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Civil Appeal (Election) No.4030 of 1987.
From the Judgment and Order dated 13.11.87 of the Kerala High Court in Election Petition No. 2 of 1987.
P.S. Poti and T.T. Kunhikannan for the Appellant.
961 Dr. Y.S. Chitale, A.S. Nambiar, Dileep Pillai, M.A. Firoz and Aseem Mahrotra for the Respondents.
The Judgment of the Court was delivered by DUTT, J.
This appeal under section 116 A of the Repre sentation of the People Act, 1951 (hereinafter referred to as 'the Act ') is directed against the judgment of the Kerala High Court dismissing the election petition of the appel lant.
The appellant is a voter in the Mala constituency of the Kerala Legislative Assembly.
The election of the members of the Assembly was held on March 23, 1987 and the first re spondent, who was then the sitting Chief Minister of the State of Kerala, was declared elected from Mala constituen cy.
The appellant challenged the election of the first respondent to the Kerala Legislative Assembly on the ground of various corrupt practices alleged to have been committed by the first respondent.
In paragraphs 5(i) and 5(ii) of the election petition, the corrupt practice that was alleged by the appellant was to the effect that the second respondent, who was a candidate for the election, published a notice wherein it was declared that the second respondent was withdrawing from the contest and stated, inter alia, that it was to highlight the grievances of his community, namely, the Kudumbi Samudayam which is a backward community, that he had decided to contest the election, and that one of the demands of the community was that it should be included in the list of Scheduled Castes.
Further, the second respondent stated in the notice that the Kerala Government under the leadership of the first respondent had decided to give favourable consideration in regard to his community 's demand for inclusion in the list of Scheduled Castes.
Accordingly, the second respondent declared in the notice that for ob taining their rights, it had become necessary that the first respondent should win in the election and for that purpose he was withdrawing his candidature offering full support to the first respondent.
It was alleged that the second re spondent published the notice at the instigation and with the assistance and initiative and at the cost of the first respondent and his supporters.
Such acts constituted corrupt practice within the meaning of section 123 of the Act.
In paragraph 5(xvi), it is alleged that the first re spondent also committed corrupt practice in the course of his election work by asking Government servants including Shri P.M. Shabul Hameed, Teacher, 962 Government Upper Primary School, Kaduppassery, to lead processions in support of his candidature in the constituen cy.
It was submitted by the appellant that he was prepared to prove the allegation by examining the said persons.
A photograph of a procession was filed.
In paragraph 5(xi) of the election petition, the appel lant inter alia stated as follows: "5(xi) . . . . . . .
Besides at the instigation of the first re spondent a video cassette called "Malayude Purogathi" has been used in the constituency.
The persons who speak are one Shri Jose P. George, Government Pleader, Kerala High Court, 2.
Shri Thomas Thottappally, Veterinary Doc tor, Veterinary Polyclinic, Valiyaparambu.
This is also a corrupt practice.
The video cassette is produced herewith in a sealed cover.
" The first respondent opposed the election petition by filing a written statement denying the allegations of cor rupt practices.
It was submitted by him that as the copies of the said notice, photograph and video cassette were not supplied to the first respondent along with the copy of the election petition, the election petition was liable to be dismissed in limine under section 86(1) for non compliance with section 81(3) of the Act.
The High Court came to the findings that the allegations in the election petition would really show that the said documents formed integral part of the election petition and, therefore, it was really necessary to serve copies of the same on the first respondent and overruled the contention of the appellant that as he had filed the documents and pro duced the video cassette in Court, the first respondent could very well take copies of the same and defend his case.
The High Court took the view that non furnishing to the first respondent copies of the documents along with a copy of the election petition was non compliance with section 81(3) and, as such, the election petition was liable to be dismissed under section 86(1) of the Act.
In that view of the matter, the High Court dismissed the election petition.
Hence this appeal.
Section 81 of the Act provides as follows: "81.
Presentation of petitions.
(1) An elec tion petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 963 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates.
(2) [Omitted by Act 47 of 1966.] (3) Every election petition shall be accompa nied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the peti tioner under his own signature to be a true copy of the petition.
" We are concerned with section 81(3) which enjoins that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and every such copy shall be attested by the peti tioner under his own signature to be a true copy of the petition.
Section 81(3), however, does not provide for giving of copies of the documents either referred to in the election petition or filed in the proceedings.
We may now refer to section 86(1) of the Act which reads as follows: "86(1).
The High Court shall dismiss an elec tion petition which does not comply with the provisions of section 81 or section 82 or section 117." Section 86(1), therefore, is a mandate on the court to dismiss an election petition if there be a non compliance with the provision of section 81(3).
In other words, both section 81(3) and section 86(1) are mandatory in nature and if there be any non compliance with the mandatory provision of section 81(3), the court will be bound to dismiss the election petition.
Before considering whether a copy of the document re ferred to in the election petition or filed in the proceed ings should be furnished to the elected candidate, whose election is under challenge, along with a copy of the elec tion petition, we may refer to section 83 of the Act provid ing as to the contents of an election petition.
Section 83 provides as follows: 964 "83.
Contents of petition. (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908, for the verification of pleadings: Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allega tion of such corrupt practice and the particu lars thereof.
(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition.
" It is apparent from clauses (a) and (b) of section 83 that an election petition shall contain a concise statement of the material facts and also set forth full particulars of any corrupt practice.
These two requirements are also manda tory in nature.
So, whenever there is an allegation of corrupt practice, the election petition shall contain a concise statement as to the material fact on which the petitioner relies and also must set forth full particulars of the corrupt practice alleged by the petitioner.
As has been held in Satya Narain vs Dhuja Ram, ; , the right to challenge an election is not a common law right, but a special right as conferred by the Act.
The provision for setting aside the election on the grounds mentioned in section 100 of the Act including the ground of corrupt practice has been made for the purpose of maintain ing purity of elections.
An election is the democratic method for selecting the representatives of the people in Parliament or in the Legislative Assembly.
When a candidate gets himself elected by adopting or committing any corrupt practice, his election must be set aside on proof of such corrupt practice.
At the same time, the proce 965 dure prescribed by the Act for challenging an election must be strictly followed.
So, if there be any deviation from or non compliance with the provision of section 81(3), the court will have no other alternative than to dismiss the election petition.
It has been already noticed that the High Court dis missed the election petition as the appellant has not fur nished to the first respondent copies of the notice, photo graph and the video cassette referred to above along with a copy of the election petition.
So far as the copies of the notice and the photograph are concerned, we do not think that the High Court was justified in holding that these should have also been furnished to the first respondent along with the copy of the election petition.
Dr. Chitale, learned Counsel appearing on behalf of the first respondent, also has not urged that the copies of these two documents should have been served upon the first respondent.
What has, however, been vehemently urged on behalf of the first re spondent is that he should, have been served along with the election a copy of the video cassette.
This contention will be considered presently.
We have already referred to section 83 relating to the contents of an election petition.
The election petition shall contain a concise statement of material facts and also set forth full particulars of any corrupt practice.
The material facts or particulars relating to any corrupt prac tice may be contained in a document and the election peti tioner, without pleading the material facts or particulars of corrupt practice, may refer to the document.
When such a reference is made in the election petition, a copy of the document must be supplied inasmuch as by making a reference to the document and without pleading its contents in the election petition, the document becomes incorporated in the election petition by reference.
In other words, it forms an integral part of the election petition.
Section 81(3) pro vides for giving a true copy of the election petition.
When a document forms an integral part of the election petition and a copy of such document is not furnished to the respond ent along with a copy of the election petition, the copy of the election petition will not be a true copy within the meaning of section 81(3) and, as such, the court has to dismiss the election petition under section 86(1) for non compliance with section 81(3).
On the other hand, if the contents of the document in question are pleaded in the election petition, the document does not form an integral part of the election petition.
In such a case, a copy of the document need not be served on the respondent and that will not be non compliance with the provision of section 81(3).
The document 966 may be relied upon as an evidence in the proceedings.
In other words, when the document does not form an integral part of the election petition, but has been either referred to in the petition or filed in the proceedings as evidence of any fact, a copy of such a document need not be served on the respondent along with a copy of the election petition.
There may be another situation when a copy of the docu ment need not be served on the respondent along with the election petition.
When a document has been filed in the proceedings, but is not referred to in the petition either directly or indirectly, a copy of such document need not be served on the respondent.
What section 81(3) enjoins is that a true copy of the election petition has to be served on the respondents including the elected candidate.
When a document forms an integral part of an election petition containing material facts or particulars of corrupt practice, then a copy of the election petition without such a document is not complete and cannot be said to be a true copy of the elec tion petition.
Copy of such document must be served on the respondents.
Keeping in view the above principles, let us consider whether the video cassette, as mentioned in paragraph 5(xi) in the election petition, forms an integral part of the election petition.
It is not disputed that a copy of the video cassette was not served on the first respondent along with the copy of the election petition.
Indeed, the same was submitted by the appellant in a sealed cover with an appli cation praying for keeping the video cassettee in the sealed cover till the stage of examination of witnesses.
It is, therefore, apparent that not only the copy of the video cassette was not served on the first respondent, but also the appellant had no intention of serving a copy of the same on the first respondent.
It is urged by Mr. Poti, learned Counsel appearing on behalf of the appellant, that the video cassette is only an evidence of the fact stated in paragraph 5(xi) of the elec tion petition, relevant portion of which has been extracted above.
It has been alleged in paragraph 5(xi) that at the instigation of the first respondent, a video cassette called "Malayude Purogathi" has been used in the constituency.
The expression "Malayude Purogathi" means progress of Mala, which is the constituency in question.
Further, it has been alleged that the persons whose speeches have been recorded in the video cassette regarding progress of Mala are two Government officers named in paragraph 5(xi), and that the cassette has been used in the constituency at the 967 instigation of the first respondent.
This has been averred as a corrupt practice.
It is also mentioned in the same paragraph that the video cassette is produced with the election petition in a sealed cover.
It is not disputed that by corrupt practice as referred to in paragraph 5(xi) of the election petition, the appellant is referring to the corrupt practice within the meaning of section 123(7) of the Act.
Section 123 enumerates the different corrupt practices for the purposes of the Act.
One of the corrupt practices, as contained in section 123(7), is the obtaining or procuring or abetting or attempting to obtain or procure by a candi date or his agent, or by any other person, with the consent of a candidate or his election agent, any assistance other than the giving of vote for the furtherance of the prospects of that candidate 's election, from any person in the service of the Government and belonging to any of the classes as mentioned in clauses (a) to (g) of the section.
The signifi cant ingredient of corrupt practice, as mentioned in section 123(7), is that the assistance which is obtained or procured from a Government servant of the classes mentioned in clauses (a) to (g) must be for the furtherance of the pros pect of the election of the candidate who or on whose behalf such assistance has been obtained or procured.
It is not disputed that the two Government servants mentioned in paragraph 5(xi) of the election petition whose speeches have been recorded in the video cassette, are Government servants within the meaning of section 123(7).
The speeches of the two Government servants relating to "Malayude Purogathi", that is, the progress of Mala, sim pliciter will not constitute a corrupt practice within the meaning of section 123(7).
In order to be a corrupt practice within the meaning of section 123(7), the speeches of the said Government servants as recorded in the video cassette and alleged to have been used in the constituency at the instigation of the first respondent, must be with a view to obtaining or procuring or abetting or attempting to obtain or procure the assistance for the furtherance of the pros pects of the first respondent 's election.
It is urged by the learned Counsel for the appellant that as no such allegation has been made in paragraph 5(xi), the allegations in that paragraph do not constitute a corrupt practice within the meaning of section 123(7) and, accordingly, the video cas sette does not form an integral part of that paragraph.
We are unable to accept the contention.
It is true that there is no allegation in paragraph 5(xi) that the video cassette was used by the first respondent for the purpose of any assistance for the furtherance of the prospects of his election.
But, in our opinion, it is apparent that 968 such an allegation is implied in the paragraph.
After alleg ing that the video cassette was used in the constituency at the instigation of the first respondent, it is alleged that the same constituted a corrupt practice which points to the only fact that the video cassette containing the speeches of the Government servants was used for the purpose of some assistance for the furtherance of the prospects of the election of the first respondent.
It is implied that the video cassette is referred to in paragraph 5(xi) in regard to the alleged assistance for the furtherance of the pros pects of the election of the first respondent and, accord ingly, the contents of the cassette are incorporated in that paragraph by reference.
In other words, the cassette forms an integral part of paragraph 5(xi).
In this connection, we may refer to Item No. 1 of the List of Documents which reads as follows: "1.
Video Cassette by Kala Audio & Video, Kallettumkara, Tricur District titled "Mala yude Purogathi" prepared at the instance of the first respondent for election propaganda, as stated in paragraph 5(xi) of the election petition.
" It is clear from Item No. 1 of the List of Documents that it is the specific case of the appellant that the video cassette was prepared at the instance of the first respond ent for election propaganda, as stated in paragraph 5(xi) of the election petition.
Whether it was so stated in Item No. 1 of the List of Documents or not it is, as stated already, apparent on the face of the allegation in paragraph 5(xi) that it was used by the first respondent by way of assist ance in furtherance of the prospects of his election and so the video cassette formed an integral part of paragraph 5(xi).
Unless a copy of the video cassette was given to the first respondent, he would not know how the speeches of the said Government servants could assist the furtherance of the prospects of his election and would not be in a position to deal with the allegations made in paragraph 5(xi).
The copy of the election petition which was served on the first respondent without a copy of the video cassette was not, therefore, a true copy of the election petition within the meaning of section 81(3) of the Act.
Much reliance has been placed on behalf of the appellant on a decision of this Court in Sahodrabai Rai vs Ram Singh Aharwar, ; In that case, the appellant filed an election petition challenging the election of the first respondent on four grounds, one of which was corrupt prac tice inasmuch as the first respondent had appealed to reli gion through a pamphlet marked Annexure A.
In the 969 body of the election petition a translation in English of the Hindi pamphlet was incorporated.
The original pamphlet was attached to the election petition and was marked Annex ure A.
The election petitioner, thereafter, stated in the petition that the pamphlet formed part of the petition.
The first respondent raised an objection that a copy of the pamphlet had not been annexed to the copy of the election petition served on him and, therefore, the 'election peti tion was liable to be dismissed under section 86 of the Act.
The High Court accepted the objection and dismissed 'the election petition.
On an appeal to this Court by the appel lant, this Court set aside the judgment of the High Court holding that the pamphlet must be treated as a document and not as a part of the election petition in so far as the averments were concerned.
The decision in Sahodrabai 's case does not, in our opinion, lend any assistance to the contention of the appel lant that the video cassette is only evidence and does not form part of the election petition.
In that case, the elec tion petition reproduced the whole of the pamphlet and, accordingly, it was held that it was only an evidence and not a part of the election petition.
What has been stressed in that case is that each and every document does not form part of the election petition.
Moreover, the Court was considering the scope of section 83(2) of the Act before it was amended.
We are unable to accept the contention made on behalf of the appellant that a document, in no circum stances, can form an integral part of the election petition.
As has been noticed already, the phamplet in that case was fully reproduced in the election petition and, therefore, it was merely an evidence and did not form a part of the elec tion petition.
In Thakur Virendra Singh vs Vimal Kumar, ; the question was whether a leaflet, a copy of which was Annexure A to the election petition and referred to in paragraph 13 thereof, constituted a part of the election petition and, accordingly should have been served on the elected candidate.
This Court overruled the contention of the elected candidate that the petition was liable to be dismissed as the copy of the petition meant to be served on the appellant was not accompanied by a copy of Annexure A on the ground that the allegation of corrupt practice and particulars thereof, as given in paragraph 13 of the elec tion petition, were sufficiently clear and precise.
This decision is, therefore, of no help to the contention of the appellant that the video cassette is not a part of the election petition.
The most important case for our purpose is the decision of this 970 Court in M. Karunanidhi vs H.V. Hande, In that case, in paragraph 18(b) of the election petition it was alleged as follows: "18(b).
The first Respondent erected fancy banners throughout the constituency and the number of such banners is about 50.
A photo graph of one such banner is filed herewith.
The cost of each such banner will be not less than Rs. 1,000.
The expenditure involved in erecting these fifty banners is about Rs.50,000.
It is submitted that the first Respondent has incurred the above said expend iture which added to the amount disclosed in the Return of Election Expenses exceeds the amount fixed under Section 77(3) of the Act thus amounting to a corrupt practice under Section 123(6) of the Act.
" Admittedly, a copy of the photograph as referred to in paragraph 18(b) was not furnished to the appellant along with a copy of the election petition.
This Court took the view that the averment contained in paragraph 18(b) would be incomplete without a copy of the photograph being supplied with a copy of the election petition.
The reason being that it was not possible to conceive of the dimension of the large fancy banner unless one had a look at the photograph.
1n that view of the matter, it was held by this Court that the photograph formed an integral part of the petition and a copy of it should have been served along with the election petition.
Accordingly, this Court reversed the judgment of the High Court in so far as it held that the photograph of the fancy banner adverted to in paragraph 18(b) could not be treated to be an integral part of the election petition, but was merely a piece of evidence ' as to the nature and type of fancy banner erected by the appellant and, therefore, fail ure to supply a copy of the photograph to the appellant did not amount to a violation of the provision of sub section (3) of section 81 of the Act.
The decision in Karunanidhi 's case fully supports the view which we take, namely, the video cassette formed an integral part of the election petition because without a copy of the video cassette the first respondent was not in a position to know whether ' the video cassette recording the speeches of the two Government servants could be said to have been used by the first respondent for the purpose of any assistance in furtherance of the prospects of his elec tion.
Karunanidhi 's case was referred to and approved in a subsequent decision of this Court in Mithilesh Kumar Pandey vs Baidyanath Yadav, [1984] 2 SCR 278.
971 Mr. Poti has, however, urged that if the averments in paragraph 5(xi) of the election petition are full and com plete or, in other words, if they do not give particulars of the corrupt practice, in that case the said averments may be struck out under the provisions of Order VI Rule 16 of the Code of Civil Procedure, but the entire election petition cannot be dismissed.
It has already been noticed that under clauses (a) and (b) of section 83(1) of the Act, an election petition shall contain a concise statement of the material facts and shall set forth full particulars of any corrupt practice.
The material facts and the full particulars of corrupt practice will constitute cause of action for the election petition.
If the material facts are not supplied or full particulars of corrupt practice are not given in the election petition, as a consequence of which the election petition does not disclose any cause of action, it is liable to be dismissed under the provision of Order VII, Rule 11(a) of the Code of Civil Procedure.
See Azhar Hussain vs Rajiv Gandhi, ; Apart from the striking out the whole of the election petition when it does not disclose a cause of action, the court can strike out any statement which is irrelevant, scandalous or has nothing to do with the cause of action under the provision of Order VI, Rule 16 of the Code of Civil Procedure.
It is submitted by Mr. Poti that if the averments in paragraph 5(xi) of the election petition are irrelevant or do not disclose any cause of action, at the most the said paragraph can be struck out by the court under the provision of Order VI, Rule 16 of the Code of Civil Procedure.
We are afraid, we are unable to accept the con tention.
We are not concerned with whether paragraph 5(xi) can be struck out by the court under the provision of Order VI, Rule 16 of the Code of Civil Procedure as not disclosing any cause of action, but really we are concerned with the question as to whether the copy of the election petition which has been served on the first respondent without a copy of the video cassette is a true copy of the election peti tion or not within the meaning of section 81(3) of the Act.
We have come to the conclusion that the appellant has not served on the first respondent a true copy of the election petition inasmuch as, admittedly, a copy of the video cas sette which forms an integral part of the election petition, was not served along with the election petition.
There is, therefore, no substance in the contention which is rejected.
Mr. Poti has drawn our attention to the observations made by this Court in Shri Udhav Singh vs Madhay Rao Scin dia, [1977] 1 SCC 511 which reads as follows: 972 "Like the Code of Civil Procedure, this sec tion also envisages a distinction between "material facts" and "material particulars".
Clause (a) of sub section (1) corresponds to Order 6, Rule 2, while clause (b) is analogous to Order 6, Rules 4 and 6 of the Code.
The distinction between "material facts" and "material particulars" is important because different consequences may flow from a defi ciency of such facts or particulars in the pleading.
Failure to plead even a single material fact leads to an incomplete cause of action and incomplete allegations of such a charge are liable to be struck off .under
Order 6, Rule 16, Code of Civil Procedure.
If the petition is based solely on those allega tions which suffer from lack of material facts, the petition is liable to be summarily rejected for want of a cause of action, In the case of a petition suffering from a deficiency of material particulars, the court has a discretion to allow the petitioner to supply the required particulars even after the expiry of limitation.
" On the basis of the above observations, it is submitted that if paragraph 5(xi) of the election petition suffers from a deficiency of material particulars, the court .has a discretion to allow the appellant to supply the required particulars even after the expiry of limitation.
The above observations have been made in a different context and are quite inapplicable to the facts and circumstances of the instant case which, as noticed already, relate to the ques tion as to whether the video cassette is an integral part .of the election petition and whether non furnishing of a copy of the video cassette to the first respondent along with a copy of election petition is non compliance with the mandatory provision of section 81(3) and, as such, liable to be dismissed under section 86(1) of the Act.
The question of exercise of discretion by the court in permitting the appel lant to supply the particulars does not arise at all.
Lastly, the decision of this Court in A. Madan Mohan vs Kalavakunta Chandrasekhara, has been relied upon by the learned Counsel for the appellant.
We fail to understand how this case is of any assistance to the appel lant, for in this case also this Court once more approved of the decision in Karunanidhi 's case.
No other point has been urged by either party in this appeal.
In view of the discussion made above, we affirm the judgment of the High Court dismissing the election petition of the appellant on the 973 ground that as the copy of the video cassette was not served on the first respondent along with a copy of the election petition, it was noncompliance with the provision of section 81(3) of the Act.
The appeal is, accordingly, dismissed.
There will, however, be no order as to costs.
Y. Lal Appeal dismissed.
| The appellant was a voter in the Mala constituency of the Kerala Legislative Assembly, election whereof was held on March 23, 1987 and the first respondent, sitting Chief Minister of the State was declared elected from the said constituency.
The appellant challenged the validity of 1st Respond ent 's election on the ground of various corrupt practices committed by him.
It was alleged in the Election Petition that at the instigation of the first respondent, Respondent No. 2 published a notice wherein it was stated that he was withdrawing his candidature.
It was further stated in the notice that his purpose of contesting was to highlight the grievances of the Kudumbi Samudayam community with a view to get that community the status of Scheduled Caste and since the Kerala Government under the leadership of the first respondent (returned candidate) had decided to give a fa vourable consideration in regard to the community 's den.and for inclusion in the list of Scheduled Castes, it had become necessary for the first respondent to win the election.
He thereby offered his support to Respondent No. 1.
According to the appellant this act constituted a corrupt practice within the meaning of Section 123 of the Representation of the People Act, 1951.
It was further alleged by the Election Petitioner that Respondent No. 1, committed corrupt practice by asking Government servants to lead processions in support of his candidature.
A photograph of a procession was filed.
Election Petitioner further alleged that at the instiga tion of the first respondent a video cassette called "Mala yude Purogathi" had been used in the constituency wherein persons like Shri Jose P. George, Government Pleader, Kerala High Court, Shri Tomas Thottappally, 959 Veterinary Doctor spoke in support of the first respondent which is a corrupt practice.
The video cassette was filed in a sealed cover.
The first respondent contested the Election Petition and pleaded that since the copies of the photograph, notice and the video cassette have not been furnished to him alongwith the Election Petition, the same was liable to be dismissed in limine under section 86(1) for noncompliance with the provisions of section 83(1).
The High Court rejected the contention of the appellant that Respondent No. I could obtain copies of the documents from the High Court; and defend his case, and took the view that non furnishing to the respondent copies of the docu ments alongwith a copy of the Election Petition was non compliance with section 81(3) and as such, the election petition was liable to be dismissed, which the High Court did.
Hence this appeal.
Almost identical arguments were advanced before this Court.
Counsel for the appellant strenuously contended that the video cassette etc.
do not from an integral part of the petition, on the other hand, they had been filed in the proceedings as evidence of facts and copies of such docu ments need not be served on the respondent alongwith a copy of the Election Petition.
On behalf of the first respondent it was mainly argued that failure to supply the documents violates the provisions of section 81(3) as in the absence of those the Election Petition served cannot be said to be true copy of the election petition as contemplated by sec tion 81(3) of the Act.
Dismissing the appeal, this Court, HELD: An election is the democratic method for selecting the representatives of the people in Parliament or in the Legislative Assembly.
When a candidate gets himself elected by adopting or committing any corrupt practice, his election must be set aside on proof of such corrupt practice.
At the same time, the procedure prescribed by the Act for challeng ing an election must be strictly followed.
[964H 965A] Satya Narain vs Dhuja Ram, ; Whenever there is an allegation of corrupt practice, the election petition shall contain a concise statement as to the material fact on which the petitioner relies and also must set forth full particulars of the corrupt practice alleged by the petitioner.
[964F] 960 When a document forms an integral part of the election petition and a copy of such document is not furnished to the respondent alongwith a copy of the election petition, the copy of the election petition will not be a true copy within the meaning of section 81(3) and, as such, the Court has to dismiss the election petition under section 86(1) for non compliance with section 81(3).
[965F G] Section 81(3) which enjoins that every election peti tion shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
Section 81(3) however, does not provide for giving of copies of the docu ments either referred to in the election petition or filed in the proceedings.
[963D] Section 86(1) is a mandate on the Court to dismiss an election petition if there be a non compliance with the provisions of section 81(3).
I963F] The appellant in the instant case, has not served on the first respondent a true copy of the election petition inasmuch as admittedly, a copy of the video cassette which forms an integral part of the election petition, was not served alongwith the election petition.
It was noncompliance with the provisions of section 81(3) of the Act.
(M. Karuna nidhi vs H.V. Hande, [972H 973A] The question of exercise of jurisdiction by the Court in permitting the appellant to supply the particulars does not arise at all.
[972F] Sahodrabai Rai vs Ram Singh Aharwar, ; ; Thakur Virendra Singh vs Vimal Kumar, ; ; Mithilesh Kumar Pandey vs Baidyanath Yadav, [1984] 2 SCR 278; Azhar Hussain vs Rajiv Gandhi, ; ; Shri Udhav Singh vs Madhav Rao Scindia, [1977] 1 SCC 511 and A. Madan Mohan vs Kalavakunta Chandrasekhara,
|
ivil Appeal No. 195 of 1963.
Appeal from the judgment and decree dated March 24, 1959 the Allahabad High Court in First Appeal No. 76/47.
C.B. Agarwala and J.P. Goyal, for the.
appellant.
S.T. Desai, M.V. Goswami and B.C. Misra, for the respondent No. 1.
M.V. Goswami and B.C. Misra, for respondents Nos. 2, 7.
and 8.
R.S. Gupta, S.S. Khanduja and Ganpat Rai, for respondent No. 9.
The Judgment of the Court was delivered by Hidayatullah, J.
This appeal arises from a suit filed by respondents 1 and 2 for declaration of their rights to the Phulpur Estate, for possession of properties belonging to the Estate and for mesne profits.
The Phulpur Estate is situated in Allahabad District.
One Rai Bahadur Rai Pratap Chand who died on January 23, 1901, was the Zamindar of this Estate.
After his death, his widow Rani Gomti Bibi succeeded to the Estate.
Rani Gomti Bibi was considerably influenced by her brother Gaya Prasad and priests belonging to some temples.
In the years following the death of her husband, Rani Gomti Bibi made many endowments involving vast properties and in July 1920, the Court of Wards assumed charge of the Estate which the Rani was mismanaging.
On February 21, 1923, the Rani adopted one Bindeshwari Prasad and then applied to the Court of Wards under section 37 of the U.P. Court of Wards Act for permission to make the adoption.
The Collector (Mr. Knox) made an enquiry and on April 3, 1923.
made a report exhibit 79 stating that the evidence tendered before him was so conflicting and unreliable that he had come to the conclusion that the authority of Rai Pratap Chand to adoption by his widow was not proved.
He, therefore, recommended that Rani Gomti Bibi be declined permission to make the adoption and the Board of Revenue accordingly refused permission.
Rani Gomti Bibi, however, executed a deed of adoption on November 6, 1924 in favour of Bindeshwari Prasad.
A suit was filed by Parmeshwar Dayal (who was the first plaintiff in the persent suit) in 1925 against Rani Gomti Bibi, Bindeshwari Prasad and the Court of Wards challenging the adoption made by the Rani.
On August 21, .1926, the suit was decreed, and it was held that the adoption was contrary to section 37 of the U.P. Court of Wards Act, 1912 and was thus 29 invalid inasmuch as permission to take the adoption was not obtained from the Court of Wards.
Rani Gomti Bibi then applied to the Court of Wards for permission to adopt Bindeshwari Prasad 's brother 's son Dwarka Nath who is the present appellant.
Fresh enquiries about the authority of the husband were made by the then Collector Mr. Thompson.
He examined witnesses from a list filed by Gaya Prasad in the earlier suit of 1925.
After considering the evidence, the Collector recommended grant of permission under section 37 of the U.P. Court of Wards Act and permission was accordingly granted by the Board of Revenue.
On November 28, i929, the Rani adopted Dwarka Nath at Phulpur.
Immediately after this adoption the Court of Wards released the Estate and assumed charge of it again on behalf of Dwarka Nath who was a minor.
On january 5, 1943, Rani Gomti Bibi died and the present suit was filed by Parmeshwar Dayal and one Amarnath Agarwal to whom Parmeshwar Dayal had assigned 6/16th share in the Estate.
This suit was decreed by the Civil Judge of Allahabad who held inter alia that Parmeshwar Dayal was the nearest reversioner of Rai Partap Chand and was entitled to succeed him, and further that the adoption was invalid as there was no proof of authority given by Rai Pratap Chand to Rani Gomti Bibi to make the adoption.
The suit for declaration and possession was decreed with mesne profits amounting to Rs. 88,000 against Dwarka Nath and the Collector and the Court of Wards who was also made a party to the suit.
Three appeals were filed against the judgment and by a common judgment dated March 24, 1959, the High Court affirmed the decree except in respect of mesne profits.
The High Court certified the case as fit for appeal to his Court and the present appeal results.
At the hearing, Mr. C.B. Agarwala stated on behalf of the appellant that he did not challenge that Parmeshwar Dayal was the nearest reversioner of Rai Pratap Chand.
We are also not now concerned with the endowments.
Mr. Agarwala contended that the findings about authority by Rai Pratap Chand to the adoption were erroneous an required to be reconsidered.
In seeking reconsideration of this finding.
Mr. Agarwala relied both on facts and law.
In so far as his claim is to have the evidence reconsidered, it may be stated at once that it is not the practice of this Court to examine the evidence at large specially when the High Court and the Court below have drawn identical conclusion from it.
In this case, the evidence about the authority, such as it was, was considered both by the Trial Judge and the High Court and they could not persuade themselves to accept it.
Following the settled practice of this Court we declined to look into the evidence for the third time, but we permitted Mr. Agarwala to raise arguments of law and we shall deal with those arguments now.
30 Mr. Agarwala relies upon ss 37 and 53 of the U.P. Court of Wards Act, 1912 and contends that inasmuch as the Court of Wards made an enquiry into the truth of the allegations that Rai Pratap Chand had given express authority to Rani Gomti Bibi to make an adoption after his death and found in favour of authority, the conclusion of the Court of Wards to grant permission and the reasons for the decision cannot be questioned by a civil suit.
This argument, in our judgment, cannot be accepted.
Section 37, of the U.P. Court of Wards Act, in so far as it is material.
reads as follows: "37.
Disabilities of wards A ward shall not be competent (a). . . . . (b) to adopt without the consent in writing of the Court of Wards; (c) . . . .
Provided, first, that the Court of Wards shall not withhold its consent under clause (b) . . if the adoption . . . is not contrary to the personal or special law applicable to the ward . . . ". lm0 The section obviously places a hurdle in the way of adoptions by the wards which must be removed before the adoption can be valid.
The section affects the competence of the Wards to make the adoption and as the consent is a pre requisite, any adoption made without such consent must be ineffective.
The section, however, does not make the sanction of the Court of Wards to cure illegalities or breaches of the personal law.
Nor does the sanction make up for incompetence arising under the personal law.
It is obvious that if the adoption is void by reason of the personal law of the person adopting, the consent of the Court of Wards cannot cure it.
Nor would ' the consent take the place of the essential ceremonies or the religious observances where necessary.
Those matters would have to be determined according to the personal law in civil court of competent jurisdiction.
Mr. Agarwala argues that section 53 is a bar to any suit questioning the adoption made after the consent of the Court of Wards to the adoption has been given.
That section cannot be used in this manner.
It reads: "53.
(i) The exercise of any discretion conferred on the State Government or the Court of Wards bythis Act shall not be questioned in any Civil Court.
(2) . . . .
The section merely puts the exercise of discretion by officers acting under the Court of Wards Act beyond question.
Thus if the Court of Wards gave or refused its consent to a proposed adoption a suit would not He either to cancel the consent or to compel it.
This section, however, does not go to the length that after the consent of the Court of Wards the adoption itself cannot be question 31 ed at all.
There are no words in the section to this effect nor can such a result be implied.
If the Court of Wards gave its concurrence to a proposed adoption, the bar created by section 37 of the Act would be removed.
but it would not make the adoption immune from attacks in a Civil Court on any ground on which adoptions are usually questioned there.
Mr. Agarwala claims that the reasons for the consent of the Court of Wards are a part of the consent and are within section 53(1).
This cannot be accepted.
No doubt, the Court of Wards reached its own conclusion for purpose of section 37 that Raj Pratap Chand had accorded authority to Rani Gomti Bibi to adopt a son.
but if the adoption was questioned in a civil court.
the civil court would not be ousted of its jurisdiction to decide the question.
All that the civil court would be compelled hold would be that the requirements of the Court of Wards Act ds to the consent of the Court of Wards were fulfilled.
In our judgment, the legal argument that after the consent of the Court of Wards the Civil Court was incompetent to reconsider the question of the authority given by the husband cannot be accepted.
In deciding the question of authority, the High Court rejected the oral evidence led before it and affirmed the conclusions of the trial Judge.
The High Court considered this evidence both intrinsically and in the light of the attending circumstances and found it unacceptable.
The trial Judge pointed out that as lawyers were present when Rai Pratap Chand 'is alleged to have given authority to his widow and as it was also suggested that that fact should be recorded, it was unbelievable, if the statements were true, that written authority would not have been prepared then and there.
The High Court did not content itself with accepting the opinion of the trial Judge but discussed the evidence de novo and rejected it.
The High Court pointed out that Rai Pratap Chand was only 30 years old at the time of his death and his wife was 25 years old and he could not have abandoned the hope of having an issue.
Evidence shows that the writing was put off because it was not thought that Rai Pratap Chand was dying.
The High Court also pointed out that Rani Gomti Bibi executed between November 24, 1901 and August 19, 1904 4 documents making different endowments.
In none of these documents, she mentioned that she had been asked by her husband to make them.
The High Court pertinently pointed out that the oral evidence showed that the declaration of the authority to his wife and the oral will to make the endowments, were made by Rai Pratap Chand at the same time and these facts would have figured as the reason for the endowments in these documents.
Mr. Agarwala contends that even if the reasons for the endowments might be expected to be expressed.
it is not logical to say that the deeds should have recited the irrelevant fact that authority was given to Rani Gomti Bibi to make the adoption.
This is perhaps right, but the fact remains that the two directions of Rai Pratap Chand went hand in hand; and even if the fact of authority was not 32 recited in the documents, one would expect at least the oral will to make the endowments to be mentioned.
This shows that the whole story about oral directions to Rani Gomti Bibi was untrue.
Mr. Agarwala then seeks to use the statements made by Gaya Prasad and the witnesses before Mr. Thompson.
In the High Court this claim was based upon sections 11, 32 and 157 of the Indian Evidence Act.
The High Court rejected these statements and declined to attach any value to them.
Section 11 was not relied upon before us; but the other two sections were referred to in an effort to have that evidence read.
Section 157 of the Indian Evidence Act lays down: "157.
Former statements of witness may be proved to corroborate later testimony as to same fact: In order to corroborate the testimony of a w:mess, any former statement made by such witness relating to the same fact at or about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved.
" Two circumstances, which are alternative, are conditions precedent to the proof of earlier statements trader this section.
The first is that the statements must have been made at or about the time when a fact took place.
The fact here is the authority said to have been given by the husband in 1901.
The statements were made on December 18, 1928, 27 years after the event.
They cannot be said to have been made "at or about the time when the fact took place".
Further, as rightly pointed 'out by i;he High Court, the Court of Wards was making an enquiry for the purpose of according its consent.
It was not enquiring into the fact of the giving of authority as an 'authority legally competent '.
That authority, as we have pointed out already, is the civil court for the civil court alone can finally decide such a question.
It can do so even after the Court of Wards had reached a conclusion, and contrary to that conclusion.
Section 157 therefore cannot make the statements provable.
Mr. Agarwala next relies on section 32(7) of the Indian Evidence Act to introduce the earlier statements.
That sub section reads: "32.
Statements.
written or verbal, of relevant facts made by a person who is dead, or who cannot be found, or who has become incapable of giving evidence, or whose attendance cannot be procured without an amount of delay or expense which under the circumstances of the case appears to the Court unreasonable, are them selves relevant facts in the following cases: * * * * (7) When the statement is contained in any deed, will or other document which relates to any such transaction as is mentioned in section 13, clause (a).
* * * * 33 Clause (7) makes relevant statements made in deeds, wills and such other documents which relate to transactions by which a right or custom in question "was created, claimed, modified, recognised, asserted or denied" (to add the words of cl.
(a)of section 13).
The clause does not allow introduction of parole evidence, see Field on the Law of Evidence 8th Edn.
p. 202.
Such parole evidence may be relevant under cl.
(5) of section 32, but that is not relied upon.
We questioned Mr. Agarwala whether he wished to rely upon clause (5), but he did not wish to put his case under that clause and we need not therefore consider the application of that clause.
We think Mr. Agarwala is right in taking this course, be cause cl.
(5) requires that such a statement should have been made before the quest, ion in dispute was raised.
The statements in question were definitely made after the question in dispute in the suit had already arisen, because one enquiry had already been made by Mi '.
Knox and the statements now relied upon were made in the second enquiry before Mr. Thompson.
Mr. Agarwala next wishes to use the statements made by Gaya Prasad on March 14, 1926 "exhibit 72"; but that clearly is not admissible, because when it was made in the suit, Gaya Prasad was being examined as a party before issues were framed.
In fairness to Mr. Agarwala it may be mentioned that he did not press the point after noticing the above fact.
Mr. Agarwala` contends lastly that as Dwarka Nath was adopted on November, 28, 1929 and the present suit was filed on May 21, 1945, after more than 15 years, and as during this time.
Dwarka Nath had been considered by everyone to be legally and validly adopted the suit ought to have been dismissed.
It may be pointed out that Parmeshwar Dayal never accepted the adoption of Dwarka Nath.
He had filed an earlier suit and questioned the competence of Rani Gomti Bibi to make the adoption of Bindeshwari Prasad.
In that suit he had denied that Rai Pratap Chand had given authority to his wife to make the adoption of a son after his death.
He consistently denied the validity of the second adoption and in these circumstances, it cannot be said that he was concluded by any rule of law from questioning the adoption of Dwarka Nath after Rani Gomti Bibi 's death.
On an examination of all the legal pleas against the judgment of the High Court we are satisfied that none of them avails the appellant.
In so far as the question of fact are concerned, we have already stated that we do not propose to go into them as it did, not appear to us that there was any legal reason for reaching a different conclusion.
We accordingly dismiss the appeal but order that the parties shall bear their own costs throughout.
Appeal dismissed.
| A widow whose estate was under the charge of the Court of Wards.
made an adoption and applied under section 37 of the U.P. Court of Wards Act, 1912, for permission to make the adoption.
The Collector refused the permission as the grant of authority to adopt, by the husband who died in 1901, was not proved.
The 1st respondent 's father, the nearest reversioner, filed a suit challenging the adoption as contrary to section 37 of the Act and the suit was decreed.
The widow.
there.after, applied to the Court of Wards for permission to adopt the appellant.
Fresh enquiries about grant of authority by the husband to adopt, were made, and permission was granted and the appellant was adopted in 1929.
Immediately after the adoption of the appellant the Court of Wards, released the estate and assumed charge of it again on behalf of the appellant who was a minor.
On the death of the widow in 1943, the 1st respondent 's father filed a suit, challenging the validity of the appellant 's adoption on the ground that the widow had no authority from her husband to adopt.
The Trial Court decreed the suit and the High Court, on appeal.
affirmed the decree.
In appeal to this Court it was contended that the conclusion of the Court of Wards to grant permission and the reasons for the decision could not be questioned in a civil suit.
HELD: The Civil Court was competent to reconsider the question, of the authority given by the husband, even after the consent of the Court of Wards.
Section 37 of the U.P. Court of Wards Act affects the competence of the wards to make an adoption, and as the consent of the Court of Wards is a pre requisite, any adoption made without such consent must be ineffective.
The section, however, does not make the sanction of the Court of Wards cure illegalities or breaches of personal law.
Nor does the sanction make up for incompetence arising under the personal law.
Those matters would have to be determ/ned according to the personal law in a Civil Court of competent jurisdiction.
[30E G] Section 53 also is not a bar to such a suit.
The section only provides that if the Court of Wards gave or refused its consent to a proposed adoption a suit would not lie to cancel the consent or to compel it.
It does not go to the length of saying that after the consent of the Court of Wards, the adoption itself cannot be questioned at all.
[30H] In deciding the question of authority, the statements made by witnesses at the second enquiry by the Court of Wards for giving its consent to adopt, could not be considered by the Civil Court they were not relevant or admissible either under section 32(7) or section ,of the Indian Evidence Act.
[32 D F; 33 A C] 28 As the 1st respondent 's father never accepted the appellant 's adoption it could not be said that the suit, filed more than 15 years after the adoption during which time the appellant had been considered by everyone to be legally and validly adopted, ought to be dismissed.
[33E G]
|
(C) No. 1237 of 1988.
(Under Article 32 of the Constitution of India).
P.P. Rao and Ms. K Amreshwari, B. Rajeshwar Rao and Vimal Dave for the Petitioners.
V.R. Reddy, Addl.
Solicitor General, K. Madhaya Reddy, G. Prabhakar, B. Kanta Rao, A. Ranganathan and A.V. Rangam for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The petitioners and respondents 4 to 16 are District and Sessions Judges in the State of Andhra Pradesh.
The petitioners are direct recruits whereas the respondents were promoted from the Subordinate judiciary.
The respondents were initially appointed on temporary basis in the year 1978/1979 but they were made substantive in the year 1983.
The petitioners who were appointed substantively in the year 1981 claim seniority over the respondents by way of this petition under Article 32 of the Constitution of India.
The recruitment to the Andhra Pradesh Higher Judicial Service (the Service) is governed by the Rules called "The Andhra Pradesh State Higher Judicial Service Special Rules" (the Special Rules).
Rules 1, 2, 4 and 6 of the Special Rules which are relevant are as under: "Rule 1.
Constitution: The service shall consist of the following categories: 550 Category 1 : District and Sessions Judges 1st Grade.
Category II : District and Sessions Judges, Second Grade including Chairman, Andhra Pradesh Sales Tax Appellate Tribunal, Chief Judge, City Civil Court, Additional Chief Judge, City Civil Court, Chief Judge, Court of small Causes, Chief City Magistrate, Chairman, Tribunal for Disciplinary Proceedings, Presiding Officers, Labour Courts and Addl.
District and Sessions Judges.
Rules 2.
Appointment : (a) Appointment to Category 1 shall be made by promotion from Category II and appointment to Category II shall be made: (i) by transfer from among: (a) Sub Judges in the Andhra State Judicial Service; or in the Hyderabad State Judicial Service; and (ii) by direct recruitment from the Bar: Provided that 33 1/3% of the total number of permanent posts shall be filed or reserved to be filled by direct recruitment.
Explanation: In the determination of 33 1/3% of the total number of permanent posts, fractions exceeding one half shall be counted as one and other fractions shall be disregarded.
(b) All promotions shall be made on grounds of merit and ability, seniority being considered only when merit and ability are approximately equal.
Rule 4.
Probation: Every person appointed to Category II otherwise than by transfer, shall, from the date on which he joins duty be on probation for a total period of one year on duty.
Rule 6.
Seniority: The seniority of a person appointed to Category 1 or Category 2 shall be determined with refer 551 ence to the date from which he was continuously on duty in that category.
" We may briefly notice the scheme of the Special Rules.
Rule 1 constitutes the Service.
Category 1 consists of District and Sessions Judges ' 1st grade and Category II consists of District and Sessions Judges Second grade.
Rule 1 does not say that Service shall consist of only permanent posts.
All the posts designated as District and Sessions Judges Second grade under Category II are part of the service under Rule 1.
In other words, as and when a post of District and Sessions Judge Second grade is created permanent or temporary it becomes part of the Service under Rule 1 of the special Rules.
Rule 2 provides the method of appointment.
Appointment to Category 1 is from Category II.
Appointment to Category II is from two sources.
By transfer from amongst the Subordinate Judges and by direct recruitment from the Bar.
Proviso to Rule 2 states that 33 1/3% of the total number of permanent posts shall be filled or reserved to be filled by direct recruitment.
All the posts of District and Sessions Judges Second grade are part of the Service but quota for the direct recruits is provided only in the permanent posts.
Rule 6 of the Rules provides for the fixation of seniority.
Under Rule 6 the seniority of persons appointed to Category 1 or Category II posts is fixed on the basis of continuous length of service in their respective posts.
On the plain reading of the Special Rules the salient features of the Service can be culled out as under: 1.
Rule 1 provides for the constitution of the Service.
All the posts of District and Sessions Judges Second grade created from time to time are part of the Service.
The natural corollary is that the Service consists of permanent as well as temporary posts.
The recruitment to Category II of the service is by transfer from amongst the Subordinate Judges and also by direct recruits from the Bar.
33 1/3% of the total number of permanent posts in Category II of the Service are to be filled by way of direct recruitment.
The seniority under Rule 6 is to be determined with reference to the date from which a person is continuously on duty.
Whether the person 552 is continuously on duty against a temporary post or permanent post is of no consequence.
A person is entitled to the fixation of his seniority on the basis of continuous length of service rendered either against permanent post or temporary post.
The three petitioners were appointed as District and Sessions Judges Second grade by direct recruitment on October 12, 1981.
Petitioners 1 and 2 joined service on October 23, 1981 and petitioner 3 on October 30, 1981.
Respondents 4 to 16 were appointed District and Sessions Judges Second grade by transfer from amongst the Subordinate Judges during the years 1978/79.
It is not disputed that permanent vacancies in their quota became available in the year 1983.
We, therefore, proceed on the basis that the petitioners were appointed substantive members of the Service earlier to respondents 4 to 16.
We may at this stage notice Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules (the State Rules).
The State Rules are general rules which are applicable to all the services in the State of Andhra Pradesh.
Needless to say that to the extent the Special Rules are applicable to the Service the State Rules are excluded.
Rule 10(a)(i) of the State Rules is as under: "10.
Temporary appointment.
(a)(i) Where it is necessary in the public interest to fill emergently a vacancy in the post borne on the cadre of a service, class or category and if the filling of such vacancy in accordance with the rules is likely to result in undue delay, the appointing authority may appoint a person temporarily otherwise than in accordance with the said rules.
" Mr. P.P. Rao, learned counsel for the petitioners has raised the following contentions for our consideration: 1.
That the Service consists of only permanent posts under the Special Rules.
There is no provision under the Special Rules for adding temporary posts to the cadre.
The appointment of respondents to the posts of District and Sessions Judges Second grade on temporary basis can at best be treated under rule 10(a)(i) of the State Rules.
553 2.
The temporary service rendered by respondents.4 to 16 being outside the cadre cannot be counted towards seniority.
Proviso to Rule 2 and Rule 6 of the Special Rules have to be read together and doing so the permanent vacancies having been made available for respondents 4 to 16 in the year 1983 their service prior to that date cannot be counted towards seniority.
Before dealing with Mr. Rao 's contentions, we may notice two preliminary contentions raised by Mr. K. Madava Reddy, learned counsel for the respondents.
Mr. Madava Reddy has invited our attention to the judgment of a Division Bench of Andhra Pradesh High Court in T.H.B. Chalapathi and others vs High Court of Andhra Pradesh and others, Writ Petition Nos.
1968/82, 52/83 and 12282/85 decided on December 28, 1985.
Those writ petitions were filed before the Andhra Pradesh High Court by the direct recruits to Category II of the Service claiming seniority over the persons who were appointed to category 11 on temporary basis earlier to them.
Similar questions were raised as are being raised by Mr. P.P. Rao before us.
By a well reasoned judgment the High Court rejected all the contentions of the direct recruits and dismissed the writ petitions.
It is not disputed that Special Leave Petition No.1035 of 1986 against the said judgment was dismissed by this Court on January 30, 1988.
Mr. Madava Reddy plausibly contends that all the contentions which are being raised by the petitioners in this Court, having been rejected by the High Court and special leave petition against the judgment of the High Court having been dismissed by this Court the same cannot be agitated once over again.
Mr. Madava Reddy then contended that the petitioners were appointed in the years 1981 and since then till the year 1988 twelve seniority lists have been published showing the petitioners below respondents 4 to 16.
At no point of time they challenged the seniority lists in the Court.
Even when the writ petitions filed by Chalapathi and others were pending they did not intervene before the High Court.
The petitioners, according to Mr. Madava Reddy, are guilty of gross delay and latches and as such are not entitled to get relief by way of this petition under Article 32 of the Constitution of India.
554 We see considerable force in both the contentions raised by Mr. Madava Reddy.
We are, however, of the view that it would be in the larger interest of the Service to dispose of this petition on merits.
We see no force.
in the contention of Mr. Rao that the Service consists of only permanent posts under the Special Rules.
We have already interpreted Rule 1 to mean that the Service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judges Second grade.
Even otherwise in the absence of any prohibition under the Special Rules the State Government can always create temporary posts as additions to the cadre.
Rule 10(a)(i) of the State Rules has no application to the Service which is governed by the Special Rules.
Rule 10(a)(i) provides for emergency appointments made on stop gap basis to meet a temporary exigency.
Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant service.
The appointments of respondents 4 to 16, on the other hand, Were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court.
We are of the view that the Special Rules provide a complete scheme for the appointment and seniority of the members of the Service.
Rule 10(a)(i) of the State Rules has no application to the Service Constituted under the Special Rules.
We, therefore, reject the contention raised by Mr. Rao.
Having taken the view that the Service under the Special Rules consists of permanent as well as temporary posts the second contention of Mr. Rao looses its ground.
Temporary, posts of District and Sessions Judges Second grade being part of the Service the seniority has to be counted on the basis of length of service including the service against a temporary post.
The third contention of Mr. Rao is mentioned to be rejected in view of Rule 6 of the Special Rules.
Rule 6 of the Special Rules is in no way dependent on proviso to Rule 2 of the Special Rules.
Both are to be operative independently.
In the scheme of the rules the seniority rule is not dependent on the quota Rule.
Quota has been provided for the direct recruits only against permanent posts.
The seniority rule permits the counting of total period of service from the date a person is on duty against a 555 post in the category.
Even though, the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service against temp orary as well as permanent posts respondents 4 to 16 have been rightly given seniority above the petitioners.
We, therefore, find no force in any of the contentions raised by Mr. Rao.
The writ petition is consequently dismissed.
No costs.
N.V.K. Petition dismissed.
| Recruitment to the Andhra Pradesh Higher Judicial Service is governed by "The Andhra Pradesh State Higher Judicial Service Special Rules".
Rule 1 constitutes the service.
Category 1 consists of District and Sessions Judges 1st grade and Category 11 consists of District and Sessions Judges, Second Grade.
Appointment to Category 1 is from Category 11.
Appointment to Category 11 is from two sources by transfer from amongst the Subordinate Judges and by direct recruitment from the Bar.
The petitioner were direct recruits whereas respondents 4 to 16 were promoted from the Subordinate judiciary.
The respondents were Initially appointed on temporary basis in the yew 1978/1979 but they were made substantive in the year 1983.
The petitioners who were appointed substantively in the year 1981 claimed seniority over the said respondents, and riled the Writ Petition under Article 32 of the Constitution of India for relief.
It was contended on their behalf that: (1) The Service consists of only permanent posts, there is no provision under the Special Rules for adding temporary posts to the cadre, consequently the appointment of respondents 4 to 16 to the post of District and Sessions Judges, Second Grade on temporary basis can at best be treated under Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules.
(2) The temporary service rendered by the respondents 4 to 16 being outside the cadre cannot be counted towards seniority.
(3) Porviso to Rule 2 and Rule 6 of the Special Rules have to be read together, and as such the permanent vacancies having been made available for them in the year 1983 their service 548 prior to that date cannot be counted towards seniority.
The respondents constested the writ petition by contending that the petitioners were appointed in the year 1981 and since then till the year 1988, twelve seniority lists have been published showing the petitioners below respondents 4 to 16, and at no point of time they challenged the seniority lists in the Court.
Even when the Writ Petition T.H.B. Chalapathi & Ors.
vs High Court of Andhra Pradesh & Ors., was pending in the High Court they did not intervene.
The petitioners were thus guilty of gross delay and latches and as such are not entitled to get relief in the Writ Petition.
Dismissing the writ petition, this Court, HELD: 1.
(i) Rule 1 has to be interpreted to mean that the service under the Special Rules consists of all the posts permanent and temporary which have been designated as District and Sessions Judge Second Grade.
Even otherwise in the absence of any prohibition under the Special Rules, the State Government can always create temporary posts as addi tions to the cadre.
[554 B] (ii) Rule 10(a)(i) of the Andhra Pradesh State and Subordinate Service Rules has no application to the Andhra Pradesh Higher Judicial Service which is governed by the Special Rules.
Rule 10(a)(i) provides for emergency appointments made on stop gap basis to meet a temporary exigency.
Apart from that the temporary appointments under the said Rules are made without following the procedure prescribed under the Rules governing the relevant Service.
[554 C D] In the instant case, the appointments of respondents 4 to 16 were made under Rule 2 of the Special Rules by the State Government in consultation with the High Court.
The Special Rules provide a complete scheme for the appointment and seniority of the members of the Service.
[554 D] 2.
Temporary posts of District and Sessions Judges Second Grade being part of the Service, the seniority has to be counted on the basis of length of service including the service against the temporary posts.
[554 F] 3.
Rule 6 of the Special Rules is in no way dependent on the proviso to Rule 2 of the Special Rules.
Both are to be operative independently.
In 549 the scheme of the rules, the seniority rule is not dependent on the quota Rule.
Quota has been provided for the direct recruits only against permanent posts.
The seniority rule permits the counting of total period of service from the date a person is on duty against a post in the category.
[554 G H] In the instant case, even though the petitioners were appointed substantively to the service earlier to respondents 4 to 16 but in view of Rule 6 they cannot be declared senior on the basis of continuous length of service.
Respondents 4 to 16 have been rightly given seniority above the petitioners.
[555 A]
|
Appeal No. 583 of 1962.
Appeal by special leave from the judgment and order, dated November 23, 1959, of the Allahabad High Court in Special Appeal No. 524 of 1958.
section V. Gupte, Solicitor General, Guru Dayal Srivastava and T. Satyanarayana, for the, appellant.
B. R. L. Iyengar and A. G. Ratnaparkhi, for respondents.
Nos. 1, 2, 4, 8 & 12 to 14.
C. B. Agarwal and O. P. Rana, for Intervener No. 1.
A. V. Rangam, for Intervener No. 2. G. C. Kasliwal, Advocate General, for the State of Rajasthan and R. N. Sachthey, for Intervener No. 3.
I. N. Shroff, for Intervener No. 4.
The Judgment of GAJENDRAGADKAR, C.J., HIDAYATULLAH, SHAH AND SIKRI, JJ was delivered by HIDAYATULLAH, J. WANCHOO, J.delivered a dissenting Opinion.
Hidayatullah J. The Municipal Board, Hapur (shortly the appellant Board) passed a Special Resolution (No. 296) on September 28, 1956 imposing water tax in Hapur from April 1, 1957 and a notification by the Government of Uttar Pradesh was.
Published in the Uttar Pradesh Gazette under section 135(2) of the U. P. Municipalities Act (Act 2 of 1916) dated December 11, 1956 notifying the resolution.
Fifteen house owners of Hapur who received notices from the appellant Board for the payment of the tax assessed in respect of their houses, petitioned to the High Court at Allahabad under article 226 of the Constitution and asked for a writ or order preventing the appellant Board from realising the tax.
Their contention was that the tax was illegal as it was imposed in contravention of the provisions of the Munici palities Act.
The main grounds of objection were (a) that the, resolution of the appellant Board framing the proposal was not published in a local paper of Hapur printed in Hindi, and (b) that the rules framed for the imposition of the tax did not accompany the resolution which was affixed on the notice board at the office of the appellant Board in purported compliance with the requirements for publication.
The imposition was also challenged on the ground that articles 14 and 19 of the Constitution were violated 954 The petition was heard by Mr. Justice James who decided all the points against the appellant Board.
He held that the tax was illegal inasmuch as the mandatory requirements of the Municipalities Act were not complied with by the appellant Board while imposing the tax, and that section 135(3) of the Act (which cures all defects in the imposition of tax by making the notification of Government conclusive evidence of the legality of the imposition) was ultra vires article 14 of the Constitution because it created a bar against proof and left no remedy to the tax payers thereby making a discrimination between them and other litigants.
He further held that the sub section, by making Government the sole judge of compliance with the Act conferred judicial power on Government contrary to the intendment of the Constitution.
The appellant Board was accordingly ordered not to collect the tax from the petitioners.
The appellant Board appealed under the Letters Patent.
The Divisional Bench hearing the special appeal agreed with Mr. Justice James.
The present appeal has been filed by special leave of this Court.
Since it will be necessary to 'consider whether the appellant Board complied with the requirements of the Municipalities Act or not and, if not, to what extent, it is necessary to analyse the provisions in the Municipalities Act for the imposition of a tax and then to follow that up with a nar ration of the steps taken by the appellant Board.
Section 128 of the Municipalities Act confers on the Munici palities in Uttar Pradesh the power to levy taxes and enumerates the kinds of taxes.
One such tax mentioned in cl.
(x) of sub section (1) of the section reads : "a water tax on the annual value of the building or land or both".
This was the tax which the Municipality had attempted to impose in Hapur.
There can be no question that the appellant Board had the competence to impose this tax and so the first question is whether it went about the business in the wrong way and, if it did, what is the effect.
Section 129 specifies certain restrictions on the imposition of water tax.
We need not refer to them because no objection was raised that the restrictions there prescribed had not been observed.
Sections 131 to 135 lay down the procedure for the imposition of the tax.
Section 131 provides that when a Board desires to impose a tax it shall, by special resolution, frame a proposal specifying the tax, the person or class of persons to be made liable and the description of the property or other taxable things or circumstances in respect of which they are to be made liable, the amount or rate leviable from such person or class of persons and any other matter which the State Government may require 955 by rules to be specified.
The same section requires the Board to prepare a draft of the rules which it desires the State Government to make and the Board is required to publish the proposal, the draft rules so framed, and a notice in the prescribed form, in the manner laid down by section 94.
That section says that every resolution passed by a Board at a meeting, shall, as soon thereafter as may be, be published in a local paper published in Hindi and where there is no such local paper, in such manner as the State Government may, by general or special order, direct.
After the notice etc. are published, section 132 enables any inhabitant of the Municipality to, submit to the Board an objection in writing to all or any of the proposals framed by it and the Board is required to consider the objection so submitted and to pass order thereon by special resolution.
If the Board decides to modify its proposals or any of them it must publish the modified proposals and (if necessary) the revised draft rules with a fresh notice, for objections.
Any new objection so received has to be dealt with in the same way.
After the Board has finally settled the proposals, it has to submit the proposals, the objections (if any) and the orders made in connection therewith, to the prescribed authority.
The prescribed authority under section 2(17) (ii) means an officer or a body corporate appointed by the State Government in this behalf by notification in the official Gazette, and, if no such officer or body corporate is appointed, the Commissioner.
It may be stated that the proposal we are considering was accepted by the Commissioner.
Then follows section 133 and it gives power to the State Government or the prescribed authority to reject, sanction or modify any proposal.
When the proposals are sought to be modified they have to be referred back to the Board for further consideration.
When the proposals are sanctioned by the State Government or the prescribed authority section 134 of the Act requires that the State Government, after taking into consideration the draft rules submitted by the Board, shall proceed to make such rules, under its powers under section 296 of the Act, in respect of the tax, as the Government may consider necessary.
After the rules have been made, the order of sanction and a copy of the rules are sent to the Board and thereupon the Board by special resolution directs the imposition of the tax with effect from a date which it specifies in the resolution.
This is stated in section 135 which may be reproduced here fully "135.
Imposition of tax, (1) A copy of the resolution passed under Section 134 shall be submitted to the State Government, 956 if the tax has been sanctioned by the State Government, and to the Prescribed Authority, in any other case.
(2) Upon receipt of the copy of the resolution the State Government, or Prescribed Authority, as the case may be, shall notify in the official Gazette, the imposition of the tax from the appointed date, and the imposi tion of a tax shall in all cases be subject to the condition that it has been so notified.
(3) A notification of the imposition of a tax under sub section (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act.
" The appellant Board passed a special resolution in terms of section 131 (1) of the Act.
The publication of the resolution was made by affixing a copy of the resolution on the notice board as provided by a notification dated July 5, 1916 and by beat of drum in the town of Hapur.
The resolution was, however, not published in a local paper published in Hindi as required by section 94(3) of the Act.
It is admitted that two Hindi weeklies entitled "Janmat" and "Bharatvarsh" and one Hindi daily entitled "Vyapar" were published at that time at Hapur.
The appellant Board did not publish the notice etc.
in these journals because, in its opinion, none of these papers was a suitable local paper having wide circulation in the town at the time.
Notification of the 5th July, 1916 provides that, where, in a Municilpality, there is no local paper, a copy of every resolution passed by a Board at a meeting shall, within ten days from the date of the meeting, be pasted up and for thirty days be kept pasted up on a notice board to be exhibited for public information at the building in which the meetings of the Board are ordinarily held.
Two objections against the tax found favour with the High Court.
The first objection arose from the non observance of section 94(3) which, as already noticed, requires that the publication of the proposal etc.
should be in a local newspaper published in Hindi.
The High Court held that there was no need to take recourse to the notification of the 5th of July 1916, because the first part of section 94(3) could be complied with.
The next objection against the tax was that even if the special Resolution under section 131 was properly published, the rules which ought to accompany the Resolution were not exhibited.
The appellant Board claimed that the court was precluded from making an enquiry by reason of section 135(3) which made the notification conclusive evidence that 957 the tax was imposed in accordance with the provisions of the Municipalities Act.
The respondents met this by challenging the legality of the sub section.
They pleaded that it was discriminatory inasmuch as it did not allow one set of litigants to prove their allegations as against the general body of litigants and further that there was a conferral of judicial functions on the legislature which was contrary to the separation of powers under the Constitution.
The High Court accepted these contentions also.
There can be no doubt that the language of section 135(3) is as wide as it is peremptory.
Read literally it can lead to the conclusion that even an illegal tax cannot be questioned.
Prima facie, it appears that even if a Municipal Board goes outside the categories of taxes mentioned in section 128 and if the Government is persuaded to notify the imposition, all will be well. 'This cannot be the intent and hence not the meaning.
We must, therefore, see if the words are susceptible of another construction obvitating such a patently absurd result.
There is at the very start the fundamental fact that the power to tax in a State can only be exercised by the State Legislature, the extent of the power being fixed by the Constitution.
The taxes which the State Legislatures are allowed to raise are enumerated in the Seventh Schedule to the Constitution.
The State Legislature can impose all these taxes itself but it is usual to authorise the levy of some of them by local authorities for their own purpose.
Taxes so raised by it local authority are not imposed by it as a legislature but as a delegate of the legislature.
What is done is binding by the authority of the legislature and the tax is valid only if it is one of the, taxes the delegate can raise and the delegate imposes it in accordance with the conditions laid down by the legislature.
It is thus that we find an elaborate procedure prescribed by all the Municipal Acts.
In the U.P. Municipalities Act also, as we have seen, a Board must first pass a special Resolution framing a proposal and the draft rules, invite objections, consider them, and then get them approved by Government.
After this approval there must be a final special resolution imposing the tax from a particular date and the Government then notifies the imposition of the tax.
It is the duty of Government to see that the various steps laid down for the imposition of the tax are followed.
Before it notifies the resolution Government satisfies itself about the requirements.
The notification is made conclusive proof that the tax is imposed in accordance with the provi 958 sions of the Act.
The question arises : Is this rule of conclusive evidence such as to shut out all enquiry by courts ? We have no hesitation in answering the question in the negative.
There are certain matters which, of course, cannot be established conclusively by a notification under section 135(3).
For example, no notification can issue unless there is a special resolution.
The special resolution is the sine qua non for the notification. 'The State Government cannot impose, a tax all by itself by notifying the imposition of the tax, without a resolution by the Board.
Again, the notification cannot authorise the imposition of a tax not included in section 128 of the Municipalities Act.
Neither a Municipal Board nor a State Government can exercise such a power.
A tax can only be said to be imposed in accordance with the provisions of the Municipalities Act, if it is contemplated by the Act.
There is a difference between the tax and the imposition of the tax.
The former is the levy itself and the latter the method by which the levy is imposed and collected.
What the sub section does is Lo put beyond question the procedure by which the tax is imposed, that is to say, the various steps taken to impose it.
A tax not authorised can never be within the protection afforded to the procedure for imposing taxes.
Such a tax may be challenged, not with reference to the manner of the imposition but as an illegal impost.
It would thus appear that it the very start the selection of the tax must be with reference to the delegated powers.
The Municipal Board of the State Government cannot select a tax which the legislature has not mentioned in section 128 of the Municipalities Act.
As the State Government cannot itself impose the tax it must have before it, the special resolution of the Board before notifying the imposition.
Between the special resolution selecting a tax for imposition and the special resolution imposing it sundry procedure is gone through and section 135(3) say , that the notification by Government is conclusive proof that the pro cedure was correctly followed.
It is argued that sections 131 to 134 use mandatory language and it is the.intention of the Legislature to secure obedience to its wishes and therefore it is for the courts to say whether those provisions were followed by the Municipal Board and the State Government.
There can be no doubt that some of the provisions are mandatory.
But all provisions are not of the same character.
In Raza Bunland Sugar Co. Ltd. vs The Municipal Board, Rampur(1) sections 131 to 134 were considered in the light of the tests (1) ; 959 usually applied to determine whether a provision of law is mandatory directory.
It was there pointed out that all the sections in, spite of the language used in them were not mandatory.
The majority opinion considered that the first part of section 131(3) requiring publication of proposals was mandatory and thesecond part which required that publication should be in the manner required by section 94(3) was only directory.
In one of the minority opinions no such distinction was made but section 94(3) was held to be directory.
In the other minority opinion distinction was made between provisions for the protection of tax payers which were stated to be mandatory and provisions for promoting despatch, publicity and efficiency were stated to be directory requiring substantial but not literal compliance.
In that case the notice imposing water tax in Rampur was published in Hindi but in a news paper published in Urdu.
The majority treating the latter part of section 131 (3) as directory held that there was Substantial compliance.
The minority treating section 131(3) to be mandatory upheld the tax treating section 94(3) as directory.
One of the minority views relied upon section 135(3) as shutting out enquiry.
In Berar Swadeshi Vanaspati vs Municipal Committee Sheogaon & Anr.(1) the Municipality passed a resolution tinder section 67(1) of the C. P. & Berar Municipalities Act, 1922.
Sub sections (1) to (7) incorporated provisions similar to sections 131 135 of the U. P. Municipalities Act.
An attempt to question the tax on the ground that the procedure prescribed by section 67 was not followed was repelled.
It was observed: "This notification therefore 'clearly is one which directs imposition of octroi and falls within sub section (7) of section 67 and having been notified in the Gazette it is conclusive evidence of the tax having been imposed in accordance with the provisions of the Act and it can not be challenged on the ground that all the necessary steps had not been taken.
" The defect in the imposition of the tax here being of the same character as in the two cases of this Court above cited, the imposition would have the protection of section 135(3) and the tax must be deemed to be imposed according to the procedure laid down in the Act.
As observed already, some of the provisions controlling the imposition of a tax must be fully complied with because they are vital and therefore mandatory, and the others may be complied (1) 960 with substantially but not literally, because, they are directory.
In either case the agency for seeing to this compliance is the State Government.
It is hardly to be expected that the State Government would not do its duty or that it would allow breaches of the provision to go unrectified.
One, can hardly imagine that ,an omission to comply with the fundamental provisions would ever be condoned.
The law reports show that even before the ,addition of the provision making the notification conclusive ,evidence of the proper imposition of the tax complaints brought before the courts concerned provisions dealing with publicity or requiring ministerial fulfillment.
Even in the two earlier cases 'which reached this Court and also the present case, the complaint is of a breach of one of the provisions which can only be regarded as directory.
In cases of minor departures from the letter of the law especially in matters not fundamental, it is for the Govern ment to see whether there has been substantial or reasonable compliance.
Once Government condones the departure, the decision of Government is rightly made final by making the notification conclusive evidence of the compliance with the requirements of the Act.
It is not necessary to investigate whether a complete lack ,of observance of the provisions would 'be afforded the same protection.
It is most unlikely that this would ever happen and before we pronounce our opinion we should like to see such a case.
It was, however, contended that there has been excessive ,delegation, inasmuch as the State Government has been given the power to condone breaches of the Act and thus to set at naught the Act itself.
This is not a right reading of the relevant 'provisions.
We have already pointed out that the power to tax is conferred on the State Legislature but is exercised by the local authority under the control of the State Government.
The taxes with which we are concerned are local taxes for local needs and for which local inquiries have to be made.
They are rightly left to the representatives of the local population which would bear the tax.
Such taxes must vary from town to town, from one Board to another, and from one commodity to another.
It is impossible for the Legislature to pass statutes for the imposition of such taxes in local areas.
The power must be delegated.
Regard being had to the democratic set up of the municipalities which need the proceeds of the taxes for their own administration, it is proper to leave to these municipalities the power to impose and collect these taxes.
The taxes are, however, predetermined and a procedure for consulting the wishes of the people is devised.
But the 961 matter is not left entirely in the hands of the Municipal Boards.
As the State Legislature cannot supervise the due observance of its laws by the Municipal Boards, power is given to the State Government to check their actions.
The imposition of the tax is left to the Municipal Boards but the duty to see that the provisions for publicity, and obtaining the views of the persons to be taxed are fully complied with, is laid upon the State Government.
The proceedings for the imposition of the tax, however, must come to a conclusion at some stage after which it can be said that the tax has been imposed.
That stage is reached, not when the special resolution of the Municipal Board is passed, but when the notification by Government is issued.
Now it is impossible to leave the matter open so that complaints about the imposition of the tax or the breach of this rule or that may continue to be raised.
The door to objections must at some stage be shut and the Legislature considers that, if the State Government approves of the special resolution, all enquiry must cease.
This is not a case of excessive delegation unless one starts with the notion that the State Government may collude with the Municipal Board to disregard deliberately the provisions for the imposition of the tax.
There is no warrant for such a supposition.
The provision making the notification conclusive evidence of the proper imposition of tax is conceived in the best interest of compliance of the provi sions by the Boards and not to facilitate their breach.
It cannot.
therefore, be said that there is excessive delegation.
The matter may be looked at from another point of view Excessive delegation is most often found when the Legislature does not perform all the essential legislative functions and leaves them to some other agency.
The Legislature here performs all essential functions in the imposition of the tax.
The selection of tax for imposition in a Municipal area is by the legislative will expressed in section 128.
Neither the Municipal Board, nor the Government can go outside the List of taxes therein included.
The procedure for the imposition of the tax is also laid down by the Legislature for the Municipal Board to follow and the State Government is there to ensure due observance of that procedure.
We have already shown above that it would be impossible for the Legislature to legislate for the numerous Municipal Boards and local authoriteis with a view to raising taxes for them.
The provisions, such.
as they are, are the best means of achieving consultation of the local population and close scrutiny of the actions of their representatiaves in imposing the tax.
The notification which issues is given finality by the voice of the Legislature.
It would, there CI/65 18 962 fore, appear that in the selection of the ox and its imposition the Legislature plays a decisive part and also lays down the method by which the tax is to be imposed.
The Legislature does not make local enquiries, hear objections and decide them functions which are most inappropriate for the Legislature to perform.
This task is delegated to the appellant Board which is the representative body of the local population on whom the tax is levied.
In other words, all the essential functions of Legislation are performed by the State Legislature and only the minor functions necessary for the imposition of the tax and the enquiries which must be made to ascertain local opinion are left to the Municipal Boards.
An additional check is available as Government can veto the actions of a Board if it does not carry out the mandate of the Legislature.
In our judgment, there was no excessive delegation or a conferral of Legislative functions on the appellant Board or the State Government.
It remains to consider two other arguments in the case.
The first is the question of discrimination which is said to arise from the proviso which makes the notification conclusive in respect of the procedure by which the tax is imposed.
There are numerous statutes, including the Evidence Act, in which a fact is taken to be conclusively proved from the existence of some, other fact.
The law is full of fictions and irrebuttable presumptions which also involve proof of facts.
It has never been suggested before that when the Legislature says that enquiry into the truth or otherwise of a fact shall stop at a given stage and the fact taken to be conclusively proved, a question of discrimination arises.
The tax payers in the Municipality are allowed under the Municipalities Act to object to the proposal for the tax and the rules and to have their objections considered.
They cannot, of course, be allowed to keep on agitating and a stage must come when it may be said that the provisions of the Act have been duly observed.
That stage is reached after Government has scrutinized the proposal.
the rules, the objections and the orders and has approved of the proposal, a special resolution is passed by the Municipal Board and a notification is issued.
It cannot be said that sub section
(3) of s, 135 which leads to the conclusion that the imposition of the tax is according to the Municipalities Act is discriminatory because it only concludes objections against the procedure followed in the imposition of the tax.
The next objection that the impugned sub section involves the exercise of judicial functions not open to the Legislature, is wholly erroneous.
The sub section only shuts out further enquiry and 963 makes the notification final.
There is no exercise of a judicial function.
In our country there is no rigid separation of powers and the legislature often frames a rule such as is incorporated in the third sub section of section 135.
The Evidence Act is full of such Provisions.
In the United States of America where the separation of powers is extremely rigid in some of the constitutions of the States it may be open to objection that the Legislature in shutting out enquiry into the truth of a fact encroaches upon the judicial power of the State.
Such disability has never been found to exist in our country although legislation of this type is only too frequent The objection is, therefore without substance.
In the result we are "of opinion that the judgment of the High Court under appeal must be set aside.
We accordingly set it aside and order the dismissal of the petition under Art, 226 and 227 of the Constitution from which the present appeal has arisen.
In the circumstances of the case there shall be no order as to costs.
Wanchoo J.
I regret I am unable to agree.
This appeal by special leave from the judgment of the Allahabad High Court raises the question of vires of section 135(3) of the U.P. Municipalities Act, No. 2 of 1916, (hereinafter referred to as the Act).
the facts in the case are not in dispute and may be briefly stated.
The appellant, namely, the Municipal Board Hapur, decided to impose water tax from April 1, 1957.
In consequence, steps were taken under sections 131 to 135 of the Act to effectuate that purpose.
However, proposals and draft rules were never published as required by section 131(3) of the Act.
All that was done was that a notice in the form set forth in Sch.
III was pasted on the notice board and there was some beat of drum with respect to the notice.
Even so, the draft rules were not appended to the notice which was put up on the notice board and in effect there was more or less no compliance with the provisions relating to ;the publication of proposals and draft rules.
Eventually a notification was issued under section 135(2) of the Act by the relevant authority about the imposition of the tax from April 1, 1957.
Thereafter collection of tax began.
The respondents who are residents of Hapur received notices for payment of tax.
Thereupon they filed a writ petition in the High Court, and their main grievance was that the provisions of section 131 relating to publication of proposals and draft rules were not complied with and thus they were de.
proved of an opportunity to file objections as provided under section 132 of the Act.
They contended that the publication as pro 964 vided in section 131 of the Act was mandatory and as a mandatory provision of the Act was not complied with, the imposition of the tax was invalid.
The petition was heard by a learned Single Judge who found, as already indicated that the provisions of section 131(3) relating to publication had not been complied with, consequently, the residents of Hapur had no opportunity of making objections to the proposals and draft rules.
Reliance however was placed on behalf of the appellant on section 135(3) of the Act, which is in these terms : "A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act.
" In reply to this, the respondents contended that section 135(3) was ultra vires, and this contention was accepted by the learned Single Judge.
He therefore allowed the petition and directed the appellant not to collect water tax from the respondents until such time as the tax was imposed in strict compliance with the provisions of the Act.
Then there was an appeal by the appellant to a Division Bench.
There also reliance was placed on section 135(3) of the Act. 'Me Division Bench upheld the order of the learned Single Judge, though its approach to section 135(3) was different.
It held that section 135(3) was not a provision for validating anything done without complying with the provisions of the Act and it could not protect the invalidity of a tax if it was invalid on account of its being imposed without following the legal procedure.
Then there was an application by the appellant for a certificate to appeal to this Court, which was refused by the High Court.
The appellant thereupon got special leave and that is how the matter has come up before this Court.
The main contention on behalf of the appellant before this court is that section 135(3) which lays down that the notification under section 135(2) would be conclusive proof that the tax had been imposed in accordance with the provisions of the Act bars any enquiry into the various procedural steps taken for the imposition of the tax, and the court where such a question is raised must hold that the tax has been imposed in accordance with the provisions of the Act.
Once the court comes to that conclusion it would mean that it must assume that the necessary procedural steps for imposing tax had all been properly complied with and 965 therefore there could not be any invalidity of the tax on the ground that all steps necessary for the valid imposition of the tax had not been taken.
It is further submitted that section 135(3) bars enquiry as to the procedural steps necessary for imposing the tax which are contained in sections 131 to 133 of the Act, and it is urged that what a court can enquire is whether the special resolution as required by section 134 has been passed by the municipality or not.
On the other hand, learned counsel for the respondents con tends that if section 135(3) is to be given the meaning for which the appellant contends it will be ultra vires because then there will be an abdication of its essential legislative functions by the legislatures with respect to imposition of tax and therefore section 135(3) would be bad on the ground of excessive delegation.
It is further urged on behalf of the respondents that section 135(3) read literally not only bars enquiry into procedural steps necessary for the imposition of the tax, which, according to learned counsel, are contained in sections 131 to 135(1) but also bar , enquiry as to whether the tax is in accordance with sections 128 to 130, which are substantive provisions with respect to taxes which can be imposed by municipal boards.
Learned counsel for the respondents thus urges that section 135(3) would give blanket power for the imposition of any tax whether it is contained in section 128 or not and would also permit violating the restrictions contained in sections 129 and 130; and if that be so, it would be a case of complete abdication of its essential functions by the legislature with respect to imposition of tax and a gross case of excessive delegation.
The question that falls for consideration therefore is about the scope of section 135(3) and whether on a true interpretation of that provision it can be said to amount to a case of excessive delegation and therefore liable to be struck down on that count.
Before I come to section 135(3) I may indicate the scheme of municipal taxation contained in sections 128 to 135 of the Act.
Section 128 mentions the taxes which a board may impose sub ject to any general rules or special orders of the State Government in this behalf.
Section 129 lays down certain restrictions on the imposition of water tax and section 130 lays down certain restrictions on the imposition of certain other taxes.
Section 130 A specifies the powers of the State Government to require a board to impose taxes.
Then comes section 131 to 135 which are obviously procedural provisions with respect to imposition of any tax mentioned in section 128.
That these are procedural provisions is clear from section 136 of the Act which lays down that the 966 procedure for abolishing a tax or for altering a tax in respect of certain matters shall, so far as may be, be the procedure prescribed by sections 131 to 135 for the imposition of a tax.
The essentials of the procedure contained in sections 131 to 135 may be briefly summarised thus.
When a board desires to impose a tax it has to pass a special resolution framing proposals specifying the tax, the persons or class of persons on whom the tax will be imposed, the amount or rate leviable and any other matter referred to in section 153 which the State Government requires by rules to be specified.
The board has also to prepare a draft of the rules which it desires the State Government to make in that behalf.
After the proposals and draft rules have been prepared the board is required to publish them along, with a notice in the form set forth in Sch.
III: (see section 1 3 1).
On the publication of the notice along with the proposals and draft rules any inhabitant of the municipality has the right to submit objections in writing and the board has to take such objections into consideration and pass orders thereon by special resolution.
If the board decides to modify its proposals, it shall publish the modified proposals and (if necessary) revised draft rules in the same manner as the original proposals and draft rules were published.
If any objections are received to the modified proposals they are again dealt with by the board which has to pass orders thereon by special resolution.
When the board has finally settled its Proposals, it has to submit them, along with the objections (if any) to the proper authority, section (132).
The proper authority may either refuse to sanction the proposals or return them to the board for further consideration or sanction them without modifications or with such modification not involving, an increase of the amount to be imposed, as it deems fit; (section 133).
When the proposals have been sanctioned by the proper authority, the State Government after taking into consideration the draft rules submitted by the board has to make such rules in respect of the tax as for the time being it considers necessary.
When the rule. , have been made, the order of sanction and a copy of the rules has to be sent to the board and thereupon the board has by special resolution to direct the imposition of the tax with effect from a date to be specified in the resolution : (section 134).
Thereafter a copy of the resolution passed under section 134 is submitted to the proper authority.
Upon receipt of the copy of the resolution the proper authority has to notify in the official gazette the imposition of the tax from the appointed day and the imposition of a tax shall in all cases be subject to the condition that it has been so notified.
967 It will be seen from the above procedural provisions that the legislature has taken great care to see that the tax is impose, after the inhabitants of a municipality have had a chance to make representations in that behalf and after the tax has been approved at all stages including the disposal of objections by means of special resolutions, which require a special quorum for the meeting in which they are passed.
Further the legislature has taken care to provide that the disposal of objections by a board even by special resolution is not sufficient and it has required that the objections shall be sent to the proper authority, presumably for its consideration before it sanctions the tax.
These provisions to my mind indicate the safeguards the legislature intended in a case of this kind where the legislature itself has not indicated the rate of tax but has merely indicated the heads of taxation and the fixation of rate of tax and all incidental matters have been delegated to the board subject to the supervision of the State Government.
It is after all this elaborate procedure has been gone through that a tax can be validly imposed by the delegate, namely the board.
This brings us to section 135(3) which has already been set out.
The first question that arises is the interpretation of this provision.
As I have already indicated two different submissions have been made in this connection on behalf of the parties.
The appellant submits that this section only bars enquiry by the court into the procedural provisions contained in section 131 to section 133.
On the other hand, the respondents contend that this provision bars enquiry into all matters contained in section 128 to section 135(1).
If the words of this provision were to be literally interpreted they lay down that the notification under section 135(3) shall be conclusive proof that the tax has been imposed in accordance with the provisions of the Act. 'Me last words are very wide and it is contended on behalf of the respondents that they would include all the provisions of the Act and once a notification is issued under section 135(2) the court is barred from inquiring whether the tax is against any of the provisions of the Act.
I feel however that even though the words may be capable of such a wide interpretation, as is being, put upon them on behalf of the respondents.
it would not be right to read them as if they provide that a notification under section 135(2) bars enquiry even into the question whether the tax is one which could be imposed by the board at all under section 128.
It would to my mind be proper to read the section in a restricted sense and to hold that when it speaks of tax being imposed "in accordance with the provisions of this Act" it refers only to 'the procedural provisions relating to the 968 imposition of tax by the board.
The legislature by these Words could not have intended that the board could impose any tax which was even not within the legislative competence of the State legislature and enquiry into that aspect would also be barred.
Therefore I must reject the extreme argument on behalf of the respondents that these words mean that the court is barred from enquiring even whether the tax imposed is such as can be properly imposed by a board under section 128 of the Act.
I must read down these words only to mean that they bar an enquiry as to compliance with the procedural provisions of the Act with respect to the imposition of a tax.
This brings me to the next question namely whether the bar created by this provision is only with respect to section 131 to section 133 as urged on behalf of the appellant or goes further.
I have already indicated that the procedural provisions for the imposition of a tax by the board are contained in sections 131 to 135(1).
It is after these procedural provisions are compeed with that a notification under section 135(2) is issued.
I can understand section 135(3) being restricted in its application to procedural provisions only with respect to the imposition of a tax; but I cannot understand how that provision can be read down further so that it bars enquiry only into some procedural provisions i.e. from section 131 to section 133, and not into the other procedural provisions i.e. section 134 and section 135(1).
I can see no way of reading section 135(3) in the manner suggested on behalf of the appellant.
1st therefore hold that section 135(3) bars enquiry by courts into all procedural provisions relating to imposition of taxes and therefore it bars enquiry into any matter covered by section 131 to section 135(1) of the Act.
This brings me to another question namely, what is the nature of the provision contained in section 135(3) of the Act.
Is it merely a rule of evidence as urged on behalf of the appellant or is it more than that and is a substantive provision in itself ? This Court had occasion to consider the question whether a rule of irrebuttable presumption was a rule of evidence or a substantive provision in Ishar Ahmad Khan vs Union of India(1) and observed that "the proper approach to adopt would be to consider whether fact A from the proof of which a presumption is required to be drawn about the existence of fact B is inherently relevant in the matter of proving fact B and has inherently any probative or persuasive value in that behalf or not.
If fact A is inherently relevant in proving the existence of fact B and to any rational (1) [1962] Supp. 3 S.C.R. 235.
969 mind it would bear a probative or persuasive value in the matter of proving the existence of fact B, then a rule prescribing either a rebuttable presumption or an irrebuttable presumption in that behalf would be a rule of evidence.
On the other hand, if fact A is inherently not relevant in proving the existence of fact B or has no probative value in that behalf and yet a rule is made prescribing for a rebuttable or an irrebuttable presumption in that connection, that rule would be a rule of substantive law and not a rule of evidence.
" It is on this principle that I must consider whether section 135(3) is merely a rule of evidence or a substantive provision.
To my mind it cannot be said from the mere fact that a notification has been published under section 135(2) that that fact is inherently relevant in showing that all the procedural provisions have been complied with; nor can it be said that that fact has inherent probative or persuasive value.
There is in my opinion no inherent connection between the publication of a notification under section 135(2) and the compliance with all the procedural provisions (namely, section 131 to section 135(1) ) of the Act.
It will all depend on whether the proper authority has been vigilant or not in seeing that all the provisions contained from section 131 to section 135(1) have been complied with.
I would therefore hold that section 135(3) is not a rule of evidence; it is a substantive provision which lays down in effect that once a notification under 135(2) is issued it will be conclusively presumed that the tax is in accordance with all the procedural provisions with respect to the imposition thereof In other words, the effect of the subs tantive provision contained in section 135(3) really comes to this.
namely, that all the provisions from section 1 3 1 to section 1 3 5 (1 ) are wiped out and the notification issued under section 135(2) becomes the sole basis of the imposition of tax.
It has been said that there is no reason to suppose that the proper authority will not see that the provisions of section 131 to section 135(1) are complied with and that there is no reason to presume that the provision of section 135(3) will be abused.
So far as the first aspect is concerned it is obvious in this very case that the proper authority has not seen that the provisions of section 131 to section 133 have been complied with.
As to the second I do not say that the proper authority will abuse the provisions of section 135(3); but that does not in my opinion make any difference to the devastating effect of that provision on compliance with the procedural provisions contained in section 131 to section 135(1) of the Act in the matter of imposition of tax.
The effect of section 135(3) which in my opinion is a substantive provision is that the procedural provisions are given a complete go by in the matter of imposition of tax and as soon as a notifi 970 cation under section 135(2) is shown to the court, the court is helpless in the matter, even though none of the provisions of section 131 to section 135(1) may have been complied with.
This in my opinion is the effect of section 135 (3), as it stands and there is no question of presuming that the proper authority would abuse that provision.
Irrespective of the abuse or otherwise of that provision.
, the effect thereof in my opinion is to wipe out all the procedural safeguards provided in section 131 to section 135(1) of the Act relating to imposition of tax and to make the tax a completely valid imposition so long as there is a notification under section 135(2).
On this interpretation of section 135(3) a serious question arises whether it is a provision which can be said to be intravires.
As I have already indicated, this is a case of delegation of power to impose tax in so far as its rate and incidence is concerned.
Generally speaking, I am of opinion that it is the duty of a legislature when imposing a tax to specify the rate at which the tax is imposed, for the rate of tax, again speaking generally, is one of the essentials of the taxing power given to the legislature.
But I cannot fail to recognise that there may be situations where the legislature may delegate to a subordinate authority the power to fix the rate under proper safeguards.
It is not necessary to specify all the situations where this can be done.
But there can be no doubt that in the matter of local taxation like taxation by municipal boards, district boards and bodies of that character there is pre eminently a case for delegating the fixation of the rate of tax to the local body, be it a municipal board or a district board or some other board of that kind.
The reason for this is that problems of different municipalities or districts may be different and one municipality may require one kind of tax at a particular rate at a particular time while another municipality may need another kind of tax at another rate at some other time.
Therefore, the legislature can in the case of taxation by local bodies delegate even the authority to fix the rate to the local body provided it has taken care to specify the safeguards in the form of procedural provisions or such other forms as it considers necessary in the matter of fixing the rate.
So far as I know practically all Municipal Acts provide safeguards of the nature contained in sections 131 to 135(1) of the Act or some other provisions which are equally effective in the matter of controlling the fixation of rate of tax by a delegate of the legislature.
In such a case where delegation of fixing the rate has been made by the legislature to a subordinate body with proper safeguards, it can ' not be said that the legislature has abdicated its essential functions in the matter of taxing legislation by delegating the rate 971 of taxation to be determined under proper safeguards by the delegate.
Nor can such delegation be struck down as a case of excessive delegation which means that the legislature has abdicated its essential legislative functions in the matter of the legislation concerned.
But there is ample authority for the view that where the legislature has abdicated its essential legislative functions and has made a delegation which may be called excessive such excessive delegation may be struck down.
I may in this.
connection refer to two decisions of this Court, namely, In re The Delhi Laws Act, 1912(1) and Rajnarain Singh vs The Chairman, Patna Administration Committee(2).
It has been held in these cases that an essential legislative function cannot be delegated ' by the legislature.
Exactly what constitutes essential function cannot be enunciated in general terms.
But the essential legislative function consists in the determination of the legislative policy and its formulation as a binding rule of conduct.
It cannot be said that an unlimited right of delegation is inherent in the legislative power itself.
This is not warranted by the provisions of the Constitution and the legitimacy of delegation depends entirely upon its being used as an ancillary measure which the legislature considers to be necessary for the purpose of exercising its legislative powers effectively and completely.
The legislature must retain in its own hands the essential legislative functions which consist in declaring the legislative policy and laying down the standard which is to be enacted into a rule of law and what can be delegated is the task of subordinate legislation which by its very nature is ancillary to the statute which delegates the power to make it.
Provided the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case.
In these two cases the question arose whether certain laws could be applied to certain areas with such modification as the executive authority deemed fit to make.
It was held that where three executive authority was permitted, at its discretion, to apply without modification (save incidental change, , such as name and place), the whole of any law already in existence in any part of India, that would be good.
Further the executive authority could even be authorised to select future laws in a similar way and to apply them to certain areas.
But where the authorisation was to repeal laws already in force in the area and either substitute other laws with or without modification, this was held (1) ; (2) ; 972 to be excessive delegation and ultra vires.
Further where the modification in a law to be applied did not affect any essential change in the law and alter its policy it could be modified to that extent and applied by the executive authority under delegated authority.
But where a modification affects a radical change in the policy of the law to be applied such an authority could not be delegated and would be ultra vires.
it is on the basis of these principles that I have to see whether section 135(3) can be upheld.
There is no doubt that the legislature delegated its power of imposing taxes, including the power to fix the rate, to the municipal board by section 128 with respect to taxes specified therein.
I have already said that generally speaking the fixation of rate of tax is one of the essential legislative functions but there may be situations where it may not be considered to be an essential legislative function and may be delegated by the legislature to subordinate authorities with proper safeguards.
I have also said that in the field of local taxation relating to municipal boards and district boards and similar other bodies there are reasons for delegating fixation of the rate to such bodies subject to proper safeguards.
This is exactly what has been done under the Act subject to the safeguards contained in sections 131 to 135(1).
if those safeguards are followed, the delegation in my opinion would be a proper delegation and could not be challenged as ultra vires on the ground of excessive delegation.
But if the legislature after laying down with great care safeguards as to the imposition of tax including its rate maker, a blanket provision like section 135 (3), which at one stroke does away with all those safeguards and this is what in my opinion section 135(3) has done in the present case the position that results after such provision is that there is delegation of even the essential function of fixing the rate to the subordinate authority with out any safeguard.
Such a delegation would in my opinion be excessive delegation and would be ultra vires.
The question then is whether in the present case I should save the delegation contained in section 128 read with the safeguards provided in section 131 to section 135(1) for the imposition of various taxes mentioned therein or uphold section 135(3) which in one sweep does away with all the safeguards.
In my opinion section 135(3) is severable and the legislature would have provided for various safeguards contained in section 131 to section 135(1) when it delegated the power to impose a tax including the fixation of rate to municipal boards.
It would therefore in my opinion be right to hold that sections 128 to 135(2) indicate proper delegation of the authority 973 of the legislature to impose taxes specified in section 128 and that it is sub section
(3) of section 135 which should be struck down because it is the only provision which makes the delegation excessive.
I would therefore hold that section 135(3) inasmuch as it makes the delegation contained in sections 128 to 135(2) excessive must be severed from the rest of the sections which are otherwise a proper exercise of delegation of legislative authority and should be struck down on the ground of excessive delegation.
I would therefore dismiss the appeal with costs and uphold the order of the High Court holding that the tax imposed by the appellant had not been validly imposed, though on a different ground.
ORDER BY COURT In accordance with the opinion of the majority the appeal is allowed.
No order as to costs.
| The appellant was a manufacturer of drugs, (including chloral hydrate) in Hyderabad.
In 1962, the State of Andhra Pradesh issued the Andhra Pradesh (Telangana Area).
Chloral Hydrate (Chloral) Rules with respect to manufacture, possession, sale import, export and transport of chloral hydrate under the Andhra Pradesh (Telangana Area) Intoxicating Drugs Act of 1333 Fasli, as amended by the Hyderabad Opium and Intoxicating Drugs (Amendment) Act of 1953.
The Rules provided that the manufacture of chloral hydrate shall be in accordance with the conditions of a licence granted by the Excise Commissioner on payment of the excise duty of Rs. 500 per annum.
The appellant refused to take licence and challenged the validity of the Rules by a writ petition, but the High Court dismissed the petition.
In appeal to this Court, the appellant contended that (i) the 1333 F Act had been repealed in toto by the introduction into the State of the Dangerous Drugs Act, 1930 and the Drugs Act 1940, and therefore.
, there was no power in the Hyderabad legislature to amend the 1333 F Act by the 1953 Act, and in consequence; there was no law in force on the basis of which the Rules could be promulgated in 1962; and (ii) even if the Act was not repealed, the Rules were not within the powers conferred by the 1333 F Act as amended in 1953, as chloral hydrate was not a narcotic or narcotic drug within the meaning of item 51, List II of the 7th Schedule to the Constitution.
HELD: The 1333 F Act continued in existence in so far as it dealt with collection of duties of excise on substances covered by it and it could therefore be amended by the 1953 Act.
[117 F] The 1333 F Act was in the nature of an excise Act and provided for licences and collection of duties of excise and made provisions incidental thereto.
It applied to the intoxicating drugs mentioned therein and other intoxicating drugs which might be notified by the Government.
The Act continued in force in Hyderabad after 26th January 1950.
In 1950, the Dangerous Drugs Act was applied by Parliament, to Hyderabad, by Central Act 33 of 1950.
This Act however.
is not an Act imposing duties of excise.
Consequently., it could not affect that part of the 1333 F Act which dealt with the grant of licences, and collection of duties of excise.
Further, as a result of section 39(1) of the Dangerous Drugs Act dealing 'With the saving of local and special laws and entry 51 of List II, the introduction of the Act in Hyderabad did not result in complete effacement of the 1333 F, Act.
It remained alive with respect to substances which might be notified as intoxicating drugs under the 1333 F Act.
If there was any such notification before 1950, that notification would be valid and the Act would apply to it.
If there was no such notification, the Act would remain on the statute book as a conditional statute under which a notification could be issued.
, [114 G H; 115 E F; 116 A C] 111 The Drugs Act was extended to Hyderabad by Central Act 3 of 1951.
This Act is mainly concerned with the standard and quality of drugs manufactured and therefore controls the manufacture, sale and distribution of drugs.
It has also nothing to do with duties of excise and with their imposition on narcotics and narcotic drugs.
Therefore, the fact that this.
Act was introduced into Hyderabad in 1951 would not affect in any way that part of the 1333 F Act which dealt with collection of excise duties and provided for licences in that connection, as such duties can be imposed only by the State legislature under item 51 of List II.
Hence, the 1333 F Act in so far as it deals with the collection of duties of excise on any drugs which are narcotics or narcotic drugs would remain alive to that extent.
[116 D G; 117 D F] (ii) Narcotic is a substance which in small doses relieves pain and produces sleep and since it was admitted by the appellant that chloral hydrate is hypnotic and sedative, it would be a narcotic within the meaning of entry 51 of List II.
The statement in the respondents ' affidavit that it did not contain narcotic or a narcotic drug was only made in reply to the appellants allegation that chloral hydrate was a medicinal preparation.
All that was intended by the State by using those words was that chloral hydrate did not contain any narcotic drug or narcotic is defined in the .
Chloral hydrate has also an intoxicating effect when mixed with liquor and so is an intoxicating drug within the meaning of the Amendment Act.
[119 A F] The 1333 F Act after the amendment of 1953 is also an excise Act and defines intoxicating drugs to mean inter alia any intoxicating and narcotic substance which the Government may by notification declare to be an intoxicating drug.
[118 A B] Since chloral hydrate is an intoxicating and narcotic substance it could be notified under the Amendment Act.
It would be liable to excise duty and therefore the Rules could be framed with respect to its control, and the appellant could be asked to take out a licence and pay excise duty on the manufacture thereof.
[118 D F]
|
ivil Appeal No. 3050 of 1989.
From the Judgment and Order dated 21.12.87 of the Orissa Administrative Tribunal in T.A. No. 161 of 1987.
P.P. Rao and C.S.S. Rao for the Appellant.
P.N. Misra and A.K. Panda for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
Leave granted.
This appeal is directed against the judgment of the Orissa Administrative Tribunal, Bhubaneswar dated 21.12.
1987 dismissing the appellant 's suit challenging his pre mature retirement from service.
The appellant, a qualified Electrical Engineer with training in West Germany, joined service of Orissa Govern ment as an Assistant Engineer (Electrical) in 1955.
In 1961 he was promoted to the rank of Executive Engineer (Electri cal) and deputed to the Orissa State Electricity Board.
In March, 1976 he was promoted to the post of Superintending Engineer (Electrical) on the basis of merit.
In 1979 while working on the post of Superintending Engineer (Electrical) he was allowed to cross the Efficiency Bar with effect from 1.1.1979.
He also officiated on the post of Chief Engineer (Electrical) in Orissa State Electricity Board.
Since he had completed 50 years of age a Review Committee constituted by the Government of Orissa considered his service record in October, 1983 for determining his suitability for retention in service in accordance with the first proviso to Rule 71(a) of the Orissa Service Code.
On the recommendation of the 806 Review Committee the State Government by its order dated 10.11.1983 pre maturely retired the appellant from service.
He filed a civil suit before the Subordinate Judge, Bhuba neswar challenging the validity of his pre mature retirement on a number of grounds.
On the Constitution of the Orissa Administrative Tribunal the suit was transferred to the Administrative Tribunal, Bhubaneswar, under Section 29 of the Administrative Tribunals Act.
The Tribunal by its order dated 21.12.1987 dismissed the suit and upheld the validity of appellant 's pre mature retirement.
Hence this appeal.
The Tribunal held that the Review Committee on an as sessment of the overall performance of the appellant 's conduct had bona fide made recommendations to the State Government that the appellant 's retention in service was not in public interest, and in pursuance thereof the State Government retired the appellant pre maturely.
The Tribunal further held that the order of pre mature retirement does not suffer from any legal infirmity.
Learned counsel for the appellant urged that the Tribunal committed serious error in upholding the order of pre mature retirement as the recom mendation of the Review Committee was vitiated as it was rounded on irrelevant and inadmissible material.
In this connection, he urged that the Review Committee had consid ered a number of adverse remarks contained in the appel lant 's service record for the remote past years which had no relevance and it had further considered adverse entries relating to the recent years although those adverse entries had not become final as the representations against those adverse entries had not been considered of by the State Government.
He urged that while considering overall perform ance of the appellant the Review Committee was influenced by the entries of remote past, which had lost their signifi cance as inspite of those entries the appellant had been promoted to higher post on merit and he had also been per mitted to cross Efficiency Bar.
Before we consider these submissions it would be pertinent to refer of the recommen dations of the Review Committee which are as under: "From the year 1969 70 to 1982 83, Shri Bai dyanath Mohapatra has got adverse remarks for the years 1969 70, 1970 71, 1972 73, 1975 76, 1976 77, 1981 82 and 1982 83.
Although he was an intelligent officer, he did not apply his mind and did not bestow adequate zeal in his work.
He did neither assume responsibility nor did he work hard for which the Chief Engineer had to deal with his Executive Engineers and Assistant Engineers directly.
He was found to be too cursory in dealing with the problems and adept in 807 putting the responsibilities for deficiencies on others.
His performance during most of the years was found to be of average standard.
The Committee, considering his overall perform ance, was of the view that his continuance in service is not desirable in public interest and that he be retired prematurely.
This officer would have retired on superannuation on 30.9.1989." No exception can be taken to the Government 's opinion in retiring the appellant pre maturely on the basis of the aforesaid recommendation of the Review Committee as it clearly indicated that the appellant 's retention in service was not in public interest.
The purpose of the Rule confer ring power on the Government to retire Government servants pre maturely is to energise its machinery by "chopping of the dead wood" as held by this Court in Union of India vs J.N. Sinha, [1971] 1 SCR 791.
The question which falls for consideration is whether the Review Committee was justified in making its recommendations on the basis of adverse en tries awarded to the appellant in remote past especially when the appellant had been promoted to the post of Superin tending Engineer in 1976 and he had further been permitted to cross Efficiency Bar in 1979.
The adverse entries relat ing to the years 1969 70, 1970 71, 1972 73 and 1975 76, had lost all significance, because inspite of those entries the appellant was considered to be an intelligent and efficient officer and in that view he was promoted to the post of Superintending Engineer.
If those entries did not reflect deficiency in appellant 's work and conduct for the purpose of promotion, it is difficult to comprehend as to how those adverse entries could be pressed into service for retiring him pre maturely.
When a Government servant is promoted to a higher post on the basis of merit and selection, adverse entries if any contained in his service record lose their significance and those remain on record as part of past history.
It would be unjust to curtail the service career of Government servant on the basis of those entries in the absence of any significant fall in his performance after his promotion.
The adverse entries for the years 1969 70, 1970 71, 1972 73 and 1975 76 were communicated in a lot to the appel lant in 1978, although under the instructions issued by the State Government the adverse entries must be communicated by December of each year.
The purpose of communicating adverse entries to the Government servant is to inform him regarding his deficiency in work and conduct and to afford him an opportunity to make, amend, and improvement in his work ,and further if the entries are not justified the communication 808 affords him an opportunity to make representation.
If the adverse remarks awarded to a Government servant are communi cated to him after several years, the object of communicat ing entries is defeated.
It is therefore imperative that the adverse entries awarded to a Government servant must be communicated to him within a reasonable period to afford him opportunity to improve his work and conduct and also to make representation in the event of the entry being unjustired.
In the instant case, adverse entries relating to a number of years were communicated to the appellant in one 101 under a letter dated 27.2.1978 contrary to the instructions issued by the State Government as contained in Circular No. 29 dated 19.2.1953.
Belated communication of the entries re sulted into denial of reasonable opportunity to the appel lant to improve his performance.
Further since adverse remarks for several years were communicated with inordinate delay it was impossible for the appellant to make an effec tive representation against the same.
The appellant 's repre sentation against the aforesaid entries was rejected on 12.3.1981 on the ground that the representation was barred by time.
Since the communication of the adverse entries was itself highly belated the representation against those adverse remarks should have been considered on merits and the same could not be rejected on the alleged ground of delay as the Government itself was guilty of inordinate delay in communicating the adverse remarks to the appellant.
Adverse remarks relating to the years 1981 82 and 1982 83 were taken into account by the Review Committee in formu lating its opinion against the appellant 's ,retention in service.
The appellant 's representation against those en tries had not been considered, yet the Review Committee placed reliance on those entries.
In fact, the adverse remarks for the year 1981 82 were communicated to the appel lant under the letter dated 21.6.1983 which was received by him on 5.7.1983, and as regards the adverse remarks for the 'year 1982 83 these were communicated to the appellant under the letter dated 29.7.1983 which was received by him on 9.8.1983.
He made representation to the Government against the aforesaid adverse remarks on 1.11.1983 but before the representation could be considered by the Government the impugned order of pre mature retirement was made on 10.11.1983.
These facts make it amply clear that the appel lant 's representation against the aforesaid adverse remarks for the years 1981 82 and 1982 83 was pending and the same had not been considered or disposed of on the date the impugned order was issued.
It is settled view that it is not permissible to pre maturely retire a Government servant on the basis of adverse entries, representations against 809 which are not considered and disposed of.
Brij Mohan Chopra vs State of Punjab, ; When this aspect was pressed before the Tribunal, it took a peculiar view in holding that since the representation had not been made before the date on which the Review Committee had considered the appellant 's case, the Committee need not have waited for the disposal of the appellant 's representation and it was free to take into account the adverse remarks awarded to the appellant in the years 1981 82 and 1982 83.
The appellant placed reliance on the decision of this Court in Brij Mohan Chopra 's case but the Tribunal by some in volved logic avoided giving effect to the law laid down by this Court.
It is not disputed that in the State of Orissa a Government servant has right to make representation within six months from the date of communication of the adverse remarks.
The appellant had right to make representation against the adverse entries within six months period, there fore, the adverse entries awarded to him in the years 1981 82 and 1982 83 could not be taken into account either by the Review Committee or by the State Government in forming the requisite opinion as contemplated by Rule 71(1)(a) of the Orissa Service Code, before the expiry of the period of six months.
Since the period prescribed for making representa tion against the adverse remarks for the years 1981 82 and 1982 83 had not expired, the proper course for the Review Committee should have been not to consider those entries or in the alternative, the Review Committee should have waited for the decision of the Government on the appellant 's repre sentation.
The view taken by the Tribunal is not sustainable in law.
There is a disturbing feature of this case which viti ates Tribunal 's order.
Shri Gian Chand, Chairman of the Tribunal, ex Chief Secretary of the State of Orissa, was member of the Review Committee which made recommendation against the appellant for his pre mature retirement, and in pursuance thereof the State Government had issued the im pugned order.
It appears that Sh.
Gian Chand, had later been appointed as Chairman of the Administrative Tribunal.
Shri Gian Chand, participated in the proceedings of the Tribunal, and he is party to the decision of the Tribunal.
These facts show that Mr. Gian Chand, who had administratively taken a decision against the appellant, considered the matter judi cially as a Chairman of the Tribunal, thereby he acted as a Judge of his own cause.
While it is true that there is no allegation of personal bias against Sh.
Gian Chand, he may have acted bona fide, nonetheless, the principles of natural justice, fair play, and judicial discipline required that he should have abstained from hearing the appellant 's case.
While considering the appellant 's case the Tri 810 bunal exercised judicial powers and it was required to act judicially, as the jurisdiction of the Civil Court and High Court have been excluded and vested in the Administrative Tribunal.
The Members of the Tribunal must follow rules of natural justice in administering justice like Judges, they should not sit in judgment on their own decisions.
Gian Chand was disqualified to hear the appellant 's case.
The order of the Tribunal is vitiated on this ground but as the appellant had not raised any objection before the Tribunal against the participation of Sh.
Gian Chand, we do not consider it necessary to grant relief to the appellant on this ground.
For the aforesaid reasons we hold that the order of pre mature retirement is vitiated and the Tribunal committed error in upholding the same.
We accordingly allow the ap peal, set aside the order of the Tribunal dated 21.12.1987 and also the order of the State Government dated 10.11.
The appellant is entitled to reinstatement with all consequential benefits of service in addition to the costs.
R.S.S. Appeal allowed.
| When the foreign vessel M.V. "Vali Pero" arrived at the port of Calcutta, 10 non Greek seamen on board that ship filed a suit in the admiralty jurisdiction of the Calcutta High Court for recovery of their dues.
During the trial, depositions of the defendants ' witnesses were recorded on commission.
Objection was raised on behalf of the plaintiffs to reception in evidence of these depositions on the ground of absence of witness ' signature of the deposition as re quired in Rule 4 of chapter XXII of the Calcutta High Court Rules, 1914, applicable to the Original Side.
The objection was upheld by the learned Single Judge as also by the Divi sion Bench.
The learned Single Judge then decreed the suit on the unrebutted evidence of the plaintiffs.
One Special Leave Petition has been filed against the judgment of Division Bench affirming the order of the learned Single Judge ex cluding the defendants ' evidence.
The other Special Leave Petition has been filed against the judgment of the learned Single Judge decreeing the plaintiff 's suit after excluding the defendants ' entire oral evidence.
On behalf of the ' appellants it was contended that omission of witness ' signature on the deposition recorded by the Commissioner did not invalidate the deposition atleast in a case like the present where the correctness and authen ticity of the deposition was undisputed; that in this sense the requirement of the witness ' signature on the deposition was not a mandatory requirement; that the defect was curable by obtaining the witness ' signature even now; that the respondents ' counsel had admitted the correctness of the depositions; and that the respondents had omitted to raise any objection will after the suit was closed for judgment.
In reply, the respondent relied on the reasons 188 given in the Division Bench 's judgment construing the re quirement in Rule 4 as mandatory.
It was also urged that the argument of curing the defect by obtaining signatures even now was not advanced in the High Court and should not be permitted at this stage.
Allowing the appeals and remanding the suit to the learned Single Judge to be decided afresh, this Court, HELD: (1) The requirement of witness ' signature on the deposition in Rule 4 is directory even though the require ment of the deposition being recorded, read over to him and corrected wherever necessary is mandatory.
Mere omission of the witness ' signature on the deposition does not render the deposition invalid when the correctness and authenticity thereof is undisputed.
[196F] (2) The essential requirement of Rule 4 is that the deposition of a witness examined on commission shall be taken down in writing, read over, and where necessary, translated to the witness in order that mistakes or omis sions, if any, may be rectified or supplied.
The mandate in Rule 4 to this extent must be complied strictly in order to ensure a correct record of the deposition.
[196B C] (3) The signature of the witness is not a part of the deposition and apart from acknowledging the correctness of his deposition on the deposition itself, it is not essential for any other purpose in this context.
[196D] (4) While the essential requirements of Rule 4 are no doubt mandatory requiring strict compliance, the requirement of witness ' signature therein is directory of which substan tial compliance is sufficient.
[196G] (5) There is substantial compliance of this directory requirement where the correctness and authenticity of the deposition is undisputed.
Compliance can be had of this requirement even by subsequent admission of correctness of the deposition by the witness, in case of dispute.
[196H; 197A] (6) Under the Code of Civil Procedure a deposition recorded in a Court, except that under Order 18, Rule 16 C.P.C., does not require the witness ' signature on the deposition.
The requirement of signature is not court 's assurance since the witness is not examined in court.
Ac cordingly, it cannot be said reasonably that the omission of witness ' 189 signature on the deposition renders the deposition incom plete.
[196E] (7) Rules of procedure are not by themselves an end but the means to achieve the ends of justice.
Rules of procedure are tools forged to achieve justice and are not hurdles to obstruct the pathway to justice.
[197B] (8) Construction of a rule of procedure which promotes justice and prevents its miscarriage by enabling the court to do justice in myriad situations, all of which cannot be envisaged, acting within .the limits of the permissible construction, must be preferred to that which is rigid and negatives the cause of justice.
Where the outcome and fair ness of the procedure adopted is not 'doubted and the essen tials of the prescribed procedure have been followed, there is no reason to discard the result simply because certain details which have not prejudicially affected the result have been inadvertently omitted in a particular case.
[197B C] (9) Ordinarily, the word 'shall ' used at several places in Rule 4 must be given the same meaning at all places.
However, it is also settled that this is not an invariable rule and even though the word 'shall ' is ordinarily mandato ry but in the context or if the intention is otherwise it may be construed to be merely directory.
In short, the construction ultimately depends on the provision itself keeping in view the intendment of the enactment and the context in which the word 'shall ' has been used.
[197H; 198A] Ganesh Prasad Sah Desari & Anr.
vs Lakshmi Narayan Gupta, ; ; Govindlal Chagganlal Patel vs The Agricultural Produce Market Committee, Godhra & Ors., ; , referred to.
|
minal Appeal No. 128 of 1966.
Appeal by special leave from the judgment and order dated December 23, 1965 of the Madhya Pradesh High Court (Indore Bench) in Criminal Revision No. 131 of 1964.
C. L. Sareen and R. L. Kohli, for the appellants.
I. N. Shroff, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This is an appeal, by special leave, in which the appellants challenge the propriety and correctness, of the order of the Madhya Pradesh High Court confirming their conviction, under section 120B, IPC, and section 9(a), of the Opium Act, 1878 (Act I of 1878) (hereinafter called the Act).
Appellants 2 and 3 are the sons of the first appellant, and the 4th appellant, since deceased, was his nephew.
189 On receiving information, that opium was being smuggled and secretly kept, in the house of the appellants, the Sub Inspector of Police, Station Malharganj, Indore, with a police party, raided their house, on September 19, 1960, and recovered a fairly large quantity of opium, of about 2 maunds, 14 seers and 14 chhatacks.
The appellants were arrested, and charge sheeted, for having committed offences, under section 120B, IPC., and section 9(a), of the Act.
They pleaded not guilty.
Their defence was that each of them was living separately, and they were not also in the house, when the opium was stated to have been recovered.
The deceased.
4th appellant, raised a plea that one Altaf had come, in the morning of September 19, 1960, at about 9 a.m., and told him that the police were after him, and that he wanted to throw a bundle.
which was, in his possession, in the house of the appellants.
Accordingly, Altaf threw a bundle, in the court yard of the house of the appellants.
The Additional City Magistrate, Indore, accepted the case of the prosecution, and rejected the plea of the appellants.
The trial Magistrate found that the opium was recovered, from the possession of the appellants, who had no permit or licence, for its possession or transportation, and he also found that the appellants, along with others, had conspired to possess the said opium.
On these findings, each of the appellants, was convicted, under sections 120B, IPC., and section 9(a), of the Act, and sentenced to undergo two years ' rigorous imprisonment, in respect of each of the offences, the sentences, to run concurrently.
The appellants challenged their conviction and sentence, before the First Additional Sessions Judge, Indore, in Criminal Appeal No. 118 of 1963.
The learned Sessions Judge, agreeing with the conclusions, arrived at by the trial Court, dismissed the appeal.
The appellants, again, moved the High Court of Madhya Pradesh, in Criminal Revision No. 131 of 1964, to set aside their conviction; but the High Court also, by its order, dated December 23, 1965, which is under attack, dismissed the revision.
On behalf of the appellants, Mr. C. L. Sarin, learned counsel raised three contentions : (1) that there is no evidence of any conspiracy, to attract section 120B, IPC; (2) neither the High Court, nor the two Subordinate Courts, have considered the vital question, viz., whether the evidence establishes that the four appellants were in conscious possession of the opium, recovered from the house; and (3) the trial, which was held, under section 251A, of the Code of Criminal Procedure, was vitiated, as it should have been properly held, only under section 252, Cr.
So far as the first two contentions are concerned, in our opinion, it is really an attack, on the concurrent findings, recorded 190 by the Magistrate, and, on appeal, by the Sessions Judge, and which have been accepted, 'by the High Court, in revision.
The Magistrate, as well as the learned Sessions Judge, have posed, one of the questions for consideration, as to whether the appellants can be considered to have been in conscious possession of the, opium, recovered from the house.
It is, in considering this question, that the plea of the appellants, that each of them was living separately in the house and that they were not present, at the time of tile recovery, and that it was.
possible, for some outsider, to have thrown the opium recovered, into the court yard of the house, have all been considered, in detail, and findings recorded.
against the appellants.
The chance of any outsider, having thrown this article in the court yard of the appellants ' house, has been eliminated.
The courtyard has been found to be a place where various domestic articles were kept, and has also been found to be a place, in frequent use, by the appellants.
Their presence, at the time of the recovery, has also been held to be ,established.
In view of all these, and other circumstances, to which it is unnecessary for us to refer, the finding has been recorded that the opium, found in the court yard of the house of the appellants, was in their conscious possession and that the appellants, along with others, had also conspired together, to obtain, deal in, and possession .
The further finding is that the presence of such a large quantity of opium could not ,have been possible, without each of them, taking the other, into confidence. 'These findings have been accepted, by the High Court, and we :are satisfied that there is no legal error, or infirmity, committed by any of the Courts, in arriving at that conclusion.
Therefore.
the two contentions, noted above, will have to be rejected.
That leaves us, for consideration, the third contention, noted above, that the trial, in this case ought to have been held, under, s.252, Cr.
P.C., and it is vitiated, as it has been held, under section 251A. Mr. Sarin, learned counsel for the appellants, urged that the officers, who are to investigate offences, and grant bail.
to persons arrested under the Opium Act, as well as the procedure, for trial, in respect of offences, under the Act, and other incidental matters, connected therewith, have been laid down in sections 20 to 20 1, introduced in the Act, by the Opium (Madhya Pradesh) Amendment Act, 1955 (M.P. Act XV of 1955).
Counsel urged that the officer, empowered to investigate ,offences, under section 20, be he an officer of the Department of Excise.
or a police officer, must be considered to be an excise officer; and though the report, made by such an officer, is treated, under section 20G, of the Act, as applied to Madhya Pradesh, as a report.
made by a police officer, under s.190 (1) (b), Cr.
P.C., it cannot be held to be a police report, within the meaning of section 251A, and hence, the trial should have been held, in this case, not under s.251 A, but under section 252, Cr.
P.C. Counsel referred us to the 191 decision, of the Madhya Pradesh High Court in Sardar Khan Multan Khan vs State(1), in this connection.
Counsel further stated that this question, regarding the illegality, of the trial held under section 251A, was raised, in the present proceedings, when the appellants had filed in the High Court, a criminal revision, challenging their conviction, by the two Subordinate Courts.
This question, was referred, by a learned Single Judge by his order dated August 3, 1965, to a Full Bench, for consideration.
The Full Bench, in its decision, reported as Ashiq Miyan vs State(2) has overruled the earlier decision, in Sardar Khan 's case(1).
The learned Judges, of the Full Bench, have rejected the contention of the appellants, that their trial was vitiated, by the fact that the procedure, prescribed by section 251A, Cr.
P.C., has been adopted.
The Full Bench has further held that section 251A, Cr.P.C., is attracted to a case, instituted under the Opium Act, on a report made by a police officer, and that it logically follows that the trial, of an accused, under the Opium Act, instituted on a report, made by an excise officer, would also be governed, by section 251A.
According to the appellants, this decision of the Full Bench, is erroneous.
and counsel wants the earlier decision of the Madhya Pradesh High Court, in Sardar Khan 's case(1), to be restored.
Mr. 1.
N. Shroff, learned counsel for the State_ pointed out ,that the case against the appellants was investigated, in accordance, with the provisions, contained in the Opium Act and was initiated, on a report, made by a police officer.
These facts have been noted, by the learned Judges of the Full Bench, and it is, on that basis, that ultimately, after a reference to the decision of this Court, in Amalshah vs The State of Madhya Pradesh(3), that the Full Bench has held that the trial is not vitiated.
It is not really necessary, for us, to consider the larger question, as to whether, when an excise officer makes a report, under section 20 G, of the Act, whether the trial, following it, in such a case, would be governed by section 251A.
In fact, the Full Bench has gone further, and expressed an opinion, on this point also, that even in such a case, the trial would be governed, by section 251A,Cr.
P.C. We express no opinion, on that aspect of the matter.
We will confine our decision, to the present case, on the basis that the crime was investigated, in accordance with the provisions, con tained in the Opium Act and the case was initiated against the appellants, on a report, made by a police officer.
The, first information report, Exhibit P 20, shows that the search of the appellants ' house was conducted, by the Sub Inspector of Police, Malharganj Police Station, and the recovery of opium, as well as the arrest of the appellants, were made, by the (1) A.I.R. 1963 M.P. 337.
(2) A.I.R. 1966 M.P. 1 (F.B.).
(3) Unreported decision, in Crl.
A. 201 of 1963, decided on II 1 2 1964.
192 said officer.
Investigation was also done, by him.
Ultimately, the report, which is styled as a 'complaint ', and dated October 23, 1960, was made and signed by Tehsildar Singh, Sub Inspector of Police, Malharganj Police Station, as the Investigating Officer.
It is on the basis of that report, that the Magistrate, in this case, conducted the trial of the appellants.
We have already referred to the Full Bench decision, of the Madhya Pradesh High Court, wherein these facts have been stated.
No doubt, counsel for the appellants has urged that, even under those circumstances, a trial, for an offence under the Opium Act, cannot 'be held, under section 251 A.
We are not inclined to accept, this contention of the, learned counsel.
More or less, a similar question arose, before the Constitution Bench of this Court, in Amalsh 's Case(1).
Similar contentions were also urged, and reliance was placed, on section 20 G, of the Act, as applied to Madhya Pradesh.
This Court, after referring to the material provisions of section 20 G, by its judgment, dated December 11, 1964, declined to express an opinion on the larger question, that the report, made by an excise officer, cannot be held to be a police report, so as to attract section 251 A, of the Code of Criminal Procedure.
In that decision, this Court actually found that the proceedings, against the appellant before them, commenced on the report, of a police officer, and not on the report, of an excise officer, and that the complaint, lodged before the Magistrate, had been signed by the police officer, who investigated the offence.
On these findings, this Court held that, inasmuch as the proceedings commenced, on a report made by a police officer, section 251 A, Cr.
P.C., in terms, would apply, and hence the trial held, under that section, in that case, was perfectly legal.
Therefore, it will be seen, that in respect of a trial, conducted by a Magistrate, on a report made by a police officer, under the Opium Act, as applicable to the State of Madhya Pradesh, for an offence under that Act, this Court held that section 251 A, Cr.P.C., applied.
In the case before us, on the facts, it is clear that the investigation was done by a police officer, the seizure of the articles and the arrest, of the accused, were effected, by a police officer, and the complaint or report, dated October 23, 1960, to the Magistrate, was made, by the Police Officer.
It is, on this report of the police officer, that the Magistrate acted further, and the trial also followed.
Under those circumstances, it is clear that section 251 A. Cr.
P.C., directly applies, and it was, in accordance with the procedure, indicated in that section, that the trial was held.
It follows, that there is no illegality, in the trial.
The result is that this appeal fails, and is dismissed.
Y.P. Appeal dismissed.
(1) Unreported decision in Crl.
A. 201 of 1963 decided on 11 12 1964.
| On receiving information, that opium was being smuggled and secretly kept in the house of the appellants, the Sub Inspector of Police with a police party raided their house, and recovered large quantity of opium from the courtyard of the house.
The Sub Inspector of Police made the report and the trial followed.
The appellants ' plea that they were living separately and that one A had thrown the bundle, was rejected by the courts below, and they were convicted under section 120B I.P.C. and section 9(a) of the Opium Act.
In the appeal to this Court, the appellants contended that the trial, which was held, under section 251A of the Code of Criminal Procedure, was vitiated, as it should have been properly held only under section 252 Cr.
P.C. HELD : There was no illegality in the trial.
In this case the investigation was done by a police officer.
the seizure ,of the articles and the report to the Magistrate was made by the Police Officer.
It was on this report of the police officer that the Magistrate acted further, and the trial also followed.
In respect of a trial conducted by a Magistrate on a report made by a police officer, under the Opium Act,as applicable to the State of Madhya Pradesh, for an offence under that Act, section 251A Cr.
P.C. is applicable.
[192 F H] Amalshah vs State of Madhya Pradesh, unreported decision, in Cr.
A. No. 201/63, dt.
11 12 64, followed.
|
Civil Appeal No. 158 of 1951.
Appeal from the judgment and decree dated 24th March, 1948, of the High Court of Punjab at Simla (Teja Singh and Khosla JJ.) in Regular First Appeal No. 133 of 1945 arising out of judgment and decree dated 25th November, 1944, of the Court of the Senior Subordinate Judge, Kangra, at Dharmsala in Suit No. 86 of 1,943.
Daryadatta Chawla for the appellant.
Gurbachan Singh (Jindra Lat, with him) for the respond ent. 1952.
May 16.
The Judgment of the Court was delivered by FAZL ALl J.
This is an appeal against the judgment and decree of the High Court of Punjab at Simla reversing the judgment and decree of the Senior Subordinate Judge of Kangra in a suit instituted by the appellant for a declara tion that he was the sole lawful heir of one Musammat Ram Piari, whom he alleged to be his wife, and as such was entitled to the properties left by her, and for possession of those properties.
The suit was instituted against 2 persons, namely, Parvin Kumari, who was alleged to be the daughter of the plaintiff by Ram Piari, and Shrimati Raj Kumari, who were respectively impleaded as defendants Nos. 1 and 2.
The case of the plaintiff as set out in the plaint was that he was married to Ram Piari, the daughter of an employ ee of Raj Kumari (defendant No. 2) about 22 years before the institution of the suit, that after marriage she lived with him at Hoshiarpur and gave birth to a daughter, Parvin Kumari (defendant No. 1), on the 4th March, 1929, and that Ram Piari died in 828 April, 1941, leaving both movable and immovable properties which she had acquired in her own name with the aid of his money and which had been taken possession of by Raj Kumari.
He further alleged that he was a Rajput by caste belonging to tehsil Garhshankar in the district of Hoshiarpur, and was governed by custom in matters of succession, and, according to that custom, he, as the husband of the deceased Ram Piari, was entitled to the movable and immovable properties left by her to the exclusion of Parvin Kumari, her daughter.
The suit was contested by both Parvin Kumari and Raj Kumari, and both of them denied that the appellant had been married to Ram Piari.
Their case was that the proper ties in suit were acquired by Raj Kumari with her own money for Ram Piari, that the latter had made a will bequeathing them to her daughter, Parvin Kumari, that the appellant was not governed by custom, and that in any event the alleged custom could not apply to the personal and self .
acquired property of Ram Piari, As regards 2 cars which were also included in the list of properties claimed in the plaint, the case of Raj Kumari was that they belonged to her and that the deceased was only a benamidar.
The trial court decreed the plaintiff 's suit with re spect to all the properties excepting the 2 cars which were held to belong to Raj Kumari.
The court held that Ram Piari was the legally married Wife of the appellant, that he was governed by customary law applicable to Rajputs of Hoshiar pur district in matters of succession, and that according to that customary law he was the preferential heir to the estate of Ram Piari.
The court further held that the will of Ram Piari was invalid as she had no power under the customary law to make a will.
Both the defendants appealed to the High Court against the judgment of the trial court, and the appeal was ulti mately allowed and the plaintiffs suit was dismissed.
The High Court held that though there 829 was evidence of long cohabitation of the plaintiff and Ram Piari giving rise to a presumption of marriage, yet that presumption had been completely rebutted and the proper conclusion to be arrived at on the evidence on record was that the plaintiff had not been able to prove that Ram Piari was his lawfully wedded wife.
As to custom, the findings of the High Court were as follows : (1) that the appellant belonged to an agricultural tribe of Hoshiarpur district and was therefore governed by the custom prevailing among the Rajputs of that district; (2) that there was no local or general custom allowing the plaintiff to succeed in preference to the daughter to the property left by Ram Piari which had been given to her by a stranger, namely, Raj Kumari, and (3) that the parties were governed by Hindu law under which Parvin Kumari being the daughter of Ram Piari was entitled to succeed to the properties left by the latter in preference to the plaintiff.
Against the decision of the High Court, the plaintiff has now preferred this appeal, after obtaining a certificate from the High Court under sections 109 and 110 of the Code of Civil Procedure.
The first question which arises in this appeal is wheth er the plaintiff has succeeded in proving that Ram Piari was his legally wedded wife.
The plaintiff was admittedly em ployed as a copyist in the District Judge 's court at Hoshi arpur and was living in that town.
His case was that he gained the acquaintance of Raj Kumari (defendant No. 2), a wealthy lady of Kangra district who owned a tea estate in tehsil Palampur and occasionally visited Hoshiarpur, and through her good offices was married to Ram Piari, who was the daughter of one Chandar Bit, an employee of Raj Kumari working in her tea estate.
After marriage, Ram Piari lived with the plaintiff at Hoshiarpur as his lawfully wedded wife, and a daughter, Parvin Kumari, (also called Usha Rani) was born to 830 them on the 4th March, 1929.
Raj Kumari had great attachment to wards Ram Piari and often used to pay visits to Hoshiar pur to meet her.
In the year 1934 35 (no date is mentioned in the plaint; but this year is mentioned in the plain tiff 's evidence), Raj Kumari took Ram Piari from the plain tiff 's house with belongings of every description on the pretext of taking her out for recreation.
Ram Piari did not like going round with Raj Kumari and though she wanted to come back to the plaintiff she had not the courage to diso bey Raj Kumari, and in fact Ram Piari and ' Raj Kumari in wardly hated one another during the last years of the for mer 's life.
In the year 1941, Ram Piari died at Mayo Hospi tal at Lahore, leaving the properties in dispute which had been acquired by her by good management with the plaintiff 's own money.
As against this version of the.
plaintiff, the case of Raj Kumari was that Ram Piari had been enticed away by a motor driver sometime in 1921, that she returned to Holta estate after about 11 years with Parvin Kumari who was then about 3 years old, and after her return both she and her daughter remained with her (Raj Kumari) till Ram Piari died in 1941.
Raj Kumari, being a widow, felt very lonely and so brought up Ram Piari as a companion and all the properties in dispute had been acquired by her with her own money for the benefit of Ram Piari Parvin Kumari had been educated and brought up at her expense, and it was entirely false that she and Ram Piari inwardly hated each other, the truth being that they liked and were attached to each other.
The evidence adduced by the plaintiff to prove that Ram Piari was his lawfully wedded wife consists partly of the evidence of a number of witnesses and partly of circumstan tial evidence.
The direct evidence of marriage is furnished by Babu Ram, P. W. 7, Anant Ram, P.W. 11, Babu, P.W. 12, and Asa Ram, P.W. 13.
Babu Ram claims to be the family priest and alleges to have officiated as priest at the time of the plaintiff 's marriage, Anant Ram and Asa Ram are 831 jaswal Rajputs residing in village Bham, which is near the plaintiff 's village, Ajnoha, and Babu is a barber.
These four persons have said that they accompanied the marriage party and that the marriage of the plaintiff with Ram Piari was celebrated in their presence.
The evidence of the other witnesses and the circumstantial evidence upon which reli ance has been placed by the plaintiff have been summarized by the learned Subordinate Judge in his judgment in these words : "P. W. 5 Mukhi Ram is a Municipal Commissioner at Hoshi arpur.
P.W. 4 Doctor Shadi Lal is a leading Medical Practi tioner of Hoshiarpur.
P.W. 9 Lala Sham Lal and P.W. 10 Lala Har Narain have been co employees with the plaintiff in the same office; though these persons (except P.W. 9) have no social relations with the plaintiff and his family, yet they have been seeing Ram Piari living with plaintiff as his wife.
She was proclaimed as such by the plaintiff and both of them were treated as husband and wife by the people of the Mohalla and by the brotherhood in the village of plain tiff.
Exhibits P 18 and P 19 show that defendant No. 2 has been addressing Ram Piari, care of plaintiff in 1932 and has been receiving correspondence, care of the plaintiff which shows that she approved of the plaintiff 's alliance with Ram Piari .
Paras Ram, a younger brother of Ram Piari, lived in the house of Gokal Chand and it is in evidence that he used to address the plaintiff as jija a common name for sister 's husband.
From 1930 to 1934 Paras Ram read in the D.A.V. High School at Hoshiarpur and Exhibits P.W. 6/1 to 6 are copies of entries in the registers of the school regard ing applications which were given by Gokal Chand, plaintiff, for admission of his ward Paras Ram, son of Chandar Bit who was described as his sala (wife 's brother).
P.W. 6 Lala Bishan Das, teacher, has filed these copies.
His sister 's house was adjacent to the house of the plaintiff and he had occasions to see Ram Piari living and being treated as wife by the plaintiff during those years.
" 108 832 Upon the evidence to which reference has been made, the trial court came.to the conclusion that Ram Piari was the legally married wife of the appellant.
The learned judges of the High Court however found the evidence of the 4 witnesses who claimed to have been present at the marriage of the plaintiff to be quite uncon vincing, and they pointed out that the case of the plaintiff being that his marriage had been performed with great pomp and show, it was surprising that the evidence relating to it should be confined to 4 persons one of whom appeared to be a hired witness ' and the other 3 were interested persons.
As to the evidence of the 4 persons who claim to have been present at the plaintiff 's marriage, we find ourselves in agreement with the view taken by the High Court.
The evidence of the other witnesses undoubtedly establishes the fact that for some years the plaintiff and Ram Piari lived together as husband and wife and were treated as such, that Paras Ram, brother of Ram Piari, addressed the plaintiff as jija (a common name for sister 's husband), and that the plaintiff acted as Paras Ram 's guardian when the latter was admitted to D.A.V. School and was described as his brother in law in some of the entries in the school register.
The learned Judges of the High Court considered that the evi dence of certain witnesses who deposed to some of the facts on which the lower court relied, did not strictly comply with the requirements of section 50 of the Indian Evidence Act,firstly because the witnesses had no special means of knowledge on the subject of relationship between the plain tiff and Ram Piari, and secondly because what section 50 made relevant was not mere opinion but opinion "expressed by conduct" of persons who as members of the family or other wise, had special means of knowledge.
It seems to us that the question as to how far the evidence of those particular witnesses is relevant under section 50 is academic, because it is well settled that continuous cohabitation for a number of years may raise the presumption of marriage.
In the present case, it seems clear that the plaintiff and Ram Piari 833 lived and were treated as husband and wife for a number of years, and, in the absence of any material pointing to the contrary conclusion a presumption might have been drawn that they were lawfully married.
But the presumption which may be drawn from long cohabitation is rebuttable, and if there are circumstances which weaken or destroy that presumption, the court cannot ignore them.
We agree with the learned Judges of the High Court that in the present case, such circumstances are not wanting, and their cumulative effect warrants the conclusion that the plaintiff has failed to prove the factum of his marriage with Ram Piari.
In the first place, the plaintiff has not examined any of his near relations such as his brother, or collaterals living in Ajnoha, or any co villagers, whose presence at the marriage would have been far more probable than the presence of the witnesses examined by him.
He has also not examined any of the witnesses residing in or round about Holta estate in spite of the fact that his own case is that the marriage was celebrated with great pomp and show.
was suggested in the courts below that since defendant No. 2 is an influen tial person, no local witnesses would be available to sup port the plaintiff 's case, but the High Court has very fully dealt with this aspect and pointed out firstly that Raj Kumari had litigation with a number of persons belonging to Palampur and such persons would not be under her influence, and secondly that no gold reason has been shown why Raj Kumari, who is alleged to have brought about the marriage between the plaintiff and Ram Hari, should take a completely hostile attitude towards him.
Then again, neither the parents nor any of the relations of Ram Piari have been examined to support the plaintiff.
On the other hand, Ram Hari 's own mother, Ganga, has deposed that the former was never married to the plaintiff, and the statement made by Ram Piari in her will, which is a very valuable piece of evidence, is to the same effect.
It is also in credible that in spite of the love which Ram Piari is said to have had for the plaintiff, she left him 834 and went away to live with Raj Kumari, and that during the long period when Ram Piari was away, the plaintiff should never have visited her or made enquiries about her and his alleged daughter, Parvin Kumari.
This is all the more strange, since it is stated by the plaintiff that Ram Piari continued to love him and that she and Raj Kumari inwardly hated each other.
Parvin Kumari says in her deposition that she had never seen her father and that when she reached the age of discretion she found herself living at Palampur.
The conduct of the plaintiff in showing such complete indiffer ence to his wife and daughter as is disclosed in his evi dence is most unnatural, and no less unnatural is his con duct in instituting a suit to deprive her of properties which had come into her hands not by reason of anything done by him but as a result of the generosity shown towards her by a stranger.
The plaintiff 's case that the properties in dispute were acquired by Ram Piari with the aid of his money is wholly untrue, and it has been rightly found by both the courts that they were acquired for her by Raj Kumari.
The plaintiff 's witnesses have tried to exaggerate his means to support his case, but the truth appears to be that he had hardly any means of his own beyond the somewhat meagre salary which he used to draw as a court typist.
Several of the witnesses including an Advocate and Ram Piari 's own mother have deposed that Ram Piari had eloped with a driver and had remained away from Holta estate for a number of years.
Even the Subordinate Judge has not reject ed the story of elopement, and though there is no reliable evidence as to when and how she met the plaintiff, the possibility of her having lived with him for some years even though they were not legally married, cannot be ruled out.
The plaintiff claims to be a Rajput of high caste, and it appears to us rather unusual that he should not marry in his own tribe but should take in marriage a Gurkha girl who was born of very poor parents and belonged to a place far away from where he himself lived.
835 The fact that Paras Ram lived with the plaintiff for some time and addressed the latter as jija, and that the plaintiff described himself as guardian and brother in law of Paras Ram, is as consistent with the defence version as with the plaintiff 'section If Paras Ram 's parents had been in affluent circumstances so as to be able to maintain and educate him, the case would have been different, but there is evidence to show that Chandar Bir was very poor and both his wife and daughter had to work as servants of Raj Kumari to earn their living.
In our opinion, the conclusion arrived at by the High Court has not been shown by the plaintiff to be incorrect, and whatever the true facts may be, we are compelled to hold that in the present state of evidence the plaintiff has not succeeded in establishing that Ram Piari was his legally wedded wife.
In the view we have taken, it is not necessary to deal with the question whether succession to the properties in dispute will be governed by customary law or by Hindu law, but since it was argued before us at very great length, we think that we might state the contentions of the parties and the difficulties which in our opinion arise in dealing with those contentions on the material before us.
Before doing so, however, we wish to set out briefly certain gener al principles which we think should be kept in view in dealing with questions of customary law.
They may be summa rized as follows : (1) It should be recognized that many of the agricul tural tribes in the Punjab are governed by a variety of customs, which depart from the ordinary rules of Hindu and Muhammadan law, in regard to inheritance and other matters mentioned in section 5 of ' the .
(2) In spite of the above fact, there is no presumption that a particular person or class of persons is governed by custom, and a party who is alleged to be governed by custom ary law must prove that he is so governed and must also prove the existence of the 836 custom set up by him.
See Daya Ram vs Sohel Singh and Others (1), Abdul Hussein Khan vs Bibi Song Dero C).
(3) A custom, in order to be binding, must derive its force from the fact that by long usage it has obtained the force of law, but the English rule that "a custom, in order that it may be legal and binding, must have been used so long that the memory of man runneth not to the contrary" should not be strictly applied to Indian conditions.
All that is necessary to prove is that the usage has been acted upon in practice for such a long period and with such invar iability as to show that it has, by common consent, been submitted to as the established governing rule of a particu lar locality.
See Mr. Subhani vs Nawab(3).
(4) A custom may be proved by general evidence as to its existence by members of the tribe or family who would natu rally be cognizant of its existence and its exercise without controversy, and such evidence may be safely acted on when it is supported by a public record of custom such as the Riwaj i am or Manual of Customary Law.
See Abroad Khan vs Mt. Channi Bibi(4).
(5) No statutory presumption attaches to the contents of a Riwaj i am or similar compilation, but being a public record prepared by a public officer in the discharge of his duties under Government rules, the statements to be found therein in support of custom are admissible to prove facts recited therein and will generally be regarded as a strong piece of evidence of the custom.
The entries in the Riwaj i am may however be proved to be incorrect, and the quantum of evidence required for the purpose of rebutting them will vary with the circumstances of each case.
The presumption of correctness attaching to a Riwaj i am may be rebutted, if it is shown that it affects adversely the rights of females or any other class of persons who had no opportunity of appearing before the revenue authorities.
See Beg vs Allah Ditta (5), Saleh (1) 110 P.R. (1906) 390 at 410 (4) A.I.R. 1925 P.C. 267 at 271.
(2) LR.
45 I.A. 10.
(5) A.I.R. 1916 P.C. 129 at 131.
(3) A.I.R. 1941 P.C. 21 at 32.
837 Mohammad vs Zawar Hussain(1);Mt.
Subhani vs Nawab(2).
(6) When the question of custom applicable to an agri culturist is raised, it is open *to a party who denies the application of custom to show that the person who claims to be governed by it has completely and permanently drifted away from agriculture and agricultural associations and settled for good in urban life and adopted trade, service, etc., as his principal occupation and means and source of livelihood, and does not follow other customs applicable to agriculturists.
See Muhammad Hayat Khan vs Sandhe Khan and Others(3), Muzaffar Muhammad vs Imam Din(4).
(7) The opinions expressed by the compiler of a Riwaj i am or Settlement Officer as a result of his intimate knowledge and investigation of the subject, are entitled to weight which will vary with the circumstances of each case.
The only safe rule to be laid down with regard to the weight to be attached to the compiler 's remarks is that if they represent his personal opinion or bias and detract from the record of long standing custom, they will not be sufficient to displace the custom, but if they are the result of his inquiry and investigation as to the scope of the applicabil ity of the custom and any special sense in which the expo nents of the custom expressed themselves in regard to it, such remarks should be given due weight.
See Narain Singh vs Mt. Basant Kaur(5), Mt. Chinto vs Thelur (6); Khedam Hussain vs Mohammad Hussain(7).
Bearing these principles in mind, the difficulty which appears to us to beset the case of the plaintiff may be briefly stated as follows : The basis of the plaintiff 's case is that the custom by which he claims to be governed is a "zamindara custom" and he is governed by it by reason of his belonging to a family of agriculturists.
From the evidence, however, it appears that he Had sold most, if not (1)A.I.R.1944 P.C.18.
(5) A.I.R. 1935 Lab.
419 at 421, 422.
(2) A.I.R. 1941 P.C. 21 at 25.
(6) A.I.R. 1985 Lah.
(5)55 P.R. (1906) 270 at 274.
(7) A.I.R. 1941 Lah.
73 at 79 (4) I.L.R. , 125.
838 all, of his property in the village to which he belonged, that his ancestors were bankers or sahukars, that his father was a clerk of a lawyer practising in Hoshiarpur district and that he himself was a clerk in the District Judge 's court at Hoshiarpur and lived there, and there is hardly any evidence to show that any of his relations was dependent on agriculture or that he maintained connection with them.
In our opinion.
the witnesses of the plaintiff have tried to grossly exaggerate his pecuniary means and have not given a correct picture on which the answer to the question as to whether he would still be governed by the old custom would depend.
Again, though according to the answer to question 11 in the Riwaj i am of Hoshiarpur district, the general custom governing the Rajputs of that district would seem to be that a marriage within the tribe only is lawful, the plaintiff did not marry a Rajput of his district but is said to have married a Gurkha woman, about whose caste and char acter the evidence is conflicting, and whose family was admittedly not governed by the "Riwaj iam" upon which the plaintiff relies.
If both the husband and the wife are shown to belong to the same tribe and to be governed by the same custom, then the difficulty in deciding what would be the rule of succession on the death of the wife in regard to the wife 's self acquired property may not be very great.
But even if it be assumed that Ram Piari was lawfully married to the plaintiff, the serious question to be decided would be whether succession to the property which Ram Piari received as gift from a stranger and which she owned in her own right, would be governed by the custom governing her hus band 's family and not her own.
Such marriage as is said to have been contracted by the plaintiff being evidently an event of rare occurrence, the rule of succession set up by him cannot be said to derive its force from long usage.
As we have pointed out, a custom in order to be binding must derive its force from the fact that by long usage it has obtained the force of law; and if an Occasion never arose to apply the rule of succession 839 invoked by the plaintiff, to the property held by a wife in her own right, the foundation on which custom grows would be wanting.
When the matter is further probed, it appears that the plaintiff relies not only on custom but partly on custom 'and partly on the rule of Hindu law, namely, that the law which governs the husband will govern the wife also.
Whether the latter rule can be extended to a case like the present is a question of some difficulty, on which, as at present advised, we would reserve our opinion.
In the cir cumstances.
we prefer to leave the issue of custom undecid ed.
and base our decision on the sole ground, which by itself is sufficient to conclude the appeal, that the plain tiff 's marriage with Ram Piari has not been clearly estab lished.
The appeal therefore fails and it is dismissed.
but in the circumstances of the case and particularly since the appellant has appealed in forma pauperis, we direct that the parties will bear their own costs in all the courts.
Appeal dismissed.
| One S was employed by the appellant as a secretary and one of the terms of employment was that the appointment may be terminated on one month 's notice on either side.
The appel lant was thoroughly dissatisfied with the work of S and dis approved of her conduct in joining the union.
Purporting to act under the contract, the appellant terminated the services of S and gave her one month 's pay in lieu of notice.
No enquiry was held by the appellant before terminating the services of section The industrial tribunal held that the termination of services amounted to a dismissal for misconduct and since no enquiry was held it was illegal and unjustified and it passed an order for the reinstatement of section The appellant contended that as the termination was strictly in accordance with the terms of the contract it could not be challenged before an industrial tribunal, that even if no enquiry was held the order of discharge was justified as the evidence led before the tribunal established the misconduct of S and that at the highest it was a case for awarding compensation and not for reinstatement: Held, that the discharge amounted to punishment for alleged misconduct and was unjustified in the absence of a proper enquiry.
Even where the discharge was in exercise of the power under the contract it was competent for the tribunal to enquire whether the discharge had been effected in the bona fide exercise of that power.
If the tribunal found that the purported exercise of the power was in fact the result of the misconduct alleged then it would be justified in dealing with the dispute on the basis that the order of discharge was in effect an order of dismissal.
Western India Automobile Association vs Industrial Tribunal, Bombay, , followed.
458 Held, further, that in the circumstances of the present case compensation and not reinstatement was the appropriate relief that should have been awarded.
The normal rule was that in cases of wrongful dismissal the dismissed employee was entitled to reinstatement but there could be cases where it would not be expedient to follow the normal rule.
In the present case the appellant 's office was a small one and S occupied a position of some confidence.
The appellant was dissatisfied with the work of S and had lost confidence in her.
In such a case it would not be fair either to the employer or the employee to direct reinstatement.
|
Appeal No, 147 of 1953, 1355 Appeal by Special Leave from the Judgment and Order dated the 24th day of August 1951 of the High Court of Judicature at Bombay in Appeal No. 50 of 1951 arising out of the Order dated the 19th day of June 1951 of the said Court exercising Original Jurisdiction in Misc.
No. 143 of 1951.
M. C. Setalvad, Attorney General.for India (Porus A. Mehta and P. G. Gokhale, with him), for the appellant.
J. B. Dadachanji, M. V. Jayakar and Rajinder Narain for respondent No. 2. 1955.
March 4.
The Judgment of Vivian Bose, Venkatarama Ayyar and Sinha JJ.
was delivered by Sinha J. Jagannadhadas J. delivered a separate judgment.
SINHA J. This is an appeal by special leave from the order of the High Court of Judicature at Bombay dated the 24th August 1951 upholding that of a single Judge of that court sitting on the Original Side, dismissing the appellant 's petition under article 226 of the Constitution for a writ of certiorari quashing the order dated the 23rd January 1951 passed by the 1st respondent, the Authority under the (hereinafter referred to as the Act).
The facts leading up to this appeal may shortly be stated as follows: The 2nd respondent is and has been at all material times an employee of the Central Railway (formerly called the G.I.P. Rly.) represented by the appellant who has been nominated by the Railway Administration as responsible for payment of wages under section 3 of the Act.
Ever since 1941, the 2nd respondent has been employed by the Railway Administration as a carpenter on daily wages, and has been treated as a daily rated casual labourer and has been paid his wages at the rate of Rs. 3 4 0 per day.
He continued receiving his wages at that rate until October,, 1949 without any demur, and granting receipts for the wages thus received.
On the 2nd December, 1949 an application was made by one K. N. Pitkar " an official of Registered Trade Union, a person 1356 permitted by the Authority" under sub section (2) of section 15 of the , against the G.I.P. Ry.
administration through its Divisional Engineer, Parel, Bombay.
It was alleged on behalf of the 2nd respondent that his wages due in respect of six months from May to October 1949 amounting to Rs. 245 had not been paid or had been subjected to illegal deductions as shown in the schedule.
The schedule will be set out hereinafter.
A claim for Rs. 245 plus Rs. 15 by way of compensation was made.
The appellant, as the opposite party before the Authority, resisted the claim, inter alia, on the grounds (1) that Rs. 245 had not been illegally deducted from the wages of the 2nd respondent; and (2) that the claim of the 2nd respondent who was employed as a daily rated casual labourer on specified daily wages, to be placed on a permanent cadre on the scale of monthly rates of pay was unfounded.
It was further alleged that the 2nd respondent did not come within the purview of the Railway Services (Revision of Pay) Rules as he was a daily rated casual labourer charged to works and that no rules had been laid down governing the rates of pay and the conditions of service of daily rated casual laborers like the 2nd respondent.
Hence his terms of service were the daily wages paid to him all along.
It was thus contended that there had been no deduction from his wages.
In this connection reference was made to the award of the Railway Workers Classification Tribunal, dated the 28th May 1948.
The Authority by its orders dated the 23rd January 1951 decided that the position of the 2nd respondent was not that of a casual labourer but that of a "temporary employee" and that therefore he was entitled to be on the scale of Rs. 55 150 plus the allowances admissible.
In coming to this conclusion the Authority observed that the work done by the 2nd respondent is of the same nature as that of a member of the permanent staff.
Hence the 2nd respondent could not be called a casual labourer.
It also made reference to 1357 article 39 (d) of the Constitution containing the direction that there should be equal pay for equal work.
The Authority also negatived the contention raised on behalf of the appellant that the question of classification of an employee was outside its jurisdiction.
In pursuance of the said order the Authority allowed the 2nd respondent 's application by its further orders dated the 2nd March 1951.
Against the said orders of the Authority the appellant moved the High Court of Judicature at Bombay by an application under article 226 of the Constitution for quashing the aforesaid orders.
The matter was heard in the first instance by a learned single Judge of that court who by his orders dated the 19th June 1951 dismissed the application.
The appellant preferred an appeal under the Letters Patent which was heard by a Division Bench of that court.
The Division Bench by its order dated the 24th August 1951 dismissed the appeal and agreed with the conclusions of the Judge on the Original Side that the Authority had not acted without jurisdiction or had not exceeded its jurisdiction in entertaining the 2nd respondent 's application.
On the appellant 's application for leave to appeal to this court being rejected by the High Court, the appellant moved this court and obtained special leave to appeal on the 2nd February 1953.
The main controversy between the parties in this court is whether, having regard to the relevant provisions of the Act, the 1st respondent was competent to pass the orders it did, which orders had been upheld by the High Court of Bombay.
The Authority set up under section 15 of the statute in question is undisputably a tribunal of limited jurisdiction.
Its power to hear and determine disputes must necessarily be found in the provisions of the Act.
Such a tribunal, it is undoubted,, cannot determine any controversy which is not within the ambit of those provisions.
On examining the relevant provisions of the Act it will be noticed that it aims at regulating the payment of wages to certain classes of persons employed in industry.
It applies 1358 in the first instance to the payment of wages to persons employed in any factory or employed by a railway administration; but the State Government has the power after giving three months notice to extend the provisions of the Act or any of them to the payment of wages to any class of persons employed in any class or group of industrial establishments.
"Wages" means "all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable. . to a person employed in respect of his employment or of work done in such employment. " (omitting words not necessary for our present purpose).
Section 3 lays down that every employer or his re presentative or nominee shall be responsible for the payment to persons employed by him of all wages Section 's provides for fixation of "wage periods ' which shall not exceed one month in any case.
Section 5 indicates the last date within which, with reference to the particular wage period, wages shall be paid.
Section 7 lays down that the wages of an em ployed person shall be paid to him without deductions of any kind except those authorized by or under the Act.
Section 7(2) in clauses (a) to (k) specifies the heads under which deductions from wages may be made, namely, fines; deductions for absence from duty; deductions for damage to or loss of goods of the employer; deductions for house accommodation supplied by the employer; deductions for amenities and services supplied by the employer; deductions for recovery of advances or for adjustment of overpayments of wages; deductions of income tax payable by the employee; deductions to be made under orders of a court or other competent authority; deductions for subscriptions to, and for repayment of advances from any provident fund; deductions for payments to cooperative societies, etc.; and finally, deductions made with the concurrence of the employed person in furtherance of certain schemes approved by Government.
No other deductions are permissible.
It is also laid 1359 down that every payment made by the employed person to the employer or his 'agent shall be deemed to be deduction from wages.
Each of the several heads of deductions aforesaid is dealt with in detail in sections 8 to 13.
Section 8 lays down the conditions and limits subject to which fines may be imposed and the procedure for imposing such fines.
It also requires a register of such fines to be maintained by the person responsible for the payment of wages.
Section 9 deals with deductions on account of absence from duty and prescribes the limits and the proportion thereof to wages.
Section 10 similarly deals with deductions for damage or loss to the employer and the procedure for determining the same.
Like section 8, this section also requires a register of such deductions and realizations to be maintained by the person responsible for the payment of wages.
Section 11 lays down the limits of deductions for house accommodation and other amenities or services which may have been accepted by the employee, subject to such conditions as the State Government may impose.
Section 12 lays down the conditions subject to which deductions for recovery of advances may be made from wages.
Finally section 13 provides that the deductions for payment to co operative societies and insurance schemes shall be subject to such conditions as the State Government may prescribe.
Section 14 makes provision for the appointment of Inspectors for carrying out the purpose of the Act, with power to enter on any premises and to examine any registers or documents relating to the calculation or payment of wages and to take evidence on the spot.
His function is to see that the registers or documents prescribed by the Act containing the necessary entries as regards deductions and other matters have been properly kept by the employers or their agents in order to be able to ascertain whether any deductions from wages in excess of the provisions of sections 7 to 13 aforesaid have been made.
We then come to section 15 which makes provision for the appointment of the Authority "to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of 174 1360 the wages of persons employed or paid in that area".
Where the Authority finds that any deduction has been made from the wages of an employed person or the payment of any wages had been delayed, he may at the instance of the wage earner himself or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under the Act or any other person acting with the permission of the Authority, after making such enquiry as he thinks fit and after giving an opportunity to the person responsible for the payment of wages under section 3 to show cause, direct the refund to the employed person of the amount deducted or the payment of delayed wages together with such compensation as he may determine.
The section also lays down the limits and conditions of his power to direct payment of compensation to the employed person or of penalty to the employer, if he is satisfied that the application made on behalf of an employee was either malicious or vexatious.
His determination is final subject to a very limited right of appeal under section 17.
Section 18 vests the Authority with all the powers of a civil court under the Code of Civil Procedure, for the purpose of taking evidence, of enforcing the attendance of witnesses and of compelling the production of documents.
Section 22 lays down that no court shall entertain any suit in respect of wages or of deduction from wages in so far as the claim forms the subject matter of a pending proceeding under the Act or has formed the subject of a direction in favour of or against the plaintiff under section 15, or which could have been recovered by the application under that section.
Section 26 empowers the State Government to make rules to regulate the procedure to be followed by the authorities and courts referred to in sections 15 and 17 and provides that rules may be made inter alia, requiring the maintenance of records, registers, returns and notices necessary under the Act and the display in a conspicuous place of notices specifying the rates of wages payable to persons employed on such premises; and prescribing the authority for making a list of 1361 acts and omissions in respect of which fines may be imposed and the procedure for imposing such fines.
We have set out above in some detail the relevant provisions of the Act in order to point out that those provisions are not applicable to the complaint made in the present case.
In this connection it is necessary to set out in extenso the "particulars of claim" in the schedule appended to his application which are as follows: "The applicant is working as a carpenter mason with the opposite party under I.O.W., Byculla.
According to the orders on introduction of the prescribed scales, the Railway Administration has to make the staff working under I.O.W. on permanent monthly wages scheme under the rules of the prescribed scales.
The applicant along with others was up till now under daily wages scheme.
About 20 posts under I.O.W. where the applicant is working were to be made per manent.
The opposite party in supersession of claim of the applicant has confirmed his juniors on the permanent scales as a skilled workman in the scale of 55 3 85 4 125 5 130, whereas the opposite party continued to pay the applicant on daily wages scheme thus depriving him of his legitimate wages under the prescribed scale, which resulted in the monetary loss to the applicant of Rs. 40 13 4 per month.
Notice on behalf of the applicant was served on this count on the opposite party but of no avail and hence this application.
The juniors have been paid under the prescribed scales from April, 1949, from which date the applicant was also entitled to the prescribed scale 55 130 (scale for skilled workman).".
There is no allegation of delay in payment of wages inasmuch as it is not the respondent 's case that his wages were not paid within the time limit laid down in section 5; nor are there allegations to show that any payments have been made by the employed person to the employer or his agent which could be deemed to be a deduction from his wages within the meaning of section 7.
None of the categories of deductions as laid down in section 7 have been referred to.
In other words, it is not alleged that his Wages 1362 were so much and that so much had been deducted under any of the heads set out under section 7(2).
The allegations made by the respondent only amount to saying that he had been paid his actual wages as fixed by the railway administration but that after the introduction of the scheme of upgrading of persons employed under the daily wages scheme, others who were junior to him had been placed on the monthly wages scheme whereas his claim to be so placed had been ignored.
The respondent 's main grievance, therefore, appears to be that he had not been paid wages on the scale to which he would have been entitled if he had been placed on the monthly wages scheme.
In our opinion, the scheme of the Act as set forth above shows that if an employee were to state that his wages were, say Rs. 100 per month and that Rs. 10 had been wrongly deducted by authority responsible for the payment of wages that is to say, that the deductions could not come under any one of the categories laid down in section 7 (2), that a would be a straight case within the purview of the Act and the authority appointed under section 15 could entertain the dispute.
But it is said on behalf of the respondent that the authority has the jurisdiction not only to make directions contemplated by sub section (3) of section 15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were.
There is no difficulty in accepting that proposition.
If the parties entered into the contract of service, say by correspondence and the contract is to be determined with reference to the letters that passed between them, it may be open to the authority to decide the controversy and find out what the terms of the contract with reference to those letters were.
But if an employee were to say that his wages were Rs. 100 per month which he actually received as and when they fell due but that he would be entitled to higher wages if his claims to be placed on the higher wages scheme had been recognized and given effect to, 1363 that would not in our opinion, be a matter within the ambit of his jurisdiction.
The authority has the jurisdiction to decide what actually the terms of the contract between the parties were, that is to say, to determine the actual wages; but the authority has no jurisdiction to determine the question of potential wages.
The respondent 's complaint in the present case comes within the latter illustration.
If the respondent 's claim to be placed on the scheme of higher wages had been.
unduly passed over by the appellant, if indeed he had the power to do so, the obvious remedy of the respondent was to approach the higher authorities of the railway administration by way of departmental appeal or revision; but instead of doing that, he has sought his redress by making his claim before the authority under the Act.
The question is, has the authority the power to direct the appellant or his superior officers who may have been responsible for the classification, to revise the classification so as to upgrade him from the category of a daily wageearner to that of an employee on the monthly wages scheme.
If the respondent had been on the cadre of monthly wages and if the appellant had withheld his rise in wages to which he was automatically entitled, without any orders of his superior officers, be might justly have claimed the redress of his grievance from the authority under the Act, as it would have amounted to an underpayment.
But in the present case, on the case as made on behalf of the respondent, orders of the superior officers were necessary to upgrade him from a daily wage earner to a higher care.
The authority under the Act has not been empowered under section 15 to make any such direction to those superior officers.
The appellant is responsible to pay the respondent only such wages as are shown in the relevant register of wages presumably maintained by the department under the provisions of the Act, but he cannot be directed to pay the respondent higher wages on the determination by the authority that he should have been placed on the monthly wages scheme.
In that view of the matter it is not necessary to go 1364 into the merits of the controversy as to what classification as adumbrated by the Railway Workers ' Classification Tribunal, and adopted by the Railway administration, the second respondent should have been brought under.
If that question were open to determination by the Authority, we would have had to remit the case to the Authority to give a fresh opportunity to the parties to adduce all the relevant evidence and then to come to its final conclusions, as it appeared to us during the hearing of the case that all relevant information had not been placed before the Authority.
But, as, in our opinion, that is not a matter within its limited jurisdiction, that contingency does not arise.
For the reasons given above we allow this appeal, quash the orders of the Authority and of the High Court, but in the special circumstances of this case we make no order as to costs.
JAGANNADHADAS J. I regret that I find myself unable to agree.
The second respondent before us, employed as a carpenter in the Railway since 1941, has been working as a daily rated casual labourer.
He claimed that he should have been absorbed as a monthly rated permanent employee and that he has been wrongly superseded.
His claim to be treated as a permanent employee was apparently not accepted by the Tribu nal (the Authority under section 15 of the for Bombay).
But it was held that the position of the applicant is not that of a daily rated casual labourer but that of a monthly rated temporary employee.
His claim was treated and upheld by the Tribunal as one substantially based on the ground that the Award of the Railway Workers ' Classification Tribunal in relation to the recommendations of the Central Pay Commission was approved by the Railway Board and directed to be implemented, and that by virtue thereof he was no longer a mere casual labourer but was entitled to higher wages on the footing of a monthly rated labourer.
No question arises that the order of the Tribunal is bad owing to the 1365 variation between the claim made and the relief granted.
As held by the High Court, pleadings in these cases have to be liberally construed.
That his claim was understood as having been based on the Award of Railway Workers ' Classification Tribunal, by the Railway Authorities themselves, is clear from the statement filed on their behalf in answer to the J. employee 's claim.
Apart from the question of jurisdiction, the defence was two fold.
(1) The applicant being a daily rated casual labourer, charged to works, the directive of the Railway Board did not apply to him.
(2) Even if it applied to a person in the situation of the applicant, he was not entitled to be brought on to the monthly rates of pay in the skilled grade, without his previously passing a trade test to establish himself as skilled in his trade and he did not pass the test.
The Tribunal.
on the material referred to by it in its order, came to the conclusion (1) that the applicant did not fall within the category of workcharged staff, (2) that under the Award of the Railway Workers ' Classification Tribunal, no trade test was necessary for the applicant who was a carpenter, and (3) that as per certain instructions of the concerned authority, the period of casual labour was to be limited to six months, and that since this applicant was admittedly a casual labourer under the Railway for a much larger period, i.e. since 1941, he became entitled to be treated as a temporary employee and not as a casual labourer and to receive wages as such.
Whether these conclusions are right or wrong is not the question before us.
The only question is whether or not the Tribunal had the jurisdiction to find that the applicant was entitled to the emoluments of a monthly rated temporary employee and not to that of a daily rated casual labourer, as the result of the order of the Railway Board directing implementation of the Award of the Classification Tribunal.
The jurisdiction of the Tribunal arises under section 15 of the (Act IV of 1936) (hereinafter referred to as the Act).
The Tribunal is set up to decide "all claims arising out of deductions from the wages or delay in payment of 1366 wages".
The relief which it is authorised to award,is to direct "the refund of the amount deducted, or the payment of the wages delayed".
Such a direction made by the Tribunal is final, under section 17 of the Act, subject to the right of appeal provided therein.
Under section 22, no suit lies in any court for the recovery of wages or of any deduction therefrom which could have been recovered by an application under section 15.
However limited this jurisdiction of the Tribunal, and however elaborate the provisions in the Act for the preparation and display by the employer of the table of wages payable to the employees, and for the inspection thereof by the Factory Inspectors, it cannot be supposed that the jurisdiction of the Tribunal is only to enforce the wages so displayed or otherwise admitted.
Such a narrow construction would rob the machinery of the Act of a great deal of its utility and would confine its application to cases which are not likely to arise often, in a wellordered administration like the Railways.
Indeed, I do not gather that such a construction was pressed for, before us, in the arguments.
Even a Tribunal of limited jurisdiction, like the one under consideration, must necessarily have the jurisdiction to decide, for itself, the preliminary facts on which the claim or dispute before it depends.
In the instant case, it must have jurisdiction to decide what the wages payable are and, for that purpose, what the contract of employment and the terms thereof are.
The judgment of my learned brothers in this case apparently recognizes the jurisdiction of the Tribunal as above stated, when it said that the Tribunal has the power "to find out what the terms of the contract were to determine what the wages of the employed person were".
Whether the Tribunal 's decision in this behalf is conclusive or not is a matter that does not arise for decision in this case.
But, it is said that the Tribunal has no authority to determine the question of "potential wages".
Undoubtedly a claim to a higher potential wage cannot be brought in under the category of "claim arising out of deduction from the wages or delay in pay 1367 ment of the wages" if that wage depended on the determination by a superior departmental or other authority as to whether or not a particular employee is entitled to the higher wage a determination which involves the exercise of administrative judgment or discretion or certification, and which would, in such a situation., be a condition of the payability of the wage.
But where the higher wage does not depend upon such determination but depends on the applica tion of, and giving effect to, certain rules and orders which, for this purpose, must be deemed to be incorporated in the contract of employment, such a wage is, in my view, not a prospective wage, merely because the paying authority concerned makes default or commits error in working out the application of the rules.
In this context it is relevant to notice that the definition of "wages" in the Act is "all remuneration which would if the terms of the contract, express or implied, were fulfilled, be payable".
The word "were" in this definition which I have underlined, seems to indicate that even a "prospective wage" which would be payable on the proper application of the rules in the sense which I have explained above may well fall within its scope.
he wage under the Act is not, necessarily, the immediately pre existing wage but the presently payable wage.
In the case before us, the order of the Tribunal proceeded on the view that the applicant was presently entitled to be treated as a monthly rated temporary employee and not as a daily rated casual labourer, by virtue of the directions of the Railway Board for the implementation of the scheme of classification and that therefore he was entitled to the appropriate higher wage.
We have not been shown any material to indicate that this higher classification of the applicant depended not on the mere application, of the classification scheme and the rules thereunder, to him but upon any determination by a departmental higher authority.
If it was the latter, undoubtedly the Tribunal cannot claim to sit in judgment over that determination, whether it was right or wrong.
Such 175 1368 determination, if wrong, could be corrected only by a further departmental appeal, if any, available.
But the Tribunal had, to my mind, the authority to find whether the applicant 's case falls within the scope of determination by the departmental authority or is one of mere application of the rules to the facts of this case.
If the decision of the Tribunal in this behalf was wrong, the appropriate remedy for the Railway Authority was by way of an appeal under section 17 of the Act.
Since the finding of the Tribunal in this case involved the case of as many as six persons and the net additional amount ordered was a sum of Rs. 1,341, its finding was appealable under section 17 of the Act.
Whether or not an employee was entitled to wages of a higher category than what he was till then drawing would depend entirely on the scope of the rules with reference to which he is entitled to become one in the higher category and it cannot be assumed a priori that such a claim is a claim to "prospective wages".
In my view, therefore, there is no sufficient reason to reverse the judgment of the learned Judges of the Bombay High Court and this appeal should be dismissed with costs.
BY THE COURT.
In accordance with the decision of the majority, the appeal is allowed and the orders of the Authority and of the High Court are quashed.
There will be no order as to costs throughout.
Appeal allowed.
| The respondent joined the Jammu and Kashmir University in 1963 as lecturer on contract basis.
He was later promoted as professor.
His appointment as professor was also on contract basis and by agreement he was bound by the statutes and regulations from time to time in force in the University.
While extending his period of probation as Professor the Central Council of the University resolved that the respondent be charge sheeted for certain alleged misconduct.
An Enquiry was held under the Jammu and Kashmir University Act, 1965 and at report was submitted holding the respondent guilty.
On the day the enquiry officer submitted the report, the Jammu and Kashmir University Ordinance 1969 was promulgated.
Section 52 of the Ordinance provided that teachers employed on contract basis "unless otherwise ordered by the Chancellor after consulting the Pro Chancellor shall cease to hold such posts or to discharge such duties after 60 days from the commencement of this Ordinance or the Act, as the case may be." No such order was issued by the Chancellor extending the respondents employment on the expiration of the period.
Or, the other hand.
the Vice Chancellor.
allowed him to function as Professor and his probation was again extended for a year by the Vice Chancellor under section 13(4) of the Ordinance (which had already been replaced on November 16, 1969 by the Jammu and Kashmir University Act, 1969).
The Vice Chancellor also directed the release of the salary of the respondent and requested him to serve on the academic council as an ex official member.
Based on the enquiry report the Vice Chancellor issued a show cause notice to which the respondent submitted his explanation.
The University Council decided to terminate the services of the respondent.
In a writ petition filed by the respondent the High Court directed reinstatement.
The High Court took the view that the facts and circumstances of the, case clearly enabled the spelling out of a fresh appointment of the respondent as Professor by an emplied contract.
The High Court was also of the opinion that the enquiry directed under the 1965 Act lapsed when the 1969 Ordinance came into force and could not furnish the basis for punitive action against the respondent and therefore the order of dismissal based on the report of the Enquiry Officer was bad in law.
HELD : that the High Court 's order of reinstatement.
had to be quashed.
While the respondent had no right to continue in the University the termination of his services was invalid.
(i)Under the 1969 Ordinance and the subsequent Act which replaced it the only body competent to appoint a professor, like the respondent, is the University Council and even the Council shall make such appointments only on the recommendation of the Selection Committee created by section 36.
There is no case that.
the Selection Committee even considered or recommended the respondent for appointment and there is no suggestion that the University Council appointed the respondent as professor.
it follows that the only statutory body 170 empowered in this behalf has not appointed the respondent to the post claimed by him.
Therefore the continuance of the respondent on the expiration of the statutory two months ' period cannot be legitimated by law.
The circumstance that the respondent functioned in the University does not vest in him the legal status of a validly appointed employee with all the protection that the, Act and the relevant statutes give to such a person.
Thus no case of statutory ter mination is called for, the basis of statutory employment being absent.
[175F] When a statute creates a body and vests it with authority and circumscribes the powers by specifying limitation.
the doctrine of implied engagement le hors the provisions and powers under the Act would be subversive of the statutory scheme regarding appointment of officers and cannot be countenanced by the Court.
If a Vice Chancellor by administrative drift allows such employment it cannot be validated by any theory of factum valet.
[176E] (ii)When there was no provision in the 1969 Act which would continue or validate the enquiry commenced against the respondent by the Jammu and Kashmir University created by the 1965 Act.
the Enquiry report falls to the ground vis a vis the respondent.
The fact that he responded to a show cause notice cannot clothe the enquiry with legality and the report is impermissible material to injure the respondent with a punitive termination.
The respondent would be considerably damnified in his standing and reputation by the order of the University.
The termination of his service therefore has to be declared illegal.
[176G]
|
Criminal Appeal No. 464 of 1986.
From the Judgment and Order dated 7.6.1986 of the Alla habad High Court in Crl.
Case No. 1320 of 1986.
Anil Kumar Gupta for the Appellant.
U.R. Lalit, K.B. Rohtagi and S.K. Dhingra for the Respond ents.
The following Order of the Court was delivered.
Special leave granted.
This appeal is directed against the order of the High Court of Allahabad, Lucknow Bench, dated 7th June 1986, granting bail to respondent No. 1, Ishtiaq Hasan Khan.
We allowed the appeal and set aside the order of the High Court and issued directions that respondent No. 1, Ishtiaq Hasan Khan be taken into custody forthwith.
In that order we had directed that the reasons will follow.
Hence this order articulating our reasons.
Ishtiaq Hasan Khan, respondent No. 1 and three others, namely, Naseem, Shiva Kant Sharma and Asghar are facing trial for the murder of Zaheer Hasan Khan at about 9.00 a.m. on March 3, 1985, in a public place in Mahmood Nagar leather market.
After the occurrence respondent No. 1 absconded and he surrendered in court on April 22, 1985.
He applied for bail before the Sessions Judge, Lucknow, which was rejected.
He approached the Lucknow Bench of the 37 High Court of Allahabad with an application for grant of bail.
The application was opposed by the complainant and as well as by the Public Prosecutor.
Justice Kamleshwar Nath by his order dated September 18, 1985 refused to enlarge the respondent on bail and rejected the bail application.
After a lapse of two months ' time respondent No. 1, Ishtiaq Hasan Khan filed another bail application before the High Court.
That application was placed before Justice Kamleshwar Nath who rejected the same by his order dated January 21, 1986.
Within a few days thereafter respondent No. 1 made another application before Justice P. Dayal.
The learned Judge having regard to the judicial discipline and prevailing practice in the High Court, directed that the bail applica tion be placed before Justice Kamleshwar Nath who had passed orders rejecting earlier applications for bail.
In pursuance of that order the bail application was placed before Justice Kamleshwar Nath.
Meanwhile, respondent No. 1 made two futile attempts before the trial court for the grant of bail even though his application for bail was pending before the High Court.
On March 18, 1986 Justice Kamleshwar Nath was sitting in a Division Bench and the respondent 's counsel appeared before him seeking his permission for listing the bail application before him.
The learned Judge passed an order releasing the bail application, but it appears that inspite of that order the bail application was not listed before any other Judge, instead it again came up for orders before Justice Kamleshwar Nath on March 24, 1986.
On that date counsel for the respondent No. 1 for some unknown reasons did not press the bail application, on his request the application was dismissed as withdrawn.
Meanwhile, one of the accused Shiva Kant Sharma filed an application for transfer of the trial from the court of the First Additional Sessions Judge to any other court.
The complainant had also filed an application in the High Court for the cancellation of bail granted to Shiva Kant Sharma.
Respondent No. 1 also made an application from jail for the transfer of the case.
All the three miscellaneous cases were heard by D .N.
Jha, J.
By a composite order dated 10.12.
1985, Justice D.N. Jha refused to transfer the case and he further refused to cancel the bail granted to Shiva Kant Sharma.
The learned Judge, however, made observations that the trial should be concluded expeditiously and if necessary the court should hold day to day trial to conclude the same at an early date.
In pursuance to the order of Justice D.N. Jha, the First Additional Sessions Judge fixed several dates for the trial of the case but the accused persons obtained adjournments on one pretext or the other with the result the trial could not be commenced or completed within three months as desired by Justice D.N. Jha.
Mean 38 while, the respondent No. 1 made another application on June 3, 1986 before Justice D.S. Bajpai Vacation Judge for grant of bail.
The learned Judge directed that the application be placed before Justice Kamleshwar Nath who was sitting as a Vacation Judge with effect from 23rd June, 1986.
Two days later, another application was made on behalf of respondent No. 1 before Justice D.S. Bajpai for recalling his order dated June 3, 1986, the application was directed to be placed before the Court on June 6, 1986.
On June 6, 1986 when the application was taken up the Assistant Government Advocate appearing for the prosecution and the complainant 's advocate both appeared and filed their appearance.
Justice D.S. Bajpai directed the application to be listed on June 7, 1986.
On that date the complainant 's counsel filed applica tion raising objections against the heating of the bail application on a number of grounds and he further sought three days time to file detailed counter affidavit in reply to the allegations made in bail application.
Justice D.S. Bajpai, did not grant time.
Instead he heard the arguments, he recalled his order dated June 3, 1986 for placing the matter before Kamleshwar Nath and enlarged the respondent No. 1 on bail.
Aggrieved, Shahzad Hasan Khan the complain ant, who is the son of the deceased Zaheer Hasan Khan, has approached this court by means of this appeal.
Normally this court does not interfere with bail matters and the orders of the High Court are generally accepted to be final relating to grant or rejection of bail.
In this case, however, there are some disturbing features which have persuaded us to interfere with the order of the High Court.
The matrix of facts detailed above would show that three successive bail applications made on behalf of respondent No. 1 had been rejected and disposed of finally by Justice Kamleshwar Nath.
In that view it would have been appropriate and desirable and also in keeping with the prevailing prac tice in the High Court that the bail application which was filed in June 1986 should have been placed before Justice Kamleshwar Nath for disposal.
In fact on June 3, 1986.
Justice D.S. Bajpai being conscious of this practice and judicial discipline himself passed order directing the bail application to be placed before Justice Kamleshwar Nath but subsequently on 7th June 1986 he recalled his order.
We are of the opinion that Justice D.S. Bajpai should not have recalled his order dated June 3, 1986 keeping in view the judicial discipline and the prevailing practice in the High Court.
Justice D.S. Bajpai was persuaded to the view that Justice Kamleshwar Nath had passed orders on March 18, 1986, releasing the bail application, the matter was therefore not tied up to him.
However, the learned Judge failed to notice that when the bail application was listed 39 before Justice Kamleshwar Nath on March 24, 1986 the re spondent No. 1, for reasons known to him only, withdrew his application, as a result of which Justice Kamleshwar Nath dismissed the same as withdrawn.
This fact was eloquent enough to indicate that respondent No. 1 was keen that the bail application should not be placed before Justice Kam leshwar Nath.
Long standing convention and judicial disci pline required that respondent 's bail application should have been placed before Justice Kamleshwar Nath who had passed earlier orders, who was available as Vacation Judge.
The convention that subsequent bail application should be placed before the same Judge who may have passed earlier orders has its roots in principle.
It prevents abuse of process of court in as much as an impression is not created that a litigant is shunning or selecting a court depending on whether the court is to his liking or not, and is encour aged to file successive applications without any new factor having cropped up If successive bail applications on the same subject are permitted to be disposed of by different judges there would be conflicting orders and a litigant would be pestering every judge till he gets an order to his liking resulting in the creditability of the court and the confidence of the other side being put in issue and there would be wastage of courts ' time.
Judicial discipline re quires that such matter must be placed before the same judge, if he is available for orders.
Since Justice Kamlesh war Nath was sitting in Court on June 23, 1986 the respond ent 's bail application should have been placed before him for orders.
Justice D.S. Bajpai should have respected his own order dated June 3, 1986 and that order ought not to have been recalled, without the confidence of the parties in the judicial process being rudely shaken.
As regards merits, for granting the bail, the learned Judge appears to be influenced by two factors, firstly, he observed that the trial could not be commenced or completed as directed by Justice D .N.
Jha by his order dated 10th December, 1985.
In this respect the complainant has filed a detailed affidavit giving the details of the proceedings before the trial court.
On a perusal of the same it is evident that the accused persons obtained adjournment after adjournment on one pretext or the other and they did not allow the court to proceed with the trial.
On June 7, 1986 complainant 's counsel had filed a written application seek ing three days, time to file counter affidavit giving the details of the proceedings pending before the trial court.
We are constrained to observe that Justice D.S. Bajpai refused to grant the prayer and proceeded to grant bail simply on the ground that the liberty of a citizen was involved which is the case in every criminal case more particularly in a murder case where a citizen who let alone losing 40 liberty has lost his very life.
Another ground for granting bail was that trial was delayed therefore the accused was entitled to bail.
This also cannot be helped if a litigant is encouraged to make half a dozen applications on the same point without any new factor having arisen after the first was rejected.
Had the learned Judge granted time to the complainant for filing counter affidavit, correct facts would have been placed before the Court and it could have been pointed out that apart from the inherent danger of tampering with or intimidating witnesses and aborting case, there was also the danger to the life of the main witnesses or to the life of the accused being endangered as experience of life has shown to the members of the profession and the judiciary, and in that event, the learned Judge would have been in a better position to ascertain facts to act judi ciously.
No doubt liberty of a citizen meat be zealously safeguarded by court, nonetheless when a person is accused of a serious offence like murder and his successive bail applications are rejected on merit there being prima facie material, the prosecution is entitled to place correct facts before the court.
Liberty is to be secured through process of law, which is administered keeping in mind the interest of the accused, the near and dear of the victim who lost his life and who feel helpless and believe that there is no justice in the world as also the collective interest of the community so that parties do not lose faith in the institu tion and indulge in private retribution.
Learned Judge was unduly influenced by the concept of liberty, disregarding the facts of the case.
The learned judge also failed to consider the question that there were serious allegations of tampering of evidence on behalf of the accused persons.
Vishram and Jagdish, two eye witnesses had filed written applications before the trial court making serious allegations against Masod and Masroof, brothers of respondent No. 1.
They alleged that they had been kidnapped and their signatures and thumb impressions had been obtained on some blank papers and they were being threatened with dire consequences and they re quested the court for being granted police protection.
One of the salutory principles in granting bail is that the court should be satisfied that the accused being enlarged on bail will not be in a position to tamper with the evidence.
When allegations of tampering of evidence are made, it is the duty of the court to satisfy itself whether those alle gations have basis (they can seldom be proved by concrete evidence) and if the allegations are not found to be con cocted it would not be a proper exercise of jurisdiction in enlarging the accused on bail.
In the instant case there were serious allegations but the learned Judge did not either consider or test the same.
41 Having regard to the facts and circumstances of this case we are of the opinion that the learned judge committed serious error in recalling his order dated June 3, 1986 and enlarging the respondent on bail.
The occurrence took place, in the broad day light, in a busy market place and there are a number of eye witnesses to support the case against the respondent who was named as an assailant in the First Infor mation Report.
Immediately after the occurrence be could not be traced (it was alleged that he had absconded for more than a month, attempts were made on his behalf to tamper with evidence.
In view of these facts and circumstances the respondent No. 1 was not entitled to bail if the seriousness of the matter was realised and a judicious, approach was made.
We had accordingly set aside the order of the High Court and directed that respondent No. 1, Ishtiaq Hasan Khan shall be taken into custody forthwith and the trial shall proceed in accordance with law expeditiously.
N.P.V. Appeal allowed.
| Under a deed of partnership dated 12.11.1958, a firm by the name M/s. Chhotalal Vedilal came into existence with Chhotalal Mohanlal (the assessee), Gunvantilal Chhotalal and Pravinchandra Vedilal, as partners, each having 7 annas, 4 annas and 5 annas share respectively in the firm.
This position continued until on 9.11.1961 when a change took place in the constitution of the firm.
Under the new deed, Pravinchandra Vedilal retired.
One Ramniklal Chhotalal became a partner with 4 annas share.
The share of the asses see, Chhotalal Mohanlal was reduced.
For the remaining 4 annas, two minor sons of the assessee were admitted to the benefits only of the firm.
In the assessment year 1963 64, the Gift Tax Officer concluded that the assessee had deprived himself of 19% share In the profits and had gifted away 19% share in the goodwill of the firm in favour of his two minor sons.
He valued the .goodwill and treated 19% thereof as taxable gift.
In the appeal before the Appellate Assistant Commission er the assessee took the stand that the gift was not of a share of the goodwill but in respect of the right to receive future profits.
He valued that right and since the amount was higher than what the Income Tax Officer has estimated, he enhanced the quantum.
In further appeal by the assessee the Tribunal held that in the circumstances of the case there could be no gift of goodwill and found that the right to receive future profits could not be subject matter of a gift as the transfer did not relate to existing property and the situation did not give rise to any gift which could be made liable to tax under the Act.
In the Reference the High Court upheld the view of the Tribunal.
1043 In the appeal to this Court on behalf of the Revenue, it was contended that the order of the Gift Tax Officer was right and the Appellate Assistant Commissioner, the Tribunal and the High Court had gone wrong in holding that the ar rangement under the deed of 9.11.1961 did not give rise to a taxable event under the Act.
Allowing the appeal, HELD: 1.
Goodwill of a firm is an asset.
[1045E] Khushal Khemgar Shah & Ors.
vs Khorshed Banu Dadiba Boatwalla & Anr., ; , followed.
Once goodwill is taken to be property and with the admission of the two minors to the benefits of partnership in respect of a fixed share, the right to the money value of the goodwill stands transferred, the transaction does con stitute a gift under the Gift Tax Act, 1958.
[1046F] 3.
Since there has been no dispute about valuation of the goodwill as made by the Gift Tax Officer, with the conclusion that there has been a gift in respect of a part of the goodwill the transfer of the benefit of the partner ship constitutes a gift under the Act.
[1046F G] Commissioner of Gift Tax vs Nani Gopal Mondal, ; M.K. Kuppuraj vs Commissioner of Gift Tax, ; Sirehmal Nawalkha vs Commissioner of Income Tax, and Commissioner of Gift Tax, Bombay vs Premji Trikamji Jobanputra, , approved.
|
Appeal No. 686 of 1976.
(Appeal by Special leave from the Judgment and Order dated 13 2 1976 of,the Punjab and Haryana High Court in R.S.A. No. 249 of 1976).
P.P. Juneja, for the appellants.
S.K. Mehta, K.R. Nagaraja and P.N. Puri, for respondent No. 1 The Judgment of the Court was delivered by CHANDRACHUD, J.
(1) One Mula executed a registered gift deed in favour of appellant No. 13, Bhagwati Devi, on December 3, 1964.
On April 29, 1965, appellants 1 to '12 claiming to be potential reversioners filed Suit No. 143 of 1965 against the donor and the donee for a declaration that under the Punjab Custom (Power to Contest) Act, 1920, the gift deed was not binding on them.
The suit was decreed by the trial court on May 31, 1966 and that decree was con firmed in appeal on October 16, 1967.
(2) In between, on July 10, 1966 Mula adopted the re spondent.
On March 11, 1970, appellant No. 13 executed in favour of appellants 1 to 12 a lease in respect of the property which was the subject matter of the. gift.
Mula died on August 28, 1971.
(3) On December 13, 1971 respondent filed the present suit against the appellants for possession of certain properties including the property which Mula had gifted to appellant No. 13.
The suit was decreed by the trial court on January 29, 1971 and the decree was confirmed in appeal by the District Court and the High Court.
(4) On June 3, 1976 appellants filed a special leave petition in this Court challenging the High Court judgment.
They raised, inter alia, a new contention (ground No. B) that in decreeing the suit, the courts below had overlooked the relevant provisions of the Punjab Customs (Power to Contest).
Amendment Act of 1973, by virtue of which the legality of the gift made by Mula in favour of Bhagwati Devi could not be contested.
On June 11, 1976 this Court granted special leave to the appellants limited to the aforesaid Ground (B) of the special leave petition.
(5) We have heard an interesting argument from Mr. Juneja, who appears on behalf of the appellants, as regards the true construction and effect of the Punjab Customs (Power to Contest) Act, 1920, as amended in 1973, but we are of the opinion that the argument lacks basis and cannot, therefore, be accepted.
The contention, sought to be raised for the first time by the learned counsel, is founded on the assumption that by reason of the Amendment Act of 1973, the gift deed executed by Mula cannot be challenged by the respondent.
The assumption on which the argument is founded is fallacious, because the respondent does not seek by his plaint, as indeed he need not have sought, to chal lenge the gift deed executed by Mula in favour of Bhagwati Devi.
That gift was challenged by appellants 1 367 to 12 in Suit No. 143 of 1965, and they succeeded in obtain ing a declaration in that suit that the gift was not binding on the reversioners.
That decree became final, with the result that as on August 28, 1971, when Mula died, the property which he had sought to gift away to Bhagwati Devi, was free from the encumbrance of the purported gift.
By the present suit, the respondent merely asks for possession of the property in respect of which Mula had executed the deed of gift.
The basis on which he has asked for that relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree passed in Suit No. 143 of 1965.
It seems to us plain that he has not and he need not have contested the validity of the gift deed since that question was decided finally in the aforesaid suit.
(6) Section 7 of the Punjab Custom .(Power to Con test) Act, 1920 provided initially that no person shall contest any alienation of non ancestral immovable property on the ground that such alienation is contrary to custom.
This section was amended by section 3 of the Punjab Custom (Power to Contest) Amendment Act, 12 of 1973, as a result of which no challenge could be made to the alienation of any immovable property, whether ancestral or non ancestral, on the ground that it is contrary to custom.
It is, therefore, true that if it became necessary after the Amending Act of 1973 to contest the gift executed by Mula in favour of Bhagwati Devi, section 7 of the Act of 1920 would operate as a bar to such a contest.
However, as we have stated earlier, it was not necessary for the respondent, in view of the decree passed in suit No. 143 of 1965, to contest the valid ity of the gift.
(7) The decision of this Court in Giani Ram vs Ramji Lal(1) may, with advantage be referred to on this point.
Under the customary law of the Punjab, the wife and daugh ters of a holder of ancestral property could not sue to obtain a declaration that the allegation of ancestral property will not bind the reversioners after the death of the alienor.
But the reversioner who was entitled to chal lenge that alienation could obtain a declaratory decree that the alienation will not bind the reversioners after the alienor 's death.
It was held by this Court that such a declaratory decree had the effect of restoring the property alienated to the estate of the alienor and therefore all persons, including the wife and the daughters of the de ceased, were entitled to the benefit of that restoration.
Since the property alienated had reverted to the estate of the alienor at the point of his death, the widow and daugh ters, who also became heirs along with the sons under the were held entitled to obtain possession of the ancestral property.
Mr. Juneja attempted to get over the effect of this decision by invoking the provisions of section 8 of the Punjab Limitation (Custom) Act, 1 of 1920, which provides that when a person obtains a decree declaring that an alienation of ancestral immovable property is not binding on him, according to.
custom, the decree shall enure for the benefit of all persons entitled to impeach the alienation.
Counsel argues that since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot ensure for his benefit.
The short answer (1) ; 9 436 SCI/77 368 to this contention is that the decree would ensure for the benefit of all persons who are enitled to a share in the property of the deceased as it existed at the moment of his death.
Since Mula 's property stood freed from the encum brance of the gift at the moment of his death, respondent as the adopted son would be entitled to the possession of the gifted property.
(8) Another facet of the same question can be seen in Chand Singh vs Ind Kaur.(1) A learned Single JUdge of the Punjab and Haryana High Court held therein that though a suit to contest, under the customary law, an alienation of immovable property may not lie after the coming into force of the Amending Act of 1973, a declaratory decree already obtained by a reversioner would continue to be operative as the Amending Act does not render such a decree a nullity.
(9) There is thus no substance in the contention raised by the appellants and their appeal must fail.
Appellants 1 to 12 shall pay the respondent 's 'costs of the appeal.
S.R. Appeal dismissed.
| section 7 of the Punjab Customs (Power to Contest) Act, 1920 provided that no person shall contest any alienation of non ancestral immovable property on the ground that such alienation is contrary to custom.
section 3 of the Amendment Act 12 of 1973 amended section 7 with the .result that no challenge could be made to the alienation of any immovable property, whether ancestral or non ancestral, on the ground that it is contrary to custom.
A gift deed was executed by one Mula, in favour of appellant No. 13 Bhagwati Deyi, on December 3, 1964.
Appel lants 1 to 12 claiming to be potential reversioners obtained a decree on May 31, 1966 in a suit flied against the donor and the donee for a declaration that under the Punjab Cus toms (Power to Contest) Act Z of 1920 the gift deed was not binding on them and that decree was confirmed in appeal on October 16, 1967.
On July 10, 1966, Mula adopted the re spondent.
On March 11, 1970 appellant No. 13 executed in favour of appellants 1 to 12,, a lease in respect of the property which was the subject matter of the gift.
Mula died on August 23, 1971.
On December 13, 1971, respondent filed a suit for possession of certain properties including the property which Mula had gifted to appellant No. 13.
The suit was decreed on January 20, 1971 and that decree was confirmed in appeal by the District Court and the High Court.
In appeal by special leave.
, the appellants contended (i) In decreeing the suit the Courts below had over looked the relevant provisions of the Punjab Customs (Power to Contest) Amendment Act, 1973 by virtue of which the legali ty of the gift made by Mula to appellant No. 13 could not be contested and (ii) since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot enure for his benefit, under section 8 of the Punjab Limitation (Custom) Act, of 1920.
Dismissing the appeal, the Court HELD: (1 ) That a declaratory decree obtained under the Punjab Customs (Power to Contest) Act by a reversioner to the effect that an alienation would not bind them after the.
alienor 's death, had the effect of restoring the property alienated to the estate of the alienor and therefore, all persons who are heirs to the deceased were entitled to obtain possession of the alienated property.
[367 E F] (ii) The decree obtained by appellants 1 to 12 on May 31, 1966 would enure for the benefit of all persons who are entitled to a share in the property of the.
deceased as it existed at the moment of his death.
Since Mula 's property stood freed from the encumbrance of the, gift at the moment of his death, respondent as the adopted son would be en tiled to the possession of the gifted property.
[367 H, 368 A] Giani Ram vs Ramji Lal ; , relied on to; Chand Singh vs bid Kaur approved.
(iii) It is true that, if it became necessary after the amending Act of 1973 to contest the gift executed by Mula in favour of Bhagwati Devi, section 7 of the Act of 1920 would operate as a bar to such a contest.
But in the instant case, the basis on which the respondent has asked for the relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree passed in suit No. 143/1965.
He has not and indeed he need not have contested the validity of the gift deed since the question was decided finally in the aforesaid suit.
[367 B D] 366
|
Appeals Nos. 278 and 279 of 1956.
Appeal from the judgment and order dated November 14, 1950, of the Allahabad High Court in Incometax Miscellaneous Case No. 12 of 1950.
47 A. V. Viswanatha Sastri and A. N. Kirpal for the appellant.
C. K. Daphtary, Solicitor General of India, Rajagopala Sastri, R. H. Dhebar and D. Gupta, for the respondent.
October 3.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
These are appeals by special leave and they arise from the assessment proceedings taken against the appellant 's husband Seth Ganga Sagar Jatia in respect of his income for the assessment years 1943 44 and 1944 45.
The said Seth Ganga Sagar died on September 22, 1944, leaving behind him his widow the appellant Shrimati Indermani Jatia.
After the death of her husband, the appellant continued the assessment proceedings as his representative and administrator of his estate.
The appellant as well as her husband were residents and ordinarily residents in British India for the relevant years.
The sources of the assessee 's income for the purposes of income.tax assessment were his business, his house property and the dividends earned by him.
This business was carried on by the appellant after his death at Khurja and Aligarh which are part of India and at Chistian in the Indian State of Bahawalpur now a part of Pakistan.
The central set of accounts of the assessee,s business were kept at Khurja.
In this set of accounts income received by the assessee from all sources were incorporated.
For the accounting year relevant to 1943 44 assessment, the interest account in the said books showed credit entries of Rs. 17,132/ as interest received on capital invested in the shop at Cliistian).
Similarly for the accounting period relevant to 1944 45 assessment Rs. 47,029/ had been credited in the said books.
The Income Tax Officer took the view that these two amounts represented the assessee 's taxable income in India and accordingly he levied tax on them.
The appellant filed appeals before the Appellate Assistant Commissioner against the said assessment orders for the assessment years 1943 44 and 1944 45; 48 and on her behalf the Income Tax Officer 's decision about the chargeability to tax of the aforesaid two amounts was challenged.
The appellate authority, however, rejected the appellant 's contention and confirmed the order under appeal.
The appellant then filed appeals before the Income Tax Appellate Tribunal.
The tribunal agreed with the view taken by the income tax authorities, confirmed their conclusion and dismissed the appeals preferred by the appellant.
In the assessment for 1943 44, the appellant had claimed that Rs. 7,512/ , which had been spent in litigation, was an admissible expenditure but this claim was disallowed by the Income Tax Officer and his decision was confirmed by the appellate authority and by the tribunal.
At the instance of the appellant, the tribunal stated the case and referred the following two questions to the High Court at Allahabad under section 66(1): (1) Whether, in the circumstances of the case, the sum of Rs. 17,132/ for 1943 44 and Rs. 47,029/for 1944 45 could be legally deemed to have been received in British India and were liable to tax under section 4(1) of the Act ; (2) Whether, in the circumstances of the, case, the expenditure of Rs. 7,5121 incurred in connection with a criminal litigation was admissible expenditure within the meaning of section 10(2)(xv) of the Act ? The reference was heard by Malik C. J. and V. Bhargava J. on November 14, 1950, and both the questions were answered against the appellant.
The application made by the appellant under section 66A of the Act for leave to appeal to the Supreme Court was dismissed by the High Court on April 23, 1954.
Thereupon the appellant applied for and obtained special leave on December 10, 1954.
That is how these appeals have come to this Court.
Mr. Viswanatha Sastri, for the appellant, did not challenge before us the correctness of the view taken by the High Court on the second question in respect of the expenditure of Rs. 7,512/ .
He conceded that the finding recorded by the income tax authorities 49.
against the appellant on this point is a finding of fact.
and, having regard to the material on the record, the correctness of the said finding cannot be effectively challenged.
He, however, urged that the answer, given by the High Court on the first question referred to it was erroneous in law.
The High Court has held that the two amounts of interest credited in the books of the appellant were liable to tax under section 4(1) of the Act as they must be deemed to have been received by the appellant in British India.
Mr. Sastri argues that the expression " deemed to be received " means, deemed by the relevant provisions of the Act to be received.
It is not disputed that though income may not have been received by the assessee in reality, it can be deemed to be received under the relevant provisions of the Act; and this constructive receipt can be con veniently described as statutory receipt under the Act.
Taxes deducted at source or annual accretion to an employee participating in a recognized firm, for instance, are deemed to be received under section 18(4) and section 58(e) of the Act respectively.
The argument is that there is no relevant provision of the Act under which the two amounts in question can be properly deemed to have been received by the appellant.
No provision has been mentioned in the judgment of the High Court nor has any such provision been cited by the income tax authorities either.
In our opinion, this argument is technically correct.
It must be conceded that the present Proceedings disclose some confusion in the mind of the appellant in the presentation of her case at all stages hereto, in the findings recorded by the income tax authorities, in the form of the question raised by the tribunal, and in the answer given to it by the High Court.
In law and in substance, what the department has done is to tax the said two amounts not because they are deemed to have been received by the appellant during the relevant years, but because they have been actually received by her or treated by her as so received.
In other words, the case against the appellant under section 4(1)(a) is that the amounts of interest constitute her income which is received or treated as received by her.
7 50 Dealing with the question on this basis, Mr. Sastri contends that the inference about the receipt of income by the appellant drawn from her books of account is not valid and should be rejected.
He does not dispute the fact that the books of account are kept by the appellant on mercantile basis.
It was conceded by the appellant 's lawyer in the proceedings before the tribunal that the appellant as the creditor had a right to enforce the payment of interest in British India, and that the liability of the Chistian shop had been extinguished to the extent of the interest paid by it to the head office.
The concessions made by the appellant before the tribunal clearly show that the sum advanced by the appellant 's head office in British India to her shop at Chistian was liable to pay interest and that the credit entry in respect of the two amounts had been made according to the mercantile method of keeping accounts.
It is well known that the mercantile system of accounting differs substantially from the cash system of book keeping.
Under the cash system, it is only actual cash receipts and actual cash payments that are recorded as credits and debits; whereas, under the mercantile system, credit entries are made in respect of amounts due immediately they become legally due and before they are actually received; similarly, the expenditure items for which legal liability has been incurred are immediately debited even before the amounts in question are actually disbursed.
Where accounts are kept on mercantile basis, the profits or gains are credited though they are not actually realised and the entries thus made really show nothing more than an accrual or arising of the said profits at the material time.
The same is the position with regard to debits made.
This position is not disputed by Mr. Sastri.
He,, however, contends that the entries in respect of the receipt Of interest are nevertheless merely book entries and it would not be reasonable to infer actual receipt of the said amount merely from these entries.
In support of this argument, Mr. Sastri invited our attention to the decision of the House of Lords in Gresham Life Assurance Society Ltd. vs Bishop (Surveyor of 51 Taxes)(1).
This was a case of life assurance society which carried on business at home and abroad with its head office in London.
At the head office accounts and balance sheets were made.
up, the profits ascertained and the dividends paid.
The interest upon the society 's foreign securities paid abroad was received by the agents and part of it was applied abroad for the purposes of the society.
All the interest on foreign securities was, however, taken into account in the balance sheets upon which the profits were ascertained.
It was held that taking the interest into account was not equivalent to a receipt in the United Kingdom and that income tax was not chargeable upon that part of the interest which was not remitted to the United Kingdom.
The Fourth Case falling under Schedule I which fell to be considered in this case referred to sums " which have been or will be received in Great Britain during the year for which the duty is payable ".
Under this provision, the locality of the receipt is naturally very important.
As Lord Lindley has observed that " what has been done, and all that has been done, is that the Gresham Company, in making up its account with a view to ascertain what profits it could divide in a particular year, entered on its asset side the sum of pound 43,483/ as money received during the year.
This was obviously right; for the object was not to ascertain the profit made in any particular country but the profit made by the company on all its transactions all over the world ".
In fact no account was forthcoming to show that the sum had ever been treated as remitted to the United Kingdom so as to justify the inference that in any commercial sense the same had been received in the United Kingdom as distinguished from other countries.
It is thus clear that the decision turned upon the special features of accounting which is usually adopted in preparing and presenting balance sheets of companies and it shows that an entry in a balance sheet is not receipt of money at the place where the balance sheet is prepared.
In our opinion, there is no analogy between the balance sheet of a (1) ; 52 company and the accounts 'kept by the appellant in respect of her individual business activities.
The principle laid down by the House of Lords in the case of Gresham Life Assurance Society Ltd. (1), appears to have been substantially reproduced in explanation (1) to section 4(1).
The argument that the principle thus statutorily recognized in respect of balance sheets should be extended to private books of account kept according to mercantile system cannot, in our opinion, be accepted.
Mr. Sastri has also invited our attention to the decision of Keshav Mills Ltd. vs Commissioner Income tax, Bombay (2).
In this case a non resident company manufactured textile goods in Petlad outside British India and sold the goods ex mills.
The firm of R. & Co., guaranteed the sale price of goods sold ex mills by the assessee company to purchasers at Ahmedabad within British India.
The assessee maintained its accounts according to the mercantile system and so debited R. & Co. with the price of goods sold and credited the sales account of the bills.
R. & Co. collected the amounts of the bills from the purchasers on behalf of the assessee and credited the sums realised in the assessee 's account with banks at Ahmedabad and also disbursed them to creditors of the assessee in British India.
During the relevant accounting year, the assessee thus received Rs. 12,68,418/ .
The asses.
see also received Rs. 4,40,878/ from sales to purchasers in British India.
The question which arose for decision was whether these two sums were sale proceeds of goods sold by the assessee to merchants in British India and whether they were received in British India and could be included in the assessable income of the assessee in British India.
It was held by this Court that the said amounts were not received by the assessee nor could be deemed to have been received by it when the entries were made in the books of account at Petlad but that they had merely accrued or arisen to the assessee there; that they were first received by R. & Co. and by the banks through whom the railway receipts were negotiated on behalf (1) ; (2) ; 53 of the company in British India and as such were liable to tax under section 4(1)(a) of the Act as having been received in British India on its behalf.
We do not see how this decision can assist the appellant 's case before us.
We are dealing with the appellant who is a resident in British India and the argument that the credit entries made in his books of account should not be treated as income received or treated by her as, received cannot be supported by the decision in Keshav Mills Ltd. (1) or even by any of the observations made by Bhagwati J. who delivered the majority judgment.
Reliance was also placed by Mr. Sastri on the decision of the Full Bench of the Punjab High Court in Sunder Das vs The Collector of Gujrat (2).
This case merely decided that, where the assessee had earned and received income in British Baluchistan (which Province was exempt from the operation of the Act except as to salaries) and had subsequently brought it into Punjab, it was not liable to income tax for the reason that the said income had not been received in the Punjab within the meaning of section 3, sub section
(1) of the Income tax Act.
In other words, this decision shows that the assessee cannot receive the same income twice in two different places but this principle has no application to the present case.
The decision of the Full Bench of the Madras ']High Court in Commissioner of Income tax, Madras vs A. T. K.P.L.S.P.
Subramaniam Chettiyar (3), on the other hand, supports the contention of the department.
In this case the Madras High Court has held that credit entries made on account of interest due by debtor in foreign places to the assessee must be treated as payments though that interest was not actually paid %in British India.
The assessee had a business of his own in Rangoon carried on by an agent and lie was also interested with another or others in a money lending business in Penang in which he was a chief partner.
From the Rangoon business a sum of Rs. 78,768/ and odd was transferred in cash to the Penang business (1) (2) Lah.
(3) Mad.
54 under the orders of the assessee.
In the books of the Rangoon business a sum of Rs. 12,174/. was entered as interest on that money from Penang and the assessee had been assessed in respect of this interest under section 4, sub section
(1) of the Act as income accruing, arising or received in British India.
It was admitted that the assessee kept his books according to the mercantile method of book keeping.
What the assessee sought to do was to treat the relevant entries of interest on cash basis though he adopted the mercantile basis in regard to other entries in the interest account.
This attempt did not succeed because the High Court held that the assessee 's own accounts were " dead against his contention " and they precluded him from arguing that the interest in question is income arising outside British India and not received in British India because in law the transfer called in the assessee 's books an advance to the Penang firm cannot be a loan.
The court came to the conclusion that once the assessee had adopted the mercantile basis of accountancy it was upon that basis and that basis alone that lie had to be assessed.
Thus this decision would show that the effect of making a credit entry in the interest account would be to treat that amount as income or profits received by the assessee or treated by him as received for the purposes of the tax provided the assessee keeps the accounts according to the mercantile method of book keeping.
We are, therefore, not prepared to accept Mr. Sastri 's argument that, despite the concessions made by his client before the tribunal, it would still be open to her to contend that the relevant entries in her books of account did not justify the inference that the appellant has received the amounts in question by way of interest during the relevant period.
Realising the infirmity in his argument on this point, Mr. Sastri contended that the main objection which he wanted to urge before us against the validity of the conclusion reached by the income tax authorities was fundamental and it went to the root of the matter.
Indeed, it was this aspect of the matter which Mr. Sastri seriously sought to press before us.
He contends 55 that the view taken by the Madras High Court in the case of Subramaniam Chettiyar (1), like the conclusion of the income tax authorities against the appellant in the present case, is based on the erroneous assumption that a person can trade with himself.
He urges that it is a rule of universal application that no person can trade with himself and make profit out of dealings with himself; and so his case is that, whatever may be the effect of the other entries made in the appellant 's books in the interest account, the relevant entries in respect of the interest alleged to have been received from the appellant 's own shop at Chistian in law cannot mean the receipt of any income by the appellant.
How can the appellant be tier own creditor and how can she receive interest in respect of the advance made by her to her own shop at Chistian, asks Mr. Sastri.
He concedes that this point bad not been raised by the appellant at any stage in the proceedings so far but, according to him, it is a Pure question of law and he should be allowed to argue it before us.
It was as early as 1887 that Palles C. B. observed in Dublin Corporation vs M 'Adam (Surveyor of Taxes) (2) that " no man, in my opinion, make, in what is its true sense or meaning, taxable profit by dealing with himself ".
In this case, a city corporation had been empowered by its Water works Act to supply waters beyond the city boundaries.
Any income thus arising had to be put into a consolidated account of the corporation for all the purposes of the Act.
It was held that the excess of receipts over expenditure in respect of the extra municipal supply constitutes profits chargeable to income tax.
Distinction was made between the extra municipal supply of water and supply within the limits of the municipality; and it was held that it was only the excess of receipts over expenditure in respect of the former that constitutes profits chargeable to income tax.
The argument that the income received from the rate payers residing within the limits of Dublin Municipality should be taken into account was repelled on the ground that (1) Mad. 765.
(2) 56 the corporation cannot be treated as in any sense a body distinct from the inhabitants of Dublin.
It was also observed that what was intended to be raised from the citizens was what is enough to pay for the expenses of the water supply and no more and that there was no intention that the corporation should in any sense make a profit from those rate payers.
The said principle has been enunciated very succinctly by Viscount Simon in Ostime (H. M. Inspector of Taxes) vs Pontypridd and Rhondda Joint Water Board (1) when he said that "if the undertaker is a rating authority and the subsidy is the proceeds of rates imposed by it or comes from a fund belonging to the authority, the identity of the source with the recipient prevents any question of profits arising ".
In The Carlisle and Silloth Golf Club vs Smith (Surveyor of Taxes) (2), Buckley L. J. has adverted to the same rule and has observed that a man cannot make profits or loss out of himself and that was the ground of the decision in New York Life Insurance Company vs Styles (Surveyor of Taxes) (3).
In support of the same proposition Mr. Sastri has also relied upon the decision of this Court in Sir Kikabhai Premchand V. Commissioner of Income tax (Central), Bombay (4).
In this case, the assessee carried on business in bullion and shares and kept his accounts in the mercantile system; the method adopted by him for ascertaining his profit,,; was to value stock at the beginning and close of each year at cost price.
In the accounting year he withdrew some silver bars and shares from the business and settled them in trusts, and in the accounts of the business he valued them at the close of the year at cost price.
According to the majority decision, the assessee was entitled to value the silver bars and shares in question at cost price and he was not bound to credit the business with the market price at the close of the year for ascertaining his assessable profits for the year.
Bhagwati J., however, dissented from this view and held that the assessee 's business was entitled to be credited (1) , 278.
(3) (2) (4) 57 with the market value of the assets withdrawn as on the date it was withdrawn whatever be the method employed by the assessee for the valuation of the stock in trade on hand at the close of the year.
Mr. Sastri placed reliance on the observations made by Bose J., who delivered the judgment for the majority view that " disregarding technicalities it is impossible to get away from the fact that the business was owned and run by the assessee himself.
In such circum stances it would be unreal and artificial to separate the business from its owner and treat them as if they were separate entities trading with each other and then by means of a fictional sale introduce a fictional profit which in truth and in fact is non existent ".
Mr. Sastri also contended that the decision of the Allahabad High Court in Ram Lal Bechairam vs Commissioner of Income tax (1) supported the same view.
On the other hand, the Solicitor General contends that the principle on which Mr. sastri relies can no longer be regarded as inflexible and universal; and according to him, permissible invasion of this principle has been recently recognized by the House of Lords in Sharkey (Inspector of Taxes) vs Wernher (2).
In this case Lady Zia carried on a stud farm, an activity which was admittedly husbandry and taxable under Schedule ' D '; she also carried on a separate activity, racing stables, which gave rise to no liability to tax being a " recreational " enterprise.
Horses were bred at the stud farm for the racing stables.
On the transfer of five horses in the relevant year of assessment from the stud to the stables it was held by the House of Lords (Lord Oaksey dissenting) that " where a person carrying on a trade disposes of part of his stock in trade not by way of sale in the course of trade but for his own use, enjoyment, or recreation, he must bring into his trading account for income tax purposes the market value of that stock in trade at the time of such disposition, and that, accordingly, the amount to be credited to the stud farm accounts on the transfer of the horses was their market value and not the (1) A.I.R. 1946 All. 8.
(2) 8 58 cost of breeding them ".
It would be noticed that this decision proceeds on the fictional or notional assumption that the transfer of the five horses from the stud farm of the assessee to her racing stables was a commercial transaction; and that, according to the Solicitor General, is a clear case where an exception is recognized to the general rule that a person cannot trade with himself.
In his speech, Viscount Simonds observed that " if there are commodities which are the subject of a man 's trade but may also be the subject of his use and enjoyment, I do not know how his account as a trader can properly be made up so as to ascertain his annual profits and gains unless his trading account is credited with a receipt in respect of those goods which he has diverted to his own use and enjoyment ".
Then Viscount Simonds referred to the change in law which made the farmer liable to tax under Scheduled ' instead of under Schedule 'B ' and to section 10 of the Finance Act of 1941 and observed that " these provisions emphasize the artificial dichotomy which the scheme of income tax law in many instances imposes.
Lord Radcliffe, dealt with the question at length.
He cited the proposition stated by Palles C. B. and observed that later decisions have shown that this simple proposition may cover what are to be regarded as two separate questions, whether a man can trade or deal with himself, whether a man can make taxable profit by so doing.
In his opinion, " it must now be said that people can carry on trade or business with themselves, as by way of mutual insurance, but that, if they do, a resulting surplus from the operations is not a profit from a trade for the purposes of income tax, or, put another way, their operations do not for the same purposes constitute a trade from which a profit can result ".
Lord Radcliffe referred to the case of Watson Brothers vs Hornby (1) which explicitly decided that it must be necessary for a proper assessment of trade profits under Case I of Schedule d ' to treat a man who supplies himself in his own trade as trading with himself on ordinary commercial (1) 59 terms and stated that the said decision which was given in 1942 laid down a principle that must continuously affect a great many taxpayers and it was only in 1955 that it was said that the case was wrongly decided.
The learned law Lord also considered the decision in Back (Inspector of Taxes) vs Daniels (1) and referred to the observations of Mr. Justice Rowlatt about the assessees ' admission that " in addition to their liability to income tax under Schedule ' B ' the assessees may be liable to income tax on a sum in the nature of a commission to themselves for selling their own potatoes, in the same way as they sell other people 's potatoes in London on the market ".
The assessees in the case before Rowlatt J. were a firm of wholesale potato merchants who carried on business in London where they sold all the potatoes raised by them on land in Fen District.
The effect of the decision was that Schedule ' B ' assessment on the profits of occupation prevented any assessment under Schedule ' D ' in respect of the profit the firm made when they sold the potatoes as wholesale merchants in London.
The assessees admitted their liability, to pay the tax on the commission in question ; but the admission did not seem, a strange one to Mr. Justice Rowlatt whose only comment was "but that, on the whole, is the limit of their liability ".
In regard to this decision, Lord Radcliffe has remarked that the limit mentioned by Rowlatt J. required the assessees to include in the receipts of their London business a commission from themselves which of course they never paid for selling themselves their own potatoes.
From the decisions examined by him, Lord Radcliffe drew the inference that they afford instances of the disintegration for tax purpose of a profitable business carried on by a taxpayer in two departments.
The respondent 's argument is that having regard to the decision of the House of Lords in the case of Sharkey vs Wernher (2) it would be necessary for a larger Bench of this Court to reconsider the view expressed by the majority decision in the case of Anglo French (1) (2) 60 Textile Co., Ltd. vs Commissioner of Income tax, Madras (1).
It is urged that the minority view expressed by Bhagwati J. appears to be more consistent with the decision of the House of Lords.
Besides, the Solicitor General has argued that though he is prepared to meet on the merits the new point raised by Mr. Sastri for the first time in appeal before us, he would be entitled to contend that, having regard to the special circumstances of this case, Mr. Sastri should not be permitted to raise the said point.
We are inclined to accept this contention raised by the Solicitor General and so we do not propose to decide the interesting point raised by Mr. Sastri.
We have already indicated that the appellant 's contention throughout has been that the relevant entries do not justify the inference that the amounts in question have been received by her during the years in question as income or profit; and this contention naturally raised the short and simple question as to the effect of the said entries made in the books of account which are admittedly kept on the mercantile basis of bookkeeping.
It is true that the confusion introduced by the appellant 's contention was shared b y the income tax authorities and it persisted throughout the present proceedings until they reached this Court.
That is why even the material question framed by the tribunal and answered by the High Court does not properly disclose the real controversy between the parties.
The reference to the deeming provisions of the Act which is presumably implied in the question as framed by the tribunal and answered by the High Court is clearly out of place; but the fact still remains that the appellant never raised the contention that the two entries in the interest.
account cannot in law show profits received by her because the appellant could not trade with herself.
If the appellant wanted to rely upon this principle the point should have been urged at the earlier stage of the proceedings.
Besides, there are some other factors which would introduce complications in case the point raised by Mr. Sastri were to be upheld.
The business con (1) , 61 ducted by the appellant in the shop at Chistian attracted the provisions of section 14(2)(c) of the Act which was then in force; and so no tax was payable by the appellant in respect of the income, profits or gains accruing or arising to her from the said shop unless such income, profits or gains were received or deemed to be received in or brought into British India in the previous year by or on behalf of the appellant.
In other words, though the appellant is a resident in the taxable territories and her income wherever received would be normally taxable, she would be entitled to the benefit of the exception prescribed by the pro visions of section 14 (2)(c).
Nevertheless the appellant 's profits from her shop at Chistian would be relevant for the purpose of determining the rates at which income tax was payable by the appellant.
They would also be relevant in deciding which part of the profits were received or could be deemed to be received within the meaning of section 14(2)(c).
If it is held that the entries in respect of the two items of interest in question do not represent in law any profits received by the appellant, then appropriate changes would have to be made in the appellant 's account books kept at Khurja as well as at Chistian.
The appellant has been keeping accounts on the mercantile basis for all the years; and it is very unlikely that the two entries before us are the only ones which may be affected if it is held that the appellant could not have traded with herself.
It is clear that the profits made by the appellant in her shop at Chistian have been determined all these years on the basis of credit and debit entries by the appellant according to the mercantile system; and so the question as to the amounts remitted by the appellant from Chistian to herself at Khurja would be affected by making necessary adjustments of all relevant entries, and that would mean reopening the whole enquiry into the appellant 's liability to pay the tax.
In this connection we may refer to the fact that for the assessment year 1943 44 the Income Tax Officer had determined the assessee 's income at Chistian at Rs. 74,982.
He had also held that out of the said profits the appellant had remitted Rs. 51,879 to 62 British India; and so, in the assessment, he added this amount as income in British India on remittance basis and, after giving the statutory allowance of Rs. 4,500, took the balance of Rs. 18,603 as income on accrual basis to be considered for rate purposes only.
On this question the ultimate decision was that no amount could be taxed on remittance basis.
In the supplementary assessment proceedings the appellant proved that a sum of Rs. 7,19,660 was sent to Chistian shop and Rs. 4,17,636 was received from the Chistian shop.
That is why, in the result, the entire income in Bahawalpur State was taken on an accrual basis for income tax.
Having regard to the method adopted by the appellant in keeping her books of account, it seems clear that, if the appellant 's present contention is accepted, the decision as to remittances from Chistian to Khurja as well as the decision as to the rates at which the tax were to be levied on the appellant may have to be reopened.
That is why we think, in the special circumstances of this case, we should not, allow Mr. Sastri to raise the point that the appellant cannot trade with herself and so the relevant entries cannot justify the inference that the appellant has received income even though the entries are made in the accounts kept on mercantile basis.
In the result the appeals fail and must be dismissed with costs.
Appeals dismissed.
| The officers of the Department of Revenue Intelligence (DRI) intercepted one truck.
On search, a large quantity of hashish was recovered.
In the course of investigation the names of the appellant and the petitioner surfaced.
Both of them made confessional statements to the DRI officials.
Complaints were lodged against the appellant and the petitioner under the Narcotic DrUgs & Psychotropic Sub stances Act, 1985 and the .
On their apply ing for enlargement on bail, the selfincriminating statements made by them to the DRI officials were used against them by the prosecution.
The appellant and the petitioner argued before the Single Judge of the High Court hearing the bail applications that the said statements were not admissible in evidence in view of section 25 of the Evidence Act.
The learned Single Judge referred the question of admissibility of the confessional statements to the Division Bench which concluded that the officials of the DRI invested with powers under section 53 of the Narcotic Act did not possess any of the attributes of an officer in charge of a police station conducting an investigation under Chapter XII of the Code of Criminal Procedure.
Against this decision of the Division Bench, the appellant and the petitioner have appealed to this Court.
It was contended before this Court on behalf of the appellant and the petitioner that: (1) the expression 'police officer ' used in section 25 64 of the Evidence Act must not be read in the narrow sense of only those officers belonging to the regular police force but must be construed broadly to include all those who have been invested with powers of the police in the matter of investigation of a penal offence; (2) when such extensive powers are conferred on the officers appointed under the Act and the consequences are so drastic, it is desirable that the protection of section 25, Evidence Act, should be ex tended to persons accused of the commission of any crime punishable under the Narcotic Act; (3) since the Act does not prescribe the procedure for investigation, the officers invested with power under section 53 of the Act must neces sarily resort to the procedure under Chapter XH of the Code of Criminal Procedure, 1973 which would require them to culminate the investigation by submitting a report under section 173 of the Code, and (4) since the officers referred to in section 53 have been invested with all the powers of an officer in charge of a police station for investigation of offences under the Narcotic Act, they have all the at tributes of a police officer investigating a crime under Chapter XII of the Code of Criminal Procedure, 1973 and would, therefore, fail within the expression "police offi cer" in section 25 of the Evidence Act.
Dismissing the appeal and the special leave petition, this Court, HELD: (1) Section 25, Evidence Act, engrafts a wholesome protection.
It must not, therefore, be construed in a narrow and technical sense but must be understood in a broad and popular sense.
But at the same time it cannot be construed in so wide a sense as to include persons on whom only some of the powers exercised by the police are conferred within the category of police officers.
[73B C] Balbir Singh vs State of Haryana, J.T. ; The State of Punjab vs Barkat Ram, ; at 347 and Raja Ram Jaiswal vs State of Bihar, ; at 761, referred to.
(2) Even if an officer is invested under any special law with powers analogous to those exercised by a police officer in charge of a police station investigating a cognizable offence, he does not thereby become a police officer under Section 25, Evidence Act, unless he has the power to lodge a report under Section 173 of the Code.
[76C] Badku Joti Savant vs State Of Mysore, ; ; Romesh Chandra Mehta vs State of West Bengal, ; Illias vs Collector of Customs, Madras, ; ; State of U.P. vs 65 Durga Prasad, and Balkishan A. Devidayal vs State of Maharashtra; , , referred to.
(3) The role of the officers effecting arrest or sei zure, except in the case of a police officer, ends with disposal of the person arrested and the article seized in the manner provided by sections 52 and 52A of the Act.
Section 57 obliges the officer making the arrest or seizure to report the same to his superior within 48 hours.
These powers are more or less similar to the powers conferred on Customs Officers under the .
[80F G] (4) The important attribute of police power is not only the power to investigate into the commission of cognizable offence but also the power to prosecute the offender by filing a report or a charge sheet under section 173 of the Code.
[81H; 82A] (5) There is nothing in the provisions of the Act to show that the legislature desired to vest in the officers appointed under section 53 of the Act, all the powers of Chapter XII, including the power to submit a report under Section 173 of the Code.[82C D] (6) Section 36A (1)(d) of the Act makes it clear that if the investigation is conducted by the police, it would conclude in a police report but if the investigation is made by an officer of any other department including the DRI, the Special Court would take cognizance of the offence upon a formal complaint made by such authorised officer of the concerned Government.
[82F G] (7) The Division Bench is right in holding that a con fessional or self incriminating statement made by a person accused of having committed a crime under the Narcotic Act to an officer invested with the power of investigation under section 53 of the Act was not hit by section 25 of the Evidence Act.
[67G] Mahesh vs Union of India, ; Mangal Singh vs The State of Gujarat, ; Radha Kishan Marwari vs King Emperor, Patna 46 and Sheikh Ahmed vs Emperor, Bombay 78, referred to.
|
minal Appeal No. 134 of 1955.
Appeal by special leave from the judgment and order dated ' January 13, 1955, of the Patna High Court in Criminal Appeal No. 339 of 1953, arising out of the judgment and order dated May 22, 1953, of the Court of the Special Judge at Gaya in Special Case No. 3 of 1952.
C. K. Daphtary, Solicitor General of India, A. K. Dutta and section P. Varina, for the appellant.
H. J. Umrigar and Ratnaparkhi, A. G., for the respondent.
March 21.
The Judgment of the Court was delivered by 197 section K. DAS J.
This appeal by special leave has been brought by the State of Bihar from the judgment and order of a learned single Judge of the High Court of Patna, dated January 13, 1955, by which the learned Judge set aside the conviction and sentence passed against the present respondent Basawan Singh and acquitted him of a charge under section 161, Indian Penal Code, on which charge he had been convicted by the learned Special Judge of Gaya by his judgment and order, dated May 22, 1953.
It is necessary to state here very briefly the salient facts of the prosecution case.
One Bhagwan Das (prosecution witness No. 7) had a ration shop at a short distance from police station Arwal in the district of Gaya.
One of the persons entitled to receive rationed articles from the said shop was Mahabir Prasad (prosecution witness No. 10), who was a brother of a businessman named Parmeshwar Prasad (prosecution witness No. 11).
Mahabir Prasad held a ration card for ten units, and on October 4, 1951, he purchased five maunds of wheat on the strength of his ration card from the shop of Bhagwan Das.
A cash memo was issued for the purpose, and the sale was entered in the register of the shop.
Mahabir Prasad carried the wheat in four bags on two ponies.
He himself went ahead on a cycle and the ponies followed him.
A gentleman named Ram Singhasan Singh, stated to be the Secretary of Arwal Thana Congress Committee, sent an information to the police station to the effect that Bhagwan Das had sold the wheat in what was called the " black market ".
On receipt of this information, Basawan Singh, who is respondent before us and who was at that time subinspector of police attached to the said police station, instituted a case under section 7 of the Essential Supplies (Temporary Powers) Act, 1946, against Bhagwan Das and Mahabir Prasad.
He seized the wheat which was being carried on the two ponies, went to the shop of Bhagwan Das and questioned him about the transaction.
Bhagwan Das denied the charge of blackmarketing and alleged that the transaction was a bona fide sale on the strength and authority of a ration 198 card.
He showed the duplicate copy of the cash memo and the entry in the sale register to the respondent.
The respondent then checked the stock of wheat in thee shop of Bhagwan Das and found that the stock tallied with the relevant entry in the, stock register.
In the meantime Mahabir Prasad who had been sent for also came to the shop with his cash memo and ration card.
These were shown to the respondent who, however, arrested both Bhagwan Das and Mahabir Prasad and took them to the police, station.
It was alleged that at the police station the respondent demanded Rs. 500 as a bribe from Mahabir Prasad.
Mahabir Prasad could not pay the amount, but said that he would consult his brother Parmeshwar Prasad and the latter would come and pay to the respondent whatever sum was thought necessary.
Both Bhagwan Das and Mahabir Prasad were then released on bail.
On the next day Bhagwan Das was called to the police station and a bribe Rs. 500 was demanded from him also.
It was alleged that the respondent told Bhagwan Das that if he did not pay the amount, the respondent would harass him; but if Bhagwan Das paid the amount, the respondent would submit a final report and no case would be started against him.
Bhagwan Das expressed his inability to pay such a, big amount and it was alleged that ultimately the amount was reduced to Rs. 300.
Bhagwan Das, however, did not pay it for some time, and the prosecution case was that the respondent took wheat from the shop of Bhagwan Das, without payment of any price, between the date October 26, 1951, and November 30, 19 1 ;in this way, seven maunds and ten seers of wheat it was alleged, were taken by the respondent from the shop of Bhagwan Das, though the sales were noted in the sale register in the names of various persons.
On December 1, 1951, the respondent, it was stated, agreed to accept Rs. 50 from Bhagwan Das in addition to the wheat already taken by him, in full satisfaction of the demand of Rs. 300.
When Bhagwan Das found that he had no other alternative but to pay the amount demanded by the 199 respondent, he decided to approach the Anti Corruption Department of the Government of Bihar.
One section P. Mukherji, Deputy Secretary to the Government of Bihar, was then in charge of the Department.
Bhagwan Das met Mukherji on two dates, December 3, 1951, and December 5, 1951, and filed a written petition to him.
Mukherji sent for his Deputy Superintendent of Police, a gentleman named Dharnidhar Misra, who was also attached to the Anti Corruption Department.
Bhagwan Das produced before Mukherji five Government currency notes of Rs. 10 each, the numbers of which were noted in his written petition.
Mukherji put his initials on these notes and then returned them to Bhagwan Das.
Mukherji then requested the District Magistrate of Patna to depute a first class Magistrate, and one Rudra Dev Sahai was so deputed.
It was settled that on December 8, 1951, at about 7 p.m. the bribe money in the shape of the initialled notes would be paid to the respondent, and it was arranged that Bhagwan Das would meet the officers from Patna on the canal road from Patna to Arwal at some distance from the police station.
Nothing, however, happened on December 8, 1951, because the respondent was away from the police station.
On the next day, that is December 9, 1951, the officers from Patna, namely Mukherji, Misra and Sahai, met Bhagwan Das at the appointed place at about 6.30 p.m.
Bhagwan Das then told the officers that Parmeshwar Prasad had also arrived there for paying Rs. 50 as bribe to the respondent for the release of the wheat which had been seized and which was still at the police station.
Parmeshwar Prasad was then brought to Mukherji at about 7.30 p.m.
Mukherji questioned him and recorded his statement which was endorsed by the Magistrate, Rudra Dev Sahai.
Parmeshwar Prasad then produced five notes of Rs. 10 each, the numbers of which were also noted in the statement.
The notes were then initialled by Mukherji.
After this, the party went to the police station.
The officers who had dressed themselves as ordinary villagers any posed to be relatives of Bhagwan Das squatted on the ground a few feet away 200 from the verandah of the quarters which the respondent occupied, and Bhagwan Das and Parmeshwar Prasad stood on the steps of the verandah where the respondent met them.
Leaving out details, which are not necessary for our purpose, what happened then was this.
Bhagwan Das paid Rs. 50 in currency notes which the respondent took in his left hand.
Parmeshwar Prasad also paid his amount in notes to the respondent.
The officers were then called.
The Magistrate and the Deputy Superintendent of Police disclosed their identity, and the Deputy Superintendent told the respondent that he had received a bribe.
The respondent tried to throw away the currency notes, but the 'Deputy Superintendent of Police caught hold of his left palm and the Magistrate caught hold of his right hand.
There was a scuffle, and the respondent was brought down from the verandah and was taken to an open place south west of the police station.
Nine currency notes were found 'in the hand of the respondent and they tallied with the numbers noted down earlier.
One currency note was not found till a search was made by means of a petromax lantern in the presence of two search witnesses, Ganesh Prasad (prosecution witness No. 5) and Janki Sao (prosecution witness No. 4).
The search was made at about 9 p.m. and the missing note was found in a crumpled condition in the southwestern corner of the verandah.
A report of the whole incident was then prepared by the Deputy Superintendent of Police and handed over to the officer in charge of Arwal police station.
The case was then investigated into by another Deputy Superintendent of Police one Hasan of Aurangabad.
After completion of investigation the Deputy Inspector General of Police, C.I.D., accorded sanction to the prosecution of the respondent on April 1, 1952.
Thereafter, the respondent was tried by the Special Judge of Gaya who, by his judgment and order dated May 22, 1953, found the respondent guilty of the offence under section 161, Indian Penal Code, and sentenced him to rigorous imprisonment for one year only.
It may be here stated that the defence of the 201 respondent was that in the case against Bhagwan Das and Mahabir Prasad, he had submitted a final report on October 8, 1951, to the effect that there was a mistake of fact with regard to the allegation of black marketing and that the case should be entered as false ', mistake of fact ", This report was supported by the Inspector of Police, Jehanabad, and accepted by the Sub divisional Magistrate on October 19, 1951.
The respondent denied that he ever demanded any bribe from either of the two aforesaid persons or that he had accepted as a bribe ten currency notes from Bhagwan Das and Parmeshwar Prasad on December 9, 1951.
It was suggested that the officers did not actually see what had happened on the steps of the verandah and were, deluded into thinking that nine currency notes were recovered from him and, with regard to the crumpled note found on the verandah, it was suggested that Bhagban Das might have planted it, when he bowed down before the respondent The learned Special judge accepted the prosecution evidence as trustworthy and rejected the defences as unworthy of credences.
Against his conviction the respondent filed an appeal to the High Court and the learned single Judge, who heard the appeal, acquitted the respondent on the main ground that there was no independent witness to support the testimony of the " raiding party " consisting of the two bribe givers, Bhagwan Das and Parmeshwar Prasad, and the two Magistrates and the police officer, namely.
Mukherji, Sahai and Misra.
The learned Judge referred to the decision of this Court in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh (1), and he expressed the view that that decision laid down an invariable rule that in cases of this nature the testimony of those witnesses who form what is called the "raiding party" must be discarded, unless that testimony is corroborated by independent witnesses.
He then posed the question if there were any independent witnesses in the present case, and observed " There are no independent witnesses on the transaction itself.
It was submitted, however, that there (1) 26 202 are search witnesses and they are independent; indeed they are.
But they have proved nothing except this that at the quarters of the appellant a ten rupee note crushed was found and a few other articles.
They did not prove the transaction nor they were present at the time of the occurrence itself.
The prosecution case depends for all practical purposes on the evidence of the witnesses who are members of the raiding party.
" The principal questions which fall for decision in this appeal are: (1) whether the learned Judge is right in his view that the decision in Rao Shiv Bahadur Singh (1), lays down any universal or inflexible rule that the testimony of witnesses who form the raiding party must be discarded, unless corroborated by independent witnesses; (2) if not, what is the correct rule with regard to such testimony in cases of this nature; and (3) whether the learned Judge is right in his view that there is no independent corroboration of the testimony of the witnesses of the raiding party in the present case.
But before we consider these three ques tions, it is advisable to dispose of the findings of fact which have been affirmed on appeal or arrived at by the learned Judge.
In his judgment the learned Judge has observed: " The first point to be determined in this case is whether Bhagwan Das was in fact, arrested in connection with the case under the Essential Supplies (Temporary Powers) Act.
That has been well proved and it has not been challenged.
It is also established that the appellant did arrest Bhagwan Das as well as Mahabir Prasad and that on that very day Bhagwan Das was released.
It is also well established that Bhagwan Das had gone to Mr. Mukherji at Patna and related an incident and as a result of that a trap was laid and on the alleged date of occurrence the three officers, namely, Mr. Mukherji, Mr. Sahai and Mr. Misra, had gone to the Arwal police station followed by the Gorkha Police.
It is also well established that the appellant on the date of occurrence was in his quarters and that it is also established beyond doubt that Bhagwan Das and Parmeshwar were with the appellant in his quarters that evening.
(1) 203 It is also established that the three officers were just near the quarters of the appellant and they were dressed in dhotis, kurtas, etc., like "dehaties".
It is further established that the appellant was caught by Mr. Misra and Mr. Sahai and in his possession were found the nine notes of Rs. 10 each and that it was established that one Rs. 10 note was found in the verandah of the quarters.
It is, therefore, not necessary to discus& the evidence on these points because, as I have said, these facts are well established and admitted before me in the course of the argument.
" It is fairly obvious from the observations quoted above that the learned Judge accepted the testimony of the witnesses of the raiding party as to the essential parts of the prosecution case and in particular, their evidence to the effect that nine initialled notes of Rs. 10 each were found in the possession of the respondent; this finding which is tantamount to accepting the prosecution case as correct militates against his later observation that in the absence of independent corroboration, he cannot accept the testimony of the witnesses of the raiding party.
We say this without meaning any disrespect, but the learned Judge perhaps thought that the witnesses of the raiding party were intrinsically trustworthy and gave true evidence, yet he based his order of acquittal on what he thought was the effect of the decision in Rao Shiv Bahadur Singh (1), namely, the adoption of an inflexible rule, in the words of the learned Judge, " that the evidence of the raiding party is necessarily tainted. . and on their evidence alone, it would be difficult to carry the guilt home " to the respondent.
In two respects on questions of fact, the learned Judge expressed a view different from that of the trial Court: first, with regard to the motive or reason for the bribe and secondly, with regard to the purchase of 7 maunds 10 seers of wheat, without payment, between the dates October 26, 1951 to November 30,1951.
As to motive, the learned Judge referred to the circumstance that the respondent had already submitted a final report on (1) 204 October 8, 1951, which was accepted by the Sub divisional Magistrate on October 19, and, therefore, there was no case pending against Bhagwan Das and Mahabir Prasad and the motive for the bribe could not be what was alleged by the prosecution.
The learned Judge then indulged in a highly speculative finding to the effect that the " possession of the nine notes can be reasonably explained by the fact that his (the present respondent 's) advice was sought for a land dispute between the relations " (meaning thereby the two Magistrates and the Deputy Superintendent of Police who posed as relations of Bhagwan Das).
This line of reasoning adopted by the learned Judge completely overlooks certain salient facts and circumstances on which the trial Court had relied.
The trial Court had found, on the evidence given in the case, that Bhagwan Das had no information that the case against him had ended in a final report; besides the wheat seized had not been released and Mahabir Prasad naturally wanted the wheat back.
Then, again, there was nothing to prevent the respondent from demanding a bribe even after the submission of a final report, saying that he would otherwise harass Bhagwan Das and Mahabir Prasad, and, lastly, it was nobody 's case, nor was there any evidence in support of it, that the nine notes were accepted by the respondent for giving legal advice in a land dispute.
The suggestion of a land dispute was made to allay any suspicion as to the pre sence of Mukherji, Sahai and Misra, who were dressed as ordinary villagers; none of the witnesses said that the nine notes were paid for advice in connection with a land dispute.
The respondent himself did not suggest that he had accepted nine notes for giving legal advice; his case was that no notes were found on him.
In this state of the evidence the learned Judge was clearly in error in holding that the motive for the bribe was something other than what was alleged by the prosecution.
His finding on this point is based on no evidence and is mere speculation.
As to the 7 maunds and 10 seers of wheat, the learned Judge found that the prosecution had not satisfactorily proved that the respondent was supplied 205 with wheat without payment.
The trial Court pointed out, however, that at least two of the entries in the sale register of Bhagwan Das (exhibit 10/10 and 11/11) stood in the name of the respondent, and it was not the respondent 's case that he had paid for the wheat referred to in the two entries.
Whatever be the correct finding with regard to the sale or supply of these 7 maunds and 10 seers of wheat, we agree with the trial Court that the prosecution case is not essentially or vitally dependent on the sale or supply of 7 maunds 10 seers of wheat free of cost to the respondent.
The charge against the respondent is the acceptance of Rs. 100 as a bribe from Bhagwan Das and Parmeshwar Prasad on December 9, 1951.
That charge does not necessarily depend upon the truth or otherwise of the supply of 7 maunds and 10 seers of wheat between certain earlier dates.
Having dealt with the findings of fact, we proceed now to consider the principal questions which arise in this appeal.
We take first the decision in Rao Shiv Bahadur Singh (1).
It is not necessary to recapitulate all the facts of that case; it is sufficient to state that in the trap that was laid in that case, the most important witness was one Nagindas who offered the sum of Rs. 25,000, and the two important witnesses of the raiding party were Pandit Dhanraj, Superintendent, Special Police Establishment, Delhi, and Shanti Lal Ahuja, Additional District Magistrate, Delhi.
Nagindas, who was acting on behalf of his master Sir Chinubhai did not have the money to offer as a bribe, and the money was provided by the police authorities which money was offered by Nagindas in that case.
The first point for consideration in the case was whether Nagindas and one Pannalal, who was also a servant of Sir Chinubhai and who accompanied Nagindas, were accomplices and, therefore, their evidence should be treated on that basis.
This was answered in the negative, on the ground that neither of them was a willing party to the giving of the bribe and, therefore, they did not have the necessary criminal intent to be treated as abettors or accomplices.
(1) 206 This brings out the first distinction which has to be made: the distinction between a witness who is an accomplice and one who is not.
How the evidence of an accomplice is to be treated is no longer open to any doubt; the matter has been dealt with in a large number of decisions, and as was observed by this Court in Rameshwar vs The State of Rajasthan (1), the rule laid down in Rex vs Baskerville (2), with regard to the admissibility of the uncorroborated evidence of an accomplice is also the law in India.
The rule is that such evidence is admissible in law; but it has long been a rule of practice, which has virtually become equivalent to a rule of law, that the judge must warn the jury of the danger of convicting a prisoner on the un corroborated testimony of an accomplice.
In Rameshwar 's case(l) it was pointed out: " The only clarification necessary for purposes of this country is where this class of offence is sometimes tried by a judge without the aid of a jury.
In these cases it is necessary that the Judge should give some indication in his judgment that he has had this rule of caution in mind and should proceed to give reasons for considering it unnecessary to require corroboration on the facts of the particular case before him and show why he considers it safe to convict without corroboration in that particular case.
" If the witnesses are not accomplices, what then is their position ? In Rao Shiv Bahadur Singh 's case (3) it was observed, with regard to Nagindas and Pannalal, that they were partisan witnesses who were out to entrap the appellant in that case, and it was further observed: " A perusal of the evidence. . leaves in the mind the impression that they were not witnesses whose evidence could be taken at its face value.
" We have taken the observations quoted above from a full report of the decision, as the authorised report does not contain the discussion with regard to evidence.
It is thus clear that the decision did not lay down any universal or inflexible rule of rejection even with regard to the evidence of witnesses who may be called partisan or interested witnesses.
It is plain and obvious (1) ; 385 (3) (2) 207 that no such rule can be laid down; for the value of the testimony of a witness depends on diverse factors,, such as, the character of the witness, to what extent and in what manner he is interested, how he has fared in cross examination, etc.
There is no doubt that the testimony of partisan or interested witnesses must be scrutinised with care and there may be cases, as in Rao Shiv Bahadur Singh 's case (1), where the Court will as a matter of prudence look for independent corroboration.
It is wrong, however, to deduce from that decision any universal or inflexible rule that the evidence of the witnesses of the raiding party must be discarded, unless independent corroboration is available.
With regard to the other two witnesses, Pandit Dhanraj and Shanti Lal Ahuja, it was observed that the former was a willing tool in the hands of Nagindas, and the latter reduced himself to the position of a police witness; therefore, their evidence " was not such as to inspire confidence in the mind of the Court ".
Here again no universal or inflexible rule is being laid down.
It should be noticed that in Rao Shiv Bahadur Singh 's case (1) the police authorities provided the money, and that was taken into consideration in assessing the value of the testimony of Pandit Dhanraj and Shantilal Ahuja.
In the case before us, no such consideration arises, because the money was provided by Bhagwan Das and Parmeshwar Prasad, and the officers went there to see what happened.
We must make it clear that we do not wish it to be understood that we are deciding in this case that if the money offered as a bribe is provided by somebody other than the bribe giver, it makes a distinction in principle.
That question does not arise for decision here.
All that we say and have said so far is that in assessing the value of the testimony of a witness, diverse factors must arise for consideration and the comparative importance of this or that factor must depend on the facts or circumstances of each case.
No standard higher or stricter than this can be laid down, or was laid down in Rao Shiv Bahadur Singh 's decision (1).
We must advert here to two other aspects of that decision.
It was observed there in clear and emphatic (1) 208 words that it is the duty of the police authorities to prevent crimes being committed; but it is no part of their business to provide the instruments of the offence.
With these observations we are in agreement.
In Brannan vs Peck (1), a police officer went inside a public house and made a bet on a horse, which act amounted to an offence.
The motive in making that bet was to detect the offence under the Street Betting Act, 1906, which was being committed by the accused person in that case.
In these circumstances, Goddard C. J. made the following observations: " I hope the day is far distant, when it will become a common practice in this country for police officers to be told to commit an offence themselves for the purpose of getting evidence against someone ".
We also express the same hope for our country, but must hasten to add that in the case before us no offence was committed by any of the three officers, Mukherji, Sahai and Misra, in order to get evidence against the respondent.
This point was again emphasised in a later decision of this Court in Ramjanam Singh vs The State of Bihar (2).
It was therein observed: " The very best of men have moments of weakness and temptation, and even the worst, times when they repent of an evil thought and are given an inner strength to set Satan behind them and if they do, whether it is because of caution, or because of their better instincts, or because some other has shown them either the futility or the wickedness of wrongdoing, it behaves society and the State to protect them and help them in their good resolve; not to.
place further temptation in their way and start afresh a train of criminal thought which had been finally set aside.
This is the type of case to which the strictures of this Court in Shiv Bahadur Singh vs State of Vindhya Pradesh, ; at p. 334 apply.
" The other aspect of the decision in Rao Shiv Bahadur Singh 's case (3) is the employment of Magistrates as witnesses of police traps.
Here again, we are in full agreement with the view that the independence and impartiality of the judiciary requires that Magistrates (1) (3) (2) A.I.R. 1956 S.C. 643,651.
209 whose normal function is judicial should not be relegated to the position of partisan witnesses and " required to depose to matters transacted by them in their official capacity unregulated by any statutory rules of procedure or conduct whatever At the same time it is necessary to make some distinctions.
In a large part of the country now, the directive principle laid down in article 50 of the Constitution has been implemented, and there has been a separation of the judiciary from the executive.
The principles on which the employment of Magistrates as witnesses of police traps has been condemned have hardly any application where the Magistrates concerned are executive Magistrates who perform no judicial functions or where the officers concerned are officers of the Anti Corruption Department whose duty it is to detect offences of corruption.
In the case before us, Mukherji and Misra belonged to such a department.
Moreover, however inexpedient it may be to employ Magistrates as trap witnesses, their evidence has to be judged by the same standard as the evidence of other partisan or interested witnesses, and the inexpediency of employing Magistrates as trap witnesses cannot be exalted into an inflexible rule of total rejection of their evidence, in the absence of independent corroboration.
The learned Solicitor General referred in the course of his arguments to the difficulty of detecting corruption cases and of securing conviction in such cases.
We do not think that such a consideration should influence the mind of a judge.
Whatever be the difficulties, admissible evidence given in a case must be judged on its own merits, with due, regard to all the circumstances of the case.
In some of the cases which have been cited at the bar a distinction has been drawn between two kinds of 'traps ' legitimate and illegitimate as In re M. section Mohiddin (1), and in some other cases a distinction has been made between tainted evidence of an accomplice and interested testimony of a partisan witness and it has been said that the degree of corroboration necessary is higher in respect of tainted evidence than for partisan (1) 27 210 evidence (see Ram Chand Tolaram Khatri vs The, ,State (1)).
We think that for deciding the questions before us, such distinctions are somewhat artificial, and in the matter of assessment of the value of evidence and the degree of corroboration necessary to inspire confidence, no rigid formula can or should be laid down.
For the aforesaid reasons, we think that the learned Judge of the High Court did not correctly appreciate the effect of the decision in Rao Shiv Bahadur Singh 's case (2 ) and he was in error in thinking that that decision laid down any inflexible rule that the evidence of the witnesses of the raiding party must be discarded in the absence of any independent corroboration.
The correct rule is this : if any of the witnesses are accomplices who are particeps criminis in respect of the actual crime charged, their evidence must be treated as the evidence of accomplices is treated; if they are not accomplices but are partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested in the same way as other interested evidence is tested by the application of diverse considerations which must vary from case to case, and in a proper case, the Court may even look for independent corroboration before convicting the accused person.
If a Magistrate puts himself in the position of a partisan or interested witness, he cannot claim any higher status and must be treated as any other interested witness.
This brings us to the last question: if in the present case, there is any independent corroboration.
We have pointed out that the two search witnesses Janki Sao and Ganesh Prasad (prosecution witnesses 4 and 5) were independent witnesses, who had nothing to do with the raiding party.
They found one crumpled ten rupee note, one of the series initialled by Mukherji and the numbers of which were noted in the statements of Bhagwan Das and Parmeshwar Prasad, at the southwestern corner of the verandah, where the respondent when seized by the raiding party tried to throw away the notes.
In our view, the evidence of the two search (1) A.I.R. 1956 Bom.
(2) 211 witnesses does provide independent corroboration, in a material particular, to the testimony of the raiding, party.
The crumpled note, one of the series testified ' to by the raiding party, could not come of itself to the verandah ; it could be found where it was actually found only if the testimony of the raiding party was true.
The learned Judge said that the search witnesses came later and did not see the actual transaction, that is, the giving and taking of the bribe.
That is correct; but independent corroboration does not mean that every detail of what the witnesses of the raiding party have said must be corroborated by independent witnesses.
As was observed by Lord Reading in Baskerville 's case (1) even in respect of the evidence of an accomplice, all that is required is that there must be " some additional evidence rendering it probable that the story of the accomplice is true and that it is reasonably safe to act upon it ".
In Rameshwar vs The State of Rajasthan (2), to which we have referred in an earlier paragraph, the nature and extent of corroboration required, when it is not considered safe to dispense with it, have been clearly explained and it is merely necessary to reiterate that corroboration need not be by direct evidence that the accused committed the crime; it is sufficient even though it is merely by circumstantial evidence of his connection with the crime.
While referring to the findings of fact we have pointed out that the learned Judge himself accepted as correct the prosecution case in its essential parts.
There is in our opinion no difficulty in accepting the testimony ' of the raiding party in this case, supported as it is by the independent testimony of the two search witnesses.
Learned counsel for the respondent has urged before us, as a last resort, that we should not exercise the extraordinary jurisdiction vested in this Court by article 136, in a case of acquittal by the High Court, unless exceptional or special circumstances are shown to exist or substantial and grave injustice has been done.
He has drawn attention to our decision in The (1) (2) ; , 385. 1 212 State Government, Madhya Pradesh vs Ramkrishna Ganpatrao Limsey and others (1).
In this case, the learned Judge accepted as correct all the essential facts constituting the offence with which the respondent was charged, but he passed an order of acquittal on a misconception as to the effect of a decision of this Court.
We have no doubt whatsoever that this is a fit case for the exorcise of our jurisdiction under article 136 of the Constitution.
In view of the findings of fact arrived at by the learned Judge, the only reasonable conclusion is that the respondent is guilty of the offence with which he was charged and the order of acquittal is clearly erroneous.
A point about the validity of the order sanctioning prosecution of the respondent was urged before the learned Special Judge, who held that the sanction was in order.
This point was not dealt with in the High Court.
But learned counsel for the respondent has frankly conceded before us that he cannot successfully urge that point here.
It is, therefore, un necessary to remand the appeal for a further hearing on merits.
The result, therefore, is that this appeal is allowed.
The judgment and order of the learned single Judge of the High Court of Patna, dated January 13, 1955, are set aside; the respondent is convicted of the offence under section 161, Indian Penal Code, and sentenced to rigorous imprisonment for one year, namely, the same sentence as was passed by the learned Special Judge of Gaya.
The respondent must now surrender to serve out his sentence.
Appeal allowed.
| The respondent, a sub inspector of police, was charged with acceptance of Rs. 100 as a bribe from two persons, B and P, for dropping a case which he had instituted against B under the Essential Supplies (Temporary Powers) Act, 1946.
The prosecution case was that when the demand for the bribe made by the respondent could not be avoided, B and P approached the Anticorrosive Department, and it was arranged that the respondent should be paid at the police station the bribe money in the shape of currency notes produced by B and P and initialled by M, who was in charge of the Anti Corruption Department, and that M, along with a Deputy Superintendent of the Department and a first class Magistrate, should be at the police station at the time of payment, dressed as ordinary villagers ; that as soon as the amounts in notes were received by the respondent the officers disclosed their identity, that thereupon the respondent tried to throw away the currency notes but that as a result of the officers catching hold of his hands the notes were found in his hand except one which was missing and that as a result of a search made in the presence of two search witnesses later the missing note was also found.
The respondent was tried by the Special judge who accepted the prosecution evidence and found him guilty of the offence under section 161 of the Indian Penal Code.
On appeal to the High Court the learned single judge who disposed of the appeal held that the respondent could not be convicted because (1) there was no independent witness to support the testimony of the " raiding party " consisting of the two bribegivers and the three officers, (2) the search witnesses did not prove the transaction nor were they present at the time of the occur rence, and (3) the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , had laid down an invariable rule that in cases of this nature the testimony of those witnesses who form what is called " the raiding party " must be discarded, unless that testimony is corroborated by independent witnesses.
The State appealed by special leave : Held, (1) that the evidence of the two search witnesses provided independent corroboration in a material particular to 196 the testimony of the raiding party, because the missing currency note, one of the series testified to by the raiding party, could be found where it was actually found only if the testimony of the raiding party was true.
(2)that corroboration need not be by direct evidence that the accused committed the crime; it is sufficient even though it is merely by circumstantial evidence of his connection with the crime.
Rameshwar vs The State of Rajasthan, ; , followed.
(3)that the decision in Rao Shiv Bahadur Singh vs State of Vindhya Pradesh, , has not laid down any inflexible rule that the evidence of the witnesses of the raiding party must be discarded in all cases in the absence of any independent corroboration.
The correct rule is that if any of the witnesses are accom plices, their evidence is admissible in law but the judge must warn the jury of the danger of convicting the accused on the uncorroborated testimony of an accomplice ; if the case is tried without the aid of a jury, the judge should indicate in his judgment that he had this rule of caution in mind and give reasons for considering it unnecessary to require corroboration; if, however, the witnesses are not accomplices but are merely partisan or interested witnesses, who are concerned in the success of the trap, their evidence must be tested in the same way as any other interested evidence is tested, and in a proper case, the Court may look for independent corroboration before convicting the accused person.
If a Magistrate puts himself in the position of a partisan or interested witness, he cannot claim any higher status and must be treated as any other interested witness.
|
titions Nos.
4021 4022, 4024 4025, 4027 4032, 4037, 4040 4041, 4045 4047, 4049 4075, 4078 4092, 4099, 4103 4111, 4120 4126, 4129 4140, 4142 4143, 4155 4157, 4184, 4187, 4188 4190, 4192, 4202, 4203, 4205, 4206, 4212, 4214, 4217, 4223, 4231, 4234 4235, 4245, 4250, 4252, 4300, 4308 of 1978 and 4226 of 1978.
(Under article 32 of the Constitution of India.) AND Writ Petitions Nos. 966 971, 3643 3650, 3884 3896, 3900 3921, 3965, 3975 3990, 4001 4020, 4034, 4100, 4127 to 4128, 4186, 4193, 4208, 4271, of 1978 and 3968 3971, 4191, 4221 and 4272 4275 of 1978.
(Under article 32 of the Constitution of India.
AND Writ petitions: 4154, 4209, 4242, 4243, 4247, 4248, 4253, 4254, 4310 and 4314 of 1978.
(Under article 32 of the Constitution of India.) A. K. Sen and Mrs. Rani Chhabra in W.P. 4021/78 for the Petitioners.
Yogeshwar Parshad and Mrs. Rani Chhabra in W.P. Nos.
4022, 4024, 4025, 4027 4032, 4037, 4040, 4041, 4045, 4047, 4046, 4064 4067, 4078, 4079, 4092, 4142, 4143, 4187, 4090, 4092 and 4231 of 1978.
V. C. Mahajan and Mrs. Urmila Sirur for the Petitioners in W.P. 4049 63, 4080 91, 4108 to 4111/78.
K K. Mohan, section K. Sabharwal, Pramod Swarup and Shreepal Singh for the Petns.
in W.P. Nos. 103, 4140, 4184, 4202 and 4234 of 1978.
126 O. P. Sharma, N. N. Sharma, A. K. Srivastava, Amlan Ghosh and P. K. Ghosh.
in W.P. Nos.
4190 92 and 4226 of 1978.
O. P. Sharma for the Petitioner in W.P. 4226/78.
K. B. Rohtgi for the Petitioners in W.P. 3975 76 and 4274 75/ 78.
O. P. Singh in W.P. 966 71 of 1978 for the Petitioners.
A. L. Trehan for the Petitioner in W.P. 4100/78.
section K. Sabharwal for the Petitioner in W.P. 4214/78.
M. Qamaruddin for the petitioner in W.P. 4193 of 1978.
R. K. Jain, K. K. Mohan and Rajiv Dutt, L. R. Singh for the Petitioners in W.P. 4271 73/78.
section N. Kacker, Sol.
Genl., O. P. Rana for the State of U.P. Soli J. Sorabjee Addl.
of India and Hardev Singh for the State of Punjab, J. D. Jain and B. R. Kapoor in W.P. Nos.
4242 4244, 4247 4228, 4209 and 4308 of 1978.
B. R. Kapoor and section K. Sabharwal for the Petitioners in W.P. 4150 4254/78.
M. P. Jha for the Petitioner in W.P. 4252/78.
section K. Sabharwal for the Petitioner in W.P. 4245, 4253 and 4310/78.
Shreepal Singh for the Petitioners in W.P. 4235/78.
Hardev Singh on behalf of R. N. Sachthey for the State of Punjab.
The Judgment of the Court was delivered by KRISHNA IYER, J.
What are we about? A raging rain of writ petitions by hundreds of merchants of intoxicants hit by a recently amended rule declaring a break of two 'dry ' days in every 'wet ' week for licensed liquor shops and other institutions of inebriation in the private sector, puts in issue the constitutionality of section 59(f)(v) and Rule 37 of the Punjab Excise Act and Liquor Licence (Second Amendment) Rules, (hereinafter, for short, the Act and the Rules).
The tragic irony of the legal plea is that Article 14 and 19 of the very Constitution, which, in Article 47, makes it a fundamental obligation of the State to bring about prohibition of intoxicating drinks, is pressed into service to thwart the State 's half hearted prohibitionist gesture.
Of course, it is on the cards that the end may be good but the means may be bad, constitutionally speaking.
And there is a mystique about legalese beyond the layman 's ken ! 127 To set the record straight, we must state, right here, that no frontal attack is made on the power of the State to regulate any trade (even a trade where the turnover turns on tempting the customer to take reeling rolling trips into the realm of the jocose, belliocose, lachrymore and comatose).
Resort was made to a flanking strategy of anathematising the statutory regulatory power in section 59(f)v) and its offspring, the amended rule interdicting sales of tipay ecstasy on Tuesdays and Fridays, as too naked, unguided and arcane and, resultantly, too arbitrary and unreasonable to comport with articles 14 and 19.
Our response at the first blush was this.
Were such a plea valid, what a large communication exists between lawyer 's law and judicial justice on the one hand and life 's reality and sobriety on the other, unless there be something occultly unconstitutional in the impugned Section and Rule below the visibility zone of men of ordinary comprehension.
We here recall the principle declared before the American Bar Association by a distinguished Federal. .
Judge William Howard Taft in 1895: "If the law is but the essence of common sense, the protests of many average. men may evidence a defect in a legal conclusion though based on the nicest legal reasoning and profoundest learning.
" The Facts The Punjab Excise Act, 1914, contemplates grant of licences, inter alia, for trading in (Indian) foreign and country liquor.
There are various conditions attached to the licences which are of a regulatory and fiscal character.
The petitioners are licence holders and have, on deposit of heavy licence fee, been permitted by the State to vend liquor.
The conditions of the licences include restrictions of various types, including obligation not to sell on certain days and during certain hours.
Under the former rule 37 Tuesday upto 2 p.m. was prohibited for sale; so also the seventh day of the month.
The licences were granted subject to rules framed under the Act and Section 59 is one of the provisions empowering rule making.
Rule 37 was amended by a notification whereby, in the place of Tuesdays upto 2 p.m. plus the 7th day of every month, Tuesdays and Fridays in every week were substituted, as days when liquor vending was prohibited.
Under the modified rules a consequential reduction of the licence fee from Rs. 12,000/ to Rs. 10,000 was also made, probably to compensate for the marginal loss caused by the two day closure.
Aggrieved by this amendment the petitioners moved this 128 Court challenging its vires as well as the constitutionality of section 59(f)(v) which is the source of power to make rule 37.
If the Section fails the rule must fall, since the stream cannot rise higher that the source.
Various contentions based on article 19(g) and (6) and article 14 were urged and stay of operation of the new rule was granted by this Court.
We will presently examine the tenability of the argument and the alleged vice of the provisions; and in doing so we adopt, as counsel desired, a policy of non alignment on the morality of drinking since law and morals interact and yet are autonomous; but, equally clearly, we inform ourselves of the plural 'pathology ' implicit in untrammelled trading in alcohol.
He who would be a sound lawyer, Andrea Alciati, that 16th century Italian humanist, jurist, long ago stressed, should not limit himself to the letter of the text or the narrow study of law but should devote himself also to history, sociology, philology, politics, economics, nostics and other allied sciences, if he is to be a jurist priest in the service of justice or legal engineer of social justice.(1) This is our perspective because, while the forensic problem is constitutional, the Constitution itself is a human document.
The integral yoga of law and life once underlined, the stage is set to unfold the relevant facts and focus on the precise contentions.
Several counsel have made separate submissions hut the basic note is the same with minor variations in emphasis.
Why drastically regulate the drink trade ? the Social rationale on Brandies brief Anywhere on our human planet the sober imperative of moderating the consumption of inebriating methane substances and manacling liquor business towards that end, will meet with axiomatic acceptance.
Medical, criminological and sociological testimony on a cosmic scale bears out the tragic miscellany of traumatic consequences of, shattered health and broken homes, of crime escalation with alcohol as the hidden villain or aggressively promotional anti hero, of psychic breakdowns, insane cravings and efficiency impairment, of pathetic descent to doom sans sense, sans shame, sans everything, and host of other disasters individuals, familial, genetic and societal.(2) We need hot have dilated further on the deleterious impost of unchecked alcohol intake on consumers and communities but Shri Mahajan advocated regulation as valid with the cute rider that even (1) Encyclopaedia of the Social Sciences, Vol.
J ll p. 618.
(2) Ibid p. 619 27.
129 water intake, if immoderate, may affect health and so regulation of liquor trade may not be valid, if more drastic than for other edibles.
The sequitur he argued for was that the two day ban on liquor licensees was unreasonable under article 19(g) read with article 19(6).
He also branded the power to restrict the days and hours of sale of liquor without specification of guidelines as arbitrary and scouted the submission of the Addl.
Solicitor General that the noxious nature of alcohol and the notorious fall out from gentle bibbing at the beginning on to deadly addiction at the end was inherent guideline to salvage the provision from constitutional casualty.
Innocently the equate alcohol with aqua is an exercise ill intoxication and straining judicial credibility to absurdity.
We proceed to explain why alcohol business is dangerous and its very injurious character and mischief potential legitimate active policing of the trade by any welfare State even absent article 47.
The alcoholics will chime in with A.E. Houseman(1): ' "And malt does more than Milton can to justify God 's ways to man.
But the wisdom of the ages oozes through Thomas Bacon who wrote: "For when the wine is in, the wit is out." Dr. Walter Reckless, a criminologist of international repute who had worked in India for years has in "The Crime Problem" rightly stressed "Of all the problems in human society, there is probably none which is as closely related to criminal behaviour as is drunkenness.
It is hard to say whether this close relation ship is a chemical one, a psychological one, or a situational one. ' Several different levels of relationship between ingestion of alcohol and behaviour apparently exist.
A recent statement by the National Council on Crime and Delinquency quite succinctly describes the effect of alcohol on behaviour: Alcohol acts as a depressant; it inhibits self control before it curtails the ability to act; and an individual 's personality and related social and cultural factors assert themselves during drunken behaviour .
Although its dangers are not commonly understood or accepted by the public, ethyl alcohol can have perhaps the most serious con sequences of any mind and body altering drug.
It causes (1) Makers of Modern world by Louis Untermeyer p. 275.
(2) The Crime Problem (Fifth Edition) Walter C. Reckle Page 115, 116 & 117.
130 addiction in chronic alcoholics, who suffer consequences just as serious, if not more serious than opiate addicts.
It is by far the most dangerous and the most widely used of any drug." (emphasis added).
The President 's Commission on Law Enforcement and Administration of Justice made the following pertinent observation: The figures show that crimes of physical violence are associated with intoxicated persons.
Thus the closest relationship between intoxication and criminal behaviour (except for public intoxication) has been established for criminal categories involving assaultive behaviour.
This relationship is especially high for lower class Negroes and whites.
More than likely, aggression in these groups is weakly controlled and the drinking of alcoholic beverages serves as a triggering mechanism for the external release of aggression.
There are certain types of key situations located in lower class life in which alcohol is a major factor in triggering assaultive behaviour.
A frequent locale is the lower class travern which is an important social institution for the class group.
Assaultive episodes are triggered during the drinking situation by quarrels that center around defaming personal honor, threats to masculinity, and questions about one 's birth legitimacy.
Personal quarrels between husband and wife, especially after the husband 's drinking, frequently result in assaultive episodes, in the lower lower class family.", The steady flow of drunkenness cases through the hands of the police, into our lower courts, and into our jails and workhouses has been labelled the "revolving" door, because a very large part of this flow of cases consists of chronic drinkers who go through the door and out, time after time.
On one occasion when the author was visiting a Saturday morning session of a misdemeanor court, there was a case of an old "bum" who had been in the local workhouse 285 times previously." An Indian author, Dr. Sethna dealing with society and the criminal, has this to say :(1) Many crimes are caused under the influence of alcohol or drugs.
The use of alcohol, m course of time, causes great and irresistible craving for it.
To retain the so called (1) Society and the Criminal by M. J. Sethna 3rd Edn.
P. 164.
131 'satisfaction ', derived from the use of alcohol or drugs, the drunkard or the drug addict has got to go on increasing the quantities from time to time; such a state of affairs may lead him even to commit thefts or frauds to get the same otherwise.
If he gets drunk so heavily that he cannot understand the consequences of his acts he is quite likely to do some harmful act even an act of homicide.
Every often, crimes of violence have been committed in a state of intoxication.
Dr. Hearly is of the opinion that complete elimination of alcohol and harmful drug habits would cause a reduction in crime by at least 20 per cent; not only that, but there would also be cumulative effect on the generations to come, by diminishing poverty, improving home conditions and habits of living and environment, and perhaps even an improvement in heredity itself.
Abstinence campaigns carried out efficiently and in the proper manner show how crime drops.
Dr. Hearly cites Baer, who says that Father Mathew 's abstinence compaigns in Ireland, during 1837 1842, reduced the use of spirits SO per cent, and the crimes dropped from 64,520 to 47,027.
According to Evangeline Booth, the Commander of the Salvation Army, "In New York before prohibition, the Salvation Army would collect from 1,200 to 1,300 drunkards in a single night and seek to reclaim them.
Prohibition immediately reduced the gathering to 400 and the proportion of actual drunkards from 95 per cent to less than 20 per cent".
And "a decrease of two thirds in the number of derelicts, coupled with a decrease in the number of drunkards almost to the Vanishing point, certainly lightened crime and charity bills.
It gave many of the erstwhile drunkards new hope and a new start".
So says E. E. Covert, in an interesting article on Prohibition.
The ubiquity of alcohol in the United States has led to nationwide sample studies and they make startling disclosures from a criminological angle.
For instance, in Washington, D.C. 76.5 % of all arrests in 1965 were for drunkenness, disorderly conduct and vagrancy, while 76.7% of the total arrests in Atlanta were for these reasons(1) Of the 8 million arrests in 1970 almost one third of these were alcohol related.
Alcohol is said to affect the lives of 9 million persons (1) Society, Crime and Criminal Careers by Don C. Gibbons p. 427 428.
132 and to cost 10 billion in lost work time and an additional 15 billion health and welfare costs. ' '(1) Richard D. Knudten stated "Although more than 35% of all annual arrests in the United States are for drunkenness, additional persons committing more serious crimes while intoxicated are included within the other crime categories like drunken driving, assault, rape and murder.(2) President Brezhnev bewailed the social maladies of increasing alcoholism.
Nikita Krushchev was unsparing: "Drunks should be 'kicked out of the party ' not moved from one responsible post to another.
"(3) Abraham Lincoln, with conviction and felicity said that the use of alcohol beverages had many defenders but no defence and intoned: "Whereas the use of intoxicating liquor as a beverage is productive of pauperism, degradation and crime, and believing it is our duty to discourage that which produces more evil than good, we, therefore, pledge ourselves to abstain from the use of intoxicating liquor as a beverage.
"(4) In his famous Washington 's birthday address said: "Whether or not the world would be vastly benefited by a total and final banishment from it of all intoxicating drinks seems to me not now an open question.
Three fourths of mankind confess the affirmative with their lips, and I believe all the rest acknowledge it in their hearts.
"(5) Jack Hobbs, the great cricketer, held: "The greatest enemy to success on the cricket field is the drinking habit." And Don Bradman, than whom few batsmen better wielded the willow, encored and said: "Leave drink alone.
Abstinence is the thing that is what made me.
"(6) (1) Current perspectives on Criminal Behaviour edited by Abraham S Blumberg P.23.
(2) crime in a complex society by Richard D. Knudten P.138.
(3) Report of the study Team on Prohibition Vol.
L. P. 344.
(4) Ibid p.34s.
(5) Ibid p.345.
(6) Report of the Study Team on Prohibition vol.
I. P.347.
133 Sir Andrew Clark, in Lachrymal language spun the lesson from hospital beds: "As I looked at the hospital wards today and saw that seven out of ten owed their diseases to alcohol, I could but lament that the teaching about this question was not more direct, more decisive, more home thrusting than ever it had been.
"(1) George Bernard Shaw, a provocative teetotaller, used tart words of trite wisdom. 'If a natural choice between drunkenness and sobriety were possible, I would leave the people free to choose.
But then I see an enormous capitalistic organisation pushing drink under people 's noses of every corner and pocketing the price while leaving me and others to pay the colossal damages, then I am prepared to smash that organisation and make it as easy for a poor man to stay sober, if he wants to as it is for his dog.
Alcohol robs you of that last inch of efficiency that makes the difference between first rate and second rate.
I don 't drink beer first, because I don 't like it; and second, because my profession is one that obliges me to keep in critical training, and beer is fatal both to training and to criticism.
only teetotallers can produce the best and sanest of which they are capable.
Drinking is the chloroform that enables the poor to endure the painful operation of living.
It is in the last degree disgraceful that a man cannot pro vide his own genuine courage and high spirits without drink.
I should be utterly ashamed if my soul had shrivelled up to such an extent that I had to go out and drink a whisky.
(2) The constitutional test of reasonableness, built into article 19 and of arbitrariness implicit in article 14, has a relativist touch.
We have to view the impact of alcohol and temperance on a given society; and (1) Ibid P. 347.
(2) Report of the study Team on Prohibition Vol.
I P. 346.
134 for us, the degree of constitutional restriction and the strategy of meaningful enforcement will naturally depend on the Third World setting, the ethos of our people, the economic compulsions of today and of human tomorrow.
Societal realities shape social justice.
While the universal evil in alcohol has been indicated the particularly pernicious consequence of the drink evil in India may be useful to R r remember while scanning the.
rationale of an Indian temperance measure.
Nearly four decades ago, Gandhiji, articulating the inarticulate millions ' well being, wrote: "The most that tea and coffee can do is to cause a little extra expense, but one of the most greatly felt evils of the British Rule is the importation of alcohol. that enemy of mankind, that curse of civilisation in some form or an other.
The measure of the evil wrought by this borrowed habit will be properly gauged by the reader when he is told that the enemy has spread throughout the length and breadth of India, in spite of the religious prohibition for even the touch of a bottle containing alcohol pollutes the Mohammedan, according to his religion, and the religion of the Hindu strictly prohibits the use of alcohol in any form whatever, and yet alas ! the Government, it seems, instead of stopping, is aiding and abetting the spread of alcohol.
The poor there, as everywhere, are the greatest sufferers.
It is they who spend what little they earn in buying alcohol instead of buying good food and other necessaries It is that wretched poor man who has to starve his family, who has to break the sacred trust of looking after his children, if any, in order to drink himself into misery and premature death.
Here be it said to the credit of Mr. Caine, the ex Member for Barrow, that, he undaunted, is still carrying on his admirable crusade against the spread of the evil, but what can the energy of one man, however, powerful, do against the inaction of an apathetic and dormant Government.
"(1) Parenthetically speaking, many of these thoughts may well be regarded by Gandhians as an indictment of governmental policy even to day.
The thrust of drink control has to be studied in a Third World country, developing its; human resources and the haven if offers to the poor, especially their dependents.
Gandhiji again: "For me the drink question is one of dealing with a growing social evil against which the State is bound to (1) The Collected Works of Mahatma Gandhi pp.29 30 135 provide whilst it has got the opportunity.
The aim is patent.
We want to wean the labouring population and the Harijans from the curse.
It is a gigantic problem, and the best resources of all social workers, especially women, will be taxed to the utmost before the drink habit goes.
The prohibition I have adumbrated is but the beginning (undoubtedly indispensable) of the reform.
We cannot reach the drinker so long as he has the drink ship near his door to tempt him ' '(l) Says Dr. Sethna in his book already referred to: "And in India, with the introduction of prohibition we find a good decline in crime.
There are, however, some per sons who cannot do without liquor.
Such persons even so to the extent of making illicit liquor and do not mind drinking harmful rums and spirits.
The result is starvation of children at home, assaults and quarrels between husband and wife, between father and child, desertion, and other evils resulting from the abuse of alcohol.
The introduction of prohibition in India actually caused considerable fall in the number of crimes caused by intoxication.
Before prohibition one often had to witness the miserable spectacle of poor and Ignorant persons mill hands.
Labourers, and even the unemployed with starving families at home frequenting the pithas (liquor and adulterated toddy shops) drinking burning and harmful spirits, and adulterated toddy, which really had no vitamin value; these persons spent the little they earned after a hard day 's toil, or what little that had remained with them or what they had obtained by some theft, trick, fraud or a borrowing they spent away all that, and then, at home, left wife and children starving and without proper clothes, education, and other elementary necessaries of life.
"(2) (emphasis added) The Labour Welfare Department or the State Governments and of the Municipalities are rendering valuable service, through their labour welfare officers who work at the centres assigned to them, impressing upon the people how the use of alcohol is ruinous and instructing them also how to live hygienically; there are lectures on the evils of drug and drink habits.
(1) The Collected Works of Mahatma Gandhi, Vol.
(2) Society and the Criminal by M. J. Sethna 3rd Edn.
p. 165, 166 & 168 169.
136 Partial prohibition of hot country liquors was introduced by the Congress Ministries in Bombay, Bihar, Madras (in Salem, Chittor, Cuddaph and North Arcot Districts) when they first came into power.
In C. P. and Berar, prohibition covered approximately one fourth of the area and population of the State.
In Assam, prohibition is directed mainly against opium.
In Deccan Hyderabad on 3rd January, 1943, a Firman as issued by his Exalted Highness the Nizam, supporting the temperance movement.
Jammu and Kashmir came also on the move towards prohibition.
Since 1949 State Governments determined the policy of introduction of total prohibition.
On April 10, 1948, the Central Advisory Council for Railways, under the Chairmanship of the Hon 'ble Dr. John Matthai, agreed to the proposal to ban the serving of liquor in refreshment rooms at railway stations and dining cars.
In Madras, prohibition was inaugurated on 2nd October 1948, by the Premier.
the Hon 'ble Mr. O. P. Ramaswami Reddiar who pronounced it a red letter day.
In 1949, West Punjab took steps for the establishment of prohibition.
In 1949, nearly half the area of the Central Provinces and Berar got dry, and it was proposed to enforce prohibition throughout the State.
In Bombay the Prohibition Bill was passed and became Act in 1949, and Bombay got dry by April 1950.
The number of offences; under the Abkari Act is notoriously high.
It shows the craving of some persons for liquor in spite of all good efforts of legal prohibition.
The remedy lies in making prohibition successful through education (even at the school stage), suggestion re education.
The Tek Chand Committee(1) surveyed the civilizations from Babylon through China, Greece, Rome and India.
X rayed the religions of the world and the dharmasastras and concluded from this conspectus that alcoholism was public enemy.
Between innocent first sour sip and nocent never stop alcoholism only time is the thin partition and, inevitability the sure nexus, refined arguments to the contrary notwithstanding(2).
In India, some genteel socialities have argued for the diplomatic pay off from drinks and Nehru has negatived it: (1) Report of the Study Team on Prohibition.
(2) Ibid p. 345.
137 "Not only does the health of a nation suffer from this (alcoholism), but there is a tendency to increase conflicts both in the national and the international sphere.
" I must say that I do not agree with the statement that is sometimes made even by our ambassadors that drinks attract people to parties and if there are no drinks served people will not come.
I have quite B: frankly told them that if people are only attracted by drinks, you had better keep away such people from our missions.
I do not believe in this kind of diplomacy which depends on drinking. and, if we have to indulge in that kind of diplomacy, others have had more training in it and are like to win.(1) Of course, the struggle for Swaraj went beyond political liberation and demanded social transformation.
Redemption from drink evil was woven into this militant movement and Gandhiji was the expression of this mission.
"I hold drink to be more damnable than thieving and perhaps even prostitution.
Is it not often the parent to both ? I ask you to join the country in sweeping out of existence the drink revenue and abolishing the liquor shops.
Let me, therefore, re declare my faith in undiluted prohibition before I land my self in deeper water.
If I was appointed dictator for one hour for all India, the first thing I would do would be to close without compensation all the liquor shops destroy all the toddy palms such as I know them in Gujarat, compel factory owners to produce humane conditions for the workmen and open refreshment and recreation rooms where these workmen would get innocent drinks and equally innocent amusements.
I would close down the factories if the owners pleaded for want of funds.
"(2) It has been a plank in the national programme since 1920.
It is coming, therefore, in due fulfillment of the national will definitely expressed nearly twenty years ago.(3) Sociological Journey to interpretative Destination.
This long excursion may justly be brought to a close by an off repeated but constitutionally relevant quotation from Field, J. irresistible attractive for fine spun feeling and exquisite expression.
"There is in this position an assumption of a fact which does not exist, that when the liquors are taken in excess the injuries are confined to the party offending.
The injury, if it is true, first falls upon (1) Report of the Study Team on prohibition Vol.
I P. 345.
(2) Ibid P. 344.
(3) Collected Works of Mahatma Gandhi Vol.
10 520SCI/78 138 him in his health, which the habit undermines; in his morals, which it weakens; and in the self abasement which it creates.
But as it leads to neglect of business and waste of property and general demoralization, it affects those who are immediately connected with or dependent upon him.
By the general concurrence of opinion of every civilised and Christian community, there are few sources of crime and misery to society equal to the dram shop, where intoxication liquors, in small quantities, to be drunk at the time, are sold indiscriminately to all parties applying.
The statistics of every State show a greater amount of crime and misery attributable to the use of ardent spirits obtained at those retail liquor saloons than to any other source.
The sale of such liquors in this way has therefore, been, at all times, by the courts of every State, considered as the proper subject of legislative regulation.
Not only may a licence be exacted from the keeper of the saloon before a glass of his liquors can be thus disposed of.
but restrictions may be imposed as to the class of persons to whom they may be sold, and the hours of the day, and the days of the week, on which the saloons may be opened.
Their sale in that form may be absolutely prohibited.
It is a question of Public Expediency and public morality, and not of federal law.
The police power of the State fully competent to regulate the business to mitigate its evils or to suppress it entirely, there is no inherent right in a citizen to thus sell intoxicating liquors by retail, it is not a privilege of a citizen of the State or of a citizen of the United States.
As it is a business attended with danger to the community, it may as already said, be entirely prohibited, or be permitted under such conditions as will limit to the utmost its evils.
The manner and extent of regulation rest in the discretion of the Governing authority.
That authority may vest in such officers as it may deem proper and power of passing upon applications for permission to carry it on, and to issue licenses for that purpose.
It is a matter of legislative will only.
"(1) The Panorama of views, insights and analyses we have tediously.
projected serves the sociological essay on adjudicating the reasonableness and arbitrariness of the impugned shut down order on Tuesdays and Fridays.
Whatever our personal views and reservations on the philosophy, the politics, the economics and the pragmatics of prohibition, we are called upon to pass on the vires of the amended order.
"We, the people of India ', have enacted article 47 and 'we, the Justices of India ' cannot 'lure it back to cancel half a life ' or 'wash out a word of it ', especially when progressive implementation of the policy of prohibition is, by Articles 38 and 47 made fundamental to the country 's governance.
The Constitution is the property of the people (1) Crowely vs Christensen, ; , 623.
139 and the courts know how is to apply the constitution, not to assess it.
In the process of interpretation, Part IV of the Constitution must enter the soul of Part III and the laws, as held by the Court in State of Kerala & Anr.
vs N. M. Thomas & Ors.(1) and earlier.
The dynamics of statutory construction, in a country like ours, where the pre Independence Legislative package has to be adapted to the vital spirit of the Constitution, may demand that new wine be poured into old bottles, language permitting.
We propound no novel proposition and recall the opinion of Chief Justice Winslow of Wisconsin upholding as constitutional a Workmen 's Compensation Act of which he said: "when an eighteenth century constitution forms the charter of liberty of a twentieth century government, must its general provisions be construed and interpreted by an eighteenth century mind surrounded by eighteenth century conditions and ideals ? Clearly not.
This were a command of half the race in its progress, to stretch the state upon a veritable bed of Procrustes.
Where there is no express command or prohibition, but only general language of policy to be considered, the conditions prevailing at the time of its adoption must have their due weight hut the changed social, economic and governmental conditions of the time, as well as the problems which the changes have produced, must also logically enter into the consideration and become influential factors in the settlement of problems of construction and interpretation.
"(2) In short, while the imperial masters were concerned about the revenues they could make from the liquor trade they were not indifferent to the social control of this business which, if left unbridled, was fraught with danger to health, morals, public order and the flow of life without stress or distress.
Indeed even collection of revenue was intertwined with orderly milieu; and these twin objects are reflected in the scheme and provisions of the Act.
Indeed, the history of excise legislation in this country has received judicial attention earlier and the whole position has been neatly summarised by Chandrachud J. (as he then was) if we may say so with great respect, as a scissor and paste operation is enough for our purpose: (1) [1976] I S.C.R. 906.
(2) Borgnis vs The Falk Co. 147 Wisconsin Reports P. 327 at 348 et See (1911).
That this doctrine is to be deemed to apply only to "due process ' and "police Power" determinations, see especially concurring opinions of Marshalle, and Barness, J. 140 "Liquor licensing has a long history.
Prior to the passing of the Indian Constitution, the licensees mostly restricted their challenge to the demand of the Government as being in excess of the condition of the licence or on the ground that the rules in pursuance of which such conditions were framed were themselves beyond the rule making power of the authority concerned.
The provisions of the Punjab Excise Act, 1914, like the provisions of similar Acts in force in other States, reflect the nature and the width of the power in the matter of liquor licensing.
We will notice first the relevant provisions of the Act under consideration.
Section S of the Act empowers the State Government to regulate the maximum or minimum quantity of any intoxicant which may be sold by retail or wholesale.
Section 8(a) vests the general superintendence and administration of all matters relating to excise in the Financial Commissioner, subject to the control of the State Government.
Section 16 provides that no intoxicant shall be imported, exported or transported except after payment of the necessary duty or execution of a bond for such payment and in compliance with such conditions as the State Government may impose.
Section 17 confers upon the State Government the power to prohibit the import or export of any intoxicant into or from Punjab or any part thereof and to prohibit the transport of any intoxicant.
By section 20(1) no intoxicant can be manufactured or collected, no hemp plant can be cultivated no tari producing tree can be tapped, no tari can be drawn from any tree and no person can possess any material or apparatus for manufacturing an intoxicant other than tari except under the authority and subject.
to the terms and conditions of a licence granted by the Collector.
By sub section (2) of section 20 no distillery or brewery can be constructed or worked except under the authority and subject to the terms and conditions of a licence granted by the Financial Commissioner.
Section 24 provides that no person shall have in his possession any intoxicant in excess of such quantity as the State Government declares to be the limit of retail sale, except under the authority and in accordance with the terms and conditions of a licence or permit.
Sub section (4) of section 24 empowers the State Government to prohibit the posses 141 sion of any intoxicant or restrict its possession by imposing such conditions as it may prescribe.
Section 26 prohibits the sale of liquor except under the authority and subject to the terms and conditions of a licence granted in that behalf.
Section 27 of the Act empowers the State Government to "lease" on such conditions and for such period as it may deem fit or retail, any country liquor or intoxicating drug within any specified local area.
On such lease being granted the Collector, under sub section (2), has to grant to the lessee a licence in the form of his lease.
Section 34(1) of the Act provides that every licence, permit or pass under the Act shall be granted (a) on payment of such fees, if any, (b) subject to such restrictions and on such conditions, (c) in such form and containing such particulars, and (d) for such period as the Financial Commissioner may direct.
By section 35(2), before any licence is granted for the retail sale of liquor for consumption on any premises the Collector has to ascertain local public opinion in regard to the licensing of such premises.
Section 36 confers power on the authority granting any licence to cancel or suspend it if, inter alia; any duty or fee payable thereon has not been duly paid.
Section 56 of the Act empowers the State Government to exempt any intoxicant from the provisions of the Act.
By section 58 the State Government may make rules for the purpose of carrying out the provisions of this Act.
Section 59 empowers the Financial Commissioner by clause (a) to regulate the manufacture, supply, storage or sale of any intoxicant.
xxx xxx xx The Prohibition and Excise Laws in force in other States contain provisions substantially similar to those contained in the Punjab Excise Act.
Several Acts passed by State Legislatures contain provisions rendering it unlawful to manufacture export, import, transport or sell intoxicating liquor except in accordance with a licence, permit or pass granted in that behalf.
The Bombay Abkari Act 1878; the Bombay Prohibition Act 1949, the Bengal Excise Acts of 1878 and 1909; the Madras Abkari Act 1886; 142 the Laws and Rules contained in the Excise Manual United Province, the Eastern Bengal and Assam Excise Act 1910; the Bihar and orissa Excise Act 1915; the Cochin Abkari Act as amended by the Kerala Abkari Laws Act 1964; the Madhya Pradesh Excise Act 1915, are instances of State legislation by which extensive powers are conferred on the State Government in the matter of liquor licensing.
(1) In this background, let us read section 59(f)(v) and Rule 37 before and after the impugned amendment: "59(f)(v).
The fixing of the days and hours during which any licensed premises may or may not be kept open, and the closure of such premises on special occasions; Rule 37(9).
Conditions dealing with licensed hours Every licensee for the sale of liquor shall keep his shop closed on the seventh day of every month, on all Tuesdays upto 2 p.m.
On Republic day (26th January), on Independence day (15th August), on Mahatma Gandhi 's birthday (2nd October) and on such days not exceeding three in a year as may be declared by the Government in this behalf.
He shall observe the following working hours.
hereinafter called the licensed hours, and shall not, without the sanction of the Excise Commissioner, Punjab or other competent authority, keep his shop open outside these hours The licensed hours shall be as follows: xx xx xx After amendment 37(9).
Conditions dealing with licensed hours.
Every licensee for the sale of liquor shall keep his shop closed on every Tuesday and Friday, on Republic Day (26th January), on Independence day (15th August), on Mahatma Gandhi 's birthday (2nd October) and on such days not exceeding three in a year as may be declared by the Government in this behalf.
He shall observe the following working hours, hereinafter called the licensed hours, and shall not, without the sanction of the Excise (1) Har Shankar & Ors. etc.
vs Dy.
Excise & Taxation Commr. and ors.
[1975 ], 3 S.C.R. 254 at 266 267. 143 Commissioner, Punjab or other competent authority, keep his shop open outside these hours.
The licensed hours shall be as follows: * * * Note: The condition regarding closure of liquor shops on very Tuesday and Friday shall not be applicable in the case of licenses of tourist bungalows and re sorts being run by the Tourism Department of the State Government.
Before formulating the contentions pressed before us by Shri A. K. Sen, Shri Mahajan and Shri Sharma, we may mention that Shri Seth, one of the Advocates who argued innovatively, did contend that the Act was beyond the legislative competence of the State and if that tall contention met with our approval there was nothing more to be done.
To substantiate this daring submission the learned counsel referred us to the entries in the Seventh Schedule to the Constitution.
All that we need say is that the argument is too abstruse for us to deal with intelligibly.
To mention the plea is necessary but to chase it further is supererogatory.
The main contention The primary submission proceeded on the assumption that a citizen had a fundamental right to carry on trade or business in intoxicants.
The learned Addl.
Solicitor General urged that no such fundamental right could be claimed, having regard to noxious substances and consequences involved and further contended that, notwithstanding the observations of Subba Rao, C.J. in Krishna Kumar Narula etc.
vs The State of Jammu & Kashmir & ors.(I) the preponderant view of this Court, precedent and subsequent to the 'amber ' observations in the aforesaid decision, has been that no fundamental right can be claimed by a citizen in seriously obnoxious trades, offensive businesses or outraging occupations like trade in dangerous commodities, trafficking in human flesh, horrifying exploitation or ruinous gambling.
Even so, since the question of the fundamentality of such right is before this Court in other batches of writ petitions which are not before us, we have chosen to proceed on the footing, arguendo, that there is a fundamental right in liquor trade for the petitioners.
Not that we agree nor that Shree Sorabjee concedes that there is such a right but that, (1) [1961] S S.C.R. SO. 144 for the sake of narrowing the scope of the colossal number of writ petitions now before us, this question may well be skirted.
The Bench and the Bar have, therefore, focussed attention on the vires of the provision from the standpoint of valid power of regulation of the liquor trade vis a vis unreasonableness, arbitrariness and vacuum of any indicium for just exercise.
Essentially, the point pressed was that section 59(f)(v) vested an unguided, uncanalised, vague and vagarious power in the Financial Commissioner to fix any days or number of days and any hours or number of hours as his fancy or humour suggested.
There were no guidelines, no indicators, no controlling points whereby the widely worded power of the Excise Commissioner on whom Government has vested the power pursuant to Sec. 9) should be geared to a definite goal embanked by some clear cut policy and made accountable to some relevant principle.
Such a plenary power carried the pernicious potential for tyrannical exercise in its womb and would be still born, judged by our constitutional values.
If the power is capable of fantastic playfulness or fanciful misuse it is unreasonable, being absolute, tested by the canons of the rule of law.
And if, arguendo, it is so unreasonably wide as to imperil the enjoyment of a fundamental right it is violative of article 19(1)(g) and is not saved by article 19(6).
Another facet of the same submission is that if the provision is an arbitrary armour, the power wielder can act nepotistically, pick and choose discriminatorily or gambol goodily.
Where a law permits discrimination, huff and humour, the guarantee of equality becomes phoney, flimsy or illusory article 14 is outraged by such a provision and is liable to be quashed for that reason.
An important undertaking by the State We must here record an undertaking by the Punjab Government and eliminate a possible confusion.
The amended rule partially prohibits liquor sales in the sense that on Tuesdays and Fridays no hotel, restaurant or other institution covered by it shall trade in liquor.
But this prohibition is made non applicable to like institutions run by the Government or its agencies.
We, prima face, felt that this was discriminatory on its face.
Further, article 47 charged the State with promotion of prohibition as a fundamental policy and it is indefensible for Government to enforce prohibitionist restraints on others and itself practise the opposite and betray the constitutional mandate.
It suggests dubious dealing by State Power.
Such hollow homage to article 47 and the Father of the nation gives diminishing credibility mileage in a democratic polity The learned Additional Solicitor General, without going into the correctness of propriety of 145 our initial view probably he wanted to controvert or clarify readily agreed that the Tuesday Friday ban would be equally observed by the State organs also.
The undertaking recorded, as part of the proceddings of the Court, runs thus: "The Additional Solicitor General appearing for the State of Punjab states that the Punjab State undertakes to proceed on the footing that the 'Note ' is not in force and that they do not propose to rely on the 'Note ' and will, in regard to tourist bungalows and resorts run by the Tourism Department of the State Government observe the same regulatory provision as is contained in the substantive part of Rule 37 Sub rule 9.
We accept this statement and treat it as an undertaking by the State.
Formal steps for deleting the 'Note ' will be taken in due course." Although a Note can be law, here the State concedes that it may not be treated as such.
Even otherwise, the note is plainly severable and the rule independently viable.
Shri A. K. Sen who had raised this point at the beginning allowed it to fade out when the State 's undertaking was brought to his notice.
The vice of discrimination, blotted out of the law by this process, may not be sufficient, if the traditional approach were to be made to striking down; but if restructuring is done and the formal process delayed, there is no reason to quash when the correction is done.
Courts try to save, not to scuttle, when allegiance to the Constitution is shown.
In short, Tuesdays and Fridays, so long as this rule remains (as modified in the light of the undertaking) shall be a holiday for the liquor trade in the private Or public sector throughout the State.
We need hardly state that if Government goes back on this altered law the consequences may be plural and unpleasant.
Of course, we do not expect, in the least, that any such apprehension will actualise.
one confusion that we want to clear up is that even if section 59 and Rule 37 were upheld in toto that does not preclude any affected party from challenging a particular executive act pursuant thereto on the ground that such an act is arbitrary, mala fide or unrelated to the purposes and the guidelines available in the Statute.
If, for instance, the Financial Commissioner or the Excise Commissioner, as the case may be declares that all liquor shops shall be opened on his birthday or shall remain closed on his friend 's death anniversary, whatever our pronouncement on the vires of the impugned provisions, the executive order will be sentenced to death.
The law may be good, the act may be corrupt and then it cannot be saved.
146 The only question seriously canvassed before us is as to whether the power under section 59(f)(v) unguided and the rule framed there under is bad as arbitrary.
We will forthwith examine the soundness of that proposition.
An irrelevant controversy consumed some court time viz., that the two day shut down rule meant that a substantial portion of the year for which the licence was granted for full consideration would thus be sliced off without compensation.
This step was iniquitous and inflicted loss and was therefore 'unreasonable ' therefore void.
The Additional Solicitor General refuted this charge on facts and challenged its relevance in law.
We must not forget that we are examining the vires of a law, not adjudging a breach of contract and if on account of a legislation a party sustains damages or claims a refund that does not bear upon the vires of the provision but be longs to another province.
Moreover, the grievance of the petitioners is mere 'boloney ' be cause even their licence fee has been reduced under the amended rule to compensate, as it were, for the extra closure of a day or so.
We do not delve into the details nor pronounce on it as it is not pertinent to constitutionality.
But a disquieting feature of the rule, in the background of the purpose of the measure, falls to be noticed.
Perhaps the most significant social welfare aspect of the closure is the prevention of the ruination of the poor worker by drinking down the little earnings he gets on the wage day.
Credit sales are banned and cash sales spurt on wage days.
Any Government, with workers ' weal and their families ' survival at heart, will use its police power ' under article 19(6) read with Sec.
59(f)(v) of the Act to forbid alcohol sales on pay days.
Wisely to save the dependent women and children of wage earners the former unamended rule had forbidden sales on the seventh day of every month (when, it is well known, the monthly pay packet passes into the employees ' pocket).
To permit the tavern or liquor bar to transact business that tempting days is to abet the dealer who picks the pocket of the vulnerables and betray the Gandhian behest.
And yet, while bringing in the Tuesday Friday forbiddance of sales, the ban on sales on the seventh of every month was entirely deleted an oblique bonus to the liquor lobby, if we look at it sternly, an unwitting indiscretion, if we view it indulgently.
The victims are the weeping wives and crying children of the workers.
All power is a trust and its exercise by governments must be subject to social audit and Judas exposure. 'For whom do the constitutional bells toll ? ' this court asked in an earlier 147 judgment relating to Scheduled Castes.(1) We hope Punjab will rectify the error and hearten the poor in the spirit of article 47 and not take away by the left hand what the right hand gives.
We indicated these thoughts in the course of the hearing so that no one was taken by surprise.
Be that as it may, the petitioner can derive no aid and comfort from our criticisms which are meant to alert the parliamentary auditors of subordinate legislation in our welfare 1 State.
The Scheme and the subject matter supply the guidelines We come to the crux of the matter.
Is Section 59(f)(v) 'bad for want of guidelines ? Is it over broad or too bald ? Does it lend itself to naked, unreasonable exercise? We were taken through a few rulings where power without embankments was held bad.
They related to ordinary items like coal or restrictions where guidelines were blank.
Here, we are in a different street altogether.
The trade is instinct with injury to individual and community and has serious side effects recognised everywhere in every age.
Not to control alcohol business is to abdicate the right to rule for the good of the people.
Not to canalise the age and sex of consumers and servers, the hours of sale and cash and carry basis, the punctuation and pause in days to produce partially the 'dry ' habit is to fail functionally as a welfare State.
The whole scheme of the statute proclaims its purpose of control in time and space and otherwise.
Section 58 vests in Government the power for more serious restrictions and laying down of principles.
Details and lesser constraints have been left to the rule making power of the Financial Commissioner.
The complex of provisions is purpose oriented, considerably reinforced by article 47.
Old statutes get invigorated by the Paramount Parchment.
Interpretation of the text of pre constitution enactments can legitimately be infused with the concerns and commitments or the Constitution, as an imperative exercise.
Thus, it is impossible to maintain that no guidelines are found in the Act.
We wholly agree with the learned Additional Solicitor General that the search for guidelines is not a verbal excursion.
The very .
subject matter of the statute intoxicants eloquently impresses the Act with a clear purpose, a social orientation and a statutory strategy.
If bread and brandy are different the point we make argues itself.
The goal IS promotion of temperance and, flowing there out, of sobriety, public order, individual health, crime control, medical bills, family welfare, curbing of violence and tension, restoration of the addict 's mental, moral and physical personality and interdict on (1) [1977] 1.S.C.R. 906.
148 impoverishment, in various degrees, compounded.
We have extensively quoted supportive literature; and regulation of alcohol per se furnishes a definite guideline.
If the Section or the Rule intended to combat an evil is misused for a perverse, ulterior or extraneous object that action, not the law, will be struck down.
In this view, discrimination or arbitrariness is also excluded.
A final bid to stigmatize the provision [Sec. 59 (f)(v)] was made by raising a consternation.
The power to fix the days and hours is so broad that the authority may fix six out of seven days or 23 out of 24 hours as 'dry ' days or closed hours and thus cripple the purpose of the licence.
This is an ersatz apprehension, a caricature of the provision and an assumption of power run amok.
An Abkari law, as here unfolded by the scheme (chapters and Sections further amplified by the rules framed thereunder during the last 64 years) is not a Prohibition Act with a mission of total prohibition.
The obvious object is a to balance temperance with tax, to condition and curtail consumption without liquidating the liquor business, to experiment with phased and progressive projects of prohibition without total ban on the alcohol trade or individual intake.
The temperance movement leaves the door half closed, not wide, ajar; the prohibition crusade banishes wholly the drinking of intoxicants.
So it follows that the limited temperance guideline writ large in the Act will monitor the use of the power.
Operation Temperance, leading later to the former, may be a strategy within the scope of the Abkari Act.
Both may be valid but we do not go into it.
Suffice it to say that even restrictions under article 19 may, depending on situations, be pushed to the point of prohibition consistently with reasonableness.
The chimerical fear that 'fix the days ' means even ban the whole week, is either pathological or artificial, not certainly real under the Act.
We are not to be understood to say that a complete ban is without the bounds of the law it turns on a given statutory scheme.
While the police power as developed in the American jurisprudence and constitutional law, may not be applicable in terms to the Indian Constitutional law, there is much that is common between that doctrine and the reasonableness doctrine under article 19 of the Indian Constitution.
Notes an American Law Journal: "The police power has often been described as the "least limitable" of the governmental powers.
An attempt to define its reach or trace its outer limits is fruitless for each case turns upon its own facts.
The police power must be used to promote the health, safety, or general welfare of the public, and the exercise of the power must be 149 "reasonable".
An exercise of the police power going beyond these basic limits is not constitutionally permissible.
Noxious Use Theory: .
This theory upholds as valid any regulation of the use of property, even to the point of total destruction of value, so long as the use prohibited is harmful to others.
" (1) In a Law Review published from the United States 'police power ' with reference to intoxicant liquors has been dealt with and is instructive: "Government control over intoxicating liquors has long been recognized as a necessary function to protect society from the evils attending it.
Protection of society and not the providing of a benefit of the license holder is the chief end of such laws and regulations.
There is no inherent right in a citizen to sell intoxicating liquors as retail.
It is a business attended with danger to the community and it is recognised everywhere as a subject of regulation.
" As to the legislative power to regulate liquor, the United States Supreme Court has stated: "If the public safety or the public morals require the discontinuance of the manufacture or traffic (of intoxicating liquors) the hand of the legislature cannot be stayed from providing for its discontinuance, by any incidental inconvenience which individuals or corporations may suffer." The States have consistently held that the regulation of intoxicants is a valid exercise of its police power.
The police power stands upon the basic principle that some rights must be and are surrendered or modified in entering into the social and political state as indispensible to the good government and due regulation and well being of society.
In evaluating the constitutionality of a regulation within the police power, validity depends on whether the regulation is designed to accomplish a purpose within the scope of that power.
"(2) (1) South Western Law Journal Annual Survey of Texas Law, vol. 30 No. I, Survey 1976 pp.
725 26.
(2) Idaho Law Review, Vol. 7, 1970 p. 131.
150 It is evident that there is close similarity in judicial thinking on the subject.
This has been made further clear from several observations of this Court in its judgments and we may make a reference to a recent case, Himmatlal, and a few observations therein: "In the United States of America, operators of gambling sought the protection of the commerce clause.
But the Court upheld the power of the Congress to regulate and control the same.
Likewise, the pure Food Act which prohibited the importation of adulterated food was upheld.
The prohibition of transportation of women for immoral purposes from one State to another or to a foreign land was held valid.
Gambling itself was held in great disfavour by the Supreme Court which roundly stated that 'there is no constitutional right to gamble`.
Das, C.J., after making a survey of judicial thought, here and abroad, opined that freedom was unfree when society was exposed to grave risk or held in ransom by the operation of the impugned activities.
The contrary argument that all economic activities were entitled to freedom as 'trade ' subject to reasonable restrictions which the Legislature might impose, was dealt with by the learned Chief Justice in a sharp and forceful presentation; "on this argument it will follow that criminal activities undertaken and carried on with a view to earning profit will be protected as fundamental rights until they are restricted by law.
Thus there will be a guaranteed right to carry on a business of hiring out goodness to commit assault or even murder, of house breaking, of selling obscene pictures, of trafficking in women and so on until the law curbs or stops such activities.
This appears to us to be completely unrealistic and incongruous.
We have no doubt that there are certain activities which can under no circumstances be regarded as trade or business or commerce although the usual forms and instruments are employed therein.
To exclude those activities from the meaning of those words is not to cut down their meaning at all but to say only that they are not within the true meaning of those words.
Learned Counsel has to concede that there can be no 'trade ' or business in crime but submits that this principle should not be extended . " (1) Fatehchand Himmatlal vs Maharashtra ; at 839 840.
151 We have no hesitation, in our hearts and our heads, to hold that every systematic, profit oriented activity, how ever sinister, suppressive or socially diabolic, cannot, ipso facto, exalt itself into a trade.
Incorporation of Directive principles of State policy casting the high duty upon the State to strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice social, economic and political shall inform all the institutions of the national life, is not idle print but command to action.
We can never forget, except at our peril, that the Constitution obligates the State to ensure an adequate means of livelihood to its citizens and to sec that the health and strength of workers men and women, are not abused, that exploitation, normal and material, shall be extradited.
In short State action defending the weaker sections from social injustice and all forms of exploitation and raising the standard of living of the people, necessarily imply that economic activities, attired as trade or business or commerce, can be de recognised as trade or business.
At this point, the legal culture and the public morals of a nation may merge, economic justice and taboo of traumatic trade may meet and jurisprudence may frown upon day dark and deadly dealings.
The Constitutional refusal to consecrate exploitation as 'trade ' in a socialist Republic like ours argues itself.
" A precedentral approach to the ultra vires argument.
The single substantive contention has incarnated as triple constitutional infirmities.
Counsel argued that the power to make rules fixing the days and hours for closing or keeping open liquor shops was wholly unguided.
Three invalidatory vices flowed from this single flaw viz. (i) excessive delegation of legislative power, (ii) unreasonable restriction on the fundamental right to trade in intoxicants under article 19(1) (g), and (iii) arbitrary power to pick and choose, inherently violative of article 14.
Assuming the legality of the triune lethal blows, the basic charge of uncanalised and naked power must be established.
We have already held that the statutory scheme is not merely fiscal but also designed to regulate and reduce alcoholic habit.
And, while commodities and situations dictate whether power, in given statutory provisions, is too plenary to be other than arbitrary or is instinct with inherent limitations, alcohol is so manifestly deleterious that the nature of the guidelines is written in invisible ink.
152 A brief reference to a few rulings cited by counsel may not be inept.
It is true that although the enactment under consideration is more than five decades old, its validity can now be assailed on the score of unconstitutionality: "When India became a sovereign democratic Republic on 26th January, 1950, the validity of all laws had to be tested on the touchstone of the new Constitution and all laws made before the coming into force of the Constitution have to stand the test for their validity on the provisions of Part Ill of the Constitution. ' '(1) This is why the principle of excessive delegation, that is to say, the making over by the legislature of the essential principles of legislation to another body, becomes relevant in the present debate.
Under our constitutional scheme the legislature must retain in its own 'hands the essential legislative functions.
Exactly what constitutes the essential legislative functions is difficult to define.
"The legislature must retain in its own hands the essential legislative function.
Exactly what constituted "essential legislative function", was difficult to define in general terms, but this much was clear that the essential legislative function must at least consist of the determination of the legislative policy and its formulation as a binding rule of conduct.
Thus where the law passed by the legislature declares the legislative policy and lays down the standard which is enacted into a rule of law, it can leave the task of subordinate legislation which by its very nature is ancillary to the statute to subordinate bodies, i.e., the making of rules, regulations or bye laws.
The subordinate authority must do so within the frame work of the law which makes the delegation.
and such subordinate legislation has to be consistent with the law under which it is made and cannot go beyond the limits of the policy and standard laid down in the law.
Provided the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere with the discretion that undoubtedly rests with the legislature itself in determining the extent of delegation necessary in a particular case.
"(2) (1) Suraj Mall Mohta and Co.v.
A.V. Visvanatha Sastri and another ; at 457.
(2) Municipal Corporation of Delhi vs Birla Cotton, Spinning and Weaving Mills Delhi & Anr. ; at 261 153 In Vasanthlal Maganbhai Sajanwal vs The State of Bombay(1) the same point was made: "A statute challenged on the ground of excessive delegation must therefore be subject to two tests, (1) whether it delegates essential legislative function or power and (2) WHETHER the legislature has enunciated its policy and principle for the guidance of the delegate.
" Likewise, if the State can choose any day or hour for exclusion as it fancies and there are no rules to fix this discretion, plainly the provision [Sec.59(f)(v)] must offend against Art.14 of the Constitution.
(See Saghir Ahmed 's case)(2) Another aspect of unguided power to affect the citizen 's fundamental rights in the province of article 19 since imposition of unreasonable restrictions on the right lo carry on business is violative of article 19(1)(g).
Patanjali Sastri, C.J., in V. G. Row 's case observed(2) "The test of reasonableness, wherever prescribed should l) applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be Laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent or urgency of the evil sought to be remedied thereby, the disproportion of imposition, the prevailing conditions at the time should enter into the judicial verdict" This Court, in R. M. Seshadri,(4) dealt with unreasonable restrictions on showing of films by theatre owners and struck down the provisions.
Similarly, in Harichand(5) an unreasonable restriction on the right to trade was struck down because the regulation concerned provided no principles nor contained any policy and this Court observed: "A provision which leaves an unbridled power to an authority cannot in any sense be characterised as reasonable.
Section 3 of the Regulation is one such provision and is therefore liable to be struck down as violative of article 19(1)(g)".
(1) (2) ; (3) ; (4) [1955]1 S.C.R. 686.
(S) LALA Hari Chand Sarda vs Mizo District Council & Anr [1967]1 S.C.R. 1012 11 520 SCI/78 154 other decisions in the same strain were cited.
Indeed an annual shower of decisions on this point issues from this Court.
But the essential point made in all these cases is that unchannelled and arbitrary discretion is patently violative of the requirements of reasonableness in article 19 and of equality under article 14, a proposition with which no one can now quarrel.
lt is in the application of these principles that disputes arise as Patanjali Sastri, C.J. clarified early in the day in V. G. Row 's case (cited Supra).
Reasonableness and arbitrariness are not abstractions and must be tested on the touchstone of principle pragmatism and living realism.
It is in this context that the observations of this Court in Nashirwar(1) become decisive.
While considering the soundness of the propositions advanced by the advocate for the petitioners the Additional Solicitor General rightly shielded the statutory provisions i question by drawing our attention to the crucial factor that the subject matter of the legislation was a deleterious substance requiring restrictions in the direction of moderation in consumption.
regulation regarding the days and hours of sale and appropriateness in the matter of the location of the places of sale.
If it is coal or mica or cinema, the test of reasonableness will be stricter, but if it is an intoxicant or a killer drug or a fire arm the restrictions must be stern.
When the public purpose is clear and the policing need is manifest from the nature of the business itself, the guidelines are easy to find.
Shri Mahajan 's reliance on the Coal Control Case( ') or Shri A. K. Sen 's reliance on the Gold Control case (3)is inept.
Coal and gold are as apart from whisky and toddy as cabbages are from kings.
Don 't we feel the difference between bread and brandy in the field of trade control ? Life speaks through Law.
Counsel after counsel has pressed that there is no guideline for the exercise of the power of rule making and the Addl.
Solicitor General has turned to the history, sociology and criminology relating to liquor.
In support of his contention, Shri Soli Sorabjee for the State has drawn our attention to the following passages in Nashirwar which are quoted is extenso because of the persistence of counsel on the other side in pressing their point about unbounded power: "In our country the history of excise shows that the regulations issued between 1790 1800 prohibited manufacture or sale of liquors without a licence from a Collector.
In 1 808 a regulation was introduced in tile Madras Presidency (1) ; (2) ; (3) ; 155 Which provided that the exclusive privilege of manufacturing and selling arrack should be farmed in each district.
In 1820 the law was amended to authorise the treatment of toddy and other fermented liquors in the same way as spirits by allowing Collectors to retain the manufacture and sale under direct management if deemed preferable to farming.
In 1884 a Committee was appointed to investigate the excise system.
The recommendations of the Committee were adopted.
Under the new system the monopoly of manufacture was let separately from that of sale.
The former was granted on condition of payment of a fee per shop or a number of shops, or on payment of a fee determined by auction.
In the Bombay Presidency the monopoly of the retail sale of spirits and the right to purchase spirits was formed.
In 1857 the Government declared its future policy to be the letting by auction of each shop, with its still, separately.
In 1870 71 a change was made.
The rule at that time was that the Collector would fix the number and locality of the different shops and determine their letting value according to the advantages possessed by each.
It was not intended that they should, as a rule, be put up to public competition; but competition might be resorted to by the Collector and taken into account in determining the same at which each would be leased.
This rule remained in force for many years.
The practice of putting the shops up to auction was, thereafter followed.
The history of excise administration in our country before the Independence shows that there was originally the farming system and thereafter the central distillery system for manufacture.
The retail sale was by auction of the right and privilege of sale.
The Government of India appointed an Excise Committee in 1905.
The measures recommended by the Committee were the advances of taxation, the concentration of distillation the extended adoption of the contract distillery system.
The Committee suggested among other things the replacement of the then existing excise law by fresh legislation on the lines of the Madras Abkari Act.
(See Dr. Pramatha Nath Banerjee: History of Indian Taxation P. 470 seq.).
Reference may be made to the Taxation Enquiry Commissioner Report 1953 54 Vol. 3.
At page 130 following there is a discussion of State excises.
Among the major sources of revenue which are available to the State Government there is a duty on alcoholic liquors for human consumption.
At page 132 of the Report it is stated that in addition 156 to the excise duties, licence fees are charged for manufacture or sale of liquor or for tapping toddy trees etc.
Similarly, several fees like permit fees, vend fees, outstill duties are also levied.
Manufacture or sale of liquor is forbidden except under licences which are generally granted by auction to the highest bidders.
The manufacture of country spirit is done in Government distilleries or under the direct supervision of the excise staff.
All supplies are drawn from Government warehouses which ensures that the liquor is not more than of the prescribed strength.
The licensed sellers have to sell the country spirit between fixed hours and at fixed selling rates.
As in the case of country spirit, the right of tapping and selling toddy is also auctioned.
In addition to the licence, in some States the licensee has to pay a tree tax to Government.
Traditionally tobacco, opium and intoxicating liquors have been the subject matter of State monopoly.
(See section IV of the Madras Regulation XXV of 1 802 relating to permanent settlement of land revenue).
Section IV states that the Government having reserved to itself the entire exercise of its discretion in continuing or abolishing, temporarily or permanently, the articles of revenue included, according to the custom and practice of the country, under the several heads inter alia of the abkary, or tax on the sale of spirituous liquors and intoxicating drugs, of the excise on articles of consumption, of taxes personal and professional, as well as those derived from markets, fairs, or bazars.
of lakhiraj lands (or lands exempt from the payment of public revenue), and of all other lands paying only favourable quit rents, the permanent assessment of the land tax shall be made exclusively of the said articles now recited.
The excise revenue arising out of manufacture and sale of intoxicating liquors is one of the sources of State revenue as is customs and excise.
In England sale of intoxicating liquors although perfectly lawful at common law is subject to certain statutory restrictions.
These restrictions are primarily of two kinds; those designed for the orderly conduct of the retail trade and those designed to obtain revenue from the trade r whether wholesale or retail.
Trade in liquor has historically stood on a different footing from other trades.
Restrictions which are not permissible other trades are lawful and reasonable so far as the trade 157 in liquor is concerned.
That is why even prohibition of the trade in liquor is not only permissible but is also reasonable.
The reasons are public morality, public interest and harmful and dangerous character of the liquor.
The State possesses the right of complete control over all aspects of intoxicants, viz., manufacture, collection, sale and consumption.
The State has sight in order to raise revenue.
That is the view of this Court in Bharucha 's case (supra) and jaiswal 's case ( supra) .
The nature of the trade is such that the State confers the right to vend liquor by farming out either in auction or on private treaty.
Rental is the consideration for the privilege granted by the Government for manufacturing or vending liquor.
Rental is neither a tax nor an excise duty.
Rental ii the consideration for the agreement for grant of privilege by the Government." (pp.
869 871) The guide lines.
Now that we have held that the provision [Section 59(f)(v)] is valid on a consideration of the criteria controlling the wide words used therein there is a minor matter remaining to be disposed of.
The extract from the Section, as will be noticed, contains a clause which runs: "and the closure of such premises on special occasions".
Thus, rules may be made by the Financial Commissioner for fixing the closure of licensed premises on 'special occasion '.
Shri Mahajan insisted that 'special occasions ' may mean anything and may cover any occasion dictated by humour, political pressure or other ulterior considerations.
It is thus a blanket power which is an unreasonable restriction on the licensee 's trade.
Certainly if 'special occasions ' means any occasion which appeals to the mood of the Financial Commissioner or has other casual fascination for him the rule may suffer from arbitrary and unreasonable features.
Gandhiji 's birthday and also Vinobaji 's birthday have been included in the licence itself. 'Special occasions ' contemplated by Sec.
59(f) (v) are not stricken by such a vice for the obvious reasons we have elaborately given in the earlier part of our argument.
The occasion must be special from the point of view of the bread considerations of national solemnity.
public order, homage to national figures, the likelihood of eruption of inebriate violence On certain days on account of meals, festivals or frenzied situations or periods of tension.
Bapuji 's birthday, election day, hours of procession by rival communities when tensions prevail or festivals where colossal numbers of people gather and outbreak of violence is on the agenda, are clear illustrations. 'Special occasions ' cannot be equated with fanciful occasions but such as promote the policy of the statute as expounded by us earlier.
There is no merit in this argument either and we reject it.
158 As between temperance and prohibition it is a policy decision for the Administration.
Much may be said for and against total prohibition as an American wit has cryptically yet sarcastically summed up(1): "The chief argument against prohibition is that it does not prohibit.
This is also the chief argument in favour of it." This survey of the law ways of article 19 and the police power is sufficient in our view to clinch the issue.
our conclusions may now be set out.
(a) Section 59(f)(v) of the Punjab Excise Act, 1914, is perfectly valid; (b) The regulation of the number of days and the duration of the hours when supply of alcohol by licensees shall be stopped is quite reasonable, whether it be two days in a week or even more.
We leave open the question as to whether prohibition of the number of days and the number of hours, if it reaches a point of substantial destruction of the right to vend, will be valid, since that question arises in other writ petitions; (c) The exercise of the power to regulate, including to direct closure for some days every week, being reasonable and calculated to produce temperance and promote social welfare, cannot be invalidated on the imaginary possibility of misuse.
The test of the reasonableness of a provision is not the theoretical possibility of tyranny; and (d) There is enough guideline in the scheme and provisions of the Punjab Excise Act to govern the exercise of the power under Secs.
58 and 59.
In a few beer bar cases the grievance ventilated is regarding the manipulation of hours of sale.
Nothing has been made out to hold that the readjustment of the hour of beer bidding is unrelated to the statutory guidelines or destructive of the business.
We reject the objection.
We have reasoned enough to justify the ways of the Constitution and the law to the consumers of social justice and spirituous potions.
The challenge fails and the Writ Petitions Nos.
4108 4109 tc.
, of 1978 are hereby dismissed with costs (one hearing fee).
May we hopefully expect the State to bear true faith and allegiance to that Constitutional orphan, article 47 ? N V.K Petitions dismissed.
(1) "Reconsiderations H. L. Meneken Anti All Kinds of Blah by Lila Ray appeared in "Span" Aug. 1978 p. 41.
| The Punjab Excise Act 1914 contemplates grant of licences for trading in (Indian) foreign and country liquor.
Section 59(f) (v) of the Act provides for the fixing of the days during which any licensed premises may or may not be kept open for sale of liquor and the closure of such premises on special occasions.
The conditions of the licence includes restrictions of various types including obligation not to sell liquor on certain days and during certain hours.
Rule 37(a) as it originally stood prohibited sale of liquor on Tuesdays upto 2 p.m. and also on tho 7th day of every month.
This rule was amended by a notification whereby in place of "Tuesdays upto 2 p.m. plus the 7th of every month" "Tuesday and Friday in every week", was substituted as the days when liquor vending was prohibited.
"Note" appended to the said rule exempted tourist bungalows and.
rest houses run by the Department of tho State Government from the operation of the condition regarding closure.
Consequent upon the change of days, the .
Licence fee payable by a vendor was reduced from Rs. 12,000/ to Rs. 10,000/ to compensate for the marginal loss caused by two days ' closure.
The petitioners who were licensed vendors of liquor in the State challenged the constitutionality of section 59(f)(v) and the vires of Rule 37 on the ground that section 59(f)(v) vested an unguided, uncanalised, vague and vagarious power in the Financial Commissioner to fix the days or number of days and hours or number of hours without laying down any guidelines, indicators or controlling points.
The State on the other hand contended that the subject matter of the legislation being a deleterious substance (liquor), requiring restrictions in the direction of moderation in consumption, regulation regarding the days and hours of sale and appropriateness in the matter of location of the places of sale, reasonableness and arbitrariness must be tested on the touchstone of principled pragmatism and living realism, Dismissing the writ petitions, ^ HELD: (a) Section 59(f)(v) of the Punjab Excise Act 1914 is valid.
[158 C] 123 (b) The regulation of the number of days and the duration of the hours when supply of alcohol by licensees shall be stopped is quite reasonable whether it be two days in a week or more.
[158D] (c) The exercise of the power to regulate, including to direct closure for some days every week, being reasonable and calculated to produce temperance and promote social welfare, cannot be invalidated on the imaginary possibility of misuse.
The test of the reasonableness of a provision is not the theoretical possibility of tyranny.
[158E] (d) There is enough guideline in the scheme and provisions of the Punjab Excise Act to govern the exercise of the power under sections 58 and 59.
[158E] (1) (a) The Constitutional test of reasonableness, built into Article IV and of arbitrariness implied in Article 14 has a relativist touch.
The degree of constitutional restriction and the strategy of meaningful enforcement will naturally depend on the Third World setting, the ethos of our people, the economic compulsions of today and of human tomorrow.
While scanning the rationale of an Indian temperance measure it would be useful to remember the universal evil in alcohol and the particularly pernicious consequences of the drink evil in India.
Societal realities shape social justice.
[133H, 134A B] (b) "We, the people of India" have enacted Article 47 and "we the Justices of India" cannot 'lure it back to cancel half a life ' or 'wash out a word of it especially when progressive implementation of the policy of prohibition is, by Articles 38 and 47, made fundamental to the country 's governance.
[138H] (c) The Constitution is the property of the people and the court 's know how is to apply the Constitution not to assess it.
In the process of interpretation Part IV of the Constitution must enter the soul of Part m and the laws.[138H, 139A] State of Kerala & Others vs N. M. Thomas & Others ; referred to.
(d) Even restrictions under Article 19 may, depending on situations be pushed to the point of prohibition consistently with reasonableness.
While the police power as developed in the American Jurisprudence and Constitutional law.
may not be applicable in terms to the Indian Constitutional law, there is much that is common between that doctrine and the reasonableness doctrine under Article 19 of the Indian Constitution.
There is also a close similarity in judicial thinking on the subject.
[148F, G] South Western Law Journal Annual Survey of Texas Law Vol.
30 No. 1.
Survey 1976 pp.
725 26.
Idaho Law Review Vol. 7 1970 p. 131, Fatehchand Himmatlal vs Maharashtra ; at 839 848 referred to.
(e) The statutory scheme of the Act is not merely fiscal but also designed to regulate and reduce alcoholic habit.
While commodities and situation dictate whether power, in given statutory provisions, is too plenary to be other than arbitrary or is instinct with inherent limitations, alcohol is so manifestly deleterious that the nature of the guidelines is written in invisible ink.
[151 G H] 124 (f) The subject matter of the legislation is a deleterious substance (alcohol) requiring restrictions in the direction of moderation in consumption, regulation regarding the days and hours of sale and appropriateness in the matter of the location of the places of sale.
If it is coal or mica or cinema, the test of reasonableness will be strict, but if it is an intoxicant or a killer drug or a fire arm the restrictions must be stern.
Just as the difference between bread and brandy is felt in the field of trade control, coal and gold are as apart from whisky and toddy as cabbages are from kings.
Life speaks through law.
[ 154D F] Nashirwar vs M.P. State ; at 869 71 referred to.
(2) Even if section 59 and Rule 37 were upheld in toto that does not preclude any affected party from challenging a particular executive act pursuant Thereto on the ground that such an act is arbitrary, malafide or unrelated to the purposes and the guidelines available in the statute.
To illustrate, if the Financial Commissioner or the Excise Commissioner as the case may be declares that all liquor shops shall be opened on his birthday or shall remain closed on his Friend 's death anniversary, the executive order will be invalid.
The law may be good, but the executive action may be corrupt and then it cannot be sustained.
[145G H] (3) The most significant social welfare aspect of the closure is the prevention of the ruination of the poor worker by drinking down the little earnings he gets on the wage day.
Any government with worker 's weal and their families ' survival at heart will use its 'police power ' under Article 19(6) read with.
section 59(f)(v) of the Act to forbid alcohol sales on pay days.
To save the dependent women and children of wage earners the former unamended rule had forbidden sales on the 7th day of every month the day the monthly pay packet passes into the employees ' pocket.
While bringing in the Tuesday Friday for biddance of sales, the ban on sales on the seventh of every month was entirely deleted.
The victims of the change are the weeping wives and crying children of the workers.
All power is a trust and its exercise by governments must be subject to social audit and Judas exposure.
[146E H] (4) The liquor trade is instinct with injury to individual and community aud has serious side effects recognised everywhere in every age.
Not to control alcohol business is to abdicate the right to rule for the good of the people.
Not to canalize the age and sex of the consumers and servers, the hours of sale and cash and carry basis, the punctuation and pause in days, to produce partially the 'dry ' habit it to fail functionally as a welfare state.
The whole scheme of the statute proclaims its purpose of control in time and space and otherwise.
Section 58 vests in government the power for more serious restrictions and laying down of principles.
Details and lesser constraints have been left to the rule making power of the Financial Commissioner.
The complex of provisions is purpose oriented, considerably reinforced by Article 47.
Old statutes get invigorated by the Paramount Parchment.
Interpretation of the text of preconstitution enactments can legitimately be infused with the concerns and commitments of the Constitution as an imperative exercise.
It is impossible 'to maintain that no guidelines are found in the Act.
[147D F] (5) While the forensic problem is constitutional, the Constitution itself is a human document.
The Court has justified the ways of the Constitution and the law to the consumers of social justice and spirituous potions.
[128D, 158G] 125 (6) As between temperance and prohibition it is a policy decision for the Administration.
Hopefully it is expected of the State to bear true faith and allegiance to that Constitution orphan, Article 47.
[158A, G] The Collected Works of Mahatma Gandhi pp 29 30.
Society and the Criminal by M. J. Sethna 3rd Edn.
P. 165, 166 & 168 69 .
Society, Crime and Criminal Career by Don C. Gibbars p. 427 428.
Har Shankar & others etc.
vs Dy.
Excise & Taxation Commissioner & others ; at 266 267 referred to.
Report of the Study Team on Prohibition Vol.
344. 346, 347
|
Appeal No. 580 of 1972.
(From the Judgment and Order dated 8 9 1970 of the Gujarat High Court in Income tax Reference No. 9/68).
B.B. Ahuja and R.N. Sachthey, for the Appellants.
K.L. Hathi and P.C. Kapoor, for the respondent.
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by certificate is from the judgment of the Gujarat High Court in an Income tax Refer ence under section 66(1) of the Indian Income tax Act, 1922 (briefly the Act).
The two questions which were earlier referred by the Tribunal to the High Court at the instance of the Commis sioner of Income tax, Gujarat III.
are as follows : "(2) Whether, on the facts and in the circumstances of the case, the assessee was entitled to set off hedging.
loss of Rs. 31745/ against other profits of the previous year ? (2) Whether on the facts and in the circum stances of the case, the assessee was entitled to carry forward the speculation loss of Rs. 41603/ to the next year ?" The following facts appear from the statement of case and the order of the Tribunal: The assessment year in question is 1957 58 and the corresponding previous year is the Samvat year 2012.
The assessee is carrying on business by running an oil mill, and also doing business in sales and purchase of groundnuts, groundnut seeds and oil: speculation business in groundnuts, groundnut oil and groundnut seeds; and speculation business in cotton, errands, etc.
His total income for the year in question was determined by the Income tax Officer as Rs. 1,71,632/ .
This was after allowing set off of loss brought forward from the year 1955 56 amounting to Rs. 2,11,431/ .
In arriving at the figure of the total income, the Income tax Officer disallowed loss amounting to 28 Rs. 73,348/ in forward contracts in groundnut oil, ground nuts and groundnut seeds.
He disallowed this loss on the ground that it arose out of illegal contracts on account of the same being banned Under section 15(4) of the Forward Contracts (Regulation) Act, 1952.
It will appear that the break up of losses in the busi ness of illegal forward contracts is as follows : ( 1 ) Groundnut oil Account Rs. 49,664/ (2) Groundnut Account Rs. 22,522/ (3) Singdana (Groundnut seeds Account) at Veraval Rs. 1,162/ Total Rs. 73,348/ The above third item of loss is arrived at by the Income tax Officer after adjusting the profit of the forward business in groundnut seeds at Rajkot.
On appeal by the assessee the Appellate Assistant Com missioner affirmed the order of the Income tax Officer.
The Appellate Assistant Commissioner.
however, bifurcated the loss into two categories as follows : (1 ) Loss incurred in hedging transactions in the banned items Rs.331,745/ (2) Loss incurred in speculative tran sactions (other than hedging transac tions) in the banned items.
Rs. 41,603:/ Total: Rs. 73,348/ The Appellate Assistant Commissioner held that the assessee was not entitled to the set off of the loss against the assessee 's other business under section 24(1 ) of the Act and also that such loss could not be carried forward to the following year under section 24(2) of the Act On a second appeal by the assessee before the Appellate Tribunal, the Tribunal held that notwithstanding the ille gality of the transactions the loss could be set off and carried forward in accordance with the provisions of section 24(1) and 24(2) respectively of the Act.
The Tribunal accordingly directed that the loss in hedging transactions of forward business in the banned contracts amounting to Rs. 31,745/ be set off against the other profits of the asses see for the relevant accounting year under section 24(1) and that the balance loss of Rs. 41,603/ relating to the specu lative transactions in the banned contracts be carried forward to the following year under section 24(2) of the Act to be set off against profits of the following year from speculative business.
As stated earlier, at the instance of the Commissioner of Incometax, the two questions set out above Were referred to the High ,Court under section 66(1) of the Act.
The High Court relying upon its 29 earlier judgment in the Commissioner of Income tax vs S.C. Kothari(1) answered both the questions in the affirma tive in favour of the assessee.
That decision was, however, partly reversed by this Court in the Commissioner of Income tax Gujarat vs S.C. Kothari(2) (hereinafter to be referred to as Kothari decision).
This Court held in the Kothari decision as follows: " .
the taint of illegality of the business cannot detract from the tosses being taken into account for computation of the amount which can be subjected to tax as 'profits ' under section 10( 1 ) of the Act of 1922.
The tax collector cannot be heard to say that he will bring the gross receipts to tax.
He can only tax profits of a trade or business.
That cannot be done without deducting the losses and the legitimate expenses of the business".
This Court, however, held that the High Court was in error in considering that any set off could be allowed in that case under the first proviso to section 24(1).
This Court ob served: "The contract contemplated by Explanation 2 to the first proviso to section 24( 1 ) of the Income tax Act, 1922, has to be an en forceable contract and not an unenforceable one by reason of any taint of illegality resulting in its invalidity.
Set off cannot be allowed under the first proviso to section 24(1), read with Explanation 2 thereto, of losses in contracts which are illegal and unenforceable on account of contravention of Section 15(4) of the Forward Contracts (Regu lation) Act, 1952".
This Court held the contracts in that case in respect of which the loss was incurred by the assessee as illeged contracts.
It also held that the assessee was not entitled to a set off under the first proviso to.
section 24( 1 ) of the Act of the loss against its profit in speculative trans actions.
It, however, held that if the business in which the loss was sustained in that case was the same as the business in which the profit was derived then the loss had to be taken into account while computing the profits of the business under section 10(2) of the Act.
In the view it took this Court remitted the matter to the High Court to.
decide: the point which was not clear on the findings wheth er the profits and losses were incurred in the same busi ness even though that business involved the entering into of contracts some of which were illegal.
In the present case there is no dispute that the losses were incurred in connection with forward contracts which were banned under section 15(4) of the Forward Contracts (Regulation) Act.
It is also clear that the Income tax Officer adjusted the profit against the loss with regard to the illegal business in groundnut seeds which was carried on in two places, Veraval and Rajkot.
This set off is permis sible under section 10(2) of the Act because it is only by (1) (2) 30 setting off of the loss of the particular business in groundnut seeds that true profit with regard to that par ticular business can be computed under section 10(2).
There is, therefore, no reason to remit this case as the.course earnestly suggested by Mr. Hathi for the respondent.
In Kothari decision (supra) it was observed by this Court while remitting the case that "enough attention was not devoted to the business which the assessee was doing and in which the profit of Rs. 2,19,046/ was made and the loss of Rs. 3,40,443/ was sustained".
Such an uncertainty, however, is not present in the instant case.
The submission of Mr. Hathi, therefore, cannot be accepted.
The present case rests upon section 24 of the Act.
That section so far as material for our purpose reads as follows : "24(1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year: Provided that in computing the profits and gains chargeable under the head 'Profits and gains of business, profession or vocation, any loss sustained in speculative transactions which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions: (2) Where any assessee sustains a loss of profits or gains in any year, being a previ ous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub section (1), so.
much of the loss as is not so set off or the whole loss where the assessee had no other head of income shall be carried forward to the fol lowing year, and (i) where the loss was sustained by him in a business consisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transactions carried on by him in that year; (ii) whether loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, or any business, profession or vocation carried on by him in that year, provided that the business, profession of vocation in which the.
loss was originally sustained continued to be 'carried On= by him in that year; and 31 (iii) if the loss in either case cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the fol lowing year and so on but no loss shall be so carried forward for more than eight years".
X X X X X In the instant case there is no dispute about the fol lowing findings of facts: The assessee sustained losses in the relevant accounting year amounting to Rs. 73,348/ .
This figure was arrived at on a legitimate computation under section 10(2) of the Act.
No further question survives for a recomputation of the income under Section 10(2) of the Act in this case.
The only question remains is as to whether the loss of Rs. 31,745/ can be set off against other profits in the previ ous year.
This is the first question in the reference.
This question has to be answered in the.
negative in view of Kothari decision (supra).
The hedging loss being in respect of a banned contract under section 15(4) of the Forward Contracts (Regulation) Act, 1952, cannot be set off against the profits of other business of the previous year.
The second question is with regard to the assessee 's claim for entitlement to carry forward the speculation loss of Rs. 41,603/ to the next year.
It is also admitted that the contract for speculation in the commodity in question is banned under the Forward Contracts (Regulation) Act, 1952.
It also appears that the said loss could not be set off in the previous year against profit in the same business in that year.
The assessee contends that this loss should be allowed to be carried forward under section 24(2) of the Act.
To allow such a claim is to permit a benefit of ad justment of loss from an illegal business to spill over and continue in the following year even in a lawful speculative business.
A speculative business which is carried on in the following year must be a business of lawful speculation pertaining to lawful and enforceable contracts.
The asses see carrying on a lawful speculative business in the follow ing year cannot derive benefit by carrying forward and setting off a loss from an illegal speculative business of the earlier year.
Law will assume an illegal business to die out of existence with all its losses to the assessee in the year of loss itself.
The assessee can derive no benefit on account of the unlawful business in the following year.
The matter will be different if a lawful speculative busi ness after incurring loss is discontinued and loss therefrom is carried forward for set off against any other lawful speculative business in the following year.
This is the true legal effect of section 24(2)(i) of the Act in this case.
It iS inconceivable that law can permit an illegal activity to be carried on from which a benefit could be obtained.
The concept of carry forward is not the same thing as the setting off of loss in a particular illegal business against profit of that illegal business in a particular year.
The two concepts have to be kept distinct ly separate 32 even in a taxing statute.
There is no express warrant for the submission either under section 20(2) or under any other provision of the Act, far less on general principles.
It is true that by earning income from illegal trading activity the income does not get tainted so far as exigibil ity to tax is concerned.
While computing income from illegal activity in a particular year all losses incurred in earning that particular income are also taken into account for computation of real profits even in the illegal business.
That does not mean that fines imposed on the illegal activi ties detected, prosecuted and punished or otherwise pena lised, will be taken into account for ascertainment of real profits.
There is, therefore, a marked distinction between computation of a particular year s profit from illegal trading activity and carry forward of a loss to set it off against income in subsequent years even assuming that such illegal activity is continued against the provisions of law.
No illegal activity can be perpetuated under any provisions of law nor benefit out of it.
Law will miss its paramount object if it is not consistent with morality and any inter pretation by courts cannot read to a result where continua tion of illegal activity or benefit attached to it is given recognition.
The second question, therefore, must be answered in the negative and against the assessee.
In the result the judgment of the High Court is set aside and the two questions set out above are answered in the negative and in favour of the Department.
The appeal is allowed with costs.
P.H.P. Appeal allowed.
| The assessee carries on business of running Oil Mill and dealing in groundnuts, groundnut seeds and oil, speculative business in groundnuts, groundnut oil and groundnut seeds, and speculation business in cotton errands etc.
The I.T.O. disallowed loss in forward contracts and groundnut oil, groundnuts and groundnut seeds on the ground that it arose out of illegal contracts on account of the same being banned under section 15(4) of the Forward Contracts (Regulation) Act, 1952.
The Appellate Assistant Commissioner on appeal confirmed the decision of the l.
T.O. but bifurcated the loss into two headings, namely, loss incurred in hedging transac tions m the banned items and loss incurred in speculative transactions.
On second appeal, the Tribunal held that notwithstanding the illegality of the transactions the loss could be set off and carried forward in accordance with the provisions of section 24(1) and 24(2) of the Income Tax Act, 1922.
The Tribunal accordingly directed that the loss in hedging transactions of forward business in the banned contracts be set off against the other profits of the asses see for the relevant accounting year under section 24(1) and that balance of loss relating to the speculative transac tions in the banned contracts be carried forward to the following year under section 24(2) of the Act to be set off against profit of the following year from speculative busi ness.
On reference to the High Court, the High Court an swered both the questions in favour of the assessee and upheld the judgment of the Tribunal.
The High Court relied on its earlier judgment in the case of C.I.T. vs S.C. Ko thari.
Allowing the appeal by certificate HELD: (1) The loss incurred ,in the hedging transactions cannot be set off against other profits in the previous year in view of the decision of this Court partly reversing the judgment of the High Court in the case of S.C. Kothari.
[31C D] Commissioner of Income tax vs S.C. Kothari, , ap plied.
(2) It is admitted that the contract for speculation in the commodity in question is banned under the Forward Con tracts (Regulation) Act 1952.
To allow such a loss to be carried forward is to permit a benefit of adjustment of loss from an illegal business to spill over and continue in the following year even in a lawful speculative business.
The speculative business which is carried on in the following year must be a business of lawful speculation pertaining to the lawful and enforceable contracts.
An assessee carrying on a lawful speculative business in the following year cannot derive benefit by carrying forward and setting off a loss from illegal speculative business of the earlier year.
Law will assume an illegal business to die out of existence with all its losses to the assessee in the year of loss itself.
The assessee can derive no benefit on account of the unlawful business in the following year.
The matter will be different if a lawful speculative business after incurring loss is 27 discontinued and loss thereupon is carried forward for set off against any other lawful speculative business in the following year.
It is inconceivable that law can permit an illegal activity to be carried on from which a benefit could be obtained.
The concept of carry forward is not the same thing as the setting off of loss in a particular illegal business against profit of that illegal business in a par ticular year.
The two concepts have to be kept distinctly separate even in a taxing statute.
It is true that by earning income from illegal trading activity the business does not get tainted so far as exigibility to tax is con cerned.
While computing income from illegal activity in a particular year all losses incurred in earning that particu lar income are also taken into account for computation of real profits even in the illegal business.
There is a marked distinction between the computation of a particular year 's profit from illegal trading activity and carry for ward of a loss to set it off against income in the subse quent years even assuming that such illegal activity is continued against the provisions of law.
No illegal activi ty can be perpetuated under any provisions of law nor bene fit out of it.
Law will miss its paramount object if it is not consistent with morality and any interpretation by courts cannot lead to a result where continuation of illegal activity or benefit attached to it is given recognition.
[31D H, 32A D]
|
Appeal No. 197 of 1954.
Appeal from the Judgment and Order dated the 25th March, 1953, of the Calcutta High Court in Appeal from Original Order No. 54 of 1953.
Sachin Chaudhury, Sukumar Mitter, section N. Mukherjee and D. N. Ghosh, for the appellant.
244 K. N. Rajagopal Sastri and D. Gupta, for the respondents.
November 1.
The Judgment of section K. Das, K. C. Das Gupta and N. Rajagopala Ayyangar, JJ., was delivered by K. C. Das Gupta, J. M. Hidayatullah, J. and J. C. Shah, J., delivered separate Judgments.
DAS GUPTA J.
This appeal is against an appellate decision of a Bench of the Calcutta High Court by which in reversal of the order made by the Trial Judge the Bench rejected the present appellant 's application under article 226 of the Constitution.
The appellant is a private limited company incorporated under the Indian Company 's Act and has its registered office in Calcutta.
It was assessed to income tax for the assessment years, 1942 43, 1943 44 and 1944 45 by three separate orders dated January 26, 1944, February 12, 1944, and February 15, 1945, respectively.
These assessments were,made under section 23(3) of the Indian Income tax Act upon returns filed by it accompanied by statements of account.
The first two assessments were made by Mr. L. D. Rozario the then Income tax Officer and the last one by Mr. K. D. Banerjee.
The taxes assessed were duly paid up.
On March 28, 1951, three notices purporting to be under section 34 of the Indian Income tax Act, 1922, were issued by the income tax Officer calling upon the company to submit fresh returns of its total income and the total world income assessable for the three accounting years relating to the three assessment years, 1942 43 1943 44 and 1944 45.
The appellant company furnished re.
turns in compliance with the notices but on September 18, 1951, applied to the High Court of Calcutta for issue under article 226 of the Constitution of appropriate writs or orders directing the Income tax Officer not to proceed to assess it on the basis of these notices.
The first ground on which this prayer was based was mentioned in the petition in these terms: " The said pretended notice was issued without the existence of the necessary conditions precedent which confers jurisdiction under section 34 aforementioned, whether 245 before or after the amendment in 1948 ".
The other ground urged was that the amendment to section 34 of the Income tax Act in 1948 was not retrospective and that the assessment for the years 1942 43, 1943 44 and 1944 45 became barred long before March 1951.
The Trial Judge held that the first ground was not made out but being of opinion that the amending Act of 1948 was not retrospective, he held that the notices issued were without jurisdiction.
Accordingly he made an order prohibiting the Income tax Officer from continuing the assessment proceedings on the basis of the impugned notices.
The learned Judges who heard the appeal agreed with the Trial Judge that the first ground had not been made out.
They held however that in consequence of the amendment of section 34 in 1948 the objection on the ground of limitation must also fail.
A point of constitutional law which appears to have been raised before the appeal court was also rejected.
The appeal was allowed and the company 's application under article 226 was dismissed with costs.
The Company has preferred the present appeal on the strength of a certificate issued by the High Court under article 133(1)(a) of the Constitution.
The only point raised before us is that the courts below were wrong in holding that the first ground that the notices were issued without the existence of the necessary conditions precedent which confers jurisdiction under section 34 had not been made out.
As it is no longer disputed that section 34 as amended in 1948 applies to the present case we have to consider the section as it stood after the amendment in 1948, in deciding this question of jurisdiction.
The relevant portion of the section was in these words : " 34.
Income escaping assessment. (1) If (a) the Income tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gain chargeable to income tax have escaped assessment for that year, or have been 246 under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed.
He may in cases falling under clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is 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 reassess such income, profits or gains or recompute the loss or depreciation allowance; 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: Provided that (i) the Income tax Officer shall not issue a notice under this subsection, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice; (ii) the tax shall be chargeable at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be; and (iii) where the assessment made or to be made is an assessment made or to be made on a person deemed to be the agent of a non resident person under section 43, this sub section shall have effect as if for the periods of eight years and four years a period of one year was substituted.
247 Explanation Production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been ' discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of, this section.
" To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year two conditions have therefore to be satisfied.
The first is that the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax have been under assessed.
The second is that he must have also reason to believe that such " under assessment " has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer could have jurisdiction to issue a notice for the assessment or re assessment beyond the period of four years but within the period of eight years, from the end of the year in question.
No dispute appears to have been raised at any stage in this case as regards the first condition not having been satisfied and we proceed on the basis that the Income tax Officer had in fact reason to believe that there had been an under assessment in each of the assessment years, 1942 43, 1943 44 and 1944 45.
The appellant 's case has all along been that the second condition was not satisfied.
As admittedly the appellant had filed its return of income under section 22, the Income tax Officer could have no reason to believe that under assessment had resulted from the failure to make a return of income.
The only question is whether the Income tax Officer had reason to believe that " there had been some omission or failure to disclose fully and truly all material facts necessary 248 for the assessment " for any of these years in consequence of which the under assessment took place.
Before we proceed to consider the materials on record to see whether the appellant has succeeded ,in showing that the Income tax Officer could have no reason, on the materials before him, to believe that there had been any omission to disclose material facts, as mentioned in the section, it is necessary to examine the precise scope of disclosure which the section demands.
The words used are " omission or failure to disclose fully and truly all material facts necessary for his assessment for that year ".
It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment.
What facts are material, and necessary for assessment will differ from case to case.
In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion.
From the primary facts in his Possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable.
Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be.
There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee.
To meet a possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income tax 249 Officer might have discovered, the Legislature has put in the Explanation, which has been set out above.
, In view of the Explanation, it will not be open to the assessee to say, for example " I have produced the account books and the documents: You, the assessing officer examine them, and find out the facts necessary for your purpose: My duty is done with disclosing these account books and the documents".
His omission to bring to the assessing authority 's attention these particular items in the account books, or the particular portions of the documents, which are relevant, amount to " omission to disclose fully and truly all material facts necessary for his assessment.
" Nor will he be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed.
The Explanation to the section, gives a quietus to all such contentions; and the position remains that so far as primary facts are concerned, it is the assessee 's duty to disclose all of them including particular entries in account books, particular portions of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed.
Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative.
Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure.
It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn.
It is not for somebody else far less the assessee to tell the assessing authority what inferences whether of facts or law should be drawn.
Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose 32 250 what inferences whether of facts or law he would draw from the primary facts.
If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority.
How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn ? It may be pointed out that the Explanation to the sub section has nothing to do with " inferences " and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income tax Officer could have discovered them from the facts actually disclosed.
The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose " inferences " to draw the proper inferences being the duty imposed on the Income fax Officer.
We have therefore come to the Conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this.
The position therefore is that if there were in fact some reasonable grounds for thinking that there had been any non disclosure as regards any primary fact, which could have a material bearing on the question of "under assessments that would be sufficient to give jurisdiction to the Income tax Officer to issue the notice,% under section 34.
Whether these grounds were adequate or not for arriving at the conclusion that there was a non disclosure of material facts would not be open for the court 's investigation.
In other words, all that is necessary to give this special jurisdiction is that the Income tax officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some non disclosure of material facts.
Clearly it is the duty of the assessee who wants the court to hold that jurisdiction was lacking, to establish that the Income tax Officer had no material at all before him for believing that there had been such 251 non disclosure.
To establish this the company has relied on the statements in the assessment orders for the three years in question and on the statement of Kanakendra Narayan Banerjee in the report made by him to the Commissioner of Income tax for the purpose of obtaining sanction to initiate proceedings tinder section 34 and also on his statement in the affidavit on oath in reply to the writ petition.
The report is in these words: " Profit of Rs. 5,48,002 on sale of shares and securities escaped assessment altogether.
At the time of the original assessment the then I.T.O. merely accepted the company 's version that the sale of shares were casual transactions and were in the nature of mere change of investments.
Now the results of the company 's trading from year to year show that the company has really been systematically carrying out a trade in the sale of investments.
As such the company had failed to disclose the true intention behind the sale of the shares and as such section 34(1)(a) may be attracted.
" The only nondisclosure mentioned in the report is that the company had failed to disclose " the true intention behind the sale of the shares ".
Mr. Choudhury contends that this is not an omission to disclose a material fact within the meaning of section 34.
The question whether sales of certain shares were by way of changing the investments or by way of trading in shares has to be decided on a consideration of different circumstances, including the frequency of the sales, the nature of the shares sold, the price received as compared with the cost price, and several other relevant facts.
It is the duty of the assessee to disclose all the facts which have a bearing on the question; but whether the assessee had the intention to make a business profit as distinguished from the intention to change the form of the investments is really an inference to be drawn by the assessing authority from the material facts taken in conjunction with the surrounding circumstances.
The law does not require the assessee to state the conclusion that could reasonable drawn from the primary facts.
The 252 question of the assessee 's intention is an inferential fact and so the assessee 's omission to state his " true intentions behind the sale of shares " cannot by itself be considered to be a failure or omission to disclose any material fact within the meaning of section 34.
Indeed, an assessee whose contention is that the shares were sold to change the form of investment and not with the intention of making a business profit cannot be expected to say that his true intention was other than what he contended it to be.
Dealing with this question the learned Chief Justice has said: " The expression that the Respondent had failed to disclose " the true intention behind the sale of shares " may lack directness, but that deficiency of language is not sufficient to enable the Respondent to contend, in view of the circumstances alleged, that no failure to disclose facts was being complained of.
On the facts as stated by the Income tax Officer, it is clear that there had been a failure to disclose the fact that the Respondent was a dealer in shares and what the Income tax Officer meant by the language used by him was that the Respondent had not disclosed that the sale of shares had been of the nature of a trading sale, made in pursuance of an intention to make a business profit, and not of the nature of a change of investment, made in pursuance of an intention to put certain capital assets into another form.
If that be so, it is equally clear that the Income tax Officer who, by the way, was a successor to the officers who had made the original assessments, was not merely changing his opinion as to facts previously known, but was taking notice of a new fact.
" The learned Chief Justice seems to have proceeded on the basis that when from certain facts inferences are to be drawn there is a duty on the assessee to state what the correct inference should be and if he has made a wrong statement as regards the inferences to be drawn that also is an " omission or failure to disclose a material fact ".
For the reasons given earlier we do not think that this is the correct position in law.
It is clear therefore that if one looked at this report 253 only it would not be possible to say that the Income.
tax Officer had any non disclosure of material facts by the assessee in mind when he assumed jurisdiction.
It has to be remembered however that in sending a report to the Commissioner the Income tax Officer might not fully set out what he thought amounted to a non disclosure, because it is conceivable that the report may not be drawn up carefully and may not contain a reference to all the non disclosures that operated on his mind.
We have however on the record an affidavit sworn by the same Income tax Officer who started the section 34 proceedings.
It is reasonable to expect that in this affidavit which was his opportunity to tell the court what non disclosure he took into consideration he would state as clearly as possible the material facts in respect of which there had not been in his view a full and true disclosure.
Mr. Banerjee 's statements in this matter are contained in paras.
5, 6 and 7 of his affidavit.
They are in these words: It 5.
With reference to paragraphs 2 and 3 of the said petition, I crave reference to the assessment orders therein mentioned.
The assessment order dated the 15th February, 1945, was made by Sri Kali Das Banerjee now Income tax Officer Companies District II and the other two assessment orders were made by L. D. Rozario who is now in the employment of M/s Lovelock & Lewes.
I find from the notes made by me in the order sheet of the assessment year 1944 45 and my order dated the 7th July, 1944 that Mr. Smith of M/s. Lovelock & Lewes attended before me and stated that the profits of the company arising out of dealings in shares were not taxable as the company was not a dealer in shares and securities.
Subsequently on the 18th August 1944, M/s. Lovelock & Lewes wrote a letter to me setting out the contentions of their clients and inter alia stated that throughout the whole history the company bought no shares what so.
Sri K. D. Banerjee was accordingly led to believe that the dealings in shares were casual transactions and were in the nature of mere change in investments and the profits resulting therefrom were 254 not taxable.
The assessment orders were made on the basis that the petitioner did not carry on any business dealings in shares.
A copy of the said letter dated the 18th August, 1944, as also the relevant portion of the note sheet are included in the schedule hereto annexed and marked " 6.
In the assessments for 1945 46 and 1946 47, which were completed in April 1950, the profits on sale of shares were included in the total assessable income of the company it having been then discovered that the petitioner was in fact carrying on business in shares contrary to its representation that it was not.
The company filed appeals before the Appellate Assistant Commissioner, which were rejected in September 1950, and the assessments were confirmed.
The company thereafter filed a second appeal before the In.
come tax Tribunal which appeals are now pending.
With reference to para.
5 of the said petition, I deny that I pretended to act under section 34 of the Income tax Act as alleged.
I have reasons to believe that by reason of the omission or failure of the company to disclose fully and truly all material facts necessary for its assessments, the income, pro.
fits and gains chargeable to income tax had been under assessed.
I recorded my reasons and made three reports (one for each year) in the prescribed form and submitted them before the Commissioner of Income tax and the latter was satisfied that it was a fit case for issue of a notice under section 34 of the Income tax Act.
Thereafter I issued the prescribed notices under section 34 of the Income tax Act.
The said reports were made and notices issued in respect of all the three years mentioned in the petition and copies of the report and notice for one of such years are included in the schedule hereto annexed and marked " A ".
The report and notices for the two other years are exactly similar.
" It appears from this that the statements made by or on behalf of the company which the assessing authority considered to amount to non disclosure of material facts were these: (i) the company was not 255 whole of its history the company bought no shares whatsoever.
It has not been suggested before us that, in fact at any time up to the conclusion of the assessment proceedings for the years 1942 43, 1943 44 and 1944 45 the company did in fact make a single purchase of shares.
Clearly therefore the Income tax Officer had no reasonable ground for thinking that anything as regards the purchase of shares had not been disclosed.
The company does not dispute that the statement was made on its behalf that it was not a "I dealer " in shares and securities.
It appears clear that the Income tax Officers who made the assessments for the years 1942 43, 1943 44 and 1944 45 proceeded on the basis that this was an investment company and considered the question whether in spite of its being an investment company certain sales of shares wherefrom the company made a profit were by way of trading in shares and not by way of changing the form of investment.
Whether these sales by an investment company should in law be treated as trading transactions, and the profits made from the sales trading profits liable to tax, was the matter which it was the Income tax Officer 's task to decide.
No duty lay on the company to admit that these transactions were by way of trade.
The fact that on behalf of the company Mr. Smith of Lovelock & Lewes stated that the company was not a dealer in shares and securities does not therefore amount to an omission to disclose fully and truly any material fact.
To ascertain whether the Income tax Officer could have had in mind any non disclosure as a ground for thinking that by reason of such non disclosure an under assessment had occurred apart from what was mentioned in the affidavit we enquired from respondent 's counsel whether he could suggest any other non disclosure that might have taken place.
Mr. Sastri suggested two.
One is that the sales had not been disclosed; the other that the memorandum and articles of association of the company had not been shown.
This suggestion is against the record and we have no hesitation in repelling it.
Not only is it not the ground set out by the Income tax Officer at any 256 stage not even in the affidavit in court, but the ,matters mentioned by the officer that the assessee had claimed that the profits realised were of a casual nature obviously indicate that the assessee disclosed ,that a surplus resulted from the sales which were also disclosed.
The assessment orders it is true do not mention the details of the sales.
They state however that the audited accounts of the company were furnished.
The sales of shares were expressly mentioned in the report.
In these circumstances it is reasonable to believe that as regards sale of shares full details were in fact disclosed.
Nor can we believe that the two Income tax Officers L. D. Rozario and K. D. Banerjee concluded the proceedings without referring to the memorandum and articles of association of the company.
These officers known well that the company was claiming to be an investment company only.
They had to consider the question whether sales were of the nature of trade or of the nature of change of investment.
It is unthinkable that they would not examine the memorandum of association.
Besides, it is pertinent to note that in para.
4 of his affidavit Kanakendra Narayan Banerjee refers to the Memorandum and articles of Association and states that " by its memorandum of association the company has been authorised to carry.
on the various kinds of business which have been specified in sub section (1) and (2) of cl. 3 of the said memorandum of associations He does not say that the articles or the memorandum of association were not shown during the assessment proceedings for the years 1942 43, 1943 44 and 1944 45.
If he had any reason to believe that these were not shown he would have certainly mentioned that fact.
For that would undoubtedly to non disclosure of a material fact.
It must therefore be held that the Income tax Officer who issued the notices had not before him any non disclosure of a material fact and so he could have no material before him for believing that there had been any material non disclosure by reason of which an under assessment had taken place.
257 We are therefore bound to hold that the conditions precedent to the exercise of jurisdiction under section 34 of the Income tax Act did not exist and the Income tax Officer had therefore no jurisdiction to issue the impugned notices under section 34 in respect of the years 1942 43, 1943 44 and 1944 45 after the expiry of four years.
Mr. Sastri argued that the question whether the Income tax Officer had reason to believe that under assessment had occurred " by reason of nondisclosure of material facts " should not be investigated by the courts in an application under article 226.
Learned Counsel seems to suggest that as soon as the Income tax Officer has reason to believe that there has been under assessment in any year he has jurisdiction to start proceedings under section 34 by issuing a notice provided 8 years have not elapsed from the end of the year in question, but whether the notices should have been issued within a period of 4 years or not is only a question of limitation which could and should properly be raised in assessment proceedings.
It is wholly incorrect however to suppose that this is a question of limitation only not touching the question of jurisdiction.
The scheme of the law clearly is that where the Income tax Officer has reason to believe that an under assessment has resulted from non disclosure he shall have jurisdiction to start proceedings for re. assessment within a period of 8 years; and where he has reason to believe that an under assessment has resulted from other causes he shall have jurisdiction to start pro ceedings for re assessment within 4 years.
Both the conditions, (i) the Income tax Officer having reason to believe that there has been under assessment and (ii) his having reason to believe that such under assessment has resulted from nondisclosure of material facts, must co exist before the Income tax Officer has jurisdiction to start proceedings after the expiry of 4 years.
The argument that the Court ought not to investigate the existence of one of these conditions, viz., that the Income tax Officer has reason to believe that under assessment has resulted from 33 258 non disclosure of material facts cannot therefore be ,accepted.
Mr. Sastri next pointed out that at the stage when the Income tax Officer issued the notices he was not acting judicially or quasi judicially and so a writ of certiorari or prohibition cannot issue.
It is well settled however that though the writ of prohibition or certiorary will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction.
Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences.
Mr. Sastri mentioned more than once the fact that the company would have sufficient opportunity to raise this question, viz., whether the Income tax Officer had reason to believe that under assessment had resulted from non disclosure of material facts, before the Income tax Officer himself in the assessment proceedings and, if unsuccessful there, before the appellate officer or the appellate tribunal or in the High Court under section 66(2) of the Indian Income tax Act.
The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action.
In the present case the company contends that the conditions precedent for the assumption of jurisdiction under section 34 were not satisfied and come to the court at the earliest opportunity.
There is nothing in its conduct which would justify the refusal of proper relief under article 226.
When the Constitution confers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons.
In the present case we can find no reason for which relief should be refused.
259 We have therefore come to the conclusion that the company was entitled to an order directing the Income tax Officer not to take any action on the basis of the three impugned notices.
We are informed that assessment orders were in fact made on March 25, 1952, by the Income tax Officer in the proceedings started on the basis of these impugned notices.
This was done with the permission of the learned Judge before whom the petition under article 226 was pending, on the distinct understanding that these orders would be without prejudice to the contentions of the parties on the several questions raised in the petition and without prejudice to the orders that may ultimately be passed by the Court.
The fact that the assessment orders have already been made does not therefore affect the company 's right to obtain relief under article 226.
In view however of the fact that the assessment orders have already been made we think it proper that in addition to an order directing the Income tax Officer not to take any action on the basis of the impugned notices a further order .quashing the assessment made be also issued.
In the result, we allow the appeal, set aside the order made by the appellate Bench of the Calcutta High Court and restore the order made by the Trial Judge, Bose, J. The assessment orders made in the proceedings started under section 34 of the Income Tax Act are also quashed.
The appellant will get its costs here and below.
HIDAYATULLAH J. I have had the advantage of reading the judgments prepared by my brethren, Das Gupta and Shah, JJ.
The point involved in the case is a very short one, and the answer, as it appears to me, equally so.
The appellant Company 's income, profits and gains for the assessment years, 1942 43, 1943 44 and 1944 45, were duly assessed and taxed.
The orders were respectively passed on January 26, 1944, February 12, 1944, and February 15, 1945.
On March 28, 1951, three notices under section 34 of the Indian Income tax Act were issued calling upon the appellant Company to submit fresh returns in respect 260 of the previous years relative to each of the assessment years above mentioned.
Since this action was taken after more than four years, the matter fell to be governed by section 34(1)(a) of the Indian Income tax Act, as amended in 1948.
The clause provided an extended period for sending a notice calling for a return for the purpose of assessing or reassessing income, profits and gains which had escaped assessment or had been under assessed for any year within eight years, if the Income tax Officer " has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year ", the income, profits or gains chargeable to income tax have escaped assessment etc.
In the present case, the appellant Company, which is an investment Company, had produced in the back years a list of the shares sold by it, the statements of profit and loss account, and, I am prepared to assume, also the Memorandum and Articles of Association.
But the appellant Company gave out that the sales of shares were casual transactions of change of investments.
This statement was accepted, though it was found that in later years the Company was dealing in stocks and shares as a business venture, and its statement which was accepted, was not perhaps true.
The Income tax Officer reported the matter to the Commissioner, and stated as follows: "Profits of Rs. 5,48,002/ on sale of shares and securities escaped assessment altogether.
At the time of the original assessment the then I.T.O. merely accepted the company 's version that the sales of shares were casual transactions and were in the nature of mere change of investments.
Now the results of the company 's trading from year to year show that the company has really been systematically carrying out a trade in the sale of investments.
As such, the company has failed to disclose the true intention behind the sale of the shares and as such section 34(1)(a) may be attracted.
" The appellant Company applied to the Calcutta 261 High Court for a writ Under article 226 which was granted by a learned single Judge; but the order was, reversed on appeal in the High Court.
The appellant Company has now appealed on a certificate under article 133(1)(c) of the Constitution.
The contention of the appellant Company is that all the facts necessary to be disclosed were, in fact, disclosed, that it was not required further to concede that it was trading in shares, which was a matter of inference, from ' the proved facts, for the Income tax Officer to draw, and that there was thus no question of any non disclosure.
This argument overlooks the addition of the Explanation to the section, which explains cl.
(a) of the first sub section.
It reads: " Explanation.
Production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of this section." This means quite clearly that the mere production of evidence is not enough, and that there may be an omission or failure to make a full and true disclosure if some material fact necessary for the assessment lies embedded in that evidence which the assessee can uncover but does not.
If there is such a fact, it is the duty of the assessee to disclose it.
The evidence which is produced by the assessee discloses only primary facts, but to interpret the evidence, certain other facts may be necessary.
Thus, questions of status, agency, benami nature of transactions, the nature of trading and like matters may not appear from the evidence produced, unless disclosed.
If it be merely a question of interpretation of evidence by an Income tax Officer from whom nothing has been hidden and to whom everything has been fully disclosed, then the assessee cannot be subjected to section 34, merely because the Income tax Officer miscarried in his interpretation of evidence.
But it is otherwise, if a contention which is contrary to fact, is raised and the Income tax Officer is set to discover the hidden truth for himself In the latter case, there is suppression of material fact, or, in 262 other words, that lack of full and true disclosure which would entitle action under section 34 of the Act.
The following example explains the meaning.
Taking the present case, I set below two statements, one .,involving full disclosure and a contention, and the other, only a contention with a material fact suppressed : " (1).
We are a trading company and our business is according to our memorandum of association 'to acquire, hold, exchange, sell and 'deal in shares, stocks, etc. '.
These sales, however, were not business sales but only change of investments into trustee securities as decided by the trustees.
(2) We changed industrial shares into trustee securities because I in or about 1934, the trustees decided to convert the Indian Industrial Shares held by the appellant into trustee securities '.
" If the first is decided in favour of the assessee, there is an inference or decision by the Income tax Officer from a full and true disclosure.
If the second is decided in favour of the assessee, the question would arise if there was full and true disclosure.
In the present case, the question whether the transactions were casual transactions of changing investments or regular trading in stocks and shares involves not merely an inference, because the inference depends upon the fact that the appellant Company was formed to trade in stocks and shares.
It was open to the appellant Company to contend that in spite of its business, a particular transaction was this and not that.
But, if the appellant Company was an investment Company dealing in stocks and shares ' and knowing this for a fact, did not disclose the fact, the statement was neither full nor true, as it involved a suppression of a material fact necessary for the assessment.
The Explanation is quite obviously meant to reach an identical situation.
The appellant Company might have placed the evidence before the income tax Officer, but the Income tax Officer had reason to believe that the disclosure was neither full nor true, because the fact that the Company was and shares 263 was not disclosed.
The Income tax Officer in his report meant no more than this.
He, therefore, felt that, prima facie, there was not only concealment of a fact but, on the contrary, maintaining of a falsehood, and this was sufficient to bring this matter within the extended period.
Every contention contrary to the Income tax Officer 's opinion is not necessarily concealment of a material fact, but some contentions made with a mental reservation as to the true state of affairs may amount to such concealment, if they involve non disclosure of facts related to other facts and known to the assessee.
The Company still persists that the sales of shares were casual transactions, and this contention will, no doubt, be decided hereafter.
But the question will be decided after taking into consideration the nature of the business of the Company, and till that is done, the Income tax Officer believes that the contention raise before and persisted in is not a mere contention but maintenance of a falsehood about the nature of the transactions and the business of the Company.
The existence of such a belief is sufficiently established by the report of the Income tax Officer and the satisfaction of the Commissioner, and this has not been gainsaid.
In my opinion, the Divisional Bench of the High Court rightly refused a writ in the circumstances, and I would dismiss this appeal with costs.
SHAH J. I regret inability to agree with the judgment delivered by my learned brother Mr. Justice Das Gupta.
The facts which give rise to this appeal have been fully set out by my learned brother and it is not necessary to reiterate the same.
Sub section (1) of section 34 of the Indian Income Tax Act, 1922 (in so far it is material) stood at the relevant date when the proceedings were commenced, as follows: section 34: (1) If (a) the Income tax Officer has reason to believe that by reason of the omission or failure on the part of an 264 for any year or to disclose fully and truly all material ,facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in cl.
(a) on the part of the assessee, the Income tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under cl.
(a) at any time within eight years and in cases falling under cl.
(b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is 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 or re compute the loss or depreciation allowance; 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: Provided that (i) the Income tax Officer shall not issue a notice under this sub section, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice; (ii) the tax shall be chargeable at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be; and (iii) where the assessment made or to be made is 265 an assessment made or to be made on a person deemed to be the agent of a non resident person under section 43, this sub section shall have effect as if for the periods of eight years and four years a period of one year was substituted.
Explanation: Production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of this section.
This section provides machinery for assessment or reassessment if it be found that income, profits or gains " have escaped assessment or have been under assessed or assessed at too low a rate or have been made subject to excessive relief under the Act or excessive loss or depreciation allowance has been computed ", which expression may for convenience of reference be compendiously referred to as are or have been under assessed.
Notice under section 34(1)(a) may be issued if the Income Tax Officer has reason to believe that income in any year has been under assessed by reason of the failure on the part of the assessee to make a return of his income, or to disclose fully and truly all material facts necessary for assessment for the year in question.
The authority of the Income Tax Officer is manifestly circumscribed by certain conditions, and may be exercised only if those conditions exist and not otherwise.
In the case in hand, we are concerned with the operation of cl.
(1)(a) of section 34.
If that clause does not apply, notices of reassessment having been served more than four years after the end of the relevant year of assessment, must fail.
On an analysis of the relevant provisions, the material conditions proscribed for the exercise of the power to commence proceedings for reassessment under section 34(1)(a) are these: ' (1) The Income Tax Officer has reason to believe, (a) that income, profits or gains have been underassessed, (b) that this under assessment is by reason of 266 omission or failure to make a return under section 22 or by reason of failure to disclose fully and truly all material facts necessary for assessment for any year; (2) that a notice containing all or any of the requirements of section 22(2) is served on the assessee within eight years from the end of the year of assessment; (3) that the Income Tax Officer has recorded his reasons for issuing the notice and the Commissioner is satisfied on such reasons recorded that it is a fit case for issue of such notice.
The notices issued by the Income Tax Officer in the case before us undoubtedly fulfil conditions (2) and (3).
Notices of reassessment were served before the expiry of eight years of the end of the relevant years of assessment.
The Income Tax Officer also recorded his reasons in the reports submitted by him to the Commissioner and the Commissioner was satisfied that they were fit cases for the issue of such notices.
The dispute in the appeal relates merely to the fulfilment of the two branches of the first condition and that immediately raises the question about the true import of the expression "has reason to believe" in section 34(1)(a).
The expression " reason to believe " postulates belief and the existence of reasons for that belief.
The belief must be held in good faith: it cannot be merely a pretence.
The expression does not mean a purely subjective satisfaction of the Income Tax Officer: the forum of decision as to the existence of reasons and the belief is not in the mind of the Income Tax Officer.
If it be asserted that the Income Tax Officer had reason to believe that income had been underassessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable.
The expression therefore predicates that the Income Tax Officer holds the belief induced by the existence of reasons for holding such belief.
It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income Tax Officer must on information at his disposal believe that 267 income has been underassessed by reason of failure fully and truly to disclose all material facts necessary for assessment.
Such a belief, be it said, may not be based on mere suspicion: it must be founded upon information.
That the Income Tax Officer has reason to believe that there was under assessment in the material years was not challenged by the appellant and in our opinion rightly.
There are on the record the reports of the Income Tax Officer in which the belief is expressly set out.
It also appears from the assessment orders for the years 1945 46 and 1946 47 that tax has been assessed on the profits made by sale of shares by the company in those years.
Had the Income Tax Officer reason to believe that by reason of failure to disclose fully and truly all material facts necessary for assessment for the three years in question, there had resulted underassessment ? The learned Trial judge, after setting out the evidence, held that the Income Tax Officer had materials before him showing that the company 's trading from year to year disclosed that it had been systematically carrying on a trade in the sale of shares and securities.
He observed: " Whether the materials were sufficient or not or whether the belief or opinion is erroneous or not, cannot. . be enquired into by the court.
If the Income Tax Officer has made a wrong decision as to the existence of the conditions precedent, the remedy is by way of appeals as provided by the Income Tax Act and by stating a case under section 66 of the Act." In appeal, the High Court confirmed the order.
The High Court observed that " the use of the expression " the true intention behind the sale of shares " used in the report made by the Income Tax Officer under section 34 to the Commissioner may lack directness, but that deficiency of language was not sufficient to enable the company to contend in view of the circumstances alleged that there was no failure to disclose facts being complained of ".
The High Court also observed: "On the facts as stated by the Income Tax Officer, it is clear that there had been a failure to 268 disclose the fact that the respondent was a dealer in ,shares and what the Income Tax Officer meant by the language used by him was that the respondent had not disclosed that the sale of shares had been of the ,nature of a trading sale, made in pursuance of an intention to put certain capital assets into another form.
If that be so, it is equally clear that the Income Tax Officer who, by the way, was a successor to the officers who had made the original assessments, was not merely changing his opinion as to facts previously known, but was taking notice of a new fact.
" Prima facie, the finding recorded by the Court of First Instance and confirmed by the Court of Appeal is one on a question of fact and this court would not be justified in entering upon a reappraisal of the evidence.
But it is contended on behalf of the company that the finding is based on no materials, and to that plea I may advert.
By section 22 of the Income Tax Act, a duty is imposed upon every tax payer whose total income exceeds the maximum which is not chargeable to income tax to make a return in the prescribed form and verified in the prescribed manner, setting forth his total income during that year.
If the tax payer making the return fails to disclose fully and truly all material facts necessary for the assessment of the year in question, the jurisdiction of the Income Tax Officer to reassess is invited.
The company in its petition for the issue of a writ contended by paragraph 7 that the notices were ultra vires and illegal and that the Income Tax Officer was not invested with jurisdiction to proceed thereunder, inter alia, for the reason that the " pretended notice was issued without the existence of the necessary conditions precedent which confers jurisdiction under section 34 aforementioned, whether before or after amendment in 1948.
" The Income Tax Officer, by his affidavit, submitted: Para 4: " The statements made in paragraph 1 of the said petition are substantially correct.
By its Memorandum of Association, the company has been authorised to carry on the various kinds of business which have been specified in sub cls.
(1) to (32) of cl.
(3) of the said Memorandum of Association.
269 Para 5: " With reference to paragraphs 2 and 3 of the said petition, I crave reference to the assessment orders therein mentioned.
The assessment order dated the 15th February, 1945, was made by Shri Kali Das Banerjee now Income Tax Officer Companies District in II and the other two assessment orders were made by Mr. L. D. Razario who is now in the employment of M/s. Lovelock & Lewis.
I find from the notes made by me in the order sheet of the assessment year 1944 45 and my order dated the 7th July, 1944, that Mr. Smith of Messrs. Lovelock & Lewis attended before me and stated that the profits of the company arising out of dealings in shares were not taxable as the company was not a dealer in shares and securities.
Subsequently on the 18th August, 1944, Messrs. Lovelock & Lewis wrote a letter to me setting out the contentions of their clients and inter alia stated that throughout the whole of its history the company bought no shares whatsoever.
Shri K. D. Banerjee was accordingly led to believe that the dealings in shares were casual transactions and were in the nature of mere change in investments and the profits resulting therefrom were not taxable.
The assessment orders were made on the basis that the petitioner did not carry on any business dealing in shares.
A copy of the said letter dated the 18th August, 1944, as also the relevant portion of the note sheet are included in the schedule hereto annexed and marked " A ".
" Para 6: " In the assessments for 1945 46, and 1946 47 which were completed in April, 1950, the profits on sale of shares were included in the total assessable income of the company it having been then discovered that the petitioner was in fact carrying on business in shares contrary to its representation that it was not.
The company filed appeals before the Appellate Assistant Commissioner which were rejected in September, 1950, and the assessments were confirmed.
The company thereafter filed a second appeal before this Income tax Tribunal which appeals are now pending.
" Para 7: " With reference to paragraph 5 of the said petition, I deny that I pretended to act under 270 section 34 of the Income Tax Act as alleged.
I have reasons to believe that by reason of the omission or failure of the company to disclose fully and truly all material facts necessary for its assessments, the income, profits or, and gains chargeable to income tax had been underassessed.
I recorded my reasons and made 3 reports (one for each year) in the prescribed form and submitted them before the Commissioner of Income Tax and the latter was satisfied that it was a fit case for issue of a notice under section 34 of the Income Tax Act.
Thereafter issued prescribed notices under section 34 of the Income Tax Act.
The said reports were made and notices issued in respect of all the three years mentioned in the petition and copies of the report and notice for one of such years are included in the schedule hereto annexed and marked " A ".
The report and notices for the two other years are exactly similar.
By these averments, the Income Tax Officer asserted (a) that he had reasons to believe that by reason of the omission or failure of the company to disclose fully and truly all material facts necessary for the assessment, income chargeable to income tax has been underassessed and that he had recorded his reasons in that behalf in the three reports submitted by him to the Commissioner; (b) that in the course of the assessment proceeding for the year 1944 45, it was represented on behalf of the company that the sales of shares in that year were casual transactions and were in the nature of " mere change in investments " ; (c) that in the orders of assessment for the years 1945 46 and 1946 47 passed in April, 1950, profits earned by sale of shares held by the company were included in the total assessable income of the company, it having been discovered that the company was in fact carrying on the business of selling shares contrary to its earlier representations; and (d) that by its Memorandum and Articles of Association, the company was authorised to carry on the business of diverse kinds specified in sub cls.
(1) to (32) of cl.
(3) thereof.
Whereas by a mere bald assertion made by the company in its petition it was averred that the conditions precedent to the exercise of jurisdiction to 271 re assess did not exist, the Income Tax Officer stated in his rejoinder that he had reasons to believe that income bad been underassessed and he also set out the grounds on which that belief was founded.
The existence of the reasons to believe that income was underassessed has, as already observed, not been challenged; nor is the court concerned with the question whether the materials may be regarded by a court before which a dispute is raised, sufficient to sustain the belief entertained by the Income Tax Officer.
It is clear that the Income Tax Officer asserted on oath that when he issued the notice for reassessment, he had reasons to believe that income of the company had been underassessed and he set out the reasons in support of the belief.
Counsel for the company submitted that all the material facts necessary for the assessment were fully and truly disclosed in the course of the assessment for the years in question, and if the Income Tax Officer did not draw the correct inference, the jurisdiction to reassess could not be invoked.
He urged that it was for the Income Tax Officer, on the preliminary facts disclosed to him, to raise his inference of fact and to base his conclusions on the preliminary as well as the inferential facts, and if, in arriving at his conclusion on the preliminary and the inferential facts.
, the Income Tax Officer committed an error, he could not seek to commence proceedings for reassessment on being apprised of the error.
It was said that the Income Tax Officer knew that the company was an investment corporation, that the shares held by the company were sold from time to time, and that profits were earned by the sale of those shares, and that on these materials the Income Tax Officer might have held that the company was a dealer in shares, but if he did not draw that inference, the under assessment, if any, was not by reason of failure to disclose fully and truly all material facts.
Counsel submitted that the condition of the exercise of jurisdiction under section 34 is failure to disclose fully and truly all material facts necessary for assessment and not failure to 272 instruct the Income Tax Officer about the legal inference to be drawn from the facts disclosed.
The duty imposed by the Act upon the tax payer is to make a full and true disclosure of all material facts necessary for the assessment; he is not required to inform the Income Tax Officer as to what legal inference should be drawn from the facts disclosed by him nor to advise him on questions of law.
Whether on the facts found or disclosed, the company was a dealer in shares, may be regarded as a conclusion on a mixed question of law and fact and from the failure on the part of the company to disclose to the Income Tax Officer this legal inference no fault may be found with the company.
But on the evidence in the case, the plea raised by the company that all material facts were disclosed cannot be accepted.
The Income Tax Officer has in para.
6 of his affidavit referred to the assessment of the years 1945 46 and 1946 47: he has also referred to the Memorandum and Articles of Association of the company therein.
In the assessment order for the year 1945 46, the Income Tax Officer has set out cls.
(1) and (2) of the Memorandum and Articles of Association of the company.
They are: (1) " To acquire, hold, exchange, sell and deal in shares, stocks, debenture stock, bonds, obligations and securities issued or guaranteed by any company, Government or public body constituted or carrying on business in British India or elsewhere; " (2) " Generally to carry on business as financiers and to undertake and carry out all such operations and transactions (except the issuing of policies of assurances on human life) as an individual capitalist may lawfully undertake or carry out; ".
The Income Tax Officer in his order of assessment for that year observed that those clauses indicated the purposes for which the company was formed, and also that " whenever the shares were first acquired, these became the commodities which could either be held or sold according to the best interests of the company, that whenever such a commodity is sold, it comes within the activities or properly speaking the profit making scheme as enumerated in the object 273 clauses stated above.
These shares sold in course of ten or twelve years whenever opportunities occurred for earning profits on making the sales. . .
This company was not an ordinary trader investing its surplus funds in shares and securities quite unconnected with its regular course of business so that the profit or loss also on sale of such shares or securities may be treated as not arising out of its regular business carried on.
On the other hand, it is an Investment company of which the very first object clause is to hold and deal in shares.
Profit on sale of such shares therefore arises out of its regular course of business and it must be taxable.
" From that order of assessment, it is manifest that the Assessing Officer held that the company was formed with the object of acquiring, holding, exchanging, selling and dealing in shares, that the shares acquired became the trading assets of the company to be disposed of when opportunities occurred for earning profits; and that the activities of selling shares in which surplus assets of the company were invested were a part of the regular business carried on by the company.
There is no evidence that the Memorandum and Articles of Association referred to in para 4 of the affidavit were produced in the course of the assessment of the relevant years; nor is there evidence to show that it was disclosed that the acquisition of shares was incidental to the business activities and out of the surplus assets of the company and that the same were sold at profit as opportunities arose.
There is also no ground for assuming that these facts must have been known to the Income Tax Officer.
Counsel for the company suggested somewhat casually that under the Income Tax Rules and the practice prevailing with the Income Tax Officer, the Memorandum and Articles of Association of every company which was being assessed to tax are to be filed with the Income Tax Officer.
But our attention has not been invited to any rule or any material to support the existence of a practice requiring a private limited company to file with the Income Tax Officer the Memorandum and Articles of Association.
274 The plea raised by counsel for the company must be examined in the light of the Explanation to sub section (1) of section 34.
The Explanation provides that " Production before the Income Tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income Tax Officer will not necessarily amount to disclosure within the meaning of the section.
" If pro duction of documents or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure, it would be difficult to hold that a presumption about the production of a document at sometime in the past and its possible existence in the files of the Income Tax Officer relating to earlier years may be regarded as sufficient disclosure.
Disclosure of some facts, but not all, though the facts not disclosed may have come to the knowledge of the Income Tax Officer, if he had carefully prosecuted an enquiry on the facts and materials disclosed, will not amount to a full and true disclosure of all material facts necessary for the purpose of assessment.
A tax payer cannot resist reassessment on the plea that non disclosure of the true state of affairs was due to the negligence or inadvertence on the part of the Income Tax Officer, and but for such negligence or inadvertence, a full and true disclosure of all material facts necessary, for the assessment would have been resulted.
There is no evidence on the record that the Memorandum and Articles of Association were ever produced before the Income Tax Officer in the course of proceedings for assessment.
Again, the report of the Income 'tax Officer discloses that his predecessor in office was told that the sales of shares effected by the company were casual transactions and were in the nature of a mere " change of investments".
This was not strictly accurate.
The record therefore clearly shows that the company bad failed to disclose fully and truly all material facts in relation to assessment in two respects, (1) that it failed to produce the Memorandum and Articles of Association showing the purposes for which the company was incorporated, and 275 (2)that the shares were acquired as part of the business of financiers.
The company also made a statement which is partially untrue when it stated that sales were mere casual transactions.
There were materials before the Income Tax Officer on which he had reason to believe that by reason of the failure of the company to fully and truly disclose material facts, its income was underassessed.
Whether on these facts, a conclusion that in fact the company was carrying on the business of trading in shares could be founded, is at this stage entirely immaterial.
If there was reason to believe, the alleged inadequacy of the materials on which the belief could be founded is of no moment.
The Income Tax Officer has commenced proceedings for reassessment by issuing notices against the company and he has placed all the materials before the court on which it could be said that he had reason to believe that income of the company had been underassessed by reason of failure on the part of the company to disclose fully and truly all material facts relating to the assessment and if, on those materials, the Income Tax Officer could hold the belief which he says he did, the court in seeking to hold an enquiry into the question whether the Income Tax Officer, notwithstanding his affidavit and materials placed in support thereof, had reason to hold the requisite belief, would be arrogating to itself jurisdiction which it does not possess.
If the conditions precedent do not exist, the jurisdiction of the High Court to issue high prerogative, writs under article 226 of the Constitution to prohibit action under the notice may be exercised.
But if the existence of the conditions is asserted by the authority entrusted with the power and the materials on the record prima facie Support the existence of such conditions, an enquiry whether the authority could not have reasonably held the belief which he says he had reason to hold and he did hold, is, in my judgment, barred.
In that view, the proper order to pass in this appeal would be one of dismissal with costs.
BY COURT.
In view of the majority opinion, the appeal is allowed with costs here and below.
| The appellant, a private limited company, was assessed to income tax for the assessment years 1942 43, 1943 44 and 1944 45 by three separate orders dated January 26, 1944, February 12, 1944, and February 15, 1945, under section 23(3) of the Indian Income Tax Act on returns filed by it with statements of account.
On March 28, 1951, three notices under section 34 of the Act were issued calling upon it to submit fresh returns for the said assessment years.
The appellant filed the returns but thereafter applied to the High Court under article 226 of the Constitution for writs restraining the Income tax Officer from initiating assessment proceedings on the basis of the said notices on the ground, inter alia, that he had no jurisdiction to issue the said notices.
In his report to the Commissioner of Income tax for obtaining sanction to initiate the said proceedings the Income tax Officer had stated as follows : " Profit of Rs. 5,46,002 on sale of shares and securities escaped assessment altogether.
At the time of the original assessment the then I. T. O. merely accepted the company 's version that the sale of shares were casual transactions and were in the nature of mere change of investments.
Now the results of the company 's trading from year to year show that the company has really been systematically carrying out a trade in the sale of investments.
As such the company had failed to disclose the true intention behind the sale of the shares as such section 34(1)(a) may be attracted".
The question for determination was whether in the circum stance the Income tax Officer was right in issuing notices on the assessee under section 34(1)(a) of the Act.
Held, (per section K. Das, K. C. Das Gupta and N. R. Ayyangar, jj.), that before the Income tax Officer could issue a notice under $ '.
34(1)(a) of the Indian Income tax Act, two conditions precedent must co exist, namely, that he must have reason to believe (i) that income, profits or gains had been under assessed and (2) that such under assessment was due to non disclosure of material facts by the assessee.
242 Although what facts would be necessary and material for the assessment in a particular case must depend on the facts of that case, there could be no doubt that the burden of disclosing all the primary facts must invariably be on the assessee.
The Explanation to section 34(1) made it clear that that burden could not be fully discharged by simply producing the account books and other documents, but the assessee must also disclose such specific items or portions thereof as are relevant to the assessment.
But once he has done so, it is for the Income tax Officer to draw the proper inferences of fact and law therefrom and the assessee cannot further be called upon to do so for him.
The Explanation does not enlarge the scope of the section so as to include " the disclosure " of such inferences.
The question whether by the sale of shares the assessee in the instant case intended to change the form of investment or to make a business profit was one of an inferential fact and the failure to disclose such intention could not by itself amount to a failure or omission to disclose a material fact within the meaning of section 34(1)(a) of the Act.
Where, however, the Income tax Officer has prima facie reasonable grounds for believing that there has been a non disclosure of a primary material fact, that by itself gives him the jurisdiction to issue a notice under section 34 of the Act, and the adequacy or otherwise of the grounds of such belief is not open to investigation by the Court.
It is for the assessee who wants to challenge such jurisdiction to establish that the Income tax Officer had no material for such belief.
Since, in the instant case, there was no non disclosure of a primary material fact which the assessee was bound to disclose under section 34(1)(a) of the Act, the Income tax Officer had no jurisdiction to issue the notices in question.
It is incorrect to say that the question of under assessment by reason of non disclosure of a material fact was relevant only for the purpose of applying either the longer or the shorter period of limitation prescribed by the section and not for jurisdiction and, therefore, not a proper matter for investigation under article 226 of the Constitution.
The High Courts have ample powers under article 226 of the Constitution, and are in duty bound thereunder, to issue such appropriate orders or directions as are necessary in order to prevent persons from being subjected to lengthy proceedings and unnecessary harassments by an executive authority acting without jurisdiction.
Alternative remedies such as are provided by the Income tax Act cannot always be a sufficient reason for refusing quick relief in a fit and proper case.
Per Hidayatullah, J. The Explanation to section 34(1) of the Indian Income tax Act clearly indicates that the duty of the assessee thereunder does not end by merely producing evidence or disclosing the primary facts, but also extends to the disclosure 243 of such other facts relating to status, agency, benami nature of the transaction, the nature of the trading and the like, which he knows but do not appear from the evidence, and which may be necessary for interpreting the evidence.
If the evidence produced hides nothing and discloses everything, the assessee cannot be subjected to section 34 merely because the Income tax Officer misinterprets such evidence.
But it is otherwise if the assessee raises a contention that is contrary to fact and requires the Income tax Officer to discover the truth for himself for that would be to suppress a material fact that would attract the section.
Since, in the present case, an investment company dealing in stocks and shares, not only knowingly suppressed that fact but contended otherwise, there was non disclosure of a material fact necessary for its assessment, and sufficient to attract section 34(1) (a) of the Act.
Per Shah, J.
The expression " has reason to believe " in section 34(1)(a) of the Indian Income tax Act does not mean a purely subjective satisfaction of the Income tax Officer but predicates the existence of reasons on which such belief has to be founded.
That belief, therefore, cannot be founded on mere suspicion and must be based on evidence and any question as to the adequacy of such evidence is wholly immaterial at that stage.
Whether all the material facts necessary for the assessment had or had not been fully and truly disclosed in a particular case has to be examined, in the fight of the Explanation to section 34(1)(a).
If there is disclosure of some facts but not all, a tax payer cannot resist reassessment on the plea that such non disclosure was due to the negligence or inadvertence on the part of the Income tax Officer to scrutinise the materials before him.
Where the existence of reasonable belief that there bad been under assessment due to non disclosure by the assessee, which is a condition precedent to exercise of the power under section 34(1)(a) is asserted by the assessing authority and the record prima facie supports its existence, any enquiry as to whether the authority could reasonably hold the belief that the under assessment was due to non disclosure by the assessee of material facts necessary for the assessment must, be barred.
|
Appeals Nos. 21 to 23, 46, 47, 125 and 274 of 1969.
Appeals from the judgment and orders dated April 10, 1968 of the Madras High Court in Writ Petitions Nos.
387 of 1968 etc.
section V. Gupte, G. Ramanujam and A. V. Rangam, for the appel lants (in C.As.
21 to 23 of 1969) and the respondent (in C.As.
Nos. 46, 47, 125 and 274 of 1969).
V. K. T. Chari, T. N. C. Rangarajan and D. N. Gupta, for the appellants (in C.As.
Nos. 46 and 47 of 1969) and the respondents (in C.As.
Nos. 21 and 23 of 1969).
V. K. T. Chari, A. R. Ramanathan, T. N. C. Rangarajan and R. Gopalakrishnan, for the appellant (in C.A. No. 125 of 1969).
K. C. Rajappa, section Balakrishnan and section Laxminarasu, for the appellant (in C.A. No. 274 of 1969).
K. C. Rajappa, section Balakrishnan, section Laxminarasu and N. M. Ghatate, for the respondents (in C.A. No. 22 of 1969).
The Judgment of the court was delivered by Ramaswami, J.
In these appeals which have been heard together a common question of law arises for determination, namely, whether the Madras Urban Land Tax Act, 1966 (12 of 1966) is constitutionally valid.
In 1963 the Madras Legislature enacted the Madras Urban Land Tax Act, 1963 which came into force in the city of Madras on the 1st of July, 1963.
In the Statement of Object and Reasons of the 1963 Act it was stated that the Taxation Enquiry 271 Commission and the Planning Commission were suggesting the need for imposing a suitable levy on lands put to non agricultural use in urban areas.
The State Government, after examining the report of the Special Officer, decided to levy a tax on urban land on the basis of market value of the land at the rate of 0.4% on such market value.
Section 3 of the Act of 1963 (which win be referred to as the old Act) provided that there shall be levied and collected for every fasli year commencing from the date of the commencement of the Act, a tax on urban land from every owner of urban land at the rate of 0.4% of the average market value of the urban land in a sub zone as determined under subsection (2) of section 6.
Section 7 provided for the determination of the highest and lowest market value in a zone.
For determining the average market value, the Assistant Commissioner shall have regard to any matters specified in clauses (a) to (e) of sub section 2 of section 6; namely: (a) the locality in which the urban land is situated; (b) the predominant use to which the urban land is put, that is to say, industrial, commercial or residential; (c) accessibility or proximity to market, dispensary, hospital, railway station, educational institution, or Government offices; (d) availability of civil amenities like water supply, drainage and lighting; and (e) such other matters as may be prescribed.
The constitutional validity of Act 34 of 1963 was challenged and in Buckingham & Carnatic Co., Ltd. vs State of Madras(1) a Division Bench of the Madras High Court held that the im pugned Act fell under Entry 49, List 11 of Schedule VII to the Constitution and was within the legislative competence of the State Legislature.
But the, Act was struck down on the ground that article 14 of the Constitution was violated, because the charging section of the Act levied the tax on urban land not on the market value of such urban land but on the average value of the lands in the locality known as a sub zone.
The new Act (Act 12 of 1966) was passed by the State Legislature after the decision of the Madras High Court.
In the new Act provisions relating to fixation of average market value in the sub zone were omitted.
Instead, section 5 of the new Act provides that there shall be levied and collected from every year commencing from the date of the commencement of the Act a tax on each urban land from the owner of such urban land at the rate of 0.4% of the market (1),(1966) II M.L.J. 172.
272 value of such urban land.
Section 2(10) defines "owner" as follows "Owner includes (i) any person (including a mortgagee in possession) for the time being receiving or entitled to receive, whether on his own account or as agent, trustee, guardian, manager or receiver for another person or for any religious or charitable purposes, the rent or profits of the urban land or of the building constructed on the urban land in respect of which the word is used; (ii) any person who is entitled to the kudiwaram in respect of any inam land; but does not include (a) a shrotriemdar; or (b) any person who is entitled to the melwaram in respect of any inam land but in respect of which land any other person is entitled to the kudiwaram.
Explanation.
For the purposes of clause (9) and clause (10) inam land includes lakhiraj tenures of land and shrotriam land.
Section 2(13) defines 'land ' to mean any land which is used or is capable of being used, as a building site and includes garden or grounds, if any, appurtenant to a building but does not include any land which is registered as wet in the revenue accounts of the Government and used for the cultivation of wet crops.
" Section 6 states "For the purposes of this Act, the market value of any urban land shall be estimated to be the price which in the opinion of the Assistant Commissioner, or the Tribunal, as the case may be, such urban land would have fetched or fetch, if sold in the open market on the date of the commencement of this Act".
Section 7 provides for the submission of returns by the owner of urban land and reads "Every owner of urban land liable to pay urban land tax under this Act shall, within a period of one month from the date of the publication of the Madras Urban Land Tax Ordinance, 1966 (Madras Ordinance 273 III of 1966) in the Fort St. George Gazette, furnish to the Assistant Commissioner having jurisdiction a return in respect of each urban land containing the following particulars, namely : (a) name of the owner of the urban land, (b) the extent of the urban land, (c) the name of the division or ward and the street, survey number and subdivision number of the land and other particulars of such urban land, (d) the amount which in the opinion of the owner is the market value of the urban land.
" Section 1 0 deals with the procedure for the determination of the market value by the Assistant Commissioner and states : (1) Where a return is furnished under section 7 the Assistant Commissioner shall examine the return and made such enquiry as he deems fit.
If the Assistant Commissioner is satisfied that the particulars mentioned therein are correct and complete he shall, by order in writing determine the market value of the urban land and the amount of urban land tax payable in respect of such urban land.
(2) (a) Where no examination of the return and after the enquiry the Assistant Commissioner is not satisfied that the particulars mentioned therein are correct and complete he shall serve a notice on the owner either to attend in person or at his office on a date to be specified in the notice or to produce or cause to be produced on that date any evidence on which the owner may rely in support of his return.
(b) The Assistant Commissioner after hearing such evidence as the owner may produce in pursuance of the notice under clause (a) and such other evidence as the Assistant Commissioner may require on any specified points shall, by order in writing, determine the market value of the urban land and the amount of urban land tax payable in respect of such urban land.
(c) Where the owner has failed to attend or produce evidence in pursuance of the notice under clause (a) the Assistant Commissioner shall, on the basis of the enquiry made under clause (a), by order in writing determin e the market value of the urban land and the amoun t of urban land tax payable in respect of such urban land.
" 274 Section 11 enacts : (1) Where the owner of urban land has failed to furnish the return under section 7 and the Assistant Commissioner has obtained the necessary information under section 9 he shall serve a notice on the owner in respect of each urban land specifying therein (a) the extent of the urban land, (b) the amount which, in the opinion of the Assistant Commissioner, is the correct market value of the urban land, and direct him either to attend in person at his office on a date to be specified in the notice or to produce or cause to be produced on that date any evidence on which the owner may rely.
(2) After hearing such evidence, as the owner may produce and such other evidence as the Assistant Com missioner may require on any specified points, the Assistant Commissioner shall, by order in writing, determine the market value of the urban land and the amount of urban land tax payable in respect of such urban land.
(3) Where the owner has failed to attend or to produce evidence in pursuance of the notice under subsection (1) the Assistant Commissioner shall, on the basis of the information obtained by him under section 9, by order in writing, determine the market value of the urban land and the amount of the urban land tax payable in respect of such urban land.
" Section 20 provides for an appeal to the Tribunal from the orders of the Assistant Commissioner : "(1) (a) Any assessee objecting to any order passed by the Assistant Commissioner under section 10 or 11 may appeal to the Tribunal within thirty days from the date of the receipt of the copy of the order.
(b) Any person denying his liability to be assessed under this Act may appeal to the Tribunal within thirty days from the date of the receipt of the notice 1 of demand relating to the assessment :.
Provided that no appeal shall lie under clause (a) or clause (b) of this sub section unless the urban land tax has been paid before the appeal is filed.
275 (2) The Commissioner may, if he objects to any order passed by the Assistant Commissioner under section 10 or 11, direct the Urban Land Tax Officer concerned to appeal to the Tribunal against such order, and such appeal may be filed within sixty days from the date of the receipt of the copy of the order by the Commissioner.
(3) The Tribunal may admit an appeal after the expiry of the period referred to in clause (a) or clause (b) of sub section (1) or in sub section (2), as the case may be, if it is satisfied that there was sufficient cause for not presenting it within that period.
(4) An appeal to the Tribunal under this section shall be in the prescribed form and shall be verified in the prescribed manner and shall be accompanied by such fee as may be prescribed.
(5) The Tribunal may after giving both parties to the appeal an opportunity of being heard, pass such orders thereon, as it thinks fit and shall communicate any such orders to the assessee and to the Commissioner in such manner as may be prescribed." Section 30 confers power of revision in the Board of Revenue: and is to the following effect : (1) The Board of Revenue may, either on its own motion or on application made by the assessee in this behalf, call for and examine the records of any proceeding under this Act (not being a proceeding in respect of which an appeal lies to the Tribunal under section 20) to satisfy, itself as to the regularity of such proceeding or the correctness, legality or propriety of any decision or order passed therein and if, in any case, it appears to the Board of Revenue that any such decision or order should be modified, annulled, reversed or remitted for reconsideration, it may pass orders accordingly : Provided that the Board of Revenue shall not pass any order under this subsection in any case, where the decision or order is sought to be revised by the Board of Revenue on its own motion, if such decision or order had been made more than three years previously : Provided further that the Board of Revenue shall not pass any order under this section prejudicial to any 276 party unless he has had a reasonable opportunity of making his representations.
" Section 33 states : "(1) The Tribunal, the Board of Revenue, the Commissioner, the Assistant Commissioner, or the Urban Land Tax Officer or any other officer empowered under this Act shall, for the purposes of this Act, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908 (Central Act V of 1908), when trying a suit in respect of the following matters, namely : (a) enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of documents; (c) receiving evidence on affidavit; (d) issuing commissions for the examination of witnesses; and any proceeding before the Tribunal, the Board of Revenue, the Commissioner, the Assistant Commissioner the Urban Land Tax Officer or any other officer empowered under this Act shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 and for the purposes of section 196, of the Indian Penal Code (Central Act XLV of 1860).
(2) In any case in which an order of assessment is passed ex parte under this Act, the provisions of the Code of Civil Procedure, 1908 (Central Act V of 1908), shall apply in relation to such order as it applies in relation to a decree passed ex parte by a Court.
" The validity of the new Act was challenged in a group of writ petitions before the Madras High Court on various constitutional grounds.
By a common judgment dated the 10th April, 1968 a Full Bench of five Judges overruled all the contentions of the petitioners with regard to the legislative competence of the Madras Legislature to enact the new Act.
However, the Full Bench by a majority of 4 to 1 struck down section 6 of the new Act as being violative of articles 14, 19(1)(f) of the Constitution.
The State of Madras and other respondents to the writ petitions (hereinafter ,called the respondents for the sake of convenience) filed appeals 277 Nos.
21 to 23 of 1969 under a certificate granted by the High Court under articles 1,32 and 1 3 3 (I) (a), (b) and (c) of the Constitution.
The writ petitioners (hereinafter called the petitioners) have filed C.As Nos. 46, 47, 125 and 274 of 1969 against the same judgment on a certificate, granted by the High Court under article 132 of the Constitution.
The first question to be considered in these appeals is whether the Madras Legislature was competent to enact the legislation under Entry 49 of List 11 of Schedule VII of the Constitution which reads : "Taxes on lands and buildings".
It was argued on behalf of the petitioners that the impugned Act fell under Schedule VII, List 1, Entry 86, that is "Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies.
" The argument of Mr. V. K. T. Chari may be summarised as follows : The impugned Act was, both in form and substance, taxation of capital and was hence beyond the competence of the State Legislature.
To tax on the basis of capital or principal value of assets was permissible to Parliament under List 1, Entries 86 and 87 and to State under Entry 48 of List II.
Taxation of capital was the appropriate method provided for effecting the directive principle under article 39 of the Constitution, namely, to prevent concentration of wealth.
Article 366(9) contains a definition of 'estate duty ' with reference to the principal value.
Entry 86 of List I (Taxes on capital value of assets exclusive of agricultural land) and Entry 88 (Duties in respect of succession to such property) form a group of entries the scheme of which is to carry out the directive principle of article 39(c).
The Constitution indicated that capital value or principal value shall be the basis of taxation under these entries and, therefore, the method of taxation of capital or principal value was prohibited even to Parliament in respect of other taxes and to the States except in respect of Estate Duty on agricultural land.
Such in effect is the.
argument of Mr. V. K. T. Chari.
But in our opinion there is no warrant for the assumption that entries 86, 88 of List I and Entry 48 of List II form a special group embodying any particular 'scheme.
The directive principle embodied in article 39(c) applies both to Parliament and to the State Legislature and it is difficult to conceive how entries 86 to 88 of List I would exclude any power of the State Legislature to implement the same principle.
The legislative entries must be given a large and liberal interpretation, the reason being that the allocation of the subjects to the lists is not by way of scientific or logical definition but by way of a mere sixplex enumeratio of broad categories.
We see no reason, therefore, for holding that the entries 86 and 87 of List I preclude the State Legislature from taxing capital value of lands and buildings under 13SupCI69 4 278 Entry 49 of List II.
In our opinion there is no conflict between Entry 86 of List I and Entry 49 of List 11.
The basis of taxation under the two entries is quite distinct.
As regards Entry 86 of List I the basis of the taxation is the capital value of the asset.
It is not a tax directly on the capital value of assets of individuals and companies on the valuation date.
The tax is not imposed on the components of the assets of the assessee.
The tax under Entry 86 proceeds on the, principle of aggregation and is imposed on the totality of the value of all the assets.
It is imposed on the total assets which the assessee owns and in determining the net wealth not only the encumbrances specifically charged against any item of asset, but the general liability of the assessee to pay his debts and to discharge his lawful obligations have to be taken into account.
In certain exceptional cases, where a person owes no debts and is under no enforceable obligation to discharge any liability out of his assets it may be possible to break up the tax which is leviable on the total assets into components and attribute a component to lands and buildings owned by an assessee.
In such a case, the component out of the total fax attributable 'Lo lands and buildings may in the matter of computation bear similarity to a tax on lands and buildings levied on the capital or annual value under Entry 49, List II.
But in a normal case a tax on capital value of assets bears no definable relation to lands and buildings which may or may not form a component of the total assets of the assessee.
But Entry 49 of List II, contem plates a levy of tax on lands and buildings or both as units.
It is not concerned with the division cf interest or ownership in the units of lands or buildings which are brought to tax.
Tax on lands and buildings, is directly imposed on lands and buildings, and bears a definite relation to it.
Tax on the capital value of assets bears no definable relation to lands and buildings which may form a component of the total assets of the assessee.
By legislation in exercise of power under Entry 86, List I tax is contemplated to be levied on the value of the assets.
For the purpose of levying tax under Entry 49, List 11 the State Legislature may adopt for determining the incidence of tax the annual or the capital value of the lands and buildings.
But the adoption of the annual or capital value of lands and buildings for determining tax liability will not make the fields of legislation under the two entries overlapping.
The two taxes are entirely different in their basic concept and fall on different subject ' matters.
In Ralla Ram vs Province of East Punjab(1) the Federal Court held that the tax levied by section 3 of the Punjab Urban (1) 279 Immoveable Property Tax Act, 17 of 1940 on buildings and lands situated in a specified area at such rate not exceeding twenty per cent.
of the annual value of such buildings and lands, as the Provincial Government may by notification in the official Gazette direct in respect of each such rating area was not a tax on income, but was a tax on lands and buildings within the meaning of Item No. 42 of List 11 of the Seventh Schedule of the Government of India Act, 1935.
In that case it was contended that under the provisions of the Punjab Act the basis of the tax was the annual value of the buildings and since the same basis was used in the Income tax Act for determining the income from property and generally speaking the annual value is the fairest standard for measuring income and, in many cases, is indistinguishable from it, the tax levied by the impugned Act was in substance a tax on income.
The Court pointed out that the annual value is not necessarily actual income, but is only a standard by which income may be measured and merely because the Income tax Act had adopted the annual value as the standard for determining the income, it did not follow that, if the same standard is employed as a measure for any other tax, that latter tax becomes also a tax on income.
It was held by the Court that in substance the property tax levied by section 3, Punjab Urban Immoveable Property Tax Act, 1940 fell within item 42 of the Provincial List and was not a tax on income falling within item 54 of the Federal List although the basis of the tax was the annual value of the building.
The same view has been expressed by this Court in Sudhir Chandra Nawn vs Wealth Tax Officer(1) wherein it was held that the power to levy tax on lands and buildings under Entry 49 of List II did not trench upon the power conferred on Parliament by Entry 88 of List I and, therefore, the enactment of the Wealth Tax Act by Parliament was riot ultra vires.
The problem in this case is the problem of characterisation of the law or classification of the law.
In other words the question must be asked : what is the subject matter of the legislation in its "pith and substance" or in its true nature and character for the purpose of determining whether it is legislation with respect to Entry 47 of List 11 or Entry 86 of List 1.
In Gallahagher vs Lynn 2 ) the principle is stated as follows : "It is well established that you are to look at the true nature and character of the legislation the, pith and substance of the legislation.
If on the view of the statute as a whole, you find that the substance of the legislation (1) ; (2) [1937] C. 853 870 280 is within the express powers, then it is not invalidated if incidentally it affects matters which are outside the authorized field.
The legislation must not under the guise of dealing with one matter in fact encroach upon the forbidden field.
Nor are you to look only at the object of the legislator.
An Act may have a perfectly lawful object e.g. to promote the health of the inhabitants, but may seek to achieve that object by invalid methods, e.g., direct prohibition of any trade with a foreign country.
In other words, you may ' certainly consider the clauses of an Act to see whether they are passed 'in respect of ' the forbidden subject.
" In the case of Subrahmanyan Chettiar vs Muttuswami Goundan(1) Sir Maurice Gwyer, C.J. said : "It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere.
Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance ', or its 'true nature and character ', for the purpose of determining whether it is legislation with respect to matters in this list or in that : Citizens Insurance Company of Canada vs Parsons(); Russell vs The Queen(3); Union Colliery Co. of British Columbia vs Bryden(4); Att.
Gen. for Canada vs Att.
Gen. for British Columbia(5); Board of Trustees of Lethbridge Irrigation District vs Independent Order of Foresters(6).
In my opinion this rule of interpretation is equally applicable to the Indian Constitution Act.
" For the reasons already expressed we hold that in pith and substance the new Act in imposing a tax on urban land at a percentage of the market value is entirely within the ambit of Entry 49 of List II and within the competence of the State Legislature and does not in any way trench upon the field of legislation of Entry 86 of List I. (1) [194O] F.C.R. 188 at 201.
(2) [1881] 7 A.C. 96.
(3) [1882] 7 5) 301 A.C. III.
(6) 281 It was then said that as Entry 49 of List 11 provides for taxes on lands and buildings, the impugned Act which imposes tax on lands alone cannot be held to fall under that entry.
It was submitted that when the Legislature taxed land deliberately the legislation fell under List 11 of Entry 45, i.e., "land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights and alienation of revenues ' ' and not under Entry 49 of that List.
The legislative history of Entry 49 of List 11 does not however lend any support to this argument.
Before the Government of India Act, 1935 lands and buildings were taxed separately and all that was done under the Government of India Act, 1935 and ' the Constitution was to combine the two entries relating to land and buildings into a single entry.
Section 45 A of the Government of India Act, 1919 provided for making rules under the Act for the devolution of authority in respect of provincial subjects to local Governments, and for the allocation of revenues or other moneys to those Governments. ' The Government of India by a notification dated December 16, 1920 made rules under that provision called the "Scheduled Tax Rules".
These Rules contained two schedules.
The first Schedule contained eight items of tax or, fee.
The Legislative Council of a Province may without obtaining the previous sanction of the Governor General make and take into consideration any law imposing for the purposes of the local Government any tax included in Schedule I. Schedule II contained eleven items of tax.
In making a law imposing or authorising any local authority to impose for the purposes of such local authority any tax in Schedule 11, the Legislative Council required to previous sanction of the Governor General.
In Schedule II, item No. 2 was tax on land or land values and item 3 was a tax on buildings.
In the Government of India Act, 1935 the two entries were combined and List 11, Entry 42 is "Taxes on lands and buildings and hats and Windows".
The legislative history of Entry 49, List 11 does not, therefore, lend any support to the argument that Entry 49 of List 11 relating to tax on land and buildings cannot be separated.
On the other hand we are of opinion that Entry 49 "Taxes on lands and buildings" should be construed as taxes on land and taxes on buildings and there is no reason for restricting the ampli tude of the language used in the Entry.
This view is also borne out by authorities.
In Raja Jagannath Baksh Singh vs The State of U.P.(1) the question at issue was whether the tax imposed by the U.P. Government on land holdings under the U.P. Large Land Holdings Tax Act, 1957 (U.P. Act 31 of 1957) 'was constitutionally valid.
It was held that the legislation fell under Entry (1) 282 49 of List 11 and the tax on land would include agricultural land also.
Similarly in H. R. section Murthy vs Collector of Chittoor & Anr.(1) it was held that the land cess imposed under sections 78 and 79 of the Madras District Boards Act (Mad.
Act No. XIV of 1920) and Mines and Minerals (Regulation and Development) Act, (Act 67 of 1957) was a tax on land falling under Entry 49 of the State List.
We are of opinion that the argument of Mr. V. K. T. Chari on this aspect of the case must be rejected.
We proceed to consider the argument that no machinery is provided for determining the market value and the provisions of the new Act, therefore, violate article 14 of the Constitution.
The argument was stressed by Mr. V. K. T. Chari that the guidance given under the 1963 Act has been dispensed with and the Assistant Commissioner is not bound to take into account, among other matters, the sale price of similar sites, the rent fetched for use and occupation of the land, the principles generally adopted in valuing land under the Land Acquisition Act and the compensation awarded in recent land acquisition proceedings.
We see no justification for this argument.
The procedure for determining the market value and assessment of urban land is described in Chapter III of the new Act.
Section 6 provides that the market value of the urban land "shall be estimated to be the price which in the opinion of the Assistant Commissioner, or the Tribunal, as the case may be, such urban land would have fetched or fetch, if sold in the open market on the date of the commencement of this Act.
" It was said on behalf of the petitioners that the opinion which the Assistant Commissioner has to form is purely subjective and may be arbitrary.
We do not think that this contention is correct.
Having regard to the language and context of section 6 of the new Act we consider that the opinion which the Assistant Commissioner has to form under that section is not subjective but should be reached objectively upon the relevant evidence after following the requisite formalities laid down in sections 7 to 11 of the new Act.
Instead of the Assistant Commissioner classifying the urban land and determining the market value in a zone, the present Act requires a return to be submitted by the owner mentioning the amount which, in the opinion of the owner, is the market value of the urban land.
On receipt of the return, if the Assistant Commissioner is satisfied that the particulars mentioned are correct and complete, he may determine the market value as given by the owner of the land.
If he is not satisfied with the return, he shall serve a notice to the owner asking him to attend his office with the relevant evidence in support of his return.
After bearing the owner and considering the evidence produced, the Assistant Commissioner may determine the (1) 28 3 market value.
In case the owner fails to attend or fails to produce the evidence, the Assistant Commissioner is empowered to assess the market value on the basis of an enquiry made by him.
Section 11 prescribes the procedure for determining the market value when the owner fails to furnish a return as required under section 7.
The section requires the Assistant Commissioner to serve a notice on the owner specifying amongst other things the amount, which in the opinion of 'the Assistant Commissioner, is the correct market value and directing the owner to attend in person at his office on a date specified in the notice or to produce any evidence on which the owner may rely.
After hearing such evidence as the owner may produce and considering such other evidence as may be required, the Assistant Commissioner may fix the market value.
The proceeding before the Assistant Commissioner is judicial in character and his opinion regarding the market value is reached objectively on all the materials produced before him.
Section 20 provides for an appeal by the assessee objecting to the determination of the market value made by the Assistant Commissioner to a Tribunal within thirty days from the date of the receipt of the copy of the order.
The Act requires that the Tribunal shall consist of one person only who shall be a judicial officer not below the rank of a Subordinate Judge.
By section 30, the Board of Revenue is empowered either on its own motion or on application made by the assessee in this behalf, to call for and examine the records of any proceedings under the Act (not being a proceeding in respect of which an appeal lies to the Tribunal under section 20) , to satisfy itself as to the regularity of such proceeding or the correctness, legality or propriety of any decision or order passed therein, and if it appears to the Board of Revenue that any such decision or order should be modified, annulled , reversed or remitted for reconsideration, it may pass orders accordingly.
Section 32 enables the urban land tax officer, or the Assistant Commissioner, or the Board of Revenue or the Tribunal to rectify any error apparent on the face of the record at any time within three years from the date of any order passed by him or it.
Section 33 confers power on the Assistant Commissioner to take evidence, to require discovery and production of documents and to receive evidence on affidavit etc.
Thus the Act envisages a detailed procedure regarding submission of returns, the making of an assessment after hearing objections and a right to appeal to higher authorities.
We are hence unable to accept the contention of the petitioners that the provisions of section 6 of the new Act are violative of article 14 of the Constitution.
It is necessary to state that the High Court decided the case in favour of the respondents mainly on the ground that investment 284 of the power to determine value of the urban land under section 6 of the Act constituted excessive delegation of authority and so violative of articles 19(1) and 14 of the Constitution.
(see the judgment of Veeraswami, J., who pronounced the main judgment in the High Court.
But Mr. V. K. T. Chari did not support this line of reasoning, in his arguments before this Court.
On the other hand learned counsel conceded that the power of determining the value of the urban land being judicial or quasi judicial in character the doctrine of excessive delegation of authority had no application.
We pass on to consider the next contention raised on behalf of the petitioners namely that the Act should be struck down as an unreasonable restriction on the right to acquire, hold and dispose of property and as such violative of article 1 9 (1) (f) of the Constitution.
It was argued that the test of reasonableness would be that the tax should not be so high as to make the holding of 'the property or the carrying on of the activity (business or profession) which is subject to taxation, uneconomic according to accepted rates of yield.
In this connection it was said that the new Act by imposing a tax on the capital value at a certain rate was not correlated to the income or rateable value and, therefore, violates the requirement of reasonableness.
We are unable to accept the proposition put forward by Mr. Chari.
It is not possible to put the test of reasonableness into the straight jacket of a narrow formula, The objects to be taxed,, the quantum of tax to be levied, the conditions subject to which it is levied and the social and economic policies which a tax is designed to subserve are all matters of political character and these matters have been entrusted to the Legislature and not to the Courts.
In applying the test of reasonableness it is also essential to notice that the power of taxation is generally regarded as an essential attribute of sovereignty and constitutional provisions relating to the power of taxation are regarded not as grant of power but, as limitation upon the power which would otherwise be practically without limit.
It was observed by this Court in Rai Ramakrishna vs State of Bihar(1) : "It is of course true that the power of taxing the people and their property is an essential attribute of the Government and Government may legitimately exercise the said power by reference to the objects to which it is applicable to the utmost extent to which Government thinks it expedient to do so.
The objects to be taxed so long as they happen to be within the legislative competence of the Legislature can be taxed by the legislature according to the exigencies of its needs, because (1) A.T.R. 1963 S.C. 1667 at 1673.
28 5 there can be no doubt that the State is entitled to raise revenue by taxation.
The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the Legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes article 19 Courts would naturally be circumspect and cautious.
Where for instance it appears that the taxing statute is plainly discriminatory, or provides no procedural machinery for assessment and levy of the tax, or that it is confiscatory, Courts, would be justified in striking down the impugned statute as unconstitutional.
In such cases, the character of the material provisions of the impugned statute is such that the Court would feel justified in taking the view that, in substance, the taxing statute is a cloak adopted by the Legislature for achieving its confiscatory purposes.
This is illustrated by the decision of this Court in the case of Kunnathat Thathunni Moopil Nair vs State of Kerala ; where a taxing statute was struck down because it suffered from several fatal infirmities.
On the other hand, we may refer to the case of Jagannath Baksh Singh vs State of Uttar Pradesh ; where a challenge to the taxing statute on the ground that its provisions were unreasonable was rejected and it was observed that unless the infirmities in the impugned statute were of such, a serious nature as to justify its description as a colourable exercise of legislative power, the Court would uphold a taxing statute." As a general rule it may be said that so long as a tax retains it&.
character as a tax and is not confiscatory or extortionate, the reasonableness of the tax cannot be questioned.
Mr. Chari submitted that the existing property tax under section 100 of the City Municipal Corporation Act and the tax on urban lands under the new Act both enacted under Entry 49 of the State List, one of them imposing a tax on the capital value of urban lands and the other on the annual value of lands and buildings exhaust an unreasonably high proportion of income.
I Or instance, it is pointed out that in W.P. No. 2835 of 1967 the annual income on property was Rs. 6,000 and the proposed market value for the lands alone comes to Rs. 10,40,000.
The urban land tax at 0.4% of the market value is Rs. 4,160 and the income tax at the rate applicable to the petitioner was Rs. 1.234.
The total tax burden in the aggregate under the three beads was Rs. 6,794, which 286 exceeds the rental income.
In W.P. No. 3686 of 1967 the municipal annual value was Rs. 4,095, the property tax was Rs. 1,098 and the urban land tax at 0.4% was Rs. 1,523.
The proportion of the two taxes together to yearly or annual municipal value worked out to Rs. 62.5%.
It was, therefore, said that the taxes put together would practically exhaust the total income and the charging section in the new Act was unreasonable.
The answer to the contention is that the charge is on the market value of the urban land and not on the annual letting value on which the municipal property tax is based.
The basis of the two taxes being .different it is not permissible to club together the two taxes and complain of the cumulative burden.
If the tax is on the market value of the urban land as it is in this case it does not admit of a complaint that it takes away an unreasonably high proportion of the income.
A tax on land values and a tax on letting value, though both are taxes under Entry 49 of List II cannot be clubbed together in order to test the reasonableness of one or the other for the purposes of article 19 (I).
But so far as the new Act is concerned we consider that the levy at 0.4% of the market value of the urban land is by no means confiscatory in effect.
It was also pointed out by Mr. V. K. T. Chari that in certain cases the market value of the urban land was arrived at by applying what is known as the contractor 's method not to the building which stands on the land whose value is, ascertained by that means but to some other building on a different land taken for comparison.
It was said that it was difficult enough for a to apply the contractor 's method of valuation to his own building which could be done by a competent architect after taking into account all measurements.
But it is absolutely an impossible task to check up or make objections to the contractor 's method applied to another man 's property which cannot be trespassed upon.
It was said that the contractor 's method was the last resort in valuation when a building has to be valued apart from the land and that it was a wrong application of the formula to use it to value the land without the building particularly when valuation of land can be made by applying the principles of the Land Acquisition Act.
But this argument has no bearing on the constitutional validity of the charging section or the machinery provisions of the Act.
It is, however, open 'to the writ petitioners to challenge the validity of the particular valuation in any particular case by way of an appeal under a statute or to move the High Court for grant of writ under article 226 of the Constitution.
The impugned Act provides for the retrospective operation of the Act.
Section 2 states that except sections 19, 47 and 48, other sections shall be deemed to, have come into force in the City of 287 Madras on the 1st day of July, 1963 and sections 19 and 47 shall be deemed to have come into force in the City of Madras on the 21st May, 1966.
It also provides that section 48 shall come into force on the date of the publication of the Act in the Fort St. George Gazette.
Section 6 enacts that the market values of the urban lands shall be estimated to be the price which in the opinion of the Assistant Commissioner or the Tribunal such urban land would have fetched or fetch if sold in the open market on the date of the commencement of the Act,, that is, from 1st July, 1967.
The urban land tax is, therefore payable from 1st July, 1963.
It is contended on behalf of the petitioners that the retrospective operation of the law from 1st July, 1963 would make it unreasonable.
We are unable to accept the argument of the petitioners as correct.
It is not right to.
say as a general proposition that the imposition of tax with retrospective effect per se renders the law unconstitutional.
In applying the test of reasonableness to a taxing statute it is of course a relevant consideration that the tax is being enforced with retrospective effect but that is not conclusive in itself.
Taking into account the legislative history of the present Act we are of opinion that there is no unreasonableness in respect of the retrospective operation of the new Act.
It should be noticed that the Madras Act of 1963 came into force on 1st July, 1963 and provided for the levy of urban land tax at the same rate as that provided under the new Act.
The enactment was struck down as invalid by the judgment of the Madras High Court which was pronounced on the 25th March, 1966.
The legislature by giving retrospective effect to Madras Act 12 of 1966 that the urban land must be taxed on the date on which the 1963 Act came into force the new Act cured the defect from which the earlier Act was suffering.
In Rai Ramkrishna 's case(1) the question at issue was whether the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 (17 of 1961) was violative of article 1,9(5) and (6) of the Constitution for the reason that it was made retrospective with effect from 1st April, 1950.
It appears that the Bihar Finance ,Act, 1950 levied a tax on passengers and goods carried by public service motor vehicles in Bihar.
In an appeal arising out of a suit filed by the passengers and owners of goods in a representative capacity, the Supreme Court pronounced on the 12th December, 1960 a judgment declaring Part III of the said Act unconstitutional.
Thereafter an Ordinance, namely, Bihar Ordinance No. 2 of 1961 was issued on the 1st of August, 1961 by the State of Bihar.
By this Ordinance, the material provisions of the earlier Act of 1950 which had been struck down by this Court were validated and brought into force retrospectively from the (1) ; 288 date when the earlier Act had purported to come into force.
Subsequently, the provisions of the said Ordinance were incorporated in the Act, namely, the Bihar Taxation on Passengers and Goods (Carried by Public Service Motor Vehicles) Act, 1961 which was duly passed by the Bihar Legislature and received the assent of the President on 23rd September, 1961.
As a result of the retrospective operation of this Act, its material provisions were deemed to have come into force on April 1, 1950, that is to say, the date on which the earlier Act of 1950 had come into, force '.
The appellants challenged the validity of this Act of 1961.
Having failed in their writ petition before the High Court, the appellants came to this Court and the argument was that the retrospective operation prescribed by section 1 (3) and by a part of section 23 (b) of the Act so completely altered the character of the tax proposed to be retrospectively recovered that it introduced a serious infirmity in the legislative competence of the Bihar Legislature itself.
The argument was rejected by this Court and it was held that having regard to the relevant facts of the case the restrictions imposed by the said retrospective operation was reasonable in the public interest under article 19(5) and (6) and also reasonable under article 304(b) of the Constitution.
In our opinion the ratio of this decision applies to the present case where the material facts are of a similar character.
In this context a reference may be made to a recent review of retroactive legislation in the United States of America : "It is necessary that the legislature should be able to cure inadvertent defects in statutes or their administration by making what has been aptly called 'small repairs '.
Moreover, the individual who claims that a vested right has arisen from the defect is seeking a windfall since had the legislature 's or administrator 's action had the effect it was intended to and could have had, no such right would have arisen.
Thus, the interest in the retroactive during 'of such a defect in the administration of government outweighs the individual 's interest in benefiting from the defect. .
The Court has been extremely reluctant to override the legislative judgment as to the necessity for retrospective taxation, not only because of the paramount governmental interest in obtaining adequate revenues, but also because taxes are not in the nature of a penalty or a contractual obligation but rather a means of apportioning the costs of government among those who benefit from it.
Indeed, as early as 1935 one commentator observed that "arbitrary retroactivity" may continue . to rear its head 289 in tax briefs, but for practical purposes, in this field, it is as dead as wager of law." (Charles B. Hochman in at p. 705).
In view of the legislative background of the present case we are of opinion that the imposition of the tax retrospectively from 1st July, 1963 cannot be said to be an unreasonable restriction.
We, therefore, reject the argument of the petitioners on this aspect of the case, For these reasons we hold that the Madras Urban Land Tax Act, 1966 (Act 12 of 1966) must be upheld as constitutionally valid.
We accordingly set aside the judgment of the Madras High Court dated the 10th April, 1968 and order that writ petitions filed by the petitioners should be dismissed.
In other words C.As 21 to 23 are allowed and C.As 46, 47, 125 and 274 are dismissed.
There will be no order with regard to costs of these appeals.
21 to 23 of '69 allowed.
R.K.P.S. C.As. 46, 47, 125 and 274 of '69 dismissed.
| After a preliminary decree was obtained by the appellants (mortgagees of an Estate including both Bakasht lands and other lands), the Bihar Land Reforms Act, 1950 came into force.
The appellant filed petition for passing final decree.
The Estate mortgaged vested in the State as a result of a notification issued under section 3(1) of the Act, and later a final decree was passed in the mortgage suit.
Thereafter the appellants applied under section 14 of the Act and got determined the compensation to which they were entitled under the Act.
But yet they filed an execution petition to execute the mortgage decree against the Bakasht land.
The respondents resisted that execution by filing an application under section 47, Civil Procedure Code contending that the execution was barred under section 4(d) of the Act.
That application was dismissed for default of the respondents.
A second application raising, the same ground was filed by the respondents but this, too, was dismissed for their default.
A third application raising the same ground was filed by the respondents and in this, the execution court overruled the objection raised by the respondents on the grounds (i) that the objection was barred by the principles of res judicata and (ii) that the bar of section 4(d) pleaded was not tenable.
This decision was affirmed in appeal, but reversed in second appeal by the High Court.
Dismissing the appeal this Court; HELD : (i) The objection was not barred by the principles of res judicata.
Before a plea can be held to be barred by res judicata that plea must have been heard and determined by the court.
Only a decision by a court could be res judicata, whether it be statutory under section 11, Civil Procedure Code or constructive as a matter of public policy on which the entire doctrine rests.
An execution petition having been dismissed for the default of the decree holder through by the time petition came to be dismissed, the judgment debtor had resisted the execution on one or more grounds, does not bar the further execution of the decree in pursuance of fresh execution petitions filed in accordance with law.
Even the dismissal for default of objections raised under section 47, Civil Procedure Code does not operate as res judicata when the same objections are raised again in the course of the execution.
[911 B H] Maharaja Radha Parshad Singh vs Lal Sahab Rai & Ors.
L.R. 17 I.A. 150, Pulvarthi Venkata Subba Rao vs Velluri Jagannadha Rao & Ors.
; , Lakshmibai Anant Kondkar vs Ravi Bhikaji Kondkar, XXXI B.L.R. 400, Bahir Das Pal & Anr.
v, Girish Chandra Pal, A.I.R. 1923 Cal.
287, Bhagwati Prasad Sah vs Radha Kishun Sah & Ors.
A.I.R. 1950 Pat. 354, Jethmal & Ors.
vs Mst.
Sakina, A.I.R. 1961 Rai.
1959 Bishwanath Kundu vs Smt.
Subala Dassi, A.I.R. 1962 Cal. 272, referred to.
909 Ramnarain vs Basudeo, I.L.R. XXV Pat.
595, disapproved.
(ii)Proceedings under section 4(d).
of the Bihar Land Reforms Act, 1950 included execution proceedings and the execution could not be proceeded with.
The only remedy open to the appellants was to get compensation under Chapter IV of the Act.
[913 G, H] Reading sections 3, 4 and 6 together, it followed that all Estates notified under section 3 vested in the State free of all encumbrances.
The quondum proprietors and tenure holders of those Estates lost all interests in those Estates.
As proprietors they retained no interest in respect of them whatsoever.
But in respect of the lands enumerated in section 6 the State settled on them the rights of raiyats.
Though in fact the vesting of the Estates and the deemed settlements of raiyat rights in respect of certain classes of lands included in the Estates took place simultaneously, in law the two must be treated as different transactions; first there was a vesting of the Estates in the State absolutely, free of all encumbrances. 'Men followed the deemed settlement by the State of raiyat 's rights on the quondum proprietors.
Therefore in law it would not be correct to say that what vested in the State were only those interests not coming within section 6.
[913 C E] Section 4(d) provided that "no suit shall lie in any civil court for the recovery of any money due from such proprietor (proprietor whose estate has vested in the State) or tenure holder the payment of which is secured by a mortgage of, or is a charge on, such estate or tenure and all suits and proceedings for the recovery of any such money which may be pending on the date of vesting shall be dropped".
Proceedings in this section undoubtedly included execution proceedings.
[1913 F] Ramnarain vs Basudeo I.L.R. XXV Pat.
595, Raj Kishore vs Ram Pratap, ; ; , Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad, ; and Krishna Prasad & Ors.
vs Gauri Kumari Devi, (1962] Supp.
3 S.C.R. 564, referred to.
Sidheshwar Prasad Singh vs Ram Saroop Singh, 1963 B.L.J.R. 802, majority view disapproved.
|
it Petition No. 1147 of 1988.
(Under Article 32 of the Constitution of India) WITH Civil Appeal No. 1782 of 1990.
330 From the Judgment and Order dated 5.6.1987 of the Punjab and Haryana High Court in C.W.P. No. 13 13 of 1986 R. Venkataramani, Mahabir Singh, M.S. Ganesh and C.M. Nayar for the Appearing Parties.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ.
The petitioners are law graduates.
They state that they belong to scheduled castes and sched uled tribes segments of the community.
They are seeking enforcement of the right to equality of opportunity in the matter of appointment to posts in the subordinate judiciary in the State of Haryana.
The State of Haryana has reserved 20% of the posts in the Haryana Civil Service (Judicial Branch) for the scheduled castes and scheduled tribes.
It is the case of petitioners that though 20% of the posts in the Haryana Civil Service (Judicial Branch) have been reserved for scheduled castes and scheduled tribes, the strength of the appointments made since 1969 onwards reveals that hardly 8% of the total posts i.e., 40 to 45% only of the cadre strength have been allotted to the scheduled castes and scheduled tribes.
The petitioners contend that in other States of India different percentages of marks have been prescribed for scheduled castes, scheduled tribes and gener al candidates for determining their suitability and/or eligibility for appointment.
But in Haryana, they contend, minimum marks have been prescribed as 55% for all categories of candidates, namely, scheduled castes, scheduled tribes and general candidates.
In this connection, it may be appropriate to refer to the fact that under the Punjab Civil Services (Judicial Branch) Rules framed in exercise of powers conferred by Article 234 read with proviso to Article 309 of the Consti tution of India, rules have been framed and are prevalent.
Part 'C ' of the rules deals with the rules and instructions for the examination of the candidates for admission to the judicial branch of the Haryana Civil Service.
Part 'C ' of the said rules was brought into force by the Haryana Adapta tion Laws (State and concurrent subjects) Order, 1968.
Rules 7 and 8 of the said rules, inter alia, provides as follows: "7.
No candidate shall be called for the viva voce test unless he obtains at least 45% of marks in the aggregate in all the written papers and 33% marks in the language paper, Hindi (in Devanagri script).
331 8.
No candidate shall be considered to have qualified in the examination unless he obtains at least 55 per cent marks in the aggregate of all papers including the viva voce test.
" It is the case of the petitioners that fixation of the ,standard of marks which the petitioners describe as high standard, has resulted in denial of opportunity to the scheduled castes and ' scheduled tribes thus amounting to denial of equality of opportunity in the jobs which, the petitioners contend, the State otherwise sought to achieve and ought to achieve in favour of scheduled castes and scheduled tribes.
We are of the opinion that equality of opportunity should be striven for and ensured in public employment.
Steps should be taken to see where unequals are competing, conditions must be created by relaxation or otherwise so that unequals compete in terms of equality with others in respect of jobs and employments of the State.
Our Constitu tion so enjoins it.
Article 38 of the Constitution read with Articles 14, 15 and 16 so mandates it.
In order, therefore, to give those who are unequals, and it is accepted that scheduled castes and scheduled tribes for reasons historical or otherwise, are unequal with the general members of the community in respect of ability and qualification for public employment.
Hence, in order to make the unequals compete on conditions of equality certain relaxations and other factors ensuring equality are imperative.
Those groups or segments of society which are by reasons of history or otherwise unable to compete in terms of absolute equality with the members of other communities or groups in the society, should be ensured and assured chances of competing in terms of equality.
They must be helped to compete equally but it is important to emphasise that equality of opportunity is sought to be achieved for the public services or employment.
The efficacy and efficiency of that service is of prime consideration. ' Equality must be there for all to compete for the public services.
Public services and public employ ment do not exist for providing jobs in terms of equality or otherwise to all.
Only public services and public employment must serve public purpose and nothing that hampers or im pairs the efficiency or efficacy of public services cannot and should not be permitted in ensuring conditions of con stitutional equality.
These should be done objectively, rationally and reasonably.
As is often said, it may be that need to ensure equality for scheduled castes and scheduled tribes should not be surrendered on the facile and value based perception of efficiency.
Yet efficiency must be ensured.
Real equality must be accorded.
332 As mentioned hereinbefore, the contention of the peti tioners is that 55% marks in aggregate in all papers includ ing viva voce test constitute rather a high standard for qualification and eligibility.
They contend that for most of the scheduled caste and scheduled tribe aspirants for the job it is difficult to achieve that standard.
It is said that in other parts of this vast land of ours the standard is not as high as that.
Sri Venkatramani, advocate for the petitioners, contended that in other States on an all India basis such a high standard of marks is not envisaged.
Sri Mahabir Singh, learned advocate appearing for the State of Haryana and Sri C.M. Nayar, learned advocate for the Public Service Commission contend that it must be presumed that the minimum percentage desirable for the purpose of efficiency has been prescribed.
It was further submitted by Sri Nayar that in respect of candidates other than scheduled castes and scheduled tribes, normally those obtaining far higher than 55% marks become eligible for consideration.
That may or may not be so but what is required is that we must ensure efficiency in administration.
We must, therefore, objective ly, rationally and by a conscious process conscious in the sense by application of mind to the relevant factors arrive at a percentage which should be considered to be a minimum one in order to ensure the efficiency of the administration.
We are conscious that high efficiency is required because the recruitment is in the judicial branch, that is to say, for prospective judicial officers who will be in charge of administration of justice in the country.
But at the same time, if possible, in order to ensure that there is equality of opportunity, a percentage should be fixed which without, in any way, compromising with the efficiency required for the job which will be attainable by backward communities, that is to say, scheduled castes and scheduled tribes.
Unless such a percentage is fixed on the aforesaid basis and a percentage is fixed for qualification which would normally be unattainable by the scheduled castes and scheduled tribes determined on an objective basis, it would not be possible to ensure equality of opportunity.
Both S/Sri Mahabir Singh and Nayar have urged that the minimum must be presumed to have been so fixed in the Haryana Service.
However, that fact is not apparent and there is nothing on record to indicate that this percentage was fixed deliberately on an analysis and careful examination and determination on the lines and the principles indicated above.
In that view of the matter, in our opinion, in the interest of justice and our constitutional mandates and in the light of the efficiency of the services and with a view to create a sense of justice, it is necessary for the Gov ernment concerned to consider this question as 333 to what should be the minimum percentage of marks necessary for the administration.
We direct that the Government will make a conscious decision objectively before the next selec tions for the post in Haryana Judicial Service take place, and determine a minimum percentage of marks consistent with efficiency and the need for ensuring equality of opportunity to scheduled castes and scheduled tribes.
It was also contended by Sri Venkataramani that some of the candidates belonging to the scheduled castes and sched uled tribes have become overaged, therefore, the Government should also consider whether further relaxation in age in favour of scheduled castes and scheduled tribes can be made; and if so, to what extent without hampering efficiency of the administration.
This should also be considered before the next selections for appointment to the post are made.
In the aforesaid light, special leave is granted in civil appeal No. 15,000/88 and the judgment and order of the High Court of Punjab & Haryana, dated 5th June, 1987 are modified to the extent indicated above.
The writ petition and the appeals are disposed of accordingly without any order as to costs.
P.S.S. Petition disposed of.
| Rule 8 of the Punjab Civil Services (Judicial Branch Rules, 1951, as adapted by the State of Haryana, lays down that no candidate shall be considered to have qualified in the examination unless he obtains at least 55% marks in the aggregate of all papers, including the viva voce test.
The petitioners assailed the said provision on the ground that fixation of 55% marks has resulted in denial of equality of opportunity to the scheduled castes and sched uled tribes segments of the community vis a vis general candidates for determining their suitability and/or eligi bility for appointment in the judicial branch of the Haryana Civil Services in the absence of lower percentage having been prescribed for them as in other States.
Disposing of the writ petition and the appeal, the Court, HELD: 1.
Public services and public employment do not exist for providing jobs in terms of equality or otherwise to all.
Only public services and public employment must serve public purpose and nothing that hampers or impairs the efficiency or efficacy of public services should be permit ted in ensuring conditions of constitutional equality.
These should be done objectively, rationally and reasonably.
329 2.
Scheduled castes and scheduled tribes for reasons historical or otherwise, are unequal with the general mem bers of the community in respect of ability and qualifica tion for public employment.
They are unable to compete in terms of absolute equality with the members of other commu nities or groups in the society.
Hence, in order to make them compete on conditions of equality with others in re spect of jobs and employments of the State certain relaxa tions and other factors ensuring equality are imperative.
Our Constitution so enjoins it.
Article 38 of the Constitu tion read with Article 14, 15 and 16 so mandates it.
[332D E; C] 3.
In the instant case, high efficiency is required because the recruitment is in the judicial branch, that is to say, for prospective judicial officers who will be in charge of administration of justice in the country.
But at the same time, if possible, in order to ensure that there is equality of opportunity, a percentage should be fixed which without, in any way, compromising with the efficiency re quired for the job which will be attainable by backward communities, that is to say, scheduled castes and scheduled tribes.
Unless such a percentage is fixed on the aforesaid basis and a percentage is fixed for qualification which would normally be unattainable by the scheduled castes and scheduled tribes determined on an objective basis, it would not be possible to ensure equality of opportunity.
[333D F] 4.1 The Government is directed to make a conscious decision objectively before the next selections take place, and determine a minimum percentage of marks consistent with efficiency and the need for ensuring equality of opportunity to scheduled castes and scheduled tribes.
[334B] 4.2 The Government should also consider whether further relaxation in age in favour of scheduled castes and sched uled tribes can be made; and if so, to what extent without hampering efficiency of the administration.
This should also be considered before the next selections for appointment to the post are made.
[334C]
|
l Appeals Nos. 153 and 154 of 1960.
Appeals by special leave from the Award dated February 5,1959, of the Industrial Tribunal, Bombay, in Reference (I.T.) No. 212 of 1958.
S.D. Vimadalal, section N. Andley and J. B. Dadachanji, for the appellant in C. A. No. 153/60 and Respondent in C.A. No. 154/60.
M.C. Setalvad, Attorney General for India and Janardan Sharma, for the respondents in C.A. No. 153/ 60 and Appellants in C.A. No. 154/60.
December 9.
The Judgment of the Court was delivered by WANCHOO, J.
The only question raised in these two appeals by special leave is about the quantum of bonus to be paid to the workmen (hereinafter called the respondents) by Voltas Limited (hereinafter called the appellant) for the financial year 1956 57.
The dispute between the parties was referred to the adjudication of the industrial tribunal Bombay.
The appellant, it appears, had already paid 4 1/2 months ' basic wages as bonus for the relevant year but the respondents claimed it at the rate of six months ' basic wages subject to the minimum of Rs. 250 per employee.
169 The tribunal went into the figures and after making the relevant calculations came to the conclusion that the available surplus worked out according to the Full Bench formula justified the grant of bonus equal to five months ' basic salary; it therefore ordered payment of this amount excluding the amount already paid.
The appellant in its appeal claims that the tribunal should have allowed nothing more than what the appellant had already paid; the respondents in their appeal on the other hand claim that they should have been allowed six months ' bonus.
The principles on which bonus has to be calculated have already been decided by this Court in the Associated Cement Companies Ltd. vs Their Workmen (1) and the only question that arises for our consideration is whether the tribunal in making its calculations has acted in accordance with those principles.
This leads us to the consideration of various points raised on behalf of the parties to show that the tribunal had not acted in all particulars in accordance with the decision in the Associated Cement Companies ' case (1).
We shall first take the points raised on behalf of the appellant.
The first point raised is that the tribunal was wrong in not allowing a sum of rupees one lac paid as contribution to political fund as an item of expense.
It is urged that this is a permissible item of expense and therefore the tribunal should not have added it back in arriving at the gross profits.
We are of opinion that the tribunal was right in not allowing this amount as expenditure.
In effect this payment is no different from any amount given in charity by an employer, and though such payment may be justified in the sense that it may not be against the Articles of Association of a company it is nonetheless an expense which need not be incurred for the business of the company.
Besides, though in this particular case the donation considering the circumstances of the case was not much, it is possible that permissible donations may be out of all proportion and may thus result in reducing the available (1) [1059] 2 S.C.R. 925.
22 170 surplus from which low paid workmen are entitled to bonus.
We are therefore of opinion that though the law or the rules of the company may permit the appellant to pay such amounts as donations to political funds, this is not a proper expense to be deducted when working out the available surplus in the light of the Full Bench formula.
The tribunal 's decision therefore on this point must be upheld.
The second contention of the appellant relates to deduction of what it calls extraneous income.
This matter has been considered by this Court in The Tata Oil Mills Co. Ltd. vs Ite Workmen and Others (1) and what we have to see is whether in accordance with the decision in that case, the appellant 's claim for deducting certain amounts as extraneous income is correct.
Learned counsel for the appellant has pressed four items in this connection.
The first item relates to a sum of Rs. 3.47 lacs.
It is said that this was not the income of the year and therefore should not have been taken into account in arriving at the gross profits.
The exact position with respect to this item is not clear and in any case learned counsel for the appellant appearing before the tribunal conceded that the amount could not be deducted from the profits.
In view of that concession we are not prepared to allow the deduction of this amount as extraneous income.
The second item is a sum of Rs. 1.76 lacs in respect of the rebate earned on insurance by the appellant with other companies by virtue of its holding principal agency.
Obviously this is part of the insurance business of the appellant and the work in this connection is entirely handled by the insurance department of the appellant; as such the tribunal was right in not allowing this amount as extraneous income.
The third item is a sum of Rs. 3 33 lacs being gain on foreign exchange transactions.
These transactions are carried on in the normal course of business of the appellant.
As the tribunal has rightly pointed out, if there had been loss on these transactions it would have certainly gone to reduce the gross profit,%; if there is a profit it has to be taken into account as (1)[1960] 1 S.C.R. 1. 171 it has arisen out of the normal business of the appellant.
The tribunal was therefore right in not allowing this amount as extraneous income.
The last item is a sum of Rs. 9.78 lacs being commission on transactions by government agencies and other organisations with manufacturers abroad direct.
It seems that the appellant is the sole agent in India of certain foreign manufacturers and even when transactions are made direct with the manufacturers the appellant gets com mission on such transactions.
The tribunal has held that though the transactions were made direct with the foreign manufacturers, the respondents were entitled to ask that the commission should be taken into account inasmuch as the respondents serviced the goods and did other work which brought such business to the appellant.
It seems that there is no direct evidence whether these particular goods on which this commission was earned were also serviced free by the appellant like other goods sold by it in India.
We asked learned counsel for the parties as to what the exact position was in the matter of free service to such goods.
The learned counsel however could not agree as to what was the exact position.
It seems to us that if these goods are also serviced free or for charges but in the same way as other goods sold by the appellant in India, the respondents are entitled to ask that the income from commission on these goods should be taken into account.
As however there is no definite evidence on the point we cannot lay down that such commission must always be taken into account.
At the same time, so far as this particular year is concerned we have to take this amount into account as the appellant whose duty it was to satisfy the tribunal that this was extraneous income has failed to place proper evidence as to servicing of these goods.
A claim of this character must always be proved to the satisfaction of the tribunal.
In the circumstances we see no reason to interfere with the order of the tribunal so far as this part of its order is concerned.
Two other points have been urged on behalf of the 172 appellant with respect to the interest allowed on capital and on working capital.
The tribunal has allowed the usual six per cent on capital and four per cent on working capital.
The appellant claimed interest at a higher rate in both cases.
We agree with the tribunal that there is no special reason why any higher rate of return should be allowed to the appellant.
This brings us to the objections raised on behalf of the respondents.
The main objection is to a sum of Rs. 4.4 lacs allowed by the tribunal as income tax, which is said to be with respect to the previous year.
It appears that there is a difference between the accounting year of the appellant and the financial year.
In the particular year in dispute there was an increase in the rate of tax which resulted in extra payment which had to be paid in this year.
In these special circumstances, therefore, the tribunal allowed this amount and we see no reason to disagree.
Next it is urged that the tribunal had allowed a sum of Rs. 4.76 lacs for making provision for gratuity as a prior charge.
This is obviously incorrect, as this Court has pointed out in the Associated Cement Companies ' case (1) that no fresh items of prior charge can be added to the Full Bench formula, though at the time of distribution of available surplus such matters, as provision for gratuity and debenture redemption fund, might be taken into account.
This disposes of the objections relating to the accounts.
Two other points have been urged on behalf of the respondents.
They are with respect to (1) salesmen and (2) apprentices.
The tribunal has excluded these two categories from the award of bonus made by it.
The respondents contend that they should also have been included.
We are of opinion that the decision of the tribunal in this behalf is correct.
So far as salesmen are concerned, the tribunal has examined the relevant decisions of other tribunals and has come to the conclusion that salesmen who are given commission on sales are not treated on par with other workmen in the matter of bonus.
It has also been found that the clerical work done by salesmen is small and incidental to their duty as such; salesmen have (1) 173 therefore been held not to be workmen within the meaning of the Industrial Disputes Act.
The tribunal has pointed out that the commission on an average works out at about Rs. 1,000 per mensem in the case of salesmen and therefore their total emoluments are quite adequate.
Besides, the salesmen being paid commission on sales have already taken a share in the profits of the appellant on a fair basis and therefore there is no justification for granting them further bonus out of the available surplus of profits.
As for the apprentices, the tribunal has held that there is a definite term of contract between them and the appellant by which they are excluded from getting bonus.
Besides, as the appellant has pointed out, the apprentices are merely learning their jobs and the appellant has to incur expenditure on their training and they hardly contribute to the profits of the appellant.
The view of the tribunal therefore with respect to apprentices also is correct.
We now turn to calculation of the available surplus according to the decision in the Associated Cement Companies ' case (1).
The gross profit found by the tribunal will stand in view of what we have said with respect to various items challenged by either party.
The chart of calculation will be as follows: in Lacs Gross profits Rs. 109.97 Less depreciation 3.28 Balance 106.69 Less income tax @ 51.15 per cent.
54.20 Balance 52.49 Less dividend tax, wealth tax etc.
7.50 Balance 44.99 Less return on capital at 6 per cent.
13.20.
Balance 31.79 Less return on working capital at 4 per cent.
1.66 Available surplus 30.13.
(1) 174 Out of this, the tribunal has allowed five months ' basic wages as bonus to the respondents which works out at Rs. 16.80 lacs.
In the circumstances it cannot be said that the award of the tribunal is not justified.
We do not think that we would be justified in giving anything more than what the tribunal has awarded, because the appellant has to provide for a fund for gratuity, for it is a new concern which took over the old employees of another concern when it was started and has thus a greater liability towards gratuity than otherwise would be the case.
We are therefore of opinion that the tribunal 's award of five months ' basic wages as bonus for the year in dispute should stand.
We therefore dismiss both the appeals.
In the circumstances we pass no order as to costs.
Appeals dismissed.
| Under the customary law prevalent amongst the Hindu Jats of Grewal got in Ludhiana, a daughter is a preferential heir to her father in respect of his self acquired property to his collaterals.
Rattigan 's Digest of Customary Law, paragraph 23, which records the correct law on the point, is not in conflict with Riwaji am, 1882, Question NO. 43, which refers only to ancestral property and not to self acquired property at all.
Mt. Hurmate vs Hoshiaru, A.I.R. 1944 Lah.
21, approved.
Mohinder Singh vs Kher Singh, A.I.R. 1949 East Punjab 328, disapproved.
Mt. Subhani vs Nawab, A.I.R. 1941 (P.C.) 21, referred to.
Case law discussed.
The doctrine of surrender in Hindu Law is based on a theory of complete self effacement by the widow in favour of the reversioner and in order that such surrender can accelerate the reversion, it must be of the entire interest in the entire property.
The law does not recognise a partial self effacement nor a division between ancestral and non ancestral property.
The exception made in respect of a small portion of the property retained for the widow 's maintenance does not detract from the rigour of the rule.
Rangaswami Gounden vs Nachiappa Gounden, (1918) L.R. 46 I.A. 72 and Phool Kaur vs Prem Kaur, ; , referred to.
Consequently, in a case where a Hindu widow of the Jat Grewal got made a gift only of the self acquired property of her husband to her daughters such gift had not the effect of a surrender in law so as to accelerate the daughters ' succession and the gift could not be valid beyond her lifetime.
|
Special Leave Petition (Civil) No. 2725 of 1988 From the Judgment and order dated 12.11.1987 of the Central Administrative Tribunal.
New Bombay in Tr.
Appln.
No. 1 of 1986 G. Rama Swamy, Additional Solicitor General, A. Subba Rao and P. Parmeshwaran for the Petitioners.
Urmila Sirur for the Respondent.
The following order of the Court was delivered by THAKKAK, J: This matter raises a question of mega importance viz. whether failure to supply a copy of the Report of the Enquiry officer to the delinquent before the Disciplinary Authority makes up 211 his mind and records the finding of guilt as against him would constitute violation of Article 311(2) of the Constitution of India and violation of principles of natural justice.
This question appears to be resintegra so far as this Court is concerned notwithstanding the contention of the learned counsel for the petitioner to the contrary.
Counsel contends that the point is directly or at any rate by necessary implication covered in the petitioners ' favour.
Reliance in this connection is placed on an order passed by a Bench comprising of three Hon 'ble Judges of this Court in C.A. No. 537 of 1988 and on an order passed by a Bench comprising of two Hon 'ble Judges of this Court in the Secretary, Central Board of Excise and Customs & Ors vs K.S. Mahalingam ; The facts of both these matters reveal that the Enquiry officer 's report was not made available to the delinquent before the Disciplinary Authority passed the final order recording the finding of guilt against him.
But in the aforesaid two judgments to which our attention has been called, the sole issue in focus was regarding the necessity for serving a second show cause notice as regards the measure of penalty before the imposition of the penalty in the context of the argument that such a notice is no more essential in view of the 42nd Amendment of the Constitution.
Now an Enquiry officer merely makes his recommendations, by his report in the light of the evidence recorded by him and the submissions urged before him.
The tentative view expressed by the Enquiry Officer may or may not be accepted by the Disciplinary Authority.
It is the Disciplinary Authority who makes up his mind on the basis of the report and reaches the conclusion whether or not the delinquent is guilty.
He may or may not accept the recommendations and may or may not accept the report.
The disciplinary Authority builds his final conclusion on the basis of his own assessment of evidence taking into account the reasoning articulated in the Enquiry officer 's Report and the recommendations made therein.
If the report is not made available to the delinquent, this crucial material which enters into the consideration of the Disciplinary Authority never comes to be known to the delinquent and he gets no opportunity whatsoever to have a say in regard to this critical material at any point of time till the Disciplinary Authority holds him guilty or condemns him.
Such would be the consequence even if the Enquiry officer has found him to be blameless and recommended his exoneration in case the Disciplinary Authority has disagreed with the Enquiry Report.
There can be glaring errors and omissions in the report.
Or it may have been based on no evidence or rendered in disregard of or by overlooking evidence.
Even so, the delinquent will have no opportunity to point out to the Disciplinary 212 Authority about such errors and omissions and disabuse the mind of the Disciplinary Authority before the axe falls on him and he is punished.
It appears to us to be a startling proposition to advance that the only authority which really and actually holds him guilty need not afford any opportunity to the person against whom such finding of guilt is recorded and the material on which he acts.
It needs to be highlighted that serving a copy of the enquiry report on the delinquent to enable him to point out anomalies, if any, therein before the axe falls and before finding about guilt is recorded by the Disciplinary Authority is altogether a different matter from serving a second show cause notice to enable the delinquent in the context of the measure of the penalty to be imposed.
It appears to us that the Report of an Enquiry officer is akin to a Report submitted by the Commissioner for taking accounts in a partnership suit to the Court wherein he summarises the evidence and expresses his opinion and records his tentative findings for the benefit of the Court.
The Report of the Commissioner is no doubt taken into account by the Court but then the Court builds its conclusion only after making available the Report to the parties and after hearing the parties on the Commissioner 's Report.
It would be a startling proposition to propound that the Court can accept or reject the Report of the Commissioner with or without modification, without even showing the same to the parties or without hearing the parties in the context of the report.
The true legal position in regard to the findings recorded by an Enquiry officer and the legal effect of his report as spelled out by us hereinabove is buttressed by a decision rendered by a Constitution Bench of this Court in Union of India vs H. C. Goel, ; a quarter century ago wherein the following proposition have been enunciated: (1) the Enquiry officer holds the enquiry against the delinquent as a delegate of the Government; (2) the object of the enquiry by an Enquiry officer is to enable the Government to hold an investigation into 1.
In a case like the present one where the power to dismiss or remove vests unto the Disciplinary Authority and the Enquiry Report is required to be submitted to the Disciplinary Authority (and not to the Government) the propositions will be applicable to the Disciplinary Authority.
213 the charges framed against a delinquent, so that the Government can, in due course consider the evidence adduced and decide whether the said charges are proved or not; (3) "the findings on the merits" recorded by the Enquiry officer are intended merely to supply appropriate material for the consideration of the Government.
Neither the findings nor the recommendations are binding on the Government as held in A.N. D 'silva Union of India, [1962] (Suppl) (1) SCR 968.
(4) The enquiry report along with the evidence recorded by the Enquiry officer constitute the material on which the Government has ultimately to act.
That is the only purpose of the enquiry and the report which the Enquiry Officer makes as a result thereof.
It is thus evident that the findings recorded by the Enquiry officer become infused with life only when the Disciplinary Authority applies his mind to the material which inter alia consists of the report of the Enquiry officer along with the evidence and the record etc.
If therefore the basic material comprising of the report of the Enquiry officer which has been taken into consideration by the Disciplinary Authority for holding that the delinquent is guilty as per the view expressed by his delegate namely, Enquiry Officer, is not made available to the delinquent till the axe falls on him, can it be said that the principles of Natural Justice have been complied with? Can it be said that the delinquent had an opportunity to address the mind of the Disciplinary Authority who alone in reality found him guilty? Since it cannot be so asservated it will be difficult to resist the conclusion that principles of natural justice have been violated and the delinquent has been denied reasonable opportunity.
It is no doubt true that when the Constitution Bench rendered the aforesaid decision in H.C. Goel 's case Article 311(2) had not yet been amended.
However, that makes little difference.
By virtue of the amendment what has been dispensed with is merely the notice in the context of the measure of penalty proposed to be imposed.
1 he opportunity required to be given to a delinquent which must be reasonable opportunity compatible with principles of Natural Justice has not been dispensed with by virtue of the said amendment.
Therefore the view taken in the context of the contention that the Discipli 214 nary Authority need not afford an opportunity to the delinquent in regard to the measure of the punishment will not hold good in the context of the present argument in the background of the non supply of the report of the Enquiry officer.
In the event of the failure to furnish the report of the Enquiry officer the delinquent is deprived of crucial and critical material which is taken into account by the real authority who holds him guilty namely, the Disciplinary Authority.
He is the real authority because the Enquiry officer does no more than act as a delegate and furnishes the relevant material including his own assessment regarding the guilt to assist the Disciplinary Authority who alone records the effective finding in the sense that the findings recorded by the Enquiry officer standing by themselves are lacking in force and effectiveness.
Non supply of the report would therefore constitute violation of principles of Natural Justice and accordingly will be tantamount to denial of reasonable opportunity within the meaning of Article 311(2) of the Constitution.
The question arising in this matter is not with regard to the giving of notice limited to the question of what penalty should be imposed.
The question is whether it is the right of the delinquent to persuade the Authority which makes up its mind as regards the guilt of the delinquent that such a finding is not warranted in the light of the Report of the Enquiry officer.
The decision on this point will affect millions of employees in service today as also those who may enter Government service hereafter for times to come.
The matter thus needs careful consideration in depth, and if necessary at length.
As this Bench is comprised of two Judges, we do not consider it proper on our part to pass any order in regard to the present petition though prima facie we are not inclined to grant leave in view of the two recent decisions cited before us.
In any view of the matter we do not think that it is proper on our part to pass any order notwithstanding the fact that it appears to us that this question was not directly in issue and has neither been presented nor discussed in all its ramifications in the aforesaid two matter.
In fact this proposition has not been discussed at all in these judgments.
It is therefore futile on the part of the petitioners to contend that the point is covered and concluded in their favour.
Even so we prefer to be guided by considerations of propriety and refer the matter to a larger bench.
We also wish to place on record that merely granting leave in a matter like this will serve no better purpose than prolonging the misery of all concerned.
It may be that after ten years the appeal is dismissed.
It may happen that the employee may die 215 meanwhile.
It may also happen that the order of reinstatement may be confirmed after ten years.
In that event the public exchequer will have spent lakhs of rupees without taking any work from the employee.
With the pendency of an appeal on this point hundreds of allied matters may have to be admitted and tagged on to the present matter.
The point therefore deserves to be settled at this stage itself by a larger Bench.
Learned Counsel for the respondents caveator prays that if the Court is inclined to consider this question after granting special leave, the petitioner should be directed to pay the past arrears and continue to pay the salary to the respondent who has succeeded before the Central Administrative Tribunal.
This question also, in our opinion, should better be dealt with by the larger Bench before which this matter is placed as per the directions of the Hon 'ble Chief Justice.
We accordingly refer this matter to a larger Bench.
| % These appeals and the special leave petitions were directed against the judgment and order of the Andhra Pradesh Administrative Tribunal, quashing the panel of names prepared by the State Government under r. 8 of the Andhra Pradesh Medical & Health Service Special Rules, 1982 to fill up the promotional post of Professor of Cardiology as on 1st July, 1983, reckoning the teaching experience of all the Assistant Professors in that super speciality in order of seniority, holding that the Assistant Professors of Cardiology in different medical colleges in the State who had the requisite five years ' teaching experience under r. 5 of the Rules having the alternate qualification in cl.
(b) of Annexure II to the Rules were eligible for promotion as such, and directing the State Government to draw up a fresh panel after considering the claims of all such Assistant Professors of Cardiology treating them as possessing the requisite teaching experience in terms of r. 5 for the promotional post of Professor of Cardiology as on 1st July, 1983.
There were four vacancies in the post of Professor of Cardiology.
On 1st July, 1983, the State Government prepared a panel of all Assistant Professors of Cardiology in Government Medical Colleges in the State having the requisite teaching experience under r. 5 after obtaining the post graduate qualification as specified in the Annexure II, and included in the panel the names of Dr. G. Subramanayam, Dr. A. Rajagopala Raju and Dr. Soghra Begum, Assistant Professors of Cardiology, who had on the crucial date 1st July, 1983 five years ' teaching experience after obtaining their post graduation degree in DM (Cardiology) as enjoined by r. 5 read with the first proviso thereto, and by order dated the 17th August, 1983, promoted them to the post of Professor of Cardiology.
174 The respondents Dr. R. Murali Babu Rao and Dr. G. Sai Gopal then moved the Andhra Pradesh Administrative Tribunal assailing the impugned order of promotion, characterising the action of the State Government in the matter of computation of five years ' teaching experience after post graduation degree in DM (Cardiology) as being wholly arbitrary and irrational.
The appellant C.H. Umesh Chandra came up in appeal as the view expressed by the Tribunal prejudicially affected him.
He had obtained his post graduate degree in MD in Medicine in December, 1975 and his second post graduate degree in DM (Cardiology) in April, 1980.
In view of the fact that he had obtained his second post graduate degree in DM (Cardiology) in April, 1980, he sought to support the stand of the Government as he had a better chance of promotion to the post of Professor of Cardiology.
After these matters were heard and the judgment was reserved by this Court, a similar question came up before the Court in State of Orissa vs Dr. Sivsanker Lal Bajoria & Anr.
, Civil Appeal No. 4456 of 1986 by Special Leave granted to the State Government of Orissa against the judgment and order of the High Court, evolving a rule of substantial compliance, and therefore, these matters were re listed.
In the Civil Appeal No. 4456 of 1986, the Court issued notice to the Medical Council of India to clarify its stand as to the eligibility of Assistant Professors/Readers in Cardiology to the promotional post of Associate Professor/Professor in Cardiology and in particular to the import of the term 'two years special training ' within the meaning of Regulation 5(2)(b) of the Indian Medical Council Regulations, 1970, framed under section 33 of the .
The Court desired the Indian Medical Council to specify the particular institution where such training was imparted.
An affidavit sworn to by Assistant Secretary on behalf of the Medical Council of India was filed, placing its point of view.
Dismissing the appeals and the special leave petitions, the Court ^ HELD: The issue involved was of far reaching importance to the entire medical profession as similar problem was faced by the State Governments in promoting Readers / Associate Professors in a speciality to the post of Professor in that speciality in the medical colleges.
[179E F] In these cases, the entire controversy was due to the failure of the 175 State Government to give the benefit of the teaching experience gained by the Assistant Professors after they had obtained their post graduate degree in MD/MRCP in Medicine under cl (b) of Column 5 in serial No 17 of Annexure II.
[187G] Rule 4 of the Rules in terms speaks of the eligibility of such class of Assistant Professors of Cardiology for promotion to the post of Cardiology who possess five years ' teaching experience.
The expression 'teaching experience ' as defined in r. 5 speaks of 'teaching experience in the speciality concerned in a medical college or an institute recognised by the Medical Council of India after obtaining post graduate qualification as specified in Annexure II '.
The words used are 'after obtaining post graduate qualification ', it does not speak of the second postgraduate qualification.
Rule 5, therefore, takes in both the qualifications specified in clauses (a) and (b) of Column 5 in serial No. 17 of annexure II, namely, (a) DM (Cardiology) and (b) MD/MRCP in Medicine with two years ' training in Cardiology.
On the crucial date, 1st July, 1983, cl.
(b) was very much there and the Government was bound to consider the claims of the aforesaid respondents like other officers belonging to that class before drawing up a panel under r. 8.
There was no warrant for the submission that since under r. 9(2), an Assistant Professor with the requisite five years ' teaching experience after obtaining his second post graduate degree in DM (Cardiology) would have preferential claim over those having the qualification mentioned in cl.
(b) i.e. MD/MRCP in Medicine with two years ' training in Cardiology, the State Government was entitled to ignore the claims of the latter class altogether.
On its plain construction, r. 9(2) is a rule of preference and has, therefore, to be applied at the stage of making appointments to the post of Professor of Cardiology and not while drawing up a panel under r. 8.
The Government was obviously misled by the wrongful assumption (i) that since alternate qualification in cl.
(b) of Column 5 in serial 'No. 17 of Annexure II had been deleted by GOMS No. 789 dated 12th December, 1983, it was not necessary for it to consider the claims of the aforesaid respondents and others similarly situate in drawing up a list of eligible Assistant Professors of Cardiology, and (ii) that such officers were rendered ineligible by reason of r. 9(2) and, therefore, their claims needed not to be considered.
The Tribunal was, therefore, justified in quashing the impugned panel prepared by the State Government under r. 8 of the Rules and in directing the Government to prepare a panel afresh after considering the claims of all the Assistant Professors of Cardiology with five years ' teaching experience after their post graduation in MD/MRCP in Medicine with 2 years ' training in Cardiology.
[189C H; 190A B] 176 There was no substance whatever in the contention that the alternate qualification in cl.
(b) being in conflict with the recommendation of the Medical Council of India, must be deemed to have been replaced by implication and was non est w.e.f. 31st May, 1977.
The Government had no doubt the recommendations of the Council, conveyed by the letter of the Secretary dated 26th April, 1978, that after 31st May, 1977, for all teaching posts higher than Tutor in higher specialities i.e. Cardiology/Neurology/Gastro Enterology/Thoracic Surgery/ Neuro Surgery/Plastic Surgery/ Paediatric Surgery/ Urology, the candidates must possess the post graduate qualification in the speciality concerned i.e. DM/M.Ch.
after MD/MS or other equivalent qualification, as might be approved by the Council from time to time.
The letter also went on to say that the existing qualification MD/MS or an equivalent qualification with two years ' special training in a recognised training centre in the speciality concerned, would cease to be sufficient qualification for appointment to the aforesaid teaching posts from that date.
Nevertheless, the Government failed to appreciate that the recommendation of the Council was only recommendatory and could not override a rule framed under the proyiso to article 309 of the Constitution.
The panel had to be drawn up by the State Government strictly in conformity with the rules of recruitment made under the proviso to article 309 and not on the basis of the recommendation of the Council.
[190C F] As was manifest from the affidavit filed by the Indian Medical Council, the Council is only a recommendatory body.
Constituted under section 3 of the Act, the Indian Medical Council is an expert body intended and meant to control the minimum standards of medical education and to regulate their observance.
A fortiori, the recommendations made by the Council or the Regulations framed by it are only recommendatory and not mandatory.
It is not for the Council to prescribe qualifications for recruitment to posts of Professors.
Readers and Lecturers; it can only lay down broad guidelines therefor.
Such qualifications have necessarily to be prescribed by the framing of Rules under the proviso to article 309.
The right to be considered for promotion is a condition of service and it can only be regulated by a rule framed under the proviso to article 309.
The Medical Council in its affidavit accepted that there were no special guidelines laid down for Cardiology, and asserted that some Universities/Institutions might have prescribed the syllabus.
The contention of the State Government and the other appellants that the recommendations of the Medical Council as conveyed by the letter of the Secretary dt.
26th April, 1975, rendering Assistant Professors of Cardiology, having the alternate qualification of 177 post graduate degree in MD/MRCP in Medicine, ineligible for promotion to the post of Professor of Cardiology even though they had the requisite five years ' teaching experience, appeared to be wholly misconceived and unwarranted.
[190G H; 191E H; 192A] The present case was concerned with the meaning of the expression 'teaching experience ' occurring in r. 5 of the Rules, and with the class of officers who, after their appointment as Assistant Professors of Cardiology on having obtained post graduate degree in MD/MRCP had been teaching the subject Cardiology for years together.
Indeed, the alternate qualification specified in cl.
(b) of column 5 in serial No. 17 of Annexure II takes in this class of officers and makes them eligible under r. 5.
On the crucial date, 1st July, 1983, cl.
(b) was still there and the Government was bound to consider the claims of such officers before drawing up a panel under r. 8.
[193C E] Emphasis was laid by counsel for the State Government and other appellants on the words 'with two years training in Cardiology ' with the submission that none of the respondents had the requisite training.
The expression 'special training ' is defined in r. 7 as the work done by an Assistant Professor in the concerned recognised unit and exclusively devoted to the speciality.
The question then arises for the applicability of r. 7, there are two conditions to be fulfilled, firstly, there must be an institution set up either by the Medical Council of India or by the Government or Universities exclusively devoted to imparting teaching in the different courses of Cardiology, and secondly, such an institution should have been recognised by the Government.
There was no material on record to establish that there was any such recognised unit either in the State of Andhra Pradesh or elsewhere.
That apart, it could not be appreciated why the Associate Professors, Readers, Assistant Professors of Cardiology, teaching Cardiology in the medical colleges for years together, should not be regarded as having special training in Cardiology within the meaning of cl.
(b) of column 5 in the serial No. 17 of Annexure II.
Any other view would lead to a very anomalous situation.
It would be a travesty of justice if the officers belonging to the class like the respondents representationists Dr. R. Murali Babu Rao and Dr, G. Sai Gopal, Assistant Professors of Cardiology with five years ' teaching experience after their post graduation in MD/MRCP in Medicine as on the 1st July, 1983, were not empanelled by the State Govt.
under r. 8 to fill up vacancies in the post of Professor of Cardiology, even though they possessed the requisite qualifications under r. 5 of the Rules.
It must be remembered that the alternate qualification in cl.
(b), namely MD/MRCP in Medicine with two years ' training in 178 Cardiology was still there and it was not open to the Government to ignore the same merely because it was in conflict with the recommendation of the Medical Council of India, as conveyed in the letter of the Secretary dated 26th April, 1976.
[193F H; 194A E] There were many distinguished Assistant Professors/Readers/ Associate Professors of Medicines in the medical colleges in the different States, teaching Cardiology as a subject, who had gained sufficient expertise and knowledge in the different branches of Cardiology, and it would be unfortunate if such Assistant Professors/Readers/Associate Professors of Medicine were, merely because they were MD/MRCP in Medicine, considered ineligible for appointment to the post of Professor of Cardiology, even though they had the requisite teaching experience in the many branches of Cardiology for the last 15 to 20 years in the medical colleges.
In view of this, the expression 'five years ' teaching experience ' occurring in r. 5 of the Rules as well as the phrase 'with two years ' training in Cardiology ' in cl.
(b) of column 5 in serial No. 17 of Annexure II of the Rules, must receive a liberal construction.
The experience gained by them while teaching in different branches of Cardiology should be treated as sufficient to meet the requirements of r. 5 of the Rules as well as of cl.
The Court expressed the hope that the Medical Council of India, the Union Government and the State Governments as also the State Medical Councils would give a second thought to the problem and try to evolve a solution to the problem by which the right of such persons to be considered for promotion to the post of Professor of Cardiology could be kept preserved without allowing any fall in the standards of further education.
[196H; 197A D] State of Madhya Pradesh vs Km.
Nivedita Jain, ; and Union of India & Ors.
vs S.B. Kohli & Anr., , referred to.
|
Civil Appeal No. 3121 of 1981.
From the Judgment and Order dated 28 9 1979 of the Madhya Pradesh High Court in Misc.
Petition No. 408 of 1978.
M.K. Ramamurthi and H.S. Parihar for the Appellants.
Maheshwari T. V.S.N. Chari and R.N. Poddar for the Respondents.
The Judgment of the Court was delivered by KHALID, J.
The question involved in this appeal brings to fore how the equality doctrine embodied in the Constitution of India is attempted to be flouted by some authorities under cover of artificial divisions, dividing persons doing the same work into two 103 groups without any justification and denying to one group by way of pay and emoluments what the other group gets.
We do not propose to examine the width of the quality provisions contained in article 39(d) in all its manifold aspects but would like to restrict it in its application to the facts of this case, in our attempt to see whether the High Court was justified or not, in declining relief to the petitioners.
Now the facts: This appeal by special leave is directed against the Judgment of a Division Bench of the High Court of Madhya Pradesh at Jabalpur in Miscellaneous Petition No. 408 of 1978, dismissing the petition challenging the Order of the Government of India accepting the recommendations of the Third Pay Commission dividing Senior Draughtsmen into two groups with different pay scales, which according to the appellants violated Articles 14 and 16 of the Constitution.
The Appellants Nos.
1 to 8 are Senior Draughtsmen in the Ordnance Factories under the Ministry of Defence, Department of Defence Production and the Director General of Ordnance Factories.
Appellants Nos.
1 to 5 were promoted on different dates to the post of senior Draughtsman when they were working as Draughtsmen.
Appellants Nos.
6, 7 & 8 were directly recruited as Senior Draughtsmen in the Vehicle Factory, Jabalpur on different dates.
Appellant No. 9 is a registered Association of the Employees working in the Design/Drawing Office of the Defence Establishments under the Ministry of Defence, etc.
There are 33 establishments under the Ministry of Defence Production and Director General of ordnance Factories, Calcutta.
In these establishments, there are two categories of Drawing Office Staff; (1) Senior Draughtsman and (2) Draughtsman.
Senior Draughtsmen are either directly recruited or promoted from the post of Draughtsmen.
At all relevant times, all the Senior Draughtsmen throughout the above establishments, were drawing the same pay scale.
The first and the second Pay Commission set up by the Government of India, recommended same scales of pay for all the Senior Draughtsmen.
A Third Pay Commission was set up by the Government of India under the Chairmanship of Shri Raghubar Dayal, a retired Judge of the Supreme Court of India and consisting of three other members.
One of the recommendations of this Pay Commission, related to the scales of pay of Draughtsmen and Senior Draughtsmen, 104 Draughtsmen were to be in the scale of Rs. 330 560 while the Senior Draughtsmen were divided into two groups with two scales of pay, Rs. 330 560 and Rs. 425 700.
It is this division of Senior Draughtsmen that was under challenge before the High Court.
Representations were made by the Petitioner against this grouping by the Third Pay Commission, and they pleaded that there should not be any discrimination in the pay scales of Senior Draughtsmen as was recommended by the Third Pay Commission.
Similar representations were made by others also like Senior Rate Estimator, Senior Rate Fixer, Senior Planner and Supervisor etc.
Some representations were accepted by the Government but not the representations made by the appellants ' Association.
Aggrieved by this unhelpful attitude of the Government in not accepting their representation, the appellants moved the High Court under Article 226 of the Constitution, Their case before the High Court was that Senior Draughtsmen discharged identical duties and performed similar work.
That being so there was little or no justification in putting 50% of them in a higher scale of pay and 50% others in a lower scale of pay.
This grouping was without any intelligible differentia.
The High Court referred to a decision of this Court in Kishori Mohanlal Bakshi vs Union of India(1) and sought support from it to deny relief to the petitioners.
That was a case where the grouping of Income tax Officers as Class I and class II with different scales of pay and different channel of Promotion was questioned.
This Court observed in that Judgment as follows: "It might very well be that "matters relating to employment or appointment to any office" in article 16(1) are wide enough to include the matter of promotion.
Inequality of opportunity for promotion as between citizens holding different posts in the same grade may, therefore, be an infringement of article 16.
Thus, if of the Income tax Officers of the same grade, some are eligible for promotion to a superior grade, and others are not, the question of contravention of article 16(1) may well arise.
But no such question can arise at all when the rules make Income tax Officers of Class I, eligible for appointment as Assistant Commissioner, but make 105 Income tax Officers of Class II eligible for promotion as Income tax Officers of Class I but not for promotion to the post of Assistant Commissioners.
There is no denial in such a case of equality of opportunity as among citizens holding posts of the same grade.
As between citizens holding posts in different grades in Government service there can be no question of equality of opportunity.
article 16 does not forbid the creation of different grades in the Government service.
The abstract doctrine of equal pay for equal work has nothing to do with article 14.
article 14, therefore, cannot be said to be violated whose the pay scales of Class I and Class II Income tax Officers are different though they do the same kind of work.
Incremental scales of pay can be validly fixed dependent on the duration of an officers service.
" The High Court also referred to the decisions of this Court in State of Punjab vs Joginder Singh(1), Unikat Saakunni Menon vs State of Rajasthan(2) and State of Mysore & Anr.
vs P. Narsingh Rao(3) in which cases also certain grouping of employees were challenged as violative of article 14 & 16, which challenge was repelled by the Supreme Court.
The High Court relied upon these decisions and held that "It is therefore evident that it was open to the Government to fix two different pay scales for Senior Draughtsmen," and that "It was for the Government to decide what pay scale should be provided to the different.
classes of employees and simply because they have been provided different pay scales that would not amount to discriminations.
" The High Court was told that all the Senior Draughtsmen did the same kind of work and discharged same or similar duties and that therefore there was no justification for a distinction being made between the two classes of Senior Draughtsmen, providing two different pay scales on the basis of seniority, Denial of the higher scale of pay to one class of Senior Draughtsmen, only on the ground of length of service was, according to the appellants, wrong.
The Government brought in this classification, by its Order dated 1 7 1978, directing that only Senior Draughtsmen, holding that post on 31 12 1972, would be given the Senior scale and not 106 those who did not hold that post on 31 12 1972.
This basis, the appellants, contended was unsupportable.
These contentions did not appeal to the High Court.
While repelling the arguments of the Petitioners, the High Court observed that "The petitioners are unable to show a single authority in support of their contention that all the persons doing the same work are entitled to same scale of pay.
" It is the correctness of this decision that falls to be decided in this appeal.
Before discussing the factual matrix of the case, we will refer to the Order passed by the Government of India on 27th January, 1978, which brought into effect this difference in the pay scale.
The said Order reads as follows: "The undersigned is directed to refer to Sl.
No. 32 of Part D, Section I, in the First Schedule to the Civilians in Defence Services (Revised Pay) Rules, 1973 and to say that the President is pleased to decide that, as recommended by the Third Pay Commission in para 81, Chapter 14, of their report, half the number of posts of Draughtsman in the DGOF Organisation on the present pay scale of Rs. 205 7 240 8 280 will be placed in the revised scale of Rs. 425 15 500 EB 15 560 20 700 and the remaining half in the revised scale of Rs. 330 10 380 EB 12 500 EB 15 560. . . . .
On their allocation to the revised scale of Rs. 425 700 and Rs. 350 560, the existing Draughtsman in the present pay scale of Rs. 205 280 who are brought on to the revised scale of Rs 330 560 would continue to retain their present designation as a personal to them.
The placement of the existing Draughtsman in the higher revised pay scale of Rs. 425 700 will be on the basis of seniority, subject to the rejection of the unfit.
Any administrative instruction that may be considered necessary may be issued by you.
These orders will take effect from 1 1 73.
" It is pursuant to this Order that the change in the emoluments of the petitioners ' group of Draughtsmen was effected.
107 It has to be borne in mind that this differentiation is not based on any intelligible ground.
The group of Draughtsmen entitled to the higher scale of pay, is not selected by any process nor is it based on any merit cum seniority basis, but is based only on seniority cum fitness.
There is no denial anywhere that both these types of Draughtsmen do the same work and discharge the same functions and duties.
According to the recommendations of the Third Pay Commission, a Draughtsman has to get Rs. 330 10 380 EB 12 500 EB 15 560, while Senior Draughtsman, like the appellants, who have become so on promotion, will continue to get the same scale of pay and not the higher scale of pay.
In other words, the promoted persons like the appellants, are without any monetary benefit to them.
The pay that they would get as Senior Draughtsman, would be the same as a Draughtsman would get under the Third Pay Commission.
That is, for the same work and same functions, the appellants would get less pay than the other group of Senior Draughtsmen.
The explanation is that this division is based on seniority.
This cannot be accepted as sufficient to meet the requirements of law.
By seniority, a Senior Draughtsman will get higher pay with the increments that he earns proportionate to the number of years he is in service.
Here that is not the case.
It is the classification of the Senior Draughtsmen into two groups, that is responsible for the higher pay.
For this classification, the Government must be able to satisfy the Court of certain other tests which are non existent, in this case, since it is not in dispute that Senior Draughtsmen, belonging to the two Divisions, do equal and same work.
In view of the total absence of any plea on the side of the respondents, that the Senior Draughtsmen who are placed in the advantageous group, do not perform work and duties more onerous or different from the work performed by the appellants group, it will have to be held that this grouping violates Article 14 of the Constitution.
The High Court did not have the advantage of a decision of this Court in Randhir Singh vs Union of India & Ors.(1), to which one of us was a party, which evolved the equality doctrine embodied in Article 39(d) and read Article 14 into it; while considering the complaint of a driver who was originally in the Army but later employed as a driver constable in Delhi Police Force under the Delhi Administration and who was denied the same pay as was available to the other drivers in the service of the Delhi Administration.
This Court 108 allowed the Writ Petition and directed the concerned authorities to pay the petitioners in that case, salary at least equal to the Drivers of the Railway Protection Force.
Disagreeing with the plea, put forward by the Union of India this Court observed as follows: "The Counter Affidavit does not explain how the case of the drivers in the police force is different from that of the drivers in other departments and what special factors weighed in fixing a lower scale of pay for them.
Apparently in the view of the respondents, the circumstance that persons belong to different departments of the Government is itself a sufficient circumstance to justify different scales of pay irrespective of their identity of their powers, duties and responsibilities.
We cannot accept this view.
If this view is to be stretched to its logical conclusion, the scales of pay of officers of the same rank in the Government of India may vary from department to department notwithstanding that their powers duties and responsibilities are identical.
We concede that equation of posts and equation of pay are matters, primarily for the Executive Government and expert bodies like the Pay Commission and not for Courts but we must hasten to say that where all things are equal, that is where all relevant considerations are the same, persons holding identical posts may not be treated differentially in the matter of their pay merely because they belong to different departments.
Of course, if officers of the same rank perform dissimilar functions and the powers, duties and responsibilities of the posts held by them vary, such officers may not be heard to complain of dissimilar pay merely because the posts are of the same rank and the nomenclature is the same.
" This Court however observed that a differential treatment in appropriate cases can be justified, when there are two grades based on reasonable grounds, and stated as follows: "It is well known that there can be and there are different grades in a service, with varying qualification for entry into a particular grade, the higher grade often being a promotional avenue for officers of the lower grade.
The higher qualifications for the higher grade, which may be 109 either academic qualifications or experience based on length of service reasonably sustain the classification of the officers into two grades with different scales of pay.
The principle of equal pay for equal work would be an abstract doctrine not attracting article 14 if sought to be applied to them." With respect we agree with the conclusion arrived at in the above Judgment, that where all relevant considerations are the same, persons holding identical posts and discharging similar duties should not be treated differently.
The case on hand is much stronger than the facts of the Randhir Singh 's case.
In that case, the drivers belonged to two different departments.
In this case, the Senior Draughtsmen, divided into two groups are in the same department doing identical and same work.
It is not a case of different grades created on the ground of higher qualification either academic or otherwise or an entitlement by any other criteria laid down.
The justification for this classification is by the mere accident of an earlier entry into service.
This cannot be justified.
The above decision of this Court has enlarged the doctrine of equal pay for equal work, envisaged in Article 39(d) of the Constitution of India and has exalted it to the position of a fundamental right by reading it alongwith Article 14.
This exposition of law had given rise to some whispering dissent in that the doctrine had been extended beyond permissible limits.
The observations that the abstract doctrine of equal pay for equal work has nothing to do with article 14, in the Judgment in Kishori Mohanlal Bakshi vs Union of India (supra), rendered by a Constitution Bench of this Court it is contended, may perhaps run counter to the observations in the decision referred above.
We do not think it necessary on the facts of this case to dwelve at length upon the effect of this observation on a wider campus of service jurisprudence in the context of equal pay for equal work which will have to be attempted in an appropriate case.
For the purposes of the case on hand, it is sufficient to note that the classification between two groups of Senior Draughtsmen is 110 without any basis.
They do the same work, they perform the same duties, and as such the ratio of the decision in Randhir Singh 's case applies to this case with greater force.
The Order passed by the Government of India on 27th January, 1978, implementing this classification violates article 14 of the Constitution and has to be struck down and we do so.
In our opinion, it would be a great injustice to continue the appellants on the scales of pay of Draughtsmen even after promotion as Senior Draughtsmen, which is destructive of all incentive and initiative in the service.
In our Judgment, the High Court was in error in declining relief to the appellants.
We accordingly, set aside the Judgment of the High Court and allow this appeal and direct the Union of India to fix the scale of pay of appellants at Rs. 425 15 50 EB 15 560 20 640 EB 20 700.
The appellants will be entitled to costs from the respondent No. 1.
M.L.A. Appeal allowed.
| Senior Draughtsmen in the Ordnance Factories under the Ministry of Defence are either directly recruited or promoted from the post Draughtsmen.
At all relevant times all the Senior Draughtsmen throughout the above establishments were drawing the same pay scale of Rs. 205 280.
While revising the pay scale of various categories of employees, the Third Pay Commission recommended that the Draughtsmen should be placed in the scale of Rs. 330 560.
The Pay Commission also recommended that the Senior Draughtsmen should be divided into two groups and half the number of posts of Draughtsmen in the above organisations on the present pay scale of Rs. 205 280 be placed in the revised scale of Rs. 425 700 on the basis of seniority and the remaining half in the revised scale of Rs. 330 560.
Pursuant to the aforesaid recommendation, the Government of India by its Order dated 1st July, 1978 directed that only those senior Draughtsmen who were holding that post on 31st December, 1972 would be given the senior scale of pay i.e. Rs. 425 700.
The appellants who are senior Draughtsmen made representation to the Government of India against this grouping by the Third Pay Commission.
As the representations were not accepted, the appellants challenged the Order of the Government before the High Court in a Writ Petition contending that all the Senior Draughtsmen did the same kind of work and discharged same or similar duties and therefore there was no justification for distinction being made amongst the Senior Draughtsmen, providing two different pay scales on the basis of seniority.
The High Court dismissed the petition holding that it was open to the Government to fix two different pay scales for Senior Draughtsmen and that it was for the Government to decide what pay scale should be provided to the different classes of employees.
102 Allowing the appeal, ^ HELD: (1) Where all relevant considerations are the same, persons holding identical posts and discharging similar duties should not be treated differently.
Therefore the Order passed by the Government of India implementing the impugned recommendation of the Third Pay Commission dividing the Senior Draughtsmen into two categories with two different pay scales on the basis of seniority violates Article 14 of the Constitution and is struck down.
Randhir Singh vs Union of India and Ors.
; , followed.
In the instant case the group of Draughtsmen entitled to the higher scale of pay is not selected by any process nor is it based on any merit cum seniority basis, but is based only on seniority cum fitness.
Moreover, the Senior Draughtsmen divided into two groups are in the same Department doing identical and same work.
It is not a case of different grades created on the ground of higher qualification either academic or otherwise or an entitlement by any other criteria.
Thus the classification between the two groups of Senior Draughtsmen is without any basis.
In view of the total absence of any plea on the side of the respondents that the Senior Draughtsmen who are placed in the advantageous group, do not perform work and duties more onerous or different from the works performed by the appellants group, it will have to be held that this grouping violates Article 14 of the Constitution.
[107 E F] Kishori Mohanlal Bakshi vs Union of India, A.I.R. 1962 S.C. 1139; State of Punjab vs Joginder Singh, ; ; Unikat Sankunni Menon vs State of Rajasthan A.I.R. ; State of Mysore and Anr.
vs P. Narsingh Rao ; , distinguished.
|
Appeal No. 350 of 1970.
Appeal by special leave from the judgment and order dated March 21, 1966 of the Madras High Court in O.S. Appeal No. 11 of 1962.
B. R. L. lyengar, M. V. Goswami, section R. Agarwala, A. T. M. Sampat and E. C. Agrawala, for the appellant.
U. P. Singh, Santok Singh, Ugra Shankar Prasad and Shiva Pujan Singh, for respondent No. 1.
section P. Sinha and M. I. Khowaja, for respondents Nos. 2 and 3.
The Judgment of the Court was delivered by Ray, J.
This appeal is by special leave from the judgment dated 21 March, 1966 of the Madras High Court dismissing the appeal preferred by the appellant against the decree holders ' application for execution of the decree.
The appellant is one of the judgment debtors brought on record as legal representative of a deceased judgment debtor Lala Baijnath Prasad.
Respondent No. 1 Lakshman Prasad Gupta was one of the plaintiffs.
Pratap Chand and Basudeb Prasad respondents Nos. 2 and 3 respectively are the sons of a judgment debtor Girdharilal Agarwala.
The plaintiff respondent Lakshman Prasad Gupta was married to the sister of Lala Bansilal.
Bansilal belonged to the joint family which consisted inter alia of the appellant 's father.
There were five 366 branches of the said joint family of the judgment debtors, three whereof were at Banaras, Calcutta and Naini and the other two were the branches of the descendants of Mohanlal and of Lala Baijnath Prasad, father of the appellant, respectively.
The said joint family had valuable properties in and around the town of Arrah in Bihar.
There are alleged to be valuable properties of the joint family also at Allahabad, Banaras, Bombay, Calcutta and Madras.
Some time in the year 1926 Lala Pratap Chand, one of the descendants of Mohanlal who was a grand uncle of Lala Bansilal filed a partition suit in the court of the Subordinate Judge at Allahabad.
A preliminary decree was passed in the said partition suit on 14 February, 1927.
An appeal was preferred and it was dismissed.
An amicable settlement was arrived at in the partition suit on 13 January, 1931 for partition of the properties into five equal lots and allotment of the shares.
Thereafter a Commissioner was appointed in the partition suit to go into accounts and prepare five lots.
The branches inter se raised disputes as to liability for loans alleged against the joint family.
The Commissioner prepared his report on 18 May, 1936.
Final decree was passed on 13 January, 1939.
An appeal was preferred against the said final decree in the partition suit to the High Court at Allahabad.
The appeal was disposed on 6 December, 1949.
The plaintiff Lakshman Prasad Gupta and six others filled suit No. 76 of 1937 in the Court, of the First Subordinate Judge at Arrah in Bihar and obtained a decree on 20 July, 1938 for Rs. 18,540 and for costs Rs. 1,840/4/ aggregating Rs. 20,380/4/ .
This decree was against Banwarilal and other members of the joint family to which the appellant 's father belonged.
The decree was transferred from Arrah to the Court of the Civil Judge at Allahabad where.
on 2 June, 1941 the decree holder commenced execution proceedings marked as Execution Petition No. 38 of 1941.
In that execution petition the decree holder prayed for attachment and sale of Shri Krishna Desi Sugar Works at Jhusi known as the Jhusi Sugar Mills in the District of Allahabad which belonged to the joint family.
The execution proceedings were according to the decree holders stayed under orders of the Allahabad High Court and after the stay order was vacated the execution proceedings were revived on 13 May, 1950.
The jhusi Sugar Mill was attached on 1 1 July, 1952 and it was sold on 19 February, 1955.
The sale was set aside on 31 May, 1955 pursuant to objections of the judgment debtors that the Jhusi Sugar Mill could not be sold because of the provisions of the U.P. Encumbered Estates Act, 1934.
It may be stated here that some time in the month of September, 1935 367 Baijnath Prasad filed an application before the Collector of Allahabad for protection and relief under the U.P.
Encumbered Estates Act of 1934 and it was registered as Encumbered Estates, Suit No. 25 of 1935.
Thereafter the decree holders on 17 March, 1956 made an application in the Arrah Court for transfer of the decree.
On 6, June, 1956, the Subordinate, Judge, at Arrah transferred the decree to the Madras High Court.
On 13 August, 1956 the decree holders, filed in the Madras High Court an application for attaching the properties of the joint family.
This application in the Madras High Court is the subject matter of the present appeal.
The matter was heard first by the Master of the High Court of Madras who held that the application for execution was barred by limitation.
An appeal from the decision of the Master was heard by the learned Single Judge of the Madras High Court who held that the application was not within the mischief of bar of limitation Thereafter Letters Patent Appeal was heard by a Division Bench of the Madras High Court.
The appeal is from the Bench decision upholding the judgment of the learned Single Judge.
Before the Master of the Madras High Court the contention on behalf of the judgment debtors was that the decree was passed on 20 July, 1 9 3 8 and therefore the execution petition filed on 1 3 August, 1956 was barred by limitation.
The decree holders on the other hand contended that the execution of the decree which commenced on 2 June, 1941 before the Civil Judge at Allahabad was stayed till the end of 1949 and was revived on 13 May, 1950 and finally disposed on 31 May, 1955, and, therefore, the execution petition filed on 13 August, 1956 was within time. 'he Master held that the decree holders had failed to prove as to from what point of time the execution of the decree was stayed pursuant to the order of the Allahabad High Court and also the time when the stay was vacated.
The application for execution was therefore found by the Master of the Madras High Court to be barred by limitation.
The learned Single Judge of the Madras High Court referred to the revival of execution proceedings before the Civil Judge at Allahabad on 13 May, 1950 and also the finding of the Civil Judge at Allahabad who in passing the final order on 31 May, 1955 setting aside the sale of the Jhusi Sugar Mill stated that the execution proceedings were stayed by orders of the High Court at Allahabad., The Civil Judge at Allahabad set aside the Sale because of the mandatory provisions of sections 7(2) and 9(5) of the U.P.
Encumbered Estates Act.
The Madras High Court placed reliance on Exhibits P 2, P 3 and P 3A on the question of stay of execu tion proceedings.
It may also be stated here that the judgment 3 68 debtor did not dispute the translation of those Exhibits P 3 and P 3A.
The Exhibits set out the orders of the Civil Judge at Allahabad.
Exhibit P. 2 is the judgment dated 31 May, 1955 passed by the Civil Judge setting aside the sale of the Jhusi Sugar Mill.
Exhibits P 3 and P 3A comprise the orders passed by the Civil Judge.
The three relevant orders in Exhibits P 3 and P 3A are dated 18 August, 1941, 23 August, 1941 and 30 August, 1941 in the said execution proceedings.
The order dated 18 August, 1941 was to the effect that the receivers were to be informed about the execution proceedings and their objections, if any.
The receivers were the receivers in the partition suit No. 4 of 1926.
The said order further recited that the orders of the High Court at Allahabad in the, partition suit were also received in the executing court.
The order dated 23 August, 1941 recited that the execution application of the decree holder was presented in the presence of the lawyers of the decree holder and the receivers.
Further, the order was that the request for permission should be submitted in suit No. 4 of 1926 namely, the partition suit of the defendants judgment debtors.
The order dated 30 August, 1.941 recorded by the Civil Judge at Allahabad was inter alia as follows : "The proceedings remain stopped on account of the injunction of the High Court.
Hence it was ordered that receivers should be informed accordingly.
Further steps will be taken after getting permission .
These orders are relied on by the decree holder to substantiate the case of stay of execution proceedings.
The contention which was advanced before the Madras High Court and repeated in this Court was that there was no absolute stay of the execution of the decree.
It was amplified to mean that the execution proceedings before the Civil Judge at Allahabad related only to one property and therefore the decree holders would not be entitled to claim benefit of exclusion of time by reason of partial stay of execution proceedings at Allahabad.
The Madras High Court rightly found that there was no evidence that the judgment debtors were possessed of other properties in Allahabad where the decree was being executed.
The Madras High Court rightly held that the decree holders were restrained by injunction issued by the Allahabad High Court from executing the decree and were therefore entitled to claim the benefit of section 15 of the Limitation Act in respect of the period of stay of execution of the decree.
It was contended by counsel for the appellant that the decree holder could start execution proceedings in Madras or in other States where the judgment debtors had properties.
Simultaneous 3 6 9 execution proceeding in more places than one is possible but the power is used sparingly in exceptional cases by imposing proper terms so that hardship does not occur to judgment debtors by allowing several attachments to be proceeded with at the same time.
In the present case, however, the important features are that a partition suit was instituted in the year 1926 among the defendants.
and receivers were appointed of the properties.
The judgment of the Allahabad High Court dated 6 December, 1949 disposing the appeals filed by the parties in the partition suit directed inter alia "that the parties will be put in possession of the immoveable properties at once, but the two receivers will be legally discharged only after they have accounted for the period they were in charge of the properties".
Counsel for the decree holder rightly relied on this portion of the judgment of the Allahabad High Court that this would fortify the construction that there was stay of execution of the decree.
In the present case, the effect of the order passed by the Allahabad High Court was recorded by the Civil Judge, Allahabad in his judgment dated 31 May, 1955 to amount to stay of execution proceedings.
The order of the Civil Judge, Allababad dated 30 August, 1941 was that "proceedings remain stopped on account of the injunction order issued by the High Court.
in the Madras High Court the parties proceeded on thee basis of the order as corded by the Civil Judge at Allahabad.
The order indicates that the stay of execution proceedings was in unqualified terms, namely, that the execution proceedings were stopped.
It is not possible to spell out any order of partial stay in the facts and circumstances of the present case as was contended by counsel for the appellant.
The order is on the contrary to the effect that there was an absolute, stay of execution proceedings.
It is, therefore, manifest that the execution proceedings before the Civil Judge at Allahabad were stayed and the decree holder was rightly found by the Madras High Court to the benefit of exclusion of time during which the execution, was stayed, Though the judgment debtors did not question before the Master of the Madras High Court the bona fides of the decree holder in prosecuting the execution proceedings, that contention was advanced before the learned Single Judge of the Madras High Court.
The learned Single Judge of the Madras High Court held that the decree holders commenced execution proceedings for sale of the Jhusi Sugar Mill for realisation of the decretal amount but the attempt of the decree holder failed because of the objections of R the judgment debtors under the provisions of the U.P. Encumbered Estate Act.
The sale was set a side by reason of the mandatory provisions of the statute.
The learned Single Judge of the Madras High Court rightly held that the decree holders prosecuted the exe 370 cution case in good faith and with due diligence and were entitled to protection under section 14 of the Limitation Act.
Before the Division Bench of the Madras High Court no argu ment was advanced touching the bona fides or good faith with which the execution proceedings were carried on.
Counsel for the appellant repeated the contention that the decree holders were guilty of lack of good faith and diligence.
It is not open to the judgment debtors to advance that contention having abandoned the same before the Division Bench of the Madras High Court.
We are furthermore of opinion that the conclusion of the learned Single Judge of the Madras High Court on that point is correct.
The other question which arise before the Madras High Court was whether section 15 of the Limitation Act, 1908 would apply to limitation prescribed in statutes other than the Limitation Act.
Section 48 of the Code of Civil Procedure until its amendment on the passing of the enacted that the decrees of the Civil Courts were to be executed within 12 years and not after that.
The present case is governed by section 48 of the Code of Civil Procedure as it stood prior to the deletion of that section along with the passing of the .
In section 15 of the Limitation Act, 1908 it is enacted that in computing the period of limitation prescribed for any suit or application for a decree execution of which has been stayed by injunction, the time of the continuance of the injunction shall be excluded.
In the Madras High ,Court it was argued that the word 'prescribed ' occurring in section 15 of the Limitation Act could apply only to cases of limitation prescribed by the First Schedule to the Limitation Act, 1908 with the result that the benefit of exclusion of time by reason of operation of stay could not be availed of in cases of limitation prescribed by section 48 of the Code of Civil Procedure.
The Madras High Court relied on the decision in Kandaswami Pillai vs Kannappa Chetty(1) which held that the expression 'prescribed ' in section 15(1) of the Limitation Act would apply not only to limitation prescribed in the First Schedule to the Limitation Act but also to limitation prescribed in general statutes like the Code of Civil Procedure.
That is the correct statement of law and counsel for the appellant did not advance any contention to the contrary.
It may, however, be stated that the effect of section 48 of the Code of Civil Procedure is not to supersede the law of limitation with regard to execution of decrees.
The Limitation Act prescribes a period of limitation for execution of decrees.
Section 48 of the Code of Civil Procedure dealt with the maximum limit of time provided for execution, but it did not prescribe the period within (1) 3 7 1 which each application for execution was to be made.
An application for execution was to be made within three, years from any of the dates mentioned in the third column of Article 182 of the Limitation Act 1908.
An application for execution of a decree would first have to satisfy Article 182 and it would also have to be found out as to whether section 48 of the Code of Civil Procedure operated as a further bar.
In the present case, there was stay of execution proceedings.
On 13 May, 1950 the execution proceedings were revived.
The judgment debtors did not challenge the order dated 13 May, 1950.
The judgment debtors impeached the sale only on a ground covered by the U.P. Encumbered Estates Act, 1934.
The judgment debtor further in impeaching the sale of Jhusi Sugar Mill did not advance before the Civil Judge at Allahabad any contention that any of the orders,of the Civil Judge at Allahabad reviving the execution proceedings, attaching the Jhusi Sugar Mill and directing the sale of the Sugar Mill was barred by limitation.
The principle of res judicata applies to execution procedings.
The judgment debtors in the present case did not raise any objection as to limitation in regard to execution of the decree before the Civil Judge at Allahabad.
On the contrary the judgment debtors asked for setting aside the sale on the basis of revival of execution proceedings.
The revival of execution was not challenged and the judgment debtors are thereby barred by the principle of rem judicate from questioning directly or indirectly the order dated 13 May, 1950 reviving the execution proceedings.
When the appellant made the application for special leave, the appellant referred to an affidavit affirmed by the appellant 's father on 12 February, 1957 in the execution proceedings in the Madras High Court.
The copy of the said affidavit annexed to the petition for special leave in this Court is in seven paragraphs.
In paragraph 6 of the said affidavit it is alleged that the decree is against 5 bran ches and the plaintiff Lakshman Prasad in collusion with the other branches excluded the other four branches and chose to proceed only against the appellant 's branch though the other four branches were possessed of vast properties.
The further allegations in paragraph 6 of the said affidavit are that the object of the plaintiff is to harass only one branch and the application is not bonafide.
The plaintiff respondent in answer to the petition for special leave affirmed an affidavit in this Court that paragraph 6 in the said affidavit was an interpolation and was not at all in existence in the affidavit filed in the Madras High Court.
The plaintiff respondent ti obtained a photostat copy of the said affidavit filled in the Madras High Court.
The photostat copy established that paragraph 6 was not there and further that the affidavit was affirmed at Allahabad bad on 12 February, 1957 and not at Madras.
Furthermore, the 372 affidavit was explained to the deponent Baijnath Prasad as will appear from the photostat copy as annexed to the petition whereas in the copy annexed to the petition for special leave there was no such statement.
It is a serious matter that the appellant asked for relief on the basis of false copies of affidavits.
An explanation was suggested in the affidavit of the appellant that the copy was annexed in accordance with the draft that had been sent by the Madras lawyer.
It is beyond comprehension as to how an incorrect copy would be sent by the Madras lawyer.
Counsel for the appellant realised the gravity of the situation and conceded that the matter should be proceeded, with on the basis as it paragraphs did not exist.
The appellant is guilty of lack of uberrimae fidei.
We have therefore proceeded on the basis that paragraph 6 did not exist in the copy of the said affidavit.
The Madras High Court upheld the order of the learned Single Judge entitling the decree holder to the exclusion of the period spent in prosecuting prior infructuous execution proceedings before the Civil Judge at Allahabad.
The decree holder was allowed to proceed with the execution proceedings and t he Madras High Court remitted the matter to the Master to consider the questions indicated in the judgment and the judgment debtors were allowed to raise objections to the executability of the decree apart from that of limitation as indicated in the judgment of the learned Single Judge.
We are of opinion that the Madras High Court is right in holding that the decree holder is entitled to the benefit of exclusion of time during which the execution proceedings were stayed by the order of the Allahabad High Court and the decree holder proceeded with the said execution proceedings in good faith and with the deligence.
For these reasons we are of opinion that the appeal fails.
The appellant will pay the costs to the respondents.
Y.P. Appeal dismissed.
| A Hindu undivided family carrying on management of a company disrupted into 3 branches, one being that of the assessee, and the shares of the company were more in the names of his family members.
The consideration for all these subsequent acquisitions was from the Hindu undivided family funds.
All the shares the previous and subsequent acquisition were treated in the books and the balance slice of the assessee family as its property and its dividends were also credited to the account of the family.
As Managing Director of the company the assessee received certain remuneration.
On the question whether the managing director 's remuneration received by the assessee was assessable in his individual hands or in the hands of the assessee 's Hindu undivided family, this Court HELD : The remuneration was assessable as the assessee 's individual income and not as the income of his Hindu undivided family.
The broad principle that has, to be applied in such cases is whether the remuneration received by the coparcener in substance though not in form was but one investment of the family funds in the business or whether it was a compensation made for the services rendered by the individual coparcener.
If it is the former, it is an income of the Hindu undivided family but if it is the latter then it is the income of the individual coparcener.
If the income was essentially earned as a result of the funds in vested the fact that a coparcener has rendered some service would not change the character of the receipt.
But if on the other hand it is essentially a remuneration for the services rendered by a coparcener, the circumstances that his services were availed of because of the reason that he was a member of the family which had invested funds in that business or that he had obtained the qualification shares from out of the family funds would not make the receipt, the income of the Hindu undivided family.
[759 D] Applying the tests enumerated above to the facts found by the tribunal in the present case, there was hardly any room to doubt that the income in question was the individual income of assessee.
He did not become the managing director of the firm for the mere reason that his family had purchased considerable shares in the firm.
He was elected as a managing director by the board of directors.
The tribunal had found that he received his salary for his personal services.
There was no material to hold that be was elected managing director on behalf of the family.
In the past the salary received by him was assessed as hi , individual income.
The same was the case as regards the salary received by the other managing directors.
The tribunal had found that he was not appointed as managing director as a result of any outlay or expenditure of or detriment to the family property.
It had further found that the managing directorship was an employment of personal responsibility and ability.
[759 G] 749 Commissioner of Income, tax, West Bengal vs Kalu Babu Lal Chand, ; Mathura Prasad vs Commissioner of Income tax , Piyeare Lal Adhishwar Lal vs Commissioner of Income tax, ; V. D. Dhanwatey vs Commissioner of income tax M.P. ;M.D.Dhanwatey vs Commissioner of Income tax M.P. ;S.RM.CT.
Palaniappa Chettiar vs Commissioner of Income tax,Madras ; Commissioner of Income tax, Mysore vs Gurunath Dhakappa, P. N. Krishna Iyer vs Commissioner of Incometax Kerala, , and Commissioner of Income tax, Mysore v.
D. C. Shah, 73, I.T.R. 692, explained.
Principle laid down in Gokul Chand vs Hukum Chand Nath Mal, 48,I.A. 162; held no more valid.
|
ivil Appeal No. 173 of 1986.
From the Judgment and Order dated 29.3.
1985 of the Andhra Pradesh Administrative Tribunal, Hyderabad in Repre sentation Petition No. 1589 of 1983.
WITH Writ Petition (Civil) Nos.
11135 37 of 1984.
485 (Under Article 32 of the Constitution of India).
C. Sitharamaiah, G. Prabhakar, D. Prakash Reddy, B. Rajeshwar Rao and Vimal Dave for the Appellants.
Subodh Markandeya, W.A. Nomani, Seshagiri Rao, Mrs. Chitra Markandeya and A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
Civil Appeal No. 173 of 1986: By the judgment under appeal the Andhra Pradesh Adminis trative Tribunal has accepted the claim of seniority pressed by the respondents in their Representation Petition No. 1589 of 1983.
The respondents were working as Lower Division Clerks (LDCs) in the district police offices/units in Andhra Pra desh, when the question of appointing LDCs in the Chief Office arose.
It was decided to give an opportunity to the LDCs working in the district police offices/units on the condition that they would be willing not to rely upon their service rendered in the district police offices/units for the purpose of seniority and that their seniority would be counted with effect from the date they joined the Chief Office.
Accordingly a Memorandum Rc.
No. 1020/S1/68 dated 21.11.
1968 (Annexure 'A ') was issued to the district police offices/units.
The choice was limited to probationers and approved probationers having good service records.
The letter expressly stated that the appointees were to be put at the bottom of the list of probationers or approved proba tioners already working in the Chief Office.
Immediately thereafter the respondents and two other LDCs, who are not parties to the present case, expressed their desire to join the Chief Office on the condition as mentioned in the said memorandum.
They in positive terms declared in Annexure 'C ' series their willingness to forego their seniority.
After examination of their service records, orders were passed and accordingly Memorandum Rc.
No. 1020/S1/68 dated 1.6.
197 (1 Annexure '0 ') was issued to the heads of departments of the concerned district police offices/units.
A pointed reference to the memorandum of 21.11.
1968 was made stating that the clerks in question were to take their seniority from the date of their joining the duty in the Chief Office as already mentioned in their letters.
Accordingly, all the five respondents joined their duty in the Chief Office after submitting, with reference to the memorandum dated 1.6.
1970, separate letters (at pages 40 44 of the 486 paper book) addressed to the Inspector General of Police, stating that: "I submit that I am willing to take the last rank in senior ity in the category of LDCs.
in Chief Office from the date reporting duty in Chief Office.
" Their respective dates of joining the Chief Office are detailed in the Memorandum dated 7.9.1970, Annexure 'H ' (page 47 of the paper book).
They were placed on probation with the condition that if they failed to complete their probation satisfactorily they would be sent back to their original district/unit offices.
The respondents satisfactorily completed their proba tion and were substantively confirmed in the Chief Office and their seniority was counted with effect from the dates they joined the Chief Office.
In 1983 they filed an applica tion before the Andhra Pradesh Administrative Tribunal claiming that they were entitled to count their service rendered in the district police offices/units for the pur pose of their seniority in the Chief Office, which has been allowed by the impugned judgment.
In support of their claim the respondents relied on the Memorandum Rc.
No. 1020/S1/68 dated 18.1.
1969 (Annexure 'B ') issued by the office of the Inspector General of Police to the heads of the district police organisations/units, stating that, "In continuation of the Chief Office memorandum cited, the Commissioner of Police, all Superintendents of Police and Commandants etc., are requested to state whether there are any L.D. Clerks willing to come on transfer to Chief Office, if the condition stipulated in the Memorandum cited regarding taking of last rank is not insisted upon.
The records of the L.D. Clerks recommended should be good.
" It has been argued before the Tribunal as also before us that this letter clearly indicates that adequate number of clerks from the district police offices/units were not available and a decision to forgo the condition in regard to the seniority of the clerks was taken.
It has been contended that in view of this departmental decision the respondents should not be bound down by their statements made in Annex ures 'C ' series and in their letters Annexures 'E ' series.
The Tribunal has accepted their plea.
487 5.
Mr. C. Sitharamaiah, the learned counsel appearing in support of the appeal, has urged that the Memorandum Annex ure 'B ' does not indicate any final decision taken by the Department.
The learned counsel appears to be right.
A perusal of the letter makes it clear that the office of the Inspector General of Police was only making an inquiry in the terms indicated therein.
It is true that presumably.
sufficient number of volunteers from the district police offices/units were not available which promoted the authori ty concerned to issue the letter Annexure 'B ', but it does not go beyond circulating a query.
It cannot be suggested on its basis that there was a reversal of the policy with respect to the counting of the seniority of the incoming LDCs from the district police offices/units.
It has been asserted in the counter affidavit of the State filed before the Tribunal that not a single person was allowed to join the Chief Office on the condition indicated in Annexure 'B ', and it has not been denied on behalf of the respondents either before the Tribunal or before us.
The respondents have not been able to produce a copy of any decision taken on the lines indicated in Annexure 'B ' nor have they been able to cite even a single case of an LDC joining the Chief Office on such a supposed decision.
We have, therefore, no hesitation in holding that the condition mentioned in Annex ure 'B ' is of no avail to the respondents.
The learned counsel for the respondents referred to r. 16 of the A.P. Ministerial Service Rules (hereinafter referred to as the Rules) and urged that when the respond ents were permitted to join the Chief Office, they were allowed to do so by way of a regular transfer from one department to another and this was done for administrative exigencies of the Police Department, within the meaning of the said Rules, and not on their own request.
They are, therefore, entitled to count their earlier service for the purpose of seniority.
It is alleged that the fact that the respondents were paid travelling allowances for joining the Chief Office corroborates their stand.
We have considered the argument addressed on behalf of the respondents along with the relevant documents but do not find any merit in their stand.
It has to be appreciated that the cadre of the Chief Office is altogether different from cadre,of the district police offices/units where the respondents were earlier appointed and they were not liable to be transferred to the Chief Office.
The service conditions at the Chief Office were better, which was presumably the reason for the respondents to give up their claim based upon their past services.
It is true that the differential advantage was not so substantial as to attract every LDC working in the dis trict offices/units, and in that situation the letter Annex ure 'B ' had to be circulated.
However, so far the respond ents and the two others 488 were concerned, they found it in their own interest to forego their claim of seniority on the Oasis of their past services and they did so.
It is significant to note that their letters Annexures 'E ' series were sent to the Inspec tor General of Police many months after the issuance of Annexure 'B ' and they were allowed to join the Chief Office on clear Understanding that they would not be entitled to count their past services.
It is, therefore, idle to suggest that the respondents can.now turn back and repudiate their commitment expressly made many months after Annexure 'B '.
So far the allegation regarding payment of travelling allowance is concerned, the same has been dealt with in paragraph 6 of the counter affidavit of the appellant filed before the Tribunal in the following terms: "They cannot claim seniority now after a lapse of 13 years on the ground that they were given T.T.A. at the time of their transfer.
No orders were issued from this office to the Subordinate Officer that the petitioners are eligible for T.T.A. and joining time.
In fact the Dy.
Inspr.
of Police, Hyderabad Range in his order No. 534/E/256/70 Hr.
Dt. 5.6.70, addressed to Supdt.
of Police, Medak had specif ically informed that the petitioners No. 1 and 2 are not entitled for any T.T.A. and joining time." [t is urged that inspite of the clarification made by the Deputy Inspector General of Police, as stated above, if some officers permitted the respondents to draw travelling allow ance, this cannot be a ground to hold that it was a case of regular departmental transfer.
The '.
16 cannot, therefore, be held to be applicable in the present case.
Mr. Sitharamaiah urged that having regard to the entire circumstances as spelt out of the different documents on the records of the present case, it should be held that the Memorandum Annexure A ' issued by the Office of the 'Inspector General of Police was a mere invitation to the LDCs in the district police offices/units to apply for appointment in the Chief Office with the condition mentioned therein.
and availing of the opportunity, the respondents accordingly requested by their statements and letters for appointment in the Chief Office.
It is suggested by the learned counsel that if the case be treated to be one of transfer, it has to be held, in the circumstances, to be at the request of the LDCs concerned within the meaning of r. 16 of the Rules.
There considerable substance in the alter native argument of Mr. Sithara 489 maiah also, but, it is not necessary to go into this ques tion deeper as the absorption of the respondents in the Chief Office cannot be treated by way of transfer within the meaning of the Rules.
Besides the above infirmities there are two other important considerations which weigh heavily against the respondents.
The petition before the Tribunal was filed by the respondents after a period of 13 years of their initial appointment in the Chief Office, during which period many orders consistent with the terms of service as indicated in the Memorandum Annexure 'A ' must have been passed in favour of the other incumbents of the service.
The courts and tribunals should be slow in disturbing the settled affairs in a service for such a long period.
Besides, the respond ents, in the application before the Tribunal, did not im plead their colleagues who have been prejudicially affected by the impugned judgment.
It cannot be assumed that the respondents had no knowledge about them.
As was rightly pointed out by Mr. Sitharamaiah, although in paragraph 4(d) of their application before the Tribunal (page 53 of the paper book) the respondents mentioned one Vijaya Chand alleged to be an officiating LDC who was put over them, they did not implead even him.
We are, therefore, of the view that apart from the merits of the case, the petition of the respondents before the Tribunal was fit to be rejected on the ground of the above mentioned last two points.
Finally the learned counsel for the respondents said that in any event they should not be put below those persons who had not successfully completed their probation in the Chief Office on the date the respondents joined there.
We do not find any merit in this submission either.
Accordingly, the judgment under appeal passed by the Andhra Pradesh Administrative Tribunal is set aside and the Representation petition of the respondents is dismissed.
The appeal is allowed, but, in the circumstances, there will be no order as to costs.
Writ Petitions (Civil) Nos.
11135 37 of 1984: 11.
These applications under Article 32 of the Constitu tion have been filed by the three petitioners who were appointed during the years 1965 67 in the Central Office of the Inspector General of Police (now redesignated as Direc tor General and Inspector General of Police), Andhra Pra desh.
Since they had not passed the general examination held for the purpose, a special qualifying examination was held in 1968 to facilitate the petitioners and other similarly situated persons to pass at the test.
The petitioners, however, did not appear at this 490 examination.
Another special qualifying examination was held in 1974 and the petitioners successfully cleared the same.
Thereafter, by an order dated 17.6.
1976 (Annexure 'E '), their services were regularised with effect from 1.8.1972.
Their claim in the present case is for counting their sen iority with effect from their initial dates of appointment in the years 1965 67 12.
It has been contended by the learned counsel for the petitioners that they were not qualified for the 1968 exami nation and at the very first opportunity available to them in 1974, they passed the special qualifying examination and, therefore, they should not be penalised by ignoring their services rendered before 1.8. 1972.
It is significant to note that although the impugned order was passed in 1976, the petitioners did not commence any legal remedy before the year 1984 when they filed the present application directly before this Court after a period of 8 years.
By way of a preliminary objection, Mr. Subbarao, the learned counsel appearing for some of the officers impleaded as respondents in this petition, has drawn our attention to the fact that earlier a writ application, being W.P. No. 106 of 1980, was filed by some of the employees of the central office making similar claim of seniority and the present petitioners specifically stated that their case would be governed by the judgment in the earlier writ petition which was ultimately dismissed by this Court on August 8, 1986 (M. Nirmala and Others vs State of Andhra Pradesh and Others, Mr. Subbarao contends that after the dismissal of the earlier case, the petitioners now cannot be permitted to urge any new ground in support of their claim.
The reply on behalf of the petitioners is that if the earli er writ application had been allowed, they would also be entitled to succeed, but after its dismissal their claim cannot be rejected without examination of the additional questions which did not arise in the earlier case.
On merits the reply on behalf of the Government of Andhra Pradesh is that the respondent officers had joined the office of the Inspector General of Police after qualify ing at the general examination held for the purpose, and since the petitioners did not appear at the examination, they cannot be equated with the respondent officers.
The general examinations for recruitment to the central office were held in 1964, 1965, 1966, 1967 and 1968, but the peti tioners did not choose to avail of the ordinary method for joining the service.
Instead 491 they entered the service by the side door and their depart ment, taking an attitude liberal to them and other similar officers, decided to hold special qualifying examinations.
It is contended that in these circumstances the rule as laid down in Memorandum No. 473/Y1/70 5 dated 24.7.
1970 (Annex ure 'VII ') is clearly applicable, and for the purpose of seniority the petitioners were given the advantage of two years of service rendered by them prior to their successful ly completing the special qualifying examination.
The argu ment is well founded.
The learned counsel also pointed out that the standard of the special qualifying examination was not the same as that of the general examination held for recruitment.
Besides the weakness in the case of the petitioners as mentioned above, the delay of 8 years on their part to initiate legal remedy is fatal and these writ petitions are fit to be rejected on this ground alone.
The writ applica tions are, therefore, dismissed with costs payable to the respondents represented by Mr. Subbarao.
G.N. Appeal allowed and writ petition dismissed.
| The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years.
He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1.
After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants.
The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants.
Defendant No. 1 filed an appeal against the decree for arrears of rent.
The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related.
Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1.
The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3.
Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed.
Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata.
Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3.
Hence this appeal.
Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it.
Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal.
Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3.
There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence.
Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata.
[100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable.
|
Civil Appeal No. 914 of 1968.
(From the judgment and decree dated the 9th April, 1962, of the Allahabad High Court in first Appeal No. 283 of 1950).
Naunit Lal, K. G. Bhargava and Miss Lalita Kohli for the appellant.
G. section Pathak, D. P. Singh and M. G. Goswami for respondents nos.
1(a) to 1(f).
The Judgment of the Court was delivered by GOSWAMI, J.
This appeal by certificate from the judgment and decree of the Allahabad High Court raises an important question with regard to the construction of a will.
The respondent Gokul (whose heirs have been impleaded after his death) was the original plaintiff in a suit for declaration that he was the absolute owner under a will of the property in suit and for possession of certain of them.
He also claimed certain movable properties with which we are not concerned in this appeal.
The property in suit was originally in exclusive ownership and possession of Bhola Chaubey, the testator.
Bhola Chaubey, was governed by the Mitakshra School of Hindu Law.
He belonged to the class of priests and was an old man of 67 years at the time when he executed the will on September 21, 1916.
He had then a legally wedded wife, Smt, Jarian, approaching nearly her forty fifth year and they had no issue in wedlock.
The only person whom the testator appeared to have almost treated like a son was the respondent Gokul, doubly related to the testator, being his sister 's son and also his wife 's brother 's son.
Gokul had been with him since childhood and the testator got him married.
Gokul in return had been serving the testator to his satisfaction and was in enjoyment of his full confidence and affection till the testator 's death in 1918.
Gokul was then aged about 23 years.
It was directed in the will that Smt.
Jarian would get the obsequies and other religious rites of the testator performed by Gokul.
After the death of the testator Smt.
Jarian and Gokul continued to live in cordiality for nearly 18 years.
Feelings, however, got 927 estranged some time after that and there was even litigation, criminal and civil, between Smt.
Jarian and Gokul.
It appears Smt.
Jarian, who died in March, 1948, had executed a gift deed and a will in respect of certain properties in suit in favour of the appellant, Navneet Lal.
All this led to the institution of the present suit out of which this appeal has arisen.
The case of the appellant was that Bhola Chaubey had given an absolute estate under the will to his wife, Smt.
Jarian, and she was, therefore, entitled to deal with the property as she liked and hence the deed of gift and the will in favour of the appellant were perfectly valid.
According to the appellant the respondent had no right to file the suit basing upon the will executed by Bhola Chaubey.
According to the respondent the will conferred on Smt.
Jarian only a life estate during her life and after her death an absolute estate of the testator 's entire property on the respondent.
The Civil Judge, Mathura, decreed the respondent 's suit except with reference to the movable property mentioned in Schedule O to the plaint as well as in respect of certain muafi zamindari property in Schedule A to the plaint.
The appellant appealed to the High Court at Allahabad and when the matter came up for disposal by a Division Bench of that court, there was a difference of opinion between the Judges.
Srivastava, J. held that the testator had no intention of conferring a limited life estate only on his wife and that she acquired an absolute estate by virtue of the will.
On the other hand, B. Dayal, J. took a contrary view holding that Bhola Chaubey intended to give merely a life estate to Smt.
Jarian and to make Gokul full owner of the property after her death.
The appeal was then set down for hearing before a third Judge, (Dhawan, J.) who agreed with B. Dayal, J. resulting in dismissal of the appeal.
We are concerned in this appeal only with the construction of the will executed in the year 1916.
From the earlier decisions of this Court the following principles, inter alia, are well established: (1) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances are to be considered; but that is only for the purpose of finding out the intended meaning of the words which have actually been employed.
[Ram Gopal vs Nand Lal and others(1)].
(2) In construing the language of the will the court is entitled to put itself into the testator 's armchair [Venkata Narasimha vs Parthasarathy(2)] and is bound to bear in mind also other matters than merely the words used.
It must consider the surrounding circumstances, the position of the testator, his family 928 relationship, the probability that he would use words in a particular sense. but all this is solely as an aid to arriving at a right construction of the will, and to ascertain the meaning of its language when used by that particular testator in that document.
[Venkata Narasimha 's case supra and Gnanambal Ammal vs T. Raju Ayyar and Others(1)].
(3) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory [Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer(2)].
(4) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of the expression inoperative.
The court will look at the circumstances under which the testator makes his will, such as the state of his property, of his family and the like.
Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator.
Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create any such hiatus.
[Paerey Lal vs Rameshwar Das(3)].
(5) It is one of the cardinal principles of construction of wills that to the extent that it is legally possible effect should be given to every disposition contained in the will unless the law prevents effect being given to it, Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a Court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the will.
[Ramachandra Shenoy and Another vs Mrs. Hilda Brite and Other(4)] Bearing in mind the above principles we may now look at the will in question as a whole.
This will is written in the urdu language.
An official translation is placed on the record.
From the contents of the will we find the background and the exact position of relationship of the parties set out earlier.
Gokul was residing with Bhola Chaubey 929 and Smt.
Jarian.
It may bear repetition that Gokul was held in great love and affection by the testator who was keenly anxious for the welfare both of his wife and of Gokul.
There is yet another feature which is prominent in the will.
The testator was apprehensive of his only brother, Ram Raj and his nephew, Kishnu, who "might trouble his wife and Gokul after his death." From such of the aforesaid prefatory recitals as appear in the will, two objects stand out, namely, that he was deeply interested in the enjoyment of his property movable and immovable after his death by his wife and after her death by Gokul.
The second object was that he intended that his property should not fall into the hands of his brother and nephew who had been separate from him since long after some arbitration and even bore ill will against him and his wife.
After the above revelation of his mental attitude in the will there follows the following recitals: "So long as I, the executant, am alive, I myself shall remain the owner in possession (malik wa qabiz) of my entire movable and immovable property and of the income from Birt Jijmani.
After my death Mst.
Jarian, the wedded wife of me, the executant, shall be the owner (malik) of my entire estate, movable and immovable, and of the income from Birt Jijmani and shall have all the proprietary powers (aur usko jamiya akhtiyarat malikana hasil honge).
After the death of Mst.
Jarian, Gokul aforesaid shall be the owner of the entire estate left by me (malik kamil jaidad matruka meri ka hoga), and he shall have all the proprietary powers and the power of making transfer of all sorts (aur usko jamiya akhtiyarat malikana wa inteqalat har qism hasil honge).
If per chance, Mst.
Jarian dies in my life time, then Gokul aforesaid will be the absolute owner (malik kamil) of the estate left by me (matrura meri) and he shall have power of making all sort of transfers (aur usko har quism ke akhtiyarat inteqalat hasil honge).
Gokul aforesaid should go to Jijmana and should continue to give to Mst.
Jarian during her life time the charitable gifts (daan dakshina) which he brings from there.
After her death he might continue to be benefited thereby.
Jarian should get my obsequies, Barsi (annual death ceremony), Chhamchhi etc.
performed through Gokul aforesaid according to the custom prevalent in the brotherhood.
It will be the duty of Gokul aforesaid to obey and serve my wife Mst.
Jarian.
It will be necessary for Mst.
Jarian to keep my heir (waris) Gokul aforesaid and to act in consultation with him.
At present I have the following immovable properties and the Birt Jijmani.
If in addition to these I purchase or get any property the aforesaid persons shall be the owners of that also according to.
the aforesaid conditions".
Mr. Naunit Lal, on behalf of the appellant, submits that since the testator stated in the will that after his death Smt.
Jarian "shall be the 930 owner (malik) of my entire estate. and shall have all the proprietary powers (aur usko jamiya akhtiyarat malikana hasil honge)", it is absolutely clear that he intended to confer upon his wife an absolute estate to his entire property.
Mr. G. section Pathak, on behalf of the respondents, contests the proposition.
In support of his contention, Mr. Naunit Lal draws our attention to several decisions wherein the word `malik ' has been noticed and explained.
The term `malik ' when used in a will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian will must always depend upon the setting in which it is placed, the subject to which it is related, and the locality of the testator from which it may receive its true shade of meaning.
[Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others (1) ].
We find observations to the same effect in Musammat surajmani and others vs Rabi Nath ojha and another(2).
It is, approved therein that in order to cut down the full proprietary rights that the word malik imports something must be found in the context to qualify it.
Similarly counsel has referred to the expression `malik mustakil ' which was noticed in a decision of this Court in Krishna Biharilal vs Gulabchand and Ors.(3), and this Court observed at page 31 as follows: "The meaning of the expression `malik mustakil ' an urdu word, has come for consideration before this Court in some cases.
In Dhyan Singh and anr.
vs Jugal Kishore & Anr.(4), this Court ruled that the words `malik mustakil ' were strong, clear and unambiguous and if those words are not qualified by other words and circumstances appearing in the same document, the courts must hold that the estate given is an absolute one We are, however, not required to consider the words `malik mustakil ' in this case.
But it is clear that even those words can be qualified by other words and circumstances appearing in the same document.
It is, therefore, abundantly clear that the intention of the testator will have to be gathered from all the relevant and material contents in the entire will made in the situation in which the testator was placed in life in the back ground of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence.
931 Reading the present will as a whole and if every disposition has to be rationally harmonised, we find that the testator intended a life estate for his wife so long as she lived.
This is consistent with his description of Gokul as "my heir (waris)" after his death.
It is further consistent with the recital that "if per chance, Mst.
Jarian dies in my life time, then Gokul aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aur usko har quism ke akhtiyarat inteqalat hasil honge)".
In obvious contrast even though Smt.
Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt.
Jarian 's death.
While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts".
This power of making transfer which was prominent in the mind of the testator at the time of execution of the will is conspicuous by total omission in relation to Smt.
Jarian 's enjoyment of the property.
We have to give due importance to the lexicon in the will and we find that the testator has made a definite distinction between mere ownership of property and ownership of the same coupled with powers of transfer "in every way".
Ordinarily, however, without such clear evidence from the recitals in the will itself it may not be possible to hold that ownership of property, which is devised, without any thing more, would not connote absolute ownership of the same with the power of alienation.
There is another significant feature in the recitals, when reference is made in the will to acquisition of future property.
Says the testator "if in addition to these I purchase or get any property the aforesaid persons shall be the owners of that also according to the aforesaid conditions".
The testator thus unerringly conceives of any future property being owned by both, by the widow during her life time and by Gokul after her death in the same manner as the property that had already been bequeathed.
The expression "according to the aforesaid conditions" is, therefore, very significant in the context.
We also find that during her life time Gokul would be collecting "daan dakshina" of the jijmani to Smt.
Jarian and after her death Gokul would enjoy the same.
There is no contemplation of any possibility to deprive Gokul of the enjoyment of the property in any event.
All the above features run counter to the theory of an absolute estate in favour of Smt.
Jarian.
There is still another clinching factor.
It is clear from the will that the testator had misunderstanding and quarrels with his brother regarding ancestral property and the matter had to be settled by arbitration leading to partition and separate enjoyment of property as far back as 1889.
It also appears from the recitals in the will that he had grave apprehension that after his death his only reversioners, his brother and nephew, "might trouble and harass my wife Mst.
Jarian and my sister 's son Gokul.
" One thing was, therefore, clear that the testator never intended that his property should pass to his brother and nephew.
This intention of the testator would 932 best be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the will.
On the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator.
There was no other heir of Mst.
Jarian to inherit the property after her death.
A Plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law.
No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument.
Having regard to the context and the circumstances apparent from the will, we are clearly of opinion that the testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul.
That being the position the will by Smt.
Jarian in favour of the appellant fails and her gift in favour of the appellant also similarly fails on her death.
The respondent 's suit is rightly decreed by the courts below.
The appeal fails and is dismissed.
We will, however, make no order as to costs.
S.B. Appeal dismissed.
| One 'BC ', governed by the Mitakshra School of Hindu Law, being issueless and apprehending the claim to his property after his death as reversioners by his only brother 'RR ' and his nephew 'K ' who were inimical to him since the partition of their ancestral property in 1899, and possible harassment of his wife and 'G ', the respondent, executed a Will on September 21, 1916, in the Urdu script.
The respondent 'G ' being the son of the testator 's sister married to testator 's wife 's brother was doubly related.
As per the Will, 'G ' was to perform the obsequies and other annual death ceremonies etc.
, being his 'waris ' and the "Malik Kamil ' absolute owner" having all the proprietary powers and the power of making transfers of all sorts", while his wife was to be in possession and enjoyment of the property during her life time.
From the date of death of the testator in 1918 for about 18 years the widow and 'G ' lived in cordiality but got estranged later due to estrangement of feelings resulting in several civil and criminal litigation between them.
The widow died in 1948 executing a gift deed and a Will in respect of certain properties in favour of the appellant 'NL '. 'G ' filed a civil suit claiming his rights under the Will dated 21 September, 1916, and the appellant defendant contested it on pleas that the widow of 'BC ' having an absolute right over the property under the said Will validly made the gift deed and the Will of 1948 in his favour and that the respondent plaintiff had no locus standi to file the suit.
The suit was decreed.
On appeal to the Allahabad High Court, as there was a difference of opinion between the Judges of the Division Bench on the nature of the widow 's estate, one opining as the Will conferring a "limited estate" and the other opining as conferring an "absolute estate" the appeal was set down to a third Judge who agreed with the view that the Will conferred only a "limited estate" upon the widow and dismissed the appeal.
Confirming the decree of the courts below and dismissing the appeal by certificate, the Court, ^ HELD : (1) The following are the established principles for construing the language of the Will.
(a) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances being considered to find out the intended meaning of such words employed therein.
[927F G] (b) In construing the language of the Will the court is entitled to put itself into the testator 's armchair and is bound to bear in mind also other matters than merely the words used like the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense all as an aid to arriving at a right construction of the Will, and to ascertain the meaning of its language when used by that particular testator in that document.
[927G H, 928A] (c) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the Will as a whole with all its provisions and ignoring none of them as redundant or contradictory.
[928B] (d) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of 925 the expression inoperative.
The court will look at the circumstances under which the testator makes his Will, such as the state of his property, of his family and the like.
Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator.
Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create and such hiatus.
[928C E] (e) It is one of the cardinal principles of construction of Wills that to the extent that it is legally possible effect should be given to every disposition contained in the Will unless the law prevents effect being given to it.
Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the Will.
[928E G] Ram Gopal vs Nand Lal and others ; Venkata Narasimha vs Parthasarathy, 42 Indian Appeals 51/72; Gnanambal Ammal vs T. Raju Ayyar and others, ; Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer, ; Pearey Lal vs Rameshwar Das [1963] Supp.
SCR 834/839/842 and Ramachandra Shenoy and Anr.
vs Mrs. Hilda Brite and others. , applied.
(ii) The term "malik" when used in a Will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian Will must always depend upon the setting in which it is placed, the subject to which it is related and the locality of the testator from which it may receive its true shade of meaning.
The intention of the testator will have to be gathered from all the relevant and material contents in the entire Will made in situation in which the testator was placed in life in the background of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence.
Hence, even the words "malik muakkil" can be qualified by other words and circumstances appearing in the document.
[930 B C & G H] Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others, 49 Indian Appeals 25/35; Musammat Surajmani and others vs Rabi Nath Ojha and another, 35 Indian Appeals 17; Krishna Biharilal vs Gulabchand and others, (1971) Supp.
SCR 27 and Dhyan Singh and anr.
vs Jugal Kishore and anr.
, [1952] SCR 478, discussed.
(iii) In the instant case, the testator intended a life estate for his wife so long as she lived as is clear from the reading of the present Will as a whole.
This is consistent with his description of Gokul as "my heir (waris)" after his death.
It is further consistent with the recital that "if per chance, Mrs. Jarian dies in my life time, then Gokul, aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aurusko har qism ke aktiyarat inteqalat hasil honge)".
In obvious contrast even though Smt.
Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt.
Jarian 's death.
While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts".
This power of making transfers which was prominent in the mind of the testator at the time of execution of the Will is conspicuous by total omission in relation to Smt.
Jarian 's enjoyment of the property.
The testator has made the distinction between mere ownership of property and ownership of the same coupled with a transfer in every way.
[931 A D] 926 Further, from the recitals in the Will about his only reversioners viz., his brother and nephew "might trouble and harass my wife Mst.
Jarian and my sister 's son Gokul", it is clear that the testator never intended that his property should pass to his brother and nephew.
This intention would be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the Will on the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator.
There was no other heir of Mst.
Jarian to inherit the property after her death.
[931 G H, 932 A B] A plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law.
No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument.
The testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul.
[932B C]
|
Civil Appeal No. 6009 of 1983.
Appeal by special leave from the Judgment and Order dated the 19th April, 1983 of the Punjab and Haryana High Court in C.W.P. No. 1484 of 1983.
WITH Civil Appeal Nos. 1207 and 1208 of 1980.
Appeals by special leave from the Judgment and Order dated the 30th May, 1980 of the Punjab and Haryana High Court in Civil Writ Petition Nos.
1759 and 1848 of 1980.
J.L. Gupta, D.N. Gupta and V.K. Verma for the Appellant in CA.
No. 6009 of 1983.
J.L. Gupta and C.M.Nayar for the Appellant in CA.
No. 1207 and 1208 and 1980.
Hardev Singh and R.S. Sodhi for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA J.
Each of these appeals is by special leave and is directed against the decision of the High Court of Punjab and Haryana in separate writ petitions.
A common question is involved in all the three matters and that relates to a correct interpretation of Rule 27.1(a) in Chapter III of the Punjab University Regulations.
Respondents in each of these appeals was a student of the Punjab University for the Master Degree in Law (LL.M).
Rule 33 7 of the Punjab University Regulations provides: "7.
The minimum marks required to pass Part I/II examination, as the case may be, shall be: (i) 45 per cent in each paper; and (ii) 50 per cent in the aggregate.
" It may be stated that there are eight papers in all each carrying 100 marks and Part I covers four papers while Part II covers the remainder.
Rule 27 reads as follows: "27.1(a).
A candidate who appears in all subjects of an examination and who fails in one or more subject (written, practical, sessional or viva voce) and/or the aggregate (if there is a separate requirement of passing on the aggregate) shall be given grace marks up to maximum of 1 per cent of the total aggregate marks (excluding marks for internal assessment) to make up the deficiency if by such addition the candidate can pass the examination.
While awarding grace marks fraction working to 1/2 or more will be rounded to a whole; Provided that grace marks be also awarded to a candidate if by awarding such marks he can earn exemption or compartment in subject/s and part/s.
(b) A candidate who re appears to clear the compartment or subject/s and part/s in which he has been declared (eligible) to re appear shall be awarded grace marks up to 1% of the total marks of the subject/s and part/s in which he re appears if by such addition the candidate can pass in that subject/s or part/s.
" Each of the respondents failed to satisfy the requirements of Rule 7 and being eligible to clear the subject in which he failed on compartmental basis reappeared in such subject in the next examination.
As on the performance of the subsequent examination each of the respondents was not eligible to pass by complying with the requirements of Rule 7, the need for invoking Rule 27 arose.
The University authorities took the view that Rule 27.1(b) authorised addition of the grace marks of up to 1 per cent on the marks secured in the subject/s in which the candidate reappeared and as with that benefit given the candidates did not pass, they. were found not to have been successful.
That led to each of the 34 respondents filing a separate writ application before the High Court.
The High Court referred to the rule and observed: "The only question to be seen is whether Regulation 27.1(a) in Chapter III of the Punjab University Calendar, Volume II, 1976, relating to Moderation of Question Papers and results of examinations, is applicable or not.
We have gone through clauses (a) and (b) of this Regulation very carefully and we find that clause (b) is not applicable.
We are unable to agree with the contention of Shri Gupta, the learned counsel for the University that the case would fall under clause (b).
This contention is without any merit as it is clear that this clause will only come into play if the candidate is failing in the subject in which he or she reappears.
It is quite clear from the facts that the petitioner has not so far availed advantage as given in clause (b) so that she could get one per cent mark of the total marks in all the subjects The contention of the learned counsel for the University, that clause (a) will only apply if a candidate appears in all the subjects in the examination, is without any merit.
The language of this provision does not show what has been contended before us.
For the reasons recorded above, we allow this writ application and direct the University to make available the benefit of clause (a) of the said Regulation to the petitioner and declare the result of the petitioner accordingly.
" A bare reading of the Rule 27 (referred to as the Regulations by the High Court) makes it clear that clause (a) is applicable where the full examination is taken and clause (b) is attracted where the candidate reappears to clear the compartment or subject and part in which he has been declared eligible to reappear.
In each of these cases the candidate was reappearing to clear the paper in which he or she had failed; clause (b) was clearly attracted and the benefit under clause (a) was not available.
The University had taken that decision and took the same stand before the High Court in answer to the rule nisi.
We are clearly of the opinion that the 35 High Court went wrong in taking the view that when a candidate reappeared to clear a paper or a subject on being found eligible to do so, clause (a) was attracted.
The language of clause (b) is such as would squarely apply to such a situation.
Having taken the view that clause (a) governed the matter, the High Court had no occasion to express any opinion as to if clause (b) applied what benefit the candidate would have got.
The provision in clause (b) is clear and on reappearing the candidate becomes entitled to grace marks of up to one per cent of the total marks of the subject/subjects in which he reappears.
Once clause (b) applies no reference is available to the performance in the regular examination taken earlier and the benefit of grace marks to the extent indicated has to be confined to the performance at the reappearance.
Once this is the position each of the candidates was not eligible to pass.
We, however, find that a direction was given in this Court on 19.6.80 on the concession of the University that the respondents in the two appeals of 1980 would be declared to have passed irrespective of the result of the appeals.
Learned counsel appearing for the University before us reiterated his consent and even agreed that the respondent in the remaining appeal may be given the same advantage as the University did not intend to make any discrimination.
In view of this special feature we do not disturb the declaration of the University that each of the respondents has passed the examination taken by him or her.
We must indicate our disapproval of the position obtaining in the Punjab University that in respect of post graduate degrees grace marks are being awarded.
A master 's degree in any speciality is considered to be the highest qualification in the normal run.
It is very much necessary that such a degree should be conferred only on the deserving students who having studied the subject and taken the appropriate examination conducted by the University at the end of such studies have deserved the degree on the basis of their performance.
There should be no scope for looking for grace marks at such level and the sooner the Punjab University abandons the practice of awarding grace marks in respect of post graduate examinations the better it would be in the interest of higher education in this country.
36 We allow each of these appeals and set aside the judgments of the High Court in each of the writ petitions without any order for costs.
To avoid confusion we reiterate that our vacating the judgments of the High Court do not in any manner affect the declarations made in favour of the respondents by the appellant University in regard to passing of the Master Degree Examinations in law.
S.R. Appeal allowed.
| Respondents in each of these appeals could not clear the LLM examination in accordance with Regulation 7 of the Punjab University Regulations either in the first attempt or later while taking on compartmental basis even after addition of grace marks as laid down in Rule 27(1)(b) of the University Regulations.
The respondents filed separate writ petitions praying for a direction to give the benefit of moderation grace mark as calculated under Rule 27(1)(a).
The High Court rejected the plea of the Appellant University holding that it was Rule 27(1)(b) that applied and not Rule 27 1(a).
Hence the appeal by Special Leave.
Allowing the appeal, the Court ^ HELD : A bare reading of the Rule 27 (referred to as the Regulations by the High Court) makes it clear that clause (a) is applicable where the full examination is taken and clause (b) is attracted where the candidate reappears to clear the compartment or subject and part in which he has been declared eligible to reappear.
In each of these cases the candidate was reappearing to clear the paper in which he or she had failed; clause (b) was clearly attracted and the benefit under clause (a) was not available.
The language of clause (b) is such as would squarely apply to such a situation.
The provision in clause (b) is clear and on reappearing the candidate becomes entitled to grace marks of up to one per cent of the total marks of the subject/subjects in which he reappears.
Once clause (b) applies no reference is available to the performance in the regular examination taken earlier and the benefit of grace marks to the extent indicated has to be confined to the performance at the reappearance.
Once this is the position each of the candidates was not eligible to pass.
[34GH, 35B C] [In view of the declaration dated 19.6.1980 made before the court, that irrespective of the result of the appeals, the candidates will be declared to have passed, the Court as a special case did not want to disturb the result.] [35D] 32 Observation: The position obtaining in the Punjab University in respect of Post Graduate degrees namely grace marks being awarded is disapproved.
A Master 's degree in any speciality is considered to be the highest qualification in the normal run.
It is very much necessary that such a degree should be conferred only on the deserving students who having studied the subject and taken the appropriate examination conducted by the University at the end of such studies have deserved the degree on the basis of their performance.
There should be no scope for looking for grace marks at such level and the sooner the Punjab University abandons the practice of awarding grace marks in respect of post graduate examinations the better it would be in the interest of higher education in this country.
[35F H]
|
Special Leave Petition (Civil) Nos.
4062 4066 of 1978.
From the Orders dated 11 1 1978 of the Madhya Pradesh High Court in M.P. Nos. 390, 391, 393, 395 and 397/75.
AND SPECIAL LEAVE PETITION (CIVIL) NO. 4069 of 1978.
From the Order dated 5 1 78 of the Madhya Pradesh High Court in M.P. No. 580/75.
section K. Gambhir for the Petitioners in all the section L. Ps.
The Order of the Court was delivered by DESAI, J. Mr. Gambhir, learned counsel for the petitioner informed us that a number of petitions are pending in the High Court of Madhya Pradesh in which the question raised in the present group of petitions is involved and as we are not inclined to grant leave, we would rather indicate our reasons by a speaking order.
At the commencement of the British Raj both in the Raj ruled area of India and the princely States institutions of higher education were set up and manned under Government aegis.
As the demand for institutions of higher education increased with the proliferation of State activity and need of white collar employees, these institutions speedily multiplied and they were generally set up and manned by educational societies or local authorities.
The turmoil since independence and especially in the last one and a half decade in the world of academicians led to the reversal of the policy of Government directly setting up educational institutions and 632 in fact whatever they had set up, being slowly handed over to educational societies and/or local authorities, and it has turned a full circle.
The grievance of the teachers in such school manifested in the demand for taking over of such institutions by the State and all over the country the transition has begun.
In Madhya Pradesh the State regulated the functioning and standards of academic instruction in Higher Secondary Schools under Madhya Pradesh Madhyamik Shiksha Adhiniyem, 1965.
This supervisory role of the State hardly improved the situation with the result that tensions increased and the demand became louder that these institutions should be taken over by the Government for its direct management and the teachers should be accorded the status of Government servants.
The State Government responded to this demand by enacting the Madhya Pradesh Local Authorities School Teachers (Absorption in Government Service) Act, 1963 ( 'the Act ' for short).
The Act provided for absorbing teachers serving in Middle Schools and Primary Schools managed by local authorities in Government service.
The relevant rule for absorption is rule 3 of the Rules enacted under the Act.
In these petitions we are concerned with rule 3(b) which reads as under: "3 (b).
For absorption on the post of Head Master/Principal of a High/Higher Secondary School, the person concerned should possess the post graduate degree and should have worked on the post for a minimum period of 7 years in the same institution and should have 10 years teaching experience in any recognised institution of Madhya Pradesh".
While implementing the aforementioned rule there arose a cleavage on the interpretation of the rule, the concerned teacher contending that what is relevant is that working on the post for a minimum period of 7 years would for the purpose of computation of 7 years include service even as incharge Head Master/Principal or officiating service in the post whereas the State contended that the teacher claiming to be absorbed as Head Master/Principal should have worked as a confirmed Head Master/Principal in a substantive post for the full period of 7 years.
The State in accordance with its interpretation declined absorption to a number of Head Masters/Principals which led to the filing of a number of writ petitions in the Madhya Pradesh High Court.
It appears that this question was first examined by the Madhya Pradesh High Court in Satyendra Prasanna Singh Yadav vs State of 633 Madhya Pradesh & 3 Ors.(1), in which the High Court took the view that the period during which a Head Master/Principal worked as incharge Principal ought to be taken into account for computing the period of 7 years.
Following this decision the present group of petitions were allowed by a Division Bench of the Madhya Pradesh High Court and an application for leave to appeal to this Court under Article 133 of the Constitution was rejected.
Hence the State of Madhya Pradesh has filed this group of petitions for special leave to appeal.
It may be mentioned that the earlier decision which the High Court seeks to follow appears to have been accepted by the State of Madhya Pradesh.
Mr. Gambhir, learned counsel for the petitioner urged that the expression: "should have worked on the post for a minimum period of 7 years in the same institution" would, in the context of the rule and the consequences flowing from it, mean only a substantive post on which the Head Master/Principal was confirmed and the confirmed holder of the substantive post for a period of 7 years would be entitled to absorption as envisaged by rule 3 (b).
On a pure grammatical construction of the expression it would indisputably appear that the person claiming to be absorbed must have worked on the post of Head Master/Principal of a High/Higher Secondary School for a minimum period of 7 years.
Emphasis is on the experience gained by working on the post of Head Master/Principal.
A person incharge of the post also works and discharges the duties and functions of the post of which he has taken charge.
Even an officiating incumbent of the post does discharge the functions and duties of the post.
While examining the relative positions of confirmed Deputy Engineers and Officiating Deputy Engineers in section B. Patwardhan & Ors. etc.
vs State of Maharashtra & Ors.
,(2) this Court observed that the officiating Deputy Engineers discharge identical functions, bear similar responsibilities and acquire an equal amount of experience in the respective assignments.
Viewed from this angle, the confirmed holder of a substantive post would be discharging the functions attached to the post and when some one is placed in that very post in an officiating capacity or directed to hold charge of the post, he would be required to perform the duties and discharge the functions of the post rendering identical service.
If the rule expressly did not make any differentiation between the persons working as a confirmed holder of substantive post and an incharge or officiating holder of the post, is there anything in the expression itself which by necessary implication excludes service in any other capacity except as a confirmed Head Master/Principal in a substantive post ? A 634 confirmed holder of a substantive post may look tautologous because one can only be confirmed in the substantive post.
Now, every High School or Higher Secondary School must of necessity have the post of Head Master/Principal and it was nowhere suggested that there would not be a post of Head Master/Principal.
If that would mean that there was always a substantive post of Head Master/Principal it may be that the confirmed holder of the post may be away and not in a position to discharge the duties and some one may be appointed in an officiating capacity or may be directed to hold charge but none the less such holder of the post will have to perform duties and discharge functions attached to the post.
Further, the emphasis in the expression is on working on the post meaning thereby performing the duties and discharging the functions assigned to the post and not the capacity in which the post is held.
Confirmation in a post being one of the glorious uncertainties of service as observed by this Court in section B. Patwardhan 's case, (supra) it is rational to believe that the framers of the rule did not want to attach any importance to the capacity in which the post is held but the emphasis was on working on the post meaning thereby discharging the duties and performing the functions assigned to the post.
Our attention was drawn to State of Assam & Ors.
vs Shri Kanak Chandra Dutta(1).
We fail to see how this decision can assist in deciding the question one way or the other.
The question that came for consideration of this Court was: whether the holder of a post designated as Moujadar in the Assam valley was holding a civil post in the context of Article 311 of the Constitution ? After examining the duties and functions attached to the post of Moujadar, this Court held that a post can exist apart from the holder of the post and that Moujadar is the holder of a civil post under the State and that it makes no difference that he is remunerated by way of a commission on the collection of Government dues and does not draw a salary.
In fact, if at all this decision helps, it would fortify the view which we are taking that the post is independent of the holder thereof and the requirement of the rule is that the person claiming to be absorbed must have worked in the post of Head Master/Principal.
Perhaps there would have been some merit in the submission on behalf of the petitioner if in rule 3(b) the words used were "who held the post" but the language in rule 3(b) is so materially different and it speaks that a person should have worked on the post.
The State was apparently wrong in introducing the element of rank for the purpose 635 of rule 3(b).
The controversy that surfaced in Ramrattan vs State of Madhya Pradesh & Ors.,(1) and the subsequent decision in State of Madhya Pradesh vs Gokul Prasad,(2) which led to a reference to a Full Bench in Girja Shankar vs S.D.O., Harda & Ors.,(3) on account of the use of the expressions such as "person appointed to be incharge of the current duties of the office" which indicated that such person did not hold the rank and, therefore, could not discharge statutory functions assigned to the post should not detain us.
The language here indicates emphasis on work being done while on the post irrespective of the capacity.
The absorption of a person as Principal under rule 3(b) does not depend on rank but on the nature of functions and duties that an incumbent discharges for a particular number of years, i.e. the duties of a Principal for a period of 7 years.
It thus clearly transpires that while computing the period of 7 years for the purpose of rule 3(b) what is determinative is performing duties and discharging functions of the post of Head Master/Principal irrespective of the capacity in which the post was held.
The High Court was, therefore, right in holding that the period during which the petitioners (respondents in these petitions) worked as incharge Head Masters/Principals ought to be taken into account by the State Government for computing the period of 7 years.
These petitions are accordingly dismissed.
V.D.K. Petitions dismissed.
| Dismissing the appeal, ^ HELD: Section 499(1) of the Cr.
P.C., which contemplated the execution of a bond by the accused and by the sureties, did not imply that a single bond was to be executed by both the accused and the sureties, signed by the accused and counter signed by the sureties.
An undertaking of the surety in Form 42, Schedule V to secure the attendance of the accused was quite independent of the undertaking given by the accused to appear before the court whenever called upon, even if both the undertakings of the surety and the accused happened to be executed in the same document for the sake of convenience.
Each under taking being distinct can be separately enforced.
[450 C, 451 B D] The fact that an accused would not be released on bail without his executing a personal bond does not mean that if a person is released by mistake without his executing a personal bond, the sureties are absolved from securing the attendance of the accused and his appearance before the court.
The sureties ' responsibility arises from the exeeution of the surety bond and is not contingent upon execution of a personal bond by the accused.
Nor is the liability to forfeiture of the bond executed by the surety contingent upon the execution and the liability to forfeiture of the personal bond executed by the accused.
The forfeiture of the personal bond of the accused is not a condition precedent to the forfeiture of the bonds executed by the sureties.
[451 E F] Abdul Aziz & Anr.
vs Emperor, AIR 1946 All. 116; Mewa Ram & Anr.
vs State, AIR 1953 All. 481; approved.
Bakaru Singh vs State of U.P., ; ; distinguished.
Brahma Nand Misra vs Emperor, AIR 1939 All. 682; Sailesh Chandra Chakraborty vs The State, AIR 1963 Cal.
309; over ruled.
|
ON: Criminal Appeal No. 50 of 1979.
From the Judgment and Order dated 23.12.1977 of the Delhi High Court in Criminal Appeal No. 162 of 1975.
R.K. Garg, R.K. Jain, Ranjan Mahapatra and P.K. Jain for the Appellant.
V.C. Mahajan, Ashok Bhan (NP) and Ms. A. Subhashini (NP) for the Respondent.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The appellant, the sole accused in this case, has been convicted under Section 302 I.P.C. and sentenced to imprisonment for life by the High Court of Delhi for causing the murder of one Champat Rai, the deceased in the case.
The prosecution case mainly rests on the evidence of P.W. 2, the sole eye witness.
Learned counsel for the appellant contended that the uncorroborated testimony of P.W. 2 is not wholly reliable and therefore the conviction cannot be sustained.
However, we may at this stage point out that the main submission has been that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence.
Even otherwise, according to the learned counsel, having regard to the fact that as the appellant is alleged to have inflicted only a single injury which proved fatal, the offence committed would be one amounting to culpable homicide.
To appreciate these submissions in a proper perspective, we 205 think it necessary to state the facts of the case.
The deceased was married to Agya Devi examined as P.W. 3.
He lived with his wife in a house in East Azad Nagar, Shahdra, Delhi.
In the adjoining house were living his mother, P.W. 1 and his two brothers P.Ws 2 and 5.
The appellant was married to a cousin of Agya Devi, P.W. 3 and he used to visit the house of the deceased ostensibly as a relative.
The deceased, P.Ws 1,2 and 5 objected to the appellant 's visit as they suspected illicit relation between the appellant and Agya Devi P.W. 3, wife of the deceased.
On August 18, 1973 at about 11 P.M. when the deceased was not in the house , the appellant came to visit Agya Devi.
A few minutes later the deceased also came home and he objected to the presence of the appellant.
On this there was an altercation and exchange of hot words.
Then the appellant took out a kirpan (churra) from his waist and stabbed the deceased in the chest.
The deceased fell down crying that the appellant has killed him.
The appellant with the weapon ran out of the house.
The incident was witnessed by P.W. 2 from the roof where he had retired for sleeping during the night.
P.W. 2 and his another brother P.W. 5 chased the appellant but as the appellant who was armed with a lethal weapon threatened them and made good his escape.
On return they found the deceased dead.
P.W. 3 was sitting next to the body and was crying.
The information was sent to the police and P.W. 18, the Sub Inspector, Kotwali Police Station came to the scene of occurrence and recorded the statement of P.W. 2 on the basis of which the case was registered against the appellant.
He seized certain incriminating articles, held the inquest and sent the dead body for post mortem.
He also recorded the statement of the material witness.
One of the recoveries made by him consisted of a sheath of the kirpan.
The Doctor, P.W. 17, examined the dead body and conducted the post mortem.
He found one incised stab wound on the left chest which proved fatal.
The particulars of the injury are: (1) One incised stab wound, horizontally placed on the (L) side of the chest 1" lateral to the left side and 2" below and medial to the (L_) Nipple size 1" x 1/2" x with spindle shaped appearance and with either margins pointed.
The margins of the wound were smooth and the collection of blood in the soft tissues.
(2) One incised wound over right little finger at the base of second phalynx on dorcal surface size 3/4" x 4/10" x bone deep.
There is collection of blood in the soft tissues and there was cut 206 mark on the base of second phalnyx right little finger.
The wound was bandaged with a piece of bandage and cotton soiled in blood.
The wound is not spindle shaped in appearance.
The margins were smooth.
This injury was a simple one and not due to a separate blow.
The Doctor opined the injury NO.1 was sufficient to cause death in the ordinary course of nature.
The cause of death was haomorrhage and shock due to injuries.
The accused was arrested on 28.8.73 and at his instance the kirpan was recovered.
After completion of the investigation, the charge sheet was laid.
The accused pleaded not guilty and denied the recoveries.
The prosecution examined P.W. 2, the brother of the deceased and P.W. 3 Agya Devi, wife of the deceased.
But P.W. 3 turned hostile.
Consequently the prosecution was left with the testimony of P.W. 2, the remaining eye witness.
Both the courts below relied on the evidence of P.W. 2 and they also held that his evidence was corroborated by that of P.Ws 1 and 5.
As hereinbefore mentioned, the learned counsel for the appellant submitted that the evidence of P.W. 2 on which the case entirely rests, cannot be accepted.
We have gone through his evidence carefully as well as that of P.Ws. 1 and 5.
The evidence of P.W. w does not suffer from any serious infirmity.
At any rate there is other corroborative evidence also.
We see absolutely no reason to disagree with the findings of the courts below regarding their evidence.
The learned counsel, however, submitted that the accused must have acted in right of self defence.
According to the learned counsel, P.W. 2 himself has deposed that there was exchange of hot words between the appellant and the deceased which would have resulted in a fight and the appellant having reasonably apprehended danger to his life, inflicted the injury on the deceased in self defence.
We see no basis for this submission.
P.W. 2 has no doubt stated that there was exchange of hot words between the appellant and the deceased but he did not speak about any fight between the two.
On the other hand his evidence shows that when the deceased came and questioned the accused then there was exchange of hot words.
The accused immediately took out a kirpan (churra) from his waist and stabbed the deceased.
Both the courts below also have rightly rejected this plea.
Therefore we see absolutely no grounds to come to a different conclusion.
207 The next and rather the main submission is that the offence committed by the appellant would only amount to culpable homicide inasmuch as he has inflicted only one injury.
In support of his submission, he relied on some of the decisions of this Court.
In Tholan vs State of Tamil Nadu, the accused who dealt a single knife below on the chest found to be sufficient to cause death, was convicted under Section 304 Part II I.P.C., disagreeing with the contention on behalf of the State that Clause III of Section 300 I.P.C. would be attracted in such a case.
In arriving at such a conclusion, this Court took into consideration various surrounding circumstances namely that the presence of the deceased at the scene of occurence was wholly accidental and that the accused dealt only one blow.
It must also be mentioned that the deceased, who was a stranger in that case, came out of his house and cautioned the accused not to indulge in abusive language as ladies were present in that area.
The accused thereupon questioned him and when both were remonstrating, he took out a knife from his waist and stabbed the deceased on the right side of the chest.
On these facts, this Court held: "We are satisfied that even if Exception I is not attracted, the requisite intention cannot be attributed to the appellant.
But in the circumstances herein discussed he wielded a weapon like a knife and therefore he can be attributed with the knowledge that he was likely to cause an injury which was likely to cause death.
In such a situation, he would be guilty of committing an offence under Section 304 Part II of the Indian Penal Code.
" In support of this view, reliance is placed on some earlier decision of this Court in Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab, ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, and Ram Sunder vs State of U.P., Criminal Appeal No. 555/83 decided on 24.10.1983.
The learned counsel submitted that the observations made in these cases apply on all fours to the facts of this case.
According to him, there was an altercation and during the same the appellant suddenly whipped out a kirpan and inflicted only one injury and it is therefore reasonable to infer that he would not have intended to cause that particular injury and consequently Clause Thirdly of Section 300 is not attracted.
The submission though put forward in a simple way leads to an important legal quandary regarding the interpretation of Clause Thirdly Section 300 I.P.C. which is considered be a 208 difficult and interact issue by the courts.
However, Virsa Singh vs State of Punjab, ; is considered to be an authoritative pronouncement in this regard.
But perhaps inspired by some of the decisions rendered thereafter both by the High Courts and the Supreme Court there is a marked change in the trend of the contentions regarding the scope of Clause Thirdly Section 300 I.P.C.
It has reached a stage over simplification and it is very often argued that whenever death is due to a single blow the offence would be a culpable homicide and not murder.
Somewhat to the same effect is the contention in the instant case.
In our view it is fallacious to contend that when death is caused by a single blow Clause Thirdly is not attracted and therefore it would not amount to murder.
The ingredient `Intention ' in that Clauses is very important and that gives the clue in a given case whether offence involved is murder or not.
For the purpose of considering the scope of Clause 3 it is not necessary for us to embark upon an examination of the entire scope of Section 299 and 300 I.P.C.
It is enough if we start with Virsa Singh 's case.
Clause Thirdly of Section 300 I.P.C. reads thus: "3rdly If it is done with the intention of causing bodily injury to any person and the bodily injury intended to be inflicted is sufficient in the ordinary course of nature to cause death, or " We may note at this stage that `intention ' is different from `motive ' or `ignorance ' or `negligence '.
It is the `knowledge ' or `intention ' with which the act is done that makes difference, in arriving at a conclusion whether the offence is culpable homicide or murder.
Therefore, it is necessary to know the meaning of these expressions as used in these provisions.
Before doing so we shall first refer to the to the ratio laid down in Virsa Singh 's case and the meaning given to the expression `intention '.
The appellant Virsa Singh was sentenced to imprisonment for life under Section 302 I.P.C.
There was only one injury on the deceased and that was attributed to him.
It was caused as a result of the spear thrust and the Doctor opined that the injury was sufficient in the ordinary course of nature to cause death.
The Courts also found that the whole affair was sudden and occurred on a chance of meeting.
Peritonit is also supervened which hastened the death of the deceased.
It was contended that the prosecution has not proved that there was an intention to inflict a bodily injury that was sufficient to cause death in 209 the ordinary course of nature and therefore the offence was not one of murder.
This contention was rejected.
After analysing the Clause Thirdly it is held the Court that the prosecution must prove: "First, it must establish, quite objectively, that a bodily injury is present; Secondly, the nature of the injury must be proved; there are purely objective investigations.
Thirdly, it must be proved that there was an intention to inflict that particular bodily injury, that is to say, that it was not accidental or unintentional, or that some other kind of injury was intended.
Once these three elements are proved to be present, the enquiry proceeds further and, Fourthly, it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature.
This part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender.
" The Court Further added thus: "One of these four elements is established by the prosecution (and, of course, the burden is on the prosecution throughout) the offence is murder under Sec.
300, 3rdly.
It does not matter that there was no intention even to cause an injury of a kind that is sufficient to cause death in the ordinary course of nature (not that there is any real distinction between the two).
It does not even matter that there is no knowledge that an act of that kind will be likely to cause death.
Once the intention to cause the bodily injury actually found to be present is proved, the rest of the enquiry is purely objective and the only question is whether, as a matter of purely objective inference, the injury is sufficient in the ordinary course of of nature to cause death.
No one has a licence to run around inflicting injuries that are sufficient to cause death in the ordinary course of nature and claim that they are not guilty of murder.
If they inflict injuries of that kind, they must face the consequences; and they can 210 only escape if it can be shown, or reasonably deduced that the injury was accidental or otherwise unintentional.
" (emphasis supplied) The learned Judge also observe thus: "In the absence of evidence, or reasonable explanation, that the prisoner did not intend to stab in the stomach with a degree of force sufficient to penetrate that far into the body, or to indicate that his act was a regrettable accident and that he intended otherwise, it would be perverse to conclude that he did not intend to inflict the injury that he did.
Once that intent is established (and no other conclusion is reasonable possible in this case and in any case it is a question of fact), the rest is a matter for objective determination from the medical and other evidence about the nature and seriousness of the injury.
" Adverting to the contention that there is only a single blow, it is further held: "The question is not whether the prisoner intended to inflict a serious injury or a trivial one but whether he intended to inflict the injury that is proved to be present.
If he can show that he did not, or if the totality of the circumstances justify such an inference, then, of course, the intend that the section requires is not proved.
But if there is nothing beyond the injury and the fact that the appellant inflicted it, the only possible inference is that he intended to inflict it.
Whether he knew of its seriousness, or intended serious consequences, it neither here nor there.
The question, so far as the intention is concerned, is not whether he intended to kill, or to inflicit an injury of a particular degree of seriousness, but whether he intended to inflict the injury in question; and once the existence of the injury is proved the intention to cause it will be presumed unless the evidence or the circumstances warrant an opposite conclusion.
But whether the intention is there or not is one of fact and not one of law.
Whether the wound is serious or otherwise, and if serious, how serious, is a totally separate and distinct question and has nothing to do with the question whether the prisoner intended to inflict the injury in question.
" 211 At another passage which has to be noted in this context reads thus: "It is true that in a given case the enquiry may be linked up with the seriousness of the injury.
For example, if it can be proved, or if the totality of the circumstances justify an inference, that the prisoner only intended a superficial scratch and that by accident his victim stumbled and fell on the sword or spear that was used, then of course the offence is not murder.
But that is not because the prisoner did not intended the injury that he intended to inflict to be a serious as it turned out to be but because he did not intend to inflict the injury in question at all.
His intention in such a case would be to inflict a totally different injury.
The difference is not one of law but one of fact; and whether the conclusion should be one way or the other is a matter of proof, where necessary, by calling in aid all reasonable inferences of fact in the absence of direct testimony.
It is not one for guesswork and fanciful conjecture.
Referring to these observations, Divisional Bench of this Court in Jagrup Singh 's case observed thus: "These observations of Vivian Bose, J. have become locus classicus.
The test laid down in Virsa Singh 's case for the applicability of clause Thirdly is now ingrained in our legal system and has become part of the rule of law.
" The Division Bench also further held that the decision in Virsa singh 's case has throughout been followed as laying down the guiding principles.
In both these cases it is clearly laid down that the prosecution must prove (1) that the body injury is present, (2) that the injury is sufficient in the ordinary course of nature to cause death, (3) that the accused intended to inflict that particular injury that is to say it was not accidental or unintentional or that some other kind of injury was intended.
In other words the 3rd Clause consists of two parts.
The first part is that there was an intention to inflict the injury that is found to be present and the second part that the said injury is sufficient to cause death in the ordinary course of nature.
Under the first part the prosecution has to prove from the given facts and circumstances that the intention of the accused was to cause that particular injury.
whereas the second part whether it was sufficient to cause the death is an objective enquiry and it is a matter of inference or deduction from the particulars of the injury.
The language of Clause Thirdly of Section 300 212 speaks of intention at two places and in each the sequence is to be established by the prosecution before the case can fall in that Clause.
The `intention ' and `knowledge ' of the accused are subjective and invisible state of mind and their existence has to be gathered from the circumstances, such as the, weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances.
The framers of the code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the samething as the intention that such consequences should ensue.
Firstly, when an act is done by a person, it is presumed that he, must have been aware that certain specified harmful consequences would or could follow.
But that knowledge is bare awareness and not the same thing as intention that such consequences should ensue.
As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposeful doing of a thing to achieve a particular end.
Kenny in "Outline of Criminal Law" (17th Edition at page 31) has observed: "Intention: To intend is to have in mind a fixed purpose to reach a desire objective; the noun `intention ' in the present connexion is used to denote the state of mind of a man who not only forsees but also desires the possible consequences of his conduct.
Thus if one man throws another from a high tower or cuts off his head it would seem plain that the both foresees the victim 's death and also desires it: the desire and the foresight will also be the same if a person knowingly leaves a helpless invalid or infant without nourishment or other necessary support until death supervenes.
It will be noted that there cannot be intention unless there is also foresight, since a man must decide to his own satisfaction, and accordingly must foresee, that to which his express purpose is directed.
Again, a man cannot intend to do a thing unless he desires to do it.
It may well be a thing that he dislikes doing, but he dislikes still more the consequences of his not doing it.
That is to say he desires the lesser of two evils, and therefore, has made up his mind to bring about that one." Russel on Crime (12th Edition at Page 41) has observed: 213 "In the present analysis of the mental element in crime the word `intention ' is used to denote the mental attitude of a man who has resolved to bring about a certain result if he can possibly do so.
He shapes his line of conduct so as to achieve a particular end at which he aims.
" it can thus be seen that the `knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive.
On the otherhand, `intention ' is a conscious state in which mental faculties are aroused into activity and summoned into action for the purpose of achieving a conceived end.
it means shaping of one 's conduct so as to bring about a certain event.
Therefore in the case of `intention ' mental faculties are projected in a set direction.
Intention need not necessarily involve premediation.
Whether there is such an intention or not is a question of fact.
In Clause Thirdly the words "intended to be inflicted" are singnificant.l; As noted already, when a person commits an act, he is presumed to expect the natural consequences.
But from the mere fact that the injury caused is sufficient in the ordinary course of nature to cause death it does not necessarily follow that the offender intended to cause the injury of that nature.
However, the presumption arises that he intended cause that particular injury.
In such a situation the Court has to ascertain whether the facts and circumstances in the case are such as to rebut the presumption and such facts and circumstances cannot be laid down in an abstract rule and they will vary from case to case.
However, as pointed out in Virsa Singh 's case the weapon used, the degree of force released in wielding it, the antecedent relation of the parties, the manner in which the attack was made that is to say sudden or premeditated, whether the injury was inflicted during a struggle or grappling, the number of injuries inflicted and their nature and the part of the body where the injury was inflicted are some of the relevant factors.
These and other factors which may arise in a case have to be considered and if on a totality of these circumstances a doubt arises as to the nature of the offence, the benefit has to go to the accused.
In some cases, an explanation may be there by the accused like exercise of right of private defence or the circumstances also may indicate the same.
Likewise there may be circumstances in some cases which attract the first exception.
In such cases different considerations arise and the Court has to decide whether the accused is entitled to the benefit of the exception, though the prosecution established that one or the other clauses of Section 300 I.P.C. is attracted.
In the present enquiry we need not advert to that aspect since we are concerned only with scope of clause Thirdly of Section 300 I.P.C. 214 The decision in Virsa Singh 's case has throughout been followed in a number of cases by the High Courts as well as by the Supreme Court.
Such decisions are too numerous and it may not be necessary for us to refer to all those cases.
However, it would be useful to refer to a few decisions which have a bearing to the point in issue.
In Chahat Khan vs State of Haryana, the deceased was waylaid by the accused who were armed with lathis.
The accused had both gun and a lathi but he used only the lathi and struck a blow on the head with sufficient force and the solitary below with the lathi was found to be sufficient in the ordinary course of nature to cause death and it was held that the case fell within clause Thirdly as there was clear intention to cause such bodily injury which in the ordinary course of nature was sufficient to cause death.
In Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652 there was exchange of abuses between the two parties armed with lathis and in the course of the fight, the accused struck one lathi blow on the head of the deceased which causes a fracture of the skull resulting in death, and it was held that he had given the blow with the knowledge that it was likely to cause death.
In Willie (Williams) Slaney vs State of Madhya Pradesh, there was a sudden quarrel leading to an exchange of abuses and in the heat of the moment a solitary blow with a hockey stick had been given on the head.
It was held that the offence amounted to culpable homicide punishable under Section 304 Part II I.P.C.
In Harjinder Singh (alias Jinda) vs Delhi Admn.
, ; the facts are that there was a sudden commotion and when the deceased intervened in the fight, the accused took out a knife and stabbed the deceased and the deceased was in crouching position presumably to intervene when he received the blow.
Though the injury was found sufficient in the ordinary course of nature to cause death.
, he was convicted for the offence of culpable homicide.
The intention to cause that particular injury was not present.
To the same effect is the decision in Laxman Kalu Nikalji vs State of Maharashtra; , where the accused lost his temper and took out a knife and gave one blow during a sudden quarrel.
In all these cases the approach has been to find out whether the ingredient namely the intention to cause the particular injury was present or not and it is held that circumstances like a sudden quarrel in a fight or when the deceased intervenes in such a fight, would create a doubt about the ingredient of intention as it cannot definitely be said in such circumstances that the accused aimed the blow at a particular part of the body.
When an accused inflicts a blow with a deadly weapon the presumption is that he intended to inflict that injury but 215 there may be circumstances like those, as mentioned above, which rebut such presumption and throw a doubt about the application of clause Thirdly.
Of course much depends on the facts and circumstances of each case.
Now let us examine some of the cases relied upon the learned counsel for the appellant.
In Kulwant Rai 's case a Bench consisting of D.A. Desai and R.B. Misra, JJ.
held in a hit and run case that where it cannot be said that the accused intended to inflict the very fatal injury, clause Thirdly is not attracted.
That was a case were only one blow was given with the dagger in the epigastrium area and the facts would go to show that there was no pre meditation, no prior enmity and a short quarrel preceded the assault.
However, we do not find any discussion about the scope of clause Thirdly.
Randhir Singh 's case was decided by a Bench consisting of D.A. Desai and Baharul Islam, JJ.
In that case, a single head injury was inflicted by a college student on the deceased with a weapon supplied by his father and the deceased died after six days and there also an assault was preceded by a quarrel between the father of the accused and the deceased.
The Bench observed that: "Merely because the blow landed on a particular spot on the body divorced from the circumstances in which the blow was given it would be hazardous to say that the accused intended to cause that particular injury.
The weapon was not handy.
He did not possess one.
Altercation took place between his father and the deceased and he gave blow with kassi.
In our opinion in these circumstances it would be difficult to say that the accused intended to cause that particular injury.
" Before the same Bench, in Gurmail Singh and others vs State of Punjab, this question again came up for consideration.
In that case, an indecent joke cut by the accused with the wife of a P.W. led to a quarrel and the deceased who was nowhere in the picture tried to intervene, two of the accused gave some blow on him.
Then Gurmail Singh, the appellant therein, gave a single blow with spear on the chest which proved fatal.
It was contended by the State that clause Thirdly of Section 300 I.P.C was attracted.
it is observed that: "But it was said that the case would be covered by Para 3 of Section 300 in that Gurmail Singh intended to cause an injury and the injury intended to be inflicted was proved to 216 be sufficient in the ordinary course of nature to cause death.
This argument is often raised for consideration by this Court and more often reliance is placed on Virsa Singh vs State of Punjab; , We would have gone into the question in detail but in Jagrup Singh vs State of Haryana ; , Sen. J. after examining all the previous decisions on the subject, observed that in order to bring the case within Para 3 of Section 300, I.P.C., it must be proved that there was an intention to inflict that particular bodily injury which in the ordinary course of nature was sufficient to cause death.
This view was further affirmed in a decision rendered in Randhir Singh vs State of Punjab, We are of the opinion that in the facts found by the High Court it could not be said that accused 1 Gurmail singh intended to cause that particular bodily injury which in fact was found to have been caused.
May be, the injury inflicted may have been found to be a sufficient in the ordinary course of nature to cause death.
What ought to be found is that the injury found to be present was the injury that was intended to be inflicted.
It is difficult to say that with confidence in the present case keeping in view the facts found by the High Court that accused 1 Gurmail Singh intended to cause the very injury which was found to be fatal." Therefore this decision also affirms the view taken in Virsa Singh 's case.
Then came the decision in Jagtar Singh 's case rendered by a Bench consisting of D.A.Desai and Amarendra Nath Sen, JJ.
In that case a single knife blow was inflicted in the chest and it was found to be sufficient in the ordinary course of nature to cause death.
The Bench held that clause Thirdly was not attracted in view of circumstances i.e. there the accused was a young man and inflicted the injury on the spur of the moment and some extent on deceased 's provocation in a sudden chance quarrel and on a trivial issue.
The Bench observed that: "The cause of quarrel though trivial was just sudden and in this background the appellant, a very young man gave one blow.
He could not be imputed with the intention to cause death or the intention to cause that particular injury which proved fatal.
" In this case, there is no reference to Virsa Singh 's case but there is a 217 references to Jagrup Singh 's case which decision, as noted already, has followed the ratio in Virsa singh 's case.
Then came the decision in Tholan 's case on which the counsel has heavily relied upon.
In that case also the appellant inflicted only a single knife blow on the chest of the deceased sufficient to cause death but it was on the spur of the moment.
The Division Bench, consisting of D.A. Desai and R.B.Misra, JJ.
took into the consideration that the deceased had nothing to do with the chit organised by one K.G. Rajan in respect of which there was a quarrel between the appellant and the organisers of the chit and when the accused was abusing the organisers, the deceased seemed to have told the accused not to misbehave in the presence of the ladies and not to use vulgar and filthy language.
The presence of the deceased was wholly accidental and the appellant on the spur of the moment inflicted the fatal injury on the chest.
The Division Bench relying on the earlier decision under similar circumstances convicted the accused under Section 304 Part II.
A reference is also made to the decision in Jagrup Singh 's case.
Therefore in this case also, the ratio laid down in Virsa Singh 's case is presumably followed.
In all these cases, injury by a single blow was found to be sufficient in the ordinary course of nature to cause death.
The supreme Court took into consideration the circumstances such as sudden quarrel, grappling etc.
as mentioned above only to assess the state of mind namely whether the accused had the necessary intention to cause that particular injury i.e. to say that he desired expressly that such injury only should be the result.
It is held in all these cases there was no such intention to cause that particular injury as in those circumstances, the accused could have been barely aware i.e only had knowledge of the consequences.
These circumstances under which the appellant happened to inflict the injury it is felt or atleast a doubt arose that all his mental faculties could not have been roused as to form an intention to achieve the particular result.
We may point out that we are not concerned with the intention to cause death in which case it will be a murder simpliciter unless exception is attracted.
We are concerned under clause Thirdly with the intention be cause that particular injury which is subjective inquiry and when and when once such intention is established and if the intended injury is found objectively to be sufficient in the ordinary course of nature to cause death, clause Tirdly is attracted and it would be murder, unless one of the exceptions to Section 300 is attracted.
If on the otherhand this ingredient of `intention ' is not established or if a reasonable doubt arises in this regard then only it would be reasonable to infer that Clause Thirdly is not 218 attracted and that the accused must be attributed knowledge that in inflicting the injury he was likely to cause death in which case it will be culpable homicide punishable under Section 304 Part II I.P.C. Bearing these principles in mind, if we examine the facts in the present case, clause Thirdly of Section 300 I.P.C. is fully attracted.
The appellant was having illicit relation with Agya Devi, wife of the deceased and his visits to her house were resented and objected.
On the day of occurence, the accused visited the house when the deceased was not there and he went there armed with a kirpan.
When the deceased came and objected to his presence there was only an altercation and exchange of hot words, and not a fight.
Thereupon he took out a knife and stabbed on the chest of the deceased resulting instantaneous death of the deceased.
The above circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one.
All the above circumstances would certainly indicate such a state of mind namely he aimed and inflicted that injury with a deadly weapon.
As observed in Virsa Singh 's case in the absence of evidence or reasonable explanation show that the appellant did not intend to stab in the chest with a kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did.
When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death.
Therefore an offence of murder is made out.
Accordingly the appeal is dismissed.
Y.Lal Appeal dismissed.
| The appellant, had illicit connection with Agya Devi (P.W. 3), wife of the deceased and in that connection he used to visit her house quit frequently to which the deceased and his two brothers & mother living separately in the adjacent house used to object.
It may be pointed that the Agya Devi was related to the appellant 's wife.
On August 18, 1973, at about 11 p.m. when the deceased was not in house, the appellant came to visit Agya Devi.
A shortwhile later, the deceased also came home and he objected to the presence of the appellant whereupon an altercation and exchange of hot words ensued between the appellant and the deceased.
The appellant took out a kirpan (chhurra) from his waist and stabbed the deceased in the chest.
The deceased fell down crying that the appellant has killed him and the appellant fled away with the weapon.
the incident was witnessed by Agya Devi (P.W. 3) and P.W. 2, deceased 's brother from the roof of the house.
The deceased died as a result of the injury.
The prosecution was thereupon launched against the appellant and the prosecution examined and amongst others P.W. 2 and P.W. 3.
P.W. 3 turned hostile, with the result the prosecution was left with only P.W. 2 (brother of the deceased) as eye witness.
The trial court relied on the evidence of P.W. 2 and also held that his evidence was corroborated by the P.Ws. 1 and 5 and recorded the conviction under section 302, I.P.C. and sentenced him to imprisonment for life for causing the death of Champat Rai, the deceased, which order was later affirmed by the Delhi High Court.
Hence this appeal by the appellant, after obtaining special leave.
The main contention of the appellant is that even if the prosecution case is to be accepted, an offence of murder is not made out as the accused was entitled to the right of private defence; even otherwise the accused having inflicted only one injury which proved fatal, the offence would be one amounting to culpable homicide.
203 Dismissing the appeal, this Court, HELD: `Intention ' is different from ``motive ' or ignorance or ``negligence '.
It is the `knowledge ' or `intention ' with which that act is done that makes difference, in arrival at a conclusion whether the offence is culpable homicide or murder.
[208 E] The language of Clause Thirdly of Section 300 speaks of intention at two places and in each the sequence is to be established by the prosecution before the can can fall in that Clause.
The `intention ' and `knowledge ' of the accused are subjective and invisible states of mind and their existence has to be gathered from the circumstances, such as the weapon used, the ferocity of attack, multiplicity of injuries and all other surrounding circumstances.
The framers of the Code designedly used the words `intention ' and `knowledge ' and it is accepted that the knowledge of the consequences which may result in doing an act is not the same thing as the intention that such consequences should ensue.
Firstly, when an act is done by a person, it is presumed that he , must have been aware that certain specified harmful consequences would or could follow.
But the knowledge is bare awareness and not the same thing as `intention ' that such consequences should ensue.
As compared to `knowledge ', `intention ' requires something more than the mere foresight of the consequences, namely the purposely doing of a thing to achieve a particular end.[211H 212C] `Knowledge ' as contrasted with `intention ' signify a state of mental realisation with the bare state of conscious awareness of certain facts in which human mind remains supine or inactive.
On the other hand, `intention ' is a conscious state in which mental faculties are aroused into actively and summoned into action for the purpose of achieving a conceived end.
[213B C] The circumstances would show that the accused intentionally inflicted that injury though it may not be pre mediated one.
All the circumstances would certainly indicate such a state of mind namely that he aimed and inflicted that injury with a deadly weapon.
In the absence of evidence or reasonable explanation to show that the appellant did not intend to stab in the chest with kirpan with that degree of force sufficient to penetrate the heart, it would be perverse to conclude that he did not intend to inflict that injury that he did.
When once the ingredient `intention ' is established then the offence would be murder as the intended injury is found to be sufficient in the ordinary course of nature to cause death.
Therefore an offence of murder is made out.
[218D E] 204 Tholan vs State of Tamil Nadu, ; Jagrup Singh vs State of Haryana, ; ; Randhir Singh vs State of Punjab ; Kulwant Rai vs State of Punjab, ; Hari Ram vs State of Haryana, ; Jagtar Singh vs State of Punjab, ; Ram Sunder vs State of U.P., Crl.
Appeal No. 555/83 decided on 24.10.1983; Chahat Khan vs State of Haryana ; Chamru Budhwa vs State of Madhya Pradesh, AIR 1954 SC 652; Willie (William) Slaney vs State of Madhya Pradesh, ; ; Harjinder Singh alias Jinda vs Delhi admn.
; , ; Laxman Kalu Nikalji vs State of Maharashtra, ; ; Gurmail Singh and Ors.
vs State of Punjab, , referred to.
Virsa Singh vs State of Punjab, ; , followed.
|
ition No. 355 of 1979.
(Under Article 32 of the Constitution) P. R. Mridul, K. Jayaram, K. Ram Kumar and Aruneshwar Gupta for the Petitioner.
Soli J. Sorabjee, Solicitor General, R. N. Sachthey, E. C. Agarwala and Miss A. Subhashini for Respondent No. 1.
The Judgment of V. R. Krishna Iyer, section Murtaza Fazal Ali, and D. A. Desai, JJ. was delivered by Krishna Iyer, J. and concurring opinion of R. section Pathak and A. D. Koshal, JJ. was delivered by Pathak, J. KRISHNA IYER, J. Is it constitutionally valid or desirable on principle to permit a private citizen, who has but loose nexus with the victim of a crime, to invoke the special power under article 136 of the Constitution for leave to appeal against an acquittal of the alleged criminal thereby putting in peril his life or liberty in the absence of any legislative provision arming such officious outsider with the right to appeal? This issue, profound on its face but unsound on reflection, falls for decision in this writ petition under article 32 of the Constitution.
The facts, compressed into a single sentence, are that the peti 877 tioner was acquitted of a murder charge by the High Court in appeal but the brother of the deceased not the State nor even the first informant moved this Court under article 136, got leave and had his appeal heard which resulted in the petitioner (accused) being convicted and sentenced to the life term under section 302 I.P.C.
The present contention urged to upset that conviction, is that the leave to appeal and the subsequent proceedings were unconstitutional as violative of article 21 the procedural magna carta protective of life and liberty and, therefore, the sentence must fail.
This plea, faintly presented before this Court when the appeal was heard, was briefly considered and rightly rejected.
This second battle, doomed to fail like the first, demands of us a condensed ratiocination in negation of the contention hopefully urged by Sri Mridul, counsel for the petitioner.
Two inter laced issues arise and they turn on (a) the content and character of article 136 vis a vis article 21, and (b) the locus standi of a Good Samaritan, if we may use that expression to refer to a public spirited citizen seeking to trigger the legal process to see that justice is done to his neighbour.
Article 21, in its sublime brevity, guardians human liberty by insisting on the prescription of procedure established by law, not fiat as sine qua non for deprivation of personal freedom.
And those procedures so established must be fair, not fanciful, nor formal nor flimsy, as laid down in Maneka Gandhi 's case.
So, it is axiomatic that our constitutional jurisprudence mandates the State not to deprive a person of his personal liberty without adherence to fair procedure laid down by law.
The question is whether there is any procedure, fair or otherwise, which enables a kindly neighbour who is not a complainant or first informant, to appeal to the Supreme Court against an allegedly erroneous acquittal by the High Court.
The corpus juris contains no black letter law arming any such purely compassionate soul to approach this Court, argues Sri Mridul; and so, his client 's liberty has been deprived by a proceeding initiated by someone without any procedure established by law.
We see the dexterity in the advocacy but reject its efficacy.
Nor are we impressed with the submission that the brother of the deceased in the case, or any other high minded citizen, is an officious meddler who has no business nor grievance when the commission of grievous crime is going unpunished.
There is a spiritual sensitivity for our criminal justice system which approves of the view that a wrong done to anyone is a wrong done to oneself, although for pragmatic considerations the law leashes the right to initiate proceedings in some situations.
Again, 'justice is functionally outraged not only when an 878 innocent person is punished but also when a guilty criminal gets away with it stultifying the legal system.
The deep concern of the law is to track down, try and punish the culprit, and if found not guilty, to acquit the accused.
It is imperative under article 21 that there should be some civilised procedure for holding a man guilty and depriving him of his liberty.
Undoubtedly, this Court, if it grants leave under article 136 and eventually finds him guilty, deprives him of his liberty; and so the crucial question that falls for decision is as to whether there is any procedure as predicated by article 21 independent of or implicit in article 136.
It is apparent that there is no statutory provision which creates a right of appeal in favour of a stranger enabling him to challenge an acquittal by the High Court.
The Criminal Procedure Code does not create such a right of appeal and, speaking generally, a right of appeal is the creature of statute.
So it is submitted that before the court may grant special leave under article 136 there must be an antecedent right of appeal, absent which the question of leave by the court does not arise.
The argument is ingenious but inference is fallacious.
An insightful understanding of the sweep, scope and character of article 136 will easily dispel the dichotomy between an antecedent right of appeal and a subsequent grant of leave, which is the corner stone of the contention of the petitioner.
The jural reach and plural range of the judicial process to remove injustice in a given society is a sure index of the versatile genius of law in action as a delivery system of social justice.
By this standard, our constitutional order vests in the summit court a jurisdiction to do justice, at once omnipresent and omnipotent but controlled and guided by that refined yet flexible censor called judicial discretion.
This nidus of power and process, which master minds the broad observance throughout the Republic of justice according to law, is article 136.
Specificity being essential to legality, let us see if the broad spectrum spread out of article 136 fills the bill from the point of view of "procedure established by law".
In express terms, article 136 does not confer a right of appeal on a party as such but it confers a wide discretionary power on the Supreme Court to interfere in suitable cases.
The discretionary dimension is considerable but that relates to the power of the court.
The question is whether it spells by implication, a fair procedure as contemplated by article 21.
In our view, it does.
Article 136 is a special jurisdiction.
It is residuary power; it is extra ordinary in its amplitude, its limit, when it chases injustice, in the sky itself.
This Court functionally fulfils itself by reaching out to injustice 879 wherever it is and this power is largely derived in the common run of cases from article 136.
Is it merely a power in the Court to be exercised in any manner it fancies? Is there no procedural limitation in the manner of exercise and the occasion for exercise ? Is there no duty to Act fairly while hearing a case under article 136, either in the matter of grant of leave or, after such grant, in the final disposal of the appeal ? We have hardly any doubt that there is a procedure necessarily implicit in the power vested in the summit court.
It must be remembered that article 136 confers jurisdiction on the highest court.
The founding fathers unarguably intended in the very terms of article 136 that it shall be exercised by the highest judges of the land with scrupulous adherence to judicial principles well established by precedents in our jurisprudence.
Judicial discretion is canalised authority not arbitrary eccentricity.
Cardozo, with elegant accuracy, has observed : The judge, even when he is free, is still not wholly free.
He is not to innovate at pleasure.
He is not a knighterrant roaming at will in pursuit of his own ideal of beauty or of goodness.
He is to draw his inspiration from consecrated principles.
He is not to yield to spasmodic sentiment, to vague and unregulated benevolence.
He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to 'the primordial necessity of order in the social life.
Wide enough in all conscience is the field of discretion that remains.
" It is manifest that article 136 is of composite structure, is power cum procedure power in that it vests jurisdiction in the Supreme Court, and procedure in that it spells a mode of hearing.
It obligates the exercise of judicial discretion and the mode of hearing so characteristic of the court process.
In short, there is an in built prescription of power and procedure in terms of article 136 which meets the demand of Art.21.
We may eye the issue slightly differently.
If article 21 is telescoped into article 136, the conclusion follows that fair procedure is imprinted on the special leave that the court may grant or refuse.
When a motion is made for leave to appeal against an acquittal, this Court appreciates the gravity of the peril to personal liberty involved in that proceeding.
It is fair to assume that while considering the petition under article 136 the court will pay attention to the question of liberty, the person who seeks such leave from the court, his motive and his locus standi and the weighty factors which persuade the court to grant special leave.
When this conspectus of processual circumstances and 880 criteria play upon the jurisdiction of the court under article 136, it is reasonable to conclude that the desideratum of fair procedure implied in article 21 is adequately answered.
Once we hold that article 136 is a composite provision which vests a wide jurisdiction and, by the very fact of entrusting this unique jurisdiction in the Supreme Court, postulates, inarticulately though, the methodology of exercising that power, nothing more remains in the objection of the petitioner.
It is open to the Court to grant special leave and the subsequent process of hearing are well established.
Thus, there is an integral provision of power cum procedure which answers with the desideratum of article 21 justifying deprivation of life and liberty.
The wider the discretionary power the more sparing its exercise.
Times out of number this Court has stressed that though parties promiscuously 'provoke ' this jurisdiction, the Court parsimoniously invokes the power.
Moreover, the Court may not, save in special situations, grant leave to one who is not eo nomine a party on the record.
Thus, procedural limitations exist and are governed by well worn rules of guidance.
Sri Mridul urged that every inquisitive benefactor or offensive adventurer cannot 'rush in ' and upset a verdict of acquittal by resort to article 136.
This is really a matter for exercise of judicial discretion and the Court can be trusted to bear in mind time honoured practices and the values of article 21.
But no dogmatic proscription of leave under article 136 to a non party applicant can be laid down inflexibly.
For access to justice is not a cloistered virtue.
It is true that the strictest vigilance over abuse of the process of the court, especially at the expensively exalted level of the Supreme Court, should be maintained and ordinarily meddlesome bystanders should not be granted 'visa '.
It is also true that in the criminal jurisdiction this strictness applies a fortiori since an adverse verdict from this Court may result in irretrievable injury to life or liberty.
Having said this, we must emphasise that we are living in times when many societal pollutants create new problems of unredressed grievance when the State becomes the sole repository for initiation of criminal action.
Sometimes, pachydermic indifference of bureaucratic officials, at other times politicisation of higher functionaries may result in refusal to take a case to this Court under article 136 even though the justice of the lis may well justify it.
While "the criminal law should not be used as a weapon in personal vendettas between private individuals", as Lord Shawcross once wrote, in the absence of an indepen 881 dent prosecution authority easily accessible to every citizen, a wider connotation of the expression 'standing ' is necessary for article 136 to further its mission.
There are jurisdictions in which private individuals not the State alone may institute criminal proceedings.
The Law Reform Commission (Australia) in its Discussion Paper No. 4 on "Access to Courts I Standing: Public Interest Suits" wrote: The general rule, at the present time, is that anyone may commence proceedings and prosecute in the magistrate 's court.
The argument for retention of that right arises at either end of the spectrum the great cases and the frequent petty cases.
The great cases are those touching government itself a Watergate or a Poulson.
However independent they may legally be any public official, police or prosecuting authority, must be subject to some government supervision and be dependent on government funds; its officers will inevitably have personal links with government.
They will be part of the "establishment".
There may be cases where a decision not to prosecute a case having political ramifications will be seen, rightly or wrongly, as politically motivated.
Accepting the possibility of occasional abuse the Commission sees merit in retaining some right of a citizen to ventilate such a matter in the courts.
Even the English System, as pointed by the Discussion paper, permits a private citizen to file an indictment.
In our view, the narrow limits set, in vintage English law, into the concept of 'person aggrieved ' and 'standing ' needs liberalisation in our democratic situation.
In Dabholkar 's case this court imparted such a wider meaning.
The American Supreme Court relaxed the restrictive attitude towards 'standing ' in the famous case of Baker vs Carr.
Lord Denning, in the notable case of the Attorney General of the Gambia vs Pierra Sarr N ' Jie, spoke thus: . the words 'person aggrieved ' are of wide import and should not be subjected to a restrictive interpretation.
They do not include, of course, a mere busybody who is interfering in things which do not concern him; Prof. section A. de Smith takes the same view : All developed legal systems have had to face the problem of adjusting conflicts between two aspects of the public 882 interest the desirability of encouraging individual citizens to participate actively in the enforcement of the law, and the undesirability of encouraging the professional litigant and the meddlesome interloper to invoke the jurisdiction of the courts in matters that do not concern him.
Prof. H.W.R. Wade strikes a similar note : In other words, certiorari is not confined by a narrow conception of locus standi.
It contains an element of the actio popularis.
This is because it looks beyond the personal rights of the applicant; it is designed to keep the machinery of justice in proper working order by preventing inferior tribunals and public authorities from abusing their powers.
In Dabholkar 's case, one of us wrote in his separate opinion : The possible apprehension that widening legal standing with a public connotation may unloose a food of litigation which may overwhelm the judges is misplaced because public resort to court to suppress public mischief is a tribute to the justice system.
This view is echoed by the Australian Law Reforms Commission.
The crucial significance of access jurisprudence has been best expressed by Cappelletti: The right of effective access to justice has emerged with the new social rights.
Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection.
Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system.
Effective access to justice can thus be seen as the most basic requirement the most basic 'human right ' of a system which purports to guarantee legal rights.
We are thus satisfied that the bogey of busybodies blackmailing adversaries through frivolous invocation of Art.136 is chimerical.
Access to Justice to every bona fide seeker is a democratic dimension of remedial jurisprudence even as public interest litigation, class action.
883 pro bono proceedings, are.
We cannot dwell in the home of processual obsolescence when our Constitution highlights social justice as a goal.
We hold that there is no merit in the contentions of the Writ petitioner and dismiss the petition.
PATHAK, J: The High Court of Madras in its appellate jurisdiction acquitted the petitioner, Sadhanantham, of charges under section 302 and section 148, I.P.C. Arunachalam, a brother of the deceased, petitioned to this Court under Article 136 of the Constitution for special leave to appeal against the acquittal.
The court granted special leave, and ultimately allowed the appeal, Arunachalam vs P.S.R. Sadhanantham, and setting aside the judgment of the High Court restored the conviction and sentence imposed by the trial court under section 302, I.P.C. The petitioner has filed this writ petition contending that the judgment and order of this Court is a nullity and should be set aside.
The principal contention is that Article 136 did not empower this Court to grant special leave to Arunachalam (the third respondent) and the grant of special leave by the Court and its entertaining the appeal violates Article 21 of the Constitution.
The maintainability of the appeal on the ground that Arunachalam was not entitled to petition under Article 136 of the Constitution for special leave was challenged before the Bench hearing the appeal, but the Bench over ruled the objection holding that it had ample power under Article 136 to entertain the special leave petition.
The learned Judges laid down that the Court had jurisdiction to entertain appeals against judgments of acquittal by the High Court at the instance of private parties.
We have read the judgment of our learned brother V. R. Krishna Iyer, but because of the importance of the question we consider it necessary to set down our own view.
The expense of the appellate jurisdiction of the Supreme Court flows from an entire code of provisions contained in the Constitution.
It includes an appeal on certificate by the High Court under Article 132 that the case involves a substantial question of law as to the interpretation of the Constitution in a civil, criminal or other proceeding disposed of by a judgment, decree or final order of a High Court, and an appeal on certificate under Article 133 that the case involves a substantial question of law of general importance which calls for decision by the Supreme Court.
In a criminal proceeding, disposed of by a judgment or final order or sentence of a High Court, besides cases where the High Court has convicted the accused and sentenced him to death either on reversing in appeal an order of acquittal by 884 the trial court or on the case being withdrawn from the subordinate court to itself for trial, an appeal lies to the Supreme Court where the High Court "certifies that the case is fit one for appeal to the Supreme Court".
Article 135 confers jurisdiction and power on the Supreme Court with respect to any matter to which Article 133 or Article 134 does not apply if such jurisdiction and power were exercisable by the Federal Court immediately before the commencement of the constitution.
Article 136 declares: "136.
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India." Then follow other provisions to which we need not refer.
Plainly, the jurisdiction conferred by Article 136 seeks to confer on this Court the widest conceivable range of judicial power, making it perhaps among the most powerful courts in the world.
The judicial power reaches out to every judgment, decree, determination, sentence or order effecting the rights and obligations of persons in civil matters, of life and liberty in criminal matters as well as matters touching the Revenues of the State.
It is an attempt to ensure that the foundations of the Indian Republic, which have been laid on the bed rock of justice, are not undermined by injustice anywhere in the land; Bharat Bank Ltd. vs Employees of the Bharat Bank Ltd.
As the Court observed in Durga Shankar Mehta vs Thakur Raghuraj Singh and Others.
Article 136 vests in the Supreme Court a plenary jurisdiction in the matter of entertaining and hearing appeals by grant of special leave.
Nonetheless, there is a limitation which, in our opinion, is of immediate relevance.
It is a limitation inbuilt into the jurisdiction of the Court and flows from the nature and character of the case intended to be brought before the Court.
It is a limitation which requires compliance despite the apparent plenitude of power vested in the Court.
When a petition is presented to the Court under Article 136, the Court will have due regard to the nature and character of the cause sought to be brought before it when entertaining and disposing of the petition.
The question is: Does the brother of a deceased person, who has been murdered, possess the right to petition under Article 136 of the 885 Constitution for special leave to appeal against an acquittal of the accused ? It is a question which touches directly on the nature of a crime and of a criminal proceeding.
Several different definitions of a crime have been attempted (and there are some jurists who say that it is impossible of definition), but there is broad agreement on one attribute of its nature, that it is an illegal act which amounts to a wrong against the public welfare.
Mogul Steamship Co. vs Cm Greger Gew & Co. As a concept, crime has been defined as "any conduct which a sufficiently powerful section of any given community feels to be destructive of its own interests, as endangering its safety, stability or comfort," which "it usually regards as especially heinous and seeks to repress with corresponding severity; if possible it secured that the forces which the sovereign power in the State can command shall be utilised to prevent the mischief or to punish anyone who is guilty of it.
" Crimes were defined by Blackstone as "the breach and violation of public rights and duties which affect the whole community." A crime, therefore, is an act deemed by law to be harmful to society in general even though its immediate victim is an individual.
Murder injures primarily the particular victim, but its blatant disregard of human life puts it beyond a matter of mere compensation between the murderer and the victim 's family.
Those who commit such acts are proceeded against by the State in order that, if convicted, they may be punished.
The notion of crime as a threat to the whole community, is the material counterpart of the formal rule that the State alone is master of a criminal prosecution.
In a criminal proceeding the State stands forward as prosecutor on public grounds.
No private person has a direct interest in a criminal proceeding, although exception may be made by the statute in certain cases.
It is common knowledge that a criminal prosecution is not intended for the private satisfaction of a personal vendetta or revenge.
In India also, the criminal law envisages the State as the prosecutor.
Under the Code of Criminal Procedure, the machinery of the 886 State is set in motion on information received by the police or on a complaint filed by a private person before a Magistrate.
If the case proceeds to trial and the accused is acquitted, the right to appeal against the acquittal is closely circumscribed.
Under the Code of Criminal Procedure, 1895 the State was entitled to appeal to the High Court, and the complainant could do so only if granted special leave to appeal by the High Court.
The right of appeal was not given to other interested persons.
Under the Code of Criminal Procedure 1973, the right of appeal vested in the State has now been made subject to leave being granted to the State by the High Court.
The complainant continues to be subject to the pre requisite condition that he must obtain special leave to appeal.
The fetters so imposed on the right to appeal are prompted by the reluctance to expose a person, who has been acquitted by a competent court of a criminal charge, to the anxiety and tension of a further examination of the case, even though it is held by a superior court.
The Law Commission of India gave anxious thought to this matter, and while noting that the Code recognised a few exceptions by way of permitting a person aggrieved to initiate proceedings in certain cases and permitting the complainant to appeal against an acquittal with special leave of the High Court, expressed itself against the general desirability to encourage appeals against acquittal.
It referred to the common law jurisprudence obtaining in England and other countries where a limited right of appeal against acquittal was vested in the State and where the emphasis rested on the need to decide a point of law of general importance in the interests of the general administration and proper development of the criminal law.
But simultaneously the Law Commission also noted that if the right to appeal against acquittal was retained and extended to a complainant the law should logically cover also cases not instituted on complaint.
It observed: "Extreme cases of manifest injustice, where the Government fails to act, and the party aggrieved has a strong feeling that the matter requires further consideration, should not, in our view, be left to the mercy of the Government.
To inspire and maintain confidence in the administration of justice, that limited right of appeal with leave given to a private party should be retained, and should embrace cases initiated on private complaint or otherwise at the instance of an aggrieved person.
" 887 However, when the Criminal Procedure Code, 1973 was enacted the statute, as we have seen, confined the right to appeal, in the case of private parties to a complainant.
This is, as it were, a material indication of the policy of the law.
Having regard to the fundamental nature of a criminal proceeding to which reference has been made, it is now appropriate to examine the considerations which the Court should keep in mind when entertaining a petition for special leave to appeal by a private party against an order of acquittal.
From what has been said, it is plain that 'access to the jurisdiction under Article 136 cannot be permitted to a private party who seeks to employ the judicial process for the satisfaction of private revenge or personal vendetta.
Nor can it be permitted as an instrument of coercion where a civil action would lie.
In every case, the Court is bound to consider what is the interest which brings the petitioner to court and whether the interest of the public community will benefit by the grant of special leave. 'In a jurisprudence which elevates the right to life and liberty to a fundamental priority, it is incumbent upon the court to closely scrutinise the motives and urges of those who seek to employ its process against the life or liberty of another. ' In this enquiry, the Court would perhaps prefer to be satisfied whether or not the State has good reason for not coming forward itself to petition for special leave.
We think that the Court should entertain a special leave petition filed by a private party, other than the complainant, in those cases only where it is convinced that the public interest justifies an appeal against the acquittal and that the State has refrained from petitioning for special leave for reasons which do not bear on the public interest but are prompted by private influence want of bona fide and other extraneous considerations.
We would restrict accordingly the right of a private party, other than the complainant, to petition for special leave against an order of acquittal.
It is perhaps desirable to keep in mind that what follows from the grant of special leave is an appeal, and the jurisdiction must, therefore, be invoked by a petitioner possessing a locus standi recognised in law.
In regard to the question whether the procedure followed by this Court in disposing of a petition for special leave under Article 136 is consistent with the procedure contemplated by Article 21, we have no hesitation in holding that the principle is inbuilt within the terms of Article 136 itself that the Court in exercising its jurisdiction will do so as a court of law following the well known norms of procedure which have been recognised for long as governing and informing the 888 proceedings of all courts.
We have no hesitation in holding that Article 21 is not violated.
The petitioner has failed to establish that there is a case for interfering with the judgment of this Court allowing the appeal.
The writ petition is dismissed, but in the circumstances there is no order as to costs.
N.V.K. Petition dismissed.
| On the ground that the dealers have not charged and collected Central Sales Tax during the period 1st April, 1969 to 9th June, 1969 the Commercial Tax Officer, allowed exemption under section 10 of the Central Sales Tax Act in respect of certain turn over of the appellant which included the price realised on account of inter state sales.
In respect of a second set of transactions which involved the purchase value of cotton sold during the year through inter state sales the Commercial Tax Officer held that the appellant was entitled to exemption under the proviso to section 6 of the A.P. General Sales Tax Act.
In 1972 section 15(b) of the Central Act was amended with retrospective effect from 1st October, 1958 and in 1974 section 6 of the State Act was amended with retrospective effect from the same date.
The Deputy Commissioner of Commercial Taxes revised the assessment order of the Commercial Tax Officer passed under the State Act on the ground that in view of the provisions of section 6 as amended in 1974 the appellant was not entitled to any exemption during the above period.
The Sales Tax Appellate Tribunal dismissed the appellant 's appeal on the view that section 6 of the State Act did not talk of any exemption either before or after its amendment in 1974.
The High Court dismissed the appellant 's appeal holding that the exemption granted by the C.T.O. was patently wrong.
Dismissing the Appeal, ^ HELD: 1.
Section 10 of the Central Act which makes no reference to any tax leviable under a State Act can be of no assistance to the appellant.
Granting that the appellant did not collect any tax under the Central Act during the period in question on the ground that no such tax could have been levied or collected so that it becomes fully entitled to the benefit of the exemption enacted by the section, that would only mean that central sales tax cannot be charged from it in respect of sales covered by the section.
No demand had been made from it for any tax leviable under the Central Act in respect of such sales and the appellant could not derive any benefit from section 10 of the Central Act in the matter of its assessment under the State Act.
[1033G H] 2.
In so far as the assessment under the State Act is concerned all that the C.T.O. could have meant by granting exemption was that the appellant became liable to pay a tax under the opening para of the section; but that since the appellant was also entitled to a refund of such tax the same was taken to have been paid by and refunded to it.
The assessment order made 1029 under the proviso to section 6 of the State Act and section 15 (b) of the Central Act as they stood then was unexceptionable.
[1034E F] 3.
Under section 6 as amended the liability to tax remained unchanged but the entitlement to refund was abolished an was substituted by a right to reimbursement of the tax which arose only if the concerned goods were later on sold in the course of inter state trade under the Central Act and tax under that Act was paid in respect thereof.
Such reimbursement would not be available merely because the goods in question had been sold in the course of inter state trade or commerce when they were not subjected to tax under the Central Act.
No such tax was paid.
The proviso to section 6 as amended in 1974 can be of no assistance to the appellant.
[1035A B] 4.
The language of clause (b) of section 15 of the Central Act is the same as that of the amended proviso to section 6 of the State Act.
It clearly means that the tax under the State Act would be reimbursible only to a dealer who has paid tax under the State Act in respect of the sale of the goods in question in the course of inter state trade or commerce.
[1035C D] 5.
The argument that the Deputy Commissioner had no power to cancel the order of refund is fallacious.
He has done nothing more than to revise an order of the C.T.O. which has been varied only in so far as it was not in conformity with the law deemed to have been prevailing on the date of the assessment by virtue of the retrospective amendment of section 6 of the State Act.
The Deputy Commissioner had not only the power but was duty bound to strike down the order of refund as being illegal.
[1035F G] 6.
Rule 27A can be of little help to the appellant inasmuch as even if it can be construed as laying down something in its favour, the rule cannot override the provisions of the Act.
[1036A] Daita Suryanarayana and Company vs State of Andhra Pradesh 39 S.T.C. 500 approved.
|
Appeal No. 800 of 1967.
Appeal from the judgment and decree dated January 15, 1964 of the Patna High Court in Appeal from Original Decree No. 321 of 1959.
D. Goburdhun and R. Goburdhun, for the appellant.
R. C. Prasad, for respondent No. 1.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal against the judgment of the High Court at Patna, dated January 15, 1964, affirming the decision of the court of first instance.
The case arose in the,following circumstances One Chaudhary Lal Behari Sinha, who was the uncle of the two plaintiffs (respondents in this appeal), made an endowment by a will executed by him on December2, 1908, by which certain properties were endowed in favour of an Idol called 'Ram Janakiji ' also known as Shri Thakurji, installed in the family house of the testator.
The testator said that his parents had installed this idol inside their house and they used to perform the puja and he had also been performing the puja since the time he had attained the age of discretion.
The testator went on to say that he had married two wives but no son had been born to him from either of them, al though he had a daughter and there was also a daughter 's daughter.
When he made the will, he had his two wives living, two sister 's sons, Babu Uma Kant Prasad and Babu Gauri Kant Prasad, and a daughter 's daughter Giriraj Nandini Kuari.
By the will, he ar 6 5 2 ranged for the seba puja, ragbhog, samaiya, utsava of Thakurji, and for the festivals and expenses of the sadabart of the visitors, to be carried on, just as he had been doing.
He nominated his two wives and his sister Ram Sakhi Kuari widow of Babu Gudar Sahai, as 'mutwallie, managers and executives ' so long as they remained alive.
He ordained that they should look after the management of the estate of Shri Thakurji with unanimous opinion, as had been done since long, that after their death, a son of a Srivastava Kayastha and Visnu upasak (worshipper of Lord Visnu) should be appointed 'Mutawalli, manager and executive ' of the estate of Shri Thakurji, and that his wives and sister should appoint him during their life time with the advice of and in consultation with a certain Shri Jawharikh, resident of Baikunthpur, who was his guru.
He divided the house into two parts.
The inner apartment of the house was to remain in the possession of his wives and sister during their life time and the entire outer house together with the house situated at Sitamarhi, was to belong to the estate of Shri Thakurji.
All money in cash and the movable properties belonging to him would remain in the custody of his wives.
To the will was appended a schedule which showed the details of the properties.
That included four villages in sixteen annas share, three villages in eight annas share, and one village in twelve annas share.
The will also made certain bequests in favour of some of his other relations, but with, them we are not concerned.
They are minor as compared with the properties dedicated for the upkeep, of Shri Thakurji.
When the Bihar Hindu Religious Trusts Act, 1950, came to be passed, a notice was sent to the plaintiffs by the Board constituted under that Act, calling upon them to file certain particulars on the basis of the Act, in view, as the notice said, of the properties constituting a public Hindu Religious trust.
The present suit out of which this appeal arises was thereupon filed by the plaintiffs after serving a notice under section 78 of the Act upon the Board, for a de claration that the suit properties were not subject to the Bihar Religious Trusts Act, and were private endowments.
Vast oral evidence was tendered in the case on behalf of the plaintiffs, and certain documents were filed.
On the basis of the evidence in the case, which was accepted by the learned trial judge, it was decided that the endowment was private to which the Act was not applicable.
Before the learned trial judge, reference was made to a decision of this Court, reported in Deoki Nandan vs Murlidhar(1).
To that case, we shall come presently.
The learned trial judge distinguished that case and held that endowment in the present case could not be held to be a public trust, because it was in favour of a family deity.
1[1961] 3 section C. R. 220.
653 An appeal was unsuccessful in the High Court.
The High Court agreed with the learned trial judge that the endowment created a private and not a public trust.
The High Court did not consider the evidence in the case, which, according to the leamed Judges, had been adequately summed up by the trial judge and whose conclusion was accepted.
Before the High Court also, the same case of this court was cited.
But it was also again distinguished on the grounds.
that this idol was a family idol and had not changed its character since the endowment or at the time of the endowment.
In this appeal, the only question that has been raised is whether the trust is a public trust, to which the Bihar Hindu Religious Trusts Act attaches, or is a private trust which does not come within the purview of that Act.
Mr. Goburdhun, who argued the case, pointed out a number of circumstances from which, he said, it could be easily inferred that the endowment was a public one and that the Act applied. 'According to him, the testator was childless and, therefore, there was no need for him to preserve the property for his family, that he had dedicated large properties for the upkeep of the idol, and the largeness of the properties indicated that it must have been for the benefit of the worshippers drawn from the public and not from the family, that on the extinction of the line of shebaits consisting of the two wives and the sister of the testator, the shebaitship was to go to a person of a different community on the advice of a stranger and that there was no mention in any of the deeds that the public were not to be admitted to the worship of Thakurji.
He also relied upon the same case to which we have referred, and also upon a decision of this Court in Swami Saligramacharya vs Raghavacharya and others(1).
As early as (Babu Bhagwan Din and others vs Gir Har Saroop and others) (2), the Privy Council distinguished between public and private endowments of religious institutions, particularly, temples and idols, and Sir George Rankin laid down certain principles to which attention may be drawn, because they were referred to in that Supreme Court ruling on which Mr. Goburdhun strongly relies.
Sir George Rankin said that the dedication to the public was not to be readily inferred when it was known that a temple property was acquired by grant to an individual or family.
He also observed that the fact that the worshippers from the public were admitted to the temple was not a decisive fact, because worshippers would not be turned away as they brought in offerings, and the popularity of the idol among the public was not indicative of the fact that the dedication of the properties was for public.
This ruling was referred to in the case on which Mr. Goburdhunrelies.
(1) CA.
No. 645 of 1964 decided on 4 11 15.
(2) 67 I.A 1.
654 In that case, emphasis was laid on two matters and they are decis ive of the case we have here.
The first no doubt was that the dedicator in that case had no male issue, and that it would be unusual for a person to tie up the property for the use of a diety with.out creating a public trust, but the second was that a ceremony or pratishtha (installation of the idol), which was equivalent to utsarg (dedication), was performed and, therefore, the idol itself became; a _public idol after the ceremonies.
This is not the case here where an idol had existed from before as a family idol.
In the earlier case ,of this Court the installation of the idol and the dedication were ,both done at the same time, and the installation was public.
This, in our opinion, was a very cardinal fact in that case.
This) was emphasized not, only by the trial judge but also by the learned Judges of the High Court.
The facts here are that the idol had been in the family for a number of *ears and only the family was doing the seba puja in the Thakur Dwara, and there is no mention anywhere that the public ever looked after this idol and were allowed a share in the worship as of right.
Further, by the will also the author of the dedication did not make it clear that the public were ,to be admitted as of right thereafter.
The whole of the arrangement shows that the further looking after of the Thakurji was to be the concern of the family, and it was only under the nomination of the family that a particular person of the Vaishavanava belief was to be in charge after the demise of the members of the family who were to become the mutawalls after the death of the testator.
It is obvious that in this family there was no male issue and, there fore, there was nobody to carry on worship and make arrangements for the seba puja of the Thakurji, as had been done in the family. 'Some other kind of arrangement had to be made and this arrangement was made by the will.
No more can be read into it than what is said there.
Now, if it was intended that this should have been a public endowment, it is quite obvious that when the testator died, the testator would have thought of somebody from the public instead of the ladies who could not carry on the puja except through others.
It was after his own death and his wives and sister were not available that a particular person was to be chosen for the seba puja.
There is no arrangement here that public were to look after or manage the Thakurji.
At no stage any intervention of the public is either intended or allowed by the will in question.
Two other documents were brought to our notice, but they may be disposed of summarily.
The first is a mortgage deed, exh.
B, in which there is a recital about the property which was the subject of the endowment.
But that document is silent about the nature of the endowment and is of no significance.
The other document is a judgment of the Assistant Commissioner of Agricultural 655 Income tax, exh.
C, in which exemption was claimed in regard to income as was set apart for charitable and religious trusts in terms of the trust deed.
This is an attempt to show that the family regarded it as a public trust.
What a person does with a view to claiming exemption from income tax or for that matter, agricultural income tax, is not decisive of the nature of the endowment.
The nature of the endowment is to be discovered only from the tenor of the document by which the endowment is created, the dealings of the public and the conduct and habits of the people who visit such a temple or Thakur Dwara.
The claim to exemption was with a view to saving some income of the endowed property.
It might have been motivated from other considerations and not that it was a public endowment.
This brings us to the second case which was cited before us.
But even in that case, a reference was made by the learned Judges to the earlier case and they have extracted a passage from the earlier judgment, in which it was observed that "when property is dedicated for the worship of a family idol, it is a private and not a public endowment, as the persons who are entitled to worship at the shrine of the deity can only be the members of the family, and that is an ascertained group of individuals.
But where the bene ficiaries are not members of a family or a specified individual, then the endowment can only be regarded as public, intended to benefit the general body of worsh ippers".
In the present case, the idol was a family idol and the worshippers had all along.
been the members of the family.
Indeed, the evidence is overwhelming on that score.
The learned trial judge mentions that very important and leading persons gave evidence in that behalf.
In the judgment of the trial judge, a list is given which includes P.Ws.
3,7,12,14,15 and 16 of village Kusmari.
In addition there are P.W. 17, who is an advocate of Sitamarhi, P.W. 6 who is a respectable witness, being a chemist, P.W. 8 who is also a pleader, and P.Ws II and 13 who are mokhtears and acquainted with Somari Kuer.
These respectable persons had occasion to know the family of Chaudhury Lal, Behari Singh, and, therefore, were competent to speak on the fact that Shri Ram Janakiji were the family deities of Chaudhury Lal Behari Singh.
In the case to which we were presently referring, the circumstances connected with the establishment of the temple were such that they could be only consonant with a public endowment.
It was no doubt at private temple of which the sole proprietor was one Madrasi Swamiji, but he, however, by the execution of the deed, decided to open the temple to the public.
He was a man with no family and could not have installed the deity for the members of his family.
It was pointed out in that case that the deed was of such a recent date that evidence of subsequent conduct would not alter nature of the endowment as determined from the deed and that the decision was on a 6 56 question of fact.
Even if we were to treat it as a question of law, because whether the trust is public or private, partakes of both fact and law, and we are satisfied in the present case the evidence is entirely one sided.
There is not one circumstance to show that the endowment was public endowment, and this being the case, we do not see any reasons to differ from the decision already arrived at.
On the whole, we have not been able to discover any reason why we should depart from the unanimous opinion of the High Court and the court below.
Both the courts are agreed that the oral evidence as well as the documents indicate only a private trust and that there is nothing to show that the endowment enjoyed a public character at any time.
The cases before this Court, which were cited earlier are easily distinguishable.
The result is that the appeal fails.
The High Court in its order did not award costs to the plaintiffs.
The reasons given by the High Court for denying costs to the Plaintiffs apply here also.
We, accordingly, order that the costs shall be borne as incurred.
R.K.P.S. Appeal dismissed.
| The appellant was owner of immovable property situate within the limits of the municipal corporation, Ahmedabad City.
Under the power reserved to it by section 127 of the Act the Corporation served on the appellant as also on the other rate payers, bills and demand notices for payment ,of property tax in respect of the assessment year 1962 63.
These were challenged by the appellant and also certain other rate payers in writ petitions before the High Court.
The High Court inter alia held (i) that section 129 of the Act did not suffer from the vice of excessive delegation by reason ,of the fact that no maximum rate of tax was laid down; (ii) that it was permissible under r. 10 to maintain only one assessment book and the levy could not be held invalid on the ground that ward wise assessment books as contemplated by rr. 13, 15 and 19 were not maintained.
In appeal to this Court by certificate, HELD : The High Court rightly held that the charging sections of the Act were not without guidelines.
The assessment and levy of the property taxes have to be in conformity with the Act and the rules.
These rules contain inter alia Taxation Rules which are part of the Act.
Section 454, no doubt, empowers the corporation to amend, alter and add to those rules but such power is made under section 455 subject to sanction of the State Government.
Under section 456 the State Government can at any time require the Corporation to make rules under section 454 in respect of any purpose or matter specified in section 457 which includes item "Municipal Taxes The assessment and recovery of Municipal Taxes.
" Although the Act did not during the relevant period prescribe the maximum rate at which the property taxes could be raised, the ultimate control for raising them was with the councillors responsible to the people, It was difficult therefore to sustain the plea that the power to levy the property tax was so unbridled as to make it possible for the Corporation to levy it in an arbitrary manner or extent.
[951 G 852 B] The proposition that when a provision requiring sanction of the Government to the maximum rate fixed by the Corporation is absent, the rest of the factors which exist in the Act lose their efficacy and cease to be guidelines cannot be accepted.
Further, if the Corporation has the flexibility of power given to it in fixing the rates, the State Legislature can at any moment withdraw that flexibility by fixing the maximum limit up to which the Corporation can tax.
Indeed the State Legislature had done so by section 4 of the Gujarat Act, 8 of 1968.
In view of the decisions of this Court it is not possible to agree with the contention that the Act conferred on the Corporation such arbitrary and uncontrolled power as to render such conferment an excessive delegation.
[954 F G] 943 Corporation of Calcutta vs Liberty Cinema, [1965] 2 S.C.R. 477, Municipal Corporation of the City of Ahmedanwd vs Zaveri Keshavia, , Western India Theatres Ltd. vs Municipal Corporation of the City Poona, [1959] Supp. 2 S.C.R. 71, Pandit Banarsi Das Bhanot vs Madhya Pradesh, ; and Devi Das vs Punjab ; referred to.
Municipal Corporation of Delhi vs Birla Mills, ; followed.
(2) The tax levied on the basis of one assessment book was not invalid, Rule 10 differs from section 157 of the Bombay Municipal Corporation Act, 1888, in that, whereas, it gives an option to the Commissioner either to maintain one assessment book for the entire city or separate assessment books, Sec. 157 gave no such option and provided only for ward assessment book which collectively constituted, as in r. 10(2), "the assessment book '.
The legislature deliberately made a departure from section 157 by leaving it to the discretion of the Commissioner either to maintain one book or several books ward wise.
Such a departure was presumably made because the Act was to apply not to one city only, as did the Bombay Act of 1888, but to an unknown number of cities where Municipal Corporations might in future be set up, each having different conditions from the other and not being certain whether one assessment book or separate ward assessment books would be suitable for each of them.
[955 G; 956 A] The contention that r. 10 should be, construed as mandatory ignores (1) the permissive language of the rule and (2) the deliberate departure made by the legislature from section 1 57 of the Bombay Corporation Act, 1888.
If it intended that assessment books for each ward shoud be kept, there was no necessity for it to depart from the language of section 157 of that Act.
The fact that it made such departure is a sure indication that it did not.
Unless compelled by the context and content of the other rules, there would be no justification not to give to r. 10 the plain meaning of its language, particularly in view of the fact that the Act intended to apply not to one but to an indefinite number of cities, each differing in conditions from the other a factor which, as aforesaid, led the legislature to make a departure from the said section 157.
[958 H 959 B] Certain anomalies would arise from the High Court 's interpretation that rr. 13, 15 and 19 would not apply in the case of one assessment book.
Rule 19 was intended to enable the Corporation to proceed to makedemands so soon as entries were made as provided by cl.
(e) of r. 9 and the Commissioner had given thereafter his authentication that there existed no valid objection to the ratable values entered under the said cl.
Since the object of r. 19 was to make the entry as to the amount of tax conclusive evidence so as to enable the Commissioner to issue the bills, the legislature could not have intended to apply the rule only when ward assessment books were kept and not when, one assessment book was maintained, especially when in r. 10 it had deliberately given discretion to the Commissioner to maintain either one assessment book or several ward assessment books.
Further if r. 19 were to be so construed, rr. 13, and 15 also would have on the same reasoning to be likewise construed.
That would mean that the notice to enable the rate payers to take inspection under r. 13 and the notice under r. 15 fixing the date on or before which complaints against 'ratable value can be made, would have to be given only where ward assessment books are kept and not where one L1100 SupCI/71 944 assessment book is kept.
it goes without saying that the right to inspect provided under r. 13 and the right to file a complaint under r. 15 are vital matters.
That being so it is hardly conceivable that the legislature intended these rules to apply only where the Commissioner kept ward assessment books.
Since r. 10 has to be construed as permissive and not mandatory, and the construction adopted by the High Court in regard to rr.
13, 15 and 19 is bound to create anomalies, the conclusion must be that it was through inadvertence that the old language used in sections 157 to 168 of the Bombay Corporation Act was allowed to be retained without carrying out the change.
of language necessitated as a result of r. 10 giving discretion to the Commissioner either to maintain one book or several books ward wise.
In the result the assessment book in question must be held to be valid and no objection as to the validity of the bills and demand notices can be raised on the ground that only one assessment book and not warding books were kept.
[959 C 960 E]
|
15 of 1959, 14 of 1960 and 21 of 1959.
Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights.
Frank Anthony and J. B. Dadachanji, for the petitioners (In Petns.
Nos. 15 and 21 of 1959).
612 H. J. Umrigar, O. P. Rana and A. G. Ratnaparkhi, for the petitioners (In Petn.
No. 14 of 1960).
L. K. Jha and section P. Varma, for the respondent (In Petn.
No. 15 of 1959).
C. K. Daphtary, Solicitor General of India, M. Adhikari, Advocate General for the State of Madhya Pradesh and I. N. Shroff, for the respondent (In Petn.
No. 14 of 1960).
H. N. Sanyal, Additional Solicitor General of India and C. P. Lal, for the respondent (In Petn.
No. 21 of 1959).
November 23.
The Judgment of the Court was delivered by section K. DAS, J.
These three writ petitions have been heard together, as they raise common questions of law and fact.
They relate, however, to three different enactments made by the Legislatures of three different States Bihar in writ petition No. 15, Uttar Pradesh in writ petition No. 21, and Madhya Pradesh in writ petition No. 14.
The petitioners in the several petitions have challenged the 'validity of a number of provisions of the enactments in question and, in some cases, also of the rules made thereunder.
The impugned provisions are similar in nature, but are not exactly the same.
Therefore, we shall first state in general terms the case of the petitioners and then consider in detail and separately the impugned provisions in each case.
But before we do so, it is necessary to refer to some background history of the legislation under consideration in these cases.
In the year 1958 this Court had to consider the validity of certain provisions of three Acts: (1) The Bihar Preservation and Improvement of Animals Act, (Bihar Act II of 1956); (2) the Uttar Pradesh Prevention of Cow Slaughter Act, 1955 (U. P. Act 1 of 1956); and (3) the Central Provinces and Berar Animal Preservation Act, 1949 (C. P. and Berar Act LII of 1949).
The Bihar Act put a total ban on the slaughter of all 613 categories of animals of the species of bovine cattle.
The U. P. Act put a total ban on the slaughter of cows and her progeny which included bulls, bullocks, heifers and calves.
The C. P. and Berar Act placed a total ban on the slaughter of cows, male or female calves of cows, bulls, bullocks, and heifers, and the slaughter of buffaloes (male or female, adults or calves) was permitted only under a certificate granted by the proper authorities.
These three Acts were enacted in pursuance of the directive principle of State policy contained in article 48 of the Constitution.
The petitioners who challenged the various provisions of the aforesaid Acts in 1958 were engaged in the butcher 's trade and its subsidiary undertakings; they challenged the constitutional validity of the Acts on the ground that they infringed their fundamental rights under articles 14, 19(1)(f) and (g) of the Constitution.
In the decision which this Court gave in Mohd. Hanif Quareshi vs The State, of Bihar (1), it held (i) that a total ban on the slaughter of cows of all ages and calves of cows and of she buffaloes, male or female, was quite reasonable and valid; (ii) that a total ban on the slaughter of she buffaloes or breeding bulls, or working bullocks (cattle as well as buffaloes) so long as they were capable of being used as milch or draught cattle was also reasonable and valid; and (iii) that a total ban on slaughter of she buffaloes, bulls and bullocks (cattle or buffalo) after they ceased to be capable of yielding milk or of breeding or working as draught animals was not in the interests of the general public and was invalid.
In the result this Court directed the respondent States not to enforce their respective Acts in so far as they were declared void by it.
This led to some amending or new legislation, and we are concerned in these three cases with the provisions of these amending or new Acts and the rules made thereunder.
In Bihar (Writ Petition No. 15 of 1959) the impugned Act is called the Bihar Preservation and Improvement of Animals (1) ; 78 614 (Amendment) Act, 1959 which received the assent of the Governor on January 13, 1959.
in Uttar Pradesh (Writ Petition No. 21 of 1959) the impugned Act is called the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Act, 1958 and in Madhya Pradesh (Writ Petition No ' 14 of 1960) a new Act was passed called the Madhya Pradesh Agricultural Cattle Preservation Act, 1959 (Act 18 of 1959) which received the assent of the President on July 24, 1959 and came into force on January 15, 1960.
The rules made there under are called the Madhya Pradesh Agricultural Cattle Preservation Rules, 1959.
The general case of the petitioners, who are several in number in each of the three cases, is that they are citizens of India and carry on their profession and trade of butchers; they allege that the various provisions of the impugned legislation infringe their fundamental rights in that they, for all practical purposes, have put a total ban on the slaughter of she buffaloes, bulls or bullocks, even after such animals have ceased to be useful, and have virtually put an end to their profession and trade.
It is pointed out that the age up to which the animals referred to above cannot be slaughtered (20 or 25 years) has been put so high that the practical effect is that no animals can be slaughtered, and the amending or new legislation has put in other restrictions so arbitrary and unreasonable in nature that in effect they amount to a prohibition or destruction of the petitioner 's right to carry on their trade and profession.
The following allegations quoted from one of the petitions (Writ Petition No. 15 of 1959) give a general idea of the nature of the case which the petitioners have put forward: "That there is good professional authority for the view that even in countries where animal husbandry is organised on a highly progressive and scientific basis, cattle seldom live beyond 15 or 16 years.
That there is also good authority to the effect that even pedigree breeding bulls are usually discarded at the age of 12 or 14 years.
, That in India bulls and bullocks and she buffaloes rarely live even up to the age of 15 years; draught bullocks begin to age after eight years, 615 That the raising of the age limit from 15 to 20 years is arbitrary, unreasonable and against the general public interests and is repugnant to and infringes the, fundamental rights of the, petitioners under Article 19 (1)(f) and (g) of the Constitution.
That section 3 of the amending Act is a mala fide, colourable exercise of power, repugnant to the fundamental rights of the petitioners under Article 19 (1)(f) and (g).
That this arbitrary raising of the age limit will be against the public interests For the following among ' other reasons: (i) That there will, in fact, be no bulls or bullocks or she buffaloes available for slaughter as few, if any, of such animals survive in India up to the age of 15 years; (ii) that the profession, trade and occupation of millions of Muslims will be permanently and irreparably injured; (iii) that millions of members of the minority communities such as Christians, Scheduled Castes, Scheduled Tribes and Muslims, for whom cattle beef is a staple item of their diet, will be deprived of this diet; (iv) that the menace of the rapidly increasing uneconomic cattle population in such matters as the destruction of crops, being a public nuisance, will be accentuated by this arbitrary age limit, and in effect will ensure that bulls and bullocks cannot be slaughtered; (v) that the menace of the rapidly increasing population of uneconomic cattle to the fodder and other animal food resources of the country will be accentuated.
(vi) that the competition between the rapidly increasing cattle population, a large percentage I of which is uneconomic and useless, add the human population for available land will be accentuated; (vii) that this piece of legislation will ensure the steady increase of useless bulls and bullocks and must react disastrously against any attempt to improve milk production, bullock power or animal husbandry generally." 616 Similar allegations have been made in the other two petitions also.
The correctness of these allegations has been con.
tested on behalf of the respondent States, which through some of their officers have filed affidavits in reply.
We shall presently examine at greater length the averments made in these affidavits, but we may indicate here in broad outline what their general effect is.
In Bihar the age below which the slaughter of she buffaloes, bulls and bullocks is prohibited is 25 years.
The respondent State has taken the plea that the usefulness or longevity of live stock for breeding and other purposes depends to a very great extent on (a) better animal husbandry facilities like feeding and management and (b) control of animal diseases, and as these facilities are now available in a greater measure, the legislature came to the conclusion that a bull or bullock or a she buffalo below 25 years of age continues to remain useful; if a bull, bullock or shebuffalo is permanently incapacitated below that age the impugned provision permits its slaughter and therefore the legislation which is challenged conforms to the decision of this Court and does not violate any fundamental right.
In Uttar Pradesh the age is 20 years as respects bulls or bullocks, with a further restriction to be referred to later.
The reply of the res pondent State is that bulls or bullocks do not become unfit at the age of 12 or 14 years as alleged by the petitioners; on the contrary, they continue to be useful and at no time they become entirely useless.
It is then stated in the affidavit: "As a matter of fact, the age up to which the animals can live and are serviceable depends upon the care and attention they receive and the quality of the grass on which they are grazed. . . . . .According to a high authority the average age of an ox under favourable conditions would be between 15 to 20 years.
Even under conditions prevailing in Uttar Pradesh, bulls can live upto 20 years or more as would appear from an analysis of a survey report of the animal husbandry department.
" 617 On these averments the respondent State contends that the legislation is valid.
In Madhya Pradesh also the age is 20 years.
The Under Secretary to the( State Government in the Agricultural Department ' has made the reply affidavit in which it has been stated inter alia that conditions in Madhya Pradesh are different from conditions in other States.
The affidavit then states: "The State of Madhya Pradesh has a total area of 107,589,000 acres, out of which total cropped area is 43,572,000 acres.
Forest area is 33,443,000 acres, area not available for cultivation is 11,555,000 acres, uncultivated land is 18,405,000 acres and fallow land is 5,834,000 acres.
It will thus be seen that this State has a large forest area and plenty of grass land for pasturage.
As the forests supply the greater part of the fuel needs of the human population, the dung of animals is largely available as manure.
The legislature considered that bulls, bullocks and buffaloes are useful in this State till they are well past twenty years of age and that they should not be slaughtered till they are past that age and are also unfit for work or breeding.
The problem of animals dying of slow starvation or of worthless animals depriving useful animals of fodder needs no consideration in this State.
The agricultural community in the State benefits by the existence of animals as long as they are useful.
" There are also further averments as to the shortage of breeding bulls, working bullocks and she buffaloes in Madhya Pradesh.
On these averments the contention of the respondent State is that the cattle in that State are useful up to the age of 20 years.
We have indicated above in general terms the case of the petitioners and the reply which the respondent States have given.
We proceed now to a detailed consideration of the impugned legislation in each case.
(1) We take up first the Bihar Preservation and Improvement of Animals (Amendment) Act, 1959 and the rules made under the main Act of 1955.
Section 3 of the Act as amended reads: "section 3.
| In Mohd. Hanif Quareshi vs The State of Bihar the Supreme Court held that a total ban on the slaughter of bulls, bullocks and she buffaloes after they had ceased to be useful was not in the interests of the general public and was invalid.
Thereafter, the Bihar Legislature passed the Bihar Preservation and Improvement of Animals (Amendment) Act, 1958, the Uttar Pradesh Legislature passed the U. P. Prevention of Cow Slaughter (Amendment) Act, 1958 and the Madhya Pradesh Legislature passed a new Act, the M. P. Agricultural Cattle Preservation Act, 1959.
Section 3 of the Bihar Act prohibited the slaughter of a bull, bullock or she buffalo except when it was over 25 years of age and had become useless.
Rule 3 of the Bihar Preservation and Improvement of Animals Rules, 1960 prescribed that the certificate for slaughtering an animal could be granted only with the concurrence of the Veterinary Officer and the Chairman or Chief Officer of a District Board, Municipality etc., and if the two differed, then according to the decision of the Sub Divisional Animal Husbandary Officer.
Section 3 of the U. P. Act permitted the slaughter of a bull or bullock only if it was over 20 years of age and was permanently unfit.
It further provided that the animal could not be slaughtered within 20 days of the grant of 'a certificate that it was fit to be slaughtered and gave a right of appeal to any person aggrieved by the order granting the certificate.
Section 4(1)(b) of the Madhya Pradesh Act provided that no bull, bullock or buffallo could be slaughtered except upon a certificate issued by the competent authority and section 4(2)(a) provided that no certificate could be issued unless the animal was over 20 years of age and was unfit for work or breeding.
Section 4(3) gave a right of appeal to any person aggrieved by the order of the competent authority.
Section 5 provided that no animal 611 shall be slaughtered within 10 days of the date of the issue of the certificate and where an appeal was preferred against the grant of the certificate, till the time such appeal was disposed of.
The petitioners, who carried on the profession and trade of butchers, contended that the various provisions of the three Acts set out above infringed their fundamental rights by practically putting a total ban on the slaughter of bulls, bullocks and she buffaloes even after the animal had ceased to be useful and thus virtually put an end to their profession and trade.
Held, (i) that the ban on the slaughter of bulls, bullocks and she buffaloes below the age of 20 or 25 years was not a reasonable restriction in the interests of the general public and was void.
A bull, bullock or buffalo did not remain useful after 15 years, and whatever little use it may have then was greatly offset by the economic disadvantages of feeding and maintaining unserviceable cattle.
The additional condition that the animal must, apart from being above 20 or 25 years of age, also be unfit was a further unreasonable restriction.
Section 3 of the Bihar Act, section 3 of the U. P. Act and section 4(2)(a) of the M. P. Act were invalid.
(ii) Rule 3 of the Bihar Rules was bad as it imposed dis proportionate restrictions on the rights of the petitioners.
The procedure involved such expenditure of money and time as made the obtaining of the certificate not worthwhile.
(iii) The provisions in the Uttar Pradesh and Madhya Pradesh Acts providing that the animal shall not be slaughtered within 20 and10 days respectively of the issue of the certificate and that any person aggrieved by the order of the competent authority, may appeal against it, were likely to hold up the slaughter of the animal for a long time and practically put a total ban on slaughter of bulls, bullocks and buffaloes even after they had ceased to be useful.
These provisions imposed unreasonable restrictions on the fundamental rights of the petitioners and were void.
Mohd. Hanif Quareshi vs The State of Bihar, [1959] S.C.R. 629, State of Madras vs V. G. Row, ; and The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga, , referred to.
|
Appeal No. 1321 of 1966.
Appeal by special leave ,from the judgment and order dated November 15, 1965 of the Punjab High Court in Civil Writ No. 878 of 1964.
Niren De, Attorney General and Naunit Lal, for the appellants.
Hardev Singh and R.N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by special leave from a judgment of the Punjab High Court dismissing a petition under articles 226 and 227 of the ConStitution which had been filed by the appellant Municipal Committee challenging the taking over by the State of all the schools which were being run by it together with all the buildings in which the schools were functioning and other movable and immovable properties connected with these institutions 378 which belonged to the Committee.
The order of the State for payment of an annual contribution which upto the date of the filing of the writ petition i.e. May 10, 1964 had reached the figure of 53 lakhs was also challenged.
The appellant Committee is a first class.
Municipal Committee and has been in existence from a long time.
It has been managing its local affairs through the elected representatives from the city who are called Municipal Commissioners.
It is constituted and functions under the provisions of the Punjab Municipal Act 1911.
A number of primary schools were being run by the Committee within the municipal limits of the town of Amritsar for which it was getting grant in aid from the Punjab Government.
It was, however, running schools upto the middle and high standards for girls and boys for which all the expenses were incurred by itself without any grant from the Government.
The primary liability, however, for incurring the extra expenditure even in connection with the aided schools was of the Committee.
The Punjab Government took an administrative decision.
to provincialise all the schools run by all local bodies in the State with effect from October 1, 1957.
This information was conveyed by means of a letter dated July 19, 1957 by the Secretary to the Government, Education Department, through the Deputy Commissioners in Jullundur and Ambala Divisions.
At a meeting of the appellant Committee held on July 31, 1957 a resolution was passed that a strong representation be made to the Government against the decision to provincialise the schools run by the local bodies.
On September 26, 1957 the Assistant Director of Schools wrote to the District Inspector that "as all the local body schools are being provincialised with effect from October 1, 1957 the tuition fees etc.
to be realized in such schools after that date should be credited to the Government in the treasury under the head . . " Without enacting any legislation the State took over all the schools run by the local bodies on October 1, 1957.
A memorandum from the Director of Public Instructions, Punjab to the District" Inspector of Schools sent on October 5, 1957 conveyed the following direction: "All the erstwhile Local Body Schools which have been provincialised with effect from the 1st October, 1957 will henceforth be known.
as Government High/ Middle/Primary Schools for Boys or Girls as the case may be".
The Executive Officer of the appellant Committee (appointed under the Punjab Municipal Executive Officers Act 1931) wrote to the Deputy Commissioner, Amritsar on November 21, 1957 that no formal orders had been received from the Government requiring the Committee to give up possession of the schools and it appeared 379 that no procedure had so far been devised in that behalf or for the settlement of terms and conditions on which the buildings, furniture, fittings and other materials were to be transferred.
He pressed for proper steps being taken.
The Secretary to the Government, Punjab, Health and Local Government Department sent a memorandum dated September 10, 1958 to all the Deputy Commissioners saying that the work of proper maintenance of the buildings of the provincialised schools of the local bodies would be entrusted to the Public Works Department, Buildings and Roads.
A letter was addressed by the same authority dated September 30,/October 4, 1958 to the Deputy Commissioners requesting them to supply immediate information showing the contributions actually deposited into the treasuries by the local bodies in respect of the provincialisation of the schools.
This was followed by the memorandum dated December 12, 1958 to the effect that all local bodies "be advised to execute the transfer notes in respect of the school buildings etc.
by their respective Engineering Establishments in favour of the Superintending Engineers concerned".
By means of another memorandum dated December 26, 1958 orders of the Government were conveyed that immediate steps should be taken for getting the contribution from local bodies and also for obtaining transfer of buildings and equipment.
Deputy Commissioners were? requested to get the requisite resolutions passed by the local bodies in the prescribed form.
The appellant Committee at its meeting held on January 10, 1959 decided not to pay any contribution for the time being.
It was also resolved that the Committee was not in favour of transferring the proprietary rights in movable and immovable property which was in possession of the schools.
It appears that up till June 17, 1959 the State continued the process of provincialisation of the schools mentioned before without any authority of law.
There was no statutory provision which entitled the State to take over the schools of the local bodies including the buildings in which the schools were being run as.
also furniture etc.
which belonged to the local bodies.
Moreover the extraordinary step of demanding annual contribution was also taken without any sanction or authority of law.
The appellant Committee which is one of the biggest Committees in the State seems to have resisted the attempt on the part of the Government to take over the schools and acquire or requisition its properties in the manner in which it was done.
Legislation was for the first time enacted in the shape of the Punjab Local Authorities (Aided Schools) Act 1959, (Act No. XXII of 1959), hereinafter called the Act.
It received the assent of the President on June 9, 1959.
According to the preamble the Act was enacted to provide for the management and control of local authorities ' schools receiving grants in aid from the.
State of Punjab.
By a deeming provision 380 the Act was to come into force with effect from October 1, 1957.
Section 2 gave the definition of "aided schools", "local authority".
and "school".
"School" has been defined to include land, buildings, play grounds and hostels of the school and the movable property such as furniture, books, apparatus, maps and equipment pertaining to the school.
The following provisions of the Act as amended may be reproduced: section 3 "Power of local authorities to transfer management and control of aided schools to State Government.
(1) A local authority may pass a resolution to transfer the management and control of aided school to the State Government and communicate the same to the State Government.
(2) On receiving such a resolution, the State Government may direct that the aided schools shall be taken over under its management and control and thereafter all rights and interests including the right of maintenance, management and control shall be transferred to and vest in the State Government and the rights and interests of the local authority in respect of such schools shall cease.
" section 4 "Power to withdraw grant in aid.
The State Government may withdraw the grant in aid from any local authority in respect of aided schools if the resolution mentioned in section 3, has not been passed and communicated to the State Government within a period of three months from the date on which this Act is published in the Official Gazette.
" section 5 "Power to take over aided schools where local authority neglects to perform duty. (1) Whenever the State Government is satisfied that a local authority has neglected to perform its duties in respect of aided schools or that it is necessary in public interest to take over their management for a period not exceeding ten years, it may after giving the local authority a reasonable opportunity for showing cause against the proposed action, make an order to take over the management: Provided that in cases of emergency, where the State Government is satisfied that such a course is necessary in the interests of the students, it may, without giving such notice, take over the management of such schools after publication _of a notification to that effect in the.
Official Gazette." : (2) & (3) . . . . . 381 section 6 "Amendment of Punjab Acts No. III of 1911 and No. XX of 1883.
Where a local authority has passed a resolution under section 3 or the State Government has taken over management of aided schools of a local authority under section 5, the Punjab Municipal Act, 1911, and the Punjab District Boards Act, 1883, shall be deemed to have been amended in the manner specified in the Schedule appended to this Act with effect from the 1st October, 1957.
" Section 52(1) of the Punjab Municipal Act relates to the setting apart of the municipal funds and apply the same for different purposes as mentioned in clauses (a) to (f).
By means of the Schedule to the Act after clause (f) of sub section
(1), cl.
(g) was added which is in the following terms: "(g) seventhly, such sum to be paid annually by the committee to the State Government by way of contribution as is equivalent to (i) the total provision made in the budget for the year 1957 58 under the main head 'Education ' excluding educational grants and the provision made for 'original works ' relating to schools; and (ii) a sum representing one per centum of the total income from its own resources for the year 1957 58, in lieu of the deductions made for 'original works ' made under clause (i): Provided that in respect of the financial year 1957 58 the committee shall make a payment to the State Government of the sums which have remained unexpended on 31st March, 1958, out of the provisions under the head 'Education ' in the budget of 1957 58".
Section 59 of the Punjab Municipal Act provides that the Committee may with the sanction of the State Government transfer to the Government any property vesting in the Committee under section 56 or section 57 but not so as to affect any trusts or public rights subject to which the property is held.
A proviso was added to the section by the Schedule which was as follows : "Provided that where a committee has passed a resolution under section 3 of the Punjab Local Authorities (Aided Schools) Act, 1959, or the State Government has taken over the management of aided schools of a committee under section 5 of that Act, all rights and interests in the establishment, maintenance and management of the aforesaid schools immediately before the Ist October 1957, including all interests in the lands, 382 buildings, play grounds, hostels of the said schools as also in the movable properties like furniture, books, apparatus, maps and equipment pertaining thereto shall be deemed to have been transferred to the State Government on that date, and all unspent balances in respect of grants and contributions received for the maintenance and promotion of these schools shall be deemed to have been surrendered to the State Government." After the promulgation of the above legislation the appellant Committee passed a resolution on February 24, 1960 reiterating the decision taken in the Local Bodies Conference held at Jullundur and its own decision to request the Punjab Government to restore the schools run by the local bodies to them.
At another meeting held on June 9, 1960 the appellant Committee decided not to pass the resolution under section 3 of the Act transferring its schools and property to the State Government.
The Punjab Government, however, issued a notification dated September 26, 1960 saying that the Governor was satisfied that it was necessary in the interests of the students to take over for a period of ten years the management of the schools specified in the schedule and administered by the Municipal Committee, Amritsar, and therefore in exercise of the powers conferred by the proviso to section 5 of the Act the Government took over for a period of ten years the management of the said schools.
The schedule contained the list of 42 such schools.
The question of the payment of the contribution which was being demanded by the Government came up for consideration at a meeting of the appellant Committee on January 3, 1962.
It was decided that the payment be made on the basis of a formal laid down by the State Government in that behalf with effect from October 1, 1957 but that the proprietary rights of the Committee in the school buildings be retained and the use of these buildings free of charge be allowed to the Government for the purpose of running the schools.
At a subsequent meeting held on March 28, 1963, the appellant Committee, however, revised its previous decision in view of a resolution passed in the meeting of the Standing Committee of Urban Local Bodies Conference held on June 21, 1962.
It was decided that the State Government was not entitled to charge contributions from the Municipal Committee.
On April 10, 1964 the Deputy Commissioner, Amritsar, made an order in exercise of the powers vested in him under section 234(1) of the Punjab Municipal Act requiring the appellant Committee to pay an amount of Rs. 53,66,146/ on account of contribution for the maintenance of the provincialised schools for the period 1957 58 to 1963 64 failing which realization was to be made under sub section
(2) of that section.
Thereupon the petition under articles 226 and 227 of the Constitution was filed by the appellant Committee in which apart from other matters the validity and constitutionality of the Act were challenged.
In the 383 return filed on behalf of the State reliance was placed on the pro visions of the Act, the resolution passed by the Committee itself on.
January 3, 1962 agreeing to pay the contribution and allow the use of school buildings to the Government free of charge and the notification which had been issued under section 5 of the Act on September 26, 1960 whereby the management of the schools of the: Committee had been taken over for a period of 10 years.
The High Court was of the view that since the Government had taken over the control and management of the aided schools it was considered necessary that the property in possession of these institutions should also be taken over and managed for a limited period.
of 10 years.
Since no compensation was being paid for what may be called compulsory acquisition the legislation could be struck down as being in contravention of article 31(2) of the Constitution.
In the present case, however, the management of the property in possession of the schools was being taken over for a period of 10 years in the public interest by virtue of the provisions of article 31A(1)(b), and the contravention of article 31(2) was of no consequence.
The argument raised on behalf of the State that the resolution of the appellant Committee dated January 3, 1962 consenting to the payment of the contribution with effect from October 1, 1957 had been passed m terms of section 3 of the Act was refuted.
As regards the notification issued on September 26, 1960 under the Act the High Court was of the opinion that although it did not contain any provision for retrospective operation it should be considered that it had retroactive effect since the Act itself had been enforced from October 1, 1957.
It was conceded before the High ' Court that the notification did not apply to.
those schools which did not receive any aid from the Government.
The learned Attorney General for the appellant Committee, raised the following main contentions: (1) The material provisions of the Act were ultra vires article 31 (2) of the Constitution (2) The taking over of movable and immovable property of the Committee could not possibly fail within article 31A(1)(b) and such action was in direct contravention of article 31(2).
(3) The notification dated September 26, 1960 could not have been issued under the proviso to section 5 because there was no question of any emergency nor such an emergency has been pleaded or proved by the State.
(4) The said notification could not and did not validate the action taken prior to the date when it was issued nor section 6 of the Act could be attracted which effected amendments of the provisions of the Punjab Municipal Act as per the Schedule.
(5) The annual contributions which were being demanded from the appellant Committee were wholly illegal and could not be levied on account of legislative incompetence.
Now the scheme of the Act is that it is initially left to the local.
authority to pass a resolution to transfer the management and con 384 trol of aided schools to the State Government.
In order to employ compulsive persuasion the State Government can withdraw the grant in aid from any local authority in respect of aided schools if such authority does not pass a resolution in terms of section 3 within a period of three months from the date of enactment of the Act (vide section 4).
Section 5 gives the power to the State Government to take over aided schools where the local authority neglects to perform the duty but that can be done only after the local authority has been given a reasonable opportunity for showing cause against the proposed action and also if it is considered necessary in public interest to take over the management for a period not exceeding 10 years.
The proviso, however, arms the State Government with powers in case of emergency and in the interests of students to take over the management straightaway after publication of a notification to that effect.
The amendments which are effected in sections 52 and 59 of the Punjab.
Municipal Act enable the State Government to get an annual contribution from the local bodies and further to vest in the State not only the management of the school taken over but also all interests in the lands, buildings etc.
of the school along with the movable properties pertaining thereto which shall be deemed to have been transferred to the State.
There is no provision whatsoever for an automatic retransfer of these properties after a lapse of a period of 10 years for which the taking over of the schools can be effective.
This means that once action is taken under section 5 which can be done pursuant to a resolution passed under section 3 or after giving a notice to the local authority or without giving such notice in case of emergency all the properties movable and immovable belonging to the local body pertaining to the schools.
taken over become the property of the State.
This is nothing short of compulsory acquisition within the meaning of article 31(2) of the Constitution.
Under that Article no ' property can be so acquired or requisitioned unless it is under an authority of law which either fixes the amount of compensation or specifies the principles on which and the manner in which the compensation is to be determined and given.
There is No. provision in the Act or in the amendment of section 59 of the Punjab Municipal Act made by the Act for payment of any compensation.
On the assumption that taking over of the property for a period of 10 years would be an act of requisitioning, the requirements of article 31(2) must be satisfied to sustain the validity of the law.
The High Court entertained no doubt that under that Article property could not b.e acquired or requisitioned without complying with its provisions but it fell into an error in applying article 31(A)(1)(b) to the provisions under consideration.
Under the above Article.
it is only the management of any property which can be taken over for a limited period either in the public interest or in order to secure its proper management.
Ac 385 cording to the High Court the Committee was indisputably the: owner of the property which was being taken over by the State: but P.C. Pandit J, who delivered the judgment of the division bench proceeded to say : "In the present case, the management of the property in possession of the schools was being taken over for ten years in public interest and, as such, by virtue of the provisions of Article 31 A ( 1 )(b ), the contravention of article 31(2) was of No. consequence.
Learned Counsel for the petitioner submits that article 31A(1)(b) does not apply to the facts of the instant case, because here the management and control of an institution namely, the school, was being taken over by the Government, whereas this Article applied where the management of any property was being taken over by the Government for a limited period in the public interest.
This argument is without any merit, because the property may belong to anybody, whether it be an individual, or a Committee or an industrial or commercial undertaking or any kind of other institution.
In all these cases, where the management of the property is taken over for a limited period in public interest, this Article would be attracted and the legislation would not be hit by the provisions of Article 31 of the Constitution".
Clause (b) in article 31A(1) came to be inserted for the first time by the Constitution (Fourth Amendment) Act 1955.
It was intended apparently to counteract the effect of the decisions in the two Sholapur cases, Charanjit Lal Chowdhuri vs The Union of India & Ors.(1) and Dwarkadas Shrinivas of Bombay vs The Sholapur Spinning & Weaving Co. Ltd., & Ors.(2).
The purpose.
therefore, of inserting this provision was to remove any legislation from the pate of attack on the ground of contravention not only of article 3 but also of articles 14 and 19.
Although management and control of the aided schools under the impugned legislation could be taken over for a limited period in the public interest it is not possible to understand how even the proprietary interests in the movable and immovable property pertaining to the schools, which have been found to belong to the Committee, could have been acquired under clause (b) of article 31 A(1).
With all deference to the High Court we have not been able to.
properly appreciate the decision on this point given in the paragraph extracted above.
The High Court did not consider the true import and effect of the amendment made in section 59 of the Punjab Municipal Act by virtue of which all rights and interests in the lands, buildings, playgrounds, hostels of the schools as also in the movable property like furniture, books, apparatus, maps and equipment pertaining thereto (1) ; (2) [1954] S.C.R.476.
386 shall be deemed to have been transferred to the State Government with effect from October 1, 1957.
We are, therefore, unable to uphold the view which leads to the result that property can be acquired while taking over management and control under article 3l A (1)(b) in complete negation and contravention of article 31(2) of the Constitution.
The next question is whether there was due compliance with the provisions of the proviso to section 5 of the Act.
In the notification which was issued on September 26, 1960 there is no indication that the management of the schools was being taken over because of certain emergency having arisen.
If any emergency existed it was the creation of the government itself which had proceeded to take over management and control of the aided schools along with the properties pertaining to them without any authority of law prior to the enactment of the Act.
That was the reason why the Act had to be given retrospective operation.
According to the High Court the moment the State Government was satisfied that it was in the interest of the students to take over the management of the schools it became a case of emergency.
It also relied on the principle that it was not necessary to mention the actual emergency which had arisen in the notification itself or to make a recital that an emergency had arisen.
The State could not show by placing material before the court that it was a case of emergency justifying the action under the proviso to section 5 because no foundation in this behalf had been laid in the writ petition.
The third point pressed by the learned Attorney General, therefore, cannot be acceded to.
The fourth point of the.
learned Attorney General may now be considered.
There was some argument before the High Court and the same has been repeated before us on behalf of the State that the question of validity of the notification and the action taken thereunder did not arise because.
the Committee itself had passed a resolution on January 3, 1962 which should be regarded as having been passed under the provisions ' of section 3 transferring the management and control of the schools to the Government and agreeing to pay the contribution with effect from October 1, 1957.
The High Court has rightly pointed out that a reading of the resolution would show that the Committee agreed to the payment of contribution with effect from October 1, 1957 in accordance with the formula laid down by the State Government.
It was, however, made clear that the proprietary rights of the Committee in the movable and immovable property pertaining to the schools would be retained by it.
The Committee had subsequently passed several resolutions which had the effect of almost rescinding the previous resolution.
The submission on behalf of the State that the resolution dated January 3, 1962 passed by the Committee fell within the first part of section 3 of the Act is wholly devoid of merit and has rightly not been accepted.
387 As regards the notification having retrospective operation we are unable to agree with the High Court that any such effect could be given to it.
There is nothing to indicate in the notification that it was intended to operate retroactively.
The mere fact that the Act in terms was retrospective would not make the notification issued under the proviso to section 5 retrospective in the absence of express words or appropriate language from which retrospectivity would be implied.
All that the notification says is that the Governor of Punjab is taking over for a period of 10 years.
the management of the schools of the Committee.
in exercise of the powers conferred by the proviso to section 5 of the Act.
This clearly means that the management is taken over from the date of the notification and not from any prior date.
It would follow that whatever was done before the date of the notification regarding the assumption of management and vesting of the Committee 's properties was wholly void and illegal.
Under s.6 of the Act it is only after the local authority has passed a resolution under s.3 or the State Government has taken over management of the aided schools under s.5 that sections 52 and 59 of the Punjab Municipal Act would be deemed to have been amended in the manner specified in the schedule with effect from October 1, 1957 or from the date aided schools are taken over as the case may be.
If the notification dated September 26, 1960 could not be given retrospective operation the amendments in the aforesaid provisions of the Punjab Municipal Act would be effective only after the date of the notification and not for the prior period.
Thus even on the assumption that the provisions of the Act are valid the State could not ask for any contribution from the committee for the period prior to the date of the notification.
But, the addition of cl.(g) after cl.(f) in sub s.(1) of s.52 of the Punjab Municipal Act is void and wholly ineffective for the reasons which will be presently noticed.
Chapter IV of the Punjab Municipal Act relates to municipal fund and property.
Section 51 deals with the constitution of the municipal fund.
Section 52 provides for the application of the fund.
Before the amendment made by the Act sub s.(1) had six clauses containing the provisions for the application of the fund.
It is noteworthy that although the State Government has been empowered to require the Committee to make contributions but in each case that is confined to an eventuality or a situation where certain cost has been incurred by the Government which had to be defrayed by the Committee, e.g., clauses (b), (d) and (f).
According to clause (e), however, the Committee may be required by the State Government to contribute towards the maintenance of pauper lunatics or lepers sent from any place in the State to mental hospitals or public asylums 388 whether in or outside the State.
Sub section (2) says that subject to the charges specified in sub section
(1 ) the municipal fund shall be applicable to the payment of the matters set out in clause (a) to (1 ).
Clause (c) is in these terms: "the constitution; establishment and maintenance of schools, hospitals and dispensaries, and other institutions for the promotion of education or for the benefit of the public health . . . . " In the context of s.52 it is difficult to envisage that the municipal fund of a particular Committee could be diverted to such institutions which had no connection with the Committee.
We are, however, not called upon to pronounce upon the true scope, ambit and validity of all the provisions in section 52.
Clause (g) which has now been inserted by means of section 6 of the Act has to be tested by the guarantees in Part Ill of the Constitution.
By asking the Committee to make contributions from its funds to the cost of the schools which have been taken over by the State part of its funds are being compulsorily acquired by the State.
This is something which could not be done except in accordance with the provisions contained in article 31(2) of the Constitution.
In Writ Petition No. 295 of 1968, Municipal Committee, Amritsar vs State of Punjab(1) in which the provisions of the Punjab Cattle Fairs (Regulation) Act 1968 came up for examination, it was laid down by this Court that the State was incompetent to declare land belonging to the Municipal Committee as falling within the fair area and to take possession of that land in exercise of the power conferred by the Act without providing for payment of compensation guaranteed by article 31(2).
Clause (g), therefore, which has been inserted in section 52 of the Punjab Municipal Act is void and illegal as it contravenes article 31 (2) of the Constitution.
It may be mentioned that the learned Attorney General has also pointed out that the State legislature did not have the competence, under any of the entries in List II of the Seventh Schedule, to enact legislation of the nature embodied in clause (g) which was inserted in section 52 relating to compulsory contribution by the Committee to the State Government.
Counsel for the State has sought to rely on entries 5 and 1 l in List II which relate to local government and education.
It is unnecessary to decide this matter since it has been held by us that the impugned provisions with regard to contribution contravene Art, 31 (2) of the Constitution.
We may now determine the provisions of the Act which are unconstitutional and invalid.
There is nothing in sections 3(1), 4 and 5 of the Act per se which would bring them into conflict with the constitutional provisions, particularly, in view of article 31 A ( 1 )(b) (1) ; 389 under which the management of the schools could be taken over by the State for a limited period in public interest.
But the difficulty arises about sections 3(2) and 6 which have to be read together.
When the State Government makes a direction under section 3(2) that the aided schools shall be taken over.
all rights and interests of the Committee including the right of maintenance, management and control shall be transferred to and vest in the State Government.
This essentially has reference to proprietary and ownership rights apart from the rights pertaining to management and control.
Section 6 comes into operation as soon as a local authority has passed a resolution under section 3 or the State Government has taken over management under section 5.
Then the provisions relating to acquisition of property of the Committee as also of its funds by way of contribution come immediately into operation by virtue of the amendments effected in sections 52(1) and 59 of the Punjab Municipal Act.
These provisions are clearly unconstitutional as they contravene article 31 ( 2 ) of the Constitution.
In the result the appeal is allowed with costs and the judgment of the High Court is set aside.
It is declared that section 3(2) of the Act and the amendments which would become operative under section 6 in respect of sections 52(1) and 59 of the Punjab Municipal Act are void and unconstitutional.
The orders by which the movable and immovable property of the Committee have been transferred to the State are hereby quashed and such transfers are declared to be wholly void.
The respondents are further directed not to recover any contribution in accordance with clause (g) of section 52 of the Punjab Municipal Act as also the sum of Rs. 53 lakhs mentioned in the order of the.
Deputy Commissioner dated April 10, 1964.
from the appellants Committee.
Appropriate writs and directions.
shall issue in this behalf.
V.P.S. Appeal allowed.
| The appellant Committee was constituted under the Punjab Municipal Act 1911, and was running a number of municipal schools, for some of which it was getting grant in aid from the respondent State.
The respondent took an administrative decision, without any statutory authority, to provincialise all the schools run by the local bodies in the State with effect from October 1, 1957, and till June 1959, various steps in the process of provincialisation were taken.
In June 1959.
the Punjab Local Authorities (Aided Schools) Act, 1959.
was passed after obtaining the assent of the President.
The Act was deemed to have come into force with effect from October 1, 1957.
The scheme of the Act is that it is initially left to the local authority to pass a resolution to transfer the management and control of aided schools to the State Government.
In order to employ compulsive persuasion the State Government can withdraw the grant in aid in respect of the aided schools if such authority does not pass a resolution in terms of .s. 3 within a period of 3 months from the date of the enactment of the statute.
Section 5 gives power to the State Government to take over aided schools where the local authority neglects to perform its duty or if it is considered necessary in public interest to take over the management for a period not exceeding ten years, but only after giving the local authority a reasonable opportunity for showing cause.
The proviso to the section arms the State Government with powers, in case of emergency and in the interests of students, to take over the management straight away after publication of a notification to that effect.
There is no provision, however, for an automatic retransfer of the property after lapse of the period o.f 10 years.
Section 6 introduces amendments in sections 52 and 59 of the Punjab Municipal Act.
Clause (g), introduced in section 52(1), enables the State Government to get an annual contribution from the local bodies, and the amendments to section 59, vest in the State not only the management of the schools taken over but also the interests in the movable and immovable properties pertaining thereto.
As the appellant decided no.t to.
pass the resolution under section 3 the respondent issued a notification on September 26, 1960.
taking over for a period of 10 year 's, the management of the aided schools specified in the schedule tO the notification.
On the question of payment of the contribution it was resolved on January 3, 1962, that the payment be made with effect from October 1, 1957, while retaining the proprietary rights in the schools; but the appellant subsequently passed several resolutions practically rescinding this resolution with respect to the payment of any 376 contribution.
On April 10, 1964, the appellant was required by order to pay about Rs. 53 lakhs on account of the contribution for the maintenance of the provincialised schools for the period 1957 58 to 1963 64.
Thereupon, the appellant filed a petition under articles 226 and 227 in the High Court, challenging the orders and the constitutional validity of the Act.
The petition was dismissed.
In appeal to this Court it was contended: (1 ) The taking over of the movable and immovable property of the appellant did not fall within article 31A(1)(b) and the action was in direct contravention of article 31(2); (2) The notification dated September 26, 1960, was not protected by the proviso to section 5, because, there was no question of any emergency, nor was such emergency pleaded or proved by the respondent; (3) The notification could not and did not validate the action prior to the date when it was issued; (4) Section 6 of the Act which effected amendments of the provisions of the Punjab Municipal Act could not be attracted; and (5) Section 3(2) and the amendments which would become operative under section 6 in respect of sections 52(1) and 59 of the Punjab Municipal Act, are void and unconstitutional.
HELD: (1) Under article 31A(1)(b) it is only the management and control of the aided schools, that could be taken over for a limited period in the public interest or in order to secure their proper management, but proprietary interests in movable and immovable properties pertaining to the schools and belonging to the appellant could not be acquired.
In the present case in view of the terms of the resolution of January 3, 1962 and the subsequent resolutions of the appellant it could not be said that the resolution fell within the first part of section 3 and that action was taken by the State pursuant to such resolution.
The action was taken by the respondent only under section 5 and when once action was so.
taken all the properties, movable and immovable, belonging to the local body pertaining to the schools taken over, became the property of the State, by virtue of the amendments made in section 59 of the Punjab Municipal Act.
When the proprietary interest in the movable and immovable property pertaining to the schools and belonging to the Committee is thus acquired, the action is not protected by article 31A(1)(b) as it is nothing short of compulsory acquisition within the meaning of article 31(2) of the Constitution and is in violation of that .Article when there is no provision for payment of compensation.
[386; A F; 387 F G] (2) In the notification there was no indication that the management of the schools was being taken over because any emergency existed.
The State could not show by placing material before the court that it was a case of emergency justifying the action under the proviso, to section 5.
when no foundation in that behalf had been laid, in the writ petition.
[388 B C; D E] (3) The mere fact that the Act in terms was retrospective would not make the notification issued under the proviso.
to section 5, retrospective, in the absence of express words or appropriate language from which retroactivity would be implied.
The notification only meant that the management was taken over from the date of the notification and not from any prior date.
Therefore.
whatever was done before the date of the notification regarding the assumption of management and vesting of the Committee 's property was void and illegal.
[389 A C] (4) Under section 6 of the Act it is only after the local authority has passed a resolution under section 3 or the State Government has taken over management of the aided schools under section 5, that sections 52 and 59 of the ' Punjab Municipal Act would be deemed to have been amended in the 377 manner specified in the Schedule with effect from October 1, 1957.
If the notification in the present case, could.
not be given retrospective operation, the amendments in the Punjab Municipal Act would be effective only after the date of the notification and not for the prior period.
Thus, even on the assumption that the provisions of the Act are valid the State could not ask for any contribution from the Committee for the period prior to the date of the notification.
[389 D F] (5) By asking the Committee to make contributions from its funds under the newly introduced el.
g in section 52(1), to the cost of the schools which have been taken over by the State, part of its funds are being compulsorily acquired by the State, which could not be done except in accordance with the provisions contained in article 31(2).
[390 C D, E F] When the State Government makes a direction under section 3(2) that the aided schools shall be taken over, the proprietary and ownership rights of the Committee also vest in the State Government.
Further, section 6 comes into operation as soon as a local authority has passed a resolution under section 3 or the State Government has taken over management under section 5, and the provisions relating to acquisition of property of the Committee as also of its funds by way of contribution, come immediately into operation by virtue of the amendments effected in sections 52(1) and 59 of the Punjab Municipal Act.
[391 A D] Since there is No. provision for compensation in the Aided Schools Act or section 59 of the Municipal Act, section 3(2).of the Aided Schools Act and the amendments in sections 52(1) and 59 of the Punjab Municipal Act are void and unconstitutional.
[391 D] Hence, the order by which, the movable and immovable property of the Committee has been transferred to the State contribution was sought be recovered, and the sum of Rs. 53 lakhs was demanded, is illegal, [391 D E] Municipal Committee, Amritsar vs State o! Punjab; , , followed.
|
Appeal No. 856 of 1964.
Appeal by special leave from the judgment and order dated May 21/22, 1964 of the Calcutta High Court in Matter No. II of 1962.
Me appellant appeared in person.
55 C.K. Daphtary, Attorney General, Ranadeb Choudhury, P. K. Chatterjee, Somendra Chandra Bose and P. K. Bose, for respondent No. 1.
C. K. Daphtary, Attorney General, N. C. Chatterjee and R. H. Dhebar, for respondent No. 2.
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question which arises in this appeal by special leave is whether the order passed by the President of India on May 15, 1961, approving the action which was proposed to be taken against the appellant, Jyoti Prokash Mitter, amounts to a decision on the question about the appellant 's age as a Judge of the Calcutta High Court under article 217(3) of the Constitution.
In the note placed before the President along with its accompaniments it was proposed that the appellant should be informed that his correct date of birth had been determined to be December 27, 1901, and so, he should demit his office of puisne Judge of the Calcutta High Court on December 26, 1961 on which date he would attain the age of 60.
The draft of the letter which was intended to be sent to the appellant in that behalf was also placed before the President.
On the file, the President made an order, "approved"; and the question is whether this is an order which can be related to article 217 (3).
It is true that this order was passed on May 15, 1961, whereas clause (3) of article 217 which was added in the Constitution by the Constitution (Fifteenth Amendment) Act, 1963, came into force on October 5, 1963.
Section 4(b) of the Amendment Act, however, provides that the said clause shall be inserted and shall be deemed always to have been inserted in the Constitution.
In other words, in terms, the insertion of the relevant clause is made retrospective in operation.
That is how it has become necessary to enquire whether the order passed by the President on May 15, 1961 can be said to amount to a decision within the meaning of the said clause.
Writ Petition No. 13 of 1962 from which this appeal arises was filed by the appellant in the Calcutta High Court on January 2, 1962.
By his petition, the appellant claimed a writ in the nature of mandamus and/or appropriate directions, order or writs under article 226(1) against respondent No. 1, the Chief Justice of the Calcutta High Court, requiring him to recall the order passed by him by which he had decided that the appellant had retired from his post as a Judge with effect from December 27, 1961.
This writ petition has had a checkered career.
Banerjee, J. 56 before whom it came for the issue of a Rule Nisi, was not satisfied that it was necessary to issue Rule Nisi on it, and so, he dismissed the appellant 's writ petition in limine on January 3, 1962.
The appellant challenged the correctness of this decision by preferring an appeal under Letters Patent before a Division Bench of the said High Court.
Mitter and Laik JJ.
who constituted this Bench, however, differed, and so, the learned Chief Justice bad to constitute a Special Bench of three learned Judges to deal with the appeal.
P. N. Mookerjee, Sankar Prasad Mitra and R. N. Dutt, JJ.
who constituted this Special Bench, heard the matter and delivered three concurring judgments.
They were, however, unanimous in holding that Banerjee J. was in error in refusing to issue a Rule Nisi, and so, they allowed the appeal preferred by the appellant and directed that a Rule Nisi in terms of prayer (1) of the petition should be issued.
Against this order, respondent No. 1 came in appeal to this Court by special leave.
By its judgment pronounced on the 14th October, 1963, this Court held that the Special Bench was right in directing a Rule Nisi to be issued on the writ petition filed by the appellant, and so, the appeal preferred by respondent No. 1 was dismissed.
The writ proceedings thus went back to the Calcutta High Court for disposal on the merits in accordance with it.
At this stage, a Special Bench consisting of five learned Judges of the High Court heard the matter.
The area covered by the controversy between the parties was very wide and several constitutional questions of law were exhaustively argued before this Special Bench.
All the learned Judges constituting the Bench have delivered separate judgments each one elaborately dealing with the points urged before the Court.
P. N. Mookerjee J. in substance, accepted the main pleas raised by the appellant and directed that an appropriate writ or an appropriate order or direction in the nature of a Writ do issue against respondent No. 1 calling upon him to forbear from giving effect to the impugned order until a proper determination by the President that the appellant has attained the age of superannuation.
He, however, added that the operation of the order which he proposed to issue should remain stayed for three months to enable respondent No. 1, if he was so advised, to obtain the President 's determination in the matter of the appellant 's age and act upon the same in accordance with law.
57 The four other learned Judges, Mallick, Banerjee, Das Gupta and Chatterjee J., however, took a different view.
They held that the appellant was not entitled to any writ or order against respondent No. 1 as claimed by him.
The approach adopted by these learned Judges is not uniform, but.
on the whole, their final conclusion was against the appellant.
In the result, in accordance with the majority decision, the writ petition filed by the appellant has been dismissed.
It is against this decision that the appellant has come to this Court by special leave which was granted to him on August 24, 1964.
On September 21, 1964, upon an oral prayer made by the Attorney General for India, the Court allowed the Attorney General to intervene in this matter, and by consent of parties, the Court directed that the appeal should be set down for hearing on the 26th October, 1964, subject to any part heard matter.
On the 26th October, 1964, when the appeal was called out for hearing, the Court allowed the appellant 's prayer for adding the Union of India to the appeal as respondent No. 2.
The Attorney General of India who had already been allowed to intervene in the proceedings, accepted notice of the motion made by the appellant for joining the Union of India and agreed to appear for the Union of India.
At his request, the appeal was adjourned to the 29th October, 1964 in order to enable him to file an affidavit on behalf of respondent No. 2.
That is how this appeal came on for final hearing on the 29th October, 1964.
At the hearing, both parties conceded that the only question which called for our decision is whether the order of the President passed on May 15, 1961, could be said to be a decision on the point about the age of the appellant within the meaning of article 217 (3).
In view of the fact that the Amendment Act, 1963 inserted clause (3) in article 217 retrospectively during the pendency of the present writ proceedings, all other questions which had been argued between the parties before the said Amendment, have now become immaterial and that has naturally narrowed down the scope of the present controversy.
Though the controversy between the parties thus lies within narrow limits, it is necessary to set out the material facts in some detail in order to appreciate the background of the present dispute, because it is only in the light of the said background that the problem posed for our decision can be seen in its proper perspective.
The appellant who was enrolled as a Barrister of ' the Calcutta High Court on May 5, 1931, was appointed an Additional Judge of the said High Court on February 11, 1949.
In January, 1950, he became a permanent Judge of the said High Court.
At the time of his appointment, the appellant had given Sup./65 5 58 the date of his birth as December 27, 1904.
It appears that some time in 1959, the attention of the Home Minister of the Government of India was drawn to an extract from the Bihar and Orissa Gazette of June 26, 1918 containing the results of the Matriculation Examination held by the Patna University in April, 1918.
The relevant information contained in the said extract showed the age of the appellant at the date of the examination as 16 years and 3 months.
This would indicate that the appellant was born on December 27, 1901.
It also appears that later, the Home Minister came to know that when the appellant appeared at the open competitive examination for the I.C.S. in July/August, 1923, the date of his birth was given and shown as December 27, 1901.
That is why the Home Minister raised the question about the correctness of the date of birth given by the appellant at the time of his appointment.
As a result of the correspondence carried on between the Union Home Minister, the Chief Minister of West Bengal, the Chief Justice of the Calcutta High Court, and the appellant, the Government of India ultimately decided that the appellant 's date of birth was December 27, 1901; and so, the file containing the said correspondence and other relevant material was placed before the President on May 15, 1961.
Noting made on this file indicated that the Government of India intended to ask the appellant to demit his office on December 26, 1961, after court hours.
After this proposal was approved by the President, the Government of India asked the Chief Minister of West Bengal to communicate this decision to the appellant through the Chief Justice of the Calcutta High Court.
At that stage, the appellant moved the Punjab High Court under article 226 of the Constitution by a writ petition filed on November 15, 1961, against the Union of India, praying that an appropriate writ or order should be issued against the Union of India restraining it from giving effect to its impugned order.
The said High Court, however, dismissed the appellant 's writ petition on December 4, 1961.
The appellant then moved this Court for special leave to appeal against the decision of the Punjab High Court, but his petition was rejected in limine.
In due course, when occasion arose to give effect to the decision of the Government of India, respondent No. 1 passed an order directing that the appellant will demit his office of a puisne Judge of the Calcutta High Court on December 26, 1961 after Court hours.
It is the validity of this order which has been impeached by the appellant in the present writ proceedings.
The 59 appellant contended that respondent No. 1 was patently in error in seeking to enforce an order passed by the Government of India as an executive order by which they purported to determine his age.
On this basis, he claimed an appropriate writ or order against respondent.
No. 1; and that raised several constitutional questions.
But, as we have already indicated, the introduction of cl.
(3) in article 217 has completely changed the complexion of the controversy and all that we are now required to consider is whether the approval given by the President can fall within the purview of article 217(3).
Let us now examine the correspondence that took place bet ween the parties in order to ascertain the procedure adopted by the Government of India in obtaining the approval of the President, and the pleas taken by the appellant during the course of these proceedings.
On April 9, 1959, G. B. Pant, the Home minister, wrote to the Chief Minister, West Bengal, informing him that his attention had been drawn to the fact that the relevant extract from the Bihar and Orissa Gazette indicated that the date of birth given by the appellant at the time of his appointment as an Additional Judge of the Calcutta High Court, was not accurate.
In this letter.
the Home Minister suggested to the Chief minister that he should arrange to have necessary enquiries made in that regard and let him know the result of the said enquiry.
The Chief Minister got in touch with Chief Justice K. C. Das Gupta on the is point, and the Chief Justice wrote to the appellant on April 17, 1959, sending him a copy of the letter which he had received from the Chief Minister.
In this letter, the Chief Justice requested the appellant to furnish him with a full statement on all the points involved and inform him at the same time of any other material which may be relevant on the correct ascertainment of the date of his birth, and the consequential ascertainment of the date of his retirement.
On the same day, the Chief Justice wrote another note to the appellant inviting him to meet him in order that be should be able to talk to him about a matter which vitally concerned the appellant.
The appellant was asked to meet the Chief Justice at 4 P.m. that day.
On May 27, 1959, the appellant wrote to Chief Justice Das Gpta suggesting that the date of his birth shown in the relevant extract from the Gazette was obviously incorrect.
He expressed his satisfaction that the question of his age had not been raised directly by either the State Government or the Government of India, but had been raised at the instance of some mischievous person.
He emphasised that there was hardly any reason for him 60 to give an inaccurate date of his birth when he accepted appointment.
Chief Justice Das Gupta again wrote to the appellant on July 6, 1959 informing him about the report from the Civil Service Commission, London, regarding the date of birth given by the appellant to the Commission when he appeared for the I.C.S. Competitive Examination.
A copy of the said report was forwarded to the appellant.
The Chief Justice asked the appellant to send Ms comments on the said report.
On August 12, 1959 the appellant sent a reply to this letter, and he pleaded that he did not recollect at that distance of time whether he had himself given to the Civil Service Commission the date of his birth.
He was, however, certain that being then an undergraduate at Oxford, he did not obtain any certificate of age in terms of clause 4 of the Regulations concerning Examinations for the Indian Civil Service.
In this letter, the appellant protested that he saw no valid reason for any further enquiry as to his identity with the examine and he urged that the question sought to be raised was one of principle.
According to him, the date of birth given by him at the time of his appointment could not be questioned.
After these letters of the appellant were forwarded by the Chief Justice of the Calcutta High Court to the Government of India, the matter was sent to section R. Das, the Chief Justice of India for his opinion.
Chief Justice Das considered the material forwarded to him and expressed his definite view that the date of birth of the appellant should be taken to be December 27, 1901.
In this connection, Chief Justice Das observed that in such matters they had always been insisting that the date of birth given in the birth register or school register or Matriculation Certificate should be conclusive.
This opinion was expressed by Chief Justice Das on September 9, 1959.
Thereupon, Chief Justice Lahiri of the Calcutta High Court intimated to the appellant on September 21, 1959, that he has been asked by the Chief Minister, West Bengal, to inform him that the Home Minister, Government of India, had considered the explanation given by him about his age and had decided, with the concurrence of the Chief Justice of India, that the age stated in his Matriculation Certificate would be treated as final and the will have to retire on the basis of the age as recorded therein.
It appears that the Home Minister, Government of India, had written to the Chief Minister, West Bengal, on September 14, 1959, intimating to him that he had consulted the Chief Justice of India in 61 regard to the question of the appellant 's age and that he entirely agreed with the advice given by the Chief Justice of India; and he suggested that the appellant should be informed accordingly through the Chief Justice of the Calcutta High Court.
That is how the appellant came to know about this decision through his chief Justice.
After the appellant received intimation about the decision of the Government of India, he wrote to Chief Justice Lahiri expressing his emphatic disapproval of the said decision, and he made litter comments against the views expressed by Chief Justice Das in the note made by him while giving his advice to the Government of India in this matter, vide his letter of September 30, 1959.
in his letter of April II, 1960, the appellant wrote to Chief Justice lahiri that he had repeatedly pointed out to Government that the controversy as to his superannuation involved a principle affecting the judiciary as a whole, and so, there could be no question of submitting to arbitration.
He had already made it clear in his letter of September 30, 1959, that the procedure adopted by the Government of India from beginning to end was unwarranted and that he was not bound by the decision communicated to him by the Chief Justice of the Calcutta High Court on September 21, 1959.
further correspondence went on between the parties, but it is not necessary to refer to it, because it does not give any further material which is relevant for our decision.
That takes us to May 12, 1961, on which date the Ministry of Home Affairs prepared a note setting forth the history of the dispute as to the correct date of the appellant 's birth.
This note shows that the Government of India had consulted Chief Justice Sinha who succeeded Chief Justice section R. Das; Chief Justice Sinha had so taken the same view as had been taken earlier by Chief justice Das.
The note also points out that when an offer was made to the appellant to have the issue tried by arbitration, he had rejected the offer, and so, after considering all relevant facts, it was proposed to send a formal communication to him asking him to demit his office on December 26, 1961.
This note has been signed by the Secretary to the Ministry of Home Affairs.
In this note, the Secretary had stated that both the Law Minister and the Home Minister had approved of the note.
This note was submitted to the Prime Minister who, on the same day, agreed with the course of conduct proposed to be adopted, and then it went to the President who expressed his approval on May 15, 1961.
That the genesis of the impugned order.
62 It appears that in the morning of July 30, 1961, the appellant saw Prime Minister Nehru and complained against the order which had been passed in respect of his age.
The Prime Minister wrote to the appellant the same day that he had told the appellant that he proposed to consult the Chief Justice of India and the appellant had agreed to that course.
The appellant appeal to have requested the Prime Minister that he should be Given chance to place his viewpoint before the Chief Justice of India and the Prime Minister had assured him that he could meet the Chief Justice and place his case before him.
In this letter, the Prime Minister has also stated that he had spoken to the Chief Justice of India that evening and that he was told that some time back a rule had been framed to determine the age of sitting Judge of High Courts and that rule had been followed in his case.
The letter also added that the Chief Justice of India had mentioned the Prime Minister that there had been some serious complain about the manner in which judicial work had been transacted the appellant.
In the end, the Prime Minister advised the appellant to get in touch with the Chief Justice of India.
It is true that in dealing with the question about the appellant 's age, refer ence to the quality of his judicial work was irrelevant; but the general tone and content of the Prime Minister 's letter clear indicate that the Prime Minister had adopted a flexible, inform fair and sympathetic approach to the appellant 's grievance and he was willing to re examine the matter if it was found necessary to do so.
Accordingly, the appellant met the Chief Justice of India on July 31, 1961.
It appears that when the appellant met Chief Justice Sinha, the latter advised him to retire on December 2, 1961 on the basis of the date of birth disclosed by his Matriculation Certificate.
The appellant was told that was in consonance with the policy adopted by the Government of India recent cases.
The Chief Justice assured the appellant that was not the intention of the Government of India to do anything to cast aspersions on the veracity of a Judge of a High Court, and he indicated that without going into the correctness of the a given by the appellant, it was desirable that he should retire the basis that the Matriculation Certificate correctly represent, his age.
"I am glad", said Chief Justice Sinha, "that you have taken my assurance in the spirit in which it was given, namely to save you and to save the Government from any embarrassment in connection with such a controversy.
This is the substance the letter which Chief Justice Sinha wrote to the appellant 63 August 22, 1961.
This letter also indicates that Chief Justice Sinha assured the appellant that no aspersion was intended to be cast on the veracity of his statement as to his age presumably because the appellant had indicated to him that he would be willing to retire in case it was made clear that no aspersion was cast on his veracity.
As Chief Justice Sinha explained in a note made by him on a later occasion, the background of his letter clearly suggests that the conversation between the Chief Justice and the appellant was of an informal character and the Chief Justice was naturally willing to assure the appellant that if he quits office on the 26th December, 1961, it would save embarrassment both to the appellant and the Government.
This approach again was flexible, fair and sympathetic to the appellant.
As we have already seen, in due course before the 26th December, 1961 arrived respondent No. 1 passed an order directing the office to treat the appellant as having retired on December 26, 1961; and that has given rise to the present controversy.
Let us now revert to article 217(3) and ascertain its true scope and effect.
article 217(3) provides that if any question arises as to the age of a Judge of a High Court, the question shall be decided by the President after consultation with the Chief Justice of India and the decision of the President shall be final.
We have already noticed that this provision has been expressly made retrospective in operation, so that whenever a question arises as to the age of a sitting Judge of a High Court, that question has to be decided by the President in the manner prescribed by article 217(3).
The retrospective operation of this provision postulates that this provision must be read in the Constitution as from January 26, 1950; and so, it will apply even in regard to the determination of the ages of Judges of High Courts who had been appointed to their office before the actual provision was inserted in the Constitution by the Amendment Act of 1963.
This provision vests the jurisdiction to determine the question about the Judge 's age exclusively in the President, and so, it follows that in the presence of this provision, no court can claim jurisdiction to deal with the said question.
It is true that before this provision was inserted in the Constitution, the question about the age of a sitting Judge of a High Court could have been theoretically brought before the High Court in a proceeding by way of a writ for Quo Warranto under article 226.
But now there can be no doubt that the question about the age of a Judge of a High Court has to be determined only in one way, and that is the way prescribed by 64 article 217(3).
This position is not disputed by the appellant before us.
It is also clear that the decision of the President under article 217 (3) is final, and its propriety, correctness, or validity is beyond the reach of the jurisdiction of courts.
What procedure should be followed in deciding the age, what opportunity should be given to the Judge whose age is being decided, and other allied questions pertaining to the decision, are entirely within the discretion of the President.
The provision requires that before the President reaches his decision, he has to consult the Chief Justice of India; consultation with the Chief Justice of India is clearly a mandatory requirement of clause (3).
It is thus clear that while leaving the decision of the relevant question to the President, the Parliament thought it necessary to provide that having regard to the gravity of the problem covered by the said provision, it is essential that the President should have the assistance of the advice given by the Chief Justice of India.
It is also implicit in this provision that before the President reaches his decision on the question, he ought to give the Judge concerned a reasonable opportunity to give his version in support of the age stated by him at the time of his appointment and produce his evidence in that behalf.
How this should be done, is, of course, for the President to decide; but the requirement of natural justice that the Judge must have a reasonable opportunity to put before the President his contention, his version and his evidence, is obviously implicit in the provision itself.
These aspects of the matter are not disputed by the teamed Attorney General before us.
It is in the light of this position that we must now proceed to consider the question as to whether the decision of the President on which the Union of India relies can be said to be a decision under article 217 (3).
The first point which arises in this connection is whether an earlier decision reached by the President when the provision in question was not factually included in the Constitution, can be treated as a decision under the said provision as a matter of law.
It is well known that where legislation makes retrospective provisions, it sometimes expressly provides that orders passed earlier under some other provisions should be deemed to have been passed under the subsequent provision retrospectively introduced.
Such a provision has not been made by the Amendment Act, 1963 which inserted clause (3) in article 217.
But in dealing with the present appeal, we are proceeding on the basis that an order passed by the President on May 15, 1961, can be treated as a decision 65 under article 217(3) if, on the merits, such a conclusion is justified, because, in terms, the said provision is made retrospective.
Before dealing with this question, there are some incidental matters which must be considered.
The appellant has urged before us that article 217(3) can come into play only if and when a genuine or serious question about the age of a Judge arises.
He contends that if any person frivolously or maliciously and without any justification whatever raises a dispute about the correctness of the age given by a Judge at the time of his appointment, article 217 (3) should not be allowed to be invoked.
It is true that it is only where a genuine dispute arises as to the age of a Judge that article 217(3) would be allowed to be invoked; but that is a matter for the President to consider.
Under article 217(3) the President should, and we have no doubt that he will, in every case, consult the Chief Justice of India as to whether a complaint received in respect of the age of a sitting Judge of any High Court should be investigated, and it is with such consultation that he should decide whether the complaint should be further investigated and a decision reached on the point.
We think it is clear that if a dispute is raised about the age of a sitting Judge and in support of it, evidence is adduced which prima facie throws doubt on the correctness of the date of birth given by a Judge at the time of his appointment, it is desirable that the said dispute should be dealt with by the President, because it is of utmost importance that in matters of this kind, the confidence of the public in the veracity of a statement made by a Judge in respect of his age must be scrupulously maintained, and where a challenge is made to such a statement, it is in the interests of the dignity and status of the Judge himself as much as in the interests of the purity and reputation of the administration of justice that the dispute should be resolved and the matter cleared up by the decision of the President.
The appellant, however, contends that pending the decision of the dispute, the Judge concerned continues to be a Judge and should not be required to step down from his office.
As a matter of law, the appellant is right when he contends that a Judge cannot cease to be a Judge merely because a dispute has been raised about his age and the same is being considered by the President; but in dealing with this legal position, considerations of prudence and expediency cannot be ignored.
If a dispute arises about the age of a Judge, any prudent and wise Chief Justice would naturally think of avoiding unnecessary complications by refusing to assign 66 any work to the sitting Judge if at the time when the dispute had been raised, it appears that the allegation is that at the relevant time the Judge in question has reached the age of superannuation.
In such a case, if the decision of the President goes against the date of birth given by the appellant, a serious situation may arise, because the cases which the said Judge might have determined in the meanwhile would have to be rehealed, for the disability imposed by the Constitution when it provides that a Judge cannot act as a Judge after he attains the age of superannuation, will inevitably introduce a constitutional invalidity in the decisions of the said Judge, and it is plain that it would be the duty of the Chief Justice to avoid such a complication.
Therefore, we do not think the appellant is entitled or justified in making a grievance of the fact that respondent No. 1 refused to assign any work to him after the 26th December 1961.
That takes us to question as to whether the impugned order can be said to fall under article 217(3).
The Attorney General has contended that the approval expressed by the President on May 15, 1961, in law amounts to a decision under article 217(3), because it satisfies all the requirements of the said provision.
The Government of India had consulted Chief Justice section R. Das as well as his successor, Chief Justice Sinha, the Government had asked the appellant to make his comments on the material which showed that the appellant was born on the 27th December 1901; a large volume of correspondence proceeded between the parties and it is only after the appellant had set out his contentions and his points that the Government ultimately came to a conclusion against the appellant and placed before the President the whole file containing all the material including the advice received from Chief Justice section R. Das and Chief Justice Sinha.
The Attorney General has urged that it is not necessary that the President should himself write an elaborate order incorporating his decision on the question referred to him; the word "approved" used by him while signing the file amounts to his decision.
In support of this argument, he has referred us to two decisions : Srinivas Mall Bairoliva vs King Emperor(1), and Alexander Brogden and Others vs The Directors, & c., of the Metropolitan Railway Company (2) .
He has also urged that the procedure followed by the Ministry of Home Affairs in placing the file before the President is in accordance with the rules of business prescribed in that behalf, and so, the decision of the President should be held to be a decision under article 217(3).
(1) Pat.
(2) 67 Prima facie, there appears to be substance in this argument; but on a closer examination of the material produced before us, we find that there are several difficulties in upholding it.
Let us first enquire as to when this decision was reached and by whom ? We have already seen that in his letter of September 14, 1959 G.B. Pant, the then Home Minister, wrote to the Chief Minister, West Bengal, that he had consulted the Chief Justice of India and he agreed with the advice given to him by the Chief Justice, and so, he had decided that the date of birth of the appellant was December 27, 1901.
It is this decision which was, in due course, communicated to the appellant.
Now, if this be held to be the decision of the Government of India, then, of course, article 217(3) is inapplicable.
The decision was reached by the Home Minister, no doubt after consulting the Chief Justice of India; but that plainly is not the decision of the President.
What happened subsequent to this decision also doe , not assist the Attorney General 's contention.
It is true that the attitude adopted by the Government of India was, on the whole, very fair.
They were anxious to consider what the appellant had to say in respect of this dispute.
They were also anxious to take into account whatever pleas the appellant might have to raise in favour of the date of birth given by him.
They consulted Chief Justice section R. Das as well as Chief Justice Sinha who followed him.
They offered to take the question to an 'arbitrator of the choice of the parties, and when they found that the appellant was not agreeable to adopt any such course, they considered the matter and placed the file before the President.
There is little doubt that this flexible and informal approach adopted by the Government in dealing with this question was inspired by a desire to be fair to the appellant; but the flexibility and the informality of the approach thus adopted by the Government out of a sense of fairness themselves tend to introduce an infirmity in the procedure when it is sought to be co related.
With the requirements of article 217(3).
It is difficult to imagine that if the President were to act under article 217(3) he could or would ask the Judge concerned to go to arbitration.
It is because of this flexible and sympathetic approach adopted by the Government that even after the Home Minister had come to a definite decision against the appellant, the matter was allowed to he reopened and the whole question was considered afresh.
That, again, would not be quite consistent with the requirements of article 217(3).
In this connection, it is hardly necessary to emphasise that when at the relevant time the Government were considering this matter and they consulted the Chief Justice of India, the 68 informality of the said consultation does not squarely fit in with the formal consultation which is now made mandatory by article 217(3).
Therefore, having regard to the procedure followed by the Government in dealing with this question, we feel some hesitation in accepting the Attorney General 's argument that what has been done prior to the decision of May 15, 1961, can be easily assimilated to the requirements of article 217(3).
There is one more objection which is fatal to the Attorney General 's contention.
and that must now be considered.
It is true that at all material stages, the appellant had taken an alternative stand in support of his case that the date of birth given by him was correct and could not be challenged.
His first contention was that where a lawyer gives the date of his birth on the occasion of his appointment as a Judge of the High Court and the said date is accepted by the Government and entered in official records, its correctness cannot be impeached at any time.
This contention is clearly not well founded.
Whether or not the Government of India accept the date of birth given by a lawyer before he is appointed, it is difficult to hold that a litigant would be precluded from putting that question in issue in a proceeding taken by him under article 226 for the issue of a writ of Quo Warranto.
It is true that no such applications are known to have been made; and that naturally speaks for the respect in which Judges of High Courts are held by the litigants and the public in this country.
But speaking constitutionally prior to the insertion of cl.
(3) in article 217, it would have been open to a litigant, if he has material in his possession in that behalf, to apply to a High Court and urge that a particular Judge is not competent to act as a Judge, because, according to him, he has already reached the age of superannuation.
Therefore.
we are satisfied that the stand taken by the appellant that the statement made by him as to the date of his birth before he took office can never be questioned, is not well founded.
The alternative stand which the appellant took was that the Executive was not entitled to determine his age; and it must be remembered that this stand was taken before article 217 (3) was inserted in the Constitution, the appellant was undoubtedly justified in contending that the Executive was not competent to determine the question about his age, because that is a matter which would have to be tried normally in judicial proceedings instituted before High Courts of competent jurisdiction.
There is considerable force in the plea which the appellant took at the initial stages of this controversy that if the Executive is allowed to determine the 69 age of a sitting Judge of a High Court, that would seriously affect the independence of the Judiciary itself.
Basing himself on this ground, the appellant did not produce his evidence in the proceedings taken by the Government of India before the impugned order was passed.
The appellant stated before us and he apparently suggested this fact even to the Punjab High Court when he moved that Court under article 226 that he had in his possession evidence which supported the date of birth given by him before he was elevated to the Bench.
It is true that he did not produce this evidence, though Chief Justice Das Gupta had asked him to do so.
We are not impressed by the appellant 's plea that he had not received the letter of Chief Justice Das Gupta written on April 17, 1959, in which he had been asked to communicate to the Chief Justice what material he had in support of the date of birth given by him; and so, we proceed on the basis that the appellant did not produce his evidence, though he was called upon to do so.
He also refused to go to arbitration.
But the question which arises for our decision is : can the appellant 's failure or refusal to produce evidence be fairly pressed into service against him when basically he was right in contending that the Executive cannot decide the issue of his age by itself ? If the appellant was right in this contention, then no adverse inference can be drawn against him because he failed or refused to adduce evidence before the Executive.
We are satisfied that having regard to the circumstances in which the enquiry was made, and bearing in mind the fact that the appellant was justified in contending that his age could not be determined by the Executive in proceedings initiated by it, the impugned order passed by the President must be held to suffer from the serious infirmity that the evidence of the appellant was not available to the President when he reached his decision.
The question concerning the age of the appellant on which a decision was reached by the President on May 15.
1961, affects the appellant in a very serious manner; and so, we think considerations of natural justice and fair play require that before this question is determined by the President, the appellant should be given a chance to adduce his evidence.
That is why we think that, on the whole, it would not be possible to accept the Attorney General 's contention that the order passed by the President on May 15, 1961, can be treated as a decision within the meaning of Art, 217 (3).
We ought to make it clear that in dealing with the grievance of the appellant that his evidence was not before the President at the relevant time, we are not prepared to hold that his failure or refusal to produce evidence at that stage should be judged in the 70 light of the retrospective operation of article 217(3); such a consideration would be totally inconsistent with the concept of fair play and natural justice which ought to govern the enquiry contemplated by article 217(3).
In dealing with this aspect of the matter, it would be unreasonable, unjust and unfair to refuse to recognise the position of law as it actually and in fact existed at the relevant time merely because by the fiction introduced by the retrospective operation of the constitutional amendment, the said position cannot now be deemed.
to have then existed in the eyes of law.
The Attorney General faintly attempted to argue that the decision of the Punjab High Court in the writ petition filed by the appellant in that Court in 1961 (Civil Writ No. 479 D/ 1961) amounts to res judicata on the question about the appellant 's age.
In his judgment, Chief Justice Khosla has no doubt observed that he was convinced upon all the material which had been produced before the Court including the horoscope and the entry in the almanac that the Home Ministry was not wrong in accepting the correct age of the appellant as that given in the Bihar & Orissa Gazette and in the certificate which the appellant had filed with, his application when he sat for the I.C.S. Examination.
This argument is obviously misconceived.
First and foremost, if article 217 (3) is retrospective in operation, any decision of the Court on this question must be deemed to be without jurisdiction, because from January 26, 1950 itself this question must be deemed to have fallen within the exclusive Jurisdiction of the President.
Since the plea of res judicata on which the Attorney General relies is a plea of law, the appellant is entitled to repel the said plea on the legal ground that the constitutional amendment in question is retrospective, and at the relevant time the High Court had no jurisdiction to decide this point.
But quite apart from this technical constitutional position, it is impossible to hold that the observation on which the Attorney General relies can be said to be 'a decision which can operate as res judicata in law.
Chief Justice Khosla, in substance, dismissed the writ petition of the appellant on the around that it was premature, and so, he expressly observed that the question about the age of the appellant was of an academic nature.
He also seemed to rely on the doctrine of approbate and reprobate.
Besides, it does not appear that the documents to which he refers were formally proved before the Court in those proceedings and had been the subject matter of any argument before it.
Under these circumstances, the plea that 71 this judgment creates a bar of res judicata must be rejected without any hesitation.
We ought to add that if this Court had felt inclined to treat this decision as a decision on the merits of the appellant 's age, it would certainly not have dismissed in limine the appellant 's application for special leave to appeal to this Court against that judgment.
That raises the question as to the proper order which should be passed in the present proceedings.
The appellant has contended before us that if we hold that the impugned decision of the President does not amount to a decision under, article 17(3), he is entitled to have a formal decision of the President in terms of the said provision.
The Attorney General has conceded that this contention of the appellant is well founded.
He, therefore, stated to us on behalf of the Union of India that in case our decision on the main point is rendered against the Union of India, the Union of India will place the matter before the President within a fortnight after the pronouncement of our judgment inviting him to decide the question about the appellant 's age under article 217(3).
Both parties have agreed before us that in case the decision of the President is in favour of the appellant, the appellant will be entitled to claim that he has continued to be a Judge notwithstanding the order passed by the Chief Justice of the Calcutta High Court and will continue to be a Judge until he attains the acre of superannuation.
On the other hand, if the decision of the President goes against the appellant, the said order of the Chief Justice of the Calcutta High Court would be held to be valid and proper.
Having regard to the circumstances of this case, we think that the present appeal should be disposed of in terms of this order.
There would be no order as to costs.
Ordered accordingly.
| There was divergence between the appellant 's date of birth as given at the time of his appointment as Judge of the Calcutta High Court and as found in the records of the public examinations at which he had appeared.
The Union Home Minister after correspondence with the parties concerned including the Chief Justice of India and the appellant determined the appellants date of birth to be December 27, 1901 as found in the records of the appellant 's Matriculation Examination.
The President, by order passed on May 15, 1961, approved the decision and the consequent order that the appellant be asked to emit his office on December 26, 1961 when be would reach the age of superannuation.
The Punjab High Court dismissed the appellant 's writ petition challenging the order and the Supreme Court dismissed in limine the petition for special leave to appeal.
Pursuant to the orders of the Union Government the Chief Justiceof the Calcutta High Court asked the appellant to demit his office on December 26, 1961, and after that date did not allot him any work.
The appellant thereupon filed a writ petition before the Calcutta High Court under article 226 of the Constitution which was dismissed.
The Supreme Court granted him special leave to appeal.
The appellant in his appeal contended that the age of a Judge given by him at the time of appointment once accepted by Government, could not again be called in question and in any case could not be determined again by the Government by Executive order.
The complexion of the controversy the passing of the Constitution by adding cl.
(3) to article 217 provided that any dispute as to the ago of a Judge of a High Court would be decided exclusively and finally by the president of India in consultation with the chief justice of India.
The Amendment Act also provided that the provision shall be deemed always to have been in the Constitution.
The parties agreed that after the retrospective amendment the main question for consideration was whether the order of the Union Government determining the appellant 's age and date of superannuation was an order which could be deemed to have been passed under article 217(3).
HELD : (i) If a dispute is raised about the age of a sitting Judge then it is desirable that the matter should be decided by the President.
Whether the dispute is genuine or not is to be considered by the President in consultation with the Chief Justice of India.
But it is certainly in the interests of the Judge himself, as much as in the interests of the purity and 54 reputation of the administration of justice that the dispute should be settled.
it could not be held that the age of a Judge given by him at the time of ,,appointment could never again be called in question.
(65 E F] (ii)The Chief Justice of the Calcutta High Court was justified in not allotting any work to the appellant after December 26, 1961, as any judgments delivered by him after the date would have been open to question as to their validity.
[66 B C] (iii)The judgment of the Punjab High Court dismissing appellant 's ,writ petition did not operate as res judicata as it was not on merits.
[71 A] (iv)Article 217(3) gave to the President exclusive power to determine ,the age of a sitting Judge and divested the courts of jurisdiction in this regard.
The procedure to be adopted was in the discretion of the President ,but the provision to formally consult the Chief Justice of India was man Also implicit in the Article, was the requirement that the Judge concerned should have a reasonable opportunity to give his version and 'Produce his evidence.
[64 B D] (v)The provision having been expressly made retrospective the appeal had to be decided on the basis that the order passed by the President in the appellant 's case could be treated as a decision under article 217(3), if, on merits, such a conclusion was justified.
[65 A] (vi)The order of the Union Government passed on May 15, 1961 did not satisfy the requirements of article 217 (3) and could not be held to be ,an order passed under the provisions of that Article.
The decision had been taken by the Home Minister and that plainly was not a decision of the President.
The offer to allow the matter to be decided by arbitration, and reopening of the matter after the decision had been taken, cannot be ,easily assimilated to the requirements of the Article.
The informality of the consultation with the Chief Justice of India also did not squarely fit, in ,with the formal consultation which is mandatory.
[67 B C, G H; 68 A] Srinivas Mail Bairoltva vs King Emperor, I.L.R. 26 Pat. 460 and Alexander Brogden and others vs The Directors of the Metropolitan Rail.way Company , referred to.
(vii)The order was also not a proper order under article 217(3) because the requirements of natural justice had not been satisfied inasmuch as the President did not have before him when he made the decision the evidence of the appellant.
It is true that the appellant had refused to produce the evidence on the ground that the Executive had no jurisdiction to call into question and determine his age.
This contention of the appellant when raised was fully justified as such a dispute in the legal situation which them existed had normally to be determined by judicial proceeding before the High Courts of competent jurisdiction, and therefore his failure or refusal to produce his evidence could not be fairly pressed into.
service against 'him.
[69 D F; 70 B] The Court held that the appellant was entitled to a decision by the President of India as to his age under article 217(3) and passed orders in terms agreed to by both parties.
[71 B F]
|
N: Criminal Appeal No. 335 of 1974.
Appeal by special leave from the Judgment and Order dated 1 11 1973 of the Bombay High Court in Criminal Appeal No. 113 of 1972.
O. P. Rana and M. N. Shroff for the Appellant.
V. N. Ganpule and V. B. Joshi for the Respondents.
The following Judgments were delivered: SARKARIA, J.
This appeal by special leave preferred by the State of Maharashtra, is directed against a judgment dated November 1, 1973, of the Bombay High Court.
Mohd. Yakub respondent 1, Shaikh Jamadar Mithubhai respondent 2, and Issak Hasanali Shaikh respondent 3, were tried in the court of the Judicial Magistrate First Class, Bassein, Bombay, in respect of three sets of offences punishable under section 135 read with section 135 (2) of the .
The first charge was the violation of sections 12(1), 23(1) and 23 (d) of the Foreign Exchange Regulation Act, 1947, the second was violation of Exports (Council) Order No. 1 of 1968 E.T.C. dated March 8, 1968; and the third was the contravention of the provisions of Sections 7, 8, 33 and 34 of the .
They were also charged for violation of the Exports (Control) Order No. 1/68 E.T.C. dated March 8, 1968 issued under sections 3 and 4 of the Imports and Exports (Control) Act, 1947 punishable under section 5 of the said 1161 Act.
The gist of the charges was that the respondents attempted to smuggle out of India 43 silver ingots, weighing 1312.410 kgs., worth about Rs. 8 lakhs, in violation of the Foreign Exchange Regulation Act, the Imports & Exports (Control) Act, 1947, and the .
The facts of the case were as follows: On receiving some secret information that silver would be transported in Jeep No. MRC 9930 and Truck No. BMS 796 from Bombay to a coastal place near Bassein, Shri Wagh, Superintendent of Central Excise along with Inspector Dharap and the staff proceeded in two vehicles to keep a watch on the night of September 14, 1968 at Shirsat Naka on the National Highway No. 8, Bombay City.
At about mid night, the aforesaid jeep was seen coming from Bombay followed by a truck.
These two vehicles were proceeding towards Bassein.
The officers followed the truck and the jeep which, after travelling some distance from Shirsat Naka, came to a fork in the road and thereafter, instead of taking the road leading to Bassein, proceeded on the new National Highway leading to Kaman village and Ghodbunder Creek.
Ultimately, the jeep and truck halted near a bridge at Kaman creek whereafter the accused removed some small and heavy bundles from the truck and placed them aside on the ground.
The Customs Officers rushed to the spot and accosted the persons present there.
At the same time, the sound of the engine of a mechanised sea craft from the side of the creek was heard by the officers.
The officers surrounded the vehicles and found four silver ingots near the footpath leading to the creek.
Respondent 1 was the driver and the sole occupant of the jeep, while the other two respondents were the driver and cleaner of the truck.
The officers sent for Kana and Sathe, both residents of Bassein.
In their presence, respondent 1 was questioned about his identity.
He falsely gave his name and address as Mohamad Yusuf s/o Sayyad Ibrahim residing at Kamathipura.
From the personal search of respondent 1, a pistol, knife and currency notes of Rs. 2,133/ were found.
Fifteen silver ingots concealed in a shawl were found in the rear side of the jeep and twenty four silver ingots were found lying under saw dust bags in the truck.
The truck and the jeep together with the accused respondents and the silver ingots were taken to Shirsat Naka where a detailed panchanama was drawn up.
Respondent 1 had no licence for keeping a pistol.
Consequently the matter was reported to Police Station Bassein, for prosecuting the respondent under the Arms Act.
1162 The respondents and the vehicles and the silver ingots were taken to Bombay on September 15, 1968.
The statements of the respondents under section 108 of the were recorded by Shri Wagh, Superintendent of Central Excise.
The Collector, Central Excise, by his order dated May 28, 1969, confiscated the silver ingots.
After obtaining the requisite sanction, the Assistant Collector, Central Excise made a complaint against all the three accused in the court of the Judicial Magistrate, Bassein for trial in respect of the aforesaid offences.
The plea of the accused was of plain denial of the prosecution case.
They stated that they were not aware of the alleged silver and that they had just been employed for carrying the jeep and the truck to another destination.
They alleged that they were driven to the creek by the police.
The trial Magistrate convicted the accused of the aforesaid offences and sentenced accused 1 to two years ' rigorous imprisonment and a fine of Rs. 2,000 and, in default, to suffer further six months ' rigorous imprisonment.
Accused 2 and 3 were to suffer six months ' rigorous imprisonment and to pay a fine of Rs. 500 and, in default, to suffer two months ' rigorous imprisonment.
The accused preferred three appeals in the court of the Additional Sessions Judge, Thana, who, by his common judgment dated September 30, 1973, allowed the appeals and acquitted them on the ground that the facts proved by the prosecution fell short of establishing that the accused had 'attempted ' to export silver in contravention of the law, because the facts proved showed no more than that the accused had only made 'preparations ' for bringing this silver to the creek and "had not yet committed any act amounting to a direct movement towards the commission of the offence".
In his view, until silver was put in the boat for the purpose of taking out of the country with intent to export it, the matter would be merely in the stage of 'preparation ' falling short of an 'attempt ' to export it.
Since 'preparation ' to commit the offence of exporting silver was not punishable under the , he acquitted the accused.
Against this acquittal, the State of Maharashtra carried an appeal to the High Court, which, by its judgment dated November 1, 1973, dismissed the appeal and upheld the acquittal of the accused respondents.
Hence, this appeal.
1163 In the instant case, the trial court and the Sessions Judge con currently held that the following circumstances had been established by the prosecution: (a) The officers (Shri Wagh and party) had received definite information that silver would be carried in a truck and a jeep from Bombay to Bassein for exporting from the country and for this purpose they kept a watch at Shirsat Naka and then followed the jeep and the truck at some distance.
(b) Accused 1 was driving the jeep, while accused 2 was driving the truck and accused 3 was cleaner on it.
(c) Fifteen silver ingots were found concealed in the jeep and 24 silver ingots were found hidden in the truck.
(d) The jeep and the truck were parked near the Kaman creek from where they could be easily loaded in some sea craft.
(e) Four silver ingots from the vehicle had been actually unloaded and were found lying by the side of the road near the foot path leading to the sea.
(f) On being questioned accused 1 gave his false name and address.
(g) The accused were not dealers in silver.
The trial Magistrate further held that just, when the officers surrounded these vehicles and caught the accused, the sound of the engine of a mechanised vessel was heard from the creek.
The first appellate court did not discount this fact, but held that this circumstance did not have any probative value.
The question, therefore, is whether from the facts and circumstances, enumerated above, it could be inferred beyond reasonable doubt that the respondents had attempted to export the silver in contravention of law from India ? At the outset, it may be noted that the Evidence Act does not insist on absolute proof for the simple reason that perfect proof in this imperfect world is seldom to be found.
That is why under Section 3 of the Evidence Act, a fact is said to be 'proved ' when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition 1164 that it exists.
This definition of 'proved ' does not draw any distinction between circumstantial and other evidence.
Thus, if the circumstances listed above establish such a high decree of probability that a prudent man ought to act on the supposition that the appellant was attempting to export silver from India in contravention of the law, that will be sufficient proof of that fact in issue.
Well then, what is an "attempt" ? Kenny in his 'Outlines of Criminal Law ' defined "attempt" to commit a crime as the "last proximate act which a person does towards the commission of an offence, the consummation of the offence being hindered by circumstances beyond his control.
" This definition is too narrow.
What constitutes an "attempt" is a mixed question of law and fact, depending largely on the circumstances of the particular case.
"Attempt" defies a precise and exact definition.
Broadly speaking, all crimes which consist of the commission of affirmative acts are preceded by some covert or overt conduct which may be divided into three stages.
The first stage exists when the culprit first entertains the idea or intention to commit an offence.
In the second stage, he makes preparations to commit it.
The third stage is reached when the culprit takes deliberate overt steps to commit the offence.
Such overt act or step in order to be 'criminal ' need not be the penultimate act towards the commission of the offence.
It is sufficient if such act or acts were deliberately done, and manifest a clear intention to commit the offence aimed, being reasonably proximate to the consummation of the offence.
As pointed out in Abhayanand Mishra vs State of Bihar(1) there is a distinction between 'preparation ' and 'attempt '.
Attempt begins where preparation ends.
In sum, a person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence; and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence.
Now, let us apply the above principles to the facts of the case in hand.
The intention of the accused to export the silver from India by sea was clear from the circumstances enumerated above.
They were taking the silver ingots concealed in the two vehicles under cover of darkness.
They had reached close to the sea shore and had started unloading the silver there near a creek from which the sound of the engine of a sea craft was also heard.
Beyond the stage of preparation, most of the steps necessary in the course of export by 1165 sea, had been taken.
The only step that remained to be taken towards the export of the silver was to load it on a sea craft for moving out of the territorial waters of India.
But for the intervention of the officers of law, the unlawful export of silver would have been consummated.
The calendestine disappearance of the sea craft when the officers intercepted and rounded up the vehicles and the accused at the creek, reinforces the inference that the accused had deliberately attempted to export silver by sea in contravention of law.
It is important to bear in mind that the penal provisions with which we are concerned have been enacted to suppress the evil of smuggling precious metal out of India.
Smuggling is an antisocial activity which adversely affects the public revenues, the earning of foreign exchange, the financial stability and the economy of the country.
A narrow interpretation of the word "attempt" therefore, in these penal provisions which will impair their efficacy as instruments for combating this baneful activity has to be eschewed.
These provisions should be construed in a manner which would suppress the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention.
Thus, construed, the expression "attempt" within the meaning of these penal provisions is wide enough to take in its fold any one or series of acts committed, beyond the stage of preparation in moving the contraband goods deliberately to the place of embarkation, such act or acts being reasonably proximate to the completion of the unlawful export.
The inference arising out of the facts and circumstances established by the prosecution, unerringly pointed to the conclusion, that the accused had committed the offence of attempting to export silver out of India by sea, in contravention of law.
For reasons aforesaid, we are of opinion that the High Court was in error in holding that the circumstances established by the prosecution fell short of constituting the offence of an 'attempt ' to export unlawfully, silver out of India.
We, therefore, allow this appeal, set aside the acquittal of the accused respondents and convict them under Section 135(a) of the read with Section 5 of the Imports and Exports Control Act, 1947 and the Order issued thereunder, and sentence them as under: Accused respondent 1, Mohd. Yakub is sentenced to suffer one year 's rigorous imprisonment with a fine of Rs. 2,000 and, in default, to suffer six months ' further rigorous imprisonment.
Accused respondents 2 and 3, namely, Sheikh Jamadar Mithubhai and Issak Hasanali Shaikh are each sentenced to six months ' rigorous imprisonment 1166 with a fine of Rs. 500 and, in default to suffer two months ' further rigorous imprisonment.
CHINNAPPA REDDY, J. I concur in the conclusion of my brother Sarkaria, J. in whose Judgment the relevant facts have been set out with clarity and particularity.
I wish to add a few paragraphs on the nature of the actus reus to be proved on a charge of an attempt to commit an offence.
The question is what is the difference between preparation and perpetration? An attempt to define 'attempt ' has to be a frustrating exercise.
Nonetheless a search to discover the characteristics of an attempt, if not an apt definition of attempt, has to be made.
In England Parke B described the characteristics of an 'attempt ' in Reg.
vs Eagleton,(1) as follows: "the mere intention to commit a misdemeanor is not criminal.
Some act is required, and we do not think that all acts towards committing a misdemeanor indictable.
Acts remotely leading towards the commission of the offence are not to be considered as attempts to commit but acts immediately connected with it are. . " The dictum of Parke B is considered as the locus classicus on the subject and the test of 'proximity ' suggested by it has been accepted and applied by English Courts, though with occasional but audible murmur about the difficulty in determining whether an act is immediate or remote.
Vide Lord Goddard C.J. in Gardner vs Akeroyed.(2) ". it is sometimes difficult to determine whether an act is immediately or remotely connected with the crime of which it is alleged to be an attempt".
Parke B. himself appeared to have thought that the last possible act before the achievement of the end constituted the attempt.
This was indicated by him in the very case of Reg.
vs Eagleton (supra) where he further observed: ". . . . and if, in this case . . any further step on the part of the defendent had been necessary to obtain payment. . we should have thought that the obtaining credit. . would not have been sufficiently proximate to the obtaining the money.
But, on the statement in this case, no other act on the part of the 1167 defendant would have been required.
It was the last act, depending on himself towards the payment of the money, and therefore it ought to be considered as an attempt".
As a general principle the test of 'the last possible act before the achievement of the end ' would be entirely unacceptable.
If that principle be correct, a person who has cocked his gun at another and is about to pull the trigger but is prevented from doing so by the intervention of someone or something cannot be convicted of attempt to murder.
Another popular formulation of what constitutes 'attempt ' is that of Stephen in his Digest of the Criminal Law where he said: "An attempt to commit a crime is an act done with intent to commit that crime and forming part of a series of acts, which would constitute its actual commission if it were not interrupted.
The point at which such a series of acts begins cannot be defined; but depends upon the circumstances of each particular case".
While the first sentence is an attempt at defining 'attempt ', the second sentence is a confession of inability to define.
The attempt at definition fails precisely at the point where it should be helpful.
See the observations of Parker C.J. in Davey vs Lee(1) and of Prof. Glanville Williams in his essay on 'Police Control of intending criminals ' in 1955 Criminal Law Review.
Another attempt at definition was made by Professor Turner in , and this was substantially reproduced in Archbald 's Criminal Pleading, Evidence and Practice (36th Edn.).
Archbald 's reproduction was quoted with approval in Davey vs Lee(1) and was as follows: '. . . the actus reus necessary to constitute an attempt is complete if the prisoner does an act which is a step towards the commission of a specific crime, which is immediately and not merely remotely connected with the commission of it, and the doing of which cannot reasonably be regarded as having any other purpose than the commission of the specific crime".
We must at once say that it was not noticed in Archbald 's (36th Edn.) nor was it brought to the notice of the Divisional Court which decided Davey vs Lee (supra) that Prof. Turner was himself not satisfied with the definition propounded by him and felt compelled to 1168 modify it, as he thought that to require that the act could not reasonably be regarded as having any other purpose then the commission of the specific crime went too far and it should be sufficient "to show prima facie ' the offender 's intention to commit the crime which he is charged with attempting".
Editing 12th edition of Russell on Crime and 18th edition of Kenny 's Outlines of Criminal Law, Professor Turner explained his modified definition as follows: "It is therefore suggested that a practical test for the actus reus in attempt is that the prosecution must prove that the steps taken by the accused must have reached the point when they themselves clearly indicate that was the end towards which they were directed.
In other words the steps taken must themselves be sufficient to show, prima facie, the offender 's intention to commit the crime which he is charged with attempting.
That there may be abundant other evidence to establish his mens rea (such as a confession) is irrelevant to the question of whether he had done enough to constitute the actus reus".(1) We must say here that we are unable to see any justification for excluding evidence aliunde on the question of mens rea in considering what constitutes the actus reus.
That would be placing the actus reus in too narrow a pigeon hole.
In Haughten vs Smith,(2) Hailsham L. C. quoted Parke B from the Eagleton case (supra) and Lord Parker, C.J. from Davey vs Lee (supra) and proceeded to mention three propositions as emerging from the two definitions: "(1) There is a distinction between the intention to commit a crime and an attempt to commit it. . (2) In addition to the intention, or mens rea, there must be an overt act of such a kind that it is intended to form and does form part of a series of acts which would constitute the actual commission of the offence if it were not interrupted. (3) The act relied on as constituting the attempt must not be an act merely preparatory to commit the completed offence, but must bear a relationship to the completion of the offence referred to in Reg.
vs Eagleton, as being 'proximate ' to the completion of the offence in 1169 Davey vs Lee , 370, as being 'immediately and not merely remotely connected ' with the completed offence. " In Director of Public Prosecutions vs Stonehouse,(1) Lord Diplock and Viscount Dilhorne, appeared to accept the 'proximity ' test of Parke B, while Lord Edmund Davies accepted the statement of Lord Hailsham as to what were the true ingredients of a criminal attempt.
Whatever test was applied, it was held that the facts clearly disclosed and attempt in that case.
In India, while attempts to commit certain specified offences have themselves been made specific offences (e.g. 307, 308 Indian Penal Code etc.), an attempt to commit an offence punishable under the Penal Code, generally, is dealt with under section 511 Indian Penal Code.
But the expression 'attempt ' has not been defined anywhere.
In Abhayanand Mishra vs The State of Bihar,(2) Raghubar Dayal and Subba Rao, JJ., disapproved of the test of 'last act which if uninterrupted and successful would constitute a criminal offence ' and summarised their views as follows: "A person commits the offence of 'attempt to commit a particular offence ' when (i) he intends to commit that particular offence; and (ii) he, having made preparations and with the intention to commit the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence".
In Malkiat Singh & Anr vs State of Punjab,(3) a truck which was carrying paddy, was stopped at Samalkha 32 miles from Delhi and about 15 miles from the Delhi Punjab boundary.
The question was whether the accused were attempting to export paddy from Punjab to Delhi.
It was held that on the facts of the case, the offence of attempt had not been committed.
Ramaswamy.
J., observed: "The test for determining whether the act of the appellants constituted an attempt or preparation is whether the overt acts already done are such that if the offender changes his mind and does not proceed further in its progress, the acts already done would be completely harmless.
In the present case it is quite possible that the appellants may have 1170 been warned that they had no licence to carry the paddy and they may have changed their mind at any place between Samalkha barrier and the Delhi Punjab boundary and not have proceeded further in their journey".
We think that the test propounded by the first sentence should be understood with reference to the facts of the case.
The offence alleged to be contemplated was so far removed from completion in that case that the offender had yet ample time and opportunity to change his mind and proceed no further, his earlier acts being completely harmless.
That was what the Court meant, and the reference to 'the appellants ' in the sentence where the test is propounded makes it clear that the test is propounded with reference to the particular facts of the case and not as a general rule.
Otherwise, in every case where an accused is interrupted at the last minute from completing the offence, he may always say that when he was interrupted he was about to change his mind.
Let me now state the result of the search and research: In order to constitute 'an attempt ', first, there must be an intention to commit a particular offence, second, some act must have been done which would necessarily have to be done towards the commission of the offence, and, third, such act must be 'proximate ' to the intended result.
The measure of proximity is not in relation to time and action but in relation to intention.
In other words, the act must reveal, with reasonable certainty, in conjunction with other facts and circumstances and not necessarily in isolation, an intention, as distinguished from a mere desire or object, to commit the particular offence, though the act by itself may be merely suggestive or indicative of such intention; but, that it must be, that is, it must be indicative or suggestive of the intention.
For instance, in the instant case, had the truck been stopped and searched at the very commencement of the journey or even at Shirsad Naka, the discovery of silver ingots in the truck might at the worst lead to the inference that the accused had prepared or were preparing for the commission of the offence.
It could be said that the accused were transporting or attempting to transport the silver somewhere but it would not necessarily suggest or indicate that the intention was to export silver.
The fact that the truck was driven upto a lonely creek from where the silver could be transferred into a sea faring vessel was suggestive or indicative though not conclusive, that the accused wanted to export the silver.
It might have been open to the accused to plead that the silver was 1171 not to be exported but only to be transported in the course of intercoastal trade.
But, the circumstance that all this was done in a clandestine fashion, at dead of night, revealed, with reasonable certainty, the intention of the accused that the silver was to be exported.
In the result I agree with the order proposed by Sarkaria, J. P.B.R. Appeal allowed.
| The expression "bhatha land" means land which forms part of the bed of a river on which vegetables, melon, cucumber etc.
can be grown during the lean period after the rainy season is over, when the level of the water in the river is quite low.
The cultivation of such land is possible only till the next rainy season as the land gets submerged under the river water.
The occupancy rights over such land cannot ordinarily be granted on a permanent basis as in the case of cultivable lands, in view of the fact that the land gets submerged under the river water every year for 4 5 months.
Till the year 1951 the cultivation rights over 'bhatha lands ' were disposed of by public auction and the successful bidders were treated as lessors of the lands for short periods.
In the year, 1951 the State Government ordered that the leasehold rights over 'bhatha lands ' should be disposed of by selection, the order of priority being (1) bona fide agriculturists who had cultivated the land personally for five years or more, (2) adjacent land holders who had insufficient land for maintenance of their families, (3) cooperative farming societies and (4) priority holders under the Waste Land Rules.
This order was however cancelled and superseded by the Government Resolution dated September 19, 1962 which provided that on the expiry of the then existing leases, not held by cooperative farming societies, bhatha land should be disposed of on the basis of five years ' lease by public auction.
Experience showed that only the moneyed people were able to purchase the leasehold rights at the public auction and persons belonging to Scheduled Castes and Scheduled Tribes and the other weaker sections of society were not even able to participate in such auctions.
Consequently, in the year 1964 leasehold rights over bhatha lands were disposed of on ekasal basis by public auctions.
The question relating to the disposal of leasehold rights over bhatha lands was discussed at the meeting of the District Collectors held in 1965 1966 and in pursuance to the suggestions made at the meeting and after considering all relevant matters the State Government by a Resolution dated 28th December, 1966, directed that the existing procedure for disposal of bhatha lands by auction be discontinued with effect from January 1, 1967 and the disposal of such lands were ordered to be in the following priority: (1) bona fide agriculturists of the village who were holding land less than 5 acres, preference being given to harijans, adivasi and backward class people (2) holders of the land adjoining the 1183 bhatha land holding less than 16 acres and having genuine need of additional land for maintenance of their families; (3) cooperative farming societies of harijans, adivasi and backward classes people, (4) cooperative farming societies consisting of landless labourers or small holders and (5) any of the priority holders under the Waste Land Rules.
In pursuance to the aforesaid Resolution, the Collector by his Order dated July 18, 1967, granted 22 members belonging to Waghari Harijan Community leasehold rights in respect of bhatha lands for a period of 10 years.
The respondents questioned the validity of the Government Resolution dated December 28, 1966 and the Order of the Collector dated July 18, 1967 granting the lease, in their writ petitions.
They alleged that some of them were in possession of portions of the land of which they had been dispossessed by the Order of the Collector by virtue of the eksal tenures created in their favour in the auctions held in or about the year 1964 and that they could not be dispossessed without following the procedure prescribed by section 79(A) read with section 202 of the Bombay Land Revenue Code, 1879.
They also contended that the Government Resolution dated December 28, 1966 and the grants made by the Collector on the basis of the said Resolution were liable to be struck down on the ground that they were violative of Article 14 of the Constitution and that they had been arbitrarily deprived of an opportunity to offer bids at public auctions and to acquire leashold rights.
The State Government contested the petitions on the ground that none of the respondents was in possession of the lands in question on the date of the writ petitions and that some of them who continued to remain in possession of certain portions of the land after the expiry of the eksal lease were dispossessed in accordance with law and that the lands have been handed over to the grantees as per the Kabza receipts.
The Resolution dated December 28, 1966, was passed in order to grant lease in respect of bhatha lands in favour of the landless persons or persons having small extent of lands or persons belonging to Scheduled Castes, Scheduled Tribes and backward classes and members of cooperative societies at reasonable rent without being put to the necessity of offering bids at public auctions, where only moneyed persons could become successful bidders.
The High Court quashed the Resolution on two grounds: (1) That the act of the State Government in passing the Resolution amounted to a fraud on the Statute as the power of the State under the Code which was a taxation measure had been utilized for a collateral purpose of achieving a welfare scheme and (2) that the Resolution was violative of Article 14 of the Constitution as there was no rational nexus between the object to be achieved by the Code viz. realisation of land revenue and the classification of persons eligible for the grant of lease hold rights in respect of bhatha lands into several groups.
It further directed the State Government not to take into consideration the Government 's circular issued pursuant to the impugned Resolution while considering the question of renewal of leases or disposal of bhatha lands and not to dispossess the writ petitioners except in due course of law.
Allowing the appeals, ^ HELD: 1(i) The Preamble of the Code provides that it had been passed as it was found expedient to consolidate and amend the law relating to Revenue 1184 Officers and to the assessment and recovery of Land Revenue and to other matters connected with Land Revenue Administration.
[1193B].
(ii) The other provisions of the Code and the Rules made thereunder show that it is open to the Collector to dispose of unoccupied lands belonging to the Government either for cultivation or for any other purpose in favour of individuals or aggregate of individuals either free of charge or at an upset price to be fixed by him or by public auction.
A review of the several Government orders passed under the Code shows that lands belonging to Government had been set apart free of charge for several public purposes such as free pasturage, burial grounds, roads, religious institutions, dhobies ' ghats, potters ' grounds, threshing floors etc.
Land revenue was remitted when there were drought conditions.
Forfeited holdings were often given back to defaulters who had not paid land revenue once again, on payment of arrears out of compassion.
Tagavi loans were given by Government to occupants to improve lands.
The dominant purpose of the Code, therefore appears to be public welfare, even though land revenue which was recoverable under the Code constituted an important source of revenue of the State Government.
[1196A E] (iii) After India became independent, land reform measures had to be introduced by the States in India to prevent concentration of land in a few hands and to impose ceiling on the extent of land that could be held by an individual or a family, to take possession of land from individuals or families which was in excess of the ceiling so imposed and to distribute such excess land amongst persons belonging to Scheduled Castes, Scheduled Tribes and other weaker sections of society.
All these laws were made in order to implement the Directive Principles of State Policy contained in Articles 38, 39 and 46 of the constitution by strengthening agrarian economy.
Never before was there a greater need as during the post Constitution period for administering land revenue laws in an equitable manner so that the economic interests of the weaker sections of the society and in particular of members belonging to Scheduled Castes and Scheduled Tribes are protected and promoted.
[1196F H] (iv) There is no provision in the Code or the Rules made thereunder which prohibits disposal of occupancy rights or leasehold rights in respect of unoccupied lands in any manner other than public auction.
[1197A] (v) The conclusion reached by the High Court that the basic scheme of the Code was the realization of land revenue by disposing of unoccupied lands by public auction alone appears to be baseless.
[1197B] (vi) The finding of the High Court that the impugned Resolution which provides for the disposal of bhabha lands amongst bona fide agriculturists, harijans, adivasis and backward class people and other persons mentioned therein without resorting to public auction but by having recourse to the procedure set out in it is contrary to the latter and the spirit of the Code is set aside.
[1197C] 2(i) The Resolution is designed to bring about distribution of agricultural lands as best to subserve the common good thus eliminating concentration of wealth and means of production to the common detriment.
It helps persons, who are in need of lands for their bare maintenance and who have otherwise no chance of getting them, to acquire lands at a low rate of rent.
[1199D] 1185 (ii) The classification made in the impugned Resolution of persons or cooperative societies who are eligible to secure grants of leasehold rights, bears a reasonable relation to the object with which the Code is enacted.
It cannot be characterised as arbitrary.
There is no infirmity in the above classification.
The Resolution aims at bringing about social and economic justice and assists people who are not strong enough to secure leasehold rights at a public auction for purposes of cultivation.
The leases to be granted are not for any unlimited period.
[1199E] (iii) The High Court was in error in holding that the Resolution was violative of Article 14 of the Constitution.
[1199F] 3.
The High Court did not record any firm finding on the question of possession of any part of the land by any of the writ petitioners.
The direction issued by the High Court to the State Government and the Revenue authorities not to dispossess the writ petitions except in due course of law therefore becomes unsustainable.
[1191H]
|
: Criminal Appeal No. 310 of 1971.
(Appeal by Special Leave from the Judgment and Order dated 23 4 1971 of the Allahabad High Court in Criminal Appeal No. 168/ 69 with Criminal Appln.
No. 986/69).
Frank Anthony and U.P. Singh, for the Appellant.
O.P. Rana, for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Some exceptions disprove the rule.
Cases are legion where the proverbial proposition of litiga tive finality at the High Court level on findings of fact has been affirmed by this Court, but the exceptions which prove the.
rule are also weB established.
We must at the outset state that this case does not fit into the conventional legal mould but, nevertheless, pos sesses such strange features that our 'ultimate ' power may legitimately come into play.
690 A petty store keeper cum cashier in a rural block devel opment office (in the district of Shahjehanpur) was charged.
with misappropriation of several sums adding up to a little over Rs. 5,000/ .
The charges having been denied and the real culprit having been pointed out as the boss of the block development office, the Sessions Court received evi dence on both sides, found the testimony of the Block Development Officer (BDO, acronymically) 'completely false and unbelievable ' in regard to many of the items of embez zlement and made critical observations about his culpability in respect of many of the malversations.
We may have something to say.
about the not unusual phenomenon of the 'small fry getting caught, and the big shark breaking through the net ' in economic offences where public money is handled by public servants.
For the nonce we may content ourselves with the statement that the little official in his twenties which the accused was was acquitted of all but one charge and the misappropriation of Rs. 5,194.82 dwindled into a solitary fugitive item of Rs. 50/ for which he was punished with imprisonment for one year a fine of Rs. 300/ .
The conviction was confirmed but the sentence was reduced by the High Court.
The aggrieved appellant urges before us that the soli tary surviving item of misappropriation held proved concur rently, had, in fact, been vitiated in the process by funda mental flaws.
We will proceed briefly to narrate the epi sode and examine the tenability of the extraordinary fea tures leading to the exculpatory sequel.
The agrestic immensity of Indian backwardness is sought to be banished by developmental activities through block level infrastructures.
Jaitipur Block is one such and it has a nucleus of small officials and some rural development assistants, the hegemony being vested in the BDO.
The dramaris personae here are the accused, the stock clerk cure cashier, the BDO (PW 8) and the Panchayat Secretary (PW 7) whose magnificent salary is Rs. 50/ per mensem.
The prosecution narrative runs long but can be short if we abandon the plurality of charges and limit the facts to.
the single item of Rs. 50/ .
In skeletal brevity, there was a,Block Office in Jaitipur where a small staff worked on low salaries to stimulate rural development.
The accused was cashier and used to be entrusted in such capaci ty with sums, large and small.
The case, as originally projected, was that Rs. 5,194.82 was committed to his custo dy and the whole sum was siphoned off into his own pocket by various acts of criminal breach of trust.
Admittedly it was the duty of the accused cashier to maintain the cash book and deal with the monies.
Equally clear is the fact that the head of the office, the BDO, was duty bound 'to tally and check the dally entries of the cash book with the rele vant vouchers, to affix his signature. after 'checking the total at the end of the day '.
The block office has, on its rolls, Panchayat Secre taries drawing small salaries.
One of them is PW 7, on a monthly pay of Rs. 50/ .
Another unfortunate feature of these.
offices, as disclosed in the evidence, is that even these petty emoluments are paid irregularly pro 691 ducing both discontent and inclination for manipulation.
That public offices should be so run is not too complimen tary.
Anyway, PW 7 received his pay for December 1964 on February 22, 1965 and his pay for the later month of January 1965 he drew a few days earlier on February 15, 1965 (vide Exhibits Ka 26 and Ka 29).
These oddities in disburse ments led to the plausible plea by Asiam, the accused, that P.W. 7 not having received his pittance for the month of December 1964 even after January had come and gone, pleaded his dire need for money and received Rs. 50/ as pay for the month of January 1965 and signed a separated voucher bearing that date, viz., February I, 1965.
It is conceivable that a little man with a little pay packet, which is tantalizing ly postponed, pressurizes the cashier to pay him the small sum signing a voucher and it need not surprise us if the cashier gives in to compassion and makes the payment.
This is precisely the case of the accused.
To shore up this plea, he points out a regular entry in the cash register against the date February 1, 1965 of a payment of Rs. 50/ as salary for the month of January 1965 to P.W. 7.
Rein forcement is received from the further fact that this spe cific entry of payment the falsification of which is the foundation.
for the charge of misappropriation of Rs. 50/ is ticked and 'initialled by the BDO P.W. 8.
We have earlier referred to the practice and the obligation of this officer to tally and check the daily entries in the cash book with the relevant vouchers and then to affix the signature after checking the total at the end of, day.
Moreover he had the special responsibility, as the most responsible officer on the staff on his own showing, 'to keep the cash balance found at the end of every day in the cash chest register '.
He does not do daily physical verification of the cash but does it on a monthly basis and he keeps the key of the same, although another key is left with the cashier.
The accused 's contention that he paid the salary of Rs. 50/ to P.W. 7 on February 1, 1965 supported though it is by an entry in the Books duly initialled by the BDO presuma bly after verification with the corresponding voucher has been rejected by the Courts without advertence to these spinal circumstances by the superficial plea that P.W. 7 is seen to have been paid the salary for December 1964 on February 22, 1965 with a regular entry and a stamped voucher.
P.W. 7, when examined, denied the earlier payment on February 1, with a touch of dubious candour and owned up the payment for December supported by the stamped voucher on February 22, 1965.
A streak of mystique generates doubt in P.W. 7 's testimony because in cross examination he says: '1 do not remember as such that along with other officials the cashier would have given me the salary for the month of January 1965 for two times by mistake '.
In the next breath he corrects himself to say that he had not been paid twice.
On the strength of these materials a conviction of guilt has been rendered by both the Courts and.
be the appreciation right or wrong, we, as the final court should have held back ordinarily from temptation for reappraisal, vehement argu ment notwithstanding.
But certain grave factors, condu cive to miscarriage of justice have bulked forward to induce us to make an exception, which we will presently expatiate 692 There were nine items of misappropriation originally imputed to the accused.
All, but one, remained unproven and the guilt is now fixed on one of the inconsiderable items.
Not that the littlest sum of public money can be taken on privately with impunity but that the perspective is coloured somewhat by the substantial failure of the prosecution to make out its case regarding all the major items.
More disquieting is the fact that the Single surviving charge stands or falls on the veracity or unveracity of a solitary witness appreciated in the light of the conspectus of circumstances.
What are those circumstances ? The BDO, charged as he is with serious responsibilities including guardant functions over the finances of the institution, has sworn that he checks the daily entries in the cash book with the relevant vouchers and affixes his signature, checks the total at the end of the day and again affixes his signature.
It is a pregnant piece of evidence that there is a specific entry on February 1, 1965 in the cash book that a payment of Rs. 50/ by way of salary to P.W. 7 has been made.
The BDO has signed against the entry which means, in the ordinary course, he has verified the payment with reference to the relevant voucher.
If this be a fact, the accused has proba bly paid the salary, made the necessary entry, shown it together with the relevant, voucher to the BDO, got his signature, totalled up the figures correctly and secured the BDO 's signature over again.
The exculpatory impact of this testimony is sufficient, according to ordinary canons of criminal jurisprudence to relieve the accused of culpa bility since reasonable doubt is generated.
The sensi ble scepticism about guilt which springs from the BDO 's signature against the relevant entry is heightened by the fact that the Finance Handbook referred to by the High Court in its judgment states that it is the duty of the drawing and disbursing officer to check each and every entry of receipt and expenditure recorded in the cash book and peri odically to check physically the cash balances.
The BDO, according to the High Court, has made evasive statements to suppress certain facts and 'spoken some apparent ties '.
Startlingly enough, the Sessions Court has recorded P.W. 8, the BDO, as false and unbelievable in regard to certain other charges and gone to the further extent of concluding that four entries figuring as charges against the accused had been really made to the BDO himself 'who probably embezzled these amounts '.
The consequential acquittal of the accused on these four charges has not been disturbed.
In sum, therefore, the conclusion is irresistible that the BDO, the top officer in full financial control, had behaved irresponsibly or delinquently with regard to the funds of the block office, had been described as too mendacious to be depended and had convicted himself, of gross neglect of public duty in regard to the checking of the cash register, out of his own mouth.
If we are to attach there is no reason for a Court not to do so weight to the contemperane ous entry in the cash register coupled with the signature of the BDO the same day, as against his ipse dixit later, the accused is entitled to the benefit of reasona ble doubt.
There is likely to have been a separate voucher evidencing the payment of Rs. 50/ which is the subject of the defalcation because the BDO is not likely to have at tested the entry of that payment without checking it up with the corresponding receipt.
693 Two circumstances fall to be mentioned before the probative balance sheet can be struck.
The entry of Rs. 50/ on February 1, 1965 is seen scored off.
Who did it ? Can we guess in the dark ? Nothing on record suggests that the accused alone could have done it There is much credibil ity in the theory that with the connivance of the BDO and the clerks petty sums are quietly abstracted from the public exchequer, make believe entries are made and attest ing signatures appended by the BDO and, if the peril of detection by higher officers is apprehended, scorings, additions, alterations and the like are made.
It is common case that in the cash register there are many such cross ings, cuttings, scorings and like tamperings.
Many scape graces were perhaps party to these processes but one scape goat cannot, for that reason, get convicted in the criminal court.
In this context it is pertinent to remember that the District Accountant, after a fuller examination of the books of the block offices, has stated that the several embezzle ments have been facilitated by the laxity of the BDO who should be directed to make good the loss.
A further recom mendation by him to proceed departmentally as against the BDO and as against the Cashier is also found in the report.
Whether action had been taken against the BDO, the State 's counsel was not able to tell us.
The sole lip service to the criminality imputed is lent by PW 7.
Did he receive his salary of Rs. 50/ twice over ? Undoubtedly he was interested in denying it.
Doubt hardly exists of the fact that he got his small December salary of Rs. 50/ only in February next.
Far more likely that in such a situation he would have pressed for the payment of Rs. 50/ to be adjusted later.
Likewise, his initial ambi guity in plainly denying that he had been paid twice en hances this suspicion.
When the cash affairs of the office is in a mess, when the Chief is guilty of dereliction, when the clerks are receiving petty salaries at irregular intervals, the somewhat tainted testimony of PW 7 is fax too slender a string to hang the guilt upon, pitted as it is against the cash register entry by the BDO, apparently after consulting the payment voucher.
The accused was suspended promptly and therefore this voucher, if it did exist, must have been in the office and its non production in court is not a matter for drawing an inference against the ac cused.
We have made this unusual probative survey of the evi dence for the sole reason that the bona fides of the prose cution, leaving off bigger and going at the smaller, mixing false testimony with true seriously suspect and holding on to the conviction of the accused on no evidence, which a reasonable person reasonably instructed in the law will rely upon, is neither just nor legal.
The accused, at the time of the offence, was in his early twenties probably a neophyte or new entrant into a little racket.
Doubts there are about his complicity but that a man may be guilty is different from saying that he must be guilty.
The dividing line between the two is 694 sometimes fine, but always real.
There is undoubtedly collective.
guilt in the conjoint delinquency in the running of the block development office.
Public affairs and public funds, especially on the developmental front, require far more integrity, orderliness, activism and financial pru dence.
Its absence we regret, but the specific guilt of the particular accused not having been proved, as mandated by the law, results in his acquittal.
We accordingly allow the appeal.
The guilt finding function is over, but judges have accountability to the country to the extent matters falling within their professional examination deserve sounding the tocsin.
With this alibi we make a few observations.
The popular art of helping oneself to public money, in little bits or large slices, is an official pathology whose pernicious spell has proliferated with the considerable expansion in institutions of public welfare and expenditure for rural development.
From Kautilya 's Arthashastra to Gunnar Myrdal 's Asian Drama, the vice is writ large and the demoralising kink in the projects for criminal prosecution to eradicate these vices in public offices is that more often than not the bigger engineer of these anti social schemes figures as prosecuting witness and the smaller men in the package deal are put up as sacrificial goats.
The head escapes, the hand is chased down and, when the Court convicts, cynicism, instead of censure, is the unintended public response.
In a social system of the high and low, where the wheels of punitive processes are steered by the former, laws equal in the face quirk unequal at heart.
Crack down Crime Control itself takes its alignment from the social philosophy of the agencies of public power.
The present ease is a small symptom of a spread out disease and the State, in its highest echelons, determined to down this rocket of economic offences must launch massive, quick acting, broad spectrum prosecutorial remedies, regardless of personal positions, and leisurely procedural apparatuses, if high social dividends are to be drawn.
The mystique of ,making the dubious officer the veracity vendor in the witness box and the collaborating minion the dock dweller, is suspected as intrigue to Shelter the upper berth culprit.
Caesar 's wife, where public interest is at stake, must be above suspicion, if prosecutorial credibility is to be popular purchase.
If the nation, poised for socialism, must zero in on public office offences, what we have observed must not and surely, will not slumber as obiter sermons but serve as catalysts to crash strategies on white collar crimes.
In a developing country of scarce resources, husbanding public funds has a special onerousness.
Gross negligence, even absent mens rea, in handling the nation 's assets by those in office must be visited with criminal liability as it in flicts double injury on that voiceless, faceless, woe stricken have not community which is aplenty.
Public power, under the penal Law, must be saddled with 695 higher degree of care, if Indian jurisdiction is to fulfil its social mission through developmental legislation.
Had such a law existed, many superior officers routinely signing away huge sums or large contracts could have been alterted into better standards by potential penal consequence.
The present case is an instance in point and our parliamen tarians we hope, will harken.
M.R. Appeal allowed.
| The appellant, a cashier in a rural block development office of Shahjahanpur district, was convicted for misappro priating public money.
Both the courts concurrently found that he had pocketed the sum which he claimed to have paid the Panchayat Secretary as salary.
The appellant contended that the charge against him was falsified by the voucher and regular entry of the cash register regarding the above payment, which had been ticked and initialled by the Block Development Officer, and pro duced in evidence.
Allowing the appeal, the Court HELD: (1) The proposition of litigative finality at the High Court level on findings of fact has been affirmed by this Court, but the exceptions which prove the rule are also well established.
A conviction of guilt has been rendered by both the Courts, but certain grave factors conducive to miscarriage of justice, induce us to make an exception.
The accused is entitled to the benefit of reasonable doubt owing to the contemporaneous entry in the cash register coupled with the signature of the B.D.O. the same day, as against ipsi dixit later.
[689 G, 691 H, 692 G H] (2) Our observations must serve as catalysts to crash strategies on white collar crimes.
Gross negligence, even absent mens rea, in handling public funds by those in office must hold penal consequences as it inflicts double injury on the poor masses.
[694 G H]
|
N: Criminal Appeal No. 16 of 1950.
Appeal by special leave from the judgment and order dated 8th May, 1947, of the High Court of Judicature at Allahabad (Sankar Saran and Akbar Hussain JJ.) in Crimi nal Appeal No. 80 of 1946.
S.P. Sinha (G.C. Mathur, with him), for the appellant.
K.B. Asthana, for the respondent.
December 20.
The Judgment of the Court was deliv ered by FAZL ALl J.
This is an appeal against a judgment of the High Court of Judicature at Allahabad reversing the decision of the Sessions Judge of Aligarh in a criminal case.
The appellants were tried by the Sessions Judge on charges under section 302 read with section 149, section 148, sections 325 and 326 read with section 149, and section 201 of the Indian Penal Code, but were acquitted.
On appeal by the State Government, the High Court reversed the Sessions Judge 's decision, and convicted the appellants and sentenced them to transportation for life under section 302 read with section 149, to five years ' rigorous imprisonment under sections 325 and 326 read with section 149, and to two years ' rigorous imprisonment under section 147 of the Indian Penal Code, all the sentences being made to run concurrently.
The appellants thereafter applied to the Privy Council for special leave, which was granted on the 28th October, 1947.
The facts which were put before the court on behalf of the prosecution may be briefly stated as follows.
There is a plot No. 518 in Nagaria Patti Chaharum, village Shahgarh in the district of Aligarh which is about 30 bighas in area and is known as the "teesa" field.
This plot was the "sir" land of several landlords including Mst.
Bhagwati Kuer and Ratan Singh and had been let out to certain tenants.
In 1944, Mst.
Bhagwati Kuer, Ratan Singh and their co sharers filed a suit for the ejectment of the tenants, and the 195 suit was decreed.
On the 7th June, 1945, possession over the plot was delivered by the Amin to Surajpal Singh, the first appellant, who was the mukhtar i Am of Mst.
Bhagwati Kuer.
It was contended on behalf of Surajpal Singh that he took possession on behalf of all the co sharers, but certain statements made by Ratan Singh in his evidence do not sup port this contention.
However that may be, it appears that on the 17th June, 1945, Ratan Singh reported to the police that he had sent his labourers to irrigate the "teesa" field, and while they were irrigating it Surajpal Singh and certain other persons came and tried to stop the irrigation and damaged the ploughs of Ratan Singh.
On the 18th June, at about 7 A.M., the occurrence which is the subject matter of the present trial took place.
The prosecution version of the occurrence was that while Ratan Singh 's labourers were working in the field under the supervision of one Behari Singh, the appellants with many other persons came armed with guns, spears and lathis, and some of the members of the appellants ' party entered the field, cut off the nosestrings of the bullocks and abused and assaulted the labourers, most of whom ran away.
Thereupon, Deva Sukh, who was there to supply water to the labourers, protested and was beaten with lathis.
At that point of time, Behari Singh and 10 to 15 persons came and fight took place between the parties.
During the fight, one of the accused persons, Rajendra Singh, a young lad, fired his gun twice in the air, and thereafter Surajpal Singh took the gun from him and fired two shots hitting Nawab Mewati, who died instantaneously, and Behari Singh, who died later in the day.
Three other persons, Zorawar, Rajpal and Lakhan also received gun shot injuries.
Sometime later, Surajpal Singh along with the other three appellants came to the spot and removed the dead body of Nawab in a cart.
The body was thrown into a river and was recovered on the 20th June, 1945.
After investiga tion 25 persons including the appellants were sent up for trial.
After hearing the evidence in the case, the Ses sions Judge delivered judgment on the 20th February, 1946.
196 He held that the "teesa" field was in the possession of Surajpal Singh, that Behari Singh and Ratan Singh 's men were aggressors and wished to take forcible possession of the field, that when resisted they had attacked the appellants ' party, that the person who fired the gun had done so in self defence and not with a view to killing Behari Singh and Nawab Mewati, and that the evidence adduced by the prosecu tion was so unsatisfactory that it was unsafe to convict the accused upon it.
As to the charge of concealing evidence of the offence of murder by the removal of the dead body of Nawab, the Sessions Judge expressed the opinion that in order to convict a person on that charge it must be proved that the offence, the evidence of which the accused is alleged to have caused to disappear had actually been com mitted, but since in the present case the charge of murder was not proved the accused could not be convicted for having caused disappearance of evidence connected with it.
The Judge also held that the evidence being unreliable the charge under section 201 of the Indian Penal Code had not been established beyond reasonable doubt.
The High Court delivered its judgment on the 8th May, 1947, allowing the appeal of the State Government.
Shortly stated, the conclusion arrived at by the High Court was that Ratan Singh had as much right to the possession of the field as Bhagwati Kuer, that both parties were trying to take exclusive possession of the field, that both parties were prepared for all contingencies to vindicate and enforce their rights, and hence the question of possession was wholly immaterial and no right of private defence could be successfully pleaded by the appellants.
A perusal of the two judgments before us shows that while the Sessions Judge took great pains to discuss all the important aspects of the case and to record his opinion on every material point, the learned Judges of the High Court have reversed his decision without displacing the very substantial reasons given by him in support of his conclu sion.
The difference in the treatment of the case by the two courts below 197 is particularly noticeable in the manner in which they have dealt with the prosecution evidence.
We find that while the Sessions Judge took up the evidence of each witness and recorded his finding with regard to his credibility after discussing the minutest details of the evidence, all that the learned Judges of the High Court have to say about the prosecution evidence as a whole is as follows : "In Prag Dat 's case their Lordships observed: usual in cases of this kind the police have found it difficult to secure independent testimony of what did take place.
Those of the villagers who were present and looking on would probably by sympathy and bias be so attached to one or other of the disputing parties that it would be hopeless to get disinterested and reliable evidence from them. ' This difficulty the police find in most riot cases and this case is not free from it.
But as in Prag Dat 's case, in this case there are four witnesses, viz., Deo Sukh, Rori Singh, Ram Singh, and Ratan Singh, who could be characte rised as independent witnesses and they support the case for the prosecution, in the main.
In our judgment their testimo ny is on the whole worthy of credence and sufficient to justify the conviction of the respondents.
" In view of the summary treatment of the evidence by the High Court, we had to read the evidence adduced in the case with great care, and what we find is that the four witness es, whose evidence has been accepted by the High Court, are just the persons against whom very serious criticism was offered by the Sessions Judge.
Of these witnesses, Ratan Singh not being an eye witness may be ruled out.
As to the remaining witnesses, we are on the whole inclined to agree with the view expressed by the Sessions Judge.
According to the Sessions Judge, the manner in which Deva Sukh was brought into the picture and the circumstances attendant on his evidence, furnish strong reasons.
for rejecting the prosecution version.
What has been held is that the whole case of the prosecution 26 198 that Deva Sukh had received injuries in the course of the alleged occurrence was false and his injuries "were made up so as to create evidence of private defence" to be utilized by the prosecution to meet the charge of having caused injuries to the members of the appellants ' party.
It has been established that at least four persons on the side of the accused had received injuries.
Mahindarpal had received no less than 16 injuries, and his condition was serious for some time.
Karan Singh had 12 injuries, one of which was grievous.
Hari Singh had received 7 injuries including a grievous injury, and Nikka Singh also was injured, his injury having been noticed by the investigating sub inspec tor.
In the prosecution evidence, it was stated that many of the accused persons were armed with lathis and had used them, and it would be strange if it was not proved that any of the persons on their side had any injuries attributable to lathis.
It has been established that the four injured persons of Ratan Singh 's party, viz., Rajpal Singh, Lakhan Singh, Behari Singh and Zorawar Singh, had only gun shot wounds.
A serious question which arises in this case is at what stage the gun was used, and whether it was used in self defence after the members of the appellants ' party were assaulted with lathis or it was used before they were as saulted.
The prosecution witnesses had to admit that at first a gun was fired twice in the air and then the actual firing took place.
This version of the firing lends support to the defence story that the gun was fired in self defence when Ratan Singh 's men attacked members of the accused 's party.
The Sessions Judge has expressed the view that in order to meet the defence case the prosecution introduced the story of Deva Sukh having been assaulted with a lathi in the first instance so as to make the appellants ' party the aggressors, it being the prosecution case that Behari Singh and his men had used lathis in order to defend themselves.
In order to resolve the conflict in the cases of the parties and to get at the true picture, the 199 Sessions Judge went very minutely into the question as to whether there was trustworthy evidence about Deva Sukh having received any injury at all in the occurrence.
It seems to us that there is a formidable array of circum stances to support the conclusion ultimately reached by the Sessions Judge.
It appears that in the first information report there is no reference to Deva Sukh or to the injuries said to have been received by him.
The Sessions Judge has pointed out that there was a considerable interval of time between the occurrence and the lodging of the first informa tion report, and therefore it is surprising that the most important incident of the occurrence and the name of the most important witness was omitted in the report.
Again, no reference was made to Deva Sukh or to his injuries in the dying declaration of Behari Singh which was recorded by one Dr. Shankar Deo, and also in that of Lakhan Singh.
The Sessions Judge has further pointed out that the prosecution witnesses, Chokha, Prempal, Cheta and Gangola Singh, who were examined by the investigating officer on the 18th June, did not also refer to Deva Sukh.
The investigating sub inspector was informed of the injuries on Deva Sukh and his presence at the time of the occurrence for the first time on the 19th June, 1945, and Deva Sukh 's explanation for not appearing before him at the earliest opportunity was that he was frightened and had concealed himself in his house for about two days and had directed his relations not to inform the police of his presence.
He also stated that on his arrival in his house after the occurrence he did not inform his relations of what had happened.
Some of these matters might have been overlooked if there had been convincing evidence about his having actually received injuries, but we are satisfied that such evidence as is before us is extreme ly unsatisfactory and suspicious and we entertain grave doubts as to whether Deva Sukh received any injuries at all.
Dr. Shanker Deo, who examined Deva Sukh, is a retired Sub Assistant Surgeon practising in Kauiraganj, which is not far from village Shahgarh.
200 He admits that he had known Ratan Singh since his childhood, and when he was a child he used to be taught at the house of Ratan Singh by a teacher employed by Ratan Singh 's uncle.
He has stated that Deva Sukh had two bruises across the back of the middle of the left forearm, and one of them was grievous since the left ulna was fractured.
He further says that at the time of examination he did charge fees from Deva Sukh, that he was brought to him three days after the other injured persons, that when the latter group of persons came to him none of them told him that there was one more injured person to be examined, and that Deva Sukh was brought to him by Ratan Singh 's servant.
There are unsatisfactory fea tures in the evidence of this doctor relating to other matters which need not be referred to, but what is somewhat remarkable is that though there is a District Board Hospital at Jalali about four miles from Kauirganj, Deva Sukh did not obtain an injury certificate from the doctor in charge of that hospital.
Deva Sukh says that he did go to that hospi tal to have his injuries attended to, but there is no evi dence to corroborate this.
These facts as well as a number of other facts relied upon by the Sessions Judge do go to support his theory, and once it is held that the prosecution has to rely on fabricated evidence, it throws doubts on the entire case.
From the record, it appears that Surajpal Singh was the person who had been taking an active interest in the eject ment suit, and he was admittedly spending money.
Ratan Singh says that he had also paid money to Surajpal Singh towards the expenditure, but this is not probable because he and Surajpal had been on bad terms.
It is admitted that Suraj pal is the person to whom the Amin gave possession of the land, but in spite of this fact, Ratan Singh 's men started operations on the land ignoring Bhagwati Kuer, which Ratan Singh had no right to do, even assuming that the land was joint property.
If Behari Singh and the other men sent by Ratan Singh were trying to take exclusive possession of the land and had started 201 operations thereon, Surajpal Singh had every right to pro test, and if his men were beaten first, of which there are strong indications in the case, he was entitled ' to repel the attack in exercise of the right of private defence.
That Ratan Singh had made ample preparations through Behari Singh is quite clear.
Admittedly, there were a number of persons armed with lathis present at the scene on his behalf including outsiders like Nawab Mewati, who is said to have been a well known fighter, Zorawar and others.
As regards the remaining two witnesses, to whom the High Court has made reference, viz., Rori Singh and Pransukh, it seems to us that the High Court has overlooked the comments made by the Sessions Judge upon their evidence, some of which are of considerable force.
What has impressed us is that they were not independent witnesses and were not mentioned in the first information report as witnesses to the occurrence, and they were examined by the sub inspector as late as the 20th and 21st June, 1945.
After reading the two judgments, we see no reason why the opinion of the Sessions Judge regarding these witnesses should not receive the weight which should normally be attached to that of the trial court.
It is well established that in an appeal under section 417 of the Criminal Procedure Code, the High Court has full power to review the evidence upon which the order of acquit tal was founded, but it is equally well settled that the presumption of innocence of the accused is further rein forced by his acquittal by the trial court, and the findings of the trial court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very substantial and compelling reasons.
On the whole, we are inclined to hold that the Sessions Judge had taken a reasonable view of the facts of the case, and in our opinion there were no good reasons for reversing that view.
The assessors with whose aid the trial was held, were unanimously of the opinion that the accused were not guilty, and 202 though 25 persons were placed on trial on identical evi dence, the State Government preferred an appeal only against 5 of them on the sole ground that the acquittal was against the weight of evidence on the record.
In the result, we allow the appeal, set aside the con viction and sentences of the appellants and acquit them of all the charges.
Appeal allowed.
| It is well settled that in an appeal under section 417 of the Criminal Procedure Code, the High Court has full power to review the evidence upon which the order of acquittal was founded.
But it is equally well settled that the presumption of innocence of the accused is further reinforced by his acquittal by the trial Court and the findings of the trial Court which had the advantage of seeing the witnesses and hearing their evidence can be reversed only for very sub stantial and compelling reasons.
|
tion Nos.
1128 and 1204 of 1988, 1012 (Under Article 32 of the Constitution of India).
Mrs. section Ramachandran for the Petitioners.
V.C. Mahajan, Ms. A. Subhashini and Ms. Kusum Chaudhary for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Each of these two writ petitions under Article 32 of the Constitution is by the widow of the respective pensioners.
Since family pension under the Rules has not been given to them, they have asked for a mandamus to the respondent Union of India to grant such pension in terms of the pension scheme applicable to the category to which the husbands of the respective petitioners belonged.
Petitioner Smt.
Bhagwanti is the widow of an ex Subedar of the Indian Army.
Her husband after serving for 18 years retired on 3.8.1947 and was given pension.
In 1955, his wife died and in 1965 he was married to the petitioner.
The Subedar died in September, 1985 in an accident.
Petitioner who has two minor children applied for family pension and the same has not been granted.
The petitioner in the connected writ petition is the wife of a retired Railway employee.
Her husband took volun tary retirement at the age of 44 in November, 1979.
Peti tioner got married to her husband in 1981 and has a daughter born in 1984 out of the said wedlock.
Petitioner 's husband died in 1986.
The petitioner applied for family pension but by a letter dated 3rd of August, 1988, her application was rejected by saying: 'It has not been found possible to include wife of a Government servant who had married after retirement in the definition of 'family ' for grant of family pension '.
Counter affidavits have been filed in both the writ petitions.
In the first case, in the return made by Captain N.K. Vishwakarma from the Office of Records AMC, Lucknow in paragraph A, it has been stated that pension has been re fused as petitioner 's marriage was after retirement of the Subedar.
In the connected matter, the Senior Personnel Manager of the South Central Railway has placed reliance on the definition of 'family ' occurring in Rule 54(14)(b) of the Central Civil Services (Pension) Rules, 1972.
As far as relevant, the definition reads thus: 1013 "(b). 'Family ' in relation to a Government servant means (i) wife in the case of a male Gov ernment servant, Or husband in the case of a female Government servant, provided the mar riage took place before retirement of the Government servant. . . . . . . . . . (ii) son who has not attained the age of twenty one years and unmarried daughter who has not attained the age of thirty years, including such son and daughter adopted legal ly before retirement but shall not include son or daughter born after retirement.
" The common stand of the Union of India in the two cases, therefore, is that family pension would not be admissible to spouses who get married after the retirement of the Govern ment servant, nor to children born after such retirement.
The only question for consideration in these two writ petitions therefore, has two facets: (i) whether the spouse man or woman, as the case may be married after the retirement of the concerned Government servant can be kept out of the definition so as to deprive him from the benefit of the family pension, and (ii) whether off springs born after retirement are entitled to benefits of such pension.
In D.S. Nakara & Ors.
vs Union of India, ; , a Constitution Bench of this Court at p. 185 of the Reports observed: " . . pension is not only compensation for loyal service rendered in the past, but pension also has a broader significance, in that it is a measure of socio economic justice which inheres economic security in the fall of life when physical and mental prowess is ebbing corresponding to aging process and, therefore, one is required to fall back on savings.
One such saving in kind is when you gave your best in the hey day of life to your employer, in days of invalidity, economic security by way of periodical payment is assured.
The term has been judicially defined as a stated allowance or stipend made in consideration of past service or a surrender of rights or emoluments to one retired from 1014 service Thus the pension payable to be a Government employee is earned by rendering long and efficient service and, therefore, can be said to be a deferred portion of the com pensation or for service rendered.
In one sentence one can say that the most practical raison detre for pension,, is the inability to provide for oneself due to old age .
In Deoki Nandan Prasad vs State of Bihar & Ors., , it was held by this Court: "The payment of pension does not depend upon the discretion of the Government but is gov erned by the relevant rules and anyone enti tled to the pension under the rules can claim it as a matter of right." In Smt.
Poonamal vs Union of India & Ors., ; , it was pointed out: "Where the Government servant rendered serv ice, to compensate which a family pension scheme is devised, the widow and the dependent minors would equally be entitled to family pension as a matter of right.
In fact we look upon pension not merely as a statutory right but as the fulfilment of a constitutional promise in as much as it partakes the charac ter of public assistance in cases of unemploy ment, old age, disablement or similar other cases of undeserved want.
Relevant rules merely make effective the constitutional mandate.
That is how pension has been looked upon in D.S. Nakara 's judgment." Admittedly, the definition of 'family ' as it stands after amendment excludes that scope of the Government serv ant who has got married to such Government servant after his/her retirement and the children born after retirement also stand excluded.
Petitioners have challenged the stand of the Union of India and the definition in the Pension Rules as arbitrary and discriminatory It has been contended that if family pension is payable to the widow or the hus band as the case may be, of the Government servant, the category which the definition keeps out, namely, those who have married after retirement and offsprings of regular marriage born after retirement, is discriminatory.
Pension is payable, as pointed out in several judgments of this 1015 Court, on the consideration of past service rendered by the Government servant.
Payability of the family pension is basically on the self same consideration.
Since pension is linked with past service and the avowed purpose of the Pension Rules is to provide sustenance in old age, distinc tion between marriage during service and marriage after retirement appears to be indeed arbitrary.
There are in stances where a Government servant contracts his first marriage after retirement.
In these two cases before us, retirement had been at an early age.
In the Subedar 's case, he had retired after putting in 18 years of service and the Railway employee had retired prematurely at the age of 44.
Premature or early retirement has indeed no relevance for deciding the point at issue.
It is not the case of the Union of India and, perhaps there would have been no force in such contention if raised, that family pension is admissible on account of the fact that the spouse contributed to the efficiency of the Government servant during his service career.
In most cases, marriage after retirement is done to provide protection, secure companionship and to secure support in old age.
The consideration upon which pension proper is admissible or the benefit of the family pension has been extended do not justify the distinction envisaged in the definition of 'family ' by keeping the postretiral spouse out of it.
Government Servants Conduct Rules prohibit marriage during the life time of a spouse.
Section 494 of the Indian Penal Code makes second marriage void and makes it a crimi nal offence.
Thereafter, both before retirement and even after retirement there is no scope for a person to have a second wife or a husband.
as the case may be, during the life time of an existing spouse.
Reliance has been placed on the recommendations of the Third Pay Commission on the basis of which the amendment in the Pension Rules is said to have been made.
Apart from referring to the recommendations, no attempt has been made at the hearing by counsel for the Union of India to derive support from the recommendations.
We really see no justifi cation as to why post retirement marriages should have been kept out of the purview of the definition.
In clause (ii) of the definition son or daughter born after retirement even out of wedlock prior to retirement have been excluded from the definition.
No plausible expla nation has been placed for our consideration for this exclu sion.
The purpose for which family pension is provided, as indicated in Smt.
Poonamal 's case, is frustrated if children born after retirement are excluded from the benefit of the 1016 family pension.
Prospect of children being born at such advanced age (keeping the age of normal superannuation in view) is minimal but for the few that may be born after the retirement, family pension would be most necessary as in the absence thereof,.
in the event of death of the Government servant such minor children would go without support.
The social purpose which was noticed in some pension cases by this Court would not justify the stand taken by the Union of India in the counter affidavit.
It is not the case of the Union Government that as a matter of public policy to con tain the growth of population, the definition has been so modified.
Even if such a contention had been advanced it would not have stood logical scrutiny on account of the position that the Government servant may not have any child prior to retirement and in view of the accepted public policy that a couple could have children upto two, the only child born after superannuation should not be denied family pension.
Considered from any angle, we are of the view that the two limitations incorporated in the definition of 'family ' suffer from the vice of arbitrariness and discrimination and cannot be supported by nexus or reasonable classification.
The Words 'provided the marriage took place before retire ment of the Government servant ' in clause (i) and 'but shall not include son or daughter born after retirement ' in clause (ii) are thus ultra vires Article 14 of the Constitution and cannot be sustained.
The writ petitions are allowed.
The respondent Union of India shall have a direction to extend to each of the peti tioners in the two writ petitions family pension as admissi ble under the respective schemes from the date the husband of each of petitioners died.
Since these writ petitions were instituted on the basis of letters received by the Court and treated as public interest litigation and were supported by the Supreme Court Legal Aid Committee through their counsel, there shall be no order as to costs.
Y. Lal Petitions allowed.
| In pursuance of an order of detention dated 15.4.1988, passed by the District Magistrate, Meerut, the Petitioner, a bachelor and having no property, was arrested on 2nd October 1988 and detained under Section 3(2) of the National Securi ty Act.
The petitioner was supplied with the grounds of detention enumerating therein the ' acts committed by him on 2nd, 3rd and 4th April 1988 and on 9.4.88 and the provoca tive speeches made by him on the occasion of Shabberat a Muslim festival to the effect that Hindus had deliberately "sent their cow on the road" and the "people are silent" and about teaching "them" a lesson and administration 's failure to fix a long speaker in the mosque These acts and the speeches made by the petitioner.
were, in the opinion of the detaining authority, prejudicial to the maintenance of public order.
The representation made by the petitioner against the order of detention was rejected and the order of his detention was confirmed.
Thereupon, the petitioner has filed this Writ Petition under Article 32 of the Constitution challenging his deten tion.
The contentions of the petitioner are that (i) that there was inordinate delay in arresting the petitioner which indicated that the order of detention was not based on a bona fide and genuine belief that the action and conduct of the petitioner were such that the same were prejudicial to the maintenance of Public Order and the so called "grounds" were merely make belief and not genuine grounds; (ii) that the grounds were not germane to the maintenance of "public order" and (iii) that the grounds were vague and unintelli gible.
Allowing the Writ Petition, this Court, HELD: Sub section (2) of section 3 of the Act autho rises the Central Government or the State Government, if satisfied with respect to any person that with a view to preventing him from acting in any 57 manner prejudicial to the security of the state, it is found necessary, then the person can be detained.
Hence there must be conduct relevant to the formation of the satisfaction having reasonable nexus with the actions of the petitioner which are prejudicial to the maintenance of public order.
Existence of material relevant to the formation of satisfac tion and having rational nexus to the formation of the. satisfaction that because of certain conduct "it is neces sary" to make an order "detaining" such person, are subject to judicial review.
[60H; 61A B] Delay, unexplained and not justified, by the circum stances and the exigencies of the situation, is indicative of the fact that the authorities concerned were not and could not have been satisfied that "preventive custody" of the concerned person was necessary to prevent him from acting in any manner prejudicial to the maintenance of public order.
Whether there has been unreasonable delay, depends upon the facts and circumstances of a particular situation.
[61C D] Satisfaction of the authorities based on conduct must precede action for prevention.
Satisfaction entails belief.
Satisfaction and belief are subjective.
Actions based on subjective satisfaction are objective indication of the existence of the subjective satisfaction.
Action based on satisfaction should be with speed commensurate with the situation.
[61E F] If in a situation the person concerned is not available or cannot be served then the mere fact that the action under section 7 of the Act has not been taken, would not be a ground to say that the detention order was bad.
Failure to take action, even if there was no scope for action under section 7 of the Act would not be decisive or determinative of the question whether there was undue delay in serving the Order of detention.
[62A B] The Petitioner has no property, so no property could be attached and as the Government 's case is that he was not available for arrest, no order under sec.
7 could have been possibly made.
This, however, does not salvage the situa tion.
The fact is that from 15th April 1988 to 12th May 1988, no attempt had been made to contact the Petitioner.
No explanation has been given for this.
There is also no explanation why from 29th September 1988 to 2nd October 1988, no attempt had been made.
It is however stated that from May to September 1988 the "entire police force" was extremely busy in controlling the situation.
Hence, if the law and order was threatened and prejudiced, it was not the conduct of the petitioner but because of "the inadequacy" or "inability" of the police force of Meerut City to control 58 the situation.
Therefore the fact is that there was delay.
The further fact is that the delay is unexplained.or not warranted by the facts/ situation.
To shift the blame for public order situation and raise the bogey of the conduct of the petitioner would not be proof of genuine or real belief about the conduct of the petitioner but only raising a red herring.
[62B E] The Court quashed the order of detention and directed the petitioner to be set at liberty forthwith.
[65B] Nizamuddin vs The State of West Bengal, ; ; Bhawarlal Ganeshmalji vs State of Tamil Nadu & Ant., ; at p. 638; Indradeo Mahato vs State of West Bengal, ; State of Gujarat vs Adam Kasam Bhaya, ; ; Subhash Bhandari vs Distt.
Magis trate, Lucknow & Ors., ; and Kanu Biswas vs State of West Bengal; , , referred to.
|
l Appeals Nos. 1622 to 1626 of 1968.
Appeals from the judgment and order dated February 11, 1964 of the Calcutta High Court in Income tax Reference No. 109 of 1960.
2 Sachin Chaudhuri, T. A. Ramachandran and D. N. Gupta, for the appellant (in all the appeals).
section T. Desai, section A. L. Narayan Rao, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Shah, J.
Netherlands Steam Navigation Company Ltd. hereinafter called "the assessee" is a non resident Company engaged in shipping business.
For the assessment years 1952 53 to 1956 57 the assessee filed its return of income for the relevant accounting years disclosing taxable income computed on the basis of its annual turnover in its Indian trade i.e. "round voyages" to and from Indian Ports.
The assessee did not furnish particulars of its world income.
The Income tax Officer computed the taxable business income of the assessee for each year by the application of the following formula: Indian trade profits x Indian Port receipts Total Port receipts By the expression "Indian trade profits" in the formula was meant profit earned in "round voyages" made by the assessee 's ships which touched Indian ports.
Operation of the formula may be illustrated by taking a sample computation by the Income tax Officer for the year 1953 54 Kr.
"Total gross earning in Indian Trade 10,024,996 Deduct: (1) Total experience in Indian Trade 7,705,474 (2) Depreciation allowance 733,671 8,439,145 Net profit India Trade 1,585,851 Gross earning from Indian Ports 5,440,042 Proportionate Indian Profits: 5,440,042 * 1,585,851 860,559 100,024,996 (Rs.100=Kr.79.80 Rs.10,78,395" In computing the profits of the assessee in India in each year the Income tax Officer allowed normal depreciation and other trade allowances admissible under the Indian Income tax Act, 1922, and the relevant rules made thereunder.
He, however, did not allow initial depreciation and additional depreciation in respect of the ships of the assessee in any of the assessment years, because the ships acquired by the assessee were not introduced into the Indian business in the years in which they were newly acquired. 'The orders of 'assessment were confirmed by the Appellate Assistant Commissioner.
3 In appeal to the Income tax Appellate Tribunal the assessee claimed Additional depreciation for four ships for which the following details were furnished: "(1) section section Bintang Brought into use in 1950.Brought into use in the Indian trade in 1951.
Claim for the assessment years 1952 53 to 19 54 55.
(2) section section Billiton Brought into use in 1951.
Brought into use in the Indian trade in 1952.
Claim for the Assessment years 1953 54 to 1956 57.
(3) S, section Banka Brought into use in 1953.
Brought into use in the Indian trade in 1954.
Claim for the assessment years 1955 56 and 1956 57.
(4) section section Bawean Brought into use in 1953.
Brought into use in the Indian trade in 1954.
Claim for the assessment years 1955 56 and 1956 57.
" The assessee and the Commissioner were agreed that the taxable income of the assessee had to be determined by the application of the second method in Rule 33 of the Indian Income tax Rules, 1922.
The Tribunal also observed that the Commissioner and the assessee agreed that the formula adopted by the Income tax Officer was "the correct method of assessment".
The Commissioner submitted before the Tribunal that if the Indian business of the assessee be regarded as part of its world business and not independent of it, the world profits of the assessee must be computed according to the provisions of the Indian Income tax Act, 1922, and additional depreciation may be taken into account in determining the taxable profits under the Indian Income tax Act as a fraction of the world profits.
But he maintained that if the Indian trade be regarded as a separate business and not part of the world trade of the assessee, additional depre ciation could only be allowed under section 10(2)(vi a) of the Indian Income tax Act, provided ships which are new are introduced into the Indian trade and not otherwise, In the opinion of the Tribunal, in computing the taxable in come of the assessee under the Indian Income tax Act, 1922, the Indian business must be taken to be part of the assessee 's world business, and "depreciation which the assessee was entitled to, in respect of its world business by the application of the Indian Income tax Act would be proportionately available in respect of its Indian business.
" The Tribunal observed that under r. 33 "the profits have to be calculated under the terms of the Indian Incometax Act and this act postulated that on all machinery, plants and such other things like steamers brought into business after March 31, 1948, additional depreciation must also be granted".
The 4 Tribunal then observed that the ships brought into the Indian trade were not new in the years of account relevant to the five years of assessment, but the assessee was still qualified under section 10(2) (vi a) to additional depreciation for a continuous period of five years, and "the fact in the first of these years the new ships did not call at the Indian Ports in one assessment year did not disentitle the assessee to the benefit not only for that year but also for the succeeding four years".
Accordingly the Tribunal held that in respect of all the four ships of the assessee, additional depreciation was admissible as claimed.
At the instance of the Commissioner of Income tax, the fol lowing question was referred by the Tribunal to the High Court of Calcutta for opinion in respect of each of the five years : "Whether on the facts and circumstances of the case the assessee Company is entitled to additional depreciation in respect of the four ships mentioned above?" The High Court answered the question in the negative Clause (vi a) was inserted in section 10(2) of the Indian Income tax Act, 1922, by section 11 of the Taxation Laws (Extension to Merged States and Amendment) Act 67 of 1949.
The clause as amended by section 8 of the Indian Income tax (Amendment) Act 25 of ' 1953 with effect from April 1, 1952, reads as follows : "In respect of depreciation of buildings newly erected, or of machinery or plant being new which has been installed, after the 31st day of March, 1948, a further sum (which shall be deductible in determining the written down value) equal to the amount admissible under clause (vi) (exclusive of the extra allowance for double or multiple shift working of the machinery or plant and the initial depreciation allowance admissible under that clause for the first year of erection of the building or the installation of the machinery or plant) in not more than five successive assessments for the financial years next following the previous year in which such buildings are erected and such machinery and plant installed and falling within the period commencing on the 1st day of April, 1 949, and ending on the 31st day of March, 1959.
" The assessee is a non resident Company.
It maintains a Branch Office in Calcutta; but on that account the ' Indian business of the assessee cannot be regarded as business distinct from its world business.
It was not so treated by the Income tax Officer, or by the Appellate Assistant Commissioner.
In computing profits or gains of business carried on by an assessee, normal depreciation 5 under, section 10(2)(vi) and additional depreciation under section 10(2)(vi a) are undoubtedly admissible in the conditions and to the extent allowed under the two clauses.
By section 4(1) of the Indian Income tax Act, the total income of any previous year of a non resident includes all income, profits and gains from whatever source derived which (1) are received or are deemed to be received in the tax able territories in such year by or on behalf of such person, and (2) which accrue or arise or are deemed to accrue or arise to him 'in the taxable territories during such year.
Section 10 of the Act which charges to tax the profits and gains of business, profession or vocation carried on by an assessee applies to assessees who are residents, residents but not ordinarily resident, and non residents.
Profits and gains of business of a non resident received or deemed to be received in the taxable territories by or on behalf of the assessee are taxable under the Indian Income Tax Act 1922 : profits and gains of business which accrue or arise or are deemed to accrue or arise to him in the taxable territories are also taxable under that Act; but profits and gains which accrue or arise or are deemed to accrue or arise to a non resident without the taxable territories are not taxable under the Act.
Section 4 is one of the pivotal sections in the scheme of the Income tax Act.
Thereby within the total income of a non resident is included income received, arising or accruing, or deemed to be received, or to have arisen or accrued, within the taxable territories.
The Act however gives no clear guidance for determining when income may be said to have arisen or accrued within the taxable territories.
But r. 33 framed under the Act purports to give some direction to the Income tax Officer for determining income, profits or gains accruing or arising to a non resident for the purpose of assessment to income tax.
There is no dispute that the profits of the business taxable under the Indian Income tax Act, 1922, are a fraction of the world profits and the profits are to be determined under r. 33 of the Income tax Rules.
Rule 33 of the Income tax Rules reads as follows : "In any case in which the Income tax officer is of Opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories or through or from any Property in the taxable territories, or through or from any asset or, source of income in the taxable territories, or through or from any 6 money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purposes of assessment to income tax may be calculated on such percentage, of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person (such profits being computed in accordance with the provisions of the Indian Income tax Act) as the receipts so accruing or arising bear to the total receipts of the business, or in such other manner as the Income tax Officer may deem suitable.
" The rule authorises the Income tax Officer to adopt one of the three methods of determining income, profits or gains ' ?Or the purpose of assessment to income tax where the Income tax Officer is unable to ascertain the actual amount of income, profits or gains, arising inter alia out of a business connection in the taxable territories : (a) a percentage of turnover considered reasonable (b) a proportion of the total profits (computed according to the provisions of the Indian Income Tax Act) of the business of the assessee equal to the proportion which the receipts accruing or arising bear to the total receipts of the business and (c) such other manner as the Income tax Officer may deem suitable.
The second method, it was common ground, was properly applicable to the determination of taxable income of the assessee.
That method requires as a first step, determination of the total profits of the business of the assessee in accordance with the provisions of the Indian Income tax Act: the next step is to determine the proportion between the receipts accruing or arising within the taxable territories and the total receipts of the business; and the third step is to determine the income, profits or gains by the application of the proportion for the purpose of assessment to income tax.
This method ordains that the fraction which the total profits bear to the total world receipts is to be applied to the Indian receipts for determining the taxable profits.
The income so determined will be the taxable income without any further allowances, because the permissible allowance will all enter the computation of the world income and income taxable under the Income tax Act is also a fraction thereof.
Apparently the Income tax Officer did not apply the second method under r. 33 in computing the taxable income of the assessee, for under that method in determining the taxable income the receipts accrued or arising in India had to be multiplied by the proportion between the total profits of the business and the total receipts of the world business.
7 Counsel for the assessee asked us to assume that the profits computed by the Income tax Officer according to the formula adopted by him are profits determined by the second method in r. 33, and claimed on that footing that beside normal depreciation, additional depreciation ought also to have been taken into account, and the taxable profits of the assessee determined on that basis.
But that assumption cannot be made.
One of the essential conditions of the applicability of the second method in r. 33 is the determination of the total world profits of the assessee under the Indian Income tax Act, and reduction of the Indian taxable profits by the application of the appropriate fraction.
The assessee has not produced its books of account of its world trade to enable the Income tax Officer to determine its total taxable profits arising from its world business.
There was apparently no clear appreciation of the true im port of the second method under r. 33 before the Departmental Authorities and the Tribunal.
Counsel for the assessee suggested that his client may be willing to produce before the Income tax Officer the books of account of the relevant years for computing the total world profits according to the Indian Income tax Act, 1922, and the benefit of additional depreciation may then be allowed to the assessee in computing the total profits under the Indian Income tax Act.
Counsel for the Commissioner expressed his willingness to the adoption of that course.
Counsel requested us to adjourn the hearing to enable them to obtain instructions from their respective clients, and the hearing was accordingly adjourned for three weeks.
But ultimately counsel for the assessee informed us that his clients may not be able to bring before the Income tax Officer the books of account of their world trade.
The Income tax Officer has evolved a special formula for de termining the profits which is not the second method in r. 33 of ' the Income tax Rules.
The assessee has not challenged the correctness of that method, nor has the Department.
In the application of that formula, normal depreciation and trade expenses are deducted from the total gross earning in the Indian trade, but not the additional depreciation.
Clearly the Income tax Officer did not in computing the tax able income resort to the second method in r. 33 of the Incometax Rules.
We are exercising in these appeals advisory jurisdiction, and are only called upon to answer the question referred by the Tribunal.
We are incompetent to decide whether computation of the taxable income by the Income tax Officer by the application of the formula evolved by him is correct: that question is not before us.
We are only concerned to determine the validity of the claim for admitting additional depreciation in the computation of the taxable income of the assessee by the method adopted 8 by the Income tax officer.
Additional depreciation is a statutory allowance in the determination of taxable profit under section 10 of the Act, and in the case of a non resident where actual income cannot be determined, and resort is had to r. 33, not when an empirical method is adopted for computation of the tax able income.
We are however unable to agree with the observations of the High Court that "no relief in any shape or form can be enjoyed by any assessee under the Indian Income tax Act in respect of a source of income, unless the income from that source is taken into consideration for the purpose of that Act.
In the reference before us the income in question was outside the purview of assessment under the Indian Income tax Act".
That was not the plea of the Commissioner.
The source of the income of the assessee charged to tax was business: it was not income from any other source.
The Commissioner and the assessee were ad idem on that matter.
The only dispute was whether additional depreciation was admissible in the computation of the taxable income, when the taxable business profits were determined by the Income tax Officer by the method evolved by him.
It was common ground that the appropriate method for deter mining the profits was the second method in r. 33.
But that method was never applied: if it was applied in the computation of the world profits of the assessee, it would have been necessary to allow the various depreciation allowances.
The assessee could not, while accepting determination of taxable profits in a manner not warranted by the second method under r. 33, claim that additional depreciation should be allowed.
The answer to the question therefore is that additional depreciation is not admissible as an allowance in the computation of the taxable income by the special formula adopted by the Income tax Officer.
The appeals fail.
The assessee will pay the costs of these appeals.
One hearing fee.
R.K.P.S. Appeals dismissed.
| Respondent No. 1 was born in undivided India on July 3, 1934.
He went to Pakistan in October 1950.
In 1953 he obtained a visa from the Indian High Commission in Pakistan and came to India on July 22, 1953.
After the expiry of his period of stay he sought permanent settlement in India.
On May 6, 1955 he filed a suit claiming that he was a minor when he went on a trip to Pakistan and had not ceased to be an Indian citizen.
He sought a permanent injunction restraining the Union of India and other authorities from deporting him.
The Munsif who tried the suit held that respondent No. 1 had ceased to be an Indian citizen, and dismissed the suit.
The District Judge in first appeal held that being a minor whose father was in India respondent no.1 could not by leaving for Pakistan, lose his Indian nationality.
In second appeal the High Court of Allahabad remanded the case to the first appellate court to determine the question whether by having spent one year in Pakistan after attaining majority respondent No. 1 had acquired the citizenship of Pakistan.
The High Court rejected the contention on behalf of the State that in view of section 9(2) of the Indian which came into force on December 30, 1955 and Rule 30 of the Citizenship Rules made under the Act, the question whether respondent No. 1 was a citizen of India or not could only be decided by the Central Government.
In taking this view the High Court relied on the decision in Abida Khatoon 's case in which a single Judge of that court had held that section 9 of the was not retrospective and could not take away the vested right of a citizen who had already filed a suit to have his claim for citizenship decided by a court. 'the first appellate court gave after remand a finding favourable to respondent No. 1 and on receipt of this finding the High Court dismissed the State 's appeal.
The State then appealed to this Court.
The questions that fell for consideration were : (i) whether section 9 of the Act would apply to a suit pending on the date when the Act came into force; (ii) whether in view of the fact that the procedure established by law before the commencement of the Act allowed the question as to the acquisition of the citizenship of another country to be determined by courts, there was by giving retrospective operation to section 9, a violation of the guarantee of personal liberty under article 21.
HELD : (i) The language of sub section
(1) of section 9 is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after its commencement.
The words "or has at any time between the 26th January 1950 and the commencement of the Act, voluntarily acquired the citizenship of another country" would become almost redundant if only prespective operation is given to section 9(1) of the Act.
This according to the settled rules of interpretation cannot be done, [1010 F G] 1007 (ii) The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms and a law made by Parliament cannot, as.
held in lzhar Ahmed 's case be impeached on the ground that it is inconsistent with the provisions contained in other Articles in Part II of the Constitution.
The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule.
It could thus make a provision, about the forum where the question as do whether a person had acquired citizenship of another country could be determined and this is what has been done by r. 30.
[1011 B D] The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds : (1) Indian citizens who voluntarily acquired citizenship of a foreign, State perior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act, and (3) Indian Citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955.
As regards the first category they were dealt with by article 9 of the Constitution.
The second and third categories would be covered by the provisions of section 9 of the Act.
Therefore, if a question arises as to whether when and how an Indian citizen has acquired citizenship of another country that has to be determined by the central Government by virtue of the provisions of sub section (2) of section 9 read with r. 30 of the Citizenship Rules.
In view of the amplitude of the language employed in section 9 which takes in persons mentioned in category (2) mentioned above, the entire argument which prevailed with the Allahabad High Court in Abida Khatoon 's case can have no substance.
[1011 D H, 1012 C] lzhar Ahmad Khan vs Union of India, [1962] Supp.
3 S.C.R. 235, 244, 245., Akbar Khan Alam Khan & Anr.
vs Union of India, ; and The Government of Andhra Pradesh vs Syed Mohd. Khan, [1962] Supp. 3 S.C.R. 288, referred to.
Abida Khatoon & Anr.
vs State of.
U.P. & Ors.
A.I.R. 1963 All 260, disapproved.
(iii) The contention that retrospective operation of section 9 would contravene article 21 of the Constitution could not be accepted.
If the Parliament was competent under article 11 which is a constitutional provision read with the relevant entry in List I to legislate about ' cases of persons belonging to categories 2 and 3 referred to earlier it could certainly enact a legislation in exercise of its sovereign power which laid down a procedure different from the one which obtained before.
The new procedure would ltself become the "procedure established by law" within the meaning of article ' 21 of the Constitution.
[101 2 E G] The High Court was therefore wrong in the present case in calling for a decision of the lower appellate court on the issue of the plaintiff having acquired or not the citizenship of Pakistan between July 3, 1952 and the date of his return to India.
[High Court accordingly directed to have question determined by Central Government and thereafter dispose of appeal finally].
[1013 B C]
|
iminal Appeals Nos. 146 and 147 of 60.
Appeals by special leave from the judgment and order dated February 11, 1960, of the Madhya Pradesh High Court in Criminal Revisions Nos.
270 to 274 of 1959.
G. C. Mathur, for the appellants.
I. N. Shroff, for the respondents.
February 5.
The Judgment of the Court was delivered by KAPUR, J.
There are two appeals directed against the order of the High Court of Madhya 22 Pradesh reiecting a Reference made by the Sessions Judge against the prosecution of.
the appellant for contravening the provisions of the C. P. and Berar Sales Tax Act (C. P. XXI of 1947), hereinafter called the 'Act '.
A firm of which five brothers including the two appellants were partners submitted their sales tax returns for the quarters beginning June 1, 1947, to the quarters ending December 31, 1951.
A .complaint was filed against the partners on July 19, 1957, on the ground that the returns filed by them were false and the accounts produced were incorrect and therefore an offence under section 24(1)(b) and (g) of the Act was committed.
On December 12, 1958, an objection was taken by the accused.
persons that under section 26(2) of the Act, the prosecution could not be instituted as it was barred by time, having been instituted more than three months after the commission of the offence.
The learned, Magistrate did not go into the objection on the ground that it was not the proper forum for raising the objection.
Four revisions were taken to the Sessions Judge who on May 4, 1959, made a reference to the High Court for quashing the proceedings But the High Court rejected the reference on the ground that a person making a false return neither acts nor purports to act under the Act and therefore section 26(2) is not applicable to him.
It is against that order that these peals were brought by Special Leave.
In order to decide this question, it is necessary to refer to the relevant provisions of the Act.
Under section 10 of the Act every dealer is required to furnish a return when called upon to do so and every registered dealer is required to furnish returns by such dates as may be prescribed.
The ap pellants are registered dealers and they have made returns under that section.
Section 15 deals with 23 production and inspection of accounts and section 24 enumerates the offenses under the Act.
The alleged offence of the appellants falls under is.
34(1) (b) and (g).
failing without sufficient use to submit any return or furnishing false returns and knowingly producing incorrect accounts, registers or documents or knowingly furnishing incorrect information.
Section 26 relates to the protection of persons acting in good faith and limitation for suits and prosecutions.
The section when quoted is as follows section 26 (1) "No suit, prosecution or other legal proceedings shall lie against any servant of the Government for anything which is in good faith done or intended to be done under this Act or rules made thereunder.
(2) No suit shall be instituted against the Government and no prosecution or suit shall be instituted against 'any person in respect of anything done or intended to be done under this Act unless the suit or prosecution has been instituted within three months from the date of the act complained of.
" For the appellants, it was contended that the words "no prosecution or suit shall be, instituted against any person in respect of anything done" in sub section
(2) of section 26 cover their cases also and they fall within the words ",any person".
The respondent 's submission on this point was that the two sub sections of section 26 should be read together and the intention of the Legislature was to give protection to Government servants in regard to prosecutions or other legal proceedings.
That, in our opinion, is not *hat the words used in sub section
(2) mean.
, They are words of wider import and would cover cases of all persons including persons other than Government servants.
There are ' no words restricting the meaning of "any person" and no 24 reason has been shown why those words should not include the appellants.
The ground on which the High Court rejected the Reference was that in its opinion the appellants neither acted nor purported to act under any of the provisions of the Act when they filed false returns or produced false accounts and in fact they were rendering.
themselves liable to punishment under the provisions of section 24 of the Act.
It observed as follows : "The test whether an act is done or intended to be done under a certain law might well be whether the person who committed it can, if challenged, reasonably justify his act under any provision contained in that law".
This opinion is, in our view, not sustainable.
When the appellants submitted their returns they did so under section 10 of the Act and when they produced their accounts they did so under section 15 of the Act.
Therefore both the making of the returns and production of the accounts were done under the Act and cannot be said to be outside the provisions of the Act.
In our opinion the High Court was in error in rejecting the Reference.
The appeals are therefore allowed, the order of the High Court is set aside aid the proceedings in the trial court are quashed.
Appeals allowed.
| The owner of a certain plot of land granted a perpetual lease of it on an annual rent to some persons who sublet it to the respondent on a higher rent.
The respondent sublet the plot to the appellant on a still higher rent.
In all the three deeds of lease it was recited that the lessee might construct buildings on the land after obtaining sanction of the appropriate authority but on the dates of all the three leases the plot was assessed for agricultural purposes under the Bombay Land Revenue Code, 1879.
The appellant obtained sanction of the Collector for conversion of user of the land to non agricultural purposes.
The appellant thereafter applied to the court for fixation of standard rent of the plot under 's.11 of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947.
The 'respondent contended that the land when granted in lease being agriculture I, the provisions of the Act did not apply thereto.
The question which arose for decision was whether the plot of land was 'Premises ' within the meaning of s.5(8)of the Act.
Held, that the material date for ascertaining whether the plot is 'premises ' is the date of letting and not the date of the application for fixing the standard rent.
In the present case the plot in dispute could not be regarded as 'premises ' under section 5(8) of the Bombay Act on the date of letting and the application for fixation of standard rent was not maintainable.
|
vil Appeal No. 369596 of 1988.
From the Judgment and Order dated 10.12.87 of Customs Excise and Gold Control Appellate Tribunal New Delhi in Appeal No. 1105/ 83 D (Order No. 961/87 B).
Soli, J. Sorabjee, section Ganesh, C.M. Mehta P.G. Gokhale and R.B. Hathikhanawala for the Appellants.
A.K. Ganguli, Mrs. Sushma Suri and K. Swami for the Respondent.
The Judgment of the Court was delivered by VENKATACHALIAH J.
These two appeals under Section 35 L of the (Act) by Messrs Mafatlal Fine Spinning & Manufacturing Co. Ltd., arise out of and are directed against the common appellate order dated 10.2.1987 of the Customs Excise & Gold (Control) Appellate Tribunal in Appeal Nos.
1105 of 1983 and 2540 of 1987 hold ing that in respect of the deferred duty on yarn appellant is liable to pay interest at 3 per cent of the duty under 207 Rule 49A(2) of the Central Excises & Salt Rules, 1944, as according to the Tribunal, the cotton fabric cleared is not 'Grey ' (unprocessed) cotton fabric.
Appellant is engaged in the manufacture of cotton fabrics in its composite mills and opted under Rule 49A for facility of payment of duty of excise payable on the yarn to be deleted until the clearance of the cotton fabrics manu factured therefrom.
The said Rule 49A provides for payment of interest on the excise duty payable on the yarn which is deferred till the manufacture and clearance of the fabrics made out of the dutiable yarn.
As such payment is deferred, at the instance of the option of the manufacturer, till completion of manu facture and clearance of fabrics out of the yarn and Rule 49A envisages that when cotton fabrics are cleared 'grey ' (unprocessed) the yarn duty shall be paid at the time of clearance of the fabrics along with 1 1/2% of the yarn duty, by way of interest.
But where the cotton fabrics are cleared after 'processing ', the interest payable on, and along with, the yarn duty would, however, be 3% of the yarn duty.
The question in these appeals is whether the inter est rate should be one & half per cent or three per cent which in turn depends upon whether the cotton fabrics cleared are 'grey ' (unprocessed) or they are cleared after 'processing '.
The cotton fabrics cleared in this case, admittedly, underwent the process of 'calendering ' and 'shearing '.
The cognate and sequential question is whether these processes render the 'grey ' fabric, a 'processed ' fabric within the meaning of Rule 49A(2).
The Appellate Tribunal has held that 'calendering ' and 'shearing ' are 'finishing processes ' and render the 'Grey ' fabrics to cease to be 'unprocessed ' so as to attract interest at 3%.
We have heard Sri Soli J. Sorabjee, learned Senior Counsel for the appellant and Sri A.K. Ganguly, learned Senior Counsel for the revenue.
There is no dispute that before clearance, the cotton fabrics were subjected to 'calendering ' and 'shearing ' which, in the jargon of the textile industry are 'finishing processes '.
The Tribunal, accordingly, held that the cotton fabrics cleared were not 'unprocessed ' for pur poses of Rule 49A(1)(b).
In regard to 'calendering ', the Tribunal relied upon the views expressed by it in the case of Siddeshwari Cotton Mills Ltd. and Anr.
vs Collector of Central Excise, Calcutta [1984] 18 The relevant part of Rule 49A provides: "(1) When the cotton fabrics are cleared grey (unprocessed), the yarn duty payable shall be (a) the appropriate duty payable on such cellulosic spun yarn or cotton yarn, or both, as the case may be; plus (b) one and a half per cent of the duty pay able on such cellulosic spun yarn or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty; (2) When the cotton fabrics are cleared after processing, the yarn duty payable shall be (a) the appropriate duty payable on such cellulosic spun yarn, or cotton yarn, or both,.
as the case may be; plus (b) three per cent of the duty payable on such cellulosic spun yarn, or cotton yarn, or both, as the case may be, by way of interest on the amount of yarn duty: Explanation Omitted as unnecessary.
Sri Sorabjee contended that such controversy, as is raised, as to whether the fabric, after 'calendering ' and 'sheafing ' ceases to be 'unprocessed ' fabric would require to be resolved on the language of the Rule 49A itself and that the differentium for the attraction of the different rates of interest was whether the cotton fabrics cleared were 'grey fabrics ' as known and understood in the textile industry.
The learned counsel emphasised the distinction between the expressions in Rule 49A(1) which refer to the expression "cotton fabrics are cleared grey (unprocessed)" on the one hand and the expression "cotton fabrics are cleared after processing" in Rule 49A(2) on the other, to demonstrate that the condition for levy of 1 1/2 % is not whether some process or processes were applied to the 'grey fabrics ' but whether such process or processes to which the grey fabric was subjected had the effect of making such 'grey fabric ' cease to be 'grey fabric '.
209 6.
Sri Ganguly, for the revenue, urged that the condi tions for the choice of the different rates of interest are not envisaged in the context whether the process or process es amounted to 'manufacture ' within the meaning of Sec.
2(f)(v) of the Act, but only in the context of estimating the extent of time consumed by the process or processes as that is the criterion for the choice of the rate of inter est.
The purpose and intendment of the rule, says Sri Gan guly, is to provide for the rates of interest on the de ferred yarn duty depending on the time consumed by the processing.
If 'grey cloth ' directly obtained from the loom and that is what 'grey fabric ' or 'greige ' in textile parlance means is cleared then a lesser rate of interest is attracted.
But, where, as here, the 'grey fabric ' is sub jected to time consuming processes the rate of interest, says Sri Ganguly, would be the higher rate of 3 per cent, taking note of the delays consequential upon such processing occasioned in the recovery of yarn duty.
Sri Ganguly, ac cordingly, submitted that the test appropriate in this context is not whether the grey fabrics undergo any change in their nature or quality as a result of the processes but is whether any time consuming process, whatever be its nature, is resorted to by the manufacturer which will, in turn, occasion delays in the clearance of the cotton fabric and thereby delay payment of the yarn duty.
Sri Ganguly is right in his submission as to the objects of Rule 49A in prescribing differential rates of interest on deferred yarn duty.
But the standards for as sessment of the relative delays depending on which the different rates of interest are charged are themselves set by the rule making authority.
The measure of the delay so as to attract one or the other of the rates is not in terms of any period of time specified but is prescribed to be with reference to the nature of the processes.
The measure of the delay in deferment of yarn duty legislatively considered appropriate to attract higher rate of interest at 3%, is in terms of the processes that would be required to make the 'greycloth ' cease to be grey cloth.
That is why in Rule 49A(1) the expression 'grey ' is used while in Rule 49A(2) that word is omitted.
So the period of deferment of yarn duty to attract higher interest 3% would, according to the wisdom of the rule makers, be the delay incidental to con verting 'grey fabric ' into 'processed ' fabric which ceases to be 'grey fabric '.
With this legislative estimate of the period of deferment appropriate to a situation attracting 3% interest, the matter has necessarily to be examined by those standards, which in turn, bring in the idea whether the process or processes concerned are such as to change the nature of the 'grey fabric '.
This leads to the question whether 'calendering ' and 'shearing ', though by themselves are finishing processes, render the 'grey ' fabric cease to be so.
210 8.
Sri Sorabjee submitted that the process of calender ing is nothing more than mere pressing of the 'grey fabric ' by running it through plain rollers to impart a better finish, which is a mere temporary finish.
Sri Sorabjee referred to some of the notifications issued under Section 8(1) of the Act which say that calendering would not be treated as "processing".
Learned Counsel contended that having regard to the very nature, the calendering does not bring about any change in the quality of the goods.
In Siddeshwari Cotton Mills ' case, the Tribunal has referred to certain technical and scientific literature on the process of 'calendering '.
Sri Sorabjee referred to some of them.
In Modern Textiles (by Dorothy section Lyle John Welay & Sons, N. York) under the caption "Finishes that provide Asthethic Values", referring to "CALENDER FINISH" it is stated: "This is the simplest of all finishes used to give a good appearance to the finished fabric.
It consists of passing the fabric between the heated cylinders of a calendering machine.
It is simply ironing a fabric to make it smooth and give it a lustrous surface.
The round yarns are flattened, hence reflect more light.
It is a temporary finish, since the yarns revert to their round shape with steaming, laundering, and dry cleaning.
Examples of calendered fabrics the sheeting, poplin, and broadcloth, both cotton and wool".
Encyclopaedia Britannica has the following to say: "Calendering is a final process in which heat and pressure are applied to a fabric by pass ing it between heated rollers, imparting a flat, glossy, smooth surface, Lustre, in creases when the degree of heat and pressure is increased.
Calendering is applied to fab rics in which a smooth, flat surface is de sirable, such as most cottons, many linen and silks, and various man made fabrics . . . . .
Calendering is not usually a permanent process.
" In "Glossary of Terms relating to treated fabrics I.S. 2244 1972 published by the Indian Standards Institution it is stated: "Calender A machine comprised of at least three heated rollers, used to produce film and sheet material".
211 "Calendering A mechanical method done by rollers to provide glaze, glossiness, hard ness, lustre, shine and even embossed designs to fabrics.
Calendering is usually done to impart a special finish to fabrics.
" It is accordingly urged by Sri Sorabjee that calendering does not alter the nature of the 'grey fabric ' and would not take cotton fabric out of Rule 49(1)(b).
In regard to the process of "Shearing" Sri Sorabjee relied upon Fairchild 's Dictionary of Textiles which says: "SHEARING: 1.
A process of cutting fleece from sheep generally by power driven clippers or sometimes by hand shears.
Properly sheared fleece will be removed in one solid sheet, which is rolled into a compact bundle with the wool on the inside.
A finishing operation in which uneven threads are mechanically cut or trimmed from the face of the fabric.
Almost always employed for woollen and worsted and extensively employed on other fabrics.
The amount of shearing on napped and pile fabrics varies according to the desired height of the nap or pile; on clearfinish fabrics like gabardine, a very close shearing is given.
A finishing operation in which floating por tions of yarn are cut, e.g., in extra warp or extra filling figured fabrics.
The method is similar to that employed in para 2, above.
" In "Textile Terms and Definitions" 8th Edn. by the Textile Institute: "SHEAR: (1) To Cut the fleece from a sheep.
(2) . . . . . (3) To cut loose fibres or yarn from the surface of a fabric after weaving (also called crop).
" In Handbook on Glossary of Textile Terms (Bureau of Indian Standards): "SHEARING Shearing indicates: 212 (a) Cutting fleece from live sheep, (b)Trimming nap or pile to the required uniform height, and (c) Removing all protruding fibres from the surface of the fabric i.e. cropping.
Both 'calendering ' and 'shearing ' involve an assort ment and variety of processes, some of which might and some others might not affect or alter the nature of the fabric.
Both the expressions, 'calendering ' and 'shearing ' are collective expressions representing a number of sub species of operations which, depending upon the nature of the par ticular operation, may or may not alter the nature of the 'grey fabric ' as such.
Sri Sorabjee submitted that in the present case "calend ering" was not done by 'grooved ' rollers or cylinders but only by plain rollers and the "Shearing" operation was only to cut off protruding stray fibres from the 'grey fabric ', and that actual processes of 'calendering ' and 'shearing ' involved in the present case were amongst the simplest of the processes and did not have the effect of bringing about any change in the 'grey fabric '.
These matters depend on particularities of the facts of each case and are to be decided on a case by case basis, The Tribunal proceeded on the basis that "Calendering" and "Shearing" amounted to process of finishing and that by itself, without more, satisfied the conditions that would take the case out of Rule 49 A(1).
The test applied by the Appellate Tribunal, as well as by the authorities below, is not the appropriate one on the language of Rule 49A.
Any processing that can take a case out of Rule 49A(1)(b) must be a process which renders cotton fabric cease to be 'grey fabric ' as commercially known and understood.
The question whether 'calendering ' and 'shearing ', as actually carried out by the appellant has had the effect of taking the cotton fabric out of Rule 49A(1) should be decided in the light of this test.
In the present cases, the claim of the appellant before the authorities that the calendering process employed by them was such as to give temporary finish by pressing the fabric is not controverted.
No lasting change is brought about.
There is no finding to the contrary.
Likewise the claim as to the "Shearing" which was only to trim 213 protruding, stray fibres from the fabric.
If these are the nature of the operations, the 'grey ' fabric, in the facts of these cases, does not become new and commercially different commodity and cease to be 'Grey cloth '.
There is thus no justification to take it out of Rule 49A(1)(b).
Accordingly, these appeals are allowed, the appellate order, of the Tribunal and the decisions of the authorities below set aside and the liability for payment interest is directed to be computed under Rule 49A(1)(b).
No Costs.
N.P.V. Appeals allowed.
| The house of the appellant detenu was searched and currency notes, bank drafts, bank pass books and loose sheets seized.
The detenu 's statement was recorded and he was arrested.
Iater, he made an application retracting his statement and the Magistrate made an order thereon: "Taken on record".
He was subsequently released on bail with a condition that he would attend Enforcement Department office every day.
On his moving another application, the condition was varied.
Thereafter, an order of detention was made by respondent No. 1 against the appellant under section 3 of the .
The detenu thereupon filed a writ in the High Court challenging the order, which was dismissed.
Before this Court, it was contended on behalf of the detenu that (i) his application for variation of the condition of bail and the order thereon as well as his application retracting his statement and the order thereon were not placed before the Detaining Authority, and non consideration of these vital documents vitiated the detention order; and (ii) copies of bank statements and loose sheets were not supplied to the detenu and this infringed his right to make an effective representation.
Dismissing the appeal, it was, HELD: 1.
The application for variation of condition of bail and the order passed thereon were not material or relevant documents and failure to produce the same before PG NO 1031 PG NO 1032 the Detaining Authority before arriving at his subjective satisfaction had not vitiated the detention order.
[1035A] Asha Devi wife of Gopal Sherwal Mehta (detenu) vs Shiveraj, Addl.
Chief Secretary to the Government of Gujarat Arvindbhai Purshottambhai Patel y. R.O. Iyer and Ors., Writ Petition No. 1304 of 1987 dated 25.2.1988, Bombay High Court, distinguished.
Though the detenu 's application retracting his statement and the Magistrate 's order thereon was not placed before the Detaining Authority, his retraction letter and the reply of the Directorate of Enforcement had been placed before the Detaining Authority, and as such the Authority knew about these facts.
[1035G; 1036A] 3.
There was no dispute that all the documents which were considered by the Detaining Authority in reaching his subjective satisfaction and referred to in the grounds of detention had been furnished to the detenu.
It was not necessary to furnish copies of all the documents including the bank pass books which were not material and relevant for reaching the subjective satisfaction of the detaining authority merely because they were mentioned in the panchnama.
11036F G] 4.
The bank pass books were not vital and material documents in reaching subjective satisfaction of the detaining authority and as such the failure to furnish the bank pass books to the detenu had not infringed any right of the appellant and the order of detention could not be questioned as illegal or vitiated on that account.
[1037B C] Ashok Kumar vs Union of India, [ 198X] ; , referred to.
|
PETITION (CIVIL) Nos.
13325 37.
13366, 13683 to 13687 of 1983, 256 260 & 579 81 of 1984 (Under article 32 of the Constitution of India) Anil Dev Singh, Ashok Sen and S.B. Bhasme R. Satish, S.S. Gupta, J.L. Kotidhar and S.S. Khanduja, for the Petitioners.
Y.S. Chitale, G.L. Sanghi, S.N. Kacker and V.M. Tarkunde Altaf Ahmad for Respondents.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
Writ petitions questioning admissions to the medical colleges at Srinagar and Jammu appear to have become an annual feature in this court.
In the previous years, there was some justification.
It does not appear to be so this year.
In these writ petitions, the selection of candidates for admission to the two medical colleges at Srinagar and Jammu as well as the nominations by the Government of Jammu & Kashmir to medical colleges outside the State are in question.
On Max 24, 1983, the Government of Jammu 585 & Kashmir issued an advertisement inviting applications from permanent residents of Jammu & Kashmir State for admission to the first year MBBS in the medical colleges at Jammu & Srinagar.
One of the conditions of eligibility was that a candidate should have passed the "First TDC (Medical Group) examination from Jammu & Kashmir Board of School Education with not less than 50% of the total marks in English and Science subjects taken together".
There was some relaxation in favour candidates belonging to the Scheduled Castes, etc.
with which we are not now concerned.
We are also not concerned in these writ petitions with the 'reservations ' made in favour of various classes.
We are only concerned with the seats or places available for open competition.
The advertisement expressly mentioned that the candidates would have to appear in a written test of 'TDC Part I Standard, comprising of two papers, one paper consisting of the subjects, Physics and Chemistry and the other, Biology and English.
It was also mentioned in the advertisement that the candidates would be required to appear at a Viva voce examination.
On 7th July, 1983, the Government of Jammu & Kashmir published a notification called the Jammu & Kashmir Government Medical Colleges (Selection of Candidates for Admission to First Year MBBS Course) Procedure Order 1983.
Paragraph 4 of the order which is relevant is as follows: "4.
Merit: The inter se merit of the candidates shall be determined on the basis of the following: (i) Written test . 85 Points (ii) Viva voce . 15 Points Total 100 Points The points earmarked for viva voce will further be subdivided into the following factors: (a) Aptitude . 8 Points (b) G.K.GI . 7 Points Total . 15 Points" 586 On 26th August 1983, a Selection Committee was constituted consisting of the Chairman of the Jammu and Kashmir Public Service Commission as Chairman and two members, namely, the Principals of the two Government Medical Colleges at Srinagar and Jammu.
The quorum for a meeting of the Committee was stipulated as the Chairman and one member.
On the same day by another notification it was directed that the Selection Committee should arrange and conduct the written test and evolve its own procedure for appointing examiners and for the conduct of the examination, etc.
The Selection Committee held its first meeting on September 2, 1983 when one of the members, the Principal of the Government Medical College, Srinagar informed the Committee that his daughter was one of the candidates and that it would not be desirable for him to be associated, at any stage, with the written test to be conducted by the Committee and further that he would not like to be present when his daughter was interviewed.
The Committee took note of the information and agreed with the suggestion.
As the Government had also fixed a quorum for a meeting of the Committee, it was not considered necessary to have a substitute member appointed.
Thereafter a detailed procedure was evolved for the written test and interviews.
The Chairman was authorised to consult the Chairman of the Jammu & Kashmir Board of School Eduction and select the required number of examiners and pacesetters.
The written test was conducted simultaneously at Jammu & Kashmir on September 22, 1983.
The written test was followed by interviews from September 22, 1983 to October 11, 1983.
One important factor which requires to be mentioned here is that the marks secured in the written test by the respective candidates was not available to the Selection Committee when the Committee interviewed the candidates.
The Committee met again on October 25, 1983 by which time the results of the written test were also available.
The Selection Committee proceeded with the task of finalising the selection.
The selected candidates were sent individual intimations and on December 3, 1983, a notification was published by the Government of Jammu & Kashmir informing the public that the result of the written test/Viva Voce held for admission to the First year of the MBBS Course for the Medical Colleges of the State was available in the offices of the Principals of the Government Medical Colleges at Jammu and Srinagar.
Candidates were also told that marks card would be issued on payment of a fee of Rs. 5/ and that any candidate interested in seeing his/her answer book could do so on payment of Rs. 20/ as fee for each paper.
Some of the facts mentioned above were taken by us from the counter affidavits filed on behalf of the Government of Jammu & Kashmir and were not admitted by the petitioners.
We do not however have the slightest 587 doubt about the correctness of these facts, as they are fully supported by contemporaneous official records.
The petitioners have filed these writ petites impugning the selection made by the Committee on various grounds.
In their petitions, they have indulged in several allegations and insinuations for which there is no basis whatsoever.
Shri Anil Dev Singh, learned counsel for some of the petitioners raised three contentions.
The first was that the entire selection was vitiated the presence on the Committee of the father of a candidate.
The second contention was that the entire procedure was bad as the marks obtained by the candidates at the qualifying examination (TDC Part I Medical Group) were not taken into account and not given any weightage whatever.
The third contention was that the viva voce test provided for 7 points for general knowledge and general intelligence whereas it would have been more appropriate to test the general knowledge and general intelligence of candidates by holding a written test instead of a viva voce test.
Shri Anil Dev Singh also generally submitted that the viva voce test was a mere manoeuvre designed to bring in candidates who had fared badly in the written test.
Shri A.K. Sen, learned counsel who appeared for some of the other petitioners made only one submission and it was that 'the viva voce test had worked in an unreasonable and arbitrary manner, in fact and as a matter of principle '.
He elaborated the submission by arguing that though the two papers in the written test carried 550 marks, they were reduced to 85 points as against 15 points for the viva voce test.
The result, according to him, was that candidates who got a lead of 20 25 marks in the written test had to bow down to candidates who got a lead of 3 or 4 points in the viva voce test as the marks obtained in the written test were reduced to points in the ratio of 50 to 85.
Shri Sen also submitted that the questions put to the candidates at the interview were not designed to test either aptitude or general knowledge or general intelligence and for that reason, the selection was vitiated.
He suggested that the final results bore eloquent testimony to the injustice done to the minority community in the State.
We find no substance whatever in any of the submission made by Shri Anil Dev Singh and Shri A.K. Sen.
We may straightway observe that the insinuation that the interviews were so conducted as to do injustice to the minority community appears to us to be uncharitable and Impetuous.
We find that there are candidates belonging to both the majority and the minority communities among the candidates who were able to secure admission because of the points scored by them in the viva voce test, as also amongst the candidates who 588 failed to secure admission because of their low score in the viva voce test.
The inconsiderateness of the allegation is evident from the fact that the marks obtained by the candidates in the written test were not even available to the Selection Committee when they conducted the viva voce test.
This circumstance is sufficient to repudiate the broad allegation freely made by Shri Anil Dev Singh that the viva voce test was designed to facilitate the selection of candidates who had fared badly in the written test.
The submission that the questions put to the candidates at the interview were not designed to test either the aptitude, general knowledge or general intelligence of the candidates is equally without substance.
In the writ petitions, no such averment was made and no instances were given.
In the petition a general allegation was made that the viva voce test had been abused to dilute the otherwise high merit of the petitioners.
On behalf of the respondents, one of the members of the Selection Committee, Dr. S.L. Verma, Principal of the Government Medical College, Jammu filed a counter affidavit in which, he stated '. .
Not less than six minutes were spent on each candidate though in certain cases interview lasted for more than ten minutes.
All the candidates were fully and fairly assessed and it is denied that the candidates were interviewed only to manipulate the results.
The candidates were questioned by the members of Selection Committee only in respect of factors of interview prescribed in SRO 380 dated 7 7 1783 and the entire process was above board and extremely fair.
I submit that the result of the written test became available to the members of the selection committee only after the interviews had been completed", After this counter affidavit had been filed, some of the petitioners chose to file 'rejoinder affidavits ' to suggest that their interviews lasted for about two to three minutes only and that questions relating to the aptitude, general knowledge or general intelligence of the candidates were not asked.
It was stated that some of the candidates were asked the names and occupations of their parents or brothers, and some were asked why he or she wanted to become a doctor and so on.
Aarti Kaul stated in her affidavit that she was also asked to give an example of Collard (?) of the human body, that she replied that it was blood and she was then asked what the constitution of blood was, to which she replied "Plasma Haemoglobin RBC Serum".
Rajesh Gupta, another candidate, stated that his interview lasted for two or three minutes and apart from questions relating to the name and occupation of his father and brothers, he was also asked to define 'absolute zero ' and 'international ampere '.
He answered both the questions.
He claimed that he was asked no que 589 stion relating to aptitude, general knowledge or general intelligence.
We are of the view that there is no genuine basis for any complaint in regard to the nature of the questions which the candidates were asked in the viva voce test.
We accept the statement of D. Verma that the Selection Committee put relevant question to the candidates to test their aptitude, general knowledge and general intelligence.
Anyone who has served on a Selection Committee and interviewed candidates knows that a large number of candidates are nervous and in order to put them at ease, it is necessary to ask them to start with, innocuous questions, such as, what is your father 's occupation ?, which part of the country do you come from?, what is your mother tongue? and so on.
Such questions are intended to enable the candidate to feel at ease and get over his nervousness.
No complaint can surely to made that candidates were put such questions.
We also fail to see how any complaint can be made of the fact that questions on science subjects were asked of candidates seeking admission to medical colleges, Surely such questions are at least as good as questions about the name of the capital of an obscure Latin American State or who captained India in the Second test match against Pakistan in 1980.
We entertain on doubt that the questions asked were proper and relevant.
We add that it is not for the court to sit in judgment over the nature of the questions to be put by the members of the Selection Committee.
It is for the members of the Selection Committee to decide what questions they should ask and so long as the questions are not such as to indicate that the interview was nothing but a make believe.
we must allow the matter to rest there.
It is not the function of the court to weigh each question to find out the extent to which it is related to aptitude, general knowledge or general intelligence.
If the question is not flippant, it is not for the court to say that the question was irrelevant and should not have been asked at an interview.
Perhaps irrelevant questions may also be asked to explore the candidate 's capacity to detect irrelevancies.
It is not for the court to claim to itself the task of determining the nature of the questions to be put to candidates appearing at an interview.
The persons constituting the Selection Committee who may generally be assumed to be men of experience and knowledgeable in regard to men and matters may surely be expected to put the right questions.
In the absence of malafides, the matter is best left to them.
Mr. Sen made a complaint that the marks obtained in the written test were reduce to points and this had resulted in candidates who had fared well in the interview stealing a march over some candi 590 dates who had fared well in the written test.
The rules require that pints should be awarded for the written test and 15 points for the viva voce test.
Therefore, although the written tests carried a total of 550 marks, the marks obtained by each candidate had to be necessarily reduced on the points on the basis that 85 points equalled 550 marks The grievance is plainly imaginary.
Both Mr. Anil Dev Singh and Mr. A.K. Sen invited our attention to the observations of this court in Ajay Hastas case in regard to the desirability of holding viva voce test to select candidates for admission to professional colleges and in regard to the manner of conducting such tests.
The Court after referring to the criticism levelled against viva voce test observed: "Now this criticism cannot be said to be said to be wholly unfounded and it reflects a point of view which has certainly some validity" The court then quoted M.P. Sharma on 'Public Administration ' in 'Theory and Practice ' and Glenn Stahl on 'Public personnel Administration ' and observed "But, despite all this criticism, the oral interview method continues to be very much in vogue as a supplementary test for assessing the suitability of candidates wherever test of personal traits is considered essential.
Its relevance as test for determining suitability based on personal characteristics has been recognised in a number of decisions of this court which are binding upon us".
The Court then quoted from Chitra Lakha and Others vs State of Mysore and Others(2) and A. Pseriakaruppan vs State of Tamil Nadu & Others(3) and observed:, "Its is therefore, not possible to accept the contentions of the petitioners that the oral interview test is so defective that selecting candidates for admission on the basis of oral interview in addition to written test must be regarded as arbitrary.
The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it capable of abuse.
We would, however, like to point out that in the matter of admission to college or even in the matter of public employment, the 591 oral interview test as presently held should not be relied upon as exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification".
The Court then proceeded to consider whether the allocation of as high percentage as 331/3 of the total marks for the viva voce test did not render the admission procedure arbitrary.
It was held that it did make the selection procedure arbitrary but even so the selection was not set aside as 18 months had elapsed since the selection and no mala fides had been established.
The court finally considered the argument that each candidate was not interviewed for more than two or three minutes and relevant questions were not asked.
Taking note of the circumstance that no affidavit had been filed either by a member of the Selection Committee or by any other officer who was present at the interview, it was thought that the allegations of the petitioners had to be accepted.
It was then said that "If that be so, the oral interview test must be held to be vitiated and the selection made on the basis of such test must be hold to be arbitrary".
However, for the reason that 18 months had already elapsed, it was not thought proper to strike down the selections already made.
Thereafter the following observations were made: "We may point out that, in our opinion, if the marks allocated for the oral interviewed not exceed 15 % of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non arbitrariness.
We think that it would also be desirable if the interview of the candidates is tape recorded, for in that even there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee".
It would be noticed that most of the observations were made with a view to enable the Government to devise a selection procedure which would be above reproach.
It was never intended to lay down 592 any hard and fast rules.
In the very nature of things it would not be within the province or even the competence of the Court and the Court would not venture into such exclusive thickets to discover ways out, when the matters are mere appropriately left to the wise expertise of medical academicians interested in the quality and integrity of medical education and public administrators conversant with various administrative and socioeconomic problems, needs and requirements.
The Court 's duty lies in preventing arbitrariness and denial of equal opportunity.
The question as to the subjects in which an entrance test may be held is hardly a matter for the court, unless, of course, the subjects are so arbitrarily chosen as to have not the slightest connection with the object of the examination.
Such a situation is not likely to arise as the authorities may be expected to act reasonably.
Again it is not for the court to lay down whether an interview test should be held at all or how many marks should be allotted for the interview test.
Of course, the marks must be minimal so as to avoid charges of arbitrariness but not necessarily always.
There may be posts and appointments where the only proper method of selection may be by an interview test.
Even in the case of admission to higher degree courses, it may some times be necessary to allot a fairly high percentage of marks for the interview test.
For admission to a Ph. D course, for example, candidates may have to be consummately interviewed, each of them for a few hours, perhaps, before any decision can be taken as to who may be admitted.
That is why we say rigid rules cannot be laid in these matters, and not by Courts.
The expert bodies are generally the best judges, All that we may say is that allocation of a high percentage of marks for admission to under Graduate courses should be avoided as there is a risk of a certain amount of arbitrariness which may lead to frustration of the very object of the selection and disrepute of the system.
Courts interfere when the risk of arbitrariness is so high that arbitrariness is inevitable.
Again the court is not the best judge of what questions may be asked at the interview.
As mentioned by us earlier, all that is necessary is that the questions should not be a mere pretence.
All that we have said above is only to supplement what has been said in Ajay Hasia 's case and in the case of Lila Dhar vs State of Rajasthan(1).
In the latter case after referring to the Kothari Committee 's report on Recruitment Policy and Selection Methods, we said: 593 "It is now well recognised that while a written examination assesses a candidate 's knowledge and intellectual ability, an interview test is valuable to assess a candidate 's overall intellectual and personal qualities.
While a written examination has certain distinct advantage over the interview test there are yet no written tests which can evaluate a candidates 's initiative, alertness, resourcefulness, dependableness, cooperativeness, capacity for clear and logical presentation, effectiveness, in discussion, effectiveness in meeting and dealing with others, adaptability, judgment, ability to make decision, ability to lead, intellectual and moral integrity.
Some of these qualities may be evaluated, perhaps with some degree of error, by an interview test, much depending on the constitution of the interview Board.
" We then referred to Glenn Stahl on 'Public Personnel ' Administration and the United Nations Handbook on Civil Service Law and Practice".
We further said: "Thus, the written examination assesses the man 's intellect and the interview test the man himself and "the twain shall meet" for a proper selection.
If both written examination and interview test are to be essential features of proper selection, the question may arise as to the weight to be attached respectively to them.
In the case of admission to a college, for instance, where the candidate 's personality is yet to develop and it is too early to identify the personal qualities for which greater importance may have to be attached in later life, greater weight has per force to be given to performance in the written examination.
The importance to he attached to the interview test must be minimal.
That was what was decided by this Court in Periakaruppan vs State of Tamilnadu, Ajay Hasia etc.
vs Khalid Mujib Seharvardi & Ors.
, (supra) and other cases.
On the other hand in the case of services to which recruitment has necessarily to be made from persons of mature personality, interview test may be the only way, subject to basic and essential academic and professional requirements being satisfied.
To subject such persons to a written examination may yield unfruitful and negative results, apart from its being an act of cruelty to those persons.
There are, of course, many services to which recruitment is made from younger candidates whose personalities are on the threshold of development and who show signs of great promise, and the discerning may in an interview test, catch a glimpse of the future personality.
594 In the case of such services, where sound selection must combine academic ability with personality promise, some weight has to be given, though not much too great weight, to the interview test.
There cannot be any rule of thumb regarding the precise weight to be given.
It must vary from service to service according to the requirements of the service, the minimum qualifications prescribed, the age group from which the selection is to be made, the body to which the task of holding the interview test is proposed to be entrusted and a host of other factors.
It is a matter for determination by experts.
It is a matter for research.
It is not for Courts to pronounce upon it unless exaggerated weight has been given with proven or obvious oblique motives.
The Kothari Committee also suggested that in view of the obvious importance of the subject, it may be examined in detail by the Research Unit of the Union of Public Service Commission.
" At this juncture while we are quoting from the earlier decision of the court in Liladhar vs State of Rajasthan, we may as well refer to the criticism of Shri Anil Dev Singh that block marks should not have been allocated for general knowledge and general intelligence.
Our observations in Liladhar 's case, which we have extracted below, answer this point also: "The rules themselves do not provide for the allocation of marks under different heads at the interview test.
The criteria for the interview test has been laid down by the rules.
It is for the interviewing body to take a general decision whether to allocate marks under different heads or to award marks in a single lot.
The award of marks under different heads may lead to a distorted picture of the candidate on occasions.
On the other hand the totality of the impression created by the candidate on the interviewing body may give a more accurate picture of the candidate 's personalty.
It is for the interviewing body to choose the appropriate method of marking at the selection to each service.
There cannot be any magic formulate in these matters and courts cannot sit it judgment over the methods of marking employed by interviewing bodies unless, as we said, it is proven or obvious that the method of marking was chosen with oblique motive.
"It is true that in Periakaruppan 's case the Court held that the non allocation of marks under various heads in the interview test was illegal but that was because the instructions 595 to the Selection Committee provided that marks were to be awarded at the interview on the basis of five distinct test.
It was thought that the failure to allocate marks under each head or distinct test was an illegality".
The criticism that the Selection procedure was bad because the marks obtained by the candidates at the respective qualifying examinations were not taken into account, but only the marks in the written test and the oral test conducted by the Selection Committee, has also no force.
We were told that the qualifying examination, that is, the First TDC (Medical Group) examination was held at different times in Jammu and Srinagar.
Naturally the question papers, etc. must have been different.
The Selection Committee apparently thought that it would be better to have a common entrance test.
It appears to us to be a perfectly reasonable procedure.
Even otherwise it is always open to a Selection Committee to insist on taking into consideration marks obtained at the examination held by it only and excluding from consideration marks obtained examinations held by other bodies.
We are unable to see anything wrong in this procedure.
A similar contentio was negatived in Ajay Hasia 's case also where it was observed: "It is difficult to appreciate how a procedure for admission which does not take into account the marks obtained at the qualifying examination but prefers to test the comparative merit of the candidates by insisting on an entrance examination can every be said to be arbitrary".
Two other submissions which were made in the course of the argument may also be disposed of here.
One was that general knowledge and general intelligence were not matters to be tested in the viva voce test but should have been tested in a written examination.
That is not a matter for this Court to decide.
It was a matter for the Selection Committee to decide whether general knowledge and general intelligence could be more appropriately tested in the viva voce test or in the written test.
The other submission was that there was delay in the announcement of results and the delay made the selection suspect.
We find that there was in fact no delay and we only add that the suspicion, if any, was unfounded.
We finally come to the submission on which Shri Anil Dev Singh laid considerable emphasis, namely, that the entire selection was vitiated by the presence on the Selection Committee of the father of one 596 of the candidates.
This was said to be a gross violation of one of the principles of natural justice.
The grievance is not real.
The Principal of Medical College, Srinagar, whose daughter was a candidate for admission to the Medical College informed the Selection Committee at the very outset about this fact and told them that he would not have anything to do with the written test and would not be present when his daughter was interviewed.
The other members of the Selection Committee accepted the suggestion of the Principal and did not think it necessary to address the Government to appoint a substitute member of the Selection Committee since the Government had fixed the quorum for a meeting of the Selection Committee as the Chairman and one other member and it was possible to have a quorum without the Principal of the Medical College.
Srinagar.
The procedure adopted by the Selection Committee and the member concerned was in accord with the quite well known and generally accepted procedure adopted by the Public Service Commissions every where it is not unusual for candidates related to members of the Service Commission or other Selection Committee to seek employment.
Whenever such a situation arises, the practice generally is for the member concerned to excuse himself when the particular candidate is interviewed.
We notice that such a situation had also been noticed by this court in the case of Nagarjan vs State of Mysore (1) where it was pointed out that in the absence of mala fides, it would not be right to set aside the selection merely because one of the candidates happened to be related to a member of the Selection Commission who had abstained from participating in the interview of that candidate.
Nothing unusual was done by the present Selection Committee.
The girl 's father was not present when she was interviewed.
She was one among several hundred candidates.
The marks obtained by her in the written test were not even known when she was interviewed.
And, in fact, we find that as a result of her performance at the interview, she lost rather than gained some places.
Great reliarlce was placed by the learned counsel on A.K.Kraipk & Ors.
vs Union of India (2) on the question of natural justice.
We do not think that the case is of any assistance to the petitioners.
It was a case where one of the persons, who sat as member of the Selection Board, was himself one of the persons to be considered for selection.
He participated in the deliberations of the Selection Board when the clams of his rivals were considered.
He participated in the decisions 597 relating to the orders of preference and seniority.
He participated at every stage in the deliberations of the Selection Board and at every stage there was a conflict between his interest and duty.
The court had no hesitation coming to the conclusion that there was a reasonable likelihood of ibis and therefore, there was a violation of the principles of natural justice.
In the case before us, the Principal of the Medical College, Srinagar, dissociated himself from the written test and did not participate in the proceedings when his daughter was interviewed.
When the other candidates were interviewed, he did not know the marks obtained either by his daughter or by any of the candidates.
There was no occasion to suspect his bona fides even remotely.
There was not even a suspicion of bias, leave alone a reasonable likelihood of bias.
There was no violation of the principals of natural justice.
One last submission, which we may note, was that there was a contravention of one of the regulations made by the Indian Medical Council.
It was said that the regulation prescribed that the marks obtained at the qualifying examination should be taken into consideration in States having only one Medical College and one University/Board/Examination Body conducting the qualifying examination.
This regulation has no application because there are two Medical Colleges in this State.
Though only one Board conducted the qualifying examination, the examinations were conducted separately for Jammu and Srinagar areas and on two different occasions.
In the second place, these regulations, have been held to be directory and not mandatory by this court in State of Madhya Pradesh vs Kr.
Nivedita Jain.(1) We have considered the various points raised by the petitioners at some length, we have said so much and we have quoted from the previous judgments of this Court in extense not because we find any substance in any of the contentions, but because these contentionsare being repeatedly raised in many such cases and we desire to discourage the raising of unnecessary hope in the minds of the young men and women seeking the aid of courts for admission into professional colleges, ready as they are to clutch at any straw.
We dismiss all the Writ petitions but in the circumstances without costs.
| The appellant was a State Judicial Service officer in the grade of Additional District & Sessions Judge.
Consequent upon the decision of the State Government to reorganise the Higher Judicial Service it was decided that a number of posts of the cadre of Additional District & Sessions Judges be abolished and the incumbents of those posts be absorbed as District & Sessions Judges.
The High Court at one of the High Court meetings held to screen the officers in the cadre of Additional District & Sessions Judges, decided to retire the appellant compulsorily on his at tanning the age of SS years under Rule 56(3)(a) of the Fundamental Rules.
It was also decided not to recommend him for promotion to the cadre of District and Sessions Judges.
The appellant was served with an order of compulsory retirement dated August 28, 1981.
The Division Bench of the High Court dismissed the appellant 's writ petition impugning his compulsory retirement.
In the appeal to this Court, it was contended that the High Court had made the recommendation to retire the appellant compulsorily without applying its mind and that the decision was based on collateral considerations and was arbitrary.
On behalf of the High Court it was contended that the personal confidential records of the appellant were considered by the Full Court Meeting and the decision to retire the appellant under Fundamental Rule 56(3)(a) was taken after due consideration of the entire record.
Allowing the appeal: ^ HELD: 1.
It would be an act bordering on perversity to dig out old files to find out some material to make an order against an officer.
Dependence on entries about 20 years before the date on which the decision of compulsory retirement was taken cannot placed for retiring a person compulsorily, particularly when such person concerned has been promoted subsequent to such entries.
[474H; 475A] D.Ramaswami vs State of Tamil Nadu, [19811 2 S.C.R. 75 referred to. 2.
The power to retire a Government servant compulsorily in public interest in terms of a service rule is absolute provided the authority concerned forms 467 an opinion bona fide that it was necessary to pass such an order in public interest.
But if such decision was based on collateral grounds or if the decision was arbitrary, it is liable to be interfered with by Courts.
[469 B C] Union of India vs Col. J.N. Sinha Anr., [1971] 1 S.C.R. 791; Union of India vs M.E. Reddy & Anr., ; ; Swami Saran Saksena vs State of U.P., ; ; Baldev Raj Chadha Y. Union of India & ors ; ; and Brij Bihari Lal Agarwal vs High Court of Madhya Pradesh & Ors. ; referred to.
In the instant case the High Court relied on some adverse remarks relating to 1959 60 or thereabout.
It was true that in the early part of the appellant 's career the entries did not appear to be quite satisfactory.
Some were and some were not good and some were of a mixed kind.
But being reports relating to a remote period, they are not quite relevant or the purpose of determining whether he should by retired compulsorily or not in 1981.
The scrutiny should have been confined to the reports for about ten years prior to the date on which action was proposed to be taken.
All the reports except for 1972 73 and 1973 74 were good and quite satisfactory.
Even in the reports of the said years there was nothing to doubt his integrity.
He was punctual in attending to his work.
The reports for the years 1976 77 to 1980 81 speak in favour of the appellant and not against him.
A perusal of the said reports showed that there was nothing against him.
In these circumstances it was impossible to take the view that the appellant was liable to be compulsorily retired.
[470 E H] 3.
The resolution of the High Court recommending to the Government that the appellant should be compulsorily retired and the impugned order passed under Fundamental Rule 56(3)(a) are quashed.
The resolution of the High Court that the appellant was not fit for promotion to the cadre of District and Sessions Judges is also quashed.
[474 E]
|
ivil Appeal No. 679 of 1978.
From the Judgment and Order dated 30.9.
1976 of the Madhya Pradesh High Court in Misc.
Petition No. 63 of 1976.
S.K. Agnihotri for the Appellants.
Nemo for the Respondent.
The Judgment of the Court was delivered by 265 SABYASACHI MUKHARJI, CJ.
This is an appeal by special leave from the judgment and order of the High Court of Madhya Pradesh, dated 30th September, 1976 in Miscellaneous Petition No. 63 of 1976.
The respondent was the owner of a truck which was seized by the Police Sorwa on 10th December, 1974 for alleged con travention of the provisions of the (hereinafter called 'the Act ') in connection with Crime No. 42 of 1972.
The respondent made applications under Articles 226 and 227 of the Constitution of India, to the High Court to quash the orders of the Judicial Magistrate First Class, Alirajpur and the Sessions Judge, Jhabua re spectively rejecting.
his request for the return of the vehicle on furnishing security and to quash the order of the District Collector and restrain him from proceeding further in pursuance of the notice issued by him under Section 68 of the Act for confiscation of the vehicle and ask for return of the vehicle, or in the alternative to direct the District Judicial Magistrate to dispose of the application in accord ance with law The High Court after setting out the facts addressed itself to three questions, namely, (1) whether Section 6A of the as amended by the Amendment Act No. 30 of 1974 was prospective or retrospective? (2) whether in the facts and circumstances, the criminal Court had jurisdiction to entertain an application under section 523 read with section 516A of the Criminal Procedure Code for the return of the vehicle seized by the Police pending final decision of the criminal case? and (3) whether the respondent was entitled on the merits for the return of the vehicle as prayed for? On the first question, the High Court was of the view that it was a fundamental rule of law that no Statute should be construed to have a retrospective operation unless such a construction appeared very clearly in the terms of the Act, or arose by necessary implication, direct or indirect.
The High Court referred to several decisions which it is not necessary for us to refer to.
It is well settled that the normal rule of construction is that a provision in a statute is prospective but not retrospective, however, in the case of statutes which are merely declaratory or which relate to only matters of procedure or of evidence, it may have retro spective effect if there are indications to that effect or the manifest purpose compels one to construe the Act as such.
On an examination of the statute and the provisions referred to herein, the High Court found that there was no retroactivity.
We are 266 of the opinion that for the reasons given by the High Court, it is difficult to accept the position that there was no retroactivity.
Indeed, Mr Deshpande appearing for the appel lant did not seriously challenge this finding of the High Court.
There is no dispute in this case that the contraven tion of the provisions of the Act is alleged to have taken place in the instant case on the night of 15th March, 1972.
The vehicle was seized on 10th December, 1974.
The High Court examined Section 4 of the Amendment Act, along with Section 6A of the Principal Act and came to the conclusion that there was no retrospective effect.
We are of the opin ion that the High Court was right in holding that Section 4 of the Amendment Act, 1974 was only prospective and not retrospective.
Not only that there were no specific words to indicate the provisions of retrospective effect, but the positive provisions of sub section (2) of section 1 were to the effect that the amendment must be deemed to have come in effect on a particular date, is a pointer and that puts the matter beyond doubt.
The provisions of section 6A as it stood on 15th March, 1972 only were applicable to the present case and section 4 of the Amendment Act, 1974 could not, therefore, be applied as the Act was not in force on the date of offence.
The challenge to the High Court order on this aspect cannot, therefore, be entertained.
It was next contended by the respondent before the High Court that the Criminal Court was empowered under section 7 of the Act to confiscate the vehicle after due and proper inquiry and therefore the proceedings by the District Col lector under section 6A and Section 6B of the Act should be quashed.
Reliance was placed on several decisions and au thorities.
Our attention was drawn to the decision of the Mysore High Court in the case of The State vs Abdul Rasheed, AIR ; Sri Bharat Mahey & Ors.
vs The State of U. P. & Ors., as well as the decision of the learned Single Judge in State of M.P. vs Basant Kumar, [1972] JLJ Short Note No. 99.
On a consideration of the relevant authorities, the High Court came to the conclu sion that the criminal Court had jurisdiction to deal with the matter.
Mr. Deshpande sought to argue that in view of the enactment of the provisions of Section 6A as well as section 7 of the Act, it cannot be held that the criminal Court continued to retain jurisdiction.
He submitted that in view of the enactment of these provisions, it would be useless to hold that the criminal Court continued to retain jurisdiction, otherwise the very purpose of enacting section 6A read with section 7 would be defeated.
We are, however, unable to accept this contention because normally under the Criminal Procedure Code, the Criminal Courts of the country have the jurisdiction and the ouster of 267 the ordinary criminal Court in respect of a crime can only be inferred if that is the irresistible conclusion flowing from necessary implication of the new Act., In view of the language used and in the context in which this language has been used, we are of the opinion that the High Court was right in coming to the conclusion that the Criminal Court retained jurisdiction and was not completely ousted of the jurisdiction.
In that view of the matter, the High Court was therefore right in passing the order under consideration and in the facts and circumstances of the case to return the vehicle to the respondent on furnishing the security In the premise the appeal must fail and is dismissed.
There win, however, be no order as to costs.
N.P.V. Appeal dismissed.
| The petitioner filed a writ petition in the High Court challenging the detention of her husband, Syed Ali Raza Shafiq Mohammed, under section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Sub stances Act, 1988.
The detenu was then already in jail as he was involved in a case under the Act, and his bail applica tion in that case had been rejected.
3"he Division Bench of the High Court dismissed the writ petition.
Before this Court in the Special Leave Petition it was inter alia contended on behalf of the detenu that: (i) the mere possibility of the detenu 's release on bail was not enough for preventive detention unless there was material to justify the apprehension that his detention would be neces sary in order to prevent him from engaging in illicit traf ficking in narcotic drugs and psychotropic substances, in case of his release on bail; (ii) the detention orders of Rai Chand Shah and Jai Lal Vora, who were arrested and detained in the same raid, having been struck down by the High Court on the ground that the medical report in respect of the injuries sustained by Rai Chand Shah was placed in a truncated form before the detaining authority, the detention order of the detenu should also be set aside as it suffered from the same vice; (iii) though the declaration was issued under Sec.
10(1) of the Act on 20.1.1989 but the same was served on the detenu on 10.2.1989 after an unexplained delay of 21 days; and (iv) there was in an inordinate and unex plained delay in considering the representations made by the detenu.
On the other hand, it was contended on behalf of the respondents that: (i) it would depend on the facts and circumstances of each case whether a detention order was to be passed or not in case of a person who was already in custody; (ii) the detaining authority could take into ac count the nature of the antecedent activities of the detenu in order to 269 arrive at the conclusion that it was likely that after his release from custody he would indulge in criminal activities and it was necessary to detain him in order to prevent him from engaging in such activities; and (iii) in the present case there was complete awareness in the mind of the detain ing authority that if he was released on bail he was likely to indulge in the criminal activities.
Dismissing the special leave petition, this Court, HELD: (1) The material placed before the detaining authority and the facts mentioned in the grounds of deten tion clearly go to show that the detaining authority was fully aware that the bail application filed by the detenu had been rejected.
The detaining authority was also con scious of the fact that the two other detenus who were arrested and detained in the same raid had already been released on bail.
[277B C] (2) The antecedents of the detenu which were clear from his own statement went to show that he was initiated in drug trafficking in 1984 and employed as a delivery hay on Rs.30 per day and within a short span of four years had himself started buying and selling Narcotic Drugs and amassed huge movable and immovable properties in Bombay.
In the present raid itself hereoin and Mandrax tablets worth Rs. 1,13,42,000 were seized from the ownership and possession of the detenu.
[277C D] (3) The detaining authority after taking into consider ation the material placed before him, arrived at the conclu sion that the detenu being in judicial custody may under the normal law of the land he granted bail and be in a position to continue to pursue his nefarious activities [277E] (4) The detaining authority in these circumstances considered it necessary to invoke the law of preventive detention under the Act to prevent the detenu from indulging in prejudicial activities in future.
In these circumstances, it cannot be said that the order of detention was illegal on the ground that it was passed while the detenu was already in custody [277F] (5) The facts and circumstances of each case have to be taken into consideration in the context of considering the order of detention in the case of a detenu who is already in jail.
[273G] N. Meera Rani vs Government of Tamil Nadu, JT 478; Dharmendra Sugan Chand Chelwat vs Union of India, ; ; Sanjeev Kumar Aggarwal Union of India, JT ; Smt.
Shashi Aggarwal vs State of U.P., JT and Ramesh Yadav vs District Magistrate, Etah, , referred to.
(6) A perusal of the orders of the High Court quashing the detention orders of Rai Chand Shah and Jai Lal Vora shows that the basis for the detention orders were their confessional statements.
The High Court in this regard had observed that the confessional statement of Rai Chand Shah which also formed integral and vital part of the grounds of detention of Jai Lal Vora being product of threats and injuries sustained by him and further his medi cal report having been placed in truncated form before the detaining authority, their detention became invalid.
But, so far as the case of the present detenu is concerned, his detention was based on entirely distinct and separate mate rials including his own confessional statements.
The basis of the grounds of detention of the present detenu is not rounded on the truncated form of medical report of injuries sustained by Rai Chand Shah.
Thus the present detenu cannot take advantage of any orders passed by the High Court de claring detention orders of Rai Chand Shah and Jai Lal Vora as illegal.
[278A E] (7) So far as the provision of Sub Sec.
(3) of Sec.
3 of the Act is concerned, it clearly provides that for the purposes of clause (5) of article 22 of the Constitution, the communication to a person detained in pursuance of a deten tion order of the grounds on which the order has been made shah be made as soon as may he after the detention, but ordinarily not later than five days, and in exceptional circumstances and for reasons to be recorded in writing, not later than fifteen days, from the date of detention.
This provision thus relates to the communication 01 ' the grounds of detention.
[279B C] (8) The principle of five days and fifteen days as provided in Sub section (3) of Section 3 of the Act relating to communication of grounds of detention cannot be applied in respect of declaration issued under Sec.
10(1) of the Act.
[280F] (9) There is no force in the contention that there was an inordinate delay in considering the representations submitted by the detenu.
The High Court has given adequate and detailed reasons in holding that the delay has been explained by the counter affidavit filed by the respondents.
[281A B] 271
|
Appeal No. 176 of 1960.
Appeal from the judgment and decree dated June 2, 1958, of the Mysore High Court in R. A. No. 268 of 1957.
section K. Javali, K. P. Bhat and B. R. L. Iyengar, for the appellants.
section K. Venkataranga Iyengar and R. Gopalakrishnan, for the respondents.
November 14.
The judgment of the Court was delivered by AYYANGAR, J.
On March 27, 1954, the three Kapurs who are the respondents before us filed original Suit No. 29 of 1954 before the District 48 judge Banglore, against the 3 appellants who are brothers for the recovery of over Rs. 50,000/ and subsequent interest and costs due on a simple mortgage.
Before the suit came on for trial the parties filed a memo of compromise dated September 30, 1955 and they prayed that the suit may decreed in terms there of The Court accepted the application and passed a decree as prayed for the order reading "It is ordered and decreed that the plaintiff 's suit be and the same is hereby decreed as per terms of the compromise, the copy of which is hereunto annexed".
The terms of the Razinama ran as follows "1.
That the defendants herein agree to a decree being passed as prayed for.
That the mortgaged properties are hereby sold for the amount of the decree in full satisfaction thereof.
The defendants will execute a regular sale and within ten days from this date.
That the mortgaged properties are hereby put in possession of the plaintiff (decree holder) by the 3rd, defendant (judgment debtor) and judgment debtors 1 & 2 agreeing to pay rent at Rs. 75 each for the two shops bearing Nos. 12 and 14 respectively, Godown Street, Bangalore City in their actual occupation and by attornment of the other properties in the occupation of the other tenants.
That on the judgment debtors or their nominees tendering the aforesaid decree amount through court or otherwise within the aforesaid one year from the date of 49 the decree, the decrce holders bind themselves to reconvey the properties which are sold to them under this rajinama at their cost provided it is distinctly agreed that time is essence of the contract and provided also that if the judgment debtors default in paying the rents as aforesaid on or before the 15th of any month they will lose the concession hereby offered to thee of having reconveyance of 'the properties in one years ' time.
Attachment on the properties belonging to the 2nd 'and 3rd defendants obtained before judgment stands hereby raised.
The defendants hereby assure that the properties hereby sold are not subject to any attachment.
In ; the event of any attachment subsisting on the properties, it is hereby agreed that the mortgage security shall not be merged by the sale.
" Broadly stated, the question raised in this appeal relates to the executability of cl. 2 of this compromise decree but before examining this contention it is necessary to state a few ' facts.
It would be noticed that under the second sentence of cl. 2 the appellants had to execute a regular sale deed within ten days from September 30, 1955.
They, however, did not do so and thereupon the respondents filed, on ;October 31, 1955, Interlocutory application No. 6 of 1955 (later numbered as Execution Application No. 83 of 1956) for directing the appellants to 'execute the sale deed and they annexed to their application a draft sale deed in which cls.
3 to 6 of the razmama were recited.
Apparently there were disputes between the parties ' each accusing the other :that it had not conformed to its undertaking under :the compromise, but with these we are not now 50 concerned.
Thereafter the appellants filed an application in the suit on March 16, 1956, praying that a sale deed might be executed in favour of a third party to the proceedings who had agreed to purchase the property on terms of paying the full decree amount as provided for by cl. 4 of the Razinama.
This application was opposed by the respondents and there were further applications of a similar type which it is not necessary to detail except to point out that they all proceeded on the basis that the compromise decree was capable of execution without any necessity for a further suit.
The appellants did not succeed in these applications.
It is sufficient if hereafter attention were confined to the application by the respondents E. A. 83 of 1956 by which they sought to get the appellants to execute a sale deed in their favour in accordance with the opening sentence of cl. 2 of the compromise.
The appellants opposed this application on the technical ground that the relief sought could not be had in execution but only by a separate suit in as much as the same did not ""relate to the suit" within O. XXIII, r. 3, Code of Civil Procedure, to whose terms we shall refer presently.
This objection was upheld by the learned District judge of Bangalore and the prayer of the respondents for directing the appellants to execute a sale deed in their favour was rejected.
This order has been reversed by the learned judges of the High Court on appeal by the respondents and it is the correctness 'of this judgment that is canvassed in this appeal which comes before us on a certificate of fitness granted by the High Court under article 133 (1)(a) of the Constitution.
It would be seen from this narration that the point involved in the appeal is very narrow and turns on the question whether the High Court was justified in directing the appellants to execute a sale deed conveying the suit properties to the respondents in the proceedings in execution of the decree in original 51 suit No. 29 of 1954 or whether the respondents could obtain that relief only in an independent suit instituted for that purpose.
It is common ground that the decree embodied the entire razinama including all its terms.
The relevant statutory provision for the passing of decrees by compromise is O. XXIII, r. 3, Code of Civil Procedure, which runs: "Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith, so far as it relates to the suit.
" We do not having regard to the facts of this case, consider it necessary to examine the position whether, when a decree has been passed embodying all the terms as part of the decree, an objection as to the executability of any particular term could be raised in execution proceedings, but shall proceed on the basis that it could be.
There is no dispute that the agreement was lawful and an executable decree could be passed "so far as it related to the suit".
Though in the courts below most of the argument turned on the import of the expression "so far as it relates to the suit" occurring in r. 3, learned Counsel for the appellants did not stress that contention before us, but rather on the construction of the several clauses of the compromise and their inter relation to which we shall advert presently.
We might, however, point out that the learned Judges were right in the view they took that the.
terms of the compromise " related" to the suit.
The property which was to be conveyed consisted entirely of property included in the mortgage and which was therefore liable to be sold in execution of the mortgage decree which was 52 the relief sought in the plaint.
The sale Price for the conveyance under the.
Razinama was the sum for the recovery of which the suit was laid.
There was therefore nothing which was outside the scope of the suit.
Besides all this the conveyance was the consideration 'for the compromise.
In these circumstances, it is not a matter for surprise that learned Counsel for the appellants laid little emphasis on the point which persuaded the teamed District judge to dis miss the respondents application.
Learned Counsel for the appellants however raised before us two contentions in the alternative.
His first and primary contention was that on a proper construction of the compromise, the consideration there for was not the actual execution of the conveyance by the judgment debtor to the decree holder but merely the argument to execute such a conveyance.
He pointed out that under cl. 1 of the compromise the defendants had agreed to a decree being passed as ,prayed for, which meant that a mortgage decree drawn up in the usual form had to be passed.
That decree, it was submitted, was under the compromise agreed to be treated as satisfied and full satisfaction to be recorded immediately on the filing of the 'compromise, and he suggested that the opening words in cl. 2 ',The mortgaged properties are hereby sold ,for the amount of the decree in full satisfaction thereof" was a reference to the agreement to execute the conveyance.
There were other clauses in the compromise 'cls.
3 to 6 but these,he submitted, related ,to the inter se rights between the parties.
The contention was that these other clauses of the razinama including the second limb of cl. 2 were intended to be enforced or implemented not by way of execution of the decree in this suit but that the decree to be passed under cl. 1 was to be treated as fully satisfied on the filing into court of the memo of compromise and the same being recorded by the court with the result that thereafter no portion of the 53 decree remained alive.
We find ourselves wholly unable to accept this argument.
No doubt. under cl 1 there, was to be a simple mortgage decree as prayed for in the suit, but it would, however, not be a proper construction of the 1st sentence of cl. 2 to say that the mere agreement to, convey and not an actual conveyance was intended to operate as a satisfaction of the decree passed or to be passed under cl. 1.
Learned Counsel is, no doubt, 'right in his submission that the sale of ' the property to the decree holders under cl. 2 was not to be absolute in the sense of conferring a right to an unconditional conveyance since the title to be obtained under the sale was subject to the conditions contained in cls.
3 ,to 6 and particularly cl. 4 under which it was stipulated that the title to the property might,, on the happening of certain contingencies, be divested from decree: holders to whom it had been conveyed under cl. 2.
In that sense cls.
2 to 6 might constitute an integrated scheme for adjusting the rights of parties but on that account it would not be open to the construction that the mere agreement to convey contained in cl. 2 (subject to the conditions stipulated in cls.
3 to 6) by itself amounted to a satisfaction of the decree.
The other submission of learned Counsel was that the learned judges should not have directed the execution of a conveyance in favour of the respondents without attaching to it the conditions laid down in cls.
3 to 6 and also without an examination of the question whether the appellants were entitled to enforce the reconveyance provided by those clauses.
On this matter the learned Judges expressed themselves thus: "The decree holder is entitled to execute the decree in respect of clause 2 of the compromise.
No opinion is expressed as to the executability 54 of the other clauses of the compromise as that question has not been raised before us.
" The fact, therefore, was that this point about either the inter relation between cl. 2 on the one hand and cls.
3 to 6 on the other or the contention of the appellants that they were entitled to relief under cls.
3 to 6 was not raised before the High Court and the matter was therefore left open.
The appellants can in the circumstances obviously have no cause for complaint that the High Court did not deal with it.
The question as to whether the appellants are entitled to relief under cls.
3 to 6 or whether they had lost their right to do so, is one which would have to be investigated on facts and cannot therefore be urged before us.
We do not, therefore, propose to pronounce upon it either.
It would, of course, be open to the appellants to agitate their rights in appropriate proceeding if they are 'so advised.
No other point has been urged before us.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| C and some other persons went on a shoot with guns where two persons were shot dead.
In order to create evidence in his favour C got a false report entered by the appellant, a Head constable, in the General Diary purporting to have been made on the previous day to the effect that 0 had deposited his gun.
C and the appellant and the others were tried for various offences including offences under sections 304 A and 218/109 Indian Penal Code.
All the accussed were acquitted but the appellant was convicted under section 218.
The appellant contended that after the acquittal of C, his conviction under section 218 couple not be sustained and (ii) that the prosecution having been launched more than three ' months after the entry was made was barred by limitation under section 42 Police Act.
39 Held, that the appellant was rightly convicted.
Whether C was guilty or not, at the time the entry was made there Was every likelihood of C being prosecuted, for causing the death of two persons.
The acquittal of C did not affect the finding that the false entry was made with the intention to save or knowing it to be likely to save C from legal punishment.
The acquittal of C under section 218/109 did not exonerate the appellant as it had been found that he had made the false entry with a view to save C. Held, further, that the prosecution was not barred by section 42 of the Police Act.
Sections 36 and 42 read together showed that section 42 was applicable only to prosecutions for offences under the Police Act and not to prosecutions under the Penal Code or other Acts.
|
il Appeals Nos. 751 of 1957 and 10 of 1958.
Appeal from the judgment and order dated December 7, 1956, of the Calcutta High Court in Matters Nos. 29 and 58 of 1956.
M. C. Setalvad, Attorney General of India, C. K. Daphtary, Solicitor General of India, Sukumar Mitra, Sankar Ghosh and B. N. Ghosh, for the appellants in C. A. No 751 of 57.
M. C. Setalvad, Attorney General of India, Sankar Ghosh and D. N. Mukherjee, for the appellants in C. A. No. 10 of 1958.
section M. Bose, Advocate Generalfor the State of West 905 Bengal, B. Sen and P. K. Bose, for the respondents (in both the appeals). 1960.
September 27.
The Judgment of the Court was delivered by HIDAYATULLAH J.
These two appeals on a certificate under article 132(1) of the Constitution have been filed respectively by the Burmah Shell Oil Storage land Distributing Co., of India, Ltd., and the Standard Vacuum Oil Company (in this judgment referred to as the appellant Companies) against a common judgment of the High Court of Calcutta dated December 7, 1956.
The High Court was moved for writs of mandamus, prohibition and certiorari under article 226, but the petition was dismissed by D. N. Sinha, J. The matter arises out of assessment to sales tax on sale of motor spirit for aviation purposes (shortly, aviation spirit) supplied by the appellant Companies to aircraft bound for countries abroad, under the Bengal Motor Spirit Sales Taxation Act, 1941, as amended by section 2(a)(i) of the Bengal Motor Spirit Sales Taxation (Second Amendment) Act, 1954.
The Commercial Tax Officer, the Commissioner of Commercial Taxes and the State of West Bengal have been joined as respondents in this Court, as they had previously been joined in the High Court.
The appellant Companies deal in Petroleum and Petroleum products, and carry on business at Calcutta.
They maintain supply depots at Dum Dum Airport from which aviation spirit is sold and delivered to aircraft proceeding abroad and belonging to several Companies.
It appears that such sales were treated by the sales tax authorities in the State of Bombay as not falling within the taxing Acts in force in the Bombay State by reason of the provisions of article 286 of the Constitution.
The sales tax authorities in West Bengal, however, took a different view of the matter, and after sundry procedure resulting in assessment of tax, presented a demand notice for the tax assessed which was paid under protest by the appellant Companies.
The appellant Companies filed petitions under article 226 of the Constitution in the High 906 Court of Calcutta questioning the legality of the imposition but without success.
They have now filed these appeals after obtaining a certificate, as already stated.
The contentions in this Court, as they were also before the High Court, 'are that such sales are made in the course of export of such aviation spirit out of the territory of India, that they take place outside the State of West Bengal, that inasmuch as aviation spirit is delivered for consumption outside West Bengal, the sales cannot fall within the Explanation to sub cl.
(a) of the first clause of article 286, and that unless they can be said to become "Explanation Sales", the power to tax does not exist.
It is argued in support of the last contention that there is not even an averment in the reply of the respondents before the High Court that aviation spirit is delivered for consumption within West Bengal.
The case in the High Court was restricted to consideration of supplies to aircraft which either proceed to foreign countries directly from Dum Dum Airport, or do so ultimately, though landing en route at some place or places in the Indian territory.
The case has been similarly confined in this Court also, and we are not required to express any opinion about sales of aviation spirit to aircraft flying from one place in West Bengal to another place also within that State, or even to some place in another State in the territory of India.
The facts are fortunately not ' in dispute.
Both parties admitted the procedure for the supply of aviation spirit to aircraft.
Briefly described, it is as follows: Before the arrival of such an aircraft, a representative of the appellant Companies applies to the Airport Customs Officer to depute an Officer to supervise the refuelling of the aircraft.
After the aircraft lands, the captain or the Ground Engineer gives instruction about the quantity of aviation spirit required, and on permission being given by the Customs authorities, the stated quantity is delivered in the presence of the Customs Officer deputed.
Details of the delivery are entered in a delivery receipt, which 907 is signed by the representative of the appellant Companies and the Customs Officer deputed.
Duty drawback shipping bills are also drawn up to show the ' quantity of aviation spirit and are countersigned by them and also by a representative of the aircraft.
Later, claims for refund of customs duty are made, and refund is granted.
In the petition filed in the High Court, it was averred that such aviation spirit is required for consumption during flight and/or outside the territory of India, and is thus delivered for purposes of consumption outside West Bengal and in some cases outside the territorial limits of India as well.
It was also stated that it was sold in the course of export outside the territory of India, and drawback of customs duty was obtained.
In the reply of the respondents, it was stated that the refund of customs duty was an irrele vant fact for the purpose of assessment.
It was further stated in the affidavit of the Commercial Tax Officer as follows : " I further state that a foreign bound aircraft on leaving Dum Dum Airport consumes a portion of the aviation spirit taken in by it at the Airport within the territory of West Bengal before it moves out of the said territory or the territory of India.
I do not admit that the entire quantity is used outside the territorial limits of India as alleged.
I deny that the sale of such aviation spirit takes place outside the State of West Bengal and state that the sale takes place within the State of West Bengal and the purchaser pays its price within the State of West Bengal.
The sale of such aviation spirit is completed by delivery at the Dum Dum Airport in West Bengal.
" We have mentioned this fact, because it was argued that the respondents had not averred clearly that aviation spirit was sold for consumption within West Bengal even though the appellant Companies had denied it.
The respondents pointed out that at least some of the aviation spirit must be consumed in the State, and that this was so stated in the affidavit filed in reply to the petition and quoted by us.
This is 908 hardly a case for a fight on pleadings, especially as the entire procedure of the supply of aviation spirit and the use to which it is put are beyond controversy.
The question that we have to consider is one of principle, and the answer depends upon broad facts and not on technicalities.
Either the whole of the sale is within the taxing power of the State or it is not, and the fact that aviation spirit is consumed in taking off or in flying over the territory of West Bengal before it leaves that territory would make no difference either way to the principles applicable.
Though parties entered into a debate on this part of the case, we do not propose to consider it, because, in our opinion, the question must be considered in substance and not in abstractions.
The liability to sales tax, if any, is attracted when aviation spirit is sold, and immunity can only be claimed, if, as stated in article 286(1)(a) and the Explanation, the sale can be said to take place outside the State or can be regarded under article 286(1)(b) as having taken place " in the course of. export of the goods out of, the territory of India".
Before we take up these two questions, we desire to refer to some provisions of certain Acts, which bear upon the matter.
The Indian , is an Act for the control of the manufacture, possession, use, operation, sale, import and export of aircraft.
Section 16 of this Act provides that the Central Government may, by notification in the Official Gazette, declare that any or all of the provisions of the Sea Customs Act shall, with such modifications and adaptations as may be specified in the notification, apply to the import and export of goods by air Sections 2(3) and (4) define " import" and " export ' respectively as " bringing into India " and " taking out of India ".
A notification issued under the Indian , the rules framed thereunder and the Indian Aircraft Rules, 1920, appointed the Civil Aerodrome, Dum Dum, a Customs Aerodrome, and to that Customs Aerodrome, the provisions of the Sea Customs Act mutatis mutandis were made applicable by r. 63 (Part IX) of the Indian Aircraft Rules, 1920.
As 909 a result, Dum Dum Airport became a Customs Aerodrome, and any aircraft coming into India from foreign countries or leaving for any such country has to comply with ordinary Customs formalities.
Section 42 of the Sea Customs Act, which allows drawback on re export and is applicable mutatis mutandis, provides: " When any goods, capable of being easily identified, which have been imported by sea into any customs port from any foreign port, and upon which duties of customs have been paid on importation, are re exported by sea from such customs port to any foreign port, or as provisions or stores for use on board a ship proceeding to a foreign port seven eighths. of such duties shall, except as otherwise hereinafter provided, be repaid as drawback: ".
(Provisos omitted).
Under section 51, no drawback is allowed unless the claim to receive such drawback is made and established at the time of re export, and under section 52, the person claiming drawback has to make and subscribe to a declaration.
The procedure which is described in an earlier portion of this judgment bears upon these matters.
Coming now to the taxing Acts with which we are concerned, it may be pointed out that the Bengal Motor Spirit Sales Taxation Act, 1941, originally did not contemplate levy of a tax on the sale of aviation spirit.
Motor spirit was defined to mean, " any liquid or admixture of liquids which is ordinarily used directly or indirectly as fuel for any form of motor vehicle or stationary internal combustion engine, and which has a flashing point below 76 degrees Fahrenheit ".
Sub section (4) of section 3, which is the charging section, provided that no tax shall be levied on the sale of any motor spirit for the purpose of aviation.
The Act was amended by the Second Amendment Act, 1954, and sub section
(4) of section 3 was omitted, and the proviso to the first sub section was re enacted, adding one more clause to the following effect 910 the tax on all retail sales of motor spirit for the purpose of aviation, which are effected on or after the date of the commencement of the Bengal Motor Spirit Sales Taxation (Second Amendment) Act, 1954, shall be charged at the rate of three annas per gallon ".
By the Bengal Motor Spirit Sales Taxation (Amendment) Act, 1955, the original Act was further amended.
To the definition of" motor spirit ' quoted by us earlier, an Explanation was retrospectively added, which reads as follows: " Explanation For the avoidance of doubt, it is hereby declared that in this Act, the expression ' vehicle ' means any means of carriage, conveyance or transport, by land, air or water ".
The original Act was again amended by the Bengal Motor Spirit Sales Taxation (Amendment) Act, 1957.
This time, among other amendments involving rates of tax, the words " and which has a flashing point below 76 degrees Fahrenheit " were omitted from the definition of 'motor spirit '.
The result of all these amendments was to make retail sales of aviation spirit liable to sales tax, and 'retail sale ' was defined, at all material times, as a sale " by a retail dealer for the purpose of consumption by the purchaser ".
After the coming into force of the Constitution, section 22, in terms of article 286, was added to the original Act by paragraph 3 of, and the Eleventh Schedule to, the Adaptation of Laws Order, 1950.
It read: " 22(1).
Nothing in this Act shall be construed to impose or authorise the imposition of a tax on the sale or purchase of motor spirit: (a) where the sale or purchase takes place outside the State of West Bengal; (b) where the sale or purchase takes place in the course of the import of such motor spirit into, or export of such motor spirit out of the territory of India; or (c) (omitted).
(2) The Explanation to clause (1) of article 286 of the Constitution shall apply for the interpretation of clause (a) of sub section (1) 911 Clauses (a) and (b) of the first sub section do no more than re enact the prohibition contained in article 286 of the Constitution with modifications to Suit motor spirit, and the Explanation to sub cl.
(a) of cl.
(1) of the said Article in the Constitution has been applied without an attempt to modify or adopt it.
The Explanation to sub cl.
(a) of the first clause of article 286, the meaning of which was much in dispute in this case, may conveniently be quoted here.
It reads: " Explanation For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general laws relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State ".
The High Court of Calcutta in its judgment dealt with the points urged, and rejected them.
The reasons of the High Court briefly were as follows: The learned Judge declined to draw any inference from the fact that customs duties were refunded as drawbacks on aviation spirit delivered to the aircraft.
He held that he was not required to decide whether the appellant Companies were entitled to claim and receive drawbacks of customs duty.
He then gave a finding that the sale was physically within the State, because both the buyer and the purchaser were, at the time of sale, within the State of West Bengal even though delivery of aviation spirit was beyond the customs barrier.
He then considered the legal position in the light of article 286 from three points of view.
He first held that it was not an inter State transaction, because both the parties were in the State of West Bengal, and aviation spirit was not delivered outside the State.
Thus, he held that el.
(2) of article 286 did not apply.
In this connection, he relied upon the decision of this Court in the Bengal Immunity Co., Ltd. vs State of Bihar and others (1).
He next considered (1) 912 the matter under the first sub clause, and held that unless the fiction created by the Explanation applied, the sale must be treated as within the State under the law relating to sale of goods.
In his opinion, the sale being completed within the State of West Bengal both as regards contract and delivery, the fiction could not be held applicable, because no " outside " State was involved, even though the aircraft might have to consume some aviation spirit while flying over the " outside " State.
He, therefore, held that the Explanation and article 286(1)(a) which it seeks to explain, were both not applicable.
He then considered the matter from the point of view of article 286(1)(b).
He explained on the authority of the decision of this Court in State Of Travancore Cochin and others vs Shanmugha Vilas Cashewnut Factory and others (2) that the expression " in the course of export out of the territory of India" referred to sales which, by themselves, occasioned the export of goods out of the territory of India and not to sales for the purpose of export, even though the goods ultimately passed the customs barrier.
He pointed out that there was no foreign purchaser to whom the aviation spirit could be said to have been exported, and that aviation spirit, in fact, was consumed en route and never taken to any foreign territory.
He also pointed out that no bills of lading or shipping documents were drawn up, and therefore there was neither an export nor a sale in the course of export out of the territory of India.
The appellant Companies claim that these sales come within the exemption granted the sub cls.
(a) and (b) of the first clause of article 286.
To claim the exemption granted by the first sub clause, they rely upon certain decisions of this Court, and contend that unless the sale can be said to fall within the Explanation, it must be treated as a sale outside the State of West Bengal, and is thus exempt.
With regard to the second sub clause, they contend that there was an export out of the territory of India inasmuch as aviation spirit was taken abroad and any sale by which it is taken abroad is also exempt These (2) ; 913 arguments, as has been shown above, were urged before the High Court, but were not accepted.
These two arguments need to be considered separately, as they have little in common.
Article 286 places restrictions upon the power of the States to tax sales and purchase of goods, and cuts down the amplitude of Entry No. 54 in the Second List of the Seventh Schedule.
Other restrictions are also to be found in Part XIII of the Constitution.
With those we are not concerned in these appeals.
We are also not concerned with the subsequent amendment of article 286, nor with the ban imposed by the second clause of the Article on taxes on sales in the course of inter State trade and commerce.
We are concerned with the first clause only, as it stood before the amendment.
That clause is divided into two sub clauses.
The first sub clause prohibits the imposition of tax on the sale or purchase of goods where the sale or purchase takes place outside the State.
AD Explanation is added to this sub clause, which has been quoted by us earlier.
This Explanation has led to a long controversy in this Court during which somewhat conflicting views have been expressed about its meaning.
This conflict has further been accentuated when the interplay between the two clauses has been considered.
The view now accepted is that the bans imposed by the two clauses are independent and separate and each must separately be got over.
In view of this, we are not required to travel beyond the first clause in this case.
We have heard widely divergent arguments in these appeals.
The learned Attorney General who appeared on behalf of the appellant Companies read to us copious extracts from the earlier decisions of this Court, and contended that unless the sales could be said to fall within the Explanation so as to become 'Explanation sales ', they must be regarded as having taken place outside the State of West Bengal and for that reason, not taxable.
According to him, they could only become 'Explanation sales ' if aviation spirit was delivered for the purpose of consumption within the State of West Bengal.
The learned Advocate General of West Bengal, on the other band, 914 contended that the Explanation did not apply to the facts here, and that the observations in the rulings were not relevant.
The first sub clause in its opening portion says that no law of a State shall impose or authorise the imposition of a tax on the sale or purchase of goods where such sale or purchase takes place outside the State.
It is thus plainly meant that a State is not to tax sales which take place outside that State.
But, where does a sale take place ? Numerous elements go to make a sale, and they may take place in more than one State.
Under the law relating to the sale of goods, property passes on the happening of certain events.
When they happen, the sale is complete.
Now, a contract for the sale of goods may be entirely within one State when all parties are within the State, the offer and acceptance also take place there, and the goods are also within that State, and there, the property in the goods passes and delivery also takes place.
But it may also happen that the constituent elements may be spread over two or more States, some of the elements described above falling within one State and some others falling within one or more other States.
Prior to the Constitution, multiple taxation of a single transaction of sale was possible, and Provincial legislation then existing clearly demonstrates that States having Some connection with the sale because one or more elements took place within those States, treated this as sufficient nexus between the taxing power and the States, authorising them to tax sales even where property passed in another State.
The Constituent Assembly desired to achieve certain objects in the matter of taxation, particularly in relation to sales tax.
Article 286 achieves, among other objects, the avoidance of this multiple taxation.
The first sub clause of the Article is clear in its terms, when it says that a State cannot tax sales which take place outside the State.
The converse is also true, that is to say, that a State can tax a sale of goods which takes place within the State.
By sale here is meant a completed transaction by which property in the goods passes.
Before the property in the 915 goods passes, the contract of sale is only executory, and the buyer has only a chose in action.
" Property in the goods passes either by the fulfilment of the conditions of the contract, if any, or by the operation of the law relating to the sale of goods.
Starting from the basic fact that what is to be taxed under the Constitution is a sale completed by the transference of property in the goods, we have to see at what stage and where this happens.
The taxable event thus cannot be found at any earlier stage when the sale is not completed by the passing of property.
The critical taxable event is the passing of property in the goods as a result of a contract for their sale.
The parties to the contract can agree when that event is to take place, but where it happens may be a matter of some doubt and even of difficulty.
Where the parties have not agreed as to the time of the passing of property, the law relating to the sale of goods furnishes the answer.
There too, there may be the same difficulty as to the place of the passing of property.
The place of physical delivery of the goods does not help to solve this difficulty, because delivery may, precede or follow the passing of property in the goods.
Delivery of goods is, thus, not always an element which determines the completion of a sale, because the sale may be completed both before and after delivery.
The Constitution, however, thinks in. ' terms of a completed sale by the passing of property and not in terms of an executory contract for the sale of goods.
The essence of the matter being thus the passing of property in goods,, there was always a likelihood of more than one State claiming the right to tax the same transaction.
One State might claim that goods in which property passed were in that State, and hence property in the goods passed there.
Another State might claim that the conditions precedent to the passing of property were fulfilled in that State and hence the sale was completed by the passing of property there.
Yet another State might claim that property passed in that State according as one or more events connected with the passing of property took place within that State.
916 It was to avoid this welter of confusion as far as possible that the Explanation was added, and it also avoided multiple taxation.
The Explanation serves two purposes.
It indicates the State where the tax can be levied, and also indicates the State or States where it cannot.
It achieves these two purposes excluding all considerations as to where property the goods can be said to have passed under the law relating to the sale of goods.
The purpose is achieved by the Explanation and particularly by the non obstante clause in the Explanation.
Any State claiming to tax a sale of goods on the ground that it was completed by the passing of property in the goods in that State could not do so, if the goods as a direct result of the sale were delivered for the purpose of consumption in another State.
The Explanation creates a fiction that the sale must be deemed to have taken place in the latter State and not in the State where the sale was completed by reason of passing of property.
It thus discards the test of passing of property and adopts the test of delivery 'as a direct result of such sale for the purpose of consumption in that State '.
Where more than one State is involved, any State claiming to tax the 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, because the sale is complete only on the passing Of property, and till the sale is complete, liability to tax does not arise.
Once the sale is complete, the delivery State gets the right to tax the sale by the fiction introduced.
Now, the Explanation must be ' interpreted according to its own tenor, and it is meant to explain el.
(1)(a) of the Article and not vice versa.
It is an error to explain the Explanation with the aid of the Article, because this reverses their roles.
The Explanation discards the test of passing of property, and adopts the test of delivery as a direct result of the sale for purposes of consumption.
This delivery may be in the State where the passing of property also took place, but then, there is no difficulty.
The sale is then entirely within the State.
The sale is outside 917 the State only when the passing of property takes place in the State, but that is not the State where the goods have been actually delivered as a direct result of the sale for purposes of consumption in that State.
The Constitution has, thus, for certain cases shifted and confined the situs of the taxable event to the State of the delivery of goods; but it must be remembered that this delivery,may precede as well as follow the passing of property.
It is, therefore, plain that no single element of the contract of sale is by itself a decisive factor in determining which State is to tax the sale where there are more States than one involved, except the test of actual delivery of the goods in a State as a direct result of the sale for purposes of consumption in that State, and it is that State and that State only which has the right to tax the sale and none other.
The Explanation is not applicable, unless there are more States than one involved.
It is only a key to find out which of the States is competent to tax and which are not, and is by no means a definition of an 'outside sale '.
It is an Explanation, which determines which State out of those connected with the transaction of sale can tax it.
The interpretation which we have placed upon the first sub clause of article 286(1) is substantially the same, as was placed in the earlier rulings of this Court.
In The State of Bombay and another vs The United Motors (India) Ltd. and others (1), it was pointed out that the Explanation formulated an easily applicable test to find out an 'outside sale ' and this, it was said, was done " by defining an inside sale ".
It was observed further: " Are the goods actually delivered in the taxing State, as a direct result of a sale or purchase, for the purpose of consumption therein ? Then, such sale or purchase shall be deemed to have taken place in that State and outside all other States ".
Certain reasons were given why this test was adopted, and it is these reasons and their effect on the second clause, which led to a re examination of the subclause in The Bengal Immunity Company Limited vs (1) ; 117 918 The State of Bihar and others (1).
The majority in that case touched upon the various grounds which were advanced before this Court, but declined to express "any final opinion upon the matter ".
The case went on to decide that the bans imposed by the two clauses of article 286 were independent, and needed to be separately enforced.
But, on the meaning of the Explanation, no different view was expressed.
Again, in M/8.
Ramnarain Sons Ltd. vs Asst.
Commissioner of Sales Tax and others(2), it was observed as follows: "So far as article 286(1)(a) is concerned, the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category and when a transaction is thus determined to be inside a particular State it necessarily becomes a transaction outside all other States.
The only relevant enquiry for the purposes of article 286(1)(a), therefore, is whether a transaction is outside the State and once it is determined by the application of the Explanation that it is outside the State it follows as a matter of course that the State with reference to which the transaction can thus be predicated to be outside it can never tax the transaction (Italics supplied).
Now, in so far as this case is concerned, the words the Explanation determines by the legal fiction created therein the situs of the sale in the case of transactions coming within that category " in the extract last quoted, become important.
The first question to consider is whether these cases can be governed by the Explanation at all.
The learned Attorney General contends that the power to tax these transactions can only be found if the sales were 'Explanation sales ', in the sense that the goods were delivered as a direct result of the sale for consumption in West Bengal.
In our opinion, the explanation can apply only if more than one State is involved in the same transaction.
When there is no other State in which the goods can be said to be delivered for consumption, apart from the State where the property in the goods passed, the Explanation is not needed as a key.
The (1) (2) ; 492. 919 power to tax in those circumstances which is exercisable by virtue of transfer of title to the property, can only be taken away if there be some other State in ' which the goods as a direct result of the sale were delivered for consumption.
But if there is no such other State, the question does not arise.
In the present cases, there is no such rival State.
Where the purchaser buys goods in West Bengal for his own consumption, the test of an 'inside sale ' is satisfied when the property in the goods passes in the same State and all the elements of the contract of sale also take place inside it.
Where the property in the goods passes to a buyer who is also the 'ultimate ,consumer, the terms of the Explanation are themselves satisfied.
To exclude, thus, the powers of taxation of the State of West Bengal, the appellant Companies must be able to point out some other State where the goods can be said to have been delivered as a direct result of the sale for the purpose of consumption in that other State.
Unless they can do so and they have not so done before us they cannot invoke the Explanation, and the cases, to borrow the language of the last quotation, cannot be said to be "within that category ".
In our opinion, the learned Advocate General of West Bengal was right in his argument (which was accepted by the High Court) that the ban contained in article 286(1)(a) and the Explanation does not apply.
The appellant Companies next rely upon article 286 (1)(b), which provides that: " No law of a State shall impose or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place in the course of the. . export of goods out of, the territory of India ".
The contention is that the sales in question must be regarded as having taken place in circumstances which exempt sales under the sub clause.
This the appellant Companies argue from the following facts that aviation spirit is delivered outside the customs barrier, that aviation spirit is taken out of the territories of India, and that the sales occasion this 920 export.
They rely upon the definition of 'export ' in other Acts to show that the word means no more than 'taking out of the country '.
This clause of the Article has been construed on previous occasions by this Court, and what is meant by the expression " in the course of " has been well.
established.
Indeed, in State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. (1), this Court observed that the point could no longer be said to be at large.
Fortunately, there is less disagreement on this point than on the interpretation of the Explanation, and it is sufficient to refer to the leading decisions of this Court.
The earliest case on the subject is State of Travancore Cochin and others vs The Bombay Co. Ltd. (2), where four possible meanings of the expression " in the course of " were considered.
It is not necessary to refer to all of them here, and it is sufficient to point out that of the view that the clause is not restricted to the point of time at which goods are exported from India and that the series of transactions which necesssarily precede export of goods also come within the purview of the clause, it was said that it was too wide.
It was observed by this Court that: "A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for transport out of the country by land or sea.
Such a sale cannot be dissociated from the export without which ' it cannot be effectuated, and the sale and resultant export form parts of a single transaction.
Of these two integrated activities, which together constitute an export sale, whichever first occurs can well be regarded as taking place in the course of the other.
" The meaning of these observations was further explained in State of Travancore Cochin and others vs Shanmugha Vilas Cashew Nut Factory and Others (3).
It was observed (p. 62) that the words "export out of " in this context did not refer to the article or commodity exported, and that the reference to "the (1) A.I.R. 1958 section C. 1002.
(2) ; (3) ; 921 goods " and to the "territory of India " made it clear that the words " export out of " meant the exportation out of the country.
It was then added that, "The word 'course ' etymologically denotes movement from one point to another, and the expression 'in the course of ' not only implies a period of time during which the movement is in progress but postulates also a connected relation.
" This inter connection of the sale sought to be taxed with the course of export was emphasised again in clear terms thus : " The phrase 'integrated activities ' was used in the previous decision to denote that 'such sale ' (i.e., a sale which occasions the export) I cannot be dissociated from the export without which it cannot be effectuated, and the sale and the resultant export form parts of a single transaction '.
It is in that sense that the two activities the sale and export were said to be integrated.
A purchase for the purpose of export like production or manufacture for export, is only an act preparatory to export and cannot, in our opinion, be regarded as an act done I in the course of the export of the goods out of the territory of India ' any more than the other two activities can be so regarded.
" From the views here expressed, it follows that every sale or purchase preceding the export is not necessarily to be regarded as within the course of export.
It must be inextricably bound up with the export, and a sale or purchase unconnected with the ultimate export as an integral part thereof is not within the exemption.
It may thus be taken as settled that sales or purchases for the purpose of export are not protected, unless the sales or purchases themselves occasion the export and are an integral part of it.
The views expressed in these two cases were accepted and applied in State of Madras vs Gurviah Naidu and Co. Ltd. (1), Kailash Nath vs State of U.P. (2), State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. (3) and Gordhandas Lalji vs B. Banerjee (1) A.I.R. 1956 S.C. 158.
(2) A.I.R. 1057 S.C. 790.
(3) A.I.R. 1958 S.C. 1002.
922 and others (1).
These cases do not advance the matter further, and it is, therefore, not necessary to refer to them in detail.
In the earlier cases, it was not necessary to explain the meaning of the word 'export ', because there was always a foreign buyer to whom the goods were ultimately sent.
In none of the cases the facts found here were present.
Here, the buyer does not export the goods to a foreign country, but purchases them for his own use on the journey of the aircraft to foreign countries.
This difference is vital, and makes the position of the appellant Companies, if anything, weaker.
It is for this reason that the appellant Companies depend on a wide meaning of the word 'export ', which they illustrate from other Acts where the word is tantamount to "taking out of the country '.
We are of opinion that this meaning cannot be given to the word 'export ' in the clause.
The word 'export ' may conceivably be used in more senses than one.
In one sense, 'export ' may mean sending or taking out of the country, but in another sense, it may mean sending goods from one country to another.
Often,, the latter involves a commercial transaction but not necessarily.
The country to which the goods are thus sent is said to import them, and the words 'export ' and import ' in this sense are complementary.
An illustration will express this difference vividly.
Goods cannot be said to be exported if they are ordered by the health authorities to be destroyed by dumping them in the sea, and for that purpose are taken out of the territories of India and beyond the territorial waters and dumped in the open sea.
Conversely, goods put on board a steamer bound for a foreign country but jettisoned can still be said to have been exported ', even though they do not reach their destination.
In the one case, there is no export, and in the other, there is, though in either case the goods go to the bottom of the sea.
The first would not be within the exemption even if a sale was involved, while any sale in the course of the second taking out would be.
In both, the goods were taken out of the country.
The difference lies in (1) A.I.R. 1958 S.C. 1006.
923 the fact that whereas the goods, in the first example, had no foreign destination, the goods, in the second example, had.
It means, therefore, that while all exports involve a taking out of the country, all goods taken out of the country cannot be said to be exported.
The test is that the goods must have a foreign destination where they can be said to be imported.
It matters not that there is no valuable consideration from the receiver at the destination end.
If the goods are ex.
ported and there is sale or purchase in the course of that export and the sale or purchase occasions the export to a foreign destination, the exemption is earn.
Purchases made by philanthropists of goods in the course of export to foreign countries to alleviate distress there, may still be exempted, even though the sending of the goods was a not a commercial venture but a charitable one.
The crucial fact is the sending of the goods to a foreign destination where they would be received as imports.
The two notions of export and import, thus, go in pairs.
Applying these several tests to the cases on hand, it is quite plain that aviation spirit loaded on board an aircraft for consumption, though taken out of the country, is not exported since it has no destination where it can be said to be imported, and so long as it does not satisfy this test, it cannot be said that the sale was in the course of export.
Further, as has already been pointed out, the sales can hardly be said to 'occasion ' the export.
The seller sells aviation spirit for the use of the aircraft, and the sale is not integrally connected with the taking out of aviation spirit.
The sale is not even for the purpose of export, as explained above.
It does not come within the course of export, which requires an even deeper relation.
The sales, thus, do not come within article 286 (1)(b).
These sales must, therefore, be treated as made within the State of West Bengal.
The customs barrier is a barrier for customs purposes, and duty drawback may be admissible if the goods once imported are taken out of the country.
The customs duty drawbacks have nothing to do with the sale of aviation 924 spirit, which takes place in West Bengal.
The cus toms barrier does not set a terminal limit to the territory of West Bengal for sales tax purposes.
The sale beyond the customs barrier is still a sale, in fact, in the State of West Bengal.
Both the buyer and the seller are in that State.
The goods are also there.
All the elements of sale including delivery, payment of price, take place within the State.
The sale is thus completely within the territory of the taxing State.
No outside State is involved where the goods can be said to have been delivered for consumption as a direct result of the sale that takes place.
Article 286(1)(a) and the Explanation are wholly inapplicable, and the sale cannot, even by a fiction, be said to be outside the State of West Bengal.
No doubt, aviation spirit is taken out of the State and also the territory of India, but it cannot be said to have been exported or delivered for consumption in some other State.
The so called export is not occasioned by the sale, and the sale, on the authorities cited, is not in the course of export ', so as to attract article 286(1)(b).
The decision of the High Court was correct.
The appeals fail, and are dismissed with costs.
One hearing fee.
Appeal dismissed.
| In exercise of the powers conferred by section 3 of the: Essential commodities Art, 1955, the Assam Government made the Assam Foodgrains (Licensing and Control) Order, 1961.
This Order provided that no person could do business in foodgrains including, rice and paddy, in wholesale quantities except under a licence issued thereunder.
Clause 5 of, the Order laid down in sub.
(a) to (e) matters which the licensing authority shall, among other matters, which have regard to in granting or refusing a license sub cl.
(e) being whether the applicant is a co operative society".
In 1959, directions had been issued to all, licensing authorities by the Government that the rights of monopoly procurement had been given to Apex Co operative Society.
The petitioner applied for a licence but was refused in view of the provisions of sub cl.
(e) of cl. 5 of the Order.
The petitioner challenged the order refusing the licence on the grounds: (1) that sub clause (e) was ultra vires 937 as ' it was beyond the powers granted to the State Government under section 3 read with section 5 of the Act, and (ii) that sub cl (e) had been applied in a discriminatory manner with a view to create a monopoly in favour of the Apex Co operative Society.
Held, (per C.J., Das and Ayyangar, JJ.), that sub cl.
(c) of cl.
5 of the Order was not ultra vires section 3 read with section 5 of the Act, but the impugned,order rejecting the application of the petitioner was bad as it infringed the rights of the petitioner guaranteed under Arts, 14 and 19 of the Constitution.
Section 3 of the Act authorised the making of an order to achieve two objects, for maintaining or increasing supplies of essential commodities and for securing their equitable distribution and availability at fair prices.
Sub clause (e) of cl. 5 of the Control Order,, 1961, which enabled the licensing authority to ' prefer a cooperative society in certain circumstances in the matter of granting a licence, was not unrelated to the objects mentioned in s.3 of the Act.
A co operative society may, by reason of the place which it occupies in the village economy of a particular area, be in a better position for maintaining or increasing supplies of rice and paddy and even for securing their equitable distribution and availability at fair prices.
Ramanlal Nagardas vs M. section Palnitkar, A. I.R. 1961 Guj.
38, distinguished.
Sub clause (e) permitted the licensing authority to give preference to co operative societies in certain cases but it did not.
have the effect of creating a monopoly in favour of co operative societies.
In the present case the licensing authority refused licence to the petitioner for the only reason and purpose of granting a monopoly to co operative societies; it had administered the law in a discriminatory manner and for the purpose of achieving the ulterior object of creating a monopoly in favour of co operatives which object was not within sub cl.
(a), The licensing Authority was influenced, not by considerations mentioned in cl. 5 of the Order, but by the instruction issued by the ' State Government to grant licences to cooperatives only.
It was not proper for the, Government to issue instructions to the licensing authorities when they were required to act according to the provisions of law.
Per Sarkar and Mudholkar,JJ.
Sub clause (e) of cl. 5 of the Order served the object of section 3 of the Act to maintain or increase the supplies of essential 'commodities and to secure their equitable distribution and availability at fair prices and Was not ultra vires.
Even it the Order allowed only one class, namely cooperative societies, to do the business and prohibited others.
it would; still advance the objects, of, the Act; and the prohibition of the others.
doing the business would amount.
to, reasonable restrictions under article 19(6).
938 Narendra Kumar vs The Union of india, (ISM 2 S.C.R. 375 and Glass Chatons Imports a Users ' Association vs The Union of India, (W.P. 65 of 1959, unreported), relied on.
The licensing authority had not exercised its power under sub cl.
(e) in a discriminatory manner in the prevent case.
The authority was entitled to give preference to a co operative society and that is what it has done.
Though the result of this preference was to prevent the petitioner from carrying on his business, it was in the circumstances, a reasonable restriction on his right as it was necessary for securing foodgrains at reasonable prices and in adequate quantities.
There were no directions given, by the State Government in 1961 to licensing authorities to grant licences only to co operative societies and it could not be said that the licencing authority had only carried out the directions of the Government and had not acted independently.
In fact, the Order itself carried a direction in sub cl.
(e) to give preference to co operative societies.
The co operative societics formed a class by themselves and a provision giving preference to such a class better served the objects of the Act, and had a clear nexus with the object of the Act and did not offend article 14.
|
ivil Appeal No. 2054 of 1990.
From the Judgment and Order dated 23.1.
1987 of the Central Administrative Tribunal, Calcutta in Transfer Appli cation No. 1263 of 1986.
A.P. Chatterjee, G.S. Chatterjee (NP) and Ms. Ratna Bhattacharya for the Appellants.
R.B. Dattar (NP), Anil Dev Singh, B.K. Prasad, C.V. Subba Rao and R.B. Misra for the Respondents.
816 A. Bhattacharya for the Intervener.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Special leave granted.
Station Masters of South Eastern Railways are aggrieved by implementation of the scheme of re structuring by the Chief Personnel Officer framed by the Railway Board for 'C ' and 'D ' cadre.
Their claim was not accepted by the Central Administrative Tribunal as implementation as such, was beneficial to the majority.
It was further found that alter native 'I ' of the scheme meant for the combined cadre was rightly adopted as the cadre of Assistant Station Master (ASM) and Station Master (SM) in the South Eastern Zone was combined before 1983.
The appellants have challenged cor rectness of these findings.
They also claim that implementa tion of scheme is highly unjust and inequitable.
Prior to re structuring the cadre comprised of Assistant Station Masters at the bottom and Station Superintendent at the top.
Initial appointment of ASM was made in the scale of Rs.360 540.
The promotional ladder bifurcated into (i) ASM to ASM and (ii) ASM to SM, both in the scale of Rs.425 640 (non selection) and then Rs.455 700 (selection) before becoming one common source for promotion to Deputy Station Superintendent/SM Rs.550 750 (non selection) Rs.700 800 Station Superintendent (selection) and Rs.840 1010 Station Superintendent (non selection).
For moving up the promotion al ladder every ASM was required to opt if he would proceed on the channel of ASM to ASM or ASM to SM.
Re structuring was done in 'C ' and 'D ' cadres in the scales, designation and percentage in selection and non selection posts.
Two alternatives were framed described as alternative 'I ' for the combined cadre and alternative 'II ' for the separate cadres.
They were to be adopted by the respective zones depending on the cadre pattern prevalent there.
One of the principles visualised for group 'C ' was that if all posts in an existing grade were en bloc placed in a higher grade the existing regular incumbents thereof were to be allowed the higher grade without subjecting them to any selection.
For ASM/SM two alternatives were provided to be adopted by the respective zones depending on whether the existing cadre was separate or combined.
In alternative 'I ' meant for the combined cadre SMs in the scale of Rs.425 640 and Rs.455 700 were designated as Deputy Station Superin tendents and 817 Station Superintendents in the scale of Rs.550 750 and Rs.700 900 respectively.
Therefore, the appellants claim that if alternative 'I ' was adopted, then it should have been given full play and the SMs who were working in the aforesaid scales should also have been placed en bloc in the re designated posts without any further process of selec tion.
In pursuance of the re structuring, the Chief Personnel Officer issued a letter to the Divisional Manager, South Eastern Railway that it had been decided that alternative 'I ' enunciated by 'the Board shall be followed on the South Eastern Railway.
It further provided that the existing system of calling for options from ASMs for the post of SMs/ ASMs in the higher grade was being dispensed with and sen iority of staff in each grade shall be determined on the basis of non fortuitous service rendered in such grade.
Other paragraphs of the letter are not relevant for the resolution of the present controversy.
Since the direction of the Chief Personnel Officer worked to prejudice of numer ous persons who had exercised their options to the promo tional channel of Station Master, they approached the High Court or Tribunal by way of Writ Petition or Claim Petition but without any success.
Some of such disputes came up for disposal before this Court in Civil Appeal Nos.
1536 41 of 1987 which were disposed of by order dated 30th July, 1987, directing the Railway Board to consider if the Chief Person nel Officer while implementing the scheme deviated from its terms and implemented it to the prejudice of those appel lants.
Since it was conceded that the scheme did not affect present status and emoluments, this Court then made it clear that implementation should not be done to prejudice of appellants.
It further protected the interests of those who due to wrong implementation might have got benefit by di recting that they shall not be disturbed.
The direction given by this Court was not complied with; therefore, con tempt proceedings were filed the hearing of which was de ferred till the disposal of the present appeals.
When these appeals were taken up for hearing, it tran spired that total number of employees of the appellants ' category were not more than 206.
Therefore, the Court passed the order on 26th JUly, 1989 that if relief was granted to these 206 employees.
by implementing the scheme in the manner indicated in the earlier order of 1987, they shall be satisfied and the litigation shall come to an end.
But nothing more was done and on 8th September, 1989 this Court after heating learned counsel for the parties at great length recorded that two questions were required to be looked into: (i) if the cadre of ASM and SM was common or different and (ii) if alternative 'I ' was adopted, then why 818 the SMs could not be re designated and Deputy Station Super intendents and wanted response of the Administration about them.
On both these aspects an affidavit was filed by the Chief Personnel Officer.
Regarding the first, it is stated that cadre of ASM and SM before restructuring was a common one in South Eastern Railway for all 'intents and purposes '.
It is explained that separate cadre meant that the ASMs and SMs would have sought their advancement separately, 'in a way different from them in the entire non gazetted cadre '.
And then ASM and SM had to combine again to work as Deputy Station Superintendent/SM.
In respect of automatic re desig nation, the explanation is that eight different scales of pay existing before re structuring were reduced to six and designation of ASM in the scale of Rs.455 700 and SM in scale of Rs.425 640, were abolished and the post belonging to six revised designations have been distributed on the prescribed percentage basis.
It is further stated that incumbents of the existing grades were promoted according to their positions of seniority against the posts which were available on percentage basis distribution.
Therefore, the contention of the petitioners that the Station Masters should be automatically designated as Deputy Station Super intendent was not correct.
According to the Chief Personnel Officer the appellants along with ' others in accordance with their seniority were required to be subjected to the proce dure of selection/suitability test as per procedure envis aged in the re structuring scheme.
The affidavit also at taches a letter from the Railway Board addressed to the General Manager, reiterating that the implementation of the scheme by the Chief Personnel Officer was as intended by the Board.
Facts as they ultimately emerge do not appear to have been adequately indicated in the affidavit of the senior officer even when the aspects were pointedly indicated by this Court.
It is not disputed that in the South Eastern Zone the practice of option by ASM for promotional channel was in vogue before 1983.
Dispute is about the time when it was exercised.
According to appellant it was at the time of recruitment and appointment even on pain of disciplinary action.
And option once exercised was irrevocable.
Whereas according to officials it used to be offered when vacancy arose according to seniority.
Unfortunately it was accepted by the Tribunal as well without any foundation in the record by shutting its eyes to various letters which clinch the issue in favour of the appellants, for instance the letter dated 14th May, 1965, and 20th May, 1970, issued by the Divisional Superintendent Railway filed before Tribunal, produced along with supplementary affidavit shows that options were required to be exercised by ASMs irrespective of availability of vacancy before the target 819 date and if it was not exercised then they were liable to disciplinary action.
And options, for or against could not be changed when once exercised.
Where it was not exercised on or before the date it was deemed to have been opted for ASM to SM.
No effort was made to meet these letters; yet an affidavit was filed that option was exercised when vacancy arose.
Options was thus exercised by appellants at the stage of appointment and recruitment.
But it appears to have resulted in dissatisfaction because even though the pay scales were identical those who became SM were entrusted with superviso ry control and administrative responsibility.
For this the ASM recruited in the same batch must have been unhappy.
And the SM must, also, have had the grievance as promotion in higher scale was obviously delayed because the post of SM must have been fewer in number as compared to ASM.
There fore, it was rightly abolished and was hailed by the two unions of employees.
But what happened to those who due to irrevocable option exercised prior to 1983 had been waiting for moving up and due to abolition of option and implementa tion of the alternative 'I ' lost the opportunity while ASMs junior to them availed it? No provision for them was made.
Even in this Court despite repeated directions, the Chief Personnel Officer or the Administration instead of resolving it have taken an uncharitable stand by asserting that those who opted for promotional channel of SM having enjoyed benefit of day duty and supervisory control on their own volition cannot be compared with ASMs whose working condi tions were different.
That is a person who worked with greater responsibility, and under strain must suffer.
What is surprising is that such unreasonable stand is supported even by the Board by relying on 'intents and contents '.
Even the claim of the Administration that cadre of ASM/SM was combined cadre in South East Railway was not substantiated by any document, letter or order.
On the other hand, from letter dated 10th May, 1984 issued by Additional District Pay Commissioner to General Manager recognises existence of separate cadre: "It is evident from the details furnished in the enclosure to your above quoted letter that your Railway had a separate cadre for ASMs/SMs and a decision had been reached prior to the issue of the restructuring orders No. PC.
III/80/ UPG/19 dated 29.7.83 to switch over to a combined cadre, except where in respect of any cadre or cadres avenues of advance ment have been prescribed by this Ministry, laying 820 down avenues of promotion in respect of non gazetted Railway staff, is within the competence of the General Managers of the zonal railways.
Since the matter has been processed on your railway in consultation and agreement of the two recog nised Trade Unions in the permanent Negotiating Machinery, the action by your Railway to switch over to a combined percentages scheme is within your powers. ' ' Existence of separate cadres prior to 1983 and changing over to a combined system is not the same thing as claiming that the cadre which existed prior to 1983 was a combined cadre.
Explanation in the affidavit while replying to the issue as to whether the cadre of ASM and SM was common or a different cadre is given thus: "The Railway Board 's letter dated 10.8.84 refers to only merging these two grades which should not mean that the cadre was separate.
In other words, the Railway Board 's said letter means that the action of the Railway to combine the two grades also is in order and it does not imply that the entire cadre was separate.
" It cannot be accepted either as correct or satisfactory.
Cadres of ASM/SM before 1983 was separate and different.
With abolition of option it has become one.
The letter of the Railway Board required revised percentages prescribed for the category depending on whether the existing cadre structure was a combined one or a structured one.
Since the cadre in South Eastern Railway was a separate one, the Chief Personnel Officer deviated from the scheme by applying alternative 'I ' which was to be adopted by a zone where combined cadre existed.
And if alternative 'I ' was adopted then the SMs should have been automatically designated as Deputy Station Superintendents and they should not have been subjected to the selection procedure.
The explanation in the affidavit of Chief Personnel Officer that the grade Rs. 425 640 having been abolished as a consequence of restruc turing is not acceptable.
In alternative 'I ' SM in scale of Rs.425 640 automatically stood redesignated as Deputy Sta tion Superintendent.
But the scale does not find place in alternative 'II '.
But both the employees unions have accept ed the implementation of the letter of Chief Personnel Officer as it is beneficial to a majority of the employees.
Therefore, it may not be disturbed.
At the same time all those 204 employees who had opted before 1983 must be enti tled to the benefit which would have been available to them on theft options.
821 In the result this appeal is disposed of by directing that the respondent authorities shall grant promotional benefit to those 204 SMs who had exercised options before 1983 in the same manner as it would have been if option had not been abolished in accordance with the earlier procedure provided they fulfilled the other requirements.
While doing so those who had been promoted shall not be disturbed as directed by this Court on 30th July, 1987.
Further if as a result of this exercise posts in higher grade fall short, the respondents shall create adequate number of additional posts to overcome the difficulty.
The respondents are fur ther directed to complete all this exercise within six months.
Persons promoted in pursuance of this order shall be entitled to all consequential benefits from the due dates.
Appellants shall be entitled to consolidated costs which are assessed at Rs.5,000 to be payable by respondent No. 2.
N.V.K Appeal disposed of.
| Sub rule 3(a) of rule 3 of the Andhra Pradesh (Roads and Buildings) Engineering Service Rules, 1965 prescribes that the substantive vacancies in the category of Assistant Engineers 37 1/2 per cent shall be filled up by direct recruitment and the remaining 62 1/2 per cent by transfer and promotion of junior officers.
In K. Siva Reddy vs State of Andhra Pradesh, ; , filed by direct recruits, the Court had directed the State Government to ascertain the exact sub stantive vacancies in the category of Assistant Engineers in the service as on December 31, 1982, work out the quota prescribed under rule 3(3)(a) of the Rules and draw up a seniority list accordingly.
In the draft seniority list drawn up by the State Gov ernment on the basis of the guidelines, it placed the 1982 direct recruits from serial Nos.
234 to 269 without disturb ing promotees upto serial No. 233 and the remainder of promotees given promotion prior to 1982 were placed against serial Nos. 270 to 300.
In C. Radhakrishna Reddy vs State of A.P., W.P. No. 369 of 1989 decided on November 10, 1989 the Court found the said list in accord with the directions.
In these writ petitions preferred by the promotee As sistant Engineers, it was contended for them that serious injustice had been done to them as the accrued rights of theirs had been disturbed and some of the direct recruits had been given the benefit of seniority above them by count ing service prior to their actual recruitment.
Dismissing the writ petitions, the Court, HELD: 1.
A Government servant is justified in taking legal action 704 when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile to his lot suppressing disappointment when he finds a co worker raised to a position which he himself aspired after.
[707G] Dr. G. Marulasiddaiah vs Dr. T.G. Siddapparadhya & Ors., ; , referred to.
In K. Siva Reddy 's case, the Court had taken a very equitable view in not disturbing the regularisation contrary to the quota and had taken every care to ensure that the cause of justice was not made to suffer and a balance was maintained by an appropriate admixture of relief by confin ing the reconsideration for a period after 1982.
The year 1982 was fixed on account of two features, (i) that regular disputes had been raised from that time, and (ii) a period of 5 6 years was not too long a period to give rise to a sense of conclusiveness generated by long lapse of time.
The promotee engineers should have been happy and thankful to their lot that their regularisation was not disturbed and even seniority prior to 1982 was not being affected though they had acquired these benefits out of turn.
[707C E]
|
: Criminal Appeal No. 254 of 1976 (Appeal by Special Leave from the Judgment and Order dated 8 12 1975 of the Gujarat High Court in Crl Appeal No. 557 of 1976).
L.C. Goyal for the Appellant.
G.A. Shah and Miss Radha Rangaswamy for the Respondent.
The Judgment of the Court was delivered by KRISHNA IYER, J.
Judicial summitry, when the subject of dispute is re appraisal of evidence even on the sophisticat ed ground of misappreciation, has to submit itself to cer tain self restraining rules of 627 processual symmetry.
The trial Court directly sees the witnesses testify and tests their veracity in the raw.
The appellate Court, enjoying co extensive power of examination, exercises it circumspectly, looks for errors of probative appraisal, oversight or omission in the record and makes a better judgment on the totality of materials in the light of established rules of criminal jurisprudence.
As the case ascends higher, forensic review is more rarefied.
Such being the restrictive approach, the Supreme Court cannot be persuaded, without stultifying the system of our judicature, to go over the ground of reading the evidence and interpret ing it anew so as to uphold that which appeals to it among possible alternative views.
If there is perversity, miscarriage of justice, shocking misreading or gross misap plication of the rules, procedural and substantive, we interfere without hesitation.
Of course, other exceptional circumstances also may invoke our review jurisdiction.
These prefatory observations have become necessary since, usually appellants, hopefully slurring over these jurisdic tional limitations, argue the whole way before us as if the entire evidence is at large for de novo 'examination.
Such a procedure has been attempted in the present case and, for reasons just mentioned, we arc disinclined to rip open the depositions to re discover whether the evidence is reliable or not.
A single survivor figures as the appellant before us, from among four persons who were tried by the Sessions Court, Baroda, for .offences punishable under sections 302 read with section 34 IPC and section 135 of the Bombay Police Act.
Accused 3 and 4 secured acquittal before the Sessions Court and accused 2 won his appeal before the High Court.
Concurrent findings of guilt notwithstanding, the first accused has secured special leave by jail appeal.
Shri L.C. Goyal, appearing as amicus curiae, has urged before us that the appellant is entitled to acquittal like the re.st of the accused.
The few facts, to explain why we make short shrift of this case, may be narrated.
The murderous episode, preceded some days earlier by a minor incident, which took place on February 7, 1974at about 10.30 p.m.
The deceased Vasant and his friends were returning from the side of a cinema house, Krishna Talkies.
Sitting on the footpath and in keeping with the hour and the compa ny, the group took hot drinks, the deceased having consumed considerable potions.
The drunk was led by his comrades towards his house when a bunch of persons including the .four accused confronted them.
A tipsy altercation often sparks the plug of tantrums and violence.
Here the prosecution version is that accused No. 1 Baba and the deceased Vasant began the brawl with a heated verbal ex change, followed by mutual fisting but climaxed by the l st accused planting his knife on the left chest of the victim.
The others too joined in the attack, accused 2 with knife and accused 3 with fist.
The last man only shouted to incite them into giving blows.
Hardly had the victim Vasant fallen when the accused assailants took to their heels.
The injured was shortly hospitalised but soon succumbed to his wounds.
Eye witnesses testified, medical evidence was adduced and the homicide brought beyond reasonable doubt.
628 The trial court had framed charges with offences under section 302 read with section 34 IPC.
The post mortem certificate revealed two transverse incised wounds penetrating the chest cavity.
There were quite a few other incised wounds in less lethal parts of the anatomy.
However, in the opinion of the doctor all the injuries were antemortal and the chest wounds were sufficient in the ordinary course of nature to cause death.
The deceased passed away due to shock and haemorrhage caused by the stab wounds, especially on the chest.
Both the courts below have affirmed in substance the case set forth by the prosecution about the occurrence.
Concurrent findings of fact carry considerable weight at the Supreme Court level that to shake our credence is too demanding a forensic exercise.
Shri Goyal persistently drew us into the details of testimony to persuade us into a contrary conclusion from that recorded by the trial Court and, after due examination, approved by the High Court.
While the murder is the tragedy, the discovery of the murderer beyond doubt is the judicial function.
So much so, the essential enquiry turned on who the culprits were.
The learned Sessions Judge absolved accused nos.
3 and '4 of the offences on the score of absence of reliable evidence on record as regards any part played by accused nos.
3 and 4 '.
Nevertheless, he held accused nos.
1 and 2 to be guilty of jointly murdering Vasant taking the view that they 'had taken under and unfair advantage of the fact that the deceased was unarmed, and had acted in a cruel manner by inflicting 7 or '8 injuries with knives '.
The sentence that followed however was rigorous imprisonment for life on the ameliorative circumstance that the attackers had acted in the heat of passion.
The High Court,.
in fair discharge of its appellate function, sedulously studied the evidence bearing on the murder and the murderers.
Hardly any flaw in appreciation has emerged from the argument of the counsel for the appellant, in regard to the truth of the occurrence and nothing short of grave mistakes or palpable omissions can induce us to dissent from this finding.
Even so the High Court has been at great pains to screen the testimony with reference to their credibility, motivation and proba bility so that their finding may not be faulty on the score of insufficient evidence of involvement of any of the two accused.
Such a searching scrutiny yielded fruitful result for the second accused and he drew the dividend of acquittal at; the High Court level on account of mistakes of the 'might have been ' category.
We express no opinion as to whether every dubious 'maybe ' or passing hesitancy can be exalted to the level of 'reasonable doubt ' in criminal jurisprudence.
The conviction of the guilty is as much part of the administration of justice as the acquittal of the innocent.
The judicial art takes no sides where the truth is in fair measure manifest.
Anyway, accused No. 2 having been acquitted, we are concerned with the solitary, appel lant before us.
Counsel Shri Goyal pressed upon us what he regarded as a surefire contention that if there was no specific evidence of the appellant having inflicted the fatal stab on the chest he was entitled to share the 629 acquittal with the rest even if there was abundant proof of several persons including him having set upon the deceased and killed him using lethal weapons.
In the present case more than one knife was used, more than., one man was in the attacking party and more than one incised wound was inflict ed.
While we can make short work of the submission by holding, as we d9, that there is clear testimony that the chest stab which was fatal in the ordinary course was the handiwork of the appellant, we make the legal position clear that when a murderous assault by many hands with many knives has ended fatally, it is legally impermissible to dissect the serious ones from the others and seek to salvage those whose stabs have not proved fatal.
When people ' play with knives and lives, the circumstance that one man 's stab falls on a less or more vulnerable part of the person of the victim is of no consequence to fix the guilt for murder.
Conjoint complicity is the inevitable inference when a gory group animated by lethal intent accomplish their purpose cumulatively.
Section 34 IPC fixing constructive liability conclusively silences such a refined plea of extrication.
(See Amir Hussain vs State of U.P. C), Maina Singh vs State of Rajasthan(2).
Lord Sumner 's classic legal shothand for constructive criminal liability, expressed in the Miltonic verse 'They also serve who only stand and wait ' a Jortiori embraces cases of common intent instantly formed, triggering a plurality of persons into an adventure in criminality, some hitting, some missing, some spletting hostile heads, some spilling drops of blood.
Guilt goes with community of intent coupled with participatory presence or operation.
No finer juristic niceties can be pressed into service to nullify or jettison the plain punitive purpose of the Penal Code.
Counsel also argued that since three out of the four accused have secured acquittal the invocation of section 34 is impermis sible.
The flaw this submission is obvious.
The Courts have given the benefit of doubt of identity but have not held that there was only one assailant in the criminal attack.
The proposition is plain that even if some out of several accused are acquitted but the participating presence of a plurality of assailants is proved, the conjoint culpa bility for the crime is inescapable.
Not that the story of more than one person having attacked the victim is false, but that the identity of the absolved accused is not firmly fixed as criminal participants.
Therefore it follows that such of them, even if the number dwindled to one, as are shown by sure evidence to have knifed the deceased, deserve to be convicted for the principal offence read with the constructive provision.
We therefore hold that the appeal deserves to be and is hereby dismissed.
We appreciate the unsuccessful but industrious enthusiasm of Shri L.C. Goyal who has served as amicus curiae.
Before parting with this case we may draw attention to a sociological thought.
There is evidence in the case of high spirits and consumption of alcohol.
Intoxicating beverages subvert sobriety and (1) A.I.R. 1975 Sc7 2211.
(2) ; 630 the drinking habit which begins with enjoyment of exuberance escalates into consumption of intemperate potions by tempt ing degrees ultimately holding the bacchanalian votary captive.
The deleterious nexus between alcohol and violent crime is fairly obvious and these days, when drunken delicts and delinquencies are alarmingly on the increase, the State must be doubly concerned to control intoxicating liquors as part of the strategy of defusing crime explosion and as proof of bearing true faith and allegiance to article 47 of the Directive Principles of State Policy.
MR Appeal dis missed.
| Four persons were tried by the Sessions COurt for of fences punishable under section 302 read with section 34 I.P.C. and section 135 of the Bombay Police Act.
Two of the accused were acquitted by the Sessions Court and one by the High Court, having been given the benefit of doubt of identity.
The appellant contended before this Court that there was no specific evidence of his having inflicted the fatal stab, and also that since three out of the four accused were acquitted the invocation of section 34 was impermissible.
The findings on the reliability of evidence were also ques tioned.
Dismissing the appeal, the Court HELD: (1) When a murderous assault by many bands with many knives has ended fatally, it is legally impermissible to dissect the serious ones from the others and seek to salvage those whose stabs have not proved fatal.
The cir cumstance that one man 's stab fails on a less or more vul nerable part of the person of the victim is of no conse quence to fix the guilt for murder.
section 34 I.P.C. fixes constructive liability in case of community of intent cou pled with participatory presence or operation, and even if some of several accused are acquitted but the participating presence of a plurality of assailants is proved, the con joint culpability for the crime is inescapable.
[629B D, F] Amir Hussain vs State of U.P.A.I.R. , Maina Singh vs Stare of Rajasthan, A.ER.
Classic legal sbortband for constructive criminal liability by Lord Sumner referred to.
(2) Only if there is perversity, miscarriage of justice, shocking misreading or gross misapplication of the rules, procedural and substantive, or other exceptional circum stances, the review jurisdiction of the Supreme Court may be invoked.
[627A C]
|
Criminal Appeal No. 169 of 1987.
From the Judgment and Order dated 11.8.1986 of the Allahabad High Court in Criminal Appeals No. 583, 892 896 of 1985 and Capital Reference No. 2 of 1985.
724 Shakeel Ahmad for the Appellants.
The Judgment of the Court was delivered by SEN, J.
Appellants Asharfi Lal and Babu who are real brothers, are under sentence of death on their conviction under section 302 read with section 149 of the Indian Penal Code, 1860 for having committed the brutal murders of their two nieces Kumari Sumati, aged 14 years and Kumari Kalkanta, aged 20 years, daughters of their pre deceased paternal cousin, and under section 307 read with section 149 of the Indian Penal Code for having attempted to commit the murder of Smt.
Bulakan, widow of Devi, and sentenced to undergo rigorous 'imprisonment for 7 years.
The remaining appellants Ganga Prasad and Hemraj, two sons of Asharfi Lal, and Mata Badal, son of Babu, have been convicted under section 302 read with section 149 of the Indian Penal Code for having committed the two murders in further ance of the common object of their unlawful assembly and each of them sentenced to life imprisonment.
They have also been convicted under section 148 for the attempted murder of Smt.
Bulakan.
There was long drawn litigation between the Smt.
Bulakan on the one hand and the appellants on the other in respect of certain agricultural property.
The last of the series of the litigation was a proceeding initiated under section 145 of the Code of Criminal Procedure, 1973 on a report made by Smt.
Bulakan, P.W. 1.
To wreak their vengeance, the appellants effected an entry on the night between August 13/14, 1984 into the courtyard of the adjoining house where the three ladies were sleeping on three different cots.
The testimony of Smt.
Bulakan, P.W. 1 shows that she woke up hearing the shrieks of her younger daughter Kumari Sumati and found that appellant Mata Badal was perched over the lower part of the body of Kumari Sumati pressing down her legs while appellant Babu repeatedly struck her with a gandasa and severed her neck.
The girl died almost instanta neously; her head hung down the cot partially attached to the neck.
Bulakan further deposes that appellant Ashar fi Lal struck her other daughter Kumari Kalkanta on the neck and face with a banka while appellant Hemra chopped off the right hand of the girl with a gandasa.
She also shrieked and appellant Ganga Prasad struck her on the face and upper part of the body with a gandasa.
She ran from her house through the village abadi and fell down near the house of Kandhai, P.W. 2, which was some 30 40 paces away.
She narrated the incident to Kandhai who immediately ran and informed Bhag wati Prasad Pandey, P.W. 3 who resided some 200 paces away.
The Village Pradhan Bhagwati Prasad Pandey, P.W. 3 accompa nied by some of the villagers arrived at the house of Smt.
Bulakan and saw the 725 deceased Kumari Sumati lying dead on the cot and Kumari Kalkanta lying unconscious in a pool of blood on another cot.
She subsequently died in the hospital.
Learned counsel for the appellants made no endeavour to challenge the conviction of the appellants for having com mitted various offences with which they were charged, and rightly so.
The conviction of the appellants rests on the unimpeachable and truthful evidence of Smt.
Bulakan who was herself the victim of the murderous assault, as conoborated by P.W. 2 Kandhai and P.W. 3 Bhagwati Prasad Pandey.
She is a natural witness and has given a vivid description of the entire incident resulting in the gruesome deaths of her daughters Kumari Sumati and Kumari Kalkanta.
It is estab lished in evidence that immediately after the occurrence she named all the assailants.
The first information report (Exh.
Ka 1) lodged by Bhagwati Prasad Pandcy P.W. 3, the Village Pradhan, contains the names of the assailants.
The 1st Additional Sessions Judge, Barabanki by his judgment and sentence dated August 23, 1985 convicted the two appellants Asharfi Lal and Babu under section 302 of the Indian Penal Code on two counts of murder and awarded them capital punishment.
He also convicted Ganga Prasad and Hemraj, two sons of Asharfi Lal, and Mata Badal, son of Babu, under section 302 read with section 149 and sentenced each of them to undergo life imprisonment.
All the appellants have also been convicted under section 148 of the Indian Penal Code.
The High Court by its judgment dated August 11, 1986 on a careful consideration of the evidence has agreed with the learned Additional Sessions Judge and confirmed the conviction and sentences awarded to the appellants.
In affirming the sentence of death imposed on the two appellants Asharfi Lal and Babu, the High Court observed that on a careful consideration of the entire material, the facts and circumstances and the applicable law, it was satisfied that this was one of the rarest of the rare cases where death penalty is the only appropriate sentence which ought to be imposed on them.
We have heard learned counsel for the appellants mainly on the question of sentence but we are not impressed with his submission.
The two appellants Asharfi Lal and Babu were guilty of a heinous crime out of greed and personal ven geance and deserve the extreme penalty.
This case fails within the test 'rarest of the rare cases ' as laid down by this Court in Bachan Singh vs State of Punjab, as elaborated in the later case of Machhi Singh vs State of Punjab, The punishment must fit the crime.
These were cold blooded brutal murders in which two innocent girls lost their 726 lives.
The extreme brutality with which the appellants acted shocks the judicial conscience.
Failure to impose a death sentence in such grave cases where it is a crime against the society particularly in cases of murders committed with extreme brutality will bring to naught the sentence of death provided by section 302 of the Indian Penal Code.
It is the duty of the Court to impose a proper punishment depending upon the degree of criminality and desirability to impose such punishment.
The only punishment which the appellants deserve for having committed the reprehensible and gruesome murders of the two innocent girls to wreak their personal vengeance over the dispute they had with regard to property with their mother Smt.
Bulakan is nothing but death.
As a measure of social necessity and also as a means of deterring other potential offenders the sentence of death on the two appellants Asharfi Lal and Babu is confirmed.
The appeal is dismissed accordingly.
N.P.V. Appeal dis missed.
| One Kalu Ram was the owner of 90 Kanals of land.
He sold this land in favour of three brothers, Kewal Ram, Chet Ram and Kuldip Ram for a consideration of Rs.65,000 by a regis tered sale deed dated 1.8.1966.
Kewal Ram is residing in Village Badala in Jullunder District.
Chet Ram and Kuldip Ram were residing at 71, Windsor Road, Forest Gate, London.
Ram Lubhai, minor daughter of Kalu Ram filed a suit for possession of the land on the ground that she being the daughter of the vendor had superior right of pre emption as against the vendees who were strangers.
Kewal Ram alone was served in the suit.
The other two were not served.
Substi tuted service was, therefore, taken for service on them by publication in a vernacular paper.
The suit was decreed on 31.7.1969 against all the three defendants, ex parte against Chet Ram and Kuldeep Ram.
Kewal Ram filed an appeal against this decree and judgment.
He made his brothers Chet Ram and Kuldip Ram as proforma respondents giving their village address for service.
In the appeal also they were served by substituted service.
The appeal was heard on 5.1.1971 and was dismissed.
On 24.3.1971, Kuldip Ram and Chet Ram filed an applica tion under Order 9, Rule 13 of C.P.C. in the Trial Court for setting aside the ex parte decree against them on the ground that they were neither served in the Trial Court nor in the Appellate Court.
The Trial Court 786 accepted the application and set aside the decree passed.
Against this order dated 10.1.1972, the plaintiff filed a revision petition in the High Court of Punjab and Haryana as C.R.P. No. 147 of 1972.
The High Court felt that there was no error of jurisdiction in the order sought to be revised, but held that since Kewal Ram had contested the suit, there was no ground to set aside the decree against him.
On this around, the petition was partly allowed.
The decree against Kewal Ram was allowed to stand but was set aside against the other two.
The review petition filed by Smt.
Ram Lubhai was dismissed by the High Court.
Hence the appeals by special leave.
Dismissing the appeals, the Court, HELD: It is well settled that when a decree of the Trial Court is either confirmed, modified or reversed but the Appellate decree, except when the decree is passed without notice to the parties, the Trial Court decree gets merged in the appellate decree.
But when the decree is passed without notice to a party, that decree will not, in law, be a decree to which he is a party.
Equally so in the case of an appel late decree.
In this case these two persons were not served in the suit.
A decree was passed ex parte against them without giving them notice of the suit.
In law, therefore, there is no decree against them.
In the appeal also they were not served.
If they had been served in the appeal, things would have been different.
They could have put for ward their case in appeal and got appropriate orders passed.
But that is not the case here.
That being so, there is no bar for an application by them before the Trial Court under Order IX, Rule 13, to set aside the ex parte decree against them.
[689G H; 690A B] There is no error of law in allowing a joint decree to stand against the person who contested throughout while setting aside the ex parte decree passed against others without serving them personally on admitting the application under Order IX Rule 13 C .P.C. [690C]
|
ivil Appeal No. 1027 of 1990.
From the Judgment and Order dated 27.10.1989 of the Karnataka High Court in Writ Appeal No. 2017 of 1989.
K. Parasaran, C.S. Vaidyanatha, S.R. Bhat, S.R. Setia, K.V. Mohan and Mrs. Sunitha B. Singh for the Petitioner.
K.N. Bhatt, Rajinder Sachhar, Vineet Kumar, B. Mohan and K.G. Raghvan for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
The petitioner is aggrieved by the award of a contract by the Karnataka Power Corporation Ltd. (K.P.C.), an instrumentality of the State of Karnataka, in favour of the Mysore Construction Co. (M.C.C.).
His writ petition and a further writ appeal in the Karnataka High Court having been unsuccessful, he has preferred this Spe cial Leave Petition from the judgment of the High Court in the writ appeal.
We have heard counsel for both sides at length.
We 231 grant Special leave and proceed to dispose of the appeal.
Though, at an earlier stage of the proceedings there were some allegations of favoritism, the plea of the peti tioner, as urged before us, is that the K.P.C. should not at all have entertained the tender of M.C.C. as the M.C.C. did not fulfill certain preliminary requirements which, under the Notification Inviting Tenders (N.I.T.), had to be ful filled even before the forms of tender could be supplied to any intending contractor.
The contract pertained to the construction of a Main Station Building of a Power House at the Raichur Thermal Power Plant at an estimated cost of about Rs. 1.8 crores.
The N.I.T. dated 27.12.1988 invited tenders from registered contractors of appropriate class.
Paragraph I of the notifi cation listed three "Minimum qualifying requirements" viz., that the intending tenderer: (1) should have executed civil and architectural works including insulation in a power plant/industrial complex, preferably in power plant; (2) should have executed atleast 1000 cubic metres per month of concrete pouring and atleast 300 cubic metres per month of brick work at one site; and (3) should have had an annual turnover of atleast 1 crore for each of the preceding three years.
Para V required the intending tenderers to furnish the following information "along with the application for issue of blank tender books", namely: (a) Audited Balance Sheet/Certificate from Chartered Ac countant for preceding three years; (b) Latest income tax clearance Certificate; (c) Copy of the Registration Certificate (d) Annual output of the works of all the above nature at any site accompanied by a certificate from the organisation for whom the tenderer had carried out the works furnishing details such as rate of pouring of concrete.
manufacturing of hollow concrete 232 block, precast concrete block, . . etc., and period of completion scheduled/envisaged, equipments and their deploy ment i.e., man months etc.
The N.I.T. specified January 17, 1989, as the last date for receipt application forms for issue of blank tender books.
The issue of blank tender books was to be between 23rd January to 27th January, 1989 and the completed tender books had to be submitted by 3.00 p.m. on 6.2.89.
It is common ground, however, that subsequently this time frame was altered.
The last date for receipt of application form for issue of blank tender books remained as 17th January, 1989 but the other items were altered to read as follows: "1.
Last date for receipt of 10.2.89 clarification: 2.
Period to issue blank tender 10.2.89 to books 16.2.89 3.
Last date and time for receipt 27.2.89 completed tender books: upto 3.00 P.M.
It appears that six parties applied for tender books.
These were scrutinized with reference to the pre qualifying requirements and data on experience, work done etc.
as furnished by each of the applicants.
Four of the firms were found to be pre qualified by the Chief Engineer and tender books were issued to them.
Only three of them, however, submitted completed tender books by February 27, 1989.
These tenders were examined by the Chief Engineer as well as an independent firm of Engineering Consultants, namely, Tata Consulting Engineers (T.C.E.).
Both the Chief Engineer as well as T.C.E. recommended acceptance of the tender of M.C.C. (which was the lowest tender) in view of the fact that M.C.C. had adequate experience in the construction of R.C.C. works and they were capable of mobilising the work force required for the work.
It may be mentioned that after making necessary adjustments it was found that the tender of M.C.C. was Rs. 15 lakhs less than the tender of the peti tioner.
The principal argument advanced on behalf of the peti tioner is that paragraphs I and V of the N.I.T. specified certain pre qualifying requirements.
Unless these require ments were fulfilled, the contractor was not even entitled to be supplied with a set of tender documents.
It is submit ted that M.C.C. did not comply with these requirements and 233 hence its application for tender forms should have been rejected at the outset.
The learned single Judge in the High Court went into the matter in great detail and came to the conclusion that the petitioner 's contentions were not well founded.
He took the view that the pre requisites for supply of tender forms were only the three conditions set out in para I of the N.I.T. and that the details called for in para V could be supplied at any time.
He, therefore, rejected the petitioner 's con tention that the extensions of time given to M.C.C. to submit the tender with requisite clarifications were not warranted.
The Division Bench, on appeal, did not express any clear opinion as to the nature of the requirements set out in Para V but was satisfied, on an overall view, that there was nothing unfair or arbitrary about the award of the contract tO the M.C.C. It observed: "We have carefully considered these contentions.
We are of the view that while exercising jurisdiction under Article 226 of the Constitution, it is not for us to reap praise the facts on merits and come to one conclusion or other with regard to these aspects of the matter.
Why we are obliged to say this is if the Court is satisfied there is nothing arbitrary or unfair in the award of the contract, it cannot convert itself into a super technical Committee and find out whether the requirements have been fulfilled or not.
While saying so, we are conscious of the fact that what is argued before the learned single Judge is with reference to prequalifications or in other words the eligibility.
Nevertheless where the person who is incharge of award of contract was satisfied about the eligibility and that too after consultancy through an independent agency like Tata 's, we cannot come to a contrary conclusion and then say a particular certificate does not in terms meet the require ment laid down under clause V(d).
That we consider is no function of the Court.
After all the object of tender in most matters like this is to satisfy the authority that the person who undertakes to execute the work or the person who offers the tender would be really worth and then he would perform to the best of his ability and to the requirement of the person who wants to have the contract.
If these basic principles are kept in mind, we do not think we can intro duce nuances of law to enter into the realm of contract which we consider should be kept out of the purview of writ 234 jurisdiction.
From this point of view, we are unable to find out any justification to interfere with the order of the learned single Judge.
" The first question that falls to be considered is as to whether there is any difference between the requirements in paras I and V and whether only para I and not para V sets out the pre conditions of eligibility to submit a tender for the contract.
In our opinion, it is difficult to accept the view of the learned single Judge of the High Court that it is only para I that stipulates the pre conditions and that all the documents referred to in the other paras can be supplied at any time before the final award of the contract.
It is seen that paras I to XIII set out various terms and conditions some of which relate to the pre tender stage and some to later stage.
For instance, paras X and XI come into operation only after the tenders are received and para XII makes it clear that the K.P.C. 's decision regarding the fulfilment of para IV may remain open right till the actual award of the contract.
However, on the contrary, the condi tion set out in para VI has clearly to be fulfilled even before asking for tender forms.
Para V seems to stand some where in between.
If one reads paras I and V together, it will be seen that a common thread runs through them and that they are really meant to supplement each other.
It is in order to satisfy itself that the requirements of para I(1) and (2) are fulfilled that the K.P.C. calls for the certifi cates mentioned in para V and the fulfilment of the require ment in para I(3) has obviously to be verified by reference to the audited balance sheets called for under clause (a) of para V.
The reference in clause (d) of para V to the "annual output of the works of the above nature" is also obviously a reference to the works of the nature described in para I.
It is clear that at least some, if not all, of the documents referred to in para V, are intended to verify the fulfilment of the three prequalifying requirements of para I. The stipulation of the time element within which the information asked for in para V should be supplied is also of some significance; it specifically requires the information to be supplied along with the application for tender forms.
As pointed out by this Court in its judgment dated 3.3.1989 in Ram Gajadher Nishad vs State of U.P., C.A. 1819/89, an intending tenderer can be perhaps letigimately excluded from consideration for a contract, if the certificates such as the ones under clauses (b) and (c) of para V are not fur nished.
It may not, therefore, be correct to read para I in isolation and treat it as the only condition precedent for the supply of forms of tender.
The more harmonious and practical way of construing the N.I.T. is by saying that, before the tender books can be supplied, an intending ten derer should satisfy the K.P.C, by supplying such of the documents called for in para V as are material in assessing the fulfilment of the condition in para I, that he fulfills the three 235 conditions set out in para I.
It seems clear to us that, apart from para I, there are some other requirements in the N.I.T. which have to be complied with before the applicant can be eligible for supply of tender forms.
These include, if not all, at least such of those documents referred to in para V(d) as have a direct bearing on the three conditions outlined in para I. Bearing this approach in mind, let us examine to what extent, according to the appellants, the M.C.C. failed to fulfil the N.I.T. requirements: So far as para I is concerned, two defects were pointed out.
The first was that, as against the requirement that the applicant "should have executed . . works including insulation", the certificate of 25.1.1989 produced by the M.C.C. was only to the effect that it "is constructing" a building in Hyderabad for the National Geophysical Research Institute "in which they have done wall insulation and roof insulation for airconditioning work".
The second was that, as against the second requirement of para I that the appli cant should have executed "at least 300 cubic metres per month of brick work at one site, the certificate from Vasa vadatta Cements produced by the M.C.C. on 1.2.89 only stated that it had "constructed over 300 cubic meter of brick masonry for the packing plant and D.G. building totaling to 327.29 cubic metre during the month of June 1985".
These certificates, it is submitted, do not come up to the re quirements of Para I.
We think that this criticism, based on the differences in wording as between the language of para I and the certificates produced by the M.C.C., is too weak to be accepted.
It was for the K.P.C. to consider the suffi ciency of these certificates.
The conditions only required that the applicant should supply information to show that he had experienced in insulation work and that he could carry out brick work in a month to the extent indicated.
It was for the K.P.C. to assess the value of the certificates furnished in this regard and if the K.P.C. considered them sufficient to warrant the issue of a tender form to the applicant, we do not think we should interfere with their decision.
So far as para V is concerned, the criticism is that two items of information concerning the requirements of clause (d) of Para V were not supplied along with the request for application of tender forms.but were supplied much later.
It was only on 21.6.89 that M.C.C. furnished a certificate that they had executed "hollow cement blocks work" for the Indian Telephone Industries Ltd. but even that certificate gave no details.
It vaguely stated that "the item had been executed as per our bill of quantities".
Again, it was only on 18.8.89 that M.C.C. produced a certificate from Vasvadatta Cements regarding the work of concreting done by it.
It is pointed out incidentally that 236 this is also a part of the specific requirements in para I and, as such, the VI.C.C. cannot be said to have satisfied the preliminary conditions Tendering it eligible to tender for the contract.
The second of these does not really cause much difficulty.
For, even as early as 11.1.89 along with its application for tender dated 3.1.89 M.C.C. had produced a certificate from the K.P.C. itself that it had done 35,000 cubic metres of concreting during 7 months and this was apparently considered sufficient for the K.P.C. subsequently called for a certificate only regarding brick work.
This leaves only the first of the criticisms that the details regarding hollow cement block works done by the M.C.C. was furnished only on 21.5.89.
Should the M.C.C. have been denied altogether the right to Tender for the contract consequent on the delay in sub mitting this document is the second question that arises for consideration.
Sri Parasaran, for the appellant would have us answer this question in the affirmative on the principle enunciated by Frankfurter, J. and approved by this Court in Raman Daygram Sherry vs The International Airport Authority of India & Ors., ; Bhagwati, J. (as his Lordship then was) formulated in the following words a principle which has since been applied by this Court in a number of cases: "It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them.
This rule was enunciated by Mr. Justice Frankfurter in Viteralli vs Seton, 359 U.S. 535:3 Law.
(Second series) 1012, where the learned Judge said: An executive agency must be rigorously held to the standards by which it professes its action to be judged.
Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the require ments that bind such agency, that procedure must be scrupu lously observed.
This judicially evolved rule of administra tive law is now add, rightly so.
He that takes the procedur al sword shall perish with the sword." "This Court accepted the rule as valid and applicable in India in A.S. Ahluwalia vs Punjab, ; and in subsequent decision given in Sukhdev vs Bhagatram, ; Mathew, J., quoted the above referred observations of Mr. Justice Frankfurter with approval.
It may be noted that this rule, though supportable also as emanation 237 from Article 14, does not rest merely on mat article.
It has an independent existence apart from Article 14.
It is a rule of administrative law which has been judicially evolved as a check against exercise of arbitrary power by the executive authority.
If we turn to the judgment of Mr. Justice Frank furter and examine it, we find that he has not sought to draw support for the rule from the equality clause of the United States Constitution, but evolved it purely as a rule of administrative law.
Even in England, the recent trend in administrative law is in that direction as is evident from what is stated at pages 540 41 in Prof. Wade 's Administra tive Law 4th edition.
There is no reason why we should hesitate to adopt this rule as a part of our continually expanding administrative law.
XXX XXX XXX It is, therefore, obvious that both having regard to the constitutional mandate of Article 14 as also the judicially evolved rule of administrative law, the 1st respondent was not entitled to act arbitrarily in accepting the tender of the 4th respondents, but was bound to conform to the stand ard or norm laid down in paragraph I of the notice inviting tenders which required that only a person running a regis tered.
Find II Class hotel or restaurant and having at least 5 years ' experience as such should be eligible to tender.
It was not the contention of the appellant that this standard or norm prescribed by the 1st respondent was dis criminatory having no just or reasonable relation to the object of inviting tenders namely, to award the contract to a sufficiently experienced person who would be able to run efficiently a find class restaurant at the airport.
Admit tedly the standard or norm was reasonable and non discrimi natory and once such a standard or norm for running a Find Class restaurant should be awarded was laid down, the 1st respondent was not entitled to depart from it and to award the contract to the 4th respondents who did not satisfy the condition of eligibility prescribed by the standard or norm.
If there was no acceptable tender from a person who satis fied the condition of eligibility, the 1st respondent could have rejected the tenders and invited fresh tenders on the basis of a less stringent standard or norm, but it could not depart from the standard or norm prescribed by it and arbi trarily accept the tender of the 4th respondents.
When the 1st respondent entertained the tender of the 4th respondents even though they did not have 5 years ' expe 238 rience of running a II Class restaurant or hotel, denied equality of opportunity to others similarly situate in the matter of tendering for the contract.
There might have been many other persons, in fact the appellant himself claimed to be one such person, who did not have 5 years ' experience of running a II Class restaurant, but who were otherwise compe tent to run such a restaurant and they might also have competed with the 4th respondents for obtaining the con tract, but they were precluded from doing so by the condi tion of eligibility requiring five years ' experience.
The action of the 1st respondent in accepting the tender of the 4th respondents, even though they did not satisfy the pre scribed condition of eligibility, was clearly discriminato ry, since it excluded other person similarly situate from tendering for the contract and it was plainly arbitrary and without reason.
The acceptance of the tender of the 4th respondents was, in the circumstances invalid as being violative of the equality clause of the Constitution as also of the rule of administrative law inhibiting arbitrary action." Shri Vaidyanathan, who supplemented the arguments for the petitioner, contended that this rule has been demonstra bly infringed in the present case, even on the K.P.C. 's own showing.
He cited two documents filed by the K.P.C. to substantiate this contention.
The first is "A note on the tendering system in K.P.C." which, inter alia, reads: "2.00 Brief tender notification containing description of the work, estimated cost of the work, period of completion and the minimum prequalifying/eligibility conditions required and other general requirements such as the value/ fashion of C.M.D. to be furnished, latest certificates works, and furnishing of audited balance sheet etc.
, duly indicating the dates for issuing and receipt of tenders is widely circulated and also advertised in leading newspapers for the information of the intending tenderers.
Where prequalifying conditions are notified in the notification, the applications for the issue of tenders is carefully scrutinised with reference to these requirements and the tenders will be issued to those who comply with all the prequalifying/ eligibility requirements.
Apart from the prequalifying conditions contained in the brief tender notification, certain general requirements as described above will also be looked into.
any deficiency in the gener al requirements 239 will, however, not disqualify the tenderers from receiving the tender books as these conditions could be satisfied prior to acceptance of the successful tender.
Any clarifica tions required on the prequalifying requirements/general requirements will also be obtained before issue of tender documents from the intending tenderers.
The tenders will be issued to those tenderers who comply with the prequalifying conditions.
The second is the record of minutes showing what they actu ally did: "57.01 There was extended discussion on the issue.
C.M.D. also informed that one of the tenderers had sent a represen tation objecting to the consideration of the tender of M/s M.C.C. on the ground that they had not fulfilled the prequalifying requirements.
There was a discussion as to whether the stipulations mentioned in the N.I.T. other than those stipulated under prequalifying conditions have to be mandatorily fulfilled before the tenders were filed.
It was clarified that only three prequalifying conditions were prescribed in the N.I.T. and other details called for vide para 5(c) of N.I.T., were only for information and are such they could be met before consideration of the tenders.
It was clarified that while tenders which did not meet minimum prequalifying conditions were not eligible to be considered at all, any shortcoming in furnishing the details at the time of tendering would not disqualify the tenderer from bidding for the work, so long as the conditions could be met before finalisation of the award.
It was further clarified that the word 'shall ' used in the N.I.T. has been the normal practice in all tenders and agreement clauses and the deci sion of the K.P.C. and the application other than the mini mum qualifying requirement should be prerogative of K.P.C. only.
It was informed that the practice in K.P.C. so far has been to go by the minimum qualifying requirements as stated in the N.I.T. and the rest of the information were only for assessing the capabilities of the tenderers as well as their eligibility and simply because Mr. G.J. Fernandez has made a complaint it would not be proper to deviate from this estab lished procedure.
As per clause 11, the Corporation reserves the fight to reject or accept the tender without assigning any reasons.
In this particular case, the lacuna in furnish ing the information has been set right subsequently by the tenderer before opening of the price documents, the Chief Engineer had 240 come to the conclusion that the firm had fulfilled all the prequalifying requirements and as such the tender of M/s M.C.C. had been found to be in order.
It was also clarified by GM(T) that the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used as this item of work was essentially for a filler wall and the walls would be non load bearing.
It was clarified that those who were prequalified had satisfied the condition with regard to quantity of brick masonry work.
57.02 Under the circumstances, the Committee recommended entrustment of work to M/s M.C.C. at their quoted rates amounting to Rs.209.39 lakhs together with their stipulation regarding release of security deposit against furnishing bank guarantee.
57.03 However, it was decided that in future it should be made clear that only prequalifying conditions would be mandatory.
" These two documents, particularly the last sentence of the second one, clearly show, Shri Vaidyanathan urged, that the K.P.C. had relaxed its N.I.T. standards in favour of the M.C.C. Interesting as this argument is, we do not see much force in it.
In the first place, although, as we have ex plained above, para V cannot but be read with para I and that the supply of some of the documents referred to in para V is indispensable to assess whether the applicant fulfills the prequalifying requirements set out in para I, it will be too extreme to hold that the omission to supply every small detail referred in para V would affect the eligibility under para I and disqualify the tenderer.
The question how far the delayed supply, or omission to supply, any one or more of the details referred to therein will affect any of the prequalifying conditions is a matter which it is for the K.P.C. to assess.
We have seen that the documents having a direct learning on para I viz. regarding output of concrete and brick work had been supplied in time.
The delay was only in supplying the details regarding "hollow cement blocks" and to what extent this lacuna effected the conditions in para I was for the K.P.C. to assess.
The minutes relied upon show that, after getting a clarification from the General Manager (Technical), the conclusion was reached that "the use of cement hollow block masonry may not be required at all and instead the brick masonry may be used".
In other words, the contract was unlikely to need any work in hollow cement blocks and so the documents in question was consid ered to be of no importance in judging the pre qualifying requirements.
There is nothing wrong with this, 241 particularly as this document was eventually supplied.
Secondly, whatever may be the interpretation that a court may place on the N.I.T, the way in which the tender documents issued by it has been understood and implemented by the K.P.C. is explained in its "note", which sets out the general procedure which the K.P.C. was following in regard to N.I.T.s issued by it from time to time.
Para 2.00 of the "note" makes it clear that the K.P.C. took the view that para I alone incorporated the "minimum prequalifying/eligi bility conditions" and the data called for under para V was in the nature "general requirements".
It further clarifies that while tenders will be issued only to those who comply with the prequalifying conditions, any deficiency in the general requirements will not disqualify the applicant from receiving tender documents and that data regarding these requirements could be supplied later.
Right or wrong, this was the way they had understood the standard stipulations and on the basis of which it had processed the applications for contracts all along.
The minutes show that they did not deviate or want to deviate from this established procedure in regard to this contract, but, on the contrary, decided to adhere to it even in regard to this contract.
They only decided, in view of the contentions raised by the appellant that para V should also be treated as part of the prequali fying conditions, that they would make it specific and clear in their future N.I.T.s that only the fulfilment of prequal ifying conditions would be mandatory.
If a party has been consistently and bona fide interpreting the standards pre scribed by it in a particular manner, we do not think this Court should interfere though it may be inclined to read or construe the conditions differently.
We are, therefore, of opinion that the High Court was right in declining to inter fere.
Thirdly, the conditions and stipulations in a tender notice like this have two types of consequences.
The first is that the party issuing the tender has the right to punc tiliously and rigidly enforce them.
Thus, if a party does not strictly comply with the requirements of paras III, V or VI of the N.I.T., it is open to the K.P.C. to decline to consider the party for the contract and if a party comes to Court saying that the K.P.C. should be stopped from doing so, the Court will decline relief.
The second consequence, indicated.by this Court in earlier decisions, is not that the K.P.C. cannot deviate from these guidelines at all in any situation but that any deviation, if made, should not result in arbitrariness or discrimination.
It comes in for application where the non conformity with, or relaxation from, the prescribed standards results in some substantial prejudice or injustice to any of the parties involved or to public interest in general.
For example, in this very case, the K.P.C. made some changes in the time frame origi 242 nally prescribed.
These changes affected all intending applicants alike and were not objectionable.
In the same way, changes or relaxations in other directions would be unobjectionable unless the benefit of those changes or relaxations were extended to some but denied to others.
The fact that a document was belatedly entertained from one of the applicants will cause substantial prejudice to another party who wanted, likewise, an extension of time for filing a similar certificate or document but was declined the benefit.
It may perhaps be said to cause prejudice also to a party which can show that it had refrained from applying for the tender documents only because it thought it would not be able to produce the document by the time stipulated but would have applied had it known that the rule was likely to be relaxed.
But neither of these situations is present here.
Sri Vaidhyanathan says that in this case one of the appli cants was excluded at the preliminary stage.
But it is not known on what grounds that application was rejected nor has that party come to Court with any such grievance.
The ques tion, then, is whether the course adopted by the K.P.C. has caused any real prejudice to the appellant and other parties who had already supplied all the documents in time and sought no extension at all? It is true that the relaxations of the time schedule in the case of one party does affect even such a person in the sense that he would otherwise have had one competitor less.
But, we are inclined to agree with the respondent 's contention that while the rule in Ramana 's case (supra) will be readily applied by Courts to a case where a person complains that a departure from the qualifi cations has kept him out of the race, injustice is less apparent where the attempt of the applicant before Court is only to gain immunity from competition.
Assuming for pur poses of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract; on the other hand, its tender has received due and full consideration.
If, save for the delay in filing one of the relevant docu ments, M.C.C. is also found to be qualified to tender for the contract, no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the M.C.C. and in the K.P.C. going in for a choice of the better on the merits.
The appellant had no doubt also urged that the M.C.C. had no experience in this line of work and that the appellant was much better quali fied for the contract.
The comparative merits of the appel lant vis a vis M.C.C. are, however, a matter for the K.P.C. (counselled by the T.C.E.) to decide and not for the Courts.
We were, therefore, rightly not called upon to go into this question.
For the reasons discussed above, this appeal fails and is dismissed.
But we make no order as to costs.
R.N.J. Appeal dis missed.
| The petitioner aggrieved by the award of a contract by the respondent in favour of Mysore Construction Company (M.C.C.) filed a Writ Petition and a further Writ Appeal in the Karnataka High Court.
Being unsuccessful there he came up in appeal before this Court by way of special leave.
The single judge of the High Court had taken the view that prerequisites for the supply of tender forms were contained in Para I of the Notification Inviting Tender (NIT) and the details called for in Para V could be supplied any time.
The Division Bench on appeal did not express any opinion regarding the requirements set out in para V but was of the view that there was nothing unfair or arbitrary about the award of the contract to the MCC.
In appeal before this Court the plea of the petitioner is that the Karnataka Power Corporation should not have accepted the tender of MCC, as the MCC did not fulfil certain preliminary requirements contained in Para I and V of the NIT which according to him have to be fulfilled before the forms of tender could be supplied to any intending contractor.
Dismissing the appeal of the petitioner, the Court, HELD: Para V cannot but be read with para I. The supply of some of the documents referred to in para V is indispens able to assess whether the applicant fulfills the prequali fying requirements set out in para I.
It will be too extreme to hold that the omission to supply every small detail referred to in para V would affect the eligibility under para I and disqualify the tenderer.
[240E F] 230 If a party has been consistently and bona fide inter preting the standards prescribed by it in a particular manner, this Court should not interfere though it may be inclined to read or construe the conditions differently.
[241E] Assuming for purposes of argument that there has been a slight deviation from the terms of the NIT, it has not deprived the appellant of its right to be considered for the contract.
On the other hand its tender has received due and full consideration.
If, save for the delay in filing one of the relevant documents, MCC is also found to be qualified to tender for the contract.
no injustice can be said to have been done to the appellant by the consideration of its tender side by side with that of the MCC and in the KPC going in for a choice of the better on the merits.
[242E G] The comparative merits of the appellant ViS a vis MCC are, however, a matter for the KPC to decide and not for the Courts.[243C D] Ram Gajadher Nishad vs State of U.P., (C.A. 1819/89); Ramana Dayaram Sherry vs The International Airport Authority of India & Ors., ; , referred to.
|
No. 268 of 1989 etc.
(Under Article 32 of the Constitution of India).
K. Parasaran, Attorney General, R.K. Garg, Ms. Indira Jaising, L.N. Sinha, Dr. V. Gauri Shankar, Vepa P. Sarathi, Shanti Bhushan, Rakesh Luthra, C.L. Sahu, Indeevar Goodwill, N.S. Malik, N.S. Pundir, R.C, Kaushik, D.K. Garg, Rajeev Dhawan, Miss Kamini 620 Jaiswal, Anip Sachthey, R.C. Pathak, H.D. Pathak, Harish Uppal, S.K. Gambhir, Gopal Subramanium, D.S. Shastri, Arun Sharma, Miss A. Subhashini, C.V.S. Rao, Satish K. Agnihotri, Ashok Kumar Singh, R.K. Jain, Kailash Vasdev and Prashant Bhushan for the appearing parties.
The Judgments of the Court were delivered by SABYASACHI MUKHARJI, CJ. 1.
Is the (hereinafter referred to as 'the Act ') is constitutionally valid? That is the question.
The Act was passed as a sequel to a grim tragedy.
On the night of 2nd December, 1984 occurred the most tragic industrial disaster in recorded human history in the city of Bhopal in the State of Madhya Pradesh in India.
On that night there was massive escape of lethal gas from the MIC storage tank at Bhopal Plant of the Union Carbide (I) Ltd. (hereinafter referred to as 'UCIL ') resulting in large scale death and untold disaster.
A chemical plant owned and oper ated by UCIL was situated in the northern sector of the city of Bhopal.
There were numerous hutments adjacent to it on its southern side, which were occupied by impoverished squatters.
UCIL manufactured the pesticides, Sevin and Tamik, at the Bhopal plant, at the request of, it is stated by Judge John F. Keenan of the United States District Court in his judgment, and indubitably with the approval of the Govt.
of India.
UCIL was incorporated in 1984 under the appropriate Indian law: 50.99% of its shareholdings were owned by the Union Carbide Corporation (UCC), a New York Corporation, L.I.C. and the Unit Trust of India own 22% of the shares of U.C.I.L., a subsidiary of U.C.C. 3.
Methyl Isocyanate (MIC), a highly toxic gas, is an ingredient in the production of both Sevin and Temik.
On the night of the tragedy MIC leaked from the plant in substan tial quantities.
the exact reasons for and circumstances of such leakage have not yet been ascertained or clearly estab lished.
The results of the disaster were horrendous.
Though no one is yet certain as to how many actually died as the immediate and direct result of the leakage, estimates at tribute it to about 3,000.
Some suffered injuries the ef fects of which are described as Carcinogenic and ontogenic by Ms. Indira Jaisingh, learned counsel; some suffered injuries serious and permanent and some mild and temporary.
Livestock was killed, damaged and infected.
Businesses were interrupted.
Environment was polluted and the ecology af fected, flora and fauna disturbed.
621 4.
On 7th December, 1984, Chairman of UCC Mr. Warren Anderson came to Bhopal and was arrested.
He was later released on bail.
Between December 1984 and January 1985 suits were filed by several American lawyers in the courts in America on behalf of several victims.
It has been stated that within a week after the disaster, many American law yers, described by some as 'ambulance chasers ', whose fees were stated to be based on a percentage of the contingency of obtaining damages or not, flew over to Bhopal and ob tained Powers of Attorney to bring actions against UCC and UCIL.
Some suits were also filed before the District Court of Bhopal by individual claimants against UCC (the American Company) and the UCIL.
On or about 6th February, 1985, all the suits in various U.S. Distt.
Courts were consolidated by the Judicial Panel on Multi District Litigation and assigned to U.S. Distt.
Court, Southern Distt.
of New York.
Judge Keenan was at all material times the Presiding Judge there.
On 29th March, 1985, the Act in question was passed.
The Act was passed to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
On 8th April, 1985 by virtue of the Act the Union of India filed a complaint before the U.S. Distt.
Court, Southern Distt.
of New York.
On 16th April, 1985 at the first pre trial conference in the consolidated action transferred and assigned to the U.S. Distt.
Court, Southern Distt.
, New York, Judge Keenan gave the following directions: (i) that a three member Executive Committee be formed to frame and develop issues in the case and prepare expeditiously for trial or settle ment negotiations.
The Committee was to com prise of one lawyer selected by the firm retained by the Union of India and two other lawyers chosen by lawyers retained by the individual plaintiffs.
(ii) that as a matter of fundamental human decency, temporary relief was necessary for the victims and should be furnished in a systematic and coordinated fashion without unnecessary delay regardless of the posture of the litigation then pending.
On 24th September, 1985 in exercise of powers con ferred by section 9 of the Act, the Govt.
of India framed the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme, 1985 (hereinafter called the Scheme).
622 8.
On 12th May, 1986 an order was passed by Judge Keenan allowing the application of UCC on forum non convenience as indicated hereinafter.
On 21st May, 1986 there was a motion for fairness hearing on behalf of the private plaintiffs.
On 26th June, 1986 individual plaintiffs filed appeal before the US Court of Appeal for the second circuit challenging the order of Judge Keenan.
By an order dated 28th May, 1986 Judge Keenan declined the motion for a fairness hearing.
The request for fairness hearing was rejected at the instance of Union of India in view of the meagerness of the amount of proposed settlement.
On 10th July, 1986 UCC filed an appeal before the US Court of Appeal for the Second Circuit.
It challenged Union of India being entitled to American mode of discovery, but did not challenge the other two conditions imposed by Judge Keenan, it is stated.
On 28th July, 1986 the Union of India filed cross appeal before the US Court of Appeal praying that none of the conditions imposed by Judge Keenan should be disturbed.
In this connection it would be pertinent to set out the conditions incorporated in the order of Judge Keenan, dated 12th May, 1986 whereby he had dismissed the case before him on the ground of forum non convenience, as mentioned before.
The conditions were fol lowing: 1.
That UCC shall consent to the jurisdiction of the courts of India and shall continue to waive defenses based on the statute of limita tion, 2.
That UCC shall agree to satisfy any judg ment rendered by an Indian court against it and if applicable, upheld on appeal, provided the judgment and affirmance "comport with minimal requirements of due process"; and 3.
That UCC shah be subject to discovery under the Federal Rules of Civil Procedure of the US after appropriate demand by the plaintiffs.
On 5th September, 1986 the Union of India filed a suit for damages in the Distt.
Court of Bhopal, being regu lar suit No. H 13/86.
It is this suit, inter alia, and the orders passed therein which were settled by the orders of this Court dated 14th & 15th February, 1989, which will be referred to later.
On 17th November, 1986 upon the applica tion of the Union of India, the Distt.
Court, Bhopal, grant ed a temporary injunction restraining the UCC from selling assets, paying dividends or buying back debts.
On 27th November, 1986 the UCC gave an undertaking to preserve and maintain unencumbered assets to the extent of 3 billion US dollars.
623 10.
On 30th November, 1986 the Distt.
Court, Bhopal lifted the injunction against the Carbide selling assets on the strength of the written undertaking by UCC to maintain unencumbered assets of 3 billion US dollars.
On 16th Decem ber, 1986 UCC filed a written statement contending that they were not liable on the ground that they had nothing to do with the Indian Company; and that they were a different legal entity; and that they never exercised any control and that they were not liable in the suit.
Thereafter, on 14th January, 1987 the Court of Appeal for the Second Circuit affirmed the decision of Judge Keenan but deleted the condi tion regarding the discovery under the American procedure granted in favour of the Union of India.
It also suo motu set aside the condition that on the judgment of the Indian court complying with due process and the decree issued should be satisfied by UCC.
1t ruled that such a condition cannot be imposed as the situation was covered by the provi sions of the Recognition of Foreign Country Money Judgments Act.
On 2nd April, 1987, the court made a written propos al to all parties for considering reconciliatory interim relief to the gas victims.
In September, 1987, UCC and the Govt.
of India sought time from the Court of Distt.
Judge, Bhopal, to explore avenues for settlement.
It has been asserted by the learned Attorney General that the possibili ty of settlement was there long before the full and final settlement was effected.
He sought to draw our attention to the assertion that the persons concerned were aware that efforts were being made from time to time for settlement.
However, in November '87 both the Indian Govt.
and the Union Carbide announced that settlement talks had failed and Judge Deo extended the time.
The Distt.
Judge of Bhopal on 17th December, 1987 ordered interim relief amounting to Rs.350 crores.
Being aggrieved thereby the UCC filed a Civil Revision which was registered as Civil Revision Petition No. 26/88 and the same was heard.
On or about 4th February, 1988, the Chief Judi cial Magistrate of Bhopal ordered notice for warrant on Union Carbide, Hong Kong for the criminal case filed by CBI against Union Carbide.
The charge sheet there was under sections 304, 324, 326, 429 of the Indian Penal Code read with section 35 IPC and the charge was against S/Shri Warren Anderson, Keshub Mahindra.
Vijay Gokhale, J. Mukund, Dr. R.B. Roy Chowdhay.
S.P. Chowdhary, K.V. Shetty, S.1.
Qureshi and Union Carbide of U.S.A., Union Carbide of Hong Kong and Union Carbide having Calcutta address.
It charged the Union Carbide by saying that MIC gas was stored and it was further stated that MIC had to be stored and handled 624 in stainless steel which was not done.
The charge sheet, inter alia, stated that a Scientific Team headed by Dr. Varadarajan had concluded that the factors which had led to the toxic gas leakage causing its heavy toll existed in the unique properties of very high reactivity, volatility and inhalation toxicity of MIC.
It was further stated in the charge sheet that the needless storage of large quantities of the material in very large size containers for inordi nately long periods as well as insufficient caution in design, in choice of materials of construction and in provi sion of measuring and alarm instruments, together with the inadequate controls on systems of storage and on quality of stored materials as well as lack of necessary facilities for quick effective disposal of material exhibiting instability, led to the accident.
It also charged that MIC was stored in a negligent manner and the local administration was not informed, inter alia, of the dangerous effect of the expo sure of MIC or the gases produced by its reaction and the medical steps to be taken immediately.
It was further stated that apart from the design defects the UCC did not take any adequate remedial action to prevent back flow of solution from VGS into RVVH and PVH lines.
There were various other acts of criminal negligence alleged.
The High Court passed an order staying the operation of the order dated 17.12.87 directing the defendant applicant to deposit Rs.3,500 mil lions within two months from the date of the said order.
On 4th April, 1988 the judgment and order were passed by the High Court modifying the order of the Distt.
Judge, and granting interim relief of Rs.250 crores.
The High Court held that under the substantive law of torts, the Court has jurisdiction to grant interim relief under Section 9 of the CPC.
On 30th June, 1988 Judge Deo passed an order restrain ing the Union Carbide from settling with any individual gas leak plaintiffs.
On 6th September, 1988 special leave was granted by this Court in the petition filed by UCC against the grant of interim relief and Union of India was also granted special leave in the petition challenging the reduc tion of quantum of compensation from Rs.350 crores to Rs.250 crores.
Thereafter, these matters were heard in November December '88 by the bench presided over by the learned Chief Justice Of India and hearing, continued also in January Feb ruary '89 and ultimately on 14 15th February, 1989 the order culminating in the settlement was passed.
In judging the constitutional validity of the Act, the subsequent events, namely, how the Act has worked itself out, have to be looked into.
It is, therefore, necessary to refer to the two orders of this Court.
The proof of the cake is in its eating, it is said, and it is perhaps not possible to ignore the terms of the settlement reached on 14th and 625 15th February, 1989 in considering the effect of the lan guage used in the Act.
Is that valid ' or proper or has the Act been worked in any improper way? These questions do arise.
On 14th February, 1989 an order was passed in C.A. Nos.
3187 88/88 with S.L.P. (C) No. 13080/88.
The parties thereto were UCC and the Union of India as well as Jana Swasthya Kendra, Bhopal, Zehraeli Gas Kand Sangharsh Morcha, Bhopal.
That order recited that having considered all the facts and the circumstances of the case placed before the Court, the material relating to the proceedings in the Courts in the United States of America, the offers and counter offers made between the parties at different stages during the various proceedings, as well as the complex issues of law and fact raised and the submissions made thereon, and in particular the enormity of human suffering occasioned by the Bhopal Gas disaster and the pressing urgency to provide immediate and substantial relief to victims of the disaster, the 'Court found that the case was preeminently fit for an overall settlement between the parties covering all litigations, claims, rights and liabil ities relating to and arising out of the disaster and it was found just, equitable and reasonable to pass, inter alia, the following orders: .lm "(1) The Union Carbide Corporation shall pay a sum of U.S. Dollars 470 million (Four hundred and seventy millions) to the Union of India in full settlement of all claims, fights and liabilities related to and arising out of Bhopal Gas disaster.
(2) The aforesaid sum shall be paid by the Union Carbide Corporation to the Union of India on or before 31st March, 1989.
(3) To enable the effectuation of the settlement, all civil proceedings related to and arising out of the Bhopal Gas disaster shall hereby stand transferred to this Court and shall stand concluded in terms of the settlement, and all criminal proceedings related to and arising out of the disaster shall stand quashed wherever these may be pending 15.
A written memorandum was filed thereafter and the Court on 15th February, 1989 passed an order after giving due consideration thereto.
The terms of settlement were as follows: 626 "1.
The parties acknowledge that the order dated February 14, 1989 disposes of in its entirety all proceedings in Suit No. 1113 of 1986.
This settlement shall finally dispose of all past, present and future claims, causes of action and civil and criminal proceedings (of any nature whatsoever wherever pending) by all Indian citizens and all public and private entities with respect to all past, present or future deaths, personal injuries, health effects, compensation, losses, damages and civil and criminal complaints of any nature whatsoever against UCC, Union Carbide India Limited, Union Carbide Eastern, and all of their subsidiaries and affiliates as well as each of their present and former directors, officers, employees, agents, representatives, attorneys, advocates and solicitors arising out of, relating to or connected with the Bhopal gas leak disaster, including past, present and future claims, causes of action and proceedings against each other.
All such claims and causes of action whether within or outside India of Indian citizens, public or private entities are hereby extinguished, including without limitation each of the claims filed or to be filed under the Bhopal Gas Leak Disaster (Registration and Processing of Claims) Scheme 1985, and all such civil proceedings in India are hereby transferred to this Court and are dismissed without preju dice, and all such criminal proceedings in cluding contempt proceedings stand quashed and accused deemed to be acquitted.
Upon full payment in accordance with the Court 's directions the undertaking given by UCC pursuant to the order dated November 30, 1986 in the District Court, Bhopal stands discharged, and all orders passed in Suit No. 1113 of 1986 and or in any Revision therefrom, also stand discharged.
It appears from the statement of objects & reasons of the Act that the Parliament recognized that the gas leak disaster involving the release, on 2nd and 3rd December, 1984 of highly noxious and abnormally dangerous gas from a plant of UCIL, a subsidiary of UCC, was of an unprecedented nature, which resulted in loss of life and damage to proper ty on an extensive scale, as mentioned before.
It was stated that the victims who had managed to survive were still suffering from the adverse effects and the further complica tions which might arise in their cases, of course, could not be fully visualised.
It was asserted by 627 Ms. Indira Jaising that in case of some of the victims the injuries were carcinogenic and ontogenic and these might lead to further genetic complications and damages.
The Central Govt.
and the Govt.
of Madhya Pradesh and various agencies had to incur expenditure on a large scale for containing the disaster and mitigating or otherwise coping with the effects thereto.
Accordingly, the Bhopal Gas Leak Disaster (Processing of Claims) Ordinance, 1985 was promul gated, which provided for the appointment of a Commissioner for the welfare of the victims of the disaster and for the formulation of the Scheme to provide for various matters necessary for processing of the claims and for the utilisa tion by way of disbursal or otherwise of amounts received in satisfaction of the claims.
Thereafter, the Act was passed which received the assent of the President on 29th March, 1985.
Section 2(b) of the Act defines 'claim '.
It says that "claims" means (i) a claim, arising out of, or connected with, the disaster, for compensation or damages for any loss of life or personal injury which has been, or is likely to be suffered; (ii) a claim, arising out of, or connected with, the disaster, for any damage to property which has been, or is likely to be, sustained; (iii) a claim for expenses incurred or required to be incurred for containing the disaster or mitigating or otherwise coping with the effects of the disaster; (iv) any other claim (including any claim by way of loss of business or employment) arising out of, or connected with, the disas ter.
A "claimant" is defined as a person entitled to make a claim.
It has been provided in the Explanation to Section 2 that for the purpose of clauses (b) and (c), where the death of a person has taken place as a result of the disaster, the claim for compensation or damages for the death of such person shall be for the benefit of the spouse, children (including a child in the womb) and other heirs of the deceased and they shall be deemed to be the claimants in respect thereof.
Section 3 is headed "Power of Central Govt.
to represent claimants".
It provides as follows: "3(1) Subject to the other provisions of this Act, the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is enti tled to make, a claim for all purposes con nected with such claim in the same manner and to the same effect as such persons.
(2) In particular and without prejudice to the generality of 628 the provisions of sub section (1), the pur poses referred to therein include (a) Institution of any suit or other proceed ing in or before any court or other authority (whether within or outside India) or withdraw al of any such suit or other proceeding, and (b) entering into a compromise.
(3) The provisions of sub section (1) shall apply also in relation to claims in respect of which suits or other proceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act: Provided that in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, the Central Govt.
shall represent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Section 4 of the Act is headed as "Claimant 's right to be represented by a legal practitioner".
It provides as follows: "Notwithstanding anything contained in section 3, in representing, and acting in place of, any person in relation to any claim, the Central Government shall have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
Section 5 deals with the powers of the Central Govt.
and enjoins that for the purpose of discharging its func tions under this Act, the Central Govt.
shall have the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908.
Section 6 provides for the ap pointment of a Commissioner and other officers and employ ees.
Section 7 deals with powers to delegate.
Section 8 deals with limitation, while section 9 deals with the power to frame Scheme.
The Central Govt. was enjoined to frame a scheme which was to take into account, inter alia, the processing of the claims for securing their enforcement, creation of a fund for meeting expenses in connection 629 with the administration of the Scheme and of the provisions of this Act and the amounts which the Central Govt.
might, after due appropriation made by the Parliament by law in that behalf, credit to the fund referred to in clauses above and any other amounts which might be credited to such fund.
Such Scheme was enjoined, as soon as after it had been framed, to be laid before each House of Parliament.
Section 10 deals with removal of doubts.
Section 11 deals with the overriding effect and provides that the provisions of the Act and of any Scheme framed thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
A Scheme has been framed and was published on 24th September, 1985.
Clause 3 of the said Scheme provides that the Deputy Commissioners appointed under Section 6 of the Act shall be the authorities for registration of Claims (including the receipt, scrutiny and proper categorisation of such claims under paragraph 5 of the Scheme) arising within the areas of their respective jurisdiction and they shall be assisted by such other officers as may be appointed by the Central Govt.
under Section 6 of the Act for scrutiny and verification of the claims and other related matters.
The Scheme also provides for the manner of filing claims.
It enjoins that the Dy.
Commissioner shall provide the required forms for filing the applications.
It also provides for categorisation and registration of claims.
Sub clause (2) of Clause 5 enjoins that the claims received for registration shall be placed under different heads.
Sub clause (3) of clause 5 enjoins that on the consideration of claims made under paragraph 4 of the Scheme, if the Dy.
Commissioner is of the opinion that the claims fall in any category different from the category mentioned by the claimant, he may decide the appropriate category after giving an opportunity to the claimant to be heard and also after taking into consideration any facts made available to him in this behalf.
Sub clause (6) of Clause 5 enjoins that if the claimant is not satisfied with the order of the Dy.
Commissioner, he may prefer an appeal against such order to the Commissioner, who shall decide the same.
Clause 9 of the Scheme provides for processing of Claims Account Fund, which the Central Govt.
may, after due appropriation made by Parliament, credit to the said Fund.
It provides that there shall also be a Claims and Relief Fund, which will include the amounts 630 received in satisfaction of the claims and any other amounts made available to the Commissioner as donation or for relief purposes.
Subclause (3) of clause 10 provides that the amount in the said Fund shall be applied by the Commissioner for, disbursal of amounts in settlement of claims, or as relief, or apportionment of part of the Fund for disbursal of amounts in settlement of claims arising in future or for disbursal of amounts to the Govt.
of Madhya Pradesh for the social and economic rehabilitation of the persons affected by the Bhopal gas leak disaster.
Clause 11 of the Scheme deals with the disbursal, apportionment of certain amounts, and sub clause (2) thereof enjoins that the Central Govt. may determine the total amount of compensation to be apportioned for each category of claims and the quantum of compensation payable, in gener al, in relation to each type of injury or loss.
Sub clause (5) thereto provides that in case of a dispute as to disbur sal of the amounts received in satisfaction of claims, an appeal shall lie against the order of the Dy.
Commissioner to the Additional Commissioner, who may decide the matter and make such disbursal as he may, for reasons to be record ed in writing, think fit.
The other clauses are not relevant for our present purposes.
Counsel for different parties in all these matters have canvassed their submissions before us for the gas victims.
Mr. R.K. Garg, Ms. Indira Jaising, and Mr. Kailash Vasudev have made various submissions challenging the valid ity of the Act on various grounds.
They all have submitted that the Act should be read in the way they suggested and as a whole.
Mr. Shanti Bhushan, appearing for interveners on behalf of Bhopal Gas Peedit Mahila Udyog Sangathan and following him Mr. Prashant Bhushan have urged that the Act should be read in the manner canvassed by them and if the same is not so read then the same would be violative of the fundamental rights of the victims, and as such unconstitu tional.
The learned Attorney General assisted by Mr. Gopal Subramanium has on the other hand urged that the Act is valid and constitutional and that the settlement arrived at on 14th/15th February is proper and valid.
In order to appreciate the background Ms. Indira Jaising placed before us the proceedings of the Lok Sabha wherein Mr. Veerendra Patil, the Hon 'ble Minister, stated on March 27, 1985 that the tragedy that had occurred in Bhopal on 2nd and 3rd December, 1984 was unique and unprecedented in character and magnitude not only for our country but for the entire world.
It was stated that one of 631 the options available was to settle the case in Indian courts.
The second one was to file the cases in American courts.
Mr. Patil reiterated that the Govt.
wanted to pro ceed against the parent company and also to appoint a Com mission of Inquiry.
Mr. Garg in support of the proposition that the Act was unconstitutional, submitted that the Act must be exam ined on the touchstone of the fundamental rights on the basis of the test laid down by this court in state of Madras vs V.G, Row, ; , There at page 607 of the report this Court has reiterated that in considering the reasona bleness of the law imposing restrictions on the fundamental rights, both the substantive and the procedural aspects of the impugned restrictive law should be examined from the point of view of reasonableness.
And the test of reasonable ness, wherever prescribed, should be applied to each indi vidual Statute impugned, and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying purpose of the restrictions im posed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.
(The emphasis supplied).
Chief Justice Patanjali Sastri reiterated that in evaluating such elusive factors and forming their own conception of what is reasona ble, in the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision would play an important role.
Hence, whether by sections, 3, 4 & 11 the rights of the victims and the citizens to fight for their own causes and to assert their own grievances have been taken away validly and properly, must be judged in the light of the prevailing conditions at the time, the nature of the right of the citizen, the purpose of the restrictions on their rights to sue for enforcement in the courts of law or for punishment for offences against his person or property, the urgency and extent of the evils sought to be remedied by the Act, and the proportion of the impairment of the rights of the citizen with reference to the intended remedy pre scribed.
According to Mr. Garg, the present position called for a comprehensive appreciation of the national and inter national background in which precious rights to life and liberty were enshrined as fundamental rights and remedy for them was also guaranteed under Article 32 of the Constitu tion.
He sought to urge that multinational corporations have assumed powers or potencies to override the political and economic independence of the sovereign nations which have 632 been used to take away in the last four decades, much wealth out of the Third World.
Now these are plundered much more than what was done to the erstwhile colonies by imperialist nations in the last three centuries of foreign rule.
The role of courts in cases of conflict between rights of citi zens and the vast economic powers claimed by multinational corporations to deny moral and legal liabilities for their corporate criminal activities should not be lost sight of.
He, in this background, urged that these considerations assume immense importance to shape human fights jurispru dence under the Constitution, and for the Third World to regulate and control the power and economic interests of multinational corporations and the power of exploitation and domination by developed nations without submitting to due observance of the laws of the developing countries.
It therefore appears that the production of, or carrying on trade in dangerous chemicals by multinational industries on the soil of Third World countries call for strictest en forcement of constitutional guarantees for enjoying human fights in free India, urged Mr. Garg.
In this connection, our attention was drawn to the Charter of Universal Declara tion of Human Rights.
Article 1 of the Universal Declaration of Human Rights, 1948 reiterates that all human beings are born free and equal in dignity and rights.
Article 3 states that everyone has right to life, liberty and security of person.
Article 6 of the Declaration states that everyone has the right to recognition everywhere as a person before the law.
Article 7 states that all are equal before the law and are entitled without any discrimination to equal protec tion of the law.
All are entitled to equal protection against any discrimination in violation of the Declaration of Human Rights and against any incitement to such discrimi nation.
Article 8 states that everyone has the right to an effective remedy by competent National Tribunal for acts violating fundamental rights guaranteed to him by the Con stitution or by the law.
It is, therefore, necessary to bear in mind that Indian citizens have a fight to live which cannot be taken away by the Union of India or the Govt.
of a State, except by a procedure which is just, fair and reason able.
The right to life includes the fight to protection of limb against mutilation and physical injuries, and does not mean merely the fight to breathe but also includes the fight to livelihood.
It was urged that this right is available in all its dimension till the last breath against all injuries to head, heart and mind or the lungs affecting the citizen or his next generation or of genetic disorders.
The enforce ment of the right to life or limb calls for adequate and appropriate reliefs enforceable in courts of law and of equity with sufficient power to offer adequate deterrence in all cases of corporate criminal liability under strict liability, absolute liability, punitive liability and crimi nal prosecution and 633 punishment to the delinquents.
The damages awarded in civil jurisdiction must be commensurate to meet well defined demands of evolved human rights jurisprudence in modern world.
It was, therefore, submitted that punishment in criminal jurisdiction for serious offences is independent of the claims enforced in civil jurisdiction and no immunity against it can be granted as part of settlement in any civil suit.
If any Act authorises or permits doing of the same, the same will be unwarranted by law and as such bad.
The Constitution of India does not permit the same.
Our attention was drawn to Article 21 of the Consti tution and the principles of international law.
Right to equality is guaranteed to every person under article 14 in all matters like the laws of procedure for enforcement of any legal or constitutional right in every jurisdiction, sub stantive law defining the rights expressly or by necessary implications, denial of any of these rights to any class of citizens in either field must have nexus with constitution ally permissible object and can never be arbitrary.
Arbi trariness is, therefore, anti thetical to the right of equality.
In this connection, reliance was placed on the observations of this Court in E.P. Royappa vs State of Tamil Nadu & Anr., ; and Maneka Gandhi vs Union of India, [1978] 2 SCR 621 where it was held that the view that Articles 19 & 21 constitute watertight compartments has been rightly overruled.
Articles dealing with different fundamen tal rights contained in Part III of the Constitution do not represent entirely separate streams of rights which do not mingle at any point of time.
They. are all parts of an integrated scheme in the Constitution and must be preserved and cannot be destroyed arbitrarily.
Reliance was placed on the observations in R.D. Shetty vs The I.A.A. of India & Ors., ; Hence, the rights of the citizens to fight for remedies and enforce their rights flowing from the breach of obligation in respect of crime cannot be obliterated.
The Act and Sections 3, 4 & 11 of the Act in so far as these purport to do so and have so operated, are violative of Articles 14, 19(1)(g) and 21 of the Constitu tion.
The procedure envisaged by the said Sections deprives the just and legitimate rights of the victims to assert and obtain their just dues.
The rights cannot be so destroyed.
It was contended that under the law the victims had right to ventilate their rights.
It was further contended that Union of India was a joint tort feasor along with UCC and UCIL.
It had negligent ly permitted the establishment of such a factory without proper safeguards exposing the victims and citizens to great danger.
Such a person or authority 634 cannot be entrusted to represent the victims by denying the victims their rights to plead their own cases.
It was sub mitted that the object of the Act was to fully protect people against the disaster of highly obnoxious gas and disaster of unprecedented nature.
Such an object cannot be achieved without enforcement of the criminal liability by criminal prosecution.
Entering into settlement without reference to the victims was, therefore, bad and unconstitu tional, it was urged.
If an Act, it was submitted, permits such a settlement or deprivation of the rights of the vic tims, then the same is bad.
Before we deal with the various other contentions raised in this case, it is necessary to deal with the appli cation for intervention and submission made on behalf of the Coal India in Writ Petition No. 268/89 wherein Mr. L.N. Sinha in his written submission had urged for the intervener that Article 21 of the Constitution neither confers nor creates nor determines the dimensions nor the permissible limits of restrictions which appropriate legislation might impose on the right to life or liberty.
He submitted that provisions for procedure are relevant in judicial or quasi judicial proceedings for enforcement of rights or obliga tions.
With regard to alteration of rights, procedure is governed by the Constitution directly.
He sought to inter vene on behalf of Coal India and wanted these submissions to be taken into consideration.
However, when this contention was sought to be urged before this Court on 25th April, 1989, after hearing all the parties, it appeared that there was no dispute between the parties in the instant writ petitions between the victims and the Government of India that the rights claimed in these cases are referrable to Article 21 of the Constitution.
Therefore, no dispute really arises with regard to the contention of Coal India and we need not consider the submissions urged by Shri Sinha on behalf of the intervener in this case.
It has been so re corded.
By the order dated 3rd March, 1989, Writ Petitions Nos. 268/89 and 164/86 have been directed to be disposed of by this Bench. ' We have heard these two writ petitions along with the other writ petitions and other matters as indicated hereinbefore.
The contentions are common.
These writ peti tions question the validity of the Act and the settlement entered into pursuant to the Act.
Writ Petition No. 164/86 is by one Shri Rakesh Shrouti who is an Indian citizen and claims to be a practising advocate having his residence at Bhopal.
He says that he and his family members were at Bhopal on 2nd/3rd December, 1984 and suffered immensely as a result of the gas leak.
He challenges the validity of the Act on various grounds.
He contends that the Union of India should not have the exclusive right to represent the 635 victims in suits against the Union Carbide and thereby deprive the victims of their right to sue and deny access to justice.
He further challenges the right of the Union of India to represent the victims against Union Carbide because of conflict of interests.
The conduct of the Union of India was also deprecated and it was further stated that such conduct did not inspire confidence.
In the premises, the said petitioner sought a declaration under Article 32 of the Constitution that the Act is void, inoperative and unen forceable as violative of Articles 14, 19 & 21 of the Con stitution Similarly, the second writ petition, namely, writ petition No. 268/89 which is filed by Sh.
Charan Lal Sahu, who is also a practising Advocate on behalf of the victims and claims to have suffered damages as a result of the gas leak.
challenges the Act.
He further challenges the settle ment entered into under the Act.
He says that the said settlement was violative of principles of natural justice and the fundamental right of the said petitioner and other victims.
It is his case that in so far as the Act permits such a course to be adopted, such a course was not permissi ble under the Constitution.
He further asserts that the Union of India was negligent and a joint tort feasor.
In the premises, according to him, the Act is bad, the settlement is bad and these should be set aside.
In order to determine the question whether the Act in question is constitutionally valid or not in the light of Articles 14, 19(l)(g) and 21 of the Constitution, it is necessary to find out what does the Act actually mean and provide for.
The Act in question, as the Preamble to the Act states, was passed in order to confer powers on the Central Government to secure that the claims arising out of, or connected with, the Bhopal gas leak disaster are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto.
There fore, securing the claims arising out of or connected with the Bhopal gas leak disaster is the object and purpose of the Act.
We have noticed the proceedings of the Lok Sabha in connection with the enactment of the Act.
Our attention was also drawn by the learned Attorney General to the proceed ings of the Rajya Sabha wherein the Hon 'ble Minister, Shri Virendra Patil explained that the bill enabled the Govern ment to assume exclusive right to represent and act, whether within or outside India in place of every person who had made or was entitled to make claim in relation to the disas ter and to institute any suit or other proceedings or enter into any compromise as mentioned in the Act.
The whole object of the Bill was to make procedural changes to the existing Indian law which would enable the Central Govern ment to take up the responsibility of fighting litigation on behalf of these victims.
The first point was that it 636 sought to create a locus standi in the Central Government to file suits on behalf of the victims.
The object of the Statute.
it was highlighted, was that because of the dimen sion of the tragedy covering thousands of people, large number of whom being poor, would not be able to go to the courts, it was necessary to create the locus standi in the Central Government to start the litigation for payment of compensation in the courts on their behalf.
The second aspect of the Bill was that by creating this locus standi in the Central Government, the Central Government became compe tent to institute judicial proceedings for payment of com pensation on behalf of the victims.
The next aspect of the Bill was to make a distinction between those on whose behalf suits had already been filed and those on whose behalf proceedings had not yet then been instituted.
One of the Members emphasised that under Article 21 of the Constitu tion, the personal liberty of every citizen was guaranteed and it has been widely interpreted as to what was the mean ing of the expression 'personal liberty '.
It was cmphasised that one could not take away the right of a person, the liberty of a person, to institute proceedings for his own benefit and for his protection.
It is from this point of view that it was necessary, the member debated, to preserve the right of a claimant to have his own lawyers to represent him along with the Central Government in the proceedings under Section 4 of the Act, this made the Bill constitution ally valid.
Before we deal with the question of constitutionali ty, it has to be emphasised that the Act in question deals with the Bhopal gas leak disaster and it deals with the claims meaning thereby claims arising out of or connected with the disaster for compensation of damages for loss of life or any personal injury which has been or is likely to be caused and also claims arising out of or connected with the disaster for any damages to property or claims for expenses incurred or required to be incurred for containing the disaster or making or otherwise coping with the impact of the disaster and other incidental claims.
The Act in question does not purport to deal with the criminal liabili ty, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This posi tion is clear from the provisions and the Preamble to the Act.
Learned Attorney General also says that the Act does not cover criminal liability.
The power that has been given to the Central Government is to represent the 'claims ', meaning thereby the monetary claims.
The monetary claims, as was argued on behalf of the victims, are damages flowing from the gas disaster.
Such damages, Mr. Garg and Ms. Jais ing submitted, are based on strict liability, absolute liability and punitive liability.
The Act does not, either expressly or impliedly, deal with the extent of the damages or 637 liability.
Neither section 3 nor any other section deals with any consequences of criminal liability.
The expression "the Central Government shall, and shall have the exclusive right to, represent, and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim for all purposes connected with such claim in the same manner and to the same effect as such person", read as it is, means that Central Government is substituted and vested with the exclusive right to act in place of the victims, i.e., eliminating the victims, their heirs and their legal representatives, in respect of all such claims arising out of or connected with the Bhopal gas leak disas ter.
The right, therefore, embraces right to institute proceedings within or outside India along with right to institute any suit or other proceedings or to enter into compromise.
Sub section 1 of section 3 of the Act, there fore, substitutes the Central Government in place of the victims.
The victims, or their heirs and legal representa tives, get their rights substituted in the Central Govern ment along with the concomitant right to institute such proceedings, withdraw such proceedings or suit and also to enter into compromise.
The victims or the heirs or the legal representatives of the victims, are substituted and their rights are vested in the Central Government.
This happens by operation of section 3 which is the legislation in question.
Sub section (3) of section 3 makes it clear that the provi sions of sub section (1) of section 3 shall also apply in relation to claims in respect of which suits or other pro ceedings have been instituted in or before any court or other authority (whether within or outside India) before the commencement of this Act, but makes a distinction in the case of any such suit or other proceeding with respect to any claim pending immediately before the commencement of this Act in or before any court or other authority outside India, and provides that the Central Government shall repre sent, and act in place of, or along with, such claimant, if such court or other authority so permits.
Therefore, in cases where such suits or proceedings have been instituted before the commencement of the Act in any court or before any authority outside India, the section by its own force will not come into force in substituting the Central Govern ment in place of the victims or the heirs or their legal representatives, but the Central Government has been given the right to act in place of, or along with, such claimant, provided such court or other authority so permits.
It is to have adherence and conformity with the procedure of the countries or places outside India, where suits or proceed ings are to be instituted or have been instituted.
There fore, the Central Government is authorised to act along with the claimants in respect of proceedings instituted outside India subject to the orders of such courts or the authori ties.
Is such a right valid and proper? 638 35.
There is the concept known both in this country and abroad, called "parens patriae.
Dr. D.K. Mukherjea in his "Hindu Law of Religious and Charitable Trusts", Tagore Law Lectures, Fifth Edition, at page 404, referring to the concept of parens patriae, has noted that in English Law, the Crown as parens patriae is the constitutional protector of all property subject to charitable trusts, such trusts being essentially matters of public concern.
Thus the posi tion is that according to Indian concept parens patriae doctrine recognized King as the protector of all citizens and as parent.
In Budhakaran Chankhani vs Thakur Prasad Shah, AIR 1942 Cal.
311 the position was explained by the Calcutta High Court at page 3 18 of the report.
The same position was reiterated by the said Court in Banku Behary Mondal vs Banku Behary Hazra & Anr., AIR 1943 Cal.
203 at page 205 of the report.
The position was further elaborated and explained by the Madras High Court in Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 at page 567 of the report.
This Court also recog nized the concept of parens patriae relying on the observa tions of Dr. Mukherjea aforesaid in Ram Saroop vs S.P. Sahi, [1959] 2 Supp.
SCR 583, at pages 598 and 599.
In the "Words and Phrases" Permanent edition, Vol.
35 at p. 99, it is stated that parens patriae is the inherent power and author ity of a Legislature to provide protection to the person and property of persons non suijuris, such as minor, insane, and incompetent persons, but the words "parens patriae" meaning thereby 'the father of the country ', were applied originally to the King and are used to designate the State referring to its sovereign power of guardianship over persons under disability, (Emphasis supplied).
Parens patriae jurisdic tion, it has been explained, is the right of the sovereign and imposes a duty on sovereign, in public interest, to protect persons under disability who have no rightful pro tector.
The connotation of the term "parens patriae" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and the privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaran teed by the Constitution and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the rights of the citizens.
The Preamble to the Constitution, read with the Directive Principles, Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protective measure to which the social welfare state is committed.
It is necessary for the State to ensure the funda 639 mental rights in conjunction with the Directive Princi ples of State Policy to effectively discharge its obliga tion and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
Reference may be made to Alfred L. Snapp & Son, Inc. vs Puerto Rico, ; , , 1028.
Ct, 3260 in this connection.
There it was held by the Supreme Court of the United States of America that Commonwealth of Puerto have standing to sue as parens patriae to enjoin apple growers ' discrimination against Puerto Rico migrant farm workers.
This case illustrates in some aspect the scope of 'parens patriae '.
The Commonwealth of Puerto Rico sued in the United States District Court for the Western District of Virginia, as parens patriae for Puerto Rican migrant farm workers, and against Virginia apple growers, to enjoin discrimination against Puerto Ricans in favour of Jamaican workers in violation of the Wagner Peyser Act, and the Immigration and Nationality Act.
The District Court dis missed the action on the ground that the Commonwealth lacked standing to sue, but the Court of Appeal for the Fourth Circuit reversed it.
On certiorari, the United States Supreme Court affirmed.
In the opinion by White, J. joined by Burger, Chief Justice and Brennan, Marshall, Blackman, Rennquist, Stevens, and O 'Connor, JJ., it was held that Puerto Rico had a claim to represent its quasi sovereign interests in federal court at least which was as strong as that of any State, and that it had parens patriae standing to sue to secure its residents from the harmful effects of discrimination and to obtain full and equal participation in the federal employment service scheme established pursu ant to the Wagner Peyser Act and the Immigration and Nation ality Act of 1952.
Justice White referred to the meaning of the expression "parens patriae".
According to Black 's Law Dictionary, 5th Edition 1979, page 1003, it means literally 'parent of the country ' and refers traditionally to the role of the State as a sovereign and guardian of persons under legal disability.
Justice White at page 1003 of the report emphasised that the parens patriae action had its roots in the common law concept of the "royal prerogative".
The royal prerogative included the right or responsibility to take care of persons who were legally unable, on account of mental incapacity, whether it proceeds from nonage, idiocy, or lunacy to take proper care of themselves and their property.
This prerogative of parens patriae is inherent in the supreme power of every state, whether that power is lodged in a royal person or m the legislature and is a most beneficent function.
After discussing several cases Justice White observed at page 1007 of the report that in order to maintain an action, in parens patriae, the state must artic ulate an interest apart from the interests of 640 particular parties, i.e. the State must be more than a nominal party.
The State must express a quasi sovereign interest.
Again an instructive insight can be obtained from the observations of Justice Holmes of the American Supreme Court in the case of Georgia vs Tennessee Copper Co., ; , , , which was a case involving air pollution in Georgia caused by the discharge of noxious gases from the defendant 's plant in Tennessee.
Justice Holmes at page 1044 of the report described the State 's interest as follows: "This is a suit by a State for an injury to it in its capacity of quasi sovereign.
In that capacity the State has an interest independent of and behind the titles of its citizens, in all the earth and air within its domain.
It has the last word as to whether its mountains shall be stripped of their forests and its inhabitants shall breathe pure air.
It might have to pay individuals before it could utter that word, but with it remains the final power . . .
When the States by their union made the forcible abatement of outside nuisances impossible to each, they did not thereby agree to submit to whatever might be done.
They did not renounce the possibility of making reasonable demands on the ground of their still remaining quasi sovereign inter ests" 36.
Therefore, conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Direc tive Principles, it was possible to authorise the Central Government to take over the claims of the victims to tight against the multinational Corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situation fully and properly.
On its plain terms the State has taken over the exclusive right to represent and act in place of every person who has made or is entitled to make a claim for all purposes connected with such claim in the same manner and to the same effect as such person.
Whether such provision is valid or not in the background of the requirement of the Constitution and the Code of Civil Procedure, is another debate.
But there is no prohibition or inhibition, in our opinion, conceptually or jurisprudential ly for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
The actual meaning of what the Act has provided and the validity thereof, however, will have to be examined in the light of the specific submissions advanced in this case.
641 37.
Ms. Indira Jaising as mentioned hereinbefore on behalf of some other victims drew out attention to the background of the passing of the Act in question.
She drew our attention to the fact that the Act was to meet a specif ic situation that had arisen after the tragic disaster and the advent of American lawyers seeking to represent the victims in American courts.
The Government 's view, according to her, as was manifest from the Statement of Objects and Reasons, debates of the Parliament, etc.
was that the inter ests of the victims would be best served if the Central Government was given the right to represent the victims in the courts of United States as they would otherwise be exploited by 'ambulance chasers ' working on contingency fees.
The Government also proceeded initially on the hypoth esis that US was the most convenient forum in which to sue UCC.
The Government however feared that it might not have locus standi to represent the victims in the courts of the United States of America unless a law was passed to enable it to sue on behalf of the victims.
The dominant object of the Act, therefore, according to her, was to give to the Government of India locus Standi to sue on behalf of the victims in foreign jurisdiction, a standing which it other wise would not have had.
According to her, the Act was never intended to give exclusive rights to the Central Government to sue on behalf of the victims in India or abroad.
She drew our attention to the parliamentary debates as mentioned hereinbefore.
She drew our attention to the expression 'parens patriae ' as appearing in the Words and Phrases, Volume 31 p. 99.
She contends that the Act was passed to provide locus standi only to represent in America.
She drew our attention to the "American Constitutional Law by Lau rence B. Trioe, 1978 Edition at paragraph 3.24, where it was stated that in its capacity as proprietor, a state may satisfy the requirement of injury to its own interests by an assertion of harm to the state as such.
It was further stated by the learned author there that the State may sue under the federal anti trust laws to redress wrongs suffered by it as the owner of a railroad and as the owner and opera tor of various public institutions.
It was emphasised that in its quasi sovereign capacity, the state has an interest, independent of and behind the titles of its citizens, in all the earth and air within its domain.
It was sought to be suggested that in the instant Act no such right was either asserted or mentioned.
The State also in its quasi sovereign capacity is entitled to bring suit against a private indi vidual to enjoin a corporation not to discharge noxious gases from its out of state plant into the suing state 's territory.
Finally, it was emphasised that as 'parens patr iae ' on behalf of the citizens, where a state 's capacity as parens patriae is not negated by the federal structure, the protection of the general health, comfort, and welfare of the state 's inhabitants has been held to give the state itself a sufficient 642 interest.
Ms. Jaising sought to contend that to the extent that the Act was not confined to empowering the Government to sue on behalf of those who were not sui generis but extended also to representing those who are, this exercise of the power cannot be referrable to the doctrine of 'parens patriae '.
To the extent, it is not confined in enabling the Government to represent its citizens in foreign jurisdiction but empowered it to sue in local courts to the exclusion of the victims it cannot be said to be in exercise of doctrine of 'parens patriae ', according to her.
We are unable to agree.
As we have indicated before conceptually and juris prudentially there is no warrant in the background of the present Act, in the light of circumstances of the Act in question to confine the concept into such narrow field.
The concept can be varied to enable the Government to represent the victims effectively in domestic forum if.the situation so warrants.
We also do not find any reason to confine the 'parens patriae ' doctrine to only quasisovereign right of the State independent of and behind the title of the citi zens, as we shall indicate later.
It was further contended that deprivation of the rights of the victims and denial of the rights of the vic tims or the fights of the heirs of the victims to access to justice was unwarranted and unconstitutional.
She submitted that it has been asserted by the Government that the Act was passed pursuant to Entry 13 of the List I of the Seventh Schedule to the Constitution.
It was therefore submitted that to the extent it was a law relating to civil procedure, it sets up a different procedure for the Bhopal gas victims and denies to them equality before law, violating Article 14 of the Constitution.
Even assuming that due to the magnitude of the disaster, the number of claimants and their disabili ty they constituted a separate class and that it was permis sible to enact a special legislation setting up a special procedure for them, the reasonableness of the procedure has still to be tested.
Its reasonableness, according to her, will have to be judged on the touchstone of the existing Civil Procedure Code of 1908 and when so tested, it is found wanting in several respects.
It was also contended by the Government that it was a legislation relating to "actionable wrongs" under Entry 8 of the Concurrent List of the Seventh Schedule.
But so read, she said, it could only deal with the procedural aspects and not the substantive aspect of "ac tionable wrongs".
If it does, then the reasonableness of a law must be judged with reference to the existing substan tive law of actionable wrongs and so judged it is in viola tion of many constitutional rights as it takes away from the victims the right to sue for actionable wrongs according to counsel for the victims.
According to her, it fails to take into account the law of strict liability for ultra 643 hazardous activity as clarified by this Court in M.C. Meh ta 's, case (supra).
She further submitted that it is a bad Act as it fails to provide for the right to punitive damages and destruction of environment.
It was contended on behalf of the Central Government that the Act was passed to give effect to the Directive Principle as enshrined under Article 39 A of the Constitu tion of India.
It was, on the other side, submitted that it is not permissible for the State to grant legal aid on pain of destroying rights that inhere in citizens or on pain of demanding that the citizens surrender their rights to the State.
The Act in fact demands a surrender of rights of the citizens to the State.
On the interpretation of the Act, Ms. Indira Jaising submitted that sections 3 and 4 as noted above, give exclusive power to the Government to represent the victims and there is deprivation of the victims ' right to sue for the wrongs done to them which is uncanalised and unguided and the expression "due regard" in section 4 of the Act does not imply consent and as such violative of the rights of the victims.
The right to be associated with the conduct of the suit is hedged in with so many conditions that it is illusory.
According to her, a combined reading of sections 3 and 4 of the act lead to the conclusion that the victims are displaced by the Central Government which has constituted itself as the "surrogate" of the claimants, that they have no control over the proceedings, that they have no right to decide whether or not to compromise and if so on what terms and they have no right to be heard by the court before any such compromise is effected.
Therefore, section 3 read with section 4, according to her, hands over to the Government all effective rights of the victims to sue and is a naked usurption of power.
It was submitted that in any event on a plain reading of the Act, section 3 read with section 4 did not grant the Government immunity from being sued as a joint tort feasor.
It was further urged that section 9 makes the Gov ernment the total arbitor in the matter of the registration, processing and recording of claims.
Reference was made to section 9(2)(a), (b) and (c) and disbursal of claims under sections 9(2)(f) and 10.
It was urged that the Deputy Com missioner and Commissioner appointed under the Act and the Scheme are subordinates and agents of the Central Govern ment.
They replace impartial and independent civil court by officers and subordinates of the Central Government.
Clause 11 of the Scheme makes the Central Government, according to counsel, judge in its own cause inasmuch as the Central Government could be and was in fact a joint tort feasor.
It was submitted that sections 5 to 9 of the Act read with the Scheme do not set up a machinery which is 644 constitutionally valid.
The Act, it was urged, deprives the victims of their rights out of all proportion to the object sought to be achieved, namely, to sue in foreign jurisdic tion or to represent those incapable of representing them selves.
The said object could be achieved, according to counsel, by limiting the right to sue in foreign jurisdic tion alone and in any event representing only those victims incapable of representing themselves.
The victims who wish to sue for and on their own behalf must have power to sue, all proper and necessary parties including Government of India, Government of Madhya Pradesh, UCIL and Shri Arjun Singh to vindicate their right to life and liberty and their rights cannot and should not be curtailed, it was submitted.
Hence, the Act goes well beyond its objects and imposes excessive restriction amounting to destruction of the rights of the victims, according to.
counsel.
In deciding whether any rights are affected, it is not the object of the Act that is relevant but its direct and inevitable effect on the rights of the victims that is material.
Hence no matter how laudable the object of the Act is alleged to be by the Government of India, namely, that it is an Act to give effect to Directive Principles enshrined in Article 39 A of the Constitution, the direct and inevitable effect of sec tion 3 according to counsel for the victims is to deprive the victims of the right to sue for and on their own behalf through counsel of their choice and instead empower the Central Government to sue for them.
The Act is, it was contended, unconstitutional because it deprives the victims of their right to life and personal liberty guaranteed by Article 21.
The right to life and liberty includes the right to sue for violations of the right, it was urged.
The right to life guaranteed by Article 21 must be interpreted to mean all that makes life livable, life in all its fullness.
According to counsel, it includes the right to livelihood.
Reference was made to the decision of Olga Tellis vs B.M.C., [1985] Supp.
2 SCR 51 at p. 78 83.
This right, it was contended, is inseparable from the reme dy.
It was urged that personal liberty includes a wide range of freedoms to decide how to order one 's affairs.
Reference was made to Maneka Gandhi vs Union of India, (supra), The right to life and liberty also includes the right to healthy environment free from hazardous pollutants.
The right to life and liberty, it was submitted, is inseparable from the remedy to judicial vindication of the violation of that right the right of access to justice must be deemed to be part of that right.
Therefore, the importance is given to the right to file a suit for an actionable wrong.
See Ganga Bai vs Vijay Kumar, ; at 886.
According to counsel appearing for the victims, the Act read strictly infringes the right to life and personal liberty because the right to sue by the affected person 645 for damages flowing from infringement of their rights is taken away.
Thus, it was submitted that not just some inci dents of the right to life, but the right itself in all its fullness is taken away.
Such depravation, according to counsel, of the right is not in accordance with procedure established by law inasmuch as the law which takes away the right, i.e., impugned Act is neither substantively nor procedurally just, fair or reasonable.
A law which divests the victims of the right to sue to vindicate for life and personal liberty and vests the said right in the Central Government is not just, fair or reasonable.
The victims are sui generis and able to decide for themselves how to vindi cate their claims in accordance with law.
There is, there fore, no reason shown to exist for divesting them of that right and vesting that on the Central Government.
All the counsel for the victims have emphasised that vesting of the right in Central Government is bad and unrea sonable because there is conflict of interests between the Central Government and the victims.
It was emphasised that the conflict of interest has already prejudiced the victims in the conduct of the case inasmuch as a compromise unac ceptable to the victims has been entered into in accordance with the order of this Court of 14th/15th February, 1989 without heating the victims.
This conflict of interest will continue, it was emphasised, to adversely affect the victims inasmuch as section 9 of the Act read with clauses 5, 10 and 11 of the Scheme empower the Central Government to process claims, determine the category into which these fall, deter mine the basis on which damages will be payable to each category and determine the amount of compensation payable to each claimant.
Learned counsel urged that the right to a just, fair and reasonable procedure was itself a guaranteed fundamental right under Article 14 of the Constitution.
This included right to natural justice.
Reference was made to Olga Tellis 'section case (supra) and S.L. Kapoor vs Jagmohan, ; at 753, 766.
The right to natural justice is included in Article 14 Tulsi Ram vs Union of India, [1985] Supp.
2 SCR 131.
Reference was also made to Maneka Gandhi 's, case (supra).
It was contended by counsel that the right to natural justice is the right to be heard by Court at the pre decisional stage, i.e., before any compromise is effected and accepted.
Reference was made to the decision of this Court in Swadeshi Cotton vs Union of India, ; It was submitted that natural justice is a highly effective tool devised by the Courts to ensure that a statu tory authority arrives at a just decision.
It is calculated to act as a healthy check on the abuse of power.
Natural justice is not dispensable nor is it an empty formality.
Denial of that right can and has led to the miscar 646 riage of justice in this case.
According to counsel, if the victims had been given an opportunity to be heard, they would, inter alia, have pointed out that the amount agreed to be paid by UCC was hopelessly inadequate and that UCC, its officer and agents ought not to be absolved of criminal liability, that the Central Government itself was liable to have been sued as a joint tort feasor and, according to counsel, had agreed to submit to a decree if found liable under the order dated 31st December, 1985, that suits had been filed against the State of Madhya Pradesh, Shri Arjun Singh and UCIL which said suits cannot be deemed to have been settled by the compromise/order of 14th/15th February, 1989.
It was also pointed out that Union of India was under a duty to sue UCIL, which it had failed and neglected to do.
It was submitted that to the extent that the statute does not provide for a pre decisional hearing on the fairness of the proposed settlement or compromise by Court, it is void as offending natural justice hence violative of Articles 14 and 21 of the Constitution.
Alternatively, it was contended by the counsel that since the statute neither expressly nor by necessary implication bars the right to be heard by Court before any compromise is effected such a right to a pre decisional hearing by Court must be read into section 3(2)(b) of the Act.
Admittedly, it does not expressly ex clude the right to a hearing by Court prior to any settle ment being entered into.
Far from excluding such a right by necessary implication, having regard to the nature of the rights affected, i.e., the right to life and personal liber ty, such a right to hearing must be read into the Act in order to ensure that justice is done to the victims, accord ing to all the counsel.
The Act sets up a procedure differ ent from the ordinary procedure established by law, namely, Civil Procedure Code.
But it was submitted that the Act should be harmoniously read with the provisions of Civil Procedure Code and if it is not so read, then the Act in question would be unreasonable and unfair.
In this connec tion, reliance was placed on the provisions of Order I, Rule 4, Order 23, Rule 1 proviso, Order 23, Rule 3 9 and Order 32, Rule 7 of CPC and it was submitted that these are not inconsistent with the Act.
On the contrary these are neces sary and complementary, intended to ensure that there is no miscarriage of justice.
Hence these must be held to apply to the facts and circumstances of the case and the impugned Act must be read along with these provisions.
Assuming that the said provisions do not directly apply then, provisions analogous to the said provisions must be read with section 3(2)(b) to make the Act reasonable, it was submitted.
It was urged that if these are not so read then the absence of such provisions would vest arbitrary and unguided powers in the Central Government making section 3(2)(b) unconstitutional.
The said provisions are intended to ensure the machinery of 647 accountability to the victims and to provide to them, an opportunity to be heard by court before any compromise is arrived at.
In this connection, reference was made to Rule 23(3) of the Federal Rules of Civil Procedure in America which provides for a hearing to the victims before a compro mise is effected.
The victims as plaintiffs in an Indian court cannot be subjected to a procedure which is less fair than that provided by a US forum initially chosen by the Government of India, it was urged.
Counsel submitted that Section 6 of the Act is unreasonable because it replaces an independent and impar tial Civil Court of competent jurisdiction by an Officer known as the Commissioner to be appointed by the Central Government.
No qualification, according to counsel, had been prescribed for the appointment of a Commissioner and clause 5 of the Scheme framed under the Act vests in the Commis sioner the judicial function of deciding appeals against the order of the Deputy Commissioner registering or refusing to register a claim.
It was further submitted that clause 11(2) of the Scheme is unreasonable because it replaces an inde pendent and impartial civil court of competent jurisdiction with the Central Government, which is a joint tort feasor for the purpose of determining the total amount of compensa tion to be apportioned for each category of claims and the quantum of compensation payable for each type of injury or loss.
It was submitted that the said function is a judicial function and if there is any conflict of interest between the victims and Central Government, vesting such a power in the Central Government amounts to making it a judge in its own cause.
It was urged that having regard to the fact that amount received in satisfaction of the claims is ostensibly pre determined, namely, 470 million dollars unless the order of 14th/15th February is set aside which ought to be done, according to counsel, the Central Government would have a vested interest in ensuring that the amount of damages to be disbursed does not exceed the said amount.
Even otherwise, according to counsel, the Government of India has been sued as a joint tort feasor, and as they would have a vested interest in depressing the quantum of damages, payable to the victims.
This would, according to counsel, result in a deliberate under estimation of the extent of injuries and compensation payable.
Clause 11(4) of the Scheme, according to counsel, is unreasonable inasmuch as it does not take into account the claims of the victims to punitive and exemplary damages and damages for loss and destruction of environment.
Counsel submitted that in any event the expression "claims" in section 2(b) cannot be interpreted to mean 648 claims against the Central Government, the State of Madhya Pradesh, UCIL, which was not sued in suit No. 1113/86 and Shri Arjun Singh, all of whom have been sued as joint tort feasors in relation to the liability arising out of the disaster.
Counsel submitted that if section 3 is to be held to be intra vires, the word "exclusive" should be severed from section 3 and on the other hand, if section 3 is held ultra vires, then victims who have already filed suits or those who had lodged claims should be entitled to continue their own suits as well as Suit No. 1113/86 as plaintiffs with leave under Order 1 Rule 8.
Counsel submitted that interim relief as decided by this Court can be paid to the victims even otherwise also, according to counsel, under clause 10(2)(b) of the Scheme.
Counsel submitted that the balance of $ 470 million after deducting interim relief as determined by this Court should be attached.
In any event, it was submitted that, it be declared that the word "claim" in section 2 does not include claims against Central Govt.
or State of Madhya Pradesh or UCIL.
Hence, it was urged that the rights of the victims to sue the Government of India, the State of Madhya Pradesh or UCIL would remain unaffected by the Act or by the compromise effected under the Act.
Machinery to decide suit expeditiously has to be devised, it was submitted.
Other suits filed against UCC, UCIL, State of Madhya Pradesh and Arjun Singh should to be transferred to the Supreme Court for trial and disposal, according to counsel.
It was submit ted that the Court should fix the basis of damages payable to different categories, namely, death and disablement mentioned under clause 5(2) of the scheme.
Counsel submitted that this Court should set up a procedure which would ensure that an impartial judge assisted by medical experts and assessors would adjudicate the basis on which an individual claimant would fall into a particular category.
It was also urged that this Court should quantify the amount of compen sation payable to each category of claimant in clause 5(2) of the Scheme.
This decision cannot, it was submitted, be left to the Central Government as is purported to be done by clause 11(2) of the Scheme.
This Court must set up, it was urged, a trust with independent trustees to administer the trust and trustees to be accountable to this Court.
An independent census should be carried out of number of claimants, nature and extent of injury caused to them, the category into which they fall.
Apportionment of amounts should be set aside or invested for future claimants, that is the category in clause 5(2)(a) of the Scheme, which is, according to counsel, of utmost impor tance 649 since the injuries are said to be.
carcinogenic and ontogen ic and wide affecting persons yet unborn.
Shri Garg, further and on behalf of some of the victims counsel, urged before us that deprivation of the rights of the victims and vesting of those fights in the State is violative of the rights of the victims and cannot.
be justified or warranted by the Constitution.
Neither section 3 nor section 4 of the Act gives any right to the victims; on the other hand, it is a complete denial of access to justice for the victims, according to him.
This, according to counsel, is arbitrary.
He also submitted that section 4 of the Act, as it stands, gives no right to the victims and as such even assuming that in order to fight for the rights of the victims, it was necessary to substitute the victims even then in so far as the victims have been denied the right of say, in the conduct of the proceedings, this is disproportionate to the benefit conferred upon the victims.
Denial of rights to the victims is so great and deprivation of the right to natural justice and access to justice is so tremendous that judged by the well settled principles by which yardsticks provisions like these should be judged in the constitutional framework of this country, the Act is violative of the fundamental rights of the vic tims.
It was further submitted by him that all the rights of the victims by the process of this Act, the right of the victims to enforce full liability against the multinationals as well as against the Indian Companies, absolute liability and criminal liability have all been curtailed.
All the counsel submitted that in any event, the criminal liability cannot be subject matter of this Act.
Therefore, the Government was not entitled to agree to any settlement on the ground that criminal prosecution would be withdrawn and this being a part of the consideration or inducement for settling the civil liability, he submitted that the settlement arrived at on the 14th/l5th February, 1989 as recorded in the order of this Court is wholly unwar ranted, unconstitutional and illegal.
Mr. Garg additionally further urged that by the procedure of the Act, each individual claim had to be first determined and the Government could only take over the aggregate of all individual claims and that could only be done by aggregating the individual claims of the victims.
That was not done, according to him.
Read in that fashion, according to Shri Garg, the conduct of the Government in implementing the Act is wholly improper and unwarranted.
It was submitted by him that the enforcement of the fight of the victims 650 without a just, fair and reasonable procedure which is vitally necessary for representing the citizens or victims was bad.
It was further urged by him that the Bhopal gas victims have been singled out for hostile discrimination resulting in total denial of all procedures of approach to competent courts and tribunals.
It was submitted that the Central Government was incompetent to represent the victims in the litigations or for enforcement of the claims.
It was then submitted by him that the claims of the victims must be enforced fully against the Union Carbide Corporation carry ing on commercial activities for profit resulting in unprec edented gas leak disaster responsible for a large number of deaths and severe injuries to others.
It was submitted that the liability of each party responsible, including the Government of India, which is a joint tort feasor along with the Union Carbide, has to be ascertained in appropriate proceedings.
It was submitted on behalf of the victims that Union of India owned 22% of the shares in Union Carbide and therefore, it was incompetent to represent the victims.
There was conflict of interest between the Union of India and the Union Carbide and so Central Government was incompe tent.
It is submitted that pecuniary interest howsoever small disqualifies a person to be a judge in his own cause.
The settlement accepted by the Union of India, according to various counsel is vitiated by the pecuniary bias as holders of its shares to the extent of 22%.
It was submitted that the pleadings in the court of the United States and in the Bhopal court considered in the context of the settlement order of this Court accepted by the Union of India establish that the victims ' individuality were sacrificed wontedly and callously and, therefore, there was violation, according to some of the victims, both in the Act and in its implementation of Articles 14, 19(l)(g) and 21 of the Constitution.
The principles of the decision of this Court in M.C. Mehta & Anr.
vs Union of India, ; must be so interpreted that complete justice is done and it in no way excludes the grant of punitive damages for wrongs justifying deterrents to ensure the safety of citizens in free India.
No multinational corporation, according to Shri Garg, can claim the privilege of the protection of Indian law to earn profits without meeting fully the demands of civil and criminal justice administered in India with this Court functioning as the custodian.
Shri Garg urged that the liability for damages, in India and the Third World Coun tries, of the multinational companies cannot be less but must be more because the persons affected are often without remedy for 651 reasons of inadequate facilities for protection of health or property.
Therefore, the damages sustainable by Indian victims against the multinationals dealing with dangerous gases without proper security and other measures are far greater than damages suffered by the citizens of other advanced and developed countries.
It is, therefore, neces sary to ensure by damages and deterrent remedies that these multinationals are not tempted to shift dangerous manufac turing operations intended to advance their strategic objec tives of profit and war to the Third World Countries with little respect for the right to life and dignity of the people of sovereign third world countries.
The strictest enforcement of punitive liability also serves the interest of the American people.
The Act, therefore, according to Shri Garg is clearly unconstitutional and therefore, void.
It was urged that the settlement is without juris diction.
This Court was incompetent to grant immunity against criminal liabilities in the manner it has purported to do by its order dated 14th/l5th February, 1989, it was strenuously suggested by counsel.
It was further submitted that to hold the Act to be valid, the victims must be heard before the settlement and the Act can only be valid if it is so interpreted.
This is necessary further, according to Shri Garg, to lay down the scope of heating.
Shri Garg also drew our attention to the scheme of disbursement of relief to the victims.
He submitted that the scheme of disbursement is unreasonable and discriminatory because there is no proce dure which is just, fair and reasonable in accordance with the provisions of Civil Procedure Code.
He further submitted that the Act does not lay down any guidelines for the con duct of the Union of India in advancing the claims of the victims.
There were no essential legislative guidelines for determining the rights of the victims, the conduct of the proceedings on behalf of the victims and for the relief claimed.
Denial of access to justice to the victims through an impartial judiciary is so great a denial that it can only be consistent with the situation which calls for such a drastic provision.
The present circumstances were not such.
He drew our attention to the decision of this Court in Basheshar vs Income Tax Commissioner, ; ; in Re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra etc.
vs State of U.P. & Ors. etc., and Bodhan Chowdhary vs State of Bihar, ; Shri Garg further submitted that Article 21 must be read with Article 51 of the Constitution and other directive principles.
He drew our attention to Lakshmi Kant Pandey vs Union of India, ; ; M/s Mackinnon Machkenzie & Co. Ltd. vs Audrey D 'Costa 652 and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; Shri Garg submitted that in india, the national dimensions of human rights and the international dimensions are both congruent and their enforcement is guaranteed under Articles 32 and 226 to the extent these are enforceable against the State, these are also enforceable against transnational corpora tions inducted by the State on conditions of due observance of the Constitution and all laws of the land.
Shri Garg submitted that in the background of an unprecedented disas ter resulting in extensive damage to life and property and the destruction of the environment affecting large number of people and for the full protection of the interest of the victims and for complete satisfaction of all claims for compensation, the Act was passed empowering the Government of India to take necessary steps for processing of the claims and for utilisation of disbursal of the amount re ceived in satisfaction of the claims.
The Central Government was given the exclusive right to represent the victims and to act in place of, in United States or in india, every citizen entitled to make a claim.
Shri Garg urged that on a proper reading of section 3(1) of the Act read with section 4 exclusion of all victims for all purpose is incomplete and the Act is bad.
He submitted that the decree for adjudica tion of the Court must ascertain the magnitude of the dam ages and should be able to grant reliefs required by law under heads of strict liability, absolute liability and punitive liability.
Shri Garg submitted that it is necessary to consider that the Union of India is liable for the torts.
In several decisions to which Shri Garg grew our attention, it has been clarified that Government is not liable only if the tortious act complained has been committed by its servants in exer cise of its sovereign powers bY which it is meant powers that can be lawfully exercised under sovereign rights only vide Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209 at p. 212.
There is a real and marked distinction between the sovereign functions of the government and those which are non sovereign and some of the functions that fall in the latter category are those connected with trade, commerce, business and industrial undertakings.
Sovereign functions are such acts which are of such a nature as cannot be performed by a private individual or association unless powers are delegated by sovereign authority of state.
According to Shri Garg, the Union and the State Governments under the Constitution and as per laws of the Factories, Environment Control, etc. are bound to exercise control on the factories in public interest and public purpose.
These functions are not sovereign func 653 tions, according to Shri Garg, and the Government in this case was guilty of negligence.
In support of this, Shri Garg submitted that the offence of negligence on the part of the Govt.
would be evident from the fact that (a) the Government allowed the Union Carbide factory to be installed in the heart of the city; (b) the Government allowed habitation in the front of the factory knowing that the most dangerous and lethal gases were being used in the manufacturing processes; (c) the gas leakage from this factory was a common affair and it was agitated continuously by the people journalists and it was agitated in the Vidhan Sabha right from 1980 to 1984.
These features firmly proved, according to Shri Garg, the grossest negligence of the governments.
Shri Garg submitted that the gas victims had legal and moral right to sue the governments and so it had full right to im plead all the necessary and proper parties like Union Carbide, UCIL, and also the then Chief Minister Shri Arjun Singh of the State.
He drew our attention to Order 2, rule 3, of the Civil Procedure Code.
In suits on joint torts, according to Shri Garg, each of the joint tort feasors is responsible for the injury sustained for the common acts and they can all be sued together.
Shri Garg 's main criticism has been that the most crucial question of corporate responsibility of the people 's right to life and their right to guard it as enshrined in Article 21 of the Constitution were sought to be gagged by the Act.
Shri Garg tried to submit that this was an enabling Act only but not an Act which deprived the victims of their right to sue.
He submitted that in this Act, there is denial of natural justice both in the institution under section 3 and in the conduct of the suit under section 4.
It must be seen that justice is done to all (R. Viswanathan vs Rukh ul Mulk Syed Abdul Wajid, ; It was urged that it was necessary to give a reasona ble notice to the parties.
He referred to M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
2 SCR 724.
Shri Shanti Bhushan appearing for Bhopal Gas Peedit Mahila Udyog Sangathan submitted that if the Act is to be upheld, it has to be read down and construed in the manner urged by him.
It was submitted that when the Bhopal Gas disaster took place, which was the worst industrial disaster in the world which resulted in the deaths 654 of several thousands of people and caused serious injuries to lakhs others, there arose a right to the victims to get not merely damages under the law of the torts but also arose clearly, by virtue of right to life guaranteed as fundamen tal right by Article 21 of the Constitution a right to get full protection of life and limb.
This fundamental right also, according to Shri Shanti Bhushan, embodied within itself a right to have the claim adjudicated by the estab lished courts of law.
It is well settled that right of access to courts in respect of violation of their fundamen tal rights itself is a fundamental right which cannot be denied to the people.
Shri Shanti Bhushan submitted that there may be some justification for the Act being passed.
He said that the claim against the Union Carbide are covered by the Act.
The claims of the victims against the Central Government or any other party who is also liable under tort to the victims is not covered by the Act.
The second point that Shri Shanti Bhushan made was that the Act so far as it empowered the Central Government to represent and act in place of the victims is in respect of the civil liability arising out of disaster and not in respect of any right in respect of criminal liability.
The Central Govt., according to Shri Shanti Bhushan, cannot have any right or authority in relation to any offences which arose out of the disaster and which resulted in criminal liability.
It was submitted that there cannot be any settlement or compromise in rela tion to non compoundable criminal cases and in respect of compoundable criminal cases the legal right to compound these could only be possessed by the victims alone and the Central Government could not compound those offences on their behalf.
It was submitted by Shri Shanti Bhushan that even this Court has no jurisdiction whatsoever to transfer any criminal proceedings to itself either under any provi sion of the Constitution or under any provision of the Criminal Procedure Code or under any other provision of law and, therefore, if the settlement in question was to be treated not as a compromise but as an order of the Court, it would be without jurisdiction and liable to be declared so on the principles laid down, according to Shri Bhushan, by this Court in Antulay 's case (supra).
Shri Shanti Bhushan submitted that even if under the Act, the Central Government is considered to be able to represent the victims and to pursue the litigation on their behalf and even to enter into compromise on their behalf, it would be a gross violation of the constitutional rights of the victims to enter into a settlement with the Union Carbide without giving the victims opportunities to express their views about the fairness or adequacy of the settlement before any court could permit such a settlement to be made.
Mr. Shanti Bhushan submitted that the suit which may be 655 brought by the Central Government against Union Carbide under section 3 of the Act would be a suit of the kind contemplated by the Explanation to Order 23, rule 3 of the Code of Civil Procedure since the victims are not parties and yet the decree obtained in the suit would bind them.
It was, therefore, urged by Shri Shanti Bhushan that the provi sions of Section 3(1) of the Act merely empowers the Central Government to enter into a compromise but did not lay down the procedure which was to be followed for entering into any compromise.
Therefore, there is nothing which is inconsist ent with the provisions of Order 23 Rule 3 B of the CPC to which the provisions Section 11 of the Act be applied.
If, however, by any stretch of argument the provisions of the Act could be construed so as to override the provisions of Order 23 Rule 3 B CPC, it was urged, the same would render the provisions of the Act violative of the victims ' funda mental rights and the actions would be rendered unconstitu tional.
If it empowered the Central Government to compromise the victims ' rights, without even having to apply the prin ciples of natural justice, then it would be unconstitutional and as such bad.
Mr. Shanti Bhushan, Ms. Jaising and Mr. Garg submitted that these procedures must be construed in accordance with the provisions contained in Order 23 Rule 3 B CPC and an opportunity must be given to those whose claims are being compromised to show to the court that the compromise is not fair and should not accordingly be permit ted by the court.
Such a hearing in terms, according to counsel, of Order 23 Rule 3 B CPC has to be before the compromise is entered into.
It was then submitted that section 3 of the Act only empowers the Central Government to represent and act in place of the victims and to institute suits on behalf of the victims or even to enter into compro mise on behalf of the victims.
The Act does not create new causes of action create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain unchanged.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
Shri Shanti Bhushan then argued that the cause of action of each victim is separate and entitled him to bring a suit for separate amount according to the damages suffered by him.
He submitted that even where the Central Government was empowered to file suits on behalf of all the victims it could only ask for a decree of the same kind as could have been asked for by the victims themselves, namely, a 656 decree awarding various specified amounts to different victims whose names had to be disclosed.
According to Shri Shanti Bhushan, even if all the details were not available at the time when the suit was filed, the details of the victims ' damages had to be procured and specified in the plaint before a proper decree could be passed in the suit.
even if the subject matter of the suit had to be compromised between the Central Government and the Union Carbide the compromise had to indicate as to what amount would be pay able to each victim, in addition to the total amount which was payable by Union Carbide, submitted Shri Shanti Bhushan.
It was submitted that there was nothing in the Act which permitted the Central Government to enter into any general compromise with Union Carbide providing for the lumpsum amount without disclosure as to how much amount is payable to each victim.
If the Act in question had not been enacted, the victims would have been entitled to not only sue Union Carbide themselves but also to enter into any compromise or settlement of their claims with the Union Carbide immediate ly.
The provisions of the Act, according to Mr. Shanti Bhushan, deprive the victims of their legal right and such deprivation of their rights and creation of a corresponding right in the Central Government can be treated as reasonable only if the deprivation of their rights imposed a corre sponding liability on the Central Government to continue to pay such interim relief to the victims as they might be entitled to till the time that the Central Government is able to obtain the whole amount of compensation from the Union Carbide.
He submitted that the deprivation of the right of the victims to sue for their claims and denial of access to justice and to assert their claims and the substi tution of the Central Government to carry on the litigation for or on their behalf can only be justified, if and only if the Central Government is enjoined to provide for such interim relief or continue to provide in the words of Judge Keenan, as a matter of fundamental human decency, such interim relief, necessary to enable the victims to fight the battle.
Counsel submitted that the Act must be so read.
Shri Shanti Bhushan urged that if the Act is construed in such a manner that it did not create such an obligation on the Central Government, the Act cannot be upheld as a reasonable provision when it deprived the victims of their normal legal rights of immediately obtaining compensation from Union Carbide.
He referred to section 10(b) of the Act and clause 10 and 11(1) of the Scheme to show that the legislative policy underlying the Bhopal Act clearly contemplated pay ment of interim relief to the victims from time to time till such time as the Central Government was able to recover from Union Carbide 657 full amount of compensation from which the interim reliefs paid by the Central Government were to be deducted from the amount payable to them by way of final disbursal of the amounts recovered.
The settlement is bad, according to Shri Shanti Bhushan if part of the bargain was giving up of the criminal liability against UCIL and UCC.
Shri Shanti Bhushan submit ted that this Court should not hesitate to declare that the settlement is bad because the fight will go on and the victims should be provided reliefs and interim compensation by the Central Government to be reimbursed ultimately from the amount to be realised by the Central Government.
This obligation was over and above the liability of the Central Government as a joint tort feasor, according to Shri Shanti Bhushan.
Shri Kailash Vasdev, appearing for the petitioners in Writ Petition No. 155 1/86 submitted that the Act dis placed the claimants in the matter of their right to seek redressal and remedies of the actual injury and harm caused individually to the claimants.
The Act in question by re placing the Central Government in place of the victims.
by conferment of exclusive right to sue in place of victims, according to him, contravened the procedure established by law.
The right to sue for the wrong done to an individual was exclusive to the individual.
It was submitted that under the civil law of the country, individuals have rights to enforce their claims and any deprivation would place them into a different category from the other litigants.
The right to enter into compromise, it was further submitted, without consultation of the victims, if that is the con struction of section 3 read with section 4 of the Act, then it is violative of procedure established by law.
The proce dure substituted, if that be the construction of the Act, would be in violation of the principles of natural justice and as such bad.
It was submitted that the concept of 'parens patriae ' would not be applicable in these cases.
It was submitted that traditionally, sovereigns can sue under the doctrine of 'parens patriae ' only for violations of their "quasi sovereign" interests.
Such interests do not include the claims of individual citizens.
It was submitted that the Act in question is different from the concept of parens patriae because there was no special need to be satisfied and a class action, according to Shri Vasdev, would have served the same purpose as a suit brought under the statute and ought to have been preferred because it safeguarded claimants ' right to procedural due process.
In addition, a suit brought under the statute would threaten the victims ' substantive due process rights.
It was further submitted that in order to sustain an action, it was neces sary for the Government of India to have standing 658 62.
Counsel submitted that 'parens patriae ' has received no judicial recognition in this country as a basis for recovery of money damages for injuries suffered by individu als.
He may be right to that extent but the doctrine of parens patriae has been used in India in varying contexts and contingencies.
We are of the opinion that the Act in question was passed in recognition of the right of the sovereign to act as parens patriae as contended by the learned Attorney General.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely, the Act.
We have noted the several decisions re ferred to hereinbefore, namely, Bhudhkaran Chankhani vs Thakur Prasad Shad, (supra); Banku Behary Mondal vs Banku Behari Hazra, (supra); Medai Dalavoi T. Kumaraswami Mudaliar vs Medai Dalavai Rajammal, (supra) and to the decision of this Court in Mahant Ram Saroop Dasji vs S.P. Sahi, (supra) and the decision of the American Supreme Court in Alfred Schnapp vs Puerto Rico, (supra).
It has to be borne in mind that conceptually and jurisprudentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territories of the country.
It is true that the doctrine has been so utilised in America so far.
In our opinion, learned Attorney General was right in contending that where citizens of a country are victims of a tragedy because of the negligence of any multinational, a peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievances and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian state because of its constitutional commitment is obliged to take upon itself the claims of the victims and to protect them in their hour of need.
Learned Attorney General was also right in submitting that the decisions of the Calcutta, Madras and U.S. Supreme Court clearly indicate that parens patriae doctrine can be invoked by sovereign state within India, even if it be contended that it has not so far been invoked inside India in respect of claims for damages of victims suffered at the hands of the multinational.
In our opinion, conceptually and jurisprudentially, there is no bar on the State to assume responsibilities analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Government has done in the instant case seems to us to be an expression of its sover eign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, 659 morals, education and good order of the people and tend to increase the wealth and prosperity of the state.
Sovereignty is difficult to define.
See in this connection, Weaver on Constitional Law, p. 490.
By the nature of things, the state sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the individual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitutional limita tions.
This is an emanation of sovereignty subject to as aforesaid.
Indeed, it is the obligation of the State to assume such responsibility and protect its citizens.
It has to be borne in mind, as was stressed by the learned Attorney General, that conferment of power and the manner of its exercise are two different matters.
It was submitted that the power to conduct the suit and to compromise, if neces sary, was vested in the Central Government for the purpose of the Act.
The power to compromise and to conduct the proceedings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
In this connection, the observations of Viscount Simonds in Belfast Corporation vs O.D. Commission, at 520 21 are relevant where it was emphasised that validity of a measure is not be determined by its application to particular cases.
This Court in Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825 emphasised that the consti tutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if upon so judged it passes the test of reasona bleness, then the possibility of the powers conferred being improperly used is no ground for pronouncing the law itself invalid.
See in this connection also the observations in P.J. Irani vs State of Madras, ; at 178 to 181 and D.K. Trivedi vs State of Gujarat, [1986] Supp.
SCC 20 at 60 61 64.
Sections 3 and 4 of the Act should be read together as contended by the learned Attorney General, along with other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of Objects and Reasons and the Preamble to the Act.
The Act was so designed that the victims of the 660 disaster are fully protected and the claims of compensation or damages for loss of life or personal injuries or in ' respect of other matters arising out of or connected with the disaster are processed speedily, effectively, equitably and to the best advantage of the claimants.
Section 3 of the Act is subject to other provisions of the Act which includes sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and therefore, over rides section 3.
Learned Attorney General submitted that the right of the Central Government under section 3 of the Act was to represent the victims exclusively and act in the place of the victims.
The Central Government, it was urged, in other words, is substituted in the place of 'the victims and is the dominus litis.
Learned Attorney General submitted that the dominus litis carries with it the right to conduct the suit in the best manner as it deems fit, including, the right to withdraw and right to enter into compromise.
The right to withdraw and the right to compromise conferred by section 3(2) of the Act cannot be exercised to defeat the rights of the victims.
As to how the rights should be exer cised is guided by the objects and the reasons contained in the Preamble, namely, to speedily and effectively process the claims of the victims and to protect their claims.
The Act was passed replacing the Ordinance at a time when many private plaintiffs had instituted complaints/suits in the American Courts.
In such a situation, the Government of India acting in place of the victims necessarily should have right under the statute to act in all situations including the position of withdrawing the suit or to enter into com promise.
Learned Attorney General submitted that if the UCC were to agree to pay a lump sum amount which would be just, fair and equitable, but insists on a condition that the proceedings should be completely withdrawn, then necessarily there should be power under the Act to so withdraw.
Accord ing to him, therefore, the Act engrafted a provision empow ring the Government to compromise.
The provisions under section 3(2)(b) of the Act to enter into compromise was consistent with the powers of dominus litis.
In this connec tion, our attention was drawn to the definition of 'Dominus Litis ' in Black 's Law Dictionary, Fifth Edition, P. 437, which states as follows: " 'Dominus litis '.
The master of the suit; i.e. the person who was really and directly inter ested in the suit as a party, as distinguished from his attorney or advocate.
But the term is also applied to one who, though not originally a party, has made himself such, by interven tion or otherwise, and has assumed entire control and responsibility for one side and is treated by the Court as liable for costs.
Vir ginia Electric & Power Co, vs Bowers, ISI Va., 542, ,263".
661 65.
Learned Attorney General sought to contend that the victims had not been excluded entirely either in the conduct of proceedings or in entering into compromise, and he re ferred to the proceedings in detail emphasising the partici pation of some of the victims at some stage.
He drew our attention to the fact that the victims had filed separate consolidated complaints in addition to the complaint filed by the Government of India.
Judge Keenan of the Distt.
Court of America had passed orders permitting the victims to be represented not only 'by the private Attorneys but also by the Govt.
of India.
Hence, it was submitted that it could not be contended that the victims had been excluded.
Learned Attorney General further contended that pursuant to the orders passed by Judge Keenan imposing certain conditions against the Union Carbide and allowing the motion for forum non convenience of the UCC that the suit came back to India and was instituted before the Distt.
Court of Bhopal.
In those circumstances, it was urged by the learned Attorney General that the private plaintiffs who went to America and who were represented by the contingency lawyers fully knew that they could also have joined in the said suit as they were before the American Court along with the Govt.
of India.
It was contended that in the proceedings at any point of time or stage including when the compromise was entered into, these private plaintiffs could have participated in the court proceedings and could have made their representa tion, if they so desired.
Even in the Indian suits, these private parties have been permitted to continue as parties represented by separate counsel even though the Act empowers the Union to be the sole plaintiff.
Learned Attorney General submitted that Section 4 of the Act clearly enabled the victims to exercise their right of participation in the proceedings.
The Central Govt. was enjoined to have due regard to any matter which such person might require to be urged.
Indeed, the learned Attorney General urged very strenuously that in the instant case, Zehreeli Gas Kand Sangharsh Morcha and Jana Swasthya Kendra (Bhopal) had filed before the Distt.
Judge, Bhopal, an application under Order I Rule 8 read with Order I Rule 10 and Section 15 1 of the CPC for their intervention on behalf of the victims.
They had participated in the hearing before the learned Distt.
Judge, who referred to their intervention in the order.
It was further emphasised that when the UCC went up in revision to the High Court of Madhya Pradesh at Jabalpur against the interim compensation ordered to be paid by the Distt.
Court, the intervener through its Advocate, Mr. Vibhuti Jha had participated in the proceedings.
The aforesaid Association had also intervened in the civil appeals preferred pursuant to the special leave granted by this Court to the Union of India and Union Carbide against the judgment of the 662 High Court for interim compensation.
In those circumstances, it was submitted that there did not exist any other gas victim intervening in the proceedings, claiming participa tion under Section 4.
Hence, the right to compromise provid ed for by the Act, could not be held to be violative of the principles of natural justice.
According to the learned Attorney General, this Court first proposed the order to counsel in court and after they agreed thereto, dictated the order on 14th February, 1989.
On 15th February, 1989 after the Memorandum of Settlement was filed pursuant to the orders of the court, further orders were passed.
The said Association, namely, Zehreeli Gas Kand Sangharsh Morcha was present, according to the records, in the Court on both the dates and did not apparently object to the compromise.
Mr. Charanlal Sahu, one of the petitioners in the writ petition, had watched the proceedings and after the Court had passed the order on 15th February, 1989 mentioned that he had filed a suit for Rs. 100 crores.
Learned Attorney General submit ted that Mr. Sahu neither protested against the settlement nor did he make any prayer to be heard.
Shri Charan Lal Sahu, in the petition of opposition in one of these matters have prayed that a sum of Rs. 100 million should be paid over to him for himself as well as on behalf of those vic tims whom he claimed to represent.
In the aforesaid back ground on the construction of the Section, it was urged by the learned Attorney General that Section 3 of the Act cannot be held to be unconstitutional.
The same provided a just, fair and reasonable procedure and enabled the victims to participate in the proceedings at all stages those who were capable and willing to do so.
Our attention was drawn to the fact that Section 11 of the Act provides that the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other enactment other than the Act.
It was, therefore, urged that the provisions of the Civil Procedure Code stood overridden in respect of the areas covered by the Act, namely, (a) representation, (b) powers of representation; and (c) com promise.
According to the learned Attorney General, the Act did not violate the principles of natural justice.
The provisions of the CPC could not be read into the Act for Section 11 of the Act provides that the application of the provision of the Civil Procedure Code in so far as those were inconsistent with the Act should be construed as over ridden in respect of areas covered by it.
Furthermore, inasmuch as Section 4 had given a qualified right of partic ipation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the principles of natural justice cannot be judged by any strait jacket formula.
According to him, the 663 extension of the principles of natural justice beyond what is provided by the Act in Sections 3 & 4, was unwarranted and would deprive the provisions of the Statute of their efficacy in relation to the achievement of 'speedy relief ', which is the object intended to be achieved.
He emphasised that the process of notice, consultation and exchange of information, informed decision making process, the modali ties of assessing a consensus of opinion would involve such time that the Govt. would be totally unable to act in the matter efficiently, effectively and purposefully on behalf of the victims for realisation of the just dues of the victims.
He further urged that the Civil Procedure Code before its amendment in 1976 did not have the provisions of Order l Rules 8(4), (5) & (6) and Explanations etc.
nor Order XXIII Rules 3A and 3B.
Before the amendment the High Court had taken a view against the requirement of hearing the parties represented in the suit under Order 1, Rule 8 before it before settling or disposing of the suit.
Our attention was drawn to the decision of the Calcutta High Court in Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal.
456 at 457 459, wherein it was held by the learned Single Judge that the plaintiff in a representative suit had right to compromise subject to the conditions that the suit was properly filed in terms of the provisions of that Rule and the settlement was agreed bona fide.
Learned Attorney General in that context contended that when the suit was validly instituted, the plaintiff had a right to compromise the suit and there need not be any provision for notice to the parties represented before entering into any compromise.
Reliance was placed on the decision of the Allahabad High Court in Ram Sarup vs Nanak Ram, AIR 1952 Allahabad 275, where it was held that a compromise entered into in a suit filed under Order 1 Rule 8 of the CPC was binding on all persons as the plaintiffs who had instituted the suit in representative capacity had the authority to compromise.
He further submitted that most, if not all, of the victims had given their powers of attorney which were duly filed in favour of the Union of India.
These powers or attorney have neither been impeached nor revoked or with drawn.
By virtue of the powers of attorney the Union of India, it was stated, had the authority to file the suits and to compromise the interests of the victims if so re quired.
The Act in question itself contemplates settlement as we have noted, and a settlement would need a common spokesman.
It was submitted that the Govt.
of India as the statutory representative discharged its duty and is in a centralised position of assessing the merits and demerits of any proposed course of action.
So far as the act of compro mise, abridging or curtailing the ambit of the 664 rights of the victims, it was submitted that in respect of liabilities of UCC & UCIL, be it corporate, criminal or tortious, it was open to an individual to take a decision of enforcing the liability to its logical extent or stopping short of it and acceding to a compromise.
Just as an indi vidual can make an election in the matter of adjudication of liability so can a statutory representative make an elec tion.
Therefore, it is wholly wrong to contend, it was urged, that Section 3(ii)(b) is inconsistent with individu al 's right of election and at the same time it provides the centralised decision making processes to effectively adjudge and secure the common good.
It was only a central agency like the Govt.
of India, who could have a perspective of the totality of the claims and a vision of the problems of individual plaintiffs in enforcing these, it was urged.
It was emphasised that it has to be borne in mind that a com promise is a legal act.
In the present case, it is a part of the conduct of the suit.
It is, therefore, imperative that the choice of compromise is made carefully, cautiously and with a measure of discretion, it was submitted.
But if any claimant wished to be associated with the conduct of the suit, he would necessarily have been afforded an opportunity for that purpose, according to the learned Attorney General.
In this connection, reference was made to Section 4 of the Act.
On the other hand, an individual who did not partici pate in the conduct of the suit and who is unaware of the various intricacies of the case, could hardly be expected to meaningfully partake in the legal act of settlement either in conducting the proceedings or entering into compromise, it was urged.
In those circumstances, the learned Attorney General submitted that the orders of 14 15th February, 1989 and the Memorandum of Settlement were justified both under the Act and the Constitution.
According to him, the terms of Settlement might be envisaged as pursuant to Section 3(ii)(b) of the Act, which was filed according to him pursu ant to judical direction.
He sought more than once to empha sise, that the order was passed by the highest Court of the land in exercise of extraordinary jurisdiction vested in it under the Constitution.
Our attention was drawn to several decisions for the power of this Court under Articles 136 and 142 of the Con stitution.
Looked closely at the provisions of the Act, it was contended that taking into consideration all the factors, namely, possibilities of champerty, exploita tion, unconscionable agreements and the need to represent the dead and the disabled, the course of events would reveal a methodical and systematic protection and vindication of rights to the largest possible extent.
It was observed that the rights are indispensably valuable possessions, but the rights is something which a 665 man can stand on, something which must be demanded or in sisted upon without embarrassment or shame.
When rights are curtailed, permissibility of such a measure can be examined only upon the strength, urgency and the preeminence of rights and the largest good of the largest number sought to b,e served by curtailment.
Under the circumstances which were faced by the victims of Bhopal gas tragedy, the justi fying basis, according to the learned Attorney General, or ground of human rights is that every person morally ought to have something to which he or she is entitled.
It was empha sised that the Statute aimed at it.
The Act provides for assumption of rights to sue with the aim of securing speedy, effective and equitable results to the best advantage of the claimants.
The Act and the scheme, according to the learned Attorney General, sought to translate that profession into a system of faith and possible association when in doubt.
Unless such a profession is shown to be unconscionable under the circumstances or strikes judicial conscience as a sub version of the objects of the Act, a declaredly fair, just and equitable exercise of a valid power would not be open to challenge.
He disputed the submission that the right to represent victims postulated as contended mainly by the counsel on behalf of the petitioners, a pre determination of each individual claim as a sine qua non for proceeding with the action.
Such a construction would deplete the case of its vigour, urgency and sense of purpose, he urged.
In this case, with the first of the cases having been filed in U.S. Federal Court on December 7, 1984 a settlement would have been reached for a much smaller sum to the detriment of the victims.
Learned Attorney General emphasised that this background has to be kept in mind while adjudging the valid ity of the Act and the appropriateness of the conduct of the suit in the settlement entered into.
He submitted that it has to be borne in mind that if the contentions of the petitioners are entertained, the rights theoretically might be upheld but the ends of justice would stand sacrificed.
It is in those circumstances that it was emphasised that the claimant is an individual and is the best person to speak about his injury.
The knowledge in relation to his injury is relevant for the purpose of com pensation, whose distribution and disbursement is the sec ondary stage.
It is fallacious to suggest that the plaint was not based upon necessary data.
He insisted that the figures mentioned in the plaint although tentative were not mentioned without examination or analysis.
It was further submitted by the learned Attorney General 666 that while the Govt.
of India had proceeded against the UCC, it had to represent the victims as a class and it was not possible to define each individual 's right after careful scrutiny, nor was it necessary or possible to do so in a mass disaster case.
The settlement was a substitute for adjudication since it involved a process of reparation and relief.
The relief and reparation cannot be said to be irrelevant for the purpose of the Act.
It was stated that the alleged liability of the Govt.
of India or any claim asserted against the alleged joint tort feasor should not be allowed to be a constraint on the Govt.
of India to protect the interests of its own citizens.
Any counter claim by UCC or any claim by a citizen against the Govt.
cannot vitiate the action of the State in the collective interest of the victims, who are the citizens.
Learned Attorney General submitted that any industrial activity, normally, has to be licensed.
The mere regulation of any activity does not carry with it legally a presumption of liability for injury caused by the activity in the event of a mishap occurring in the course of such an activity.
In any event, the learned Attor ney General submitted the Govt.
of India enjoys sovereign immunity in accordance with settled law.
If this were not the case, the Sovereign will have to abandon all regulatory functions including the licensing of drivers of automobiles.
Hence, we have to examine the question whether even on the assumption that there was negligence on the part of the Govt.
of India in permitting/licensing of the industry set up by the Union Carbide in Bhopal or permitting the factory to grow up, such permission or conduct of the Union of India was responsible for the damage which has been suffered as a result of Bhopal gas leakage.
It is further to be examined whether such conduct was in discharge of the sovereign functions of the Govt., and as such damages, if any, result ing therefrom are liable to be proceeded against the Govt.
as a joint tort feasor or not.
In those circumstances, it was further asserted on behalf of the Union of India that though calculation of damages in a precise manner is a logical consequence of a suit in progress it cannot be said to be a condition precedent for the purpose of settling the matter.
Learned Attorney General urged that the accountabil ity to the victims should be through the court.
He urged that the allegation that a large number of victims did not give consent to the settlement entered into, is really of no relevance in the matter of a compromise in a mass tort action.
It was highlighted that it is possible that those who do not need urgent relief or are uninformed of the issues in the case, may choose to deny consent and may place the flow of relief in jeopardy.
Thus, consent based upon individual subjective opinion can never be correlated to the proposal of an overall settlement in an urgent matter.
Learned Attorney General urged further that if indeed con sent were to be insisted upon as a mandatory 667 requirement of a Statute, it would not necessarily lead to an accurate reflection of the victims ' opinion as opinions may be diverse.
No individual would be in a position to relate himself to a lump sum figure and would not be able to define his expectations on a global criteria.
In such cir cumstances the value of consent is very much diminished.
It was urged that if at all consent was to be insisted it should not be an expression of the mind without supporting information and response.
To make consent meaningful it is necessary that it must be assertion of a fight to be exer cised in a meaningful manner based on information and com prehension of collective welfare and individual good.
In a matter of such dimensions the insistence upon consent will lead to a process of enquiry which might make effective consideration of any proposal impossible.
For the purpose of affording consent, it would also be necessary that each individual not only assesses the damages to himself objec tively and places his opinion in the realm of fair expecta tion, but would also have to do so in respect of others.
The learned Attorney General advanced various reasons why it is difficult now or impossible to have the concurrence of all.
In answer to the criticism by the petitioners, it was explained on behalf of the Union of India that UCIL was not impleaded as a party in the suit because it would have militated against the plea of multinational enterprise liability and the entire theory of the case in the plaint.
It was highlighted that the power to represent under the Act was exclusive, the power to compromise for the Govt.
of India is without reference to the victims, yet it is a power guided by the sole object of the welfare of the victims.
The presence and ultimately the careful imprimatur of the judi cial process is the best safeguard to the victims.
Learned Attorney General insisted that hearing the parties after the settlement would also not serve any purpose.
He urged that it can never be ascertained with certainty whether the victims or groups have authorised what was being allegedly spoken on their behalf; and that the victims would be unable to judge a proposal of this nature.
A method of consensus need not be evolved like in America where every settlement made by contingency fee lawyers who are anxious to obtain their share automatically become adversaries of the victims and the court should therefore be satisfied.
Here the Court arrived at the figure and directed the parties to file a settlement on the basis of its order of February 14, 1985 and the interveners were heard, it was urged.
It was also urged that notice to the victims individually would have been a difficult exercise and analysis of their response time consuming.
668 72.
The learned Attorney General urged that neither the Central Govt.
nor the State Govt.
of Madhya Pradesh is liable for the claim of the victims.
He asserted that, on the facts of the present case, there is and can be no li ability on their part as joint tort feasors.
For the welfare of the community several socio economic activities will have to be permitted by the Govt.
Many of these activities may have to be regulated by licensing provisions contained in Statutes made either by Parliament or by State Legislatures.
Any injury caused to a person, to his life or liberty in the conduct of a licensed authority so as to make the said licensing authority or the Govt.
liable to damages would not be in conformity with jurisprudential principle.
If in such circumstances it was urged on behalf of the Govt.
, the public exchequer is made liable, it will cause great public injury and may result in drainage of the treasury.
It would terrorise the welfare state from acting for development of the people, and will affect the sovereign governmental activities which are beneficial to the community not being adequately licensed and would thereby lead to public injury.
In any event, it was urged on behalf of the Govt., that such licensing authorities even assuming without admitting could be held to be liable as joint tort feasors, it could be so held only on adequate allegations of negligence with full particulars and details of the alleged act or omission of the licensing authority alleged and its direct nexus to the injury caused to the victims.
It had to be proved by cogent and adequate evidence.
On some conjecture or surmise without any foundation on facts, Govt 's right to represent the victims cannot be challenged.
It was asserted that even if the Govt.
is considered to be liable as a joint tort feasor, it will be entitled to claim sovereign immunity on the law as it now stands.
Reference was made to the decision of this Court in Kasturilal Kalia Ram Jain vs The State of U.P., ; where the conduct of some police officers in seizing gold in exercise of their statutory powers was held to be in discharge of the sovereign functions of the State and such activities enjoyed sovereign immunities.
The liability of the Govt.
of India under the Constitution has to be referred to Article 300, which takes us to Sections 15 & 18 of the Indian Independence Act, 1947, and Section 176(1) of the Govt.
of India Act, 1935.
Reference was also made to the observations of this Court in The State of Rajasthan vs Mst.
Vidhyawati, & Anr., [1962] 2 Supp.
SCR 989.
We have noted the shareholding of UCC.
The circum stances that financial institutions held shares in the UCIL would not disqualify 669 the Govt.
of India from acting as patens patriae and in discharging of its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Govt.
of India, UCIL was not a necessary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia.
on the basis of enterprise liability.
If the Govt.
of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case (supra).
Accord ing to learned Attorney General, the Union of India in the present case was not proceeding on the basis of lesser liability of UCC predicated in Mehta 's case but on a differ ent jurisprudential principle to make UCC strictly and absolutely liable for the entire damages.
The learned Attorney General submitted that even assuming for the purpose of argument without conceding that any objection can be raised for the Govt.
of India repre senting the victims, to the present situation the doctrine of necessity applied.
The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity, and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae jurisdiction or on principle analogous thereto.
After having statutorily armed itself in recogni tion of such parens patraie right or on principles analogous thereto, it went to the American courts.
No other person was properly designed for representing the victims as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent the victims before the American courts.
Private plaintiffs were also represented by their attorneys.
A Committee of three attorneys was formed before the case proceeded before Judge Keenan.
It was high lighted that the order of Judge Keenan permitted the Govt.
of India to represent the victims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
Reference may be made to Halsbury 's Laws of England, Vol. 1, 4th Edn., page 89, para 73, where it was pointed that that if all the members of the only tribunal competent to determine a matter are subject to disqualifica tion, they may be authorised and obliged to hear that matter by virtue of the operation of the common law doctrine of necessity.
Reference was also made to De Smith 's Judicial Review of Administrative Action (4th Edn.
pages 276 277.
See also G.A. Flick Natural Justice, [1879] pages 138 141.
Reference was also made to the observations of this Court in J. Mohapatra & Co. 670 & Anr.
vs State of Orissa & Anr.
, ; , where at page 112 of the report, the Court recognised 'the principle of necessity.
It was submitted that these were situations where on the principle of doctrine of necessity a person interested was held not disqualified to adjudicate on his rights.
The present is a case where the Govt.
of India only represented the victims as a party and did not adjudicate between the victims and the UCC.
It is the Court which would adjudicate the rights of the victims.
The representation of the victims by the Govt.
of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
We are of the opinion in the facts and the circumstances of the case that this contention urged by Union of India is right.
There was no scope of violation of the principle of natural justice on this score.
It was also urged that the doctrine of de facto representation will also apply to the facts and the circum stances of the present case.
Reliance was placed on the decision of this Court in Gokaraju Rangaraju etc.
vs State of A.P.; , , where it was held that the doc trine of de facto representation envisages that acts per formed within the scope of assumed official authority in the interest of public or third persons and not for one 's own benefit, are generally to be treated as binding as if they were the acts of officers de jure.
This doctrine is rounded on good sense, sound policy and practical expediency.
It is aimed at the prevention of public and private mischief and protection of public and private interest.
It avoides end less confusion and needless chaos.
Reference was made to the observations of this Court in Pushpadevi M. Jatia vs M.L. Wadhawan; , at 389 390 and M/s. Beopar Shayak (P) Ltd. & Ors.
vs Vishwa Nath & Ors., [1987] 3 SCC 693 at 702 & 703.
Apart from the aforesaid doctrine, doctrine of bona fide representation was sought to be resorted to in the circumstances.
In this connection, reference was made to Dharampal Sing, vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammad Sulaiman vs N.C. Mohammad Ismail & Ors., ; and Malkarjun Bin Shigramappa Pasara vs Narhari Bin Shivappa & Anr., 27 IA 2 16. 77.
It was further submitted that the initiation of criminal proceedings and then quashing thereof, would not make the Act ultra vires so far as it concerned.
Learned Attorney General submitted that the Act only authorised the Govt.
of India to represent the victims to enforce their claims for damages under the Act.
The Govt.
as such had nothing to do with the quashing of the criminal proceedings and it was not representing the victims in respect of the criminal liability of 671 the UCC or UCIL to the victims.
He further submitted that quashing of criminal proceedings was done by the Court in exercise of plenary powers under Articles 136 and 142 of the Constitution.
In this connection, reference was made to State of U.P. vs Poosu & Anr., ; ; K.M. Nanavati vs The State of Bombay, ; According to the learned Attorney General, there is also power in the Supreme Court to suggest a settlement and give relief as in Ram Gopal vs Smt.
Sarubai & Ors., ; India Mica & Micanite Industries Ltd. vs State of Bihar & Ors., 78.
Learned Attorney General urged that the Supreme Court is empowered to act even outside a Statute and give relief in addition to what is contemplated by the latter in exercise of its plenary power.
This Court acts not only as a Court of Appeal but is also a Court of Equity.
See Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh Oberoi, 1.
During the course of heating of the petitions, he in formed this Court that the Govt.
of India and the State Govt.
of Madhya Pradesh refuted and denied any liability, partial or total, of any sort in the Bhopal gas Leak disas ter, and this position is supported by the present state of law.
It was, however, submitted that any claim against the Govt.
of India for its alleged tortious liability was out side the purview of the Act and such claims, if any, are not extinguished by reason of the orders dated 14th & 15th February, 1989 of this Court.
Learned Attorney General further stated that the amount of $ 470 million which was secured as a result of the memorandum of settlement and the said orders of this Court would be meant exclusively for the benefit of the victims who have suffered on account of the Bhopal gas leak disas ter.
The Govt.
of India would not seek any reimbursement on account of the expenditure incurred suo motu for relief and rehabilitation of the Bhopal victims nor will the Govt.
or its instrumentality make any claim on its own arising from this disaster.
He further assured this Court that in the event of disbursement of compensation being initiated either under the Act or under the orders of this Court, a notifica tion would be instantaneously issued under Section 5(3) of the Act authorising the Commissioner or any other officers to discharge functions and exercise all or any powers which the Central Govt.
may exercise under Section 5 to enable the victims to place before the Commissioner or the Dy.
Commis sioner any additional evidence that they would like to be considered.
The Constitution Bench of this Court presided over by the learned Chief Justice has pronounced an order on 4th May, 1989 giving 672 reasons for the orders passed on 14th 15th February, 1989.
Inasmuch as good deal of criticism was advanced before this Court during the hearing of the arguments on behalf of the petitioners about the propriety and validity of the settle ment dated 14th 15th February, 1989 even though the same was not directly in issue before us, it is necessary to refer briefly to what the Constitution Bench has stated in the said order dated 4th May, 1989.
After referring to the facts leading to the settlement, the Court has set out the brief reason on the following points: (a) How did the Court arrive at the sum of 470 million US dollars for an overall settlement? (b) Why did the Court consider the sum of 470 millions US dollars as 'just, equitable and reasonable '? (c) Why did the Court not pro nounce on certain important legal questions of far reaching importance said to arise in the appeals as to the principles of liability of monolithic, economically entrenched multina tional companies operating with inherently dangerous technologies in the developing countries of the third world? These questions were said to be of great contemporary rele vance to the democracies of the third world.
This Court recognised that there was another aspect of the review pertaining to the part of the settlement which terminated the criminal proceedings.
The questions raised on the point in the review petitions, the Court was of the view, prima facie merit consideration and therefore, abstained from saying anything which might tend to prejudge this issue one way or the other.
The basic consideration, the Court recorded, moti vating the conclusion of the settlement was the compelling need for urgent relief, and the Court set out the law 's delays duly considering that there was a compelling duty both judicial and humane, to secure immediate relief to the victims.
In doing so, the Court did not enter upon any forbidden ground, the court stated.
The Court noted that indeed efforts had already been made in this direction by Judge Keenan and the learned District Judge of Bhopal.
Even at the opening of the arguments in the appeals, the Court had suggested to learned counsel to reach a just and fair settlement.
And when counsel met for re scheduling of the hearings the suggestion was reiterated.
The Court recorded that the response of learned counsel was positive in at tempting a settlement but they expressed a certain degree of uneasiness and skepticism at the prospects of success in view of their past experience of such negotiations when, as they stated, there had been uninformed and even irresponsi ble criticism of the attempts at settlement.
673 82.
Learned Attorney General had made available to the Court the particulars of offers and counter offers made on previous occasions and the history of settlement.
In those circumstances, the Court examined the prima facie material as the basis of quantification of a sum which, having regard to all the circumstances including the prospect of delays inherent in the judicial process in India and thereafter in the matter of domestication of the decree in the U.S. for the purpose of execution and directed that 470 million US dollars, which upon immediate payment with interest over a reasonable period, pending actual distribution amongst the claimants, would aggregate to nearly 500 million US dollars or its rupee equivalent of approximately Rs.750 crores which the learned Attorney General had suggested, be made the basis of settlement, and both the parties accepted this direction.
The Court reiterated that the settlement proposals were considered on the premise that the Govt.
had the exclu sive statutory authority to represent and act on behalf of the victims and neither counsel had any reservation on this.
The order was also made on the premise that the Act was a valid law.
The Court declared that in the event the Act is declared void in the pending proceedings challenging its validity, the order dated 14th February, 1989 would require to be examined in the light of that decision.
The Court also reiterated that if any material was placed before it from which a reasonable inference was possible that the UCC had, at any time earlier, offered to pay any sum higher than an outright down payment of US 470 million dollars, this Court would straightaway initiate suo motu action requiring the concerned parties to show cause why the order dated 14th February '89 should not be set aside and the parties relegat ed to their original positions.
The Court reiterated that the reasonableness of the sum was based not only on inde pendent quantification but the idea of reasonableness for the present purpose was necessarily a broad and general estimate in the context of a settlement of the dispute and not on the basis of an accurate assessment by adjudication.
The Court stated that the question was, how good or reasona ble it was as a settlement, which would avoid delay, uncer tainties and assure immediate payment.
An estimate in the very nature of things, would not have the accuracy of an adjudication.
The Court recorded the offers, counter offers, reasons and the numbers of the persons treated and the claims already made.
The Court found that from the order of the High Court and the admitted position on the plaintiff 's side, a reasonable prima facie estimate of the number of fatal cases and serious personal injury cases, was possible to be made.
The Court referred to the High Court 's 674 assessment and procedure to examine the task of assessing the quantum of interim compensation.
The Court referred to M. C Mehta 's case reiterated by the High Court, bearing in mind the factors that if the suit proceeded to trial the plaintiff Union of India would obtain judgment in respect of the claims relating to deaths and personal injuries in the following manner: (a) Rs.2 lakhs in each case of death; (b) Rs.2 lakh in each case of total permanent disability; (c) Rs. 1 lakh in each case of permanent partial disablement; and (d) Rs.50,000 in each case of temporary partial disablement.
Half of these amounts were awarded as interim com pensation by the High Court.
The figures adopted by the High Court in regard to the number of fatal cases and cases of serious personal injuries did not appear to have been disputed by anybody before the High Court, this Court observed.
From those figures, it came to the conclusion that the total number of fatal cases was about 3,000 and of grievous and serious personal injuries, as verifiable from the records was 30,000.
This Court also took into consideration that about 8 months after the occurrence a survey had been conducted for the purpose of identification of cases.
These figures indi cated less than 10,000.
In those circumstances, as a rough and ready estimate, this Court took into consideration the prima facie findings of the High Court and estimated the number of fatal cases of 3,000 where compensation could range from Rs. 1 lakh to Rs.3 lakhs.
This would account for Rs.70 crores, nearly 3 times higher than what would have otherwise been awarded in comparable cases in motor vehicles accident claims.
The Court recognised the effect of death and reiter ated that loss of precious human lives is irreparable.
The law can only hope to compensate the estate of a person whose life was lost by the wrongful act of another only in the way the law was equipped to compensate i.e. by monetary compen sation calculated on certain well recognised principles.
"Loss to the estate" which is the entitlement of the estate and the 'loss of dependency ' estimated on the basis of capitalised present value awardable to the heirs and depend ants, this Court considered, were the main components in the computation of compensation in fatal accident actions, but the High Court adopted a higher basis.
The Court also took into account the personal injury cases, and stated that these apportionments were merely broad considerations gener ally guiding the idea of reasonableness of the overall basis of 675 settlement, and reiterated that this exercise was not a pre determination of the quantum of compensation amongst the claimants either individually or catagory wise, and that the determination of the actual quantum of compensation payable to the claimants has to be done by the authorities under the Act.
These were the broad assessments and on that basis the Court made the assessment.
The Court believed that this was a just and reasonable assessment based on the materials available at that time.
So far as the other question, name ly, the vital juristic principles of great contemporary relevance to the Third World generally, and to India in particular, touching problems emerging from the pursuit of such dangerous technologies for economic gains by multi nationals in this case, the Court recognised that these were great problems and reiterated that there was need to evolve a national policy to protect national interests from such ultra hazardous pursuits of economic gain; and that Jurists, technologists and other experts in economics.
environmen tology, futurology, sociology and public health should identify the areas of common concern and help in evolving proper criteria which might receive judicial recognition and legal sanction.
The Court reiterated that some of these problems were referred to in M.C. Mehta 's case (supra).
But in the present case, the compulsions of the need for immedi ate relief to tens of thousands of suffering victims could not wait till these questions vital though these be, were resolved in due course of judicial proceedings; and the tremendous suffering of thousands of persons compelled this Court to move into the direction of immediate relief which, this Court thought, should not be subordinated to the uncer tain promises of the law, and when the assessment of fair ness of the amount was based on certain factors and assump tions not disputed even by the plaintiffs.
Before considering the question of constitutional validity of the Act, in the light of the background of the facts and circumstances of this case and submissions made, it is necessary to refer to the order dated 3rd March, 1989 passed by the Constitution Bench in respect of writ peti tions Nos. 164/86 and 268/89, consisting of 5 learned Judges presided over by the Hon 'ble the Chief Justice of India.
The order stated that these matters would be listed on 8th March, 1989 before a Constitution Bench for decision "on the sole question whether the Bhopal Gas Leak Disaster (Process ing of Claims) Act, 1985 is ultra vires".
This is a judicial order passed by the said Constitution Bench.
This is not an administrative order.
Thus, these matters are before this Court.
The question, therefore, arises; what are these matters? The aforesaid order specifically states that these matters were placed before this Bench on the "sole question" whether the Act is ulta vires.
676 Hence, these matters are not before this Bench for disposal of these writ petitions.
If as a result of the determina tion, one way or the other, it is held, good and bad, and that some relief becomes necessary, the same cannot be given or an order cannot be passed in respect thereof, except declaring the Act or any portion of the Act, valid or in valid constitutionally as the decision might be.
In writ petition No. 268/89 there is consequential prayer to set aside the order dated 14/15th February, 1989.
But since the order dated 3rd March, 1989 above only sug gests that these matters have been placed before this Bench 'on the sole question ' whether the Bhopal Act is ultra vires or not, it is not possible by virtue of that order to go into the question whether the settlement is valid or liable to be set aside as prayed for in the prayers in these appli cations.
The provisions of the Act have been noted and the rival contentions of the parties have been set out before.
It is, however, necessary to reiterate that the Act does not in any way circumscribe the liability of the UCC, UCIL or even the Govt.
of India or Govt.
of Madhya Pradesh if they are jointly or severally liable.
This follows from the construction of the Act, from the language that is apparent.
The context and background do not indicate to the contrary.
Counsel for the victims plead that that is so.
The learned Attorney General accepts that position.
The liability of the Government is, however, disputed.
This Act also does not deal with any question of criminal liability of any of the parties concerned.
On an appropriate reading of the relevant provisions of the Act, it is apparent that the criminal liability arising out of Bhopal gas leak disaster is not the subject matter of this Act and cannot be said to have been in any way affected, abridged or modified by virtue of this Act.
This was the contention of learned counsel on behalf of the victims.
It is also the contention of the learned Attor ney General.
In our opinion, it is the correct analysis and consequence of the relevant provisions of the Act.
Hence, the submissions made on behalf of some of the victims that the Act was bad as it abridged or took away the victims ' right to proceed criminally against the delinquent, be it UCC or UCIL or jointly or severally the Govt.
of India, Govt.
of Madhya Pradesh or Mr. Arjun Singh, the erstwhile Chief Minister of Madhya Pradesh, is on a wrong basis.
There is no curtailment of any right with respect to any criminal liability.
Criminal liability is not the subject matter of the Act.
By the terms of the Act and also on the concessions made by the learned Attorney General, if that be so, then can non prosecution in criminal liability be a consideration or valid consideration for settlement of claims under the Act? 677 This is a question which has been suggested and articulated by learned counsel appearing for the victims.
On the other hand, it has been asserted by the learned Attorney General that that part of the order dated 14/15th February, 1989 dealing with criminal prosecution or the order of this Court was by virtue of the inherent power of this Court under Articles 136 & 142 of the Constitution.
These, the learned Attorney General said, were in the exercise of plenary powers of this Court.
These are not considerations which induced the parties to enter into settlement.
For the pur pose of determination of constitutional validity of the Act, it is however necessary to say that criminal liability of any of the delinquents or of the parties is not the subject matter of this Act and the Act does not deal with either claims or rights arising out of such criminal liabil ity.
This aspect is necessary to be reiterated on the ques tion of validity of the Act.
We have set out the language and the purpose of the Act, and also noted the meaning of the expression 'claim ' and find that the Act was to secure the claims connected with or arising out of the disaster so that these claims might be dealt with speedily, affectively, equitably and to the best advantage of the claimants.
In our opinion, Clause (b) of Section 2 includes all claims of the victims arising out of and connected with the disaster for compensation and damages or loss of life or personal injury or loss to the business and flora and fauna.
What, however, is the extent of liability, is another question.
This Act does not purport to or even to deal with the extent of liability arising out of the said gas leak disaster.
Hence, it would be improper or incorrect to contend as did Ms. Jaising, Mr Garg and other learned counsel appearing for the victims, that the Act circumscribed the liability criminal, punitive or absolute of the parties in respect of the leakage.
The Act provides for a method or procedure for the establishment and enforcement of that liability.
Good deal of argument was advanced before this Court on the question that the settle ment has abridged the liability and this Court has lost the chance of laying down the extent of liability arising out of disaster like the Bhopal Gas Leak disaster.
Submissions were made that we should lay down clearly the extent of liability arising out of these types of disasters and we should fur ther hold that the Act abridged such liability and as such curtailed the rights of the victims and was bad on that score.
As mentioned hereinbefore, this is an argument under a misconception.
The Act does not in any way except to the extent indicated in the relevant provisions of the Act circumscribe or abridge the extent of the rights of the victims so far as the liability of the delinquents are concerned.
Whatever are the rights of the victims and what ever claims arise out of the 678 gas leak disaster for compensation, personal injury, loss of life and property, suffered or likely to be sustained or expenses to be incurred or any other loss are covered by the Act and the Central Govt.
by operation of Section 3 of the Act has been given the exclusive right to represent the victims in their place and stead.
By the Act, the extent of liability is not in any way abridged and, therefore, if in case of any industrial disaster like the Bhopal Gas Leak disaster, there is right in victims to recover damages or compensation on the basis of absolute liability, then the same is not in any manner abridged or curtailed.
Over 120 years ago Rylands vs Fletcher, [1868] Vol.
3 LR E & I Appeal Cases 330 was decided in England.
There A, was the lessee of certain mines.
B, was the owner of a mill standing on land adjoining that under which the mines were worked.
B, desired to construct a reservoir, and employed competent persons, such as engineers and a contractor, to construct it.
A, had worked his mines up to a spot where there were certain old passages of disused mines; these passages were connected with vertical shafts which communi cated with the land above, and which had also been out of use for years, and were apparently filled with marl and the earth of the surrounding land.
No care had been taken by the engineer or the contractor to block up these crafts, and shortly after water had been introduced into the reservoir it broke through some of the shafts, flowed through the old passage and flooded As mine.
It was held by the House of Lords in England that where the owner of land, without wilfulness or negligence, uses his land in the ordinary manner of its use, though mischief should thereby be occa sioned to his neighbour, he will not be liable in damages.
But if he brings upon his land any thing which would not naturally come upon it, and which is in itself dangerous, and may become mischievous if not kept under proper control, though in so doing he may act without personal wilfulness or negligence, he will be liable in ' damages for any mischief thereby occasioned.
In the background of the facts it was held that A was entitled to recover damages from B, in respect of the injury.
The question of liability was high lighted by this Court in M.C. Mehta 's case (supra) where a Constitution Bench of this Court had to deal with the rule of strict liability.
This Court held that the rule in Ry lands vs Fletcher, (supra) laid down a principle that if a person who brings on his land and collects and keep there anything likely to do harm and such thing escapes and does damage to another, he is liable to compensate for the damage caused.
This rule applies only to nonnatural user of the land and does not apply to things naturally on the land or where the escape is due to an act of God and an act of a stranger or the default of the person injured or where the things which escape 679 are present by the consent of the person injured or in certain cases where there is a statutory authority.
There, this Court observed that the rule in Rylands vs Fletcher, (supra) evolved in the 19th century at a time when all the developments of science and technology had not taken place, and the same cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure.
In a modern industrial society with highly de veloped scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to be carried on as part of the developmental process, Courts should not feel inhibited by this rule merely because the new law does not recognise the rule of strict and absolute liability in case of an enterprise engaged in hazardous and dangerous activity.
This Court noted that law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country.
Law cannot afford to remain static.
This Court reiterated there that if it is found necessary to construct a new principle of liability to deal with an unusual situa tion which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, the Court should not hesitate to evolve such principle of liability merely because it has not been so done in England.
According to this Court, an enterprise which is engaged in a hazardous or inherently dangerous industry which poses potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegable duty to the community to ensure that no harm results to anyone.
The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results to anyone on account of an accident in the operation of such activity resulting, for instance, in escape of toxic gas the enterprise is strictly and absolute ly liable to compensate all those who were affected by the accident as part of the social cost for carrying on such activity, regardless of whether it is carried on carefully or not.
Such liability is not subject to any of the excep tions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
If the enterprise is permitted to carry on a hazardous or dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such activity as an appropriate item of its overheads.
The enterprise alone has the resources to discover and guard against haz ards or dangers and 'to provide warning against potential hazards.
680 This Court reiterated that the measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect.
The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.
The determination of actual damages payable would depend upon various facts and circum stances of the particular case.
It was urged before us that there was an absolute and strict liability for an enterprise which was carrying on dangerous operations with gases in this country.
It was further submitted that there was evidence on record that sufficient care and attention had not been given to safe guard against the dangers of leakage and protection in case of leakage.
Indeed, the criminal prosecution that was launched against the Chairman of Union Carbide Shri Warren Anderson and others, as indicated before, charged them along with the defendants in the suit with delinquency in these matters and criminal negligence in conducting the toxic gas operations in Bhopal.
As in the instant adjudication, this Court is not concerned with the determination of the actual extent of liability, we will proceed on the basis that the law enunciated by this Court in M.C. Mehta 's case (supra) is the decision upon the basis of which damages will be payable to the victims in this case.
But then the practical question arises: what is the extent of actual damages payable, and how would the quantum of damages be computed? Indeed, in this connection, it may be appropriate to refer to the order passed by this Court on 3rd May, 1989 giving reasons why the settlement was arrived at at the figure indicated.
This Court had reiterated that it had proceeded on certain prima facie undisputed figures of death and substantially compen sating personal injury.
This Court has referred to the fact that the High Court had proceeded on the broader principle in M.C. Mehta 's case (supra) and on the basis of the capaci ty of the enterprise because the compensation must have deterrent effect.
On that basis the High Court had proceeded to estimate the damages on the basis of Rs.2 lakhs for each case of death and of total permanent disability, Rs. 1 lakh for each case of partial permanent disability and Rs.50,000 for each case or ' temporary partial disability.
In this connection, the controversy as to what would have been the damages if the action had proceeded, is another matter.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involve both compen sation to the person injured and punish 681 ment as deference.
These problems were highlighted by the House of Lords in England in Rookes vs Barnard, [1964]AC 1129, which indicate the difference between aggravated and exemplary damages.
Salmond on the Law of Torts, 15th Edition at p. 30 emphasises that the function of damages is compen sation rather than punishment, but punishment cannot always be ignored.
There are views which are against exemplary damages on the ground that these infringe in principle the object of law of torts, namely, compensation and not punish ment and these tend to impose something equivalent to fine in criminal law without the safeguards provided by the criminal law.
In Rookes vs Barnard (supra), the House of Lords in England recognised three classes of cases in which the award of exemplary damages was considered to be justi fiable.
Awards must not only, it is said, compensate the parties but also deter the wrong doers and others from similar conduct in future.
The question of awarding exem plary or deterrent damages is said to have often confused civil and criminal functions of law.
Though it is considered by many that it is a legitimate.
encroachment of punishment in the realm of civil liability, as it operates as a re straint on the transgression of law which is for the ulti mate benefit of the society.
Perhaps, in this case, had the action proceeded, one would have realised that the fall out of this gas disaster might have been formulation of a con cept of damages, blending both civil and criminal liabili ties.
There are, however, serious difficulties in evolving such an actual concept of punitive damages in respect of a civil action which can be integrated and enforced by the judicial process.
It would have raised serious problems of pleading, proof and discovery, and interesting and challeng ing as the task might have been, it is still very uncertain how far decision based on such a concept would have been a decision according to 'due process ' of law acceptable by international standards.
There were difficulties in that attempt.
But as the provisions stand these considerations do not make the Act constitutionally invalid.
These are matters on the validity of settlement.
The Act, as such does not abridges or curtail damages or liability whatever that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
Mr. Garg tried to canvass before us the expanding of horizons of human rights.
He contended that the conduct of the multinational corporations dealing with dangerous gases for the purpose of development specially in the conditions prevailing under the Third world countries requires closer scrutiny and vigilance on the part of emerging nations.
He submitted that unless courts are alert and active 682 in preserving the rights of the individuals and in enforcing criminal and strict liability and in setting up norms com pelling the Govt.
to be more vigilant and enforcing the sovereign will of the people of India to oversee that such criminal activities which endanger even for the sake of developmental work, economy and progress of the country, the health and happiness of the people and damage the future prospects of health, growth and affect and pollute the environment, should be curbed and, according to him, these could only be curbed by insisting through the legal adjudi cation, punitive and deterrent punishment in the form of damages.
He also pleaded that norms should be set up indi cating how these kinds of dangerous operations are to be permitted under conditions of vigilance and survillence.
While we appreciate the force of these arguments, and en dorse his plea that norms and deterrence should be aspired for, it is difficult to correlate that aspect with the present problem in this decision.
We do reiterate, as mentioned in the Universal Declaration of Human Rights that people are born free and the dignity of the persons must be recognised and an effec tive remedy by competent tribunal is one of the surest method of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about meas ures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
The main question, however, canvassed by all learned counsel for the victims was that so far as the Act takes away the right of the victims to fight or establish their own rights, it is a denial of access to justice, and it was contended that such denial is so great a deprivation of both human dignity and right to equality that it cannot be justi fied because it would be affecting right to life, which again cannot be deprived without a procedure established by law which is just, fair and reasonable.
On this aspect, Shri Shanti Bhushan tried to urge before us that sections 3 & 4 of the Act.
in so far as these enjoin and empower the Central Govt.
to institute or prose cute proceedings was only an enabling provision for the Central Govt.
and not depriving or disabling provisions for the victim.
Ms. Jaising sought to urge in addition, that in order to make the provisions constitutionally valid, we should eliminate the concept of exclusiveness to the Central Govt.
and give the victims right to sue along with the Central Govt.
We are unable to accept these submissions.
683 97.
In our opinion, Sections 3 & 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give to the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and significant.
The exclusivily cannot be whittled down or watered down as suggested by counsel.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to the Central Govt.
along with the victims in instituting or proceeding for the realisation or the enforcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effec tive or equitable and would not be the best or more advanta geous procedure for securing the claims arising out of the leakage.
In that view of the matter and in view of the language used and the purpose intended to be achieved, we are unable to accept this aspect of the arguments advanced on behalf of the victims.
It was then contended that by the procedure envisaged by the Act, the victims have been de prived and denied.their rights and property to fight for compensation.
The victims, it has been asserted, have been denied access to justice.
It is a great deprivation, it was urged.
It was contended that the procedure evolved under the Act for the victims is peculiar and having good deal of disadvantages for the victims.
Such special disadvantageous procedure and treatment is unequal treatment, it was sug gested.
It was, therefore, violative of Article 14 of the Constitution, that is the argument advanced.
The Act does provide a special procedure in respect of the rights of the victims and to that extent the Central Government takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multinational and a big Indian corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and indentifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disasters situated as the victims were against a mighty multinational with 684 the presence of foreign contingency lawyers.
looming on the scene, in our opinion, there were sufficient grounds for such differentiation and different treatment.
In treating the victims of the gas leak disaster differently and provid ing them a procedure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitu tion, Article 14 is not breached.
We are, therefore, unable to accept this criticism of the.
The second aspect canvassed on behalf of the victims is that the procedure envisaged is unreasonable and as such not warranted by the situation and cannot be treated as a procedure which is just, fair and reasonable.
The argument has to be judged by the yardstick, as mentioned hereinbe fore, enunciated by this Court in State of Madras vs V.G. Rao, (supra).
Hence, both the restrictions or limitations on the substantive and procedural rights in the impugned legis lation will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into consideration.
Having considered the back ground, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settlement in USA in mass action, the strength for the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the victims as contemplated by s.4 of the Act, the Act cannot be condemned as unreasonable.
In this connection, the concept of 'parens patriae ' in jurisprudence may be examined.
It was contended by the learned Attorney General that the State had taken upon itself this onus to effectively come in as parens patriae, we have noted the long line of Indian decisions where, though in different contexts, the concept of State as the parent of people who are not quite able to or competent to fight for their rights or assert their rights, have been utilised.
It was contended that the doctrine of parens patriae cannot be applicable to the victims.
How the concept has been understood in this country as well as in America has been noted.
Legal dictionaries have been referred to as noted before.
It was asserted on behalf of the victims by learned counsel that the concept of 'parens patriae ' can never be invoked for the purpose of suits in domestic juris diction of any country.
This can only be applied in respect of the claims out of the 685 country in foreign jurisdiction.
It was further contended that this concept of 'parens patraie ' can only be applied in case of persons who are under disability and would not be applicable in respect of those who are able to assert their own rights.
It is true that victims or their representatives are sui generis and cannot as such due to age, mental capac ity or other reason not legally incapable for suing or pursuing the remedies for the rights yet they are at a tremendous disadvantage in the broader and comprehensive sense of the term.
These victims cannot be considered to be any match to the multinational companies or the Govt.
with whom in the conditions that the victims or their representa tives were after the disaster physically, mentally, finan cially, economically and also because of the position of litigation would have to contend.
In such a situation of predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interests effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Govt.
to sue for and on behalf of or instead in place of the victims, no other theory, concept or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Govt.
It displaces the victims by opera tion of Section 3 of the Act and substitutes the Central Govt.
in its place.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Govt.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
If that is the position then, in our opinion, even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially, it could be utilised to suit or alter or adapt itself in the changed circum stances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
As we have noted the Act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
We must recognize and accept it as such.
686 101.
But this right and obligation of the State has another aspect.
Shri Shanti Bhushan has argued and this argument has also been adopted by other learned counsel appearing for the victims that with the assumption by the State of the jurisdiction and power as a parent to fight for the victims in the situation there is an imcumbent obliga tion on the State, in the words of Judge Keenan, 'as a matter of fundamental human decency ' to maintain the victims until the claims are established and realised from the foreign multinationals.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prose cuted the State must protect and preserve the victims.
Otherwise the object of the Act would be defeated, its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assump tion of the power and temporary deprivation of the rights of the victims and divestiture of the rights of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
Indeed, in the language of the Act there is support for this interpre tation.
Section 9 of the Act gives power to the Central Govt.
to frame by notification, a scheme for carrying into effect the purposes of the Act.
Sub section (2) of Section 9 provides for the matters for which the scheme may provide.
Amongst others, clause (d) of Section 9(2) provides for creation of a fund for meeting expenses in connection with the administration of the Scheme and of the provisions of the Act; and clause (e) of Section 9(2) covers the amounts which the Central Govt. "may after due appropriation made by Parliament by law in that behalf, credit to the fund re ferred to in clause (d) and any other amounts which may be credited to such fund".
Clause (f) of Section 9(2) speaks of the utilisation, by way of disbursal (including apportion ment) or otherwise, of any amounts received in satisfaction of the claims.
These provisions are suggestive but not explicit.
Clause (b) of Section 10 which provides that in disbursing under the scheme the amount received by way of compensation or damages in satisfaction of a claim as a result of the adjudication or settlement of the claim by a court or other authority, deduction shall be made from such amount of the sums, if any, paid to the claimant by the Govt.
before the disbursal of such amount.
The Scheme framed is also significant.
Clause 10 of the Scheme provides for the claims and relief funds and includes disbursal of amounts as relief including interim relief to persons af fected by the Bhopal gas leak disaster and Clause 11(1) stipulates that disbursal of any amounts under the scheme shall be made by the Deputy Commissioner to each claimant through credit in a bank or postal saving account, stressing that the legislative policy underlined 687 the Bhopal Act contemplated payment of interim relief till such time as the ' Central Govt.
was able to recover from the Union Carbide full amount of compensation from which the interim reliefs already paid were to be deducted from the amount payable to them for the final disbursal.
The Act should be construed as creating an obligation oh the Central Govt.
to pay interim relief as the Act deprives the victims of normal and immediate right of obtaining compensation from the Union Carbide.
Had the Act not been enacted, the victims could have and perhaps would have been entitled not only to sue the Union Carbide themselves, but also to enter into settlement or compromise of some sort with them.
The provi sions of the Act deprived the victims of that legal right and opportunity, and that deprivation is substantial depri vation because upon immediate relief depends often the survival of these victims.
In that background, it is just and proper that this deprivation is only to be justified if the Act is read with the obligation of granting interim relief or maintenance by the Central Government until the full amount of the dues of the victims is realised from the Union Carbide after adjudication or settlement and then deducting therefrom the interim relief paid to the victims.
As submitted by learned Attorney General, it is true that there is no actual expression used in the Act itself which expressly postulates or indicates such a duty or obligation under the Act.
Such an obligation is, however, inherent and must be the basis of properly construing the spirit of the Act.
In our opinion, this is the true basis and will be in consonance with the spirit of the Act.
It must be, to use the well known phrase 'the major inarticulate premise ' upon which though not expressly stated, the Act proceeds.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construction but on the contrary, Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This ap proach to the interpretation of the Act can legitimately be called the 'constructive intuition ' which, in our opinion, is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quanti ty of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the concession of which is dangerous, the denial ruinous".
Given this freedom it is a rare 688 opportunity though never to be misused and challenge for the Judges to adopt and give meaning to the Act, articulate and inarticulate, and thus translate the intention of the Par liament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims who, it was thought, were unable to establish their own rights and fight for themselves.
it is common knowledge that the victims were poor and impoverished.
How could they survive the long ordeal of litigation and ultimate execution of the decree or the orders unless provisions be made for their sustenance and maintenance, especially when they have been deprived of the fight to fight for these claims themselves? We, there fore, read the Act accordingly.
It was, then, contended that the Central Govt.
was not competent to represent the victims.
This argument has been canvassed on various grounds.
It has been urged that the Central Govt.
owns 22% share in UCIL and as such there is a conflict of interest between the Central Govt.
and the victims, and on that ground the former is disentitled to represent the latter in their battle against UCC and UCIL.
A large number of authorities on this aspect were cited.
However, it is not necessary in the view we have taken to deal with these because factually the Central Govt.
does not own any share in UCIL.
These are the statutory independent organisations, namely, Unit Trust of India and Life Insur ance Corporation, who own 20 to 22% share in UCIL.
The Govt.
has certain amount of say and control in LIC and UTI.
Hence, it cannot be said, in our opinion, that there is any con flict of interest in the real sense of the matter in respect of the claims of Bhopal gas leak disaster between the Cen tral Govt.
and the victims.
Secondly, in a situation of this nature, the Central Govt.
is the only authority which can pursue and effectively represent the victims.
There is no other organisation or Unit which can effectively represent the victims.
Perhaps, theoretically, it might have been possible to constitute another independent statutory body by the Govt.
under its control and supervision in whom the claim of the victims might have been vested and substituted and that Body could have been entrusted with the task of agitating or establishing the same claims in the same manner as the Central Govt. has done under the Act.
But the fact that that has not been done, in our opinion, does not in any way affect the position.
Apart from that, lastly, in our opinion, this concept that where there is a conflict of interest, the person having the conflict should not be entrusted with the task of this nature, does not apply in the instant situation.
In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central 689 Govt.
was not judging any claim, but was fighting and ad vancing the claims of the victims.
In those circumstances, it cannot be said that there was any violation of the prin ciples of natural justice and such entrustment to the Cen tral Govt.
of the right to ventilate for the victims was improper or bad.
The adjudication would be done by the courts, and therefore there is no scope of the violation of any principle of natural justice.
Along with this submission, the argument was that the power and the right given to the Central Govt.
to fight for the claims of the victims, is unguided and uncanalised.
This submission cannot be accepted.
Learned Attorney General is right that the power conferred on the Central Govt.
is not uncanalised.
The power is circumscribed by the purpose of the Act.
If there is any improper exercise or transgres sion of the power then the exercise of that power can be called in question and set aside, but the Act cannot be said to be violative of the rights of the victims on that score.
We have noted the relevant authorities on the question that how power should be exercised is different and separate from the question whether the power is valid or not.
The next argument on behalf of the victims was that there was con flict of interest between the victims and the Govt.
viewed from another aspect of the matter.
It has been urged that the Central Govt.
as well as the Govt.
of Madhya Pradesh along with the erstwhile Chief Minister of the State of Madhya Pradesh Shri Arjun Singh were guilty of negligence, malfeasance and non feasance, and as such were liable for damages along with Union Carbide and UCIL.
In other words, it has been said that the Govt.
of India and the Govt.
of Madhya Pradesh along with Mr. Arjun Singh are joint tort feasors and joint wrong doers.
Therefore.
it was urged that there is conflict of interest in respect of the claims arising out of the the gas leak disaster between the Govt.
of India and the victims and in such a conflict, it is improper, rather illegal and unjust to vest in the Govt.
of India the rights and claims of the victims.
As noted before, the Act was passed in a particular background and, in our opinion, if read in that background, only covers claims against Union Carbide or UCIL.
"Bhopal gas leak disaster" or "disaster" has been defined in clause (a) of Section (2) as the occurrence on the 2nd and 3rd days of December, 1984 which involved the release of highly noxious and abnormally dangerous gas from a plant in Bhopal (being a plant of the UCIL, a subsidiary of the UCC of U.S.A.) and which resulted in loss of life and damage to property on an extensive scale.
690 104.
In this context, the Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a "claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Govt.
Therefore, the Act proceeded on the assumption that the Govt. could be a claimant being a person as such.
Further more, this construction and the perspective of the Act is strengthened if a reference is made to the debate both in the Lok Sabha and Rajya Sabha to which references have been made.
The question whether there is scope for the Union of India being responsible or liable as a joint tort feasor is a difficult and different question.
But even assuming that it was possible that the Central Government might be liable in a case of this nature, the learned Attorney Gener al was right in contending that it was only proper that the Central Government should be able and authorised to repre sent the victims.
In such a situation, there will be no scope of the violation of the principles of natural justice.
The doctrine of necessity would be applicable in a situation of this nature.
The doctrine has been elaborated, in Hals bury 's Laws of England, 4th Edition, p, 89, paragraph 73, where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification, they might be authorised and obliged to hear that matter, by virtue of the operation of the common law doctrine of necessity,, An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribu nal can be constituted.
In the circumstances of the case, as mentioned hereinbefore, the Government of India is only capable to represent the victims as a party.
The adjudica tion, however, of the claims would be done by the Court.
In those circumstances, we are unable to accept the challenge on the ground of the violation of principles of natural justice on this score.
The learned Attorney General, howev er, sought to advance, as we have indicated before, his contention on the ground of de facto validity.
He referred to certain decisions.
We are of the opinion that this prin ciple will not be applicable.
We are also not impressed by the plea of the doctrine of bona fide representation of the interests of victims in all these proceedings.
We are of the opinion that the doctrine of bonafide representation would not be quite relevant and as 691 such the decisions cited by the learned Attorney General need not be considered.
There is, however, one other aspect of the matter which requires consideration.
The victims can be divested of their rights i.e. these can be taken away from them provided those rights of the victims are ensured to be established and agitated by the Central Govt.
following the procedure which would be just, fair and reasonable.
Civil Procedure Code is the guide which guides civil proceedings in this country and in other countries procedure akin to Civil Procedure Code.
Hence, these have been recognised and ac cepted as being in consonance with the fairness of the proceedings and in conformity with the principles of natural justice.
Therefore, the procedure envisaged under the Act has to be judged whether it is so consistent.
The Act, as indicated before.
has provided the procedure under sections 3 and 4.
Section 11 provides that the provisions of the Act and of any Scheme flamed thereunder shall have effect not withstanding anything inconsistent therewith contained in any enactment other than the Act or any instrument having effect by virtue of any enactment other than the Act.
Hence, if anything is inconsistent with the Act for the time being, it will not have force and the Act will override those provisions to the extent it does.
The Act has not specifi cally contemplated any procedure to be followed in the action to be taken pursuant to the powers conferred under section 3 except to the extent indicated in section 4 of the Act.
Section 5, however, authorises the Central Government to have the powers of a civil court for the purpose of discharging the functions pursuant to the authority vested under sections 3 and 4 of the Act.
There is no question of Central Government acting as a court in respect of the claims which it should enforce for or on behalf or instead of the victims of the Bhopal gas leak disaster.
In this connection, it is necessary to note that it was submitted that the Act, so far as it deals with the claims of the victims, should be read in conformity with Civil Procedure Code and/or with the principles of natural justice; and unless the provisions of/the Act are so read it would be violative of Articles 14 and 21 of the Constitution in the sense that there will be deprivation of rights to/fife and liberty without following a procedure which is just, fair and reasonable.
That is the main submission and contention of the different counsel for the victims who have appeared.
The different view points from which this contention has been canvassed have been noted before.
On the other hand, on behalf of the Government, the learned Attorney General has canvassed before us that there were sufficient safeguards consistent with the principles of natural justice within this Act and beyond what has been provided for 692 in a situation for which the Act was enacted, nothing more could be provided and further reading down the provisions of the Act in the manner suggested would defeat the purpose of the Act.
The aforesaid section 3 provides for the substitu tion of the Central Government with the ' right to represent and act in place of (whether within or outside India) every person who has made, or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the con stitutional provisions, no question of giving a hearing to the parties for taking over these fights by the State arises.
For legislation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature, which indeed the present Act is within the competence of the Parliament.
We are in agreement with the submission of the learned Attorney General that section 3 makes the Central Government the dominus litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
The next aspect is that section 4 of the Act, which, according to the learned Attorney General gives limited rights to the victims in the sense that it obliges the Central Government to have due regard to any matters which such person may require to be urged with respect to his claim and shall, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim".
Therefore, it obliges the Central Government to have 'due regard ' to any matters, and it was urged on behalf of the victims that this should be read in order to make the provisions constitutionally valid as providing that the victims will have a say in the conduct of the proceedings and as such must have an opportunity of knowing what is happening either by instructing or giving Opinions to the Central Government and/or providing for such directions as to settlement and other matters.
In other words, it was contended on behalf of the victims that the victims should be given notice of the proceedings and there by an opportunity, if they so wanted, to advance their view: and that to make the provisions of section 4 meaningful and effective unless notice was given to the victim, disabled as he is, the assumption upon which the Act has been enacted, could not come and make suggestion in the proceedings.
If the victims are not informed and given no opportunity, the purpose of section 4 cannot be attained.
693 108.
On the other hand, the learned Attorney General suggested that section 4 has been complied with, and contended that the victims had notice of the proceedings.
They had knowledge of the suit in America, and of the order passed by Judge Keenan.
The private plaintiffs who had gone to America were represented by foreign contingency lawyers who knew fully well what they were doing and they had also joined the said suit along with the Government of India.
Learned Attor ney General submitted that section 4 of the Act clearly.enabled the victims to exercise their right of participation in the proceedings.
According to him, there was exclusion of vic tims from the process of adjudication but a limited partici pation was provided and beyond that participation no further participation was warranted and no further notice was just fied either by the provisions of the Act as read with the constitutional requirements or under the general principles of natural justice.
He submitted that the principles of natural justice cannot be put into strait jacket and their application would depend upon the particular facts and the circumstances of a situation.
According to the learned Attorney General, in the instant case, the legislature had formulated the area where natural justice could be applied, and upto what area or stage there would be association of the victims with the suit, beyond that no further applica tion of any principle of natural justice was contemplated.
The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
See in this connection, the observations of this Court in Maneka Gandhi 's case (supra) and Olga Tellis 's case (supra).
Some of these aspects were noticed in the decision of this Court in Swadeshi Cotton Mills vs Union of India (supra).
That was a decision which dealt with the question of taking over of the industries under the Industries (Development and Regula tion) Act, 1951.
The question that arose was whether it was necessary to observe the rules of natural justice before issuing a notification under section 18A(1) of the Act.
It was held by the majority of Judges that in the facts of that case there had been non compliance with the implied require ment of the audi alteram partem rule of natural justice at the pre decisional stage.
The order in that case could be struck down as invalid on that score but the court found that in view of the concession a heating would be afforded to the company, the case was remitted 694 to the Central Government to give a full, fair and effective hearing.
It was held that the phrase 'natural justice ' is not capable of static and precise definition.
It could not be imprisoned in the straight jacket or a cast iron formula.
Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
This Court reiterated that audi ateram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application seems to be that where a statute does not in terms exclude this rule of prior hearing but contemplates a post decisional hearing amounting to a full review of the original order on merits then such a statute would be con strued as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
The principles of natural justice have been exam ined by this Court in Union of India & Anr.
vs Tulsi Ram Patel & Ors., (supra).
It was reiterated, that the princi ples of natural justice are not the creation of Article 14 of the Constitution.
article 14 is not the begetter of the principles of natural justice but their constitutional guardian.
The principles of natural justice consist, inter alia, of the requirement that no man should be condemned unheard.
If, however, a legislation or a Statute expressly or by necessary implication excludes the application of any particular principle of natural justice then it requires close Scrutiny of the Court.
It has been canvassed on behalf of the victims that the Code of Civil Procedure is an instant example of what is a just, fair and reasonable procedure, at least the princi ples embodied therein and the Act would be unreasonable if there is exclusion of the victims to vindicate properly their views and rights.
This exclusion may amount to denial of justice.
In any case, it has been suggested and in our opinion, there is good deal of force in this contention, that if a part of the claim, for good reasons or bad, is sought to be compromised or adjusted without at least con sidering the views of the victims that would be unreasonable deprivation of the rights of the victims.
After all, it has to be borne in mind that injustice consists in the sense in the minds of the people affected by any act or inaction a feeling that their grievances.
views or claims have gone 'unheeded or not considered.
Such a 695 feeling is in itself an injustice or a wrong.
The law must,be so construed and implemented that such a feeling does not generate among the people for whose benefit the law is made.
Right to a hearing or representation before enter ing into a compromise seems to be embodied in the due proc ess of law understood in the sense the term has been used in the constitutional jargon of this country though perhaps not originally intended.
In this connection, reference may be made to the decision of this Court in Sangram Singh vs Election Tribunal, Kotah; , The Representation of the People Act, 1951 contains section 90 and the proce dure of Election Tribunals under the Act was governed by the said provision.
Sub section (2) of section 90 provides that "Subject to the provisions of this Act and of any rules made thereunder, every election petition shall be tried by the Tribunal, as nearly as may be, in accordance with the proce dure applicable under the Code of Civil Procedure, 1908 to the trial of suits".
Justice Bose speaking for the court said that it is procedure, something designed to facilitate justice and further its ends, and cannot be considered as a penal enactment for punishment or penalties; not a thing designed to trip people up rather then help them.
It was reiterated that our laws of procedure are grounded on the principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their ab sence and that they should not be precluded from participat ing in them.
Of course, there may be exceptions and where they are clearly defined these must be given effect to.
But taking by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasona bly possible, in the light of that principle.
At page 9 of the report, Justice Bose observed as under: "But that a law of natural justice exists in the sense that a party must be heard in a Court of laW, or at any rate be afforded an opportunity to appear and defend himself, unless there is express provision to the contrary, is, we think, beyond dispute.
See the observations of the Privy Council in Balakrishna Udayar vs Vasudeva Ayyar, (ILR , 800) and especially in T.M. Barter vs African Products Ltd., (AIR where Lord Buckmaster said "no forms or proce dure should ever be permitted to exclude the presentation of a litigant 's defence".
Also Hari Vishnu 's case which we have just quoted.
In our opinion, Wallace J. was right in Venka tasubbiah vs 696 Lakshminarasimham, (AIR 1925 Mad. 1274) in holding that "One cardinal principle to be observed in trials by a Court obviously is that a party has a right to appear and plead his cause on all occasions when that cause comes on for hearing", and that "It follows that a party should not be deprived of that right and in fact the Court has no option to refuse that right, unless the Code of Civil Procedure deprives him of it".
All civilised countries accept the right to be heard as part of the due process of law where questions affecting their rights, privileges or claims are considered or adjudicated.
In S.L. Kapoor vs Jagmohan & Ors., ; at 765, Chinnappa Reddy, J. speaking for this Court observed that the concept that justice must not only be done but must manifestly be seen to be done, is basic to our system.
It has been reiterated that the principles of natural justice know of no exclusionary rule dependent on whether it would have made any difference if natural justice had been ob served.
The non observance of natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary and it has been said that it will come from a person who has denied justice that the person who has been denied justice, is not prejudiced.
Principles of natural justice must, therefore, be followed.
That is the normal requirement: 114.
In view of the principles settled by this Court and accepted all over the world, we are of the opinion that in case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportunity should be given, would depend upon the particular situation.
Fair procedure should be followed in a representative mass tort action.
There are instances and some of these were also placed before us during the hearing of these matters indi cating how the courts regulate giving of the notice in respect of a mass action where large number of people 's views have to be ascertained.
Such procedure should be evolved by the court when faced with such a situation.
The Act does not expressly exclude the application of the 697 Code of Civil Procedure.
Section 11 of the Act provides the overriding effect indicating that anything inconsistent with the provisions of the Act in other law including the Civil Procedure Code should be ignored and the Act should prevail.
Our attention was drawn to the provisions of Order 1 Rule 8(4) of the Code.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Govt. has replaced and divested the victims.
Learned Attorney General submitted that as the provisions of the Code stood before 1976 Amendment, the High Courts had taken the view that hearing of the parties repre sented in the suit, was not necessary, before compromise.
Further reference was made to proviso to Order XXIII Rule 1.
As in this case there is no question, in our opinion, of abandonment as such of the suit or part of the suit, the provisions of this Rule would also not strictly apply.
However, Order XXIII Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement or compromise in a representative suit shall be entered into without the leave of the court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit, again, has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions of this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
In this case, indubitably the victims would be bound by the settlement though not named in the suit.
This is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 3B of Order XXIII of the Code.
If the prin ciples of this rule are the principles of natural justice then we are of the opinion that the principles behind it would be applicable; and also that section 4 should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome", as canvassed by the learned Attorney General.
In our opinion, the constitutional requirements, the language of the Section, the purpose of the Act and the principles of natural justice lead us to this interpretation of Section 4 of the Act that in case of a proposed or con templated settlement, notice should be given to the victims who are affected or whose rights are to be affected to ascertain their views.
Section 4 is significant.
It enjoins the Central 698 Govt.
only to have "due regard to any matters which such person may require to be urged".
So, the obligation is on the Central Govt.
in the situation contemplated by Section 4 to have due regard to the views of the victims and that obligation cannot be discharged by the Central Govt.
unless the victims are told that a settlement is proposed, intended or contemplated.
It is not necessary that such views would require consent of all the victims.
The Central Govt.
as the representative of the victims must have the views of the victims and place such views before the court in such manner it considers necessary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an important stage in the proceedings, opportuni ties must be given to the victims.
Individual notices may not be necessary.
The Court can, and in our opinion, should in such situation formulate modalities of giving notice and public notice can also be given inviting views of the vic tims by the help of mass media.
Our attention was drawn to similar situations in other lands , where in mass disaster actions of the present type or mass calamity actions affecting large number of people, notices have been given in different forms and it may be possible to invite the views of the victims by announcement in the media, Press, Radro, and TV etc.
intimating the victims that a certain settlement is proposed or contemplat ed and inviting views of the victims within a stipulated period.
And having regard to the views, the Central Govt. may proceed with the settlement of the action.
Consent of all is not a pre condition as we read the Act under Section 4.
Hence, the difficulties suggested by the learned Attorney General in having the consent of all and unanimity, do not really arise and should not deter us from construing the section as we have.
The next aspect of the matter is, whether in the aforesaid light Section 4 has been complied with.
The fact that there was no Learned Attorney General, however, sought to canvas the view that the victims had notice and some of them had participat ed in the proceedings.
We are, however, unable to accept the position that the victims had notice of the nature contem plated under the Act upon the underling principle of Order XXIII Rule 3B of the Code.
It is not enough to say that the victims must keep vigil and watch the proceeding.
One as sumption under which the Act is justified is that the vic tims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable 699 and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter, in our opinion, notice was necessary.
The victims at large did not have the notice.
The question, however, is that the settlement had been arrived at after great deal of efforts to give immedi ate relief to the victims.
We have noticed the order dated 4th May, 1989 passed by this Court indicating the reasons which impelled the Court to pass the orders on 14/15th February, 1989 in terms and manner as it did.
It has been urged before us on behalf of some of the victims that jus tice has not been done to their views and claims in respect of the damages suffered by them.
It appears to us by reading the reasons given by this Court on 4th May, 1989 that jus tice perhaps has been done but the question is, has justice appeared to have been done and more precisely, the question before this Court is: does the Act envisage a procedure or contemplate a procedure which ensures not only that justice is done but justice appears to have been done.
If the proce dure does not ensure that justice appears to have been done, is it valid? Therefore, in our opinion, in the background of this question we must hold that Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims; we need not now spell out the actual notice and the manner of its giving to be consistent with the mandate and purpose of section 4 of the Act.
This Court in its order dated 4th May, 1989 had stated that in passing orders on 14th/15th February, 1989, this Court was impelled by the necessity of urgent relief to the victims rather than to depend upon the uncertain promise of law.
The Act, as we have construed, requires notice to be given in what form and in what manner, it need not be spelled out, before entering into any settlement of the type with which we are concerned.
It further appears that that type of notice which is required to be given had not been given.
The question, therefore, is what is to be done and what is the consequence? The Act would be bad if it is not construed in the light that notice before any settlement under section 4 of the Act was required to be given.
Then arises the question of consequences of not giving the notice.
In this adjudication, we are not strictly concerned with the validity or otherwise of the settlement, as we have indicat ed hereinbefore.
But constitutional adjudication cannot be divorced from the reality of a situation, or the impact of an adjudication.
Constitutional deductions are never made in the vacuum.
These deal with life 's problems in the reality of a given situation.
And no constitutional adjudication is also possible unless 700 one is aware of the consequences of such an adjudication.
One hesitates in matters of this type where large conse quences follow one way or the other to put as under what others have put together.
It is well to remember, as did Justice Holmes, that time has upset many fighting faiths and one must always wagar one 's salvation upon some prophecy based upon imperfect knowledge.
Our knowledge changes; our perception of truth also changes.
It is true that notice was required to be given and notice has not been given.
The notice which we have contemplated is a notice before the settlement or what is known in legal terminology as 'pre decisional notice '.
But having regard to the urgency of the situation and having regard to the need for the victims for relief and help and having regard to the fact that so much effort has gone in finding a basis for the settlement, we, at one point of time, thought that a post decisional hearing in the facts and circumstances of this case might be consid ered to be sufficient compliance with the requirements of principles of natural justice as embodied under section 4 of the Act.
The reasons that impelled this Court to pass the orders of 14th/15th February, 1989 are significant and compelling.
If notice was given, then what would have happened? It has been suggested on behalf of the victims by counsel that if the victims had been given an opportunity to be heard, then they would have perhaps pointed out, inter alia, that the amount agreed to be paid through the settlement was hope lessly inadequate.
We have noted the evidence available to this Court which this Court has recorded in its order dated 4th May, 1989 to be the basis for the figure at which the settlement was arrived at.
It is further suggested that if an opportunity had been given before the settlement, then the victims would have perhaps again pointed out that crimi nal liability could not be absolved in the manner in which this Court has done on the 14th/l5th February, 1989.
It was then contended that the Central Government was itself sued as a joint tort feasor.
The Central Government would still be liable to be proceeded in respect of any liability to the victims if such a liability is established; that liability is in no way abridged or affected by the Act or the settle ment entered into.
It was submitted on behalf of the victims that if an opportunity had been given, they would have perhaps pointed out that the suit against the Central Gov ernment, Government of Madhya Pradesh and UCIL could not have been settled by the compromise.
It is further suggested that if given an opportunity, it would have been pointed out that the UCIL should have also been sued.
One of the impor tant requirements of justice is that people affected by an action or inaction should have opportunity to have their say.
That opportunity the victims have got when these appli cations were heard and they were heard after utmost publici ty and they would have further 701 opportunity when review application against the settlement would be heard.
On behalf of the victims, it was suggested that the basis of damages in view of the observations made by this Court in M.C. Mehta 's case (supra) against the victims of UCC or UCIL would be much more than normal damages suffered in similar case against any other company or party which is financially not so solvent or capable.
It was urged that it is time in order to make damages deterrent the damages must be computed on the basis of the capacity of a delinquent made liable to pay such damages and on the monitory capacity of the delinquent the quantum of the damages awarded would vary and not on the basis of actual consequences suffered by the victims.
This is an uncertain promise of law.
On the basis of evidence available and on the basis of the princi ples so far established, it is difficult to foresee any reasonable possibility of acceptance of this yardstick.
And even if it is accepted, there are numerous difficulties of getting that view accepted internationally as a just basis in accordance with law.
These, however, are within the realm of possibility.
It was contended further by Shri Garg, Shri Shanti Bhushan and Ms. Jaising that all the further particulars upon which the settlement had been entered into should have been given in the ' notice which was required to be given before a settlement was sanctified or accepted.
We are unable to accept this position.
It is not necessary that all other particulars for the basis of the proposed settlement should be disclosed in a suit of this nature before the final decision.
Whatever data was already there have been disclosed, that, in our opinion, would have been sufficient for the victims to be able to give their views, if they want to.
Disclosure of further particulars are not warranted by the requirement of principles of natural justice.
Indeed, such disclosure in this case before finality might jeopar dise luther action, if any, necessary so consistent with justice of the case.
So on the materials available, the victims would have to express their views.
The victims have not been able to show at all any other point or material which would go to impeach the validity of the settlement.
Therefore, in our opinion, though settlement without notice is not quite proper, on the materials so far available, we are of the opinion that justice has been done to the victims but jus tice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, we are also of the opinion that the setting aside of the settlement on this ground in view of the facts 702 and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice, was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
We are also conscious that justice is a psycho logical yearning, in which men seek acceptance of their view point by having an opportunity of vindication of their view point before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet, in the par ticular situations, one has to bear in mind how an infrac tion of that should be sought to be removed is accordance with justice.
In the facts and the circumstances of this case where sufficient opportunity is available when review application is heard on notice, as directed by Court, no further opportunity is necessary and it cannot be said that injustice has been done.
"To do a great right" after all, it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
Though entering into a settlement without the required notice is wrong, in the facts and the circum stances of this case, therefore, we are of the opinion, to direct that notice should be given now, would not result in dain justice in the situation.
In the premises, no further consequential order is necessary by this Court.
Had it been necessary for this Bench to have passed such a consequential order, we would not have passed any such consequential order in respect of the same.
The sections and the scheme dealing with the deter mination of damages and distribution of the amount have also been assailed as indicated before.
Our attention was drawn to the provisions of the Act dealing with the payment of compensation and the scheme framed therefore.
It was submit ted that section 6 of the Act enjoins appointment by the Central Government of an officer known as the Commissioner for the welfare of the victims.
It was submitted that this does not give sufficient judicial authority to the officer and would be really leaving the adjudication under the scheme by an officer of the executive nature.
Learned Attor ney General has, however, submitted that for disbursement of the compensation contemplated under the Act or under the orders of this Court, a notification would be issued under section 6(3) of the Act authorising the Commissioner or other officers to exercise all or any of the powers which the Central Government may exercise under section 6 to enable the victims to place before the Commissioner or Deputy Commissioner any additional evidence that they would like to adduce.
We direct so, and such appropriate notifica 703 tion be issued.
We further direct that in the scheme of categorisation to be done by the Deputy Commissioner should be appealable to an appropriate judicial authority and the Scheme should be modified accordingly.
We reiterate that the basis of categorisation and the actual categorisation should be justifiable and judicially reviewable the provisions in the Act and the Scheme should be so read.
There were large number of submissions made on behalf of the victims about amending the scheme.
Apart from and to the extent indicated above, in our opinion, it would be unsafe to tinker with the scheme piecemeal.
The scheme is an integrated whole and it would not be proper to amend it piecemeal.
We, however, make it clear that in respect of categorisation and claim, the authorites must act on principles of natural justice and act quasi judicially.
As mentioned hereinbefore, good deal of arguments were advanced before us as to whether the clause in the settlement that criminal proceedings would not be proceeded with and the same will remain quashed is valid or invalid.
We have held that these are not part of the proceedings under the Act.
So the orders on this aspect in the order of 14th/15th February, 1989 are not orders under the Act.
Therefore, on the question of the validity of the Act, this aspect does not arise whether the settlement of criminal proceedings or quashing the criminal proceedings could be a valid consideration for settlement or whether if it was such a consideration or not is a matter which the court reviewing the settlement has to decide.
In the premise, we hold that the Act is constitu tionally valid in the manner we read it.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained.
from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceedings in respect thereof continue the Central Government must pay interim compensation or maintenance for the victims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of this case, no useful purpose would be served by giving a post decisional hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the set tlement and further having regard to the fact that the victims had their say or on 704 their behalf their views had been agitated in these proceed ings and will have further opportunity in the pending review proceedings.
No further order on this aspect is necessary.
The sections dealing with the payment of compensation and categorisation should be implemented in the manner indicated before.
The Act was conceived on the noble promise of giving relief and succour to the dumb, pale, meek and impoverished victims of a tragic industrial gas leak disas ter, a concomitant evil in this industrial age of technolog ical advancement and development.
The Act had kindled high hopes in the hearts of the.
weak and worn, wary and forlorn.
The Act generated hope of humanity.
The implementation of the Act must be with justice.
Justice perhaps has been done to the victims situated as they were, but it is also true that justice has not appeared to have been done.
That is a great infirmity.
That is due partly to the fact that proce dure was not strictly followed as we have understood it and also partly because of the atmosphere that was created in the country, attempts were made to shake the confidence of the people in the judicial process and also to undermine the credibility of this Court.
This was unfortunate.
This was perhaps due to misinformed public opinion and also due to the fact that victims were not initially taken into confi dence in reaching the settlement.
This is a factor which emphasises the need for adherence to the principles of natural justice.
The credibility of judiciary is as impor tant as the alleviation of the suffering of the victims, great as these were.
We hope these adjudications will re store that credibility.
Principles of natural justice are integrally embedded in our constitutional framework and their pristine glory and primacy cannot and should not be allowed to be submerged by the exigencies of particular situations or cases.
This Court must always assert primacy of adherence to the principles of natural justice in all adjudications.
But at the same time, these must be applied in a particular manner in particular cases having regard to the particular circumstances.
It is, therefore, necessary to reiterate that the promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme as indicated above.
That would be a redemption to a certain extent.
It will also be necessary to reiterate that attempts should be made to formulate the principles of law guiding the Government and the authorities to permit carry ing on of trade dealing with materials and things which have dengerous consequences within sufficient specific safeguards especially in case of multinational corporations trading in India.
An awareness on these lines has dawned.
Let 705 action follow that awareness.
It is also necessary to reit erate that the law relating to damages and payment of inter im damages or compensation to the victims of this nature should be seriously and scientifically examined by the appropriate agencies.
The Bhopal Gas Leak disaster and its aftermath of that emphasise the need for laying down certain norms and standards the Government to follow before granting permis sions or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment should, therefore, examine or have the problem examined by an expert committee as to what should be the conditions on which future licences and/or permission for running industries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permissions, creation of a fund in anticipation by the industries to be available for payment of damages out of the said found in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said damages by procedure sepa rately evolved for computation and payment of damages with out exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrent or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
This case has taken some time.
It was argued exten sively.
We are grateful to counsel who have assisted in all these matters.
We have reflected.
We have taken some time in pronouncing our decision.
We wanted time to lapse so that the heat of the moment may calm down and proper atmosphere restored.
Justice, it has been said, is the constant and perpetual disposition to render every man his due.
But what 706 is a man 's due in a particular situation and in a particular circumstances is a matter for appraisement and adjustment.
It has been said that justice is balancing.
The balances have always been the symbol of even handed justice.
But as said Lord Denning in Jones vs National Coal Board Ltd., ; , at 64 let the advocates one after the other put the weights into the scales the 'nicely calculated less or more ' but the judge at the end decides which way the balance tilts, be it ever so slightly.
This is so in every case and every situation.
The applications are disposed of in the manner and with the direction, we have indicated above.
SINGH, J. 1 have gone through the proposed judgment of my learned brother, Sabyasachi Mukharji, CJI.
I agree with the same but I consider it necessary to express my opinion on certain aspects.
Five years ago between the night of December 2 3, 1984 one of the most tragic industrial disasters in the recorded history of mankind occurred in the city of Bhopal, in the State of Madhya Pradesh, as a result of which several per sons died and thousands were disabled and physically inca pacitated for life.
The ecology in and around Bhopal was adversely affected and air, water and the atmosphere waspol luted, its full extent has yet to be determined.
UnionCar bide India Limited (UCIL) a subsidiary of Union Carbide Corporation (a Transnational Corporation of United States) has been manufacturing pesticides at its plant located in the city of Bhopal.
In the process of manufacture of pesti cide the UCIL had stored stock of Methyl Isocyanate commonly known as MlC a highly toxic gas.
On the night of the trage dy, the MIC leaked from the plant in substantial quantity causing death and misery to the people working in the plant and those residing around it.
The unprecedented catastrophe demonstrated the dangers inherent in the production of haz ardous chemicals even though for the purpose of industrial development.
A number of civil suits for damages against the UCC were filed in the United States of America and also in this Country.
The cases filed in USA were referred back to the Indian courts by Judge Keenan details of which are contained in the judgment of my learned brother Mukharji, CJI.
Since those who suffered in the catastrophe were mostly poor, ignorant, illiterate and ill equipped to pursue their claims for damages either before the courts in USA or in Indian courts, the Parliament enacted the (hereinafter re ferred to as 'the Act ') conferring power on the Union of India to take over the conduct of litigation in this regard in place of the 707 individual claimants.
The facts and circumstances which led to the settlement of the claims before this Court have already been stated in detail in the judgment of Mukharji, CJI, and therefore, I need not refer to those facts and circumstances.
The constitutional validity of the Act has been assailed before us in the present petitions.
If the Act is declared unconstitutional, the settlement which was recorded in this Court, under which the UCC has already deposited a sum of Rs.750 crores for meeting the claims of Bhopal Gas victims, would fall and the amount of money which is already in deposit with the Registry of this Court would not be available for relief to the victims.
Long and de tailed arguments were advanced before us for a number of days and on an anxious consideration and having regard to the legal and constitutional aspects and especially the need for immediate help and relief to the victims of the gas disaster, which is already delayed, we have upheld the constitutional validity of the Act.
Mukharji, CJI has ren dered a detailed and elaborate judgment with which I re spectfully agree.
However, I consider it necessary to say few words with regard to the steps which should be taken by the Executive and the Legislature to prevent such tragedy in future and to avoid the prolonged misery of victims of in industrial disaster.
We are a developing country, our national resources are to be developed in the field of science, technology, indus try and agriculture.
The need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surrounding areas.
Though working of such factories and plants is regu lated by a number of laws of our country, i.e. the Factories Act, Industrial Development and Regulation Act and Workmen 's Compensation Act etc.
there is no special legislation pro viding for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands to day, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well as the liability of the enterprise has been bound by the shackles of conservative principles laid down by the House of Lords in Ryland vs Herchief, [1868] LR 3 HL page 330.
The principles laid therein made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of the enterprise was proved.
This continued to be the position of law, till a Constitution Bench of this Court in M.C. Mehta 708 vs Union of India, , commonly known as Sriram Oleum Gas Leak case evolved principles and laid down new norms to deal adequately with the new problems arising in a highly industrialised economy.
This Court made judicial innovation in laying down principles with regard to liabili ty of enterprises carrying hazardous or inherently dangerous activities departing from the rule laid down in Ryland vs Fletcher.
The Court held as under: "We are of the view that an enterprise which is engaged in a hazardous or inherently dan gerous industry which poses a potential threat to the" health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non delegiable duty to the community to ensure that no harm results to any one on account of hazardous or inherently dangerous nature of the activity which it has undertaken.
The enterprise must be held to be under an obliga tion to provide that the hazardous or inher ently dangerous activity in which it is en gaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enter prise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.
Since the persons harmed on account of the hazardous or inher ently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm the enterprise must be held strictly liable for causing such harm as a part of the social cost of carrying on the hazardous or inherently dangerous activity.
If the enterprise is permitted to carry on an hazardous or inher ently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activi ty as an appropriate item of its overheads.
Such hazardous or inherently dangerous activi ty for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherent ly dangerous activity regardless of whether it is carried on carefully or not.
This 709 principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards.
We would therefore hold that where an enterprise is engaged in a hazardous or inher ently dangerous activity and harm results to anyone on account of an accident in the opera tion of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liabili ty is not subject to any of the exceptions which operate vis a vis the tortious principle of strict liability under the rule in Rylands vs Fletcher.
" The law so laid down made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazardous or inherently dangerous activities.
In the instant cases there is no dispute that UCIL a subsidiary of UCC was carrying on activity of manufacturing pesticide and in that process it had stored MIC a highly toxic and dangerous gas which leaked causing vast damage not only to human life but also to the flora and fauna and ecology in and around Bhopal.
In view of this Court 's deci sion in M.C. Mehta 's case there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
While entering into the settlement the UCC has accepted its li ability and for that reason it has deposited a sum of Rs.750 crores in this Court.
The inadequacy of the amount of com pensation under the settlement was assailed by the counsel for the petitioners but it is not necessary for us to ex press any opinion on that question as review petitions are pending before another Constitution Bench and more so as in the present cases we are concerned only with the constitu tional validity of the Act.
The Bhopal Gas tragedy has raised several important questions regarding the functioning of multi nationals in third world countries.
After the Second world war colonial rule came to end in several parts of the globe, as a number of natives secured independence from foreign rule.
The political domination was over but the newly born nations were beset with various problems on account of lack of finances and development.
A number of multi nationals and transnational corporations offered their services to the under developed and developing countries to provide finances and technical know how by 710 setting up their own industries in those countries on their own terms that brought problems with regard to the control over the functioning of the transnational corporations.
Multi national companies in many cases exploited the under developed nations and in some cases they influenced politi cal and economic policies of host countries which subverted the sovereignty of those countries.
There has been com plaints against the multi nationals for adopting unfair and corrupt means to advance their interests in the host coun tries.
Since this was a worldwide phenomena the United Nations took up the matter for consideration.
The Economic and Social Council of the United Nations established a Commission on Transnational Corporations to conduct research on various political, economic and social aspects relating to transnational corporations.
On a careful and detailed study the Commission submitted its Report in 1985 for evolv ing a Code of Conduct for Transnational Corporations.
The Code was adopted in 1986 to which large number of countries of the world are signatories.
Although it has not been fully finalised as yet, the Code presents a comprehensive instru ment formulating the principles of Code of Conduct for transnational corporations carrying on their enterprises in under developed and developing countries.
The Code contains provisions regarding ownership and control designed to strike balance between the competing interests of the Trans national Corporation and the host countries.
It extensively deals with the political, economic, financial, social and legal questions.
The Code provides for disclosure of infor mation to the host countries and it also provides guidelines for nationalisation and compensation, obligations to inter national law and jurisdiction of courts.
The Code lays down provisions for settlement of disputes between the host States and an affiliate of a Transnational Corporation.
It suggests that such disputes should be submitted to the national courts or authorities of host countries unless amicably settled between the parties.
It provides for the choice of law and means for dispute settlement arising out of contracts.
The Code has also laid down guidelines for the determination of settlement of disputes arising out of accident and disaster and also for liability of Transnation al Corporations and the jurisdiction of the courts.
The Code is binding on the countries which formally accept it.
It was stated before us that India has accepted the Code.
If that be so, it is necessary that the Government should take effective measures to translate the provisions of the Code into specific actions and policies backed by appropriate legislation and enforcing machinery to prevent any accident or disaster and to secure the welfare of the victims of any industrial disaster.
In the context of our national dimensions of human rights, right 711 to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 5l(g), it is the duty of the State to take effective steps to protect the guaranteed constitutional rights.
These rights must be integrated and illumined by the evolving international dimensions and standards, having regard to our sovereignty, as highlighted by Clauses 9 and 13 of U.N. Code of conduct on Transnational Corporations.
The evolving standards of international obligations need to be respected, maintaining dignity and sovereignty of our people, the State must take effective steps to safeguard the constitutional rights of citizens by enacting laws.
The laws so made may provide for conditions for granting licence to Transnational Corpora tions, prescribing norms and standards for running indus tries on Indian soil ensuring the constitutional rights of our people relating to life, liberty, as well as safety to environment and ecology to enable the people to lead a healthy and clean life.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporation should also be made liable for any damage caused to the human being or ecology.
The law must require transnational corporations to agree to pay such damages as may be determined.
by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
Under the existing civil law damages are determined by the Civil Courts, after a long drawn litigation, which destroys the very purpose of awarding damages.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims we would suggest that the law made by the Parliament should provide for constitution of tribunals regulated by special procedure for determining compensation to victims of industrial disaster or accident, appeal against which may lie to this Court on limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
There is yet another aspect which needs consideration by the Government and the Parliament.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disas ter Fund", contributions to which may be made by, the Gov ernment, the industries whether they are transnational corporations or domestic undertakings public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The Fund should be permanent in nature, so that money is 712 readily available for providing immediate effective relief to the victims.
This may avoid delay, as has happened in the instant case in providing effective relief to the victims.
The Government and the Parliament should therefore take immediate steps for enacting laws, having regard to these suggestions, consistent with the international norms and guidelines as contained in the United Nations Code of Con duct on Transnational Corporations.
With these observations, I agree with the order proposed by my learned brother, Sabyasachi Mukharji, CJI.
RANGANATHAN, J. Five years ago, this country was shaken to its core by a national catastrophe, second in magnitude and disastrous effects only to the havoc wrought by the atomic explosions in Hiroshima and Nagasaki.
Multitudes of illiterate and poverty stricken people in and around Bhopal suffered damage to life and limb due to the escape of poi sonous Methyl Isocyanate (MIC) gas from one of the storage tanks at the factory of the Union Carbide (India) Limited (UCIL) in Bhopal, a wholly owned subsidiary of the multina tional giant, the Union Carbide Corporation (UCC).
A number of civil suits claiming damages from the UCC were filed in the United States of America and similar litigation also followed in Indian courts.
Fearing the possibilities of the exploitation of the situation by vested interests, the Government of India enacted, the ( 'the ') to regulate the course of such litigation.
Briefly speaking, it empowered the Union of India to take over the conduct of all litiga tion in this regard and conduct it in place of, or in asso ciation with, the individual claimants.
It also enabled the Union to enter into a compromise with the UCC and UCIL and arrive at a settlement.
The writ petitions before us have been filed challenging the constitutional validity of this statute on the ground that the divestiture of the claimants ' individual rights to legal remedy against the multinational for the consequences of carrying on dangerous and hazardous activities on our soil violates the fundamental rights guaranteed under article 14, 19 and 21 of the Constitution.
In consequence of certain proceedings before Judge Keenan of the U.S. District Courts, the venue of the litiga tion shifted to India.
In the principal suit filed in India by the Union (Civil Suit No. 1113/86) orders were passed by the trial court in Bhopal directing the UCC to deposit Rs.370 crores (reduced to Rs.250 crores by the Madhya Pra desh High Court) as interim payment to the gas victims pending disposal of the suit.
There were appeals to this Court in which the 713 UCC contested the Court 's jurisdiction to pass an order for an interim payment in a suit for money, while the Union pleaded that a much higher interim payment should have been granted.
When the matter was being argued in this Court, a settlement was arrived at between the Union and the UCC under which a sum of Rs.750 crores has been received by the Union in full settlement of all the claims of all victims of the gas leak against the UCC.
The Union also agreed to withdraw certain prosecutions that had been initiated against the officials of the UCC and UCIL in this connec tion.
This settlement received the imprimatur of this Court in its orders dated 14th & 15th February, 1989.
It is unfortunate that, though the writ petitions before us were pending in this Court at that time, neither their contents nor the need for considering first the issue of the validity of the before thinking of a settlement in pursuance of its provisions seem to have been effectively brought to the notice of the Bench which put an end to all the litigation on this topic in terms of the settlement.
The settlement thus stood approved while the issue of validity of the under which it was effected stood undecided.
When this was brought to the notice of the above Bench, it di rected these writ petitions to be listed before a different Bench 'to avoid any possible feeling that the same Bench may be coloured in its views on the issue by reason of the approval it had given to the fait accompli viz. the settle ment.
That is now these matters came before us.
The petitioners, claiming to represent a section of the victims are, firstly, against any settlement at all being arrived at with the UCC.
According to them, it is more important to ensure by penal action that multinational corporations do not play with the lives of people in de veloping and under developed countries than to be satisfied with mere compensation for injury and that the criminal prosecutions initiated in this case should have been pur sued.
Secondly, they are of the view that the amount for which the claims have been settled is a pittance, far below the amount of damages they would have been entitled to, on the principles of strict, absolute and punitive liability enunciated by this Court in Mehta 's case [1987] 1 S.C.R. 819.
Thirdly, their grievance is that no publicity at all was given, before this court passed its order, to enable individual claimants or groups of them to put forward their suggestions or objections to the settlement proposed.
Their interests were sealed, they say, without complying with elementary principles of natural justice.
They contend that the provisions of an which has made such a settlement possible cannot be constitutionally valid.
714 The arguments before us ranged over a very wide ground, covered several issues and extended to several days.
This Bench has been placed in somewhat of a predicament as it has to pronounce on the validity of the provisions of the in the context of an implementation of its provisions in a particular manner and, though we cannot (and do not) express any views regarding the merits of the settlement, we are asked to consider whether such settlement can be consistent with a correct and proper interpretation of the tested on the touchstone of the fundamental rights guaranteed under the Constitution.
Mukharji, C.J., has outlined the issues, dealt elaborately with the contentions urged, and given expression to his conclusions in a learned, elaborate and detailed judgment which we have had the advantage of perus ing in draft.
Our learned brother K.N. Singh, J., has also highlighted certain aspects in his separate judgment.
We are, in large measure, in agreement with them, but should like to say a few words on some of the issues in this case, particularly those in regard to which our approach has been somewhat different: 1.
The issue regarding the validity of the turns principally on the construction of sections 3 and 4 of the .
We are inclined to hold that the fact that a settlement has been effected, or the circumstances in which or the amount for which the claims of the victims have been set tled, do not have a bearing on this question of interpreta tion and have to be left out of account altogether except as providing a contextual background in which the question arises.
Turning therefore to the statute and its implica tions, the position is this.
Every person who suffered as a consequence of the gas leak had a right to claim compensa tion from the persons who, according to him, were liable in law for the injury caused to him and also a fight to insti tute a suit or proceeding before any court or authority with a view to enforce his right to claim damages.
In the normal course of events, such a claimant who institute a suit or proceeding would have been at complete liberty to withdraw the said suit or proceeding or enter into any compromise he may choose in that regard.
Section 3 undoubtedly takes away this fight of the claimant altogether: (a) except to the limited extent specified in the proviso to section 3(3) and (b) subject to the provisions of section 4, for this section clearly states that it is the Central Government and the Central Government alone which has the right to represent and act in place of the claimants, whether within or outside India, for all purposes in 715 connection with the enforcement of his claims.
We may first consider how far the main provision in section 3 (leaving out of account the proviso as well as section 4) is compatible with the Constitution The first question that arises is whether the legisla ture is justified in depriving the claimants of the right and privilege of enforcing their claims and prosecuting them in such manner as they deem fit and in compulsorily inter posing or substituting the Government in their place.
We think that, to this question, there can be only one answer.
As pointed out by our learned brother, the situation was such that the victims of the tragedy needed to be protected against themselves as their adversery was a mighty multi national corporation and proceedings to a considerable extent had been initiated in a foreign country, where the conduct of the cases was entrusted to foreign lawyers under a system of litigation which is unfamiliar to us here.
In the stark reality of the situation, it cannot even be plau sibly contended that the large number of victims of the gas leak disaster should have been left to fend for itself and merely provided with some legal aid of one type or another.
It is necessary to remember that, having regard to the identity of the principal ground of claim of all the vic tims, even if a single victim was not diligent in conducting his suit or entered into a compromise or submitted to a decree judging the issues purely from his individual point of view, such a decision or decree could adversely affect the interests of the innumerable other victims as well.
In fact, it appears that a settlement between one set of claim ants and the adversary corporation was almost imminent and would perhaps have been through out for the timely interven tion of the Government of India.
The battle for the enforce ment of one 's rights was bound to be not only prolonged but also very arduous and expensive and the decision of the legislature that the fight against the adversary should be consolidated and its conduct handed over to the Government of India it may perhaps have been better if it had been handed over to an autonomous body independent of the Govern ment but, as pointed out by our learned brother, the course adopted was also not objectionable was perhaps the only decision that could have been taken in the circumstances.
This is indeed a unique situation in which the victims, in order to realise to the best advantage their rights against UCC, had to be helped out by transposing that right to be enforced by the Government.
We did not indeed understand any learned counsel before us to say that the legislature erred in entrusting the Government of India 716 with the responsibility of fighting for the victims.
The only grievance is that in the process their right to take legal proceedings should not have been completely taken away and that they should also have had the liberty of partici pating in the proceedings right through.
In fact, though the contemplates the Central Government to completely act in place of the victims, the Government of India has not in fact displaced them altogether.
In all the proceedings pending in this country, as well as those before Judge Keenan, the Government of India has conducted the proceed ings but the other victims or such of them as chose to associate themselves in these proceedings by becoming par ties were not shut out from taking part in the proceedings.
In fact, as the learned Attorney General pointed out, one of the groups of litigants did give great assistance to the trial judge at Bhopal.
But even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Central Government, had been got deleted from the array of parties in the suits and proceedings pending in this country, we do not think that the result would have been fatal to the interests of the litigants.
On the con trary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corpora tion.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same as that of, "parens patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactory 'exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litiga tion better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much determination or capability as such a litigant.
But in a case of the present type one should not be con founded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable of prosecuting such a litigation in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negligible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situa tion, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Government to shoulder the responsibility by substituting itself in place of the victims 717 for all purposes connected with the claims.
Even if the had provided for a total substitution of the Government of India in place of the victims and had completely precluded them from exercising their rights in any manner, it could perhaps have still been contended that such deprivation was necessary in larger public interest.
But the is not so draconian in its content.
Actual ly, as we have said a little earlier, the grievance of the petitioners is not so much that the Government was entrusted with the functions.
of a dominus litis in this litigation.
Their contention is that the whole object and purpose of the litigation is to promote the interests of the claimants, to enable them to fight the UCC with greater strength and determination, to help them overcome limitations of time, money and legal assistance and to realise the best compensa tion possible consistent not only with the damage suffered by them but also consistent with national honour and pres tige.
It is suggested that the power conferred on the Gov ernment should be construed as one hedged in by this domi nant object.
A divestiture of the claimant 's right in this situation would be reasonable, it is said, only if the claimant 's rights are supplemented by the Government and not supplanted by it.
Assuming the correctness of the argument, the provisions of the proviso to section 3(3) and of section 4 furnish an answer to this contention.
While the provision contained in the main part of section 3 may be sufficient to enable the Government of India to claim to represent the claimants and initiate and conduct suits or proceeding on their behalf, the locus standi of the Government of India in suits filed by other claimants before the commencement of the out side India would naturally depend upon the discretion of the court enquiring into the matter.
That is why the proviso to section 3 makes the right of the Government of India to represent and act in place of the victims in such proceed ings subject to the permission of the court or authority where the proceedings are pending.
It is of course open to such court to permit the Central Government even to displace the claimants if it is satisfied that the authority of the is sufficient to enable it to do so.
In the present case it is common ground that the proceedings before Judge Keenan were being prosecuted by the Central Government along with various individual claimants.
Not only did Judge Keenan permit the association of the Government of India in these proceedings but the Government of India did have a substan tial voice in the course of those proceedings as well.
Again section 4 mandates that, notwithstanding anything 718 contained in section 3, the Central Government, in repre senting and acting in place of any person in relation to any claim, shall have due regard to any matters which such person may require to be urged with respect to his claim.
It also stipulates that if such person so desires, the Central Government shall permit, at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
In other words, though, perhaps, strictly speaking, under section 3 the Central Government can totally exclude the victim himself or his legal practitioner from taking part in the proceedings (except in pending suits outside India), section 4 keeps the substance of the rights of the victims in tact.
It enables, and indeed obliges, the Govern ment to receive assistance from individual claimants to the extent they are able to offer the same.
If any of the vic tims or their legal advisers have any specific aspect which they would like to urge, the Central Government shall take it into account.
Again if any individual claimant at his own expense retains a legal practitioner of his own choice, such legal practitioner will have to be associated with the Government in the conduct of any suit or proceeding relating to his claim.
Sections 3 and 4 thus combine together the interests of the weak, illiterate, helpless and poor victims as well as the interests of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the claimants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would, in our opinion, therefore show that there has been no real total deprivation of the right of the claimants to enforce their claim for damages in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
The validity of the is, therefore, not liable to be challenged on this ground.
The next angle from which the validity of the provision is attacked is that the provision enabling the Government to enter into a compromise is bad.
The argument runs thus: The object of the legislation can be furthered only if it per mits the Government to prosecute the litigation more effec tively and not if it enables the Government to 719 withdraw it or enter into a compromise.
According to them, the fails the impecunious victims in this vital aspect.
The authority conferred by the on the Government to enter into a settlement or compromise, it is said, amounts to an absolute negation of the rights of the claimants to compensation and is capable of being so exercised to render such rights totally valueless, as in fact, it is said, has happened.
It appears to us that this contention proceeds on a misapprehension.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accompanied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litiga tion may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to ade quately compensate the victims either on their own ' or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in a negotiated settlement.
One notices that in most of the mass disaster cases reported, proceedings finally end in a compromise if only to avoid an indefinite prolongation of the agonies caused by such litigation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to with draw the proceedings or enter into a compromise.
Some misgivings were expressed, in the course of the hearing, of the legislative wisdom (and, hence the validity) of entrusting the carriage of these proceedings and, in particular, the power of settling it out of Court, to the Union of India.
It was contended that the union is itself a joint tort feasor (sued as such by some of the victims) with an interest (adverse to the victims) in keeping down the amount of compensation payable to the minimum so as to reduce its own liability as a joint tort feasor.
It seems to us that this contention in misconceived.
As pointed out by Mukharji, C.J., the Union of India itself is one of the entities affected by the gas leak and has a claim for com pensation from the UCC quite independent of the other vic tims.
From this point of view, it is in the same position as the other victims and, in the litigation with the UCC, it has every interest in securing the maximum amount of compen sation possible for itself and the other victims.
It is, therefore, the best agency in the circumstances that could be looked up to for fighting the UCC on its own as well as on behalf of the victims.
The suggestion that the Union is a joint tort lessor has been 720 stoutly resisted by the learned Attorney General.
But, even assuming that the Union has some liability in the matter, we fail to see how it can derive any benefit or advantage by entering into a low settlement with the UCC.
as is pointed out later in this judgment and by Mukharji, C.J., the and Scheme thereunder have provided for an objective and quasi judicial determination of the amount of damages pay able to the victims of the tragedy.
There is no basis for the fear expressed during the hearing that the officers of the Government may not be objective and may try to cut down the amounts of compensation, so as not to exceed the amount received from the UCC.
It is common ground and, indeed, the learned Attorney General fairly conceded, that the settle ment with the UCC only puts an end to the claims against the UCC and UCIL and does not in any way affect the victims ' rights, if any, to proceed against the Union, the State of Madhya Pradesh or the ministers and officers thereof, if so advised.
If the Union and these officers are joint tort lessors, as alleged, the Union will not stand to gain by allowing the claims against the UCC to be settled for a low figure.
On the contrary it will be interested in settling the claims against the UCC at as high a figure as possible so that its own liability as a joint tort feasor (if made out) can be correspondingly reduced.
We are, therefore, unable to see any vitiating element in the legislation insofar as it has entrusted the responsibility not only of carrying on but also of entering into a settlement, if thought fit.
Nor is there basis for the contention that the enables a settlement to be arrived at without a proper opportunity to the claimants to express their views on any proposals for settlement that may be mooted.
The right of the claimant under section 4 to put forward his suggestions or to be represented by a legal practitioner to put forth his own views in the conduct of the suit or other proceeding certainly extends to everything connected with the suit or other proceeding.
If, in the course of the proceedings there should arise any question of compromise or settlement, it is open to the claimants to oppose the same and to urge the Central Government to have regard to specific aspects m arriving at a settlement.
Equally it is open to any claimant to employ a legal practitioner to ventilate his opinions in regard to such proposals for settlement.
The provisions of the , read by themselves, therefore, guarantee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the .
Sections 3 and 4 of the properly read, in our opinion, completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
721 Far from abridging the rights of the claimants in any man ner, these provisions are so worded as to enable the Govern ment to prosecute the litigation with the maximum amount of resources, efficiency and competence at its command as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive rule in the litigations But then, it is contended, the victims have had no opportunity of considering the settlement proposals mooted in this case before they were approved by the Court.
This aspect is dealt with later.
One of the contentions before us was that the UCC and UCIL are accountable to the public for the damages caused by their industrial activities not only on a basis of strict liability but also on the basis that the damages to be awarded against them should include an element of punitive liability and that this has been lost sight of while approv ing of the proposed settlement.
Reference was made in this context to M.C. Mehta 's case (supra).
Whether the settlement should have taken into account this factor is, in the first place, a moot question.
Mukharji, C.J. has pointed out and we are inclined to agree that this is an "uncertain province of the law" and it is premature to say whether this yard stick has been, or will be, accepted in this country, not to speak of its international acceptance which may be necessary should occasion arise for executing a decree based on such a yardstick in another country.
Secondly, whether the settle ment took this into account and, if not, whether it is bad for not having kept this basis in view are questions that touch the merits of the settlement with which we are not concerned.
So we feel we should express no opinion here on this issue.
It is too far fetched, it seems to us, to con tend that the provisions of the permitting the Union of India to enter into a compromise should be struck down as unconstitutional because they have been construed by the Union of India as enabling it to arrive at such a settle ment.
The argument is that the confers a discretionary and enabling power in the Union to arrive at a settlement but lays down no guidelines or indications as to the stage at which, or circumstances in which, a settlement can be reached or the type of settlement that can be arrived at; the power conferred should, therefore, be struck down as unguided, arbitrary and uncanalised.
It is difficult to accept this contention.
The power to conduct a litigation, particularly in a case of this type, must, to be effective, necessarily carry with it a power to settle it at any stage.
It is impossible to provide statutorily any detailed 722 catalogue of the situations that would justify a settlement or the basis or terms on which a settlement can be arrived at.
moreover, cannot be said to have conferred any unguided or arbitrary discretion to the Union in conducting proceedings under the .
Sufficient guidelines emerge from the Statement of Objects and Reasons of the which makes it clear that the aim and purpose of the is to secure speedy and effective redress to the victims of the gas leak and that all steps taken in pursuance of the should be for the implementation of the object.
Whether this object has been achieved by a particular settlement will be a different question but it is altogether impossible to say that the itself is bad for the reason alleged.
We, therefore, think it necessary to clarify, for our part, that we are not called upon to express any view on the observa tions in Mehta 's case and should not be understood as having done so.
Shri Shanti Bhushan, who supported the Union 's stand as to the validity of the , however, made his support conditional on reading into its provisions an obligation on the part of the Union to make interim payments towards their maintenance and other needs consequent on the tragedy, until the suits filed on their behalf ultimately yield tangible results.
That a modern welfare State is under an obligation to give succour and all kinds of assistance to people in distress cannot at all be gainsaid.
In point of fact also, as pointed out by the learned Chief Justice, the provisions of the and scheme thereunder envisage interim payments to the victims; so, there is nothing objectionable in this on this aspect.
However, our learned brother has accept ed the argument addressed by Shri Shanti Bhushan which goes one step further viz. that the would be unconstitutional unless this is read as "a major inarticulate promise" under lying the .
We doubt whether this extension would be justified for the hypothesis underlying the argument is, in the words of Sri Shanti Bhushan, that had the victims been left to fend for themselves, they would have had an "immedi ate and normal right of obtaining compensation from the Union Carbide" and, as the legislation has vested their rights in this regard in the Union, the should be con strued as creating an obligation on the Central Government to provide interim relief.
Though we would emphatically reiterate that grant of interim relief to ameliorate the plight of its subjects in such a situation is a matter of imperative obligation on the part of the State and not merely 'a matter of fundamental human decency ' as Judge Keenan put it, we think that such obligation flows from its character as a welfare State and would exist irrespective of what the statute may or may not provide.
In our view the validity of the does not depend upon its 723 explicitly or implicitly providing for interim payments.
We say this for two reasons.
In the first place, it was, and perhaps still is, a moot question whether a plaintiff suing for damages in tort would be entitled to advance or interim payments in anticipation of a decree.
That was, indeed, the main point on which the interim orders in this case were challenged before this Court and, in the context of the events that took place, remains undecided.
It may be men tioned here that no decided case was brought to our notice in which interim payment was ordered pending disposal of an action in tort in this country.
May be there is a strong case for ordering interim payments in such a case but, in the absence of full and detailed consideration, it cannot be assumed that, left to themselves, the victims would have been entitled to a "normal and immediate" right to such payment.
Secondly, even assuming such right exists, all that can be said is that the State, which put itself in the place of the victims, should have raised in the suit a demand for such interim compensation which it did and that it should distribute among the victims such interim compensation as it may receive from the defendants.
To say that the would be bad if it does not provide for payment of such compensa tion by the Government irrespective of what may happen in the suit is to impose on the State an obligation higher than what flows from its being subrogated to the rights of the victims.
As we agree that the and the scheme thereunder envisage interim relief to the victims, the point is perhaps only academic.
But we felt that we should mention this as we are not in full agreement with Mukharji, C.J., on this aspect on the case.
The next important aspect on which much debate took place before us was regarding the validity of the qua the procedure envisaged by it for a compromise or settle ment.
It was argued that if the suit is considered as a representative suit no compromise or settlement would be possible without notice in some appropriate manner to all the victims of the proposed settlement and an opportunity to them to ventilate their views thereon (vide Order XXIII, r. 3B, C.P.C.).
The argument runs thus: section 4 of the either incorporates the safeguards of these provisions in which event any settlement effected without compliance with the spirit, if not the letter, of these provisions would be ultra vires the .
Or it does not, in which event, the provisions of section 4 would be bad as making possible an arbi trary deprivation of the victims ' rights being inconsistent with, and derogatory of, the basic rules established by the ordinary Law of the land viz. the Code of Civil Procedure.
We are inclined to take the view that it is not possible to bring the suits brought under the within the categories of representative action envisaged in the Code of Civil procedure.
The 724 deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The divests the individual claimants of their right to sue and vests it in the Union.
In relation to suits in India, the Union is the sole plaintiff, none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be de fined at the stage of a settlement.
The litigation is car ried on by the State in its capacity, not exactly the same as but somewhat analogous to that of a "parens patriae".
In the case of a litigation by karta of a Hindu Undivided Family or by a guardian on behalf of a ward, who is non sui juris, for example, the junior members of the family or the wards, are not to be consulted before entering into a set tlement.
In such cases, the Court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best interest of all concerned.
It is later discovered that there has been any fraud or collusion, it may be open to the junior members of the family or the wards to call the karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae" would have been at liberty to enter into such settlement as it consid ered best on its own and seek the Court 's approval there fore.
However, realising that the litigation is truly fought on behalf and for the benefit of innumerable, though not fully identified victims the has considered it necessary to assign a definite role to the individual claimants and this is spelt out in section 4.
This section directs: (i) that the union shall have due regard to any matters which such person may require to be urged with respect to his claim; and (ii) that the Union shaH, if such person so desires, permit at the expense of such person, a legal practitioner of his choice to be associated in the conduct of any suit or other proceeding relating to his claim.
This provision adequately safeguards the interests of indi vidual victims.
It enables each one of them to bring to the notice of the Union any special features or circumstances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
Again, the individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceed ings.
If the suits in this 725 case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views or any of them who chose to do so.
Advisedly, the statute has provided that though the Union of India will be the dominus litis in the suit, the interests of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indi cated above.
This provision of the statute is an adaptation of the principle of O.I.r. 8 and of Or.
XXIII r. 3 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation allowed to the victims is somewhat differently enunciated in the legislation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be fault ed, as has been pointed out earlier also, on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in the matter of settling the suit by way of compromise.
The difficulty in this case has arisen, as we see it, because of a fortuitous circumstance viz. that the talks of compromise were mooted and approved in the course of the hearing of an appeal from an order for interim payments.
Though compromise talks had been in the air right from the beginning of this episode, it is said that there was an element of surprise when they were put forward in Court in February, 1989.
This is not quite correct.
It has been pointed out that even when the issue regarding the interim relief was debated in the courts below, attempts were made to settle the whole litigation.
The claimants were aware of this and they could perhaps should have anticipated that similar attempts would be made in this Court also.
Though certain parties had been associated with the conduct of the proceedings in the trial court and the trial judge did handsomely acknowledge their contribution to the proceed ings they were apparently not alert enough to keep a watch ing brief in the Supreme Court, may be under the impression that the appeal here was concerned only with the quantum of interim relief.
One set of parties was present in the Court but, apart from praying that he should be forthwith paid a share in the amount that would be deposited in Court by the UCC in pursuance of the settlement, no attempt appears to have been made to put forward a contention that the amount of settlement was inade 726 quate or had not taken into account certain relevant consid erations.
The Union also appears to have been acting on the view that it could proceed ahead on its own both in its capacity as "parens patraie" as well as in view of the powers of attorney held by it from a very large number of the victims though the genuineness of this claim is now contested before us.
There was a day 's interval between the enunciation of the terms of the settlement and their approv al by the Court.
Perhaps the Court could have given some more publicity to the proposed settlement in the newspapers, radio and television and also permitted some time to lapse before approving it, if only to see whether there were any other points of view likely to emerge.
Basically speaking, however, the has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the developments leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
One of the points of view on which considerable emphasis was laid in the course of the arguments was that in a case of this type the offending parties should be dealt with strictly under the criminal law of the Land and that the inclusion, as part of the settlement, of a term requiring the withdrawal of the criminal prosecutions launched was totally unwarranted and vitiates the settlement.
It has been pointed out by Mukharji, C.J. , and we agree that the talks only of the civil liability of, and the proceedings against, the UCC or UCIL or others for damages caused by the gas leak.
It has nothing to say about the criminal liability of any of the parties involved.
Clearly, therefore, this part of the settlement comprises a term which is outside the purview of the .
The validity of the cannot, there fore, be impugned on the ground that it permits and should not have permitted the withdrawal of criminal proceedings against the delinquents.
Whether in arriving at the settle ment, this aspect could also have been taken into account and this term included in it, is a question concerning the validity of the settlement.
This is a question outside the terms of reference to us and we, therefore, express no opinion in regard thereto.
A question was mooted before us as to whether the actual settlement if not the statutory provision is liable to be set aside on the grounds that the principles of natu ral justice have been flagrantly 727 violated.
The merits of the settlement as such are not in issue before us and nothing we say can or should fetter the hands of the Bench hearing a review petition which has already been filed, from passing such orders thereon as it considers appropriate.
Our learned brother, however, has, while observing that the question referred to us is limited to the validity of the alone and not the settlement, incidentally discussed this aspect of the case too.
He has pointed out that justice has in fact been done and that all facts and aspects rele vant for a settlement have been considered.
He has pointed out that the grievance of the petitioners that the order of this Court did not give any basis for the settlement has since been sought to be met by the order passed on 4th May, 1989 giving detailed reasons, This shows that the Court had applied its mind fully to the terms of the settlement in the light of the data as well as all the circumstances placed before it and had been satisfied that the settlement pro posed was a fair and reasonable one that could be approved.
In actions of this type, the Court 's approval is the true safety valve to prevent unfair settlements and the fact is that the highest Court of the land has given thought to the matter and seen it fit to place its seal of approval to the settlement.
He has also pointed out that a post decisional hearing in a matter like this will not be of much avail.
He has further pointed out that a review petition has already been filed in the case and is listed for hearing.
The Court has already given an assurance in its order of May 4, 1989, that it will only be too glad to consider any aspects that may have been overlooked in considering the terms of the settlement.
Can it be said, in the circumstances, that there has been a failure of justice which compels us to set aside the settlement as totally violative of fundamental rights? Mukharji, C.J., has pointed out that the answer to this question should be in the negative.
It was urged that there is a feeling that the maxim: "Justice must not only be done but must also appear to be done" has not been fully complied with and that perhaps, if greater publicity had attended the hearing, many other facts and aspects could have been high lighted resulting in a higher settlement or no settlement at all.
That feeling can be fully ventilated and that deficien cy can be adequately repaired, it has been pointed out by Mukharji, C.J., in the hearing on the review petition pend ing before this Court.
Though we are prima facie inclined to agree with him that there are good reasons why the settle ment should not be set aside on the ground that the princi ples of natural justice have been violated, quite apart from the practical complications that may arise as the result of such an order, we would not express any final opinion on the validity of the settlement but would leave it open to be agitated, to the 728 extent permissible in law, in the review petition pending before this Court.
There is one more aspect which we may perhaps usefully refer to in this context.
The scheme of the is that on the one hand the Union of India pursues the litigiation against the UCC and the UCIL; on the other all the victims of the tragedy are expected to file their claims before the prescribed authority and have their claims for compensation determined by such authority.
Certain infirmities were pointed out on behalf of the petitioners in the statutory provisions enacted in this regard.
Our learned brother has dealt with these aspects and given appropriate directions to ensure that the claims will be gone into by a quasi judicial authority (unfettered by executive prescriptions of the amounts of compensation by categorising the nature of in juries) with an appeal to an officer who has judicial quali fications.
In this manner the scheme under the provides for a proper determination of the compensation payable to the various claimants.
Claims have already been filed and these are being scrutinised and processed.
A correct picture as to whether the amount of compensation for which the claims have ben settled is meagre, adequate or excessive will emerge only at that stage when all the claims have been processed and their aggregate is determined.
In these cir cumstances, we feel that no useful purpose will be served by a post decisional hearing on the quantum of compensation to be considered adequate for settlement.
For these reasons, it would seem more correct and proper not to disturb the orders of 14 15 February, 1989 on the ground that the rules of natural justice have not been complied with, particularly in view of the pendency of the review petition.
Before we conclude, we would like to add a few words on the state of the law of torts in this country.
Before we gained independence, on account of our close association with Great Britain, we were governed by the common law principles.
In the field of torts, under the common law of England, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis moritur cum persona, although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of the Fatal Accidents Act, 1846, popularly known as Lord Campell 's Act.
Soon thereafter the Indian Legislature enacted the Fatal acci dents Act, 1855.
This Act is fashioned on the lines of the English Act 729 of 1846.
Even though the English Act has undergone a sub stantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thousands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experience and evolve safeguards atleast for the future.
We are of the view that the time is ripe to take a fresh look at the outdated cen tury old legislation which is out of tune with modern con cepts.
While it may be a matter for scientists and technicians to find solutions to avoid such large scale disasters, the law must provide an effective and speedy remedy to the victims of such torts.
The Fatal Accidents Act, on account of its limited and restrictive application, is hardly suited to meet such a challenge.
We are, therefore, of the opinion that the old antiquated Act should be drastically amended or fresh legislation should be enacted which should, inter alia, contain appropriate provisions in regard to the fol lowing matters: (i) The payment of a fixed minimum compensa tion on a "no fault liability" basis (as under the Motor Vehicles Act), pending final adjudi cation of the claims by a prescribed forum; (ii) The creation of a special forum with specific power to grant interim relief in appropriate cases; (iii) The evolution of a procedure to be followed by such forum which will be conducive to the expeditious determination of claims and avoid the high degree of formalism that at taches to proceedings in regular courts; and (iv) A provision requiring industries and concerns engaged in hazardous activities to take out compulsory insurance against third party risks.
In addition to what we have said above, we should like to say that the suggestion made by our learned brother, K.N. Singh J., for the creation of an Industrial Disaster Fund (by whatever name called) deserves serious consideration.
We would also endorse his suggestion that the Central Govern ment will be well advised if, in future, it insists on certain safeguards before permitting a transnational company to do business in this country.
The necessity of such safe guards, atleast in the following two directions, is high lighted in the present case: 730 (a) Shri Garg has alleged that the processes in the Bhopal Gas Plant were so much shrouded in secrecy that neither the composition of the deadly gas that escaped nor the proper anti dote therefore were known to anyone in this country with the result that the steps taken to combat its effects were not only delayed but also totally inadequate and ineffective.
It is necessary that this type of situation should be avoided.
The Government should therefore insist, when granting licence to a transnational company to establish its indus try here, on a right to be informed of the nature of the processes involved so as to be able to take prompt action in the event of an accident.
(b) We have seen how the victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure (i) that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this country; (ii) that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; (iii) that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corpora tion, its affiliates and their assets without further procedural hurdles, in those other countries.
Our brother, K.N. Singh, J., has in this context dealt at some length with the United Nations Code of Conduct for multi national Corporations which awaits approval of various countries.
We hope that calamities like the one which this country has suffered will serve as catalysts to expedite the acceptance of an international code on such matters in the near future.
With these observations, we agree with the order pro posed by the learned Chief Justice.
G.N. Petitions dis posed of.
| Union Carbide (India) Ltd. (UCIL) is a subsidiary of Union Carbide Corporation (UCC), a New York Corporation.
UCIL was incorporated in India in 1954.
50.99% of its share holding was with UCC and 22% of the shares were held by Life Insurance Corporation of India and Unit Trust of India.
UCIL owned a chemical plant in Bhopal for the manufacture of pesticides using Methyl Isocyanate (MIC) a highly toxic gas.
On the night between 2nd and 3rd December, 1984, there was a massive escape of lethal gas from the MIC Storage tank at the Bhopal plant resulting in the tragic death of about 3,000 people.
Thousands of people suffered injuries.
The environment also got polluted, badly affecting the flora and the fauna.
On behalf of the victims, many suits were filed in various District Courts in the United States of America.
All such suits were consolidated by the Judicial Panel on Multi District Litigation and were assigned to the U.S. District Court, Southern District of New York and Judge Keenan was the Presiding Judge throughout.
Later, the legal battle shifted to Indian Courts, as it could not proceed in the U.S. Courts, on the ground of forum non conveniens.
599 Meanwhile, the Bhopal Gas Leak Disaster (Processing of claims) 1985 was passed by the Government of India with a view to secure that the claims arising out of or connected with the Bhopal gas leak disaster were dealt with speedily, effectively and equitably.
Union of India filed a suit for damages in the District Court of Bhopal on 5.9.86.
However, there were negotiations for a settlement; hut ultimately the settlement talks had failed.
On 17.12.1987, the District Judge ordered interim relief of Rs.350 crores.
On appeal, the High Court, on 4.4.88 modified the order of the District Judge and ordered an interim relief of Rs.250 crores.
Aggrieved, the UCC as also the Union of India filed petitions for special leave before this Court.
Leave was granted.
By its orders dated 14.2.89 and 15.2.89, this Court, on the basis of a settlement arrived at between the parties, directed UCC to pay a sum of 470 million U.S. Dollars to the Union of India in full settlement of all claims, rights and liabilities related to and arising out of the Bhopal gas disaster.
The said orders were passed keeping in view the Bhopal Gas Disaster (Processing of claims) Act, 1985.
The present Writ Petitions challenge the constitutional validity of the said Act inter alia on the grounds that the Act is violative of the fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution: that the Act is violative of the Principles of Natural Justice mainly on the ground that Union of India, being a joint tort feasor, in that it has permitted establishment of such factories with out necessary safeguards, has no locus standi to compromise on behalf of the victims; that the victims and their legal heirs were not given the opportunity of being heard, before the Act was passed; that in the guise of giving aid, the State could not destroy the rights inherent in its citizens; nor could it demand the citizens to surrender their rights to the State; that vesting of the rights in Central Govern ment was bad and unreasonable because there was conflict of interest between the Central Government and the victims.
since the Central Government owned 22% share in UCIL, and that would make the Central Government a Judge in its own cause.
Disposing of the Writ Petitions, this Court, 600 HELD: Sabyasachi Mukharji, CJ and K.N. Saikia, J. Per C J: 1.1 The Act is constitutionally valid.
It proceeds on the hypothesis that until the claims of the victims are realised or obtained from the delinquents, namely, UCC and UCIL by settlement or by adjudication and until the proceed ings in respect thereof continue, the Central Government must pay interim compensation or maintenance for the vic tims.
In entering upon the settlement in view of section 4 of the Act, regard must be had to the views of the victims and for the purpose of giving regard to these, appropriate notices before arriving at any settlement, was necessary.
In some cases, however, post decisional notice might be sufficient but in the facts and the circumstances of the present case, no useful purpose would be served by giving a post decision al hearing having regard to the circumstances mentioned in the order of this Court dated 4th May, 1989 and having regard to the fact that there are no further additional data and facts available with the victims which can be profitably and meaningfully presented to controvert the basis of the settlement and further having regard to the fact that the victims had their say, or on their behalf their views had been agitated in these proceedings, and will have further opportunity in the pending review proceedings.
[703E H; 704A] 1.2 Though settlement without notice is not quite prop er, on the materials so far available, it is seen that Justice has been done to the victims but justice has not appeared to have been done.
In view of the magnitude of the misery involved and the problems in this case, the setting aside of the settlement on this ground in view of the facts and the circumstances of this case keeping the settlement in abeyance and giving notice to the victims for a post deci sional hearing would not be in the ultimate interest of justice.
It is true that not giving notice was not proper because principles of natural justice are fundamental in the constitutional set up of this country.
No man or no man 's right should be affected without an opportunity to ventilate his views.
Justice is a psychological yearning, in which men seek acceptance of their view point by having an opportunity of vindication before the forum or the authority enjoined or obliged to take a decision affecting their right.
Yet in the particular situations, one has to bear in mind how an in fraction of that should be sought to be removed in accord ance with justice. "To do a great right" after all.
it is permissible sometimes "to do a little wrong".
In the facts and circumstances of the case, this is one of those rare occasions.
[701G H; 702A C] 2.1 The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit of its operation as reasonably construed.
It has to be borne in mind that if so 601 judged it passed the test of reasonableness, then the possi bility of the power conferred being improperly used is no ground for pronouncing the law itself invalid.
[659E G] 2.2 Conceptually and from the jurisprudential point of view, especially in the background of the Preamble to the Constitution of India and the mandate of the Directive Principles, it was possible to authorise the Central Govern ment to take over the claims of the Victims to fight against the multinational corporation in respect of the claims.
Because of the situation the victims were under disability in pursuing their claims in the circumstances of the situa tion fully and properly.
But there is no prohibition or inhibition, for Indian State taking over the claims of the victims or for the State acting for the victims as the Act has sought to provide.
[640E H] 2.3 The Act does provide a special procedure in respect of rights of the victims and to that extent the Central Govt.
takes upon itself the rights of the victims.
It is a special Act providing a special procedure for a kind of special class of victims.
In view of the enormity of the disaster the victims of the Bhopal gas leak disaster, as they were placed against the multi national and a big Indian Corporation and in view of the presence of foreign contin gency lawyers to whom the victims were exposed, the claim ants and victims can legitimately be described as a class by themselves different and distinct, sufficiently separate and identifiable to be entitled to special treatment for effec tive, speedy, equitable and best advantageous settlement of their claims.
There indubitably is differentiation.
But this differentiation is based on a principle which has rational nexus with the aim intended to be achieved by this differen tiation.
The disaster being unique in its character and in the recorded history of industrial disaster, situated as the victims were against a mighty multinational with the presence of foreign contingency lawyers looming on the scene, there were sufficient grounds for such differentia tion and different treatment.
In treating the victims of the gas leak disaster differently and providing them a proce dure, which was just, fair, reasonable and which was not unwarranted or unauthorised by the Constitution, Article 14 is not breached.
[683E H; 684A B] Collector of Customs, Madras vs Nathella Sampathu Chet ty; , ; P.J. Irani vs State of Madras, ; D.K. Trivedi vs State of Gujarat, [1986] Suppl.
SCC 20, relied on.
Ballast Corporation vs O.D. Commission, , referred to 602 3.1 The present case is one where the Govt.
of India only represented the victims as a party ' and did not adjudi cate between the victims and the UCC.
It is the court which would adjudicate the rights of the victims.
The representa tion of the victims by the Government of India cannot be held to be bad, and there is and there was no scope of violation of any principle of natural justice.
[670B] 3.2 The connotation of the term "parens patria" differs from country to country, for instance, in England it is the King, in America it is the people, etc.
According to Indian concept parens patria doctrine recognised King as the pro tector of all citizens as parent.
The Government is within its duty to protect and to control persons under disability.
Conceptually, the parens patriae theory is the obligation of the State to protect and take into custody the rights and privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the State to secure to all its citizens the rights guaranteed by the Constitu tion and where the citizens are not in a position to assert and secure their rights, the State must come into picture and protect and fight for the right of the citizens.
The Preamble to the Constitution, read with the Directive Prin ciples contained in Articles 38, 39 and 39A enjoins the State to take up these responsibilities.
It is the protec tive measure to which the social welfare state is committed.
It is necessary for the State to ensure the fundamental rights in conjunction with the Directive Principles of State Policy to effectively discharge its obligation and for this purpose, if necessary, to deprive some rights and privileges of the individual victims or their heirs to protect their rights better and secure these further.
[638E H; 639A] 3.3 The UCC had to be sued before the American courts.
The tragedy was treated as a national calamity and the Govt.
of India had the right, and indeed the duty, to take care of its citizens, in the exercise of its parens patriae juris diction or on principles analogous thereto.
After having statutorily armed itself in recognition of such parens patriae right or on principles analogous thereto, it went to the American Courts.
No other person was properly designed for representing the victims, as a foreign court had to recognise a right of representation.
The Govt.
of India was permitted to represent was permitted to represent the vic tims before the American courts.
Private plaintiffs were also represented by their attorneys.
The order of Judge Keenan permitted the Govt.
of India to represent the vic tims.
If there was any remote conflict of interests between the Union of India and the victims from the theoretical point of view the doctrine of necessity would override the possible violation of the principles of natural justice that no man should be Judge in his own case.
[669C F] 603 3.4 The Act in question has been passed in recognition of the right of the sovereign to act as parens patriae.
The Government of India in order to effectively safeguard the rights of the victims in the matter of the conduct of the case was entitled to act as parens patriae, which position was reinforced by the statutory provisions, namely the Act.
It has to be borne in mind that conceptually and jurispru dentially, the doctrine of parens patriae is not limited to representation of some of the victims outside the territo ries of the country.
It is true that the doctrine has been so utilised in America so far.
Where citizens of a country are victims of a tragedy because of the negligence of any multinational in peculiar situation arises which calls for suitable effective machinery to articulate and effectuate the grievance and demands of the victims, for which the conventional adversary system would be totally inadequate.
The State in discharge of its sovereign obligation must come forward.
The Indian State because of its constitutional commitment is obliged to take upon itself the claim of the victims and to protect them in their hour of need.
[658B F] 3.5 There is no bar on the State to assume responsibili ties analogous to parens patriae to discharge the State 's obligations under the Constitution.
What the Central Govern ment has done in the instant case seems to be an expression of its sovereign power.
This power is plenary and inherent in every sovereign state to do all things which promote the health, peace, moral, education and good order of the people and tend to increase the wealth and prosperity of the State.
Sovereignty is difficult to define.
By the nature of things, the State Sovereignty in these matters cannot be limited.
It has to be adjusted to the conditions touching the common welfare when covered by legislative enactments.
This power is to the public what the law of necessity is to the indi vidual.
It is comprehended in the maxim salus populi suprema lex regard for public welfare is the highest law.
It is not a rule, it is an evolution.
This power has always been as broad as public welfare and as strong as the arm of the state, this can only be measured by the legislative will of the people, subject to the fundamental rights and constitu tional limitations.
This is an emanation of sovereignty and it is the obligation of the State to assume such responsi bilities and protect its citizens.
[658G H; 659A C] 3.6 In the instant case, the victims cannot be consid ered to be any match to the multinational companies or the Government with whom in the conditions that the victims or their representatives were after the disaster physically, mentally, financially, economically and also because of the position of litigation would have to contend.
In such a situation of 604 predicament the victims can legitimately be considered to be disabled.
They were in no position by themselves to look after their own interest effectively or purposefully.
In that background, they are people who needed the State 's protection and should come within the umbrella of State 's sovereignty to assert, establish and maintain their rights against the wrong doers in this mass disaster.
In that perspective, it is jurisprudentially possible to apply the principle of parens patriae doctrine to the victims.
But quite apart from that, it has to be borne in mind that in this case the State is acting on the basis of the Statute itself.
For the authority of the Central Government to sue for and on behalf of or instead in place of the victims, no other theory, concept, or any jurisprudential principle is required than the Act itself.
The Act empowers and substi tutes the Central Government.
The victims have been divested of their rights to sue and such claims and such rights have been vested in the Central Government.
The victims have been divested because the victims were disabled.
The disablement of the victims vis a vis their adversaries in this matter is a self evident factor.
Even if the strict application of the 'parens patriae ' doctrine is not in order, as a concept it is a guide.
The jurisdiction of the State 's power cannot be circumscribed by the limitations of the traditional concept of parens patriae.
Jurisprudentially it could be utilised to suit or alter or adapt itself to the changed circumstances.
In the situation in which the victims were, the State had to assume the role of a parent protecting the rights of the victims who must come within the protective umbrella of the State and the common sovereignty of the Indian people.
The act is an exercise of the sovereign power of the State.
It is an appropriate evolution of the expression of sovereignty in the situation that had arisen.
It has to be accepted as such.
[685C H] 3.7 The concept of parens patriae can be varied to enable the Government to represent the victims effectively in domestic forum if the situation so warrants.
There is no reason to confine the 'parens patriae ' doctrine to only quasi sovereign right of the State independent of and behind the title of the citizen.
[692B C] 3.8 The power to compromise and to conduct the proceed ings are not uncanalised or arbitrary.
These were clearly exercisable only in the ultimate interests of the victims.
The possibility of abuse of a statute does not impart to it any element of invalidity.
[659C D] E.P. Royappa vs State of Tamil Nadu, ; ; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; R.D. Shetty vs International Airport Authority of India, ; followed.
605 Ram Saroop vs S.P. Sahi, relied on.
Budhkaran Chankhani vs Thakur Prasad Shah, AIR ; Banku Behari Mondal vs Banku Behari Hazra, AIR 1943 Cal 203; Medai Dalavoi T. Kumaraswamy Mudaliar vs Medai Dalavoi Rajammal, AIR 1957 Mad.
563 approved.
State of U.P. vs Poosu, ; K.M. Nanavati vs State of Bombay, ; ; Ram Gopal Sarubai vs Smt.
Sarubhai & Ors., ; India Mica & Mican ite Industries Ltd. vs State of Bihar & Ors. ; Alfred L Snapp & SonInc.
vs Puerto Rico, ; 73, Ed.
2d 995, 102 section ct.
3260; State of Georgia vs Tennessee Copper Co., ; , 27 section et.
618, re ferred to.
B.K. Mukherjea on Hindu Religious and Charitable Trusts, Tagore Law Lectures, 5th Edn.
p. 404; Words & Phrases, permanent Edn.
33 p. 99; Black 's Law Dictionary, 5th Edn. 1979, p. 1003; Weaver 's Constitutional Law, p. 490; American Consti tutional Law by Lawrence H. Tribe 1978 Edn. para 3.24, referred to.
4.1 Section 3 provides for the substitution of the Central Government with the right to represent and act in place of (whether within or outside India) every person who has made or is entitled to make, a claim in respect of the disaster.
The State has taken over the rights and claims of the victims in the exercise of sovereignty in order to discharge the constitutional obligations as the parent and guardian of the victims who in the situation as placed needed the umbrella of protection.
Thus, the State has the power and jurisdiction and for this purpose unless the Act is otherwise unreasonable or violative of the constitutional provisions no question of giving a hearing to the parties for taking over these rights by the State arises.
For legis lation by the Parliament, no principle of natural justice is attracted provided such legislation is within the competence of the legislature.
Indeed the present Act is within the competence of the Parliament.
Section 3 makes the Central Government the dominoes litis and it has the carriage of the proceedings, but that does not solve the problem of by what procedure the proceedings should be carried.
[692A D] 4.2 Section 4 means and entails that before entering into any settlement affecting the rights and claims of the victims some kind of notice or information should be given to the victims.
[699D] 606 4.3 Sections 3 and 4 are categorical and clear.
When the expression is explicit, the expression is conclusive, alike in what it says and in what it does not say.
These give the Central Government an exclusive right to act in place of the persons who are entitled to make claim or have already made claim.
The expression 'exclusive ' is explicit and signifi cant.
The exclusively cannot be wittled down or watered down.
The said expression must be given its full meaning and extent.
This is corroborated by the use of the expression 'claim ' for all purposes.
If such duality of rights are given to.
the Central Government alongwith the victims in instituting or proceeding for the realisation or the en forcement of the claims arising out of Bhopal gas leak disaster, then that would be so cumbersome that it would not be speedy, effective or equitable and would not be the best or more advantageous procedure for securing the claims arising out of the leakage.
[683A C] 4.4 Sections 3 and 4 of the Act should be read together alongwith other provisions of the Act and in particular sections 9 and 11 of the Act.
These should be appreciated in the context of the object sought to be achieved by the Act as indicated in the Statement of objects and Reasons and the Preamble to the act.
The Act was so designed that the vic tims of the disaster are fully protected and the claims of compensation or damages for loss of life or personal in juries or in respect of other matters arising out of or connected with the disaster are processed speedily, effec tively, equitably and to the best advantage of the claim ants.
Section 3 of the Act is subject to other provisions of the Act which includes Sections 4 and 11.
Section 4 of the Act opens with non obstante clause, vis a vis, section 3 and, therefore overrides section 3.
[659G H; 660A B] 4.5 In the instant case, the Government of India is only capable to represent the victims as a party.
The adjudica tion of the claims would be done by the Court.
The doctrine of 'Bona fide Representation ' as also 'defacto validity ' are not applicable to the present case.
[690F] Basheshar vs Income Tax Commissioner, ; ; In re Special Courts Bill, ; A.R. Antulay vs R.S. Nayak & Anr., ; ; Ram Krishna Dalmia vs Ten dulkar, ; Ambika Prasad Mishra vs State of U.P. & Ors.
; ; Bodhan Chowdhary vs State of Bihar; , ; Lakshmi Kant Pandey vs Union of India; , ; M/s Mackinnon Mackenzie & Co. Ltd. vs Audrey D ' Costa and Anr., [1987] 2 SCC 469; Sheela Barse vs Secretary, Children Aid Society & Ors.
, ; ; Gokaraju Rangaraju vs State of A.P., ; ; Pushpadevi M. Jatia vs M.L. Wadhwan. ; ; 607 M/s Beopar Sahayak (P) Ltd. & Ors.
vs Vishwanath & Ors., [1987] 3 SCC 693; Dharampal Singh vs Director of Small Industries Services & Ors., AIR 1980 SC 1888; N.K. Mohammed Sulaiman vs N.C. Mohammed lsmail & Ors.; , ; Malkariun Bin Shidrammappa Pasare vs Narhari Bin Shivappa & Anr., 271 A 216, referred to.
Black 's Law Dictionary 5th Edn.
p. 437, referred to.
The restrictions or limitations on the substantive and procedural rights in the Act will have to be judged from the point of view of the particular Statute in question.
No abstract rule or standard of reasonableness can be applied.
That question has to be judged having regard to the nature of the rights alleged to have been infringed in this case, the extent and urgency of the evil sought to be remedied, disproportionate imposition, prevailing conditions at the time, all these facts will have to be taken into considera tion.
Having considered the background, the plight of the impoverished, the urgency of the victims ' need, the presence of the foreign contingency lawyers, the procedure of settle ment in USA in mass action, the strength of the foreign multinationals, the nature of injuries and damages, and the limited but significant right of participation of the vic tims as contemplated by section 4 of the Act, the Act cannot be condemned as unreasonable.
[684C E] State of Madras vs V.G. Row, ; , referred to.
6.1 In view of the principles settled by this Court and accepted all over the world in a case of this magnitude and nature, when the victims have been given some say by Section 4 of the Act, in order to make that opportunity contemplated by section 4 of the Act, meaningful and effective, it should be so read that the victims have to be given an opportunity of making their representation before the court comes to any conclusion in respect of any settlement.
How that opportuni ty should be given, would depend upon the particular situa tion.
Fair procedure should be followed in a representative mass tort action.
[696E F] 6.2 One assumption under which the Act is justified is that the victims were disabled to defend themselves in an action of this type.
If that is so, then the Court cannot presume that the victims were a lot, capable and informed to be able to have comprehended or contemplated the settlement.
In the aforesaid view of the matter notice was necessary.
The victims at large did not have the notice.
The Central Government as the representative of the victims must have the views of the victims and place such view before the court in such manner it considers neces 608 sary before a settlement is entered into.
If the victims want to advert to certain aspect of the matter during the proceedings under the Act and settlement indeed is an impor tant stage in the proceedings, opportunities must be given to the victims.
Individual notices may not be necessary.
The Court can, and should in such situation formulate modalities of giving notice and public notice can also be given invit ing views of the victims by tile help of mass media.
Howev er, it is not necessary that such views would require the consent of all the victims.
[698B C; 698G H; 699A] 6.3 One of the important requirements of justice is that people affected by an action or inaction should have oppor tunity to have their say.
That opportunity the victims have got when these applications were heard and they were heard after utmost publicity and they would have further opportu nity when review application against the settlement would be heard.
1700G H; 701A] 7.1 The Act does not expressly exclude the application of the Code of Civil Procedure.
Section 11 of the Act pro vides the overriding effect indicating that anything incon sistent with the provisions of the Act or in other laws including the Civil Procedure Code should be ignored and the Act should prevail.
Strictly speaking, Order 1 Rule 8 will not apply to a suit or a proceeding under the Act.
It is not a case of one having common interest with others.
Here the plaintiff, the Central Government has replaced and divested the victims.
1696H; 697A B] 7.2 In the instant case, there is no question of aban donment as such of the suit or part of the suit, the provi sions of order XXIII Rule 1 would also not strictly apply.
However, Order XXIH Rule 3B of the Code is an important and significant pointer and the principles behind the said provision would apply to this case.
The said rule 3B pro vides that no agreement of compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and sub rule (2) of rule 3B enjoins that before granting such leave the court shall give notice in such manner as it may think fit in a representative action.
Representative suit has been defined under Explanation to the said rule vide clause (d) as any other suit in which the decree passed may, by virtue of the provisions this Code or of any other law for the time being in force, bind any person who is not named as party to the suit.
Indubitably the victims would be bound by the Settle ment though not named in the suit.
11his is a position conceded by all.
If that is so, it would be a representative suit in terms of and for the purpose of Rule 315 of Order XXIII of the Code.
If the principles of this rule are the principles of natural justice then we are of the opinion that 609 the principles behind it would be applicable; and also that section 4 of the Act should be so construed in spite of the difficulties of the process of notice and other difficulties of making "informed decision making process cumbersome".
[697C G] 7.3 In as much as section 4 of the Act had given a qualified right of participation to the victims, there cannot be any question of violation of the principles of natural justice.
The scope of the application of the princi ples of natural justice cannot be judged by any strait jacket formula.
[662G H] R. Viswanathan vs Rukn ul Mulk Syed Abdul Wajid, ; ; M. Narayanan Nambiar vs State of Kerala, [1963] Supp.
(2) 724; Chintaharan Ghose & Ors.
vs Gujaraddi Sheik & Ors., AIR 1951 Cal. 456; Ram 'Sarup vs Nanak Ram, AIR 1952 All.
275; referred to.
The Act has to be understood that it is in respect of the person responsible, being the person in charge of the UCIL and the parent company UCC.
This interpretation of the Act is further strengthened by the fact that a 'claimant" has been defined in clause (c) of Section 2 as a person who is entitled to make a claim and the expression "person" in Section 2(e) includes the Government.
Therefore, the Act proceeded on the assumption that the Government could be a claimant being a person as such.
[690A B] 9.1 The fact that the provisions of the principles of natural justice have to be complied with, is undisputed.
This is well settled by the various decisions of the Court.
The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by deny ing a procedure which is just, fair and reasonable.
[693D E] 9.2 Rules of natural justice are not embodied rules.
Hence, it was not possible to make an exhaustive catalogue of such rules.
Audi alteram partem is a highly effective rule devised by the Courts to ensure that a statutory au thority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power.
The rules of natural justice can operate only in areas not covered by any law validly made.
The general principle as distinguished from an absolute rule of uniform application is that where a statute does not in terms exclude the rule of prior hearing but contemplates a post decisional hearing 610 amounting to a full review of the original order on merits then such a statute would be construed as excluding the audi alteram partem rule at the pre decisional stage.
If the statute conferring the power is silent with regard to the giving of a pre decisional hearing to the person affected the administrative decision after post decisional hearing was good.
[694A D] 9.3 In the instant case, no question of violation of the principle of natural justice arises, and there is no scope for the application of the principle that no man should be a Judge in his own cause.
The Central Government was not judging any claim, but was fighting and advancing the claims of the victims.
The adjudication would be done by the courts, and therefore, there is no scope of the violation of any principle of natural justice.
[688G H; 689A B] Menaka Gandhi vs Union of India, [1978] 2 SCR 621; Olga Tellis vs Bombay Municipal Corporation, [1985] Supp. 2 SCR 51; Union of India vs Tulsi Ram Patel, [1985] Supp. 2 SCR 131; Swadeshi Cotton Mills vs Union of India, ; , relied on.
Ganga Bai vs Vijay Kumar, ; ; S.L. Kapoor vs Jagmohan, ; Sangram vs Election Commis sion; , , referred to.
Though not expressly stated, the Act proceeds on 'the major inarticulate premise '.
It is on this promise or premise that the State would be justified in taking upon itself the right and obligation to proceed and prosecute the claim and deny access to the courts of law to the victims on their own.
If it is only so read, it can only be held to be constitutionally valid.
It has to be borne in mind that the language of the Act does not militate against this construc tion but on the Contrary.
Sections 9, 10 and the scheme of the Act suggest that the Act contains such an obligation.
If it is so read, then only meat can be put into the skeleton of the Act making it meaningful and purposeful.
The Act must, therefore, be so read.
This approach to the interpre tation of the Act can legitimately be called the 'construc tive intuition ' which is a permissible mode of viewing the Acts of Parliament.
The freedom to search for 'the spirit of the Act ' or the quantity of the mischief at which it is aimed (both synonymous for the intention of the parliament) opens up the possibility of liberal interpretation "that delicate and important branch of judicial power, the conces sion of which is dangerous, the denial ruinous".
Given this freedom it is a rare opportunity though never to be misused and challenge for the Judges to adopt and give meaning to 611 the act, articulate and inarticulate and thus translate the intention of the Parliament and fulfil the object of the Act.
After all, the Act was passed to give relief to the victims, who, it was thought, were unable to establish their own rights and fight for themselves.
[687E H; 688A] 11.1 The circumstances that financial institutions held shares in the UCIL would not disqualify the Government of India from acting as parens patriae and in discharging its statutory duties under the Act.
The suit was filed only against the UCC and not against UCIL.
On the basis of the claim made by the Government of India, UCIL was not a neces sary party.
It was suing only the multinational based on several legal grounds of liability of the UCC, inter alia, on the basis of enterprise liability.
If the Government of India had instituted a suit against UCIL to a certain extent it would have weakened its case against UCC in view of the judgment of this Court in M.C. Mehta 's case.
[668H; 669A B] M.C. Mehta vs Union of India, ; , referred to.
11.2 Even if there was any remote conflict of interests between the Union of India and the victims on account of the sharesholding, doctrine of necessity would override the possible violation of the principles of natural justice.
[669F] Kasturilal Ralia Ram Jain vs State of UP, ; ; State of Rajasthan vs Vidyawati, [1962] 2 Supp.
SCR 989; J. Mohapatra & Co. & Anr.
vs State of Orissa & Anr.
, ; , referred to.
Halsbury 's Laws of England, Vol. 1, 4th Edn.
para 73 Smith 's Judicial Review of Administrative Action, 4th Edn.
276 277; Natural Justice by G.A. Flick, [1979] Edn. pp. 138 141, referred to.
The Act does not create new causes of action or create special courts.
The jurisdiction of the civil court to entertain suit would still arise out of section 9 of the CPC and the substantive cause of action and the nature of the reliefs available would also continue to remain un changed.
The only difference produced by the provisions of the Act would be that instead of the suit being filed by the victims themselves the suit would be filed by the Central Government on their behalf.
[655F] 13.
Normally, in measuring civil liability, the law has attached more importance to the principle of compensation than that of punishment.
Penal redress, however, involves both compensation to the 612 person injured and punishment as deterrence.
The Act, as such does not abridge or curtail damage or liability whatev er that might be.
So the challenge to the Act on the ground that there has been curtailment or deprivation of the rights of the victims which is unreasonable in the situation is unwarranted and cannot be sustained.
[680G H; 681A F] Roshanlal Kuthiala & Ors.
vs R.B. Mohan Singh, Oberoi ; ; Nandram Heeralal vs Union of India & Anr., AIR 1978 M.P. 209; Ryland vs Flatcher, (1868) Vol 3 LR E& I Appeal Cases 330; Rookes vs Barnard, ; , re ferred to.
Salmond 's Law of Torts, 15th Edn.
p. 30, referred to.
The Act in question does not purport to deal with the criminal liability, if any, of the parties or persons concerned nor it deals with any of the consequences flowing from those.
This position is clear from the provisions and the preamble to the Act.
[636F] 15.
The major inarticulate premise apparent from the Act and the scheme and the spirit of the Act is that so long as the rights of the victims are prosecuted the state must protect the victims.
Otherwise the object of the Act would be defeated its purpose frustrated.
Therefore, continuance of the payments of the interim maintenance for the continued sustenance of the victims is an obligation arising out of State 's assumption of the power and temporary deprivation of the rights of the victims and divestiture of the right of the victims to fight for their own rights.
This is the only reasonable interpretation which is just, fair and proper.
[686B C] 16.
The promises made to the victims and hopes raised in their hearts and minds can only be redeemed in some measure if attempts are made vigorously to distribute the amount realised to the victims in accordance with the scheme.
That would be redemption to a certain extent.
The law relating to damages and payment of interim damages or compensation to the victims of this nature should be seriously and scientif ically examined by the appropriate agencies.
[704F H; 705A] 17.
The Bhopal Gas Leak disaster and its aftermath emphasise the need for laying down certain norms and stand ards that the Government may follow before granting permis sion or licences for the running of industries dealing with materials which are of dangerous potentialities.
The Govern ment, should, therefore, examine or have the problem exam ined by an expert committee as to what should be the condi tions on 613 which future licences and/or permission for running indus tries on Indian soil would be granted and for ensuring enforcement of those conditions, sufficient safety measures should be formulated and scheme of enforcement indicated.
The Government should insist as a condition precedent to the grant of such licences or permission, creation of a fund in anticipation by the industries to be available for payment of damages out of the said fund in case of leakages or damages in case of accident or disaster flowing from negli gent working of such industrial operations or failure to ensure measures preventing such occurrence.
The Government should also ensure that the parties must agree to abide to pay such damages out of the said Fund by procedure separate ly evolved for computation and payment of damages without exposing the victims or sufferers of the negligent act to the long and delayed procedure.
Special procedure must be provided for and the industries must agree as a condition for the grant of licence to abide by such procedure or to abide by statutory arbitration.
The basis for damages in case of leakages and accident should also be statutorily fixed taking into consideration the nature of damages in flicted, the consequences thereof and the ability and capac ity of the parties to pay.
Such should also provide for deterrant or punitive damages, the basis for which should be formulated by a proper expert committee or by the Govern ment.
For this purpose, the Government should have the matter examined by such body as it considers necessary and proper like the Law Commission or other competent bodies.
This is vital for the future.
[705B F] 18.
That people are born free, the dignity of the per sons must be recognised, and competent tribunal is one of the surest methods of effective remedy.
If, therefore, as a result of this tragedy new consciousness and awareness on the part of the people of this country to be more vigilant about measures and the necessity of ensuring more strict vigilance for permitting the operations of such dangerous and poisonous gases dawn, then perhaps the tragic experience of Bhopal would not go in vain.
[682D E] Per Singh, J. (concurring): 1.1 In India, the need for industrial development has led to the establishment of a number of plants and factories by the domestic companies and under takings as well as by Transnational Corporations.
Many of these industries are engaged in hazardous or inherently dangerous activities which pose potential threat to life, health and safety of persons working in the factory, or residing in the surround ing areas.
Though working of such factories and plants is regulated by a 614 number of laws of our country, there is no special legisla tion providing for compensation and damages to outsiders who may suffer on account of any industrial accident.
As the law stands today, affected persons have to approach civil courts for obtaining compensation and damages.
In civil courts, the determination of amount of compensation or damages as well the liability of the enterprise has been bound by the shack les of conservative principles.
[707D G] 1.2 The principles laid down in Ryland vs Fletcher made it difficult to obtain adequate damages from the enterprise and that too only after the negligence of enterprise was proved.
[707G H] 1.3 The law laid down in Oleum Gas Leak case made a land mark departure from the conservative principles with regard to the liability of an enterprise carrying on hazard ous or inherently dangerous activities.
[709C] 1.4 In the instant case, there is no scope for any doubt regarding the liability of the UCC for the damage caused to the human beings and nature in and around Bhopal.
[709E] Ryland vs Fletcher, ; ; M.C. Mehta vs Union of India; , , referred to. 2.
In the context of our national dimensions of human rights, right to life, liberty, pollution free air and water is guaranteed by the Constitution under Articles 21, 48A and 51(g), it is the duty of the State to take effective steps to protect the constitutional rights guaranteed.
These rights must be integrated and illumined by evolving interna tional dimensions and standards, having regard to our sover eignty as highlighted by Clauses 9 and 13 of U.N. Code of Conduct on Transnational Corporations.
Such a law may pro vide for conditions for granting licence to Transnational Corporations, prescribing norms and standards for running industries on Indian soil ensuring the above said constitu tional rights of our people.
A Transnational Corporation should be made liable and subservient to laws of our country and the liability should not be restricted to affiliate company only but the parent corporations should also be made liable for any damage caused to the human beings or ecology.
The law must require transnational Corporations to agree to pay such damages as may be determined by the statutory agencies and forum constituted under it without exposing the victims to long drawn litigation.
In order to meet the situation, to avoid delay and to ensure immediate relief to the victims, the law should 615 provide for constitution of tribunals regulated by special procedure for determining compensation to victims of indus trial disaster or accident, appeal against which may lie to this Court on the limited ground of questions of law only after depositing the amount determined by the Tribunal.
The law should also provide for interim relief to victims during the pendency of proceedings.
These steps would minimise the misery and agony of victims of hazardous enterprises.
[710H; 711A F] 3.
Industrial development in our country and the hazards involved therein, pose a mandatory need to constitute a statutory "Industrial Disaster Fund", contributions to which may be made by the Government, the industries whether they are transnational corporations or domestic undertakings, public or private.
The extent of contribution may be worked out having regard to the extent of hazardous nature of the enterprise and other allied matters.
The fund should be permanent in nature.
so that money is readily available for providing immediate effective relief to the victims.
[711 G H; 712A] Ranganathan and Ahmadi, J J Per Ranganathan, J. (Concur ring).
The provisions of the Act, read by themselves, guar antee a complete and full protection to the rights of the claimants in every respect.
Save only that they cannot file a suit themselves, their right to acquire redress has not really been abridged by the provisions of the Act.
Sections 3 and 4 of the Act completely vindicate the objects and reasons which compelled Parliament to enact this piece of legislation.
Far from abridging the rights of the claimants in any manner, these provisions are so worded as to enable the Government to prosecute the litigation with the maximum amount of resources, efficiency and competence at its com mand.
as well as with all the assistance and help that can be extended to it by such of those litigants and claimants as are capable of playing more than a mere passive role in the litigation.
[720G H; 721A B] 2.
Even if the provisions of section 3 had been scrupulously observed and the names of all parties, other than the Cen tral Government, had been got deleted from the array of parties in the suits and proceedings pending in this coun try, the result would not have been fatal to the interests of the litigants.
On the contrary, it enabled the litigants to obtain the benefit of all legal expertise at the command of the Government of India in exercising their rights against the Union Carbide Corporation.
Such representation can well be justified by resort to a principle analogous to, if not precisely the same, as that of, "parens 616 patriae".
A victim of the tragedy is compelled to part with a valuable right of his in order that it might be more efficiently and satisfactorily exploited for his benefit than he himself is capable of.
It is of course possible that there may be an affluent claimant or lawyer engaged by him, who may be capable of fighting the litigation better.
It is possible that the Government of India as a litigant may or may not be able to pursue the litigation with as much deter mination or capability as such a litigant.
But in a case of the present type one should not be confounded by such a possibility.
There are more indigent litigants than affluent ones.
There are more illiterates than enlightened ones.
There are very few of the claimants, capable of finding the financial wherewithal required for fighting the litigation.
Very few of them are capable or prosecuting such a litiga tion in this country not to speak of the necessity to run to a foreign country.
The financial position of UCIL was negli gible compared to the magnitude of the claim that could arise and, though eventually the battle had to be pitched on our own soil, an initial as well as final recourse to legal proceedings in the United States was very much on the cards, indeed inevitable.
In this situation, the legislature was perfectly justified in coming to the aid of the victims with this piece of legislation and in asking the Central Govern ment to shoulder the responsibility by substituting itself in place of the victims for all purposes connected with the claims.
[716C H; 717A] 3.
Section 4 adequately safeguards the interest of individual victims.
It enables each one of them to bring to the notice of the Union any special features or circum stances which he would like to urge in respect of any matter and if any such features are brought to its notice the Union is obliged to take it into account.
The individual claimants are also at liberty to engage their own counsel to associate with the State counsel in conducting the proceedings.
If the suits in this case had proceeded, in the normal course, either to the stage of a decree or even to one of settlement the claimants could have kept themselves abreast of the developments and the statutory provisions would have been more than adequate to ensure that the points of view of all the victims are presented to the court.
Even a settlement or compromise could not have been arrived at without the court being apprised of the views of any of them who chose to do so.
The statute has provided that though the Union of India will be the dominus litis in the suit, the interest of all the victims and their claims should be safeguarded by giving them a voice in the proceedings to the extent indicated above.
This provision of the statute is an adaptation of the principle of Order 1 Rule 8 and of order XXIII Rule 38 of the Code of Civil Procedure in its application to the suits governed by it and, though the extent of participation al lowed to 617 the victims is somewhat differently enunciated in the legis lation, substantially speaking, it does incorporate the principles of natural justice to the extent possible in the circumstances.
The statute cannot, therefore, be faulted on the ground that it denies the victims an opportunity to present their views or places them at any disadvantage in the matter of having an effective voice in settling the suit by way of compromise.
[724G H; 725A D] 4.
Sections 3 and 4 combine together the interest of the weak, illiterate, helpless and poor victims as well as the interest of those who could have managed for themselves, even without the help of this enactment.
The combination thus envisaged enables the Government to fight the battle with the foreign adversary with the full aid and assistance of such of the victims or their legal advisers as are in a position to offer any such assistance.
Though section 3 denies the climants the benefit of being eo nominee parties in such suits or proceedings, section 4 preserves to them substantially all that they can achieve by proceeding on their own.
In other words, while seeming to deprive the claimants of their right to take legal action on their own, it has preserved those rights, to be exercised indirectly.
A conjoint reading of sections 3 and 4 would show that there has been no real total deprivation of the right of the claimants to enforce their claim for damage in appropriate proceedings before any appropriate forum.
There is only a restriction of this right which, in the circumstances, is totally reasonable and justified.
[718D G ] 5.
It is not possible to bring the suits brought under the Act within the categories of representative action envisaged in the Code of Civil Procedure.
The Act deals with a class of action which is sui generis and for which a special formula has been found and encapsuled in section 4.
The Act divests the individual claimants of their right to sue and vests it in the Union.
In relation to the suit in India, the Union is the sole Plaintiff.
none of the others are envisaged as plaintiffs or respondents.
The victims of the tragedy were so numerous that they were never defined at the stage of filing the plaint nor do they need to be defined at the stage of settlement.
The litigation is carried on by the State in its capacity not exactly the same as, but somewhat analogous to that of "parens patriae".
In the case of a litigation by a Karta of a Hindu undivided family or by a guardian on behalf of a ward, who is non sui juris, the junior members of the family or the wards, are not to be consulted before entering into a settlement.
In such cases, court acts as guardian of such persons to scrutinise the settlement and satisfy itself that it is in the best inter est of all concerned.
If it is later discovered that there has been any fraud or collusion, it may be open to the junior members of the 618 family or the wards to call the Karta or guardian to account but, barring such a contingency, the settlement would be effective and binding.
In the same way, the Union as "parens patriae ' would have been at liberty to enter into such settlement as it considered best on its own and seek the Court 's approval therefore.
[723G H; 724A D] 6.
It is common knowledge that any authority given to conduct a litigation cannot be effective unless it is accom panied by an authority to withdraw or settle the same if the circumstances call for it.
The vagaries of a litigation of this magnitude and intricacy could not be fully anticipated.
There were possibilities that the litigation may have to be fought out to the bitter finish.
There were possibilities that the UCC might be willing to adequately compensate the victims either on their own or at the insistence of the Government concerned.
There was also the possibility, which had already been in evidence before Judge Keenan, that the proceedings might ultimately have to end in negotiated settlement.
In most of the mass disaster cases reported, proceedings finally end in a compromise, if only to avoid an indefinite prolongation of the agonies caused by such liti gation.
The legislation, therefore, cannot be considered to be unreasonable merely because in addition to the right to institute a suit or other proceedings it also empowers the Government to withdraw the proceedings or enter into a compromise.
[719B E] M.C. Mehta vs Union of India, ; , referred to.
The Act has provided an adequate opportunity to the victims to speak out and if they or the counsel engaged by some of them in the trial court had kept in touch with the proceedings in this court, they could have most certainly made themselves heard.
If a feeling has gained ground that their voice has not been fully heard, the fault was not with the statute but was rather due to the development leading to the finalisation of the settlement when the appeal against the interim order was being heard in this Court.
[726B D] 8.
In the field of torts, under the common law of Eng land, no action could be laid by the dependants or heirs of a person whose death was brought about by the tortious act of another on the maxim actio personalis maritur cum persona although a person injured by a similar act could claim damages for the wrong done to him.
In England this situation was remedied by the passing of Fatal Accidents Act, 1846, popularly known as Lord Compbell 's Act.
Thereafter the Indian Legislature enacted the .
This Act is fashioned on the 619 lines of the English Act of 1840.
Even though the English Act has undergone a substantial change, our law has remained static and seems a trifle archaic.
The magnitude of the gas leak disaster in which hundreds lost their lives and thou sands were maimed, not to speak of the damage to livestock, flora and fauna, business and property, is an eye opener.
The nation must learn a lesson from this traumatic experi ence and evolve safeguards atleast for the future.
The time is ripe to take a fresh look at the outdated century old legislation which is out of tune with modern concepts.
[728F H; 729A B] 9.
The Central Government will be well advised to insist on certain safeguards before permitting a transnational company to do business in the country.
It is necessary to insist on a right to be informed of the nature of the proc esses involved so as to take prompt action in the event of an accident.
The victims in this case have been considerably handicapped on account of the fact that the immediate tort feasor was the subsidiary of a multi national with its Indian assets totally inadequate to satisfy the claims arising out of the disaster.
It is, therefore, necessary to evolve, either by international consensus or by unilateral legislation, steps to overcome these handicaps and to ensure that foreign corporations seeking to establish an industry here, agree to submit to the jurisdiction of the Courts in India in respect of actions for tortious acts in this coun try; that the liability of such a corporation is not limited to such of its assets (or the assets of its affiliates) as may be found in this country, but that the victims are able to reach out to the assets of such concerns anywhere in the world; and that any decree obtained in Indian Courts in compliance with due process of law is capable of being executed against the foreign corporation, its affiliates and their assets without further procedural hurdles.
in those other countries.
[729G H; 730A E] 10.
It is hoped that calamities like the one which this country has suffered will serve as catalyst to expedite the acceptance of an international code on such matters in the near future.
[730F G]
|
SDICTION: Writ Petition (Civil) No. 811 of 1986 etc.
(Under Article 32 of the Constitution of India).
F.S. Nariman, G.L. Sanghi, S.N. Kacker, R.C. Kaushik, D.K. Garg, Mohan Katarki, S.S. Javali, Ravi P. Wadhwani, C.S. Vaidyanathan, K.V. Mohan, section Ravindra Bhatt, P. Chowd hry, S.R. Setia and Mukul Mudgal for the Petitioner/Appel lant.
G. Ramaswamy, Additional Solicitor General, B.R.L. Iyengar, M. Veerappa and Ashok Sharma for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The obstinate problem of inter se seniority, this time amongst officers in the Karnataka Administrative Service has fallen for determination in this group of appeals by special leave and writ petitions under Article 32 of the Constitution at the instance of both direct recruits and promotees.
It is not disputed that under the relevant Recruitment Rules of 1957 in regard to Class I Junior Scale posts there was a quota system 889 two thirds of the vacancies had to be filled up by promotion by selection from Class II Officers and the remaining one third by direct recruitment by competitive examination to be held by the Public Service Commission.
When direct recruit ment had not been made timely as envisaged by the scheme in the Rules officiating promotions were given in respect of posts covered by the direct recruit quota.
Such temporary promotions remained effective for a number of years some times varying between 5 and 8 and later when the vacancies within the direct recruitment quota were filled up, the appointments made in latter years were deemed to carry weightage for seniority on the footing of deemed filling up when vacancies had arisen.
Thus the dispute as to seniority inter se between those who had manned the promotional posts beyond the 2 3rds limit and the direct recruits subsequently appointed has come for judicial determination.
A three Judge Bench of this Court in V.P. Badami etc.
vs State of Mysore & Ors., dealt with a situa tion of this type with reference to the same set of Rules.
A similar dispute came before the Karnataka High Court in a bunch of writ petitions filed both by promotees and direct recruits and in view of common questions of fact and law involved therein, the High Court disposed them by a common leading judgment in the case of M.G. Kadali vs State of Karnataka & Ors., [1982] 2 KLJ 453.
The High Court noticed the ratio in Badami 's case and found that with a view to implementing the rule in Badami 's case, the State Government issued an official memorandum on 5.7.1976.
laying down guidelines for determination of seniority between the direct recruits and promotees.
The Gradation List of Junior Scale officers as on 30.6.1973 was drawn up following such guide line and was notified on 10.8.1976 with the following ex planatory cover note: (i) Between 2.12.1957 and 10.9.1959, the number of substantive vacancies were thirty nine and of those, twenty six were promotional and thirteen were the share of direct re cruits.
The first fifteen of the promotional posts were given to allottees and the remain ing eleven to promotees.
In the absence of direct recruitment, these thirteen posts were carried forward; (ii) Between 11.9.1959 and 26.10.1964 (when 1962 direct recruits became due for promotion), the vacancies were seventy six, of which fiftyone were available for direct recruits and twentyfive for promotees in view of the change in the proportion in the 1959 Rules.
Twentythree substantive vacancies were given to direct 890 recruits of 1962.
The net result, therefore, was 13 direct recruit posts of the earlier period and twentyeight of this period were carried forward; (iii) After October 1964, the vacancies were classified on annual basis.
Upto 7.10.1971, sixty vacancies were filled up by promotion.
As noticed earlier fortyone direct recruits vacancies had been carried forward and thirty five fresh vacancies were available to direct recruits.
Eleven vacancies were filled up by direct recruitment and sixtyfive were carried forward.
By a latter notification dated 2.2.
197 1, when a further gradation list was pub lished, the following explanatory note was added: "(i) During the period 7.6.1974 to 15.7.76 (when direct recruits of 1974 were eligible for confirmation), eleven substantive vacan cies were available on the basis of the perma nent strength of the cadre; (ii) Out of one hundred and thirty three temporary posts available during that period, eightynine posts were assigned to promotees.
The direct recruitment vacancies carried forward from the earlier period.
The recruits of the 1964 batch were assigned ranks taking into account the direct recruitment vacancies carried forward for the previous period.
" On a representation by the 1974 batch of direct re cruits for refixation of inter se seniority in the Gradation List taking into account only the permanent posts in the cadre and by taking into account the carried forward vacan cies, the State Government made an order on 22.5.
1980, to the effect that the 1974 batch of direct recruits should be shown immediately below serial number 64 and above serial number 65 in the continuation Gradation List published on 2.2.
Certain promotees being aggrieved by this Governmental direction approached the High Court under Article 226 for relief claiming protection of their seniority.
The High Court classified their contentions into the following five: (i) The only basis for determination of inter se seniority of officers in a cadre whether by promotion or direct recruitment should be the date of entry into the cadre and the quota rule is 891 not available to be used for pushing up or down officers of the cadre; (ii) Even if there be any 'carry forward ' it should not extend beyond three years; (iii) Quota rule should be applied taking into account both substantive as well as temporary vacancies in the cadre; (iv) The quota rule did no longer operate in regard to the junior scale officers when the 1959 rules became operative; at any rate it was clearly so when the 1966 Rules came into force, and (v) The impugned Government order of 1980 was invalid and liable to be quashed on several grounds, one of them being that it was made without providing an opportunity to the promo tees who were adversely affected by it.
The High Court analysed the judgment of this Court in Badami 's case and also referred to, and relied upon, the observations in Col. Iyer 's case and with reference to the issues catalogued above came to the conclusion as stated below in its own words: (i) "If promotions have taken place in excess of the quota for promotion, pushing down the promotees promoted in excess of their quota or if direct recruitment was done in excess of the quota for direct recruitment, pushing down direct recruits appointed in excess of their quota in a necessary concomitant of the quota rule.
Carrying forward of direct recruitment vacancies or promotional vacancies to the next recruitment period is merely the consequence of such pushing down.
(What was perhaps in tended to be said was that pushing down was the direct outcome of the mandate to carry forward) we are unable to accept the conten tion of learned counsel for the promoteepeti tioners that there should be no such pushing down or such carry forward.
" (ii) "In the light of the above ruling of the Supreme Court, it must be held that carry forward of direct recruitment vacancies cannot extend beyond three years.
However, this ruling of the Supreme Court (In A.S. Iyer 's case) does not affect the finality and binding character of the earlier judgment of the Supreme Court in Badami 's case which specifi cally dealt with the Grada 892 tion List of Junior Scale officers as on 1.1.
1972, and gave direction as to how a fresh Gradation List should be prepared.
Those directions are bound to be obeyed while pre paring such Gradation List of officers who entered that cadre upto 1.1.1972 without any limitation as to the period upto which promo tional or direct recruitment vacancies should be carried forward to the next recruitment period.
But such carry forward cannot exceed three years after 1.1.1972.
" (iii) "The above ruling of the Supreme Court (Badami 's case) is binding on all courts under Article 141 of the Constitution.
It is not open to us to speculate what would have been the conclusion of the Supreme Court if it had known the correct factual position that the cadre of Junior Scale officers consisted both of permanent and temporary posts.
That the promotee petitioners in the present writ petitions were not parties to Badami 's case, in no way detracts from the binding character of the law declared by the Supreme Court." (iv) "Hence, we reject the contention that 1959 Rules abrogated the quota rule in regard to recruitment to the cadre of Junior Scale officers .
We, therefore, reject the contentions of learned counsel for promotee petitioners that after the 1966 Rules came into force, the quota rule ceased to apply to the recruitment to the cadre of Junior Scale officers and that thereafter the date of entry into the cadre, whether by direct recruitment or by promotion, became the only basis for determining the seniority in that cadre." (v) "The High Court examined the individual cases of both the groups and finally directed dismissal of Kadali 's (or promotee) writ application as also of the direct recruits of 1976 and 1977.
It further quashed the Govern ment order dated 22.5.
1980 by which certain modifications were made in the Gradation List of 1976 and called upon the State Government to make appropriate alterations in the Grada tion List of 10.8.
1976 and the continuation list of 2.2.
1977 on the basis that the carry forward rule should operate for a maximum period of three years subsequent to 1.1.
" We have before us a batch of appeals by special leave and two writ petitions under Article 32.
Both the writ petitions are by direct recruits; Civil Appeal Nos. 2906 and 2910 and 2911 of 1984 are by 893 promotees while Civil Appeal Nos.
2902 to 2905 to 2907 to 2909 of 1984 are by direct recruits.
The promotees challenge the propriety of the direction of the High Court to modify the Gradation List by applying the quota rule while the direct recruits seek to have full application of the quota rule instead of the limitation of three years and have asked for consequential benefits.
This group of cases has been heard at great length and learned counsel for the parties have produced a lot of papers.
On looking into the matter objectively in the back drop of Badami 's decision we are of the view that if the following aspects are answered all that arose for judicial determination would be appropriately met.
Those aspects are: (i) What is the effect of the quota rule in the matter of fixation of inter se seniority in the Gradation List so far as recruits from different sources are concerned? (ii) Though admittedly in 1957 under the relevant rule, a quota existed, was that basis altered or given up during the relevant peri od? (iii) What is the effect of this Court 's judgment in Badami 's case? Was the High Court correct in observing that this Court would not have come to the conclusion that quota was confined to substantive vacancies only if the true state of facts was known? (iv) What is the effect of the observation in Iyer 's case and does it supersede the rule in Badami 's case? (v) Does the situation highlighted in this case require any other direction? It is a well settled position in law that where recruit ment is from two sources to a service, a quota rule can be applied fixing the limits of recruitment from the two sources.
(H.C. Sharma vs Municipal Corporation of Delhi & Ors., ; FIRST ASPECT In S.G. Jaisinghani vs Union of India & Ors., a Constitution Bench of this Court observed: "The Solicitor General on behalf of respond ents 1, 2 894 and 3 submitted that the quota rule was merely an administrative direction to determine recruitment from two different sources in the proportion stated in the rule and a breach of that quota rule was not a justiciable issue.
The Solicitor General said that there was, however, substantial compliance with the quota rule . .
We are unable to accept the argument of the Solicitor General that the quota rule was not legally binding on the Government.
It is not disputed that Rule 4 of the Income Tax Officers (Class I, Grade II) Service Recruitment Rules is a statutory rule and there is a statutory duty cast on the Government under this rule to determine the method or methods to be employed for the purpose of filling the vacancies and the number of candidates to be recruited by each method.
In the letter of the Government of India dated October 1951 there is no specific reference to rule 4, but the quota fixed in their letter must be deemed to have been fixed by the Government of India in exercise of the statutory power given under rule 4, it is not now open to the Government of India to say that it is not incumbent upon it to follow the quota for each year and it is open to it to alter the quota on account of the particular situation.
We are of opinion that having fixed the quota in exercise of their power under rule 4 between the two sources of recruitment, there is no discretion left with the Govern ment of India to alter that quota according to the exigencies of the situation or to deviate from the quota, in any particular year, act its own will and pleasure.
As we have already indicated, the quota rule is linked up with the seniority rule and unless the quota rule is strictly observed in practice, it will be difficult to hold that the seniority rule i.e., rule 1(f)(iii) and (iv), is not unrea sonable and does not offend Article 16 of the Constitution.
" In Badami 's case (supra) this aspect was examined by the Court.
The learned Chief Justice spoke for the three Judge Bench thus: "In working out the quota rule, these principles are generally followed.
First, where rules prescribe quota between direct recruits and promotees, confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre.
Second, confirmed persons are senior to those who are officiating.
895 Third, as between persons appointed in offici ating capacity, seniority is to be counted on the length of continuous service.
Fourth, direct recruitment is possible only by compet itive examination which is the prescribed procedure under the rules.
In promotional vacancies, the promotion is either by selec tion or on the principle of seniority cummer it.
A promotion could be made in respect of a temporary post or for a specified period but a direct recruitment has generally to be made only in respect of clear permanent vacancy either existing or anticipated to arise at or about period of probation is expected to be completed.
Fifth, if promotions are made to vacancies in excess of the promotional quota, the promotions may not be totally illegal but would be irregular.
The promotees cannot claim any right to hold the promotional posts unless the vacancies fall within their quota.
If the promotees occupy any vacancies which are within the quota of direct recruits, when direct recruitment takes place, the direct recruits will occupy the vacancies within their quota.
Promotees who were occupying the vacancies within the quota of direct recruits will either be reverted or they will be ab sorbed in the vacancies within their quota in the facts and circumstances of a case.
The important principle is that as long as the quota rule remains neither promotees can be allotted to any of the substantive vacan cies of the quota of direct recruits nor recruits can be allotted to promotional vacan cies.
The result is that direct recruitment vacancies between 11th September, 1959 and 26th October, 1964 cannot be occupied by any promotees.
The fact that direct recruits were confirmed on 28th October, 1964 will not rob the direct recruits of their quota which remained unfilled from 2nd December, 1957 . .
In S.C. Jaisinghani vs Union of India (supra) it was said that when the quota was fixed for the two sources of recruitments, the quota could not be altered according to exigencies of the situation.
It was held there that the promotees who had been promoted in excess of the prescribed quota should be held to have been illegally promot ed.
In Bishan Sarup 's case [1978] SCR Suppl.
491 it was held that when it was ascertained that not more than 1/3rd of the vacancies were to go to the promotees and the rest to the direct recruits the ratio was not mere depend ant on whether any direct recruit was appoint ed in 896 any particular year or not.
The promotees were entitled to 1/3rd of the vacancies in any particular year, whether or not there was direct recruitment by competitive examination in that year.
Two principles are established in the decision referred to.
One is that quotas which are fixed are unalterable.
according to exi gencies of situation.
Quotas which are fixed can only be altered by fresh determination of quotas under the relevant rules.
The other is that on the ground one group cannot claim the quota fixed for the other group either on the ground that the quotas are not filled up or on the ground that because there has been a number in excess of quota the same should be absorbed depriving the other group of quota.
In Bachan Singh & Anr.
vs Union of India & Ors., the two appel lants were promoted in the year 1958 and 1959.
The respondents were appointed by direct recruitment in 1962, 1963 and 1964.
The re spondents were confirmed in their posts before the appellants.
The appellants contended that the respondents who were directly appointed after the appellants had been promoted were not to be confirmed in permanent posts before the appellants.
It was held that the direct recruits were confirmed against permanent vacancies within their quota.
The earlier confirmation of direct recruits though ap pointed later was upheld on the ground that they fell within their quota of permanent vacancies.
Subraman 's case [1975] 2 SCR 979 on which the appellants relied also held that each quota would have to be worked independ ently on its own force.
In that case the Assistant Executive Engineers who were ini tially entitled to 3/4th and subsequently to 2/3rd of the vacancies while Assistant Engi neers who were entitled initially to 1/4th and subsequently to 1/3rd of such vacancies were held to be entitled to their respective quotas independent of the fact that whether any person from one class or the other was promot ed or not.
It was illustrated by saying that if there were three vacancies in a year two would go to the Assistant Executive Engineers and one would go to the Assistant Engineers and even if there were not eligible 897 Assistant Executive Engineers who could be promoted to fill in two vacancies belonging to their quota, one vacancy is to be filled up by promotion of an Assistant Engineer if he was eligible.
Similarly, if two vacancies belong ing to the quota of Assistant Executive Engi neers are to be filled by Assistant Engineers for want of availability of eligible Assistant Executive Engineers, the appointment of As sistant Executive Engineers have to be pushed down to later years when their appointment could be regularised as a result of absorption in their lawful quota for those years.
" Badami 's case referred to several authorities of the Court and clearly drew out the judicial consensus on the point in issue by concluding that the quota rule had to be strictly enforced and it was not open to the authorities to meddle with it on the ground of administrative exigencies.
The scheme in force relating to the services for fixing inter se seniority takes into account the filling up of the vacancies in the service from the two sources on the basis of the quota and, therefore, fixation of inter se seniority in the Gradation List has to be worked out on the basis of quota.
SECOND ASPECT There was no dispute either before the High Court or before us that in the 1957 Rules there existed a quota for filling up vacancies in the Class I Junior Scale posts.
The High Court found that the quota continued throughout during the relevant period.
Before us Mr. Nariman supported that finding while Mr. Kacker maintained that the quota had in later years been given up.
Rule 3 of Mysore Recruitment of Gazetted Probationers Rules, 1959 made the following provi sions: "(1) The provisions of these rules shall be applicable in respect of direct recruitment to the cadres in State Civil Services Class I and Class II specified in column 3 of the Schedule to these rules relating to the Services speci fied in the corresponding entries of Column 2 of the said Schedule.
(2) These rules shall have effect notwith standing anything contrary contained (i) in the Cadre and Recruitment Rules for the time being in force applicable to the Cadres in the 898 State Civil Services referred to in sub rule (i) and (ii) in the Mysore State Civil Service (General Recruitment) Rules, 1957.
(3) During the period of five years from the date of commencement of these rules, as nearly as may be two thirds of the number of vacan cies arising in the cadres in the State Civil Services referred in to in sub rule (i) shall be filled by appointment of candidates herein after in these rules referred to as probation ers selected in accordance with the provisions of these rules and the actual number of vacan cies to be so filled shall be determined by the Government.
" Admittedly these rules related only to direct recruitment and as it appears, in sub rule (3) remained in force for five years (said to have been extended for one more year); with the lapse of a total period of six years from the date when these rules came into force, they cease to have effect.
In 1966 rules were made under the proviso to Article 309 known as the Karnataka Government Gazetted Probationers Posts (Appointment by Competitive Examination) Rules, 1966 and sub rule (3) of Rule 3 thereof provided inter alia: "That notwithstanding anything contrary in the rules of recruitment to the Karnataka Adminis trative Service the number of vacancies as determined by the Government in that service should be filled by direct recruitment after holding a competitive examination by the Commission.
" On the 11th of August, 1977, the Karnataka Administra tive Service (Recruitment) (Amendment) Rules, 1977 came into force.
Rule 2 thereof provided: "Amendment to Schedule: In the Schedule to the Karnataka Administrative Service (Recruitment) Rules, 1957 for the entries at the Item (b) the following entries shall be subsituted, namely: 1 2 3 (b)All Class I (i)50%of vacancies to be Forpromotion;ClassII (Junior Scale) filled by promotion Officers must have 899 Posts.
from Class II Officers; worked for at least a and period of four years (ii) 50% by Direct including the period of Recruitment in accor officiation or probation dance with the Karnataka Recruitment of Gazetted Probationers (Appoint ment etc.) Rules, 1966.
Unless the 1957 Rules remained in force till 1977, there would have been really no necessity to refer to them for the purpose of amendment; Badami 's case did proceed on the footing that the quota system in the Recruitment Rules continued till 1971 72.
It is not Mr. Kacker 's case that anything happened after 1972 which brought about dissolution of the quota.
We reject the contention of Mr. Kacker that the quota system had been abandoned and confirm the finding of the High Court in that regard.
It is, however, a fact that the ratio has been changed from time to time.
THIRD ASPECT As already pointed out, Badami 's case was concerned with these very rules and a similar situation though for a dif ferent period.
It is a decision of a three Judge Bench and we proceed on the footing that it is binding on us.
The High Court has pointed out in the leading judgment in Kadali 's case: "There are numerous Government orders sanc tioning, from time to time, temporary posts of Assistant Commissioner which are the same as the posts of Junior Scale Officers and extend ing the tenure of those temporary posts from time to time . . . . .
Though the Karnataka Administrative Service Cadre Rules mention of only permanent posts and not temporary posts in the cadre of Junior Scale Officers, the material produced before us clearly establishes that the cadre of Junior Scale Officers consisted of a consider able number of temporary posts at all material times.
In para 6 of the statement of objec tions filed on behalf of the State in these petitions, the State has admitted thus: "The cadre strength of KAS Class I Junior Scale Officers had itself undergone revision and figures 900 showed that 152 permanent posts and 133 tempo rary posts were available as is clear from the notification No. GAD 590 SMC 74 dated 3.3. 1976.
" However learned counsel for direct recruits on the following observations of the Supreme Court in Badami 's case at page 1564 of the report: "In E.P. Royappa vs State of Tamii Nadu, ; this Court said on the con struction of Rule 2 of the relevant Cadre Rules in that case that the State Government might add for a period to the cadre one or more posts.
But, the posts so added could not become cadre posts.
The temporary posts which are created due to exigencies of the service are posts which are outside the Cadre.
" From the above observations, it would appear that the Supreme Court took the view that temporary posts which were created due to exigencies of service, were posts which were outside the cadre.
In other words, the Supreme Court seems to have thought that temporary posts added to the cadre were ex cadre posts.
The attention of the Supreme Court does not appear to have been drawn to Note 2 to R 49 of the KCSR which classifies temporary posts into two categories, namely, posts created to perform the ordinary work for which permanent posts already exist in the cadre, and isolated posts created for the performance of special task unconnected with the ordinary work which a service is called upon to perform.
" The conclusion indicated in the decision of the learned Chief Justice of this Court in Badami 's case had been sup ported by reasons.
As it would appear at page 8 19 of the Reports, this aspect was raised as the first of the six contentions formulated for consideration of the Court.
Keeping the facts of the case in the background, three reasons were indicated in the judgment for the conclusion that quota covered permanent posts.
Reference was made to certain decisions of this Court as also.
to Rule 9 of the Probation Rules of 1959.
It was held that Rule 9 establishes the exclusion of temporary posts from the cadre.
Royappa 's case (supra) was relied upon for the same conclusion by saying that posts temporarily added to the cadre by exercise of power under a permissive rule would not become cadre posts and temporary 901 posts created due to exigencies of the service should be treated as posts outside the cadre.
The High Court in the judgment in Kadali 's case relied upon Note 2 of Rule 49 of the KCSR and thought that this Court was not properly in formed of the factual situation when in Badami 's case it said that temporary posts were not to be taken into consid eration for the purpose of working out the quota.
The note to Rule 49 has indeed no bearing on the point and we are of the view that there was really no justification for the doubt indicated by the High Court.
Apart from the fact that the conclusion of this Court in Badami 's case on this score is a binding authority on us, from an examination of the matter we also reiterate that conclusion to be correct.
FOURTH ASPECT The High Court in these cases has taken the view that the quota could be carried forward for a maximum period of three years and not beyond.
This has been done by placing reliance on the Constitution bench judgment of this Court in the case of Col. A.S. Iyer & Ors.
vs V. Balasubramanyam & Ors., ; Krishna Iyer, J. speaking for the Court at page 1058 of the Reports stated: "The total number of vacancies at the DSS level for each year shall be divided in the ratio of 2:1 (50% for the Army Corps and 25% for direct recruits).
The 50% reserved for the army corps shall be available to be filled by those candidates.
The 25% seats to be filled by direct recruits shall be filled only by such recruits.
Even if enough direct re cruits are not available they will not be filled by the army nominees but shah be kept vacant to be carried forward and filled in later years by such direct recruits.
A reason able period for the carry forward scheme will be three years, not more.
Likewise, military vacancies at the DSS level each year shall be filled only by such nominees.
If enough such hands are not available, a similar procedure of carry forward will govern.
For the SS posts 25% belongs to promotees from Class II offi cers.
The total number will be worked out by adding all the posts of SS, Deputy Directors and Directors and Surveyor General and allot ting 1/4th of it as the quota for Class II promotees for appointment as SS.
Such is the reasonable interpretation of the rule." The Court in that case had been called upon to decide the dispute of 902 seniority between the direct recruits and promotees within the civilian quota in the Survey of India service.
Survey of India (Recruitment) Corps of Engineer Officers, Rules, 1950 came for consideration of the Court.
The opinion expressed by this Court in the extracted paragraph was with reference to the rules before the Court.
The provisions as indicated in the extracted paragraph were somewhat peculiar.
After the quota was provided, there was a prohibition against filling up of the vacancies in the respective quotas from other categories even when suitable candidates were not available from within the reserved sphere.
This meant that the posts were allowed to go vacant even though in public interest the same should have been filled up on account of the bar in the rule.
It is in that background that this Court indicated that a reasonable period for the carry forward scheme would be three years and at the end of the paragraph indicated that that would be a reasonable interpretation of that rule.
Obviously nothing of general application was intended to be said and this Court did not certainly intend to lay down a time limit of general application.
The Mysore State Civil Service (General Recruitment) Rules, 1957 which admittedly applied to the services in question by Rule 17 provided: "Notwithstanding anything contained in these rules or in the rules of recruitment specially made in respect of any service or post, the appointing authority may (a) recruit by direct recruitment to a post reserved to be filled by promotion when it is satisfied that the person eligible to be considered for appointment by promotion is not fit to be also appointed, or (b) fill up by promotion any vacancy relating to a post which is required to be filled by direct recruitment when such vacancy is not likely to last for more than one year . . . " In exercised of the powers conferred under this rule the appointments in excess of the quota limit appear to have been made.
It is conceded that every appointment to the promotional post made in excess of the quota was at the commencement a temporary one.
The 1957 Rules were substitut ed in 1977 by the Karnataka Civil Services (General Recruit ment) Rules, 1977.
As far as relevant Rule 17 thereof pro vides: "Notwithstanding anything contained in these rules or in 903 the rules of recruitment specially made in respect of any service or post, the appointing authority may (a). . . . . . . . . (b). . . . . . . . . (c) fill by promotion temporarily on the basis of senioritycum merit a vacancy required to be filled by direct recruitment where selection to the post has not been finally made and there is likelihood of delay in making direct recruitment.
No such promotion shall be made unless a requisition has been sent to the Commission or to the appropriate recruiting authority for selection of a suitable candi date.
A candidate temporarily promoted under this sub rule shall not have any preferential claim for regular promotion and also shall not count the period of service in the promoted post for seniority; he shall revert to his original post on the expiry of one year or on the appointment of a direct recruit whichever is earlier . . . . . " The scheme in the Rules of 1977 clearly indicates that the transgression of the quota rule was a deviation of a tempo rary nature and was intended to be balanced in good time.
The conclusion of Ray, C.J. is fortified by the spirit of Rule 17 of the 1957 Rules as clarified in clause (c) of that rule in 1977.
The presence of such a rule in the field excludes the application of the ratio of Col. Iyer 's case to the facts hereof.
We do not think the High Court was right in overlooking the binding judgment of this Court in Bada mi 's case and preferring to apply the observations of Iyer, J in the latter decision made with reference to a different set of rules containing a different scheme of implementing quota.
The rule on this aspect of Badami 's case was quoted with approval by a two Judge Bench of this Court in P.S. Mahal & Ors.
vs Union of India, ; A lot of argument was advanced at the Bar particularly on the side of the promotees that serious prejudice was being caused to them by enforcing the quota rule.
Reliance was placed on a number of authorities of this Court begin ning with the case of A. Janardhana vs Union of India & Ors., ; ; G.S. Lamba & Ors.
vs Union of India & Ors.
, ; ; G.P. Doval & Ors.
vs Chief Secre tary, Government of U.P. & Ors, [1985] 1 SCR70; O.P. Singla &Anr.
vs Union of India & Ors., ; and D.S. Nakara & Ors.
vs Union of India, ; 904 In Lamba 's case (supra) the Court found that the promo tion was not styled as temporary or ad hoc or stop gap; on the other hand, the Court at page 459 of the judgment in the Reports referred to the case of N.K. Chandan & Ors.
vs State of Gujarat, ; where on the basis of a power of relaxation the Court had held such promotion to be regu lar.
The Court further held: "Once the promotees were promoted regularly to substantive vacancies even if temporary unless there was a chance of their demotion to the lower cadre their continuous officiation confers on them an advantage of being senior to the later recruits under Rule 21(4).
If as stated earlier by the enormous departure or by the power to relax, the quota rule was not adhered to, the rota rule for inter se senior ity as prescribed in Section 25(1)(ii) cannot be given effect.
In the absence of any other valid principle of seniority it is well estab lished that the continuous officiation in the cadre grade of service will provide a valid principle of seniority. . . " This principle appears to have been followed in this Court in some cases during the last two years or so.
The excep tional circumstances indicated in Lamba 's case for support ing the departure in the judicial opinion has been over looked in some of these cases and the resultant benevolent approach to protect the promotees in their claim for senior ity has been accepted without considering the special cir cumstances in which the ratio had been inducted in support of the departure.
In a precedent bound judicial system binding authorities have got to be respected and the procedure for developing the law has to be one of evolution.
It is not necessary for disposal of these matters before us to go into that aspect except noticing the existence of distortion in the field.
The rationalisation of the view in a way known to law is perhaps to be attempted some day in future.
In the present batch of cases the law being clear and particularly the mandate in the rule being that when recruitment takes place the promotee has to make room for the direct recruit, every promotee in such a situation would not be entitled to claim any further benefit than the advantage of being in a promo tional post not due to him but yet filled by him in the absence of a direct recruit.
One aspect which we consider relevant to bear in mind is that the promoted officer has got the advantage of having been promoted before it became his due and is not being made to lose his 905 promotional position.
The dispute is confined to one of seniority only.
The advantage received by the promotee before his chance opened should be balanced against his forfeiture of claim to seniority.
If the matter is looked at from that angle there would be no scope for heartburning or at any rate dissatisfaction is expected to be reduced so far as the promotees are concerned.
LAST ASPECT In Karam Pal vs Union of India, ; a three Judge Bench of this Court to which one of us was a party indicated as follows: "In a vast country such as ours, strong and independent bureaucratic set up is indispens able.
At the same time it is equally necessary that the service from top to bottom must be alive to the fact that it is its obligation to maintain proper attitudes, discipline and duty oriented working.
While it is the right of every person in the service set up to expect just and fair treatment in regard to his employment frequent litigation between him and the State involving countless other co employees in the service in the battle is a deviation from the right direction.
It is true that very often instances come to light where the grievance is genuine and the treatment meted is unwarranted and uncalled for.
Govern ment in a democratic polity runs on impersonal basis but on the cadinal code that everyone shall perform his duty." This Court further observed, "There has been a phenomenal rise in service disputes in the last three decades.
It is time that serious attention is devoted to discover the reason for it and take effective steps to ensure curtailment thereof.
Whether such litigations come before Courts or Tribunals is of no consequence here.
Frequent litigations between the States and its employees ultimate ly affect the efficiency of service and bring about indiscipline, lack of loyalty and an attitude of indifference. ' ' We are struck by the innumerable rules that have been framed within a period of about thirty years to cover the field relating to constitution, 906 recruitment and provision for other conditions of service.
It is proper that service rules should be simple making reasonable provision for necessary aspects.
While framing such rules, the relevant provisions of the Constitution and laws in force have to be kept in view.
There should be no frequent alteration of the service rules through.
Exigencies of circumstances and unforeseen situations will certainly justify alterations.
Those will be indeed rare occasions.
Experience shows that legal battles are fought in court between government servants whether individual pitched against individual or group against group; this embitters relationship inter se and often results in a switch over of attention from public duty to personal cause.
Frequent litigations against the State or higher authorities in the hierarchies of administration, wipe out reverance, loyalty and the sense of discipline and substitute those by anger, disrespect and rancour.
In the process fellow feeling is lost, the sense of brotherhood vanishes.
The net resultant of all is deprivation of the efficiency of the bureaucratic community to serve the society.
The undue growth of service litigation within these four decades of independence clearly calls for these observations.
As and when, occasion has arisen the Court has sought to draw the attention of the State as the employer as also the Government servants to this aspect of the matter.
This has been done not with a view to subjecting any litigant to undue criticism but with the fond hope that it would help the problem to receive adequate attention.
We are surprised that the words spelt out in the different judgments have fallen on deaf ears and created no stir.
Thereby the most powerful wing in the administrative set up is gradually moving away from its designated path.
We have come across cases where officers have been in court litigating over service disputes for about twenty five to thirty years of their career which would mean almost three fourths of their service period.
What would be the contribution of such officers to the public service can well be imagined.
Very often a public officer is forced into litigation as he gets no justice in the hands of the superior.
There are also several instances where an officer drags the employer into litigation without a cause of action.
These are matters which must be taken into account without further loss of time and with fortitude so that the most effective wing of the administration does not further lose its serviceability.
A public servant whatever his status be is in the position of a trustee.
Social power vests in him for the purpose of rendering service to the community.
Every public servant has to be cognizant to that obligation.
Once the level of that consciousness grows up there is 907 bound to be a corresponding fail in the attitude to litigate over small issues.
What this Court said in the case of Dr. T.G. Siddapparadhya & Ors., has to be borne in mind.
These were the words then said: "The canker of litigiousness has spread even to a sphere of life where discipline should check ambition concerning personal preferment.
A teacher is justified in taking legal action when he feels that a stigma or punishment is undeserved but he is expected to bear with fortitude and reconcile himself to his lot suppressing disappointment when he finds a co worker raised to a position which he him self aspired after".
What applies to a teacher may perhaps well apply to everyone in positions of social trust.
It is for the privileged public servant as also his employer to share this philoso phy.
The net result of the discussion above requires that rule in Badami 's case has to be given full effect.
The appeals and writ petitions of the direct recruits have to succeed and those by the promotees have to fail.
We hope and trust that the State of Karnataka will not demote anyone who has been in a promotional post for several years to the Class II service as a consequence of this decision but the Gradation List has got to be adjusted to fit into the prin ciples indicated in the judgment.
No justification was shown to us as to why the State of Karnataka failed to comply with its obligation of making recruitments in terms of the quota.
Once the State frames rules they are binding on the State and like individuals the State has got to regulate its conduct in accordance with the rules nay, the State has to observe it all the more.
We hope and trust that the State of Karnataka in the years ahead will comply with the quota rule with regularity so that a litigation of this type may not arise again.
If any party has to be directed for payment of costs in this bunch of litigation it must be the State.
We, however, do not want to saddle the State with costs for two reasons firstly, we do not want the employees to have a feeling that in the fight their employer has been vanquished and secondly we entertain a fond hope that there will be no reoccurrence.
In course of arguments we had suggested to learned counsel for the parties to furnish recast Gradation List on the basis of claims advanced before us (1) showing how it would be when full claim of the promotees is granted and (2) how different it would look when the 908 total claim of the direct recruits is allowed.
Such charts have been prepared and furnished and we find that the proc ess of pushing up and down would be inevitable but would be within reasonable limits and no irreparable prejudice was apparent.
The appeals and writ petitions of the direct recruits are allowed, and the appeals by the promotees are dismissed.
There shall be no order for costs throughout.
S.L. Appeals and Petitions dis posed of.
| The deceased husband of the respondent leased out the entire portion of his house, except a big hall, to tenant in Chandigarh.
He was then putting up in a Government quarter.
After his death, his widow the respondent, leased out the hall to the appellant on April 1, 1981 for a period of 11 months on a monthly rent of Rs.650.
The Government quarter which had been allotted to her husband was transferred to the name of her eldest son.
The respondent filed two applications, more or less concurrently, in February 1982 against tenants of both the portions of the house seeking their eviction oh grounds that they had changed the user of the premises to non residential purposes, and that she bona fide required the premises for her own use and occupation.
The Rent Controller and the Appellate Authority held that the first tenant had changed the user of the premises and ordered his eviction.
Insofar as the appellant was concerned, both the authorities found against the respondent on both the grounds and dismissed the action for eviction.
The High Court dismissed the revision preferred by the first tenant, but allowed the one filed by the respondent and ordered the eviction of the second tenant too.
The first tenant abided by the order of eviction and surrendered possession to the respondent.
The second tenant, however, appealed by special leave to this 553 Court.
It was contended that when the Rent Controller and the Appellate Authority have rendered concurrent findings of the fact, the High Court was not entitled to disregard those findings, and come to a different conclusion of its own, that the respondent could not seek recovery of possessing of the hail by means of an application under section 13(3)(a) (i)(a) of the East Punjab Rent Restriction Act, 1949 for residen tial use because even of the hail had been let out for residential and nonresidential purposes, the premises would constitute a non residential building as per the amended definition under the East Punjab Rent Restriction (Chandi garh Amendment) Act, 1982, that he was entitled to raise these questions though they had not been raised earlier because they were questions of law, that as per the second proviso to section 13(3)(a) of the Act the respondent was not entitled to apply once over again for eviction of a tenant on the ground of bona fide requirement after having obtained an earlier order on the same ground.
Dismissing the appeal, HELD: 1.1 The findings of the Rent Controller and the Appellate Authority are vitiated by inherent defects.
The High Court was, therefore, justified in taking the view that those findings have no binding force on the revisional court.
[565E] 1.2 The rule that when the courts of fact render concur rent findings of fact, the High Court would not be entitled to disregard those findings and come to a different conclu sion of its own, would apply where the findings have been rendered with reference to facts.
In the instant case, both the statutory authorities have based their findings on conjectures and surmises and lost sight of relevant pieces of evidence which have not been controverted.
When the evidence of the respondent and her son, which has not been challenged, was that the Government quarter consisted of only one bed room, one store, one kitchen and one small dining room and nothing more, it has been construed by the authorities as comprising of three bed rooms and held that as there was enough accommodation for the entire family she was not likely to vacate it.
When the respondent wanted the entire house to be vacated by the two tenants so that she and her family members could occupy the whole house, the authorities have proceeded on the basis that the respondent was seeking recovery of possession of one hail alone for her residential needs and held that the entire family could not manage to live in a single hail.
They have failed to take note that the respondent had con temporaneously initiated proceedings against the 554 other tenant also for recovery of possession of the remain ing portion of the house leased to him.
Those proceedings were also before the very same Rent Controller and the Appellate Authority and they themselves had ordered the eviction of the other tenant.
The respondent had clearly stated in her evidence that she required the property for her own use and for her children and that she had filed the ejectment petition against the other tenant also.
That evidence was not and indeed could not be challenged.
When the respondent had not demanded increase of rent, even as per the admission of the appellant, the authorities have proceeded on the basis that the respondent was not likely to forego the income derived by way of rent for the hall.
They have failed to give due consideration to the respondent 's statement that her daughter and sons were all fully grown up and she wanted to perform their marriages and as such she was very much in need of the entire house, including the hall, for her occupation.
All these findings have been rendered on either non existent or fictitious material.
They cannot, therefore, be construed as findings of fact and once they cease to be findings of fact, they stand denuded of their binding force on the appellate or revisional court.
[558H; 559A H] Hiralal Vallabhrara vs Sheth Kasturbhai Lalbhai and others, AIR 1967 S.C. 1653, referred to.
2.1 The finding rendered by the Rent Controller and the Appellate Authority about the purpose for which the hall was let out were vitiated by several errors of fact and law.
The appellant, therefore, was not entitled to rely on those findings and dispute the respondent 's right to seek his eviction under section 13(3)(a)(i)(a) of the Act.
[563C] 2.2 The pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case.
[560H] In the instant case, the tenant had averred in his written statement that the hall was taken by him for the purpose of his residence and for running his clinic but when he entered the witness box he propounded a different case that the hall had been taken on lease only for non residen tial purposes.
The statutory authorities failed to notice the perceptible manner in which the appellant had shifted his defence.
[560G] 2.3 Yet another factor which vitiates the findings of the statutory authorities is that both of them have over looked section 11 of the Act and the sustainability of any lease transaction entered in contravention of that 555 provision which interdicts conversion of residential build ings into nonresidential ones without the written consent of the Rent Controller.
[561C D] In the instant case the parties had not obtained the consent in writing of the Rent Controller for converting the hall in a residential building into a clinic.
Such being the case the appellant cannot get over the embargo placed by section 11 by pleading that the respondent was well aware of his running a clinic in the hall and that she had not raised objection at any time to the running of the clinic.
[561D E] Kamal Arora vs Amar Singh & Ors., [1985] SCC (Supplemen tary) 481, referred to.
Dr. Gopal Dass Verma vs Dr. S.K. Bhardwaj & Anr., [1962] 2 SCR page 678, distinguished.
Having taken a categoric stand during the enquiry that he had taken the hail on rent only for running his clinic and not for his residential needs as well, the appel lant cannot reprobate and contend that the lease of the hall was of a composite nature, to seek the benefit of the en larged definition of a 'non residential building ' given in the Amendment Act.
A pure question of law can be raised for the first time before the High Court or the Supreme Court even though the question had not been raised before the trial court or the appellate court.
But in the instant case, the conten tions advanced by the counsel on the nature of user of the hail pertain to mixed questions of fact and law.
Moreover these contentions run counter to the legislative direction contained in section 11 of the Act prohibiting conversion of a residential building into a non residential one without the written consent of the Rent Controller.
These contentions cannot, therefore be said to be pure questions of law.
Management of the State of Bank of Hyderabad vs Vasudev Anant Bhide and others; , , referred to.
The eviction proceedings were initiated by the re spondent against both the tenants concurrently and not after an interval of time.
As such, merely because the respondent succeeded in one of the petitions and failed in the other it cannot be said that the continuation of the proceedings in that case in appeal or revision would amount to applying once over again under the Act to seek eviction of a tenant on the ground of bona fide requirement.
|
on (Civil) No.3 of 1990 etc.
(Under Article 32 of the Constitution of India).
K.T.S. Tulsi, Addl.
Solicitor General, M.K. Ramamurthy, Govinda Mukhoty and N. Santosh Hegde, Ms. C. Ramamurthi, M.A. Krishna Moorthy, M.A. Chinnaswamy, H. Subramaniam, Ms. C.M. Chopra, A Bhattacharjee, G.S. Chatterjee, H.K. Puri, M.P. Jha, Serva Mitter, R.K. Maheshwari, Vineet Maheshwari, Ms. Niranjan Singh, B.D. Prasad, K. Swamy and B.K. Prasad for the appearing parties.
The Judgment of the Court was delivered by KASLIWAL, J.
All these cases are an upshot of the case R.D. Gupta & Ors.
vs Lt. Governor, Delhi Administration & Ors.
; , It is not necessary for us to give the background and history of the constitution of the two main civic bodies namely, New Delhi Municipal Committee (in short 'MDMC ') and the Municipal Corporation of Delhi (in short 'MCD '), in the Union Territory of Delhi as the same has already been mentioned in detail in the above R.D. Gupta 's case (supra).
We would thus mention only such details which are relevant and necessary for the purpose of deciding the above cases.
All the above cages relate to the employees of the NDMC who are claiming the benefit of the report of Shiv Shankar Committee (in short 'SSC ') in respect of the grant of pay scales 416 as allowed to other employees of NDMC in R.D. Gupta 's case.
The Government accepted the report of the Third Pay Commission and granted pay scales as recommended to the employees of NDMC as well as to the MCD.
The technical staff of the Delhi Electricity Supply Undertaking (in short 'DESU ') claimed higher scales of pay as they were not satisfied with the pay scales recommended by the Third Pay Commission.
The Government therefore constituted Shiv Shankar Committee to go into the question of revision of pay scales of the technical staff of DESU.
The SCC submitted its report in 1973 according to which higher pay scales were allowed to the technical staff of DESU.
The non technical/ministerial staff of DESU who were not covered by the report of the SSC demanded that they should also be granted pay scales as recommended by the SSC.
The DESU considered the demand of the ministerial staff at its meeting held in May 1973 and decided to revise the pay scales of the non technical staff also working in DESU.
Since the technical as well as the ministerial staff working in the DESU were granted the pay scales recommended by SSC, the NDMC also.
by its resolution No.154 dated 19.10.1973 allowed the benefits of pay scales as recommended by SSC to its staff working in the electricity wing.
In view of the fact that the benefit of the SSC pay scales was granted by the NDMC to the ministerial staff working in the electricity wing only, the employees working in the general wing of the NDMC also raised a demand for granting them also the benefit o f the pay scales recommended by SSC.
Many orders were passed from time to time and writ petitions Were also filed by the concerned parties, but we do not think it necessary to give the details as the same have been narrated in R.D. Gupta 's case and we come to the resolution of the NDMC dated 27.6.1978 constituting the electricity wing with effect from 1.5.1978 or such subsequent date as may be fixed composed of 28 posts of pump drivers, two posts of welders, three posts of carpenters and one post of pump.
mechanic and 496 posts of ministerial staff and to give all of them scales of pay as per SS Committee Report.
Three petitions under Article 226 of the Constitution viz. CW Nos.
1231, 557 and 280 of 1978 were filed in the Delhi High Court.
We are only concerned with the grievance of the ministerial staff who were claiming to be treated at par with the ministerial staff of the electricity win in the matter of pay and allowances.
The ministerial staff in the general wing having not received the full relief in the High Court filed C.A. 2969 of 1973 417 before this Court.
It was claimed in the said appeal that instead of restricting the payment of SS Committee pay scales to the 496 ex cadre posts in the electricity wing and directing the NDMC to fill up those posts on the basis of seniority cum option, the High Court should have directed the NDMC to give the SS Committee pay scales to all the members of the ministerial staff.
In R.D. Gupta 's case, this Court decided many appeals by a common order, but we are only concerned with the C.A. No. 2969 of 1983 which relates to the ministerial staff in the general wing of the NDMC.
It was contended by the appellants in the said appeal that the electricity wing of the NDMC was not a distinct and independent unit entitled to have its own scales of pay and secondly the ministerial staff of the NDMC belonged to a unified cadre and the staff members were liable to transfer from one branch of the NDMC to another and as such the NDMC cannot create a cadre within a cadre and fix different scales of pay for those in the carved out cadre.
It was also urged that the nature of the duties performed by the ministerial staff in all the three wings of the NDMC is more or less similar, if not identical, and hence the well established rule of 'equal pay for equal work ' should govern the staff members.
This Court in R.D. Gupta 's case held that the grievance of the ministerial staff of the general wing was well founded.
The ministerial staff in the NDMC constituted a unified cadre.
The recruitment policy for the selection of the ministerial staff is a common one and the recruitment is also done by a common agency.
They are governed by a common seniority list.
The ministerial posts in three wings of the NDMC, viz. the general wing, the electricity wing and the water works wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was held that it would be futile to say that merely because a member of the ministerial staff had been given a posting in the electricity wing, either due to force of circumstances or due to voluntary, preferment, he stands on a better or higher footing or in a more advantageous position than its counterparts in the general wing.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
After the above decision in R.D. Gupta 's case, the employees of NDMC working in different departments have filed the above writ petitions under Article 32 of the Constitution or Civil Miscellaneous Petitions in 418 R.D. Gupta 's case which have been directed by this Court to be treated as Writ Petitions by order dated 17.11.1989.
In all these cases the employees have prayed for granting the same pay scales including the ex gratia benefits as was recommended by SSC.
Writ Petition No.1 of 1990 has been filed by NDMC Workship Employees Association on behalf of the employees of Auto Workship of NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding the posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
In Writ Petition No.3 of 1990, the petitioners were initially appointed as Junior Clerks and subsequently promoted to the posts of Junior Technical Assistants (Hindi) also knows as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
In Writ Petition No.292 of 1990, the petitioners are pump drivers in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators under the NDMC.
The short controversy to be decided in the above cases is whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of SSC pay scales? It is no longer in controversy now that the ministerial staff working in all the wings are also entitled to the same benefit of SSC pay scales as has been given to the ministerial staff working in the electricity wing of the NDMC.
It has already been decided in R.D. Gupta 's case that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial post in the three wings of the NDMC viz., the General Wing, the Electricity Wing the the Water Works Wing are interchangeable posts and the postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It may be further noted that the NDMC itself in order to extend the benefit of R.D. Gupta 's case in a meeting dated 9.6.1988 resolved as under: "IMPLEMENTATION OF BENEFIT OF S.S. SCALE SLP.
11270 OF 1982 SHRI R.D. GUPTA 419 AND OTHERS VERSUS LG.
DELHI AND OTHERS.
The Committee as per the advice of the Law Deptt.
and the opinion given by our counsel, justice V.D. Mishra on 26.2.1988 had decided that following categories of employees who constitutes 496 posts created by the.
NDMC while forming the Electricity Cell vide Reso.
passed on 27.6.1978 should be extended the benefits: 1.
Office Supdt.
HA/Accountant 3.
Personal Asstt.
Clear 5.
Stenographers 6.
Jr. Clerk 7.
Asstt.
Storekeepers 8.
Adrema Operators 9.
Asstt.
Adrema Operators 10.
Asstt.
Record Keepers 11.
Daftry 12.
Peon 13.
Bill Collector 14.
Sorter 15.
Ferro Printer 16.
Chowkidar 17.
Sewerman 18.
Sweeper Accordingly, the Committee passed orders to extend the benefits vide orders dated 26.2.1988 to all the above 420 categories.
These employees have already been paid a part of the arrears and salaries under S.S. Scale.
The CAP while checking the pay fixation have required a formal resolution of the Committee for processing the cases.
Accordingly, this is noted to the Committee for information in continuation of Reso.
No.26 dated 9.2.1988.
ADMINISTRATOR 'S DECISION Information noted.
" By another order dated 27.7.1988 the benefit of S.S. Committee 's scales was extended to the following cadre of employees: "NEW DELHI MUNICIPAL COMMITTEE DATED: 27.7.1988 OFFICE ORDER Under the orders of the Administrator dated 18.7.1988 the following allied categories of sweepers are extended the benefit of S.S. Scales in terms of Reso.
No.26 dated 9.2.1988 read with Reso.
No.52 dated 9.6.1988 as they form the common cadre of sweepers.
Lorry Belders 2.
Dumping ground beldars 3.
Bhisties 4.
Rat catchers 5.
Verandha Beldars 6.
Hawker Raid Van beldars 7.
Sweepers cum chockidars 8.
Dog catchers.
Sd/ Asstt.
(Health) 421 Copy to: 1.
All Estts.
: with the request to fix the pay of the above mentioned categories in the S.S. Scales.
DS (E) 3.
A.S. (AIC) 4.
P.A. to Secy.
NDMC 5.
C.A.0.
O.S. (CBS) 7.
Supdt.
A/Cs. 8.
File 9.
P.A. to F.A. 10.
OS (CE 1) The case is laid before the Committee of Officers presided over by the Administrator for consideration and decision if the benefit of Supreme Court Judgment dated 7.8.1987 be extended to all the Drivers in anticipation of the approval of the Lt. Governor, Delhi and in the anticipation of the confirmation of the Minutes of the Committee.
ADMINISTRATOR 'S DECISION Resolved by the Committee of Officers and decided by the Administrator that benefit of Supreme Court judgment dated 7th Aug. 87 is extended to all the Drivers of the Committee in the anticipation of the approval of the L.G. Delhi.
The action be taken in anticipation of confirmation of the minutes of the Committee. ' In Writ Petition No.1 of 1990, the contention of the petitioners is that they are employees working in the Auto Workshop of NDMC which is a part and parcel of the electricity establishment and their duties are mini , sterial in nature.
It has been further contended that the Auto Workshop ' 422 employees have to work throughout on the ground beneath the vehicles belonging to all departments whether it belongs to electricity, water or the administrative staff and they have to work for such time till a vehicle is fit for traffic and have to maintain the vehicle not only for administrative staff but also for the electrical, health, water etc.
It has been further urged that Auto Workshop employees are part and parcel of electrical wing and their appointments, promotions, pension, salaries, increments, transfers, main tenance of personal filing is done by the electricity establishment.
Moreover, their services are inter transferable such as drivers, cleaners, helper, peon, chowkidar, sweepers, fitters, khalasis working in the Auto Workshop can be and are transferred to other departments.
It has also been urged that a discriminatory treatment has been given in the case of the petitioners inasmuch as a fitter which is a promotional post from amongst peon or chowkidar or sweeper is getting less pay scale than the peon or chowkidar and likewise clearner which is a promotional post is getting less pay scale than a chowkidar, peon and sweeper.
We find force in the submission of the petitioners.
As already mentioned above the benefit of the pay scales recommended by the SSC has been allowed to the NDMC to the 18 categories of employees which includes, daftry, peon, chowkidar, sweeper etc.
and we find no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC.
In Writ Petition No.5 of 1990, the petitioners are Class IV employees of NDMC holding posts of Duplicating Machine Operators and Gunmen/Dog Shooters.
Needless to say that NDMC has allowed the benefit of SS Committee 's scales to Rat Catchers and Dog Catchers vide order dated 27.7.1978 as already quoted above and we find to valid justification for denying such benefit to Duplicating Machine Operators and Gunmen/Dog Shooters.
When such benefit has been allowed to Rat Catchers and Dog Catchers, there is no essential difference in the job work done by Genmen/Dog Shooters.
The Duplicating Machine Operators are also Class IV employees and such post is transferable and interchangeable from other Class IV employees of the NDMC who have already been granted the benefit of SSC 's pay scales vide order dated 9.6.1988 already mentioned above.
In Writ Petitoin No.3 of 1990, the petitioners are working as Junior 423 Technical Assistants (Hindi) and are also known as Translator (Hindi).
In Writ Petition No.13 of 1990, the petitioner is working on the post of Assistant Store Keeper.
Both the above posts of Junior technical Assistants (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
Learned counsel appearing for the NDMC was unable to show any material on record for taking a contrary view.
In Writ Petition No.292 of 1990, the petitioners are pump drivers employed in the water supply, horticulture and civil wings of NDMC.
The benefit of SSC pay scales has already been extended to the pump drivers in the electricity wing and there in no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
In Writ Petition No.1109 of 1990, the petitioners are the employees of Junior Navyug School run by NDMC.
In our view, the employees of the school though run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of SSC pay scales on the basis of R.D. Gupta 's Judgment.
It is not their case that their posts are interchangeable or transferable from any other post under NDMC.
The nature and the duties performed by the petitioners are totally different and they cannot be granted the benefit of the SSC pay scales on the basis of any equality with the other employees of NDMC who have been granted such benefit.
In Writ Petition No.409 of 1990, the petitioners are working as Telephone Operators.
The Telephone Operators fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in NDMC.
That apart the petitioners are Trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and ' as such are not entitled to the benefit of SSC pay scales on the basis of R.D. Gupta 's case.
In the above cases we are only concerned with the granting of benefit of SSC pay scales on the basis of R.D. Gupta 's case and as such we are holding that the petitioners working in the Navyug School in Writ Petition No.1109 of 1990 and Telephone Operators in Writ Petition No. 409 of 1990 are not entitled to the benefit of the SSC pay scales.
These petitioners are free to make their claim if any, for the revision of their pay scales to the competent authorities.
424 In the result, we allow Writ Petition Nos. 1, 3, 5, 13, and 292 of 1990 and grant them the benefit of SSC pay scales in the same manner as granted to other employees vide Resolution No.26 dated 9.2.1988 read with Resolution No.52 dated 9.6.1988.
The respondent Delhi Administration and NDMC shall take appropriate steps within three months of the notice of this order and make payment of the entire arrears and grant future benefit in the pay scales as recommended by SS Committee.
The Writ Petition Nos.1109 of 1990 and 409 of 1990 are dismissed.
No order as to costs.
| The New Delhi Municipal Committee by its resolution dated 19.10.
1973 extended the benefit of higher pay scales recommended in the Shiv Shankar Committee Report, to its staff working in the electricity wing.
Following this, the employees working in the general wing of the NDMC also raised demand for granting them the benefit of those pay scales.
In the meantime, by its resolution dated 27.6.1978 the NDMC constituted, with effect from 1.5.1978, the electricity wing composed of 28 technical and 496 ministerial posts and decided to give all of them scales of pay as per S.S. Committee 's Report.
In the writ petitions filed in the High Court the ministerial staff failed to receive full relief.
This Court in R.D. Gupta & Ors. etc.
vs Lt. Governor, Delhi Administration & Ors.
; , found that the entire ministerial staff in the NDMC constitutes a unified cadre.
The ministerial posts in the general wing, the electricity wing and the water works wing are interchan geable posts and postings are made from the common pool according to administrative convenience and exigencies of service and not on the basis of any distinct policy or special qualifications.
It was thus held that all sections of the ministerial staff should be treated alike and all of them were entitled to the same scales of pay for the work of equal nature done by them.
In order to extend the benefit of R.D. Gupta 's case, the NDMC by its order dated 9.6.1988, revised the pay scales of ' 18 categories of employees who constituted 496 posts forming the electricity cell.
By another order 414 dated 27.7.1988 the NDMC extended the benefit of S.S. Committee 's scales to eight allied categories of sweepers, subsequently, all the drivers of the NDMC were extended benefit of R.D. Gupta 's case.
On the question: whether the petitioners fall within the cadre of ministerial staff or fall in similar cadres which have already been granted the benefit of S.S. Committee 's pay scales.
Disposing of the writ petitions, the Court, HELD: 1.
There is no valid justification for discriminating the employees of the Auto Workshop which forms a part and parcel of the electricity wing of the NDMC, since the benefit of the pay scales recommended by the S.S. Committee has been allowed by the NDMC to the 18 categories of employees which include daftry, peon, chowkidar, sweeper etc.
[422D E] 2.
The NDMC having allowed the benefit of S.S. Committee 's scales to rat catchers and dog catchers vide order dated 27.7.1988, there is no valid justification for denying such benefit to duplicating machine operators and gunmen/dog shooters.
There is no essential difference in the job work done by gunmen/dog shooters.
The post of duplicating machine operators in transferable and interchangeable from other class IV employees of the NDMC who have already been granted benefit of S.S. Committee 's pay scales vide order dated 9.6.1988.
[422E] 3.
Both the posts of Junior Technical Assistant (Hindi) and Assistant Store Keeper are such posts which clearly fall within the ministerial cadre.
They are thus entitled to the benefit of S.S. Committee 's scales.
[423B] 4.
The benefit of S.S. Committee 's pay scales having already been extended to the pump drivers in the electricity wing, there is no valid ground or justification to deny such benefit to the pump drivers working in the water supply, horticulture and civil wings of NDMC.
[423C] 5.
The employees of Junior Navyug School run by NDMC fall in a different cadre altogether and as such cannot claim the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's judgment.
Their posts are not interchangeable or transferable from any other post under the NDMC.
The nature and the duties performed by them are totally different and they cannot be granted the benefit of the S.S. Committee 's pay scales 415 on the basis of any equality with the other employees of NDMC who have been granted such benefit.
[423D E] 6.
The telephone operators working in the NDMC fall in a separate cadre and their posts are neither interchangeable nor transferable with the other members of the service in the NDMC.
That apart, the petitioners are trained Telephone Operators and Senior Telephone Operators and as such do not fall within the category of ministerial staff and are not entitled to the benefit of S.S. Committee 's pay scales on the basis of R.D. Gupta 's case.
[423F] 7.
The respondent Delhi Administration and NDMC are directed to take appropriate steps within three months and make payment of the entire arrears and grant future benefit in the pay scales as recommended by S.S. Committee.
[424B]
|
Civil Appeal No. 2321 of 1968.
Appeal by Special Leave from the Judgment and Order dated the 1st November, 1968 of the Madhya Pradesh High Court, Indore Bench in Civil Miscellaneous Appeal No. 111 of 1967.
C.K. Daphtary and B. Dutta for the Appellant.
P.C. Khanna for Respondent No. 1.
The Judgment of the Court was delivered by J.
C. SHAH, AG.
C.J. Pratap Singh, Preetam Singh and Diwan Singh are three brothers.
Pratap Singh and Preetam Singh carried on business in partnership, at three places (1) Pipliya in Madhya Pradesh, in the name of the Jaora Slate Pencil Works; (2) Bombay, in the name of Partap Brothers; and (3) Nagpur, in the name of Nice Tiles and Marble, Nagpur.
By an agreement dated December 18, 1965 disputes between Pratap Singh and Preetam Singh relating to the partnership business were referred to the arbitration of their brother Diwan Singh.
The arbitrator entered upon the reference, but he was unable to complete the reference within four months.
Diwan Singh applied to the Court of the Subordinate Judge, Delhi, under section 28 of the Arbitration Act for extension of time.
Preetam Singh objected to the jurisdiction of the Subordinate Judge at Delhi to entertain the application.
The Subordinate Judge overruled the objection and granted extension of time for making the award.
A revision application preferred against the order is pending before the High Court of Delhi.
778 In the meanwhile Preetam Singh filed an action in the Court of the Additional District Judge, Mandsaur against Pratap Singh and Pritipal Singh (brother in law of Preetam Singh) for a decree for rendition of account of the dealing in respect of the Jaora Slate Pencil Works and for appointment of a receiver.
By amendment of the plaint a claim for dissolution of partnership was also made.
Pratap Singh applied under section 34 of the for stay of the suit, and the application was granted.
But the Additional District Judge directed that a receiver be appointed of the properties of the Jaora Slate Pencil Works at Pipliya.
Against that order an appeal was carried to the High Court of Madhya Pradesh.
The High Court was of the view that a case was made out for the appointment of the receiver.
The Court further held that having regard to the proceedings pending in the High Court at Delhi it was a case in which without adjudicating upon the jurisdiction of the Subordinate Judge at Delhi, the application for appointment of the receiver was maintainable.
Against that order, with special leave, this appeal has been preferred.
The only question argued in this appeal is about the jurisdiction of the Additional District Judge, Mandsaur to entertain the suit and to appoint a receiver.
The relevant statutory provisions may in the first be noticed.
By cl. 3 of Sch. 1 of the the arbitrator is required to make an award within four months after entering on the reference.
Section 28 of the Act provides that the Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time the time for making the award, and the expression "Court" is defined in section 2 (c) as meaning "a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but * * * * * Section 31 of the Act provides.
(1) . . (2) . . (3) All applications regarding the conduct of arbitration 779 proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court.
(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and no other Court.
" Section 34 of the Act provides for stay of a suit.
In so far as it is material it enacts.
"Where any party to an arbitration agreement . commences any legal proceedings against any other party to the agreement . in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the application was, at the time when the proceedings were commenced, and still remains ready and willing to do all things necessary to the proper conduct of the arbitration such authority may make an order staying the proceedings.
" An application for stay of the suit pending before the Additional District Judge, Mandsaur was made by Pratap Singh and it was granted.
But thereby the jurisdiction of the Court to pass appropriate orders for protecting the subject matter of the suit was not excluded.
An application for appointment of a receiver could be granted notwithstanding the order of stay of suit under section 34 of the .
But it was urged that it is open to the Court as defined in section 2 (c) under section 41 read with the Schedule to the 780 to appoint a receiver of any other property in dispute or in relation to any proceedings before the arbitrator, and by conferment of that power, the power of the Civil Court in a suit to appoint a receiver is excluded.
On that premise it was urged that the only Court competent to entertain an application for appointment of a receiver was the Subordinate Judge 's Court at Delhi and not the Court of the Additional District Judge, Mandsaur.
It is true that an application for extension of time to make the award was made to the Court of the Subordinate Judge, Delhi and normally the parties would have to resort to that Court for interim relief in respect of the subject matter of the dispute before the arbitrator.
But so long as the jurisdiction of the Court of the Subordinate Judge, Delhi to entertain the application for extension of time was in dispute the Civil Court which is seized of the suit was entitled to make appropriate orders for preserving the property which is the subject matter of the suit.
We are therefore of the view that the Civil Court at Mandsaur was competent to appoint a receiver of the property until the question about the jurisdiction of the Delhi Court under section 31 (4) to entertain applications arising out of the order of reference is finally determined.
After the High Court of Delhi determines that question, receiver appointed, in order to comply with the requirements of the statute, may be made subject to the jurisdiction of the Delhi Court, if it be held that Delhi Court had jurisdiction to entertain the application.
It was urged that the suit filed at Mandsaur only relates to the assets, of the partnership at Pipliya within the State of Madhya Pradesh and does not relate to the properties at Bombay and Nagpur and that by the expedient of obtaining an order for appointment of a receiver Preetam Singh has managed to remain in possession of the properties at Bombay and Nagpur to the exclusion of Pratap Singh.
We cannot at this stage, decide whether the suit in so far as it relates to the assets of the partnership at Pipliya alone is maintainable.
The arbitration proceedings undoubtedly relate to all the assets of the Partnership and if Preetam Singh, as contended by Pratap Singh, has remained in possession of the properties of the partnership at Bombay and Nagpur to the exclusion of Pratap Singh and it is just and equitable to have a receiver appointed, his remedy is to com 781 mence appropriate proceedings for that purpose and to apply to a competent court to appoint a receiver of the properties.
The appeal fails and is dismissed.
There will be no order as to costs.
P.B.R. Appeal dismissed.
| After the land in suit was sold in June, 1957, for an ostensible sum of Rs. 1,35:000/ , the appellants and respondents 1 to 3 instituted two separate suits for pre emptions in which the sale price inserted in the sale deed was also questioned.
The two suits were consolidated and the plaintiffs in each suit were joined as defendants in the other suit under section 38 of Punjab Pre emption Act, 1913.
The vendees thereafter admitted the rights of preemptors in both the suits conceding that a decree may be passed in their favour.
The appellants accepted the sale price of Rs, 1,35,000 on or before 30th July 1958 and although respondents 1 to 3 wanted this issue to be decided on the merits, the trial court passed a decree in both the ,suits granting respondents 1 to 3 the right to preemption in the first instance on payment of Rs. 1,35,000 and, on their failure to so pay, holding the appellants entitled to exercise the right to pre emption on payment of the said amount on or before 30th October 1958.
In an appeal to the High Court, respondents 1 to 3 challenged the correctness of the amount of the deposit to be made.
Allowing the appeal, the High Court reduced the amount of deposit to Rs. 1,05,800/ and directed respondents 1 to 3 to deposit the amount within three months.
In an appeal by the appellants to this Court against the decision of the High Court, a preliminary objection was taken challenging the appelants right to appeal it was contended that the appellants had based their right to pre emption in their suit on the ground of their being proprietors of the village where the land was situated.
They were deprived of that right by the amendment of section 31 of the Punjab Pre emption Act by Punjab Act 10 of 1969 which amendment was retrospective in its operation and prohibited the Courts from passing any decree inconsistent with the amended Act.
On the other hand it was contended inter alia for the appellants that they had already secured a decree in their favour by the trial court which had become final 'and with the terms of which the had complied: in the present appeal they were merely seeking modification of the decree of the High Court in favour of respondents 1 to 3 by getting the amount of pre emption money enhanced t0 Rs. 1,35,000/ without claiming any rights of pre emption in their own favour furthermore, the only appeal preferred by respondents 1 to 3 to the High Court was from the decree in 'heir own suit and for this reason also the decree in favour of the appellants by the trial court had become conclusive and unassailable.
130 HELD: Upholding the preliminary objection, It was not open to this Court to pass a decree of pre emption in favour of the appellants who were deprived by the Amendment Act of 1960 of their right to secure such a decree.
[133 C D] The contention that the decree in the appellants ' suit had become final and the High Court 's order was only in relation to the suit of respondents 1 to 3 ignored the scheme of section 28 of the Act read with O.20, r. 14, C.P.C. which does not postulate decrees of pre emption in favour of rival preemptors on payment of different amounts of purchase money in respect of the same sale.
Such a course may lead to conflicting decisions on the question of value of the property sought to be pre empted for the purposes of a pre emption suit.
Besides., the appellants ' right to pre empted the sale under the unamended law was admittedly inferior to that of respondents 1 to 3 and the appellants could only be held entitled to exercise their right after the failure of those respondents to comply with the terms of the decree in their favour.
[133 E G] Ram Swarup vs Munshi and Others, ; ; referred to.
|
ivil Appeal No. 4042 of 1988.
From the Judgment and Order dated 17.12.
1987 of the Bombay High Court in W.P. No. 1048 of 1982.
S.C. Gupta and M.N. Shroff for the Appellant.
Anil Dev Singh, Ms. Nayana Buch, M.J. Paul, Kailash Vasdev, Ms. Subhashini and Mrs. Kitty Kumarmangalam for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This civil appeal by special leave is di rected against judgment dated 17.12.1987 of the High Court of Bombay in Writ Petition No. 1048 of 1982 instituted by the appellant, which is a Co operative Credit Society.
The 1st respondent is a Federation representing the employees of the appellant amongst others.
Setting aside the award of the Industrial Tribunal, the High Court held that the appellant was liable to pay its employees bonus at the rate of 20 per cent of its total annual earnings for the years 1975 76, 1976 77 and 1977 78.
The principal contention urged at the Bar against the impugned judgment is that the High Court went wrong in directing the appellant to pay bonus without regard to various amounts invested by it as permitted under the rele vant provisions of the Maharashtra Cooperative Societies Act, 1960 (the "Co operative Societies Act") and other amounts carried forward to its reserve fund.
The appellant 's counsel contends that the High Court did not correctly read the provisions of Section 6(d) of the (The "Bonus Act") and item (4) of the Third Schedule to the said Act.
Counsel further contends that the High Court was not justified in.
placing reliance on the Explanation to the Third Schedule to the Bonus Act as 268 it has no relevance to co operative societies.
The Explana tion, he says, is relevant only to items (1), (2) and (3) of the Third Schedule to the Bonus Act.
We shall now read the relevant provisions.
Section 6 of the Bonus Act refers to various sums which are deductible from gross profits.
It reads: "6.
Sums deductible from gross profits.
The following sums shall be deducted from the gross profits as prior charges, namely: (d) such further sums as are specified in respect of the employer in the Third Sched ule.
" The employer in question being a co operative society, it is item (4) of the Third Schedule to the Bonus Act that is applicable.
That reads: Item Category of employer Further sums to be deducted NO.
(2) (3) 4.
Co operative Society (i) 8.5 per cent of the capital invested by such society in its establishment as evidenced from its books of accounts at the commencement of the accounting year; (ii) such sums as has been carried forward in res pect of the accounting year to a reserve fund under any law relating to co operative societies for the time being in force.
269 In column (3) of item (4), two types of amounts are deductible from the gross profits as prior charges.
Firstly, 8.5 per cent of the capital invested by a co operative society in its establishment is deductible.
Secondly, amounts carried forward to a reserve fund in compliance with any provisions of law relating to co operative societies are also deductible.
(The expression 'capital ' is not defined under the Bonus Act.
It must, therefore, be understood in the sense in which that expression is generally understood.
That means all amounts which are classified as capital in contrast to revenue must qualify for deduction subject to the limit of 8.5 per cent, provided such capital is invested by the society in its establishment as evidenced by its books of accounts at the commencement of the accounting year.
Any such capital upto 8.5 per cent is thus deductible.
Furthermore, all sums which have been carried forward in respect of the relevant accounting year to a reserve fund as required under any law applicable to co operative societies for the time being in force are also deductible from gross profits.) This means that reserve fund created in terms of Section 66of the Co operative Societies Act is deductible under item (4) of the Third Schedule to the Bonus Act.
Section 66 reads.
(1) Every society which does, or can, derive a profit from its transactions shall maintain a reserve fund.
(2) Every society shall carry at least one fourth of the net profits each year to the reserve fund; and such reserve fund may sub ject to the rules made in this behalf, if any, be used in the business of the society or may, subject to the provisions of section 70, be invested, as the State Government may by general or special order direct, or may, with the previous sanction of the State Government, be used in part for some public purpose likely to promote the objects of this Act, or for some such purpose of the State, or of local interest: Provided that, the Registrar may, having regard to the financial position of any socie ty or class of societies, fix the contribution to be made to the reserve fund under this sub section at a lower rate, but not lower than one tenth of the net profits of the society or societies concerned." Accordingly, all such amounts held by the society as reserve fund in terms of Section 66 of the Co operative Societies Act must qualify for deduction.
The minimum re serve fund that is required to be 270 maintained by Section 66 of the Co operative Societies Act is one fourth of the net profits of each year.
(If larger amounts are carried forward to the reserve fund in terms of Section 66, all such amounts will come within the ambit of item (4) of the Third Schedule to the Bonus Act and qualify for deduction.) Accordingly, we hold that 8.5 per cent of the capital invested by the society in its establishment as disclosed by its books of accounts, together with amounts carried forward to a reserve fund in compliance with Section 66 and other provisions of the Co operative Societies Act read with the rules made thereunder (See Rule 54 of the Maharashtra Co operative Societies Act, 1954) will be de ductible in terms of Section 6 of the Bonus Act.
We must, however, point out that the High Court was not justified in placing any reliance on the Explanation to the Third Schedule to the Bonus Act for that has, as tightly pointed out by the appellant 's counsel, no relevance to a co operative society.
In this connection, we place on record that counsel on both sides agree that reference to 20 per cent in paragraph 11 of the judgment was wrong in respect of the year 1975 76.
They agree that for that year, the correct figure is 18.78 per cent.
Accordingly, we hold that reference to 20 per cent in paragraph 11 of the impugned judgment must be read as 18.78 per cent for the year 1975 76 and 20 per cent for the succeeding two years.
Subject to what we have stated above, we hold that the High Court was right in directing the appellant society to pay bonus to its employees.
The society is liable to pay bonus at the rate of 20 per cent for the years 1976 77 and 1977 78 and 18.78 per cent for the year 1975 76.
In the circumstances, the appeal must fail and is ac cordingly dismissed.
The parties shall bear their respective costs.
| Pursuant to the directions made by the Supreme Cour t, with a view to providing relief to delinquent childr en detained in jails, in 1986 the District Judges of the enti re country supplied the particulars of under trial and convic t ed children found in regular jails within their jurisdi c tion.
With the passage of time and the coming into force of the Juvenile Justice Act, 1986 it became necessary to g et fresh detailed reports for updating the information.
The Supreme Court issued directions and, HELD: 1.
Children require the protective umbrella of society for better growth and development as they are not in a position to claim their entitlement to attention, growi ng up, food, education and the like.
It is the responsibili ty of the society and is one of the paramount obligations of those who are in charge of governance of the country tod ay to attend to the children to make them appropriate citize ns of tomorrow.
[64A B] 2.
Every District Judge is directed to report to th is Court the figures as to the exact number of delinque nt juveniles still detained in regular jails and whether juv e nile courts, juvenile homes, special homes and observatio ns homes as provied in the Juvenile Justice Act, 1986 have be en established.
[62H; 63A] 61 2.1 A Senior Advocate of this Court is appointed as Commissioner to visit the jails in the three Districts of the State of Bihar, viz. Deogarh, Patna and Bhagalpur a nd collect the necessary particulars of juvenile delinquen ts housed in those jails and report to this Court.
He shall be provided all facilities by the State Government and sha ll also be entitled to reimbursement of his expense section [64H;65A B] 3.
Section 62 of the Juvenile Justice Act, 1986 empowe rs the State Government to make rules to carry out the purpos es of the Act.
The scheme of the Act is such that it cannot be properly enforced unless appropriate rules are framed a nd brought into force.
The District Judges while making the ir reports shall also indicate whether rules have been fram ed and whether such rules are already in force.
Counsel for t he respective States are directed to inform this Court by written Memorandum about the framing of rules and bringi ng them into force in the respective States.
If such rul es have not been framed in any State, such State or States a re directed to frame the same and bring them into force witho ut any further delay.
[63C E] 4.
For facilitating the monitoring of the implementati on of the Juvenile Justice Act, 1986, a group of nominat ed advocates is entrusted with the work of making a dra ft Scheme and placing it before the Court for its consider a tion.
[64D E] 5.
The Registry of this Court should have appropria te funds to meet the expenses from time to time.
The Union of India is directed to deposit a sum of Rs.50,000 while ea ch of the States of Bihar and West Bengal and Uttar Pradesh is directed to deposit a sum of Rs.15,000.
[65B C]
|
Civil Appeals No. 218 of 1955 and 219 to 223 of ' 1955.
Appeal by special leave from the judgment and Order dated September 14, 1951, of the Income tax Appellate Tribunal, Madras, in I.T.A. No. 3158 of 1949 50.
and Appeals by special leave from the judgment and order dated September, 30, 1953, of the Income tax Appellate Tribunal, Madras, in I.T.A. Nos.
7840 of 1952 53 and E.P.T.A. Nos. 300, 301 and 302 of 1952 53.
section Chowdhuri, N. A. Palkhivala and Naunit Lal, for the appellant.
887 H. N. Sanyal, Additional Solicitor General of India, R. Ganapathi lyer and D. Gupta for the respondent.
1960 February 3.
The Judgment of the Court was delivered by KAPUR J.
In these six appeals the common question raised is whether the proviso to section 13 of the Income tax Act is applicable to the facts and circumstances of these cases.
They are therefore disposed of by one judgment.
Civil Appeal No. 218 of 1955 arises out of the assessment for the year 1943 1944.
Civil Appeals Nos. 219 to 223 relate to the assessment years 1944 1945, 1946 1947 and for the chargeable accounting periods from January 1943 to February 1944, and from February 1945 to February 1946.
The appellant in each of the appeals is the assessee and the respondent is the Commissioner of Income tax and Excess Profits Tax, Madras.
The appellant is a 'resident and ordinarily resident ' in India and carried on extensive trade in Colombo in grains, folder, gram and other food stuffs for cattle and poultry.
For the assessment year 1943 1944 the appellant showed a turnover of Rs. 17,74,825 and a gross profit of Rs. 63,217 which is about 3.5 per cent.
For the two previous assessment years the appellant 's gross profits were 9 per cent and 8 per cent respectively.
The Income tax Officer, by his order dated March 20, 1948, rejected the accounts and estimated the gross profit by adding back Rs. 2,38,831 to the returned income.
Thus he raised the turnover to Rs. 20,00,000 and the gross income to Rs. 3,00,000 giving a profit of 15 per cent on the estimated turnover.
On appeal to the Appellate Assistant Commissioner, the order of the Income tax Officer was confirmed.
The Income tax Appellate Tribunal on appeal by its order dated September 14, 1951, after pointing out various defects, rejected the account books but accepted the appellant 's turnover and computed the profits at 15 per cent on grains imported from India and 121 per cent on grains purchased in Ceylon.
It held that correct profit for the year under assessment could not be deduced from the books produced by the appellant.
The Excess Profits tax 113 888 for the chargeable accounting period from February 10, 1942 to January 16, 1943, was decided on the basis of the Income tax assessment for the year 1943 44.
On November 21, 1951, the appellant applied to the of Tribunal for stating a case under section 66(1) on the following four questions: (1) Whether under the circumstances of the case the Tribunal was justified in holding that Section 13 of the Indian Income tax Act applies to the case.
(2) Whether the reasons set out by the Appellate Tribunal in paragraph 2 of its judgment are sufficient to invoke Section 13 of the Act.
(3) Whether the Tribunal, having disagreed with the department on the basis of the assessment, had jurisdiction to apply Section 13 and make an assessment on an alleged estimate.
(4) Whether the Tribunal was justified in making an assessment on the basis of Section 13 without giving an adequate opportunity to the assessee to meet the materials upon which eventually the assessment was rested.
But the Tribunal, by its order dated February 12, 1950, held that no question of law arose and therefore declined to state a case and thus rejected the application.
The appellant then applied to the High Court of Madras under section 66(2) of the Act on the same four questions of law.
This application was dismissed by the High Court on February 26, 1953.
Against this order of the appellant applied for special leave to appeal and, by leave of this Court, amended the petition so as to make it an appeal against the order of the High Court as well as the order of the Tribunal dated September 14, 1951.
In the other appeals also the course of proceedings before the Income tax Officer, the Appellate Assistant Commissioner and the Income tax Appellate Tribunal was the same.
For the assessment years 1944 1945 and 1946 47 the appellant disclosed a turnover of Rs. 10,35,748 and Rs. 5,98,728 respectively and the gross profits rates were 10.7 per cent and 8.7 per cent respectively.
As the books of accounts in regard to these years also were rejected, the Income tax Appellate Tribunal applied section 13 and estimated the gross 889 profit rates at 12 1/2 per cent and 10 per cent for the respective years.
The appellant applied to the Tribunal under section 66(1) of the Act for stating a case to the High Court for its decision on the following two points: (1) Whether on the facts and in the circumstances of the case, the Department was right in acting under the proviso to section 13 of the Act in th absence of a finding that income, profits and gains cannot properly be deduced from the books produced or that no method of accounting has been regularly employed.
(2) Whether on the facts and in the circumstances of the case, the Department had sufficient materials before it to justify the rates of 12 1/2 per cent and 10 per cent gross profits on the total turnover on the ground that the rates worked out by the figures submitted by the assessee work out at a lesser figure.
The Tribunal dismissed the application on January 15, 1954.
The appellant did not apply to the High Court under section 66(2) of the Income Tax Act but obtained special leave from this Court against the order of the Tribunal by which it applied the proviso to section 13 of the Income Tax Act.
All the six appeals were heard together and a common question arises whether the Income tax Appellate Tribunal was justified in applying the proviso to section 13 of the Income Tax Act.
It was contended by the appellant in Civil Appeals Nos. 218, 219 and 221 of 1955 that the Income tax Appellate Tribunal was not justified in applying the proviso to section 13 and assuming that the proviso did apply then the percentage worked out was unjustified and had been arrived at by relying upon material which the appellant had no opportunity to meet and therefore the case fell within the rule in Dhakeshwari Cotton Mills Ltd. vs The Commissioner of Income tax, West Bengal (1) where a similar violation of the fundamental rule of natural justices.e., the information upon which the Tribunal relied was not disclosed to the assessee and no opportunity was given to him (1)[1955] I S.C.R. 941. 890 to rebut such material was held to be a ground for interference with the order of the Tribunal.
It was rightly argued that the power to compute profits under the proviso to section 13 arises only where no method of accounting has been regularly employed by the assessee and where the method employed is such that the income, profits and gain cannot properly be deduced therefrom.
It means that the method adopted by the assessee must prima facie prevail where it is regularly employed, though the Incometax Officer can resort to the proviso if the method is such that true profits cannot be correctly determined therefrom.
In other words, even if the assessee has regularly employed a method of accounting it can be discarded under the proviso if the method does not show correct profits of the year.
The Appellate Tribunal, by its order dated September 14, 1951, held that correct profits could not be deduced from the books produced by the assessee and therefore the proviso to section 13 of the Income Tax Act applied.
The reasons it gave were (1) that vouchers for several purchases made in Colombo had not been produced and for purchases of over Rs. 3,00,000 no vouchers were forthcoming and without the vouchers the entries in the account books could not be verified ; (2) there was no quantitative tally for the grains and for other materials purchased by the appellant, which were ground into powder, turned into fodder, packed in different sizes and then sold.
It was not possible, according to the Tribunal, to accept the books of account, where the turnover was as large as about seventeen lacs of rupees, without a quantitative tally; (3) a fairly big sum of money was alleged to have been paid towards purchasing of license, , for export from India; and Rs. 19,000 worth of purchases were made in Tuticorin when only a small sum of money in cash was shown in the assessee 's accounts; (4) several outsiders ' cheques had been entered in the accounts of the assessee without any proof as to why those cheques were paid to the assessee; and (5) a fairly big sum of money had been invested in India in the purchase of property without 891 money being received from Colombo.
On these facts the Tribunal said: In view of these defects, we are clearly of opinion that the correct profit could not be deduced from the books produced by the assessee, and accordingly hold that proviso to Section 13 of the Act applies in this case.
The question, therefore, is regarding the estimate. ' After giving this finding the Tribunal accepted the turnover as shown in the appellant 's books.
In making the computation of profits the Tribunal took into consideration the following matters: that the export of food grains from India was prohibited except under a license, that there was an acute shortage of cattle fodder in Ceylon and the appellant had to resort to dubious means in order to obtain grains, that during a substantial portion of the year of accounting there was no price control in Colombo, that as the appellant was a manufacturer of forage by mixing several kinds of grains and powdering them and sold them in packets of various weights, the appellant must have made higher profits than persons who deal in grain only.
Keeping all this in view the Tribunal was of the opinion that the rate of 15 per cent adopted in regard to imported grains was not too high but in the case of local purchases it was, and therefore reduced the rate of profit in the latter case to 121 per cent.
It was on this material that the Tribunal adopted the figure of profit as estimated by the Income tax Officer, and in order to support this opinion further, the Tribunal remarked that in certain cases which had come to its notice the rate of profits 'went up to 20 per cent. ' On the basis of this remark it was argued that the principle of natural justice had been violated in that the Tribunal had taken into consideration the rate of profit in other cases without giving an opportunity to the appellant to explain those cases and relied upon Dhakeshwari Cotton Mills Ltd. vs The Commissioner of Income tax, West Bengal (1) where a violation of the fundamental rule of justice, i.e., where the information was not disclosed to the assessee and no opportunity was given to rebut that material, was (1) [1955] I. S.C.R. 941 892 held to be a ground for interference with the order of the Tribunal.
In our opinion, no such case arises in the present appeal.
No information, as in Dhakeshwari 's Case was supplied to the Tribunal by any one and taken into consideration by it, and therefore it was not necessary to give any such opportunity as the appellant contends for.
In the present case the Tribunal has held that from the method of accounting adopted by the appellant correct profits could not be deduced because of the various reasons which have been set out above and the reference to profits made in other cases was only by way of supporting that conclusion.
It was not the basis on which the conclusion was formed nor the basis on which the percentage was arrived at.
As a matter of fact, the Income tax Officer who also rejected the accounts of the appellant had also given similar reasons.
He had held that there was absence of vouchers, that the stock account and the manufacturing account had not been kept or produced, that the cheques of other parties had been credited in the accounts of the appellant which had not been explained and that there was purchase of goods and property by the appellant without there being sufficient cash in hand.
The Income tax Officer also said that in other cases where grains were purchased in India and sold in Colombo the rates of profit were higher, ranging between 20 per cent and 39 per cent.
He then worked out profits in respect of various grains in the case of the appellant and found that the average rate of gross profit worked out to 15.8 per cent., and in his opinion the gross profit in fodder should have been higher.
He further took into consideration the fact that Colombo was bombed in April 1942, resulting in panic in that town and therefore during a portion of the accounting year the appellant might not have made the same margin of profit.
He estimated the sales at twenty lacs and the gross profit at three lacs, thus arriving at a figure of 15 per cent on the turnover.
It appears to us that neither the Income tax Officer nor the Appellate Tribunal relied upon the profits made by traders in other cases as a basis for arriving at any conclusion 893 as to the percentage at which the income should be computed and that they used that material for a different purpose.
It is extremely doubtful if the order of the Income tax Officer or the Tribunal would have been different if no reference had been made to the rate of profits in other cases.
In other words, the profits in other cases were not the reason for holding that 15 per cent.
profit was a proper rate but merely an ancillary support to that conclusion.
It may be mentioned that throughout in his grounds of appeal the appellant has emphasised the inapplicability of section 13 of the Income Tax Act and the proviso thereto, but not to this particular violation of principles of natural justice whichwas emphasised and particularised before us.
In his appeal to the appellate Assistant Commissioner no objection was taken to the reference by the Income tax Officer to the rate of profits made by other dealers in grains.
In the grounds of appeal.
to the Tribunal also there was no such objection.
In the application under section 66(1) there was no specific ground taken and in the application under section 66(2) the matter does not seem to have been raised.
The order of the High Court, dated February 26, 1953, does not show that any such question was raised before it; all it shows is that the appellant 's books of account were found to be defective and afforded no data for arriving at correct profits of the business.
The order also refers to the non production of invoices, the unexplained steep fall in profits made during the year when compared with the previous years.
The High Court could not find any legal flaw in the order of the Appellate Tribunal to justify an order for directing the case to be stated.
In the grounds of special leave to this Court no pointed reference was made to the material which is now alleged to have been used by the Tribunal without giving an opportunity to the appellant to explain that material.
An amended petition by leave of this Court was filed on April 28, 1954, and there also no such pointed reference was made to the material to which objection is now being taken before us.
Dhakeshwari 's Case (1) cannot, in our opinion, apply to the facts of this case, (1) [1955] I. S.C.R 941 894 It was then urged that the four reasons given, which we have set out above, could not make section 13 applicable.
for the rejection of accounts several reasons were given by the Appellate Tribunal; one of these reasons was the non production.
of stock registers and manufacturing accounts.
This reason was given by the Income tax Officer and adopted by the Appellate Tribunal.
It was submitted that the non production of stock account was not such a defect as to entitle the Taxing Authorities to reject the books and apply the proviso to section 13.
Reliance was placed on the judgment of the Punjab High Court in Pandit Brothers vs The Commissioner of Income tax, Delhi (1).
The facts in that case were very different.
The Income tax Officer there added a certain sum to the assessee 's profits on the ground that the expense ratio was too high and the profits disclosed were too low and there was no stock register.
The finding in that case was that the assessee maintained regular accounts of his purchases and sales and there was no finding by the Income tax Officer that in his opinion the income could not properly be deduced therefrom.
Khosla, J. (as he then was) there said: ` There is no finding that there was material before the Income tax Officer to lead him to the conclusion that a proper statement of income, profits and gains could not be deduced from the material placed before him.
All he said was that the profits appeared to be somewhat low and there was no stock register. '.
The want of a stock register was, in that particular case, not a very serious defect because the account books had been found and accepted as correct and disclosed a true state of affairs.
It cannot therefore be said that that case laid down as a proposition of law that the want of a stock register by which a proper check could be made was not such a serious defect as to make the proviso to section 13 inapplicable.
The importance of such register was pointed out by the Nagpur High Court in Ghanshyam Das Permanand vs Commissioner of Income tax, C.P. & Berar (2).
In cases such as the instant case, the keeping of a (1) [1954) (2) , 81. 895 stock register is of great importance because that is a means of verifying the assessee 's accounts by having a quantitative tally '.
If, after taking into account all the materials including the want of a stock register, it is found that from the method of accounting correct profits of the business are not deducible, the operation of proviso to section 13 of the Income tax Act would be attracted, Bombay Cycle Stores Company Ltd. vs Commissioner of Income tax (1).
It may also be added, as was held by this Court in Commissioner of Incometax vs
Mac Millan & Co. (2), that the Income tax Officer, even if he accepts the assessee 's method of accounting, is not bound by the figure of profits shown in the accounts.
It is for the Income tax Authorities to consider the material which is placed before them and, if, after taking into account in any case the absence of a stock register coupled with other materials they are of the opinion that correct profits and gains cannot be deduced, then they would be justified in applying the proviso to section 13.
In our opinion therefore when the Tribunal applied the proviso to section 13 because of the various blemishes which were pointed out by the Income tax Officer and accepted by the Appellate Tribunal, it cannot be said that there was any error in the order of the Appellate Tribunal justifying the interference of this Court under article 136.
In regard to the Appeal No. 220 of 1955 for the assessment year 1946 1947 the objection raised was that the Tribunal had committed the same error in that it took into consideration the earlier decision of the Tribunal 'in an identical situation ' i.e., in the case of the same assessee in regard to previous years.
As we have held that there was no error in the order of the Tribunal in regard to the previous years, it cannot be said that this observation of the Tribunal was in any manner erroneous.
This appeal should therefore be dismissed.
The other appeals which arise Under the Excess Profits Tax Act for the various chargeable accounting periods depend upon the result of the Income tax (1) [ (2) ; , 197.
114 896 assessment appeals and, as we have dismissed those appeals, these appeals also must be dismissed.
In the result all the six appeals are dismissed with costs.
As the appeals were consolidated there will be of One set of costs.
Appeals dismissed.
| The draft standing orders submitted by the appellants to the certifying officer for certification under section 3(1) Of the , were altered by the latter on the footing that the modifications were necessary so as to be in conformity with the model standing orders.
Section 4 Of the Act, before it was amended in 1956, provided that "it shall not be the function of the certifying officer or the appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing order," while under section 3(2) the draft shall be, as far as is practicable, in conformity with the model standing orders, where they have been prescribed.
The question was whether the certifying officer had jurisdiction to make the modifications in the present case.
Held, that there is a distinction between considerations of fairness or reasonableness and those of practicability, and that though the certifying officer may not modify the draft on the ground that its provisions are unfair or unreasonable, he can and must modify it in matters covered by the model standing 975 orders if he is satisfied that conformity with such model standing orders is practicable in the circumstances of the case.
Electric Workers ' Union vs The U. P. Electric Supply Co. A.I.R. 1949 All. 504, disapproved.
Jiwan Mal & Co. vs Secretary, Kanpur Loha Mills Karmachari Union & Ors., A.I.R. 1955 All.
581 and Mysore Kirloskar Employees ' Association vs Industrial Tribunal, Bangalore and Anr , approved.
|
l Appeal ,#No. 151 of 1951.
Appeal from a Judgment and Order dated 14/15th September, 1949, of the High Court of Judicature at Bombay (Chagla C.J. and Tendolkar J.) in Income tax Reference No. 2 of 1949.
R. J. Kolah and N. A. Palkiwalla for the appellant.
C. K. Daphtary, Solicitor General for India (P.A Mehta, with him) for the respondent.
January 30.
The judgment of Mehr Chand Mahajan J., Das J. and Bhagwati J. was delivered by Bhagwati J. Bose J. delivered a separate judgment.
BHAGWATI J. This is an appeal from the judgment and order of the High Court of Judicature at Bombay upon a reference by the Income tax Appellate Tribunal under Section 66 (1) of the Indian Income tax Act, 1922, whereby the High Court upheld the decision of the Appellate Tribunal that two amounts of Rs. 12,68,480 and Rs. 4,40,878 were the sale proceeds of goods sold by the appellant to merchants in British India, were received in British India and were liable to income tax in British India.
The appellant is a company registered in the Baroda State, as it then was, prior to its merger with India.
It manufactures textile goods in Petlad in the Baroda State and after the goods are manufactured they are sold by the company ex mills.
The company employs Messrs. Jagmohandas Ramanlal & Co. as guaranteed brokers.
That firm guarantees the sale price of goods sold by the company ex mills to the purchasers from Ahmedabad and receives commission as consideration for the guarantee and the work which it does for the company.
The company is a non resident and its accounts are maintained according to the mercantile system.
953 In the assessment year 1942 43 (the previous year being the calendar year 1941) the total sales of the goods by the company amounted to Rs. 29,68,808.
In making the assessment on the company for that assessment year the following three amounts were considered for the purpose of determining the company 's liability to British Indian tax.
(a) Sale proceeds recovered through Messrs. Jagmohandas Ramanlal & Co. . . . .Rs.
12,68,480 (b) Sale proceeds through British Indian banks and shroffs rec eived by means of drafts or hu ndies drawn by the company. . .Rs.
4,40,878 (Railway receipts handed over to British Indian merchants by the banks on payment).
(c) Sale proceeds received by cheques on British Indian banks and hundies on British Indian shroffs and merchants, and collected by the banks and shroffs . . . . . .
Rs. 6,719735 Total Rs. 23,81,093 As regards item (a) the company debited the account of the firm of Messrs. Jagmohandas Ramalal & Co. with Rs. 13,41,744 which represented sales made by the company to merchants of Ahmedabad whose payments were guaranteed by that firm, and credited the sales account with the amount of the bills.
Messrs. Jagmohandas Ramanlal & Co. collected the amounts of the bills from the merchants at Ahmedabad and credited the sums recovered in the company 's accounts with banks and/or shroffs at Ahmedabad and also made dis bursements under instructions of the company to the creditors of the company in British India.
All these payments were credited by the company to the account of Messrs. Jagmohandas Ramanlal & Co. and during the relevant accounting year the company thus 954 received Rs. 12,68,480 against the total debits of Rs. 13,41,744.
As regards item (b) the company received Rs. 4,40.878 by drawing hundies or drafts for the amounts of its sales bills (including the forwarding charges and the cost of transit from the mills premises to the station) on the merchants in favour of recoginised banks and shroffs in British India, by sending the same to those banks or shroffs with the railway receipts duly endorsed in favour of the merchants and by instructing the banks or shroffs to recover the amounts including the costs of transmitting the same to them.
The amounts of these sales bills were debited by the company to the accounts of the respective merchants and credited to the sales account and the sums recovered by the banks or shroffs from the merchants in British India against the delivery of the relative railway receipts were on receipt of the same by the company credited to the accounts of the respective merchants in their books of account.
As regards item (c), the company received Rs. 6,71,735 from the merchants by cheques and hundies drawn on banks and shroffs in British India in favour of the company.
These cheques and hundies were negotiated by the company in Petlad and sent back for credit to its accounts with those banks and shroffs.
The said cheques and hundies were cashed in British India and the sale proceeds remitted by the banks and shroffs to the company.
The amounts of the sales bills were debited to the accounts of the merchants in the books of the company when the goods were invoiced to the merchants and these accounts were credited with the moneys thus received by the company from the merchants.
The Income tax Officer brought to tax the profits derived by the company represented by the said three items in the assessment year on the basis that the sale proceeds having been received in British India the profits were received in British India.
The Appellate Assistant Commissioner on appeal held that profits 955 from items (a) and (c) were exempt from British Indian tax while those represented by item (b) were rightly taxed.
The Department filed an appeal to the Appellate Tribunal against the decision of the Appellate Assistant Commissioner in regard to items (a) and (c) and the company filed an appeal in respect of item (b).
The Appellate Tribunal held in regard to item (a) that the merchants in British India were not absolved either in law or in fact from their responsibility to pay to the company its dues by virtue of the debit entries in the account of Messrs. Jagmohandas Rainanlal & Co. and in regard to item (b) that the payment of the amounts due was a condition precedent to ' the delivery of goods by the banks in British India on behalf of the company.
The Tribunal therefore held that profits arising from items (a) and (b) were rightly subjected to tax.
As regards item (c) the Tribunal held that Rs. 6,71,735 "were received by the assessee company directly from the merchants in British India by cheques and hundies drawn on banks and shroffs in British India in favour of the company but were negotiated in Petlad and sent for credit to the company 's account.
The amounts were received at Petlad and once they were received there, they could not be held to have been received again in British India ".
The Department asked the Tribunal to refer to the High Court the question of law arising on item (c) and the company asked the Tribunal to refer to the High Court the question of law arising on items (a) and (b) and the Tribunal therefore referred the following question of law to the High Court: " Whether on the facts and in the circumstances of the case, the sums of Rs. 12,68,480, Rs. 4,40,878 and Rs. 6,71,735, or any of them, which, represents receipts by the assessee company of its sale proceeds in British India, include any portion of its income in British India?" The High Court held that Rs. 12,68,480 were received in British India and included the profits and gains of the business of the assessee company.
It held that Rs. 4,40,878 also were received in British India 956 and the company was liable in respect of that amount.
In regard to the item of Rs. 6,71,735, the High Court found that the facts stated by the Tribunal were not sufficient to enable it to reach a decision and therefore directed that the Tribunal should submit a supplementary statement of case setting out the several aspects set out in the judgment.
The High Court reframed the question in regard to the two items of Rs. 12,68,480 and Rs. 4,40,878 in the manner following: (1)Whether the sums of Rs. 12,68,480 and Rs. 4,40,878 were sale proceeds of the goods sold by the assessee to merchants in British India or were debts due by the said merchants ? (2)Whether if they were sale proceeds, they were received in British India ? and answered them by stating that they were sale proceeds and they were received in British India.
There was also a third question which was comprised in the reference and that question was framed as under: Whether the profits of the assessee 's business are included in the sums of Rs. 12,68,480 and Rs. 4,40,878 ? This question was also answered by stating that they were included in these two sums.
The company obtained leave from the High Court to appeal against the decision in regard to the two sums of Rs. 12,68,480 and Rs. 4,40,878 and hence this appeal.
It is common ground that the company is a nonresident and its accounts have been regularly kept according to the, mercantile system.
Its balance sheets were also prepared on that basis.
The company was assessed to tax in British India on the basis that these two sums of money were received in British India by or on behalf of the company.
In regard to the item of Rs. 12,68,480, even though the amounts of the sales bills were in the first instance debited by the company in its books to the account of Messrs. Jagmohandas Ramanlal & Co. the sale proceeds in accordance with 957 the terms of the sales bills were paid by the respective merchants to Messrs. Jagmohandas Ramanlal & Co. in British India and were either credited by Messrs. Jagmohandas Ramanlal & Co. in the company 's accounts with banks or shroffs in British India or were disbursed by them in accordance with the instructions of the company in British India.
In regard to the item of Rs. 4,40,878 even though the amounts of the sales bills were debited in the first instance by the company to the accounts of the respective merchants in the books of account at Petlad the relative railway receipts were sent by the company to banks or shroffs in British India together with drafts or hundies in connection with the same with instructions that delivery of the railway receipts should be given to the respective merchants against payment and the amounts of the sales bills were thus paid by the respective merchants to the banks or shroffs in British India and were transmitted under the instructions of the company by the banks and shroffs in British India to the company at Petlad.
Prima facie therefore the amounts of the sales bills in both the cases whether they were paid to Messrs. Jagmohandas Ramanlal & Co. or to the banks or shroffs, through whom the railway receipts were negotiated were paid by the merchants in British India and were received by Messrs. Jagmohandas Ramanlal & Co. and the banks or shroffs on behalf of the company,in British India.
The receipt of these amounts thus fell within section 4 (1) (a) of the Act and the profits or gains of this business thus were received in British India by or on behalf of the company.
The company however sought exemption from liability to tax on the grounds (a) that the accounts of the company were kept on the mercantile or book profit basis under which the accrual of profit as shown in the account was the criterion of taxability and section 4(l) (a) had no application at all; (b) that it was obligatory on the authorities under section 13 of the Act to accept that system of maintaining accounts except under the proviso to that section and that the method of computation there was made the very basis of 124 958 chargeability and section 10 read with section 13 operated to save these amounts from chargeability and (c) that the amounts having been treated as received when credit entries were made in the books of account, and chargeability having crystallised on the date when the income accrued or was treated as received, there was no further scope for a charge when the amounts were subsequently actually received and the subsequent handling of the amounts by the company and the receipt thereof in British India were of no consequence.
The mercantile system of accounting or what is otherwise known as the double entry system is opposed.
to the cash system of book keeping under which a record is kept of actual cash receipts and actual cash payments, entries being made only when money is actually collected or disbursed.
That system brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
The profits or gains of the business which are thus credited are not realised but having been earned are treated as received though in fact there is nothing more than an accrual or arising of the profits at that stage.
They are book profits.
Receipt being not the sole test of chargeability and profits and gains that have accrued or arisen or are deemed to have accrued or arisen being also liable to be charged for income tax, the assessability of these profits which are thus credited in the books of account arises not because they are received but because.
they have accrued or arisen.
Mr. Kolah appearing for the company drew our attention to the following cases: Subramaniyan Chettiar vs Commissioner of Incometax(1), Ahmed Din Alladitta vs Commissioner of Income tax, Punjab(2), Kanwal Nayan Hamir Singh vs Commissioner of Income tax, Ajmer Merwara(3) and (1)(1927) (2)[1934] (3) 959 Commissioner of Income tax vs Shrimati Singari Bai(1).
The assessees there were all residents in British India and maintained their books of account according to the mercantile system.
Except in the case of Commissioner of Income tax vs Singari Bai(1) where the assessment was in respect of the total income or profits, stray items of income treated as received in British India were sought to be charged for tax and they were all assessed for tax not on the basis of actual receipts in British India but on the basis of their having accrued or arisen in British India.
The cases were decided with reference to the law as it stood before the amendment in 1939 which under section 4(l) rendered liable to tax all income, profits or gains from whatever source derived, accruing or arising or received in British India or deemed under the provisions of the Act to accrue, arise or to be received in British India.
The question that arose for the determination of the courts was whether under the mercantile system, profits which were credited in the books could be taxed even though they had in fact not been received and the conclusion reached by the courts was that these profits credited in the books of account were earned and could be charged as having accrued or arisen within British India even though they were in fact not received.
In none of these cases were the courts con cerned with a non resident claiming to have received profits or gains outside British India under the mercantile system of accounting and claiming exemption from liability to tax under section 4 (1) (a) in respect of profits actually received in British India.
It follows from the above that the mercantile system of accounting treats profits or gains as arising or accruing at the date of the transaction notwithstanding the fact that they are not received or deemed to be received and under that system, book profits are, assessed as liable to tax.
If an assessee therefore regularly adopts the mercantile system of accounting he would be liable to tax on the profits thus credited by (1). [1945] 960 him in his books of account subject to all deductions for bad debts as provided in section 10 (2) (xi).
Section 4 (1) (a) has nothing to do with this basis of taxation.
Section 13 which is an integral part of the computation of the total income of the assessee and is compulsory on the income tax authorities as well when computing the total income (vide section 2 (15) ) does not lay down any exemption from liability.
It only sets up a mode of computation of the income which is liable to assessment and imposes upon the income tax authorities an obligation to accept the mode of accounting regularly adopted by the assessee except in the cases where the proviso to that section comes into operation.
The profits earned and credited in the books of account being thus taken as the basis of computation, the system of accounting postulates the existence of debts in so far as moneys re ain due and payable by the parties to whom they have been debited and when it is realised that these debts are not recoverable the assessee gets a deduction for the bad debts under section 10 (2) (xi).
This however does not mean that the transaction as it has been recorded in the books of account under the mercantile system of accounting or the double entry system is metamorphosed or the relationship between the parties assumes a different character.
What was in its inception a transaction of sale and purchase is not converted into another transaction as between creditor and debtor.
The relationship as between vendor and purchaser still subsists and there does not come into existence a new relationship as between creditor and debtor with all its necessary consequences.
The transaction as it has been recorded in the books of account has got to be worked out to its fullest extent.
Merely because the goods have been supplied and the price thereof has been de bited to the purchaser the rights and obligations of the vendor and purchaser inter se are not in any manner affected.
The vendor is bound to fulfil all his obligations under the contract and continues to be liable for all the consequences of his default including rejection of his goods by the purchaser or a claim for damages 961 for breach of warranty by him.
The purchaser is equally entitled to reject the goods or to claim the damages as on breach of warranty by the vendor and all these rights and obligations have got to be worked out in spite of the fact that the entries 'are made in the books of account by the vendor in accordance with the mercantile system of accounting adopted by him.
The vendor could not say that he is under no further obligation to the purchaser and that the purchaser must pay the price of the goods debited to him as a debt arising out of the book entry.
The count in any action filed by the vendor against the purchaser would be a count for the price of goods sold and delivered and would not be a count on an assumpsit for recovery of a debt due by the debtor to him.
It is clear that under these circumstances there is no receipt of the moneys at all, either actual or constructive, in cash or in kind, by actual payment or by adjustment or settlement of accounts.
There is also no scope for the argument that even though these sums may not be said to be either actually or constructively received they should be "deemed to be received".
The expression "deemed to be received" only means deemed by the provisions of the Act to be received.
The phrase statutory receipt might be con veniently employed to cover income which is 'deemed to be received ' and instances of such statutory receipts are to be found in the provisions of the Act, e.g., section 18 (4), section 58 (E), section 58 (J) (3), section 7(2), section 16(1) (c) and sections 19 (2) (vii) and 16(2).
(See the observations of Beaumont C.J. in Commissionei, of Income tax, Bombay vs New India Assurance Co. Ltd.(1).
An amount cannot be "deemed to be received" merely by the volition or sweet will of an individual.
In all the cases which we have mentioned above the profits earned which were credited in the books of account according to the mercantile system of accounting were at best "treated as having been received" which is neither "received" nor "deemed to be received" and therefore not within the purview of section 4 (1) (a).
(1) at p. 614.
962 If then profits which have been thus credited cannot be said to be received nor deemed to have been received when the entries were made in the books of account, the contention urged before us by Mr. Kolah that there could not be a second receipt of the amount in British India does not survive.
It is true that the words used in section 4(l) (a) relate to the first receipt after the accrual of the income.
Once it is received by the party entitled to it, in respect of any subsequent dealing with the said amount it cannot be said to be " received" as income on that occasion.
[Per Kania J. in B. M. Kamdar (1)].
The "receipt" of income refers to the first occasion when the recipient gets the money under his own control.
Once an amount is received as income, any remittance or transmission of the amount to another place does not result in "receipt", within the meaning of this clause, at the other place.
This was definitely established by the Privy; Council in Pondicherry Railway Co. vs Commissioner of IncomeTax 2) and in Commissionei, of Income tax vs Mathias (3).
If, therefore, the income, profits or gains have been once received by the assessee even though outside British India they do not become chargeable by reason of the moneys having been brought in British India, because what is chargeable is the first receipt of the moneys and not a subsequent dealing by the assessee with the said amount.
In that event they are brought, by the assessee as his own moneys which he has already received and had control over and they cease to enjoy the character of income, profits or gains.
This ratio however does not apply to the facts of the present case before us.
The moneys were neither received by the company nor could be deemed to have been received by it when the entries were made in the books of account at Petlad.
They had merely accrued or arisen to it and so far as the receipt thereof is concerned they were first received in British India when they were received by Messrs. Jagmohandas Ramanlal (1)[1946] at P. 39, (2)[1931] 58 I.A. 239.
(3) [1939] 66 I.A. 23.
963 & Co. or by the various banks or shroffs in British India through whom the railway receipts were negotiated.
The first receipt of the moneys was therefore when they were paid as such by.
the merchants to Messrs. Jagmohandas Ramanlal & Co. or to the various banks or shroffs as above.
Whatever paid by the merchants to these several parties were the sale proceeds of the goods which had been sold and delivered by the company to them and they were received within the meaning of section 4 (1) (a) of the Act by these several parties on behalf of the company in British India at the time when these payments were made by the merchants to them.
Mr. Kolah pressed into service the argument based on section 13 of the Act that the mercantile system of accounting regularly adopted by the assessee was obligatory on the income tax authorities for computation of his income.
While agreeing generally with that submission in case of residents, we doubt whether that position would be available to a non resident, who maintains his books of account outside British India according to the mercantile system.
The section would only be relevant where the total profits of the assessee have to be computed, in which event he would be entitled to claim that they should be computed according to the system of accounts maintained by him.
But the section would hardly be relevant where stray items of income are caught in taxable territories as received in taxable territories by a nonresident.
The entries in the present case were put in merely to prove that the sale proceeds were received outside British India where the entries were made.
That contention however could not be sustained, as section 4 (1) (a) is concerned with cases of actual receipt and not with cases of paper receipts.
Having regard to the observations made above we have come to the conclusion that the High Court ",as right in holding that the two sums of Rs. 12,68,480 and Rs. 4,40,878 were the sale proceeds of the goods sold and delivered by the appellant to merchants in British India, that they were received by Messrs, 964 Jagmohandas Ramanlal & Co. and by the banks and shroffs through whom the railway receipts were negotiated, on behalf of the appellant in.
British India, that they were liable to tax under section 4 (1) (a) of the ,*Act as having been received in British India on its behalf, that there is nothing either in the facts and circumstances of the case or in law why they should be exempted from such liability, that the answers given to the questions which were ultimately considered by the High Court were correct, and the appellant was rightly held liable for the tax on these two amounts subject to all just deductions and allowances.
The appeal therefore fails and must stand dismissed with costs.
BOSE, J. I respectfully disagree.
Section 3 of the Indian Income tax Act provides that the " total income " is to be charged in accordance with the provisions of the Act.
We have therefore to see what " total income " means.
" Total income " is defined in section 2(15).
It means (not " includes " but means) the total amount of income, profits and gains "referred to in sub section (1) of section 4 computed in the manner, laid down in this Act." Therefore, the computation of all income refeffed to in section 4(l.) has to be "in the manner laid down in the Act ".
Section 4 (apart from the provisos and explanations is divided into three clauses, (a), (b) and (c).
Clause (b) deals with residents and (c) with nonresidents.
As (a) is general, it is legitimate to infer that it refers to both.
Therefore, the words " received" and " deemed to be received " must be construed in the same sense in both cases except of course where it is otherwise provided in the Act, for sub section (1) is made subject to the provisions of the Act.
Now the words "deemed to be received" can be excluded from consideration at once because I agree that they are confined, and are intended to be confined to what I may call the deeming sections in the Act, that is to say, to cases where the deeming must be done 965 under the express provisions of the Act.
That leaves us with the word "received" (I am of course only deal ing with section 4(l) (a) which deals with " receipts ' and not with section 4(l) (c) which refers to "accruals" and "arisals" and to that which is deemed to "accrue" or "arise").
Now this, in my opinion, is to be contrasted with the words "accrue" and "arise" which are used in clauses (b) and (c).
Though there may be overlapping in some cases, I do not think the three are intended to mean the same thing.
The Privy Council thought in Commissioner of Income tax vs Mathias(1) that there is some variation in meaning between them and in Commissioner of Income tax vs Chunilal B. Mehta(2) they drew attention to the antithesis between "accruing and arising in" and "received in", though they also said in the earlier case that there is not a complete disjunction between them and that they are not three mutually exclusive qualifications (page 56); that is, that there may be some overlapping in certain cases.
Next, we turn to section 6 which divides the various sources of income under various heads for the purposes of computation and chargeability and states that each head shall be " chargeable" "in the manner hereinafter appearing".
It is to be observed that the word "shall" has been used and not " may " thereby implying that there is no option in the matter.
So far as business is concerned, the head is No. (iv) "Profits and gains of business etc.
" That carries us on to sections 10 and 13 which prescribe the method of computation.
Here again, the language is imperative and in the case of a business the method of computation has to be in accordance with the method of accounting regularly employed by the assessee: see Commissioner of Income tax vs Kameshwar Singh(3).
Now in the present case, the method of accounting was the mercantile system.
The essential difference (1) at 56.
(3) at 100 and 101.
(2) [1938] P I.T.R. 521 at 527, 125 966 between this and the cash basis system is that in the latter actual receipts and disbursements are taken into account.
In the former, sums which are due to the business are entered on the credit side immediately they are legally due and before they are actually received and expenditures are entered the moment a legal liability to pay arises and before the actual disbursements.
The profit or loss at the end of the accounting year is therefore based, not on a difference between what was actually received and what was actually paid out, but on the difference between the right to receive and the liability to pay.
I find it impossible in such a case to say that the taxation is on income, or profits and gains which were "received".
It can only be oil profits which " accrued " or "arose" to the assessee in the accounting year: see the Privy Council in Feroz Shah vs Commissioner of Income tax( ').
That, in my opinion, excludes section 4(l) (a) and that in turn means that in such a case a resident is taxed under section 4(l) (b) and a non resident under section 4(l) (c).
Now, this to my mind is of vital importance.
The primary object of the Income tax Act is to tax and not merely to ascertain an income.
The computation of the income is subsidiary and is only for the purposes of ascertaining the quantum of the tax: see Commissioner of Income tax vs Kameshwar Singh(2).
Therefore, if the legislature chooses to lay down different methods of computation and say that the taxation shall be on the amount so computed, it is essential that these methods be adhered to.
In some cases this may be to the advantage of the assessee and in others it may operate to his disadvantage.
But that is immaterial.
The importance lies in this.
All that can be taxed in a given year are the profits and gains which are received or which arise or accrue in the " previous year", and if the Act directs that the profits are to be computed in a given case on "accruals" or "arisals" and not on actual receipts it is essential that that be (1) 224 and 225.
(2) [1933] 1 I.T.R. 94 at 100.
967 done; and it follows from that that the tax in such a case can only be on the accruals or arisals and not on the actual receipts, for clearly you cannot tax on that which you are forbidden to compute in a case where the tax can only be levied on what is computable.
under the Act.
It is important to draw the distinction for this reason.
The rate of tax varies from year to year, therefore if the book profits which are directed to be taxed in a given year are, say, Rs. 10,000 and the actual receipts only Rs. 100, it makes a lot of difference which figure is taken; nor does it even itself out in the long run, for if the rate of taxation increases in the following year and the state of the business is just the reverse, namely that the book profits are only Rs. 100 whereas the actual receipts arising from the previous year 's transactions are Rs. 10,000, it will make a considerable difference to the assessee in the aggregate of tax payable over the years, whether he pays oil the basis of book profits or actual receipts in the two years.
I am not able to draw a distinction between a resident and a non resident in these matters.
I can find no ground for holding that in the case of a resident the mercantile system must be adopted for computing the profits if that is the system of accounting regularly employed but that that need not be done in the case of a non resident.
If the assessee had been a resident company, the taxation would, in my opinion, have been under section 4(l) (b) on profits and gains which had accrued or arisen and not under section 4 (1) (a) on profits which had been received.
The same principle must, in my opinion, be applied in the case of a nonresident and therefore section 4 (1) (c) is attracted, provided the profits and gains have actually accrued or arisen in the taxable territories or they can, because of section 42, be deemed to have accrued or arisen there.
If section 4 (1) (c) is not attracted, then the tax cannot be levied.
Now, applying section 4 (1) (c), the question is where do the profits and gains arise or accrue, in a case 968 like the present ? This is not free from difficulty and various views have been, and can be, taken.
But as these expressions have not been defined and as they are not words of art, I think they should be construed in their ordinary meaning which businessmen would ordinarily and easily understand in a business transaction.
When goods are sold it is to my mind evident that the profit or the loss on any particular transaction arises out of the sale, for until there is a sale there can be no profit.
The profit may not be wholly attributable to the sale but that is another matter.
It is to my mind unquestionable that they arise, in part, at any rate, out of the sale.
Therefore, if the goods are sold in the taxable territories, then, to my mind, the profits, or a portion of them, arise there.
As the Privy Council pointed out in Commissioner of Income tax vs Chunilal B. Mehta(1), in determining where the profits arise the place of the formation of the contract is not the sole criterion, other matters, as for example acts done under the contract are also material.
I am not here attempting to go behind the decision of the Supreme Court to the effect that the place of sale is not necessarily the place of the receipt of the profits.
I am construing the word "arise " and not "receive".
That brings me to the next question, where were the goods in the present ease sold ? That is a, mixed question of fact and law and must vary in each case and must, in my opinion, be answered in a commonsense way and not necessarily in the artificial manner laid down by the Sale of Goods Act to determine where and when the property passes.
What are the facts here ? In the case of the Rs. 4 lakhs odd, the control over the corpus of the goods was retained by the assessee right up to the moment the price was paid; and the price was paid not outside British India but to his nominees in this country, namely, to the assessee 's banks in British India.
These banks retained the documents of title and had the right to refuse (1) [1938]61.T.R.521 at533.
969 delivery until the money was actually handed over.
Therefore, the right to get possession of the goods and to take delivery accrued or arose in British India where the money was actually paid, and that to my mind must be taken to be the place where the profits accrued and arose for income tax purposes, not because the money was received there, for we are not concerned with actual receipts, but because the right which accrued at the date of the transaction was to receive the money in British India and hand over the goods there on the receipt of the money.
As I have said, the substance of the transaction must be viewed and that cannot be made to depend upon the method of book keeping.
Even if there are no books the profits on such a transaction would accrue in the place where the money is to be paid and the goods are to be handed over.
I cannot see how that can alter by reason of the method of accounting employed.
Accordingly, I agree that the method of accounting adopted by the assessee cannot affect the substance of the transactions between the parties or affect their nature.
The rights and liabilities of the parties inter se cannot be made to depend on the way in which one of them chooses to keep its books.
But that is not the case when we come to the question of taxation for income tax purposes.
There the method of accounting is vital.
But even there the substance of the transaction must be viewed, for the substance cannot alter by a mere method of accounting.
It is evident that if the assessee had been resident in British India and these transactions had been omitted from tile books, the sums which ought to have been entered would be taxable as items which had escaped assessment even if there had been no actual receipts in that or in any following year.
Therefore, it is not the entry in the books which attracts the taxation but the profits on the transaction itself, and when the mercantile system is used the profits arise when the right to receive them accrues and not when the entry is made.
If the system is properly employed the entry is made as soon as the right to receive the price arises and so for all practical 970 purposes that is the date ordinarily referred to, but a man cannot manipulate the amount of his tax by choosing to enter or not to enter items which ought to be entered on a particular date, as and when he pleases.
Now, the Rs. 4 lakhs odd represent actual receipts but that is not what is taxable when the computation is based on the mercantile system.
What should be taxed, or rather taken into account for the purposes of taxation, are the figures entered in the accounting year as the sale price of the various transactions which the Rs. 4 lakhs represent.
The profits which arise out of these transactions do not, on my view, escape tax because the profits accrue or arise in the taxable territories.
But the figure on which the tax is to be computed is not the 4 lakhs odd which represent the actual receipts but another figure which unfortunately we have not been given.
I am of course assuming that the figures were duly entered in the books at the proper time in accordance with the mercantile system of accounting.
If they were not, then the Income tax authorities have power to tax income which, for one reason or another, has escaped assessment Turning to the Rs. 12 lakhs.
We know that the figure entered in the books relating to these transactions was Rs. 13,41,744.
i am not clear whether that was entered in the accounting year with which we are concerned, though I gathered that that was the case.
The actual receipts, which followed later, amounted to only Rs. 12,68,480.
In my opinion, if anything is computable for the purposes of tax, it is the former figure (assuming all the entries are in the accounting year) and not the latter.
But in order to determine whether the profits on these transactions are taxable at all, we must examine the transactions.
In these cases the sales were to merchants resident in Ahmedabad.
But according to the assessee 's affidavit, " In respect of buyers from Ahmedabad, the apllicant Mills have no account of such buyers.
The 971 price is debited to the account of the said Jagmohandas Ramlal and company and credited to the sales account in the books of the applicant:" and later, Jagmohandas " discharges its debts by making payments to the applicants from time to time towards the balance in their said account in the books of the applicant Mills.
The said amounts are paid by the said firm by paying the same to the credit of the applicant Mills with British Indian banks or shroffs.
" Now, it is evident from this that Jagmohandas & Company do not merely guarantee payment by the Ahmedabad buyers but actually make the payments, or the equivalent of payments, to the assessee company.
So little do the 'buyers matter that their transactions are not even reflected in the accounts.
All we have is Jagmohandas.
It does not, in my opinion, matter whether the actual buyers remained primarily and legally responsible to the assessee or not.
The fact remains that in practice Jagmohandas & Company actually met the obligations of the buyers and discharged their liabilities to the assessee.
it is, equally clear that Jagmohandas & Company must have recouped themselves in some way from the buyers.
The question is how.
If the whole of the transactions occurred outside British India and the buyers or their agents went to Petlad and received the goods there and paid Jagmohandas & 'Company outside British India, then I am clear that the profits and gains did not accrue or arise in British India, simply be cause the (foods were ultimately brought there.
But if Jagmohandas & Company or their agents were paid in British India, the profits and gains, in my opinion, arose there in the same way as in the 4 lakhs case.
If Jagmohandas & Company were the actual agents of the assessee as were the banks in the other case, and the payments were made in the taxable territories, then the accrual and arising was direct.
If, however, they were not the agents in the strict sense of the term, then I am of opinion that section 42 would be attracted because at the very least there would be a "business connection", 972 provided of course the payments were made in the taxable territories.
Now, here again.
, I am looking to what was actually done in order to determine what the rights were, for it is evident that what was done was done in pursuance of some agreement, express or implied, between the parties which agreement regulated their rights, and those rights in turn determine the place where the profits accrued or arose, or must, because of section 42, be deemed to have accrued or arisen.
In my view, the question referred by the Incometax Appellate Tribunal in its statement of the case does not reflect the true position because it concentrates on the actual receipts.
If the cash basis system of accounting was germane here, then I would agree that the Rs. 4,40,878 was part of the assessee 's income in British India, and so also in the other case, provided the payments were made in British India.
But it is misleading to enquire what would have happened in circumstances which are not material in this case because of the mercantile system of accounting which was employed.
As regards the High Court.
The learned Judges refrained the question and answered it without sending the case back to the Income tax Appellate Tribunal for a further statement of the case.
That was not strictly proper.
But, in my opinion, the refrained questions suffer from the same defect.
In my opinion, the case should be sent back to the Income tax Appellate Tribunal for a refraining of the questions along the lines I have indicated and for a further statement of the case.
Appeal dismissed.
| The Kerala Agrarian Relations Bill was introduced in the Kerala Legislative Assembly on December 21, 1957, and was ultimately passed by it on June 10, 1959.
It was then reserved by the Governor of the State for the assent of the President under article 200 of the Constitution of India.
Meanwhile, on July 31, 1959, the President issued a proclamation under article 356 and the Assembly was dissolved.
In February 1960 fresh elections took place in Kerala and on July 27,1960, the President for whose assent the Bill was pending sent it back with his message requesting the Legislative Assembly to reconsider the Bill in the light of the amendments suggested by him.
On October 15, 1960, the Bill as amended in the light of the President 's recommendations was passed by the Assembly.
It then received the assent of the President on January 21, 1961, and became law as the Kerala Agrarain Relations Act, 1960.
The petitioner challenged the validity of the Act on the ground that the Bill which was pending before the President for his assent at the time when the Legislative Assembly was dissolved lapsed in consequence of the said dissolution and so it was not competent to the President to give his assent to a lapsed Bill with the result that the said assent and all proceedings taken subsequent to it were constitutionally invalid. ^ HELD, that the Constitution of India radically departs from the practice obtaining in the Parliament of the United Kingdom under which Bills not assented to before the dissolution of the Houses are treated as having lapsed on that event occurring.
Under Act.
196 of the Constitution a Bill which is pending assent of the Governor or the President does not lapse on the dissolution of the Legislative Assembly of the State.
754 Held, further, that the consideration of the remitted Bill by the new Legislative Assembly did not violate the provisions of article 201 of the Constitution.
Per Gajendragadkar, Sarkar, Wanchoo and Das Gupta, JJ. (1) Clause (5) of article 196 of the Constitution of India deals exhaustively with the circumstances under which Bills would lapse on the dissolution of the Legislative Assembly of a State, and all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Assembly.
(2) Under articles 200 and 201 there is no time limit within which the Governor or the President should reach a decision on the Bill referred to him for his assent and those Articles do not require that the Bill which is sent back with the message of the Governor or the President should be to the same House which had considered it in the first instance.
Per Ayyangar, J. (1) A Bill before the legislative Assembly of a State ceases to be pending under article 196(5) when it has passed through all the procedure prescribed for its passage through the House and has been passed by it, and is not deemed as pending before the House till the receipt of the assent of the Governor or the President as the case may be.
(2) Though under article 172 each Legislative Assembly of a State is conceived of as having a life of limited duration, in article 201 the expression "The House of the Legislature" i used in the sense of a House regarded as a permanent body.
Attorney General for New South Wales vs Pennie, , relied on.
The Kerala Agrarian Relations Act.
1960, was enacted with the object of providing for the acquisition of certain types of agricultural lands in the State beyond the specific maximum extents laid down in the statute.
The petitioner who was the owner of certain lands in Trichur of which 900 acres were classified in the land records of the State as Pandaravaka Verumpattom lands and the remaining were entered as Puravaka lands, claimed that the lands did not constitute estates under article 31A(2)(a) and, therefore, the Act was not applicable to them.
His case was (1) that as regards Pandaravaka Verumpattom lands he was paying rent to the State calculated as a proportion of the gross yield of the properties, that he held the lands under the State as a tenant and that as he was not an intermediary between the State and the tiller of the soil, the lands were not an estate under cl. 2 (a) of article 31A, and (2) that the Puravaka lands were held under a Jenmi and that as they had within its scope a particular form of land holding known as kanom 755 tenancy they were outside the purview of cl. 2 (a).
It was not disputed that the proclamation issued by the Ruler of Cochin on March 10, 1905, was the relevant existing law for the purpose of deciding whether the properties of the petitioner, were an estate under article 31A (2)(a).
Under cl. 13 of the proclamation the holders of the Pandaravaka Verumpattom tenure acquired full rights to the soil of the lands and held them subject to the liability to pay the assessment to the State.
Clause 15 provided that in the case of Puravaka Lands the Jenmi was recognised as owning proprietorship in the land and entitled to share the produce with the cultivator and the State.
Held, that the lands held by the petitioner on Puravaka tenure satisfied the test as to what constituted an estate under article 31A(2)(a) of the Constitution and, therefore, the provision of the Kerala Agrarian Relations Act, 1960, were applicable to them.
Held, further (Ayyangar, J., dissenting), that the basic concept of the word "estate" as used in article 31A(2)(a) of the Constitution is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the State paying land revenue to it except where it is remitted in whole or in part.
If a term is used or defined in any existing law in a local area which corresponds to this basic concept of estate that would be the local equivalent of the word "estate" in the area.
It is not necessary that there must be an intermediary in an estate before it can be called an estate within the meaning of article 31A(2)(a).
Shri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp. 1 S.C.R. 489, Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, Shri Mahadeo Paikaji Kolhe Yavatmal vs State of Bombay, ; and The State of Bihar, vs Rameshwar Pratap Narain Singh, relied on.
The holder of lands held on Pandaravaka Verumpattom tenure was a proprietor of the lands and held the lands subject to the liability to pay the assessment to the State and therefore, Pandaravaka Verumpattom could be regarded as a local equivalent of an estate under cl. 2(a) of article 31A. 382.
Per Ayyangar, J. (1) The word "estate" in sub cls.(a) and (b) in article 31A(2) has the same meaning and signifies lands held by an intermediary who stood between the State and the actual tiller of the soil and also the interests of those in whose favour there had been alienation of the right to revenue.
756 (2) The First Amendment to the Constitution did not bring within the definition of an estate in article 31A(2)(a) the holding of persons other than intermediaries or those who held land under grants on favourable tenures from Government.
(3) Lands held by a ryotwari proprietor other than those in 'estates ' would not be an estate within sub cl.
(a) of article 31A(2), nor the interest of such ryot in his holding an 'interest in an estate ' within sub cl.
(4) The word 'includes ' in Art 31A(2)(b) is used in the sense of 'means and includes '.
(5) The holder of Pandaravaka Verumpattom tenure was in the position of a ryotwari pattadar, and, therefore, his lands were not an estate within the meaning of article 31A(2).
(6) The lands held by the petitioner on Puravaka tenure were within article 31A(2) because they were lands belonging to a Jenmi and so covered by the definition of an estate as amended by virtue of the Fourth Amendment to the Constitution.
|
Civil Appeal No. 811 of 1979.
Appeal by special leave from the Judgment and Order dated 18 12 1970 of the Allahabad High Court in Crl.
Revision No. 170 of 1975.
O. P. Rana and M. Ramachandran for the Appellant.
Nemo for the Respondent.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The Officer who was investigating into offences under Section 120 B, 420, 468 and 471 Indian Penal Code alleged against the respondent, Ram Babu Misra, moved the Chief Judicial Magistrate, Lucknow, to direct the accused to give his specimen writing for the purpose of comparison with certain disputed writings.
The learned Magistrate held that he had no power to do so when the case was still under investigation.
His view has been upheld by the High Court.
The State has preferred this appeal by Special Leave of this Court.
Shri O. P. Rana, learned Counsel for the appellant, contended that Section 73 of the Evidence Act conferred ample power on the Magistrate to direct the accused to give his specimen writing even during the course of investigation.
He also urged that it would be generally in the interests of the administration of justice for the Magistrate to direct the accused to give his specimen writing when the case was still under investigation, since that would enable the investigating agency not to place the accused before the Magistrate for trial or enquiry, if the disputed writing, as a result of comparison with the specimen writing, was found not to have been made by the accused.
While we agree with Mr. Rana that a direction by the Magistrate to the accused to give his specimen writing when the case is still under investigation would surely be in the interests of the administration of justice, we find ourselves unable to agree with his submission that section 73 of the Evidence Act enables the Magistrate to give such a direction even when the case is still under investigation.
1069 Section 73 of the Evidence Act is as follows: "73.
In order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing or seal admitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing or seal has not been produced or proved for any other purpose.
The Court may direct any person present in Court to write any words or figures for the purpose of enabling the Court to compare the words or figures so written with any words or figures alleged to have been written by such person.
This section applies also, with any necessary modifications to finger impressions".
The second paragraph of section 73 enables the Court to direct any person present in Court to give specimen writings "for the purpose of enabling the Court to compare" such writings with writings alleged to have been written by such person.
The clear implication of the words "for the purpose of enabling the Court to compare" is that there is some proceeding before the Court in which or as a consequence of which it might be necessary for the Court to compare such writings.
The direction is to be given for the purpose of 'enabling the Court to compare ' and not for the purpose of enabling the investigating or other agency 'to compare '.
If the case is still under investigation there is no present proceeding before the Court in which or as a consequence of which it might be necessary to compare the writings.
The language of section 73 does not permit a Court to give a direction to the accused to give specimen writings for anticipated necessity for comparison in a proceeding which may later be instituted in the Court.
Further section 73 of the Evidence Act makes no distinction between a Civil Court and a Criminal Court.
Would it be open to a person to seek the assistance of the Civil Court for a direction to some other person to give sample writing under section 73 of the Evidence Act on the plea that it would help him to decide whether to institute a civil suit in which the question would be whether certain alleged writings are those of the other person or not ? Obviously not.
If not, why should it make any difference if the investigating agency seeks the assistance of the Court under section 73 of the Evidence Act on the plea that a case might be instituted before the Court where it would be necessary to compare the writings ? 1070 We may also refer here to Section 5 of the , which provides: "5.
If a Magistrate is satisfied that, for the purposes of any investigation or proceeding under the Code of Criminal Procedure, 1898, it is expedient to direct any person to allow his measurements or photograph to be taken, he may make an order to that effect, and in that case the person to whom the order relates shall be produced or shall attend at the time and place specified in the order and shall allow his measurements or photograph to be taken, as the case may be, by a police officer: Provided that no order shall be made directing any person to be photographed except by a Magistrate of the first class: Provided further, that no order shall be made under this section unless the person has at some time been arrested in connection with such investigation or proceeding".
Section 2(a) of the Act defines "measurements" as including "finger impressions and foot print impressions".
There are two things to be noticed here.
First, signature and writing are excluded from the range of section 5 of the and, second, 'finger impression ' are included in both section 73 of the Evidence Act and section 5 of the .
A possible view is that it was thought that section 73 of the Evidence Act would not take in the stage of investigation and so section 5 of the made special provision for that stage and even while making such provision, signature and writings were deliberately excluded.
As we said, this is a possible view but not one on which we desire to rest our conclusion.
Our conclusion rests on the language of section 73 of the Evidence Act.
Section 73 of the Evidence Act was considered by us in State (Delhi Administration) vs Pali Ram(1), where we held that a Court holding an enquiry under the Criminal Procedure Code was entitled under section 73 of the Evidence Act to direct an accused person appearing before it to give his specimen handwriting to enable the Court by which he may be tried to compare it with disputed writings.
The present question whether such a direction, under section 73 of the Evidence Act, can be given when the matter is still under investigation and there is no proceeding before the Court was expressly left open.
The question was also not considered in State of Bombay vs Kathi Kalu Oghad,(2) 1071 where the question which was actually decided was that no testimonial compulsion under article 20(3) of the Constitution was involved in a direction to give specimen signature and hand writing for the purpose of comparison.
The view expressed by us in the earlier paragraphs, on the construction of section 73, Evidence Act was the view taken by the Madras High Court in T. Subbiah vs section K. D. Ramaswamy Nadar(1), the Calcutta High Court in Farid Ahmed vs the State(2) (Mitter J., at page 32).
and Priti Ranjan Ghosh & Ors.
vs The State(3), the High Court of Punjab and Haryana in Dharamvir Singh vs State(4), the High Court of Madhya Pradesh in Brij Bhushan Raghunandan Prasad vs The State(5), the Orissa High Court in Srikant Rout vs State of Orissa(6) and the Allahabad High Court in the judgment under appeal.
A contrary view was taken by the Patna High Court in Gulzar Khan & Ors.
vs State(7) and the High Court of Andhra Pradesh in B. Rami Reddy & Ors.
vs State of Andhra Pradesh.(8) We do not agree with the latter view.
We accordingly dismiss the appeal and while doing so we would suggest the suitable legislation may be made on the analogy of section 5 of the , to provide for the investiture of Magistrates with the power to issue directions to any person, including an accused person, to give specimen signatures and writings.
section R. Appeal dismissed.
| The appellants were prosecuted for committing offences under section 16(1)(a)(i) read with section 7 of the .
After some evidence was led on behalf of the prosecution, plea bargaining took place between the prosecution, the accused and the Magistrate.
The accused pleaded guilty which plea was accepted by the Magistrate.
The accused were accordingly convicted and sentenced to undergo imprisonment till the rising of the Court and to pay a small fine.
The High Court initiated suo motu proceeding in revision.
The accused appeared and challenged the convictions recorded against them, but the High Court did not go into the circumstances in which the plea of guilty was entered, enhanced the sentences imposed on them to three months ' simple imprisonment and fine.
Allowing the appeals, ^ HELD: 1.
A conviction based on the plea of guilty entered by the accused as a result of plea bargaining cannot be sustained.
[1041E] 2.
The High Court was clearly in error in not setting aside the conviction and sending the case back to the Magistrate for trial in accordance with law, ignoring the plea of guilty entered by the appellants.
[1041F] 3.
The Magistrate trying an accused for a serious offence like adulteration must apply his mind to the evidence recorded before him and, on the facts as they emerge from the evidence, decide whether the accused is guilty or not.
[1040B] In the instant case the Magistrate had got a cyclostyled form of judgment in which merely blanks were filled in by him.
This clearly indicates that the Magistrate was in the habit of encouraging plea bargaining and letting off the accused lightly if there was a plea of guilty, enabling quick disposal without any effort.
This was a highly reprehensible practice.
The High Court had expressed strong disapproval of it.
[1039H 1040A] 4.
(i) It is highly regrettable that the prosecution as well as the Magistrate should have been a party to any plea bargaining in a prosecution for adulteration involving the health and well being of the community.
Adulteration has 1038 assumed alarming proportions and it is essential to wipe it out ruthlessly and completely by bringing to book offenders responsible for adulteration resulting in ruination of the health of the people.
The investigating agencies must intensify their efforts and catch hold of those who for private economic gain are prepared to jeopardize the health of the community.
When such persons are arraigned before the Court and found guilty a deterrent and punitive sentence must be imposed upon them.
[1039E G] (ii) If it is possible to get away with a light sentence in respect of an offence of adulteration the anti adulteration law will cease to have any meaning and validity.
[1039H] 5.
Administration of justice is a sacred task and partakes of the divine function.
It is with the greatest sense of responsibility and anxiety that the judicial officer must discharge his judicial function, particularly when it concerns the liberty of a persons.
[1040C] 6.
It would be contrary to public policy to allow a conviction to be recorded against an accused by inducing him to confess to a plea of guilty on an allurement being held out to him that if he enters a plea of guilty, he will be let off very lightly.
Such a procedure would be clearly unreasonable, unfair and unjust and would be violative of article 21 of the Constitution.
It would have the effect of polluting the pure fount of justice because it might induce an innocent accused to plead guilty to suffer a light and inconsequential punishment rather than go through a long and ardous criminal trial.
The judge also might be likely to be defected from the path of duty to do justice and he might either convict an innocent accused by accepting the plea of guilty or let of a guilty accused with a light sentence, thus, subverting the process of low and frustrating the social objective and purpose of the anti adulteration statute.
This practice would also tend to encourage corruption and collusion and as a direct consequence, contribute to the lowering of the standard of justice.
[1041B E]
|
Civil Appeals Nos.
1269 71 of 1982.
422 Appeals by Special leave from the Judgment and order dated 23rd the March, 1982 of the Allahabad High Court in Civil Miscellaneous Writ Petition Nos.
2328, 2424 and 1998 of 1981.
Shanti Bhusan and R.R. Jain for the Appellants.
Mrs. Shobha Dikshit for the Respondents.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
In these appeals by special leave filed against the common judgment dated March 23, 1982 of the Allahabad High Court, the validity of two Notifications issued by the Government of Uttar Pradesh under section 43 A of the (Act IV of 1939) (hereinafter referred to as 'the Act ') as in force in the State of Uttar Pradesh arises for consideration.
The two impugned Notifications are reproduced below: I. "Notification No. 68 T/XXX 4 15 KM/79 Dated: Lucknow: January 10, 1981.
Whereas, the Government of Uttar Pradesh is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68 C of the ) to all eligible applicants: Now.
therefore, in exercise of the powers under section 43.A of the , the Governor of Uttar Pradesh is pleased to direct that the stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68 C of the ) shall be granted according to the provisions of the Act to all eligible applicants and there shall be no upper limit to the number of stage carriages for which permits may be granted.
By order Karnail Singh, Sachiv 423 II.
Notification No. 241 T/XXX 4 15 P/79 Dated: January 23, 1981 The Governor being satisfied that it is expedient in the public interest so to do, is pleased to direct in exercise of the powers under section 43 A of the (Act No. 4 of 1939) that while considering applications for stage carriage permits, the State Transport Authority or a Regional Authority: (i) shall have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub section (1) of section 47 of the said Act and shall also take into consideration representations made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and (ii) shall be deemed to have made sufficient compliance of the provisions of section 57 of the said Act, if it intimates the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation is received with in the prescribed period of time, it shall be presumed that they have no representation to make, and has considered any representation made by such local authority and police authority.
By order Karnail Singh, Sachiv.
" The appellants who are stage carriage operators challenged The validity of the above Notifications in the writ petitions filed by them under Article 226 of the Constitution before the High Court inter alia on the ground that they were ultra vires the provisions of the Act under which they had been issued.
The High Court dismissed the writ petitions after negativing the contentions of the 424 appellants.
Aggrieved by the decision of the High Court the appellants have preferred these appeals by special leave as stated above.
It is necessary at this stage to give a resume of the relevant statutory provisions to understand the rival contentions of the parties.
On finding that the Indian Motor Vehicles Act, 1914 which Was brought into force at an early stage of development of motor transport was inadequate to meet the new situation created by the growth of motor transport by the year 1939, the Central Legislature passed the Act for the purpose of regulating motor traffic in the interests alike of the safety and convenience of the public and of the development of a coordinated system of transport.
The Act underwent major alterations in 1956 and 1969.
Broadly the Act provided inter alia for registration of motor vehicles, licensing of drivers and conductors, grant of permits to ply public service vehicles and public carriers, operation of road transport service by State transport undertakings in any area or on any route to the exclusion, complete or partial of other persons, construction, equipment and maintenance of motor vehicles, control of traffic, insurance of motor vehicles against third party risks and offences, penalties and procedure.
The State Governments were entrusted with the duty of framing rules on various matters connected with the topics dealt with by the Act.
The subject of regulation of motor vehicles being within the scope of Entry 35 mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied in List III of the Seventh Schedule to the Constitution, various amendments were made from time to time by several State Legislatures with the assent of the President of India either adding to or modifying the provisions of the Act.
Chapter IV of the Act which includes section 42 to section 68 contains provisions pertaining to the control of motor vehicles.
Section 42 of the Act provides that no owner of a transport vehicle shall r use or permit the use of the vehicle in any public place whether or not such vehicle is actually carrying any passenger or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used.
A 'transport vehicle ' is defined in section 2(33) of the Act as a public service vehicle or a goods vehicle.
A 'public service vehicle ' is defined in section 2(25) of the Act as any motor vehicle used or adapted to be used for the carriage 425 of passengers for hire or reward, and includes a motor cab, contract carriage and stage carriage.
Section 2(29) of the Act states that a 'stage carriage ' means a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey.
Section 45(1) of the Act prescribes that every application for a permit shall be made to the Regional Transport Authority of the region in which it is proposed to use the vehicle or vehicles.
When the vehicle is to be used in two or more regions, the applications for permits may be made as provided in the provisos to section 45(1) or section 45(2) of the Act, as the case may be.
The constitution of the Regional Transport Authorities and the State Transport Authorities is dealt with by section 44 of the Act.
A State Transport Authority or a Regional Transport Authority shall consist of a Chairman who has had judicial experience or experience as an appellate or revisional authority under any law relating to land revenue and in the case of a State Transport Authority, such other officials and non officials, not being less than two, and, in the case of Regional Transport Authority such other persons (whether officials or not) not being less than two, as the State Government may think fit to appoint.
An application for a stage carriage permit shall have to contain the particulars mentioned in section 46 of the Act.
Prior to its amendment in 1978, section 47 as amended by Act 100 of 1956 read as follows: "47.
Procedure of Regional Transport Authority in considering application for stage carriage permits. (1) A Regional Transport Authority shall, in considering an application for a stage carriage permit.
have regard to the P following matters, namely: (a) the interest of the public generally; (b) the advantages to the public of the service to be provided, including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; (c) the adequacy of other passenger transport services operating or likely to operate in the near future, 426 whether by road or other means, between the places to be served.
(d) the benefit to any particular locality or localities likely to be afforded by the service; (e) the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending; (f) the condition of the roads included in the proposed route or area; and shall also take into consideration any representations made by persons already providing passenger transport facilities by any means along or near the proposed route or area, or by any association representing persons interested in the provision of road trans port facilities recognised in this behalf by the State Government, or by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies: Provided that other conditions being equal, an application for a stage carriage permit from a cooperative society registered or deemed to have been registered under any enactment in force for the time being shall, as far as may be, be given preference over applications from individual owners.
(2) A Regional Transport Authority shall refuse to grant a stage carriage permit if it appears from any timetable furnished that the provisions of this Act relating to the speed at which vehicles may be driven are likely to be contravened: Provided that before such refusal an opportunity shall be given to the applicant to amend the time table so as to conform to the said provisions.
(3) A Regional Transport Authority may, having regard to the matters mentioned in sub section (1), limit the 427 number of stage carriages generally or of any specified type for which stage carriage permits may be granted in the region or on any specified area or on any specified route within the region.
" The procedure in applying for and granting permits is set out in section 57 of the Act.
Section 48 of the Act provides that subject to section 47, a Regional Transport Authority may, on an application made to it under section 46, grant a stage carriage permit in accordance with the application or with such modifications as it deems fit or refuse to grant such a permit.
If the Regional Transport Authority decides to grant a stage carriage permit, it may attach to it all or any of the conditions mentioned in section 48(3) of the Act.
The proceedings before a Regional Transport Authority are quasi judicial in character.
While considering the application for the grant of a stage carriage permit the Regional Transport Authority has to consider all representations referred to in section 57(3).
Sub section (5) of section 57 of the Act provides that when any representation such as is referred to in sub section (3) thereof is made, the Regional Transport Authority shall dispose of the application at a public hearing at which the applicant and the persons making the representations shall have an opportunity of being heard either in person or by a duly authorised representative.
Representations can be made among others by any person who is providing transport facilities on the route or in the area, any rival applicant, police authorities and local authorities.
Any person who satisfies the qualifications mentioned in section 64 of the Act and who is aggrieved by the resolution of the Regional Transport Authority may file an appeal before the State Transport P Appellate Tribunal which should consist of a wholetime judicial officer not below the rank of a District Judge.
An order of a Regional Transport Authority or of a State Transport Authority against which no appeal can be filed is subject to revision by the State Transport Appellate Tribunal under section 64 A of the Act.
Subsection (1) of section 43 of the Act which confers power on the State Government to control transport reads thus: "43.
Power to State Government to control transport (1) A State Government having regard to: 428 (a) the advantages offered to the public, trade and industry by the development of motor transport, (b) the desirability of coordinating road and rail trans port.
(c) the desirability of preventing the deterioration of the road system, and (d) the desirability of preventing uneconomic competition among motor vehicles, may, from time to time, by notification in the official Gazette, issue directions to the State Transport Authority: (i) regarding the fixing of fares and freights (including the maximum and minimum in respect thereof) for stage carriages, contract carriages and public carriers; (ii) regarding the prohibition or restriction, subject to such conditions as may be specified in the directions, of the conveying of long distance goods traffic generally, or of specified classes of goods, by private or public carriers, (iii) regarding the grant of permits for alternative routes or areas, to persons In whose cases the existing permits are not renewed in pursuance of the provisions of sub section (1 D) of section 68 F, or are cancelled or the terms thereof are modified in exercise of the powers conferred by clause (b) or clause (c) of sub section (2) of section 68 F; (iv) regarding any other matter which may appear to the State Government necessary or expedient for giving effect to any agreement entered into with the Central Government or any other State Government or the Government of any other country relating to the regulation of motor transport generally, 429 and in particular to its coordination with A other means of transport and the conveying of long distance goods traffic: Provided that no such notification shall be issued unless a draft of the proposed directions is published in the official Gazette specifying therein a date being not less than one month after such publication, on or after which the draft will be taken into consideration and any objection or suggestion which may be received has, in consultation with the State Transport Authority, been considered after giving the representatives of the interests affected an opportunity of being heard.
" In the year 1972, however, the Act was amended by the Legislature of the State of Uttar Pradesh introducing a new section being section 43 A by the Motor Vehicles (U.P. Amendment) Act, 1972 with the assent of the President.
The material part of section 43 A which was newly introduced by the said amending U.P. Act read as under: "43 A. (1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to the State Transport Authority or to any Regional Transport Authority, and such Transport Authority shall give effect to all such directions.
(2) Without prejudice to the generality of the fore going power, where the State Government is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68(C) or contract carriage permits or public carrier permits to all eligible applicants, it may by notification in the Gazette issue a direction accor dingly, and thereupon all transport authorities as well as the State Transport Appellate Tribunal constituted under section 64 shall proceed to consider and decide all applications, appeals and.
revisions in that behalf (including any pending applications, appeals and revisions) as if 430 (a) in section 47 (i) for sub section (1) the following sub sections were substituted: (ii) A Regional Transport Authority shall in considering an application for a stage carriage permit, have regard to the following matters, namely (a) the interest of the public generally; (b) the advantage to the public of the service to be provided including the saving of time likely to be effected thereby and any convenience arising from journeys not being broken; (c) the benefit to any particular locality or localities likely to be afforded by the service; and shall also take into consideration any representation made by any local authority or police authority within whose jurisdiction any part of the proposed route or area lies; and sub section (3) were omitted The above U.P. Act was preceded by the U.P. Ordinance which contained more or less the same provisions.
The ordinance was substituted by the said U.P. Act.
The object of enacting section 43 A of the Act was set out in the Statement of objects and Reasons attached to the relevant U.P. Bill which read as follows: "Objects and Reasons operators engage in the race for securing permits for stage carriage on non nation alised routes.
Due to limitation on the number of permits this business is controlled by a few persons.
Complaints in this regard are made every other day.
Therefore, with a view to making it easier to secure permits in respect of non nationalised routes and to introducing simplicity in procedure and to providing greater employment and securing 431 equitable distribution thereof it was considered necessary to amend sections 47, SO, SS and 64 of the , suitably.
Accordingly, in the public interest and with the aforesaid object in view, the Motor Vehicles (Uttar Pradesh Amendment) ordinance, 1972, was promulgated.
This Bill is introduced to replace the said ordinance.
Pursuant to the power conferred on it by section 43 A of the Act, the Government of the State of Uttar Pradesh issued the following directions on March 30, 1972 by a Notification, the relevant part of which reads as under: "Whereas the State Government is of opinion that it is in the public interest to grant stage carriage permits (except in respect of routes or areas for which schemes have been published under section 68 C of the ) contract carriage permits and public carrier permits to all eligible applicants.
Now, therefore, in exercise of the power conferred by section 43 A of the the Governor is pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants.
" The validity of section 43 A of the Act introduced by the U. P. Legislature and of the Notification dated March P 30, 1972 issued by the Government of Uttar.
Pradesh pursuant to that section was questioned in some writ petitions filed by some motor operators in the High Court of Allahabad.
Those petitions were dismissed.
On appeal this Court upheld the validity of section 43 A of the Act as well as the Notification by its judgment in Hans Raj Kehar & Ors.
vs The State of U.P. & Ors.(1) which was delivered on December 4, 1974.
Within about three and half years from the date of the above said notification the Government of Uttar Pradesh realised that it was necessary to review the whole question of issuing permits to all eligible applicants.
Accor 432 dingly the State Government issued a Notification on September 24, 1975 which ran as follows: "Whereas, in exercise of the power conferred by Section 43 A of the the State Government was by notification No. 1188 T/XXX 4, dated March 30, 1972, pleased to direct that stage carriage permits (except in respect of routes or areas aforesaid) contract carriage permits and public carrier permits shall be granted according to the provisions of the said Act to all eligible applicants: And whereas, on further consideration the State Government is of opinion that the policy of granting such permits to all eligible applicants requires review with a view to: (a) Preventing unproductive expenditure and under utilization of capital and fuel.
(b) Preventing elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route.
(c) Facilitating long term planning of passenger road transport services.
And whereas, such review is likely to take some time and in the mean time it is necessary to stay the disposal of all pending applications for permits or entertainment of fresh applications.
Now, therefore, in exercise of the powers conferred by the said Section 43 A of the , read with Section 21 of the U.P. General Clauses Act, 1904, the Governor is pleased to direct that: 1.
The Notification No. 1198 T/XXX 4, dated 30th March, 1972 be and is hereby rescinded with immediate effect.
433 2.
The consideration of applications for stage carriage permits pending with any Transport Authority shall stand postponed until further directions are issued in this behalf by the State Government.
No fresh applications for such permits shall be entertained until further directions are issued in this behalf by the State Government.
" The above Notification shows that as a consequence of the policy of granting permits to all eligible applicants, necessity had arisen to take measures (i) to prevent unproductive expenditure and under utilisation of capital and fuel, (ii) to prevent elimination of small operators due to unfair competition resulting from the issue of more permits than required for a route; and (iii) to embark upon long term planning of passenger road transport services.
It is stated that by U.P. Ordinance 35 of 1975, Section 43 A was amended.
This ordinance was replaced by the Uttar Pradesh Act 15 of 1976.
By this Act, sub section (2) of section 43 A. which had been added in 1972 was substituted with retrospective effect from the date of its original enactment.
Section 43 A after it was amended by the U.P. Act 15 of 1976 read as under: "43 A. Power of State Government to issue directions to Transport Authorities (1) The State Government may issue such directions of a general character as it may consider necessary or expedient in the public interest in respect of any matter relating to road transport to the State Transport Authority or to any Regional Transport Authority, and such Transport Authority shall give effect to all such directions.
(2) Without prejudice to the generality of the provisions of sub section (1) such directions may be given in respect of any of the following matters, namely: (a) the number of stage carriage or contract carriage permits that may be granted in respect of any route or area.
434 (b) the preference or the order of preference to be given to or the quota to be fixed for, specially deserving categories, such as exhibit Army personnel, educated unemployed persons, such persons holding driving licences as are members of cooperative societies formed for passenger transport business, persons belonging to the Scheduled castes and Scheduled Tribes.
(c) the procedure for grant of permits, and for selection from among the applicants, including selection by drawing of lots from among persons belonging to the same category.
(3) Any direction under sub section (1) may be issued with retrospective effect.
(4) Where any direction is issued under sub section (1) to any Transport Authority, then any appeal or revision pending before the State Transport Appellate Tribunal shall also be decided in such manner as to give effect to such directions.
(5) Where any direction is issued under sub section (1) with retrospective effect then (a) any Transport Authority or the State Transport Appellate Tribunal may review any order passed earlier by it with a view to making it conform to such direction and may for that purpose cancel any permit already issued.
(b) any Transport Authority may apply to the High Court earlier with a view to enabling such authority to comply with such direction.
(6) The provisions of this section shall have effect not withstanding anything contained in sections 47, 50 and 57.
" The policy behind the above amendment was stated in the Statement of objects and Reasons placed before the State Legislature as follows: 435 "(5) In 1972 the State Government had accepted a policy of granting bus permits liberally.
Reconsideration of the said policy however, became necessary with a view to checking unproductive capital expenditure and unnecessary consumption of fuel and preventing the elimination of small operators as a consequence of unreasonable competition and to removing difficulties in the implementation of long term plans pertaining to passenger road transport services.
It was accordingly considered necessary to amend the , to authorise the State Government to issue directions from time to time in regard to the number of permits that may be granted in respect of any route or area, the preference to be given to specially deserving categories and the procedure for grant of permits.
" Pursuant to the said amended section 43 A of the Act, the Government of Uttar Pradesh issued a Notification containing directions on March 12, 1976 in the following terms: "Whereas, in exercise of the powers conferred by section 43 A of the M.V. Act, 1939, the State Government had by a notification No. 4251 T/XXX 4 9P/72 dated September 24 1975, as amended by notification No. 4530 T/ XXX 4 75 dated October 6,1975 postponed the consideration of applications for permits by any transport authority in respect of non notified routes until further directions in this behalf of the State Government.
Now, therefore, in exercise of the powers conferred by the said section 43 A (2) of the M.V. Act, 1939 read with section 21 of the General Clauses Act, 1904, the Governor is pleased to direct: (1) That the S.T.A. and R.T. As.
while fixing the number of Additional Stage Carriage permits to be issued at a given time on non notified routes, shall in addition to the consideration of the matter mentioned in sub section (1) of section 47 of the M.V. Act, ensure that the operation of the total number of stage carriages on any route, taking 436 into consideration the existing as well as the additional permits proposed to be issued, would be economically viable on the existing fare structure as per the norms as laid down by the State Government from time to time . . . . . ." The above notification also contained directions regarding the principle to be followed in determining the number of permits that could be issued and reservation of permits for operators displaced by nationalisation, educated unemployed, members belonging to the Scheduled Castes, the Scheduled Tribes and other backward classes, unemployed army drivers and cooperative societies.
These directions were superseded by the issue of a fresh notification under section 43 A by the State Government on October 12, 1977 which was superseded by a Notification dated October 15, 1978.
Within a fortnight from the date of the last Notification referred to above Parliament amended the Act by enacting The Motor Vehicles (Amendment) Act, 1978 (Act 47 of 1978) which inter alia amended the proviso to subsection (1) of section 47 of the Act and inserted sub sections (1A) to (1H) in that section.
After this amendment, the proviso to sub section (1) of section 47 of the Act reads thus: "47.
(1). . .
Provided that other conditions being equal, an application for a stage carriage permit from a co operative society registered or deemed to have been registered under any enactment in force for the time being and an application for a stage carriage permit from a person who has a valid licence for driving transport vehicles shall, as far as may be, be given preference over applications from individual owners.
" The new sub sections (1A) to (1H) of section 47 of the Act read: "47.
(1) . . 437 (1A) The Government of a State shall reserve in that State certain percentage of stage carriage permits for the Scheduled Castes and the Scheduled Tribes.
Explanation In this section and in sections 55 and 63, 'Scheduled Castes, ' and 'Scheduled Tribes ' have the meanings respectively assigned to them in Article ' 366 of the Constitution.
(1B) The reservation of permits under sub section (1A) shall be in the same ratio as in the case of appointments made by direct recruitment to public services in the State.
(1C) The Government of a State may, having regard to the extent to which persons belonging to economically weaker sections of the community have been granted stage carriage permits in that State: (a) reserve in that State such percentage of stage carriage permits, as may be prescribed, for persons belonging to economically weaker sections of the community, or (b) notwithstanding anything contained in the proviso to sub section (1), give preference, in such manner as may be prescribed, to applications for stage carriage permits from such person Explanation I In this section and in sections 55, 63 and 68, a person shall be deemed to belong to economically weaker section of the community, if and only if, on the prescribed date: (a) the annual income of such person together with the annual income, if any, of the members of his family; or G (b) the extent of land (whether in one class or in different classes), held by such person together with that, if any, held by the members of his family, or 438 (c) the annual income and the extent of land aforesaid, does, or do not exceed such limit as may be prescribed.
Explanation II.
For the purposes of Explanation I, "family", in relation to an individual, means the wife or husband, as the case may be, of such individual and the minor children of such individual.
(1D) The number of permits reserved under sub section (1B) and clause (a) of sub section (1C), shall not exceed fifty per cent of the total number of stage carriage permits granted during a calendar year.
(1E) In giving effect to the provisions of sub section (1B) and clause (a) of sub section (1C) the Regional Transport Authority or the State Transport Authority may, if it considers necessary or expedient so to do, group the various routes within its jurisdiction.
(1F) Where any stage carriage permit is to be granted from the quota reserved under sub section (1B) or clause(a) of sub section (1C) to any cooperative society registered or deemed to have been registered under any enactment in force for the time being or any firm to which the provisions of the (9 of 1932), apply, no permit shall be granted to such society or firm unless the members of the co operative society or the partners of the firm belong to the Scheduled Castes, the Scheduled Tribes or economically weaker sections of the community: Provided that where the members of such co operative society or the partners of such firm are partly from the Scheduled Castes, partly from the Scheduled Tribes and partly from the economically weaker sections of the community, or from any two of these categories, any permit under this sub section shall be granted to such society or firm only from the quota reserved for the category to which the largest number of members of the co operative society, or as the case may be, partners of the firm belong: 439 Provided further that where no reservation has been made in the State for economically weaker sections of the community under clause (a) of sub section (1C), no permit under this sub section shall be granted to a co operative society or firm unless the members of such society or partners of such firm belong to the Scheduled Castes or the Scheduled Tribes or partly to the Scheduled Castes and partly to the Scheduled Tribes and the permit to such society or firm shall be granted only from the quota reserved for the Scheduled Castes or the Scheduled Tribes according as to whether the larger number of the members of the co operative society, or partners of the firm, belong to the Scheduled Castes or the Scheduled Tribes.
(1G) The circumstances under which, the manner in which, and the extent to which, reservation under sub section (1A) and clause (a) of sub section (1C) may be carried forward shall be such as may be prescribed.
(1H) Notwithstanding anything contained in this section, an application for stage carriage permit from a State transport undertaking for operating in any inter State route shall be given preference over all other applications: Provided that the authority shall not grant a permit under this sub section unless it is satisfied that the State transport undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68D where the undertaking operates the service.
Explanation.
For the purposes of this sub section, 'inter State route ' means any route Lying continuously in two or more States.
" By the amendment of section 47 of the Act as stated above, Parliament directed that the Regional Transport Authority while considering applications for stage carriage permits should, provided that other conditions being equal? give preference to an application 440 from a person who has a valid licence for driving transport vehicles over applications from individual owners.
Parliament also provided for reservation of certain percentage of permits for state carriages in favour of persons belonging to the Scheduled Castes and the Scheduled Tribes in the same ratio as in the case of appointments made by direct recruitment by a State Government to public services in that State.
Since it was considered necessary to promote the well being of economically weaker sections of the community, the State Government was empowered under certain circumstances either to reserve certain percentage of permits for stage carriages for persons belonging to economically weaker sections of the community or to give preference to them in the prescribed manner.
It was however, provided that the number of permits reserved under section 47(1B) and (1C)(a) of the Act should not exceed fifty per cent of the total number of stage carriage permits granted in a calendar year.
It was also provided that if a State Transport Undertaking applied for a stage carriage permit operating in any inter State route, such application should be given preference over all other applications provided the authority we satisfied that the Undertaking would be able to operate in the inter State route without detriment to its responsibility for providing efficient and adequate road transport service in any notified area or notified route as is referred to in sub section (3) of section 68 D of the Act where the Undertaking operated its service.
By the very same amending Act of 1978 Parliament also amended section 68 of the Act by inserting clauses (ci), (cii), (ciii) and (civ) enabling the State Governments to frame rules for implementing subsections (1A) to (1H) of section 47 of the Act.
The above said amendments made to sections 47 and 68 came into force on January 16, 1979.
It is conceded by the learned Attorney General who appeared for the State Government that these amendments which were made by Parliament would have an over riding effect on section 43 A of the Act introduced earlier by the State Legislature and that section 43 A should be read subject to those later amendments made by Parliament.
Curiously the State Government issued on January IO, 1981 and January 23, 1981 the impugned notifications which are set out at the commencement of this judgment.
By the first notification, the State Government directed the Regional Transport Authorities of the State of Uttar Pradesh to issue stage carriage permits (except in respect of routes or areas for which schemes had been published under section 68 C of the Act) to all eligible applicants and that there should be no upper limit to the number of stage carriages for which permits might be 441 provided.
By the second impugned notification dated January 23, 1981, the State Government directed the State Transport Authority and the Regional Transport Authorities to have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub section (1) of section 47 of the Act and should also take into consideration representation made by the local authority or police authority within whose jurisdiction any part of the proposed route or area lay.
It also directed that section 57 should be deemed to have been complied with if the Transport Authority concerned intimated the particulars of the applications to such local authority and police authority for making representations, if any, within a period of fifteen days from the date of despatch of the intimation with the stipulation that if no representation was received within the prescribed period of time, it would be presumed that they had no representation to make and considered any representation made by such local authority and police authority; A reading of these two notifications shows that the State Government ignored, first, the legislative policy underlying the Uttar Pradesh Act 15 of 1976 by which the new sub section (2) of section 43 A was enacted in substitution of the former sub section (2) with retrospective effect.
As stated earlier, the State Legislature introduced the new sub section (2) of section 43 A after it realised the mistake committed by the State Government in issuing the notification in the year 1972 directing the issue of bus permits liberally in favour of all eligible applicants which had resulted in investment of unproductive capital expenditure and under utilisation of capital and fuel and in unreasonable competition which eventually eliminated small operators from business.
The State Government also ignored the new policy governing the issue of permits introduced by Parliament by amending section 47 of the Act.
It was argued on behalf of the State Government before the High Court that the State Government d not contravened either section 43 A, or the provisions of section 47 as amended in the year 1978.
The High Court dismissed the writ petitions observing that the Statement of objects and Reasons attached to the Bill which was ultimately enacted as the U.P. Act 15 of 1976 could not over ride the clear provisions of section 43 A as amended by that Act.
The High Court upheld the notification dated January 10, 1981 and further observed that since the schemes of grant of free permits had been upheld by it 'the State Government had the power to prescribe the procedure to be followed in 442 granting the same which has been provided for by the Notification dated January 23, 1981 '.
Repelling the contention of the writ petitioners that in the absence of reservation of the required percentage of permits for persons belonging to the Scheduled Castes, the Scheduled Tribes and weaker sections as provided in section 47 as amended by Parliament in 1978, the grant of permits would be vitiated, the High Court observed as follows: "The question of reservation, however, arises only in those cases where the seats or articles are limited for distribution or allotment but where there is no limit or no fixed number, the question of reserved on will not arise.
In that event, every body would be served according to his need and aspiration.
Hence, if under section 43 A a direction has been made for grant of stage carriage permit to all eligible applicants without putting any fixed number for the vehicles to ply, the interest of the Scheduled Castes and Scheduled Tribes would be sufficiently safeguarded.
A member of the Scheduled Caste or Scheduled Tribe as well as economically weaker section of the community would as much be entitled to get a permit to run his vehicle as a member of any other community.
It is where the seats are limited that the legislature thought of making a provision to reserve the grant of permits in their favour to the extent of 25 per cent.
The principle behind reservation in the grant of stage carriage permits employed by the Parliament appears to be the same as in reserving appointment in the Government service.
If today government services are available in abundance, the question of reservation would not arise.
It is only on account of the posts being limited that the question of reservation has arisen.
So we are not able to agree with the submission of the petitioner 's learned counsel that there is a conflict between section 43 A, as inserted by the U.P. Legislature and the amendments made in section 47 by Parliament in the ." The High Court further proceeded to observe that though the tow impugned notifications did not follow the procedure prescribed 443 by sub section (2) of section 43 A as it is now in force in the State of Uttar Pradesh, they could be sustained under sub sec.
(1) of section 43 A which authorised the State Government to issue such directions of a general character as it might consider necessary or expedient in the public interest in respect of any matter relating to road transport to the State Transport Authority or to the Regional Transport Authority and which required such authority to give effect to any such directions.
The High Court also relied upon the decision of this Court in Hans Raj Kehar 's case (supra) to hold that larger number of buses operating on different routes would be for the convenience and benefit of the travelling public.
We may here state that any observations made in Hans Raj Rehar 's case (supra) would be inapplicable so far as these cases presently before us are concerned.
In that case the Court was concerned with sub section (2) of section 43 A of the Act as it stood then which was a provision enacted by the Legislature.
That sub section provided that without prejudice to the generality of the power contained in section 43 A(1) of the Act where the State Government was of opinion that it was in public interest to grant stage carriage permits (except) in respect of routes or areas for which schemes have been published under section 68 (C) or contract carriage permits or public carrier permits to all eligible applicants it may issue appropriate directions as stated therein.
That sub section contained a clear legislative policy which considered that there could be no public prejudice if all eligible applicants were granted permits.
Without saying anything more on the point, it may be stated that whatever this Court may have observed while considering that provision would not apply now as there is a clear departure made by the Legislature from that policy when it enacted the new sub section (2) of section 43 A.
In the face of this amendment by which the former sub section (2) of section 43 A which specifically authorised he State Government when it was satisfied that it was necessary to do so in the public interest to issue directions to the Transport Authorities to grant permits to all eligible applicants was deliberately taken away by the State Legislature, the High Court was wrong in holding that such power was still available under sub section (1) of section 43 A of the Act which was widely worded.
The High Court shut its eyes to the realities of the situation when it observed that in 444 this case the contents of the Statement of objects and Reasons were irrelevant as the provisions of section 43 A (1) were very clear.
Even without the aid of the Statement of objects and Reasons it has to be held that by the substitution of the former sub section (2) by the new sub section (2) in section 43 A the Legislature clearly expressed itself against the policy of granting permits to all eligible applicants without any consideration to the needs of any particular locality or route or to the qualification of applicants.
It is a well settled rule of construction of statutes that whenever a court is called upon to interpret an amended provision it has to bear in mind the history of that provision, the mischief which the Legislature attempted to remedy, the remedy provided by the amendment and the reason for providing such remedy.
Therefore, after the amendment at any rate it has to be held that sub section (1) of section 43 A of the Act did not comprehend within its scope the power to issue direction, for issuing permits to all eligible applicants without any sort of restriction relevant to the scheme of the Act.
What does section 43 A(1) after all say ? It says that the State Government may issue such directions of a general character as it may consider necessary in the public interest What is the meaning of the term 'public interest ' ? In the context of the Act, it takes within its fold several factors such as, the maximum number of permits that may be issued on a route or in any area having regard to the needs and convenience of the travelling public, the non availability of sufficient number of stage carriage services in other routes or areas which may be in need of running of additional services, the problems of law and order, availability of fuel, problems arising out of atmospheric pollution caused by a large number of motor vehicles operating in any route or area, the condition of roads P and bridges on the routes, uneconomic running of stage carriage services leading to elimination of small operators and employment of more capital than necessary in any sector leading to starvation of capital investment in other sectors etc.
Public interest under the Act does not mean the interest of the operators or of the passengers only.
We nave to bear in mind that like every other economic activity the running of stage carriage service is an activity which involves use of scarce or limited productive resources.
Motor Transport involves a huge capital investment on motor vehicles, training of competent drivers and mechanics establishment of workshops, construction of safe roads and bridges, deployment of sufficient number of 445 policemen to preserve law and order and several other matters.
To say that larger the number of stage carriages in any route or area more convenient it would be to the members of the public is an over simplification of a problem with myriad facts affecting the general public.
If we run through the various provisions of the Act it becomes clear how much attention is given by it to various matters affecting public interest.
There are provisions relating to licensing of drivers on the basis of their competence, licensing of conductors, specifications to which the motor vehicles should conform, coordination of road and rail transport, prevention of deterioration of the road system, prevention of uneconomic competition among motor vehicles, fixation of reasonable fare, compliance by motor vehicles with the prescribed time table, construction of bus stands with necessary amenities, maintenance of standards of comfort and cleanliness in the vehicles, development of inter State tourist traffic and several other matters with the object of making available adequate and efficient transport facilities to all parts of the country.
Any direction given by the State Government under section 43 A of the Act should therefore, be in conformity with all matters regarding which the statute has made provision.
In this situation to say that any number of permits can be issued to any eligible operator without any upper limit is to overstep the limits of delegation of statutory power and to make a mockery of an important economic activity like the motor transport.
It is surprising that the High Court has reached the conclusion that the preferences and reservations to be observed while granting permits as stated in the proviso to sub section (1) to section 47 and in sub sections (1A) to (1H) of section 47 have not been contravened as there is no restriction on the number of permits to be issued.
The observation of the High Court that preferences have to be shown and reservations have to be made only when there is scarcity of permits and since there are no restrictions on the number of permits to be issued there is no necessity to make any such provision really shocks us.
The High Court erred in not noticing that it was dealing with a vital economic activity which could be carried on at a huge cost both to the operator and to the Government and that by issuing the notification containing a direction to the Transport Authorities to issue limitless number of permits, the 446 State Government had attempted to circumvent sub sections (1) and (1A) to (1H) of section 47 of the Act.
Preferences and reservations have value only when there is a limit on the number of permits to be issued and in the context of the Act there should necessarily he a limit on the issue of permits to operate motor vehicles in respect of any route or area.
By the method adopted by it the State Government has virtually allowed the rich and well to do businessman who can bear the loss for some time to introduce any number of vehicles on a route or in any area until all the small operators who also may take the permits to leave the field owing to the inevitable loss that ensues by the operation of an unlimited number of vehicles.
The learned Attorney General while conceding that the amendment made in 1978 to section 47 of the Act should prevail contended that they had not been violated by the impugned notifications.
We do not agree with the above submission.
We are clearly of the view that the State Government has transgressed the provisions contained in sub section (1) and sub sections (1A) to (1H) of section 47.
It has failed to comply with the duty imposed on it by those provisions.
We are of the view that the two notifications are clearly outside the scope of the Act.
The first notification which directs that all eligible applicants shall be granted permits and that there shall be no upper limit to the number of permits to be issued for stage carriages and the second notification which says that the Transport Authorities shall have regard only to matters referred to in clauses (a), (b), (d) and (f) of sub section (1) of section 47 of the Act and thereby precludes the Transport Authorities to take into consideration matters contained in the proviso to section 47(1) and in sub section (1A) to (1H) of section 47 of the Act are ultra vires the Act and they are liable to he struck down.
We, therefore, allow these appeals, set aside the judgment of the High Court in each of these cases and declare that the Notification No. 68 T/XXX 4 15 KM/79 dated January 10, 1981 and the Notification No. 241 T/XXX 4 15 P/79 dated January 23,1981 issued by the GoverDmeDt of the State of Uttar Pradesh under section 447 43 A of the Act are ultra vires and, therefore, void and, ineffective.
In the circumstances of the case.
there will be no order as to costs.
H.L.C. Appeals allowed.
| The proviso to section 8 of the Orissa Sales Tax Act, 1947 (Principal Act) lays down that the same goods cannot be taxed under it at more than one point in the same series of sales or purchases by successive dealers.
In 1975 the State Legislature enacted the Orissa Additional Sales Tax Act (the Act) levying additional sales tax on certain classes of dealers.
In 1979 the State Legislature amended the Act by the Orissa Additional Sales Tax (Amendment) Act, 1979 by which sections 2 and 3 of the Act were substituted by new sub sections 2 and 3.
After the amendment section 3 of the Act provided that every dealer shall, in p addition to the sales tax payable by him for 3 year under the said Act be liable to pay additional tax at such rate not exceeding one per cent of his gross turnover (excluding the gross turnover which relates to sale and purchase of declared goods) for that year as may be notified from time to time by the State Government.
By a notification the State Government notified the rates of additional tax payable under section 3 of the Act as amended in 1979 at one half per cent of the annual gross turnover.
Sub section (2) of section 3 made it clear that the provisions of the Principal Act would mutatis mutandis apply in relation to the additional tax as if they apply in relation to the tax payable under the Principal Act.
Construing section 3 of the Act after its amendment, the State Government took the view that the new levy was in the nature of a multi point tax and that every dealer was liable to pay additional tax on his annual gross turnover irrespective of its taxability.
under the Principal Act.
364 In a number of writ petitions filled before the High Court by dealers it was A contended that section 8 of the Principal Act which prohibited the levy of tax at more than one point in the same series of sales or purchases by successive dealers was applicable to the additional tax leviable under the Act as amended in 1979.
Without referring to the effect of the provisions of section 3 of the Act the High Court held that since the Principal Act and the Act as amended in 1979 had been passed by a competent legislature providing for a different base and for a different scheme it was not open to the assessee to rely upon any of the provisions of the Principal Act relating to incidence and levy of tax.
In appeal to this Court it was contended on behalf of the appellants that wherever there was no express provision to the contrary in the Act the provisions of the Principal Act, including those relating to the incidence and levy of tax should apply to the additional tax also.
The Department on the other hand contended that section 3(2) of the Act was intended only to make those provisions of the Principal Act relating to assessment and collection of tax applicable to proceedings under the Act and no part of section 33 to section 8 of the Principal Act would be applicable to the levy of additional tax.
Allowing the appeals, ^ HELD: If the contention of the Department that only the machinery provisions of the Principal Act become applicable to the proceedings under the Act is accepted it would lead to many anomalies.
[377 F] Section 8 of the Principal Act which begins with a non obstante clause is given an over riding effect over the rest of the provisions of the Principal Act.
Levy of tax at a single prescribed point and prohibition against levy of tax at more than one point is an important characteristic of the scheme of the Principal Act.
[370 C D] The Act was virtually in the nature of an amendment of the Principal Act.
The additional sales tax payable by dealers specified in section 2(a), (b) and (c) as originally enacted was in the nature of an enhancement of their liability to pay tax under the Principal Act by specified percentages but they were prohibited from passing on the incidence of additional tax to the purchasers.
[372 E F] Although the provisions of the Act could have been incorporated in the Principal Act itself, by the introduction of sections 2 and 3 in the Principal Act, the State Legislature passed a separate Act.
But it was made clear by section 3(2) of the Act that the provisions of the Principal Act would mutatis mutantis apply in relation to the additional tax as they apply in relation to the tax payable under the Principal Act.
The two Acts, i.e., the Principal Act and the Act as originally enacted had to be read together in order to make the provisions contained in the Act effective.
This position continued up to the coming into force of the Amending Act on April 1, 1979 by which sections 2 and.
3 of the Act wore substituted by new sections 2 and 3.
[373 G H, 374 A C] 365 With the substitution of section 3(2) in 1979 the prohibition of passing of the additional tax, which existed formerly was removed.
Secondly the additional tax, instead of being an enhancement of the tax payable by a dealer by a certain percentage, became a percentage of the annual turn over of a dealer.
Both the statement of objects and reasons and tho Amending Act were silent on the question whether the additional tax payable after the amendment was a multi point levy or a single point levy as also on the classes of dealers liable to pay additional tax.
[375 F H] 2.
The view of the High Court that the two Acts were independent of each other was not correct.
It is necessary to read and to construe the Principal Act and the Act together as if the two wore one, and while doing so to give effect to the provisions of the Act which is a later one in preference to the provisions of the Principal Act wherever the Act has manifested an intention to modify the Principal Act.
[377 B C] The definition of mutatis mutandis given in legal dictionaries is "with the necessary changes in points of detail meaning that matters or things are generally the same, but to be altered when necessary" as to names, offices and the like.
[378 E F] Extension of an earlier Act mutatis mutandis to a later Act brings in the idea of adaptation, but so far only as it is necessary for the purpose, making a change without altering the essential nature of the thing changed, subject to express provisions made in the later Act.
[378 H, 379 A] In the instant case section 3(2) of the Act shows that the State Legislature intended not to depart substantially from the Principal Act except with regard to matters in respect of which express provision had been made in the Act.
Though the Act had the usual features of a state, it could not be considered as an independent statute but must be read together with the Principal Act to be effective.
[379 A C] Earl Jowitt 's The Dictionary of English Law (1959); Black 's Law Dictionary (revised 4th edn.
(1968) Bouvier 's Law Dictionary (3rd Revision) Vol.
II, referred to The additional tax levied under the Act could be passed on to consumer after the amendment.
The object of the amendment made in 1979 as set out in the statement of objects and reasons was to rationalise the scheme of additional sales tax and to introduce flexibility in The implementation of the Act.
If the object of the amendment was to make the additional tax a multi point levy, nothing was easier than using the appropriate words in the Act by excluding the application of section 8 of the Principal Act expressly in section 3(2) of the Act.
In the absence of any such words in the Act, by reason of section 3(2) of the Act section 8 of the Principal Act must be construed as being applicable to the levy of an additional tax also.
The gross turnover referred to in section 3(1) should, therefore, be understood as that part of the gross turnover which is taxable under the Principal Act.
[380 A G] If section 3(1) is read as "every dealer (who is liable to pay tax under the Principal Act) shall in addition to the tax payable by him for a year under the 366 said Act, be liable to pay additional tax at such rate not exceeding one per cent of his gross turnover which is taxable under the Principal Act) for that year as may be notified from time to time by the State Govt. " there would not be any anomaly.
On the other hand it would effectuate the intention of the legislature.
[381 A B] It is true that if the words used in a statute are clear it is not open to the Court to go in search of the intention of the legislature and to arrive at a meaning different from what the words of the statute convey.
When the Act is read as a whole it becomes inevitable that it has to be read together with the Principal Act.
It is a well settled principle of construction that where the later of the two Acts provides that the two are to be read together every part of each Act must be construed as if the two Acts had been one, unless there is some manifest discrepancy making it necessary to hold that the later Act has, to some extent, modified the provisions of the earlier Act.
When section 3(1) of the Act is read in the light of sub section 2 thereof, section 8 of The Principal Act which prescribes a single point levy becomes immediately attracts.
[381 C f] The argument that since section 8 of the Principal Act opens with the words "notwithstanding anything to the contrary in 'this Act" the operation of that section should be confined to the tax payable under the Principal Act and could not be extended to the additional tax payable under the Act has no force.
When the Principal Act was enacted, section 8 could apply only to the liability under the Principal Act, but by reason of section 3(2) of the Act, section 8 has been made applicable to the levy, assessment and collection of additional tax under the Act.
If this argument is accepted many provisions of the Principal Act which are necessary for making the levy under the Act effective would become inapplicable, as for example section 13 relating to the machinery for recovery of tax and penalty.
[381 F H, 382 A] The second proviso to section 3(1) of the Act does not in any way curtail the effect of section 3(2) of the Act which forms an integral part of the charming section.
Consequently any exemption granted under sections 6 and 7 of the Principal Act would also be applicable in the case of levy of additional tax under the Act.
[382 C D]
|
Appeals Nos. 32 and 33 of 1960.
Appeals by special leave from the Award dated February 24, 1959, of the Industrial Tribunal, Bihar, Patna, in Reference nos.
10 of 1959 and 1 of 1955.
M. C. Setalvad, Attorney General for India, Nooni Coomar Chakravarti and B. P. Maheshwari, for the appellant.
B. C. Ghose and P. K. Chatterjee, for the respondents.
December 15.
The Judgment of the Court was delivered by WANCHOO, J.
These are two connected appeals by special leave in an industrial matter and relate to the dismissal of sixty workmen of the appellant company.
The dispute was referred by two references; 310 one relates to 31 workmen and the other to 29 workmen.
They have been disposed of by a common award, though, as the references were two, there are two appeals before us.
The brief facts necessary for present purposes are these: On November 10, 1953, a general meeting was held by the workmen of the appellant and a no confidence motion was passed against the executives of the workmen 's union and Shri Shahabuddin Bari was elected as the new president of the union.
On February 6, 1954, the newly elected president served a strike notice on the management.
On February 18, 1954, a settlement was arrived at between the management and Shri Fateh Narain Singh, the general secretary of the old executive committees.
On February 23, 1954, the strike was launched in accordance with the notice served by Shri Bari and the strike continued for about a month.
The strike was called off on March 19 and 20, 1954.
The case of the appellant was that the strike which began on February 23,1954, was an illegal strike as it took place during the currency of a settlement arrived at in the course of conciliation proceedings with the assistance of the Labour Commissioner who acted as conciliation officer.
Conse quently, the appellant took steps to serve charge sheets on the workmen, who had joined the illegal strike, on March 4, 1954.
This was followed by the dismissal of these sixty workmen after a managerial inquiry.
It is said that thereafter there were conciliation proceedings which failed and consequently the two references were made.
The main findings of the tribunal are that the settlement of February 18, 1954, was a bona fide settlement arrived at during the course of conciliation proceedings and was therefore binding on the workmen; and consequently the strike which began on February 23, 1954, was in breach of the terms of the settlement and was therefore illegal.
The tribunal further held that the strike was staged in hot haste and no reasonable opportunity was given to the management to reply to the demands made before launching the strike.
It also held that the trouble arose because of the election of 311 Shri Bari and the new office bearers.
This matter was referred to the Registrar of Trade Unions and he held that the meeting at which Shri Bari and the new office bearers were elected was irregular and in consequence the old office bearers of the union continued to remain validly elected executives of the union.
This decision was given on February 22, 1954, and the strike was launched on February 23 immediately thereafter.
The tribunal was not sure whether this decision had been communicated to Shri Bari before the strike was launched; but in any case it was of the opinion that there was no reason to stage the strike in such hot haste after the settlement of February 18, 1954.
Having thus held that the strike was illegal and there was no reason why it should have been launched in such hot haste, the tribunal went on to consider the case of these sixty workmen who were dismissed.
It held that no charge of violence was brought home to these workmen and even the charge sheets which were originally issued to the workmen did not contain any charge of violence.
The tribunal then divided the sixty workmen into three batches of 47, 11 and 2.
In the case of 47 workmen, it held that they must be assumed to have been served with charge sheets as they refused to accept them and that proper inquiry was held into the charges, though in their absence.
In the case of 11 workmen, it was of opinion that charge sheets had not been served on them and therefore any inquiry held in their absence was of no avail.
In the case of two workmen, it held that no attempt was made to serve any charge sheet on them.
Further, it set aside the order of dismissal with respect to 13 of the workmen on the ground that they were either not served with any charge sheet or no charge sheet was issued to them; as for the remaining 47, though it found that charge sheets had been issued to them and they had refused to accept them and proper inquiry had been held in their case, it set aside the order of dismissal on the ground that they had not been shown to have taken part in violence and there were extenuating circumstances in their case inasmuch as they were misled to join the strike in order to oust the old office 312 bearers of the union so that others might be elected in their place.
It further pointed out that though a much larger number of workmen had taken part in the illegal strike and the union took up their case, only these sixty were eventually dismissed while the rest were reinstated.
It was of the view that there was no reason for the appellant to make any distinction between these workmen and the others who were reinstated.
It therefore ordered reinstatement of these 47 workmen also.
Finally, it held that the workmen were sufficiently penalised, they being out of employment from March 1954 to February 1959 when it made the award and that there was no reason in the circumstances to maintain their dismissal.
It awarded 50% of the back basic wages to the two workmen in whose case charge sheets were not even issued and 25 per cent of the back basic wages to the 11 workmen who were not served with charge sheets; no back wages were allowed to the forty seven workmen who had refused to accept the charge sheets sent to them.
Three points have been raised on behalf of the appellant before us; namely, (i) as a settlement had been arrived at during the course of conciliation proceedings on September 2, 1954, which specifically dealt with the case of these sixty workmen, the references were incompetent; (ii) the references were incompetent because what was referred was not an industrial dispute but a dispute between the employer and its individual workman; and (iii) the tribunal 's order of reinstatement was in any case unjustified.
It appears that after the dismissal of a large number of workmen consequent on the illegal strike that took place on February 23, 1954, there were conciliation proceedings before the Labour Commissioner, Bihar, with respect to these dismissals and other matters.
These conciliation proceedings appear to have begun some time before May 1, 1954, for we find that on that day the Labour Commissioner wrote to the appellant that its objection that conciliation proceedings were illegal and without jurisdiction was baseless.
It seems 313 that efforts at conciliation continued right up to the end of August 1954, for we find another letter of August 31, 1954, from the Labour Commissioner to the appellant saying that he had heard that mutual negotiations were going on between the appellant and its workmen for the settlement of their dispute and September 2 had been fixed for that purpose.
The Labour Commissioner therefore gave notice to the appellant that he would hold conciliation proceedings on September 3 at 3 p.m. in his office in case the disputes were not mutually settled before that date.
It seems that an agreement was arrived at between the appellant and the union on September 2.
In this agreement it was Doted that 76 dismissed workmen had already been employed; it was further provided that 110 workmen would also be employed in the same manner as the seventy six.
Further 31 dismissed workmen were to remain dismissed and would not be considered for further employment or for any other benefit.
30 other dismissed workmen would for the time being remain dismissed and it would be decided later on between the union and the appellant whether their dismissal should be confirmed like those of 31 mentioned above or whether they should be given the option to wait for employment as and when vacancies arose or should be treated as retired on the date of dismissal in order to enable them to receive the benefits of gratuity and refund of provident fund.
It may be added that the present references are with respect to sixty workmen out of these sixty one.
It seems that the Labour Commissioner was apprised of this settlement.
Consequently he wrote on September 3, 1954, to the appellant that the conciliation proceedings proposed to be held on that date were cancelled.
The Labour Commissioner further pointed out that the union was opposing reinstatement of certain workmen; he therefore proposed to hold further conciliation proceedings in the case of such workmen on September 6, 1954, at 3 p.m. before making his final recommendations to government in this matter.
The appellant protested to the Labour Commissioner 40 314 against the holding of any further conciliation proceedings after the agreement of September 2 and apparently did not attend the meeting fixed for September 6.
Nothing further therefore seems to have taken place in the conciliation proceedings.
Presumably the Labour Commissioner must have reported thereafter to the government under section 12(4) of the , No. XIV of 1947 (hereinafter called the Act).
Then followed the two references by the government; the first on October 8, 1954, relating to 31 workmen and the other on January 15, 1955, relating to 29 workmen.
On these facts the contention on behalf of the appellant is that the references were incompetent because of the agreement made on September 2, 1954.
Reliance in this connection is placed on sections 18 and 19 of the Act, as they were at the relevant time.
18 provided that a settlement arrived at in the course of conciliation proceedings would be binding on all parties to the industrial dispute and others indicated therein and section 19 provided that such settlement would come into force on such date as was agreed upon between the parties and if no date was agreed upon then on the date on which the memorandum of the settlement was signed by the parties.
Such settlement would be binding for such period as was agreed upon by the parties and if no such period was agreed upon, for a period of six months and would continue to be binding upon the parties thereafter until the expiry of two months from the date on which a notice in writing to terminate the settlement was given by one of the parties to the other party or parties to the settlement.
The contention on behalf of the appellant is that the agreement of September 2, 1954, arrived at during the course of conciliation proceedings between the appellant and the union was binding on all workmen and therefore it was not open to the government to make these references within six months of it.
The question thus posed raises the question as to what is meant by the words "in the course of conciliation proceedings " appearing in section 18 of the Act.
One thing is clear that these words refer to the duration 315 when the conciliation proceedings are pending and it may be accepted that the conciliation proceedings with respect to these dismissals, which began sometime before May 1, 1954, were certainly pending upto September 6, 1954, and may be a little later, as is clear from the two letters of the Labour Commissioner.
But do these words mean that any agreement arrived at between the parties during this period would be binding under section 18 of the Act ? Or do they mean that a settlement arrived at in the course of conciliation proceedings postulates that that settlement should have been arrived at between the parties with the concurrence of the conciliation officer? As we read this provision we feel that the legislature when it made a settlement reached during the course of conciliation proceedings binding not only on the parties thereto but also on all present and future workmen intended that such settlement was arrived at with the assistance of the conciliation officer and was considered by him to be reasonable and therefore had his concurrence.
12 of the Act prescribes duties of the conciliation officer and provides that the conciliation officer shall for the purpose of bringing about settlement of the dispute without delay investigate the dispute and all matters affecting the merits and the right settlement thereof and may do all such things as he may think fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute: (vide section 12(2) ).
Then comes section 12(3), which provides, "If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute".
Reading these two provisions along with section 18 of the Act, it seems to us clear beyond doubt that a settlement which is made binding under section 18 on the ground that it is arrived at in the course of conciliation proceedings is a settlement arrived at with the assistance and concurrence of the conciliation officer, for it is the duty of the conciliation officer to promote 316 a right settlement and to do everything he can to induce the parties to come to a fair and amicable settlement of the dispute.
It is only such a settlement which is arrived at while conciliation proceedings are pending that can be binding under section 18.
In the present case it is obvious that the Labour Commissioner took no steps to promote the actual agreement which was arrived at between the appellant and the union on September 2.
The letter of August 31 made it clear that the Labour Commissioner would take action under section 12(2) on September 3 if no mutual agreement was arrived at between the appellant and the union.
It seems that a mutual agreement was arrived at between the appellant and the union without the assistance of the Labour Commissioner and it did not receive his concurrence even later; on the contrary evidence shows that the Labour Commissioner did not approve of the settlement which excluded the reinstatement of a large group of workmen and so he did not act under section 12(3).
In the circumstances such a mutual agreement could not be called a settlement arrived at in the course of conciliation proceedings even though it may be accepted that it was arrived at a time when conciliation proceedings were pending.
A settlement which can be said to be arrived at in the course of conciliation proceedings is not only to be arrived at during the time the conciliation proceedings are pending but also to be arrived at with the assistance of the conciliation officer and his concurrence; such a settlement would be reported to the appropriate government under section 12(3).
In the present case the agreement of September 2, 1954 was not arrived at with the assistance and concurrence of the conciliation officer, namely, the Labour Commissioner, which will be clear from his letter of September 3, 1954.
In the circumstances it is not a settlement which is binding under section 18 of the Act and therefore will not bar a reference by the Government with respect to these sixty workmen.
Re (ii).
The next point that is urged is that it is not an industrial dispute but a dispute between the employer 317 and its individual workmen, even though their number may be large and therefore the Government had no jurisdiction to make the references.
We are of opinion that there is no force in this contention.
We have already set out the history of the conciliation proceedings in this case.
It is obvious from the letter of the Labour Commissioner dated September 3, 1954, that he must have made a report to the Government under section 12(4) and it must be on that report that these references must have been made under section 12(5) read with section 10(1).
It is not in dispute that originally the case of dismissal of a much larger number of workmen was under consideration during the conciliation proceedings but on September 2,1954, a mutual agreement was arrived at between the appellant and the union, which in a sense excluded the case of these sixty workmen.
The Labour Commissioner apparently was not prepared to concur with this action of the parties as appears from his letter of September 3 and must therefore have made a report to the Government under section 12(4) which was followed by references under section 10.
In the circumstances we fail to understand how what began as an industrial dispute and was sponsored by the union, related to the dismissal of a much larger number of workmen (including these sixty) and as such became the subject matter of conciliation proceedings under section 12(1) would turn into an individual dispute because a mutual agreement was arrived at between the appellant and the union with which the Labour Commissioner was not in entire agreement and in consequence of which he apparently made a report to the Government under section 12(4) which was followed by the two references under section 10(1).
In these circumstances we are satisfied that the references are not bad on the ground that an individual dispute had been referred to the tribunal for adjudication.
Re (iii) We now come to the merits of the case.
We shall deal with the sixty workmen in three batches in the same manner as the tribunal did.
We shall first take the case of 47 workmen.
In the case of these workmen, the tribunal held that they were guilty of 318 taking part in an illegal strike and that there was no reason for staging such an illegal strike in hot haste.
It also held that they were sent charge sheets which they refused to take.
The Standing Orders provide that a workman who refuses to accept a charge sheet or to submit an explanation on being charged with an offence will be deemed to have admitted the charge against him.
It also provides that a workman who refuses to accept any communication addressed to him by the company will be liable to disciplinary action for insubordination.
The tribunal also held that in the case of these workmen, a proper inquiry was held, though in the circumstances in their absence.
It further held that such misconduct as merited dismissal under the Standing Orders was committed by these 47 workmen.
On these findings we should have thought that the tribunal would not have interfered with the order of dismissal, for the case would be clearly covered by the principles governing the limits of the tribunal 's power of interference with the findings of the managerial inquiry laid down by this Court in Indian Iron and Steel Co. Ltd. and another vs Their Workmen (1).
Learned counsel for the respondent workmen in this connection relies on Indian General Navigation and Railway Co. Ltd. vs Their Workmen (2).
In that case it was laid down that "to determine the question of punishment, a clear distinction has to be made between those workmen who not only joined in such a strike but also took part in obstructing the loyal workmen from carrying on their work, or took part in violent demonstrations, or acted in defiance of law and order, on the one hand and those workmen who were more or less silent participators in such a strike on the other hand.
" These observations have however to be read in the context of that case, which was (i) that it was not shown in that case that an employee merely taking part in an illegal strike was liable to be punished with dismissal under the Standing Orders and (ii) that there was no (1) ; (2) ; 319 proper managerial inquiry.
In these circumstances the quantum of punishment was also within the jurisdiction of the industrial tribunal.
In the present case, however, the finding of the tribunal is that there was misconduct which merited dismissal under the Standing Orders and that the managerial inquiry was proper.
In these circumstances those observations torn from their context cannot be applied to the facts of this case.
The reasoning of the tribunal therefore that as these 47 workmen had not taken part in violence the appellant was not justified in dismissing them cannot be accepted on the facts of this case.
The other reason given by the tribunal for setting aside the dismissal is that the appellant had taken back a large number of other employees who had taken similar part in the illegal strike and had absented themselves and there was no reason to discriminate between those employees and these 47 workmen.
It is clear from the award of the tribunal that no discri mination was made when taking back the workmen on the ground that these workmen supported Shri Bari, for the award shows that a number of other workmen who supported Shri Bari were taken back.
Reliance in this connection is placed on Messrs. Burn and Co. Ltd. vs Their Workmen (1), where, it was observed when dealing with the workmen involved in that case that it could not be said that mere participation in the illegal strike would justify the suspension or dismissal particularly when no clear distinction could be made between those persons and the very large number of workmen who had been taken back into service although they had participated in the strike.
There is no doubt that if an employer makes an unreasonable discrimination in the matter of taking back employees there may in certain circumstances be reason for the industrial tribunal to interfere; but the circumstances of each case have to be examined before the tribunal can interfere with the order of the employer in a properly held managerial inquiry on the ground of discrimination.
In Burn & Co. 's case (1) there was apparently no reason whatsoever for (1) A.I.R. 1959 S.C. 529.
320 making the discrimination.
In the present case, however, the circumstances are different.
It is not the appellant which has made the discrimination; in the present case so far as the appellant is concerned it was prepared to take back even those who supported Shri Bari and did actually take back a large number of such workmen.
The genesis of the trouble in this case was a dispute within the union itself which led to the illegal strike, the history of which we have already given.
The mutual agreement of September 2, 1954, shows that the union which represented the workmen was not agreeable that sixty one workmen should be taken back and these forty seven workmen are out of these sixty one.
The appellant in this case was therefore placed in the position that it had to choose between the large majority of workmen and sixty one workmen whom the union did not want to be taken back.
It was in these circumstances that the appellant did not take back those sixty one workmen out of whom are these forty seven.
The charge of discrimination therefore cannot be properly laid at the door of the appellant in this case and if there is anybody to blame for it it is the union.
In these circumstances when the managerial inquiry was held to be proper and the misconduct committed is such as to deserve dismissal under the Standing Orders, there was no reason for the tribunal to interfere with the order of dismissal passed by the appellant in the case of these forty seven workmen.
It may be that participation in an illegal strike may not necessarily and in every case be punished with dismissal; but where an inquiry has been properly held and the employer has imposed the punishment of dismissal on the employee who has been guilty of the misconduct of joining the illegal strike, the tribunal should not interfere unless it finds unfair labour practice or victimisation against the employee.
Then we come to the case of two workmen to whom no charge sheets were given at all.
They are Jagdish Lal (respondent 31) and L. Choudhary (respondent 60).
It is not in dispute that no charge sheets were issued to these workmen.
The appellant 321 however contends that under the Standing Orders it was not necessary to issue any charge sheet to them.
The Standing Orders provide that "any workman charged with an offence under these Orders, except in cases of lateness and absenteeism, shall receive a copy of such charge but in all cases will be given an opportunity of offering his explanation before any decision is arrived at.
" It is said that the charge against these two workmen was only for absenting themselves; it was not therefore necessary to frame any charge sheet against them.
This is not quite correct so far as Jagdish La].
in concerned as will appear from the letter of dismissal sent to him; but assuming it to be so, Standing Orders provide that though the charge sheet may not be given no action can be taken against a workman for any misconduct unless he is given an opportunity of offering his explanation before any decision is arrived at.
There is no proof in this case that any opportunity was given to these two workmen of offering their explanation before the decision of dismissal was arrived at in their case.
In these circumstances even though no charge sheet might have been necessary in the case of these two workmen their dismissal was against the provision of the Standing Orders, for no explanation was taken from them before arriving at the decision to dismiss them.
The order of the tribunal with respect to these two workmen must be upheld.
This brings us to the case of eleven workmen who are: Mohd. Mansoor (respondent 6), Ram Kuber Das (respondent 9), Ramasis (respondent 15), Mohd. Zafir (respondent 19), Mohd. Islam (respondent 20), Mohd. Zafir (respondent 22), Rajeshwar Prasad (respondent 26), Chirkut (respondent 27), Lal Das (respondent 43), Inderdip (respondent 47) and Mohd. Nazir (respondent 58).
In their case the tribunal held that though charge sheets were issued to them, they could not be served and the inquiry took place without their knowing anything about the charges or the date of the inquiry.
In those circumstances the tribunal held 41 322 that the inquiry was no inquiry and therefore ordered their reinstatement.
It is contended on behalf of the appellant that the case of these eleven workmen is similar to the case of forty seven who refused to take the charge sheets sent to them by registered post.
In any case it is urged that the charge sheets were notified on the notice board and notices were issued in the newspapers and that should be deemed sufficient service of the charge sheets on them.
In this connection reliance was placed on Mckenzie & Co. Ltd. vs Its Workmen(1).
In that case the Standing Orders provided that notice would be served on a workman by communicating the same orally to the workman concerned and/or by affixing the same on the company 's notice board and the company had acted in conformity with the Standing Orders by affixing the notices on its notice board.
It was found in that case that the company first sent notices by registered post acknowledgement due to the workmen concerned.
When some of the notices came back unserved the company wrote to the secretary of the union asking for the addresses of the workmen but the secretary gave no reply to the letter.
It was then that the company affixed the notices on the notice board both inside and outside the mill gate.
In those circumstances it was held that the company did all that it could under the Standing Orders to serve the workmen and the affixing of the notices on the notice board was sufficient service.
The facts in the present case however are different.
All that the Standing Orders provide is that the workmen charged with an offence shall receive a copy of such charge.
It is also provided that a workman who refuses to accept the charge sheet shall be deemed to have admitted the charge made against him.
There is no provision in the Standing Orders for affixing such charge sheets on the notice board of the company.
The charge sheets in this case were sent to the eleven workmen by registered post and returned unserved, because they were not found in their villages.
On the same day on which the charge sheets were sent by registered post it appears that notices were (1) [1959] SUPPl.
1 S.C.R. 222.
323 issued in certain newspapers to the effect that a group of workmen under a common understanding had engaged in an illegal strike from February 23, 1954, and that all such workmen were liable to strong disciplinary action and that in consequence they had been charged under the Standing Orders and Rules of the company and such charge sheets had been sent to them individually by registered post acknowledgement due and had also been displayed on the notice boards inside and outside the factory gate and they were required to submit the explanations by March 9, 1954.
These notices did not contain the names of the work.
men to whom charge sheets were sent and in whose case charge sheets were displayed on the notice boards.
In the circumstances it can hardly be said that these eleven workmen would have notice that they were among those to whom charge sheets had been sent or about whom charge sheets had been displayed on the notice boards.
The proper course in our view was when the registered notices came back unserved in the case of these eleven workmen to publish notices in their names in some newspaper in the regional language with a wide circulation in Bihar along with the charges framed against them.
It would have been a different matter if the Standing Orders had provided for service of charge sheets through their display on the notice boards of the appellant.
In the absence of such provision, the proper course to take was what we have mentioned above.
If that course had been taken, the appellant would have been justified in saying that it did all that it could to serve the workmen; but as that was not done, we agree with the tribunal that these eleven workmen had no notice of the charges against them and the date by which they had to submit their explanations as well as the date of inquiry.
In these circumstances the order of the tribunal with respect to these eleven workmen must also be upheld.
We therefore allow the appeal so far as the first group of forty seven workmen are concerned and set aside the order of the tribunal reinstating them.
We dismiss the appeals so far as the remaining thirteen 324 are concerned, namely, Jagdish Lal (respondent 31), L. Choudhary (respondent 60), Mohd. Mansoor (respondent 6), Ram Kuber Das (respondent 9), Ramasis (respondent 15), Mohd. Zafir (respondent 19), Mohd. Islam (respondent 20), Mohd. Zafir (respondent 22), Rajeshwar Prasad (respondent 26), Chirkut (respondent 27), Lal Das (respondent 43), Inderdip (respondent 47) and Mohd. Nazir (respondent 58) and confirm the order of the tribunal with respect to them.
In the circumstances the parties will bear their own costs of this Court.
Appeal partly allowed.
| The appellants were partners of two registered firms and another firm which was unregistered.
Their profit and loss for the assessment year 1948 49 were as follows: From registered firms Rs. 11,902 loss, 1,265 loss, total loss Rs. 13,167.
Income from the unregistered firm Rs. 26,110 profit, other income Rs. 262.
The income of the unregistered firm was taxed on the firm.
In assessing the amount of Rs. 262 the Income tax Officer first determined the total income of each of the appellants by setting off their share of the profits of the unregistered firm against their share of the loss of the registered firm.
The appeal to the Appellate Assistant Commissioner being unsuccessful appeals 175 were taken to the Tribunal which relying on the decisions in Commissioner of Income tax vs Ratanshi Bhavanji, [1952]22 I.T.R. 82, held that just as loss in an unregistered firm could not be set off against profits from a registered firm, the profits in an unregistered firm could not be set off against the loss from a registered firm.
On a reference being made to it the High Court differed from the decision of the Tribunal, and held that the profit from the unregistered firm could be set off against the loss from the registered firms to find out the rate applicable to Rs. 262 which was other income of the assessees.
The High Court further held that the assessees could not carry forward the loss of the registered firms to the following year, because such loss must be deemed to have been absorbed in the profits of the unregistered firm.
On appeal with a certificate of the High Court, Held, that the view of the High Court that under sections 14(2) and 16(1)(a) the profit and loss had to be set off against each other to find out the total income, and that although the share of a partner in the profits of an unregistered firm is exempt from tax, it is included in his total income for the purpose of rate only, was correct but the High Court erred in holding that the losses suffered by the registered firms could not be carried forward because they had been absorbed by the profits of the unregistered firm.
|
ivil Appeal Nos.
2309 & 2310 of 1989 etc etc.
From the Judgment and Order dated 23.9.1988 of the Jammu & Kashmir High Court in Writ Petition No. 87/81 and C.M.P. No. 2519 of 1988.
K. Parasaran, D.D. Thakur, M.H. Beg, Raja Ram Agrawal, M.L. Verma, Prashant K. Goswami, Anil B. Divan, Pramod Kohli, P.H. Parekh, Hari Khanna, J.P.Pathak, Sandeep Thakral, S.M.Thakral, B.V. Desai, Ms. Vinita Ghorpade, E.C. Aggarwala, N.N. Bhatt, Dhiraj Singh and Ashok Mathur for the appearing parties.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
Civil Appeal No. 2309 of 1989 arises out of an order made by the High Court of Jammu & kashmir in Writ Petition No.87 of 1981 dismissing the Writ Petition filed by M/s. Pine Chemicals Ltd., which is a public limited company manufacturing Rosin, Turpentine and Rosin Derivatives and carrying on business at Bari Brahmana, Jammu Tawi.
The appellants had prayed in the writ petition for quashing the order of assessment dated 20th January, 1981 made by the Assessing Authority, Incharge Sales Tax Circle, Jammu under the for the year ending 30.6.1980 and the penalty order made on February 2, 1981 under Section 10 of the in respect of the same period.
They had also prayed for a declaration that they are entitled to exemption from payment of tax under the and the Jammu & Kashmir General Sales Tax Act, 1962, on the finished goods produced by them for a period of five years commencing from 8th November, 1979, when the Company went into commercial production.
This main relief had been prayed for on the grounds that the appellant were exempt from payment of sales tax in terms of the Government Orders No. 159 Ind. dated 25.3.1971 as amended by Government Order No. 414 Ind.
dated 25th August, 1971 read with section 8(2A) of the .
Their further case was that the Government represented and announced a package of incentive for large and medium scale industries including grant of exemption from sales tax both on the raw materials purchased by the industries and the scale of their finished products, that acting upon such representation and assurances, appellants set up their factory at Bari Brahmana on the land allotted by the State Industrial Development Corporation and that therefore the Government is estopped from charging sales tax on the doctrine of promissory estoppel.
The High Court was of the view that 190 the two Government orders referred to above were only declarations of an intention to exempt from payment of sales tax and that they are not exemption notifications under sections 5 of the General Sales Tax Act.
The High Court was also of the view that the appellant have failed to prove the necessary factual foundation for invoking the principle of promissory estoppel and that, therefore, they are not entitled to any relief under that doctrine.
In that view the writ Petition was dismissed.
It may be mentioned that Civil Appeal No. 2310 of 1985 is against an order made in a Civil Misc.
Petition No. 2519 of 1988 which was also dismissed on 23.9.1988 along with the writ petition.
This miscellaneous petition was filed after the judgment in the writ petition was reserved for permission to file reply affidavit on the ground that the assessment files produced at the time of hearing contained certain documents needing certain explanation by the appellants.
Both on the ground that it was belated and on the ground that the judgment in the writ petition was delivered only relying on the material placed on record and therefore there was no need for giving an opportunity to the writ petitioners to file a reply statement, the learned judgment dismissed this miscellaneous petition also.
Civil appeals 3140 50 of 1989 have been filed by M/s. K.C. Vanaspati, a firm of partnership manufacturing Vanaspati Ghee at Bari Brahmana, Jammu Tawi.
They filed writ petition 52 of 1982 praying to quash a sales tax assessment order dated 16.1.1982 assessing them to sales tax for the period from 2nd September, 1981 till the end of the month under the Jammu & Kashmir General Sales Tax Act.
They also prayed for a mandamus directing the Government and the Assessing officer not to assess them to sales tax or recover any amount on account of sales tax from them for a period of five years from 2nd September, 1981 when their industry started commercial production.
This relief was prayed again on the ground that Government Order 159 Ind.
dated 26.3.1971 as amended by Government Order 414 Ind.
dated 25.8.1971 exempted the sales of their finished product of Vanaspati Ghee from sales tax and also on the ground that in any case the Government is estopped from collecting tax on the principle of promissory estoppel.
When this writ petition was pending as assessment order was made on 14.11.1984 for the assessment year ending 30th September 1982 including the period 2nd September to 30th September, 1981 which was the subject matter of the earlier assessment order and which was questioned in writ petition No. 52 of 1982.
The validity of this assessment order was the subject matter of writ petition No. 822 of 1984 filed by the appellants.
The relief prayed for and the grounds on which the relief prayed for were almost identical as that in writ petition No. 52 of 1982 except that 191 on the question of promissory estoppel, more detailed facts were mentioned in this writ petition.
The respondents filed their counter affidavits contending that the said Government orders were not exemption orders under Section 5 of the General Sales Tax Act and that there is no factual foundation for the plea of promissory estoppel.
Since we will be dealing with contentions in detail at the appropriate place we are not setting out contentions of the petitioners and the replies of the Government in the writ petitions in details.
During the pendency of the writ petitions certain other Government orders came to be passed and certain assessment orders for the subsequent periods were also sought to be made and questioning these actions M/s. K.C. Vanaspati filed Writ petition No. 711 of 1987 for a writ of prohibition restraining the Assessment Officer and Government from recovering any sales tax at any point of sale in the series of sales in respect of Vanaspati Ghee manufactured by them for a period of 10 years from 2nd September, 1981 when their factory went into commercial production and also for a declaration that SRO 448 dated 22nd October, 1982 issued by the Government of Jammu & Kashmir (which will be referred to later) was illegal and unconstitutional.
They had also prayed for a mandamus directing the respondents to refund the sales tax already recovered from them with interest and damages.
In this writ petition also they contended that Government Order No. 159 Ind. dated 26.3.1971 and Government Order 414 Ind.
dated 25.8.1971 were exemption orders referable to section 5 of the General Sales Tax Act.
They have also referred elaborately to the representations, declarations and promises of the Government in support of the plea of promissory estoppel.
The respondents had filed a counter affidavit refuting these contentions of the appellants.
The High Court dismissed all these three writ petitions by a common order dated 22nd February, 1989.
Civil Appeals 3148 50 of 1989 have been filed against this common order.
Civil Appeal No. 3151 of 1989 has been filed by M/s. Kashmir Vanaspati Ltd. against the judgement of the High Court in Writ Petition No.5 of 1989 in which they had prayed for the writ of certiorari to quash certain notices issued to the appellants, their selling agents and the owner of the premises where they have their sale depots, issued under section 17 of the General Sales Tax Act and for a declaration that the Vanaspati Ghee manufactured by the appellants is exempt from payment of tax at all stages upto January, 1992 i.e. for a period of 10 years from the date from which they have started their commercial production.
In this writ petition also the appellants had relied on Government Order 159 Ind.
dated 26.3.1971 and Government Order No. 414 Ind.
dated 25th August, 1971 as orders exempting their goods from sales tax under Section 5 of the General Sales Tax Act.
They have also relied on certain statement of Government as commitments 192 to continue the incentives and exemptions from sales tax for a period of 10 years on the principle of promissory estoppel.
The respondents had filed their counter affidavit.
This writ petition was also dismissed on 17th March, 1989 almost on the same grounds as in earlier two cases.
The first common question that arises for consideration in all these appeals therefore is whether Government Order No. 159 Ind.
dated 26.3.1971 and the amending Government Order No. 414 Ind.
dated 25.8.1971 are orders of exemption referable to section 5 of the General Sales Tax Act, 1962.
The said Government Orders are extracted below : GOVERNMENT OF JAMMU AND KASHMIR INDUSTRIES AND COMMERCE DEPARTMENT Sub: Grant of incentives to large and Medium Scale industries in the Jammu & Kashmir State Ref: Cabinet Decision No. 101 dated 26.3.1971 Government Order No. 149 Ind.
of 1971 dated 26.3.1971 Sanction is accorded to the grant of the following incentives and facilities to Large and Medium Scale Industries in the State of Jammu & Kashmir : 1.
Land: As provided in Government Order No. 206 Ind. of 1968 dated 5.7.1968.
However, such land. include a reasonable amount of land for the establishment of residential colonies required to house the workers of Large and medium scale Industries and would be granted on the terms and conditions defined in the Government Order No. 206 Ind.
of 1968 dated 5.7.1968.
Grant of exemption from the State Sales Tax both on raw materials and finished products for the period of five years from the date the unit goes into production.
Grant of exemption from levy of additional surcharge on Toll Tax for an initial period of five years from the date the unit goes into commercial production with respect to raw materials and finished goods.
The question of grant of exemption from this levy for further periods would be reviewed thereafter in every 193 individual case and further grant of this concession would only be considered in deserving individual cases.
Grant of exemption from the levy of Urban Immovable Property Tax on the lands and buildings belonging to such industries would be available as admissible under the Urban Immovable Property Taxation Rules.
By order of the Government of Jammu and Kashmir.
Sd/ G.R.Renzu, Secretary to Government" This order was partially modified in G.O. 414 Ind. dated 25.8.1971 which read as follows: " GOVERNMENT OF JAMMU AND KASHMIR INDUSTRIES AND COMMERCE DEPARTMENT Sub: Grant of incentives to the Large and Medium Scale Industries in the Jammu & Kashmir State Ref: Director Industries and Commerce 's letter No. SSI J/455/2251 52 dated 22 7 1971 Government Order No. 414 Ind.
of 1971 dated 25.8.1971 In partial modification of Government Order No. 159 Ind.
of 1971 dated 26.3.1971, item 2 may be read as under: 2.
Grant of exemption from the sales tax both on raw materials and finished products.
The State Sale Tax paid by Large and Medium Scale Industries on the raw materials procured by them for the initial 5 years of the production would be refunded to such industries.
Similarly such industries will be granted exemption from the payment of any state sales tax on their finished products for a period of five years from the date the unit goes into production.
194 By order of the Government of Jammu and Kashmir.
Sd/ Secretary to Government".
It may be noted at this stage itself that the amending Order G.O. 414 Ind.
dated 25th August, 1971 was also published in the Government Gazette.
Section 5 of the General Sales Tax Act, 1962 empowers the State Government to grant exemption from taxation and that section reads as follows: "Exemption from taxation: The Government may subject to such restrictions and conditions as may be prescribed, including conditions as to licence and licence fees, by order exempt in whole or in part from payment of tax any class of dealers or any goods or class or description of goods.
" The Government orders were made implementing the Cabinet decision No. 101 of the same date.
There is no ambiguity about the class of persons or dealers to whom the Government orders apply, no ambiguity about the class or description of goods and the transactions of sale which are exempt from tax.
It has been duly authenticated in terms of Section 45 of the Constitution of Jammu and Kashmir.
It is well settled that if power to do an act or pass an order can be traced to an enabling statutory provision, then even if that provision is not specifically referred to, the act or order shall be deemed to have been done or made under the enabling provision.
Thus the Government orders satisfy all the requirements of the provisions of Section 5 of local Act.
The section also does not talk of any notification: it only talks of a Government order exempting in whole or in part from payment of tax.
This is very insignificant, if contrasted with Section 4(1) and 4(5) of the local Act relating to the fixation of the taxable point refers to a notification by the Government.
The Act itself thus makes a distinction requiring a notification to be made for certain purposes and the making of a Government order in respect of certain other purposes.
Moreover, since there is no form prescribed in this behalf if the particular order in effect is an exemption order, whether it takes the form of an order or notification makes no difference.
But we may note from the various orders produced before us that normally in the case of grant of tax exemptions as an incentive to industry the exemption orders have generally taken the form of Government order rather than a notification.
But in the 195 case of other exemptions though they are also under section 5 of the local Act they have taken the form of notification.
Thus the pattern followed in Jammu & Kashmir seems to be that in respect of exemptions from payment of taxes following Cabinet decision on policy matters and incentive they have taken the form of Government order.
It is necessary to refer this aspect because in later modifications while superseding the earlier order or notifications, the Government have followed the specific pattern and have used the word `orders ' in cases of grant of incentive and the word `notifications ' in the other cases.
It may also be pointed out that the Government orders 159 and 414 were also understood and treated as such exemption orders as seen from the publicity given them by the Government while inviting entrepreneurs to establish industries in Jammu & Kashmir and certain other communications to the parties.
The booklet published by the Government in December, 1975 under the heading "Incentives to Development of Industries in Jammu & Kashmir" contained incentives available for small scale industries as also large and medium scale industries.
The above said two Government Orders were reproduced in this booklet as the orders relating to incentives available to large and medium scale industries.
Another brochure issued in March, 1978 under the heading `The State Marches Towards Industrial Development ' after noting the efforts made by the Government to invite industrial enterprises from outside the State to locate the industries in Jammu & Kashmir and the response by the industrialist, listed the package of incentives under the heading `Incentives Available to help you establish your beautiful industrial ventures in the J & K State '.
Item 5 of this list related to `exemption from certain taxes '.
This was followed by the Finance Minister 's Budget Speech for the year 1978 79 in which the Finance Minister stated: "We have to continue a consistent policy of support and protection to industry and attract as many new units as we can, both in order to increase the employment opportunity and to achieve better economic growth.
It is as such proposed to continue the grant of exemption from payment of sales tax on the goods manufactured by new units for a period of ten years from the date the unit goes into production.
" Subsequent to this speech of the Finance Minister another Brochure was published by the Government on the 7th September, 1978 which referred to the sustained efforts made by the Government to involve successful and experienced entrepreneurs from all over the country in 196 setting up the industries in J & K and incentives available to the industries.
In page 14 of this Brochure "Exemption from Sales Tax and toll tax for 10 years and exemption from CST" is listed as one of the incentives available in the State.
Obviously these announcements, references and statements relating to exemption from sales tax refer to G.O. 159 Ind.
dated 26.3.1971 and G.O. 414 Ind.
dated 25.8.1971.
No other Government order of notification relating to exemption from payment of sales tax by large and medium industries were bought to our notice as relating to these references in the Brochures and speeches.
Thus on a plain reading there could be no doubt that the two Government orders are referable to the power of the Government under Section 5 of the General Sales Tax Act and are exemption orders falling within the scope of that provision.
In this connection, we may also refer to three decisions of this Court cited at the Bar wherein similar orders of Government without specifying the source of power under which they were made and also not in the form of a notification, were considered to be orders granting exemption.
In Pournami Oil Mills & Ors.
vs State of Kerala & Anr., [1986], Supp.
SCC 728, this Court had occasion to consider almost identical Government orders as those we are concerned with in these appeals.
The first was a Government Order dated 11th April, 1979 and the relevant portion of the same reads as follows: "The Government has considered the recommendations and suggestions of the Committee in detail and they are pleased to approve the following package of measures for promoting industrial development in Kerala: SMALL SCALE INDUSTRIES: Sales Tax Concessions: New industrial units under small scale industries set up after April, 1979, will be exempted from the payment of sales tax for a period of five years from the date of production.
The second was a notification dated 21st October, 1980 made under Section 10 of the Kerala General Sales Tax Act which read as follows: "In exercise of the power conferred by Section 10 of the Kerala 197 General Sales Tax (15 of 1963) the Government of Kerala have considered it necessary in the public interest so to do, hereby make an exemption in respect of the tax payable under the said Act on the turnover of the sale of goods produced and sold by the new industrial units under the small industries for a period of five years from the date of commencement of sale of such goods by any such units by way of tax on their sales shall be paid over to Government and that the sales tax, if any, already paid by such units to Government shall not be refunded.
Provided that such units shall produce proceedings of the General Manager, District Industries Centre, declaring the eligibility of the units for claiming exemption from sales tax.
Provided further that the cumulative sales tax concessions granted to a unit at any point of time within this period shall not exceed 90 per cent of the cumulative gross fixed capital investment of the unit.
Explanation For the purpose of this notification new industrial unit under the Small scale Industries shall mean undertakings set up on or after April 1, 1979 and registered with the Department of Industries and Commerce as a small scale industrial unit.
This notification shall be deemed to have come into force with effect from April 1, 1979.
" Section 10 of the Kerala General Sales Tax Act empowered the Government if they consider it necessary in the public interest, by notification in the Gazette, to make an exemption or reduction in rate either prospectively or retrospectively in respect of any tax payable under the Act.
It may be seen that the first Government Order dated 11th April, 1979 did not refer to any statutory power under which that order was made and it was generally in the nature of an order approving package of measures and incentives for promoting industrial development in Kerala and not in the form of a notification, while the second notification was made specifically in exercise of the statutory powers under section 10 of the Kerala Act.
It may also be seen that the first Government Order gave more tax exemption while the second notification did not give any exemption relating to purchase tax and also confined the exemption from sales tax to the limits specified in the proviso to the notification.
Two main questions were 198 considered by this Court.
The first was whether the first Government Order dated 11th April, 1979 was an exemption order referable to the powers of the Government under section 10 of the Kerala Act.
On this issue this Court held that it was an exemption order and that since there was an enabling provision in the statute empowering the Government to give exemption, though the Government Order did not refer to the statutory provision conferring such powers the order should be deemed to have been made under the said enabling provision and that therefore both the orders were made in exercise of the powers under section 10 of the Kerala Act.
The second important point that was decided was that the second notification was prospective in operation and that industries set up on or after Ist April, 1979 and before the 21st October, 1980 would be entitled to the benefit of the whole exemption under the first Government order for the full period of five years from the date they started production and that right could not have been curtailed by the second notification dated 21st October, 1980.
As the Govt. was bound by the rule of estoppel from taking away the right which had accrued to them under the first Government order.
Only new industries set up after the 21st October, 1980 would have the restricted benefit as provided in the second notification.
In Bakul Oil Industries & Anr.
vs State of Gujarat & Anr.
, ; , the effect of two exemption notifications made in exercise of the Government 's power under section 49(2) of the Gujarat Sales Tax Act, 1960 was considered.
Under the first notification dated 29.4.1970 certain exemption from payment of sales tax or purchase tax was given in respect of certain specified classes of sales and purchases described in the Schedule to that notification without any specification of period.
The second notification dated 11.11.1970 amended the first notification by adding a new entry in the Schedule exempting a manufacturer who established a new industry from the whole of purchase tax and sale tax for a period of five years from the date of commissioning of the industry .
This second notification stated that for the benefit of claiming the exemption the industry shall have been commissioned at any time during the period from Ist April, 1970 to 31st March, 1975.
The assessee in that case had commissioned his plant on the 17th May, 1970 and when the Industries Commissioners refused to give him the eligibility certificate for claiming exemption he filed a writ petition under Article 226 before the Gujarat High Court.
During the pendency of the writ petition the State Government issued another notification dated 17th July, 1971 amending the definition of `new industry ' and excluding among others decorticating, expelling, crushing, roasting, parching, frying of oil, seeds and colouring, decolouring and scenting of oil, from the purview of the exemption notification.
This Court 199 held that under the first notification dated 9.4.1990 the exemption granted was general and did not stipulate as to how long the exemption would remain in operation and that would mean that the exemption granted under the notification was to have operative force till such time that exemption was allowed to remain before being withdrawn by a subsequent notification.
Though the second notification dated 11.11.1970 gave exemption for a period of five years from the date of commissioning of the industry this Court was of the view that, that exemption cannot be invoked by the assessee in that case for claiming the benefit of tax exemption for five years because the second notification was prospective in operation and would apply only to those new industries which were commissioned subsequent to the issue of that notification and since the assessee in that case commissioned the Mill on 17.5.1970 before the second notification he was not eligible for the benefit of second notification.
However, the learned counsel for the respondents relied on the observation in the first paragraph at page 192 of the Bakul Oil Industries case (supra) wherein the learned Judges have held that the State Government was under no obligation in any manner known to law to grant exemption and that it was fully within its powers to revoke the exemption by means of a subsequent notification.
These observations will have to be understood in the light of the earlier statement that the second notification dated 11.11.1970 was prospective; that is to say if the industry had been commissioned subsequent to 11.11.1970 the assessee would have been entitled to the exemption for the full period of five years.
These observations are apposite only to the notification dated 9.4.1970 which was the one which the assessee was entitled to.
In correctly understanding the ratio of this judgment we have to keep in mind that the date of commissioning of the industry was the relevant factor to the entitlement of the relief.
Therefore this is an authority only for the proposition that if the exemption notification did not stipulate as to how long the exemption would remain in operation it would be open to the Government to withdraw the same at any time by a subsequent notification.
But the learned Judges did not stop with that but make a further observation that if the exemption notification gave exemption from payment of tax for a particular period and an industry was commissioned after the date of the exemption order but before the exemption was withdrawn, the said industry would be entitled to the benefit of exemption for the period specified in the exemption order though the exemption was withdrawn before the expiry of that period if the industry could rely on any estoppel.
This is also clear as the learned Judges themselves have observed that the industry commissioned subsequent to the notification could also plead estoppel and observed: "We must, however, observe that the power of revocation or 200 withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of Promissory Estoppel.
In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of Primissory Estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule.
If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that Primissory Estoppel cannot be claimed against a statute.
" The Government Order which was considered by this Court in Assistant Commissioner of Commercial Taxes (Asstt.).
Dharwar & Ors.
vs Dharmendra Trading Company and Ors., ; read as follows: "Consequently, the Governor of Mysore is pleased to sanction the following incentives and concessions to the entrepreneurs for starting new industries in Mysore State: (1) Sales Tax A cash refund will be allowed on all sales tax paid by a new industry on raw material purchased by it for the first (five) years from the date the industry goes into production, eligibility to the concessions being determined on the basis of a certificate to be issued by the Department of Industries and Commerce. " Though this again was in the form of a Government order giving incentives and concessions, this Court held that since there is a power to grant an exemption or concessions under the Statue the mere fact that it did not specify the power under which it was issued will make no difference and that the assessee would be entitled to the benefit of this order.
The High Court was of the view that the Government orders are, as such, not exemption orders but only a policy decision.
The learned Judges observed that Section 5 of the General Sales Tax Act "does not speak of general order of exemption as the power to grant exemption is related to 201 a class of dealers or goods and that too subject to restrictions and conditions as may be prescribed.
So there could no general order of exemption and hence the need for specific order in favour of the petitioner is quite obvious.
" On this interpretation the High Court held that the appellant has to first establish that he had set up an industry in the State which conforms to the intent of 1971 order and thereafter ask for an exemption and that on being satisfied the Government will have to make an order of exemption under section 5 of the General Sales Tax Act.
We are unable to agree with this reasoning of the learned Judges on the interpretation of section 5 of the General Sales Tax Act.
We are of the view that the High Court was in error in thinking that the exemption order should be specific in favour of the appellant.
The exemption as can be seen from the provisions of section 5 of the General Sales Tax Act could be in respect of any class of dealers of any goods or class or description of goods.
There could be an exemption in an individual also but the power of exemption is not restricted to such cases alone.
It may refer to transactions of sale of a particular type of goods or class or description of goods or in respect of any class of dealers or a combination of both.
Of course even as an order of exemption the appellant will have to show that he had set up the industry in conformity with the intent of 1971 order and entitled in terms thereof to the exemption in respect of the goods manufactured by him.
But that is not to say that after he establishes those facts the Government will have to make a separate order of exemption in relation to him.
When the appellants sought to rely on the decision of this Court in Pournami Oil Mills case (supra) the learned Judges of the High Court sought to distinguish the same on the ground that the Government order in Pournami Oil Mills case (supra) used the words `will be exempted ' whereas in the Government orders now under consideration the words used are `will be granted exemption. ' According to the learned Judges there is a vast difference between the two expressions.
Whereas the expression `will be exempted ' is in the nature of an order the expression `will be granted exemption ' clearly implies a declaration of intention which could result in an order of exemption being issued by taking further follow up action.
We have carefully considered this reasoning of the learned Judges.
The Government orders follow an earlier Cabinet decision to give incentives to large medium scale industries.
The intention was clear that they wanted to attract entrepreneurs from all over the country to come and establish industries in the State of Jammu and Kashmir.
It is not with reference to any particular industrialist or industry that the order was intended to be operative.
The subject in both the Government orders show that it is grant of incentives.
In the light of the context in which expressions came to be used we are 202 of the view that `will be granted exemption ' has the same meaning as `will be exempted ' and does not in any way show that it requires a further follow up action.
Even in Pournami Oils Mills case (supra) under the Government order dated 11th April, 1979 the industries which are to be benefited are those which are to be set up on or after 1st of April, 1979.
The exemption is thus with are to be set up on or after 1st of April, 1979.
The exemption is thus with reference to an industry which is to be established subsequent to the Government order.
Therefore in that sense both expression mean the same.
It was then pointed out by the learned Judges of the High Court that this Government Order No. 159 dated 26.3.1971 dealt with to grant four different types of facilities and incentives and three out of them are covered by different legislative enactments and, therefore, it was futile to contend that without any follow up action the said order can be treated as notification of exemption under the different statutes.
We are unable to agree with this reasoning of the learned Judges also.
As we have already pointed out there is no prescribed form for granting exemption under section 5 of the General Sales Tax Act.
There is also no prohibition against reference to any other matter or matter in exemption orders under section 5 of the General Sales Tax Act.
If the incentives related also to other benefits or rights merely because they are included in the same Government Order does not make it any the less an exemption order so far as the exemption related to payment of Sales Tax.
In fact it appears to be that factually the submission of the learned counsel for the State that follow up action was taken in pursuance of the Government order in respect of exemption from the levy of Urban immovable property tax and the exemption from levy of an additional surcharge on toll tax is not correct.
Mr. Verma, learned senior counsel appearing for the State of Jammu & Kashmir in two of the appeals referred to what he called as a follow up action in relation to the exemption from payment of tax under the Urban Immovable Property Act, a notification issued on the 3rd of June 1971 in SRO 214 of that date, in exercise of the powers conferred by section 23 of the Jammu and Kashmir Urban Immovable Property Tax Act, 1962 amending the Immovable Property Tax Rules, 1962 by inserting Rule 20A.
The relevant portion of this Rule 20A stated that under the provisions of clause (f) of sub section (1) of section 4 of the Act "all buildings and lands owned by proprietors of a factory and used by him for the purposes thereof shall be exempted from the levy of tax etc. ".
It is true that this notification was subsequent to GO 159 Ind.
dated 26.3.1971.
But it is seen from the notification itself that the same was previously published on 25.3.1971 in the Government Gazette under section 23(1) for information of all persons likely to be affected thereby informing that notice is given thereby that it 203 will be taken up for consideration on 7.4.1971 and any objection or suggestion which may be received in the Finance Department from any person with respect to the said draft before the said date will be considered by the Government.
It is by reason of the fact that this draft rule has been published calling for objection the GO 159 Ind. itself stated that the grant of immovable property tax exemption would be available "as admissible under the Urban Immovable Property Taxation Rules." Thus on the day when the Government order was made there was already the draft amendment rules, and therefore, it could not be stated that the amendment was a follow up action in pursuance of the Government order.
Rather the Government order refers to the draft and says as per the amendment they will be entitled to the exemption.
So far as the toll tax is concerned the notification dated 18.7.1977 relied on by the learned counsel for the respondents only extended the benefit of exemption to large and medium scale industries in respect of additional toll leviable `till the construction phase is completed ' that is in respect of tax on construction materials and it did not relate to the grant of exemption of additional surcharge on toll tax.
But it is significant to note that this notification itself stated that `the raw materials brought into the stage for the purpose of manufacturing and finished products marketed outside the State by the said industries shall remain exempt from payment of additional toll for a period of ten years in respect of all the units from the date of commencement of production by them." (emphasis supplied).
This definitely shows that there is already an exemption from payment of additional toll in respect of raw materials brought and finished product marketed and the Government order related only to an extension of exemption benefit in respect of the construction phase as well.
These notifications under the Immovable Property Tax Act and Toll tax act rather reinforce thus contention of the learned counsel for the appellant that the Government orders themselves are exemption orders under section 5 of the General Sales Tax Act and no follow up action was intended under those orders and the said orders operate as exemption orders.
Thus there could be no doubt the Government Order 159 Ind.
dated 26.3.1971 and the amending Government Order 414 dated 25.8.1971 are orders of exemption from payment of sales tax issued under section 5 of the General Sales Tax Act.
Though the learned counsel for M/s Kashmir Vanaspati Limited and the learned counsel appearing tr M/s K.C. Vanaspati strenuously argued that the exemption from payment of tax was extended from 5 years to 10 years and the Government was bound to give the exemption for 10 years on the ground of promissory estoppel.
We think there is absolutely no factual foundation for such a plea.
The only reference to 10 years was in 204 the Finance Minister 's speech and in the Brochure dated September, 1978.
The Brochure only lists the concessions and incentives available generally.
It does not refer to any Government decision or Cabinet decision or any order of the Government.
No decision of the Government, let alone a Cabinet decision, or any Government order extending the period of exemption was produced before us.
It is not clear on what basis the Brochure mentioned 10 years.
Further the reference in the Brochure is not for sales tax alone, but also refers to toll tax and central sales tax.
It is noticed that so far as toll tax is concerned there are Government orders exempting the industries covered by the notifications for a period of 10 years.
The Finance Minister 's statement made in March, 1978 only refers to a proposal to continue the grant of exemption from payment of sales tax for a period of 10 years.
This statement also is not unambiguous.
It may mean that the benefits under the Government Orders 159 and 414 may be continued for another 10 years without withdrawing the same.
This is merely a budget proposal which could give rise to no right to the appellants.
As no decision order or notification is produced extending the period of exemption in relation to sales tax it is not possible to consider the claim of the appellants for exemption for 10 years on the ground of promissory estoppel.
In exercise of the powers under section 4(7) of the General Sales Tax Act the Government notified that "In supersession of all the previous notifications on the subject, the Government hereby specify, in column 3 of the Schedule appended thereto, the point of tax on the turnover in the series of sales of goods specified in column 2 of the said schedule.
"This was notified and published as SRO 195 dated 31.3.1978.
The schedule in column 2 gave the description of the goods and the column 3 point of tax.
This schedule was amended by SRO 448 dated 22nd October, 1982 the relevant portion of which read as follows: "SRO 448 .
In exercise of the powers conferred by sub section (7) of section 4 of the Jammu & Kashmir General Sales Tax Act, 1962 (XX of 1962), the Government hereby direct that in notification SRO 195 dated 31.3.1978, the following amendments shall be made namely : (1) Sub item (C) in column 2 under the heading "Goods manufactured in the State" appearing against serial No. 2 shall be numbered as sub item (d) and before sub item (d) as so numbered the following shall be inserted as sub item (c) (c) Vanaspati and edible Oils.
205 (i) When sale is made by 2nd sale in the State manufacturer to another i.e. Sale is made by dealer in the State for such dealer who purchases re sale.
goods from the manufact urer.
(ii) When sale is made by Ist sale in the State i.e. manufacturer to when sale is made by the consumer direct.
manufacturer.
By order of the Government of Jammu & Kashmir.
" Before the High Court the vires of SRO 448 was questioned on various grounds.
However, the High Court rejected all those contentions and held that it is valid and that it has superseded the exemption, if any, granted under G.O. 159 and 414.
Mr. Thakur, the learned counsel for M/s Kashmir Vanaspati and Mr. Beg, learned senior counsel for M/s. K.C. Vanaspati, apart from contending that SRO 448 was ultra vires also contended on merits that this had no effect of superseding exemption granted under the said orders.
Since we are agreeing with the learned counsel that this SRO did not and could not supersede the exemption granted under the said Government orders we are not going into the question of vires of the same.
As may be seen from SRO 195 dated 31.3.1978 the notification was made by the Government in exercise of the power under section 4(7) of the State Act which related to the power to fix a point of sale for purposes of taxation in the series of sales of goods.
In fact the notification specifically stated that it is made in supersession of all previous notifications on the subject and specified the point of tax on the turnover in the series of sales of goods specified in column 2 of the Schedule (emphasis supplied).
The said notification therefore could not have and did not supersede the exemption notification SRO 448 dated 22nd October, 1982 that vanaspati and edible oils are taxable at the point specified therein it only means that those vanaspati and edible oils which are not exempted are taxable at the points specified in the Schedule.
It may be noted that the Government order gave exemption only for five years from the date of commencement of the industry and those industries who had been manufacturing for more than that period and also those industries who were not entitled to the benefit of the said Government order would be liable to pay sales tax on the vanaspati manufactured by them and the said goods were 206 liable to tax at the point specified in the Schedule.
In the Scheme of levy of single point taxation, there could be no doubt, the Government could fix and point in the series of sales for the Government have fixed the sale by the dealer, that if the second sale, as the taxable point no exception can be taken.
In that sense no question of vires on the ground of lack of power would arise.
Under Section 4(1) of Jammu & Kashmir General Sales Tax Act the goods are taxable only once, that is it could be taxed only at one point of sale.
We have already held that the Government Orders 159 and 414 are exemption orders and exempt the sale by appellants of their manufactured products.
The exemption would not arise unless the goods are taxable at the point of their sale.
Thus the effect of exempting their sale is that the said goods manufactured by them could not be taxed at the second or subsequent sales also as that would offend section 4(1) which provides for single point levy.
In case where there are no exemption orders and the state fixed the second or subsequent sale as point of taxation the first or prior or subsequent sales are not exempted sales but are not taxable sales.
Therefore, SRO 448 fixing the sale of vanaspati ghee by a dealer would not be applicable to vanaspati ghee manufactured by the appellant which are exempt under the said Government orders.
No question of vires of SRO 448 thus arises in these cases.
Thus we are not called upon to decide the vires of SRO 448 on the ground of discrimination as in our view the goods manufactured by the appellants are exempt under Government Orders 159 and 414 and that exemption covers entire series of sales of that very goods.
As already noticed in the case of Pine Chemicals the assessment orders related to their liability for tax under the in respect of their interstate sales.
The High Court has not considered their claim for exemption under section 8 (2 A) of the .
They seem to have proceeded on the assumption that if Government orders 159 and 414 above referred to are exemption orders or if the dealers were entitled to exemption under the State Act on the principle of promissory estoppel they would automatically be entitled to the benefit of section 8 (2 A) of the .
However, probably since the High Court was of the view that the said Government orders are not exemption orders and that the appellant had not laid the factual foundation for claiming the benefit of promissory estoppel, the question of consideration of the applicability of section 8 (2 A) of the did not arise and was not considered.
In fact the appellants in the special leave petition after claiming that the Government orders above referred to are exemption orders 207 and that in any case on facts they have established their case of promissory estoppel and the Government is bound to give exemption, stated as a ground that in the High Court the Advocate General made a concession to the effect that "he was not disputing that if the appellants were entitled to exemption in respect of finished goods under section 5 of the Jammu & Kashmir Sales Tax Act they would automatically be exempted under section 8 (2 A) of the in respect of interstate transaction.
" On the basis of this concession it appears that the appellants have also filed a review petition against certain observations made in the judgment of the High Court.
However, in the reply filed by the State in the special leave petition in this Court of the Government have denied that any concession was made by the Advocate General of the State in the High Court and that in any case the concession referred to related to a question of Law and that the State is entitled to press that point in this Court.
In these circumstances we have permitted the State to raise the question that even if the said Government orders were exemption orders under section 5 of the General Sales Tax Act the appellants are not eligible for exemption in respect of their interstate sales under section 8 (2 A) of the .
Under section 6(1) of the every dealer who sells goods in the course of interstate trade or commerce shall be liable to pay tax under that Act.
A sale of goods shall be deemed to take place in the course of interstate trade or commerce if the sale occasions the movement of goods from one state to another or if effected by a transfer of documents of title to the goods during their movement from one State to another.
The rate of tax on sales in the course of inter state trade of commerce is fixed under section 8 of the .
The tax payable by any dealer under the Act shall be collected in the State from which the movement of the goods commenced by the assessment officers of that State on behalf of the Government of India in accordance with the provisions of section 9(2) of the .
The learned Advocate General of Jammu & Kashmir contended that even if the sale of a particular commodity is exempted from payment of tax under the local Act the dealer selling the same in interstate trade or commerce would be liable to pay central sales tax under the provisions of section 6(1A) of the .
His further submission was that if section 6(1A) of the is applicable to a particular transaction of sale section 8 (2A) of the would not be applicable to that transaction.
Section 6(1A) of the Act reads as follows: 208 "(1 A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of inter state trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State.
" In other words the liability of a dealer to pay Central Sales Tax on his interstate transactions of sale will not be affected merely on the ground that if the same dealer had sold the goods locally he would not have been liable to pay tax under the local Sales Tax Act.
This is part of the general provisions of Section 6 of the making a dealer liable to tax on inter state sales.
The rate of tax payable on inter state sale is fixed at 4% in the case of sales to a registered dealer of goods of the description coming under section 8 (2) of the or where the sale is to a Government and at 10% under Section 8 (2) (b) of the in the case of goods other than declared goods.
In respect of declared goods under section 8(2) (a) of the shall be payable at twice the rate applicable to sale or purchase of such goods inside the appropriate State.
In view of the provisions of Section 15 the State law can impose tax on sale of declared goods only at a rate not exceeding four per cent of the sale price and such tax also shall not be levied at more than one stage.
If the tax has been levied under the State Law on declared goods and such goods are sold in the course of inter state trade and tax has been paid under the Central Sales Tax the tax levied under the State law shall be reimbursed to the person making such sale in the course of inter state trade.
Section 8 (2A) of the is in the nature of an exception to these general provisions.
That sub section reads as follows: "8(2 A) Notwithstanding anything contained in sub section (1 A) of section 6 or in sub section (1) of this section, tax payable under this Act by a dealer on this turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale of, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally or subject to tax generally at a rate which is lower than four per cent (whether called a tax or fee or by any other name), shall be nil or, as the case may be, shall be calculated at the lower rate.
Explanation For the purpose of this sub section a sale or 209 Purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods".
It may be seen from these provisions that Section 8 (2 A) of the does not have any overriding affect on the scheme of taxation relating to inter state sale of declared goods.
There is also scope for the applicability of Section 6 (1 A) of the when the inter state sale takes place when the goods are in transit and is effected by transfer of documents of title to the goods during their movement from one State to another.
There may be other instances also which may not affect the levy under section 6(1A) of the as in case where Section 8(2 A) of the was not applicable though the transaction was not taxable under the State law.
Suffice it to say that only certain cases which would have been covered by Section 6(1 A) of the have been carved out for the purpose of exemption subject to the applicability of section 8 (2 A) of the .
Section 6 (1 A) of the has not become otiose by reason of inclusion of that section in the non obstante clause in section 8(2 A).
Both provisions, therefore, operate and they should not be read so as to nullify the effect of one another.
On a plain reading of section 8(2 A) of the it deals with the liability of a dealer to pay tax under the Act on his inter state sales turnover relating to any goods on the turnover relating to such goods if the sale had taken place inside the State is exempt from payment of sales tax under the sales tax law of the appropriate State.
It provides that if an intra state sale or purchase of a commodity by the dealer is exempted from tax generally or subject to tax generally at a rate which is lower than 4 per cent then his liability to tax under the when such commodity is sold on inter state trade would be either nil or as the case may be shall be calculated at the lower rate.
Explanation states as to when the sale or purchase shall not be deemed to be exempt from tax generally under the sales tax law.
That is to say an intra state sale or purchase of a commodity shall not be deemed as exempt from State tax generally if the exemption is given only (1) in specified circumstances or under specified conditions or (2) the tax is leviable on the sale or purchase of such goods at specified stages or (3) otherwise than with reference to the turnover of 210 the goods.
These conditions or limitations are therefore with reference to the transaction of sale or purchase.
The main clause deals with the turnover of `a dealer ' which the term would include `any dealer ' or `any class of dealers '.
The existence or otherwise of the three limitations under the explanation above referred to on claiming exemption under section 8(2 A) of the will therefore, have to be tested with reference to the transaction of sale or purchase as the case may be of the dealer who claims the transaction of sale or purchase as the case may be of the dealer who claims the exemption in respect of his intra state sale of purchase of the same goods.
Thus the specified circumstances and the specified conditions referred to in the explanation should be with reference to the local turnover of the same dealer who claims exemption under section 8(2 A) of the .
The learned Advocate General for the state contended that the conditions that the industry should have been set up and commissioned subsequent to the Government orders 159 and 414 above referred to and the commodity sold by him in order to claim the exemption under the said Government order, shall be those manufactured by that industry are conditions or specified circumstances within the meaning of the explanation and, therefore, the dealer (Pine Chemicals) is not entitled to any exemption under section 8 (2 A) of the .
We are unable to agree with this submission of the learned counsel for the state.
The facts which the dealer has to prove to get the benefit of the Government orders are intended only to identify the dealer and the goods in respect of which the exemption is sought and they are not conditions or specifications of circumstances relating to the turnover sought to be exempted from payment of tax within the meaning of those provisions.
The specified circumstances and the specified conditions referred to in the explanation should relate to the transaction of sale of the commodity and not identification of the dealer or the commodity in respect of which the exemption is claimed.
These conditions relating to identity of the goods and the dealer are always there in every exemption and that cannot be put as a condition of sale.
We have already held that not only sale by the manufacturer to dealer that is exempt under the Government orders but since the General Sales Tax Act had adopted only a single point levy, even the subsequent sales would be covered by the exemption order.
Therefore, the question whether the tax is leviable on the sale or purchase at "specified stages" does not arise for consideration.
This is not also a case where the exemption is with reference to some thing other than the turnover of the goods.
In this connection we may refer to two decisions of this Court reported as Indian Aluminium Cables Ltd. & Anr.
vs State of Haryana (38 211 STC 108) and Industrial Cables India Ltd. vs Assessing Authority.
[1986] sup.
SCC 695.
The question for consideration in this case was whether the transaction of sale which would be covered by section 5 (2)(a) (iv) of the Punjab Sales Tax Act could be said to be exempt from tax generally within the meaning of section 8(2)(a) of the .
Section 5 (2A) in effect provided that in determining the taxable turnover of a dealer his turnover on "(iv) sales to any undertaking supplying electrical energy to the public under a licence or sanction granted or deemed to have been granted under the Indian Electricity Act, 1910(IX of 1910), of goods for use by it in the generation or distribution of such energy" is to be deducted.
That is to say that the transaction covered by this clause are exempt from Punjab Sales Tax Act.
As may be seen from the provision the two conditions relate to the purchaser company being a licensed undertaking supplying electrical energy to the public and the goods sold are for use by the said undertaking in generation or distribution of such energy.
This court rejected the contention of the dealer that they are descriptive of the goods and not conditions and held that they are conditions under which exemption is granted and that therefore section 8(2A) of the was not attracted.
As may be seen, the two conditions are attached to the sale of the dealer who is liable to pay sales tax.
The description of the person who is to be the purchaser is not intended to identify the seller but relate to a condition of the sale being to a person of that description.
The condition that the goods sold are for use by the licensed undertaking in the generation or distribution of electrical energy is again a condition attached to the sale and not identification of the goods .
The goods are already identified.
If the same goods had been sold to a person who is not a licensed undertaking and/or not for purposes of use in the generation or distribution of electrical energy the transaction would be liable to levy of tax under local Sales Tax Law.
If the conditions specified are satisfied then that transaction which would have otherwise formed part of the taxable turnover is allowed to be deducted from the total taxable turnover.
Clearly, therefore, they are specified circumstances or specified conditions within the meaning of the explanation to section 8(2A) of the and therefore cannot be treated as exempted from tax generally.
There is also another judgment of this Court, namely, International Cotton Corporation (P) Ltd. vs Commercial Tax Officer & Ors., (35 STC 1) wherein they have generally considered the scope of section 8 (2A) of the .
After a consideration of the arguments the learned Judges observed: 212 "Reading section 6(1 A) and section 8(2A) together along with the explanation the conclusion deducible would be this: Where the intra state sales of certain goods are liable to tax, even though only at one point, whether of purchase or of sale, a subsequent inter state sale of the same commodity is liable to tax, but where that commodity is not liable to tax at all if it were an intra state sale the inter state sale of a particular commodity is taxable at a lower rate than 3 per cent then the tax on the inter state sale of tax commodity will be at that lower rate.
A sale or purchase of any goods shall not be exempt from tax in respect of inter state sales of those commodities if as an inter state sale the purchase or sale of those commodities is exempt only in specific circumstances or under specified conditions or is leviable on the sale or purchase at specified stages.
On this interpretation section 6(A) as well as section 8 (2A) can stand together." In view of the pronouncement of this Court in above decisions and on our interpretation we do not consider it necessary to refer to the decisions of the High Courts cited at the bar.
In the result we hold that the dealer "Pine Chemicals" is entitled to claim the benefit of exemption under G.O. 159 dated 26.3.1971 and G.O. 414 Ind. dated 25.8.1971 in respect of his turnover on inter state sales and the benefit of exemption is available for a period of five years from the commencement of commercial production.
Mr. Verma learned counsel appearing for the State Government then contended that the said Government orders were superseded by SRO 80 dated 12.3.1982 (hereinafter referred to as SRO 80/82) and Vanaspati Ghee has been made liable to tax at the rate of eight per cent.
The goods manufactured by M/s. Pine Chemicals are also made taxable as falling under the residuary item at the rate of 8 per cent.
S.R.O. 80 dated 12th March, 1982 reads as follows: "In exercise of the powers conferred by sub section (1) of section 4 of the Jammu & Kashmir General Sales Tax Act, 1962 (XX of 1962) and in supersession of all the previous notifications issued on the subject, the Government hereby direct that the tax on the taxable turnover shall be payable at the rates specified in schedule A 1 to A XI annexed hereto : Further the Government, in exercise of the powers conferred by section 5 of the said Act and in supersession of all the previous notifications issued on the subject, hereby direct that the goods, 213 persons and classes of persons as specified in Schedule "B" annexed hereto shall be exempt from payment of tax leviable under said Act.
Explanation: Nothing contained in schedule `B ' shall be deemed to exempt any goods specified in Schedule A I to A XI (both inclusive).
This notification shall come into force with effect from 1 4 1982.
By order of the Government of Jammu & Kashmir.
" It then sets out the description of the goods and the rates at which they are taxable in Schedule A, Annexures I to XI.
Items 1 to 3 schedule "A" Annexures IV, reads: SCHEDULE A IV Goods chargeable to tax at 8% 1.
Hydrogenated vegetable oil (Vanaspati) and palm oil of all sorts.
Lubricants.
All goods other than items (1) & (2) above and those specified in other Schedules.
x x x" In Schedule B goods except under section 5 of the General Sales Tax Act are set out.
Vanaspati Ghee is not one of the items of goods exempted under Schedule B.
The learned counsel for the appellants contended that the second paragraph in the SRO only superseded the `notification ' under Section 5 of the General Sales Tax Act made earlier and did not supersede and did not have the effect of superseding the Government orders made, in pursuance of policy decisions taken by the Cabinet, exempting from payment of tax as an incentive to the industries.
In any case the exemption for five years granted under the said Government orders could not be withdrawn so far as the appellants are concerned both on the ground that SRO 80/82 was prospective in operation and also on the ground of promissory estoppel.
214 There could be no doubt that SRO 80/82 was prospective in operation.
We have noticed in the earlier part of this judgment that the Government seems to have been following as a pattern that is in the case of incentives to industries the exemption orders had taken the form of a Government order.
Government order 159 and 414 were also in pursuance of a Cabinet decision.
SRO 80/82 though a Government notification under the Business Rules it is issued by the Ministry concerned.
In the circumstances we have also a serious doubt whether the said incentives could have been superseded by the said SRO 80/82.
In this connection we may also refer to Government order No. 54 Ind. of 1983 dated 26.2.1983 again an order made in pursuance of Cabinet decision which reads as follows: "CIVIL SECRETARIAT INDUSTRIES & COMMERCE DEPARTMENT GOVERNMENT OF JAMMU AND KASHMIR Incentives for development of Large/Medium/Small Scale and Tiny Sector Industries in Jammu & Kashmir.
Cabinet Decision No. 57 dated 5.2.1983 GOVERNMENT ORDER NO.
54 IND OF 1983 Dated 26 2 1983 In supersession of all previous orders it is ordered that the package of incentives as per Annexure to this order will now be applicable to the existing and new Large Medium/Small Scale and Tiny Industrial Units.
Such of the Industrial Units which have partly availed of the package of incentives, sanctioned under Government Order No. 391 Ind.
of 1972 dated 21.6.1972 and subsequent orders issued in amplification thereof, as well as such units which have become entitled to the availment of the earlier package of incentives, shall have the option to get benefit under the new package of incentives, sanctioned hereunder, for the remaining period of their entitlement.
215 3.
X X X 4.
X X X 5.
X X X 6.
X X X By order of the Government of Jammu & Kashmir.
J.A. Khan Secretary to Government Industries and Commerce Department.
" The annexures to this order contain the incentives, benefits privileges and priorities given to large, medium and small scale industries and tiny industries.
So far as sales tax payable by large and medium scale industries which is relevant for our purpose paragraph XII/XIII states as follows: "XII/XIII.
GST/CST/Additional Toll Tax on SSI Units and Medium/Large Units: (i) No GST shall be charged on any raw material purchased by any industrial units except on items brought on a negative list.
(ii) X X X (iii) X X X (iv) An equivalent amount of loan would be granted interest free to Medium and Large Units for a period of 10 years against GST/CST paid in the State, each installment of loan shall be recoverable in 7 years after a moratorium of 3 years, the total amount of tax loan at any point of time not to exceed 33% of capital investment or Rs. 25 Lakhs whichever is less.
Penal rate of interest may be prescribed for delay in repayment of loan.
(v) X X X (vi) X X X" 216 It may be seen that paragraph I of this order refers to `supersession of all previous orders ' and then speaks of package of incentives and then states as applicable to existing large and medium scale industries also.
If SRO 80/82 had superseded G.O. 159 and 414 does it mean that this Government order has superseded SRO 80/82 and if that is so what are incentives available after SRO 80/82 to the existing industries? This Government order is thus consistent with the pattern followed and deals only with incentives to industries.
In the second paragraph an option has been given to the industry which has not utilised the full benefit of the earlier exemption either to continue to enjoy the earlier exemption given by way of incentive or to opt for the scheme of incentive under the new Government order.
Thus all, these provisions are consistent with the case of the appellants that neither SRO 80/82 superseded GO 159 and 414 nor Government order 54 dated 26.2.1983 took their right to continue to enjoy the exemption benefit for the total period of five years as provided in the said Government orders.
The learned counsel for the appellants also contended that they are entitled to enjoy the benefit for the full period of five years both on law as also on the ground of estoppel.
We have already noticed that in Bakhul Oil case (supra) this Court held that in the case of a grant of exemption without specifying any period for which the exemption is available the Government could withdraw the same at any time.
Though in that case on facts no further question can arise since it was held that the dealer was not entitled to the benefit of the subsequent notification giving the exemption for a period of five years on the ground that the notification was prospective in operation and therefore not applicable to the dealer in that case, this Court made certain further observations to the effect that even in the case of exemption for a particular period it could be withdrawn at any time subject of course to the plea of estoppel.
In Pournami Oil Mills case also the learned Judges appear to have given the benefit of exemptions for the full period even after the withdrawal on the basis that the industry was set up in pursuance of some representation made by the Government amounting to estoppel.
In the present appeals also there are lot of materials to show that the Government made representations to industry that they would give tax exemptions and other incentives and invited entrepreneurs to establish their industries in J. & K. Relying on those representations each of these appellants have set up their industries.
It is not necessary to set out these factual details in the judgment.
Suffice it to say that we have carefully considered all the materials and are of the view that the appellants acting on the representations had set up their industries.
Therefore they are entitled to claim the benefit of the exemption for the entire period of five years calculated 217 as per the terms of the Government orders, even if it were to be held that SRO 80/82 superseded the earlier exemption orders.
It was then contended by Mr. Verma learned counsel appearing for the State that in the assessment order relating to Assessment Year 1981 82 for the period from 1.9.1981 to 30.8.1982 in the case of K.C. Vanaspati there is a finding that the assessee had collected sales tax in respect of their sales turnover for which the exemption is now claimed and that under section 8 B of the J&K General Sales Tax Act the said amount is refundable to the Government.
As has already been seen there was an assessment order for the period covering from 2nd September, 1981 to 30th September, 1981 which was the subject matter of Writ Petition No. 52 of 1982.
The same period merged in the assessment order 1.9.1981 to 30.8.1982 and consolidated assessment order was made and that was subject matter of Writ Petition No. 882 of 1984.
Both these assessment orders were regular assessment orders and they are not section 8 B orders of the Local Act.
They were made on the findings that Government Orders 159 and 414 above referred to are not exemption orders and the assessee could not be said to have acted upon any representation by the Government that they are exemption orders on the ground that if they had relied on those orders as exemption orders they would not have collected any tax in respect of their sales and that therefore the Government was not precluded by any principle of promissory estoppel from assessing their sales turnover.
The assessees had challenged these assessment orders mainly on the ground that the Government orders were exemption orders and that in any case the State is precluded from levying any sales tax on the ground of promissory estoppel.
The learned Judges of the High Court held, as already stated that, the said Government orders were not exemption orders but were only in the nature of declaration of intention to exempt the said industries from payment of sales tax and that the assessee had also not established any right for non payment of tax on any ground of promissory estoppel.
For holding that the assessees could not be said to have relied on any representation from the Government that they would be exempted from payment of tax the learned Judges relied on the facts that the assessees had collected sales tax or the sales tax element had gone into the fixation of price of Vanaspati Ghee showing thereby that the appellants had not relied on any representation from the Government that their sales are exempt from payment of tax.
Since the assessment orders were regular assessment orders on the ground that their sales are taxable sales the question of applicability of section 8 B of the local Act does not arise.
That question arises in view of our finding that their sales turnover are exempt but still under section 8 B of the Local Tax they are liable to refund any money collected "by way of a tax".
Since 218 neither the High Court had any occasion to decide this question of applicability of section 8 B of the Local Act on the basis that the sales turnover were exempt from payment of tax nor the assessing authorities had any opportunity to decide or made any order under section 8 B of the Local Act separately, we think that the entire question relating to the applicability of section 8 B of the Local Act and even the question whether there was any collection of sales tax will have to be left open.
The learned counsel Mr. Verma strenuously contended that there is a finding in the assessment orders that the appellants had collected tax and that finding had not been either challenged or set a side by the High Court and that therefore they should be directed to refund the amount collected.
We are not able to agree with this contention of the learned counsel.
As already stated the assessment order itself was questioned in the writ petitions filed by the assessees.
The High Court had proceeded on the basis that the Government orders are not exemption orders and that the Government also was not precluded from collecting tax on any ground of promissory estoppel and that therefore the question of applicability of section 8B of the Local Act did not arise before the High Court.
It may be mentioned it is not the case of the State that they had collected any amount in excess of the percentage of sales tax i.e. collectable in respect of taxable Vanaspati sales.
In the light of our findings that the sales were exempt the question now arises whether the assessees had collected any tax and whether the amount was collected by way of tax and whether any element of sales tax has merged in the fixation of the price and that amounts to collection of sales tax.
These questions will have to be decided if the State considers that the assessees had collected sales tax, in separate proceedings that may have to be initiated under Section 8 B of the Local Act or when the State demands payment of the money under section 8 B of the Local Act.
Suffice it so say that we are unable to agree with the observations of the learned Judges of the High Court that merely because in the balance sheet a reserve fund is made for payment of sales tax or on basis of a letter of Kashmir Vanaspati giving a break up of the sales price of Rs. 238 it can be said to be conclusively established that sales tax had been collected.
Any way we do not want to say anything because the matter will have to be considered by the authorities concerned in case they want to invoke Section 8 B of the Local Act on the basis that the said government orders gave exemption from payment of sales tax in respect of these assessees for a period of five years as we have held.
In this view we are also not going into the question as to the validity of section 8 B of the Local Act and we leave open that question which was outlined before us.
Thus interpretation of section 8 B of the Local Act and the question of fact of collection and the liability to refund all have to wait till a demand is made by the competent authority for refund of the amounts 219 in exercise of their power under section 8 B of the Local Act.
The assessees have made some deposits in pursuance of interim orders made by this Court pending the appeals.
It is also stated that during the pendency some other amounts were also paid by the assessees in addition to the amounts paid as per the directions given by the Court.
The refunds of this money and the liability of the State Government to pay any interest while refunding the deposits will all have to await the demand, if any, that may be made by the Government under section 8 B of the Local Act.
However, we make it clear that the stay of refund of money collected as aforesaid will be only for a period of six months by which time the Department should initiate proceedings, if any, under Section 8 B of the Local Act, if so advised.
To sum up : G.O. 159 Ind dated 26.3.1971 and G.O. 414 dated 25.8.1971 are exemption from payment of sales tax orders referable to the powers of the Government under Section 5 of the J & K General Sales Tax Act and that exemption covers the entire series was available only for a period of five years from the date of commissioning of the industries and not for ten years.
The benefit of the exemption under the said Government orders are also available in respect of the inter State sales of the same commodities for a period of five years from the commencement of the commercial production.
The appeals are accordingly allowed to the extent mentioned above.
However, there will be no order as to costs.
V.P.R. Appeal allowed.
| The Education and Youth Services Department of the State of Karnataka issued an order dated 3rd October 1981 which provided two different methods of selection of teachers in private aided degree colleges one by Selection Committee and another by Management.
Under the order appointments for more than three months could be made by a selection committee whereas temporary appointments for less than 3 months could be made by the Management and such temporary appointments could be continued for a futher period of not more than 3 months, with one day 's break in service.
The Government order also provided that such temporary teachers shall be paid fixed salary being ten rupees less than the minimum payable to regular teachers.
The teachers temporarily appointed under the said order accordingly continued in service for a long period but with a break of a day or two every three months in their service.
Subsequently, they filed a writ petition in this Court seeking regularisation of their services by invoking the principle of equitable estoppel arising from implied assurance due to their long continuance.
It was contended on behalf of the petitioners that; (i) since the State has regularised the services of contract teachers and local teachers appointed in Government or vocational colleges they should also he extended similar treatment; and (ii) payment of fixed salary instead of regular emoluments for eight months in a year was discriminatory and arbitrary.
398 Allowing the petition, this Court, HELD: 1.
Provision of one day 's break in service in the Government order is deprecated and is struck down as ultra vires.
If the intention was to differentiate between appointments for more than three months and others it was a futile exercise.
That was already achieved by providing two different methods of selection one by Selection Committee and other by Management.
Distinction between appointment against temporary and permanent vacancies are well known in service law.
It was unnecessary to make it appear crude.
If the purpose was to avoid any possible claim for regularisation by the temporary teachers then it was acting more like a private business house of narrow outlook than government of a welfare State.
Such provisions cannot withstand the test of arbitrariness.
[403 G; 402 A B] B.R. Parineeth & Ors.
vs The State of Karnataka & Ors.
CMW 6232 of 1990 decided on 3.7.1990, referred to.
Order for payment of fixed salary to temporary teachers is declared invalid.
An appointment may be temporary or permanent but the nature of work being same and the temporary appointment may be due to exigency of service, non availability of permanent vacancy or as stop gap arrangement till the regular selection is completed, yet there can be no justification for paying a teacher, so appointed, a fixed salary by adopting a different method of payment than a regular teacher.
Fixation of such emoluments is arbitrary and violative of Article 14 of the Constitution.
[403 G; 402 F G] 2.1 Payment of nearly eight months ' salary by resorting to government order and, that too fixed amount, for the same job which is performed by regular teachers is unfair and unjust.
Such injustice is abhorring to the constitutional scheme.
[403 A B;] 3.
The practice of management of not making regular selection utmost within six months of occurrence of vacancy is condemned.
The helplessness expressed by the State that the managements went on continuing such teachers without holding regular selections despite orders of educational authorities may be true but not convincing and sounds like surrender in favour of private managements.
[403 C, 402 E] 3.1 Managements shall take steps, whenever necessary, to fill up permanent vacancies in accordance with rules.
Delay in filling 399 up the vacancies shall not entitle the management or director to terminate the services of temporary teachers except for adequate reasons.
But it shall entitle the government to take such steps including supersession of management or stopping grants in aid if premitted under law to compel the institutions to comply with the rules.
[404 B] 4.
Regularisation of services of teachers of Government colleges by the State may not furnish, any basis for petitioners to claim that the state may be directed to issue similar order regularizing services of teachers of privately managed colleges.
All the same such policy decisions of government in favour of one or the other set of employees of sister department are bound to raise hope and expectations in employees of other departments.
Therefore, it is incumbent on governments to be more circumspect in taking such decisions.
[404 E G] 5.
Ad hoc appointments, a convenient way of entry usually from backdoor, at times even in disregard of rules and regulations, are comparatively recent innovation to the service jurisprudence.
The infection is widespread in government or semi government departments or State financed institutions.
Malady appears to be widespread in educational institutions as provisions for temporary or ad hoc appointments have been exploited by the managements of private aided colleges to their advantage by filling it, on one hand, with persons of own choice, at time without following the procedure and keeping the teachers exposed to threat of termination, on the other, with all evil consequences flowing out of it.
Any institution run by State fund but managed privately is bound to suffer from such inherent drawbacks.
[400 G H; 401 C D] 6.
In the circumstances of the case following directions are issued: a) Any teacher appointed temporarily shall be continued till the purpose for which he has been appointed exhausts or if it is in waiting of regular selection then till such selection is made; [404 A] b) Services of such temporary teachers who have worked as such for three years, including the break till today shall not be terminated.
They shall be absorbed as and when regular vacancies arise; [405 B] 400 c) If regular selections have been made the government shall creat additional posts to accommodate such selected candidates; [405 B] d) From the date of judgment every temporary teacher shall be paid salary as is admissible to teachers appointed against permanent post.
[405 D]
|
ivil Appeal No. 836 of 1974.
From the Judgment and Order dated 23.8.1971 of the Punjab & Haryana High Court in L.P.A. No. 487 of 1968.
S.P. Goyal and D.D. Sharma for the Appellants.
A. Minocha for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
Nawal Singh sold 102 bighas of land to Nathu Ram for Rs.8,000 by a sale dated 11th February, 1952.
He also executed a sale deed in respect of 90 bighas of land to Sardha Ram for a sum of Rs.4,500 on 28th October, 1952.
There were recitals in the two sale deeds regarding the necessity for the sale.
The first sale deed stated: 771 "(1) The land is Banjar Qadim.
According to the law in force, it is obligatory to break and cultivate this land.
Otherwise the Govern ment would give it out by auction to some other person.
(2) I need money to bring other land under the plough, to sink a new well and for other agricultural works, such as purchases of bullocks etc.".
The recitals in the second sale deed dated 28 10 1952 ran as follows: "I have absolutely sold the aforesaid banjar qadim land . . for meeting my own needs, repairing the well, installing a persian wheel purchasing camel, and reclaiming the aforesaid banjar qadim jungle land.
" Nawal Singh 's heirs filed suits for setting aside the sales on the ground that they were governed by Punjab Agri cultural customs in matters of alienation, that the land was ancestral and that the alienation had been made without legal necessity and, therefore, would not affect their reversionary rights on the death of the vendor.
Both suits were consolidated and tried together.
The suits were dis missed by the sub judge and the first appeals were dismissed by the senior subordinate judge.
Second appeals were pre ferred which came up for hearing before a learned Single Judge of the High Court.
The learned Judge held that the sale in favour of Nathu Ram was without legal necessity except to the extent of a sum of Rs. 1,000 which was actual ly utilised by the vendor for the sinking of a new well 'in his remaining lands ', and that the sale in favour of Sardha Ram was entirely without necessity.
There were appeals against the order of the learned Single Judge to a Division Bench of the same High Court.
The Division Bench held that, so far as the sale in favour of Nathu Ram was concerned, the learned Single Judge had fallen into an error in upsetting the concurrent findings of fact of the Courts below.
The Court proceeded to observe: "The Courts below found and on evidence that bulk of Nawal Singh 's land was banjar qadim.
It has been further found that under the Punjab Utilisation of Lands Act, notices were issued to Nawal Singh that if the land was not broken up it would be taken under that Act and leased out 772 to third party.
There were no irrigation facilities available for the land and to sink a well money was needed.
There is ample evi dence on the record on which these evidences are based.
The vendor has come into the wit ness box and stated that the money was raised for this purpose.
The statement of the vendee was accepted by the Courts of fact.
In this situation, there was no justification to displace the judgments of the Court below with regard to the sale in favour of Nathu Ram (exhibit D 3).
The rule is firmly settled that the vendee either established the existence of necessity in fact or a bona fide inquiry that there was necessity for the sale.
If he satis fies either one of the two requirements the sale would be held for necessity or an act and good management, as the case may be .
It cannot be denied that for an agriculturist to bring under his plough his land is a matter of necessity and if some land is sold to bring the bulk of the land under cultivation, it would certainly be an act of necessity as well as an act of good management.
We are, there fore, clearly of the view that the learned Single Judge was not justified in upsetting the sale in favour of Nathu Ram." However, in respect of sale in favour of Sardha Ram, the Bench observed that the real difficulty was that there was no evidence that the money was advanced for the purpose of breaking up of the land but for the mere recital in the sale deed which was not sufficient for the purpose.
Unfortu nately, neither the vendee nor the witness had stated that the land was sold by Nawal Singh to break up his banjar qadim land.
The only fact proved was that Nawal Singh had a lot of banjar land but that was of no consequence by itself.
The decision of the learned Single Judge was therefore upheld in respect of the sale in favour of Sardha Ram.
The vendor has accepted the decision in regard to the sale in favour of Nathu Ram.
Sardha Ram has preferred the present appeal before us.
The learned counsel for the appellant contended that there was really no difference in the factual position so far as the two sales are concerned and that the Division Bench has erred in upsetting the sale in favour of Sardha Ram while upholding it in the case of Nathu Ram.
The High Court overlooked that even assuming that there was no evi dence to show that Sardha Ram had made enquiries as to the necessity for the sale, factual necessity for the sale had been established by the evidence on the record which was common to both the sales.
After 773 hearing both sides, we are of opinion that this contention has to be accepted.
It is an admitted fact that the alienor owned about 1,100 bighas of land.
It was also an established fact that, of this, 973 bighas was banjar qadim and the remaining land was of inferior quality.
The land was also under mortgage.
It is also Common ground that the provisions of the East Punjab Utilisation of Lands Act (Act 3.8 of 1949) as amended by Ordinance 15 of 1950 were in force in the area.
Under the provisions of this Act, a notice could be given requiring a land holder to bring uncultivated land under cultivation after reclamation within a period of 30 days from the date of issue of a notice in that regard.
Failing this, the area could be resumed by the Government and leased out to some other cultivators or society for cultivation for a period of at least 8 years.
The appellant had examined the development clerk in the office of the Deputy Commissioner, Kamal (D .W. 1) to show that a notice had been issued to Nawal Singh under the provisions of the said Act on 8th May, 1951 in respect of his banjar land measuring 976 bighas.
The learned Single Judge overlooked the notice of 8th May, 1951 and, mistakenly referring to another notice issued on 15.10.1954 to Sardha Ram, thought that the compulsions under the Act arose only after the sales of 1952.
The Divi sion Bench, however, has accepted the correct position while dealing with the sale in favour of Nawal Singh.
Having done this, we fail to see now the Bench could have held that the sale in favour of Sardha Ram was not actuated by the same grounds of necessity.
The question for consideration is whether if Nawal Singh, faced by the notice under the Punjab Utilisation Act that unless he brought the land under culti vation they would be leased out to some other party, decided that it would be in the best interests of the holdings as a whole to sell a portion of the land so that sale proceeds may be utilised for the reclamation of the major part of the remaining land, it could not be said that such a sale was justified by necessity.
We think that the answer must be in the affirmative.
The learned Single Judge expressed the view that non compliance with the notice would result only in a temporary lease of the land to outsiders and this conse quence was not sufficient to justify the sale of a portion of the lands on grounds of necessity.
We, however, agree with the Division Bench on this.
A land owner receiving a notice under the said Act has two options before him.
He can either own his helplessness to reclaim the land and permit it to be leased out by the Government to other persons for cultivation for a substantial period.
Or he may decide that he should make an attempt to make at least a part of the lands fertile by selling a portion of the land and reclaim ing the rest 774 with the help of the sale proceeds.
A bona fide decision taken by him to exercise the latter option cannot be said not to be an act of good management.
We think that if the sale in favour of Nathu Ram in the same circumstances was a valid sale (and we agree with the Division Bench on this), it is very difficult to say that the sale in favour of Sardha Ram was not.
The necessity for both the sales was the situation arising out of the receipt of the notice under the Punjab Land Utilisation Act.
Indeed we think that the find ings of the trial court and first appellate court on this issue were findings of fact which did not call for interfer ence by the High Court.
Learned counsel for the respondent drew our attention to the findings of the Learned Single Judge that, according to D.W. 2, the vendor was a "drunkard given to licentious habits".
The trial court and first appellate court have examined the entire evidence and recorded a finding to the contrary.
That apart, all that D.W. 2 said was: "The charac ter of Nawal Singh is bad.
He drinks and is also a womanis er", D.W. 2, however, also said that Nawal Singh had sold the land for managing the work of cultivation.
It is, there fore, difficult to draw from D.W.2 's testimony the inference that the sale of the land had been necessitated by the immoral activities of the vendor and that there was no real necessity to sell the land.
The Division Bench, rightly, has attached no importance to this aspect of the case.
For the reasons mentioned above we are of opinion that the sale in favour of Sardha Ram was a valid sale and is not liable to be impugned by the representatives or the succes sors in interest of Nawal Singh.
This appeal is therefore allowed and the judgment of the first appellate court is restored.
In the circumstances, however, we make no order as to costs.
T.N.A. Appeal allowed.
| The Official Liquidator got a complaint under sections 120 B, 406, 467 and 477A, 'Indian Penal Code filed before the Presidency Magistrate against the appellants one of whom was a past director and the other the Managing Director of the Bank of Commerce Ltd., which was in compulsory liquidation.
The appellants applied to the Presidency Magistrate for dismissal of tile complaint on the ground that the Official Liquidator was incompetent to prefer the complaint as there was no sanction of the Company judge.
This was dismissed.
The appellants then applied to the High Court for quashing the criminal proceedings on the ground that the prosecution was ab initio void because of the absence of a prior direction judicially given by the High Court under section 237(1) of the Indian Companies Act.
The High Court rejected the application.
Held, that a direction of the Court under section 237(1) of the Indian Companies Act was not a condition precedent to the prosecution of the appellants by the Official Liquidator.
In fact, a valid and proper direction had been given by the Court under section 237(1) to the Official Liquidator for the prosecution of the appellants.
In giving a direction under this section the Court could act ex parte and it was not necessary to give to the appellants any opportunity of being heard.
Section I79 Of the Companies Act deals with the powers of liquidators to institute or defend legal proceedings with the sanction of the Court and section 239(1) deals with the powers of the Court to give directions for prosecution of delinquent directors, etc.
In the present case, the Court had made an order under section I79 giving liberty to the Official Liquidator to institute or defend legal proceedings, and the Official Liquidator was entitled to lodge the complaint against the appellants even without a direction under section 237(1).
|
vil Appeal No. 1522 of 1987.
From the Judgment and order dated 29.7.1986 of the Punjab and Haryana High Court in Civil Writ Petition No. 3464 of 1986.
Mohan Pandey and Baldev Kapoor for the Appellant.
N.K. Sodhi, Mrs. Indu Goswamy for the Respondent.
663 The following Order of the Court was delivered: ORDER Special leave granted.
The appeal is heard.
This appeal by special leave is filed against the Order dated 29.7.
1986 passed by the High Court of Punjab and Haryana rejecting the writ petition filed by the appellant inter alia for the issue of the writ in the nature of manda mus, directing the State Transport Commissioner, Punjab, who is exercising the powers of the Regional Transport authori ties in the State of Punjab to grant permits to ply stage carriages on the route Taran Taran Muktsar via Ferozepur and Sadiq under Chapter IV of the (hereinafter referred to as 'the Act ') and to dispose of the applications for renewal of stage carriage permits which are pending before the Regional Transport authorities.
The appellant was a transferee of a bus along with two permits to operate one return trip on the route Taran Taran Muktsar via Ferozepur and Sadiq.
Those permits could not be renewed owing to the default on the part of the transferor to make within time an application for the renew al of the said permits before the permits were actually transferred.
Therefore, the State Transport Commissioner, Punjab, who was exercising the powers of the Regional Trans port authorities instead of granting regular permits on applications made under section 46 of the Act granted tempo rary permits in favour of the appellant on the route in question.
Thereafter despite the request of the appellant to issue regular permits the State Transport Commissioner proceeded to invite applications for the grant of temporary stage carriage permits.
Pursuant to the said notification the appellant and some others made applications.
For some reasons which need not be set out here the application of the appellant was rejected and the temporary permits were granted in favour of the 2nd respondent.
The appeals filed against the order granting temporary permits in favour of the 2nd respondent became infructuous as the period for which they had been granted expired before the appeals could be disposed of.
Be that as it may, the main grievance of the appellant has been that the State Transport Commissioner, Punjab, who is exercising the powers of the Regional Transport authori ties has failed to discharge his duty under the Act which requires him to consider and grant stage carriage permits on applications made under section 46 read with sec 664 tion 57(2) of the Act where there is need to do so to appli cants who are eligible to be granted such permits and to grant renewal of such permits on applications for renewal made under section 58 of the Act.
The appellant, therefore, bled the writ petition, out of which this appeal arises, before the High Court of Punjab and Haryana for appropriate relief.
The said writ petition was dismissed at the stage of admission.
Aggrieved by the order of the High Court the appellant has filed this appeal by special leave.
When the Special Leave Petition came up for hearing on September 16, 1986 notice was issued to the State Transport Commissioner requiring him to show cause as to why he should not be directed to take action on applications made under section 46 of the Act for granting permits to ply stage carriages instead of issuing temporary permits under section 62 of the Act periodically, even though there was permanent need to grant regular stage carriage permits.
In reply to the said notice the 1st Respondent has filed a counter affidavit, the relevant portion of which is as follows: " In the State of Punjab two separate schemes with regard to the grant of stage carriage permits in favour of the State Trans port Undertakings and the Private Operators were approved by the Government of Punjab under sub section (2) of section 68(D) of the .
Out of the two schemes one is called 'Punjab Roadways Scheme ' operative in the erstwhile Punjab areas and the other is called 'Pepsu Road Transport Corporation Scheme ' operative in the erstwhile Pepsu areas.
The schemes for Punjab Roadways and Pepsu Road Transport Corporation were published on 19.11.1969 and 18.2.1972 respec tively.
A copy of both the schemes are exhib ited as Annexure R1 and R2.
According to the above notifications the Punjab Government had announced that: (i) 60% operation will be undertaken by the Punjab Roadways and the remaining 40% by the existing private operators and new entrants in the ratio of 30: 10, respectively in the areas of erstwhile Punjab State.
(ii) 60% operation will be undertaken by the Pepsu Road Transport Corporation and 40% by the private operators in Pepsu territory.
665 (iii) Notifications further provided that the schemes will have the effect for a period of 7 years (upto 18.11.1976) in Punjab State and will last till 30th June 1977 in the Pepsu territory.
(iv) After the expiry of 7 years (upto 18.11.1976) in the case of Punjab Scheme and from 1st July, 1977 in the Pepsu territory, 1/3rd operations of the private operators will be taken over by the Punjab Roadways/Pepsu Road Transport Corporation every year to complete the take over in three years.
Neither the Punjab Roadways nor the Pepsu Transport Corporation have taken over the operations from the private operators in the terms of above mentioned notifications nor new schemes have been announced by the Govern ment.
The transport operations have, however, to be continued as at present to save the public from inconvenience.
At the same time it will not be advisable to grant regular permits on long terms basis in the absence of any transport policy announced by the Punjab Government.
Under these circumstances I am granting/issuing permits on temporary basis after following the prescribed procedure laid down under section 47 of the and after giving due hearings to all the applicants at the time of initial grant.
As soon as the new transport policy is fina lised by the Government all the stage carriage permits granted on temporary basis due to non finalisation of transport policy will be granted on regular basis after following the procedure as laid down under sections 57(2) and 57(3) of the .
It may, however, be added here that the State Government is in the process of finalising a new Transport policy.
" A reading of the counter affidavit filed by the State Transport Commissioner, Punjab practically does not set up any defence at all to the prayer made by the appellant.
The counter affidavit refers to two schemes, namely, the Punjab Roadways Scheme and the Pepsu Road Transport Corporation Scheme approved under section 68 D of the Act, which were published on 19.11.1969 and 18.2.1972 respectively.
It is, however, admitted that neither the Punjab Roadways nor the Pepsu Road Transport Corporation have taken over the opera tions from the private operators in terms of the above mentioned notifica 666 tions nor any new scheme has been announced by the Punjab Government.
The 1st Respondent further states that since there was general inconvenience, the temporary permits were being issued after following the prescribed procedure laid down under the Act.
The affidavit further says that due to the non finalisation of the transport policy by the State Government it was not possible to issue regular permits to run stage carriages by following the procedure prescribed under sections 57(2) and 57(3) of the Act.
We are of the view that the entire policy followed by the State Government and the 1st Respondent is contrary to the general scheme of the Act.
The schemes said to have been published under section 68 D of the Act do not specify any notified routes or any notified areas.
It is not possible also to find out from the said scheme whether private operators have been excluded from any particular area of route.
The schemes appear to be incomplete and, therefore, are ineffective.
In the above situation the Regional Transport authorities whose functions have been delegated under the Act to the State Transport Commissioner, Punjab, cannot decline to grant stage carriage permits on applications properly made to them by intending operators only because the State Government has not announced its transport policy.
The State Government cannot have any policy different from or independent of the provisions contained in Chapter IV and Chapter IV A of the Act.
The Transport Authorities which are statutory authori ties have to discharge the duties imposed on them by the Act without waiting for any policy to be announced by the State Government.
In doing so primary consideration should be given to the public interest and also to the fundamental right of the citizens to carry on motor transport business in accordance with law.
It is not denied that there is a permanent need to grant permits to ply stage carriages on the several routes in the State of Punjab.
In the circum stances, the policy adopted by the 1st Respondent, namely, issuing of temporary permits from time to time, appears to be a highly irregular one.
It is against the language and spirit of section 62 of the Act, which provides for the grant of temporary permits.
This Court has observed in several decisions that a Regional Transport Authority would be failing in its duty if it grants repeatedly temporary permits to ply stage carriages on routes even though it is aware of the fact that there is a permanent need for grant ing regular permits in respect of the said routes.
The fact that the State of Punjab is thinking of finalising a new transport policy can have no bearing on the question in issue.
We are, therefore, of the view that the 1st Respondent cannot successfully resist the writ petition out of which this appeal arises.
In the circumstances we feel that it is appropriate to issue a writ in the 667 nature of mandamus to the Regional Transport authorities in Punjab.
whose duties are being discharged by the State Transport Commissioner, Punjab, to take immediate steps to invite applications suo motu under section 57(2) of the Act for issuing regular stage carriage permits to deserving applicants, to grant stage carriage permits to deserving applications who make applications for the stage carriage permits in accordance with law and to dispose of the appli cations for renewal, if any, made under section 58 of the Act by the holders of stage carriage permits.
We accordingly direct the Regional Transport authorities in the State of Punjab to take immediate steps to invite applications suo moat under section 57(2) of the Act for issuing regular permits to deserving applicants to ply stage carriages in respect of the routes where there is a permanent need, to dispose of the applications made by persons who wish to ply stage carriages on the said routes in accordance with law and to dispose of the applications that may be pending before the Regional Transport authorities for renewal of stage carriage permits under section 58 of the Act.
All these steps should be taken within four months from today.
The temporary permits which are now in force shall cease on the expiry of the period of four months and the Regional Transport authorities are directed not to issue any fresh temporary permits where there is permanent need for granting a stage carriage permits after four months.
This appeal is allowed accordingly.
There shall, howev er, be no order as to costs.
A copy of this order shall be sent to the Chief Secre tary to the State of Punjab within a week for information and implementation of the above directions.
H.L.C. Appeal allowed.
| The assessee, a public limited company, in the assess ment year 1964 65 was in the second year of its new project going into production.
The Income tax Officer computed the assessment under section 143(3) of the Income tax Act, 1961 after determining the rebate admissible under sections 84 and 101 at Rs.2,72,372.
He re opened the assessment under section 147(b) and re computed the rebate at Rs.2,51,222.
The appeal by the assessee to the Appellate Assistant Commissioner was dis missed.
The Appellate Tribunal accepted the plea of the assessee that to the figure of capital as worked out under Rule 19(1) is to be added the average profit as worked out under sub rule (5) of Rule 19 and held that the average capital has to be taken at Rs.45,39,557 and not at Rs.41,87,034.
In the Reference, the High Court agreed with the conclusion reached by the Appellate Tribunal.
Dismissing the Appeal of the Revenue, HELD: 1.
Admissibility of exemption under section 84 of the Incometax Act, 1961 which has been repealed with effect from 1.4.1968 has never been in dispute.
What has been deputed is the manner of its computation.
Rule 19 of the Income tax Rules, 1962 prescribes the method of computation and on a proper interpretation of sub rule (1), (3) and (5) of this Rule would depend the ultimate conclusion to be reached.
[590F G] 2.
The High Court is right in saying that the dispute has to be resolved by referring to sub rules (1), (3), (5) and (6) of Rule 19.
The High Court found that the value of assets entitled to depreciation under Rule 19(1)(a) worked out to Rs.40,10,947.
To this figure was added a sum of Rs.1,39,764 on account of depreciation as on 1.1.63 as also on account of the average value of additions.
The other assets were valued under Rule 19(1)(b) at Rs.44,38,126 as on 1.1.63.
All put together the 589 aggregate valuation came to Rs.85,38,837.
From this aggre gate, deduction of sum of Rs.44,01,803 representing loans, other liabilities including provision for tax as authorised by Rule 19 was made leaving the valuation of the capital at Rs.41,87,034.
To this figure the sum of Rs.3,52,503 being half of the profit from the New Project was added to compute the value at Rs.45,39,537.
Following the provision of section 84, entitlement to exemption was determined at Rs.2,72,372 representing 6% of the capital employed in the new industri al undertaking.
[592C E] 3.
Re assessment was made by deleting the addition of Rs.3,52,503 ' which represented half the profit of the year.
According to the Revenue, profits earned during the year had already been taken into account in the process of computa tion and there was no warrent for its addition over again to the extent of a moiety.
In fact, that is the only dispute that fell to be resolved.
The High Court took note of the fact that profits had necessarily been reflected in the average valuation of the assets but in its view the deeming provision of Rule 19(5) was the special procedure laid down for computation for the purpose of calculation and could not be over looked for the reasons advanced by the Revenue.
There is sufficient force in the reasoning of the High Court and the conclusion reached by it is accepted.
[592E G]
|
Criminal Appeal Nos. 5 17 523 of 1978.
From the Judgment and Order dated 17.2.1977 of the Allahabad High Court in Crl.
A. Nos.
1143, Referred No. 31 of 1976 connected with Crl.
A. Nos.
1132, 1133, 1156, 1158 of 1976 & Govt.
Appeal No. 2129 of 1976.
Prithvi Raj, Dalveer Bhandari and Prashant Choudhary for the Appellant.
R.L. Kohli, H.K. Pun and C.P. Lal (NP) for the Respondents.
Yogeshwar Prasad, Ms. Rachna Gupta and P.K. Bajaj for the Complainant.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
It is a very tragic and pathetic case tragic in the sense that 13 persons have been massa cred in a gruesome and horrendous manner and pathetic in the sense that the culprits burnt the victims of this barbaric act by covering with sugarcane leaves and sprinkling with diesel oil.
At the same time, we are deeply distressed and pained to note that three of the accused persons i.e. A 1, A 2 and A 27, who were in prison on the date of occurrence are falsely implicated as having taken part in the occur rence and the main witness, Nitya Nand (PW 1) has made a deliberate and suborn perjury by naming these three accused persons even in the earliest complaint (exhibit Ka 1) with an oblique motive of obtaining conviction of these accused also.
Even at the threshold, we would like to point out that as the appellant has not furnished the correct list of the array of the accused with reference to each of the four sessions trials in a chronological manner, we with great difficulty have culled out the names of the accused persons and the sessions trial case numbers from the body of the judgment of the Trial Court and appended a list of the names of the accused as Annexure 'A ' to this judgment so that we may not experience any difficulty in understanding and appreciating the prosecution case.
There were 41 accused in total who took their trial in sessions trial case Nos.
A 119, A 160, A 265/74 and A 27/75 as indicated by us 943 tO the foot note to Annexure 'A '.
The Trial Court convicted 16 accused under various provisions of the Indian Penal Code and the Arms Act and acquitted the remaining 25 accused.
In this judgment, we are referring to the accused persons in the order, as arrayed in Annexure 'A '.
Indisputably, 13 persons ranging between 22 25 years of age were done away with in the occurrence.
Two other per sons, namely, Jama (PW 3) and Balai (PW 24) escaped with injuries.
Of the deceased persons, one by name Kedar be longed to a village called Baluahi, whereas the rest of the deceased persons belonged to a village called Deotaha, to which village the injured persons belong.
The deceased persons are either the members of the family or associates of the complainant, Nitya Nand (PW 1) whose father was one among the 13 deceased persons.
Of the accused, some are inter related and the rest are associates.
The scene of occurrence lies within the limits of Nebua Naurangia Police Station in the District of Deoria in the state of U 'PAt a distance of 10 miles to the west of this police station, there is a village known as Bali.
A few furlongs to south of Bali, the village Deotaha is situated.
The agricultural area of the village Bali extends up to some distance to the west of village Deotaha.
About six furlongs to the west of village Deotaha, there are two contiguous plots bearing Nos. 736 and 737 without any dividing line.
The occurrence in question took place in the very same plots.
There were two rival factions in the village Deotaha in that the deceased persons, their relations and associates formed one faction and the accused formed the rival faction.
There was deep rooted enmity and simmering feelings between the two groups due to the following incidents.
In a keenly contested Pradhanship election of the vil lage Deotaha, the first accused became successful.
One of the deceased Prabhu Nath filed a suit as against A 27 (Jangi) for recovery of a sum of Rs.20,000 and the suit was decreed on A 27 's admission.
At the time of the occur rence, the execution proceeding in pursuance of the decree was pending.
In that suit, Kedar one of the deceased was a witness supporting the cause of Prabhu Nath.
On 15.5.
1973, the first accused and some others attacked one 944 Rajeshwar Tiwari during the course of which one Saheb be longing to the accused party was murdered.
The members of both the groups were arrested and sent to jail in connection with that occurrence.
After their release in the above case, they started damaging each other 's crops.
This led to the initiation of a security proceeding under Section 107 of the Code of Crimi nal Procedure.
In that the party of the first accused was bound over.
In September 1973, another security proceeding was initi ated under Section 107 of the Code of Criminal Procedure, wherein A 1, A 27 and 54 others belonging to A 1 's party were bound over.
Due to the above consecutive incidents, these two rival factions were nursing and nurturing their ill feelings which was gaming momentum day by day, ultimately culminating into the occurrence in question.
We shall now give a brief note of the prosecution case.
On account of the deep rooted animosity between the parties, the first two accused and Accused No. 27 hatched a conspiracy with some of their associates to murder Prabhu Nath and his men on 14.1.1974 when they were expected to be engaged for cutting the standing sugar cane in plot Nos.
736,and 737.
With an intention of screening himself from any prospective accusation the third accused deposited his licensed gun on 12.1.1974 with an arms dealer (PW 28) at Gorakhpur.
On the same day, namely, on 12.1.1974 at about noon accused Nos. 1, 2 and 27 in order to create evidence of their alibi entered into an agreement with one S.D. Dubey, who was at that time working in the Railways as Travelling Ticket Examiner (T.T.E.) and who is shown as Accused No. 40 in Annexure 'A ' to do an illegal act, to wit, to have the deceased persons murdered by their associates on 14.1.
In pursuance of this conspiracy these three accused (1, 2 and 27) traveled without tickets by 2 Dn.
Mail Train running between Khora Bhar and Gauri Bazar which stations lie on Gorakhpur Bhatni line.
As these three accused who traveled as ticketless passengers did not pay the charges due from them to the TTE (Accused No. 40), they as pre planned, were apprehended and produced before the Railway Magistrate on 13.1.1974 who convicted them and sentenced them to imprison ment till 18.1.1974.
Thus these 3 accused were incarcerated in the Gorakhpur jail till 18.1.1974.
945 The occurrence in question took place in the afternoon of 14.1.
On the day of occurrence at about 10.00 A.M. all the 13 deceased persons accompanied by two injured persons PWs 3 and 24 and few others went to plot Nos. 736 and 737 for cutting the sugar cane crops raised by one of the deceased namely Trijugi and his family members.
The deceased persons had also taken a tractor with the trolley attached to it for removing the sugar canes.
By about 1.00 P.M. the entire cane crops had been cut.
Some bundles of the sugar canes already cut had been loaded on the trolley.
At this point of time, about 80 90 persons inclusive of these accused persons armed with lethal weapons such as fire arms, spears, lathes and pharsas surrounded the spot from 3 direc tions, namely, north, east and west and after nearing the field started firing shots indiscriminately and also at tacked the prosecution party with pharsas, spears and lathes.
All those persons who were cutting the sugar cane crops got panicky and started running helter skelter.
These unfortunate 13 deceased persons ran towards north evidently to save their lives by taking positions behind the trolley and the tractor which were parked just north of the place of occurrence.
PWs 3 and 24 and some others ran towards south.
While so running PWs 3 and 24 received injuries.
But the other witnesses, namely, Nitya Nand (PW. 1), Om Prakash (PW. 6), Smt.
Mala (PW. 11) and Smt.
Chandgudi (PW. 12) escaped unhurt.
They all hid themselves in the fields of Hakim and Paras which lie to the south of the place of occurrence and witnessed the entire orgy of violence therefrom.
The cul prits chased these 13 deceased persons like hunters chasing the fleeing beasts and ruthlessly and indiscriminately attacked them.
All the 13 persons instantaneously succumbed to their injuries.
The dead bodies were found lying scat tered around the tractor and trolley providing a gory sight.
During the course of the occurrence, it is said that one of the deceased Prabhu Nath who had a gun fired at the accused party in self defence and injured Rambali (Accused No. 36).
Accused Nos. 10 and 16 covered the dead bodies with sugar cane leaves and sprinkled diesel oil taken out from the tractor and set fire to.
After committing this heinous crime, all the culprits left the scene of occurrence.
While leaving the scene, Accused No. 32 carried away the gun of the deceased Prabhu Nath.
The entire occurrence was over within an hour.
After the accused persons had left the scene, PW 1 went to the police station which is at a distance of 10 miles from the scene and presented a written complaint (exhibit Ka. 1) which was registered at about 2.45 P.M.
The 'chik report ' (The First Information Report) is exhibit Ka.
51 the copy of which is exhibit Ka.
The Station House Officer 946 (PW 43) took up investigation and proceeded to the scene accompanied by his head constable and other constables, after giving instruction to PW 17 to proceed to the scene by arranging some vehicles.
PW 43 reached the scene of occur rence at 4.00 P.M. and examined PWs 3, 24 and others and sent the injured witnesses for medical examination.
Then PW 43 held inquest over the dead bodies and thereafter sent the dead bodies for post mortem examination.
After despatch ing the dead bodies PW 43 inspected the scene of occurrence and found marks of pellets on all sides of the trolley and ash of burnt leaves lying around the trolley.
The wheels of the trolley were also found burnt.
Two live cartridges and several used and fired cartridges of 12 bore gun together with the pellets and some burnt clothes were found by the investigating officer on the spot.
Patches of blood were found at different places.
PW 4, the Medical Officer exam ined the injured witnesses and found on their person punc tured wounds besides abrasions.
PW 3 had two gun shot wounds.
The Doctor had noted the injuries.
in Exhibits Ka 5 and Ka 6.
The Medical Officers, namely PWs 2, 9, 10 and 46 conducted necroscopy on the dead bodies and noted various kinds of injuries such as incised wounds, lacerated in juries, contusions and gun shot wounds etc.
There was super ficial burn on the dead bodies indicating that the dead bodies were set fire to.
PW 43 searched for the accused mentioned in the F.I.R., but none was available.
Then he took proceedings under Sections 87 and 88 of the Code of Criminal Procedure (old).
He arrested Accused No. 39 on 16.1.1974 and seized his licensed gun.
Accused Nos. 3 and 16 were arrested in the house of Accused No. 38.
A rifle (exhibit 11) and a gun (exhibit 12) were seized by PW 43 from the house of Accused No. 38.
On 16.1.1974, the sub Inspector, PW 43 was suspended.
Thereafter the investigation was taken up by the Circle Inspector of Police on 17.1.
Subsequently, on 21.1.
1974 the investigation was entrusted to the C.I.D. Branch.
PW 38, an Inspector of that branch took up further investigation.
During the investigation he came to know that Rambali (Accused No. 36) was admitted to Gorakhpur Hospital, but slipped away from the hospital.
on 18.1.1974.
PW 38 collected evidence about the arrest of Accused Nos. 1, 2 and 27 by the T.T.E. while the latter found these three accused travelling without tickets on 12.1.1974.
He sent the two cartridges recovered from the place of occurrence to the ballistic expert, who opined that the same should have been fired by rifle (exhibit 11).
Some of the accused surrendered before the court on different dates.
After completing the investigation, PW 38 laid the chargesheet in 4 batches which gave rise to 4 different sessions trials which were disposed of by the learned Sessions Judge by this impugned common judgment.
947 All the accused pleaded not guilty and denied their complicity with the offence in question.
Rambali (Accused No. 36) admitted his presence and stated that the sugar cane crops belonged to one Phunni and not to Tirjugi and his relations and that while Phunni and his men were cutting the sugar cane crops, the deceased Prabhu Nath and the other deceased persons attempted to forcibly taking away the crops and during the course of such attempt, Phunni and his men attacked the deceased party and that he was shot by the deceased Prabhu Nath when he entreated that the sugar cane crops of Phunni should not be taken away.
Accused nos.
1, 2 and 27 denied the charge of conspiracy and stated that they were in prison on the date of occurrence consequent upon their conviction recorded by the Railway Magistrate for their ticketless travelling.
The prosecution in all examined 53 witnesses and filed number of documents.
The accused examined DWs 1 7.
Of the witnesses examined by the prosecution, PWs 1, 3, 6, 11, 12, 20 and 24 are ocular witnesses.
It may be mentioned here that PW 20 has been treated as hostile as he has not sup ported the prosecution case.
Of these witnesses, PWs 3 and 24 were injured witnesses.
One Ganga Prasad Pande mentioned as an eye witness in the F.I.R. was examined as a court witness (C.W. 1) and he did not support the prosecution version.
The learned Trial Judge believing the plea of accused Nagendra alias Tara (A.4) on the basis of the evi dence of DW. 1 (Dr. Krishna Swarup) found this accused as having not participated in the occurrence.
However, he spurned the plea of defence put forth by rest of the ac cused.
The learned Sessions Judge for the discussions made in his judgment acquitted 25 accused persons out of the total of 41 accused, namely, 4 6, 11 14, 17 22, 24 26, 28 32, 35, 39 41 finding them not guilty of any of the charges and convicted the rest of the 16 accused under various charges and sentenced them as hereunder: Accused Nos. 1, 2 and 27 were sentenced to life impris onment under Section 302 read with Sections 109 and 120 (B) IPC and Accused Nos. 3, 7, 8, 15, 23, 33, 34, 36 and 37 were convicted under Section 302 read with Section 149 IPC and sentenced to imprisonment for life and in addition to that, these 9 accused were convicted under Section 307 read with Section 149 IPC and each of them was sentenced to undergo rigorous imprisonment for a period of 4 years.
Accused No. 9 was convicted under Section 302 (simpliciter) and sentenced to life imprisonment and convicted under Section 307 (sim pliciter) and sentenced to 5 years rigorous imprisonment.
In addition to that, A. 9 was con 948 victed under Section 27 of the Arms Act and sentenced to rigorous imprisonment for a period of two years and also under Section 147 for a period of one year.
Accused Nos. 10 and 16 were convicted under Section 302 read with Section 149 IPC and each of them was sentenced to the extreme penalty of law, namely, death.
These two accused A. 10 and A. 16 were also convicted under Section 307 read with Section 149 IPC and each of them was sentenced to rigorous imprisonment for a period of 5 years.
Accused Nos. 3, 7, 8, 10, 15, 16, 23, 33, 34, 36 and 37 were convicted under Section 148 IPC and each of them was sentenced to undergo rigorous imprisonment for a period of one and half years.
Apart from this, all the convicted accused persons except Accused Nos. 1, 2, 27 and 38 were convicted under Section 201 read with Section 149 IPC and each of them was sentenced to rigorous imprisonment for a period of 4 years.
Added to that, all these accused except ing the above four were convicted under Sections 435 and 427, IPC and sentenced each one of the accused to undergo rigorous imprisonment for one year under each of these two charges.
Accused No. 37 was also convicted under Section 27 of the Arms Act and sentenced to undergo rigorous imprison ment for a period of two years.
All the convicted accused filed Criminal Appeal Nos.
1132, 1133, 1143, 1156, 1157 and 1158 of 1976.
The reference made by the Trial Court for confirmation of the sentence of death imposed on A. 10 and A. 16 was heard as a Referred case No. 31 of 1976.
The State preferred an appeal under Section 378 of Cr.
P.C. against the acquittal of all the 24 acquitted persons.
It may be mentioned at this juncture that the High Court did not grant leave as required under Section 378(3) of the Code of Criminal Procedure to entertain an appeal against the acquittal of S.D. Dubey (A. 40).
The High Court disposed of these appeals inclusive of the State appeal and the Referred case by the common impugned judgment dated 17.2.1977, allowing all the criminal appeals preferred by all the convicted accused except the appeal preferred by Rambali (A. 36) and setting aside the convictions and the sentences of those whose appeals were allowed.
The State appeal was dismissed.
The referred case was rejected conse quent upon the acquittal of A. 10 and A. 16.
The State on being dissatisfied with the impugned judg ment of he High Court, has preferred as many as seven crimi nal appeals as 949 detailed in the table given below: S1.
No. Criminal Appeal No. The Accused concerned.
517/78 A. 10 and A. 16 2.
518/78 A.38 3.
519/78 A. 1, A.2 & A.27 4.
520/78 A.3, A.7, A.8, A.9, A. 15, A.23 & A.33.
521/78 A. 37 6.
522/78 A.34 & A.36 7.
523/78 A. 4 6.
A. 11 14, A. 17 22, A.24 26, A.28 32, A.35 A.39 & A.41 After the grant of special leave, S.D. Dubey, Respondent No. 25 in Criminal Appeal No. 523/78 (Accused No. 40 in the Annexure 'A ' to this judgment) filed a petition for rectifi cation in Miscellaneous Petition No. 210/79 praying to recall the leave granted and the nonbailable warrant issued against him on the ground that the High Court did not grant leave to the State for preferring an appeal against his order of acquittal.
This Court by order dated 23.1.1979 deleted the name of S.D. Dubey from the array of the re spondents in Criminal Appeal No. 523/78 and revoked the special leave granted so far as he was concerned and also discharged the unbailable warrant issued against him.
The result is that there is no appeal against A. 40.
It seems that the complainant in all these appeals has filed Criminal Miscellaneous Petition Nos.
3621 3627 of 1989 for impleading him as a party.
Natarajan, J. (as he then was) by an order dated 14.9.1989 passed an order, "The counsel for the complainant may be heard at the time of heating of the appeal." Mr. Prithvi Raj, Sr.
Advocate as sisted by Mr. Dalveer Bhandari and another appeared on behalf of the appellant/state.
Mr. R.L. Kohli, Sr.
Advocate assisted by Mr. H.K. Puri and another appeared on behalf of the respondents.
Mr. Yogeshwar Prasad, Sr.
Advocate assisted by two advocates appeared on behalf of the complainant.
Mr. Prithvi Raj after taking us very meticulously through the judgment of the Trial Court as well as of the High Court and the evidence of some of the witnesses presented a very 950 comprehensive and detailed analysis of the case with the circumstances, surrounding it and made the following submis sions: 1.
The High Court has erroneously set aside the convictions recorded by the Trial Court without adverting to the intrin sic ' value of the evidence of the eye witnesses who speaks about the motive as well the actual occurrence in question, which took place in the broad day light of 14.1.
There is abundant and overwhelming evidence both oral and documentary conclusively establishing the long standing and deep rooted animosity for the accused persons to brutally attack the prosecution party.
The High Court is not justified in rejecting the testimo ny of the ocular witnesses especially of PWs 3 and 24, who were injured and whose presence at the scene of occurrence cannot be doubted, merely on the ground that they were all partisan witnesses.
The nature of the injuries sustained by the deceased persons as well by PWs 3 and 24 unmistakenly corroborate the evidence of the eye witnesses that all the victims have been indiscriminately and ruthlessly attacked with deadly weapons such as fire arms, spears, pharsas, lathes etc.
Both the Trial Court and the High Court without appreci ating the evidence adduced as against the acquired persons concerned in Criminal Appeal No. 523/78 has wrongly recorded the order of acquittal which is liable to be set aside.
Before entering into a detailed discussion of the oral and documentary evidence, we may point out certain incontro vertible facts.
The time of occurrence, the place of occur rence and the manner of attack are all not in dispute.
It seems that the learned Trial Judge himself had made a local inspection and visited the place of occurrence on 11.4.76 and he was satisfied with the evidence regarding the topog raphy of the scene.
So far as the motive is concerned, we have clearly stated in the narrative portion of the judgment that the prosecution party and the accused party were on war path on account of a series of incidents over a considerable length of time.
The evidence both oral and docu 951 mentary demonstrably establish that each one was out for the blood of another.
The very fact that 13 persons have been done away with by an inhuman, archaic and drastic mode of execution indicates that the culprits whoever they might have been should have been fomenting their hatred and pre planned to perpetuate this heinous crime on that particular day.
According to the prosecution, the perpetrators of the crime were numbering between 80 to 90.
When the victims and the witnesses started running away apprehending imminent danger to their lives, they were chased by the perpetrators of the crime and attacked ruthlessly by deadly weapons including fire arms.
The prosecution case is that except the father of PW 1, Prabhu Nath who was armed with a gun others were armless.
PW 1 speaks about the entire motive for the occurrence.
On a careful analysis of the evidence, we have no reservation in holding that there was bitter animosity between the prosecution and accused parties and as such there was sufficient motive on the part of the accused party to attack the prosecution party.
But at the same time, one should not lose sight of the fact that the prosecution party which was also entertaining the same amount of animosity against the accused party had sufficient motive to implicate all the leading persons of the accused party with the of fence in question.
As repeatedly said, motive is a double edged weapon and that it could be made use of by either party to wield that weapon of motive against each other.
Therefore, the key question for consideration is whether the prosecution has convincingly and satisfactorily established guilt of all or any of the accused beyond all reasonable doubt by letting in reliable and cogent evidence.
Regarding the conspiracy that is said to have been hatched on 12.1.74 among A. 1, A.2 and A.27 with three others A.28, A.29 and A.34 we have to scrutinise the evi dence of PWs 5, 8, 15 and DW 5.
The Trial Court in its judgment has found A. 1, A.2 and A.27 guilty under Sections 302 read with 109 and read with 120(B) and sentenced them for life, though has not placed much reliance on the evi dence of PWs 8 and 15.
In this connection, we may state that DW 5, ,the Assistant Station Master was examined only to discredit the testimony of PW 8.
PW 5 was the Railway Magistrate during the relevant period.
PW 29 was a Travelling Ticket Inspector and PW 39 was a constable.
According to them, A. 1, A.2 and A.27 were caught as ticketless travellers by S.D. Dubey (A.40) and produced before PW 29, who in turn handed over them to PW 39.
These three accused were detained at the waiting room of Bhatini Railway Station on the night of 12.1.1974 and pro duced before PW 5 on 13.1.1974 who convicted and 952 sentenced them to imprisonment till 18.1.1974.
These three accused themselves admit their conviction and imprisonment.
But would this piece of evidence coupled with the animosity that existed between the two groups be sufficient to con clude that the three accused have conspired to commit this offence9 No doubt, this impelling circumstance creates a strong suspicion against A. 1, A.2 and A.27 as to whether they had voluntarily got themselves arrested by creating a circumstance presumably due to some pre arrangement so that this circumstance might serve as a plea of alibi.
It is well said that suspicion, however strong it may be, it cannot take the place of legal proof.
Therefore, from this circum stance the Court cannot be justified in drawing an inference that these three accused had hatched a conspiracy to commit this offence.
There is absolutely no evidence that these ,three accused had any conversation among themselves to commit this offence or they pre planned to involve them selves in the offence of ticketless travelling so that they might escape their involvement with the offence.
One more circumstance, relied upon by the prosecution in attempting to prove the conspiracy, is the deposit of the gun by A.2 on 12.1.
1974 with PW 28, an arms dealer of Gorakhpur.
But the prosecution miserably fails in this attempt also because it is in evidence that the gun licence of A.2 had already been suspended.
Evidently A.2 had thought it appropriate to deposit his gun with an arms dealer for the sake of safety.
Therefore, that conduct of A.2 in depositing the gun could not be taken as a circumstance proving the conspiracy to any extent.
The High Court has rightly rejected the case of the prosecution on this aspect and dismissed the case of con spiracy and consequently set aside the conviction of these three accused under Section 302 read with Sections 109 and 120(B), IPC.
We shall now deal with the evidence relating to the actual occurrence.
The prosecution examined PWs 1, 3, 6, 11, 12, 20 and 24 as eye witnesses to the occurrence.
Of the above witnesses, PW 20, who is the son of one of the de ceased has resiled from his earlier statement and as such he was treated as a hostile witness.
As has been repeatedly stated in the earlier part of the judgment, PWs 3 and 24 were injured during the occurrence.
We shall examine the evidence of these eyewitnesses one by one subjecting their testimony to strict scrutiny.
PW I is none other than the son of deceased Prabhu Nath Tiwari, who is said to have been armed with a gun and fired at Rambali (A.36).
He claims to have been present at the spot of occurrence from beginning to end and to have wit nessed the entire occurrence and also identified all these accused persons as active participants along with 953 some others.
It is his evidence that he along with the other witnesses ran towards south and took shelter in the nearby field where from he witnessed the occurrence.
After all the miscreants had left the scene he was the person who went to the police station with a written complaint (exhibit Ka 1) and set the law in motion.
In exhibit Ka 1, PW 1 has implicated accused Nos. 1, 2 and 27 along with others assigning specif ic overtact to accused Nos. 1 and 2 stating that they were armed with a pistol and a gun respectively and fired at the prosecution party though has not attributed any specific overtact to A.27 against whom PW 1 was not entertaining so much of animosity as in the case of A. 1 and A.2.
Besides attributing the above overtacts, he has averred in the earliest document exhibit Ka 1, that accused Nos. 1 and 2 ex horted and incited his associates to bounce upon the prose cution party and to attack.
On a very close examination of the testimony of PW 1, we are disinclined to place any reliance much less safe reliance on his testimony for more than one reason.
Firstly, PW 1 who is the son of deceased Prabhu Nath Tiwan and grand son of the deceased Tirjugi and nephew of deceased Damodar is not only much interested in the prosecu tion case, but is anemically disposed towards accused party.
The sugar cane crops which was the subject matter for this occurrence was owned by his grand father Tirjugi and his family members.
Secondly, the absence of any injury on his person creates a grave doubt about his presence in the scene of occurrence.
Thirdly, PW 1 has not only given an exagger ated version in exhibit Ka 1 but also deliberately and falsely implicated A. 1, A.2 and A.27 as having actively participat ed and shot at the deceased.
Fourthly, his explanation now offered by him that he gave the names of these three accused persons since he overheard during the occurrence the Other accused shouting "Paras Avo, Sharda Avo, Jangi Babu Avo" which explanation is summarily rejected both by the Trial as well the High Court.
Fifthly, in exhibit Ka 1, PW I has not given the names of the fathers of any one of the accused persons.
Sixthly, even assuming, but not conceding that PW I was present at the scene of occurrence, he when fleeing towards south for his life on seeing the accused party with the strength of nearly 80 90 persons armed with deadly weapons could not have witnessed any part of the occurrence especially when all the accused were moving towards north.
Seventhly, it would not have been possible for PW 1 to prepare Ka 1 on his own, but this document should have been brought into existence on account of some deliberations and consultations with some of the people belonging to his faction.
Eighthly, there is no guarantee to believe even a part of his evidence when he goes to the extent of making 954 deliberate false implication of accused persons who are proved to have been in prison at the time of occurrence.
Ninthly, the entry in the General Diary dated 17.1.1974 marked as exhibit C 1 reveals that the investigating officer recorded the statement of the witnesses only on 15.1.
It may be recalled that the first investigating officer, PW 43 was suspended on 16.1.1974.
It is surprising that though exhibit Ka 1 does not contain the names of the fathers of any one of the accused exhibit Ka 51 (First Information Report) prepared on the basis of exhibit Ka 1 contains the names of the fathers of all the accused per sons.
The only explanation given by the head constable Ram Hausila Pandey is that he incorporated the fathers ' names on an enquiry from others is totally unacceptable.
Some doubt is created about the veracity of exhibit Ka 1 on the basis of certain corrections made thereon.
Though the Trial Court was inclined to rely upon the evidence of PW 1 despite the patent infirmities, the High Court has rejected his evidence in toto for just reasons.
PW 6 is the son of Rajeshwar Tiwari, who was one of the counter petitioners on the side of the prosecution party in the security proceedings.
This Rajeshwar Tiwari is the real brother of Tirjugi, the deceased.
PW 6 was interrogated for the first time by the investigating officer only on 17.1.1974.
The High Court has observed that this witness was thrust into service only at a later stage to serve as an ocular witness.
The accused in their defence has attempted to show on the basis of the evidence of CW. 1 that PWs 1 and 6 were residing far away from the scene of the occurence and that they were not present at the scene.
But as CW. 1 has not supported the prosecution version, much weight was not attached to this evidence.
However, the conduct of PW 6 in not going to the police station and not being available for examination till 17.1.1974 leads to an inference that he would have been made as an eye witness to the occurrence at a belated stage.
This witness too as PW 1 ran towards south and did not sustain any injury.
Hence we are in total agree ment with the High Court that PW 6 is pressed into service to serve as an eye witness.
PW 11 has admitted that her parents used to take loans from Prabhu Nath Tiwari and that she was residing in the house of Rajeshwar Tiwari as his servant.
The evidence of PW 11 is contradictory to that of PWs 3 and 24, in that PW 11 has deposed that PWs 3 and 24 were found going towards east on the road which is not the prosecution case.
Though this contradiction seems to be very trivial, in the context of the case it assumes some signifi cance in examining the presence of the witnesses at the scene.
PW 12 is the mother of deceased Ram Vilas.
She has admitted that her 955 husband 's sister had taken loan from Rajeshwar Tiwari in lieu of which her husband had given 12 bighas of land to Rajeshwar Tiwari.
According to these two witnesses (PWs 11 and 12), the accused persons after firing certain shots did not use their gun, but attacked the victims only with spears, pharsas and lathis.
The High Court has given cogent and convincing reasons to discard the testimony of these two witnesses also.
Now we are left with the testimony of the injured witnesses PWs 3 and 24 on whose evidence Mr. Prithvi Raj, learned counsel appearing for the State placed much reli ance.
PW 4, the Medical Officer has testified to the fact that he examined PW 3 at 9.15 A.M. on 15.1.1974 and noted a punctured wound on the left scapula, an incised wound on the left buttock, two gun shot wounds one on the left knee another on outer side and middle of the left shoulder and an abrasion on the left thigh.
According to the Medical Officer, the injuries were of a day old.
He issued the Wound Certificate exhibit Ka 5.
The same Medical Officer exam ined PW 24 at about 9.30 A.M. on 15.1.1974 and found on his person two abrasions, one contusion, a swealing and three gun shot wounds one on the right scapula region, the other below iliac crest and the third one near the fight elbow.
exhibit Ka 6 is the Wound Certificate.
The very fact that these two witnesses have sustained certain gun shot wounds probabilities the presence of these two witnesses at or about the time of occurrence at the scene.
Therefore, their evidence might command acceptance provided their evidence inspires confidence in the minds of the Court and that the said evidence is free from any in firmity.
PW 3 was a servant of Rajeshwar Tiwari.
According to the prosecution, these two witnesses were standing almost at the centre of the eastern side of the scene field at which point they received injuries and thereafter took shelter in the field of one Hakim.
PW 3 mentions the names of accused Nos. 3, 5 11, 15, 16, 18, 22, 23, 25, 26, 28, 30, 33 37 and 41, the total number of which is 23 of whom 11 have been acquitted by the Trial Court itself.
PW 24 had named six accused persons of whom Jhullar (A. 17) is said to have assaulted him.
A. 17 is acquitted by the Trial Court.
It shows that the Trial Court had not placed complete reliance on the testimony of these two witnesses.
According to him, he and PW 24 were examined by the Sub Inspector, PW 43 and sent for medical examination.
But it is surprising to note that both these 956 witnesses were medically examined after a delay of 21 hours on 15.1.
1974 at about 9.30 A.M.
No explanation is forthcom ing as to why there was such a delay of medical examination of these two witnesses who are said to have been sent to the hospital immediately after examination by PW 43.
The entry exhibit C. 1 in the General Diary of 17.1.1974 evidently made after suspension of PW 43 shows that the statements of witnesses were recorded on 15.1.1974.
This entry is diamet rically in opposition to the evidence of not only of these two witnesses but also of PW 43 who is said to have examined the witnesses at the spot on the evening of 14.1.1974 it self.
PW 24 has admitted that he was suffering from total blindness in his right eye and poor sight in his left eye and he was suffering from eye blindness since 4 5 years.
He admitted that he could not see as to who assaulted whom.
Later on he stated that he had not seen any accused by their face and even the accused named by him were recognised only by their voice.
It is found in the judgment of the High Court that PW 24 was cross examined by the public prosecutor himself which circumstance indicates that PW 24 has not supported the prosecution version.
It is the evidence of the investigating officer that he did not find any blood at the place where these two witnesses were allegedly lying.
It is under these circumstances the High Court was disinclined to place any reliance on the evidence of these two witnesses who are indisputably partisan witnesses.
It is pointed out by the High Court that the entry in exhibit C 1 giving the details of the investigation carried on by PW 43 on 14.1.1974 does not indicate that the investigating officer contacted and interrogated these two witnesses on 14.1.1974 itself.
The only inference that would follow is that these two witnesses even admitting that they had received injuries at the scene field as pointed out by the High Court rightly too in our view might have run away to the village and were contacted by the police only on the next day.
So on safe reliance can be placed on the testimony of these two wit nesses.
When viewed from any angle, we are of the firm view that the reasons assigned by the High Court for disbelieving the testimony of all the ocular witnesses are unreasonable.
The evidence is ambulatory and vasulating besides suffering from insurmountable infirmities and improbabilities.
The totality of the evidence is unworthy of any credence when examined by the standard of yardsticks of credibility.
As we have repeatedly pointed out earlier, there is a deliberate false implication of the accused Nos. 1, 2 and 27 to whom overtacts are 957 attributed in exhibit Ka 1.
In fact, the High Court has gone in great depth into the facts and circumstances of the case and rightly concluded that the prosecution has miserably failed in establishing the guilt of the accused except A.36.
In spite of best efforts and great deal of pondering over the matter, we are unable to disagree with the conclusion ar rived at by the High Court in rejecting the testimony of these witnesses whose evidence lacks the guarantee to in spire the confidence especially when the major portion of the evidence is manifestly false and patently incredible.
No doubt, the circumstances attending the case, namely, the conduct of A. 1, A.2 and A.27 voluntarily getting themselves arrested by A.40 creates suspicion against them.
But that suspicion by itself howsoever strong it may be is not suffi cient to take the place of legal proof and warrant a finding of guilt of these three accused.
It is pertinent to note that even the charge flamed by the Trial Court reads as if all the accused inclusive of A. 1, A.2 and A.27 formed themselves into an unlawful assembly on 14.1.1974 in the village Bali in prosecution of the common object of committing murder of 13 deceased persons and disposing of the dead bodies.
In such a situation, can it be said that there is justification for convicting the rest of the accused barring accused Nos. 1, 2 and 27 for the specific acts attributed to them by the witnesses whose evidence is tainted with patent falsehood.
The observation of the High Court reading "All this indicates that Nitya Nand (PW 1) had not seen the occurrence, that the first information report was not lodged when it purports to have been lodged, and, that it came into existence later on and was ante timed" cannot be said to be perverse.
Similarly yet another observation reading "Once it is established that some of the accused persons named by these witnesses had not participated in the occurrence and have been falsely impli cated by them, it will not be safe to place reliance upon their testimony regarding the complicity of the other ac cused nominated by them without corroboration in material particulars by other reliable evidence, direct or substan tial" also does not call for interference.
We went through the available records placed before us and examined them scrupulously and meticulously with all seriousness and onerous responsibility cast upon us in getting at the truth, but we regret to say that the entire evidence is nothing but a coloured version with concocted story and exaggerated account mixed with falsehood and that the prosecution has miserably failed to make out the charges against all or any of the accused beyond all reasonable doubt except 958 Rambali (A.36) who himself admitted his presence at the scene.
In this connection, we would like to cite a decision of this Court in Balaka Singh & Ors.
vs State of Punjab, ; wherein the following observation is made.
" . . the Court must make an attempt to separate grain from the chaff, the truth from the falsehood, yet this could only be possible when the truth is separable from the false hood.
Where the grain cannot be separated from the chaff because the grain and chaff are so inextricably mixed up that in the process of separation the Court would have to reconstruct an absolutely new case for the prosecution by divorcing the essential details presented by the prosecution completely from the context and the background against which they are made, then this principle will not apply.
" No doubt, it is true that this heinous offence is dia bolical in conception and executed in gruesome and ghastly manner.
It is shocking that 13 persons have been done away with in a broad day light in the course of the same transac tion.
Nonetheless the Court when satisfied that the evidence adduced by the prosecution is not only unworthy of credence, but also manifestly and inextricably mixed up with falsehood cannot be carried away merely on the fact of multiplicity of victims and on the basis of speculations and suppositions in the confused stream of facts.
In our considered view, the High Court has apprised the evidence in the proper perspec tive and arrived at a correct conclusion which is neither perverse nor unreasonable.
For all the reasons stated above, we see no reason to interfere with the findings of the High Court and dislodge the same.
In the result the judgment of the High Court is confirmed and all the appeals preferred by the State are dismissed.
Y. Lal Appeals dismissed.
959 Annexure 'A ' LIST OF THE ACCUSED PERSONS 1.
Parasnath Tiwari 2.
Sharda Prasad 3.
Hausila Tiwari 4.
Nagendra alias Tara 5.
Bishwanath 6.
Mahendra Tiwari 7.
Anirudha Tiwari 8.
Shukhal 9.
Pramhans 10.
Prahlad 11.
Sudama 12.
Jumarati 13.
Shahid 14.
Birjhan 15.
Suryaman Koiri 16.
Moti Ram 17.
Jhullar 18.
Suryabali 19.
Kumar Kewat 20.
Shanker 21.
Ram Asrey 22.
Jamuna Pasi 23.
Harilal 24.
Banwari 25.
Bindsari 26.
Lachman 960 27.
Jangi 28.
Jhinnu 29.
Samsher 30.
Jetan 31.
Bramhdoo 32.
Jagdish Tiwari 33.
Durga Pandey 34.
Jagat Narain Misra 35.
Sunder 36.
Rambali 37.
Babu Singh alias Bandhoo Singh 38.
Parasnath Pandey 39.
Ram Naresh Pandey 40.
S.D. Dubey 41.
Kailash Note: 1.
Accused Nos. 1 to 33 were tried in Sessions Trial No. A 119/74. 2.
Accused Nos.
34 36 were tried in Sessions Trial No. A 160/74. 3.
Accused Nos.
37 40 were tried in Sessions Trial No. A 265/74. 4.
Accused No. 41 was tried in Sessions Trial No. A 27/75.
| The respondents organised two music programmes by formu lating an ostensible savings scheme under which the entry to the programme was open to persons on becoming members of the scheme by paying an admission fee of Rs.2, non refundable, and membership subscription of Rs. I0, refundable after 10 years.
The entry to the programme was strictly on the pro duction of invitation card as well as membership card.
Many persons paid the admission fee and the membership subscrip tion.
At the time of giving entry to the programme, the respondents collected the membership forms and money re ceipts from the persons concerned as a result of which they were left neither with membership form nor with the money receipts.
Although the promise was that such programmes would be repeated for 10 years yet no such performances were arranged.
The result was that members of the public were defrauded of their money and the State Government of its tax revenue.
The Entertainment Tax Collector checked the receipts of the respondent on both the dates of performances and accord ingly issued notices to them demanding the tax and the duty surcharge thereon under the Madhya Pradesh Entertain ments Duty and Advertisement Tax Act, 1936.
The respondents challenged the validity of the notices by filing a writ petition in the High Court which allowed the petition and quashed the notices by holding that the assessment of tax was arbitrary because (i) there was no allegation that the invitation cards were sold; and (ii) 1001 membership subscription of Rs. I0 was not divided by 10 since the entertainment tax could be collected only on Re. 1 per year for the next 10 years.
Hence this appeal by the State.
Allowing the appeal and setting aside the decision of the High Court.
this Court.
HELD: The Scheme was not meant for promoting music.
It was a pure business preposition meant to collect money and earn profits.
and it was to be used as a device to evade the entertainment duty.
The receipts and the invitation cards were nothing but tickets for the show and only for one show, and were collected at the door.
Therefore.
whatever be the description given to the receipts or cards they were liable to the entertainment duty.
The impugned notices were proper ly issued by the appellants.
Since the High Court completely missed the crucial point and, therefore, mis directed it self, it is not possible to accept its reasoning that Rs. 10 collected by the respondents were the membership subscrip tion or that tile duty could not have been collected at a time on Rs. 10.
[1005E F; 1003D]
|
Appeal No. 813 of 1962.
Appeal from the judgment and decree dated July 13, 1960, of the Punjab High Court in L.P. Appeal No. 58 of 1958.
N.C. Chatterjee, V. section Sawhney, section section Khanduja and Ganpat Rai, for the appellant.
Naunit Lal, for the respondent No. 1(a).
The Judgment of the Court was delivered by Ayyangar, J.
The tenability of the appellant 's claim to possession of certain properties belonging to the Dera of Sanyasi Sadhus in Mauza Kharak Tahsil Hansi, District Hissar in Punjab is the subject matter of this appeal which is before us on a certificate of fitness granted by the High Court of Punjab.
The appellant claimed the properties as the successor of the last Mahant of the Dera Kishan Puri who died on February 15, 1951.
The fortunes of the litigation started by the appellant have greatly fluctuated.
His suit was decreed by the learned trial Judge, was dismissed by the first appellate Court, was again decreed by a learned Single Judge of the Punjab High Court on second appeal but this judgment has again been reversed on Letters Patent appeal and the suit directed to be dismissed.
On a certificate of fitness granted by the High Court the matter is now before us.
The last Mahant of this Dera Kishan Puri died on February 15, 1951.
Immediately on his death disputes seem to have arisen as regards the succession to the Dera.
Neki Puri the original respondent in this appeal (now deceased) claiming to be a Chela of the deceased Mahant appears to have entered into possession of the properties belonging to the Dera basing his title thereto on an appointment made to the office by the Bhekh and the people of the village.
The appellant nevertheless claiming to be in possession of the property as the successor of the deceased Kishan Puri by virtue of a title as the Gurbhai of the deceased, brought a suit for a declaration regarding his title and for an injunction restraining Neki Puri from interfering with his possession Neki Puri, as 235 stated earlier, claimed that he was in possession of the properties and asserted a title to such possession by being a Chela who had been appointed by the Bhekh.
An issue was raised in the suit as to whether it was the plaintiff or the defendant who was in possession of the properties and on a finding recorded that Neki Puri was in possession, the suit for a mere declaration and injunction was held to be not maintainable and was, therefore, dismissed.
Incidentally, however, evidence was recorded on an issue as to whether Neki Puri was a Chela of Kishan Puri the last Mahant and a finding was recorded on this question adverse to the claim of Neki Puri.
An appeal against this judgment was dismissed and 'hat decree has now become final.
The suit for declaration and injunction having been dismissed, Bralima Nand Puri the appellant brought the suit out of which ,his appeal arises, in the Civil Court at Hissar for a decree for possession of the properties movable and immovable belongingto the Dera.
The suit being on the basis of the plaintiff 's title, his was formulated thus : "5.
According to custom regarding succession of the Dera and the Riwaj i Am of Deras the plaintiff being Gurbhai was entitled to Gaddi, as he is the eldest Chela of Shanker Puri and the people of the village and the Bhekh appointed him as Mahant after performing all the ceremonies on the 17th day of the death of Shri Kishan Puri and made him occupy the Gaddi of dera of Kharak." An alternative basis for the title was also put forward in paragraph 8 in these terms : "8.
If for any reason it is held that after the death of Shri Kishan Puri, the plaintiff was not appointed as Mahant of the Dera, even then according to the custom regarding succession of the Dera and Riwaj i Am, the plaintiff is entitled to become Mahant of the Dera as he is the Gurbhai of Kishan Puri deceased.
It was held in the previous case that according to the Riwaj, in the absence of a Chela his (deceased Mahant 's) Gurbhai becomes Mahant of a Dera." in the Written Statement that was filed by Neki Puri two defences were raised : (1) that Neki Puri was a Chela and he had been appointed to succeed Kishan Puri by the Bhekh and other villagers.
In other words, he put forward a preferential title based on Chelaship followed by an appointment by the Bhekh and others.
,2) Alternatively, while admitting that Brahma Nand Puri was 236 a Gurbhai of the deceased Mahant, he denied that he had been appointed by the Bhekh and also urged that there was no custom by which a Gurbhai who had not been appointed by the Bhekh was entitled to succeed as Mahant merely by reason of his being a Gurbhai.
On these pleadings 4 principal questions (omitting certain others which are not relevant in the present context) arose for trial : (1) Was Neki Puri a Chela of the deceased Kishan Puri ?, (2) Was Neki Puri appointed by the Bhekh ? It was admitted by Brahma Nand Puri that a Chela had a right superior to a Gurbhai and therefore if these two issues were found in favour of Neki Puri the plaintiff 's suit had admittedly to fail.
, (3) Was the plaintiff appointed by the Bhekh ? No serious attempt was made to establish that the plaintiff had been appointed by the Bhekh and hence the 4th question that arose was whether there was a custom by which a Gurbhai could succeed to the Mahantship of this institution without an appointment by the Bhekh as pleaded in paragraph 8 of the plaint extracted earlier.
On these four matters the learned trial Judge recorded the following findings : (1) that Neki Puri had not been proved to be the Chela of the last Mahant.
, (2) No definite finding was recorded on the second point but the trial Judge was of the opinion that there was no proof that the Bhekh could appoint as Mahant a person who was not either a Chela or a Gurbhai or that they actually did so in the present case.
, (3) A definite finding was recorded that the plaintiff was not appointed by the Bhekh., (4) Without recording a finding on the custom set up by the plaintiff in para 8 of the plaint the learned trial Judge held that under the law in the Punjab in the absence of a Chela, a Gurbhai was entitled to succeed to the Gaddi apart from any question of appointment by the Bhekh and on this reasoning decreed the plaintiff 's suit.
The defendant went up in appeal to the Additional Sessions Judge.
The appellate Court reversed the finding of the trial Judge on the issue as to whether Neki Puri was a Chela of the deceased Mahant and held that he was.
A definite finding was also recorded on the basis of the evidence led by the defence that Neki Puri had been appointed to succeed the deceased Mahant by the Bhekh and the villagers.
As admittedly a Chela had a superior title to a Gurbhai in the matter of succession the learned District Judge allowed the appeal of the defendant Neki Puri and directed the dismissal of the suit.
The plaintiff took the matter to the High Court by way of second appeal.
The learned Single Judge who heard the appeal in his turn reversed the finding of the first appellate Court on the issue 237 regarding Neki Puri being a Chela of the deceased Kishan Puri.
He considered that the finding on this matter by the Additional Sessions Judge was vitiated by serious errors of law and misappreciation of facts.
Having thus put aside the claim of Neki Puri to succeed by holding that he was not a Chela, the learned Judge upheld the plaintiff 's claim on the ground that a Gurbhai was entitled to succeed to the Gaddi even if he had not been appointed by the Bhekh.
He, therefore, decreed the suit of the plaintiff.
, Neki Puri then in his turn took the matter before a Division Bench 'by a Letters Patent appeal.
The learned Judges concurred with the learned Single Judge on the issue as to whether Neki Puri was a Chela or not.
They agreed with him that the first appellate Court had committed serious errors in its reasoning in finding that Neki Puri had established the claim to be the Chela of Kishan Puri and affirmed the finding of the learned trial Judge in that regard.
Dealing next with the title of the plaintiff to the Gaddi, the learned Judges held that the custom set up in paragraph 8 of the plaint that Gurbhai could succeed without an appointment by the Bhekh had not been made out on the evidence and on this reasoning they allowed the appeal and directed the dismissal of the suit.
It is the correctness of this decision that is challenged before us by the appellant.
Two points were urged before us by Mr. Chatterjee learned Counsel for the appellant.
The first was that under the law applicable to Deras in the Punjab that is to say apart from any special custom, a Gurbhai was entitled to succeed to the Dera even without an appointment by the Bhekh or fraternity, (2) that even if that was not the law and a custom was required to sustain that plea, such a custom had been established by the evidence adduced by the appellant in the present case.
Pausing here, we might mention that Mr. Chatterjee referred us to the circumstance that during the pendency of the appeal in this Court Neki Puri had died and that certain others who, he stated, had even less claims to a Mahantship were in possession of the property and that seeing that the appellant was admittedly a Gurbhai it would be most inappropriate that his rights should be overlooked and a stranger permitted to squat on the property.
We consider this submission is devoid of force.
The plaintiff 's suit being one for ejectment he has to succeed or fail on the title that he establishes and if he cannot succeed on the strength of his title his suit must fail notwithstanding that the defendant in possession has no title to the property, assuming learned Counsel is right in 238 that submission.
As pointed out in Mukherjea 's Hindu Law of Religious and Charitable Trust, Second Edn., page 317 : "The party who lays claim to the office of the Mohunt on the strength of any such usage must establish it affirmatively by proper legal evidence.
The fact that the defendant is a trespasser would not entitle the plaintiff to succeed even though he be a disciple of the last Mohunt, unless he succeeds in proving the particular usage under which succession takes place in the particular institution.
" We, therefore, dismiss this aspect of the case from consideration.
Taking the first point urged by Mr. Chatterjee, we do not consider that learned Counsel is justified in his submission that under the law as obtains in the Punjab a Gurbhai is entitled to succeed without reference to an appointment by the Bhekh or the fraternity.
In Rattigan 's Digest of Customary Law the position as regards religious institutions in the Punjab is thus stated : "There is no general law applicable to religious institutions in this Province, and each institution must bedeemed to be regulated by its own custom and practice.
There are, however, certain broad propositions which judicial decisions have shown to have received very general recognition, and these propositions are embodied in the following paragraphs : 84.
The members of such institutions are governed exclusively by the customs and usages of the particular institution to which they belong.
The office of Mahant is usually elective and not hereditary.
But a Mahant may nominate a successor subject to confirmation by his fraternity.
" From paragraph 85 it would follow that the office of Mahant being usually elective and not hereditary, anyone who lays claims to the office on the basis of a hereditary title resting on Chelaship simplicitor or Gurbhaiship simplicitor must establish it.
(See also Jiwan Das vs Hira Das)1 Though, no doubt, the usage of one institution is no guide to that of another, it may be mentioned that in regard to the succession of the Mahantship of a Thakurdwara belonging to the Ram Kabir Sect of Hindu Bairagis in district Jullundur in the Punjab this Court held in Sital Das vs Sant Ram 2 (1) A.I. R. 1.
(2) A.I.R. 1954 S.C. 606.
239 that the usage required an appointment by the fraternity before a person could become a Mahant.
On the basis, therefore, of the passage in Rattigan 's Digest, which we have extracted, it appears to us that the first of the submissions made by Mr. Chatterjee cannot be upheld.
In fact, the tenor of para 5 of the plaint we have extracted earlier itself shows a consciousness on the part of the plaintiff himself that he considered that an appointment by the Bhekh was necessary to clothe him with the title to the Gaddi besides his status as a Gurbhai.
No doubt the plaintiff was a Gurbhai but he had not established that he had been appointed by the Bhekh or fraternity.
In the absence of such appointment under the law and apart from any special custom pertaining to this institution the appellant could claim no title to the Gaddi, by his being a Gurbhai.
This takes us to the second point urged by Mr. Chatterjee that on the evidence the plaintiff had made out the special custom pertaining to this institution that no appointment by the Bhekh was necessary before a Chela or Gurbhai could succeed to the Gaddi.
We have been taken through the entire evidence in the case.
In the first place, there are no documents or anything in writing in support of the custom and the matter depends entirely on the testimony of witnesses produced before the Court.
P.W. 4 who claimed to be a Bhekh of this Dera stated in chief examination : "According to the custom of our Bhekh if a Mahant died without leaving a Chela his Gurbhai became the successor.
If however there is Chela he is the successor.
" In cross examination be stated "The custom of succession stated by me above is written nowhere : it is followed by us." and then he continued : "In village Bata there is a Sanyasi Dera.
There also Prabhu Puri Chela was not found to be a good man and Sunder Puri Gurbhai of the last Mahant was installed.
In Guna there is a Sanyasi Dera.
Lachhman Gir Sanyasi died without leaving a Chela.
His Gurbbai Phag Gir succeeded him to the Gaddi.
" It would be seen that there was nothing specific in his evidence about the absence of an appointment by the Bhekh in those instances which is the special custom which the plaintiff sought to prove by this evidence.
P.W. II is another witness to whose 240 evidence reference was made.
He stated in his chief exami nation : " According to the custom of the Bhekh if a Mahant leaves no Chela, his Gurbhai succeeds to the Gaddi.
" In cross examination he stated : "The custom of succession which I have deposed to above is at par with the General Hindu Customary Law .
There might be many instances.
But I cannot recall to my mind any such instance now.
" P.W. 13 belongs to a different Dera but he claimed that the Dera at Kharak was similar to his institution and stated in his chief examination : "Amongst us if a Sadhu does not leave a Chela, the Gaddi goes to his Gurbhai.
There is an instance in the Gurdwara of Kosli near my Dera of a Gurbhai succeeding a Mahant in the absence of a Chela.
There is another such instance ofDera at Nangri in Rajasthan.
" The evidence ofP.W. 16 was similar: "My Guru succeeded to the Gaddi as Gurbhai of the last Mahant.
" Evidence of P.Ws. 17 and 18 was identical with that of the witnesses who preceded them : "According to custom of the Bhekh if a Mahant dies without leaving a Chela his Gurbhai succeeds.
" It would be seen from this evidence : (1) that it is lacking in particulars as regards the instances, and (2) there is nothing stated as to whether even in the instances referred to, there was no recognition, appointment or confirmation by the Bhekh which according to Rattigan is part of the customary law of the Punjab as the source of title for the Mahantship.
We are, therefore, not prepared to hold that the appellant has established the custom which he put forward in paragraph 8 of his plaint in derogation of the ordinary law viz., that without an appointment by the Bhekh or fraternity a Chela or, in his absence, a Gurbhai succeeds to the headship of a Dera.
The plaintiff 's suit was, therefore, in our opinion, properly dismissed.
Mr. Naunit Lal, learned counsel for the respondent urged that the learned Single Judge was in error in reversing the finding of the first appellate Court that Neki Puri had proved that he was a Chela of Kishan Puri the deceased Mahant.
It might be noticed 241 that the Division Bench had concurred in the views expressed by the learned Single Judge as regards the defects in the judgment of the first appellate Court on its findings on this issue.
Learned Counsel submitted that the learned Single Judge fell into serious errors in interfering with a finding of fact.
Though we are satisfied that certain portions of the judgment of the learned Single Judge had suffered from errors, we do not purpose to examine this question as the same is wholly unnecessary for the disposal of this appeal.
It is only in the event of our accepting the submissions of Mr. Chatterjee that the correctness of the reversal of the finding on the Chelaship of Neki Puri would have become material.
In the view that we have expressed as regards the appellant 's title to the Gaddi we do not consider it necessary or proper to discuss what, in fact, is merely an academic question.
The result is, the appeal fails and is dismissed with costs.
| Upon the death of the last Mahant of a Dera of Sanyasi Sadhus in Punjab, the respondent, claiming to be the Chela of the deceased and therefore having a preferential title, entered into possession of certain properties basing his title thereto on an appointment made to the office by the Bhekh and the people of the village.
The appellant also claimed the same properties as the successor of the deceased Mahant and brought a suit for a decree for possession of the properties belonging to the Dera, he claimed title on the basis that as Gurbhal of the last Mahant, he was entitled to the Gadi and that he, and not the respondent, had been appointed to it by the people of the village and the Bhekh; he further claimed in the alternative, that even if it was found that he was not so appointed, according to the custom regarding succession of the Dera and Rewaj i am of Deras, he was in any event entitled to become Mahant as he was the Gurbhai of the deceased Mahant.
The trial court found that the respondent was not the Chela of the deceased Mahant and that there was no evidence that be was appointed Mahant, on the other hand the appellant was also held not to have been appointed.
However, without recording a finding on the custom set up by the appellant, the trial court held that under the law in Punjab, in the absence of a Chela, a Gurbhai was entitled to succeed to the Gadi apart from any question of appointment by the Bhekh, and on this reasoning, decreed the appellant 's suit.
The respondent 's first appeal to the Additional Sessions Judge was allowed but a Single Bench of the High Court reversed that decision.
Thereafter, in the respondent 's Letters Patent Appeal, although the Division Bench concurred with the single Bench on the other issues, the appeal was allowed on the ground that the custom set up in the plaint that a Gurbhai could succeed without an appointment of the Bhekh had not been made out.
HELD : (i) There is no general law applicable to religious institutions in the Punjab and each institution must be deemed to be regulated by its own custom and practice.
Therefore, the appellant could not succeed as Mahant without reference to an appointment by the Bhekh or the fraternity unless he could establish a custom which entitled him to succeed by virtue of being a Gurbhai.
[238 D E; 239 C] Rattigans ' Digest of Customary law: Jiwan Das vs Hira Das, A.I.R. 1937 Lah.
311 and Sital Das vs Sant Ram, A.I.R. 1954 S.C. 606, referred to.
On the basis of the evidence before the trial court the appellant had not established the custom put forward by him.
[240 G] Sup./65 16 234 (ii)The appellant 's suit being one of ejectment he had to succeed or fail on the title that he established; if he could not succeed on the strength of his title, his suit must fail notwithstanding that the defendant in possession had no title to the property.
[236 HI Mukherjea 's Hindu Law of Religious and Charitable Trust, 2nd Edition,p.
317, referred.
|
Civil Appeals NOS.
1311 and, 1312 of 1973.
From the Judgment and Order dated 26/27.6.1972 of the Gujarat High Court at Ahmedabad in Wealth Tax Reference Nos. 3, 4, 20, 25, 29, 32, 32 & 36 of 1970 and 1 of 1971.
S G. Manchanda, B.B. Ahuja, R.N. Poddar and Miss A. Shubhashini for the Appellant.
S.T. Desai Mrs. A.K. Verma and K.J. John for the Respondents.
These appeals are directed against the judgment of the Gujarat High Court disposing of a wealth tax reference and answering the following question of law against the Revenue "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of section 2 (m) (iii) (a) were not applicable in respect of liabili 300 ties arising under the wealth tax assessments of the asses see for the assessment years 1960 61 and 1961 62 ?" For the purpose of determining the assessee 's net wealth in assessment proceedings under the Wealth Tax Act in respect of the assessment years 1961 62 and 1962 63, the corresponding valuation dates being March 31, 1961 and March 31, 1962, the assessee claimed a deduction of certain sums representing the estimated liabilities on account of income tax and wealth tax.
The claim was rejected by the Wealth Tax Officer in both assessments.
On appeal by the assessee the Appellate Assistant Commissioner of Wealth Tax allowed a part of the claim.
In the appeal pertaining to the assessment year 1961 62, he allowed a deduction of Rs. 22,679 on account of wealth tax relating to the assessment year 1960 61, Rs.39,692 on account of wealth tax relating to the assessment year 1961 62 and Rs. 2,25,053 on account of income tax for the assessment year 1961 62.
In the appeal pertaining to the assessment year 1962 63, the Appellate Assistant Commissioner allowed the total claim of Rs. 9,02,377 comprising a deduction of Rs 39,692 on account of wealth tax relating to the assessment year 1961 62, Rs. 77,716 on account of wealth tax for the assessment year 1962 63 and the balance on account of income tax for the assessment year 1962 63.
The Revenue appealed to the Appellate Tribunal.
In the appeal for the assessment year 1961 62 in contended inter alia, that the assessee was not entitled to a deduction of the wealth tax liability of Rs. 22,679 in respect of the assessment year 1960 61 because he had disputed the said liability in appeal and, therefore, the deduction was barred by reason of section 2(m) (iii) (a) of the Wealth Tax Act.
Similarly, in the appeal for the assessment year 1962 63, the Revenue urged that the assessee was not entitled to a deduction of the wealth tax liability of Rs. 39,692 for the assessment year 1961 62 as he had disputed that liability in appeal and the deduction was barred by section 2(m) (iii) (a) of the Act.
The Appellate Tribunal did not accept the contention of the Revenue and held that s.2(m) (iii) (a) was not attracted in respect of those liabilities as they had `G not become payable on the relevant valuation dates.
At the instance of the Revenue, a reference, being Wealth Tax Reference No. 20 of 1970, was made to the Gujarat High Court for its opinion on the question of law set forth earlier.
It may be mentioned that another question was also framed in that reference, and that this reference along with several other 301 references were disposed of together by the Gujrat High Court by, its judgment in Commissioner of Wealth Tax vs Kantilal Manilal.1 Against that judgment corresponding special leave petitions were filed by the Revenue in this Court, but all the special leave petitions, except Special Leave Petitions (Civil) Nos 505 and 506 of 1973, arising out of Wealth Tax Reference No. 20 of 1970, were dismissed on the merits, and in respect of these two special leave petitions the grant of special leave was restricted to the consideration of the question set forth earlier.
While dealing with the question whether the provisions of section 2(m) (iii) (a) of the Wealth Tax Act barred the deduction of the wealth tax liabilities claimed by the assessee the High Court held that as the liabilities were not outstanding on the respective valuation dates section 2(m) (iii) (a) was not attracted even though the assessee had challenged in appeal that the liabilities were not payable by him.
In these appeals, Shri S.C. Manchanda, appearing for the Revenue, contends that the High Court has erred insofar as it has held that the wealth tax liabilities were not outstanding on the valuation dates.
His case is that the bar imposed by section 2(m) (iii) (a) operates against the claim to deduction made by the assessee.
Shri S.T. Desai, appearing for the assessee, urges that section 2(m) (iii) (a) is not attracted because no amount of tax was outstanding on the respective valuation dates and in any event, he says, the appeals challenging those liabilities were not pending on the valuation dates, and therefore the further requirement, according to him, of the statute was not satisfied.
Section 2(m) of the Wealth Tax Act provides: "(m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under (z this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than (i) xx xx xx (1) (1973).
, z z 302 (ii) XX XX XX (iii) the amount of the tax, penalty or interest payable in consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits, or the (34 of 1953), the Expenditure Tax Act, , or the (18 of 1958), (a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him; or (b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date " In the process of computing the net wealth, the statute requires the aggregation of the value of all the debts owed by the assessee on the valuation date, except those debts which are specifically described in sub clauses (i), (ii) and (iii).
We are concerned with sub clause (iii) (a).A debt which ordinarily falls within the scope of the substantive provision of section 2(m) cannot be taken into account for the purpose of determining the net wealth if it falls within the term of sub clause (iii) (a) of section 2(m).
Sub clause (iii) (a) speaks the amount of the tax, penalty or interest payable in consequence of any order passed under or in pursuance of any of the tax laws mentioned therein, which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him.
For the assessment years 1961 62 and 1962 63 under reference, the corresponding valuation dates, as we have mentioned earlier are March 31,1961 and March 31, 1962 respectively The claim to deduction in the wealth tax liability for the assessment year 1961 62 relates to Rs. 22,679 representing the wealth tax liability for the assessment year 1960 61.
The assessment order for the assessment year 1960 61 was made on March 24, 1961 but the notice of demand was served on the assessee on April 11, 1961.
It is apparent that the notice of demand was served some days after the valuation date, March 31, 1961.
In the wealth tax assessment of the assessment year 1962 63 the deduction claimed relates to the wealth tax liability of Rs. 39,692 for the assessment year 1961 62.
The assessment order 303 on March 23, 1962 but the notice of demand was served on April 11, 1962 and that notice of demand was also served a few days after the relevant valuation date, March 31,1962.
Therefore, the notice of demand in each case was served after the valuation date had passed.
There was no demand already subsisting on the respective valuation dates.
In order to invoke section 2 (m) (iii) (a) the Revenue must establish that an amount of the tax was outstanding on the valuation date.
An amount of tax is outstanding if it is payable and has remained unpaid.
In other words, if there is a debt due and there has been no payment of the debt.
In a case under the Indian Income Tax Act, 1922, Doorga Prasad vs The Secretary of State, (1) the Privy Council laid down that an income tax liability becomes a debt due when payment of the tax is demanded by a notice issued under section 29 of the Act.
There are three stages in respect of an income tax liability.
The tax liability comes into existence on the last day of the previous year relevant to the assessment year.
Thereafter when the assessment proceedings take place, an assessment order is made quantifying the assessable income and determining the tax payable.
Thereupon, a notice of demand is served for payment of the tax, and the tax then becomes payable and a debt becomes due to the Revenue.
That was the position under the Indian Income Tax Act, 1922 and continues to be the position under the Income Tax Act, 1961.A survey of the provisions of the Wealth Tax Act will demonstrate that in all material respects the scheme of the Wealth Tax Act is in this regard substantially the same as that incorporated in the Income Tax Act.
The provisions for the assessment are of an assessee are contained in sections 14 to 17A of the Wealth Tax Act.
The notice of demand requiring payment of the tax, interest or penalty is issued pursuant to section 30 of the Act.
If the amount remains unpaid within the period specified in the notice the amount of the tax is said to be outstanding.
A question was raised whether for the purposes of attracting section 2(m) (iii) (a) it is not sufficient that the tax liability has 6 accrued and it is necessary that a tax demand should have been made by the assessing authority.
It seems to us that section 2(m) (iii) (a) comes into play only after a demand for payment of tax has been made.
The clause, read in its entirety, speaks of a debt owed by the (1) 304 assessee represented by an amount of tax "payable in consequence of any order" passed under the relevant tax statute "outstanding on the valuation date".
The expression "debt owed" has been held by this Court in Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta, (1) to mean a debt which the assessee is under an obligation to pay and, therefore, it includes both a liability to pay in praesenti as well as a liability to pay in future an ascertainable sum of money.
Both kinds of liabilities are included within the expression "debt owed".
But when we refer to the clause under consideration, it narrows the scope down to a liability which exists in present time.
That is so because the clause speaks of tax outstanding in consequence of an order passed under the relevant taxing statute.
As discussed earlier, tax becomes payable in consequence of such order when a notice of demand is served on the assessee.
In the present case, it is clear that as the notices of demand respecting the wealth tax liability of Rs 22,679 and Rs. 39,692 were served on the assessee subsequent to the valuation dates, it can not be said that on the respective valuation dates the amounts of tax were outstanding.
In the result a material requirement of section 2 (m) (iii) (a) is not satisfied and therefore that provision cannot be invoked by the Revenue.
We now propose to consider the other point in controversy.
As is apparent.
if the Revenue desires to invoke section 2 (m) (iii) (a), it must establish not only that the amount of the tax, penalty or interest envisaged in that provision is outstanding on the valuation date but it must also show that the amount is claimed by the assessee in appeal, revision or other proceeding as not being payable by him.
The question is whether it is a necessary requirement of the provision that the appeal, revision or other proceeding should be pending on the valuation date itself or it suffices that the appeal, revision or other proceeding is filed subsequent to the valuation date.
In the present case the appeal against the wealth tax assessment order for the assessment year 1960 61 was filed on May 9, 1961, and the appeal against the wealth tax assessment order for the assessment year 1961 62 was filed on May 9, 1962.
Both the appeals were filed, therefore, after the respective valuation dates, March 31, 1961 and March 31, 1962 corresponding to the assessment years 1961 62 and 1962 63 (1) ; 305 under reference.
But for section 2(m) (iii) an amount of a tax outstanding on the valuation date would constitute a debt owed by the assessee on the valuation date, and the assessee would be entitled to claim its deduction in the process of computing his net wealth.
Parliament, however, intended that if the amount of the tax was challenged by the assessee as not being payable by him by recourse to any of the statutory remedies prescribed in the relevant Act, such 1 claim to deduction would be barred.
Plainly, in order to give full effect to that intent it is immaterial whether the statutory remedy is being availed of on the valuation date or has been taken thereafter.
A challenge by the assessee that the amount outstanding is not payable by him is sufficient to bar his claim to deduction whether the challenge is subsisting on the valuation date or is initiated after the valuation date has passed.
Accordingly, we are of opinion that the appeals in the present case, though filed subsequent to the respective valuation dates, would nonetheless have sufficed to bring the second requirement of section 2(m)` (iii) (a) into operation.
The contrary view in respect of section 2 (m) (iii) (a) adopted by the Madras High Court in Late P. Appavoo Pillai vs Commissioner of Wealth Tax, Madras(4) appears to us to be incorrect.
However, as in order to invoke the bar prescribed by section 2 (m) (iii) (a), it is necessary for the Revenue to establish that both requirements are satisfied, that is to say, that an amount of the tax is outstanding on the valuation date and further that the amount is claimed by the assessee in an appeal as not being payable by him, and the Revenue has been unable to show that in the present case the sum of Rs. 22,679 and Rs. 39,692 representing the wealth tax liabilities for the assessment years 1960 61 and 1961 62 were outstanding on the respective valuation dates corresponding to the assessment year under reference, the Revenue must fail.
In the result, the appeals are dismissed.
S.R. Appeals dismissed.
| For the assessment years 1961 62 and 1962 63, the corresponding valuation dates of which were March 31, 1961 and March 31, 1962, assessment orders were made under the Wealth Tax Act on March 24, 1961 and March 23, 1962 respectively while the notice of demands were served on the assessee on April 11, 1961 and April 11, 1962 respectively.
Against the said notices of demand the assessee preferred appeals on May 9, 1961 and May 9, 1962 respectively.
For the purpose of determining the assessee 's net wealth, the assessee 's claim for a deduction of certain sums representing the estimated liabilities on account O? ' income tax and wealth tax was rejected in both assessments by the Wealth Tax Officer.
On appeal by the assessee, the Appellate Assistant Commissioner of Wealth Tax allowed a part of the claim.
In appeal before the Appellate Tribunal, the Revenue contended that since the assessee had disputed the wealth tax liability of Rs. 22,679/ in respect of the assessment year 1960 61 and the sum of Rs. 39,692/ in respect of the assessment year 1961 62, he was not entitled to a deduction of the same, being barred by reason of the provisions of section 2(m) (iii) (a) of the Wealth Tax Act.
The Tribunal rejected the said contention and held that section 2 (m)(a) was not attracted as the tax had not become payable on the relevant valuation dates.
The Wealth Tax References made at the instance of the Revenue were decided in favor of the assessee by the High Court of Gujarat by its common judgement in Commissioner of Wealth Tax vs Kantilal Manilal reported in The present appeal by special leave arises therefrom.
Dismissing the appeal, the Court ^ HELD: 1.1 In order to invoke the bar prescribed by Section 2(m) (iii) (a) of the Wealth Tax Act it is necessary for the Revenue to establish that both 298 requirements therein are satisfied, that is to say, that an amount of the tax is outstanding on the valuation date and further that the amount is claimed by the assessee in an appeal as not being payable by him.
[302E F] 1.2 An amount of tax is outstanding if it is payable and has remained unpaid.
In other words, if there is a debt due and there has been no payment of the debt.
There are three stages in respect of an income tax liability.
The tax liability comes into existence on the last day o f the previous year relevant to the assessment year.
Thereafter when the assessment proceedings take place an assessment order is made quantifying the assessable income and determining the tax payable.
Thereupon, a notice of demand is served for payment of the tax, and the tax then becomes payable and a debt becomes due to the Revenue.
A survey of the provisions of the Wealth Tax Act contained in Sections 14 to 17 and Section 30 makes it clear that in all material respects the scheme of the Wealth Tax Act is in this regard substantially, the same as that incorporated in the Income Tax Act.
The notice of demand requiring payment of the tax, interest or penalty is issued pursuant to Section 30 of the Act.
If the amount remains unpaid within the periods specified in the notice the amount of the tax is said to be outstanding [303D F] 1.3 Section 2(m)(iii)(a) of the Wealth Tax Act comes into play only after a demand for payment of tax has been made.
The clause, read in its entirety, speaks of a debt owed by the assessee represented by an amount of tax "payable in consequence of any order" passed under the relevant tax statute and "outstanding on the valuation dates." [303H; 304A] 1.4 The expression "debt owed" is a debt which the assessee is under an obligation to pay and, therefore, it includes both a liability to pay in present as well as a liability to pay in future an ascertainable sum of money.
Both kinds of liabilities are included within the expression "debt owed".
But Section 2(m)(iii)(a) narrows the scope down to a liability which exists in present time because the clause speaks of tax outstanding in consequence of an order passed under the relevant taxing statute.
[304B C] 1.5 In the present case, the notice of demand in each case was served after the valuation date had been passed.
There was no demand already subsisting on the respective valuation dates.
As the notices of demand respecting the wealth tax liability of Rs. 22,679 and Rs. 39,692 were served on the assessee subsequent to the valuation dates, if cannot be said that on the respective valuation dates the amount of tax were outstanding.
In the result a material requirement of Section 2(m) (iii) (a) is not satisfied and therefore, it cannot be invoked by the Revenue.
[304D E] Commissioner of Wealth Tax vs Kantilal Manilal, , approved.
Doorga Prasad vs The Secretary of State, , quoted with approval 299 Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central), Calcutta, ; , followed.
1.6 The appeals in the present case, though filed subsequent to the respective valuation dates, would none the less have sufficed to bring the second requirement of section 2 (m) (iii) (a) into operation.
But for Section 2 (m) (iii) (a) an amount of a tax outstanding on the valuation date would constitute a debt owed by the assessee on the valuation date, and the assessee would be entitled to claim its deduction in the process of computing his net wealth.
Parliament, however, intended that if the amount of the tax was challenged by the assessee as not being payable by him by recourse to any of the statutory remedies prescribed in the relevant Act, such claim to deduction would be barred.
Plainly, in order to give full effect to that intent it is immaterial whether the statutory remedy is being availed of on the valuation date or has been taken thereafter.
A challenge by the assessee that the amount outstanding is not payable by him is sufficient to bar his claim to deduction whether the challenge is subsisting on the valuation date or is initiated after the valuation date has passed.
[305 D; A C] Late P. Appauoo Pillai vs Commissioner of Wealth Tax, Madras, overtuled.
|
Civil Appeal No. 974 of 1975.
(Appeal by Special Leave from the Judgment and Order dated 25 6 1975 of the Gujarat High Court in Spl.
Civil Appln.
No. 1223/74).
D.V. Patel and S.S. Khanduja, for the Appellant.
885 U.R. Lalit, P.H. Parekh and Miss Manju jatley, for Respondent No. 1.
M.N. Shroff, for Respondent No. 2.
The Judgment of the Court was delivered by GUPTA, J.
The appellant was elected a councillor of Anjar municipality in Kutch District sometime in 1972, and later, President of the municipality.
On June 30, 1973, after he had been elected President, the appellant applied to the chief officer of the municipality for allotting to him a 'plot of land admeasuring 18 feet x 16 feet situate in the town of Anjar.
In his application the appellant stated that he wanted the plot for running a flour mill temporarily until he got a suitable plot from the Govern ment.
By his order dated July 5, 1973 the chief officer granted the request permitting the appellant to hold the land on payment of rent on condition, inter alia, that the land should be vacated whenever 'the municipality so or dered.
The first respondent who is a resident of Anjar applied to the Collector of Kutch under section 38 of the Gujarat Municipalities Act, 1963 (referred to as the Act hereinafter) for declaring that appellant 's office has "become vacant" as he has disabled himself from continuing as a councillor by taking lease of the land from the munici pality.
The Collector having heard the parties held that the appellant had got the land by misusing his position as President of the municipality incurring thereby the disqual ification referred to in section 38(1)(b)(i) of the Act which disabled him from continuing to be a councillor and declared that his office had become vacant.
The appellant before us preferred an appeal under section 38(4) of the Act to the State Government against the Collector 's order.
The State Government allowed the appeal and dismissed the application of the first respondent.
It was held that the land was allotted to the appellant in accordance with the by laws of the municipality and that there was no evidence of the appellant exerting any influence on the chief offi cer.
The first respondent challenged the order of the State Government by filing a writ petition in the Gujarat High Court.
The learned Judge of the High Court who heard the petition allowed the same, quashed the order of the State Government, and restored the order made by the Collector.
This appeal by special leave is directed against the judg ment of the High Court allowing the writ petition.
The appeal turns on section 38(1)(b)(i) of the Act which reads as follows: "38.
Disablilties from continuing as a councillor.
(1) If any councillor during the term for which he has been elected or nomi nated (a) x x x (b) acts as a councillor in any matter (i) in which he has directly or indirectly, by himself or his partner, any such share or interest as is de:scribed in clause (i), (ii), (iii), (v) or (vii) of sub section 886 (3) of section 11, whatever may be the value of such share or interest, or . . . . . he shall subject to the provisions of sub section (2) be disabled from continuing to be a councillor and 'his office shall become vacant.
" The provisions of sub section (2) are not relevant for the present purpose.
Section 11 of the Act enumerates, inter alia, the "gener al disqualifications for becoming a council lor" and specifies the cases to be treated as exceptions.
Section 11(2)(c) disqualifies a person from being a councillor "who, save as hereinafter provided, has directly, or indi rectly, by himself or his partner any share or interest in any work done by order of a munic ipality or in any contract or employment with or under or on behalf of a municipality '.
Sub section 3(A)(i) of section 11 which con tains an exception to this rule provides: "(3) A person shall not be deemed to have incurred disqualification (A) under clause (c) of sub section (2) by reason of his (i) having any share or interest in any lease, sale or purchase ;of any immovable property or in any agreement for the same." Thus a person is disqualified from becoming a councillor if he. has a direct or indirect interest in any contract with the municipality, but having any share or interest in any lease of immovable property or in any agreement for the same is not a disqualification.
Section 38(1)(b) (1),quoted above however provides that if any councillor during the term for which he has been elected "acts as a councillor" in acquiring a direct or indirect share or interest in any lease, he shall be disabled from continuing to be a council lor.
We have noted earlier that section 11(3)(A)(i) is an exception to.
the general disquali fication under section 11(2) (c), section 38(1) (b) (i) appears to be an exception to that exception.
This means that though having an inter est in any lease from municipality is not a disqualification for becoming or continuing as a councillor, if the council lor "acts as a councillor" in getting such lease from the municipality, he shall be 'disabled from continuing to be a councillor.
The president of the municipality being a council, lot, this provision also applies to him.
The ques tion therefore is whether the appellant in this case acted as a councillor in the matter of allotment of the land to him.
Section 275 of the Act authorises the municipality to make bylaws not inconsistent with the Act.
The Anjar municipality has framed by laws regulating the conditions on which permission may be given for the temporary occupa tion of public streets or land.
An English translation of by law 4 of these by laws which are in Gujarati reads: "Permission will be given for the, use of public road or land within the municipal limits but not of private land for temporary period for the matters mentioned in Schedule 1 hereto on advance payment of fee as stated in the Schedule.
887 Any person who intends to occupy such land shall have to make a written application to the chief officer.
But to give such permis sion or not shall be within the absolute discretion of the chief officer.
" Schedule 1 mentioned here prescribes the fees payable by the applicant on such permission being granted.
The chief officer in this case permitted the appellant to occupy the land in question in exercise of the power given to him by this by law.
The High Court found that the appellant acted as a councillor and President of the municipality in having the plot allotted to him mainly upon the provisions of sections 49 and 45 of the Act.
Section 49 defines the power and duties of the chief officer.
Sub section (1)(a) of 'sec tion 49 which is relevant in this context is as follows: "49.
Power and duties of chief officer. (1) The chief officer shall (a) subject to the general control of the president watch over the financial and executive administration of the municipality and perform all the duties and exercise all the powers specifically imposed or conferred upon him by, or delegated to him under, this Act.
" Section 45 enumerates the functions of the President; one of the functions is to exercise supervision and control over the acts and proceedings of all officers and servants of the municipality in matters of executive administration.
The High Court after referring to these provisions observed that the chief officer being under the general control of the president in all matters of executive ,administration, must have felt himself bound to grant the appellant s applica tion.
The High Court referred to an earlier application for the plot made by one Karan Kanji which the chief officer had rejected.
There is also a finding that by law 4 did not permit the use of the plot for the purpose for which the appellant had applied and that the chief officer went out of his way to help his president.
The High Court concluded that if the appellant had not been a councillor of the municipality and its president, his application would have met with the same fate as Karan Kanji 'section The legality of the chief officer 's order is not however an issue in this case, and the question whether or not the intended use of the plot by the appellant was beyond the scope of by law 4 need not detain us.
According to the High Court it was only because the appellant held the office of president 'of the municipality that the chief officer allowed his application.
This may or may not be true, but it is not a matter relevant to the real question that arises for consideration in this case.
Section 38(1)(b)(i) disables a councillor from continuing as such if he "acts as a councillor" in the matter of allotment of any land to himself, there is no bar in the Act to a coun cillor getting a lease of the land from the municipality as would appear from section 11(3)(A)(i).
It is only in a case where he acts as a councillor in getting the lease that he is disqualified.
There is nothing in the record of this case to show that the appellant had acted as a councillor to have the plot allotted to him 888 self. 'Even if the chief officer was influenced by the fact that the applicant before him was president of the munici pality, that would not attract section 38(1)(b)(i).
It is true that section 45 confers a general power of supervision and control on the president over the acts of all officers of the municipality and section 49, which enumerates the power and duties of chief officer, also makes him subject to the general control of the president in the discharge of these powers.
But the general power of supervision con ferred on the president does not, in our opinion,imply that in every case where he applies for a lease, which he is entitled to do as section 11(3)(A) (i) indicates, he should be deemed to have "acted" within the meaning of section 38(1)(b), otherwise, the president of a municipality under this Act, by virtue of his office would be disentitled altogether from applying for permission to use any land of the municipality.
If this were the correct position then there was no point in limiting the disqualification contemplated in section 38(1) (b) (i) to cases where the councillor acts as a councillor.
The words "acts as a councillor" cannot be treated as redundant.
In our view the councillor acts as a councillor within the 'meaning of section 38(1)(b) when he performs any of the functions which under the Act he is required to perform.
An allegation of misuse of his position against a councillor would not at tract the disability under section 38(1) (b)(i) unless it was shown furher that he has acted as a councillor in the matter.
In view of the clear provision of section 38(1)(b)(i) we do not find it possible to support the im pugned judgment.
The appeal is therefore allowed and the judgment of the High Court reversing the decision of the State Government is set aside.
In the circumstances of the case we make no order as to costs.
P.B.R. Appeal allowed.
| In May 1967 a case was lodged against the respondent and a Major of the Indian Army who was retired in 1966, alleging that the Major, along with the respondent, had committed offences of conspiracy of criminal misconduct by a public servant in dishonestly abusing his position as a public servant, under section 5(2) of the Prevention of Corruption Act, 1947.
When the case, which was allotted to the Fourth Additional Special Court under section 4(.2) of the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, came up for hearing the respondent filed a writ petition challenging its jurisdiction to try the case.
The order of allotment to the Special Court was held illegal by the High Court on the ground that the Special Court had no jurisdiction to try a person who had ceased to be a public servant on the date the Court was required to take cognisance of the offence since it could not be said that in certain respects he was a public servant and in certain others he was not.
It was contended on behalf of the respondent that (1) since the case involved interpretation of article 14 of the Constitu tion it should be referred to a larger Bench in view of Art 144(A) of the Constitution; (2) in view of the definition of public servant contained in section 21 IPC, a public servant is one who is in office and not one who has ceased to be in office; (3) in view of section 10 of the Bengal Act the Special Court had no jurisdiction to try the offence; and (4) the respondent, not being a public servant, is outside the provisions of the Bengal Act and the Prevention of Corrup tion Act.
Allowing the appeal.
HELD: (1) There is no substance in the contention that the appeal should be referred to a larger Bench.
The plea of applicability of article 14 on the basis of the judgment in S.A. Venkataraman vs The State is wholly misconceived.
[764 G] (a) In view of the decision in Venkataraman 's case there is no warrant for including in one category public servants in office and public servants who have ceased to be so.
These two classes of public servants are not similarly situated as has been clearly pointed out in C.R. Bansi vs State of Maharashtra [19711 3 S.C.R. 236.
[764 E] (b) It cannot be argued that the decision in Venkatara man 's case is violative of article 14 of the Constitution.
That decision only says that section 6 of the Act is not applica ble to a public servant if at the time of taking cognizance by the Court he ceases to be so.
Because a particular section is not applicable to a public servant after he has ceased to be in office, the question of the Act being violative of article 14 will not arise.
This Court has clearly placed a public servant, who has ceased to be in office, in a separate category and the classification has held the field all these years without demur.
[764 F G] (c) The proviso to section 4(1) of the Bengal Act cannot attract article 14.
By this proviso the Special Court, when trying a schedule offence finds that some other offence has also been committed, and the trial of the same in one trial is permissible under the Cr.
P.C., it may try such a charge.
Under section 4(1) of the Bengal Act a scheduled offence which includes an offence under section 5(2) of 759 the Prevention of Corruption Act as also conspiracy to commit that offence shall be triable by Special Courts only.
No other court can try those offences.
[764 H, 765 B C] The State of West Bengal vs Anwar Ali Sarkar [1952] S.C.R. 284 held inapplicable.
(2) Section 21 IPC does not afford a true test in deter mining the present controversy.
The crucial date for the purpose of attracting the provisions of the Act as well as those of the Bengal Act is whether the offence had been committed by a public servant within the definition of section 21 IPC.
The date for determining the offence is the date of the commission of the offence when the person arraigned must be a public servant.
Section 6 makes a clear distinction between cognizance of an offence and alleged commission of an offence.
The date of sanction is necessarily subse quent to the date of commission of the offence and some times far remote from that date.
Retirement, resignation, dismissal or removal of a public servant would not wipe out the offence which he had committed while in service.
Under section 6(1), as in the case of section 190(1) Cr.
P.C., the Court takes cognizance of an offence and not an offender.
[765 E G] Raghuban Dubey vs State of Bihar ; referred to.
(3) Section 10 of the Bengal Act which provides that the provisions of the Prevention of Corruption Act shall apply to trials under the Bengal Act are clearly attracted.
Section 6 is interpreted by this Court not to apply to a public servant who has ceased to be in office.
That would not affect the interpretation of section 10 of the Bengal Act.
[766 A B] (4) There is no merit in the submission that the special Court cannot try the offence under section 5(2) of the Act read with section 120B IPC against the respondent.
Even under the Prevention of Corruption Act, an outsider can be prosecuted under section 5(3) of the Act when a person habitually commits an offence punishable under section 165A, IPC.
Section 165A which provides that "whoever abets an offence punishable under section 161 or section 165, whether or not that offence is committed in consequence of the abetment, shall punished . is clearly "applicable to an outsider who may abet a public servant.
Item 8 of the Schedule to the Bengal Act mentions any conspiracy to commit or any attempt to commit or any abetment of any of the offences specified in items 1, 2. 3 and 7.
It is clear that under item 8 of the Schedule an outsider can be tried alongwith a public servant if the former abets or commits an offence of conspiracy to commit an offence under section 5 of the Prevention of Corruption Act which is mentioned in item 7 to the Sched ule.
[766 C E]
|
No. 65 of 1959.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
B. D. Sharma, for the petitioners.
H. N. Sanyal, Additional Solicitor General of India, B. Ganapathy Iyer and P. M. Sen, for the respondents.
April 10.
The Judgment of the Court was delivered by DAS GUPTA, J.
This application under article 32 of the Constitution is for the protection of fundamental rights under article 19(1)(f) and (g), article 31 and article 14 of the Constitution.
The second and the third applicants are merchants who used to import considerable quantities of glass chatons upto 1957.
The first applicant is an Association of merchants, some of whom were importers and some the actual users of glass chatons.
Import of glass chatons which form an important part of the raw materials for the manufacture of glass bangles and other similar articles of wear could, be made only on licences granted by licensing authorities.
Since 1955 the matter has been regu lated by the Imports (Control) Order, 1955.
This Order which was made by the Central Government in exercise of powers conferred by sections 3 and 4 A of the Import and Export Control Act, 1947, prohibited the import of a large number of goods including inter alia glass chatons, except under and, in accordance with a licence, granted on application by the licensing 864 authorities under the Act.
Policy statements are made from time to time by the Government of India, indicating the policy for the issue of Import licences.
The policy as regards the import of glass chatons for the period January, 1957 to the end of March, 1958 was that the import was totally prohibited. ' Since April 1958, the policy as laid down is that import was permitted only under the Export Promotion Scheme.
It appears that in ' view of this policy statement no application was made at all by the second or third applicants or other merchants for the import of glass chatons, in 1957 or thereafter and no licence was issued to them.
Licences were however issued in favour of the State Trading Corporation, for the import of glass chatons of the value of five lakhs of Rupees, for the period April September, 1958,and again, for the import of these goods of the value of Rs. 1,25,000 for the period October, 1958 to March, 1959.
The present application was made on April 27, 1959.
The prayer is that respondents 1 and 2 i.e.
, the Union of India and the Chief Controller, Imports, should be directed (i) to "forbear from giving the State Trading Corporation any preference over the petitioners, in the grant of permits", (ii) not to create a monopoly in favour of the State Trading Corporation, (iii) to cancel the import permits already granted in favour of respondent No. 3 the State Trading Corporation and the petitioners also prayed that the.
respondent No. 3 should be directed not to import on the basis of import licences already granted.
It has to be mentioned at once that the periods of the import permit "already granted" as referred to in the petition has already expired and consequently, the last two prayers mentioned above cannot possibly be granted.
There was no application at all by the second and the third applicants, or any of the merchants who form the association, the 1st appellant for the issue of any import licences; there can be no question therefore of respondents 1 and 2 being given any preference over the petitioners in the grant of permits Nor is there, as far as can be made out, any scheme to issue fresh licences in favour of the 865 State Trading Corporation so that apart from what has already happened there is no question of any future action "to create a monopoly in favour of the State Trading Corporation".
Therefore the petitioners cannot be given any relief on the present application.
Learned Counsel however submitted that so long as Para. 6(h) of the Imports (Control) Order, 1955, remains it will be useless for his clients to make any application for licences.
6 lays down a number of grounds on which the Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any other licensing authority not to grant a licence.
The ground mentioned in the clause (h) is "if the licensing authority decide to canalise imports and the distribution thereof through special or specialised agencies or channels".
Learned Counsel has argued that this provision in clause (h) of Para.
6 is void being in contravention of article 19(1)(f) and (g), and article 31 of the Constitution.
He also urged that to the extent section 3 of the Imports and Exports Control Act, 1947, permits the Central Government to make an order as in Para.
6(h) section 3 itself is bad.
In view of these submissions the learned Counsel was permitted to urge his contentions against the validity of Para.
6(h) of the Imports (Control) Order, 1955, and also his limited attack against the validity of section 3 of the Imports and Exports Control Act, 1947.
The requirement as regards any goods that they cannot be imported except and in accordance with a licence is undoubtedly a restriction on the right to carry on trade in such goods and also on the right to acquire property.
Learned Counsel does not however contend that by itself this requirement of section 3 of the Imports and Exports Control Act is an unreasonable restriction.
His attack is only against the further restriction which follows from the provisions in section 6(h) of the Order that the Central Government or the Chief Controller of Imports and Exports may refuse to grant a licence or direct any licensing authority not to grant licences "if the licensing authority decides to canalise imports and the distribution thereof 866 through special or specialised agencies or channels".
The argument is that the further restriction.
on the right to carry on trade and the right to acquire property that results from this provision is totally unreasonable.
It is obvious that if a decision has been made that imports shall be by particular agencies or channels the granting of licence to any applicant outside the agency or channel would frustrate the implementation of that decision.
If therefore a canalization of imports is in the interests of the general public the refusal of imports licences to applicants outside the agencies or channels decided upon must necessarily be held also in the interests of the general public.
The real question therefore is: Is the canalization through special or specialized agencies or channels in the interests of the general public.
A policy as regards imports forms an integral part of the general economic policy of a country which is to have due regard not only to its impact on the internal or international trade of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of friendship, neutrality or hostility with other countries It may be difficult for any court to have adequate materials to come to a proper decision whether a particular policy as regards imports is, on a consideration of all the various factors involved, in the general interests of the public.
Even if the necessary materials were available it is possible that in many cases more than one view can be taken whether a particular policy as regards imports whether one of heavy customs barrier or of total prohibition or of entrustment of imports to selected agencies or channels is in the general interests of the public.
In this state of things the burden on the person challenging that the government of the country is not right in its estimate of the effects of a policy as regards imports in the general interests of the public will be very heavy indeed and when the Government decides in respect of any particular commodity that its import should be by a selected.
867 channel or through selected agencies the Court would proceed on the assumption that that decision is in the interests of the general public unless the contrary.
is clearly shown.
Consequently, we are unable to accept the argument that a decision that imports shall be canalised, is per se not a reasonable restriction in the interests of the general public.
We wish to make it clear that while the decision that import of a particular commodity will be canalised may be difficult to challenge, the selection of the particular channel or agency decided upon in implementing the decision of canalisation may well be Challenged on the ground that it infringes article 14 of the Constitution or some other fundamental rights.
No such question has how.
ever been raised in the present case.
The attack on the validity of Para. 6(h) of the Imports Control Order, 1955, therefore, fails.
The contention that section 3 of the Imports and Exports Control Act, 1947, is bad to the extent that it permits the government to make an order as in Para.
6(h) of the Imports Control Order, 1955, consequently also fails.
The attack on this provision in Para. 6(h) of the order that it contravenes article 31 is not even plausible.
Assuming for the purpose of this case that the right to carry on trade is itself property, it is obvious that there is no question here of the acquisition of that right.
What happens if a licence is refused to an applicant under Para.
6(h) is that the applicant can no longer carry on trade in these goods.
When licence is granted to the agencies or channels through which imports have been decided to be canalised, these agencies or channels 'can carry on trade but this is not because of an acquisition by these agencies or channels of the right to carry on trade which the unsuccessful applicants for licence had.
Article 31 of the Constitution has therefore no application.
It was next urged that the grant of licences to the third respondent, the State Trading Corporation of India while none has been granted to the second and the third petitioners has resulted in a denial of equal protection of laws guaranteed by article 14 of the Constitution.
If these petitioners had applied for licences 868 trader the Export Promotion Scheme and still the State Trading Corporation had been preferred it would perhaps have been necessary to consider whether the preference accorded to the Corporation was based on reasonable and rational grounds.
It is clear however that though it was open to these petitioners to apply for licences under the Export Promotion Scheme they made no application for licence thereunder.
There is to scope therefore for the argument that they have en discriminated against.
In the result, we are of opinion that the petitioners are not entitled Iwo any relief under article 32 of the Con. stitution.
The petition is accordingly dismissed with costs.
Petition dismissed.
| Section 15 of the Assam Sales Tax Act, 1947, as originally enacted, provided that in calculating the net turnover of a registered dealer for tax purposes, all sales made to another registered dealer of goods specified in the latter 's certificate of registration were to be excluded from the gross turnover, if the goods were brought for resale.
In 1951, the section was amended by the addition of the words "in the State" after the word " resale", as a result of which the exclusion was confined only to sales of goods for resale in the State.
Rule 80 was framed to give effect to the amendment.
The petitioner, a registered dealer in Assam, and whose business consisted mainly of buying tea in Assam and selling it either in Assam or in Calcutta, chal lenged the legality of the amendment on the ground that the result of the amendment was that tax could be levied on interState sales and that, therefore, it contravened article 286(2) of the Constitution of India.
Held: (1) that a sale of goods to a dealer within the State who purchased them for the purpose of selling them to dealers outside the State, and who, in fact, so sold them, would not make it a sale in the course of inter State trade as the two sales were distinct and separate.
The first sale was an intra State sale and a tax imposed thereon did not offend article 286(2) of the Constitution.
Endupuri Narasimham vs State of Orissa, ; , followed.
(2) that section 15 of the Assam Sales Tax Act, 1947, and Rule 80 framed under that Act were not ultra vires article 286(2) of the Constitution.
The object of section 15 of the Act was to avoid taxation at multiple points and the amendment to that section in 1951 or Rule 80 did not enable the levy of tax on sales in the course of inter State trade twice.
Such sales were expressly saved from tax by the operation of article 286(2) and section 3(1)(A)(iii) of the Act.
Once those sales were outside the charging section there was no need to re enact that prohibition in section 15 which was a machinery section and would stand cut down by the limitation placed by the charging section and the Constitution. 987
|
Appeal No. 17 of 1954.
Appeal by Special Leave from the Judgment and Order dated the 11th day of June 1951 of the Punjab High Court in Civil Reference No. 2 of 1951.
Hardyal Hardy and Sardar Singh, for the appellant.
C. K. Daphtary, Solicitor General of India (G. N. Joshi and R. H. Dhebar, with him) for the 'respondent.
February 21.
The Judgment of the Court was delivered by VENKATARIAMA AYYAR J.
The appellant is a firm carrying on business at Ludhiana in the Punjab.
The Income tax Officer assessed its income for 1945 1946 at Rs. 71,186, and on 17 9 1947 a notice of demand was served on it for Rs. 29,857 6 0 on account of income tax and super tax.
The appellant preferred an 168 appeal against the assessment, and it was actually received in the office of the Appellate Assistant Commissioner on 5 11 1947.
It was then out of time by 19 days; but the appeal was registered as No. 86, and notice for hearing under section 31 was issued for 13 12 1947, and after undergoing several adjournments, it was actually heard on 1 10 1948.
For the year 1946 1947, the Income tax Officer assessed the income of the firm at Rs. 1,09,883, and on 29 9 1947 a notice of demand was served on it for Rs. 51,313 14 0 on account of income tax and super tax.
The appellant preferred an appeal against this assessment, and it was actually received in the office of the Appellate Assistant Commissioner on 5 11 1947, and it was then 7 days out of time.
It was registered as No. 89, and notice for hearing under section 31 was issued for 24 6 1948.
Eventually, it was heard along with Appeal No. 86 on 1 10 1948.
At the hearing, the Department took the objection that the appeals were presented out of time, and were therefore liable to be dismissed.
The appellant prayed for condonation of the delay on the ground that following on the partition of the country the conditions were very unsettled, that curfew order had been promulgated and was in force, and that the post office did not accept registered letters, and that the traffic on the Grand Trunk Road was closed., and that in view of these exceptional circumstances, it bad sufficient cause for not presenting the appeals in time.
On 31 12 1948 the Appellate Assistant Commissioner passed orders in both the appeals, holding that there was not sufficient ground for condoning the delay, and rejecting them in limine.
These orders were purported to be passed under section 31 read along with section 30(2).
Against these orders, the appellant preferred appeals under section 33 of the Act to the Appellate Tribunal which by its order dated 4 4 1950 dismissed them on the ground that the orders of the Assistant Commissioner were in substance passed under section 30 (2) and not under section 31 and that no appeal lay against them under section 33, On the applica 169 tions of the appellant, the Tribunal referred under section 66(1) of the Income Tax Act the following question for the decision of the High Court of Punjab: "Whether in the circumstances of the case appeals lay to the Tribunal against orders of the Appellate Assistant Commissioner dismissing the appeals against the assessments for the years 19451946 and 1946 1947 in limine".
The reference was beard by Khosla and Harnam Singh JJ., who held following an earlier decision of that court in Dewan Chand vs Commissioner of Incometax(1) that the orders of the Appellate Assistant Commissioner were under section 30(2) and not appealable under section 33.
Certificate to appeal to this Court against this order having been refused by the High Court, the appellant applied for and obtained leave to appeal to this Court under article 136 of the Con stitution, and that is how the appeal comes before US.
The provisions of the Act bearing on the question may now be referred to.
Section 30(1) confers on the assessee a right of appeal against orders passed under the sections specified therein.
Section 30(2) provides that the appeal shall ordinarily be presented within thirty days of the order of assessment, but the Appellate Assistant Commissioner may admit an appeal after the expiration of the period if he is satisfied that the appellant bad sufficient cause for not presenting it within that period.
Section 30(3) provides that "the appeal shall be in the prescribed form and shall be verified in the prescribed manner".
Section 31(1) enacts that "the Appellate Assistant Commis sioner shall fix a day and place for the hearing of the appeal, and may from time to time adjourn the hearing".
Section 31(3) specifies the orders that may be passed in appeals according as they are directed against orders passed under the one or the other of the sections of the Act which are specified in section 30(1).
When the appeal is against an order of assessment under section 23 and this is what we are con (1) (1951] 20 , 170 cerned with in this appeal it is provided in section 31(3), clauses (a) and (b) that in disposing of the appeal the Appellate Assistant Commissioner may (a) confirm, reduce, enhance or annul the assessment, or (b) set aside the assessment and direct the.
Incometax Officer to make a fresh assessment after making such further enquiry as the Income tax Officer thinks fit.
Section 33(1) enacts that, "Any assessee objecting to an order passed by an Appellate Assistant Commissioner under section 28 or section 31 may appeal to the Appellate Tribunal within sixty days of the date on which such order is communicated to him".
Stated succinctly, section 30 confers a right of appeal on the assessee, section 31 provides for the hearing and disposal of the appeal, and section 33 confers a right of further appeal against orders passed under section 31, Now, on these provisions the question is whether an order dismissing an appeal presented under section 30 as out of time is one under section 30(2) or under section 31 of the Act.
If it is the former, there is no appeal provided against it; if it is the latter, it is open to appeal under section 33.
On this question, there has been a sharp conflict of opinion among different High Courts and even among different Benches of the same High Court.
The Bombay High Court has held that when an appeal is presented out of time, and there is no order of condonation of delay under section 30(2), there is, in law, no appeal before the Appellate Assistant Commissioner, and that an order by him rejecting the appeal does not fall within section 31 and is not appealable: Commissioner of Income tax vs Mysore Iron and Steel Works(1) and K. K. Porbunderwalla vs Commissioner of Income tax(2); but that if the appeal is admitted after an order of condonation is made under section 30(2), an order subsequently passed dismissing it on the ground of limitation would be one under section 31 and would be appealable under section 33 and the result will be the same even when the appeal is admitted without (1) .[1949] , (2) 171 any order of condonation under section 30(2): Champalal A sharam vs Commissioner of Income tax(1).
The High Court of Allahabad has also taken the same view, and held that an order refusing to condone delay and rejecting an appeal before it was admitted was not one under section 31 and was not appealable: Vide Shivnath Prasad vs Commissioner of Income tax, Central and U. P.(3) and Municipal Board, Agra vs Commissioner of Income tax, U. P.( 3 ); but that ail order dismissing the appeal as time barred after it had been admitted was one under section 31 and was appeable: Mohd. Nain Mohd. Alam vs Commissioner of Income tax(1).
The High Court of Punjab has held following Shivnath Prasad vs Commissioner of Incometax, Central and U. P.(2) and Commissioner of Incometax vs Mysore Iron and Steel Works(5) that when the Appellate Assistant Commissioner declines to condone delay and rejects the appeal, it is one under section 30(2) and not appealable.
It has further held that even if the appeal bad been admitted without an order of condonation and dismissed at the hearing on the ground of limitation, it would not be under section 31, because the scheme of the Act contemplated that an order to be passed under that section must relate to the merits of the assessment.
It is on this decision that the judgment under appeal is based It may be mentioned that the decision in Dewan Chand vs Commissioner of Income tax(6) was dissented from in a recent decision of the Punjab High Court in General Agencies vs Income tax Commissioner(7) .
In Commissioner of Income tax vs Shahzadi Begum the Madras High Court has held that an order declining to excuse delay and rejecting the appeal is one under section 31, whether it is made before the appeal is admitted or after, and that an appeal which is filed out of time is, nonetheless, an appeal for purposes of section 31, and that an order dismissing it would be appealable under section 33.
In Gour Mohan (1) , (3) (5) (7) A.I R. 1956 Punjab 26.
(2) (4) (6) (8) 172 Mullick vs Commissioner of Agricultural Income tax(1), the Calcutta High Court has, after a full discussion, come to the conclusion that an order of dismissal on the ground of limitation at whatever stage was one which fell under section 31.
It is unnecessary to refer to the views expressed in decisions of other High Courts, as the point now under discussion did not directly arise for decision therein.
The question is which of these views is the correct one to adopt.
We start with this that under section 33 it is only orders under section 31 that are appealable.
The question therefore narrows itself to this whether an order declining to condone delay and dismissing the appeal as barred by time is an order under section 31.
It will be, if it is passed in appeal against an order of assessment, and is one which affirms it.
Now, the conflicting views expressed by the several High Courts centre round two points: (1) when an appeal is presented out of time and there has been a refusal to condone delay under section 30(2), is an order rejecting it as time barred one passed in appeal; and (2) if it is, is such an order one confirming the assessment within section 31(3)(a)? On the first point, as already stated, it has been held by the Bombay High Court that while an order dismissing an appeal as time barred after it is admitted is one under section 31, a similar order passed before it is admitted is one under section 30(2).
The ratio of this distinction is stated to be that in law there is no appeal unless it is presented in time, and if presented beyond time, unless the delay is excused.
In Commissioner of Income tax vs Mysore Iron and Steel Works(2), Chagla, C.J. stated the position thus: "An asseesee has a statutory right to present an appeal within thirty days without any order being required from the Appellate Assistant Commissioner for admission of that appeal.
But if the time prescribed expires, then that statutory right to present an appeal goes; and an appeal can only be entertained provided it is admitted by the Appellate Assistant Commissioner after condoning the delay.
(1) (2) 173 Therefore before an appeal could be admitted in this case, an order from the Appellate Assistant Commissioner was requisite that the delay had been condoned and it was only on such an order being made that the appeal could be entertained by the Appellate Assistant Commissioner.
Now section 31 deals only with such appeals which are presented within the prescribed period or admitted after the delay has been condoned, and the procedure laid down in section 31 with regard to the hearing of appeals only applies to such appeals.
Therefore, in my opinion, when the Appellate Assistant Commissioner refused to condone the delay, there was no appeal before him which he could hear and dispose of as provided under section 31 of the Act.
Section 33 then gives the right of appeal to the assessee from an order made by the Appellate Assistant Commissioner either under section 28 or under section 31.
Therefore the Legislature did not give the right of appeal to the assessee against an order made by the Appellate Assistant Commissioner under section 30 of the Act".
Learned counsel for the appellant disputes the correctness of the last observation that an order of the Appellate Assistant comissioner refusing to condone the delay is one under section 30(2), and contends that the only order that could be passed under that section was one excusing delay, and an order refusing to condone it will fall outside it, and that such an order could only be made under section 31.
We find it difficult to accede to this contention.
When power is granted to an authority to be exercised at his discretion, it is necessarily implicit in the grant that he may exercise it in such manner as the circumstances might warrant.
And if the Appellate Assistant Commissioner has a discretion to excuse the delay, he has also a discretion in appropriate cases to decline to do so.
We are therefore of opinion that the refusal to excuse delay is an order under section 30(2.).
But the question still remains whether the view taken in Commissioner of Income tax vs Mysore Iron 23 174 and Steel Works(1) and K. K. Porbunderwalla v Commissioner of Income tax (2) that an appeal which is filed beyond the period of limitation is, in the eye of law, no appeal, unless and until there is a condonation of delay, and that, in consequence, an order passed thereon cannot be held to be passed in appeal so as to fall within section 31 is right.
Now, a right of appeal is a substantive right, and is a creature of the statute.
Section 30(1) confers on the assessee a right of appeal against certain orders, and an order of assessment under section 23 is one of them.
The appellant therefore had a substantive right under section 30(1) to prefer appeals against orders of assessment made by the Income tax Officer.
Then, we come to section 30(2), which enacts a period of limitation within which this right is to be exercised.
If an appeal, is not presented within that time, does that cease to be an appeal as provided under section 30(1)? It is well established that rules of limitation, pertain to the domain of adjectival law, and that they operate only to bar the remedy but not to extinguish the right.
An appeal preferred in accordance with section 30(1) must, therefore, be an appeal in the eye of law, though having been presented beyond the period mentioned in section 30(2) it is liable to be dismissed in limine.
There might be a provision in the statute that at the end of the period of limitation prescribed, the right would be extinguished, as for example, section 28 of the Limitation Act; but there is none such here.
On the other hand, in conferring a right of appeal under section 30(1) and prescribing a period of limitation for the exercise thereof separately under section 30 (2), the legislature has evinced an intention to maintain the distinction well recognised under the general law between what is a substantive right and what is a matter of procedural law.
In Nagendranath Dey vs Suresh Chandra Dey(3) Sir Dinshaw Mulla construing the word ' appeal ' in the third column of article 182 of the Limitation Act observed: "There is no definition of appeal in the Civil Pro (1) (2) (3) 59 I.A. 283, 287.
175 cedure Code, but their Lordships have no doubt that any application by a party to an appellate, Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is no less an appeal because it is irregular or incompetent".
These observations were referred to with approval and adopted by this Court in Raja Kulkarni and others vs The State of Bombay(1).
In Promotho Nath Roy vs W. A. Lee(2), an order dismissing an application as barred by limitation after rejecting an application under section 5 of the Limitation Act to excuse the delay in presentation was held to be one "passed on appeal" within the meaning of section 109 of the Civil Procedure Code.
On the principles laid down in these decisions, it must be held that an appeal pre sented out of time is an appeal, and an order dismissing it as time barred is one passed in appeal.
Then, the next question is whether it is an order passed under section 31 of the Act.
That section is the only provision relating to the hearing and disposal of appeals, and if an order dismissing an appeal as barred by limitation is one passed in appeal, it must fall within section 31.
And as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable.
But then, it is contended that in an appeal against assessment the only order that could be passed under section 31 (3)(a) is one which confirms, reduces, enhances or annuls the assessment, that such an order could be made only on a consideration of the merits of the appeal, and that an order dismissing it on the ground of limitation is not within the section.
That was the view taken in Dewan Chand vs Commissioner of Income tax(3).
But there is practically a unanimity of opinion among all the other High Courts that to fall within the section it is not necessary that the order should expressly address itself to and decide on the merits of the assessment, and that it is sufficient that the effect of the order is to confirm the assessment (1) [1954] S.C.R. 384, 388.
(2) A.I.R. 1921 Cal.
(3) 176 as when the appeal is dismissed on a preliminary point.
In Commissioner of Income tax vs Shahzadi Begum(1), Satyanarayana Rao, J. said: "If the appeal is dismissed as incompetent or is rejected as it was filed out of time and no sufficient cause was established, it results in an affirmation of the order appealed against".
In Gour Mohan Mullick vs Commissioner of Agricultural Income tax(2), construing sections 34, 35 and 36 of the Bengal Agricultural Income Tax Act which are in terms identical with those of sections 30, 31 and 33 of the Indian Income Tax Act, Chakravarti, J. observed: "I would base that view on the ground that the order, in effect, confirmed the assessment or, at any rate, disposed of the appeal and was thus an order under section 35, because what that section really contemplates is a disposal or conclusion of the appeal and the forms of orders specified in it are not exhaustive.
An appellate order may not, directly and by itself, confirm, or reduce or enhance or annul an assessment and may yet dispose of the appeal.
If it does so, it is immaterial whether the ground is a finding that the appeal is barred by limitation or a finding that the case is not a fit one for extension of time or both".
This reasoning is also the basis of the decisions of the Bombay and Allahabad High Courts which bold that an order rejecting an appeal on the ground of limitation after it had been admitted is one under section 31, though there is no consideration of the merits of the assessment.
Thus, in K. K. Porbunderwalla vs Commissioner of Income tax(3), Chagla, C. J. observed: ``. although the Appellate Assistant Commis sioner did not hear the appeal on merits and held that the appeal was barred by limitation his order was under section 31 and the effect of that order was to confirm the assessment which bad been made by the Income tax Officer".
In Special Manager of Court of Wards vs Commissioner (1) (2) (3) 177 of Income tax(1), the Allahabad High Court stated that the view was "possible that even though the period of limitation is prescribed under section 30 and the power to grant extension is also given in that section the power is really exercised under section 31 as the Appellate Assistant Commissioner when he decides not to extend the period of limitation may be said in a sense to have confirmed the assessment".
The respondent relied on a later decision of the) 'Allahabad High Court in Mahabir Prasad Niranjanlal vs Commissioner of Income tax(2), wherein it was held by the learned Judges, departing from the previous course of authorities of that court, that an order of the Appellate Assistant Commissioner dismissing an appeal as time barred was one under section 30(2) and not under section 31, and was therefore not appealable.
This conclusion they felt themselves bound to adopt by reason of certain observations of this Court in Commissioner of Income tax, Madras vs Mtt.
section Ar.
Arunachalam Chettiar(3).
But when read in the context of the point that actually arose for decision in that case, those observations lend no support to the conclusion reached by the learned Judges.
There, the facts were that an appeal was preferred by the assessee under section 30(1) against an order of the Income tax Officer, and that was dismissed by the Appellate Assistant Commissioner on 19 11 1945 as incompetent.
No appeal was filed against this order, and it became final.
But acting on a suggestion made in the order dated 19 11 1945, the assessee filed an original miscellaneous application before the Appellate Tribunal for relief, and by its order dated 20 2 1946 the Tribunal set aside the findings of the Income tax Officer, and directed him to make a fresh computation.
Then, on the application of the Commissioner of Income tax, the Tribunal referred to the High Court under section 66(1) of the Income tax Act the following question: "Whether in the facts and circumstances of the case, the order of the Bench dated 20th February, (1) , 212.
(2 ) (3) ; 474 475, 178 1946 in the miscellaneous application is an approoriate order and is legally valid and passed within the jurisdiction and binding on the Income tax Officer".
The High Court declined to answer this reference on the ground that the order of the Tribunal was not one passed in an appeal under section 33(1), and that In consequence, the reference under section 66(1) was itself incompetent.
The correctness of this decision was challenged on appeal to this Court, and in affirm ing it, this Court observed: . . when on 19th November 1945, the Appellate Assistant Commissioner declined to admit the appeal, the assessee did not prefer any appeal but only made a miscellaneous application before the Appellate Tribunal.
There is no provision in the Act permitting such an application.
Indeed, in the statement of the case the Appellate Tribunal states that in entertaining that application and correcting the error of the Income tax Officer it acted in exercise of what it regarded as its inherent powers.
There being no appeal under section 33(1) and the order having been made in exercise of its supposed inherent jurisdiction, the order cannot possibly be regarded as one under section 33(4) and there being no order under section 33(4) there could be no reference under section 66(1) or (2), and the appellate Court properly refused to entertain it".
There is, of course, nothing in the decision itself which bears on the point now under discussion.
But certain observations occurring at pages 474 and 475 were referred to by the learned Judges as leading to the conclusion that an order dismissing an appeal as barred by time would fall undersection 3O(2).
Now, those observations came to be made by way of answer to a new contention put forward by the learned, Attorney General in support of the appeal.
That contention was that the miscellaneous application presented to the Tribunal might be treated as an appeal against the order dated 19 11 1945, in which case the order passed thereon on 20 2 1946 would fall under section 33(4) and the reference would be com 179 petent. 'In disagreeing with this contention, this Court observed that the appeal to the Appellate Assistant Commissioner was incompetent under section 30(1), that even if it was competent, the order dated 19 11 1945 was not one contemplated by section 31, and there could be no appeal against such an order under section 33(1).
Now, it should be noticed that the question actually referred under section 66(1) was the correctness and legality of the order passed in a miscellaneous application and not of any order made in an appeal preferred under section 33(1).
In this context, the point sought to be raised by the learned, Attorney General did not arise at all for decision, and the observations in answer thereto cannot be read as a pronouncement on the question of the maintainability of the appeal, much less as a decision that an order dismissing an appeal as barred by limitation is one under section 30(2).
Accordingly, the question whether an order dismissing an appeal as barred by limitation falls under section 30(2) or section 31 remains unaffected by the observations in Commis sioner of Income tax, Madras vs Mtt.
section Ar.
Aruna chalam Chettiar(1).
Then again, under the provisions of the Act, limitation is not the only preliminary ground on which an appeal could be disposed of without a consideration of the merits.
Section 30(3) provides that an "appeal shall be in the prescribed form and shall be verified in the prescribed manner".
If the Appellate Assistant Commissioner holds that the appeal does not comply with the requirements of this enactment and rejects it on that ground, the order must be one made under section 31, since section 30(3) makes no provision for such an order, as does section 30(2) in the case of limitation.
All the orders under section 31 being appealable under section 33, the order of dismissal for noncompliance with section 30(3) must also be appealable, and it was so decided in Maharani Gyan Manjari Kuari vs Commissioner of Income tax(2) .
How is this view to be reconciled with the contention that section 31 contemplates only orders on the (1) ; (2) 180 merits of the assessment and not on preliminary issues? Vide also the decision in Kunwarji Ananda vs Commissioner of Income tax(1), which was followed in Maharani Gyan Manjari Kuari vs Commissioner of Income tax(2), and in Ramnarayana Das Mandal vs Commissioner of Income tax(3).
There is thus abundant authority for the position that section 31 should be liberally construed so as to include not only orders passed on a consideration of the merits of the assessment but also orders which dispose of the appeal on preliminary issues, such as limitation and the like.
The learned Solicitor General sought to get over these decisions by taking up the position that section 31(3) (a) construed in its literal and ordinary sense, conferred jurisdiction on the Appellate Assistant Commissioner only to pass orders on the merits of the assessment, that it was not therefore open to him to entertain any question which did not directly relate to such merits, and that accordingly he could not hear or decide any issue of a preliminary nature such as limitation, and dispose of the appeal on the ,basis of the finding on that issue.
He conceded that this contention would run counter to numerous authorities, but argued that they were all wrong.
Having given due consideration to this contention, we are of opinion that it is not well founded.
Taking the plea of limitation which is what we are concerned with in this appeal when there is a judgment or order against which the statute provides a right of appeal but none is preferred within the time prescribed therefor, the respondent acquires a valuable right, of which he cannot be deprived by an order condoning delay and admitting the appeal behind his back.
And when such an order is passed ex partehe has a right to challenge its correctness at the bearing of the appeal.
That is the position under the general law (vide Krishnasami .
Panikondar vs Ramasami Chettiar(4), and there is nothing in the provisions of the Income Tax Act, which enacts a different principle.
(1) I L.R. 11 Patna 187; A.I.R. 1931 Patna 306; 5 I.T.C. 417.
(2) [1944]12 I.T.R. 59.
(3) (4) Mad. 412; 45 I.A. 25.
181 Therefore, if an appeal is admitted without the fact of delay in presentation having been noticed, clearly it must be open to the Department to raise the objection at the time of the hearing of the appeal.
That would also appear to be the practice obtaining before.
the Income tax Tribunal, as appears from the decisions cited before us, and that, in our opinion, is right.
Similar considerations would apply to other objections of a preliminary character, such as one based on section 30, sub section (3).
We should be slow to adopt a construction which deprives parties of valuable rights.
We are therefore of opinion that contentions relating to preliminary issues are open to consideration at the time of the hearing of the appeal, and that the jurisdiction of the Appellate Assistant Commissioner is not limited to the bearing of the appeal on the merits of the assessment only.
In this view, the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time barred would be orders passed under section 31 and would be open to appeal, and it would make no difference in the position whether the order of dismissal is made before or after the appeal is admitted.
The question referred must accordingly be answered in the affirmative.
This appeal will therefore be allowed, and the order of the court below set aside.
The appellant will have his costs here and in the court below.
| The Government of India notified its decision that certain deductions in the minimum cane price, on the basis of recovery of sugar from sugarcane will be allowed to sugarcane factories in U.P. on the cane supplied to them on and after May 1, 1955 but that the deductions will be allowed only on "unbonded cane" crushed by each factory and not on "bonded cane", the latter of which shall have to be purchased by each factory at the minimum cane price already fixed for the season.
In exercise of the powers delegated to him under section 3 of the , the Cane Commissioner U.P. issued a Notification on June, 1, 1955, whereunder "the producers of sugar by vacuum pan process were allowed to make deductions as specified in the Schedule thereto from the minimum price of per maund of cane fixed for the season 1954 55 in respect of the unbonded sugarcane crushed on and after May 1, 1955.
The appellant firm taking advantage of this Notification granting concession in the minimum price, made payment to Laskar Co operative Cane Development Union Ltd; after making deductions in respect of 2 lac maunds of sugarcane supplied to it, under an agreement entered into pursuant to the offer made to it on March 22, 1955.
However, on December 21, 1955 the Cane Commissioner issued a Recovery Certificate under Sections 17 and 18 of U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 against the appellant firm for a sum of Rs. 53,879.10 being the amount deducted by the appellant firm while making payments to Laskar Co operative Union.
On a challenge to legality of the Recovery Certificate, the dispute was referred to the sole arbitrator, the District Cane Officer under Rule 108 of the U.P. Sugarcane (Regulation of Supply and Purchase) Rules, 1954.
The arbitrator found that the supply of sugarcane was "bonded cane" and therefore gave an award that the appellant was not entitled to the concession and was liable to pay the minimum price therefor.
An appeal to the Divisional Commissioner having been dismissed, the appellant firm filed a Writ Petition in the Allahabad High Court which also was rejected.
A further special appeal also proving unsuccessful the appellant firm appealed to the Supreme Court after obtaining a certificate of fitness.
Dismissing the appeal, the Court, ^ HELD: 1.
Neither the expression "bonded sugarcane" nor "unbonded sugar cane" has been defined either in the Statute or in the U.P. Sugarcane Supply and Purchase Order, 1954.
Having regard to the ordinary dictionary 779 meaning of the said expressions, the expression "bonded sugarcane" must mean Sugar Cane secured by a bond or deed.
[783 G H, 784 A] 2.
Under the Notification of the Cane Commissioner dated June 1, 1955 certain deductions from the minimum price per maund of cane fixed for the season 1954 55 had been notified in respect of the "unbonded sugarcane" crushed on or after May 1, 1955.
In other words, the concession is granted in respect of the supply of 'unbonded sugarcane in contradistinction with supply of 'bonded sugarcane.
There is nothing in the Notification to suggest that any particular bond or a bond in accordance with the provisions of the U.P. Sugarcane Supply and Purchase Order 1954 was intended and therefore supply of bonded sugarcane ' would mean supply of sugarcane which has been secured by a bond or an agreement and such supply will not be entitled to the concession.
On a plain reading of the Notification in question, therefore, it will appear clear that since the supply of two lac maunds of sugarcane made by respondent No. 4 to the appellant firm had been secured by the agreement that was entered into between the parties on May 4, 1955 the said supply will have to be regarded as supply of "bonded sugarcane" and as such the appellant firm was not entitled to the concession in the minimum price payable in respect thereof to respondent No. 4, Laskar Co operative Cane Development Union.
[784 B E] 3.
On a fair reading of the sub cls.
(2) and (3) of cl. 3 of the Order two or there things become at once clear.
In the first place sub cl.
(2) uses the expression 'may ' and provides that a cane grower or cane growers ' cooperative Society may within 14 days of the issue of an order reserving an area for a factory make an offer to supply the cane grown in the reserved area to the factory.
That the period of 14 days mentioned in this subclause is not imperative or mandatory is also clear from sub cl.
(4) which confers power upon the Cane Commissioner to extend the date for making offer in respect of any reserved area.
Secondly, sub cl.
(3) uses the expression 'shall ' indicating that an imperative obligation is cast upon the factory to accept the offer within 14 days from the receipt of the offer.
Reading the two sub clauses together, it becomes clear that if a cane grower or cane growers ' Co operative Society makes an offer within 14 days mentioned in sub cl.
(2) it is obligatory upon the occupier of the factory to accept that offer within 14 days of the receipt of the offer; this only means that if the offer is made by cane grower or cane growers ' Co operative Society beyond the period specified in sub cl.
(2) or the extended time under sub cl.
(4) it would not be obligatory but optional for the occupier of the factory to accept the said offer but if such offer made beyond the prescribed or extended period is accepted by the occupier of the factory a binding agreement comes into existence between the parties and sugarcane supplied thereunder would be bonded sugarcane ', more so when the agreement is entered into in the prescribed form.
Merely because the offer from the cane grower or cane growers ' Co operative Society emanates after the expiry of the period mentioned in sub cl.
(2) it does not mean that the parties are preventive from entering in to an agreement in the prescribed form and if they do, as was the case here, the sugar cane supplied there under would be 'bonded sugarcane '.
Therefore, considering the question in the context of sub cl.
(2) and sub cl.
(3) of the U.P. sugarcane supply and Purchase Order 1954, also the appellant firm was not entitled to the benefit of the Cane Commissioner 's Notification dated June 1, 780 4.
The contention that sugarcane supplied by the cane growers or cane growers ' Co operative Society could be regarded as "bonded sugarcane" only if offer of the Canegrower or the Canegrowers Co operative Society emanates within the period prescribed by sub clause (2) and the same is accepted by the occupier within the period prescribed by sub cl.
(3) is not correct.
[786 D F] 5.
The true effect of sub clauses (2) and (3) read together is that the compulsion or obligation to accept the offer on the part of the occupier of the factory arises only when the offer is made by the cane grower or Cane growers ' Co operative Society within the time prescribed by sub cl.
(2) or the extended time under sub cl.
(4) but if the offer is made after the expiry of that period it is optional for the factory occupier to accept it or not but in cases where he accepts such offer a binding agreement comes into existence, and the sugarcane supplied thereunder becomes "bonded sugarcane".
[786 E M].
In the instant case the offer of additional quantity of two lac maunds of sugarcane was undoubtedly made long after the expiry of the period of sub cl.
(2) but the same was accepted by the appellant firm and a binding agreement came into existence and what is more a binding agreement was executed by the parties in the prescribed Form 'C '.
Further the conduct on the part of the appellant firm in referring the dispute to arbitration and filing an appeal against the arbitrator 's award under the relevant Rules clearly shows that the parties, particularly the appellant firm, treated the agreement dated May 4, 1955 as one under the Act and the U.P. Sugarcane Supply and Purchase Order, 1954.
[786 F H]
|
Criminal Appeal No. 149/1958.
Appeal from the judgment and order dated October 27, 1958, of the Allahabad High Court in Criminal Appeal No. 1154 of 1956.
N. C. Chatterjee and R. L. Kohli, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
September 27.
The Judgment of the Court was delivered by RAGHUBAR DAYAL J.
This is an appeal by Padam Sen and Shekbar Chand against the order of the Allahabad High Court dismissing their appeal against the order of the Special Judge, Meerut, convicting them of an offence under section 165 A of the Indian Penal Code.
The High Court granted leave to appeal against its order.
One Genda Mal, father of Shekhar Chand, appellant No. 2, sued Mithan Lal and others in the Court of the Additional Munsif, Ghaziabad, for money on the basis of promissory notes executed by the defendants in his favour.
The defendants apprehending that the plaintiff would fabricate his books of account with respect to payments made by them, applied for the seizure of the account books of the plaintiff.
The Additional Munsif, by his order dated March 27, 1954, appointed Sri Raghubir Pershad, Vakil, Commissioner to seize those books of account.
The Commissioner accordingly seized those books and brought them to Ghaziabad.
The appellants were convicted by the Special Judge under section 165 A of the Indian Penal Code for having offered bribe to the Commissioner for being allowed an opportunity to tamper with those books of account.
Their conviction was upheld by the High Court.
The two Courts below have found that the appellants went to the Commissioner 's Office on March 30, 1954, and offered him Rs. 900 as bribe.
The appellants do not challenge these findings of fact recorded by the Courts below.
Their only contention is that 113 886 Sri Raghubir Pershad, the Commissioner, was not a public servant, and therefore even on the basis of the findings of fact arrived at by the Courts below, they did not commit any offence under section 165 A of the Indian Penal Code.
It has been contended for the appellants that the appointment of Sri Raghubir Pershad as Commissioner was null and void as the Additional Munsif had no power to appoint a Commissioner for the purpose of seizing the account books of the plaintiff on an application b application by the defendants, the power of a Civil Court to issue a commission being limited by the provisions of section 75 and Order XXVI of the Code of Civil Procedure (hereinafter called the Code), and the Court having no inherent power to appoint a Commissioner for any purpose not mentioned in section 75 and Order XXVI of the Code.
On behalf of the State it is urged that the Court can appoint a Commissioner in the exercise of its inherent powers saved by section 151 of the Code for purposes which do not come within the provisions of section 75 and Order XXVI of the Code.
It is further submitted for the State that even if the Additional Munsif had no power to appoint the Commissioner for seizing the books of account, Sri Raghubir Pershad would be deemed to be a public servant in view of Explanation 2 to section 21 of the Indian Penal Code because he was in actual possession of the situation of a public servant for he acted as Commissioner and was recognized as such by the appellants and others connected with the civil suit.
Section 75 of the Code empowers the Court to issue a commission, subject to conditions and limitations which may be prescribed, for four purposes, viz., for examining any person, for making a local investigation, for examining or adjusting accounts and for making a partition.
Order XXVI lays down rules relating to the issue of commissions and allied matters.
Mr. Chatterjee, learned counsel for the appellants, has submitted that the powers of a Court must be found within the four corners of the Code and that when the Code has expressly dealt with the subject matter of commissions in section 75 the Court cannot 887 invoke its inherent powers under section 151 and thereby add to its powers.
On the other hand, it is submitted for the State, that the Code is not exhaustive and the Court, in the exercise of its inherent powers, can adopt any procedure not prohibited by the Code expressly or by necessary implication if the Court considers it necessary, for the ends of justice or to prevent abuse of the process of the Court.
Section 151 of the Code reads: " Nothing in this Code shall be deemed to limit or otherwise affect the inherent powers of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court ".
The inherent powers of the Court are in addition to the powers specifically conferred on the Court by the Code.
They are complementary to those powers and therefore it must be held that the Court is free to exercise them for the puposes mentioned in section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the Legislature.
It is also well recognized that the inherent power is not to be exercised in a manner which will be contrary to or different from the procedure expressly provided in the Code.
The question for determination is whether the impugned order of the Additional Munsif appointing Sri Raghubir Pershad Commissioner for seizing the plaintiff 's books of account can be said to be an order which is passed by the Court in the exercise of its inherent powers.
The inherent powers saved by section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it.
These powers are not powers over the substantive rights which any litigant possesses.
Specific powers have to be conferred on the Courts for passing such orders which would affect such rights of a party.
Such powers cannot come within the scope of inherent powers of the Court in the matters of procedure, which powers have their source in the Court possessing all the essential powers to regulate its practice 888 and procedure.
A party has full rights over its books of account.
The Court has no inherent power forcibly to seize its property.
If it does so, it invades the private rights of the party.
Specific procedure is laid down in the Code for getting the relevant documents or books in Court for the purpose of using them as evidence.
A party is free to produce such documents or books in support of its case as be relevant.
A party can ask the help of the Court to have produced in Court by the other party such documents as it would like to be used in evidence and are admitted by that party to be in its possession.
If a party does not produce the documents it is lawfully called upon to produce, the Court has the power to penalize it, in accordance with the provisions of the Code.
The Court has the further power to draw any presumption against such a party who does not produce the relevant document in its possession, especially after it has been summoned from it.
Even in such cases where the Court summons a document from a party, the Court has not been given any power to get hold of the document forcibly from the possession of the defaulting party.
The defendants had no rights to these account books.
They could not lay any claim to them.
They applied for the seizure of these books because they apprehended that the plaintiff might make such entries in those account books which could go against the case they were setting up in Court.
The defendants ' request really amounted to the Court 's collecting documentary evidence which the defendants considered to be in their favour at that point of time.
it is no business of the Court to collect evidence for a party or even to protect the rival party from the evil consequences of making forged entries in those ac.
count books.
If the plaintiff does forge entries and uses forged entries as evidence in the case, the defendants would have ample opportunity to dispute those entries and to prove them forgeries.
We are therefore of opinion that the Additional Munsif bad DO inherent power to pass the order appointing a Commissioner to seize the plaintiff 's 889 account books.
The order appointing Sri Raghubir Pershad as Commissioner for this purpose was therefore an order passed without jurisdiction and was therefore a null and void order.
Learned counsel for the State, Mr. Mathur, has submitted in the alternative that the impugned procedure adopted by the Additional Munsif comes within certain provisions of the Code and has referred to r. 5 of Order XXXVIII and rr. 1(b) and 7 of Order XXXIX and r. 1 of Order XL of the Code.
We do not agree with this contention.
The impugned order was not passed under any of these provisions.
It was clearly an order which the Additional Munsif purported to pass in the exercise of the inherent powers of the Court.
The order was: " It is strange that an application of this kind has been made at this late stage, after over 2 years.
However, in the interests of justice, issue commission to Sri Raghubir Pershad.
Ho must go and recover Bahi Khatas for the year 1951 from the plaintiff and produce the same in Court.
Fees Rs. 20, plus T. A. Report within six days.
Costs of the commission will not be taxed.
" Further, the provisions of r. 5 of Order XXXVIII are to prevent a decree that may be passed being rendered infructuous and r. 1(b) of Order XXXIX is applicable where the defendant threatens to dispose of his property to defraud creditors.
None of these provisions has any application to the facts of the present case.
Rule 7 of Order XXXIX empowers the Court, on the application of any party to a suit, to make an order for the detention, preservation or inspection of any property which is the subject matter of such suit or as to which any question may arise therein.
The account books of the plaintiffs were not ' property ' which were the subject matter of the suit nor such that about them a question could arise in the suit.
The account books could, at best, have been piece of evidence, if the plaintiff or the defendant had cared to rely on them.
We therefore hold that the Additional Munsif had no power under the Code to appoint the Commissioner for seizing the plaintiff 's books of account.
890 Lastly it was urged for the State that even if the appointment of Sri Raghubir Pershad as Commissioner was null and void as the Additional Munsif had no jurisdiction to appoint a Commissioner for seizing the account books of the plaintiff, Sri Raghubir Pershad should be treated to be a 'public servant ' in view of Explanation 2 to section 21 of the Indian Penal Code.
It has not been disputed for the appellant that if the appointment Of Sri Raghubir Pershad as Commissioner bad been valid, he would have been a public servant in view of the Fourth Clause to section 21 of the Indian Penal Code.
Explanation 2 to section 21 reads: "Wherever the words 'public servant ' occur, they shall be understood of every person who is in actual possession of the situation of a public servant, whatever legal defect there may be in his right to hold that situation.
" The contention for the State is that though there was a legal defect in Sri Raghubir Pershad 's appointment as Commissioner on account of the Additional Munsif having no power to appoint a Commissioner for the purpose of seizing the plaintiff 's books of account, that will not affect his being a public servant as he was in actual possession of the situation of a public servant.
We do not agree with this contention, and are of opinion that the Explanation applies only when there be a post in existence.
The Explanation does not apply when there is no pre existing post or when the person appointing has no authority to appoint.
The word 'situation ' according to Webster 's New International Dictionary of the English Language, means: position or place of employment, place, office; as a situation in a store.
The apposite meaning for the purposes of this Explanation would be 'office '. 'Office ' again, according to the same Dictionary, means a special duty, trust, charge or position, conferred by an exercise of governmental authority and for a public purpose ; a position of trust or authority conferred by an act of governmental power ; a right to exercise a public function or employment and receive the emoluments (if any) thereto belonging; as, an executive or judicial office. .
In a wider sense, any position or place in the employment of the 891 government, especially one of trust or authority.
The Dictionary further notes the differences in the con.
notations of the various words office, post, appointment, situation and place and says: Office commonly suggests a position of (especially public) trust or authority ; and situation emphasizes the idea of employment, especially in a subordinate position; as, to seek a situation as governess, as private secretary.
It is therefore clear that it is necessary for the application of this Explanation that the person concerned should be in actual possession of the pre existing office of a public servant.
If there be no office or post, there could be no question of any person 's being in actual possession thereof, and of the person concerned coming within the terms of this Explanation.
There was no post or office of a Commissioner in existence.
All that happened here was that Sri Raghubir Pershad was authorized to seize and keep certain documents in his possession.
In the present case there was neither any existing office of Commissioner, nor the Additional Munsif had power to appoint Sri Raghubir Pershad as Commissioner for the purpose of seizing the plaintiff 's account books and therefore this Explanation does not apply to the appointment of Sri Raghubir Pershad as Commissioner.
It follows, there.
fore, that Sri Raghubir Persbad cannot be held to be a public servant.
We therefore accept the contention for the appellants and hold that Sri Raghubir Pershad was not a public servant and that therefore the appellants did not commit any offence under section 165 A of the Indian Penal Code by their offering him money in order to have an opportunity to tamper with the books of account which were in his custody.
We therefore allow the appeal, set aside the order of the Court below and acquit the appellants of the offence under section 165 A and direct that the fine, if paid, be refunded.
The appellants are on bail and therefore the bail bonds will be cancelled.
Appeal allowed.
| The appellant, a non resident for the purposes of the Indian Income tax Act, did not submit returns of certain dividend income accruing to him within the taxable territory.
The Income tax Officer served upon him notices under section 34 read with section 22(2) of the Act for assessment of tax in respect of those years.
The notices in question were issued within eight years from the end of the years of assessment and were within the period prescribed by section 34(i)(a).
The appellant contended that notices for assessment were governed by cl.
(i)(b) of section 34 and not by cl.
(i)(a), even though the appellant had not made a return of his income for the years in question as a general notice under section 22(1) did not give rise to a liability to submit a return and his inaction did not amount to omission or failure to submit a return as he was a non resident, and the assessment proceedings were barred by limitation.
Held, that the expression "every person " in section 22 (1) of the Indian Income tax Act, 1922, includes all persons who are liable to pay tax and non residents are not exempted from liability to submit a return pursuant to the general notice thereunder.
Once a notice is given by publication in the prescribed manner under section 22(i), every person whether resident or non resident whose income exceeds the maximum amount exempt from tax is obliged to submit a return and if he does not do so, 36 it will be deemed that there was omission on his part to make a return within the meaning of section 34(i)(a) of the Indian Income tax Act.
Section 34(1)(b) applied only to those cases where there was no omission or failure to make a return of the income or to make a full and true disclosure of facts material to the assessment.
In the instant case the proceedings for assessment were pro perly commenced within the period of limitation prescribed by section 34(1)(a).
|
Appeal No.122 of 1956.
Appeal from the judgment and order dated March 5, 1954, of the Bombay High Court in Appeal from its Original Jurisdiction Misc.
Application No. 1 of 1954.
H. N. Sanyal, Addl.
Solicitor General, G. N. Joshi and R. H. Dhebar, for the appellants.
N. A. Palkhivala, section N. Andley, J. B. Dadachanji, P. L. Vohra and Rameshwar Nath, for the respondent.
April 28.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
This is an appeal by the Income tax Officer, Companies Circle I (1), Bombay and the Union of India and it raises a short question about the construction of section 35 of the Income tax Act read with section 1, sub section
(2) and section 13 of the Indian Income tax (Amendment) Act, 1953 (XXV of 1953).
It arises in this way.
The Income tax Officer, by his assessment order made on October 9, 1952, for the assessment year 1952 53, assessed the respondent, the Bombay Dyeing and Manufacturing Co. Ltd., under the Act.
In the said assessment order the respondent, was given credit for Rs. 50,603 15 0 as representing interest at 2% on tax paid in advance under section 18A of the Act.
This credit was given to the respondent in pursuance of the provisions contained in section 18A, sub section
(5) of the Act as it then stood.
On May 24, 1953, the Amendment Act came into force.
Section 1, sub section
(2) of the Amendment Act provides that " subject to any special provision made in this behalf in the Amendment Act, it shall be deemed to have come into 705 force on the first day of April, 1952 ".
By section 13 of the Amendment Act, a proviso was added to section 18A (5) of the Act.
The effect of the amendment made by the insertion of the said proviso to section 18A (5) was that the.
assessee was entitled to get interest at 2% not on the whole of the advance amount of tax paid by him as before but only on the difference between the payment made and the amount at which the assessee was assessed to tax under the regular assessment under section 23 of the Act.
After the Amendment Act was passed, the first appellant exercised his power under section 35 of the Act and purported to rectify the mistake apparent from the record in regard to the credit for Rs. 50,603 15 0 allowed by him to the assessee.
The first appellant held that the assessee was really entitled to a credit of only Rs. 21,157 6 0 by way of interest on tax paid in advance as a result of the retrospective operation of the amendment made in section 18A (5) by the Amendment Act.
In accordance with this order a notice of demand under section 29 of the Act was issued against the assessee for the sum of Rs. 29,446 9 0 on the ground that the assessee had been given credit for this excess amount through mistake.
Aggrieved by this notice of demand, the respondent filed a petition in the High Court of Bombay on January 4, 1954, under article 226 of the Constitution praying for a writ against the appellants inter alia prohibiting them from, enforcing the said rectified order and the said notice of demand.
It appears that this petition was admitted by Tendolkar J. on January 6, 1954, and a rule issued on it.
Thereafter the said petition was referred to a Division Bench by the Hon 'ble the Chief Justice for final disposal.
Accordingly on March 5, 1954, the petition was heard by Chagla C. J. and Tendolkar J. and a writ was issued against the appellants.
The High Court held that section 35 of the Act had no application to the facts of the case because the mistake apparent from the record contemplated by the said section is not a mistake which is the result of the amendment of the law even though the amending law may be retrospective in operation.
In other words, in the opinion of the High Court, the 706 mistake mentioned by section 35 had to be apparent on the face of the order and it can only be judged in the light of the law as it stood on the day ,When the order was passed.
The appellants then applied for and obtained a certificate from the High Court on October 8, 1954; on their behalf it is urged ' that the High Court of Bombay has erred in law in taking the view that the appellant No. I was not entitled to rectify the mistake in question under section 35 of the Act.
Thus the short question which arises before us in the present appeal is whether an order which was proper and valid when it was made can be said to disclose a mistake apparent from the record if the said order would be erroneous in view of a subsequent amendment made by the Amendment Act when the Amendment Act is intended to operate retrospectively ? It is unnecessary to refer to the provisions of section 18A (5) as well as the provision of the proviso which was subsequently added by section 13 of the Amendment Act.
It is common ground that, in the absence of the subsequently inserted proviso, the assessee would be entitled to obtain a credit for Rs. 50,603 15 0.
It is also common ground that, if the subsequently inserted proviso covered the assessee 's case, he would be entitled to a credit only of Rs. 21,156 9 0.
It is thus obvious that the order giving the relevant credit to the assessee was valid when it was made and that it would be erroneous under the subsequent amendment.
Under these circumstances, was the first appellant justified in exercising his power of rectification under section 35 of the Act ? In deciding this question it would be necessary to determine the true legal effect of the retrospective operation of the Amendment Act.
Section 1, sub section
(2) of the Amendment Act expressly provides that subject to the special provisions made in the said Act it shall be deemed to have come into force on the first day of April 1952.
The result of this provision is that the amendment made in the Act by s, 13 of the Amendment Act must, by legal fiction, be deemed to have been included in the principal Act as from the first of 707 April, 1952, and this inevitably means that, at the time when the Income tax Officer passed his original order on October 9, 1952, allowing to the respondent credit for Rs. 50,603 15 0, the proviso added by section 13 of the Amendment Act must be deemed to have been inserted in the Act.
As observed by Lord Asquith of Bishopstone in East End Dwellings Co. Ltd. vs Finsbury Borough Council (1), " if you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.
One of those in this case is emancipation from the 1939 level of rents.
The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs ".
Thus, there can be no doubt that the effect of the retrospective operation of the Amendment Act is that the proviso inserted by the said section in section 18A (5) of the Act would, for all legal purposes, have to be deemed to have been included in the Act as from April 1, 1952.
But it is urged for the respondent that the retrospective operation of the relevant provision is not intended to affect completed assessments.
It is conceded that, if any assessment proceedings in respect of the assessee 's income for a period subsequent to the first of April 1952 were pending at the time when the Amendment Act was passed, the proviso inserted by section 13 would govern the decision in such assessment proceedings; but where an assessment proceeding has been completed and an assessment order has been passed by the Income tax Officer against the assessee, such a completed assessment would not be affected and cannot be reopened under section 35 by virtue of the retrospective operation of the Amendment Act.
In support of this contention, reliance is placed on the observations of the Privy Council in Delhi Cloth and (1) , 132.
90 708 General Mills Co. Ltd. vs Income tax Commissioner, Delhi and Anr.
Lord Blanesburg who delivered the judgment of the Board referred to the Board 's earlier decision in the Colonial Sugar Refining Company vs Irving (2) where it was in effect laid down that, while provisions of a statute dealing merely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment.
The learned Judge then added that " Their Lordships have no doubt that the provisions which, if applied retrospectively, would deprive of their existing finality orders which, when that statute came into force, were final, are provisions which touch existing rights.
" The argument for the respondent is that the assessee has obtained a right under the order passed by the Income tax Officer to claim credit for the specified amount under section 18A(5) and the said right cannot be taken away by the retrospective operation of section 13 of the Amendment Act.
The same argument is put in another form by contending that the finality of the order passed by the Incometax Officer cannot be impaired by the retrospective operation of the relevant provision.
In our opinion, this argument does not really help the respondent 's case because the order passed by the Income tax Officer under section 18A(5) cannot be said to be final in the literal sense of the word.
This order was and continued to be liable to be modified under section 35 of the Act.
What the Income tax Officer has purported to do in the present case is not to revise his order in the light of the retrospective amendment made by section 13 of the Amendment Act alone, but to exercise his power under section 35 of the Act; and so the question which falls to be considered in the present appeal.
centres round the construction of the expression "mistake apparent from the record " used in section 35.
That is why we think the principle of the finality of the orders or the sanctity of (1)[1927] L.R. 54 I.A. 421.
(2)[1905] A.C. 369.
709 the existing rights cannot be effectively invoked by the respondent in the present case.
The respondent then urged that the Amendment Act should not be given greater retrospective operation than its language and its general scheme render necessary.
This convention is based on the provisions of section 3, sub section
(2), section 7, sub section
(2) and section 30, sub section
(2) of the Amendment Act.
Where the Amendment Act intended that its provisions should affect even concluded orders of assessment it is expressly so provided.
Since section 13 does not specifically authorise the reopening of concluded assessments it should be held that its retrospective operation is not intended to cover such concluded assessments.
That in brief is the argument.
We are, however, not satisfied that this argument is wellfounded.
Let us examine the three provisions of, the Amendment Act on which the argument rests.
Section 3, sub section (1) of the Amendment Act makes several additions and modifications in section 4 of the principal Act.
Section 3, sub section (2) then provides that, the amendments made by sub cl.
(3) of cl.
(b) of sub section
(1) shall be deemed to be operative in relation to all assessments for any year whether such assessments have or have not been concluded before the com mencement of the Amendment Act of 1953.
It would be noticed that the main object of this sub section is to extend the retrospective operation of the relevant provisions of the Amendment Act beyond the first of April 1952 mentioned by section 1, sub section
(2) of the Amendment Act.
Since it was intended to provide for such further retrospective operation of the relevant provision the legislature thought it advisable to clarify the position by saying that the said extended retrospective operation would cover all assessments whether they had been completed or not before the commencement of the Amendment Act.
Section 7, sub section
(1) adds two provisos to section 9 of the principal Act by cls.
(a) and (b).
Sub section (2) of section 7 then lays down that the amendments made in cl.
(a) of sub section
(1) shall be deemed to be operative for any assessment for the year ending the 31st day of March, 1952, whether made before or after the commencement of this Act and, where any such 710 assessment has been made before such commencement, he Income tax Officer concerned shall revise it whenever necessary to give effect to this amendment.
The position under section 30, sub section
(2) of the Amendment Act is substantially similar.
By sub section
(1) of this section certain additions and amendments are made in the schedule to the principal Act by cls.
(a), (b), (c) and (d).
sub section
(2) then provides for the retrospective operation of the amendment made by sub section
(1) in terms similar to those used in section 7, sub section
It is clear that the Provisions in sections 7 and 30 are intended for the benefit of the assessees and so the legislature may have thought it necessary to confer on the Income tax Officer specific and express power to revise his orders in respect of the relevant assessments wherever necessary to give effect to the amendments in question.
The effect of this provision is to make it obligatory on he Income tax Officer to revise his original orders in he light of the amendments and also to confer on the assessee right to claim such revision.
It may be con ceded that in respect of the other retrospective provisions of the Amendment Act such a power to revise the earlier orders cannot be claimed or exercised by the Income tax Officer.
In other words, a distinction can be drawn between there two provisions of the Amendment Act and the rest in respect of the power which the Income tax Officer can purport to exercise to give effect to the amendments made by the Amendment Act.
Whereas, in respect of the amendments made by section 7 and section 30 of the Amendment Act, the Income tax Officer can and must revise his earlier orders covered by section 7, sub section
(2) and section 30, sub section
(2), such a power of revision has not been conferred on him in the matter of giving effect to the other amendments made in the Amendment Act.
Even so, we do not think it would be legitimate or reasonable to hold that the provisions of section 7(2) and section 30(2) lead to the infference that the retrospective operation of the other provisions of the Amendment Act is not intended to affect concluded assessments in any manner whatever.
In this connection, it would be pertinent to remember that the power to revise which has been conferred on 711 the Income tax Officer by section 7(2) and section 30(2) of the Amendment Act is distinct and independent of the power to rectify mistakes which the Income tax Officer can exercise under section 35 of the Act.
It is in the light of this position that the extent of the Income tax Officer 's power under section 35 to rectify: mistakes apparent from the record must be determined; and in doing so, the scope and effect of the expression " mistake apparent from the record " has to be ascertained.
At the time when the Income tax Officer applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1, 1952.
If that be the true position then the order which he made giving credit to the respondent for Rs. 50,603 15 0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record.
If a mistake of fact apparent from the record of the assessment order can be rectified under section 35, we see no reason why a mistake of law which is glaring and obvious cannot be similarly rectified.
Prima facie it may appear somewhat strange that an order which was good and valid when it was made should be treated as patently invalid and 'wrong by virtue of the retrospective operation of the Amendment Act.
But such a result is necessarily involved in the legal fiction about the retrospective operation of the Amendment Act.
If, as a result of the said fiction we must read the subsequently inserted proviso as forming part of section 18A(5) of the principal Act as from April 1, 1952, the conclusion is inescapable that the order in question is inconsistent with the provisions of the said proviso and must be deemed to suffer from a mistake apparent from the record.
That is why we think that the Income tax Officer was justified in the present case in exercising his power under section 35 and rectifying the said mistakes.
Incidentally we may mention that in Moka Venkatappaiah vs Additional Income Tax Officer, Bapatla (1), the High Court of Andhra has taken the same view.
(1)(1957) 712 In this connection it would be useful to refer to the decision of the Privy Council in the Commissioner of [Income Tax, Bombay Presidency and Aden vs Khemchand Ramdas (1).
In Khemchand 's case, the assessees were registered as a firm and they were assessed under section 23(4) on an income of Rs. 1,25,000 at the maximum rate.
Being a registered firm no super tax was levied.
A notice of demand was also made before March 1927.
On February 13, 1928, the Commissioner, in exercise of his powers under section 33, cancelled the order registering the assessee as a firm and directed the Income tax Officer to take necessary action.
The Income tax Officer accordingly assessed the firm to super tax on May 4, 1929.
The Privy Council held that the assessment made on January 17, 1927, was final both in respect of the income tax and super tax.
The fresh action taken by the Income tax Officer on May 4, 1929, was out of time though it had been taken in pursuance of the directions of the Commissioner and that the order of May 4, 1929, was one which the Income tax Officer had no power to make.
One of the points raised before the Privy Council was whether, under the relevant circumstances the Income tax Officer had power to make the impugned order in view of the provisions of sections 34 and 35 of the Act.
The Privy Council dealt with this question on the footing that the Commissioner 's order cancelling the registration had been properly made.
On this basis their Lordships thought that it was unnecessary to consider whether the. case would attract the provisions of section 34 " inasmuch as in Their Lordships ' opinion the case clearly would have fallen within the provisions of section 35 had the Income tax Officer exercised his powers under the section within one year from the date on which the earlier demand was served upon the respondents ".
The judgment shows that Their Lordships took the view that looking at the record of the assessments made upon the respondents as it stood after the cancellation of the respondents ' registration and the order effecting the cancellation would have formed part of the record it would be apparent that a mistake (1)(1938) L.R. 65 I.A. 236. 713 had been made in stating that no super tax was leviable.
This decision clearly shows that the subsequent cancellation of the assessees ' registration was held by Their Lordships of the Privy Council to form part of the record retrospectively in the light of the said subsequent event, and the order was deemed to suffer from a mistake apparent from the record so as to justify the exercise of the rectification powers under section 35 of the Act.
It is because Their Lordships thought that section 35 would have been clearly applicable that they did not decide the question as to whether section 34 could also have been invoked.
This decision lends considerable support to the view which we are disposed to take about the true meaning and scope of the expression " the mistake apparent from the record " occurring in section 35.
We must accordingly hold that the High Court of Bombay was in error in coming to the conclusion that the notice issued by the Income tax Officer calling upon the respondent to pay 9the sum of Rs. 29,446 9 0 was not warranted by law.
The result is the order passed by the High Court issuing a writ against the appellant is set aside and the appeal is allowed with costs throughout.
Appeal allowed.
| The appellant Company, a manufacturer of superfine cement, preferred a claim for refund of duty on price of packing material of the product, paid by it during July 4, 1974 to March 1, 1974, on the ground that duty on packing charges on superfine cement was not leviable.
But the claim was rejected by the Assistant Collector of Central Excise, the Appellate Collector and also the Appellate Tribunal on the ground of limitation under Rule 11 of the Central Excise Rules, 1944, since the duty was not paid under protest.
The Tribunal also held that the letter dated July 11, 1974, in which the appellant had stated that the duty was not levi able on packing charges and if the department felt it was leviable they had no option but to suggest the rates fixed by Government from quarter to quarter as packing charges, was not a protest to save the period of limitation pre scribed in Rule 11.
In the appeal before this Court, on behalf of the Compa ny, it was submitted that a similar claim was allowed by the Central Government in the case of Birla Cement Works and that the Trade Notice dated 29.10.1979 by the Collectorate clearly stated that the cost of packing was not liable to be included in the assessable value.
While conceding that there was no particular form of protest, it was contended on behalf of the department that if the payments were held as made under protest, by treating the letter as a protest, then the period of limitation under Rule 11 of the Central Excise Rules, 1944 would not be applicable but the Trade Notice of 20.1.1979 could not be 716 given retrospective effect and, therefore, the matter had to be remitted to the Tribunal for disposal on other questions.
Allowing the appeal, HELD: The letter of the appellant clearly shows that all possible contentions which could be raised against the levy of duty on the value of packing material were raised, and that the appellant was not accepting the liability, without protest.
Therefore, the letter was in the nature of protest.
That being the position, the question of limitation does not arise for the refund of the duty.
i718 H] Giving the benefit without any Trade Notice in a similar case, the Central Government held, in their revisional order, that as superfine cement was capable of being sold without packing like grey portland cement, the cost of packing for superfine cement should not be added to the assessable value.
The authorities ought to have, therefore, extended this view to all similar cases.
[719A, D] In these circumstances, the appellant is entitled to refund of the duty paid by it.
[719F]
|
N: Criminal Appeal Nos. 346 and 387 of 1975.
Appeals by Special Leave from the Judgment and Order dated 6 8 75 of the Bombay High Court in Criminal Appeal No. 1005 and 1006 of 1973.
Lalit Chari, P. R. Guna, A. K. Srivastava and Vineet Kumar for the Appellant in Crl.
A. No. 387/75.
R. L. Kohli, P. P. Rao, R. C. Kohli and R. Nagarathnam for the Appellant in Crl.
A. No. 346/75.
V. section Desai, H. R. Khanna and M. N. Shroff for the Respondent in both the appeals.
The Judgment of the Court was delivered by JASWANT SINGH, J.
The above noted two criminal appeals which are directed against the common judgment and order dated August 6, 1975 of the High Court of Judicature at Bombay affirming on appeal the judgment and order dated August 6, 1973 of the Special Judge, Greater Bombay, convicting section P. Bhatnagar, appellant in the aforesaid first appeal, (hereinafter described as A 1) under section 120B read with sections 409 and 109 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act, 1947, and sentencing him to six months simple imprisonment on each of the said two courts as well as convicting A. section Krishnaswamy, appellant in the aforesaid second appeal (hereinafter described as A 2) under the aforesaid two counts but reducing his sentence from nine months ' imprisonment to six months simple imprisonment on each one of those counts, shall be disposed of by this judgment.
Briefly put the case as set up by the prosecution was: In 1964, the Indian Oil Corporation (hereinafter referred to as 'the Corporation ') which is a Government owned company, decided to purchase 13 acres and odd of a hilly tract of land situate in village Mahul in Trombay (Bombay) from the Tatas for the purpose of erecting black furnace oil storage tanks and construction of administrative buildings.
After the area was taken over by the Corporation Varandani (P. W. 20), Junior Engineer of the Corporation surveyed the land in October, 1964, under the directions of A 1 and A 2, the Engineering Manager and Senior Engineer respectively of the Engi 878 neering Department of the Marketing Division of the Corporation with a view to find out the extent of rock cutting and filling which might be required to be done for levelling the area of 7 acres out of the said tract of land.
The kacha level plan (Exh. 125) and worksheets prepared by Varandani on October 13, 1964 and November 3, 1964 respectively during the course of his aforesaid survey (which were signed by A 1 and A 2, showed that 16,80,000 cft.
of rock cutting work and 8,00,000 cft.
of filling work would have to be done to suit the purpose for which the land was acquired.
Estimate (Exh. 27) prepared by Varandani indicated that expenditure at the rate of Rs. 30/ per 100 cft.
for rock cutting and Rs. 10/ per 100 cft.
for filling would have to be incurred.
Pucca tracing (Exh. 34) of level plan (Exh. 125) and copies thereof signed by A 1 and A 2, and contour plan prepared by Varandani and approved by Engineering Manager were kept on the record.
On the basis of the survey and the estimate of expenditure made by Varandani, notice (Exh. 28) inviting tenders from experienced civil contractors for rock cutting, filling and levelling of the land in question was prepared by A 2 on February 2, 1965, and was forwarded (under his signatures) by A 1 to the Finance Department for approval on February 5, 1965.
After the approval of the Finance Department, the Public Relations Officer of the Corporation by his letter (Exh. 29) dated February 11, 1965 requested Times of India, Indian Express and Free Press to publish the tender notice (Exh. 28) wherein it was stated that the tenders which should reach the Corporation by 2.30 P.M. on March 2, 1965 would be opened at 3.00 P.M. on that date.
In response to this notice eleven firms of contractors including Ram & Co. submitted their tenders.
N. N. Desai (hereinafter described as A 4) however abstained from submitting his tender.
In the meanwhile, it was decided that instead of having stack measurement as provided in Exhibit 28, it would be desirable to have the measurements on the basis of differences between the existing and finished levels.
Accordingly, on March 5, 1965, the aforesaid eleven tenderers were asked to submit revised tenders on the basis of the amended tender notice by March 15, 1965.
Although fresh tenders were restricted to the original eleven tenderers, a tender form was issued to A 4 in response to the application made by him on March 8, 1965.
On opening the tenders on March 15, 1965, it was found that five out of the eleven original tenderers and four new ones including A 4 had submitted their tenders, that the tender of Ram & Co. whereby it had quoted Rs. 28/ per 100 cft.
for cutting work and 'nil amount for filling was the 879 lowest and that the second lowest tender was of A 4 who had quoted Rs. 26/ per 100 cft.
for cutting and Rs. 6/ per 100 cft.
for filling work.
Thus, the actual amount as per quotation of Ram & Co. was Rs. 4,70,400/ and that of A 4 was Rs. 4,84,800/ for 16,80,000 cft.
of cutting work and 8,00,000 cft.
of filling work.
On discovering that the tender of his firm was the lowest, Roshan Lal, a partner of Ram & Co. addressed communication dated March 20, 1965 to the Managing Director of the Corporation requesting him that the aforesaid job of rock cutting and filling be entrusted to his firm in view of its working experience detailed therein but handed over the same to A 1.
At or about this time, Messrs Labitos Oil Fields Limited, a British firm whom the Corporation was trying to collaborate in its project advised the Corporation that instead of three levels (steppings) which had been planned as per cantour map (Exh. 34) there should be a single level and instead of the survey being on the basis of 100 ft. spacing as done earlier by Varadani, it should be on the basis of 10 ft. spacing.
Accordingly A 1 and A 2 told Varadani (P.W. 20) and section D. Vaidya, another Assistant Engineer (hereinafter described as A 3) to make a fresh survey alongwith A 4 according to the advice of Messers Labitos Oil Fields Limited as it had been almost decided to entrust the aforesaid work to A 4.
Pursuant to the instructions of A 1 and A 2, B. N. Desai, a representative of A 4 was associated with the revised survey which was carried from March 21 to March 26, 1965.
As a result of the joint survey, kacha level plan (Exh. 22) and work sheet (Exh. 23) were prepared by A 3 under the directions of Varandani.
As a result of this survey, it was found that rock cutting and filling would have to be done to the extent of 23,30,454 cft.
and 31,500 cft.
respectively as against 16,80,000 cft.
and 8,00,000 cft.
respectively as found as a result of the earlier survey.
Notwithstanding the large variations in the cutting and filling work which required to be done as a result of the revised joint survey, the Engineering Department did not invite fresh tenders but instead prepared another comparative statement on the basis of the rates quoted by Ram & Co. and A 4 in their tenders opened on March 15, 1965 and showed therein that the tender of A 4 had turned out to be the lowest and that of Ram & Co. to be the second lowest.
On April 7, 1965, A 2 drew up tender committee proceedings (Exh. 16) as reproduced below and got them signed by A 1 in the hope that the recommendations made therein would be accepted by Srivastava, (P.W. 5) the Financial Controller and Patel, the Operation Manager of the Corporation, who were the other members of the Tender Committee, in addition to A 1 and finally by Gopal Krishan, the then Chairman of the Company : 880 "Ref.
No. ENG/ASK/Q 250 April 7, 1965.
Subject : Tender Committee proceedings for the finalisation of rock cutting, levelling of plot, taken over from M/s. Tata at Bombay.
(1) We had taken over 13.5 acres of land from M/s. Tata Power House at Trombay.
It was intended to level this plot of land and recover about 7 acres of land by cutting and levelling in order to put up our Black Storage tanks and other allied facilities.
Due to the uneven terrain, it was decided to have two steppings so that the storage tanks may be installed at a higher level and the remaining administrative blocks, were house stores etc., at a lower level.
Accordingly, Public Tenders were invited for rock cutting and filling this area on 100 cft.
basis.
(2) Subsequently, M/s.
Lobitos Oil Fields Ltd. Ellesmere Port, Wirral, Cheshire, had negotiations with us for putting up a Transformer Oil Blending Plant at this site.
The representatives of the above firm during their discussions with C. & section M. and M. E. (accused No. 1) stated, that they would like to have only plain piece of land instead of steppings as was decided by us previously.
This will entail additional cutting and minimise the quantity of filling.
(3) Our estimated quantity previously was 16,80,000 cft.
of cutting and 8,00,000 cft.
of filling.
As per the revision in the levels to be maintained at this site that the total quantity of cutting comes to 23,30,456 cft.
The quantity of filling comes to 31,500 cft.
The total estimated cost for the original work was Rs. 6,13,200/ .
A comparative statement has been drawn as per the tendered rates quoted by the various parties and the position of the first three is as follows: ____________________________________________________________ section Name of Contractor Qty.
Rate Amount Total No. %Cft.
____________________________________________________________ 1 N.N. Desai Cutting 23,30,450 26/ Sd.
605917 607807 Filing 31500 Cft.
1890 6/ 2 Ram & Co. Cutting 2330450 652526 652526 28/ Cft.
Filing 31500 Cft.
free 3 Library Construction Cutting 2330450 652526 28/ Cft.
655676 Filing 31500 Cft.
3150 ____________________________________________________________ 881 M/s. N. N. Desai, Contractor are the lowest.
The Tender Committee therefore recommends that this work may be allotted to M/s. N. N. Desai, Contractor at their quoted rate of Rs. 6,07,807/ being the lowest tenderer.
Sd/ (section P. Bhatnagar) M. E. (A. K. Srivastava) F.O. (H. B. Patel) O.M. Approved (P. A. Gopalakrishnan) Chairman.
" Contrary to the expectations of A 1 and A 2, Srivastava (P.W. 5) refused to be a party to the Tender Committee recommendations.
Ignoring not only the opposition of Srivastava and the suggestion of the Accounts Officer of the Finance Department and the Assistant Finance Controller of the Corporation made vide Exhibit 68 and Exhibit 31 respectively while processing the tender committee proceedings that in view of the fact that both the quantity and value of the work had increased substantially as a result of the revised survey, it would be fair and proper to ask all the contractors who had responded to the tender notice to re submit their quotations but also the offer made by Ram & Co. (which possessed the requisite skill and equipment) to execute the contract at the lower rates of Rs. 20/ per 100 cft.
for rock cutting and Rs. 15/ per 100 cft.
for filling as well as the flat refusal to reduce his rates given by A 4 during the negotiations conducted at the suggestion of the Accounts Department of the Corporation on April 17, 1965 with the three contractors mentioned in Exhibit 16, A 2 carried on, in pursuance of the conspiracy entered into between himself and A 1 and A 4 fresh negotiations with A 4 on or about April 20, 1965 without associating any member of the Finance Department and persuaded him to accept the lowest revised rates offered by Ram & Co. although he did not possess the requisite experience in and equipment for rock cutting and filling and by passing the Financial Controller forwarded the papers to the Operation Manager who not being conversant with the proceedings supported A 2 for entrusting the contract to A 4 at the lowest rates offered by Ram & Co. On the Tender Committee recommendations reaching him in circulation.
Srivastava put on record his bold and emphatic protest but eventually reluctantly gave his con 882 currence to the recommendations made by A 1 and the Operation Manager as is evident from the concluding sentence of the Note: "The case is recommended for acceptance of the Chairman only because the Engineering Manager has certified that he would not be able to accept any responsibility about the deadline if work is not given to Desai." Although according to A 2 's note (Exh. 33) dated April 19, 1965, the Coordinator and Sales Manager was keen to have the site developed as early as possible, the latter held up the matter for nearly three months in the vain expectation that the work would be done free of cost either by the Government of Maharashtra or the Bharat Sevak Samaj and it was not before July 15, 1967 that he gave his approval to A 1 's proposal to award the contract to A 4 whereafter accepting the said proposal the Managing Director of the Marketing Division and Chairman of the Board of Directors of the Corporation accorded sanction to the entrustment of the work to A 4.
On receipt of the sanction, A 1 forwarded the papers with his endorsement to the Financial Controller on July 29, 1965.
On July 30, 1965, work order (Exh. 19) manifesting quantity of rock cutting work as 29,30,450 cft., filling work as 90,000 cft.
and value of the work as Rs. 5,99,590/ as against the corresponding figures of 23,30,450 cft., 31,500 cft.
and Rs. 4,70,000/ respectively as specified in the final sanction which was based on the aforesaid level statement (Exh. 22) and work sheet (Exh. 23) was prepared and handed over by A 2 to A 4.
Copies of the work order were also endorsed by A 2 to the Bills Section of the Engineering Department and the Accounts Section of the Finance Department of the Corporation with the endorsement "the above has Chairman 's approval on our note of even reference dated 7th April 1965.
Please have the agreement executed.
Earnest money of unsuccessful tenderers may also please be refunded early.
" On July 30, 1965, formal contract (Exh. 74) mentioning only the number and date of the work order in the blank columns of the printed form was prepared and signed by A 4 and a representative of the Company.
The joint level statement Exhibit 22 and the work sheet Exhibit 23 in respect of the joint survey made between March 21 and 26, 1965 for ascertaining the extent of rock cutting and filling which formed the basis for invitation of tenders and the final sanction in favour of A 4 were not only left unsigned by the concerned but were actually removed from the file and were substituted by spurious level plan (Exh. 24) and its copy (Exh. 38) which were fabricated by A 3 to justify the inflated figures of rock cutting and filling work mentioned in the work order (Exh. 19) dated 883 July 29/30, 1965.
On August 19, 1965, fabricated level plans (Exhibits 24 and 38) prepared by A 3 were sent to A 4 as annexures to Exhibit 106 which ran as under: "We are enclosing herewith two prints of spot level of land area to be dressed and levelled at our Trombay plot.
The whole plot should be brought to a level of 102.00 as directed.
Please return to us a copy of the Blue Print showing spot levels duly signed as a token of acceptance of the same for payment." While A 4 retained one of the spurious plans viz. Exhibit 38 with himself, he returned the other viz. Exhibit 24 after putting his initials thereon.
Thereafter A 3 endorsed on the letter Exhibit 106 that 'the print signed by A 4 should be filed by Sukhtankar (P.W. 13) who is in charge of the filing section. ' Accordingly, Sukhtankar filed Exhibit 106 alongwith Exhibit 24 in the Bill Section.
The actual rock cutting operations commenced with effect from August 1, 1965 and on August 27, 1965, A 4 prepared and submitted the first running bill (Exhibit 51) indicating that 8,00,000 cft.
of cutting work and 80,000 cft.
of filling work had been completed.
This bill was accompanied by the certificate of A 3 reading as under : "The measurements on which column No. 3 of this bill are based were taken by me on 24 8 65 and recorded at pages of MMC No. 7201.
Certified that the quantities of work actually executed as shown in column No. 4 has actually been done and in no case less than the on account payments claimed.
" The above certificate was countersigned by A 2 on August 26, 1965.
A 2, A 3 and A 4 also signed measurement certificate (Exhibit 52) which read as follows: "We certify that the measurements given above are the actual works carried out in accordance with the drawings and specifications as indicated in the work order referred to above.
" On the basis of these certificates, the first on account running bill was passed and paid for.
Thereafter the second and third running bills and measurement certificates Exhibits 53 and 54 dated Septem 884 ber 16, 1965 and November 17, 1965 respectively claiming that the additional cutting work of 5,00,000 cft.
and 8,00,000 cft.
had been done were likewise prepared by A 4 and signed by A 3 and counter signed by A 2.
The fourth running bill and measurement certificate (Exh.
55) dated February 22, 1966 claiming that additional work to the extent of 7,00,000 cft.
had been done was prepared by A 4 and signed by A 3.
This bill which was countersigned by K. section Joshi, another Senior Engineer who was put incharge of the Project in the absence of A 2 who had been transferred to Delhi was also paid.
On November 8, 1966, one Gurunath Naik (P.W. 17) who was working as a Junior or Assistant Engineer for some time in Bombay and for the remaining period at Allahabad, Kanpur and Mugalsarai was called by A 1 and asked to see Ramrao, the then Junior Engineering Manager.
Accordingly Naik met Ramrao who directed him to go to the spot and have the level drawings.
Pursuant to this direction, Naik went to the site for spot verification and reported to Ramrao vide Exhibit 18 that excepting at one place where he got a level of 102 9 nowhere else did he get a level of 102.
Naik also reported that as against an area of 7.4 acres which had to be levelled hardly an area of 4.8 acres was attempted to be levelled.
On December 30, 1966, A 4 submitted his final bill (Exh. 56) claiming to have completed the work by August 11, 1966.
This bill bore the certificate dated December 29, 1966 of A 3 to the effect that the measurements on which column No. 3 of the bill was based was taken by him on that date, and had been recorded in the measurements of the M.B.M.C. book.
A 3 also recorded a further certificate to the effect that the work had been completed 100% according to the specifications and drawings.
This certificate of A 3 was followed by another certificate of A 4 that he accepted the above certificate and certified that the amount of payment which he received on that bill would be in full and final settlement of all his claims in respect of the work excepting the refund of his security deposit.
By this bill, A 4 claimed to have done 3,84,720 cft.
of cutting work and 18,200 cft.
of filling work in addition to the work covered by the four earlier running bills.
Thus A 4 claimed to have done 31,84,720 cft.
of rock cutting work and 98,200 cft.
of filling work.
On this bill, which bore the certificates of A 3 and A 4 was countersigned by Ramrao on December 30, 1961 and wherein it was falsely claimed by A 4 that the work was completed on August 11, 1966 although that date was also much beyond the stipulated date A 3 recorded the following note: 885 "The final bill amounts to Rs. 6,51,674/ and is in excess of work order amount by Rs. 52,084.
Since this excess is within 10% of the ordered amount, M.E. may kindly approve." Accordingly the papers were laid before A 1 who accorded the desired approval the moment the bill was laid before him and sent it for payment to the Accounts Officer ignoring the practice which required all such bills involving an excess of 10% over the sanctioned amount to be submitted to the Chairman for sanction.
On the bill coming before the Accounts Department for scrutiny, it pointed out that since the actual work exceeded the sanctioned amount by Rs. 52,084/ for which originally the approval of the Chairman was taken, the excess needed to be regularised by obtaining his sanction.
It was also pointed out that as the contractor had not completed the work within the stipulated time, the question of imposition of penalty also required to be considered.
On the pay order being returned to the Engineering Department, Ramrao, the then Deputy Engineering Manager, submitted the following reply vide Exhibit 59 dated January 12, 1967: "The work is now completed as required.
However to acquire the required level and gradient, the quantity of work has increased.
The party has now submitted their final bill for this work amounting to Rs. 6,51,674/ which is in excess by Rs. 52,084/ than the original amount of work order.
The excess is within 10% of the original estimate, M.D. is therefore requested to kindly approve the excess work done and to pass the final bill for Rs. 6,51,674/ .
As per the work order, the work was to be completed within 4 months (120 working days).
However, the Contractors could not complete this work including the disposal of the excavated stuff within this time limit due to the fact that there was no approach available to this plot.
The party has completed the work expeditiously, after the approach was given to them by M/s. Tatas.
M. D. is therefore, requested to consider this aspect and approve the time limit extension upto 11 8 1966, the date on which the party has completed the work." 886 On the matter coming back to the Finance Department, Shende (P.W. 16) pointed out that not only the quantities of rock cutting and filling work which were found as a result of the survey made between March 21 and 26, 1965 had been enormously inflated in the work order but the work claimed to have been done also exceeded the inflated figures mentioned in the work order.
He, therefore, suggested that the Department might agree to the payment of extra amount to A 4 subject to A 1 's obtaining the Board 's ratification.
Sometime before March 28, 1967, Krishnaswamy Rajam (P.W. 1), the Chief Internal Auditor, was summoned by the Managing Director and the General Manager and was asked to have a personal talk with A 3 in connection with the matter.
On P.W. 1 's questioning A 3 on March 28, 1967, the latter made confessional statement (Exh. 21) which is reproduced below for facility of reference: "Regarding rock cutting and filling at Trombay site I wish to bring to your kind attention the following: I was assigned to this job after the work was started at site by M/s N. N. Desai.
The original estimates for cutting and filling were 16,80,000 cft.
and 8,00,000 cft.
respectively.
It was later revised to 23,30,450 cft.
and 31,500 cft.
for cutting and filling.
I have got the workings for this revision with me at Ahmedabad.
(He refers to the genuine level statements and plans and worksheets Exs. 22 and 23 which were prepared by him under the directions of Varandani between 21st and 26th March, 1965).
Later on I was advised by my superiors to give a still further upward revision giving the quantities as 29,30,450 cft.
for cutting and 90,000 cft.
for filling.
The work sheets prepared by me and signed by contractor only (N. N. Desai) has no bearing to actual quantities involved.
I had merely acted as asked by my superiors in preparing worksheets accordingly which has resulted in this upward revision.
I have also given measurement certificates in this regard in line with the revised wrong quantities.
I realise now this has resulted in making excess payments to the contractor.
I beg to be excused for having done such a thing which was done solely at the instance of my superiors in Engineering Depart 887 ment.
E.M. (accused No. 1) and Dy.
E.M. are aware of this.
" Thereupon P.W. 1 put up the papers before the Managing Director and the General Manager who advised him to start investigation on particular lines.
During the course of the inquiry, A 2 told P.W. 1 that the work order which as far as he remembered was prepared by A 3 was cursorily signed by him due to heavy rush of work and that while checking the running bills submitted for payment, he normally checked the percentage of progress of work certified by the Assistant Engineer.
On further investigation made on April 1, 1967, A 3 produced the genuine level statement (Exh. 22) and the work sheet (Exh. 23) before P.W. 1 and told him that the substitution of the fabricated level statement and work sheet relating to rock cutting and filling at Trombay was done at the instance of Joshi, A 2 and A 1 and that they were aware of the same.
To the further question as to what was the basis for the work order for the figure of 29,00,000 cft.
of rock cutting and 90,000 cft.
of filling, A 3 told P.W. 1 that there was no basis for the work order and the quantities were fixed to suit sanctioned amount.
On a query being made by P.W. 1 from Ramrao regarding the final bill, he admitted that he had not personally checked the calculations and had counter signed the bill relying on the accuracy of the measurements shown in the bill which was prepared by A 3.
He further stated that he had not personally checked the calculations based on the final bill and initialled joint levels which according to him were normally done by the Assistant Engineer.
During the course of this inquiry, Murthy (P.W. 18) was deputed by A 1 and Krishnaswamy (P.W. 1) to go to the spot and find out the work which had actually been done.
Thereupon, Murthy (P.W. 18) submitted his interim report on April 6, 1967 pointing out that at only one place the level was 103.94 and elsewhere it remained much more.
By his final report (Exh. 44) dated April 20, 1967, Murthy (P.W. 18) pointed out that actually on the spot only 9,73,000 cft.
of rock cutting and 50,000 cft.
of filling had been done.
After recording the statements of A 2, A 3 and A 4, Krishnaswamy (P.W. 1) submitted a detailed report (Exh. 25) on April 8, 1967 to the Managing Director through the Financial Controller.
In his report, P.W. 1 also pointed out that contour plan/levels statement which in case of this nature are jointly signed by the contractor and the representative of the Engineering Department were not available in the instant case for inspection and that A 3 had produced a level statement alleged to have been processed by him and Varandani which was not signed by any body including A 3 's superiors.
P.W. 1 also 888 pointed out in the course of the report that the quantities of rock cutting and filling shown in the work order were 29,30,450 cft.
and 90,000 cft.
respectively and that there was an increase of 6,00,000 cft.
of rock cutting straightaway.
Krishnaswamy (P.W. 1) also mentioned in his report that according to A 3, the level statement giving the figure of 29,30,450 cft.
for cutting and 90,000 cft.
for filling had been signed by A 4.
On the report being put up before the then Financial Controller, he directed that before proceeding with the matter, it was necessary to call for the comments of A 1.
Thereupon after calling for a report from Ramrao, A 1 gave his comments vide Exhibit 178 dated April 17, 1967 wherein after doubting the competence and qualification of P.W. 1 to hold the investigation, he offered to send one of the senior engineers from Western Branch to carry out an independent survey to find out the quantity of work done by A 4 and suggested that measurements might be made by reference to the kacha level statement (Exh. 125), the work sheet (Exh. 126) and the contour plan (Exh. 34) which were checked by A 2 and approved by him and which must be with the department.
On April 18, 1967, A 1 sent for A 3 and questioned him in regard to the matter.
In the statement penned by A 3 himself, he stated that he changed the levels of drawing of Trombay plot regarding rock cutting and filling job at the instance of A 2 and KSJ (i.e. Joshi) but did not inform A 1.
On May 3, 1967, A 1 issued show cause notices to A 2 and A 3 with a view to hold departmental enquiry against them.
By his reply dated May 20, 1967 to the show cause notice, A 3 stated that he had changed the original contour plan at the instance of A 2.
On getting information on July 15, 1967 that A 4 was having some rock cutting done on the site although he had in his final bill claimed that he had fully completed the work on August 11, 1966, A 1 and A 2 visited the site along with Lakshmanan, the Operations Manager and finding that the work of rock cutting was still going on and that the claim of A 4 as certified by A 3 and countersigned by Ramrao about the work having been completed on August 11, 1966 was apparently false had the measurements of rock cutting and filling work taken by Ganapathy.
As the measurements taken by Ganpathy were on the basis of level plans prepared by Tatas in which the bench mark was 94.5 as against the bench mark of 100 for the survey in question, the Managing Director had the measurements taken by M/s R. L. Dalal & Co. The report of Dalal & Co. showed that the rock cutting work done was 9,60,000 cft.
and filling work was 1,96,000 cft.
889 On July 28, 1967, the Managing Director issued a charge sheet to A 1, A 2, A 3 and Ramrao.
In his reply (Exh.64) dated August 4, 1967 to the charge sheet, A 3 submitted that whatever he did was under the orders of A 1 and the Deputy Engineering Manager.
This time he did not mention A 2 to be responsible for anything done by him.
On the same day i.e. August 4, 1967, A 1 sent for A 3 in his cabin and questioned him in the presence of three other officers viz. Roy Chowdhary (P.W.2), who was the Deputy Financial Controller, Shriyan (P.W.23), the Assistant Engineer, and Vora, the Senior Engineer.
On this Occasion, A 3 allegedly made statement (Exh.43) absolving A 1 and throwing the entire responsibility on A 2.
While the three other officers and A 1 signed the statement (Exh.48) made by A 3, A 3 declined to sign it and fled away from the chamber on some excuse and rushed to the chamber of Krishnaswamy, Chief Internal Auditor whereupon Roy Chowdhary (P.W.2) also followed A 3 to the chamber of Krishnaswamy.
In the chamber of Krishnaswamy, A 3 resiled from the statement.
Having regard to the position adopted by A 3 in resiling from his earlier statement of that very day before A 1, Roy Chowdhary reminded him that in the morning in his presence, he had stated that it was A 2 who was responsible for asking him to change the drawing and increase the quantities.
To this question of Roy Chowdhary in the chamber of Krishnaswamy, A 3 replied in the negative and stated that A 1 called him and Joshi into his room and instructed him personally to increase the quantity.
When questioned by Roy Chowdhary as to why he did not come out with that truth in the room of A 1 in the presence of Roy Chowdhary, A 3 replied that he did not do so out of fear or A 1.
In his reply to the charge sheet, Ramrao inter alia stated that he signed the bill (Exh.56) relying on the certificate of A 3 who had been assigned to the job and added that according to the practice prevailing in the Corporation, Senior Engineers were not expected to verify the measurements.
Elaborating his explanation, he stated that just as Senior Engineer, Doraiswamy could not proceed to a BPI nor Senior Engineer Vora nor Senior Engineer Chari could proceed to an installation just to verify the billed quantities in view of the fact that there were a number of bills on each work order and so many work orders for each location.
Similarly in the Branches, Senior Engineers who were controlling the work for so many depots and installations were not expected to verify the quantities in each bill; that however, if there was a dispute with the contractor or there was some other reason to doubt the correctness of the Assistant Engineer 's certificate, the Senior 890 Engineer might either take measurements himself or get them taken by another Assistant Engineer; that subsequent to the counter signature by the Senior Engineer, the bill was passed on to the Engineering Bills Section where the bills were checked by the Accountant against sanctions, work order, rates and amounts, deductions for cement A.C. sheets or other materials supplied and security; deposit etc; that the Accountant prepared the pay order giving all these details for signature by a Senior Engineer as far as possible other than the countersigning Senior Engineer; that the bill then went to the Accounts Department where it was subjected to further detailed scrutiny before payment; that on December 30, 1966 Vaidya brought the bill for Rs.79, 674/ dated December 30, 1966 to him for counter signature; that it would have normally been put up to K. section Joshi but was brought to him as he was not available; that Vaidya was the Assistant Engineer who had handled that contract from the time of placing the work order; that the bill was for the work carried out by the Contractor subsequent to the previous 'on account bill ' 21 2 66 (nearly 10 months earlier) i.e. about 3.18 lakhs cft.
at Rs. 20/ per 100 cft.
of cutting and 18,200 cft.
of filling at Rs. 15/ per 100 cft; that he had visited Trombay number of times in connection with other works during the period commencing from August, 1966 and was aware that the Contractor had carried out approximately that much work during 1966; that the extra quantity required sanction of competent authority; that the previous bills passed showed that the major portion of the work was carried out during the period August to December, 1965 and about 7 lakhs CFT of cutting during December, 1965 to February, 1966; that A. section Krishnaswamy who placed the work order had countersigned bills upto 21 lakhs cft.
of cutting and 80,000 cft.
of filling as early as November 17, 1965 and subsequently K. section Joshi had countersigned a bill for an additional 7 lakhs cft.
of cutting and the contractor had already been paid Rs. 5.72 lakhs less security deposit; that he, therefore countersigned the bill dated December 30, 1966 and passed it on to M.E. for approval of the extra quantity of cutting; that M.E. approved on the same date and the bills was sent to Engineering Bills for scrutiny by the Accountant in respect of sanctions, work order terms etc; that he also particularly instructed that the bill should be shown to K. section Joshi before the pay order was issued since normally the bill should have gone to him for counter signature; that the Accountant carried out his instructions; that the counter signature did not denote final passing of a bill but only that it might be proceeded further and subjected to all the necessary administrative and financial checks before payment; that all the bills for the work had been certified by the Assistant Engineer incharge who was fully familiar with work and the previous bills had been counter 891 signed by colleagues of status equal to him; that he had no reasons to suspect any malpractice or mistakes and also there was no dispute with contractor; that he had exercise the normal technical checks which were the functions denoted by counter signature as per the prevailing practice and that countersignature did not imply correctness of the quantities certified by the Assistant Engineer (who alone was responsible for the correctness) in either the current or previous bills.
When the matter was thus pending, a confidential information reached Rege, the Deputy Superintendent of Police, C.B.I. (P.W. 27) who registered the case on December 27, 1967.
During the course of investigation, he visited the office of the Corporation, took charge of all the concerned documents, had the site measured by Shivashankar, Technical Examiner, Central Intelligence Service, (P.W.4) according to whom the cutting and filling work done by the contractor was to the extent of 9,61,000 cft.
and 1,50,000 cft.
respectively and after securing the requisite sanction, prosecuted A 1, A 2 and A 3 and also submitted the charge sheet against A 4 with the result that all the four accused were convicted.
In these appeals, we have had the advantage of hearing full dressed arguments of counsel on both sides who diligently prepared the case and put across their respective contentions with great ability.
We must point out at the outset that although the trial court had clearly acquitted A 1 of the charge under section 409 read with section 120 B and section 109 of the Indian Penal Code it unfortunately forgot to keep that fact in mind with the result that while concluding its judgment it held him guilty on that charge as well.
In the circumstances, it was not open to the High Court in the appeal by A 1 to go into that charge and reverse the findings arrived at by the trial court.
We will accordingly be concerned with the question of validity of A 1 's conviction under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act only but so far as A 2 is concerned, we will have to examine the validity of his conviction under all the charges.
Before examining the sufficiency or otherwise of the material bearing, on the charges against both the appellants, we consider it necessary to have a clear concept of the meaning and ambit of the phraseology "by corrupt or illegal means or by otherwise abusing his position as public servant" used in section 5(1)(d) of the Prevention of Corruption Act, 1947 (hereinafter referred to as 'the Act ') for the contravention of which the appellants have been convicted.
It will be advantageous in this connection to refer to two decisions rendered by this 892 Court in M. Narayanana Nambiar vs State of Kerala(1) and Major section K. Kale vs State of Maharashtra.(2) In the first case, Subba Rao, J. (as he then was) while construing clause (d) of sub section (1) of section 5 of the Act observed: "The pharaseology 'by otherwise abusing his position as public servant ' covers acts done otherwise than by corrupt or illegal means by an officer abusing his position.
The gist of the offence under this clause is that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage.
"Abuse" means misuse i.e. using his position for something for which it is not intended.
That abuse may be by corrupt or illegal means or otherwise than those means.
The word 'otherwise ' has wide connotation and if no limitation is placed on it the words 'corrupt ', 'illegal ' and 'otherwise ' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause.
So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say something savouring of dishonest act on his part.
The contention of the learned counsel that if the clause is widely construed even a recommendation made by a public servant for securing a job for another may come within the clause and that could not have been the intention of the Legislature.
But in our view such inocuous acts will not be covered by the said clause.
The juxtaposition of the word otherwise ' with the words "corrupt or illegal means" and the dishonesty implict in the word "abuse" indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause.
Whether he abused his position or not depends upon the facts of each case.
" Following the decision in M. Narayanan Nambiar vs State of Kerala (supra), it was held by this Court in Major section K. Kale vs State of Maharashtra (supra) that the abuse of a position in order to come within the mischief of the section must necessarily be dishonest so that it may be proved that the accused caused deliberate loss to the department.
It was further held in this case that it is for the prosecution to prove affirmatively that the accused by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other 893 person.
It would, therefore, be necessary to find out in this case as to whether the accused abused their position and acted dishonestly or with a corrupt or oblique motive in having the contract in question entrusted to A 4.
As the courts below have rested their judgments on a constellation of circumstances, it would be well to bear in mind the fundamental rule relating to the proof of guilt based on circumstantial evidence which has been settled by a long line of decisions of this Court.
The rule is to the effect that in cases depending on circumstantial evidence, there is always the danger that conjecture or suspicion may take the place of legal proof.
In such cases the mind is apt to take a pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely it is, considering such matters to cover reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
In cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypotheisis of the guilt of the accused.
Again, the circumstances should be of a conclusive nature and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far complete as not to leave any reasonable grounds for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
(See Hanumant Govind Nargundkar vs State of M.P.,(1) Palvinder Kaur vs State of Punjab(2) and Charan Singh vs State of U.P.(3).
The principle that inculpatory fact must be inconsistent with the innocence of the accused and incapable of explanation on any other hypothesis than that of guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable.
(See Govinda Reddy vs State of Mysore(4).
894 Keeping in view the aforesaid construction placed on section 5(1)(d) of the Act and the principles with regard to proof of guilt based on circumstantial evidence, let us now turn to the various circumstances which have been relied upon by the High Court in holding the appellants guilty and see whether they factually exist and if so whether they are of such a character as to be wholly incompatible with the innocence of the appellants and consistent only with their guilt.
In so doing, we purpose to divide the aforesaid circumstances under the following broad heads and deal with them seriatim: 1.
The conduct of the appellants evidencing their keenness to have the contract entrusted to A 4. 2.
Issue of work order (Exh. 19) with inflated figures relating to rock cutting and filling.
Removal of statement of level plan (Exh. 22) and work sheet (Exh. 23) from the departmental file and fabrication and substitution in their place of the fabricated ones by A 3. 4.
Despatch on August 19, 1965 of spurious level plan (Exh. 24) and its copy (Exh. 38) by A 2 to A 4 as annexures to Exhibit 106.
Counter signing of the on running bills by A 2. 6.
The initialling of the final bill by A 1.
The first circumstance relied upon by the High Court in this behalf is that though the revised tender notice was limited to the eleven contractors who had originally submitted their tenders in response to the Tender Notice (Exh. 28), the appellants improperly got a tender form issued to A 4 and entertained by the Tender Committee.
It is true that the copies of Exhibit 15 on which the prosecution has sought to rely were sent by registered post to the eleven original tenderers by the Engineering Department of the Corporation but it cannot be overlooked that there is nothing in Exhibit 15 or elshhere on the record to indicate that other contractors were precluded from submitting their tenders or that the corrigendum extending the date for submission of the tenders was neither intended to be published nor was it actually published.
It seems that the attention of the High Court was not drawn to the communication (Exh. 29) dated March 9, 1965 addressed by Ranganath, Public Relations 895 Officer, to the Advertisement Manager, Times of India and others and the corrigendum forming annexure thereto which ran as under: " INDIAN OIL CORPORATION LIMITED (MARKETING DIVISION) Clarke Road, Mahalaxmi, Bombay 34, WB, India IN REPLY PLEASE REFER TO PR 31 317 9th March, 1965 To The Advertisement Manager, The Times of India, (Bombay) The Indian Express, (Bombay) Free Press Journal, (Bombay) Dear Sir, Subject: Tender No. 249/65 Corrigendum Attached is text of an advertisement for IMMEDIATE Publication utilising the minimum possible space under Public Notice/Tenders or in its appropriate place.
We would appreciate your treating this request as URGENT.
Thanking you.
Yours faithfully, Sd/ (B. V. Ranganath) Public Relations Officer Encl: One.
Engineering Manager, H.O. with reference to their inter office memo No Eng/ASK dated 9 3 1965.
We are trying to get it published on March 10.
INDIAN OIL CORPORATION LTD.
(MARKETING DIVISION) Corrigendum to Public Tender No. 249/65 The last date for receiving this Tender has been extended to 15th March, 1965 at 2 30 P.M. and will be opened the same day at The attention of the High Court also does not seem to have been invited to the above noted endorsement at the foot of Exhibit 29.
The High Court also seems to be wrong in thinking that out of the nine contractors who submitted their tenders in response to the revised tender notice, eight were from the original nine tenders and the ninth was A 4.
A comparison of the two lists viz. the one of the original tenders and the other of those contactors who submitted their tenders in response to the revised tender notice would make it clear that five contractors appearing in the second list were fresh tenderers.
The Financial Controller 's note (Exh. 17) dated April 2, 1965 which appears to be the outcome of some personal pique itself shows that it was only on April 15, 1965 that it was agreed between the members of the Tender Committee that the grant of the contract would be confined to one the of the three lowest tenderers, one of whom was A 4.
The fact that none of the eleven officers of the Finance and the Engineering Department of the Corporation who handled the file relating to the grant of the contract in question ever raised any objection regarding the improper reception or entertainment of A 4 's tender by the Engineering Department is a proof positive of the fact that there was nothing wrong about the issue of tender form to A 4 or its entertainment by the appellants.
Thus it is clear that the first circumstance relied upon by the High Court had no factual existence and could not be pressed into service against the appellants.
The next finding of the High Court that while Ram & Co. was best fitted for entrustment of the contract in question in view of the vast experience and equipment possessed by it, A 4 did not have any such merit.
It is a matter of common knowledge that rock cutting is not a specialised job and no extra ordinary skill or experience is required for the same and that every civil construction involves some sort of rock cutting.
It is also in evidence that A 4 who was the Corporation 's old and tried contractor had previously executed 98 works including the one on the An top Hill in Bombay for the Corporation to its entire satisfication, and out of the aforesaid works many related to installations which were more complicated than rock cutting and filling.
It would also be noticed that in the notes put up 897 by them neither Srivastava (P.W. 5) nor Shivananda, Superintendent, nor Khurana, Assistant Financial Controller of the Finance Department, nor the Operation Manager ever pointed out that A14 lacked the requisite experience or competence which disentitled him to the grant of the contract.
In fact Shivananda and Khurana had suggested as an alternative to inviting fresh tenders that A 4 should be asked to reduce his rates in view of the revised figures on account of which the value of the contract had gone up considerably.
It would also be noticed that the High Court while rightly holding that Exhibit 122 was not delivered to A 1 by Roshan Lal (P.W. 19) tell into an error in observing that A 1 had a hand in suppressing it.
It seems to have escaped its notice that at the negotiations conducted on April 17, 1965 with the three lowest tenderers viz. Ram and Co., Liberty and Co., and A 4 by the Tender Committee, of which P.W. 5 was a prominent member, Roshan Lal was present and while pressing his firm 's claim to the grant of the contract he did draw the attention of the members of the Committee to the contents of Ext.
122 sent earlier by his firm to the Corporation.
This is evident from Roshan Lal 's own admission that he informed the corporation in writing as to his experience in the line and whatever he had written he had also told the concerned officers who were two or there in number.
If A 1 would have had a hand in suppressing Ext.
122 he would not have allowed it is to remain on the file.
That apart a bare perusal of report Ext.
33 which is fairly detailed is enough to show that neither A 1 nor A 2 was interested in suppressing or distorting any material fact.
There was, therefore, hardly any justification for the observation in question.
The third finding of the High Court that the appellants told Vrindani (P.W. 20) and Vaidya (A 3) that it had already been decided to entrust the contract to A 4 and in order not to loose time, a joint survey should be made, is also erroneous.
It is unbelievable that A 1 and A 2 who were pre occupied with several projects would go and tell Vrindani who was three or four steps below them and was admittedly not a member of the conspiracy nor concerned with policy matters that it had been already decided to assign the contract to A 4.
The aforesaid briefing attributed to the appellants also seems to be incredible in view of the fact that it was only on the basis of the level measurements taken by P.W. 20 and A 3 during the survey made by them between March 20 and 26, 1965 that A 4 turned out to be the lowest tenderer and at the time when the briefing is alleged to have been given the lowest tender was of Ram & Co. 898 The insinuation implicit in the fourth finding of the High Court that Exts.
16, 17, 30 33 and 123 led to the inference that A 1 was the author and architect of the proposal for acceptance of A 4 's tender, is also unwarranted.
There is nothing in these documents which can be interpreted to indicate that the appellant was actuated by any ulterior or corrupt motive or that he was guilty of any mis demeanour, irregularity or impropriety.
On the contrary the said documents particularly Exts.
16 and 33, which like an open book fairly set out all the facts and circumstances bearing upon the allotment of the contract in question including the claim thereto of Ram & Co. not only manifest, that the procedure referred to by P.W. 1 in his deposition for inviting and finalizing the tenders was meticulously followed in the present case, but also establish A 1 's bona fides.
It has also to be borne in mind that the Tender Committee which comprised of the Operation Manager and the Financial Controller in addition to A 1 had only an advisory role to play and the decision to entrust the contract to a particular contractor lay with the Chairman of the Board of Directors in consultation with the coordinator and Sales Manager who was above the Tender Committee.
That the appellant 's proposal favouring A 4 was in the interest of the corporation both from the point of view of economy as well as speedy and satisfactory execution of work and was solely inspired by his concern to avoid the sad experience which the corporation had in respect of rock cutting work at An top hill with the Kore Brothers which was a new party is evident from the following endorsement made on A 33 by H. B. Patel, Operation Manager: "In view of the urgency and our past experience with a new party at An top hill, I agree to Senior Engineer 's proposal that we give the job to M/s. N. N. Desai at the lowest tendered rates.
" The fifth finding of the High Court that the appellants had negotiations on their own with A 4 with a sinister object is also against the weight of the material on the record.
The act of the appellants in trying to ascertain from A 4 whether he was prepared to reduce his rates to the level of M/s. Ram & Co. which seems to have been taken in consultation and agreement with P.W. 5 was, in our opinion, guiltless, It would be well to remember in this connection that Shrivastava P.W. 5 himself admitted in the course of his deposition that there was practice in their corporation of asking the second lowest tenderer to match his rates with the lowest tender.
The proposal about the allotment of work in favour of A 4 was, therefore, not only consistent with the practice but was also in the interest of the corporation.
899 In view of the foregoing we are inclined to think that the conduct of the appellants in prefering A 4 to any new contractor did not savour of dishonest intention.
Re. 2: Coming to the work order (Exh. 19) containing inflated figures which is the corner stone of the prosecution case, it may be pointed out that the prosecution has not been able to produce any evidence showing the circumstances under which it was prepared.
The observation od the High Court that the work order must be the creation of not only A 2 but of A 1 as well seems to be based upon mere conjecture.
It would be noticed that the work order does not bear the signatures of A 1 and there is nothing to show that in the normal course, the work order had to come to A 1 before being issued to A 4 We cannot also in this connection afford to lose sight of the observations made by the trial court at page 279 of the Paper Book that 'it is a common ground that accused No. 1 is not concerned with the making of the order and that it is also a common ground that a work order is issued by the Engineer Incharge '.
In these circumstances, it is difficult to understand how the High Court came to the conclusion that the work order (Exh. 19) was the creation of not only A 2 but of A 1 as well.
It seems that the finding of the High Court was influenced by its finding with regard to Exhibits 16 and 33.
In view, however, of our finding with regard to Exhibits 16 and 33, the observation of the High Court that the work order was also the creation of A 1 cannot be substained.
We will, accordingly advert to the material on the record with a view only to see how far it reflects on the bonafides of A 2.
The prosecution has not led any evidence to prove that A 2 dictated or prepared the work order.
The proven facts show that according to the normal practice prevalent in the department it is not the Senior Engineer like appellant No. 2 who is incharge of the Project that prepared a work order but an assistant or Junior Engineer in charge of the work working under him.
Although Varandani has in the course of his deposition tried to suggest that the work order was prepared by A 2, his suggestion cannot be relied upon in the face of Exhibit 67 wherein he told P.W. 1 that the work order was presumably prepared by Vaidya, A 3.
It is highly improbable that on the very day of the grant of the sanction of the contract in question A 2 would take the extremely hazardous step of inflating the figures to obtain undue advantage for A 4 specially when he knew that the fraud would be at once discovered by reference to the sanction which had been transmitted to the Finance Department.
The prosecution theory that the work order giving inflated figures was not only signed but was also prepared by A 2 is also negatived 900 by the following endorsement on the copy of the work order sent to the Bills and Accounts Sections of the Engineering Department of the Corporation: "The above has Chairman 's approval on our note of even reference dated 7th April, 1965.
Please have the agreement executed.
Earnest money of unsuccessful tenderers may be refunded early.
" The above quoted endorsement completely demolished the prosecution case.
If A 2 had been the author of Exhibit 19, or had suspected that his subordinate would have dared to inflate the quantities of the work, it is inconceivable that he would have made the above quoted insertion giving the particulars of the above mentioned note meant for the Chairman 's aproval in the copy of the work order addressed to the Bills and Accounts Sections which would have furnished a valuable clue for the speedy detection of the fraud that is alleged to have been perpetrated.
Again if A 2 were really a conspirator who had falsely inflated the figures of rock cutting and filling in the work order he would have seen to it that the potential documentary evidence embodied in Exhibit 125 which showed the genuine levels on the spot was destroyed or done away with.
The fact that he did not do anything of the kind raises a strong doubt about his culpability.
Thus though it cannot be gainsaid that A 2 has been extremely negligent in not scrutinising the papers, it seems to us that he affixed his signatures in a routine manner to the work order prepared by his subordinate engineer without realizing the importance of his act placing implicit faith in the integrity of the latter.
Re. 3: There is no clear, cogent and convincing evidence to show that A 1 or A 2 or both had a hand in the removal of the level plan (Exh. 22) or the work sheet (Exh. 23) from the departmental file relating to the contract in question and substitution in their place of the faked level plan (Exh. 24) and work sheet (Exh. 38) which were admittedly fabricated by A 3.
The statements made from time to time by A 3 in this behalf being contradictory and discrepant as would be evident from the following table: ____________________________________________________________ section Date No.of Text of the statement No the Exhi bit ____________________________________________________________ 1 28 3 1967 21 The Original estimates for cutting and filling were 16,80,000 cft.
and 8,00,000 cft.
respectively.
It was later revised 23,30,450 cft.
and 31,500 cft 901 ____________________________________________________________ section Date No.of Text of the statement No the Exhi bit ____________________________________________________________ for cutting and filing.
Later on I was advised by my superior in Engg.
Dept., E and Dy.
E.M. to give a still further upward revision giving the quantities as 29,30,450 cft.
for cutting and 90,000 cft.
for filling.
2 1 4 1967 36 ASK, KSJ and SPB asked me to substi tute SHS relating to rock cutting & filling at Trombay which was resulted in larger quantities of cutting and filling and they are fully aware of it.
3 18 4 1967 39 & 41 I told R. Krishnaswamy when he called me on 29 3 1967 that A.S. Krishnaswamy and K.S. Joshi told me to change the levels of drawings of Trombay plot regarding rock cutting/filling job .
In reply to the further query of R. Krishna swamy, I told him that I did not inform M.E. about this and that he might be knowing.
5 20 5 1967 69 In addition to the statement dated 18 4 1967, I have to submit that I was asked to change the original contour, place by A.S. Krishnaswamy, Senior Engineer.
6 4 8 1967 43 Sometime in September, 1965, A.S. Krishnaswamy told me to increase the levels at random and bring the quality to about 30 lakhs cft.
I did so accordingly.
7 4 8 1967 42 The Engineering Manager called me and Shri Joshi into his room one day and instructed me personally to increase the quantity.
____________________________________________________________ the prosecution ought to have made a serious attempt to produce K. section Joshi whose testimony was essential to clear up the mystery in which the whole affair is shrouded.
The non production of K. section Joshi who appears to have been one of the main actors in the drama has left a lacuna which is very difficult to bridge.
In the present state of evidence, it is inconceivable that A 1 who admittedly had a meritorious record of service, had won commendation from the Board of Directors for designing a tank and saving considerable sums of money and who was the only Head of Department to be given three advance increments for his integrity and efficient work and who had no are to grind would be a party to the unholy conspiracy for the removal of genuine level plan and work sheet and their substitution by spurious ones simply to obtain some pecuniary advantage for A 4 who was neither his friend nor relative.
The position of A 2 is also 902 not materially different as in his case also the prosecution has not been able to show that he derived any monetary gain out of the transaction.
Re. 4 : A bare perusal of statement contained in Exhibit 43 which according to H.N. Roy Chowdhary (P.W. 2) and C. L. Shriyan (P.W. 23) was voluntarily and without any pressure made by A 3 is enough to show that it was in September, 1965 that A 3 increased the levels shown in the original drawings and brought up the quantity of rock cutting to 30 lakhs cft.
This statement totally knocks the bottom out of the prosecution case that the spurious level plan and the work sheet were despatched to A 4 on August 19, 1965 as annexures to Exhibit 106.
If the spurious plan and the work sheet came into existence in September, 1965, it is difficult to understand how they could be despatched to A 4 alongwith Exhibit 106 on August 19, 1965.
The conclusion, therefore, is irresistible that when the communication (Exh. 106) was despatched to A 4, it was not accompanied by fabricated level plan (Exh. 24) and work sheet (Exh. 38) but by the genuine ones viz. Exhibits 22 and 23 and that it was later on that the genuine ones were removed and retained by A 3 who during the course of the enquiry by R. Krishnaswamy (P.W. 1) brought them from Ahmedabad and handed them over to P.W. 1.
The ommission on the part of Shriyan who claims to be certain that A 3 got the tracings Exhibits 24 and 38 prepared by him in April/May, 1965 to contradict A 3 when he made the aforesaid statement (Exh. 43) is also intriguing and lends assurance to the correctness of our conclusion.
5: The first thing to be borne in mind with regard to the measurement certificates on the running bills is that it is the Assistant Engineer incharge of the work who is responsible for taking measurements of the actual quantities of the work executed by the contractor for entering the same in the measurement book and for recording a certificate that the measurements given in the bill are of the actual work carried out on spot in accordance with the Department 's drawings and specifications.
It has also to be remembered that A 1 had to look after the Corporation 's projects and installations all over India and A 2 had to look after and supervise a large number of the Corporation 's projects under the Western Branch which included installations at Sabarmati, Ahmedabad, Okha and Kandla in Gujarat and Sewri, Wadala and Trombay in Maharashtra and parts of Madhya Pradesh.
It cannot also be ignored that according to Ganpati (D.W. 3) when a Senior Engineer visits the site, he determines the progress of the work by visual inspection determining visually the approximate 903 quantity of the work done.
All this apart, an examination of the running bills (Exhibits 51, 53, 54, 55 and 56) shows that all of them bear the certificates as referred to and reproduced at page 11 of this judgment.
It would be noted that whereas first three of these bills bear the counter signatures of A 2, Bill (Exh. 55) bears the countersignatures of K. section Joshi, Senior Engineer and Bill (Exh.
56) bears the counter signatures of Ramrao, another Senior Engineer, who was absolved in the departmental enquiry.
Now the fact that A 2 countersigned the first three bills does not appear to be material in view of the following statement made by Ramrao vide Exhibit 107: "I had no reason to doubt Shri Vaidya 's figures.
Countersignature of a bill as per our prevailing practice is not indicative of verification but only indicates that there is no reason to doubt the correctness of the figures.
" The fact that K. section Joshi, Senior Engineer, also countersigned the bill (Exh. 55) which contains inflated figures and no action was taken against him also lends assurance to the inference that the counter signatures were appended merely as a routine by the Senior Engineers who seem to have reposed blind and unflinching faith on the honesty of their subordinates.
Now if Ramrao who countersigned the bill (Exh. 56) showing the quantity of cutting work as 31 lakhs cft.
was exonerated in the departmental enquiry and no action was taken against K. section Joshi who made the wrong endorsement in respect of the measurement on Exhibit 55 or against Vora who had prepared the note (Exh. 58) showing that the work had been completed, it is difficult to understand how A 2 could be treated differently and criminal intention attributed to him.
The finding of the High Court in respect of the third running bill (Exh. 54) that the very defence of A 2 would itself furnish the best evidence of the conspiracy involving A 1 is not correct for apart from other infirmities from which if suffer, it is well settled that the defence taken by one accused cannot in law be treated as evidence against his co accused.
Re. 6 : The finding of the High Court that A 1 signed the bill (Exh. 56) and sanctioned excess amount involved knowing full well that the bill was not true is also against weight of the evidence on the record.
It cannot in the first instance be forgotten that it was on July 29, 1965 that A 1 could have had occasion to see the figures of the work for which sanction was granted by the Chairman of the Board of Directors and the bill (Exh. 56) was put up to him on 904 December 30, 1967.
In the absence of the sanction from which the genuine figures could have been gleaned, it would not be reasonable to expect A 1 to remember the sanctioned figures after the lapse of 17 months specially when it is admitted on all hands that being the head of the Engineering Department, he had to tour extensively to supervise several projects spread all over the country and to discharge multifarious duties in connection therewith.
The bill, it would be noted was prepared by A 3 and was countersigned by no less a functionary than the Deputy Engineering Manager, Ramrao, who was next below A 1 in the hierarchy of the Department.
In the note prepared by him, it was not pointed out by A 3 that the bill had to go to the Managing Director.
The evidence in the case also shows that A 1 was not expected to meticulously scrutinize the bill but was concerned only with the initialling of the note which although it had passed through several hands did not indicate that the competent authority to grant sanction for the excess amount was the Chairman of the Board of Directors.
It will also be wrong to hold A 1 responsible for simply initialling the note contained in Exhibit 56 without examining Ramrao who approved the bill including the note and also countersigned the measurement certificate before it came to A 1.
In the circumstances, the mere initialling by A 1 of the bill alongside the note marked for him by A 2 is, therefore not a circumstance which can unmistakably be said to point to the guilt of the appellant.
An analysis of the circumstantial evidence adduced by the prosecution does not in our opinion lead to an unerring certainty that A 1 and A 2 acted with any dishonest or corrupt motive or abused their position.
In conclusion we cannot help observing that non examination by the prosecution of Ramrao, Joshi, Vora and Patel who were material witnesses for the unfolding of its case has left some yawning gaps in the evidence which we have found very difficult to bridge.
If these persons had been produce many of the points which have remained obscure and hidden up would have been cleared up.
For the foregoing reasons, we allow the appeals, set aside the convictions of the appellants and the sentences imposed upon them and acquit them of the offences with which they were charged.
P.B.R. Appeals allowed.
| The appellant idol, a juristic person, was exercising the rights, through the Shebait, Mohanta Srimati Dandi Swami, of a Darpatnidar in the land in suit.
By a lease deed (exhibit A), dated July 10, 1941, the appellant granted to the respondents a lease of the suit land for the purpose of raising and taking sand out of the land for a period of nine years ending on July 13, 1949.
Subsequently, on April 27, 1950, the appellant made a similar grant (exhibit I) for another nine years expiring on April 13, 1959, but this grant was called "licence".
The respondents did not pay the licence fee for the period 1362 (14 4 1955) to 1365 B.S.
The appellant thereupon issued notice dated March 31, 1966, terminating the 'licence ' and then filed a suit No. 37 of 1960 for ejectment of the respondent in the Court of the Munsiff, Chandernagore.
The trial court having dismissed the suit, the appellant filed a first appeal which was allowed.
In second appeal the High Court restored the decree of the trial court.
In appeal by special leave to this Court, it was contended on behalf of the appellant: (a) The transaction evidenced by the document (exhibit I) dated April 277 1950 was a 'license ' for taking away sand and not a 'lease ' of immovable property.
Therefore, the appellant intermediary will be considered to be in Khas possession of the holding on the date of vesting (April 1, 1955) through the licensee and as such.
entitled to retain it under Section 6 of the Bengal Estates Acquisition Act.
1953; (b) Section 28 of the Bengal Estates Acquisition Act, 1953 is not applicable because there was no 'mine ' in the suit land, as defined in the Central Act 67 of 1957; the sand deposits naturally exist on the surface and not below it and mere collection and removal of the sand from the surface did not constitute mining operations.
therefore, it could not be said that the suit land was comprised in a mine or appertained to a mine within the meaning of the said Section 28; (c) Even if the land was a 'mine ' or appertained to a mine, the mine was being worked by the appellant through a licensee, and as such, was being 19 'directly worked ' by the appellant intermediary within the contemplation of Section 28 of the Bengal Estates Acquisition Act, and therefore, the land would be deemed to have been leased to the appellant by the Government.
Rejecting these contentions, and dismissing the appeal, ^ HELD: A.
In ascertaining whether a document evidences a 'lease ' or a 'licence ', regard must be had to the substance of the transaction and not merely the words or the form in which it is dressed.
[26F] .
The document (exhibit I the Agreement), in the instant case reveals the following characteristics.
which show that in fact and substance, it is a 'lease" and not a 'licence ': [27E, 32C] (i) A right to "raise ' and "take out" and remove sand "lying inside" the land in dispute was granted by the plaintiff to the defendant.
The words "raise" and "take out sand" from "inside" the land are wide enough to include not only the "right to carry out all the operations" necessary for extracting sand, but also to take it away and appropriate it.
Construed in the context of the document as a whole, these words put it beyond doubt that right to carry out "mining operations" [within the definition in Cl.
(d) of section 3 of the Central Act 67 of 1957] for winning sand and to appropriate it, were granted.
[27F G] (ii) The rights were granted for a period of 9 years, commencing from April 27.
[27H] (iii) These rights were granted for a "price" fixed on yearly basis, irrespective of the quantity of sand extracted.
The "price" fixed is Rs. 66/ per annum.
This consideration is payable in the month of Chaitra every year.
In case of default, the First Party (grantee) shall not be entitled "to raise the sand next year" and the Second Party (grantor) shall have a right to recover the arrears of rent together, with interest at 12% by bringing a suit against the First Party.
[28A B] (iv) "The Second Party will be entitled to take Khas possession of land" "at the end of the stipulated period.
This condition, (contained in paragraph 4 of exhibit 1) read along with the other parts of the document necessarily implies that if the First Party continues to pay the "price", as stipulated, (a) he shall be entitled to enter into and remain in exclusive khas possession of the land for the purpose of carrying out the mining operations for the full stipulated period of 9 years and (b) the Second Party (plaintiff) will not be entitled to retake khas possession of the land and revoke the so called "licence" before the end of the said period of 9 years.
[28B D] The term "lease" occurring in the definition of "mining lease" given in cl.
(c) of section 3 of the Mines and Minerals (Regulation and Development) Act is not used in the narrow technical sense in which it is defined in section 105 of the .
A mining lease may not meticulously and strictly satisfy in all cases, all the characteristics of a "lease" as defined in the .
Nevertheless, in the accepted legal sense, it has always been regarded as a lease in this country.
[29E G] In the instant case the transaction evidenced by exhibit I not only falls within the definition of a mining lease under Act, 67 of 1957, but also partakes of 20 all the essential characteristics of a "lease" defined in section 105 of the .
[30 A B] Balakrishna Pal vs Jagannath Marwari, ILR ; approved Raj Kumar Thakur Girdhari Singh vs Megh Lal Pandey LR 44 I.A. 246; Gowan vs Christie, ; differed.
The negative definition of "immovable property" given in section 3, Para 1 of the , is not exhaustive.
Therefore, applying the definition given in section 3(26) of the General Clauses Act (X of 1897) to the expression used in the , except as modified by the definition in the first clause of section 3 every interest in immovable property or a benefit arising out of land, will be 'immovable property ' for the purpose of section 105, .
[30E G] A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a right to enjoy immovable property within the meaning of section 105, more so, when it is coupled with a right to be in its exclusive khas possession for a specified period.
The right to enjoy immovable property spoken of in section 105, means the right to enjoy the property in the manner in which that property can be enjoyed.
If the subject matter of the lease is mineral land or a sand mine, it can be enjoyed and occupied by the lessee by working it as indicated in section 108 of the which regulates the rights and liabilities, of lessors and lessees of immovable property, [30G H, 31A] Nageshwar Bux Roy vs Bengal Coal Company, [1930] LR 58 IA 29; applied.
H. V. Low & Co. Ltd. vs Joyti Prasad Singh Deo, Cal. 699; LR 58 IA 392.
differed from.
Commissioner of Income Tax, Bihar and Orissa vs Kumar Kanakhaya Narain Singh, ILR (XX) Patna 13; approved.
The true character of the transaction evidenced by the document (exhibit 1) being that of a 'lease ' and not a 'licence, ' Section 6(1)(i) of the West Bengal Estates Acquisition Act, 1953 will not cover the appellant 's case and give him a right to retain the land in dispute, even if section 28 of that Act was out of the way.
[32C D.] B.
The definition of "mining operations" and "mine", in the Central Act 67 of 1957 are very wide.
The expression "winning of mineral" in the definition of "mining operations is spacious enough to comprehend every activity by which the mineral is extracted or obtained from the earth, irrespective of whether such activity is carried out on the surface or in the bowels of the earth.
Mines and minerals need not always be sub soil and there can be minerals on the surface of the earth.
[24G] B. Dass vs State of U.P. ; , reiterated.
It is true that in the definition of "mine", the term "excavation" in the ordinary dictionary sense means "hole", "hollow" or "cavity made by digging out".
But the word "any" prefixed to "excavation" in the context of the phrase "for the purpose of searching for or obtaining mineral" gives it a 21 much more extensive connotation, so that every "excavation", be it in the shape of an open cast cavity or a sub terranean tunnelling, will fall within the definition of 'mining operations '.
The essence of 'mining operations ' is that it must be an activity for winning a mineral, whether on the surface or beneath the surface of the earth.
[24H, 25A B] In tho instant case, the land in dispute has large deposits of sand, which is a minor mineral.
The sand was admittedly being excavated and removed by the respondent lessee.
The land was, thus, at the date of vesting, "com prised in or appertained to a 'mine ' within the meaning of section 28 of the West Bengal Estates Acquisition Act, 1953.
[25B C] C.
The phrase "being directly worked by him" in section 28 of the West Bengal Estates Acquisition Act, 1953, will not take in a case where the mine was being worked through a lessee or licensee to whom the right to conduct mining operations and to take away the mineral had been granted by the intermediary in consideration of receiving a periodic rent, royalty or a like amount.
[25E F] The word "directly" means "in a direct way, without a person or thing coming between", immediately as directly responsible.
The use of the expression "directly" in the context of the word "worked", followed by the words "by him" unmistakably shows that the legislative intent was to allow only those intermediaries to retain land comprised in or appertaining to a mine, as lessees under the State, who immediately before the date of vesting, were working the mine under their immediate control, management and supervision.
[25C E] Section 28 of the West Bengal Estates Acquisition Act, 1953 denies the right to retain the land comprised in a mine or appertaining to a mine, if, at the material date, it was not being directly worked by the intermediary but through a licensee, or other agency to whom the right to conduct mining operations had been granted by the intermediary.
In that respect, the provisions of s.28 are contrary to those of section 6(1)(i), which give to an intermediary a right to retain land held by him in khas for the purpose mentioned therein through a licensee.
In this situation, according to the legislative mandate in section 27, the provisions of section 6(1) (i) must yield to those in section 28.
[26 B C] Thus, even on the assumption that the respondent was at the material date, holding the land in Khas through a licensee and fulfilling all other conditions which entitled him to retain under section 6 (1) (i), then also, the case being in conflict with section 28, the latter section would prevail over the former.
[26D & 32E]
|
ON: Civil Appeal No. 786 of 1976.
From the Judgment and Order dated 12.1.
1976 of the Gujarat High Court in Special Civil Application No. 873 of 1970.
516 P.H. Parekh for the Appellant.
Krishan Kumar for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the High Court of Gujarat dismissing the appel lant 's writ petition made under Article 227 of the Constitu tion of India challenging the validity of the order of the Revenue Courts in dismissing the appellant 's suit for evic tion of respondents.
Briefly, the facts giving rise to this appeal are: the respondents are tenants of agricultural land which had been let out to them by the appellant 's predecessors in title.
The appellant made applications on behalf of minor Ashok Kumar for the eviction of the respondents on the ground that the agricultural land in dispute was bona fide required by the landlord for his personal cultivation.
The appellant pleaded that the land in dispute had been bequeathed to him by his maternal grandmother under a Will and as such he was the landlord of the disputed land entitled to maintain the applications for eviction of the respondents under Section 29 read with Section 3 IA of the Bombay Tenancy and Agricul tural Lands Act 1948 (hereinafter referred to as the Act) as applicable to the State of Gujarat.
The tenants raised a preliminary objection to the maintainability of the suit on the ground that the appellant being a transferee of the land from his maternal grandmother was not entitled to maintain the suit as a landlord under Section 31A of the Act, inas much as he had not inherited the property from his ances tors.
The Mamlatdar upheld the preliminary objection and dismissed the eviction ' suit.
On appeal the District Deputy Collector upheld the order of the Mamlatdar.
The appellant preferred revision application before the Gujarat Revenue Tribunal at Ahmedabad but the same too was dismissed uphold ing the tenants ' objection.
The appellant thereafter filed a writ petition under Article 227 of the Constitution before the High Court challenging the correctness of the view taken by the Revenue Courts.
The High Court by its order dated 12.1.
1976 dismissed the writ petition on the finding that the view taken by the Revenue Courts in upholding the ten ants ' objection to the maintainability of the eviction suit was correct.
The appellant has preferred this appeal against the aforesaid order of the High Court.
There is no dispute that under Section 31A of the Act a landlord has a right to determine tenancy of agricultural land and to evict the 517 tenant on fulfilling the conditions prescribed therein.
The conditions prescribed are that if the landlord has no other land of his own and if he has not. been cultivating person ally any other land, he is entitled to take possession of the land let out to a tenant to the extent of permissible ceiling area.
If the land cultivated by the landlord person ally is less than the ceiling area he is entitled to take possession of so much area of land as would be sufficient to make up the area in his possession to the extent of ceiling area.
further the income by the cultivation of the land of which he is entitled to take possession should be the prin cipal source of income for his maintenance.
These conditions as laid down in clauses (a), (b) and (c) of Section 31A of the Act must be satisfied for making an application for the eviction of a tenant from agricultural land.
In addition to these conditions, clause (d) further prescribes additional conditions which must also be fulfilled by the landlord.
Section 31A(d) as amended by the Gujarat Act No. XVI of 196(1 reads as under: "31.A The right of a landlord to terminate a tenancy for cultivating the land personally under Section 31 shall be subject to the following conditions.
(a) . . . . . . . . (b) . . . . . . . . (c) . . . . . . . . (d) The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January, 1952 and thereafter during the period between the said ,date and the appointed day in the name of the landlord himself.
or of any of his ancestors (but not of any person from whom title is derived, whether by assignment or Court sale or otherwise) or if the landlord is a member of a joint family, in the name of a member of such family.
" The above provision primarily requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.
1952 and he should further be recorded as landlord on the appointed day, namely, 15.6. 1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction of the tenant will not be maintainable.
The provision 518 of clause (d) further provides that even if the landlord 's name is not recorded.
but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provision indicates the legisla tive intent that a person succeeding to the property from his ancestor is entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
Clause (d) of Section 31A of the Act as it stood before its amendment by the Gujarat Act XVI of 1960 reads as follows: "The land leased stands in the record of rights or in any public record or similar revenue record on the 1st day of January 1952 and thereafter during the period between the said date and the appointed day in the name of the landlord himself, or of any of his ancestors, or if the landlord is a member of a joint family in the name of a member of such family.
" The above provision before its amendment was interpreted by the Bombay High Court in Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267.
The High Court placing reliance on Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201 held that the term 'landlord ' according to clause (d) of Section 31A of the Act included any person from or through whom he may have derived his title to the land, and therefore for proper compliance of the conditions mentioned in clause (d) of Section 3 IA it is sufficient that either the name of the claimant or his predecessors in title stands in the record of fights during the required period.
A Full Bench of the Gujarat High Court in Bhanushanker Ambalal vs Laxman Kala & Ors., [1960] 1 Gujarat Law Reporter 169 disagreed with the view taken by the Bombay High Court in Warnan Ganesh Joshi 's case (supra).
The Full Bench held that the expression "in the name of landlord himself" occurring in clause (d) of Section 3 IA must be read as the landlord individually and not any one claiming through him as a successor in interest, therefore a transferee from a landlord in whose name the land is shown to stand cannot fit into the structure of the clause.
The Full Bench judgment was rendered on 28.7.
1960 prior to the amendment of the Section by the Gujarat Act XVI of 1960.
After the amendment of Section by Gujarat Act XVI of 1960, the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of 519 right during the relevant period were not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment.
court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
The Legislature has clearly laid down that a person inheriting property from his ancestor would be landlord provided his ancestor 's name appears in the record of right during the required period.
But a person claiming title on the basis of transfer, assignment, auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendants by gift or will to evade the ceiling law and to evict tenants.
Under Section 31A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
In Umraomiya Akbarmiya Malek vs Bhulabhai Mathurbhai Patel & Anr., [1965] 6 Gujarat Law Reporter 788 the peti tioner therein made application for eviction of tenant claiming to be landlord on the basis of a gift made in his favour by his maternal grand father who was recorded in the record of rights during the required period.
The question arose whether the once who had acquired the property under a gift made by his maternal grand father was a landlord within the meaning of clause (d) of Section 31A.
The High Court on an elaborate discussion held that the petitioner therein was not a landlord within the meaning of the Section.
A Division Bench of the High Court of Gujarat in Special Civil Appeal No. 112/63 decided on March 3, 1972 considered the question whether a person who obtained the property under a Will from his grand mother was a landlord under clause (d) of Section 31A of the Act, the Division Bench held that having regard to the context, the object and scheme of the enactment such a person was not a landlord within the meaning of clause (d) of Section 31A.
The Bench further held that the Legislature intended to restrict the right of landlord to obtain possession for bona fide cultivation purposes, and it did not intend to include the case of a landlord who derived title under a Will.
We arc in agreement with the view taken by the Division" Bench.
The learned single Judge of the High Court while rendering the, impugned judgment followed the view taken by the aforesaid Division 520 Bench.
In this view, we find no legal infirmity in the impugned judgment of the High Court.
Learned counsel for the appellant referred to certain decisions of the Bombay High Court where contrary view had been taken.
Since the interpretation of Section 31A(d) of the Act as made by the Gujarat High Court in the aforesaid decision has been the law for the last 25 years.
and as that interpretation is justified having regard to the legislative history of the Section, we do not consider it necessary to deal with those decisions.
The appeal fails and is accord ingly dismissed.
but there will be no order as to costs.
V.P.R. Appeal dismissed.
| Appellant on behalf of minor landlord, who got title by will, initiated eviction proceeding against the respondent tenants under Section 29 read with section 31 A(d) of the Bombay Tenancy and Agricultural Lands Act.
1948 before the Mamlatdar on the ground of bona fide requirement of the land for his personal cultivation.
Respondent tenants raised preliminary objection on the question of maintainability of the suit on the ground that as the appellant, being a trans feree of the land and having not inherited the same was not the 'landlord ' under Section 31 A. Upholding the objection of the Respondents the Mamlatdar dismissed the application.
Appellant 's appeal before District Deputy Collector and his revision before the Revenue Tribunal were dismissed.
Chal lenging the orders of the Revenue Courts, writ application was filed in the High Court, which was also dismissed and against which the present appeal was filed.
Dismissing the appeal, this Court, HELD: 1.
Section 31(d) requires that the name of the person applying for the eviction of the tenant or of his ancestors should be recorded as landlord in the record of rights on 1.1.1952 and he should further be recorded as landlord on the appointed day, namely.
15.6.1955.
Both these conditions are required to be fulfilled before a suit or an application is maintainable by a landlord for the eviction of the tenant.
If either of the two conditions are not satisfied, the application for eviction the tenant is not maintainable.
The provisions of clause (d) further provides that even if the landlord 's name is not recorded, but if the name of his ancestor is recorded similarly if the landlord is a member of joint family, the name of any member is recorded the application would be maintainable.
This provi sion indicates the legislative intent that a person succeed ing to the property from his ancestor is 515 entitled to maintain the application for eviction of a tenant provided he fulfils other conditions.
But a person who may have obtained right to the agricultural land by assignment, transfer, or by auction sale or in any similar mode, is not included within the expression of 'landlord ' entitling him to evict the tenant.
After the amendment of Section 31A(d) the Legislature made it clear that transferees and assignees from persons whose name may be appearing in the record of rights during the relevant period are not to be treated as landlords for the purposes of the Section.
The expression 'or otherwise ' occurring in clause (d) indicates that a person claiming title by transfer, assignment, court sale or in any other mode like gift, or will even from ancestor will not be a landlord for the purposes of the Section.
A person inherit ing property from his ancestor would be landlord provided his ancestor 's name appears in the record of rights during the required period.
But a person claiming title on the basis of transfer, assignment.
auction sale or otherwise including gift or will from the predecessors in title even though he may be his ancestor, and his name may be recorded in the record of rights during the required period, will not be entitled to maintain a suit for eviction of a tenant.
The Legislature placed this restriction in order to protect the interest of the tenants and to prevent avoidance of the restrictions placed by the ceiling laws.
In the absence of any such provision a landlord could transfer land to his descendents by gift or will to evade the ceiling law and to evict tenants.
Under Section 31 A(d) such a beneficiary is not entitled to maintain a suit for the eviction of a tenant from the agricultural holding as he would not be a landlord within the meaning of the Section.
Waman Ganesh Joshi vs Ganu Guna Khapre, 61 Bombay L.R. 1267; Khalliulla Hasmiya vs Yesu, 50 Bombay L.R. 201;over ruled.
Bhanushanker Ambalal vs Laxman Kala & Ors., [1960], Gujarat Law Reporter 169, approved.
Umraomiya Akbartniya Malek vs Bhulabhai Mathurbhai Patel Appeal No. 112/63 decided on 3.3.
1972 (High Court of Guja rat) referred.
|
: Civil Appeal No. 329 of 1956.
Appeal by special leave from the decision dated April 29, 1954, of the Labour Appellate Tribunal, Lucknow, in Appeal No. III 97 of 1953 arising out of the Award dated January 24, 1953, made by the 57 444 Central Government Industrial Tribunal, Calcutta, in Appli cation No. 106 of 1952.
B.R. L. Iyengar and B. C. Misra, for the appellant.
Veda Vyasa, K. L. Mehta and I. section Sawhney, for the respond ent. 1957.
September 17.
The following Judgment of the Court was delivered by BHAGWATIJ.
This appeal with special leave is directed against the decision of the Labour Appellate Tribunal of India, Lucknow, confirming, on appeal, the award made by the Central Government Industrial Tribunal, Calcutta, in a dispute between the appellant and the respondent.
The appellant took up service with the respondent then knownm the Bharat Bank Ltd., with effect from July 1, 1944, as an Inspector at Bombay in the grade of Rs. 170 10 200 20 400 and was given three increments when the first increment fell due as from October 1, 1945.
He was also given promo tions on October 1, 1946, and on October 1, 1947, and was drawing Rs. 240 per month plus a special allowance for a servant of Rs. 30 per month at the time when he was dis charged by the respondent on August 5, 1949, on the plea that he had become surplus to the requirement of the re spondent.
The Government of India, Ministry of Labour had by Notification No. LR. 2 (273), dated February 21, 1950, referred for adjudication to the Central Government Indus trial Tribunal at Calcutta the disputes pending between the various banks and their employees, and the appellant 's case came up for hearing in the course of those proceedings before the Tribunal which held on December 5, 1950, that the order of discharge of the appellant was illegal and that the respondent should take him back in service as well as pay the appellant his arrears of salary and allowances from the date of discharge.
This direction was to be carried out within a month of the date of the publication of the award which was actually published in the Gazette of India (Part II, Section 3, page 1143) of December 30, 1950.
445 On January 30, 1951, the respondent preferred an appeal against the said order to the Labour Appellate Tribunal, Calcutta, sitting at Allahabad, which by its decision dated September 25, 1951, upheld the directions given by the Industrial Tribunal and dismissed the appeal.
The respond ent failed and neglected to implement the decision of the Labour Appellate Tribunal within the prescribed period in spite of the appellant 's intimating to the respondent by his letter dated October 10, 1951, at its address at 37, Faiz Bazar, Delhi, that he was at Bombay and that he would like to know where he should report himself for duty.
By this letter he also claimed arrears of salary and allowances which had not till then been paid to him, apart from the payments made under the interim orders of the Labour Appel late Tribunal.
The respondent did not send any reply to the said letter with the result that the appellant served on the respondent a notice on November 5, 1951, through his solici tors intimating that the respondent had failed and neglected to reinstate the appellant inspite of his letter dated October 10, 1951, requesting it to do so.
The appellant further intimated to the respondent that by reason of its failure to reinstate him within the prescribed period the respondent had committed a breach of the directions of the Labour Appellate Tribunal and the appellant had therefore become entitled to compensation for the same.
The appellant therefore called upon the respondent to pay to him a sum of Rs. 32,388 as the amount of compensation to which he was entitled on account of the pay he would have earned till his 55th year, i.e., upto May 4, 1960, Provident Fund contribu tion on pay at 6 1/4 % as allowed by the Rules of the Bank and gratuity for about 16 years from July 1, 1944, to May 4, 1960, at month 's pay per year of service, adjustment being made at 6% per annum for payment, if made as demanded.
This amount was exclusive of other claims against the respondent such as amounts due to him under the order dated February 17, 1951, of the Labour Appellate Tribunal of India, Allaha bad, arrears of salary etc.
, withheld by the respondent.
A, , the respondent failed 446 and neglected to send any reply to the said notice or to comply with the requisitions therein contained, the appel lant made an application to the Government of India on February 22, 1952, for recovery of money under section 20(1) of the Industrial Disputes (Appellate Tribunal) Act, 1950 (hereinafter referred to as " the Act ") to which he re ceived a reply on May 13, 1952, stating that an application for recovery of money under that section could be enter tained only if it was confined to the arrears of salary and allowances from the date of his discharge upto the date of the application, and advising him to submit a revised appli cation accordingly.
A suggestion was also made in that letter that the appellant might approach the Industrial Tribunal, Calcutta, under s.20(2) of the Act for a computa tion in terms of money of the benefit of reinstatement, as it was only when a definite sum had been so determined that action for recovery under section 20(1) of the Act could be taken by the Government.
It appears that in the meantime the respondent had trans ferred its banking business under an agreement with the Punjab National Bank Ltd., and had also changed its name to Bharat Nidhi Ltd.
By its letter dated April 3, 1952, the respondent in its new name of the Bharat Nidhi Ltd., ad dressed a letter to the appellant stating that due to the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and the closure of all its branches in India, the appellant was surplus to its require ments.
It therefore purported to give to the appellant two months ' notice of its intention to terminate the said award and his services in terms of section 19(6) of the .
The letter further proceeded to state that the appellant had not so far reported himself for duty at its office at Delhi which was the only office that it had in India since March 10, 1951, and which was its Head Office and registered office before that date.
The appel lant replied by his Advocate 's letter dated April 16, 1952, pointing out that in spite of his letter dated October 10, 1951, addressed to the respondent the latter had not in formed him as 447 to when and where he should report for duty nor had it cared to respond to the same.
He intimated that he had already made an application to the Government of India under section 20(1) of the Act and was awaiting the result thereof.
The letter dated April 3, 1952, addressed by the respondent to the appellant was under the circumstances characterized by the appellant as evidently addressed to him with some ulte rior motive.
The respondent by its letter dated May 10, 1952, addressed to the appellant reiterated that in spite of its asking the appellant to do so, he had failed to join its office.
It stated that by its letter dated April 3, 1952, it had clearly asked the appellant to join at Delhi but that the appellant had failed to do so and the conduct of the appellant clearly amounted to evasion of its instructions and absence from duty.
It also stated that the notice dated April 3, 1952, had effect from the date of receipt thereof by the appellant, viz., April 9, 1952.
No further reply was made by the appellant to the aforesaid letter but it appears that on June 28, 1952) the respondent addressed a letter to the Under Secretary, Government of India, New Delhi, in answer to a communication dated June 12, 1952, addressed by the latter to it that the appellant had already been paid arrears of his pay and allowances awarded by the Tribunal, that he was further asked by it to resume duty which he had failed to do, and, in the circumstances be was being consid ered absent from duty.
A copy of the letter dated May 10, 1952, addressed by it to the appellant as also a copy of the letter of the same date addressed to the Chief Labour Com missioner (Central), New Delhi, were enclosed therewith for information.
Nothing further transpired and on October 8, 1952, the appellant filed the petition under section 20(2) of the Act for computation of the money value of the benefit of reinstatement because of non implementation of the direc tions contained in the award by the respondent.
He claimed a sum of Rs. 47,738 computed in the mariner indicated in annexure 'D ' to that petition.
The respondent filed its written statement on December 4, 1952, wherein the only plea taken was 448 that there was a flagrant violation by the appellant of its instructions to join duty and that thereby the appellant had forfeited his right to claim reinstatement and all benefits flowing therefrom.
It further stated that without prejudice and with a view to close his case it had offered him salary upto June 19, 1952, by its letter dated November 15, 1952, under intimation to the Conciliation Officer, Central Gov ernment, New Delhi, but the appellant had not replied to the same.
The respondent further contended that the award in question was in force for only one year under section 19(3) of the , and that the same was therefore no longer in force and the respondent had already terminated the same.
The claim of the appellant was there fore illegal and preposterous and the respondent prayed that the petition be dismissed with costs.
The petition came up for hearing before the Central Govern ment Industrial Tribunal at Calcutta and it was observed that there were three aspects of the case, viz., (i) whether the respondent refused to implement the award or the subse quent decision of the Labour Appellate Tribunal by not taking the appellant in service as directed by the Tribunals (as urged on behalf of the appellant); (ii) whether it was the petitioner who failed to resume his duty in spite of having been asked to do so and thereby forfeited the right conferred upon him in terms of the award (as urged by the respondent); (iii) To what relief or compensation in lieu of reinstatement the petitioner was entitled in the peculiar circumstances in which Bharat Bank ceased functioning soon after the award of December, 1950, and in the light of various other applications of other employees in which only retrenchment relief was awarded.
On the first two questions the Industrial Tribunal held in favour of the appellant and then proceeded to consider the third question, viz., as to what relief or compensation in lieu of reinstatement the appellant was entitled to.
After discussing the legal position it came to the conclusion that the measure of damages was that laid down under section 95 of.
the Code of Civil Procedure which put it at a figure 449 of Rs. 1,000.
It therefore assessed the value of rein.
statement asked for at the sum of Rs. 1,000 and awarded that sum under section 20(2) of the Act.
The other prayers of the appellant regarding arrears were not dealt with by the ' Industrial Tribunal in so far as they were the subject matter of the application under section 20(1) of the Act which the appellant had already made to the Central Government.
The appellant being, aggrieved by the award of the Industri al Tribunal carried an appeal to the Labour Appellate Tribu nal of India at Lucknow.
A preliminary objection was taken by the respondent before the Labour Appellate Tribunal that the appeal was not competent under the provisions of section 7 of the Act.
This objection found favour with the Labour Appel late Tribunal and holding that no substantial question of law was raised by the award it dismissed the appeal as incompetent.
The appellant applied for and obtained special leave to appeal against this decision of the Labour Appel late Tribunal and that is bow the present appeal is before us.
The two questions of fact, viz., (i) whether the respondent refused to implement the award by not taking .the appellant back in service and (ii) whether it was the appellant who had failed to resume his duty in spite of having been asked to do so and thereby forfeited the right conferred upon him in terms of the award are concluded by the findings arrived at by the Industrial Tribunal after due consideration of the correspondence which passed between the parties.
We also have perused the said correspondence and we see no reason to disturb those findings.
If therefore the appellant was ready and willing to be reinstated in the service of the respondent and was not guilty of any default in the matter of reporting himself for duty, the only question that re mains to be considered by us here is what is the amount at which this benefit of reinstatement which was awarded to the appellant should be computed within the meaning of section 20(2) of the Act.
That was the only scope of the enquiry before the Industrial Tribunal and we have to determine what is the correct method of such computation.
450 Section 20(2) of the Act reads as follows: Section 20.
Recovery of money due from an employer under an award or decision.
(1). . . . . (2)Where any workman is entitled to receive from the empoly er any benefit under an award or decision of an industrial tribunal which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to the rules made under this Act, be determined by that industrial tribunal, and the amount so determined may be recovered as provided for in subsection (1).
It may be noted that sub section (1) above referred to provides that: any money due from an employer under any award or decision of an industrial tribunal may be recovered as arrears of land revenue or as a public demand by the appropriate Gov ernment on an application made to it by the person entitled to the money under that award or decision.
The petition of the appellant proceeded on the basis that the benefit of reinstatement which he was entitled to re ceive under the terms of the award was capable of being computed in terms of money and that position was not disput ed by the respondent.
Even though there was no plea by the respondent in its written statement that there were any circumstances which made it impossible for the respondent to reinstate the appellant in its service except the failure of the appellant to resume his duty in spite of his having been asked to do so, the respondent.
was allowed to lead evidence in regard to the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and the closure of its banking business in all of its branches in India in order to show that the respondent was not in default and the value of the benefit of reinstatement in terms of money had thus dwindled into insignificance.
Reliance was placed on the further circumstance that the Punjab National Bank Ltd., was not under any obligation to take into its employ the employees of the respondent, that as a matter of fact only 10% of the employees of the 451 respondent bad been absorbed by the Punjab National Bank Ltd., and in regard to the rest who were not so absorbed the only sums awarded to them by the Industrial Tribunals were salary for the notice month.
and retrenchment compensation.
We are of opinion that these circumstances cannot be availed of by the respondent.
It is no doubt true that the respond ent transferred its liabilities and equivalent assets to the Punjab National Bank Ltd., some time in March 1951.
The correspondence which was carried on between the appellant and the respondent however shows that in spite of such transfer to the Punjab National Bank Ltd., and the change of the name of the respondent from the Bharat Bank Ltd., to Bharat Nidhi Ltd., the respondent never contended that Bharat Nidhi Ltd. was not in a position to reinstate the appellant in its service.
The correspondence proceeded all along on the footing that Bharat Nidhi Ltd., was in a posi tion to reinstate the appellant in its service and as a matter of fact took up the plea that it had invited the appellant to join it at Delhi but that the appellant bad failed and neglected to do so.
Not only in its letter dated May 10, 1952, did the Bharat Nidhi Ltd., state that the appellant 's failure to join it at Delhi amounted to absence from duty but as late as June 28, 1952, in its letter ad dressed to the Under Secretary to the Government of India, New Delhi, it reiterated that the appellant was asked to resume duty which he had failed to do and that in the cir cumstances he was being considered as absent from duty.
It is clear therefore that the Bharat Nidhi Ltd., was all the time insisting that the appellant should join its service at Delhi and never took up the plea that the transfer of its liabilities and equivalent assets to the Punjab National Bank Ltd., and also the possibility of the Punjab National Bank Ltd., not absorbing the appellant in its employ were circumstances available to it by way of defence.
The appel lant having become surplus to its requirement was of course a plea taken by it in the course of the correspondence and by its letter dated April 3, 1952, the Bharat Nidhi Ltd., gave the appellant two months ' notice of its intention to 58 452 terminate the award and service of the appellant.
In this behalf it also relied on the provisions of section 19 (6) of the , but when it came to file its written statement it did not put forward that plea as an answer to the claim of the appellant under section 20(2) of the Act.
We fail to understand therefore how these circum stances could ever have been taken into consideration by the Industrial Tribunal while arriving at the computation in terms of money of the benefit of reinstatement awarded to the appellant under the terms of the award.
Such computa tion has therefore got to be made regardless of those cir cumstances which were put forward by the respondent as a last resort.
The Industrial Tribunal computed the money value of this benefit on the analogy of section 95 of the Code of Civil Proce dure.
It treated the non implementation of the direction in the award made by an Industrial Tribunal on a par with the obtaining of arrest, attachment or injunction on insuffi cient grounds and awarded to the appellant the sum of Rs. 1,000 which it deemed to be a reasonable compensation for the injury caused to him.
Even if the direction given by the Industrial Tribunal in its award be treated as a statu tory obligation imposed on the respondent, this certainly could not be a measure of compensation or damaoes and it was fairly conceded by the learned counsel for the respondent that he was not in a position to support that part of the judgment.
Mr. lyengar who appeared for the appellant before us urged that the computation of the money value of the benefit of reinstatement awarded to the appellant should be made on one or the other of the three bases which he suggested for the purpose, viz., (i) the order of reinstatement should be construed as entitling the appellant to the full tenure of service in accordance with the terms of the original con tract and the appellant should be awarded compensation commensurate with the salary and the benefits which he would have earned during his service with the respondent for the full term of 55 years which was the age of superanntiation; (ii) the non implementation of the direction as 453 to reinstatement should be treated as a breach of contract on the part of the respondent and the appellant should be awarded damages for breach of the contract which would be calculated again on the same, basis; (iii) the non implemen tation should be treated as a breach of a statutory duty and the appellant should be awarded damages for non implementa tion as on a tort committed by the respondent.
The appel lant would in that event be entitled not only to general damages but also special damages by reason of oppressive conduct on the part of the respondent.
The position as it obtains in the ordinary law of master and servant is quite clear.
The master who wrongfully dismisses his servant is bound to pay him such damages as will compensate him for the wrong that he has sustained.
" They are to be assessed by reference to the amount earned in the service wrongfully terminated and the time likely to elapse before the servant obtains another post for which he is fitted.
If the contract expressly provides that it is terminable upon, e.g., a month 's notice, the damages will ordinarily be a month 's wages. . .
No compensa tion can be claimed in respect of the injury done to the servant 's feelings by the circumstances of his dismissal, nor in respect of extra difficulty of finding work resulting from those circumstances.
A servant who has been wrongfully dismissed must use diligence to seek another employment, and the fact that he has been offered a suitable post may be taken into account in assessing the damages." (Chitty on Contracts, 21st Ed., Vol.
(2), p. 559 para.
1040).
If the contract of employment is for a specific term, the servant would in that event be entitled to damages the amount of which would be measured prima facie and subject to the rule of maitigation in the salary of which the master had deprived him.
(Vide Collier vs Sunday Referee Publishing Co., Ltd. (1)).
The servant would then be entitled to the whole of the salary, benefits, etc., which he would have earned had be continued in the employ of the master for the full (1) [1940] 4 All E.R. 237.
454 term of the contract, subject of course to mitigation of damages by way of seeking alternative employment.
Such damages would be recoverable by the servant .for his wrongful dismissal by the master only on the basis of the master having committed a breach of the contract of employ ment.
If, however, the contract is treated as subsisting and a claim is made by the servant for a declaration that he continues in the employ of the master and should be awarded his salary, benefits, etc., on the basis of the continuation of the contract, the servant would be entitled to a declara tion that he continues in the employ of the master and would only be entitled to the payment of salary, benefits, etc., which accrued due to him up to the date of the institution of the suit.
The benefit of reinstatement which is awarded to a workman under the terms of the award does not become a term or condition of the contract between him and the employer.
There are no doubt other reliefs by way of changes in the terms and conditions of employment which when awarded by the appropriate tribunal might be treated as implied terms of the contract between the employer and the workers to whom the award applies and would enure for the benefit of the worker until varied by appropriate legal proceedings.
There is no statutory provision in that behalf contained in the Industrial "Disputes Act, 1947.
But it is interesting to note that in the Industrial Disputes Order, 1951, obtaining in England there is enacted section 10 which runs as follows: Section 10: Award to be implied term of contract: Where an award on a dispute or issue has been made by the Tribunal then as from the date of the award or from such other date, not being earlier than the date on which the dispute or issue to which the award relates first arose, as the Tribu nal may direct, it shall be an implied term of the contract between the employer and workers to whom the award applies that the terms and conditions of employment to be observed under the contract shall be in accordance with the award until varied by agreement between the parties or by a subse quent award of the Tribunal 455 or until different terms and conditions of employment in respect of the workers concerned are settled through the machinery of negotiation or arbitration for the settlement of terms and conditions of employment in, the trade or industry or section of trade or industry or undertaking in which those workers are employed.
Whatever be the position in regard to the terms and condi tions of employment thus varied in accordance with the terms of the award, the benefit of reinstatement awarded to a workman certainly cannot be treated as part of the contract between him and the employer.
The effect of an order of reinstatement is merely to set at nought the order of wrong ful dismissal of the workman by the employer and to rein state him in the service of the employer as if the Contract of employment originally entered into had been contiuning.
The terms and conditions of the contract which obtained when the workman was in the employ of the employer prior to his wrongful dismissal which has been set aside continue to govern the relations between the parties and the workman continues in the employ of the employer under those terms and conditions.
There is no variation of those terms and conditions of the contract.
The only thing which happens is that the workman is reinstated in his old service as before.
The monetary value of the benefits of such reinstatement is therefore to be computed not on the basis of a breach of the contract of employment nor on them basis of a tort alleged to have been committed by the employer by reason of the non implementation of the direction for reinstatement contained in the award.
The analogy of a suit for a declaration that the workman is continuing in the employ of the employer and that he should be paid the safary and benefits, etc., which would have been earned by him up to the date of the institu tion of the suit also does not strictly apply for the simple reason that the workman here is not asking for a declaration that he is still continuing in service on the ground that there was a termination of his service after the award, which termination is void.
What he is asking for is a computation in terms 456 of money of the benefit of reinstatement which was granted to him by the Industrial Tribunal and which the employer did not implement.
The purpose of the enactment of section 20(2) of the Act is not to award to the workman compensation or damages for a breach of contract or a breach of a statutory obligation on the part of the employer.
Any money which is due from an em ployer under the award can by virtue of the provisions of section 20(1) of the Act be recovered by the appropriate Government on an application made to it by the workman.
Where however any benefit which is not expressed in terms of money is awarded to the workman under the terms of the award it will be necessary to compute in terms of money the value of that benefit before the workman can ask the appropriate Govern ment to help him in such recovery.
Section 20 sub section
(2) provides for the computation in terms of money of the value of such benefit and the amount at which such benefit should be computed is to be determined by the Industrial Tribunal to which reference would be made by the appropriate Govern ment for the purpose.
Such computation has relation only to the date from which the reinstatement of the workman has been ordered under the terms of the award and would have to be made by the Industrial Tribunal having regard to all the circumstances of the case.
The Industrial Tribunal would have to take into account the terms and conditions of em ployment, the tenure of service, the possibility of termina tion of the employment at the instance of either party, the possibility of retrenchment by the employer or resignation or retirement by the workman and even of the employer him self ceasing to exist or of the workman being awarded var ious benefits including reinstatement under the terms of future awards by Industrial Tribunals in the event of indus trial disputes arising between the parties in the future.
Even in the case of ordinary contracts 'between master and servant such considerations have been imported by the courts.
The observations of Greer, 457 L.J., in Salt vs Power Plant Co., Ltd. (1) are apposite in this context: " This is the case of a man who had, according to my view, got an engagement which was to last for life, or at any rate for the joint lives of himself and the company, but I think for his life, because, I think there are authorities to the effect that if a company winds up, that is a dismissal of the servants, and they can then prove for damages and get their dividend, whatever it may happen to be.
Fortunately, the company has not been wound up, but in estimating the damages, of course, the tribunal estimating them will have to take into consideration the fact that at any time after June 26, 1935, it might have appeared to the directors that they had good reasons for terminating the plaintiff 's serv ices, reasons connected with his conduct.
The present value of what his salary would be for the rest of his life must also be considered, and there must also be taken into ac count the fact that he is a man who might at any time termi nate his service by his life coming to an end, and other matters with which I need not deal." These and similar considerations would equally be germane in the matter of the computation in terms of money of the value of the benefit of reinstatement which was awarded to the appellant in the case before us.
Turning therefore to the terms and conditions of employment we find that the respondent had enacted bye laws for the employees of Bharat Bank Ltd., which were applicable to the appellant.
Bye law 9 provides that an employee may resign from the service of the respondent by giving one month 's notice.
Bye law 11 provides that the respondent shall have the option to terminate an employee 's service on giving him the same notice as he is required to give to the respondent under rule No. 9 (which can be served even when the employee may be on leave), or by paying him salary for the notice period in lieu of notice, in the absence of an agreement to the contrary, provided that no notice shall be necessary when he is (1) , 325.
458 dismissed on account of misconduct, dishonesty, gross negli gence, insubordination or disregard of any of the standing instructions.
Bye law 13 lays down that every employee is required to retire on attaining the age of 55 years.
He may be retained in service after that age only with the express sanction of the authorities but such extension of service will not exceed more than 2 years at a time.
If regard be had to these terms and conditions, it was possible for the respondent to terminate the service of the appellant by paying him one month 's salary in lieu of no tice.
If there was nothing more the appellant would have been entitled only to that amount as and by way of compensa tion for nonimplementation of the direction for reinstate ment.
There was however a finding recorded by the Industri al Tribunal which made the award dated December 5, 1950, that the respondent had been guilty of unfair labour prac tice and victimization and the ordinary right, which the respondent would have been in a position to exercise, of terminating the service of the appellant on giving him one month 's salary in lieu of notice could not be availed of by the respondent.
On an industrial dispute raised by the appellant on the respondent 's terminating his service at any time in the future, it would be open to the Industrial Tribunal to go into the question whether the termination of the appellant 's service by the respondent was justified and if the Industrial Tribunal came to an adverse conclusion, it would be open to it to reinstate the appellant in the serv ice of the respondent with all back salary, allowances, etc.
Even if the respondent wanted to retrench the appellant, the same considerations would arise with a possible result against the respondent.
On the other hand, there was also a possibility of the respondent being in the right and being entitled to lawfully terminate the service of the appellant in which event of course the appellant would be without any redress whatever.
In computing the money value of the benefit of reinstatement the Industrial Tribunal would also have to take into account the present value of what his salary, benefits, 459 etc ' would be till he attained the age of superannuation and the value of such benefits would have to be computed as from the date when such reinstatement was ordered under the terms of the award.
Having regard to the considerations detailed above it is impossible to compute the money value of this benefit of reinstatement awarded to the appellant with mathematical exactitude and the best that any Tribunal or Court would do under the circumstances would be to make as correct an estimate as is possible bearing of course in mind all the relevant factors pro and con.
We have ourselves devoted very anxious thought to this aspect of the matter and we have come to the conclusion that having regard to all the circumstances of the case it would be reasonable to compute the benefit of reinstatement which was awarded to the appel lant at an amount of Rs. 12,500 (Rupees twelve thousand and five hundred only).
We accordingly allow the appeal and set aside the decision of the Labour Appellate Tribunal of India, Lucknow as well as the award made by the Central Government Industrial Tribunal, Calcutta and award that the appellant shall recov er from the respondent the said sum of Rs. 12,500 (Rupees twelve thousand and five hundred only) being the computation of the money value of the benefit of reinstatement awarded to him under the terms of the award of the Central Govern ment Industrial Tribunal at Calcutta dated December 5, 1950.
The respondent will pay the appellant 's costs of this appeal as well as the proceedings before the Industrial Tribunal and the Labour Appellate Tribunal.
Appeal allowed.
| The appellant was in the service of the respondent but sub sequently he was discharged on the plea that he had become surplus 4443 to the requirement of the respondent.
The Industrial Tribu nal found that the respondent had been guilty of unfair labour practice and victimisation and held that the order of discharge was illegal and that he should be reinstated, with arrears of salary and allowances from the date of discharge.
The respondent having failed to implement the award, the appellant filed an application under section 2o(2) of the Industrial Disputes (Appellate Tribunal) Act, 1950, for computation of the money value of the benefit of reinstate ment.
The Industrial Tribunal assessed the value of rein statement at the sum of Rs. 1,000 by adopting the measure of damages as laid down under section 95 of the Code of Civil Procedure.
Under the bye laws framed by the respondent the services of an employee could be terminated on giving one month 's notice.
Held, that the monetary value of the benefit of reinstate ment is to be computed not on the basis of a breach of the contract of employment nor on the basis of a tort alleged to have been committed by the employer by reason of the non implementation of the direction for reinstatement contained in the award.
The computation has to be made by the Indus trial Tribunal having regard to all the.circumstances of the case, such a?, the terms and conditions of employment, the tenure of service, the possibility of termination of the employment at the instance of either party, the possibility of retrenchment by the employer or resignation or retirement by the employee and even of the employer himself ceasing to exist, or of the employee being awarded various benefits including reinstatement under the terms of future awards by Industrial Tribunals in the event of industrial disputes arising between the parties in the future.
The observations of Greer L. J. in Salt vs Power Plant Co., Ltd. , 325, relied on.
In the instant case, having regard to the bye laws, the appellant would have been entitled to only one month 's salary in lieu of notice, as and by way of compensation for non implementation of the direction for reinstatement, but this right could not be availed of by the respondent in view of the finding of the Tribunal that he was guilty of unfair labour practice and victimisation, and a correct estimate of the value of the benefit of reinstatement had to be made bearing in mind all the relevant factors.
|
Appeals Nos. 19 & 20 of 1963.
Appeals from the judgment and decree dated July 31, 1959 of the Patna High Court in Appeals from Original Decree Nos. 30 and 40 of 1953 respectively.
section T. Desai and R. C. Prasad for appellant.
Sarjoo Prasad and D. Goburdhan, for the respondents Nos.1 to 4 [In C. A. No. 19 of 1963].
Sarjoo Prasad and K. K. Sinha, for respondents Nos.
5 7 and 9 [In C. A. No. 19 of 1963] and 1 3 and 5 [In C. A. No. 20 of 1963].
2 The Judgment of the Court was delivered by Bachawat, J.
One Ramyad Singh was a member of a joint family and has eight annas interest in the joint family properties.
He was a Hindu governed by the Mitakshara school of Hindu law.
He died issueless, leaving his widow, Mst.
Bhagwano Kunwar.
The date of his death is in dispute.
After his death, Bhagwano Kunwar filed the present suit for partition of the joint family properties claiming eight annas share therein.
She contended that Ramyad Singh died in 1939 after the passing of the Hindu Women 's Rights to Property Act, 1937, and she was entitled to maintain the suit for partition.
The defendants contended that Ramyad Singh died ill 1936 before the passing of the Act and she was entitled to maintenance only.
The trial Court accepted the plaintiff 's contention aid decreed the suit.
The defendants filed two separate appeals to the High Court.
On December 15, 1958, Bhagwano Kunwar died.
The High Court passed orders substituting one Ram Gulam Singh in her place.
Later, the High Court recalled these orders, as it was conceded that Ram Gulam Singh was not her legal representative.
By a deed dated March 14, 1958, Bhagwano Kunwar had sold lands measuring 1 bigha 5 kathas to the appellant.
The High Court allowed the appellant 's application for substitution under 0.22 r. 10 of the Code of Civil Procedure and proceeded to hear the appeals.
The High Court accepted the defendants ' contention, reversed the decree passed by the Subordinate Judge, and dismissed the suit.
The appellant has now filed these appeals under certificates granted by the High Court.
The main point in controversy is, did Ramyad Singh die in 1936 or did he die in 1939? If he died in 1936, Bhagwano Kunwar was not entitled to maintain the suit for partition and the suit was liable to be dismissed.
But if he died in 1939, she was entitled to eight annas share in the joint estate and was entitled to maintain the suit for partition under the Hindu Women 's Rights to Property Act, 1937 read with the Bihar Hindu Women 's Rights to Property ,(Extension to Agricultural Land) Act, 1942.
Moreover, it is ,conceded by counsel for the respondents that in that event after 1956 she held her eight annas share in the joint estate as full owner by virtue of section 14 of the , and on the strength ,of the sale deed dated March 14, 1958 executed by Mst.
Bhagwano Kunwar the appellant was entitled to continue the suit for partition .after her death.
There is conflicting oral evidence with regard to the date of ,death of Ramyad Singh.
The appellant relied strongly upon an admission made by the main contesting defendants, Janki Singh and Kailashpati Singh, in a plaint signed and verified by them and filed in Title Suit No. 3 of 1948.
In that plaint, Janki Singh and Kailashpati Singh claimed partition of the joint family properties, implead 3 ing Bhagwano Kunwar as defendant No. 8 and other members of the joint family as defendants Nos.
1 to 7.
In this plaint, Janki Singh and Kailashpati Singh stated: "2.
That the properties described in Schedule 1 to 2 in the plaint belong to the joint family.
As the said Babu Ramyad Singh died in 1939 the defendant No. 8 also became entitled to life interest in the properties of the joint family.
The defendant No. 8 surrendered her life estate to the plaintiffs and the defendants Nos. 1 to 7 and she gave up her possession of the joint family properties.
The plaintiffs and the defendants Nos. 1 to 7 have been coming in joint possession of the properties under partition.
That the defendant No. 8 is also made a defendant in this suit as she is entitled to maintenance," The plaint contained a clear admission that Ramyad Singh died in 1939.
The High Court ruled that Bhagwano Kunwar could not rely on this admission.
The High Court said that she could not rely upon the statement that Ramyad Singh died in 1939, as she was not prepared to admit the correctness of the statement that she had surrendered her estate and was entitled to maintenance only.
We are unable to accept this line of reasoning.
It is true that Bhagwano Kunwar relied only upon the statement that Ramyad Singh died in 1939 and was not prepared to accept the statement that she had surrendered her share to the other members and was entitled to maintenance only.
But she tendered the entire plaint, and she did not object to the admissibility or proof of any of the statements made therein.
All the statements in the plaint are,.
therefore, admissible as evidence.
The Court is, however, not bound to accept all the statements as correct.
The Court may accept some of the statements and reject the rest.
In the presented suit, it is common case that Bhagwano Kunwar did not surrender her share in the estate.
We must, therefore, reject the statement with regard to the alleged surrender and the consequential allegation that she was entitled to maintenance only.
The statement in the plaint as to the date of death of Ramyad Singh must be read as an admission in favour of Bhagwano Kunwar.
The High Court also observed that an admission in a pleading can be used only for the purpose of the suit in which the pleading was filed.
The observations of Beaumont, C.J. in Ramabai Shriniwas vs Bombay Government(l) lend some countenance to this view.
But those observations were commented upon and explained by the Bombay High Court in D. section Mohite vs section I Mohite(2).
An admission by a party in a plaint signed and verified by him in a prior suit is an admission within the meaning of section 17 of the Indian (1) A.I.R. 196O Bom.
(2) A.I.R. 1941 Bom.
4 Evidence Act, 1872, and may be proved against him in other litigations.
The High Court also relied on the English law of evidence.
In Phipson on Evidence, 10th Edn, article 741, the English law is thus summarised: "Pleadings, although admissible in other actions, to show the institution of the suit and the nature of the case put forward, are regarded merely as the suggestion of counsel, and are not receivable against a party as admissions, unless sworn, signed, or otherwise adopted by the party himself." Thus, even under the English law, a statement in a pleading sworn, signed or otherwise adopted by a party is admissible against him in other actions.
In Marianski vs Cairns(1), the House of Lords decided that an admission in a pleading signed by a party was evidence against him in another suit not only with regard to a different subject matter but also against a different opponent.
Moreover, we are not concerned with the technicalities of the English law.
Section 17 of the makes no dis tinction between an admission made by a party in a pleading and other admissions.
Under the Indian law, an admission made by a party in a plaint signed and verified by him may be used as evidence against him in other suits.
In other suits, this admission cannot be regarded as conclusive, and it is open to the party to show that it is not true.
The explanation of Janki Singh and Kailashpati Singh that the plaint was drafted by their lawyer Ramanand Singh at the instance of the panchas including one Ramanand and they signed and verified the plaint without understanding its contents cannot be accepted.
There is positive evidence on the record that the plaint was drafted at the instance of Janki Singh and was filed under his instructions.
The plaint was signed not only by Janki Singh and Kailashpati Singh but also by their lawyer, Ramanand Singh.
Neither Ramanand Singh nor the panch Ramanand was called as a witness.
Even in this litigation, Ramanand Singh was acting as a lawyer on behalf of some of the defendants.
Kailashpati Singh is a Homeopathic medical practitioner and knows English.
The plaint was read over to Janki Singh.
Both Janki Singh and Kailashpati Singh signed the plaint after understanding its contents and verified all the statements made in it as true to their knowledge.
They then well knew that Ramyad Singh had died in 1939 after the passing of the Hindu Women 's Rights to Property Act.
It is not shown that the admission in the plaint as to the date of death of Ramyad Singh is not true or that it was made under some error or misapprehension.
This admission must be regarded as a strong (1) 5 piece of evidence in this suit with regard to the date of death of Ramyad Singh.
Bhagwano Kunwar and her witnesses, Ram Gulam Singh, Ram Saroop Singh and Sheo Saroop Singh gave evidence in Sep tember, 1952.
They all swore that Ramyad Singh died 13 years ago.
In agreement with the trial Judge, we accept their testimony.
Learned counsel commented on the testimony of Sheo Saroop Singh, who had said that the last earthquake took place 15 to 16 years ago and Ramyad Singh died 2 years 8 months thereafter.
The last earthquake took place on January 15, 1934, and counsel, therefore, argued that Ramyad Singh could not have died in 1939.
Clearly, there is some confusion in the evidence of Sheo Saroop Singh.
He gave evidence in September, 1952, and his statement that the earthquake took place 15 to 16 years ago could not be correct and his further statement that Ramyad Singh died 2 years 8 months after the earthquake was not accurate.
He swore positively that Ramyad Singh died 13 years ago.
Bhagwano Kunwar said that there were receipts to show that Ramyad Singh died 13 years ago.
On her behalf rent receipts for 1339, 1341, 1342, 1343, 1345, 1348, 1356 and 1359 faslis were tendered.
The rent receipts are in respect of certain lands held by her as a tenant.
The first four rent receipts show that Lip to 1343 fasli corresponding to 1936 the rent used to be paid by her through Ramyad Singh.
Payment of the rent for 1345 fasli was made in 1346 fasli corresponding to 1939 through Janki.
The rent for the subsequent years was paid through Janki and other persons.
The High Court thought that the rent receipts showed that Ramyad Singh died in 1936 and because of his death, rent was subsequently paid through other persons.
But the rent receipt for 1344 fasli is not forthcoming, and it is not known who paid the rent for 1344 fasli (1937).
Moreover, assuming that Ramyad Singh did not pay rent in 1937 and 1938, it does not follow that he must have died in 1936.
Kailashpati Singh, Janki Singh and other witnesses called on behalf of the defendants said that Ramyad Singh had died 16 years ago.
In agreement with the trial Court, we do not accept their testimony.
Janki Singh and Kailashpati Singh gave false explanations with regard to the admission made by them in the plaint in the previous suit.
Moreover, for the purpose of defeating the title of Bhagwano Kumar they set up a compromise decree passed in that suit.
The trial Court found that the compromise decree was obtained by them by practising fraud on Mst.
Bhagwano Kunwar, and this finding is no longer challenged.
We, therefore, hold and find that Ramyad Singh died in 1939.
It follows that Bhagwano Kunwar was entitled to eight annas share in the joint family estate, and was entitled to maintain the Suit.
The trial Court, therefore, rightly decreed the suit.
6 But in view of the death of Bhagwano Kunwar during the pendency of the appeal in the High Court, the decree passed by the trial Court must be modified.
The appellant purchased from Bhagwano Kunwar 1 bigha 5 kathas of land under the deed dated March 14, 1958, and he can claim only the rights of an alienee of a specific property from a co owner on a general partition of the undivided properties.
All the parties appearing before us conceded that on such a partition the appellant is entitled to allotment and separate possession of the lands purchased by him under the deed dated March 14, 1958.
The deed is not printed in the Paper Book.
It will be the duty of the trial Court now to ascertain full particulars of the aforesaid lands.
The appeals are allowed with costs in this Court and in the High Court.
The decree passed by the High Court is set aside.
There will be a decree in favour of the appellant allotting to him the lands purchased by him under the deed dated March 14, 1958 and awarding to him separate possession thereof.
The trial Court will draw up a suitable decree after ascertaining the particulars of the aforesaid lands.
Y. P. Appeals allowed.
| The first appellant advanced monies to D against mortgages of her property.
D was adjudicated an insolvent in 1949 and her properties got vested in the Official Assignee of Madras.
The Official Assignee brought the properties to sale which were ultimately purchased by the first respondent.
The Trial Court decreed the appellants ' suit for enforcement of the mortgages against the property and awarded interest at the rate of 15 per cent compoundable with yearly rests.
In appeal the Division Bench of the High Court found that in the circumstances of the case a rate of 10, per cent compound interest with yearly rests was just.
With certificate the appellants came to this Court.
Section 3 of the Usurious Loans (Madras Amendment) Act, 1937 fell for consideration.
HELD : The net result of the various clauses of section 3 to be that the court must go back to the date of the original transaction and form an opinion as to the rate of interest which would be reasonable after considering (a) the value of the security offered; (b) the financial condition of the debtors including the result of any earlier transaction; (c) the known and probable risks in getting repayment; (d) whether compound interest was provided for and if so the frequency of the Period of calculation of interest for being added to the principal amount of the loan.
[725 E G] In the circumstances of the case the Division Bench rightly held that 10 per cent compound interest with yearly rests would meet the justice of the case.
The security was not inadequate and the threat of a suit by the brother of the mortgagor was not serious.
[726 A B] Venkatarao vs Venkatratnam, A.I.R. 1952 Madras 872 and Sri Balasaraswati vs A. Parameswara Aiyar, A.I.R. 1957 Mad. 122 referred to.
There was also no reason to interfere with the scaling down of the rate of interest to 6 per cent from the date of filing of the suit.
Although the reasons were not indicated it was fairly clear that the High Court was, using its discretion as regards interest pendente lite.
[726 E]
|
Civil Appeal No. 774 of 1967.
Appeal by special leave from the judgment and order dated February 6, 1970 of the Madhya Pradesh High Court in Second Appeal No. 327 of 1963.
D. N. Mukherjee, for the appellant.
Janardan Sharma, for the respondents.
The Judgment of the Court was delivered by Mitter, J.
This is an appeal by special leave from a judgment of the Madhya Pradesh High Court dated 6th February 1967 dismissing a Second Appeal by the appellant before this Court against 726 a decree passed by the Additional District Judge of Ratlam for ejectment of the appellant from a house mortgaged by the predecessor in interest of the appellant to one Kesharimal for Rs. 3, 1 00 and further decreeing a claim for arrears of rent amounting to Rs. 731 35 and mesne profits at the rate of Rs. 20 per month until eviction.
The relevant facts are as follows.
On July 29, 1945 Mathuralal, predecessor in interest of the appellant, mortgaged his house in Ratlam to Kesharimal for a sum of Rs. 3,100 with possession.
The deed of mortgage contained the following terms : 1.
That interest would run on Rs. 3, 100 at Rs. 0 1 0 0 per cent per mensem till realization.
The period of redemption would be two years.
During the period of mortgage "the tenant as may be shall execute the rent notes in favour of the mortgagee and whatever rent shall be realised will be credited in lieu of interest and it the amount of rent shall exceed the amount of interest, the difference shall be deducted from the original sum due,, but if the amount of interest shall exceed the amount of interest the difference shall be deducted from the original sum due.
" But if the amount of interest shall exceed the amount of rent, then the mortgagor shall pay it.
Notwithstanding any vacancy during the period of the mortgage the rent would continue.
During the period.
of the mortgage an account of the rent and interest shall be settled after every six months.
The mortgagor undertook to keep the house in repairs during the period of the mortgage and in default of repairs by him the mortgagee was to be entitled to execute the necessary repairs and add the cost to his dues.
"The burden of the mortgage money shall be on the mortgaged house.
In case the amount is not realised from the house, the moragagee shall have a right to take steps to realise his money" from the mortgagor and his property of every kind.
On the same day the mortgagor executed another document in favour of the mortgagee reciting that his house in Ratlam was mortgaged with possession to the creditor who was "having its possession" and the mortgagor had taken the same on rent at Rs. 20 per month on the following terms : 1.
The executant would pay the rent every month regularly and in default of payment of two months ' rent, the mortgagee would be entitled to get him evicted.
727 2.
The executant would white wash and repair the house and keep it in good condition.
Kesharimal would be entitled to increase or decrease the rent.
The executant would vacate the house whenever asked to do so. 5.
The executant would hand over possession of the house in,the same condition in which he had received it.
Kesharimal filed a suit on his mortgage in 1954 and a preliminary decree for sale for the amount of Rs. 5,637 6 0 besides interest at, the rate of Rs. 0 10 0 per cent per mensem for six months.
on the sum of Rs. 3,600 was duly passed.
The defendant was, directed to pay the full amount of the decree before the 24th May 1955 and in case of his doing so the property was to be released from the mortgage and the plaintiffs were to hand over all the documents which they had in their possession, but in case of failure to pay the plaintiffs would be entitled to file an application for the execution of the decree and get the property auctioned; and in case of non satisfaction of the decree 'by the sale, the plaintiffs were to be at liberty to recover the balance of the decretal claim by a personal decree against the defendant.
It appears that Kesharimal had died during the pendency of the suit and his legal representatives were brought on record and the preliminary decree passed in their favour.
Whatever be the reason no application for a final decree for sale of the property was made within the period fixed under the Limitation Act.
The application for this purpose made by the executors to the estate of Kesharimal was dismissed on July 29, 1960 as barred by limitation.
On December 27, 1960 the said executors filed a suit for ejectment against the appellant alleging that the rent for the premises had remained unpaid from September 29, 1957 till November 28, 1960.
An amount of Rs. 731 75 was arrived at by totalling the rent for the period mentioned and mesne profits from 29th November 1960 to 26th December 1960 at the same rate and incidental charges and expenses and deducting therefrom the rent for two months which was barred by the lapse of time the plaintiffs asked for a decree for ejectment and further mesne profits.
The trial Judge dismissed the suit.
But on appeal this was set aside and the plaintiffs claim allowed in full.
The High Court in Second Appeal maintained the decree of the appellate court.
The points urged by counsel for the appellant before us were 1.
The rent note executed simultaneously with the mortgage was a mere device to secure payment of interest and did not record 728 an independent transaction.
Further it did not create any relationship of landlord and tenant.
The plaintiffs ' right as mortgagee merged in the decree and ,execution thereof being 'barred by the laws of limitation the plaintiffs had lost all their rights.
The mortgage being extinguished the mortgagor could not bring a suit for redemption.
Before examining the contentions urged we propose to note the substance of the two documents and what the parties sought to achieve thereby.
It is, clear that the mortgage was with possession of the house and that the mortgagee wanted to make sure of Rs. 20 per month irrespective of the fact as to whether the mortgagor or some other person occupied the house and notwithstanding any vacancy during the period of the mortgage.
The sum of Rs. 20 per month which the mortgagee wanted to ensure payment of every month exceeded the interest stipulated for by Rs. 0 10 0 per month.
There was to be no decrease in this amount even if the mortgagor were to repay a portion of the principal.
The mortgagee had further the right to increase or decrease the rent and the mortgagor covenanted to vacate the property whenever the mortgagee asked for possession.
In other words if the mortgagee chose to go into possession himself, the mortgagor would be entitled to have Rs. 20 p.m. credited towards the dues on the mortgage so long as he continued in possession.
Even during the period of redemption when the mortgagee could not have sued for the mortgage money he still had a right to evict the mortgagor in case the latter defaulted in payment of Rs. 20 a month for two months.
It would appear that the relationship between the parties was not simply that of a mortgagee and mortgagor : the creditor also had the rights of a landlord qua his tenant besides other rights conferred on him which were greater than those possessed by an ordinary landlord.
There can be no doubt that by leasing the property back to the mortgagor in the way mentioned above the mortgagee tried to ensure the regular payment of interest but his rights were not limited to that alone.
In case he decided to go into possession himself the only remedy left to the mortgagor was to sue for redemption.
This right under the Limitation Act of 1908 was to enure for 60 years from the date of the mortgage and the mortgagor had not lost his right to redeem notwithstanding the passing of the preliminary decree in the mortgage suit.
The mortgage security continued even after the passing of the said decree : if the mortgagee had continued in possession of the property after the passing of the preliminary decree and did not apply for a final decree, he would only lose his right to recover the mortgage money 729 by sale of the property unless he applied for that purpose within the period of limitation fixed by the Limitation Act.
After the mortgagee had lost his right to apply for a final decree for sale, he did not lose his status as a mortgagee : he only lost his remedy to recover the mortgage money by sale.
The mortgagor did not lose his right to redeem.
We may now examine the authorities which were cited at the Bar in aid of the respective contentions.
In aid of his first proposition Mr. Mukherjee relied principally on the decisions of the Bombay High Court in Harilal Bhagwanji vs Hemshanker(1) and Ramnarain vs Sukhi(2).
The facts of the Bombay case were as follows.
The defendant appellant mortgaged with possession the house in suit for Rs. 7,500/ on August 23, 1952.
Under the deed of mortgage the principal amount was to carry interest at 9% and both principal and interest were charged on the mortgaged property.
A portion of the house was already in the occupation of the plaintiff as the defendant 's tenant on a monthly rental of Rs. 15 and another portion was let out to one Mansukhlal at the rate of Rs. 17 p.m., the defendant himself occupying the remaining part of the house.
Simultaneously with the mortgage a rent note was executed on the same day in respect of the portion of the house in the defendant 's occupation which was leased back to him by the plaintiff for a term of six months at the rate of Rs. 24 4 0 per month.
The plaintiff sued the defendant for possession of the said portion and for arrears of rent on the strength of the rent note.
The defence was that the rent note was a nominal document executed for securing payment of interest and that no relationship of landlord and tenant was created.
It was contended that the principal money and interest were to be realised from the mortgaged property and a suit for rent alone which was in reality interest would not he.
It was held by the High Court that the fact that the two documents had varying periods of operation would not make any difference in the determination of the question as to whether they formed part of the same transaction or not.
Further the rent to be realised from the tenant Mansukhlal was to be credited towards interest and the significant circumstance was that the rent payable by the defendant under the rent note was fixed with a view to making up the interest on the mortgage sum at 9%.
Although the mortgage deed recited that the plaintiff could let out the property to anyone he liked but as the property was already wholly occupied, the High Court took the view that the question of leasing it out to another tenant was not in contemplation of the parties.
As a result of the above findings the court held that the rent note was a mere device for securing payment of interest.
Reliance was placed on Ramnarain vs Sukhi(2) and it was held that although the decree for eviction of (1) A.I. R. 1958 Bombay 8.
(2) A.T.R.1957 Patna 24.
SupCI(NP)/70 2 730 the defendant from the suit property could not stand, that awarding arrears of rent was to be maintained.
In Ramnarain vs Sukhi(1) an application was made by the defend ant for setting aside the decree of the Small Causes court evicting him.
The defendant had executed a usufructuary mortgage in favour of the plaintiff and by a kerayanama executed on the same day had taken back the house on a rent of Rs. 6 per month from the plaintiff.
He had not paid any rent for over three years and the suit was brought for recovery of arrears of rent for the said period.
It was his contention that the agreement between the parties was not for execution of a usufructuary mortgage but one of a simple mortgage.
It was further contended on his behalf that the mortgage and the kerayanama were one and the same transaction and no relationship of landlord and tenant was created and the ijara term having expired the plaintiff 's remedy to recover the house rent which represented the interest the mortgage money could only lie under section 68 of the Transfer of Property Act.
The High Court referred to several decisions and came to the conclusion that the intention of the parties was that the mortgagee would not get possession of the mortgaged property but would only get interest on the amount advanced in the shape of rent so long as the lease continued and the amount payable under the kerayanama was interest on the mortgage money and not rent for use and occupation of the mortgaged property.
The mortgage bond and the kerayanama being part of the same transaction the mortgagee in execution of his decree for money obtained in respect of the so called rent of the house against the mortgagor would not be entitled to execute the decree for arrears of rent by sale of the property, as such a case would be governed by 0.
34 R. 14 Civil Procedure Code.
In the result the claim of the creditor in excess of 9 % p.a. was rejected but as the defendant had been in occupation of the house, although under an invalid lease, he was directed to pay, compensation to the plaintiff for use and occupation of the house for the period of his occupation.
Reference may also be made to the case of Umeshwar Prasad vs Dwarika Prasad(2).
In this case the mortgagor executed a usufructuary mortgage of certain properties for Rs. 14,400 for a period of seven years.
Soon thereafter the mortgagee leased back the entire property to the mortgagor for a period of about seven years at the annual rent of Rs. 432 which was equal to the interest on the sum advanced.
It was held by the Patna High Court that the mortgage bond and the lease deed were parts of the same transaction and the fact that the periods of the two deeds were not identical was immaterial and the case was governed by 0.
34 r. 14 (1) A.I.R. 1957 Patna 24.
(2) A.I.R. 1944 Patna 5.
731 and as such the mortgagee could not execute the decree for arrear of rent by sale of equity of redemption.
In Ganpat Ruri vs Md. Asraf Ali( ') the plaintiff had filed a suit claiming arrears of rent at the rate of Rs. 20 per month in respect of a house which had been given to him by the defendant in usufructuary mortgage by a registered document, the property being let out to the defendant on lease on the same day at the monthly rent of Rs. 20.
Applying the test as to whether on a reasonable construction of the two documents the property given in security was not only for the principal amount secured under the bond but also for the interest accruing thereupon, the court held that the transactions were two different transactions and for this reliance was placed on the fact that no rate of interest was prescribed in the bond and Rs. 20 p.m. could not possibly be treated as interest due on the principal amount of Rs. 500.
In contrast with the above cases reference may be made to the case of Jankidas vs Laxminarain(2).
In this case the plaintiffs who were usufructuary mortgagees of a house gave a lease of it to the defendant mortgagor on rent and put the lessee in possession thereof on the same day.
The rent remaining unpaid the plaintiff filed a suit for arrears of rent and ejectment.
Ultimately however the High Court of the former State of Marwar granted a decree for arrears of rent but refused the prayer for ejectment.
The plaintiff thereupon filed the suit in 1953 claiming arrears of rent amounting to Rs. 126/ for three years preceding the date of the suit.
The suit was resisted by the defendant who, among other pleas, contended that the suit was barred by 0.
II r. 2 C.P.C.
There was said that although the mortgage and the deed of lease represented one transaction that would not mean that no tenancy came into existence by the execution of the deed of lease.
It was held that the right which arose to the mortgagees to sue for rent was an independent obligation though it might be part of the same transaction in the sense that it was brought into existence by an arrangement made at the same time for a common purpose.
In Lalchand vs Nenuram(3) the defendants had executed a mortgage in favour of the plaintiffs agreeing to pay interest at 8 % p.a. which came to Rs. 27 8 0 per month.
The mortgagors had delivered possession to the mortgagees and a registered qabuliat reciting that they were taking on lease the property described at a monthly rental of Rs. 27 8 0.
The lower courts took the view that the mortgage deed was a rent note and part and parcel of the same transaction and the plaintiffs were not entitled to get a decree for (1) A.I.R. 1961 Patna 133.
(2) I.L.R. (3) I.L.R. 732 ejectment on the basis of the rent note.
Rejecting this the Rajasthan High Court observed at p. 952 : "Whether the two documents represent one transaction or two different transactions, a court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them.
Having secured the possession of the mortg age, the mortgagee is further entitled to lease it out even to the mortgagor.
It is in the interest of the mortgagor that the property is; leased out to him as he can better look after it.
There is nothing objectionable in this, nor is there any statutory prohibition for 'such transactions.
Now if the parties do this by executing proper documents, it is the duty of the court of law to give effect to them." The reasoning of the Rajasthan judgment seems to be logical and commends itself to us.
In all such cases the leasing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid.
If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note.
The position of the creditor is strengthened where as in this case the interest on the amount of the mortgage is not the same as the rental fixed.
If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it.
Under the provisions of 0.
34 r. 4 he cannot deprive the mortgagor of his right to redeem excepting by proceeding on his mortgage.
Although we express no final opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannot put the property to sale for realisation of the amount decreed but there can be no objection to his suing for possession if the rent note entitles him to do so.
So long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession.
This position would continue so long as the property is not sold under a final decree for Sale under the provisions of 0. 34 C.P.C.
In our opinion the second contention put forward on behalf of the appellant has no force.
The rights of a mortgagee do not merge in his rights under the preliminary decree for sale.
As already mentioned, the mortgagee lost his right to recover the money 733 by sale of the mortgaged property; otherwise his security remained intact and the mortgagor continued to have his right to redeem the property.
As regards the third point the only statutory provision to which ,a reference was made was section 28 of the Limitation Act of 1908 which provided that : "At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.
" If the right of the mortgagee arose on the strength of the rent note which continued to be in force notwithstanding that the period for applying for a final decree for sale had expired there could be no extinction of his right to sue for possession because of section 28 of the Limitation Act.
In the result the appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
| The appellant company had a factory at Varanasi at which chemicals including ammonia were manufactured.
It was considered by the Central Excise authorities that there had been evasion of duty on ammonia by the company.
The Assistant Collector Central Excise issued a warrant for search and seizure of goods and documents, pursuant to which the premises of the aforesaid factory were raided in May, 1968 and certain documents seized.
The company filed a writ petition in the High Court which was dismissed by the Single Judge.
The Division bench upheld the order of the Single Judge.
In appeal to this Court by special leave, the questions that fell for consideration were (i) Whether section 12 of the Central Excise Act was void because the powers delegated to the Central Government thereby including the power to make alterations in the Act applied were excessive; (ii) Whether the Sea Customs Act, 1875 having been re pealed, it was open thereafter to the Central Government under section 12 of the Excise Act to apply section 105 of the ; and (iii) Whether the Assistant Collector issued the warrants in the present case after due application of mind to relevant materials and 'facts in terms of section 105(1) of the .
HELD : (i) In the notifications issued inter alia applying section 105(1) and section 1 10 of the , no such changes had been made as could possibly fall within the meaning of the word 'alterations.
The power to restrict and modify does not import the power to make essential changes.
It is confined to alterations of minor character and no change in principle is involved.
The word 'alteration ' in section 12 must be understood in the sense in which it was open to the legislature to employ it legitimately and in a constitutional manner.
No question was thus involved of delegation either of any essential legislative functions or any change of legislative policy.
[96 B D] In re ; , , referred to.
(ii)S. 8(1) of the General Clauses Act provides that where any Central Act repeals and re enacts with or without modification any provision of the former enactment then references in any such enactment or in any instrument, to the provisions so repealed shall, unless a different intention appears, be construed as references to the provisions so re 93 enacted.
By virtue of this provision it could not be disputed that in section 12 of the Central Excise and Salt Act, 1947, the can be read in place of the .
[96 E] The contention that section 12 of the Act empowers incorporation of the provision of the in the Act itself and, therefore, 8(1) of the General Clauses Act, does not apply could not be accepted.
Section 12 only contained a provision delegating limited powers to the Central Government to draw upon the provisions of the for the purpose of implementing section 3 of the Act.
A] Secretary of State for India in Council vs Hindusthan Co operative Insurance Society, 58 I.A. 259, distinguished; The Collector of Customs Madras vs Nathella Sampatha Chetty The extension of section 105 could not be said to be illegal merely because under section 172 of the it was a Magistrate who after applying judicial mind had to issue search warrant whereas under the present notification after the enactment of the , it was the Assistant Collector of Customs performing executive functions who had been empowered to issue a search warrant.
By the latter notification the previous notification applying the provisions of the was superseded and no question with regard to the validity of the notification issued in 1963 and then amended in 1965 could survive.
Collector Custom & Excise Cochine & Ors, vs A. section Bava , distinguished [98 A C] (iii)On the facts of the case it could not be said that the Assistant Collectorhad no relevant material upon which the belief could be founded in termsof section 105(1) of the
|
Civil Appeal No. 4 of 1977.
From the Judgment and Order dated 3/4.3.1975 of the Calcutta High Court in Appeal No. 156 of 1974.
G.L. Sanghi, Dhruv Mehta, Aman Vachhar and S.K. Mehta for the Appellants.
Tapas Ray and G.S. Chatterjee for the Respondents.
Harish N. Salve, Lalit Bhasin, Ms. Nina Gupta, Vibhu Bhakru, Pranab Mullick and Vineet Kumar for the intervener.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
This appeal by certificate is from the Judgment of the Calcutta High Court dated 4.3.1975 passed in appeal No. 156 of 1974.
The appellants in partnership have been carrying on business of restaurants under the name and style of Trinca 's at No. 17B, Park Street Calcutta, providing food and drinks (alcohol and non alcohol) to the customers under valid licences.
Sometimes musical performences are also arranged.
The restaurants are provided with air conditioning plant.
Under the West Bengal Entertainments and Luxuries (Hotels and Restaurants) Tax Act, 1972 as amended by the Act of 1974, hereinafter referred to as 'the Act, the respondents by their Memo No. 4942/A.T. dated 9.12.1972 called upon the appellants to make ad hoc payment of luxury tax calculated at Rs.2,40,000.00.
The President of the Hotelers ' Association made a representation against this illegal tax which was turned down by the respondents, and thereafter the appellants challenged the validity of this action in the Calcutta High Court by filing Writ Petition No. 358 of 1973 on 16.5.1973.
The appelants contended, inter alia before the High Court that the levy was unreasonable restriction on carrying the business; that the levy was unreasonable restriction on carrying the business; the Act was not meaningful and purposeful; the rules were confiscatory in nature; and the mode of the Act.
The learned Single Judge of the High Court dismissed the writ petition relying on the Judgment passed on 6.3.1974 in Writ Petition No. 338 of 1973 wherefrom Civil Appeal No. 406 of 1976 was filed in this Court.
467 From the above order of the learned Single Judge, the appellants filed Appeal No. 156 of 1974 on 26.6.1974 before the Division Bench of the Calcutta High Court contending that the legislature cannot enlarge the scope of Entry 62 and seek to impose a tax on expenditure incurred by a customer on services rendered to him including food and drinks.
The High Court held that section 2(b) defined entertainment tax but section 2(c) defined entertainment tax and under the Act entertainment tax meant tax payable under section 3 of the Act.
A clear distinction had been made between entertainment and entertainment tax and in this case the High Court was concerned only with entertainment tax as defined in section 2(C).
The second submission before the High Court was whether the State legislature had the competence to impose entertainment tax payable under section 3 of the Act and the High Court held that section 3 was a valid piece of legislation.
The argument of the appellants was that tax imposed by section 3 was discriminatory and it violated article 14 of the Constitution.
The High Court held that the differentia made in section 3 had a rational relation to the object sought to be achieved by the statute.
The last submission was whether the persons enjoying the same facilities had been treated differently as the section had imposed a maximum tax of 15% on amount paid or payable by the customer.
The High Court held that since a distinction had to be maintained between section 2(b) and section 2(c), the learned counsel 's argument on discrimination could not be acceded to.
The appeal was accordingly dismissed, but certificate of fitness to appeal was granted.
The contentions raised in this appeal are the same as were raised in Civil Appeal No. 406 of 1976 whcih has just been dismissed.
In East India Hotels Ltd. vs State of West Bengal, AIR 1990 SC 2029 this Court held that whatever has been said by this Court in relation to section 4 of the Act will be equally applicable to section 3 of the Act.
Consequently, for the above reason and for the reasons stated in our Judgment in Civil Appeal No. 406 of 1976, we dismiss this appeal also with costs quantified at Rs.5,000 (Rupees five thousand).
G.N. Appeal dismissed.
| For the recruitment of 71 officers in the Punjab Civil Services (Executive Branch) and Allied Services, the Punjab Public Service Commission, at the behest of the State of Punjab, held a competitive examination.
As per the requirement of the Punjab Civil Services (Executive Branch) Rules, 1930, the applying candidates specified the posts in order of preference in their respective applications.
One such candidate, appellant V.M. Bansal, who had initially indicated his first preference for the post of Excise & Taxation Officer, intimated to the Commission, but undisputedly before the declaration of the result, that he wanted change of his preference so that his first preference was of Punjab Civil Service (Executive Branch).
This change was allowed by the Commission.
Bansal 's father, who was a member of the Commission, did not participate in the deliberations of the Commission when Bansal was interviewed.
Of the 71 candidates declared successful, Bansal was declared successful for a post in the Punjab Civil Service, and appellant jaswant Singh Nerwal for the post of Tehsildar in the Allied Services.
Some of the unsuccessful candidates challenged the entire selection on various grounds before the Punjab and Haryana High Court by means of a writ petition.
On the other hand, Nerwal, through a separate writ petition, challenged the change of preference allowed by the Commission to Bansal which led to Bansal becoming a Punjab Civil Service Officer and Nerwal a Tehsildar, and claimed that he be declared successful to a post in the Punjab Civil Service in preference to Bansal.
The High Court by a common judgment rejected the claim of Nerwal and dismissed his writ petition, but allowed the writ petition preferred by the unsuccessful candidates in part inasmuch as the selection of Bansal as a Punjab Civil Service Officer and his consequential appointment was quashed.
The High Court however did not disturb the selection of the remaining 70 successful candidates but 412 required Bansal to compete again with the other unsuccessful candidates as per its direction extracted in the judgment.
The High Court in issuing the aforesaid direction applied the decision of this Court in A. K. Kraipak & Ors. etc.
V. Union of India & Ors., , to neutralise Bansal 's father being a member of the Commission.
And even though Bansal 's father had not participated in the deliberations of the Commission, when Bansal was interviewed, his brooding presence was held negatively to have influenced the selection and the possible ouster of a possibly successful candidate.
Hence these two appeals by special leave, one by Bansal and the other by Nerwal, against the judgment of the High Court.
Allowing the appeal of Bansal and dismissing the one filed by Nerwal, the Court, HELD: (1) Besides Bansal 's father, there were four other members of the Public Service Commission and who had functioned as a Commission.
There was a long list of as many 540 candidates to be interviewed and the interviews went on from 24.9.1973 uptil 30.10.1973.
[417G] (2) Bansal 's father did what was expected of him, in having declined to participate in the deliberations of the Commission when Bansal went for the viva voce test.
[418C] (3) No material has been shown to entertain the doubt that Bansal 's father being a member of the Public Service Commission, per se had the effect of other members keeping track of comparatives in order to single out Bansal as a successful candidate.
There is not a word of mala fide suggested against the other members of the Public Service Commission, of having shared the supposed animus of Bansal 's father.
There is therefore no reason to sustain the judgment of the High Court on this aspect of the case.
[418A B] A.K. Kraipak & Ors. etc.
vs Union of India & Ors., [19701 1 SCC 457, distinguished; Javid Rasool Bhat & Ors.
vs State of Jammu & Kashmir & Ors.
, ; , affirmed; B.N. Nagarajan & Ors.
vs State of Mysore & Ors.
, [ , referred to.
Ashok Kumar Yadav & Ors.
vs State of Haryana & Ors. etc.
, [1985] Supp.
SCR 657, relied upon.
(4) The manner in which the viva voce test is conducted, no single 413 member can possibly usurp to himself the total functioning of the Commission and jealous as human nature is, no other member can be expected to have abdicated his powers to another, at that level, and to oblige another.
These circumstances do not give rise to the likelihood of Bansal 's father espousing the cause of his son to the other four members of the Commission and monitor the performance of 540 candidates to be interviewed, the results of written examination of which, he was not alleged to be aware before hand.
In these circumstances, it is to uphold the view of the High Court requiring Bansal to be interviewed again so as to rub against the unsuccessful candidates and to suffer the consequence.
[418C H] In the instant case, the system of division of marks out of the allocated marks for the viva voce test amongst the actual number of members present and participating in the interview, was not however commended by the Court, nor did the Court approve the provision of 200 marks for the viva voce test because of the percentage now authoritatively fixed in Ashok Kumar Yadav 's case.
[418F] (5) Bansal has stayed put and working as an Officer in the Punjab Civil Service and his displacement at the present stage would otherwise be inequitous serving nobody 's purpose due to the time lag.
The unsuccessful candidates cannot possibly now, at this stage, due to age and other supervening factors be fit for the viva voce test, so as to elbow out Bansal.
The obedience of the directions of the High Court at this late stage would overly be counter productive and thus not worth sustaining.
[419A B] (6) Once it is established that the change of preference could be made and it was intimated and approved timely, the conclusion is inescapable that Bansal 's first preference to a post in the Punjab Civil Service ranked superior to Nerwal 's preference, because of their interse ranking in the examination results.
Thus the appeal of Nerwal has no substance and deserves rejection.
[419H 420A]
|
Civil Appeal No 3244 of 1988.
From the Judgement and Order dated 8.7.1988 of the Karnataka High Court in W.A. No.560 of 1983.
K.N. Bhat S.K. Kulkarni and Ms. Kiran Suri for the Appellant S.N Bhat M.Veerappa and K.H Nobin Singh for the respondents.
The Judgment of the Court was delivered by N.P. SINGH, J.
This appeal has been filed against an order passed by the High Court, on a writ application filed by the petitioner respondent (hereinafter referred to as "the respondent") quashing the order of termination of the service of the respondent.
The respondent was appointed as a Lecturer in Surgical Oncology on 3rd July, 1981.
He was to be on probation for a period of one year from the date of his appointment which period could have been extended at the discretion of the competent authority.
One of the conditions provided is as follows : "Failure to complete the period of probation to the satisfaction of the competent authority will render you liable to be discharged from service.
" Before the expiry of one year, the impugned order of termination was issued on 30th January, 1982 saying: "In accordance with the decision of the Governing Council at its meeting held on 28th January, 1982 the services of Dr. Pandurang Godwalkar, Lecturer in Surgical Oncology (on probation), Kidwai Memorial Institute of Oncology, Bangalore are terminated with effect from the afternoon of 30 January, 1982, as per Rule 4 of the Conditions of Service Rules (Annexure 2 Chapter I) of the Institute.
He is paid one month 's salary in lieu of one month 's notice required as per rules." Although the order under challenge was order of termination simpliciter, the validity thereof was questioned by the respondent on the ground that an order of dismissal had been passed in the garb of an order of termination.
According to the respondent, some complaints had been made against him to the Director of the Institute who instead of initiating a departmental proceeding on basis of charges levelled against the respondent, put up the matter before the Governing Council of the Institute for termination of the service of the respondent during the period of probation.
The learned Judge in view of the assertions made on behalf of the respondent directed the institute to produce the original records including certain documents and papers which had been marked as confidential.
From the note of the Director it appeared that complaints had been made in respect of performance of the duties by the respondent.
In that note it was also mentioned that the respondent was unsympathetic towards the patients.
It had also brought to the notice of the Governing Council that the respondent had attempted to obtain the signatures.
of some of the patients on the petitions stating that he was a good doctor.
On one occasion it was reported that the respondent had taken away a girl on his scooter and brought her back late in the night.
The said girl was an attendant to a patient in the hospital.
The learned Judge came to the conclusion that as the service of the petitioner had been terminated because of the complaints made against him it really amounted to his removal for the misconduct alleged in the note of the Director.
According to the learned Judge the Institute should have initiated a departmental proceeding in respect of the alleged charges and only after due enquiry any action should have been taken.
There is no dispute that the service of the respondent had been terminated during the period of probation The appointment of the respondent was with a clear condition that failure to complete the period of probation to the satisfaction of the competent authority shall render him liable to be discharged from the service.
Relevant part of Rule 4 of the Conditions of Service Rules is as follows : "4. TERMlNATION : 1.
All appointments shall be terminable on a notice in writing either by the appointing authority or the employee without assigning any reason as set below : a) During the period . one month of probation.
b) After completion of the period 1 of probation. months.
c) The notice referred to in rule (1) above shall not be necessary if in lieu thereof an amount equal to the pay and allowance for the period of notice is paid. . . . " Generally in connection with an order of termination, a question is raised before the court as to what is the motive behind the termination of the service of the employee concerned whether the reason mentioned in the order of termination has to be accepted on its face value or the background in which such order of termination simpliciter has been passed should be examined to find out as to whether an officer on probation or holding a temporary appointment has been, in fact, dismissed from the service without initiating any departmental enquiry.
If an employee who is on probation or holding an appointment on temporary basis is removed from the service with stigma because of some specific charge, then a plea cannot be taken that as his service was temporary or his appointment was on probation, there was no requirement of holding any enquiry, affording such an employee an opportunity to show that the charge levelled against him is either not true or it is without any basis.
But whenever the service of an employee is terminated during the period of probation or while his appointment is on temporary basis, by an order of termination simpliciter alter some preliminary enquiry it cannot he held that as some enquiry had been made against him before the issuance of order of the termination it really amounted to his removal from service on a charge as such penal in nature When an appointment is made on probation, it presupposes that the conduct, performance, ability and the capacity of the employee concerned have to be watched and examined during the period of probation.
He is to be confirmed after the expiry of probation only when his service during the period of probation is found to be satisfactory and he is considered suitable for the post against which he has been appointed.
The principle of tearing of the veil for finding out the real nature of the order shall be applicable only in a case where the Court is satisfied that there is a direct nexus between the charge so levelled and the action taken.
If the decision is taken, to terminate the service of an employee during the period of probation, after taking into consideration the overall performance and some action or inaction on the part of such employee then it cannot be said that it amounts to his removal from service as punishment.
It need not be said that the appointing authority at the stage of confirmation or while examining the question as to whether the service of such employee be terminated during the continuance of the period of probation is entitled to look into any complaint made in respect of such employee while discharging his duties for purpose of making assessment of the performance of such employee.
Even it such employee while questioning the validity of an order of termination simpliciter brings on the record that some preliminary enquiry or examination of some allegations had been made that will not vitiate the order of termination.
Reference in this connection may be made to the case of Oil and Natural Gas Commission vs Dr. Mohd. section Iskender Ali; , where it was pointed out that a temporary employee is appointed on probation for a particular period only in order to test whether his conduct is good and satisfactory so that he may be retained" .
It was also said that even if misconduct negligence inefficiency may be the motive or the influencing factor which induced the employer to terminate the service of the employee which such employe admittedly had under the terms of the appointment such termination cannot be held to be penalty or punishment.
Same view has been reiterated in connection with appointment on temporary or ad hoc basis in the cases of Ravindra Kumar Misra vs U.P. State Handloom Corpn.
Ltd, ; State of Uttar Pradesh vs Kaushal Kishore Shukla, ; and Triveni Shankar Saxena vs State of U.P., Judgements Today On behalf of the respondent reliance was placed on the case of Anoop Jaiswal vs Government of India, ; In that case the service of the appellant had been terminated during the period of probation.
On the materials on record it was held by this Court that the order of termination really amounted to punishment because the real foundation of the action against the appellant was the act of misconduct on June 22, 1981.
The aforesaid judgment is of no help to who respondent because in that case a clear finding was recorded by this Court that the service of the appellant had been terminated because of a particular misconduct alleged against him which had never been enquired into.
So far the facts of the present case are concerned the Governing Council examined the different reports in respect of the respondent during the period of probation and considered the question as to whether he should be allowed to continue in the service of the Institute.
The decision appears to have been taken by the Governing Council on the total and overall assessment of the performance of the respondent, in terms of the condition of the appointment and Rule aforesaid.
Accordingly the appeal is allowed and the judgment of the High Court is set aside.
However, in the circumstances of the case, there will be no order as to costs.
G.N Appeal allowed.
| In the year 1972 the Karnataka Legislature passed a resolution under Article 252 of the Constitution imposing a ceiling on urban immovable property and the acquisition of such property in excess of the ceiling is limit for public purposes and all the matters connected therewith shall be regulated in the State by Parliament by law.
On 1.4.74 the Karnataka Land Reforms (Amendment) Act was enacted and under the Act the tenant of the land covered by the Act was entitled to the grant of occupancy rights after making an application under the Act.
The Act came Into force with effect from 2.1.85.
But for the purpose of grant of occupancy rights, 1.4.74 was the relevant date.
In the year 1975 the Karnataka Urban Agglomeration Ordinance was passed, whereunder all lands between the periphery of 8 K.Ms.
of the municipal limits of Hubli Dharwad were declared as urban agglomeration land.
The Parliament passed the Urban Land (Ceiling and Regulation) Act, 1976 for imposition of ceiling on urban properties and the Ceiling Act was made applicable to Karnataka also in view of the resolution passed by the State Government.
The lands involved in the present cases were covered by the development plan by the Belgaum City Town Planning authority as per the Master Plan and they were included and declared as urban agglomeration in the City of Hubli under the provisions of the Ceiling Act.
The owners of the agglomeration lands challenged the order of the Land Tribunal under the Land Reforms Act conferring occupancy rights on the tenants before the High Court.
They contended that the lands involved in the cases were within the purview of the Ceiling Act and therefore the provisions of the Land Reforms Act had no application to such lands on the ground that the provisions of the Ceiling Act.
The writ petitions were dismissed by the High Court.
The owner 's writ appeals were also dismissed by a common judgment by the Division Bench of the High Court.
The Division Bench held that there was no conflict between the two enactments.
The judgment of the Division Bench was challenged in S.L.P. (Civil) No. 16041 42/88.
Many of the similar writ petitions that were pending before the High Court were transferred to the Land Reforms Appellate Tribunal.
The Appellate Tribunal dismissed the petitions by a common order following the judgment of the Division Bench of the High Court.
Several Civil revision petitions filed by the land owners against the order of the Appellate Tribunal were dismissed by the High Court.
Some of the special leave petitions were filed against the order of the High Court in the said civil revision petitions.
The petitioners land owners contended that when in pursuance of the resolution of the State Legislature passed under Article 252 of the Constitution the Parliament legislated in respect of the topic covered by the resolution.
The Parliamentary law repealed or superseded the existing State legislation on the topic and therefore such law could not be enforced thereafter; and that vesting of tenanted land in the State and conferment of occupancy rights under the provisions of the State Act directly fall under the subject of imposing ceiling on land holding and other matters incidental or ancillary to the main topic of imposing ceiling and therefore they were fully covered by the Ceiling Act passed by the Parliament and the same superseded the State enactment in respect of such lands.
The respondents submitted that "imposition of ceiling" was a distinct and separately identifiable subject and the Parliament was empowered to legislate; that the power of the State to legislate in respect of the remaining part of the subject matter was unaffected; that when two distinct powers came into existence, vesting law making competence in the State and Parliament, the pith and substance of the laws made by each of them had to be examined to see whether any one of them encroached the field set apart as falling within the competence of the other body; that in any event the provisions of Chapter III of the Karnataka Land Reforms Act had nothing to do with the imposition of ceiling on the urban land and that conferring of occupancy rights etc.
to the tenants under Chapter III of the Karnataka Land Reforms Act did not come under the category of "the matters connected therewith or ancillary or incidental to the imposition of ceiling" on urban immovable property.
Dismissing the special leave petitions, this Court, HELD: 1.01.
Article 252 empowers the Parliament to legislate for two or more States on any of the matters with respect of which the Parliament has no power to make law except as provided under Articles 249 and 250.
This power to legislate is vested in the Parliament only if two or more State Legislatures think it desirable to have a law enacted by Parliament on such matters in List II, i.e. with respect to which the Parliament has no power to make law for the State.
The passing of the resolutions by the State Legislatures is a condition precedent for vesting the Parliament with such power.
[339 C D] 1.02.
The scope of Entry 18 is very wide and the land mentioned therein may be agricultural or non agricultural and may be rural or urban.
The subject matter carved out of Entry 18 under the resolutions passed by The various State Legislatures related to only "urban immovable property" and by virtue of the resolution the law that can be enacted by the Parliament should be a law "imposing a ceiling on such urban immovable property." [340 B, C] 1.03.
From the resolution it is clear that the subject matter that was resolved to be entrusted to the Parliament was the one imposing a ceiling on urban immovable property and acquisition of such property in excess of the ceiling.
This subject matter is the topic that falls within Entry 18 of List II of Schedule VII to the Constitution and the subject matter of Entry 18 has been originally kept apart for the State Legislature to make law and Parliament had no competence in respect of those matters falling under the wide scope of Entry 18.
By virtue of this resolution a part of the area falling under Entry 18 is transferred to the domain of Parliament to make law relating to the matters within the transferred area.
[339 G, H; 341 A] 2.01.
The primary object and the purpose of the Urban Land (Ceiling and Regulation) Act, 1976 is to provide for the imposition of ceiling on vacant land in urban agglomeration and for acquisition of such lands in excess of the ceiling limit and to regulate the construction of buildings on such lands and for matters connected therewith.
[340 H; 341 A] 2.02.
The Karnataka Land Reforms Act as amended in 1974 is a welfare legislation.
The object of the Act was to have a uniform law in the State of Karnataka relating to agrarian reforms, conferment of ownership on tenants, ceiling on land holdings and for certain other matters contained therein.
[342 D] 2.03.
In respect of imposing ceiling on the land under urban agglomeration the provisions of the Ceiling Act alone are applicable and to that extent the provisions of Chapter IV of the Karnataka Land Reforms Act which also deal with the imposition of ceiling would not be applicable.
[344 C] 2.04.
The land in the instant case comes under the urban agglomeration the imposition of the ceiling should naturally be under the provisions of the Urban Ceiling Act and not under the Karnataka Land Reforms Act.
[344 B, C] 2.05.
Imposition of ceiling on urban land is a distinct and independent subject as compared to imposition of ceiling on owning or to hold agricultural land or any other kind of property which do not attract the Urban Ceiling Act.
These are two distinct powers and therefore the law making competence can be in two different legislative bodies.
Consequently it is difficult to hold that the provisions of Chapter III of the Karnataka Land Reforms Act are outside the legislative competence of the State Legislature.
[350 C, D] 2.06.
The one topic that is transferred in the resolution passed under Article 252 as distinct and separately identifiable and does not include the remaining topics under Entry 18 in respect of which the State alone has the power to legislate.
[351 D] 2.07.
The legislative power of the State has to be reconciled with that of the Parliament and that in their respective fields each is supreme.
Even assuming that the State enactment has same effect on the subject matter falling within the Parliament 's legislative competence that by itself will not render such law invalid or inoperative.
[350 G H] 2.08.
There is no conflict between the Ceiling Act and the State Act.
The imposition of ceiling on urban immovable property is an independent topic and cannot be construed as to nullify the other subject left in the domain of the State Legislature under Entry 18 inasmuch as imposition of ceiling is a distinct and separately identifiable subject and does not cover the other measures such as regulation of relationship of landlord and tenant in respect of which the State Legislature has competence to legislate.
[351 C D] 2.09.
There is a ceiling provision under Section 45(2) of the Karnataka Land Reforms Act providing for computation of the area in respect of which the tenant may be granted occupancy rights.
But it is clear that ceiling on the area in this context is only for the purpose of Section 45.
[351 F] 2.10.
Provisions in the Chapters II, III, V, VI to XI of the Karnataka Land Reforms Act deal with the conferment of occupancy rights on the respective tenants and they do not in any way conflict with the subject matter transferred to the Parliament by the resolution passed under Section 252.
[351 E,F] Thumati Venkaiah and others vs State of Andhra Pradesh and of others; , ; Union of India and others vs Valluri Basavaiah Chowdhary and others; , ; Calcutta Gas Company (Proprietory) Ltd. vs State of West Bengal and others, and Kannan Devan Hills Produce Company Ltd. vs The State of Kerala etc.; , referred to.
|
minal Appeal No. 130 of 1960.
Appeal by special leave from the judgment and order dated April 28, 1960, of the Allahabad High Court in Criminal Revision No. 1865 of 1959.
N. C. Chatterjee, D. P. Singh, T. section Venkataraman, R. K. Garg, section C. Agarwal and M. K. Ramamurthi, for the appellants.
G. section Pathak, O. C. Mathur and C. P. Lal, for the respondent.
October 25.
The Judgment of the Court was delivered by SHAH J.
Appellant No. 1 is the editor and appellant No. 2 is the printer and publisher of the ',New Age " an English Weekly news sheet published in Delhi.
On May 15, 1959, the Public Prosecutor, Kanpur, filed a complaint in the Court of Session, Kanpur, against the appellants charging them with having published a news item in the issue of the " New Age " dated November 16, 1958, knowing or having good reasons to believe the same to be false and defamatory of the Chief Minister of the State of Uttar Pradesh " in order to harm his reputation in the eyes of 65 the public in general and among his acquaintances in particular ".
With this complaint was filed an order under the signature of the Home Secretary to the Government of Uttar Pradesh sanctioning under a. 198B(3)(b) of the Criminal Procedure Code the filing of a complaint by the Public Prosecutor for an offence under section 500, Indian Penal Code, against the appellants in respect of the news item published on November 16, 1958, under the caption " Explosive situation in Kanpur ".
The learned Sessions Judge took cognisance of the complaint.
After six witnesses were examined on behalf of the prosecution, he framed a charge against the appellants for the offence of defamation in that they had published the news item under the caption " Explosive situation in Kanpur " intending to harm or knowing that they were likely to harm the reputation of the Chief Minister of Uttar Pradesh.
The appellants then applied to the High Court of Judicature at Allahabad praying that the order of the Court of Session framing a charge for the offence of defamation be set aside.
They submitted that there was no evidence that the Home Secretary to the Government of Uttar Pradesh had applied his mind to the facts of the case before sanctioning prosecution of the appellants; that in any event, the publication was not defamatory of the Chief Minister in respect of his conduct in the discharge of his duties as Chief Minister and that the complaint filed by the Public Prosecutor not having been signed by the Chief Minister who was the aggrieved person, the Sessions Judge had no jurisdiction to entertain the complaint.
The High Court rejected all the contentions raised by the appellants.
Against the order rejecting the contentions, this appeal with special leave under article 136 of the Constitution is preferred by the appellants.
We may state that the observations made by the High Court that whether the publication of the news item in the issue of the "I New Age " dated November 16, 1958, under the caption " Explosive situation in Kanpur " was defamatory of the Chief Minister in respect of his conduct in the discharge of his duties 66 deciding the application in revision submitted to them and were not intended to record a final decision as to the defamatory character of that publication.
It will be for the Trial Judge when the case is tried before him to arrive at a conclusion on the materials placed before him whether the publication is defamatory of the Chief Minister in respect of his conduct in the discharge of his public functions.
The plea that the sanction was accorded by the Home Secretary to the filing of the complaint without applying his mind is without substance.
Siddiqi, an assistant in the Home Department to the Government of Uttar Pradesh, has deposed that he bad received the papers in connection with the sanction for the prosecution of the two appellants from the Superintendent, Rome Department, with " notings ", that he had taken the " notings " and the relevant papers including the offending issue to the Deputy Secretary, that the Deputy Secretary had also made his note on those papers, and that thereafter he the witness had taken those papers to M. G. Kaul, Home Secretary, who had perused the " notings " and the note of the Deputy Secretary as also the article in question and after looking into the papers had approved the draft sanction.
It is not disputed that the Home Secretary was authorised to sanction a complaint for defamation of a Minister of the Government of Uttar Pradesh.
The evidence clearly discloses that the Home Secretary had applied his mind to all the material facts before him and had then granted the sanction.
Mere production of a document which sets out the names of the persons to be prosecuted and the provisions of the statute alleged to be contravened, and purporting to bear the signature of an officer competent to grant the sanction where such sanction is a condition precedent to the exercise of jurisdiction does not invest the court with jurisdiction to try the offence.
If the facts which constitute the charge do not appear on the face of the sanction, it must be established by hose facts were laced 67 before the authority competent to grant the sanction and that the authority applied his mind to those facts before giving sanction.
In the present case, the facts constituting the charge appear on the face of the sanction ; and evidence has also been led that the facts were placed before the sanctioning authority, that the authority considered the facts and sanctioned the prosecution.
Section 198B which deals with a certain category of the offences of defamation of high dignitaries of the State, and of Ministers and public servants in respect of their conduct in the discharge of public functions was incorporated in the Code by Act XVI of 1955.
Prior to the incorporation of section 198B, the only condition precedent to the entertainment of a complaint of defamation by a court competent in that behalf was prescribed by section 198, viz., that there had to be a complaint by the person aggrieved before the court took cognisance of that offence.
By section 198B, several conditions precedent to the trial of offences falling within that section are prescribed.
The material clauses of section 198B are sub sections
(1), (3) and (4).
(1): " notwithstanding anything contained in this Code, when any offence falling under Chapter XXI of the Indian Penal Code (Act XLV of 1860) (other than the offence of defamation by spoken words) is alleged to have been committed against the President or the Vice President, or the Governor or Rajpramukh of a State, or a Minister or any other public servant employed in connection with the affairs of the Union or of a State, in respect of his conduct in the discharge of his public functions, a Court of Session may take cognisance of such offence, without the accused being committed to it for trial, upon a complaint in writing made by the Public Prosecutor.
(3): No complaint under sub section
(1) shall be made by the Public Prosecutor except with the previous sanction, (a)in the case of the President or the Vice President or the Governor of a State, of any Secretary to the Government authorised by him in this behalf 68 (b) in the case of a Minister of the Central Government or of a State Government, of the Secretary to the Council of Ministers, if any, or of any Secretary to the Government authorised in this behalf by the Government concerned; (c) in the case of any other public servant employed in connection with the affairs of the Union or of a State, of the Government concerned.
(4) : No Court of Session shall take cognisance of an offence under sub section
(1) unless the complaint is made within six months from the date on which the offence is alleged to have been committed.
This section provides for a special procedure for the trial of the offence of defamation of certain specified classes of persons.
The conditions necessary for the applicability of sub section
(1) of section 198B are: (1) that the defamation is not by spoken words; (2) that the offence is alleged to have been committed against the President, or the Vice President, or the Governor or Rajpramukh of a State, or a Minister or any other public servant employed in connection with the affairs of the Union or of a State; (3) that the defamation is in respect of the person defamed in the discharge of his public functions; (4) that a complaint is made in writing by the Public Prosecutor; (5) that the complaint is made by the Public Prosecutor with the previous sanction of the authorities specified in sub section
(3); and (6) that the complaint is made within six months from the date on which the offence is committed.
The Court of Session may entertain a complaint of defamation of the high dignitaries and of Ministers and public servants in respect of their conduct in the discharge of their public functions only if these conditions exist.
Section 198 require,% that a complaint for defamation may be initiated by the person aggrieved and no period of limitation is prescribed in that behalf.
Such a complaint can only be entertained by a Magistrate of the First Class.
But section 198 B in the larger public interest, has made a departure from that rule; the accusation is to be entertained not by a 69 Magistrate, but by the Court of Session without a committal within six months of the date of the offence on a complaint in writing by the Public Prosecutor with the previous sanction of the specified authorities.
It is manifest that by the non obstante clause, " notwithstanding anything contained in this Code " in sub.s.
(1), the operation of diverse provisions of the Code relating to the initiation and trial of the offence of defamation is excluded and prima facie section 198 is one of those provisions.
It is however urged on behalf of the appellants that sub section
(13) of section 198 B makes the provisions of section 198 applicable to a complaint for defamation of persons specified in section 198 B(1) and provides that cognisance of the offence of defamation cannot be taken by a court except upon a complaint by the person aggrieved, and that the Chief Minister of Uttar Pradesh alleged to be the party aggrieved not having signed the complaint the Court of Session, Kanpur, had no jurisdiction to take cognisance of the complaint.
Sub section (13) provides that " the provisions of this section shall be in addition to, and not in derogation of, those of section 198 ".
In our judgment, this clause is enacted with a view to state ex abundanti cautela that the right of a party aggrieved by publication of a defamatory statement to proceed under section 198 is not derogated by the enactment of section 198 B.
The expressions, " in addition to " and " not in derogation of " mean the same thing that section 198 B is an additional provision and is not intended to take away the right of a person aggrieved even if he belongs to the specified classes and the offence is in respect of his conduct in the discharge of his public functions, to file a complaint in the manner provided by section 198.
" Derogation " means, taking away, lessening or impairing the authority, position or dignity, and the context in in which sub section
(13) occurs clearly shows that the provisions of section 198 B do not impair the remedy provided by section 198.
It means that by section 198 B the right which an aggrieved person has to file a complaint before a Magistrate under section 198 for the offence of defamation, even if the aggrieved person belongs to the specified classes and the defamation 70 is in respect of his conduct in the discharge of his public functions, is not taken away or impaired.
If sub section
(13) be construed as meaning that the provisions of section 198B are to be read as supplementary to those of section 198, the non obstante clause with which sub section
(1) of section 198B commences is rendered wholly sterile, and unless the context compels such an interpretation, the court will not be justified in adopting it.
There is again inherent indication in sections 198 and 198B, which supports the view that section 198B was not intended to be supplementary to section 198, but was intended to provide an alternative remedy in the case of defamation of persons set out in that section.
The expression " complaint " as defined in section 4, cl.
(h) of the Code means " the allegation made orally or in writing to a Magistrate with a view to his taking action under this Code that some person, whether known or unknown, has committed an offence. .
Every complaint of an offence has to be made to a Magistrate competent to take cognisance thereof and not to a Court of Session.
A Court of Session under the Code of Criminal Procedure unless otherwise expressly provided, is ' not competent to entertain a complaint; it can only try a criminal case committed to it.
The expression ,,complaint" in section 198 is manifestly used in the meaning as defined by section 4(h).
Even a superficial examination of the contention raised by the appellants reveals that if effect be given to it, the utmost confusion would result in working out the provisions of the Code.
If beside the complaint filed by the Public Prosecutor under section 198B, there must also be a complaint by the person aggrieved, two courts would simultaneously be seized of two distinct complaints for the same offence.
The complaint by the Public Prosecutor under section 198B would undoubtedly lie, in the Court of Session and the complaint under section 198 would lie in the court of a Magistrate, because it is a Magistrate who alone can take cognisance of the offence of defamation under section 198.
Thereafter, the complaint under section 198 may have to be committed to the Court of Session by the Magistrate and it is only after the 71 compliant filed by the Public Prosecutor, the case may proceed.
The Legislature could not have intended that in respect of the same offence, there should be two complaints, one in the Court of Session and another in the court of a Magistrate and either both should be tried, or the proceedings should be consolidated after committal.
Reliance was placed on behalf of the appellants upon sub sections
(6) to 11 of section 198B which provide for the award of compensation to the person accused if the court is satisfied that the accusation is false and either frivolous or vexatious, and it was submitted that the Legislature could not have intended that a person who was not the complainant and who was not directly concerned with the proceedings may still be required if so ordered by the court to pay compensation.
But sub section
(5) which provides that a person against whom the offence is alleged to have been committed shall, unless the court for reasons to be recorded otherwise directs, be examined as a witness for the prosecution, clearly indicates that the question whether the complaint was false and either frivolous or vexatious may fall to be determined only if the person complaining to be defamed actively supports the complaint.
It cannot therefore be said that section 198B provides for compensation being awarded against a person who is not concerned with the complaint.
Section 198B is enacted to provide machinery for vindicating the conduct of high dignitaries, Ministers and public servants when they are exposed to defamatory attacks.
The section contemplates the institution of proceedings for defamation of two different classes of persons, (1) high dignitaries like the President, the Vice President, the Governors and Rajpramukhs and (2) Ministers and public servants.
it is not disputed that a provision which enables a prosecution to be launched by the State, and at State expense for defamation of members of the first class, having regard to their status in public life, is pre eminently designed in the public interest, and it would be entirely appropriate that any question of awarding compensation should be raised, even if the complaint for defamation 72 be found to be false and frivolous or vexatious.
There can be no doubt that in a democratic set up, in order to maintain purity of public behaviour and administration, charges of improper conduct against persons in the second class, in so far as such charges relate to the discharge of their public functions should be investigated.
It is also in the public interest that in vindicating his character or conduct, the person defamed should not ordinarily be called upon to bear the burden of what may turn out an expensive and long drawn out proceeding, nor for obvious reasons should he have control over the proceeding.
In the vindication of the character or conduct of a private individual who is defamed, the State is primarily not concerned: the party aggrieved may, if he is so minded, take proceedings for obtaining relief.
But in the investigation of defamatory charges against Ministers and public servants in the discharge of their public functions, the State is as vitally concerned as the individual defamed.
The Legislature has therefore authorised the State to take upon itself the power in appropriate cases to prosecute the offenders.
But lest this procedure be abused, provision has been made for the examination of the person defamed and for awarding against him compensation if it be found that the complaint was false and frivolous or vexatious.
Normally, a Minister or a public servant defamed in respect of his conduct in the discharge of his public functions would himself move the Government under which he functions for taking proceedings for vindicating his character or conduct.
The complaint eo nomine in cases under section 198B, is undoubtedly the Public Prosecutor, but the complaint may, when the person defamed is a Minister or a public servant, properly be regarded as filed at the instance of such Minister or public servant.
He has in any case to support the accusation by evidence, and his conduct is exposed to judicial scrutiny.
In this context, it would be difficult to hold that a person who has either been instrumental in the initiation of a complaint, or in any event has to support it by his evidence, has no concern with the lodging of the complaint.
The court 73 would obviously award compensation only if it is satisfied that the claim made by the person posing to be aggrieved is false and either frivolous or vexatious.
Section 198B does not provide that before taking cognisance of a complaint, the complaint shall be signed by any person other than the Public Prosecutor.
In terms, it contemplates a complaint in writing by the Public Prosecutor and of no one else and it would be an unwarranted addition to sub section
(1) of the words " and also by the person aggrieved " if the contention urged on behalf of the appellants were ac cepted.
The Legislature not having chosen to provide that the complaint of the Public Prosecutor shall also be signed by the person aggrieved, we will not be justified in the absence of compelling reasons to so hold.
The observation made by Mr. Justice Bavdekar in C. B. L. Bhatnagar vs The State (1) " What section 198B(13) . . means. is that any complaint which may be made under section 198B must also satisy the provisions of section 198, that is, the complaint will have to be made both by the person aggrieved, and by the Public Prosecutor ", and by Mr. Justice Raman Nayar in R. Sanker vs The State (2) that a complaint by a person aggrieved is not dispensed with even in regard to cases falling under section 198B, do not, in our judgment, correctly interpret sub.s.
(13) of section 198B.
In the view taken by us, this appeal must fail and is dismissed.
Appeal dismissed.
(1) A.I.R. 1958 Bom.
| The Public Prosecutor, Kanpur, filed a complaint in the Court of Session, Kanpur, charging the appellants with having published a news item which was false and defamatory of the Chief Minister of Uttar Pradesh.
The complaint complied with the requirements of section 198 B, Code of Criminal Procedure.
The appellants contended that the complaint should have complied with the requirements of section 198 of the Code also and, as it was 64 not signed by the Chief Minister, the Sessions judge had no jurisdiction to entertain it.
Held, that it was not necessary for the Chief Minister also to sign the complaint filed by the Public Prosecutor.
The nonobstante clause " notwithstanding anything contained in this Code " in sub section
(1) of section 198 B excludes the operation of the other provisions of the Code relating to initiation and trial of the offence of defamation, including section 198.
Sub section (13) of section 198 B which provides that the provisions of section 198 B shall be in addition to and not in derogation of section 198 merely preserves the right of the person defamed to file a complaint under section 198.
The two sections provide alternative remedies.
The provisions in section 198 B relating to the award of compensation to the accused in case of false and frivolous or vexatious accusation do not affect this conclusion.
Normally it is the public servant who moves the Government for taking proceedings and under subs.
(5) he is required to be examined as a witness to support the prosecution, and it cannot be said that he has no concern with the lodging of a complaint under section 198 B. C. B. L. Bhatnagar vs The State, A.I.R. 1958 Bom.
196 and R. Sankar vs The State, I.L.R. (1959) Kerala 195, disapproved.
|
Criminal Appeal No. 203 1976.
358 (Appeal by Special Leave from the Judgment and Order dated 4 2 1976 of the Patna High Court in Crl.
Peti tion No. 441/76.) A.B. Sinha and Pramod Swarup, for the appellant.
S.N. Jha and U.P. Singh, for the respondent.
The Judgment of the Court was delivered by BHAGWATI, J.
There is a club in Patna called Bankipore Club.
The appellant is the Honorary Secretary of that Club.
It appears that at about 10.25 p.m. on 31st December, 1975 when the New Year eve was being celebrated at the Club, a raid was carried out by the Assistant Commissioner of Ex cise, Inspector of Excise and SubInspector (Excise) and it was found that two women and five men were singing and dancing in the club premises.
The Excise Inspector filed a complaint against the appellant on 2nd January, 1976 charg ing him with having committed offences under Section 54(1)(a) and Section 57 (c) of the Bihar and Orissa Excise Act 1915.
The allegations on the basis of which the complaint was filed are material and we may set them out in extenso: "A Cabaret dance with women was in progress at Banki pore Club, Patna.
Two women and five men were singing and dancing.
This dance was being performed inside the premises of the Bankipore Club, Patna before a large gather ing of men and women.
I asked Dr. Sharda Prasad Singh, Honorary Secretary and his Manager Sri Banke Bihari Prasad Sinha to show the permission obtained from the District Magistrate or from any other authori ty for organising the Cabaret dance because licence vending 'Off ' foreign liquor is given to Bankipore Club in form 2.
The validity period of licence is from 1 4 75 to 31 3 1976 and under Section 25 (2), conducting of Cabaret dances without obtaining the prior permission from any proper authority is ille gal.
Dr. Sharda Prasad Singh who is Honorary Secretary of Patna Bankipore Club did not show any permission of the District Magis trate or of any other authority for conducting the Cabaret and he said that he had not ob tained any such permission.
Therefore, Dr. Sharda Prasad Singh, Honorary Secretary is guilty of the aforesaid.
offence.
It is therefore, prayed that Dr. Sharda Prasad Singh, Honorary Secretary be prosecuted in a Court of law for violating Section 54(a) and Section 57(c) of the Excise Act for which I have been authorised to submit charge sheet to him by the District Magistrate, Patna".
These allegations according to the appellant did not con stitute any offence and hence the appellant filed an appli cation in the High Court of Patna under Section 482 of the Code of Criminal Procedure for quashing the order passed by the Sub Divisional Magistrate, Patna taking cognizance of the offences charged against the appellant.
The 359 High Court by an order dated 4th February, 1976 summarily rejected the application.
The appellant thereupon preferred an application to the High Court for leave to appeal to this Court, but this application was also rejected by the High Court on the ground that the allegations set out in the complaint made out a prima facie case against the appellant.
This led to the filing of the present appeal with special leave obtained from this Court.
It is now settled law that where the allegations set out in the complaint or the charge sheet do not constitute any offence, it is competent to the High Court exercising its inherent jurisdiction under Section 482 of the Code of Criminal Procedure to quash the order passed by the Magis trate taking cognizance of the offence.
The question which, therefore, arises for consideration is whether the allega tions set out in the complaint constitute any offence against the appellant.
The offences charged against the appellant are under Section 54(1)(a) and Section 57 (c) of the Act.
Section 54(1) (a) provides that if any licensed vendor or any person in his employ and acting on his behalf, in contravention of Section 25, employs or permits to be employed, in any part of his licensed premises referred to in that section any person under the age of 18 years or any women, he shall be liable to fine which may extend to Rs.500/ .
It is an essential ingredient of this offence that the licensed vendor should employ or permit to be employed any women in any part of his licensed premises in contravention of Section 25.
Now there can be no doubt that the Bankipore Club was a licensed vendor since it held an "OFF" licence in Form No. 2 given in the Bihar and Orissa Excise Rules.
We will also assume for the purpose of argu ment that the place where the cabaret was going on was a part of the licensed premises.
But in order that the al leged cabaret should constitute an offence under Section 54(1) (a), it was necessary that the women who were perform ing the cabaret should be employed or permitted to be em ployed by the Club and moreover that should in contravention of Section 25.
Section 25.
sub section (2) provides that no person who is licensed to sell foreign liquor for con sumption on his premises shall, without the previous writ ten permission of the Board, during the hours in which such premises are kept open for business, employ or permit to be employed, either with or without any remuneration, any woman, in any part of such premises in which such liquor is consumed by th.e public.
It will be seen that this provi sion also comes into play only when a woman is employed or permitted to be employed by a person licensed to sell for eign liquor.
Moreover, the employment of the woman should be "in any part of such premises in which such liquor is consumed by the public.
" It is therefore, obvious that there could be no offence under Section 54(1)(a) read with Section 25(2) unless it could be shown by the prosecution that the women who were performing the cabaret were employed or permitted to be employed by the Club and they were performing the cabaret in a part of the club premises in which liquor was being consumed: by the public.
We may point out that it was contended on behalf of the appellant that subsection (2) of Section 25 can have no application in case of a person who is holding an "OFF" licence as distinct from an "ON AND OFF" licence in form No. 3 and since the appellant in the present case was 7 1546 SCI/76 360 holding an "OFF" licence, he could not be guilty of contra vention of Section 25, sub sect/on (2) and hence no question of offence under Section 54(1)(a) could arise.
But we will assume for the purpose of argument that the appellant was covered by Section 25, subsection (2) and he was bound to obey the prohibition contained in that sub section.
But even so we find that the two essential ingredients of the offence under Section 54(1)(a) read with Section 25 sub section (2) were not even alleged in the complaint.
The complaint did not aver that either of the two women who were performing the cabaret was employed or permitted to be employed by the club or that liquor was being consumed by the public in that part of the club in which the cabaret was being performed.
No offence under Section 54(1)(a) could in the circumstances be said to have been committed on the allegations contained in the complaint.
Equally, it is difficult to see how the allegations contained in the complaint could be said to constitute an offence under Section 57(c) That section provides that if any holder of a licence granted under the Act or any person in his employ or acting on his behalf wilfully does any act in breach of the condition of the licence for which a penalty is not prescribed elsewhere in the Act, he shall be liable to fine which may extend to Rs.500/ .
The com plaint does not allege as to which condition of the licence was broken by the club or the appellant in allowing a caba ret to be performed in the club premises.
Nor could the learned counsel appearing on behalf of the State point out any such condition of the licence.
The allegations con tained in the complaint manifestly did not constitute an offence under Section 57(c).
This was, therefore, clearly a case where the allega tions contained in the complaint did not constitute any offence and the Sub Divisional Magistrate was in error in taking cognizance of it.
The High Court in the circum stances ought not to have rejected the application of the appellant for quashing the order of the Sub Divisional Magistrate.
We accordingly allow the appeal, set aside the order of the High Court and quash the proceedings in Case No. 2(2) 76 Trial No. 285/76 pending in the Court in Mr. S.S.P. Yadav, Executive Magistrate, Sadar Patna.
S.R. Appeal allowed.
| Under section 115(7) of the , nothing contained in that section could, after the appointed day, i.e. November 1, 1956, affect the operation of the provisions of Chapter I of of the Constitution in relation to the determination of conditions of service of persons serving in connection with the affairs of the Union or any State.
The proviso provides that the condition of service applicable immediately before the appointed day to any person who is allotted to another State could not be varied to his disadvantage except with the previous approval of the Central Government.
The respondents, who were bus conductors in the State Road Transport Department of the former State of Hyderabad, were allotted to the State of Mysore consequent upon the reorganisation of the States in 1956 and they continued to hold the same posts under the Mysore Government Road Trans port Department.
They were dismissed from service by the Divisional Controller of Mysore Government Road Transport Department and the order of dismissal was affirmed by the General Manager of the Department.
The orders of dismiss al were challenged on the ground that since they were ap pointed by the Superintendent of the Traffic Department of the former State of Hyderabad, who was the Head of that Department they could be dismissed only by the General Manager of the Mysore State Road Transport Department and that their dismissal by the Divisional Controller, who was not the.
Head of the Department, was in violation of the right guaranteed under article 311 of the Constitution.
The High Court struck down the order of dismissal.
On appeal by the State it was contended that (1 ) since the post of Superintendent of Traffic Department did not exist in the State of Mysore and the Divisional Controller was the competent authority to appoint ' and dismiss servants of the category to which the respondents belonged, their dismissal was not incompetent in view of section 116(2) of the ; (2) There was substantial compliance with article 311 because the order of dismissal was confirmed by the General Manager; (3) Since the posts were not civil posts under the State, there was no violation of article 311; (4) The discretionary relief of declaration of continuance in service could not have been granted in this case; and (5) the respondents were dismissed before.
the establishment of the Corporation and since they did not exercise their option to join the Corporation, no decree could be passed against the Corporation.
Dismissing the appeals, HELD: The respondents could not have been dismissed from service by an authority lower or subordinate in rank to the General Manager of the Transport Department as it would tantamount to deprivation of the guarantee in,Art.
311 of the Constitution read with s 115(7) of the State Reorgani sation Act.
That there was no post of Superintendent of Traffic under the Mysore.
Government Road Transport Depart ment is of no consequence.
1 (a) The protection enjoyed by persons holding civil posts under the State like the respondents prior to the coming into force of the Act could not after the appointed day, be taken away, whittled down or impaired by any legislative enactment or rule.
The broad purpose underlying the section was to ensure that the conditions of service of persons mentioned therein shall not be changed except with the prior approval of the Central Govt.
[288 E;B] (b) The expression 'condition of service ' is an expres sion of wide import and the dismissal from service is a matter which falls within the conditions of service of public servants.
It is not possible by means of any legis lative provision.
or rule to take away the guarantee provid ed by article 311(1) and if any legislative provision or rule lays down otherwise, it will be ultra vires.
[288 D] M.D. Shukla & Ors.
vs State of Gujarat & Ors.
; ; N. Raghavendra Rao vs Deputy Commissioner, South Kanara, Mangalore ; ; North West Frontier Province vs Suraj Narain Anand 75 I.A. 343; AIR 1949 P.C. 112; Pradyat Kumar Bose vs The Hon 'ble the Chief Justice of Calcutta High Court ; ; State of Madhya Pradesh & Ors.
v Shardul Singh ; and Ranga chari vs Secretary of State 64 I.A. 40: AIR 1937 P.C. 27, followed.
(c) The expression 'competent authority ' in section 116(2) of the Act must be read in conjunction with, construed and understood as having the same meaning as the expression 'appropriate authority ' contemplated by section 116(1) and article 311(1) which means the appointing authority or an authority equivalent to or co ordinate in rank with the appointing authority, [289B] (d) The power to dismiss a Government servant from service can be conferred on an officer other than the 'a ppointing authority provided he is not subordinate in rank to the appointing officer or authority.
[291 B] The State of U.P. & Ors.
vs Ram Naresh Lal [1970] 3 S.C.R. 173, applied.
N. Somasundaram vs State of Madras A.I.R. 1956 Mad. 419; Sobhagmal vs State A.I.R , Gurmukh Singh vs Union of India A.I.R. 1963 Punjab 370; Mahadeo Prasad Rao vs
S.N. Chatterjee & Ors.
A.I.R. 1954 Patna 285 and State of Jammu & Kashmir and Anr.
vs Raj Mohammad & Ors.
approved.
In the instant case by virtue of section 116(1) the respondents were deemed to have been appointed from November 1, 1956 in the State of Mysore by the appropriate authori ty which could not be the authority other than the one equivalent to or coordinate in rank with the authority which appointed them in the erstwhile State of Hyderabad.
The General Manager of the Mysore Department could alone be considered to be the competent authority in terms of section 116(2).
[291 D] (2) The original order of dismissal being without jurisdic tion and as such void and inoperative, the order passed on appeal by the General Manager could not cure the initial defect.
[292 A] (3) Both at the time of coming into force of the and at the time of the passing of the impugned orders, the respondents were holding civil posts in connection with the affairs of the State and they could not but be treated as holding civil, posts under the State.
[292 D] 4 (a) The declaration to enforce a contract of personal service 'can be granted (i) where a government servant is dismissed from service in contravention of the article 311; (ii) to dismissed workers under the industrial and labour law, and (iii) where a statutory body has acted in breach of a mandatory obligation imposed by a statute.
[292 G] Executive Committee of U.P. State Warehousing Corporation Limited vs Chandra Kiran Tyagi ; and Executive Committee of Vaish Degree College, ShamIi & Ors.
vs Lakshmi Narain & Ors. ; followed.
284 (b) It is only where the discretion is not exercised by the lower court in the spirit of the statute or fairly or hon estly or according to the rules of reason and justice that the order passed by the lower court can be reversed by the superior court.
[293 A] Charles Osenton & Company vs Johnston , referred to.
In the instant case, it cannot be said that the discre tion has been wrongly exercised in favour of the respond ents.
[294 C] (5) In view of the appellants ' application before the High Court, which was duly endorsed by the Government, that since the State had constituted the Road Transport Corpo ration and transferred the rights and liabilities to it, the decree, if any, could be passed exclusively against it, the Corporation cannot contend that no decree should have been passed against it.
[294 D]
|
N: Criminal Appeal No. 163 of 1979.
Appeal by Special Leave from the Judgment and Order dated 23 8 1978 of the Allahabad High Court in Criminal Appeal No. 1264/78 and Murder Reference No. 9/78.
R. C. Kohli for the Appellant.
O. P. Rana and K. K. Bhatta for the Respondent.
Yogeshwar Prasad and Mrs. Rani Chhabra for the Complainant.
773 The Judgment of the Court was delivered by CHANDRACHUD, C.J.
A college going boy called Vijay Bhan Kishore was shot dead on the morning of November 2, 1976 near the Hathi Park, Dayanand Marg, Allahabad.
The appellant was convicted for that offence under section 302 of the Penal Code by the learned Third Additional Sessions Judge, Allahabad and was sentenced to death.
The order of conviction and sentence having been confirmed by the High Court of Allahabad by its judgment dated August 23, 1979, the appellant has filed this appeal by Special Leave.
Vijay Bhan Kishore alias Pappoo was the son of an Advocate called Brij Bhan Kishore who died in about 1967 leaving behind a widow, three daughters and Pappoo.
The youngest of the three daughters was married while the two elder were working as school teachers.
Out of those two, Ranjana Kishore was a teacher in the St. Anthony 's Convent.
The appellant, Dudh Nath Pandey, who was a motor car driver by occupation, used to live as a tenant in an out house of a sprawling bungalow belonging to the family of the deceased, situated at 17, Stanley Road, Allahabad.
The appellant developed a fancy for Ranjana who was about 20 years of age when he came to live in the out house.
The overtures made by the appellant to Ranjana created resentment in her family and its only surviving male member, her brother Pappoo, took upon himself the task of preventing the appellant from pursuing his sister.
As a first step, the appellant was turned out of the out house.
Soon thereafter, he filed an application before the City Magistrate, Allahabad, asking for the custody of Ranjana, alleging that she was his lawfully wedded wife.
That application was dismissed by the learned Magistrate after recording the statement of Ranjana, in which she denied that she was married to the appellant.
The appellant thereafter filed a habeas corpus petition in the Allahabad High Court alleging that Ranjana was detained unlawfully by the members of her family, including her uncle K. P. Saxena, and asking that she be released from their custody.
Ranjana denied in that proceedings too that she was married to the appellant or that she was unlawfully detained by the members of her family.
The habeas corpus petition was dismissed by the High Court on November 8, 1973.
On August 1, 1975, the Principal of St. Anthony 's Convent made a complaint to the police that the appellant had made indecent overtures to Ranjana.
The appellant was arrested as a result of that complaint.
774 On November 1, 1976, Ranjana was having an evening stroll with her brother, the deceased Pappoo, in the compound of their house.
The appellant came there in a rickshaw, abused Pappoo and is alleged to have threatened to kill him, if he dared oppose his, the appellant 's marriage with Ranjana.
As a result of these various incidents and the family 's growing concern for Ranjana 's safety, Pappoo used to escort Ranjana every morning to the school where she was teaching.
On the following day, i.e. on November 2, 1976, Pappoo took Ranjana to her school on his scooter as usual.
The classes used to begin at 9 30 A.M. but Ranjana used to go to the school 30 to 40 minutes before time for correcting the students ' home work.
After dropping Ranjana at the school, Pappoo started back for home on his scooter.
While he was passing by the Children 's Park, known as the Hathi Park, the appellant is alleged to have fired at him with a country made pistol.
Pappoo fell down from his scooter and died almost instantaneously.
The occurrence is said to have been witnessed by Harish Chandra (P. W. 3), a domestic servant of the family of the deceased and by Harish Chandra 's friend Ashok Kumar (P. W. 1).
Harish Chandra used to live in the out house of the deceased 's bungalow at 17, Stanley Road, while Ashok Kumar, who generally lived at Kanpur, is said to have come to Allahabad the previous day in search of employment.
Almost immediately after Pappoo and Ranjana left the house on the scooter, Ashok Kumar and Harish Chandra too left the house as the former wanted to see the Hathi Park.
They were near about the gate of the park, which is a few steps away from the scene of occurrence, when the deceased Pappoo was passing along on his scooter, after dropping Ranjana at the St. Anthony 's Convent.
Ashok Kumar and Harish Chandra are alleged to have seen the appellant, who was standing near the northern boundary of the park, firing a shot at Pappoo.
The appellant re loaded his pistol and is said to have run away to wards the south east.
Ashok Kumar and Harish Chandra rushed to St. Anthony 's Convent in a rickshaw and informed Ranjana Kishore about the murder of her brother.
Ranjana went to the scene of incident along with them and on finding that her brother was dead, she went straight to the Cannington police station which is about 2 kms.
She wrote out the report (exhibit Ka 1) in her own hand and submitted it to the officer in charge of the police station at 9 45 A.M.
In the meantime, information of the murder had reached the police station of Colonelganj, within the 'jurisdiction ' of which the murder had taken place.
775 The police deserve a word of appreciation because they did not, as usual, enter into a squabble as to in whose 'jurisdiction ' the offence had taken place.
H. R. L. Srivastava, the sub inspector attached to Colonelganj police station, went within minutes to the scene of offence and, believing that Pappoo was alive, sent him in a jeep to the Tej Bahadur Sapru hospital.
A little later, P. section I. Chandrapal Singh of the Cannington police station arrived on the scene and started the investigation.
He took charge of an empty cartridge shell and the bloodstained earth and later, he sent the dead body of Pappoo for postmortem examination.
P. section I. Srivastava arrested the appellant at about 2 30 P.M. while he was standing near a pan shop in front of the Indian Telephone Industries, Naini, where he used to work.
The appellant was taken to the scene of offence where he made a certain statement and took out a loaded pistol from a heap of rubbish lying on the Kamla Nehru Road, being the direction in which he had run away after killing Pappoo.
The Ballistic expert, Budul Rai, opined that the empty cartridge shell, which was lying at the scene of offence, was fired from that particular pistol.
Dr. G. section Saxena, who conducted the postmortem examination found a single gun shot injury on the left side of the chest of the deceased, below the armpit.
The injury had caused seven pellet wounds, each measuring 1/3 inch in diameter.
Seven pellets were recovered from the body.
The injury, according to Dr. Saxena, was sufficient in the ordinary course of nature to cause death.
The appellant stated in his defence that he used to live in the house of the deceased as the guest of the family and not as a tenant and that Ranjana got intimate with him during that period.
He left the house because she told him that there was danger to his life.
The murder of Pappoo, according to the appellant, was engineered by Dr. K. P. Saxena, the maternal uncle of the deceased.
The appellant denied his hand in the murder, saying that he had no reason to do so since the deceased 's mother and the other members of the family desired that he should marry Ranjana.
The appellant examined five witnesses to prove his alibi, his contention being that he was on duty at the Indian Telephone Industries, right from 8 30 A.M. on the date of the incident and that he was arrested from inside the factory at about 2 30 P.M. while on duty.
776 The learned Additional Sessions Judge, Allahabad, examined the Deputy Superintendent of Police, R. P. Bhanu, and the General Manager of the Indian Telephone Industries as Court witnesses.
The prosecution examined 13 witnesses in support of its case that the appellant had committed the murder of Pappoo.
Ashok Kumar (P.W. 1) and Harish Chandra (P.W. 3) were examined as eyewitnesses to the incident.
Ranjana Kishore (P.W. 2) was examined to prove the motive for the murder as also for showing that the deceased Pappoo had taken her to the school on his scooter and that, soon thereafter, she was informed by the two eye witnesses of the murder.
Ram Kishore (P.W. 4) was examined to prove the arrest of the appellant and the recovery of the loaded pistol.
P. section I. Srivastava (P.W. 9) and P.S.I. Chandrapal Singh (P.W. 10) deposed about the various steps taken during the course of investigation.
Dr. G. section Saxena (P.W. 11) was examined in order to show the nature of the injuries suffered by the deceased while Budul Rai (P.W. 12) stated that the empty cartridge shell which was lying at the scene of offence was fired from the particular pistol which is stated to have been recovered at the instance of the appellant.
The other prosecution witnesses are mostly of a formal nature.
Were this a case of circumstantial evidence, different considerations would have prevailed because the balance of evidence after excluding the testimony of the two eye witnesses is not of the standard required in cases dependent wholly on circumstantial evidence.
Evidence of recovery of the pistol at the instance of the appellant cannot by itself prove that he who pointed out the weapon weilded it in offence.
The statement accompanying the discovery is woefully vague to identify the authorship of concealment, with the result that the pointing out of the weapon may at best prove the appellant 's knowledge as to where the weapon was kept.
The evidence of the Ballistic expert carries the proof of the charge a significant step ahead, but not near enough, because at the highest, it shows that the shot which killed Pappoo was fired from the pistol which was pointed out by the appellant.
The evidence surrounding the discovery of the pistol may not be discarded as wholly untrue but it leaves a few significant questions unanswered and creates a sense of uneasiness in the mind of a Criminal Court, the Court of conscience that it has to be: How could the appellant have an opportunity to conceal the pistol in broad day light on a public thoroughfare ? If he re loaded the pistol as a measure of self protection, as suggested by the prosecution, why did he get rid of it so quickly by throwing it near the Hathi Park itself ? And how come that the police hit upon none better that Ram Kishore (P.W. 4) to witness the discovery of the pistol ? Ram Kishore had already 777 deposed in seven different cases in favour of the prosecution and was evidently at the beck and call of the police.
But the real hurdle in the way of the appellant is the evidence of the eye witnesses: Ashok Kumar (P.W. 1) and Harish Chandra (P.W. 3).
Shri R. C. Kohli who appears for the appellant made a valiant attempt to demolish their evidence but in spite of the counsel 's able argument, we find it difficult to hold that the eye witnesses have perjured themselves by claiming to be present at the time and place of the occurrence.
It is true that Harish Chandra, who was working as a domestic servant with the deceased 's family, should normally have been doing his daily morning chores.
Few masters would permit a household servant to go away on a sight seeing spree right in the morning.
But there are at least two plausible reasons which lend assurance to the claim that Harish Chandra left the house almost immediately after the deceased Pappoo drove away with his sister Ranjana.
Ashok Kumar had come to Allahabad the previous evening and he wanted to go to the Hathi Park where, though it is called a children 's park, adults too find their merriment.
There is nothing fundamentally improbable in Ashok Kumar coming to Allahabad in search of employment and equally, nothing inherently strange in the two friends going out on a frolic.
And though a small consideration, it is relevant that the normal morning routine of Harish Chandra was to help in the kitchen but the 2nd November, 1976 was an Ekadashi day and therefore, there was not much to do for him.
The second reason is more weighty and almost clinches the issue.
The evidence of Ranjana (P.W. 2) shows beyond the manner of doubt that Harish Chandra and Ashok Kumar broke to her the news of her brother 's murder, while she was in the school.
The events after the murder happened in such quick succession that there was no time for any one to contrive and confabulate.
Within ten minutes of the occurrence, Ranjana was informed of the incident by the two eyewitnesses and within a few moments thereafter she went to the scene of the tragedy.
Her F.I.R. (exhibit Ka 1) was recorded at the police station at 9 45 a.m. A fact of preponderating importance is that the story which Ranjana disclosed in the F.I.R. is precisely the same as the witnesses, including herself, narrated in the Court.
The F.I.R. is a brief document of a page and half.
But it is remarkable that it mentions (1) that the appellant wanted to marry Ranjana and was harassing her towards that end; (2) that there was a quarrel between the appellant and Pappoo the previous evening, in which the former gave a threat of life to the latter (3) that Ranjana left for the school on the day of occurrence at 8 45 A.M.; and (4) that soon thereafter Harish 778 Chandra and Ashok Kumar met her at the school and conveyed to her that they had gone to see the Hathi Park when, while Pappoo was passing along the road, the Appellant fired a shot at him.
We consider it beyond the normal range of human propensities that Ranjana could have built up the whole story within three quarters of an hour which intervened between the time that she learnt of her brother 's murder and the lodging by her of the F.I.R. She could not have taken the risk of creating a false witness by placing Ashok Kumar, who normally, resided in Kanpur, alongside Harish Chandra.
With the death of her brother, her own house was left without a male member.
At home was an ailing mother and two other sisters, more or less of her own age.
There was no one to advise her upon the hatching of a conspiracy to involve the appellant and she could not have been in a proper frame of mind to do anything of the kind on her own.
Her inexperience of life, the promptness with which she gave the F.I.R. and the wealth of details she mentioned therein afford an assurance that the story of the eye witnesses is true in so far as it goes.
Shri Kohli 's submission that Ranjana 's F.I.R. is anti timed and must have been recorded late in the evening leaves us cold.
Shri Kohli has pointed a defect here and an improbability there in the evidence of the eye witnesses but it has to be borne in mind that the Trial Court and the High Court have concurrently believed that evidence.
We do not suggest that the mere circumstances that two or more courts have taken the same view of facts shuts out all further inquiry into the correctness of that view.
For example, concurrence is not an insurance against the charge of perversity though a strong case has to be made out in order to support the charge that findings of fact recorded by more than one court are perverse, that is to say, they are such that no reasonable tribunal could have recorded them.
The merit of the normal rule that concurrent findings ought not to be reviewed by this Court consists in the assumption that it is not likely that two or more tribunals would come to the same conclusion unless it is a just and fair conclusion to come to.
In the instant case, the view of the evidence taken by the Sessions Court and the High Court is, at least, a reasonable view to take and that is why we are not disposed, so to say, to re open the whole case on evidence.
We have indicated briefly why we consider that the eye witness account accords with the broad probabilities of the case.
Counsel for the appellant pressed hard upon us that the defence evidence establishes the alibi of the appellant.
We think not.
The evidence led by the appellant to show that, at the relevant time, he was on duty at his usual place of work at Naini has a certain amount 779 of plausibility but that is about all.
The High Court and the Sessions Court have pointed out many a reason why that evidence cannot be accepted as true.
The appellant 's colleagues at the Indian Telephone Industries made a brave bid to save his life by giving evidence suggesting that he was at his desk at or about the time when the murder took place and further, that he was arrested from within the factory.
We do not want to attribute motives to them merely because they were examined by the defence.
Defence witnesses are entitled to equal treatment with those of the prosecution.
And, Courts ought to overcome their traditional, instinctive disbelief in defence witnesses.
Quite often, they tell lies but so do the prosecution witnesses.
Granting that D. Ws. 1 to 5 are right, their evidence, particularly in the light of the evidence of the two Court witnesses, is insufficient to prove that the appellant could not have been present near the Hathi Park at about 9 00 A.M. when the murder of Pappoo was committed.
The plea of alibi postulates the physical impossibility of the presence of the accused at the scene of offence by reason of his presence at another place.
The plea can therefore succeed only if it is shown that the accused was so far away at the relevant time that he could not be present at the place where the crime was committed.
The evidence of the defence witnesses, accepting it at its face value, is consistent with the appellant 's presence at the Naini factory at 8 30 A.M. and at the scene of offence at 9.00 A.M.
So short is the distance between the two points.
The workers punch their cards when they enter the factory but when they leave the factory, they do not have to punch the time of their exit.
The appellant, in all probability, went to the factory at the appointed hour, left it immediately and went in search of his prey.
He knew when, precisely, Pappoo would return after dropping Ranjana at the school.
The appellant appears to have attempted to go back to his work but that involved the risk of the time of his re entry being punched again.
That is how he was arrested at about 2 30 P.M. while he was loitering near the pan shop in front of the factory.
There is no truth in the claim that he was arrested from inside the factory.
That settles the issue of guilt.
We agree with the view of the High Court and the Sessions Court and uphold the appellant 's conviction under section 302 of the Penal Code.
The question of sentence has gravely agitated our minds.
A young college going boy was murdered because he was trying to wean away his sister from the influence of the appellant who had set his heart upon her.
But there are two reasons why we are not disposed to confirm the death sentence.
In the first place, the appellant was smarting 780 under the insult hurled at him by the deceased Pappoo, the previous evening.
As stated by Ranjana in the F.I.R., when the appellant proclaimed his determination to marry her, Pappoo retorted: "You are a man of two Paisa 's worth.
How can you dare to marry my sister ? I will break your hands and feet.
" A poor motor car driver that the appellant was, he must have been offended enormously that his poverty was being put up as the reason why Ranjana would not be allowed to marry him.
The dispute thus assumed the proportions of a feud over social status, the poor man fretting that the rich man 's daughter would not be allowed to marry him for the mere reason that he did not belong to an equal class of society.
And it is evident that he believed, rightly or wrongly, that Ranjana was not unwilling to take him as a husband.
It is in the immediate background of the previous evening 's incident that the question of sentence has perforce to be considered.
That incident cannot certainly be considered as affording "sudden" provocation to the appellant for the crime committed by him the next morning and, therefore, it cannot reduce the offence of murder into a lesser offence.
But, the mental turmoil and the sense of being socially wronged through which the appellant was passing cannot be overlooked while deciding which is the appropriate sentence to pass, the rule being that for the offence of murder, the normal sentence is the sentence of life imprisonment and not of death.
Secondly, Harish Chandra and Ashok Kumar do not appear to have revealed the whole truth to the Court.
If the appellant had fired a shot at Pappoo while the latter was driving along on his scooter, and if Pappoo, as is alleged, dropped dead, his scooter would have dragged him ahead and in that process he would have received some injury.
The scooter too would have been damaged, howsoever slightly.
But it is strange that apart from the gun shot wound, Pappoo had no other injury on his person except an abrasion on the left side of the chest which was evidently caused by the gun shot itself.
The scooter was not dragged at all, except for the mark of pellets.
And, most importantly, the scooter was not lying on the road but was "standing".
Pappoo seems to have stopped on seeing the appellant and quite clearly, there was an exchange of hot words between them which culminated in Pappoo 's murder.
The death of the brave, young lad which has deprived the family of the succour of its only male member is to be deeply lamented.
But, if witnesses on whose evidence the life of an accused hangs in the balance, do not choose to reveal the whole truth, the Court, while dealing with the question of sentence, has to step in interstitially and take into account all reasonable possibilities, having regard to the normal and natural course of human affairs.
781 Since a part of the crucial event has been screened from the Court 's scrutiny and the possibility of an altercation between the appellant and the deceased cannot reasonably be excluded, we consider it unsafe to sentence the appellant to the extreme penalty.
In the result, we confirm the conviction of the appellant under section 302 of the Penal Code but set aside the sentence of death imposed upon him.
We sentence the appellant to imprisonment for life.
The appeal is, accordingly, allowed partly.
P.B.R. Appeal allowed partly.
| The prosecution alleged that when the appellant, a motor car driver who was living as a tenant in the out house of the bungalow belonging to the family of the deceased, developed a fancy for the sister of the deceased.
His overtures created resentment in the family and the deceased took upon himself the task of preventing the appellant from pursuing his sister.
The appellant 's effort to take custody of the deceased 's sister through legal proceedings had failed; sometime later on a complaint to the police that the appellant had been making indecent overtures towards her he was arrested.
A day before the day of the occurrence the appellant was alleged to have threatened to kill the deceased if he opposed his (appellant 's) marriage with his sister.
It was further alleged that while the deceased was returning home on his scooter after leaving his sister in the school where she was working as a teacher, the appellant fired a shot at him with a pistol at which the deceased fell dead instantaneously.
He was convicted under section 302 I.P.C. and sentenced to death.
The order of conviction and sentence was confirmed by the High Court.
On the question of sentence ^ HELD: 1.
The Sessions Court and the High Court were right in convicting the appellant under section 302 I.P.C. [779 G] (a) The mere circumstance that two or more courts have taken the same view of facts does not shut out all further inquiry into the correctness of that view.
Concurrence is not an insurance against the charge of perversity though a strong case has to be made out in order to support the charge that findings of fact recorded by more than one court are perverse.
The merit of the normal rule that concurrent findings ought not to be reviewed by this Court consists in the assumption that it is not likely that two or more tribunals would come to the same conclusion unless it is a just and fair conclusion to come to.
[718 E G] 2.
While dealing with the question of sentence for the offence of murder, the normal sentence is the sentence of life imprisonment and not of death.
If in a same conclusion unless it is a just and fair conclusion to come to.
[778 E G] 772 balances do not choose to reveal the whole truth the Court while dealing with the question of sentence has to step in interstitially and take into account all reasonable possibilities having regard to the normal and natural course of human affairs.
In the instant case it would be unsafe, on the evidence on record, to sentence the appellant to the extreme penalty of death.
[780 H] The appellant, a poor motor car driver, must have been offended enormously when the deceased abused him that he was a man of two paise worth and that if he attempted to marry his sister he would break his hands and feet and that his poverty was being put up as the reason why his sister would not be allowed to marry him.
The dispute thus assumed proportions of a fued over social status.
The poor man was fretting that the rich man 's daughter would not be allowed to marry him for the mere reason that he did not belong to an equal class of society.
The appellant, rightly or wrongly, believed that the girl was not unwilling to marry him.
The incident of the previous evening could not be considered as affording "sudden" provocation to the appellant for the crime committed by him on the following morning.
It cannot reduce the offence of murder into a lesser offence, but the mental turmoil and the sense of being socially wronged through which the appellant was passing could not be overlooked while deciding the appropriate sentence.
[780 B D] Secondly the fact that, apart from the gun shot wound, the deceased had no other injury on his person except an abrasion on the left side of the chest evidently caused by the gun shot itself coupled with the fact that the scooter was found "standing" on the road showed that the deceased stopped on seeing the appellant and that there was an exchange of hot words between them culminating in the murder.
But since in the present case a part of the crucial evidence had been screened from the Court 's scrutiny the possibility of an altercation between the appellant and the deceased cannot reasonably be excluded.
[780 F H] (3) The evidence of the defence witnesses has failed to establish the alibi of the appellants.
The plea of alibi postulates the physical impossibility of the presence of the accused at the scene of offence by reason of his presence at another place.
The plea therefore succeeds only if it is shown that the accused was so far away at the relevant time that he could not be present at the place where the crime was committed.
But in the present case the evidence of the defence witnesses, accepting it at its face value, is consistent with the appellant 's presence at the factory at the appointed hour and half an hour later at the scene of offence.
So short is the distance between the two points.
[778 H; 779 D]
|
ivil Appeal Nos.
2635 38 of 1985.
From the Judgment and Order dated 30.10.1984 of the Andhra Pradesh High Court in R.P. Nos.
1998, 2065, 2085 of 1980 and 624 of 1982.
S.N. Kacker, A. Subba Rao, B. Sudharshan Reddy, Ramesh M. Keshwani and K. Ram Kumar for the Appellants.
Chella Seetharamiah, M.K. Ramamurthy, Ms. C.K. Sucharita, K. Rajendra Choudhary and K. Shivraj Chowdhary for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
The appeals are by special leave and are directed against the judgment of the Andhra Pradesh Administrative Tribunal in a group of representation petitions while the writ petitions are under Article 32 of the Constitution, Writ Petition 72 of 1121 1987 being by promotee Deputy Tehsildars and Writ Petition 241 of 1987 being by another group of Deputy Tehsildars promoted by transfer.
The background of the litigations may now be indicated.
A set of rules regarding recruitment of Deputy Tehsildars was in force in the erstwhile State of Madras which continued to apply to Andhra Pradesh until in 1961 the Andhra Pradesh Revenue Subordinate Service Rules (hereinafter referred to as the 'Special Rules ') were brought into force.
The cadre under the Special Rules consisted of Deputy Tehsildars only.
Rule 3 provided: "3.
Appointment: (a) Appointment to the category of Deputy Tehsildars in this service shall be made: i) by direct recruitment, or ii) by transfer from members of the Andhra Pradesh Ministerial Service employed in the Revenue Department including the Office of the Commissioner of Land Revenue, Revenue Settlement parties and the office of the Director of Settlements Survey and Land Records.
(b) Substantive vacancies in the category of Deputy Tehsildars shall be filled or reserved to be filled by direct recruitment and recruitment by transfer in the porportion of 1:1".
Some directly recruited Deputy Tehsildars during the years 1962 and 1963 moved the Andhra Pradesh High Court in Writ Petition No. 1502 of 1971 disputing the seniority over them assigned to a group of promotees.
They alleged that though they had completed their probation long prior to the Upper Division Clerks who were appointed by transfer as Deputy Tehsildars and had become full members of the service upon confirmation in their posts while none of the Upper Division Clerks appointed by transfer had become full members, yet the directly recruited Deputy Tehsildars had been treated as junior and their claim to promotion as Tehsildars was being overlooked.
A learned Single Judge of the High Court dismissed the writ petition by holding that there was no foundation for the grievance of the directly recruited Deputy Tehsildars and that they had no cause of action within the frame of the rules.
The decision of the learned Single Judge was upheld in appeal by a Division Bench.
Support for that position 1122 was derived from Rule 33(a) of the Andhra Pradesh State and Subordinate Services Rules, 1962 (hereinafter referred to as the 'General Rules ').
A special leave petition was filed before this Court against the appellate decision of the High Court.
On 9th October, 1980, the State Government amended Rule 4(e) of the Special Rules with retrospective effect from 12th of October, 1961 in the manner indicated below: "In sub rule (e) of Rule 4 of the said Rules, for the words 'The seniority of the Deputy Tehsildar shall be determined with reference to the date of allotment maintained and the ranking assigned to him by the Andhra Pradesh Public Service Commission in the merit list of that selection ', the following shall be substituted, namely, 'the inter se seniority between the direct recruits to the category of Deputy Tehsildars and the promotees to the category of Deputy Tehsildars shall be determined from the date of their confirmation in the substantive vacancy in that category in the proportion of 1:1 as provided in sub rule (b) of Rule 3.
" A group of promotees who are appellants in the civil appeals went before the Andhra Pradesh Administrative Tribunal questioning the validity of the aforesaid amendment with particular emphasis on its retrospective application.
The Tribunal referred the matter to a three Judge Bench thereof.
Before the Tribunal, it was canvassed on behalf of the appellants that the prevailing rule regarding seniority was in Rule 33 of the General Rules and in the absence of any provision in the special Rules, the principle in Rule 33 was applicable for determining inter se seniority in the cadre of Deputy Tehsildars.
The claim of the direct recruits had been negatived by the High Court and the dispute was pending decision of this Court.
There was no scope for the State Government to amend the Rules in 1980 to the prejudice of the promotees.
Even if Government wanted to change their policy regarding determination of inter se seniority, it should have been made applicable prospectively and that the seniority already determined on the basis of Rule 33 of the General Rules should not have been disturbed.
The determination of seniority on the basis of the date of confirmation worked out prejudice for the promotees.
The Tribunal examined the matter at length and came to the following conclusion: "As a quota rule has been provided in the Special 1123 Rules relating to the recruitment of Deputy Tehsildars from two sources, after recruitment there is an imperative need to integrate the aforesaid two sources.
After integration necessity arises for fixing inter se seniority of persons who have come from the two different sources for facilitating promotions to the next higher posts.
There being no rule of relative seniority between direct recruits and rank promotees, and the General Rule 33(a) being incapable to bring integration, Government have rightly felt to enact a rule for integration of the two sources in one cadre and fixation of inter se seniority among members drawn from the said two sources.
Confirmation adopted as the formula for determination of inter se seniority is constitutionally valid.
There is no question of any discrimination in laying down a rule of seniority based on the principle of confirmation.
The promotee Deputy Tehsildars not having been recruited against the substantive vacancies have not acquired any vested interest so as to be protected against the impugned rule of seniority.
Their inter se seniority in the class of temporary Duputy Tehsildars against the nonsubstantive posts, evidently, determined under General Rule 33(a) remains unaffected by the impugned seniority rule.
Thus, the said rule does not offend Articles 14 and 16 of the Constitution.
It is free from any vice what so ever and cannot therefore be assailed.
The General Rule 33(a) is incapable of determination of inter se seniority between direct recruits and promotee Deputy Tehsildars despite the fact that the promotees belonging to the latter class are approved probationers and their recruitments are regular to the category of Deputy Tehsildars.
Since their posts are outside the permanent cadre, they cannot bring their seniority in the category of Deputy Tehsildars into the permanent cadre and press it against the direct recruits who are members of the permanent cadre from the beginning.
The seniority between them (after judgment) and the direct recruits shall be determined on the basis of the impugned rule of seniority, which, according to us is a valid enactment.
The Government shall now proceed to determine the seniority accordingly.
" These directions of the Tribunal are assailed in appeal before this Court.
1124 Writ Petition No. 72 of 1987 is by 17 promotees during the period 1966 to 1971 while Writ Petition No. 241 of 1987 is by 21 Deputy Tehsildars promoted by transfer from the posts of Upper Division Clerks also during the same period.
The cadre does not have a prescribed strength and temporary appointments seem to have become the rule as the history of the service shows.
Even though the ratio of 1:1 is prescribed in regard to the substantive vacancies, direct recruitments were made only in the years 1963, 1964, 1965 and 1966 and for a decade to follow there was no direct recruitment.
When demand for more hands in the category of Deputy Tehsildars became pressing supernumerary posts were created from time to time and such posts were filled up by promotion.
Rule 33(a) of the General Rules dealing with seniority, as far as relevant, provides: "The seniority of a person in service, class, category or grade shall, unless he has been reduced to a lower rank as a punishment, be determined by the date of his first appointment to such service, class, category or grade . . . " Relying upon this provision, seniority was being determined of promotees without taking into account the fact that there had been intervening reversions to the lower posts from which promotion to the post of deputy Tehsildar had been granted.
The legal position is well settled that the State is entitled to prescribe the manner of computing inter se seniority and in the absence of such prescription length of service is the basis.
A series of recent decision of this Court has made that position certain.
Rule 33 of the General Rules contains prescription regarding seniority and has different provisions to meet varying situations.
Sub rule (a) which provides that seniority of a person is to be determined "by the date of his first appointment to such service" has obviously been mis interpreted on account of the presence of the words 'unless he has been reduced to a lower rank as a punishment '.
It could not be the intention of Rule 33(a) to compute seniority from the date of first appointment even though it was not a continuous one.
For instance, a person is appointed to the post of Deputy Tehsildar on promotion on 1st of January, 1970 and is reverted to the lower post, not by way of punishment but on account of exigencies of service or otherwise, on 31st of March, 1970.
He is again promoted to that post on 1st January, 1980 and continues 1125 to hold that promotional post.
Another person is promoted to the post of Deputy Tehsildar on 1st April, 1970 and continues to hold that post without break.
If the interpretation adopted by the State Government of Rule 33(a) is accepted, it would mean that the first person on account of having been first appointed on an earlier date to the promotional post would rank senior to the second person.
This obviously could not have been the intention of the rule.
It is appropriate to interpret that rule to mean that the date of first appointment is intended to refer to continuous appointment only and the words 'unless he has been reduced to a lower rank by way of punishment ' are really redundant.
We are aware of the fact that this rule has been widely applied for determining inter se seniority and in case challenge to fixation of inter se seniority is permitted to be raised on what we have stated above, limitless litigation would crop up.
We would, therefore, make it clear that the interpretation which we now give of this rule shall have prospective application and unless there be any litigation already pending challenging the interpretation of this rule no new litigation would be permitted on that score.
We have already pointed out that the law is that it is open to the State to provide a rule for determining inter se seniority.
Rule 4(e) of the Special Rules before amendment in 1980 had provided that the seniority of Deputy Tehsildars would be determined with reference to the date of allotment maintained and ranking assigned by the Andhra Pradesh Public Service Commmission in the merit list of the particular selection.
That obviously was confined to inter se seniority of direct recruits and did not cover inter se seniority between recruits of the two sources.
Therefore, the General Rules had been relied upon.
In 1980, by the impugned amendment to Rule 4(e) of the Special Rules, the State Government prescribed the manner of providing inter se seniority among the recruits of the two categories.
The amended rule provided the date of confirmation in the substantive vacancy as the basis.
Rule 3(b) fixed the reservation of direct recruits with reference to substantive vacancies at 50% and Rule 4(e), therefore, made provision with reference to the seniority in the substantive vacancies with reference to the date of confirmation.
The amendment in terms is within the competency of the State Government and is not open to challenge.
This is a rule made under the proviso to Article 309 of the Constitution and as settled by this Court in exercise of that power the rule can be given retrospective operation.
The impugned amendment has been given retrospective operation from 12th October, 1961.
From the judgment of the Tribunal we find that the authority of the State Government to make a rule for future application was not seriously 1126 disputed but what was assailed was the retrospectivity given to the amendment.
Indisputably many of the promotees on the basis of seniority already assigned to them have been holding posts of Tehsildars, Deputy Collectors and Special Grade Deputy Collectors.
Many have retired from service having enjoyed those promotional benefits.
Promotions between 1961 and 1971 on the basis of the seniority assigned under Rule 33(a) of the General Rules is under challenge.
That period is a distant one from now varying between 17 to 27 years.
To allow the amendment to have retrospective operation is bound to create problems.
The State Government while amending the rule should have taken into consideration the practical problems which would arise as a consequence of retrospectivity.
It should have taken into account the far reaching adverse effect which the rule, if given such retrospective effect, would bring about in regard to services of scores of employees and the disquiet it would result in by disturbing settled situations.
We are, therefore, not of the view that the rules should be given retrospective effect from 1961.
It would, however, be wholly justified and appropriate to give the rules prospective operation by fixing 9th October, 1980 as the date from which it should take effect.
We accordingly direct that Rule 4(e) as amended on 9th October, 1980, shall not have any retrospective effect and would operate prospectively.
Though Rule 3(b) fixes the ratio as 1:1 in respect of substantive vacancies, the recruitment has not been regular and systematic.
We have come across several instances where the State Government do not take steps to give effect to their own rules and, therefore, though there is one mode of prescription, in action a different situation is brought about.
Rules have binding effect and they bind the State and the citizens alike once they are in force.
In order that law may regulate conduct, the State has to feel bound by its own laws and by willingly abiding by the law exhibit an ideal situation for the citizens to emulate.
We disapprove of the callous conduct of the State and direct that the rule shall henceforth be followed scrupulously by effecting recruitment at regular intervals according to the scheme of the rule.
The State shall within four months from today compute the substantive vacancies in the cadre and determine the quota of direct recruits to the rank of Deputy Tehsildars and after working out the vacancies available to be filled by the direct recruitment on the basis of 50 per cent of the total number, fill up the same by making direct recruitment within a period of four months thereafter.
Once that is done and regular recruitment is effected, the impasse which has now been created would not continue.
1127 The State is directed to draw up the seniority list on the basis of rule 4(e) on or before 31st December, 1988.
We have given a long time to eliminate the scope for making for an application for extension.
The Civil Appeals are dismissed.
The Writ Petitions shall have also the same fate except to the extent that Rule 4(e) as amended shall have prospective application.
In the Civil Appeals we leave the parties to bear their own costs throughout.
There would be no order for costs in the Writ Petitions.
G.N. Appeals and Petitions dismissed.
| % In 1961 the Andhra Pradesh Revenue Subordinate Services Rules were brought into force, the cadre under the rules being Deputy Tehsildars.
Till then the rules in force in the erstwhile State of Madras were applicable to Andhra Pradesh.
Rule 3 of the 1961 Rules provides for appointment of Deputy Tehsildars by direct recruitment or by transfer from members of the Andhra Pradesh Ministerial Service employed in the Revenue Department.
It also provides that the substantive vacancies in the category of Deputy Tehsildars shall be filled or reserved to be filled by direct recruitment and recruitment by transfer in the proportion of 1:1 A writ petition was filed before the Andhra Pradesh High Court by some direct recruit Deputy Tehsildars disputing the seniority over them assigned to a group of promotees.
The Single Judge dismissed the same holding that the petitioners had no casuse of action within the frame of the rules.
This was upheld by the Division Bench, deriving support from Rule 33(a) of the Andhra Pradesh State and Subordinate Services Rules 1962.
Against this a Special Leave Petition was filed before this Court.
Meanwhile, the State Government amended Rule 4(e) of the Andhra Pradesh Revenue Subordinate Service Rules to the effect that the inter se seniority between direct recruits to the category of Deputy Tehsildars and promotees to the category of Deputy Tehsildars shall be 1119 determined from the date of confirmation in the substantive vancancies in that category in the proportion of 1:1 as provided in sub rule (b) of Rule 3.
The validity of the amendment was questioned by a number of promotees (the appellants herein) before the State Administrative Tribunal with particular emphasis on its retrospective application.
The Tribunal examined the matter at length and upheld the validity of the enactment.
It also directed the State Government to proceed to determine the seniority accordingly.
The said directions of the Tribunal are assailed in the appeals by Special Leave and the Writ Petition filed in this Court.
Dismissing the appeals, and the writ petitions, this Court, ^ HELD: 1.1 The State is entitled to prescribe the manner of computing inter se seniority and in the absence of such prescription, length of service is the basis.
Rule 33 of the Andhra Pradesh State and Subordinate Services Rules, 1962 contained prescription regarding seniority and has different provisions to meet varying situations.
Sub rule (a) thereof which provides that seniority of a person is to be determined "by the date of his first appointment to such service" has obviously been misinterpreted on account of the presence of the words "unless he has been reduced to a lower rank as a punishment".
It is appropriate to interpret that rule to mean that the date of first appointment is intended to refer to continuous appointment only and the words "unless he has been reduced to a lower rank by way of punishment" are really redundant.
This interpretation will have prospective application, as otherwise limitless litigation would crop up.
[1124F G; 1125C] 1.2 Rule 4(e) before amendment in 1980 provided that the seniority of Deputy Tehsildars would be determined with reference to the date of allotment maintained and ranking assigned by the Andhra Pradesh Public Service Commission in the merit list of the particular selection.
That was confined to inter se seniority of direct recruits and did not cover inter se seniority between recruits of the two sources.
In 1980, Rule 4(e) was amended and the State Government prescribed the manner of providing inter se seniority among the recruits of the two categories.
The amended rule provided the date of confirmation in the substantive vacancy as the basis.
Rule 3(b) thereof fixed the reservation of direct recruits with reference to substantive vancancies at 50% and Rule 4(e) made provision with reference to seniority in the substantive vancancies, with reference to the date of confirmation.
The amendment is within the competency of the State Government and is not open to challenge.
This is a rule made under the proviso to Article 309 of the 1120 Constitution and the rule can be given retrospective operation.
But the State Government, while amending the rule, should have taken into consideration the practical problems which would arise as a consequence of retrospectivity.
To allow the amendment to have retrospective operation is bound to create problems.
Hence Rule 4(e) as amended on 9th October, 1980, shall not have retrospective effect and would operate prospectively.
[1125D G; 1126A, E] 2.
Though Rule 3(b) fixes the ratio as 1:1 in respect of substantive vacancies, the recruitment has not been regular and systematic.
Rules have binding effect and they bind the State and the citizens alike once they are in force.
In order that law may regulate conduct, the State has to feel bound by its own laws and by willingly abiding by the law, exhibit an ideal situation for the citizens to emulate.
The rule shall henceforth be followed scrupulously by effecting recruitment at regular intervals according to the scheme of the rule.[1126E G] [The State Government has been directed to determine the vancancies available to be filled by direct recruitment within four months and to fill up the same within four months thereafter and to draw a seniority list on the basis of rule 4(e) on or before 31.12.88.]
|
il Appeal No. 1062 of 1963.
Appeal by special leave from the judgment and order dated September 25, 1962, of the Assam High Court in Civil Rule No. 221 of 1962.
G. section Pathak and Naunit Lal, for the appellants.
M. K. Ramamurthy, for respondent No. 1.
The Judgment of the Court was delivered by Wanchoo J.
This is an appeal by special leave against the judgment of the Assam High Court.
Shri Ajit Kumar Sharma (hereinafter referred to as the respondent) is a teacher in the Handique Girls College (hereinafter referred to as the College) at Gauhati.
He filed a writ petition in the High Court on the following averments.
This is a private college teaching up to B.A. standard and affiliated to the Gauhati University established under the Gauhati University Act, No. 16 of 1947, (hereinafter referred to as the Act).
The College is managed by a Governing Body according to the provisions of the Statute for the management of private colleges framed by the Gauhati University under section 21 (g) of the Act.
Under section 23 (h) of the Act, the Executive Council may frame Ordinances to provide for the emoluments and conditions of service of teachers of the University, including teachers in private colleges.
The University has in 'Pursuance of the powers so conferred on it framed rules for the grant of leave to teachers of private colleges which are binding on the Governing Bodies of such colleges, and had actually been adopted by the Governing Body of the College in July 1956 for its teachers.
Under these rules the Governing Body of the College cannot compel a teacher to take leave without pay.
The College receives grant in aid from the State of Assam and there are certain conditions for giving grant in aid.
These conditions do not provide for withdrawal of the grant in aid if a private college fails to put a teacher, who seeks election to a legislative or local body, on compulsory leave without pay from the date of the filing of nomination till the end of the next academic Session or till expiry of the term of the office to which the teacher is elected.
892 The respondent as already stated is a teacher in the College.
He applied for leave with pay from January 2, 1962 to March 5, 1962 in order to contest a seat for Parliament.
This leave was granted to him by the Governing Body of the College by resolution No. 1 of March 9, 1962.
The respondent stood for election and was defeated.
He thereupon applied that he be permitted to rejoin his duties from March 6, 1962 and the Governing Body permitted him to do so by its resolution No. 2 dated Match 9, 1962.
He therefore worked as such from March 6, 1962.
On March 20, 1962, the Director of Public Instruction, Assam (hereinafter referred to as the Director) wrote a letter to the Principal and Secretary of the College with reference to the letter of March 10, 1962 from the College in which apparently the Director had been informed of the leave granted to the respondent and certain other teachers in connection with elections to Parliament and Assam Legislative Assembly.
In this letter, the Director informed the College that he was unable to approve the resolution of the Governing Body permitting respondent and certain other teachers to rejoin their duties "immediately".
The letter pointed out that such permission was in contravention of r. 7 of the Rules regarding the Conduct and Discipline of the Employees of Aided Educational Institutions (hereinafter referred to as the Rules) and could not therefore be approved.
The Director also added that the Rules had been framed in 1960 after due consultation with the University and the Assam College Teachers"Association.
On receipt of this letter, the Governing Body seems to have reconsidered the matter of leave to the respondent, and passed a resolution on April 4, 1962.
This letter along with another letter was considered by the Governing Body of the College, and it was resolved in view of these letters that the resolution of March 9, 1962, permitting the respondent to rejoin duties from March 6, 1962 could not be given effect to.
It was further resolved that the respondent and some other teachers be granted leave in accordance with the Rules.
This resolution of the Governing Body was conveyed to the respondent by the Principal of the College by letter dated April 5, 1962 and he was told that he had been granted compulsory leave without pay till the end of the academic session in view of his standing for election in the last general elections.
The respondent thereupon filed the writ petition in the High Court out of which the present appeal has arisen.
His contention was that the Rules to which the Director had made reference had no statutory force and that he was entitled to leave under the Rules framed by the Gauhati University, which had been accepted by the 893 College.
He also contended that the Rules not having the force of law did not affect the powers of the Governing Body of the College in the matter of its functions.
Consequently the second resolution of the Governing Body dated March 9, 1962 was proper and correct and the respondent was properly allowed to rejoin duty after the expiry of his leave on March 6, 1962.
The Director had no authority to interfere with the second resolution of the Governing Body dated March 9, 1962 and that resolutions of this character passed by a Governing Body did not require the approval of the Director and would have effect by themselves.
It was further contended that as the leave rules which.
govern the College did not give power to the Governing Body to put a teacher on compulsory leave without pay against his will and consent, the resolution of the Governing Body dated April 4, 1962 by which the respondent was put on compulsory leave without pay was of no effect and in any case the Governing Body should not have acted on the illegal direction of the Director.
Finally it was urged that the Governing Body acted as it did on a threat contained in the letter from the Additional Director dated March 19, 1962, in which it was said that the education department would not provide funds for salaries and allowances for any employee who had gone on leave in connection with elections in contravention of r. 7 of the Rules, and therefore the action of the Governing Body was bad and in any case the Director had no right to threaten the Governing Body in this way.
The respondent therefore prayed for a writ in the nature of certiorari / prohibition / mandamus declaring r. 7 of the Rules as having no legal force and also as having no binding character on the Governing Body or the respondent.
He further prayed that the resolution of the Governing Body dated April 4, 1962 be declared ultra vires, void and in effective in law, and the Director should be directed not to withhold the grant in aid to be given to the College on the failure of the Governing Body to put the respondent on compulsory leave without pay.
Before we consider the reply of the State, we would like to give the genesis of the Rules.
It appears that in February 1959 the State of Assam decided to grant additional grant in aid to private colleges to implement the recommendations of the University Grants Commission regarding scales of pay and other, emoluments to the teacher of such colleges.
Apparently these scales of pay and other emoluments were advantageous to the teachers and meant an improvement on their pay and other emoluments which they were getting from before.
It was further decided that such, 894 grant in aid should be given to private colleges on condition that the college authorities agreed to abide by certain rules regulating the conditions of service of their employees.
Accordingly it was decided to frame rules in consultation with the University and the Assam College Teachers ' Association.
Further the views of the Governing Bodies of all private colleges were also invited on the draft rules.
Among them, the Governing Body of the College was also consulted and it resolved on August 6, 1960 that it agreed with the proposed rules contemplated by the Government to be framed as communicated to it.
The Government also ascertained the views of the Gauhati University and the Assam College Teachers ' Association and eventually the Rules were notified by notification dated March 9, 1961, published on March 29, 1961.
Rule 7 of the Rules, which is material for our purposes is in these terms: "An employee desiring to seek election to the Legislative Body or to hold office with any political Organisation or local bodies shall be on compulsory leave without pay from the date of the filing of his nomination till the end of the next academic session or till the termination of the term of office to which he may be elected as the case may be.
Such employee however shall not be allowed to retain lien on his post for a period exceeding five years.
" The Rules therefore were framed in consultation with University and the Assam College Teachers ' Association, which presumably represents the teachers of all private colleges.
The Governing Body of the College was also consulted and it accepted the Rules to be promulgated.
In this Governing Body the members of the teaching staff of the College are well represented and it was after the concurrence of the University, the College Teachers ' Association and the Governing Body of the College in particular in which the teachers of the College were well represented that the Rules were notified.
The case of the appellants was that considering the manner in which the Rules were framed they were binding on the College as well as on the teachers of the College and it was thereafter that the Government gave the revised grants to the College.
It seems further that the case of the appellants was that the Rules had statutory force in view of the amendment of the Act by Assam Act 11 of 1961 by which a proviso was added to section 21 (g) of the Act whereby the Government was given power to make the 895 necessary rules in consultation with the University in respect of government colleges and government aided colleges.
There were certain other objections by the appellants, to which it is unnecessary to refer.
The Governing Body of the College was also made a party to, the writ petition and submitted a written statement.
It supported the stand taken by the State, and in particular pointed out that the Governing Body in which the teaching staff of the College was ten represented had accepted the Rules before they were notified.
In consequence the Government had been giving grant in aid to the College in accordance with the recommendations of the University Grants Commission by which the pay scales etc.
, of the teachers had been improved and the teachers had been receiving the pay and dearness allowance under this grant in aid.
No representation was ever made by any member of the teaching staff when the Rules were under consideration and were notified that he would not be bound by the Rules.
The teachers including the respondent having accepted the pay and dearness allowance under the scheme of the grant in aid given by the State on terms and conditions laid down in the Rules, the respondent was estopped from challenging the Rules which were in the interest of the College and education in general.
The Governing Body in particular was bound by the Rules having accepted them and the resolution of April 4, 1962, was not passed on.
account of any threat by the Director.
The main question that was argued before the High Court was whether the Rules in question had statutory force.
Alternatively, it was argued that even if the Rules had no statutory force and were mere executive instructions for the purpose of grant in aid, the High Court should not issue a writ against the State or the Director interfering with such administrative instructions issued by the Director.
It was further urged that if the Rules were mere executive instructions which had been accepted by the Governing Body of the College in which the teachers of the College were well represented, they would be in the nature of contractual obligations which could not be enforced by the issue of a writ under article 226.
The High Court first considered the question whether the Rules had statutory force and came to the conclusion that they could not be said to be issued under the proviso to section 21(g) of the Act on which reliance was placed and therefore did not have any statutory force.
But the High Court further held that even if the Rules had no statutory force it was open to it to issue a mandamus under article 226 to the Director, who is a public authority, to refrain from, giving effect to the Rules which had no statutory force.
It 896 therefore made a direction to the Director not to give effect to his letter of March 20, 1962.
Further it was urged before the High Court that the Governing Body of the College was not a statutory body and therefore no writ or direction could issue to it and the remedy of the respondent was to go to the civil court to enforce his right (if any).
The High Court however held that the words of article 226 were wide enough and did not confine its power to the issue of writs, directions or orders in the nature of mandamus; they gave power to issue directions, orders or writs which the Court considered proper in the circumstances of each case and such direction could be issued for any purpose.
The High Court therefore held that as the Governing Body had not applied its independent mind to the question of leave, it could issue a direction to it also.
The High Court however did not decide whether the Governing Body was a statutory body or not, and in the result directed the Governing Body also not to give effect to the letter of the Director dated March 20, 1962.
Thereupon there was a prayer to the High Court on behalf of the State and the Director for leave to appeal to this Court, which was refused.
Then the State and the Director applied to this Court for special leave which was granted; and that is how the matter has come up before us.
It may be mentioned that the Governing Body of the College has been made a respondent in the appeal before us.
The main question which falls for decision in this appeal is whether the High Court is right in issuing a writ of mandamus to the State through the Director directing it not to give effect to the letter of March 20, 1962.
It has not been contended on behalf of the appellants that the Rules have statutory force and :the arguments before us have been made on the basis that the Rules have no statutory force and are mere executive instructions given by the Government to private colleges as a condition for the implementation of pay scales etc., recommended by the University Grants Commission for private colleges, these scales being apparently higher than those existing from before.
It seems to us that the High Court was in error in granting a writ of mandamus against the State through the Director once it found that the Rules bad no statutory force and were mere administrative instructions for the purpose of giving grant in aid to private colleges.
What grants the State should make to private educational institutions and upon what terms are matters for the State to decide.
Conditions of these grants may be prescribed by statutory rules; there is 'however no law to prevent the State from prescribing the conditions 897 of such grants by mere executive instructions which have not the force of statutory rules.
In the present case the Rules have been framed in order to give revised grants to private colleges to enable them to give higher scales of pay etc., to their teachers in accordance with the recommendation of the University Grants Commission.
The Rules have been held by the High Court to have no statutory force, and that is not disputed before us.
In these circumstances it is clear that the Rules are mere executive instructions containing conditions on which grants would be made to private colleges to implement the recommendations of the University Grants Commission as to pay scales etc., of teachers of private colleges.
Where such conditions of grant in aid are laid down by mere executive instructions, it is open to a private college to accept those instructions or not to accept them.
If it decides not to accept the instructions it will naturally not get the granted which is contingent on its accepting the conditions contained in the instructions.
On the other hand, if the college accepts the conditions contained in the instructions, it receives the grant in aid.
If however having accepted the instructions containing the conditions and terms, the college does not carry out the instructions, the Government will naturally have the right to withhold the grant inaid.
That is however a matter between the Government and the private college concerned.
Such conditions and instructions as to grant in aid confer no right on the teachers of the private colleges and they cannot ask that either a particular instruction or condition should be enforced or should not be enforced.
It is only for the Governing Body of the College to decide whether to carry out any direction contained in mere administrative instructions laying down conditions for grant in aid.
Further it is open to the Governing Body not to carry out any such instruction which is not based on rules having statutory force, and it will then be naturally open to the State to consider what grant to make.
But if the Governing Body chooses to carry out the instruction, it could hardly be said that the instruction was being carried out under any threat.
It is certainly not open to a teacher to insist that the Governing Body should not carry out the instruction.
The rules for the purpose of grant in aid being as in this case merely executive instructions confer no right of any kind on teachers and they cannot apply to the High Court for a mandamus asking for the enforcement or nonenforcement of the rules, even if indirectly there may be some effect on them because of the grant in aid being withheld in whole or in part.
Such mere administrative instructions even though called rules are only a matter between the Governing Body and the State 898 through the Director and cannot in our opinion form the basis of a petition for writ under article 226 by a teacher.
We may in this connection refer to Messrs. Raman and Raman vs The State of Madras(1) where this Court had to consider certain orders and directions issued under section 43A of the Motor Vehicles (Madras Amendment) Act, 1948.
The question arose whether the orders issued under section 43A had the status of law or not.
This Court held that such orders did not have the status of law regulating the rights of parties and must partake of the character of administrative orders.
It was further held that there could be no right arising out of mere executive instructions, muchness a vested right, and if such instructions were changed pending any appeal, there would be no change in the law pending the appeal so as to effect any vested right of a party.
That decision in our opinion governs the present case also, for it has been found by the High Court, and it is not disputed before us, that the Rules are mere administrative instructions and have not the force of law as statutory rules.
They therefore confer no right on the teachers of private colleges which would entitle them to maintain a writ petition under article 226 for the enforcement or non enforcement.
of any provision of the Rules.
The Rules being mere administrative instructions are matters between private colleges and the Government in the matter of grant in aid to such colleges, and no teacher of a college has any right under the Rules to ask either for their enforcement or for their non enforcement.
We are therefore of opinion that the High Court was in error when it granted a writ against the State through the Director, by which the Director was asked not to give effect to its letter dated March 20, 1962, against the Governing Body of the College.
Then we come to the question whether a writ could have been issued against the Governing Body of the College.
We find however that there is no appeal by the College against the order of the High Court issuing a writ against it.
In these circumstances we do not think that we can interfere with the order of the High Court insofar as it is against the Governing Body of the College.
At the same time we should like to make it clear that we should not be taken to have approved of the order of the High Court against the Governing Body of the College in circumstances like the pre sent and that matter may have to be considered in a case where it properly arises.
Before we leave this case we should like to add that it was stated on behalf of the State before us that even if the decision went in (1) [1959] Supp. 2 S.C.R. 227.
899 favour of the State, it would not enforce r. 7 insofar as the respondent is concerned, as the State was concerned merely with the clarification of the law on the subject.
In the result we allow the appeal and set aside the order of the High Court granting a writ against the State through the Director.
The State of Assam has agreed to pay counsel engaged amicus curiae for respondent, Ajit Kumar Sharma.
We therefore pass no order as to costs.
Appeal allowed.
| Where, under the terms of a managing agency agreement the assessee firm who were the managing agents of a company were entitled to a certain percentage of the profits as their commission and in the books of the company maintained by the firm a sum of Rs. 2,26,850 odd was shown as commission due to the firm on the profits for the year 1941 42 and the said sum was also debited as an item of business expenditure and credited to the managing agents ' commission account, but the aforesaid sum was subsequently carried to a suspense account by a resolution of the company as a result of a request made by the firm that a debt due by the firm to the company may be written off : Held, that, as the assessee kept the accounts on the mercantile system the commission accrued to the assessee when the commission was credited to it in the accounts, and the subsequent carrying over of the amount of the commission to a suspense account pending the settlement of the dispute between the company and the assessee could not affect assessee 's liability to be taxed on this income.
Held further, that the fact that the profits of the business could be computed only after the 31st of March, 1942, was Immaterial as quantification of the commission is not a condition precedent to its accrual.
|
Appeal No. 185 of 1956.
Appeal by special leave from the judgment and decree dated November 25, 1954, of the Bombay High Court in Second Appeal No. 1003 of 1952.
H. R. Gokhale, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants.
C. B. Agarwala and A. G. Ratnaparkhi, for the respondent No. 1.
April 19.
The Judgment of the Court was delivered by SINHA, C. J.
The only question for determination in this appeal is whether the defendants appellants are 'protected tenants ' within the meaning of the Bombay Tenancy Act (Bombay Act XXIX of 1939) (which hereinafter will be referred to, for the sake of brevity, as the Act of 1939), whose rights as such were not affected by the repeal of that Act by the Bombay Tenancy and Agricultural Lands Act (Bombay Act LXVII of 1948) which hereinafter will be referred to as the Act of 1948).
The Courts below have decreed the plaintiff 's suit for possession of the lands in dispute, holding that the defendants were not entitled to the protection claimed by them as 'protected tenants '.
This appeal is by special leave granted by this Court on April 4, 1965.
The facts of this case are not in dispute.
Shortly stated, they are as follows.
By virtue of a lease dated October 30, 1939, the defendants obtained a lease of the disputed lands from the plaintiff for a period of 10 years, expiring on October 30, 1949.
The lands in 61 dispute have been found to lie within two miles of the limits of Poona Municipality.
The landlord gave notice on October 22, 1948, terminating the tenancy as from October 30, 1949.
As the defendants did not vacate the land, in terms of the notice aforesaid, the plaintiff instituted the suit for ejectment in the Court of the Civil Judge, Junior Division, at Poona in Civil Suit No. 86 of 1950.
The Act of 1939 became law on March 27, 1940, but the Act was applied to Poona area with effect from April 11, 1946.
Under section 3 of the Act, a tenant shall be deemed to be a ' protected tenant ' in respect of any land if he has hold such land continuously for a period of not less than six years immediately preceding either the first day of January, 1938, or the first day of January, 1945, (added by the Amending Act of 1946) and has cultivated such land personally during the aforesaid period.
It is not disputed that the defen dants appellants became entitled to the status of 'protected tenants ' as a result of the operation of the Act, as amended by the Bombay Tenancy (Amendment) Act, 1946 (Bombay Act XXVI of 1946), and under section 3A(1) the defendants were deemed to be 'protected tenants ' under the Act and their rights as such were recorded in the Record of Rights.
Sections 3 and 3A(1), aforesaid, are set out below: "3.
A tenant shall be deemed to be a protected tenant in respect of any land if (a) he has held such land continuously for a period of not less than six years immediately preceding either (i) the first day of January 1938 or (ii) the first day of January 1945 and (b) has cultivated such land personally during the aforesaid period.
3A(1) Every tenant shall, on the expiry of one year from the date of the coming into force of the Bombay Tenancy Amendment Act of 1946, be deemed to be a protected tenant for the purposes of this Act and his rights as such protected tenant shall be recorded in the Record of Rights, unless his landlord has within the said period made an application to 62 the Mamlatdar within whose jurisdiction the land is situated for a declaration that the tenant is not a protected tenant".
Under section 3A(1) aforesaid, it was open to the landlord, within one year of the date of the commencement of the Amending Act of 1946, to make an application to the Mamlatdar for a declaration that the tenant was not a 'protected tenant '.
No such proceeding appears to have been taken.
As a result of the expiration of one year from November 8, 1946the date of the coming into operation of the Amending Act of 1946 the defendants were deemed to be 'protected tenants ' and it is not disputed that they were recorded as such.
Section 4 of the Act, with which we are not concerned in the present case, made further provisions for recovery of possession by tenants who had been evicted from their holdings in circumstances set out in that section.
The Act, therefore, in its terms, was intended for the protection of tenants in certain areas in the Province of Bombay (as it then was).
If nothing had happened later, the defendants would have had the status of 'protected tenants ' and could not have been evicted from their holdings, except in accordance with the provisions of the Tenancy Law.
But the Act of 1939 was replaced by the Act of 1948.
The question that arises now for determination is whether the Act of 1948 wiped out the defendant 's status as 'protected tenants '.
For determining this question, we have naturally to examine the relevant provisions of the later Act.
The Act of 1948, by section 2 cl.
(14) prior to its amendment by Bombay Act XIII of 1956, provides that " protected tenant ' means a person who is recognised to be a protected tenant under section 31".
Section 31 runs as follows: "For the purposes of this Act, a person shall be recognised to be a protected tenant if such person has been deemed to be a protected tenant under section 3, 3A or 4 of the Bombay Tenancy Act, 1939.
" The force and effect of section 31 will have to be discussed later while dealing with the arguments raised 63 on behalf of the landlord respondent.
The next relevant provisions of the Act of 1948 are those of section 88(1)(c) which reads: "Nothing in the foregoing provisions of this Act shall apply: . . . . . . . . . . . . . . . (c) to any area within the limits of Greater Bombay and within the limits of the municipal boroughs of Poona City and Suburban, Ahmedabad, Sholapur, Surat and Hubli and within a distance of two miles of the limits of such boroughs; or. .
As already observed, the lands in dispute in the present controversy have been found to be situate within two miles of the limits of the Poona Municipal Borough, which, for the purpose of this case, has been equated to 'Borough of Poona City and Suburban '.
It has been contended on behalf of the respondent that under the later Act the disputed lands are outside the purview of the Act and that, therefore, the defendants appellants are not entitled to claim the status of 'protected tenants '.
The appellants have answered this contention by reference to the provisions of section 89, which may now be set out (in so far as they are necessary for the purpose of this case): "89(1) The enactment specified in the Schedule is hereby repealed to the extent mentioned in the fourth column thereof (2) But nothing in this Act or any repeal effected thereby . . . . . . . `. (b) shall, save as expressly provided in this Act, affect or be deemed to affect, (i) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or (ii) any legal proceeding or remedy in respect of any such right, title, interest, obligation, or liability or anything done or suffered before the commencement of this Act, and any such proceeding shall be continued and disposed of, as if this Act was not passed . ".
64 It has been contended on behalf of the appellants that the repealing section 89, read with the Schedule, makes it clear that the whole of sections 3, 3A and 4 of the Act of 1939 have been saved, subject to certain modifications, which are not relevant to the present purpose; and that sub section 2(b) of section 89 has in terms, saved the appellants ' rights as 'protected tenants ' because those rights had already accrued to them under the Act of 1939.
But this contention is countered by the learned counsel for the plaintiff respondent on three grounds, namely, (1) that section 88 expressly provides that sections 1 to 87 of the later Act shall not apply to lands situate in the Municipal Borough of Poona City and Suburban and within a distance of two miles of the limits of such borough; (2) that what has been saved by cl.
(b) of sub section
(2) of section 89 is not every right but only such rights as had been actually exercised and recognised; and (3) that the terms of the saving clause, as contained section 89(2)(b) were not identical with section 7 of the Bombay General Clauses Act, inasmuch as cl.
(b) aforesaid only speaks of such proceedings being continued and disposed of, without reference to the institution of such proceedings.
Shortly put, the arguments on behalf of the appellants is that the taking away of the status of a protected tenant ' from certain lands, as specified in section 88, is only prospective and not retrospective, whereas the argument on behalf of the respondent is that the repeal was with retrospective effect and only so much was saved as would come directly within the terms of el.
(b) of section 89(2), and that the right claimed by the appellants was in express terms taken away by section 88.
The argument based on the second ground may be disposed of at the outset in order to clear the ground for a further consideration of the effect of sections 88 and 89, on which the whole case depends.
The learned counsel for the plaintiff respondent placed strong reliance upon the following observations of the Lord Chancellor in the case of Abbot vs The Minister for Lands (1): "They think that the mere right (assuming it to (1) ,431. 65 be properly so called)existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a "right accrued" within the meaning of the enactment." The contention is that in order that the defendants appellants could claim the status of 'protected tenants ' as a right accrued under the Act of 1939, they should have taken certain steps to enforce that right and got the relevant authorities to pronounce upon those rights, and as no such steps had admittedly been taken by the appellants, they could not claim that they had a 'right accrued ' to them as claimed.
In our opinion, there is no substance in this contention.
The observations, quoted above, made by the Lord Chancellor, with all respect, are entirely correct, but have been made in the context of the statute under which the controversy had arisen.
In that case, the appellant had obtained a grant in fee simple of certain lands under the Crown Lands Alienation Act, 1861.
By virtue of the original grant, he would have been entitled to claim settlement of additional areas ' if he satisfied certain conditions laid down in the relevant provisions of the statute.
The original settle had the right to claim the additional settlements, if he so desired, on fulfillment of those conditions.
He had those rights to acquire the additional lands under the provisions of the Crown Lands Alienation Act,, 1861, but the Crown Lands Act of 1884, repealed the previous Act, subject to a saving provision to the effect that all rights accrued by virtue of the repealed, enactment shall, subject to any express provisions of the repealing Act in relation thereto, remain unaffected by such repeal.
The appellants ' contention that under the saving clause of the repealed enactment he had the right to make additional conditional purchases and that was a 'right accrued ' within the meaning of the saving clause contained in the repealing Act of 1884, was negatived by the Privy Council.
It is, thus;, clear that the context in which the observations relied upon by the respondent, as quoted above, were made is entirely different 9 66 from the context of the present controversy.
That decision is only authority for the proposition that 'the mere right, existing at the date of a repealing statute, to take advantage of provisions of the statute repealed is not a 'right accrued ' within the meaning of the usual saving clause '.
In that ruling, their Lordships of the Privy Council assumed that the contingent right of the original grantee was a right but it was not a right accrued ' within the meaning of the repealed statute.
It was held not to have accrued because the option given to the original grantee to make additional purchases had not been exercised before the repeal.
In other words, the right which was sought to be exercised was not in existence at the date of the repealing Act, which had restricted those rights.
In the instant case, the right of a 'protected tenant ' had accrued to the appellants while the Act of 1939 was still in force, without any act on their part being necessary.
That right had been recognised by the public authorities by making the relevant entries in the Record of Rights, as aforesaid.
On the other hand, as already indicated, section 3A(1) of the 'Act of 1939 had given the right to the landlord respondent to take proceedings to have the necessary declaration made by the mamlatdar that the tenant had not acquired the status of a 'protected tenant '.
He did not proceed in that behalf.
Hence, it is clear that so far as the appellants were concerned, their status as 'protected tenants ' had been recognised by the public authorities under the Act of 1939, and they bad to do nothing more to bring their case within the expression 'right accrued ', in el.
(b) of section 89(2) of the Act of 1948.
It having been held that the second ground of attack against the claim made by the appellants is not well founded in law, it now remains to consider whether the first ground, namely, that there is an express provision in section 88, within the meaning of section 89(2)(b), taking away the appellants ' right, is supported by the terms of sections and 89.
In this connection, it was pointed out on behalf of the respondent that section 88(1) in terms provides that sections 1 to 87 of 67 the Act of 1948 shall not apply to lands of the situation of the disputed lands; and section 31 has been further pressed in laid of this argument.
Section 31 has already "been quoted, and it begins with the words "For the purposes of this Act".
The provisions of the Act of 1948 relating to the rights and liabilities of a protected tenant ' are not the same as those under the Act of 1939.
Hence, though the provisions of sections 3, 3 A and 4 of the earlier Act of 1939 have been adopt.
ed by the later Act, it has been so done in the context of the later Act, granting greater facilities and larger rights to what are described as 'Protected tenants '.
In other words section 31 has been enacted not to do away with the rights contained in sections 3, 3 A and 4 of the earlier statute, but with a view to apply that nomenclature to larger rights conferred 'under the Act of 1948.
The provisions of section 88 are entirely prospective.
They apply to lands of the description contained in cls.
(a) to (d) of a. 88(1) from the date on which the Act came into operation, that is to say, from December 28, 1948.
They are not intended in any sense to be of a confiscatory character.
They do not show an intention to take away what had already accrued to tenants acquiring the status of 'protected tenants '.
On the other hand, section 89(2)(b), quoted above, clearly shows an intention to conserve such rights as had, been acquired or had accrued before the commencement of the repealing Act.
But it has further been contended on behalf of the respondent, in ground 3 of the attack, that sub cl.
(ii) of cl.
(b) of section 89(2) would indicate that the legislature did not intend completely to re enact the provisions of section 7 of the Bombay General Clauses Act.
This argument is based on the absence of the word instituted ' before the words 'continued and disposed of '.
In our opinion there are several answers to this contention.
In the first place, sub cl.
(i) is independent of sub el.
(ii) of ol.
(b) of section 89(2).
Therefore, sub el.
(ii), which has reference to pending litigation, cannot cut down the legal significance and ambit of the words used in sub cl.
Sub cl.
(ii) may have reference to the forum of the proceedings, whether the Civil Court or the Revenue Court shall have seizin of 68 proceedings taken under, the repealed Act.
;We have already held that the expression 'right accrued ' in sub el.
(i) does not exclude the rights of 'protected tenants"claimed by the appellants.
It is well settled that where there is a right recognised by law, there is a remedy,; and, therefore, in ' the absence of any special provisions indicating the particular forum for enforcing a particular right, the general law of the land will naturally take its course.
In this connection, it is relevant to refer to the observations of the High Court that "even if it were to be assumed that the right as a 'protected tenant ' remained vested in the defendants even after the enactment of section 88(1), that right, in its enforcement;against the plaintiff, must be regarded as illusory".
In our opinion, those observations are not well founded.
Courts will be 'very slow to assume a right and then to regard it as illusory, because no particular forum has been indicated.
Lastly, the legal effect of the provisions of sub el.
(ii) aforesaid is only this that any legal proceeding! in ' respect of the, right claimed by, the defendants shall be continued and disposed of as if the Act of 1948 had not been passed.
Applying those words to the present litigation the inference is clear that the controversy has to be resolved with reference to the provisions of the repealed statute.
That being so, in Our Opinion, the intention of the legislature was that the litigation we are now dealing with should be disposed of in terms of the repealed statute of 1939.
It has not been disputed before us that if that. is done, there is only one answer to this suit, namely, that it must be dismissed with costs.
Accordingly, we allow the appeal, set aside the judgments below and dismiss the suit with costs throughout, to the contesting defendants appellants.
| The appellants had acquired the rights of protected tenants under section 3A(1) of the Bombay Tenancy Act, 1939, as amended by the Bombay Tenancy (Amendment) Act, 1946, and their rights as protected tenants were recorded in the Record of Rights.
That Act was repealed by the Bombay Tenancy and Agricultural Lands Act, 1948, which by section 31 recognised the rights of a protected tenant acquired under the Act of 1939 for its own purposes, by section 88(1)(c) provided, that nothing in the foregoing provisions of the Act should apply to any area within the limits of the Municipal borough of Poona City and Suburban as also some other boroughs and within a distance of two miles of the limits of such boroughs, and by section 89(2) that "nothing in this Act or any repeal effected thereby . (b) shall, save as expressly provided in this Act, affect or be deemed to affect (i) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or . . . . . . . . . or . . . . . . . . . (ii) any legal proceeding or remedy in respect of any such right, title, interest, obligation, or liability or anything done or suffered before the commencement of this Act, and any such proceeding shall be continued and disposed of, as if this Act was not passed The lands in dispute were situated within two miles of the limits of the Poona Municipal Borough, i.e. Poona City and Suburban, and the question was whether the rights of the appellants as protected tenants therein were.
I affected by the repeal.
Held, that the provisions of section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948, are entirely prospective and apply to such lands as are described in cls.
(a) to (d) of section 88(1) from 60 the date on which the Act came into operation i.e. December 28, 1948, and are not of a confiscatory nature so as to take away from the tenant the status of a protected tenant already accrued to him.
Section 89(2)(b) of the Act clearly intends to conserve such rights as were acquired or accrued before its commencement and that any legal proceeding in respect of such rights was to be disposed of in terms of the Act of 1939.
Abbot vs The Minister for Lands, , distin guished.
|
ivil Appeal No. 2446 of 1991.
From the Judgement and Order dated 11.10.1990 of the Bombay High Court in F.A. No. 649 of 1990.
Mrs. C.M. Chopra for the Appellant.
Respondent in person.
The Judgment of the Court was delivered by KULDIP SINGH, J.
His parents advertised for " homely non medico" bride.
Her parents responded.
Marriage took place on January 24, 1988 at Noida near Delhi.
They hardly lived as husband and wife at Pune for about seven months when on August 16, 1988 the husband filed a petition under Section 13 of the Hindu Marriage Act for dissolution of Marriage on the ground of cruelty.
He alleged "she had a habit of smoking" and "it was found that she was in the habit of drinking and even once came drunk to the applicant 's house and abused everybody".
He further alleged " it was found by the applicant that she was working as a model prior to marriage and he found few pictures of the respondent in bikini and semi nude clothes in magazines".
She vehemently denied the allegations and claimed that the she was a homely, vegetarian, non smoking, teetotaller and faithful house wife.
The Family Court at Pune proceeded ex parte and granted divorce decree by the order dated November 30, 1989.
Wife 's application for setting aside the ex parte decree was dismissed by the Family Court on June 24, 1990.
The High Court by its judgment dated October 10/11, 1990 unheld the findings of the Family Court with the modification that in place of decree for dissolution of marriage it granted a decree for judicial separation.
This appeal by way of special leave is by the wife against the judgments of the courts below.
85 During the pendency of the divorce proceedings before Family Court, Pune, the wife filed a petition, on May 1, 1989, before this Court seeking transfer of the case from the Family Court, Pune to Delhi.
This Court granted ad interim stay of the proceedings before the Family Court, Pune.
The stay remained operative till September 11, 1989 when this Court dismissed the transfer petition and vacated the stay.
Thereafter the husband appeared before the Family Court on September 15, 1989 whereas the appellant wife remained absent.
Notices were sent by registered post to the wife on her address at Noida and also at her Delhi address given by her in the proceedings before this Court.
The notice came back with the remarks "not found".
The Family Court ordered substituted service and a notice was published in the "Times of India" New Delhi of dated October 24.1989 asking the wife to appear before the Family Court on November 16, 1989 or the proceedings would be taken ex parte.
On November 16, 1989 the Family Court ordered ex parte proceedings.
The issues were framed on November 21, 1989, the evidence of the husband was recorded on November 25, 1989 and the judgment was pronounced on November 30, 1989.
The appellant filed an application dated December 18, 1989 for setting aside the ex parte divorce decree wherein she stated that after she was forced to leave her matrimonial home at Pune, she was residing with her parents at Noida.
She further stated that in October/November, 1989 she had gone to reside with her brother at Delhi.
According to her she applied to the Army Authorities claiming maintenance out of her husband 's salary.
Respondent husband is an Army officer.
The Army Authorities sent a letter dated December 14, 1989 to her father wherein it was mentioned that his daughter 's application for maintenance allowance could not be entertained because the husband had already obtained a divorce decree from the court.
A copy of the Family Court Judgment granting divorce decree to the husband was also annexed to the letter.
The appellant claims that for the first time, on or about December 14, 1989, She came to know through her father that the respondent had already been granted an ex parte divorce decree by the Family Court.
The appellant in her application inter alia stated as under: "The applicant submits that the applicant did not receive any notice/letter/summons or communication from this Hon 'ble Court 's office.
Even there was no intimation given by postal 86 authorities and the applicant honestly states that till the receipt of the letter from the Army H.Q. New Delhi, she was not aware of the date of proceeding.
The applicant submits, the applicant was under bona fide belief that she will receive a notice from this Hon 'ble Court.
As such and being far from Pune, either in Noida ( U.P.) or at New Delhi, it was not possible for her to approach this Hon 'ble Court for any enquiry since she was also not permitted to appear through the lawyer. .At any rate and in any event, the applicant also did not come across the public notice published in Times of India, New Delhi on 24th October 1989 as stated in the decree.
The applicant submits, the applicant had every intention to resist the marriage petition filed by the opponent since the same was absolutely false, frivolous and out and out false, and has been resisted by the applicant by filing written statement, preliminary objection including to approach the Supreme Court of India.
The intention of the applicant was clear.
The applicant submits, the applicant was also advised by her Advocate that she will receive a fresh notice in due course of time after the stay was vacated by the Hon 'ble Supreme Court of India from this Hon 'ble Court.
The applicant states, she resides at a far long distance from Pune.
She was also refused any assistance of lawyer.
The applicant has no relation or any representative who can look after her in the present proceeding in Pune.
It was in these circumstances, the applicant was prevented by sufficient cause from appearing in the marriage petition proceeding No.561/89 and as such the said decree is required to be set aside . .
The applicant states, the applicant is unable to maintain herself, she has no source of income . .
The applicant submits because of the passing of ex parte decree, she has been refused maintenance allowance.
The applicant also prays for granting of maintenance allowance pending final disposal of this application." The Family Court dismissed the application for setting aside ex parte divorce decree on the following reasoning: "But where the party itself knows that stay obtained by it has been vacated, there appears no warrant for the proposition that again a notice is required to be given to the said party.
I do 87 not think that such advice was really given to the applicant.
The applicant has not produced any evidence to the effect that she received such advice from a lawyer.
It is her own statement.
It is a self serving statement and can hardly be believed.
I think that if the applicant was really keen and desirous to contest matrimonial petition, she would have at once made enquiries to find out as to when the next date for hearing in this court was fixed after her application for transfer of the case was dismissed by the Supreme Court and the stay obtained by her was vacated.
The order of vacating the stay was passed on 11th September 1989 by the Hon 'ble Supreme Court and the applicant knew fully well about it.
The opponent who had also appeared in the Supreme Court in connection of that matter did appear in this Court on 15.9.1989.
The record of P.A. No. 561/89 shows that opponent applied for issuing of notice to the present applicant.
The notice was issued by registered post on two separate addresses.
One of the address was the one shown by applicant herself in Supreme Court petition and the other address was the one which was admitted to be her address in the matrimonial petition (which was address of her father at Delhi).
Both these notices were sent by registered post in due course.
The court waited till return of this notice.
On both these envelops postal authorities have endorsed that the present applicant was not found on these addresses.
The opponent had, therefore, made application that the applicant was avoiding to take notice and hence substituted service by publishing in Times of India be made.
Accordingly, a notice was published as per order of the Court on opponent 's application.
Thus the contention of the respondent that she had no notice of the further proceeding in marriage petition does not appear convincing.
As stated already in the first instance, there was no necessity for her to wait for receipt of the notice in the circumstances of the present case.
The notices sent to her were obviously evaded, otherwise there was no reason why the applicant was found on either of the addresses which she admits to be the correct addresses.
Even if she was not present, there was no reason why other major members of the family did not accept these notices.
And lastly the publication of the notice 88 in one of the most widely circulated newspaper at Delhi was sufficient notice to the applicant.
" The High Court upheld the reasoning and the conclusions reached by the Family Court and dismissed the appeals filed by the wife.
The respondent appeared before us in person and himself argued his case.
The learned counsel for the appellant raised the following points for our consideration: (a) That the Family Court and the High Court grossly erred in dismissing the application filed by the appellant for setting aside the ex parte proceedings; (b) That the divorce petition was filed hardly seven months after the marriage.
Section 14 of the Hindu Marriage Act provides "it shall not be competent for any court to entertain any petition for dissolution of a marriage by a decree of divorce, unless at the date of the presentation of the petition one year has elapsed since the date of the marriage".
The divorce petition should have been dismissed as not competent in terms of Section 14 of the Hindu Marriage Act; (c) that even on merits the divorce decree is based on no evidence.
The allegations in the divorce petition are wholly vague.
In any case the evidence of Major Ved Prakash being wholly interested and contrary to the record the courts below fell into grave error in accepting serious allegations against the appellant on the basis of his evidence; (d) that the High Court acted illegally in substituting the decree of divorce to that of a decree for judicial separation.
The High Court should have dismissed the divorce petition.
We may take up the Fist Point.
The appellant filed written statement before the Family Court, Pune vehemently denying the allegations made against her by the respondent.
She also raised preliminary objections regarding the maintainability of the divorce petition.
She filed a transfer petition before this Court which was dismissed in September, 1989.
She filed another transfer petition which was dismissed by this Court on April 12,1990 with the following observations: 89 "It is open to the petitioner to move the High Court under Section 24, Code of Civil Procedure for consideration of her prayer that the case be transferred to another Judge.
On the merits of this prayer, we decline to make any observation.
It would appear that the case is now listed before the Family Judge at Pune on 13.4.90.
It will be appropriate that having regard to the apprehension expressed by the petitioner the Court should not proceed with the matter until her prayer for transfer is considered by the High Court.
We accordingly direct the Family Court, Pune to stay further proceeding in the case, a period of 60 days from today to enable the petitioner to approach the High Court.
" It is no doubt correct that the appellant did not approach the High Court for the transfer of the case but the fact remains that she was been seriously contesting the divorce proceedings and it would not be fair to assume that she deliberately choose to abstain from the Family Court and was intentionally avoiding the summons.
The Family Court and the High Court have held that after the dismissal of the transfer petition and vacation of stay by this Court the appellant wife should have, on her own, joined the proceeding before the Family Court.
According to the courts below no notice for appearance was required to be sent to the parties after the stay was vacated.
It is not necessary for us to go into the question as to whether a fresh notice to the parties is necessary where the superior Court vacates the stay order and as a consequence the proceeding recommence before the court below.
We are of the view that in the fact and circumstances of this case the interest of justice required the issue of such a notice.
The admitted facts in this case are as under: (i) While dismissing the transfer petition and vacating the stay order this Court did not fix any date for the appearance of the parties before the Family Court, Pune (ii) The Family Court had permitted the assistance of a lawyer to the appellant wife in the following terms: "As applicant is from Delhi and it would cause hardship, permission is granted 90 for engaging an Advocate for pleading her case only for the purpose of presenting applications or serving notices and noting the orders of the Court.
" (iii) The appellant did not engage a lawyer to represent her before the Family Court, Pune.
(iv) The appellant wife was residing with her parents at Noida (Delhi).
Even the distance between Noida and Pune was a big hassle for the appellant especially when she had no counsel to look after the proceedings before the Family Court, Pune.
We are of the view that in the facts and circumstances of this case she was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties.
The applicability of the Rules of natural justice depends upon the facts and circumstances of each case.
We are of the view that in the facts and circumstances of this case she was justified in her assumption that the proceedings before the Family Court would be resumed after fresh notice to the parties.
The applicability of the Rules of natural justice depends upon the facts and circumstances of each case.
We are of the view that in this case fair play and the interest of justice required the issuance of a fresh notice to the parties after the stay order was vacated by this Court.
We do not, therefore, agree with the findings of the Courts below to the contrary.
In any case realising the requirements of natural justice the Family Court, sent two registered notices to the appellant at her Noida address and also at the address given by her in the proceedings before this Court.
Unfortunately, both the notices came back with the endorsements that the appellant could not be found on the given addresses.
There is no material on the record to reach a conclusion that the appellant refused to receive the notices.
There is also nothing on the record to show as to whether the postal authorities made any efforts to deliver the registered letters to any of the appellant 's relations at the given addresses.
The courts below are wholly unjustified in holding that the appellant refused to receive the notices and further that the said notices could have been received by any of her relations on the given addresses.
After the notices sent by registered post were received back, the Family Court did not make any attempt to serve the appellant through the process of the Court.
The appellant was no stranger to the respondent.
She was his wife.
It could not have been difficult for him to find out the address where she was staying.
Under the circumstances, resort to the substitute service by way of publication in the newspaper was not justified.
91 We are, therefore, of the view that there was sufficient cause for the non appearance of the appellant in the matrimonial petition before the Family Court.
The view we have taken on the first point, it is not necessary to deal, with the other points raised by the learned counsel for the appellant.
We, therefore, set aside the order of the Family Court dated June 24, 1990 and allow the appellant 's application dated December 18, 1989 and set aside the ex parte decree passed against the appellant in Marriage petition No. A 561/89.
As a consequence the judgment of the Family Court, Pune dated November 30, 1989 and the judgment of the High Court in First Appeal No. 649/90 dated October 10/11, 1990 are also set aside.
The appellant had asked for transfer of her case from the Principal Judge, Family Court, Pune to some other court and this Court gave liberty to the appellant to move the High Court for the said purpose.
We are satisfied that the reason given by the appellant for such transfer and the apprehensions entertained by her are wholly unjustified.
We ar, however, of the view that the Principal Judge, Family Court Pune, has taken the grievances made by the appellant before this Court rather seriously and has commented adversely about the same.
With a view to do complete justice between the parties we direct that this case be transferred from the file of Principal Judge, Family Court, Pune to the Principal Judge, Family Court, Bombay.
The parties are directed to appear before the Principal Judge, Family Court, Bombay on June 22, 1992.
Before concluding we wish to place on record that we tried to persuade the parties to live together and in the alternative to settle their dispute amicably but with no result.
We allow the appeal in the above terms with no order as to costs.
N.V.K. Appeal allowed.
| While pronouncing its Judgment in Reserve Bank of India vs Peerless General Finance and Investment Co. Ltd., ; , this Court observed that it would be open to the Reserve Bank of India (RBI) to take such steps as were open to it in law to regulate 407 the savings schemes run by Residuary Non Banking Companies (RNBCs) to prevent exploitation of ignorant investors while at the same time taking care to protect the thousands of employees working in such companies.
This Court also expressed grave concern at the mushroom growth of financial investment companies offering staggering rates of interests to depositors leading to suspicion whether these companies were speculative ventures floated to attract unwary and credulous investors and capture their hard earned savings.
Pursuant to the said observations of this Court and keeping in mind the public interest, the RBI in exercise of its powers under sections 45J and 45K of the , and of all powers enabling it in that behalf, issued certain directions by way of Notification No. DFC 55/DG (O) 87 dated 15.5.1987.
A Writ Petition was filed before the High Court challenging the constitutional validity of the said directions issued by the RBI.
A Single Judge of the High Court passed certain interim orders.
Being aggrieved against the interim orders, the RBI preferred an appeal before the Division Bench.
The Division Bench disposed of the appeal as well as the Writ Petition.
It held that the RBI was empowered to issue directions to the Residuary Non Banking Companies in the interest of depositors; but to the extent such directions were found to be prohibitory or unworkable and as such unreasonable, would be beyond the powers of RBI.
Peerless which became a party respondent, filed an application for clarification of the judgment, as regards payment against discontinued certificates.
The High Court clarified that in such cases the depositors be allowed to take loan against payments made till discontinuance on such terms and conditions as the company may stipulate.
The present appeals were filed by RBI against the orders of the High Court.
A Writ Petition has been filed directly before this Court, challenging the directions as being ultra vires of sections 45J and 45K of the as also violative of the provisions of the constitution.
On behalf of the Writ Petitioners it was contended that since the 1987 directions issued by RBI were in the nature of subordinate legislation, it was clear that RBI overstepped the bounds of the 408 parent statute; that the source of power for issuing the directions as being derived from section 45L was only an after thought; that from the working results it appeared impossible to carry on the traditional business for any longer period without incurring huge losses; that from in the business carried on by Peerless and other similar RNBCs that the working capital is generated out of the subscriptions received from the certificate holders either in lump sum or in instalments and such deposits are paid back with the guaranteed accretions, bonus, interest etc.
in terms of contract at the end of the stipulated term; that the interest of the depositors has not been impaired in any manner whatsoever by the method of accountancy followed by Peerless and all similar companies, namely, appropriation of a part of the subscription to the profit and loss account and meeting the working capital requirements out of the same.
On behalf of the appellant RBI, it was contended that it had the power to issue the said directions, that the said directions were issued in pursuance to this Court 's observations, and in public interest; that the said directions had not imposed any restriction on the right to carry on business but only placed a restriction with respect to one of the modes of raising reserves i.e. through public deposits; that the directions cannot be condemned as being violative of Article 19(1) (g); and that formula laid down by the High Court was self defeating and deprived altogether the benefits of security provisions given to depositors under the 1987 directions.
On behalf of the Peerless Field Officers Association, it was contended that if the directions of 1987 were to be upheld, the undertakings of Peerless would face inevitable closure and almost 14 lac field officers would lose their only source of livelihood.
Allowing the appeals filed by RBI and dismissing the Writ Petition filed by the Finance Companies, this Court, HELD: Per Kasliwal, J 1.1 The Reserve Bank was competent and authorised to issue the impugned directions of 1987, in exercise of powers conferred under Section 45K(3) of the Act.
[431 C] 1.2 A combined reading of Section 45J, 45K and 45L of the unmistakably goes to show that the Reserve Bank if it considers necessary in the public interest so to do, can specify the conditions subject to which any prospectus or advertisement soliciting deposits of money from the public may be 409 issued.
It can also give directions to non banking institutions in respect of any matters relating to or connected with the receipt of deposits, including the rates of interest payable on such deposits, and the periods for which deposits may be received.
This latter power flows from sub section (3) of Section 45K of the Act.
The Bank under this provision can give directions in respect of any matters relating to or connected with the receipt of deposits.
Thus a very wide power is given to the RBI to issue dirctions in respect of any matters relating to or connected with the receipt of deposits.
It cannot be considered as a power restricted or limited to receipt of deposits only.
Such an interpretation would be violating the language of section 45K (3) which furnishes a wide power to the Reserve Bank to give any directions in respect of any matters relating to or connected with the receipt of deposits.
The Reserve Bank under this provision is entitled to give directions with regard to the manner in which the deposits are to be invested and also the manner in which such deposits are to be disclosed in the balance sheet or books of accounts of the company.
The word `any ' qualifying matters relating to or connected with the receipt of deposits in the above provision is of great significance and directions of 1987 are fully covered under Section 45K (3) of the Act, which gives power to the Reserve Bank to issue such directions.
[430 D H; 431 A] 1.3 When an authority takes action which is within its competence, it cannot be said to be invalid merely because it purports to be made under a wrong provision, if it can be shown to be within its power under any other provision.
[431 B] Indian Aluminium Company etc.
vs Kerala State Electricity Board; , , relied on.
2.1 The function of the Court is to see that lawful authority is not abused but not to attain itself the task entrusted to that authority.
It is well settled that a public body invested with statutory powers must take care not to exceed or abuse its power.
It must keep within the limits of the authority committed to it.
It must act in good faith and it must act reasonably.
Courts are not to interfere with economic policy which is the function of experts.
It is not the function of the Courts to sit in Judgment over matters of economic policy and it must necessarily be left to the expert bodies.
The function of the Court is not to advice in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent.
It would be hazardous and risky for the Courts to tread an 410 unknown path and should leave such task to the expert bodies.
[442 C D] 2.2 Reserve Bank of India which is banker 's bank is a creature of Statue.
It has large contingent of expert advice relating to matters affecting the economy of the entire country and nobody can doubt the bonafides of the Reserve Bank in issuing the impugned directions of 1987.
The Reserve Bank plays an important role in the economy and financial affairs of India and one of its important functions is to regulate the banking system in the country.
It is the duty of the Reserve Bank to safeguard the economy and financial stability of the country.
In fact the directions of 1987 were issued by RBI after mature consideration with the help and advice of experts.
[441 B D, 443 D E] Delhi Cloth and General Mills etc.
vs Union of India etc.
; , ; M/s Prag Ice & Oil Mills and Anr.
vs Union of India; , ; Shri Sitaram Sugar Company Limited and Anr.
vs Union of India & Ors.
, ; ; R.K. Garg vs Union of India & Ors. etc.; , , relied on.
The Reserve Bank was right in taking the stand that if the companies want to do their business, they should invest their own working capital and find such resources elsewhere with which the Reserve Bank has no concern.
[445 C] 4.
It is not the concern of this Court to find out as to whether actuaial method of accounting or any other method would be feasible or possible for the companies to adopt while carrying out the conditions contained in paragraphs 6 and 12 of the directions of 1987.
The companies are free to adopt any mode of accounting permissible under the law but it is certain that they will have to follow the entire terms and conditions contained in the directions of 1987 including those contained in paragraphs 6 and 12.
[445 E F] 5.1 It is not possible for the Court to determine as to how much percentage of deposit of first instalment should be allowed towards expenses which may consist of commission to agents, office expenses etc.
It would depend from company to company based on various factors such as paid up capital, percentage of commission paid to the agents, rate of interest paid to the depositors, period of maturity for repayment, office expenses and various other factors necessary to mop up working capital out of the depositors money.
411 One cannot ignore the possibility of persons having no stake of their own starting such business and after collecting huge deposits from the investors belonging to the poor and weaker sections of the society residing in rural areas, and to stop such business after a few years thus devouring the hard earned money of the small investors.
In such kind of business, the agents always take interest in finding new depositors because they get a high rate of commission out of the first instalment, but they do not have same enthusiasm in respect of deposit of subsequent instalments.
In these circumstances if the Reserve Bank has issued the directions of 1987 to safeguard the larger interest of the public and small depositors it cannot be said that the directions are so unreasonable as to be declared constitutionally invalid.
[447 E H, 448 A] 5.2 It cannot be said that the directions of 1987 amount to prohibition of the business in a commercial sense and without reasonable basis.
Nor are the directions violative of Article 19(1) (g) of the Constitution of India.
[442 G H, 443 A B] Mohammad Yasin vs The Town Area Committee, Jalalabad and Anr., ; ; Premier Automobiles Ltd. and Anr vs Union of India, ; ; Shree Meenakshi Mills Ltd. vs Union of India, ; , referred to.
So far as Peerless is concerned there is no possibility of its closing down such business.
It has already large accumulated funds collected by making profits in the past serveral years.
Thus it has enough working capital in order to meet the expenses.
It cannot be said that after some years Peerless will have to close down its business if the directions contained in paragraphs 6 and 12 are to be followed.
The working capital is not needed every year as it can be rotated after having invested once.
If the entire amount of the subscriptions is deposited or invested in the proportion of 10% in public sector banks, 70% in approved securities and 20% in other investments, such amounts will also start earning interest which can be added and adjusted while depositing or investing the subsequent years ' deposits of the subscribers.
In any case it lies with the new entrepreneurs while entering such field of business to make arrangement of their own resources for working capital and for meeting the expenses and they cannot insist in utilising the money of the depositors for this purpose.
So far as the companies already in this field they must have earned profits in the past years which can be utilised as their working capital.
It is important to note that the direc 412 tions of 1987 have been made applicable from 15th May, 1987 prospectively and not retrospectively.
[447 H; 448 C F] 7.
The directions of 1987 as well as any other directions issued from time to time by the Reserve Bank relating to economic or financial policy are never so sacrosanct that the same cannot be changed.
Even the financial budget for every year depends on the economic and financial policy of the Government existing at the relevant time.
So far as the impugned directions are concerned if it is found in future that the same are not workable or working against the public interest, the Reserve Bank is always free to change its policy and scrap or amend the directions as and when necessary.
If at any time, the Reserve Bank feels that the business of the kind run at present by the Peerless and other companies in terms of the directions of 1987 are not yielding the result as envisaged by the Reserve Bank, it will always be prepared to consider any new proposals which may be conductive both in the interest of the large multitude of the investors as well as the employees of such companies.
[448 G H, 449 A B] Per Ramaswamy, J. (Concurring) : 1.
The directions of 1987 issued by RBI are within the power of the RBI to provide tardy, stable, identifiable and monitorable method of operations by each RNBC and its compliance of the directions.
This will ensure security to the depositors at all times and also make the accounts of the company accurate, accountable and easy to monitor the working system of the company itself and continuance of its workmen.
The directions in paragraphs 6 and 12 are just, fair and reasonable not only to the depositors, but in the long run to the every existence of the company and its continued business itself.
Therefore, they are legal, valid and constitutionally permissible.
[464 G H, 465 A] 2.
Section 45K of the empowers the RBI to collect information from non banking institutions as to deposit and to give directions that every non banking institution shall furnish to the Bank, in such form, at such intervals and within such time, such statements, information or particulars relating to or connected with deposits received by the non banking institution, as may be specified by RBI by general or special order including the rates of interest and other terms and conditions on which they are received.
Under sub section (3) thereof the RBI is entitled to issue 413 in the public interest directions to non banking institutions in respect of any matter relating to or connected with the receipt of deposits including the rates of interest payable on such deposits and the periods for which deposits may be received.
The use of the adjective `any ' matter relating to or connected with the receipt of deposits is wide and comprehensive to empower the RBI to issue directions in connection therewith or relating to the receipt of deposits.
But exercise of the power is hedged with and should be `in the public interest '.
[450 C F] 3.1 The State can regulate the exercise of the fundamental right to save the public from a substantive evil.
The existence of the evil as well as the means adopted to check it are the matters for the legislative judgment.
But the court is entitled to consider whether the degree and mode of the regulation is in excess of the requirement or is imposed in an arbitrary manner.
The Court has to see whether the measure adopted is relevant or appropriate to the power exercised by the authority or whether it over stepped the limits of social legislation.
Smaller inroads may lead to larger inroads and ultimately result in total prohibition by indirect method.
If if directly transgresses or substantially and inevitably affects the fundametal right, it becomes unconstitutional, but not where the impact is only remotely possible or incidental.
The Court must life the veil of the form and appearance to discover the true character and the nature of the legislation, and every endeavour should be made to have the efficacy of fundamental right maintained and the legislature is not invested with unbounded power.
The Court has, therefore, always to guard against the gradual encroachments and strike down a restriction as soon as it reaches that magnitude of total annihilation of the right.
[453 F H, 454 A] 3.2 In the interest of the general public, the law may impose restrictions on the freedom of the citizen to start or carry on his business.
Whether an impugned provision imposing a fetter on the exercise of the fundamental right guaranteed by Article 19(1) (g) amounts to a reasonable restriction imposed in the interest of general public, must be adjudged not in the background of any theoretical standard or pre determinate patterns, but in the light of the nature and the incidence of the right, the interest of the general public sought to be secured by imposing restrictions and the reasonableness of the quality and the extent of the fetters imposed by the directions.
The credit worthiness of RNBCs undoubtedly would 414 be sensitive.
It thrives upon the confidence of the public, on the honesty of its management and its reputation of solvency.
The directions intended to promote `freedom ' and facility which are required to be regulated in the interest of all concerned.
[457 E F] Hatisingh Mfg. Co. Ltd. & Anr.
vs Union of India & Ors.
, ; ; Latafat Ali Khan & Ors.
vs State of U.P., [1971] Supp.
SCR 719, relied on.
There is presumption of constitutionality of every statute and its validity is not to be determined by artificial standards.
The court has to examine with some strictness the substance of the legislation to find what actually and really the legislature has done.
The court would not be over persuaded by the mere presence of the legislation.
In adjudging the reasonableness of the law, the court will necessarily ask the question whether the measure or scheme is just, fair, reasonable and appropriate or unreasonable, unnecessary and arbitrarily interferes with the exercise of the right guaranteed in of the Constitution.
The Court has to maintain a delicate balance between the public interest envisaged in the challenged provision and the individual 's right taking into account the nature of his right said to be infringed, the underlying purpose of the restriction, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the restriction imposed, the prevailing condition at the time, the surrounding circumstances, the larger public interest which the law seeks to achieve and all other relevant factors germane for the purpose.
All these factors should enter into the zone of consideration to find the reasonableness of the impugned restriction.
The Court weighs in each case which of the two conflicting public or private interest demands greater protection and if it finds that the restriction imposed is appropriate, fair and reasonable, it would uphold the restriction.
The court would not uphold a restriction which is not germane to achieve the purpose of the statute or is arbitrary or out of its limits.
[454 B C, E G] 5.
The directions are incorporated and became part of the Act itself.
They must be governed by the same principles as the statute itself.
The statutory presumption that the legislature inserted every part thereof for a purpose and the legislative intention should be given affect to, would be applicable to the directions of 1987 as well.
[445 E] 6.1 The RBI issued the directions to regulate the operations 415 of the RNBCs, to safeguard the interest of the depositors.
Payment of interest, bonus, premium or other advantage, in whatever name it may be called is reward for waiting or parting with liquidity.
It is paid because of positive time preference (one rupee today is preferred to one rupee tomorrow) on the part of the depositor.
Therefore, the directions avowed to preserve the right of the depositors to receive back the amount deposited with the contracted rate of interest; it aims to prevent depletion of the deposits collected from the weaker segments of the society and also tends to affect free flow of the business of the RNBCs who would desire to operate in their own way.
[455 F H] 6.2 Mushroom growth of non banking agencies put afloat diverse schemes with alluring offers of staggering high rate of interest and other catchy advantages which would generate suspicion of the bona fides of the offer.
But gullible depositors are lured to make deposits.
It is not uncommon that after collecting fabulous deposits, some unscrupulous people surreptiously close the company and decamp with the collections keeping the depositors at bay.
Therefore, the need to regulate the deposits/subscriptions, in particular in private sector became imperative to prevent exploitation or mismanagement as a social justice strategem.
[457 A B] 6.3 RBI occupies place of `pre eminence ' to ensure monetary discipline and to regulate the economy or the credit system of the country as an expert body.
It also advises the Government in public finance and monetary regulations.
The banks or non banking institutions shall have to regulate their operations in accordance with not only as per the provisions of the Act but also the rules and directions or instuctions issued by the RBI in exercise of the power thereunder.
Chapter 3B of the expressly deals with regulations of deposit and finance received by the RNBCs.
The directions, therefore, are statutory regulations.
[455 B D] Joseph Kuruvilla Vellukunnel vs Reserve Bank of India & Ors., [1962] Suppl.
3 SCR 632; State of U.P. vs Babu Ram, ; ; D.V.K. Prasada Rao vs Govt.
of A.P., AIR 1984 A.P. 75, relied on.
The objects of the direction are to preserve the ability of the RNBC to pay back to subscribers/depostitors at any given 416 time; safety of the subscribers ' money and his right to unencumbered repayment are thus of paramount public interest and the directions aimed to protect them.
The directions cannot and would not be adjudged to be ultra vires or arbitrary by reasons of successful financial management of an individual company.
An overall view of the working system of the scheme is relevant and germane.
[460 C D] 8.
The obligation in paragraph 12 of periodical disclosure in the accounts of a company of the deposits together with the interest securd thereon, whether or not payable, but admittedly due as a liability, is to monitor the discipline of the operation of the schemes and any infraction, would be dealt with as per law.
The certificate by a qualified Chartered Accountant is to vouchsafe the correctness and authenticity of accounts and would and should adhere to the statutory compliance.
[460 D E] 9.
The settled accounting practice is that a loan or deposit received from a creditor has to be shown as a liability together with accrued interest whether due or deferred.
The actuarial accounting applies to revenues and costs to which the concept of the `going concern ' can be adopted.
Therefore, in providing the costs of the company it can set apart its costs on the basis that liability is created for interest, bonus etc.
payable in foreseeable future.
Undoubtedly the actuarial principle applied by the LIC or the gratuity schemes are linked with life of the assured or the premature death before retirement of an employee, but RNBC in its contract does not undertake any such risk.
The deposit or loan is a capital receipt but not a revenue receipt and its full value shall be shown in the account books or balance sheet as liability of the company.
It cannot be credited to the profit and loss account.
of Schedule I of the requires that the amount shown in the profit and loss account should be confined to the income and expenditure of the company.
Para 12 of the directions is, thus, in consonance with the .
Paragraph 6 only elongates the contract in the public interest to safeguard the interest of the vulnerable sections of the depositors.
The RBI cannot be expected to constantly monitor the working of the RNBC in its day to day function.
The actuarial basis cannot be adopted by the RNBCs.
and the liability must always be reflected in its balance sheet at its full value.
Compliance of the direction in para 12, dehors any method of accountancy adopted by a company, intended to discipline its operations.
[460 E H, 461 A C] 417 10.
Regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition.
The directions of 1987 are neither palpably arbitrary nor unjust nor unfair.
The mechanism evolved in the directions is fool proof, to secure the interest of the depositors, as well as capable of monitoring the business management of every RNBC.
It also protects the interest of the employees/field staff/commission agents etc.
on permanent basis over coming initial convulsion.
It was included, in the best possible manner, to subserve the interest of all without putting any prohibition in the ability of a company to raise the deposit, even the absence of any adequate paid up capital or reserve fund or such pre commitment of the owner, to secure such deposits.
[462 E G] Narendra Kumar vs Union of India, ; , relied on.
Reserve Bank of India etc.
vs Peerless General Finance and Investment Co. Ltd. & Ors.
; , , referred to.
So long as the power is traceable to the statute, mere omission to recite the provision does not denude the power of the legislature or rule making authority to make the regulations, nor consiered without authority of law.
The asbsence of reiteration of objective satisfaction in the preamble as of one under Section 45L does not denude the powers; the RBI admittedly has the power under Section 45L, to justify the actions.
Though Section 45L was neither expressly stated nor mentioned in the Preamble of the directions of the required recitation or satisfaction of objective facts to issue the directions, from the facts and circumstances it is demonstrated that the RBI, had such satisfaction in its consideration the power under Section 45L, when the directions were issued.
Even otherwise Section 45K (3) itself is sufficient to uphold the directions.
[464 F H] 1.2.
The court has to see whether the scheme, measure or regulation adopted is relevant or appropriate to the power exercised by the authority.
Prejudice to the interest of depositors is a relevant factor.
Mismanagement or inability to pay the accrued liabilities are evils sought to be remedied.
The directions of 1987 designed to preserve the right of the depositors and the ability of RNBC to pay back the contractual liability.
It also intended to prevent mismanagement of the deposits collected from vulnerable social segments who have no knowledge of banking operations or credit system and repose unfounded blind faith on the company with fond hope of its ability to pay back the contracted amount.
Thus the directions maintain 418 the thrift for saving and streamline and strengthen the monetary operations of RNBCs.
[463 E G]
|
it Petitions Nos.
9057 of 1982, 318 319 of 1980, 1406 07 of 1981, 782 of 1980, 1264 of 1979, 450, 5798, 5799 of 1980, 2254 60, 4715 17, 7636, 8190 of 1981, 2250, 3478, 5455, 3479, 5518, 7220 of 1982, 608, 609 of 1983, 55 57 of 1977, 362, 401, 670 71, 672 75, 1191 96, 1534 36, 1539 of 1977, 3768 69, 4196 of 1978, 280, 789 92, 1981 82, 1083 84 of 1979, 233 241, 2201 of 1981, 3300, 3316, 3317, 3318, 3325, 3326, 3327 of 1982, 4389 90 and 4562 72 of 1978.
Under Article 32 of the Constitution of India.
M.N. Phadke, U.R. Lalit, S.B. Bhasmi, Smt, Santosh Gupta, H. G. Gupta, Snrwa Mitter, K.C. Dua, M.P. Jha, Dr. N.M. Ghatate S Y. Deshpaade, S.B. Saharya, Vishnu B. Saharya, G. section Jetely and Ram Lal for the Petitioners.
L N, Sihna, Attorney General, P.P. Singh, Miss A. Subhashini, R.N. Poddar, Gopal Subramanium, D.P. Mohanti, S.A. Shroff, D.D. Sharma, V.B. Joshi and M.N. Shroff for the Respondents.
204 The Judgment of the Court was delivered by VENKATARAMIAH, J.
The petitioners in these two batches of petitions filed under Article 32 of the Constitution have questioned the Constitutional validity of sub section (2 A) of section 9 of the (Act No. 74 of 1956) (hereinafter referred to as 'the Act ') as amended by the Central Sales Tax (Amendment) Act, 1976 (Act No. 103 of 1976) hereinafter referred to as 'the Amending Act ') and section 9 of the Amending Act Validating the levy of penalties under the Act with retrospective effect.
The petitioners are dealers under the Act having their places of business in the States of Maharashtra, Haryana, etc.
For the purpose of understanding the points of dispute raised in these cases, it is necessary to deal with the history of the legislation relating to taxes on inter State Sales and purchases of goods during the post Constitution period.
Under Entry 54 of List II of the Seventh Schedule to the Constitution, the power to levy tax on sale or purchase of good other than newspapers was assigned to the State Legislature.
The power to levy taxes on the sale or purchase of newspapers and on advertisements published therein was, however, assigned to Parliament under Entry 92 of List I of the Seventh Schedule to the Constitution.
Article 286 (as it was originally enacted) of the Constitution which imposed certain restrictions on a State in the matter of levy of tax on the sale or purchase of goods read as follows: "286.
(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place (a) outside the State; or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India.
Explanation.
For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered 205 as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State.
(2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of any goods where such sale or purchase takes place in the course of inter State trade or commerce: Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution shall, notwithstanding that the imposition of such tax is contrary to the provisions of this clause, continue to be levied until the thirty first day of March, 1951.
(3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax on the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent.
" The true effect of the above Article on inter State sales and purchases of goods was considered by this Court in the State of Bombay & Anr.
vs The United Motors (India) Ltd. & Ors(1).
In that case this Court held that Article 286 (1) (a) of the Constitution read with the Explanation thereto and construed in the light of Article 301 and Article 304 of the Constitution prohibited the taxation of sales or purchases involving inter State elements by all States except the State in which the goods were delivered for the purpose of consumption therein.
In other words it was held that in the case of inter State sales, the importing State alone was competent to levy tax on transactions of sale under its sales tax law on persons who were, 206 resident outside its territory provided the goods were delivered in the importing State for the purpose of consumption therein.
The result of this decision was that a dealer carrying on business in the exporting State became amenable to the sales tax law of the importing State in which the goods were consumed.
This question was again reconsidered in The Bengal Immunity Company Ltd. vs The State of Bihar & Ors.(1) In that case, this Court held that a reading of clause (1) (a) read with the Explanation, clause.(1) (b), clause (2) and clause (3) of Article 286 showed that those clauses were intended to deal with different topics and one could not be projected or read into the other and, therefore, the Explanation to clause (!) could not be legitimately extended to clause (2) either as an exception or as proviso to it or read as curtailing or limiting clause (2).
Consequently it was held that the State of Bihar could not levy sales tax under its law on goods which were subject matt r of inter State sales even though they had been consumed in that State in the absence of a law made by Parliament as provided in clause (2) of Article 286.
This judgment Was delivered on September 6, 1955 and the view expressed in this case was further reiterated in M/s Ram Narain Sons Ltd. v, Asst.
Commissioner of Sales Tax & Ors.(3) which was decided on September 20, 1955.
The result was that no State could levy sales tax on inter State sales as there was no central legislation authorising it This judgment caused a serious financial disequilibrium on the budgets of the several States which had collected sales tax in accordance with the decision in the case of United Motors (supra) as they had to refund all the taxes so collected from the non resident traders.
This situation was met by the President promulgating ordinance No. III of 1956 which was later on replaced by the Sales Tax Laws Validation Act, 1956 (Act VII of 1956), whereby all collections of sales tax on inter State sales by the States upto September 6, 1955 were validated and proceedings in respect of the levy on inter State sale.
for assessment were also protected.
Later on in the light of the report of the Taxation Enquiry Commission, the Constitution itself was amended by the Constitution (Sixth Amendment) Act, 1956 by introducing Entry 92 A in the Union List, substituting Entry 54 in the State List by a new Entry and by amending Article 269 and Article 286.
Entry 92 A in the Union List reads: 207 "92 A. Taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce".
Entry 54 in the State List now reads: "54.
Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92 A of List I." The taxes levied on the inter State sales and purchases by the Central Government under a law made pursuant to the new Entry 92 A came to be assigned to the States in the manner provided in clause (2) of Article 269 by the inclusion of sub clause (g) in clause (1) of Article 269 and under the new clause i.e. clause (3) added to Article 269, Parliament was empowered to formulate principles for determining when a sale or purchase of goods took place in the course of inter State trade or commerce.
After amendment the relevant part of Article 269 of the Constitution reads: "269.
(1) The following duties and taxes shall be levied and collected by the Government of India but shall be assigned to the States in the manner provided in clause (2), namely 13 . . . (g) taxes on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce. . . (3) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in the course of inter State trade or commerce." In Article 286 of the Constitution, the Explanation to clause (1) was omitted and clauses (2) and (3) were substituted by new clauses (2) and (3) Article 286 now reads as follows: "286.
(1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place 208 (a) outside the State; or (b) in the course of the import of the goods into, or export of goods out of, the territory of India.
(2) Parliament may by law formulate principles for determining when a sale or purchase of goods take place in any of the ways mentioned in clause (1).
(3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax on the sale or purchase of goods declared by Parliament by law to be of special importance in inter State trade or commerce be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.
" Accordingly the Act was passed in.
It has been amended a number of times since then.
The Preamble to the Act states that the object of the Act is to formulate principles for deter mining when a sale or purchase of goods takes place in the course of inter State trade or commerce or outside a State or in the course .
Of import into or export from India, to provide for the levy, collection and distribution of taxes on sales of goods in the course of inter State trade or commerce and to declare certain goods to be of special importance in inter State trade or commerce and specify the restrictions and conditions to which State laws imposing taxes on the sales or purchase of such goods of special importance shall be subject.
The expression 'dealer ' is defined in section 2(b) of the Act and the expression 'sale ' is defined in section 2(g) thereof.
Section 3 of the Act lays down the principles with reference to which the question whether a sale or purchase of goods has taken place in the course of inter State trade or commerce or not can be determined.
Section 4 of the Act provides for determining when a sale or purchase of goods is deemed to take place outside a State and section 5 of the Act lays down the principles governing the determination of the question whether a sale or purchase has taken place in the course of export or import.
Section 6 of the Act is the charging section.
Sub section (1) and (l A) of section 6 of the Act which are material for purposes of this case read as follows: "6.
Liability to tax on inter State sales.
209 (1) Subject to the other provisions contained in this Act every dealer shall, with effect from such date as the A Central Government may, by notification in the official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax under this Act on all sales of goods other than electrical energy effected by him in the course of inter State trade or commerce during any year on and from the date so notified.
Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which in accordance with the provisions of sub section (3) of section 5, is a sale in the course of export of those goods out of the territory of India.
(1 A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of inter State trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State." Sub section (2) of section 6 of the Act deals with the circumstances when certain inter State sales or purchases will be exempt from the liability imposed under sub sections (1) and (1 A) of section 6.
Section 6 A of the Act deals with the burden of proof in the proceedings under the Act.
Section 7 of the Act provides for registration of dealers, section 8 specifies the rates of tax on sales in the course of inter State trade or commerce and section 8 A lays down the rules relating to determination of turnover.
Section 9 of the Act which has undergone a number of changes provides for assessment, collection etc.
Of the levy made under the Act.
By reason of the retrospective amendment made by the Central Sales Tax Amendment Act 28 of 1969, section 9 (with effect from the commencement of the Act) read as follows: "9.
Levy and collection of tax and penalties (1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the 210 Government of India and the tax so levied shall be collected by that Government in accordance with the t provisions of sub section (2), in the State from which the movement of the goods commenced: Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods, the tax shall, where such sale does not fall within sub section (2) of section 6, be levied and collected in the State from which the registered dealer effecting the subsequent sale obtained or, as the case may be, could have obtained the form prescribed for the purposes of clause (a) of sub section (4) of section 8 in connection with the purchase of such goods.
(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time .
being empowered to assess, re assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of Government of India, assess, reassess, collect and enforce.
payment of tax, including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty payable under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, pro visional assessment, advance payment of tax, registration 1 ' of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly.
Provided that if in any State or part thereof there is no general sales tax law in force, the Central Govern 211 ment may by rules made in this behalf make necessary provision for all or any of the matters specified in this sub section.
(3) The proceeds in any financial year of any tax, including any penalty, levied and collected under this Act in any State (other than a union territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it and the proceeds attributable to Union territories form part of the Consolidated Fund of India." (Underlining by us) It is seen from sub section (2) of section 9 quoted above that the authorities empowered to assess, reassess, collect and enforce payment of any tax under the general sales tax law of the appropriate State are authorized to assess, ' reassess and enforce payment of tax including any penalty payable by a dealer under the Act.
The authorities under the General sales tax law of the State have thus been made the agents of the Union Government in discharging the duties of assessment etc.
referred to in section 9(2) of the Act, and empowered to exercise all Dr any of the powers they have under the general sales tax law of the State for the aforesaid purposes.
Section 9(2) further provides that the provisions of the general sales tax law of the State concerned including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of dissolution of any firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, penalties, compounding of offences and treatment of documents furnished by a dealer as confidential shall apply accordingly to the proceedings under the Act.
The proviso to sub section (2) of section 9 of the Act provides that if in any State or part thereof there is no general sales tax law in force, the Central Government may by rules made in this behalf make necessary provision for all or any of the matters specified in that sub section.
Sub section (3) of section 9 of the Act virtually carries out the intention of Article 269 of the Constitution by providing that the proceedings in any financial year of any tax, including any penalty levied and collected under the Act in any State (other than a Union 212 Territory) on behalf of the Government of India shall be retained by it.
It may be mentioned here that there was no express provision in the Act itself authorizing the levy of any penalty for delay or default in payment of the tax due under the Act or for other breaches of the general sales tax laws of the States in so far as they were adopted by section 9(2) of the Act as part of the machinery under the Act.
But it was understood by all the sales tax authorities in the States who were authorized to exercise power under section 9(2) that penalty could also be collected by them in accordance with the provisions of the general sales tax of the appropriate State in order to enforce the provisions of the Act including collection of tax thereunder.
In Khemka & Co. vs State of Maharashtra(1) which was a case heard by a Bench of five learned Judges of this Court, an assessee under the Act who was a resident of the State of Maharashtra contended that the levy of penalty under section 16(4) of the Bombay Sales Tax Act for delay or default in payment of tax due under the Act was not warranted by the provisions of section 9(2) of the Act.
There were three opinions expressed in that case.
A. N. Ray, J. with whom Khanna, J. agreed held that a penalty not being merely a sanction or an adjunct to or consequential to an assessment and not being just a machinery to enforce payment of a tax but in reality was a statutory liability in the absence of any express provision of levy of penalty for delay or default in payment of the tax under the Act, it was not open to the authorities under the State law to levy and recover penalty for delay or default in payment of tax under the Act.
Mathew, J. with whom Chandrachud, J. (as he then was) agreed took a contrary view holding that if for enforcing payment of tax due under the general sales tax law of the appropriate State the authorities thereunder had power to impose penalty, they had the same power of imposing penalty for enforcing.
payment of tax payable under the Act in accordance with the general sales tax law of the State.
While the existence of specific provision for levy of penalty under section 10 read with section 10 A of the Act was relied on by A. N. Ray, C.J. in support of his view, the said provisions were explained by Mathew, J. by observing that the penalties provided for in section 10 read with section 10 A of the Act were not for the purpose of or in connection with assessment, reassessment, collection and enforcement of payment of tax payable by a dealer under the Act.
Beg, J. (as he then was) by his separate judgment concurred with the view of A. N Ray, C.J. The result was that 213 the penalty levied against the appellant was held to be unsustainable in accordance with the opinion of the majority.
Consequently section 9 came to be amended by the Amending Act which was published in the Gazette of India on September 9, 1976 introducing sub section (2 A) in it.
We are not concerned with the other amendments made by the Amending Act in this case.
Sub section 2 A of section 9 which was introduced by the Amending Act reads: "(2 A).
All the provisions relating to offences and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in sections 10 and 10A) of the general sales tax law of each State shall with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, reassess ment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.
" Sub section (1) of section 9 of the Amending Act contains a validating provision.
Section 9 of the Amending Act declared that the provisions of section 9 of the Act would have effect and should be deemed always to have had effect in relation to the period commencing from January S, 1957 and ending with the date immediately preceding the date of commencement of the Amending Act as if section 9 of the Act also provided (a) that all the provisions relating to penalties (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishment on conviction for an offence but excluding the provisions relating to matters provided for in sections 10 and 10A of the principal Act and the provisions relating to offences) of the general sales tax law of each State shall, with necessary modifications, apply in relation to (i) the assessment, re assessment, collection and enforcement of payment of any tax required to be collected under the principal Act in such State; and 214 (ii) any process connected with such assessment, reassessment, collection or enforcement of payment; and (b) that for the purposes of the application of the prosisions of such law, the tax under the principal Act shall be deemed to be tax under such law, Sub section (2) of section 9 of the Amending Act validated all actions taken in connection with the levy of penalties by declaring that notwithstanding anything contained in any judgment, decree or order of any court or tribunal or other authority, all penalties under the general sales tax law of any State imposed or purporting to have been imposed in pursuance of the provisions of section 9 of the Act and all proceedings acts or things taken or done for the purpose of, or in relation to the imposition or collection of such penalties before the commencement of the Amending Act should for all purposes be deemed to be and to have always been imposed.
taken or done as validly and effectively as if the provisions of sub section (1) had been in force when such penalties were imposed or proceedings or acts or things were taken or done and accordingly (a) no suit or other proceedings shall be maintained or continued in or before any court or any tribunal or other authority for the refund of any amount received or realised by way of such penalty; (b) no court, tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realised by way of such penalty; (c) where any amount which had been received or realised by way of such penalty had been refunded before the commencement of this Act and such refund would not have been allowed if the provisions of sub section (1) had been in force on the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the Act; (d) any proceeding, act or thing which could have been validly taken, continued or done for the imposition of such penalty at any time before the commencement of this Act if the provisions of sub section (1) had then been in force but which had not been taken, 215 continued or done, may after such commencement be taken, continued or done.
Sub section (3) of section 9 of the Amending Act provided that nothing in section 9 (2) there of should be construed as preventing any person from questioning the imposition or collection of any penalty or any proceeding, act or thing in connection therewith or from claiming any refund in accordance with section 9 of the Act.
The Explanation to this sub section provided for the exclusion of the period between February 27, 1975 and the date of the commencement of the Act in computing the period of limitation for questioning the penalty.
Sub section (4) of section 9 of the Amending Act validated the levy of interest on arrears of sales tax also.
These petitions are filed after the Amending Act came into force.
In support of these petitions the petitioners have urged the following contentions: 1.
that the introduction of sub section (2 A) in section 9 of the Act does not have the effect of making the provisions relating to penalt ies leviable under the general sales tax laws of the States applicable to the proceedings under the Act, 2.
that the Parliament cannot adopt the provi sions relating to penalties in the general sales tax laws, of the States for enforcing the charge under the Act, as such a course would amount to an abdication of its essential legislative function by Parliament; 3 that the provision giving retrospective effect to sub section (2 A) of section 9 of the Act and the provision validating all the penalties levied prior to the coming into force of the Amending Act are violative of clause (1) of Article 20 of the Constitution; 4.
The levy of penalties with retrospective effect is also violative of Article 19 (1) (f) and (g) of the Constitution; and 216 5.
that in the case of assessees of the State of Haryana it is urged that section 48 of the Haryana General Sales Tax is void as it confers arbitrary and unguided power on the authorities to levy penalties.
We shall consider these contentions seriatim.
The first contention urged on behalf of the petitioners is that the lacuna in the Act which was pointed out by this Court in Khemaka 's case (supra) namely that there was no specific provision levying penalties in the Act as it stood before its amendment in 1976 remains unfilled up even now and hence no penalties can be recovered by utilising the provisions of the general sales tax laws of the respective States.
This argument is based upon the language of subsection (2.A) of section 9 of the Act which is extracted above.
lt is contended that the words "(A) 11 the provisions relating to offences and penalties. of the general sales tax law of each State shall with necessary modifications apply in relation to the assessment, re assessment, collection and the enforcement of payment of any tax required to be collected under this Act . " are insufficient to make the provisions relating to penalties in the State laws applicable to the assessees under the Act as the word 'penalties ' is not found alongwith the words assessment, reassessment, collection and the enforcement of payment of any tax '.
The argument is misconceived.
The principal object of the Act is not the levying of penalties.
Its object is assessment, reassessment, collection and the enforcement of payment of central sales tax.
The assessment incur the liability to pay penalties on account of certain acts or omissions committed by them at the various stages specified above, namely, assessment, reassessment, collection and the enforcement of payment of tax.
The inclusion of the word 'penalties ' alongwith these four stages would have, therefore, been redundant apart from being inappropriate.
Sub section (2 A) of section 9 of the Act expressly makes all the provisions relating to offences and penalties which are committed or incurred, as the case may be, under the general sales tax laws of the respective States, applicable to persons who commit corresponding acts and omissions at the above mentioned stages under the Act.
To illustrate, if a person is liable to pay any penalty for not filing a return required to be filed by him under the general sales tax law of a State, a person who is similarly required to file a return under the Act incurs the penalty for not filing a return and the measure of penalty is the same as under the State law.
If a person is liable to 217 pay penalty at a particular rate in addition to the tax for not paying any part of the tax due under a State law within the specified time, a person liable to pay tax under the Act becomes liable to pay the penalty at the same rate if he commits default in paying the tax due under the Act.
We do not, therefore, find any lacuna in the language of sub section (2 A) of section 9 of the Act which makes the provisions relating to penalties under the general sales tax laws of the respective States inapplicable even now to the proceedings under the Act.
While sub section (2 A) of section 9 of the Act makes the provisions relating to both offences and penalties in the general sales tax laws of States applicable to the proceedings under the Act prospectively, section 9 of the Amending Act makes all the provisions relating to penalties only in the general sales tax laws of the States applicable to the proceeding under the Act retrospectively by adopting the same language appearing in subsection (2 A) of section 9 of the Act.
This pattern of legislation had to be adopted perhaps because Parliament wished rightly not to give retrospective effect to the provisions relating to offences also which are referred to in sub section (2 A) of section 9.
Having thus given retrospective effect to section 2 A of section 9 with effect from January 5, 1957 in so far as penalties were concerned by enacting sub section (1) of section 9 of the Amending Act, Parliament removed the deficiency pointed out in Kheamaka 's case (supra) in the Act.
In view of the retrospective amendment, the basis of the judgment in Kheamka 's case (supra) was also removed.
Consequently the judgment delivered in that case could not stand in the way of realisation of penalties in accordance with the validating provisions of section 9 (2) of the Amending Act We are of the view that sub section (2 A) of section 9 of the Act and section 9 of the Amending Act are adequate enough to assess and realise penalties with effect from January 5, 1957 as contemplated therein.
We, therefore, hold that there is no substance in this contention of the petitioners.
The second point urged on behalf of the petitioners is that sub section (2 A) of section 9 of the Act suffers from the vice of excessive delegation of legislative power.
It is argued that Parliament by adopting the provisions relating to offences and penalties referred to in the various general sales tax laws of the States has abdicated its essential legislative function.
The question whether there has been excessive delegation or abdication of legislative power has to be decided on the meaning of the words in the statute and the policy behind it.
In the instant case, Parliament has not authorised the State Legislatures to make laws in respect of 218 offences and penalties that may be leviable under the Act.
What is done by Parliament by enacting sub section (2 A) of ' section 9 is that whatever provisions relating to offences and penalties were there in the general sales tax laws of the States would be applicable with appropriate modification to assessment, reassessment, collection and enforcement or the provisions of the Act.
Legislation by incorporation of provisions of another statute ever.
though passed by a different legislature is a well known method of legislation which does not affect the validity of the legislation particularly when the scheme of the other statute is similar and such incorporation is relevant and necessary for the purpose of advancing the objects and purposes of the legislation.
In the instant case we should bear in mind the history of the central sales tax legislation and its object and purpose.
The central sales tax levied on inter State sales is assigned under Article 269 of the Constitution to the States who are the true beneficiaries.
The assessees under the Act who are spread over various States are accustomed to the general pattern of sale tax law in their respective States and the various duties and responsibilities of an assessee who is liable to pay sales tax.
The officers who assess and collect the tax under the Act are the officers who discharge similar functions under the State laws.
In this situation if Parliament has, with the knowledge of the various provisions relating to offences and penalties in the general sales tax laws of the various States, adopted them for purposes of assessment, reassessment, collection and enforcement of the provisions of the Act it cannot be said that it has abdicated its legislative functions.
In this connection it is necessary to refer to the decision of this Court in State of Madras vs N. K. Nataraja Mudaliar(1).
In that case one of the contentions raised by the assessee related to the validity of section 8 of the Act as amended by Central Act 31 of 1958.
By sub section (1) of section 8 every dealer who in the course of inter State trade or commerce sold to the Government any goods or to a registered dealer, other than the Government, goods of the description referred to in sub section (3) of section 8 was liable to pay tax under the Act at the rate of one per cent of his turnover.
Under sub section (2) of section 8 the tax payable on the turnover relating to inter State sales not falling under sub section (1) of section 8 was (a) in the case of declared goods, to be computed at the rate applicable to the sale or purchase of such goods inside the appropriate State and (b) in the case of goods other than declared goods at the rate of seven per cent or at the rate 219 applicable to the sale or purchase of such goods inside the appropriate State whichever was higher.
Sub section (2 A) Of section 8 of the Act provided that notwithstanding anything contained in subsection (1) or sub section (2), if under the sales tax law of the appropriate State the sale or purchase, as the case may be, of any goods by a dealer was exempt from tax generally or subject to tax generally at a rate which was lower than one per cent (whether called a tax, a fee or by any other name) the tax payable under the Act on his turnover in so far as the turnover or any part thereof related to the sale of such goods should be nil or as the case might be, should be calculated at the lower rate.
The Explanation to sub section 2 A of section 8 provided that for the purpose of that sub section, a sale or purchase of goods should not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that it was exempt only in specified circumstances or under specified conditions or in relation to which the tax was levied at specified stages or otherwise than with reference to the turnover of goods.
Justifying the varying rates of tax under subsection (2) and (2 A) of section 8 depending upon the rates of tax levied in different States, Shah, J. Observed at pages 844 846 thus: "The rates of tax in force at the date when the was enacted have again not become crystalised The rate which the State Legislature determines, subject to the maximum prescribed for goods referred to in s 8 (1) and (2) are the operative rates for those transactions: in respect of transactions falling within s 8 (2) (b) the rate is determined by the State rate except where the State rate is between the range of two and seven per cent.
The rate which a State legislature imposes in respect of inter State transactions in a particular commodity must depend upon a variety of factors.
A State may be led to impose a high rate of tax on a commodity either when it is not consumed at all within the State, or if it feels that the burden which is falling on consumers within the State will be more than offset by the gain in revenue ultimately derived from outside consumers.
The imposition of rates of sales tax is normally influenced by factors political and economic.
If the rate is so high as to drive away prospective traders from purchasing a commodity and to resort to other sources of supply, in its own interest the State will adjust 210 the rate to attract purchasers .
Again, in a democratic constitution political forces would operate against the levy of an unduly high rate of tax.
The rate of tax on sales of a commodity may not ordinarily be based on arbitrary considerations but in the light of the facility of trade in a particular commodity, the market conditions internal and external and the likelihood of consumers not being scared away by the price which includes a high rate of tax.
Attention must also be directed to sub section
(S) of section 8 which authorises the State Government, notwithstanding anything contained in section 8 in the public interest to waive tax or impose tax on sales at a lower rate on inter State trade or commerce.
It is clear that the legislature has contemplated that elasticity of rates consistent with economic forces may be maintained.
Prevalence of differential rates of tax on sales of the same commodity cannot be regarded in isolation as determinative of the object to discriminate between one State and another.
Under the Constitution as originally framed, revenue from sales tax was reserved to the States.
But since the power of taxation could be exercised in a manner prejudicial to the larger public interests by the States it was found necessary to restrict the power of taxation in respect of transactions which had an inter State content.
Amendment of article 286 and the enactment of the Sales Tax Validation Act 1956, and the , were all intended to serve a dual purpose: to maintain the source of revenue from sales tax to the States and at the same time to prevent the States from subjecting transactions in the course of inter State trade so as to obstruct the free flow of trade by making commodities unduly expensive.
The effect of the Constitutional provisions achieved in a somewhat devious manner is still clear, viz. to reserve sales tax as a source of revenue for the States.
The is enacted under the authority of the Union Parliament, but the tax is collected through the agency of the State and is levied ultimately for the benefit of the States and is statutorily assigned to the States.
That ii clear from the amendments made by the Constitution (Sixth Amendment) Act, 1956, in article 269, and the 221 enactment of cls.
(1) & (4) of section 9 of the .
The Central sales tax though levied for and collected in the name of the Central Government is a part of the sales tax levy imposed for the benefit of the States.
By leaving it to the States to levy sales tax in respect of a commodity on intra State transactions no discrimination is practised: and by authorising the State from which the movement of goods commences to levy on transactions of sale Central sales tax, at rates prevailing In the State, subject to the limitation already set out, in our judgment, no discrimination can be deemed to be practised.
In Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. vs The Asst.
Commissioner of Sales Tax & ors.(1) this Court had to consider whether section 8 (2) (b) of the Act suffered from the vice of excessive delegation.
The material part of section 8(2) (b), as it stood then, provided that the tax payable by any dealer on his turnover in so far as it related to the sale of goods in the course of inter State trade or commerce not falling within sub section (1) thereof and In case of goods other than declared goods should be calculated at the rate often per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State whichever was higher.
The provision meant that while the tax due on the sale of the goods in question could not be less than ten per cent of the turnover, it could be any amount higher than that as might be determined by a State Legislature in respect of the intra State transactions of sales or purchases of the said goods.
In the above case there were two judgments both upholding the validity of the impugned provision.
The majority judgment delivered by Khanna, J. saw that there was a legislative policy behind the provision, namely, that the rate of sales tax on the goods in question should be not less than ten per cent but in any event should be the same as the local sales tax for the said goods.
Khanna, J., however, held that it was not possible to accept that the view that the legislature would not be abdicating its essential legislative function merely because it could always repeal the law delegating legislative power to another authority.
The minority view expressed by Mathew, J., however, differed from 222 Khanna, J on the above point, but agreed with the conclusion of the majority on the validity of the impugned provision.
A reading of the above decision shows that the question of valid delegation of legislative power requires to be further examined by this Court in view of a subsequent decision of this Court in M. K. Papiah & Sons.
vs The Excise Commissioner & Anr.(1) in which we do not find any reference at all to the case of Gwalior Rayon Silk Mfg. Wvg.
Co. (supr a).
Even so, so far as the present case is concerned, judging it in the light of either of the two views, it has to be held that subsection (2 A) of section 9 of the Act does not suffer from the vice of excessive delegation merely because the provisions relating to penalties in the general sales tax laws of the States are adopted for purposes of the Act.
It may be true that the circumstances leading to imposition of penalties and the rates of penalties vary from one State to the other but the power to make a legislative provision on matters relating to penalties is circumscribed by various economic factors and it cannot be said that Parliament has virtually surrendered its legislative judgment to the State legislatures.
There is clear legislative policy adopted by Parliament in the case of levy of penalties and that is that penalties payable under the Act should be the same as the penalties payable under the general sales tax law of each State.
If the rates of penalties exceed reasonable limits the States which are the beneficiaries of the tax collected under the Act themselves suffer as such unreasonable levy is bound to lead to the killing of the goose which lays the golden egg.
The trade would immediately shift to areas outside the State which resorts to higher taxes and penalties The political and economic factors which operate in this field are so powerful that the provisions with regard to penalties to be made by the State Legislature cannot but be reasonable as they would affect the levy of tax under the State Act also.
The penal nature of the penalties itself is a sufficient guidance regarding maximum limits upto which penalties can be levied.
A penalty cannot be wholly disproportionate to the extent of infringement of law.
Moreover Parliament always has the power to amend its own i. e. the Act if it finds that the provisions relating to penalties in any State law cross the limits of public interest.
It is of interest to note here that in the case of M.K. Papiah & sons (Supra) it was held that the existence of the power to repeal or modify its own law in order to bring a piece of 223 delegated legislation in accord with its own legislative will should be considered as an effective check on the misuse of legislative power by the delegate.
The power of Parliament to remedy a situation created by the levy of penalties by the general sales tax laws of States not in consonance with its own pleasure is also an answer to the criticism that Parliament has effaced itself in enacting sub section (2 A) of section 9 of the Act.
As long as such power is intact and can be exercised whenever Parliament wishes to take the matter directly into its own hands, there cannot be a total effacement of the legislative power of Parliament.
The above view receives support from the following passage in "Australian constitutional Law" by Fajgenbaum & Hanks (Second Edition) at page 202: "3,009 . . . . .
Parliament can delegate to the Crown, or to any servant of the Crown, the power to demand the payment of taxes, including the power to fix the rate of taxation.
A clear illustration is provided by the provisions of the State Transport Facilities Act 1947 (Qld) and the State Transport Act 1960 (Qld) which gave to a commissioner for transport very broad powers to license services for the carriage of passengers and goods and to fix the amount of licence fee to be paid by every licencee The validity of these provisions was up held by the Privy Council in, Cobb & Co. Ltd. vs Kropp , rejecting an argument that Queensland Parliament had no power to abrogate its taxing power in this way: In their Lordships ' view the Queensland legislature were fully warranted in legislating in the terms of the Transport Acts now being considered.
They preserved their own capacity intact and they retained perfect control over the commissioner for transport in as much as they could at any time repeal the.
legislation and withdraw such authority and discretion as they had vested in him.
It cannot be asserted that there was a levying of money by pretence of prerogative without grant of Parliament or without parliamentary warrant.
The legislature were entitled to use any agent or any subordinate agency or any machinery that they considered appropriate for carrying out the objects and purposes that 224 they had in mind and which they designated.
They were entitled to use the commissioner for transport as their instrument to fix and recover the licence and permit fees (1967) 1 AC at 156, 157.
" We feel that even applying the rule in the Gwalior Rayon Silk Mfg.
(Wvg.) Co. 's case (supra), it cannot be said that sub section (2 A) of section 9 suffers from the vice of excessive delegation of legislative power having regard to the nature of that provision.
We shall now proceed to consider the question whether by reason of retrospective effect having been given to sub section (2 A) of section 9 of the Act in so far as penalties are concerned by enacting section 9 of the Amending Act Parliament has contravened Article 20 (1) of the Constitution.
In order to make good the deficiency in the Act pointed out by the majority judgment in Khemka 's case (supra) the validating provision contained in section 9 of The Amending Act provided in substance that in so far as penalties were concerned sub section (2 A) of section 9 should be deemed to have had effect in relation to the period commencing on January 5, 1957 and ending with the date immediately preceding the date of commencement of the Amending Act.
That is obvious from the similarity of the language between sub section (2 A) of section 9 of the Act and section 9 (1) of the Amending Act.
Section 9 (2) of the Amending Act also contained the usual provision validating the levy of penalties completed prior to the commencement of the Amending Act and authorising the continuance of the. proceedings for levy of penalties in respect of the period commencing from January 5, 1957.
In the instant case it may be noted that in all the general sales tax laws of the States, there were provisions requiring every dealer to comply with statutory requirements such as the filing of returns, the payment of the tax due within the specified time etc.
and they were applicable to the dealers under the Act by reason of section 9 (2) of the Act.
Notwithstanding such statutory provisions many dealers failed to perform their statutory duties.
They would have been liable to penalties mentioned in the relevant statutory provisions if the defaults committed by them were those committed under the said statutory provisions on the basis of the language of sub section 1.1 (2) of section 9 of the Act in many States proceeding for levying penalties in accordance with the provisions relating to penalties in their respective general sales tax laws were commenced against such defaulters under the Act and in some cases proceeding were completed 225 and penalties were also recovered.
Some High Courts also took the view that such penalties were validly leviable.
But ultimately this Court by a majority of three to two held in Khemka 's case (supra) that since there was no express provision in the Act permitting the levy of such penalties, the proceedings relating to the determination and recovery of penalties were not valid.
The Amending Act was, therefore, passed expressly to make the levy of penalties as per the general sales tax laws in force in the States permissible with retrospective effect and also to validate all such previous proceedings.
Article 20 of the Constitution reads thus: "20.
(1) 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.
(2) No person shall be prosecuted and punished for the same offence more than once.
(3) No person accused of any offence shall be compelled to be a witness against himself.
" The contention of the petitioners is that any act or omission which is considered to be a default under the Act for which penalty is leviable is an offence, that such act or omission was not an offence and no penalty was payable under the law in force at the time when it was committed and hence they cannot be punished by the levy of penalty under a law which is given retrospective effect.
They principally rely on Article 20 (1) in support of their case article 20 (1) is modelled on the basis of section 9 (3) of Article 1 of the Constitution of the United States of America which reads: "No bill of attainder or ex post facto law shall be passed".
This clause has been understood in the United States of America as being applicable only to legislation concerning crimes.
(See Calder vs Bull ; (1798)).
The expression 'offence ' is not defined in the Constitution.
Article 367 of the Constitution says that unless the context otherwise provides for words which are not defined in the Constitution, the meaning assigned in the may be given.
Section 3 (38) of the defines 'offence ' as any act or omission made punishable by any law for the time being in force, 226 The marginal note of our Article 20 is 'protection in respect of conviction for offences '.
The presence of the words 'convition ' and 'offences ', in the marginal note 'convicted of an offence ', 'the act charged as an offence ' and 'commission of offence ' in clause (1) of Article 20, 'prosecuted and punished ' in clause (2) of Article 20 and 'accused of an offence ' and 'compelled to be a witness against himself ' in clause (3) of Article 20 clearly suggests that Article 20 relates to the constitutional protection given to persons who are charged with a crime before a criminal court.
(See H.M. Seervai: Constitutional Law of India (3rd Edition) Vol. 1, page 759).
The word 'penalty ' is a word of wide significance.
Sometimes it means recovery of an amount as a penal measure even in a civil proceeding.
An exaction which is not of compensatory character is also termed as a penalty even though it is not being recovered pursuant to an order finding the person concerned guilty of a crime.
In Article 20 (1) the expression 'penalty ' is used in the narrow sense as meaning a payment which has to be made or a deprivation of liberty which has to be suffered as a consequence of a finding that the person accused of a crime is guilty of the charge.
In Maqbool Hussain vs The State of Bombay.(1) the question for consideration was whether when the customs authorities confiscated Certain goods under the Sea Customs Act there was a prosecution and the order of confiscation constituted a punishment within the meaning of clause (2) of Article 20.
Negativing the said plea, the Court observed at pages 738 739: "The very wording of article 20 and the words used therein: " convicted "commission of the act charged as an offence", "be subjected to a penalty", "commission of the offence ', "prosecuted and punished", "accused of any offence", would indicate that the proceedings therein contemplated are of the nature of criminal proceedings before a court of law or a judicial tribunal and the pro secution 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 which creates the offence and regulates the procedure." 227 The levy of charges for 'unauthorised use ' of water enforced with retrospective effect was held to be not offending Article 20 (1) in Jawala Ram vs State of Pepsu.(1) Similarly in State of West Bengal vs S.K Ghosh.(2) the forfeiture provided under section 13 (3) of the Criminal Law Amendment ordinance 1944 (38 of 1944) was held to be not a penalty within the meaning of Article 20 (1) of the Constitution and in that connection this Court observed at pages 130 131 thus: "Article 20 (1) deals with conviction of persons for offences and for subjection of them to penalties.
It provides firstly that "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".
Secondly, it provides that no person shall 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".
Clearly, therefore, Art.20 is dealing with punish ment for offences and provides two safeguards namely.
(1) that no one shall be punished for an act which was not an offence under the law in force when it was committed, and (ii) that no one shall be subjected to a greater penalty for an offence than what was provided under the law in force when the offence was committed.
The provi sion for forfeiture under section 13(3) has nothing to do with the infliction of any penalty on any person for an offence.
If the forfeiture provided ins.
13(3) were really a penalty on a convicted person for commission of all offence we should have found it provided in the 1943 ordinance and that penalty of forfeiture would have been inflicted by the criminal court trying the offender." Again while upholding section 25 FFF(1) (which came into force on June 6, 1957) of the which directed compensation to workers who had been retrenched earlier on and after November 28, 1956, this Court observed in Hatisingh Mfg. Co. Ltd. & Anr.
vs Union of India & ors.(3) at pages 536 and 545 thus: 228 "A law which creates a civil liability in respect of a transaction which has taken place before the date on which the Act was enacted does not per se impose an unreasonable restriction (page 536) If the statute fixes criminal liability for contravention of the prohibition or the command which is made applicable to transactions which have taken place before the date of its enactment the protection of article 20(1) may be attracted.
By section 33(c) liability to pay compensation may be enforced by coercive process, but that again does not amount to infringement of article 20(1) of the Constitution.
Undoubtedly for failure to discharge liability to pay compensation, a person may be imprisoned, under the statute providing for recovery of the amount, e.g., the Bombay Land Revenue Code, but failure to discharge a civil liability is not unless the statute expressly so provides, an offence.
The protection of article 20(1) avails only against punishment for an act which is treated as an offence which when done was not an offence." (page 545) The petitioners have relied upon certain decisions in support of their contention.
We shall deal with some of them.
It is true that in Rai Bahadur Hurdut Roy Moti Lall Jute Mills vs The State of Bihar & Anr.(1) the High Court of Patna held that the amendment of section 14A of the Bihar Sales Tax Act, 1947 by Bihar Act IV of 1955 in so far as it authorised the imposition of the penalty of forfeiture of the amounts collected earlier by dealers in contravention of the provisions of section 14A, without prejudice to any punishment for an offence under that Act, was violative of Article 20(1) of the Constitution.
We have gone through that decision.
We do not find any tenable reason given by the High Court in support of its view.
It may be added here that in the appeal filed against that decision before this Court in The State of Bihar vs Rai Bahadur Hurdut Roy Moti Lall Jute Mills & Anr.(2) the judgment of the High Court was confirmed on the ground that the penalty of forfeiture was not 229 imposable on the facts of that case, but on the question of the applicability of Article 20(1) to the case, this Court declined to express any opinion on the ground that it was purely an academic issue.
In Shew Bhagwan Goenka vs Commercial Tax officer & ors.(1) the Calcutta High Court observed that the retrospective operation of an amendment to the Bengal Finance (Sales Tax) Act, 1941 which imposed an unexpected liability in respect of certain transactions which when they took place were not subject to any charge or liability under that Act was opposed to Article 20(1) of the Constitution.
In that case the facts were that as a result of the modification of the definition of the word 'business ' with retrospective effect, the assessee became liable to pay tax on the turnover relating to sales of certain old and discarded machineries and equipments.
The assessee had not been prosecuted for any offence or punished by any criminal court as a consequence of such amendment.
It was open to the High Court to hold that if there was any such prosecution for any offence it was violative of Article 20(1).
But in so far as realisation of tax was concerned Article 20(1) did not in terms apply.
Reference to Article 20(1) was, therefore, unnecessary for deciding that case.
The observations made by this Court in Commissioner of Wealth Tax, Amritsar vs Suresh Seth(2) at page 430 to the effect: "In the case of acts amounting to crimes the punishment to be imposed cannot be enhanced at all under our Constitution by any subsequent legislation by reason of Article 20(1) of the Constitution which declares that no person shall 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.
In other cases, however, even though the liability may be enhanced it can only be done by a subs equent law (of course subject to the Constitution) which either by express words or by necessary implication provides for such enhancement," are obviously of no assistance to the petitioners.
On the.
Other hand, a Full Bench of the High Court of Allahabad has held in Raghunandan Prasad Mohan Lal vs Income Tax 230 Appellate Tribunol, Delhi Bench & ors.(1) that Article 20 of the Constitution contemplates proceedings in the nature of criminal proceedings and it does not apply to penalty proceedings under the Income tax Act, 1961 which have a civil sanction and are revenue in nature.
The High Court of Madhya Pradesh has held in Central India Motors vs C. L. Sharma, Assistant Commissioner of Sales Tax, Indore Region, Indore Anr.(2) that Article 20(1) is not attracted to the case of a levy of penalty made with retrospective effect under the Madhya Pradesh General Sales Tax Act, 1958.
After giving an anxious consideration to the points urged before us, we feel that the word 'penalty ' used in Article 20(1) cannot be construed as including a 'penalty ' levied under the sales tax laws by the departmental authorities for violation of statutory provisions penalty imposed by the sales tax authorities is only a civil liability, though penal in character.
It may be relevant to notice that subsection (2 A) of section 9 of the Act specifically refers to certain acts and omissions which are offences for which a criminal prosecution would lie and the provisions relating to offences have not been given retrospective effect by section 9 of the Amending Act.
The argument based on Article 20(1) of the Constitution is, therefore, rejected.
The next point to be considered is whether the imposition and collection of penalty with retrospective effect amounts to an imposition of an unreasonable restriction on the fundamental right of the petitioners to own property and to carry on business guaranteed under Article 19(1) (f) and (g) of the Constitution.
We have already indicated above the circumstances under which it becomes necessary to levy penalties with retrospective effect and to validate all the proceedings relating to levy of penalties and recovery thereof.
The scope of the power of a legislature to make a law validating the levy of a tax or a duty retrospectively was considered by this Court in Chhotabhai Jethabhai Patel & Co. vs The Union of India & Anr.(3) The Court held that Parliament acting within its legislative field had the power and could by law both prospectively and retrospectively levy excise duty under the Central Excises and Salt Act .1944 even where it was established that by reason of the retrospective effect 231 being given to the law, the assessees were incapable of passing on the excise duty to the buyers.
After considering certain American decisions, Ayyangar J. Observed at page 37 thus: "It would thus be seen that even under the constitution of the United States of America the unconstitutionality of a retrospective tax is rested on what has been termed "the vague contours of the 5th Amendment.
Whereas under the Indian Constitution that grounds on which infraction of the rights to property is to be tested not by the flexible rule of "due process" but on the more precise criteria set out in article 19(5).
Mere retrospectivity in the imposition of the tax cannot per se render the Law unconstitutional on the ground of its infringing the right to hold property under article 19(1)(f ) or depriving the person of property under article 31(1).
If on the one hand, the tax enactment in question were beyond legislative competence of the Union or a State necessarily different considerations arise.
Such unauthorised imposition would undoubtedly not be a reasonable restriction on the right to hold property besides being an unreasonable restraint on the carrying on of business, if the tax in question is one which is laid on a person in respect of his business activity.
" The Court was more emphatic in Rai Ramkrishan & ors.
vs The State of Bihar(3) about the power of the legislature in India to enact retrospective taxation laws.
It held that if in its essential features a taxing statute is within the competence of the legislature, it would not cease to be so if retrospective effect is given to it.
A power to make a law, therefore, includes within its scope to make all relevant provisions which are ancillary or incidental to it.
The provision for levying of interest and to levy penalties retrospectively and to validate earlier proceedings under laws which have been declared unconstitutional after removing the element of unconstitutionality is included within the scope of legislative power.
In the above mentioned case of Rai Ramkrishna & ors.
(supra), a Bihar Act levying a tax on passengers and goods passed in 1950 was declared to be unconstitutional by this Court in December, 1960.
An Act validating the said levy after removing constitutional deficiencies in it was passed with 232 the assent of the President in September 23, 1961 and that Act was given retrospective effect from April 1, 1950 on which date the earlier Act which had been declared as unconstitutional had come into force.
The limited challenge mounted against the validating Act was that the provisions contained in section 23(b) thereof which provided that any proceeding commenced or purported to have been commenced for the assessment, collection and recovery of any amount as tax or penalty under the provisions of the earlier Act which had been declared as unconstitutional or the rules made thereunder during the period from April 1, 1950 to July 31, 1961 i.e. till the date on which an ordinance which was replaced by the validating Act in question came into force, should be deemed to have been commenced and conducted in accordance with the provisions of the validating Act and if not already completed should be continued and completed in accordance with the validating Act was opposed to Article 304(b) and Article 19(1)(f ) and (g).
It was urged in that case on the basis of the observation made in Sutherland on 'Statutes and Statutory Constructions ' to the effect that: "Tax statutes may be retrospective if the legislature clearly so intends.
If the retrospective feature of a law is arbitrary and burdensome the statute will not be sustained" that the length of retrospectivity, that is, eleven years was an unreasonable restriction on the rights guaranteed under Article 19(1)(f ) (g).
This contention was rejected by this Court at pages 915 and 916 of the Report as follows: 'We do not think that such a mechanical test can be applied in determining the validity of the retrospective operation of the Act.
It is conceivable that cases may arise in which the retrospective operation of a taxing or other statute may introduce such an element of unreasonableness that the restrictions imposed by it may be open to serious challenge as unconstitutional; but the test of the length of time covered by the retrospective operation cannot, by itself, necessarily be a decisive test.
We may have a statute whose retrospective operation covers a comparatively short period and yet it is possible that the nature of the restriction imposed by it may be of such a character as to introduce a serious infirmity in the 233 retrospective operation.
On the other hand, we may get cases where the period covered by the retrospective operation of the statute, though long, will not introduce any such infirmity.
Take the case of a Validating Act.
If a statute passed by the legislature is challenged in proceedings before a court, and the challenge is ultimately sustained and the statute is struck down, it is not unlikely that the judicial proceedings may occupy a fairly long period and the legislature may well decide to await the final decision in the said proceedings before it uses its legislative power to cure the alleged infirmity in the earlier Act.
In such a case, if after the final judicial verdict is pronounced in the matter the legislature passes a validating Act, it may well cover a long period taken by the judicial proceedings in Court and yet it would be inappropriate to hold that because the retrospective operation covers a long period, therefore, the restriction imposed by it is unreasonable.
That is why we think the test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test.
Take the present case.
The earlier Act was passed in 1950 and came into force on April 1, 1950, and the tax imposed by it was being collected until an order of injunction was passed in the two suits to which we have already referred.
The said suits were dismissed on May 8, 1952, but the appeals preferred by the appellants were pending in this Court until December 12, 1960.
In other words, between 1950 and 1960 proceedings were pending in Court in which the validity of the Act was being examined and if a Validating Act had to be passed, the legislature cannot be blamed.
for having awaited the final decision of this Court in the said proceedings.
Thus the period covered between the institution of the said two suits and their final disposal by this Court cannot be pressed into service for challenging the reasonableness of the retrospective operation of the Act.
" In the instant case, the facts are one shade better.
There is no dispute in this case about the validity of the tax payable under the Act during the period between January 1, 1957 and the date of commencement of the Amending Act.
It has to be presumed that 234 all the tax has been collected by the dealers from their customers.
There is also no dispute that the law required the dealers to pay the tax within the specified time.
The dealers had also the knowledge of the provisions relating to penalties in the general sales tax laws of their respective States.
It was only owing to the deficiency in the Act pointed out by this Court in Khemka 's case (supra) the penalties became not payable.
In this situation, where the dealers have utilised the money which should have been paid to the Government and have committed default in performing their duty, if Parliament calls upon them to pay penalties in accordance with the law as amended with retrospective effect it cannot be said that there has been any unreasonable restriction imposed on the rights guaranteed under Article 19(1) (f) and (g) of the Constitution, even though the period of retrospectivity is nearly nineteen years.
It is also pertinent to refer here to subsection (3) of section 9 of the Amending Act which provides that the provisions contained in sub section (2) thereof would not prevent a person from questioning the imposition or collection of any penalty or any proceeding, act or thing in connection therewith or for claiming any refund in accordance with the Act as amended by the Amending Act read with sub section (l) of section 9 of the Amending Act.
Explanation to sub section (3) to section 9 of the Amending Act also provides for exclusion of the period between February 27, 1975 i.e. the date on which the judgment in Khemka 's case (supra) was delivered upto the date of the commencement of the Amending Act in computing the period of limitation for questioning ally order levying penalty.
In those proceedings the authorities concerned are sure to consider all aspects of the case before passing orders levying penalties.
The contention that the impugned provision is violative of Article 19(1)(f) and (g) of the Constitution has, therefore, to be rejected.
The next contention relates to the validity of section 48 of the Haryana General Sales Tax Act, 1973 (Act No. 20 of 1973) It reads: "48.
Failure to maintain correct accounts.
and to furnish correct returns.
If a dealer has maintained false or incorrect accounts with a view to suppressing his sales, purchases or stocks of goods, or has concealed any particulars of his sales, purchases or has furnished to, or produced before any authority under this Act or the rules made thereunder any account return or information which is false or incorrect in any material particular, the 235 Commissioner or any person appointed to assist him under sub section (I) of section 3 may after affording such dealer a reasonable opportunity of being heard direct him to pay, by way of penalty, in addition to any tax payable by him, a sum not less than twice and more than ten times the amount of tax which would have been avoided if the turnover returned by such dealer had been accepted as correct and where no tax is payable a sum not less than one hundred rupees but not exceeding one thousand rupees.
" The argument urged on behalf of the dealers in the State of Haryana is that this section which authorises the levy of penalty at 'a sum of not less than twice and more than ten times the amount of tax ' on proof of the defaults mentioned therein is violative of Article 14 as there is no guidance given to the authority levying the penalty about the quantum of penalty.
There is no substance in this plea.
The provision in question itself suggests that the levy to be made under it is in the nature of a penalty which requires the authority concerned to apply his mind to all relevant aspects of the default alleged to have been committed by a dealer.
First the default committed by the dealer should be established at an enquiry after giving the dealer concerned an opportunity of being heard.
The degree of remissness involved in the default is a relevant factor to be taken into account while levying penalty.
The section provides both the minimum and the maximum amount of penalty leviable and it is correlated to the amount of tax which would have been avoided if the turnover returned by such dealer had been accepted as correct.
The order levying penalty is quasi judicial in character and involves exercise of judicial discretion.
The considerations which should weigh with the authorities while imposing penalty are well known and have been settled by many decisions.
Hindustan Steel Ltd. vs State of Orissa(l) is one such decision.
An order levying penalty under section 48 of the Haryana General Sales Tax Act is also subject to the provisions relating to appeal, etc.
set out in Chapter VII thereof.
In the circumstances, it is not possible to hold that section 48 of the Haryana General Sales Tax Act, 1973 confers an uncanalised, unguided and arbitrary power on the authority levying penalty.
This contention should, therefore, fail.
236 In Writ Petition No. 7220 of 1982 it was faintly suggested that the order of penalty had been passed by an authority not authorised by law.
We find from the record that the said order is passed by the Assessing Authority cum Excise and Taxation officer, Hissar authorised by the State Government apparently under section 2(a) read with section 3 of the Haryana General Sales Tax Act, 1973 and Rule 4(1) of the Haryana General Sales Tax Rules, 1975.
We do not find any substance in this contention too.
In the result these petitions fail and they are dismissed.
In the circumstances of these cases, there will be no order as to costs.
| Section 9 of the as amended retrospectively by the Central Sales Tax (Amendment) Act, 1969 provided for levy and collection of tax and penalties on sale of goods effected by a dealer in the course of inter State trade or commerce.
lt further provided that the authorties for the time being empowered to assess, re assess, collect and enforce payment of any tax under the general sales tax law of the appropriate State shall, on behalf of Government of India, assess, re assess, collect and enforce payment of tax including any penalty, payable by a dealer under this Act as if the tax or penalty payable by such a dealer under this Act is a tax or penalty under the general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State.
Consequent upon the decision of this Court in Khemka & Co. vs State of Maharashtra ; holding by a majority that it was not open to the authorities under the State law to levy and recover penalty for delay or default in payment of tax under the , section 9 of the Act came to be amended by the Central sales Tax (Amendment) Act, 1976 introducing sub section (2 A) in it.
Sub section (2 A) of section 9 provided that all the provisions relating to offences and penalties (with certain exceptions) of the general sales tax law of each State shall with necessary modification, apply in relation to the assessment, re assessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State as if the tax under this Act were a tax under such sales tax law.
199 Section 9 of the Amending Act, 1976 declared that the provisions; of section 9 of the 1956 Act would have effect and should be deemed always to have had effect in relation to the period commencing from January 5, 1957 (the date of coming into force of 1956 Act) and ending with the date immediately proceeding the date of commencement of the Amending Act.
The petitioners in these two batches of petitions filed under Article 32 of the Constitution are dealers under the (herein after referred to as 'the Act ') having their places of business at Maharashtra, Haryana etc.
They have questioned the constitutional validity of sub section (2 A) of section 9 of the Act as introduced by the Central Sales Tax (Amendment) Act, 1976 (herein after referred to as 'the Amending Act ' and section 9 of the Amending Act validating the levy of penalties under the Act with retrospective effect on the following grounds: (1) That the introduction of sub section (2 A) in section 9 of the Act by the Amending Act, 1976 does not have the effect of making the provisions relating to penalties leviable under the general sales tax laws of the States applicable to the assessees under the Act 25 the word 'penalties ' is not Found along with the words 'assessment, re assessment, collection and the enforcement of payment of any tax ' in sub section (2 A); the lacuna in the Act, which was pointed out by this Court in Kehmka 's case namely that there is no specific provision levying penalties in the Act remains unfilled up even now and hence no penalties can be recovered by utilising the provisions of the general sales tax laws of the respective States.
(2) Sub section (2 A) of section 9 suffers from the vice of excessive delegation of legislative power; the Parliament by adopting the provisions relating to offences and penalties referred to in the various general sales tax laws of the States has abdicated its essential legislative function.
(3) That sub section (2 A) of section 9 of the Act and section 9 of the Amending Act are violative of Article 20(1) of the Constitution; that any act or omission which is considered to be a default under the Act for which penalty is leviable is an offence, that such act or omission was not an offence, and no penalty was payable under the law in force at the time when it was committed and hence they cannot be punished by the levy of penalty under a law which is given retrospective effect.
(4) The levy and collection of penalties with retrospective effect amounts to an imposition of an unreasonable restriction on the fundamental right of the petitioners to own property and to carry on business guaranteed under Article 19 (1) (f) and (g) of the Constitution.
(5) That in the case of assessees of the State of Haryana, section 48 of the Haryana General Sales Tax Act, 1973 which authorises the levy of penalty of 'a sum of not less than twice and more than ten times the amount of tax ' on proof of the defaults mentioned therein is violative of Article 14 of the 200 Constitution as there is no guidance given to the authority levying the penalty about the quantum of penalty.
Dismissing the petitions, ^ HELD 1.
Sub section (2 A) of section 9 of the Act and section 9 of the Amending Act are adequately enough to assess and realise penalties w.e.f. January 5, 1957 as contemplated therein.
The principal object of the Act is not the levying of the penalties.
Its object is assessment, re assessment collection and the enforcement of payment of central sales tax.
The assessees incur the liability to pay penalties on account of certain acts or omissions committed by them at the various stages specified above, namely, assessment, re assessment, collection and the enforcement of payment of tax.
The inclusion of the word 'penalties ' along with these four stages would have, therefore been redundant apart from being inappropriate.
Sub section (2 A) of section 9 of the Act expressly makes all the provisions relating to offences and penalties which are committed or incurred as the case may be, under the general sales tax laws of the respective States applicable to persons who commit corresponding acts and omissions at the above mentioned stages under the Act.
There is no lacuna in the language of sub section (2 A) of section 9 of the Act which makes the provisions relating to penalties under the general sales tax laws of the respective States inapplicable even now to the proceedings under the Act.
While sub section (2 A) of section 9 of the Act makes the provisions relating to both offences and penalties in the general Sales tax laws of the States applicable to the proceedings under the Act prospectively, section 9 of the Amending Act makes all the provisions relating to penalties only in the general sales tax laws of the States applicable to the proceeding under the Act retrospectively by adopting the same language appearing in sub section (2 A) of section 9 of the Act.
This pattern of legislation had to be adopted perhaps because Parliament wished rightly not to give retrospective effect to the provisions relating to offences also which are referred to in sub section (2 A) of section 9.
Having thus given retrospective effect to section (2 A) of section 9 w. e. f. January 5, 1957 in so far as penalties were concerned by enacting sub section (1) of section 9 of the Amending Act, Parliament removed the deficiency pointed out in Khemka 's case.
[217 E F, 216 E G, 217 A D] Khemka & Co. vs State of Maharashtra [1975] 3 S.C.R. 1973, referred to.
The question whether there has been excessive delegation or abdication of legislative power has to be decided on the meaning of the words in the Statute and the policy behind it, Legislation by incorporation of provisions of another statute even though passed by a different legislature is a well known method of legislation which does not effect the validity of the legislation particularly when the scheme of the other statute is similar and such incorporation is relevant and necessary for the purpose of advancing the objects and purposes of the legislation.
[217 H, 218 A B] 201 In the instant case sub section (2 A) of section 9 of the Act does not suffer from the vice of excessive delegation merely because the provisions relating to penalty in the general sales tax laws of the States are adopted for purposes of the Act.
The assessees under the Act who are spread over various States are accustomed to the general pattern of sales tax law in their respective States and the various duties and responsibilities of an assessee who is liable to pay sales tax.
The officers who assess and collect the tax under the Act are the officers who discharge similar functions under the State laws.
In this situation if Parliament has, with the knowledge of the various provisions relating to offences and penalties in the general sales tax laws of the various States adopted them for purposes of assessment, re assessment, collection and enforcement of the provisions of the Act it cannot be said that it has abdicated its legislative functions.
[222 B C, 218 C E] The circumstances leading to imposition of penalties and the rates of penalties very from on State to the other but the power to make a legislative provision on matters relating to penalties is circumscribed by various economic factors and it cannot be said that Parliament had virtually surrendered its legislative judgment to the State legislatures.
There is a clear legislative policy adopted by Parliament in the case of levy of penalties and that is that the penalties payable under the Act should be the same as the penalties payable under the general sales tax law of each State if the rates of penalties exceed reasonable limits the States which are beneficiaries of the tax collected under the Act themselves suffer as such unreasonable levy is bound to lead to the killing of the goose which lays the golden egg.
The trade would immediately shift to areas outside the State which resorts to higher taxes and penalties.
The political and economic factors which operate in this field are so powerful that the provisions with regard to penalties to be made by the State Legislature cannot but be reasonable as they would affect the levy of tax under the State Act also.
The penal nature of the penalties itself is a sufficient guidance regarding maximum limits upto which penalties can be levied.
A penalty cannot be wholly disproportionate to the extent of infringement of law.
Moreover Parliament always has the power to amend its own law i. e the Act if it finds that the provisions realting to penalties in any State law cross the limits of public interest.
[222 C G] State of Madras vs N.K. Nataraja Mudaliar, ; ; Gwalior Rayon Silk Mfg.
(Wvg.) Co. Ltd. vs The Asstt.
Cvmmissioner of Sales Tax & Ors.
[1974] 2.
S.C,R. 879; M,K Papiah & Sons vs The Excise Commissioner & Anr ; , referred to.
The marginal note of our Article 20 is 'protection in respect of conviction for offences .
The presence of words 'conviction ' and 'offences ', in the marginal note 'convicted of an offence ', 'the act charged as an offence ' and 'commission of an offence ', 'in clause (1) of Article 20, 'prosecuted and punished ' in clause (2) of Article 20 aud 'accused of an offence ' and 'compelled to be a witness against himself ' in clause (3) of Article 20 clearly suggests that Article 20 relates to the constitutional protection given to persons who are charged with a crime before a criminal Court.
[226 A B] 202 The word 'penalty ' is a word of a wide significance.
Sometimes it means recovery of an amount as a penal measure even in a civil proceeding.
An exaction which is not of a compensatory character is also termed as a penalty even though it is not being recovered pursuant to an order finding the person concerned guilty of a crime.
In Article 20(1) the expression 'penalty ' is used in the narrow sense as meaning a payment which has to be made or a deprivation of liberty which has to be suffered as a consequence of a finding that the person accused of a crime is guilty of the charge.
The word 'penalty ' unsed in Article 20 (1) cannot be construed as including a 'penalty ' levied under the sales tax laws by the departmental authorities for violation of statutory provisions.
A penalty imposed by sales tax authorities is only a civil liability, though penal in character.
It may be relevant to notice that sub section (2 A) of section 9 of the Act specifically refers to certain acts and omissions which are offences for which a criminal prosecution would lie and the provisions relating to offences have not been retrospective effect by section 9 of the Amending Act.
[226 B D, 230 C D] Constitutional Law of India by H.M. Seervai; 3rd Ed.
p. 759; Maqbool Hussain vs The state of Bombay; , ; Jawala Ram vs State of Pepsu, ; ; State of West Bengal vs S.K Ghosh ; ; M/s. Hati Singh Mfg Co. Ltd. & Anr.
vs Union of India & Ors.
, ; Pai Bahadur Hurdut Roy Mati Lal Jute Mills v The State of Bihar & Anr., [1956] 7 S.T.C. 609; The State of Bihar vs Rai Bahadur Hurdut Ray Moti Lall Jute Mills & Anr., ; ; Shew Bhagwan Goenka vs Commercial Tax Officer & Ors.
[1973] 32 S.T.C. 368; Commissioner of Wealth Tax, Amritsar vs Suersh Seth, ; ; Raghunathan Prasad Mohan Lal vs Income Tax Appellate Tribunal, Delhi Bench & Ors., ; Central India Motors vs C.L. Sharma, Assistant Commissioner of Sales Tax, Indore Region, Indore & Anr., [1980] 46 S.T.C. 379, referred to.
If in its essential features a taxing statute is within the competence of the legislature, it would not cease to be so if retrospective effect is given to it.
The provision for levying of interest and to levy penalties retrospectively and to validate earlier proceedings under laws which had been declared unconstitutional after removing the element of unconstitutionality is included within the scope of legislative power.
[231 E] Under the Constitution the grounds on which infraction of the rights to property is to be tested have to be considered on the precise criteria set out in Article 19 (5).
Mere retrospectivity in the imposition of the tax cannot per se render the law unconstitutional on the ground of it infringing the rights to hold property under Article 19 (1) (f).
The test of the length of time covered by the retrospective operation cannot by itself be treated as a decisive test.
[231 E, 233 D] In the instant case, there is no dispute about the validity of the tax payable under the Act during the period between January 1, 1957 and the date of commencement of the Amending Act.
It has to be presumed that all the tax has been collected by the dealers from their customers.
There is also no dispute that the law required the dealers to pay the tax within the specified time.
The 203 dealers had also the knowledge of the provisions relating to penalties in the general sales tax laws of their respective States.
It was only owing to the deficiency in the Act pointed out by this Court in Khemaka 's case the penalties became not payable.
In this situation where the dealers have untilised the money which should have been paid to the Government and have committed default in performing their duty, if Parliament calls upon them to pay penalties in accordance with the law as amended with retrospective effect it cannot be said that there has been any unreasonable restriction imposed on the rights guaranteed under Article 19 (1) (f) and (g) of the Constitution, even though the period of retrospectivity is nearly nineteen years.
[233 H, 234 A C] Chhotabhai Jethabhai Patel & Co, vs The Union of India The State of Bihar; , , referred to.
Section 48 of the Haryana General Sales tax Act, 1973 provides both the minimum and the maximum amount of penalties leviable and it is correlated to the amount of tax which would have been avoided if the turnover returned by such dealer had been accepted as correct.
The degree of remissness involved in the default is a factor to be taken into account while levying penalty.
The order levying penalty is quasi judicial in character and involves exercise of judicial discretion.
An order levying penalty under section 48 is also subject to the provision relating to appeal.
In the circumstances, it is not possible to hold that section 48 confers an uncanalised, unguided and arbitrary power on the authority levying penalty.
[235 E G] Hindustan Steel Ltd. vs State of Orissa, [1970] 1 S.C.R. 753, referred to.
|
Appeal No. 1 of 1958.
Appeal from the judgment and order dated April 18, 1956, of the former Judicial Commissioner, Ajmer, in Civil Writ Petition No. 1 of 1956.
G. C. Kasliwal, Advocate General for the State of Rajasthan, section K. Kapur and D. Gupta, for the appellant.
section section Deedwania and K. P. Gupta, for respondent No. 1.
B. P. Maheshwari, for respondent No. 9. 1961.
April 27.
The judgment of the Court was delivered by 435 WANCHOO, J.
This is an appeal on a certificate granted by the Judicial Commissioner, Ajmer.
The brief facts necessary for present purposes are these.
,, There is a Bank in Ajmer known as the Commercial Co operative Bank Limited, Ajmer (hereinafter referred to as the Bank), which is registered under the Cooperative Societies Act, No. 11 of 1912 (hereinafter referred to as the Act).
Dharam Chand, respondent No. 1 (hereinafter referred to as the respondent), along with certain other respondents were members of the managing committee of the Bank.
One Nandlal Sharma was the paid manager of the Bank.
This man disappeared in 1953 and thereafter defalcation to the extent of about Rs. 6,34,000 was detected.
Consequently, the managing committee passed a resolution suspending the business of the Bank subject to the approval of the Registrar.
The then Registrar Shri Nagar approved the resolution and appointed an Inspector of Co operative Societies to hold an immediate inquiry.
He also appointed a firm of Chartered Accountants as investigating auditors.
On investigation by the auditors embezzlement to the extent of about Rs. 6,34,000 was found.
Thereupon the successor Registrar, Shri Chitnis, gave notice to the respondent and other members of the managing committee on February 26, 1955, asking them to show cause why the committee should not be suspended under r. 30(3) of the Rules framed under the Act.
A reply to the notice was given by the respondent and others in which they denied allegations of mismanagement, etc.
The then Registrar Shri Chitnis however appointed an administrator of the Bank after removing the managing committee.
In the meantime, an application was made under r. 18 of the Rules by seven shareholders of the Bank to the Registrar on April 4, 1956.
Rule 18 authorises the Registrar to decide any dispute brought before him under that rule either himself or through the appointment of one or more arbitrators.
Any dispute concerning the business of a Co operative Society between members or past members of the Society or persons claiming through them, or between a member or past member or person 436 so claiming and the Committee or any officer can be referred under r. 18.
Such reference can be made by the Committee or by the Society by resolution in general meeting or by any party to the dispute, or if the dispute concerns a sum due from a member of the committee to the Society by any member of the Society.
In consequence of this application the then Registrar appointed Shri Hem Chand Sogani, an advocate, as an arbitrator.
The application was in the nature of a misfeasance proceeding against the members of the managing committee and the prayer was for an award against thirteen persons (including the respondent) directing them to pay certain amounts including the entire loss amounting to about Rs. 6,34,000, which was said to have been occasioned on account of glaring breach of law and the rules and the bye laws of the Bank and betrayal of confidence by the members of the managing committee.
The appointment of the arbitrator was challenged by the president of the managing committee before the Deputy Commissioner through a revision petition but the challenge failed.
As however Shri Sogani was in ill health, he expressed his inability to act as arbitrator.
Consequently, on December 13, 1955, the then Registrar set aside the order appointing Shri Sogani as arbitrator and informed the parties that he would decide the dispute himself.
This order was also challenged in revision before the Deputy Commissioner; but the attempt failed.
Thereafter the present petition was filed by the respondent before the Judicial Commissioner, Ajmer, and a large number of grounds were urged in support of it, and it was prayed that the Registrar be prohibited from proceeding to deal with the application under r. 18 and the proceedings arising therefrom be quashed.
The petition was decided by the Judicial Commissioner on April 18, 1956.
He negatived all the contentions raised on behalf of the respondent except one; and it is with that contention only that we are concerned in the present appeal.
That contention is that the Registrar is in the position of a party and had expressed his opinion unequivocally against the respondent and other members of the committee in the notice 437 which he gave on February 26, 1955, and therefore his constituting himself as a tribunal to decide the dispute under r. 18 was against the principles of natural justice, inasmuch as a party constituted himself the judge.
This contention found favour with the learned Judicial Commissioner and he held that although the Registrar had no pecuniary or proprietary interest in the dispute yet in view of the circumstances of the case there was a strong likelihood of bias and therefore the Registrar 's acting as the tribunal would be against the principles of natural justice.
He further held that if the Registrar had not suffered from the disability inherent in the situation, he would have been the most proper person to decide the dispute.
The petition was therefore allowed and a writ of prohibition was issued to the Registrar directing him not to proceed with the dispute before him.
This was followed by an application to the Judicial Commissioner for a certificate of fitness in order to file an appeal to this court, which was granted; and that is how the matter has come up before us.
The official bias of the Registrar is sought to be based on two circumstances: the first is the notice issued by the then Registrar on February 26, 1955, asking the members of the managing committee (including the respondent) to show cause why they should not be suspended, and the second is that the Registrar is the head of the Co operative Department and as such has certain legal powers over all Co operative Societies (including the Bank) in his administrative capacity and therefore he would not be an impartial person to decide this dispute, particularly in view of the provisions of section 17 of the Act.
We are of opinion that there is no force in either of the contentions.
Turning to the notice of February 26, 1955, we are of opinion that there can be no inference of bias against the Registrar as such because he gave that notice and afterwards ordered the removal of the managing committee.
That notice was based on the report of the investigating auditors and was concerned with the collective responsibility of the 56 438 managing committee in the discharge of their duties.
The proceedings under that notice have nothing in ,common with the proceedings in the present dispute which, as we have already said, are in the nature of misfeasance proceedings against certain members of the managing committee and in which their individual responsibility as members of the managing committee to make good the loss caused by the embezzlement falls to be considered.
So far as the proceedings under the notice are concerned, the only question was whether on the facts found by the investigating auditors the managing committee should as a whole be allowed to act as such and all that the Registrar in that connection did was to decide on the facts found by the investigating auditors that the managing committee should no longer be allowed to manage the affairs of the Bank.
That is a very different matter from the dispute in the present pro ceedings, namely, whether the particular members of the managing committee against whom the application under r. 18 has been made are responsible for making good the loss caused to the Bank by the embezzlement, the fact of which is not in dispute.
In the present proceedings therefore the Registrar will have to decide the individual responsibility of the various members of the managing committee (including the respondent) in the matter of making good the loss caused to the Bank.
We are therefore of opinion that the fact that the Registrar gave that notice for the purpose of the removal of the managing committee is no reason to hold that he would be biased in the investigation of individual responsibility of various members of the managing committee in this matter.
We cannot therefore agree with the Judicial Commissioner that there can be any official bias in the Registrar on this ground in connection with the present dispute and that such bias disentitles him to act as a judge or arbitrator under r. 18.
The next contention is that the Registrar being the administrative head of the Department is in control of all the Co operative Societies in Ajmer, including the Bank.
It is said that because of that administrative control which the Registrar exercises through his 439 subordinates in the Department, he is interested to see that the blame is put on the managing committee and that his Department is freed from all blame.
In, particular our attention has been drawn to section 17 which enjoins that the Registrar shall audit or cause to be audited by some person authorised by him the accounts of every registered society once at least in every year.
It is said that under this provision the Registrar has been appointing Chartered Accountants to audit the accounts of the Bank and that nothing wrong was discovered in the annual audits till the paid manager Nandlal absconded and the defalcations came to light.
We fail to appreciate how this general supervision of the Registrar over all Co operative Societies can be said to amount to a bias in him so as to disentitle him to act as a judge or arbitrator under r. 18.
It is not the respondent 's case that the Registrar is in any way responsible for the day to day working of the Bank.
All that he is concerned with is to see that the accounts of the Bank are audited yearly, and if necessary, to make inspections of the Bank, if so authorised by the Act and the Rules.
That, however, does not mean that the Registrar is bound to shield the auditors or his subordinates who might have made the inspection of the Bank and would so conduct the proceedings as to put the blame on the members of the managing committee.
Even if some blame attaches to the auditors appointed by the Registrar or to his subordinates who might have inspected the Bank, their fault would be that they failed to detect the embezzlement till the paid manager absconded.
That, however, does not mean that the Registrar was at any time a party to the fraud which resulted in the embezzlement.
Even the Judicial Commissioner recognises that the Registrar has no personal interest in the matter and that he would but for the bias found by the Judicial Commissioner have been a most proper person to decide the dispute.
Therefore even if we bear in mind the fact that the Registrar is the administrative head of the Department, we see nothing inherent in the situation which shows any official bias whatsoever in him so far as adjudication of this dispute is concerned.
440 We have no reason to suppose that if any of his subordinates or the auditors appointed by him are in any way found to be connected with the fraud he would not put the responsibility where it should lie.
We are therefore of opinion that the Judicial Commissioner was wrong in the view that there was anything inherent in the situation which made the Registrar a biased person who could not act as a judge or an arbitrator in this case.
It seems to us, therefore, that the learned Judicial Commissioner was in error in thinking that the Registrar was biased.
For the reasons earlier mentioned, we do not think that any such blemish attached to the Registrar.
That being so, no question of his inability to act as a judge under the rule of natural justice that no man shall be judge in his own cause, arises.
The judgment of the learned Judicial Commissioner has to be set aside on this ground alone.
We do not wish however to be understood as having made any pronouncement that if it had been proved that the Registrar was suffering from any bias, then the present would have been a fit case for the issue of a writ of prohibition as asked by the respondent.
Before the writ could be issued a further question would have to be decided whether in view of the statute, that is, r. 18 of the Rules framed under section 43 of the Act, there was any scope for applying the rule of natural justice on which the contesting respondent relied.
A question of this kind was mentioned in Gullapalli Nageswar Rao and Others V. State of Andhra Pradesh and Others (1).
In the view that we have taken it is unnecessary to go into that question and we do not do so.
The result is that the appeal is allowed and the judgment of the Judicial Commissioner is set aside.
The petition will stand dismissed.
Respondent No. 1 will pay the costs throughout.
We trust that there will be no further reason to delay the termination of the proceedings under the rules by the Registrar.
Appeal allowed.
(1) ; , 587.
| The imposition of "profession tax" by the respondent Municipal Council under the Travancore District Municipalities Act (Act XXIII of the Malayalam year 1116) was challenged on the grounds, inter alia (1) that the requisite notification was not published by the Municipal Council but by its commissioner, (2) that the period of thirty days which was given for filing objections to the imposition was insufficient in law which required a period of " not less than a month ", and (3) that this was a mandatory provision under the proviso to section 78 of the Act.
Held, that under section 16 the Commissioner being the executive authority of the Municipal Council was authorised to give effect to the resolutions of the Council and to perform all its executive duties.
The words " not being less than one month " in the proviso to section 78 implied the necessity for one clear month 's notice excluding the first and last day of the month, but the use of the words " reasonable period " before the words " not being less than one month " showed that the time given must be reasonable.
In view of the facts of the case the period allowed must be regarded as reasonable and to have complied with the provision which is directory in its later part.
Commissioner of Income tax vs Ekbal and Co. [1945] 13 I.T.R. 154 and Thompson vs Stimpson, , distinguished.
Municipal Council, Cuddapah vs The Madras and Southern Mahratta Railway Ltd. Mad. 779, The Borough Municipality of Amalner vs The Pratap Spinning, Weaving and Manufacturing Co. Ltd., Amalner, I.L.R. and Kalu Karim vs Municipality of Broach BOM.
764, referred to.
610 The definition of " profession " as given in section 81 includes business.
|
tition Nos. 232 & 233 of 1983.
(Under article 32 of the Constitution of India) M.S. Joshi, N.D. Garg and Rajiv Kumar Garg for the Petitioners.
D.D. Sharma for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, CJ.
An important question arises for consideration in these two writ petitions.
That question is whether a delay exceeding two years in the execution of a sentence of death must be considered sufficient for setting aside that sentence.
Learned counsel who appears on behalf of the petitioners relies upon a decision of this Court in T.V. Vatheeswaran vs The State of Tamil Nadu(1) and contends that since more than two years have passed since the petitioners were sentenced to death by the Trial Court, they are entitled to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment.
The petitioners, Sher Singh and Surjit Singh, and one Kuldip Singh were convicted under section 302 read with section 34 of the 586 Penal Code and were sentenced to death by the learned Sessions Judge, Sangrur, on November 26, 1977.
By a judgment dated July 18, 1978 the High Court of Punjab and Haryana reduced the sentence imposed upon Kuldip Singh to life imprisonment but upheld the sentence of death imposed upon the petitioners.
The High Court also imposed a sentence of fine of Rs. 5000 on Kuldip Singh and a fine of Rs. 5000 on each of the petitioners.
Special Leave Petition (Crl.) No. 1711 of 1978 which was filed by the petitioners against the judgment of the High Court was dismissed by this Court on March 5, 1979.
The petitioners then filed a Writ Petition in this Court challenging the validity of section 302 of the Penal Code.
That petition was dismissed on January 20, 1981.
Review Petition No. 99 of 1981 filed by the petitioners against the dismissal of their S.L.P. was dismissed by this Court on March 27, 1981.
The petitioners filed yet another petition under article 32 of the Constitution, this time challenging the validity of section 34 of the Penal Code.
That petition was dismissed on August 24, 1981.
After failing in these seemingly inexhaustible series of proceedings, the petitioners filed these two writ petitions on March 2, 1983, basing themselves on the decision rendered by Justice Chinnappa Reddy and Justice R.B. Misra on February 16, 1983 in Vatheeswaran.
The question which arose for consideration in Vatheeswaran is formulated by Chinnappa Reddy, J., who spoke for the Court, in these terms: "But the question is whether in a case where after the sentence of death is given, the accused person is made to undergo inhuman and degrading punishment or where the execution of the sentence is endlessly delayed and the accused is made to suffer the most excruciating agony and anguish, is it not open to a court of appeal or a court exercising writ jurisdiction, in an appropriate proceeding to take note of the circumstance when it is brought to its notice and give relief where necessary ?" This question arose on the following facts as stated in the judgment of Brother Chinnappa Reddy: (1) The prisoner was rightly sentenced to death.
(2) He was the 'arch villain of a villainous piece ' and the brain behind a cruel conspiracy to impersonate Customs officers, pretend to question unsuspecting visi 587 tors to the city of Madras, abduct them on the pretext of interrogating them, administer sleeping pills to the unsuspecting victims, steal their cash and jewels and finally murder them.
The plan was ingeniously fiendish and the appellant was its architect.
(3) Since January 19, 1975 when the Sessions Judge pronounced the sentence of death, the prisoner was kept in solitary confinement contrary to the decision of this Court in Sunil Batra vs Delhi Administration.
(1) Before that, he was a 'prisoner under remand ' for two years.
On these facts, the argument advanced in this Court on behalf of the prisoner was that taking away his life after keeping him in jail for ten years, eight of which were spent in illegal solitary confinement, is a gross violation of the fundamental rights guaranteed by Article 21 of the Constitution.
In Vatheeswaran, our learned Brethren have drawn sustenance to their conclusion from one judgment of the Federal Court of India, five judgments of this Court, one of the Privy Council and one of the U.S. Supreme Court.
As to the meaning and implications of Article 21 of the Constitution, they have relied upon the decisions of this Court in Sunil Batra,(1) Maneka Gandhi,(2) Bachan Singh, (3) Hussainara Khatoon (4) and Hoskot.(5) The judgment in Bhuvan Mohan Patnaik (6) and Prabhakar Pandurang Sangzgiri (7) have been relied upon to show that prisoners who are under a sentence of death and detenus are entitled to certain fundamental rights.
In Piare Dusadh, (8) the Federal Court was considering appeals against the judgments of the High Courts of Allahabad, Madras, Nagpur and Patna, under the special Criminal Courts Ordinance II of 1942.
In Case Nos.
XLI and XLII, the High Court of Patna had 588 confirmed the sentence of death passed on the appellants by the Special Judge.
It was urged before the Federal Court that the death sentence imposed in those cases should be reduced to transportation for life on account of the time that had elapsed since the sentences were first pronounced.
The Court observed: "It is true that death sentences were imposed in these cases several months ago, that the appellants have been lying ever since under threat of execution, and that the long delay has been caused very largely by the time taken in proceedings over legal points in respect of the constitution of the courts before which they were tried and of the validity of the sentences themselves.
We do not doubt that this court has power, where there has been inordinate delay in executing death sentence in cases which come before it, to allow the appeal in so far as the death sentence is concerned and substitute a sentence of transportation for life on account of the time factor alone, however right the death sentence was at the time when it was originally imposed.
But this is a jurisdiction which very closely entrenches on the powers and duties of the executive in regard to sentences imposed by courts.
It is a jurisdiction which any court should be slow to exercise.
We do not propose ourselves to exercise it in these cases.
Except in Case No. XLVII (in which we are commuting the sentence largely for other reasons as hereafter appears), the circumstances of the crimes were such that if the death sentence which was the only sentence that could have been properly imposed originally, is to be commuted, we feel that it is for the executive to do so.
" It was urged before the Federal Court that in England, when cases in which death sentence has been imposed are allowed to be taken to the House of Lords on account of some important legal point, the consequential delay in finally disposing of the case was treated as a ground for the commutation of the death sentence and that a similar course might well be adopted in India in cases in which substantial questions of law as to the interpretation of the Constitution Act had to be considered by the Federal Court.
This argument was rejected on the ground that these were matters primarily for the consideration of the executive.
589 In Case No. XLVII, which was one of the cases before the Federal Court, the appellant was convicted by a special Judge of the offence of murder and was sentenced to death on September 30, 1942.
The Allahabad High Court confirmed the sentence of death but the Federal Court commuted that sentence to transportation of life.
As is evident from the parenthetical portion of the passage extracted above, this was done "largely for other reasons", that is to say, for reasons other than that a long delay had intervened after the death sentence was imposed.
The Federal Court commuted the death sentence on the ground that the sentence of transportation for life was more appropriate in the circumstances of the case.
They added that the appellant was awaiting the execution of his death sentence for over a year.
It is thus clear that Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, that sentence must necessarily be commuted to life imprisonment.
In Ediga Anamma(1) this Court was hearing an appeal against the sentence of death imposed upon the appellant.
Finding that the appellant was a young woman of 24 who was flogged out of her husband 's house by the father in law, this Court reduced her sentence to life imprisonment for a variety of factual reasons peculiar to the case, like her entanglement into a sex net, that she had a young boy to look after and so on.
Speaking for the Court, Krishna Iyer, J. added: "What may perhaps be an extrinsic factor but recognised by the Court as of humane significance in the sentencing context is the brooding horror of 'hanging ' which has been haunting the prisoner in her condemned cell for over two years.
The Sessions Judge pronounced the death penalty on December 31, 1971, and we are now in February 1974.
This prolonged agony has ameliorative impact according to the rulings of this Court." Piare Dusadh was regarded by the Court as a leading case on this point.
We have already adverted to the circumstances in which the death sentence was commuted to transportation for life in that case.
590 In the other cases referred to in Vatheeswaran, (supra) this Court was hearing appeals against the judgments of High Courts confirming the sentence of death.
In those cases, the sentence of death was commuted into life imprisonment by this Court by reason of the long interval which had elapsed either since the imposition of the death sentence or since the date of the occurrence.
But we must hasten to add that this Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence.
The question which arises in such appeals is whether the extreme penalty provided by law is called for in the circumstances of the case.
The question which arises in proceedings such as those before us is whether, even if the death sentence was the only appropriate sentence to impose in the case and was therefore imposed, it will be harsh and unjust to execute that sentence by reason of supervening events.
In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence, consequent upon the dismissal of the prisoner 's Special Leave Petition or Appeal by this Court.
Traditionally, subsequent events are taken into account in the area of civil law.
There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable.
Undoubtedly, principles analogous to Res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already.
That final decision is not a decision on new facts.
Courts are never powerless to do justice, that is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship.
That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court.
Some of us dealing with this case have been parties to decisions directing, in appropriate cases, that the death sentence shall not be executed by reason of supervening circumstances.
591 In Vatheeswaran, the prisoner was under the sentence of death for over eight years and was in the jail for two years before that.
After the death sentence was pronounced upon him, he was kept in solitary confinement, contrary to this Court 's ruling in Sunil Batra.
These supervening considerations, inter alia, were unquestionably germane to the decision whether the death sentence should be allowed to be executed.
The Court took them into account and commuted the sentence to life imprisonment.
Like our learned Brethren, we too consider that the view expressed in this behalf by Lord Scarman and Lord Brightman in the Privy Council decision of Neol Riley (1) is, with respect, correct.
The majority in that case did not pronounce upon this matter.
The minority expressed the opinion that the jurisprudence of the civilized world has recognized and acknowledged that prolonged delay in executing a sentence of death can make the punishment when it comes inhuman and degrading: Sentence of death is one thing; sentence of death followed by lengthy imprisonment prior to execution is another.
The prolonged anguish of alternating hope and despair, the agony of uncertainty, the consequences of such suffering on the mental, emotional, and physical integrity and health of the individual can render the decision to execute the sentence of death an inhuman and degrading punishment in circumstances of a given case.
Death sentence is constitutionally valid and permissible within the constraints of the rule in Bachan Singh.
This has to be accepted as the law of the land.
We do not, all of us, share the views of every one of us.
And that is natural because, every one of us has his own philosophy of law and life, moulded and conditioned by his own assessment of the performance and potentials of law and the garnered experiences of life.
But the decisions rendered by this Court after a full debate have to be accepted without mental reservations until they are set aside.
The fact that it is permissible to impose the death sentence in appropriate cases does not, however, lead to the conclusion that the sentence must be executed in every case in which it is upheld, regardless of the events which have happened since the imposition or the upholding of that sentence.
The inordinate delay in the execution of the sentence is one circumstance which has to be taken into account 592 while deciding whether the death sentence ought to be allowed to be executed in a given case.
In his sociological study called 'Condemned to Die, Life Under Sentence of Death ', Robert Johnson says: "Death row is barren and uninviting.
The death row inmate must contend with a segregated environment marked by immobility, reduced stimulation, and the prospect of harassment by staff.
There is also the risk that visits from loved ones will become increasingly rare, for the man who is "civilly dead" is often abandoned by the living.
The condemned prisoner 's ordeal is usually a lonely one and must be met largely through his own resources.
The uncertainties of his case pending appeals, unanswered bids for commutation, possible changes in the law may aggravate adjustment problems.
A continuing and pressing concern is whether one will join the substantial minority who obtain a reprieve or will be counted among the to be dead.
Uncertainty may make the dilemma of the death row inmate more complicated than simply choosing between maintaining hope or surrendering to despair.
The condemned can afford neither alternative, but must nurture both a desire to live and an acceptance of imminent death.
As revealed in the suffering of terminally ill patients, this is an extremely difficult task, one in which resources afforded by family or those within the institutional context may prove critical to the person 's adjustment.
The death row inmate must achieve equilibrium with few coping supports.
In the process, he must somehow maintain his dignity and integrity" (page 4) "Death row is a prison within a prison, physically and socially isolated from the prison community and the outside world.
Condemned prisoners live twenty three and one half hours alone in their cells. " (page 47) The author proceeds to say: "Some death row inmates, attuned to the bitter irony of their predicament, characterize their existence as a living death and themselves as the living dead.
They are speaking symbolically, of course, but their imagery is an appropriate description of the human experience in a world where life is so obviously ruled by death.
It takes 593 into account the condemned prisoners ' massive deprivation of personal autonomy and command over resources critical to psychological survival; tomblike setting, marked by indifference to basic human needs and desires; and their enforced isolation from the living, with the resulting emotional emptiness and death." (page 110) A prisoner who has experienced living death for years on end is therefore entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed.
That is the true implication of Article 21 of the Constitution and to that extent, we express our broad and respectful agreement with our learned Brethren in their visualisation of the meaning of that article.
The horizons of Article 21 are ever widening and the final word on its conspectus shall never have been said.
So long as life lasts, so long shall it be the duty and endeavour of this Court to give to the provisions of our Constitution a meaning which will prevent human suffering and degradation.
Therefore, Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution.
The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable.
It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment.
(See Prabhakar Pandurang Sangzgiri, Bhuvan Mohan Patnaik and Sunil Batra).
It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair, Article 21 stands like a sentinel over human misery, degradation and oppression.
Its voice is the voice of justice and fairplay.
That voice can never be silenced on the ground that the time to heed to its imperatives is long since past in the story of a trial.
It reverberates through all stages the trial, the sentence, the incarceration and finally, the execution of the sentence.
In cases too numerous to mention, this Court has released undertrial prisoners who were held in jail for periods longer than the period to which they could be sentenced, if found guilty: this jurisdiction relates to pre trial procedure.
In Hussainara Khatoon (supra) and Champalal(1), speedy trial was held to be an integral part of the 594 right conferred by Article 21: this jurisdiction relates to procedure during the trial.
In Prabhakar Pandurang Sangzgiri, the Court upheld the right of a detenu, while in detention, to publish a book of scientific interest called 'Inside the Atom '; in Bhuvan Mohan Patnaik, it was held that prisoners had to be afforded reasonable human conveniences and that the live wire mechanism fixed on prison walls in pursuance of administrative instructions could not be justified as reasonable if it violated the fundamental rights of the prisoners; in Sunil Batra, solitary confinement and bar fetters were disapproved as normal modes of securing prisoners.
These three cases are illustrative of the Court 's jurisdiction to review prison regulations and to regulate the treatment of prisoners while in jail.
And, last but not the least, as we have stated already, death sentences have been commuted to life imprisonment by this Court either while disposing of Special Leave Petitions and Appeals or while dealing with Writ Petitions filed after the unsuccessful termination of the normal processes of litigation: this jurisdiction relates to the execution of the sentence.
This then is the vast sweep of Article 21.
What we have said above delineates the broad area of agreement between ourselves and our learned Brethren who decided Vatheeswaran.
We must now indicate with precision the narrow area wherein we feel constrained to differ from them and the reasons why.
Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed.
But, according to us, no hard and fast rule can be laid down as our learned Brethren have done that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke Article 21 and demand the quashing of the sentence of death".
This period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve".
With great respect, we find it impossible to agree with this part of the judgment.
One has only to turn to the statistics of the disposal of cases in High Court and the Supreme Court to appreciate that a period far exceeding two years is generally taken by those Courts together for the disposal of matters involving even the death sentence.
Very often, four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by the Supreme Court in that matter.
This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed 595 under Article 72 or article 161 of the Constitution or the time which the Government takes to dispose of applications filed under sections 432 and 433 of the Code of Criminal Procedure.
It has been the sad experience of this Court that no priority whatsoever is given by the Government of India to the disposal of petitions filed to the President under Article 72 of the Constitution.
Frequent reminders are issued by this Court for an expeditious disposal of such petitions but even then the petitions remain undisposed of for a long time.
Seeing that the petition for reprieve or commutation is not being attended to and no reason is forthcoming as to why the delay is caused, this Court is driven to commute the death sentence into life imprisonment out of a sheer sense of helplessness and frustration.
Therefore, with respect, the fixation of the time limit of two years does not seem to us to accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive.
Apart from the fact that the rule of two years runs in the teeth of common experience as regards the time generally occupied by proceedings in the High Court, the Supreme Court and before the executive authorities, we are of the opinion that no absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the sentence must be substituted by the sentence of life imprisonment.
There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated.
A convict is undoubtedly entitled to pursue all remedies lawfully open to him to get rid of the sentence of death imposed upon him and indeed, there is no one, be he blind, lame, starving or suffering from a terminal illness, who does not want to live.
The Vinoba Bhaves, who undertake the "Prayopaveshana" do not belong to the world of ordinary mortals.
Therefore, it is understandable that a convict sentenced to death will take recourse to every remedy which is available to him under the law, to ask for the commutation of his sentence, even after the death sentence is finally confirmed by this Court by dismissing his Special Leave Petition or Appeal.
But, it is, at least relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice.
It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification.
Stay orders are obtained in those proceedings and then, at the end 596 of it all, comes the argument that there has been prolonged delay in implementing the judgment or order.
We believe that the Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it.
If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation And then, the rule of two years will become a handy tool for defeating justice.
The death sentence should not, as far as possible, be imposed.
But, in that rare and exceptional class of cases wherein that sentence is upheld by this Court, the judgment or order of this Court ought not to be allowed to be defeated by applying any rule of thumb.
Finally, and that is no less important, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition, if the death sentence is vacated, are matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed.
The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum".
In the case before us, the sentence of death was imposed upon the petitioners by the learned Sessions Judge, Sangrur, on November 26, 1977.
It was upheld by the High Court on July 18, 1978.
This Court dismissed the Special Leave Petition filed by the petitioners on March 5, 1979.
The matter is pending in this Court since then in one form or another, by reason of some proceeding or the other.
The last of the writ Petitions filed by the petitioners was dismissed by this Court on August 24, 1981.
We do not know why the sentence imposed upon the petitioners has not been executed for more than a year and half.
The Government of Punjab must explain that delay.
We are of the opinion that, in the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court, and this Court, cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence.
On the date when these Writ Petitions came before us, we asked the learned counsel for the petitioners to argue upon the 597 reasons why, apart from the dealy caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time.
Every case has to be decided upon its own facts and we propose to decide this case on its facts.
After hearing the petitioners ' counsel, we will consider the question whether the interests of justice require that the death sentence imposed upon the petitioners should not be executed and whether, in the circumstances of the case, it would be unjust and unfair to execute that sentence now We must take this opportunity to impress upon the Government of India and the State Governments that petitions filed under Articles 72 and 161 of the Constitution or under sections 432 and 433 of the Criminal Procedure Code must be disposed of expeditiously.
A self imposed rule should be followed by the executive authorities rigorously, that every such petition shall be disposed of within a period of three months from the date on which it is received.
Long and interminable delays in the disposal of these petitions are a serious hurdle in the dispensation of justice and indeed, such delays tend to shake the confidence of the people in the very system of justice.
Several instances can be cited, to which the record of this Court will bear testimony in which petitions are pending before the State Governments and the Government of India for an inexplicably long period.
The latest instance is to be found in Cri.
Writ Petition Nos.345 348 of 1983, from which it would appear that petitions filed under article 161 of the Constitution are pending before the Governor of Jammu & Kashmir for anything between 5 to 8 years.
A pernicious impression seems to be growing that whatever the courts may decide, one can always turn to the executive for defeating the verdict of the Court by resorting to delaying tactics.
Undoubtedly, the executive has the power, in appropriate cases, to act under the aforesaid provisions but, if we may remind, all exercise of power is preconditioned by the duty to be fair and quick.
Delay defeats justice.
On the question as to whether the death sentence should not be allowed to be executed in this case, we shall pronounce later after hearing the parties.
In the meanwhile, notice will go to the Government of Punjab.
Order accordingly.
| Appellants along with three others were tried by the Additional Sessions Judge, Ferozepore for offences under Section 302 I.P.C. read with sections 120 B and 149 on the charge that, in pursuance of a conspiracy, they caused the death of five persons and injuries to three others on the night between the 29th and 30th September, 1978 in the village of Kaila.
The background of the incident leading to the crime and furnishing its motive was that certain members of the family of those who were murdered in the instant case were tried for the murder in June 1977, of Buta Singh, the son of accused No. 1 but acquitted.
In order to prove the charges against the accused, the prosecution examined as many as 53 witnesses while the accused examined 16 witnesses in their defence.
The case of the prosecution rested mainly on three categories of evidence : (1) the evidence of the three eye witnesses, Mohinder Singh (PW 15), Naval Singh (PW 16) and Sant Kaur (PW) 247 ; (2) the dying declaration (Exh. PV) made by Sohan Singh ; and (3) the recovery of fire arms and cartidges from the possession of Accused Nos.
3,4,5,6.
and 7.
The Additional Sessions Judge convicted nine out of the ten accused for the offences of conspiracy and murder, sentenced accused nos.
1, 3, 4, 5, 6 and 7 to death and accused nos.
2, 8 and 9 to life imprisonment.
Accused No. 10, Harbans Kaur, wife of accused No. 2 Darshan Singh alias Bhasuri, was acquitted.
The High Court of Punjab and Haryana confirmed the death sentence imposed upon accused nos.
1, 3, 5, 6 and 7, but reduced the sentence of accused No. 4 to lift imprisonment.
Hence the appeals by five persons who are sentenced to death and two who are sentenced to life imprisonment.
Accepting the appeals of accused 1 and 2 and acquitting them, and, while maintaining the convictions of the rest, but altering the sentence of death imposed on accused nos.
3, 5, 6 and 7 to one of life imprisonment, the court 606 ^ HELD: 1 : 1 No rule of law stipulates that an accused whose name is not mentioned in the First Information Report is entitled to an acquittal.
The fact that the names of other accused are not mentioned in the First Information Report was at least a circumstance which the prosecution had to explain [609 D E] In the instant case, the High Court, instead of considering the circumstances in which, and the reasons for which, Mohinder Singh did not mention the names of the other accused in the First Information Report, erroneously took the view that the omission in the F.I.R. was a matter of little consequence since it was made good by the fact that Sohan Singh had mentioned the names of all the accused in his dying declaration, further overlooking the fact that the dying declaration itself was open to grave exception.
[609 E F, 610A] 1 : 2 When it is said that a conviction can rest on a dying declaration, it is implied that it must inspire confidence so as to make it safe to act upon it.
[610 E] Here, if the vital organs of Sohan Singh, according to Dr. Birinder Pal (PW 2) who conducted the postmortem examination on his body, were "completely smashed", it is impossible to believe that he was in a fit state of mind and body to make any kind of coherent or credible statement relating to the circumstances which resulted in his death.
True, he was quite near his creator on the morning of the 30th, dangerously so indeed, so that one may accept that his mind was then free from failings which afflict the generality of human beings, like involving enemies in false charges.
But, Sohan Singh was too ill to entertain any thoughts, good or bad, and he could not possibly have been in a position to make any kind of intelligible statement so as to implicate accused 3 to 9.
His dying declaration cannot therefore, be relied upon.
[610 B D] 2.
Liquor is no lie detector.
The evidence regarding conspiracy, let in through the mouth of Surat Singh (PW 27) an utter stranger, to implicate Accused nos.
1 and 2 to the effect that the conspirators discussed their plans to commit the murders, throwing all caution to winds and in an intoxicated condition cannot be believe.
It cannot be assumed that accused nos.
1 and 2 were so drunk as to overlook the presence of a stranger in their midst and yet not so drunk so as to be unable to discuss the execution of their criminal design.
Once Surat Singh is disbelieved and the story of conspiracy is discounted, the resultant conclusion obviously is the absence of Accused nos.
1 and 2 at the scene of occurrence entitling them to an acquittal [610 F, H, 611 A B] 3.
If age was a circumstance in favour of one of the accused, the same criterion must be applied to all.
More so in a case like this, when a large group of persons took part in the murders and untrue evidence has been mixed up with the true evidence, it becomes difficult to hold any particular accused guilty of any particular act.
[612 E, F] 607
|
vil Appeal No. 536 of 1962.
Appeal from the judgment and decree dated March 26.
1958, of the High Court at Patna in First Appeal No. 340 of .1951.
147 Niren De, Additional Solicitor General, N.D. Karkhanis and B.R.G.K. Achar, for the appellant.
Bishan Narain, P. D. Himmatsinghka section Murthy and B.P. Maheshwari, for the respondent.
The judgment of the Court was delivered by Wanchoo, J.
This is an appeal on a certificate granted by the Patna High Court.
The respondent sued the Union of India as representing G.I.P. Railway, Bombay and E.I.R. Calcutta for recovery of damages for non delivery of 31 bales of piece goods, out of 60 bales which had been consigned to Baidyanathdham from Wadibundar.
This consignment was loaded in wagon No. 9643 on December 1. 1947.
It is not in dispute that the consignment reached Mughalsarai on the morning of December 9, 1947 by 192 On goods train.
After reaching Mughalsarai, the wagon was kept in the marshaling yard till December 12, 1947.
It wag sent to Baidyanadham by 214 On goods train from Mughalsarai at 6 40 p.m. on December 12, 1947 and eventually reached Baidyanathdham on December 21, 1947.
The respondent who was the consignee presented the railway receipt on the same day for delivery of the consignment.
Thereupon the railway delivered 29 bales only to the respondent and the remaining 31 bales were said to be missing and were never delivered.
Consequently on August 311948, notice was g:yen under section 80 of the Civil Procedure Code and this was followed by the suit out of which the present appeal has arisen on November 20, 1948.
The consignment had been booked under risk note form Z which for all practical purposes is in the same terms as risk note form B.
The respondent claimed damages for non delivery on the ground that the non delivery was due to the misconduct of the servants of the railway, and the claim was for a sum of Rs. 36,461/12/ .
The suit was resisted by the appellant and a number of defences were taken.
In the present appeal we are only concerned with two defences.
It was first contended that the suit was barred by section 77 of the Indian Railways Act, No. IX of 1890, (hereinafter referred to as the Act), inasmuch as notice required therein was not given by the respondent.
Secondly it was contended that the consignment was sent under risk note form Z and under the terms of that risk note the railway was absolved from all responsibility for loss, destruction or deterioration of goods consigned thereunder from any cause whatsoever except upon proof of misconduct of the railway of its servants.
and that the burden of proving such misconduct subject to certain exceptions was on the respondent and that the respondent had failed to discharge that burden.
Further in compliance with the terms of the risk note, the railway made a disclosure in the written statement as to how the consignment was dealt with throughout the period it was in its possession or control.
The case of the railway in this connection was that there was a theft in the running train between Mughalsarai and 148 Buxar on December 12, 1947 and that was how part of the con signment was lost.
As the loss was not due to any misconduct on the part of the railway or its servants and as the respondent had not discharged the burden which lay on him after the railway had given evidence of how the consignment had been dealt with, there was no liability on the railway.
On the first point, the trial court held On the basis of certain decisions of the Patna High Court that no notice under section 77 was necessary in a case of non delivery which was held to be different from loss.
On the second point relating to the responsibility of the railway on the ' basis of risk note form Z, the trial court held that it had not been proved that the loss was due to misconduct of the railway or its servants.
It therefore dismissed the suit.
Then followed an appeal by the respondent to the High Court.
The High Court apparently upheld the finding of the trial court on the question of notice under s.77.
But on the second point the High Court was of opinion that there was a breach of the condition of disclosure provided in risk note Z under which the consignment had been booked, and therefore the appellant could not take advantage of the risk note at all and the liability of the railway must be assessed on the footing of a simple bailee.
It therefore went on to consider the liability of the railway as a simple bailee and held on the ' evidence that the railway did not take proper care of the wagon at Mughalsarai and that in all probability the seals and rivets of the wagon had been allowed to be broken there and all arrangements had been completed as to how the goods would be removed from the wagon when the train would leave that station and this could only be done either by or in collusion with the servants of the railway at Mughalsarai.
In this view of the matter the High Court allowed the appeal and decreed the suit with costs As the judgment was one of reversal and the amount involved was over rupees twenty thousand, the High Court granted a certificate.
and that is how the matter has come up before us.
We .shall first deal with the question of the notice.
We are in this case concerned with the Act as it was in 1947 before its amendment by Central Act 56 of 1949 and Central Act No. 39 of 1961 and all references in this judgment must be read as applying to the Act as it was in 1947.
Now section 77 inter alia provides that a person shall not be entitled to compensation for the loss, destruction or deterioration of animals or goods delivered to be carried ' by railway, unless his claim to compensation has been preferred in writing by him or on his behalf to the railway administration within six months from the date of the delivery of the animals or goods for carriage by railway.
There was a conflict between the High Courts on the question whether non delivery of goods carried by railway amounted to less within the meaning of section 77.
Some High Courts (including the Patna High Court) held that a case of non delivery was distinct from a case of loss and no notice under section 77 was necessary .in the case of non delivery.
Other High Courts however took a contrary view and held that a case of non delivery also was a case of loss.
This conflict has now been resolved by the decision of this Court in Governor General in Council vs Musaddilal (1) and the view taken by the Patna High Court has been overruled.
This Court has held that failure to deliver goods is the consequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction, and therefore notice under section 77 is necessary in the case of non delivery which arises from the loss of goods.
Therefore notice under section 77 was necessary in the present case.
It is true that the respondent stated in the plaint in conformity with 'the view of the Patna High Court prevalent in Bihar that no notice under s.77 was necessary as it was a case of non delivery.
But we find in actual fact that a notice was given by the respondent to the railway on April 10, 1948 to the Chief Commercial Manager, E.I.R. in which it was stated that 60 bales of cloth were booked for the respondent but only 29 bales had been delivered and the balance of 31 bales had not been delivered.
Therefore the respondent gave notice that if the bales were not delivered to him within a fortnight, he would file a suit for the recovery of Rs. 36,461/12/ , and the details as to how the amount was arrived at were given in this notice.
It is true that the notice was not specifically stated to be a notice under section 77 of the Act but it gave all the particulars necessary in a notice under that section.
This notice or letter was sent within six months of the booking of the consignment.
A similar case came up before this Court in Jetmull Bhojraj vs The Darjeeling Himalayan Railway Co. Ltd.(2) and this Court held that the letter to the railway in that case was sufficient notice for the .purpose of section 77 of the Act. 'Following that decision we hold that the letter in the present case which is even more explicit is sufficient notice for the purpose of S: 77 of the Act.
We may add that the learned Additional Solicitor General did not challenge this in view of the decision in Jetmull Bhojraj 's case(2).
This brings us to the second question raised in the appeal.
We have already indicated that the High Court held that as the burden of disclosure which was on the railway had not been discharged there vas a breach of one of the terms of the risk note Z and therefore the risk note did not apply at all and the responsibility of the railway had to be assessed under ' section 72 (1) of the Act.
This view of the law has been contested on behalf of the appellant and it is urged that after the risk note is executed either in form Z or in form B, the responsibility of the railway must be judged in accordance with the risk note even if there is some breach of the condition as to disclosure.
It may be mentioned that risk note form Z and risk note form B are exactly similar in their terms insolar as the responsibility of the railway is concerned for risk note 150 form B applies to individual consignment while form Z is executed by a party who has usually to send goods by railway in large numbers.
Risk note form Z is general in its nature and applies to all consignments that a party may send after its execution.
It is proved that the consignment in this case was covered by risk note form Z.
The main advantage that a consignor gets by sending a consignment under from Z or form B is a specially reduced rate as compared t3 the ordinary rate at which goods are carried by the railway and it is because of this specially reduced rate that the burden is thrown on the consignor in a suit for damages to prove misconduct on the part of the railway or its servants in the case of loss etc.of the goods, subject to one exception.
On the other hand the argument on behalf of the respondent is that the view taken by the Patna High Court is right and it is the duty of the railway administration under the risk note, as soon as there is non delivery and a claim is made on the railway for compensation, to disclose how the consignment was dealt with throughout while it was in its possession or control and that its failure to do so results immediately in breach of the contract with the result that the responsibility of the railway has to be judged solely on the basis of section 72 (1) of the Act ignoring the risk note altogether.
Section 72 (1) defines the responsibility of the railway administration for the loss, destruction or deterioration of animals or goods delivered to the administration to be carried by railway to be the same as that of a bailee under sections 152 and 161 of the , subject to other provisions of the Act.
Sub section (2) of section 72 provides that an agreement purporting to limit the responsibility under section 72 (1) can be made subject to two conditions, namely, (i) that it is in writing signed by or on behalf of the person sending or delivering to the railway administration the animals or goods, and (ii) that it is in a form approved by the Governor General.
Sub section (3) of section 72 provides that nothing in the common law of England or in the Carriers Act 1865 regarding the responsibility of common carriers with respect to carriage of animals or goods shall affect the responsibility as in this section defined of the railway administration.
So the responsibility of the railway for loss etc. is the same as that of a bailee under the Indian Contract Act.
But this responsibility can be limited as provided in section 72 (2).
For the purpose of limiting this responsibility risk notes form B and form Z have been approved by the Governor General and where goods are booked under these risk notes the liability is limited in the manner provided thereunder.
It is therefore necessary to set out the relevant terms of the risk note, for the decision of this case will turn on the provisions of the risk note itself.
The risk note whether it is in form B or form Z provides that where goods are carried at owner 's risk on specially reduced rates, the owner agrees or undertakes to hold the railway administration 151 "harmless and free from all responsibility for any loss, deterioration or destruction of or damage to all or any of such consignment from any cause whatever, except upon proof that such loss, destruction, deterioration or damage arose from the misconduct on the part of the railway administration or its servants".
"thus risk notes B and Z provide for complete immunity of the railway except upon proof of misconduct.
But to this immunity there is a proviso and it is the construction of the proviso that arises in the present appeal.
The proviso is in these terms: "Provided that in the following cases: (a) Non delivery of the whole of a consignment packed in accordance with the instruction laid .down in the tariff or where there are no instructions, protected otherwise than by paper or other packing readily removable by hand and fully addressed, where such non delivery is not due to accidents to train or to fire; (b) . . . "The railway administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control, and if necessary, to give evidence thereof before the consignor is called upon to prove misconduct, but, if misconduct on the part of the railway administration or its servants cannot be fairly inferred from such evidence, the burden of proving such misconduct shall lie upon the consignor".
It is not in dispute that the present case comes under cl(a) of the risk note.
An exactly similar provision in risk note form B came up for consideration before the Privy Council in Surat Cotton Spinning & Weaving Mills vs Secretary Of State for India in Council, ( ') and the law on the subject was laid down thus at pp.181 182: "The first portion of the proviso provides that the Rail way Administration shall be bound to disclose to the consignor 'how the consignment was dealt with through out the time it was in its possession or control, and, if necessary to give evidence thereof, before the consignor is called upon to prove misconduct '.
In their Lordships ' opinion, this obligation arises at once upon the occurrence of either of cases (a) or (b), and is not confined to the stage of litigation.
Clearly one object of the provision is to obviate, if possible, the necessity for litigation.
On the other hand, the closing words of the obligation clearly apply to the litigious stage.
As to the extent of the disclosure, it is confined to the period during which the (1) [1927] L.P LXIV: 152 consignment was within the possession or control of the Railway Administration; it does not relate, for instance, to the period after the goods have been the fatuously removed from the premises.
On the other hand, it does envisage a precise statement of how the consignment was dealt with by the Administration or its servants.
The character of what is requisite may vary according to the circumstances of different cases, but, if the consignor is not satisfied that the disclosure has been adequate, the dispute must be judicially, decided.
As to the accuracy or truth of the information given, if the consignor is doubtful or unsatisfied, and considers that these should be established by evidence, their Lordships are of opinion that evidence before a Court of law is contemplated, and that as was properly done in the present suit, the Railway Administration should submit their evidence first at the trial.
"At the close of the evidence for the Administration two questions may be said.to arise, which it is important to keep distinct.
The first question is not a mere question of.procedure, but iS whether they have discharged their obligation of disclosure, ' and, in regard to this, their Lordships are of opinion that the terms of the Risk Note require a step in procedure, which may be said to :be Unfamiliar in the practice of the Court; if the consignor is not satisfied with the ' disclosure made their Lordships are clearly of opinion that is for him tO say so, and to call on the Administration to fulfill their obligation .Under the contract, and that the Administration should then have the opportunity to meet the demands of the consignor before their case is closed; any question as to whether the consignor 's demands go beyond the obligation should be then determined by the Court.
If the Administration fails to take the opportunity to satisfy the demands of the consignor so far as endorsed by the Court, they will be in breach of their contractual obligation of disclosure.
"The other question which may be said to arise at this stage is whether misconduct may be fairly inferred from the evidence of the Administration; if so, the consignor is absolved from his original burden of proof.
But, in this case, the decision of the Court may be given when the evidence of both sides has been completed.
It is clearly for the Administration to decide for themselves whether they have adduced all the evidence which they consider desirable in avoidance of such fair "inference of misconduct".
They will doubtless keep in mind the provisions of s.114 of the Indian Evidence Act".
With respect we are of opinion that this exposition of the law relating to risk note B applies also to risk note Z and we accept it 153 as correct.
Thus the responsibility of the railway.
administration to disclose to the consignor how the consignment was dealt with thrOughOut the time it Was in its possession or control arises at once under the agreement in either of the cases (a) or (b) and is not confined to the stage of litigation.
But we are not prepared to accept the contention on behalf of the respondent that this responsibility to make full disclosure arises immediately the claim is made by the consignor and if the railway immediately on such claim being made does not disclose all the facts to the consignor, there is immediately a breach of this term of the contract contained in the risk note.
It is true that the railway is bound to disclose to the consignor how the Consignment was dealt with throughout the time it was in its possession even before any litigation starts; but we are of opinion that such disclosure is necessary only where the consignor specifically asks the railway to make :the disclosure.
If no such disclosure is asked for, the administration need not make it before the ' litigation.
In the present case there is ' no proof that any disclosure was asked for in this behalf by the consignor at any time before the, suit was filed.
Therefore if the railway did not disclose how the consignment was dealt with throughout before the suit was filed, it cannot be said to have committed breach of this term of the contract.
The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants.
if the disclosure is asked for before the litigation commences and is not given or the disclosure is given but it is not considered to be sufficient by the consignor, the dispute has to be judicially decided and it is for the court then to say if a suit is brought whether there has been Ia breach of this term ' of the contract.
After this, comes the stage where the consignor or the consignee ' being dissatisfied brings a suit for compensation.
At that stage evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation to the Consignor or which might have been made in the written statement in reply to the suit.
When the railway administration has given its evidence in proof of the disclosure and the plaintiff is not satisfied with the disclosure made in the evidence, the plaintiff is entitled to ask the court to call upon the railway to fulfil its obligation under the contract and the railway should then .have the opportunity of meeting the demands of the plaintiff before its case is closed.
Thus in addition to the evidence that the railway may adduce on its own and in doing so the railway has necessarily to keep in mind the provisions of section 114 of the Indian Evidence Act, the plaintiff can and should draw the attention of the court if he feels that full disclosure has not been made.
, In .that case he can ask the court to require the railway to make further disclosure and should tell the court what further disclosure he wants.
It is then for the court to decide whether the further disclosure .desired by the plaintiff should be made by the railway, and if the court decides that such further disclosure 154 should be made the railway has to make such further disclosure as the court orders it to make on the request of the plaintiff.
If the railway fails to take the opportunity so given to satisfy the demands of the plaintiff, endorsed by the court, the railway would be in breach of its contractual obligation of disclosure.
It is at this stage therefore that the railway can be truly said to be in breach of its contractual obligation of disclosure, and that breach arises because the railway failed to disclose matters which the court on the request of the plaintiff asks it to disclose.
The question then is what is the effect of this breach.
It is remarkable that the Privy Council did not lay down that as soon as the breach is made as above the risk note comes to an end and the responsibility of the railway is that of a bailee under section 72 (l) of the Act.
In the observations already quoted, the Privy Council has gone on to say that after this stage is over, the question may arise whether misconduct may be fairly inferred from the evidence of the railway.
It seems to us therefore that even if there is a breach of the term as to full disclosure it does not bring the contract to an end and throw the responsibility on the railway as if the case was a simple case of responsibility under section 72(1) of the Act; the case is thus not assimilated to a case where the goods are carried at the ordinary rates at railway risk.
The reason for this seems to be that the goods have already been carried at the reduced rates and the consignor has taken advantage of that term in the contract.
Therefore, even though there may be a breach of the term as to complete disclosure by the railway the consignor cannot fall back on the ordinary responsibility of the railway under section 72 (1) of the Act as if the goods had been carried at railway 's risk at ordinary rates, for he has derived the advantage of the goods having been carried at a specially reduced rates.
The risk note would in our opinion continue to apply and the court would still have to decide whether misconduct can be fairly inferred from the evidence of the railway, with this difference that where the railway has been in breach of its obligation to make full disclosure misconduct may be more readily inferred and section 114 of the Indian Evidence Act more readily applied.
But we do not think that the conditions in the risk note can be completely ignored simply because there has been a breach of the condition of complete disclosure.
The view of the Patna High Court that as soon as there is breach of the condition relating to complete disclosure the risk note can be completely ignored and the responsibility of the railway judged purely on the basis of section 72 (1) as if the goods were carried at the ordinary rates on railway 's risk cannot therefore be accepted as correct.
We may point out that in Surat Cotton Spinning and Weaving Mills Limited 's case, (I) the plaintiffs wanted the guard of the train to be examined and he was undoubtedly a material witness.
Even so the witness was not examined by the railway.
Finally therefore the Privy council allowed the appeal with these observations at p. 189: "While their Lordships would be inclined to hold that the respondent, by his failure to submit the evidence of Rohead, was in breach of his contractual obligation to give the evidence necessary for disclosure of how the consignment was dealt with, they are clearly of opinion that the failure to submit the evidence of Rohead, in the circumstances of this case, entitles the court to presume, in terms of section 114 (g) of the Evidence Act, that "Rohead 's evidence, if produced, would be unfavorable to the respondent, and that, in consequence, misconduct by complicity in the theft of some servant, or servants of the respondent may be fairly inferred from the respondent 's evidence".
These observations show that even though there may be a breach of the obligation to give full disclosure that does not mean that the risk note form Z or form B can be ignored and the responsibility of the railway fixed on the basis of section 72 (1) as a simple bailee.
If that was the effect of the breach, the Privy Council would not have come to the conclusion after applying section 114 (g) of the Evidence Act in the case of Rohead that misconduct by complicity in the theft of some servant or servants of the railway may be fairly inferred from the railway 's evidence.
The appeal was allowed by the Privy Council after coming to the conclusion that misconduct by the servant or servants of the railway might be fairly inferred from the evidence including the presumption under section 114(g) of the Evidence Act.
It seems to us clear therefore that even if there is a breach of the obligation to make full disclosure in the sense that the railway does not produce the evidence desired by the plaintiff in the suit even though the request of the plaintiff is endorsed by the court, the effect of such breach is not that the risk note is completely out of the way, the 'reason for this as we have already indicated being that the consignor has already taken advantage of the reduced rates and therefore cannot be allowed to ignore the risk note altogether.
But where there is a breach by the railway of the obligation to make full disclosure the court may more readily infer misconduct on the part of the railway or its servants or more readily presume under section 114 (g) of the Evidence Act against the railway.
This in our opinion is the effect of the decision of the Privy Council in Surat Cotton Spinning and Weaving 'Mills Limited 's case(1).
As we have already said we are in respectful agreement with the law as laid down there.
So far as the present appeal is concerned, there was no de by the consignor for disclosure before the suit.
Even after the suit was filed there was no statement by the respondent at any (1) [1937] L.R. 64 I.A. 176.
156 stage that the disclosure made by the appellant in the evidence was in any way inadequate.
The respondent never told the court after the evidence of the railway was over that he was not satisfied with the disclosure and that the railway be asked to make further disclosure by producing such further evidence as the respondent wanted.
In these circumstances it cannot be said in the present case that there was any breach by the railway of its responsibility to make full disclosure.
In the circumstances we are of opinion that the risk note would still apply and the court would have to decide whether misconduct on the part of the railway can be fairly inferred from the evidence produced by it.
If the court cannot fairly infer misconduct from the evidence adduced by the railway, the burden will be on the respondent to prove misconduct.
that burden, if it arises, has clearly not been discharged for the respondent led no evidence on his behalf to discharge the burden.
We therefore turn to the evidence to see whether from the evidence produced by the railway a fair inference of misconduct of the railway or its servants can be drawn on the facts of this case.
It is not in dispute in this case that the wagon containing the consignment arrived intact at Mughalsarai on December 9, 1947.
Besides there is evidence of Damodar Prasad Sharma, Assistant Trains Clerk, Mughalsarai, P.W. 14, who had the duty to receive trains at the relevant time that 192 Dn. goods train was received by him on line No. 4 and that there were two watchmen on duty on that line for examining the goods train and they kept notes of the same.
He also produced the entry relating to the arrival of the train and there is nothing in the entry to show anything untoward with.this wagon when the train arrived at Mughalsarai.
His evidence also shows that the train was sent to the marshaling yard on December 11, 1947.
Finally there is the evidence of Chatterji (P.W. 8) who is also an Assistant Trains Clerk.
It was his duty to make notes with respect to goods trains which left Mughalsarai.
He stated that this wagon was sent by train No. 214 on December 12, 1947 in the evening.
He also stated that the wagon was in good condition and produced the entry relating to this wagon.
It appears however from his evidence that rivets and seals are examined by the watch and ward staff and they keep record of it.
Apparently therefore he did not actually inspect the wagon before it left though he says that it was in good condition.
The relevance of his evidence however is only this that in his register showing the dispatch of trains there is no entry to the effect that there was any thing wrong with this wagon when it was dispatched.
The most important evidence however is of the guard of the train, Ram Prasad Ram (P.W. 2).
He stated that before the train started from Mughalsarai he patrolled both sides of it and the place from where the train started was well lighted and watch and ward staff also patrolled the area.
He also stated that the rivets and seals of all the wagons in the train were checked at Mughal sarai and there was apparently nothing wrong with them.
Now if 157 the evidence of the guard is believed it would show that the wagon containing the consignment was intact at Mughalsarai upto the time 214 goods train including this wagon left Mughalsarai.
If so there would be no reason to hold that anything was done to the wagon before the train left Mughalsarai.
It may be mentioned that the trial court accepted the evidence of the guard while the High Court was not prepared to believe it.
On a careful consideration of the evidence of the guard we see no reason why his evidence should not be believed.
It is obviously the duty of the guard to see that the train was all right, when he took charge of it.
It appears that in discharge of his duty the guard patrolled the train on both sides and looked at rivets and seals to see that they were intact.
It is, however, urged that the guard 's evidence does not show that the seals which he found intact were the original seals of Wadibundar and the possibility is not ruled out that the original seals might have been tampered with and new seals put in while the train was in the marshaling yard at Mughalsarai for two days, as the evidence of the watch and ward staff had not been produced.
It would perhaps have been better if the evidence of the watch and ward staff had been produced by the railway; but if the evidence of the guard is believed that the seals and rivets were intact when the train left Mughalsarai, the evidence of the watch and ward staff is ' not necessary.
It is true that the guard does not say that the seals were the original seals of Wadibundar but it appears from the evidence of Jagannath Prasad (P.W. 9) who was the Assistant Station Master at Dildarnagar that he found when the train arrived there that the northern flapdoors of the wagon were open while southern flapdoors were intact with the original seals.
This evidence suggests that the original seals could not have been tampered with when the train left Mughalsarai and that the guard 's evidence that seals and rivets were intact shows that nothing had happened to the wagon while it was at Mughalsarai.
Further it is also in evidence that there is ample light in the marshalling yard at Mughalsarai and that watch and ward staff is posted there as well.
So the chances of tampering with the seals and rivets in the marshalling yard in the circumstances are remote.
As such the evidence of the guard that the seals and rivets were intact when he left with the train on the evening of December 12, would apparently exclude the possibility that there was any tampering with the wagon before it left Mughalsarai.
It is true that on the last day when the evidence for the railway was recorded and the guard had been recalled for further cross examination it was suggested to him that the railway servants at Mughalsarai had removed the bales and were responsible for the theft.
He however denied that.
But it is remarkable that if the respondent was dissatisfied with the evidence of the guard which was to the effect that the wagon was all right when he left Mughalsarai with the train on December 12, it did not ask the court to order the railway to produce the evidence of the watch and ward staff with respect to this wagon while it was in the marshalling yard at Mughalsarai.
The respondent could ask for such disclosure.
If the court L/B(D)2SCI 12 158 had accepted the request and the railway had failed to produce the evidence of the watch and ward staff it may have been possible to use section 114 of the Evidence Act and hold that the watch and ward staff having not been produced their evidence, if produced, would have gone against the railway.
But in the absence of any demand by the respondent for the production of the watch and ward staff which he could ask for, we see no reason why the statement of the guard to the effect that seals and rivets of the wagon were intact when he left Mughalsarai with the train should not be accepted.
In the absence of any demand by the respondent for the production of watch and ward staff his mere suggestion that the railway servants at Mughalsarai might have committed the theft cannot be accepted.
There is the further evidence of the guard as to what happened between Mughalsarai and Buxar.
It appears between these two stations the train stops only at Dildarnagar.
The evidence of the guard however is that the train suddenly stopped between the warner and home signals before it reached Dildarnagar.
He therefore got down to find out what the trouble was.
He found that the hosepipe between two wagons had got disconnected and this resulted in the stoppage of the train.
The evidence further is that the hosepipe was intact when the train started from Mughalsarai.
He made a note of this in his rough memo book which was produced.
It is noted by him that the northern flap door of this wagon was open.
He reconnected the hosepipe and went up to Dildarnagar.
There he reported the matter to the station staff.
His further evidence is that there were three escorts with the train and that they were guarding the train when the train was standing between the warner and the home signals before it reached Dildarnagar.
Nothing untoward was reported to him by these escorts.
It was at this stop between the two signals that the guard noticed that the rivets and seals of this wagon on one side had been broken.
The case of the railway is that there was theft in the running train between Mughalsarai and Buxar and that is how part of the consignment was lost.
The evidence of the guard does suggest that something happened between Mughalsarai and Dildarnagar and then between Dildarnagar and Buxar.
In addition to this the evidence of the station staff at Dildarnagar is that the flapdoors of this wagon were found open when the train arrived at Dildarnagar.
The contents were not checked at Dildarnagar as there was no arrangement for checking at that station.
The wagon was resealed at Dildarnagar, and the fact was noted in the station master 's diary.
It may be mentioned that the evidence of the station staff was that the wagon was resealed though the guard says that it was riveted also at Dildarnagar.
The entry in the guard 's rough memo however is only that the wagon was resealed.
The guard certainly says that it was rivetted also at Dildarnagar but that is not supported by the station staff and the entry in the guard 's rough memo.
It seems that the statement of the guard may be due to some error on his 159 part.
That may also explain why, when the train arrived at Buxar, the flapdoor again was found open, for it had not been rivitted at Dildarnagar.
Then the evidence of the Buxar station staff is that the northern flapdoors of this wagon were open when the train arrived at Buxar.
It was then resealed and rivetted and was detached for checking.
The checking took place on December 14th at Buxar.
It was then found that one side had the original seals of Wadibun dar while the other side had the seals of Buxar.
On checking the wagon, 27 bales were found intact, covering of one bale was torn and one bale was found loose and slack.
This evidence asto what happened between Mughalsarai and Buxar thus makes it probable that there was theft in the running train between Mughalsarai and Buxar and that may account for the loss of part of the consignment.
It is however contended on behalf of the respondent that no evidence was produced from Mughalsarai asto what happened while the wagon was in the marshalling yard and that the seal book which is kept at every railway station containing entries of resealing when a wagon is resealed was not produced from Mughalsarai and an adverse inference should be drawn from this non production.
We are however of opinion that the evidence of the guard to the effect that the seals were intact when he left Mughalsarai with the train is sufficient to show that the wagon was in tact with the original seals when it left Mughalsarai and there fore it is not possible to draw any adverse inference from the non production of the watch and ward staff or the seal book of Mughalsarai in the circumstances of this case.
It would have been a different matter if the respondent had asked for the production of the seal book as well as the evidence of the watch and ward staff.
But the respondent contented itself merely with the suggestion that a theft might have taken place at Mughalsarai which was denied by the guard and did not ask the court to order the railway to produce this evidence.
In these circumstances in the face of the evidence of the guard and the fact that one seal on the southernside of the door was of the original station.
we do not think that it is possible to draw an adverse inference against the railway on the ground that the evidence of the watch and ward staff and the seal book at Mughalsarai were not produced.
The seal book would have been of value only if the wagon had been resealed at Mughalsarai but there is in our opinion no reason to think that the wagon had been resealed at Mughalsarai after the evidence of the guard that he found the seals and rivets intact when he left Mughalsarai with the train.
On a careful consideration of the evidence therefore we are of opinion that a fair inference cannot be drawn from the evidence of the railway that there was misconduct by the railway or its servants at Mughalsarai during the time when the wagon was there.
If the evidence of the guard is accepted, and we do accept it, there can be no doubt that the loss of the goods took place be case of theft in the running train between Mughalsarai and 160 Buxar.
There is no evidence on behalf of the respondent to prove misconduct and as misconduct cannot fairly be inferred from the evidence produced on behalf of the railway, the suit must fail.
We therefore allow the appeal, set aside the judgment and decree of the High Court and restore that of the Additional Subordinate Judge.
In the circumstances of this case we order parties to bear their own costs throughout.
Appeal allowed.
| The respondent Association was a mutual insurance concern carrying on miscellaneous insurance business.
The objects of the Association included provision of help anywhere in the world in respect of expenses of accommodation and treatment in nursing homes for members and their dependents.
The members were required to pay a monthly premium.
In the assessments for the assessment years 1949 50 to 1953 54 the Income tax Officer taxed the reserves for payment of income tax which had been debited to the profit and loss account.
The Appellate Assistant Commissioner as well as the Appellate Tribunal upheld the Income tax Officer 's order.
The questions arising in the proceedings were; (1) whether the balance of profits of a mutual insurance concern were included in the definition of the word 'income ' and if so (2) whether reserves for income tax could be taxed.
At the instance of the respondent a reference was made to the High Court.
That Court held that the surplus, miscalled profit, arising to the company from the miscellaneous insurance transactions of mutual character was not assessable under the Indian Income tax Act and that in any event, the assessee was entitled to deduct the reserves.
The Revenue appealed to this Court with certificate.
HELD: (i) In section 2(6C), the Legislature has evinced a clear intention to include the balance of profits under r. 6 within the meaning of the word 'income ' in 6. 3 of the Indian Income Tax Act, and accordingly such balance of profits is taxable.
[639B C] Ayrshire Employers Mutual Insurance Association Ltd. vs Commissioner of Inland Revenue, , distinguished.
"Profits." in r. 6 cannot be said to mean "taxable profits".
Rule 6 refers to 'balance of profits ' as disclosed in the accounts submitted to the.
Superintendent of Insurance.
The Superintendent of Insurance is not concerned with taxable profits.
What he is concerned with is the balance of profits under the Insurance Act.
[638E F] Nor can the term 'profits ' in r. 6 be interpreted in the narrow sense of including only profits from investments and other activities of a mutual insurance company.
Rule 6 deals with "balance of profits" as a composite thing.
It is impossible to dissect this composite thing.
[639A B] Bombay Mutual Life Assurance Society Ltd. vs Commissioner of Income tax, Bombay City, , affirmed.
(ii) The Insurance Act makes detailed provisions to ensure the true valuation of assets and the determination of the true "balance of profits" of an insurance business and r. 6 should be construed in the light of this background.
[639G H] 633 Pandyan Insurance Company Ltd. Madurai vs The Commissioner Income tax, Madras, ; , referred to.
Examining r. 6 in the light of this background.
the intention of the rule seems to be that the.
balance of profits as disclosed by the accounts submitted to.
the Superintendent of Insurance and accepted by him would be binding on the Income Tax Officer, except that the Income Tax Officer would be entitled to exclude expenditur.e other than expenditure permissible under the provisions of section 10 of the Act.
In the present case it was common ground between the parties that the reserves which were added to the balance of profits were not expenditure.
The High Court rightly held that the reserve for income tax could not be taxed.
[639H 640B]
|
Appeal No. 414 of 1960.
Appeal from the judgment and decree dated September 25, 1958, of the Mysore High Court in Regular Appeal (B) No. 256 of 1956.
Naraindas C. Malkani and G. Gopalakrishnan, for the appellant.
Bishan Narain and section P. Verma, for the respondent No. 1. 1962.
December 12.
The judgment of the Court was delivered by SUBBA RAO, J.
This appeal on certificate relates to an internal dispute of the members of a 4 Masonic Lodge called the "Lodge Victoria No. 363 S.C." at Belgaum.
There is a Scotish institution known as "Grand Lodge of Ancient Free and Accepted Masons of Scotland" at Edinburgh, hereinafter called the "Grand Lodge of Scotland".
Under its supervision there arc Provincial or District Grand Lodges spread throughout the world.
There are Daughter Lodges under the superintendence of the District Grand Lodges.
The Grand Lodge of Scotland is governed by its own written Constitution and Laws.
There is also a separate Constitution and Laws for every District Grand Lodge.
One such District Grand Lodge known as "The Grand Lodge of All Scotish Freemasonary in India and Pakistan" has its headquarters at Bombay.
The aforesaid daughter Lodge at Belgaum is directly under the said District Grand Lodge and is governed by the Constitution and Laws of the latter.
The appellant was a member of the lodge Victoria, having joined it in the year 1948.
On October 16, 1952, the second respondent made a complaint against the appellant to the Master, Lodge Victoria, alleging that the appellant was guilty of 12 masonic offences.
It was alleged therein that, as the appellant had committed masonic offences, he should be tried by the Lodge for the charges levelled against him under Law 198 of the Constitution.
On October 20, 1952, notice of the said complaint was issued to the appellant and he was required to send to the Secretary of the Lodge his answers to the charges within 14 days from the date of the notice.
He was also informed that he was entitled to be present and to state his defence at the special meeting to be held on November 8, 1952.
On the same day, the Secretary of the Lodge sent notices to all the members of the Lodge asking them to attend the said special meeting convened for considering and 5 passing judgment on the said complaint.
On October 27, 1952, the appellant submitted his answer in extenso to the various charges levelled against him in the complaint; in that answer he requested that "my complete replies be read in toto to the brethren assembled to decide this matter and I be informed of the total number of brethren present and the number of votes cast one way or the other.
" A perusal of that reply also shows that the appellant under stood the charges levelled against him as relating to certain offences alleged to have been committed by him and his reply proceeded on that basis.
On November 8, 1952, the special meeting of the Lodge was held and the minutes show that 18 members attended the meeting, that each charge was read at the meeting, that comments of the members were invited and that decision was taken on each of the charges.
Each of the charge was put to vote and the members present unanimously held that every one of the charges levelled against the appellant was established.
In the result they passed a resolution excluding the appellant from the Lodge until the exclusion was confirmed by the District Grand Lodge under Law 199 of the Constitution.
On November 15, 1952, the said decision was communicated to the appellant.
On November 24, 1952, the appellant preferred an appeal against that order to the District Grand Lodge.
On October 5, 1953, a meeting of the District Grand Lodge was convened to consider the appeal and the appeal was dismissed.
It was noted in the proceedings of the District Grand Lodge that though earlier an adjournment was given to enable the appellant to appear in person at the meeting, he remained absent.
On a further appeal to the Grand Lodge of Scotland, the said Lodge considered the sentence imposed on the appellant as one of "suspension sine die" and recommended to the Lodge Victoria to review the suspension after a period of 12 months if the appellant applied for reinstatement.
It does not appear that the appellant filed any application for review.
On September 7, 1954, the appellant instituted a suit in the Court of the Civil Judge, Senior Division, Belgaum, for a declaration that the resolution of the Victoria Lodge dated November 8, 1952, was illegal and void and that he continued to be a member of the Lodge despite the resolution, for an injunction to restrain the officers and servants of the said Lodge from preventing him from exercising his rights therein, and for recovery of damages.
To that suit he made the Victoria Lodge, the first defendant ; the complainant, the second defendant ; the Secretary of the Lodge, the third defendant ; and the District Grand Lodge, Bombay, the fourth defendant.
The defendants contested the suit.
The learned Civil judge dismissed the suit.
The appeal filed by the appellant to the High Court of Mysore was also dismissed.
The present appeal has been filed on a certificate issued by the said High Court.
Learned counsel for the appellant raised before us all the contentions which his client had unsuccessfully raised in the courts below.
Before we advert to the said contentions it would be convenient to notice briefly the law on the subject relevant to the present enquiry.
The source of the power of associations like clubs and lodges to expel their members is the contract on the basis of which they become members.
This principle has been restated by Lord Morton in Bonsor vs Musicians ' Union, (1).
There, one Bonsor, who became a member of a trade union, was expelled.
In that context Lord Morton observed : "When Mr. Bonsor applied to join the respon dent union, and his application was accepted, a contract came into existence between Mr. Bonsor and the respondent, whereby Mr. Bonsor agreed to abide by the rules of the (1) ,127.7 respondent union, and the union impliedly agreed that Mr. Bonsor would not be excluded by the union or its officers otherwise than in accordance with the rules".
This contractual origin of the rule of expulsion has its corollary in the cognate rule that in expelling a member the conditions laid down in the rules must be strictly complied with.
In Maclean vs The Workers ' Union, (1), the contractual foundation of the power is described thus : "In such a case as the present, where the tribunal is the result of rules adopted by persons who have formed the association known as a trade union, it seems to me reasonably clear that the rights of the plaintiff against the defendants must depend simply on the contract, and that the material terms of the contract must be found in the rules".
Proceeding on that basis,the learned Judge observed: "It is certain, therefore, that a domestic tribunal is bound to act strictly according to its rules and is under an obligation to act honestly and in good faith." The same idea was expressed by the Calcutta High Court in Ezra vs Mahendra Nath Banerji (1) thus : ". .
Where the rule provides in any particular respect that some condition must be fulfilled, then that condition must be strictly complied with, since the power of expulsion is itself dependent on the terms of the rule."
The next question is whether the doctrine of strict compliance with the rules implies that every minute deviation from the rules, whether substantial or not, would render the act of such a body void.
The answer to this question will depend upon the (1) , 623.(2) I.L.R. , 109, 8 nature of the rule infringed ; whether a rule is mandatory or directory depends upon each rule, the purpose for which it is made and the setting in which it appears.
We shall consider this aspect of the doctrine when we deal with the argument of the learned counsel that in the present case the rules have not been complied with.
The scope of the jurisdiction of a civil court vis a vis the decisions of tribunals is also well settled.
In Maclean vs The Workers ' Union Maugham,J., observed: "It appears to me that we have no power to review the evidence any more than have a power to say whether the tribunal came to a right conclusion."
Much to the same effect the judicial Committee observed in L.A.P.0 ' Beilly vs C.C. Gittens, (2). ". . .
It is important to bear in mind that neither the learned.
Judge nor their Lordships ' Board is " entitled to sit as a Court of appeal from the decisions of a domestic tribunal such as the Stewards of the Trinidad Turf Club".
Later on the Privy Council stated: "All these matters, however, are essentially matters for the domestic tribunal to decide as it thinks right.
Provided that the tribunal does not exceed its jurisdiction and acts honestly and in good faith, the Court cannot intervene even if it thinks that the penalty is severe or that a very strict standard has been applied".
Another aspect which may also be noticed is how far and to what extent the doctrine of bias may be (1) , 628.(2) A.I.R. (1949) P.C. 313, 316, 317. 9 invoked in the case of domestic tribunals like those of clubs.
The observations of Maugham J. in Maclean 's case(1) in this context may be noticed.
The learned judge observed in that case thus: "A person who joins an association governed by rules under which he may be expelled . . . . has in my judgment no legal right of redress if he be expelled according to the rules however unfair and unjust the rules or the action of the expelling tribunal may be provided that it acts in good faith . . . . .
The phrase, "the principles of natural justice," can only mean in this connection the principles of fair play so deeply rooted in the minds of modern Englishmen that a provision for an inquiry necessarily imports that the accused should be given his chance of defence and explanation.
On that point there is no difficulty.
Nor do I doubt that in most cases it is a reasonable inference from the rules that if there is anything of the nature of a lis between two persons, neither of them should sit on the tribunal."
Another difficulty that one is confronted with in proceedings held by committees constituted by clubs is to demarcate precisely the line between the prosecutor and the,Judge.
Maugham, J. noticed this difficulty and observed in Maclean 's case (1) at p. 626 thus : "In many cases the tribunal is necessarily entrusted with the duty of appearing to act as prosecutors as well as that of judges; for there is no one else to prosecute.
For example, in a case where a council is charged with the duty of considering the conduct of any member whose conduct is disgracefull and of expelling him if found guilty of such an offence, it constantly occurs that the matter is brought to the (1) , 628.
10 attention of the council by a report of legal proceedings in the press.
The member is summoned to appear before the council.
The council 's duty is to cause him to appear and to explain his conduct.
It may be that in so acting the council are the prosecutors.
In one sense they are; but if the regulations show that the council is bound to act as I have mentioned and to that extent to act as prosecutors, it seems to be clear that the council is not disqualified from taking the further steps which the rules require."
Though it is advisable for a club to frame rules to avoid conflict of duties, if the rules sanction such a procedure, the party, who has bound himself by those rules, cannot complain, unless the enquiry held pursuant to such rules discloses malafides or unfair treatment.
The following principles may be gathered from the above discussion.
(1) A member of a masonic lodge is bound to abide by the rules of the lodge; and if the rules provide for expulsion, he shall be expelled only in the manner provided by the rules.
(2) The lodge is bound to act strictly according to the rules, whether a particular rule is mandatory or directory falls to be decided in each case, having regard to the well settled rules of construction in that regard.
(3) The jurisdiction of a civil court is rather limited; it cannot obviously sit as a court of appeal from decisions of such a body; it can set aside the order of such a body, if the said body acts without jurisdiction or does not act in good faith or acts in violation of the principles of natural justice as explained in the decisions cited supra.
Bearing the said principles in mind, we shall now proceed to consider the arguments of learned counsel for the appellant.
11 The first contention is that Lodge Victoria has no jurisdiction to decide on the question whether a member committed a masonic offence, for, it is said, such offences are within the jurisdiction of a District Grand Lodge, Bombay.
The question falls to be decided on a construction of the relevant Laws of the Lodge : The said Laws read: Law 198.
Every Daughter Lodge shall be entitled to try any member accused of any offence.
A complaint, in writing, shall be served on the accused brother, by registered letter posted to his last known address, specifying the offence of which he is charged, which he shall be entitled to answer in writing within fourteen days of the date of posting of the complaint, or within such longer time as may be specified in the complaint.
On the answer being lodged, or on the expiry of the time for doing so, the matter of the complaint shall be brought before the Lodge for consideration and judgment, either at a special meeting called for that purpose, or at a regular meeting of the Lodge.
The meeting at which it is to be considered must be called by circular sent by the Secretary, which shall state the fact that the complaint, and answer, if any, are to be brought before the Lodge for consideration and judgment.
In the case of a Lodge which does not convene its meetings by circular, the meeting shall be called in such manner as may be ordered by Grand Committee, or by Grand Secretary on its behalf.
Notice of the meeting shall be sent to the accused brother by registered letter posted to his last known address at least fourteen clear days prior to the day of the meeting and that whether he has lodged a written answer or not, and he shall be entitled 12 to appear at the.
meeting and any adjournment thereof and state his defence.
After the case has been considered, the Lodge shall give its decision.
Such decision shall be by votes of a majority of the qualified members voting thereon and only those present throughout the hearing of the case shall be entitled to vote.
If the complaint be sustained, the Lodge shall pronounce such admonition or sentence as shall be decided by the majority of votes as aforesaid.
A Daughter Lodge may not, however, pronounce a sentence of expulsion as power to expel is vested in Grand Lodge alone; but, if the circumstances are deemed of sufficient gravity, a Daughter Lodge may recommend to Grand Lodge that a brother be expelled from the craft.
The judgment pronounced shall be intimated forthwith in writing by registered letter to the said brother, who shall therein be apprised that it shall 'be final unless appealed against to the Provincial or District Grand Lodge, or to Grand Lodge in the case of a Daughter Lodge not within the jurisdiction of a Province or District within one month after the date of posting the said intimation.
In special circumstances, Grand Committee, through Grand Secretary, may extend the period within which an appeal may be made.
Law 128: A Provincial or District Grand Lodge shall hear and determine all subjects of maso nic complaint, dispute, or difference initiated before or appealed or remitted to it respecting Daughter Lodges or brethren of the Scotish Craft within the Province or District, and may admonish, or pronounce a sentence of suspension, and, in the case of a Lodge, may suspend its Charter.
The procedure in all such subjects of complaint, dispute, or difference shall be re 13 gulated mutatis mutandis by Laws 104 to III inclusive.
Law 56: The Grand Lodge shall hear and de termine, through its Grand Committee as here inbefore provided, all subjects of Masonic complaint or irregularity respecting Lodges or Brethren within the jurisdiction, and may proceed to admonish, or fine, or suspend, or expel.
Under Law 198, every Daughter Lodge will be entitled to try any member accused of an offence; under Law 128, a Provincial or District Grand Lodge shall hear and determine all subjects of masonic dispute or difference initiated before it respecting the brethren of the Scotish Craft; and Law 56 provides that the Grand Lodge shall hear such complaints and inflict suitable punishments in respect thereof It will be seen that two different expressions are used: the expression " 'offence" is used in Law 198, while the expression "masonic complaint" is used in Law 128.
It is, therefore, said that, as in the complaint the appellant is alleged to have committed masonic offences, the proper forum is the District Grand Lodge and not the Daughter Lodge.
It is common case that the expressions "offence" and "masonic complaint" have not been defined in the Laws.
In its legal significance an offence means an act or omission made punishable by any law for the time being in force.
The expression "masonic complaint" is a comprehensive term; it may mean any complaint pertaining to masonic matters.
It is not necessary to decide whether the expression "masonic complaint" is wide enough to take in an "offence".
But Law 198 expressly confers a jurisdiction on a Daughter Lodge to try a member if he commits an offence; the jurisdiction conferred on it cannot be excluded by law 128, which is a general law.
The question therefore is whether the allegations made against the appellant constituted "offences" within the meaning of law 198.
14 The word " 'offence" in the context of that Law can only mean the infringement of the Laws of the Daughter Lodge.
As all the Laws have not been placed before us, we are not in a position to hold whether the allegations amounted to "offence" or not in the aforesaid sense.
But the complainant, the appellant and the members of the Lodge, including its officebearers, proceeded on the basis that the appellant committed " 'offences".
The complaint discloses as many as 12 charges.
The appellant answered them seriatim.
Indeed, in his answer he specifically stated: "Further if my accuser and others of his mind have thought this alleged "offence" serious enough to be included in this complaint, why did they not take any action in the matter immediately instead of taking it up after sleeping over it for no less than 3 4 years ?" This shows that even the appellant proceeded on the basis that the allegations, if established, would amount to "offences" within the meaning of the said law.
In the special meeting of the Lodge it was held that the charges have been established; and on that basis punishment was imposed on the appellant.
The appellant did not take any objection either that the allegations did not amount to "offences" within the meaning of law 198 or that the Lodge had no jurisdiction to decide whether he committed the offences.
It is, therefore, manifest that all the parties concerned in the matter accepted the position that if the acts alleged to have been committed by tile appellant were established, he would have committed "offences" under the laws.
If the allegations against the appellant amounted to ""offences" Law 198 is immediately attracted.
If that be so, neither Law 128 nor Law 56, which deal with the jurisdiction of a District Grand Lodge in respect of "masonic complaints", can just the jurisdiction expressly conferred on the 15 Daughter Lodge.
We, therefore, hold that the Daughter Lodge had jurisdiction to entertain the complaint filed by the 2nd respondent against the appellant and decide it on merits.
The next question is, whether Law 198 has been strictly complied with.
Relevant part of Law 198 reads : "On the answer being lodged, or on the expiry of the time for doing so, the matter of the complaint shall be brought before the Lodge for consideration and judgment, either at a special meeting called for that purpose, or at a regular meeting of the Lodge.
The meeting at which it is to be considered must be called by circular sent by the Secretary, which shall state the fact that the complaint, and answer, if any, are to be brought before the lodge for consideration and judgment.
" As we have already indicated in the narration of facts, notice was issued to the members fixing the date of the special meeting along with the notice issued to the appellant i.e., the notice was issued to the members before the appellant filed his answer in respect of the allegations made against him in the complaint.
It is, therefore, contended that the notice of the special meeting issued to the members was not in strict compliance with the said Law.
We do not see any contravention of the Law.
The Law does not say that notice to the members should be issued only after the answer was lodged by the person against whom a complaint was made.
But what it says is that the matter of the complaint shall be brought before the Lodge for consideration after the answer was lodged or on the expiry of the time for doing so.
It also does not prescribe that the answer should be communicated to the members, but only indicates that the notice shall state the fact that 16 the complaint and the answer, if any, will be brought before the Lodge for consideration and judgment.
To put it in other words, the gist of the relevant part of the law is that in the special meeting convened for the purpose or at a regular meeting of the Lodge, the matter of the complaint shall be brought for consideration and judgment.
In the present case it is not disputed that the prescribed notice was given to the members and at the meeting all of them had considered the complaint as well as the answer lodged by the appellant.
Therefore, the law in this regard has been strictly complied with.
The next contention relates to the following part of Law 198 : "Notice of the meeting shall be sent to the accused brother by registered letter posted to his last known address at least fourteen clear days prior to the day of the meeting and that whether he has lodged a written answer or not, and he shall be entitled to appear at the meeting and any adjournment thereof and state his defence.
" It is contended that under the said part of the Law, the accused is entitled to have another 14 days after he filed his answer to enable him to file his case before the Lodge and that in the instant case no such additional period was given to him.
That is so.
The position, therefore, is that the appellant was given notice of the hearing as required by the law, but he was not given the entire period prescribed thereunder.
The question is whether this error in the procedure vitiated the trial.
It is obvious that the appellant wag not prejudiced.
He never made a complaint of it.
Indeed in his answer he made it clear that he would not be present at the inquiry.
The Law itself enabled him to apply for further time, but he did not ask for it, as he did not want to appear at the meeting.
He did not raise this objection either in the appeal before the District Grand Lodge or in the second appeal before the Grand Lodge of Scotland.
Before the said appellate Lodges he took 17 the decision on merits.
Indeed, by his answer and subsequent conduct he clearly waived the said requirement of the Law.
Can he now be allowed to rely upon a breach of the procedural rule to invalidate the proceeding ? In our view, he cannot do so.
There is a distinction between the jurisdiction of a Lodge and the irregular exercise of it in the matter of the taking of procedural steps.
A party to a dispute can certainly waive his objections to some defects in procedure.
In this case, the appellant could have taken objection for his being given a shorter period of notice than prescribed under the Law for his appearance before the meeting of the Lodge.
He did not do so.
The appellant has, by his aforesaid conduct, clearly waived his right under the said Law.
Having waived it, he is now precluded from relying upon the said defect.
We, therefore, hold that it is not open to the appellant to rely upon the said defect for invalidating the proceeding.
The lie argument that the members of the Lodge were both the prosecutors and the judges, and therefore the principles of natural justice have been violated has not much force in the context of the present enquiry.
We are dealing with a case of a Lodge and not with that of a tribunal or a court.
It is true that the earlier resolution, exhibit II 4 , shows that 11 members of the Lodge were not well disposed towards the appellant; but here we are concerned with the complaint filed by the 2nd respondent.
Notice of the complaint was given to all the members of the Lodge.
It may be that some of them did not like the appellant, and one of them is the complainant himself But 22 members of the Lodge met and unanimously held , after considering the complaint and the answer given by the appellant, that he was guilty.
If the appellant had any objection for one or some of the members taking part in the meeting, he could have raised an objection, but he did not do so.
The rules 18 governing tribunals and courts cannot mutatis mutandis be applied to such bodies as Lodges.
We have to see broadly in the circumstances of each case whether the principles of natural justice have been applied.
In the circumstances of this case, particularly when we find that the appellant had not raised any objection, we cannot say that the resolution passed by the Lodge Victoria is bad for violating any principles of natural justice.
Lastly an attempt was made to persuade us to resurvey the entire material to ascertain the correctness or otherwise of the decision of the Lodge.
As we have pointed out earlier, civil courts have no jurisdiction to decide on the merits of a decision given by a private association like a Lodge.
Both the courts below have held that the Daughter Lodge has acted in good faith in the matter of the complaint against the appellant.
That is a concurrent finding of fact; and it is the practice of this Court not to interfere ordinarily with concurrent findings of fact.
There are no exceptional circumstances for our departing from the said practice.
In the result, the appeal fails and is dismissed.
No costs.
| In January, 1956, there was an incident in which a group of workmen assaulted the Manager and two Assistant Managers of tile appellant company.
All the three officers Were Wound ed.
Some workmen were suspended, and charge sheets were served on them, charging them with participation in the riot.
After an inquiry the workmen were dismissed.
The inquiry was held by the Manager and one of the Assistant Managers,During the inquiry, no witness was examined and no statement made by any witness was tendered in evidence.
(1) , 166 The dispute was first referred to the Labour Court and then to the Industrial Tribunal, West Bengal.
The Tribunal set aside the inquiry held by the appellant company and asked the company to prove the allegations against each workman de novo before it.
The company examined five witnesses.
The Tribunal held that orders for dismissal of 15 workmen were justified but it ordered the remaining workmen to be reinstated.
The company came to this Court by special leave.
Held, that the view of the Tribunal was correct that the inquiry made by the company was not in accordance with the principles of natural justice.
The inquiry consisted of putting questions to each workman in turn.
No witness was examined in support of the charge before the workman was questioned.
It is an elementary principle that a person who is required to answer a charge must not only know the accusation but also the testimony by which the accusation is supported.
He must be given a clear chance to hear the evidence in support of the charge and to put such relevant questions by way of cross examination as he desires.
He must also be given a chance to rebut the evidence led against him.
As regards two workmen, this Court held that the Tribunal was justified in not accepting the findings which proceeded almost on no evidence.
As regards one workman, this Court held that as the Tribunal had the opportunity of hearing and seeing the two Assistant Managers, this Court would be slow to reach a conclusion different from that of the Tribunal.
Moreover, in such cases, it is not the practice of this Court to enter into evidence with a view to finding facts for itself.
|
Special Leave Petition (Civil) No. 1863 of 1986.
From the Judgment and Order dated 10.12.85 of the Madhya Pradesh High Court in Misc.
Civil case No. 297 of 1981.
Dr. N.M. Ghatate and S.V. Deshpande for the Petitioners.
Kuldip Singh, Additional Solicitor General, B.B. Ahuja and Miss A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
This petition for leave to appeal is directed against the judgment and order dated 10th December, 1985 of the High Court of Madhya Pradesh, Jabalpur Bench.
The High Court upheld the imposition of penalty as well as the addition of alleged concealed income in the income tax assessment of the peti 791 tioner.
The relevant assessment year with which we are concerned in this application is 1974 75.
It appears that the petitioner had submitted his return of income for the assessment year 1974 75 showing a total income of Rs.3,113 in response to a notice issued under section 143(2) of the Act of the Income tax Act, 1961 (hereinafter called 'the Act ').
According to the petitioner, he had derived his income from 2 stores, i.e. M/s. Mohanani Fancy General Stores and M/s. Roopkala General Stores, Durg.
It, however, appears that on 19th January, 1974 on the basis of the order passed by the Superintendent, Central Excise, Jagpur, dated 25th December, 1975 there was confiscation of foreign watches from the house of the petitioner and levy of penalty of Rs.2 lakhs under the .
Accordingly, the Income Tax Officer issued a notice calling upon the assessee to show cause why the value of the watches seized from his residence should not be treated as his income from undisclosed sources.
In this connection it may be relevant to note that on 12th May, 1973 a search was made of the petitioner 's bed room from where a total of 565 wrist watches of foreign make valued at Rs.87,455 were seized from a suit case and in a secret cavity of a looked steel almirah and also behind the almirah there were watches folded in a bundle of waste papers.
A Panchnama was prepared at the same time mentioning these facts.
According to the Customs Authorities, the petitioner found himself unable to make any statement at that time on account of which recording of statements was deferred.
However, it is stated, the petitioner went out of the station on 14th May, 1973.
The petitioner 's statement was recorded on 13th May, 1973 as soon as he was available.
In his statement Annexure R III duly signed by him, he has admitted these facts and merely denied knowledge of the manner in which those watches came to be in his house.
It appears from the records of the Customs case, with which we will have to deal later in S.L.P. No. 1008/86, the petitioner was given a show cause notice as to why the period of six months fixed under section 110(2) of the should not be extended but no reply was given by the petitioner till 10th November, 1973 or even thereafter.
Hence, by an order dated 10th November, 1973 before the expiry of six months, time was extended by the Collector of Customs for a further period of 6 months for giving a notice as required under section 124(a) of the .
Under the proviso to subsection 2 of section 110 of the , a show cause notice specifying the requisite particulars, was given to the petitioner on 4th May, 1974.
In the reply the petitioner made a general denial.
The 792 enquiry was fixed on 30th october, 1975 for giving a personal hearing to the petitioner, when the petitioner 's Counsel appeared and sought for an adjournment to 20th November, 1975, which was granted.
However, on 20th November, 1975 the Counsel of the petitioner stated that the petitioner did not want to avail of the opportunity of personal hearing or even to cross examine the witnesses in whose presence the Panchayatnama was made at the time of the seizure of the watches.
It is necessary to bear these facts in mind because it has repercussions to the notice dated 19th January, 1974, as mentioned hereinbefore issued by the Income Tax Officer to show cause why the aforesaid sum of Rs.90,768 should not be treated as the petitioner 's concealed income.
The Income Tax Officer further directed issuance of the notice under section 271(1)(c) of the Act.
Being aggrieved by the said order the petitioner preferred an appeal before the Appellate Assistant Commissioner against the order dated 20th February, 1976.
The Appellate Assistant Commissioner dismissed the appeal and held that in view of the order passed by the Collector of Customs, the Income Tax Officer was justified in including the cost of the watches in the income of the assessee for the assessment year 1974 75.
Thereafter, on 29th March, 1978 the Assistant Commissioner of the Income tax issued notice of penalty under section 271(1)(c) of the Act, imposing penalty of Rs.90,000 minimum imposable being Rs.87,455 and maximum imposable being Rs.1,74,910.
Being aggrieved thereby the petitioner filed two appeals before the Income Tax Appellate Tribunal.
The Tribunal by its order dated 19th August, 1980 dismissed these appeals.
The petitioner has further stated that in the meanwhile the State of Madhya Pradesh initiated criminal proceedings under section 125 read with 111 of the and the learned Chief Judicial Magistrate, Durg, by his order convicted the petitioner and awarded one year 's rigorous imprisonment.
Thereafter, on 2nd November, 1982 the petitioner filed an appeal in the Court of Additional Judge in the Court of Sessions, who by his judgment allowed the appeal and acquitted the petitioner of the said criminal charge.
Thereafter, there was a reference to the High Court on two questions against the order of the Income tax Tribunal under section 256(1) of the Act.
The questions are as follows: "(i) Whether, on the facts and in the circumstances of the case, was the Tribunal justified in holding that the assessee was the owner of the watches and thus including the value 793 thereof in the assessment of the assessee? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the department had discharged its burden for establishing the concealment of income by the assessee for the year under consideration and thus confirming the penalty of Rs.90,000 levied by the Inspecting Assistant Commissioner of Income Tax?" The High Court in its order noted that the raiding party by virtue of the search entered into the bed room of the assessee on 12th May, 1973 and seized the watches.
A Panchnama was prepared.
The Department found that the assessee was the owner.
Section 110 of the Evidence Act is material in this respect and the High Court relied on the same which stipulates that when the question is whether any person is owner of anything of which he is shown to be in possession, the onus of proving that he is not the owner, is on the person who affirms that he is not the owner.
In other words, it follows from wellsettled principle of law that normally, unless contrary is established, title always follows possession.
In the facts of this case, indubitably, possession of the wrist watches was found with the petitioner.
The petitioner did not adduce any evidence, far less discharged the onus of proving that the wrist watches in question did not belong to the petitioner.
Hence, the High Court held, and in our opinion rightly, that the value of the wrist watches is the income of the assessee.
In this connection reference may be made to the views expressed by Justice Tulzapurkar as his Lordship then was, of the Bombay High Court in the case of J.S. Parkar vs V.B. Palekar, where on difference of opinion between Justice Deshpande and Justice Mukhi, Justice Tulzapurkar agreed with Justice Deshpande and held the question whether on the evidence established, the petitioner was the owner of the gold seized, though there was no direct evidence placed before the taxing authorities to prove that the petitioner had actually invested moneys for purchasing the gold in question, the inference of the ownership of the gold in the petitioner in that case rested upon circumstantial evidence.
There also gold was seized from a motor launch belonging to the petitioner in that case.
There a contention was raised that the provision in section 110 of the Evidence Act where a person was found in possession of anything, the onus of proving that he was not the owner was on the person who affirmed that he was not the owner, was incorrect and inapplicable to taxation proceedings.
This contention was rejected.
The High Court of Bombay held that what was 794 meant by saying that the Evidence Act did not apply to the proceedings under the Act was that the rigour of the rules of evidence contained in the Evidence Act, was not applicable but that did not mean that the taxing authorities were desirous in invoking the principles of the Act in proceedings before them, they were prevented from doing so.
Secondly, all that section 110 of the Evidence Act does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a set of circumstances that satisfy its condition.
We are of the opinion that this is a correct approach and following this principle the High Court in the instant case was right in holding that the value of the wrist watches represented the concealed income of the assessee.
Section 69A of the Act was inserted in the Finance Act, 1964 and it came into force w.e.f.
1st January, 1964.
The High Court has rightly held that the expression 'income ' as used in section 69A of the Act, has wide meaning which meant anything which came in or resulted in gain.
Hence, in the facts of this case a legitimate inference could be drawn that the assessee had income which he had invested in purchasing the wrist watches and, as such, that income was subject to tax.
In the view the High Court was justified in justifying the Tribunal 's holding that the assessee was the owner of the wrist watches and thus including the value in the assessment of the income of the assessee as his wealth and so deemed to be the income of the assessee by virtue of section 69A of the Act coupled with surrounding circumstances.
Therefore, inclusion of the money in purchasing the wrist watches, that is to say, Rs.87,455 was correct and proper for the assessment year under reference.
In this connection section 69A of the Act may usefully be set out as follows: "Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.
" 795 So far as the first question is concerned, the High Court answered accordingly and in our opinion rightly.
As regards the second question, section 271(1)(c) of the Act was inserted in the Finance Act, 1974 which reads as follows: "Explanation: Where the total income returned by any person is less than eighty per cent of the total income (hereinafter in the Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of making or earning any income included in the total income but which has been disallowed as a deduction), such person shall unless he proves that the failure to return the correct income did not arise from any fraud or any gross or wilful neglect on his part, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income for the purposes of clause (c) of this sub section.
" From the facts found by the revenue, the assessee had shown only a total income of Rs.3,113 and subsequently the raiding party seized wrist watches worth Rs.87,455.
Thus the value of that income was included in the assessable income of the assessee.
Therefore, the total assessable income of the assessee came to Rs.90,568 whereas the returned income was Rs.3,113 which was certainly less than 80% of the total income and, as such, Explanation applied.
Accordingly, the revenue has discharged the onus of proving concealment of income.
This view was expressed by a Full Bench of Punjab & Haryana High Court in Vishwakarma Industries vs Commissioner of Income tax, where all the relevant authorities have been discussed.
In that view of the matter and in view of the principles behind the purpose of Explanation, the assessee in the instant case, has failed to discharge his onus of proof.
The aforesaid Explanation was amended by Finance Act, 1964 with effect from 1st April, 1964.
The amendment was prospective in effect and in the year under reference the amendment was in force.
Though the penalty proceedings are penal in nature but in the facts of this case the onus on revenue has been duly discharged.
This was also the view of the Bench decision of the Madhya Pradesh High Court in Commissioner of Income Tax vs Bherulal Shrikishan, 796 The second question referred to hereinbefore was, therefore, answered in favour of the revenue by the High Court and in our opinion the High Court was justified in so doing.
In the aforesaid view of the matter, there is no merit in this application for leave to appeal and it is accordingly dismissed.
N.V.K. Petition dismissed.
| After levy of the property tax by the Kalyan Municipal Council ( 'the Municipal Council ') on the immovable properties of the Respondent No. 1 ( 'the company ') in respect of certain years, the Municipal Council detected certain new construction and alterations in the existing properties of the Company, and on October 3, 1973 a resolution was passed by the Standing Committee increasing the rateable value of the said immovable property from 1.4.70 to 31.3.74.
A demand notice, demanding additional property tax, Educational cess and Health Tax, was issued thereafter to the Company.
The Company challenged the notice of demand before the High Court.
The High Court decided in favour of the Company, holding that alteration made in the assessment list after following the procedure under section 123(1) of the Maharashtra Municipalities Act (the 'said Act ') did not become effective for any period prior to the commencement of the official year in which the alteration in the assessment list was made and the Municipality was not entitled to levy tax for an official year or any part thereof which was already expired.
This appeal was filed in this Court against that decision of the High Court.
Dismissing the appeal, the Court, ^ HELD: The ratio of the decision of the Full Bench of the Bombay High Court in Sholapur Municipal Corporation vs Ram Chandra Ramappa Madgundi, [1972] 74 Bombay Law Reporter 469, upon which the judgment of the High Court impugned in this case was based, applied to this case.
The appellants contended that the said case before the Full Bench had been wrongly decided and the judgment under appeal based on that decision was also erroneous.
this contention must be negatived in view of the decision of this Court in Municipal Corpora 833 tion of City of Hubli vs Subba Rao Hanumatharao Prayag & Ors.
,[1976] 3 S.C.R. p. 883, which approved the said decision of the Full Bench of the High Court, and which is binding on the Court and clearly applicable to this case.
In that judgment, this Court had pointed out that once it was accepted that the process of levying the tax was complete only when the assessment list was authenticated and it was only then that the tax was levied on the rate payers, the authentication must be made within the official year.
The tax, being a tax for the official year, must be levied during the official year and since the levy of the tax is complete only when the assessment list is authenticated, it must follow that the authentication must take place in the official year.
The official year is the unit of taxation as far as Municipal property taxes are concerned.
[836D,G,837A B] If an assessment list could be altered at any time if the conditions set out in Section 123 of the said Act are satisfied, the result would be that there would be complete uncertainty in the field of taxation of property and unwary purchasers of immovable property might be put to the difficulty of having to discharge the liabilities for property taxes for years long prior to the time when they had purchased the immovable property in order to save the property from being sold in recovery proceedings.
[837B C] Sholapur Municipal Corporation vs Ramchandra Ramappa Madgundi, [1972] 74 Bombay Law Reporter 469 and Municipal Corporation of City of Hubli vs Subha Rao Hanumatharao Prayag & Ors., ; , referred to.
|
l Appeals Nos.
2480 to 2509 2543 to 2546, 2547 to 2553, 2559, 2575, 2576 and 2602 of 1966, 214 to 217, 672 to 674, 1053, 1054, 1055, 1062, 1063,.
1457 and 1458 of 1967, and 162, 672 ' 673 and 1000 of 1968.
Appeals from the judgments and orders dated June 24, 1966 and July 20, 1966 of the Madras High Court in Writ Petitions Nos.
1542 of 1965 etc.
V. Vedantachari, K. C. Rajappa, section Bala krishnanand N. M. Ghatate, for the appellants (in C.As.
2480 2482, 2484 2509, 2575 and 2576, of 1966).
V. Vendantachari and section Balakrishnan, for the appellants (in C.As.
Nos. 2543, 2544 and 2546 of 1966).
section Balakrishnan and N. M. Ghatate, for the appellant (in C.A. No. 2545 of 1966).
section V. Gupte and K. Jaram, for the appellants (in C.A. Nos. 2547 to 2553 and 2559 of 1966).
792 K. Parasaran, K. R. Chaudhuri and K. Rajendra Chaudhuri, for the appellants (in C.As.
2602 of 1966, 214 to 217 and 1055 of 1967).
M. section K. Sastri section Gopalan and M. section Narasimhan, for the appellants (in C.As.
672 to 674 of 1967).
M. section Narasimhan, for the appellants (in C.As.
1053 and 1054 of 1967).
A. V. V. Nair, for the appellants (in C.As.
Nos. 1062 and 1063 of 1967).
V. Vedantachart, A. T. M. Sampath and E. C. Agarwala, for the appellants (in C.As.
14517 and 1458 of 1967).
P. C. Bhartari, for the appellant (in C.A. No. 162 of 1968).
K. Jayaram, for R. Thiagarajan for the appellants (in C.As.
Nos. 672, 673 and 1000 of 1968 and 2483 of 1966).
section Mahan Kumaramangalam and A., V. Rangarm, for the respondent State of Madras in, all the appeals).
R. Kunchitapadam, Vineet Kumar and K. Jayaram, for respondent No. 2 (in C.A. No. 2484 of 1966).
M. K. Ramamurthy, J. Ramamurthy and Vineet Kumar, for respondent No. 2 (in C.As.
2488 to 2490 of 1966).
The Judgment of the Court was delivered by Hegde, J.
In this batch of appeals, the validity of the Mad ras Inam Estates (Abolition and Conversion Into Ryotwari) Act, 1963 (Madras Act 26 of 1963); the Madras Lease Holds (Abolition and.
Conversion into Ryotwari) Act, 1963 (Madras Act 27 of 19 63) and the Madras Minor Inams (Abolition and Conversion Into Ryotwari) Act, 1963 (Madras Act 30 of 1963) is challenged on the ground that the material provisions in those Acts are violative of articles 14, 19(1)(f) and 31 of the Constitution.
The provisions in these Acts reducing the tenants" liability to pay the arrears of rent are also challenged on the ground that the legislature had no competence to enact 'those provisions.
A few other minor contentions are also raised in these appeals to which reference will be made in the course of the judgment.
All these contentions had been unsuccessfully urged before the High Court.
Dealing with the allegation of infringement of articles 14, 19 and 31, the High Court in addition to holding that there has been no infringement of those Articles has further held that the challenge to the validity of these Acts on the basis of those 793 articles is precluded in view of article 31 (A).
Dealing with the contention relating to the reduction of rent the High Court came to the conclusion that the legislature had power to enact the impugned provisions.
The High Court also has given reasons for rejecting the other contentions advanced before it.
Aggrieved by the decision of the High Court these appeals have been brought by special leave.
The impugned statues deal with agrarian reforms.
They purport to deal with Inam lands.
It is profitless to go to the origin of Inams or about their early history.
Suffice it to say that the Urdu word "Inam" means a gift.
The Inams, rants were made by the Rulers for various purposes.
Some of them were granted to institutions and some to individuals.
Broadly speaking there were three types of Inams The first type consisted of the grant of the melwaram right alone.
The second category consisted of the grant of both the melwaram as well as the kudivaram right.
In addition to these two Inams, there were what are known "as Minor Inams.
Sometime prior to 1862, the Government took up the question of enfranchising the Inams.
The Inams Commissioner went into the rights of various persons claiming to be Inamdars.
Thereafter the Madras Enfranchised Inams Act '.
1862 (Madras Act 47 of 1862) was passed for declaring and confirming the title of the Inamdars.
Section 2 of that Act provided that the title deeds issued by the Inams Commissioner or an authenticated extracted from the register of the Commissioner or Collector shall be deemed sufficient proof of the enfranchisement of land previously hold on Inam tenure.
By Madras Inams (Assessment) Act, 1956 (Madras Act 40 of 1 95 6), full assessment was levied on 'all Inam lands except Warm inams granted on service tenure, without affecting in any way the rights as between the Inamdar and other, persons, if any, in possession or enjoyment of the Inam land.
Where the Inam comprised the entire villa e, the same was treated as an "estate" in the Madras Proprietary Estates ' Village Service Act, 1894 (Madras Act 2 of 1894) and the Madras Hereditary Village Offices Act, 1895 (Madras Act 3 of 1895) as well as in Madras Estate Land Act, 1908 (Madras Act 1 of 1908).
Mdras Estates Land Act, 1908 recognised the ryots ' permanent tenure.
That Act secured a permanent right of occupancy to every ryot who at the commencement, was in possession of "ryoti" I and or who was subsequently admitted to the possession of such land.
Then came the Madras Estate Land (Third Amendment Act, 1936 (Madras Act 18 of 1936).
That Act amplified the definition of the "estate" in the Madras Estate Land Act, 1908, so as to bring within its scope A, Inam villages, of 794 which the grant was made, confirmed or recognised by the Government.
It also provided that when a question arises whether any land was the land holder 's private land or not, the land should be presumed not to be Inamdar 's private land until the contrary was proved.
In 1937, the Madras Government appointed the, Prakasam Committee to enquire into and report the conditions which prevailed in the Zamindari and other proprietary areas in the State.
That committee submitted its report together with a draft bill on the lines of its recommendations, but no action was taken on that report as the Congress Ministry which appointed it resigned.
Then we come to the Madras Estates (Abolition and Conversion Into Ryotwari) Act, 1948 (Madras Act 26 of 1948).
This Act applies to all estates i.e. Zamindari and under tenure estates and all Inam villages in which the grant consisted of melwaram alone.
That Act as its preamble says is an Act to provide for the repeal of the permanent settlement, the acquisition of the rights of landholders in permanently settled and certain other estates in the Province of Madras and the introduction of the ryotwari settlement in such estates.
To complete the agrarian reform initiated by this Act, the impugned Acts appears to have been enacted.
The Preamble to Madras Act 26 of 1963 says that it is an Act to provide for the acquisition of all rights of landholders in Inam estates in the State of Madras and the introduction of the ryotwari settlement in such estates.
That Act follows by and large the provisions in Act 26 of 1948.
In Act 26 of 1963 Inams estates are divided into two categories namely (1) existing Inam estate and (2) a new Inam estate.
The existing Inam estate refers to the estate consisting of the whole village and the new Inam estate means a part village Inam estate of Pudukkottai Inam estate.
The "New Inam estate" was not an estate known to law earlier.
It is merely a name given to part village Inam estate a Pudukkottai Inam estate for drafting convenience.
Act 27 of 1963 is an Act to provide for the termination of the leases of certain lease holds granted by the Government, the acquisition of the rights of the lessees in such lease holds, and the introduction of the ryotwari settlement in such leaseholds.
Act 30 of 1963 is an Act to provide for the acquisition of the rights of the Inamdars in minor Inams and the introduction of the ryotwari settlement in such Inams.
We do not think it necessary to go into the contention that one or more provisions of the impugned Acts are violative of articles 14, 19 and 31 as in our.
opinion these Acts are completely protected by article 31 '(A) of the Constitution which says that "Notwithstanding anything contained in article 13, no law providing for 7 95 (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights. . shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 1 9 or article 3 1.
" The expression "estate" is defined in sub article
(2) of Art31 (A).
That definition includes not merely Inams but also land held under ryotwari settlement as well as land held or let for the purpose of agriculture or for purposes ancillary thereto, including(, waste land, forest land, land for pastures or site or buildings, and other structures occupied by the cultivators of land, agricultures and village artisans.
The impugned Acts are laws providing for the acquisition by the State of an "estate" as contemplated ' by article 31 (A).
They seek to abolish all intermediate holders and 'to establish direct relationship between the Government and the occupants of the concerned lands.
These legislations were undertaken as a part of agrarian reforms.
Hence the provisions relating to acquisition or the extinguishment of the rights of the intermediate holders fall within the protective wings of article 31 (A) see B. Sankara Roo, Badami and ors.
vs State of Mysore and anr.
It is next contended on behalf of the appellants that the lands, on which full assessment was levied under Act 40 of 1956 ceased to be inams and therefore provisions of the Madras Act 26 of 1963 cannot be applied to the same.
We have not thought it necessary to go into the question whether as a result of Madras Act 40 of 1956, certain Inams have ceased to be Inams, as in our opinion, whether they continued to be Inams or not they are still "estate" within the meaning of article 31 (A) because they fall either under sub clauses (1) or (II) or (111) of Clause (a) of article 31 (A) (2) and that being so the provisions of the impugned Acts cannot be challenged on the ground that they infringe articles 14, 19 and 31.
The contention that as the State purported to abolish Inams and not other intermediaries the law cannot be held to be valid if the intermediaries sought to be removed are not Inamdars is an untenable one.
If the impugned legislation can be traced to a valid legislative power, the fact that the legislature wrongly described some of the intermediaries sought to be removed does not make the law invalid.
From the above observations, it should not be understood that we have come to the conclusion that the intermediaries concerned were not Inamdars.
We have not gone into that question.
From the provisions of (1) ; 796 The impugned Acts, it is quite clear that the intention of the legislature was to abolish all intermediaries including the owners of those "estates" that were subjected to full assessment by Act 40 ,of 1956.
It was next urged that article 31(A) does not protect a legis lation where no compensation whatsoever has been provided for taking the "estates".
We do not think we need go into that question.
This contention bears only on the provisions of the Madras Act 26 of 1963.
Section 18 of that Act provides that compensation shall be determined for each Inam as a whole and not separately for each of the interests in the Inams.
The validity of this section was not challenged before us.
All that was urged was that for some of the pro reties included in the Inam, no compensation was provided.
Even if we assume this contention to be correct, it cannot be as that no compensation was provided for the acquisition of the lnam as a whole.
Hence article 31(A) bars the plea that there was contravention of article 31(2) in making the acquisition in question.
One of the contentions taken on behalf of the appellants that the impugned Acts to the extent they purport to acquire mining lands are outside the purview of article 31 (A).
It is not known whether the lands in which mining operations are going on were let or held as "estates".
There is also no evidence to show that the owners of those lands were entitled to the mines.
Hence, it is not possible to uphold the contention that lands concerned in some of the appeals have been acquired without paying compensation.
In order to avoid the bar of article 3 1 (A), a curious plea was put forward.
It was urged that when the concerned bills were submitted to the President for his assent as required by the first proviso to article 31 (A), the President was not made aware of the implications of the bills.
This contention is a wholly untenable one.
There is no material before us from which we could conclude that the President or his advisers were unaware of the implications of those 'bills.
We must proceed on the basis that the President had given his assent to those bills after duly considering the implication of the provisions contained therein.
it was next urged that the provisions in the impugned Acts reducing the liability of the tenants in the matter of payment of the arrears of rent, whether decreed or not was beyond the legislative competence of the State legislature.
This contention is agairt untenable.
Those attears are either affairs of rent or debts due from agriculturists.
It they are treated as affears of rent then the State legislature had legislative power to legislate in respect of the same under Entry 18 of List II of the VIIth Schedule.
If they are considered as debts due from agriculturists then the 797 State legislature had competence to legislate in respect of the same under Entry 30 of the same list.
In regard to the Inams belonging to the religious and chari table institutions, the impugned Acts do not provide for payment of compensation in a lumpsum but on the other hand provision is made to pay them a portion of the compensation every year as Tasdik.
This is only a mode of payment of the compensation.
That mode was evidently adopted in the interest of the concerned institutions.
We are unable to agree that the method is violative of article 31(2).
At any rate that provision is protected by article 31 A. It was next urged that by acquiring the properties belonging to religious denominations the legislature violated article 26 (c) and (d) which provide that religious denominations shall have the right to own and acquire movable and immovable property and administer such property in accordance with law.
These provisions do not take away the right of the State to acquire property belonging to religious deuomintions.
Those denominations can own acquire properties and administer them in accordance with law.
That does not mean that the property owned by them cannot be acquired.
As a result of acquisition they cease to own that property.
Thereafter their right to administer that property ceases because it is no longer their property.
article 26 does not interfere with the ' right of the State to acquire property.
Mr. section V. Gupte appearing for some of the appellants urged that the Impugned Act contravenes the second proviso to article 31(A).
From the material before us it is not possible to hold that any property under the personal cultivation of any of the appellants had been acquired.
Further there is no material to show what the ceiling is.
Hence it is not possible for us to examine the correctness of that contention.
If in any particular case, the second proviso to article 31 (A) has been breached, then to that extent, the acquisition will become invalid.
It was urged by Mr. Sastri appearing for some of the appel lants that the impugned Acts do not acquire the lands concerned in some of the appeals.
This contention was not 'gone into by the High Court.
Dealing with that contention, the High Court in its judgment observed : "But the applicability of the impugned Acts to the Inams in question cannot be conveniently investigated in the present writ proceedings.
The question will have to be determined with reference to the terms of the 798 grant, the extent of the grant has to be ascertained by reference to the relevant materials.
Section 5 of Madras Act, XXXI of 1963 (XXX of 1963 ?) makes special provision for determination of the question whether any non ryotwari area is or is (not an 'existing Inam Estate 'or ' part village Inam Estate ' or a minor Inam or whole Inam village in Pudukkottai.
It is stated at the bar that in most of the cases now 'before us the parties have applied under the provisions of the said Act for determination of the character of the Inams respectively held 'by them.
It, is needless to point out that the Tribunal constituted under the Act will be entitled to decide that a particular property is neither an existing Inam estate ' nor a part village Inam estate nor a whole inam village in Puddukkottai and completely out of the coverage of Acts XXVI and XXX of 1963.
We a1so make it clear that the disposal of these writ petitions now does not preclude the Inamdars from agitating The question that a particular property is not an Inam at all and does not under any of the aforesaid four categories or falls under one or other of the categories as may be urged for the inamdars.
" We agree with the High Court that the contention in question can be more appropriately gone into in the manner suggested by the High Court.
In the result these appeals fail and they are dismissed.
But ,under the circumstances; we make no order as to costs in these appeals.
| Surinder Kumar and Virender Kumar (defendants in the suit) purchased on May 9, 1958 a plot of land in District Gurgaon.
On January 9, 1959 the plaintiffs filed a suit in the Civil Court to pre empt the sale.
On November 16, 1961 the Government of Punjab issued in exercise of the power conferred by section 8(2) of the Punjab Pre emption Act, 1913, a notification declaring "that no right of pre emption shall exist with respect to urban of village immovable property or agricultural land when purchased by any person for setting up or expansion of any industry in the State with the permission of the Director of Industries, Punjab.
" By order dated February 16.
1962 the Civil Court passed a decree for preemption conditionally on payment of the amount for which the property was sold.
The Civil Court found that the defendants had failed to establish that they intended to establish a factory on the land in question.
The defendants appealed to the Court of the Senior Subordinate Judge against the decree of the Trial Court.
Thereafter the Government of Punjab issued another notification on September 3,1962, that the Governor of Punjab was pleased to order that "no right of pre emption shall exist with respect to the sale of land, described in the Schedule to this Notification made on the 9th May, 1958, in favour of Messrs. Surinder Kumar and Virender Kumar, opposite Railway Station, Faridabad for the establishment of a factory for manufacture of cork products".
In the Schedule was described the property aforesaid purchased by the defendants.
The plaintiffs then moved a petition in the High Court chal lenging the validity of the Notification dated September 3, 1962 among others On the ground that in issuing the order the Government acted mala fide.
The High Court held that the notification extinguishing the right of pre emption in the property,issued during the pendency of the appeal did not disentitle the plaintiffs to maintain their claim of preemption already exercised and in respect of which a decree was granted to them.
The notification dated September 3, 1962 was held to have been issued mala fide and on that account invalid though section 8(2) of the Punjab Act 1 of 1913 was held not offend article 14 of the Constitution.
With special leave the State of Punjab appealed to this Court, HELD : The High Court rightly held on the facts that the impugned notification was issued mala fide.
The plaintiffs who claimed that they bad a right to pre empt the sale filed a suit against the defendants and obtained a decree.
On the finding of the High Court it was clear that except disclosing that the defendants intended to construct a factory, nothing more was said.
The State Government still proceeded to exclude from the operation of the Act the land so as to defeat the right of preemption exercised by the plaintiffs in respect of which a decree was passed 551 by the Civil Court.
The State Government had not in their affidavit satisfactorily explained the circumstances in which the order was passed.
The conclusion of the High Court was borne out by the evidence and no ground was made out calling for interference in this appeal by special leave.
[554 E; 556 B C] The contention on behalf of the State that the party alleging that the action of the State was not bona fide must name the officer or officers guilty of conduct which justifies an inference that the official act was done for a collateral purpose, could not be accepted.
It would be placing an intolerable burden of proof of a just claim to require a party alleging mala fides of State action to aver in his petition and to prove by positive evidence that a particular officer was responsible for misusing the authority of the State by taking action for a collateral purpose.
[5.55 F H] [The impugned notification having been held invalid the question whether section 8(2) of the Punjab Pre emption Act was ultra vires article 14 of the Constitution did not survive for consideration.] [553 B]
|
Appeal No.178 of 1963.
Appeal by special leave from the order dated November 27, 1961 of the Central Government Labour Court, Delhi Camp at Madras in L.C.A. No. 564 of 1961.
M.C. Setalvad, J.N. Hazarika and K.P. Gupta for the appellant.
M.K. Ramamurthi, R.K. Garg, S.C. Agarwal and D.P. Singh for the respondent.
December 2, 1.963.
The Judgment of the Court was delivered by DAS GUPTA J.
This appeal arises out of an application under section 33C(2) of the Industrial Disputes Act.
The respondent A.R. Chacko was working as a clerk in the Coimbatore Branch of the appellant Bank when by an order dated June 19, 1959, he was promoted as Accountant and was transferred to the Alleppy Branch of the Bank.
The appellant 's pay in the new post was fixed by an order on July 16, 1960.
By this order he was allowed Rs. 120 as basic pay in the new grade of Rs. 120 10 160 from January 1, 1960.
From August 1, 1960 and thereafter he was allowed to draw Rs. 10 per month as CAIIB allowance.
The petitioner 's case in the application under section 33C(2) is based on the contention that after his promotion to the post of accountant with additional supervisory duties he was entitled to the special allowance of Rs. 40 tinder Para 164 of the Sastry Award.
His case is that he was entitled from the date of his joining as accountant, i.e., from July 13, 1959 (a) to a basic pay of Rs. 95 of his old grade with annual increments due on December 1, every year i.e., at the rate of Rs. 95 in the month of August, September, October and November 1959 and thereafter at the rate of 628 Rs. 100 from December 1959 to November 1960, and thereafter at the rate of Rs. 106 from December 1960; (b) special allowance of Rs. 40 per month for the additional supervisory duties and (c) dearness allowance in terms of the award.
The total amount to which he would be entitled thus would be Rs. 4,495.22.
The amount actually paid to him for the period July 13, 1959 to the end of March 1961 for which the application was brought was Rs. 3637.73.
He claimed to be entitled to the additional amount of Rs. 855.49 and prayed that the Labour Court be pleased to issue a certificate for this amount to the Collector authorising the Collector to recover the amount in accordance with law.
In resisting this application the Bank contended (1) that such an application under section 33C(2) of the was incompetent, (2) that in any case the matter would be one within the jurisdiction of an industrial tribunal and not the Labour Court, (3) that the Sastry Award had ceased to be operative from March 31, 1959 long before the date of the respondent 's appointment as an accountant and so no benefits accrued to him under that award and (4) by his appointment as accountant the respondent had ceased to be a workman and was therefore not entitled to the benefits of the Sastry Award.
The Labour Court rejected all these objections and allowing the application, computed the amount due to the respondent from the Bank to be Rs. 855.49.
Against this decision the present appeal has been filed by special leave.
The first objection raised by the Bank is now concluded by the decision of this Court in the Central Bank of India vs P. section Rajagopalan (1) where it has been held that such an application by workmen lies under section 33C(2) of the Act.
In support of the second objection Mr. Setalvad drew our attention to the second schedule to the , which sets out the matters within the jurisdiction of the Labour Court, but (1) ; 629 does not include any which could be said to cover an application under section 33C(2).
The contention is clearly misconceived.
The schedule refers specifically to section 7 of the Act.
That section lays down that the appropriate government may, by notification in the official gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the second Schedule and for performing such other functions as may be assigned to them under this Act.
Section 33C(2) in terms assigns the determination of the amount of benefit to which the workman is entitled to receive from the employer and which is capable of being computed in terms of money to such Labour Court as may be specified in this behalf by the appropriate Government.
Clearly, therefore, the Labour Court as specified by the government and not the Industrial Tribunal has jurisdiction to deal with this matter.
In support of the third objection raised by the Bank Mr. Setalvad drew our attention to section 4 of the , and argued that in view of this provision the respondent was not entitled to any benefit of the Sastry Award in July 1959 when he was asked to perform the additional supervisory duties.
Section 4 runs thus: "Notwithstanding anything contained in the , or the Industrial Disputes (Appellate Tribunal) Act, 1950 the award as now modified by the decision of the Labour Appellate Tribunal in the manner referred to in section 3 shall remain in force until March 3 1, 1959.
" It is said that the non obstante clause "Notwithstanding anything contained in the " makes the provisions of section 19(6) inapplicable to the Sastry Award and so the provision there that the award shall continue to be binding on the parties until a period of two months had elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating 630 its intention to terminate the award, does not come into operation.
To this objection two answers are available.
The first is that there is difference between an award being in operation and an award being binding on the parties.
The different provisions made by the legislature in section 19(3) and section 19(6) illustrate this distinction.
Under section 19(3) the award remains in operation for a period of one year.
(The words "from the date on which the award becomes enforceable under section 17A" were inserted after the words " period of one year" by the amending Act of 1956).
Section 19(6) is in these words: "Notwithstanding the expiry of the period of operation under sub section (3), the award shall continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award.
" This makes it clear that after the period of operation of an award has expired, the award does not cease to be effective.
For it continues to be binding thereafter on the parties until notice has been given by one of the parties of the intention to terminate it and two months have elapsed from the date of such notice.
The effect of section 4 of the is that the award ceased to be in force after March 31, 1959.
That however has nothing to do with the question as to the period for which it will remain binding on the parties thereafter.
The provision in section 19(6 as regards the period for which the award shall continue to be binding on the parties is not in any way affected by section 4 of the Industrial Dispute (Banking Companies) Decision Act, 1955.
Quite apart from this, however, it appears to us that even if an award has ceased to be in operation or in force and has ceased to be binding on the parties under the provisions of section 19(6) it will continue to have its effect as a contract between the parties that has been made by industrial adjudication in place 631 of the old contract.
So long as the award remains in operation under section 19(3), section 23(c) stands in the way of any strike by the workmen and lock out by the employer in respect of any matter covered by the award.
Again, so long as the award is binding on a party, breach of any of its terms will make the party liable to penalty under section 29 of the Act, to imprisonment which may extend to six months or with fine or with both.
After the period of its operation and also the period for which the award is binding have elapsed section 23 and section 29 can have no operation.
We can how ever see nothing in the scheme of the to justify a conclusion that merely because these special provisions as regards prohibition of strikes and lock outs and of penalties for breach of award cease to be effective the new contract as embodied in the award should also cease to be effective.
On the contrary, the very purpose for which industrial adjudication has been given the peculiar authority and right of making new contracts between employers and workmen makes it reasonable to think that even though the period of operation of the award and the period for which it remains binding on the parties may elapse in respect of both of which special provisions have been made under sections 23 and 29 respectively may expire, the new contract would continue to govern the relations between the parties till it is displaced by another contract.
The objection that no such benefit as claimed could accrue to the respondent after March 31, 1959 must therefore be rejected.
This brings us to the last objection that on appointment as accountant, the respondent Chacko ceased to be a workman.
Admittedly, the mere fact that he was designated as accountant would not take him out of the category of workman.
This was recognised in para 332 of the Sastry Award when it was said: "The categories of workmen known as Head Clerks, Accountants, Head Cashiers should prima facie be taken as workmen wherever they desire to be so treated but with this important proviso 632 that the banks are at liberty to raise an industrial dispute about such classification wherever they feel that with reference to a particular branch and a particular office a person so designated is really entrusted with work of a directional and controlling nature and perhaps even supervision of a higher type over ordinary supervisory agencies.
" In para 167, where the case of accountants was specially dealt with it was again said: In several cases they will indisputably be officers.
It is difficult to lay down a hard and fast rule in respect of them.
An Accountant oftentimes is the second officer in charge of branches, particularly where the branches are comparatively small.
In big banks where there is a hierarchy of officers there may be a chief accountant, accountants, and sub accountants.
In most of these cases the "accountants" will probably be officers.
There will however be incumbents of such posts, though going under the dignified designation of accountants who are in reality only senior clerks doing higher type of clerical work involving an element of supervision over other clerks as part of their duties.
In such cases where they. can properly be regarded as workman the minimum allowances which we have fixed for sub accountants would equally apply to them.
" The Labour Court appears to have taken proper note of this distinction between accountants who are really officers and accountants who are merely senior clerks with supervisory duties and on a consideration of the evidence on the record as regards the duties actually performed by the respondent Chacko, has come to the conclusion that he was merely a senior clerk, doing mainly clerical duties, and going by the designation of accountant and was in reality a workman as defined in the and doing an element of supervisory work.
633 We can find no mistake in the approach of the Labour Court to the question nor can we see any justification for interfering with its conclusion on the evidence in the case.
All the relevant documents produced have been duly considered by the Labour Court in light of the oral evidence given; and on such consideration it has come to the conclusion that though on paper certain rights and powers were assigned to him and occasionally he acted in the place of the Agent when the Agent was absent, such duties did not form part of his principal and main duties.
Mr. Setalvad drew our attention to a copy of the resolution passed by the Board of Directors under which the respondent as Accountant was authorised "to make, draw, sign, endorse, purchase, sell, discount and negotiate Bills of Exchange, Hundies, Drafts, Cheques, Promissory Notes and other Nego tiable instruments in the name of and on behalf of the Bank and also to operate upon all banking account maintained by this Bank with banks, bankers, and others in India for and on behalf of the South Indian Bank Limited.
" This resolution was dated July 18, 1959 and on the same date a circular letter was issued to all branches sending a binder containing specimen signatures of all the officers of the Bank and the respondent 's name was also included in this list.
In spite of this however, as pointed out by the Labour Court, it does not appear from the evidence that generally Mr. Chacko had occasion to exercise the several powers said to have been granted to him.
A truer picture of his actual functions appears from a document dated August 28, 1961 signed by the Agent which was put in evidence as Ex.1.
and the correctness of which does not appear to have been challenged on behalf of the Bank authorities.
The list of duties mentioned in this document clearly shows that these are almost wholly clerical the only exception being Item 14, viz., "and other work entrusted to him by the Agent from time to time.
" The Labour Court has also pointed out that no power of attorney was granted to Mr. Chacko.
When on a consideration 634 of all the relevant evidence the Labour Court has come to the conclusion that the duties performed by the respondent consisted of clerical work with supervisory functions and were certainly not managerial or administrative as contended for by the Bank, we find no reason to interfere with that conclusion.
It is pertinent to notice that on the Bank 's case a workman in the position of Chacko would on promotion to the rank of an officer from that of a workman be financially a loser by being deprived of the special allowance which he would have got as a workman with supervisory duties without obtaining sufficient recompense for the same because of the performance of the so called managerial and administrative duties.
It is not unreasonable to think that this so called promotion to officer 's grade was really intended to undo the effect of the recommendations of the Sastry Award for this supervisory allowance.
is difficult to understand otherwise that persons with higher responsibilities and managerial duties to perform would in fact be getting less in rupees and annas than what they would be getting as workmen.
In the circumstances, the finding of the Labour Court that the respondent was a workman entitled to the benefits of the Sastry Award cannot be successfully challenged.
All the points taken in the appeal therefore fail.
The appeal is dismissed with costs.
Appeal dismissed.
| Ordinarily a company will be a, "company, the directors whereof have a controlling interest therein" for the purposes of the Excess Profits Tax Act, 1940, only if the directors thereof hold, and are entered in the share register as holders of, a majority of the vote carrying shares of the company.
It is not necessary that they must have a beneficial interest in such shares, but the mere fact that one of the directors of the company has been authorised by another company which held a majority of shares in the former company, to vote on its behalf in respect of the shares held by it, will not make the former company a director controlled company.
Glasgow Expanded Metal Co. Ltd. vs Commissioners of Inland Revenue , Commissioners of Inland Revenue vs B. W. Noble , Inland Revenue commissioners V. ,T. Bibby and Sons Ltd. (14 I.T.R. Suppl 7, , Commissioner of Income tax vs Bipin, Silk Mills Ltd. and Commissioners of Inland Revenue vs Hodgkinson (Salford) Ltd. relied on.
British American Tobacco Co. Ltd. vs Commissioners of Inland Revenue ([1943] A.C. 335) and New Shorrock Spinning and Manufacturing Co. Ltd. vs Commissioner of Incometax, Bombay distinguished.
|
ivil Appeal No. 3982 of 1989.
From the Judgment and Order dated 20.4.1988 of the Bihar High Court in C.W.J.C. No. 1749 of 1988.
B.R.L. Iyengar, Govind Mukhoty, K.K. Gupta and Hari Narain Ojha for the Appellant.
Anil Dev Singh, A.K. Sen, D. Goburdhan, T.C. Sharma, Mrs. Sushma Suri and D .P.
Mukherjee for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
203 This appeal has been preferred against the judgment dated 20th April 1988 of the Patna High Court dismissing a writ petition filed by the appellant challenging a seniority list.
Necessary facts in brief are these: The appellant and respondents 7 to 13 are Assistant Conservators of Forest in Bihar Forest Service.
Their serv ice conditions are governed by the Bihar Forest Service Rules, 1953 (hereinafter referred to as the Rules) made by the Government of Bihar in exercise of the powers conferred on it by the proviso to Article 309 of the Constitution of India.
According to Rule 2(vii) of the Rules "the service" means the Bihar Forest Service.
Rule 3 provides that the appointments of the service shall ordinarily be made by (a) direct recruitment in accordance with the Rules in Part II of these Rules by competitive examination to be held by the Commission; and (b) by promotion in accordance with the Rules contained in Part V of selected rangers specified therein.
The appellant and respondents 7 to 12 were selected rangers and were appointed as Assistant Conservator of Forest by promotion under Rule 3(b).
As is apparent from the counter affidavit on behalf of respondents 8 to 10, respond ent No. 11 was promoted as Assistant Conservator of Forest on 21st December 1976, respondent Nos. 7, 8, 9 & 12 on 29th November 1977 and respondent No. 10 on 15th December 1978.
In so far as the appellant is concerned, even though, he was appointed subsequently, his appointment was made effective retrospective from 29th November 1977.
Respondent No. 13, on the other hand, as is apparent from the seniority list which was challenged by the appellant, was appointed under Rule 3(a) of the Rule by direct recruitment on 3rd May 1978.
The counter affidavit further indicates that respondent No. 13 was confirmed as Assistant Conservator of Forest on 30th June 1983.
Respondents 7 to 11 were confirmed on 30th August 1983 and respondent No. 12 was confirmed on 5th August 1983 whereas the appellant was confirmed on 31st December 1986.
In the said counter affidavit, the dates of appointment as rangers of respondents 11, 7, 8, 9, 10, 12 and the appellant respectively are stated as 3rd April 1958, 4th April 1958, 5th April 1958, 9th April 1958, 7th April 1959, 1st April 1966 and 2nd April 1967.
Even though a rejoinder has been filed by the appellant, the correctness of the aforesaid facts has not been denied therein nor has it been urged by the learned counsel for the appellant before us that these facts are inaccurate.
It is on the basis of these facts, therefore, that the respective submissions made by learned counsel for the parties have to be considered.
204 It has been urged by learned counsel for the appellant mainly relying on a memorandum to the Cabinet dated 24th November 1977 which contains a note that if the appellant was found fit for promotion by the selection committee, his place will be above 10 general category rank officers men tioned therein, that in the seniority list the name of the appellant should have been placed above those officers.
According to the learned counsel for the appellant the memorandum was approved by the Cabinet on the same date and yet in the impugned seniority list the aforesaid direction was not carried out.
For the respondents, it was urged that the Cabinet had not approved the memorandum in its entirety.
In our opinion, however, it is not necessary to go into this controversy.
It was on the above premise that the writ petition challenging the seniority list was filed by the appellant in the High Court and according to his learned counsel, the High Court committed an error in dismissing the same.
Having heard learned counsel for the parties, we find it difficult to agree with the submission made by the learned counsel for the appellant.
As seen above, the serv ice conditions of Assistant Conservators of Forest who are members of the Bihar Forest Service, are governed by the Rules.
Rule 35 which specifically deals with the matter of seniority reads as hereunder: "35.
Seniority of officers appointed to the Service shall be determined with reference to the date of their substantive appointment to the Service.
Provided that (i) in the case of members of the Service appointed by direct recruitment at the same time, their seniority inter se shall be in the order of merit in which their names are placed in the list of successful candidates at the Final Examination of the Indian Forest Col lege, Dehra Dun; (ii) in case where appointments are made to the Service both by direct recruitment and promotion of selected Rangers at the same time, the promoted members of the service shall be senior to the members directly re cruited; and (iii) the seniority inter se of Rangers on substantive appointment to the Service by promotion at the same time 205 shall be their seniority inter se held as Rangers." In the instant case we are not concerned with Clause (i) of the proviso.
Even Clause (ii) is not attracted inasmuch as respondent No. 13 even though was appointed by direct recruitment, was not appointed "at the same time" as the appellant and respondents 7 to 12, as already indicated above.
That is clause (iii) of the proviso, therefore, which is relevant for the determination of the seniority inter se of the appellant and respondents 7 to 12.
On a plain reading of this Clause it is apparent that on substantive appoint ment of rangers to the service by promotion, their seniority inter se in the service is to be governed by "their seniori ty" inter se held as rangers".
As seen above, the appellant as well as respondents 7 to 12 have already been confirmed as Assistant Conservator of Forest and meet the requirement of "substantive appointment to the service by promotion".
In order to determine their inter se seniority as Assistant Conservator of Forest, therefore, their seniority inter se held as rangers shall be the determining factor.
The respec tive dates of appointment as rangers of the appellant and respondents 7 to 12 have already been given above.
Its perusal indicates that respondents 7 to 12 had been appoint ed as rangers much before 2nd April 1967 which was the date on which the appellant was appointed as a ranger.
The dates of appointment and confirmation of respondent No. 13 who is a direct recruit, have been noted earlier.
In this view of the matter the claim of seniority as made by the appellant has no substance.
It is settled law that the provisions of statutory rules cannot be modified or altered by executive instructions and it is only in the absence of statutory rules that executive instructions have relevance.
As such even if for the sake of argument it may be accepted that on account of the memoran dum to the Cabinet or any other executive instruction the appellant was to be given seniority as claimed by him, it could not be done as in case of a conflict the statutory provisions contained in this behalf in proviso (iii) of Rule 35 of the Rules shah prevail.
In the result this appeal fails and is dismissed but in the circumstances of the case there shall be no order as to costs.
Appeal dismissed.
| The appellant and respondents 7 to 13 are Assistant Conservators of Forest and are governed by the Bihar Forest Service Rules, 1953.
As per Rule 3 thereof appointment to the said post is made either by direct recruitment or by promotion of selected Rangers.
The appellant and respondents 7 to 12 were promoters and respondent 13 was a direct recruit.
Though the appellant was promoted subsequent to the promotion of respondents 7 to 12, his appointment was made retrospective.
The appellant was the last to be confirmed as Assistant Conservator of Forest.
As a Ranger also the appellant was appointed much later to respondents 7 to 12.
On the basis of confirmation seniority has been determined.
The appellant challenged the seniority of respondents 7 to 13 over him, by way of a Writ Petition in the High Court.
He relied on a memorandum to the Cabinet which contained a note that if the appellant was found fit for promotion his place would be above 10 general category officers and since the memorandum was approved by the Cabi net his name in the seniority list should have been placed above those officers.
The respondents resisted the claim stating that the Cabinet had not approved the memorandum in its entirety.
The High Court dismissed the Writ Petition and this appeal, by special leave, is against the said judgment.
The contentions raised before the High Court were reiterated in this appeal, this appeal.
Dismissing the appeal, 202 HELD: 1.1.
Rule 35 of the Bihar Forest Service Rules, 1953 specifically deals with seniority.
In the instant case, Clause (i) of the proviso is not attracted.
Even Clause (ii) is not attracted inasmuch as respondent No. 13 even though was appointed by direct recruitment, was not appointed "at the same time" as the appellant and respondents7 to 12.
It is Clause (iii) which is relevant for the determination of the seniority inter se of the appellant and respondents 7 to 12.
On a plain reading of this Clause it is apparent that on substantive appointment of Rangers to the service by promo tion, their seniority inter se in the service is to be governed by "their seniority inter se held as Rangers".
The appellant as well as respondents 7 to 12 have already been confirmed as Assistant Conservator of Forest and meet the requirement of "substantive appointment to the service by promotion".
In order to determine their inter se seniority as Assistant Conservator of Forest, therefore, their senior ity inter se as Rangers shall be the determining factor.
Respondents 7 to 12 had been appointed as Rangers much before the date on which the appellant was appointed as a Ranger.
Hence the claim of seniority as made by the appel lant has no substance.
[204D; 205B E] 1.2.
It is settled law that the provisions of statutory rules cannot be modified or altered by executive instruc tions, and it is only in the absence of statutory rules that executive instructions have relevance.
As such even if for the sake of argument it may be accepted that on account of the memorandum to the Cabinet or any other executive in struction the appellant was to be given seniority as claimed by him, it could not be done, as in case of a conflict, the statutory provisions contained in proviso (iii) of Rule 35 of the Rules shall prevail.
[205E F]
|
Appeal No. 286 of 1961.
Appeal from the judgment and order dated January 27, 1960, of the Kerala High Court in I. T. R. Case No. 14 of 1955.
K.N. Rajagopal Sastri and D. Gupta, for the Appellant.
S.P. Desai J. B. Dadachan , O. C. Mathur and Ravinder Narain, for the respondent.
March 20.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
In this appeal by the Commissioner of Income Tax Kerala filed with 962 certificate of the High Court of Kerala, an important question of law was raised before the High Court, which was answered against the Department.
It arose in the following ,circumstances.
The respondent, the West Coast Chemicals and Industries, Ltd. (referred to as the assessee Company) was incorporated in 1937 primarily with the object of acquiring and working the rights, title and interest in a match factory belonging to one A. V. Thomas at Medical.
The Memorandum of Association of the asseesee Company, however, empowered the Company to manufacture and deal in acids, alkalis and other chemicals.
The assessee 'Company carried on its business of manufacturing matches till the account year ending, on April 30, 1941.
Thereafter, the profits from the business became less and less due to War conditions, and the assessee Company began to manufacture plywood chests for tea, paints and lemon grass oil.
These were contemplated by cl.
(3) of the ' Memorandum of Association.
On May, 9, 1943, the assessee Company entered into an agreement with one Rao Sahib Natesa Iyer for the sale of the lands, buildings, plant and machinery of its match factory for Rs. 5, 75,000.
It was agreed that the price would not include manufactured goods, chemicals and other raw materials or any other asset not shown in the agreement of sale.
The purchaser was allowed sixty days for the payment of the balance of the price, Rs. 57,500 having been already paid at the time the agreement was 'entered into.
The purchaser made a default in payment, and on August 9, 1943, a fresh agreement was entered .into by the parties, this time for a consideration of Rs. 7,35,000, and the sale included chemicals and paper for manufacture which had not been sold in the first instance.
In a confidential report made on August 1, 1944, to the shareholders, the 963 Directors stated that the price obtained had shown a capital appreciation of about six times the cost price, and the sale of chemicals had also resulted in a substantial profit.
Meanwhile, the assessment of the Company for the, account year ending April 30, 1944, bad been completed by the Deputy Commissioner of Income tax, and the assessee Company had been assessed on an income of Rs. 36,498 6 4.
The Deputy Commissioner of Income tax then issued a notice under section 25 of the Travancore Income tax Act to the Company 's Liquidator on the ground that the profits from the sale of the chemicals and paper for manufacture had escaped assessment.
The Official Liquidator took up the position that the match manufacturing had been stopped, and that business had been wound up, and there thus only an appreciation of the capital assets and not a business profit, which, was liable to assessment.
The Deputy Commissioner, however, relying, upon the Memorandum of Association, which allowed the assessee Company to manufacture and sell chemicals, and on the Directors report, held that the assessee Company was liable to income tax on a profit of Rs. 2 lakhs arising from this sale.
The Commissioner of Income tax on appeal, however, reduced the assessable profits to Rs. 1,15,259.
Before the Commissioner, the Liquidator admitted that the profit from the sale of the chemicals wits Rs. 1, 15,259.
An appeal was then filed before the Income tax Appellate Tribunal at Trivandrum, and the assessee Company contented that a stock in trade could only be that which was the subject of trade, and that the stock of raw material was not sold in the course of ordinary trading but in a reali sation sale after the Company had been wound up.
The Tribunal found that the business had not 964 completely ceased to exist, since the assessee Company was carrying on manufacturing, on behalf of the purchaser, and, the sale could not be regarded as a realisation sale after the Company was wound up, but had the characteristics of a trading sale.
At the request of the assessee Company, however, the Tribunal referred two questions to the High Court for its decision, and they were: "(1) whether the transaction of sale of the raw materials along with the business,including machinery, plant and premises is a revenue sale, and whether in the facts and circumstances of the case, the sum of Rs. 1,15,254has been rightly charged to income tax; and (2) whether the decision that the sale of match, machinery and premises, was distinct from the sale of chemicals is legally war ranted and whether there was legally a single, transaction of the entire match factory inclusive of raw materials?" It maybe pointed out that prior to the sale of chemicals to the purchaser, the only evidence of sale of chemicals by the assessee Company was of two transactions.
In the first transaction, there was a sale of chemicals on July 24, 1943,to an educational institution for Rs. 50 and another sale on October 30, 1943, to a stranger for Rs. 7 12 0.
The High Court held that by the sale no business was done, and that the amount obtained was only by way of realisation sale and was not, therefore, liable to tax. 'rho argument of the Department (also raised before the High Court) proceeds in this way.
The Department refers to the Memorandum of Association under which the assessee Company was to carry on the business of manufacturing and 965 selling chemicals, that in the past it bad sold chemicals, that in the first sale of its assets it had excluded chemicals and some other raw materials necessary for the manufacture of matches and had sold the concern for a lesser price, that later it included chemicals and raw materials and obtained a larger price, and that admittedly 'there was an identifiable profit of Rs. 1,15,259 on the sale of the chemicals and raw materials.
The Department, therefore, contends that the amount of Rs. 1, 15,259 was properly brought to tax as a trading profit.
The question, therefore, is whether there can be said to be a sale in the carrying on of the business in respect of the chemicals and other raw materials.
This question is not one easy to decide,specially with the assistance of rulings, in which the facts were different.
There is a great danger of extracting a principle from the reported cases, divorced from the facts.
In Halsbury 's; Laws of England, 3rd Edn., Vol. 20, pp. 115 117, there is a list in the footnotes of the cases which have been decided on one side or the other of the dividing line.
In the text, the law, as summarised from the cases, is stated as follows : "210.
Mere realisation of assets is not trading; but the completion of outstanding contracts after the dissolution of a firm, the commencement of liquidation of a company, or the winding up of the affairs of a trader, has been held to be trading. . 211 .
The cases illustrating the question arising in such circumstances can be divided into two categories, first, those where the sales formed part of trading activities, and, second, those where the realisation was not an act of trading".
This distinction, in our opinion, is a sound one.
The only difficulty is in deciding whether a particular 966 case belongs to one category or the other.
In this, much support cannot be derived from observations made by learned Judges pertaining to the facts of a case, but they do guide one in a true appraisement of the case in hand.
In the well known case of Californian Copper Syndicate vs Harris (1), the difference between the purchase price and the value of the shares for which the property was exchanged was considered as profit assessable to income tax.
There, the company was formed for the purpose of acquiring and reselling mining properties, and though what it had acquired had all been Bold or exchanged, the transaction was considered a business transaction failing within the avowed objects, of the Company.
The case has been accepted as decided on these narrow facts, in Tebrau (Johore) Rubber Syndicate Ltd. vs Farmer (2), in which a different conclusion was reached on slightly different facts.
There also, the Company was formed with the object of acquiring rubber estates and for developing them.
Under the Memo randum, the Company had the power to sell its properties.
Two properties having been acquired and the funds having run out, they were sold but at a profit.
This profit was considered as an appreciation of capital and not as assessable profit.
The difference between these two oases is that whereas in the former, though the whole of the property was sold, it was sold at; a part of trading, in the letter, the property was sold not as part of trading but on a winding up sale.
The Department relies upon Californian Copper Syndicate vs Harris (1),while the assesse Company relies upon Tebrau (Johore)Rubber Syndicate Ltd. vs Farmer (2) .
These cases were also considered and applied by the Privy Council in Doughty vs Commissioner of Taxes (3), which is relied upon by (1) (2) (3) 967 both sides, in view of certain observations of the Privy.
Council, to which we shall presently refer.
In that case, there were two partners carrying on business in New Zealand as general merchants.
They sold the partnership to a limited company, of which they were the only shareholders.
The sale was of the entire assets including the goodwill, and the price was payable in the shape of fully paid shares in the new company.
The nominal value of the shares was more then the capital account as shown in the last balance sheet, and the partners prepared a new balance sheet in which a larger value was placed upon the stock in trade.
The Income tax authorities in New Zealand treated the difference between the value placed on the stock in trade in the old balance sheet and that placed in the new balance sheet as a profit liable to tax.
The Privy Council held that this was wrong, pointing out that for profit to arise, there must be a trading, and that a mere alteration of a book keeping entry was not evidence that there was profit.
It also held that the sale was of the entire assets, and that the price represented a payment for the entire business without a separate sale or valuation of this stock in trade for purposes of sale.
It referred to two cases decided respectively by the Supreme Court of New Zealand and the, High Court of Australia, in which sales by pastora lists of their flock of sheep had taken place.
In the New Zealand case, the excess obtained over the book value was treated as assessable profit, but in the Australian case, it was not.
Both the sales were of the entire stock.
The Privy Council approved of the Australian case, and though it did not ex pressly dissent from the New Zealand case, it indicated that it found it difficult to appreciate the decision.
These two cases from New ' Zealand and Australia were, of course, relied upon by the rival parties before us, and we shall consider them.
968 The Australian case is Commissioner of Taxation (W. A.) vs Newman (II.
A person who carried on business in Western Australia as a pastoralist sold his property including all live stock and plant, as a going concern.
The Commissioner of Taxation for the State apportioned the purchase money in respect of the live stock, and assessed the amount which was received in excess, as income derived from carrying on a business.
The High Court held that the transaction was not during the carrying on of the business or even for the purpose of carrying on the business, but was for the purpose of putting an end to the business, and that thus the excess represented a capital appreciation and not a trading profit.
The Now Zealand case is Anson vs Commissioner of Taxes (2).
In that case also, a sheep farmer sold his entire stock of sheep.
He had the practice of placing on his sheep at the beginning and end of each year an arbitrary value without reference to the, actual market value.
When he sold his entire stock, a nominal profit of pound 5,000 odd appeared, and he was assessed on it.
The Supreme Court hold that it was not an accretion to capital but a profit on the sale of the appellant 's stock in trade.
Sir John Salmond, who delivered the judgment of Court, observed that the holding of a sheep farmer was not a capital holding, but his sheep represented a stock in trade, and since every appreciation of a stock in trade represented a profit assessable to income tax, it mattered not that the stock in trade was sold at once or from time to time.
Of this case, the Privy Council in Doughty 's case (3) did not say much, but enough to cast a doubt upon it.
This is what the Privy Council said at p. 335.
"It would be difficult to arrive at the profit in this way if it were the case of a (1) [1921] 2 (2) [1922] N.7.L.R. 330.
(3) [1927] A. C. 327.
969 farmer in England but the trade of a pastora list is one with which the New Zealand Courts would be familiar, and which it would be more easy for the New Zealand Judges than for their Lordships to appreciate.
" The Privy Council made a distinction between a sale of the entire stock as a part of trading and a sale of the same stock as a winding up sale.
It observed that if the business be one of purely buying and selling, "a profit made by the sale of the whole of the stock, if it stood by itself, might well be assessable to income tax".
It observed that in Dougherty 's case (1) the sale was a slump transaction, and was a winding up of the business rather than a trading.
The Privy Council further pointed out that there is a difficulty in deciding cases of a business, which involve breeding of sheep for the purpose of selling wool This is quite true, because the sheep may be regarded as the capital, with which the wool, which is sold, is produced, or the sheep with the wool on them may be regarded as the stock in trade.
Such a question, fortunately, does not arise in the present case, which can be decided on the narrow ground whether the business was being wound up and the sale, a realisation sale, or whether trading was going on in spite of the winding up, so as to attract tax on profits made.
Before we answer this question in relation to the facts of this case, we wish to refer to a ' few more cases, which were cited before us.
In J. & R. O 'Kane & Co. vs The Commissioners of Inland Revenue (2), the appellants carried on business as wine and spirit merchants.
They then wished to retire from the business and sent a circular letter to their customers.
During the year, they sold their *bole stock to diverse customers. , and the question was whether they were still carrying on their trade during that period, and whether the profits were thus made in the (1) [1927] A.C. 327.
(2) 970 ordinary course of trade.
It was held by the King 's Bench Division of the High Court of Justice in Ireland that the sales were not in the ordinary course of trade but were part of the realisation of the trading stock and winding up of the business, and thus not liable to tax.
The Court of Appeal in Ireland unanimously reversed the decision of the High Court.
Ronan, L. J., pointed out that though the taxpayer had retired from business and had decided not to purchase any more stock, he was still carrying on the business of trading in wines and spirits till his existing stocks were exhausted, and, therefore, the excess obtained by him represented profit.
On appeal to the House of Lords, it was held that there was evidence on which the Commissioners could arrive at their finding that trading was, in fact, being carried on.
Lord Buckmaster, speaking Of the facts in that case, observed as follows : "For in truth it is quite plain that right up to the en of 1917 they were engaged in trading which, so far as the external world is concerned, was the ordinary method of carrying on trade modified only by arrangements which were merely part of the machinery of business dealing adopted to effect their intention to retire.
It may well be accepted that they did so intend ; yet the intention of a man cannot be considered as determining what it is that his acts amount to; and the real thing that has to be decided here is what were the acts that were done in connection with this business and whether they amount to a trading which would 'cause the profits that accrued to be profits arising from a trade or business The case was, therefore, decided on the finding of the special Commissioners, for which there was enough material in evidence.
Similarly, the case 971 of The Commissioner of Inland Revenue vs "Old Bashmills" Distillery Co., Ltd. (in Liquidation) (1) was one decided on a finding, in support of which there was evidence.
The two cases relied upon by the Department and the assessee Company respectively do not shed any light upon the problem before us ' because the central decision in both of them was whether the Commissioners ' finding was justified or not.
In J. and M. Craig (Kilmarnock),Ltd.
vs Cowperthwaite(2), the question was how the opening .stock should have been valued, And whether any profit could be said to have resulted.
The Privy Council in Doughty 's case (3) remarked about this case as follows: "There, on a transference from one company to another, one third of the value of each item, other than stock in trade, as it stood in the books of the selling company, was treated as its value for transfer purpose, and the balance of a slump price, which, with an under taking to discharge liabilities, formed the consideration, was inferentially attributable to the stock.
It was held, however, in that case that no sum could be pitched upon as the actual price of the stock, and no claim to assess a profit could be based upon such a foundation.
" This case shows that where a slump price is paid and no portion is attributable to the stock iii trade, it may not be possible to hold that there is a profit other than what results from the appreciation of capital.
The essence of the matter however, is not that an extra amount has been gained by the selling out or the exchange but whether it can fairly (1) (2) (3) (1927) A.C. 327.
972 be said that there was a trading from which alone profits can arise in business.
If this test is applied to the present case, then the true answer would be the one given by the High Court in the judgment under appeal.
There is no doubt, in this case, that the assessee Company was wound up at least in so far as its match manufacture was concerned.
That the business of the Company was sold as a going concern, and was, in fact, worked by the assessee Company on behalf of the buyer till the entire consideration was paid, makes no difference, because the agreement clearly indicated that the, assessee Company was keeping the factory going, not on its own behalf but entirely on behalf of the buyer.
One cannot fairly say, therefore, that a sale of the chemicals and raw materials for match manufacture was anything more than a winding up sale, not with a view to trading in chemicals and raw material but to close down the business and to realise the assets.
There was, in fact, no identifiable price for the chemicals and raw materials except by comparing the two prices offered to be paid by the buyer, that is to say, the price without the chemicals and raw materials and the price with them.
From that alone, however, it is impossible to infer that the chemicals and raw materials were sold in the ordinary way of business or that the assessee Company was carrying on a trading busi ness.
The fact that the clause in the Memorandum gave power to the Company to Bell chemicals cannot be used in this connection, because the evidence clearly shows that that clause was never used and the two sales of chemicals through the years were too petty in themselves to afford evidence of a continued or sustained trading In chemicals.
In our judgment, this was a winding up sale with a view to realising the capital assets of the assessee 973 Company and not a sale in the course of business operations, which alone would had attracted tax, if profit resulted.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The respondent company was incorporated in 1937 primarily with the object of acquiring and working a match factory.
Under the memorandum of association the company was also empowered, inter alia, to manufacture and deal in chemicals.
The business of manufacturing matches was carried on by the company till 1941.
Thereafter the profits became less and less due to war conditions.
On May 9, 1943, the company entered into an agreement with a third party for the sale of the lands, buildings, plant and machinery of its match factory for Rs. 5,75,000.
It was agreed that this price would not include manufactured goods, chemicals and other jaw materials or any other asset not shown in the agreement of sale.
Later, a fresh agreement was entered into on August 9, 1943, under which the sale included chemicals and paper for manufacture which had not been sold in the first instance and the price was Rs. 7,35,000.
In a report to the shareholders dated August 1, 1944, the Directors stated that the price obtained had shown a capital appreciation of about six times the cost price and that the sale of chemicals had resulted in ' substantial profit.
In proceedings for assessing income which had escaped assessment the income tax authorities, relying upon the memorandum of association which allowed the 961 company to manufacture and sell chemicals and on the Directors ' report, held that the profit from the sale of the chemicals and other raw materials was liable to income tax on a profit of Rs. 2,00,000 which was reduced later to Rs. 1, 15,259.
The company claimed that the stock of raw materials was sold not in the course of ordinary trading but only in a realisation sale after the company had been wound up.
The evidence showed that the clause in the memorandum of association giving power to the company to sell chemicals was seldom used and that prior to the sale of chemicals to the purchaser, two transactions of sale of chemicals for small amounts in 1943 were too petty in themselves to afford evidence of trading in chemicals.
Held, that though under the second agreement dated August 9, 1943, more price was paid, the transaction was still a winding up sale and no part of this slump price was identifiable as the price of the chemicals and other raw materials.
There was no evidence that before the winding up the company had sold chemicals as part of its business, and the two instances cited were too petty in themselves to afford evidence of a continued or sustained trading in chemicals.
A winding up sale is not "trading or doing business" and the sale of the raw materials including the chemicals was not part of any business done.
Accordingly, the sum of Rs. 1,15,259 was not liable to tax.
Doughty v Commissioner of Taxes, (1927) A. C. 327, di. ',Cussed and relied on.
Case law reviewed.
|
: Criminal Appeal No 188 of 1971.
Appeal by special leave from the judgment and order dated the 29 9 1970 of the Gujarat High Court in Criminal Appeal No. 410 304 D. Mookherjee, section K. Dholakia and M. N. Shroff, for the appellant.
K. J. Shethna and Vimal Dave and Miss Kailash Mehta, for the respondent.
The Judgment of the Court was delivered by GOSWAMl, J.
The accused Haidarali Kalubhai was convicted by the Sessions Judge, Mehsana, under section 304 Part II, Indian Penal Code, and was sentenced to rigorous imprisonment for seven years for causing death of Mahomadali Kasamali.
He was also convicted under sections 326 and 323 I.P.C. and sentenced to rigorous imprisonment for two years and to three months respectively in connection with injuries to two other persons.
On appeal to the High Court conviction was altered to one under section 304 A.I.P.C.
Only and the accused was sentenced to rigorous imprisonment for eighteen months and to a fine of Rs. 500/ , in default rigorous imprisonment for six months.
Briefly the facts are as Follows: It was usual for the deceased Mahomadali Kasamali, who was the sarpanch of village Nandasan, to spend some hours of the night from 8.00 P.M. to 11.P.M. near the Hotel Shanker Vijay which is situated by the side of the highway from Mehsana to Ahmedabad.
There is a big open space in front of the hotel towards the north and a kutcha road branches off from the highway towards Dangarwa.
This kutcha road is almost in the centre of the open space in front of the hotel measuring about 80 feet.
It is said that the portion immediately in front of the hotel is about two feet higher in elevation from the kutcha road.
On August 23, 1969, the accused came in a tractor and stopped the same on the highway.
He saw truck No. G.T.F. 904 which Was parked opposite to the aforesaid hotel of Vasudev (P.W. 7).
The owner of the truck had gone to the village leaving his conductor Usman Imamali (P.W. 11) in the truck.
It is said that the accused used to drive this truck earlier with permission of the truck owner.
This time he used the key of his tractor to start the truck and he drove the same by the open field in front of the hotel.
He drove the truck with the head lights on in full speed straight on the steel cot on which The deceased was resting with the result that the truck dashed against the cot and the deceased was thrown away to a distance of about ten feet from the cot.
Head Constable Revajit (PW 3) was sitting on the same cot with the deceased and he was also thrown away.
There was another wooden cot nearby where Constable Dalpat Singh (PW 4) and Vavdinmiya (PW 5) were sitting.
The Head Constable with the other Constable came to meet the Sarpanch in connection with the investigation of a certain case.
Since there was enmity between the accused and the deceased on account of Panchayat elections the prosecution case is that the accused willfully and deliberately drove the vehicle towards the cot with the intention of causing death to the A deceased Sarpanch.
The accused was originally charged under section 302 IPC and under section 326 and 323 IPC with the result mentioned above.
Hence this appeal by the State by special leave against the judgment of the High Court.
The question that arises for consideration is whether the facts that `are established against the accused fulfil the ingredients of section 304 305 Part II as submitted by Mr. Debabrata Mukherjee on behalf of the State.
According to the learned counsel this is a clear case under section 304 Part II and conviction under section 304A is unsustainable.
Section 304A carves out a specific offence where death is caused by doing a rash or negligent act and that act does not amount to culpable homicide under section 299 IPC or murder under section 300 IPC.
If a person willfully drives a motor vehicle into the midst of a crowd and thereby causes death to some person, it will not be a case of mere rash and negligent driving and the act will amount to culpable homicide.
Each case will, therefore, depend upon the particular facts established against the accused.
The prosecution in this case wanted to establish a motive for committing the offence against the Sarpanch.
It was sought to be established that there was enmity between the Sarpanch and the accused ` and his relations on account of Panchayat elections.
Some evidence was led in order to prove that the accused and his relations were gunning against the Sarpanch for some time after the latter 's election as Sarpanch.
Even an anonymous letter was received by the Sarpanch threatening his life which was handed over to the police by the Sarpanch.
Both the Sessions Judge as well as the High Court did not accept the evidence appertaining to motive.
Mr. Mukherjee, therefore, rightly and very fairly did not address us with regard to that part of the case.
Even so, the learned counsel submits that the act per se and the manner in which the vehicle was driven clearly brought the case under section 304 Part II IPC.
The following facts are established.
The accused drove the truck at great speed with lights on.
He had the conductor with him in the truck.
Some time before driving the truck the accused had seen the Constables talking with the Sarpanch at the spot in question.
There is no evidence that the accused had a licence to drive the truck.
It, however appears from it.
70, which is a complaint in criminal case No. 160 of 1969 dated January 17, 1969 that the accused "had no licence. while driving his truck No. GTF 704.
" While the two Constables jumped from the cot and escaped the deceased could not do so in spite of being alerted by the Head Constable as he was in a Lying posture on the cot.
It appears from the map of the scene Ext.
9 that the truck while being driven by the field was trying to turn towards the kutcha road at a point near the cot shown in the map.
This would go to show that the accused was unable to control the vehicle in high speed while taking a turn to get into the kutcha road from the open field and in this process hit the cot throwing the deceased out of the cot by the impact resulting in injuries which ultimately led to his death.
Even the Constables, who jumped from the cot, received injuries.
There was no direct impact of the persons with the vehicle in speed.
The accused in his statement under section 342, Criminal Procedure Code, stated as follows: "I took the truck in reverse first and as there were other trucks lying round about, I took out my truck from the available way.
306 The accilator (sic) stuck down and hence the truck went in full speed and did not remain in control.
One truck was coming from opposite side with full light.
While driving with (sic) this way, I heard some noise, and the conductor Usman told me that the truck had struck with something then I heard some shouts and realised that some persons were injured but I did not stop the truck through fear of assault . truck through fear of assault . .
I presented myself at the Police Station".
Now this version is supported by Usman (PW 11) who, however, has been declared hostile by the prosecution.
He was cross examined by the prosecution in order to show that he made a wrong statement in the examination in chief when he stated that the accused drove the truck with the key of the truck whereas he had stated before the police that the accused came on his tractor and started the truck with his key.
He was also cross examined about a truck coming from the opposite side with full light that he had not stated to the police to that effect.
We do not think that the omission to mention before the police about another truck coming from the opposite direction can be a contradiction within the meaning of section 162, Criminal Procedure Code.
We also do not give much importance as to whether the accused drove the truck with his key or with the key of the tractor.
That has not much relevance in view of the fact that the accused admitted to have driven the truck.
Besides, it is admitted by the prosecution witnesses (PWs ' 2 and 6) that the conductor (PW 11 ) was in the truck when the accused drove the same.
PW11 is, therefore, a natural witness and we do not find any reason to disbelieve him when he stated that a truck was coming from the opposite direction with full lights on.
Besides, the owner of the truck having not found the truck in the place where he had parked had already telephoned to the Police Station about someone taking away the truck.
PW11, who is an employee of the truck owner, was, therefore, not even obliged to speak in favour of the accused.
The facts disclosed in the prosecution evidence, therefore, do not make out a case of any wilful or deliberate act on the part of the accused in order to cause the death of the Sarpanch by driving the truck in the way he did.
Besides, the presence of the Head Constable and another Constable with the deceased whom the accused had himself seen prior to his driving the truck would run counter to a theory of wilful and deliberate act on the part of the accused to cause the death not only of the Sarpanch but necessarily also of the Constables.
Section 304A by its own definition totally excludes the ingredients of section 299 or section 300 IPC.
Doing an act with the intent to kill a person or knowledge that doing of an act was likely to cause a person 's death are ingredients of the offence of culpable homicide.
When intent or knowledge as described above is the direct motivating force of the act complained of, section 304 A has to make room for the graver 307 and more serious charge of culpable homicide.
Does this happen in A this case ? The tangential track of the speeding truck coming in contact with the corner of the steel cot throwing it over the wooden cot and thereby throwing the deceased out of it resulting in fatal injuries would not reveal the accused intention or any deliberate act with the requisite knowledge for an offence of culpable homicide.
The facts and circumstances disclosed in this case fit in more reasonably with the theory of loss of control by the accused of the vehicle in high speed trying to take a turn for the kutcha road.
There is, therefore, no error committed by the High Court in holding that the falls under section 304A IPC and not under 304 Part II IPC.
The appeal is accordingly dismissed.
C S.R. Appeal dismissed.
| One of the buses belonging to the appellant, DLB 5749, driven by "HS" enroute to Hissar, while negotiating a turn in village Kheri Sadh overturned, causing the death of "LWS" and injuries to many.
At the time of the fatal accident, the bus was over loaded with passengers and goods, driven by "HS" at an excessive speed despite protests by the passengers while negotiating a turn.
A suit for damages was filed by the legal heirs of deceased "LWS" against the driver and the appellant, the liability of the appellant arising out of the fact of its negligence in employing such a rash and negligent driver who was responsible for the accident acting in the course of its employment.
The appellant took the plea of "vis major", there being rain on the fateful day and the breaking of the tie rod of the vehicle when it fell into a pit and making the bus out of the control of the driver.
The suit was dismissed fixing the "quantum damni ficatus" at Rs. 34,210/ applying the principle of "quantum meruit" and on appeal the Punjab and Haryana High Court held that the accident was due to negligence attributable to the driver or both the driver and the appellant and decreed the suit, basing on the cogent and trustworthy evidence of P.Ws. 5, 6 and 8 to these facts (i) overload of the bus with goods and passengers; (ii) Witness and slippery nature of the road due to drizzling (iii) The expert report of the mechanic to the effect that the "tie rod" of the vehicle was only "opened" (dismantled) but not broken and the bad conditions of the foot brake and hand brakes: (iv) Factum of negotiating a turn and passing through the habitation of village Kheri; (v) Zig zag movement of the bus and the fast speed at which the bus was driven despite protests and shouts of the passengers.
(vi) The actual) speed of the bus at 30 miles per hour at the time ", of the accident and (vii) over turning of the bus resulting in the death of "LWS" on the spot and injuries to many.
The High Court, drawing an adverse inference against the appellant and the driver for non appearance in the witness box held that "inasmuch as buses in sound road worthy condition and driven with ordinary care do not normally overtime, and in this case the bus did overturn, the principle of "res ipsa loquitur" applied.
" The High Court also awarded a decree for Rs. 21,600/ with proportionate cost as damages against the appellant and the driver limiting the liability of Rs. 2,000/ only against the insurance company.
On appeal by certificate the appellant contended (i) that it was wrong to assume that over turning of the bus was "res ipsa loquitur"; (ii) that it was wrong to shift the onus on the appellant to show that they were not negligent and (iii) that in the absence of specific assignment of the reasons by the witnesses in their evidence the sudden breaking` of the tie rod was the cause of the accident and hence a vis major".
Dismissing the appeal, the Court, 179 ^ HELD: (1) ordinarily in second appeal, it is not necessary for the court to reappraise the evidence on record because the first appellate court is supposed to be the final court of fact.
[182E] (2) Buses in sound road worthy condition, driven with ordinary care, do not normally over turn.
It would be for the driver who had special knowledge of the relevant facts to explain why the vehicle over turned.
The maxim "res ipsa loquitur" would be attracted in such a case.
In the present case, the defendants failed to rebut the presumption of negligence that arose from the manifest circumstances of the case.
[184 C D] Shyam Sundar and others vs State of Rajasthan, A.I.R. , not applicable.
Barkway vs South Wales Transport Co. Ltd. [1948] 2 All.
E.R. 460, applied.
(3) Viewed in the light of the other circumstances, in the instant case, like overloading, negotiating of a turn near the village habitation on a slippery road a duty was cast on the driver to go dead slow.
A speed of 25 to 30 miles per hour, in these conditions and in this situation, at the turning of the road would be imprudently excessive.
[184A B] (4) Had the bus been properly maintained in a sound road worthy condition and used with due care and driven with due caution, the tie rod should not have broken loose by the fall of the wheel in a pit hardly six inches deep, particularly when the upward thrust of the water in the pit would have largely absorbed the shock of the fall.
The pit was in the kacha berm and not right in the mettled portion.
The driver could have with ordinary care and diligence avoided it.
Thus, the breaking of the tie rod assuming it did break was.
at best, a neutral circumstance.
[184 B C] (5) In the instant case the driver was admittedly an employee of the appellant company, and at the relevant` time he was acting in the! course of his employment.
The vehicle was the property of the appellant company under whose management defendant 3 was working at the material time.
It s well settled that where in an action for negligence the thing causing fatal injury to the deceased and consequent pecuniary loss to the plaintiff, is shown to be under the management of the defendant or his servants and the accident is such as in the ordinary course of events, does not happen, if those who have the management use proper case, that affords reasonable evidence, in the absence of explanation by the defendants, that the accident arose from want of care.
The appellant company was, therefore, fully liable for the negligent act of their employee and the injury resulting therefrom.
[185 D F]
|
minal Appeal No. 162 of 1959.
Appeal by special leave from the judgment and order dated January 13, 1959, of the Rajasthan High Court in D. B. Criminal Revision No. 47 of 1957.
267 N. C. Chatterjee, J. L. Datta and C. P. Lal, for the appellant.
Mukat Behari Lal Bhargava and Naunit Lal, for respondent No.2.
April 24.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
On June 13,1950, the Municipal Committee, Ajmer, respondent 2, issued a notice against the appellant, the Durgah Committee, Ajmer, under section 153 of the Ajmer Merwara Municipalities Regulation, 1925 (VI of 1925) (hereafter called the Regulation) calling upon it to carry out certain repairs in the Jhalra Wall which was in a dilapidated condition.
The appellant did not comply with the said requisition and so respondent 2 served another notice on the appellant under section 220 of the Regulation inti mating to it that the required repairs would be carried out at the expense of respondent 2 and that the cost incurred by it would be recovered from the appellant.
This notice was served on July 3, 1950.
Even so the appellant took no steps to make the repairs and so respondent 2 proceeded to get the repair work done at its expense which amounted to Rs. 17,414.
Under section 222(4) of the Regulation this sum became recoverable from the appellant as a tax.
A notice of demand in that behalf was issued on the appellant on April 1, 1952, and in pursuance of the said notice respondent 2 applied to the Additional Tehsildar and Magistrate II Class, Ajmer, for the recovery of the said amount under section 234 of the Regulation.
In the proceedings before the learned Magistrate the appellant raised certain pleas.
These pleas were rejected and an order was passed calling upon the appellant to pay the dues in question by August 30, 1956.
Against this order the appellant preferred a criminal revision application in the Court of the Sessions Judge, Ajmer.
The learned Sessions Judge considered the contentions raised by the appellant and held that the view taken by the Magistrate cannot be said to be incorrect and so there was no ground to interfere in revision.
Feeling aggrieved by the dismissal of its 268 revision application the appellant moved the High Court of Judicature for Rajasthan in its revisional jurisdiction.
Before the High Court, on behalf of respondent 1, the State of Rajasthan, as well as respondent 2, a preliminary objection was raised that the criminal revision application filed by the appellant was incompetent since the Magistrate who entertained respondent 2 's application made under section 234 ",as not an inferior criminal court under section 439 of the Code of Criminal Procedure.
This preliminary objection was upheld by the High Court and the criminal revision application dismissed on that ground.
It is against this order that the appellant has come to this Court by special leave; and the short question which the appeal raises for our decision is whether the Magistrate who entertained the application made before him by respondent 2 under section 234 was an inferior criminal court under section 439 of the Code of Criminal Procedure.
Before dealing with this point it is relevant to refer to the scheme of the material provisions of the Regulation.
Section 153 confers power on the Municipality to order removal or repair of buildings which may be found in a dangerous state.
Under this section the Committee may by notice require the owner of the building, wall or structure to remove the same forthwith or cause such repairs as the Committee may consider necessary for the public safety.
This section also empowers the Committee to take at the expense of the owner any steps which it thinks necessary for the purpose of averting imminent danger.
If the owner on whom a notice is served under section 153 complies with the requisition nothing more need be done.
If, however, the owner does not comply with the requisition served on him the Committee is empowered to cause the repairs to be made after six hours notice to the owner under section 220.
This section provides that whenever the terms of any notice issued under this Regulation have not been complied with the Committee may, after six hours ' notice, cause the act to be done by its officers.
As a corollary to this provision, and indeed as its consequence, section 222 empowers the Committee to recover the cost of the work done 269 under section 220.
Section 222(1) authorises the Committee to recover the cost of the work from the person in default.
Sub sections (2) and (3) of section 222 then deal with the question as to which person should be held to be in default, the owner or the occupier; with that question we are not concerned in the present appeal.
Sub section (4) of section 222 provides that where any money recoverable by the Committee under this section is payable by the owner of the property, it shall be charged thereon and shall be recoverable as if it were a tax levied by the Committee on the property.
By sub section (5) it is provided that the contract between the owner and the occupier is not affected by this section.
It is under section 222(4) that a demand notice was served on the appellant by respondent 2.
That takes us to section 234 which provides for the machinery of recovery of municipal claims.
This section provides, inter alia, that any tax claimable or recoverable by a Committee under this Regulation, after demand has been made therefor in the manner prescribed by rule, be recovered on application to a Magistrate having jurisdiction within the limits of the Municipality or in any other place where the person by whom the amount is payable may for the time being reside, by the distress and sale of any movable property within the limits of such Magistrate 's jurisdiction belonging to such person.
The proviso to this section prescribes that nothing in this section shall prevent the Committee at its discretion from suing for the amount payable in any competent Civil Court.
It would thus be seen that the object of making an application to the Magistrate is to obtain an order from the Magistrate direct ing the recovery of the tax claimable or recoverable by distress and sale of any movable property belonging to the defaulter.
It is under this section that tile Magistrate was moved by respondent 2.
That in brief is the scheme of the material provisions of the Regulation.
The main argument which Mt .
Chatterjee, for the appellant, has pressed before us is that in determining the nature of the proceedings under section 234 and the character of the Magistrate who entertains an application made under the said section, it is important to 35 270 bear in mind that a person in the position of the appellant has no other opportunity to challenge the validity of the notice as well as the validity of the claim made against him by the Committee.
The argument is that it would be open to the owner to contend that the notice issued under section 153 is invalid or frivolous.
It would also be open to him to contend that the amount sought to be recovered from him is excessive and that even if the repairs were carried out they could not have cost as much, and since the scheme of the Regulation shows that it provides no opportunity to the owner to raise those contentions except in proceedings under section 234 the nature of the proceedings and the character of the Magistrate who entertains them should be liberally construed.
The proceedings should be deemed to be judicial proceedings and the Magistrate should be held to be an inferior criminal court when he entertains the said proceedings.
If the assumption on which the argument proceeds that the Regulation provides no other opportunity to the owner to challenge the notice or to question the amount claimed from him were sound then there would be some force in the contention that section 234 should be liberally construed in favour of the appellant.
But is that assumption right? The answer to this question would depend upon the examination of three relevant provisions of the Regulation; they are sections 222(4), 93 and 226.
We have already seen that section 222(4) provides that any money recoverable by the Committee under section 222(1) shall be recovered as if it were a tax levied by the Committee on the property and shall be charged thereon.
Section 93 provides for appeals against taxation.
Section 93(1) lays down, inter alia, that an appeal against the assessment or levy of any tax under this Regulation shall lie to the Deputy Commissioner or to such officer as may be empowered by the State Government in this behalf.
The remaining five subsections of section 93 prescribe the manner in which the appeal should be tried and disposed of.
If the amount recoverable by respondent 2 from the appellant is made recoverable as if it were 271 a tax levied by the Committee, then against the levy of such a tax an appeal would be competent under section 93(1).
Mr. Chatterjee argues that section 93(1) provides for an appeal against the levy of a tax, and he draws a distinction between the amount made recoverable as if it were a tax and the amount recoverable as a tax.
His contention is that the amount which is recoverable under section 222(1) is no doubt by fiction deemed to be a tax but against an amount thus deem.s.
93(1).
We are not impressed by this argument.
If by the fiction introduced by section 222(4) the amount in question is to be deemed as if it were a tax it is obvious that full effect must be given to this legal fiction; and in consequence just as a result of the said section the recovery procedure prescribed by section 234 becomes available to the Committee so would the right of making an appeal prescribed by section 93(1) be available to the appellant.
The consequence of the fiction inevitably is that the amount in question can be recovered as a tax and the right to challenge the levy of the tax accrues to the appellant.
This position is made perfectly clear by section 226.
This section provides, inter alia, that where any order of a kind referred to in section 222 is subject to appeal, and an appeal has been instituted against it, all proceedings to enforce such order shall be suspended pending the decision of the appeal, and if such order is set aside on appeal, disobedience thereto shall not be deemed to be an offence.
It is obvious that this section postulates that an order passed under section 222 is appealable and it provides that if an appeal is made against such an order further proceedings would be stayed.
It is common ground that there is no other provision in the Regulation providing for an appeal against an order made under section 222(1); and so inevitably we go back to section 93 which provides for an appeal against the levy of a tax.
It would be idle to contend that though section 226 assumes that an appeal lies against an order made under section 222(1) the Legislature has for.
gotten to provide for such an appeal.
Therefore, in our opinion, there can be no doubt that reading 272 sections 222, 93 and 226 together the conclusion is inescapable that an appeal lies under section 93(1) against the demand made by the Committee on the owner of the property under section 222(1).
If that be so, the main, if not the sole argument, urged in support of the liberal construction of section 234 turns out to be fallacious.
ow, looking at section 234 it is clear that the proceedings initiated before a Magistrate are no more than recovery proceedings.
All questions which may legiti mately be raised against the validity of the notice served under section 153 or against the validity of the claim made by the Committee under section 222 can and ought to be raised in an appeal under section 93(1), and if no appeal is preferred or an appeal is preferred and is dismissed then all those points are concluded and can no more be raised in proceedings under section 234.
That is why the nature of the enquiry contemplated by section 234 is very limited and it prima facie partakes of the character 'of a ministerial enquiry rather than judicial enquiry.
In any event it is difficult to hold that the Magistrate who entertains the application is an inferior criminal court.
The claim made before him is for the recovery of a tax and the order prayed for is for the recovery of the tax by distress and sale of the movable property of the defaulter.
If at all, this would at best be a proceeding of a civil nature and not criminal.
That is why, we think, whatever may be the character of the proceedings, whether it is purely ministerial or judicial or quasi judicial, the Magistrate who entertains the application and holds the enquiry does so because he is designated in that behalf and so he must be treated as a persona designata and not as a Magistrate functioning and exercising his authority under the Code of Criminal Proce dure.
He cannot therefore be regarded as an inferior criminal court.
That is the view taken by the High Court and we see no reason to differ from it.
In the present appeal it is unnecessary to consider what would be the character of the proceedings before a competent Civil Court contemplated by the proviso.
Prima facie such proceedings can be no more than execution proceedings.
273 Mr. Chatterjee also attempted to argue that the proceedings under section 234 taken against the appellant by respondent 2 were incompetent because a demand, has not been made by respondent 2 on the appellant in the manner prescribed by rule as required by section 234.
It does appear that rules have not been framed under the Regulation and so no form has been prescribed for making a demand under section 222(1).
Therefore the argument is that unless the rules are framed and the form of notice is prescribed for making a demand under section 222(1) no demand can be said to have been made in the manner prescribed by rules and so an application cannot be made under section 234.
There are two obvious answers to this contention.
The first answer is that if the revisional application made by the appellant before the High Court was incompetent this question could not have been urged before the High Court because it was part of the merits of the case and so cannot be agitated before us either.
As soon as it is held that the Magistrate was not an inferior criminal court the revisional application filed by the appellant before the High Court must be deemed to be incompetent and rejected on that preliminary ground alone.
Besides, on the merits we see no substance in the argument.
If the rules are not prescribed then all that can be said is that there is no form prescribed for issuing a demand notice; that does not mean.
that the statutory power conferred on the Committee by section 222(1) to make a demand is unenforceable.
As a result of the notice served by respondent 2 against the appellant respondent 2 was entitled to make the necessary repairs at its cost and make a demand for reimbursement of the said cost.
That is the plain effect of the relevant provisions of the Regulation; and so, an amount which was claimable by virtue of section 222(1) does not cease to be claimable just because rules have not been framed prescribing the form for making the said demand.
In our opinion, therefore, the contention that the application made under section 234 was incompetent must be rejected.
It now remains to consider some decisions to which 274 our attention was drawn.
In Crown through Municipal Committee, Ajmer vs Amba Lal (1), the Judicial Commissioner Mr. Norman held that a Magistrate entertaining an application under section 234 of the Regulation is an inferior criminal court.
The only reason given in sup port of this view appears to be that the Magistrate before whom an application under the said section is made is appointed under the Code of Criminal Procedure, and so he is a criminal court although he is not dealing with crime.
That is why it was held that he had jurisdiction to decide whether the conditions under which the Municipality can resort to the Magistrate are fulfilled.
Having come to this conclusion the learned Judicial Commissioner held that a revision against the Magistrate 's order was competent.
In our opinion this decision does not correctly represent the true legal position with regard to the character of the proceedings under section 234 and the status of the Magistrate who entertains them.
In Re Dinbai Jijibhai Khambatta (2) the Bombay High Court held that the order made, by a Magistrate under section 161(2) of the Bombay District Municipalities Act, 1901 (Bombay III of 1901) can be revised by the High Court under section 435 of the Code of Criminal Procedure.
This decision was based on the ground that the former part of section 161 was purely judicial and it was held that the latter part of the said section though not clearly judicial should be deemed to partake of the same character as the former part.
Thus the decision turned upon the nature of the provisions contained in section 161(2).
In V. B. D 'Monte vs Bandra Borough Municipality(1) a Full Bench of the Bombay High Court, while dealing with a corresponding provision of the Bombay Municipal Boroughs Act XVIII of 1925, namely, section 110, has held that in exercising its revisional jurisdiction under section 110 the High Court is exercising a special jurisdiction conferred upon it by the said section and not the jurisdiction conferred under section 435 of the Code of Criminal Procedure.
According to this (1) Ajmer Merwara Law journal, Vol.
V, P. 92.
(2) Bom.
(3) I.L.R. 275 decision the matter coming before the High Court in such revision is of civil nature and so the revisional application would lie to the High Court on its civil side and not on its criminal side.
It is significant that the decision in the case of Emperor vs Devappa Ramappa (1) which took a contrary view was not followed.
In Re Dalsukhram Hurgovandas (2) the Bombay High Court had occasion to consider the nature of the proceedings contemplated by section 86 of the Bombay District Municipal Act III of 1901.
Under the said section a Magistrate is empowered to hear an appeal specified in the said section; and it was held that in hearing the said appeals the Magistrate is merely an appellate authority having jurisdiction to deal with questions of civil liability.
He is therefore not an inferior criminal court and as such his orders are not subject to the revisional jurisdiction of the High Court under section 435 of the Code of Criminal Procedure.
The Madhya Bharat High Court had occasion to consider a similar question under section 153 of the Gwalior Municipal Act (1993 Smt.) in Municipal Committee, Lashkar vs Shahabuddin (3).
Under the said section an application can be made by the Municipality for recovering the cost of the work from the person in default.
It was held that the order passed in the said proceedings cannot be revised by the High Court under section 435 because the order is an administrative order and that there was no doubt that the Magistrate was not an inferior criminal court.
In Mithan Musammat vs The Municipal Board of Agra & Anr., (4) the Allahabad High Court has held that a Magistrate passing an order under section 247(1) of the United Provinces Municipalities Act, 1926 does not do so as an inferior criminal court within the meaning of section 435 of the Code of Criminal Procedure.
To the same effect is the decision of the Allahabad High Court in Madho Ram vs Rex (1).
We have referred to these decisions only to illustrate that in dealing with similar provisions under the (1) (3) A.I.R. (39) 1952 M.B. 48.
(2) (4) I.L.R. (1956) 2 All.
(5) I.L.R. (1950) All.
276 municipal law different High Courts seem to have taken the view that Magistrates entertaining recovery proceedings under the appropriate statutory provisions are not inferior criminal courts under the Code of Criminal Procedure.
Though we have referred to these decisions we wish to make it clear that we should not be taken to have expressed any opinion about the correctness or otherwise of the views taken by the different High Courts in regard to the questions raised before them.
The result is the appeal fails and is dismissed.
Appeal dismissed.
| The petitioner after a prolonged litigation and having ful filled all the conditions of the Delhi Rent Control Act, obtained decrees of ejectment against the tenants.
126 In the meantime the Slum Areas (Improvement and Clearance) Act, 956, came into force and the petitioner in accordance with section s.9 of the said Slum Areas Act applied to the competent authority for permission to execute the decree, which permission was refused inter alia on the grounds of hardship to the tenants and the human aspect of the case.
The appeals therefrom were also rejected.
The petitioner moved the Supreme Court for issue of a writ of certioraris to quash the orders on the ground that (1) section 19 of the Act was invalid and unconstitutional as violative of the petitioner 's rights guaranteed by articles 14 and 19(1)(f) of the Constitution, in as much as section 19 of the Slum Areas Act was a super imposition on the rights of the petitioner who had satisfied the requirements of the Rent Control Act before obtaining his decree, which amounted to unreasonable restrictions on the right to hold property guaranteed by the Constitution, and (2) that section 19(3) of the Slum Areas Act vested an unguided, unfettered, and uncontrolled power in an executive officer to withhold permission to execute a decree which the petitioner had obtained after satisfying the reasonable requirements of the law as enacted in the Rent Control Act, (3) The power conferred on the competent authority by section 19(3) of the Slum Areas Act was an excessive delegation of legislative power and therefore unconstitu tional.
Held, that section 19 of the Slum Areas (Improvement and Clea rance) Act, 1956, was not obnoxious to the equal protection of laws guaranteed by article 14 of the Constitution.
There was enough guidance to the competent authority in the use of his discretion under section 19(1) of the Act.
The restrictions imposed by section 19 of the Act could not be said to be unreasonable.
The guidance could be derived from the enactment and that it bears a reasonable and rational relationship to the object to be attained by the Act and in fact would fulfil the purpose which the law seeks to achieve, viz., the orderly elimination of slums, with interim protection for the slum dwellers until they were moved into better dwellings.
The order of the competent authority in the present case was not open to challenge as it was in line with the policy and purpose of the Act.
So long as the Legislature indicated in the operative provi sions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation was skeletal or that every detail of the application of law to a particular case, was not laid down in the enactment itself or the fact that a discretion was left to those entrusted with administering the law, afforded no basis either for the contention that there had been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested was uncanalised and unguided so as to amount to a carte blanche to discriminate.
If the power or discretion has been conferred 127 in a manner which was legal and constitutional the fact that the Parliament could possibly have made more detailed provi sion, could not be a ground for invalidating the law.
The freedom to 'hold property ' was not absolute but was subject, under article 19(5), to "reasonable restrictions" being A placed upon it "in the interests of the general public".
The criteria for determining the degree of restriction on the right to hold property which would be considered reasonable, were by no means fixed or static, but must obviously vary from age to age and should be related to the adjustments necessary to solve the problems which communities faced from time to time.
If law failed to take account of unusual situations of pressing urgency arising in the country and of the social urges generated by the patterns of thought, evolution and of social consciousness, it would have to be written down as having failed in the very purpose of its existence.
Where the legislature enacted laws, which in its wisdom, was considered necessary for the solution of human problems, the tests of "reasonableness", had to be viewed in the context of the issues which faced the legislature.
In the construction of such laws and particularly in judging of their validity the courts had to approach it from the point of view of furthering the social interest which it was the purpose of the legislation to promote, for the courts were not, in these matters, functioning as it were in vacuo, but as parts of a society which was trying, by enacted law, to solve its problems and achieve social concord and peaceful adjustment and thus furthering the moral and material progress of the community as a whole.
That the provisions of the special enactment, the Slums Areas (Improvement and Clearance) Act, 1956, will in respect of the buildings in areas declared slum areas operate in addition to the Delhi & Ajmer Rent Control Act, 1952.
Ramakyishna Dalmia vs justice Tendolkar; , , Harishankar Bagla vs State of Madhya Pyadesh, , M/s. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh, ; , State of West Bengal vs Anwar Ali Sarkar; , , Kathi Ratting Rawat vs State of Saurashtra; , , Kedar Nath Bajoria vs State of West Bengal, ; and Pannalal Binjraj vs Union of India, ; , discussed.
|
Civil Appeal No. 1101 of 1969.
From the Judgment and Order dated the 26th April 1968 of the Calcutta High Court in Wealth Tax Matter No. 421 of 1964.
section T. Desai, B. B. Ahuja, S P. Nayar and R. N. Sachthey, for the Appellant.
section K. Sen, A. K. Nag and D. P. Mukherjee for the Respondents.
The Judgment of the Court was delivered by SHINGHAL, J.
This appeal by certificate has come before us as the question of law arising for decision is said to be of great importance.
The facts giving rise to the appeal are quite simple and may be shortly stated.
One Bireswar Chatterjee, who was admittedly governed by the Dayabhaga School of Hindu law, was assessed to income tax as an individual.
He died intestate on January 7, 1957, leaving his widow, sons and daughters.
The Wealth tax officer rejected their plea that on the death of Bireswar Chatterjee they held definite and determined shares in his properties and were liable to separate assessment, and assessed them as a Hindu undivided family for the assessment year 1958 59.
On appeal, the Appellate Assistant Commissioner held that since the assesses was governed by the Dayabhaga School of Hindu law, the properties could not belong to the Hindu undivided family and were to be taxed "in the hands of the co sharers separately.
" The department took an appeal to the Income tax Appellate Tribunal, 'B ' Bench, Calcutta.
There was difference of opinion between the members of the Tribunal, and in accordance with the opinion of the majority of the members it was ordered that "notwithstanding that there was no unity of ownership amongst members governed by the Dayabhaga School of Hindu law in respect of the family property and each member thereof had definite shares in it, such property, until partitioned, was assessable to wealth tax in the hands of the Hindu undivided family.
" The Tribunal however referred the following question of law to the Calcutta High Court for decision "Whether on the facts and in circumstances of the case, the Tribunal was right in holding that properties possessed jointly by the members governed by the Dayabhaga School of Hindu law were assessable to wealth tax jointly in the status of a Hindu undivided family?" 1098 The High Court accepted the contention that the question assumed that the property was owned jointly by the members of a Hindu undivided family governed by the Dayabhaga School of Hindu law, and reframed it as follows, "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the property possessed by the heirs of a Hindu male governed by the Dayabhaga School of Hindu law were assessable to wealth tax jointly in the status of a Hindu undivided family?" It took the view that the matter was covered by its earlier decisions including Commissioner of Wealth tax.
West Bengal vs Gouri Shankar Bhar where it had been held that on the death intestate of a Dayabhaga male, his heirs do not inherit his estate as members of a Hindu undivided family, and remain as co owners with definite and ascertained shares in the properties left by the deceased unless they voluntarily decide to live as members of a joint family.
The High Court also took notice of the fact that a suit for partition had been filed and a preliminary decree had been obtained on July 4, 1959, and answered the reframed question in the negative.
As has been stated, the High Court has certified this to be fit case for appeal to this Court.
Mr. section T. Desai appearing for the Commissioner of Wealth tax has challenged the view taken by the High Court and has argued that under the Dayabhaga School of Hindu law the property left by the father is taken by the sons jointly by descent, as coparceners, as their joint family comes into existence by operation of law.
He has accordingly argued that the father 's property is liable to be taxed under section 3 of the Wealth tax Act, hereinafter referred to as the Act, as a unit until it is partitioned amongst its members by metes and bounds.
Reference has in this connection been made to certain commentaries and judgments and we shall refer to them as and when necessary.
Section 3 of the Act is the charging section and the correctness or otherwise of the view taken by the High Court depends on its meaning and content.
The section provides for the charge of wealth tax in these terms. "3.
Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as Wealth tax) in respect of the net wealth on the corresponding valuation date of every individual Hindu undivided family and company at the rate or rates specified in the Schedule.
" The liability to wealth tax therefore arises in respect of the "net wealth" of the assessee, which expression has been defined as follows in section 2(m), "(m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions 1099 of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owned by the assessee on the valuation date other than, . " The expression "belong" has been defined as follows in the Oxford English Dictionary. "To be the property or rightful possession of.
" So it is the property of a person, or that which is in his possession as of right, which is liable to wealth tax.
In other words, the liability to wealth tax arises out of ownership of the asset, and not otherwise.
Mere possession, or joint possession, unaccompanied by the right to, or ownership of property would therefore not bring the property within the definition of net wealth" for it would not then be an asset "belonging" to the assessee.
The question is whether the estate or property of Bireswar Chatterjee could be said to belong jointly to his heirs, after his death? It is not in controversy, and is in fact admitted, that the property in question belonged to Bireswar Chatterjee who was its sole owner in his life time and was assessed to income tax as an individual.
His family consisted of his widow, sons and daughters and was governed by the Dayabhaga School of Hindu law.
Bireswar Chatterjee 's property was therefore the heritage, or the wealth, which vested in his heirs on his death.
According to Jimuta Vahana, his wife or sons or daughters had no ownership in his property during his life time for "sons have not ownership while the father is alive and free from defect." (Hindu Law by Colebrooke, P.9) ownership of wealth is however vested in the heirs "by the death of their father" (page 54, supra) when they become coheirs and can claim partition.
It is on this basis that "Dayabhaga" (partition of heritage) has been expanded by Jimuta Vahana.
According to him, "since anyone parcener is proprietor of his own wealth, partition at the choice even of a single person is thence deducible." (page 16, supra).
The heritage does not therefore become the joint property of the heirs, or the joint family, on the demise of the last owner, but becomes the fractional property of the heirs in well defined shares.
This concept of fractional ownership has been stated as follows by Krishna Kamal Bhattacharya in his "Law relating to the Joint Hindu Family" (Tagore Law Lectures) with reference to the doctrine of negation of the son 's right by birth (page 168), "As a corollary of the doctrine set forth above, negativing the son 's right by birth, is another peculiar doctrine of the Bengal School, that of what is called the 'fractional ownership ' of the heirs, contrasted with the doctrine of 'aggregate ownership expounded by all other schools.
" That is why 'partition ' in Dayabhaga is defined as an act of "particularising ownership", and is not the act of fixing diverse ownerships on particular parts of an aggregate of properties as in Mitakshara.
The 1100 learned author has clarified the position in unmistakable terms as follows (pages 172 73), "From what has been said above, it is evident that there is no unity of ownership in Bengal joint family, although there may be something like a unity of possession." (Emphasis added) This is why Mitashara is designated as the School of "aggregate ownership", while Dayabhaga is known as the School of "fractional ownership.
" As has been stated in Gopalchandra Sarkar Sastri 's "Hindu law" (eighth edition page 465), while the joint family system prevails in Bengal, "there cannot be a real joint family consisting of father and sons during the father 's life time, inasmuch as joint property which is the essence of the conception of joint family, would be wanting to make them joint.
" This is why, according to the Bengal School, the sons become tenants in common and not joint tenants in respect of the estate inherited by them from their father.
The position of joint family under the Dayabhaga law has been stated as follows in Mayne 's Treatise on "Hindu Law and Usage" (eleventh edition, page 364), "It follows therefore that under the Dayabhaga law, a father and his sons do not form a joint family in the technical sense having coparcenary property.
But as soon as it has made a descent, the brothers or other co heirs hold their shares in quasi severalty.
Each coparcener has full powers of disposal over his share which is defined and not fluctuating with births and deaths as in the case of a Mitakshara family and his interest, while still undivided, will on his death pass on to his own heirs male or female or even to his legatees.
" That was stated to be the law in Sreemutty Soorjeemoney Dossee vs Denobundoo Mullick The position has been dealt with in Mulla 's "Principles of Hindu Law" (fourteenth edition, at page 348), as follows, "The essence of a coparcenary under the Mitakshara law is unity of ownership.
On the other hand, the essence of a coparcenary under the Dayabhaga law is unity of possession.
It is not unity of ownership at all.
The ownership of the coparcenary property is not in the whole body of coparceners.
Every coparcener takes a defined share in the property, and he is the owner of that share.
That share is defined immediately the inheritance falls in.
It does not fluctuate with births and deaths in the family.
Even before partition any coparcener can say that he is entitled to a particular share, one third or one fourth.
Thus if A dies leaving three sons, B, C, and D, each one will be the owner of his on third share.
The sons are coparceners in this sense that 1101 possession of the property inherited from A is joint.
It is the unity of possession that makes them coparceners.
So long as there is unity of possession, no coparcener can say that a particular third of the property belongs to him; that he can say only after a partition.
Partition then, according to the Dayabhaga law, consists in splitting up joint possession and assigning specific portions of the property to the several coparceners.
According to the Mitashara law, it consists in splitting up joint ownership and in defining the share of each coparcener.
" In fact we find that a case somewhat similar to the one before us arose when one Prafulla Chandra Bhar, a Hindu governed by the Dayabhaga School, died intestate.
His mother, widow, three sons and one daughter survived him.
Since the death took place before the came into operation, he was succeeded by his widow and three sons, each inheriting one fourth share in the estate.
Gouri Shankar Bhar, one of the sons, took out letters of administration and filed, a wealth tax return in his capacity as ad ministrator descrth the status of the assessee as a Hindu undivided family.
The Wealth Officer also treated the status as such, and made the assessment.
Gouri Shankar however filed an appeal and contended that the family being governed by the Dayabhaga School,the shares of the coparceners in the property of the deceased were definite and ascertained and the assessment should not have been made in their status as a Hindu undivided family and each member should have been assessed separately upon the value of his share in the inherited property.
The Appellate Assistant Commissioner overruled the contention and took the view that even though the shares of the coparcencrs were definite and ascertained, the income from the prperty of the family did not belong to the several members in specified shares but continued to belong to the Hindu undivided family as a whole.
On further appeal, the Tribunal held that as the coparcener under the Dayabhaga law had a definite share in the property left by the deceased and was legally the owner thereof, he had a defined share and that since the wealth tax was levied on the basis of ownership, it was proper that the assessment should have been made on the individual coparceners on their respective shares and assessment of the total wealth in the hands of the undivided family would be illegal.
The matter was referred to the High Court at the instance of the Commissioner of Wealth tax.
The High Court of Calcutta in Commissioner of Wealth tax case (supra) made a reference, inter alia, to the decision in Biswa Ranjan Sarvadhikari vs Income tax officer, F. Ward District, (2) Calcutta and upheld the view that where property is owned by two or more persons governed by the Dayabhaga School and their shares are.definite and ascertainable, then, although they are in Joint possession, the tax will be assessed on the basis of the share of the income in the hands of the assessee and not as of a Hindu undivided family.
It was held that the position was not different under the Wealth tax Act.
The matter was brought to this Court on appeal and it was conceded by Solicitor General appearing for the Commissioner of Wealth tax that as the property was the individual property of the 1102 deceased, it devolved on his heirs in severalty.
It was held that as each of them took a definite and separate share in the property, each of them was liable, in law, to pay wealth tax as an individual.
While upholding the decision of the High Court it was however observed by this Court that it was not necessary to decide, in that case, whether a Dayabhaga family could be considered as a Hindu undivided family within the meaning of section 3 of the Act.
That decision is Commissioner of Wealth tax, West Penal vs Gauri Shankar Bhar.
In the case before us, it is not in dispute that the property in question was the individual property of Bireswar Chatterjee and that it devolved on his heirs according to the provisions of the .
It will be recalled that a suit for partition was filed on June 21, 1957 and a preliminary decree was passed on July 4, 1959.
For reasons already stated, the coparcenary had unity of possession but not unity of ownership on the property.
Eac coparcener therefore took a defined share in the property and was the owner of his share.
Each such defined shar thus "belonged" the coparcener.
It was his "net wealth" within the meaning of section 2(m) of the Act and was liable to wealth tax as such under section 3.
The High Court was therefore right in answering the reframed question in the negative, and as we find no force in the argument of Mr. Desai, the appeal fails and is dismissed with costs.
| Rejecting the respondents ' plea that as persons governed by the Dayabhaga School of Hindu Law they had held definite and determined shares in the properties inherited by them from their father and were liable to separate assessment of wealth tax, the Wealth Tax Officer assessed them as a Hindu Undivided Family.
On appeal the Appellate Assistant Commissioner held that the properties should be taxed in the hands of the co sharers separately.
On further appeal, the Appellate Tribunal held that notwithstanding that there was no unity of ownership amongst members governed by the Dayabhaga School of Hindu Law in respect of family property and each member thereof had no definite share in it, such property, until partitioned, was assessable to wealth tax in the hands of the Hindu Undivided Family.
On reference, the High Court held in favour of the assesses.
Dismissing the appeal to this Court, ^ HELD: Dayabhaga means partition of heritage.
A Dayabhaga male 's wife or sons or daughters have no ownership in his property during his lifetime.
Ownership of wealth is vested in the heirs by the death of their father, when they become co heirs and can claim partition.
The heritage of a Dayabhaga male does not become the joint property of the heirs or of the joint family on the demise of the last owner but becomes the fractional property of the heirs in well defined shares.
That is why partition in Dayabhaga is defined as an act of particularising ownership.
In Dayabhaga, the sons become tenants in common and not joint tenants in respect of the estate inherited by them from their father.
While Mitakshara is known as the School of "aggregate ownership", Dayabhaga is known as the school of "fractional ownership".
The essence of a coparcenary under the Mitakshara Law is unity of ownership; under the Dayabhaga it is unity of possession, not unity of ownership at all.
Under the Dayabhaga school every coparcener takes a definite share in the property and he is the owner of that share which is defined immediately the inheritance falls in.[1099D G: 1100B H] Sreemutty Soorjeemoney Dossee vs Denobundoo Mullick, 6 M.I.A. 526 at p. 553.
Hindu Law by Colebrooke p. 9. 2.
Law relating to the Joint Hindu Family (Tagore Law Lecrures) by Krishna Kamal Bhattacharya p. 168 and 3.
Principles of Hindu Law by Mulla (14th Edition) p. 348.
Hindu Law & Usage, by Mayne,11th Edition 364, approved.
(i) Under section 3, the liability of wealth tax arises in respect of the net wealth of the assesses.
The term "net wealth" means all the assets belonging to the assesses, on the valuation date.
The expression "belong" according to the Oxford Dictionary means "to be the property or rightful possession of".
[1098G H] (ii) The liability to wealth tax arises out of ownership of the asset and not otherwise.
Mere possession or joint possession unaccompanied by the right to or ownership of property would, therefore, not bring the property within the 1097 definition of "net wealth", for it would not then be the asset belonging to the assesses.
[1099C] In the instant case, the property in question was the individual property of the father of the respondents and it devolved on the heirs according to the provisions of the .
The coparcenary had unity of possession but not unity of ownership on the property.
Each coparcener took a defined share in the property and was the owner of his share.
Each such defined share thus belonged to the coparcener.
It was his net wealth within the meaning of section 2(m) of the Wealth Tax Act and was liable to wealth tax, as such, under section 3.
[1102C D] Commissioner of Wealth tax West Bengal vs Gouri Shankar Bhar, explained.
|
Appeal No. 271 of 1956.
Appeal from the judgment and order dated August 2, 1955, of the former Nagpur High Court in Misc.
Petition No. 249 of 1955.
M. Adhikari, Advocate General for the State of Madhya Pradesh, B. K. B. Naidu and I. N. Shroff, for the appellants.
R. Patnaik, for the respondent.
October 3.
This appeal with a certificate issued by the Nagpur High Court under article 132(1) of the Constitution raises a question about the validity of the Central Provinces and Berar Goondas 972 Act X of 1946 as amended by Madhya Pradesh Act XLIX of 1950.
It appears that against the respondent Baldeo Prasad the State of Madhya Pradesh, appellant 1, passed an order on June 16, 1955, under section 4 A of the Act.
Subsequently the District Magistrate, Chhindwara, appellant 2, passed another order dated June 22, 1955, communicating to the respondent the first externment order passed against him.
The respondent then filed 'a writ petition in the High Court (No. 249 of 1955) under article 226 challenging the validity of the said orders, inter alia, on the ground that the Act under which the said orders were passed was itself ultra vires.
The appellants disputed the respondent 's contention about the vires of the Act.
The High Court, however, has upheld the respondent 's plea and has held that sections 4 and 4 A of the Act are invalid, and since the two sections contain the main operative provisions of the Act, according to the High Court, the whole Act became invalid.
It is the correctness of this conclusion which is challenged before us by the appellants.
It would be convenient at this stage to refer briefly to the scheme of the Act and its relevant provisions.
The Act was passed in 1946 and came into force on September 7, 1946.
It was subsequently amended and the amended Act came into force on November 24, 1950.
As the preamble shows the Act was passed because it was thought expedient to provide for the control of goondas and for their removal in certain circumstances from one place to another.
Section 2 defines a goonda as meaning a hooligan, rough or a vagabond and as including a, person who is dangerous to public peace or tranquillity.
It would thus be seen that the definition of the word " goonda " is an inclusive definition, and it includes even persons who may not be hooligans, roughs or vagabonds if they are otherwise dangerous to public peace or tranquillity.
Section 3(1) empowers the State Government to issue a proclamation that disturbed conditions exist or are likely to arise in the areas specified in such proclama tions if the State Government is satisfied that public peace or tranquillity in any area is disturbed or is 973 likely to be disturbed.
The area in respect of which a proclamation is thus issued is described in the Act as the proclaimed area.
Section 3(2) limits the operation of the proclamation to three months from its date and provides that it may be renewed by notification from time to time for a period of three months at a time.
The first step to be taken in enforcing the operative provisions of the Act thus is that a proclamation has to be issued specifying the proclaimed areas, and the limitation on the power of the State Government to issue such a proclamation is that the proclamation can be issued only after it is satisfied as required by section 3(1), and its life will not be longer than three months at a stretch.
Section 4 reads thus: " 4(1).
During the period the proclamation of emergency issued or renewed under Section 3 is in operation, the District Magistrate having jurisdiction in or in any part of the proclaimed area, if satisfied that there are reasonable grounds for believing that the presence, movements or acts of any goonda in the proclaimed area is prejudicial to the interests of the general public or that a reasonable suspicion exists that any goonda is committing or is likely to commit acts calculated to disturb the public peace or tranquillity may make an order (i) directing such goonda to notify his residence and any change of or absence from such residence during the term specified and to report his movements in such manner and to such authority as may be specified ; (ii) directing that he shall not remain in the proclaimed area within his jurisdiction or any specified part thereof and shall not enter such area; and (iii) directing him so to conduct himself during the period specified as the District Magistrate shall deem necessary in the interests of public order: Provided that no order under clause (ii) which directs the exclusion of any goonda from a place in which he ordinarily resides shall be made except with the previous approval of the State Government: Provided further that no such order shall be 124 974 made directing exclusion of any goonda from the district in which he ordinarily resides.
(2) No order under sub section (1) shall be made by a District Magistrate in respect of a goonda without giving to such goonda a copy of the grounds on which the order is proposed to be made and without giving an opportunity to be heard : Provided that where the District Magistrate is of opinion that it is necessary to make an order without any delay he may for reasons to be recorded in writing, make the order and shall, as soon as may be within ten days from the date on which the order is served on the goonda concerned, give such goonda a copy of the grounds and an opportunity to be heard.
(3) After hearing the goonda, the District Magistrate may cancel or modify the order as he thinks fit.
" This section confers on the District Magistrate jurisdiction to make an order against a goonda if there are reasonable grounds for believing that his presence, movements or acts in any proclaimed area is likely to be prejudicial to the interests of the general public, or it there is a reasonable suspicion that a goonda is committing or is likely to commit prejudicial acts.
Sub clauses (i), (ii) and (iii) indicate the nature of the directions and the extent of the restrictions which can be placed upon a goonda by an order passed under section 4.
Sub section (2) requires the District Magistrate to give the goonda a copy of the grounds on which an order is proposed to be made, and to give him an opportunity to be heard why such an order should not be passed against him.
The proviso to the section deals with an emergency which needs immediate action.
After hearing the goonda the District Magistrate may under sub section
(3) either cancel or modify the order as he thinks fit.
Section 4 A reads thus: " (1) Where the District Magistrate considers that with a view to maintain the peace and tranquillity of the proclaimed area in his district it is necessary to direct a goonda to remove himself outside the district in which the proclaimed area is comprised or 975 to require him to reside or remain in any place or within any area outside such district, the District Magistrate may, after giving the goonda an opportunity as required by sub section (2) of Section 4 forward to the State Government a report together with connected papers with a recommendation in that behalf (2) On receipt of such report the State Government may, if it is satisfied that the recommendation made by the District Magistrate is in the interests of the general public, make an order directing such goonda (a) that except in so far as he may be permitted by the provisions of the order, or by such authority or person as may be specified therein, he shall not remain in any such area or place in Madhya Pradesh as may be specified in the order; (b) to reside or remain in such place or within such area in Madhya Pradesh as may be specified in the order and if he is not already there to proceed to that place or area within such time as may by specified in the order : Provided that no order shall be made directing the exclusion or removal from the State of any person ordinarily resident in the State." Thus an order more stringent in character can be passed under this section.
The safeguard provided by the section, however, is that the District Magistrate is required to give the goonda an opportunity to be heard and further required to make a report to the State Government and forward to the State Government papers connected with the recommendation which the District Magistrate makes.
Sub section (2) of section 4 A then requires the State Government to consider the matter and empowers it to make an order either under cl.
(a) or cl.
(b) of the said sub section.
The proviso to this section lays down that Do order shall be made by which the goonda would be excluded or removed from the State where he ordinarily resides.
The last section to which reference may be made is section 6.
It gives a goonda aggrieved by an order made against him, inter alia, under section 4 or section 4 A to make a representation to the State Government within the 976 time prescribed, and it requires the State Government to consider the representation and make such orders thereon as it may deem fit.
That in brief is the scheme of the Act.
At this stage it would be material to state the relevant facts leading to the writ petition filed by the respondent.
Appellant 1 issued a proclamation under section 3 on August 10, 1954, specifying the limits of Police Stations Parasia and Jamai and Chhindwara Town as proclaimed area.
This proclamation was renewed in November, 1954 and February, 1955.
Thereafter on May 9, 1955, appellant 1 issued afresh proclamation specifying the whole of the Chhindwara District as the proclaimed area.
This proclamation was to remain in force till August 8, 1955.
Whilst the second proclamation was in force the second appellant received reports from the District Superintendent of Police, Chhindwara, against the respondent, and he ordered the issue of a notice to him to show cause why action should not be taken against him under section 4; this notice required the respondent to appear before the second appellant on April 29, 1955.
The respondent, though served, did not appear before the second appellant.
Thereupon the second appellant sent a report to appellant 1 on April 30, 1955, and submitted the case against him with a draft order for the approval of the said appellant under the first pro viso to section 4(1).
In the meantime the third notification was issued by appellant 1.
The second appellant then issued a fresh notice against the respondent under section 4 on May 24, 1955.
The respondent appeared in person on May 30, 1955, and was given time to file his written statement which he did on June 4, 1955.
The case was then fixed for hearing on June 22, 1955.
Meanwhile the State Government passed an order on June 16, 1955, directing that the respondent shall, except in so far as he may be permitted by the second appellant from time to time, not remain in any place in Chhindwara District.
This order was to remain in force until August 8, 1955.
On June 22, 1955, the second appellant communicated the said order to the respondent and directed him to leave the District 977 before 10 a. m. on June 23, 1955.
The respondent appealed to appellant 1 to cancel the order passed against him.
The first appellant treated the appeal as a representation made by the respondent under section 6 and rejected it on July 9, 1955.
A day before this order was passed the respondent filed his writ petition in the High Court from which the present appeal, arises.
The respondent challenged the validity of the Act on the ground that it invades his fundamental rights under article 19(1)(d) and (e) and as such it becomes invalid having regard to the provisions of article 13 of the Constitution.
This plea has been upheld by the High Court.
On behalf of the appellants the learned Advocate General of Madhya Pradesh contends that the High Court was in error in coming to the conclusion that the restrictions imposed by the Act did not attract the provisions of article 19(5).
The legislative competence of the State Legislature to pass the Act cannot be disputed.
The Act relates to public order which was Entry I in List II of the Seventh Schedule to the Constitution Act of 1935.
There can also be no doubt that the State Legislature would be competent to pass an act protecting the interests of the general public against the commission of prejudicial acts which disturb public peace and order.
Section 3 of the Act indicates that it is only where the public peace or tranquillity is threatened in any 'given area of the State that the State Government is authorised to issue a proclamation, and as we have already noticed, it is in respect of such proclaimed areas and for the limited duration prescribed by section 3(2) that orders can be passed against goondas whose prejudicial activities add to the disturbance in the proclaimed areas.
Therefore, broadly stated the purpose of the Act is to safeguard individual rights and protect innocent and peaceful citizens against the prejudicial activities of goondas, and in that sense the Act may prima facie claim the benefit of article 19(5).
This position is not seriously disputed.
The argument against the validity of the Act is, however, based on one serious infirmity in section 4 and 978 s.4 A which contain the operative provisions of the Act.
This infirmity is common to both the sections, and so what we will say about section 4 will apply with equal force to section 4 A.
It is clear that section 4 contemplates preventive action being taken provided two conditions are satisfied ; first, that the presence, movements or acts of any person sought to be proceeded against should appear to the District Magis trate to be prejudicial to the interests of the general public, or that a reasonable suspicion should exist that such a person is committing or is likely to commit acts calculated to disturb public peace or tranquillity ; and second that the person concerned must be a goonda.
It would thus be clear that it is only where prejudicial acts can be attributed to a goonda that section 4 can come into operation.
In other words, the satisfaction of the first condition alone would not be enough ; both the conditions must be satisfied before action can be taken against any person.
That clearly means that the primary condition precedent for taking action under section 4 is that the person against whom action is proposed to be taken is a goonda; and it is precisely in regard to this condition that the section suffers from a serious infirmity.
The section does not provide that the District Magistrate must first come to a decision that the person against whom he proposes to take action is a goonda, and gives him no guidance or assistance in the said matter.
It is true that under section 4 a goonda is entitled to have an opportunity to be heard after he is given a copy of the grounds on which the order is proposed to be made against him; but there is no doubt that all that the goonda is entitled to show in response to the notice is to challenge the correctness of the grounds alleged against him.
The enquiry does not contemplate an investigation into the question as to whether a person is a goonda or not.
The position, therefore, is that the District Magistrate can proceed against a person without being required to come to a formal decision as to whether the said person is a goonda or not; and in any event no opportunity is intended to be given to the person to show 979 that he is not a goonda.
The failure of the section to make a provision in that behalf undoubtedly constitutes a serious infirmity in its scheme.
Incidentally it would also be relevant to point out that the definition of the word " goonda " affords no assistance in deciding which citizen can be put under that category.
It is an inclusive definition and it does not indicate which tests have to be applied in deciding whether a person falls in the first part of the definition.
Recourse to the dictionary meaning of the word would hardly be of any assistance in this matter.
After all it must be borne in mind that the Act authorises the District Magistrate to deprive a citizen of his fundamental right under article 19(1)(d) and (e), and though the object of the Act and its purpose would undoubtedly attract the provisions of article 19(5) care must always be taken in passing such acts that they provide sufficient safeguards against casual, capri cious or even malicious exercise of the powers conferred by them.
It is well known that the relevant provisions of the Act are initially put in motion against a person at a lower level than the District Magistrate, and so it is always necessary that sufficient safeguards should be provided by the Act to protect the fundamental rights of innocent citizens and to save them from unnecessary harassment.
That is why we think the definition of the word " goonda " should have given necessary assistance to the District Magistrate in deciding whether a particular citizen falls under the category of goonda or not; that is another infirmity in the Act.
As we have already pointed out section 4 A suffers from the same infirmities as section 4.
Having regard to the two infirmities in sections 4, 4 A respectively we do not think it would be possible to accede to the argument of the learned Advocate General that the operative portion of the Act can fall under article 19(5) of the Constitution.
The person against whom action can be taken under the Act is not entitled to know the source of the information received by the District Magistrate; be is only told about his prejudicial activities on which the satisfaction of the District Magistrate is based that action 980 should be taken against him under section 4 or section 4 A.
In such a case it is absolutely essential that the Act must clearly indicate by a proper definition or otherwise when and under what circumstances a person can be called a goonda, and it must impose an obligation on the District Magistrate to apply his mind to the question as to whether the person against whom complaints are received is such a goonda or not.
It has been urged before us that such an obligation is implicit in sections 4 and 4 A.
We are, however, not impressed by this argument.
Where a statute empowers the specified authorities to take preventive action against the citizens it is essential that it should expressly make it a part of the duty of the said authorities to satisfy themselves about the existence of what the statute regards as conditions precedent to the exercise of the said authority.
If the statute is silent in respect of one of such conditions precedent it undoubtedly constitutes a serious infirmity which would inevitably take it out of the provisions of article 19(5).
The result of this infirmity is that it has left to the unguided and unfettered discretion of the authority concerned to treat any citizen as a goonda.
In other words, the restrictions which it allows to be imposed on the exercise of the fundamental right of a citizen guaranteed by article 19(1)(d) and (e) must in the circumstances be held to be unreasonable.
That is the view taken by the High Court and we see no reason to differ from it.
In this connection we may refer to the corresponding Bombay statute the material provisions of which have been examined and upheld by this Court.
Section 27 of the City of Bombay Police Act, 1902 (4 of 1902), which provides for the dispersal of gangs and bodies of persons has been upheld by this Court in Gurbachan Singh vs The State of Bombay (1) whereas section 56 and section 57 of the subsequent Bombay Police Act, 1951 (22 of 1951), have been confirmed respectively in Bhagubhai Dullabhabhai Bhandari vs The District Magistrate, Thana (2) and Hari Khemu Gawali vs The Deputy Commissioner of Police, Bombay (3).
It would be (1) ; (2) ; (3) ; 981 noticed that the relevant provisions in the latter Act the validity of which has been upheld by this Court indicate how the mischief apprehended from the activities of undesirable characters can be effectively checked by making clear and specific provisions in that behalf, and how even in meeting the challenge to public peace and order sufficient safeguards can be included in the statute for the protection of innocent ' citizens.
It is not clear whether the opportunity to be heard which is provided for by section 4(2) would include an opportunity to the person concerned to lead evidence.
Such an opportunity has, however, been provided by section 59(1) of the Bombay Act of 1951.
As we have already mentioned there can be no doubt that the purpose and object of the Act are above reproach and that it is the duty of the State Legislature to ensure that public peace and tranquillity is not disturbed by the prejudicial activities of criminals and undesirable characters in society.
That, however, cannot help the appellants ' case because, as we have indicated, the infirmities in the operative sections of the Act are so serious that it would be impossible to hold that the Act is saved under article 19(5) of the Constitution.
There is no doubt that if the operative sections are invalid the whole Act must fall.
In the result the order passed by the High Court is confirmed and the appeal is dismissed with costs.
Appeal dismissed.
| By an order passed under section 4 A of the Central Provinces and Berar Goondas Act, 1946 (X of 1946), as amended by the Madhya Pradesh Act XLIX of 950, the State of Madhya Pradesh directed the respondent to leave the district of Chhindwara, which had been specified as a proclaimed area under the Act, and the District Magistrate by another order communicated the same to the respondent.
The respondent challenged the said orders under article 226 of the Constitution on the ground that the Act violated his fundamental rights under article i9(i)(d) and (e) of the Constitution and was, therefore, invalidated by article 13 Of the Constitution.
The High Court held that sections 4 and 4 A of the impugned Act were invalid and since they were the 971 main operative provisions of the Act, the whole Act was in valid.
Held, that when a statute authorises preventive action against the citizens, it is essential that it must expressly provide that the specified authorities should satisfy themselves that the conditions precedent laid down by the statute existed before they acted thereunder.
If the statute fails to do so in respect of any such condition precedent, that is an infirmity sufficient to take the statute out of article 19(5) Of the Constitution.
Although there can be no doubt that sections 4 and 4 A of the impugned Act clearly contemplated as the primary condition precedent to any action thereunder that the person sought to be proceeded against must be a goonda, they fail to provide that the District Magistrate should first find that the person sought to be proceeded against was a goonda or provide any guidance whatsoever in that regard or afford any opportunity to the person proceeded against to show that he was not a goonda.
The definition of a goonda laid down by the Act, which is of an inclusive character, indicated no tests for deciding whether the person fell within the first part of the definition.
Gurbachan Singh vs The State of Bombay, ; , Bhagubhai Dullabhabhai Bhandari vs The District ' Magistrate, Thana, ; and Hari Khenu Gawali vs The Deputy Commissioner of Police, Bombay, ; , referred to.
Although the object of the impugned Act was beyond reproach and might well attract article 19(5) of the Constitution, since the Act itself failed to provide sufficient safeguards for the protection of the fundamental rights and the operative sections were thus rendered invalid, the entire Act must fail.
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Civil Appeal No. 1086 of 1973.
Appeal by Special Leave from the Judgment and Order dated 8 12 1971 of the Kerala High Court in T.I.T. Reference No. 91/69.
section C. Manchanda and Miss A. Subhashini for the Appellants.
K. T. Harindranath and T. T. Kunhikannan for the Respondent.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal arises out of proceedings initiated by the Revenue authorities for levying penalty on the assessee.
The assessee is a lady and during the assessment year 1964 65 for which the relevant accounting year was the calender year ended 31st December, 1963, the assessee was a partner in two partnership firms, M/s. Malabar Tile Works and M/s. Malabar Plywood Works and alongwith her there were other partners including her husband and minor daughter.
The assessee filed a return of income for the assessment year 1964 65 showing Rs. 4754 as income from property and Rs. 4748 as income from other sources.
The assessee stated in the return under the column "Profits and Gains of Business and Profession" against item (b) which required share in the profits of a registered firm to be shown "Please ascertain from the firms ' files the Malabar Tile Works and Malabar Plywood Works.
" The assessee, however, did not show in the return the amounts representing the shares of her husband and minor daughter in the firms of M/s. Malabar Tile Works and M/s. Malabar Plywood Works though they were clearly includible in computing the total income of the assessee under section 64 sub section (1) clauses (i) and (iii) of the Income Tax Act, 1961.
The Income Tax Officer while making the assessment included the amounts representing the shares of the assessee 's husband and minor daughter in the profits of these two firms in the assessment of the assessee and taxed the assessee on a total income of Rs. 59,506 after including these amounts.
Since the assessee had not shown these amounts as forming part of her total income in the return submitted by her, though they were clearly includible in her total income under section 64, sub section (1) clauses (i) and (iii), the Income Tax Officer was of the view that the assessee had con 784 cealed the particulars of her income and rendered herself liable to penalty under section 271 sub section (1) clause (c), and since the minimum penalty leviable on the assessee was Rs. 1000, he referred the case to the Assistant Appellate Commissioner who issued notice under section 274 and after hearing the assessee, imposed a penalty of Rs. 1000.
The assessee appealed to the Tribunal against the order imposing penalty and one of the arguments urged on behalf of the assessee in support of the appeal was that there was no obligation of the assessee to show in her return the amounts representing the shares of her husband and minor daughter in the two firms and there was accordingly no concealment by her of the particulars of her income so as to attract the penalty under section 271 sub section (1) clause (c).
The Tribunal accepted this argument of the assessee and held that section 271 sub section (1) clause (c) could be invoked only if there was concealment of the "particulars of his income by the assessee" and the words "his income" referred only to be the income of the assessee himself and not to the income of any other person which might be liable to be included in the income of the assessee by reason of section 64 sub section (1) clauses (i) and (iii).
The Tribunal accordingly held that the omission or failure of the assessee to disclose in her return the amounts representing the shares of her husband and minor daughter in the two firms as forming part of her income could not be visited with penalty under section 271 sub section (1) clause (c) and in this view, the Tribunal allowed the appeal and set aside the order imposing penalty.
This led to the filing of an application for a reference by the Revenue and on the application, the Tribunal referred the following question of law for the opinion of the High Court: "Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in cancelling the penalty levied under section 271(1)(c)?" The High Court took the view that the words used in section 271 sub section (1) clause (c) were "his income" and the amounts representing the shares of the assessee 's husband and minor daughter in the two firms could not be said to be the income of the assessee, though in computing her total income these amounts were liable to be included by reason of section 64 sub section (1) clauses (i) and (iii) and therefore, the assessee could not be said to have concealed her income when she did not disclose these amounts as forming part of her income in the return submitted by her.
The High Court accordingly answered the question referred to it in favour of the assessee and against the Revenue.
The Revenue thereupon preferred the present appeal with special leave obtained from this Court.
785 There is a decision of this court which is directly in point and it concludes the determination of the question arising in this appeal against the Revenue but before we refer to that decision, we might first examine the question on principle as a matter of pure interpretative exercise.
Section 271 sub section (1) clause (c) provides for imposition of penalty on an assessee if it is found inter alia that the assessee has concealed the particulars of "his income.
" The question is what is the scope and content of the words "his income" occurring in this penal provision.
Do they refer only to the income of the assessee himself or do they also take in the income of others which is liable to be included in the computation of the total income of the assessee by reason of the relevant provisions of the Act, such as section 64 sub section (1) clauses (i) and (iii)? The answer to this question obviously depends upon as to what is "his income" which the assessee is liable to disclose for the purpose of assessment for concealment can only be of that which one is bound to disclose and yet fails to do so.
Section 139 provides for filing of a return of income by an assessee and sub section (1) of this section lays down that every person whose total income during the previous year exceeds the maximum amount which is not chargeable to income tax, shall furnish a return of his income in the prescribed form and verified in the prescribed manner, and setting forth such other particulars as may be prescribed.
The return of income is required to be filed in order to enable the Revenue Authorities to make a proper assessment of tax on the assessee.
It must therefore follow a fortiorari that the assessee must disclose in the return every item of income which is liable to be taxed in his hands as part of his total income.
The charge of income tax is levied by section 4 on the total income of the assessee, and 'total income ' is defined in section 2 sub section (45) to mean "the total amount of income referred to in section 5 computed in the manner laid down" in the Act.
It is no doubt true that the definition of 'total income ' in Section 2 sub section (45) refers to section 5 and this latter provision lays down that all the income profits and gains accrued or arisen to the assessee or received by or on behalf of the assessee shall be liable to be included in his total income but this provision is subject to the other provisions of the Act and therefore if the income of any other person is declared by any provision of the Act to be includible in computing the total income of the assessee, such income would form part of the total income exigible to tax under section 4 of the Act.
Now, section 64 subsection (1) is one such provision which provides for inclusion of the income of certain other persons in computing the total income of an assessee.
Clauses (i) and (iii) of this sub section provide that in computing the total income of an assessee there shall be included all 786 such income as arises directly or indirectly to the spouse of such assessee from the partnership of the spouse in a firm carrying on a business in which such individual is a partner as also to a minor child of such assessee from the admission of the minor to the benefits of the partnership firm.
It is clear from this provision that though the share of the spouse or minor child in the profits of a partnership firm in which the assessee is a partner is not the income of the assessee but is the income of such spouse or minor child it is liable to be included in computing the total income of the assessee and it would be assessable to tax in the hands of the assessee.
The total income of the assessee chargeable to tax would include the amounts representing the shares of the spouse and minor child in the profits of the partnership firm.
If this be the correct legal position, there can be no doubt that the assessee must disclose in the return submitted by him, all amounts representing the shares of the spouse and minor child in the profits of the partnership firm in which he is a partner, since they form part of his total income chargeable to tax.
The words "his income" in section 139 sub section (1) must include every item of income which goes to make up his total income assessable under the Act.
The amounts representing the shares of the spouse and minor child in the profits of the partnership firm would be part of "his income" for the purpose of assessment to tax and would have to be shown in the return of income filed by him.
The assessee then contended that the return of income which was required to be filed by her under section 139 sub section (1) was a return in the prescribed form and the form of the return prescribed by rule 12 of the Income Tax Rules, 1962 did not contain any column for showing the income of the spouse and minor child which was liable to be included in the total income of the assessee under section 64 sub section (1) clauses (i) and (iii) and there was therefore no obligation on the assessee to disclose this income in the return filed by her.
This contention is also, in our opinion, fallacious and deserves to be rejected.
It is true that the form of the return prescribed by rule 12 which was in force during the relevant assessment year did not contain any separate column for showing the income of the spouse and minor child liable to be included in the total income of the assessee, but it did contain a Note stating that if the income of any other person is includible in the total income of the assessee under the provisions inter alia of section 64, such income should also bestow in the return under the appropriate head.
This Note clearly required the assessee to show in the return under the appropriate head of income, namely, "Profits and Gains of Business of Profession" the amounts representing the shares of the husband and minor 787 daughter of the assessee in the profits of the two partnership firms.
But even so, the assessee failed to disclose these amounts in the return submitted by her and there was therefore plainly and manifestly a breach of the obligation imposed by section 139 sub section (1) requiring the assessee to furnish a return of her income in the prescribed form.
It is difficult to see how the Note in the prescribed form of the return could be ignored by the assessee and she could contend that despite the Note, she was not liable to show in her return the amounts representing the shares of her husband and minor daughter in the two partnership firms.
The contention of the assessee, if accepted, would render the Note meaningless and futile and turn it into dead letter and that would be contrary to all recognised canons of construction.
There can be no doubt that the assessee was bound to show in her return the amounts representing the shares of her husband and minor daughter in the two partnership firms and in failing to do so, she was guilty of concealment of this item of income which plainly attracted the applicability of section 271 sub section (1) clause (c).
It is obvious that on this view the order imposing penalty on the assessee would have to be sustained but there is a decision of this Court in V.D.M.RM.M.RM.
Muthiah Chettiar vs Commissioner of Income Tax Madras which is binding upon us and where we find that a different view has been taken by a Bench of three Judges of this Court.
It was held in this case that even if there were any printed instructions in the form of the return requiring the assessee to disclose the income received by his wife and minor child from a firm of which the assessee was a partner, there was, in the absence in the return of any head under which the income of the wife or minor child could be shown, no obligation on the assessee to disclose this item of income, the assessee could not be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assessment within the meaning of section 34(1) (a) of the Indian Income Tax Act, 1922.
With the greatest respect to the learned Judges who decided this case, we do not think, for reasons already discussed, that this decision lays down the correct law on the subject, and had it not been for the fact that since 1st April 1972 the form of the return prescribed by rule 12 has been amended and since then, there is a separate column providing the "income arising to spouse/minor child or any other person as referred to in Chapter V of the Act" should be shown separately under that column and consequently there is no longer any scope for arguing that the assessee is not bound 788 to disclose such income in the return to be furnished by him, we would have referred the present case to a larger bench.
But we do not propose to do so since the question has now become academic in view of the amendment in the form of the return carried out with effect from 1st April 1972.
We would therefore follow this decision in Muthiah Chettiar 's case, which being a decision of a bench of three Judges of this Court is binding upon us, and following that decision, we hold that the assessee could not be said to have concealed her income by not disclosing in the return filed by her the amounts representing the shares of her husband and minor daughter in the two partnership firms.
We accordingly dismiss the appeal, but in the peculiar circumstances of the present case, we think that the fair order of costs would be that each party should bear and pay its own costs throughout.
S.R. Appeal dismissed.
| The respondent assessee was a partner in the partnership firms of M/s. Malabar Tile Works and M/s. Malabar Plywood Works and alongwith her there were other partners including her husband and minor daughter.
In her returns for the assessment year 1964 65 for which the relevant accounting year was the calendar year ending 31st December, 1963, the assessee filed a return of income omitting the amounts representing the shares of her husband and minor daughter in the partnership firms from her income.
The Income Tax Officer, however, brought the amounts, namely, Rs. 59,506 to tax and referred the case for taking action under section 271(1)(c) of the Act to the Assistant Appellate Commissioner who imposed a penalty of namely, Rs. 7,000 on the assessee for having concealed her income.
In appeal the Tribunal set aside the order and the High Court on reference affirmed the Tribunal 's order.
Hence the appeal by Revenue to this Court after obtaining special leave.
Dismissing the appeal, the Court ^ HELD: (1) The assessee, in view of the fact that the prescribed form for filing of returns under section 139 of the Act, prior to 31st March, 1972, did not contain separate column to show "income arising to spouse/minor child or any other person referred to in Chapter V of the Act", and in view of the decision of three Judges Bench reported in SC could not be said to have concealed her income by not disclosing in the return filed by her the amounts representing the shares of her husband and minor daughter in the two partnership firms.
[788B] (2) The term "his income" for the purpose of section 271(1)(c) of the Act, is "his income" which the assessee is liable to disclose for the purposes of assessment and yet fails to do so.
The return of income under section 139(1) of the Act is required to be filed in order to enable the Revenue Authorities to make a proper assessment of tax on the assessee.
A fortiorari, it follows that the assessee must disclose in the return every item of income which is liable to be taxed in his hands under sections 4 & 5 of the Act.
[785B; F H] 782 (3) The definition of "total income" in section 2(45), no doubt refers to section 5 which lays down that all the income profits and gains accrued or arisen to the assessee or received by or on behalf of the assessee shall be liable to be included in his total income but this provision is subject to the other provisions of the Act and therefore if the income of any other person is declared by any provision of the Act to be includible in computing the total income of the assessee, such income would form part of the total income exigible to tax under section 4 of the Act.
section 64(1) is one such provision which provides for inclusion of the income of certain other persons in computing the total income of the assessee.
[785F H] Section 64(1) makes it clear that though the share of the spouse or minor child in the profits of a partnership firm in which the assessee is a partner is not the income of the assessee but is the income of such spouse or minor child it is liable to be included in computing the total income of the assessee and it would be assessable to tax in the hands of the assessee.
The total income of the assessee chargeable to tax would include the amounts representing the shares of the spouse and minor child in the profits of the partnership firm.
Obviously the words "his income" in section 139 sub section
(1) must include every item of income which goes to make up his total income assessable under the Act.
The amounts representing the shares of the spouse and minor child in the profits of the partnership firm would be part of "his income" for the purpose of assessment to tax and would have to be shown in the return of income filed by him.
[786B D] (4) It is true that the form of the return prescribed by Rule 12 of the Income Tax Rules, 1962 which was in force during the relevant assessment year did not contain any separate column for showing the income of the spouse and minor child liable to be included in the total income of the assessee, but it did contain a Note stating that if the income of any other person is includible in the total income of the assessee under the provisions, inter alia, of section 64, such income should also be shown in the return under the appropriate head.
This Note clearly required the assessee to show in the return under the appropriate head of income, namely, "profits and gains of business or profession" the amounts representing the shares of the husband and minor daughter of the assessee in the profits of the two partnership firms.
The assessee however failed to disclose these amounts in the return submitted by her and there was plainly and manifestly a breach of the obligation imposed by section 139 sub section
(1) requiring the assessee to furnish a return of her income in the prescribed form.
To accept the contention that despite the Note the assessee was still not liable to show in the return the amounts representing the shares of her husband and minor daughter in the two partnership firms would render the Note meaningless and futile and turn it into a dead letter 783 and that would be contrary to all recognised canons of construction.
The assessee was guilty of concealment of this item of income which plainly attracted the applicability of section 271 sub section
(1) clause (c).
[786G 787D] V.D.M.RM.M.RM.
Muthiah Chettiar vs Commissioner of Income Tax, , doubted
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Appeal No. 10144 of 1983.
Appeal by Special leave from the Judgment and Order dated the 20th July, 1983 of the Allahabad High Court in Civil Revision No. 237 of 1983.
G.L. Sanghi, K.K.Jain, A.D. Sanger and Pramod Dayal for the Appellant.
J.D. Jain, Mrs Kawaljit Kochar and S.R. Yadav for the Respondent.
The Judgment of the Court was delivered by MISRA, J.
The present appeal by special leave is directed against the judgment of the High Court of Allahabad dated 20th July, 1983 disposing of a revision under s.25.
of the Small Causes Court Act arising out of suit for eviction of the appellant from the premises in suit.
The respondent filed a suit for eviction and for arrears of rent and damages for use and occupation pendent lite and future on the allegation that the appellant was inducted as a tenant of the premises in suit on a monthly rent of Rs. 250 on 7th February, 1972, that the building in suit was constructed in 1971 under the co operative housing scheme of the State Bank of India for which the Bank advanced loan.
The building in suit was assessed to house and water tax on 1st October.
1971 and as such the building was not covered by the U.P. Urban Buildings (Regulation of letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the new Rent Act for short), and that the defendant defaulted in the payment of rent despite notice dated 24th March, 1977.
The Respondent therefore terminated the tenancy of the appellant.
336 The claim was resisted by the appellant on the ground that the building in question was constructed in 1968 and that it was covered by the new Rent Act.
His further stand was that rent had been cleared upto 6th April, 1977 and there was no default in the payment of rent.
He also challenged the service and the validity of the notice terminating his tenancy.
The appellant also claimed the adjustment of Rs. 1000 spent by him towards the repairs of the premises.
By a later amendment it was further pleaded that the plaint having not been amended so as to bring the suit under the provisions of the new Rent Act the suit was barred by s.20 of the Act.
The Third Additional District Judge negatived the defence and decreed the suit for eviction as also for recovery of arrears of rent and damages for use and occupation.
The learned Judge held that the building was exempt from the operation of the new Rent Act on two grounds.
The first grounds.
was based upon sub s.(2) of s.2 which provides that nothing in this Act shall apply to a building during the period of ten years from the date on which its construction is completed.
The second ground was based upon the proviso to sub s.(2) of s.2, which contemplates that where a building has been constructed substantially out of funds by way of loan or advance from the State Government, or Life Insurance Corporation of India or a bank or a Co operative society, and the period of repayment of such loan or advance exceeds the aforesaid period of ten years, then reference in this sub section to a period of ten years shall be deemed to be a reference to a period of fifteen years or the period ending with the date of actual repayment of each loan or the period ending with the date of actual repayment of each loan of advance, including interest, whichever is shorter.
As the last instalment of the loan was paid in March 1981, instead of ten years the building should be fifteen years old to attract the provisions of the new Rent Act.
He also held that the appellant had failed to prove that the spent Rs. 1000 towards repairs of the premises.
The learned Judge overruled the other pleas of the appellant and decreed the suit as prayed for.
The appellant feeling aggrieved preferred a revision in the High Court.
It was contended for the appellant that the building in question had been constructed by a co operative society and the landlord had purchased it from the society and, therefore, the view taken by the learned Judge that the building was constructed substantially out of funds obtained from the sources mentioned in the proviso to s.2(2) of the new Rent Act was manifestly erroneous.
The High Court, however, did not express any concluded opinion and rest contended by observing that it was not necessary to examine the submission 337 in any detail or to express any concluded opinion about it for disposal of the present revision.
The High Court, however, accepting the finding of the learned Additional District Judge that the building in question will be deemed to have been completed on 1st October, 1971, the date of assessment of house tax and water tax held that the building was not ten years old on the date of the suit and, therefore, the new Rent Act had no application to the building in suit and the appellant cannot get any protection of the new Rent Act.
The High Court confirmed the findings of the trial Court on all other points except the finding about the arrears of rent.
In the opinion of the High Court admittedly a sum of Rs. 1000 had been paid by the appellant to the landlord through a crossed cheque dated 16th August, 1976 which was received by the landlord on 15th September, 1976.
But when the plaintiff was in the witness box payment by cheque was not specifically put to him and it has not been established as to for which period the payment by cheque was made.
The counter foil of the cheque book also did not specify the period for which this payment by cheque was made.
The High Court, however, did not endorse the finding of the Additional District Judge that the payment through the cheque may have been made by the appellant towards rent for some period prior to April 7, 1976 and held it to be manifestly erroneous and without any basis.
In the result High Court allowed the appeal in part and set aside the decree of the trial court relating to the recovery of Rs.3158 30 as arrears of rent for the period between April 7, 1976 and April 25, 1977 and remanded the case to the trial court for redetermination of the amount of rent in arrears payable by the appellant after affording opportunity to the plaintiff to explain the payment of the amount of Rs. 1000 through cheque dated August 16, 1976.
The trial court was further directed to afford opportunity to the parties to adduce further evidence in regard to this aspect.
The appellant has now approached this Court with an application for special leave to appeal.
On the date of summary hearing of the application under article 136 of the Constitution we granted special leave and with the consent of the counsel for the parties we finally heard the appeal to obviate further delay.
338 The only point argued before this Court is whether the premises which was not ten years ' old on the date of the suit and was exempted from the operation of the new Rent Act, can be governed by it if ten years expired during the pendency of the litigation.
In order to appreciate the contention of the parties it will be relevant at this stage to refer to s 2 of the new rent Act.
It pertinently reads: "2.
Exemption from operation of Act. (I) nothing in this Act shall apply to (a). . . (b). . . (c). . . (d). . . (e). . . (f) any building built and held by a society registered under the Societies registration Act, 1860 (Act No. LVIII of 1860) or by a Co operative society, company or firm and intended solely for its own occupation or for the occupation of any of its officers or servants, whether on rent or free of rent, or as a guest house, by whatever name called, for the occupation of persons having dealings with it in the ordinary course of business.
(2) Except as provided in sub section (5) of Section 12, sub section (IA ) of section 21, sub section(2) of Section 24, Section 24 A 24 B, 24 C or sub section (3) of Section 29 nothing in this Act shall apply to a building during a period of ten years from the date on which its construction is completed: Provided that where any building is constructed substantially out of funds obtained by way of loan or advance from the State Government or the Life Insurance Corporation of India or a bank or a co operative society or the Uttar Pradesh Avas Evam Vikas Parishad, and the period of repayment of such loan or advance exceeds the aforesaid period or ten years then the reference in this sub section to the period of ten years shall be deemed to be a reference to the period of ten years or the period ending with the date of actual repayment of each loan or advance (including interest), whichever is shorter.
339 Explanation I. For the purposes of this sub section (a) the construction of a building shall be deemed to have been completed on the date on which the completion thereof is reported to or otherwise recorded by the local authority having jurisdiction and in the case of a building subject to assessment the date on which the first assessment thereof comes into effect and where the said dates are different, the earliest of the said dates, and in the absence of any such report, record or assessment, the date, on which it is actually occupied (not including occupation merely for the purposes of supervising the construction or guarding, the building under construction) for the first time.
Provided that there may be different dates of completion of construction in respect of different parts of a building which are either designed as separate units or are occupied separately by the landlord and one or more tenants or by different tenants: Explanation II . . . . . . .
Explanation III A building shall be deemed to be constructed substantially out of funds obtained from sources mentioned in the proviso, if the funds obtained from one or more of such sources account for more than one half of the cost of construction.
" Section 2 of the Act provides various kinds of buildings to which the new Rent Act has no application.
Sub section (2) of s.2 contemplates that the new Rent Act will not apply to a building during a period of ten years from the date on which its construction is completed.
Explanation I to sub s.(2) enumerates the dates on which the building shall be deemed to have been completed : (i) The date on which the completion thereof is reported to or otherwise is recorded by the local authority having jurisdiction.
(ii) In case of building subject to assessment, that date on which the first assessment thereof comes into effect.
(iii) where the said dates are different, the earliest of the said dates.
340 (iv) In the absence of any such report, record or assessment the date on which it is actually occupied for the first time.
In the case in hand the building was subject to assessment therefore it will be deemed to have been completed on the date of assessment which was 1st October, 1971.
The Additional District Judge has found that the building will be deemed to have been completed on the date of assessment of the house which has been accepted by the High Court.
The moment a building becomes ten years old to be reckoned from the date of completion, the new Rent Act would become applicable.
Admittedly the building was not ten years old on the date of suit.
But during the pendency of the litigation it completed ten years.
Then the question arises whether the new Rent Act will be attracted if the building completes ten years during the course of litigation.
The Additional District Judge decided the case on 23rd February 1982.
By that time the building in question had completed ten years.
The trial court, however, relying on a recent decision of this Court in Om Prakash Gupta vs Dig Vijendrapal Gupta ) refused to apply the new Rent Act to the building in question.
In that case a contention was raised that the building will be deemed to have been constructed on the date of occupation on 16th June, 1967 and not on the date of the first assessment and if that be so, the appellant would be entitled to the benefit of s.39 of the Act on the date when the revision came to be decided by the High Court.
On 23rd March, 1978.
This Court, however, held that it is the date of the first assessment which will be deemed to be the date of completion of the construction in the circumstances of the case and in that view of the matter the building had not become more than ten years old on the date when the revision came to be decided by the High Court and, therefore, there was no question of giving the benefit of s.39 of the Act to the appellant.
It was not at all necessary in that case to deal with the question whether the appellant would be entitled to the benefit of s.39 as the building had not become ten years old on the date their the revision petition was heard.
In the instant case, however, the building had become more than ten years old during the pendency of the litigation and, therefore, the question assumes importance in the present case.
341 It may be argued that the Court had to decide the case on the basis of cause of action that accrued prior to the date of filing the suit and not on a new cause of action, but this question need not detain us as it is covered by decision of this Court in Pasupati Venkateswrlu vs Motor and General Traders.(1) Dealing with a similar question this Court observed: "It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date a suitor institutes the legal proceeding.
Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process.
If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of moulding it, if brought diligently to the notice of the tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy.
Equity justifies bending the rules of procedure, where no specific provision or fair play is not violated, with a view to promote substantial justice subject, of course to the absence of other disentitling factors or just circumstances.
Nor can we contemplate any limitation on this power to take note of updated fact to confine it to the trial Court.
If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice.
Rulings on this point are legion, even as situations for applications of this equitable ruled are myriad.
We affirm the proposition that for making the right or remedy claimed by the party just and meaningful as also legally and factually in legally and factually in accord with the current realities, the Court can, and in many cases must, take cautious cognizance of events and developments subsequent to the institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed." Normally amendment is not allowed if it changes the cause of action.
But it is well recognised that where the amendment does not constitute an addition of a new cause of action, or raise a new case, but amounts to no more than adding to the facts already on the record the amendments would be allowed even after the statutory period of limitation.
The question in the present case is whether by seeking the benefit of s.39 of the new Act there is a change in the cause of action.
In A.K. Gupta & Sons.
vs Damodar 342 Valley Corporation this Court dealing with the cause of action observed as follows: "The expression "cause of action" in the present context does not mean every fact which it is material to be proved to entitle the plaintiff to succeed" as was said in Cooks vs Gill(2) in a different context, for if it were so, no material fact could ever be amended or added and, of course, no one would want to change or add an immaterial allegation by amendment.
That expression for the present purpose only means, a new claim made on a new basis constituted by new facts.
Such a view was taken in Rabinson vs Unicos Property Corporation Ltd.(3) and it seems to us to be the only possible view to take.
Any other view would make the rule futile.
" The appellant in the present case only seeks the protection of the new Rent Act which became applicable to the premises in question during the pendency of the litigation.
We see no reason why the benefit of the new Rent Act be not given to the appellant.
Section 20 of the new Rent Act provides a bar to a suit for eviction of a tenant except on the specified grounds as provided in the section.
Subsection (4) of s.20 stipulates that in any suit for eviction on the grounds mentioned in cl.
(a) to sub section
(2), viz. the arrears of rent, if at the first hearing of the suit the tenant in default pays all arrears of rent to the landlord or deposit in court the entire amount of rent and damages for use and occupation of the building due from him, such damages for use and occupation being calculated at the same rate as rent together with interest thereon at the rate of nine per cent per annum and the landlord 's cost of the suit in respect thereof after deducting there from any amount already deposited by the tenant under sub section
(1) of s.30, the court may, in lieu of passing a decree for eviction on that ground, pass an order relieving the tenant against his liability for eviction on that ground.
Sections 39 and 40 of the new rent Act also indicate that the benefit of the new Act will be given to the tenant if the conditions comtemplated in those sections are satisfied.
Section 39 also indicates that the parties are entitled to make necessary amendment in their pleadings and to adduce additional evidence where necessary.
For the reasons given above the appeal must succeed.
It is accordingly allowed in part and the judgment and decree of the High 343 Court is set aside in so far as it relates to eviction but the judgment of the High Court setting aside the decree for arrears of rent and remanding the case to the trial court remains intact, and the case is sent back to the III Additional District Judge who will apply the new Rent Act and give the protection of the new Act to the appellant and will give him an opportunity to deposit the dues contemplated by s.39 of the new rent Act after first determining whether any amount is due from the appellant towards rent as directed by the High Court.
The costs here will abide the result.
S.R. Appeal allowed in part.
| In the years 1971 and 1972, several thousand acres of agricultural lands in two villages were acquired by the State Government pursuant to different notifications issued under section 4(1) of the Land Acquisition Act 1894.
In response to notices under section 9(2), the respondents appeared before the Special Land Acquisition officer and claimed compensation varying between Rs. 15,000 to Rs 25,000 per acre for dry and wet lands depending upon the nature and the quality of the soil, and the income derived therefrom.
In some cases compensation was claimed at more than Rs. 1 lakh per acre for arecanut garden lands.
The Special Land Acquisition officer, by his various awards adopted a multiple of fifteen and awarded compensation at a flat rate of Rs 3,300 per acre for dry agricultural lands and Rs 5,000 per acre for wet agricultural lands.
On references under section 18, the Civil Judge adopted a multiple of fifty times the net annual profits as there was no other method of determining the market value of the land, and enhanced the amount of compensation to Rs. 19,500 per acre for wet agricultural lands and Rs 1,10,000 for arecanut garden lands.
On appeals by the Special Land Acquisition Officer, the High Court also adopted the capitalised value at 15 years ' purchase of the net annual profits but reduced the amount of compensation to Rs. 15,000 per acre for wet agricultural lands and Rs. 25,000 per acre for arecanut garden lands.
In the appeals to this Court by the Special Land Acquisition officer, it was contended relying on the unreported decision of the High Court dated November 21, 1977 in MFA Nos.
881 4/76: The Special Land Acquisition officer, Davangere vs B. Basavarajappa & Ors that the proper multiple for computation of the capitalized value should be 12/1/2 and that the High Court was wrong in adopting the multiple of 15 when the rate of return in the years 1971 and 1972 was 8 per cent per annum.
387 Allowing the Appeals; ^ HELD: 1.
The function of the Court in awarding compensation under the Land Acquisition Act 1894 is to ascertain the "market value" of the land at the date of the notification under section 4(1) of the Act, and the methods of valuation may be: (1) Opinion of experts (2) The price paid within a reasonable time in bona fide transactions of purchase or sale of the lands acquired, or of the lands adjacent to these acquired and possessing similar advantages, and (3) a number of years ' purchase of the actual or.
immediately prospective profits of the lands acquired.
[392 D E] 2.
The method of capitalising the actual or immediately prospective profits or the rent of a number of years purchase should not be resorted to if there is evidence of comparable sales or other evidence for computation of the market value.
It can be resorted to only when no other method is available.
[392 E] 3.
The meaning to be placed upon the phrase "Market Value" of the land under s.23 of the Act, is the price the land acquired could actually be sold at the relevant time i.e. on the date of the notification under s 4(1).
The owner is entitled to the value of the property in its actual condition at the time of expropriation, with all its advantages and with all its possibilities, excluding any advantage due to the carrying out of the scheme for the purpose for which the property is acquired.
Its value is measured by a consideration of the prices that have been obtained in the past for lands of similar quality and in similar positions.
[394 H; 392 B C) 4.
In valuing land or an interest in Land for purposes of land acquisition proceedings, the rule as to number of years ' purchase is not a theoretical or legal rule but depends upon economic factors such as the prevailing rate of return which a prudent investor in the class of properties in question would expect.
The return which an investor will expect from investment will depend upon the characteristic of income as compared to that of idle security.
The most important of such economic factors is the prevailing rate of interest at the relevant time i.e. on the date of the notification under s.4(1).
It is first necessary to ascertain the gross income from the acquired property.
The next step should be ascertain the net income.
Having ascertained the net annual income, it must be capitalized by computing the number of years ' purchase.
[395 B C] Vyricherla Narayana Gajapatiraju vs Revenue Divisional Officer, Vizagapatnam, LR (1939)66 IA 104; Rustom Cavasjee Cooper vs Union of India, ; ; Oriental Gas Co. Ltd & Ors vs State of West Bengal, ; ; Union of India & Anr vs Smt.
Shanti Devi etc.
etc ; ; referred to.
In regard to investment in agricultural lands there are many imponderables inasmuch as the investor runs a much greater risk than the risk that he runs in investment in housing which consists in vagaries of weather and other uncertainties.
There is no security of principal, no liquidity of investment nor any certainty of income.
The appreciation of principal or in come is also uncertain.
The reasons for these is that agricultural lands are not readily transferable under the various land reforms legislation, ex.
laws relating to ceiling on agricultural holding and tenancy laws.
In evaluating the rate of return which would ordinarily satisfy an investor in such a property, the risk factor has further to be evaluated.
There 388 may be total of partial failure of crops through the failure of rain or drought, or inadequate or excessive rainfall.
There may be failure of crops on account of locusts, insects or pests.
The cost inputs such as seeds, water, fertilizer etc.
vary from year to year.
The fluctuations in price of agricultural produce introduce a great deal of uncertainty in regard to income.
In view of these considerations, an investor would expect a much higher rate of return so that the risk factor is properly discounted.
[399 B E] In the instant cases, when the rate of return on investment was 8.25 per cent in the years 1971 and 1972, a person investing his capital in agricultural lands would ordinarily accept 2 per cent to 3 per cent more than what he could obtain from gilt edged securities or other forms of Safe investment and therefore the proper multiplier to be applied for the purpose of capitalization could not in any event exceeded "ten", but since the State Government in these cases contends that proper multiple for cover should be 12 1/2 [399 F G] 6.
The multiple of 12 1/2 should be applied in computation of the capitalized value of lands.
The judgments and crees of the High Court are modified.
The compensation awarded for acquisition of land reduced by one sixth wherever the amount of compensation had been determined by the method of capitalization.
The respondents shall get solatium 15% on the compensation computed as aforesaid and also interest.
[399 H; 400A B]
|
Civil Appeal No. 174 of 1981.
Appeal by Special leave from the Judgment and order dated the 4th September, 1980 of the Bombay High Court in Writ Petition No. 2155 of 1979.
U.R. Lalit, C.B. Singh and P.H. Parekh for the Appellants.
Jitendra Sharma for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
Land bearing Survey No. 1052 admeasuring 16 acres situated within the revenue limits of Village Sonai Taluka Nawasa Distt.
Ahmendnagar, belonged to Tarachand Chopra Janardhan, the father of the respondent was admittedly the tenant of this land on April 1, of the Bombay Tenancy and Agricultural Lands Act, 1948 as amended from time to time provided that on the 1st day of April, 1957 styled as the tillers ' day every tenant shall subject to other provisions of the section and the provisions of the next succeeding sections be deemed to have purchased from his landlord, free from all encumbrances subsisting thereon on the same date the land held by him as a tenant if other conditions of the section are satisfied.
Thus by operation of law, Janardhan, who was the tenant of the land on the tillers ' day became the deemed purchaser thereof.
Landlord Tarachand died on August 12, 1959.
Before his death, landlord Tarachand had executed a will and bequeathed the suit land to Ashoklal Gugale who was petitioner No. 5 before the High Court Acting upon the will of Tarachand, Ashoklal got his 241 name mutated in the revenue record in respect of suit land in his favour as owner.
On the date of mutation, Ashoklal was a minor.
A Sec.
32 G imposes a statutory duty on the Agricultural l ands Tribunal ( 'Tribunal ' for short) to commence enquiry for determining the price of the land which is the subject matter of compulsory purchase.
The Tribunal is required to issue notice to (a) all tenants who u/s 32 are deemed to have purchased the lands (b) all landlords of such lands and (c) all other persons interested therein to appear before it on the date specified in the notice.
Pursuant to such notice when the parties appeared before the Tribunal it was claimed on behalf of landlord that Ashoklal, the recorded owner was a minor and therefore the sale was postponed u/s 32 F. The Tribunal failed to exercise jurisdiction in not noticing the obvious fact that the relevant date on which compulsory sale takes place is April 1, 1957 and on that date Tarachand Chopra the landlord was the recorded owner and he was under no disability as envisaged by sec.
32 F and therefore the sale had become effective and could not be postponed u/s 32 F.
However, the Tribunal failed to exercise its jurisdiction by mis stating an obvious irrelevant fact that as recorded owner was a minor, compulsory sale was postponed as envisaged by sec.
32 F. It appears that the Tribunal again commenced proceedings in the year 1967 u/s 32 G and concluded the proceedings by its order dated July 13, 1967 repeating the jurisdictional errors and thereby failed to exercise jurisdiction vested in it.
In the meantime, minor landlord through his next friend commenced proceedings in Case No. 36 of 1967 in the court of Tenancy Avail Karkoon having jurisdiction in the area for recovery of possession from tenant Janardhan who had become a deemed purchaser, u/s 14 read with sec.
29 of the Tenancy Act Sec.
14 enables the landlord to recover possession if tenant commits default in payment of rent for certain number of years.
The Tenancy Avail Karkoon entertained the petition which it had no jurisdiction because there was no subsisting relationship of landlord and tenant between Ashoklal and Janardhan as Janardhan had already become deemed purchaser on April 1, 1957.
However, the Tenancy Aval Karkoon taking note of the earlier decisions of the Tribunal holding that the date of compulsory sale was postponed directed possession to be handed over to the landlord holding that the tenant had committed default in payment of rent.
Mr. Lalit, learned counsel for the appellant at this stage pointed out that in the proceeding u/s 14 read with sec.
29 of the Tenancy Act, the tenant Janardan had made a Statement on October 5, 1967 242 that he had no objection to handing over possession of the land to A the land to the landlord as he was old and could not cultivate the land personally.
On the same day, surprisingly the Tenancy Aval Karkoon also recorded the statement of present respondent that in the lifetime of his father Janardhan he had no title to the land involved in the dispute.
It appears that the Tenancy Aval Karkoon made the order dated oct. 6, 1967 evicting Janardhan from the land on the footing that he was a tenant liable to pay rent and had committed defaults.
This wholly null and void order enabled the minor landlord to sell the land by a registered deed on Nov. 13, 1967 to the petitioner No. 1 and one Haribhav and the latter in turn transferred his interest in favour of other petitioners, Misled by the two orders of the Tribunal holding that the sale was postponed Janardhan served a notice on oct. 6, 1971 as envisaged by sec.
32 F that as the landlord has attained majority he is entitled to purchase the land and that the price of land be determined.
Presumably, pursuant to this notice, the Tribunal commenced proceedings under sections 32 G and 32 F of the Tenancy Act for determining the purchase price.
It was contended on behalf of the petitioners transferees from Ashoklal before the Tribunal that as Janardhan has already handed over possession to Ashoklal he had no subsisting interest in the land and therefore he had no right to purchase the land u/s 32 F and that the proceedings be dropped.
This contention found favour with the Tribunal which overlooked the legal position that Janardhan had become the deemed purchaser on April 1, 1957.
Janardhan died on November 29, 1976 leaving respondent his son as the sole heir.
After the death of Janardhan an enquiry was commenced to ascertain whether Janardhan the deceased tenant had already become the deemed purchaser on April 1, 1957 and that all the subsequent proceedings were Abington void.
There were some proceedings in between u/s 84 which are hardly relevant The Tribunal went into the matter in depth, examined all proviso orders and finally reached an affirmative conclusion that on April 1, 1957 Tarachand was the recorded landlord and being under no disability and Janardhan being tenant of the land, by operation of law, Janardhan become the deemed purchaser and all subsequent proceedings were null, void and non est.
The Tribunal accordingly determined the purchase price.
The present petitioners after unsuccessfully appealing to the Assistant Collector and the Maharashtra Revenue Tribunal u/s 76 of the Tenancy Act, reached the High Court under Article 2 27, 243 A parallel proceeding was initiated by the respondent u/s 84 of the Tenancy Act for recovery of possession which was illegally taken from him.
The Assistant Collector held that occupation of the suit land by the petitioners was contrary to the provisions of law as Janardhan had already become the deemed purchaser and no title could be acquired by the petitioners from the sale by Ashoklal and therefore the respondent is entitled to recover possession.
The direction was issued to hared over possession to the respondent.
This order was confirmed by the Maharashtra Revenue Tribunal in Revision as per its judgment dated July 16, 1973.
Two petitions were moved by transferee petitioners in the High Court of Bombay against two orders one of the Maharashtra Revenue Tribunal, in a proceeding u/s 32 G and another in a proceeding u/s 84 against the present respondent.
The learned Single Judge of the High Court by a common judgment dismissed bottle the petitions of the petitioners holding that as Janardhan had become the deemed purchaser on the tillers ' day i. e. April 1, 1957 all subsequent proceedings u/s 32 F were ab initio void and without jurisdiction and nullity is the eyes of law.
The High Court also held that the petitioners acquired no title under the purported sale by Ashoklal because Ashoklal had no title to the land have receiving the purchase price from Janardhan or his heir as determined u/s 32 G.
The High Court accordingly dismissed both the petitions with costs.
Hence these two appeals by special leave.
Mr. U.R. Lalit, learned counsel appearing for the appellants strenuously urged that the orders made by the Tribunal u/s 32 F and by the Tenancy Aval Karkoon in a proceeding u/s 14 read with sec.
29 of the Tenancy Act and the statement of Janardhan and the respondent would clearly show that these orders were at best erroneous but not void and cannot be ignored as nullity in subsequent proceedings.
The Tenancy Act was comprehensively amended by Amending Act IS of 1957.
The amendment brought in a revolutionary measure of agrarian reforms making tiller of the soil the owner of the land.
This was done to achieve the object of removing all intermediaries between tillers of the soil and the State.
32 provides that by mere operation of law, every tenant of agricultural land situated in the area to which the Act applies shall become by the operation of law, the owner thereof.
He is declared to be a deemed purchaser without anything more on his part.
A Constitution Bench of this 244 Court in Sri Ram Narain Medhi vs The State of Bombay(1) held that: "the title of the landlord to the land passes immediately to the tenant on the tillers ' day and there is a completed purchase or sale thereof as between the landlord and the tenant.
The title of the land which was vested originally in the landlord passes to the tenant on the tillers ' day and this title is defeasible only in the event of the tenant failing to appear or making a statement that he is not willing to purchase the land or commit default in payment of the price thereto as determined by the Tribunal.
" Therefore, it is unquestionably established that on the tillers ' day, the landlord 's interest in the land gets extinguished and simultaneously by a statutory sale without anything more by the parties, the extinguished title of the landlord is kindled or created in the tenant.
That very moment landlord tenant relationship as understood in common law or Transfer of Property Act comes to an end.
The link and chain is broken.
The absent non cultivating landlord ceases to have that ownership element of the land and the cultivating tenant, the tiller of the soil becomes the owner thereof This is unquestionable.
The landlord from the date of statutory sale is only entitled to receive the purchase price as determined by the Tribunal u/s 32 G.
In other words, the landlord ceases to be landlord and the tenant becomes the owner of the land and comes in direct contact with the State.
Without any act of transfer inter vivos the title of the landlord is extinguished and is created simultaneously in the tenant making the tenant the deemed purchaser.
It is an admitted position that on April 1, 1957 Tarachand was the landlord and Janardhan was the tenant.
Tarachand landlord was under no disability as envisaged by sec. 32 F. Therefore on April 1, 1957 Janardhan became deemed purchaser.
and Mr. Lalit could not controvert this position.
If Janardhan became the deemed purchaser on tillers ' day, the relationship of landlord and tenant between Tarachand and Janardhan came to be extinguished and no right could be claimed either by Tarachand or anyone claiming through him such as Ashoklal or the present purchasers on the footing that they are the 245 Owners of the land on or after April 1, 1957.
This basic fact is A incontrovertible.
It may be mentioned that sec.
32 F has no application to the facts of this case.
Section 32 F postponed the date of compulsory purchase by the tenant where the landlord is a minor or a widow or a person subject to mental or physical disability on the tillers ' day.
32 F bas an overriding effect over section 32 as it opens with a non obstante clause.
The combined effect of sec.
32 F and 32 would show that where the landlord is under no disability as envisaged by sec.
32 F the tenant of such landlord by operation of law would become the deemed purchaser but where the landlord is of a class or category as set out in sec.
32 F such as a minor, a widow or a person subject to any mental or physical disability, the date of compulsory sale would be postponed as therein provided.
Now, if Tarachand, the landlord was under no disability and he was alive on April 1, 1957 and he was the owner, his tenant Janardhan became the deemed purchaser.
This conclusion, in our opinion, is unassailable.
If Janardhan became the owner on April 1, 1957 all subsequent proceedings in which the Tribunal held that the date of purchase was postponed because the recorded owner Ashoklal was a minor were without jurisdiction.
The Tribunal had absolutely no jurisdiction to proceed on the footing that the date of sale was postponed.
It is neither an incorrect order nor an erroneous order as was sought to be made out but Tribunal lacked the jurisdiction to proceed section 32 F because when the proceedings section 32 F were commenced, Janardhan had long since become the deemed purchaser.
Therefore all sub sequent proceedings were an initio void and without jurisdiction and the High Court was right in holding that orders passed therein were nullity.
The attempt to overcome this position by urging that the order was erroneous was rightly repelled by the High Court holding that the orders were null and void, proceeding on an erroneous assumption of jurisdictional fact that the recorded owner was a minor on the tillers day.
When a Tribunal of limited jurisdiction clutches at a jurisdiction by ignoring a statutory provision and its consequences in law on the status of parties or by a decision wholly unwarranted, with regard to the jurisdictional fact, its decision is a nullity and can be set up in collateral proceeding.
The Tribunal clutched at a jurisdiction not vested in it and in such a situation it cannot be 246 disputed that the Tribunal lacked the jurisdiction to entertain any A proceeding purporting to be between landlord and tenant on the erroneous assumption that tenant was still a tenant though he had long since become the deemed purchaser.
The tenant has ceased to be a tenant much prior to the orders passed by the Tribunal on April 24, 1961 and July 13, 1967 holding that the date of compulsory purchase was postponed.
The compulsory purchase by the operation of law had taken place as early as April 1, 1957 and that legal position cannot be wished away.
Mr. Lalit, however, contended that the statement of Janardhan in the proceeding u/s 14 read with sec.
29 of the Tenancy Act stating that he had become old and was unable to cultivate the land and he is willing to hand over possession would estop the respondent from contending to the contrary.
It was further urged that respondent himself was present on the date on which Janardhan gave his statement on October S, 1967 and he concurred with the statement of Janardhan.
We are not unaware of the landed gentry exercising such influence over the tenants that in the absence of legal literacy they may make any statement contrary to their legally protected interest.
A measure of agrarian reform cannot be permitted to be defeated by such devious means of the landlords.
However apart from ignorance of his position assuming that Janardhan relinquished his right as tenant, landlord Ashoklal was nontheless not entitled to recover possession because, when Janardhan, the deemed purchaser agreed to hand over possession subject to the provision of sec.
IS, the land would be at the disposal of Collector under sec.
32 P. Landlord even in such a situation is not entitled to be restored to possession without bringing his case under sec.
15 which appears not to be the case of landlord.
And look at the bona fides of the landlord.
Ashoklal as soon as he managed to obtain wholly void order for possession, managed to transfer the lands to the petitioners within a span of less than 2 weeks.
It would thus appear that even Ashoklal and his next friend must be presumably aware of the void character of the order and therefore posthaste with a view to thwarting any further legal proceeding and confuse Janardhan, Ashoklal through his next friend managed to transfer the land to the petitioners and let the petitioners fight the deemed purchaser.
A measure whereby tenant was to be made the owner of the land cannot be permitted to be defeated by such jugglery of orders by low level revenue officers who hardly knew what they were doing.
Look at the lack of knowledge of law of the Tribunal.
While overlooking the relevant date, and it took into account the subsequent date which was wholly irrelevant and impermissible.
Though 247 landlord Tarachand had died much after 1.4.1957 in proceeding u/s 32 G minor Ashoklal whose name was mutated on death of A Tarachand, the authority declared the sale having been postponed even though statute had already operated and sale taken place.
Can a statutory Tribunal charged with a duty to implement the law betray such total lack of knowledge so as to be counter productive ? Same is the case with the decision of Tenancy Aval Karkoon.
A proceeding u/s 14 read with sec.
29 of the Tenancy Act, started on the footing that the relationship of landlord and tenant subsisted should have been thrown out at the threshold because a decade back the then tenant Janardhan had become the deemed purchaser.
Therefore these orders were wholly null and void and hence non est and cannot thwart subsequent proceedings.
The nullity can be set up in subsequent proceedings.
Janardhan was deprived of his possession by an order which had no legal sanction.
He was deprived of possession on the footing that he was a tenant ignoring and overlooking the statutory event that he had become the owner.
Even when the Legislature passed such a revolutionary measure its knowledge was not transmitted to the persons for whose benefit the measure was enacted and there was no awakening to one 's right.
Undoubtedly, a communication gap and for want of legal literacy Janardhan was taken on a joy ride and was illegally made to part with possession.
Subsequently everyone realised the blunder committed by them and therefore when the proceedings started on the notice given by Janardhan, the Tribunal determined the price.
Appeal of the petitioners to Assistant Collector failed, revision petition to the Maharashtra Revenue Tribunal at the instance of the petitioners failed so also the writ petition u/s 227 of the petitioners failed.
All authorities concurrently held that Janardhan had become the owner and the Tribunal was right in determining the price.
The authority u/s 84 held that petitioners were not entitled to retain possession as their occupation was contrary to the provisions of the Tenancy Act and they had acquired no title to the land by the purported sale by Ashoklal.
The direction for restoring possession to Janardhan was rightly given.
A revision petition and a writ petition to the High Court at the instance of the petitioners failed.
248 We find that the High Court was right in rejecting both the A petitions.
These were all the contentions in this appeal and as we find no merit in it, the appeal fails and is dismissed with costs.
When this Court issued notice, appellants were directed to deposit Rs. 1500 for costs of respondent.
Respondent came here in rags and urged that he was too poor to engage a counsel.
We therefore direct that the amount of Rs. 1500 deposited in this Court by appellants be paid to respondent.
We record our appreciation of assistance to the Court by Mr. Jitendra Sharma who appeared amicus curie at the request made by the Court while granting special leave.
He should withdraw the amount and take all steps to pay the same to the respondent.
S.R. Appeal dismissed.
| Section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948, as amended from time to time provided that on the 1st day of April, 1957 styled as the "tiller 's day" every tenant shall subject to other provisions of the next succeeding sections be deemed to have purchased from his landlord free from all encumbrance subsisting thereon, on the said date the land held by him as a tenant if other conditions of the section are satisfied.
By operation of this law, one Janardhan, the father of the respondent, became the "deemed purchaser" effective from April 1,1957, of the land bearing survey No. 1052 and F measuring 16 acres situated within the revenue limits of village Sonai Taluka Nawasa, District Ahmednagar which belonged to Tarachand Chopra.
Subsequent to this admitted fact, several incidents took place which have led to the present appeal raising the question of the legal effect of the several steps taken by different persons; ignorant of the factum of Janardhan having become the deemed purchaser".
They are (a) Landlord Tarachand died on August 12,1959, after two and a quarter years after Janardhan became the statutory purchaser; (ii) Tarachand executed a will, before his death, bequeathing the suit land to Ashoklal Gugale, a minor; (iii) the revenue authorities, who must be aware of the provisions of the Act, wrongly mutated the name of Ashoklal in the revenue records as the landlord in terms of the will; (iv) in spite of the mandatory duty imposed upon the Agricultural Lands Tribunal, under Section 32G, to issue notice to all tenants who under section 32 are deemed to have purchased the lands, all landlords of such lands and all other persons interested to appear before 238 it for the determination of the price of the land which is the subject matter of compulsory purchase, strangely accepted the plea for the postponement of the inquiry under section 32F of the Act and later again commenced the proceedings in the year 1967 and concluded the proceedings by its order dated July 13 1967 repeating the jurisdictional errors; (v) in the interregnum, Ashoklal through his next friend commenced proceedings in case No. 36 of 1967 in the Court of Tenancy Aval Karkoon for the recovery of the possession; (vi) the Tenancy Aval Karkoon, not only entertained the petition, but also got recorded two statements, on 5.10.1967, from Janardhan, "the deemed purchaser" to the effect that he had no objection to handing over the possession of the land to the landlord as he was old and could not cultivate the land personally and another from the present respondent to the same effect even though in the life time of his father Janardhan, he had no title to the land involved in the dispute, and, thereafter made the order dated October 6, 1967 exacting Janardhan from the land; (vii) this wholly null and void order enabled the minor landlord to sell the land by a registered deed on November 13, 1967 to one Haribhav and another, the former later transferred his interest in favour of some of the petitioners before the High Court; (viii) On October 6, 1971, Janardhan moved the Tribunal under section 32F of the Act to the effect that as the landlord Ashoklal had attained majority he was entitled to purchase the land; (ix) the Tribunal started the proceedings under section 32G and after bringing the present respondent on record due to the demise of Janardhan on November 29, 1976, went into the matter in depth, examined all previous orders and came to the conclusion that Janardhan having become the "deemed purchaser. ' all subsequent.
proceedings were null and void, which was affirmed by tho Assistant Collector, the Maharashtra Revenue Tribunal and the High Court later; (x) a parallel proceeding initiated by the respondent for the recovery of possession was decided in his favour by all Courts including the High Court Dismissing the appeals by the special leave, the Court ^ HELD: 1:1 on the tiller 's day, the landlord 's interest in the land gets extinguished and simultaneously by a statutory sale without anything more by the parties, the extinguished title of the landlord is kindled or created in the tenant.
That very moment landlord tenant relationship as understood ill common law or Transfer of Property Act comes to an end, the link and chain is broken.
The absent non cultivating landlord ceases to have that ownership element on the land and the cultivating tenant, the tiller of the soil becomes the owner thereof.
This is unquestionable, the landlord from the date of statutory sale is only entitled to receive the purchase price as determined by the Tribunal under section 32G.
In other words, landlord ceases to be landlord and the tenant becomes the owner of the land and comes in direct contact with the state.
Without any act of transfer inter vivos the title of the landlord is extinguished and is created simultaneously in the tenant making the tenant the deemed purchaser.
It is an admitted position that on April 1, 1957 Tarachand was the landlord and Janardhan was the tenant Tarachand landlord was under no disability as envisaged by Section 32F. Therefore or April 1, 1957 Janardhan became deemed purchaser.
[244 C G] 239 Sri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp.
I S.C.R. 489 @ 518 followed.
If, in the instant case., Janardhan became the deemed purchaser on tillers ' day, the relationship of landlord and tenant between Tarachand and Janardhan came to be extinguished and no right could be claimed either by Tarachand or anyone claiming through him such as Ashoklal or the present purchasers on the footing that they are the owners of the land on or after April 1, 1957.
[244 G H, 245 A] 2:1.
Section 32F of the Bombay Tenancy and Agricultural Lands Act, 1948, has no application to the facts of the ease.
Section 32F postponed the date of compulsory purchase by the tenant where the landlord is a minor or a widow or a person subject to mental or physical disability on the tillers ' day.
Section 32F has an overriding effect over Section 32 as it opens with a non obstante clause.
The combined effect of Section 32F and 32 would show that there the landlord is under no disability as envisaged by Section 32F the tenant of such landlord by operation of law would become the deemed purchaser but where the landlord is of a class or category as set out in section 32F such as a minor, a widow or a person subject to any mental or physical disability, the date o, compulsory sale would be postponed as therein provided.
Now, if Tarachand the landlord was under no disability and he was alive on April 1, 1957 and he was the owner, his tenant Janardhan became the deemed purchaser.
[245 A D] 2:2.
If Janardhan became the deemed purchaser on April 1, 1957 all subsequent proceedings in which the Tribunal held that the date of purchase was postponed because the recorded owner Ashoklal was a minor were without jurisdiction.
The Tribunal had absolutely no jurisdiction to proceed on the footing that date of sale was postponed.
It is neither an incorrect order nor an erroneous order as was sought to be made out but Tribunal lacked tho jurisdiction to proceed under section 32F because when the proceedings under Section 32F were commenced, Janardhan had long since become the deemed purchaser.
Therefore all subsequent proceedings were ab initio void and without jurisdiction.
[245 D F] 2:3.
When a Tribunal of limited jurisdiction clutches at a jurisdiction by ignoring a statutory provision and its consequences in law on the status of parties or by a decision wholly unwarranted with regard to the jurisdictional fact, its decision is a nullity and can be set up in collateral proceeding.
The Tribunal clutched at a jurisdiction not vested in it and in such a situation it can not be disputed that the Tribunal lacked the jurisdiction to entertain any proceeding purporting to be between landlord and tenant on the erroneous assumption that tenant was still a tenant though he had long since become the deemed purchaser, The tenant has ceased to be a tenant much prior to the orders passed by the Tribunal on April 24, 1961 and July 13, 1967 holding that the date of compulsory purchase was postponed.
The compulsory purchase by the operation of law had taken place as early as April 1, 1957 and that legal position cannot be wished away.
[245 F H, 246 A Bl 240 3:1 When several orders passed by different authorities are wholly null and void and hence non est, such orders cannot thwart subsequent proceedings.
The nullity can be set up in subsequent proceedings.
The plea of estoppel by conduct also cannot be allowed to be raised, since a measure of agrarian reform cannot be permitted to be defeated by such devious means of the landlords trying to take advantage of any statement made contrary to their legally protected interest, in the absence of legal literacy and by such jugglery of orders of low level revenue officers who hardly knew what they were doing.
[246 C H, 247 G] 3:2.
In the instant case, even assuming Janardhan relinquished his right as a tenant, even then Ashoklal cannot recover possession as the land would be at the disposal of the Collector under Section 32P.
Further, the posthaste steps taken by Ashoklal and others in transferring the lands to several others speak of malafides of the landlord.
[246E F]
|
s Nos. 79 and 80 of 1963 and 140 of 1962.
Petitions under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
section N. Andley, Rameshawar Nath and P. L. Vohra, for the petitioner (in Petition Nos. 79 and 80 of 1963).
Sarjoo Prasad, Ajoy Kumar Gajdhar Mahapatra and A. D. Mathur for the petitioner (in Petition No. 140/1962).
section V. Gupte Additional Solicitor General, section B. Misra, R.Ganapathi lyer and R. N. Sachthey, for the respondents (in all the petitions).
M. C. Setalvad, J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for the interveners (in Petition No. 140/ 1962).
January 23, 1964.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
The petitioners in these three petitions have moved this Court under article 32 of the Constitution and claimed a declaration that the operative provisions of the Orissa Private Lands of Rulers (Assessment of Rent) Act,, 1958 (hereinafter called `the Act ') and the Rules framed thereunder are unconstitutional and ultra vires.
The private lands in the possession and enjoyment of the three respective petitioners have been assessed by the Revenue Officers in conformity with the Rules framed under the Act.
The petitioners claim a writ or direction, or order 304 in the nature of certiorari quashing the said orders of assessment.
The petitioner in Writ Petition No. 140/1962 is the Patrani Saheba of Keonjhar and is in possession and enjoyment of eight villages, viz., Mangalpur; Barigan; Nua Rampas; Nilung; Ghutru; Mohadijore; Patang and Anara in the district of Keonjhar.
These villages were granted to her for maintenance a long time ago and as such, they have been recorded in the village papers as Khoraki Posaki (Maintenance Grant) Lands since the last settlement of 1918.
She has held these lands without paying assessment; and her case is that the relevant provisions of the Act which authorise the levy of assessment in respect of her lands are unconstitutional and invalid.
In her petition, she has referred to the fact that from time to time, the Government of the day had refrained from levying any assessment in respect of her lands and thereby recognised her right to hold the said villages on assessment free basis.
The Revenue Officer of Keonjhar levied an assessment in respect of the said villages purporting to act under the Rules framed under the provisions of the Act.
The petitioner then preferred appeals to the Board of Revenue against the said assessment orders but these appeals were dismissed.
The assessment levied against the petitioner in respect of these lands is of the order of Rs. 9,000 and odd and it has to be paid by her from 1958 retrospectively.
The petitioner in W.P. No. 79/1963 is Smt.
Rani Ratna Prova Devi who is the wife of Raja Sankar Pratap Singh Deo Mahindra Bahadur, ex Ruler of Dhenkanal State in Orissa.
At the time when the State of Dhenkanal.
merged with India, the petitioner was in possession and enjoyment of lands in five villages as a Proprietor.
In respect of these lands, assessment had never been levied; but purporting to give effect to the relevant provisions of the Act, the Revenue Officer Dhenkanal assessed rent in respect of all the lands which are in possession and enjoyment of the petitioner.
The appeals preferred by the petitioner against the said order of assessment failed; and so, the petitioner filed the present writ petition challenging the validity of the Act as well as the validity of the assessment order.
305 The petitioner in W.P. No. 80 of 1963 is the ex Ruler of Dhenkanal.
On the date of merger he held and was in possession of 89 acres 18 dec.
and 5 kadis of land in Niz garh Town as his private lands.
These lands were never subjected to the payment of rent and yet the Revenue Offi cers assessed rents in respect of these lands under the provisions of the Act.
The petitioner failed in persuading the Appellate Authority to set aside the order of assess ment, and so, has filed the present writ petition challenging the validity of the Act and the order of assessment.
Thus, the facts on which the three petitions claim relief are substantially similar and they have raised common points of law for our decision.
That is why the three petitions have been heard together and would be disposed of by a common judgment.
The Act which is challenged in the present proceedings was passed by the Orissa Legislature because "it was thought expedient to provide for assessment of rent with respect to the private lands of Rulers in the State of Orissa".
It received the assent of the Governor on the 21st May. 1958 and was published in the State Gazette on the 6th June, 1958.
It consists of 15 sections and the main object of the Act is to authorise the levy of rent in respect of the private lands of persons included in the definition of the word "Ruler" prescribed by section 2(h) of the Act.
Section 2(e) defines 'Private land ' as meaning any land held on the date of merger by a Ruler free from payment of rent, while section 2 (h) defines a "Ruler" as meaning the Ruler of a merged territory in the State of Orissa and includes his relatives and defendants.
Thus, the definition of the word "Ruler" is an inclusive definition and takes within its sweep the re latives of the Ruler and his dependents, with the result that private lands held by such relatives or dependents by virtue of the grants made by the ruling Prince or otherwise come within the mischief of the operative provisions of the Act.
Section 2(i) provides that all other expressions used and not defined in the Act shall have the same meaning as are respectively assigned to them under the tenancy laws in force in the concerned areas.
Section 3 contains the main operative provision and it lays down that notwith 134 159 S.C. 20 306 standing anything contained in any other law, custom, con tract or agreement to the contrary, the private lands field by a Ruler shall, with effect from the date of commencement of this Act, be liable to assessment and levy of rent as provided in the Act.
Thus, the effect of this provision is that private lands held by Rulers which till then were not liable to pay rent or assessment, were made liable to pay the same.
In other words the exemption from the payment of assessment or rent which the private lands of Rulers enjoyed till then ceased to be operative, and the said lands were treated like other lands in the State liable to pay assessment and rent.
Section 4 provides for the appointment of Revenue Officers, and sections 5 and 6 deal with the classification of lands and prescribe the maximum rates of rent, and the procedure in determining the rent respectively.
Under section 5, the lands have to be classified as irrigated wet land, rainfed wet land, and dry land; this section provides that subject to the provisions of section 6, the rates at which the fair and equitable rent shall be assessed with respect to the said three categories of land shall not exceed the amount as may be prescribed from time to time by the State Government.
The proviso to section 5 deals with the special category of cases where the tenants of the Ruler have already acquired rights of occupancy, and lays down that the rent payable by the Ruler in respect of such lands shall be such proportion of the rent received by him from the tenants as may be prescribed.
Under section 6, the considerations which have to be borne in mind in determining the rates of fair and equitable rent are specified by clauses (a) to (e), viz., the nature of the soil and general productivity of such land; the class under which the land is assessable; market value of the land; the prevailing rates of rent obtaining for similar lands in the neighbourhood; and such other matters relating thereto as may be prescribed.
It is thus clear that whereas section 5 requires the classification of the Ruler 's private lands to be made and provides for the prescription of the maximum of the rent which may be levied in respect of them, section 6 indicates the factors which have to be borne in mind in determining the rates of fair and equitable rent.
Clause (e) 307 shows that in addition to the factors mentioned in clauses (a) to (d), other matters may also be specified by the Rules.
The rest of the sections deal with matters relating to the levy and recovery of assessment with which we are not concerned in the present petitions.
The first contention which has been raised before us by the petitioners is that the provisions contained in sections 5 and 6 are invalid inasmuch as they contravene article 14 of the Constitution.
It is convenient to refer to some facts set out in W.P. No. 79/1963 in support of this argument.
We have already noticed that under section 6 certain considerations which the Act considers to be relevant have been prescribed, and so, the Revenue Officer has to bear those considerations in mind in determining the fair and equitable rent in respect of a given land.
W.P. No. 79/1963 points out that as a result of the consideration of the relevant factors mentioned in section 6, the rates fixed by the preliminary pattas in respect of the petitioner 's lands are in every case higher than the rates of rent which are in operation in res pect of the Revisional Settlement Khatian.
Basing them selves on the fact that in the calculation of the rent made by the Revenue Officers in respect of the private lands of Rulers they have arrived at a figure of rent which is gene rally higher than the rent which would be determined in case the rates current under the Settlement prevailing in respect of the other lands were applied, the petitioners contend that in their operation the relevant provisions of the Act have introduced an illegal discrimination as between their lands and the other lands liable to assessment of rent in the State of Orissa.
It is also urged in support of this argument that it would not be a valid consideration for levying higher assessment in respect of the private lands of Ruler that they were not required to pay assessment until the Act was passed.
The legislature may in its authority make the private lands of Rulers liable to assessment of rent, but when these lands are brought within the class of assessable lands, they should be treated in the same way as the other assessable lands are treated in Orissa.
That, briefly stated, is the contention on which the validity of the Act is challenged under article 14.
Prima facie, there is 308 some force in this contention.
But, on the whole we are not satisfied that the plea thus raised by the petitioners can be said to displace and rebut the initial presumption of constitutionality in favour of the impugned statute.
In dealing with the question raised before us, it is neces sary to bear in mind the fact that in regard to other assessable lands, a survey settlement which had already been made was in operation and was expected to continue in opera tion for a certain specified period; usually, when a settle ment has been made and assessment levied in pursuance of it, it cannot be revised merely by an executive order during the stipulated period, though, of course, the legislature can, if it so desires, make a law prescribing for a fresh assess ment even during the said specified period.
But, in the present case, the legislature appears to have taken the view that it was not necessary or expedient to introduce a fresh settlement in regard to all the other assessable lands, and so, it has passed the present statute only in regard to the private lands of Rulers.
That is one relevant and historical fact which cannot be ignored.
Proceeding to deal with the private lands of Rulers on this basis, the legislature had to prescribe the method of determining the rent payable by the said lands; and the re levant factors specified by section 6 appear to be just and substantially similar to the considerations which are generally taken into account at the time of survey settlement for determining the proper revenue assessment on ryotwari lands.
There has been some argument at the Bar before us as to whether the market value of the land which has been prescribed as a relevant consideration by section 6 was also treated as relevant on the occasion of the earlier settlement.
No material has, however, been placed before us in that behalf, and so, it is not possible to decide whether this consideration was taken into account on the earlier occasion or not, and if it was not, what the effect of the said circumstance would be on the validity of the impugned statute.
Having regard to the relevant factors prescribed by section 6, it would, however, not be unreasonable to take the view that fair and equitable tests have been laid down for determin 309 ing the rent which should be assessed in respect of the pri vate lands of the Rulers, and in the absence of any proof that there has been a material departure in that behalf, we find it difficult to uphold the plea that section 6 can be attacked on the ground that it has contravened article 14 of the Constitution.
The problem posed by the requirement to levy assessment on these private lands had to be dealt with by the legislature on an ad hoc basis.
The settlement of rent and assessment introduced by the Act had been made applicable to these lands for the first time, and so, strictly speaking, these lands cannot be treated as comparable in every respect with the lands which were governed by the rates prescribed under the previous settlement and that may help to meet the argument that the impugned Act contravenes article 14.
If the two categories of lands do not constitute similar lands in all particulars, no valid complaint can.
be made on the ground that there has been discrimination as between them.
That is another aspect which may be relevant.
There is yet another factor which may be mentioned in this connection.
It appears that in 1959, the Orissa Legislature has passed an Act, No. 3 of 1959 with a view to consolidate and amend the laws relating to survey, record of rights and settlement operations in the State of Orissa, and so, it appears that after the settlement operations are duly conducted and completed under the relevant provisions of this latter Act, assessment in regard to all the assessable lands, including the private lands with which we are con cerned in the present proceedings would be made on the basis prescribed by it.
The operation of sections 3, 5 and 6 of the impugned Act is, therefore, limited to the period between June, 1958 when the Act came into force and the date when the assessment determined under the provisions of the subsequent Act actually come into operation in respect of all the lands.
That is another factor which has to be considered in dealing with the question about the validity of the impugned Act.
The allegations made by the petitioners, in challenging the validity of the Act are somewhat vague and the mate 31O rials placed by them in support of their challenge are in sufficient, inadequate and unsatisfactory.
The reply made by the State is also not very helpful or satisfactory.
It is precisely where a challenge to the validity of a statute is made by a party under Article 14 and he fails to adduce satisfactory evidence in support of his challenge that the task of the Court to decide the issue becomes very difficult.
In considering the validity of a statute under article 14, we cannot ignore the well established principle that the legislature can make class legislation, provided the classification on which it purports to be based is rational and has a reasonable nexus with the object intended to be achieved by it, and so, on the failure of the party to show that the said classification is irrational, or has no nexus with the object intended to be achieved by the impugned Act, the initial presumption of constitutionality would help the State to urge that the failure of the party challenging the validity to rebut the initial presumption goes against his claim that the Act is invalid.
In all cases where the material adduced before the Court in matters relating to article 14 is unsatisfactory, the Court may have to allow the State to lean on the doctrine of initial presumption of constitutionality and that is precisely what has happened in these cases.
On the whole therefore we must hold that the petitioners have failed to show that the impugned Act contravenes article 14 of the Constitution.
it is then argued that the Act is invalid because the definition of the expression "Ruler" is inconsistent with the definition of the said word prescribed by article 366(22) of the Constitution.
article 366(22) defines a "Ruler" in relation to an Indian State as meaning the Prince, Chief, or other person by whom any such covenant or agreement as is referred to in clause (1) of article 291 was entered into and who for the time being is recognised by the President as the Ruler of the State, and includes any person who for the time being is recognised by the President as the successor of such Ruler.
There is no doubt that the definition of the word " Ruler" prescribed by section 2(h) of the Act is wider than that prescribed by article 366(22).
The dependents of the Ruler and his relatives are not included in the latter defini 311 tion, though they are expressly included in the former.
But it must be remembered that the definitions prescribed by article 366 are intended for the purpose of interpreting the articles in the Constitution itself, unless the context otherwise requires, and so, the argument that the definition of the word "Ruler" prescribed by the Act is inconsistent with the definition prescribed by article 366(22), has really no substance or meaning.
Besides, it is fallacious to assume that the Act has made any provision in respect of Rulers as such; what the Act has purported to do is to authorise the levy of assessment and rent in respect of lands situated in Orissa; these lands are the private lands of the Rulers as defined by section 2 (h), and so, there is no doubt that the whole object of defining the word "Ruler" is to specify and describe the lands in respect of which the operative provisions of the Act would come into play.
The subject matter of the levy consists of the private lands and the compendious way adopted by the legislature in describing the said lands is that they are the private lands of the Rulers.
It is in that connection that the word "Ruler" has been broadly defined in an inclusive manner.
If the legislature had said that the private lands of the Rulers as well as the private lands of the dependents and relatives of Rulers were liable to the levy permitted under section 3, the petitioners would not have been able to raise any objection because, then, it would have been unnecessary to define the word "Ruler" in a comprehensive.
Once it is conceded, as it must be, that the Orissa Legislature was competent to pass the Act under Entry 18 of List II of the Seventh Schedule, it is idle to suggest that the method adopted by the Act in describing the lands which are made liable to pay assessment, introduces any infirmity in the Art itself.
Therefore, we are satisfied that the contention that the definition of the word "Ruler" is inconsistent with article 366(22) and that makes the whole Act void, is without any substance.
The third argument which was faintly urged before us is that the Act contravenes the provisions of article 31 of the Constitution.
This argument is wholly misconceived.
article 31(1) deals with the deprivation of property save by autho rity of law, and cannot obviously be invoked against any 312 of the provisions of the Act; and article 31(2) deals with compulsory acquisition or requisition which also is entirely inapplicable to the present Act.
What the Act has purported to do is to authorise the levy of assessment in respect of lands which till then had been exempted from the said levy, and as article 31(5)(b)(i) provides nothing contained in clause (2) shall affect the provisions of any law which the State may make for the purpose of imposing or levying any tax or penalty.
If the Orissa Legislature has imposed a tax in the form of the assessment of the private lands of Rulers, clearly it has not purported either to deprive the Rulers of their property, or to acquire or requisition the said property; it is a simple measure authorising the levy of a tax in respect of agricultural lands and as such, it is entirely outside the purview of article 31.
It appears that in Pratap Kessari Deo vs The State of Orissa & Ors.(1) the validity of the Act was challenged before the Orissa High Court and the said High Court has repelled the challenge and upheld the validity of the Act.
In our opinion, the view taken by the Orissa High Court is right.
The result is.
the petitions fail and are dismissed with costs.
One set of hearing fees.
Petition dismissed.
| The appellant had issued notice to the respondents under section 34(1)( of the Income Tax Act, 1922 in respect of an escaped income of Rs. 47,595 for the assessment year 1944 45.
The case of the respondents was that the impugned notice was bad because the Income Tax Officer proceeded against the respondents without obtaining the necessary sanction of the Central Board of Revenue as required by cl.
(iii) of the proviso to section 34(1) of the Act.
The respondents filed a writ petition in the High Court challenging the notice issued under section 34(1) of the article The respondents succeeded before the High Court.
438 Held: (i) The sanction under cl.
(iii) of the proviso to section 34(1) is, however, necessary only where the notice in question is issued under cl.
(ii) of the proviso.
That is evidently what the legislature meant when it said "in any case failing under cl.
(ii)".
The words "in any case" used in cl.
(iii) only mean a case in which notice can be issued under cl.
Such a notice can be issued only when the escaped income is of one lakh of rupees and over.
Clause (iii) requires such sanction where the notice is issued under cl.
(ii) and when on a construction of cl.
(ii), no notice can be issued with respect to a class of escaped assessments, there can possibly be no requirement of the sanction of the Central Board of Revenue.
If a notice is issued by virtue of some other provision sub as the second proviso to sub section
(3) of section 34, it would be a notice "in any other case" referred to in cl.
(iii) of the proviso to sub section (1) of section 34 and in such a case the sanction which is required is only that of the Commissioner.
Such a sanction was obtained in this case and therefore, the notice cannot be said to be bad because the sanction of the Central Board of Revenue had not been obtained.
In the present case the income which has escaped assessment is below one lakh of rupees and more than eight years have elapsed since the assessment year in respect of which the income is alleged to have escaped assessment.
Clearly, therefore, no notice could issue under cl.
(ii) The High Court erred in holding that the provisions of the second proviso to section 34(3) would not apply to a case where the escaped assessment is of an amount less than a lakh of rupees and more than eight years have elapsed.
Apparently, the High Court has overlooked the fact that the second proviso to sub section
(3) of section 34 was amended first by Act 25 of 1953 and then by Act.
18 of 1956.
The amendment of 1956 would govern the whole of section 34(1) and would consequently include even an escaped assessment with respect to which limitation is provided in cl.
(ii) of the first proviso to section 34(1).
The result would be the same even if the case fell to be governed by the Amending Act of 1953, though not by that of the Amending Act of 1956.
|
ition No. 1009 of 1979.
Under Article 32 of the Constitution.
Dr. Y. section Chitale and Mukul Mudgal for the Petitioner.
Soli 1.
Sorabjee, Solicitor General of India, and R. N. Sachthey for the Respondent.
562 The Judgment of V. R. Krishna Iyer and O. Chinnappa Reddy, JJ. was delivered by Krishna Iyer, J. R. section Pathak, J. gave a separate opinion.
KRISHNA IYER, J. This, writ petition originated, epistolary fashion in a letter by a prisoner, Batra, to a Judge of this ' Court (one of us), complaining of a brutal assault by a Head Warder on another prisoner, Prem Chand.
Forms were forsaken since freedom was at stake and the letter was posted on the Bench to be metamorphosed into a habeas proceeding and was judicially navigated with electric creativity, thanks to the humanist scholarship of Dr. Y. section Chitale as amicus Curiae and the erudite passion for affirmative court action of Shri Soli Sorabjee, the learned Solicitor General.
Where the prison process is dehumanized, forensic help, undeflected by the negative crudities of the adversary system, makes us dare where we might have daunted.
The finest hour of justice comes when court and counsel constructively collaborate to fashion a relief in the individual case and fathom deeper to cure the institutional pathology which breeds wrongs and defies rights.
Here, the individual is a prisoner whose anus was allegedly pierced with a warder 's baton and the institution is the Tihar Prison, right in the capital of the country and under the nose of the Home Ministry.
The Perspective This case is revelatory of several sins in this central penitentiary. 'Something is rotten in the State of Denmark ! ' The constitutionaI imperative which informs our perspective in this habeas corpus proceeding must first be set out.
The rule of law meets with its Waterloo when the State 's minions become law breakers and so the court, as the sentinel of the nation and the voice of the Constitution, runs down the violators with its writ and secures compliance with human rights even behind iron bars and by prison warders.
This case is at once a symptom, a symbol and a signpost vis a vis human rights in prison situations.
When prison trauma prevails, prison justice must invigilate and hence we broaden our 'habeas ' jurisdiction.
Jurisprudence cannot slumber when the very campuses of punitive justice witness torture.
The petitioner does not seek the release of the prisoner because a life sentence keeps him in confinement.
But the dynamic role of judicial remedies, after Batra 's case, imparts to the habeas corpus writ a versatile vitality and operational utility that makes the healing presence of the law live up to its reputation as bastion of liberty even within the secrecy of the hidden cell.
Blackstone called it 'the 563 great and efficacious writ in all manner of illegal confinement ' and Lord Deman proclaimed in 1839 that it had been 'for ages effectual to an extent never known in any other country '.
So long as Batra remains good law, judicial policing of Bastille practices will broaden to embrace the wider range of prison vices.
Dr. Chitale drew our attention to American legal literature disclosing the trend while Shri Soli Sorabjee for the Union of India, cited Corwin.
Corwin 's remarks on American constitutional law, referred to with approval in Batra, has our assent: Federal courts have intensified their oversight of State penal facilities, reflecting a heightened concern with the extent to which the ills that plague so called correctional institution overcrowding, understaffing unsanitary facilities, brutality, constant fear of violence, lack of adequate medical and mental health care, poor food service, intrusive correspondence restrictions, inhumane isolation, segregation, inadequate or non existent rehabilitative and/or educational programs, deficient recreational opportunities violate the Eighth Amendment ban on "cruel and unusual punishments.
" The essence of the matter is that in our era of human rights consciousness the habeas writ has functional plurality and the constitutional regard for human decency and dignity is tested by this capability.
We ideologically accept the words of Will Durant(a).
"It is time for all good men to come to the aid of their party, whose name is civilization." Likewise, we endorse, as part of our constitutional thought, what the British Government 's White Paper, titled 'People in Prison ', stated with telling effect: A society that believes in the worth of individual beings can have the quality of its belief judges, at least in part, by the quality of its prison and probate services and of the resources made available to them.
The learned Solicitor General brought this key note thought to our notice in the matchless diction of Sir Winston Churchill and briefly referred to in Batra in a speech seventy years ago: The mood and temper of the public in regard to the treatment of crime and criminals is one of the most unfailing tests of the civilisation of any country.
A calm dispassionate 564 recognition of the rights of the accused, and even of the convicted criminal, against the State a constant heart searching by all charged with the duty of punishment a desire and eagerness to rehabilitate in the world of industry those who have paid their due in the hard coinage of punishment: tireless efforts towards the discovery of curative and regenerative processes: unfailing faith that there is a treasure, if you can only find it in the heart of every man.
These are the symbols, which, in the treatment of crime and criminal, mark and measure the stored up strength of a nation, and are sign and proof of the living virtue in it.
Truly, this is a perspective setter and this is also the import of the Preamble and Art 21 as we will presently see.
We are satisfied that protection of the prisoner within his rights is part of the office of article `Prisons are built with stones of law ' and so it behoves the court to insist that, in the eye of law, prisoners are persons, not animals, and punish the deviant 'guardians ' of the prison system where they go berserk and defile the dignity of the human inmate.
Prison houses are part of Indian earth and the Indian Constitution cannot be held at bay by jail officials 'dressed ill a little, brief authority ', when Part III is invoked by a convict.
For when a prisoner is traumatized, the Constitution suffers a shock.
And when the Court takes cognizance of such violence and violation, it does, like the.
Hound of Heaven, 'But with unhurrying chase, And unperturbed pace, Deliberate speed, and Majestic instancy ' follow the official offender and frown down the outlaw adventure.
The Facts What are the facts which have triggered off this judicial action ? The resume of facts, foul on its face, reveals the legal issues raised, brings into focus the basics of prisoner 's rights and helps the court forge remedial directives so as to harmonize the expending habeas jurisprudence with dawning horizons of human rights and enlightened measures of prison discipline.
Batra, a convict under death sentence lodged in the Tihar Central Jail, came to know of a crime of torture practised upon another prisoner, Prem Chand, allegedly by a jail warder, Maggar Singh, as a means to extract money from the victim through his visiting relations.
Batra braved the consequences of Jail indignation 565 and brought the incident to the ken of the Court, resulting in these proceedings which, though not strictly traditional, are clearly in the nature of habeas corpus writs and therefore, within the wider sweep of article 32.
The court issued notice to the State and the concerned officials, appointed Dr. Y. section Chitale and Shri Mukul Mudgal as amicus, authorised them to visit the prison, meet the prisoner and see relevant documents and interview necessary witnesses so as to enable them to inform themselves about the surrounding circumstances and the cruel scenario of events.
Counsel on both sides have sensitized the issue of prison justice admirably and catalysed the cause of jail reforms effectively.
The democratic hope of the procession is its 'people 's orientation, not its lucrative potential nor its intellectual intricacies.
And service in the field of the handicapped human sectors, like prisoners, is a social justice contribution.
The enthusiastic work done in the case by the young lawyer, Shri Mudgal, assisting Dr. Chitale, deserves our commendation, even as the unreserved support rendered to the Court by Shri Sachthey is in the good tradition of the Bar.
Back to the facts.
One Central episode round which the skein of further facts is wound is beyond doubt, viz. that Prem Chand, the prisoner, sustained serious anal injury on or about August 26, 1979, because a rod was driven into that sore aperture to inflict inhuman torture.
The contemporaneous entry in the Jail Hospital register reads: One prisoner Prem Chand s/o Pyara Lal has developed tear of anus due to forced insertion of stick by someone,.
He require surgical repair and his bleeding has not stopped.
He is to go to Irwin Hospital casualty immediately.
Remarks of Superintendent.
Noted 27 August, 79 sd D.S. 1.2.35 p.m.
Sd/ (DR. KAPOOR) 2.00 p.m.
The prisoner 's later narration to the doctor in the Irwin Hospital corroborates the case.
The unsuccessful and unworthy attempts, presumably by overawing the prisoner and even the doctor, and other dubious devices.
which we do not now scan, to do away with this G. primary incriminating factor by offering incredible alternatives like rupture of the anus by a fall or self infliction or due to piles and sillier stories, only show how the subtle torture of the officials could extract falsehoods from the victim and even medical officers, exclupatory of the, official criminal whoever he be.
There are some traces of attempts to hush up tho crime where the higher officers have not been that innocent.
We are taken aback that the tardy police investigation, 566 with its lethargic pace and collusive ways, has hardly done credit to the Police Department 's integrity, a fact that the Government will take note of, without institutional sheltering of police delinquents.
Imagine a police investigator, hunting for contradictions obviously to absolve the head warder by interrogating Dr. Kapoor who had made an entry in the hospital register and told Dr. Chitale that the prisoner had an anal rupture which could not be self inflicted or caused by a fall and was so serious as to require immediate removal to Irwin Hospital, and making him say, long afterwards on 2 10 1979 by delaying the laying of the chargesheet thus: "A prisoner named Prem Chand s/o Prehlad was produced before me for treatment on the afternoon of Sunday 26th August, 1979.
He was brought by some warder.
He was complaining of bleeding from boils on the buttocks.
This was also told by the warder who brought him.
He was given the required treatment as he was kept under observation on his request.
Next day during the ward rounds when I examined him, he was having tears of anus and bleeding.
On inquiring he told that this has happened due to forced insertion of as stick into his anus.
Then he was referred to Irwin Hospital for further treatment.
V. K Kapoor 2 10 79" Can human nature be such rubber ? More than the probity of the investigation and the veracity of the doctor are at stake hope in human integrity without which human dignity will be the first casualty.
These observations are not impressionistic but we leave it at that since our primary purpose is to protect the person of the prisoner, not to prosecute the offender.
We do nat wish to prejudice that process.
Regrettably, the 'hearsay ' affidavit of the Under Secretary (Home), Delhi Administration, Shri Nathu Ram, blinks at the jail vices and merely dresses up the official version without so much as an inquisitorial audit of the lurid happenings in a premier correctional institution of the nation.
We deplore the indifferent affiants omnibus approval of every official conduct, whereas we should, instead have expected Government, which sincerely swears by human rights and whose political echelons in succession, over the decades, are not strangers to the actualities in these detention campuses to have put 567 aside the tendency to white wash every action with an official flavour.
A Where human rights are at stake prestige has no place.
After the prisoner was subjected to brutal hurt he was removed to the jail hospital and later to the Irwin Hospital but on his re transfer he was neglected; but we do not pursue the identity of the culprit or the crime or the treatment since a police investigation is under way.
Nevertheless, we cannot but remark that whatever damage might have been done upto now, . second investigation by a C.B.I. Officer is justified, if truth has been suppressed.
Dr. Chitale pointed out certain poignant facts such as the prisoner himself having been pressured into statements contrary to the case of anal infliction.
We do not make comments on them although we are unhappy at the way the business of investigation has been done.
Indeed, the potential for oblique mutual help between the police and the prison staff makes Jail offences by jail officials undetectable; and so, to obviate this possibility, the C.B.I. may well be entrusted, as a regular practice, with such cases The prisoner being a person, we cannot write him off.
The alleged offender, Warder Maggar Singh, may be left aside for a while.
There are other aspects of the torture which demand deeper probe and panacea.
The prisoner 's explanation for the anal rupture is stated to be an unfulfilled demand for money, allegedly a general practice.
this shows, if true, that bribery, at the point of barbarity, is a flourishing trade within the house of punishment itself.
How stern should the sentence be for such official criminals and how diligent should the State be to stamp out this wicked temptation ! If you want to end prison delinquencies you must abolish the motivations and opportunities.
The counter case, if we may so call it, of the Warder as disclosed in the Superintendents report, is equally disturbing, if true: On 25 8 79 evening life prisoner Prem Chand S/o Sh.
Prahlad was produced before the Deputy Superintendent for talking Mandrix tablets.
As he was in state of intoxication because of taking Mandrix tablets which he admitted before the Deputy Superintendent, he was kept in a cell pending orders of the Superintendent.
Central Jail.
He was taken to the jail hospital the next day i.e. On 26 8 79 on a report from the above said prisoner as he had pain in his anus and was bleeding.
The prisoner remained admitted into the jail hospital upto 27 8 79, 2 p.m. when the Dr. V. K. Kapoor, Medical officer, recommended for the shifting of this prisoner to the Irwin Hospital with the report mentioned in the petition.
568 The prisoner Prem Chand was shifted accordingly by Shri Bachan Singh, Assistant Superintendent on duty on 27 8 79.
The undersigned was informed that a case u/s 385 IPC had been registered against warder Maggar Singh in charge of the ward No. 11 i.e. 40 cells with the police station Janak puri and investigation had started in this case.
The result of the investigation is still awaited.
The prisoner was, however, received back in the jail on 29 8 79 on being discharged from the Irwin Hospital.
The prisoner, Prem Chand, was kept in a 'punishment cell ' which, according to counsel for the Administration, was not as bad as a solitary cell, although Dr. Chitale says that this was similar to the type of insulated confinement condemned as unconstitutional be this Court in Sunil Batra 's case (supra).
Coming to the competing version put for ward by the prison officials through the counter affidavit of the Under Secretary, the story, even if true, is strongly suggestive of a mafia culture prevasive in the Tihar prison.
A background of the ethos of the campus may be gleaned from portions of the report of the Superintendent, Central Jail, Tihar, made by him with reference to the alleged torture which is the subject matter of this case.
A number of prisoners in the Tihar Jail are habitual offenders, professional criminals who have been inmates of the jail from time to time.
A number of the said prisoners are rarely visited by their relatives due to the fact that they do not want to associate with such persons.
It has been seen that such prisoners are mainly visited by other professionals or habitual offenders in the field with whom they have had former associations.
It has been noticed these types of prisoners have been able to develop a certain report with some of the lower staff in the jail namely Head Warders, Warders etc.
and obtain certain facilities illegally including smuggling of numbers of items, i.e. drugs etc.
for their use.
It may also be submitted that to check smuggling of narcotic drugs against prisoners who indulge in such activities 30 cases of narcotic offences were get registered against the prisoners with the Janakpuri Police Station during this year.
That 95 prisoners were transferred from the jail to Haryana due to administrative reasons which include indiscipline and violation of jail regulations by them and otherwise derogatory behaviour during the last year.
This year also about 22 case have been recommended by Superintendent, Jail for transfer .
In para 568(b) and the note thereunder of the 569 Jail Manual, the habituals are required to be kept separate from the casual prisoners but due to non availability, of any other jail in Delhi they are being kept in Tihar Jail, which requires a lot or vigilance on the part of the jail officers.
(b) It may also be mentioned that due to paucity of accommodation, the said jail is occupied by double the number of prisoners than it is otherwise authorised.
To aggravate the malady, we have the fact that a substantial number of the prisoners are under trials who have to face their case in court and are presumably innocent until convicted.
By being sent to Tihar Jail they are, by contamination, made criminals a custodial perversity which violates the test of reasonableness in article 19 and of fairness in article 21.
How cruel would it be if one went to a hospital for a checkup and by being kept along with contagious cases came home with a new disease ! We sound the tocsin that prison reform is not a constitutional compulsion and its neglect may lead to drastic court action.
It would appear that around 300 persons are taken in and out daily between the prison and the courts.
And when there arc political agitations.
and consequent police arrests and remand to custody, the under trial strength swells in numbers.
Since many officers busy themselves with production of prisoners in court, the case of the Superintendent is that the other prisoners "try to do mischief, make thefts of other prisoners who go on work, smuggle things and even resort to assaults.
" To sum up, the Tihar prison is an arena of tension ,trauma, tantrums and crimes of violence, vulgarity and corruption.
And to cap it all, there occurs the contamination of pre trial accused with habituals and "injurious prisoners of international gang.
" The crowning piece is that the jail officials themselves are allegedly in league with the criminals in the cells.
That is, there is a large network of criminals, officials and non officials in the house of correction ! Drug racket, alcoholism, smuggling, violence, theft, unconstitutional punishment by way of solitary cellular life and transfers to other jails are not uncommon.
The Administration, if it does not immediately have the horrendous situation examined by an impartial, authoritative body, and sanitize the campus, complacent affidavits of Under Secretaries and glittering entries from dignitaries on their casual visits, cannot help.
While the Establishment sought to produce before the Court extracts from the Visitors ' Book to show that many impartial and distinguished persons had complimented the jail authorities on the way managed the prison, Dr. Chitale placed before us some internal evidence 570 from the materials on record, supplemented strongly by personal observations recorded while he was an internee in this very prison by Shri Kuldip Nayar, a responsible journalist with no apparent motive for mendacity nor inclination for subjectivity, in his book "In Jail".
There was nothing in the author 's view which money could not buy within the recesses of the prison campus.
Giving a factual narrative, Shri Nayar wrote:. . . . . . ' . . one could get as much money as one wanted from outside again at a price.
There was a money order and mail service that perhaps was more dependable than what the postal department could offer.
For instance, when a prisoner in my ward wanted two hundred rupees, he sent a note through a warder to his people in old Delhi and in less than twenty four hours he had the money.
He paid sixty six rupees as collecting charges thirty three per cent was the prescribed "money order charge." .
Dharma Teja, the shipping magnate who served his sentence in Tihar, for instance, has thousands of rupees delivered to him, we were told.
And if one could pay the jail functionaries one could have all the comforts one sought.
Teja had all the comforts he had an air cooler in his cell a radio cum record player set and even the facility of of using the phone.
Haridas Mundhra, a businessman who was convicted of fraud, was another rich man who spent some time in Tihar.
Not only did he have all.
the facilities, but he could also go out of the jail whenever he liked; at times he would be out for several days and travel even upto Calcutta.
All this of course, cost a lot of money.
An even richer prisoner was Ram Kishan Dalmia, he spent most of his jail term in hospital.
He was known for his generosity to jail authorities, and one doctor received a car as a gift.
But more than businessmen it was the smugglers jailed in Tihar who were lavish spenders.
Their food came from Moti Mahal and their whisky from Connaught Place.
They had not only wine but also women "Babuji, not tarts but real society girls," one warder said.
The women would be brought in when "the Sahiblog" went home for lunch, and their empty offices became "recreation rooms.
" Corruption in jail was so well organised and so systematic that everything, went like clockwork once the price had been paid.
Jail employees at almost all levels were involved, and everyone 's share was fixed.
There was never a dispute; there has to be the proverbial honour among thieves. ' 571 One wonders whether such an indictment made by an established A writer had inclined the Government at least to appoint an Inquiry Commission to acquaint itself with the criminal life style of correctional institutions.
The higher officials also have their finger in the pie, if Nayar were veracious: 'Perhaps the way almost everyone had his cut was most evident in our milk supply.
It came in bulk to the main gate (phatak) there, enough milk for the top officials was taken out of the cans, which were then topped up with water.
And as the cans moved to the wards, all those who handled hem appropriated their share, again topping up with water.
Even more shocking than the corruption was the ingenious "slave system" we found in the jail.
The slaves were buys between ten and eighteen employed as 'helpers", and there were scores of them.
They cooked, washed utensils, cleaned rooms, fetched water and did much back breaking labour to "help" the men who were paid to do these chores.
They would be woken up before 6 a.m. to prepare the morning tea and would be allowed to sleep around 10 p.m. after scrubbing the pots and pans they were herded into a ward which had no fan and no proper sanitary facilities, but was always well lit, with many bulbs on all night, to enable a sleepy warder to check at a glance that they were all there.
These boys were undertrial prisoners, many had been there for eight months and at least one had been there for two years.
They were taken from one court to another to be tried under one charge or another and kept in jail all the while.
The aim was to keep them in as long as possible, for without them the people employed to do the menial duties would have no time to relax.
one morning I was woken up by the sobbing of a boy, and found some other "helpers" trying to console him while a warder stood by quite unmoved.
I went up to him; his curly hair reminded me of Raju, my younger son.
The boy had been picked up the previous evening from Defence Colony in New Delhi, kept in a police lock up for the night and brought to jail in the morning. ' The crime of punishment is a new crime which the rule of law must reach at, but what is touching beyond tears, even if there be but a title of truth in the statement "In Jail," is about children being lapped 572 up and locked up for use as bonded labour in punitive houses of justice.
The modus operandi is sensitively set down by Kuldip Nayar: The warder explained that whenever the number of prisoners in jail went up, the police were asked to bring in boys to help with the chores.
For the past several days, the warder said, jail authorities had been pestering the police to get more helpers as the number of detenus had gone up.
The evening before, when the boy was buying paan (betel leaf) from a Defence Colony shop, the police had hauled him up as a vagabond; they were responding to the jail authorities ' appeal to book more helpers.
"This is nothing new, it has always been like this," the warder explained.
Several undertrial boys later related to me their tales of woe, how they were arrested on trumped up charges and how they were being held in detention on one pretext or another.
We may, at this stage, go in greater detail into the functional expansion of habeas corpus writs in the current milieu especially because counsel on both sides have compellingly contended for an authoritative pronouncement by this court in favour of a broader jurisdiction.
We have earlier noticed that this valuable writ is capable of multiple uses as developed in the American Jurisdiction.
Such is the view expressed by many legal writers.
In Harvard Civil Rights and Civil Liberties Law Review, the view has been expressed that beyond the conventional blinkers, courts have been to examine the manner in which an inmate is held or treated during the currency of his sentence.
Similar is the thinking expressed by other writers, R. J. Sherpa in "The Law of Habeas Corpus" (1976) Edn.
Juvenal, Satires in (1963).
In American Jurisprudence there is a pregnant observation: The writ is not and never has been a static, narrow formalistic remedy.
Its scope has grown to achieve its purpose the protection of individuals against erosion of the right to be free from wrongful restraints on their liberty.
573 Corpus Juris, 2d, Vol.
39, page 274, para 7 strikes a similar note, away from the traditional strain.
The courts in America have, through the decisional process, brought the rule of law into the prison system pushing back, protanto, the hands off doctrine.
In the leading case of Coffin vs Richard the Court of Appeal observed, delineating the ambit and uses of the writ of habeas corpus: The Government has the absolute right to hold prisoners for offences against it but it also has the correlative duty to protect them against assault or injury from any quarter .
while so held.
A prisoner is entitled to the writ of habeas corpus, when, though lawfully in custody, he is deprived of some right to which he is lawfully entitled even in his confinement, the deprivation of which serves to make his imprisonment more burdensome than the law allows or curtails his liberty to a greater extent than the law permits.
When a man possesses a substantial right, the court will be diligent in finding a way to protect it.
The fact that a person is legally in prison does not prevent the use of habeas corpus to protect his other inherent rights.
The judge is not limited to a simple remand or discharge of the prisoner 's civil rights be respected.
It is significant that the United State Supreme Court has even considered as suitable for habeas relief, censorship of prisoners ' mail and the ban on the use of law students to conduct interviews with prison inmates in matters of legal relief.
In Procunier vs Martinez these two questions fell for decision and the court exercised jurisdiction even in such an internal matter.
In Johnson vs Avery a disciplinary action was challenged by a prisoner through a writ of habeas corpus.
This indicates the extension of the nature of the writ in the American jurisdiction.
Incidentally and interestingly, there is reference to some States in the United States experimenting with programmes of allowing senior law students to service the penitentiaries.
At a later stage, when we concretise definite directives, we may have occasion to refer to the use of senior law students for rendering legal aid to prisoners; and so it is worthwhile extracting a passage from Johnson vs Avery (supra) with reference to the Kansas Law School Programme in Prisons at Leavenworth: The experience at Leavenworth has shown that there have been very few attacks upon the (prison) administra : 574 tion; that prospective frivolous litigation has been screened out and that where the law school felt the prisoner had a good cause of action relief was granted in a great percentage of cases.
A large part of the activity was disposing of long outstanding detainers lodged against the inmates.
In addition, the programme handles civil matters such as domestic relations problems and compensation claims.
Even where there has been no tangible success, the fact that the inmate had someone on the outside listen to him and analyse his problems had a most beneficial effect.
We think that these programmes have been beneficial not only to the inmates but to the students, the staff and the courts.
Incidentally, the presence of law students at the elbow of the prisoner has a preventive effect on ward and warden.
The content of our constitutional liberties being no less, the dynamics of habeas writs they developed help the judicial process here.
Indeed.
the full potential of articles 21, 19, 14, after Maneka Gandhi (supra), has been unfolded by this Court in Hoskot and Batra.
Today, human rights jurisprudence in India has a constitutional status and sweep, thanks to article 21 so that this Magna Carta may well toll the knell of human bondage beyond civilised limits.
The supplementary statement of the Superintendent of the Central Jail (partly quoted earlier) hair raising when we find that far from rehabilitation, intensification of criminality is happening there and the officials are part of this sub culture.
We, certainly do not wish to generalise but do mean to highlight the facts of life behind the high walls as demanding constitutional and administrative attention.
Homage to human rights, if it springs from the heart, calls for action.
Prisons, prison staff and prisoners all three are in need of reformation.
And this milieu apparently is not unique to Tihar but common to many penal institutions.
It is refreshing and heartening that the learned Solicitor General widened our vista and argued that this court, having been seized of the problem of prisoners ' fundamental freedoms and their traumatic abridgement, should give guide lines in this uncharted area, design procedures and device mechanisms which will go into effective action when the restricted yet real rights of prisoners are overtly or covertly invaded.
The jurisdiction of this court to remedy the violations of prisoners ' residuary rights was discussed at the bar, as also the package of plausible measures which may appropriately be issued to ensure the functional success of justice when rights are infringed by officials or fellow prisoners.
Both sides appreciated the gravity of the jail situation, the sensitivity of security considerations, the virginity of this 575 field of law and the necessity for normative rules and operative monitoring within the framework of judicial remedies.
This constructive stance of counsel unusual in litigative negativity, facilitated our resolution of the problems of jail justice, despite the touch of jurisprudential novelty and call to judicial creativity.
We must formulate the points argued before we proceed to state our reasoning and record our conclusions.
Has the court jurisdiction to consider prisoners ' grievance, not demanding release but, within the incarceratory circumstances, complaining of ill treatment and curtailment short of illegal detention? Yes.
We have answered it.
What are the broad contours of the fundamental rights, especially articles 14, 19 and 21 which belong to a detainee sentenced by Court? Here too, the ground has been covered.
What judicial remedies can be granted to prevent and punish their breach and to provide access to prison justice? 4.
What practicable prescriptions and proscriptions bearing on prison practices can be drawn up by the court consistently with the existing provisions of the and Rules bent to shape to con form to ? 5.
What prison reform perspectives and strategies should be adopted to strengthen, in the long run, the constitutional mandates and human rights imperatives? The canvas was spread wide by counsel and court and we deal with the arguments within the larger spread out of the case.
Rulings of this court have highlighted the fact that the framers of our Constitution have freed the powers under article 32 from the rigid restraints of the traditional English writs.
Flexible directives, even affirmative action moulded to grant relief may realistically be issued and fall within its fertile width.
The jurisdictional dimension is lucently laid down by Subba Rao, J. in Dwarkanath case: This article is couched in comprehensive phraseology and it ex facie confers a wide power on the High Courts to reach injustice wherever it is found.
The Constitution designedly used a wide language in describing the nature of the power, the purpose for which and the person or authority against whom it can be exercised.
It can issue writs in the nature of prerogative writs as understood in England; but the scope of those writs also is widened by the use of the 576 expression "nature" for the said expression does not equate the writs that can be issued in India with those in England, but only draws an analogy from them.
That apart, High Courts can also issue directions, orders or writs other than the prerogative writs.
It enables the High Courts to mould the reliefs to meet the peculiar and complicated requirements of this country.
Any attempt to equate the scope of the power of the High Court under article 226 of the Constitution with that of the English Courts to issue prerogative writs is to introduce the unnecessary procedural restrictions grown over the years in a comparatively small country like England with a unitary form of government into a vast country like India functioning under a federal structure.
Such a construction defeats the purpose of the article itself.
Where injustice, verging on inhumanity, emerges from hacking human rights guaranteed in Part III and the victim beseeches the Court to intervene and relieve, this court will be a functional futility as a constitutional instrumentality if its guns do not go into action until the wrong is righted.
The court is not a distant abstraction omnipotent in the books but an activist institution which is the cynosure of public hope.
We hold that the court can issue writs to meet the new challenges.
Lord Scarman 's similar admonition, in his English Law The New Dimensions, is an encouraging omen.
The objection, if any, is absolute because in a prison situation, a Constitution Bench of this Court (Batra and Sobraj) did imprison the powers of prison officials to put an under trial under iron fetters or confine in solitary cells convicts with death sentences under appeal.
Once jurisdiction is granted and we affirm in unmistakable terms that the court has, under article 32 and so too under article 226, a clear power and, therefore, a public duty to give relief to sentences in prison settings the next question is the jurisprudential backing for the play of that jurisdiction.
Here again, Batra has blazed the trial, and it binds.
Are prisoners persons? Yes, of course.
To answer in the negative is to convict the nation and the Constitution of dehumanization and to repudiate the world legal order, which now recognises rights of prisoners in the International Covenant of Prisoners ' Rights to which our country has signed assent.
In Batra 's case, this Court has rejected the hands off doctrine and it has been ruled that fundamental n lights do not flee the person as he enters the prison although they may suffer shrinkage necessitated by incarceration.
Our constitutional 577 culture has now crystalized in favour of prison justice and judicial jurisdiction.
The jurisdictional reach and range of this court 's writ to hold prison caprice and cruelty in constitutional leash is in contentable, but teasing intrusion into administrative discretion is legal anathema absent breaches of constitutional rights or prescribed procedures.
The U.S. Supreme Court, in like situations, has spoken firmly and 'humanistically, and these observations have the tacit approval of our Court in Batra 's case.
Justice Douglas put it thus.
Prisoners are still 'persons ' entitled to all constitutional rights unless their liberty has been constitutionally curtailed by procedures that satisfy all the requirements of due process.
Justice Marshal strongly seconded the view: I have previously stated my view that a prisoner does not shed his basic constitutional rights at the prison gate, and I fully support the court 's holding that the interest of inmates in freedom from imposition of serious discipline is a 'liberty ' entitled to due process protection.
We, therefore, affirm that where the rights of a prisoner, either under the Constitution or under other law, are violated the writ power of the court can and should run to his rescue.
There is a warrant for this vigil.
The court process casts the convict into the prison system and the deprivation of his freedom is not a blind penitentiary affliction but a belighted institutionalisation geared to a social good.
The court has a continuing responsibility to ensure that the constitutional purpose of the deprivation is not defeated by the prison administration.
In a few cases, this validation of judicial invigilation of prisoners ' condition has been voiced by this court and finally reinforced by the Constitution Bench in Batra (supra).
The Court need not adopt a "hands off" attitude in regard to the problem of prison administration.
It is all the more so because a convict is in prison under the order and direction of the court.
" Under the caption "Retention of Authority over Prisoner by Sentencing Judge" Krantz notes 578 As noted by Judge Lay in a Judicial Mandate, Trial Magazine (Nov Dec. 1971) at p. 15: It should be the responsibility of the court in imposing the sentence to set forth as it would in any equitable decree, the end to be achieved and the specifics necessary to achieve that purpose.
If then, we are to have accountability in the execution of the sentence, courts must make clear what is intended in the imposition of the sentence.
Every sentence should be couched in terms similar to a mandatory injunction.
In this manner, the penology system is to be held to account if the government does not faithfully execute the order.
In other words, the sentencing court should be required to retain jurisdiction to ensure that the prison system res ponds to the purposes of the sentence.
If it does not, the sentencing court could arguably have the authority to demand compliance with the sentence or even order the prisoner released for non compliance.
Whether inside prison or outside, a person shall not be deprived of his guaranteed freedom save by methods 'right, just and fair '.
Bhagwati J. in Maneka Gandhi observed.
The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non 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.
Hoskot applied the rule in Maneka Gandhi (supra) to a prison setting and held that "one component of fair procedure is natural justice".
Thus it is now clear law that a prisoner wears the armour of basic freedom even behind bars and that on breach thereof by lawless officials the law will respond to his distress signals through 'writ ' aid.
The Indian human has a constant companion the court armed with the Constitution.
The weapon is 'habeas ', the power is Part III and the projectile is Batra, 579 No iron curtain can be drawn between the prisoner and the Constitution.
It is, therefore, the court 's concern, implicit in the power to deprive the sentences of his personal liberty, to ensure that no more and no less than is warranted by the sentence happens.
If the prisoner breaks down because of mental torture, psychic pressure or physical R; infliction beyond the licit limits of lawful imprisonment the Prison Administration shall be liable for the excess.
On the contrary, if an influential convict is able to buy advantages and liberties to avoid or water down the deprivation implied in the.
sentence the Prison Establishment will be called to order For such adulteration or dilution of Court sentences by executive palliation, if unwarranted by law.
One of us, in Batra observed: Suffice it to say that, so long as judges are invigilators and enforcers of constitutionality and performance auditors of legality, and convicts serve terms in that grim microcosm called prison by the mandate of the courts, a continuing institutional responsibility vests in the system to monitor in the incarceratory process and prevent security 'excesses ' Jailors are bound by the rule of law and cannot inflict supplementary sentence under disguises or defeat the primary purposes of imprisonment.
The upshot of this discussion is but this.
The Court has power and responsibility to intervene and protect the prisoner against mayhem, crude or subtle, and may use habeas corpus for enforcing imprison humanism and forbiddance of harsher restraints and heavier severities than the sentence carries.
We hold these propositions to be self evident in our constitutional order and is supported by authority, if need be.
Therefore, we issue the writ to the Lt. Governor and the Superintendent of the Central Jail that the prisoner, Prem Chand, shall not be subjected to physical manhandling by any jail official, that the shameful and painful torture to which he has been subjected a blot on Government 's claim to protect human rights shall be ended and the wound on his person given proper medical care and treatment.
The Central Government will, we are sure, direct its Jail staff not show too pachydermic a disposition for a democratic government.
For example, specific guidelines before punishing a prisoner had been given in Batra 's case and yet the prisoner Prem Chand has been lodged in the punishment cell, which is almost the same as a solitary cell, with cavalier disregard for procedural safeguards.
Merely to plead that many prisoners are 'habituals ' is no ground for habitual 580 violation of law by officials.
We direct that Prem Chand be released from the punishment cell and shall not be subjected to such severity until fair procedure is complied with.
The chronic callousness of the Prison System to the humane demands of the Constitution, despite the fact that many ministers over many decades in many States have known the unbroken tradition of prison sub culture and despite prison diaries of national figures from Jawaharlal Nehru to Jay Prakash Narain, has made court and counsel benignly turn the judicial focus on the future so that further mischief may not be suffered in incarceration.
There is little doubt that barbarities like bar betters and hand cuffs were recklessly being practised either on account of ignorant unconscionableness or willful viciousness in several detention camps.
Many of the victims are poor, mute, illiterate, desperate and destitute and too distant from the law to be aware of their rights or ask for access to justice, especially when the running tension of the prison and the grisly potential for zoological reprisals stare them in the face.
So it is for the court to harken when humanity calls, without waiting for particular petitions.
Like class action, class remedies have pro bono value.
The court the learned Solicitor General underscored this constructive approach must not wait for a stray petition from some weeping inmate and give the little person a little relief in the little case but give the nation, its governments, prison establishments and correctional departments, needed guidance and also fill with hope the hearts of those who cherish human rights that the courts are, after all, sentinels on the qui vive.
Law is what law does and court, if anything, are constitutional in action.
Dr. Chitale, naturally, joined this moving demand.
We do think that there are many, drawn from the class of penury, who suffer more privations than their sentences justify.
Ralph Ellison 's picture of the American Black has relevance for the prisoner here: I am an invisible man.
I am a man of substance, of flesh and bone, fibre an liquids and I might even be said to possess a mind.
I am invisible, understand, simply because people refuse to see me .
When they approach me they see only my surroundings, themselves, or figments of their imagination indeed, everything and anything except me.
The invisibility to which I refer occurs because of a peculiar disposition of the eyes of those with whom I come in contact.
A matter of construction of their inner eyes, 581 those eyes with which they look through their physical eyes . 4 upon reality.
You wonder whether you are not simply a phantom in other people 's minds.
You ache with the need to convince yourself that you do exist in the real world, that you 're a part of all the sound and anguish, and you strike out with your fists, you curse and you swear to make them recognise you.
And, alas, it is seldom successful.
In a culture of Antyodaya, the court must rescue the weakest by preemptive guidance without driving parties to post facto litigation.
In law as in medicine, prevention is better than cure, a rule jurisprudents have not sufficiently developed, and so we accede to the request of counsel and proceed to discuss the normative side of prison justice.
C Before we begin this chapter we might as well set down what the learned Solicitor General stressed viz. that the detailed guidelines set out in the separate opinion in Batra 's case (page 488 to 493) are the same as are implicit in the judgment of Desai J. speaking for the other Judges and this position should be re emphasised by this court here so as to avoid misconception.
Desai J. has stated Justice Krishna Iyer has delivered an elaborate judgment which deals with important issues raised before us at great length and with great care and concern.
We have given a separate opinion, not because we differ with him on fundamentals, but because we thought it necessary to express our views on certain aspects of the questions canvassed before us Likewise, in the separate judgment, a similar statement is made: I am aware that a splendid condensation of the answers to the core questions has been presented by my learned brother Desai, J and I endorse the conclusion.
A close perusal shows that both the judgments in Batra 's case lay down the same rule and the elaborate guidelines in the first opinion are a necessary proliferation of the law expounded in the second judgment in the case.
We hold, agreeing with both counsel, that the detailed prescriptions in the separate opinion in sunil Batra (p. 488 to 493) is correct law and binds the penal institutions in the country.
We agree with these guidelines and express ourselves to that effect since the core question raised in the present case and the cardinal principles we have accepted lead to the same conclusions.
At the outset, we notice the widespread prevalence of legal illiteracy even among lawyers about the rights of prisoners.
Access to law postulates awareness of law and activist awareness of legal rights 582 in the condition for seeking court justice.
So the first need in the Juristic twilight is for the State to produce and update a handbook on Prison Justice, lucid, legible for the lay, accurate, comprehensive and, above all, practical in meeting the felt necessities and daily problems of prison life.
The Indian Bar has, as part of its judicare tryst as a special responsibility to assist the State in this behalf.
A useful handbook prepared by the American Civil Liberties Union was handed upto us by Dr. Chitale titled "The Rights of Prisoners".
Law in the books and in the courts is of no help unless it reaches the prisoner in under standable language and available form.
We, therefore, draw the .
attention of the State to the need to get ready Prisoner 's Handbook in the regional language and make them freely available to the in mates.
To know the law is the first step to be free from fear of unlaw.
Prisoners are peculiarly and doubly handicapped.
For one thing, most prisoners belong to the weaker segment, in poverty, literacy, social station and the like.
Secondly, the prison house is a walled off world which is incommunicado for the human world, with the result that the bonded inmates are invisible, their voices inaudible, their injustices unheeded.
So it is imperative, as implicit in article 21 that life or liberty shall not be kept in suspended animation or congealed into animal existence without the freshing flow of air, procedure. 'The meaning of 'life ' given by Field J., approved in Kharak Singh ' and Maneka Gandhi bears exception: Something more than mere animal existence.
The inhibition against its deprivation extended to all those limbs and faculties by which life is enjoyed.
The provision equally prohibits the mutilation of the body by the amputation of an arm.
Or leg, or the putting out of an eye, or the destruction of any other organ of the body through which the soul communicates with the outer world Therefore, inside prisons are persons and their personhood, if crippled by law keepers turning law breakers, shall be forbidden by the Writ of this Court from such wrong doing.
Fair procedure, in dealing with prisoners, therefor, calls for another dimensions of access to law provision, within easy reach, of the law which limits liberty to persons who are prevented from moving out of prison gates.
A handbook meets the logistics of the law in field.
Of course, the prison staff also suffer from the pathology of misinformation or non education about rights and limitations and this ignoratia juris 583 situation leads to insensitivity to human rights and a test in the hand book of prison law must be a minimum for recruitment.
The peril to prison rights is from the uninstructed personnel, apart from the anticultural ethos which permeates.
It behoves Government to insist on the professional requirement, for warders and wardens, of a hearty familiarity with the basics of Prison Law.
Rights jurisprudence is important but becomes an abstraction in the absence of remedial jurisprudence.
Law is not an omnipotence in the sky but a loaded gun which, when triggered by trained men with ballistic skill, strikes the offending bull 's eye.
We have made it clear . ' that no prisoner can be personally subjected to deprivations not necessitated by the fact of incarceration and the sentence of court.
All other freedoms belong to him to read and write, to exercise and recreation, to meditation and chant, to creative comforts like protection from extreme cold and heat, to freedom from indignities like compulsory nudity, forced sodomy and other unbearable vulgarity, to movement within the prison campus subject to requirements of discipline and security, to the minimal joys of self expression, to acquire skills and techniques and all other fundamental rights tailored to the limitations of imprisonment.
Chandrachud J, long ago, spelt out the position and we affirm it: "Convicts are not, by mere reason of the conviction, denuded of all the fundamental rights which they otherwise possess.
A compulsion under the authority of law, following upon a conviction, to live in a prison house entails by its own force the deprivation of fundamental freedoms like the right to move freely throughout the territory of India 11 or the right to 'practise ' a profession.
A man of profession would thus stand stripped of his right to hold consultations while serving out his sentence.
But the Constitution guarantees other freedoms like the right to acquire, hold and dispose of property for the exercise of which incarceration .
can be no impediment.
Likewise, even a convict is entitled G to the precious right guaranteed by Article 21 of the Constitution that he shall not be deprived of his life or personal liberty except according to procedure established by law.
" We think it proper to suggest that in our country of past colonial subjection and consequent trepidation in life, publicity officially is 584 necessary for rights to be appreciated even by the beneficiaries.
Therefore, large notice boards displaying the rights and responsibilities on prisoners may be hung up in prominent places within the prison in the language of the people.
We are dealing with the mechanics of bringing the law within the wakeful ken of the affected persons.
61 of the , simplied imaginatively leads to the same result.
That section reads: "Copies of rules, under sections 59 and 60 so far as they affect the government of prisons, shall be exhibited, both in English and in the Vernacular, in some place to which all persons employed within a prison have access.
" We think it right to hold that copies of the Prison Manual shall be kept within ready reach of prisoners.
Darkness never does anyone any good and light never any harm.
Perhaps, the most important right of a prisoner is to the integrity of his physical person and mental personality.
This Court in Batra 's case has referred to the international wave of torture of prisoners found in an article entitled 'Minds Behind Bars '.
That heightens our anxiety to solve the issue of prisoners ' protection.
The problem of law, when it is called upon to defend persons hidden by the law, is to evolve a positive culture and higher consciousness and preventive mechanisms, sensitized strategies and humanist agencies which will bring healing balm to bleeding hearts.
Indeed, counsel on both sides carefully endeavoured to help the Court to evolve remedial processes and personnel within the framework of the and the parameters of the Constitution.
Inflictions may take many protean forms, apart from physical assaults.
Pushing the prisoner into a solitary cell, denial of a necessary amenity, and, more dreadful sometimes, transfer to a distant prison where visits or society of friends or relations may be snapped, allotment of degrading labour, assigning him to a desperate or tough gang and the like, may be punitive ineffect.
Every such affliction or abridgment is an infraction of liberty or life in its wider sense and cannot be sustained unless article 21 is satisfied.
There must be a corrective legal procedure, fair and reasonable and effective.
Such infraction will be arbitrary, under Article 14, if it is dependent on unguided discretion, unreasonable, under article 19 if it is irremediable and unappealable and unfair, under article 21 if it violates natural justice.
The string of guidelines in Batra set out in the first judgment, which we adopt, provides for a hearing at some stages, a review by a superior, and early judicial consideration so that the proceedings may not 585 hop from Caesar to Caesar.
We direct strict compliance with those A norms and institutional provisions for that purpose.
Likewise, no personal harm, whether by way of punishment or otherwise, shall be suffered by a prisoner without affording a preventive, or in special cases, post facto remedy before a impartial, competent, available agency.
R The Court is always ready to correct injustice but it is no practical proposition to drive every victim to move the court for a writ, knowing the actual hurdles and the prison realities.
True, technicalities and legal niceties are no impediment to the court entertaining even an informal communication as a proceeding for habeas corpus if the basic facts are found; still, the awe and distance of courts, the legalese and mystique, keep the institution unapproachable.
More realistic is to devise a method of taking the healing law to the injured victim.
That system is best where the remedy will rush to the injury on the slightest summons.
So, within the existing, dated legislation, new meanings must be read.
Of course, new legislation is the best solution, but when lawmakers take for too long for social patience to suffer, as in this very case of prison reform, courts have to make do with interpretation and carve on wood and sculpt on stone ready at hand and not wait for far away marble architecture.
Counsel rivetted their attention on this pragmatic engineering and jointly helped the court to constitutionalise the prescriptions.
By this legal energetics they desired the court to read into vintage provisions legal remedies.
Primari1y, the prison authority has the duty to given effect to the court sentence.
(See for e.g. SS. 15 and 16 of the Prisoners Act, 1900).
To give effect to the sentence means that it is illegal to exceed it and so it follows that a prison official who goes beyond more imprisonment or deprivation of locomotion and assaults or otherwise compels the doing of things not covered by the sentence acts in violation of article 19.
Punishments of rigorous imprisonment oblige the inmates to do hard labour, not harsh labour and so a, vindictive officer victimising a prisoner by forcing on him particularly harsh and degrading jobs, violates the law 's mandate.
For example, a prisoner, if forced to carry night soil, may seek a habeas writ. 'Hard labour ' in section 53 has to receive a humane meaning.
A girl student or a male weakling sentenced to rigorous imprisonment may not be forced to break stones for nine hours a day.
The prisoner cannot demand soft jobs but may reasonably be assigned congenial jobs.
Sense and sympathy are not enemies of penal asylum.
586 Section 27 (2) and (3) of the states: 27.
The requisitings of this Act with respect to the separations of prisoners are as follows: (1) xx xx (2) in a prison where male prisoners under the are of twenty one arc confined, means shall be provided for separating them altogether from the other prisoners and for separating those of them who have arrived at the age of puberty from those who have not.
(3) unconvicted criminal prisoners shall be kept apart from convicted criminal prisoners; and The materials we have referred to earlier indicate slurring over this rule and its violation must be visited with judicial correction and punishment of the jail staff.
Sex excesses and exploitative labour are the vices adolescents are subjected to by adults.
The young inmates must be separated and freed from exploitation by adults.
If Kuldip Nayar is right this rule is in cold storage.
lt is inhuman and unreasonable to throw young boys to the sex starved adult prisoners or to run menial jobs for the affluent or tough prisoners.
article 19 then intervenes and shields.
Section 29 and connected rules relating to solitary confinement have been covered by Batra 's case.
But Prem Chand, in this very case, has been sent to a 'solitary ' or 'punishment ' cell without heeding the rule in Batra 's regarding impost of punitive solitary confinement.
We cannot agree that the cell is not 'solitary ' and wonder what sadistic delight is derived by the warders and wardens by SUCH cruelty.
Any harsh isolation from society by long, lonely, cellular detention is penal and so must be inflicted only consistently with fair procedure.
The learned Solicitor General mentioned that some prisoners, for their own safety, may desire segregation.
In such cases, written consent and immediate report to higher authority are the least, if abuse is to be tabooed.
Visit to prisoners by family and friends are a solace in insulation; and only a dehumanised system can derive vicarious delight in depriving prison inmates of this humane amenity.
Subject, of course, to search and discipline and other security criteria, the right to society of fellow men, parents and other family members cannot be denied in the light of article 19 and its sweep.
Moreover the whole habilitative purpose of sentencing is to soften, not to harden, and this will be promo 587 ted by more such meetings.
A sullen, forlorn prisoner is a dangerous criminal in the making and the prison is the factory! Sheldon Krantz rightly remarks: In 1973, the National Advisory Commission argued that prisoners should have a "right" to visitation.
Task Force Report, Corrections (1973) at 66.
It also argued that ' correctional officials should not merely tolerate visiting but should encourage it, particularly by families.
Although the Commission recognised that regulations were necessary to contend with space problems and with security concerns, it proposed that priority be given to making visiting areas pleasant and unobtrusive.
It also urged that corrections officials should not eavesdrop on conversations or otherwise interfere with the participants ' privacy.
Thus, although there may be current limitations on the possible use of the Constitution on visitation by family and friends, public policy should dictate substantial improvements in this area, in any event.
We see no reason why the right to be visited under reasonable restrictions, should not claim current constitutional status.
We hold, t subject to considerations of security and discipline, that liberal visits by family members, close friends and legitimate callers, are part of the r prisoners ' kit of rights and shall be respected.
Parole, again, is a subject which is as yet unsatisfactory and arbitrary but we are not called upon to explore that constitutional area and defer it.
Likewise, to fetter prisoners in iron is an inhumanity unjustified save where safe custody is otherwise impossible.
The routine resort to handcuffs and irons bespeaks a barbarity hostile to our goal of human dignity and social justice.
And yet this unconstitutionally is heartlessly popular in many penitentiaries so much so a penitent law must proscribe its use in any but the gravest situation.
These rights and safeguards need a machinery.
The far internal invigilation and independent oversight cannot be overemphasised.
Prisoners ' rights and prison wrongs are a challenge to remedial creativity.
Krantz, in his book, (supra) notes: To respond to the need for effective grievance procedures will probably require both the ceation of internal pro 588 grams (formal complaint procedures) and programs involving "outsiders" (ombudsmen, citizens investigative committees, mediators, etc).
So, apart from judicial review for prisoners ' rights and conditions of confinement, we have to fabricate instant administrative grievance procedures.
Indeed, a new chapter of offences carrying severe punishments when prison officials become delinquents is an urgent item on the agenda of prison reform; and lodging of complaints of such offences together with investigation and trial by independent agencies must also find a place in such a scheme.
We are dealing with a morbid world where sun and light are banished and crime has neurotic dimensions.
Special situations need special solutions.
We reach the most critical phase of counsel 's submissions viz., the legal fabrication and engineering of a remedial machinery within the fearless reach of the weakest of victims and worked with independence, accessibility and power to review and punish.
Prison power, absent judicial watch tower, may tend towards torture.
The and Rules need revision if a constitutionally and culturally congruous code is to be fashioned.
The model jail manual, we are unhappy to say and concur in this view with the learned Solicitor General, is far from a model and is, perhaps, a product of prison officials insufficiently instructed in the imperatives of the Constitution and unawakened to the new hues of human rights.
We accept, for the nonce, the suggestion of the Solicitor General that within the existing statutory framework the requirements of constitutionalism nay be read.
He heavily relies on the need for a judicial agency whose presence, direct or by delegate, within the prison walls will deal with grievances.
For this purpose, he relies on the Board of Visitors, their powers and duties, as a functional substitute for a Prison ombudsman.
A controllerate is the desideratum for in situ reception and redressal or grievances.
After all, the daily happenings, when they hurt harshly, have to be arrested forthwith, especially when it is the prison guards and the head warders who brush with the prison inmates.
Their behaviour often causes friction and fear but when their doings are impeached, the institutional defence mechanism tends to protect them from top to bottom.
So much so, injustice escapes punishment.
In this context it is apt to quote David Rudovsky: 589 The present system puts absolute discretion and day to day power over every aspect of a prisoner 's life in their hands.
It is this part of prison life which causes the deepest resentment among prisoners for, to a large extent, the manner in which an inmate is treated by the guards determines the severity of conditions he will have to endure.
It is a doub1e irony that the lower the level of authority in prison (from warden on down to guard) the greater tho discretion that is vested in the prison official and the less willing the courts are to review their decisions. 'Thus, whether it be a request for medical treatment, the right to go to the yard of prison library, or the potentially more serious matter of prison discipline and punishment, the guard of the block holds ultimate power over the prisoner.
Complete discretion in the context of prison life where no remedies exist to correct it, can be catastrophic, Judge Sobeloff has put it bluntly: In fact, prison guards may be more vulnerable to the corrupting influence of unchecked authority than most people.
It is well known that prisons are operated on minimum budgets and that poor salaries and working conditions make it difficult to attract high calibre personnel.
Moreover, the "training" of the officers in dealing with obstreperous prisoners is but a euphemism in most states.
George A. Ellis quotes a prisoner 's letter: You cannot rehabilitate a man through brutality and disrespect.
If you treat a man like an animal, then you must expect him to act like one.
For every action, there is a reaction.
And in order for an inmate, to act like a human being you must trust him as such.
You can 't spit in his face and expect him to smile and say thank you.
The institution and composition of the Board of Visitors comes in handy and has statutory sanction.
The visitatiorial power is wide the panel of visitors includes judicial officers and such situation can be pressed into service legally to fulfil the constitutional needs.
Para 47 read with para 53 A sets out the structure of the Board Para 47(b) to (d) includes District & Sessions Judges, District Magistrates and Sub Divisional Magistrates among the members.
The functions of visitors are enumerated in para 53, and 53 B and they include (a) 590 inspect the barracks, cells, wards workshed and other buildings of the jail generally and the cooked food; (b) ascertain whether considerations of health, cleanliness, and security are.
attended to, whether proper management and discipline are maintained in every respect, and whether any prisoner is illegally detained, or is detained for an undue length of time, while awaiting trial; (c) examine jail registers and records; (d) hear, attend to all representations and petitions made, by or on behalf of prisoners; and (e) direct, if deemed advisable, that any such representation or petitions be forwarded to Government.
In the sensitive area of prison justice, the judicial members have special responsibilities and they must act as wholly independent overseers and not as ceremonial panelists.
The judges are guardians of prisoners ' rights because they have a duty to secure the execution of the sentences without excesses and to sustain the personal liberties of prisoners without violence on or violation of the inmates ' personality.
Moreover, when a wrong is done inside jail the judicial visitor is virtually a peripatetic tribunal and sentinel, at once intramural and extra mural, observer, receiver and adjudicator of grievance.
What then.
are prisoner Prem Chands ' rights, in the specific set t ng of this case, where the complaint is that a jail warder, for pernicious purposes, inflicted physical torture ? The Punjab Prison Manual clearly lays down the duties of District Magistrates with reference to Central Jails.
Para 41 (l) and (3) read thus: 41.
(l) It shall be the duty of the Magistrate of the district from time to time to visit and inspect jails situate within the limits of his district and to satisfy himself that the provisions of the , and of all rules, regulations, directions and orders made or issued thereunder applicable to such jail, are duly observed and enforced.
xx xx xx (3) A record of the result of each visit and inspection made, shall be entered in a register to be maintained by the Superintendent for the purpose.
Para 42 is also relevant: 42.
In the absence of the Magistrate of the district from headquarters, or in the event of that officer being at any time unable from any cause to visit the jail in the manner in these rules prescribed in that behalf, he shall depute a Magistrate 591 subordinate to him who is available for the duty, to visit and A inspect the jail on his behalf.
Any officer so deputed may, subject to the control of the Magistrate of the district.
exercise all or any of the powers by the , or these rules, conferred upon the Magistrate of the district.
Paragraph 44 clothes the District Magistrate with powers and makes his orders liable to be obeyed.
(1) The orders passed under sub section (2) of section l of the , should, except in emergent cases in which immediate action is, in the opinion of such Magistrate necessary, be so expressed that the Superintendent may have time to refer (if he thinks necessary) to the Inspector General before taking action thereon.
(2) All orders issued by the Magistrate of the district shall, if expressed in terms requiring immediate compliance, be forthwith obeyed and a report made, as prescribed in the said sub section, to the Inspector General.
D We understand these provision to cover the ground of reception of grievance from prisoners and issuance of orders thereon after prompt enquiry.
The District Magistrate must remember that in this capacity he is a judicial officer and not an executive head and must function as such independently of the prison executive.
To make prisoners ' rights in correctional institutions viable, we direct the District Magistrate concerned to inspect the jails in his district once every week receive complaints from individual prisoners and enquire into them immediately.
If he is too preoccupied with urgent work, para graph 42 enables him to depute a magistrate subordinate to him to visit and inspect the jail.
What is important is that he should meet the prisoners separately if they have grievances.
The presence of warders or officials will be inhibitive and must be avoided.
He must ensure that, his enquiry is confidential although subject to natural justice and does not lead to reprisals by jail officials.
The rule speaks of the record of the result of each visit and inspection.
This empowers him to enquire and pass orders.
All orders issued by him shall be immediately complied with since obedience is obligated by para 44(2).
In the event of non compliance he should immediately inform Government about such disobedience and advise the prisoner to forward his complaint to the High Court under article 226 together with a copy of his own report to help the High Court exercise its habeas corpus power.
Indeed, it will be practical, as suggested by the learned Solicitor General, if the District Magistrate keeps a grievance box in each 592 ward to which free access shall be afforded to every inmate.
It should be kept locked and sealed by him and on his periodical visit, he alone, or his surrogate, should open the box, find out the grievances, investigate their merits and take remedial action, it justified.
Chapter V of the Manual deals with visitors who arc an important component of jail management.
Para 47 specially mentions District & Sessions Judges, District Magistrates, Sub Divisional Magistrates and Superintendent of Police as members of the Board of Visitors.
In fact, Sessions Judges arc required to visit the jails periodically the District Magistrates and Sub Divisional Magistrates and magistrates subordinate to them and others appointed by them in this behalf are to visit jails in their jurisdiction once a week under the existing Rule.
We direct, in implementation of the constitutional obligation we have already discussed at length to safeguard prisoners ' fundamental rights, that the Sessions Judges and District Magistrates or other subordinates nominated by them shall visit jails once a week in their visitorial functions.
Para 49 has strategic significance and may be reproduced: 49.
(1) Any official visitor may examine all or any of the books, papers and records of any department of, and may interview any prisoner confined in the jail.
(2) It shall be the duty of every official visitor to satisfy himself that the provisions of the , and of the rules, regulations, orders and directions made or issued J thereunder, are duly observed, and to hear and bring to notice any complaint or representation made to him by any prisoner.
We understand this provision to mean that the Sessions Judge, District Magistrate or their nominees shall hear complaints, examine all documents, take evidence, interview prisoners and check to see if there is deviance, disobedience, delinquency or the like which infringes upon the rights of prisoners.
They have a duty "to hear and bring to notice any complaint or representation made to him by any prisoner".
Nothing clearer is needed to empower these judicial officers to investigate and adjudicate upon grievances.
We direct the Sessions Judges concerned, under his lock and seal, to keep a requisite number of grievance boxes in the prison and give necessary directions to The Superintendent to see that free access is afforded to put in complaints of encroachments, injuries or torture by any prisoner, where he needs remedial action.
Such boxes shall hot be tampered with by any one 593 and shall be opened only under the authority of the Sessions Judge.
We need hardly emphasise the utmost vigilance and authority that the Sessions Judge must sensitively exercise in this situation since prisoner 's personal liberty depends, in this undetectable campus upon his awareness, activism, adjudication and enforcement.
Constitutional rights shall not be emasculated by the insouciance of judicial officers.
The prison authorities shall not, in any manner, obstruct or noncooperate with reception or enquiry into the complaints otherwise, prompt punitive action must follow the High Court or the Supreme Court must be apprised of the grievance so that habeas corpus may issue after due hearing.
Para 53 is important in this context and we reproduce it below: 53.
All visitors shall be afforded every facility for observing the state of the jail, and the management thereof, and shall be allowed access under proper regulations, to all parts of the jail and to every prisoner confined therein.
Every visitor should have the power to call for and inspects any book or other record in the jail unless the Superintendent, for reasons to be recorded in writing, declines on the ground that its production is undesirable.
Similarly, every visitor should have the right to see any prisoner and to put any questions to him out of the hearing of any jail officer.
E There should be one visitor 's book for both classes of visitors, their remarks should in both cases be forwarded to the Inspector General who should pass such orders as he thinks necessary, and a copy of the Inspector General 's order should be sent to the visitor concerned.
Paras 53 B and 53 D are not only supplementary but procedurally vital, being protective provisions from the stand point of prisoners.
We except them here for double emphasis although adverted to earlier: 53 B.
All visitors, official and non official, at every visit, shall (a) inspect the barracks, cells, wards, workshed and other buildings of the jail generally and cooked food; (b) ascertain whether considerations of health, cleanliness, and security are attended to, whether proper management and discipline are maintained in every respect, and whether any prisoner is illegally detrained, 594 Or is detained for an undue length of time, while awaiting trial; (c) examine jail registers and records; (d) hear, attend to all representations and petitions made, by or on behalf of prisoners; and (e) direct, if deemed advisable, that any such representations or petitions be forwarded to Government.
53 D. No prisoner shall be punished for any statement made by him to a visitor unless an enquiry made by a Magistrate results in a finding that it is false.
We hope indeed, we direct the judicial and other official visitors to live upto the expectations of these two rules and strictly implement their mandate.
Para 54 is also part of this package of visitatorial provisions with invigilatory relevance.
We expect compliance with these provisions and if the situation demands it, report to the High Court for action in the case of any violation of any fundamental right of a prisoner.
The long journey through jail law territory proves that a big void exists in legal remedies for prisoner injustices and so constitutional mandates can become living companions of banished humans only if non traditional procedures, duly oriented personnel and realistic reliefs meet the functional challenge.
Broadly speaking, habeas corpus powers and administrative measures are the pillars of prisoners ' rights.
The former is invaluable and inviolable, but for an illiterate, timorous, indigent inmate community judicial remedies remain frozen.
Even so, this constitutional power must discard formalities, dispense with full particulars and demand of the detainer all facts to decide if humane and fair treatment prevails, constitutionally sufficient and comporting with the minimum international standards for treatment of prisoners.
Publicity within the prison community of court rulings in this area will go a long way to restore the morale of inmates and, hopefully, of the warders.
So we direct the Delhi Administration to reach, in Hindi, the essentials of this ruling to the ken of the jail people.
The stress that we lay is on the need of the Court to be dynamic and diversified in meeting out remedies to prisoners.
Not merely the contempt power but also the power to create ad hoc, and use the services of, officers of justice must be brought into play.
In this very case, Dr. Chitale, as amicus curiae, was so authorised, with satisfactory results.
American juristic thought has considered similar action: by courts using 595 Masters Primarily factfinders for the court; Receivers Primarily hold, manage, or liquidate property; "Special" Masters responsible for multiple functions such as fashioning a plan and assisting in its implementation; Monitors responsible for observing the implementation process and reporting to the court; and Ombudsmen responsible for hearing inmate complaints and grievances, conducting investigations and making recommendations to the court.
Courts which have utilised some of these special officers including; Hamilton v Schiro, 388 F. Supp.
1016 (E.D.La. 1970); and, Jackson vs Hendrick 1974) (Special Masters); Wayne County Bd.
Of Comm 'rs., Civ.
Action 173271 (Cir.
Of Wayne City.
, Nich., 1972) (Monitor); and, Morales vs Turman, 364 F. Suppl.
166 E.D. Tex 1973) (ombudsmen).
The use of special judicial officers, like the use of the contempt power, holds considerable promise for assisting courts in enforcing judicial orders.
Hopefully, their use will be expanded and refined over time.
These measures are needed since the condition is escalating.
The situation in Tihar Jail is a reflection of crime explosion, judicial slow motion and mechanical police action coupled with unscientific negativity and expensive futility of the Prison Administration.
The Superintendent wails in court that the conditions are almost unmanageable: (i) Huge overcrowding in the jail.
Normal population of the jail remains between 2300 2500 against 1273 sanctioned accommodation.
(ii) No accommodation for proper classification for undertrials, females, habituals, casuals, juveniles, political prisoners etc.
(iii) Untrained staff of the Assistant Superintendents.
Assistant Superintendents are posted from other various departments of Delhi Admn.
viz. Sales Tax, Employment, Revenue, Civil Supplies etc., etc.
(iv) Untrained mostly the warders guard and their being non transferable.
596 (v) A long distance from the courts of the jail and production of a large number of undertrial prisoners roughly between 250 300 daily and their receiving back into the jail in the evening.
(vi) The population of the jail having a large number of drugs addicts, habitual pickpockets having regular gangs outside to lookafter their interests legal and illegal both from outside.
Other jails may compete with Tihar to bear the palm in bad treatment and so the problem is pan Indian.
That is why we have been persuaded by the learned Solicitor General to adventure into this undiscovered territory.
The Indian Bar, and may be, the Bar Council of India and the academic community, must aid the court and country in this operation Prison Justice.
In a democracy, a wrong to some one is a wrong to every one and an unpunished criminal makes society vicariously guilty.
This larger perspective validates our decisional range.
Before we crystalise the directions we issue one paramount thought must be expressed.
The goal of imprisonment is not only punitive but restorative, to make an offender a non offender.
In Batra 's case this desideratum was stated and it is our constitutional law, now implicit in article 19 itself.
Rehabilitation is a prized purpose of prison 'hospitalization '.
A criminal must be cured and cruelty is not curative even as poking a bleeding wound is not healing.
Social justice and social defence the sanction behind prison deprivation ask for enlightened habilitative procedures.
A learned writer has said: The only way that we will ever have prisons that operate with a substantial degree of justice and fairness is when all concerned with that prison staff and prisoners alike share in a meaningful way the decision making process, share the making of rule and their enforcement.
This should not mean three "snitches" appointed by the warden to be an "inmate advisory committee".
However, if we are to instill in people a respect for the democratic process, which is now the free world attempts to live, we are not achieving that by forcing people to live in the most etalitarian institution that we have in our society.
Thus, ways must be developed to involve prisoners in the process of making decision that affect every aspect of their life in the prison.
The Standard Minimum Rules, put out by United Nations agencies also accent on socialisation of prisoners and social defense: 597 57.
Imprisonment and other measures which result in cutting off an offender from the outside world are afflictive by the very fact of taking from the person the right of self determination by depriving him of his liberty.
Therefore the prison system shall not except as incidental to justifiable segregation or the maintenance of discipline, aggravate the suffering inherent in such a situation.
The purpose of justification of a sentence of imprisonment or a similar measure deprivative of liberty is ultimately to protect society against crime.
This end can only be achieved if the period of imprisonment is used to ensure, so far as possible, that upon his return to society the offender is not only willing but able to lead a law abiding and self supporting life.
To this end, the institution should utilize all the remedial, educational, moral, spiritual and other forces and forms of assistance which are appropriate and available, and should seek to apply them according to the individual treatment needs of the prisoners.
Prison processed rehabilitation has been singularly unsuccessful in the West and the recidivism rate in our country also bears similar testimony: To get tough, to create more tension, to inflict, more cruel E; punishment, is to promote more stress, more criminality, more desperate beastliness and is self defeating though soothing to sadists.
Hallock, a professor at the University of Wisconsin says: The stresses that lead to mental illness are often the same stresses that lead to crime.
Mental illness always has a maladaptive quality, and criminality usually has a maladaptive quality.
The final panacea for prison injustice is, therefore, more dynamic, far more positive, strategies by going back to man, the inner man The ward warden relationship needs holistic repair if prisons are, in Gandhian terms, to become hospitals, if penology, as modern criminologists claim, is to turn therapeutic.
The hope of society from investment in the penitentiary actualises only when the inner man within each man, doing the penance of prison life, transforms his outer values and harmonises the environmental realities with the infinite potential of his imprisoned being.
Meditative experiments, follow up researches and welcome results in many countries lend optimism to 598 techniques of broadening awareness, deepening consciousness and quietening the psychic being.
It is of seminal importance to note that the Tamil Nadu Prison Reforms Commission (1978 79) headed by a retired Chief Justice of the High Court of Patna, working with a team of experts.
has referred with approval to successful experiments in Transcendental Meditation in the Madurai Central Prison: Success has been claimed for this programme.
It is re ported that there is "reduction of anxiety and fear symptoms, greater flexibility in dealing with frustration, increased desire to care for others, and ability to interact in group situations viz. rational rather than purely aggressive means.
Some in mates reported spontaneous reduction in clandestine use of alcohol and ganja; and even cigarette smoking was less.
Prison authorities informed us that they noticed personality changes in some of these prisoners, and that they now had the calm and pleasant exchanges with these inmates.
Their behaviour towards others in the prison and relationship with prison authorities also changed considerably".
There is a proposal to extend this treatment to short term prisoners also.
This treatment may also be tried in other prisons where facilities exist.
A copy of the report of the Director of the Madurai Institute of Social Work is in Appendix XI.
The time for prison reform has come when Indian methodology on these lines is given a chance.
We do no more than indicate the sign post to Freedom From Crime and Freedom Behind Bars as a burgeoning branch of therapeutic jurisprudence.
All this gains meaning where we recognise that mainstreaming prisoners into community life as willing members of a law abiding society is the target.
Rule 61 of the Standard Minimum Rules stresses this factor: 61.
The treatment of prisoners should emphasize not their exclusion from the community, but their continuing part in it.
Community agencies should, therefore, be enlisted wherever possible to assist the staff of the institution in the task of social rehabilitation of the prisoners.
There should be in connection with every institution social workers charged with the duty of maintaining and improving all desirable relations of a prisoner with his family and with valuable social 599 agencies.
Steps should be taken to safeguard, to the minimum extent compatible with the law and the sentence, the rights relating to civil interests, social security rights and other social benefits of prisoners.
It follows that social resources, helpful to humane treatment and mainstreaming, should be ploughed in, senior law students screened by the Dean of reputed Law Schools may usefully be deputed to interview prisoners, subject to security and discipline.
The grievances so gathered can be fed back into the procedural mechanism viz. the District Magistrate or Sessions Judge.
The Delhi Law School, we indicate, should be allowed to send selected students under the leadership of a teacher not only for their own clinical education but as prisoner grievance gathering agency.
Other service organisation, with good credentials, should be encouraged, after due checking for security, to play a role in the same direction.
The does provide for rule making and issuance of instructions which can take care of this suggestion.
Omega The omega of our judgment must take the shape of clear directives to the State and prison staff by epitomising the lengthy discussion.
To clinch the issue and to spell out the precise directions is the next step.
We hold that Prem Chand, the prisoner, has been tortured illegally and the Superintendent cannot absolve himself from responsibility even though he may not be directly a party.
Lack of vigilance is limited guilt.
We do not fix the primary guilt because a criminal case is pending or in the offing.
The State shall take action against the investigating police for the apparently collusive dilatoriness and deviousness we have earlier indicated.
Policing the police is becoming a new ombudsmanic task of the rule of law.
We direct the Superintendent to ensure that no corporal punishment or personal violence on Prem Chand shall be inflicted.
No irons shall be forced on the person of Prem Chand in vindictive spirit.
In those rare cases of 'dangerousness ' the rule of hearing and reasons set out by this Court in Batra 's case and elaborated earlier shall be complied with.
600 3.
Lawyers nominated by the District Magistrate, Sessions Judge, High Court and the Supreme Court will be given all facilities for inter views, visits and confidential communication with prisoners subject to discipline and security considerations.
This has roots in the visitatorial and supervisory judicial role.
The lawyers so designated shall be bound to make periodical visits and record and report to the concerned court results which have relevance to legal grievances.
Within the next three months, Grievance Deposit Boxes shall be maintained by or under the orders of the District Magistrate and the Sessions Judge which will be opened as frequently as is deem d fit and suitable action taken on complaints made.
Access to such boxes shall be accorded to all prisoners.
District Magistrates and Sessions Judges shall, personally or through surrogates, visit prisons in their jurisdiction and afford effective opportunities for ventilating legal grievances, shall make expeditious enquiries there into and take suitable remedial action.
In appropriate cases reports shall be made to the High Court for the latter to initiate, if found necessary, habeas action.
It is significant to note the Tamil Nadu Prison Reforms Commission 's observations: 38.16.
Grievance Procedure : This is a very important right of a prisoner which does not appear to have been properly considered.
The rules regulating the appointment and duties of non official visitors and official visitors to the prisons have been in force for a long time and their primary functions is "to visit all parts of the jail and to see all prisoners and to hear and enquire into any complaint that any prisoner hear make".
In practice, these rules have not been very effective in providing a forum for the prisoners to redress their grievances.
There are a few non official visitors who take up their duties conscientiously and listen to the grievances of the prisoners.
But most of them take this appointment solely as Fl a post of honour and are somewhat reluctant to record hl the visitors ' book any grievance of a prisoner which might cause embarrassment to the prison staff.
The judicial officers, viz., 601 the Sessions Judge and the Magistrates who are also ex officio visitors do not discharge their duties effectively.
We insist that the judicial officers referred to by us shall carry out their duties and responsibilities and serve as an effective grievance Mechanism.
No solitary or punitive cell, no hard labour or dietary change as painful additive, no other punishment or denial of privileges and amenities, no transfer to other prisons with penal consequences, shall be imposed without judicial appraisal of the Sessions Judge and where such intimation, on account of emergency, is difficult, such information shall be given within two days of the action.
Conclusion What we have stated and directed constitute the mandatory part of the judgment and shall be complied with by the State.
But implicit in the discussion and conclusions are certain directives for which we do not fix any specific time limit except to indicate the urgency of their implementation.
We may spell out four such quasi mandates.
The State shall take early steps to prepare in Hindi, a Prisoner 's Handbook and circulate copies to bring legal awareness home to the k inmates.
Periodical jail bulletins stating how improvements and habilitative programmes are brought into the prison may create a fellow ship which Will ease tensions.
A prisoners ' wall paper, which will freely ventilate grievances will also reduce stress.
All these are implementary of section 61 of the . 2.
The Slate shall take steps to keep up to the Standard Minimum Rules for Treatment of Prisoners recommended by the United Nations, especially those relating to work and wages, treatment with dignity community contact and correctional strategies.
In this latter aspect, the observations we have made of holistic development of personality shall be kept in view.
The needs rehabilitation and the Prison Manual total overhaul, even the Model Manual being out of focus with healing goals.
A correctional cum orientation course is necessitous for the prison staff inculcating the constitutional values, therapeutic approaches and tension free management.
602 4.
The prisoners ' rights shall be protected by the court by its writ jurisdiction plus contempt power.
To make this jurisdiction viable, free legal services to the prisoner programmes shall be promoted by professional organisations recognised by the Court such as for e.g. Free Legal Aid (Supreme Court) Society.
The District Bar shall, we re commend, keep a cell for prisoner relief In this connection, it is heartening to note that the Delhi University, Faculty of Law, has a scheme of free legal assistance even to prisoners.
The Declaration on the Protection of All Persons from Torture and other cruel, Inhuman or Degrading Treatment or Punishment adopted by U. N. General Assembly (Resolution 3452 of 9 December 1975) has relevance to our decision.
In particular Article 8.
Any person who alleges that he has been subjected to torture or other cruel, inhuman or degrading treatment or punishment by or at the instigation of a public official shall have the right to complain to, and to have his case impartially examined by, the competent authorities of the State concerned.
Article 9.
Wherever there is reasonable ground to believe that an act of torture as defined in article I has been committed, the competent authorities of the State concerned shall promptly proceed to an impartial investigation even if there has been no formal complaint.
Dr. Chitale has handed up to us an American Civil Liberties Union Hand book on the Rights of Prisoners.
It rightly sets the sights of prison justice thus : As an institution, our penal and "correctional" system is an abject failure.
The conditions in America 's jails and prisons virtually ensure psychological impairment and physical deterioration for thousands of men and women each year.
Reformation and rehabilitation is the rhetoric; systematic dehumanization is the reality.
Public attention is directed 603 only sporadically toward the subhuman conditions that prevail in these institutions, and usually only because the prisoners themselves have risked many more years in confinement, and in some cases even their lives, to dramatize their situation by protest.
The 'central evil ' of prison life, according to this handbook, is "the unreviewed administrative discretion granted to the poorly trained personnel who deal directly with prisoners.
Moreover, even those rights which are now guaranteed by the courts are often illusory for many prisoners.
Implementation and enforcement of these rights rest primarily in the hands of prison officials.
Litigation is costly and time consuming, and few lawyers have volunteered their service in this area.
Thus even those minimal rights which appear on paper are often in reality denied.
" We conclude with the hope that the State, though preoccupied with many pressing problems, will discharge its constitutional obligation to the invisible mortals incarcerated by it and legislatively and administratively re make a Prison Code adhering to the high values of the Preamble.
Over a hundred years ago (1870) " . some American prison administrators assembled to discuss their common problems and founded what is now the American Correctional Association.
At the very first meeting, these remarkable men set down a justly famous 'Statement of Twenty two Principles.
" Among the twenty two were these: "Reformation, not vindictive suffering, should be the purpose of the penal treatment of prisoners.
The prisoner should be made to realize that his destiny is in his own hands: Prison discipline should be such as to gain the will of the prisoner and conserve his self respect: The aim of the prison should be to make industrious free men rather than orderly and obedient prisoners.
This quote from the well known work "The Crime of Punishment" extracted by George Ellis in his book "Inside Folsom Prison: Trans 604 cendental mediation and TM Sidhi Program" is notable as a practicable project which will reduce the number of prisoners by raising the nature of prisoners.
In the package of benign changes needed in our prisons with a view to reduce tensions and raise the pace of rehabilitation, we have referred to acclimatization of the community life and elimination of sex vice vis a vis prisoner we have also referred to the unscientific mixing up in practice of under trials, young offenders and long term convicts.
This point deserves serious attention.
A recent book "Rape in Prison" states : "One of the most horrendous aspects of a jail sentence is the fact that not only are the young housed with the older offenders, but those awaiting trial share the same quarters as convicted inmates.
The latter individuals have little to lose in seeking sexual gratification through assault, for they have to serve their time any way .
As matters now stand, sex is unquestionable the most pertinent issue to the inmates ' life behind bars.
There is a great need to utilize the furlough system in corrections.
Men with record showing good behaviour should be released for week ends at home with their Families and relatives.
Farewell to this case is not final so far as the jailor and the police investigator are concerned.
The former will stand his trial and shall receive justice.
We say no more here.
The investigator invites our displeasure and the Assistant Public Prosecutor, whom he consulted, makes us unhappy since we have had a perusal of the case diary.
The crime alleged is simple, the material relied on is short and yet, despite repeated observations from the Bench the investigator has delayed dawdily the completion of the collection of evidence and the laying of the charge sheet.
The prisoner who is the victim has been repeatedly questioned under different surroundings and divergent statements are recorded.
We do not wish to state what we consider to be the obvious inference, but we are taken aback when the Assistant Public Prosecutor has given an opinion which, if we make presumption in his favour, 605 shows indifferences and, if we make contrary inferences, makes us suspect.
When offences are alleged to have taken place within the prison, there should be no tinge or trace of departmental collusion or league between the police and the prison staff.
We make these minimal observations so that the State may be alerted for appropriate action.
Surely, The conduct of the prosecution cannot be entrusted to one who has condemned it in advance.
B We allow the petition and direct a writ to issue, including the six mandates and further order that a copy of it be sent for suitable action to the Ministry of Home Affairs and to all the State Governments since Prison Justice has pervasive relevance.
C PATHAK, J.
I have read the judgment prepared by my learned brother.
For my part, I think it sufficient to endorse the following finding and direction detailed towards the end of the judgment: (1) The prisoner, Prem Chand, has been tortured while in custody in the Tihar Jail.
As a criminal case is in the offing or may be pending, it is not necessary in this proceeding to decide who is the person responsible for inflicting the torture.
(2) The Superintendent of the Jail is directed to ensure that no punishment or personal violence is inflicted on Prem Chand by reason of the complaint made in regard to the torture visited on him.
Besides this, I am in general agreement with my learned brother on the pressing need for prison reform and the expeditious provision for adequate facilities enabling the prisoners, not only to be acquainted with their legal rights, but also to enable them to record their complaints and grievances, and to have confidential interviews periodically with lawyers nominated for the purpose by the District Magistrate or the Court having jurisdiction subject, of course, to considerations of prison discipline and security.
It is imperative that District Magistrate,, and Sessions Judges should visit the prisons in their jurisdiction and afford effective opportunity to the prisoners for ventilating their grievances and, where the matter lies within their powers, to make expeditious enquiry therein and take suitable remedial action.
It is also necessary 606 that the Sessions Judge should be informed by the jail authorities of any punitive action taken against a prisoner within two days of such action.
A statement by the Sessions Judge in regard to his visits, enquiries made and action taken thereon shall be submitted periodically to the High Court to acquaint it with the conditions prevailing in the prisons within the jurisdiction of the High Court.
| The petitioner, a convict under death sentence, through a letter to one of the Judges of this Court alleged that torture was practised upon another prisoner by a jail warder, to extract money from the victim through his visiting relations.
The letter was converted into a habeas corpus proceeding.
The Court issued notice to the State and the concerned officials.
It also appointed amicus curiae and authorised them to visit the prison, meet the prisoner, see relevant documents and interview necessary witnesses so as to enable them to inform them selves about the surrounding circumstances and the scenario of events.
The amicus curiae after visiting the jail and examining witnesses reported that the prisoner sustained serious anal injury because a rod was driven into that aperture to inflict inhuman torture and that as the bleeding had not stopped, he was removed to the jail hospital and later to the Irvin Hospital.
It was also reported that the prisoner 's explanation for the anal rupture was an unfulfilled demand of the warder for money, and that attempts were made by the departmental officers to hush up the crime by overawing the prisoner and the jail doctor and offering a story that the injury was either due to a fall of self inflication or due to piles.
Allowing the writ petition. ^ HELD:(Per Krishna Iyer and Chinnappa Reddy, JJ.) 1.
(a) Prem Chand the prisoner, has been tortured illegally and the Superintendent cannot absolve himself from responsibility even though he may not be directly a party.
Lack of vigilance is limited guilt.
The primary guilt cannot be fixed because a criminal case is pending or is in the offing.
The State shall take action against the investigating police for collusive dilatoriness and deviousness.[599 F] 558 (b) The Superintendent is directed to ensure that no corporal punishment or personal violence on Prem Chand shall be inflicted.
No irons shall be forced on the person in vindictive spirit.
[599 H] (c) Lawyers nominated by the District Magistrate, Sessions Judge, High Court or the Supreme Court will be given all facilities for interviews, visits and confidential communication with prisoners subject to discipline and security considerations.
The lawyers so designated shall be bound to make periodical visits and record and report to the concerned courts, results which have relevance to legal grievances.
[600 A B] (d) Within the next three months, Grievance Deposit Boxes shall be maintained by or under the orders of the District Magistrate and the Sessions Judge which will be opened as frequently as is deemed fit and suitable action taken on complaints made.
Access to such boxes shall be afforded to all prisoners.
[600 C] (e) District Magistrates and Sessions Judges shall, personally or through surrogates, visit prisons in their jurisdiction and afford effective opportunities for ventilating legal grievances, shall make expeditious enquiries there into and take suitable remedial action.
In appropriate cases reports shall be made to the High Court for the latter to initiate, if found necessary, habeas action.
[600 D] (f) No solitary or punitive cell, no hard labour or dietary change as painful additive, no other punishment or denial of privileges and amenities, no transfer to other prisons with penal consequences, shall be imposed without judicial appraisal of the Sessions Judge and where such intimation, an account of emergency is difficult such information shall be given within two days of the action.
[601 B C] 2.
In our era of human rights ' consciousness the habeas writ has functional plurality and the constitutional regard for human decency and dignity is tested by this capability.
[563 E] 3.
Protection of the prisoner within his rights is part of the office of Article 32.
[564 C] 4.
It behoves the court to insist that, in the eye of law, prisoners are persons not animals, and to punish the deviant 'guardians ' of the prison system where they go berserk and defile the dignity of the human inmate.
Prison houses are part of Indian earth and the Indian Constitution cannot be held at bay by jail officials 'dressed in a little, brief authority '.
when Part III is invoked by a convict.
When a prisoner is traumatized, the Constitution suffers a shock.
[564 D E] 5.
The courts in America have, through the decisional process, brought the rule of law into the prison system pushing back, pro tanto, the 'hands off ' doctrine.
The content of our constitutional liberties being no less, the dynamics of habeas writs there developed help the judicial process here.
The full potential of articles 21, 19 & 14 after Maneka Gandhi has been unfolded by this Court in Hoskot and Batra.
Today, human rights jurisprudence in India has a constitutional status and sweep.
[573 A, 574 D] 6.
Rulings of this Court have highlighted the fact that the framers of the Constitution have freed the powers under article 32 from the rigid restraints of 559 the traditional English writs.
Flexible directives, even affirmative action moulded to grant relief, may realistically be issued and fall within its fertile width.
[575 F] Dwarkanath vs income Tax officer ; referred to.
Where injustice, verging on inhumanity, emerges from hacking human rights guaranteed in Part III and the victim beseeches the Court to intervene and relieve, the Court will be a functional futility as a constitutional instrumentality if it does not go into action until the wrong is righted.
The Court is not a distant abstraction omnipotent in the books but an activist institution which is the cynosure of public hope.
The court can issue writs to meet the new challenges.
[576 D] 8.
Affirmed in unmistakables terms that the court has jurisdiction under article 32 and so too under article 226, a clear power and, therefore, a public duty to give relief to sentence in prison setting.
[576 F] 9.
In Sunil Batra vs Delhi Administration this Court rejected the 'hands off ' doctrine and ruled that fundamental rights do not flee the person as he enters the prison although they may suffer shrinkage necessitated by incarceration.
Our Constitutional culture has now crystallised in favour of prison justice and judicial jurisdiction.
[576 H 577 A] 10.
Where the rights of a prisoner, either under the Constitution or under other law, are violated the writ power of the court can and should run to his rescue.
There is a warrant for this vigil.
The court process casts the convict into the prison system and the deprivation of his freedom is not a blind penitentiary affliction but a belighted institutionalisation geared to a social good.
The court has a continuing responsibility to ensure that the constitutional purpose of the deprivation is not defeated by the prison administration.
[577 E F] 11.
Whether inside prison or outside, a person shall not be deprived of his guaranteed freedom save by methods 'right, just and fair '.
[578 E] 12.
A prisoner wears the armour of basic freedom even behind bars and that on breach thereof by lawless officials the law will respond to his distress signals through 'writ ' aid.
The Indian human has a constant companion the court armed with the Constitution.
[578 H] Maneka Gandhi vs Union of India ; N. H. Hoskot vs Maharashtra, ; , referred to. 13.
Implicit in the power to deprive the sentence of his personal liberty, the Court has to ensure that no more and no less than is warranted by the sentence happens.
If the prisoner breaks down because of mental torture, psychic pressure or physical infliction beyond the licit limits of lawful imprisonment the Prison Administration shall be liable for the excess.
On the contrary, if an influential convict is able to buy advantages and liberties to avoid or water down the deprivation implied in the sentence the Prison Establishment will be called to order for such adulteration or dilution of court sentences by executive palliation, if unwarranted by law.
[579 B C] 14.
The court has power and responsibility to intervene and protect the prisoner against mayhem, crude or subtle, and may use habeas corpus for 560 enforcing in prison humanism and forbiddance of harsher restraints and heavier severities than the sentence carries.
[579 E] 15.
Law in the books and in the courts is of no help unless it reaches the prisoner in understandable language and available form.
There is therefore need to get ready a Prisoners ' Handbook in the regional language and make them freely available to the inmates.
To know the law is the first step to be free from fear of unlaw.
[582 C] 16(i) The most important right of a prisoner is to integrity of his physical person and mental personality.
No prisoner can be personally subjected to deprivations not necessitated by the fact of incarceration and the sentence of court.
[584 D, 583 C] (ii) Inflictions may take many protean forms, apart from physical assaults.
Pushing the prisoner into a solitary cell, denial of a necessary amenity, and more dreadful sometimes, transfer to a distant prison where visits or society of friends or relatives may be snapped, allotment of degrading labour, assignment to a desperate or tough gang and the like, may be punitive in effect.
Every such affliction or abridgement is an infraction of liberty or life in its wider sense and cannot be sustained unless article 21 is satisfied.
There must be a corrective legal procedure, fair and reasonable and effective.
Such infraction will be arbitrary under Article 14, if it is dependent on unguided discretion, unreasonable under article 19 if it is irremediable and unappealable and unfair under article 21 if it violates natural justice.
Some prisoners, for their own safety, may desire segregation.
In such cases, written consent and immediate report to higher authority are the least, if abuse is to be tabooed.
[584 F H, 586 G] (iii) Visit to prisoners by family and friends are a solace in insulation: and only a dehumanised system can derive vicarious delight in depriving prison inmates of this humane amenity.
Subject, of course, to search and discipline and other security criteria, the right to society of fellow men, parents and other family members cannot be denied in the light of article 19 and its sweep.
, [586 H] 17.
Prison power, absent judicial watch tower, may tend towards torture.
The judges are guardians of prisoners ' rights because they have a duty to secure the execution of the sentences without excesses and to sustain the personal liberties of prisoners without violence on or violation of the inmates ' personality.
[588 D, 590 C] 18.
In a democracy, a wrong to some one is a wrong to every one and an unpunished criminal makes society vicariously guilty.
[596 D] 19.
When offences are alleged to have taken place within the prison, there should be no tinge or trace of departmental collusion or league between the police and the prison staff.
[605 A] [Directives for which no specific time limit fixed except the urgency of their implementation: 1(i) The State shall take early steps to prepare in Hindi, a Prisoner 's Handbook and circulate copies to bring legal awareness home to the inmates.
Periodical jail bulletins stating how improvements and habilitative programmes are brought into the prison may create a fellowship which will ease tensions.
561 A prisoners ' wall paper, which will freely ventilate grievances will also reduce stress.
All these are implementary of section 61 of the .
[601 D,E] (ii) The State shall take steps to keep up to the Standard Minimum Rules for Treatment of Prisoners recommended by the United Nations, especially those relating to work and wages, treatment with dignity, community contact and correctional strategies.
[601 F] (iii) The needs rehabilitation and the Prison Manual total over haul.
A correctional cum orientation course is necessitous for the prison staff inculcating the constitutional values, therapeutic approaches and tension free management.
[601 H] (iv) The prisoners ' rights shall be protected by the court by its writ jurisdiction plus contempt power.
To make this jurisdiction viable, free legal services to the prisoner programmes shall be promoted by professional organisations recognised by the court such as for e.g. Free Legal Aid (Supreme Court) Society.
The District Bar shall, we recommend, keep 2 cell for prisoner relief.
[602 A] (Per Pathak J. concurring) 1.
The prisoner Prem Chand has been tortured while in custody in the Tihar Jail.
[605 D] 2.
The Superintendent of the jail to ensure that no punishment or personal violence is inflicted on Prem Chand by reason of the complaint made in regard to the torture.
[605 F] 3.
Pressing need for prison reform and provision for adequate facilities to prisoners, to enable them not only to be acquainted with their legal riots but also to record their complaints and grievances and to have confidential interviews periodically with lawyers nominated for the purpose by the District Magistrate or the court having jurisdiction.
[605 G] 4.
Imperative that District Magistrates and Sessions Judges should visit the prisons in their jurisdiction and afford effective opportunity to the prisoners for ventilating their grievances and where the matter lies within their powers, make expeditious enquiry and take suitable remedial action.
[605 H] 5.
Sessions Judge should be informed by the jail authorities of any punitive action taken against a prisoner within two days of such action.
[606 A] 6.
A statement by the Sessions Judge in regard to his visits, enquiries made and action then thereon shall be submitted periodically to the High Court to acquaint it with the conditions prevailing in the prisons within its jurisdiction.
[606 B]
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Subsets and Splits