.
The dying declarations made by the deceased to PW2 and subsequently to PWl were believed and relied upon.
It was held that report exhibit
P4 had been given by PWl immediately after the deceased was declared dead by the Doctor and therefore there was no delay much less unexplained delay in lodging the report.
While dealing with the conduct of the appellant, it was opined that their conduct was inconsistent with their innocence and consistent only with the hypothesis that appellant No. 2 had committed the act of pouring kerosene on the deceased and appellant No. 1 had lit fire.
With regard to the existence of motive, it was held that the appellants were actuated with a motive to do away with the life of the deceased for not getting the land registered in the name of the first appellant.
Finally, the High Court found that the chain of the established circumstances was complete and the circumstances were sufficient to conclusive establish that the appellants and the appellants alone had committed the crime of murder of the deceased.
The High Court held that the consideration of evidence on record and the reasoning of the Trial Court was most unsatisfactory and could not be sustained and therefore set aside the order of acquittal and convicted both the appellants for the offence under Section 302/34 IPC and sentenced each one of them to imprisonment for life.
Appearing for the appellants before us, Mr. Madhav Reddy, the learned Senior Counsel urged that since the Trial Court had acquitted the appellants, the High Court was not justified in recording an order of conviction as the findings recorded by the Trial Court could not be said to be perverse.
It was argued that the dying declarations were not worthy of reliance and the motive was feeble and not established.
Learned counsel submitted that the surrendering of the appellants themselves in the court on 10.11.1981 and 7.12.1981 itself was enough to show that they had no 679 guilty conscious and the prosecution was not justified in relying upon the conduct as an adverse conduct against the appellants.
While explaining the conduct of the appellants at the time of and after the occurrence, he submitted that since all neighbors had become hostile, out of fear the appellants did not act either to put off the fire or remove the deceased to the hospital.
In reply, learned counsel for the State argued that the findings of the Trial Court were not only conjectural but also perverse and the evidence of the witnesses was disbelieved on mere surmises.
It was submitted that the Trial Court did not property discuss the two dying declarations mad by the deceased and since the dying declarations have been proved by reliable evidence, those by themselves could form the basis of conviction of the appellants.
It was then submitted that the High Court after a careful appraisal of the evidence had rightly set aside the judgment of the Trial Court which suffered from illegality as well as manifest error and perversity.
Learned counsel submitted that the prosecution had established the case against the appellants beyond every reasonable doubt and their appeals deserve to be dismissed.
Admittedly, there is no eye witness in the case.
The case is sought to be established by the prosecution from circumstantial evidence.
In a case based on circumstantial, evidence, the settled law is that the circumstance from which the conclusion of guilt is drawn should be fully proved an these circumstances must be conclusive in nature.
Moreover, all the established circumstances should be complete and there should be no gap in the chain of evidence.
The proved circumstances must be consistent only wit the hypothesis of the guilt of the accused alone and totally inconsistent wit his innocence.
The courts have, therefore, the duty to carefully scrutinize the evidence and deal with each circumstance carefully and thereafter fin whether the chain of the established circumstances is complete or no before passing an order of conviction.
It is in the light of the above principles that we shall deal with various circumstances relied upon by the prosecution.
(1)Motive: In a case based on circumstantial evidence, motive as sums great significance as its existence is an enlightening factor in process of presumptive reasoning.
The motive in this case is alleged to be the greed of dowry.
680 On 18.5.1979, marriage between the appellant and the deceased was solemnised.
The deceased aged about 18 years was prosecuting her Intermediate course of study at that time.
She was the eldest of the five children of one Vempati Venkataramana, who at the relevant time was working as an Assistant Engineer with the Railways at Gorakhpur.
At the time of the marriage, the parents of the deceased had agreed to give Rs. 50,000 in cash, 50 sovereigns of gold and two acres of land as dowry.
The cash was paid at the time of the marriage itself alongwith 15 sovereigns of gold.
The parents of the deceased had promised to give the remaining 35 gold sovereigns and get the land also registered subsequently, though the possession of the land measuring about 3.70 acres was given to the appellant No. 1.
The mother in law of the deceased and her husband had been pressurising the deceased all along to bring the remaining sovereigns and also to get the land registered in the name of the first appellant.
She conveyed it to her mother PW7.
While the parents of the deceased agreed to get the land registered in the name of the deceased, the first appellant and his parents were insisting that the land should be got registered in his name and not in the name of the deceased.
Since that desire was not fulfilled, the deceased was being continuously harassed and ill treated.
A strick vigil was kept on her at the house of her in laws and she was not even allowed to meet anybody nor were the neighbors permitted to come and meet or talk to her.
She was being prevented from writing letters to her family also, but stealthy, she wrote letters Exs.
Pl 3 and got them posted through a neighbor.
The contents of those letters are rather revealing and expose the extent of the harassment to which the deceased was being subjected to by her mother in law and her husband.
After seeing the contents of the letters and with a view to find out the cause of her distress, PW1, her brother went to Dharmavaram on August 22, 1981, to the house of the deceased.
The deceased, however, was so terrorised that she could not speak to him freely.
She was surrounded by her husband and her mother in law, who did not talk to PWl at all to show their indifference.
From the evidence of the prosecution witnesses and particularly that of the mother of the deceased PW7, the immediate provocation was the insistence of the appellants that the land be got registered in the name of the husband and the reluctance ' of the parents of the deceased to do so and instead their desire to get it registered in the name of the deceased.
The oral evidence led by the prosecution in this behalf is wholly consistent.
In her letter exhibit
P2, the 681 deceased had clearly mentioned that she was getting her letters posted through PW4.
She requested her sisters to write letters to her in Hindi so that her in laws, who did not know Hindi, could not know what was being written.
In one of her letters, a part of which was addressed to her sister, she wrote: ". .I am not going to anybody 's house.
One day I went to the house of sister in law Radha to deliver the letter secretly.
Their mood was changed on account of going to their house.
That is why I stopped going.
" Do not mention even a single word in your letter that I have been writing to you.
Ask mother not to worry.
On hearing about your results write a letter without fail.
If I get an opportunity I will definitely write a letter. " In her letter exhibit
P1 to her father, she wrote: Father I am feeling much bore here because no one come to our house nor I am allowed to go their house Please always write letters.
So that I may be satisfied in seeing your letters.
If I may not give reply to your letter then you please don 't mind it.
You know here 's conditions.
Rest is O.K. Father you also take care of your health.
" In the same letter while addressing her sisters, she wrote: The lock is opened.
I am writing this letter secretly.
In reply do not write that you have received the letter.
If you write like that these people will become more angry She also wrote to her sister: not at house and there is no watch over me.
I am getting the letters posted through sister in law Radha secretly.
You write letters mostly in Hindi only so that even if they chanced to fall in the hands of any one, they cannot understand The tenor of her letters disclose the distressing state of affairs at the house 682 of her in laws.
These letters coupled with the evidence of her mother go to show how the deceased was being tormented and harassed.
It is indeed a shame and pity that within just two years of her marriage, her dream of a happy married life was shattered and she found herself almost as a prisoner and 'a frightened chicken ' who had to write letters to her parents and sisters 'secretly ' for the fear that if her in laws came to know they would "become more angry '.
She had to request her sisters to reply to her letters in Hindi so that "even if they chanced to fall in the hands of anyone, they cannot understand".
One can only imagine the plight of this young bride and the sadistic behavior born out of greed for dowry of her husband and mother in law.
Not having been able to get the land registered in the name of the first appellant appears to have frustrated them to the extent of murdering the young wife.
The evidence led by the prosecution to establish the existence of motive is wholly reliable and is also consistent.
The prosecution has successfully established that the appellants had strong and compelling motive to commit the crime because of her parents not agreeing to get the land registered in the name of the first appellant and their insistence to have the land registered in the name of their own daughter instead.
The motive, has, been conclusively established by the prosecution and we have no hesitation to hold that the prosecution has succeeded in establishing the existence of the motive for both the appellants to commit the crime conclusively and positively and we agree with the finding of the High Court in that behalf.
2.Dying Declarations: The next piece of circumstantial evidence relied upon by the prosecution are two dying declarations made by the deceased.
According to the prosecution case, the deceased made the first dying declara tion before PW2 when she after hearing her cries came to the house and found both the appellants and the father of appellant No. 1 coming out of the kitchen and the deceased lying on the floor engulfed in flames.
According to PW2, the deceased told her that her mother in law had poured kerosene on her and her husband had set her on fire.
This statement was also heard by PW3 & PW5.
The second dying declaration was made by the deceased to her brother PW1, after he was called by her to the kitchen.
The deceased, according to the prosecution case, on meeting her brother, took the palm of PWl into her own palms and inter alia told to him that "her mother in law poured kerosene on her and her husband set fire to her".
The statement made by the deceased to 683 PW1 was in Hindi.
Both the statements, as noticed above, relate to the circumstances leading to the cause of her death, as according to the medical evidence, the deceased died of 90% burn injuries.
Both the dying declarations are oral.
They have been made to friends and to the brother of the deceased respectively.
In view of the close relationship of the witnesses to whom the oral dying declarations were made, it becomes necessary for us to carefully scrutinize and appreciate the evidence of the witnesses to the dying declaration.
We have already adverted to the evidence of these witnesses (PW1, PW2, PW3) while narrating the prosecution case.
Indeed, PWl is the brother of the deceased and therefore a very close relation, but mere relationship cannot be a ground to discard his testimony, if it is otherwise found to be reliable and trustworthy.
In the natural course of events, the deceased who was on the verge of her death would have conveyed to her near and dear ones the circumstances leading to her receiving the burn injuries.
PW1 has given a very consistent statement and has reproduced the words of the deceased clearly and truthfully.
Nothing has been brought out in the cross examination to discredit his testimony at all.
He had at the earliest point of time disclosed as to what the deceased had told to him.
The discrepancy pointed out by learned counsel for the appellants as to whether the dying declaration was made to him by his sister when she was lying on the cot in the verandah, as stated in FIR Ex.P4, or while she was lying on the floor of the kitchen, is of an insignificant nature and could be either out of confusion or the gap of time between the making of the two statements.
Moreover, PW1 was not at all cross examined on the alleged discrepancy when he gave evidence in Court.
No explanation whatsoever was sought from him about the so called discrepancy.
PW1, the brother of the deceased appears to us to be a truthful witness and his testimony has impressed us.
He did not implicate the father of the appellant and gave evidence only about what he was actually told by his sister.
From our appreciation of the evidence of PW1, we agree with the view expressed by the High Court that "considering the case from all perspectives we have no hesitation to hold that P.W.1 is a witness of truth worthy of acceptance and so he is wholly a reliable witness.
exhibit
P4 is a voluntary statement given by P.W.1 and it lends corroboration to the evidence of P.W.1.
" Coming now to the evidence of PWs2 and 3.
The substratum of their evidence with regard to the dying declaration is that while that they were 684 in the kitchen of their own house, taking tea, they heard the cry of a lady and rushed to the house of the deceased, being her close neighbors.
They saw the deceased engulfed in flames sprawled on the floor of the kitchen.
They also saw both the appellants as well as the father of appellant No. 1 coming out of the kitchen to the verandah.
The distance between the house of PWs2 and 3 from the house of appellant is only 2 yards.
After PW2 took a bontha from the father in law of the deceased, to the annoyance of appellant No. 2, with a view to extinguish the fire, the deceased, on enquiry by the witness as to what had happened told her that 'my mother in law poured kerosene on me and my husband set me on fire".
The deceased had not implicated her father in law, though he was also present there ' PW3, father of PW2, had assisted PW2 to extinguish the flames and it was he who broke the string of the petticoat of the deceased and threw it away.
In the process PW3 himself suffered burn injuries.
His injuries were examined by the Doctor and found to be caused by fire.
The Trial Court doubted the testimony of PW3 on the ground that he had made some improvement in his evidence in court when he stated that he had heard the deceased screaming and saying that she was "being killed".
He had not stated so in his statement recorded during the investigation.
This, in our opinion, is hardly an improvement of any consequence because both in his statement in court as well as the one recorded under Section 161 Cr.
PC he has deposed that it was on hearing the 'screams ' of the deceased that he and his daughter rushed to the house of the decased.
In any event the so called improvement was not sufficient to discard his testimony.
Despite searching cross examination of both these witnesses, nothing has been brought out in their cross examination to discredit them or doubt their veracity at all.
After carefully analysing their evidence, we find PWs 2 and 3 as witnesses worthy of credence and trustworthy.
From the evidence of PWs 1, 2 and 3, both the dying declarations are proved to have been made by the deceased.
They are the statements made by the deceased and relate to the circumstances leading to her death.
Both the dying declarations are consistent with each other and appear to have been made by the deceased voluntarily and in the natural course of events.
They have a ring of truth about them.
Section 32(1) of the Evidence Act is an exception to the general rule that hearsay evidence is not admissible evidence and unless evidence is tested by cross examination, it is not credit worthy.
Under Section 32, when 685 a statement is made by a person, as to the cause of death or as to any of the circumstances which result in his death, in cases in which the cause of that person 's death comes into question, such a statement, oral or in writing, made by the deceased to the witness is a relevant fact and is admissible in evidence.
The statement made by the deceased, called the dying declaration, falls in that category provided it has been made by the deceased while in a fit mental condition.
A dying declaration made by person on the verge of his death has a special sanctity as at that solemn moment, a person is most unlikely to make any untrue statement.
The shadow of impending death is by itself the guarantee of the truth of the statement made by the deceased regarding the causes or circumstances leading to his death.
A dying declaration, therefore, enjoys almost a sacrosanct status, as a piece of evidence, coming as it does from the mouth of the deceased victim.
Once the statement of the dying person and the evidence of the witnesses testifying to the same passes the test of careful scrutiny of the courts, it becomes a very important and a reliable piece of evidence and if the court is satisfied that the dying declaration is true and free from any embellishment such a dying declaration, by itself, can be sufficient for recording conviction even without looking for any corroboration.
If there are more than one dying declarations, then the court has also to scrutinise all the dying declarations to find out if each one of these passes the test of being trustworthy.
The Court must further find out whether the different dying declarations are consistent with each other in material particulars before accepting and relying upon the same.
Having read the evidence of PWs 1 3 with great care and attention, we are of the view that their testimony is based on intrinsic truth.
Both the dying declarations are consistent with each other in all material facts and particulars.
That the deceased was in a proper mental condition to make the dying declaration or that they were voluntary has neither been doubted by the defence in the course of cross examination of the witnesses nor even in the course of arguments both in the High Court and before us.
Both the dying declarations have passed the test of creditworthiness and they suffer from no infirmity whatsoever.
We have therefore no hesitation to hold that the prosecution has successfully established a very crucial piece of circumstantial evidence in the case that the deceased had voluntarily made the dying declarations implicating both the appellants and disclosing the manner in which she had been put on fire shortly before her death.
This circumstance, therefore, has been established by the prosecution beyond every reasonable 686 doubt by clear and cogent evidence.
3.Medical Evidence: The next circumstance relied upon by the prosecution is the medical evidence which has been provided by the testimony of Dr. Parameswaradas PW9.
He deposed that the deceased had died of 90% burns and that kerosene smell was emitting from the deadbody.
According to the report of the chemical examiner, no poison was found in the viscera.
The chemical examiner 's report, coupled with the other evidence on record belies the suggestion made by the defence during the cross examination of some witnesses that with a view to commit suicide, the deceased had drunk dettol and when she could not bear the pain on account of consumption of dettol, she herself poured kerosene oil on herself and set herself on fire.
Rightly, this defence case was not pursued before us with any amount of seriousness by the learned counsel for the appellants.
The medical evidence, therefore fully corroborates the prosecution case and lends support to the dying declaration and more particularly the manner in which the deceased had been set on fire.
Conduct of the appellant immediately and after the evidence: The conduct of the appellants, son and mother, both at the time when the deceased lay burning on the floor of the kitchen and afterwards till she succumbed to the burn injuries is the next circumstance relied upon by the prosecution to connect the appellants with the crime.
From the testimony of PWs 2, 3 and 4, who are the immediate neighbors of the appellant and the deceased, they had heard the cry of the deceased and rushed to her house.
PWs 2 and 3 found the deceased lying on the floor of the kitchen engulfed in flames while both the appellants and father in law of the deceased were coming out of the kitchen in the verandah.
None of the two appellants or the father in law made any attempt whatsoever to extinguish the fire and save the deceased.
The raised no alarm.
They stood there as if waiting for her death, rather than make any effort to save her.
Their conduct, thus, runs consistent with the hypothesis of their guilt and betrays that of an innocent persons.
In their statements under Section 313 of Cr. PC they did not deny their presence in the house at the time of the occurrence, but denied their involvement in the crime.
The normal human conduct of any person finding someone engulfed in flames would be to make all efforts to put off the flames and save the life of the person.
Though, the appellants were the closest relations 687 of the deceased, they did not do anything of the kind.
Let alone making any effort to extinguish the fire, according to PW2 when the father in law of the deceased, at her request, was giving her the bontha to extinguish the flames, appellant No. 2, the mother in law of the deceased, objected to the same.
This conduct speaks volumes about the extent of hatred which the mother in law exhibited towards her daughter in law.
They rendered no first aid to the deceased.
Their conduct at the time of the occurrence, therefore, clearly points towards their guilt and is inconsistent with their ingnocence the appellants did not even accompany the deceased to the hospital in the matador van.
Had the husband not been a party to the crime, one would have expected that he would be the first person to take steps to remove the deceased to the hospital and leave no stone unturned to save her life.
An innocent mother in law would have also done the same, even if she had no love or emotional feelings for her daughter in law.
Neither the husband nor the mother in law of the deceased took any steps to remove the deceased to the hospital, let alone accompany her to the hospital.
This conduct also is inconsistent with their innocence and consistent only with the hypothesis, as stated by the deceased in her dying declarations, that the mother in law had poured kerosene on her while her husband had lit fire and put her on flames.
Mr. Reddy, the learned senior counsel appearing for the appellants submitted that since the neighbors and other relations of the deceased had almost taken over the house and the person of the daughter in law, the appellants were afraid of being beaten and as such they rendered no aid to the deceased needs a notice only to be rejected.
No suggestion whatsoever on these lines was made to any of the witnesses and in any event such an explanation betrays common sense.
Since, the deceased had admittedly suffered burn injuries in the kitchen of her house, there was an obligation on the part of the appellants and the father in law of the deceased, who have admitted their presence in the house at the time of occurrence, to explain the circumstances leading to the deceased dying of 90% burn injuries.
None has been offered.
The theory of suicide was put up only as an argument of despair.
While discussing the motive and the dying declarations, we have come to the conclusion that the deceased died as a result of the designed move on the part of both the appellants to put an end to her life and she did not commit suicide as was sought to be suggested during cross examination by the defence to some witnesses.
The theory of suicide has no legs to stand upon.
The conduct of the appellants who did not try to extinguish the fire or 688 render any first aid to her, also totally betrays the theory of suicide and we agree with the High Court that the theory as set up by the appellants is highly unbelievable or acceptable.
The prosecution has, thus, successfully established that the conduct of both the appellants both at the time of the occurrence and immediately thereafter is consistent only with the hypothesis of the guilt of the appellants and inconsistent with their innoncence.
5) Absconding.
Prosecution has also relied upon the circumstances of the absconding of the appellants to prove its case.
A closer link with the conduct of the appellants both at the time of the occurrence and immediately thereafter is also the circumstance relating to their absconding.
Md. Badruddin PW15, the investigating officer, deposed that he had taken up the investigation of the case and having examined PWsl 4 had caused search to be made for the accused but they were not found in the village and despite search, they could not be traced.
Appellant No. 1 surrendered before the court on 10.11.1981 while appellant No. 2 surrundered in the court on 7.12.1981.
No explanation, worth the name, much less a satisfactory explanation has been furnished by the appellants about their absence from the village till they surrendered in the court in the face of such a gruesome 'tragedy '.
Indeed, absconding by itself may not be a positive circumstance consistent only with the hypothesis of guilt of the accused because it is not unknown that even innocent persons may run away for fear of being falsely involved in a criminal case and arrested by the police, but coupled with the other circumstances which we have discussed above, the absconding of the appellants assumes importance and significance.
The prosecution has successfully established this circumstance also to connect the appellants with the crime In view of the above discussion and our appraisal and analysis of the evidence on record, we have no hesitation to hold that the.prosecution has successfully established all the circumstances appearing in the, evidence against the appellants by clear, cogent and reliable evidence and the chain of the established circumstances is complete and has no gaps whatsoever and the same conclusively establishes that the appellants and appellants alone committed the crime of murdering the deceased on the fateful day in the manner suggested by the prosecution.
All the established circumstances are consistent only with the hypothesis that it was the appellants alone 689 who committed.the crime And the circumstances are inconsistent with any hypothesis other than their guilt.
It is most unfortunate that the husband of the deceased not only failed to perform his duties and obligations as husband to protect and take care of his wife as per the marriage vows and instead joined his mother in the most degrading and cold blooded murder of the young innocent bride.
Of late there has been an alarming increase in cases relating to harassment, torture, abetted suicides and dowry deaths of young innocent brides.
This growing cult of violence and exploitation of the young brides, though keeps on sending shock waves to the civilised society whenever it happens, continues unabated.
There is a constant erosion of the basic human values of tolerance and the spirit of "live and let live '.
Lack of education and economic dependence of women have encouraged the greedy perpetrators of the crime.
It is more disturbing and sad that in most of such reported cases it is the woman who plays a pivotal role in this crime against the younger woman, as in this case, with the husband either acting as a mute spectator or even an active participant in the crime, in utter disregard of his matrimonial obligations.
In many cases, it has been noticed that the husband, even after marriage, continues to be 'Mamma 's baby and the umbilical cord appears not to have been cut even at that stage.
We are here tempted to recall the observations of R.N. Mishra, J. (as His Lordship then was) in State (Delhi Administration) vs Laxman & Ors.
Appeals 93 and 94 of 1984 decided on 23.9.1985, while dealing with a bride burning case.
It was observed: "Marriage, according to the community to which parties belong, is sacramental and is believed to have been ordained in heaven.
The religious rites performed at the marriage altar clearly indicate that the man accepts the woman as his better half by assuring her protection as guardian, ensuring food and necessaries of life as the provider, guaranteeing companionship as the mate and by resolving that the pleasures and sorrows in the pursuit of life shall be shared with her and Dharma shall be observed.
If this be the concept marriage, there would be no scope to look for worldly considerations, particularly dowry.
When a girl is transplanted from her natural setting into 690 an alien family, the care expected is bound to be more than in the case of a plant.
Plant has fife but the girl has a more developed one.
Human emotions are unknown to the plant life.
In the growing years in the natural setting the girl now a bride has formed her own habits, gathered her own impressions, developed her own aptitudes and got used to a way of life.
In the new setting some of these have to be accepted and some she has to surrender.
This process of adaptation is not and cannot be one sided.
Give and take, live and let live, are the ways of life and when the bride is received in the new family she must have a feeling of welcome and by the fond bonds of love and affection, grace and generosity, attachment and consideration that she may receive in the family of the husband, she will get into a new mould; the mould which would last for her life.
She has to get used to a new set of relationships one type with the husband, another with the parents in law, a different one with the other superiors and yet a different one with the younger ones in the family.
For this she would require loving guidance.
The elders in the family, including the mother in law, are expected to show her the way.
The husband has to stand as a mountain of support ready to protect her and espouse her cause where she is on the right and equally ready to cover her either by pulling her up or protecting her willingly taking the responsibility on to himself when she is At fault.
The process has to be a natural one and there has to be exhibition of cooperation and willingness from every side.
Otherwise how would the transplant succeed?" Awakening of the collective consciousness is the need of the day.
Change of heart and, attittide is what is needed.
If man were to regain his harmony with others and replace hatred, greed, selfishness and anger by mutual love, trust and understanding and if woman were to receive education and become economically independent, the possibility of this pernicious social evit dying a natural death may not remain a dream only.
The legislature, realising the gravity of the situation has amended the laws and provided for stringent punishments in such cases and even permitted the raising of presumptions against an accused in cases of unnatural deaths of 691 the brides within the first seven years of their marriage.
, The was enacted in 1961 and has been amended from time to time, but this piece of soicial legislation, keeping in view the growing menance of the social evil also does not appear to have served much purpose as dowry seekers are hardly brought to book and convictions recorded are rather few.
Laws are not enough to combat the evil.
A wider social movement of educating women of their rights, to conquer the menance, is what is needed more particularly in rural areas where women are still largely uneducated and less aware of their rights and fall an easy prey to their exploitation.
The role of courts, under the circumstances assumes greater importance and it is expected that the courts would deal with such cases in a more realistic manner and not allow the criminals to escape on account of procedural technicalities or insignificant lacunas in the evidence as otherwise the criminals would receive encouragement and the victims of crime would be totally discouraged by the crime going unpunished.
The courts are expected to be sensitive in cases involving crime against women.
The verdict of acquittal made by the Trial Court in this cast is an apt illustration of the lack of sensitivity on the part of the Trial Court.
It recorded the verdict of acquittal on mere surmises and conjectures and disregarded the evidence of the witnesses for wholly insufficient and insignificant reasons.
It ignored the vital factors of the case without even properly discussing the same.
The High Court was, therefore, perfectly justified in convicting the appellants for the offence of murder punishable under Section 302 readwith Section 34 IPC and sentencing each one of them to suffer imprisonment for life.
We uphold the conviction and sentence of the appellants for the offence under Section 302/34 IPC and dismiss their appeal.
The appellants were directed to be released on bail by this Court on 30.3.1989.
Their bail bonds are cancelled and they are directed to be taken in to custody to suffer the remaining period of their sentence.
V.P.R. Appeal dismissed.
| In a Notification dated 28.9.1972, with a view to induce the sugar factories (respondents) to produce more and also to commence their operations early in the sugar year (the year commencing on and with 1st October and ending with the 30th of September of the following year) a rebate was provided.
The scheme of the Notification was (1)If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, suchfactory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned.
(2)Rebate for the period 1st December 1972 to 30th April, 1973 was available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned.
(3)For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year.
The said rebate was available again only with respect to the excess production.
759 (4)For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twently per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year.
This rebate too was confined to the excess production.
However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base pariod '.
The other three Notifications dated 4.10.73, 12.10.74 and 30.9.76 were similar.
All the four Notifications were applicable to the Sugar years 1972 73, 1973 74, 1974 75 and 1976 77, respectively.
The respondents sugar factories did not produce any sugar in one or the other of the four blocks (mentioned in the Table contained in the Notification) in the base year (previous sugar year).
During the current sugar year, they produced certain quantity of sugar during that block period.
The respondents contended that they were entitled to the benefit of rebate provided in clause (1) of the Table contained in the Notification, whereas the Revenue submitted that they were not entitled to the benefit of rebate.
The claim for rebate made by the respondnets was allowed in the first instance, but later proceedings were initiated to recover back, or re adjust, the benefit already allowed.
These disputes were carried to the High Courts.
Almost all the High Courts except Karnataka held in favour of the respondents.
In Patna High Court, there was a conflict of opinion.
Hence this batch of appeals by the Revenue contending that the benefit of rebate was available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugarproduced during the corresponding "period in 1971"; that nil production could not be equated to "the quantity of sugarproduced" in clause (1); that clause (1) of the first proviso in the 1972 Notification has 760 to be harmonised with the several clauses in the table; and that no interpretation should be adopted which rendered any part of the Notification superfluous.
Dismissing all.
the civil appeals, except Civil Appeal Nos. 3831 32 of 1988, this Court, HELD : 1.01.
The several clauses in the Notification must be read together, harmonised and reasonably understood without ignoring the underlying object and purpose of the notification.
An interpretation which leads to absurd consequences should be avoided.
[770 E] 1.02.The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year.
The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise.
Running the factories during the off season (off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production.
main issue is whether the words "the quantity of sugar produced during the corresponding period. " do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period? It does take in.
Holding otherwise would have this absurd consequence: a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quintals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify.
[770 G H] 1.04.The Idea behind the notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be.
Where a factor; has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded.
[771 B D] 761 1.05.The case of October November appears to be rather an exception.
Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors.
Indeed, these unfavorable factors appear to be present to a large extent even during the 'months June to September.
The notifications were evidently meant to compensate the factory owners for producing during these months as well.
1772 C D] 1.06.One must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits.
[772 E] 1.07.No manufacturer produces sugar merely for the sake of rebate.
Rebate is an inducement, an additional attraction.
It is not as if without rebate provided by these notifications, no one would have produced sugar.
[771 D] 1.08.There is no arithmetical difficulty in working out 115% of zero; it is zero.
What applies to clause(1) applies equally to clauses (2), (3) and (4).
It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year.
[771 E F] 1.09.The interpretation placed upon the said notifications by the majority of the High Courts is the correct one.
The view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988 and the view taken by the Patna High Court in ill Civil Writ Jurisdiction Case No. 865 of 1966 are not correct.
basis for the percentages prescribed in the Notification dated 12th October.
1974 the average production of the previous five years and not the excess production.
By way of illustrates, take a factory which produces 2500 tons during the period Dec.1, 1974 to Sept. 30, 1975 as against the average production of 1000 tons during the corresponding periods in the five previous sugar years.
Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the corresponding periods of the five previous sugar years ie., 1000 quintals should be deducted first, which means the excess production during the said period during the current year is 1500 quintals.
7.5% of 1000 quintals is 75 quintals.
On this quantity 762 of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy Sugar.
Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal In the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar.
The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs. 50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar.
Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintall in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugr.
The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar.
[774 B E] Etikoppaka Co operative Agricultural Society vs Union of India, ; ; 1982 (59) E.L.T. 409 (Allahabad); & Haryana); and 1987 (30) E.L.T. 260 (Orissa), approved.
[768 H, 769 A]
|
Civil Appeal No. 705 of 1962.
Appeal by special leave from the Award dated September 19, 1961 of the Fourth Industrial Tribunal, West Bengal in Case No. VIII 42 of 1961.
H. N. Sanyal, Solicitor General of India and P. E. Chatterjee, for the appellant.
D.L. Sen and Janardhan Sharma, for the respondents.
May 2.
The judgment of the Court was delivered by GAJENDRAGADKAR J.
This appeal arises out of an industrial dispute between the appellant, Khardah Co. Ltd., and the respondents, its workmen.
The dispute was in regard to the, dismissal of the appellant 's employee, Samiran jadav.
The respondents alleged that the said dismissal was unjustified, whereas, according to the appellant, the said employee had been properly and validly dismissed.
The dispute which was referred to the 4th Industrial Tribunal, West Bengal, for its adjudication was whether the said dismissal was justified, and to what relief, if any, was the workman entitled? The Tribunal has held that the dismissal was unjustified and so, it has directed the appellant to reinstate the said employee to his old post within a month from the date of the publication of the award.
It has also ordered that the period starting from the date of the dismissal till the date of reinstatement should be treated as leave without pay and as such, should be counted towards the length of service.
It is against this award that the appellant has come to this Court by special leave.
509 The respondent 's case was that jadav had been dismissed by the appellant mala fide with the motive of victimising him for his trade union activities.
jadav was the Organising Secretary of the Union and since he supported the Union 's demands very strongly, the appellant wanted to get rid of him.
It appears that jadav had been working as a weaver for some years past.
He was confirmed in service with effect from April 12, 1954.
On September 19, 1960, he went on a week 's leave.
When he returned on September 26, 1960, he was asked to work on machine producing twill, though, normally, he was assigned work on a plain machine.
jadav was not accustomed to work on the complicated machine which produces twill and so, he requested the management that he should be asked to do his usual work on a plain machine.
This request was, however, turned down Being unaccustomed to work on the machine producing twill, jadav met with an accident on September 27, 1960, and was grantedmedical leave for a week ending on Saturday, October 1, 1960.
On October, 3 1960, when he resumed duty, he again requested the management that he should be permitted to work on the plain machine, but when his request was turned down, he told the management that he would work on the twill machine in the second shift which starts from I P.M.
On that day, another employee Mahboob who was ailing and had been on leave, asked for further leave which was refused and he fell unconscious while he was going to operate his machine.
As a result, 700 weavers of the appellant stopped work and the weaving section could not resume work at 1 P. M.
The management then declared a lock out on October 5, 1960 which continued until October 29, 1960.
On October 3, 1960, the management served a charge sheet on jadav in which it was alleged that jadav had wilfully disobeyed the lawful 510 and reasonable order of his superior and had acted in a manner subversive of discipline.
The case against him was that he had moved from one place to another in the weaving Department and incited workers of the said department to go on strike.
The management alleged that by his conduct, jadav had committed misconduct under Rule 14(c) (i) and (viii) of the Standing Orders.
jadav was called upon to offer his explanation within 24 hours after receipt of the charge sheet.
After jadav gave his explanation, an enquiry was held.
At the initial stages of the enquiry, jadav appeared, but, later, he did not take part in the proceedings.
The appellant contends that jadav deliberately refrained from taking part in the proceedings, whereas according.
to the respondents, the enquiry was conducted unfairly, and so, it became impossible for jadav to participate in it.
This enquiry was conducted by the Manager himself After the enquiry was over, the Manager decided that jadav was guilty of the charge, and so, dismissed him on November 21, 1960.
The respondents ' case was that the dismissal was purely vindictive and was not justified at all.
On the other hand, the appellant 's case was that jadav had been working in the weaving department both on plain looms and on looms that produce twill.
When he returned to duty on October 3, 1960, the departmental Overseer, Mr. jha asked Jadav to go to his loom; but he refused to obey his orders.
The appellant further alleged that jadav moved inside the weaving department and incited the workers to stop work.
The appellant also pleaded that a proper enquiry had been held against jadav and it was as a result of the said enquiry that he was dismissed for misconduct under Rule 14 (c)(i) & (viii) of the Company 's Standing Orders.
Regarding the incident of Mahboob, the appellant alleged that 511 Mahboob was absent on October 3, 1960 and, therefore, no question of his working on any machine arose on that day.
In other words, the appellant 's contention was that the Union 's version that the strike was spontaneous because Mahboob fainted, was untrue and the strike was in substance, the result of the instigation of jadav.
Before the Tribunal, some oral evidence was led by the parties and reliance was placed by the appellant on the proceedings of the enquiry itself.
The Tribunal held that the management had deliberately suppressed the fact that Mahboob had gone to the mill on October 3, and prayed for extension of leave which was refused, and so, the Tribunal came to the conclusion that the strike could not have been instigated by jadav.
The Tribunal further commented on the fact that after the enquiry was held, no finding was recorded by the Manager who held the enquiry, and it appeared to the Tribunal that the conclusions on which the management presumably acted in dismissing jadav were of such a character that "no person acting fairly and honestly could have reached them".
The Tribunal also held that jadav was not used to work on a twill loom, and so, his request that he should be allowed to work on a plain loom was not unjustified.
Its conclusion, therefore, was that a grave charge had been unjustly framed against jadav and that showed want of good faith and Vindictiveness.
On these findings, the Tribunal answered the question in favour of the respondents and directed reinstatement of jadav.
On behalf of the appellant, the learned Solicitor General has strenuously urged before us that the appellant has held a proper domestic enquiry and has dismissed jadav because the management thought that the enquiry disclosed the fact that the charges framed against jadav had been established.
He contends that it is firmly established by decisions of this Court 512 that an Industrial Tribunal will not interfere with the action of the management in dismissing its employee after holding an enquiry into his alleged misconduct unless it is shown that the management has not acted in good faith; or that the dismissal amounts to victimisation or unfair labour practice, or where the management has been guilty of a basic error, or violation of a principle of natural justice, or when on the materials, the finding is completely baseless or perverse, vide Indian Iron & Steel Company Ltd. vs Their Workmen.
There is no doubt that this Court has consistently refrained from interfering with the conclusions reached.
by the enquiry officer who Conducts domestic enquiries against industrial employees unless one of the four tests laid down in the case of the Indian Iron & Steel Co. Ltd. (1) is satisfied, because we have generally accepted the view that if the enquiry is fairly held and leads to the conclusion that the charge framed against the employee is proved, the Industrial 'Tribunal should not sit in appeal over the finding recorded at the said enquiry and should not interfere with the management 's right to dismiss a workman who is found guilty of misconduct.
It would be noticed that the essential basis on which this view is founded is that the enquiry conducted by the management before a domestic tribunal must be a fair and just enquiry and in bringing home to the workman the charge framed against him, principles of natural justice must be observed.
Normally, evidence on which the charges are sought to be proved must be led at such an enquiry in the presence of the workman himself.
It is true that in the case of departmental enquires held against public servants, this Court has observed in the State of Mysore vs section section Makapur (2) that if the deposition of a witness has been recorded by the enquiry officer in the absence of the public servant and a copy thereof is given to him, and an opportunity is given to him (1) (1958) 1 I L. J. 260.
(2) ; 513 to cross examine the witness after he affirms in a general way the truth of his statement already recorded, that would conform to the requirements of natural justice; but as has been emphasised by this Court in M/s Kesoram Cotton Mills Ltd. vs Gangadhar (1), these observations must be applied with caution to enquiries held by domestic Tribunals against the industrial employees.
In such enquiries, it is desirable that all witnesses on whose testimony the management relies in support of its charge against the workman should be examined in his presence.
Recording evidence in the presence of the workman concerned serves a very important purpose.
The witness knows that he is giving evidence against a particular individual who is present before him, and therefore, he is cautious in making his statement.
Besides, when evidence is recorded in the presence of the accused person, there is no room for persuading the witness to make convenient statements, and it is always easier for an accused person to cross examine the witness if his evidence is recorded in his presence.
Therefore, we would discourage the idea of recording statements of witnesses exparte and then producing the witnesses before the employee concerned for cross examination after serving him with such previously recorded statements even though the witnesses concerned make a general statement on the latter occasion that their statements already recorded correctly represent what they stated.
In our opinion, unless there are compelling reasons to do so, the normal procedure should be followed and all evidence should be recorded in the presence of the workman who stands charged with the commission of acts constituting misconduct.
In this connection, it is necessary to point out that unlike domestic enquiries against public servants to which article 311 of the Constitution applies, in industrial enquiries, the question of the bona fldes or mala fides off the employer is often at issue. 'If it (1) [1964] Vol. 2 section C. R. 809.
514 is shown that the employer was actuated by a desire to victimise a workman for his trade union activities, that itself may, in some cases, introduce an infirmity in the order ' of dismissal passed against such a workman.
The question of motive is hardly relevant inenquiries held against public servants, vide UnionTerritory of Tripura vs Gopal Chandra Dutta Choudhuri (1).
That is another reason why domestic enquiries in industrial matters should be held with scrupulous regard for the requirements of natural justice.
Care must always be taken to see that these enquiries are not reduced to an empty formality.
Take the present case where, after the enquiry was held, the Manager who held the enquiry has not recorded any findings, and so, we do not know what reasons weighed in his mind and how he appreciated the evidence led before him.
The learned Solicitor General contends that there was hardly any need to record any findings or to make a formal report in the present case, because the Manager who held the enquiry was himself competent to dismiss the employee.
We are not impressed by this argument.
The whole object of holding an enquiry is to.
enable the enquiry officer to decide upon the merits of the dispute before him, and so, it would be idle to contend that once evidence is recorded, all that the employer is expected to do is to pass an order of dismissal which impliedly indicates that the employer accepted the view that the charges framed against the employee had been proved.
One of the tests which the Industrial Tribunal is entitled to apply in dealing with industrial disputes of this character is whether the conclusion of the enquiry officer was perverse or whether there was any basic error in the approach adopted by him.
Now, such an enquiry would be impossible in the present case because we do not know how the enquiry officer approached the question and what conclusions he C. R. 266.
515 reached before he decided to dismiss jadav.
In our opinion, therefore, the failure of the Manager to record any findings after holding the enquiry constitutes a serious infirmity in the enquiry itself.
The learned Solicitor General suggested that we might consider the evidence ourselves and decide whether the dismissal of jadav is justified or not.
We are not prepared to adopt such a course.
If industrial adjudication attaches importance to domestic enquiries and the conclusions reached at the end of such enquiries, that necessarily postulates that the enquiry would be followed by a statement containing the conclusions of the enquiry officer.
It may be that the enquiry officer need not write a very long or elaborate report ; but since his findings are likely to lead to the dismissal of the employee, it is his duty to record clearly and precisely his conclusions and to indicate briefly his reasons for reaching the said conclusions.
Unless such a course is adopted, it would be difficult for the Industrial Tribunal to decide whether the approach adopted by the enquiry officer was basically erroneous or whether his conclusions were perverse.
Indeed, if the argument urged before us by the learned Solicitor General is accepted, it is likely to impair substantially the value of such domestic enquiries.
As we have already observed, we must insist on a proper enquiry being held, and that means that nothing should happen in the enquiry either when it is held or after it is concluded and before the order of dismissal is passed, which would expose the enquiry to the criticism that it was undertaken as an empty for mality.
Therefore, we are satisfied that the Industrial Tribunal was right in not attaching any importance to the enquiry held by the Manager in dealing with the merits of the dispute itself on the evidence adduced before it.
It is well settled that if the enquiry is held to be unfair, the employer can lead evidence before the Tribunal and justify his action, but in such a case) the question as to whether the dismissal of The employee is justified or not would be open before the Tribunal and the Tribunal will consider the merits ,if the dispute and come to its own conclusion without having any regard for the view taken by the management in dismissing the employee.
If the enquiry is good and the conduct of the management is not mala fide or vindictive, then, of course, the Tribunal would not try to examine the merits of the findings as though it was sitting in appeal over the conclusions of the enquiry officer.
In the present case, the Tribunal has come to the conclusion that the dismissal of jadav was not effected in good faith and has been actuated by a desire to victimise him for his trade union activities.
That is a conclusion of fact which cannot be said to be perverse, and so, it is not open to the,appellant to challenge its correctness of the merits before us.
There is one point to which we ought to refer before we part with this appeal.
It appears that the main dispute between the parties was whether the strike on October 3, 1960, was spontaneous, or had been instigated by jadav.
The respondents contended that the treatment given by the management to Mahboob caused this strike and 700 weavers struck work spontaneously, whereas the appellant urged that Mahboob was not present on the said date, and so, the story that his request for leave was not acceded to and he had to work is altogether false and the strike had really been instigated by jadav.
On this point, the Tribunal has made a categorical finding against the appellant and in doing so, it has relied upon the minutes of the Emergency Works Committee meeting held on October 3, 1960, at 3 P.M. with the Manager himself in the chair.
These minutes show that when an enquiry was made as to why the strike had commenced, it was definitely reported to the Committee that Mahboob who had 517 gone on leave, had extended his leave and after the expiry of the extended leave, he reported or October 3, and pleaded that he was still unwell and should be given still further leave, but "nobody paid any heed to his prayer", and so, presumably he had to resume duty.
The minutes further show that the Labour Officer informed the members of the Com mittee that Mahboob had produced a certificate of fitness on September, 22, 1960 and after discussion, it was unanimously decided to refer his case to the Mill 's Medical Officer on whose recommendation the leave should be considered.
These minutes, therefore, clearly prove that Mahboob had gone to the Mill on October 3, had asked for further leave, and his request for further leave was not granted.
We ought to add that these minutes have been signed by the joint Secretary on the employer 's side and the joint Secretary on the employees ' side, and their correctness cannot be impeached.
It is in the light of these statements that the plea made by the appellant before the Tribunal had to be considered by it.
The plea specifically made was that Mabboob was absent on October 3, and, therefore, there was no question of his working on any machine.
This plea would seem to suggest that Mahboob was absent from the Mill and that undoubtedly is not true.
The learned Solicitor General invited us to consider this plea in the light of the statement made by one of the witnesses in the domestic enquiry.
This statement was that Mahboob and the witness had gone to the Labour Officer for extension of leave to Mahboob and the Labour Officer had granted leave.
This statement would show that leave had been granted to Mahboob in the morning of October 3, but as 'we have already seen, the Labour Officer himself told the members of the Works Committee at 3 P.M. on the same day that leave had not been granted to Mahboob because he had produced 518 a certificate of fitness dated September 22, and the Works Committee had resolved that Mahboob 's case should be referred to the Mill 's Medical Officer on whose recommendation action should be taken.
Thus, there can be not doubt that even if the plea made by the appellant is liberally construed and is read in the light of the statement made by one of the witnesses at the domestic enquiry, the Industrial Tribunal was right in holding that the stand taken by the appellant was wholly untrue and that Mahboob had not been given leave on October 3.
That being so, if the Industrial Tribunal took the view that the refusal of the management to give leave to Mahboob exasperated the workmen, we cannot hold that its conclusion is erroneous or that its propriety can be successfully challenged before us.
The incident in regard to Mahboob forms the main background of the strike and the anxiety of the appellant was to show that Mahboob was not present on that date.
Therefore, once the Industrial Tribunal came to the conclusion that the version given by the appellant was untrue, it naturally changed the complexion of the whole of the charge sheet framed by the appellant against jadav.
That is why the Industrial Tribunal came to the conclusion that the conduct of the appellant in dismissing jadav showed lack of good faith and appeared to have been in spired by the desire to victimise jadav for his trade union activities.
The learned Solicitor General commented on the fact that the Tribunal had allowed the respondents to call for the register of trade unions after the arguments had been heard before it.
It appears that both the parties appeared before the Tribunal on January 19, 1961, when arguments were heard and the award was reserved.
The Union then filed an application praying that the trade union record may be called for, and the Tribunal ordered that the record be called for.
The grievance made by the 419 learned Solicitor General is that it is improper to have allowed additional evidence to be called for after the arguments had been heard.
We do not think there is any force in this argument, because the only purpose for which the record was called for by the Union was to show that jadav was the Organising Secretary of the Union.
Since that fact was presumably disputed by the appellant in arguing the case before the Tribunal, the Union urged that the record kept by the Registrar of Trade Unions would show that the appellant 's plea was not well founded.
If, in such circumstances, the Tribunal sent for the record to satisfy itself 'that the record showed that jadav was the Organising Secretary of the Union, we do not think any serious grievance can be made by the appellant about the conduct of the Tribunal.
It is perfectly true that in dealing with industrial matters, the Tribunal cannot allow evidence to be led by one party in the absence of the other, and should not accept the request of either party to admit evidence after the case has been fully argued unless both the parties agree.
In the present case, however, what the Tribunal has done, is merely to send for authenticated record to see whether jadav was the Organising Secretary of the Union or not.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The father of respondent No. 1, who was the Zamindar, filed a suit for the eviction of Ramprasad, the father of appell ants, from certain plots of land.
The suit was decreed and the Zamindar took possession of the land.
Ramprasad filed an appeal before the Additional Commissioner but the same was dismissed .
He preferred a second appeal before the Board of Revenue during the pendency of which the matter was compromised whereunder he was recognised as tenant of the land in dispute and the order of eviction was; thus nullified.
He applied for restitution of possession under section 144 of the Code of Civil Procedure.
The application was resisted by Dataram and others who had been inducted as tenants on these plots of land during the pendency of the appeals.
The trial court allowed the application but its order was reversed by the Additional Commissioner who held that the newly inducted tenants could not be dispossessed.
Its order was affirmed by the Board of Revenue in revision.
Thereafter fie filed a petition under article 226 of the Constitution in the High Court challenging the decision of the Board of Revenue, but that petition was dismissed on merits.
No appeal was attempted to be filed against the order of the High Court either by applying for a certificate or moving this Court for special leave under article 136.
The appellants have instead come to this Court in appeal by special leave against the order of the Board of Revenue.
A preliminary objection was raised on behalf of of the respondent that the appeal was not maintainable as it was barred by res judicata.
Held, that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings. 829 Daryao vs State of U. P., [19621 1 section C. R. 574 and Indian Aluminium Co. Ltd. V. The Commissioner of Income tax, West Bengal, (1961) 43 , relied on.
Chandi Prasad Chokhani vs State of Bihar, [1962] 2 section C. R. 276, explained.
|
No. 1232 of 1986.
(Under Article 32 of the Constitution of India).
C.S. Vaidayanathan and S.R. Sethia for the Petitioner.
A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by 977 SEN, J.
The short point involved in this petition under article 32 of the Constitution is whether linguistic minority educational institutions like the Andhra Education Society are governed by sub section
(4) of section 8 of the Delhi School Education Act, 1973.
The petitioner Smt.
Y. Theclamma, Vice Principal, Andhra Education Society Secondary School, Prasad Nagar, New Delhi challenges the legality of an order passed by the managing committee of the Andhra Education Society, New Delhi dated April 23, 1986 placing her under suspension pending a departmental inquiry against her.
The facts lie within a narrow compass.
The Andhra Educa tion Society is a society formed under the Societies Regis tration Act, 1860 with a view to imparting education to the children belonging to the Andhra community and others in Delhi.
It runs as many as four schools a senior secondary school at Deen Dayal Upadhyaya Marg, a secondary school at Prasad Nagar, a middle school at Janak Puri and another at East of Kailash.
The first three of these are recognised by the Director of Education, Delhi Administration and are aided by the Government to the extent of 95%.
The petitioner is thus employed in a government aided school.
By the im pugned order dated April 23.
1986, the management instituted a departmental inquiry against the petitioner on certain charges and placed her under suspension in exercise of r. 115 of the Delhi School Education Rules, 1973 pending the inquiry.
A copy of the impugned order of suspension was forwarded on the same day to the Director of Education.
On the next day i.e. on April 24, 1986, the management ad dressed a letter to Deputy Director of Education, District West, New Delhi formally intimating that the petitioner had been placed under suspension pending inquiry on a charge of misconduct as specified for the reasons mentioned in the statements of charges and of allegations forwarded.
On that day, the petitioner brought a suit for perpetual injunction against the management being Civil Suit No. 213/86 in the Court of the Subordinate Judge, First Class, Delhi.
She also made an application for grant of temporary injunction under Order XXXIX, r. 1 of the Civil Procedure Code, 1908 for restraining the managing committee from proceeding with the departmental inquiry.
The temporary injunction was sought on the ground that the managing committee was not duly consti tuted and besides, the impugned order of suspension was violative of sub section
(4) of section 8 of the Act.
On the same day.
the learned Subordinate Judge passed an order for maintain ing the status quo.
However, the management entered appear ance and applied for vacating the injunction on the ground 'that the petitioner had already been suspended on April 23, 1986.
It also pleaded that the school was being established and 978 administered by the Andhra Education Society which being a linguistic minority educational institution was protected under article 30(1) of the Constitution and therefore the provisions of the Act and in particular of sub section
(4) of section 8 were not applicable.
The learned Subordinate Judge by his order dated August 20, 1986 following the decision of the Delhi High Court in S.S. Jain Sabha (of Rawalpindi) Delhi vs Union of India & Ors., ILR (1976) 2 Del. 61 held that the Andhra Education Society was protected under article 30(1) and was therefore not governed by sub section
(4) of section 8 of the Act and accordingly dismissed the application for grant of temporary injunction.
Instead of moving the High Court, the petitioner straightaway filed a Special Leave Petition under article 136 of the Constitution in this Court which was obvi ously not maintainable.
On September 10, 1986 learned coun sel for the petitioner finding that it was difficult to support the petition for grant of special leave, sought an adjournment to take further instructions, and the matter was accordingly adjourned to September 22, 1986.
In the mean while, the petitioner moved this petition under article 32 of the Constitution and thereafter withdrew the suit.
On the adjourned date, the learned counsel also withdrew the Spe cial Leave Petition.
The Special Leave Petition was accord ingly dismissed as withdrawn.
Ordinarily, the Court would have directed the petitioner to avail of her alternative remedy under article 226 of the Constitution before the High Court but we were constrained to issue notice inasmuch as the High Court had in the year 1979 by its judgment in Andhra Education Society vs Union of India & Anr., followed its earlier decision in S.S. Jain Sabha 's case, (supra), and allowed a batch of Writ Petitions filed by the Andhra Education Society and other linguistic minority educational institutions holding that in view of the protection of article 30(1) these linguistic minority educational institutions were not governed by sections 3, 5, sub section
(4) of section 8, sections 16 and 25 of the Act and the rele vant rules framed thereunder and therefore no prior approval of the Director of Education was necessary before passing an order of suspension against a teacher pending a departmental inquiry.
We were also constrained to entertain the petition because a similar question was raised by the Frank Anthony Public School Employees ' Association by a petition under article 32 of the Constitution.
Since then the Court has in Frank Anthony Public School Employees ' Association vs Union of India & Ors., ; struck down section 12 of the Act as being violative of article 14 of the Constitution inso laf as it excludes the teachers and other employees of unaided minority schools from the beneficial provisions of sections 8 to 11 [except section 8 (2)]i.e.
except to the 979 extent that it makes section 8(2) inapplicable to unaided minori ty educational institutions.
The Court following the long line of decisions starting from In re.
the Kerala Education Bill, 1957, [1959] SCR 995 down to All Saints High School vs Government of Andhra Pradesh. ; held.
that the provisions con tained in Chapter IV of the Act (except section 8(2)) were regu latory measures and did not offend against article 30(1) of the Constitution, enacted with the purpose of ensuring proper conditions of service of the teachers and other employees of unaided minority educational institutions and for securing a fair procedure in the matter of disciplinary action as against them.
These provisions, according to the Court, were permissible restrictions and were intended and meant to prevent maladministration.
The view proceeds upon the basis that the right to administer cannot obviously include the right to maladminister.
A regulation which is designed to prevent maladministration of an educational institution cannot be said to infringe article 30(1).
The Court accordingly granted a declaration to the effect that section 12 of the Act was void and unconstitutional except to the extent that it makes section 8(2) inapplicable to unaided minority educational institutions, and directed the Union of India, Delhi Admin istration and its officers to enforce the provisions of Chapter IV [except section 8(2)] against the Frank Anthony Public School, an unaided minority school.
It has further directed the management of the school not to give effect to the impugned orders of suspension passed against the members of the staff.
Such being the law declared by the Court in Frank Anthony Public School 's case with regard to unaided minority educational institutions, it stands to reason that the aided minority schools run by the Andhra Education Society and other linguistic minority educational institutions in Delhi will also be governed by the provisions of Chapter IV [except section 8(2)], that is to say, the exercise of the power of the management of such schools to suspend a teacher would necessarily be subject to the requirement of prior approval of the Director of Education under sub section
(4) of section 8 of the Act.
In support of the petition Sri Vaidyanathan, learned counsel for the petitioner naturally contends that the matter is concluded by the recent decision of this Court in Frank Anthony Public School 's case and according to the view expressed by the Court in that case the impugned order of suspension passed by the management being without the prior approval of the Director as required by sub section
(4) of section 8 of the Act was vitiated.
On the other hand Sri Subba Rao, learned counsel appearing for respondents Nos. 3, 4 and 5 submits that the 980 view expressed by this Court in the recent decision in Frank Anthony Public School 's case based upon the earlier decision in All Saints High School 's case runs counter to the deci sion of the Constitution Bench in Lilly Kurian vs Sr.
Lewina & Ors., ; and therefore requires reconsidera tion.
Alternatively, he contends that the Court failed to appreciate that sub section
(4) of section 8 of the Act requiring the prior approval of the Director for the suspension of a teacher was a flagrant encroachment upon the right of the minorities under article 30(1) of the Constitution to adminis ter educational institutions established by them.
It is argued that if no prior approval of the Director is needed under section 8(2) for the dismissal, removal or reduction in rank of a teacher as held by this Court in Frank Anthony Public School 's case, there is no reason why the exercise of power of suspension being an integral part of the power to take disciplinary action could not be made subject to any such restriction as imposed by sub section
(4) of section 8 of the Act.
In order to appreciate the rival contentions, it is necessary to set out the relevant provisions.
Sub section
(2) of section 8 interdicts that subject to any rule that may be made, no employee of a recognised private school shall be dis missed, removed or reduced in rank, nor shall his service be otherwise terminated except with the prior approval of the Director.
section 8(3) confers upon such an employee the right of an appeal to the Tribunal constituted under section 11 against his dismissal, removal or reduction in rank.
Sub section
(4) relates to the power of suspension and it is in these terms: "(4).
Where the managing committee of a recog nised private school intends to suspend any of its employees, such intention shall be commu nicated to the Director and no such suspension shall be made except with the prior approval of the Director: Provided that the managing committee may suspend an employee with immediate effect and without the prior approval of the Director if it is satisfied that such immediate suspen sion is necessary by reason of the gross misconduct, within the meaning of the Code of Conduct prescribed under section 9, of the employee: Provided further that no such immedi ate suspension shall remain in force for more than a period of fifteen days from the date of suspension unless it has been communi 981 cated to the Director and approved by him before the expiry of the said period.
" Sub s.(5) of section 8 provides that where intention to suspend, or the immediate suspension of an employee is communicated to the Director, he may, if he is satisfied that there are adequate and reasonable grounds for such suspension, accord his approval to such suspension.
In Frank Anthony Public School 's case, Chinnappa Reddy, J. speaking for himself and G.L. Oza, J. while repelling the contention that sub section
(4) of section 8 of the Act was an en croachment upon the fundamental right of the minorities enshrined in article 30(1) to administer the educational insti tutions established by them inasmuch as it conferred a blanket power on the Director to grant or withhold his prior approval where the management intended to place an employee under suspension pending a departmental inquiry, observed that the question was directly covered by the majority decision in All Saints High School 's case and that, in his view, the provision was eminently reasonable and just de signed to afford some measure of protection to the employ ees, without interfering with the management 's right to take disciplinary action.
He then stated: "Section 8(4) would be inapplicable to minori ty institutions if it had conferred blanket power on the Director to grant or withhold prior approval in every case where a manage ment proposed to suspend an employee but we see that it is not so.
The management has the right to order immediate suspension of an employee in case of gross misconduct but in order to prevent an abuse of power by the management a safeguard is provided to the employee that approval should be obtained within 15 days.
The Director is also bound to accord his approval if there are adequate and reasonable grounds for such suspension.
The provision appears to be eminently reasonable and sound and the answer to the question in regard to this provision is directly covered by the decision in All Saints High School, where Chandrachud, CJ.
and Kailasam, J. upheld Section 3(3)(a) of the Act impugned therein.
" (Emphasis supplied) It is not necessary to go through all the cases relied upon by the 982 Court in Frank Anthony Public School 's case for the view taken that the provisions of Chapter IV of the Act were of a regulatory nature and therefore did not have the effect of abridging the fundamental right guaranteed to the minorities under article 30(1).
It is enough to say that although there is no reference in the judgment to Lilly Kurian 's case, the observations made by the Court with regard to the applica bility of sub s.(4) of section 8 of the Act which relates to the exercise of the power of suspension by the management, fall in line with the view expressed by the majority in All Saints High School 's case where such power was held to be on consideration of all the decisions starting from In re.
the Kerala Education Bill, 1957, permissible restriction being regulatory in character.
Presumably the Court in Frank Anthony Public School 's case felt that it was not necessary to refer to Lilly Kurian 's case as the extent of the regula tory power of the State had been dealt with by the Court In re.
the Kerala Education Bill, 1957 and reaffirmed in the subsequent decisions, including that in All Saints High School 's case.
In Lilly Kurian 's case, one of us (Sen, J.) speaking for a Constitution Bench had occasion to observe: .lm "Protection of the minorities is an article of faith in the Constitution of India.
The right to the administration of institutions of minority 's choice enshrined in Article 30(1) means 'management of the affairs ' of the institution.
This right is, however, subject to the regulatory power of the State.
Article 30(1) is not a charter for mal administra tion; however regulation, so that the right to administer may be better exercised for the benefit of the institution, is permissible;" (Emphasis supplied) In that case, the question was whether the conferment of a right of appeal to an external authority like the Vice Chancellor of the University under Ordinance 33(4) framed by the Syndicate of the University of Kerala under section 19(j) of the Kerala University Act, 1957 against any order passed by the management of a minority educational institution in respect of penalties including that of suspension was an abridgement of the right of administration conferred on the minorities under article 30(1).
The question was answered in the affirmative and it was held that the conferral of the power of appeal to the ViceChancellor under Ordinance 33(4) was not only a grave encroachment on such institution 's right to enforce and ensure discipline in its administrative affairs but it was uncanalised and unguided in the sense that no restrictions were placed on the exercise of the power.
It was further said that in the absence of any guide lines it could not be held 983 that the power entrusted to the Vice Chancellor under Ordi nance 33(4) was merely a check on maladministration.
In Frank Anthony Public School 's case, the Court held that subss.
(1), (3) and (4) of section 8, and sections 9, 10 and 11 of the Act do not encroach upon the right of administration conferred on the minorities under article 30(1) to administer educational institutions of their choice, but that section 8(2), in view of the authorities referred to, must be held to interfere with such right and therefore inapplicable to minority institutions.
It would therefore appear that the decision in Frank Anthony Public School 's case proceeds upon the view that the right guaranteed to religious and linguis tic minorities by article 30(1) which is two fold i.e. to establish and to administer educational institutions of their choice, is subject to the regulatory power of the State.
The Court has referred to the three decisions in Ahmedabad St. Xavier 's College Society vs State of Gujarat, ; ; State of Kerala vs Very Rev. Mother Pro vincial; , and All Saints High School vs Govt.
of A.P. (supra) in coming to the conclusion that section 12 of the Act insofar as it made inapplicable the beneficent provisions of Chapter IV to unaided minority institution was discriminatory and offended against article 14, i.e. except to the extent that it made section 8(2) inapplicable to such insti tutions.
The view taken in Frank Anthony Public School 's case is in consonance with the decision of the majority in All Saints High School 's case.
In that case, the applicabil ity of several sections of the A.P. Recognised Private Educational Institutions (Control) Act, 1975 was questioned as being violative of article 30(1).
Chandrachud, CJ.
while delivering the majority judgment held after referring to all the earlier decisions, that it must be regarded as wellset tled especially after the 9 Judge Bench decision in St. Xavier 's case and the subsequent decision in Lilly Kurian that the State was competent to enact regulatory measures for the purpose of ensuring educational standards and main taining the excellence thereof and such regulations which were permissible did not impinge upon the minorities ' funda mental right to administer educational institutions of their choice under article 30(1).
The reason for this conclusion can best be stated in the words of Chandrachud, CJ.: "These decisions show that while the right of the religious and linguistic minorities to establish and administer educational institu tions of their choice cannot be interfered with, restrictions by way of regulations for the purpose of ensuring educational standards and maintaining the excellence thereof can be validly prescribed.
For maintaining educa 984 tional standards of an institution, it is necessary to ensure.
that it is competently staffed.
Conditions of service which prescribe minimum qualifications for the staff, their pay scales, their entitlement to other bene fits of service and the laying down of safe guards which must be observed before they are removed or dismissed from service or their services are terminated are all permissible measures of a regulatory character." Chandrachud, CJ.
and Fazal Ali, J. held that sections 3(1) and 3(2) which made the prior approval of the competent authori ty a prerequisite for the dismissal, removal or reduction in rank of a teacher, conferred on the competent authority an appellate power of great magnitude and therefore sections 3(1) and 3(2) read together were, in their opinion, unconstitu tional insofar as they were made applicable to minority institutions inasmuch as they were found to interfere sub stantially with their right to administer institutions of their choice.
In coming to that conclusion, the learned Chief Justice relied upon the decisions in State of Kerala vs Very Rev. Mother Provincial, ; ; D.A.V. College vs State of Punjab, and Lilly Kurian and accordingly agreed with Fazal Ali, J. that sections 3(1) and 3(2) of the impugned Act could not be applied to minority institutions since to do so would offend against article 30(1).
We may extract the relevant portion of the judgment: "Any doubt as to the width of the area in which Section 3(1) operates and is intended to operate, is removed by.the provision contained in Section 3(2), by virtue of which the compe tent authority "shall" approve the proposal, "if it is satisfied that there are adequate and reasonable grounds" for the proposal.
This provision, under the guise of conferring the power of approval, confers upon the competent authority an appellate power of great magni tude.
The competent authority is made by that provision the sole judge of the propriety of the proposed order since it is for that au thority to see whether there are reasonable grounds for the proposal.
The authority is indeed made a judge both of facts and law by the conferment upon it of a power to test the validity of the proposal on the vastly subjec tive touchstone of adequacy and reasonable ness.
Section 3(2), in my opinion, leaves no scope for reading down the provisions of Section 3(1).
The two sub sections together confer upon the competent authority, in the absence of proper rules, a 985 wide and untrammelled discretion to interfere with the proposed order, whenever, in its opinion, the order is based on grounds which do not appear to it either adequate or reason able." "The form in which Section 3(2) is couched is apt to mislead by creating an impression that its real object is to cast an obligation on the competent authority to approve a proposal under certain conditions.
Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is so satisfied.
The conferment of such a power on an outside authority, the exercise of which is made to depend on purely subjective considerations arising out of the twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by Article 30(1).
" It is also necessary to mention that all the three Judges (Chandrachud, CJ.
Fazal Ali & Kailasam, JJ.) agreed that section 4 of the Act which provided for an appeal, and section 5 which was consequential to section 4, were invalid as violative of article 30(1).
However, there was a difference of opinion as to the applicability of sections 3(3)(a), 3(3)(b), 6 and 7.
We need only notice sections 3(3)(a) and 3(3)(b) which pertained to the power of suspension.
section 3(3)(a) provided that no teacher employed in any private educational institution shall be placed under suspension except when an inquiry into the gross misconduct of such teacher is contemplated.
section 3(3)(b) provided that no such suspension shall remain in force for more than a period of two months and if the inquiry was not completed within that period, the teacher shall be deemed to be reinstated.
Proviso thereto however conferred power on the competent authority, for reasons to be recorded in writing, to extend the period for a further period not exceeding two months.
Chandrachud, CJ.
found it difficult to agree with Fazal Ali, J. that these provisions were violative of article 30(1), thereby agreeing with Kailasam, J. that they were indeed regulatory.
section 3(3)(a), in his own words, contained but an elementary guarantee of freedom from arbitrariness to the teachers.
The provision was regulatory in character since it neither denied to the management the right to proceed against an erring teacher nor indeed did it place an unrea son 986 able restraint on its power to do so.
It assumed the right of the management to suspend a teacher but regulated that right by directing that a teacher should not be suspended for more than a period of two months unless the inquiry was in respect of a charge of gross misconduct.
In dealing with section 3(3)(a), the learned Chief Justice observed: "Fortunately, suspension of teachers is not the order of the day, for which reason I do not think that these restraints which bear a reasonable nexus with the attainment of educa tional excellence can be considered to be violative of the right given by article 30(1)." He then stated: "The limitation of the period of suspension initially to two months, which can in appro priate cases be extended by another two months, partakes of the same character as the provision contained in section 3(3)(a).
In the generality of cases, a domestic inquiry against a teacher ought to be completed within a period of two months or say, within another two months.
A provision founded so patently on plain reason is difficult to construe as an invasion of the fight to administer an insti tution, unless that right carried with it the right to maladminister." He accordingly agreed with Kailasam, J. that sections 3(3)(a) and 3(3)(b) which put restraints on the arbitrary power of suspension of teachers were regulatory in character and did not offend against the fundamental right of minorities under article 30(1).
It would be seen that the decision of the Court in Frank Anthony Public School 's case with regard to the applicabili ty of sub section
(4) of section 8 of the Act to the unaided minority educational institutions is based on the view taken by the majority in All Saints High School 's case which, on its turn, was based on several decisions right from In re.
the Kerala Education Bill, 1957 down to St. Xavier, including that in Lilly Kurian.
It is therefore difficult to sustain the argument of learned counsel for the respondents that the decision in Frank Anthony Public School 's case holding that sub section
(4) of section 8 of the Act was applicable to such insti tutions was in conflict with the decision of the Constitu tion Bench in Lilly Kurian 's case and therefore required reconsideration.
The contention of learned counsel for the respondents that sub section
(4) of section 8 of the Act requiting the prior approval of the Director for the suspen 987 sion of a teacher was a flagrant encroachment upon the right of the minorities under article 30(1) of the Constitution to administer educational institutions established by them is answered in all the earlier decisions of this Court right from In re.
the Kerala Education Bill, 1957 down to that in All Saints High School 's case which have been referred to by the Court in Frank Anthony Public School 's case.
These decisions unequivocally lay down that while the right of the minorities, religious or linguistic, to establish and admin ister educational institutions of their choice cannot be interfered with, restrictions by way of regulations for the purpose of ensuring educational standards and maintaining excellence thereof can validly be prescribed.
It cannot be doubted that although disciplinary control over the teachers of a minority educational institution is with the management, regulations can be made for ensuring proper conditions of service for the teachers and also for ensuring a fair procedure in the matter of disciplinary action.
As the Court laid down in Frank Anthony Public School 's case, the provision contained in sub section
(4) of section 8 of the Act is designed to afford some measure of protection to the teachers of such institutions without interfering with the managements ' right to take disciplinary action.
Although the Court in that case had no occasion to deal with the different ramifications arising out of sub section
(4) of section 8 of the Act, it struck a note of caution that in a case where the management charged the employee with gross miscon duct, the Director is bound to accord his approval to the suspension.
It would be seen that the endeavour of the Court in all the cases has been to strike a balance between the constitutional obligation to protect what is secured to the minorities under article 30(1) with the social necessity to protect the members of the staff against arbitrariness and victimisation.
One should have thought that in a case like the present where the management charged the petitioner with diversion of funds and communicated the impugned order of suspension pending departmental inquiry to the Director, there would be some response from him.
The management did not formally apply for his prior approval in terms of sub section
(4) of section 8 of the Act in view of the declaration by the High Court that it being a linguistic minority educational institution, it was protected under article 30(1) and no prior approval of the Director was required.
Nevertheless, it took the precaution of communicating the impugned order of suspension to the Director.
Presumably, the Director refrained from passing any order according or refusing approval having regard to the judgment of the High Court.
In view of the recent deci sion in Frank Anthony Public School 's case, it must be 988 held that the institution was governed by sub s, (4) of section 8 of the Act and therefore there was a duty cast on the Direc tor to come to a decision whether such immediate suspension was necessary by reason of the gross misconduct of the petitioner as required by sub=s (5) of s.8.
We refrain from expressing any opinion as to the seriousness otherwise of the charge as that is a matter to be enquired into by de partmental proceeding.
The fact however remains that there was no response from the Director within the period of 15 days as envisaged by the second proviso to section 8(4).
As a result of this, the impugned order of suspension has lapsed and it is so declared.
Although the impugned order of sus pension has lapsed, the management may yet move the Director for his prior approval under sub s (4) of section 8 of the Delhi School Education Act, 1973, and the Director shall deal with such application, if made, in accordance with the principles laid down in Frank Anthony Public School 's case, Subject to this observation, the writ petition fails and is dismissed.
There shall be no order as to costs, P.S.S. Petition dismissed.
| A departmental enquiry against the respondent, a Head Con stable, was held by the District Superintendent of Police.
During the enquiry the District Superintendent of Police himself became a witness and gave evidence at two stages against the respondent, his statement being recorded by a Deputy Superintendent of Police.
The District Superintend ent of Police then found the respondent guilty and on April 20, 1948, passed an order of dismissal against him.
The respondent went up in appeal to the Deputy Inspector General of Police but the appeal was dismissed on May 7, 1949.
The respondent then filed a revision application to the Inspec tor General of Police which was also dismissed on April 22, 1950.
Thereupon, the respondent filed a writ petition under article 226 of the Constitution before the High Court praying for the setting aside of the order of dismissal.
The High Court held that the rules of natural justice and fair play had been disregarded and accordingly, quashed the proceed ings and set aside the three several orders.
The State obtained a certificate of fitness and appealed.
Held, (percuriam) that the District Superintendent of Police who had acted both as the judge and as a witness had dis qualified himself from presiding over the enquiry.
The procedure adopted was contrary to the rules of natural justice and fair play.
Decisions and orders based on such procedure are invalid and not binding.
There is no rule with regard to certiorari, as there is with mandamus, that it will lie only where there is no other equally effective remedy.
The existence of another adequate remedy may be taken into consideration in the exercise of the discretion.
If an inferior Court or tribunal of first instance acts without jurisdiction or in excess of it or contrary to the rules of natural justice, the superior Court may quite properly issue a writ of certiorari to correct the error, even if an appeal to another inferior Court or tribu nal was available, whether recourse was or was not had to it.
This would be so all the more in the case of departmen tal tribunals composed of persons without adequate legal training and background.
76 596 Janardan Reddy vs The State of Hyderabad, ; referred to.
King vs Postmaster General, Exparte Carmichael (1928) i K.B. 291 ; Rex vs Wandsworths justices, Exparte Read, (1942) I K.B. 281; Khurshed Modi vs Rent Controller, Bombay, A. [.R. ; Assistant Collector of Customs vs Soorajmull Nagarmull, relied on.
Held, (per section R. Das, C.J., Venkatarama Ayyar, Jafer Imam and Sarkar, JJ.
Bose, J., dissenting) that article 226 of the Constitution is not retrospective and the High Court could not exercise its powers under article 226 to quash the order of dismissal passed before the commencement of the Constitu tion.
It is wrong to say that the order of dismissal passed on April 20, 1948, merged in the order in the appeal dated May 7, 1949, and the two orders merged in the order in the revision dated April 22, 1950, or that the original order of dismissal became final only on the passing of the order in revision.
The original order of dismissal was operative on its own strength.
Per Bose, J. The High Court had jurisdiction to quash all the orders, as the proceedings should be regarded as still pending till the order in revision was passed on April 22, 195o.
The District Superintendent of Police was acting in a judicial capacity and was bound to observe principles of natural justice.
These principles he ignored.
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Subsets and Splits