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ivil Appeal Nos.
282 283 of 1969.
Appeals by special leave from the Judgment and order dated the 15th October, 1968 of the Allahabad High Court in Second Civil Appeals Nos.
978/58 and 11 of 1959.
section Rangarajan, Mrs. section Bagga and Uma Jain for the Appellants.
K.L. Hathi, P.C. Kupur, R.S. Mehta, O.P. Verma and S.N. Singh for the Respondents.
The Judgment of the Court Was delivered by DESAI, J.
These two appeals by special leave arise from two Suits filed by Barkatullah and Sahfiullah for possession of land more 929 particularly set out at the foot of the plaint against the Zamindars and Prem Kumari and Noor Mohammad.
Briefly stated the plaintiffs ' A case was that they were Thekadars and the Theka was taken for personally cultivating the land and therefore under sec.
12 of the U P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short), they have become hereditary tenants and they were in possession of land on Ist April 1960.
It was alleged that the Zamindars had no right to lease the land after the plaintiffs became hereditary tenants yet Prem Kumari and Noor Mohammad took land on lease from Zamindars and entered possession after 1.4 1950.
It was alleged that the lessees from the Zamindar had no right to remain in possession as against hereditary tenants.
On this short ground the plaintiffs sought possession of the land.
The defendants were the Zamindars and two lessees contested the suit.
The averments made in para 4 of the plaint were not controverted specifically and it was merely stated that they are subject to additional pleas.
The only plea put forward on behalf of the lessees worth noticing is that the lessees were in cultivatory possession during the year 1359 F and being not a person who has become a bhumidar sirdar, Adhivasi or Asami is entitled to all the rights of Adhivasis under U.P. Land Reforms (Supplementary) Act, 1952 ( '1952 Act ' for short) The trial court dismissed the suit observing that the plaintiffs were Thekadars of the land and under sec.
12 of the 1950 Act have acquired rights of hereditary tenants but the lessees were in cultivatory possession in 1359 F and therefore have acquired the right of adhivasi.
Thekanama was held to be defective on the question of Theka being given exclusively for personal cultivation.
The two plaintiffs preferred two separate appeals and both the appeals were disposed of by the First Additional Civil and Sessions Judge, Gonda as per his judgment dated September 1, 1958.
Broadly stated, the learned Judge agreed with the findings of the trial court and dismissed the appeals.
The original plaintiffs carried the matter in .
second appeal.
Two separate appeals were preferred, by the time the appeals came up for hearing, a statement was made that both the plaintiffs have compromised the dispute inter Se and that the suit be treated as one and if the appeal is to be allowed, possession is to be given jointly to two appellants as against the respondents H The learned Judge disposed of both the appeals by common judgment reversing the decision of the trial court and the first 930 appellate court holding that the plaintiffs had acquired the status of A hereditary tenants and were in possession on 1.5.1950 and, therefore, the Zamindars had no right to dispossess the plaintiffs and induct the two lessees in possession.
It was further held that as the lessees came into possession under Zamindars who had no right to grant the lease possession of the lessees being thus unlawful against the plaintiffs, they could not have acquired the Adivasis rights.
Accordingly, the suit was decreed and a decree for possession was granted in favour of the plaintiffs.
Hence these two appeals by special leave Both the original lessees have died and their heirs and legal representative are prosecuting these appeals.
Mr. Rangarajan, learned counsel for the appellants urged that in view of the finding of the trial court that there was no specific authority given to the Thekadars for personal cultivation of the lands comprised in the Theka, the Thekadars plaintiffs did not acquire the right of hereditary tenants under sec 12 of the 1950 Act.
This was the principal contention urged in these two appeals.
1950 Act was a measure of agrarian reform enacted with a view to abolishing the Zamindari system and for acquisition of intermediaries ' rights.
Section 4 provided for vesting of estates in the State free from all encumbrances with effect from the date to be specified by the State Government in a notification.
Sec. 6, inter alia, provided the consequences of the vesting of an estate in the State, one such being that all rights, title and interest of all the intermediaries shall cease and be vested in the State.
1 2 provides that the Thekadars would acquire the rights of hereditary tenants in certain circumstances.
It reads as under; "(1) Where any land was in personal cultivation of a person on the 1st day of May, 1950 as a Thekadar thereof and the theka was made with a view to the cultivation of the land by such thekedar personally, then notwithstanding anything in any law, document or order of court, he shall be deemed to be a hereditary tenant thereof entitled to hold, and when he has been ejected from the land after the said date, to regain possession as a hereditary tenant thereof liable to pay rent at hereditary rates.
931 (2) The fact that the land comprised in the theka has been in the personal cultivation of the thekedar since the commencement of the theka shall, notwithstanding anything contained in section 91 and 92 of the (I of 1872), be receivable in evidence for showing that the theka was of the nature referred to in sub section (1)".
1952 Act enacted certain supplementary provisions in respect of the 1950 Act.
3 of 1952 Act provided that every person who was in cultivatory possession of any land during the year 1359 Fasli but is not a person who as a consequence of vesting under section 4 of the 1950 Act has become a bhumidar, sirdar, adhivasi or asami under section 18 to 21 of the said Act shall be and is hereby declared to be, with effect from the appointed date (b) if the bhumidar or sirdar was not such a person, an adhivasi, and shall be entitled to all the rights and be subjected to all the liabilities conferred or imposed upon an asami or an adhivasi.
There is an explanation to the section which is not material.
Original lessees claimed that they have acquired the status of Adhivasi under section 3 of 1952 Act.
It is not in dispute that the original plaintiffs were Thekedars.
It was however contended that unless the Theka was exclusively far personal cultivation of the land comprised in the Theka, the Thekedars would not acquire the status of hereditary tenants.
Sec. 12 which has been extracted herein before specifically provides that where any land is in personal cultivation of a person on the 1st day of May, 1950, as a Thekedar thereof and the Theka was made with a view to the cultivation of the land by such Thekedar personally then notwithstanding anything in any law, document or order of court, he shall be deemed to be hereditary tenant thereof entitled to hold, and when he has been ejected from the land after the said date, to regain possession as a hereditary tenant thereof liable to pay rent at hereditary rates.
This section came in for interpretation in Babu Noorul Hasan Khan vs Ram Prasad Singh & Ors (1) wherein it was held that a Thekedar of an Estate ceases to have any right to hold or possess as such any land in such Estate with effect from the date of its vesting.
But this is subject to two exceptions; one such being as enacted in 5.
l 2 which provides that if such land was in personal cultivation of a person on the 1st day of May, 1950, as a 932 thekedar thereof and if the theka was made with a view to the A cultivation of land by such thekedar personally, then because of the non obstante clause occurring in sub sec.
(I) of section 12 of the Act, the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold land as such and liable to pay rent at hereditary rates.
If such hereditary tenant has lost possession he is entitled to regain his possession.
It was further held that if, however, the land was in personal cultivation of the Thekedar merely as a Thekedar appointed to collect rent from other tenants and incidentally allowed to cultivate the Sir or Khudkasht land of the lessor then he will be a mere Asami in accordance with sec.
13(2) of the Act.
This interpretation of sec.
12 was re affirmed in Raghunandan Singh & Ors.
vs Brij Mohan Singh & Ors(1) It would thus appear well settled that before a Thekedar can claim the status of a hereditary tenant, he must not only be a Thekedar but the Theka must be specifically granted for personal cultivation of the land included in the Theka by the Thekedar.
The question therefore, is whether in this case the land included in the Theka of the original plaintiffs provided for personal cultivation of the land by the Thekedar or personal cultivation was incidental to other rights and obligations such as collection of rent .
from the other tenants ? This would necessitate examination of the original document creating Theka.
That was not read to us, but Mr. Rangarajan relied upon the following observation in the judgment of the learned trial Judge: "I have read the context (sic) (possibly contract, of the Thekanama.
There is no authority given specifically or impliedly for personal cultivation by the Thekedars of the land comprised in the Theka unless there was such a provision.
I fear no rights of hereditary tenancy could have been acquired by the plaintiffs.
" It was urged that the learned Judge specifically came to the conclusion that the Theka was not created exclusively and specifically for personal cultivation of the lands involved in the Theka.
The learned appellate Judge found that the Thekedars were in actual possession and personal cultivation of the land for a period of 11 years.
He further found that the Theka would be deemed to have been granted for 933 personal cultivation and if the plaintiffs (Thekedars) have been found to be in personal cultivation of the suit on 1st May, 1950 as Thekedars, they would be entitled to the benefit of sec.
12 of 1950 Act.
The learned appellate Judge then concluded that it is satisfactorily proved that the plaintiffs Thekedars were in possession on 1st May, 1950.
However the learned Judge declined to grant relief to the plaintiffs on the finding that the lessees had acquired Adhivasis right under 1952 Act.
It clearly transpires from the findings of the first appellate court, which is the last fact finding court, that the Theka was for personal cultivation of the land involved in the Theka and the Thekedars were personally cultivating the land for a period of 11 years.
The High Court in second appeal noticed that the Thekedars were personally cultivating the land.
Nothing was pointed out to us to show that Thekedars had any other duty to perform such as collecting rent from other tenants.
There is nothing in the record to show that the Theka was as a consideration for some other duties to be performed by the Thekedars to the Zamindars.
Therefore, the conclusion is inescapable, that the Theka was created exclusively for personal cultivation of the land involved in the Theka by the Thekedars.
If it is clearly established that the Theka was created exclusively for personal cultivation of the land by the Thekedars, the ratio of the decision of this Court would lead to the conclusion that the Thekedars acquired the status of the hereditary tenants under sec.
12 of the 1 950 Act.
The only question then remains for the consideration is whether the original lessees acquired Adhivasis rights under sec.
3 of the 1952 Act.
Sec. 3 which has been extracted herein before provides that any person who has not become a bhumidar, sirdar, adhivasi or asami under 1950 Act if he is in cultivatory possession of any land during the year 1359 Fasli and if the bhumidar or sirdar was not such a person, such a person in cultivatory possession would acquire the status of an adhivasi.
The High Court then examined what is the significance of the expression 'cultivatory possession ' in sec.
The High Court rightly held that if the Thekedars had acquired the status of hereditary tenants as Theka was up to and inclusive of the year 1359 Fasli, the Zamindars had no right to induct lessees in possession after depriving the Thekedars of their possession and therefore possession of the lessees was not 934 lawful against the Thekedars.
The High Court rightly held that A the lessees could not be said to be in cultivatory possession of the land on the appointed day.
In reaching this conclusion, the High Court relied upon a decision of this Court in Sonawati & ors.
vs Shri Ram Anr.(1) The Court held as under: "The expression "cultivatory possession" is not defined in the Act, but the Explanation clearly implies that the claimant must have a lawful right to be in possession of the land, and must not belong to the classes specified in the explanation.
"Cultivatory possession" to be recognized for the purpose of the Act must be lawful and for the whole year 1359 Fasli.
A trespasser who has no right to be in possession by merely entering upon the land forcibly or surreptitiously cannot be said to be a person in "cultivatory possession" within the meaning of section 3 of U.P. Act of 1952.
We are of the view that the Allahabad High Court was right in holding in Ram Krishna vs Bhagwan Baksh Singh(2) that a person who through force inducts himself over and into some land and succeeds in continuing his occupation over it cannot be said to be in cultivatory possession of that land so as to invest him with the rights of an asami or an adhivasi, and we are unable to agree with the subsequent judgment of a Full Bench of the Allahabad High Court in Nanhoo Mal vs Muloo and ors.(B) that occupation by a wrongdoer without any right to the land is 'cultivatory possession ' within the meaning of section 3 of the U.P. Act 31 of 1952".
Therefore in order to obtain the benefit of sec.
3 of 1952 Act, the person claiming to be in cultivatory possession must show that his or her possession was lawful.
The High Court consistent with certain findings of the trial Court and the first appellate court held that possession of the lessees in 1359 Fasli was not lawful and this necessarily follows from the finding given by the courts that the Thekedars were in cultivatory possession of the plots in dispute on the appointed day i.e. 1st May, 1950 and thereby became entitled to acquire the rights of hereditary tenants.
We are in agreement with the conclusion recorded by the High Court.
935 It must therefore follow as a necessary corollary that the lessees did not acquire the right of adhivasi and the hereditary A tenants would be entitled to a decree for possession.
Accordingly, the appeals fail and must be dismissed.
The appeals are thus dismissed with costs.
H.S.K. Appeals dismissed.
| The plaintiffs, who were Thekedars, filed two suits for possession of land Leased out by the Zamindars to the defendants lessees on the ground that since the Thekedars had become hereditary tenants under section 12 of the U.P. Zamindari Abolition and Land Reforms Act, 1 950 and were in possession of that land on 1st day of May, 1950, the Zamindars had no right to grant lease and the lessees had no right to enter and remain in possession of that land after that date.
The lessees pleaded that they were in cultivatory possession of the land during the year 1359 Fasli and were entitled to all the rights of adhivasis under the U.P. Land Reforms (Supplementary) Act, 1952.
The trial court dismissed the suits observing that the Thekedars had acquired rights of hereditary tenants but the lessees were in cultivatory possession in 1359 Fasli who had therefore acquired the right of adhivasi.
The first appellate court dismissed the appeals.
The High Court in second appeal reversed the decision of the trial court and the first appellate court and decreed the suits.
On appeal, it was contended that since there was no authority given to the Thekedars for personal cultivation of the lands comprised in the Theka the Thekedars did not acquire the right of hereditary tenants under section 12 of the 1950 Act.
Dismissing the appeals, ^ HELD: Section 12 of the 1950 Act provides that if any land was given to a person for personal cultivation by him on the 1st day of May 1950, as a Thekedar thereof, then because of the non obstante clause occurring in sub section (I) of section 12 the Thekedar would be deemed to be a hereditary tenant of the land entitled to hold the land as such and liable to pay rent at hereditary rates.
If such hereditary tenant has lost possession he is entitled to regain his possession.
If, however, the land was in the personal cultivation of the Thekedar who was appointed merely to collect rent from other tenants and incidentally allowed to cultivate the Sir, or Khudkasht land of the lessor then he will be a mere asami in accordance with section 13 928 of the Act.
Before a Thekedar can claim the status of a hereditary tenant, A he must not only be a Thekedar but the Theka must be specifically granted for personal cultivation of the land included in the Theka by the Thekedar.
[931 H, 932 A C] Babu Noorul Hasan Khan vs Ram Prasad Singh and Ors [1980] I SCR 977 and Raghunandan Singh and Ors vs Brij Mohan Singh and Ors.
, ; , referred to.
In the instant case the Theka was created exclusively for personal cultivation of the land involved in the Theka be the Thekedars and not as a consideration for some other duties to be performed by the Thekedars to the Zamindars.
The Thekedars were in possession of the land and were personally cultivating the land on the 1st day of May, 1950.
The Thekedars acquired the status of hereditary tenants under section 12 of the 1950 Act.
[933 C E] Section 3 of the 1952 Act provides that any person who has not become a bhumidar, sirdar, adhivas.
Or asami under the 1950 Act if he is in cultivatory possession of any land during the year 1359 Fasli and if the bhumidar or sirdar was not such a person, such person in cultivatory possession would acquire the status of an adhivasi.
To obtain the benefit of section 3 the person claiming to be in cultivatory possession must show that his or her possession was lawful.
[933 F G, 934 F] Sonawati and Ors.
vs Sri Ram and Anr., [1968] I SCR 617, referred to.
In the instant case since the Thekedars had acquired the status of hereditary tenants as Theka was up to and inclusive of the year 1359 Fasli, the Zamindars had no right to induct lessees in possession after depriving the Thekedars of their possession and therefore possession of the lessees in 1359 Fasli was not lawful.
Therefore the lessees did not acquire the right of adhivasi.
[933 H, 935 A]
|
Civil Appeal No. 752 of 1984 etc.etc.
From the Judgment and Order dated 1.8.983 of Andhra Pradesh Administrative Tribunal, Hyderabad in Representation Petition No. 799 of 1977.
K. Madhava Reddy, T.V.S.N. Chari, Ms. Manjula Gupta, B. Kanta Rao, D. Prakash Reddy, B. Rageshwar Rao, Vimal Dave, K. Ram Kumar, Y. Prabhakara Rao, K.R. Nagaraja, Krishan Kumar and G. Prabhakara for the appearing parties.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
The questions involved in these matters being common they are being disposed of by a common judgment.
All these matters arise out of a common order of the A.P. Administrative Tribunal passed in Representation Petitions Nos.
799/77, 548/79 and 140/81.
S.L.P. (Civil) No. 5218/85 is filed against a separate order of the Tribunal in R.P. No. 1473/80.
The dispute is regarding the inter se seniority between the Supervisors who are upgraded as Junior Engineers and the degree holders who are directly appointed as Junior Engineers.
All of them belong to the different branches in the A.P. Engineering Subordinate Service.
First we shall state the relevant facts in each of the appeals and then formulate the points that arise for consideration.
For convenience sake we shall refer to the parties as arrayed before the Tribunal.
CIVIL APPEAL NOS.
752 AND 754/84 : These two appeals are filed against the order in R.P. No. 799/77.
The first one is filed by the State of A.P. and the other one by upgraded Supervisors Junior Engineers.
The petitioners before the Tribunal are all Junior Engineers in 300 Irrigation and Power Department.
They were initially appointed as temporary Junior Engineers in the year 1969/70.
Later they appeared in a special qualifying test (`SQT ' for short) held by the Public Service Commission and on the basis of the result of the test their services were regularised in the post of Junior Engineers with retrospective effect from the date of the temporary appointment subject to the maintenance of the order of ranking given by the Public Service Commission in the test.
The respondent Nos. 3 onwards in these R.Ps. are also Junior Engineers in the same department but they were appointed as Supervisors and on acquiring the degree they have been redesignated as Junior Engineers.
Several G.O.Ms were issued by the Government and the important one is G.O.Ms.
No. 559 (I & P) Department dated 18.7.77.
The post of Junior Engineers was made Gazetted post.
The case of the petitioners is that the respondents acquired degree qualification after 28.2.72 therefor they were not entitled to be appointed as regular Gazetted Junior Engineers and at any rate they cannot be treated as seniors on the basis of reckoning their seniority from the date of acquiring degree qualification and that the seniority of these graduate Supervisors should be reckoned from the date of their actual appointment as Junior Engineers and not from the date of acquiring degree qualification.
The respondent Supervisors, on the other hand contended that they are entitled to upgradation and weightage of service from the date of their appointment as Supervisors.
CIVIL APPEAL NO.
753/84 : This appeal is filed against the order in R.P. No. 548/79.
The petitioners in this R.P. are all Supervisors who graduated after 28.2.72.
Their contention was that they were appointed much before the respondents namely the directly recruited Junior Engineers and the services of the respondents Junior Engineers should not be regularised in such a way so as to effect the seniority of the petitioners and that the seniority of the petitioners should be reckoned from the notional date of appointment.
CIVIL APPEAL NO.
755/84 : This appeal is filed against the order in R.P. No. 140/81.
The sole petitioners before the Tribunal, who is a respondent here, questioned G.O.Ms.
No. 466 Transport, Roads and Building and sought a declaration that he should be declared as senior to respondent Nos. 3 and 5 and promote him to the post of Assistant Engineer.
The petitioner before the Tribunal was directly recruited Junior Engineer.
He also passed the SQT held in the year 1975.
The respondents before the Tribunal were upgraded Supervisors who acquired the graduate qualification.
G.O. Ms. No. 466 was issued 301 directing that the respondent before the Tribunal namely the upgraded Supervisors should be treated seniors to all the directly recruited Junior Engineers whose services were regularised on the basis of the SQT.
The Tribunal held that the findings in the other R.Ps.
799/77 and 548/79 apply to the facts of this case also and accordingly directed to prepare an inter se seniority list in the Transport, Roads and Buildings Department on the lines indicated therein.
R.P. was disposed of with those observations.
The upgraded Supervisors Junior Engineers who were the respondents before the Tribunal have filed this appeal.
These matters were heard together by the Tribunal.
After considering the various G.O.Ms.
and the arguments the Tribunal held that there was no bar to the retrospective regularisation of the services of the directly recruited Junior Engineers from the dates of their initial appointments.
It also held that the action of the Government in giving the benefit of the notional date of appointment to the upgraded Junior Engineers and the benefit of the date of regularisation of their services from the dates of their notional appointments subject to maintenance of order of ranking given by the Public Service Commission is justified.
The Tribunal further held that the order of ranking given by the Public Service Commission in respect of directly recruited Junior Engineers has to be maintained and each of them will have to be treated as being entitled to count his seniority from the date on which his service has been regularised or from the date of the regularisation of the service of the person immediately below him in the order of ranking given by the Public Service Commission, whichever is earlier.
In paragraph 23 of the Order the Tribunal specifically held thus: "23.
We are of the opinion that once the dates from which the directly recruited Junior Engineers can claim seniority are thus fixed on the basis of this formula, it should not be difficult to fix their inter se seniority vis a vis the upgraded Junior Engineers on the basis of the notional dates of appointment given to the latter.
In this connection we would like to point out that, whereas in the case of an upgraded Junior Engineer who acquired degree qualification before 28.2.1972, seniority will have to be fixed by putting him below all the regular Junior Engineers including directly recruited Junior Engineers who are entitled to claim seniority from any date during the year in which such upgraded Junior Engineer has been given the notional date of appointment, this practice cannot be followed in case of an upgraded junior Engineer who has acquired degree qualification after 28.2.1972, in view of the fact that the provision for fixing his seniority below other Junior Engineers 302 of the particular year (as was made in G.O. Ms. No. 893 dated 15.6.72) was not made in the amended Rule as issued under G.O.Ms.
No. 54 dt.
15.2.1983 His seniority will, therefore have to be fixed on the basis of the specific notional date of appointment given to him by interspersing his name among the regular Junior Engineers as arranged in chronological order of dates from which such regular Junior Engineers (including directly recruited Junior Engineers) are entitled to count their seniority.
" It is this part of the Order that has given rise to all these appeals before us.
The State of A.P. being aggrieved by this Order filed C.A. No. 752/84 and both petitioners and respondents namely the Junior Engineers directly recruited and upgraded Supervisors as Junior Engineers are the main respondents before us.
Civil Appeal Nos. 753 54 are filed by the upgraded Supervisors Junior Engineers.
In these two matters the Junior Engineers directly recruited are the respondents.
Thus in all these matters the Junior Engineers directly recruited are the respondents.
It is contended on behalf of State of A.P. that the direction given by the Tribunal particularly interspersing is not workable.
Learned counsel for the State, however, pointed out that the upgraded Supervisors have put in long years of service and they have been discharging the same duties as directly recruited Junior Engineers and that this fact also has to be borne in mind in fixing the notional date of appointment of the two categories officers and in fixing their inter se seniority.
Shri B.Kanta Rao, learned counsel appearing for all the upgraded Supervisors Junior Engineers contended that in G.O. Ms. No. 559 it is specifically laid down that Supervisor who have acquired graduate qualification may be appointed as Junior Engineers after 28.2.72 and the weightage of four years should be reckoned from the date of acquiring the degree qualification i.e. 28.2.72 or thereafter.
He also contended that the seniority of the upgraded Supervisor Junior Engineers should not be fixed from the date of the Order of appointment dated 8.8.77.
On behalf of the directly recruited Junior Engineers Shri K.Madhava Reddy, learned counsel submitted that the upgraded Supervisors can under no circumstances be treated as seniors to the directly recruited Junior Engineers.
According to him appointment of Junior Engineers was suspended for some time and in view of the exigencies the degree holders were appointed on temporary basis and they have served for a number of years.
Later the Government decided to make regular appointments and accordingly a Special 303 Qualification Test was held and such of those temporary Junior Engineers who were degree holders got qualified and were given the appointments and a seniority list strictly on the basis of performance in the test and on merit was prepared by the Public Service Commission and a retrospective effect was given.
His further submission was that so far as the upgraded Supervisors are concerned all the relevant G.O.Ms.
make it clear that the crucial date has to be reckoned on the basis of the actual date of appointment and not on the date of acquiring the degrees.
For appreciating these rival contentions it becomes necessary to refer to some of the G.O.Ms.
particularly with a view to arrive at the ("crucial date") in respect of each of these categories for the purpose of fixation of the seniority.
In respect of upgraded Supervisors who acquired a degree, certain G.O.Ms. were issued from time to time.
In the year 1972 G.O.Ms.
No. 893 dated 15.6.72 was issued amending the special rules for the A.P. Engineering Subordinate Service.
The same provided that Supervisors who while in service acquire B.E./A.M.I.E. degree qualification, shall be entitled to count 50% of the service rendered as Supervisors prior to the acquisition of such qualification subject to a maximum limit of four years.
This was subject to certain conditions.
One of the conditions was that they should be considered to have been placed below the last of the Junior Engineer of the year after giving such weightage.
In the year 1976 another G.O.Ms No. 451 (I & P) dated 10.6.76 ordered that the Supervisors who acquire the graduate qualification while in service should be appointed as Junior Engineers with immediate effect.
On 8.11.76 G.O.Ms. No.815 (I & P) was issued.
Clause 4 of the Conditions stipulated in G.O.Ms.
No.893 was amended and the benefit of the weightage was directed to be given effect only to those who acquired the aforesaid degree qualification prior to 28.2.72.
Then came the important G.O.Ms.
No. 559 (I & P) dated 18.7.77.
Relying on the contents of the above G.O.Ms.
the upgraded Supervisors claimed that the weightage of four years should be reckoned from the date of acquiring the qualification and not from the date of actual appointment.
The directly recruited Junior Engineers also based their claim on G.O. Ms. Ms. Nos. 451 and 559 and they further contended that the upgraded Supervisors should be treated as regularly appointed only with effect from the date of their appointment.
It may not be necessary for the purpose of this case to extract the entire contents of the G.O. Ms. that preceded G.O. Ms. Nos. 451 and 559.
It would suffice if we just give the gist of those respective G.O.Ms.
Under G.O.Ms.
No. 787 dated 9.6.71 the Government declared that posts of 304 Junior Engineers would be filled in by graduate Engineers which will be made a separate category and they will be made gazetted.
Therefore G.O.Ms. No.240 dated 28.2.72 was issued.
Under the said G.O.Ms. 1870 posts of Supervisors in Public Works Department were declared to constitute a category of Junior Engineers and similarly in the Roads and Buildings Department 620 posts were declared to constitute as a category of Junior Engineer as distinct from Supervisors and both these categories were made gazetted with effect from that date.
The G.O.Ms. also provided for temporary appointments in the case of qualified Junior Engineers being not available for filling up all such gazetted posts, and all these posts of Junior Engineers in both the Departments were declared to be within the purview of the A.P. Public Service Commission and the method of recruitment to the post of Junior Engineer should be by direct recruitment.
Then came the G.O. Ms. No. 893 dated 15.6.72 amending the special rules for the A.P. Engineering Subordinate Service under which the Supervisors who acquired the qualification were declared to be entitled to count 50% of their service subject to a maximum limit of four years for the purpose of promotion to the post of Assistant Engineer from Junior Engineer.
G.O. Ms. No. 782 dated 3.5.74 was issued permitting the Junior Engineers recruited during emergency on temporary basis to apply for SQT held by the Public Service Commission.
Accordingly the Rules were amended as per G.O. Ms. No. 786 dated 7.8.74 and the adhoc rules were framed enabling the computation of period of two years with or without break in the service rendered by such degree holders Junior Engineers who appeared in the SQT held by the Public Service Commission and were declared to be selected and thus their services were regularised retrospectively giving them the benefit of the service of two years rendered prior to the actual selection.
In conformity with the same Rule 33A was also relaxed for the purpose of fixing their inter se seniority.
The next important G.O.Ms.
with which we are concerned is G.O.Ms.
No. 451 dated 10.6.76.
It reads as under: "GOVERNMENT OF ANDHRA PRADESH ABSTRACT Establishment Irrigation and Power Department Appointment of Supervisors who have acquired Graduate Qualification as Junior Engineers Orders Issued.
Irrigation and Power (Ser.II) Department G.O. MS.
No. Dated: 10 6 1976 ORDER: Consequent on the declaration of the posts of Junior 305 Engineers as Gazetted with effect from 28.2.1972, the upgradation of Supervisors who acquired Graduate Qualification while in service, as Junior Engineers, ceased.
Since then representations have been made to Government by several Associations that the benefit of upgradation should be extended also to Supervisors who acquired the Graduate qualification on or after 28.2.1972.
On a reconsideration of the matter, the Governement are of the view that some consideration should be shown to the Supervisors who have acquired the Graduate qualification while in service.
Accordingly the Government have decided that the Supervisors in P.W. (Irrigation) Department who have acquired Graduate qualification while in service should be appointed temporarily as Junior Engineers (Prospectively) with immediate effect.
The Chief Engineer (General) is requested to take action accordingly, Orders regarding other consequential matters will issue separately.
(BY ORDER AND IN THE NAME OF THE GOVERNOR OF A.P.) M. GOPALAKRISHNAN, SECRETARY TO GOVERNMENT " Under this G.O. Ms. it is proposed to extend the benefit of upgradation to Supervisors who acquired the graduate qualification on or after 28.2.72 but the second para makes it clear that they should be appointed temporarily as Junior Engineers and that too prospectively only.
The next and the important G.O.Ms.
is No.559 dated 18.7.77 which reads as under: "GOVERNMENT OF ANDHRA PRADESH ABSTRACT ESTABLISHMENT Irrigation & Power Department Appointment by transfer of Supervisors who have acquired Graduate qualification from 28.2.1972 onwards as Junior Engineers Further orders Issued.
306 IRRIGATION & POWER (SERVICE III) DEPARTMENT G.O. Ms. No.559 Dated 18th July, 1977 Read the following: G.O. Ms. No.451, Irrigation & Power (Ser.
III) Department, dated 10.6.76.
ORDER: It was ordered in the G.O., cited that the Supervisors in the Public Works (Irrigation) Department, should be appointed temporarily as Junior Engineers (Prospectively) with immediate effect.
It was also indicated therein that orders regarding other consequential matters would issue separately.
Accordingly, matters relating to weightage, seniority, etc., have been examined by the Government and the following orders are issued: (i) Supervisors who acquire Graduate qualification may be appointed as Junior Engineers on or after 28.2.1972, subject to the availability of vacancies in the cadre of Junior Engineers.
They will not be entitled for appointment as Junior Engineers automatically from the date of acquisition of degree qualification; (ii) A Supervisor, who is appointed as Junior Engineer, shall be entitled to count 1/3rd of the service rendered by him as Supervisor, before his appointment as Junior Engineer, subject to a maximum of four years, for the purpose of computing the service as Junior Engineer, which will render him eligible for consideration for promotion as Assistant Engineer.
(iii) The seniority of the Supervisors, who are appointed as Junior Engineers, shall be fixed with reference to the notional date arrived at after giving weightage of service; (iv) A Supervisor, who is appointed as Junior Engineer, shall put in a minimum service of one year as Junior Engineer to become eligible for promotion as Assistant Engineer; (v) No Supervisor shall ordinarily be eligible for appointment as Junior Engineer unless he has put in a minimum service of three years as Supervisors.
A Supervisor with less than three years of service, who is appointed as Junior Engineer for any special reason, shall not be entitled to any weightage for his past service.
307 3.
Necessary amendment to the Special Rules for the Andhra Pradesh Engineering Service will be issued separately.
The Transport, Roads & Building/Panchayati Raj/Housing, Municipal Administration & Urban Development Department will issue amendments to the Special Rules with which they are concerned in accordance with the above decisions in consultation with the Andhra Pradesh Public Service Commission.
The cadre strength of Junior Engineers was last fixed in G.O.Ms.
No. 240, Public Works (VI) Department, dated 28.2.1972.
Since then a large number of posts of Junior Engineers/Supervisors have been sanctioned by Government.
The Chief Engineer (General) is requested to submit proposals for suitably enhancing the strength of the two orders.
(BY ORDER AND IN THE NAME OF THE GOVERNOR OF A.P.) M. GOPALAKRISHNAN, SECRETARY TO GOVERNMENT.
" G.O. Ms. No. 451 is referred to in this G.O.Ms.
and in the Preamble it is clearly noted that the appointments of the upgraded Supervisors as Junior Engineers should be temporary and prospectively only.
In Paragraph 2 (i) it is also made abundantly clear that they will not be entitled for appointment as Junior Engineers automatically from the date of acquisition of degree qualification.
Coming to the weightage it is clarified in paragraph 2 (ii) to the effect that a Supervisor who is appointed as Junior Engineer shall be entitled to count 1/3rd of the service rendered by him as Supervisor, before his appointment as Junior Engineer, subject to a maximum of four years and the same would be taken into account to render the appointee eligible for consideration for promotion as Assistant Engineer.
Paragraph 2 (iii) is very important regarding the seniority and the same has to be fixed with reference to the notional date arrived at after giving weightage of service, Paragraph 2 (v) gives a clue that the weightage could be from the date of appointment.
The Government, however, issued proceedings dated 8.8.77 and fixed the seniority of these upgraded Supervisors who acquired the degree qualification from the date of acquiring the degree.
We have already noted that vide G.O. Ms. No. 893 the special rules were amended.
After the G.O. Ms. No. 559 was issued, representations were made by the Association of Andhra Junior Engineers as well as from the Diploma holders Engineers Association.
Having considered these representations, the Government came out with another G.O. Ms. No. 593 dated 29.7.77 and clarified that the rules only refer to the date of appointment and does not refer to selection and that the seniority of an individual or a class or category has to be fixed according to the date of his first 308 appointment and not with reference to the date of selection and the Chief Engineer (General) was requested to fix the seniority accordingly.
The Chief Engineer (General) Vide proceedings No. Rc.
MI/58062/74 75 dated 8.8.77 fixed the seniority.
But in doing so he has taken the date of passing the examination by the upgraded Junior Engineers as the date of appointment.
As already noted this fixation of seniority was questioned before the Tribunal.
From the above resume of all the G.O.Ms.
it is clear that an interpretation of G.O. Ms. No. 559 would be decisive in the these matters.
In our view the G.O. Ms. No. 559 makes it abundantly clear that the appointments of these upgraded Supervisors who acquired the graduate qualification while in service, would be prospective only and that they would be entitled to the weightage of four years of service rendered before the appointment.
The G.O. Ms. does not anywhere indicate that the weightage should be from the date of acquiring the degree qualification.
It must be borne in mind that it is only after acquiring such degree qualification that a Supervisor is appointed as Junior Engineer and having regard to the service rendered by him the Government as a policy decided to give weightage of four years for the purpose of considering the eligibility for promotion as Assistant Engineer.
In this context it is pertinent to note that the degree holders were appointed temporarily because of a ban and later the Government again as a policy decision decided to make regular appointments by direct recruitment but enabled the degree holders who are in temporary service to appear in a SQT.
Again as a matter of policy the Government decided to give some weightage to the service rendered by them before the appointment by selection.
It can thus be seen that the Government in fixing the seniority for the purpose of future promotion of the appointees both the upgraded as well as those selected by the Public Service Commission in SQT has taken into account the past service rendered by them.
In the case of upgraded Junior Engineers weightage of four years ' service is given and in the other case two years ' weightage is given.
In this context it is contended on behalf of the upgraded Junior Engineers that the regularisation of the direct Junior Engineers retrospectively that is with effect from two years prior to the date of their appointments is unwarranted.
In this context the Tribunal has rightly pointed out that under Rule 23 A of the A.P. State and Subordinate Service Rules, 1962 if a person having been appointed temporarily under Rule 10 to a post borne on the cadre is subsequently appointed in the service in accordance with the rules he shall commence his probation from such subsequent date or the earlier date as the appointing authority may determine.
We agree with the Tribunal that there is no bar to the retrospective regularisa 309 tion of the service of the direct Junior Engineers.
However, in the instant case, it was a special selection by SQT restricted to the directly recruited Junior Engineers who had put in two years of service and the objective was to regularise their services.
As stated supra as a matter of policy the Government gave weightage to both the categories.
In Devi Prasad and others vs Government of Andhra Pradesh and others.
AIR 1980 SC 1185, G.O. Ms. No.893 referred to above was questioned on the ground of unreasonableness in the matter of giving weightage to the upgraded supervisors.
This Court held that in the light of their experience there is nothing unreasonable in giving them limited benefit or weightage.
It was further observed as under: "Ultimately; it is a matter of Government policy to decide what weightage should be given as between two categories of Government servants rendering somewhat similar kind of service.
In the present case, there may be truth in the case of the appellants that they are hit hard because of the new rule.
Dr. Chitale tried to convince us of the hardship that his clients sustain consequent on this rule and weightage conferred thereby.
But mere hardship without anything arbitrary in the rule does not call for judicial intervention, especially when it flows out of a policy which is not basically illegal.
However, Government must be interested in keeping its servants specially in strategic areas like engineering contended and efficient.
In so producing contentment, it may have to evolve a flexible policy which will not strike a group as inflicting hardship on them.
A sense of justice must permeate both the groups." However, the upgraded Junior Engineers who having got the benefit of four years ' service cannot be heard to say that similar weightage cannot be given to the direct recruits who prior to the selection were working on temporary basis.
Shri Kanta Rao, learned counsel relied on the decisions of this Court in Smt.
M.Nirmala and other vs State of Andhra Pradesh and others etc., [1986]3 SCC 647; Ashok Gulati and others vs B.S. Jain and others.
, [1986] Supp. SCC597; Direct Recruit Class II Engineering Officers ' Association vs State of Maharashtra and others, [1990] 2SCC 715 and Masood Akhtar Khan and others vs State of Madhya Pradesh and others, and contended that both the categories were discharging the same duties and there should not be any discrimination.
Learned counsel also relied on some unreported judgments of the Andhra Pradesh High Court in writ Petitions Nos.
1929, 1006 and 2387/ 310 73 and also Writ Petitions Nos.
3897/72.
We have perused all these judgments and we are of the view that such a question did not arise in these cases.
The question to be considered is from which date the weightage of four years ' service should be given to the upgraded Junior Engineers namely the Supervisors.
Is it the date of acquiring the degree qualification or the date of their appointment? Having given our earnest consideration and for the reasons stated above we hold that the weightage can be given only from the date of their appointment.
The Tribunal in the course of its order, however, observed that in accordance with the existing rules the appointments of these Junior Engineers from the notional date have to be cleared by the Public Service Commission and the appointments cannot be held to be regular appointments as long as they are not approved by the Public Service Commission.
Having referred to the Rules, the Tribunal in paragraph 18 observed thus: "We thus find that the appointment of the upgraded JEs as well as the direct JEs to the Gazetted posts have not been made strictly in accordance with the Rules and, hence, it is necessary for the Government to issue specific orders after following the procedure laid down in the Rules, in regard to their appointment to the Gazetted post of `Junior Engineers.
" Having so observed the Tribunal suggested some working formula in the meanwhile.
In evolving this formula the Tribunal further held thus.
"Thus, after having examined the points raised for and against the action taken by the Government in giving the upgraded Junior Engineers the benefit of the notional dates of appointment given to them and in giving the direct Junior Engineers benefit of the dates of the regularisation of their services from the dates of their initial appointment subject to the maintenance of the order ranking given by the P.S.C., we feel that the Government action in this respect was quite justified.
" Towards the end the Tribunal, however, observed that the seniority of the upgraded Junior Engineers who acquired the degree qualification before 28.2.72 will have to be fixed by putting them below all the regular Junior Engineers.
Likewise those who have acquired the degree qualification after 28.2.72 their seniority have to be fixed on the basis of notional date of appointment by "interspersing" among the regular Junior Engineers.
The learned counsel for the State of A.P. submitted that this exercise of "interspersing" becomes impossible at this stage.
311 Having given our careful consideration particularly to the fact that this litigation has been pending for the last so many years, about two decades.
We feel that it is high time a finality has to be reached by resolving the controversies and in this context we are of the view that the approval of the Public Service Commission in respect of these appointments need not be sought, if the Government has not already obtained the approval of the Public Service Commission.
To sum up, our conclusions are as under: (i) The weightage of four years in respect of upgraded Junior Engineers as provided in G.O. Ms. No. 559 has to be reckoned from the date of appointment and not the date of their acquiring the degree qualification; (ii) On the basis of that notional date, their inter se seniority has to be fixed; (iii) The regularisation of the degree holder Junior Engineers who passed the SQT by giving retrospective effect cannot be held to be illegal, and their seniority among themselves shall be subject to the order of ranking given by the Public Service Commission on the basis of the SQT; (iv) The Government shall prepare a common seniority list of the degree holders Junior Engineers and the upgraded Junior Engineers on the above lines and that list shall be the basis for all the subsequent promotions.
Promotions, if any, already given shall be reviewed and readjusted in accordance with the said seniority list; and (v) The approval of the Public Service Commission in respect of these appointments and their seniority thus fixed need not be sought at this distance of time.
Accordingly Civil Appeal Nos. 752 55/84 are disposed of as per the directions given above.
There will be no order as to costs.
S.L.P.(C) No. 5218/85: This Special Leave Petition arises out of a separate order passed by the A.P. Administrative Tribunal in R.P. No. 1473/80.
The petitioners before the Tribunal belong to A.P. Panchayati Raj Engineering Department in Zone No. 1.
They are all graduates in Civil Engineering and were temporarily appointed as Junior Engineers originally in the Public Works Department in 1969.
Their services were terminated for want of vacancies.
However, during the year 1973 they were again appointed in the A.P. Panchayati Raj Engineering Department.
They also appeared in the Spe 312 cial Qualifying Test and they were selected by the Public Service Commission and they were appointed as regular Junior Engineers.
They commenced their probation.
The respondents before the Tribunal were appointed as Supervisors and after they acquired the degree qualification they were designated as Junior Engineers.
The grievance of the petitioners was that the respondents could not have been put above the petitioners in the matter of seniority and their seniority should have been reckoned from the date of their acquiring the graduate qualification.
G.O. Ms. No. 422 issued by the Department declaring them as seniors to the petitioners, was specifically questioned before the Tribunal.
The Tribunal held that the impugned G.O.Ms. is vitiated firstly on the ground that the principles of natural justice have not been observed and secondly that the petitioners before the Tribunal who were the direct recruits and who were selected by the Public Service Commission after holding the SQT, are entitled to count their service in the ranking of Junior Engineers from the date of their appointment subject to the order regarding the maintenance of ranking given by the Public Service Commission.
The said order of Tribunal is questioned in this Special Leave Petition by the upgraded Junior Engineers who were the respondents before the Tribunal.
In this petition also the grounds raised are the same as in Civil Appeal Nos. 752 55/84.
The conclusion reached by us in the above matters also govern the points in this petition.
Accordingly this Special Leave Petition is disposed of in terms of the directions given in Civil Appeal Nos. 752 55/84.
There will be no order as to costs.
W.P. (C) No. 3566/85: This Writ Petition is filed under Article 32 of the Constitution of India.
The petitioners are all upgraded Junir Engineers of A.P. Panchayati Raj Engineering Service.
They have questioned G.O.Ms.
No. 376/84 under which some promotions were made on the basis of the inter se seniority list of the direct recruits and upgraded Junior Engineers.
The conclusions reached by us in Civil Appeals Nos.
752 55/84 also govern the points raised in this Writ Petition.
Accordingly the Writ Petition is disposed of in terms of the directions given in Civil Appeals Nos. 752 55/84.
There will be no order as to costs.
G.N. Matters disposed of.
| The defendant appellant No. 1 and plaintiff respondent were brothers and defendant appellant No. 2 was the wife of appellant No. 1.
The appellant No. 1 was in Government service ever since 1953.
The plaintiff respondent was looking after the entire agricultural property in the village.
Partition was effected during consolidation proceedings and entered in the revenue records and chaks were carved out in accordance with the share of the parties in the consolidation proceedings.
During the consolidation operation, the plaintiff respondent did not raise any dispute that he was owner of the entire property and the names of defendants appellants were wrongly mentioned as benami.
Later, the plaintiff respondent filed a suit on the ground that the suit land was purchased by him alone through 4 sale deeds dated 10.6.1968, 21.6.1968,17.1.1976, and 23.6.1977 wherein the names of the defendants appellants were included only as benamidar and he was the real owner of the land.
The defendants appellants contended that they had paid their part 16 of the sale consideration and the land was jointly purchased in the name of both the parties.
The trial court dismissed the suit holding that the names of the defendants appellants in the sale deeds were not mentioned as benamidars and that the plaintiff respondent did not take any objection in the consolidation proceedings.
When the plaintiff respondent filed an appeal before the first appellate court, it reversed the judgment and decree of the trial court and decreed the suit in favour of the plaintiff respondent.
The second appeal filed by the defendants appellants was dismissed by the High Court.
The defendants filed a special leave petition before this Court on 15th March 1988.
During the pendency of the special leave petition the Benami Transactions (Prohibition of the Right to Recover Property) Ordinance,1988 was promulgated on 19.5.1988.
The ordinance was replaced by the Benami Transactions (Prohibition) Act, 1988, which received the President 's assent on 5.9.1988.
The defendants filed an application on 1.5.1989 for allowing them to take additional grounds made available on the basis of the aforesaid `Benami Act '.
Thereafter special leave was granted by order dated 21.8.1989 and the parties were given liberty to file additional documents, if any, within four weeks.
The defendants appellants contended that the suit filed by the plaintiff respondent was not maintainable and barred under Section 49 of the U.P. Consolidation of Holdings Act, 1954 as the point regarding the land in question being benami was never raised by the plaintiff respondent during consolidation proceedings and the chaks were allowed to be recorded in the name of the defendant appellants.
The plaintiff respondent contended that if the ratio of Mithilesh Kumari 's case, JT.
1989(1) SC 275, was applied, it could be made available only in a case where appeal was pending before the higher Court and that no advantage could be taken by the defendants appellants, of Section 4 of the Benami Act, as no appeal was pending on the date when the Benami Act came into force.
17 On the question, whether any suit relating to benami transactions can be decreed after the coming into force of the Benami Act, this Court, allowing the appeal of the defendants, HELD : 1.01.
In a suit for recovery of benami property if any appeal is pending on the date of coming into force of Section 4, the appellate court can take into account the subsequent legislative changes.
[20C] 1.02.
The Law Commission 's view was that the legislation replacing the ordinance should be retrospective in operation and that no locus penitentia need be given to the persons who had entered in the benami transaction in the past.
[20G] 1.03.
In the present case the defendants, having lost in High Court, could have approached this Court only through a special leave petition under article 136 of the Constitution and it is only after the grant of such special leave that the appeal could be heard.
Though the special leave might have been granted subsequently on 21.8.89 but it is a fact that the Judgment and decree of the High Court had already been challenged by the defendant appellants, and it cannot be said that no appeal was pending before this Court simply on the ground that only special leave petition was pending when the Benami Act came into force.
[21C E] 1.04.
An appeal is a continuation of suit and in the present case, the appeal was pending before this Court.
The suit had been filed by the plaintiff respondent claiming that he was the real owner of the property and the names of the defendants appellants were mentioned in the saledeeds as benami.
[21E F] 1.05.
Section 4 of the Benami Act is a total prohibition against any suit based on benami transaction and the plaintiff respondent is not entitled to get any decree in such suit or in appeal.
[21F] Mithilesh Kumari and Anr.
v Prem behari Khare, J.T. , referred to . 2.01.
The expression "shall lie" in Section 4(1) and "shall allow" in Section 4(2) of the Benami Act are prospective and shall apply to present (future stages) and future suits, claims or actions only.
[20B] 2.02.
The expression "any property held benami" is not limited to any particular time, date or duration.
[20C] 18 3.
No foundations were laid in the written statement nor any issue was raised by the defendants appellants, on the question of applicability of Section 49 or th U.P. Consolidation of Holdings Act.
The defendants appellants cannot be allowed to take such plea.
[19H 20A]
|
Nos. 97, 97A, 44, 86 to 88, 111, 112, 85, 158, 211 to 251 and 225 to 229 of 1956.
Under Article 32 of the Constitution of India for the enforcement of Fundamental Rights ' N. C. Chatterji A. K. Sen, B. P. Maheshwari and Tarachan Brijmohan Lal, for the petitioners in Petitions Nos. 97 and 97A of 1956.
N. C. Chatterji and V. section Sawhney, for the petitioners in Petitions Nos.
44., 86 to 88, Ill and 112 of 1956.
N. C. Chatterji and D. N. Mukherji, for the petitioners in Petition No. 85 of 1956.
Purshottam Tirukumdas and 0.
P. Lal, for the petitioners in Petitions Nos.
211 to 215 of 1956.
section C. Isaacs and K. R. Chaudhuri.
for the petitioners in Petitions Nos.
225 to 229 of 1956.
Bhagirth Das and M. L. Kapur, for the petitioner in petition No. 158 of 1956.
C. K. Daphtary, Solicitor General of India, G. N. Joshi, Porpus A. Mehta and R. H. Dhebar, for the respondents (Union, of India, the Central Board of Revenue and various Income tax Officers in all petitions.) B. Sen and P. K. Ghose, for the State of West Bengal (Respondents Nos. 2 and 3 in Petitions Nos.211 to 215 of 1956).
December 21.
The Judgment of the Court was delivered by BHAGWATI J.
These petitions under article 32 of the Constitution raise a common question of law whether section 5 (7A) of the Indian Income tax Act, hereinafter 236 called the Act, is ultra vires the Constitution as infringing the fundamental rights enshrined in article 14 and article 19 (1) (g).
The facts which led to the filing of the petitions 'nay be shortly stated.
petitions Nos.
97 & 97 A of 1956: The petitioners are M/s. pannalal Binjrai, Oilmill owners, merchants and commission agents, carrying on business at Sahibganj in the district of Santhal Pargans, having their branch at 94 Lower Chitpur Road, Culcutta, petitioner No. 1, and R. B. Jamuna Das Chowdhury, resident of the same place and erstwhile karta of the Hindu undivided family, which carried on business in the name and style of M/S. Pannalal Binjr petetioner No. 2.
Before September 28, 1954, they, being assessed by the Income tax officer, Special Circle, Patna.
On September 28, 1954, the Central Board of Revenue made an order transferring their cases to the Income.tax Officer, Central Circle XI, Calcutta.
On January 22, 1955, the Central Board of Revenue transferred the cases of petitioner No. 2 to the Income tax Officer Central Circle VI,Delhi, and on July 12, 1955, it similarly transferred the cases of petitioner No. I to the same officer.
Prior to June 29, 1959, he had been assessed to income tax by the Income tax Officer, Special Survey Circle VII, Calcutta.
On June 29, 1955, the Central Board of Revenue transferred his case to the Income tax Officer, Special Circle, Ambala,, and the said officer continued the proceedings in the transferred case and also instituted further proceedings against the petitioner and assessed him under section 23 (4) of the Act for the assessment years 1946 47 and 1947 48.
Demands were made upon the petitioner for payment of the amount of income tax thus assessed whereupon he filed this petition impeaching the validity of the order of the Central Board 'of Revenue dated June 29, 1955, and the proceedings entertained by the Income tax Officer, Special ' Circle, Ambala,on the ground that section 5 (7A) of the Act was ultra vires the Constitution.
Before October 20, 1953, they were being assessed by the Income tax Officer,, Hoshiarpur, but on that date their case was transferred under section 5 (7A) of the Act by the Commissioner of Income tax to the Income tax Officer, Special Circle, Ambala.
The said officer continued the said case and reopened the assessment for the years 1944 45 to 1050 51 and completed the assessment for the assessment, years 1947 48, 1950 51 and 1951 52.
These petitioners also thereupon filed the petition challenging the validity of the order of transfer made by the Commissioner of Income tax on October 20, 1953, and the proceedings entertained by the Income tax Officer, Special Circle, Ambala, thereafter, on the same ground of the ultra vires character of section 5 (7A) of the Act.
of M/s bhagwan Das Sud & Sons and the cases of both these petitionrs were transferred to the Income tax Officer, Special 238 Circle, Ambala, as above, by the said respective orders.
Petitions Nos. 86, 87, 88, 111, 112 and 158 of 1956: These petitions may be compendiously described as the Amritsar group.
The petitioner in Petition No. 86/56 is Sardar Gurdial Singh, son of section Narain Singh.
The petitioner in Petition No. 87/56 is Dr. Sarmukh Singh, son of section Narain Singh.
The petitioner in Petition No. 112156 is section Ram Singh, soil of section Narain Singh.
These three are brothers and the petitioner in Petition No. 88/56 is the father, section Narain Singh, son of section Basdev Singh.
The father and the three sons were the directors in the Hindustan Embroidery Mills (Private) Ltd., petitioner No. 1 in Petition No. 111/56, which is located at Chheharta near Amritsar.
All these petitioners were, prior to the orders of transfer made by the Commissioner of Income tax under section 5(7A) of the Act, being assessed by the Income tax Officer, 'A ' Ward, Amritsar, but their cases were transferred on or about June 29, 1953, from the Income tax Officer, 'A ' Ward, Amritsar, to the Income tax Officer, Special Circle, Amritsar.
These cases were continued by the latter officer and notices under a. 34 of the Act were also issued by him against them for the assessment years 1947 48 to ' 1951 52.
Each one of them filed a separate petition challenging the said orders of transfer by the Commissioner of Income tax and the proceedings entertained by the Income tax Office r, Special Circle, Amritsar, against them on the score of the unconstitutionality of section 5 (7A) of the Act.
The petitioner in Petition No. 158/56 is one Shri Ram Saran Das Kapur, the head and karta of the Hindu undivided family carrying on business outside Ghee Mandi Gate, Amritsar.
His case also whichprior to the order complained against, was being entertained by the Income tax Officer, 'F ' Ward, Amritsar, was transferred on some date in 1954 by an order of the Commissioner of Income tax under section 5(7A) of the Act to the Income tax Officer, Special Circle, Amritsar.
No objection wag taken by the 239 petitioner to this order of transfer until after the assess.
ment order was passed against him but he also challenged the validity of the said order of transfer and the proceedings entertained by the Income tax Officer, Special Circle, Amritsar, thereafter, on the same grounds as the other petitioners.
Petitions NOs.211 to 215 of 1956: These petitions may be described as the Sriram Jhabarmull group.
Though ' separately filed, the petitioner in each of them is the same individuals Nandram Agarwalla, who is the sole proprietor Of a business which he carries on under the name and style of I Sriram Jhabarmull '.
It is a business, inter alia, of import and export of piece goods ' as commission agents, and dealers in raw wool and other materials.
The principal place of business is at Kalimpong, in the district of Darjeeling, though there is also a branch at Calcutta.
Prior to the orders of the Commissioner of Income tax under section 5(7A) of the Act complained against, the petitioner was being assessed by the Income tax Officer, Jalpaiguri, Darjeeling.
On June 8, 1946, there was a further transfer assigning the cases to the Income tax Officer, Central Circle 1, Calcutta, and on July 27, 1946, orders were passed by the Commissioner of Income tax Central, Calcutta, under section 5(7A) transferring the cases of the petitioner to the Income tax Officer, Central Circle IV, Calcutta.
These are the orders which are complained against as unconstitutional and void invalidating the proceedings which were continued and subsequently instituted by the Income tax Officer, Central Circle IV, Calcutta, against the petitioner on the score of the unconstitutionality of section 5(7A) of the Act.
It may be noted, however that these orders were all prior to the Constitution and 240 having been made on July 27, 1946, as aforesaid were followed up by completed assessment proceedings in respect of the said respective years and also certificate proceedings under section 46(2) of the Act.
There were further orders dated December 15, 1947, and sometime in September, 1948, transferring the cases of the petitioner from the Income tax Officer, Central Circle IV, Calcutta, to the Income tax Officer, Central Circle 1, Calcutta, and back from him to the Income tax Officer, Central Circle,IV Calcutta.
dated July 27, 1946, which was passed under section 5(7A) of the Act.
Petitions Nos.
225 to 229 of 1956: These Petitions may be classed as the Raichur group.
They concern the assessment for the respective assessment years 1950 5l, 1951 52, 1952 53, 1953 54 and 1954 55.
The petitioner in each of them is the same individual, one Kalloor Siddannal who resides and carries on business in Raichur in the State of Hyderabad as commission agent and distributor of agricultural products.
Income tax was first imposed in the Hyderabad State in 1946 by a special Act of the Legislature and the petitioner was assessed under the Hyderabad Income tax Act by the Additional Income tax Officer, Raichur, for the assessment years 1948 49 and 1949 50.
As from April 1, 195o, the Indian Income tax Act was applied to Hyderabad but the Additional Income tax Officer, Raichur, continued to assess the petitioner.
The cases in respect of the assessment years 1950 51, 1951 52 and 1952 53 were pending before that officer and proceedings were taken in connection with the assessment for those years.
On December 21, 1953, however, the Commissioner of Income tax Hyderabad, issued a notification under section 5(7) ordering that the case of the petitioner should be transferred from the Additional income tax Officer, Raichur, to the Income tax Officer, Special Circle, Hyderabad.
The latter officer continued the assessment proceedings and issued notices under section 22(.4) of the Act on July 1, 1954, November 2, 1954, November 30,1954, 241 December 19, 1954, and March 11, 1955, in respect of the said years of assessment.
Assessments for the said years were made on March 21, 1955, and on April 24, 1955, the petitioner made an application under section 27 of the Act to reopen the assessment for the year 1950 51 as on default under section 23 (4) of the Act.
It appears, however, that shortly before May 19, 1955, the Commissioner of Income tax, Hyderabad, made another order under section 5 (7A) and section 64 (5)(b) of the Act transferring all the cases of the petitioner to the main Income tax Officer, Raichur.
Curiously enough, the petitioner challenged both the orders one dated December 21, 1953, and the other made sometime in May, 1955, under section 5 (7A) of the Act and the proceedings continued and instituted by the respective officers thereunder as unconstitutional and void on the ground that section 5 (7A) was ultra vires the Constitution even though ultimately he was being assessed by the main Income tax Officer, Raichur, under the latter order.
This is the common question in regard to the ultra vires character of section 5 (7A) of the Act which is raised in all these petitions, though in regard to each group there are several questions of fact involving the consideration of the discriminatory character of the specific orders passed therein which we shall deal with hereafter in their appropriate places.
Section 5 (7A) of the Act runs as under: " 5 (7A) : The Commissioner of Income tax may transfer any ease from one Income tax Officer subordinate to him to another, and the Central Board of Revenue may transfer any case from any one Income tax Officer to another.
Such transfer may be made at any 'stage of the proceedings, and shall not render necessary the reissue of any notice already issued by the Income tax Officer from whom the case is transferred.
" This sub section was inserted by section 3 of the Indian Income tax Amendment Act, 1940 (XL of 1940) which was passed as a result of the decision of the Bombay High Court in Dayaldas Kushiram vs Commissioner of Income tax, (Central) (1) I.L.R. , 31 242 By the Indian Income tax Amendment Act, 1956 (XXVI of 1956) an explanation was added to section 5(7A) in the terms following as a result of the decision of this Court in Bidi Supply Co. v The Union of India(1): " Explanation : In this sub section, I case ' in relation to any person whose name is specified in the order of transfer means all proceedings under this Act in respect of any year which may be pending on the date of the transfer,, and includes all proceedings under this Act which may be commenced after the date of the transfer in respect of any year.
" Section 5(7A) together with the explanation thus falls to be considered by us in these petitions.
The argument on behalf of the petitioners is that a. 64, sub sections(1) and (2) of the Act confer upon the assessee a valuable right and he is entitled to tell the taxing authorities that he shall not be called upon to attend at different places and thus upset his business.
Section 5(7A) invests the Commissioner of Income tax and the Central Board of Revenue with naked and arbitrary power to transfer any case from any one Income tax Officer to another without any limitation in point of time, a power which is unguided and uncontrolled and is discriminatory in its nature and it is open to the Commissioner of Income tax or the Central Board of Revenue to pick out the case of one assessee from those of others in a like situation and transfer the same from one State to another or from one end of India to the other without 'specifying any object and without giving any reason, thus subjecting the particular assessee to discriminatory treatment whereas the other assessees similarly situated with him would continue to be assessed at the places where they reside or carry on business under section 64 (1) and (2) of the Act.
The discrimination involved in section 5(7A) is substantial in character and, therefore, infringes the fundamental right enshrined,in article 14 of the Constitution.
It also infringes article 19 (1) (g) in so far as it imposes an unreasonable restriction on the fundamental right to carry on trade or business (Vide Himmatlal Harilal Mehta vs The State of Madhya Pradesh(1)).
The very same question as regards the unconstitutionality of section 5(7A) of the Act had come up for decision before this Court in Bidi Supply Co. vs The Union of India (supra).
The case of the assessee there had been transferred by the Central Board of Revenue under section 5(7A) of the get from the Income tax Officer, District 111, Calcutta, to the Income tax Officer, Special Circle, Ranchi.
The order was an omnibus wholesale order of transfer expressed in general terms without any reference to any particular case and with out any limitation as to time and was challenged as void on the ground that section 5(7A) under which it had been passed was unconstitutional.
This Court, by a majority judgment, after discussing the general principles underlying article 14, did not adjudicate upon that question, observing at p. 276: "We do not consider it necessary, for the purpose of this case, to pause to consider whether the constitutionality of Sub section.(7A) of section 5 can be Supported on the principle of any reasonable classification laid down by this Court or whether the Act lays down any principle for guiding or regulating the exercise of discretion by the Commissioner or Board of Revenue or whether the sub section confers an unguided and arbitrary power on those authorities to pick and choose individual assessee and place that assessee at a disadvantage in comparison with other assessees.
All assessees are entitled to the benefit of those provisions except where a particular case or cases of a particular assessee for a particular year or years is or are transferred under sub section (7A) of section 5, assuming that section to be valid and if a particular case or cases is or are transferred his right under section 64 still remains as regards his other case or cases.
" The majority judgment then proceeded to consider the effect of such an omnibus order unlimited in point of time on the rights of the assessee and further observed in that context at p. 277: " This order is calculated to inflict considerable inconvenience and harassment on the petitioner.
Its books of account will have to be produced before the Income tax Officer, Special Circle, Ranchi a place hundreds of miles from Calcutta, which is its place of business.
There may be no suitable place where they can put up during that period.
There will certainly be extra expenditure to be incurred by it by way of railway fare, freight and hotel expenses.
Therefore the reality of the discrimination cannot be gainsaid.
In the circumstances this substantial discrimination has been inflicted on the petitioner by an executive fiat which is not founded on any law and no question of reasonable classification for purposes of legislation can arise.
Here "the State" which includes its Income tax department has by an illegal order denied to the petitioner, as compared with other Bidi mer chants who are similarly situate, equality before the law or the equal protection of the laws and the petitioner can legitimately complain of an infraction of his fundamental right under Article 14 of the Constitution.
" The question as to the constitutionality of section 5 (7A) of the Act was thus left open and the decision turned merely on the construction of the impugned order.
245 Learned counsel for the petitioners, however, lays particular stress on the observations of Bose, J., in the minority judgment which he delivered in that case whereby he held that sections 5 (7A) and 64 (5) (b) of the Act were themselves ultra vires article 14 of the Constitution and not merely the order of the Central Board of Revenue.
The learned Judge referred to a passage from the judgment of Fazl Ali, J., in The State of West Bengal vs Anwar Ali Sarkar(1) and also pointed out the decision of this Court in M/S. Dwarka Prasad Laxmi Narain vs The State of Uttar Pradesh and Two Others(2) and observed: " What is the position here? There is no hearing, no reasons are recorded: just peremptory orders transferring the case from one place to another without any warning; and the power given by the Act is to transfer from one end of India to the other; nor is that power unused.
We have before us in this Court a case pending in which a transfer has been ordered from Calcutta in West Bengal to Ambala in the Punjab." (p. 283) "
If the Legislature itself had done here what the Central Board of Revenue has done and had passed an Act in the bald terms of the order made here transferring the case of this petitioner, picked out from others in a like situation, from one State to another, or from one end of India to the other, without specifying any object and without giving any reason, it would, in my judgment, have been bad.
I am unable to see how the position is bettered because the Central Board of Revenue has done this and not Parliament." (p. 284 5) "
In my opinion, the power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced, however briefly, to writing so that men may know that (1) ; , 309 310.`(2) ; 246 the powers conferred on these quasi judicial bodies are being justly and properly exercised." (p. 287)
The answer furnished on behalf of the State to this argument is fourfold: (i)that the provision contained in section 5 (7A) of the Act is a measure of administrative convenience enacted with a view to more conveniently and effectively deal with the cases of the assessees where the Commissioner of Income tax considers it necessary or desirable to transfer any case from one Income tax Officer subordinate to him to another or the Central Board of Revenue similarly considers it necessary or desirable to transfer any case from any one Income tax Officer to another.
The real object with which section 5 (7A) was inserted by the Indian Income tax Amendment Act, 1940 (XL of 1940), has been thus set out in the affidavit of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, dated November 19, 1956, which is the pattern of all the affidavits filed on behalf of the State in these petitions: " 4.
I say that the provisions of section 5 (7A) were inserted by the Income tax Amendment Act, XL of 1940, with the object of minimising certain procedural difficulties.
Before this amendment was passed there was no specific provision in the Act for transferring a case from one Income tax Officer to another except by a long and circuitous course even at the request of the assessees.
In order therefore to be able to transfer the case from one 1.
to another either because of the request of the assessee or for dealing with cases involving special features such as cases of assessees involving widespread activities and large ramifications or inter related transactions, power to transfer cases was conferred upon the Central Board of Revenue and the Commissioner of Income tax as the case may be.
I say that the provisions of section 5 (7A) ate thus administrative in character. . (ii)that the assessee whose case is thus transferred is not subjected to any discriminatory procedure in the matter of his assessment.
The Income tax Officer to whom his case is transferred deals with it under the same procedure which is laid down in the relevant 247 provisions of the Act.
The decision of the Income tax Officer is subject to appeal before the Appellate Assistant Commissioner and the assessee has the further right to appeal to the Income tax Appellate Tribunal and to approach the High Court and ultimately the Supreme Court, as provided in the Act.
All assessees, whether they are assessed by the Income tax Officer of the area where they reside or carry on business or their cases are transferred from one Income tax Officer to another, are subject to the same procedure and are entitled to the same rights and privileges in the matter of redress of their grievances, if any, and there is no dis crimination whatever between assessees and assessees; (iii)that the right, if any, conferred upon the assessee under section 64 (1) and (2) of the Act is not an absolute right but is circumscribed by the exigencies of tax collection and can be negatived as it has been in cases where the Commissioner of Income tax or the Central Board of Revenue, as the case may be, think it necessary or desirable to transfer his case from one Income tax Officer to another under section 5 (7A) of the Act having regard to all the circumstances of the case.
The argument of inconvenience is thus sought to be met in the same affidavit: " 5. 1 further say that as a result of any transfer that may be made under the provisions of section 5 (7A) there is no discriminatory treatment with regard to the procedure and that no privileges and rights which are given to the assessees by the Income tax Act are taken away nor is the assessee exposed to any increased prejudice, punitary consequences or differential treatment.
I say that in cases where transfers under this section are made otherwise than on request from assessees, the convenience of the assessees is taken into consideration by placing the case in the hands of an Income tax Officer who is nearest to the area where it will be convenient for the assessee to attend.
If on account of administrative exigencies this is not possible and the assessee requests that the examination of accounts or evidence to be taken should be in a place convenient to him, the I.T.O. complies with the request 248 of the assessee and holds the hearing at the place requested.
" Even if there be a difference between assessees who reside or carry on business in a particular area by reason of such transfers the difference is not material.
It is only a minor deviation from a general standard and does not amount to a denial of equal rights; (iv)that the power which is thus vested is a discretionary power and is not necessarily discriminatory in its nature and that abuse of power is not to be easily assumed where discretion is vested in such high officials of the State.
Even if abuse of power may sometimes occur, the validity of the provision cannot be contested because of such apprehension.
What may be struck down in such cases is not the provision itself but the discriminatory application thereof.
The petitioners rejoin by relying upon the following passage from the judgment of Fazl Ali, J., in The State Of West Bengal vs Anwar Ali Sarkar, (Supra), which was referred to by Bose, J., in his minority judgment in Bidi Supply Co. vs The Union of India, (Supra), at page 281: " It was suggested that the reply to this query is that the Act itself being general and applicable to all persons and to all offenses, cannot be Said to discriminate in favour of or against any particular case or classes of persons or cases, and if any charge of discrimination can be leveled at all, it can be levelled only against the act of the executive authority if the Act is misused.
This kind of argument however does not appear to me to solve the difficulty.
The result of accepting it would be that even where discrimination is quite evident one cannot challenge the Act simply because it Is couched in general terms; and one cannot also challenge the act of the executive authority whose duty it is to administer the Act, because that authority will say: I am not to blame as I am acting under the Act.
It is clear that if the argument were to be ,accepted, article 14 could be easily defeated.
I think the fallacy of the argument lies in overlooking the fact that the I insidious discrimination complained of is incorporated in the Act itself ', it being so drafted 249 that whenever any discrimination is made such discrimination would be ultimately traceable to it.
The pivot of the whole argument of the petitioners is the provisions contained in section 64(1) and (2) of the Act which prescribe the place of assessment.
They are: " 64.
(1) Where an assessee carries on a business, profession or vocation at any place, he shall be assessed by the Income tax Officer of the area in which that place is situate or, where the business, profession or vocation is carried on in more places than one, by the Income tax Officer of the area in which the principal place of his business, profession or vocation is situate.
(2)In all other cases, an assessee shall be assessed by the Income tax Officer of the area in which he resides.
" These provisions were construed by the Bombay High Court in Dayaldas Kushiram vs Commissioner Income tax, (Central), (supra), and Beaumont, C.J., observed at p. 657: " In my opinion section 64 was intended to ensure that as far as practicable an assessee should be assessed locally, and the area to which an Income tax Officer is appointed must, so far as the 'exigencies of tax collection allow, bear some reasonable relation to the place where the assessee carries on business or resides." Kania, J., as he then was, went a step further and stated at p. 660: "A plain reading of the section shows that the same is imperative in terms.
It also gives to the assessee a valuable right.
He is entitled to tell the taxing authorities that he shall not be called upon to attend at different places and thus upset his business.
" The learned Judges there appear to have treated the provisions of section 64(1) and (2) more as a question of right than as a matter of convenience only.
If there were thus a right conferred upon the assessee by the provisions of section 64(1) and (2) of the Act and that right continues to be enjoyed.
by all the assessees except the 32 250 assessee whose case is transferred under section 5(7A) of the Act to another Income tax Officer outside the area where he resides or carries on business, the assessee can urge that, as compared with those other assessees, he is discriminated against and is subjected to inconvenience and harassment.
It is, therefore, necessary to consider whether any such right is conferred upon the assessee by section 64(1) and (2) of the Act.
Prima facie it would appear that an assessee is entitled under those provisions to be assessed by the Income tax Officer of the particular area where he ,resides or carries on business.
Even where a question arises as to the place of assessment such question is under section 64(3) to be determined by the Commissioner or the Commissioners concerned if the question is between places in more States than one or by the Central Board of Revenue if the latter are, not in agreement and the assessee is given an opportunity of representing his views before any such question is determined.
This provision also goes to show that the convenience of the assessee is the main consideration in determining the place of assessment.
Even so the exigencies of tax collection have got to be considered and the primary object of the Act, viz., the assessment of income tax, has got to be achieved.
The hierarchy of income tax authorities which is set up under Chapter 11 of the Act has been so set up with a view to assess the proper income tax payable by the assessee and whether the one or the other of the authorities will proceed to assess a particular assessee has got to be determined not only having regard to the convenience of the assessee but also the exigencies of tax collection.
In order to assess the tax payable by an assessee more conveniently and efficiently it may be necessary to have him assessed by an Income tax Officer of an area other than the one in which, he resides or carries on business.
It may be that the nature and volume of his business operations are such as require investigation into his affairs in a place other than the one where he resides or carries on business or that he is so, connected with various other individuals or organiza tions in the way of his earning his income as to render 251 such extra tertitorial investigation necessary: before he may be properly assessed.
These are but instances of the various situations which may arise wherein it may be thought necessary by the Income tax authorities to transfer his case from the Income tax, Officer of the area in which he resides or carries on business to, another Income tax Officer whether functioning in the same State or beyond it.
This aspect of the question wag emphasized by Beaumont, C.J., in Dayaldas Kushiram vs Commissioner of Income tax, (Central), (supra), at page 146, when he used the expression " as far as practicable " in connection with the assessee 's right to be assessed locally and the expression " so far as exigencies of tax collection allow " in connection with the appointment of the Income tax Officer to assess the tax payable by the particular assessee.
In the later case of Dayaldas Kushiram vs Commissioner of Income tax, (Central)(1), Beaumont, C.J., expressed himself as follows: " The Income tax Act does not determine the place of assessment.
What it does is to determine the Officer who is to have power to assess and in some cases it does so by reference to locality but I apprehend that an appeal would be not against an order of the Commissioner as to the place of assessment, but against the order of assessment of the Income tax, Officer," thus stating in effect that this section does not give a right to the assessee to have his assessment, at a parti cular place but determines the Income tax Officer who is to have power to assess him.
This aspect was further emphasized by the Federal Court in Wallace Brothers & Co. vs Commissioner of, Income tax, Bombay, Sind & Baluchistan (2), where Spens, C.J., observed: Clause (3) of section 64 provides that any question as to the place of assessment shall be determined ' by the Commissioner or by the Central Board of Revenue Proviso 3 to the clause enacts that if the place of assessment is called in question by the assessee, the Income tax Officer shall, if not satisfied, with the (1) , 101.(2) A.I.R. 1945 F.C. 9,13.252 correctness of the claim, refer the matter for determination under this sub section before assessment is made.
These provisions clearly indicate that the matter is more one of administrative convenience than of jurisdiction and that in any event it is not one for adjudication by the Court.
" It may be noted, however, that in the passage at page 276 of the majority judgment in Bidi Supply Co. vs The Union of India (supra), this court regarded the benefit conferred on the assessee by these provisions of a. 64(1) and (2) of the Act as a right and it is, too late in the day for us to say that no such right to be assessed by the Income tax Officer of the particular area, where he resides or carries on his business is conferred on the assessee.
This right, however, according to the authorities above referred to, is hedged in with the limitation that it has to yield to the exigencies of tax collection.
The position, therefore, is that the determination of the, question whether a particular Income tax Officer should assess the case of the assessee depends on (1) the convenience of the assessee as posited in section 64 (1) and (2) of the Act, and (2) the exigencies of tax collection and it would be open to the Commissioner of Income tax and the Central Board of Revenue who are the highest amongst the Income tax.
Authorities under the Act to transfer the case of a particular assessee from the Income tax Officer of the area within which he resides or carries on business to any other Income tax Officer if the exigencies of tax collection warrant the same.
It is further to be noted that the infringement of such a right by the order of transfer, under section 5 (7A) of the Act is not a material infringement.
It is only a deviation of a minor character from the general standard and does not necessarily involve a denial of equal rights for the simple reason that even after such transfer the case is dealt with under the normal procedure which is prescribed in the Act.
The production and investigation of the books of account, the enquiries to be made by the Income tax Officer and the whole of the procedure as to assessment including the further 253 appeals after the assessment is made by the Incometax Officer are the same in a transferred case as in others which remain with the Income tax Officer of the area in which the other assesees reside or carry on business.
There is thus no differential treatment and no scope for the argument that the particular assessee is discriminated against with reference to others similarly situated.
It was observed by this Court in, M. K. Gopalan vs The State of Madhya Pradesh(1): " In support of the objection raised under article 14 of the Constitution, reliance is placed on the decision of this Court in Anwar Ali Sarkar 's case.
In the pre ' sent case, the Special Magistrate under section 14 of the Criminal Procedure Code has to try the case entirely under the normal procedure, and 'no discrimination of the kind contemplated by the decision in Anwar Ali Sarkar 'd case and the other cases following it arises here.
A law vesting discretion in an authority under such circumstances cannot be said to be discriminatory as such, and is therefore not hit by article 14 of the Constitution.
There is, therefore, no substance in this contention."
To a similar effect were the observations of Mukherjea, J., as he then was, in The State of West Bengal vs Anwar Ali Sarkar, (supra), at p. 325: "I agree with the Attorney General that if the differences are not material, there may not be any discrimination in the proper sense of the word and minor deviations from the general standard might not amount to denial of equal rights deemed never at any time to have applied to an assessee where, in consequence of any transfer made under section 5 (7A), a particular Income tax Officer has been charged with the function of assessing that assessee.
section 64 (5) was incorporated by the Income tax Law Amendment Act, 1940 (XL of 1940) simultaneously with section 5 (7A).
It is ' therefore, urged that an assesse whose case has been thus transferred has no right under section 64 (1) and (2) and those assessees alone who do not come within the purview of section 64 (5) can have the benefit of section 64 (1) and (2).
This argument, however, ignores the fact that section 5 (7A) is the very basis of the enactment of the relevant provision in section 64 (5) and if a. 5 (7A) cannot stand by virtue of its being discriminatory in character, the relevant portion of section 64 (5) also must fall with it.
It is then contended that a. 5 (7A) is in itself discriminatory and violative of the fundamental right en shrined in article 14.
The power which is vested in the Commissioner of Income tax and the Central Board of Revenue is a naked and arbitrary power unguided and uncontrolled by any rules.
No rules have been framed and no directions given which would regulate or guide their discretion or on the basis of which such transfers can be made and the whole matter is left to the unrestrained will of the Commissioner of Income tax or the Central Board of Revenue without there being anything which could ensure a proper execution of the power or operate as a check upon the injustice that might result from the improper execution of the same.
To use the words of Mr. Justice Matthews in the case of Yick Wo vs Hopkins(1): ". when we remember that this action or nonaction may proceed from enmity or prejudice, from partisan zeal or animosity, from favoritism and other improper influences and motives easy of concealment and difficult to be detected and exposed, it becomes unnecessary to suggest or comment upon the injustice capable of being wrought under cover of such a power, for that becomes apparent to every one who gives to the subject a moment 's consideration." , 373; , 227.255
In other words, " it is not a question of an uncon stitutional administration of a statute otherwise valid on its face but here the unconstitutionality is writ large on the face of the statute itself " (Per Das, J., as he then was, in The State of West Bengal vs Anwar Ali, Sarkar, (supra) at p. 346).
It has to be remembered that the purpose of the Act is to levy income tax, assess and collect the same.
The preamble of the Act does not say so in terms it being an Act to consolidate and amend the law relating to income tax and super tax but that is the purpose of the Act as disclosed in the preamble of the First Indian Income tax Act of 1886 (Act II of 1886).
It follows, therefore, that all the provisions contained in the Act have been designed with the object of achieving that purpose.
There is in the first instance, the charge of income tax.
Then we find set up the various authorities in the hierarchy who are entrusted with the function of assessing the income tax, the Central Board of Revenue being at the apex.
There is also an Appellate Tribunal which is established for hearing appeals against the decisions of the Appellate Assistant Commissioners.
Then follow the provisions in regard to taxable income, mode of assessment and cognate provisions.
The Income tax Officers are invested with the duty ' of assessing the income tax of the assessees in the first instance.
The Assistant Commissioners of Income tax, are the appellate authorities over the decisions of the Income tax Officers and the Income tax Appellate Tribunal is the final appellate authority barring of course references under section 66(1) of the Act to the High Court on questions of law.
The Commissioners of Income tax and the Central Board of Revenue are mainly administrative authorities over the Income tax Officers and the Assistant Commissioners of Income tax and they are to distribute and control the work to be done by these authorities.
All officers and persons employed in the execution of the Act are to observe and follow the orders instructions and directions of the.
Central Board of Revenue which is the highest authority in the hierarchy and, even though normally in accordance 256 with the provisions of section 64 (1) and (2) the work of assessment is to be done by the Income tax Officers of the area within which the assessees reside or carry on business, power is given by section 5(7A) to the Commissioner of Income tax to transfer any case from one Income tax Officer subordinate to him to another and to the Central Board of Revenue to transfer any case from any one Income tax Officer to another.
This is the administrative machinery which is set up for assessing the incomes of the assessees which are chargeable to income tax.
There is, therefore, considerable force in the contention which has been urged on behalf of the State that section 5(7A) is a provision for administrative convenience.
Nevertheless this power which is given to the Commissioner of Income tax and the Central Board of Revenue has to be exercised in a manner which is not discriminatory.
No rules or directions having been laid down in regard to the exercise of that power in particular cases, the appropriate authority has to determine what are the proper cases in which such power should be exercised having regard to the object of the Act and the ends to be achieved.
The cases of the assessees which come for assessment before the income tax authorities are of various types and no one case is similar to another.
there are complications introduced by the very nature of the business which is carried on by the assessees and there may be, in particular cases, such widespread activities and large ramifications or inter related transactions as might require for the convenient and efficient assessment of income tax the transfer of such cases from one Income tax Officer to another.
In such cases the Commissioner of Income tax or the Central Board of Revenue, as the case may be, has to exercise its discretion with due regard to the exigencies of tax collection.
Even though there may be a common attribute between the assesses whose case is thus transferred and the assessees; who continue to be assessed by the Income tax Officer of the area within which they reside or carry on business, the other attributes would not be common.
One assessee may 257 have such widespread activities and ramifications as would require his case to be transferred from the Income tax Officer of the particular area to an Income tax Officer of another area in the same State or in another State, which may be called " X ".
Another assessee, though belonging to a similar category may be more conveniently and efficiently assessed in another area whether situated within the State or without it, called " Y ".
The considerations which will weigh with the Commissioner of Income tax or the Central Board of Revenue in transferring the cases of such assessee either to the area " X " or the area " Y " will depend upon the particular circumstances of each case and no hard and fast rule can be laid down for determining whether the particular case should , be transferred at 'all or to an Income tax Officer of a particular area.
Such discretion would necessarily have to be vested in the authority concerned and merely because the case of a particular assessee is transferred from the Income tax Officer of an area within which he resides or carries on business to another Income tax Officer whether wit in or without the State will not by itself be sufficient to characterize the exercise of the discretion as discriminatory.
Even if there is a possibility of discriminatory treatment of persons falling within the same group or category, such possibility cannot necessarily invalidate the piece of legislation.
It may also be remembered that this power is vested not in minor officials but in top ranking authorities like the Commissioner of Income tax and the Central Board of Revenue who act on the information supplied to them by the Income tax Officers concerned.
This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials.
(Vide Matajog Dobey vs H. section Bhari(1)).
There is moreover a presumption that public officials will discharge their duties honestly and in accordance with the rules of law.
(Vide People of the State of (1) ; , 932.33 258 New York vs John E. Van De Carr, etc.(1)
It has also been observed by this Court in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti(2) with reference to the possibility of discrimination between assessees in the matter of the reference of their cases to the Income tax Investigation Commission that " It is to be presumed, unless the, contrary were shown, that the 'administration of a particular law would be done I not with an evil eye and unequal hand ' and the selection made by the Government of the cases of persons to be referred for investigation by the Commission would not be discriminatory." This presumption, however, cannot be stretched too far and cannot be carried to the extent of always holding that there must be some undisclosed and unknown reason for subjecting certain individuals or corporations to hostile and discriminatory treatment (Vide Gulf, Colorado, etc.
vs W. H. Ellis (3)).
There may be cases where improper execution of power will result in injustice to the parties.
It is pointed that it will be next to impossible for the assessee to challenge a particular order made by the Commissioner of Income tax or the Central Board of Revenue, as the case may be, as discriminatory because the reasons.
which actuated the authority in making the order will be known to itself not being recorded in the body of the order itself or communicated to the assesse.
This apprehension is, however, ill founded.
Though the (1) ; (1905) 310 199 U.S. 552; (2) (1955)2 section C. R. 1196.
(3) ; ; 41 L.Ed. 666.
(4) [1955] I S.C.R. 140.
259 burden of proving that there is an abuse of power,lies on the assessee who challenges the order as discriminatory, such burden is not by way of proof to the hilt.
There are instances where in the case of an accused person rebutting a presumption or proving an.
exception which will exonerate him from the liability for the offence with which he has been charged, the burden is held to be discharged by evidence satisfying the jury of the probability of that which the accused is called upon to establish (Vide Rex vs Carr Briant (1)), or in the case of a detenue under the Preventive Detention Act seeking to make out a case of want of bona fides in the detaining authority, the burden of proof is held not to be one which requires proof to the hilt but such as will render the absence of bona fides reasonably probable (Vide Ratanlal Gupta vs The District Magistrat of Ganjam also Brundaban Chandra Dhir Narendra vs The State of Orissa (Revenue Department) (3)).
If, in a particular ,case, the assessee seeks to impeach the order of transfer is an abuse of power pointing out circumstances which prima facie and without anything more would make out the exercise of the power discriminatory qua him, it will be incumbent on the authority to explain the circumstances under which the order has been made.
The court will, in that event, scrutinize these Circumstances having particular regard to the object sought to be achieved by the enactment of section 5(7A) of the Act as set out in para 4 of the affidavit of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, quoted above, and come to its own conclusion as to the bona fides of the order and if it is not satisfied that the order was made by the authorities in bona fide exercise of the power vested in them under section 5(7A) of the Act, it will certainly quash the lame.
(3) I.L.R. 1952 Cuttack 529, 573.260 record.
The observations of Fazl Ali, J., in The State of West Bengal vs Anwar Ali Sarkar, (supra), at pages 309 310 that the authority will say " I am not to blame as I am acting under the Act " will not necessarily save the order from being challenged because even though the authority purported to act under the Act its action will be subject to scrutiny in the manner indicated above and will be liable to be set aside if it was found to be mala fide or discriminatory qua the assessee.
Particular stress is laid on behalf of the petitioners on the observations at page 277 of the majority judgment in Bidi Supply Co. vs The Union of India, (supra), which in the context of the omnibus wholesale order in question emphasized the substantial discrimination to which the assessee there had been subjected as compared with other bidi merchants who were similarly situated.
The inconvenience and harassiment to which the assessee was thus put were considered to be violative of article 14 of the Constitution and it is urged that section 5 (7A) is unconstitutional in Boar as it is open to the Commissioner of Income tax or the Central Board of Revenue, as the case may be, to make an order of transfer subjecting the assessee to such inconvenience and harassment at their sweet will and pleasure.
This argument of inconvenience, however, is not conclusive.
There is no fundamental right in an assessee to be assessed in a particular area or locality.
Even considered in the context of section 64 (1) and (2) of the Act this right which is conferred upon the assessee to be assessed in a particular area or locality is not an absolute right but is subject to the exigencies of tax collection.
The difference, if any, created in the position of the assessee qua others who continue to be assessed by the Income tax Officer of the area in which they reside or carry on business is not a material difference but a minor deviation from the general standard and would, therefore, not amount to the denial of equal rights (Per Mukherjea, J., as he then was, in The State of West Bengal vs Anwar Ali Sarkar., (supra), at 261 p. 325)).
There is also the further fact to be borne mind that this inconvenience to the assessee is sough to be minimised by the authority concerned transferring the case of such assessee to the Income tax Officer who is nearest to the area where it would be convenient for the assessee to attend and if, on account of administrative exigencies, this is not possible an the assessee requests that the examination of account or evidence to be taken should be in a place convenient to him, by the Income tax Officer complying with the request of the assessee and holding the hearing at the place requested.
We are bound to take the statement contained in para 5 of the affidavit of Shri.V. Gouri Shankar at its face value and if this is done as it should be, the assessee will not be put to any inconvenience or harassment and the proper balance between the rights of the subject and public interest will be preserved.
It is, therefore, clear that the power which is veste in the Commissioner of Income tax or the Central Board of Revenue, as the case may be, under section 5 (7A) of the Act is not a naked and arbitrary power, unfettered, unguided or uncontrolled so as to enable the authority to pick and choose one assessee out of those similarly circumstanced thus subjecting him to discriminatory treatment as compared with others who fall within the same category.
The power is guided and controlled by the purpose which is to be achieved by the Act itself, viz., the charge of income tax, the assessment and collection thereof, and is to be exercised for the more convenient and efficient collection of the tax A wide discretion is given to the authorities concerned for the achievement of that purpose, in the matter of the transfer of the cases of the assessees from one Income tax Officer to another and it cannot be urged that such power which is vested in the authorities is discriminatory in its nature.
There is a broad distinction between discretion which has to be exercised with regard to a fundamental right guaranteed by the Constitution and some other right which is given by the statute.
If the statute deals with a right which is not fundamental in character 262 the statute can take it away but a fundamental right the statute cannot take away.
Where, for example, a discretion is given in the matter of issuing licences for carrying on trade, profession or business or where restrictions are imposed on freedom of speech, etc., by a imposition of censorship, the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions.
Discretion of that nature must be differentiated from discretion in respect of matters not involving fundamental rights such as transfers of cases.
An inconvenience resulting from a change of place or venue occurs when any case is transferred from one place to another but it is not open to a party to say that a fundamental right has been infringed by such transfer.
Ili other words, the discretion vested has to be looked at from two points of view, ViZ., (1) does it admit of the possibility of any real and substantial discrimination, and (2) does it impinge on a fundamental right guaranteed by the Constitution? Article 14 can be invoked only when both these conditions are satisfied.
Applying this test, it is clear that the discretion which is vested in the Com missioner of Income tax or the Central Board of Reevenue, as the case may be, under section 5 (7A) is not at all discriminatory.
It follows, therefore, that section 5 (7A) of the Act is not violative of article 14 of the Constitution and also does not impose any unreasonable restriction on the fundamental right to carry on trade or business enshrined in article 19 (1) (g) of the Constitution.
If there is any abuse of power it can be remedied by appropriate action either under article 226 or under article 32 of the constitution and what can be struck down is not the provision contained in section 5 (7A) of the Act but the order passed thereunder which may be mala fide or violative,of these fundamental rights.
This challenge of the vires of section 5 (7A) of the Act, therefore, fails.
We may, however, before we leave this topic observe that it would be prudent if the principles of natural justice are, followed, where circumstances permit, before any order of transfer under section 5 (7A) of the Act is made by the Commissioner of Income tax or the 263 Central Board of Revenue, as the case may be, and notice is given to the party affected and he is afforded a reasonable opportunity of representing his views on the question and the reasons of the order are reduced however briefly to writing.
It is significant that when any question arises under section 64 as to the place of assessment and is determined by the Commissioner or Commissioners or by the Central Board of Revenue, as the case may be, the assessee is given an opportunity under section 64(3) of representing his views before any such question is determined.
If an opportunity is given to the assessee in such case, it is all the more ,surprising to find that, when an order of transfer under section 5(7A) is made transferring the case of the assessee from one Income tax 'Officer to another irrespective of the area or locality where he resides or carries on business, he should not be given such an opportunity.
There is no presumption against the bona fides or the honesty of an assessee and normally the Income tax authorities would not be justified in refusing to an assessee a reasonable opportunity of representing his views when any order to the prejudice of the normal procedure laid down in section 64 (1) and (2) of the Act is sought to be made against him, be it a transfer from one Income tax Officer to another within the State or from an Income tax Officer within the State to an Income tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected.
If the reasons for making the order are reduced however briefly to writing it will also help the assessee in appreciating the circumstances which make it necessary or desirable for the Commissioner of Income tax or the Central Board of Revenue, as the case may be, to transfer his case under section 5(7A) of the Act and it will also help the court in determining the bona fides of the order as passed if and when the same is challenged in court as mala fide or discriminatory.
It is to be hoped that the Income tax authorities will observe the above procedure wherever feasible.
The next point of attack is that the orders which Were made by the Commissioner of Income tax or the 264 Central Board of Revenue, as the case may be, in these petitions are omnibus wholesale orders of transfer coming within the mischief of Bidi Supply Co. vs The Union of India, (supra), and are, therefore, hit by the majority judgment in that case.
The answer of the State is that the orders are valid by virtue of the explanation to section 5(7A) which was added by the Indian Income tax Amendment Act, 1956 (26 of 1956).
The main structure of section 5(7A) was, however, maintained and the explanation was added thereto in order to expand the connotation of the word " case " which was used in section 5(7A).
The manner in which this result was brought about is subject to criticism that the word ,case" was thus really equated with the word " file " and when a case of a particular assessee was transferred under section 5(7A) it was meant that his whole file would be transferred from one Income tax Officer to another.
This inartistic mode appears, however to be adopted by the supposed necessity of maintaining section 5(7A) in the form in which it stood but what we have got to see is whether the desired result has been achieved by adding the explanation in the manner in which it was done.
Reading section 5(7A) and the explanation thereto, it is clear that when any case of a particular asssssee which is pending before an Income tax Officer is transferred from that officer to another Income tax Officer whether within the State or without it, all proceedings which are pending against him under the Act in respect of the same year as also previous years are meant to be transferred simultaneously and all proceedings under the 265 Act which may be commenced after the date of such transfer in respect of any year whatever are also included therei in so that the Income tax Officer to whom such case is transferred would be in a position to continue the pending proceedings and also institute further proceedings against the assessee in respect of any year.
The proceedings pending at the date of transfer can be thus continued but in the case of such proceedings the provision in regard to the issue of notices contained in the main body of section 5(7A) would apply and it would not be necessary to reissue any notice already issued by the Income tax Officer from whom the case is transferred.
This provision applies to pending proceedings which have been transferred leaving unaffected the further proceedings which may be commenced against the assessee after the date of the transfer where fresh notices would have to be issued.
It is, however, contended that the cases of the assessee which have been already closed in the previous years cannot be reopened by the Income tax Officer to whom the case of the assessee is thus transferred and the words " after the date of transfer in respect of any year " occurring at the end of the explanation are sought to be construed to mean " after the date of the transfer in respect of the year of transfer " thus rendering it incompetent to the Income tax Officer to whom the case is transferred to institute further proceedings in respect of cases of the assessee which have been already closed before the date of transfer.
This contention is, in our opinion, unsound.
The words used are " in respect of any year" and not " in respect of the year ".
Moreover they are to be read with the preceding words "may be commenced " and not with the words "after the date of transfer".
A proper reading of the explanation will be that the inclusive part thereof refers to all proceedings under the Act which may be commenced in respect of any year after the date of the transfer.
The date of the transfer has relation only to the particular year in which the case of the assessee is thus transferred and to attach the words " in respect of any year " to the words " after 34 266 the date of transfer" do not make any sense.
The words " in respect of any year " appropriately go with the words " which may commenced" and read in this juxtaposition render the inclusive part of the explanation susceptible of a proper meaning.
The language of the explanation read in the manner suggested above is thus sufficient to dispel this contention of the petitioners.
it follows, therefore, that the omnibus wholesale orders of transfer made against the petitioners by the Commissioner of Income tax or the Central Board of Revenue, as the case may be, are saved by the explanation to section 5(7A) and are not unconstitutional and void: It remains now to consider whether the individual orders against the petitioners are discriminatory in fact or are mala fide and in abuse of the power vested in the Commissioner of Income tax or the Central Board of Revenue, as the case may be, under section 5(7A) of the Act.
Petitions Nos.
211 to 215 of 1956, i.e., the Shiram Jhabarmull group, may be dealt with in the first instance as they have a peculiar characteristic of their own.
The orders complained against in these petitions were all made by the Commissioner of Income tax Central, Calcutta, on July 27, 1946, and further proceedings were entertained against the petitioners by the Income tax Officer, Central Circle IV, Calcutta, immeasurable thereafter.
All these proceedings culminated in assessment orders and certificate proceedings under section 46(2) of the Act were also taken by the authorities against the petitioners for recovery of the tax so assessed before the advent of the Constitution.
The question, therefore, arises whether these orders of transfer can be challenged by the petitioners as unconstitutional and void.
It is settled that article 13 of the Constitution has no retrospective effect and if, therefore, any action was taken before the commencement of the Constitution in pursuance of the provisions of any law which was a valid law at the time when such action was taken, such action cannot be challenged and the law under 267 which such action was taken cannot be questioned as unconstitutional and void on the score of its infringing the fundamental rights enshrined in Part III of the Constitution (See Keshavan Madhava Menon vs The State of Bombay(1)).
The following observations of Das, J., as he then was, at p. 235 of that case, may be appropriately referred to in this context: "As already explained, article 13(1) only has the effect of nullifying or rendering all inconsistent existing laws ineffectual or nugatory and devoid of any legal force or binding effect only with respect to the exercise of fundamental rights on and after the date of the commencement of the Constitution.
It has no retrospective effect and if, therefore, an act was done before the commencement of the Constitution in contravention of any law which, after the Constitution, becomes void with respect to the exercise of any of the fundamental rights, the inconsistent law is not wiped out so far as the past act is concerned, for, to say that it is, will be to give the law retrospective effect. .
So far as the past acts are concerned the law exists, notwithstanding that it does not exist with respect to the future exercise of fundamental rights." (See also Syed Qasim Razvi vs The State of Hyderabad(2) and Laxmanappa Hanumanthappa Jamkhandi vs Union of India(1)).
It is clear, therefore, that the petitioners are not entitled to complain against the said orders of transfer dated July 27, 1946.
225 to 229 of 1956, i.e., the Raichur group, and Petitions Nos. 86, 87, 88, 111, 112 and 158 of 1956, i.e., the Amritsar group, all belong to the same category.
In the first group, there was an order of transfer on December 21, 1953, passed by the Commissioner of Income tax, Hyderabad, transferring the cases of the petitioner from the Additional Income tax Officer, Raichur, to the Income tax, Officer, Special Circle, Hyderabad.
There was, however, an order passed by the Commissioner shortly before May 19, 1955, transferring the cases of the petitioner from the Income tax (1) ; , 235.
(2) (3) ; 268 Officer, Special Circle, Hyderabad, to the main Income tax Officer, Raichur.
The petitioner thus reverted to the Income tax Officer, Raichur, and it passes one 's imagination what possible argument he can urge on the score of inconvenience and harassment.
The whole attitude of the petitioner is motivated by an intention to delay the payment of income tax legitimately due by him to the Revenue trying to take advantage of a mere technicality.
In the second group, there were orders passed by the Commissioner of Income tax transferring the cases of the petitioners from the Income tax Officer, "AWard, Amritsar, or the Income tax Officer, 'F 'Ward, Amritsar, to the Income tax Officer, Special Circle, Amritsar.
Both these officers were situated in the same building and under the same roof.
The argument of inconvenience and harassment can, under these circumstances, be hardly advanced by them.
There is moreover another feature which is common to both these groups and it is that none of the petitioners raised any objection to their cases being transferred in the manner stated above and in fact submitted to the jurisdiction of the Income tax Officers to whom their cases had been transferred.
It was only after our decision in Bidi Supply Co. vs The Union of India, (supra), was pronounced on March 20, 1956, that these petitioners woke up and asserted their alleged rights, the Amritsar group on April 20, 1956, and the Raichur group on November 5, 1956.
If they acquiesced in the jurisdiction of the Income tax Officers to whom their cases were transferred, they were certainly not entitled to invoke the jurisdiction of this Court under article 32.
It is well settled that such conduct of the petitioners would disentitle them to any relief at the hands of this Court (Vide Halsbury 's Laws of England ', Vol.
II, 3rd Ed., p. 140, para 265; Rex vs Tabrum, Ex Parte Dash(1); 0. A. 0.
K. Lakshmanan Chettiar vs Commissioner, Corporation of Madras and Chief Judge,Court of Small Causes, Madras(2) ).
The orders of transfer made by the Commissioner of Income tax or the Central Board of Revenue, as the (1) (2) [1927] 1.
L. R. 269 case may be, against the three groups of petitioners, viz., Sriram Jhabarmull group, the Raichur group and the Amritsar group, cannot, therefore, be challenged by them as unconstitutional and void This leaves two sets of petitioners, the petitioners in Petitions Nos.
97 & 97 A of 1956 and the petitioners in Petitions Nos.
44/56 and 85/56.
Petitions Nos.
97 & 97 A of 1956 : The petitioners are oilmill owners, merchants and commission agents, carrying on business at Sahibganj in the district of Santhal Parganas and have a branch at 97, Lower Chitpur Road, Calcutta.
They were alleged to have concealed income exceeding Rs. 8 lakhs and indulged in business activities spread over a wide area resulting in large profits not disclosed in the books of account or in the various returns filed by them.
After the judgment of this Court in Surajmull Mohta & Co. vs A. V. Viswanatha Sastri(2), about 320 cases referred to the Income tax Investigation Commission under section 5 (4) of Taxation on Income Investigation Commission Act (XXX of 1947) were affected and had to be reopened under section 34 (IA) of the Income tax Act.
To dispose of these cases, "since they involved many back years ' cases" quickly and promptly, special circles without reference to area were created at Bombay and Calcutta, because the existing circles, whose hands were full, could not take up this extra work.
These 320 cases were distributed between these circles on the basis of the geographical area to which these assessees belonged.
The petitioners belonged to Bihar and had a branch at Calcutta and their cases were, therefore, allotted to one of the Central Circles at Calcutta.
Later on in October 1954, this Court struck down section 5 (1) of the Taxation on Income Investigation Commission Act (XXX of 1947) in Meenakshi Mills Ltd. vs Viswanatha Sastri.
(2 ) and as a result thereof cases referred under that section and pending with the (I) [1055] 1 S.C. R. 448.
(2) [1955] I S.C. R. 787.
270 Income tax Investigation Commission on July 17,1954, could not be preceded with under the provisions of that Act.
These cases numbering about 470 had to be reopened under section 34 (1A) of the Income tax Act.
The Government thought that as in the earlier lot of cases, it would help speedier disposal of the cases, if they were allotted to Income tax Officers appointed without reference to area to deal with the same.
In addition to the circles already created in Bombay and Calcutta, five more circles at Calcutta and 4 more circles at Bombay and 9 more circles at important centers such as Kanpur, Ahmedabad, Madras and Delhi were set up to deal with all these cases.
As a result of the influx of these cases, it was found that the 9 circles at Calcutta had about 280 cases of assessees belonging to Calcutta itself to dispose of and therefore cases not belonging to that area had to be taken out and assigned to one of the newly created circles, Where the work load was low.
It was found then that Central Circle VI had a lower work load compared to other circles and, therefore, the cases of the petitioners were transferred to the Income tax Officer, Central Circle VI, Delhi.
Having regard to these circumstances which are disclosed in the affidavits of Shri V. Gouri Shankar, Under Secretary, Central Board of Revenue, dated November 19, 1956, and December 3, 1956, it is clear that the transfer of the cases of the petitioners, firstly, from the Income tax Officer, Special Circle, Patna, to the Income tax Officer, Central Circle XI, Calcutta, and next, from the latter officer to the Income tax Officer, Central Circle VI, Delhi, were made as a matter of administrative convenience only.
It further appear; from the said affidavits that the examination of accounts and the evidence was done at the places desired by the assessees in order to suit their convenience and the Income tax Officers were instructed accordingly.
As a matter of fact the Income tax Officer, Central Circle VI, Delhi, went to Sahibganj and examined the accounts there in the case of the petitioner No. 1 and when the assessee voluntarily requested the Income tax Officer to have 271 the examination done at Delhi (the assessee had then come to Delhi for some other work of his) the Income tax Officer promptly posted the case and examined the accounts.
If these were the circumstances under which the cases of the petitioners were transferred from Patna to Calcutta and from Calcutta to Delhi and the petitioners were afforded all conveniences in the matter of the examination of their accounts and evidence, there is no basis for the charge that the orders of transfer made against these petitioners were in any manner whatever discriminatory.
Petitions Nos. 44 and 85 of 1956 The petitioner in Petition No. 44/56 is Shri A. L. Sud who originally belonged to Hoshiarpur district in Punjab and since 1948 resides and has his office in Calcutta.
Bhagwan Das Sud as the karta thereof.
This Hindu undivided family has been carrying on business at Hoshiarpur and at various other places like Bareilly, Calcutta and Bombay.
The said joint family of Bhagwan Das Sud & Sons was alleged to have evaded income tax to a large extent and had inter related transactions in respect of their dealings, the petitioner being a copartner of the said joint family.
It was, therefore, considered necessary in order to have a proper assessment of the petitioner 's income that his case also should be dealt with by the Income tax Officer assessing the joint family and the petitioner was informed that, in the matter of hearing, he would be put to least inconvenience.
These were the circumstances under which his case was transferred from the Income tax Officer, Survey Circle, Calcutta, to the Income tax Officer, Special Circle, Ambala, by an order of the Central Board of Revenue dated June 29, 1955.
The case of M/S. Bhagwan Das Sud & Sons, petitioners in Petition No. 85/56; had already been 272 transferred by the Commissioner of Income tax from the Income tax Officer, Hoshiarpur, to the Income tax Officer, Special Circle, Ambala, by an order under section 5(7A) of the Act dated October 20, 1953.
The petitioners had their office at Hoshiarpur in Punjab but their activities were scattered in various parts of India some of them being in Assam, Bombay, Bareilly, Calcutta and Kanpur in respect of the contracts they undertook with the Government and other parties.
They were alleged to have concealed income assessable to income tax exceeding Rs. 30 lakhs and it was thought necessary to make proper investigation of their widespread activities resulting ' in extensive evasion of income tax.
These were the circumstances under which their case was transferred to the Incometax Officer, Special Circle, Ambala, as above.
That officer, however, agreed to examine the accounts and evidence at Hoshiarpur itself to suit the convenience of the petitioners but the petitioners did not agree on the ground that their Advocate was to come from Delhi and therefore Ambala would suit them as well.
The cases of both the petitioners thus came to be transferred from the respective Income tax Officers who used to assess them at Calcutta and Hoshiarpur respectively to the Income tax Officer, Special Circle, Ambala, and all conveniences were afforded to them in the matter of the examination of their accounts and evidence.
The argument of discrimination and inconvenience and harassment thus loses all its force and the orders of transfer made against them cannot be challenged as in any way discriminatory.
It may be noted that in the last mentioned four petitions, viz., Petitions Nos. 97 & 97 A of 1956 and Petitions Nos.
44/56 and 85/56, the Central Board of Revenue or the Commissioner of Income tax, as the case may be, instructed the Income tax Officers concerned to minimise the inconvenience caused to the assessees and even proceed to their respective residences or places of business in order to examine the accounts and evidence.
Inspite of the denials of the assessees in the affidavits which they filed in 273 rejoinder, we presume that such facilities will continue to be afforded to them in the future and the inconvenience and harassment which would otherwise be caused to them will be avoided.
A humane and considerate administration of the relevant provisions of the Income tax Act would go a long way in allaying the apprehensions of the assessees and if that is done in the true spirit, no assessee will be in a position to charge the Revenue with administering the provisions of the Act with " an evil eye and unequal hand ".
We have, therefore, come to the conclusion that there is no substance in these petitions and they should be dismissed with costs.
There will, be, however, one set of costs between respondents in each of the petitions and one set of costs in each group of these petitions, viz., (1) Petitions Nos.97 & 97 A of 1956, (2) Petitions Nos.44/56 and 85/56, (3) Petitions Nos. 86/56, 87/56, 88/56, 111/56, 112/56 and 158/56, (4) Petitions Nos.211 to 215 of 1956, and (5) Petitions Nos. 225 to 229 of 1956.
| These petitions on behalf of the assessees raised the common question as to the constitutionality of section 5(7 A) of the Indian Income tax Act, which was raised but not decided by this Court in Bidi Supply Co. V. The Union of India, ; Reliance was placed on the observations of Bose, J. in his Minority judgment in that case and it was contended that the section read with the explanation, subsequently added to it as a result of that decision,conferred arbitrary and uncontrolled powers of transfer on the Income tax Commissioner and the Central Board of Revenue, was discriminatory and violative of the provisions of article 14 and imposed an unreasonable restriction on the right to carry on trade or business in contravention of article 19(1)(g) of the Constitution.
It was further contended that the omnibus wholesale orders of transfer made without any reference to any particular case or without any limitation as to time were inconvenient and discriminatory and ran counter to the majority judgment in that case.
The contention of the Central Board of Revenue, supported by affidavits filed on its behalf, was that the section was intended to minimize administrative inconvenience, there was no discrimination after transfer because the same relevant provisions of the Act as applied to others similarly situated, were applied after the transfer and any resulting inconvenience to the assessee was sought to be minimised by transferring his case either to the nearest area or, where that was not feasible, by examining his accounts or evidence, if required by him, at a place suited to his convenience and that the wholesale omnibus orders of transfer were covered by the explanation: Held, that section 5(7A) of the Indian Income tax Act was a measure of administrative convenience, was constitutionally valid and did not infringe any of the fundamental rights conferred by articles 14 and (19)(g) of the Constitution and the orders of transfer in question were saved by the explanation: to that section and. were constitutionally valid.
30 234 The right conferred on the assessee by section 64(1) and (2) of the Act was not an absolute right and must be subject to the primary object of the Act itself, namely, the assessment and collection of income tax, and where the exigencies of tax collection so required, the Commissioner of Income tax or the Central Board of Revenue had the power under section 5(7A) of the Act to transfer his case to some other officer outside the area where he resided or carried on business and any difference in his position created thereby as compared to that of others similarly situated would be no more than a minor deviation from the general standard and would not amount to a denial of equality before the law.
This discretionary power vested in the Authorities by the section to override the statutory right of the assessee must be distinguished from the discretion that has to be exercised in respect of a fundamental right guaranteed by the Constitution and the two tests to judge whether it was discriminatory would be, (I) whether it admitted of the possibility of any real and substantial discrimination and (2) whether it impinged on a fundamental right guaranteed by the Constitution and, so judged, the discretion vested in the Authorities by section 5(7 A) of the Act was not at all discriminatory nor did the section impose any unreasonable restriction on the fundamental right to carry on trade or business.
Bidi Supply Co. vs The Union of India, ; M.K. Gopalan vs The State of Madhya Pradesh, (1955) I S.C.R.168 ; The State of West Bengal vs Anwar Ali Sarkay, ; ; Dayaldas Kushiram vs Commissioner of Income tax, (Central),, I.L.R. ; Dayaldas Kushiram vs Commissioner of Income tax, Central, ; and Wallace Brothers & Co., Ltd. vs Commissioner of Income tax, Bombay, Sind & Baluchistan, A.I.R. 1945 F.C. 9, discussed.
The explanation added to the section by the Amending Act XXVI Of 1956, was intended to expand the connotation of the ' term 'case ' used in the section and included both pending proceedings as also other proceedings under the Act which might be commenced in respect of any year after the date of transfer and as such the orders in question were not unconstitutional or void.
The Income Tax Authorities, however, must be held bound by the statements made in their affidavits and where an assessee could make out a prima facie case of a mala fide or discriminatory exercise of the discretion ' vested in them, the Court will scrutinise the circumstances in the light of those statements and where necessary quash an abuse of the power under articles 226 and 32 Of the Constitution.
Ratanlal Gupta vs The District Magistrate of Ganjam, I.L.R. 1951 Cuttack 441 and Brundaban; Chandra Dhir Narendra vs 235 The State of Orissa (Revenue Department), I.L.R. 1952 Cuttack 529, referred to.
The Income tax Authorities should follow the rules of natural justice and, where feasible, give notice of the intended transfer to the assessee concerned in order that he may re_ resent his view of the matter and record the reasons of the transfer, however briefly, to enable the Court to judge whether such transfer was mala fide or discriminatory, if and when challenged.
|
Appeals Nos. 494 496 of 1962.
Appeal from the judgment and decrees dated March 12, 1957, of the Andhra Pradesh High Court in A.S. Nos.
566 to 568 of 1961.
A.V. Viswanatha Sastri, T.V.R. Tatachari and B.R.G.K. Achar, for the appellants.
Bhimsankaram, Chander Kohli and E. Udayaratnam, for respondents.
November 20, 1963.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This judgment will dispose of Civil Appeals Nos. 494 to 496 of 1962.
The State of Andhra Pradesh which now stands substituted for the Provincial Government of Madras is the appellant.
The respondent is one J.S. Basappa, a groundnut oil merchant of Kurnool who was selling oil within the Province and also exported it to extra Provincial points.
These three appeals concern salestax for the years 1944 45, 1945 46 and 1946 47.
They arise out of three suits filed by Basappa against the Provincial Government of Madras now represented by the Government of Andhra Pradesh, the details of which are given below.
For the year 1944 45, Basappa was assessed to sales tax amounting to Rs. 12,983 2 2 of which, according to him, a sum of Rs. 1,594 1 5 only represented sales within the Province.
He claimed that the remaining sales took place outside the Province of Madras.
He submitted that property in the goods remained with him till the export of the goods to an extraProvincial point and till payment of price after export.
He claimed that these sales could not be included in 519 his 'turnover under the Madras General Sales tax Act, 1939 (Act No. IX of 1939) and sales tax was wrongly demanded from him.
In respect of this assessment, he filed O.S. No. 14 of 1950 (original No. 0.
section 40 of 1949) in the Court of the Subordinate Judge, Kurnool for refund of Rs. 11,389 0 9 ps.
The Madras State Government in a written statement traversed 'all the allegations and stated that delivery of the goods was made in Kurnool when the goods were booked and further that the goods were despatch.
ed at buyer 's risk and remained at buyer 's risk through out, it also contended that the notice under section 80 was not proper and the suit was not in accordance with that notice and was not maintainable because the orders under the Sales tax Act were made final by section 11(4) of the Sales tax Act and because Basappa had not exhausted his other remedies under the Salestax Act.
Lastly, it contended that the suit was barred by time not having been filed within six months from 'the date of the act complained of as required by section 18 of the Sales tax Act or within one year as required by article 16 of the Indian Limitation Act.
In respect of the year 1945 46, Basappa filed O.S. No. 44 of 1949 claiming a refund of Rs. 8,356/on similar grounds, and in respect of the year 1946 47 he filed O.S. No. 23 of 1949 for a declaration that the levy of Rs. 9,23 3 6 7 was illegal and without jurisdiction and for a permanent injunction to restrain the taking authority from collecting the tax.
In this suit, in addition to the 'defences also taken in the other suits it was contended that, the suit was incompetent as a revision application was pending with the Board of Revenue.
These suits were disposed of by the Subordinate Judge,, Kurnool by a common judgment dated February 22, 1951.
The main points which were decided were: (1) whether the suits were not maintainable as (a) the civil court had no jurisdiction and (b) the assessee had not exhausted his other remedies, (2) whether the suits were barred by time, and ( 3) whether the sales took place outside the Province of Madras and the 520 levy of the tax in respect of some of the transactions was illegal.
The Subordinate Judge held that.
there was nothing in the Sales tax Act to exclude the jurisdiction of, the civil court and that the finality spoken of by s ' 11 ,of the Sales tax Act was, a finality arising under the Sales tax Act and had, no reference to , the jurisdiction of the civil court.
He also held that Basappa was not required to exhaust his other remedies before moving the civil court by suit.
On, the second point, the Subordinate Judge: held that O.S. No. 14 of 1950 and 44 of 1949 were barred by time under section 18 of the Sales tax Act or article 16 of the Limitation Act whichever might be applied.
The learned Subordinate Judge held that article 62 of the Limitation Act was not 'applicable because Basappa had not pleaded in these two .suits that payment of the, tax was made under a mistake.
The Subordinate Judge,, however, held that O.S. No. 23 of 1949 was in time.
In O.S. No. 14 of 1 950 and 44 of 1949, he recorded findings that tax amounting to Rs. 7,203 12 9 in respect of O.S. 14 of 1950 and Rs. 5,370 7 0 in respect of O.S. No. 44 of 1949 were wrongly levied,, because those amounts concerned sales which took place outside the Province of Madras.
In O.S. 23 of 1949 he held that sales of the value of Rs. 79,465/ took Place outside the Province and tax in respect of them at 1 % (which was the uniform rate applicable to all the three years) was not demandable. ' A declaration to this 'effect ' was granted and an injunction was issued restraining the State Government ' from recovering Rs. 793 10 6 from Basappa.
In the result.
O.S. No.14 f 1950 and 44 of 1949 were dismissed ' 'with costs and O. section No. 23 'of 1949 was 'partially decreed with proportionate costs.
Basappa appealed in: all the three suits against the decision, of the Subordinate; Judge, Kurnool.
The Government of Madras objected in the appeal of Basappa from% the. decision in 0.S. No. 23 of 1949 in respect: of the decree for Rs. 793 10 6.
In the High Court, ' applications were made in, the appeals for urging an: additional ground that the whole assess 521 ment, was invalid because it included an illegal levy which was not severable from the legal demand.
This ground 'was based upon the decision of this Court in M/s. Ram.
Narain Sons Ltd. vs Assistant Commissioner of Sales Tax and others (1) This request was not opposed and permission was granted to Basappa.
The High Court differed from the Subordinate Judge on the question of limitation and held that neither section 18 of the Sales tax Act nor article 16 of the Limitation Act was applicable to.
, the suits, which were governed by article 62 'of the Limitation Act.
The High Court accordingly held that O.S. 14 of 1950 and O.S. 44 of 1949 which were dismissed as barred by time were not barred.
On the ' main question, the High Court classified all the sales into four categories which were: 1.
Where the plaintiff himself was the consignor as well as the consignee, 2.
Where the plaintiff himself was the consignor and the 'buyer the consignee, 3.
Where the buyer was the consignor as well as the consignee, and 4.
Where a third party was shown as the consignor, the consignee being the plaintiff.
The Subordinate Judge had held that sales tax was properly demandable in respect of categories 2 and 3 but not in respect of categories 1 and 4.
The second part of the decision was not assailed before the High Court.
The High Court again considered categories 2 and 3 and held that sales coming under those categories were properly assessable to sales tax as the sales took place within the Province of Madras.
The High Court, however,, acting upon the decision of this court in Ram Narain 's case(1) held that the legal and the illegal levies were so mixed up that the entire demand for tax was rendered illegal and void.
In the result, the appeals filed by Basappa were allowed and the cross objection filed by the Provincial Government of Madras was dismissed.
The High Court certified these cases and the present appeals have been filed.
(1) ; 522 Three questions are raised by Mr. A.V. Viswanatha Sastri.
They are, (1) that the civil court had no Jurisdiction to try these suits, (2) that the suits O.S. 14 of 1950 and 44 of 1949 were barred by time under section 18 of the Sales tax Act and (3) that the High Court was wrong in holding that the assessments were not capable of being split up and in declaring the total assessments to be void.
The first two points give no trouble at all.
Section 18 of the Act reads: "No suit shall be instituted against the, Govern.
ment and no suit, prosecution or other proceeding shall be instituted against any Officer or servant of the State Government in respect of any act done or purporting to be done under this Act, unless the suit, prosecution or other proceeding is instituted within six months from the date of the act complained of.
" This section applies to suits for damages and compensation in respect of acts under the Act.
It is worded in familiar language by which 'authorities, including Government, are protected and indemnified in respect of bona fide acts done or purporting to be done under powers conferred by the statute.
The periodof limitation prescribed in the section does not apply to the kind of suits which were filed by Basappa.
This Point has no substance and was not even pressed in the High Court.
Similarly, the first point must also be decided against the State of Andhra Pradesh, because of a recent, decision of this court in Firm of tlluri Subhayya Chetty Sow vs The State of Andhra Pradesh(1) That case was decided under section 18A of the Madras General Sales tax Act which was inserted by section 10 of the Madras General 'Sales tax Amendment Act, 1951 which came into force on May 15, 1951.
That section reads "No suit or other proceeding shall, except as expressly 'provided in this Act, be instituted (1) ; 523 in any Court to set aside or modify: any assessment made under this Act.
" The present appeals have to be decided without the assistance of section 18A, because the suits were filed in the Court of Subordinate Judge, Kurnool and were decided by him before the amendment came into force .
Prior to the insertion of section 18A there was no: specific provision taking away the jurisdiction of the civil court except section 11(4) by which a finality attached to orders passed in appeal.
Under that section, appeals were provided in respect of orders of assessment and there was also a provision for revision in section 12.
It was provided by sub section
(4) of section II that "every order passed in appeal under this section, shall, subject to the powers of revision conferred by section 12, be final. '. ' While enacting section 18A the Legislature added an elaborate machinery which did not exist earlier for correcting assessments.
Mr. Sastri contends that in deciding whether the civil court 's jurisdiction is barred we must take into account the provisions of section 11 and section 12, because these provisions which provide adequate remedies " march with the construction" of section 11(4).
He submits that the finality which was conferred on the appellate order subject to a revision must necessarily be a finality against determination of the same question by the civil court.
It is pointed out by ,this court in Chetty 's case(1) that the exclusion of the jurisdiction of the civil court is not to be readily inferred and that even if a provision giving the orders a finality was enacted, civil courts still have jurisdiction to interfere where fundamental, provisions of the Act are not complied with, or where the statutory Tribunals do not act in conformity with the fundamental principles of judicial procedure.
Gajendragadkar, J. speak ing for the court on that occasion summed up the law as follows: "In dealing with the question whether Civil Courts ' jurisdiction to entertain a suit is barred or not, ' it is necessary to bear in mind the fact that there.
is a general presumption that there (1) ; 524 must be a. remedy in the.
ordinary civil courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can be held to be barred only on very clear and unmistakable indications to the contrary.
The exclusion of the jurisdiction of Civil Courts to entertain civil.
causes will not be assumed unless the relevant statute contains an express provision to that, effect, or leads to a necessary and inevitable implication of that nature.
The mere fact that a special statute, provides for certain remedies may not by itself necessarily exclude the jurisdicti on of the civil courts to deal with a case brought before it in respect of some of the matters covered by the said statute.," Referring to the remarks of Lord Thankerton in Secretary of State represented by the Collector of South Arcot vs Mask & Co.(1) "it is also well settled that that even if jurisdiction is so excluded, the civil courts have jurisdiction to examine into cases where the, provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial Procedure" it was observed: "It is necessary to add that these observations, though made in somewhat wide terms, do not justify the assumption that if a decision has been made by a taxing authority under the, provisions of the relevant taxing statute, its validity can be challenged by a suit on the ground that it. is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with.
Non compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non compliance with such fundamental provisions of the statute.
as would make the entire proceedings before the appropriate authority illegal and without jurisdiction.
Similarly, if an appropriate authority has acted in violation (1) 67 I.A. 222 at 236.
525 of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question.
" It was thus held that the civil court 's jurisdiction may not be taken away by making the decision of a tribunal final, because ' the civil court 's jurisdiction to examine the order, with reference to fundamental provisions of the statute non compliance with which would make the proceedings illegal and without jurisdiction, still remains, unless the statute goes further and states either expressly or by necessary implication that the civil court 's jurisdiction is completely taken away,.
Applying these.
tests, it is clear that without a provision like section 18A in the Act, the jurisdiction of the civil court would not be 'taken and at least where the action of the authorities is wholly outside the law and is not a mere error in the exercise of jurisdic tion.
Mr. Sastri says that we must interpret the Act in, the same way as if section 18A was implicit in it and that section 18A was added to make explicit what was already implied.
We cannot agree.
The finality that statute conferred upon orders of 'assessment, ;.Subject, however, to appeal and revision, was a finality for the purposes of 'the Act.
It did not make valid an action which was not warranted by the Act, as for example, the levy , of tax on a commodity ;which was not taxed at all or was exempt.
present case, the taxing of sales which did not take place within the State was a matter wholly.
outside the jurisdiction of the taxing authorities and in respect of such illegal action.
the jurisdiction of the civil, court continued to subsist.
In our judgment the suits were competent.
The last question is whether the assessment as a whole must fail or only in respect of the part which was utside the ' jurisdiction of the sales tax authorities We have already reproduced the four categories into 'Which all the transactions of sale 'were classified.
The High Court and the Court below.
found that 526 categories 1 and 4 represented transactions of sale which could not be taxed at all by the authorities as those transactions took place outside the State.
It may be mentioned that the Sales tax Act did not then contain any provision which established a nexus between the sales and the Province.
That provision came later.
The High Court relying upon Ram Narain 's case(" held that the assessments as a whole must fail.
In Ram Narain 's case a portion of the assessment was invalid under article 286 of the Constitution and the question was whether the total assessment must fail.
This Court observed: "The necessity for doing so is, however obviated by reason of the fact that the assessment is one composite whole relating to the pre Constitution as well as the post Constitution periods and is invalid in toto.
There is authority for the proposition that when an assessment consists of a single undivided sum in respect of the totality of the property treated as assessable, the wrongful inclusion in it of certain items of property which by virtue of a provision of law were expressly exempted from taxation renders the assessment invalid in toto." This Court cited with approval a passage from Bennett & White (Calgary) Ltd. and Municipal District of Sugar City No. 5(2) where the Judicial Committee observed : "When an assessment is not for an entire sum, but for seperate sums, dissected and earmarked each of them to a separate assessable item, a court can sever the items and cut out one or more along with the sum attributed to it, while affirming the ' residue.
But where the assessment consists of a single undivided sum in respect of the totality of property treated assessable and when one component (not dismissible as 'de minimis) is on any view not assessable and wrongly included, it would seem clear that such .a procedure is barred and the assessment is (1) ; (2) at 816.
527 bad wholly.
That matter is covered by authority.
In Montreal Light Heat & Power Consolidated vs City of Westmount the court (see especially per Anglin C.J.) in these conditions held that an assessment Which was bad in part was infected throughout and treated it as 'invalid.
Here their Lordships are of opinion, by parity.
of reasoning,; that the assessment was invalid in toto.
" It is urged by Mr. Sastri that the tax here is at the uniform rate of 1 % and as all the returns and documents necessary to seprate the bad part from the good are available, there is no need to cansel the whole assessment.
He contends that these cases are rather governed by the other rule that where the assessment is for separate sums, only that portion need be declared illegal which is void.
It is necessary to explain the distinction between the two classes of cases and how they are to be distinguished.
A difference in approach arises only in those cases where the assessment of many matters results in amounts of tax which though parts of the whole assessment, stand completely separate.
There the court can declare the "separate dissected and earmarked ', items illegal and excise them from the levy.
In doing so, the court does not arrogate to itself the functions of the taxing authorities; but where the tax is a composite one and to separate the good part from the bad, proceedings in the nature of assessment have to be undertaken, the civil court lacks the jurisdiction.
Here, theamount of tax is a percentage of the turnover and the turnover is a mixed one and it is thus not merely a question of cutting off some items which are separate but of entering upon the function of assessment which only the authorities under the.
Sales tax Act can undertake.
Cases of assessment based upon gross valuation such as the case from Canada refered to by the Judicial ' Committee afford a, parallel to a case of assessment of a composite turnover such as we have here.
Just as in the Canadian case it was not possible to separate the valuation of movable properties from 528 that of immovable properties, embraced in a gross valuation roll, so also here, it is not possible to separate from ' the composite 'turnover transactions which are .validly taxed, from those which are not, for that must pertain to the domain of tax officers and the courts have no powers within that domain.
In our opinion, the High Court was right in declaring the total assessment: to be affected by the portion which was illegal and void.
In the result, these appeals fail and are dismissed with costs, one set only.
| The petitioners in these three writ petitions challenged the operative provisions of the Orissa Private Lands of Rulers (Assessment of Rent) Act, 1958 and the, Rules framed thereunder.
These petitioners possess 302 private lands in the State of Orissa, which before the impugned Act were not subjected to the payment of rent, but which were assessed by the Revenue Officers in conformity with the Rules framed under the Act.
The petitioners claims a writ in the nature of certiorari quashing the said orders of assessment.
The Act was passed by the Orissa Legislature because it was thought expedient to provide for assessment of rent with respert to the private lands of Rulers in the State of Orissa.
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(h) defines a "Ruler" as meaning the Ruler of a merged territory in the State of Orissa and includes his relatives and dependants.
The petitioners attacked the pro visions of the Act mainly on the ground that they contravened article 14 of the Constitution.
Held:(i) that section 6 of the Act does not contravene article 14 of the Constitution for the reason that fair and equitable tests have been laid down under section 6 of the Act for determining the rent which should be assessed in respect of the private lands of the Rulers.
In the present case the legislature had prescribed the method of determining the rent payable on the private lands; and the relevant 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.
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, these lands could not be treated as comparable in every respect with the lands which were governed by the rates prescribed under the previous settlement.
(ii)In considering the validity of a statute under article 14 the wellestablished principle is 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.
If the party fails 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 initial presumption of constitutionality.
(iii)There is no substance in the contention that the impugned Act is void because the definition of the word "Ruler" is inconsistent with Art, 366(22) of the Constitution.
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) of the Constitution.
303 The definitions prescribed by article 366 are intended for the purpose of interpreting the articles in the Constitution itself, unless the context otherwise requires.
The whole object of defining the word "Ruler" in the Act is to specify and describe the lands in respect of which the operative provisions of the Act would come into play.
It is in that connection that the word "Ruler" has been broadly defined in an inclusive manner.
(iv) The impugned Act is entirely outside the purview of article 31 of the Constitution as 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.
Pratap Kesari Deo vs The State of Orissa, A.I.R. 1961 Orissa 131, relied on.
|
Appeals Nos. 187 and 188 of 1953.
Appeals under article 132 of the Constitution of India from the Judgment and Order, dated the 29th August, 1952, of the High Court of Judicature at Madras in Writ Petitions Nos. 21 and 41 of 1952.
K.V. Venkatasubramania Iyer (A. N. Rangaswami and.
section K. Aiyangar, with him) for the appellant.
M. Seshachalapathi for the respondent.
V.K. T. Chari, Advocate General of Madras (V. V. Raghavan, with him) for the intervener (State of Madras).
T. R. Balakrishna lyer and Sardar Bahadur for the intervener (State of Travancore Cochin).
Nittoor Sreenivasa Rao, Advocate General Of Mysore (Porus A. Mehta, with him) for the intervener (State of Mysore).
Lal Narayan Sinha (B. K. P. Sinha, with him) for the intervener (State of Bihar).
March 11.
The Judgment of the Court was delivered by DAS J.
These two appeals arise out of Writ Petitions Nos.
21 'and 41 of 1952, filed in the High Court of Judicature at Madras under article 226 questioning the validity of the Madras General Sales Tax Act (IX of 1939) and of the Turnover and Assessment Rules framed under that Act.
1119 The petitioners are tanners carrying, on business in Eluru, West Godawari District, which is now part of the newly created State of Andhra.
They make large purchases of untanned hides and skins and after tanning them in their tanneries they export the tanned hides and skins or sell the same to local purchasers.
In the High Court the appellants impugned the Act and the rules on the following grounds : I (a) The Provincial Legislature had no power under the Government of India Act of 1935 to enact a law imposing a tax on purchasers; (b) The liability to pay tax on sales is thrown on the purchaser not by the statute but by the rules.
This is an unconstitutional delegation by the legislature of its functions to the executive and the imposition of ,the tax is accordingly illegal; (c) The Act has become void under article 14 of the Constitution, as it singles out for taxation purchasers in some trades and is, therefore, discriminatory; and (d) The rules framed under the Act are inconsistent with the provisions enacted in the body of the Act and are void.
The High Court repelled each of the aforesaid grounds except that under item (d).
It held that rule 16(5) was ultra vires in that it offended against section 5 (vi) of the Act and dismissed their applications.
Hence the present appeals by the appellants under the certificate granted by the High Court that it was a fit case for appeal to this court.
Learned advocate appearing in support of these appeals has not pressed the objection under item (b) but has insisted on the remaining grounds of objection.
In our opinion the decisions of the High Court on those grounds are substantially well founded and correct.
On the question of legislative competency the learned advocate drew our 'attention to entry 54 in List II of the Seventh Schedule to the Constitution of India and argued that this entry clearly indicated that entry 48 in List II of the Seventh Schedule to the Government of India Act, 1935; under which the 145 1120 impugned Act was passed, was much narrower in its scope and could not be read as authorise in a the making of a law with respect to taxes on the purchase of goods.
This argument appears to us to be fallacious, for the intention of the Constituent Assembly as expressed in entry 54 in List II of the Seventh Schedule to the Constitution cannot be a guide for ascertaining the intention of a totally, different body, namely, the British Parliament, in enacting entry 48 in List 11 of the Seventh Schedule to the Government of India Act, 1935.
Further, we agree with the High Court that entry 48 in List II of the Seventh Schedule to the Government of India Act, on a proper construction, was wide enough to cover a law imposing tax on the purchaser of goods as well and that the Constituent Assembly in entry 54 of List II in the Seventh Schedule to the Constitution accepted this liberal construction of the corresponding entry 48 and expressed in clearer language what was implicit in that corresponding entry.
The next point urged by the learned advocate was founded on article 14 of the Constitution.
The appellants ' grievance is that the impugned Act singles out for taxing purchasers of certain specified commodities only but leaves out purchasers of all other commodities.
The principle underlying the equal protection clause of the Constitution has been dealt with and explained in Chiranjitlal Chowdhury vs The Union of India (1) and several subsequent cases and need not be reiterated.
It is well,settled that the guarantee of equal protection of laws does not require that the same law should be made applicable to all persons.
Article 14, it has been said, does not forbid classification for legislative purposes, provided that such classification is based on some differentia having a reasonable relation to the object and purpose of the law in question.
As pointed out by the majority of the Bench which decided Chiranjitlal Chowdhury 's case, there is a strong presumption in favour of the validity of legislative classification and it is for those who challenge it as (1) [1950] S.C.R. 1121 unconstitutional to allege and prove beyond all doubt that the legislation arbitrarily discriminates between different persons similarly circumstanced.
There is no material on the record before us to suggest that the purchasers of other commodities are similarly situated as the purchasers of hides and skins.
The majority decision in Chiranjitlal Chowdhury 's case(1) clearly applies to the case before us and there is no getting away from the position that the appellants before us have not discharged the burden of proof that, according to the majority decision, was upon them to do.
Lastly, the learned advocate urges that rule 16(5) clearly contravenes the provisions of section 5(vi) of the Act.
This sub rule has been held to be ultra vires by, the High Court and, indeed, the learned Advocate General of Madras did not in the High Court, as before ,us, dispute that rule 16(5) was repugnant to section 5(vi).
That sub rule, however, affects only unlicensed dealers and the appellants who are admittedly licensed dealers are not affected by that sub rule.
Further, it has not been suggested before us that the appellants were ever called upon to pay any tax on purchase of hides or skins in respect of Which tax had been previously paid by some prior purchaser.
That sub rule is clearly severable and cannot affect the validity of the rules which may otherwise be within the ambit of the Act.
Our attention has not been drawn to any other infirmity in the rules.
In the premises there is no substance in these appeals which must, therefore, be dismissed with costs.
Appeals dismissed.
Agent for the respondent and for the interveners, States of Madras, Mysore and Bihar: R. H. Dhebar.
| In an appeal to this Court, the High Court 's view that on the admission of a petition under sections 433 and 439 of the for compulsory winding up of a company, the Court is bound forthwith to advertise the petition, was challenged.
Held: A petition for winding up cannot be placed for hearing before the Court, unless the petition is advertised: that is clear from terms of r. 24(2) of the Companies (Court) Rules, 1959.
But that is not to say that as soon as the petition is admitted, it must be advertised.
If the petition is admitted, it is still open to the company to move the Court that in the interest of justice or to prevent abuse of the process of Court, the petition be not advertised.
Such an application may be made where the Court has issued notice under the last clause of r. 96, and even when there is an unconditional admission of the petition for winding up.
The power to entertain such an application of the company is inherent in the Court and r. 9 iterates that power.
[432C F] In re. A. Company applied.
Lord Krishna Sugar Mills Ltd., vs Smt.
Abnash Kaur A.I.R. (1961) Punj.
505 approved.
|
minal Appeal No. 129 of 1960.
Appeal by special leave from the judgment and order dated March 9, 1960, of the Allahabad High Court in Criminal Revision No. 697 of 1959.
Naunit Lal, for the appellant.
G. C. Mathur and C. P. Lal, for the respondent.
April 5.
The Judgment of the Court was delivered by SARKAR, J.
The appellant who had earlier left India, returned on a passport granted by the Government of Pakistan on May 16, 1953.
He had a visa endorsed on his passport by the Indian authorities permitting him to stay in India for three months and this permission was later extended upto November 15, 1953.
He did not, however, return to Pakistan within that date upon which he was convicted under section 14 of 777 the , by a Sub Divisional Magistrate on March 14, 1959, and sentenced to rigorous imprisonment for one year.
His appeal to a Sessions Judge was dismissed and the High Court at Allahabad, on being moved in revision, refused to interfere with the order of the Sessions Judge.
This appeal is against the judgment of the High Court.
The appellant had been convicted for breach of paragraph 7 of the Foreigners Order of 1948, issued under section 3 of the .
That paragraph requires that every foreigner entering India on the authority of a visa issued in pursuance of the Indian Passport Act, 1920, shall obtain from the appropriate authority a permit indicating the period during which he is authorised to remain in India and shall, unless that period is extended, depart from India before its expiry.
As earlier stated, the visa on the appellant 's passport showed that he had permission to stay in India till November 15, 1953 but he stayed on after that date.
Hence the prosecution.
It is contended on behalf of the appellant that he could not be convicted of a breach of paragraph 7 of the Foreigners Order for that paragraph applies to a "foreigner" entering India on the authority of a visa issued in pursuance of the Indian Passport Act and overstaying the period for which he is permitted to stay in India.
It is contended that the foreigner contemplated in this paragraph is a person who was a foreigner on the date of his entry into India.
The appellant says that on that date he was not a foreigner and, therefore, the provisions of the paragraph do not apply to him.
This contention of the appellant is plainly correct.
The paragraph contemplates a foreigner entering India, and therefore, a person who at the date of the entry was a foreigner.
Now, the word "foreigner" in paragraph 7 has the same meaning as that word has in the .
The word "foreigner" is defined in that Act in section 2(a).
That definition has changed from time to time, but we are concerned with the definition as it stood in 778 1953 when the appellant entered India, which was in these terms: "foreigner" means a person who. . (1) is not a natural born British subject as defined in sub sections (1) and (2) of Section I of the British Nationality and Status of Aliens Act, 1914, or (2) has not been granted a certificate of naturalisation as a British subject under any law for the time being in force in British India, or (3) is not a citizen of India.
The appellants contention is that he was not a foreigner because he came within el.
(1) of the definition as he was a natural born British subject within section l(l), (a) of the British Nationality and Status of Aliens Act, 1914.
Now that provision is in these terms: section 1.
(1) The following persons shall be deemed to be natural born British subjects, namely, (a) any person born within His Majesty 's Dominion and allegiance.
That the appellant was born at Allahabad at a time when it was within his Britannic Majesty 's Dominion is not in dispute.
That being so, we think that it must be held that the date of his entry into India the appellant was a natural born British subject and, therefore, not a foreigner.
He could not have committed a breach of paragraph 7 of the Foreigners Order.
In the result we allow the appeal and set aside the conviction of the appellant and sentence passed on him.
Before leaving this case we think it right to make a few more observations.
The definition of a foreigner in the was amended with effect from January 19, '1957, by Act 11 of 1957.
The definition since that date is as follows: " "foreigner" means a person who is not a citizen of India".
Under section 3(2), (e) of the , the Central Government has power to provide by order made by it that a foreigner shall not remain in India.
We wish to make it clear that we have said nothing as to the effect of the amended definition of a "foreigner" on the status of the 779 appellant.
No question as to the effect of the amended definition on the appellant 's status fell for our decision in this case for we were only concerned with his status in 1953.
We would also point out that no order appears to have been made concerning the appellant under section 3(2)(c) and we are not to be understood as deciding any question as to whether such an order could or could not have been made against the appellant.
Appeal allowed.
| The only question that a civil court is precluded from determining under section 9(2) of the , read with r. 30 Of the Rules framed under the Act is the question as to whether, when or how any person has acquired the citizenship of another country.
They are not prevented from determining other questions concerning the nationality of a person.
Where, therefore, a suit brought for a declaration that the appellants were Indian Citizens, where they themselves had raised the question of acquisition of foreign citizenship, was resisted on the ground that they had never been Indian Citizens, and the courts below dismissed the suit in its entirety, Held, that the courts below were in error in holding that the suit was barred in its entirety by section 9(2) Of the Act.
They should have decided the question as to whether the appellants had ever been citizens of India and, if the finding was in their favour, should have stayed the suit till the Central Government had decided whether such citizenship was renounced and if the finding was against the appellants dismissed the suit.
|
307 and 308 of 1960.
Petitions under article 32 of the Constitution of India; for enforcement of Fundamental Rights.
Porus A. Mehta, J. B. Gagrat and G. Gopalakrishnan, for the petitioner.
H. J. Umrigar, R. H. Dhebar and T. M, Sen, for the respondents.
March 23.
The Judgment of the Court was delivered by section K. DAS, J.
These are two writ petitions in respect of two orders 'dated August 3, 1960, b which the Joint Chief Controller of Imports, Madras, cancelled two import licences, Nos.
A 863296 and 836640 dated January 18, 1960, and February 2, 1960, respectively, granted in favour of the petitioner, Messrs. Sinha Govindji of Bangalore Road, Bellary, for the purpose of importing cellulose nitrate sheets of the value of Rs. 75,000 each for two licensing periods, April/September, '1959, and October/ March, 1960.
The complaint of the petitioner firm is that respondents 1 and 2 have cancelled the licences in circumstances which amounted to a denial of its right to be given a reasonable opportunity of being heard, as provided by cl. 10 of the Imports (Control) Order, 1955, before the impugned 'orders were passed 542 and thus arbitrarily and without authority of law deprived the petitioner of its fundamental right to carry on its business under article 19 of the constitution.
The point for decision is a short one and we need only state such facts as bear upon that point.
The petitioner 's case is that the proprietor of the firm is a citizen of India carrying on a business of the manufacture of celluloid and plastic bangles, etc, at Bellary in the Mysore State.
The petitioner was granted the two licences referred to above and thereafter entered into firm commitments for the import of cellulose sheets to the clause of Rs. 99,000.
On March 4, 1960, the petitioner was surprised to receive two letters from the Assistant Controller of Imports, Madras, calling upon the petitioner to let him know the extent to which the licenses had been utilised and asking the petitioner not to enter into fresh commitments against the said licenses without specific and prior approval of the Controllers ' office.
This led to some correspondence between the petitioner and the Control authorities, details whereof are not necessary for our purpose.
On May 27, 1960, the petitioner received two notices, only one of which we need set out in full.
It stated: "It is hereby notified that in exercise of the powers conferred by cl. 9 of the Imports (Control) Order, 1955, the Government of India, in the Minis.
try of Commerce and Industry propose to cancel licence No. A 836640/60/AU/M dated the Second February, 1960, valued at Rs. 75,000 (Rupees Seventy five thousand only) for import of Cellulose Nitrate Sheets from the Soft Currency area except South Africa, granted by the Joint Chief Controller of Imports and Exports, Madras to Messrs. Sinha Govindji, No. 18, Bangalore Road, Bellary 2, unless sufficient cause against this is furnished to the Joint Chief Controller of Imports and Exports, Madras, within ten days of the date of issue of this notice, by the said Messrs. Sinha Govindji, No. 18, Bangalore Road, Bellary 2 or any Bank, or any other party who may be interested in it.
In view of what is stated above, Messrs. Sinha 543 Govindji, Bellary or any Bank, or any other party who may be interested in the said licence No.836640/60/AU/M dated Second February, 1960, are hereby directed not to enter into any commit Departments against the said license and return it immediately to the Joint Chief Controller of Imports and Exports, Madras.
(Sd.) J. K. Sarkar, Deputy Chief Controller of Imports and Exports.
" The notices, be it noted, did not state on what grounds falling within cl. 9 of the Imports (Control) Order, 1955, it was proposed to cancel the licences of the petitioner.
Clause 9 of the Control Order states four grounds for cancellation of a licence, and we may read the clause here omitting those grounds which are not relevant for our case: "9. Cancellation of Licences: The Central Government or any other officer authorised in this behalf may cancel any licence granted under this Order or otherwise render it ineffective: (a) if the licence has been granted through inadvertence or mistake or has been obtained by fraud or misrepresentation; (b) (c) (d) By a letter dated May 30, 1960, the petitioner referred to the earlier correspondence on the subject and said inter alia: "Now clause (9) of the Import Control Order, 1955, under which action is proposed to be taken envisages the cancellation of a licence on various grounds.
Your notice does not disclose on which of these grounds the proposed action is sought to be taken.
Without knowing on what ground the proposed cancellation is to be effected it is impos sible for me to show cause against it.
I may, however, state that I have not done anything justifying the cancellation of the licence under the said Rule and that as far as I can see, there is no ground whatsoever for such cancellation.
" 544 Then, on August 4, 1960, the petitioner received two orders dated the previous day by which the two licences in favour of the petitioner were cancelled.
The orders stated (we are quoting only one of the orders which are similar in terms): "Whereas M/s. Sinha Govindji, Bangalore Road, Bellary or any bank or any other person have not come forward furnishing sufficient cause, against Notice No. 1/LCL/60/CDN(1) dt.
27 5 1960, proposing to cancel licence No. A 863296/60/AU/Mdt. 18 1 60, valued at Rs. 75,000 for the import of Cellulose Nitrate Sheets from the Soft Currency Area except South Africa granted to the said M/s. Sinha Govindji, Bangalore Road, Bellary, by the Joint Chief Controller of Imports and Exports, Madras, Government of India, in the Ministry of Commerce and Industry in exercise of the powers conferred by clause 9 of the Imports (Control) Order, 1955, hereby cancel the said licence No. A 863296/60/AU/M dt.
18 1 60 issued to the said M/s. Sinha Govindji, Bellary.
" It will be noticed that the orders also did not state on what ground the licences were cancelled.
The petitioner complained that the cancellation of the two licences led the Customs authorities to hold back the goods of the petitioner which had already arrived at port and were awaiting clearance, resulting in heavy demurrage, etc.
; but the real ground on which the petitioner challenges the two cancellation orders is that (to quote the words of the petition) "no real opportunity at all to show cause against the proposed cancellation was given to the petitioner in total disregard of the provisions of cl. 10 of the Imports (Control) Order, 1955".
We may read here that clause.
Applicant or licensee to be heard.
No action shall be taken under Clauses 7, 8 or 9 unless the licensee/importer has been given a reasonable opportunity of being heard.
" On behalf of the respondents it has been stated that after the issue of the two licences a letter dated February 16, 1960, was received from the Director, Small Industries Service Institute, Bangalore, to the 545 effect that the petitioner had no machinery and equipment to manufacture the relevant articles from the imported raw material.
On receipt of this letter a joint investigation was held by the Assistant Director of Industries, Bell, try, and the Deputy Director, Small, Industries Service Institute, Hubli, and it was found at the time of inspection that the petitioner firm had no machinery and equipment at the premises, nor did they possess any municipal licence or factory licence.
On July 2, 1960, the Chief Controller of Imports & Exports wrote to the petitioner giving the above information and asking the petitioner to show cause why further issue of licences should not be suspended under cl. 8 of the Imports (Control) Order, 1955.
We quote below the relevant extracts from this letter: "Gentleman, I write to refer to your letter dated the 21st May, 1960, and 30th May, 1960, on the above subject, and to say that a joint investigation conducted by the Deputy Director, Small Industries Service Institute, Hubli, and Assistant Director of Industries, Government of Mysore, Bellary, revealed that at the time of inspection of your firm by them, no machinery and equipment existed in your premises and that you had no Municipal licences or Factory licence or Factory.
In view of this, it is clear that you had obtained the Essentiality Certificate from the Director of Industries fraudulently and by misrepresentation of facts and thereafter obtained the licences in question by producing the said Certificate to the Joint Controller of Imports & Exports, Madras.
The above action on your part directly contravenes the Import Trade Control Regulations, within the meaning of para.
6(vii) of Chapter V of the Import Trade Control Hand Book of Rules and Procedure, 1956, read with clause 8(b) of the Imports (Control) Order No. 17/55 dated the 7th December, 1955.
In view of this, the request made by you in the letters under reference cannot be acceded to.
69 546 On the other hand, you are called upon, under clause 10 of the said Imports (Control) Order, 1955, to show cause, within 15 (fifteen) days from the date of receipt of this letter, as to why further issue of licences to you should not be suspended, under clause 8 of the said Imports (Control) Order No. 17/55 dated the 7th December, 1955, for contravening the Import Trade Control Regulations.
If your reply does not reach the undersigned within the stipulated period it will be assumed that you have no defence to urge in your favour and this office will proceed to adjudicate action against you, without making any further reference to you.
" The contention urged on behalf of the respondents is that the letter dated July 2, 1960, stated the necessary ground for the cancellation of the licences to the petitioner, and as the petitioner furnished no sufficient cause against cancellation, the orders of cancellation were made on August 3, 1960.
The argument on behalf of the respondents is that the provisions of cl. 10 of the Imports (Control) Order, 1955, have been sufficiently complied with by reason of what was stated in the letter of July 2, 1960.
On a careful consideration of the facts and circumstances as stated in the affidavits of the parties we have come to the conclusion that the petitioner has had no reasonable opportunity of being heard before the cancellation orders were made on August 3, 1960.
The cancellation orders are, therefore, bad and must be quashed.
Our reasons are the following.
It is not disputed that the notice dated May 27, 1960, did not state any ground for the proposed cancellation; it merely referred to cl. 9 without stating on which of the four grounds mentioned therein it was proposed to take action.
Naturally, the petitioner stated in its letter dated May 30, 1960, that without knowing on what ground the proposed cancellation was to be made, the petitioner firm was not in a position to show cause.
So far there is no dispute between the parties, and it is not seriously urged by the respondents that if the notice stood by itself, it could be held to have given the petitioner a reasonable 547 opportunity of being heard within the meaning of cl. 10.
The respondents, however, rely on the letter dated July 2, 1960, in support of their contention that the petitioner has had a reasonable opportunity of showing cause against the cancellation of the two licences.
On behalf of the petitioner it has been submitted, not without justification, that the letter dated July 2, 1960, related to a different matter, viz., the suspension of the grant of further licences under cl. 8 for which also a reasonable opportunity to be heard had to be given to the petitioner under cl. 10.
In its operative part the letter stated: "you are called upon to show cause, within 15 days from the date of this letter, as to why further issue of licences to you should not be suspended under cl. 8".
It, therefore, related to proposed action under cl. 8.
The respondents, have, however, pointed out that the subject matter of the letter as indicated therein referred to the notices dated May 27, 1960, for cancellation of the licences and it also referred to the earlier, correspondence on the same subject, viz., the petitioner 's letters dated May 21, 1960, and May 30, 1960; therefore, the, contention is that the petitioner must Know as a result of the reference to the subject matter and earlier correspondence that the grounds given in the letter related to proposed action both under cl. 8 and cl. 9, even though the operative portion related to cl. 8 only.
It is true that the contents of the letter dated July 2, 1960, should be considered from the point of view of substance rather than that of technical rules of construction of statutory instruments.
So considered, it is difficult to hold that the letter asked the petitioner to show cause against cancellation of its licences, parti cularly in the light of the contents of the subsequent letters of the Department which would be referred to presently.
Even if we assume that it did so, what is the position? Within 10 days of the receipt of the letter (which was received by the petitioner on July 5, 1960) the petitioner 's solicitor asked for a copy of the joint investigation proceeding and the report submitted as a result thereof The letter also asked for 548 other relevant documents in order to enable the petitioner to show cause.
It said that the petitioner would show cause as soon as the relevant documents were received and it also said that 6.
personal hearing would be asked for and prayed that in the meantime no further action should be taken.
No reply was given by the respondents to the aforesaid letter of the petitioner 's solicitor till August 6, 1960, that is, three days after the cancellation orders had been made.
The petitioner was not given a copy of the report of the investigation till as much later date, nor was any in formation given to the petitioner that the copy would not be available and the petitioner must show cause at once.
As a matter of fact the petitioner was told nothing in reply to the letter dated July 15, 1960, till three days after the cancellation orders had been made. 'the cancellation orders blandly stated that no cause had been shown, when in fact the petitioner had specifically asked for an opportunity to show cause.
By their letter dated August 6, 1960, the respondents said that the matter would be considered on receipt of a letter of authority from the solicitor in proper form and on stamped paper, without stating that in the meantime cancellation order, had been made.
without waiting for any explanation.
on August 10, 1960, the solicitor submitted a written authority, saying that it was unnecessary to (,all for it arid that the two licences had been cancelled arbitrarily and without giving the petitioner an opportunity of being heard.
The correspondence, then continued with regard to the proposed action under cl. 8 and the petitioner challenged the correctness of the report of the joint investigation proceeding on many essential particulars including the alleged absence of machinery arid equipment.
It, is not necessary to enter into details of that correspondence, because the proposed action under cl. 8 is not the subject matter of the present proceeding.
It is enough to state that from what happened after the receipt of the letter dated July 2, 1960, it is abundantly clear that the petitioner has bad no real opportunity of being heard with regard to the ground alleged in the letter, before the cancellation orders were made 549 on August 3, 1960.
There was, in our opinion, a clear violation of the requirement of cl. 10, which embodies the principles of natural justice.
The cancellation orders are, therefore, bad and must be quashed.
We allow the writ petitions and order accordingly.
The petitioner is entitled to its costs; there will be one rearing fee.
Petitions allowed.
| The petitioners who were partners of a registered firm hold ing public carrier and stage carriage permits challenged the constutionality of certain provisions of the Rajasthan Passengers and Goods Taxation Act, 1959, the Rajasthan Passengers and Goods Taxation Rules, 959, and a notification issued under r. 8.
The Act was passed for levying a tax on passengers and goods 518 carried by road in motor vehicles the power to enact being derived from Entry 56 of the State List in Sch.
VII of the Constitution.
Section 3(4) of the Act prescribed the method of collection of the tax and provided that the State Government may accept a lump sum in lieu of the tax chargeable".
Rule 8(i) prescribed the method of payment and provided that the tax "shall be paid in lump sum" and the notification in question prescribed the rates of the tax.
Held, that the incidence of the tax was upon "passengers and goods" and not upon income of the petitioners though the amount of the tax was measured by the fares and freights.
The charging section, namely, section 3 did not go outside Entry 56.
Mathurai vs State of Madras, I.L.R. , Alma Ram Budhia vs State of Bihar, Pat. 493, referred to.
The tax did not offend articles 301 and 304 of the Constitution and no inter State trade, commerce or intercourse was affected by it.
Although the tax fell upon passengers and goods proceeding to or from an extra State point, it was limited only to the fare and freight proportionate to the route within the State.
The word "shall" is ordinarily mandatory but it is sometimes interpreted as directory, and in the present case the word "shall" used in rr. 8 and 8A and the notification should be interpreted as directory as section 4 of the Act from which the Rules and the notification derive their authority, creates an option by using the words "may accept".
The Act, the Rules and the notification must be read harmoniously.
The mandatory language was used to fix peremptorily the amount of the lump sum if paid in lieu of the tax.
In Re Lord Thurlow Ex Parte Official Receiver, (1895) 1 Q.B. 724, Mannikam Patter vs Nanchappa Chettiar, (1928) M.W.N. 441, In re Rustom, 369, jethaji Peraji Firm v: Krishnayya, Mad.
648 and Burjore and Bhavant Pershad vs Mussumat Bhagana, (1883) L.R. II I.A. 7, followed.
The lump sum figure was based on averages and could not be impeached by reference to a possibility that on some days no business might be done.
Comparison with Railways which is a union subject was not admissible.
There was no discrimination between operators of public motor vehicles using roads all of whom were affected by the Act, There could be no comparison between persons using better kind of roads and those using roads which were not so good.
All operators using better kind of roads had to pay heavier tax, and there was no discrimination between them as a class.
|
Civil Appeal Nos.
1575 and 1965 of 1971.
From the Judgment and Order dated 12 1 1968 of the Calcutta High Court in Civil Rule No. 2523 and 2527 of 1960.
V. section Desai, section P. Nayar and Miss A. Subhashini for the Appellant.
section T. Desai, J. Ramamurthi and D. N. Gupta for the Respondents and Vice Versa.
The Judgment of the Court was delivered by UNTWALIA, J.
These two appeals one by the Union of India and the other by M/s Jardine Henderson Ltd. are by certificate granted by the Calcutta High Court.
Since the facts in both the cases are very much similar involving the interpretation of the various clauses of section 3(1) of The , hereinafter referred to as the Validation Act, the two appeals have been heard together and are being disposed of by this judgment.
There were two brothers named Basanta Kumar Daw, respondent No. 2 in Civil Appeal No. 1575 of 1971 and Haridhan Daw, respondent No. 2 in Civil Appeal No. 1965 of 1971.
The facts of Civil Appeal No. 1575 of 1971 are these: For realization of arrears of income tax dues the Certificate Officer of 24 Parganas forwarded to the Collector a Certificate in accordance with Section 46(2) of the Indian Income tax Act, 1922 specifying the amount of arrears due from respondent No. 2.
Thereupon a Certificate case was started against him (Basanta Kumar Daw) under the Bengal Public Demands Recovery Act, 1913, hereinafter called the Bengal Act, by the Certificate Officer acting as a Collector.
Notice under section 7 was served on the Certificate debtor on 31 10 1949.
Basanta Kumar Daw entered appearance and filed an objection under section 9 of the Bengal Act.
This objection was rejected by the Certificate Officer by his Order dated March 8, 1951.
On April 2, 1951 the Certificate debtor made an application for review of the said order dated 8 3 1951 stating therein, inter alia that the appeal preferred by him before the Income tax Appellate Tribunal had been allowed in part and some payments also had 559 been made since then; the Certificate case, therefore, could not proceed for the recovery of the sum of Rs. 36,874.10 annas, the original amount mentioned in the Certificate.
The Certificate Officer declined to review his previous order and rejected the review petition.
But he made certain enquiries from the Income tax Officer whether the amount of the Certificate had to be reduced.
The Income tax Officer informed him that the Tribunal had reduced the demand on appeal on 13 9 1950 and after adjustment of the previous payments made by the Certificate debtor the revised demand stood at Rs. 19,001.3 annas only.
Thereupon the Certificate Officer amended the Certificate on the basis of the information received from the Income tax Officer and reduced the demand.
On July 18, 1956 he directed the issue of sale notice under Rule 46(2) framed under the Bengal Act in respect of the half share of Basanta Kumar Daw (the other half belonging to his brother Haridhan Daw) in premises nos.
201 to 205/1, Old China Bazar Street, Calcutta.
Now a few facts of the other appeal being Civil Appeal No. 1965 of 1971 may be stated.
The Income tax officer sent a requisition to the Certificate officer of 24 Parganas for the recovery of a sum of Rs. 59,541.15 annas against Haridhan Daw, respondent No. 2 in this appeal.
A Certificate case was started.
A notice under section 7 of the Bengal Act was served on the Certificate debtor on January 30, 1951.
He also filed a petition of objection under section 9.
But the Certificate Officer by his order dated January 13, 1954 rejected the objection filed by the Certificate debtor under the Bengal Act.
A review application was also rejected in this case on January 27, 1954.
On March 2, 1954, the Income tax Officer informed the Certificate Officer that the original demand of Rs. 59,541.15 annas had been enhanced to Rs. 59,604.7 annas under section 35 of the Income tax Act and requested him to realize the enhanced amount.
The order under section 35 was passed on March 2, 1953.
The Certificate Officer thereupon informed the Income tax Officer that the Bengal Act did not provide for enhancing the demand of the existing Certificate and asked him to file a separate Certificate for the additional amount.
He, however, continued the Certificate proceedings for the recovery of the original amount.
M/s. Jardine Henderson Ltd., respondent in Civil Appeal No. 1575 of 1971 and appellant in Civil Appeal No. 1965 of 1971 purchased the whole of the premises in question on September 20, 1954 for a total sum of Rs. 3,00,100/ purchasing one half of the undivided share from each of the two brothers.
560 In both the cases the Company received a notice on August 6, 1956 fixing a date for settling the terms of the sale proclamations in respect of the respective one half share of each of the two Certificate debtors.
Immediately thereafter the respondent company made an application in each of the two cases that it had purchased the property being unaware of the pendency of any Certificate case against any of its vendors for realization of income tax dues and that the Company was the owner of the property and it was not liable to be sold as that of the Certificate debtor.
The Certificate Officer rejected the objection holding that the purchase having been made after service of notice under section 7 of the Bengal Act on the Certificate debtor, was void as against any claim enforceable in execution of the Certificate and hence the Company had no right to object to the sale.
The Company went up in appeal before the Commissioner and succeeded in both the cases.
Two revisions were filed before the Board of Revenue which were allowed.
The respondent company then moved the High Court under Article 227 of the Constitution.
The petition giving rise to Civil Appeal No. 1575 was allowed and hence the Union of India has come up in appeal.
The other petition giving rise to Civil Appeal No. 1965 of 1971 was dismissed by the same Bench and the Company has, therefore, come up in appeal.
The Validation Act was not there when the orders were passed either by the Commissioner or the Board of Revenue.
But in the High Court as also here the main controversy between the parties was the effect of the Validation Act on the two Certificate proceedings.
Mr. V. section Desai, appearing for the Union of India, in the first instance submitted that the order reducing the amount of the Certificate in Civil Appeal No. 1575 was an order under section 10 of the Bengal Act.
Hence the notice served under section 7 on the Certificate debtor continued to have its effect in spite of the reduction of the amount and no fresh notice under section 7 was necessary to be served.
In agreement with the High Court we have no difficulty in rejecting this argument.
We may first read some of the relevant provisions of the Bengal Act.
Section 7 reads as follows: "When a certificate has been filed in the office of a Certificate officer under section 4 or section 6, he shall cause to be served upon the certificate debtor, in the prescribed manner, a notice in the prescribed form and a copy of the certificate.
" 561 The effect of service of notice of certificate is provided in section 8 which provides : "From and after the service of notice of any certificate under section 7 upon a certificate debtor (a) any private transfer or delivery of any of his immovable property situated in the district in which the certificate is filed, or of any interest in any such property, shall be void against any claim enforceable in execution of the certificate.
" Under Section 9 the Certificate debtor may file a petition of objection denying his liability in whole or in part.
Under section 10 it is provided: "The Certificate officer in whose office the original certificate is filed shall hear the petition, take evidence (if necessary), and determine whether the certificate debtor is liable for the whole or any part of the amount for which the certificate was signed; and may set aside, modify or vary the certificate accordingly :" On reading the provisions aforesaid it is clear that if the Certificate is modified or varied by the Certificate Officer under section 10 while disposing of the petition of objection filed by the certificate debtor under section 9, then the Certificate case proceeds further without a fresh notice under section 7.
But in the instant case the amount was not reduced on the objection of the Certificate debtor but it was reduced on receipt of the information from the Income tax Officer.
In the Bengal Act itself there is no express provision enabling a person other than the Certificate debtor claiming an interest in the property to be sold to file any objection.
He, of course, under section 22 can take recourse to the said provision by filing an application to set aside the sale of immovable property on deposit of the amounts provided therein.
But the rules in Schedule II under section 38 have the effect as if enacted in the body of the Act.
In Schedule II is to be found rule 39 which is very much like rule 58 of Order 21 of the Code of Civil Procedure, 1908.
The Company preferred a claim objecting to the sale of property on the ground that it was not liable to sale as it had purchased the property from the two Certificate debtors.
It was, therefore, not quite accurate to say that the Company had no locus standi to prefer the claim.
It was open to it to show under rule 40 that at the date of the service of notice under section 7 it had some interest in the property in dispute.
If the notice served at the beginning 562 of the two Certificate cases under section 7 on the two Certificate debtors was not a valid notice in the sense that in one case on the reduction of the amount of the Certificate it became necessary to give a fresh notice and in the other without a fresh demand notice under the Income tax Act for the enhanced amount, the Certificate case could not proceed, then the Company had validly purchased the property and its purchase was not void.
The property purchased by it could not then be sold for realization of the income tax dues against the two brothers.
If, however, no fresh notice was necessary to be served in either of the two cases then it is plain that the Company 's purchase was void as against the claim enforceable in execution of the Certificate.
The answer in both the cases has got to be given with reference to the Validation Act and no other point of any consequence was argued or could be pressed with any success in either of the two appeals.
In Income tax Officer, Kolar Circle, and another vs Seghu Buchiah Setty(1) best Judgment assessments had been made for the assessment years 1953 54 and 1954 55.
A notice of demand for each of the two years was served upon the assessee under section 29 of the Income tax Act, 1922.
The assessee preferred appeals.
In the meantime for non payment tax he was treated as a defaulter and a Certificate was forwarded to the Collector under section 46(2).
Thereafter the tax payable by the assessee was substantially reduced in appeal.
The Income tax Officer informed the assessee of the reduced tax liability and called upon him to pay the reduced amount.
No fresh notice of demand was issued under section 29.
Pending further appeals to the Appellate Tribunal the assessee wanted the Certificate proceedings to be stayed and on his request being rejected he moved the High Court under Article 226 of the Constitution.
The High Court held that the department was not entitled to treat the respondent as a defaulter in the absence of a fresh notice of demand and quashed the recovery proceedings.
On appeal to this Court the majority view expressed was that the amount of tax assessed being reduced as a result of the orders of the Appellate Assistant Commissioner, a fresh demand notice had to be served on the respondent before he could be treated as a defaulter.
The recovery proceedings initiated against him on the basis of the original demand notice were therefore rightly quashed by the High Court.
The Statement of Objects and Reasons which led to the introduction and passing of the Validation Act would show that it was to get over the difficulties in the collection of income tax and other direct taxes created by the Supreme Court decision in Seghu Buchiah Setty 's case 563 (supra) that the Validation Act was passed with retrospective effect.
The interpretation of this Act falls for our consideration for the first time in this Court.
This is an Act "to provide for the continuation and validation of proceedings in relation to Government dues and for matters connected therewith." In the Schedule appended to the Act are enumerated various tax statutes including the Income tax Act.
"Taxing Authority" has been defined in clause (d) of section 2 and clause (e) defines "Tax Recovery Officer" to mean an officer to whom a certificate for the recovery of arrears of Government dues may be issued under this Act.
Section 3 without the proviso may be read as a whole: "Continuation and validation of certain proceedings. (1) Where any notice of demand in respect of any Government dues is served upon an assessee by a Taxing Authority under any scheduled Act, and any appeal or other proceeding is filed or taken in respect such Government dues, then, (a) where such Government dues are enhanced in such appeal or proceeding, the Taxing Authority shall serve upon the assessee another notice of demand only in respect of the amount by which such Government dues are enhanced and any proceedings in relation to such Government dues as are covered by the notice or notices of demand served upon him before the disposal of such appeal or proceeding may, without the service of any fresh notice of demand, be continued from the stage at which such proceedings stood immediately before such disposal; (b) where such Government dues are reduced in such appeal or proceeding (i) it shall not be necessary for the Taxing Authority to serve upon the assessee a fresh notice of demand; (ii) the Taxing Authority shall give intimation of the act of such reduction to the assessee, and where a certificate has been issued to the Tax Recovery Officer for the recovery of such amount, also to that officer; 564 (iii)any proceedings initiated on the basis of the notice or notices of demand served upon the assessee before the disposal of such appeal or proceeding may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal; (c) no proceedings in relation to such Government dues (including the imposition of penalty or charging of interest) shall be invalid by reason only that no fresh notice of demand was served upon the assessee after the disposal of such appeal or proceeding or that such Government dues have been enhanced or reduced in such appeal or proceeding :" The Act was made retrospective by an express provision in section 5.
Clause (a) deals with the case of an enhancement of Government dues and provides that the proceedings initiated may be continued from the stage at which such proceedings stood immediately before the disposal of the appeal or proceedings in which the enhancement was made.
Another notice of demand is required to be served in respect of the amount by which the dues are enhanced.
On a plain reading of clause (a) of section 3 it is clear that the intention of the legislature is not to allow the nullification of the proceedings which were initiated for recovery of the original demand.
On the basis of another notice of demand for the enhanced amount, two courses are open to the department (1) to initiate another proceeding for the recovery of the amount by which the dues are enhanced treating it as a separate demand or (2) to cancel the first proceedings and start a fresh one for the recovery of the entire amount including the enhanced one.
In the latter case the first proceedings started for the recovery of the original amount will lose its force and the fresh proceeding will have to proceed de novo.
But in the former the first proceedings are not affected at all.
In Civil Appeal No. 1965 of 1971 this is exactly the view taken by the High Court and in our opinion rightly.
Mr. section T. Desai appearing for the Company submitted that where the amount was enhanced in appeal or revision there was no express provision in the Income tax Act for service of a fresh or another notice of demand for the additional amount.
But if the amount was enhanced under the power of rectification under section 35 then sub section (4) thereof requires: 565 "Where any such rectification has the effect of enhancing the assessment or reducing a refund the Income tax Officer shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 29, and the provisions of this Act shall apply accordingly.
" The effect of this sub section, according to the counsel, has not been done away with by clause (a) of section 3 of the Validation Act.
We reject this argument as being unsound and for two reasons.
Firstly, on a correct interpretation of sub section (4) of section 35 it would be noticed that though the expression used is "the sum payable" but in the context it would mean only the "extra enhanced sum payable" and not the whole of the enhanced amount.
The expression "sum payable" had to be used in sub section (4) because that sub section was also providing for a contingency where by the rectification order the amount of refund was reduced.
In such a case the expression "the sum payable" would obviously mean the difference between the amount refunded and the reduced amount which was liable to be refunded.
The second reason is that even if it were to be held that in the case of enhancement the expression "the sum payable" in sub section (4) means the whole of the enhanced amount by a rule of harmonious construction it has got to be held that in view of section 3(1) (a) of the Validation Act even in the case of a rectification a notice of demand is to be served now only in respect of the amount by which the Government dues are enhanced.
Now coming to the case of reduction dealt with in clause (b) of sub section (1) of section 3 of the Validation Act it would be seen that sub clause (i) clearly provides that it is not necessary for the Taxing Authority to serve upon the assessee a fresh notice of demand.
The only thing which he is required to do is that he has to give intimation of the fact of such deduction to the assessee and to the Tax Recovery Officer.
The purpose of giving intimation to the assessee is to bring it to his pointed knowledge that the demand against him has been reduced, although by other methods also such as by service of a copy of the Appellate Order or the revisional order being served on him he may be made aware of that.
The intimation to the Tax Recovery Officer is essential as without that intimation from the Taxing Authority he cannot reduce the amount of the Certificate debt in the proceedings already commenced.
The High Court has taken the view that the provision contained in sub clause (ii) of clause (b) of section 3(1) of the Validation Act is mandatory and in absence of a formal intima 566 tion to the assessee and to the Tax Recovery Officer as required by the said provision the proceedings initially started could not be continued under sub clause (iii).
In our opinion the view of the High Court is not sustainable in law.
On the facts of this case the assessee himself in his review application had clearly mentioned that the demand against him stood reduced in appeal.
He also claimed that he had made certain payments.
Although the Tax Recovery Officer rejected his review petition, as, probably, he had no power of review, he took the precautionary measure of making inquiry from the Taxing Authority.
Thereupon the Taxing Authority gave him the information and the amount of the Certificate debt was substantially reduced.
We, therefore, hold that on the facts of this case the requirement of sub clause (ii) stood fulfilled and nothing further had to be done in the matter by the Taxing Authority.
That being so the proceedings initiated on the basis of the notice of demand served upon the assessee before the reduction of the amount in appeal could be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal as provided for in sub clause (iii).
Clause (c) of section 3(1) of the Validation Act is also important and it clearly and expressly provides that no proceedings in relation to Government dues shall be invalid merely because no fresh notice of demand was served upon the assessee after the dues were enhanced or reduced in any appeal or proceeding.
It is, therefore, plain that in neither of the two cases did the Certificate proceeding become invalid, in one case by reduction of the demand and in the other by an enhancement.
In both the cases notices under section 7 of the Bengal Act had been served upon the Certificate debtors before the property in question was transferred by them to the Company.
The transfer was, therefore, void against the Certificate claims in both the cases under section 8(a) of the Bengal Act.
Mr. section T. Desai called our attention to the decision of the Allahabad High Court in Ram Swarup Gupta vs Behari Lal Baldeo Prasad and others.(1).
That case is, however, clearly distinguishable as in that the property was sold in Certificate proceedings started for the realization of the original amount even after the amount had been reduced in appeal.
It is obvious that that sale was illegal and invalid as rightly held by the High Court because after reduction the demand had to be reduced on intimation by the Taxing Authority and the property could not be sold for the original amount.
567 For the reasons stated above, Civil Appeal No. 1575 of 1971 is allowed with costs payable by the respondent company, the Judgment and Order of the High Court are set aside and it is directed that the Certificate case shall proceed to disposal in accordance with law as expeditiously as possible.
Civil Appeal No. 1965 of 1971 is dismissed but we make no order as to costs in this appeal.
V. D. K. C.A. No. 1965/71 dismissed.
| Held, by the Full Court (i) (overruling a preliminary objection) Under the Constitution the Supreme Court is constituted the protector and guarantor of fundamental rights, and it cannot, consistently with the responsibility so laid upon it, refuse to entertain applications seeking protection against infringement of such rights, although such applications are made to the Court in the first in stance without resort to a High Court having concurrent jurisdiction in the matter.
Urquhart vs Brown ; and Hooney vs Kolohan ; distinguished.
(ii) Freedom of speech and expression includes freedom propagation of ideas and that freedom is ensured by the freedom of circulation.
Ex parte Jackson ; and Lovell vs City of Griffin ; referred to.
Held per KANIA C.J., PATANJALI SASTRI, MEHR CHAND MAHAJAN, MUKHERJEA and DAS JJ. (FAZL ALI J. dissenting): (i) Apart from libel, slander etc.
unless a law restricting freedom of speech and expression is directed solely against the undermining of the security of the State or the over throw of it, such law cannot fall within the reservation under cl.
(2) of article 19 of the Constitution, although the restrictions which it seeks to impose may have been con ceived generally in the interests of public order.
Section 9 (1 A) of the Madras Maintenance of Public Order Act, XXXIII of 1949, which authorises impositions of restrictions for the wider purpose of securing public safety or the mainte nance of public order falls outside the scope of authorised restrictions under cl.
(2) and is therefore void and uncon stitutional; (ii) Where a law purports to authorise the imposition of restrictions on a fundamental right in lan guage wide enough to cover restrictions both within and without the limits of constitutionally permissible legisla tive action affecting such right, it is not possible to uphold it even so far as it may be applied within the constitutional limits, as it is not severable.
So long as the possibilitY of its being applied for purposes not sanc tioned by the Constitution cannot be ruled out 595 must be held to be wholly unconstitutional and void.
Section 9 (1 A) is therefore wholly unconstitutional and void.
Per FAZL ALI J. Restrictions which section 9 (1 A) autho rised are within the provisions of cl.
(2) of article 19 of the Constitution and section 9 (1 A)is not therefore unconstitutional or void.(1) Brij Bhushan and Another vs The State ; referred to.
|
Appeal No. 91 of 1976.
From the Judgment and Order dated 15.4.
1975 of the Punjab and Haryana High Court in I.T. Reference No. 14 of 1972.
Bishamber Lal and Ms. Geetanjali Madan for the Appellant.
Gauri Shanker, Manoj Arora, section Rajappa and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by SINGH, J.
This appeal is directed against the judgment and order of the Punjab and Haryana High Court dated 15.4.1975 answering the Income Tax Reference made to it by the Income Tax Appellate Tribunal.
Briefly, the facts giving rise to this appeal are that the appellant Saraswati Industrial Syndicate is a limited company carrying on business of manufacturing and sale of sugar and machinery for sugar mills and other industries.
Another company, namely, the Indian Sugar and General Engi neering Corporation (hereinafter referred to as 'the Indian Sugar Company ') was also manufacturing machinery parts for sugar mills.
On 28th September 1962 under the orders of the High Court the Indian Sugar Company was amalgamated with the appellant company.
After the amalgamation, the Indian Sugar Company lost its identity, as it did not carry on any busi ness.
Prior to the amalgamation, the Indian Sugar Company had been allowed expenditure to the extent of Rs.58,735 on accrual basis in its earlier assessment.
The company had shown the aforesaid amount as a trading liability and the said trading liability was taken over by the appellant company.
After amalgamation, the appellant company claimed exemption on the amount of Rs.58,735 from income tax for the assessment year 1965 66 on the ground that the amalgamated 335 company was not liable to pay tax under Section 41(1) of the Income Tax Act 1961 (hereinafter referred to as 'the Act ') as the expenditure had been allowed to the erstwhile Indian Sugar Company which was a different entity from the amalga mated company.
The Income Tax Officer disallowed the appel lant 's claim for exemption.
The assessee filed appeal before the Appellate Assistant Commissioner who confirmed the order of the Income Tax Officer.
The assessee, thereafter, pre ferred appeal before the Income Tax Appellate Tribunal.
The Tribunal allowed the appeal on the construction of Section 41(1) of the Act.
The Tribunal held that after the amalgama tion of the Indian Sugar Company with the assessee company the identity of the amalgamating company was lost and it was no longer in existence, therefore, the assessee company was a different entity not liable to tax on the aforesaid amount of Rs.58,735.
On the Department 's application the Tribunal referred the following question to the High Court: "Whether on the facts and circumstances of the case the Tribunal was justified in law in holding that the amount of Rs.58,735 was not chargeable to tax under sub section (1) of Section 41 of the Income Tax Act 1961 for the assessment year 1965 66?" The High Court answered the question in favour of the Reve nue holding that the exemption from tax liability claimed by the appellant assessee was chargeable to tax under Section 41(1) of the Act.
The High Court held that on the amalgama tion of the two companies, neither of them ceased to exist instead both the amalgamating companies continued their entities in a blended form.
It further held that the amalga mated company was a successor in interest of amalgamating company and since the assets of both the companies were merged and blended to constitute a new company the liabili ties attaching thereto must, therefore be, on the amalgamat ed company.
On these findings the High Court held that the amalgamated company, namely, the assessee was liable to pay tax on Rs.58,735 which came into its hands from the assets of the Indian Sugar Company.
The assessee made application before the High Court under Section 261 of the Act read with Section 109 of the Code of Civil Procedure for certificate to appeal to this Court but the High Court dismissed the same.
The appellant, thereupon, approached this Court by means of special leave petition under Article 136 of the Constitution.
This Court granted leave.
Hence this appeal.
Section 41(1) of the Act reads as under: 336 1(1).
Whether an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained.
whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him or the ' value of benefit accruing to him, shall be deemed to be profits and gains of business or profession and accord ingly chargeable to income tax as the income of that previ ous year, whether the business or profession in respect of which the allowance or deduction has been made is in exist ence in that year or not ." Section 41(1) has been enacted for charging tax on profits made by an assessee, but it applies to the assessee to whom the trading liability may have been allowed in the previous year.
If the assessee to whom the trading liability may have been allowed as a business expenditure in the previous year ceases to be in existence or if the assessee is changed on account of the death of the earlier assessees the income received in the year subsequent to the previous year or the accounting year cannot be treated as income received by the assessee.
In order to attract the provisions of Section 41(1) for enforcing the tax liability, the identity of the assessee in the previous year and the subsequent year must be the same.
If there is any change in the identity of the assessee there would be no tax liability under the provi sions of Section 41.
In Commissioner of Income Tax, Madhya Pradesh vs Hukumchand Mohanlal, this Court held that the Act did not contain any provision making a succes sor in a business or the legal representative of an assessee to whom the allowance may have been already granted liable to tax under Section 41(1) in respect of the amount remitted on receipt by the successor or by the legal representative.
ln that case the wife of the assessee on the death of her husband succeeded to the business carried on by him.
Another firm which had recovered certain amounts towards the sales tax from the assessee 's husband succeeded in an appeal against its sales tax assessment and thereupon the firm refunded that amount to the assessee which was received during the relevant accounting period.
The question arose whether the amount so received by the assessee could be assessed in her hands as a deemed profit under Section 41(1) of the Act.
This Court held that Section 41 did not apply because the assessee sought to be taxed was not the assessee as contemplated by Section 41(1) as the husband of the asses 337 see had died, therefore the Revenue could not take advantage of the provisions of Section 41(1) of the Act.
The question is whether on the amalgamation of the Indian Sugar Company with the appellant company, the Indian Sugar Company continued to have its entity and was alive for the purposes of Section 41(1) of the Act.
The amalgamation of the two companies was effected under the order of the High Court in proceedings under Section 391 read with Sec tion 394 of the .
The Saraswati Industrial Syndicate, the transferee company was a subsidiary of the Indian Sugar Company, namely, the transferor company.
Under the scheme of amalgamation the Indian Sugar Company stood dissolved on 29th October, 1962 and it ceased to be in existence thereafter.
Though the scheme provided that the transferee company the Saraswati Industrial Syndicate Ltd. undertook to meet any liability of the Indian Sugar Company which that company incurred or it could incur, any liabili ty, before the dissolution or not thereafter.
Generally, where only one company is involved in change and the rights of the share holders and creditors are varied, it amounts to reconstruction or reorganisation or scheme of arrangement.
In amalgamation two or more companies are fused into one by merger or by taking over by another.
Reconstruction or 'amalgamation ' has no precise legal mean ing.
The amalgamation is a blending of two or more existing undertakings into one undertaking, the share holders of each blending company become substantially the share holders in the company which is to carry on the blended undertakings.
There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company.
Strictly 'amalgamation ' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition.
See: Halsbury 's Laws of Eng land, 4th Edition Vol.
7 Para 1539.
Two companies may join to form a new company, but there may be absorption or blend ing of one by the other, both amount to amalgamation.
When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.
In M/s. General Radio and Appliances Co. Ltd. & Ors.
M.A. Khader (dead) by Lrs., [1986] 2 S.C.C. 656, the effect of amalgamation of 338 two companies was considered.
M/s. General Radio and Appli ances Co. Ltd. was tenant of a premises under an agreement providing that the tenant shall not sub let the premises or any portion thereof to anyone without the consent of the landlord.
M/s. General Radio and Appliances Co. Ltd. was amalgamated with M/s. National Ekco Radio and Engineering Co. Ltd. under a scheme of amalgamation and order of the High Court under Sections 391 and 394 of .
Under the amalgamation scheme, the transferee company, namely, M/s. National Ekco Radio and Engineering Company had acquired all the interest, rights including leasehold and tenancy rights of the transferor company and the same vested in the transferee company.
Pursuant to the amalgamation scheme the transferee company continued to occupy the prem ises which had been let out to the transferor company.
The landlord initiated proceedings for the eviction on the ground of unauthorised sub letting of the premises by the transferor company.
The transferee company set up a defence that by amalgamation of the two companies under the order of the Bombay High Court all interest, rights including lease hold and tenancy rights held by the transferor company blended with the transferee company, therefore the transfer ee company was legal tenant and there was no question of any sub letting.
The Rent Controller and the High Court both decreed the landlord 's suit.
This Court in appeal held that under the order of amalgamation made on the basis of the High Court 's order, the transferor company ceased to be in existence in the eye of law and it effaced itself for all practical purposes.
This decision lays down that after the amalgamation of the two companies the transferor company ceased to have any entity and the amalgamated company ac quired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets.
In the instant case the Tribunal rightly held that the appellant company was a separate entity and a different assessee, therefore, the allowance made to Indian Sugar Company, which was a different asses see, could not be held to be the income of the amalgamated company for purposes of Section 41(1) of the Act.
The High Court was in error in holding that even after amalgamation of two companies, the transferor company did not become non existent instead it continued its entity in a blended form with the appellant company.
The High Court 's view that on amalgamation 'there is no complete destruction of corpo rate personality of the transferor company instead there is a blending of the corporate personality of one with another corporate body and it continues as such with the other is not sustainable in law.
The true effect and character of the amalgamation largely depends on the terms of the scheme of merger.
But there cannot be any doubt that when two compa nies 339 amalgamate and merge into one the transferor company loses its entity as it ceases to have its business.
However, their respective rights of liabilities are determined under scheme of amalgamation but the corporate entity of the transferor company ceases to exist with effect from the date the amal gamation is made effective.
In view of the above discussion, we agree with the Tribunal 's view that the amalgamating company ceased to exist in the eye of law, therefore the appellant was not liable to pay tax on the amount of Rs.58,735.
The appeal is accordingly allowed and we set aside the order of the High Court and answer the question in favour of the assessee against the Revenue.
There will be no order as to costs.
V.P.R Appeal allowed.
| The appellant was awarded a contract for constructing approaches to certain Bridge structure.
As per the agree ment, he was required to do hard rock cutting to the extent of 7,54,530 cft.
and the rate fixed was Rs.129 per thousand cft.
plus 2%.
Actually the appellant was required to perform hard rock cutting to the extent of 18,18,704 cft.
For the additional work, the appellant claimed payment at the rate of Rs.200 per thousand cft.
He also claimed certain other sums under other heads.
Dispute in respect of 4 heads was referred to arbitration.
The arbitrator in his award disal lowed two claims and allowed the other two claims, one of which was in respect of the additional work of hard rock cutting, and awarded a sum of Rs.52,800 under this head.
The arbitrator filed the award in the High Court.
After consid ering the objections filed by the respondent a Single Judge of the High Court ordered that the award be made a rule of the Court.
The respondent filed an appeal against the said order and the Division Bench set aside, ex parte, the claim for higher remuneration at the rate of Rs.200 per thousand cft.
Aggrieved, the appellant has preferred an appeal, by ' special leave.
The other appeal, also by special leave, is against the High Court 's rejection of the prayer for setting aside the ex parte judgment.
Allowing the former appeal and disposing of the latter one, HELD: 1.
As regards the award of an arbitrator under the Act, the law is well settled that the arbitrator 's adjudica tion is generally considered binding between the parties for he is a tribunal selected by the parties and the power of the court to set aside the award is restricted to cases set out In section 30 of the Act.
It is, however, not open to the 77 Court to speculate, where no reasons are given by the arbi trator, as to what impelled the arbitrator to arrive at his conclusion.
But the jurisdiction of the arbitrator is limit ed by the reference and if the arbitrator has assumed juris diction not possessed by him, the award to the extent to which it is beyond the arbitrator 's jurisdiction would be invalid and liable to be set aside.
An arbitrator or umpire is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agree ment or the deed of submission he is required to give such reasons.
If the arbitrator or umpire chooses to give reasons in support of his decision it is open to the Court to set aside the award if it finds that an error of law has been committed by him on the face of the record.
An award can neither be permitted nor set aside merely on the ground that it does not contain reasons in support of the conclusion or decisions reached in it except where the arbitration agree ment or the deed of submission requires him to give reasons.
[82H; 83A E] Jivarajbhai Ujamshi Sheth and Others vs Chintamanrao Balaji and Others, ; ; Raipur Development Authority and Others vs M/s Chokhamal Contractor and Others, [1989] 2 SCC 721, relied on.
2.1 In the instant case the arbitration agreement or the deed of submission did not require the arbitrator to give reasons and, therefore, the award cannot be questioned on the ground of an error on the face of the award.
The Divi sion Bench of the High Court set aside the award in respect of the claim relating to payment for additional work of hard rock cutting on the ground that in making the award the arbitrator exceeded his jurisdiction by allowing a rate to the contractor in excess of the agreed rate for the job of hard rock cutting against the terms and conditions in clause 12 of the agreement.
[83F G] 2.2 Under clause 12 of the agreement, the Engineer in charge was empowered to make any additions to the original specifications that may appear to him to be necessary or advisable during the progress of the work and the contractor was bound to carry out the work in accordance with any instructions given to him in writing signed by the Engineer in charge.
[85B C] 2.3 It has to be inferred from the terms of the contract whether this power to order extras, although apparently unlimited, is in fact limited to ordering extras upto a certain value and in such a case, extras ordered in excess of that amount may be outside the terms of the contract.
78 Parkinson (Sir Lindsay) & Co. Ltd. vs Commissioners of His Majesty 's Works and Public Buildings, , referred to.
Hudson 's Building and Engineering Contracts, 8th Edn.
294, 296, referred to.
In some awards given by the arbitrators in the Cen tral Public Works Department of the Government of India the variation of the tendered quantities under the variation clause in the contract has been restricted to 10% beyond which the contractor was entitled to claim as extras and awards have been accepted and implemented by the Government.
It appears that the standard form of contract of the Central Public Works Department has been amended and now it specifi cally permits for a limit of variation called "deviation limit" upto a maximum of 20% and upto such limit the con tractor has to carry out the work stipulated in the contract and for the work in excess of that limit at the rates to be determined in accordance with clause 12 A under which the Engineer in Charge can revise the rates having regard to the prevailing market rates.
[88D F] Gajaria 's Law relating to Building and Engineering Contracts in India, 3rd Edn., pages 410 412, referred to.
In the instant case, the Executive Engineer, the Superintending Engineer and the Additional Chief Engineer have expressed the view that the additional work under the terms of the contract may be confined to 20% and the appel lant may be paid at the rates prescribed in the contract for 20% of the additional work and for the extra quantity of additional work he may be paid remuneration at the increased rate taking into account the increased costs in execution of the said work on account of the peculiar nature of the work while considering the claim of the appellant the arbitrator was required to consider the terms of the contract and to construe the same.
It was, therefore, permissible for the arbitrator to consider whether clause 12 of the contract enables the Engineer in charge to require the appellant to execute additional work without any limit, or a reasonable limit should be placed on the quantity of the additional work, which the appellant may be required to execute at the rate stipulated for the main work under the contract.
For that purpose the arbitrator could take into consideration the practice prevalent in the Central Public Works Depart ment in this regard as well as the correspondence between the appellant and the authorities recommending payment of remuneration at the increased rate for the additional work in excess of 20% of the quantity stipulated in the contract.
79 The appellant was claiming increased rate of Rs.200 per 1000 cft.
for the entire quantity of additional work.
The arbi trator did not accept the said claim of the appellant in full and has partly allowed the said claim by awarding Rs.52,800 which means that the arbitrator has awarded the increased rate only for a part of the additional work of hard rock cutting which the appellant was required to exe cute.
The arbitrator was entitled to do so on the construc tion placed by him on clause 12 of the contract and, there fore, it cannot be said that in awarding the sum of Rs.52,800 for the additional work the arbitrator has exceed ed his jurisdiction and the award is vitiated by an error of jurisdiction.
[88G H; 89A E] 5.
The judgment of the Division Bench of the High Court setting aside the award of the arbitrator with regard to the claim relating to payment for additional work of hard rock cutting is set aside and the order passed by the Single Judge upholding the award of the arbitrator in this regard is restored.
[89F] 6.
Since the judgment of the Division Bench of the High Court is set aside the appeal against the order rejecting the prayer for setting aside the ex parte judgment, does not survive.
|
Appeals Nos. 491 and 492 of 1965.
Appeals by special leave from the order , dated September 17, 1963 of the Bombay High Court Nagpur Bench in Letters Patent Appeals Nos. 14 and 15 of 1963, 93 section V. Gupte, Solicitor General and I. N. Shroff, for the appellant (in C.A. No. 491 of 1965).
A. G. Ratnaparkhi, for the appellants (in C.A. No. 492 of 1965).
Bishan Narain, M. L. Kapur and I. section Sawhney, for the respondents Nos. 1 and 2 (in C.As.
Nos. 491 and 492 of 1965).
N. Shroff, for respondent No. 1 (in C.A. No. 492 of 1965).
The Judgment of the Court was delivered by Bachawat, J.
The question in issue in these appeals is whether certain employees of the Nagpur Electric Light & Power Co. Ltd.
,am employees within the meaning of section 2(9) of the (34 of 1948).
The company and the employees filed two separate applications before the Employees ' Insurance Court under section 75 of the Act for the determination of the question.
Their case is that out of the five categories of staff mentioned in appendices 1 to 5 to the company 's petition, those connected with the receiving station and workshop (appendices 1 and 2) were employees within the meaning of section 2(9), but those connected with the engineering, stores and outdoor work, meter,consumers and allocation departments and administration (appendices 3, 4 and 5) were not such employees.
The Regional Director, Employees State Insurance Corporation contested the applications, but he admitted that the workers of the categories mentioned in items 5 to 14 of appendix 4 and items 1, 7 and 8 of appendix 5 were not employees within the meaning of section 2 (9).
The Employees Insurance Court found that those workers and also the workers mentioned in item 12 of appendix 5 were not such employees.
The correctness of this finding is not in issue in these appeals and we express no opinion on it.
The categories of workers mentioned in appendix 111, items 1 4 in appendix TV and items 2 6 and 9 11 of appendix V are as follows 'Appendix III Mains Senior : (1) assistant engineers, (2) supervisors, (3) electricians, (4) overseers.
Mains junior : (1) cable jointers, (2) mistries, (3) sub mistries, (4) lineman H.T.O.H. mains, (5) mains coolies, (6) mains coolies temporary, (7) wireman temporary, (8) sub mistries, (9) sub station attendants.
Clerical staff : (1) clerk to asstt.
engineers, (2)draughtsman, (3) mains office peons.
Stores department : (1) storekeeper, (2) asstt.storekeeper, (3) clerks, (4) coolies.
94 Motor car staff : (1) motor drivers, (2) motor cleaners.
Mason.
Appendix IV Meter senior & junior : (1) deputy meter superintendent, (2) senior meter mechanic, (3) junior meter mechanic, (4) meter testers.
Appendix V (2) accounts (department accountant, chief cashier, asstt.
accountant, account clerks.
(3) Time keeping department : group head, clerks, (4) Filing department : group head, clerks.
(5) Typing department : steno typists, typists.
(6) Telephone operators.
(9) Record keeper and daftari.
(9a) Station clerk.
(10) Motor car staff : mechanic, drivers, cleaners.
(11) Menial staff : peons, garden malies, chowkidars, sweepers, rejas temporary.
" The, Employees Insurance Court held that the aforesaid workers were employees within the meaning of section 2 (9) of the Act.
The company and the employees filed two separate appeals from this decision to the High Court of Bombay (Nagpur Bench) under section 82 of the Act.
Abhayankar, J. affirmed the finding of the Employees Insurance Court and dismissed the appeals.
Letters Patent appeals from his orders were summarily dismissed by a Bench of the High Court.
The company and the employees have now preferred two separate appeals to this Court by special leave.
The Nagpur Electric Light & Power Co., Ltd., occupies cer tain premises at Kamptee Road, Nagpur where it carries on the work of transforming and transmitting electrical energy. 'Me premises are located within a compound wall.
Inside the premises there are several buildings, yards and open spaces.
The receiving station, the workshop, the meter testing department, the engineers ' quarters, the general office, and stores are in different buildings inside the premises.
The company does not generate electricity.
It maintains a receiving station inside the premises where it receives electrical energy in bulk from the generating station of the Maharashtra Electricity Board at Khapparkheda.
The energy when received is of 11,000 volts.
From the receiving station, the energy is either carried through electric supply lines to a transformer and is stepped down to 3,300 volts and is then carried to the sub stations in the city where it is again stepped 95.
down to 400 volts by other transformers, or is carried from the receiving station to sub stations where it is stepped down directly from 11,000 to 400 volts.
From the sub stations, the energy is transmitted by electric supply lines and distributed to consumers.
The first question is whether the company maintains a factory and if so, where its factory is located.
The applies in the first instance to all factories other than seasonal factories [s.1(4)] and may be extended to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise [s.1(5)].
2(12) defines a factory.
The relevant part of that section reads : "Sec.2(12) : " 'factory ' means any premises including the precincts thereof whereon twenty or more persons are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Indian Mines Act, 1923 or a railway running shed; The expressions 'manufacturing process ' and 'power ' shall have the meanings respectively assigned to them in the ." Any premises including the precincts thereof (excepting a mine and a railway running shed) constitute a factory if (1) 20 or more persons are working or were working thereon on any day of the preceding 12 months, and (2) in any part thereof a manufacturing process is being carried on with the aid of power.
If these two conditions are satisfied, the entire premises including the precincts thereof constitute a ' factory, though the manufacturing process is carried on in only a part of the premises.
The premises constituting a factory may be a building or open land or both, see Ardeshir H. Bhiwaniwala vs The State of Bombay(1).
Inside the same compound wall, there may be two or more premises; the premises used in connection with manufacturing processes may constitute a factory, and the other premises within the same compound wall may be used for the purposes unconnected with any manufacturing process and may form no part of the factory.
Sections 2(g) and (k) of the , define power and manufacturing process.
They are in these terms : 2(g).
" 'power ' means electrical energy, or any other form of energy which is mechanically transmitted and is not generated by human or animal agency;" (1) 96 2(k). ""manufacturing process ' means any process for (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water/or sewage, or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels.
" In view of section 2 (k) (iii), the process of transforming electrical energy from a high to a low potential and the process of transmitting the energy through supply lines are both manufacturing processes.
In a part of the premises occupied by the company, the two processes are carried on with the aid of power by means of electrical gadgets and other devices.
On the premises more than twenty persons were and are working.
No part of the premises is used for purposes unconnected with the manufacturing process The premises therefore constitute a factory within the meaning of section 2(12) of the .
The High Court said: "This manufacturing process is carried on by the Company not only in the building called the workshop or the receiving station but over the whole area over which the process of transmission is carried on including the sub stations where electricity is stored and supplied to the consumers by further transmission lines.
Thus every part over which this process is carried on will be a factory within the meaning of the .
" We cannot accept this line of reasoning.
It seems to us a startling proposition that every inch of the wide area over which the transmission lines are spread is a factory within the meaning of section 2(12). "A factory must occupy a fixed site", see Halsbury 's Laws of England, 3rd ed., Vol. 71 ,article 15, p. 15.
The company 's factory has a fixed site.
It is located inside the Kamptee Road 97 and its boundaries are fixed by the compound wall of the premises The next question is whether the members of the staff of the categories mentioned in appendix 111, items 1 4 of appendix IV and items 2 6 and 9 11 of appendix V to the company 's petition am employees within the meaning of section 2(9) of the .
It is common case that these workers are employed on remuneration which in the aggregate does not exceed four hundred rupees a month.
Section 2(9) is in these terms " employee ' means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services am so lent or let on hire has entered into a contract of service; but does not include (a) any member of the Indian naval, military or air forces or; (b) any person employed on a remuneration which in the aggregate exceeds four hundreds rupees a month; " The definition of employee in section 2(9) may be contrasted with that of a worker in section 2 (1) of the , which is in these terms 98 worker ' means a person employed, directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process;" It is to be seen that the definition of an employee in the is wider than that of a worker in the .
The object of the is to secure the health, safety, welfare, proper working hours, leave and other benefits for workers employed in factories.
The benefit of this Act does not extend to field workers working outside the factory, see the State, of Uttar Pradesh vs M. P. Singh(1).
The object of the is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependents ' benefits to their dependants.
The benefit of this Act extends inter alia to the employees mentioned in section 2 (9) (i) whether working inside the factory or establishment or elsewhere.
The definition of "employee" in section 2 (9) deals with three classes of employees.
We are concerned with the class of employees mentioned in section 2 (9) (i).
The courts below concurrently found and in our opinion, rightly, that all the workers of the disputed categories are persons employed for wages in or in connection with work of the company 's factory and are directly employed by the company on work of or incidental to or connected with the work of the factory.
Some of them do the work in the factory and some work elsewhere, but they are all employees within the meaning of section 2 (9) (i).
Take the case of the workers mentioned in appendix 111.
The assistant engineers, supervisors, electricians, and overseers are engaged in the erection and maintenance of the electricity supply lines connected with transmission of power.
The cable jointer, mistries, linemen, coolies and wiremen are employed for inspection of the supply lines, digging pits, erecting poles for laying distribution mains and service lines.
The masons attend to the masonry work of the buildings.
The attendants in charge of the sub stations look after the transformation and transmission of power.
The motor drivers and cleaners are employed for carrying materials and tower ladders in trucks for maintenance of the supply lines.
The clerks, draughtsmen and main office peons help the assistant engineers.
The store keepers and clerks with The assistance of coolies issue stores to all the departments and keep accounts relating to stock.
The deputy meter superinten dent, meter mechanics and meter testers mentioned in items 1 to 4 of appendix IV attend to the testing calibration and repairs of (1) ; 99 the meters.
Let us now take the case of the staff mentioned in items 2 to 6 and 9 to II of appendix V.
The clerks in the accounts, time keeping and filing departments are employed to maintain accounts, attendance registers, muster rolls, pay sheets, typing, filing and dispatching documents required in connection with all the departments including the receiving station and the workshop.
The telephone operators attend to the telephone calls for all the departments.
The menial staff is required to do mis cellaneous work including the cleaning of the office compound.
The motor car staff is employed to look after the cars employed in the administration section.
All these employees, clerical or otherwise, are employed in connection with the work of the factory, that is to say, in connection with the work of transforming and transmitting electrical power.
Some of the employees are clerks; they are not engaged in manual labour.
But a person doing non manual work can be an employee within the meaning of s ' 2 (9) (i) if he is employed in connection with work of the factory.
The duties of the administrative staff are directly con nected with the work of the factory.
The case of the Employees ' State Insurance Corporation, Bombay vs Raman(1) is distinguishable.
In that case a company had a factory and an administrative office.
The office was situated in a building which was situated within the same compound in which the factory was located.
The entire compound was surrounded by one compound wall.
It was found that the work of the factory began with the collection of raw materials and ended with the production of finished articles and the work of selling the products was not connected with the work of the factory.
The administrative office handled sales of.
the products manufactured in the factory as well as goods imported from abroad.
The factory and the administrative office maintained separate muster and wage rolls and separate accounts.
In these circumstances, it was held that the clerks employed in the administrative office, whose work consisted mainly of taking down dictations from the manager and other officers and typing out letters, were not em ployees within the meaning of section 2(9).
The facts of the present case are entirely different.
The company maintains one establishment for its factory.
The factory does the work of transforming and transmitting electrical energy.
All the workers in question including the clerks and the administrative staff are engaged in connection with this work.
None of them is employed in any separate establishment unconnected with the work of the factory.
Some of the employees work outside the factory, but their duties are connected with the work of the factory.
They are therefore employees within the meaning of section 2 (9) (i).
Some are (2) 100 employed in the sub stations.
It is common case that the stations are not independent factories.
The sub stations attendants attend to work which is directly connected with the of the factory at the main station.
They are therefore employees within the meaning of section 2 (9) (i).
In the result the appeals are dismissed with costs.
One hear fee.
G.C Appeals dismissed.
| The appellant company carried on the work of transforming And transmitting electrical energy.
There was dispute between the company and the respondent whether certain employees of the company like engineers, draughtsmen, clerks, accountants etc.
mentioned in Appendices III, IV and V of the company 's petition before the Employees ' Insurance Court, were 'Employees ' or not within the meaning of section 2(9) of the Employees Insurance Act, 1948.
The Employees Insurance Court held the said workers to be employees under section 2(9) and this finding was confirmed by the Single Judge as well as the Division Bench of the High Court.
The company appealed to this Court by special leave.
HELD : (i) The premises of the company were a factory within the meaning of the Employees State Insurance Act but the High Court was wrong in laying down the proposition that every inch of the area over which the transmission lines were spread was a factory within the meaning of section 2(12).
The company 's factory had a fixed site and was located within the compound wall of its premises.
[96 E, H] (ii)All the employees of the disputed categories clerks or otherwise were employed in connection with the work of the factory, that is to say, in connection with the work of transforming and transmitting electrical power.
Some of the employees were not engaged in manual labour.
But a person doing non manual work can be an employee within the meaning of section 2(9) (i) if he is employed in connection with the work of the factory.
The duties of the administrative staff are directly connected within the work of the factory.
[99 C, G] Even those employees who worked outside the factory but whose duties were connected with the work of the factory were employees within the meaning of section 2(9)(i).
Among such employees were to be included those attending to sub stations of the factory.
[100 A] Ardeshir H. Bhiwaniwala vs The State of Bombay, [1961] 3 S.C.R.542, State of Uttar Pradesh vs M. P. Singh, ; and Employees ' State Insurance Corporation, Bombay vs Raman, referred to.
|
Civil Appeal Nos. 1212, 2089 and 2237 of 1978.
From the Judgment and order dated 15 6 1978 of the Gujarat High Court in Special Civil Application No. 1150 of 1976.
Y.S. Chitale, J.C. Bhatt, A.K. Sen, J.M. Nanavati, D.C. Gandhi, A.G. Menses, K.J. John and K.K. Manchanda for the Appellants in C.A. 1212 and 2237/78 and RR.
1 in CA 2089.
V.M. Tarkunde, Y.S. Chitale, P.H. Parekh and N.J. Mehta for the Appellant in CA 2089 and R. 1 in CA 1212.
M.C. Bhandare and B. Datta for the Intervener in CA 1212 (Ahmedabad Nagar Employee Union).
R.K. Garg, Vimal Dave and Miss Kailash Mehta for the Intervener Gujarat Steel Tubes Mazdoor Sabha in CA 1212.
The Judgment of V.R. Krishna Iyer, and D.A. Desai, JJ was delivered by Krishna Iyer, J.A.D. Koshal, J. gave a dissenting Opinion.
154 KRISHNA IYER, J.
Every litigation has a moral and, these appeals have many, the foremost being that the economics of law is the essence of labour jurisprudence.
The case in a nutshell An affluent Management and an indigent work force are the two wings of the Gujarat Steel Tubes Ltd. which manufactures steel tubes in the outskirts of Ahmedabad city and is scarred by an industrial dispute resulting in these appeals.
This industry, started in 1960, went into production since 1964 and waggled from infancy to adulthood with smiling profits and growing workers, punctuated by smouldering demand, strikes and settlements, until there brewed a confrontation culminating in a head on collision following upon certain unhappy happenings.
A total strike ensued, whose chain reaction was a wholesale termination of all the employees, followed by fresh recruitment of workmen, de facto breakdown of the strike and dispute over restoration of the removed workmen.
This cataclysmic episode and its sequel formed the basis of a Section 10A arbitration and award, a writ petition and judgment, inevitably spiralling up to this Court in two appeals one by the Management and the other by the Union which have been heard together and are being disposed of by this common judgment.
The arbitrator held the action of the Management warranted while the High Court reversed the Award and substantially directed reinstatement.
The Judge Perspective A few fundamental issues, factual and legal, on which bitter controversy raged at the bar, settle the decisional fate of this case.
A plethora of precedents has been cited and volumes of evidence read for our consideration by both sides.
But the jural resolution of labour disputes must be sought in the law life complex, beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory texts, in the economic basics of industrial justice which must enliven the consciousness of the court and the corpus juris.
This Court has developed Labour Law on this road basis and what this Court has declared holds good for the country.
We must first fix the founding faith in this juristic branch before unravelling the details of the particular case.
Viewing from this vantage point, it is relevant to note that the ethical roots of jurisprudence, with economic overtones, are the clan vital of any country 's legal system.
So it is that we begin with two quotations one from the old Testament and the other from Gandhiji, the Indian New Testament as perspective setters.
After all, 155 industrial law must set the moral legal norms for the modus vivendi between the partners in management, namely, Capital and Labour.
Cain reported, when asked by God about his brother Abel, in the Old Testament: 'Am I my brother 's keeper ? ', 'Yes ' was the implicit answer in God 's curse of Cain.
In the fraternal economics of national production, worker is partner in this biblical spirit.
In our society, Capital shall be the brother and keeper of Labour and cannot disown this obligation, especially because Social Justice and Articles 43 and 43A are constitutional mandates.
Gandhiji, to whom the Arbitrator has adverted in passing in his award, way back in March 1946, wrote on Capitalism and Strikes h the Harijan: "How should capital behave when labour strikes ? This question is in the air and has great importance at the present moment.
One way is that of suppression named or nicknamed 'American '.
It consists in suppression of labour through organised goondaism.
Everybody would consider this as wrong and destructive.
The other way, right and honorable, consists in considering every strike on its merits and giving labour its due not what capital considers as due, but what labour itself would so consider and enlightened public opinion acclaims as just.
In my opinion, employers and employed are equal partners, even if employees are not considered superior.
But what we see today is the reverse.
The reason is that the employers harness intelligence on their side.
They have the superior advantage which concentration of capital brings with it, and they know how to make use of it.
Whilst capital in India is fairly organised, labour is strike in a more or less disorganised condition in spite of Unions and Federation.
Therefore, it lacks the power that true combination gives.
Hence, my advice to the employers would be that should willingly regard workers as the real owners of the concerns which they fancy they have created.
Tuned to these values are the policy directives in Articles 39, 41, 42, 43 and 43A.
They speak of the right to an adequate means of livelihood, the right to work, humane conditions of work, living wage ensuring a decent standard of life and enjoyment of leisure and participation of workers in management of industries.
De hors these man 156 dates, law will fail functionally.
Such is the value vision of Indian Industrial Jurisprudence.
The Matrix of facts A Pre view The nidus of facts which enwomb the issues of law may be elaborated a little more at this stage.
In the vicinity of Ahmedabad City, the appellant is a prosperous engineering enterprise which enjoys entrepreneureal excellence and employs over 800 workmen knit together into the respondent Union called the Gujarat Steel Tubes Mazdoor Sabha (the Sabha, for short).
Fortunately, the industry has had an innings of escalating profits but the workmen have had a running complaint a raw deal.
Frequent demands for better conditions, followed by negotiated settlements, have been a lovely feature of this establishment, although the poignant fact remains that till the dawn of the seventies, the gross wages of the workmen have hovered round a harrowing hundred rupees or more in this thriving Ahmedabad industry.
The course of this precarious co existence was often ruffled, and there was, now and then, some flare up leading to strike, conciliation and even reference under Section 10.
When one such reference was pending another unconnected dispute arose which, alter some twists and turns, led to an industrial break down and a total strike.
The episodic stages of this bitter battle will have to be narrated at length a little later.
Suffice it to say that the Management jettisoned all the 853 workman and recruited some fresher to take their place and to keep the wheels of production moving.
In the war of attrition that ensued, labour lost and capitulated to Capital.
At long last, between the two, a reference to arbitration of the disputes was agreed upon under Section 10A of the (the Act, for short).
The highlight of the dispute referred for arbitration was whether the termination orders issued by the Management against the workmen whose names were set out in the annexure to the reference were "legal, proper and justified"; if not, whether the workmen were 'entitled to any reliefs including the relief of reinstatement with continuity of service and full back wages '.
The arbitrator 's decision went against the Sabha while, on a challenge under Article 226, the High Court 's judgment virtually vindicated its stand.
This is the hang of the case.
The substantial appeal is by the Management while the Sabha has a marginal quarrel over a portion of the judgment as disclosed in its appeal.
The 'jetsam ' workmen, a few hundred in number, have been directed to be reinstated with full or partial back pay and this is the bitter bone of contention.
157 A stage by stage recapitulation of the developments is important to get to grips with the core controversy.
Sri Ashok Sen, for the appellant Management, and Sri Tarkunde for the respondent Sabha, have extensively presented their rival versions with forceful erudition.
Sri R.K. Garg, of course, for some workmen has invoked with passion the socialist thrust of the Constitution as a substantive submission and, as justificatory of the workmen 's demands, relied on the glaring contrast between the soaring profits and the sagging wages, while Sri Bhandare has pressed the lachrymose case of the several hundreds of 'interregnal ' employees whose removal from service, on reinstatement of the old, might spell iniquity.
Olive Branch Approach: At this stage we must disclose an effort at settlement we made with the hearty participation of Sri Ashok Sen and Sri Tarkunde at the early stages of the hearing.
The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace making zone, disentangle the differences, narrow the mistrust gap and convert them, through consensual steps, into negotiated justice.
Law is not the last word in justice, especially social justice.
Moreover, in our hierarchical court system the little man lives in the short run but most litigation lives in the long run.
So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, Management and Union.
This 'olive Branch ' approach brought the parties closer in our court and gave use a better understanding of the problem, although we could not clinch a settlement.
So we heard the case in depth and felt that some of the legal issues did merit this court 's declaratory pronouncement, settlement or no settlement.
Mercifully, counsel abbreviated their oral arguments into an eight day exercise, sparing us the sparring marathon of 28 laborious days through which the case stretched out in the High Court.
Orality ad libitem may be the genius of Victorian era advocacy but in our 'needy ' Republic with crowded dockets, forensic brevity is a necessity.
The Bench and the Bar. must fabricate a new shorthand form of court methodology which will do justice to the pockets of the poor who seek right and justice and to the limited judicial hours humanly available to the court if the delivery system of justice is not to suffer obsolescence.
The facts: Back to the central facts.
Proof of the 'efficient ' management of the Gujarat Steel Tubes Ltd. is afforded by the testimony of larger turnover and profits, year after year, from the beginning down 158 to date.
The mill was commissioned in January 1964 but by the accounting year 1971 72 the turnover had leapt to Rs. 560 lakhs.
It scaled to Rs. 680 lakhs the next year, to Rs. 1136 lakhs the year after and to Rs. 20 crores in 1974 75.
This enterprise entered the export trade and otherwise established itself as a premier manufactory in the line.
Steel shortage is the only shackle which hampers its higher productivity.
But its increasing shower of prosperity was a sharp contrast, according to Sri Garg, to the share of the wage bill.
The worker star ted on a magnificent sum per mensem of Rs. 100/ in toto even as late as 1970, although some workmen, with more service, were paid some what higher.
The extenuatory plea of the Management, justificatory of this parsimony, was that other mill hands were receiving more niggardly wages in comparable enterprises.
Probably, unionisation, under these luridly low paid circumstances, caught on and a workers ' union was born somewhere around 1966.
A sensible stroke of enlightened capitalism persuaded the Management to enter into agreements with the Union, somewhat improving emoluments and ameliorating conditions.
By 1968, the Sabha, a later union, came into being and commanded the backing of all or most of the mill hands.
By March 1969, the Sabha presented a charter of demands, followed by resistance from the Management and strike by the workers.
By July 1969, a settlement with the Sabha was reached.
Agreements relating to the various demands brought quiet and respite to the industry although it proved temporary.
A vivid close up of the sequence and consequence of the dramatic and traumatic events culminating in the reference to arbitration and the impugned award is essential as factual foundation for the decision of the issues.
Even so, we must condense, since labyrinthine details are not needed in a third tier judgment.
Broad lines with the brush bring out the effect, not minute etches which encumber the picture.
An agreement of futuristic import with which we may begin the confrontational chronicle is that of April 1970.
Clause 6 thereof runs thus: "Management of the Company agrees to implement recommendations of the Central Wage Board for Engineering Industries as and when finally declared and all the increments granted to workmen from time to time under this agreement shall be adjusted with those recommendations provided that such adjustment shall not adversely affect the wages of workman.
" The engineering industry, where India is forging ahead, was apparently exploitative towards labour, and to make amends for this un 159 healthy position, the Central Wage Board was appointed in 1964 although it took six long years to recommend revision of wages to be implemented with effect from 1 1 1969.
Meanwhile, the masses of workers were living 'below the broad line ' Saintly patience in such a milieu was too much to expect from hungry demands and pressing for the recommendations of the Wage Board to be converted into immediate cash.
But, as we will presently unravel, Wage Board expectations ' were proving teasing illusions and premises of unreality because of non implementation, viewed from the Sabha 's angle.
The Management, on the other hand, had a contrary version which we will briefly consider.
Luckily, agreed mini increases in wages were taking place during the years 1970, 1971 and 1972.
Likewise, bonus was also the subject of bargain and agreement.
But in September 1971, an allegedly violent episode broke up the truce between the two, spawned criminal cases against workers, led to charges of go slow tactics and lock outs and burst into suspension, discharge and dismissal of workmen.
The crisis was tided over by continued conciliations and two settlements.
We are not directly concerned with the cluster of clauses therein save one.
64 workmen had been discharged or dismissed, of whom half the number were agreed to be reinstated.
The fate of the other half (32 workers) was left for arbitration by the Industrial Tribunal.
The dark clouds cleared for a while but the sky turned murky over again, although the previous agreement had promised a long spell of normalcy.
The Sabha, in October 1972, met and resolved to raise demands of which the principal ones were non implementation of the Wage Board recommendations, bonus for 1971 and wages during the lockout period.
The primary pathology of industrial friction is attitudinal.
The Management could have (and, indeed, did, with a new Union) solved these problems had they regarded the Sabha as partner, not saboteur.
Had the bitter combativeness of the Sabha been moderated, may be the showdown could have been averted.
Apportioning blame does not help now, but we refer to it here because Sri Ashok Sen, with feeling fury, fell foul of the criticism by the High Court that the Management had acted improperly in insisting on arbitration, and argued that when parties disagreed, arbitral reference was the only answer and the workers ' fanatical rejection of arbitration made no sense We need not delve into the details of the correspondence relied on by either side to reach the truth.
For, the Unions case is that in the prior settlement between the two parties arbitral reference came only after negotiations failed.
That was why they 160 pressed the Management to reason together, avoiding wrestling with each other before a slow moving umpire.
Sri Tarkunde, for the Sabha, urged that the workmen were not intransigent but impatient and pleaded for a negotiated settlement since the main point in dispute, namely the implementation of the Central Engineering Wage Board 's recommendations, was too plain to admit of difference, given good faith on both sides.
We will examine the substance of this submission later but it needs to be emphasised that workmen, surviving on starving wages and with notoriously fragile staying power, are in no mood for adjudicatory procedures, arbitral or other, if the doors of negotiation are still ajar.
The obvious reason for this attitude is that the litigative length of the adjudicatory apparatus, be it the tribunal, the court or the arbitrator, is too lethargic and long winded for workmen without the wherewithal to survive and is beset with protracted challenges either by way of appeal upon appeal or in the shape of writ petitions and, thereafter, appeals upon appeals.
The present case illustrates the point.
Where workmen on hundred rupees a month demand immediate negotiation the reason is that privations have no patience beyond a point.
Now and here, by negotiation, is the shop floor glamour.
In this very matter, although the controversy before the arbitrator fell within a small compass, he took a year and ninety printed pages to decide, inevitably followed by a few Years and hundred and thirty printed pages of judgment in the High Court and a longer spell in this Court with slightly lesser length of judgment.
Which workman under Third World Conditions can withstand this wasting disease while hunger leaves no option save to do or die ? Raw life, not rigid logic, is the mother of law.
After the demands were raised by the Union, the main issue being implementation of the Wage Board recommendations, a stream of correspondence, meetings and inchoate settlements ensued, but the crucial question, which would have meant 'cash and carry ' for the workmen, baffled solution.
Do negotiate since the application of the Wage Board recommendations are beyond ambiguity, was the Sabha 's peremptory plea.
We differ; therefore, go to arbitration, was the Management 's firm response.
A stalemate descended on the scene.
No breakthrough being visible, the Sabha charged the Management by its letter of January 25, 1973 with breach of clause 6 of the Agreement of August 4, 1972 which ran thus: "That the parties agree that for a period of 5 years from the date of this settlement all disputes will be solved by mutual negotiations or, failing that, by joint arbitration under 161 Section 10A of the I.D. Act, 1947.
Neither party shall take any direct action including go slow, strike and lock out for a period of 5 years from the date of this settlement." Various aspersions of anti labour tactics were included in the Sabha 's letter but the most money loaded item was the grievance about the Wage Board recommendations.
The temper, by now, was tense.
The Management, on the same day, (January 25, 1973) set out its version on the notice board and the High Court 's summary of it runs thus .
"The notice stated that during the course of the meeting with the representatives of the Sabha held on January 20, 1973 the Company had expressed its willingness to implement the Wage Board recommendations according to its interpretation on and with effect from January 1, 1969 without prejudice to the rights and contentions of the workmen and leaving it open to the parties to take the matter to arbitration for resolution of the points of dispute.
The Sabha, however, had turned down this suggestion and it came to the notice of the Company that workmen were being instigated by making false representations.
The Company clarified that on and with effect from January 1, 1972 every workman would be entitled to the benefits of Wage Board recommendations, irrespective of whether the concerned workman had put in 240 days attendance." The Sabha 's answer was a strike two days later.
This event of January 27 was countered quickly by the Management restating its attitude on the Wage Board recommendations, asserting that the strike was illegal and in breach of the settlement of August 4, 1972 and wholly unjustified because the offer of reference to arbitration, negotiations failing, had been spurned by the Sabha.
The notice wound up with a command and a caveat: "If the workmen do not immediately resume duty, the Company would not be under any obligation to continue in service those 32 workmen who have been taken back in service pursuant to the settlement dated August 4, 1972.
Besides, if (the workmen) continue causing loss to the Company from time to time in this manner, the Company will not also be bound to implement the Wage Board, recommendations on and with effect from January 1, 1969, which may also be noted.
The Company hereby withdraws all its proposals unless the Workmen withdraw the strike and resume work within two days.
" 162 This threat was dismissed by the workmen as a brutum fulmen and the strike continued.
The Management, therefore, came up on the notice board castigating the Sabha with irresponsible obduracy in waging an illegal and unjustified strike.
A warning of the shape of things to come was given in this notice.
The High Court has summed it up thus: "The Company gave an intimation that in view of such obstinate attitude on the part of the Sabha and the workmen, it had decided to withdraw its earlier offer to implement the Wage Board recommendations on and with effect from January 1, 1969 as already cautioned in the notice dated January 27, 1973.
The said decision must be taken to have been thereby communicated to the workmen and Sabha.
The notice further stated that having regard to the obdurate, unreasonable and illegal attitude adopted by the workmen and Sabha, the Company had decided to take disciplinary proceedings against the defaulting workmen.
In this connection, the attention of the workmen was drawn to the fact that the strike was illegal not only because of the terms of the settlement dated August 4, 1972 but also because of the pendency of the reference relating to reinstatement of 32 workmen before the Industrial Court and, that, therefore, the Company was entitled to take disciplinary action against them.
Finally, the Company appealed to the workmen to withdraw their illegal and unjustified strike forthwith and to resume work." These exercises notwithstanding, the strike raged undaunted, the production was paralysed and the Management retaliated by an elaborate notice which dilated on its preparedness to negotiate or arbitrate and the Sabha 's unreason in rejecting the gesture and persisting on the war path.
The stern economic sanction was brought home in a critical paragraph: "By this final notice the workmen are informed that they should withdraw the strike and resume work before Thursday, February 15, 1973.
If the workmen resume duty accordingly, the management would be still willing to pay salary according to the recommendations of the Wage Board on and with effect from January 1, 1969.
Furthermore, the management is ready and willing to refer to the arbitration of the Industrial Tribunal the question as to whether the management has implemented the settlement dated August 4, 1972 and all other labour problems.
In spite of this, if the workmen do not resume duty before Thursday, February 15, 1973.
then the Company will terminate the services of all workmen who are on strike and thereafter it will run the 163 factory by employing new workmen.
All workmen may take note of this fact.
" The count down thus began.
February 15, 1973 arrived, and the Management struck the fatal blow of discharging the strikers all the labour force, 853 strong and recruiting fresh hands and thus work was resumed by February 19, 1973.
This public notice was allegedly sent to the Sabha and circulated to such workmen as hovered around the factory.
It is common case that the notice of February 15,1973, was not sent to individual workmen but was a signal for action.
The drastic consequence of disobedience was spelt out in no uncertain terms: "The workmen are hereby informed that they should resume duty on or before Monday, February 19, 1973 failing which the Management will presume that the workmen want to continue their strike and do not wish to resume work until their demands as aforesaid are accepted by the management.
Parallel negotiations were going on even while mailed fist manoeuvres were being played up thanks to the basic goodwill and tradition of dispute settlements that existed in this company.
Even amidst the clash of arms, bilateral diplomacy has a place in successful industrial relations.
The Management and the Sabha allowed the talks to continue which, at any rate, clarified the area of discord.
One thing that stood out of these palavers was that both sides affirmed the pre condition of negotiations before arbitration over differences although the content, accent and connotation of 'negotiations ' varied with each side.
No tangible results flowed from these exercises and the inevitable happened on February 21, 1973 when the Management blotted out the entire lot of 853 workmen from the roster, by separate orders of discharge from service, couched in identical terms.
The essential terms read thus : "Your services are hereby terminated by giving you one month 's salary in lieu of one month 's notice and accordingly you are discharged from service.
You should collect immediately from the cashier of the factory your one month 's notice pay and due pay, leave entitlements and gratuity, if you are entitled to the same.
The payment will be made between 12 noon and 5 p.m.
If and when you desire to be employed, you may apply ill writing to the Company in that behalf and on receipt of the application, a reply will be sent to you in the matter." 164 Casual workmen were issued separate but similar orders.
The Management did record its reasons for the action taken, on February 20, 1973 and forwarded them to the Sabha and to the individual workmen on request.
The anatomy of this proceeding is of critical importance in deciding the character of the action.
Was it a harm less farewell to the workmen who were unwilling to rejoin or a condign punishment of delinquent workmen ? The separate memorandum of Reasons refers to the strike as illegal and unjustified and narrates the hostile history of assault by workmen of the officers, their go slow tactics and sabotage activities, their contumacious and a host of other perversities vindicating the drastic action of determining the services of all the employees.
The concluding portion reads partly stern and partly non committal: "In the interest of the Company it is decided to terminate the services of all the workmen who are on illegal and unjustified strike since 27th January, 1973.
Under the circumstances, it is decided that the services of all the workmen who are on illegal and unjustified strike should be terminated by way of discharge simpliciter.
These workmen, however, may be given opportunity to apply for employment in the Company and in case applications are received for employment from such employees, such applications may be considered on their merits later on.
It may be mentioned here that while arriving at the aforesaid decision to terminate the services of the workmen, various documents, notices, correspondence with the Union and others, records of production, etc. have been considered and therefore the same are treated as part of the relevant evidence to come to the conclusion as aforesaid.
FINAL CONCLUSION The services of all the workmen who are on illegal and unjustified strike since 27 1 1973 should be terminated by way of discharge simpliciter and they should be offered all their legal dues immediately.
The Administrative Manager is hereby directed to pass orders on individual workers as per draft attached.
We thus reach the tragic crescendo when the Management and the workmen fell apart and all the workmen 's services were severed.
Whether each of these orders using, in the contemporaneous reasons, 165 the vocabulary of misconduct but, in the formal part, the expression 'discharge simpliciter ', should be read softly as innocent termination or sternly as penal action, is one of the principal disputes demanding decision.
We may as well complete the procession of events before taking up the major controversies decisive of the case.
The total termination of the entire work force of 853 employees was undoubtedly a calamity of the first magnitude in a country of chronic unemployment and starving wages.
Nevertheless, under certain circumstances, discharge of employees may well be within the powers of the Management subject to the provisions of the Act.
With all the strikers struck off the rolls there was for a time the silence of the grave.
The conditional invitation to the employees to seek de novo employment by fresh applications which would be considered on their merits, left the workers cold.
So the factory remained closed until April 28, 1973 when, with new workers recruited from the open market, production recommenced.
Among the militants, the morale which kept the strike going, remained intact but among the others the pressure to report for employment became strong.
Re employment of discharged workmen began and slowly snowballed, so that by July 31, 1973 a substantial number of 419 returned to the factory.
The crack of workman 's morale was accelerated by escalating reemployment and the Management 's restoration of continuity of service and other benefits for re employed hands.
The Employer relied on this gesture as proof of his bond fides.
Meanwhile, there were exchanges of letters between and 'trading ' of charges against each other.
The Management alleged that the strikers were violent and prevented loyalists ' return while the Sabha was bitter that goondas were hired to break the strike and promote blacklegs.
These imputations have a familiar ring and their impact on the legality of the discharge of workmen falls for consideration a little later.
The stream of events flowed on.
The Sabha protested that the Management was terrorising workmen, exploiting their sagging spirit and illegally insisting on fresh applications for employment while they were in law continuing in services.
With more 'old workers ' trickling back for work and their discharge orders being cancelled, the strike became counter productive.
Many overtures on both sides were made through letters but this epistolary futility failed to end the imbroglio and brought no bread.
The worker wanted bread, job, and no phyrric victory.
A crescent of hope appeared on the industrial sky.
The Management but out a 'final offer ' on May 31, 1973, calling on all workmen 166 to rejoin last the remaining vacancies also should be filled by fresh recruits.
The Sabha responded with readiness to settle and sought some clarifications and assurances.
The employer informed : "Our offer is open till 10 6 1973.
From 11 6 1973 we shall recruit new hands to the extent necessary.
Thereafter workers who will not have reported for work shall have no chance left for re employment with us.
We repeat that those workers who will report for work will be taken back in employment with continuity of their services, that the orders of discharge passed against them on 21 2 1973 shall be treated as cancelled and they will also be paid the difference in wages from 1969 as per the recommendations of the Wage Board.
" The Sabha was willing and wrote back on June 8, 1973 but sought details about the attitude of the Management to the many pending demands.
Meanwhile, the sands of time were running out and so the Sabha telegraphed on 9th June that the workers were willing to report for work but were being refused work.
They demanded the presence of an impartial observer.
The reply by the Management repelled these charges, but there was some thaw in the estrangement, since the time for return to work of the strikers was extended upto 16 6 73.
An apparent end to a long strike was seemingly in sight with the Sabha sore but driven to surrender.
On 13 6 73 the Sabha Secretary wrote back: "This is a further opportunity to you even now to show your bona fides.
If you confirm to take all the workmen discharged on 21 2 1973 as stated in your various letters and to give them intimation and reasonable time to join, l will see that your offer is accepted by the workmen.
" Here, at long last, was the Management willing to 'welcome ' back all the former employees and the Sabha limping back to the old wheels of work.
Was the curtain being finally drawn on the feud ? Not so soon, in a world of bad blood and bad faith; or may be, new developments make old offers obsolete and the expected end proves an illusion.
Anyway, the victor was the Management and II the vanquished the Sabha and the re employment offered was watered down.
In our materialist cosmos, often Might is Right and victory dictates morality ! 167 Hot upon the receipt of the Sabha 's letter accepting the offer the Management back tracked or had second thoughts on full re employment.
For, they replied with a long catalogue of the Sabha 's sins, set out the story of compulsion to keep the production going and explained that since new hands had come on the scene full re employment was beyond them.
In its new mood of victorious righteousness, the Management modified the terms of intake of strikers and saddled choosy conditions on such absorption suggestive of breaking the Sabha 's solidarity: "As on the present working of the Company, the Company, may still need about 250 more workers including those to be on the casual list as per the employment position prior to the start of the strike.
You may, therefore, send to us immediately per return of post the list of the workers who can and are willing to join duty immediately so as to enable us to select and employ the workmen as per the requirement of the Company.
Further, it would also be necessary for you to state in your reply that you have called off the strike and have advised the workers to resume the work as otherwise it is not clear from your letter as to whether you are still advocating the continuance of the strike or that you have called off the strike.
Therefore, unless we have a very definite stand known from you on this issue, it may not be even now possible for us to enter into any correspondence with you.
We may again stress that if your tactics of prolonging the issue by correspondence are continued the management would be constrained to fake new recruits and in that case, at a later date it may not be even possible to employ as many workmen as may be possible to employ now.
" Nothing is more galling, says Sri Tarkunde, than for a Union which has lost the battle and offered to go back to work to be told that it should further humiliate itself by formally declaring the calling off of the strike.
Sentiment apart, the Sabha had agreed to go back, but then the Management cut down the number to be re employed to 250 and, even this, on a selective basis.
This selection could well be to weed out Union activists or to drive a wedge among the Union members.
These sensitive thoughts and hard bargains kept the two apart.
The Sabha, wounded but not wiped 168 out, did not eat the humble pie.
The Management, on account of the intervening recruitments and injuries inflicted by the strike, did not budge either.
At this point we find that out of 853 employees who had been sacked 419 had wandered back by July 31, leaving 434 workmen at flotsam.
Their reinstatement became the focus of an industrial dispute raised by the Sabha.
A few more were left out of this jobless mass, and through the intercession of the Commissioner of Labour both sides agreed to resolve their disagreement by arbitral reference under Sec.
10A of the Act, confining the dispute to reinstatement of 400 workmen discharged on February 21 1973.
A reference under Sec.
10A materialised.
The 'Labour litigation ' began in May 1975 and becoming 'at each remove a lengthening chain ' laboured from deck to deck and is coming to a close, hopefully, by this decision.
Is legal justice at such expensive length worth the candle or counter productive of social justice? Is a streamlined alternative beyond the creative genius of Law India? An aside As urgent as an industrial revolution is an industrial law revolution, if the rule of law were at all to serve as social engineering.
The current forensic process needs thorough overhaul because it is over judicialised and under professionalised, lacking in social orientation and shop floor know how and, by its sheer slow motion and high price, defects effective and equitable solution leaving both Managements and Unions unhappy.
If Parliament would heed, we stress this need.
Industrial Justice desiderates specialised processual expertise and agencies.
This factual panorama, omitting a welter of debatable details and wealth of exciting embellishments, being not germane to the essential issues, leads us to a formulation of the decisive questions which alone need engage our discussion.
The Management might have been right in its version or the Sabha might have been wronged as it wails, but an objective assessment of the proven facts and unbiased application of the declared law will yield the broad basis for working out a just and legal solution.
Here, it must be noticed that a new Union now exists even though its numerical following is perhaps slender.
We are not concerned whether it is the favoured child of the Management, although it has received soft treatment in several settlements which have somewhat benefited the whole work force and suggests a syndrome not unfamiliar among some industrial bosses allergic to strong unions.
169 The central problem on the answer to which either the award of the arbitrator or the judgment of the High Court can be sustained as sound is whether the discharge of the workmen en masse was all innocuous termination or a disciplinary action.
If the latter.
the High Court 's reasoning may broadly be invulnerable.
Secondly, what has been mooted before us is a question as to whether the evidence before the Arbitrator, even if accepted at its face value, establishes any misconduct of any discharged workman and further whether the misconduct, if any, made out is of such degree as to warrant punitive discharge.
Of course, the scope of Section 11A as including arbitrators, the power of arbitrators, given sufficiently wide terms of reference, to examine the correctness and propriety of the punishment, inter alia, deserve examination.
Likewise the rules regarding reinstatement, retrenchment, back wages and the like, fall for subsidiary consideration.
Prefatory to this discussion is the appreciation of the constitutional consciousness with regard to Labour Law.
The Constitution of India is not a non aligned parchment but a partisan of social justice with a direction and destination which it sets in the Preamble and article 38, and so, when we read the evidence, the rulings, the statute and the rival pleas we must be guided by the value set of the Constitution.
We not only appraise Industrial Law from this perspective in the disputes before us but also realise that ours is a mixed economy with capitalist mores, only slowly wobbling towards a socialist order, notwithstanding Sri Garg 's thoughts.
And, after all ideals apart. 'law can never be higher than the economic order and the cultural development of society brought to pass by that economic order '.
The new jurisprudence in industrial relations must prudently be tuned to the wave length of our constitutional values whose emphatic expression is found in a passage quoted by Chief Justice Rajamannar of the Madras High Court.
The learned judge observed : "The doctrine of 'laissez faire ' which held sway in the world since the time of Adam Smith has practically given place to a doctrine which emphasises the duty of the state to interfere in the affairs of individuals in the interests of the social well being of the entire community.
As Julian Huxley remarks in his essay on "Economic Man and Social Man": "Many of our old ideas must be retranslated, so to speak, into a new language.
The democratic idea of freedom, for instance, must lose its nineteenth century meaning of individual liberty in the economic sphere, and become adjusted to new conception of social duties and responsibilities.
170 When a big employer talks about his democratic rights to individual freedom, meaning thereby a claim to socially irresponsible control over a huge industrial concern and over the lives of tens of thousands of human beings whom it happens to employ, he is talking in a dying language." Homo economicus can no longer warp the social order.
Even so the Constitution is ambitiously called socialist but realists will agree that a socialist transformation of the law of labour relations is a slow though steady judicial desideratum.
Until specific legislative mandates emerge from Parliament the court may mould the old but not make the new law. 'Interstitially, from the molar to the molecular ' is the limited legislative role of the court, as Justice Holmes said and Mr. Justice Mathew quoted (see [1976] 2 S.C.C. at p. 343).
The Core Question Right at the forefront falls the issue whether the orders of discharge are, as contended by Sri Tarkunde, de facto dismissals, punitive in impact and, therefore, liable to be voided if the procedural imperatives for such disciplinary action are not complied with, even though draped in silken phrases like 'termination simpliciter '.
It is common case that none of the processes implicit in natural justice and mandated by the relevant standing orders have been complied with, were we to construe the orders impugned as punishment by way of discharge or dismissal.
But Sri Ashok Sen impressively insists that the orders here are simple terminations with no punitive component, as, on their face, the orders read.
To interpret otherwise is to deny to the employer the right, not to dismiss but to discharge, when the law gives him option.
An analysis of the standing orders in the background of disciplinary jurisprudence is necessitous at this point of the case.
The Model Standing orders prescribed under Section 15 of the , apply to this factory.
Order 23, clauses (1) and (4), relate to termination of employment of permanent workmen.
Termination of their services on giving the prescribed notice or wages in lieu of such notice is provided for.
But clause (4A) requires reasons for such termination of service of permanent workmen to be recorded and, if asked for, communicated.
This is obviously intended to discover the real reason for the discharge so that remedies available may not be defeated by clever phraseology of orders of termination.
Clause (7) permits the services or non permanent workmen to be terminated without notice 171 except when such temporary workmen are discharged by way of punishment.
Punitive discharge is prohibited unless opportunity to show cause against charges of misconduct is afforded (Standing order 15).
Orders of termination of service have to be by the Manager and in writing and copies of orders shall be furnished to the workmen concerned.
Standing order 24 itemizes the acts and omissions which amount to misconduct "According to clause (b) of the said Standing order, going on an illegal strike or abetting, inciting instigating or acting in furtherance thereof amounts to misconduct.
Standing order 25 provides for penalty impossible on a workman guilty of misconduct.
Accordingly amongst other punishments, a workman could be visited with the penalty of discharge under order 23 of dismissal without notice for a misconduct [see sub clauses (f) and (g) of clause ( 1 ) j. Clause (3) provides that no order of dismissal under sub clause (g) of clause (1) shall be made except after holding an enquiry against the workman concerned in respect of the alleged misconduct in the manner set forth in clause (4).
Clause (4) provides for giving to the concerned workman a charge sheet and an opportunity to answer the charge and the right to be defended by a workman working in the same department as himself and production of witnesses and cross examination of witnesses on whom the charge rests.
Under clause (6), in awarding punishment the Manager has to take into account the gravity of the misconduct, the previous record, if any, of the workman, and any other extenuating or aggravating circumstances.
" The finding of the Arbitrator that the workmen went on a strike which was illegal and in which they had participated is not disputed.
In this background, the application of the procedural imperatives before termination of services of the workmen, in the circumstances of the present case, has to be judged.
This, in turn, depends on the key finding as to whether the discharge orders issued by the management were punitive or non penal.
The anatomy of a dismissal order is not a mystery, once we agree that substance, not semblance, governs the decision.
Legal criteria are not so slippery that verbal manipulations may outwit the court.
Broadly stated, the face is the index to the mind and an order fair on its face may be taken at its face value.
But there is more to it than that, because sometimes words are designed to conceal deeds 172 by linguistic engineering.
So it is beyond dispute that the form of the order or the language in which it is couched is not conclusive.
The court will lift the veil to see the true nature of the order.
Many situations arise where courts have been puzzled because the manifest language of the termination order is equivocal or misleading and dismissals have been dressed up as simple termination.
And so, judges have dyed into distinctions between the motive and the foundation of the order and a variety of other variations to discover the.
true effect of an order of termination.
Rulings are a maze on this question but, in sum, the conclusion is clear.
If two factors coexist, an inference of punishment is reasonable though not inevitable.
What arc they ? If the severance of service is effected, the first condition is fulfilled and if the foundation or causa causans of such severance is the servant 's misconduct the second is fulfilled.
If the basis or foundation for the order of termination is clearly not turpitudinous or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa.
These canons run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements The law cannot be stultified by verbal haberdashery because the court will lift the mask and discover the true face.
It is true that decisions of this Court and of the, High Courts since Dhingra 's case ; have been at times obscure.
if cited de hors the full facts.
In Samsher Singh 's case the unsatisfactory state of the law was commented upon by one of us, per Krishna Iyer, J., quoting Dr. Tripathi for support: "In some cases, the rule of guidance has been stated to be 'the substance of the matter ' and the 'foundation ' of the order.
When does 'motive ' trespass into 'foundation ' ? When do we lift the veil of form to touch the 'substance ' ? When the Court says so.
These 'Freudian ' frontiers obviously fail in the work a day world and Dr. Tripathi 's observations in this context are not without force.
He says: 'As already explained, in a situation where the order of termination purports to be a mere order of discharge without.
173 stating the stigmatizing results of the departmental enquiry a Search for the 'substance of the matter ' will be indistinguishable from a search for the motive (real, unrevealed object) of the order.
Failure to appreciate this relationship between motive (the real, but unrevealed object) and from (the apparent, or officially revealed object) in the present con text has lead to an unreal inter play of words and phrases wherein symbols like 'motive ', 'substance ' 'form ' or 'direct ' parade in different combinations without communicating precise situations or entities in the world of facts. ' The need, in this branch of jurisprudence, is not so much to reach perfect justice but to lay down a plain test which the administrator and civil servant can understand without subtlety and apply without difficulty.
After all, between 'unsuitability ' and 'misconduct ' thin partitions do their bounds divide '.
And over the years, in the rulings of this Court the accent has shifted, the canons have varied and predictability has proved difficult because the play of legal light and shade has been baffling.
The learned Chief Justice has in his judgement, tackled this problem and explained the rule which must govern the determination of the question as to when termination of service of a probationer can be said to amount to discharge simpliciter and when it can be said to amount to punishment so as to attract the inhibition of Art 311.
" Masters and servants cannot be permitted to play hide and seek with.
the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed.
The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is.
If, thus scrutinized, the order has a punitive flavour in cause or consequence, it is dismissal.
If it falls short of this test, it cannot be called a G punishment.
To put it slightly differently, a termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal, even if he had the right in law to terminate with an innocent order under the standing order or otherwise.
Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature.
Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to 174 terminate.
Given an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal.
even if full benefits as on simple termination, are given and non injurious terminology is used.
On the contrary, even if there is suspicion of misconduct the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with.
He may not like to investigate nor take the risk of continuing a dubious servant.
Then it is not dismissal but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found.
For, in fact, misconduct is not then the moving factor in the discharge.
We need not chase other hypothetical situations here.
What is decisive is the plain reason for the discharge.
not the strategy of a non enquiry or clever avoidance of stigmatizing epithets.
If the basis is not misconduct, the order is saved.
In Murugan Mills, this Court observed: "The right of the employer to terminate the services of his workman under a standing order, like cl.
17(a) in the present case, which accounts to a claim "to hire and fire ' an employee as the employer pleases and thus completely negatives security of service which has been secured to industrial employees through industrial adjudication.
came up for consideration before the Labour Appellate Tribunal in Buckingham and Carnatic Co. Ltd. vs Workers of the Company.
The matter then came up before this before this Court also in Chartered Bank vs Chartered Bank Employees Union(3) and the Management of U.B. Dutt & Co. vs Workmen of U. B. Dutt & Co.(4) Wherein the view taken by Labour Appellate Tribunal was approved and it was held that even in a case like the present the requirements of bona fides was essential and if the termination of service was a colourable exercise of the power or as a result of victimization or unfair labour practice the industrial tribunal would have the jurisdiction to intervene and set aside such termination.
The form of the order in such a case is not conclusive and the Tribunal can go behind the order to find the reasons which led to the 175 order and then consider for itself whether the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice.
If it came to the conclusion that the termination was a colourable exercise of the power or was a result of victimisation or unfair labour practice.
it would have the jurisdiction to intervene and set aside such termination.
" Again, in Chartered Bank vs Employees Union his Court emphasised: " .
The form of the order of termination is not conclusive of the true nature of the order, for it is possible that the form may be merely a camouflage for an order of misconduct.
It is, therefore, always open to the Tribunal to go behind the form and look at the substance and if it comes to the conclusion, for example, that though in form the order amounts to termination simpliciter, it in reality cloaks a dismissal for misconduct, it will be open to it to set it aside as a colourable exercise of the Power.
" A rain of rulings merely adds to the volume, not to the weight of the proposition, and so we desist from citing all of them.
A bench of seven judges of this Court considered this precise point in Shamsher Singh 's case and Chief Justice Ray ruled: "The form of the order is not decisive as to whether the order is by way of punishment.
Even an innocuously worded order terminating the service may in the facts and circumstances of the case establish that an enquiry into allegations of serious and grave character of misconduct involving stigma has been made in infraction of the provision of Article 311.
In such a case the simplicity of the form of the order will not give any sanctity.
That is exactly what has happened in the case of Ishwar Chand Agarwal.
The order of termination IS illegal and must he set aside." Simple termination or Punitive Discharge ? We must scan the present order of discharge of 853 workmen and ask the right questions to decide whether they are punishments or innocent terminations.
Neither judicial naivete nor managerial ingenuity will put the court off the track of truth.
then, are the diagnostic factors in the orders under study ? An isolated reading of the formal notices terminating their services reveals no stigma, no penalty, no misconduct.
They have just been told 176 off.
But the Management admits that as required by the Standing orders it has recorded reasons for the discharge.
There, several pages of damnatory conduct have been heaped on the workers collectively accounting for the resort of the Management to the extreme step of discharging the whole lot, there being no alternative.
Sri A. K. Sen took us through the various appeals made by the Management, the losses sustained.
the many offers to negotiate and arbitrate, the Sabha 's deaf obduracy and resort to sudden strike and violent tactics and, worst of all, its attempts to persuade the Central Government to take over the factory as a `sick ' mill.
These ordeals were, described by Sri Ashok Sen graphically to justify the submission that the Management had no choice, caught between Scylla of strike and Charybdis of take over, but to get rid of the strikers and recruit new workers.
If the employer did not discharge the strikers they were adamant and would not return to world, and the very closure compelled by the Sabha was being abused by it to tell the Central Government that for three months there had been no production and so the mill qualified to be taken over as `sick ' under the Industries (Development and Regulation) Act.
If the Management discharged the workers to facilitate fresh recruitment and save the factory from statutory takeover the cry was raised that the action was dismissal because an elaborate enquiry was not held.
The Management had avoided injury to the workmen, argued Sri Sen, by merely terminating their services without resort to disciplinary action and recording the uncomplimentary grounds in a separate invisible order.
He also underscored the fact that the strike was illegal and unjustified as concurrently held by the Arbitrator and the High Court.
We agree that industrial law promotes industrial life, not industrial death, Any realism is the soul of legal dynamics.
Any doctrine that destroys industrial progress interlaced with social justice is lethal juristic and cannot be accepted.
Each side has its own version of the role of the other which we must consider before holding either guilty.
Sri Tarkunde told us the tale of woe of the workmen.
In 3 country where the despair of Government is appalling unemployment it is a terrible tragedy to put to economic death 853 workmen.
And for what? For insisting that the pittance of Rs. 100 per month be raised in terms of the Central Wage Board recommendations, as long ago agreed to by the Management but put off by the tantalizing but treacherous offer of arbitration.
When the point admitted of easy negotiated solution.
Arbitration looks nice, but.
since 1969, the hungry families have been yearning for a morsel more, he urged.
Blood, toil, sweat and tears for the workers and all the profits ' and production for the Management, was the industrial irony! Knowing that every arbitral or other adjudicatory agency in 177 India, especially when weak Labour is pitted against strong Capital in the sophisticated processual system, consumes considerable time, the lowly working class is allergic to this dilatory offer of arbitration.
They just don 't survive to eat the fruits.
Such was his case.
The story of violence was also refuted by Sri Tarkunde, since the boot was on the other leg.
Goondas were hired by the Management to sabotage the fundamental right to strike and with broken hearts several of them surrendered.
When, at last, the Sabha agreed to see that all workmen reported for work within the extended time, the Management took to the typical tactics of victimisation of refusing work for all, as first offered, and of picking and choosing even for the 250 vacancies.
Moreover, other conditions were put upon the Sabha calculated to break unionism which those familiar with trade union movements would painfully appreciate.
This insult and injury apart, the orders of termination were painly dismissals for a series of alleged misconducts which were chronicled in separate proceedings.
The formal order was like a decree, the grounds recorded contemporaneously were like the judgment, to use court vocabulary.
It was obvious that the foundation for the termination was the catena of charges set out by the Management.
The true character of the order could not be hidden by the unfair device of keeping a separate record and omitting it from the normal communication.
Law is not such an ass as yet and if the intent and effect is damnatory the action is disciplinary.
Between these two competing cases, presented by counsel, we have to gravitate towards the correct factual legal conclusion.
A number of peripheral controversies have been omitted from this statement, for brevity 's sake.
When two high tribunals have spread out the pros and cons it is supererogation for this Court to essay likewise, and miniaturization is a wise husbandry of judicial resources.
First, we must decide whether the order of termination was a punitive discharge or a simple discharge.
Here we reach the dilemma of the law for discovering unfailing guidelines to distinguish between discharge simpliciter and dismissal sinister.
The search for infallible formulae is vain and only pragmatic humanism can help navigate towards just solutions.
We have earlier explained that from Dhingra 's case to Shamsher Singh 's case, the law has been dithering but some rough and ready rules can be decocted to serve in most situations.
Law, in this area, is a pragmatist, not a philologist, and we have set out the dual diagnostic tests applicable in such cases.
178 It was not retrenchment, according to the Management.
Then what was it ? If there was work to be done, why terminate services of workmen except as punishment ? Because, argued Sri Sen, the workers did not work, being on strike and the Management, bent on keeping the factory going, needed workmen who work.
To recruit fresh hands into the lists and to keep the old hands on the roster was double burden, and, therefore, the strikers had to be eased out to yield place to new recruits.
The object was not to punish the workmen but to keep the factory working Accepting this plea, as it were, the award of the arbitrator has exonerated the Management of the charge of dismissal while the High Court has held the action to be dismissal for misconduct and therefore bad in law.
In our opinion, the facts of the case before us speak for themselves Here are workmen on strike.
The strike is illegal.
The Management is hurt because production is paralyzed.
The strikers allegedly indulge ill objectionable.
activities.
The exasperated Management hits back by ordering their discharge for reasons set out in several pages in the appropriate contemporaneous proceeding.
Misconduct after misconduct is flung on the workers to justify the drastic action In all conscience and common sense, the discharge is the punishment for the misconduct.
The Management minces no words.
What is explicity stated is not a colourless farewell to make way for fresh hands to work the factory until the strike is settled but a hard hitting order with grounds of guilt and penalty of removal.
The inference is inevitable, however, ingenious the contrary argument, that precisely because the Management found the workmen refractory in their misconduct they were sacked.
Maybe, the management had no other way of working the factory but that did not change the character of the action taken.
Once we hold the discharge punitive the necessary consequence is that enquiry before punishment was admittedly obligatory and confessedly not undertaken.
The orders were bad on this score alone.
Sri A. K. Sen urged that in a dismissal the employee is denied some of the retiral and other benefits which he gets in a simple discharge, and here all the employees were offered their full monetary benefits, so that it was wrong to classify the orders of discharge as punitive.
Maybe, a dismissed servant may well be disentitled to some, at least, of the financial benefits which his counterpart who is simply discharged may draw.
But that is not a conclusive test.
Otherwise, the master may 'cashier ' his servant and camouflage it by offering full retiral benefits.
Dismissal is not discharge plus a price.
The substance of 179 the action is the litmus test.
In the present case, the penal core, 'tied ,4.
in tooth and claw, shows up once we probe; and the non committal frame of the formal order is a disguise.
For a poor workman loss of his job is a heavy penalty when inflicted for alleged misconduct, for he is so hungry that, in Gandhiji 's expressive words, he sees God Himself in a loaf of bread.
Before we leave this part of the case, a reference to some industrial law aspects and cases may be apposite though a little repetitive Standing orders certified for an industrial undertaking or the model Standing orders framed under the Industrial Employment Standing orders Act provide for discharge simpliciter, a term understood in contradistinction to punitive discharge or discharge by way of penalty.
It is not unknown that an employer resorts to camouflage by garbing or cloaking, a punitive discharge in the innocuous words of discharge simpliciter.
Courts have to interpose in order to ascertain whether the discharge is one simpliciter or a punitive discharge, and in doing so the veil of language is lifted and the realities perceived.
In the initial stages the controversy raised was whether the court/tribunal had any jurisdiction to lift such a veil.
Prove and penetrate so as to reveal the reality, but this controversy has been set at rest by the decision in Western India Automobile Association vs Industrial Tribunal Bombay.
The wide scope of the jurisdiction of industrial tribunal, ' court in this behalf is now well established.
If standing orders or the terms of contract permit the employer to terminate the services of his employee by discharge simpliciter without assigning reasons, it would be open to him to take recourse to the said term or condition and terminate the services of his employee but when the validity of such termination is challenged in industrial adjudication it would be competent to the industrial Tribunal to ensure whether the impugned discharge has been effected in the bona fide exercise of the power conferred by the terms of employment.
If the discharge has been ordered by the employer in bona fide exercise of his power, then the industrial tribunal may not interfere with it; but the words used in the order of discharge and the form which it may have taken are not conclusive in the matter an(l the industrial tribunal would be entitled to go behind the words and form and decide whether the discharge is a discharge simpliciter or not If it appears that the purported exercise of power to terminate the Services of the employee was in fact the result of the misconduct alleged against him.
then the tribunal would be justified in dealing with the dispute on the basis; that, despite its appearance to the contrary.
the order of discharge is in effect an order of dismissal.
In the exercise of this power, the 180 court/tribunal would be entitled to interfere with the order in question [see Assam Co. vs Its Workmen].
In the matter of an order of discharge of an employee as understood within the meaning of the the iron of the order and the language in which it is couched are not decisive.
If the industrial court is satisfied that the order of discharge is punitive or that it amount; to victimisation or unfair labour practice it is competent to the Court/tribunal to set aside the order in a proper case and direct reinstatement of the employee [see Tata oil Mills Co. Ltd. vs Workmen].
The form used for terminating the service is not conclusive and the tribunal has jurisdiction to enquire into the reasons which led to such termination In the facts of the case it was found that Standing orders provided that an employee could ask for reasons for discharge in the case of discharge simpliciter.
Those reasons were given before the tribunal by the appellant, viz., that the respondents services were terminated because he deliberately resorted to go slow and was negligent in the discharge of his duty.
It was accordingly held that the services of the employee were terminated for dereliction of duty and go slow in his work which clearly amounted to punishment for misconduct and.
therefore.
to pass an order under cl.
17(a) of the Standing orders permitting discharge simpliciter in such circumstances was clearly a colorable exercise of power to terminate services of a workman under the provision of the Standing orders.
In these circumstances the tribunal would be justified in going behind the order and deciding for itself whether the termination of the respondent 's services could be sustained (vide Management of Murugan Mills Ltd. vs Industrial Tribunal, Madras & Anr.
This view was affirmed in Tata Engineering & Locomotive Co. Ltd. vs section C. Prasad & Anr.(4).
After approving the ratio in Murugan Mills case, this Court in L. Michael & Anr.
vs M/s. Johnson Pumps India Ltd observed that the manner of dressing up an order did not matter.
The slightly different observation in Workmen of Sudder office, Cinnamare vs Management was explained by the Court and it was further affirmed that since the decision of this Court in the Chartered Bank vs The Chartered Bank Employee 's Union it has taken the consistent view that if the termination of service is a colourable exercise of power vested in the management or is a result of victimization 181 or unfair labour practice, the court/tribunal would have jurisdiction to intervene and set aside such termination.
It was urged that a different view was taken by this Court in Municipal Corporation of Greater Bombay vs P. section Malvenkar & ors.
The employee in that was discharged from service by paying one month 's wages in lieu of notice This action was challenged by the employee before the Labour Court and it was contended that it was a punitive discharged.
The Corporation contended that wider Standing order No. 26 the Corporation had the power to discharge but there was an obligation to give reasons if so demanded by the employee.
The Corporation had also the power to discharge by way of punishment.
The Court in this connection observed as under: "Now one thing must be borne in mind that these are two distinct and independent powers and as far as possible either should be construed so as to emasculate the other cr to render it ineffective.
One is the power to punish an employee for misconduct while the other is the power to terminate simpliciter the service of an employee without any, other adverse consequence.
proviso (i) to clause (1) of Standing order 26 requires that the reason for termination of the employment should be given in writing to the employee when exercising the power of termination of service of the employee under Standing order 26.
Therefore, when the service of an employee is terminated simpliciter under Standing order 26, the reason for such termination has to be given to the employee and this provision has been made in the Standing order with a view to ensuring that the management does not act in an arbitrary manner.
The management is required to articulate the reason which operated on its mind in terminating the service cf the employee.
But merely because the reason for terminating the service of the employee is required to be given and the reason must obviously not be arbitrary, capricious or irrelevant it would not necessarily in every case make the order or termination punitive in character so as require compliance with the requirement of clause (2) of Standing order 21 read with Standing order 23.
Otherwise.
the power of termination of service of an employee under Standing order 26 would be rendered meaningless and futile for in no case it would be possible to exercise it.
Of course, if misconduct of the employee constitutes the 182 foundation for terminating his service, then even if the order of termination is purported to be made under Standing order 26, it may be liable to be regarded as punitive in character attracting the procedure of clause (2) of Standing order 21 read with Standing order 23, though even in such a case it may be argued that the management n has not punished the employee but has merely terminated his service under Standing order 26.
" It does not purport to run counter to the established ratio that the form of the order is not decisive and the Court can lift the veil.
How ever, it may be noted that there was an alternative contention before the Court that even if the order of discharge was considered punitive in character, the employer corporation had led evidence before the labour court to substantiate the charge of misconduct and that finding was also affirmed.
We are satisfied that the Management, whatever its motives vis a vis keeping the stream of production flowing, did remove from service, on punitive grounds, all the 853 workmen.
The law is trite that the Management may still ask for an opportunity to make out a case for dismissal before the Tribunal.
The refinements of industrial law in this branch need not detain u.s because the arbitrator did investigate and hold that the workmen were guilty of misconduct and the 'sentence ' of dismissal was merited, even as the High Court did reappraise and reach, on both counts, the reverse conclusion.
The sweep of Article 226 Once we assume that the jurisdiction of the arbitrator to enquire into the alleged misconduct was exercised, was there any ground under Article 226 of the Constitution to demolish that holding ? Every wrong order cannot be righted merely because it is wrong.
It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like.
While the remedy under Article 226 is extraordinary and is of Anglo Saxon vintage, it is not a carbon copy of English processes.
Article 226 is a sparing surgery but the lancet operates where injustice suppurates.
While traditional restraints like availability of alternative remedy hold back the court, and judicial power should not ordinarily rush in where the other two branches fear to tread, judicial daring is not daunted where glaring injustice demands even affirmative action.
183 The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the subject belongs to the court 's province and the remedy is appropriate to the judicial process.
There is native hue about Article 226, without being anglophile or anglophobic in attitude.
Viewed from this jurisprudential perspective, we have to be cautious both in not overstepping as if Article.
226 were as large as an appeal and not failing to intervene where a grave error has crept in.
Moreover, we sit here in appeal over the High Court s Judgement.
And an appellate power interferes not when the order appealed is not right but only when it is clearly wrong.
The difference is real, though fine.
What are the primary facts which have entered the Tribunal 's verdict in holding the strikers guilty of misconduct meriting dismissal ? We must pause to remove a confusion and emphasise that the dismissal, order is not against the Union but the individual workers.
What did each one do ? Did his conduct, when sifted and scrutinised, have any exculpation or extenuation ? Not strikers in the mass, but each worker separately, must be regarded as the unit of disciplinary action.
Each one 's role and the degree of turpitude, his defence on guilt and punishment, must be adjudged before economic death sentence is inflicted.
A typical trial process instance will illumine the point.
Suppose there is case of arson and murder in a village because of communal faction and a hundred men from the aggressive community are charged in court with serious offences.
Suppose further that convincing testimony of the provocation and aggression by that community is produced.
Can any single member of the violent community be convicted on 'mass ' evidence, without specific charges of participation or clear proof of constructive involvement ? Judicial perspicacity clears this common fallacy.
It is dangerous to mass convict on the theory of community built.
Anger sometimes brings in this error.
In our assessment, the arbitrator has been swayed by generalities where particularities alone would have sufficed.
A long story may be made short by skipping the details and focussing on essentials.
We must, in fairness, state that the Arbitrator, an experienced and accepted tribunal in labour disputes, has exhaustively brought into the Award all available details pro and con with over emphasis here and there.
There are only a few confusions in his long award but, regrettably, they happen to be on a few fundamentals.
The foremost, of course, is a mix up between mob misconduct and individual guilt.
The next is getting lost in the oceanic evidence while navigating towards a 1 specified port.
The High Court too has excelled in marshalling the details and handling the legal issues, although, even there, shortcomings 184 on basic issues have been pointed out by Sri A. K. Sen. We too are apt to err and reverse ourselves although we try our best to avoid error.
The Supreme Court is final not because it is infallible; it is infallible; because it is final.
propose to examine the essential issues from the perspective We have set out and in their proper jurisprudential bearings.
If misconduct was basic to the discharge and no enquiry precedent to the dismissal was made the story did not end there in favour of the workmen.
The law is well settled that the Management may still satisfy the tribunal about the misconduct.
As a fact the arbitrator held misconduct proved.
He further found that the circumstances justified dismissal though he decided the order to mean discharge simpliciter Was misconduct proved against each discharged worker at least before the arbitrator ? If it was, did every worker deserve punitive discharge ? Dual jurisdictional issues arise here which have been argued at some length before us.
The position taken up by Sri Sen was that the High Court could not, under Article 226, direct reinstatement, and even it felt that the arbitrator had gone wrong in refusing reinstatement, the court could only demolish the order and direct the arbitrator to reconsider the issue.
What belonged, as a discretionary power, to a tribunal or other adjudicatory body could not be wrested by the writ court.
To put it pithily, regarding the relief of reinstatement, the arbitrator could but would not and the High Court would but could not.
(We will deal later with the point that the arbitrator had himself no power under Section 11 A of the Act but did have it in view of the wide terms of reference.) The basis of this submission as we conceive it.
is the traditional limitations woven around high prerogative writs.
Without examining the correctness of this limitation, we disregard it because while Article 226 has been inspired by the royal writs its sweep and scope exceed hide bound British processes of yore.
We are what we are because our Constitution framers have felt the need for a pervasive reserve power in the higher judiciary to right wrongs under our conditions.
Heritage cannot hamstring; nor custom constrict where the language used is wisely wide.
The British paradigms are not necessarily models in the Indian Republic.
So broad are the expressive expressions designedly used in Article 226 that any order which should have been made by the lower authority could be made by the High Court.
The very width of the power and the disinclination to meddle, except where gross injustice or fatal illegality and the like are present inhibit the exercise but do not abolish the power.
185 We may dilate a little more on Article 226 vis a vis awards of arbitrators.
The first limb of the argument is that when there is a voluntary joint submission of an industrial dispute to an Arbitrator named by them under section 10A of the , he does not function as a Tribunal and is not amenable to the jurisdiction of that Court under Article 227 or under Article 226.
Without further elaboration this contention can be negatived on a decision of this Court in Rohtas Industries Ltd. & Anr.
vs Rohtas Industries State Union ors.
(1) This Court observed that as the Arbitrator under section 10A has the power to bind even those who are not parties to the reference or agreement and the whole exercise under section 10A as well as the source of the force of the Award on publication derived from the statute, it is legitimate to regard such an arbitrator now as part of the infrastructure of the sovereigns dispensation of justice, thus falling within the rainbow of statutory tribunals amenable to judicial review.
The second limb of the argument was that a writ of certiorari could not be issued to correct errors of facts.
In this connection after affirming the ratio in Engineering Mazdoor Sabha vs Hind Cycle Ltd., this Court observes that what is important is a question of law arising on the face of the facts found and its resolution ex facie or sub silentio.
The Arbitrator may not state the law as such; even then such acute silence confers no greater or subtler immunity on the award than plain speech.
We do not dilate on this part of the argument as we are satisfied that be the test the deeply embedded rules to issue certiorari or the traditional grounds to set aside an arbitration award 'thin partition do their bounds divide ' on the facts and circumstances of the present case.
Broadly stated, the principle of law is that the jurisdiction of the High Court under Article 226 of the Constitution is limited to holding the judicial or quasi judicial tribunals or administrative bodies exercising the quasi judicial powers within the leading strings of legality and to see that they do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under which they act.
So long as the hierarchy of officers and appellate authorities created by the statute function within their ambit the manner in which they do so can he no ground for interference.
The power of judicial supervision of the High Court under Article 227 of the Constitution (as it then stood) is not greater than those under Article 226 and it must be limited to seeing that a tribunal functions within the limits of its authority [see Nagendra Nath Bora & Anr.
vs The Commissioner of Hills Division & Appeals, Assam & ors.(a) ].
This led to a proposition that in 186 exercising jurisdiction under Article 226 the High Court is not constituted a Court of appeal over the decision of authorities, administrative or quasi judicial.
Adequacy or sufficiency of evidence is not its meat.
It is not the function of a High Court in a petition for a writ under Art 226 to review the evidence and to arrive at an independent finding on the evidence.
[See State of Andhra Pradesh vs section Shree Rama Rao ] A constitution Bench of this Court in P. H. Kalyani vs M/s .
Air France, Calcutta ) succinctly set out the limits of the jurisdiction of the High Court in dealing with a writ petition.
It was said that in order to justify a writ of certiorari it must be shown that an order suffers from an error apparent on the face of the record.
It was further pointed out that in the finding of fact is made by the impugned order and it is shown that it success from an error of law and not of fact, a writ under Article 226 would issue, and, while so saying, the decision in Nagendra Nath Bora 's case was affirmed.
Following the aforementioned decision, the Gujarat High Court in Navinchandra Shakerchand Shah vs Manager, Ahmedabad Coop.
Department Stores Ltd. observed that the amended Article 226 would enable the High Court to interfere with an Award of the industrial adjudicator if that is based on a complete misconception of law or it is based on no evidence or that no reasonable man would come to the conclusion to which the Arbitrator has arrived.
Even apart from, but while approving, the Gujarat ruling in 19 G.L.R. p. 108 cited before us, we are satisfied that the writ power is larger given illegality and injustice, even if its use is severely discretionary as decided cases have repeatedly laid down.
We over rule the objection of invalidity of the High Courts order for want of power.
The more serious question is whether the arbitrator had the plenitude of power to re examine the punishment imposed by the Management, even if he disagreed with its severity.
In this ease the arbitrator expressed himself as concurring with the punishment.
But if he had disagreed, as the High Court, in his place, did, could he have interfered? Armed with the language of Sec.
11A, which confers wide original power to the tribunal to re fix the 'sentence ', Sri Sen argued that an arbitrator was uncovered by this new Section.
So, even if he would, he could not.
And, in this case if he could, he would not.
There the matter ended, was the argument.
We disagree.
Even if he could.
he would not, true; but that did not preclude the High Court from reviewing the order in exercise of its extraordinary constitutional power.
Moreover, Sec.
11A did clothe the arbitrator with similar 187 power as tribunals, despite the doubt created by the abstruse absence A of specific mention of 'arbitrator ' in Sec.
11A. This position needs closer examination and turns on interpretational limitations.
At this stage, to facilitate the discussion, we may read the provision: "11A. Where an industrial dispute relating to the discharge or dismissal of a workmen has been referred to a 1 Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, as it thinks fit, or give such other relief to the Workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman, including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: Provided that in any proceeding under this section the Labour Court Tribunal or National Tribunal as the case may be, shall rely on the materials on record and shall not take any fresh evidence in relation to the matter".
11A was introduced in purported implementation cf the I.L.O. recommendation which expressly referred, inter alia to arbitrators.
The Statement of objects and Reasons which illumines the words of the legislative text when it is half lit, even if it cannot directly supplement the section, does speak of the I.L.o. recommendations and, in terms of tribunals and arbitrators.
When it came to drafting Section 11A the.
word 'arbitrator ' was missing.
Was this of deliberate legislative design to deprive arbitrators, who discharge identical functions as tribunals under the , of some vital powers which vested in their tribunal brethren ? For what mystic purpose could such distinction be ? Functionally, tribunals and arbitrators being to the same brood.
The entire scheme, from its I.L.O. genesis, through the objects and Reasons, fits in only with arbitrators being covered by Section 11A, unless Parliament cheated itself and the nation by proclaiming a great purpose essential to industrial justice and, for no rhyme or reason and wittingly or unwittingly, withdrawing one vital word.
Every reason for clothing tribunals with Sec.
11A powers applies a fortiori to arbitrators.
Then why omit ? Could it be a synopic omission which did not affect the semantics because a tribunal, in its wider connotation, embraced every adjudicatory organ, including an arbitrator ? An economy of words is a legislative risk before a judiciary accustomed to the Anglo Saxon meticulousness in 188 drafting.
We may easily see meaning by one construction.
A 'tribunal ' is merely a seat of justice or a judicial body with jurisdiction to render justice.
If an arbitrator fulfils this functional role and he does how can he be excluded from these scope of the expression ? A caste distinction between courts, tribunals, arbitrators and others, is functionally fallacious and, in our context, stems from confusion.
The Section makes only a hierarchical, not functional, difference by speaking of tribunals and national tribunals.
So we see no ground to truncate the natural meaning of 'Tribunal ' on the supposed intent of Parliament to omit irrationally the category of adjudicatory organs known as arbitrators.
To cut down is to cripple and the art of interpretation makes whole, not mutilates, furthers the expressed purpose, not hampers, by narrow literality.
Section 2(r) defines Tribunal thus: 'Tribunal ' means an Industrial Tribunal constituted under Section 7A and includes an Industrial Tribunal constituted before the 10th day of March, 1957, under this Act, Prima facie it is a different category from arbitrators but all statutory definitions are subject to contextual changes.
It is perfectly open.
to the court to give the natural meaning to a word defined in the Act if the context in which it appears suggests a departure from the definition because then there is something repugnant in the subject or context.
Then what is the natural meaning of the expression "Tribunal"? A 'tribunal ' literally means a seat of justice.
May be, justice is dispensed by a quasi judicial body, an arbitrator, a commission, a court or other adjudicatory organ created by the State.
All these are tribunals and naturally the import of the word embraces an arbitration tribunal.
Stroud 's Judicial Dictionary (Vol.
4 p. 3093) speaks of 'Tribunal in this, wider sense and quoted Fry, L.J. in Dawkins vs Rokeby [L.R. 8 Q.B. 255, affirmed, "I accept that, with this qualification that I do not like the word 'tribunal '.
The word is, ambiguous, because it has not like 'court ' any ascertainable meaning in English law" (Royal Acsuarium vs Parkinson. , cited COURT) .
There is a reference to the bishop 's commission of enquiry as judicial tribunal and, significantly, specific mention has been made in these terms.
189 "Disputes between employers and employees are A referred to such tribunals as the Civil Service Arbitration Tribunal, National Arbitration Tribunal and the Industrial Disputes Tribunal".
(Stroud 's Judicial Dictionary p. 3094) We have hardly any doubt that 'tribunal ' simpliciter has a sweeping signification and does not exclude 'arbitrator '.
Here we come upon a fundamental dilemma of interpretative technology vis a vis the judicative faculty.
What are the limits of statutory construction ? Does creativity in this jurisprudential area permit travel into semantic engineering as substitute for verbalism ? It is increasingly important for developing countries, where legislative transformation of the economic order is an urgent item on the national agenda, to have the judiciary play a meaningful role in the constitutional revolution without ferreting out laws in the draftsman, once the object and effect are plain.
Judges may not be too 'anglo phonic ' lest the system fail.
It is edifying to recall from Robert Stevens ' Law and Politics of the House of Lords as a judicial body: "Moreover, Macmillan, who began to specialize in the increasingly frequent tax appeals, continued to develop this highly artificial approach in Inland Revenue Commissioner vs Ayrshire Employers Mutual Insurance Association, when Parliament had clearly intended to make the annual surpluses of mutual insurance companies subject to tax, Macmillan found a particularly formalistic argument to show that this had not been the effect of section 31 of the Finance Act of 1933.
He was then happily able to announce, "The Legislature has plainly missed.
Of this decision Lord Diplock was later to say that "if, as in this case, the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed.
Here is judicial legislation at its worst.
"(3) ' We would rather adopt Lord Diplock 's thought and have the court help hit the legislative target, within limits, than sigh relief that the legislative fire has missed the bull 's eye.
Of course, the social philosophy of the Constitution has, as ruled by this court in several cases, a role in interpretative enlightenment and judicial value vision.
190 We may reinforce this liberal rule of statutory construction, being a matter of importance in the daily work of the Court, by reference even to Roman Law from Justinian 's days down to the American Supreme Court.
"Not all special cases can be contained in the laws and resolutions of the Senate", said the Roman jurist Jullianus, "but where their meaning is manifest in some case, the one who exercises jurisdiction must apply the provision analogously and in this way administer justice." Prof. Bodenheimer has explained that Civil Law does not regard words as the sole basis of law but allows it to be modified by purpose. "Celsus added the following admonition to these general principles of interpretation: "The laws should be liberally interpreted, in order that their intent be preserved". "Samuel Thorne has shown that, during certain periods of English medieval history, the position of the Common Law towards the construction of statutes was similar to the general attitude of the Roman and Civil Law.
Statutes were frequently extended to situations not expressly covered by them.
"(3) Plowden pointed out that "when the words of a statute enact one thing, they enact all other things which are in the like degree," Plowden demonstrated that a statutory remedy at that time was deemed to be merely illustrative of other analogous cases that deserved to be governed by the same principle. "our law (like all others) consists of two parts, viz. OF body and soul, the letter of the law is the body of the law, and the sense and reason of the law is the soul of the law.
And it often happens that when you know the letter, you know not the sense, for sometimes the sense is more confined and contracted than the letter, and sometimes it is more large and extensive"(5) Prof. Bodehheimer states that the American trend is towards a purpose oriented rather than a plain meaning rule in its rigid orthodoxy.
In United States vs American Trucking Association.
The U.S. Supreme Court wrote: "When the plain meaning has led to absurd or futile results . this Court has looked beyond the words to the Purpose of the Act.
Frequently, however, even when the 191 plain meaning did not produce absurd results but merely an unreasonable one "plainly at variance with the policy of the legislation as a whole" this Court has followed that purpose rather than the literal words.
When aid to construction of the meaning of words, as used in the statute, is available, there can certainly be no "rule of law" which forbids its use, how ever, clear the words may be on "superficial examination.
" B In the present case, as the narration of the facts unfolded, the reference of the dispute was to an arbitrator.
He reinvestigated and reassessed the evidence bearing on the guilt of the discharged workmen after giving an opportunity to both sides to adduce evidence thereon Admittedly, he had this power.
But had he the follow up power, if he held the men guilty of punitive misconduct, to reweigh the quantum of punishment having regard to the degree of culpability ? This jurisdiction he enjoys if Sec.
11A includes 'arbitrators '.
This, in turn, flows from our interference as to whether the word 'tribunal ' takes in an adjudicatory organ like the arbitrator.
It is plain that the expression 'arbitrator ' is not expressly mentioned in Section 11A.
Nevertheless, if the meaning of the word 'tribunal ' is wider rather than narrower, it will embrace arbitrator as well.
That is how the dynamics of interpretation are, in one sense, decisive of the fate of the present appeal.
Competing interpretative angles have contended for judicial acceptance English preferences apart, Indian socio legal conditions must decide the choice in each situation.
Sometimes Judges are prone to castigate creative interpretation in preference to petrified literality by stating that Judges declare the law and cannot make law.
The reply to this frozen faith is best borne out by Lord Radcliffe 's blunt words: " There was never a more sterile controversy than that upon the question whether a judge makes law.
Of course he does.
How can he help it ?.
Judicial law is always a reinterpretation of principles in the light of new combinations of facts.
Judges do not reverse principles once well established, but they do modify them, extend them, restrict them and even deny their application to the combination in hand.
Lord Devlin in his "Samples of Lawmaking", agreed that Judges are fashioners of law, if not creators out of material supplied to them and went on to observe: "If the House of Lords did not treat itself as bound by its own decisions, it might do its own lopping and pruning 192 . and perhaps even a little grafting, instead of leaving all that for the legislature.
But it could not greatly alter the shape of the tree.
" Even so eminent a Judge as Lord Reid leaned to the view that the law should be developed since it was not static and, in this limited sense, Judges are law makers although this view prevented "technical minded Judges (from pressing) precedents to their logical conclusions".
On the whole, a just and humanist interpretative technique, meaning permitting, is the best.
We do not mean to conclude that Judges can take liberties with language ad libitem and it is wholesome to be cautious as Lord Reid in Shaw vs D.P.P. warned: "Where Parliament fears to tread it is not for the courts to rush in.
" We are persuaded that there is much to learn from Lord Denning 's consistent refrain about the inevitable creative element in the judicial process in the interpretative area.
We permit ourselves a quote from Lord Denning because Shri A. K. Sen did draw our attention to straightening the creases as permissible but not stitching the cloth, making a critical reference to the controversial activism of which Lord Denning was a leading light: "The truth is that the law is uncertain.
rt does not cover all the situations that may arise.
Time and again practitioners and judges are faced with new situations where the decision may go either way.
No one can tell what the law is until the courts decides it.
The judges do every day make law, though it is almost heresy to say so.
If the truth is recognized then we may hope to escape from the dead hand of the past and consciously mould new principles to meet the needs of the present." Mr. Justice Mathew in Kesavananda Bharti 's case referred with approval and so do we to the observations of Justice Holmes.
"I recognize without hesitation that Judges do and must legislate.
but they can do so only interstitially; they are confined from molar to molecular motions.
" 193 Arthur Selwyn Miller writes, "Some have called it (the Supreme A Court) the highest legislative chamber in the nation.
Although there is no question that the Court can and does make law, and does so routinely, . ".
Assuming the above approach to be too creatively novel for traditionalism, let us approach the same problem from a conventional angle authenticated by case law.
The question of construction of section 11A was argued at length, as to whether an omission of any reference to Arbitrator appointed under section 10A in section 11A would suggest that the Arbitrator under section 10A, notwithstanding the terms of reference, would not enjoy the power conferred on all conceivable industrial adjudicators under section 11A.
It was said, after referring to the objects and reasons in respect of the bill which was moved to enact section 11A in the , that while the I.L.O. had indicated that an arbitrator selected by the parties for adjudication of industrial dispute must be invested with power by appropriate legislation as found in section 11A, the Parliament, while enacting the section in its wisdom, did not include the Arbitrator even though other adjudicators of industrial disputes have been conferred such power and, therefore, it is a case of Sasus omissions.
Reliance was placed on Gladstone vs Bower where the question arose whether a reference to a tenancy from year to year in section 2(1) of the Agricultural Holdings Act, 1948 would also cover a tenancy for 18 months which could be terminated at the end of the first year.
The submission was that even though no notice was necessary at common law because the tenancy would automatically terminate at the expiry of the specified period of tenancy, the tenancy took effect as tenancy from year to year by virtue of section 2(1) of the Act so that it continued until terminated by notice to quit and, therefore the landlord was not entitled to possession without notice.
It was further contended that if a tenancy from year to year was to get the protection of the Act it is inconceivable that tenancy for a longer duration would not qualify for that protection.
Court of Appeal negatived this contention holding that this is a case simply of casus omissus and the Act is defective.
The court further held that if it were ever permissible for the Court to repair a defective Act of Parliament, the Court would be very glad to do so in this case so far as the Court could.
The Court will always allow the intention of a statute to override the defects of wording buts the Court 's ability to do so is limited by the recognised canons of interpretation.
The Court may, for example, prefer an alternative construc 194 tion which is less well fitted to the words but better fitted to the intention of the Act.
But here, for the reasons given by the learned Judge, there is not alternative construction; it is simply a case of something being overlooked.
The Court cannot legislate for a casus omissions.
To do so would be to usurp the function of the legislature [see Magor & St. Mellons Rural District Council vs Newport Corporation.
Where the Statute 's meaning is clear and explicit, words cannot be interpolated.
Even where the meaning of the statute is clear and sensible, either with or without the omitted word, interpolation is improper, since the primary source of the legislative intent is in the language of the statute [see Crawford 's "Construction of Statutes".
1940 Edn., p. 269 extracted in section Narayanaswami vs G. Panneerselvam.] Undoubtedly, the Court cannot put into the Act words which 'are not expressed, and which cannot reasonably he implied on any recognised principles of construction.
That would be a work of legislation, not of construction, and outside the province of the Court [see Kamalaranjan vs Secretary of State(3).] Similarly, where the words of the statute are clear it would not be open to the Court in order to obtain a desired result either to omit or add to the words of the statute.
This is not the function of the Court charged with a duty of construction.
This approach has, however, undergone a sea change as expressed by Denning, I. J. in Seaford Court Estates Ltd. vs Asher wherein he observed as under: "When a defect appears a Judge cannot simply fold his hands and blame the draftman.
He must set to work on the constructive task of finding the intention of Parliament. and then he must supplement the written words so as to give 'force and life ' to the intention of legislature . , A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out ? He must then do as they would have done.
A judge must not alter the material of which the Act is woven, but he can and should iron out the creases." (Approved in State of Bihar & Anr.
vs Dr. Asis Kumar Mukherjee & ors.
where in he observed as under: 195 This long excursion has become important because, once in a while, social legislation which requires sharing of social philosophy between the Parliament and the Judiciary; meets with its Waterloo in the .
higher courts because the true role of interpretation shifts from Judge to Judge.
We are clearly of the view that statutory construction which fulfills the mandate of the statute must find favour with the Judges, except where the words and the context rebel against such , flexibility.
We would prefer to be liberal rather than lexical when reading the meaning of industrial legislation which develops from day to day in the growing economy of India.
The necessary conclusion from this discussion is that the expression 'tribunal ' includes, in the statutory setting, an arbitrator also.
Contemporaneous par legislative material may legitimately be consulted when a word of wider import and of marginal obscurity needs to be interpreted.
So viewed, we are not in a 'sound proof system ' and the I.L.O. recommendation accepted by India.
and the objects and Reasons of the amending Act leave no doubt about the sense, policy and purpose.
Therefore Section 11A applies to the arbitrator in the present case and he has the power to examine whether the punishment imposed in the instant case is excessive.
So has the High Court, if the Award suffers from a fundamental flaw.
A study of the lengthy award discloses no mention of Section 11A, and presumably, the authority was unmindful of that provision while rendering the verdict.
In a limited sense, even prior to Section 11A, there was jurisdiction for a labour tribunal, including an arbitrator, to go into the punitive aspect of the Management 's order.
This Court has, in a catena of cases, held that a mala fide punishment is bad in law and when the punishment is grotesquely condign or perversely harsh or glaringly discriminatory, an easy inference of bad faith, unfair labour practice or victimisation arises.
The wider power tn examine or prescribe the correct punishment belongs to tribunal/arbitrator even under Sec. 11 in no enquiry (or a defective enquiry which is bad, and, therefore, can be equated with a 'no enquiry ' situation) has been held by the Management.
For, then, there is no extant order of guilt or punishment and the tribunal determines it fresh.
In such a virgin situation both culpability and quantification of punishment arc within the jurisdiction of the tribunal/arbitrator.
The present is such a case.
Volleys of rulings from both sides were fired during arguments, the target being the limited area of the tribunal 's power to overturn the quantum of punishment awarded by the Management.
We do not think it necessary to re gurgitate all that has been said by this Court 196 upto now, since it is sufficient to bring out the correct law in the light of the leading citations.
It is incontrovertible that where, as here, no enquiry has been held by the Management, the entire subject is at large and both guilt and punishment, in equal measure, may be determined, without inhibition of jurisdiction, by the tribunal.
Lastly, as rightly urged by counsel for the Sabha, an arbitrator has all the powers the terms of reference, to which both sides are party, confer.
Here, admittedly, the reference is very widely worded and includes the nature of the punishment.
The law and the facts do not call for further elaboration and we hold that, in any view, the arbitrator had the authority to investigate into the propriety of the discharge and the veracity of the misconduct.
Even if section 11A is not applicable, an Arbitrator under section 10A is bound to act in the spirit of the legislation under which he is to function.
A commercial arbitrator who derives his jurisdiction from the terms of reference will by necessary implication, be bound to decide according to law and, when one says 'according to law ', it only means existing law and the law laid down by the Supreme Court being the law of the land, an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A [See Union of India vs Bungo Steel Furniture Pvt.
Ltd. (1967)] 1 S.C.R. 324].
The Jurisdictional hurdles being thus cleared, we may handle the basic facts and the divergences between the Arbitrator and the High Court before moulding the final relief.
Prefatory to the discussion about the factum of misconduct and its sequel, we must remind ourselves that the strike was illegal, having been launched when another industrial dispute was pending adjudication.
23 (a) appears, at a verbal level, to convey such a meaning although the ambit of sub clause (a) may have to be investigated fully in some appropriate case in the light of its scheme and rationale.
It looks strange that the pendency of a reference on a tiny or obscure industrial dispute and they often pend too long should block strikes on totally unconnected yet substantial and righteous demands.
The constitutional implications and practical complications of such a veto of a valuable right to strike often leads not to industrial peace but to seething unrest and lawless strikes.
But in the present case, both before the arbitrator and the High Court, the parties have proceeded, on the agreed footing that the strike was illegal under Section 23(a).
We do not reopen the issue at this late stage and assume the illegality of the strike.
The Fatal Flaw in the Award: The Achilles heel of the arbitrator 's award is where he makes, as a substitute for specific and individuated findings of guilt and 197 appropriate penalty vis a vis each workmen, a wholesale survey of A the march of events, from tension to breakdown, from fair settlement to illegal and unjustified strike, from futility of negotiation to readiness for arbitration, from offer of full re employment to partial taking back on application by workmen in sack cloth and ashes, by picking and choosing after a humble declaration that the strike has been formally buried, from episodes of violence and paralysis of production to backstage manoeuvres to get the factory taken over as a 'sick mill ', and after a full glimpse of this scenario, holds that the Sabha was always in the wrong, and inevitably, the Management was surely reasonable AND, ergo, every employee must individually bear the cross of misconduct and suffer dismissal for the sins of the Sabha leadership its secretary was not an employee of the mill by some sub conscious doctrine of guilt by association! Non Sequitur.
Each link in the chain of facts has been challenged by the respondents but let us assume them to be true, to test the strength of the legal fibre of the verdict.
(We may mention by way of aside, D. that the Company seems to be a well managed one.) The cardinal distinction in our punitive jurisprudence between a commission of enquiry and a Court of Adjudication, between the cumulative causes of a calamity and the specific guilt of a particular person, is that speaking generally, we have rejected, as a nation, the theory of community guilt and collective punishment and instead that no man shall be punished except for his own guilt.
Its reflection in the disciplinary jurisdiction is that no worker shall be dismissed save on proof of his individual delinquency.
Blanket attainder of a bulk of citizens on any vicarious theory for the gross sins of some only, is easy to apply but obnoxious in principle.
Here, the arbitrator has found the Sabha Leadership perverse, held that the strikers should have reasonably reported for work and concluded that the Management had, for survival, to make do with new recruits.
Therefore what ? What, at long last, is the answer to the only pertinent question in 6.
a disciplinary proceeding viz. what is the specific misconduct against the particular workmen who is to lose his job and what is his punitive desert? Here you can 't generalise any more than a sessions judge can, by holding a faction responsible for a massacre, sentence every denizen of that factions village to death penalty.
The legal error is fundamental, although lay instinct may not be outraged.
What did worker A do ? Did he join the strike or remain at home for fear of vengeance against blacklegs in a para violent situation ? Life 198 and limb are dearer than loyalty, to the common run of men, and discretion is the 'better part of valour.
Surely, the Sabha complained of Management 's goondas and the latter sought police aid against the unruly core of strikers.
In between, the ordinary rustic workmen might not have desired to be branded blacklegs or become martyrs and would not have reported for work.
If not being heroic in daring to break through the strike cordon illegal though the strike be were misconduct, the conclusion would have been different.
Not reporting for work does not lead to an irrebuttable presumption of active participation in the strike.
More is needed to bring home the mens rea and that burden is on the prosecutor, to wit the Management.
Huddling together the eventful history of deteriorating industrial relations and perverse leadership of the Sabha is no charge against a single worker whose job is at stake on dismissal.
What did he do ? Even when lawyers did go on strike in the higher Courts or organize a boycott, legally or illegally, even top law officers of the Central Govt.
did not attend court, argued Shri Tarkunde, and if they did not boycott but merely did not attend, could workers beneath the bread line be made of sterner stuff.
There is force in this pragmatic approach.
The strike being illegal is a non issue at this level.
The focus is on active participation.
Mere absence, without more, may not compel the conclusion of involvement.
Likewise, the further blot on the strike, of being unjustified, even if true, cuts no ice.
Unjustified, let us assume; so what? The real question is, did the individual worker, who was to pay the penalty, actively involve himself in this unjustified misadventure ? or did he merely remain a quiescent non worker during that explosive period ? Even if he was a passive striker, that did not visit him with the vice of activism in running an unjustified strike.
In the absence of proof of being militant participant the punishment may differ.
To dismiss a worker, in an economy cursed by massive unemployment, is a draconian measure as a last resort.
Rulings of this Court have held that the degree of culpability and the quantum of punishment turn on the level of participation in the unjustified strike.
Regrettably, no individualised enquiry has been made by the Arbitrator into this significant component of delinquency.
Did any dismissed worker instigate, sabotage or indulge in vandalism or violence ? The Management 's necessity to move the mill into production for fear of being branded a 'sick unit ' is understandable.
Of course, collective strike is economic pressure by cessation of work and not exchange of pleasantries.
It means embarrassing business.
Such a quandary cannot alter the law.
Here the legal confusion is obvious.
199 No inquest into the Management 's recruitment of fresh hands is being made at this stage.
The inquiry is into the personal turpitudes of particular workmen in propelling an illegal and unjustified strike and the proof of their separate part therein meriting dismissal.
The despair of the Management cannot, by specious transformation of logic, be converted into the despair of each of the 853 workmen.
Sympathies shall not push one into fallacies.
We may now concretize this generalised criticism of the otherwise well covered award.
The crowd of documents and camping attitudes must have added to the strain on the Arbitrator.
"A voluminous record of documents and correspondence has been produced before me by both sides.
There have been allegations and counter allegations made by both sides not only against each other but even against the Police, the Department of Labour and persons in Authority.
The history has been sought to be traced right from the inception of the Company in 1966 or 1967, by the Company to show that their conduct has been always proper and above reproach and by Sabha to establish that not only the Gujarat Steel Tubes Ltd. were not fair to the employees but that every action of theirs good or bad was ill motivated, was executed with some sinister ulterior motives.
" The Award set out the history of the Company, its vicissitudes, the hills and valleys, the lights and shadows, of industrial relations with mob fury and lock outs and allied episodes often ending in settlements and pious pledges.
Then the Arbitrator stressed Clause 6 of the Agreement of December, 1971 which bespoke a no strike zone for five years.
There was reference to the Management 's promise to implement the Wage Board recommendations.
The Arbitrator was upset that despite Clause a strike was launched but was not disturbed that despite the Wage Board proposals, negotiations were being baulked and an interminable arbitral alternative was being offered by the Management.
He exclaimed: "If such a settlement arrived at was not respected and implemented the, machinery provided by law would lose all meaning and so also the sanctity of the word of the Management or the word of the union.
It is, therefore, essential tn ascertain who was responsible for the breach of the agreement so solemnly entered into.
Serious breach by management is alleged and this is given as a reason or is made as an cause for getting rid of the obligations 200 arising out of the agreement which specifically could not be terminated for five years.
" The narration continues and the following conclusion is reached: "It is thus very clear that the company had fully discharged its obligation under the agreement in respect of 64 discharged or dismissed workmen and the other workmen and the allegation made by the Sabha of the company having made a breach thereof is not correct.
" We thus see, that at this stage, the arbitrator has merely made r) a generalised approach as if a commission of inquiry were going into the conduct of the Management and the Sabha to discover who was blameworthy in the imbroglio.
The award then swiveled round to a study of the case of the Sabha vis a vis the triple grievances, the Sabha had: "I shall first deal with the grievance regarding demands for implementation of the recommendations of the Wage Board".
The long and sterile correspondence was set out and the arbitrator arrived at the conclusion that the insistence on reference to arbitration as against negotiation was justified on the part of the Management: "I, therefore, have accepted the version of: the Management and disbelieved the motivated denial of the Sabha in this respect.
" The culmination of the protracted discussion on the atmosphere and environment, rather than on the actual charge against each worker, was recorded in the Award: "I have exhaustively, perhaps more exhaustively than even necessary, dealt with the allegations made by the Sabha that the Management had committed breach of agreement by refusing to accede to the demand of the Sabha for implementation of recommendations of the Wage Board.
There appears to be no doubt that the Management had agreed to implement the recommendation of the Wage Board.
There is also not the least doubt the Management was ready and willing to implement the recommendations of the Wage Board it was because it was prevented by .
the Sabha from doing so." 201 An analysis of the Management 's conduct in the matter of non implementation of the Wage Board recommendation was thereafter made by the Arbitrator and he wound up thus : "I am satisfied that the Company had not committed any breach of the settlement dated 4 8 1972 at least so far as implementation of the recommendations of the Wage Board is concerned.
" The question of bonus for the year 1971 was also considered and dismissed and the Sabha 's case to that extent was negatived.
Again, the plea for wages for the period of the lock out was also negatived with the observations : "I fail to see how the Sabha can allege breach of the agreement dated 4 8 1972 in view of the clear unequivocal terms contained in clause 4 of that Agreement.
" In this strain the Award continued and the refrain was the same that the Sabha was in the wrong.
The Award even went to the exaggerated extent of morbidly holding that the workers were wearing printed badges which, along with other circumstances, amounted to a breach of the agreement ! The Award then moved on to the strike of January 27, 1973 because it led to the dismissal of all the workmen.
Until this stage, the arbitrator was merely painting the background and, at any rate, did not engage himself in isolating or identifying any worker or any misconduct.
He merely denounced the Sabha, which is neither here nor there, in the matter of disciplinary proceedings against each individual workman.
He missed the meat of the matter.
The relevant portion of the Award based on generalisation proved this error : "I am concerned herein with the question whether the discharge or dismissal of the 400 workmen was legal and proper or not and what relief to grant to them.
Approached from any point of view the action of the Company appears to me to be legal, proper and justified and the demands on behalf of these workmen must be rejected.
" A condemnation of the Sabha and an approval of the Management 's handling of the strike are miles away from the issue on hand.
202 We observe here also an unfortunate failure to separate and scan the evidence with specific reference to charges against individual workman.
On the contrary, all that we find in the award is an autopsy of the strike by the Sabha and a study of its allegedly perverse postures.
A disciplinary inquiry resulting in punishment of particular delinquents cannot but be illegal if the evidence is of mass misconduct by unspecified strikers led by leaders who are perhaps not even workmen.
We are constrained to state that pointed consideration of facts which make any of the 400 workmen guilty, is a search in vain.
The award being ex facie blank from this vital angle, the verdict must prima facie rank as void since vicarious guilt must be brought home against the actively participating members of a collectivity by positive testimony, not by hunch, suspicion or occult intuition.
The short position is this.
Is there a punishment of any workman ? If yes, has it been preceded by an enquiry ? If not, does not the Management desire to prove the charge before the tribunal ? If yes, what is the evidence, against whom, of what misconduct ? If individuated proof be forthcoming and relates to an illegal strike, the further probe is this : was the strike unjustified ? If yes, was the accused worker an active participant therein ? If yes, what role did he play and of what acts was he author ? Then alone the stage is set for a just punishment.
These exercises, as an assembly line process are fundamental.
Generalisation of a violent strike of a vicious Union leadership, of strikers fanatically or foolishly or out of fear, failing to report for work, are good background material.
Beyond that, these must be identified by a rational process, the workmen, their individual delinquency and the sentence according to their sin.
Sans that, the dismissal is bad.
Viewed from this perspective, the Award fails.
The Arbitrator comes to grips with the core question of discharge simpliciter versus dismissal as punishment but not with the identification of delinquents and delinquency.
After referring to Order 23 of the Model Standing Orders he goes on to state the law correctly by extracting observations from the Assam Oil Company case.
Another vital facet of industrial law is that when no enquiry has been held by the Management before imposing a punishment (or the enquiry held is defective and bad), the whole field of delinquency and consequent penalty is at large for the tribunal.
Several rulings support this logic.
We are constrained to hold that a certain observation made per incuriam by Mr. Justice Vaidyalingam, strongly relied on by Sri A. K. Sen, does not accurately represent the law, although the learned 203 Judge had earlier stated the law and case law correctly, if we may say so with respect.
A selective study of the case law is proper at this place.
Before we do this, a few words on the basis of the right to strike and progressive legal thinking led by constitutional guidelines is necessitous.
The right to unionise, the right to strike as part of collective bargaining and, subject to the legality and humanity of the situation, the right of the weaker group, viz., labour, to pressure the stronger party, viz., capital, to negotiate and render justice, are processes recognised by industrial jurisprudence and supported by Social Justice.
While society itself, in its basic needs of existence, may not be held to ransom in the name of the right to bargain and strikers must obey civilised norms in the battle and not be vulgar or violent hoodlums, Industry, represented by intransigent Managements, may well be made to reel into reason by the strike weapon and cannot then squeal or wail and complain of loss of profits or other ill effects but must negotiate or got a reference made.
The broad basis is that workers are weaker although they are the producers and their struggle to better their lot has the sanction of the rule of law.
Unions and strikes are no more conspiracies than professions and political parties are, and, being far weaker, need succour.
Part IV of the Constitution, read with article 19, sows the seeds of this burgeoning jurisprudence.
The Gandhian quote at the beginning of this judgement sets the tone of economic equity in Industry.
Of course, adventurist, extremist, extraneously inspired and puerile strikes, absurdly insane persistence and violent or scorched earth policies boomerang and are anathema for the law.
Within these parameters the right to strike is integral to collective bargaining.
Responsible trade unionism is an instrument of concerted action and the laissez faire law that all strikes are ipso facto conspiracies, is no longer current coin even in Adam Smith 's English country.
Lord Chorley, in Modern Law Review, Vol. 28, 1965, p. 451, is quoted as saying that law must be altered as a consequence of Rookes vs Barnard, so as to remove the effects of decisions of conspiracy and intimidation.
He goes on to state that Allen vs Flood and Quinn vs Leathem taking the conspiratorial view must never be permitted to be quoted in courts.
In contrast, reference was made to Willis on Constitutional Law, pp. 878 879, wherein the Supreme Court of America reflects the impact of capitalistic development and the economic views of the judges and the fact that the judges are members of a social order and a social product and the decisions are due more to the capitalistic system and the world of ideas in which the judges live.
Our Constitution is clear 204 in its mandate, what with article 39A superadded and we have to act in tune with the values enshrined therein.
The benign attitude towards strike being what we have outlined, the further question arises whether in the light of the accepted finding that the strike as such was illegal and, further, was unjustified, all the strikers should face the penalty of dismissal or whether individual cases with special reference to active participation in the strike, should be considered.
A rapid but relevant glance at the decided cases may yield dividends.
In India General Navigation and Railway Co. Ltd. vs Their Workmen, (supra) this court did observe that if a strike is illegal, it cannot be called 'perfectly justified '.
But, between 'perfectly justified ' and 'unjustified ' the neighbourhood is distant.
More illegality of the strike does not per se spell unjustifiability.
For, in Crompton Greaves Ltd. vs Workmen (supra) this Court held that even if a strike be illegal, it cannot be castigated as unjustified, unless the reasons for it are entirely perverse or unreasonable an aspect which has to be decided on the facts and circumstances of each case.
In that decision, this Court awarded wages during the strike period because the Management failed to prove that the workmen resorted to force and violence.
Even in India General Navigation and Railway Co. Ltd. (supra) where the strike was illegal and affected a public utility service, this Court observed that "the only question of practical importance which may arise in the case of an illegal strike, would be the kind or quantum of punishment, and that, of course, has to be modulated in accordance with the facts and circumstances of each case.
There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike or have taken recourse to violence." The court after holding that the strike was illegal "and that it was not even justified" made a pregnant observation : "To determine the question of punishment, a clear distinction has to be made between those workmen who are 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.
It is not in the interest of the industry that there should be a wholesale dismissal of all the workmen who merely participated in such a strike.
It is certainly not in the 205 interest of the workmen themselves.
An Industrial Tribunal, therefore, has to consider the question of punishment, keeping in view the overriding consideration of the full and efficient working of the Industry as a whole.
The punishment of dismissal or termination of services, has, therefore, to be imposed on such workmen as had not only participated in the illegal strike, but had fomented it, and had been guilty of violence or doing acts detrimental to the maintenance of law and order in the locality where work had to be carried on." After noticing the distinction between peaceful strikers and violent strikers, Sinha, J., in that case, observed "it must be clearly understood by those who take part in an illegal strike that thereby they make themselves liable to be dealt with by their employers.
There may be reasons for distinguishing the case of those who may have acted as mere dumb driven cattle from those who have taken an active part in fomenting the trouble and instigating workmen to join such a strike, or have taken recourse to violence.
" The same line of dichotomy is kept up : "Both the types of workmen may have been equally guilty of participation in the illegal strike, but it is manifest that both are not liable to the same kind of punishment.
" Significantly, the Court stressed the need for individual chargesheet being delivered to individual workmen so that the degree of misconduct of each and the punitive deserts of each may be separately considered.
We may as well refer to a few more rulings since considerable argument was expended on this point.
This Court in M/s. Burn & Co. Ltd. vs Their Workmen & Ors.(1) clearly laid down that mere participation in the strike would not justify the suspension or dismissal of workmen particularly where no clear distinction can 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.
After referring to the ratio in M/s. Burn & Co. Ltd. case, this Court in Bata Shoe Co. (P) Ltd. vs D. N. Ganguly & Ors.(2) observed that 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 206 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.
The Court then proceeded to determine the facts placed before it.
Sri Sen specifically pointed out that in the Bata Shoe Co. 's case this Court distinguished the decision in India General Navigation & Railway Co. Ltd. 's and observed that the decision in that case was on the facts placed before the Court.
In fact, Bata Shoe Co. 's case does not lay down any distinct proposition about the treatment to be meted out to participants in strike and actually it is a decision on its own facts.
In The Swadeshi Industries Ltd. vs Its Workmen(1), the Management after holding that the strike was illegal, terminated the services of 230 workmen without framing any chargesheet or holding any enquiry.
It was contended that the strike was not legal.
The Court observed that collective bargaining for securing improvement on matters like basic pay, dearness allowance, bonus, provident fund and gratuity leave and holidays was the primary object of a trade union and when demands like these were put forward and thereafter a strike was resorted to in an attempt to induce the company to agree to the demands or at least to open negotiations the strike must prima facie be considered justified.
As the order of termination was found to be illegal it was held that reinstatement with back wages must follow as a matter of course, not necessarily because new hands had not been inducted.
In I. M. H. Press, Delhi vs Additional Industrial Tribunal Delhi & Ors.
,(2) this Court was called upon to examine the ratio in Model Mills(3) case and India General Navigation & Railway Co. Ltd. case and this Court in terms affirmed the ratio in India General Navigation & Railway Co. Ltd. case observing that mere taking part in an illegal strike without anything further would not justify the dismissal of all the workmen taking part in the strike.
In Indian Iron & Steel Co. Ltd. & Anr.
vs Their Workmen(4), this Court observed that the management of a concern has power to direct its own internal administration and discipline but the power is not unlimited and when a dispute arises, Industrial Tribunals have been given the power to see whether the termination of service 207 of a workman is justified and to give appropriate relief.
It may be noticed that the decision is prior to introduction of section 11A.
It would thus appear that the important effect of omission to hold an enquiry was merely this that the tribunal would have to consider not only whether there was a prima facie case but would decide for itself on the evidence adduced whether the charges have been made out.
A defective enquiry in this connection stood on the same footing as no enquiry and in either case the tribunal would have jurisdiction to go into the entire matter and the employer would have to satisfy the tribunal that on the facts the order of dismissal or discharge was proper.
(see Workmen of Motipur Sugar Factory (Pvt.) Ltd. vs Motipur Sugar Factory(1), and Provincial Transport Service vs State Industrial Court) (2).
Once, therefore, it was held that the enquiry was not proper, it was irrelevant whether the workman withdrew from the enquiry or participated in it, the decision had to be on appraisal of evidence, and if it was found that the enquiry was not proper the whole case was open before the labour court to decide for itself whether the charge of misconduct was proved and what punishment should be awarded (see Imperial Tabacco Company of India Ltd. vs Its Workmen) (3).
As against the above propositions, Sri Sen relied upon the observations of this Court in Oriental Textile Finishing Mills, Amritsar vs Labour Court, Jullundur & Ors.(4).
We fail to see how it runs counter to the established principle.
The Court, in fact, held that even where the strike is illegal, before any action was taken with a view to punishing the strikers a domestic enquiry must be held.
Even though the Standing Orders prescribing enquiry before punishment did not provide for any such enquiry the Court held that nonetheless a domestic enquiry should have been held in order to entitle the management to dispense with the service of the workmen on the ground of misconduct, viz., participation in the illegal strike.
After so saying, the Court agreed with the view of the Court in Indian General Navigation & Railway Co. Ltd. case and reaffirmed the principle that mere taking part in an illegal strike without anything further would not necessarily justify the dismissal of all the workers taking part in the strike and that if the employer, before dismissing a workman, gave him sufficient opportunity of explaining his conduct and no question of mala fides or victimisation arose, 208 it was not for the tribunal in adjudicating the propriety of such dismissal to look into the sufficiency or otherwise of the evidence led before the enquiry officer or insist on the same degree of proof as was required in a court of law, as if it were sitting in appeal over the decision of the employer.
Another aspect of this case emphasised that it could not be dogmatised as a matter of law that an overt act such as intimidation or instigation or violence was necessary in order to justify termination of service for participating in an illegal strike.
On the facts of that case, even though it was found that no domestic enquiry was held, reinstatement was refused on the ground that misconduct was made out.
Sri Sen, of course, relied on this judgment to show that where a strike was resorted to and the workers were called upon to join service within the stipulated time, on their failure it was open to the company to employ new hands.
This is reading more into the ruling than is warranted.
We cannot agree that mere failure to report for duty, when a strike is on, necessarily means misconduct.
Many a workman, as a matter of prudence, may not take the risk of facing the militant workmen or the Management 's hirelings for fear, especially when there is evidence in the case from the Sabha that the Management had hired goondas and from the Management that the striking vanguard was violent.
It is also possible, in the absence of evidence to the contrary, that several workmen might not be posted with the Management 's notice of recall or the terms on which they were being recalled.
In this view, we are not able to uphold the conclusion of the arbitrator that the punishment of dismissal was appropriate for the entire mass of workmen whose only guilt, as proved was nothing more than passive participation in the illegal and unjustified strike by not reporting for duty.
The verdict is inevitable that the discharge is wrongful.
The only comment we reluctantly make about the otherwise thorough award of the Arbitrator is that omnibus rhetoric about the obnoxious behaviour of a class may not make do for hard proof of specific acts of particular persons where a punitive jurisdiction is exercised.
What, then, is the normal rule in the case of wrongful dismissal when the workmen claim reinstatement with full back wages ? The High Court has held the discharge wrongful and directed restoration 209 with an equitable amount of back wages.
The following rulings of this Court, et al, deal with this subject : The recent case of Hindustan Tin Works vs Its Employees (1) sets out the rule on reinstatement and back wages when the order of this Court, et al, deal with this subject : "It is no more open to debate that in the field of industrial jurisprudence a declaration can be given that the termination of service is bad and the workman continues to be in service.
The spectre of common law doctrine that contract of personal service cannot be specifically enforced or the doctrine of mitigation of damages does not haunt this branch of law.
The relief of reinstatement with continuity of service can be granted where termination of service is found to be invalid.
It would mean that the employer has taken away illegally the right to work of the workman contrary to the relevant law or in breach of contract and simultaneously deprived the workman of his earnings.
If thus the employer is found to be in the wrong as a result of which the workman is directed to be reinstated, the employer could not shirk his responsibility of paying the wages which the workmen has been deprived of by the illegal or invalid action of the employer.
Speaking realistically, where termination of service is questioned as invalid or illegal and the workman has to go through the gamut of litigation, his capacity to sustain himself throughout the protracted litigation is itself such an awesome factor that he may not survive to see the day when law 's proverbial delay has become stupefying.
If after such a protracted time and energy consuming litigation during which period the workman just sustains himself, ultimately he is to be told that though he will be reinstated, he will be denied the back wages which would be due to him, the workman would be subjected to a sort of penalty for no fault of his and it is wholly undeserved.
Ordinarily therefore, a workman whose service has been illegally terminated would be entitled to full back wages except to the extent he was gainfully employed during the enforced idleness.
That is the normal rule.
Any other view would be a premium on the unwarranted litigative activity of the employer.
If the employer terminates the service illegally and the termination is motivated as in this 210 case, viz., to resist the workmen 's demand for revision of wages, the termination may well amount to unfair labour practice.
In such circumstances reinstatement being the normal rule it should be followed with full back wages.
Articles 41 and 43 of the Constitution would assist us in reaching a just conclusion in this respect. . .
In the very nature of things there cannot be a strait jacket formula for awarding relief of back wages.
All relevant considerations will enter the verdict.
More or less, it would be a motion addressed to the discretion of the Tribunal.
Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure.
At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances.
" Dealing with the complex of considerations bearing on payment of back wages the new perspective emerging from article 43A cannot be missed, as explained in Hindustan Tin Works, Labour is no more a mere factor in production but a partner in Industry, conceptually speaking, and less than full back wages is a sacrifice by those who can best afford and cannot be demanded by those, who least sacrifice their large 'wages ' though can best afford, if financial constraint is the ground urged by the latter (Management) as inability to pay full back pay to the former.
The morality of law and the constitutional mutation implied in article 43A bring about a new equation in industrial relations.
Anyway, in the Hindustan Tin Works ' case 75 per cent of the past wages was directed to be paid.
Travelling over the same ground by going through every precedent is supererogatory and we hold the rule is simple that the discretion to deny reinstatement or pare down the quantum of back wages is absent save for exceptional reasons.
It must be added however that particular circumstances of each case may induce the court to modify the direction in regard to the quantum of back wages payable as happened in the India General Navigation and Railway Co. Ltd. vs Their Workmen (Supra).
We may, therefore, have to consider, when finally moulding the relief, what, in this case, we should do regarding reinstatement and back wages.
A Sum up We may now crystallise our conclusions in the light of the long discussion.
The basic assumption we make is that the strike was not only illegal but also unjustified.
On the latter part, a contrary 211 view cannot be ruled out in the circumstances present but we do not reinvestigate the issue since the High Court has proceeded on what both sides have taken for granted.
The Management, in our view, did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings, even though, with legal finesse, the formal order was phrased in harmless verbalism.
But fine words butter no parsnips, and law, in its intelligent honesty, must be blunt and when it sees a spade, must call it a spade.
The action taken under the general law or the standing orders, was illegal in the absence of individualised chargesheets, proper hearing and personalised punishment, if found guilty.
None of these steps having been taken, the discharge orders were still born.
But the Management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment.
We hold that sec.
11A does take in an arbitrator too, and, in this case, the arbitral reference, apart from sec.
11A, is plenary in scope.
In the second chapter of our sum up, the first thing we decide is that article 226, however restrictive in practice, is a power wide enough, in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and, more importantly, this extraordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand.
What the tribunal may, in its discretion, do, the High Court too, under article 226, can, if facts compel, do.
Secondly, we hold that the Award suffers from a fundamental flaw that it equates an illegal and unjustified strike with brazen misconduct by every workman without so much as identification of the charge against each, the part of each, the punishment for each, after adverting to the gravamen of his misconduct meriting dismissal.
Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge.
There must be active individual excess such as master minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role.
Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong.
An indicator of the absence of such grievous guilt is that the Management, after stating in strong terms all the sins of the workmen, took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service, suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen in the Engineers strike.
Furthermore, even though all sanctions short of 212 punitive discharge may be employed by a Management, in our current conditions of massive unemployment, low wages and high cost of living, dismissal of several hundreds, with disastrous impact on numerous families, is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the Industry, the welfare of the workmen and the broader justice that transcends transient disputes.
The human dimensions have decisional relevance.
We hold the discharge orders, though approved by the Arbitrator, invalid.
The last part of our conclusions relates to the relief which must be fashioned with an eye on mutual equities.
We cannot ignore a few raw realities since law is not dogmatics but pragmatics, without temporising on principle.
The Management 's limitations in absorbing all the large number of discharged employees all at once when, steel, the raw material, is scarce, is a problem.
Likewise, their inability to pay huge sums by way of back wages or otherwise, without crippling the progress of the industry, cannot be overlooked but cannot be overplayed after Hindustan Tin Works.
Another factor which cannot be wished away is the presence of over a couple of hundred workmen, with varying lengths of service, who may have to be sacked if the old workmen are to be brought back.
It is a problem of humanist justice.
Lastly, the rugged fact of life must not be missed that some of the workmen during the long years of desperate litigation, might have sought jobs elsewhere and most of them perhaps have, for sheer survival, made at least a starving wage during the prolonged idle interval.
This factor too is a weak consideration, tested by the reasoning in Hindustan Tin Works.
Moreover, rationalisation of re absorption of the removed workmen requires attention to the classification of permanent workmen and their casual counterparts.
Every proposal must be bottomed on the basic economic fact that the beneficiaries are from the many below the destitution line.
This Court has, in a very different context though, has drawn attention to the Gandhian guideline: "Whenever you are in doubt . apply the following test.
Recall the face of the poorest and the weakest man whom you may have seen, and ask yourself, if the step you contemplate is going to be of any use of him.
" It is apt here.
This perspective informs our decision.
What did the High Court do regarding reinstatement and should we modify and why? If the discharge is bad, reinstatement is the rule.
In India General Navi 213 gation, Punjab National Bank and Swadeshi Industries, et al, restoration, despite large numbers, was directed.
But most rules have exceptions wrought by the pressure of life and Oriental, was relied on to contend that reinstatement must be denied.
There is force in the High Court 's reasoning to distinguish Oriental, as we hinted earlier and we quote: "There were only 22 workmen involved in that case.
The management had made genuine and persistent efforts to persuade the concerned workmen to call of the strike and join work.
Those efforts were made at three different stages, namely, (1) immediately after the workers went on the lightening strike and before chargesheets were issued, (2) after the charges were dropped and individual notices were sent to the workmen asking them to resume work by specified dates and (3) after the orders of termination were served and conciliation proceedings were commenced pursuant to the demand notice.
But this is not all.
Even the Labour Officer and Labour Inspector had tried to persuade the concerned workmen to joint duty before the charge sheet came to be issued.
As against these repeated bona fide attempts on the part of the management and an outside agency to persuade the erring workmen, they not only did not resume work but also failed to acknowledge or send a reply to the individual notices served upon them requesting them to resume work and they appear to have made it a condition precedent to their joining duty that the suspended workmen should also be taken back.
Even under such circumstances, the management did not straightaway terminate their services but gave individual notices requiring the concerned workmen to show cause why their names should not be struck off and asked them to submit their reply by a certain date.
Even those notices were not replied.
It is only thereafter that the services of the concerned workmen came to be terminated.
It is against this background that the Supreme Court held that there was "a persistent and obdurate refusal by the workmen to joint duty" notwithstanding the fact that "the management has done everything possible to persuade them and give them opportunities to come back to work" and that they had without any sufficient cause refused to do so which constituted "misconduct" so as to 'justify the termination of their services".
214 ".
If the workmen had been approached individually, not only those amongst them who were unwilling to join strike but were prevented from joining work would have taken courage to resume duty but even those amongst them who were undecided could also have been won over.
That apart, those notices, as their contents disclose, were hardly persuasive efforts.
They were a mixture of ultimatums, threats, complaints and indictment of the workmen and the Sabha.
Was it, therefore, a genuine effort on the part of a keenly desirous employer to offer an olive branch? In Oriental, orders of termination were passed only after giving individual notices to the concerned workmen to showcause why their names should not be struck off.
Besides, those notices were given after charges formally served upon each workmen earlier were dropped and persuasive efforts made in the meantime had failed.
None of those steps was taken herein.
All that happened was that in one of the notices meant for mass consumption and circulation, such intimation was given.
" Even so, during the several years of the pendency of the dispute, surely some workmen would have secured employment elsewhere as was conceded by counsel at a certain stage, and it is not equitable to recall them merely to vindicate the law especially when new workmen already in precarious service may have to be evicted to accommodate them.
In the course of the debate at the Bar we gained the impression that somewhere around a hundred workmen are likely to be alternatively employed.
Hopefully, there is no hazard in this guess.
Another, facet of the relief turns on the demand for full back wages.
Certainly, the normal rule, on reinstatement, is full back wages since the order of termination is non est.
[see Lad 's case(1) and Panitole Tea Estate 's case(2)].
Even so, the industrial court may well slice off a part if the workmen are not wholly blameless or the strike is illegal and unjustified.
To what extent wages for the long interregnum should be paid is, therefore, a variable dependent on a complex of circumstances.
[See for e.g. paras 3 and 4].
We are mindful of the submission of Sri Tarkunde, urged in the connected appeal by the Sabha, that where no enquiry has preceded 215 a punitive discharge and the tribunal, for the first time, upholds the punishment this Court has in D. C. Roy vs The presiding Officer, Madhya Pradesh Industrial Court, Indore & Ors.(1) taken the view that full wages must be paid until the date of the award.
There cannot be any relation back of the date of dismissal to when the Management passed the void order.
Kalyani(2) was cited to support the view of relation back of the Award to the date of the employer 's termination orders.
We do not agree that the ratio of Kalyani corroborates the proposition propounded.
Jurisprudentially, approval is not creative but confirmatory and therefore relates back.
A void dismissal is just void and does not exist.
If the Tribunal, for the first time, passes an order recording a finding of misconduct and thus breathes life into the dead shall of the Management 's order, predating of the nativity does not arise.
The reference to Sasa Musa in Kalyani enlightens this position.
The latter case of D. C. Roy vs The Presiding Officer, Madhya Pradesh Industrial Court, Indore & Ors.
(supra) specifically refers to Kalyani 's case and Sasa Musa 's case and holds that where the Management discharges a workmen by an order which is void for want of an enquiry or for blatant violation of rules of natural justice, the relation back doctrine cannot be invoked.
The jurisprudential difference between a void order, which by a subsequent judicial resuscitation comes into being de novo, and an order, which may suffer from some defects but is not still born or void and all that is needed in the law to make it good is a subsequent approval by a tribunal which is granted, cannot be obfuscated.
We agree that the law stated in D. C. Roy (supra) is correct but now that the termination orders are being set aside, the problem does not present itself directly.
Even the other alternative submission of Sri Tarkunde that if the plea of the Management that the order is a discharge simpliciter were to be accepted, the result is a retrenchment within the meaning of section 2(00) which, in this case, is in violation of section 25F and therefore bad, is not a point urged earlier.
We are disposed to stand by the view that discharge, even where it is not occasioned by a surplus of hands, will be retrenchment, having regard to the breadth of the definition and its annotation in ; But the milieu in which the order was passed in February 1973 is not fully available, viewed from this new angle.
So we decline to go into that contention.
216 Final Relief We are concerned with 400 workmen, some of whom have been claimed by death or other irreversible causes casualties of litigative longevity ! are 370 workmen are left behind, of whom 239 are admittedly permanent.
We have already stated that 100, out of them, are probably fixed up elsewhere.
So, we exclude them and direct that the remaining 139 alone will be reinstated.
A list of the aforesaid 100 workmen will be furnished to the Management by the Sabha within two weeks from today.
That shall be accepted as correct and final.
While reinstatement is refused for these 100 workmen, when shall they be deemed to have ceased to be in service for drawal of terminal benefits ? Their discharge orders having been quashed, they remain in service until today.
We concluded the arguments on August 3, 1979 and on the eve of the closure of counsel 's submissions certain inconclusive settlement proposals were discussed.
We, therefore, consider August 3, 1979 as a pivotal point in the calender with reference to which the final relief may be moulded.
We direct that the 100 workmen for whom reinstatement is being refused will be treated as in service until August 3, 1979 on which date they will be deemed to have been retrenched.
We direct this step with a view to pragmatise the situation in working out the equities.
These 100 will draw all terminal benefits plus 75 per cent of the back wages.
This scaling down of back pay is consistent with the assumption that somewhere in the past they had secured alternative employment.
The long years and the large sum payable also persuade us to make this minor cut.
Of course, in addition, they will be entitled to retrenchment benefits under section 25F of the Act, and one month 's notice pay.
The remaining 139 will be awarded 50 per cent of the back wages since we are restoring them.
The High Court has adopted this measure and so we do not depart from it.
The case of the hundred stands on a slightly different footing, because some compensation in lieu of refusal of reinstatement is due to them and that also has entered our reckoning while fixing 75 per cent for them.
The computation of the wages will be such as they would have drawn had they continued in service and on that the cut directed will be applied.
We have disposed of the case of the permanent workmen except to clarify that in their case continuity of service will be maintained and accrual of benefits on that footing reckoned.
The next category relates to casual employees, 131 in number of whom 57 have less 217 than nine months ' service.
The policy of the Act draws a distinction between those with service of 240 days and more and others with less.
The casuals with less than nine months service are 57 in number and we do not think that this fugitive service should qualify for reinstatement especially when we find a number of intermediate recruits, with longer though untenable service, have to be baled out.
We decline reinstatement of these 57 hands.
The other 74 must be reinstated although nationally but wrongly they are shown as casual.
In the 'life ' sense, all mortals are casuals but in the legal sense, those with a record of 240 days on the rolls, are a class who have rights under industrial law.
We direct the 74 long term casuals aforesaid to be reinstated but not the 57 short term ones.
To this extent, we vary the High Court 's order.
We adopt the directive of the High Court regarding the back wages to both categories of casuals except that for the lesser class of 57 casuals, a flat sum of 1000/ more will be paid as a token compensation in lieu of reinstatement.
The reinstated casuals (74 of them) will be put back as casuals but will be confirmed within six months from the date of rejoining since it is meaningless to keep them as casual labourers when they are, by sheer length of service, on the regular rolls.
Two issues remain When are the workmen to be retaken and what is to happen in the meanwhile ? How is the amount payable by the Management to be discharged and on what terms ? Many years have flowed by, thanks to the long drawn out litigation.
Further delay in putting back the workers will be unfair.
But the Management pleads that steel shortage cuts into the flesh of the factory 's expansion, without which additional intake of workers is beyond their budget unless considerable time for reabsorption were given.
But the lot of the workmen is unspeakable while the overall assets and outlook of the Company are commendable enough to bear an increased wage bill.
Divas cannot complain when Lazarus asks for more crumbs.
Even if a slight slant be made in favour of the Management, the direction to them to take back, in order of seniority, the first 70 out of the 139 permanent workmen on or before December 31, 1979 and the rest on or before March 31, 1980 is the least that is just.
Until those dates the workmen will be paid 2/3rd of their wages as now due.
Of course, if any workmen fails to report for work within 15 days of service of written notice to him, with simultaneous copy to the Sabha, he will not be eligible for any more reinstatement or wages.
218 The back wages run into a large sum but a good part has been paid under the stay order of this Court.
We make it clear that the payments made will be given credit and the balance if paid as directed below and within the time specified will not carry interest.
If default is made, the sums in default will carry 10 per cent interest.
The figures of amounts due will be worked out by both sides and put into Court in 10 days from now.
Half the amount determined by the Court, after perusing both statements, will be paid directly to the workmen or deposited with the Industrial Tribunal who will give notice and make disbursements, on or before 31 3 1980 and the other half on or before 30 9 1980.
The conclusions may be capsulated for easier consumption.
Out of 370 workmen directed to be reinstated by the High Court, 239 are permanent.
It is assumed that 100 have found alternative employment and are not interested any more in reinstatement and they are to be excluded from the direction of reinstatement.
The Company must, therefore, reinstate 139 permanent workmen and the list of 100 workmen who are not to be reinstated would be supplied by the Sabha within two weeks from the date of this judgment.
The discharge order in respect of 100 workmen herein before mentioned would be set aside and they are deemed to be in service till August 3, 1979, when they will be retrenched and they will be paid retrenchment compensation as provided in section 25F plus one month 's pay in lieu of notice, the compensation to be worked out on the basis of the wages that will be admissible under the recommendations of the Engineering Wage Board as applicable to the Company.
This amount will be paid in lieu of reinstatement and they will also be paid 75 per cent of the back wages.
The remaining 139 permanent employees would be paid 50 per cent of the back wages as directed by the High Court.
3. 70 out of 139 permanent workmen directed to be reinstated should be provided actual employment on or before December 31, 1979, and the rest on or before March 31, 1980.
During this period and till the actual reinstatement each one of these 139 workmen should be paid 2/3 of the monthly wages from August 9, 1979, when the hearing in this case concluded.
50 per cent of the amount that becomes payable to each workmen under the directions herein above given will be paid on or before March 31, 1980, and the balance on or before September 30, 1980, and till then the amount will carry interest at the rate of 10 per cent.
219 4.
In respect of casual workmen whose service was less than 9 months on the date of dismissal it would not be proper to grant reinstatement.
They are 57 in number.
The remaining casual workmen 74 in number shall be reinstated.
In case of 57 casual workmen to whom reinstatement is refused, the direction of the High Court is confirmed with the further addition that each one will be paid Rs. 1,000/ over and above the amount payable under the direction of the High Court and this would be in lieu of reinstatement.
Casual workmen 74 in number and having service of more than 9 months on the date of dismissal will be treated as confirmed within six months of the date of their rejoining and they will be offered reinstatement by March 31, 1980, and the High Court 's direction for back wages in their respect in confirmed.
With these modifications, we dismiss both the appeals.
The Management appellant will pay the costs of the Sabha respondent, advocates fee being fixed at Rs. 5,000/ .
An Afterword This litigation, involving many workmen living precariously on post wages amidst agonising inflation and a Management whose young budget, what with steel scarcity, may well be shaken by the burden of arrears, points to the chronic pathology of our Justice System the intractable and escalating backlog in the Forensic Assembly Line that slowly spins Injustice out of Justice and effectually wears down or keeps out the weaker sector of Indian life.
This truma is felt more poignantly in Labour litigation and the legislature fails functionally if it dawdles to radicalise, streamline and simplify the conflict resolution procedures so as to be credibly available to the common people who make up the lower bracket of the nation.
The stakes are large, the peril is grave, the evils are worse than the prognostics of Prof. Lawrence Tribe (of the Harvard Law School) : "If court backlogs grow at their present rate, Our children may not be able to bring a lawsuit to a conclusion within their lifetime.
Legal claims might then be willed on, generation to generation like hillbilly feuds; and the burdens of pressing them would be contracted like a hereditary disease.
" Law may be guilty of double injustice when it is too late and too costly for it holds out remedial hopes which peter out into sour dupes and bleeds the anaemic litigant of his little cash only to tantalise him into a system equal in form but unequal in fact.
The price of 220 this promise of unreality may be the search by the lowly for the reality of revolutionary alternatives.
Compelled by the crisis in the Justice System, we sound this sombre judicial note.
We direct payments and reinstatements as spelt out earlier, within the specificated time, and, hopefully, leave the case with the thought that, given better rapport between the partners in production, the galvanic Gujarat Steel Tubes Ltd., will forge ahead as a paradigm for the rest.
KOSHAL, J. I have had the advantage of going through the judgment of my learned brother Iyer, J., but after giving the same my most serious consideration I regret that I find myself unable to endorse it as I hold a different opinion in relation to three important findings arrived at by him, namely, (a) that the discharge of workmen amounted really to their dismissal because the motivation for it was their alleged misconduct.
(b) that an arbitrator would fall within the ambit of the term "Tribunal" as used in sub section (2) of section 11A of the (hereinafter called the 1947 Act), and (c) that the High Court acted within the four corners or its jurisdiction under article 227 of the Constitution of India while interfering with the finding of the arbitrator that the workmen were correctly punished with dismissal if the orders of discharge could be construed as such.
I am therefore appending this note which may be read in continuation of that judgment.
The parties are admittedly governed by the (hereafter referred to as the "S.O. Act" section 15(2) of which empowers the appropriate Government to make rules, inter alia setting out model standing orders for the purposes of that Act.
The expression 'standing orders ' is defined in section 2(g) of the S.O. Act to mean rules relating to the matters set out in the schedule thereto, items 8 and 9 of which run thus : "8.
Termination of employment, and the notice therefor to be given by the employer and workmen.
221 "9.
Suspension or dismissal for misconduct and acts or omissions which constitute misconduct.
" The appropriate Government (in this case the Government of Gujarat) has prescribed Model Standing Orders (M.S.Os.
for short) under section 15(2) of the S.O. Act.
The relevant part of M.S.O. 23 is extracted below : "23.
(1) Subject to the provisions of the Industrial disputes Act, 1947, the employment of a permanent workman employed on rates other than the monthly rates of wages may be terminated by giving him fourteen days ' notice or by payment of thirteen days ' wages (including all admissible allowances) in lieu of notice.
"(2). . . . . . "(3). . . . . . "(4) The employment of a permanent workman employed on the monthly rates of wages may be terminated by giving him one month 's notice or on payment of one month 's wages (including all admissible allowances) in lieu of notice. "(4 A) The reasons for the termination of service of a permanent workman shall be recorded in writing and communicated to him, if he so desires, at the time of discharge, unless such communication, in the opinion of the Manager, is likely directly or indirectly to lay any person open to civil or criminal proceedings at the instance of the workman. "(5). . . . . . "(6). . . . . . "(7) All classes of workmen other than those appointed on a permanent basis may leave their service or their service may be terminated without or pay in lieu of notice : Provided that services of a temporary workman shall not be terminated as a punishment unless he has been given an opportunity of explaining the charges of misconduct alleged against him in the manner prescribed in Standing Order 25. "(8). . . . . . . "(9). . . . . . " 222 M.S.O. 24 enumerates 25 kinds of acts or omissions on the part of a workman which amount to misconduct.
Clauses (a) and (b) of the M.S.O. describe two of such acts thus : "(a) willful insubordination or disobedience, whether or not in combination with another, of any lawful and reasonable order of a superior; (b) going on illegal strike or abetting, inciting, instigating or acting in furtherance thereof;" M.S.O. 25 lays down the manner in which a workman guilty of misconduct may be dealt with.
It states : "25.
(1) A workman guilty of misconduct may be (a). . . . . . . . (b). . . . . . . . (c). . . . . . . . (d). . . . . . . . (e). . . . . . . . (f) discharged under Order 23; (g) dismissed without notice. "(2). . . . . . . . "(3) No order of dismissal under sub clause (g) of clause (1) shall be made except after holding an inquiry against the workman concerned in respect of the alleged misconduct in the manner set forth in clause (4). "(4) A workman against whom an inquiry has been held shall be given a charge sheet clearly setting forth the circumstances appearing against him and requiring explanation.
He shall be given an opportunity to answer the charge and permitted to be defended by a workman working in the same department as himself.
Except for reasons to be recorded in writing by the officer holding the inquiry, the workman shall be permitted to produce witnesses, in his defence and cross examine any witnesses on whose evidence the charge rests.
A concise summary of the evidence led on either side and the workman 's plea shall be recorded. "(5) . . . . . . . . .
" Clauses (3) and (4) of M.S.O. 25 speak of an inquiry only in the case of an order falling under sub clause (g) of clause (1) of 223 that M.S.
It is thus quite clear (and this is not disputed) that the only sub clause of clause (1) of M.S.O. 25 to which the provisions of clauses (3) and (4) of that M.S.O. would be attracted is sub clause (g) and that if an order of discharge falls under M.S.O. 23 an inquiry under clauses (3) and (4) of M.S.O. 25 would not be a prerequisite thereto even though such an order is mentioned in subclause (f) of clause (1) of that M.S.O.
And that is why it has been vehemently urged on behalf of the workmen who were discharged en masse and who were not taken back by the Management that the orders of discharge made in relation to them amount really to orders of dismissal and are bad in law by reason of the fact that no inquiry of the type above mentioned was held before they were passed.
Under M.S.Os. 23 and 25 the Management has the power to effect termination of the services of an employee by having recourse to either of them.
In action taken under M.S.O. 23 no element of punishment is involved and the discharge is a discharge simpliciter; and that is why no opportunity to the concerned employee to show cause against the termination is provided for.
Dismissal, however, which an employer may order, is, in its very nature, a punishment, the infiction of which therefore has been made subject to the result of an inquiry (having the semblance of a trial in a criminal proceeding).
Exercise of each of the two powers has the effect of the termination of the services of the concerned employee but must be regarded, because of the manner in which each has been dealt with by the M.S.Os., as separate and distinct from the other.
It was vehemently argued on behalf of the workmen that once it was proved that the order of discharge of a workman was passed by reason of a misconduct attributed to him by the management, the order cannot but amount to an order of dismissal.
But this argument, to my mind, is wholly without substance, and that for two reasons.
For one thing, clause (1) of M.S.O. 25 specifically states in sub clause (f) that a workman guilty of misconduct may be discharged under M.S.O. 23.
This clearly means that when the employer is satisfied that a workman has been guilty of misconduct, he may (apart from visiting the workman with any of the punishments specified in sub clauses (a), (b), (c), (d) and (e) of clause (1) of M.S.O. 25) either pass against him an order of discharge for which no inquiry precedent as provided for in clauses (3) and (4) of M.S.O. 25 would be necessary, or, may dismiss him after holding such an inquiry.
Which of the two kinds of order the employer shall pass is left entirely to his own discretion.
224 It is true that the employer cannot pass a real order of dismissal in the garb of one of discharge.
But that only means that if the order of termination of services of an employee is in reality intended to punish an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome, the order, even though specified to be an order of discharge, would be deemed to be an order of dismissal covered by sub clause (g) of clause (1) of M.S.O. 25.
On the other hand if no such intention is made out, the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee.
That is how, in my opinion, M.S.Os. 23 and 25 have to be interpreted.
The argument that once an alleged misconduct is shown to have been the motive for the passage of an order of discharge, the same would immediately and without more, amount to an order of dismissal, is not warranted by the language used in M.S.O. 25 which specifically gives to the employer the power to get rid of "a workman guilty of misconduct" by passing an order of his discharge under M.S.O. 23. 5.
Secondly, the reasons for the termination of service of a permanent workman under M.S.O. 23 have to be recorded in writing and communicated to him, if he so desires, under clause 4 A) thereof.
Such reasons must obviously consist of an opinion derogatory to the workman in relation to the performance of his duties; and whether such reasons consist of negligence, work shirking or of serious overt acts like theft or embezzlement, they would in any case amount to misconduct for which he may be punished under M.S.O. 25.
It is difficult to conceive of a case in which such reasons would not amount to misconduct.
The result is that M.S.O. 23 would be rendered otiose if termination of service thereunder for misconduct could be regarded as a dismissal and such a result strikes at the very root of accepted canons of interpretation.
If it was open to the Court to "lift the veil" and to hold an order of discharge to amount to a dismissal merely because the motive behind it was a misconduct attributed to the employee, the services of no employee could be terminated without holding against him an inquiry such as is contemplated by clauses (3) and (4) of M.S.O. 25. 6.
The interpretation placed by me on M.S.Os. 23 and 25 finds ample support in Bombay Corporation vs Malvankar(1) of which the 225 facts are on all fours with those in the present case.
Miss P. section Malvankar, respondent No. 1 in that case, was a clerk in the employment or the Bombay Electric Supply and Transport Undertaking which was being run by the Bombay Corporation.
Her services were terminated on the ground that her record of service was unsatisfactory.
It was however stated in the order of termination of her services that she would be paid one month 's wages in lieu of notice and would also be eligible for all the benefits as might be admissible under the Standing Orders and Service Regulations of the Undertaking.
Those Standing Orders correspond to the standing orders with which we are here concerned.
Thereunder, two powers were conferred on the employer, one being a power to impose punishment for misconduct following a disciplinary inquiry under clause (2) of Standing Order 21 read with Standing Order 23 and the other one to terminate the service of the employee by one calendar month 's written notice or pay in lieu thereof under Standing Order 26.
The question arose as to which power had been exercised by the employer in the case of Miss Malvankar and Jaswant Singh, J., delivering the judgment of the Court on behalf of himself and Bhagwati, J., was answering that question when he made the observations reproduced from his decision by my learned brother Iyer, J. This Court was then clearly of the opinion that (a) the power to terminate the services by an order of discharge simpliciter is distinct from and independent of the power to punish for misconduct and the Standing Orders cannot be construed so as to render either of these powers ineffective; and (b) reasons for termination have to be communicated to the employee and those reasons cannot be arbitrary, capricious or irrelevant but that would not mean that the order of termination becomes punitive in character just because good reasons are its basis.
The Court further remarked that if the misconduct of the employee constituted the foundation for terminating his service then it might be liable to be regarded as punitive but this proposition was doubted inasmuch as "even in such case it may be argued that the management has not punished the employee but has merely terminated his service under Standing Order 26".
So all that remains to be determined in this connection is as to when would misconduct be the `foundation ' of an order of dis 226 charge.
Merely because it is the reason which weighed with the employer in effecting the termination of services would not make the order of such termination as one founded on misconduct, for, such a proposition would run counter to the plain meaning of clause (1) of M.S.O. 25.
For an order to be `founded ' on misconduct, it must, in my opinion, be intended to have been passed by way of punishment, that is, it must be intended to chastise or cause pain in body or mind or harm or loss in reputation or money to the concerned worker.
If such an intention cannot be spelled out of the prevailing circumstances, the order of discharge or the reasons for which it was ostensibly passed, it cannot be regarded as an order of dismissal.
Such would be the case when the employer orders discharge in the interests of the factory or of the general body of workers themselves.
That this is what was really meant by the judicial precedents which use the word `foundation ' in connection with the present controversy finds support from a number of decisions of this Court.
In The Chartered Bank, Bombay vs The Chartered Bank, Employees ' Union(1) this Court held that if the termination of service is a colourable exercise of the power vested in the management or is a result of victimization or unfair labour practice, the Industrial Tribunal will have jurisdiction to intervene and set aside such termination.
Applying this principle to the facts of the case before it, this Court ruled : "We are satisfied that the management has passed the order of termination simpliciter and the order does not amount to one of dismissal as and by way of punishment" (emphasis supplied).
This case was followed in The Tata Oil Mills Co., Ltd., vs Workmen(2) where Gajendragadkar, C.J., who delivered the judgment of the Court, stated the law thus : "The true legal position about the Industrial Courts ' jurisdiction and authority in dealing with cases of this kind is no longer in doubt.
It is true that in several cases, contract of employment or provisions in Standing Orders authorise an industrial employer to terminate the service of his employees after giving notice for one month on paying salary for one month in lieu of notice, and normally, an employer may, in a proper case, be entitled to exercise the said power.
But where an order of discharge passed by an 227 employer gives rise to an industrial dispute, the form of the order by which the employees ' services are terminated, would not be decisive; industrial adjudication would be entitled to examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or it amounts to dismissal which has put on the cloak of a discharge simpliciter.
If the Industrial Court is satisfied that the order of discharge is punitive, that it is mala fide, or that it amounts to victimization or unfair labour practice, it is competent to the Industrial Court to set aside the order and in a proper case, direct the reinstatement of the employee.
In some cases, the termination of the employee 's services may appear to the Industrial Court to be capricious or so unreasonably severe that an inference may legitimately and reasonably be drawn that in terminating the services, the employer was not acting bona fide.
The test always has to be whether the act of the employer is bonafide or not.
If the act is mala fide, or appears to be a colourable exercise of the powers conferred on the employer either by the terms of the contract or by the standing orders, then notwithstanding the form of the order, industrial adjudication would examine the substance and would direct reinstatement in a fit case. ".
The same test was laid down for determining whether an order of discharge could be construed as one ordering dismissal in The Tata Engineering and Locomotive Co., Ltd., vs section C. Prasad(1) by Shelat and Bhargava, JJ. : "No doubt, the fact that the order was couched in the language of discharge simpliciter is not conclusive.
Where such an order gives rise to an industrial dispute its form is not decisive and the tribunal which adjudicates that dispute can, of course, examine the substance of the matter and decide whether the termination is in fact discharge simpliciter or dismissal though the language of the order is one of simple termination of service.
If it is satisfied that the order is punitive or mala fide or is made to victimise the workmen or amounts to unfair labour practice, it is competent to set it aside.
The test is whether the act of the employer is bona fide.
If it is not, and is a colourable 228 exercise of the power under the contract of service or standing orders, the Tribunal can discard it and in a proper case direct reinstatement.
" The Chartered Bank, Bombay vs The Chartered Bank Employees ' Union (supra) was followed by this Court in Workmen of Sudder Office, Cinnamore vs Management(1) and therein stress was laid on the employer 's right to terminate the services of a workman by an order of discharge simpliciter under the terms of the contract where there was no lack of bona fides, unfair labour practice or victimization.
So the real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention with which it was passed.
If the intention was to punish, that is, to chastise, the order may be regarded as an order of dismissal; and for judging the intention, the question of mala fides (which is the same thing as a colourable exercise of power) becomes all important.
If no mala fides can be attributed to the management, the order of discharge must be regarded as one having been caused under M.S.O. 23 even though the reason for its passage is serious misconduct.
It is in light of the conclusion just above arrived at that the discharge of the workmen in the instant case has to be judged.
The question of intention or mala fides is really one of fact (of which the arbitrator was, in my opinion, the sole judge, unless his finding on the point was vitiated by perversity in which case alone it was liable to be reviewed by the High Court).
The discussion of the evidence by the arbitrator in his award is not only full and logical but, in my opinion, also eminently just.
At all material times the Management was out to placate the Sabha (and therefore, the workmen) and gave to it a long rope throughout.
The attitude of the Sabha on the other hand was one of intransigence and obduracy.
According to the settlement of the 4th of August, 1972, it was not open to the workmen to resort to a strike till the expiry of a period of five years; nor could the Management declare a lock out till then.
Any disputes arising between the parties, according to the terms arrived at, were to be sorted out through negotiations or, failing that, by recourse to arbitration.
A dispute was raised by the Sabha soon thereafter over the implementation of the recommendations of the Central Engineering Wage Board (hereinafter called the Board), the payment of bonus 229 for the year 1971 and wages for an earlier lock out.
In paragraph 7.47 of its award the Board had made the following recommendations : "7.47.
After considering the problem in its entirety, we agreed to divide the industry into five regions or areas as under and in doing so, we have also considered the prevailing wage levels at different places and the cost of living at important centres in these places.
"1. Bombay City and Greater Bombay including Thana Ambarnath & Kalyan Industrial Areas. "2.
Calcutta, Greater Calcutta, Howrah Industrial area, Jamshedpur Industrial area, Durgapur, Asansol and Ranchi industrial areas.
Madras industrial area, Bangalore industrial area, Hyderabad industrial area, Poona Chinchwad industrial area, Delhi industrial area and Ahmedabad. "4.
Coimbatore, Nagpur, Bhopal, Kanpur, Baroda and Faridabad industrial areas.
The rest of the country.
" This classification was made for the purpose of granting `area allowance ' which varied with the category in which the area of the situation of a factory fell.
No allowance was to be paid to the factories falling in category 5 and on the basis of the phraseology used by the Board the Management contended that Ahmedabad industrial area (in which its factory was situated) fell within that category.
This interpretation of the categorisation made by the Board was not acceptable to the Sabha who claimed that the factory was covered by category 3; and this was an issue on which the Sabha was not prepared to climb down.
Similarly, the Sabha was adamant on the question of bonus for the year 1971 which it claimed at 16 per cent over and above 8.33 per cent allowed by statute with the plea that bonus at that rate had been paid in the earlier year.
This being the position and negotiations between the parties held at two meetings convened on 14 12 1972 and 20 1 1973 having ended in a fiasco, the Management offered to have the disputes resolved by arbitration but that again was a course not acceptable to the Sabha which, however, accused the Management of flouting the settlement dated the 4th of August , 1972, by not coming to the negotiating table.
The attitude adopted by the Sabha was, to say the least, most unreason 230 able.
It could not have its own way in taking certain matters as final and non negotiable.
Nor can it be said that stand taken by the management was unreasonable.
Paragraph 7.47 of the award of the Board categorized various factories with reference to the areas which were either described by the names of the cities in which they were situated or by the names of certain industrial areas.
Ahmedabad was mentioned as such and so was Calcutta while the other areas were mentioned as such and such industrial areas.
It was thus a very reasonable plea put forward on behalf of the Management that only Ahmedabad city and not Ahmedabad industrial area was included in category 3 and that that industrial area fell within category 5.
On the other hand, the Sabha interpreted the word `Ahmedabad ' occurring in category 3 to include Ahmedabad industrial area (in which lay the factory in question) and demanded area allowance for its workers on that score.
The reasonableness of the plea of the Management is obvious and it was the attitude of the Sabha which lacked reason in that on the failure of the negotiations they spurned the offer of the Management for arbitration on the question of interpretation of the categorisation.
It can also not be said that the objection regarding payment of bonus raised by the Management was not a reasonable one.
The argument that the stand of the Management that the negotiations between them and the Sabha on the questions of interpretation of the Board 's award and bonus having failed as there was no meeting ground on either of them, they could be referred to arbitration, lacked reason, is wholly unacceptable.
The attitude of the Sabha in insisting on negotiations being held only on the basis of certain propositions formulated by it amounted really to a refusal to negotiate the points in dispute and the Management was therefore not left with any alternative except to suggest an arbitration as envisaged in the settlement dated the 4th of August, 1972.
Later developments reveal a similar state of affairs in so far as the attitude of the Sabha is concerned.
Over and over again it was asked not to precipitate a strike and to act within the terms of the settlement but the advice fell on deaf ears.
Even after the strike which, it is admitted on all hands, was illegal and certainly not envisaged by the settlement of the 4th of August, 1972, the Management continued to make requests to the Sabha to send back the workers, but again no heed was paid to those requests.
On the other hand, the Sabha began making suggestions to the Government to take over the factory.
Ultimately, when the Management was faced, to adopt means to rehabilitate the factory by reports to fresh 231 recruitment, they had no option except to terminate the services of its workmen.
Each one of the orders of termination of services which were actually passed, was on the face of it wholly innocuous inasmuch as it did not stigmatise in any manner whatsoever the concerned workman.
The Management had however to record reasons for the discharge in pursuance of the provisions of clause (4A) of M.S.O. 25 and those reasons did charge each worker with misconduct inasmuch as he had taken part in the illegal strike and had refused to resume duty inspite of repeated demands made by the Management in that behalf.
All the same, the Management made it clear that inspite of such misconduct it had no intention of punishing the workers who were given not only the benefit of an order of discharge simpliciter but also the option to come back to work within a specified period in which case they would be reinstated with full benefits.
An intention not to punish could not be expressed in clearer terms and is further made out from the fact that more than 400 workers who resumed duty were reinstated without break in service.
In passing the orders of discharge, therefore, the Management did nothing more than act under M.S.O. 23 and its action cannot be regarded as amounting to dismissal in the case of any of the workers.
They had the right to choose between a discharge simpliciter and a dismissal and, in the interests of the factory and the members of the Sabha and perhaps on compassionate grounds also, they chose the former in unequivocal terms.
The intention to punish being absent, the finding of the High Court that the order of discharge amounted to one of dismissal cannot be sustained.
I now turn to the interpretation of sub section (2) of section 11A of the 1947 Act.
It is a well settled canon of interpretation of statutes that the language used by the legislature must be regarded as the only source of its intention unless such language is ambiguous, in which situation the preamble to the Act the Statement of Objects of and Reasons for bringing it on the Statute book and the purpose underlying the legislation may be taken into consideration for ascertaining such intention.
That the purpose of the legislation is to fulfil a socio economic need, or the express object underlying it, does not come into the picture till an ambiguity is detected in the language and the court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted.
That is how I propose to approach the exercise in hand.
For the sake of convenience of reference I may set out the provisions of clauses (aa) and (r) of section 2, of sub sections (1) 232 and (2) and the opening clause of sub section (3) of section 11, and of the whole of section 11A of the 1947 Act: "2.
(aa) `arbitrator ' includes an umpire;" "2.
(r) `Tribunal ' means an Industrial Tribunal constituted under section 7A and includes an Industrial Tribunal constituted before the 10th of March, 1957, under this Act;" "11.
(1) Subject to any rules that may be made in this behalf, an arbitrator, a Board, Court, Labour Court, Tribunal or National Tribunal shall follow such procedure as the arbitrator or other authority concerned may think fit. "(2) A conciliation officer or a member of a Board, or Court or the presiding officer of a Labour Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates. "(3) Every Board, Court, Labour Court, Tribunal and National Tribunal shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908.
when trying a suit, in respect of the following matters, namely: . . " "11A.
Where an industrial dispute, relating to the discharge or dismissal of a workman has been referred to a Labour Court, Tribunal or National Tribunal for adjudication and, in the course of the adjudication proceedings, the Labour Court, Tribunal or National Tribunal, as the case may be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or dismissal and direct reinstatement of the workman on such terms and conditions, if any, as it thinks fit, or give such other relief to the workman including the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of the case may require: Provided that in any proceeding under this section the Labour Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials on record and shall not take any fresh evidence in relation to the matter.
" Section 2 of the Act specifically lays down that unless there is anything repugnant in the subject or context, the expressions defined 233 therein would have the meanings attributed to them.
Throughout the Act therefore, while 'arbitrator ' would include an umpire, a 'Tribunal ' would not include an arbitrator but would mean only an Industrial Tribunal constituted under the Act, unless the context makes it necessary to give the word a different connotation.
In sub section (1) of section 11, it is conceded, the word 'Tribunal ' has been used in accordance with the definition appearing in clause (r) of section 2 because an arbitrator is separately mentioned in that sub section.
In sub sections (2) and (3) of that section a Board, a Labour Court, a Tribunal and a National Tribunal have been invested with certain powers.
Would a Tribunal as contemplated by sub sections (2) and (3) then include an arbitrator ? My reply to the question is all emphatic 'no '.
It is well settled that if a term or expression is used in a particular piece of legislation in one sense at one place, the same sense will pervade the entire legislation wherever the term is used unless an intention to the contrary is expressed.
Here the word 'Tribunal ' has been used in three sub sections of the same section and no reason at all is fathomable for the proposition that it means one thing in sub section (1) and something different in sub sections (2) and (3).
It may also be mentioned here that in all the three sub sections the word 'Tribunal ' has a capital 'T ' which is also part of the expression 'Tribunal ' as occurring in clause (r) of section 2 and thus connotes a proper noun rather than the generic word 'tribunal ' as embracing all institutions adjudicating upon rights of contending parties.
A third and perhaps a clinching reason for this interpretation is available in the use of the expression "National Tribunal" along with the word "Tribunal" in all the three sub sections which militates against the argument that the word "Tribunal" as used in sub sections (2) and (3) means an institution of that type.
If the word "Tribunal" as used in sub sections (2) and (3) means such an institution, then the use of the expression "National Tribunal" would be redundant and redundancy is not one of the qualities easily attributable to a legislative product.
In that case, in fact, other words used in the two sub sections last mentioned, namely, 'Court ' and 'Labour Court ' would also become redundant.
In this view of the matter, the word "Tribunal" as used in all the first three sub sections of section 11 must be held to have been used in the sense of the definition occurring in clause (r) of section 2. 12.
Section 11A is just the next succeeding section and therein a part of the arrangement adopted is the same as in sub sections (2) and (3) of section 11 so that powers are conferred by it on a "Labour 16 868SCI/79 234 Court, Tribunal or National Tribunal" which arrangement is repeated in the section thrice over.
That the word "Tribunal" as used in section 11A has the same meaning as it carries in the three sub sections of section 11 is obvious and I need not repeat the reasons in that behalf; for, they are practically the same as have been set out by me in relation to section 11. 13.
In my opinion the language employed in section 11A sufferers from no ambiguity whatever and is capable only of one meaning, i.e., that the word 'Tribunal ' occurring therein is used in the sense of the definition given in clause (r) of section 2.
It is thus not permissible for this Court to take the Statement of Objects and Reasons or the purpose underlying the enactment into consideration while interpreting section 11A. I may mention here however that a perusal of the Statement of Objects and Reasons forming the background to the enactment of section 11A leads me to the same conclusion.
In that Statement a reference was specifically made to tribunals as well as arbitrators in, terms of the recommendations of the International Labour Organization.
But inspite of that the word 'arbitrator ' is conspicuous by its absence from the section.
What is the reason for the omission ? Was it consciously and deliberately made or was it due to carelessness on the part of the draftsmen and a consequent failure on the part of the legislature ? In my opinion the Court would step beyond the field of interpretation and enter upon the area of legislation if it resorts to guess work (however intelligently the same may be carried out) and attributes the omission to the latter cause in a situation like this which postulates that the pointed attention of the legislature was drawn to the desirability of clothing an arbitrator with the same powers as were sought to be conferred on certain courts and tribunals by section 11A and it did not accept the recommendation.
I would hold, in the circumstances, that the omission was deliberately made.
It follows that the powers given to a Tribunal under section 11A are not exercisable by an arbitrator who, therefore, cannot interfere with the punishment (awarded by the employer) in case he finds misconduct proved.
The last point on which I differ with the finding of my learned brother relates to the exercise by the High Court of its powers under article 227 of the Constitution of India.
As pointed out by him the High Court, while discharging its functions as envisaged by that article, does not sit as a court of appeal over the award of the arbitrator but exercises limited jurisdiction which extends only to 235 seeing that the arbitrator has functioned within the scope of his legal authority.
This proposition finds full support from Nagendra Nath Bora and Another vs The Commissioner of Hills Division and Appeals, Assam and Others(1), P. H. Kalyani vs M/s. Air France, Calcutta(2), state of Andhra Pradesh vs section Sree Rama Rao(3) and Navinchandra Shakerchand Shah vs Manager, Ahmedabad Cooperative Department Stores Ltd.(4), all of which have ben discussed at length by him and require no further consideration at my hands.
In this view of the matter it was not open to the High Court to revise the punishment (if the discharge is regarded as such) meted out by the Management to the delinquent workmen and left in tact by the arbitrator whose authority in doing so has not been shown to have been exercised beyond the limits of his jurisdiction.
I need not go into the other aspects of the case.
In view of my findings (a) that the orders of discharge of the workmen could not be regarded as orders of their dismissal and were, on the other hand, orders of discharge simpliciter properly passed under M.S.O. 23; (b) that the arbitrator could not exercise the powers conferred on a Tribunal under section 11A of the 1947 Act and could not therefore interfere with the punishment awarded by the Management to the workmen (even if the discharge could be regarded a punishment), and (c) that in any case the High Court exceeded the limits of its jurisdiction in interfering with the said punishment purporting to act in the exercise of its powers under article 227 of the Constitution of India, the judgment of the High Court must be reversed and the order of the arbitrator restored.
The three appeals are decided accordingly, the parties being left to bear their own costs throughout.
O R D E R The appeals are dismissed substantially with such modifications as are indicated in the decretal part of the judgment of the majority.
V.D.K. Appeals dismissed.
| The assessee, a Hindu Undivided Family, owned certain shares in a private limited company in which the public were not substantially interested.
Though the shares were beneficially owned by the Hindu Undivided Family, they stood registered in the name of its Karta.
From out of its accumulated profits the company gave loans, in the assessment year 1956 57.
to three business concerns which were owned by The assessee.
Section 2(6! (e) of the Indian Income Tax Act, 1922 provided that where a private company in which public were not substantially interested gave loans to its shareholders from out of its accumulated profits such loan would be treated as "deemed dividend" in the hands of the shareholders.
The Income Tax officer treated the loans as "deemed dividend" in the hands of the assessee on The ground that though the shares stood in the name of the Karta, the assessee being the beneficial owner, the conditions of section 2(6A) (e) were satisfied.
This view of the Income Tax officer was upheld by the Appellate Assistant Commissioner.
The Appellate Tribunal rejected the contentions of the assessee that the loans could not be taxed as "deemed dividend" in its hands because it was not the registered owner of the shares; and (2) assuming that they could be treated as "deemed dividend" they could be taxed only in the hands of the karta.
The Tribunal referred six questions to the High Court.
Answering two out of the si questions, the High Court held that (1) the loans could not be treated aS "deemed dividend" in the assessee 's hands because the term shareholder used in the section meant only a person whose name is recorded in the company 's register of shareholders and (2) even assuming that the loans were "deemed dividend" they could be taxed only in the hands of the registered shareholder (the Karta).
The assessment made by the Income Tax officer was accordingly set aside.
In appeal to this Court, instead of questioning the correctness of the answers returned by the High Court the Revenue attacked only that part of the High Court 's order which held that "deemed dividend" could be taxed only in the hands of the registered shareholder.
Therefore the question before this Court was whether "deemed dividend" could be taxed in the hands of the beneficial owner of shares or could be brought to tax only in the hands of the registered shareholder.
This Court answered that where shares are acquired with the funds of one person but are registered in the name of another it is the beneficial owner who should be taxed on the dividend on the shares and that this 370 principle applies equally to "deemed dividend" under the section.
Even so, this Court discharged the answer given by the High Court in favour of the assessee and substituted an answer in favour of the Revenue.
Placing reliance on the decision of this Court in C.I.T. vs Sarathy Mudaliar where it was held that a loan advanced by a company to a beneficial owner did not fall within the mischief of section 2(6A)(e) the assessee contended that loans in this case could not be taxed as "deemed dividend" in its hands.
The Revenue on the other hand contended that (I) since in the earlier case of Rameswarlal Sanwarmal this Court had answered the reference in favour of the Revenue and that decision was final the later decision in Sarathy Mudaliar 's case would not be available to the assessee; (2) although the present question was not specifically considered by this Court on the earlier occasion it must be held to have been impliedly decided against the assessee and (3) that the decision in Sarathy Mudaliar 's case was incorrect and should be referred to a larger bench. ^ HELD: The arguments of the Revenue are fallacious.
When the Revenue came in appeal to this Court in the earlier case of Rameswarlal Sanwarmal it challenged only the second part of the High Court 's decision ignoring the first part.
The result was that the first part of the High Court 's decision that loans advanced to The business concerns of a beneficial owner of shares could not be regarded as 'deemed dividend" in his hands and that the loans in the sent case did not fall within the meaning of section 2(6A)(e) remained intact and unaffected by the decision of this Court.
This Court could not have answered the first question against the assessee without over ruling the first part of the High Court 's decision.
However, through inadvertence, this Court set aside the High Court 's answer without considering whether this part of tile decision was right or wrong.
When no contention was raised on behalf of the Revenue that even if the assessee was not a registered shareholder loans advanced to its business concerns would be "deemed dividend" in its hands and there was no occasion for this Court to consider the question, from the mere fact that an answer was given in favour of the Revenue, it cannot be said that this contention was impliedly decided in its favour.
[376 C H] 2.
The proper Way of looking at the decision of this Court in Rameswarlal Sanwarmal would be to regard the answer given in favour of the Revenue to be confined only to the aspect considered and decided by this Court, namely, that "deemed dividend" did not stand on any different tooting from actual dividend and just as actual dividend is liable to be taxed in the hands of the beneficial 6 owner of the shares.
so too "deemed dividend" must be held liable to be taxed ill the hands of the beneficial owner.
This Court did not consider whether a loan to a beneficial owner could be regarded as "deemed dividend".
Therefore, this aspect of the question still remained to be answered and it was open to the assessee to contend that the loans advanced to its business concerns could not be regarded as "deemed dividend" within the meaning of the section since the assessee was not a! registered shareholder.
[377 A D] 3 (1) The decision of this Court in Sarathy Mudaliar 's case laid down the law correctly and there is no need to refer the case to a larger bench.
The 371 question whether a loan advanced to beneficial owner of shares would be liable to be regarded as "deemed dividend" was neither raised nor considered by this Court in Rameswarlal Sanwarmal 's case but came up for consideration for the first time in Sarathy Mudaliar 's case only.
There is thus no conflict between the two decisions, [77 E l] (b) It is only where a loan is advanced by a company to a registered shareholder the other conditions set out in the section are satisfied that the amount of the loan would be liable to be regarded as "deemed dividend".
The amount of loan would not fall within The mischief of the section if it is granted to a beneficial owner of the shares.
[378 E F] In the instant case the loans were advanced not to the registered shareholder but to the business concerns of the beneficial owner.
Hence they could not be regarded loans advanced to a shareholder of the company within the meaning of the section.
[378 H
|
Appeal No. 700 of 1963.
Appeal by special leave from the judgment and order dated January 11, 1961 of the Madras High Court in Case Referred No. 131 of 1956.
21 H. N. Sanyal, Solicitor General, N. D. Karkhanis and R. N. Sachthei, for the appellant.
K. Srinivasan and R. Gopalakrishnan, for the respondent.
April 29, 1964.
The judgment of SUBBA RAO AND SIKRI JJ.
was delivered by SUBBA RAO J. SHAH J. delivered a dissenting opinion.
SUBBA RAO, J.
This appeal by special leave is directed against the order of the High Court of Madras in a reference made to it by the Income tax Appellate Tribunal under section 66(2) of the Indian Income tax Act, 1922, hereinafter called the Act.
The facts that have given rise to the appeal may briefly be stated.
There are 5 firms in Sivakasi manufacturing matches under the name and style of Shenbagam Match Works, Brilliant Match Works, Manoranjitha Match Works, Pioneer Match Works and Gnanam Match Works.
The total number of the partners of all the 5 firms does not exceed 1 0 or II in number.
Rajamoney Nadar is the sole proprietor of Shenbagain Match Works and in the other 4 firms there are more than one partner.
In the year 1948 a person from each of those firms in his representative capacity formed a partnership to carry on the business of banking and commission agents, the principal business being the marketing of the products of the different match factories in Sivakasi.
When the said partnership applied for registration for the assessment year 1949 50, it was refused by the Income tax Department on the ground that different firms could not constitute a valid partnership.
Thereafter, Sankaralinga Nadar, Arumughaswami Nadar, Arunachala Nadar, Palaniswamy Nadar and Rajamoney Nadar the first four being one of the partners of their respective firms and the last being the sole proprietor of his firm, in their individual capacity entered into a part nership for the aforesaid purpose and executed a partnership deed dated April 1, 1950.
They presented the said deed of partnership to the Income tax Officer for registration.
The Income tax Officer by his order dated October 27, 1952, re gistered the same under section 26A of the Act: but the Commissioner of Income tax under s.33B of the Act, cancell 22 ed the registration by an order dated October 23, 1954, and directed the assessment to take place as that of an unregis tered firm.
On appeal, the Income tax Appellate Tribunal held, on a construction of the partnership deed and also on the basis of some other circumstances, that the said deed "is not genuine and brought into existence only as a simulate arrangement, that the profits which are distributed under the deed to the individuals mentioned therein are not the true profits of those individuals." In short it held that the said partnership deed was not a genuine one.
On a reference made to the High Court of Judicature at Madras, a Division Bench of that High Court, on a construction of the document, came to the conclusion that the Match Works were not the real parties to the partnership but the parties of the document were the real partners.
Hence the present appeal.
Learned counsel for the Revenue raises before us the fol lowing two points, namely, (i) the findings of the Appellate Tribunal was one of fact and that the High Court had no jurisdiction to canvass the correctness of its finding on a reference made under section 66(2) of the Act, and (ii) the con clusion arrived at by the Tribunal was the correct one and the High Court erroneously interfered with it.
It is common place that under section 66(2) of the Act a reference to the High Court lies only on a question of law.
The scope of the provision has been elaborately considered by this Court in Sree Meenakshi Mills Ltd. vs Commissioner of income tax, Madras( ').
Therein the scope of the provision has been laid down under different propositions.
On the basis of the judgment it cannot be gainsaid that if the order refusing registration goes beyond the scope of the jurisdiction conferred on the Income tax Officer under section 26A of the Act and the Rules made thereunder or if the decision depends upon the construction of the partnership deed or if there is no evidence to sustain the finding of the Tribunal, then the High Court will have jurisdiction to entertain the reference under section 66(2) of the Act.
In our view, the finding of the Tribunal falls squarelv under the said three heads.
The relevant provisions of the Act read thus: (1) ; 23 Section 26A. (1) Application may be made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed; and it shall be dealt with by.
the Income tax Officer in such manner as may be prescribed.
In exercise of the powers conferred by section 59 of the Act, the Central Board of Revenue made the following rules: Rule 2.
Any firm constituted under an instrument of partnership specifying the individual shares of the partners may, under the provisions of Section 26A of the Indian Income tax Act, 1922 (hereinafter in, these rules referred to as the Act), register with the Income tax Officer, the particulars contained in the said Instrument on application made in this behalf.
Such application shall be given by all the partners (not being minors) personally and shall be made (a) before the income of the firm is assessed for any year under Section 23 of the Act, or Rule 3.
The application referred to in Rule 2 shall be made in the form annexed to this rule and shall be accompanied by the original Instrument of Partnership under which the firm is constituted, together with a copy thereof; 24 FORM I For of Application for Registration of a Firm tinder section 26A of the Indian Income tax Act, 1922 Rule 4.
If, on receipt of the application referred to in Rule 3, the Income tax Officer is satisfied that there is or was a firm in existence constituted is shown in the instrument of partnership and that the application has been properly made, lie shall enter in writing at the foot of the instrument or certified copy, as the case may be, a certificate in the following form, namely: .
Rule 6B.
In the event of the Income tax Officer bein satisfied that the certificate granted under Rule 4, or under Rule 6A, has been obtained without there being a genuine firm in existence, he may cancel the certificate so granted.
A combined effect of section 26A of the Act and the rules made thereunder is that if the application made by a firm gives the necessary particulars prescribed by the rules, the Income tax Officer cannot reject it, if there is a firm in existence as shown in the instrument of partnership.
A firm may be said to be not in existence if it is a bogus or not a genuine one, or if in law the constitution of the partnership is void.
The jurisdiction of the Income tax Officer is, therefore, confined to the ascertain I ing of two facts, namely, (i) whether the application for registration is in conformity with the rules made under the Act, and (ii) whether the firm shown in the document pre sented for registration is a bogus one or has no legal existence.
Further, the discretion conferred on him under section 26A is a judicial one and he cannot refuse to register a firm on mere speculation.
but he shall base his conclusion on relevant evidence.
What are the facts in the present case? The partnership deed is dated April 1, 1950.
In the document five persons are shown as its partners.
The name of the firm is given, the 25 objects of the partnership business are described, the dura tion of the business is prescribed and the capital fixed is divided between them in equal share.
Clause 16 of the Partnership deed, on which the Tribunal relied, reads: "This firm shall collect a commission of half an anna per gross on the entire production of the match factories of the partners, respectively, the Brilliant Match Works, Manoranjitha Match Works, Pioneer Match Works, Shenbagam Match Works and Gnanam Match Works produced from 1st April 1950 whether sales were effected through this firm or not and a further commission of half an anna per gross on the sales effected through this firm.
This commission will be collected on all kinds of matches produced from the abovesaid factories.
The commission of half an anna per gross on the entire production of these factories accrued due at the end of every month shall be debited to the respective factories under advice to them.
" Clauses 22 and 23 which throw further light on the question raised read: Clause 22.
The business of this firm shall have and has no connection with the match manufacturing business carried on now by the partners separately or in partnership with others.
Clause 23.
Any loss to the firm by way of fire accident or by any other cause during the course of the business of the firm, notwithstanding the fact that the loss might have arisen on the sale of or transaction relating to the match manufacturing concerns of the partners to this deed, shall be borne by this firm and shall be equally divided between the partners to this deed.
It is not disputed that the partnership deed ex facie conforms to the requirements of the law of partnership as well as the Income tax Act.
Under s.4 of the Indian Partnership Act partnership is the relation between persons who have agreed 26 to share the profits of the business carried on by all or any of them acting for all persons who have entered into the partnership with one another called individually partners and collectively a firm and the name under which the business is carried on is called the firm name.
The document certainly conforms to the said definition.
There is also no prohibition under the Partnership Act against a partner or partners of other.firms combining together to form a separate partnership to carry on a different business.
The fact that such a partner or partners entered into a sub partnership.
with others in respect of their share does not detract from the validity of the partnership; nor the manner in which the said partner deals with the share of his profits is of any relevance to the question of the validity of the partnership.
The document, therefore, embodies a valid partnership entered into in conformity with the law of partnership.
But the Tribunal has held that the partnership is not a genuine one for the following reasons: (i) previously the firm entered into a partnership but the registration of the same was rejected; (ii) under cl.
16 of the partnership deed the firm has the right to collect the commission of the entire match production of the larger partnerships whether they effect their sales through the firm or not; (iii) the books of Gnanam Match Works show unmistakably that the capital was contributed not by Palaniswamy Nadar in his individual capacity but by the larger firm as such; and (iv) regarding the other three larger firms also the profit delivered by their representatives from the assessee firm was divided amongst all the partners according to their profit sharing ratio in the larger firms.
On the other hand, the High Court found, on a construction of the relevant clauses of the partnership deed that the business was the business of the partners of the firm, alone and that the two circumstances relied upon by the Tribunal were irrelevant in acertaining whether the said partnership was real or not.
We have already pointed out that the document ex facie discloses a valid partnership.
The partnership was avowedly entered into by the partners in their individual capacity as their previous partnership in their representative capacity was not registered on the ground that such a part 27 nership was illegal.
If the larger firms cannot constitute members of a new partnership, some of the partners of those firms can certainly enter into a partnership shedding their representative capacity if they can legally do so.
If they can do so, the mere fact that one of them borrowed the capital from a parent firm we are using this expression for convenience of reference or some of them surrendered their profits to the parent firm cannot make it anytheless a genuine firm.
Nor does cl. 16 of the partnership deed detract from its genuineness: that clause does not create any right in the partnership to collect the commission; in view of the close Connection between the assessee firm and the parent firms, the parent firms were expected to effect all their sales through the assessee firm.
If they did not and if they refused to pay commission, the assessee firm could not enforce its right under the said clause.
Clause 22 in express terms emphasizes the separate identities of the assessee firm and the parent firms, and cl. 23 declares that notwithstanding the fact that the loss to the assessee firm has arisen on the sale or transaction relating to the match manufacturing concerns, the assessee firm alone shall bear the loss and thereby indicates that the loss of the assessee firm will not be borne by the parent firms.
If the assessee firm has a separate legal existence, the two circumstances relied upon by the Tribunal, namely, that Palaniswamy Nadar, one of the partners of the assessee firm, brought in the capital from his parent firm or that the profits earned by some of the partners were surrendered to the parent firms, would be irrelevant.
A partner of a firm can certainly secure his capital from any source or surrender his profits to his sub partner or any other person.
Those facts cannot conceivably convert a valid partnership into a bogus one.
The Tribunal mixed up the two concepts, viz., the legality of the partnership and the ultimate destination of the partners ' profits.
It also mixed up the question of the validity of the partnership and the object of the individual partners in entering into the partnership.
If to avoid a legal difficulty 5 individuals, though four of them are members of different firms, enter into a partnership expressly to comply With a provision of law, we do not see any question of fraud 28 or genuineness involved.
It is a genuine document and it complies with the requirements of law.
It is not an attempt to evade tax, but a legal device to reduce its tax liability.
The fact that all the partners of all the firms did not exceed 12 in number and if they chose all of them could have entered into the partnership indicates that there was no sinister inotive behind the partnership.
As the Tribunal misconstrued the provisions of the partnership deed and relied upon irrelevant considerations in coming to the conclusion it did., the High Court rightly differed from the view of the Tribunal.
In the circumstances, in view of the decision of this Court in Sree Meenakshi Mills ' case( '), a question of law within the meaning of s.66(2) of the Act arose for decision.
The High Court rightly answered the question in the negative.
In the result, the appeal is dismissed with costs.
SHAH J. Sivakasi Match Export Companv hereinafter referred to as 'the assessee ' is a partnership "carrying on business as bankers, commission agents and distributors of the products of different match factories at Sivakasi in the State of Madras".
The assessee was formed under a deed dated April 1, 1950.
There were five partners of the firm (1) N. P. A. M. Sankaranlinga Nadar (2) K. section section Arumugha swami Nadar (3) K. A. section Arunuchala Nadar (4) K. P. A. T. Rajamoney Nadar and (5) V. section V. P. Palaniswamy Nadar.
Before April 1, 1950, there existed a firm also named Sivakasi Matches Exporting Company which "consisted of a combine of six match factories" at Sivakasi constituted under a partnership deed dated March 12, 1948.
Registration of this partnership under section 26 A of the Income tax Act, 1922, was refused on the ground that the partnership deed did not specify the actual shares of the individual partners.
Thereafter a deed forming the partnership which is sought to be registered in these proceedings was executed on April 1, 1950.
It was recited in the preamble that originally four out of the five partners had been carrying on business in partnership as representatives of their respective match concerns, and it was found necessary that they should carry on the said business from April 1, 1950, jointly in their individual capacity, and it was agreed to admit into their part (1) [I956] S.C.R. 691 29 nership as and from April 1, 1950 the fifth person, namely V. section V. Palaniswamy Nadar.
The following are the material paragraphs of the agreement of partnership: "(16) This firm shall collect a commission of half an anna per gross on the entire production of the match factories of the partners, respectively, the Brilliant Match Works, Manoranjitha Match Works, Pioneer Match Works, Shenbagam Match Works and Gnanam Match Works, produced from 1st April 1950 whether sales were effected through this firm or not and a further commission of half an anna per gross on the sales effected through this firm.
This commission will be collected on all kinds of matches produced from the abovesaid factories.
The commission of half an anna per gross on the entire production of these factories accrued due at the end of every month shall be debited to the respective factories under advice to them. "(22) The business of this firm shall have and has no connection with the match manufacturing business carried on now by the partners separately or in partnership with others.
(23) Any loss to the firm by way of fire, accident or by any other cause during the course of the business of the firm, notwithstanding the fact that the loss might have arisen on the sale of or transaction relating to the match manufac turing concerns of the partners to this deed, shall be borne by this firm and shall be equally divided between the partners to this deed.
" It is common ground that each partner was concerned in the manufacture of matches either as owner or as partner with others.
Sankaralinga Nadar carried on business as a manufacturer of matches with two others in the name of the Brilliant Match Works; Armughaswamy Nadar as a partner with three other,, in the name of the Manoranjitha Match Works; Arunachala Nadar as a partner with two others in the name of the Pioneer Match Works, Rajamoney Nadar 30 as a sole proprietor of the Shenbagam Match Works, and Palaniswamy Nadar as a partner with three others in the name of the Gnanam Match Works.
On October 27, 1952, the Income tax Officer passed an order under section 26 A granting registration of the partnership constituted under the deed dated April 1, 1950, but the Commissioner of Income tax, Madras, exercising revisional jurisdiction under section 33 B of the Act, set aside the order and directed that the partnership be assessed to tax as an unregistered firm.
In the view of the Commissioner the partnership deed did not represent the true state of affairs and that "the actual position as distinguished from the recitals in the partnership deed was that all the partners of the Match Factories were directly partners of the assesses" and as the names of all the partners were not set out in the deed and the other requirements relating to registration had not been complied with, registration be refused.
The order was confirmed in appeal to the Income tax Appellate Tribunal.
At the direction of the High Court of Madras Linder section 66(2) of the Indian Income tax Act, 1922, the Tribunal referred the following question: "Whether on the facts and the circumstances of the case the refusal of registration of the assessee firm under section 26 A of the Income tax Act was correct in law?" The High Court answered this question in the negative.
Against that order, with special leave, the Commissioner of Income tax has appealed to this Court.
The Tribunal held that the covenants in the deed of partnership and especially in paragraphs 3 and 16 viewed in the light of the entry in the books of account of Gnanam Match Works debiting the capital contributed in the name of Palaniswamy Nadar to the assessee, and not in the name of its partner, and division of the profits received from the assessee by Palaniswamy Nadar, Sankarlinga Nadar, Aru maghaswamy Nadar and Arunachalam Nadar with others owners of their respective business, indicated that the named partners were acting as representatives of those owners.
The 31 High Court also held that cl. 16 of the partnership agree ment did not impose any liability upon the manufacturing concerns to pay any commission as stipulated therein on the " production of the match factories".
The High Court ob served: "Clause 16 does not lay any liability upon the manufacturing concerns and cannot operate as an enforceable contract against those other match companies.
If one of those match companies should decline to put through its sales business through the assessee firm, the only result would perhaps be that the partnership would not advance moneys or finance to that manufacturing concern; it might also be that the particular partner interested in the manufacturing concern might stand to lose the benefit of this partnership.
But that is not the same thing as to say that those manufacturing concerns themselves had become partners of the assessee partnership.
" The High Court also observed that the assessee was not concerned with the disposal of the profits received by its partners.
Finally the High Court observed that "an indi vidual member of the partnership is not prevented from engaging in business as member of another partnership.
The law does not prohibit such a course and even the Income tax law relating to registration of partnerships only refuses registration when the formation of such partnerships is intended to evade the incidence of income tax and nothing more.
We are not satisfied that the Tribunal correctly appreciated the facts of the present case in coming to the conclusion that the match works were the real parties to this instrument of partnership".
The Solicitor General appearing for the Commissioner contended that the High Court had in exercising its advisory urisdiction, in substance assumed appellate powers and had ought to reappraise the evidence on which the conclusion of the Tribunal was founded.
Counsel contended that the Tribunal had recorded a clear finding on the facts that the 32 "match works were the real" partners, and the High Court was bound on the question framed to record its opinion on the questions of law referred on the basis of that finding.
Section 26 A of the Indian Income tax Act enacts the procedure for registration of firms.
By that section on be half of any firm application may be submitted to the Income tax Officer for registration, if the firm is constituted under an instrument of partnership, specifying the individual shares of the partners.
The application has to be made by such person or persons and at such times and shall contain such particulars and shall be in such form as may be prescribed.
It is open to a firm to carry on business without registration under the Indian Registration Act.
By obtaining an order of registration, the partners of the firm are enabled to et the benefit of lower rates of tax than those applicable to the whole income of the firm, when charged as a unit of assessment.
In the relevant year of assessment if the firm was unregistered the tax payable by it had to be determined as in the case of any other distinct entity and tax had to be levied on the firm itself.
If, however, the firm was registered, the firm did not pay the tax and therefore the tax payable by the firm was not determined, but the share of profit received from the firm was added to the income of each partner, and on the total so determined tax was levied against the partners individually.
It is manifest that if the firm desired to secure this privilege it had to conform strictly to the requirements prescribed by law.
Under the rules framed under section 59 of the Indian Income tax Act.
1922, rules 2 to 6B deal with registration and renewal of registration of firms.
The application for registration has to be signed by all the partners (not being minors) personally, and the application has to be in the fornm prescribed by rule 3.
The form prescribed requires the partners of the firm to disclose the names of each partner, his address, date of admittance to Partnership, and other relevant particulars including each Dartrer 's share in the profits and loss, "particulars of the firm as constituted at the date" of the application, and particulars of the apportionment of the income, profits of gains or loss of the business, profession or vocation in the previous year between the partners who in that previous 33 year were entitled to share in such income, profits or gains or loss, where the application is made after the end of the relevant previous year.
If the Income tax Officer is satisfied that there is a firm in existence constituted as shown in the instrument of partnership and the application has been properly made, he has to enter in writing at the foot of the instrument or certified copy, as the case may be, a certificate of registration of the partnership under section 26 A of the Act.
This certificate of registration ensures only for the year mentioned therein, but the firm is entitled to obtain renewal of the registration.
On the conclusion recorded by the Tribunal that the partnership deed dated April 1, 1950 was in truth an ins trument relating to an agreement to carry on business 'by all the persons who owned the five businesses of which the representatives signed the deed, the application submitted by the live named partners of the assessee did not conform to the requirements of rules 2 and 3 and the Income tax Officer was bound to refuse registration.
It is true that the ,ground given by the Tribunal that the share of profits received by individual partners of the assessee was distributed by four of those partners who had entered into partnership contracts with other persons in the business of their respective match factories, standing independently of other grounds, may not be of much value in deciding whether all the partners of the match factories were intended to be partners of the assessee.
It is open to a partner who receives his share in the profits of the firm to dispose of that share in any manner he pleases, and no inference from the distribution of the share of such profits alone can lead to the ,inference that the persons who ultimately received the benefit of the profits are partners of the firm which had distributed the profits.
But the Tribunal adverted to three circumstances.
The terms of the deed of partnership purported to impose an obligation to pay Commission on the production of the five match factories, representatives of which sought to join as partners eo nomine.
Imposition of such ,an obligation was in the view of the Tribunal inconsistent with the representatives of those factories being partners of the assessee in their individual capacities.
Again it was 51 section C. 3 34 found that Gnanam Match Works had contributed capital to the assessee directly and not through its representative.
These wo circumstances, coupled with the ultimate distribution of profits by the individual partners among the partners of the match factories, led to the inference that each partner who signed the deed dated April 1, 1950 was acting not in his personal capacity, but as representing his match factory.
Granting that the evidence from which the inference was drawn was not very cogent, it was still exclusively within the province of the Tribunal to decide that question on the evidence before it, and its decision that in entering into the deed of partnership, the named partners represented their respective match factories, was not open to be canvas sed in a reference under section 66(2) of the Indian Income tax Act.
The High Court observed that cl. 16 of the partnership deed did no, impose any obligation upon the partners or their representatives of the five firms to pay commission as stipulated under that clause.
Undoubtedly, there is no covenant expressly imposing such liability upon the mach factories, but it was open to the Tribunal from he incor poration of such an unusual covenant to infer that the named partners of the assessee were acting as representatives of their respective factories.
To assume from the erms of cl. 16 that the owners of these match factories were not bound by the covenants contained in cl. 16 is to assume the answer to the question posed for opinion.
There was also the circumstance that in the books of account of the Gnanam Match Works of which Palaniswamy Nadar was a representative, capital was debited as contributed to the assessee.
This indicated that the Gnanam Match Works was directly interested in the partnership.
If that factory had made an advance to Palaniswamy Nadar to enable the latter to contribute his share of the capital, the entry in the factory 's books of account would have been in the name of its partner and not in the name of the assessee.
That also is a circumstance justifying an inference that in entering into the deed dated April 1, 1950 Palaniswamy acted for and on behalf of all the partners of the Gnanam Match Works.
Sharing of profits received by the named partners, with their partners in the respective match factories may not, as I have 35 already observed, by itself be a decisive circumstance.
But that did not authorise the High Court to disregard the find ing of the Tribunal on a question which was essentially one of fact.
When the High Court observed that they were satisfied that the Tribunal had not correctly appreciated the evidence in arriving at the conclusion that each Match factory was the real party in the instrument of partnership, they assumed to themselves jurisdiction which they did not possess.
It was not the case of the assessee that there was no evidence on which the conclusion arrived at by the Tribunal could be founded, nor was it the case of the assessee that the conclusion was so perverse that no reasonable body of men properly instructed in the law could have arrived at that conclusion.
It is also clear from the record that no such question was even canvassed before the Tribunal.
Manifestly such a question could not arise out of the order ,of the Tribunal, and none such was referred to the High Court.
By the question actually referred, the Tirbunal sought the opinion of the High Court whether on the facts and circumstances refusal of the application for registration of the assessee was correct in law.
If it was the case of the assessee that the conclusion of the Tribunal was based on no evidence, or that it was perverse, the High Court could be asked to call for a reference from the Tribunal on that question.
But that was never done.
It is true that the object of enacting section 26 A and the rules relating to the procedure for registration is to prevent escapement of liability to tax.
But it is not necessary that before an order refusing registration is made, it must be established that there was evasion of tax attempted or actual.
It is always open to a person, consistently with the law, to so arrange his affairs that be may reduce his tax liability to the minimum permissible tinder the law.
The fact that the liability to tax may be reduced by the adoption of an expedient which the law permits, is wholly irrelevant in considering the validity of that expedient.
But where the law prescribes conditions for obtaining the benefit of reduced liability to taxation, those conditions, unless otherwise provided, must be strictly complied with, and if they are not 36 so complied with, the taxing authorities would be bound to refuse to give the taxpayer the benefit claimed.
When application for registration of the firm is made, the Incometax Officer is entitled to ascertain whether the names of the partners in the instrument are of persons who have agreed to be partners, whether the shares are properly specified and whether the statement about the shares is real or is merely a cloak for distributing the profits in a different manner.
If all persons who have in truth agreed to be partners have not signed the deed or their shares are not truly set out in the deed of partnership, it would be open to the Incometax Officer to decline to register the deed, even if under the general law of partnership the rights and obligations of the partners eo nomine thereto may otherwise be adjusted.
As a corollary to this, if the requirements relating to the form in which the petition is to be presented are not complied with, and the relevant information is withheld, the Incometax Officer may be justified in refusing registration.
In my view the High Court was in error in holding on the question submitted that the registration of the assessee under section 26 A of the Income tax Act was wrongly refused.
The answer to the question referred to the High Court should be in the affirmative.
ORDER In accordance with the opinion of the majority, the appeal is dismissed with costs.
| The respondent executed an agreement to sell his house in order to meet family necessities for a certain sum on the condition that he and his mother would execute a sale deed in favour of the appellant, On the failure of the execution of the sale deed the appellant instituted a suit for specific performance of the contract.
The trial court held that the sale was not for legal necessity and therefore decreed the suit in part directing that the respondent would execute the sale deed for the alienation of his interest in the entire house and that the appellant would be entitled to get possession of the same jointly with the respondent 's mother.
The appellant appealed to the High Court and during its pendency the respondent 's mother died and therefore the only question urged on behalf of the appellant was that the respondent, having perfected his title to the entire house, be made to sell the same.
The High Court did not agree with the contention and held that section 18 (a) of the Specific Relief Act did not apply to the facts of the case as it comes into operation subsequent to the sale having taken place.
On appeal by special leave.
Held: The High Court was wrong in not applying the provisions of section 18(a) of the Act to the facts of the case.
The expression 'subsequently to the sale or lease ' in section 18(a) means subsequently to the contract to sell or let.
This clause cannot be restricted in its application to cases where actual sale or lease of property had taken place.
Kalyanpur Lime Works Ltd. vs State of Bihar, [1954] S.C.R. 958, referred to.
|
Appeal No. 107 of 1953.
Appeal by special leave from the judgment and decree dated the 7th February 1949 of the Patna High Court in appeal from original decrees No. 230 and 268 of 1945 arising out of the decree dated the 9th 3 day of August 1945 of the Second Court of Subordinate Judge at Monghyr in Title Suit No. 40 of 1943.
P. K. Chatterjee, for the appellants.
Tarachand Brijmohanlal, B. C. Misra and section Barneshwar Prasad, for respondents Nos.
3 to 6, 20 to 25 and 27 to 39.
January 16.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
The properties which are the subject matter of this litigation are agricultural lands of the extent of 18 acres 23 cents situate in Mauza Chowki.
They originally belonged to Khiran Rai, Firangi Rai and others, and were usufructuarily mortgaged by them on 10 8 1900 to Babunath Prasad and Babu Misri Lal under two sudbharna deeds, Exhibits 2 and 3, for a sum of Rs. 1,600.
The defendants of the first party are the representatives of these mortgagees.
In execution of a money decree passed against the mortgagors, 9 acres 6 cents out of the above lands were brought to sale on 11 6 1907 and purchased by Rameshwar Prasad Singh, the undivided uncle of the first plaintiff.
On 23 12 1913 the remaining extent of 9 acres 17 cents was purchased by the.
first plaintiff from the mortgagors, and thus, the plaintiffs who were members of a joint Hindu family became entitled to all the interests of the mortgagors in the suit lands.
In 1943 they deposited under section 83 of the Transfer of Property Act the amounts due on the mortgage deeds, Exhibits 2 and 3, in the court of the District Munsif, Monghyr.
The defendants of the first party withdrew the amount, and the mortgages thus became redeemed.
When the plaintiffs attempted to take khas or actual possession of the lands, they were obstructed by the defendants of the second party who claimed occupancy rights therein.
The plaintiffs then instituted the suit out of which the present appeal arises, in the court of the Subordinate Judge, Monghyr, for recovery of possession of the lands from the second party defendants.
4 The plaintiffs alleged that the lands were 'kamat khudkast ' which had been in the personal enjoyment of Khiran Rai and Firangi Rai and thereafter of the mortgagees and the defendants of the first party by virtue of the sudbharna deeds, Exhibits 2 and 3, that the second party defendants claimed rights as occupancy raiyats under a settlement by the mortgagees, that the settlement was not real or bona fide, and was not binding on the mortgagors.
In the alternative, the plaintiffs claimed damages against the defendants of the first party, if it was found that the second party bad acquired occupancy rights under a settle ment from them.
Both sets of defendants denied that the lands were kamat lands, or that the defendants of the first party settled the defendants of the second party as raiyats on the land.
They pleaded that the latter had been in possession even prior to the mortgages, Exhibits 2 and 3, under a settlement with the mortgagors, and that accordingly the plaintiffs were entitled neither to possession from the second party nor damages from the first party.
The Subordinate Judge of Mongbyr who tried the suit, held that the lands were private lands of the proprietors, that the defendants of the second party or their predecessors in title bad not been inducted on the lands by the mortgagors, that they were put into possession by the mortgagees only under the lease deed, Exhibit 2(a) dated 27th May 1905, that they were mere creatures of the first party, and that the settlement was not bona fide and not binding on the plaintiffs.
He accordingly granted a decree in favour of the plaintiffs in ejectment.
Against this judgment, there was an appeal by the defendants to the High Court of Patna, which agreed with the Subordinate Judge that the defendants of the second party were inducted into possession only in 1905 under the lease deed, Exhibit 2(a), and that they were not raiyats settled by the mortgagors prior to 1900.
But the learned Judges held that the suit lands were not proved to be 'sir ' or private lands, that the second party defendants were not the creatures of the first party, that the lease deed, Exhibit 2(a) was a 5 bona fide transaction, and that the recognition of the defendants of the second party by the mortgagees as tenants would confer occupancy rights on them.
In the result, the suit was dismissed.
The plaintiffs appeal.
It may be stated that the alternative claim for damages against the first party was abandoned by the plaintiffs, and the only relief now claimed is possession of lands as against the second party.
Mr. Misra, counsel for the first party, had accordingly nothing to say about the merits of the controversy between the appellants and the second party defendants, and merely pressed for his costs being awarded.
It was the second party appearing by counsel Mr. Tarachand Brijmohan Lal, that vigorously contested the appeal.
The substantial question that arises for our decision is whether the lands in dispute are private lands of the proprietor.
Section 120(2) of the Bihar Tenancy Act VIII of 1885, hereinafter referred to as the Act, enacts a presumption that "land is not a proprietor 's private land, until the contrary is shown".
And further, there was a cadastral survey in 1908, and in the final notification published under section 103 A of the Act, the lands were recorded as in the possession of the second party defendants, whose status was described as 'kaimi ' or settled raiyats.
Under section 103 B(3), "every entry in a record of rights so published shall be evidence of the matter referred to in such entry, and shall be presumed to be correct until it is proved by evidence to be incorrect".
The result of both these provisions is that the burden is on the proprietor clearly to establish that the lands are his private lands.
Some oral evidence has been adduced by both sides as to the character of the lands, but it is too vague, recent and interested to be of much value, and the question therefore falls primarily to be decided on the 'documentary evidence in the case.
The earliest document bearing on the question is Exhibit 1, which is a mortgage deed executed by the previous owners, Firangi Rai and others, to Harbans Narain Singh on the 10th April, 1893 over a portion 6 of the suit lands.
Therein, it is recited that the mortgagors "mortgage, hypothecate and render liable the properties constituting the proprietory mukarri interest, with all the zamindari rights and claims including the khudkasht kamat lands".
The word 'khudkasht ' means personal cultivation, and that is a neutral expression, which might include both private lands and bakasht lands, that is to say, raiyati lands, which had come into the possession of the proprietor by surrender, abandonment or otherwise.
But the word 'kamat ' has a definite connotation, and means private lands.
Vide section 116 of the Bihar Tenancy Act.
If the recital in Exhibit I is to be accepted as correct, the lands were on that date in the personal cultivation of the proprietor as private lands.
Exhibits 2 and 3 are the sudbharna deeds dated 10 8 1900 under which the first party defendants got into possession of the suit lands.
They are in the same terms, and recite the at the mortgagees are to enter into possession and occupation of lands, " cultivate or cause to be cultivated the same for their self satisfaction", and that after the expiry of the period fixed for redemption, the mortgagors are to pay the mortgage amounts in one lump and take back the properties "in our sir and khas possession".
The word 'sir ' is synonymous with 'kamat ' and 'ziraat ', and means private lands of the proprietor.
(Vide section 116).
These recitals are of considerable importance, as they occur in deeds inter parties.
The respondents are right in contending that they cannot be regarded as admissions by the mortgagees as the deeds were executed by the mortgagors; but they are certainly admissible under section 13 of the Evidence Act as assertions of title, and as it is under these documents that the first party defendants claim, their probative value as against them and as against the second party defendants who claim under them is high.
Exhibit I (b) is a simple mortgage executed by Firangi Rai and others on 21 12 1901 in favour of one Chhotu Singh over some properties forming part of the suit lands.
It also contains the recital that these properties are kamat khudkasht lands.
There 7 is finally the lease deed executed in favour of the first party by the defendants of the second party, Exhibit 2(a) under which the latter came into possession of the lands.
It recites that the lands had been in the exclusive cultivation of Babu Nath Prasad and Babu Misri Lal, that the lessees will give up possession of the lands at the end of the term which was a period of 2 years,, and that the lessors will be "competent to bring the lands mentioned in this kabuliat under their exclusive cultivation".
As these documents are ante litem motam, and as some of them, are inter parties and extend over a considerable period of time, they form cogent and strong evidence that the lands are private lands.
Now, what is the evidence adduced by the defendants to rebut the inference to be drawn from them? None.
They simply trust to the presumptions in their favour enacted in sections 120(2) and 103 B of the Act to non suit the plaintiffs.
But these are rebuttable presumptions, and they have, in our opinion, been rebutted by the evidence in the suit, which is all one way.
It was argued for the respondents that even if the evidence referred to above was accepted, that would be insufficient under section 120 of the Act to support a finding that the lands were private lands.
Section 120 runs as follows: "(1) The Revenue Officer shall record as a proprietor 's private land (a) land, which is proved to have been cultivated as khamar, ziraat , sir, nij, nijjot or kamat by the propriet or, himself with his own stock or by his own servants or by hired labour for twelve continuous years immediately before the passing of this Act, and (b) cultivated land which is recognised by village usage as proprietor 's khamar, ziraat, sir, nij, nijjot or kamat.
(2) In determining whether any other land ought to be recorded as a proprietor 's private land, the officer shall have regard to local custom, and to the question whether the land was, before the second day 8 of March, 1883, specifically let as proprietor 's private land, and to any other evidence that may be produced; but shall presume that land is not a proprietor 's private land until the contrary is shown.
(3)If any question arises in a Civil Court as to whether land is or is not a proprietor 's private land, the Court shall have regard to the rules laid down in this section for the guidance of Revenue Officers".
The contention of the respondents is that under this section before lands could be held to be private, it must be shown that they had been cultivated as private lands for 12 years prior to the date of the Act, and that as the evidence in the case went back only to 1893, the requirements of the section were not satisfied.
This argument proceeds on a misconception about the true scope of section 120.
That section does not enact that no land shall be recorded as private, unless it is proved to have been cultivated as private land for 12 years prior to the date of the Act.
It only provides that when that is proved, it shall be recorded as private land.
But when no such evidence is forthcoming, it does not preclude that fact from being established by "any other evidence that may be produced", if that is relevant and admissible under the provisions of the Evidence Act.
That was the view taken in Maharaja Kesho Prasad Singh vs Parmeshri Prasad Singh(1), and on appeal, the Privy Council agreed with it in Bindeshwari Prasad Singh vs Maharaja Kesho Prasad Singh(2).
The position, therefore, is that section 120 merely enacts certain rules of evidence to be followed in an enquiry as to whether a disputed land is 'ziraat '.
When in such enquiry the facts mentioned in section 120(1) are established, the law raises a presumptio juris et de jure that the lands are private.
But where such evidence is not available, that fact can still be estab lished by otber and satisfactory evidence.
What has to be decided therefore is whether the evidence actually adduced by the plaintiffs in the present case is (1) Patna 414.
(2) [1926] 53 I.A. 164, 9 sufficient to discharge the burden which the law casts on them and to prove that the lands are 'kamat ' or 'sir ' lands.
For the reasons already given, weare of opinion that it is sufficient to justify a findidg in the affirmative.
Strong reliance was placed by the respondents on Exhibits F 1 and F 1(1) which are khatians relating to the suit lands published on 7 12 1909 recording them as in the possession of the defendants of the second party as 'kaimi ' and on the presumption under section 103 B that that entry is correct.
This presumption, it is contended, is particularly strong in the present case, because the predecessors in title of the plaintiffs were parties to the proceedings and contested the same, and that the record of rights was made after considering their objections.
The plaintiffs, however, denied that they were parties to the proceedings, and contended that they were taken behind their back by the mortgagees and the second party defendants acting in collusion with a view to defeat their rights.
Exhibits A 1 and A 1(1) are certified copies of the objection petitions stated to have been filed by the mortgagors under section 103 A of the Act, and they purport to have been signed by one Chulai Mahto as karpardaz of some of the mortgagors.
The plaintiffs deny the genuineness of the signatures in Exhibits A 1 and A 1(1) and also the authority of Chulai Mahto to represent the mortgagors.
There is no evidence that the signatures on Exhibits A 1 and A 1 (1) are true, but the defendants rely on the presumption enacted in section 90 of the Evidence Act in favour of their genuineness.
But Exhibits A 1 and A 1 (I) are merely certified copies of the objection petitions filed before the Survey Officer and not the originals, and it was held in Basant vs Brijraj(1) that the presumption enacted in the section can be raised only with reference to original documents and not to copies thereof.
There is the further difficulty in the way of the respondents that the documents are signed by Chulai Mahto as agent, and there is no proof that he was an agent, (1) [1935] 62 I.A. 180.
10 and section 90 does not authorise the raising of a presumption as to the existence of authority on the part of Chulai Mahto to represent the mortgagors.
It is again to be noted that the objection on the merits raised in Exhibits A 1 and A 1(1) that the lands are bakasht lands in the possession of mortgagees is not one which it was to the interests of the mortgagors to put forward, as, if accepted, it would preclude them from admitting tenants in respect of them, without conferring on them the status of settled raiyats and occupancy rights under section 21 of the Act.
It was only if the lands were private lands that the proprietor would be entitled to cultivate them personally, and that was the claim which they had been making consistently from 1893 onwards.
The claim put forward in Exhibits A 1 and and A 1(1) is destructive of the rights claimed all along by the mortgagors, and amounts to an admission that the lands are not private and raises the doubt that the petitions were not really inspired by them.
It should also be mentioned that at the hearing of the petition, no evidence was adduced by the mortgagors, and the decision of the Survey Officer was given practically ex parte.
The mortgagees were parties to the proceedings, and they did not appear and produce the mortgage deeds, Exhibits 2 and 3, under which they got into possession, and which described the lands as 'sir '.
It was to the interests of the mortgagees that the 'lands should be held to be 'sir ', and it was further their duty to defend the title of the mortgagors as against the claim made by the tenants that they were raiyati lands.
Why then did they not produce Exhibits 2 and 3 at the hearing? The recitals in the lease deed, Exhibit 2(a) which was executed by the defendants of the second party, were inconsistent with their claim that the lands were raiyati.
Why did they not produce it at the hearing ? Thereis therefore much to be said for the contention ofthe appellants that the proceedings evidenced by Exhibits A 1 and A 1(1) were collusive in character.
But even assuming that they were real, that 11 would not materially affect the result, as the true effect of a record of rights under section 103 A is not to create rights where none existed but simply to raise a presumption under section 103 B that such ' rights exist, and that presumption is one liable to be rebutted.
There is a long line of authorities that a person who attacks a record made under section 103 A as incorrect discharges the burden which the law casts on him under section 103 B by showing that it was not justified on the materials on which it is based.
Vide Bogha Mower vs Ram Lakhan(1) and Eakub Ali vs Muhammad Ali(2).
And where., as here, no evidence was placed before the authorities who made the record, he has only to produce evidence which satisfies the court that the entry is erroneous.
Whether the question is considered with reference to the presumption under section 120(2) or section 103 B, the position is the same.
The plaintiffs who claim that the lands are kamat have to establish it by clear and satisfactory evidence.
If the evidence adduced by them is sufficient, as we have held it is, to establish it, the presumption under section 103 B equally with that under section 120(2 becomes displaced.
In the result, we are of opinion that the suit lands are the private lands of the proprietor.
It was next contended that even if the lands were private lands, that would not prevent the acquis tion of occupancy rights by the tenants under Chapter V, as the restriction provided in section 116 in that behalf did not apply on the facts of the present case, and that in consequence no relief in ejectment could be granted.
Section 116 enacts, omitting what is not material, that "nothing in Chapter V shall confer a right of occupancy in a proprietor 's private land where any such land is held under a lease for a term of years or under a lease from year to year".
, In the present case,, the tenants got into possession under Exhibit 2(a), which was a lease for two years, and they would therefore be precluded from acquiring occupancy rights by virtue of that demise.
But it is argued that the tenants continued in possession of (1) (2) 12 the holdings even after the expiry of the term under Exhibit 2(a), paid the rent to the mortgagees who recognised them as tenants, and that their status therefore was not that of tenants holding under a lease for a term or from year to year, and that accordingly there was no impediment to their acquiring occupancy rights under Chapter V.
The point has not been argued whether, as Exhibit 2(a) is an agricultural lease, the tenants who held over after the expiry of the period fixed therein, should not be con, sidered to hold as tenants from year to year, on the principle enacted in sections 106 and 116 of the Transfer of Property Act.
We shall proceed on the footing that on the findings of the High Court that the tenants were riot the creatures or servants of the mortgagees, and that they had been in continuous possession paying rent to them, section 116 did not debar them from acquiring rights under Chapter V.
But the question is whether they acquired such rights under that Chapter.
Section 21 provides that every person who is a settled raiyat in a village shall have a right of occupancy in all land for the time being held by him as a raiyat in that village.
Section 20 defines a settled raiyat as a person who holds continuously land for a period of 12 years in any village.
Section 5(2) defines 'raiyat ' as a person who has acquired a right to bold land for the purpose of cultivating it by himself or members of his family or servants or partners, and section 5 (3) provides that "a person shall not be deemed to be a raiyat unless he holds land either immediately under a proprietor or immediately under a tenure bolder".
The position therefore is that before a person can claim occupancy rights under section 21, he must establish that he is a raiyat as defined in sections 5(2) and 5(3), and as the defendants of the second party acquired the right to hold the lands for the purpose of cultivation from the first party mortgagees and not under the mortgagors, they are not raiyats as defided in section 5(3), and can claim no rights under section 21.
On behalf of the tenants, it was contended that as under section 58 of the Transfer of Property Act a 13 mortgage is a transfer of interest in land, the mortgagee is the owner of that interest and therefore a proprietor for the purpose of section 5(3).
Section 3(2) defines a proprietor as meaning a person owning whether in trust or for his own benefit an estate or part of an estate.
A mortgagee is no doubt the transferee of an interest in immovable property, and may in a loose sense be said to be the owner of that interest.
But the definition of a proprietor requires that he should own the estate or part thereof and not merely an interest therein.
It would be a contradiction in terms to say of a mortgagee that he owns the estate over which he owns an interest.
As observed in Ghose on the Law of Mortgage in India, Volume I, page 77, "Interest which passes to the mortgagee is not the ownership or dominion which, notwithstanding the mortgage, resides in the mortgagor".
The question whether for purposes of section 21 of the Act a tenant from a mortgagee can be held to be a raiyat as defined in section 5(3) was considered by this Court in Mahabir Gope and others vs Harban8 Narain Singh and others(1), and it was held that a mortgagee is neither a proprietor nor a tenure holder, and a tenant inducted by him on the lands is not a raiyat within the definition of those terms under the Act.
That decision governs this case.
The contention of the respondents that the mortgagees could be considered as tenure holders within section 5(3) is equally untenable.
Section 5(1) defines a tenure holder as meaning a person who has acquired a right to hold lands for collecting rents or for bringing them into cultivation by establishing tenants thereon.
In the present case, the lands were under the personal cultivation of the mortgagors at the time when they were mortgaged under Exhibits 2 and 3.
There were then no raiyats on the land and no 'question of transferring the right to collect rent from them.
The respondents relied on the terms in Exhibits 2 and 3 that the mortgagees might cultivate the lands or cause them to be cultivated at their pleasure, as authorising the establishment of tenants.
But that (1) , 781.
14 clause would apply only if the lands had to be brought afresh under cultivation, and that was not the position here.
As the mortgagees are neither proprietors nor tenure holders as defined in the Act, the tenants holding under them could not claim to be raiyats as defined in sections.5(2) and 5(3), and no occupancy rights could therefore be acquired by them under section 21 of the Act.
It was next contended that the mortgagees had the power under section 76 of the Transfer of Property Act to induct tenants on the land for purposes of cultivation, that such a transaction.
would be binding on the mortgagors, and that its effect would be to confer on the tenants the status of raiyats and that they would get occupancy rights under section 21 of the Act.
The decisions in Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), Rajendra Nath vs Dinu Prodhan(2) and Pramatha Nath vs Sashi Bhu8an(3) were relied on in support of this contention.
This argument proceeds on a confusion of two wholly independent concepts distinct in their origin and different in their legal incidents.
The law is that a person cannot confer on another any right higher than what he himself possesses, and therefore, a lease created by a usufructuary mortgagee would normally terminate on the redemption of the mortgage.
Section 76(a) enacts an exception to this rule.
If the lease is one which could have been made by the owner in the course of prudent management, it would be binding on the mortgagors, notwithstanding that the mortgage has been redeemed.
Even in such a case, the operation of the lease cannot extend beyond the period for which it was granted.
In the present case, assuming that the mortgagees bad the power under section 76(a) of the Transfer of Property Act to continue the lessees under Exhibit 2(a) as tenants on the lands after the termination of the period fixed therein that would confer on them at best the status of tenants from year to year and not give them the right to continue in possession after the termination of the agricultural year during which the redemption (1) (2) A.I.R. 1930 Cal.
(3)A.I.R. 15 takes place.
In this view, the power of the mortgagee under section 76(a) of the Transfer of Property Act to induct tenants in the usual course of management would not avail the respondents to claim occupancy rights over the lands.
Turning next to the provisions of the Bihar Tenancy Act, section 21 confers on settled raiyats a permanent right of occupancy, provided the conditions mentioned in that section are satisfied.
But this right is a creature of the statute, and cannot be claimed apart from its provisions.
A mortgagee is, as already stated, neither a proprietor nor a tenure holder, and a person settled by him on the land does not enjoy the status of a raiyat under sections 5(2) and 5(3).
He is therefore not a person entitled under the terms of the statute to any occupancy rights.
Thus, if the respondents cannot resist the suit for ejectment either by reason of section 76(a) of the Transfer of Property Act or section 21 of the Bihar Tenancy Act, it is difficult to see how they could get such a right as the result of the interaction of both those sections.
In Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), the suit was by a mortgagor after redemption to recover possession of lands, which had been leased by the mortgagee.
The proprietor claimed that the lands were zirait; but the finding, however, was that they were raiyat lands, and that the mortgagee had inducted tenants into possession in the usual course of management.
It was held that the tenants could not be ejected.
The decision was expressly based on the fact that the lands were raiyati lands, and the learned Judges distinguished the cases in Mahadeo Prasad Sahu vs Gajadhar Prasad Sahu(2 ) and Jogeshwar Mazumdar vs Abed Mahomed Sirkar (3) on the ground that the lands which were the subject of mortgage therein were zerait lands.
This decision does not support the broad proposition for which the respondents contend, and is really against them, as the mortgage in the present case is of 'kamat ' lands.
In Rajendra Nath vs Dinu Prodhan(4), the facts were (1) (2) (3) (4) A.I.R. 1930 Cal.
16 similar to those in Manjhil Lal Biswa Nath Sah Deo vs Mahiuddin(1), except that the lands do not appear to have been raiyati lands.
In holding that the mortgagor was not entitled to possession, Guha, J. observed that the mortgage deed did not stand in the way of the tenants being settled by the mortgagee, and that when they were so settled, they had well defined rights under the Act, and could not be ejected.
If section 5(3) of the Act did not apply and it would not, unless the letting was by the proprietor or tenureholder it is not stated what other provision of law operated to confer occupancy rights on the tenant.
The learned Judge then referred to Binad Lal Pakrashi vs Kalu Pramanik(2 ) as furnishing the principle on which the decision should rest.
There, a tenant was put into possession by a person who claimed to be the proprietor, and though it subsequently turned out that he was not, it was held that the letting by him conferred on the tenant the status of a raiyat.
As pointed out in Peary Mohun Mondal vs Radhika Mohun Hazra(3) and Krishna Nath Chakrabarty vs Mahomed Wafiz(4) the basis of the decision in Binad Lal Pakrashi vs Kalu Pramanik(2) was that the word "proprietor" in section 5(3) would include a defacto as well as a de jure proprietor, and a tenant who is bona fide inducted into possession by him would have the status of a raiyat.
This decision makes an inroad on the general principle that no one can confer a better right than what he has got, and later decisions have generally shown a disposition to confine its application within narrow limits.
But even on its own ground, it can have no application when the person who admits a tenant is not, as required by section 5 (3), a proprietor de facto or de jure, but a mortgagee.
The principle of the decision in Binad Lal Pakraski vs Kalu Pramanik(2) does not therefore support the conclusion in Rajendra Nath vs Dinu Prodhan(5) that a tenant admitted by a mortgagee into possession acquires the status of a raiyat.
(1) , (2) Cal.
(3) (4) (5)A.I.R. 17 In Pramtha Nath vs Sashi Bhusan(1), a permanent lease was granted by a mortgagee after he had obtained a decree for foreclosure.
Subsequently, that decree was recalled in a suit by the Official Receiver ' representing one of the mortgagors and a fresh decree for redemption was passed.
After redemption, the Official Receiver received rent from the lessee treating him as a tenant on the land.
A transferee from the Official Receiver having subsequently instituted a suit in ejectment against the tenant, it was held that the latter bad acquired a right of occupancy under section 21 of the Act, and that the relief for khas possession could not be granted as against him.
Notwithstanding that some of the observations in the judgment are widely expressed, the ground of the decision really is that when the Official Receiver accepted rent from the tenant, that amounted to an affirmance of the lease by him, and that would have the effect of bringing section 5(3) directly into play and conferring on the tenant the status of a raiyat.
The decisions discussed above do not lay down any acceptable principle that a lease by a mortgagee which is protected by section 76(a) of the Transfer of Property Act, operates by itself to confer a right of occupancy on the tenant under section 21 of the Act.
Some argument was founded by the respondents on the clause in Exhibits 2 and 3 that the mortgagee could get the lands cultivated.
It was contended that this clause conferred authority on the mortgagee to settle raiyats on the lands, and that the tenants admitted in pursuance of this authority would be in the same position as if they had been admitted by the proprietor and the conditions of section 5(3) would be satisfied.
But then, the lands are private lands, and the clause in question is followed by the provision that on redemption the mortgagors would be entitled to resume "sir and khas possession", and that would be rendered nugatory if the deed is construed as authorising the mortgagees to settle tenants on the lands with the status of raiyats.
The authority to get lands cultivated can only mean (1) A.I.R. 1937 Cal. 763.
3 18 getting them cultivated through hired labour as contemplated in the definition of 'private lands '.
We are clearly of opinion that the mortgage deed conferred no authority on the mortgagees to admit tenants so as to confer on them rights of occupancy.
In the result, we must old that the defendants of the second party have failed to establish that they have any rights of occupancy over the suit lands, and that the plaintiffs are accordingly entitled to a decree in ejectment, with future mesne profits as claimed in the plaint.
This appeal is allowed, the decree of the lower court is set aside, and that of the Subordinate Judge of Monghyr restored as against 2nd party defendants with costs throughout.
The suit as against the first party defendants is dismissed, but in the circumstances, there will be no order as to costs.
| The appellants were the purchasers of the mortgagors ' interests in the agricultural lands in suit and deposited the amounts due on the mortgages in court under section 83 of the Transfer of Property Act, which were withdrawn by the representatives of the mortgagees and the mortgages were redeemed.
They were obstructed in taking khas possession of the lands by tenants who were recorded as "settledraiyats" in the finally published record of rights and brought the suit for recovery of possession from the tenants and, alternatively, for damages against the representatives of the mortgagees.
The subordinate Judge found that the lands were the private lands of the proprietors and the tenants were inducted not by them but by the mortgagees in possession by a lease for a term which was neither bona fide nor binding on the appellants and passed a decree in ejectment.
On appeal, the High Court held that the lands were not the private lands of the mortgagors, the lease was bona fide and the recognition of the lessees as tenants by the mortgagees conferred on them rights of occupancy in the suit lands and dismissed the suit.
The respondents relied on the presumptions under sections 103 B and 120(2) of the Bihar Tenancy Act and contended that the recognition by the mort gagees of their tenancy right had the effect of conferring on them the rights of occupancy under the Act.
Held, that an entry in the record of rights published under section 103 A of the Bihar Tenancy Act does not create rights but merely raises a presumption under section 103 B of the Act that such Tights exist, which can be rebutted if it can be shown that the materials on which it was based do not justify it.
Bogha Mower vs Ram Lakhan, ([1917] and Bakub Ali vs Muhammad Ali ([1928] , referred to.
That where, as in the present case, no evidence was produced before the authority who made the record, one has only to produce 2 such evidence as satisfies the court in order to rebut the presumption.
This is equally true with regard to the presumption enacted by section 120(2) of the Act with regard to the proprietor 's private land.
That section 120 of the Bihar Tenancy Act merely enacts certain rules of evidence for determining whether a disputed land is the proprietor 's "private" land.
It does not preclude the proprietor, even if he cannot prove that he cultivated the land as such for 12 years prior to the date of the Act, from adducing other evidence to show that the land is his private land.
Kisho Prashad Singh vs Parmeshri Prasad Singh, ([1923] I.L.R. 2 Pat. 414) and Bindeshwari Prasad Singh vs Kisho Prasad Singh ([1926] L.R. 53 I.A. 164), relied on.
That as the mortgagees were neither proprietors nor tenure holders as defined by the Bihar Tenancy Act, persons inducted by them could not be raiyats within the meaning of section 5(3) of the Act so as to acquire any rights of occupancy under section 21 of the Act.
Mahabir Gope vs Harbans Narain Singh ([1952] S.C.R. 775), applied.
Nor could the provisions of section 76 (a) of the Transfer of Property Act be of any avail.
Assuming that the lease granted by the mortgagees continued even after termination of the period fixed therein, that could confer on the lessees no more than the status of tenants from year to year, in which case, their possession would cease with the termination of the agricultural year during which the mortgages were redeemed.
Rajendra Nath vs Dinu Prodhan (A.I.R. , disap proved.
Binod Lal Pakrashi vs Kalu Pramanik ([1893] I.L.R. 20 Cal.
708), doubted and held inapplicable.
Pramatha Noth vs Sashi Bhusan (A.I.R. , distinguished.
Case law discussed.
Held further, that there is no presumption of genuineness in favour of certified copies of documents under section 90 of the Evidence Act, nor does that section authorise the raising of a presumption as to the existence of authority of an agent to act for another.
Basant vs Brijraj ([1935] L.R. 62 I.A. 180), referred to.
|
Appeals Nos.
48 to 53 of 1963.
Appeals from the judgment and decrees dated May 3, 1960, of the Calcutta High Court in Appeals Nos. 215, 67, 82 & 216 of 1958.
W. section Barlingay, section section Khanduja and Ganpat Rai, for the appellants (in all the appeals).
G. section Pathak and D. N. Mukherjee, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question which these six ap peals raise relates to the construction of section 30(c) of the Calcutta Thika Tenancy Act, 1949 (W.B. Act No. 11 of 1949) (hereinafter called 'the Act ').
This question arises in this way.
The respondent Sanat Kumar Ganguli is the owner of a plot of land being premises No. 12, Haldar Lane, in Central Calcutta This plot had been let out in several lots to the predecessors in title of the six appellants.
366 On July 24, 1954, the respondent filed six suits Nos. 2240 to 2245 of 1954 against the six appellants respectively on the original side of the Calcutta High Court, claiming decrees for ejectment against them and asking for arrears of ground rent and Municipal taxes.
The appellants contested the respondent 's claim on the ground that the lands in suits had been taken by their predecessors in title from the owner as Thika tenants in or about the year 1900, and they alleged that they were in occupation of the said plots after having built substantial structures on them.
The appellants further claimed that they had themselves let out portions of such structures to their own tenants.
On these allegations, a preliminary objection to the competence of the suits was raised by the appellants on the ground that under section 5 of the Act, claim for ejectment of Thika tenants can be entertained only by the Controller, and so, the learned Judge on the original side of the Calcutta High Court had no jurisdiction to entertain it.
The respondent admitted that the appellants were Thika tenants and did not dispute that normally, a claim for ejecting such Thika tenants could be tried only by the Controller; but he urged that the present suits fell within the scope of section 30(c) of the Act and in consequence, the provisions of section 5 and indeed.
, all other relevant provisions of the Act did not apply to them.
That is how the respondent sought to meet the preliminary objection raised by the appellants.
In appreciating the nature of the controversy thus raised by the pleadings, it is necessary to mention some more facts.
On February 9, 1940 a notice was issued by the Chairman of the Calcutta Improvement Trust under section 43 of the Calcutta Improvement Act, 1911 (Bengal Act V of 191 1) as amended up to 193 1.
This Act will hereafter be called 'the Improvement Act '.
This notice shows that a scheme bearing No. 53 had been framed for the purpose of improvement of Calcutta by a street scheme in Ward No. 10 of the Calcutta Municipality for an area the boundaries whereof were described in the said notice.
This notice gave the particulars of the scheme and was accompanied by a map of the area comprised in the scheme.
It also contained the statement of the land which it was proposed to acquire as well as land on which betterment fee was proposed to be levied.
These plans were open for inspection at the office of the Trust at No. 5, Clive Street, Calcutta.
Along with this notice, another notice was published which gave a list of properties proposed to be acquired under the scheme and contained a statement of the land in regard to which betterment fees were proposed to be levied.
Premises No. 12, Haldar Lane, were included in the latter category of lands.
In July 1952, proceedings were started for settling the betterment fee to be levied in respect of premises No. 12, Haldar Lane, and a letter was addressed by the Chief Valuer of the Calcutta 367 Improvement Trust to the respondent on November 19, 1952.
This letter shows that the Chief Valuer had not received a reply from the respondent, though his advocate had accepted the assessment of betterment fee of Rs. 15,000 in the Land Committee meeting which had been held on August 7, 1952 and confirmed by the Board on August 30, 1952.
On November 19, 1952, however, the respondent recorded in writing that he accepted the said assessment.
The respondent 's case before 'he learned trial Judge was that since betterment fee had been levied by the Board in respect of the suit premises and had been accepted by him, section 30(c) of the Act applied to the present suits.
Section 30(c) provides that "nothing in the Act shall apply to any land which is required for carrying out any of the provisions of the Calcutta Improvement Act, 191 1.
" That is how the respondent sought to repel the application of section 5 of the Act and the exclusive jurisdiction of the Controller to deal with ejectment proceedings in respect of thika tenants ' holdings.
The learned trial Judge held that the plots constituting the land in the six respective suits did not attract the provisions of section 30(c) of the Act, and so, he upheld the preliminary objection raised by the appellants and came to the conclusion that the suits filed by the respondent on the original side of the Calcutta High Court were incompetent and could not be entertained.
In the result, the said suits were ordered to be dismissed with costs.
The respondent challenged these decrees by preferring six appeals before a Division Bench of the High Court.
The learned Judges who heard these appeals have delivered separate, but concurring, judgments and have upheld the respondent 's argument that the land in suits attracted the provisions of section 30(c) of the Act, with the result that the preliminary objection raised by the appellants has been rejected.
Once the preliminary objection was rejected, it was plain that no other point survived, because the appellants had no defence to make on the merits of the respondent 's claim.
That is why the appeals were allowed and decrees, for possession were passed in favour of the respondent.
The claim made by the respondent in respect of arrears of round rent and municipal taxes was also allowed.
It is against these decrees that the appellants have come to this Court with certificates granted by the High Court; and so, the only question which arises for our decision is whether the Division Bench was right in holding that section 30(c) of the Act applied to the present suits.
The answer to this Question depends on a fair construction of the provision prescribed by section 30(c).
Before dealing with this question, it is necessary to refer to the material provisions of the Act.
The Act was passed in 1949 with the object of making better provision relating to the law of landlord and tenant in respect of thika tenancies in Calcutta.
Section 2(5) in Chapter 1 defines a "thika tenant" as meaning any person who holds, whether under a written lease or otherwise, land under another person, and is or but for a special contract would be liable 368 to pay rent, at a monthly or at any other periodical rate, for that land to that another person and has erected or acquired by purchase or gift any structure on such land for a residential, manufacturing or business purpose and includes the successors in interest (if such person.
Sub clauses (a), (b) and (c) of this definition exclude from its purview certain other categories of persons, but we are not concerned with these categories of persons in the present appeals.
It is common ground that the appellants are thika tenants in respect of the plots in their possession.
Chapter 11 of the Act deals with incidents of thika tenancies.
Broadly stated, the object of the Act is to afford special protection to the thika tenants and several provisions have been enacted by the Act to carry out this object.
Section 3 specifies the grounds on which alone a thika tenant may be evicted.
Section 4 prescribes a notice before ejectment proceedings can be taken against a thika tenant; and section 5 provides for proceedings for ejectment.
The important feature of the provisions contained in section 5(1) is that the application for ejectment of a thika tenant has to be made to the Controller in the prescribed manner.
The "controller" is defined by section 2(2) as meaning an officer appointed as such by the State Government for an area to which the Act extends and includes officers of another category therein described.
The remaining provisions of Ch.
11 deal with the procedure which has to be followed by the Controller in dealing with applications for ejectment of thika tenants and make other incidental provisions in that behalf.
The policy of the Act to afford protection to the thika tenants is writ large in all these provisions.
Chapter III contains provisions as to rent of thika tenancies.
Chapter IV deals with appeals and certain special procedures.
Section 27(1), for instance, provides for appeals to the Chief Judge of the Court of Small Causes of Calcutta and District Judge respectively under clauses (a) and (b).
Section 27(6) provides that an order made under sub section
(4) by the Chief Judge or the District Judge or a person appointed under sub section
(2), as the case may be, or, subject to such order, if any, an order made by the Controller under this Act shall, subject to the provisions of sub section
(5) be final and may be executed by the Controller in the manner provided in the Code of Civil Procedure for the execution of decrees.
It is thus clear that the Act has made special provisions for the enforcement of the rights and liabilities of the thika tenants, has constituted hierarchy of special authorities to deal with claims made by landlords against their thika tenants, either in the first instance or at the appellate stage.
The decisions of these special authorities which become final are assimilated to decrees passed under the Code of Civil Procedure and can be executed in the manner prescribed by 0.21 of the Code.
Section 31 provides that restriction or exclusion of the Act by agreement between a landlord and a thika tenant will be invalid, 369 and will not affect the rights conferred on the thika tenants by the provisions of the Act.
It is in the light of these provisions that we have to construe section 30 of the Act.
Section 30 reads thus: "Nothing in this Act shall apply to (a) Government lands, (b) any land vested in or in the possession of (i) the State Government, (ii) a port authority of a major port, or (iii) a railway administration, or (iv) a local authority, or (c) any land which is required for carrying out any of the provisions of the Calcutta Improvement Act, 1911.
" The perusal of section 301 clearly shows that the provisions of the Act are excluded in regard to lands specified in clauses (a), (b) and (c), so that claims made for ejectment of thika tenants from these lands will not be governed by the provisions of the Act and can be made and entertained in ordinary civil courts of competent jurisdiction.
The question which we have to consider in the present appeals is whether the land which is the subject matter of the six suits is land which is required for carrying out any of the provisions of the Improvement Act.
That takes us to the relevant provisions of the Improvement Act itself.
The Improvement Act was passed in 1911 and has been amended from time to time.
Let us consider broadly the material provisions of this Act, as they stood prior to the amendment of 1955, which would assist us in construing section 30(c) of the Act.
This Act was passed, because it was thought expedient to make provision for the improvement and expansion of Calcutta by opening up congested areas, laying out or altering streets, providing open spaces for purposes of ventilation or recreation, demolishing or constructing buildings, acquiring land for the said purposes ,,]Id for the rehousing of persons of the poorer and working classes displaced by the execution of improvement schemes, and otherwise as hereinafter appearing.
It was further thought expedient to constitute a Board of Trustees and invest it with special powers for carrying out the objects of this Act.
Section 2(1a) of this Act defines a "betterment fee" as the fee prescribed by section 78A in respect of an increase in value of land resulting from the execution of an improvement scheme.
Chapter III of this Act deals with improvement schemes and re housing schemes.
Section 36 provides when general improvement schemes may be framed.
It is only where the conditions specified by clauses (a) & (b) of section 36 are satisfied that general schemes can be framed.
Under this section, the Board has to pass 370 a resolution to the effect that the general improvement scheme should be framed on the ground that the area comprised in the scheme is an unhealthy area and that it was necessary to frame a general improvement scheme in respect of such area.
Section 40 deals with matters which have to be considered while framing improvement schemes.
It provides that when framing an improvement scheme in respect of any area, regard shall be had to (a) the nature and the conditions of neighboring areas and of Calcutta as a whole , (b) the several directions in which the expansion of Calcutta appears likely to take place , and (c) the likelihood of improvement schemes being required for other parts of Calcutta.
Section 41 deals with matters which must be provided for in improvement schemes; it reads thus: "Every improvement scheme shall provide for (a) the acquisition by the Board of any land, in the area comprised in the scheme, which will, in their opinion be required for the execution of the scheme, (b) the laying out or re laying out of the land in the said area; (c) such demolition, alteration or reconstruction of buildings, situated on land which it is proposed to acquire in the said area, as the Board may think necessary; (d) the construction of any buildings which the Board may consider it necessary to erect for any purpose other than sale or hire; (e) the laying out or alteration of streets (including bridges, causeways and culverts), if required; and (f) the leveling, paving, metalling, flagging, channelling, sewering and draining of the said streets, and the provision therein of water, lighting and other sanitary conveniences ordinarily provided in a Municipality.
" Section 42 deals with matters which may be provided for in dealing with improvement schemes.
It is necessary to read this section as well: "Any improvement scheme may provide for (a) the acquisition by the Board of any land, in the area comprised in the scheme which will, in their opinion, be affected by the execution of the scheme , (b) raising, lowering or leveling any land in the area comprised in the scheme; 371 (c) the formation or retention of open spaces .
and (d) any other matters, consistent with this Act, which the Board may think fit." Under section 47, the Board is required to consider objections, representations and statements of dissent received under the relevant provisions of sections 43, 44 and 45; and it provides that as a consequence of considering the said objections, representations and statements of dissent, the Board may either abandon the scheme or apply to the State Government for sanction to the scheme, with such modifications, if any, as the Board may consider necessary.
Section 47(2)(e) lays down that every application submitted under sub section
(1) shall be accompanied by a list of the names of all persons, if any, who have dissented, under section 45, clause (b), from the proposed acquisition of their land or from the proposed recovery of a betterment fee, and a statement of the reasons given for such dissent.
The rest of the Chapter deals with the subsequent stages of the framing of the improvement schemes to which it is unnecessary to refer.
Chapter IV deals with acquisition and disposal of land.
Three sections out of this Chapter are relevant for our purpose.
Section 78 deals with the abandonment of acquisition in consideration of special payment.
Section 78(1) is relevant; it reads thus: "In any case in which the State Government has sanctioned the acquisition of land, in any area comprised in an improvement scheme, which is not required for the execution of the scheme, the owner of the land, or any person having an interest therein, may make an application to the Board, requesting that the acquisition of the land should be abandoned in consideration of the payment by him of a sum to be fixed by the Board in that behalf.
" The other sub sections of section 78 lay down a procedure for dealing with applications made under sub section
With the details of these provisions we are not concerned.
The only point which is relevant for our purpose is that an application for abandonment can be made in respect of land which is not required for the execution of the scheme.
In other words, if it appears that the piece of land which is comprised in the scheme already sanctioned by the Government is in fact not required for the execution of the scheme, an application may be made for abandonment of acquisition in respect of such a land.
The basis for making such an application is that though the land was comprised in the scheme, it is found that it is not required for the execution of the scheme,, That takes us to section 78A which has a bearing on the construction of section 30(c) of the Act.
Section 78A(1) is material for our purpose; it reads thus "When by the making of any improvement scheme, any land in the area comprised in the scheme which is not B(N)3SCI 11 372 required for the execution thereof will, in the opinion of the Board, be increased in value, the Board, in framing the scheme, may in lieu of providing for the acquisition of such land, declare that a betterment fee shall be payable by the owner of the land or any person having an interest therein in respect of the increase in value of the land resulting from the execution of the scheme." Section 78A(2) provides for the determination and calculation of the betterment fee.
The last section in this Chapter is section 81.
It confers power on the Board to dispose of land vested in or acquired by their under this Act.
Section 81(1) lays down that the Board may retain, or may let on hire, lease, sell, exchange or otherwise dispose of any land vested in or acquired by them under this Act.
How this power can be exercised is specified by sub sections (2) and (3) of section 81 Before we part with the Improvement Act, it would be useful to mention that sections 120 to 126 which occur in Ch.
VI of this Act deal with the accounts of the Board.
Section 122 provides for credits to capital account and lays down, inter alia, that all sums, except interest, received by way of special payments for betterment fees in pursuance of sections 78, 78A or 79, shall be credited to the capital account.
Section 123 deals with the question of the application of the capital account, and it proceeds on the basis that the moneys credited to the capital account shall be held by the Board in trust, and by clauses (a) to (h), it specifies the objects or purposes for which the said amount can be applied.
Section 124 refers to items which have to be included in the revenue account; and section 125 requires that like the moneys credited to the capital account, those credited to the revenue account must also be held by the Board in trust, and the same shall be applied for the purposes specified in clauses (a) to (g) of section 125(1).
Let us now revert to the question about the construction of section 30(c) of the Act.
Before answering this question, we would like to recall the material facts which are not in dispute.
The land if question has been included in the boundaries of the area comprised in the scheme.
After the Board framed scheme No. 53, it has issued a notice under section 43(1) of the Improvement Act, and as required by section 43(7)(b), while mentioning the boundaries of the area com prised in the scheme, it has clearly been shown that the laid in question is comprised in the said scheme.
In respect of this land, proceedings have been taken under section 78A of the Improvement Act and betterment fee has been levied and accepted.
Mr. Pathak for the respondent contends that as soon as it is shown that the land in question was comprised in the scheme and in respect of it betterment fee has been levied and accepted, section 30(c) of the Act is attracted.
His argument is that such a land is required for carrying out the provisions of the Improvement Act.
On the 373 other hand, Dr. Barlinge contends that the land in respect of which betterment fee has been levied cannot be said to be required for carrying out any provisions of the Improvement Act, though it may be that the betterment fee would assist the Board in discharging its functions under the Improvement Act.
In deciding the merits of these competing claims, it is necessary to remember that the dispute in the present proceedings is not between the Board on the one hand and the landlord or the thika tenant on the other ', the dispute is between the landlord and the thika tenants, and in the decision of this dispute, the Board is not interested.
Whatever be the decision of the Court in the present dispute will not affect the Board in the discharge of its duties and functions and will have no impact on the scheme as such.
The words used in section 30(c) of the Act are, in a sense, simple enough; but it must be conceded that the problem of their construction is not very easy, and so, we might attempt to resolve this problem by considering what our approach should be in construing the relevant provision.
Normally, the words used in a statute have to be construed in their ordinary meaning; but in many cases, judicial approach finds that the simple device of adopting the ordinary meaning of words does not meet the ends or a fair and a reasonable construction.
Exclusive reliance on the bare dictionary meaning of words may not necessarily assist a proper construction of the statutory provision in which the words occur.
Often enough, in interpreting a statutory provision, it becomes necessary to have regard to the subject matter of the statute and the object which it is intended to achieve.
That is why in deciding the true scope and effect of the relevant words in any statutory provision, the context in which the words occur, the object of the statute in which the provision is included, and the policy underlying the statute assume relevance and become material.
As Halsbury has observed, the words "should be construed in the light of their context rather than what may be either strict etymological sense or their popular meaning apart from that context(1)".
This position is not disputed before us by either party.
There has, however, been a sharp controversy before us on the question as to what is the context to which recourse should be had in interpreting section 30(c).
Mr. Pathak contends that in construing section 30(c) of the Act, the key words are "required for carrying out any of the provisions of the Improvement Act", and he has urged that the task of interpretation of this key clause should he attempted by having re. lard to the context, the object and the policy of the Improvement Act.
In interpreting this clause, the court should ask itself: what is the purpose of the provisions of the Improvement Act which the land is required to serve, before section 30(c) of the Act can be invoked? And in finding an answer to this question, the court must bear in mind the historical evolution of the legal (1) Halabury 's Laws of England Vol.
36, p. 394, para 593.
374 principles relating to the powers and functions of Improvement Boards.
In this connection Mr. Pathak has relied on the decision of the House of Lords in R. H. Galloway vs The Mayor and Commonality of London(1).
In that case a contrast was drawn between the special powers conferred on persons by Parliament for effecting a particular purpose, and those conferred on the Mayor and Commonality of the City of London to make certain public improvements in the City.
It was held that where a company was authorised to take compulsorily the lands of any person for a definite object, it would be restrained by injunction from any attempt to take them for any other object.
On the other hand, where the Mayor and Commonalty of the City of London had been entrusted with powers to make certain public improvements in the City, and for that purpose had been authorised compulsorily to take land, to raise money on the credit of it, and to sell superfleous land to pay off the debt, the Act which gave them those powers did not expressly center on the authorities to acquire more land than was absolutely necessary to effect the desired improvements; nevertheless the material provisions of the said Act ought to be construed favorably to them, and ought to be interpreted to confer on them the power to take lands "for the purposes of the Act", even though they may not be abso lutely necessary for the improvement scheme as such.
In other words, this decision shows that where the Board is entrusted with the work of improving the City and is constituted for that purpose by a statute, its power to acquire lands for the purpose of the improvement scheme would include the power to acquire a land which is comprised in the scheme, though it may not be absolutely necessary for the scheme as such; and in such a case, it would be compe tent to the Board first to acquire the land and then to dispose of it, thereby putting itself in possession of the necessary funds to discharge its functions and obligations.
The same principle has been emphasised by the Privy Council in the Trustees for the Improvement of Calcutta vs Chandra Kanta Ghosh (2).
We have already referred to sections 41 and 42 of the Improvement Act.
Section 41 enumerates matters which must be provided for in the improvement schemes, whereas section 42 deals with matters which may be provided for in the improvement schemes.
Section 42(a) lays down that any improvement scheme may provide for the acquisition by the Board of any land, in the area comprised in the scheme, which will, in their opinion, be affected by the execution of the scheme.
The question which arose before the Privy Council in the case of the Trustees for the Improvement of Calcutta(1) was whether under section 42(a), it was competent to the Board to acquire, for the purpose of recoupment, land which is not required for the execution of the scheme, but the trustees are of opinion that the said land would, by virtue of the scheme, be increased in value.
The (1) [1866] 1 Eng & Ir A.C. 34.
(2) [1919] L.R. 47 I.A. 45.
375 decision of this question depended, inter alia, on the meaning of the word "affected" used in section 42(a).
The argument which was urged before the Privy Council was that in order that land can be acquired by the Board under section 42(a), it must appear that the land falls in the area comprised in the scheme and would be affected by the execution of the scheme.
If the land does not become a part of the scheme itself but remains outside the scheme, it cannot be said to be affected by the scheme; and so, the Board may have no power to acquire it avowedly for the purpose of securing recoupment money.
The Privy Council rejected this contention and held that the Board was empowered to acquire land which is comprised in the scheme and would be competent to sell it and thereby raise funds if it is satisfied that the value of the land will be enhanced by virtue of the scheme.
"There would appear to be nothing", said Lord Parmoor speaking for the Board, "either in the general scheme of the Act or in the special context which is inconsistent with giving the word "affected" its ordinary and normal sense; but it was suggested in the argument on behalf of the respondent that the Act did not authorise the Board to acquire land unless it was either physically affected by the execution of the scheme, or injuriously affected, whether by severance or in some other manner" (p. 54).
In rejecting this argument, Lord Parmoor observed that "in the opinion of their Lordships, none of the suggested limitations to the usual and normal meaning of the word "affected" in section 42 are admissible, and that there is no reason, either in the general purpose of the Act or the special context, that the word should not be construed in its ordinary sense, and that, as so construed, section 42 authorises the acquisition of the land of the respondent, which was inserted in the scheme, because in the opinion of the Board, it would be enhanced in value by its execution".
Section 78 and section 78A which has been inserted in the Improvement Act in 19 3 1, in a sense give statutory recognition to the principle evolved by the Privy Council while interpreting section 42 of the Improvement Act.
Basing himself on this aspect of the matter, Mr. Pathak con tends that where a land is comprised in the improvement scheme originally notified and betterment fee is levied later in respect of it under section 78A, the Board can be deemed to have taken two steps,, it may be said that the Board acquired the land and later, sold it to the owner on the terms and conditions authorised by section 78A. In other words, the argument is that the levy of betterment fee is another way of bringing the land within the purview of the improvement scheme and it is, in fact, an alternative way of acquiring it.
If that is so, section 30(c) which obviously includes lands acquired for the purposes of the scheme, cannot be said to exclude land which is not directly acquired, but is indirectly placed in the same category of lands, because recovery of the recoupment fee is one way of acquiring the land.
It is on these grounds that Mr. Pathak has strenuously contended that the key clause in section 30(c) should receive a liberal 376 construction and the land in question in the present proceedings should be held to be required for carrying out the relevant provisions of the Improvement Act.
On the other hand, Dr. Balinge has emphasised the fact that the section which we are construing occurs in the Thika Tenancy Act and it is the context of this Act as well as the object which it seeks to achieve that are relevant and material.
There is no doubt that the provisions of the Act are intended to serve the purpose of social justice.
The Legislature realised that the relations between the landlord and the tenants in respect of holdings let out to thika tenants under the Act needed to be regulated by statute and it thought that thika tenants deserved some special protection.
The Act is thus a measure which can be described as social welfare measure, and so, the argument is that section 30 which provides for an exception to the material provisions of the Act, should be strictly construed, so that the beneficent purpose of the Act should not be unduly narrowed down or restricted.
In construing section 30(e), it would, therefore, be relevant to remember whether it could not have been the intention of the Legislature to permit a private land holder whose land has not been acquired and does not form part of the improvement scheme, to claim immunity from the application of the relevant provisions of the Act which give protection to the thika tenants; and so, Dr. Barlinge 's contention is that it would be unreasonable to introduce a liberal approach in construing the clause "required for carrying out any of the provisions of the Improvement Act" as suggested by Mr. Pathak.
In our opinion, while construing section 30(c) it would be necessary to bear in mind the context of the Act in which the section occurs.
We have already noticed the broad features of the Act, and the object of the Act to help the thika tenants is writ large in all the material provisions.
In the case of such a statute, if an exception is provided, the provision prescribing the exception and creating a bar to the application of the Act to certain cases must, we think, be strictly construed.
Take the other clauses of section 30: they clearly indicate that it is only lands vested in Government or other special bodies or authorities that are excepted from the application of the Act.
Prima facie, it is not easy to assume that a private land] ,older like the respondent would be within the protection of section 30, because there is no consideration in his case.
as in the case of other authorities or bodies covered by clauses (a) and (b) of section 30, which would justify the exclusion of the Act to 'his case.
That is one aspect of the matter which we cannot ignore.
That takes us to the crux of the problem: can the land in question be said to be required for carrying out any of the provisions of the Improvement Act? It is significant that it is the land which must be required, and not any fee or charges that may be levied against it.
What section 30(c) of the Act seems to require is direct 377 connection between the land as such and the requirements of the provisions of the Improvement Act.
The other ingredient of section 30(c) is that the land must be required for carrying out the provisions of the Improvement Act.
In the context, this second ingredient of the section seems to suggest that the land must be necessary for carrying out the provisions as such of the Improvement Act; in other words, we should be able to say about the land in question that it was necessary for carrying out a particular provision of the Improvement Act.
The third and the last ingredient of s.30(c) is that the necessity must be established for carrying out the provisions of the Improvement Act and not the policy of the said provisions or the object which they are intended to achieve.
Having regard to these ingredients of section 30(c), the question which calls for an answer is it shown that the land in question is necessary to carry out any specific provision of the Improvement Act '? It is difficult to answer this question in favour of the respondent.
It is true that the betterment fee which is levied goes to constitute an important item in the capital account under section 122 of the Improvement Act.
It is also true that the Board 'has the power to levy betterment fee in order that it should secure enough funds to carry out its obligations under the Improvement Act.
Such a power has always vested in the Board and has now been statutorily conferred on it by section 78A.
Under section 81, the Board can acquire more land than is absolutely necessary for the purpose of the scheme as such, and may later dispose of superfluous land.
The existence of these powers cannot be disputed.
But would it be consistent with the fair construction of section 30(c) to hold that because the land in question can be made liable to pay betterment fee and the betterment fee thus realised from the land serves the purpose of section 122 of the Improvement Act, the land itself is required for carrying, out the provisions of section 122? In order that section 30(c) should be applicable, the respondent must point out a specific provision of the Improvement Act for the carrying out of which the land as such is required.
The provisions of section 122 of the Improvement Act do not he help the respondent, because it is not possible to bold that for carrying out the provisions of section 122, the land in question is directly required.
There is another aspect of the question to which we ought to refer Section 78A, like section 78, deals with lands which in terms are not required for the execution of the scheme.
These two sections provide for two categories of lands, both of which were originally comprised in the scheme, but are later found to be not required for the scheme.
Now, when section 78A expressly says that the and in respect of which betterment fee can be levied, is not required for the scheme, it is not easy to accept the argument that such a land is nevertheless required for carrying out the provisions of section 78A.
In construing section 30(c), it is necessary to distinguish between the carrying,, out the provisions of the Improvement Act, and the achieve 378 ment or the accomplishment of the objects of the said provisions.
In one sense, the land in question does serve the purpose of the Improvement scheme, because the betterment fee which is levied on it swells the funds of the Board and the funds are utilised by the Board for the purposes of carrying out the scheme; but the requirement of the land for carrying out the provisions of the Improvement Act which alone can invoke section 30(c), cannot be said to be satisfied by this indirect connection between the land and the general purpose of the Improvement Act.
There is one more aspect of this problem which is not irrelevant.
Betterment fee is levied against a land, because its value is increased as a result of the improvement scheme, and so, section 78A authorises the Board to levy betterment fee presumably on the ground that the Board is justified in recouping itself by such levy in respect of unearned increment in the value of the land of which the land holder gets a benefit.
If the land holder pays betterment fee for such unearned increment in the value of the land, he may apply under section 25 of the Act for enhancing the rent payable by the thika tenants to him.
But there appears to be no reason why a landlord, the value of whose land has increased by the improvement scheme introduced in the area in which his land is situated, should get the additional benefit of exemption from the application of the provisions of the Act which give protection to the tenants.
Having carefully considered the question of construing s.30(c), we have come to the conclusion that the words used in section 30(c) do not justify the conclusion that a private landholder is intended to be equated with Government or with the other special bodies or authorities whose lands are exempted from the operation of the Act by section 30.
We do not think that the Legislature intended that the provisions of the Act should cease to apply to all lands which ore comprised in the scheme, because such a provision would appear to be inconsistent with the categories of cases covered by clauses (a) & (b) of section 30.
Besides, if that was the intention of the Legislature in enacting section 30(c), it would have been easy for the Legislature to say that lands comprised in the improvement schemes should be exempted from the application of the Act.
Section 30, as we already emphasised, provides for an exception to the application of the beneficent provisions of the Act, and it would, we think.
not be unreasonable to bold that even if section 30(c) is reasonably capable of the construction for which Mr. Pathak contends, we should prefer the alternative construction which is also reasonably possible.
In construing the provisions which provide for exceptions to the applicability of beneficent legislation, if two constructions are reasonably possible, the Court would be justified in preferring that construction which helps to carry out the beneficent purpose of the Act and does not unduly expand the area or the scope of the exception.
Therefore, we are satisfied that the Court of Appeal was in error in 379 reversing the conclusion of the trial Judge that the present suits filed on the original side of the Calcutta High Court were incompetent.
There is, however, one more point to which we ought to refer before we part with these appeals.
Both the learned Judges in the Court of Appeal have observed that if section 30(c) is held not to apply to the land in question on the ground that it is not required for carrying out any of the provisions of the Improvement Act, section 30(c) would, in substance, become redundant.
The argument which was thus urged before the Court of Appeal and has been accepted by it.
assumes that the Board is a local authority within the meaning of 30(b)(iv) and as such, the land which has vested in the Board is already excepted from the operation of the Act by the said provision; and that means that the lands acquired by the Board under the provisions of the Improvement Act have already been provided for by section 30(b)(iv).
If that is so, there would be no cases to which section 30(c) can apply.
Since this point arises incidentally in construing section 30(c), we do not propose to decide in the present appeals whether the Board is a local authority within the meaning of section 30(b)(iv).
In dealing with this particular argument, however, we are prepared to assume that the Board is such a local authority.
Even so, it is possible to hold that section 30(c) does not become redundant, because though section 30(b)(iv) may include lands acquired by the Board, there may still be some other lands which are not acquired by the Board but which, nevertheless, may be required for carrying out some provisions of the Improvement Act.
Take, for instance, section 42 of the Improvement Act.
Section 42(b) lays down that any improvement scheme may provide for raising, lowering, or levelling any land in the area comprised in the scheme.
Section 42(c) provides for the formation and retention of open spaces.
Similar provisions are made by section 35C(1)(i) and (j) as introduced by the Amending Act 32 of 1955.
It is possible to take the view that the lands required for the purposes specified in these provisions of section 42 or section 35C of the Improvement Act are required within the meaning of section 30(c) of the Act, though they may not have been acquired.
But apart from this consideration, the argument that section 30(c) would become redundant cannot, we think, be treated as decisive, because it is not unknown that the Legislature sometimes makes provisions out of abundant caution.
When section 30(c) was enacted in 1949, the Legislature may have thought that in order to avoid any doubt, dispute or difficulty in regard to the question as to whether the Board would be a local, authority or not, it would be better to make a specific provision in respect of lands which are acquired by the Board as well as those which would be required for the purpose of carrying out the provisions of the Improvement Act.
It is true that the lands which are required within the meaning of section 30(c) would include lands which are actually acquired as well as those which might not have been acquired but are, nevertheless, required for carrying out the provisions of the Improvement Act.
But having specified respective 380 authorities or bodies in clause (a) & (b) of section 30, the Legislature may have thought that it would be better to refer to the Improvement Act and lands required for carrying out its provisions, specifically and expressly.
Having regard to the considerations on which our interpretation of section 30(c) is based, we are not prepared to attach undue significance to the argument based on the assumption that the Board is a local authority within the meaning of section 30(b)(iv) and that would make the provisions of section 30(c) either superfluous or would deprive the said provision of any significance or importance.
The result is, the appeals are allowed, the decrees passed by the Division Bench are set aside and those of the trial Judge restored with costs throughout.
Appeals allowed.
| The appellant was a private limited company carrying on business mainly as building contractors in the State of Orissa.
It was assessed to sales tax under the provisions of the Orissa Sales Tax Act, 1947 and made payments towards the tax assessed.
Subsequently on the basis of the decision of this Court in State of Madras vs Gannon Dunkerley & Co. 119591 S.C.R. 379, the appellant filed a writ petition in the High Court challenging the said assessments.
The High Court quashed the assessments and directed refund of that portion of the tax which was not barred by limitation on the date of filing the application The appellant thereupon filed an application before the Sales Tax Officer for refund of the amount payable to him in view of the said decision.
The Sales Tax Officer rejected the, application on the ground that it was made by only one of the directors.
The Commissioner of Sales Tax in A revision filed against the said order set aside the order of the Sales Tax Officer and held that the appellant was entitled to the refund applied for and directed the said officer to issue refund payment orders as early as possible.
Subsequently the Commissioner issued a notice to the appellant under r. 83 of the Orissa Sales Tax Rules, 1947 calling upon it to show cause why the order earlier passed by him should not be reviewed.
The Commissioner then reviewed his.
previous orders and held that the appellant would be entitled to refund of the taxes paid subject to the disallowances made in his order.
The appellant appealed to this Court by special leave.
The question for consideration was whether the Commissioner 's Order in review was a proper order under r. 83.
HELD: Rule 83 provides a summary remedy within a narrow compass.
The jurisdiction of the Commissioner under this rule is a limited one and is confined only to the correction of arithmetical or clerical mistakes or 'errors apparent on the face of the 'record arising or occurring from accidental slip or.
omission in an order passed by him.
However widely the said expressions are construed they cannot countenance a reargument on merits on questions of fact or law, or permit a party to raise new arguments which he has not advanced in the first instance.
B] In the present case the Commissioner reversed his previous order which was passed on merits mainly on two grounds : (i) that the application for refund in respect of certain amounts was barred by limitation , and (ii) the assessee was not entitled to a refund of the amounts paid before the assessment orders were made on the grounds that the said amounts were not the subject matter of the appeals wherein the assessments were set aside.
Both the question of limitation as well as the question of construction of the appellate orders and the impact of those orders on the amounts paid towards tax before the assessments were arguable questions of fact and law.
The Department should have raised the said questions before the Commissioner at the time he first made the 100 order directing refund of the ammounts claimed by the assessee.
The wrong conclusion if any arrived at by the Commissioner in his earlier order, because of the fact that the said two arguments were not advanced before him, cannot be said to be error on the face of the record arising or accruing from an accidental slip or omission.
The errors if any arose because the Department did not raise those points before the Commissioner.
They were also errors not apparent on the face of the record for the decision depended upon consideration of arguable questions of limitation and construction of documents.
Indeed the Commissioner reheard the argument and came to a conclusion different from that which he arrived at on the earlier occasion.
That is not permissible under 83 of the Rules.
[104 E 105 A]
|
l Appeals Nos.
1477 to 1479 of 1968.
Appeals from the judgment and order dated November 30, 1964 of the Andhra Pradesh High Court in Case Referred No. 49 of 1962.
S.T. Desai and K. Jayaram, for the appellant (in all the appeals).
D.Narsaraju, G. C. Sharma, R. N. Sachthey and B. D. Sharma, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought by certificate from the judgment of the Andhra Pradesh High Court, dated 30th November, 1964 in Reference Case No. 49 of 1962.
N. V. Rangarao, the father of the appellant, was the holder of an impartible estate called the "Munagala Estate" in the Krishna District in the State of Andhra Pradesh.
This estate was abolished under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, and compensation under ' section 45 of the Act was paid severally to the appellant, his father and his brothers.
Other properties belonging to the joint family of the appellant, his father and brothers were also partitioned between them from time to time.
The assets forming the subject of reference to the High Court consisted of investments made from the compensation amount received by the appellant in securities, shares etc.
and also other assets such as deposits in Banks.
The appellant filed returns for the assessment years 1957 58, 1958 59 and 1959 60 in the status of a Hindu Undivided Family.
The appellant 's family during the material time consisted of himself, his wife and his two minor daughters and there was no other male member.
The appellant claimed to be assessed in the status of a Hindu Undivided Family inasmuch as the wealth returned consisted of ancestral property received or deemed to have been received by him on partition with his father and brothers.
The Wealth Tax Officer did not accept the contention of the appellant and assessed him as an individual for the assessment years 1957 58, 1958 59 and 1959 60.
On appeal to the Appellate Assistant Commissioner of Wealth Tax the finding that he must be assessed as an individual was confirmed.
L 11 Sup.
CI/69 7 884 The Income Tax Appellate Tribunal however on appeal by the appellant held that he should be assessed in the status of a Hindu Undivided Family.
Thereupon, the Commissioner of Wealth Tax applied to the Tribunal to state a case to the High Court under section 27(1) of the Wealth Tax Act (Act No. 27 of 1957) (hereinafter called the Act).
The Tribunal accordingly referred the following question of law for the opinion of the High Court : "Whether the status of the assessee was rightly determined as Hindu Undivided Family ?" The High Court disagreed with the view of the Appellate Tri bunal and hold that as the appellant 's family did not have any other male coparcener all the assets forming the subject matter of the returns filed by the appellant belonged to him as an individual and not to a Hindu Undivided Family.
The High Court answered the question in favour of the appellant and against the Commissioner of Wealth Tax.
It is necessary at this stage to set out the relevant provisions of the Act as they stood at the material time : "Section 2 : In this Act, unless the context otherwise requires (e)"assets" includes property of every description, movable or immovable, but does not include (i) agricultural land and growing crops, grass or standing trees on such land; (ii) any building owned or occupied by a cultivator or receiver of rent or revenue out of agricultural land (iii)animals; (ix)a right to any annuity in any case of where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant; (v)any interest in property where the interest is available to an assessee for a period not exceeding six years; (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, 885 belonging to the assesses 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 owed by the assesses on the valuation date other than, (i)debts which under section 6 are not to be taken into account; and (ii)debts which are secured on, or which have been incurred in relation to, any asset in respect of which wealth tax is not payable under this Act.
Section 3 Charge of Wealth tax Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as wealth tax) in respect of every individual, Hindu Undivided Family and company at the rate or rates specified in the Schedule.
Section 5 : Exemption in respect of certain assets: (i)Wealth tax shall not be payable by an assesses in respect of the following assets and such assets shall not be included in the net wealth of the assessee (ii)the interest of the assessee in the coparcenary property of any Hindu Undivided Family of which he is a member".
Under section 3 of the Wealth Tax Act not a Hindu coparcenary but a Hindu Undivided Family is one of the assessable legal en tities.
A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters.
A Hindu coparcenary is a much narrower body than the Hindu joint family; it includes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grand sons and great grand sons of the holder of the joint property for the time being.
In Kalyanji Vithaldas vs Commissioner of Income Tax,(1) Sir George Rankin observed : "The phrase "Hindu Undivided Family" is used in the statute with reference, not to one school only of (1) 886 Hindu law, but to all schools; and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the words "Hindu co parcenary", all the more that it is not possible to say on the face of the Act that no female can be a member".
The first question involved in this case is whether the status of the appellant was that of a Hindu undivided family consisting of himself, his wife and his daughters.
In our opinion, there is no warrant for the contention of the respondent that there must be at least two male members to form a Hindu Undivided Family as a taxable unit.
The expression "Hindu Undivided Family" in the Wealth Tax Act is used in the sense in which a Hindu joint family is understood in the personal law of Hindus.
Under the Hindu system of law a joint family may consist of a single male member and his wife and daughters and there is nothing in the scheme of the Wealth Tax Act to suggest that a Hindu Undivided Family as an assessable unit must consist of at least two male members.
The next question is whether the assets which came to the share of the appellant on partition ceased to bear the character of joint family properties and became the individual property in his hands.
In this connection, a distinction must be drawn between two classes of cases where an assesses, is sought to be assessed in respect of ancestral property held by him : (1) where property not originally joint is received by the assessee and the question has to be asked whether it has acquired the character of a joint family property in the hands of the assessee and (2) where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and the question required to be considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into absolute property of the assessee.
In Kalyanjis(1) case there were six appeals presented before the Judicial Committee by six partners of the firm of M/s. Moolji Sicka and Co., viz., Moolji, Purshottam, Kalyanji, Chaturbhuj, Kanji and Sewdas.
Moolji, Purshottam and Kalyanji each had a son or sons from whom he was not divided.
It was found by the appellate tribunal that the capital supplied by them to the partnership business belonged to them in their individual capacities and was their self acquired property.
Hence the income of the firm which had to be assessed to super tax was the separate income of each of these partners.
Chaturbhuj had a wife and daughter but no son.
Kanji and Sewdas, sons, of Moolji, were married men but neither had a son.
It was found by the appellate tribunal that Chaturbhuj Kanji and Sewdas had (1) 887 received by gift from Moolji their respective share capital in the firm, that the, share capital belonged to them in their individual capacities and was self acquired.
The question at issue was whether the existence of a son and a wife or a wife and a daughter made the income of the partners the income of the Hindu Undivided Family rather than the income of the individual partner.
The Judicial Committee held that though the income was from an ancestral source, the fact that each partner had a wife or daughter did not make that income from ancestral source income of the Hindu Undivided Family of the partner, his wife and daughter.
Different considerations would be applicable, where property already impressed with the character of joint family property comes into the hands of a single coparcener.
The question to be asked in such a case is whether the property retains the character of joint family property or whether it sheds the character of joint family property and becomes the absolute property of the single coparcener.
In Commissioner of Income Tax vs Gomedalli Lakshminarayan,(1) the property was ancestral in the hands of the father and the son had acquired an interest in it by birth.
There was a subsisting Hindu Undivided Family during 'the life time of the father and that family did not come to an end on his death.
On these facts, the Bombay High Court held that the income received from the property was liable to super tax as the income of the Hindu Undivided Family in the hands of the son who was the sole surviving male member of the Hindu Undivided Family in the year of assessment.
The reasoning was that the property from which income accrued originally belonged to a Hindu Undivided Family and on the death of the father it did not cease to be property of that Hindu Undivided Family but continued to belong to that Hindu Undivided Family and its income in the hands of the son was, therefore, assessable as income of the Hindu Undivided Family.
There was a vital distinction between the facts of this case and the facts in Kalyanjis case(1).
This distinction was not noticed by the Judicial Committee in Kalyanji 's case(2) when it observed that the Bombay High Court "arrived too readily at the conclusion that the income was the income of the family".
When Gomedalli 's case(1) was carried on appeal the Judicial Committee once again failed to notice the distinction and wrongly reversed the decision of the Bombay High Court holding that the facts of the case were not materially different from the facts in Kalyanji 's case(2) [See the decision of the Judicial Committee in Commissioner of Income Tax vs A. P. Swamy Gomedalli(3)].
(1)(1935) (2) (3) 888 The recent decision of the Judicial Committee in Attorney General of Ceylon vs AR.
Arunachalam Chettiar(1) is important,.
One Arunachalam Nattukottai Chettiar and his son constituted a joint family governed by the Mitakshara school of Hindu law.
The father and son were domiciled in India and had trading and other interests in India, Ceylon and Far Eastern countries.
The undivided son died in 1934 and Arunachalam became the sole surviving coparcener in the Hindu Undivided Family to which a number of female members belonged.
Arunachalam died in 1938 shortly after the Estate Ordinance No. 1 of 1938 came into operation in Ceylon.
By section 73 of the Ordinance it was provided that property passing on the death of a member of the Hindu Undivided Family was exempt from payment of estate duty.
On a claim to estate duty in respect of Arunachalam 's estate in Ceylon, the Judicial Committee held that Arunachalam was at his death a member of the Hindu Undivided Family, the same undivided family of which his son, when alive, was a member and of which the continuity was preserved after Aruna chalam 's death by adoptions made by the widows of the family and since the undivided Hindu family continued to persist, the property in the hands of Arunachalam as a single coparcener was the property of the Hindu Undivided Family.
The Judicial Committee observed at page 543 of the Report ". . .though it may be correct to speak of him as the owner ', yet it is still correct to describe that which he owns as the joint family property.
For his ownership is such that upon the adoption of a son it assumes a different quality; it is such, too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it.
And these are incidents which arise, notwithstanding his so called ownership, just because the property has been and has not ceased to be joint family property.
Once again their Lordships quote from the judgment of Gratiaen, J. (2) "To my mind it would make a mockery of the undivided family system if this temporary reduction of the coparcenary unit to a single individual were to convert what was previously joint property belonging to an undivided family into the separate property of the surviving coparcener".
To this it may be added that it would not appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single copar (1) (2) (1953) 55 C.N.L.R. 496 501. 889 cener and that in the hands of two or more coparceners".
The Judicial Committee rejected the contention of the appellant that since a single coparcener had full power over the property ,held by him, he must be held to be the absolute owner and observed that fact that he possesses a large power of alienation ". . . appears to their Lordships to be an irrelevant consideration.
Let it be assumed that his power of alienation is unassailable : that means no more than that he has in the circumstances the power to alienate joint family property.
That is what it is until he alienates it and, if he does not alienate it, that is what it remains.
It is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as joint property ' of the undivided family.
"(1) The basis of the decision was that the property which was the joint family property of the Hindu Undivided Family did not cease to be so because of the "temporary reduction of the coparcenary unit to a single individual".
The character of the property, viz., that it was the joint property of a Hindu Undivided Family, remained the same.
The same principle was applied by this Court in Gowali Bud danna 's (2 ) case.
In that case, one Buddappa, his wife, his two unmarried daughters and his unmarried son, Budanna, were members of a Hindu Undivided Family.
Buddappa died and after his death the question arose whether the income of the properties held by Buddanna as the sole surviving coparcener was assessable as the individual income of Buddanna or as the income of the Hindu Undivided Family.
It was held by this Court that since the property which came into the hands of Buddanna as the.
sole surviving coparcener was originally joint family property, it did not cease to belong to the joint family and income from it was assessable in the hands of Buddanna as income of the Hindu Undivided Family.
In the course of the judgment Shah, J. speaking for the Court examined the decision of the Judicial Committee in Kalyanji 's case(") and Gomedalli 's (4 ) and pointed out that there was a clear distinction between the two classes of cases : "It may however be recalled that in Kalyanji Vithaldas 's case(3) the income assessed to tax belonged separately to four out of six partners; of the remaining two (1) (2) (3) (4) 890 it was from an ancestral source, but the fact that each such partner had a wife or daughter did not make that income from an ancestral source income of the undivided family of the partner, his wife and daughter.
In Gomedalli Lakshminarayan 's case(1), the property from which income accrued belonged to a Hindu Undivided Family and the effect of the death of the father, who was a manager, was merely to invest the rights of a manager upon the son.
The income from the property was and continued to remain the income of the undivided family.
This distinction, which had a vital bearing on the issue falling to be determined, was not given effect to by the Judicial Committee in A. P. Swami Gomedalli 's case(1).
At page 302 Shah, J. referred to the decision of the Judicial Committee in Arunachalam 's (2) case and concluded as follows: "Property of a joint family, therefore, does not cease to belong to the family merely because the family is represented by a single coparcener who possesses rights which an owner of property may posesss.
In the case in hand the property which yielded the income originally belonged to a Hindu Undivided Family.
On the death of Budappa, the family which included.
a widow and females, born in the family was represented by Buddanna alone, but the property still continued to belong to that undivided family and income received therefrom was taxable as income of the Hindu undivided family".
In the present case the property which is sought to be taxed in the hands of the appellant originally belonged to the Hindu Undivided Family belonging to the appellant, his father and his brothers.
There were joint family properties of that Hindu Undivided Family when the partition took place between the appellant, his father and his brothers and these properties came to the share of the appellant and the question presented for determination is whether they ceased to bear the character of joint family properties and became the absolute properties of the appellant.
As pointed out by the Judicial Committee in Arunachalam 's case(2) "it is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as "joint property of the undivided family".
Applying this test it is clear that, though in the absence of male issue the dividing coparcener may be properly described in a sense as the owner of the properties, that upon the adoption of a son or birth of a son to him, it would assume a different quality.
It con (1) (2) 891 tinues to be ancestral property in his hands as regards his male issue for their rights hid already attached upon it I and the partition only cuts off the claims of the dividing coparceners.
The father and his male issue still remain joint.
The same rule would apply even when a partition had been made before the birth of the male issue or before a son is adopted, for the share which is taken at a partition by one of the coparceners is taken by him as representing his branch.
Again the ownership of the dividing coparcener is such "that female members of the family may have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it".
(See Arunachalam 's(1) case).
It is evident that these are the incidents which arise because the properties have been and have not been ceased to be joint family properties.
It is no doubt true that there was a partition between the assessee, his wife and minor daughters on the one hand and his father and brothers on the other hand.
But the effect of partition did not affect the character of these properties which did not cease to be joint family properties in the hands of the appellant, Our conclusion is that when a coparcener having a wife and two minor daughters and no son receives his share of the joint family properties on partition, such property in the hands of the coparcener belongs to the Hindu Undivided Family of himself, his wife and minor daughters and cannot be assessed as his individual property.
It is clear that the present case falls within the ratio of the decision of this Court in Gowali Buddanna 's case (2) and the Appellate Tribunal was right in holding that the status of the respondent was that of a Hindu Undivided Family and not that of an individual.
On behalf of the respondent reference was made to the decision of this Court in T. section Srinivasan vs Commissioner of 'Income Tax(3), and it was contended that the decision proceeded on the basis that property received by the coparcener on partition cannot be regarded as property of a Hindu Undivided Family if he has merely a wife or daughter and no son.
It is therefore necessary to examine the material facts and find out what is the ratio decidendi of that case.
The appellant was a member of the Hindu Undivided Family with his father and brothers.
As a result of partial partition of properties belonging to the Hindu Undivided Family the appellant received certain shares and with tsese shares as nucleus he acquired house properties, shares and deposits.
His first son was born on 11 th December, 1952 and it was common ground that the conception of the child must have taken place some time in March, 1952.
For the assessment year 1953 54 the relevant accounting year being the financial year 1st April 1952 to 31st March, 1953, the (1) (2) (3) 8 92 appellant claimed that the income from the assets should be assessed in the hands of the Hindu Undivided Family consisting of himself and his son which, according to him, had come into existence in or about March, 1952 when the son was conceived.
The Income Tax Officer recognised the Hindu Undivided Family only from the date of the birth of the son, viz. 11th December, 1952 and assessed the income till 11th December, 1952 in the hands of the appellant as an individual.
The Appellate Assistant Commissioner and the Tribunal upheld this view on appeal.
Before the High Court the question debated was whether the Hindu Undivided Family came into existence in or about March 1952 when the son was conceived and whether the assesses could be assessed in the status of an individual for any part of the relevant accounting year.
, The question was answered against the assessee by the High Court.
The assessee appealed to this Court and the contention of the appellant was that according to the doctrine of Hindu law a son conceived is in the same position as a son actually in existence.
The argument was rejected by this Court which held that the Hindu Undivided Family did not come into existence on the conception of the son as claimed by the appellant, but came into being when the son was actually born.
It was suggested on behalf of the respondent that the decision of this case must be taken to be implicitly, if not explicitly that there was no Hindu Undivided Family prior to the date of the birth of the son.
But we do not think that any such implication can be raised.
The case of the appellant throughout the course of the proceedings was that the Hindu Undivided Family came into existence for the first time in or about March, 1952 when the son was conceived and it was not his case at any time that a Hindu Undivided Family was in existence prior to the conception of the son.
Indeed, it was common ground between the parties that there was no Hindu Undivided Family in existence prior to the conception of the son.
The only dispute was whether the Hindu Undivided Family came into existence for the first time when the son was conceived as claimed by the assessee or whether it came into existence when the son was born as claimed by the Income Tax Department.
The appellant relied on the doctrine of Hindu law that the son conceived is in the same position as the son born and the respondent contended that this doctrine was inapplicable.
That was the only question raised before this Court which it was called upon to decide and which in fact it decided.
The question whether there was in any event even without a son conceived or born, a Hindu Undivided Family consisting of the appellant and his wife and whether the properties received on partition belonged to that Hindu Undivided Family was neither raised nor argued before this Court which had no occasion to consider it.
The decision of T. section Srini 893 vasan 's case(1) has therefore no bearing on the question now presented for determination in the present case.
For the reasons already.expressed we hold that the status of the appellant was rightly determined as that of a Hindu Un divided Family by the Income Tax Appellate Tribunal and the question of law referred to the High Court must be answered ill the affirmative and against the Commissioner of Wealth Tax.
These appeals are accordingly allowed with costs.
One hearing fee.
| Under section 33(1) of the Representation of the People Act, 1951, each nomination paper should be "subscribed" by a proposer and a seconder.
Where the proposer and the seconder of a nomination paper (as in the present case) are illiterate and so place thumb marks instead of signatures and those thumb marks are not attested, the nomination paper is invalid as attestation in the prescribed manner in such a case is necessary because of rule 2(2) of the Representation of the People (Conduct of Elections and Election Petitions) Rules, 1951, which requires it.
Signing, whenever signature is necessary, must be in strict accordance with the requirements of the Act and where the signature cannot be written it must be authorised in the manner prescribed by the Rules.
62 482 Attestation is not a more technical or unsubstantial requirement within the meaning of section 36(4) of the Act and cannot be dispensed with.
The attestation and the satisfaction must exist at the presentation stage and a total omission of such an essential feature cannot be subsequently validated at the scrutiny stage any more than the omission of a candidate to sign at all could have been.
Section 36 of the Act is mandatory and enjoins the Returning officer to refuse any nomination when there has been "any failure to comply with any of the provisions of section 33."
|
eview Petition Nos.
597 to 60 1 of 1987.
IN C.A. Nos, 3195/79, 4731 32/84, SLP No. 10108/80 and C.A.No. 793/84.
818 WITH C.A. Nos. 1313 & 388/81, SLPNo.
36/80, W.P. No. 192/77, SLP No. 404 1/81 and C.A. No. 2269/80.
A.K. Ganguli, K. Swamy and P. Parmeshwaran for the Petitioners.
F.S. Nariman, Anil B. Diwan, R.K. Lukose, K.R. Nambir, A.N. Haksar, D.N. Mishra and P.K. Ram for the Respondent.
The Order of the Court was delivered by PATHAK, CJ.
After hearing learned counsel for the parties briefly, we are satisfied that the judgment and order dated 20 December, 1986 of which review is sought, should be recalled and the cases be heard again on the merits.
It appears to us prima facie that in respect of certain items an inconsistency is present in the impugned judgment when regard is had to the law laid down by this Court in Union of India vs Bombay Tyres International Ltd., ; Inasmuch as the cases are being re opened, we refrain from expressing any opinion at this stage on the merits of the points raised in the cases.
Objection was taken by the respondent manufacturers to the Review Petitions on the ground that the finality of the judgment should be maintained and should not be disturbed lightly.
In our opinion, the points raised by the petitioners are of substantial public importance, and therefore call for recon sideration.
Accordingly, we allow the Review Petitions, and recall the judgment and order dated 20 December, 1986 and restore the cases to their original number and direct that they be listed again for fresh consideration.
There is no order as to costs.
N.P. V Petitions allowed.
| The petitioners revenue filed petitions for review of the judgment and order dated December 20, 1986 passed by this Court.
The respondent manufacturers objected to the same on the ground that finality of the judgment should be maintained and not disturbed lightly.
Allowing the Review petitions, this Court, HELD: Prima facie an inconsistency is present in the judgment in respect of certain items when regard is had to the law laid down by this Court in Union of India vs Bombay Tyres International Limited, ; Besides, the points raised by the petitioners are of substantial public importance and call for reconsideration [818D] Accordingly, the judgment and order dated December 20, 1986 are recalled and the cases directed to be listed again for fresh consideration.
[818D] Union of India vs Bombay Tyres International Limited, ; relied on.
|
Civil Appeal No. 94 of 1959.
Appeal by special leave from the judgment and decree dated May 7, 1957, of the Punjab High Court (Circuit Bench) at Delhi in Civil Revision Application No. 144 D of 1957.
Bishan Narain R. Mahalingier and B. C. Misra for the appellants.
935 Gurbachan Singh and Harbans Singh, for the respondent.
December 5.
The Judgment of Sinha, C.J., Hidayatullah and Shah, JJ., was delivered by Hidayatullah, J. Kapur, J. delivered a separate judgment.
HIDAYATULLAH, J.
The appellants (in this appeal by special leave) are the sons of one Gauri Shankar, who owned a bungalow known as 5, Haily Road, New Delhi.
This bungalow was given to the respondent by Gauri Shankar on a monthly rent of Rs. 234 6 0, excluding taxes.
The suit, out of which this appeal arises, was brought by the appellants against the respondent, Rao Girdhari Lal Chowdhury, for his eviction on the ground (among others) that he had sub let a portion of the bungalow after the commencement of the Delhi and Ajmer Rent Control Act, 1952 (38 of 1952) to one, Dr. Mohani Jain, without obtaining the consent in writing of the landlord, as required by section 13(1)(b)(i) of the Act.
The defence was that the original contract of tenancy was entered into sometime in 1940 and a term in the contract gave the tenant right to sub let.
It was alleged that a letter written by the tenant which embodied the terms of the tenancy was in the possession of the landlord and a demand was made for its production.
The case of the tenant was that the sub tenancy commenced in the year 1951, that is to say, before the passing of the Act of 1952, and the tenant was not required to obtain the written consent of the landlord to sublet Admittedly, in this case, no written consent was proved.
We need not mention the other allegations and counter allegations which are usual in proceedings between landlords and tenants, the most important of them being about the arrears of rent, which the tenant under permission of the Court ultimately deposited in Court.
936 The issue on which the decisions below have differed was framed by the Sub Judge, First Class, Delhi, in the following terms: "Did the plaintiff consent to the sub letting of parts of the demised premises by the defendant ? If so, when and to what effect.
" The trial Judge found that there was no evidence that the landlord was ever consulted before a portion of the bungalow was sublet to Dr. Mohani Jain, and further that the sub tenancy was created after June 9, 1952, the date on which the Act came into force.
In reaching the latter conclusion, the trial Judge made a reference to a dispute between the tenant and Dr. Mohani Jain for fixation of standard rent before the Rent Control authorities.
In those proceedings, Dr. Mohani Jain had alleged that she was living as a sub tenant from the end of 1951, but the tenant had denied this fact.
The proceedings before the Rent Control authorities ended in a compromise, but the admission of the tenant was relied upon to support the conclusion that the sub tenancy commenced after the Act.
The trial Judge decreed the suit.
The decision of the trial Judge was confirmed on appeal by the Additional District Judge, Delhi.
Though Dr. Mohani Jain gave oral evidence in this case that her sub tenancy commenced in December 1951, the Additional District Judge found categorically that the sub tenancy commenced sometime after the coming into force of the Act.
He held that even if Dr. Mohani Jain was living there even from before it was a guest and not as a sub tenant.
Against the order of the Additional District Judge, a revision was filed under section 35 (1) of the Act.
That section reads as follows: "The High Court may, at any time, call for the record of any case under this Act for the purpose of satisfying itself that a decision 937 made therein is according to law and may pass such order in relation thereto as it thinks fit.
" Acting in accordance with a decision of the Punjab High Court as to the ambit of this section, the learned single Judge, who heard the revision application, thought that it was competent for him to reconsider the concurrent findings about the time when the sub tenancy commenced.
He held that Dr. Mohani Jain 's statement showed that the sub tenancy commenced prior to the passing of the Act, and that the landlord 's consent in writing was not necessary.
In reaching this conclusion, the learned Judge was of opinion that all the evidence was not considered by the two Courts below, and that he was entitled, in view of the interpretation placed upon the section above quoted, to go into the matter afresh, and decide the question of fact.
It may be pointed out that while the suit was pending before the Subordinate Judge, an application was made for the production of the letter referred to in the written statement of the tenant, to which a passing reference has already been made.
A letter was produced, and it is exhibit D 1.
That letter does not disclose all the terms of the tenancy and it would appear, therefore, that the terms of the original tenancy have not been proved in this case, and there is no material on which it can be said either way as to whether a right to sublet was conferred upon the tenant.
The defendant did not insist in the Court of first instance that there was yet another letter, and the argument to that effect in this Court cannot be entertained.
In reaching the conclusion that all the evidence pertinent to the issue was not considered, the learned Judge of the High Court stated that Ex.
P 19, which was the petition filed by Dr. Mohani Jain under section 8 of the Act to get the standard rent fixed was not taken into account by the Additional District Judge.
That petition contained an averment 938 that her sub tenancy commenced on December 1, 1951 with a rent of Rs. 100/ per month, and that a cheque for Rs. 1,800/ as advance rent for 18 months was given by her in the name of the daughter of the tenant, because the tenant represented that he had no account in the bank and therefore a cheque should be given in the name of his daughter.
This, the learned Judge felt, adequately supported the statement of Dr. Mohani Jain to the same effect as a witness in this case.
The learned Judge was in error in thinking that exhibit P 19 was not taken into account by the Additional District Judge.
The latter had, in fact, considered exhibit P 19, the petition of Dr. Mohani Jain, before the Rent Control authorities.
exhibit P 20, the reply of the tenant to that petition and Ex.
P 21, the petition of compromise; but he cited Exs.
P 20 and P 21 only.
There is internal evidence to show that exhibit P 19 was, in fact, considered, because after mentioning the two Exhibits, the learned Additional District Judge goes on to say as follows: "The first of these is the written statement of the present appellant which he had filed in a case brought by Dr. Mohani Jain against him for the fixation of fair rent.
There he had completely denied somewhere in the year 1953 that Dr. Mohani Jain was his subtenant and could not sue for fixation of rent.
This was enough to show that right up to the year 1953 the appellant himself did not regard Dr. Mohani Jain as a sub tenant.
" This clearly shows that the learned Additional District Judge was weighing exhibit P 19 as against exhibit P20 and was acting on exhibit P 20, which contained a material admission by the tenant before the present dispute had begun.
The learned single Judge was, therefore, in error in departing from a concurrent finding of fact on a wrong supposition.
939 But the question that arises in this appeal is one deeper than a mere appraisal of the evidence.
It is whether the High Court in the exercise of its revisional power is entitled to re assess the value of the evidence and to substitute its own conclusions of fact in place of those reached by the Court below.
This question requires an examination of the powers of revision conferred on the High Court by section 35 of the Act.
That question is one of common occurrence in Acts dealing with some special kinds of rights and remedies to enforce them.
Section 35 is undoubtedly worded in general terms, but it does not create right to have the case reheard, as was supposed by the learned Judge.
Section 35 follows section 34, where a right of appeal is conferred; but the second sub section of that section says that no second appeal shall lie.
The distinction between an appeal and a revision is a real one.
A right of appeal carries with it a right of rehearing on law as well as fact, unless the statute conferring the right of appeal limits the rehearing in some way as, we find, has been done is second appeals arising under the Code of Civil Procedure.
The power to hear a revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law.
Under section 115 of the Code of Civil Procedure.
the High Court 's power are limited to see whether in a case decided, there has been an assumption of jurisdiction where none existed, or a refusal of jurisdiction where it did, or there has been material irregularity or illegality in the exercise of that jurisdiction.
The right there is confined to jurisdiction and jurisdiction alone.
In other acts, the power is not so limited, and the High Court is enabled to call for the record of a case to satisfy itself that the decision therein is according to law and to pass such orders in relation to the case, as it thinks fit.
The phrase "according to law" refers to the decision as a whole, and is not to be equated to 940 errors of law or of fact simpliciter.
It refers to the overall decision, which must be according to law which it would not be, if there is a miscarriage of justice due to a mistake of law.
The section is thus framed to confer larger powers than the power to correct error of jurisdiction to which section 115 is limited.
But it must not be overlooked that the section in spite of its apparent width of language where it confers a power on the High Court to pass such order as the High Court might think fit is controlled by the opening words, where it says that the High Court may send for the record of the case to satisfy itself that the decision is "according to law".
It stands to reason that if it was considered necessary that there should be a rehearing, a right of appeal would be a more appropriate remedy, but the Act says that there is to be no further appeal.
The section we are dealing with, is almost the same as section 25 of the Provincial Small Cause Courts Act.
That section has been considered by the High Courts in numerous cases and diverse interpretations have been given.
The powers that it is said to confer would make a broad spectrum commencing, at one end, with the view that only substantial errors of law can be corrected under it, and ending, at the other with a power of interference a little better than what an appeal gives.
It is useless to discuss those cases in some of which the observations were probably made under compulsion of certain unusual facts.
It is sufficient to say that we consider that the most accurate exposition of the meaning of such sections is that of Beaumont, C.J. (as he then was) in Bell & Co. Ltd. vs Waman Hemraj (1) where the learned Chief Justice, dealing with section 25 of the Provincial Small Cause Courts Act, observed: "The object of section 25 is to enable the High Court to see that there has been no miscarriage of justice, that the decision was given according to law.
The section does not enumerate 941 the cases in which the Court may interfere in revision, as does s.115 of the Code of Civil Procedure, and I certainly do not propose to attempt an exhaustive definition of the circumstances which may justify such interference; but instances which readily occur to the mind are cases in which the Court which made the order had no jurisdiction or in which the Court has based its decision on evidence which should not have been admitted, or cases where the unsuccessful party has not been given a proper opportunity of being heard, or the burden of proof has been placed on the wrong shoulders.
Wherever the court comes to the conclusion that the unsuccessful party has not had a proper trial according to law, then the Court can interfere.
But, in my opinion, the Court ought not to interfere merely because it thinks that possibly the Judge who heard the case may have arrived at a conclusion which the High Court would not have arrived at.
" This observation has our full concurrence.
What the learned Chief Justice has said applies to section 35 of the Act, with which we are concerned.
Judged from this point of view, the learned single Judge was not justified in interfering with a plan finding of fact and more so, because he himself proceeded on a wrong assumption.
The appeal thus succeeds, and is allowed with costs.
The order under appeal is set aside, and that of the Additional District Judge restored.
As regards eviction, the respondent has given an undertaking that he would vacate the house on or before April 25, 1962, and this has been accepted by the appellants.
KAPUR J.
I agree that the appeal should be allowed and that the High Court was in error in interfering with the finding of fact, but in my 942 opinion the power of revision under section 35(1) of the Delhi & Ajmer Rent Control Act is not so restricted as was held by Beaumont, C. J., in Bell & Co. Ltd. vs Waman Hemraj(1), a case under section 25 of the Provincial Small Cause Courts Act.
The section provides that the order passed should be in accordance with law and if it does not then the High Court can pass such order as it thinks fit.
The language used in section 35(1) of the Act is almost identical with the words of the proviso to s.75(1) of the Provincial Insolvency Act.
The power under that proviso has been thus commented upon by Mulla in his Law of Insolvency at page 787 of 2nd Edition: "The power given to the High Court by this proviso is very wide.
In the exercise of this power the High Court may set aside any order if it is not `according to law '.
" The power under the Insolvency Act has not, by the Courts in India, been considered to be do restricted as the observations of Beaumont, C. J. in Bell & Co. Ltd. vs Waman Hemraj(1) seem to suggest in regard to section 25 of the Small Cause Courts Act.
This power of interference by the High Court is not, in my opinion, restricted to proper trial according to law or error in regard to onus of proof or proper opportunity of being heard.
It is very much wider than that.
When, in the opinion of the High Court, the decision is erroneous on a question of law which affects the merits of the case or decision is manifestly unjust the High Court is entitled to interfere.
The error may not necessarily be as to the interpretation of a provision of law, it may be in regard to evidence on the record.
Thus when material evidence on the record is ignored or a finding is such that on the evidence taken as a whole no tribunal could, as a matter of legitimate inference arrive at.
It is neither possible nor desirable to enumerate all 943 cases which would fall within the jurisdiction of the High Court under section 35(1) of the Act but it is not to be narrowly interpreted nor to be so widely interpreted as to convert the revision into an appeal on facts.
Appeal allowed.
| In an ejectment suit under the Delhi & Ajmer Rent Control Act, 1952, the trial Judge decreed the suit and on appeal under s.34 of the Act the Additional District Judge confirmed 934 the decision.
The Act did not provide for a second appeal, and under section 35 (1) a revision was filed against the Order of the Additional District Judge The single Judge of the Punjab High Court following a previous decision of the same High Court, was of opinion that in assessment as all the evidence was not considered it was competent for him to reconsider the concurrent findings of the courts below.
The question is whether the High Court in exercise of its revisional powers is entitled to re assess the value of the evidence and to substitute its own conclusions of facts in place of those reached by the courts below.
^ Held, (per Sinha, C. J., Hidayatullah and shah, JJ, that though section 35 of the Delhi and Ajmer Rent Control Act is worded in general terms, but it does not create a right to have the case re heard.
The distinction between an appeal and revision is a real one.
A right to appeal carries with it right of re hearing on law as well as fact, unless the statute conferring the right to appeal limits the re hearing in some way.
The power to hear a revision is generally given to a superior court so that it may satisfy, itself that a particular case decided according to law.
The phrase "according to law" in section 35 of the Act refers to the decision as a whole, and is not to be equated to errors of law or of fact simplicitor.
All that the High Court can see is that these has been no miscarriage of justice and that the decision is according to law in the sense mentioned.
per Kapur, J.
The power under section 35 (1) of the Act of interference by the High Court, is not restricted to a proper trial according to law or error in regard to onus of proof or proper opportunity of being heard.
It is very much wider than that when in the question of the High Court the decision is erroneous on a question of law which affects the merits of the case or decision is manifestly unjust the High Court is entitled to interfere.
Bell and Co. Ltd. vs Waman Hemraj approved.
|
: Special Leave Petition (Crl.) No. 953 of 1979.
From the Judgment and order dated 13 10 1978 of the Punjab and Haryana High Court in Crl.
Revision No. 1021 of 1978.
A. section Sohl and R. C. Kohli for the Petitioner.
The order of the Court was delivered by KRISHNA IYER, J.
This petition for special leave under article 136 is by a truck driver whose lethal hands at the wheel of an heavy automobile has taken the life of a scooterist a deadly spectacle 847 becoming so common these days in our towns and cities.
This is a Case which is more a portent than an event and is symbolic of the callous yet tragic traffic chaos and treacherous unsafety of public transportation the besetting sin of our highways which are more like fatal facilities than means of mobility.
More people die of road accidents than by most diseases, so much so the Indian highways are among the top killers of the country.
What with frequent complaints of the State 's misfeasance in the maintenance of roads in good trim, the absence of public interest litigation to call state transport to order, and the lack of citizens ' tort consciousness, and what with the neglect in legislating into law no fault liability and the induction on the roads of heavy duty vehicles beyond the capabilities of the highways system, Indian Transport is acquiring a menacing reputation which makes travel a tryst with Death.
It looks as if traffic regulations are virtually dead and police checking mostly absent.
By these processes of lawlessness, public roads are now lurking death traps.
The State must rise to the gravity of the situation and provide road safety measures through active police presence beyond frozen indifference, through mobilisation of popular organisations in the field of road safety, frightening publicity for gruesome accidents, and promotion of strict driving licensing and rigorous vehicle invigilation, lest human life should hardly have a chance for highway use.
These strong observations have become imperative because of the escalating statistics of road casualties.
Many dangerous drivers plead in court, with success, that someone else is at fault.
In the present case, such a plea was put forward with a realistic touch but rightly rejected by the courts below.
Parking of heavy vehicles on the wrong side, hurrying past traffic signals on the sly, neglecting to keep to the left of the road, driving vehicles crisscross often in a spirituous state, riding scooters without helmets and with whole families on pillions, thoughtless cycling and pedestrian jay walking with lawless ease, suffocating jam packing of stage carriages and hell driving of mini buses, overloading of trucks with perilous projections and, above all, police man, if any, proving by helpless presence that law is dead in this milieu charged with melee such is the daily, hourly scene of summons by Death to innocent persons who take to the roads, believing in the bonafide of the traffic laws.
We hope that every State in India will take note of the human price of highway neglect, of State transport violations and the like, with a sombre sensitivity and reverence for life.
This, however, does not excuse the accused from his rash driving of a 'blind Leviathan in berserk locomotion '.
If we may adapt the words of Lord Green M.R.: 'It scarcely lies in the mouth of 848 the truck driver who plays with fire to complain of burnt fingers '.
Rashness and negligence are relative concepts, not absolute abstractions.
In our current conditions, the law under sec.
304 A IPC and under the rubric of Negligence, must have due regard to the fatal frequency of rash driving of heavy duty vehicles and of speeding menaces.
Thus viewed, it is fair to apply the rule of res ipsa loquitur, of course, with care.
Conventional defences, except under compelling evidence, must break down before the pragmatic Court and must be given short shrift.
Looked at from this angle, we are convinced that the present case deserves no consideration on the question of conviction.
Counsel for petitioner has contended that a sentence of 2 years ' R.I. is excessive, especially having regard to the fact that the petitioner has a large family to maintain and the proprietor of the truck has left his family in the cold.
When a life has been lost and the circumstances of driving are harsh, no compassion can be shown.
We do not interfere with the sentence, although the owner is often not morally innocent.
Nevertheless, sentencing must have a policy of correction.
This driver, if he has to become a good driver, must have a better training in traffic laws and moral responsibility, with special reference to the potential injury to human life and limb.
Punishment in this 1: area must, therefore, be accompanied by these components.
The State, we hope, will attach a course for better driving together with a livelier sense of responsibility, when the punishment is for driving offences.
Maybe, the State may consider? in cases of men with poor families, occasional parole and reformatory courses on appropriate application, without the rigour of the old rules which are subject to Government discretion.
The victimisation of The family of the convict may well be a reality and is regrettable.
It is a weakness of our jurisprudence that the victims of the crime, and the distress of the dependents of the prisoner, do not attract the attention of the law.
Indeed, victim reparation is still the vanishing point of our criminal law ! This is a deficiency in the system which must be rectified by the Legislature.
We can only draw attention to this matter.
Hopefully, the Welfare State will bestow better thought and action to traffic justice in the light of the observations we have made.
We dismiss the special leave petition.
N.V.K. Petition dismissed.
| The respondents were convicted and sentenced on a charge of contravention of section 16(1)(a)(i) of the Prevention of Food Adulteration Act.
Purporting to follow the decision of this Court in Rajlal Das Pamnani 's case the High Court held that since the quantity of the sample sent to the Public Analyst was below 500 gms.
the respondents were entitled to acquittal and allowed their revision petitions.
The appellant, the Food Inspector who prosecuted the respondents, came in appeal to this Court under article 136 of the Constitution.
It was contended on behalf of the respondents that (1) this was not a fit case for exercise of discretionary powers under article 136 and (2) since at the relevant time the decision of this Court in Pamnani 's case was the law declared by this Court it was that decision which should be Applied to this case.
Allowing the appeal ^ HELD: Acquittal of the respondent by the High Court was erroneous.
[853 D] 1.
In Alassary Mohammed the cases which this Court was considering were really test cases which only invited a final decision of this Court on the interpretation of r. 22.
Most of the counsel appearing for the prosecution did not challenge the order of Acquittal passed by the High Court.
While laying down the law on test cases this Court refused to set aside the order on the ground that the acquittal was not challenged by the prosecution.
[851 G] The present case is not a test case.
Since Alassary Mohammed has decided the point of law against the view of the High Court, the acquittal of the respondents by the High Court was wrong on a point of law.
The question of exercising discretion particularly against economic offenders does not arise.
[851 D] 2.
In Alassary Mohammed 's case this Court, overruling its earlier decision in Rajlal Pamnani 's Case held that the amendment made to r. 22, by introducing r. 22B, was not really an amendment in the strict sense of the term but merely a clarification of what was intended by the original r. 22, that r. 22 was directory and that it was for the Public Analyst to say whether the quantity of sample sent to him was sufficient or not for making necessary analysis.
[850 E] State of Kerala vs Alassary Mohammed, explained.
Whenever a previous decision of this Court is overruled by a larger bench the previous decision is completely wiped out and the court would have to decide all subsequent cases according to the law laid down by the later decision.
|
ivil Appeal No. 871 of 1962.
Appeal by special leave from the judgment and decree dated August 13, 1959, of the Madhya Pradesh High Court in Second Appeal No. 294 of 1959.
S.P. Sinha and M. 1.
Khowaja, for the appellant.
S.T. Desai and A. G. Ratnaparkhi, for the respondent.
This appeal arises from a suit filed by the appellants who are the representatives of residents of Nayapara Ward in particular and of the Muslim community of Raipur in general, in which they claimed an injunction restraining the respondent, Municipal Committee of Raipur, from committing acts of encroachment on their rights and the rights of 301 the Muslim community in holding Urs and other ceremonies on the plot in suit.
It appears that at Raipur, there is a piece of land called "Fazle Karim 's Bada" Khasra No. 649 measuring 4.62 acres.
Inside this Bada, there are three or four Municipal Schools.
The office of the Electric Power House is also located in one corner of the land.
Behind the School, there is a Pakka platform known as "Syed Baba 's Mazar".
Near the Electric Power House, there is a raised earth platform on which there is a flag.
This flag is called "Madar Sahib 's Jhanda".
Surrounding this land.
there is a brick wall which was made by the respondent several years past.
According to the plaint, Urs function is held every year in front of Syed Baba 's Mazar for the last several years.
On or about the 22nd October, 1956, the employees of the respondent started digging foundation at the places A, B, C and D shown on the map attached to the plaint.
These digging operations were commenced under the directions of the respondent.
because the respondent intended to construct another school building on the plot.
The appellants then served a notice on the respondent to desist from carrying on the digging operations on the ground that the property on which the said operations were being carried out, was a part of the wakf property.
When the respondent did not comply with the requisition contained in the said notice, the present suit was filed by the appellants on October 29, 1956.
This suit has been flied under O.1 r. 8 of the Code of Civil Procedure.
The case of the appellants is that the plot of land in suit was old Kabrasthan known as "Chuchu 's Takia", and is a permanent inalienable wakf property.
On this plot are tombs of renowned saints like Syed Baba.
and Madar Sahib 's Jhanda.
On a part of the plot.
every year Urs and other religious functions are performed.
In fact, the land has been registered under the Madhya Pradesh Public Trusts Act (No. 30 of 1951) (hereinafter called the Act) as trust property; as such, the respondent can claim no right or title to the said land.
That is the basis on which the appellants claimed injunction against the respondent.
The respondent disputed this claim.
It was urged in the written statement filed by the respondent that the land was never and could never be wakf property.
There was no tomb on the land.
There are only two so called tombs.
but they have no significance.
The Urs is of very recent origin and it is allowed to be held with the licence of the respondent.
The plot originally, belonged to private persons and had been acquired by the Government in land acquisition proceedings in 1910 11.
The respondent got the said land from the Government in 1922.
In 1932 33.
the Deputy Commissioner fixed rent of the land which is being paid by the respondent eversince.
On this land, the respondent has constructed some schools, and a part of the land which is lying vacant is allowed to be used by the people of the neighbourhood for traffic.
The respondent thus has full right to 302 construct on its own plot of land.
The representative character of the appellants was disputed by the respondent and their right to file the present suit was challenged.
On these pleadings, several.
issues were framed by the learned trial Judge.
They covered the title of appellants, the title of the respondent, and the right of the appellants to file the suit.
The issue with which we are concerned in the present appeal related to the registration of the plot in the register kept under the relevant provisions of the Act and its effect.
The appellants ' contention was that the said registration was conclusive against the respondent and in favour of the appellants ' claim.
This contention was rejected by the trial Judge, with the result that the appellants ' suit was dismissed.
With the findings recorded by the learned trial Judge on the other issues we are not concerned in the present appeal.
The matter then went in appeal.
and the appellate Court confirmed the conclusions recorded by the trial Court and dismissed the appeal.
The appellants challenged the correctness of the said appellate decree by preferring a second appeal in the High Court of Madhya Pradesh.
but the second appeal also failed.
and that has brought the appellants to this Court by special leave.
Thus. it would be noticed that the appellants have failed on the merits of their claim in all the courts below.
and the technical point raised by them that the registration of the plot under the relevant provisions of the Act concluded the matter.
has also been rejected.
It is this last point which has been urged before us by Mr. Sinha on behalf of the appellants.
Before we deal with this point.
however, it would be relevant to mention how the property came to be entered in the register kept under the relevant provisions of the Act.
The record shows that the Masjid Nayapara.
Raipur had been entered in the register as a public trust on June 25.
1954 in Case No. 23XXXiii/7 of 1952 53.
certain properties were entered in the said register in respect of this trust.
In 1956.
Abdul Karim.
Mutawali Masjid Naypara Raipur applied to the SubDivisional Officer.
Raipur alleging that the property now in suit also belonged to the public trust and should be included amongst its properties.
On this application, public notice was issued calling upon persons interested in the property to show cause why it should not be added to the properties of the wakf.
No objection was.
however.
received and on October 23.
the Sub Divisional Officer reported that the poperty be shown against the trust.
The said report was sanctioned by the Registrar.
Public Trusts on April 22.
That is how the property came to be registered as belonging to the public trust.
and it is on this entry that the whole argument of the appellants is based.
In considering the validity of the contention raised by Mr. Sinha before us.
it is necessary to examine broadly the scheme 303 of the Act and the material provisions on which Mr. Sinha relies.
The Act was passed in 1951 to regulate and to make better provision for the administration of public religious and charitable trusts in the State of Madhya Pradesh.
Section 2(4) of the Act defines a "public trust", and section 2(8) defines a "wakf". 'Working trustee ' is defined by section 2(9).
Section 3(1) provides that the Deputy Commissioner shall be the Registrar of public trusts in respect of every public trust; and section 3(2) imposes on the Registrar the obligation to maintain a register of public trusts, and such other books and registers and in such form as may be prescribed.
Section 4(1) deals with the registration of public trusts and in requires that within three months from the date on which the said section comes into force in any area or from the date on which a public trust is created, whichever is later, the working trustee of every public trust shall apply to the Registrar having jurisdiction for the registration of the public trust.
Section 4(3) lays down the particulars which have to be stated by the application which is required to be made under section 4(1).
All these particulars are in relation to the nature of the trust, its properties, the mode of succession to the office of the trustees, and other allied matters.
Section 4(4) empowers the Registrar to decide the merits of the application, while section 4(5) provides for an appeal against his decision which is required to be filed within 30 days of the order.
Mr. Sinha relies on a specific provision contained in section 4(5) which says that subject to the decision in such appeal.
the order of the Registrar under sub section (4) shall be final.
Section 4(6) requires the signing and verification of the application in the manner laid down in the code of Civil Procedure for signing and verifying plaints.
That takes us to section 5 which deals with the enquiry to be held by the Registrar on the application made before him under section 4(1).
Eight points are set down under section 5(1) which the Registrar has to consider.
Section 5(2) lays down that the Registrar shall give in the prescribed manner public notice of the inquiry proposed to be made under sub section (1) and invite all persons interested in the public trust under inquiry to prefer objections, if any, in respect of such trust.
Under section 6, the Registrar has to make his findings on the point specified by section 5(1); and under section 7, the Registrar causes entries to be made in the Register in accordance with his findings.
Section 7(2) naturally lays down that the entries made under section 7(1) shall be final and conclusive.
Section 8(1) allows a civil suit to be filed against the findings of the Registrar within six months from the date of the publication of the notice under section 7(2); such a suit can be filed by a working trustee or a person having interest in a public trust or any property found to be trust property.
Section 9 permits applications to be made for change in the entries recorded in the register.
It will be recalled that the application which was made in 1956 by Abdul Karim was under the provisions of section 9(1).
If an application is made for change in 304 the entries as, far instance, for adding to the list of properties belonging to the trust, a proceeding has to be taken for making the said change and this is prescribed by section 9(2).
Section 9(3) makes the provisions of section 8 applicable to any finding under section 9 as they would apply to a finding under section 6.
These provisions are contained in Chapter II of the Act.
Chapter III deals with the management of trust property; Ch.
IV with the problem of audit; Ch.
V with control; and Ch.
VI contains miscellaneous provisions, including section 35 which confers the rule making power on the State Government.
That, broadly stated, is the nature of the scheme of the Act and the material provisions which fall to be considered in the present appeal.
Mr. Sinha relies on the fact that under section 4(5) of the Act, the decision of the Registrar is made final, subject to the appellate decision, if any; and he also refers to the right of instituting a suit reserved by section 8.
His argument is that if any person who claims interest in the property which is alleged to be trust property fails to satisfy the Registrar about his claim, he can file a suit under section 8(1).
Section 8(1) allows a suit to be filed, subject to the conditions prescribed by it, and the right to file such a suit is given to a working trustee, or a person having interest in a public trust or any property found to be trust property.
The respondent is interested in the property in suit which is found to be trust property, and since it did not avail itself of the right to file a suit within the specified time, the order passed by the Registrar must be held to be final and conclusive against its claim.
If finality does not attach to such an order even after six months have expired within the meaning of section 8(1), then the provision contained in section 4(5) will serve no purpose whatever.
That is the manner in which Mr. Sinha has presented his case before us.
We are not impressed by this argument.
In testing the validity of this argument, we must bear in mind the important fact that the Act is concerned with the registration of public, religious and charitable trusts in the State of Madhya Pradesh, and the enquiry which its relevant provisions contemplate is an enquiry into the question as to whether the trust in question is public or private.
The enquiry permitted by the said provisions does not take within its sweep questions as to whether the property belongs to a private individual and is not the subject matter of any trust at all.
It cannot be ignored that the Registrar who, no doubt, is given the powers of a civil court under section 28 of the Act, holds a kind of summary enquiry and the points which can fall within his jurisdiction are indicated by clauses (i) to (x) of section 4(3).
Therefore, prima facie.
it appears unreasonable to suggest that contested questions of title, such as those which have arisen in the present case, can be said to fall within the enquiry which the Registrar is authorised to hold under section 5 of the Act.
Besides, it is significant that the only persons who are required to file their objections in response to a notice issued by the 305 Registrar on receiving an application made under section 4(1), are persons interested in the public trust not persons who dispute the existence of the trust or who challenge the allegation that any property belongs to the said trust.
It is only persons interested in the public trust, such as beneficiaries or others who claim a right to manage the trust, who can file objections, and it is objections of this character proceeding from persons belonging to this limited class that fall to be considered by the Registrar.
It cannot be said that the respondent falls within this class; and so, it would be idle to contend that it was the duty of the respondent to have filed objections under section 3(2).
It is true, section 8(1) permits a suit to be filed by a person having interest in the public trust or any preperty found to be trust property.
The interest to which this section refers must be read in the light of section 5(2)to be the interest of a beneficiary or the interest of a person who claims the right to maintain the trust or any other interest of a similar character.
It is not the interest which is adverse to the trust set up by a party who does not claim any relation with the trust at all.
That is why we think the finality on which Mr. Sinha 's argument is based cannot avail him against the respondent inasmuch the respondent was not a party to the proceedings and could not have filed any objections in the said proceedings.
Then again, the right to file a suit to which section 8(1) refers is given to persons who are aggrieved by any finding of the Registrar.
Having regard to the fact that the proceedings before the Registrar are in the nature of proceedings before a civil court, it would be illogical to hold that the respondent who was not a party to the proceedings can be said to be aggrieved by the findings of the Registrar.
The normal judicial concept of a person aggrieved by any order necessarily postulates that the said person must be a party to the proceedings in which the order was passed and by which he feels aggrieved.
It is unnecessary to emphasise that it would be plainly unreasonable to assume that though a person is not a party to the proceedings and cannot participate in them by way of filing objections, he would still be bound to file a suit within the period prescribed by section 8(1) if the property in which he claims an exclusive title is held by the Registrar to belong to a public trust.
Similarly, the right to prefer an appeal against the Registrar 's order prescribed by section 4(5) necessarily implies that the person must be a party to the proceedings before the Registrar; otherwise how would he know about the order? Like section 8(1), section 4(5) also seems to be confined in its operation to persons who are before the Registrar, or who could have appeared before the Registrar under section 5(2).
The whole scheme is clear, the Registrar enquires into the question as to whether a trust is private or public, 306 and deals with the points specifically enumerated by section 4(3).
Therefore, we have no hesitation in holding that the courts below were right in coming to the conclusion that the fact that the property now in suit was added to the list of properties belonging to the wakf, cannot affect the respondent 's title to it.
On the merits, all the courts below have rejected the appellants ' case and have upheld the pleas raised by the respondent in defence.
The result is, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The first appellant, who was the Mutawalli of a public trust, filed a representative suit for an injunction restraining the respondent from committing acts of encroachment on the suit property, on the ground that the property was that of the trust and had been so registered by the Registrar of Public Trusts, under the Madhya Pradesh Public Trusts Act, 1951.
The suit was dismissed by the trial court and also on appeal.
In their appeal to the Supreme Court the appellants contended that, since the respondent did not avail itself of the ,right to file a suit within the specified time, the order passed by the Registrar must be held to be final and conclusive against the respondent.
HELD: The fact that the property in suit was added to the list of the properties belonging to the trust, could not affect the respondent 's title to it.
[306 A B] The enquiry which the Act contemplates is an enquiry into the question as to whether a trust is public or private and does not take within its sweep questions as to whether a property belongs to a private individual and is not the subject matter of any trust at all.
The only persons who are required to file their objections in proceedings before the Registrar are persons interested in the public trust not persons who dispute the existence of the trust or who challenge the allegation that any property belongs to the said trust.
Inasmuch as the respondent was not a party to the proceedings and could not have filed any objections in the proceedings the respondent was not bound to file an appeal under section 4(5) of the Act or a suit under section 8(1), challenging order of the Registrar.
Therefore, the finality given to the finding of the Registrar could not be availed of by the appellant as against the respondent.
[304 G; 305 A B, D E]
|
iminal Appeal No.232 of 1967.
Appeal by special leave from the judgment and order dated August 30, 1967 of the Assam and Nagaland High, Court in Criminal Appeal No. 115 of 1964.
K. Rajendra Chaudhuri, for the appellants, Naunit Lal, for the respondent, 611 The Judgment of the Court was delivered by Bhargava, J.
The appellants, Iman Ali and Jogesh Chandra Arjya, were convicted by the Court of Session for an, offence punishable under section 396 of the Indian Penal Code and sentenced to imprisonment for life.
The facts found by the Court of Session for convicting the appellants were that, on the night between 11th and 12th May, 1962, between 1 and 2 a.m., the appellants, along with about 12 or 13 others, committed dacoity in the house of I Tenu Arjya.
At the time of committing the dacoity the dacoits broke open the door of the house with the cross bar of a plough.
Four dacoits, including the two appellants, entered the house, while the remaining persons remained standing outside.
As soon, as the door was broken, Golapi, the wife of Tenu Arjya.
was shot at with a gun by Iman Ali appellant, and then the other appellant Jogesh Chandra Arjya shot Tenu Arjya.
Both Golapi and her husband Tenu Arjya fell down dead.
Thereafter, the dacoits demanded money from Hari Charan Arjya, the son of the two deceased persons.
They took away a sum of Rs. 2,500/ which was kept in a quilt and also removed the gold ear rings, one silver necklace and one waist band from the person of Golapi.
The commission of this offence in the manner described above was held ' by the Sessions Court to be proved on the basis of the evidence given by the prosecution, and, thereupon, finding both the appellants guilty of the offence punishable under section 396, I.P.C., that court sentenced each of these appellants to imprisonment for life.
Iman Ali appellant filed an appeal in the High Court of Assam and Nagaland.
The learned Judges of the High Court, on perusing the judgment, were of the prima facie opinion that, if the conviction of Iman Ali was to be upheld, there was no justification for not awarding to him the sentence of death and, consequently, they issued notice to Iman Ali to show cause why the sentence should not be enhanced.
At the same time, a notice was also issued to, the other appellant Jogesh Chandra Arjya by the learned Judges suo motu to show cause why his sentence should also not be enhanced to sentence of death.
Thereafter, the appeal of Iman Ali was heard and both the appellants were heard in respect of the show cause notices issued to them, Opportunity was, in addition, offered to Jogesh Chandra Arjya to urge whatever could be said on his behalf against his conviction also.
The High Court affirmed the findings of fact of the Court of Session and enhanced the sentence of both these appellants, so that the sentence of rigorous imprisonment for life ",as altered to sentence of death, with the direction that they be hanged by the neck till they are dead.
Both the appellants Sought leave, from the High Court to appeal to this Court, but leave was refused.
Thereupon, both of them sought special leave under Article 136 of the Constitution.
By in order dated 8th December, 1967, this Court ranted special leave limit 612 ed to the question whether, in this case, the enhancement of the sentence from life imprisonment to sentence of death was justified.
Consequently, in this appeal, the only point that falls for determination is whether the order of the High Court enhancing the sentence of the appellants from life imprisonment to death was justified and should be upheld.
Learned counsel for the appellants, in challenging the justification for the order of enhancement of sentence by the High Court, relied on the principle laid down by this Court in Dalip Singh and Others vs State of Punjab (1), which was explained in the following words "In a case of murder, the death sentence should ordinarily be imposed unless the trying Judge for reasons which should normally be recorded considers it proper to award the lesser penalty.
But the discretion is his and if he gives reasons on which a judicial mind could properly be found, an appellate court should not interfere.
The power to enhance a sentence from transportation to death should very rarely be exercised and only for the strongest possible reasons.
It is not enough for an appellate court to say, or think, that if left to itself it would have awarded the greater penalty because the discretion does not belong to the appellate court but to the trial Judge and the only ground on which an appellate court can interfere is that the discretion has been improperly exercised, as for example, where no reasons are given and none can be inferred from the circumstances of the case, or where the facts are so gross that no normal judicial mind would have awarded the lesser penalty.
" It appears to us, however, that, in the present case, this principle is of no assistance to the appellants for challenging the step taken by the High Court.
This Court cautioned the appellate court against interfering if the discretion of the trying Judge is exercised for reasons recorded by him and if it appears from the reasons that he had exercised a judicial mind in not awarding the sentence of death.
In the present case, as mentioned by the High Court and as is apparent from the judgment of the Court of Session, the trial court awarded the sentence of imprisonment for life without giving any reasons at all for adopting that course.
It is true that the appellants were not convicted in the present case for the offence of murder simpliciter under section 302, I.P.C.; but that, in our opinion, is immaterial.
The conviction of the appellants under s ' 396, I.P.C., was not based on constructive liability as members of the gang of dacoits.
There was clear finding by the (1) ; at p. 156. 613 Court of Session which has been upheld by the High Court that each of these appellants committed a cold blooded murder by shooting two inmates of the house simply with the object of facilitating commission of dacoity by them.
Those persons were shot and killed even though they had not even tried to put up any resistance.
The offence under section 396, I.P.C., was therefore, no less heinous than an offence under section 302, I.P.C.
In these circumstances, when the Court of Session gave no reason at all for not awarding the sentence of death and for sentencing them to imprisonment for life only, it cannot be held that the High Court was not justified in interfering with that order.
Learned counsel in this connection referred us to a decision of a Division Bench of the Allahabad High Court in Lal Singh vs Emperor(1), where it was held : "We do not consider that as a general rule a sentence of death should necessarily follow a conviction under section 396, I.P.C., and this Section differs from section 302, I.P.C., in that respect.
The rule is under section 302, that a sentence of death should follow unless reasons are shown for giving a lesser sentence.
No such rule applies to section 396, I.P.C." Again, we do not think that the learned Judges of the Allahabad High Court intended to lay down that, even in cases where a person is convicted for the offence under section 396, I.P.C., and there is clear evidence that he himself had committed a cold blooded murder in committing the dacoity, a sentence of death should not follow.
Clearly, the view expressed was meant to apply to those cases where there could be no definite finding as to which person committed the murder and all the members of the gang are held constructively guilty of the offence punishable under section 396, I.P.C. A principle enunciated for such a situation cannot be applied to a case where there is direct evidence that a particular accused committed the murder himself, as is the finding in the present case.
In these circumstances, the order made by the High Court must be held to be justified and the appeal is dismissed.
G.C. Appeal dismissed.
(1) A.I.R. 1938 Alld.
| The appellants were convicted by the court of sessions for an offence punishable under section 396 of the Indian Penal Code and sentenced to imprisonment for life.
They were held to have shot dead two inmates of a house in which along with others they had gone to commit dacoity.
One of the appellants filed an appeal in the High Court against his conviction.
The High Court thereafter gave notice to both the appellants to show cause why the sentence of imprisonment passed against each of them should not be enhanced to death.
After hearing them the High Court sentenced them both to death.
The order was challenged in this Court and it was urged that the High Court should not have interfered with the discretion of the Sessions Judge in the matter of passing the appropriate sentence and that the considerations which apply to I sentence under section 302 I.P.C. would not apply to a case under section 396 I.P.C. HELD : (i) The offence committed by the appellants was heinous and committed in cold blood with the sole object of committing dacoity.
It was not a case of constructive liability but the appellants had themselves committed the murders and therefore no advantage could be taken of the fact that the conviction was under section 396 and not under section 302.
On the above facts the enhancement of sentence by the High Court from life imprisonment to death was justified especially when the trial court had not given any reasons for awarding the lesser sentence.
In Dalip Singh 's case this Court only cautioned the appellate court against interfering if the discretion of the trying judge is exercised for reasons recorded by him and if it appears from the reasons that he had exercised a judicial mind in not awarding the sentence of death.
[612 F 613B].
Dalip Singh & Ors.
vs State of Punjab ; , 156, explained.
Lal Singh vs Emperor, A.I.R. 1938 Alld.
625, distinguished.
|
Civil Appeal No. 843 of 1984 Appeal by Special leave from the Judgment and Order dated the 23rd September, 1981 of the Madhya Pradesh High Court in Civil Second Appeal No. 10 of 1971.
S.S. Khanduja for the Appellant.
G.D. Gupta and R.N. Poddar for Respondents.
The Order of the Court was delivered by DESAI, J. One Shri Sital Prasad Saxena filed Civil No. 46A of 1969 against (1) Union of India (2) Comptroller and Auditor General of India and (3) Accountant General Madhya Pradesh for a declaration about the status of his post and arrears of salary in respect of the post in which he was entitled to continue.
The suit came up for hearing before the 5th Civil Judge Class II, Gwalior who by his judgment and decree dated July 7, 1969 dismissed the suit.
Plaintiff Sital Prasad Saxena preferred civil appeal No. 36A of 1970 against that judgment and decree of the trial court in the District Court at Gwalior.
The appeal came up for hearing before the learned First Additional District Judge who agreed with the findings recorded by the trial court and accordingly by his judgment and order dated August 4, 1970 dismissed the appeal.
Plaintiff Sital Prasad Saxena preferred second appeal No. 10 of 1971 in the High Court of Madhya Pradesh Jabalpur Bench.
During the pendency of the appeal in the High Court, plaintiff appellant Sital Prasad Saxena expired on February 25, 1976.
One Mahendra Kumar Saxena claiming to be one of the sons of late Sital Prasad Saxena moved an application being I.A. No. 5582 of 1978 under Order XXII, rule 3 of the Code of Civil Procedure for 661 substitution of heirs and legal representatives of the deceased appellant with a view to prosecuting the appeal.
He simultaneously moved another application being I.A. No. 5744 of 1978 under Order XXII rule, 9 CPC requesting the Court that if the appeal has abated for failure to seek substitution within the prescribed period of limitation, the abatement of the appeal may be set aside.
He also moved another application being I.A. No. 5745 of 1978 for seeking condonation of delay under section 5 of the .
A learned Single Judge of the High Court by his order dated January 29, 1981 directed that all the three miscellaneous applications be transmitted to the trial Court for enquiry and report regarding the date of death of Sital Prasad Saxena and knowledge about the pendency of the appeal of the heirs and legal representatives in order to as certain whether the applicant had made out sufficient, cause for condoning the delay which if permitted, would enable the Court to set aside the abatement.
The trial Court after recording the evidence of the parties submitted the report which in terms included a finding that Mahendra Kumar Saxena had knowledge about the pendency of the second appeal before October 7, 1978, the date on which he moved the aforementioned applications.
It appears that on the receipt of the report of the trial Court Mahendra Kumar Saxena and other legal representatives of the deceased appellant move an application being I.A. No. 2722 of 1981 praying for an opportunity to examine another son of the deceased appellant, viz., Shailendra Kumar Saxena.
They also filed objections controverting the finding recorded by the trial Court.
It appears that the Union of India resisted the applications contending that the petitioner has failed to make out sufficient cause for the delay in seeking substitution and therefore no case is made out for condoning the delay and setting aside abatement.
The position adopted by Union of India is a bit surprising for us.
The High Court after minutely examining the rival contentions held that the conclusion reached by the trial Court is such that the learned Judge would not like to take a different view of the matter.
The approach of the High Court suggests that it was exercising revisional jurisdiction while examining the report of the trial Court.
This approach does not commend to us.
Accordingly the learned Judge rejected the various applications thereby declining to condone the delay which alone would permit him to set aside the abatement with 662 the result that appeal was disposed of as having abated.
Hence this appeal by special leave.
We heard Mr. S.S. Khanduja, learned counsel for the appellants and Mr. G.D. Gupta, learned counsel for the respondents Approach to the applications seeking condonation of delay in moving the application for substitution of parties who died during the pendency of civil appeal in the High Court has to be as observed by this Court in Bhagwan Swaroop vs Moolchand and Hans Raj vs Sunder Lal Aggarwal.
In the present case the High Court unfortunately committed an error in rejecting the application for condoning the delay.
It is the High Court which had to satisfy itself that the petitioner made out sufficient cause which prevented him from moving the application for substitution in time and not the trial Court.
The High Court may call for report of the trial Court but then cannot adopt the approach of a court exercising revisional jurisdiction.
It must examine the material collected by the trial Court and come to its own conclusion.
In this case the High Court observed that it was not persuaded to take a view different from the one taken by the trial Court.
This is impermissible.
The second error was that once an appeal is pending in the High Court, the heirs are not expected to keep a constant watch on the continued existence of parties to the appeal before the High Court which has a seat far away from where parties in rural areas may be residing.
And in a traditional rural family the father may not have informed his son about the litigation in which he was involved and was a party.
Let it be recalled what has been said umpteen times that rules of procedure are designed to advance justice and should be so interpreted and not to make them penal statutes for punishing erring parties.
The deceased appellant has left behind him his sons.
It is a moot point whether the father acquainted his son/sons about his litigation for seeking relief in respect of his service.
If this is the nature of litigation, we are not inclined to draw the inference drawn by the trial court that son/sons knew about the pendency of appeal.
Having heard learned counsel on either side we are satisfied that both the trial court as well as the High Court were in error in not condoning the delay in seeking substitution of heirs and legal representatives of the deceased/appellant in time.
Cause for delay as urged 663 appears to us to be sufficient which prevented them from moving the petition for substitution.
We are satisfied that sufficient cause was made for condoning the delay.
Accordingly, we first set aside the order passed in I.A. No. 5745 of 1978 under section 5 of the seeking condonation of delay and grant the same.
We set aside the order disposing of the appeal having abated and set aside the abatement.
We condone the delay in seeking substitution and grant substitution.
Accordingly, the heirs and legal representatives who applied for substitution in place of the deceased appellant are directed to be brought on record.
The appeal succeeds to this extent and is allowed and the orders of the High Court herein above set out are set aside and the matter is remitted to the High Court for disposal in the light of the observations made herein.
Since the matter is an old one the High Court may dispose of it as expeditiously as possible.
There will be no order as to costs.
The appeal is disposed of accordingly.
M.L.A Appeal allowed.
| The appellants and G were convicted of the offence of murder by the Sessions Court on the basis of the evidence of the approver, which it considered reliable, and the confession made by the first appellant which it found to be voluntary and true.
The High Court held that the evidence of the approver as against G was very discrepant and.
unreliable and set aside his conviction but, nevertheless, confirmed the conviction of the appellants.
The appellants appealed to the Supreme Court.
It was found (1) that the statement originally made by the approver as against the second appellant was wholly inconsistent and irreconcilable with the evidence given by him in Court and that the High Court did not consider the question as to whether the approver was a reliable witness at all, (2) that the Magistrate who recorded the confession did not fully comply with the procedure to be adopted to ensure that it was voluntary, (3) that the prosecution story as deposed to by the approver was inconsistent with the material statement in the confession, and (4) that the High Court while deciding whether the confession was voluntary assumed that it was true.
Held, that the conviction of the appellants must be set aside.
The appreciation of an approver 's evidence has to satisfy a double test.
It must show that be is a reliable witness and that his evidence receives sufficient corroboration.
The act of recording confessions under section 164 of the Code of Criminal Procedure is a solemn one and in discharging his duties under the said section the Magistrate must take care to see that the requirements of sub section
(3) Of section 164 are fully satisfied.
When an accused person is produced before the Magistrate by the investigating officer, it is of the utmost importance that the mind of the accused person should be completely freed from any possible influence of the police and he must be sent to jail custody and given adequate time to consider whether he should make a confession at all.
Ordinarily, he should be given at least 24 hours to decide.
Even if a confession is voluntary, it must also be established that it is true and, for that purpose, it is necessary to examine it 123 954 and compare it with the rest of the prosecution evidence and the probabilities of the case.
|
Civil Appeal No. 1415 of 1970.
From the Judgment and Order dated 30 9 69 of the Bombay High Court in S.C.A. No. 1512 of 1967.
V. M. Tarkunde, R. Satish, V. K. Pandita and E. C. Agarwala for the Appellant.
M. C. Bhandare, C. K. Ratnaparkhi and M. N. Shroff for the Respondent.
The Judgment of the Court was delivered by FAZAL ALL J.
This appeal by certificate is directed against a judgment of the Bombay High Court dated 30 9 1969 dismissing the writ petition filed by the appellant against an order of the Commissioner.
The facts of the case lie within a narrow compass and may be stated as follows: Proceedings under Maharashtra Agricultural Lands (Ceiling of Holdings) Maharashtra Act No. XXVII 1961 and (hereinafter to be referred to as the Act) which received the assent of the President on 1050 16 6 1961 were taken against the appellant in order to determine whether the return filed by the appellant under the provisions of the Act was correct or not.
In his return filed before the Deputy Collector, the appellant had shown the total lands to be 370 acres and 34 gunthas.
It was however alleged by the appellant that some time in the year 1956, there was a partition between the appellant and his nephews as a result of which his family got 202 acres of land.
The appellant had sold 51 acres of land to other persons before the Act came into force.
The appellant further alleged that he gave some lands to his adopted son in lieu of the latter 's share.
The adopted son Nemichand thereafter gave 93.25 acres of land to his mother under a civil Court decree.
All these transactions took place some time in the year 1956.
The Collector after examining the return found that the total land owned by the appellant was 118 acres 36 gunthas and the excess was only 4 acres 36 gunthas which could be taken over under the Act.
Against the order of the Deputy Collector, the Commissioner appears to have called for the records and interfered suo moto and after making some enquiry, he held that the land declared by the appellant in his return far exceeded the ceiling limit.
In computing the total lands owned by the appellant, the Commissioner appears to have taken into account even that land which had been given by Nemichand to his mother, the wife of the appellant.
Against this order of Commissioner, the appellant filed a writ petition before the High Court which was dismissed as a result of which an application was filed for grant of certificate for appeal to this Court which was granted.
Hence this Appeal.
The short point taken by Mr. V. M. Tarkunde, learned counsel for the appellant is that under the provisions of the Act, land which was received by his wife from the adopted son was her personal property and could not be included in the ceiling of the appellant and that the Commissioner therefore had no jurisdiction to add that land and treat the same as the land of the appellant and proceed to set said the order of the Deputy Collector.
The High Court in a short judgment refused to interfere mainly on the ground that the transfer of the land in favour of Nemichand, the adopted son, was held to be collusive as also the decree.
There was neither any pleading nor any case made out either before the Deputy Collector or even before the Commissioner to indicate that the transfer of the lands in favour of the adopted son and the transfer of Nemichand in favour of his mother were collusive or tainted by fraud.
In fact both these transactions took place as far back as 1956, that is to say, five years before the Act came into force.
Even the Act clearly exempts lands which may 1051 have been acquired or transferred prior to 4 8 1959.
Ss. 8, 10 and 12 which deal with the subject clearly enjoin that only those transfers would be hit by the Act which are made at any time on or after 4 8 1959.
As both the transfers mentioned above were prior to 4 8 1959, it is obvious that they fell completely outside the ambit of the provisions of the Act.
The High Court was thus not justified in presuming that the transfer made by the appellant in favour of his adopted son towards his share and the transfer by the adopted son Nemichand to his mother were either collusive or fraudulent.
There was neither any foundation in the pleadings nor any evidence to support this conjecture of the High Court.
Mr. Bhandare, learned Counsel appearing for the respondent submitted that the word 'person ' defined in Sec.
2(22) of the Act includes family and that 'family ' as defined in Sec.
2(11) of the Act includes, a Hindu undivided family, and in the case of other persons, a group or unit the members of which by custom or usage are joint in estate or possession or residence.
Reliance was also placed on Section 6 of the Act which runs thus: "Where a family unit consists of members which exceed five in number, the family unit shall be entitled to hold land exceeding the ceiling area to the extent of one fifth of the ceiling area for each member in excess of five, so however that the total holding shall not exceed twice the ceiling area, and in such case, in relation to the holding of such family unit, such area shall be deemed to be the ceiling area.
" These sections are of no assistance to the Respondent because Section 6 takes within its fold lands belonging to the owner, or his family as a single unit and is not meant to cover the separate or individual property of a member of the family which is self acquired property and cannot be clubbed together with land of owner or his family.
To begin with the Act merely intended to include land with in the ceiling limit of a person or his family which belonged to such a person or persons having different shares in that property.
That is why all transfers made prior to 1959 were expressly exempted from the operation of the Act.
The arguments advanced by the respondent appear to have found favour with the Commissioner, but it was legally erroneous as indicated above.
In these circumstances, therefore, the more important fact to be determined was whether or not any transfer that has been made by the person concerned was prior to or after 4 8 1959.
If the transfer was prior to 4 8 1959 then the provisions of the Act would not apply at all.
In the instant case, both the 1052 transfers being three years prior to the date mentioned above, the Act would not apply to the appellant, and the Commissioner and the High Court therefore erred in holding that the lands transferred by Nemichand to his mother should be included in the total area of the land owned by the appellant.
We, therefore, allow this Appeal, set aside the judgment of the High Court and also that of the Commissioner and restore the judgment of the Deputy Collector.
In the special circumstances, there shall be no orders as to costs.
The appeal is accordingly allowed.
N.K.A. Appeal allowed.
| The appellant in his return filed before the Deputy Collector had shown the total lands in his possession to be 370 acres and 34 gunthas.
Proceedings under the Maharashtra Agricultural Lands (Ceiling of Holdings) Act, 1961 were taken against him in order to determine whether the return filed was correct or not.
It was alleged by the appellant that some time in the year 1956 there was a partition between the appellant and his nephews as a result of which his family got 202 acres of land.
The appellant had sold 51 acres of land to other persons before the Act came into force and that he gave some land to his adopted son in lieu of the latter 's share and that the adopted son thereafter gave 93.25 acres of land to his mother under Civil Court decree.
All these transactions took place some time in the year 1956.
The Collector after examining the return found that the total land owned by the appellant was 118 acres 36 gunthas and the excess was only 4 acres 36 gunthas which could be taken over under the Act.
The Commissioner called for the records and interfered suo moto.
After making some enquiry, he held that the land declared by the appellant in his return far exceeded the ceiling limit and in computing the total lands owned by the appellant he took into account even the lands which had been given by the adopted son to his mother, the wife of the appellant.
The appellant filed a writ petition against the order of the Commissioner in the High Court which refused to interfere on the ground that the transfer of the land in favour of the adopted sons was held to be collusive as also the decree.
In the appeal to this Court, it was contended on behalf of the appellant that under the provisions of the Act, land which was received by his wife from the adopted son was her personal property and could not be included in the ceiling of the appellant and that the Commissioner had no jurisdiction to add that land and treat the same as the land of the appellant and to set aside the order of the Deputy Collector.
On behalf of the respondent it was contended that the word 'person ' defined in section 2(22) of the Act includes family and that 'family ' as defined in section 2(11) includes, a Hindu Undivided family, and in the case of other persons, a group or unit, the members of which by custom or usage are joint in an estate or possession or residence.
Allowing the appeal.
^ HELD: 1.
The judgment of the High Court is set aside as also that of the Commissioner and that the judgment of the Deputy Collector restored.
[1052B] 1049 2.
The Act clearly exempts the land which may have been acquired or transferred prior to 4 8 1959.
Section 8, 10 and 12 which deal with the subject clearly enjoin that only those transfers would be hit by the Act which are made at any time on or after 4 8 1959.
[1051A] 3.
There was neither any pleading nor any case made out either before the Deputy Collector or even before the Commissioner to indicate that the transfer of the land in favour of the adopted son and the transfer by the adopted son in favour of his mother were collusive or tainted by fraud.
Both these transactions took place as far back as 1956 that is to say 5 years before the Act came into force.
[1050G H] 4.
The High Court was not justified in presuming that the transfer made by the appellant in favour of his adopted son towards his share and the transfer by the adopted son to his mother was either collusive or fraudulent.
There was neither any foundation in the pleadings nor any evidence to support this conjecture of the High Court.
[1051A C] 5.
Sections 2(11), 2(12) are of no assistance as Section 6 takes within its fold lands belonging to the owner, or his family as a single unit and is not meant to cover the separate or individual property of a member of the family which is self acquired property and cannot be clubbed together with the land of the owner or his family.
To begin with, the Act merely intended to include the land within the ceiling limits of a person or his family which belonged to such a person or persons having different shares in that property.
That is why all transfers made prior to 1959 were expressly exempted from the operation of the Act.
[1051E G]
|
iminal Appeal No. 39 of 1961.
Appeal by special leave from the judgment and order dated January 30, 1960 of the Andhra Pradesh High Court (in Criminal Appeals Nos. 277 and 278 of 1957 and Criminal Revision Case No. 810 of 1957.
A.S.R. Chari, K. R. Choudhry and P.D. Menon, for the appellant.
Bhimasankaran and R. Thiagarajan for respondent No. 1.
R. Mahalingier, for respondent No. 2. 1963.
April 23.
The judgment of the Court was delivered by MUDHOLKAR J.
The respondent No. I was tried before the Court of Sessions, Visakhapatnam for offences under section 120 B, Indian Penal Code, section 409, section 477 A and section 471 read with section 467, I.P.C. while respondent No. 2 was tried for an offence under 301 section 120 B and for offences under sections 409 read with section 109, 477 A and 471 read with section 467, I.P.C. Each of the respondents was convicted of the first two offences, but the respondent No. I alone was convicted of the other two offences.
Various sentences were passed against them by the Additional Sessions judge, Visakhapatnam, who presided over the court.
The respondents preferred appeals before the High Court challenging their convictions and sentences.
The State on the other hand preferred an application for revision under section 439, Cr.
P.C. for the enhancement of the sentences passed on the respondents.
The High Court allowed the two appeals, acquitted the respondents and dismissed the application for revision preferred by the State.
The State of Andhra Pradesh has come up before this Court in appeal by obtaining special leave under article 136 of the Constitution.
The prosecution case in so far as it is material for the decision of this appeal is as follows : In the year 1929 the Andhra Engineering Co., which was originally a partnership firm formed by one D.L.N. Raju was converted into a private limited, company with its headquarters at Visakhapatnam.
(We shall refer to this company throughout as the AECO).
It obtained licences from the Government under the Electricity Act for supply of electrical energy to Visakhapatnam, Anakapalli and some other places.
As the AECO did not have the necessary capital to undertake the work Raju floated in the year 1933 a public limited company called Visakhapatnam Electric Supply Corporation Ltd., (referred hereafter as VESCO) and another in the year 1936 called the Anakapalli Electric Supply Corporation Ltd. The AECO transferred its licences for the supply of electrical energy to the consumers of Visakhapatnam to VESCO and similarly transferred to AECO the licence to supply 302 electrical energy to consumers at Anakapalli.
The AECO was appointed Managing Agent for each of these corporations under separate agreements.
Some time later other industrial concerns, the Andhra Cements Ltd., Vi jayawada and the East Coast Ceremics, Rajahmurthy were started apparently by Raju himself and the AECO was appointed the Managing Agent of each of these concerns.
The original managing agency agreement in favour of AECO with respect to VESCO was for a period of 15 years i.e., from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the Government under the Electricity Act.
A mention may be made of the fact that in June, 1952 the VESCO undertaking was acquired by the Government under the provisions of the " 'Electricity Undertaking Acquisition Act" but nothing turns on it.
The VESCO had its own Board of Directors while the AECO had also its own separate Board of Directors.
The VESCO had no Managing Director but at each meeting of its Board of Directors one of the Directors used to be elected Chairman.
The same practice was followed at the meeting of the general body of the shareholders.
The AECO on the other band always had a Managing Director, first of whom was D.L.N. Raju.
He died in the year 1939 and was succeeded by R.K.N.G. Raju, an Advocate of Rajahmundry.
This person, however, did not shift to Visakhapatnam on his becoming the Managing Director but continued to stay most of the time at Rajahmundry.
According to the prosecution both these concerns were running smoothly and efficiently during the lifetime of D.L.N. Raju because he was personally attending to their affairs.
His successor, however, apart from the fact that be continued to be staying mostly at Rajahmundry, was also interested in several other ventures, including a sugar factory at Dewas in Central India.
303 Eventually many of those ventures failed.
According to the prosecution the second Raju was not bestowing sufficient care and attention on the affairs of VESCO.
The AECO as Managing Agents of VESCO had appointed in the year 1939 one D.V. Appala Raju, a trusted employee, as its representative and as the secretary of VESCO.
In 1944 this person resigned from his appointments and started his own business in radio and electrical goods in the name of D. Brothers.
He was succeeded by T. Visweswara Rao, P.W. 6, an employee of the AECO.
The respondent No. 1, Ganeswara Rao was also an old employee of AECO, having been appointed a stenotypist in the year 1923 on an initial salary of Rs. 40/ p.m.
Eventually he became the Head Clerk therein.
He pressed his claim for appointment as Secretary of VESCO and representative of the Managing Agents at Visakhapatnam and R .H.G.
Raju appointed him to that post.
All this is not disputed.
The respondent No. 1, even after his appointment on two posts connected with VESCO, continued to work with the AECO also whose business had by then been confined only to that of Managing Agents of the four companies floated by D.L.N. Raju.
It is the prosecution case that as Secretary of VESCO and the resident representative of the Managing Agents, the respondent No. I was attending to the day to day affairs of VESCO, which included the receiving of all sums of money due to VESCO, spending money for the purpose of VESCO attending to the appointment, supervision and control of the staff of VESCO, purchasing materials required for the purpose of VESCO and supervising over the accounts of VESCO.
He was thus all important with respect to the every day affairs of 304 VESCO.
His dual capacity enabled the respondent No. I to earn the confidence not only of the Directors of AECO but also of those of VESCO.
The accounts maintained by the VESCO used to be explained by him not only to the Directors but also to the shareholders.
The knowledge of the Financial position of VESCO obtained by them used to be derived essentially from the respondent No. 1.
As Secretary of VESCO it was his duty to convene the meetings of the Board of Directors, to present before them the periodical statement of receipts and expenditure of VESCO, to convene meetings of the General Body, to prepare the Managing Agents ' report and the Director 's report as also to see to the presentation of auditors ' report and the statement of accounts.
The explanations of the Managing Agents and the Directors of VESCO with respect to the items mentioned in the orders of the Board used also to be placed by him before the shareholders.
It was also his duty to have the accounts of VESCO audited by the auditors elected by the general body and to produce before the auditors the relevant accounts, vouchers, bank statements and so on.
There were no complaints about the management of the affairs of VESCO or the AECO till the end of 1946 or the beginning of 1947.
One significant fact, however, which occurred prior to 1946 is referred to by the prosecution.
Till the year 1945 Messrs C. P. Rao & Co., a firm of Chartered Accountants were the auditors of VESCO but after the respondent No. I became Secretary.
one B. Rajan was elected Auditor not only for VESCO but for all the other four concerns, including AECO.
This person was Auditor for Greenlands Hotel at Visakhapatnam, of which the respondent No. I was a Director.
R.K.N.G. Raju took till towards the end of 1947 and died at Madras in April, 1948.
According 805 to the prosecution the respondent No. I wanted to take advantage of this fact and conceived of a scheme for misappropriating as much money belonging to VESCO as possible before the managing agency agreement of AECO came to an end in October, 1948.
The respondent No. I secured the promotion of the approver K.V. Ramana, who was originally Accounts Clerk to the post of Senior Accountant.
Similarly K. V. Gopala Raju was transferred from the post of Stores Clerk to the general department and K.S.N. Murty, the discharged accused, was appointed Stores Clerk in his place.
Later, however, Murty was also got transferred to the general section and replaced by P. W. 18, Srinivasa Rao originally a stores boy.
The approver who was originally an Accounts clerk with the AECO was, it may be mentioned, appointed a cashier in VESCO in 1946 at the instance of the respondent No. I and was thus beholden to him.
He was later promoted as Senior Accountant and in his place the respondent No. 2 Laksbminarayana Rao was appointed the Cashier.
According to the prosecution the respondent No. I took both the approver and Lakshminarayana Rao in his confidence as also some other persons "known and unknown" for carrying out his nefarious purpose, namely, the misappropriation of the funds of VESCO during the subsistence of AECO 's managing agency of VESCO.
The conspiracy is said to have been hatched in the year 1947 and falsification of accounts and misappropriation of funds of VESCO went on till the end of the accounting year.
The term of the managing agency was renewed in 1943 and AECO con tinued to be managing agents until the VESCO was taken over by the Government in 1952.
The respondent No. I continued to be the Secretary of VESCO and resident representative of the Managing Agents throughout the period of conspiracy.
306 After the death of R.K.N.G. Raju, it was discovered that the AECO was indebted to many concerns which were under its managing agency, the liability being shown either as that of AECO or that of R.K.N.G. Raju personally.
Again, the VESCO was shown as indebted to the Andhra Cement,; to the extent of Rs. 42,000/ .
This amount was, however, paid by the AECO from the funds of VESCO.
The respondent No. I and some of his friends were in search of a rich and substantial man who would be amenable to them to fill the post of Managing Director of AECO.
Eventually their choice fell on G. V. Subba Raju, P. W. 25, a resident of Manchili, who held a large number of shares in the AECO and who was, besides, related to R.K.N.G. Raju by marriage.
It is said that this person has not received much education and knows only bow to sign his name in English.
He was assured that by consenting to become the Managing Director be would not be required to discharge onerous duties and that the respondent No. I would look to all the affairs of VESCO.
He was also told that apart from signing important papers which may be sent to him by the respondent No. I from time to time to Manchili or wherever be might be would have no work to do.
He agreed and was elected Managing Director of AECO in the middle of 1948.
Upon this understanding he accepted the position offered to him.
The VESCO used to receive large amounts of money from high tension power consumers such as the railways, K. G. Hospital, the Port Administration, the Andhra University etc., by cheques.
But domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent No. 2.
The respondent No. 2 was asked by the respondent No. I to maintain a private note book.
In "that book payments which used to be made by respondent No. 2 on the 307 basis of slips issued by the respondent No. I (which included payments to his relatives or to business firms in which he was personally interested) used to be noted and the amount totalled up at the end of the day.
This amount was posted in VESCO 's Cash Handover Book as " 'by safe" indicating that this amount was kept in the safe, though in fact it was not.
On the basis of the entries in the Handover Book the final accounts were written up.
The respondent No. I opened four personal accounts in different banks, including the Imperial Bank of India (as the State Bank then was).
When the respondent No. I had to issue a personal cheque on any of these Banks he used to ask the second respondent to send an equivalent amount to the Bank concerned for being credited to his account.
These amounts also used to be noted in the private note book and entered "by safe ' in the Handover Book.
Another thing which the respondent No. I initiated was opening a heading in the ledger called "advance purchase of materials.
" Amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material.
It may be mentioned that Subba Raju used to visit Visakhapatnam twice a month and check up the account books.
At that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein (but which were actually misappropriated) had been sent to the Bank for being deposited.
Apparently Subba Raju was fully satisfied with this and other explanations and, therefore, he appointed one C. section Raju, who was the Manager of Andhra Cements to supervise over the affairs of VESCO.
Apparently because of this a new method of misappropriation was adopted by the respondents by starting in the VESCO account books, an account called "suspense account".
A lakh of rupees passed through that account.
Amounts which were misappropriated used to find their way in this 308 account.
A new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made.
Subba Raju was not satisfied with the nature of supervision exercised by C. section Raju over the affairs of VESCO because he used to look only at the cash book entries of the days on which he paid visits to VESCO 's office, to which he used to go with previous intimation.
Besides that, C. section Raju 's management of Andhra Cements had landed it into a loss of Rs. 30,000/ `.
Because of all these things he had C. section Raju replaced towards the end of the year 1951 by one Subbaramayya, a retired Finance Officer from the Madras Electricity Board both as a Director of Andhra Cements and as a Supervisor over the accounts of VESCO.
Subbaramayya took his work seriously and called for information on a number of points from the respondent No. 1.
He, however, was unable to obtain any information.
In January, 1952 he therefore brought one section G. Krishna Aiyar who had vast experience in the maintenance of accounts of electrical undertaking 's having been Chief Accountant of the South Madras Electric Supply Corporation, to undertake an investigation and then to act as Financial Adviser.
In the meantime on November 29, 1951 there was a meeting of the General Body at which the accounts were, among other things, to be considered.
There was a considerable uproar at that meeting because the respondent No. 1 said that the Auditor 's report had not been received.
The shareholders felt that the report had been received but was being suppressed or deliberately withheld.
However, the meeting was postponed and eventually held on December 9, 1951.
On that date the respondent No. 1 produced the auditor 's report (exhibit p. 234 of which exhibit P. 235 is a printed copy).
According to 309 the prosecution the report is a forged document.
That was also the feeling of a number of shareholders who wanted to see the original but one Dutt who was Chairman of the meeting after seeing exhibit P. 234 said that the report seemed to be a genuine one.
section G. Krishna Aiyar after his appointment in January, 1952, made close enquiry and submitted an interim report.
That report showed that during the period 1948 49 Rs. 33,271 10 0 shown as paid to the Andhra Power System were in fact not paid.
The respondent No. 1 on being asked to explain said that he would give his explanation to the Managing Director.
The Interim Report showed that there was a shortage of about Rs. 90,000/ for this period.
On February 12, 1952 the respondent No. I wrote to the Managing Director admitting his responsibility and agreed to make good the amounts found short or such other amounts as would be found short up to the end of March, 1952.
Further scrutiny of the accounts was being carried out by Krishna Aiyar and in his subsequent report he pointed out that Rs. 2,38,000/ which were shown as having been paid to the Andhra Power System had actually not been paid.
In fact in April, 1952 the Collector attached VESCO properties for realising this amount.
On April 30, 1952 the respondent No. 1, by selling some of his property, himself paid Rs. 50,000/ to the Andhra Power System towards the sum due to it from VESCO and had promised to pay the balance shortly thereafter.
He was given time for doing so but he failed to pay it.
The Directors of VESCO thereafter authorised K. section Dutt, one of the Directors to lodge a complaint with the police which he accordingly lodged on May 19, 1952.
On the next day the police placed an armed guard around the office of the respondent No. I and seized a number of papers.
As a result of investigation they found that there was a total misappropriation 310 of Rs. 3,40,000/ .
On May 13, 1954 a chargesheet was filed against the two respondents as well as Murti and the approver Ramana.
OD September 13, 1954 Ramana offered to make a full Confession to the Additional District Magistrate (Independent) who was empowered to grant pardon under section 337 of i he Code of Criminal Procedure.
He, however, directed Ramana to make his confession before a SubMagistrate.
The latter accordingly made a confession on November 15, 1954 and on November 17, 1954 the Additional District Magistrate (Independent) granted him pardon and that is how he came to be examined as a witness in this case.
As already stated, the Additional Sessions judge convicted both the respondents, the respondent No. I in respect of each head of the offences with which he was charged and the respondent No. 2 in respect only of the offences of conspiracy and misappropriation.
The High Court set aside the conviction of the respondents on a number of grounds.
In the first place according to the High Court, joint trial of two or more persons in respect of different offences cornmitted by each of them is illegal and that here as they were charged with having committed offences under section 120 B, section 409, section 477 A and section 476/467, I.P.C. they could not be tried jointly.
According to it the provisions of section 239 were of no avail.
Next according to the High Court even if section 239 is applicable its provisions are subject to those of section 234 and as such the trial being for more than three offences was impermissible.
Then according to the High Court offences under.
section 409 and section 471/467 are of different kinds and are not capable of joint commission.
Therefore, they could not be jointly tried.
Further, according to the High Court where a conspiracy has yielded its fruits the conspirators can be charged with the actual offences committed and not with conspiracy to commit those offences.
Charge of conspiracy, according to the High Court, can be validly made 311 only when the prosecution establishes that every conspirator expected to receive a personal benefit from it and that the prosecution has not been able to establish that the respondent No. 2 or the approver evidently had any such expectations since they did not in fact receive any corresponding benefit.
In so far as the respondent No. 2 is concerned the High Court has held that since he was charged with a specific offence under s.409 I.P.C. he could not be convicted of mere abetment of an offence.
The approver 's evidence was held by the High Court to be inadmissible because the pardon granted to him was illegal.
The High Court has also held that his evidence is unreliable and further that the Additional Sessions judge was in error in allowing him to refresh his memory by referring to various documents in a manner not permitted by section 159 of the Evidence Act.
The High Court has further stated that inadmissible evidence was taken on record by the Additional Sessions judge, namely, account books of Billimoria Brothers, maintained in Gujrati and further that the Additional Sessions judge was in error in allowing the prosecution to use those account books for establishing absence of entries with regard to certain payments alleged in the VESCO books to have been made to them.
Finally, the High Court held that the examination of the respondent under section 342 of the Code was unfair for a number of reasons and that the Additional Sessions judge had failed to perform an important duty in that he did not call the attention of the respondents to the provisions of section 342 which enable an accused person to give evidence in his own behalf Mr. Bhimasankaram, appearing for the two respondents, however, has not sought to support the judgment of the High Court on all these points.
The points which he urged are briefly these: (1) That there was a misjoinder of charges and persons in that the various provisions 312 of section 239 were clubbed together and an omnibus charge of conspiracy was framed which on its face was one likely to embarrass the respondents and make their task of defending themselves difficult.
(2) The procedure adopted in the investiga tion and committal stages was irregular.
(3) Irrelevant evidence was introduced and some evidence was introduced in a manner not authorised by the Evidence Act.
(4) That the Court abused its powers under s.342, Cr.
P.C. while conducting the examination of the respondents.
(5) The evidence of the approver was inadmissible because the pardon granted to him was illegal, that, in any case, it is unreliable, was so found even by the Sessions judge and must, therefore, be rejected.
If the evidence of the approver is left out the remaining evidence would be inadequate to sustain the prosecution case.
We shall deal with Mr. Bhimasankaram 's contentions in the order in which we have set them out.
The first question for consideration is whether there was a misjoinder of parties and of persons.
The first charge is in respect of the conspiracy alleged to have been entered into by the two respondents, K. V. Ramana, the approver, and others "known and unknown" to commit criminal breach of trust of the funds of VESCO and, in order to screen its detection, to falsify the accounts of VESCO and to use forged documents as genuine.
On the face of it this is a valid charge.
But certain objections have been taken to it with which we will deal at the 313 appropriate place.
The second charge is for an offence of criminal breach of trust punishable under section 409 and the accusation therein is that the two respondents along with Ramana, misappropriated 69 items aggregating to a little over Rs. 3,20,000/ .
It is clear from the charge that some of the amounts were misappropriated between April, 1947 and March, 1950, some between April, 1947 and March, 1949, some between April, 1947 and March, 1951 and quite a large number between September, 1947 and March, 1950 and a still large number between April, 1951 and March, 1952.
It is thus apparent that offences committed within a space of 12 months were tried along with offences committed beyond that period.
Unless, therefore, the provisions of section 239 are applicable it would follow that there was a misjoinder of charges.
The third charge is that the two respondents, along with the approver Ramana made false entries on seven different dates in the account books between September 19, 1947 and March 18, 1952 and thus committed an offence under section 477 A, I.P.C. The fourth charge is that the two respondents, along with the approver Ramana forged six documents on different dates between March 28, 1949 and November 12, 1951 and thus committed an offence under section 471 read with section 467, I.P.C. As we have pointed out earlier the respondent No. I alone was convicted by the Additional Sessions judge in respect of the third and fourth charges.
Mr. Bhimasankaram supports the reason given by the High Court for coming to the conclusion that there was a misjoinder of charges.
The main reasons upon which the conclusion of the High Court is based are firstly that there could be no clubbing together of the provisions of the various clauses of section 239 and secondly that the respondents were charged with more than three offences of the same kind and that this was in contravention of section 239 (c).
In coming to the conclusion that the 314 provisions of various clauses of section 239 cannot be applied cumulatively the High Court has relied upon the decision in Re: Vankavalapati Gopala Rao (1).
There the learned judges have held thus: "These clauses are mutually exclusive and they cannot be simultaneously applied and to construe them as supplementing each other would be enlarging the scope of the exceptions.
Each clause is an exception to the general rule enacted in section 233, Cr.
If such a combination is permissible, all persons accused of offences described in cls.
(a) to (g) can be tried together in one case which certainly involves a bewildering multiplicity of charges and which would obviously set at naught the salutary principle contained in section 233." (p. 24) In support of this view the High Court in that case has relied upon the decision in T. B. Mukherji vs State (2 ) and referred to the decision in Singarachariar vs Emperor (3) and D. K. Chandra vs The State(,).
Before considering these decisions it will be useful to look at the scheme of Chapter XIX of the Code of Criminal Procedure which deals with the charge.
The chapter is split up into two sub heads, ' Form of charges" and "Joinder of charges.
" Sections 221 to 232 are comprised under the first sub head and sections 233 to 240 in the second.
Sections 221 to 223 deal with the framing and content of charge.
section 224 deals with the interpretation of the language of the charge and section 225 with the effect of errors in the charge.
Sections 226 to 231 deal with the power of the court with regard to framing and altering charges and the procedure to be adopted at the trial where a charge is found to be defective or there is no charge or where a new charge is to be (1) A.I.R. 1956 Andhra 21.
(2) A.I.R. 1954 All. 501.
(3) A,I,R, (4) A,I.R. F.B, 315 framed.
Section 232 deals with the power of the. appellate court or the High Court when it discovers that there is material error in the charge.
Then we come to the other sub head of this chapter.
Section 233 provides that for every distinct offence of which any person is accused there shall be a. separate charge.
It thus lays down the normal rule to be followed in every case.
But it also provides that this will be subject to the exceptions contained in SS. 234, 235, 236 and 239.
The first three provisions relate to the framing of charges against a single accused person.
Section 234 (1) deals with the trial of a person for offences of the same kind not exceeding three committed within the space of 12 months from the first to the last of such offences and section 231 (2) what is meant by the expression 'offences of ' the same kind '.
This provision lifts partially the ban on the trial of a person for more than one offence at the same trial.
Section 235(1), however, goes a step further and permits the trial of a person for more offences than one if they are so connected together as to form the same transaction.
Thus under this provision if the connection between the various offences is established the limitations placed by section 234(1) both as regards the number and the period during which the offences are alleged to have been committed will not apply.
Full effect cannot possibly be given to this provision if we hold that it is subject to the limitation of s.234(1).
Sub section (2) of section 235 deals with a case where an offence falls within two definitions and sub s.(3) deals with a case in which a number of acts are alleged against an accused person, different com binations of which may constitute different offences.
Then we come to section 236 which provides that if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and further provides that any number of such 316 charges may be tried together.
It also permits that charges could be framed against an accused person in the alternative if the court thinks fit.
Thus, this is a special provision available in case of doubt and is neither subject to the limitations prescribed by section 233 nor those of the other preceding provisions.
Now, if the respondent No. 1 were alone tried upon the second, third and the fourth charges the provisions of section 235(1) could have been pressed in aid if the allegations were that the offences were so connected together as to form one and the same transaction and the validity of the trial would not have been open to any attack.
Similarly if the second respondent were alone tried on the second charge his trial would not have been open to any objection if the allegation were that the offences were so connected together as to form the same transaction.
Here, however, we have a case where the prosecution alleges that there was additionally a conspiracy to which apart from the two respondents the approver and some other persons were parties and where in both the respondents were tried together.
A conspiracy must be regarded as one transaction and, there fore, a single individual charged with it could be tried with the aid of section 235(1) for all the acts committed by him in furtherance or in pursuance of the conspiracy without the limitations imposed by s.234(1).
For, where all the acts are referable to the same conspiracy their connection with one another is obvious.
The only provision in the Code which permits the joint trial of more than one person is section 239 and what we have to see is whether under that provision the two respondents could have been jointly tried for the offences with which they were charged.
Let us, therefore, examine closely the provisions of 317 section 239.
It will be useful to set out the provisions of that section which run thus : " The following persons may be charged and tried together, namely: (a) persons accused of the same offence committed in the course of the same transaction; (b) persons accused of an offence and per sons accused of abetment, or of an attempt to commit such offence; (e) persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of twelve months; (d) persons accused of different offences committed in the course of the same transaction; (e) persons accused of an offence which includes theft, extortion, or criminal misappropriation, and persons accused of receiving or retaining, or assisting in the disposal or concealment of, property possession of which is alleged to have been transferred by any such offence committed by the first named persons, or of abetment of or attempting to commit any such 1st named offence; (f) persons accused of offences under sec tions 411 and 414 of the Indian Penal Code or either of those sections in respect of stolen property the possession 318 of which has been transferred by one offence; and (g) persons accused of any offence under Chapter XII of the Indian Penal Code relating to counterfeit coin, and persons accused of any other offence under the said Chapter relating to the same coin, or of abetment of or attempting to commit any such offence; and the provisions contained in the former part of this Chapter shall, so far as may be, apply to all such charges.
" This first thing to be noticed is that section 239 does not read as if its various clauses can be applied only alternatively.
On the other hand at the end of cl.
(f) there is a conjunction 'and '.
If the intention of the Legislature was that the provisions of these clauses should be available only alternatively it would have used the word "or" and not "and" which has the opposite effect.
Grammatically, therefore, it would appear that the provisions of the various clauses are capable of being applied cumulatively.
The opening words of the section show that it is an enabling provision and, therefore, the Court has a discretion to avail itself cumulatively of two or more clauses.
Of course a Court has the power to depart from the grammatical construction if it finds that strict adherence to the grammatical construction will defeat the object the Legislature had in view.
The concluding portion of section 239 shows that the provisions contained in the former part of Chapter XIX shall, as far as may be, apply to the charges framed with the aid of section 239.
Does this mean that the provisions of section 233, 234, 235, and 236 must also be complied with? Obviously, section 233 does not override the provisions of section 239.
Section 234 cannot also be regarded as an 319 overriding provision because reading it that way will lead to the clear result that whereas several accused persons can be charged at the same trial with any number of different offences committed by them in the course of the same transaction they cannot be tried also for offences of the same kind exceeding three in number and committed beyond a space of 12 months from the first to the last.
It could not have been the intention of the Legislature to create such a situation.
Again, as already stated, section 234(1) does not override the provisions of section 235(1) which permits trial of a person for more offences than one committed during any period provided they are so connected together as to form one transaction.
Unless we read section 234(1) as not enacting a fetter on section 235(1), it may not be possible to give full effect to the latter.
Now, since section 234(1) cannot be properly read a,,; overriding section 235(1) there is no valid reason for construing it as overriding the provisions of section 239 either.
There are also other reasons which point to this conclusion which we will set out while considering the argument advanced by Mr. Bhimasankaram.
Mr. Bhimasankaram contended that s, 239 must be read at least subject to sections 234(1) and 235(1) on the ground that if there are certain restrictions with respect to the trial of a single accused there is no reason why those restrictions will disappear if an accused person is tried along with several other persons.
Thus he points out that where several persons are accused of more offences than one of the same kind committed by them jointly within a period of 12 months, the number of offences for which they could be tried cannot exceed three.
In this connection he relied upon the words "within the meaning of section 224" occurring in cl.
(c) of section 239.
These words, he contended, clearly show that cl.
(c) of section 239 is subject to the provisions of section 234.
In our opinion the words " within the meaning of section 234" indicate that what was meant by the words offence of the same kind" 320 in cl.
(c) of section 239 is the same thing as was meant by the identical expression used in section 234(1) and defined in section 234(2) and nothing more.
If it was the intention of the Legislature to provide that the number of offences for which several accused persons could be tried under cl.
(c) of section 239 should be limited to three as provided in section 234(1), the Legislature would either have Said " 'persons accused of more offences than one of the same kind not exceeding three in number" or may have used the words "person accused of more than one offence of the same kind to the extent permissible under section 234".
Language of this kind would have made perfectly clear that cl.
(c) of section 239 was subject to section 234(1).
As already stated, if section 239(c) is construed as being subject to section 234(1), there would be this anomaly that whereas the same accused person could be charged with and tried jointly for any number of offences of different kinds committed by them, for more than three offences of the same kind committed by them jointly there will have to be a separate trial with respect to such offences.
Surely such could not have been the intention of the legislature.
The object of enacting section 239 was to avoid multiplicity of trials and the only limitation which could properly be placed on the trial of several persons for the same kind of or different offences would be that which considerations of justice and fairness would require.
No doubt, such a construction would also give rise to the result that whereas so far as the trial of a single accused person is concerned the charges must be limited to three offences committed by him within the space of 12 months from the first to the last of such offences, there would be no such limitation when along with that accused person there are one or more persons who have jointly committed those offences.
The reason for this possibly is that the Legislature did not want to differentiate between cases where any number of different offences were committed jointly by a group of persons from cases where any number 321 of offences of the same kind were committed by a group of persons.
According to Mr. Chari section 235(1) cannot be construed as having an overriding effect on section 239 because whereas it contemplates acts so connected together as to form the same transaction resulting in more offences than one, section 239(d) contemplates offences committed in the course of the same transaction and nothing more.
The question is whether for the purposes of section 239(d) it is necessary to ascertain any thing more than this that the different offences were committed in the course of the same transaction or whether it must further be ascertained whether the acts are intrinsically connected with one another.
Under section 235(1) what has to be ascertained is whether the offences arise out of acts so connected together as to form the same transaction, but the words "so connected together as to form" are not repeated after the words " 'same transaction" in section 239.
What has to be ascertained then is whether these words are also to be read in all the clauses of section 239 which refer to the same transaction.
Section 235(1), while pro viding for the joint trial for more than one offence, indicates that there must be connection between the acts and the transaction.
According to this provision there must thus be a connection between a series of acts before, they could be regarded as forming the same transaction.
What is meant by "same transaction" is not defined anywhere in the Code.
Indeed, it would always be difficult to define precisely what the expression means.
Whether a transaction can be regarded as the same would necessarily depend upon the particular facts of each case and it seems to us to be a difficult task to undertake a definition of that which the Legislature has deliberately left undefined.
We have not come across a single decision of any Court which has embarked upon the difficult task of defining the expression.
But it is generally thought that where there is proximity of time or place or 322 unity of purpose and design or continuity of action in respect of a series of acts, it may be possible to infer that they form part of the same transaction.
It is, however, not necessary that every one of these elements should co exist for a transaction to be regarded as the same.
But if several acts committed by a person show a unity of purpose or design that would be a strong circumstance to indicate that those acts form part of the same transaction.
The connection between a series of acts seems to us to be an essential ingredient for those acts to constitute the same transaction and, therefore, the mere absence of the words "so connected together as to from" in cl.
(a), (c) and (d) of section 239 would make little difference.
Now, a transaction may consist of an isolated act or may consist of a series of acts.
The series of acts which constitute a transaction must of necessity be connected with one another and if some of them stands out independently, they would not form part of the same transaction but would constitute a different transaction or transactions.
Therefore, even if the expression " 'same transaction" alone had been used in section 235(1) it would have meant a transaction consisting either of a single act or of a series of connec ted acts.
The expression "same transaction" occurring in cls.
(a), (c) and (d) of section 239 as well as that occurring in section 235(1) ought to be given the same meaning according to the normal rule of construction of statutes.
Looking at the matter in that way, it is pointless to inquire further whether the provisions of section 239 are subject to those of section 236(1).
The provisions of sub section
(2) and (3) of section 235 are enabling provisions and quite plainly can have no overriding effect.
But it would be open to the court to resort to those provisions even in the case of a joint trial of several persons permissible under section 239.
Section 236 is also an enabling provision to be availed of in case of doubt and it is meaningless to say that section 239 is subject to section 236. ]Bearing in 323 mind the fact that the provisions in the "former part" of Chapter XIX are applicable to charges made with the aid of section 239 only "so far as may be" it would not be right to construe section 239 as being subject to the provisions of sections 233 to 236.
It was contended by Mr. Chari that the expression "former part" would apply to the first sub division of chapter XIX which deals with the form and content of the charges and the powers of the court with regard to the absence of charge and alteration of charge.
We cannot, however, give the expression such a restricted meaning.
For, even in the absence of those words, the earlier provisions could not have been ignored.
For, it is a rule of construction that all the provisions of a statute are to be read together and given effect to and that it is, therefore, the duty of the Court to construe a statute harmoniously.
Thus, while it is clear that the sections preceding section 239 have no overriding effect on that section,, the courts are not to ignore them but apply such of them as can be applied without detracting from the provisions of S.239.
Indeed, the very expression 'so far as may be ' empha sises the fact that while the earlier provisions have to be borne in mind by the Court while applying section 239 it is not those provisions but the latter which is to have an overriding effect.
Apart from this, the question whether the provisions of sections 233 to 236 have or have no overriding effect on section 239 is not strictly germane to the question considered by the High Court that is, clubbing together all the provisions of the various clauses of section 239.
Whether they can or cannot be read cumulatively must be determined by consideration of the language used in those clauses.
We have already indicated how those clauses may be grammatically read.
On a plain construction of the provisions of section 239, therefore, it is open to the Court to avail itself cumulatively of the provisions of the different clauses of section 239 for the purpose of framing charges 324 and charges so framed by it will not be in violation of the law, the provisions of sections 233, 234 and 235 notwithstanding.
The decision of the Allahabad High Court in T. R. Mukherji 's case (IL), is directly in point and is clearly to the effect that the different clauses of section 239 are mutually exclusive in the sense that it is not possible to combine the provisions of two or more clauses in any one case and to try jointly several persons partly by applying the provisions of one clause and partly by applying those of another or other clauses.
A large number of decisions of the different High Courts and one of the Privy Council have been considered in this case.
No doubt, as has been rightly pointed out in this case, separate trial is the normal rule and joint trial is an exception.
But while this principle is easy to appreciate and follow where one person alone is the accused and the interaction or intervention of the acts of more persons than one does not come in, it would, where the same act is committed by several persons, be not only inconvenient but injudicious to try all the several persons separately.
This would lead to unnecessary multiplicity of trials involving avoidable inconvenience to the witnesses and avoidable expenditure of public time and money.
No corresponding advantage can be gained by the accused persons by following the procedure of separate trials.
Where, however, several offences are alleged to have been committed by several accused persons it may be more reasonable to follow the normal rule of separate trials.
But here, again, if those offences are alleged not to be wholly unconnected but as forming part of the same transaction the only consideration that will justify separate trials would be the embarrassment or difficulty caused to the accused persons in defending themselves.
We entirely agree with the High Court that joint trial should be founded on some 'principle '.
But we find it difficult to appreciate what seems to (1) A. I. R. 1954 All.
325 be the view of the High Court that because each `clause of section 239 enunciates a separate principle those principles are, so to speak, mutually ' exclusive and cannot be cumulatively resorted to for trying several persons jointly in respect of several offences even though they form part of the same transaction.
The High Court has propounded that the connection described in each of the various clauses is mutually exclusive, that no two of them can exist simulta neously in any case and that one cannot, therefore, have in any case persons connected with one another in two or more ways.
In other words, as the High Court puts it, persons included in two or more of the groups cannot all be tried together and that since there is absolutely nothing to connect one group with any other, the persons of one group cannot be tried with those of any other.
No reason has been stated in support of this view.
Let us consider whether there is anything intrinsically incompatible in combining two clauses of section 239.
Take cls.
(a) and (b).
Clause (a) says that persons accused of the same offence committed in the course of the same transaction may be charged and tried together.
Clause (b) says that persons accused of an offence and persons accused of abetment, or, of an attempt to commit such offence may also be charged and tried together.
Now, if persons A, B and C are tried for an offence of murder what intrinsic difficulty would there be in trying X, Y and Z of abetment of the same offence? The transaction in which all of them have participated is the same and the abetment by X, Y and Z of the offence committed by A, B and C would itself establish the connection of their acts with those of X, Y and Z. Next, let us take cls.
(a) and (c).
Clause (c) provides that persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of twelve months could also be charged and tried together.
Let us consider these clauses along with another illustration.
Two persons A and 326 B enter a house at night and first together commit the murder of a man sleeping there and then also his wife.
Each of them has committed two offences and each of them participated in the same offence.
Why can they not be tried jointly for both murders and why should there be two trials for the two murders ? The offences are of the same kind and must be deemed to have been committed in the course of the same transaction because of association and mutual connection.
Now, supposing in the illustration given A killed the man and B killed his wife.
Under cl.
(c) they could be tried together because the offences are of the same kind.
It would be ridiculous to say that they cannot be tried together for jointly committing the murder of the man and the wife because cl.
(a) and (c) cannot be combined.
For, without combining these two clauses their joint trial for the two offences in each of which both have participated would be impermissible.
Then take section (a) and (d).
Under cl.
(d) persons accused of different offences committed in the course of the same transaction can be tried together.
Let us suppose that a group of persons are accused of having been members of an unlawful assembly the common object of which was to overawe by sheer force another group of persons and take forcible possession of a piece of land.
Some of the members of the unlawful assembly carried axes with them while some others carried lathis and attacked the other group.
During the course of the attack one person from the second group was killed, as a rest of blows with an axe inflicted by the aggressors A, B and C. Two persons of the second group sustained grievous hurt as a result of lathi blows and one person sustained simple hurt.
Let us say that the grievous hurt was caused as a result of lathi blows given by X and Y, simple hurt was caused by lathi blows given by Z. Here, the offences committed were those under sections 147, 302, 325 and 323, I.P.C. The offences being different and the persons commiting the offences being different, they could not 327 be tried jointly only with the help of cl.
(a) of section 239.
Nor again, could they be tried jointly only with the help of cl.
Yet the transaction in which the offences were committed is the same and there is a close association amongst the persons who have committed the different offences.
What intrinsic difficulty is there in trying them all together simultaneously availing of cls.
(a) and (d) of section 239? These are enabling provisions which circumstance implies that the court may avail itself of one or more of these provisions unless doing so would amount to an infringement of any of the provisions of the Code.
All these persons can be jointly tried for offences under section 147 by recourse to cl.
So also A, B and C could be jointly tried together for an offences under section 302.
X and Y can be charged not only with offences under sections 147 and 325, I. P.C. but also under section 302 read with section 149.
Similarly Z can be charged with offence 's under sections 147, 323 and offences under section 302 read with section 149 and section 325 read with section 149.
The same offence committed by all of them is that under section 147 and all of them can be tried jointly in respect of that offence under cl.
Similarly, if we take cl.
(d) by itself all of them can be tried jointly for the different offences committed by each of them in the course of the same transaction and if cl.
(a) is unavailable they could not be tried for the offence under section 147 at the same trial.
This means that the trial for an offence under section 147 will have to be separated from the trial for the different offences committed by them.
It is difficult to appreciate what purpose would be served by separating the trial for the same offence from the trial for different offences.
To repeat, the object of the legislature in enacting section 239, Cr.
P.C. clearly was to prevent multiplicity of trials and not only would that object be defeated but an extraordinary result will ensue if the various clauses of section 239 are read disjunctively.
The reasons given by the Allahabad High Court, therefore, do not merit acceptance.
328 The decision in Singarachariar 's Case (1), has really no bearing upon the point before us.
What was held there was that sections 235 (1) and section 236 are mutually exclusive and if a case is covered by one of them it cannot be covered by the other.
In that case the question was whether a person who was first tried for an offence under section 380, I.P.C. for stealing a blank second class railway ticket from the booking office, tried, for it and acquitted, could not be tried subsequently for the offence of forgery by making entries in that ticket and using it.
The acquittal in the previous case was urged as a bar under section 403(1) of the Code to the trial for an offence under section 467, I.P.C. The contention apparently was that this was a case which fell under section 236, Cr.
P.C. and that if he had been tried alternatively for both the offences at the same trial the Court could have dealt with him under section 237, Cr.
The High Court, however, held that to be a kind of case which fell under section 235(1) of the Code and that since that was so, the provisions of section 236 were excluded.
It is difficult to appreciate how this case assists the conclusion arrived at by the High Court.
In D.K. Chandra 's Case (2) it was held that the provisions of sections 234, 235 and 236 being exceptions to section 233 must be strictly construed and that if joinder of charges did not fall under any of them it would be illegal and contrary to law.
The precise point which we have to consider here did not fall for consideration in that case i.e., whether the provisions of the various clauses of section 239 could be used together or not.
This decision is, therefore, of little assistance.
On the other band there is the decision of this Court in The State of Andhra Pradesh vs Kandinmlla Subbaiah (3), which is to the effect that where several persons had committed offences in the course of the same transactions, they could jointly be tried in respect of all those offences under section 239 of the Code of Criminal (1) A.I.R. 1934 Mad 673.
C. (2) A. I.R. , F. B. (3) [1962] 2 section R. 194.
329 Procedure and the limitation placed by section 234 of the Code could not come into operation.
There, nine persons were jointly tried for 'an offence under section 5 (1) (c) and (d) of the Prevention of Corruption Act, 1947, and section 109, I. P. C. read with s ' 420, section 466 and section 467, I. P. C. and all except one for offences under sections 420, 467/471, I.P.C. Some of them were also charged with separate offences under some of these provisions.
Two of the accused persons preferred a revision application before the High Court of Andhra Pradesh in which they challenged the charges framed against them.
The High Court allowed the revision application.
But on appeal by the State of Andhra Pradesh to this Court, this Court held that there was no misjoinder of charges, that the introduction of a large number of charges, spread over a long period was a question of propriety and that it should be left to the judge or the Magistrate trying the case to adopt the course which he thought to be appropriate in the facts and circumstances of the case.
In so far as some of the charges were concerned this Court pointed out that the Special judge who was to try the case should consider splitting them up so that the accused persons would not be prejudiced in answering the charges and defending themselves.
It is true that the question of reading the various clauses cumulatively did not specifically arise for decision in that case but the High Court had held that the first charge was an omnibus charge containing as many as 203 offences and that it was in direct violation of sections 234, 235 and 239 of the Code of Criminal Procedure.
Dealing with this matter this Court held at p. 200 : "No doubt, sub section
(1) of section 234 provides that not more than three offences of the same kind committed by an accused person within the space of 12 months can be tried at the same trial.
But then section 235 (1) provides that if in any one series of acts so connected together 330 as to form the same transaction more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence.
Therefore, where the alleged offences have been committed in the course of the same transaction the limitation placed by section 234 (1) cannot operate.
No doubt, the offence mentioned in charge No. I is alleged to have been committed not by just one person but by all the accused and the question is whether all these persons can be jointly tried in respect of all these offences.
To this kind of charges.
239 would apply.
This section provides that the following persons may be charged and tried together, namely : (1) persons accused of the same offence committed in the course of the same transaction; (2) persons accused of abetment or an attempt to commit such an offence; (3) persons accused of different offences committed in the course of the same transaction.
Clearly, therefore, all the accused persons could be tried together in respect of all the offences now comprised in charge No. 1.
This Court has thus clearly read the provisions of the various clauses cumulatively and we see no reason to read them differently.
There remains the decision of this Court in K.V. Krishna Murthy Iyer vs The State of Madras (IN on which Mr. Bhimasankaram strongly relied.
In that case this Court upheld the order of the High Court of Madras in quashing the charges in the exercise (1) A. I. R. 1954 s, a. 406. 331 of its inherent powers even before the conclusion of the trial.
It is true that there the charges were 67 in number and spread over a long period, of time.
That again was a matter which came before the High Court before conviction and not after the trial was over.
When an objection is taken at an early stage, there is time enough to rectify an error.
But in the case before us no objection was taken to multiplicity or misjoinder of charges before the learned Additional Sessions judge and it was only in the High Court that the point was raised, In such circumstances what the Court has to consider is whether prejudice has in fact been caused to the accused by reason of the multiplicity of charges or misjoinder, if any, of the charges.
This is quite clear from the provisions of section 537 of the Code as amended by Act 26 of 1955.
In Willie (William) Slaney vs The State of Madhya Pradesh (1), all the learned judges were in agreement on the point that this section and section 535 cover every case in which there is departure from the rules set out in Ch.
XIX ranging from error, omissions and irregularities in charges that are framed, down to charges that might have been framed and were not and include a total omission to frame a charge at all at any stage of the trial.
The whole question has again been examined by this Court recently in Birichh Bhuian vs The State of Bihar (2).
Subba Rao J., who delivered the judgment of the Court has stated the position thus "To summarise: a charge is a precise formula tion of a specific accusation made against a person of an offence alleged to have been com mitted by him.
Sections 234 to 239 permit the joinder of such charges under specified condi tions for the purpose of a single trial.
Such a joinder may be of charges in respect of different offences committed by a single person or several persons.
If the joinder of charges was contrary to the provisions of the Code it would (1) [1955] 2 section Co R. 1140, (2) [1963] Supp.
2S.C.R. 328 332 be a misjoinder of charges.
Section 537 prohibits the revisional or the appellate court from setting aside a finding, sentence or order passed by a court of competent jurisdiction on the ground of such a misjoinder unless it has occasioned a failure of justice.
" Even if we were to assume that there has been a misjoinder of charges in violation of the provisions of sections 233 to 239 of the Code, the High Court was incompetent to set aside the conviction of the respondents without coming to the definite conclusion that misjoinder had occasioned failure of justice.
This decision completely meets the argument based upon Dawson 's Case (1).
Merely because the accused persons are charged with a large number of offences and convicted at the trial the conviction cannot be set aside by the appellate court unless it in fact came to the conclusion that the accused persons were embarrassed in their defence with the result that there was a failure of injustice.
For all these reasons we cannot accept the argument of learned counsel on the ground of misjoinder of charges and multiplicity of charges.
Mr. Bhimasankaram, supporting the view taken by the High Court then contends that it is not permissible to frame a charge of conspiracy when the matter has proceeded beyond the stage of conspiracy and that in pursuance of it offences have actually been committed.
A similar view was expressed by the same High Court in the case which was reversed by this Court in The State of Andhra Pradesh V. Kandinalla Subbaiah (2), and it was held that conspiracy to commit an offence being itself an offence a person can be separately charged with respect to such a conspiracy.
Then this Court has observed: " Where a number of offences are committed by several persons in pursuance of a conspiracy it is usual to charge them with those (1) (1960)1 All, E. R. 558 (2) , 333 offences as well as with the offence of conspiracy to commit those offences.
As an instance of this we may refer to the case in section Swamirathnam vs State of Madras (1).
Though the point was not argued before this Court in the way it appears to have been argued. . . before the High Court of Andhra Pradesh, this Court did not see any thing wrong in the trial of several persons accused of offences under section 120 B and s.420.
I.P.C. We cannot, therefore, accept the view taken by the High Court of Andhra Pradesh that the charge of conspiracy was bad.
If the alleged offences are said to have flown out of the conspiracy the appropriate form of charge would be a specific charge in respect of each of those offences along with the charge of conspiracy." (pp.
201 202).
This decision is sufficient to dispose of the point under consideration.
In Swamirathnam 's case (1), which is a decision of this Court certain persons were tried for the offence of the conspiracy to cheat the members of the public and for specific offences of cheating in pursuance of that conspiracy.
It was urged before this Court that there was misjoinder of charges and persons Negativing the contention this Court held that the charge as framed disclosed a single conspiracy although spread over several years, that there was one object of the conspiracy and that was to cheat the members of the public, that the fact that in the course of years other joined the conspiracy or that several incidents of cheating took place in pursuance of the conspiracy did not have the effect of splitting the conspiracy into several conspiracies.
that the several instances of cheating being alleged to be in pursuance of that conspiracy were parts of the same transaction and, therefore, the joint trial of the accused (1) A. I. R. , 343, 344.
334 persons for the different offences was not vitiated.
No doubt, there is no discussion there as to the question whether the various clauses of section 239 could be combined or as to the impact of the provisions of section 233 to 236 on those of section 239.
The actual decision of the case is, however, directly opposed to the contention now put forward before us.
This decision has been followed in Natwarlal Sakarlal Mody vs The State of Bombay (1).
In that case the impact of section 120 B, I.P.C. on sections 233 and 239 of the Code of Criminal Procedure was considered by this Court and this Court observed: "The combined effect of the three provisions (sections 235, 236 and 239) is that if there is a criminal conspiracy to commit different offences, the persons who are members of that conspiracy may be charged and tried together but the necessary condition for invoking the provisions of section 239 (d) is that the offence should have been committed in the course of one transaction i.e., in the present case one and the same conspiracy.
" Here again, the question of clubbing together of the various provisions of cls.
(a) to (d) of section 239 was not raised expressly in the argument before the Court.
But the ultimate decision of the case would negative such argument.
Mr. Bhimasankaram then relying upon the decision in R. vs Dawson (2), contended that in any event it was not desirable to try the respondents at the same trial for as many as 83 offences and pointed out that these observations had received the approval of this Court in The State of Andhra Pradesh vs Kandimalla Subbaiah (3).
In the first place there the trial had not actually begun.
Again, what was said by this Court was that it is undesirable to complicate a trial by introducing a large number of charges (1) Crl.
A. No. III of 1959 decided on January 19, 1961.
(2) , (3) 335 spread over a long period but even so this was a question of propriety which should be left to the discretion of the judge or Magistrate trying the case.
Objection was taken very seriously by Mr. Bhimasankaram to the charge of conspiracy framed in this case.
That charge reads thus : "That both of you along with K.V. Ramana, exhibit Senior Accountant of the Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam (approver) and others, known or unknown, in or about April 1, 1947, at Visakhapatnam, agreed to do illegal acts, to wit, commit criminal breach of trust in respect of the funds belonging to the Vizagapatam Electric Supply Corporation Ltd., Vizagapatnam; and to screen yourselves from detection of the same, to wilfully, and with intent to defraud, falsify the accounts of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam and that pursuant to the said agreement, you committed criminal breach of trust in respect of funds of the said Vizagapatam Electric Supply Corporation Ltd., Visakhapatnam to the extent of over Rs 3,20,000 and falsified the said accounts between April, 1947 and March, 1952, and also used forged documents as genuine], offences punishable under Sections 409, Indian Penal Code and 477 A, Indian Penal Code and 471 read with section 467, Indian Penal Code ; and thereby committed an offence of criminal conspiracy punishable under Section 120 B of the Indian Penal Code and within my cognizance.
" Adverting to the portion which we have bracketed, his first objection was that the charge comprises within it not merely the conspiracy but also what 336 was in fact done in pursuance of the conspiracy.
His next objection was that it brought within its purview all the various offences which were alleged to have been committed by the respondents.
The third objection was that no charge of conspiracy could have been framed after the conspiracy had borne its fruits.
The last objection was that the charge of conspiracy was added to the charge sheet very late.
We shall first deal with the third point.
The offence of conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy the liability of the conspirators for the conspiracy itself cannot disappear.
In the Indian Penal Code, as originally enacted, conspiracy was not an offence.
Section 120 B which makes criminal conspiracy punishable was added by the Indian Criminal Law Amendment Act, 1913 (8 of 1913) along with section 120 A. Section 120 A defines conspiracy and section 120 B provides for the punishment for the offence of conspiracy.
Criminal conspiracy as defined in section 120 A and consists of an agreement to do an illegal act or an agreement to do an act which is not illegal by illegal means.
Section 120 B provides that whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards shall be punishable in the same manner as if he has abetted such offence unless there was an express provision in the Code for the punishment of such conspiracy.
Criminal conspiracy was, however, not an unknown thing before the amendment of the Indian Penal Code in 1913.
But what the amendment did was to make that conspiracy itself punishable.
The idea was to prevent the commission of crimes by, so to ,speak, nipping them in the bud.
But it does not follow that where crimes have been committed the liability to punishment already incurred 337 under section 120 B by having entered into a criminal conspiracy is thereby wiped away.
No doubt, as already stated, where offences for committing which a conspiracy was entered into have actually been committed it may not, in the particular circumstances of a case, be desirable to charge the offender both with the conspiracy and the offences committed in pursuance of that conspiracy.
But that would be a matter ultimately within the discretion of the court before which the trial takes place.
In so far as the fourth point is concerned, that would have a bearing not on the form of the charge but on the credibility of the evidence bearing on the point of conspiracy.
As we are remanding the appeal to the High Court for a fresh decision after full consideration of the evidence adduced in the case it would be open to it to consider this matter particularly while judging the credibility of the evidence of the approver.
In so far as the portion included in the bracket is concerned we agree with the learned counsel that it should not have found place there.
The ideas, however, of the committing magistrate in stating all that is said there appears to have been merely to describe the conspiracy and do nothing more.
We do not think that either that or the other objection raised, that is, that the charge embraces within it all the offences said to have been committed by the respondents can properly.
be said to vitiate the charge.
The object in saying what has been set out in the first charge was only to give notice to the respondents as to the ambit of the conspiracy to which they will have to answer and nothing more.
Even assuming for a moment that this charge is cumbersome in the absence of any objection by the respondents at the proper time and in the absence of any material from which we could infer prejudice, they are precluded by the provisions of section 225 from complaining about it at any rate after their conviction by the trial court.
338 Coming to the next point of Mr. Bhimsankaram regarding the abuse of powers under section 342 his first contention was that long and involved questions were put to the respondents.
His second contention was that reference was made to a number of documents in some of these questions and those documents were not made available to the respondents for answering those questions.
The third contention was that the questions were involved, confusing and bordered on cross examination.
Finally he said that the court did not perform its duty under section 342 (4) of the Code as amended as it failed to bring to the notice of the respondents that they may, if they chose, give evidence in their defence.
In support of his first contention he referred to questions Nos. 4, 8, 9, 10 and 20 put to the respondent No. I and question No. 12 put to the respondent No. 2 and tried to show that those questions rolled up a large number of separate questions and that it could not have been possible for the respondents to give any rational answers to those questions.
We have read the questions and so also the answers.
While we are disposed to agree with learned counsel that the questions embrace a number of matters and that it would have been better if those matters had been made the subjects of separate questions, the answers given by the respondents clearly show that they understood the questions and wherever possible they have given complete answers to those questions.
That is to say, they have given their explantion regarding the circumstances appearing in the evidence set out in the questions and wherever that was not feasible they have said that they would do so in their written statements.
In fact written statements have been filed by each of them in which every point left over has been fully answered.
We are informed that the questions had been prepared before hand by the learned Additional Sessions judge, copies thereof were made available to 339 each of the respondents and it was with reference to those copies that they gave their answers in the court.
A pointed reference was made to question No. 20 put to respondent No. I which contains as many as 22 sub heads and it is said that it was an extremely unfair and embarrassing question.
What the learned Additional Sessions judge has done is to err on the side of over cautiousness by putting every circumstance appearing in the evidence to the respondents for eliciting their explanations.
His object was to obviate the possibility of a complaint before the appellate court that they were denied the opportunity of explaining the circumstances appearing in evidence against them because of defective questions.
Nor again, do we think that there is any substance in the complaint made that the respondents had no opportunity of referring to the documents to which reference has been made in certain questions.
No objection was taken on their behalf before the learned Additional Sessions judge and from the manner in which they have answered the questions there is no doubt that they must have had opportunity to look at the relevant documents and answer the questions.
We are also satisfied that there is no substance in the complaint that the questioning bordered on cross examination.
Undoubtedly the learned Additional Sessions judge has questioned the respondents very fully and elaborately but to say that this bordered on cross examination is wholly unjustifiable.
The object of the learned Additional Sessions Judge quite clearly was, as already stated, to leave no loophole for a complaint to be made before the appellate court of incomplete or insufficient examination under section 342.
Finally we are clear that it was not the duty of the court to draw the pointed attention of the respondents to the provisions of sub section
(4) of section 342 and tell them that they may, if they chose, enter the witness box.
It is true that by introducing this provision 340 the disability placed on an accused person in respect of giving evidence on oath in his own defence has been removed and to that extent such person is placed on par with an accused person under the English law.
The new provision, however, does no more than lift the ban and does not impose a duty on the court to draw the attention of an accused person to its contents.
Apart from that, the respondents were represented by counsel at the trial who knew very well what the law was.
No complaint was made by the respondents even in appeal that they were ignorant of their right, that had they known about it they would have given evidence on oath in their defence and that because of this they have been prejudiced.
In the circumstances this point must also be rejected as being without substance.
The irrelevant evidence to which Mr. Bhimasankaram referred was certain account books.
The entries in the.
account books of VESCO show that certain sums of money were paid to various parties, Crompton Engineering Co., Lumin Electric Co., D. Brothers, Radio and Electrical, Madras, Vizagapatam Municipality, P. V. Ramanayya Bros., and Andhra Power System.
They also show payment case was that the payments which were entered in the account of VESCO do not find a place in the account books of the corresponding firms or authorities because they were never made by VESCO.
The High Court has pointed out that the main evidence on which the prosecution rests its case that the amount represented by the entries against these various firms were in.
fact misappropriated by the, respondents in the circumstance that there are no corresponding entries in the account books of those firms.
The argument before the High Court was and before us is that, the absence of an entry cannot of electricity duty to Government.
The prosecution 341 be established by reference to section 34 of the Indian Evidence Act which reads thus: "Entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability." This section appears in a group of sections headed "Statements made under special circumstances".
What it does is to make entries in books of account regularly kept in the course of business relevant in all proceedings in a court of law.
These entries are, however, not by themselves sufficient to charge any person with liability.
Therefore, when A sues B for a sum of money it is open to him to put his account books ' in evidence provided they are regularly kept in the course of business and show by reference to them that the amount claimed by him is debited against B. The entry though made by A in his own account books, and though it is in his own favour is a piece of evidence which the court may take into consideration for the purpose of determining whether the amount referred to therein was in fact paid by A to B. The entry by itself is of no help to A in his claim against B but it can be considered by the court along with the evidence of A for drawing the conclusion that the amount was paid by A to B.
To this limited extent entries in the account books are relevant and can be proved.
Section 34 does not go beyond that.
It says nothing about non existence of entries in account books.
We, therefore, agree with the High Court that the account books of the various concerns to whom payments are said to have been made by the respondents are not by themselves evidence of the fact that no payments were received by them.
The decision in Queen Empress vs Grees Chunder Banerjee (1), upon which reliance (1) Cal.
342 is placed by the High Court in support of its view is also to that effect.
Similarly in Ram prashad Singh vs Lakhpati Koer (1).
Lord Robertson during the course of the hearing has observed that no inference can be drawn from the absence of any entry relating to any particular matter which observation supports the view taken in Queen Empress vs Girish Chander Banerjee (2).
That, however, is not the only provision to be considered.
There is section II of the Evidence Act which provides that facts not otherwise relevant are relevant if they are inconsistent with any fact in issue or relevant fact.
Some of the facts in issue in this case are whether payments of certain sums of money were made to Crompton Engineering Co., and other firms or authorities.
These are relevant facts.
Absence of entries in their account books would be inconsistent with the receipt of the accounts and would thus be a relevant fact which can be proved under section 11.
The fact that no payments were received by those firms has been deposed to by persons connected with those firms and whose duty it was to receive and acknowledge amounts received by the firms or who were in charge of the accounts of these firms.
For the purpose of showing that no amounts were received by the firms, their account books would thus be as relevant as the VESCO account books for the purpose of showing the contrary.
Similarly there is section 5 of the Evidence Act which reads thus: "Evidence may be given in any suit or procee ding of the existence or non existence of every fact in issue and of such other facts as are hereinafter declared to be relevant, and of no others.
" It is the case of the prosecution that the alleged payments were never made by VESCO to the various firms.
It is also their case that these firms maintain their accounts in the regular course of business and it is their practice to enter in those accounts all payments received by them.
Both the sets of facts are (1) Cal.
231, 247.
(2) C.L 1024.
343 relevant, that is, non receipt of the amounts by the firms and non existence of entries in their account books pertaining to those amounts.
It is permissible, therefore, for the prosecution to lead evidence to ,Drove both these facts.
The best evidence to prove the latter set of facts consists of the account books of the firms themselves.
It is under these provisions that the account books of the firms must be held to be relevant.
What value to attach to them is another matter and would be for the Court of fact to consider.
It may further be mentioned that the account books of VESCO show certain payments made to Billimoria & Co. of Kharagpur.
Papers seized by the police include receipts purporting to have been signed by one J. J. Billimoria on behalf of the firm.
The prosecution case is that these receipts are forged documents and the entries in the account books of VESCO are false.
One of the partners of the firm was examined by the prosecution as a witness in the case and he produced the account books of the firm.
Those account books are in Gujrati and he stated in his evidence that the accounts were regularly kept and that there were no entries in them corresponding to the entries in the VESCO accounts.
The High Court held that since the account books were not translated they are not admissible in evidence.
The High Court was clearly wrong in so holding.
In coming to this conclusion it has relied upon the provisions of section 356 (2A) of the Code of Criminal Procedure.
That section reads thus: "When the evidence of such witness is given in any other language, not being English, than the language of the Court, the Magistrate or Sessions judge may take it down in that language with his own hand, or cause it to be taken down in that language in his presence and hearing and under his personal direction and superintendence, and an authenticated translation of 344 such evidence in the language of the Court or in English shall form part of the record." This provision relates only to the oral evidence adduced in a case and not to documentary evidence.
Mr. Bhimasankaram, therefore, very rightly did not support the view of the High Court.
In the circumstances we wish to say nothing further on the point.
We may, however, point out that Billimoria himself gave his evidence in English.
Another point urged by Mr. Bhimasankaram was that as many as 2,000 documents were "dumped" by the prosecution in this case out of which 1600 documents were not sought to be proved by it.
Further, 64 documents were missing from the records when they came to the High Court and that this has caused serious prejudice to the respondent.
No objection, however, was taken in the courts below on this score and in the absence of any prejudice to the respondents we do not think that we should take notice of the complaint made by Mr. Bhimasankaram.
The third point stressed by him was that the approver was allowed to refresh his memory, while deposing in the case, by referring extensively to the account books and various documents produced in the case.
This, according to him, was an absue of the provisions of section 159 of the Evidence Act.
Now, section 159 expressly enables a witness while under examination to refresh his memory by referring to any writing made by himself at the time of the transaction concerning which he is being questioned or soon afterwards, or to a writing made similarly by another person and read by the witness immediately or soon after the writing was made.
Section 160 provides that a witness may also testify to the facts mentioned in any such document as is mentioned in section 159.
The complaint of Mr. Bhimasankaram is that the approver should have been questioned 345 about the various facts which were sought to be established through his evidence and it was only if and when he was in a difficulty that he should have been allowed to refer to the account books.
Instead of doing that what he was permitted to do was just to prove the various documents or read those documents and then depose with reference to them.
In our opinion, where a witness has to depose to a large number of transactions , and those transactions referred to are or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents while answering the questions put to him in his examination.
He cannot be expected to remember every transaction in all its details and section 160 specifically permits a witness to testify the facts mentioned in the documents referred to in section 159 although he has no recollection of the facts themselves if he is sure that the facts were correctly recorded in the document.
That is precisely what happened in this case and we do not think that the Additional Sessions judge adopted a procedure which was either a violation of law or was an abuse of the power of the Court.
The next point is a formidable one.
According to Mr. Bhimasankaram, the pardon tendered to the approver was illegal and if the pardon is illegal his evidence is wholly inadmissible.
Further, according to him, the evidence of the approver was found by the Additional Sessions judge to be unreliable and therefore, the first condition referred to in Sarwan Singh vs The State of Punjab (1), was not satisfied.
For all these reasons the evidence of the approver must be left out of account.
If it is left out of account, he contends, there is nothing left in the prose cution case, because, as pointed out by the Additional Sessions judge himself the evidence of the approver is the pivot of the prosecution case.
(1) ; 346 The pardon is stated to be illegal for two reasons.
The first reason is that none of the offences alleged to have been committed falls within section 337 of the Code of Criminal Procedure and the second reason is that the pardon was granted by an authority not empowered to grant it.
Section 337 (1) as it stood before its amendment by Act 26 of 1955 read thus "In the case of any offence triable exclusively by the High Court or Court of Session, or any offence punishable with imprisonment which may extend to ten years, or any offence punishable under section 211 of the Indian Penal Code with imprisonment which may extend to seven years, or any offence under any of the following sections of the Indian Penal Code namely, sections 161, 165, 165A, 216A, 369, 401, 431, 435 and 477 A, the District Magistrate, a Presidency Magistrate, a sub divisional Magistrate or any Magistrate of the first class may, at any stage of the investigation or inquiry into, or the trial of the offence, with a view to obtaining the evidence of any person supposed to have been directly or indirectly concerned in or privy to the offence, tender a pardon to such person on condition of his making a full and true disclosure of the whole of the circumstances within his knowlege relative to the offence and to every other person concerned, whether as principal or abettor, in the commission thereof : Provided that, where the offence is under inquiry or trial, no Magistrate of the first class other than the District Magistrate shall exercise the power hereby conferred unless he is the Magistrate making the inquiry or holding the trial, and, where the offence is under investigation, no such Magistrate shall 347 exercise the said power unless he is a Magistrate having jurisdiction in a place where the offence might be inquired into or tried and the sanction of the District Magistrate has been obtained to the exercise thereof." His contention is that where none of the offences is exclusively triable by the High Court or the Court of Sessions pardon could be granted only if the offences are punishable with imprisonment which could extend to ten years but not if a higher punishment were provided for them.
Here, one of the offences alleged against the respondents is criminal breach of trust punishable under section 409, I.P.C. It is not exclusively triable by a Court of Sessions and the punishment as set out in the 7th column of Schedule II, Cr. P. C. was transportation for life or imprisonment of either description for ten years and fine.
He contends that since the offence is punishable with transportation for life, section 337 (1) could not be availed of for granting pardon to the approver.
It seems to us that it would not be correct to read section 337 (1) in the way sought by learned counsel.
The very object of this provision is to allow pardon to be tendered in cases where a grave offence is alleged to have been committed by several persons so that with the aid of the evidence of the person pardoned the offence could be brought home to the rest.
The gravity is of course to be determined with reference to the sentence awardable with respect to that offence.
On the strength of these considerations Mr. Chari for the State contends that if the words "any offence punishable with imprisonment which may extend to 10 years" were interpreted to mean offences which were punishable with imprinsonment of less than 10 years grave offences which are not exclusively triable by a court of Sessions will be completely out of section 337 (1).
He suggests that this provision can also be reasonably 348 interpreted to mean that where the offences are punishable with imprisonment exceeding 10 years pardon may be granted to the approver.
No doubt, if this interpretation is accepted the object of the section, that is, to embrace within it the graver offences, would be fulfilled, but we wish to express no opinion on it.
For, the pardon granted in this case can be regarded as being within the ambit of section 337 (1) for another reason.
It will be noticed that transportation for life was not the only punishment provided for an offence under section 409 of the Indian Penal Code even before the amendment made to the Indian Penal Code by section 117 of the Act 26 of 1955, the other alternative being imprisonment up to 10 years.
Therefore, since the offence under section 409 was not merely punishable with transportation for life but alternately also punishable with imprisonment which could extend to 10 years, section 337 (1) would apply.
This section does not expressly say that the only punishment provided for the offence should be imprisonment not exceeding 10 years.
The reason why two alternative maximum sentences are given in col. 7, that is, transportation for life (now imprisonment for life) and imprisonment not exceeding 10 years appears to be that the offence is not exclusively triable by a court of session and could also be tried by a Magistrate, who, except when empowered under section 30 would be incompetent to try offences punishable with transportation for life (now imprisonment for life) and the further reason that it should be open to the court of Session, instead of awarding the sentence of transportation for life to a convicted person to award him imprisonment in a jail in India itself for a period not execeeding 10 years.
Now, of course, by the amendment made by section 117 of Act 26 of 1955 for the words "transportation for life" the words "imprisonment for life" have been substituted, but the original structure of all the sections now amended continues.
That is why they read rather queer but even so they serve the purpose 349 of allowing certain offences triable by a court of Session, to be triable also by Magistrates of the First Class.
Be that as it may, there is no substance in the first ground.
What we have said about pardon in respect of an offence under section 409 would apply equally to that for one under section 120 B because the punishment for it is the same as that for the offence under section 409.
The offence under section 467 read with section 471 is punishable with imprisonment for life or imprisonment of either description for a period of 10 years but it is exclusively triable by a court of Session and, therefore, in so far as such offence is concerned the argument of Mr. Bhimasankaram would not even have been available.
As regards the offence under section 477 A, it is one of those sections which are specifically enumerated in section 337 (1) and the argument advanced before us and which we have rejected would not even be available with regard to the pardon in respect of that offence.
It is true that the respondent No. I alone was convicted by the Additional Sessions judge of this offence and the offence under section 467 read with section 471 but the validity of a pardon is to be determined with reference to the offence alleged against the approver alone and not with reference to the offence or offences for which his associates were ultimately convicted.
Coming to the next ground of attack on the validity of pardon, the argument of Mr. Bhimasankaram is that whereas section 337 (1) speaks of pardon being granted by a District Magistrate, or Presidency Magistrate, a Sub Divisional Magistrate or any Magistrate of First Class, except in cases where an enquiry or trial was pending before another Magis tratc, the pardon here was granted by the Additional District Magistrate in a case where an enquiry was pending before the District Magistrate and is, therefore, illegal and of no avail.
He contends that 350 section 337 (1) speaks of the District Magistrate which expression does not include an Additional District Magistrate.
Mr. Bhimasankaram 's argument on the point may be summarised thus : Such a power cannot be conferred upon an Additional District Magistrate because section 337 (1) does not contemplate grant of pardon by an Additional District Magistrate and that the Additional District Magistrate would have no status other than that of a Magistrate, First Class.
No doubt, under entry (9 a) in Part III of Sch.
III to the Code a Magistrate, First Class, has the power to grant pardon under section 337 but it is limited by the proviso thereto to certain classes of cases.
A case under enquiry or trial before another magistrate does not fall in any of these classes.
Therefore, a pardon granted by him in such a case would be illegal.
The Magistrate before whom the enquiry or trial is proceeding or the District Magistrate would be the only authorities competent to grant a pardon in such a case.
Alternatively, the State Government has not made any directions under sub section
(2) of section 10 specifying the powers of the District Magistrate which would lie exercisable by the Additional District Magistrate concerned.
In order to appreciate and consider the argument it is desirable to bear in mind the changes in the magisterial set up in the former province of Madras which comprised within it the district of Visakhapatnam.
By Government Order No. 3106 dated September 9, 1949 the Government of the Province of Madras issued certain instructions to the Magistrates in pursuance of the separation of the judiciary from the executive.
It divided the magistrates into two groups, Judicial magistrates and executive magistrates.
The latter category comprises of the executive officers of the Revenue Department, on whom the responsibility for the maintenance of law and order was to continue to rest.
, Para 4 of the instructions provides 351 ". . .
To enable them to discharge this respon sibility, these officers will continue to be magistrates.
The Collector, by virtue of office, will retain some of the powers of a District Magistrate and will be called the 'Additional District Magistrate.
To distinguish him from his Personal Assistant, he may be called 'Additional District Magistrate (Independent) '.
He will continue to be the Head of the Police.
Similarly, the Revenue Divisional Officers will be exofficio First Class Magistrates, and the Tahsildars and the Deputy Tahsildars will be ex officio Second Class Magistrates.
The extent of their magisterial powers will be as indicated in the Schedule of allocation of powers.
They will exercise these powers within their respective revenue jurisdictions.
" Para 5 provides that as officers of the Revenue Department, those magistrates would be under the control of the Government through the Board of Revenue.
The Additional District Magistrates (Independent) would also be under the control of the Government through the Board of Revenue.
The category of judicial Magistrates was constituted of the following: (1) District Magistrate; (2) Sub divisional Magistrates; (3) Additional First Class Magistrates and (4) Second Class Magistrates (Sub magistrates).
The District Magistrate was constituted as the principal magistrate of the District and as such was entrusted with the duty of general administration and superintendence and control over the other judicial magis trates in the district.
In addition to his general supervisory functions and the special powers under the Code of hearing revision petitions, transfer petitions, appeals from Second Class Magistrates and the like, the District Magistrate was also to be assigned a specific area, the cases arising from which would be disposed of normally by himself.
This body of magistrates was made subordinate to the High Court.
Till the separation between the judiciary and the executive was effected the Collector as the head of the Revenue Department was also the 352 District Magistrate.
Consequent on the separation he became only an Additional District Magistrate.
Part IV of the Government order deals with the allocation of powers between the judicial and executive magistrates.
Para 19(3) occurring in this part deals with allocation of powers under the provisions of the Code otherwise than these referred to in the earlier paragraphs.
It specifically provides that the power to tender pardon udder section 337 shall be exercised by executive magistrates except in cases referred to in the proviso to sub section
(1) of that section, in which case a judicial magistrate may exercise that power.
In spite of the Government order all Magistrates who have, under Sch.
III to the Code of Criminal procedure the power to grant pardon will continue to have that power and, therefore, a pardon granted by a judicial Magistrate in contravention of the Government order will not be rendered invalid.
However, that is not the point which is relevant while considering the argument of Mr. Bhimasankaram.
His point is that the proviso to section 337(1) confers the power on "the District Magistrate" to grant pardon in a case pending before another Magistrate and not on "a District Magistrate" and, therefore, his power to grant pardon in such cases cannot be conferred under sub s.(2) of section 10 on an Additional District Magistrate.
According to him, under that section only the powers of "a District Magistrate" meaning thereby only the powers under Entry 7 (a) in Part V of Sch.
III as distinguished from the power under the proviso to section 337 (1) can be conferred upon an Additional District Magistrate.
Secondly, according to him, no direction has in fact been shown to have been made by the State Government conferring upon an Additional District Magistrate the power of the District Magistrate to grant pardon.
In our opinion, there is no subtance in the contention.
The power conferred by sub section
(1) of section 337 on the different clauses of Magistrates is of the same character.
353 The power to grant pardon in a case pending before another Magistrate is no doubt conferred by the proviso only on the District Magistrate.
But Entry 7 (a) in Part V of Sch.
III when it refers to the power of a District Magistrate under section 337 (1) does not exclude the power under the proviso.
There is, therefore, no warrant for drawing a distinction between the powers of "the District Magistrate" and the powers of " 'a District Magistrate." The power of a District Magistrate to grant Pardon has been specifically conferred on Additional District Magistrates as would appear from section No. 37 of Sch.
III of the Government Order, which reads thus : "SI.
Concurrent No. magis magis jurisdic trate trate tion 37 337(1) 2nd paragraph (proviso) Remarks Reference to the District Magistrate in the proviso should be construed as reference to the Executive District Magistrate.
Reference to the Magistrate making the enquiry or holding the trial etc., should be construed as a reference to the judicial Magistrate.
" No doubt, here the reference is to the Executive District Magistrate.
But it is clear from the other part of the Government Order that what is meant by that is the Additional District Magistrate (Independent).
This was., and, we are told, is being regarded as a direction of the Government falling under subs.
(2) of section 10 of the Code.
Whether the interpretation is correct or not, we feel little doubt that the 354 action of the Additional District Magistrate (Independent) Visakhapatnam in granting a pardon to the approver in this case though it was pending enquiry before the District Magistrate (judicial), was bona fide.
A pardon granted bona fide is fully protected by the provisions of section 529, Cr. P. C. The High Court has not considered any of the provisions to which we have referred but held that as the offence was being equired into by the District Magistrate,the Additional District Magistrate could not usurp the functions of the former and grant a pardon.
Had it done so, it would not have come to this conclusion.
We are, therefore, unable to accept it.
Mr. Chari for the State advanced a further argument before us in case his main argument that the pardon was valid failed and said that the approver, even if we ignore the pardon, was a competent witness.
In support of his contention he strongly relied upon the decision in Kandaswamy Gounder In re : the appellant (1), and the cases referred to therein, in particular the decision in Winson vs Queen (2).
What has been held in all these cases is that where the trial of a person who was charged with having committed an offence or offences jointly with several persons is separated from the trial of those persons, he would be a competent witness against them though of course there will always be the question as to what weight should be attached to his evidence.
Mr. Chari then referred to section 133 of the Evidence Act and pointed out that this section clearly makes an accomplice evidence admissible in a case and that an approver whose pardon is found to be invalid does not cease to be an accomplice and contends that he is, therefore, as competent a witness as he would have been if he had not been granted pardon at all and not been put on trial.
Learned counsel further pointed out that the decisions show (1) I.L.R. , (2) (1866) L.R.
I Q.B. 355 that however undesirable it may be to adduce the evidence of a person jointly accused of having committed an offence along with others, his evidence is competent and admissible except when it is given in a case in which he is being actually tried.
This legal position does not, according to him, offend the guarantee against testimonial compulsion and he points out that that is the reason why an accused person is not to be administered an oath when the court examines him under section 342 (1) for enabling him to explain the circumstances appearing in evidence against him.
If pardon is tendered to an accused person and eventually it is found that the pardon is illegal such person is pushed back into the rank of an accused person and being no more than an accomplice would be a competent witness.
The question raised is an important one and requires a serious consideration.
Mr. Chari in support of his contention has cited a large number of cases, Indian as well as English, and certain passages from Halsbury 's Laws of England.
But in the view we take about the legal validity of the pardon tendered, we do not wish to pronounce one way or the other on this very interesting question.
Now, as regards the reliability of the approver.
It is no doubt true that an approver has always been regarded as an infamous witness, who, on his own showing has participated in a crime or crimes and later to save his own skin, turned against his former associates and agreed to give evidence against them in the hope that he will be pardoned for the offence committed by him.
The High Court seems to think that before reliance could be placed upon the evidence of the approver it must appear that he is a penitent witness.
That, in our opinion, is not the correct legal position.
The section itself shows that the motivating factor for an approver to turn, what in England is called "King 's evidence" is the hope of pardon and not any noble sentiment like contrition 356 at the evil in which he has participated.
Whether the evidence of the approver should in any given case be accepted or not will have to be determined by applying the usual tests such as the probability of the truth of what he has deposed to the circumstances in which he has come to give evidence whether he has made a full and complete disclosure, whether his evidence is merely self exculpatory and so on and so forth.
The court has, in addition, to ascertain whether his evidence has been corroborated sufficiently in material particulars.
What is necessary to consider is whether applying all these tests we should act upon the evidence of the approver should be acted upon.
We however, find that certain documents upon which Mr. Chari wants to rely are not included in the paper book.
It would take considerable time if we were to adjourn this matter now and give an opportunity to the parties to include those documents on record.
The better course would be for us to set aside the acquittal of the respondents and send back the appeal to the High Court ?or being decided on merits.
The High Court will of course be bound by the finding which we have given on the questions of law agitated before us.
What it must now do is to consider the entire evidence and decide for itself whether it is sufficient to bring home all or any of the offences to the respondents.
We may mention that the High Court 's observation that the approver 's evidence was treated as unreliable by the learned Additional Sessions judge is not correct.
Of course, the view taken by the Additional Sessions judge is not binding on the High Court.
But it should remove from its mind the misconception that the Additional Sessions judge has not believed him.
There is another thing which we would like to make clear.
The decision in Sarwan Singh vs The State of Punjab (1), on which reliance has been placed by the High Court has been explained by this Court in the case of (1) 357 Maj.
E. G. Barsay vs The State of Bombay (1).
This Court has pointed out in the latter decision that while it must be shown that the approver is a witness of truth, the evidence adduced in a case cannot be considered in compartments and that even for judging the credibility of, the approver the evidence led to corroborate him in material particulars would be relevant for consideration.
The High Court should bear this in mind for deciding whether the evidence of the approver should be acted upon or not.
Then again it would not be sufficient for the High Court to deal with the evidence in a general way.
It would be necessary for it to consider for itself the evidence adduced by the prosecution on the specific charges and then to conclude whether those charges have been established or not.
The prosecution would be well, advised if, instead of placing the evidence on each and every one of those large number of charges against the respondents, it chooses to select a few charges under each head other than the head of conspiracy and concentrates on establishing those charges, this would save public time and also serve the purpose of the prosecution.
With these observations we set aside the acquittal of the respondents and remit the appeal to the High Court for decision on merits in the light of our observations.
Appeal allowed.
Case remanded.
| An industrial dispute was referred by the Government of Uttar Pradesh for adjudication to the Adjudicator, Kanpur.
,Me Adjudicator held that the Malis were workmen under the U.p.
but they were not Industrial employees and hence were not entitled to claim dear food allowance under the Government order dated December 6, 1948.
The claims of the Malis with regard to weekly holidays and leave with wages were also rejected by the Adjudicator.
725 Two crow appeals were filed against the order of the Adjudicator before the Labour Appellate Tribunal.
The appeal of the appellant was dismissed.
As regards the appeal of respondents, the Tribunal gave the Malis benefit of dear food allowance.
Their claim for leave with wages was also allowed on the ground of social justice.
However, their claim for weekly holiday was rejected.
The appellant filed a writ petition in the Allahabad High Court but that was dismissed as in fructuous.
The appellant came to this court by special leave.
The contentions raised by the appellant in this court were that the Malis were not workers within the meaning of section 2 of the U.P. , that Malis were not industrial employees within the meaning of Government order dated December 6, 1948, and hence were not entitled to dear food allowance and that the Labour Appellate Tribunal should not have granted the demand of the respondents for leave on ground of fair play and social justice.
Held that the Malis were workers within the meaning of section 2, of the U.P.
They were employed by the appellant, were paid by it and were, subject, to its control and supervision and *discharged the function of looking after the properties of the appellant.
Their conditions, of service were also determined by the appellant and the continuance of their service also depended upon the pleasure of the appellant.
The bungalows and gardens on which they worked were a kind of amenity supplied by the appellant to its officers.
Hence, the Malis were engaged in operations which were incidentally connected with the main industry carried on by the employers The case of the Malis was similar to that of the bus drivers.
The relation of the work carried on by the Malis with the industry was not remote, indirect or far fetched.
The employee who is engaged in any work or operation which is incidentally,connected with the main industry of the employer is a workman, provided the other requirements of section 2 (s) of the industrial Disputes Act are satisfied.
Held also, that the Malis were industrial employees within the meaning of the Government order dated December 6, 1948, and hence were entitled to claim the benefit of dear food allowance.
The Tribunal was in error in limiting the scope of the expression, " Industrial , employees" by reference to the definition of the word "worker" as given in the Factories Act, 726 Held also, that the Tribunal was justified in granting the demand of the respondents for leave on grounds of fair play and social justice.
The concept of social justice has now become such an integral part of industrial law that it is idle for any party to suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes.
The concept of social justice is not narrow, one sided or pedantic and is not confined to industrial adjudication alone.
Its sweep is comprehensive.
It is founded on the basic ideal of socioeconomic equality and its aim is to assist the removal of socioeconomic disparities and inequalities.
In dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach.
It endeavors to resolve the competing claims of employers and employees by finding a solution which is just and fair to both parties with the object of establishing harmony between capita i labour and relationship.
Shri Bhikari, Kanpur vs Messrs. Cooper Allen & Co., Kanpur, ; The Upper India Chini Mills Mazdoor Union vs The Upper India Sugar Mills ; The Suti Mill Mazdoor Sabha, Kanpur vs Messrs.
The British India Corporation Ltd., Kanpur, ; J.K. Iron& Steel Co. Lid, Kanpur vs The Iron and Steel Masdoor Union, Kanpur, ; Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; ; Messrs. Crown Aluminium Works vs Their Workmen, ; and The State of Mysore vs The Workers of Gold Mines, [1959] S.C.R. 895, referred to.
|
ivil Appeal No. 11 89 of 1982.
From the Judgment and order dated the 18th December, 1981 of the Gauhati High Court in Election Petition No. 1 of 1980.
S Rangarajan, S.K. Nandy and section Parikh for the Appellant.
A.K Nag for the Respondent.
The Judgment of the Court was delivered by FAZAL ALI, J.
In this election appeal the only point for determination is whether at the time when respondent No. I filed his nomination paper he held a subsisting contract with the Government for widening the PLP road.
While it is true that there was such a contract in existence prior to 30:11.1979, respondent No. 1 wrote a 864 letter on 30.11.1979 to the concerned Executive Engineer stating that he was closing the said contract.
The last date for filing nomination was 10.12.1979.
It is argued that the contents of the said letter does not have the effect of putting an end to the contract.
After going through the contents of the letter it is absolutely clear that the contractor unilaterally put an end to the contract and informed the Department concerned accordingly and also he had resigned from the contractor 's list of PWD Manipur.
Thus after this letter the contract came to an end by breach and the contract was no longer subsisting.
Mr. Rangarajan has submitted some very nice and delicate questions for consideration.
One of them being that until and unless the letter is accepted by the Authority the contract would continue and thus the respondent would suffer from the disqualification.
In our opinion having regard to the contents of the letter it is not possible to accept the argument of Mr. Rangarajan that the contract was subsisting.
The acceptance of the letter by the authorities was unnecessary for putting an end to the contract although the breach may give rise to a cause on action for damages.
No other point is raised before us.
We do not find any merit in this appeal and it is dismissed without any order as to costs.
H.L. C. Appeal dismissed.
| The respondent landlords had let out a shop to a tenant who had, with the consent of the landlords, sub let the same to the appellant.
The landlords moved an application under section 21 of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 against the tenant and the sub tenant for release of the premises on the ground of bonafide requirement.
The prescribed authority allowed the application against the appellant and dismissed against the tenant.
In appeal the District judge confirmed the order of the prescribed authority.
In a writ petition the appellant challenged the order of the District Judge.
The High Court dismissed the writ petition observing that the fourth proviso to s.21 contemplated the consideration of the likely hardship of the tenant or the landlord only and not of the sub tenant.
Hence this appeal.
Allowing the appeal, ^ HELD: All that the relevant proviso to s.21 requires is that the comparative hardship of the tenant as also that of the landlord shall be taken into account before passing any order of release or refusal to release.
If the sub tenancy had been created without the consent of the landlord the position might have been different.
The sub tenant for the purposes of the fourth proviso to s.21 would virtually be a tenant inasmuch as rent is payable by him to the tenant in chief, who to all intents and purposes will be a landlord qua the sub tenant: To interpret the section in the way as the High Court has interpreted would be defeating the very salutary purpose of the Act.
[33 H; 34 A B] Bhullan Singh vs Babu Ram referred to.
In the instant case, the appellant was entitled to the protection of the fourth proviso to section 21 and the comparative hardship of the appellant as well as that of the landlords should have been taken into account before disposing of an application under s.21 of the Act.
The Courts below have failed to exercise jurisdiction vested in them in not considering the likely hardship of the appellant.
[34 C D]
|
ION: Criminal Appeal No. 71 of 1961 .
Appeal from the judgment and order dated January 18, 1961 of the Calcutta High Court in 51 Criminal Appeals No. 314.
318 an(l 319 of 1960 and Reference No. 3 of 1960.
Nur ud din Ahmed and Pritam Singh Safeer, for the appellants.
D. N. Mukherjee, P. K. Mukherjee and P. K. Bose, for the respondent.
October 10.
The Judgment of the Court was delivered by SHAH, J.
At 9 :30 P.M .
On March 21, 1959, four persons Rampiari, Hiralal, Shyama Prosad Missir and Surajnath Dubey all residing within Police Station (Golabari in the town of Howrah suffered incised and punctured injuries and died in consequence thereof.
The appellants and two others were tried before the Extra Additional Sessions Judge, Howrah with a jury for rioting and causing fatal injuries to these four victims and thereby committing offences punishable under sections 148, 302 and 302 read with 149 of the Indian Penal Code.
The jury brought a unanimous verdict of guilty against appellants Ram Shankar Singh, Bimala and Sudama Singh for offences punishable under ss.148,302 and 302 read with 149 of the Indian Penal Code and against Ramnarayan Missir for offences punishable under sections 148 and 326 read with 149 of the Indian Penal code and a verdict of not guilty against Depali wife of Ramnarayan Missir The Sessions Judge accepted the verdict and sentenced the appellants, subject to confirmation by the High Court, to suffer the penalty of death and Ramnarayan Missir to suffer rigorous imprisonment for 10 years, and acquitted Depali.
The reference for confirmation of death sentence and the appeal filed by the appellants and Ramnarayan Missir against the order of conviction and sentence were heard by the High Court of Judicature at Calcutta.
The High Court held that the verdict of the jury was vitiated on account of misdirection by the Sessions Judge, and after an elaborate examination of the evidence found the appellants Ram Shankar and Bimala guilty of offences under 302 read with 34 of the Indian Penal Code for causing the death of Rampiari and Hiralal, The 52 High Court also found appellant Ram Shankar guilty of murder for causing the death of ,Surajnath Dubey by stabbing, him With a knife, and appellant Sudama Singh for causing the death of Shyama Prosad Missir by stabbing him with a knife, and confirmed the sentence of death passed by the Sessions Judge.
The High Court, acquitted Ramnarayan Singh of the offence of grievous hurt of which he was convicted by the trial court.
With certificate granted by the High Court this appeal is preferred by the three appellants.
Two bustees in the town of Howrah No. 7 Madhab Ghosh Road and No. 7 Tikiapara Road are separated by a common courtyard.
Ram Shankar, Bimala, Ramnaryan Singh and Depali lived in No. 7 Madhav Ghosh Road.
Ramdeo Ahir, his wife Rampiari and son Hiralal lived in a room in 7 Tikiapara Road and Shyama Prosad Missir lived in another room in that bustee.
Surajnath Dubey lived in a room in No. 9 Madhab Ghosh Road.
At about 11 A. M. On March 21, 1959 there was an altercation in the common courtyard between Ramnarayan Missir, his wife Depali and Ram Shankar 's wife Bimala on the one hand and Ramdeo, his wife Rampiari and his son Hiralal on the other.
This attracted the attention of several residents of the locality, and the parties were pacified by Jadunandan Roy and Joy Lal Choudhury and were pursuaded to retire to their respective room.
At about 7 P. M.
On the same day, after Ram Shankar returned home there was another altercation and Jadunandan and others again intervened and pacified the parties, who were quarreling.
Hiralal and his mother Rampiari returned to their room and apprehending an assault they chained the door from within.
It was the case for the State that at about 9 r. M., 5 to 7 Hindusthani" came armed with iron rods and knives to 7 Madhab Ghosh Road and joined Ram Shankar, Sudama Singh, Bimala, Ramnarayan Missir and Depali who were also armed with lethal weapons, such as knives, 53 swords an iron roads.
The whole party then proceed to No. 7 Tikiapara Road and Sudama singh broke open the door of the room of Ramdeo Ahir.
Ram Shankar and his wife Bimala then entered the room, Sudama Singh standing outside.
Ram Shankar and Bimala attacked Rampiari and Hiralal and stabbed them to death.
On hearing the shrieks of Rampiari and Hiralal, Shyama Prosad Missir proceeded towards the courtyard, but was stabbed by Sudama Singh in the chest with a knife and collapsed on the spot.
Sudama Singh was held by Jadunandan Roy, but was rescued by his Supporters who beat Jadunandan Roy with iron rods.
At this juncture Ram Shankar and Bimala came out of Ramdeo 's room with their knives and cloths stained with blood.
Surajnath Dubey who reached the room of Ramdeo was stabbed by Ram Shankar in his abdomen.
Surajnath Dubey ran a short distance pressing his abdomen with his hands and fell down near the dispensary of one Dr. Dhruba Das Pandey where from he was removed to the Howrah General Hospital.
He succumbed to his injuries on March 23, 1959.
Ramnaryan Missir was present in the courtyard at the time of this assault and carried a sword in his hand and his wife Depali carried a sword iron rod.
After killing Rampiari Hiralal, Shyama Prosad Missir and causing injuries to Surajnath Dubey, Ram Shankar and his supporters fled along the Madhab Ghosh Road.
The sword carried by Ramnarayan was snatched away by Jivan Prosad Sett and in doing so the latter received a slight injury Ramnarayan and his wife Bimla and others were chased by a large crowd, but many of the miscreants made good their escape.
Ramnarayan and his wife Depali took shelter in the house of one Lakshman Mahato.
Ram Shankar, Bimala and Sudama Singh entered the godown of Bhola Singh at Sailen Bose Road.
In the meantime, the officer incharge of the police station having received information on the telephone proceeded to Bhola Singh 's godown and 54 arrested Sadaman Singh and Bimala, Ram Shankar having run away from the godown.
Sudama Singh and Bimla were brought to the scene of offence injuries on the dead bodies of Rampiari, Hiralal Shyama prosad Missir were examined.
Information of tho offence was the recorded.
At the trial of the appellants and other accused evidence was led in support of the case for the State that quarrels took place at 11 A. and 7 p.m.
On the day in question between Rampiari and Hiralal on the one hand and Bimala, Ramnarayan Singh and Depali on the other and that at the quarrel at 7 P. M. Ram Shankar was also present.
Evidence was also led to show that shortly after 9 P.M. Ram Shankar, his wife Bimala accompanied by Sudama Singh Ram Shankar 's cousin Ramnarayan Missir and his wife Depali and five or seven Hindusthani men approached the courtyard in front of No. 7 Tikiapara Road and Sudama Singh broke open the door of the room of Ramdeo Ahir and Ram Shankar and his wife Bimala entered the room armed with knives and emerged from the room sometime later with knives stained with blood.
Evidence was also led that Shayama Prosad Missir was stabbed by Sudama Sihgh and Surajnath Dubey by Ram Shankar in tho presence of witnesses.
The State also led evidence that the fleeing miscreants were chased by the residents of the locality and that Bimala and Sudama Singh were arrested in the godown of Bhola Singh.
Before the High Court the verdict of the jury was successfully assailed by counsel for the appellants.
The learned Judges of the High Court held that the verdict was vitiated on account of misdirection on material questions, and they accordingly disregarded the verdict and proceeded to consider the evidence independently of the verdict.
They held that appellants Nos.
l and 2 Ram Shankar and his wife Bimala were guilty of offences punishable 302 read with 34 of 55 the Indian Penal Code for causing in furtherance of their common intention death of Rampiari and Hiralal in the room of Ramdeo Ahir.
The High Court also held Ram Shankar guilty of causing the death of Surajnath Dubey, and Sudama Singh of causing the death of Shyama Prosad Missir by stabbing him in the chest.
The first question that falls to be determined is whether the High Court was, in the circumstances of the case, competent to appraise the evidence after discarding the verdict of the jury and to confirm the sentence of death after modifying the order of conviction.
Section 423 of the Code of Criminal Procedure invests the High Court hearing on appeal against all order of conviction or acquittal passed by a Subordinate court of criminal jurisdiction with certain powers.
These powers are exerciseable in appeals against orders passed in proceedings which are tried with or without the aid of jury.
By section 418 (l), an appeal, in a case tried by jury, lies only on a matter of law.
But if the High Could on a consideration of the materials on the record reaches the conclusion that the verdict in a case tried with jury erroneous owing to some misdirection by the Judge of misunderstanding of the law by the jury, the High Court has the power to reverse the finding and to acquit or discharge the accused or to order retrial or to alter the finding maintaining the sentence, or, with or without altering the finding, to reduce the sentence, or with or without such reduction and with or without altering the finding to alter the nature of the sentence.
The High Court may in an appeal against an order of acquittal even in a case tried with jury reverse the order and direct that further inquiry be made or that the accused be retried or committed for trial, or the High Court may find the accused guilty and pass sentence on him according to law.
These powers can be effectively exercised only if the High Court has the power to appraise the evidence and 56 that is made clear by sub section
(2) of section 423, which by the clearest implication enacts that the Appellate Court may alter or reverse the verdict, if it be of the opinion that it is erroneous owing to misdirection by the Judge, or misunderstanding of the law by the jury.
The power to direct retrial or to consider the case on the merits being conferred on the High Court in appeals against orders of acquittal as well as conviction, it can effectively be exercised only if the High Court is competent apart from the verdict to appraise the value of the evidence on which the order of the trial court is founded.
The High Court is not bound when it arrives at the opinion that the verdict of the jury is vitiated to interfere with the verdict.
The Court is, therefore, competent in appeals against orders of conviction and sentence or against orders of acquittal even in cases tried with jury to order a retrial or to maintain the convection and sentence on a reconsideration of the evidence.
Counsel for the appellants does not challenge this interpretation of the powers of the High Court under sections 418 and 423 of the Code.
In Abdul Rahim vs Emperor (1) in dealing with the powers of a High Court in a reference under section 374 for confirmation of death sentence passed by the Court of Session n a trial held with jury, where the verdict of the jury was found to be vitiated on the ground of admission of evidence, which, in law, was inadmissible, the Judicial Committee of the Privy Council observed: :Where inadmissible evidence has been admitted in trial by jury, the High Court on appeal may, after excluding such evidence, maintain a conviction, provided the admissible evidence remaining is in the opinion of the Court sufficient to establish the guilt of the accused.
The High Court is not bound to order retrial in such cases.
" (l) (1946) L. R 57 The Judicial Committee also observed "The primary duty of the Court on an appeal is indicated in section 423(1).
It is to consider with the record before it whether there sufficient ground for interfering '.
In a trial by jury, that there has been a misdirection is not of itself a sufficient ground to justify interference with the verdict.
The Court must proceed to consider whether the verdict is erroneous owing to the misdirection or whether the misdirection has in fact occasioned a failure of justice.
If the Court so finds then it has a plain justification for interfering and indeed a duty to do so.
" The Judicial Committee also observed, "An appeal may be entertained only on a question of law, but once it has been held by the Appellate Court that there has been an error in law it is open to it to interfere ' with the jury 's verdict and if it thinks that the error in law affords sufficient ground for doing so it will then proceed to consider which of the various forms of 'interference ' it will adopt.
Section 4,3 clearly indicates that within its meaning a misdirection by the Judge falls within the category of error in law, for it contemplates in sub s.(2) that an appeal is competent on the ground of misdirection.
But a misdirection having been found to have occurred it is not necessarily a ground for interference.
It may have been of a more or less trivial character.
But if it has led to an erroneous verdict being returned or to a failure of Justice the statute plainly indicates that a case for interference has arisen.
What form the interference shall take is left to the Court which is given a wide discretion.
It need not order a retrial.
It may for example acquit the accused.
To order a retrial might well operate injustice in readily conceivable circumstances.
" 58 We ale therefore of the opinion that s.423 applies to all appeals before the High Court whether from a trial by jury or otherwise and then the High Court finds that the verdict of the jury is vitiated on account of someone defect of law or misdirection it has full power to deal with the appeal in the manner specified in section 423 and for that purpose it may appraise the evidence to decide what course it will follow.
But it is contended that where the Court of Session in a trial held by jury sentences the accused to suffer the penalty of death and the case is submitted to the High Court under section 374 of the Code of Criminal Procedure for confirmation of sentence and the accused also appeals against the order of conviction and sentence, the High Court is bounded to hear and decide the appeal in the first instance, and if on a consideration of the appeal, the High Court holds that the verdict was vitiated on account of misdirection or misunderstanding of the law on the part of the Jury, the verdict must, be set aside and with the disappearance of the verdict disappearance the order of sentence, and it is not open to the High Court to confirm the sentence of death on a reappraisal of the evidence.
The High Court is bound in these cases, says counsel for the appellants to order retrial of the accused.
An appeal under sub section
(l) of 8.
418 of the code lies on a matter of fact as well as on matter of law, except where the trial is by Jury, in which case the appeal lies on a matter of law only.
But that is not the only provision which invests the High Court with jurisdiction to deal with the case of an accused person when he is tried by jury and is sentenced to suffer death.
The sentence of death passed by the Court of session in a reference under 8.
374 of the code cannot be executed unless it be confirmed by the High Court.
Under section 376 the High Court dealing with a case submitted to it under 8. 374 (l) may confirm the sentence, or pass 59 any other sentence warranted by law, or (b) may annul the conviction, and convict the accused of any offence of which the Sessions Court might have convicted him, or order a l new trial on the same or an amended charge, or (c) may acquit the accused person.
These powers are manifestly of wide amplitude, and exercise thereof is not restricted by the provisions of section 4l8 (l) and 423 of the Code Of Criminal Procedure.
Irrespective of whether the accused who is sentenced to death prefers an appeal, the High Court is bound to Consider the evidence and arrive at an independent conclusion as to the guilt or innocence of the accused and this the High Court must do even if the trial of the accused was held by jury.
In a case where the death sentence is imposed no sanctity attaches to the verdict of the jury.
The verdict is not binding if the High Court holds on the evidence that the order of conviction is not warranted.
Indeed, duty is imposed upon the High Court to satisfy itself that the conviction of the accused is justified on the evidence, and that the sentence of death in the circumstances of the case, is the only appropriate sentence.
It has been the uniform practice of the High Court in India to hear the reference for confirmation of sentence of death and the appeal preferred by the accused together and to deal with tho merits of the case against the accused in the light of all the material questions of law as well as fact and to adjudicate upon the guilt of the accused and the appropriateness of the sentence of death In this case also, the High Court did hear the reference and the appeal together.
On the view that the verdict of the jury was vitiated, the High Court was obliged to consider what order in the circumstances of the case was appropriate.
The High Court was not bound in exercising powers under 8. 423 to order a retrial; it could exercise any of the powers under 8.
423(1)(b).
The High Court had also to consider what order should be passed OD the reference under section 374, and to decide on an appraisal of the evidence 60 whether the order of conviction for the offences for which the accused were convicted was justified and whether, having regard to the circumstances, the sentence of death was the appropriate sentence.
High Court is of course competent when dealing with a reference under section 374 to order a retrial but the High Court is not bound to do so in every 3 tried with jury when the verdict of the jury is found to be vitiated because of error of law or misdirection.
The right, of trial by jury is an important right conferred upon accused persons in the trial of certain serious offences; but under our jurisprudence the right to trial by jury is a creation of statute and the question whether the accused in a given case having had the benefit of a trial by jury should because of misdirection be ordered to be retried, or his case be considered on the evidence by the appellate court, is one of the discretion and not of right.
The High Court has, in the present case, exercised this discretion and we see no adequate ground to interfere with the exercise of that discretion.
Learned counsel for the State invited our attention to judgment of this Court in Bhusan Biswas vs The State of West Bengal (1), in which this Court set aside the order passed by High Court directing retrial of a case which was tried with jury, in which the verdict was vitiated, and ordered that the High Court should hear the case on the evidence.
The Court in that case observed, "In the circumstances of this case we are of the opinion that the High Court was in error in remanding the case for retrial; it should have followed the procedure laid down in the Privy Council case and should have gone into the evidence and determined for itself whether the accused were guilty or not." It is manifest that this Court vacated the direction of the High Court ordering retrial in the special circumstances of the case: the Court did not lay down any general rule that in every case where the verdict (1) Cr. A. 113 of 1956, decided on February 14,1957, 61 of the jury in a case where the accused has been convicted at a trial held with jury is found to be h vitiated the High Court must not remand the case for retrial.
Counsel for the appellants, contended that in this case there had been no proper trial of the appellants before the Court of Session and therefore the order of the High Court should he set aside and retrial ordered.
Counsel strongly relied upon the manner in which the examination of the accused under 8. 342 by the court of Session was conducted and submitted that the Sessions Judge asked complex questions to each of the accused relating to several distinct pieces of evidence brought on the record.
For instance, Ram Shankar asked "You have heard the evidence as well as the cross examination of the prosecution witnesses.
They have stated that you together with your wife Bimala Devi, brother Sudama Singh, Ramnarayan Missir and his wife Depali Missir and 5/7 other Hindusthani men armed with iron rods, daggers and swords formed an unlawful assembly at No. 7 Tikiapara Road on the 21st March, 59 with the intention of murdering one Rampiari and her son Hiralal and that you intentionally killed Rampiari and Suraj Dubey of 9 Madhab Ghosh Road with a knife.
Do you want to say anything in your defence in connection with this charge?" Similar questions were also asked of accused Bimala and Sudama Singh.
With regard to the events subsequent to the murder of Rampiari, Hiralal and Shyama Prosad Missir another complex question was asked.
It is urged that the examination of the accused held in this manner was not in accordance with section 342 of the Code of Criminal Procedure, the terms whereof are mandatory and the Sessions Judge having failed to comply therewith the accused it must be presumed were prejudiced.
It was submitted in support of this contention that if the several components of the questions which dealt with independent matters on which evidence was led by the prosecution had 62 been split up, the accused might have given some explanation acceptable to the jury.
The Sessions Judge having failed to do so, the trial must be regarded as vitiated.
In our view, the learned Sessions judge in rolling up several distinct matters of evidence in a single question acted irregularly.
Section 342 of the code of Criminal Procedure by the first sub section provides, in so far as it is material: "For the purpose of enabling the accused to explain any circumstances appearing in the evidence against him, the Court . . . . . . . shall . . . question him generally on the case after the witnesses for the prosecution have been examined and before he is called on for his defence.
" Duty is there by imposed upon the Court to question the accused ganerally in a ease after the witnesses for the prosecution have been examined to enable the accused to explain any circumstance appealing against him.
This is a necessary corollary of the presumption of innocence on which our criminal jurisprudence is fonded.
The object of the section is to afford to the accused an opportunity of showing that the circumstance relied upon by the prosecution which may be prima facie against him, is not true or is consistent with his innocence.
The opportunity must be real and adequate.
Questions must be so framed as to give to the accused clear notice of the circumstances relied upon by the prosecution, and must give him an opportunity to render such explanation as he can of that circumstances.
Each question must he so frilled that the accused may be able to under stand it and to appreciate what use the prosecution desired to make of the evidence against him.
Examination of the accused under section 342 in not intended to be an idle formality, it has to be carried out, in the interest of justice and fairplay to the accused: by a slipshod examination which is the result of imperfect appreciation of the evidence, 63 idleness or negligence the position of the accused cannot be permitted to beamed mere difficult than what "it is in a trial for an offence.
This Court pointed out in Ajmer Singh State of Punjab(1) that "it is not a sufficient compliance with the section (s.342 Code of Criminal Procedure) to generally ask the accused that, having heard the prosecution evidence what he has to say about it.
He must be questioned separately about each material circumstance which is intended to be used against him.
The whole object of the section is to afford the accused a fair and proper opportunity of explaining circumstances which appear against him and the questions must be fair and must be couched in a form which an ignorant or illiterate person may be able to appreciate and understand.
" The examination by the Sessions Judge of the appellants perfunctory, but as observed in Ajmer Singh 's case, every error or omission complying with section 342 does not vitiate the trial.
"Errors of this type fall within the category of curable irregularities and the question whether the trial has been vitiated depended in each case upon the degree of error and upon whether prejudice has been or is likely to have been caused to the accused".
To the questions asked by the. judge, the answers given by the appellants were either "I am innocent" or "the story is false".
Failure on the part of the Sessions Judge to split up the questions so as to deal with each distinct feature or material piece of evidence separately, however, does not, in the circumstance as of the present case, justify an inference that prejudice was thereby caused to the appellants.
accused for the appellants has not been able to suggest, having regard to the line of cross examination adopted and the criticism of the evidence of the prosecution witnesses offered by him, what explanation besides completo denial of the prosecution story, the appellants could have offered in answer to the questions relating to the different circumstances and pieces or features of evidence (1) ; 64 on which the prosecution relied.
It is true that the prosecution strongly relied upon two circumstances against Bimala (1) that when she came out of the house of Ramdeo Ahir, she had a blood stained knife in her hand and (2) that when she was arrested from the godown of Bhola Singh; the knife was in her hand.
To these matters of evidence attention of the accused Bimala does not appear to have been invited.
Similarly.
attention of Ram Shankar to the evidence that when he came out of the room of Ramdeo Ahir, he had a knife in his hand was not invited.
But we have already observed, beyond a bare denial, the learned counsel was unable to suggest any other answer which the accused could give to these pieces of evidence even if they had been specifically put to them.
It is also to be noticed that the plea that the appellants had not been properly examined under 8. 342 of the Code of Criminal Procedure was not raised before the High Court: at least there is no reference in the judgment of the High Court to any such argument.
Failure to comply with the provisions of section 342 an irregularity; and unless injustice is shown to have resulted therefrom a mere irregularity is by itself not sufficient to justify an older of retrial.
The appellate court must always consider whether by reason of failure to comply with a procedural provision, which does not affect the jurisdiction of the court, the accused have been materially prejudiced.
In the present case, we are of the view, having regard to the circumstances, that the appellants have not been prejudiced, because of failure to examine them strictly in compliance of the terms of s 342 of the Code and that view is strengthened by the fact that the plea was not raised in the High Court by their counsel who had otherwise raised numerous question in support of the case of the appellants.
Rampiari, her son Hiralal, Shyama Prosad Missir and Surajnath Dubey received fatal injuries shortly after 9 P.M.
On the night of March 21, 65 1959.
Rampiari had on her person two incised injuries on the left side of chest cutting through the Ra ribs.
Hiralal had six injuries on his chest, abdomen and arms four incised injuries and two punctured.
Shyama Prosad Missir had one injury on the chest piercing the thoracic cavity.
Surajnath Dubey had injury in the abdomen.
These injuries were in the ordinary course of nature sufficient to cause death.
The appellants contend that they were not responsible for the injuries to these victims.
We were taken through the entire evidence which is material to the case of the three appellants by the learned counsel for the appellants.
In respect of the first incident when took place in the morning of the fateful day, there is the evidence of Jadunandan Rao which is corroborated by the statement contained in the First Information Report, and also corroborated by the statement of Ramdeo husband of Rampiari.
The second incident, took place at about 7 P. M.
The witnesses in connection with that incident are Jadunandan Roy, B. P.Singh and Jangli Bahadur.
It appears from the evidence of these witnesses that the parties Rampiari and Hiralal on the one hand and Ram Shankar, his wife Bimala Devi, Ramnarayan Missir and his wife Depali on the other were quarrelling and were pacified and Rampiari and Hiralal were persuaded to go back to their room and bolt it from inside.
The High Court has believed the evidence relating to these two incidents and we see no reason for not accepting it.
The third incident consists of three phases (i ) assault upon the room of Ramdeo Ahir, the breaking open of the door and attack on Rampiari and Hiralal resulting in their death; (2) assault on Shyama Prosad Missir by Sudama Singh and (3) assault on Surajnath Dubey.
The evidence discloses that the common courtyard between 7 Madhab Ghosh Road and 7 Iikiapara Road was lit up by the light of an electric lamp in the house of Joy Lal Choudhury, two of the 66 windows of the first floor being open.
There is also the evidence that in the room of Ramdeo on the occasion in question a kerosene lantern was burning.
It is so recited in the First Information Report and the kerosene lantern was seen by the Sub Inspector of Police when he arrived on the scene of offence.
It cannot be disputed, therefore, that the scene of offence was fully lighted at the time of the assault and the witnesses could identify the assailants.
About the assault upon the room of Ramdeo Ahir and the entry of appellants Ram Shankar and his wife Bimala Devi into the house after the door was broken open by Sudama Singh, there is the evidence of as many as six eye witnesses they are Jadunandan Roy, Ram Chandra Goala, Tribeni Jadab, Sukdeo Majhi, Hosila Jadab and Sundar Jadab.
Thc First Information Report lodged by Jadunandan Roy substantially gives the same story.
Jabunandan Roy has deposed to the entire story of the breaking open of the doer by Sudama Singh and the entry by Ram Shankar and Bimala into the room, the shrieks of Rampiari and Hiralal and about Ram Shankar and Bimala coming out of the room after stabbing Rampiari and Hiralal.
Ram Chandra Goala stated that when he came near the house of Ramdeo he found Ram Shankar and Bimala coming out of the room with knives in their hands.
Tribeni Jadab stated that he saw Sudama Singh breaking open the door of Ramdeo Ahir with an iron rod, that thereafter Ram Shankar and Bimala entered the room each carrying a knife, that is heard shrieks of Rampiari and Hiralal and that after some time Ram Shankar and Bimala came out of the room with knives.
Sukdeo Majhi stated that he saw Ram Shanknr and Bimala coming out of Ramdeo 's room with knives in their hands.
There is also the evidence of Hosila Jadab who stated that he saw Ram Shankar and Bimala coming out of Ramdeo 's room with blood stained knives.
Sundar Jadab has stated that when he reached the courtyard he found Sudama Singh 67 breaking open the door of Ramdeo 's room with all iron rod and thereafter Ram Shankar and his wife getting into the room with knives in their hands, and he heard Hiralal and his mother shouting for some time.
The High Court has accepted the testimony of these witnesses.
It is true that Jadunandan Roy stated that, he saw through the open door of the room of.
Ramdeo Ahir, after it was broken open, Ram Shankar stabbing Rampiari and Bimala stabbing Hiralal and the High Court regarded this part of the story as an embellishment which must be discarded.
The mere fact that the witness Jadunandan Roy had improved his story will not by itself be sufficient to disregard his testimony in its entirety.
About the assault on Shyama Prosad Missir, when he tried to intervene,there is the evidence of Jadunandan Roy, Tribeni Jadab, Sukdeo Majhi, Hosila Jadab and Sundar Jadab.
Each of these witnesses has deposed that Shyama Prosad Missir who intervened was stabbed by Sudama Singh in the abdomen.
About the assault on Suraj Dubey by Ram Shankar, there is the evidence of Jadunandan Roy, Tribeni Jadab and Hosila Jadab.
In the cross examination of these witnesses for the production, it was suggested that there was a free fight between some "Hindusthanis" and "goalas", in the course of which injuries may have been suffered by Rampiari, Hiralal, Shyama Prosad Missir and Suraj Dubey.
But Rampiari and her son Hiralal were found dead in their own room: the dead bodies were lying of a cot.
The body of Shyama Prosad Missir was lying with a single injury at the gate of 7 Tikiapara Road and Surajnath Dubev was stabbed a short distance away.
There is no evidence of any serious injuriy suffered by any other person.
If there had bee a free fight, some injuries to participants on both the sides may reasonably be expected.
It is true that according to the prosecution besides the accused there were 68 present 5 or 7 Hindusthani men, who were also armed.
There is no evidence, however, that any of these Hindusthanis took any active part in the assault on Rampiari, Hiralal, Shyama Prosad and Surajnath.
The Hindusthanis were not identified and have never been traced; but there is no evidence that they participated in the assault.
The story of a free fight, between the goalas and the Hindusthani men has been discarded by the High Court and, in our judgment, properly.
Certain matters of general criticism of the evidence were also urged by the learned counsel for the appellants.
He contended that no reliance should be placed on the contents of the First Information because it showed inherent evidence that it must have been fabricated some time after the investigating officer commenced investigation and in support of that contention reliance was placed upon the fact that even though it was alleged to have been despatched on the night of March 21, 1959 from the police station, a copy of the First information reached the Sub Divisional Magistrate Howrah on March 26, 1959.
Section l57 of the Code of Criminal Procedure enjoins that a copy of the First Information Report be sent forthwith to the Magistrate having jurisdiction.
It is also true that the copy of the First Information Report passed through the Court Inspector 's office on March 25, 1959 and reached the Sub Divisional Magistrate on March 26, 1959.
The Sub Inspector of Police in charge of the investigation stated in his cross examination that he could not explain why the copy did not reach the Sub Divisional Magistrate before March 26, 1961.
If, however, it was the case that the copy was not despatched from his office at the time when it was claimed it was despatched, further cross examination should have been directed, the mere endorsement of 26th March, 1959 as the date on which the First Information reached the Sub Divisional Magistrate is not 69 in itself sufficient to disregard a mass of direct evidence.
It was then urged that the story that Bimala was carrying a knife even when she was arrested was on the ground of utter improbability unreliable.
It was urged that the normal reaction of an assailant running away from the scene of offence to escape arrest would be to throw away the weapon of offence.
But this argument based on mere improbability would not be sufficient body of disinterested testimony about the knife being in her hand when she was arrested.
It was also submitted that the story of Jadunandan Roy that he caught Sudama Singh after the latter had stabbed Shyama Prosad Missir is untrue.
It was urged that if Sudama Singh, who was armed with a knife was over powered by Jadunandan Roy, the story that Sudama Singh ran away with the other assailants could not be true.
But Jadunandan in his evidence has deposed that when he caught Sudama Singh he was assaulted by others who accompanied Sudama Singh and was struck on his head and on other parts of body with a rod.
This story is corroborated by the medical evidence about injuries on the person of Jadunandan Roy Learned counsel for the appellants strongly relied upon the fact that even though a large majority of the prosecution witnesses who came near 7 Tikiapara Road deposed to the presence of Ramnarayan Missir and his wife Depali and further deposed that Ramnarayan Missir had a sword in his hand, the Sessions Judge acquitted Depali and the High Court acquitted Ramnarayan.
It is urged that if the testimony of these witnesses who deposed to the presence of Depali and Ramnarayan Missir is found to be untrue, the Court should scrutinize the evidence of the other witnesses witnesses with care and having regard to the unsatisfactory features disclosed in the cross examination, the rest of the evidence should also be discarded.
But it was not the evi 70 dence of any of the witnesses for the prosecution that Depali had taken part in the assault.
Her presence with a rod in her hand is deposed to by the witnesses ut it is not alleged that she had taken any part in the assault on any one.
Similarly, though there was evidence that Ramnarayan Missir was present carrying a sword, yet the High Court on a consideration of the evidence came to the conclusion that in the absence of reliable evidence that he participated in the assault near 7 Tikiapara Road the case against him was not proved.
We do not think; that because the High Court held the case against Ramnarayan as not established, the prosecution evidence in its entirety may be disregarded.
On a review of the evidence, we hold that the First Information about the commission of the offence was given immediately: in the First Information the names of the three appellants and the part played by them was set out in detail.
The police officer who arrived on the scene shortly after the incident found the door of Ramdeo Ahir 's room broken and blood marks were found at various places in Ramdeo Ahir 's room as well as in the courtyard.
Many of the witnesses who supported the case for tho State wore disinterested and independent.
No injuries were found on any of the party of the accused which could be attributed to a fight between their party men and the goalas.
Having regard to these circumstances, we are of tho view that the High Court was right in holding that the prosecution story was true.
Counsel for the appellants submitted that, in any event, against Sudama Singh the evidence was not strong enough to warrant his conviction.
It was contended that Sudama Singh resides not in Madhab Ghosh Road but in the godown in which he was arrested.
It is also urged that no extensive blood marks were found on his clothes and the knife alleged to have been used by him is not found.
In our opinion, there is a mass of reliable evidence 71 against Sudama Singh which establishes his presence at the scene of the offence and the part played by him.
There is the evidence of five eye witnesses to which we have already referred.
His presence at the scene is corroborated by the testimony of Basanta Prosad Singh who had heard Depali shouting shortly before the assault commenced that Sudama Singh had arrived.
Then there is the evidence of Jiban Prosad Sett who deposed that he ad on the night in question Then Ram Shankar, Sudama Singh, Bimala and Ramnarayan Missir, all coming from Madhab Ghosh Road towards Tikiapara Road and that he had seen Sudama Singh with a knife.
Sewdhari Sharma stated that he had been Sudama Singh and 3 or 4 other persons running away from the scene of offence and at that time he had a knife in his right hand.
Subinspector Deepak Das stated that he had arrested Sudama Singh near the godown.
Sub Inspector Z. Haque attached the dhoti from the person of Sudama Singh and that dhoti was sent to the Chemical Analyses an I Serologist.
According to the Chemical Analyses the dhoti, bore blood marks.
In the seizure list the dhoti is described as having "slight" blood stains and the Assistant Serologist reported that the blood on the dhoti, was so disinterested that its origin could not be determined.
The testimony of Jadunandan Roy, Tribeni Jadab, Sunder Jadab, Jiban Prosad Sett, and Sukdeo Majhi abundantly establishes the presence of Sudama Singh at the scene of the offence and the part played by him.
He is also seen running away from the scene of offence.
The knife carried by him is not found: blood marks found on his dhoti are also not proved to be human in origin, but, having regard to the evidence of the eye witnesses, which is both independent and disinterested, we see no reason to disagree with the view of the High Court that Sudama Singh was present at the scene of offence and he broke open the door of Ramdeo Ahir 's house to facilitate the entry of Ram Shankar and 72 Bimala to murder Rampiari and Hiralal and that he stabbed Shyama Prosad Missir with a knife.
Ram Shankar and Bimala forceably entered the house of Ramdeo Ahir and killed Rampiari and Hiralal.
Ram Shankar also stabbed Suraj Dubey when he attempted to protest against his conduct.
Sudama Singh, besides breaking open the door of Rmdeo Ahirs room to facilitate the entry by Ram Shankar and Bimla stabbed Shyama Prosad Missir when the latter tried to intervene.
The assault upon the members of the family of Rmdeo Ahir was conceived and initiated with deliberation, and with the object of slaughtering a defenceless woman and her young son.
Innocent persons who intervened were mercilessly stabbed and killed.
There is no ground, therefore, for disagreeing with the High Court that this is pre eminently a case in which death sentence should be imposed on the three appellants.
On the view taken by us this appeal fails and is dismissed.
Appeal dismissed.
| The order of dismissal against the appellant was set aside by the High Court, holding inter alia, that reasonable opportunity was set afforded to the appellant before imposing the penalty dismissed and the appellant must be deemed to continue in service.
Thereafter the appellant was reinstated, but he was awarded salary at the rate of Rs. 76 11 0 till the order of dismissal, and at a token rate of Rs. 1/ for the period between the order of dismissal and reinstatement.
The appellant was again suspended and enquiry was directed against him in respect of dereliction of duty for which he had already been once dismissed and re instated.
The appellant moved the High Court for a writ to quash the order directing the said enquiry.
He claimed that Government had no power to re open the enquiry concluded by the decision of the High Court and that the State was bound to pay him salary with increments for the period of suspension as if he was on duty during that period.
The High Court, inter alia, held that the second enquiry against the appellant was not barred by virtue of the previous decision, but the fixation of token salary amounted to punishment which could not be imposed without following the procedure laid down in article 311 of the Constitution, and there was no justification for not granting him full salary.
The appellant came up in appeal to the Supreme Court by certificate.
^ Held, that the State Government was competent in the circumstances, to direct a fresh enquiry against the public servant for dereliction of duty, and to suspend him.
Where the order of dismissal of a public servant was declared invalid by the decree of a Civil Court the effect was that the public servant was never to be deemed to have been lawfully dismissed from service, and the order of reinstatement was superfluous.
It was not open to the authority 316 to deprive the public servant of the remuneration which he would have earned has he been permitted to work.
Held, further, that r. 54 of the Fundamental Rules of the Uttar Pradesh Government enables the State Government of fix the pay of a public servant, when dismissed is set aside in a departmental appeal, but that rule has no application to cases in which the dismissal of a public servant is declared invalid by the decree of a Civil Court and he is consequently re instated.
Dwarkachand vs State of Rajasthan, I.L.R. , Nanak Chandra Bairagi vs Supdt.
of Police, Sibsagar, I.L.R. and Mohan Singh Choudhri vs Divisional Personnel Officer, Northern Railway, Ferozepore Cantt.
I.L.R. , not applicable.
|
N: Criminal Appeal No. 317 of 1988.
From the Judgment and Order dated 23.1.1987 of the Madras High Court in Criminal Appeal No. 408 of 1986 and R.T. 6 of 1986.
U.R. Lalit, V. Krishnamurthy and V. Balachandran for the Appellant.
A.V. Rangam for the Respondent.
The Judgment of the Court was delivered by SHARMA, J.
The appellant was convicted by the trial court for double murder of a woman, Jayasambal by name and her son Vijay Anand, and was sentenced to death.
He was further convicted under section 307, I.P.C. for attempting to kill Vijay Anand 's sister Kavitha Priyadarsini and for house trespass in order to commit the aforesaid offences, and was sentenced to life imprisonment under each of the two counts.
His appeal before the Madras High Court was dismissed and the sentence of death confirmed.
The present Special Leave Petition was filed against this judgment.
At the preliminary hearing we were satisfied that the appel 224 lant was rightly convicted as mentioned earlier.
We, however, directed notice to be issued on the question of sentence.
Accordingly, limited special leave is granted.
According to the case of the prosecution, Dr. Manickasamy (P.W.1), the husband of the deceased Jayasambal and father of deceased Vijay Anand, was a doctor working in the Government Hospital at Sadras and the appellant as a Leprosy Inspector under him.
The doctor had taken a second wife whom he was keeping in another house with their 3 children.
The appellant developed close association with the doctor 's family and became intimate with Jayasambal.
The daughter Kavitha Priyadarsini (P.W.2), one day in 1984, found to her shock, her mother Jayasambal and the appellant in a compromising position, and raised a stiff protest with her mother.
Jayasambal attempted to justify her romance on the ground that the doctor P.W.1 was also having two women in his life.
When Kavitha threatened that she would report the matter to her father, she (Jayasambal) relented and agreed to terminate the illicit relationship on which Kavitha promised silence.
Thus forced by her daughter, Jayasambal attempted to avoid the company of the appellant and to repel his advances.
In the meantime the family had changed its residence and the younger sister of Jayasambal joined them and started living with them.
She was examined in the case as P.W.3.
On 20.7.1985 the appellant went to a late night cinema show with his friend P.W.5.
The film contained murder scenes of four women.
When the appellant came out of the cinema hall after midnight he told his friend that he would take revenge for the betrayal by a lady.
He did not give any detail.
P.W.5 stated at the trial that after dropping him at the dispensary, where he lived, the appellant left by a bicycle; and he learnt the next morning about the death of Jayasambal.
According to the further prosecution story the appellant knocked the door of P.W.1 soon thereafter.
The doctor came out of his house and the appellant suddenly rushed into his bed room, locked the door from inside and attacked Jayasambal with a knife.
The boy Vijay Anand aged about 12 years, got up and attempted to intervene and was killed.
His elder sister Kavitha (P.W.2) also became a victim and suffered grievous injury.
The doctor, P.W.1, and Jayasambal 's younger sister (P.W.3) raised shouts which attracted P.W.16, a Police Inspector living in the neighbourhood.
The Police Inspector saw the accused through the window with a knife in his hand and ordered him to stop and to open the door.
The appellant obeyed.
225 6.
Both the trial court and the High Court, on appeal, closely examined the evidence and came to the conclusion that the prosecution story was correct.
A plea of insanity under section 84, I.P.C. taken on behalf of the accused was rejected.
We have examined the evidence and the circumstances and are in agreement with the view of the High Court.
However, the question is whether the courts below were right in imposing death penalty on the appellant or whether the appropriate sentence would be imprisonment for life.
Prima facie the case appears to be a very serious one where two persons were killed and a third one seriously injured.
The death of a 12 year boy trying to save his mother and the serious injury to his elder sister leaves one shocked.
Mr. Lalit, the learned counsel for the appellant contended that although the appellant was not in such a mental state so as to attract section 84, I.P.C., he was certainly so agitated on account of circumstances beyond his control that he should be spared from the extreme penalty of death.
He relied upon the decision in Srirangan vs State of Tamil Nadu, wherein a lenient view was taken in favour of the appellant, a young toddy tapper who while returning after his work "tense in state", was provoked and "went into tantrums and inflicted triple killings.
We have closely examined the circumstances in which the tragic event took place.
The deceased Jayasambal at the time of murder was about 35 years old with a teen aged daughter and a 12 year old son, and the appellant was in his late 20s.
She was united with the doctor through love marriage, but the husband later took another wife and got 3 children from her.
The appellant was employed in the hospital where the doctor P.W.1 was posted.
In this background the unfortunate illicit relationship developed between the deceased and the appellant when the latter was in his mid 20s.
The deceased was an elderly lady with two children who took a defiant attitude, defending her conduct when she was first confronted by her own daughter, which suggests that the unfortunate relationship had developed with her encouragement.
When suddenly spurned by his partner, the appellant must have experienced the disappointment of a discarded lover.
We do not suggest that the erring wife should not have corrected herself nor can the persistence of the appellant in the situation be appreciated, but we are trying to analyse his psychology.
His mental agitation was further fuelled by the movie, showing murder after murder.
The vicious effect of films picturising violence in detail on impressionable minds has been subject of serious concern for some time now, but unfortunately no 226 effective step has been taken so far to curb the growing tendency of a section of the film industry to cash on human weakness.
And when this upsets a youngman, already vulnerably disturbed, the society cannot be completely absolved from sharing the responsibility of the resulting tragedy.
Proceeding further with the facts in the present case, we find that when commanded by P.W. 16, the appellant stopped immediately, as a result of which the life of Kavitha was saved, opened the door, came out of the room and did not attempt to escape.
Considering the above circumstances appearing from the prosecution evidence, we are of the view that the sentence of death passed against the appellant under section 302, Indian Penal Code, should be converted to imprisonment for life.
Let that be done and let all the sentences of imprisonment run concurrently.
N.P.V. Appeal allowed.
| A person during his lifetime executed trust deeds, dated 21.9.53 and 4.10.1959 respectively.
Under the Deed dated 21.9.1953 that person as settlor, transferred upon trust to himself as trustees four items of immovable property.
The objects and purposes of the trust broadly stated were the conduct of the daily worship of the deity, carrying out of certain charitable acts and making of provisions for the maintenance of the settlor and some other persons.
The trustee was required after defraying taxes etc.
to accumulate 1/4th of the net income to be set apart for purposes of effecting certain additions and alterations to the properties; to make over another 1/4th of the net income to the shebait for the conduct of the daily pooja; another 1/4th for the charities and the remaining 1/4th for the personal benefit of the settlor during his lifetime and to his heirs thereafter.
Later on the share of the settlor was changed to 5/16.
Under the deed dated 4.10.1959 the settlor transferred upon trust to himself and his son, the appellant in Civil Appeal No. 946 of 1975, as trustees six other properties, almost for the same purposes and kept a fixed share for the benefit of the settlor during his lifetime and thereafter to his heirs.
In the proceedings of assessment to Estate Duty the question arose whether the trust deeds attracted and fell within 270 section 12(1) of the Estate Duty Act.
The Deputy Controller of Estate Duty, the Appellate Controller of Estate Duty in the first appeal and the Income tax Appellate Tribunal, Calcutta, in the second appeal held that the entire subject matter of the deeds must be held, or deemed, to pass on death and the value of the properties should be included in the principal value of the Estate passing on death.
At the instance of the accountable person, a reference was made to the High Court for opinion as to whether the properties comprised in both the trust deeds were dutiable under section 12(1) of the Act.
The High Court held that properties comprised in the deed dated 21.9.1953 were settled property within the meaning of section 2(19) and that section 12(1) was attracted.
In relation to the properties covered by the deed dated 4.10.1959, the High Court held that Section 12(1) was not applicable to them as they were not settled properties.
Feeling aggrieved, both the accountable person and the Deputy Controller of Estate Duty filed these cross appeals.
Dismissing the appeal of the accountable person, allowing that of the Revenue, and answering the question referred to by the High Court for opinion in the affirmative and against the assesee, this Court, ^ HELD: The first contention of the accountable persons that the interest in the property corresponding to the benefit retained by the settlor was not a subject matter of the disposition at all is essentially a matter of construction of the deeds.
There is, no doubt, a discernible difference between a case of settlement of property with reservation of a benefit to the settlor on the one hand and the case where what is settled is only a share or interest or part of the property, excluding the part or the share corresponding to the benefit that the settlor has chosen to retain.
There is, indeed, no transfer at all in the latter case.
The accountable person contends that there is really no transfer of the share corresponding to the benefit reserved in both the cases.
[278F G] In the present case, any possibilities of such an argument are ruled out by the explicit terms of the deeds.
The subject matter of the deeds are not 11/16 share and 1/2 share in the properties respectively.
The whole of the properties are conveyed upon trust.
There is, therefore, no scope for this submission.
[280C D] St. Aubyn vs Attorney General, [1951] 2 All England Reports 496; Controller of Estate Duty, A.P. Hyderabad vs Smt.
Godavari Bai; , at 635 and Controller of Estate Duty, Kerala vs M/s. R.V. Vishwanathan and Ors., ; at 97 and 99, referred to.
271 The second contention of the accountable person that provisions of section 12(1) are not attracted as the properties did not fill the bill as "Settled Properties" within the meaning of Section 2(19) has no substance.
Section 12(1) refers to and deals with a case of property passing under a "settlement" in which the settlor had reserved to himself an interest in such property either expressly or by implication.
Apparently, on its language, the section does not draw upon the incidents and implications of "Settled Property" for the satisfaction of its requirements.
The passing of property under a "settlement" which means "any disposition including a dedication or endowment whereby property is settled" coupled with a reservation of an interest in the property would suffice.
The further incident that the properties covered by the settlement must in addition partake of the character of "Settled property" and accordingly, should stand "limited in trust for any person, natural or juridical, by way of succession" etc.
are not to be held as part of the requirements of section 12(1).
Those incidents of "Settled Property" need not be imported to the ingredients of section 12(1) which would be satisfied if there is a "Settlement" as defined under the second part of section 2(19) and if, there is reservation of an interest by the settlor in addition.
[280D; 281C E] In the instant case, the two deeds clearly answer the description of "Settlement" as defined under Section 2(19) viz. that there is a "disposition including a dedication, whereby property is settled".
Indeed under both the deads, the reservations of the benefit of the income from the trust properties were made in favour of the settlor.
These reservations by themselves, in our opinion, bring the properties within the net of section 12(1).
In addition, the settlor in this case constituted himself during his life time and thereafter constituted his heirs as the shebaits of the two deities.
Indeed where while endowing properties to a deity, the settlor stipulates that he shall during his left time and thereafter his heirs be the shebaits of the deity, the settlor can possibly be said to provide not only for certain duties to be vested in connection with the endowment but also secures a beneficial interest in the property.
[281F H; 282A] Angurbala Mullick vs Debabrata Mullick, at 1132 and Kalipada Chakraborti & Anr.
vs Palani Bala Devi The reservation "interest", so as to attract Section 12(1), must be in the property as such and that mere collateral benefits reserved by the settlor emanating from some other property or some other source, inde 272 pendent of the property so settled, will not attract the section.
The distinction between a case of a benefit arising "collaterally" and a case of the benefit being reserved by "implication" would require to be kept clearly distinguished.
[282H; 283A, C] Controller of Estate Duty vs R. Kanakasabai & Ors., at 257, referred to.
The terms of the two documents satisfy even the extended requirement that for purposes of section 12(1) the settled property must be by way of succession.
[284E] Attorney General vs Owen, [1899] 2 Queen 's Bench Division 253 at 266 and Hamid Hussain vs Controller of Estate Duty, at 315, referred to.
There is no substance in the 3rd contention also of the accountable person that all the properties covered by the two settlements cannot be held to pass under section 12(1) but only the value of the share of the properties corresponding to the benefit reserved must be held to pass.
There are certain fallacies in some of the assumptions basic to this contention.
The quantum of the interest reserved does not determine the extent of the property passing under Section 12(1).
This is not a case where several distinct properties or parcels are settled and a beneficial interest is reserved out of one alone when it might be possible to predicate that all properties comprised in such settlement, which must be held to be a composite deed dealing with several items do not attract section 12(1) but only the parcel out of which an interest is carved out and reserved for the settlor 's benefit.
Under Section 12(1) if the deceased makes a settlement and reserves for himself an interest therein for life or for any period determinable with reference to death, the whole of the property so settled would be deemed to pass.
The interest reserved might be very small indeed; but however small the interest, when by virtue of such a reservation a settlement falls within the purview of section 12, the whole property would be deemed to pass.
[284F H; 285A B] Attorney General vs Earl.
Grey, at 325, referred to.
The expression 'interst ' in section 12(1) is also not used in a restrictive sense.
[285D] Attorney General vs Heywood, and Attorney 273 General vs Farrel, , referred to.
|
il Appeal No. 2293 of 1978 From the Order dated 21.4.77 of the Punjab and Haryana High Court in Civil Misc.
No. 508 C 1/77.
Ramlal for the Appellants.
The Order of the Court was delivered by PATHAK, J.
This appeal by special leave is directed against the order dated April 21, 1977 of the High Court of Punjab and Haryana determining the interest payable on the compensation awarded to the appellants for the acquisition of their land by the State Government.
A notification under Section 4 of the land Acquisition Act was made on August 31, 1961 in respect of land belonging to the appellants and in the proceedings which followed the land Acquisition officer determined a sum of Rs. 27,992.84 as compensation payable therefor.
Possession of the land was taken thereafter.
On reference made at the instance of the appellants, the learned District Judge held by his judgment dated November 30, 1963 that the appellants were entitled to a further sum of Rs. 11,307.10 as compensation.
Dissatisfied with that determination, the appellants proceeded in appeal to the High Court, and on March 8, 1977 the High Court held that the appellants were entitled to a further amount of Rs. 17,919.30 as compensation.
The High Court also held that the appellants were entitled to interest at the rate of 4 per cent per annum on the enhanced amount of compensation awarded by it, the interest to run from the date possession of the land was taken.
The appellants then applied to the High Court for a review of its order in so far as it had determined the rate of interest.
The appellants pointed out that section 28 and section 34 of the Land Acquisition Act, 1894 had been amended by the Haryana Act No. 8 of 1967 in consequence of which the rate of interest payable on the compensa 684 tion was awarded for acquisition of land had been enhanced from 4 per cent to 6 per cent per annum from the date possession was taken to the date of payment.
The claim was resisted by the State, which contended that the Haryana Act No. 8 of 1967 had been brought into force with effect from July 1, 1967 and proceedings for the determination of compensation initiated before the enforcement of that Act were liable to be governed by the original rate of interest at 4 per cent per annum, and no advantage could be taken of the higher rate enacted later.
By its order dated April 21, 1977 the High Court ruled in favour of the appellants and held that the higher rate of interest should be available to the appellants even though the proceedings for determination of compensation were already pending before the amending Act was brought into force.
A curious inconsistency, however, entered thereafter in the judgment of the High Court.
On the amount determined as compensation by the Land Acquisition Officer and the learned District Judge the High Court held that the higher rate of interest at 6 per cent per annum was attracted, and interest at that rate ruled from the date possession was taken to the date of payment.
But on the amount of Rs. 17,919.30 representing the enhancement by it the High Court applied the rate of 4 per cent per annum from the date possession was taken and 6 per cent per annum from the date of its judgment awarding that amount.
The High Court seems to have proceeded on the view that the right to this amount of Rs. 17,919.30 as compensation arose to the appellants only from date of its judgment.
We are of opinion that the High Court has erred.
It is apparent from the impugned order of the High Court that it has found the appellants entitled to interest at the rate of 4 per cent per annum on the sum of Rs. 17,919.30 from the date possession was taken.
In so far that the High Court recognises the appellants ' claim to interest from that date the High Court is right, because the right to compensation arises when the land is acquired, and the judgment of the High Court merely represents a stage in the process of quantifying the compensation.
The right to compensation and the quantification thereof are two distinct concepts.
The right to compensation arises when the land vests in the State while its quantification may be concluded much later.
Although the process of quantification may pass through several stages, from the Land Acquisition Officer to the District Judge and thereafter to the High 685 Court, the process of quantification is merely one of computing the value of the land, on the principles enacted in the Land Acquisition Act.
All along, however, the right to the compensation so quantified refers back to the date of acquisition.
The additional amount of compensation awarded by the District Judge or by the High Court represents the difference between the true value of the land on the one hand and the actual amount awarded on the other which fell short of the true value.
The owner of the land is entitled to be paid the true value of the land on the date of taking over of possession.
Since, however, the true value is usually determined only after it is computed through a multi tiered process passing through different levels of a hierarchical judicial structure by the very nature of things it take sometime before the true value can be finally determined.
The fact that it is determined later does not mean that the right to the amount comes into existence at a later date.
And if, as the High Court has held, interest at 6 per cent per annum rules from the date procession was taken in the case of compensation determined by the learned District Judge, there is no reason why the same rate should not be applied from the date possession was taken in the case of the enhancement effected by the High Court.
We hold that the appellants are entitled to interest at 6 per cent per annum on the amount of Rs. 17,919.30 for the entire period from the date possession of the land was taken to the date of payment.
The appeal is allowed, and the order dated April 21, 1977 passed by the High Court is modified accordingly.
The respondents will pay the costs of the appellants.
| The appellants were awarded certain amount of compensation by the Land Acquisition Officer which was later enhanced by the District Judge and the High Court.
On being pointed out that sections 28 and 34 of the Land Acquisition Act had been amended by the Haryana Act No. 8 of 1967 which enhanced the rate of interest payable on the amount of compensation from 4 to 6 per cent per annum, the High Court awarded interest at the rate of 4 per cent per annum on the amount of compensation awarded by the Land Acquisition Officer and enhanced by the District Judge from the date possession was taken and 6 per cent per annum on the amount of compensation enhanced by it from the date of its judgment.
In this appeal the appellants challenged the rate of interest as determined by the High Court.
Allowing the appeal, ^ HELD: The right to compensation arises when the land is acquired, and the judgment of the High Court merely represents a stage in the process of quantifying the compensation.
The right to compensation and the quantification thereof are two distinct concepts.
Although the process of quantification may pass though several stages, the process of quantification is merely one of computing the value of the land, on the principles enacted in the Land Acquisition Act.
All along, however, the right to the compensation so quantified refers back to the date of acquisition.
The additional amount of compensation awarded by the District Judge or by the High Court represents the difference between the true value of the land on the one hand and the actual amount awarded on the other which fell short of the true value.
The owner of the land is entitled to be paid the true value of the land on the date of taking over of possession.
The fact that the true value is determined later does not mean that the right to the amount comes into existence at a later 683 date.
And if, as the High Court has held, interest at 6 per cent per annum from the date possession was taken in the case of compensation determined by the learned District Judge, there is no reason why the same rate should not be applied from the date possession was taken in the case of the enhancement effected by the High Court.
[684H;685 A D]
|
Appeal No. 21 of 1963.
Appeal from the judgment and order dated August 1, 1961 of the Rajasthan High Court in Civil Writ No. 86 of 1960.
C. C. Kasliwal Advocate General for the State of Rajasthan and M. M. Tiwari, for the appellants.
Rameshwar Nath section N. Andley, and P. L. Vohra, for the respondent.
The Judgment of the Court was delivered by Raghubar Dayal, J.
This appeal, on certificate granted by the Rajasthan High Court, raises the question of the applicability of the provisions of Chapter IV and thereby of r. 30 of the Rajasthan Minor Mineral Concession Rules, 1955, hereinafter called the rules, to the grants of mining leases under the provisions of Chapter V of the rules.
The facts leading to this appeal are briefly these.
The respondent obtained the mining lease for extracting sand stone from the mines in certain area from the Government of Rajasthan in 1956.
The lease was granted as a result of auction.
The period of the lease was from April 1, 1956 to July 31, 1959.
The respondent applied for extension of the period upto two years in view of the mandatory nature of the main provision of r. 30 and Simultaneously also applied for the renewal of the lease for a further period in accordance with the provisions of the proviso to r. 30.
The first prayer was refused and the State Government extended the period of the lease at first by six months and later by another two months.
The respondent thereafter filed a writ petition under article 226 of the Constitution in the High Court and prayed for issue of a writ of mandamus directing the striking down of the order of the Government renewing the lease for 8 months and directing the State of Rajasthan further to extend the lease in the first instance for two years from July 30.
1959 to bring, it unconformity with the period of lease specified in r. 30 and to renew.
after the expiry of such extended period, for a further period of 5 years under r. 30 of the rules.
The State of Rajasthan, appellant, contested the petition on the ground that the provisions of Chapter IV of the rules did not apply to the grant of mining leases by auction or tender provided for by Chapter V of the rules and that in any case the initial period short of 5 years must be deemed to have been at the desire of the respondent and that any further extension of the period of the lease under the proviso was in the discretion of the Government and consequently, the respondent could not claim to have the period of the lease extended for a period of 5 years.
The High Court held that the provisions of Chapter IV of the rules were applicable as far as possible to the grant of mining M/B(N) 3SCI 13 404 leases by auction under Chapter V. that though the State Government had to give a lease for 5 years in view of r. 30, yet the shorter period of the lease in favour of the respondent must, in the circumstances, be deemed to have been at his request and that the respondent was entitled to an extension of the lease by a further period of 5 years in accordance with the provisions of the proviso.
It therefore directed the State Government to renew the lease for a period of 5 years from the expiry of the original lease with option of further renewal, if so desired, by another period of 5 years subject to the conditions mentioned in r. 30.
It is against this order that this appeal has been filed.
Two questions are raised for the appellant in this Court.
The first is that the provisions of Chapter IV of the rules do not govern the grant of mining leases by auction under the provisions of Chapter V of the rules.
The other is that the proviso to r. 30 gives discretion to the State Government to extend the period of the lease for any period not exceeding 5 years that it is not mandatory that the State Government must extend the lease by a period of 5 years as held by the High Court.
We are of opinion that the High Court has come to a right conclusion on these two points.
Section 5 of the Mines and Minerals (Regulation and Develop ment) Act, 1948 (Act LIII of 1948) empowered the Central Government to make rules, by notification in the official Gazette, for regulating the grant of mining leases or for prohibiting the grant of such leases in respect of any mineral in any area.
In the exercise of its power the Central Government framed the Mineral Concession Rules, 1949, hereinafter referred to as the Central rules.
Clause (ii) of r. 3 of the Central rules defined 'minor mineral ' to mean 'building stone ' etc., which admittedly included sand stone Rule 4 stated that the rules would not apply to minor minerals the extraction of which would be regulated by such rules as the State Government might prescribe.
The State of Rajasthan made the rules in 1955 in the exercise of the powers conferred by r. 4 of the Central rules.
Chapter IV of the rules deals with grant of mining leases and consists of rr.
19 to 32.
Chapter V deals with grant of mining leases and royalty collection contracts by auction or by inviting tenders or by other methods and consists of rr.
33 to 42.
Apart from the heading of Chapter IV being in general terms and so applicable to the grant of all mining leases by whatever process, a comparison of the provisions of rules in Chapter IV and those in Chapter V shows that all the incidents of a grant of a mining refuse contemplated and provided for in Chapter IV ire not provided for by Chapter V.
This leads to the irresistible conclusion that matters not provided for by rules in Chapter V with regard to mining leases will be covered by provisions relating to those matters in chapter IV, as these provisions deal with the essential incidents affecting grant of mining lease.
405 We may therefore go through the provisions of Chapter IV to have a comprehensive view of what the rules provide and to see whether all of them are such that the Legislature could have intended their not applying to leases granted under Chapter V or whether they, by their nature, can apply to leases granted under Chapter IV only.
Rule 19 deals with restrictions on grant of mining leases.
There is no corresponding rule in Chapter V.
It is inconceivable that the restrictions mentioned in r. 19 be not applicable to the grant of mining leases by auction or tender or any other method.
The matters of substance are the contents of the lease, the persons to whom the minerals about which leases can be granted and not the procedure to be followed in granting the lease.
Chapter IV deals with the grant of mining leases on applications for such a grant.
Chapter V mainly deals with grant of mining leases by auction or by inviting tenders or by other methods.
It is clear that the procedure to be followed for the grant of leases is left to the discretion of the Government though, ordinarily, in the absence if general or special orders, the procedure laid down in Chapter IV is to be followed.
Sub r.
(3) of r. 33 provides that leases by public auction or tender under sub r. (1) shall be given only in such a case as the Government may, by general or special order, direct and r. 42 gives discretion to Government to adopt any other method for leasing out minor mineral deposits in the interest of industry and development of the deposit.
The restrictions laid down by r. 19 are that no mining lease is to be granted in respect of any minor mineral notified by Government in that behalf, that no mining lease for the notified mineral will be granted to a person unless he holds a valid certificate of approval and that no mining lease shall be granted to an individual person unless he be a citizen of India except with the prior approval of Government.
These restrictions are of a general nature and salutary in effect and the Legislature, in our view, could not have made them inapplicable to the grant of mining leases under the rules in Chapter V. Rules 20 to 23 are applicable to applications for grant of mining leases.
They mention the person to whom an application is to be made, the fee which is to accompany such application, what the application should contain and how priority is to be given if there be more than one application in respect of the same land.
These rules cannot, by their nature, apply to the grant of mining leases by auction or tender or by any other method.
Rule 24 provides for the Register of Mining Leases.
Most of the particulars to be noted in this Register relate to the grant of mining leases on application but some of the particulars could be entered with respect to the mining leases granted by following the other procedure and therefore its provisions can partially apply to the mining leases granted under Chapter V. Rule 25 will also usually apply to applications only, as in the case of granting a mining lease otherwise, the Government would have ordinarily already decided 406 the area for which the lease is to be given.
Rule 26 lays down a restriction on the length and breadth of an area to be leased, but gives discretion to the Government to relax the provisions of the rule.
This rule is of general application, subject to the discretion in the Government to relax its provisions and there is no reason why it would have been made inapplicable to mining leases granted under Chapter V. Rule 27 provides that the boundaries of the area covered by a mining lease shall run vertically down below the surface towards the centre of the earth.
Such a specification of the boundaries of the area is very essential in connection with mining leases and the rule about it must apply to all mining leases granted under Chapter V. Rule 28 deals with deposit of security and applies to applicants for mining leases and not to those who are to get leases under Chapter V.
There is a specific provision for security under r. 37 (iv), in Chapter V. Rule 29 deals with transfer of mining leases and provides that a lessee with the previous sanction of the Government and subject to certain conditions could transfer his lease or any right or interest therein.
There is no corresponding rule in Chapter V.
This indicates that r. 29 will apply to the transfer of mining leases granted under Chapter V. There is no good reason why such a lessee be deprived of his right to transfer or be free from any restriction laid down in r 29.
Rule 30 deals with the period of lease and is the rule which is to be considered by us.
Rule 31 lays down the conditions subject to which the mining lease is granted.
This rule has 24 clauses dealing with various matters.
It is clear from r. 41 in Chapter V dealing with the execution of lease that the terms and conditions mentioned in r. 31 would be included in the lease executed by the lessee to whom a mining lease is ranted under Chapter V. of course, r. 41 provides that Such terms and conditions would be so modified as might be necessary by reason of the provisions of rr. 33 and 34.
Sub.r, (2) of r. 23 provides that in cases of grant of mining leases by auction or by inviting tenders the annual dead rent of the lease would be determined in the auction or by tend as the case may be and may exceed the rate give in the Second Schedule to the rules.
Rule 34 deals with payment of royalty through the contractor for royalty collection.
These provisions of rr.
33(2) and 34 would re quire modification in conditions (3) and (4) of r. 31.
It has been urged that the specific mention of r. 31 in r. 41 indicates that the other rules in Chapter IV are not applicable to the grant of mining leases under Chapter V.
We do not agree and 407 are of opinion that the specific mention of r. 31 is made in r. 41 In view of the fact that it was to apply with suitable modifications.
Rules in Chapter IV which apply as they stand do require no specific mention for their applicability to the rant of mining leases under Chapter V. Rule 32 deals with the currency of the lease and provides that the currency of the lease shall be from the date of communication to the party unless otherwise stated, that the lessee shall have no right to continue work or to accumulate stock on or after the date of termination of the lease however unless otherwise sanctioned by Government and that all accumulated stock and immovable property left in the leased out area after the date of expiry of the lease shall be deemed to be Government property.
The provisions of this rule are essential to define the currency of the mining lease granted under Chapter V and to the rights of the lessee and the State in regard to continuing the work after the date of termination of the lease or to the matter lying in the leased out area after the expiry of the lease.
There is no corresponding rule in Chapter V. Rule 32 must be deemed to apply to the leases granted under Chapter V.
It would thus appear that the provisions of rr. 19, 26, 27 29 and 32, by their nature, must apply to the leases granted under Chapter V as they are expressed in general terms and can apply to all mining leases.
If they were not intended to apply to mining leases granted under Chapter V, the legislature would have made an express provision about it and would have also made some suitable corresponding provisions for the leases granted under Chapter V. We are therefore of opinion that the contention that the rules under Chapter IV do not apply to mining leases granted under Chapter V is not sound and that the High Court rightly held that they do apply so far as applicable to mining leases granted tinder Chapter V. Rule 30 deals with the period of lease.
This rule will apply to leases granted under Chapter V both because the rules under Chapter IV apply to such leases and because there is no corresponding rule in Chapter V. Reference has been made to rr.
38 and 39 in Chapter V which deal with certain payments if the period of lease is not more than 1 year or is more than one year respectively.
The fixing of the period of the lease is an essential term of the lease, Rule 32 in Chapter IV provides when the lease is to commence.
The lease should also provide the time when it should terminate.
That can be done either by setting down the actual date or by expressing the period of the lease.
Rules 38 and 39 provide for different matters.
They apply when the period of the lease is already fixed tinder the terms of the lease and in accordance with the rules.
408 The next matter to be considered is the construction of r.30 which reads: Period of lease A mining lease may be granted for a period of 5 years unless the applicant himself desires it shorter period; Provided that the period may be extended by the Government for another period not exceeding 5 years with option to the lessee for renewal for another equivalent period in case the lessee guarantees investments in machinery equipments and the like, it least to the tune of 20 times the value of annual dead rent within 3 years from the of such extension.
The value of the machinery, equivalent and the like shall be determined by the Government.
Were the lease is so renewed, the dead rent and the surface rent shall be fixed by the Government within the limits given in the Second Schedule to these rules, and shall in no case exceed twice the original dead rent and surface rent respectively, and the royalty shall be charged at the rates in force at the time of renewal".
It is urged for the appellant that the State Government has discretion to fix the initial period of the lease as well as to fix the of the extension of the lease after the expiry of the initial period.
The High Court did not agree with this submission of the and, we think, rightly.
The word 'may ' in the main provision of the rule must mean shall ' and make the provision mandatory.
This is obvious from the last portion of the provision.
If the State Government had discretion to fix any period of the lease, the last portion of the provision would be redundant.
The Government could fix the period of the lease at any period shorter than live yea AS.
But the provision requires the fixing of the period shorter than 5 years only when the applicant desires a shorter period.
The period of the lease therefore can be shorter than five years only when the applicant desires and not when the Government desires.
Government must fix the period of the lease at 5 years in the absence of any expression of desire by the applicant for taking the lease for a shorter period.
The word 'may ' in the proviso in regard to the extension of the period by Government should also be construed as 'shall so as to make it incumbent on Government to extend the period of the lease if the lessee desires extension.
Of course no question for the extension of the lease can arise if the lessee himself does not wish to have the lease for a further period.
It is on account of this option existing in the lessee that the word 'may ' has been used in this context.
The lessee has been given a further option to have the lease extended by another five years but such an option is to be respected only if he gives the guarantee referred to in the proviso.
If he is not prepared to give such a guarantee, he cannot exercise the option for 409 the extension of the lease and the lease must automatically expire at the end of the first extended period.
The first extension has to be for five years.
Government has no option in that regard as well.
This appears from what is provided in connection with the option of the lessee for a second extension.
The second extension, at his option, is to be for a period equivalent to the period of the first extension.
The guarantee to be given is to the effect that the lessee would invest in machinery etc.
, at least to the tune of 20 times the value of the annual dead rent within 3 years from the grant of such extension.
There is no point in, taking a gurantee to make certain investments within three years if the second extended period of the lease is of a shorter duration as it can be if Government has a discretion in granting extension for a period shorter than 5 years.
If the first extension be for less than three years the second extension cannot be for a longer period.
If that expression 'such extension ' refers to the extension on the exercise of the option of the lessee at the end of the first extension, it would be a preferable construction of the proviso to hold that the Government is bound to extend the period of the lease for five years at the expiry of the initial period of the lease and that the lessee will have the option for renewal of the lease for another five years in case be guarantees the requisite investment as mentioned in the proviso.
Another way of looking at the provision and a better way is that the expression 'such extension ' refers to the first extension which the Government grants at the expiry of the initial term of the lease.
This means that at the time of granting the first extension the lessee has to choose whether he should also ask for the option for a second extension.
The option would then be an integral part of the agreement about the first extension.
This is also indicated from the language of the proviso linking the period of extension with the option for renewal of the lease for an equivalent period If no option as such is given at the time and is not a term of the lease, the lessee may not be able to ask for a second extension at the end of the first extended period of the lease.
When he secures the exercise of such an option as a term of the lease, he has to guarantee that within the first three years of the extended period of the lease he will make the heavy investment mentioned in the proviso with the resultant confidence that he will have undisturbed lessee rights for a period of 10 years from the expiry of the initial term of the lease: Whichever construction be put, with respect to the time when the term about option is to be settled between the parties, it must follow that the period of the first extension must be five years and not less.
We are further of opinion that the High Court is right in holding that the respondent 's taking the lease for a period upto July 31, 1959 must amount to his expressing a desire for having a lease for that period.
If he did not so desire, he need not have bid and taken the lease for the period for which it was to be given by auction.
410 it has been argued for the State that the High Court granted relief to the respondent in excess of what he had prayed, inasmuch as the High Court had directed the Government to renew the respondent 's first lease for a period of 5 years with option to further renewal if so desired for another period of 5 years subject to the condition mentioned in r. 30 when the respondent had not prayed for any direction with respect to the option for a second extension of the lease.
The contention is not sound.
The relief claimed after the expiry of the period of the first lease, which, according to the respondent, was also to be extended by two years, reads: " and then, after the expiry of the period of five years the lease be renewed for a period of five years under Rule 30 ,of Rajasthan Minor Mineral Concession Rules, 1955".
The renewal was to be under r. 30.
Rule 30 itself requires extension of the lease with option in the lessee for obtaining another extension for an equivalent period.
This option must be a term of the lease and therefore must be incorporated in the lease at the time when the first extension is granted.
The prayer therefore should be deemed to include a prayer for an extension of 5 years with the necessary option.
Even if the prayer was not so made, the High Court was competent to make the direction in accordance with the requirements of the proviso to r. 30.
The direction for renewal is, in our view.
in full accordance with what the proviso requires.
The result is that the appeal fails and is dismissed with costs.
Appeal dismissed.
| The respondent who had as a result of auction obtained a mining lease from the appellant State, applied for extension of the lease period in view of the mandatory nature of the main provision of rule 30 and simultaneously also applied for renewal of the lease in accordance with the provisions of the proviso to rule 30.
The appellant refused the first prayer but extended the period by a few months.
The respondent thereafter, filed a writ petition in the High Court for striking down the order of the Government renewing the lease by a few months and for directing the appellant to extend the lease in the first instance for two years to bring it in conformity with the period of lease specified in rule 30 and to renew after the expiry of such extended period, for a further period of 5 years under rule 30.
The appellant contended that the provisions of Chapter IV of the rules did not apply to the grant of mining leases by auction or tender provided for by Chapter V of the rules and that in any case the initial period short of 5 years must be deemed to have been at the desire of the respondent and that any further extension of the period of lease under the proviso was in the discretion of the appellant and consequently, the respondent could not claim to have the period of the lease extended for a period of 5 years.
The High Court disagreed with the appellant 's contentions and allowed the petition.
In appeal by certificate; HELD: Matters not provided for by rules in Chapter V with regard to mining leases will be covered by provisions relating to those matters in Chapter IV, as these provisions deal with the essential Incidents affecting grant of mining leases.
[404 H] Rule 30 applies to leases granted under Chapter V both because the rules under Chapter IV apply to such leases and because there is no corresponding rule in Chapter V. [407 G H] The word "may" in the proviso in rule 30 in regard to the extension of the period by, Government should also be construed as 'shall ', so as to mike it incumbent on Government to extend the period of the lease if the lessee desires extension.
Of course no question for the extension of the lease can arise if the lessee himself does not wish to have the lease for a further period.
It is on account of this option existing in the lessees that the word 'may ' has been used in this context.
But the option given to the lessee to have the lease extended by period of another five years is to be respected only if the lessee gives the guarantee referred to in the proviso.
[408 H] The first extension must be five years and not less.
The period of lease can be shorter than five years only when the applicant desires and not when the Government desires.
[409 B] 403
|
ivil Appeal No. 1979 of 1981.
From the Judgment and Order dated 7.1.81 of the Bombay High Court in Civil Writ Petition No. 1248 of 1977.
P.P. Rao, Kailash Vasdev and section Murlidhar for the Appel lants.
A.K. Sanghi for the Respondent.
The Judgment of the Court was delivered by VERMA, J.
This appeal by special leave is against the judgment dated January 7, 1981 in Writ Petition No. 1248 of 1977 of the Nagput Bench of the Bombay High Court.
The special leave has been confined only to the question of liability of the appellant, Life Insurance Corporation, to pay interest for the period after date of maturity of insur ance policy, in case of delay in payment.
Accordingly, this is the only question arising for decision in this appeal.
The writ petition in the High Court was filed by Smt.
Kamalabai G. Ranade, the wife of Gangadhar Vishwanath Ranade of Nagput.
The said G.V. Ranade took four policies on his own life from the Life Insurance Corporation of India (hereinafter referred to as "the LIC") during the period 1958 to 1960.
These policies were paid up and the particu lars thereof including their paid up value payable on the date of maturity are as under: Policy Sum Paid up Date of Number Assured Value Maturity.
19620636 10,000.00 3415.70 14.9.72 13932229 3,500.00 1118.65 28.12.73 13969 144 5,000.00 892.20 9.11.75 13972300 2,000.00 557.70 21.12.75 In April 1969 G.V. Ranade assigned absolutely all these four 101 insurance policies in favour of his wife Smt.
Kamalabai G. Ranade and the assignment so madewas duly registered by the LIC as under: "In registering this Assignment the Corpora tion makes no admission as to its validity.
Nagpur sd/ Dt.
8.4.69 P. Divisional Manag er" It appears that there were some income tax dues against the said G.V. Ranade for recovery of which Income tax Offi cer had commenced recovery proceedings.
Prior to the date of maturity of these policies the Income tax Officer on 27.1.1971 issued a notice under section 226(3) of the Income Tax Act, 1961 to the Manager of the LIC at Nagpur directing the LIC to pay to the ITO forthwith any amount due from the LIC to or, held by the LIC for or on account of the said G.V. Ranadeto meet the amount due from G.V. Ranade as ar rears of income tax.
This notice further mentioned the consequences envisaged by section 226(3) of the Income Tax Act, 1961.
The Divisional Manager of the LIC at Nagput intimated the fact of receipt of the notice under section 226(3) of the Income Tax Act, 1961 to the assignee of these policies, Smt.
Kamalabai G. Ranade, suggesting that she take steps to get the notice vacated in order to safeguard her interest in the policies.
The further correspondence in this behalf between Income tax Officer, the LIC and the assignee shows that the Income tax Officer required the LIC to depos it the amount of Rs.3415.70 payable against the first policy which was to mature on 14.9.72 and the LIC kept the assignee informed of this demand by the ITO adding in its letter dated 27.7.1972 to the assignee that the moneys due under the policies will be paid to her "only after your getting the notice served on us by the ITO vacated".
This was reit erated by the LIC in its letter dated 11.8.72 to the assign ee.
The assignee sent a notice dated 21.8.72 to the LIC reiterating that the policies had been absolutely assigned to her as admitted by the LIC as a result of which the amount payable against the same had to be paid only to her since the amount was not held by the LIC for or on account of G.V. Ranade.
The LIC was also required by this notice to take the necessary steps for revocation of the ITO 's notice and to make the payment due in respect of all these policies to the assignee.
The assignee sent a similar notice to the ITO asserting her claim as the assignee to get the moneys payable under the policies.
The ITO in a letter dated 28.7.72 addressed to the LIC had added that the alleged 102 transfer of policies by G.V. Ranade to his wife are void with an intention to defraud the revenue and the case falls within the mischief of section 281 of the Income Tax Act, 1961; and the LIC was requested to withhold any payment to Smt.
Kamalabai G. Ranade till further communication from the ITO.
On 5.9.1972 Smt.
Kamalubai G. Ranade filed a writ peti tion, (S.C.A. No. 861 of 1972), in the High Court of Bombay impleading the LIC and the ITO as respondents therein claim ing several reliefs which are mentioned at pages 33 to 35 of the paper book.
The reliefs included a direction to the LIC for payment of Rs.3415.70 due on 14.9.72 on maturity of the first policy to Smt.
Kamalabai G. Ranade and also to make a statement on oath as contemplated by section 226(3) of the Income Tax Act, 1961 that no part of the said amount is due to G.V. Ranade nor does the LIC hold any part of the sum for or on account of G.V. Ranade.
This writ petition was dis missed in limine by the High Court on 14.9.72.
The amount of Rs.3415.70 payable against the first policy which matured on 14.9.72 was paid by the LIC to the ITO.
Kamalabai G. Ranade filed an appeal (C.A. No. 373.of 1973) by special leave in this Court against dismissal of her writ petition by the Bombay High Court.
That appeal was disposed of by this Court on October 6, 1975 as under: "On behalf of the Life Insurance Corporation of India Mr. Rathi stated that he would file the necessary statement on oath in accordance with sub cl.
(vi) of CI.
(3) of section 226 of the Income Tax Act, 1961 and file it in Court within two months from today stating that no sum of money is due to the Assessee, insured person, before the Incometax Officer.
It will thereafter be open to the Income tax Officer to take such other proceedings as he might consider necessary in order to realise the amounts due from the assessee.
It is, however, stated that in respect of one policy, the Life Insurance Corporation has already paid the money to the Income tax Officer.
In respect of it no statement need be made and consequently no order can be made under section 226(3)(vi).
The appeal is disposed of accord ingly.
There will be no order as to costs".
In pursuance of the above order of this Court, the LIC filed on December 5, 1975 the requisite statement on oath under section 226(3)(vi) of the Income Tax Act, L961 in respect of the remaining three policies.
103 It appears that the ITO did not revoke the order of attachment in spite of the LIC making the requisite state ment on oath under section 226(3)(vi) of Income Tax Act, 1961 on 5.12.75.
This led to another writ petition (S.C.A. 302 of 1977) filed in the Bombay High Court by Smt.
Kamala bai G. Ranade praying for a direction to the ITO to revoke all notices issued under section 226(3) to the LIC and to the LIC to pay to her the amount due against the policies which had matured.
On 4.4.71 counsel for the ITO produced before the High Court a copy of the order dated 1.4.77 passed by the Income tax Officer withdrawing the notice under section 226(3) of the Income Tax Act, 196 1 and the writ petition was dismissed as withdrawn.
Kamalabai G. Ranade then promptly sent a notice to the LIC demanding payment of the total amount due against these four policies together with interest @ 15% since the delay in payment had been occasioned by the default of the LIC.
Admittedly the LIC had made the payment of these amounts to Smt.
Kamalabai G. Ranade in these circumstances.
The L.I.C. has not disputed at any stage its liability to pay to Smt.
Kamalabai G. Ranade the amounts due under these policies.
However, it has disputed its liability to pay interest thereon for any period after the date of maturity on the ground that the delay was Occasioned by the I.T.O. 's notice under section 226(3).
On the other hand, Smt.
Kamala bai G. Ranade claimed that the L.I.C. nad wrongfully refused to make the statement as contemplated under section 226(3)(vi) of the Income Tax Act, 1961 resulting in delay in payment of the moneys after maturity of the policies.
This dispute regarding the L.I.C. 's liability to pay interest led to the filing of the Writ Petition No. 1248 of 1977 decided on January 7, 1981 which gives rise to this appeal.
The impugned judgment of the Bombay High Court in Writ Petition No. 1248 of 1977 holds that the last two policies having matured on 9.11.
1975 and 21.12.1975, i.e., a few days before or after 5.12.75 when the statement on oath under section 226(3) of the Income Tax Act, 1961 was made by the L.I.C. did not qualify for award of such interest which was payable in respect of the first two which had matured much earlier on 14.9.72 and 28.12.73.
For the period com mencing from the date of maturity of the policy ending with performance of the L.I.C. 's obligation to make the statement under section 226(3)(vi) of the Income Tax Act, 1961 on 5.12.75 the L.I.C. has been held liable to pay interest on the basis of its failure to perform 104 its statutory obligation.
This view of the High Court on which the award of interest is based, is assailed on behalf of the appellant.
The surviving dispute in this appeal is now only .about the L.I.C. 's liability for payment of interest on the prin cipal amount from the date of maturity of the first two policies to 31.12.75, and the rate of 15 % per annum which is alleged to be excessive.
Broadly stated, the contention of the appellant is that the appellant was not liable to pay any interest for the period during which it was restrained from making the pay ment on account of the I.T.O. 's notice under section 226(3) of the Income tax Act, 1961 and the I.T.O. also adding that the matter fell within the ambit of section 281 of the Act.
On this basis it was urged on behalf of the appellant that the award of interest on the first two policies from the date of their maturity till 31.12.1975 (statement on oath by the L.I.C. being made only.
on 5.12.1975) is contrary to law.
To support the main contention of the appellant, that it is not liable for payment of any interest for any period after maturity of the policies, Shri P.P. Rao, learned counsel for the appellant advanced several arguments.
His first argument is that the Income tax Officer was a neces sary party in the writ petition giving rise to this appeal and in his absence no effective adjudication of this dispute can be made.
The second argument is that the High Court has misconstrued section 226(3) of the Income Tax Act, 1961 and thereby wrongly fastened the liability for payment of inter est upto 31.12.75 on the appellant.
The third argument is that the principle of res judicata or atleast constructive res judicata, as a result of the earlier writ petitions, bars the claim for payment of interest in this writ peti tion.
The fourth argument is that the writ petition (S.C.A. No. 302 of 1977) being withdrawn unconditionally without liberty to file a fresh petition, this writ petition (W.P. No. 1248 of 1977) is not maintainable.
The fifth argument is that the rate of 15% p.a. at which interest has been awarded is excessive.
The sixth and the last argument is that the appellant has been required to make double payment of Rs.3415.70 due against the policy which matured on 14.9.1972 inasmuch as the L.I.C. had already deposited that amount earlier in September 1972 with the I.T.O. in pursuance to the I.T.O. 's demand.
In reply, Shri A.K. Sanghi, learned counsel for the respondent contended that the liability for payment of interest has been correctly fastened on the appellant be cause of its failure to discharge the statu 105 tory obligation of making the requisite statement on oath under section 226(3)(vi) of the Income Tax Act, 1961 till 5.12.1975.
He argued that the L.I.C. having accepted and registered the absolute assignment made by the insured G.V. Ranade in favour of his wife Smt.
Kamalabai G. Ranade, it was the duty of the L.I.C. to promptly make the requisite statement on oath under section 226(3)(vi) of the Income Tax Act, 1961 which it made much later on 5.12.75 in pursuance to the Court 's order to enable the I.T.O. to revoke the notice issued by him under section 226(3) of the Income Tax Act, 1961.
Shri Sanghi stated that even though the special leave granted by this Court is confined only to the question of interest and therefore, does not extend to the question of alleged double payment of Rs.3415.70 by the L.I.C. yet the respondent concedes that the amount of Rs.3415.70 depos ited by the L.I.C. with the I.T.O. may be refunded by the I.T.O. to the L.I.C. together with interest, if any, payable on refund of that amount; and that the respondent does not lay any claim to that amount from the I.T.O. having obtained that amount from the L.I.C.
We shall first dispose of the last point relating to double payment by the L.I.C. of the amount of Rs.3415.70 in view of the express concession made by Shri Sanghi, learned counsel for the respondent that the respondent does not lay any claim to it and that the L.I.C. may obtain its refund from the I.T.O.
In view of this statement of learned counsel for the respondent, Shri Sanghi, it is sufficient to observe that it would be open to the L.I.C. to obtain refund of the amount of Rs.3415.70 deposited by it with the I.T.O. togeth er with interest, if any, payable on the refund by the Income Tax Department, since it has been conceded that the respondent does not claim that amount from the I.T.O. We shall now deal with the remaining arguments of Shri Rao, learned counsel for the appellant.
The first argument of the learned counsel for the appel lant is that the I.T.O. was a necessary party in the writ petition giving rise to this appeal.
We are unable to accept this contention.
The only claim made in Writ Petition No. 1248 of 1977 decided on 7.1.1981 giving rise to this appeal is for payment of interest by the appellant, and no relief has been sought against the I.T.O. This being so, for effective adjudication of the L.I.C. 's liability towards the respondent, the presence of the I.T.O. is not necessary.
The respondent 's claim is only against the L.I.C. without any claim being made in the alternative or otherwise against the I.T.O.
The respondent 's claim has, therefore, to succeed or fail only on the basis of the L.I.C. 's liability vis a vis the respondent without involving the I.T.O. or anyone else in that process.
Merely 106 because the defence of the L.I.C. was based on an act of the I.T.O., it was not incumbent for the respondent to implead the I.T.O. in this proceeding when neither any relief was claimed against the I.T.O. nor was any suggestion of I.T.O. 's liability for payment of interest made in the writ peti tion.
This argument is, therefore, rejected.
The second argument relating to construction of section 226(3) of the Income Tax Act, 1961 is in fact the main argument of Shri Rao and, therefore, we shall consider the same after disposing of the remaining arguments which are shorter points.
The third argument is based on the principle of res judicata and constructive res judicata on the basis of two earlier writ petitions filed by Smt.
Kamalabai G. Ranade.
The first writ petition was S.C.A. No. 861 of 1972 filed in the Bombay High Court on 5.9.72 prior to the date of maturi ty of the first policy claim against,which was required to be paid by the L.I.C. to the assignee, Smt.
Kamalaba G Ranade.
This was after issuance of the notice under section 226(3) of the Income Tax Act, 1961 by the I.T.O. to the L.I.C. One of the reliefs claimed therein was a direction to the L.I.C. to make a statement on oath as required by sec tion 226(3)(vi) of the Income Tax Act, 1961 that no part of the amount due against the policy maturing on 14.9.72 was due to the insured G.V. Ranade nor did the L.I.C. hold any part of that sum for or on account of the alleged defaulter.
No doubt some other reliefs including revocation of the notice under section 226(3) of the Income Tax Act, 1961 were.
also claimed including payment 01 ' the amount together with the accretions thereto.
This writ petition being dis missed, Smt.
Kamalabai G. Ranade came to this Court by special leave and Civil Appeal No. 373 of 1973 was disposed of by this Court 's order dated 6.10.1975 requiting the L.I.C. to make the necessary statement on oath in accordance with section 226(3)(vi) of the Income Tax Act, 1961 within two months.
It is obvious that with this direction requiring the L.I.C. to make the requisite statement on oath under section 226(3)(vi) of the Income Tax Act, 1961, no further question survived in that writ petition and the consequent civil appeal in this Court since the further questions including payment of interest on the principal amount were to arise only at a subsequent stage.
Asking for any other relief was obviously premature at that stage.
It is appar ently for this reason that this Court did not at that stage go into the other questions relating to the further reliefs specified in that writ petition.
That decision cannot, therefore, preclude agitation of the question of interest subsequently.
107 The next writ petition filed by Smt.
Kamalabai G. Ranade was S.C.A. No. 302 of 1977 in the Bombay High Court.
The prayer made therein was for a direction to the L.I.C. to pay the principal amount together with interest thereon.
In this writ petition also the I.T.O. was impleaded as a party.
This writ petition had to be filed because in spite of the L.I.C. having made the requisite statement under section 226(3)(vi) of the Income Tax Act, 1961 on 5.12.75, the Income tax Officer had not withdrawn the notice under section 226(3) of the Income Tax Act, 1961 issued to the L.I.C. and, there fore, the L.I.C. was not making the payment to the respond ent.
On 4.4.77 that writ petition was dismissed as withdrawn as a result of the I.T.O . 's counsel filing a copy of the order dated 1.4.1977 withdrawing the I.T.O. 's notice under section 226(3) of the Income Tax Act, 1961 enabling the L.I.C. to make the payment due against the policies to the respondent.
The operation of the notice under section 226(3) of the income Tax Act, 1961 by the I.T.O. being the only reason given by the L.I.C. to support its action of non payment to the respondent, it was unnecessary to persue that writ petition when the I.T.O. had made the order withdrawing the notice under section 226(3) of the Act.
Admittedly, it was in consequence of the withdrawal of the I.T.O. 's notice by order dated 1.4.77 that payment was actually made by the L.I.C. to the respondent.
It is, therefore, difficult to appreciate how the withdrawal of that writ petition can, in any manner, preclude the respondent from raising the ques tion of the L.I.C. 's liability to pay interest when the principal amount alone was paid later.
The L.I.C. having refused to pay the interest on the principal amount in spite of the inordinate delay in pay ment, the Writ Petition No. 1248 of 1977 had to be filed giving rise to this appeal raising only the question of L.I.C. 's liability to pay interest on the principal amount due against the policies.
The same is therefore, clearly maintainable and the earlier writ petitions cannot, in any manner, bar the adjudication of this point her, 'in for the reasons already given.
This contention of learned counsel for the appellant is also, therefore, rejected.
The fourth contention based on withdrawal of writ peti tion (S.C.A. No. 302 of 1977) being covered by the discus sion relating to the third contention, the same is rejected.
The fifth argument relates to the rate of interest.
Shri Rao contended that the award of interest @15% p.a. is exces sive even if the L.I.C. is held liable for payment of inter est.
Reference was made by 108 Shri Rao to Section 244 of the Income Tax Act, 1961 provid ing for payment of interest on refund which prescribed the rate of 12% p.a. from 1.7.1972 to 1.10.1984, the increase to 15% p.a. being made therein only from 1.10.84 by amendment of that section.
It was urged that the period in question in the present case being prior to 1.10.84 the rate of 15% p.a. in excess of the statutory provision of 12% p.a. in Section 244 of the Income Tax Act, 1961 is unjustified.
Admittedly, the award of interest, in the present case, for payment by the L.I.C. is not governed by Section 244 of the Income Tax Act, 1961.
Apparently, for this reason, learned counsel for the appellant relied on Section 244 of the Income Tax Act, 1961 as of persuasive value.
We are not impressed by this argument.
The High Court has relied on the fact that inter est @ 15% p.a. is reasonable, in the present case, particu larly in view of the fact that the L.I.C. itself charges interest at that rate.
It is sufficient for us to state that there is no material produced, in the present case, to suggest that award of interest @ 15% p.a. is excessive to permit interference with the rate in this appeal particular ly when the High Court has come to the conclusion that this is the reasonable rate.
This argument also is, therefore, rejected.
The only point remaining for consideration now is the construction of Section 226(3) of the Income Tax Act, 1961 the relevant portion of which, reads as under: "Other modes of recovery: 226.(1) Notwith standing the issue of a certificate to the Tax Recovery Officer under section 222, the In come tax Officer may recover the tax by any one or more of the modes provided in this section.
. . (3)(i) The Income tax Officer may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee, to pay to the Income tax Officer either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears or the whole of the money when it is equal to or less than that amount.
109 (ii) A notice under this sub section may be issued to any person who holds or may subsequently hold any money for or on account of the assessee jointly with any other person and for the purposes of this sub section, the shares of the joint holders in such account shall be presumed, until the contrary is proved to be equal.
(iii) A copy of the notice shall be forwarded to the assessee at his last address known to the Income tax Officer, and in the case of a joint account to all the joint holders at their last addresses known to the Income tax Officer.
(iv) Save as otherwise provided in this sub section, every person to whom a notice is issued under this subsection.
shall be bound to comply with such notice, and, in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary for any pass book, deposit receipt, policy or any other document to be produced for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary.
(v) Any claim respecting any proper ty in relation to which a notice under this sub section has been issued arising after the date of the notice shall be void as against any demand contained in the notice.
(vi) Where a person to whom a notice under this subsection is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee, then, nothing contained in this sub section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Income tax Officer to the extent of his own liability to the assessee on the date of the notice, or to the extent of the assessee 's liability for any sum due under this Act, whichever is less.
(vii) The Income tax Officer may, at any time or 110 from time to time, amend or revoke any notice issued under this sub section or extend the time for making any payment in pursuance of such notice.
(viii) The Income tax Officer shall grant a receipt for any amount paid in compli ance with a notice issued under this sub section, and the person so paying shall be fully discharged from his liability to the assessee to the extent of the amount so paid.
(ix) Any person discharging any liability to the assessee after receipt of a notice under this sub section shall be person ally liable to the Income tax Officer to the extent of his own liability to the assessee so discharged or to the extent of the assessee 's liability for any sum due under this Act, whichever is less.
(x) If the person to whom a notice under this subsection is sent fails to make payment in pursuance thereof to the Income tax Officer, he shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realisation of the amount as if it were an arrear of tax due from him, in the manner provided in sections 222 to 225 and the notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under sec tion 222." . . ." The argument of the learned counsel for the appellant is that on receipt of the I.T.O. 's notice under section 226(3) of the Income Tax Act, 1961, the L.I.C. was not left with the option to make the payment to assignee of the policies since the L.I.C. or its officer making the state ment on oath under section 226(3)(vi) would thereby have been exposed to personal liability as the defaulter of the income tax dues.
It was argued that in these circumstances the L.I.C. could make the payment only aftter revocation of the notice by the I.T.O. 's Order dated 1.4.77 and, there fore, the L.I.C. cannot be held liable for payment of inter est for any period prior to revocation of the notice.
The period for which the L.I.C. has been held liable to pay interest being prior to revocation of the notice by the I.T.O., it was urged that the same was unjustified.
111 Having given our anxious consideration to the argument we cannot persuade ourselves to accept the same.
On a close scrutiny of the provision we find that the benefit claimed by the L.I.C. is not available to it, in the facts of the present case.
Admittedly assignment of the policies was made by the insured G.V. Ranade and the same was duly accepted and registered by the L.I.C. in April 1969.
It is, therefore, obvious that the L.I.C. was bound to act on that assignment in favour of Smt.
Kamalabai G. Ranade unless the assignment was held to be invalid by a competent authority in a proper proceeding taken for this purpose.
It is significant that the L.I.C. never disputed the validity of the assignment and was throughout prepared to act on it.
It is undisputed that the assignment was not declared invalid by any competent authority.
Mere issuance of notice under section 226(3) of the Income Tax Act, 1961 did not have the effect of invali dating the assignment nor did the casual mention of Section 281 of the Income Tax Act, 1961 by the I.T.O. in his letter dated 28.8.72 result in this consequence.
Any further step towards formation of the final opinion by the I.T.O. could be taken only after the L.I.C. had made the requisite state ment on oath under section 226(3)(vi) of the Income Tax Act, 1961 on the basis of the registered assignment of policies.
This act was performed by the L.I.C. only on 5.12.75 which led to revocation of the notice under section 226(3) of the Act, by the I.T.O.
The question is of the liability of the L.I.C. in these circumstances.
Section 226 consists of several Sub sections of which sub sections (1) and (3) alone are relevant for our purpose.
Sub section (1) enables the I.T.O. to recover the tax by anyone or more of the further modes provided in this sec tion.
Sub section (3) deals with one such mode where the defaulter 's money is held by another person.
Clause (i) of sub section (3) enables the I.T.O. by notice in writing to require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the assessee to pay the Income tax Officer that money or so much of it as is suffi cient t6 pay the dues of the assessee in respect of the arrears of tax.
It is in exercise of this power that the I.T.O. had issued the notice to the L.I.C. in the present case.
Obviously, the I.T.O. had assumed that the money payable on maturity of these policies belonged to the in sured/assessee/defaulter G.V. Ranade overlooking the duly registered assignment made much earlier in favour of the assessee 's wife in April 1969.
The further clauses (ii) to (v) of sub section (3) deal with ancillary matters and also provide that any 112 claim in respect of property covered by the notice shall be void after the date of the notice as against the demand contained in the notice.
Clause (vi) is relevant for the present purpose and speaks of the obligation of a person to whom such a notice has been sent.
Clause (vi) relieves the person receiving such a notice from the liability to pay any sum to the I.T.O. in obedience to the notice if he "objects to it by a statement on oath that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on account of the assessee".
This clause fur ther provides that "if it is discovered that such statement was false in any material particular" such person shall be personally liable to the I.T.O. to the extent of the asses see 's liability on the date of notice.
Clause (vii) then provides, inter alia, for amendment or revocation of the notice issued under this sub section by the I.T.O.
This stage of amendment or revocation of the notice under clause (vii) is reached only after the stage provided in clause (vi), in a case where the notice objects that he does not hold the money for or on behalf of the defaulter of tax dues.
It is, therefore, obvious that the question of revoca tion of the notice under clause (vii) of sub section (3) of section 226 of the Income Tax Act, 1961 arose in the present case only after the L.I.C. made the requisite statement on oath under section 226(3)(vi) of the Act in view of its consistent stand throughout that the moneys due under the policies were held by it for and on behalf of the assignee and not the defaulter.
Mere information of the assignment to the I.T.O. and keeping the assignee informed of the I.T.O. 's action did not amount to discharge of the statutory obliga tion under section 226(3)(vi) of the Act, by the L.I.C.
The statute having expressly provided the mode of raising such an objection in the form of a statement on oath specified in clause (vi), performance of that obligation by the notice had to be made only in that manner.
This statutory obliga tion was performed by the L.I.C. only on 5.12.1975 as stated earlier.
The personal liability arising after making the requisite statement on oath as envisaged by clause (vi) is only "if it is discovered that such statement was false in any material particular and not otherwise.
Learned counsel for the appellant argued that the requisite statement under section 226(3)(vi) of the Income Tax Act, 1961 could not be made by the L.I.C. since it involved the risk of exposing the L.I.C. or its officer making the statement on oath to personal liability for the income tax dues of the assessee/defaulter G.V. Ranade.
In the first place, such a statement was in fact made without hesitation by the 113 L.I.C. on 5.12.75 after the assignee was compelled to obtain such a direction in a writ petition filed by her.
That apart the risk visualised on behalf of the L.I.C., in ultimate analysis, is entirely imaginary and not real.
The risk of personal liability envisaged in clause (vi) arises only "if it is discovered that such statement was false in any mate rial particular".
Thus, there is no risk of personal liabil ity of the person making the statement on oath unless any material particular mentioned in the statement is false.
The statement on oath required to be made by clause (vi) is only "that the sum demanded or any part thereof is not due to the assessee or that he does not hold any money for or on ac count of the assessee".
The L.I.C. itself has taken the stand throughout that the sum demanded by the notice issued under section 226(3) of the Income Tax Act, 1961 by the I.T.O. did not belong to the assessee inasmuch as it was payable only to the assignee, Smt.
Kamalabai G. Ranade by virtue of the assignment made, accepted and registered in April 1969 much earlier to the date of the notice.
This being so the making of this statement on oath of the L.I.C. 's own stand which in fact was so made on 5.12.75 did not involve even remotely the possibility of any risk of personal liability.
On the contrary, real risk of the L.I.C. being treated deemed defaulter assessee under clause (x) of sub section (3) of section 226 of the Act lay in its failure to pay to the I.T.O. after receipt of notice under section 226(3), the amounts of the matured policies within the time given by the I.T.O. or a reasonable time, without objecting to the demand by denying its liability to the assessee in the manner prescribed in clause (vi) thereof, instead of in doing so.
Prudence also required the L.I.C. in its own interest, to object to the demand according to clause (vi) instead of refusing or delaying the objection.
The argument that such a statement was not made since it involved the likelihood of exposing the L.I.C. or any of its officers to personal liability has, therefore, no merit.
This being the only reason given by the L.I.C. to justify the inordinate delay in making the requisite statement under section 226(3)(vi) of the Income Tax Act, 1961, it is obvious that this defence is untenable.
Sub section (3) of section 226 of the Income Tax Act, 1961 clearly shows that on a notice thereunder being issued by the I.T.O. to the L.I.C., in the present case, it was incumbent on the L.I.C. to make the requisite statement on oath under clause (vi) thereof raising an objection on the basis of the registered assignment.
It was then for the I.T.O. to proceed further and form his final opinion and revoke the notice under clause (vii).
It was not possible for the assignee of the 114 policies to obtain revocation of the notice by the I.T.O. without the requisite statement on oath being made by the L.I.C. as envisaged in clause (vi) of sub section (3) of section 226 of the Income Tax Act.
It is obvious that the inordinate delay in making the statement on oath by the L.I.C. under section 226(3)(vi) of the Income Tax Act, 1961 was the result of misconstruction of the provision and misappreciation of its liability thereunder.
Obviously the assignee of the policies who had become entitled to receive the amounts due thereunder on the dates of their maturity must be compensated by the L.I.C. for its failure to perform its statutory obligation under section 226(3)(vi) of the Income Tax Act, 1961 within a reasonable time.
We have no doubt that this is the proper construction of section 226(3) of the Income Tax Act, 1961 and the conse quential liability resulting from the failure of the notice to raise the objection in the prescribed manner under clause (vi) thereof within a reasonable time.
Performance of this statutory obligation by the L.I.C., in the present case, being after inordinate delay, award of interest to the assignee of the policies to whom the payment thereunder had to be made even according to the stand of the L.1.C. is, therefore, clearly justified.
This contention which is really the main contention urged on behalf of the appellant, therefore, fails and is rejected.
Consequently, the appeal is dismissed with costs.
The costs are quantified at Rs.2,000.
R.N.J. Appeal dis missed.
| The Respondent filed proceedings for eviction against the Petitioner firm in respect of a property situated at Narnaul under the Haryana Urban (Control of Rent and Evic tion) Act, 1973 and obtained a decree of eviction.
Petition er 's appeal against that decree failed in the High Court and the Special Leave Petition filed by it in this Court was also dismissed on 24.8.87.
While dismissing the Special Leave Petition this Court inter alia directed that the order of eviction shall not be executed for a period of six months on the Petitioner 's filing usual undertaking in this Court within four weeks.
Usual under taking implied that the Petitioner was in possession of the property and that it would deliver vacant possession of the property by the time granted to it by the Court.
The Petitioner did not file any undertaking in this Court.
Instead three of Sanjay Kumar and Lala Ram sons of Rajkumar and Ved Prakash who are sons of Ganpat Ram (a partner in the petitioner 's firm) filed a suit in the Court of senior Sub Judge, Narnaul for permanent injunction restraining the decree holders from ejecting Sanjay Kumar & Lala Ram.
In the said suit the said plain tiffs obtained an order of temporary injunction dated 3.11.
The said suit was filed against Kalu Ram and Puran Chand son of Roshan Lal and also against Ganpat Rai.
The learned Senior Subordinate Judge in his order dated 12.2.88 granting injunction to the plaintiffs took the view that the plaintiffs had claimed a right of tenancy to the premises in question independently and as such the decree of eviction passed by this Court in Special Leave Petition No. 5597 of 1987 would not bind the plaintiffs.
On this reason ing he issued the injunction.
Being unable to obtain possession of the property in question, Kalu Ram and Ant.
who were respondents in Special Leave Petition (decree holders) have filed this Petition praying for initiation of Contempt of Court proceedings against the Petitioner firm.
224 Disposing of the Petition with some directions this Court, HELD: On the date of the order of this Court dated 21st August 1987, in the Special Leave Petition, the Petitioner therein had obtained time on the implied assurance and representation that they were in possession of the premises in question and were capable of delivering the vacant pos session to the applicants.
The effect of the said order of this Court, is that the applicants would have vacant posses sion from the firm, Ganpat Ram Rajkumar.
[227C D] Having regard to the relationship between the parties and having regard to the undertaking promised to be filed in this Court, upon which time was obtained from this Court, it appears, there is a clear non compliance of the order.
[227E] The said order must be implemented and cannot be allowed to be defeated by the dubious methods adopted by the part ners of the said firm of Ganpat Ram Raj Kumar.
The whole conduct betrays a calculated attempt to defeat the order of this Court and to mislead the Court.
Sons and grandsons of the partners or erstwhile partners of the firm cannot be allowed to frustrate the order of this Court.
[227G H; 228A] The Respondents, all of them, were guilty of acts which had to the situation and thereby frustrate the order of this Court.
Though perhaps the respondents could not be found guilty of violating any undertaking as there was none, in the facts and circumstances of the case, this Court should ensure compliance with its order dated 24th August 1987 and see that vacant and peaceful possession is given to the applicant in the interest of Justice.
[229D E] Failure to give possession, if it amounts to contempt in a situation of this nature is a continuing wrong.
There was no scope for application of section 20 of the Act.
[230B] The Court accordingly directed the learned Senior Sub Judge.
Narnaul (Haryana) to cause, deliver up the vacant possession of the shop situated at Sabji Mandi Narnaul Distt.
Mohindergarh (Haryana), if necessary with the help of police forthwith.
The learned Senior Sub Judge is also di rected to report compliance immediately.
Save as aforesaid, the Court passed no order on this application.
Respondents viz., firm Ganpat Ram, Rajkumar, Ganpat Ram, Rajkumar, Sanjay Kumar, Lalu Ram and Ved Prakash are directed to pay to the applicants the costs of this Application, quantified at Rs.2,500.
This order will 225 not prevent or prejudice the applicants from taking any step for recovery of arrears of rent and mesne profits as they are entitled to in accordance with law.
[230C E] Babu Ram Gupta vs Sudhir Bhasin & Anr., ; and Thackar Hariram Motiram vs Balkrishan Chatrathu Thacker
|
Civil Misc.
Petition No. 5255 of 1986 101 in Civil Appeal No. 1885 of 1977 From the judgment and order dated 23.7.75 of the High Court of Gujarat at Ahmedabad in Special Civil Application No. 1636 of 1972.
M.N. Shroff, for the Petitioner Soli J. Sorabjee, P.H. Parekh and Meeta Singhvi, for the Respondents.
The Judgment of the Court was delivered by PATHAK, J.
The petitioner, Shri Virendrasinhji Chauhan, was at one time the ruler of Chhota Udepur.
The State of Chhota Udepur containd the Jagir of villages Gundi and Kheda, in which a half share belonged to a Jagirdar, Thakor Shri Pravinsinhji Bharatsinhji of Kadwal (hereinafter referred to as "the Thakor").
An agrement dated March 19, 1948 was executed between the Governor General of India and the Raja of Chhota Udepur.
Under that agreement the Raja ceded to the Dominion Government full and exclusive authority, jurisdiction and powers for, and in relation to, the governance of the State and agreed to transfer the administration of the State to the Dominion Government on June 10, 1948.
In lieu thereof the Raja was entitled to receive a privy purse and was entitled to the full ownership and enjoyment of all private properties (as distinct from State properties) belonging to him on the date of the agreement.
He and the members of his family were entitled to all personal privileges enjoyed by them within or outside the territories of the State immediately before August 15, 1947.
A letter dated October 1, 1948 from Shri V.P. Menon of the Government of India in the Ministry of States elaborated on the terms of the agreement and also declared: "(5) Pensions, gratuities, annnuities, and allowances granted by the State to the members of its public services who have retired or have proceeded on leave preparatory to retirement before 1st April 1948, as also the enjoyment of the ownership of Khangi Villages, lands, jagirs, grants, etc.
existing on 1st April 1948 are hereby guaranteed.
This guarantee is without prejudice to the right of Government of Bombay to issue any legislation which does not discriminate against the State and their subjects.
" 102 As has been mentioned, the Thakor was the owner of a half share of the Jagir of villages Gundi and Kheda.
Under the provisions of the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953, he became entitled to compensation for the trees standing on the lands of the Jagir.
He filed an application for compensation.
By an award dated May 27, 1969, the Jagir Abolition Officer, Baroda held him entitled to compensation in respect of unreserved trees only and declared that no compensation was payable in respect of reserved trees in the Jagir.
He fixed the value of unreserved trees at Rs.2,620 and observed that while half of the compensation was payable to the claimant the other half would go to the former ruler of Chhota Udepur.
The Thakor appealed to the Gujarat Revenue Tribunal, and the Tribunal, by its order dated June 9, 1961, remanded the case to the Jagir Abolition Officer for a fresh determination of the valuation of unreserved trees, while observing at the same time that he was not entitled to compensation for reserved trees.
The Thakor filed a writ petition in the High Court, and on December 16, 1963 the High Court held that he was entitled to compensation in respect of reserved trees also.
By his order dated September 2, 1967, the Jagir Abolition Officer awarded Rs. 18,258 as compensation for all the trees, reserved as well as unreserved, standing on the Gundi and Kheda Jagir and directed that out of that amount a sum of Rs.9,129 was to be paid to the Thakor.
Dissatisfied with the award, the Thakor filed an appeal.
On March 29, 1968, the Gujarat Revenue Tribunal remanded the case to the Prant Officer with the direction that he should determine the valuation of the trees on the basis of the evidence on record.
The Prant Officer, Chhota Udepur made his award on August 7, 1971 and held that the valuation of all the trees was Rs.10,134.96 only, of which the Thakor would be entitled to Rs.5,067.48.
The Thakor again appealed to the Gujarat Revenue Tribunal and the Tribunal found that the total value of all the trees was Rs.68,039 of which half was payable to the Thakor.
The Thakor then filed a writ petition in the Bombay High Court, and on July 23, 1975 the High Court held that the total market value of the trees was Rs.1,70,540 and the Thakor would be entitled to the half share of Rs.85,270 with interest at 3 per cent per annum on that amount from August 1, 1954.
The State of Gujarat obtained Special Leave to appeal against the order of the High Court.
This gave rise to Civil Appeal No. 1885 of 1977.
During the pendency of the appeal an application was made by the petitioner, Shri Virendrasinhji Chauhan, praying for permission to be impleaded as a respondent in the appeal.
The application was 103 allowed on August 18, 1977 and the petitioner was added in the array of respondents.
In this behalf the record of the case states: "Upon hearing the office report and hearing counsel for the parties, the Court allowed the application of Maharaja Virendrasinhji N. Chauhan for being impleaded as a party respondent in this matter and also directs that non filing of the application in the High Court for a certificate to appeal to this Court is ignored and condoned.
The Court granted Special Leave limited to the question of solatium and interest and dictated an oral order dated August 18, 1977 disposing of the appeal with no order as to costs.
" The appeal was disposed of by an order of that date which reads: "In view of the decision of this Court in State of Gujarat & Ors.
vs Gujarat Revenue Tribunal & Anr.
the award for solatium is knocked down and interest will also be awarded in the light of that judgment.
Parties were agreed to this situation in this Court.
The appeal is disposed of accordingly.
There will be no order as to costs.
" The petitioner applied to the State of Gujarat and the Collector of Baroda claiming that he was entitled to a half share in the total amount of compensation, but apparently met with no success.
Accordingly, he applied to this Court for initiating proceedings for contempt of Court against the State and the Collector.
Meanwhile, the State had field an application for the amendment of the order of this Court permitting the petitioner to be impleaded as a respondent in the appeal.
Both applications were disposed of by an order dated April 4, 1978, which reads: "We do not think that this is a case where a contempt proceeding can be started on the allegation made in the petition.
The petitioner may follow such right as may be available to him in law for enforcement of the award, decree or order if there be any in his favour.
Mr. S.T. Desai appearing for the State stated that he is withdrawing his petition which is filed for amendment to the order of this Court in C.M.P. Nos.
6560 to 6571 of 1977.
" 104 The petitioner persisted with the State authorities for payment to him of a half share in the compensation, but having failed to obtain payment he has filed the present petition claiming that a sum of Rs.4,80,487.10 was payable to him on account of a half share in the compensation with interest thereon.
The application is opposed by the State of Gujarat and the Collector of Baroda.
It is disputed that the petitioner is entitled to any compensation under the order dated August 18, 1977 of this Court disposing of the appeal.
It is contended that the mere fact of being impleaded as a respondent in this Court does not entitle the petitioner to any part of compensation awarded by the High Court, which was concerned solely with adjudicating a dispute between the Thakor and the State.
It is pointed out that the petitioner had never made an application for compensation on the abolition of the jagir, and was not a party to the proceedings before the Jagir Abolition Officer and the Gujarat Revenue Tribunal.
The adjudication by those authorities determined that a half share belonged to the Thakor and there was no adjudication that the other half share belong to the petitioner.
On the contrary, it is asserted, the half share belonged to the erstwhile State of Chhota Udepur and on its merger with the then State of Bombay that half share belonged to the State of Bombay.
On the reorganisation of the States in 1960, when the State of Gujarat came into existence, the half share passed into the ownership of the State of Gujarat.
Upon the abolition of Jagirs on August 1, 1954 by the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953, the Jagir of Gundi and Kheda was abolished and it now stood vested in the State of Gujarat.
It is pointed out further that the inventory of the private properties of the ruler prepared under the Instrument of Merger made no reference to the Jagir of Gundi and Kheda.
It is also stated that the application for modification of the order dated August 18, 1977 impleading the petitioner was not pressed by the State only because the petitioner had withdrawn the application for contempt and, therefore, there was no point in pursuing it.
The question is whether the right of the petitioner to a half share of the compensation stands determined by the order dated May 4, 1978 of this Court disposing of the appeal.
The appeal was directed against the order dated July 23, 1975 of the High Court.
That order was made on a writ petition filed by the Thakor against the State of Gujarat.
The petitioner was not a party to the writ petition.
The writ petition had arisen on proceedings taken in respect of the Thakor 's half share in the Jagir and the determination of the compensation.
We have perused the 105 order of the High Court disposing of the writ petition and we do not find any adjudication on any claim of the petitioner.
The entire controvesy before the High Court was a controversy between the Thakor and the State.
It is true that when the valuation of the Thakor 's half share was determined by the High Court in the writ petition, the valuation of the other half share stood automatically determined.
But there is nothing in the order of the High Court determining the ownership of that other half share.
There is nothing at all to indicate that the other half share belongs to the petitioner.
As we have seen, the petitioner applied for being impleaded as a respondent in the Special Leave Petition, but the order impleading him did not amount to an adjudication on the question whether he was the owner of the other half share in the compensation.
It was a Special Leave Petition filed by the State of Gujarat against an order of the High Court passed on the dispute between the State and the Thakor.
The presence of the petitioner in the array of respondents could not vest any right in the petitioner to any part of the compensation.
If the appeal was allowed in terms of the relief sought by the State, it would have resulted in a reduction of the quantum of compensation awarded to the Thakor.
If it had been dismissed, the quantum of compensation determined by the High Court would have stood affirmed.
There was no scope anywhere in the appeal for determining whether the petitioner could claim a part of the compensation.
Upon that ground alone this petition must fail.
If it was permissible to go into the merits of the claim of the petitioner, it would be necessary to consider whether any part of the Jagir of Gundi and Kheda belonged to the petitioner before the Instrument of Merger and, if it did, whether under the Instrument of Merger it was included in the list of private properties of the ruler or was retained by him under any other provision of the Instrument of Merger or of law.
We find it unnecessary to express any opinion on this point because, as has been seen earlier, the petitioner has based his claim on the order of this Court disposing of the appeal, and that order cannot be said to confer any rights on the petitioner in respect of the compensation payable on the abolition of the Jagir.
It will be for the petitioner to establish his title to a half share of the compensation in some other proceeding.
The petition fails and is dismissed with costs.
P.S.S. Petition dismissed.
| The appellant plaintiff purchased a plot of land.
The respondent defendant accepted the plaintiff as owner on a rent of Rs. 1325 per annum for a period of five years, under a registered rent note.
It was further stipulated therein that the tenant was to pay the municipal tax in respect of the rented land to the plaintiff, that on the expiry of the period of five years the tenant shall remove the constructions thereon at his own expense, and hand over the premises in the condition it was let out and that the premises shall not be let out to anyone else.
The plaintiff called upon the defendant to remove the construction erected on the land, and the vacate the premises and hand over possession.
As the defendant failed, a suit for eviction was filed, on a number of grounds one of which was that the premises had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable caused and, therefore the defendant was liable to eviction under section 13(1) (k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove bona fide requirement, and that as defendant No. 2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff, the plaintiff was not entitled to recover possession on the ground of illegal sub letting.
The plaintiff took up the matter in appeal and the Assistant Judge allowed the appeal partly, holding that the notice of termination was a valid one, that the plaintiff did not 718 require the suit premises reasonably and bona fide for occupation for himself and that the suit premises had not been w ed by the defendant continuously for a period of six months immediately preceding the date of suit without any reasonable cause.
The respondent tenant took up the matter in revision before the High Court, which reversed the finding of the Ist appellate court on the question of user by the defendant, holding that the construction of the super structure on the land itself was a user and, therefore, the courts below had committed a manifest error in holding that the land in question had not been w ed for more than six months prior to the institution of the suit.
In the appeal to this Court, it was contended on behalf of the appellant landlord that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause, and that the tenant would be liable for eviction even if he did not use the premises and kept it locked.
On behalf of the respondent tenant it was contended, that the purpose of letting cannot be assumed, and that it has got to be alleged and proved.
The landlord plaintiff could seek eviction under 8. 13()(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been w ed for the purpose for which it was let out.
It was further contended that if the landlord had specifically taken the plea of non user of the premises for the purpose for which it was let out, he would have been able to prove the reasonable caw e for not doing 80 but in the absence of such a plea the defendant tenant had been seriously prejudiced, and that sec.
12 and 13 of the Act are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted .
Allowing the Appeal, ^ HELD : 1.
The judgment of the High Court is set aside and the plaintiff 's suit stands decreed.
The High Court has gone wrong in holding that the construction of super structure on the land in dispute was itself a user.
The super structures had already been built before the defendant took the land from the plaintiff under rent note, exhibit 61.
As regards sub tenancy, it has 719 been found by the Courts below to have been created long before A the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 came into force.
There was therefore no question of the eviction of the subtenant as the sub tenancy was not illegal.
[726 B; 725 G 726 A] 2.
The scheme of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it appears from the preamble is to consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions.
The control had to be brought in because of the scarcity of accommodation in the cities.
If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of a reasonable cause.
The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together.
[724 H 725 B] 3.
Neither the purpose of letting is indicated in the rent note (Ex.61) nor has it been proved by evidence.
A perusal of the rent note indicates that, there is no specific mention of the purpose for which the premises was rented out to the defendant.
The defendant had taken the premises from the predecessor in interest of the plaintiff and had made certain super structures on the land in question.
There is, however, material on the record to show that the premises had been let out to the defendant for the purpose of business.
Indeed, the premises had been taken in the name of a firm carrying on tobacco business.
The defendant admitted in his deposition that he had shifted his business to Baroda.
He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same.
In the reply given by the counsel for the defendant to the notice, of termination given by the plaintiff, it is admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the registered firm Vora Manilal Chaganlal & Co., carrying in business in Nadiad.
In this situation it cannot be argued that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant.
[723 E H] 4.
The stipulation in the rent deed to the effect that; 'even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above ' only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closed.
This, however, does not 720 mean that the defendant can keep the premises closed without using lt for years together before the suit.
This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns.
If the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without incurring the liability of eviction, as it sought to be contended for the respondent, it would amount to allowing the parties contracting out of law.
[724 D E] In the instant case, on the own showing of the defendant respondent, the premises had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda.
Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out.
[725 F]
|
ition (Crl.) No. 2989 of 1983.
(Under article 32 of the Constitution) R.L. Panjwani, Manoj Saxena and R.D. Upadhaya for the petitioners.
The Order of the Court was delivered by CHANDRACHUD, C.J, The question raised in this petition is whether the Government can ask the police not to enter a place of worship, even if criminals are reported to be hiding or harboured therein.
It is impossible and undesirable for any Court to issue a general writ of Mandamus to the effect that whenever a criminal is suspected to have taken shelter in a place of worship, the police must enter that place, regardless of the overall situation of law and order.
Speaking generally, Courts cannot enforce law and order by issuing general directions without reference to specific instances.
The Government has to assess, in the context of the prevailing conditions, the impact of the steps taken to enforce law and order.
And, it is the executive which has to take a policy decision as regards the steps to be taken in a given situation, after 903 taking into account the demands of the prevailing situation.
We do not commend or suggest that the police should be silent spectators to wanton destruction of life but we cannot, as men of some little experience of law and life, commend that the police must enter places of worship forcibly.
While enforcing law and order, the executive cannot be oblivious of the possibility that while solving one problem of law and order, others more acute than the one sought to be solved may arise.
That is always a valid and relevant consideration.
With these observations, we dismiss this petition filed by two public spirited organisations through their courageous convenor and secretary respectively.
M.L.C. Petition dismissed.
| HELD: It is the executive which has to take a policy decision as regards the steps to be taken in a given situation, after taking into account the demands of the prevailing situation.
It is not that the police should be silent spectators to wanton destruction of life; but the Court cannot commend that the police must enter places of worship forcibly.
[902 H; 903 A]
|
Appeals Nos. 165 and 166 01 1965.
Appeals from the judgment and decree dated May 7, 1960 of the Madras High Court in O.S.A. Nos. 25 and 52 of 1956.
S.V. Gupte, Naunit Lal and R. Thiagarajan, for the appellants (in both the appeals).
N.C. Chatterjee, section Balakrishnan for R. Ganapathy lyer, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Bachawat, J.
The dispute arises out of a contract between the appellants and the respondent entered into on November 13, 1951.
The terms of this contract were recorded in writing in the form of a letter written by the respondent to appellant No. 1 and set out below: "Messrs. P.S.N.S. Ambalavana Chettiar and Company Ltd., 260, Angappa Naicken Street, Madras.
Dear Sirs, We confirm having purchased from you and the Madras Paper Marketing Company, Madras, 500 tons of Russian Newsprint as per the following description : About.70 per cent in reels of 34 inches width. " 15 per cent in reels of 22 inches width.
" 15 per cent in reels of 36 inches width.
at annas 9 per lb.
Ex Wharf Bombay duty, etc., paid.
The buyers are to take delivery within four days of the offer of delivery.
Any wharfage, etc., up to the fourth day of the offer of delivery will be on seller 's account and thereafter on buyer 's account.
We have also sold you about 415 tons of Russian newsprint in sheets in size of about 30"X 42" (760 mm X 1085 mm) ex godown, Madras at Re. 0 9 6 per lb.
We will keep the stock of sheets in our godown on your account free of rent.
We shall advance you moneys against this newsprint at annas 8 per lb.
This advance will carry interest at 5 per cent per annum.
We will also charge you the exact amount of insurance which we pay to our Insurance Company against the goods.
241 We shall pay Rs. 5,60,000 to your Bankers in Bombay and take delivery of the 500 tons of newsprint from the harbour in Bombay.
Accounts wilt be made on the basis of the above arrangement and whatever one party is liable to pay to the other will be adjusted subsequently.
Thanking you, Yours faithfully, For Express Newspapers Limited Director.
" The document shows that the respondent agreed to buy from the appellants 500 tons of Russian newsprint in reels at 9 annas per lb., ex wharf Bombay, and to take delivery of the goods on payment of Rs. 5,60,000.
At the same time, the appellants agreed to buy from the respondent 415 tons of Russian newsprint in sheets then lying in a godown in Madras at 9 annas 6 pies per lb.
upon the term that the appellants would pay the insurance charge and also interest at 5 per cent per annum on an amount equivalent to the price of the goods calculated at 8 annas per lb.
The understanding was that the appellants would within a reasonable time take delivery of the goods bought by them in instalments and the accounts would be finally adjusted on the completion the deliveries.
It may be mentioned that appellant No. 2 carried on business under the name and style of Madras Paper Marketing Company.
On November 26, 1951, the parties orally agreed that instead of 500 tons the respondent would buy 300 tons of newsprint in reels and that instead of 415 'tons the appellants would buy 300 tons of newsprint in sheets and the terms of the contract dated November 13, 1951 would stand varied accordingly.
On December 5, 1951, the respondent took delivery of 300 tons of newsprint in reels on payment of Rs. 3,18,706 9 10 and a sum of Rs. 57,816 13 2 remained due to the appellants on account of the price of these goods.
From November 29, 1951 up to February 27, 1952, the appellants took delivery of 122324 lbs.
of newsprint in sheets on payment of.
63,032 15 9 to the respondent.
Subsequently, the appellants refused to take 'delivery of the balance 547501 lbs.
of newsprint in sheets.
Counsel for the parties agreed before us that March 29, 1952 was the date when the appellants repudiated the contract.
On April 21, 1952 after giving notice to the appellants the respondent resold the balance goods to one G.R. Lala at 61/2 annas per lb.
On April 18, 1952, the appellants filed in the High Court of Madras C.S. No. 175 of 1952 claiming from the respondent 242 Rs. 57,816 13 2 on account of the balance price of 300 tons of newsprint in reels and interest thereon.
The respondent admitted the claim for the balance price.
On July 30, 1952, the respondent filed in the High Court of Madras C.S. No. 262 of 1952 claiming a decree for Rs. 62,266 13 2 on account of the balance price of 122324 lbs.
, the deficiency 'on resale of 547501 lbs.
of the newsprint in sheets, interest and insurance charges after setting off the sum of Rs. 57,816 13 2 due to the appellants.
The principal defence of the appellants was that the contract with regard to 415 tons of newsprint in sheets was cancelled in November, 1951 and that appellant No. 2 was not a party to this contract.
The appellants also denied the factum and validity of the resale.
The two suits were tried.
by Rajagopala Ayyangar, J. He dismissed C.S. No. 175 of 1952 and decreed C.S. No. 262 of 1952.
From these two decrees, the appellants filed two appeals in the High Court of Madras.
A Division Bench of the High Court dismissed the two appeals.
The present appeals have been filed on certificates granted by the High Court.
The two Courts concurrently found that (1 ) appellant No. was a party to the contract of purchase of 415 tons of newsprint in sheets, (2) on November 26, 1951 the parties orally agreed that instead of 415 tons the appellants would buy 300 tons of the newsprint and (3) there was no cancellation of the contract as alleged by the appellants.
These findings are not challenged.
The two Courts concurrently found that the resale held on April 21, 1952 was genuine and was effected at a proper price on due notice and after proper advertisement.
Mr. Gupte attempted to challenge these findings, but we see no reason to interfere with them.
The principal argument advanced by Mr. Gupte was that the property in the goods resold on April 21, 1952 had not passed to the appellants and the resale was consequently invalid.
We are inclined to accept this argument.
It is to be noticed that the contract did not envisage any loan of money by ,the respondent to the appellants on the security of the newsprint in sheets.
The payment of Rs. 3,18,706 9 10 was made by the respondent towards part discharge of its liability for the price of the newsprint in reels.
No. doubt, the contract stated: "We shall advance you moneys against this newsprint at annas 8 per lb.
This advance will carry interest at 5 per cent per annum.
" But the real import of this clause was that the appellants would pay interest at 5 per cent per annum on an amount equivalent to the price of the newsprint in sheets calculated at 8 annas per lb.
The respondent was not a pledge of the newsprint in sheets and had no right to sell the goods under section 176 of the .
The real question is whether the respondent had the right to resell the goods under section 54(2) of the .
243 The seller can claim as damages the difference between the contract price and the amount realised on resale of the goods where he has the right of resale under section 54(2) of the .
The statutory power of resale under section 54(2) arises if the property in the goods has passed to the buyer subject to the lien of the unpaid seller.
Where the property in the goods has not passed to the buyer, the seller has no right of resale under section 54(2).
The question is whether the property in the 300 tons of newsprint in sheets had passed to the appellants before the resale.
On November 13, 1951, the respondent agreed to sell to the appellants tile stock of 415 tons of newsprint in sheets then lying in the respondent 's godown in Madras.
There was an unconditional contract for the sale of specific goods in a deliverable state and the property in the goods then passed to the appellants.
But on November 26, 1951, the contract was varied in a material particular.
The parties, agreed that the appellants would buy only 300 tons of the stock of 415 tons of newsprint then lying in the respondent 's godown.
The result was that in place of the original contract for sale of specific goods a contract for sale of unascertained goods was substituted.
Rajagopala Ayyangar, J. held that the effect of the variation of the contract on November 26, 1951 was that the appellants and the respondent became joint owners of the stock 45 tons.
In our opinion, this was not the correct legal position.
The parties did not intend that the appellants would buy undivided share in 415 tons of newsprint.
On November 26, 1951 the bargain between the parties was that the appellants would buy and the respondent would sell 300 tons out of the larger stock of 415 tons.
The appellate Court held that the property in the entire 415 tons passed to the appellants who were subsequently reviewed from their liability to take 115 tons and that the respondent could resell any 300 tons out of the larger stock of 415 tons.
We are unable to accept 'this line of reasoning.
It is true that originally the property in the entire 415 tons had passed to the appellants.
But the result of the variation of the contract was to annul the passing of property in the goods.
The effect of the bargain on November 26, 1951 was that the respondent would sell and deliver to the appellants any 300 tons out of the larger stock of 415 tons.
As from November 26, 1951, the property in the entire stock of 415 tons belonged to the respondent.
The parties did not intend that as from November 26, 1951 the property in any individual portion of the stock of 415 tons would remain vested in the appellants.
244 Section 18 of the provides that where there is a contract for the sale of unascertained goods no property the goods is transferred to the buyer unless and until the goods are ascertained.
It is a condition precedent to the passing property under a contract of sale that the goods are ascertained.
The condition is not fulfilled where there is a contract for sale of a portion of a specified larger stock.
Till the portion is identified and appropriated to the contract, no property passes to the buyer.
In Gillett vs Hill(1), Bayley, B. said: "Where there is a bargain for a certain quantity extra greater quantity, and there is h power of selection in the vendor to deliver which he thinks fit, then the right to them does not pass to the vendee until the vendor has made his selection, and trover is not maintain able before that is done.
If I agree to deliver a certain quantity of oil as ten out of eighteen tons, on one can say Which part of the whole quantity I have agreed to deliver until a selection is made.
There is no individuality until it has been divided.
" No portion of 415 tons of the newsprint lying in the respondent 's godown was appropriated to the contract by the respondent with the appellants 's consent before the resale.
On the date of the resale, property in the goods had not passed to.
the buyer Consequently, the respondent had no right to resell the goods under section 54(2).
The claim to recover the deficiency on resale is not suitable.
The respondent to claim as damages the difference between the contract price and the market price on the date of the breach.
Where no time is fixed under the contract of sale for acceptance of the goods, the measure of damages is prima facie the difference between the contract price and the market price on the date of the refusal by the buyer to accept the goods, see Illustration (c) to section 73 of the .
In the present case, no time was fixed in the contract for acceptance of the goods.
On March 29, 1952, the appellants refused to accept the goods.
The respondent is entitled to the difference between the contract price and the market price on March 29, 1952.
Counsel for both parties requested us that instead of remanding the matter we should assess the damages on this basis and finally dispose of the matter.
We have gone through the materials on the record and with the assistance of counsel, we assess the market price of the Russian newsprint in sheets on March 29, 1952 at 8 annas per lb.
Counsel on both sides agreed to this assessment.
The claim of the respondent for Rs. 6,7)8 5 1 on account of interest and Rs. 1,119 6 0 for insurance charges is admitted (1) ; , ,873.
245 before us by Mr. Gupte.
On this basis, the final position is as follows: (Rupees) Price of 122324 lbs.
at 91 1/2 annas per lb.
less Rs. 63,032 15 9 9,596 14 3 Difference on 547051 lbs.at 11/2 annas per lb.
51,286 0 6 Interest 6,795 5 1 Insurance charges .
1,119 6 0 Total amount due to the respondent . 68,797 9 10 Deduct amount due to the appellants . 57,816 13 2 Balance due to the.respondent . . 10,980 12 8 In the result, Civil Appeal No. 165 of 1965 is allowed in part, the decrees passed by the Courts below are varied by substituting therefore a decree in favour of the respondent against the appellants for a sum of Rs. 10,980 12 8 with interest thereon at 6 per cent per annum from July 30, 1952.
The decrees for 'costs passed by the Courts below are affirmed.
There will be no order as to costs in this Court.
Civil Appeal No. 166 of 1965 is dismissed.
No order as to cost thereof.
V.P.S. C.A. 165 of 1965 allowed in part.
C.A. 166 of 1965 dismissed.
| To establish that an impartible estate has ceased to be joint family property for purposes of succession it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate.
In each case it is incumbent on the plaintiff to adduce satisfactory grounds for holding that the joint ownership of the defendant 's branch in the estate was determined so that it became the separate property of the last holder 's branch.
The test to be applied is whether the facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and an inten tion to impress upon the zamindari the character of separate property.
The right to bring about a partition of an impartible estate cannot be inferred from the power of alienation that the holder thereof may possess.
In the case of an imparti ble estate the power to divide it amongst the members does not exist, though the power in the holder to alienate it is there, and from the existence of the one power the other cannot be deduced, as it is destructive of the very nature and character of the estate and makes it partible property.
A member of a joint family owning an impartible estate can on behalf of himself and his heirs renounce his right of succession but any such relinquishment must operate for the benefit of all the members and the surrender must be in favour of all the branches of the family as representing all its members.
General words of release in a release deed do not mean release of rights other than those then put up, and have to be limited to the circumstances which were in the contempla tion of the parties when it was executed.
32 242 On the death of the holder of an impartible estate who represented the first branch his widow K got into possession claiming that the estate was the separate property of her husband and also under a will.
Disputes arose between her and the members of the 2nd, 3rd and 4th branches of the family and these were settled amicably.
S who was the senior member of the 3rd branch obtained village D and one fourth of certain pannai lands as absolute owner and exe cuted a release deed on 6th May, 1890, in these terms: "Whatever rights over the said zamin properties and in all other above mentioned properties S might possess he gives up such rights absolutely in favour of the said K and her heirs enabling them to enjoy them with the power of alienation thereof by gilt, sale, etc. .
The said S and his heirs shall have no claim at all to the properties shown as belonging to K 'S who represented the 2nd branch and had instituted a suit against K compromised the suit on the 10th May, 1890, under a deed which provided inter alia: (i) that the zamindari shall be enjoyed by K till her lifetime and that KS and his heirs shall after the lifetime of K enjoy the zamindari except village D which was given to S; (ii) village B and one fourth of certain pannai lands shall be given to KS absolutely; (iii)all other pannai lands, build ings and movables which belonged to K 's husband shall be enjoyed by K and her heirs absolutely." On the death of K the estate became vested in Z, the son of KS.
On the death of Z without issue the second branch became extinct and disputes arose with regard to the ownership of the pannai lands and buildings, village B, and the zamindari between the widow of Z (who was the grand daughter of K) and the senior members of the 3rd and 4th branches: Held (i) that as KS was competent to alienate the pannai lands and buildings in favour of K and vest her with absolute title, and S had also agreed to give them to her absolutely, K became the absolute owner of these lands and buildings and these ceased to be part of the joint estate and devolved on the grand daughters of K as her stridhana heirs.
(ii) In view of the arrangement of 1890 it was not open to any of the parties to deny that the village B was separated from the zemindari and given to KS absolutely as his private property.
The village consequently devolved on Z as separate property and on his death it devolved on his widow.
(iii) The arrangement made in 1890 did not evidence a partition amongst the members of the joint family or prove an intention on the part of the junior members of the family to renounce their expectancy of succession by survivorship on failure of the male lineal descendants in the branch of KS.
(iv) That the recitals in the release deed executed by S had to be read in the light of the compromise in the suit of KS, and the 243 proper inference from both the documents read together was that S renounced only his right to succeed to the zemindari immediately as the seniormost member of the family and that he did not renounce his right or the right of his branch to succeed to the zemindari by survivorship if and when occa sion arose; the senior member of the 3rd branch was there fore entitled to succeed to the zemindari in preference to the senior member of the 4th branch and the widow of Z. Vadrevu Ranganayakamma vs Vadrevu Bulli Ramaiya (5 C.L.R.439), Sivagnana Tear vs Periasami (5 I.A. 51) and Thakurani Tara Kumari vs Chaturbhuj Narayan Singh (42 I.A. 192)distinguished.
Sartaj Kuari 's case (15 I.A. 51), Konammal vs Annadana (55 I.A. 114), Collector of Gorakhpur vs Ram Sunder Mal (I.L.R. 56 All. 468 P.C.), Sri Raja Lakshmi Devi Garu vs Sri Raja Surya Narayana (I.L.R. P.C.) and Directors etc.
of L.& S.W. Ry.
Co. vs Richard Doddridge referred to.
The Judgment of the Madras High Court affirmed.
|
Civil Appeal No. 438 of 1967. 'Appeal from the judgment and order dated April 11, 1966 of the Rajasthan High Court in D.B. Civil Reference (Estate Duty Act) No. 16 of 1963.
M.C. Chagla, B.D. Sharma and M. D. Bhargava, for the appellant.
Jagdish Swarup, Solicitor General, T.A. Ramachandran, R.N. Sachthey and B.D. Sharma, for the respondent.
C.J. Purnabai widow of Sagarmal Mody held on April 1, 1953 three deposit receipts of the aggregate face value of Rs. 6,26,724 14 0 with the State Bank of Bikaner.
By her letter dated July 22, 1952 Purnabai informed the Bank that she intended to make a gift of the amounts of two out of the three receipts to Suryakant son of her adopted son Satyanarayana, and requested that the receipts be renewed for three months in the joint names of "Purnabai Sagarmal Mody and/or Surya Kant section Mody payable to either or survivor." and that the renewed fixed deposit receipts be sent to Satyanarayana at Bombay.
Pursuant to this letter two fresh receipts were issued on August 3, 1953 for Rs. 5,00,000 and Rs. 45,793/4/ .
It 'appears that a receipt for Rs. 80,931 / 10/ was previously obtained in the joint names of Purnabai and Suryakant on July 4, 1953.
714 On August 16, 1953 Puranabai executed a deed of gift in favour of Suryakant in respect of the three receipts containing the following recitals: "Out of natural love and affection I have towards the said Suryakant son of Satyanarayana I hand over to the said Satyanarayana as the father and natural guardian of the said Suryakant Fixed Deposit Receipts total for Rs. 6,26,724/14/ .
F.D.R.N. 222/ 8293 dated 3 8 53 for Rs. 45,793/4/ , F.D.R.N. 221/ 8292 dated 3 8 53 for Rs. 5,00,000/ of the Bank of Bikaner Ltd., Jaipur and F.D.R. No. 11446 dated 4 7 53 for Rs. 80,931/10/ of Bank of Bikaner Ltd., Jhunjhunu in the name of Purnabai Sagarmal and Suryakant Satyanarayana Mody payable to either or survivor as and by way of gift to the said Suryakant on the 15th day of August 1953 and that the said Satyanarayana for and on behalf of and as the.
natural guardian of the said Suryakant accepted the said gift of Rs. 6,26,724/ .
. . gifted by me as aforesaid.
" The gift deed contained a confirmation by Satyanarayana that he had accepted the gift for and on behalf of and as natural guardian of Suryakant "to the intent and effect that the said Suryakant shall be the absolute owner of the sum gifted.
" On August 17, 1953 Purnabai addressed a letter to the Manager of the Bank enclosing a copy of the declaration of gift and intimated that her grand son Suryakant was the sole owner of the amount of the two fixed deposit receipts and till Suryakant section Mody attained the age of majority the receipts should remain in the joint names as they then stood.
From time to time Purnabai presented the receipts for renewal when they matured and obtained fresh receipts in the joint names of herself ,and Suryakant.
On August, 25 1955 the receipt for Rs. S0,931/10/ was encashed and out ' of the amount of Rs. 86,732/ realized, Rs. 5,000/ were invested in the name of Suryakant in National Savings Certificates.
The balance was also deposited alone with a firm in Bombay also.
in the name of Suryakant alone.
The other two receipts were renewed in the joint names of Purnabai and Suryakant.
After the death of Purnabai on February 15, 1956, the two receipts were encashed by Suryakant.
The Assistant Controller of Estates duty in procedings for assessment of estate duty held inter alia that possession and enjoyment of the gifted property was not assumed by the donee to the entire exclusion of the 715 donor, and on that account the amount of the two receipts and interest thereon formed part of the estate of Purnabai and was, liable to estate duty.
Regarding the third receipt for Rs. 80,931/10/ the Assistant Controller observed that even though the earlier receipt was discharged on August 25, 1955 i.e. within two years of the death of Purnabai and the amount was invested in the name of Suryakant, by virtue of the provisions of the the amount held in the name of Suryakant alone, was for assessment of estate duty liable.
to be included in the estate.
of Purnabai.
In appeal the Central Board of Revenue confirmed the order.
The Board held that at all material times during the currency of the fixed deposit Purnabai had the right to receive the money from the Bank by giving discharge for the same and that whenever the Fixed Deposit Receipts matured during the lifetime of Purnabai, the receipts were, in fact, discharged by her alone and in the circumstances it could not be said that the property was held ' by the donee to the entire exclusion of the donor.
The Board of Revenue referred the following question the High Court of Rajasthan for opinion: "Whether on the 'facts and in the circumstances of the case the sum of Rs. 6,85,193/ was correctly included in the estate of the deceased as property deemed to pass on her death under section 10 of the ?" The High Court of Rajasthan answered the question in the affirmative.
With certificate granted by the High Court this appeal has been preferred.
The deposit receipts were renewed from time to time after August 16, 1953 in the joint names of Purnabai and Suryakant till August 25, 1955 under their terms the receipts could be encashed by either or the survivor.
Even after Purnabai made a gift of the amount represented by the three receipts, she continued to obtain the receipts in the joint names, presumably with the object of not parting with control over those receipts.
Counsel for the appellant however contended that the fixed deposit receipts were held by Purnabai in her name as benamidar for Suryakant.
Counsel placed strong reliance upon the letters dated July 22, 1953, August 17, 1953 and the terms of the deed of gift dated August 16, 1953.
By the letter dated July 22, 1953 the Manager of the Bank was informed that in respect of two out of the three receipts Purnabai intended to make a gift and the . 716 Manager was requested that the receipts be made in the joint .names of Purnabai and Suryakant.
It was expressly recited in the letter: "I intend to gift the entire amount of the receipts to my grandson Mr. Suryakant section Mody hence you are requested to prepare the receipts in joint names as under: "Purnabai Sagarmall Mody and/or Suryakant section Mody payable to either or survivor.
" The deed of gift also recites that Purnabai had made a gift of the amount of Rs. 6,26,724/14/ represented by the previous receipts in favour of Suryakant, and that the gift was accepted by Satyanarayana on behalf of Suryakant.
The letter dated August 17, 1953 recites that a copy of the deed of declaration of gift.
was sent to the Bank for record and information and proceeds to state: "Further I would like to state that now Suryakant section Mody is the sole owner of the above Fixed Deposit Receipts in question till Suryakant section Mody attains majority the receipts should remain in joint names as it stands now.
" is clear that Purnabai desired to make a gift of the amount represented by the previous deposit receipts and did in fact execute a deed of gift.
The Bank had notice of the gift deed.
Counsel for the appellant contends that Purnabai did everything possible to divest herself of her interest in the money held by her, in deposit with the Bank, and retained no interest therein and that in obtaining renewal of the receipts in the joint names of herself and of Suryakant, she was merely a benamidar 'and in any event was acting on behalf of Suryakant.
Counsel further contends that the Bank having notice of the gift could not have parted with the money except only for the benefit of the minor and by obtaining renewal of the receipt in favour of the minor Suryakant and Purnabai, the latter retained no possession or enjoyment of the money represented by the receipts.
Counsel invited our attention to a decision of the Madras High Court in Imperial Bank of India, Madras vs section Krishnamurthi and another(1) in which Beasely, C.J. speaking for the Court observed that when a Bank having notice that the administrators of the estate of the depositor intended to commit a breach of trust by seeking to invest monies contrary to express directions of the will paid out the money, the Bank was liable to make good to the beneficiary (1) A.I.R. 1933 Madras, 628.
717 the money deposited by the testator.
In that case one Naidu had deposited a sum of money with the Imperial Bank of India in fixed deposits.
Naidu died having bequeathed by his will the amount deposited to Iris son Krishnamurthi who was then a minor.
Naidu had appointed by his will two persons to be guardians of Krishnamurthi with authority to receive the amount in fixed deposit with the Imperial Bank and to apply the same for the maintenance and education of Krishnamurthi.
The guardians obtained from the High Court of Madras grant of letters of administration with copy of the will annexed.
After the death of one of the guardians the surviving guardian withdrew the money from the Bank on the pretext that he wanted to invest it on more advantageous terms in house property or some other form of in vestment and misappropriated it.
On attaining the age of majority Krishnamurthi sued the Bank.
It was held by the High Court that the Bank knowing of the trust created by the will had parted with and delivered the amount deposited to the administrator who intended to commit a breach of the trust.
The learned Chief Justice quoted a passage from Hart 's Law of Banking (Edn. 3) at p. 159 that "A banker who receives into his possession moneys of which his customer to his knowledge became the owner in a fiduciary character, contracts the duty and to part with them at the mandate of his customer for purposes which are inconsistent with the customer 's fiduciary character and duty," and upheld the claim of Krishnamurthi.
It is unnecessary to consider whether.
in the present case the investment was made by renewal of fixed deposit receipts after August 16, 1953 for a purpose which the Bank knew was inconsistent with Purnabai 's fiduciary character and duty.
We are not concerned in this case to decide whether the Bank could have refused to pay the amount of the renewed deposit receipts if demanded by Purnabai.
Whether the amount of deposit receipts was liable to estate duty must be determined on the true effect of section 10 of the 34 of 1953.
Section 10 of that Act provides: "Property taken under any gift, whenever made, shall be deemed to pass on the donor 's death to the extent that bona fide possession and enjoyment of it was not immediately assumed by the donee and thenceforward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise: Provided that the property shall not be deemed to pass by reason only_ that it was not, as from the date of the gift, exclusively retained as aforesaid, if by means of the surrender of the reserved benefit or otherwise, it is subsequently enjoyed to the entire exclusion of the 718 donor or of any benefit to him for at least two years before the death.
Provided . . " The phraseology of the section is somewhat involved.
The purport of the section is however clear.
The section clearly means that if in respect of any property which is gifted, bona fide possession and enjoyment is not immediately assumed by the donee and thenceforward retained by him to the entire exclusion of the donor or of any benefit to him therein the property gifted shall not be excluded from the estate subject to estate duty.
The question which must be determined therefore is whether in the present case the donee Suryakant did under the deed of gift immediately assume bona fide possession and enjoyment of the fixed deposit receipts gifted to him, and thenceforward retained the same to the entire exclusion of Purnabai or of any benefit arising to her by contract or otherwise.
The conduct of Purnabai clearly indicates that she had no intention to part with control over the property; the deposit receipts were obtained in joint names, and Purnabai had authority to withdraw the amount from the Bank, without consulting the guardian of Suryakant.
The deposit receipts were renewed on several occasions even after the execution of the deed of gift in the joint.
names of Purnabai and Suryakant.
Purnabai alone presented the fixed deposit recepits for renewal.
She could under the terms of the receipts receive the moneys to the entire exclusion of Suryakant.
We are unable to hold, in the circumstances, that bona fide possession and enjoyment of the property gifted was immediately assumed by Suryakant and thenceforward retained by him to the entire exclusion of Purnabai.
The right retained by Purnabai to have the receipts made out in her name jointly with Suryakant and the power to recover the amount from the Bank without the concurrence of Suryakant clearly indicate that she was not excluded, but she had retained important benefits in herself in the fixed deposit receipts.
It is true that the third receipt was encashed during the life time of Purnabai, and the amount was invested in the name of Suryakant alone.
But the encashment and reinvestment were within two years of the death of Purnabai and the amounts so reinvested were liable to be included in the estate of Purnabai.
The argument that fixed deposit receipts had remained exclusively in the possession of Satyanarayana as guardian of Suryakant and they were obtained by him from Purnabai for the purpose of renewal is not supported by any evidence.
There is 719 also no evidence that in obtaining the receipts in the joint names Purnabai acted as a guardian of Suryakant nor that she was a benamidar of Suryakant.
We are of the view that the High Court was right in answering the question against the appellant.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
| A complaint under section 7 read with section 16 of the Prevention of Food Adulteration Act, 1964 was filed against the respondent.
It was filed by the Municipal Prosecutor who had been authorised to file such complaints by a resolution passed by the appellant corporation under section 20 of the aforesaid Act.
On the respondent being acquitted the appellant corporation filed an application in the High Court for special leave to appeal under section 417 of the Code of Criminal Procedure.
The application was allowed.
When the appeal came up for hearing a preliminary objection was raised by the respondent that the complaint having been filed by the Municipal Prosecutor the corporation was not a 'complainant ' within the meaning of section 417(3) of the Code of Criminal Procedure and therefore special leave to appeal should not have been granted.
The High Court upheld the preliminary objection and dismissed the appeal.
By special leave the corporation appealed to this Court.
HELD : (i) Under section 476(1)(h) of the Delhi Municipal Corporation Act the person competent to institute legal proceedings is the Commissioner.
However the present case was governed not by that provision but by section 20 of the Prevention of Food Adulteration Act, 1964 which provides that a prosecution under that Act may be instituted "by the Central Government or the State Government or a local authority or a person authorised in this behalf, by general or special order by the Central Government or the State Government or a local authority".
Section 2(vii) of the Prevention of Food Adulteration Act defines a "local autho rity" to mean "in the case of a local area which is a municipality, the municipal board or municipal corporation".
The Delhi Municipal Corporation was a local authority within the meaning of section 20, [581 H; 582 C, G H; 584 A] (ii)The Municipal Prosecutor had filed the complaint against the respondent under authority given to him by the resolution of the Delhi Municipal Corporation under section 20 of the Prevention of Food Adulteration Act.
in filing the complaint the said prosecutor was not acting on his own personal behalf but was acting as an agent authorised by the Delhi Municipal Corporation to file the complaint.
It must therefore be deemed in law that the Delhi Municipal Corporation was the 'complainant ' in the case, for according to the Latin maxim.
"One who does an act through another is deemed in law to do it himself." [583 H; 584 C D] Being thus the complainant in the case the appellant Corporation could properly file the application under section 417 of the Code of Criminal Procedure.
[Case remanded to High Court for disposal according to law.] [584 E] 580 Ballavdas Agarwala vs J. C. Chakravarty, [1962] 3 S.C.R. 739 and Nazir Ahmad vs King Emperor, 63 I.A. 372 as 381, referred to.
|
ivil Appeal No. 1842 of 1981.
From the Judgment and Order dated30.4.1981 of the Delhi High Court in S.A.O. No. 418 of 1978.
Mrs. Shyamala Pappu, H.K. Puri and S.D. Lal for the Appellant.
Dr. Y.S. Chitale, S.N. Kacker, Mukul Mudgal and N.S. Das Bahl for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
This is a tenant 's appeal arising out of proceedings for her ejectment.
The respondent, as landlord of the premises let to the appellant, filed a petition for her eviction on the ground set forth in section 14(1)(h) of the Delhi Rent Control Act, 1958, that is to say, that the appellant had "acquired vacant possession of . . a residence" after the com mencement of the Act, viz, her own house D 196, Defence Colony, New Delhi and was therefore liable to hand over possession of the rented premises occupied by her to the respondent.
It was alleged that the appellant had acquired vacant possession of her house on 20 November, 1973 after the premises in suit had been let out to her on April, 1971.
The appellant denied that she was liable to ejectment.
The Assistant Rent Controller, Delhi, and the Rent Control Tribunal concurrently held that the appellant was owner of house D 196, Defence Colony, New Delhi, that on 20 November, 1973 the previous tenant had vacated the premises and handed over vacant possession and that thereafter she had sold it to one Smt.
Leela Wati 750 on 24 November, 1973.
It was observed that during the period 20 November, 1973 to 24 November, 1973 it must be taken that she was in possession of alternative accommodation.
It was also held concurrently that even though on the date the petition for eviction was filed, the house, D 196, Defence Colony, New Delhi, was no longer in the occupation of the appellant it was sufficient for the purpose of section 14(1)(h) that some time prior to the filing of the eviction petition the appellant had obtained possession of the house.
The High Court endorsed the view taken by it earlier in Hem Chand Baid vs Smt.
Prem Wati Parekh., AIR 1980 Delhi 1 and in the view that the ground for ejectment had been made out when the eviction petition was filed it dismissed the appeal.
In this appeal it is urged on behalf of the appellant that before the earlier tenant of tile appellant had vacated the house the appellant had already entered into an agree ment to sell the house to another person, and that therefore in the presence of that obligation it was not possible to say that when the house was vacated the appellant was enti tled to enter into and to continue in possession of the house.
It is contended before us that before the original tenant vacated the house there was an oral agreement between the appellant and Smt.
Leela Wati to sell the house to Smt.
Leela Wati and that the agreement was only formalized in a written document on 24 November, 1973.
It is urged that when the original tenant vacated the house on 20 November, 1973 the appellant was under a legal obligation to sell the house to Smt.
Leela Wati, and that in the circumstances, the house cannot be said to constitute alternative accommodation for the purpose of section 14(1)(h) of the Act.
The Rent Control Tribunal has found against the existence of any such oral agreement.
Upon that it would seem that it was only after obtaining possession on 20 November, 1973 from the original tenant, that is, four days later, that the appellant execut ed an agreement for sale with Smt.
Leela Wati.
It is appar ent that on 20 November, 1973 the appellant came into the house belonging to her and it was available to her for her occupation.
The circumstances that she lost possession on the date when the eviction petition was filed does not protect the appellant against section 14(1)(h) of the Act.
In the result, the appeal fails .and is dismissed but there is no order as to costs.
N.P.V. Appeal dismissed.
| The appellant filed a civil suit in the High Court for specific performance of a contract to sell the suit property by the respondents to her.
The High Court held the appellant liable to discharge the mortgage and directed her to deposit in Court a sum of Rs.3.5 lakhs with interest for the pur pose.
The appellant paid the amount direct to the mortgagee, which the High Court refused to accept as due compliance with its decree.
The appellant preferred appeals to this Court, which were disposed of on 29th November, 1979 with the direction that the appellant was to deposit within six months from the date of the order, the entire sum of Rs.3.15 lakhs together with interest.
Purporting to comply with the aforesaid order of this Court, appellant deposited a sum of Rs.2,42,822.19 on 11 April, 7980 and filed two Civil Misc.
Petitions in the High Court for a declaration that the payment was in compliance with the order of this Court and claimed as set off of the amount of Rs.5,96,687.19 paid by her earlier to the South Indian Bank, which she was entitled to recover from the respondent.
The time limit fixed for fulfilling the two conditions set out in this Court 's order dated 29th November, 1979 having fallen on 29th May, 1980 and the High Court not having passed orders on the appellant 's two CMP 's the appel lant paid into the High Court a sum of Rs.6.02 lakhs on 29th May, 1980 by cheque purporting to comply with the first condition of this Court 's order.
820 The High Court dismissed the appellant 's CMP and refused to grant the declaration that the appellant had complied with the order of this Court dated 29th November.
1979, on the ground that the appellant was bound to comply with the Original Side Rules of the High Court which prescribed the procedure to be followed in depositing money into Court particularly Order XXXI Rules 1 to 6 which aimed at securing the deposit of the money in the Reserve Bank of India to the credit of a particular proceeding, on or before the speci fied date.
In the appeal to this Court, on the question; whether payment made by the appellant on 29th May, 1980 by cheque of the amount of Rs.6.02 lakhs together with the amount depos ited earlier on 11th May, 1980 was in due compliance with this Court 's order dated 29th November, 1979.
Allowing the Appeal and setting aside the order of the High Court, this Court HELD: 1.
Payment by cheque is an ordinary incident of present day life, whether commercial or private, and unless it is specifically mentioned that payment must be in cash there is no reason why payment by cheque should not be taken to be due payment if the cheque is subsequently encashed in the ordinary course.
[823D E] In the instant case, there is nothing in the order of this Court providing that the deposit by the appellant was to be in cash.
The terms of the order dated November 29, 1979 are conclusive in this respect and it is the intent of that order which will determine whether payment by cheque within the period stipulated in that order was excluded as a mode in satisfaction of the terms of that order.
The time for payment of governed by the order of this Court.
[823E F] 2.
Payment on the cheque being honoured and encashed relates back to the date of the receipt of the cheque, and in law the date of payment is the date of delivery of the cheque.
[823F] Commissioner of Income Tax, Bombay South, Bombay vs Messrs Ogale Glass Works Ltd. Ogale Wadi, A.I.R. 1954 S.C. 429 referred to.
In the instant case, there is nothing to suggest that the cheque was not honoured in due course and that the Bank had at any time declined to honour it for want of funds in the ordinary cause.
[823G] 821 3.
The conditions set forth in the order of this Court dated 29th November, 1979 have been complied with by the appellant substantially and she is entitled to the benefit of that order.
[824C D]
|
ition (Criminal) No.668 of 1986.
(Under Article 32 of the Constitution of India).
R.K. Jain and R.P. Singh for the Petitioner.
C.V.S. Rao for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
The petitioner who was aged about 18 years along with one Subeh Singh was involved in a case of murder of one Ranbir Singh and he was convicted for an offence U s 302 34 I.P.C. and sentenced to life imprisonment by judgment and order dated 22nd May, 1980.
The petitioner being admit tedly below 21 years of age at the time of alleged commis sion offence was sent to Borstal Institution in accordance with the provisions of Punjab Borstal Act, 1926.
It has been stated that the petitioner has already undergone a period of about 6 years, 10 months and 11 days detention in jail and together with remissions earned by him it comes to over 10 years.
It has been further stated that he is entitled to be released both under the Punjab Borstal Act as well as under paragraph 5 16 B of the Punjab Jail Manual and has therefore prayed for his pre mature release as provided under the Punjab Borstal Act and also under paragraph 5 16 B of the Punjab Jail Manual.
In the counter affidavit filed on behalf of the respondent sworn by one Shri Ram Chander Sarwan, Superintendent of District Jail at Rohtak it has been stated that the petitioner was convicted and sentenced to life imprisonment U,S 30234 I.P.C. on 22.5.
1980 by the Sessions Judge, Rohtak and he was sent to District Jail, Rohtak to undergo the sentence passed upon him.
It has been further stated that at the time of conviction he was 19 years of age and as such he was sent to B.I. & J. Jail, Hissar.
He was transferred back to this Jail (Rohtak District Jail) on 16.12.
1981 for trial in IInd case (FIR No.
III,78 U/s 452/325/34 I.P.C.).
He was acquitted in this IInd case and as he was about 21 years of age so he was kept in the Jail to undergo the life imprisonment imposed upon him on 22.5.
It has 1064 been further averred that after the amendment of the Crimi nal Procedure Code the petitioner being sentenced to life imprisonment has to undergo 14 years of substantive sentence U/s 433 A of the Code before his case can be considered for pre mature release.
The detail of sentence undergone by the petitioner as on 22.12.
1986 was also given in the said affidavit wherefrom it appears that he has already undergone 7 years, 3 months and 3 days actual sentence upto 22.12.
It has therefore been stated that the petitioner having not undergone 14 years of actual sentence, he can not be released pre maturely.
It is evident from the averments made in the writ peti tion as well as in the said counter affidavit that the petitioner who was admittedly adolescent at the time of his conviction was sent to Borstal Institute at Hissar.
Subse quently, he has been transferred to the District Jail at Rohtak and is undergoing the sentence of imprisonment for life.
It appears from the objects and reasons of Punjab Borstal Act, 1926 that the object of the Act is to provide for segregation of adolescent prisoners from those of more mature age, and their subsequent training in separate insti tutions.
These Borstal Institutions are meant for detaining adolescent offenders and to impart to them such industrial training and other instructions and subject them to such disciplinary and moral influence as will conduce to their reformation.
This is evident from the provisions of section 2(1) of Punjab Borstal Act, 1926.
Sub section (2) of section 2 defines 'detained ' as detained in and 'detention ' as detention in a Borstal Institution.
Section 5 of the said Act which is very vital for the purpose of decision of this case is quoted hereinbelow: "5.
Powers of courts to pass a sentence of detention in a Borstal Institution in the case of a convict under twenty one years of age in lieu of transportation or rigorous imprison ment (1) When any male person less than twenty one years of age is convicted of an offence by a court of sessions, a Magistrate specially empowered under section 30 of the Code of Criminal Procedure, 1898, or a Judi cial Magistrate of the first class, or is ordered to give security for good behaviour and fails to give such security, and when by reason of his criminal habits or tendencies or associations with persons of bad character it is expedient in the opinion of the Judge or Magistrate, that he should be detained, such Judge or Magistrate may, in lieu of passing a sentence of transportation or rigorous impris onment, pass an order of detention for a term which shall not be less than two years and shall not exceed seven years when the order 1065 is passed by a court of sessions or a Magis trate specially empowered under Section 30 of the Code of Criminal Procedure, 1898, and shall not be less than two years nor exceed three years, when the order is passed by a Judicial ' Magistrate of the first class not so empowered.
(2) When any Judicial Magistrate not empowered to pass such order, is of opinion that an offender convicted by him is a person in respect of whom such order should be passed in accordance with the provisions of sub section (1), he may, without passing any sentence, record such opinion and submit his proceedings and forward the accused to the Chief Judicial Magistrate to whom he is subor dinate.
(3) The Chief Judicial Magistrate to whom the proceedings are so submitted may make such further enquiry (if any) as he may deem fit and pass such order for the detention of the offender or such other sentence or order, as he might have passed if the trial had been held by him from its commencement.
" Thus it is manifest from Section 5 of the said Act that either a Sessions Judge or a Magistrate of first class or a Magistrate specially empowered under Section 30 of the Code of Criminal Procedure after convicting any male person who is less than twenty one years of age, of an offence punisha ble with imprisonment for life or transportation or other rigorous imprisonment or a convict is ordered to give secu rity for good behaviour and fails to give such security, may in lieu of passing a sentence of transportation or rigorous imprisonment pass an order of detention which shall not be less than two years and shall not exceed seven years when an order is passed by a court of sessions or a Magistrate specially empowered under the Code of Criminal Procedure.
The petitioner who was adolescent admittedly being less than twenty one years of age at the time of his conviction though convicted U/s 302/34 I.P.C. and sentenced to imprisonment for life, was sent to the Borstal Institute in accordance with the provisions of Punjab Borstal Act, 1926.
On his attaining the age of about twenty one years he was trans ferred back to the Jail.
There is no provision except sec tion 20 under the said Act for transferring back an adoles cent convict on his attaining the age of twenty one years from the Borstal Institute to Jail for undergoing the unex pired term of imprisonment.
On the other hand on a plain reading of section 5 it is clear that the adolescent convict under twenty one years of age after expiry of his period of detention 1066 has to be released from detention and he is not to be trans ferred to Jail for undergoing the unexpired period of his sentence of imprisonment.
Section 20 of the said Act is in the following terms: "20.
Incorrigibles Where an inmate is report ed to the State Government by the visiting committee to be incorrigible or to be exercis ing a bad influence on the other inmates of the institution or is convicted under section 19 of this Act or is reported by the Superin tendent to have committed an offence which has been declared to be major Borstal Institution offence by rules made by the State Government in pursuance of the provisions of sub section (14) of section 34 of this Act, the State Government may commute the residue of the terms of detention to such term of imprison ment of either description not exceeding such residue as the State Government may direct, and may order the transfer of the inmate to any jail in Punjab in order to complete the said term of imprisonment.
" This section empowers the State Government to commute the residue of the term of detention of an inmate in Borstal Institute to such term of imprisonment of either description not exceeding the residue as the State Government may direct and also to order transfer of the inmate to any jail in Punjab in order to complete the said term of imprisonment when such an inmate is reported to be incorrigible or his exercising bad influence on the other inmates of the Insti tution or such an inmate has committed a major Borstal Institution offence as provided in the rules.
There is nothing to show that the petitioner was ever found to be incorrigible or to be exercising a bad influence on the other inmates of the Institution or is found to have commit ted any major Borstal Institution offence and the State Government has not passed any order for his transfer from the Borstal Institution to Jail for undergoing the residue of his term of imprisonment.
This Court while considering an identical case in the State of Andhra Pradesh vs Vallabhapuram Ravi ; has observed that "a person detained in a Borstal School under section 10 A has to be released after he has served the full term of 5 years of detention or on his completing 23 years of age.
He cannot be retransferred thereafter to prison.
Such a retransfer would defeat the very object and purpose of the Act of providing for deten tion of young offenders in Borstal School for the purpose of reformation and rehabilitation of such offenders.
" It is to be noted in this connection that 1067 sentence of detention is passed in lieu of sentence of imprisonment which may have been passed.
Hence the detention order U/s 5 of the said Act is not imprisonment and Borstal School where the adolescent offender is detained is not a prison.
It has also been observed further that "Section 433 A, Cr. PC would not operate where a person is detained by an order under Section 10 A of the Act.
Section 433 A of the Code was introduced not to set at naught provisions like 10 A of the Act which dealt with a special class of offend ers like adolescent offenders but only to regulate capri cious and arbitrary decisions under Section 432 of the Code and the remission rules sometimes reducing the sentence of imprisonment for life imposed on persons who had been con victed of capital offences but had been sentenced to impris onment for life to short periods like five to six years.
" On a conspectus of the aforesaid decision as well as on a consideration of the facts and circumstances the only conclusion follows that the petitioner who has already undergone actual imprisonment for seven years is entitled to be released from detention and from imprisonment.
Paragraph 5 16 B of the Punjab Jail Manual is not applicable in this case as the petitioner who was an adolescent convict below twenty one years of age was sent to the Borstal Institute at Hissar for detention in accordance with the provisions of Section 5 of the Punjab Borstal Act, 1926.
He being convict ed by the Sessions Judge the maximum period of detention as prescribed by the Act is seven years.
We have already said hereinbefore that such an inmate of the Borstal Institute cannot be transferred to Jail on the ground that he has attained the age of twenty one years as the said Act does not provide for the same.
The only provision for transfer to Jail is in the case of incorrigible inmate or inmates con victed of major Borstal Institution offence.
The petitioner who was ' detained in a Borstal Institute is entitled to be released and to be set free as he has already undergone detention for a period of seven years.
The Writ Petition is therefore allowed.
The respondents are directed to release the petitioner from imprisonment forthwith.
There will be no order as to costs.
S.L. Petition allowed.
| The petitioner, aged about 18 years, was convicted for an offence u/s 302/34 I.P.C. and sentenced to life imprison ment by judgment and order dated 22nd May, 1980, and being admittedly below 21 years of age at the time of commission of the offence, was sent to Borstal Institution in accord ance with the provisions of the Punjab Borstal Act, 1926.
The Petitioner filed this writ petition in this Court, stating that the total period of detention under gone by him, together with the remissions earned by him, came to over ten years, and he was entitled to be released both under the Punjab Borstal Act as well as under paragraph 516 B of the Punjab Jail Manual.
The petitioner, therefore, prayed for his premature release as provided under the Punjab Borstal Act and the paragraph 516 B of the Punjab Jail Manual.
On behalf of the respondents, a counter affidavit was filed by the Superintendent, Rohtak District Jail, where the petitioner was first sent after his conviction and sentence u/s 302/34 I.P.C., and where he was brought again from the Borstal Institute in connection with another case and was now being kept, as he had attained the age of 21 years.
Allowing the writ petition, the Court, HELD: The petitioner was sent to Borstal Institute at Hissar as he was admittedly adolescent at the time of his conviction, and was subsequently transferred to the District Jail at Rohtak to undergo the sentence of imprisonment for life.
[1064C] It appears from the objects and reasons of the Punjab Borstal Act, 1926, that the object of the Act is to provide for the segregation of the adolescent prisoners from those of more mature age, and their subsequent training in sepa rate Borstal Institutions meant for detaining the adolescent offenders and for imparting to them industrial training and 1062 subjecting them to such disciplinary and moral influence as will conduce to their reformation.
[1064C E] Under section 5 of the Act above said, either a Sessions Judge or a Magistrate of first class or a Magistrate spe cially empowered under section 30 of the Code of Criminal Procedure, after convicting any male person, less than twenty one years of age, of an offence punishable with imprisonment for life or transportation or other rigorous imprisonment, or in the case of a convict who is ordered to give security for good behaviour and he fails to give such security, may in lieu of passing a sentence of transporta tion or rigorous imprisonment pass an order of detention which shall not be less than two years and more than seven years when an order is passed by a Court of Sessions or a Magistrate.
The petitioner, when he was convicted u/s 302/34 I.P.C. and sentenced to imprisonment for life, was adoles cent being less than twenty one years of age and was sent to the Borstal Institute in accordance with the provisions of the Punjab Borstal Act, 1926.
On his attaining the age of about twenty one years, he was transferred back to the jail.
There is no provision except section 20 in the said Act for transferring back an adolescent convict on his attaining the age of twenty one years from the Borstal Institute to jail for undergoing the unexpired term of imprisonment.
On the other hand, under section 5 of the Act an adolescent convict under twenty one years of age, after the expiry of his period of detention, has to be released from detention and he is not to be transferred to jail for undergoing the unexpired period of his sentence of imprisonment.
Section 20 empowers the State Government ' to commute the residue of the term of detention of an inmate of the Borstal Institute, and also order his transfer to any jail in Punjab to complete the said term of imprisonment when such an inmate is report ed to be incorrigible or is exercising bad influence on the other inmates of the Institution or has committed a major Borstal Institution offence as provided in the rules.
There was nothing to show that the petitioner had been even found to be incorrigible or to be exercising a bad influence on the other inmates of the Institution, etc., as stated above, and the State Government had not passed any order for his transfer to the jail as mentioned above.
[1065E H; 1066A, D F] On a conspectus of the decision of this Court in the State of Andhra Pradesh vs Vallabhapuram Rani, ; , and on a consideration of the facts and circum stances of the case, the only conclusion that followed was that the petitioner, who had already undergone actual im prisonment for seven years, was entitled to be released from detention and imprisonment.
Paragraph 516 B of the Punjab Jail 1063 Manual was not applicable in this case.
The Court directed the respondents to release the petitioner from imprisonment forthwith.
[1067C D; G] State of Andhra Pradesh vs Vallabhapuram Rani, [1984]4S.C.C. 410, referred to.
|
Contempt Petition Nos.23640/91 & 263/91.
IN Special Leave Petition Nos. 11699, 11700, 11098, 11654, 10190/90 and 429 of 1988.
From the Judgment and Order dated 11.8.1989 of the Patna High Court in C.W.J.C.Nos.
1014, 1013,227,1365 ,red 1363 of 1988.
Prashant Bhushan for the Petitioner, P.D. Sharma for the Respondent.
The Judgment of the Court was delivered by A.S. ANAND, J.
Shorn of details the circumstances giving rise to the filing of these petitions seeking certain direc tions and initiation of contempt proceedings against the respondents are as follows: The petitioners were at the relevant time working as primary school teachers in the State of Bihar.
Services of some of the teachers were terminated.
The orders of termina tion were ' questioned before the High Court of Patna and a Division Bench of that Court vide judgment dated 11.8.1989 accepted the position that the services of the teachers had been terminated on account of improper and illegal recruit ment by the State.
The High Court was, however, of the opinion that the petitioners were not in any way responsible for the improper recruitment.
The Division Bench 418 gave a direction to the State to screen appropriately the cases of the petitioners and to recruit those who satisfy the requirements.
The Division Bench noticed as follows: "On the facts of this case, we observe that persons who are qualified for appointments deserve a consideration and appointment, accordingly on such posts for which they are qualified in preference to other candidates who may be qualified.
We, accordingly, direct the respondents to proceed to take up the appointments of the teachers in the Elementary Schools of Santhal Pargana and Deoghar by inviting applications from the petitioners and other persons who have been removed because they were illegally recruited by the District Superintendent of education and selected if they satisfy the eligibility conditions and appoint them.
In doing so the Respondent State must relax the age limit in case of any of the petitioners found to have become over age during the period of service on stipend and removal.
The petitioners and/or any other candidate who may be appointed in the vacancy so created on account of removal of the peti tioners and other persons appointed by the District Superintendent of Education shall however not claim any benefit of the appoint ment illegally given to them by the District Superintendent of Education but shall receive emoluments and other benefits by dint of their selection and appointment in accordance with law.
" The Court also found that the orders served on the petitioners were violative of principles of natural justice.
However, the Court did not quash the orders of termination but directed that in future selections, preference would be given to the petitioners.
The petitioners filed special leave petitions seeking quashing of the termination orders.
In the special leave petitions certain directions came to be issued by this Court on 7.2.1991.
The State of Bihar was directed that it should carry out the selection process for the retention of the services of those teachers who were qualified at the time of their appointment and that such of the teachers who were found qualified were to be taken back in the employment and were to be given full benefit of continued service irrespective of any break in service on account of the termination of the services.
This court also noticed that the direction of the High Court to the State to hold fresh selections and the methodology to be adopted therefor had become final against the State in as much as the State had not called in question the order of the Divi sion Bench and those directions of the 419 High Court did not require interference.
The Court gave three months to the State for completion of the selection process in accordance with the directions of the High Court.
The outside limit during which the process was required to be completed was fixed as 30th June, 1991.
The Court ob served: "In considering the suitability for selection the Rules which were in force at the time the Teachers were recruited should be taken into account and disqualification shall not be imposed on the basis of any altered Rule.
It will also be open to the State to consider the claim of Teachers who came after the altered Rules in terms of the Rules in force.
The bar of age, we reiterate the direction of the High Court, shall not be used against the Teachers for their selection.
Those of the Teachers who have served in the past but there has been a break in service on account of termination shall have the credit of past service both in regard to the payment of salary as also seniority and other service benefits.
" It transpires that consequent upon the order of this Court dated 7.2.1991, the Commissioner cum Secretary, Human Resources Department, Government of Bihar, made an order on 28.6.1991 determining the categories out of the dismissed teachers, who were eligible for reappointment.
The Commis sioner took the view that under the executive directions/regulations only trained teachers were eligible for appointment in both the categories while the untrained teachers, in exceptional circumstances, could be appointed against the reserved categories of Scheduled Castes, Sched uled Tribes, Urdu and Sanskrit only.
In other words, the Commissioner concluded that those untrained teachers who did not belong to any of the aforesaid four categories but belonged to the general category were not eligible for appointment.
Thus, out of the untrained dismissed teachers numbering about two thousand, only about eighty one teach ers, it is alleged, were found to be qualified and their services were retained.
The petitioners allege that the order of the Commissioner is completely contrary to the executive directions and is also in clear contravention of the order of this Court dated 7.2.1991.
Shri Shanti Bhushan, learned Senior Advocate, appearing for the petitioners submitted that the Commissioner had given a completely wrong interpretation to the executive directions/regulations relating to the appointment of pri mary and middle school teachers in the State of Bihar and had deliberately contravened the orders of this Court dated 7.2.1991.
420 Shri B.B. Singh, learned counsel appearing for the State of Bihar, in reply submitted that there had been no contra vention of the order of this Court dated 7.2.1991 and that the Commissioner had placed a correct interpretation on the executive directions/regulations and had construed the judgment of this Court in the light of that interpretation and, therefore, he had committed no contempt.
Learned coun sel submitted that the interpretation placed by the Commis sioner deserved acceptance.
We have gone through the executive directions/regula tions issued in the form of office letters/orders etc.
concerning the working of The Bihar Non Government Primary School (Taking over of control) Ordinance 1976 and, in particular, the directions relating to the "preparation of waitinglist and appointment of teachers" (para 1) and "the qualifications of candidate for appointment and waiting list" (para 2).
The directions, inter alia, provide that while appointing the teachers I.Sc.
trained will be appoint ed on the basis of I.Sc.
trained and only matric with science trained will be appointed on the basis of matric trained.
Where candidates of the aforesaid qualifications are not available in required number, the candidates having qualifications more than those stated above may also be appointed.
The names of the candidates, in each category, will be written yearwise in the following manner: ". first of all matric trained, then I.A, 1.
trained and thereafter graduate trained, on the basis of marks obtained in educational and training courses and their appointments will be made accordingly.
" Sub clause (d) of Para 2, however, provides: "After the names of trained candidates the names of untrained candidates, of each catego ry will be written in sequence of marks ob tained and qualification." Sub Clause (f) of Para 2 reads thus: "Untrained candidates of different educational qualification may be appointed in reserved category under special circumstances when trained candidates are not available." Sub Clause (1) of Para 2 reads as follows: "Untrained candidates having the qualification of matric or more than it may be appointed in the preliminary pay scale Matric untrained (Middle Trained)." 421 A conjoint reading of the executive orders/directions shows that the untrained candidates are also capable of being appointed in each category but only when the trained teachers are not available in the particular category.
The trained teachers in the order of sequence would indeed get preference over the untrained teachers.
The interpretation placed by the Commissioner, there fore, is not correct and if that interpretation is accepted it would efface the very effect of the order of this Court dated 7.2.1991 and defeat the object of that order which was aimed at providing that all the schools must have teachers.
The Court had taken note of the situation that there was an acute shortage of teachers in primary schools of Santhal Parganas of Bihar due to which most of the schools had been closed down and therefore to tide over the situation the directions extracted above, were given.
The Court had reit erated the directions of the High Court that while making fresh selections the bar of age should not be used against the teachers.
The order of the Court applied to untrained teachers for all the categories also.
The Commissioner has made an order which, in our opinion, is not in conformity with the directions given by this Court and the Division Bench of the High Court.
The directions of the Court, in the peculiar facts and circumstances of the case arising out of closure of a number of schools for want of teachers, provid ed inter alia that even the untrained teachers were entitled to be selected and appointed not only in the reserved cate gories but also in the other categories, provided trained teachers are not available and the untrained teachers are otherwise qualified, without putting the bar of age against them.
From the material on record and after hearing learned counsel for the parties, we are not satisfied that it is a case in which it can conclusively be said that the respond ents have wilfully or deliberately or contemptuously flouted or disobeyed the orders of this Court dated 7.2.1991.
It appears to us to be a case of misinterpretation of the executive directions and order of this Court dated 7.2.1991 and is, therefore, not a fit case in which contempt proceed ings need to proceed any further.
We, accordingly, drop the contempt proceedings and discharge the Rule issued against the respondents.
Since the Court has found entitlement of the untrained teachers in all the categories to appointment provided they are otherwise qualified and trained teachers are not avail able, we direct the respondents to properly comply with the orders of this Court dated 7.2.1991 and select and appoint untrained teachers who are otherwise qualified for appoint ment in all categories without putting the condition of training or age bar against 422 them where trained teachers are not available.
The State must conclude the process of fresh selection in the light of the observations made in this order expeditiously and, in any case.
not later than three months from today.
The petitions are disposed of accordingly.
R.P. Petitions dis posed of.
| The Bihar Non Government Primary School (Taking over of Control) Ordinance, 1976 provided by Para 1 and Para 2 that while appointing teachers, I.Sc. trained will be appointed on the basis of I. Sc trained and only Matric with Science trained will be appointed on the basis of Matric trained, and where such candidates were not available the candidates having qualifications more than these would also be appoint ed.
The petitioners were untrained primary school teachers in the State of Bihar.
Later on their services were termi nated.
They filed writ petitions before the High Court which held that their services had been terminated because of improper and illegal recruitment by the State for which they were not responsible, and that the termination orders were violative of principle of natural justice, but did not quash the orders of termination, and directed the State Government to recruit those dismissed teachers who satisfied the re quirements, and to relax the age limit in case of those who meanwhile became overage.
On the special leave petitions filed by the petitioners this Court by its order dated 7.2.1991, directed the State Government to carry out the selection process to take back in the employment the teachers who were found qualified under the Rules in force at the time of 416 their initial appointment, and to give them full benefit of continued service irrespective of any break in service on account of the termination.
In the special circumstances of the case arising out of closure of a number of schools for want of teachers, the Court held that in the event of non availability of trained candidates even untrained candidates could be appointed, and gave time till 30.6.1991 to complete the selection process in accordance with the directions of the High Court.
Consequent there to the Commissioner cum Secretary, Human Resources Department, Government of Bihar made an order determining eligible categories for reappointment out of the dismissed teachers and hold that under the executive directions/regulations only trained teachers were eligible for appointment while untrained teachers, in exceptional circumstance could be appointed against the reserved catego ries of Scheduled Castes, Scheduled Tribes, Urdu and San skrit only, and held that those untrained teachers who did not belong to any of these categories were not eligible for appointment.
The petitioners filed contempt petitions contending that the Commissioner gave a completely wrong interpretation to the relevant executive directions/regulations and had delib erately contravened this Court 's order dated 7.2.1991.
On behalf of the respondents it was contended that the Commis sioner had correctly interpreted the executive orders/regu lations and did not contravenes this court 's order and, therefore, he committed no contempt.
Disposing of the contempt petitions, this Court, HELD: 1.
(1) The directions of the Court provided that even the untrained teachers were entitled to be selected and appointed not only in the reserved categories but also in the other categories, provided trained teachers were not available and the untrained teachers were otherwise quali fied without putting the bar of age against them.
[p.421D E] 1.2 The interpretation placed by the Commissioner, was not correct and if that interpretation be accepted, it would efface the very effect of the order of this Court dated 7.2.1991 and defeat the object of that order which was aimed at providing that all the schools must have teachers.
The Commissioner 's order was not in cOnformity with the direc tions given by this Court and the High Court.
[p. 421 B D] 417 2.
It appears to be a case of misinterpretation of the executive directions and order of this Court dated 7.2.1991 and was, therefore, not a fit case in which contempt pro ceedings need to proceed any further.
It could not conclu sively be said that the respondents wilfully or deliberate ly or contemptuously flouted or disobeyed the orders of this Court dated 7.2.1991.
[p 421 E F] 3.
The respondents should properly comply with the orders of this Court dated 7.2.1991 and select and appoint untrained teachers who are otherwise qualified for appoint ment in all categories without putting the condition of training or age bar against them where trained teachers are not available.
The process of fresh selection must be con cluded expeditiously and, in any case, not later than three months from the date of the order.
[pp 421 G H; 422 A]
|
minal Appeal No. 183 of 1967.
Appeal by special leave from the judgment and order dated August 9, 1967 of the Patna High Court in Criminal Writ Jurisdiction Case No. 31 of 1967.
M. C. Setalvad, R. L. Kohli and J. C. Talwar, for the appellant.
B.P. Jha, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, J.
The appellant (Rameshwar Lal Patwari) applied under article 226 of the Constitution and section 491 of the Code of Criminal Procedure for a writ or order in the nature of habeas corpus for his release from detention in Bhagalpur Central Jail in pursuance of an order of detention passed by the Governor of Bihar on July 4, 1967 under section 3(1)(a)(iii) of the .
He was arrested under the order on July 11, 1967 and was served on July 13, 1967 with a copy of the grounds on which his detention was based to enable him to make a representation.
He made a representation but his release was not recommended.
His application in the High Court was also dismissed.
He now appeals by special leave.
The order of the Governor recites that it is necessary to make an order for his detention to prevent him from acting in any manner prejudicial to the maintenance of supplies and services essential to the community.
The grounds which were furnished to him were as follows : (1) He is a prominent businessman of Dumka and with the association of Sarvashri Mulchand Choudhury, Kanhaiaya Choudhury, Fulchand Modi, Pir Mohammad (Bengaria P.S.) Shikaripara and others he indulges in black marketing of foodgrains.
He has four trucks, one jeep and a car which have been registered in the names of his relatives Truck No. BRL 1331 which is registered in the name of his brother in law (sala).
Sri Harichandra Agarwala was caught on 29th December, 1966 at Ranibabal near Mashanjor while carrying 95 bags of peddy for illegal trade.
In this connection a case under the Essential Commodities Act has been instituted.
He is on bail in this case.
(2) His trucks always take to wicked routes to Saithia (West Bengal) and he himself pilots them.
(3) A businessman of Barahiya disclosed that he (Rameshwar Lal Patwari) visited Barahaiya on several occasions and purchased gram, gramdal under various names and smuggled them to West Bengal.
507 (4) On the night of 2 2 66, Sri R. section Singh, 1st Class Magistrate along with Sub Divisional Officer Sadar, other Magistrate and police officers, raided the house of Sri Rameshwar Lal Patwari and found aft kinds of foodgrains in huge quantity.
His stock register was maintained in irregular way.
fie could not produce the sale register and took the plea that it was produced before the Income Tax Officer.
It was found that he has been dealing in foodgrains without any licence.
A case has been instituted in this connection in which he is on bail.
(5) Shri Babu Ram Bikaneria, owner of a Rice Mill at Saitha District Birbhum (West Bengal) visited Dumka on 26 11 66 and told him (Sri Rameshwar Lal Patwari) to supply gram and gramdal.
He (Sri Rameshwar Lal Patwari) promised to supply gram and gramdal.
On 7/8 12 66 Sri Mulchand Choudhury of Rameshwar, who is his agent sent his truck No. BRJ 2029 load ed with gram and gramdal to Saitha through Mahesh Kola Check post.
His truck No. BRL 1366 and van BRL 2005 were found at Rameshwar on 7 12 1966 wherefrom he smuggles foodgrains to West Bengal.
He purchases gram and gramdal through Gopal Mandal of Lakhisarai (District Monghyr) and smuggles them to West Bengal.
In the circumstances, the State Government are satisfied that if Shree Rameshwar Lal Patwari is allowed to remain at large, he, will indulge in activities prejudicial to the maintenance of supplies and services essential to the community.
For prevention of such activities, the State Government consider his detention necessary.
Shri Rameshwar Lal Patwari is informed that he may make a representation in writing against the order under which he is detained.
His representation, if any, may be addressed to the Under Secretary to Government, Poli tical (Special) Department, Bihar, Patna and for warded through the Superintendent of the Jail as soon as possible.
By order of the Governor of Bihar.
" These grounds were challenged by the appellant in the High Court.
According to him some of them did not exist in fact and others were vague or irrelevant.
The High Court scrutinised them and came to the conclusion that his complaint had no substance.
In this appeal he urges the same contentions and submits that the High Court was in error in its conclusion.
508 Before we consider these grounds in the light of arguments before us, we may say a few words about the and the extent to which the exercise of powers under that Act can be questioned before courts.
Article 22(1) and (2) of the Constitution lay down that no person who is arrested shall be detained in custody without being informed of the grounds for such arrest, nor shall he be denied the right to consult and to be defended by, a legal practitioner of his choice and further that the person arrested and detained in custody shall be produced before the nearest Magistrate within a period of twenty four hours and no person shall be detained beyond that period (excluding the time necessary for the journey to the court of the Magistrate) without the authority of the Magistrate.
To this there is an exception in sub cl.
(b) of cl.
(3) of the article.
It says that these provisions shall not apply to any person who is arrested or detained under any law providing for preventive detention.
There are, however, other safeguards.
Clause (4) of the article provides that no law providing for preventive detention shall authorise the ,detention of a person for a longer period than three months unless an Advisory Board has reported before the expiration of that period of three months that there is in its opinion sufficient cause for such detention.
There are other provisions prescribing other checks with which we are not presently concerned.
In pursuance of this power Parliament has enacted the .
The by its third section enables 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 manner prejudicial to the maintenance of supplies and services essential to the community, to make an order that such person be detained.
There are other grounds on which the power to detain may also be exercised but they do not apply here.
This power is also conferred on some officers named in the section.
When an officer makes an order he has to report to the State Government together with the grounds on which the order is based and in the like manner the State Government has to report to the Central Government.
Section 11 then provides that where an Advisory Board reports sufficient cause for the detention of a person, Government may confirm the detention and continue it for such period as it thinks fit.
If the Advisory Board reports that there is no sufficient cause Government must revoke the order and release the detenu.
Section 11 A pow prescribes the maximum period of detention.
It will thus be seen that the report of the Advisory Board plays ,in important part.
In the present case the report of the Advisory Board has been produced.
It reads "In our opinion, the grounds of detention served on the detenu also are fairly particular and generally well 509 founded.
It cannot, therefore, be said that there is no material for his detention in the way in which he had been indulging in the transport of foodgrains from Bihar to West Bengal frequently.
It cannot be held that the order of detention passed upon him is unreasonable.
The order in his case also cannot be disturbed.
Sd/ section C. Mishra 25 8 67.
Sd/ R. K. Choudhury.
Sd/ U. N. Sinha.
" The appellant contends that the Advisory Board has failed to notice also that the grounds furnished to him were vague and irrelevant and some of them did not exist in law.
Now the law on the subject of, Preventive, Detention has been stated over and over again and it is not necessary to refer to all that has been decided by this Court on numerous occasions.
We ,shall refer to what concerns this case.
The formation of the opinion about detention rests with the Government or the officer authorised.
Their satisfaction is all that the law speaks of and the courts are not constituted an appellate authority.
Thus the sufficiency of the rounds cannot be agitated before the court.
However, the detention of a person without a trial, merely on the subjective satisfaction of an authority however high, is a serious matter.
It must require the closest scrutiny of the material on which the decision is formed, leaving no room for errors or at least avoidable errors.
The very reason that the courts do not consider the reasonableness of the opinion formed or the sufficiency of the material on which it is based, indicates the need for the greatest circumspection on the part of those who wield this power over others.
Since the detenu is not placed before a Magistrate and has only a right of being supplied the grounds of detention with a view to his making a representation to the Advisory Board, the grounds must not be vague or indefinite and must afford a real opportunity to make a representation against the detention.
Similarly, if a vital ground is shown to be non existing so that it could not have and ought not to have played a part in the material for consideration, the court may attach some importance to this fact.
Thus it was in Shibban Lal Saksena vs U.P. (1) that when Government itself confirmed the order on one ground rejecting the other, the order was held unsustainable.
This Court applied the case of the Federal Court in Keshav Talpade vs The King Emperor(2) and held that the detention on the ground which survived could not be .allowed to stand.
The following observations may be quoted .
The detaining authority gave here two grounds for detaining the petitioner.
We can neither decide whether these grounds are good or bad, nor can we attempt (1) (1954] 1 S.C.R. 418.
(2) 510 to assess in what manner and to what extent each of these grounds operated on the mind of the appropriate authority and contributed to the creation of the satisfaction on the basis of which the detention order was made.
To say that the other ground, which still remains, is quite sufficient to sustain the order, would be to substitute an objective judicial test for the subjective decision of the executive authority which is against the legislative policy underlying the statute.
In such cases, we think, the position would be the same as if one of these, two grounds was irrelevant for the purpose of the Act or was wholly illusory and this would vitiate the detention order as a whole.
" This case is strongly relied upon by Mr. Setalvad for reasons which will soon appear.
The other side relies upon observations in Bhim Sen vs State of Punjab(1) where blackmarketing was considered a sufficient ground for detention.
No doubt blackmarketing has at its base a shortening of supplies because blackmarket flourishes best when the availability of commodities is rendered difficult.
It has a definite tendency to disrupt supplies when scarcity exists or scarcity is created artificially by hoarding to attain illegitimate profits.
Indulging in blackmarketing is conduct which is prejudicial to the maintenance of supplies.
It is hardly necessary to read supplies conjunctively with services as was contended although cases may exist where supplies and services may both be affected.
The word 'and ' is not used conjunctively but disjunctively.
If sweepers strike, no question of disrupting supplies arises but ser vices essential to the life of the community will certainly be disrupted.
Looked at from this angle, can we say that the detenu was supplied grounds which were not vague or indefinite or irrelevant or non existing '? The grounds are five in number.
Putting aside the first and fifth rounds for the time, we may refer to the second, third and fourth grounds first.
The second ground says that "his trucks always take to wicked routes to Saithia (West Bengal) and he himself pilots them." This ground is extremely vague.
It does not mention a single instance of a truck taking a particular route so that the detenu could prove to the satisfaction of the Advisory Board that the statement was false.
Bhim Sen 's case the conduct of the black marketer was shown in an appendix.
Here no particulars are furnished and beyond denying the allegation, the detenu cannot make effective representation.
The details could not be such as were required to be concealed in the public interest under section 7(2) of the Act.
The third ground that "a businessman of Barahiya disclosed that he (Rameshwarlal Patwari) visited Barahiya on several occasions and purchased gram, gramdal under various (1) ; 511 names and smuggled them to West Bengal" is equally vague.
Learned counsel for the State admitted that some details were necessary to give the detenu an opportunity.
It is obvious that without the names of shops, dates of purchase, etc.
it is next to impossible to controvert such an allegation.
The fourth ground speaks of a pending case in which the appellant is said to be on bail.
The grounds were furnished in July 1967.
The appellant was tried for the offence and acquitted as far back as February 1967.
This ground discloses carelessness which is extremely disturbing.
That the detaining authority does not know that the appellant was tried and acquitted months before, and considers the pendency of the case against him as one of the grounds of detention shows that due care and attention is not being paid to such serious matters as detention without trial.
If the appellant was tried and acquitted, Government was required to study the judgment of acquittal to discover whether all these allegations had any basis in fact or not.
One can understand the use of the case if the acquittal was technical but not when the case was held to be false.
In any event, even if there was no need to consider the result of the case the case could not be referred to as a pending case.
What is still more disquieting is the attempt to avoid admitting frankly that there has been a mistake in including this ground.
in the return this is what is said : "That the facts stated in paragraph 4 of the ground of detention are not non est.
Those facts stated in paragraph 4 even existed after acquittal.
In regard to the facts stated in paragraph 4 the prosecution failed to prove the prosecution case and, therefore, he was acquitted.
The detenu had full knowledge of the facts that he was acquitted by the Court in regard to the facts stated in paragraph 4 of the grounds of detention and, therefore, he was not handicapped in making a representation to the Advisory Board.
" This means that anything wrong or even false may be stated in the grounds leaving the detenu to deny it and prove his version.
The attempt to cover up the mistake is as futile as it is disingenuous.
This leaves over the first and fifth grounds ' The first charges the appellant with blackmarketing of foodgrains in conjunction with certain named persons.
No facts are mentioned and this part of the ground is equally vague.
No incident is cited except one.
The ground goes on to say that his trucks, jeep and car Ire registered in the names of his relatives.
One such truck is mentioned, namely, truck No. BRL 1331.
It is said to be registered in the name of his brother in law and it is further stated that it was 512 caught on December 29, 1966 at Ranibahal (near Mashanjor) while carrying 95 bags of paddy for 'illegal trade ' and that in this connection a case under the Essential Commodities Act has been instituted against 'him '.
It is hot clear who is meant the appellant or his brother in law.
In a notice from the District Supply Officer, Dumka it was stated : "It was learnt from your driver that on 29 11 66 (sic) at 3.50 a.m., ninety five bags of paddy (190 mds.) was coming from Ranibahal to Dumka in your truck BRL 1331 belonged to you.
" The appellant has denied that the paddy belonged to him.
He pointed out that in the notice it was admitted that the paddy was being taken to Dumka in Bihar, while in the grounds it was stated that it was on its way to West Bengal and that carrying of goods from Ranibahal to Dumka (both in Bihar) was no offence.
In his reply to the District Supply Officer the appellant had stated : "1.
I am a retail dealer in food grains holding foodgrain License No. 204 of 1966.
The truck bearing No. BRL 1331 does not belong to me.
The said 95 bags of paddy loaded on the said truck No. BRL 1331 does not belong to me.
The fact is that the said 95 bags of paddy belong to Shri Prahlad Rai Giluka of village Banskuli, P. section Ranishwar who is a cultivator which he had agreed to sell to me on condition that the delivery of the said paddy will be made to me at Dumka.
I therefore, request that the cause shown above be accepted and the proceedings, if any, may kindly be dropped.
" It appears that Prahlad Rai Giluka of Mouza Banskuli, P. section Ranishwar confirmed this before the District Supply Officer by stating as follows : "1.
That your petitioner is a cultivator and owns more than 100 bighas of Dhani lands at Mouza Murgani Ranibahal and Kumnirdaha and other villages which are contiguous villages.
That the petitioner 's son Prabhudayal Giluka is to start a business and as such there was necessary (sic) of fund and the petitioner proposed to sell 95 bags of paddy to one Rameshwar Lal Patwari of Dumka from his Murgani and Ranibahal land.
513 4.
That it was agreed that the paddy will be delivered at Dumka where the price will be paid.
That the petitioner accordingly engaged the truck of one Haris Chandar Agarwala, his BRL 1331 and asked his Munshi Mahadev Pal to load 95 bags of paddy in the truck.
That when the paddy in question was in the process of loading at Ranibahal the paddy was seized by the District Supply Officer on 29 12 66. 8. 9. 10.
That the paddy in question is not involved in any offence the same should be released forthwith.
" When these documents came to be filed, the return of the State Government made the following reply and avoided the issue: "4 It appears that the notice was issued on the statement of the driver of the truck who stated that he was bringing 95 bags of paddy from Ranibahal to Dumka in the truck belonging to the appellant.
The statement of the driver clearly shows that the truck belonged to the appellant.
The driver did not ' tell anything about the facts stated in annexure 'D ' to special leave paper book (Page 49 to 51).
" This shows that there was no inquiry at all.
The alleged statement of the driver was accepted and it was assumed that the paddy was being taken to West Bengal.
At least the explanation of the persons concerned could have been obtained.
This is clearly a case of jumping to a conclusion which is being lamely justified, when it is questioned with written record.
In these circumstances there is much reason to think that this ground probably did not exist although we are not in a position to say that it is non existing.
The fifth ground mentions that one Babu Ram Bikanaria wanted gram and gramdal at his Rice Mill at Saitha District Birbhum (West Bengal) and visiting Dumka contacted the appellant.
The latter promised to supply gram and gramdal.
On 7/8 December 1966 one Mulchand Choudhury sent truck No. BRJ 2029 loaded with gram and gramdal to Saitha through Mahesh Kola checkpost.
Further Mulchand 's truck No. BRL 1366 and van BRL 2005 were found at Raneshwar on December 7, 1966 from where 'he ' smuggles foodgrains to West Bengal. 'He ' pur chases ram and gramdal through Gopal Mandal of Lakhisarai (Dist.
Monghyr) and smuggles them to West Bengal.
It is again Sup.
C1/68 2 514 not clear who this 'he ' is.
The appellant has denied that he does in gram and gramdal and has any connection with Gopal Mandal of Lakhisarai or knows him.
He has denied all contact with such persons.
No reply to this was given in the return filed in this Court.
It appears that there may be suspicion that the appellant may be connected with some blackmarketing.
We are not concerned with the sufficiency or the reasonableness of the grounds.
In this case at least two grounds are vague, one ground is found to be false and of the remaining in one there is no explanation and in the other there is a lame excuse that the driver of the truck did not furnish the full information.
The case is thus covered by our rulings that where some grounds are found to be non existing or are cancelled or given up, the detention cannot be justified.
It is further covered by our decisions that if the grounds are not sufficiently precise and do not furnish details for the purpose of making effective representation the detention can be questioned.
This case displays both these defects and it is a matter of great regret that powers of detention without a trial, which should be ,exercised with the greatest care and attention have been exercised in this case with such disregard for truth and accuracy.
We accordingly allow the appeal and hold the detention of the appellant to be illegal and order his release.
G.C. Appeal allowed.
| The workmen of the respondent company raised an industrial dispute about bonus claimed by them for the year 1960 61.
The Industrial Tribunal applying the Full Bench Formula held that the sum needed for rehabilitation of machinery exceeded the surplus otherwise available and therefore no bonus was payable.
Against this decision of the Tribunal the workmen appealed to this Court and raised various objections as to the manner in which the available surplus was calculated by the Tribunal.
HELD: (i) On the facts and the evidence produced in the case the life of the respondent company 's machinery should be taken at an average of 15 years if the machinery is worked in two shifts.
and 10 years if it is worked in three shifts.
The artificial rule laid down in the Income tax Act for calculation of notional depreciation can provide no criterion at all for determining the life of the machinery, and the Tribunal committed an error in proceeding on that basis.
[319 H] The life of machinery taken in other cases is also not a correct basis for fixing the life of machinery in a particular case.
Various factory come in that affect the useful life of a machinery.
Factors such as the quality of the material used in the machines, and the nature of the material on which the machines are to operate, very materially affect their life.
Further the life of a machine will also depend on the manner in which it is handled in a particular factory.
Consequently the correct principle is to determine the life of machinery in each case on the evidence adduced by the parties.
[319 E F; 320 D] Further what has to be determined is the useful life of the machinery rather than its economic life.
In fact one of the very major considerations which should be taken into account is the actual practice of the manufacturers using the machinery and, if the evidence be available, to find out how long the manufacturers continue to use the machinery as a rule.
[324 D H] The fact that in the Full Bench Formula the breakdown value of machinery is taken at 5% is certainly an aspect to be taken into account.
but it cannot be accepted that a machinery should be deemed to have useful life until it reaches the stage of having a breakdown value of 5% No such absolute rule can be inferred.
[328 A] The Tribunal was wrong in not taking into account machinery installed during the bonus year itself for making provision for rehabilitation.
If any machinery is installed in.
the bonus year, the company would be 312 justified in claiming that it must immediately Start making provision for its rehabilitation, though the period for rehabilitation of that machinery would only start at the end of the bonus year.
[330 A C] ' (ii) The multipliers given by the company in the schedule originally submitted by the company which were not objected to by the workers were the correct basis for Calculation of the rehabilitation cost and the Tribunal should not have departed from them.
There was no justification for taking an average of the multipliers submitted at first and those submitted thereafter in a second schedule.
The Tribunal also was not justified in reducing the multipliers on the ground that the new machines which would be purchased to replace the original ones would necessarily have more ' productive capacity.
There was no material at all from which the Tribunal could justifiably have inferred that the increase in production would be so.
material as to, attract the principle of apportionment laid down by this Court in the case of the Associated Cement Companies Ltd. 1331 A F; 332 (iii) In calculating the rehabilitation requirement for the machinery the depreciation provision made in accordance with the principles of commercial accounting has to be deducted from the amount that would be required to purchase the new machinery for replacement.
The contention that deduction should be made only of depreciation reserves available to the employer cannot be accepted.
SUch an interpretation militates against the very purpose for which rehabilitation provision is allowed, namely, to enable the industry to cover the difference between the amount of depreciation which is recouped by making provision for it in accoromance with the, principles of commercial accounting and the amount that would be required to purchase the new machinery for replacement.
Therefore, in the present case, the Tribunal erred when in calculating the provision for rehabilitation it took the entire price of the replacement machinery as required to be provided, entirely out of profits without reducing the price to the extent of the depreciation provided for in the accounts.
[333 E 334 B F] (iv) The claim of the workmen that the sum shown in the balance sheet of the company as development rebate reserve should be deducted from the available surplus must be allowed.
The mere statement of the General Manager on affidavit to.
the effect that the reserves had been utilised as part of the working capital could not be aceepted as evidence of the fact.
When the balance sheet itself showed that cash amounts in the form of fixed deposits were available which were far in excess of the development rebate reserve in question, there would be No. justification for holding that this development.
rebate reserve was not available as a liquid asset and had been included by the company in the working capital.
This development rebate reserve was a liquid asset available for rehabilitation and consequently liable to be deducted when calculating the rehabilitation requirement.
[335 A G] (v) If some.
machines have fully run out their lives, they must necessarily be replaced out of resources available immediately and there would be no justification for keeping the available resources in reserve for future rehabilitation while not providing out of those available resources for immediate.
replacement of machinery.
There is also the aspect that an employer in order to claim more and, more rehabilitation provision will have a tendency to keep old blocks of machinery running and to avoid adoption of such a device it would be fair that he is required to utilise available resources at the very first opportunity when the old blocks of machinery require replacement and claim annual provision for future only in respect of that machinery which will require replacement later 313 on.
Consequently, in the present case the depreciation provision and the available development rebate reserve must be taken into account when calculating the annual provision for rehabilitation required for replacement of the earliest installed machinery until it was exhausted, whereafter 'the annual requirement for the remaining blocks of machinery would have to be calculated, ignoring these available resources.
[336 G H; 337 C D] (vi) For the purpose of working 'out return on working capital in the year of bonus the origin of the fund used as working capital is immaterial and it cannot be said that the return must be allowed only on reserves used as working capital and not on any other funds used as such.
However the fund must be available for investment before a claim can be made by the employer for a return on it.
[340 E F] But, the mere existence of reserves and funds at the beginning of the year, even taken together with their existence at the end of the year cannot lead to any inference that these reserves and funds must have formed part of the working capital during the year and could not form part of other items such as fixed deposits, investments etc.
The affidavit filed by the company in this connection did not exclude the possibility that they were utilised for purposes other than that of working capital.
in the balance sheet the amounts which represented fixed assets, fixed deposits, investments and other loans and.
advances could not be classified as part of the working capital.
The items representing working capital were current assets, stock in trade, sundry debts, bank and cash.
balances, certain loans and advances and insurance and other claims.
The items representing working capital had a total value of Rs. 498.02 lacs.
Deducting from this the sum of Rs. 377.34 lacs available from subscribed capital or other sources.
there remained a balance of Rs. 120.68 lacs which must have necessarily come out of the various reserves including the depreciation, and this amount at least must be held to represent resources actually used as working capital during the year by the company.
On this amount it would be fair to allow a 4% return to the company.
[344 F H; 347 D E] (vii) The company 's claim that half the amount from the following sources, namely, (1) the profit in the profit and loss account worked out at the end of the year, (2) depreciation reserve for the year, (3) development rebate for the year, (4) value of discarded fixed.
assets written off should be treated as 'a fund which was available during the bonus year for being available for being utilised as working capital, could not be accepted.
There was nothing to show whether any of these amounts became available to the company during the year and if so when they came available.
[347 F] (viii) In allowing 6% return on paid up capital in accordance with the Full Bench Formula no question could arise of deducting the amounts invested in subsidiary companies from the paid up capital because the said investment had not been held to have come out of paid up capital [348 [348 F] (ix) The income of the company from interest on fixed deposits was its extraneous income which accrued to the company without any contribution by the workmen.
this income had therefore to be excluded in calculating the available surplus.
At the same time the company could not on equitable grounds be permitted to claim the interest paid by it on its borrowings as business expenditure.
Therefore the interest on fixed deposits was to be treated as extraneous income only after deducting from it the interest paid on the borrowings.
[349 D F] 314 (x) The income received by the company from its foreign collaborators as commission on sales effected by the said collaborators of their own cars in India was extraneous income to which the company 's wOrkmen made no contribution.
It was not therefore to be taken into account in calculating the available surplus.
[349 C] (xi) Calculated in the above manner the available surplus came 10 Rs. 30.56 lacs.
The Tribunal was not right in its decision that the company was not in a position to pay bonus at all.
However, though the company had earned a large amount of profit in the year of bonus it had for quite a large number of years been running at a loss.
The available surplus being only Rs. 30.56 lacs, the workmen 's demand of bonus equivalent to six months ' wages amounting to Rs. 24 lacs was too high.
It would be just and proper to allow bonus at 20% of their annual wages which would come to Rs. 8.60 lacs.
[352 A E] Associated Cement Companies Ltd. Dwarka Cement Works, Dwarka vs Its Workmen & Anr. , Saxby & Farmer Mazdoor Union, Calcutta vs M/s. Saxby & Farmer (India) Ltd. , Workmen M/s. Saxby & Farmer (India) Pvt. Ltd. vs M/s. Saxby & Farmer (India) Private Ltd. C.A. 152/64 dr. 12 4 1965, The Millowners ' Association, Bombay vs The Rashuriya Mill Mazdoor Sangh, Bombay, The Honorary Secretary South India Millowners ' Association & Ors.
vs The Secretary, Coimbatore District Textile Workers ' Union.
[1962] 2 Supp.
S.C.R. 926, National Engineering Industries Ltd. vs The Workmen & Vice Versa, [1968] 1 S.C.R. M/s. Titaghar Paper Mills Co. Ltd. vs Its Workmen, [1959] Supp.
2 S.C.R. 1012, Millowners, Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, , Tata Oil Mills Co. Ltd. vs It 's Workmen & Ors.
; , Anil Starch Products Ltd. vs Ahmedabad Chemical Workers ' Union & Ors., , Khandesh Spg & Wvg.
Mills Co. Ltd. vs The Rashtriya Girni Karogat Sangh, Jalgaon, ; , Bengal Kagazkal Mazdoor Union & Ors.
vs Titagarh Paper Mills Company, Ltd., [1963] II L.L.J. 358 and Voltas Limited vs Its Workmen, ; , considered.
|
Appeals Nos. 237 and 238 of 1960.
Appeals by special leave from the judgment and order dated July 8, 1958, of the Patna High Court, in Misc.
Cases Nos. 713 and 819 of 1958.
A. V. Viswanatha Sastri, section R. Banerjee and section C. Mazumdar, for the appellants.
section P. Varma, for the respondents.
April 19.
The judgment of section K. Das, J. L. Kapur, M. Hidayatullah and T. L. Venkatarama AIyar, JJ., was delivered by Venkatarama Aiyar, J. J. C. Shah, J., delivered a separate judgment.
VENKATARAMA AIYAR, J.
Both these appeals arise out of the same facts and involve the determination of the same question, and this judgment will govern both of them.
The appellant in Civil Appeal No. 237 of 1960 is a company registered at Recklinghausen near Dusseldorf in West Germany, and carries on business in the manufacture and erection of plants and machinery.
On December 19, 1953, it entered into a contract with a company called Sinclair Fertilisers and Chemicals (Private) Ltd., hereinafter referred to as the Owner, for assembling and, installing machinery, plants and 84 accessories for a coke oven battery and by products plant at Sindri in the State of Bihar for an all inclusive price of Rs. 2,31,50,000.
The agreement provides that the appellants were to supply all the materials and labour required for the execution of the works, and that the performance was to be split up into two categories, the German section and the Indian section, that the German section was to consist of deliveries of materials from Germany Free on Board 'European ports, cost of technical drawings and services of German specialists, and that the Indian section was to consist of supply of Indian materials and charges for Indian labour and services to be performed in India.
The German section was to be paid out of the lump sum stated above a sum of Rs. 1,31,50,000 in pounds sterling in London on account of the appellant, and the Indian section was to be paid the balance of Rs. 1,00,00,000 in Indian currency in this country, and payments were to be made in instalments related to the progress of the contract.
Subsequent to the agreement, the appellant entrusted the work of the Indian section to an Indian company called the Coke Oven Construction Company (Private) Ltd., and the Owner having accepted this arrangement the said company has become the assignee of the contract in so far as it relates to the execution of the Indian section thereof.
It is this company that is the appellant in Civil Appeal No. 238 of 1960.
The execution of the works was completed in 1955 as provided in the agreement, and the amounts due thereunder were also paid to the two appellants.
The present dispute between the parties is as to whether the appellants in the two appeals are liable to pay sales tax on the value of the materials used by them in the execution of the works under the contract.
It will be convenient now to refer to the relevant provisions of the Bihar Sales Tax Act (Bihar Act No. XXX of 1947), hereinafter referred to as the Act.
Section2(g)of the Act defines 'sale ' as including a transfer of property in goods involved in the execution.
of contract.
'Contract ' is defined in section 2(b) as meaning any agreement for carrying out for cash or 85 valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property; and 'goods ' are defined in section 2(d) as including "all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property." 'Sale price ' is defined in section 2(h)(ii) as meaning the amount payable to a dealer as valuable consideration for the carrying out of any contract, less such portion as may be prescribed, of such amount representing the usual proportion of the cost of labour to the cost of materials used in carrying out such contract. 'Dealer ' is defined in section 2(c) as meaning any person who sells or supplies any goods including goods sold or supplied in the execution of a contract.
Section 2(1) defines 'turnover ' as meaning the aggregate of the amounts of sale prices received and receivable by a dealer in respect of sale or supply of goods or carrying out of any contract, effected or made during a given period.
Section 4 is the charging section, and it provides that every dealer whose gross turnover during the accounting period exceeded Rs. 10,000 shall be liable to pay tax on sales which take place in Bihar, and section 5 provides that the "tax payable by a dealer under this Act shall be levied on his taxable turnover at such rate or rates and subject, to such restrictions and conditions as may be laid down from year to year by an annual Bihar Finance, Act.
" The Bihar Finance Act defines 'taxable turnover ' as meaning that part of the dealer 's gross turnover on sales which have taken place in Bihar during any period subject to certain deductions.
Section 9(1) of the Act provides that "No dealer shall, while being liable under section 4 to pay tax under this Act, carry on business as a dealer unless he has been registered under this Act and possesses a registration certificate".
Section 13(5) of the Act under which the present proceedings have been initiated is as follows: " If upon information which has come into his possession, the Commissioner is satisfied that any dealer has been liable to pay tax under this Act in respect of any period and has nevertheless wilfully 86 failed to apply for registration, the Commissioner shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of his judgment, the amount of tax, if any due, from the dealer in respect of such period and subsequent periods and the Commissioner may direct that the dealer shall pay, by way of penalty, in addition to the amount so assessed, a sum not exceeding one and half times that amount.
" The gist of the above provisions is that in a contract for execution of works, the materials used therein are treated as sold by the contractor and their value is taken as the sale price liable to be taxed, and there are provisions for determining that value.
Acting on these provisions, the Superintendent of Sales Tax, Dhanbad, the third respondent herein, issued on March 20, 1956, a notice to the appellant in Civil Appeal No. 237 of 1960, under section 13 of the Act, stating that on information which had come to his possession he was satisfied that the appellant was liable to pay tax for the periods 1952 53, 1953 54 and 1954 55, that it had wilfully failed to register itself under section 9 of the Act, and it was directed to show cause why penalty should not be imposed.
In response to this notice, the appellant appeared before the third res pondent and represented that it had only supplied materials in execution of works contract, that there was no sale of any goods or materials by it, and that the proceedings for taxing this supply of materials as if they had been sold were illegal.
Disagreeing with this contention, the third respondent directed the appellant to produce all its books, accounts and documents for purposes of assessment, and this is quite understandable, as it was his duty to levy tax in accordance with the provisions of the Act.
Thereupon, the appellant filed petitions before the High Court of Patna under articles 226 and 227 of the Constitution for the issue of appropriate writs for quashing the proceedings before the third respondent and for prohibiting further proceedings under the Act as being wholly incompetent.
, The grounds put forward in support of the petition were firstly that the State 87 legislature having authority to enact a law imposing a tax on the sale of goods was not competent to tax what under the law was not a sale, and that as the supply of materials in the course of the execution of works, was not in law a sale of those goods, a tax on such supply was unauthorized; and secondly that, even if there was a sale of materials, that was in the course of import from Germany, and a tax thereon was repugnant to article 286(1)(b) of the Constitution.
After taking over the Indian section of the contract, the appellant in Civil Appeal No. 238 of 1960 had registered itself on May 11, 1953, as a dealer under section 9 of the Act and was submitting periodical returns as required by the certificate and the Act.
But its contention at all times has been that it is not liable to pay sales tax on the transactions in question, as there were only supplies of materials in execution of works contract and that they did not amount to sale of goods.
This contention was overruled by the Superintendent of Sales Tax, Dhanbad, the third respondent herein, and the appellant was assessed to sales tax successively for the years 1952 53 and 195354.
While proceedings by way of appeal or revision by the appellant against these orders of assessment were pending, the third respondent issued further notices for assessment of tax for the years 1954 55 and 1955 56, and directed the appellant to produce all its books and accounts for the above period.
Thereupon the appellant filed in the High Court of Patna, petitions under articles 226 and 227 of the Constitution, similar to those filed by the appellant in Civil Appeal No. 237 of 1960, for issue of appropriate writs to quash the orders of the Sales Tax authorities on the ground that the provisions of the Act, in so far as they sought to tax supply of materials in works contracts, were ultra vires.
By the time the above petitions came up for hearing, the decision of this Court in The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (1), had been reported, wherein it was held that the expression "sale of goods" in Entry 48 in List II of Sch.
VII to (1) ; 88 the Government of India Act, 1935, corresponding to Entry 54 in List 11 of Sch.
VII to the Constitution of India had the same meaning that it has in the , that where there is a building contract, under which specified work is to be executed for a lump sum, there is no contract of sale, as such, of materials used in the works, and that accordingly, a tax on the supply of those materials treating it as a sale was ultra vires the powers of the State Legislature under Entry 48 in List 11 of Sch.
VII to the Government of India Act, 1935.
The learned Judges were of opinion that this decision was distinguishable because there was a term in the agreement before them that the property in the materials was to pass to the owner as soon as they were brought on the site.
Dealing next with the contention of the present appellants that, as there was no agreement for the payment of price for the materials, as such, they could not be held to have been sold, the learned Judges noticed without comment the contention of the Government Pleader for the respondents, based on section 9 of the , that even though no price had been fixed for the materials, that could be determined from the account books and invoices and the course of dealings between the parties.
The learned Judges then proceeded to observe: "I wish, however, to state that I do not express any concluded opinion on the question whether there is sale of materials liable to be taxed in the present case.
The facts have not been fully investigated by the sales tax authorities and the petitioners have not furnished all the account books and documents and other relevant information for the purpose of deciding this question.
It would be open to the sales tax authorities to investigate the facts and Upon proper construction of the contract come to.
the finding whether and if so to what extent, the petitioners are liable to pay sales tax.
I have no doubt that in deciding this question the sales tax authorities will keep in view the principles laid down by the Supreme Court in State of Madras versus Gannon Dunkerley and Company (Madras) Limited (9 Sales Tax Cases 353)".
89 With these observations the learned Judges dismissed the petitions.
It is against this judgment that the present appeals by special leave are directed.
The first question that arises for our decision is ,whether on the construction of the agreement dated December 19,1953, it could be held that there was a sale by the appellants of the materials used in the construction works, apart from the execution of those works.
In The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (1), after stating that building contracts could assume several forms, this Court observed as follows: "It is possible that the parties might enter into distinct and separate contracts, one for the transfer of materials for money consideration and other for the payment of remuneration for services and for work done.
In such a case there are really two agreements, though there is a single instrument embodying them and the power of the State to separate the agreement of sale from the agreement to do work and render service and to impose a tax thereon, cannot be questioned and will stand untouched by the present judgment.
" The point for determination, therefore, is whether on its true construction, the contract in question is a Combination of two distinct agreements, one to sell materials and the other to supply labour and services, or whether it, is only one agreement entire and indivisible for execution of the works.
We will now refer to the relevant portion of the agreement dated December 19, 1953.
The preamble to the agreement states that the Owner had agreed with the contractor that the latter was to set up a complete coke oven battery ready for production as well as by products plants according to specifications given therein, that the installation was to be made at a site selected by the Owner and that the contractor was to "erect and construct buildings, plants and machineries and deliver and supply accessories and articles from Germany and also locally from India and render services fully (1) ; 12 90 described in the First Schedule. . for an all inclu sive price of Rs. 2,31,50,000." Then cl.
I provides that the contractor shall execute and complete the works mentioned in the Schedule, and el. 2 that the Owner shall pay to the contractor for executing the contract the sum of Rs. 2,31,50,000.
Clause 4 requires the contractor to "provide all labour, materials, machinery, plant, tools, tackles and other implements for performing the works in a workman like manner.
" Under cl. 11, the contractor guarantees "to accomplish full production within 22 months from the 15th September, 1952" and further undertakes to fulfill the guarantees prescribed in Schedule II to the agreement "to the satisfaction of the Owner within a period of three months from the date of accomplishment of full production.
" Clause 28 provides that in case the contractor fails or is unable to complete the works within the period, the Owner might take possession of the works and of the materials, "which will become the property of the owner," and complete the works and deduct from the agreed price the expenses incurred in such completion.
It is clear from the above clauses that the subject matter of the agreement was the installation of the coke oven battery and it accessories, that the sum of Rs. 2,31,50,000 was the price agreed to be paid for the execution of those works, and that there was no agreement for the sale of materials, as such, by the appellants to the Owner.
In other words, the agreement in question is a contract entire and indivisible for the construction of specified works for a lump sum and not a contract of sale of materials as such.
Now the contention that found favour with the learned Judges in the High Court was that there was in the contract a clause that the property in the, materials was to pass to the owner when they are brought on the site, and that, in effect, amounted to a sale of those materials by the appellant to the Owner.
The clause in question is as follows: "15 (ii).
All materials and plant brought by the Contractor upon the site under the German and Indian Sections in connection with the construction 91 of the Coke Oven and by products Plant shall immediately they are brought upon the site become the Owner 's property and the same shall not on any account whatsoever be removed or taken away by the Contractor or by any other person without the Owner 's prior authority in writing.
Such of them as during the progress of the works will be rejected by the Owner in accordance with the terms agreed upon between the Contractor and the Owner in this respect shall on such rejection, cease to be the Owner 's property. .
The Owner shall not be liable for any loss or damage which may happen to or in respect of such materials and plant by the same being lost, stolen or injured or destroyed by fire, tempest or otherwise for which the contractor will be liable. .
The Owner agrees that after the Coke Oven and by products Plants have been constructed according to the agreed terms, the Contractor will be entitled to remove from the site their tools, tackles, machines, packing materials, protection roof and other materials as are surplus to the requirements of the normal operation of the Coke Oven and by products Plant provided that no claim for increased cost is made in respect of anything so removed.
" In Peare Lal Hagri Singh vs The State of Punjab (1), a building contract contained the following clause: "All stores and materials brought to the Site shall become and remain the, property of Government and shall not be removed off the Site without the prior written approval of the G. E.
But whenever the works are finally completed, the contractor shall at his own expense forthwith remove from the Site all surplus stores and materials originally sup plied by him and upon such removal, the same shall revest in and become the property of the Contractor." Discussing the question whether by reason of this clause there was a Contract of sale of the materials by the Contractor, distinct from the works contract, this Court held that its object was only to ensure that (1) ; 92 materials of the right sort were used in the construction and not to constitute a contract of purchase of the materials separatism.
In the present case, el. 15 is even clearer that no sale of materials, as such, was intended, because it expressly provides that if they were destroyed by fire, tempest or otherwise, the loss would fall not on the owner, which must be the result if the property is taken to have been absolutely transferred to it, but on the contractor.
The argument based on section 9 of the is, in our opinion, equally unsound.
What that section enacts is that where there is a contract of sale of movable but the price is not mentioned, it has to be fixed either in the manner provided in the agreement or by having regard to the course of dealings between the parties, and where that is not possible, the buyer has to pay the seller a reasonable price.
But the section presupposes that there is a Contract of sale of goods, and, as held in The State of Madras V. Gannon Dunkerley & Co. (Madras) Ltd. (1), such a contract requires that there must have been an agreement between the parties for the sale of the very goods in which eventually property passes.
If, as held by us, cl. 15 does not embody an agreement for the sale of materials as such, there is no contract of sale with respect to them and section 9 of the can have no application.
The contention, therefore, that el.
15 of the agreement could be read as amounting to a contract of sale of materials, and that the price therefor could be fixed as provided in section 9 of the by recourse to the account books of the appellants or the invoices or the course of dealings between them and the owner, must be rejected as untenable.
It follows that the agreement dated December 19, 1953, being a contract for the construction of works, one and indivisible, the respondents have no right to impose a tax on the mate rials supplied in execution of that contract on the footing that such supply is a sale.
It is next contended for the respondents that, whatever the merits of the contentions based on the construction of the contract, the proper forum to agitate (1) ; 93 them would be the authorities constituted under the Act to hear and decide disputes relating to assessment of tax, that it was open to the appellants to satisfy those authorities that there have been no sales such as are liable to be taxed, that indeed they were bound to pursue the remedies under the Act before they could invoke the jurisdiction of the court under article 226 and that the learned Judges of the High Court were, therefore, right in declining to entertain the present petitions.
It is true that if a statute sets up a Tribunal and confides to it jurisdiction over certain matters and if a proceeding is properly taken before it in respect of such matters, the High Court will not, in the exercise of its extraordinary jurisdiction under article 226, issue a prerogative writ so as to remove the proceedings out of the hands of the Tribunal or interfere with their course before it.
But it is equally well settled that, when proceedings are taken before a Tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.
That has been held by this court in The State of Bombay vs The United Motors (India) Ltd. (1), Himmatlal Harilal Mehta vs The State of Madhya Pradesh (2).
and The Bengal Immunity Company Limited vs The State of Bihar (3).
The position that emerges is that, if the proceedings before the Sales Tax Officer are founded on the provisions of the Act, which authorizes the levy of the tax on the supply of materials in construction contracts, then they must in view of the decision in The State of Madras vs Gannon Dunkerly & Co. (Madras) Lid.
(4), be held to be incompetent and quashed.
But if the proceedings relate to any extent to sales otherwise than under the contract, then the enquiry with respect to them must proceed (1) ; , 1077.
(2) ; , 1127.
(3) , 617 619, 764 766.
(4) ; 94 before the authorities under the Act and the application under article 226 must fail.
We must now examine the true scope of the proceedings before the Sales Tax Officer in the light of the above principles.
We start with this that the Act contains provisions imposing a tax on the supply of materials under a construction contract.
The appellants were indisputably engaged in construction works under the agreement dated December 19, 1953, and it is not suggested that they were carrying on any independent business as dealers in the State of Bihar.
Presumably, therefore, when the sales tax authorities took proceedings against them, it was in respect of materials supplied by them under their contract dated December 19, 1953.
When the appellants, in response to the notice issued by the third respondent, contested their liability to be taxed, it was on the ground that the supplies of materials under the contract were not sales.
When the appellants next moved the court tinder article 226 for quashing the proceedings, they urged that the provisions of the Act, in so far as they purported to impose a tax on the materials supplied in the performance of the contract, as if they were sold, were ultra vires.
If the respondents sought to tax the appellants on the footing that sales of materials were effected outside the contract, it was their duty to have put that case forward in answer to the petition.
They did nothing of the kind.
They did not file even a counter statement.
At the time of the argument, when faced with the decision of this Court in the case of The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (1), their entire case was that the agreement between the parties should be construed as involving a sale of materials, and that their value could be ascertained from the invoices, account books and the course of dealings between the parties.
No contention was urged that there were sales of materials which fell outside the agreement between the appellants and the Owner.
The learned Judges of the High Court in dismissing the petitions made it clear that the investigation before the sales (1) ; 95 tax authorities must be as regards their liability to pay sales tax "upon proper construction of the contract.
" In this Court also, the respondents seek in their statement to maintain the liability of the appellants only on the basis of the contract, reliance being placed on cl. 15 already referred to and on section 9 of the .
There is no claim that the appellants are liable on the basis of sales falling outside the agreement.
It was stated before us for the appellants, and not contradicted by the respondents, that the Sindri Fertilisers and Chemicals (Private) Ltd., is a company controlled by the Government.
If that is so, the respondents were at all times in possession of facts which would have shown whether the appellants entered into any transaction decors the agreement, and it is significant that at no stage have they alleged any such facts.
We are satisfied that the proceedings have at all stages gone on the footing that the liability of the appellants arose under the contract and not otherwise.
In that view, we must hold, following the decision in The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (1) that the proceedings taken by the respondents for imposing sales tax on the supplies of materials by the appellants, pursuant to the contract dated December 19, 1953, are illegal and must be quashed.
In the result, the appeals are allowed and appropriate writs as prayed for by the appellants will be issued.
The appellants are entitled to their costs throughout.
SHAH, J.
In my view these appeals must fail.
The appellants claim that they are not liable to be taxed in respect of the transaction dated December 19, 1953, because it is not a sale within the meaning of the Bihar Sales Tax Act, 19 of 1947, but is a contract to assemble and install machinery, plants and accessories of a coke oven battery and other plants which under the principle of the decision of this Court in The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd. (1) is not subject to sales tax.
The Act defines "sale" as meaning omitting parts not material any transfer of property in goods for (1) ; 96 cash or deferred payment or other valuable consideration, including a transfer of property in goods involved in the execution of contract.
"Contract" is defined as meaning any agreement for carrying out for cash or deferred payment or other valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property.
The expression "goods" means all kinds of movable property other than actionable claims, stocks, shares or securities and includes all materials, articles and commodities whether or not to be used in the construction, fitting out, improvement or repair of immovable property.
"Sale price" means the amount payable to a dealer as valuable consideration for (1) the sale or supply of any goods, less any sum allowed as cash discount according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of, or before, delivery thereof, other than the cost of freight or delivery or the cost of in stallation when such cost is separately charged; or (ii) the carrying out of any contract, less such portions as may be prescribed , of such amount, representing the usual proportion of the cost of labour to the cost of materials used in carrying out such contract.
These definitions in so far as they seek to treat goods supplied or used in the execution of a works or construction contract, as sold and liable to sales tax under the Act, must, on the decision of this Court in Gannon Dunkerley 's case (1) be regarded as beyond the legislative competence of the State Legislature.
In Gannon Dunkerley 's case (1), this Court held that in a building contract, the contractor constructs the building according to the specifications contained in the agreement and in consideration therefor receives payment as provided therein, and in such an agreement, there is neither a contract to sell the materials used in the construction, nor does property pass therein as moveables, and accordingly in a building contract which is one, entire and indivisible, there is no sale of goods and it is not within the competence of the Provincial Legislature under Entry 48 in List 11 in (1) ; 97 Sch.
VII of the Government of India Act, 1935, to impose a tax on the supply of the materials used in such a contract treating it as a sale.
Relying upon the decision of this court in Gannon Dunkerley 's case (1), the appellants contend that the amount received by them under the contract dated December 19, 1953, is not liable to be assessed to sales tax.
But the question whether the contract is a pure works contract or a composite contract has never been investi gated.
Undoubtedly, the formal document evidencing the contract suggests, prima facie, that it is a works contract, but in assessing liability to tax, the taxing authority is not restricted merely to the letter of the document: he has to enquire into the true nature of the transaction on all the relevant materials and to ascertain whether it partakes of the nature of the transaction which the statute renders taxable.
He is, in ascertaining the true nature of the contract, also entitled to consider how the contract"was performed.
The Act entrusts power to ascertain the facts on which the liability to tax depends to the taxing authorities and in that behalf, the Act is exhaustive in scope and content.
The appellants in approaching the High Court by petitions under articles 226 and 227 of the Constitution sought to eliminate the entire procedure and machinery set up by the Act for ascertaining facts on which the liability to tax depends.
I strongly deprecate the practice of the taxpayer being permitted to invoke the jurisdiction of the High Court to issue high prerogative writs on certain assumed facts facts the truth of which has never been subjected to scrutiny in the only manner in which the law provides they should be scrutinised.
The power to assess the facts on which the decision as to the true nature of the taxable transaction depends by the statute lies solely with the taxing authorities: it does not lie with any other body or tri bunal.
Invoking the jurisdiction of the High Court to adjudicate upon the facts, directly or indirectly, on which the liability to tax depends, in my view, (1) ; 13 98 amounts to inviting the High Court to exercise jurisdiction which it does not possess.
This is however not to say that the jurisdiction of the High Court to issue a writ of prohibition restraining the levy of tax under a statute can never be entertained.
If, for instance, the statute is beyond the legislative competence of the legislature or defies a constitutional restriction or infringes a fundamental right or the taxing authority arrogates to himself powers which he does not possess or attempts to levy tax more than once in respect of the same transaction when it is not permitted by the statute, or the taxing authority threatens to recover tax on an interpretation of a statutory provision imposing tax which is on the face of the statute erroneous, jurisdiction to issue writ of prohibition from the High Court may properly be invoked.
But the High Court cannot be asked to ascertain disputed facts bearing upon the taxability of a transaction, because that jurisdiction is vested elsewhere.
The contract in question is principally a works contract.
The preamble states that the appellants had agreed with the Sindri Fertilizers and Chemicals Ltd. to set up a complete coke oven battery ready for production as well as by products plant on the site specified and to construct buildings, plants and machineries and deliver and supply accessories and articles and to render services fully described in the first schedule, subject to the guarantees to be fulfilled on the part of the appellants and terms and conditions mutually agreed and settled and mentioned in the second schedule for an all inclusive price in accordance with the preliminary site plan.
It is manifest from the preamble that there is a contract for the construction of a coke oven battery and by products together with the plant, and also to deliver and supply accessories and articles.
Undoubtedly, the price agreed to be paid is an "inclusive price" in respect of the entire contract, but that does not affect the nature of the contract to deliver and supply accessories and articles.
The appellants have undertaken, subject to the terms and conditions mentioned in the contract, to execute and complete the works mentioned in the first schedule.
99 The contract in so far as it relates to the installation of plant and construction of building was a works contract and notwithstanding the definition of "sale" and "contract" in the Act, was not taxable but the contract contemplates delivery and supply by the appellant of accessories and articles.
Even if this delivery and supply of accessories and articles is incidental to the works contract, it cannot be assumed without investigation that it was not a part of a transaction of sale liable to tax.
The appellants asked the High Court to assume that the contract in question was a pure works contract, but the High Court declined to make that assumption.
Ramaswami, C. J., in dealing with that plea observed: "I wish, however to state that I do not express any concluded opinion on the question whether there is sale of materials liable to be taxed in the present case.
The facts have not been fully investigated by the sales tax authorities and the petitioners have not furnished all the account books and documents and other relevant information for the purpose of deciding this question.
It would be open to the sales tax authorities to investigate the facts and upon proper construction of the contract come to the finding whether and if so to what extent, the petitioners are liable to pay sales tax," In my view, the learned Chief Justice was right in so approaching the question.
The sales tax authorities have made no assessment; they merely issued a notice purporting to do so under section 13(5) of the Act and required the appellants to produce their books of account and records for ascertaining whether the transaction or any part thereof was in the nature of sale of goods.
The sales tax authorities had jurisdiction to do so and by merely looking at the terms of the written contract and without any investigation as to the true nature of the transaction the High Court could not decide whether the contract performed was a pure works or construction contract or was a composite contract.
It was urged that in the petition filed by the appellants before the High Court, an affidavit 100 in rejoinder challenging the correctness of the averment made in the petition that it was a pure works contract was not filed by the taxing authorities and therefore the High Court was bound to decide the dispute on the footing set up by the appellants.
But the taxing authorities could not be expected without investigation to assert a state of facts which was not and could not be within their knowledge, and their statutory authority could not, because of their failure to so assert, be nullified.
As I have already observed, the investigation of facts on the question of the liability to pay tax has to be made by the taxing authorities in whom that jurisdiction is vested.
Before the facts on which the liability to tax depends are ascertained, the High Court could not be asked to assume that the transaction was in the nature of a pure works contract and to decide the question as to the liability of the appellants on that footing.
There is no ground for assuming that the taxing authorities will not give effect to the decision of this court in Gannon Dunkerley 's case (1) after the true nature of the transaction is ascertained.
In my view, the High Court was right in declining to issue the writ prayed for.
By COURT: In accordance with the opinion of the majority, the appeals are allowed and it is directed that appropriate writs as prayed be issued.
The appellants are also entitled to their costs throughout.
Appeals allowed.
| On December 19, 1953, the appellant, a company registered in West Germany, entered into a contract with a company in India to set up a complete coke oven battery ready for production as well as by products plants at Sindri in the State of Bihar, agreeing to erect and construct buildings, plants and machinery and deliver and supply accessories and articles from Germany and also locally from India, and render services fully described in the First Schedule, for an all inclusive price of Rs. 2,31,50,000.
The contract provided that in case the contractor failed to complete the works within the period specified therein the Indian company might take possession of the works and the materials which would become its property and complete the works and deduct from the agreed price the expenses incurred in such completion.
Under cl.
15(ii) of the contract all materials brought by the contractor upon the site shall immediately become the company 's property, but such of them as during the progress of the works.
were rejected by the company ceased to be Company 's property, and after the coke oven and byproducts plants had been constructed the contractor was entitled to remove the surplus materials.
The clause further provided that the company shall not be liable for any loss if the materials were destroyed by fire or otherwise.
Under the Bihar Sales Tax Act, 1947, in a contract for, execution of works, the materials used 11 82 therein are treated as sold by the contractors and their value is taken as the sale price liable to be taxed.
The execution of the works was completed in 1955 as provided in the agreement and on March 20, 1956, the sales tax authorities issued a notice to the appellant to the effect that it was liable to pay tax for the three years 1952 to 1955, under the provisions of the Act.
The appellant represented that it had only supplied materials in execution of works contract, that there was no sale of any goods or materials by it and that the proceedings for taxing this supply of materials as if they had been sold were illegal.
The sales tax authorities having proceeded to take further steps to levy the tax in spite of its representations, the appellant filed a petition before the High Court of Patna under articles 226 and 227 of the Constitution of India for quashing the proceedings.
The High Court took the view that under cl.
15(ii) of the contract in question the property in the materials was to pass to the Indian company as soon as they were brought on the site, and that, in effect, amounted to a sale of those materials by the appellant to the company.
The Court, however, dismissed the petition on the ground that the facts had not yet been fully investigated and that it would be open to the sales tax authorities to investigate the facts and upon the proper construction of the contract come to the finding whether and if so to what extent, the appellant was liable to pay sales tax.
Held (Shah, J., dissenting): (1) that on its proper construction the agreement dated December 19, 1953, was a contract entire and indivisible for the construction of specified works for a lump sum and not a contract of sale of materials as such and that the sales tax authorities had no right to impose a tax on the materials supplied in execution of that contract on the footing that such supply was a sale.
The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., ; and Peare Lal Hari Singh vs The State of Punjab, ; , followed.
(2) that where proceedings are taken before a tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.
The State of Bombay vs The United Motors (India) Ltd., ; , Himmatlal Harilal Mehta vs State of Madhya Pradesh, ; and The Bengal Immunity Company Ltd. vs State of Bihar, , relied on.
In the present case, the sales tax authorities sought to maintain the liability of the appellant to pay tax in respect of materials supplied by it only under the contract dated December 19, 953, and on the basis of the legality of the provisions 83 of the Bihar Sales Tax Act, 1947.
Consequently, the proceedings taken by them must be held to be illegal and must be quashed.
Per Shah, J. Under the agreement dated December 19, 1953, there was a contract for the construction of a coke oven battery and by products plant, and also to deliver and supply accessories and articles.
Even if this delivery and supply was incidental to the works contract, it could not be assumed without investigation that it was not a part of a transaction of sale liable to tax.
The investigation of facts on the question of liability to pay tax has to be made by the taxing authorities in whom that jurisdiction is vested.
Before these facts are ascertained, by merely looking at the terms of the written contract and without any investigation as to the true nature of the transaction, the High Court could not decide whether the contract performed was a pure works or construction contract or was a composite contract.
The High Court was, therefore, right in declining to issue the writ prayed for.
|
Civil Appeals Nos. 262 (NT) of 1974 etc.
From the Judgment and Order dated 17.1.1973 of the Andhra Pradesh High Court in Case Referred No. 21 of 1971.
G.C. Sharma and A. Subba Rao for the Appellant.
C.M. Lodha and Miss A. Subhashini for the Respondent.
The Judgment of the Court was delivered by TULZAPURKAR, J.
These three appeals relating to assessment years 1966 67, 1968 69 and 1969 70 respectively (the accounting period in respect whereof ended on 30.9.1965, 30.9.1967 and 30.9.1968 respectively) raise a common question of law for our determination namely: Whether on the facts and in the circumstances of the case and on a true interpretation of the collaboration agreements between the assessee and M/s Metrimpex Hungarian Trading Company, Budapest the payment of RS. 1,60,000 by the assessee to the foreign collaborator was attributable partly or wholly towards the acquisition of a depreciable asset? Briefly stated the facts giving rise to the question are these.
M/s Scientific Engineering House (P) Ltd. (hereinafter called the assessee) manufactures scientific instruments and apparatus like Dumpy levellers, levelling staves, prismatic compass, etc.
It entered into two separate collaboration agreements, one dated 15th March 1961 and the other dated 31st March 706 1961 with M/s Metrimpex Hungarian Trading Company, Budapest for undertaking the manufacture of microscopes and theodolites, under which the said foreign collaborator, in consideration of payment of Rs. 80,000 each (Rs. 1,60,000 under both the agreements together), agreed to supply to the assessee all the technical know how required for the manufacture of these instruments.
The object of both the agreements was to enable the assessee to manufacture the said instruments of certain specifications and the assessee thereunder acquired the right to manufacture in India under its own trade mark and name but under the licence MOM Hungary of the foreign supplier the said instruments and the right to sell the same in India.
To enable the assessee to manufacture these instruments in India in the manner just indicated the foreign collaborator, inter alia, agreed to render 'documentation service ' by supplying to the assessee an uptodate and correct complete set each of the five types of documents (such as manufacturing drawings, processing documents, designs, charts, plans and other literature more specifically detailed in clause 3 of the agreements).
There was also a provision enjoining the foreign collaborator to render training and imparting of knowledge of the know how technique of manufacturing these instruments.
Pursuant to the agreements the assessee made full payment of Rs. 1,60,000 (Rs. 80,000 under each of the agreements) to the foreign collaborator and the latter rendered 'documentation service ' by supplying complete sets of all the documents including designs, drawings, charts, plans and other literature as per clause 3.
The sum of Rs. 1,60,000 was debited by the assessee under the head 'Library '.
For the assessment year 1966 67 for which relevant accounting year ended on 30th September 1965 the assessee claimed a sum of Rs. 12,000 by way of depreciation on 'Library '.
Such depreciation was claimed on the ground that the payment of Rs. 1,60,000 had been made really for the outright purchase of designs drawings, charts and o her literature which were voluminous occupying almirah full of storage space and these collectively constituted the pages of a book and the assessee had claimed depreciation at the appropriate rate.
The Income Tax Officer held that the sum of Rs. 1,60,000 did not represent the value of books purchased by the assessee but represented the price paid for acquiring the technical know how which amounted to capital expenditure but since no tangible or depreciable asset was brought into existence no depreciation allowance could be claimed On appeal preferred by the assessee, however, the Appellate Assistant Commissioner held that what the assessee has done 707 was to make an outright purchase of certain specimen drawings, charts, plans, etc.
On special papers, that these documents when collected together constituted a book on which depreciation, as in the case of plant and machinery, would, at the appropriate rate be allowable and he directed the Income Tax Officer to allow the depreciation claimed.
In the further appeal preferred by the Department the Tribunal took the view that clauses 2,3,4,5 and 10 of the agreements did not lend support to the stand taken by the assessee that payments (Rs. 80,000 each) had been made mainly for the supply of designs, drawings, charts, etc., that the services to be rendered by the foreign collaborator covered a wide field and that the supply of designs drawings, charts, etc.
was incidental and only in furtherance of other services which the foreign collaborator was expected to render.
It further took the view that since the supply of designs, drawings, charts, etc. was only incidental and the payment of Rs. 1,60,000 could not entirely be held to represent the purchase price of those documents it was unnecessary for them to go into the question whether the said documents fell within the meaning of the expression 'books ' and whether depreciation was, therefore, admissible thereon.
The Tribunal, however, held that the agreements showed that some of the services which the foreign collaborator was required to render to the assessee were on revenue account (as, for example, the provision which required the foreign collaborator to depute their experts to correct any flaws or irregularities that might be encountered in the course of production) and that therefore the payment of Rs. 1,60,000 was partly on capital account and partly on revenue account.
As the appeal was by the Department and not by ' the assessee and the Department could not be in a worse position then what it was when it came up in appeal, the Tribunal held that even if it were to hold that the part of the payment was allowable as revenue expenditure the allowance could not exceed Rs. 12,000 being the deduction allowed by the Appellate Assistant Commissioner.
In other words the Tribunal confirmed the deduction of Rs. 12,000 not as depreciation allowance but as revenue expenditure and in this manner it confirmed the order of the Appellate Assistant Commissioner.
G Both the assessee and the revenue sought a reference to the High Court.
In the reference applications preferred by each before the Tribunal the assessee urged a two fold contentions : (a) that the assessee was entitled to claim depreciation at the rate applicable to library (books) on the entire sum of Rs. 1,60,000 paid to the foreign collaborator; and (b) that the Tribunal ought to have given a specific finding as to what would 708 be the amount representing the capital expenditure which was entitled to depreciation, and the assessee sought to raise appropriate questions covering these contentions.
On the other hand the revenue urged two contentions: (1) that having come to the conclusion that the payment of Rs. 1,60,000 did not bring into existence any depreciable asset the Tribunal ought to have allowed its appeals fully and no relief could be granted to the assessee; and (ll) that the Tribunal was not justified in allowing the sum of Rs. 12,000 as revenue expenditure while disposing of its appeal particularly when no point was urged before lt that the same was an item of revenue expenditure and sought to raise proper questions covering these contentions.
The Tribunal, however, referred the following question as appropriately arising from its order to the High Court: "Whether on the facts and in the circumstances of the case and on true interpretation of the collaboration agreements between the assessee and M/s Metrimpex Hungarian Trading Company, Budapest, the payment of Rs. 1,60,000 was attributable partly to the acquisition of depreciable asset and partly to revenue expenditure or wholly towards the acquisition of a depreciable asset?" On a consideration of the terms and conditions of the two collaboration agreements the High Court took the view that the payment of Rs. 1,60,000 did not mainly represent the purchase price of the designs, drawings, charts, etc.
a contended by the assessee, that the rendering of 'documentation service ' was incidental, that no part of the expenditure was on revenue account but the whole of it was of a capital nature bringing into existence an asset of enduring benefit to the assessee, but what was brought into existence was a non depreciable asset and, therefore, the assessee was not entitled to any relief in the case.
In other words by its judgement dated 7th January 1973 the High Court held that the assessee was not entitled to any relief either by way of depreciation allowance or on account of revenue expenditure.
Following the aforesaid decision rendered by the High Court in relation to the assessment year 1966 67 the assessee was denied similar relief claimed by it in the two subsequent assessment years, 1968 69 and 1969 70.
Instant appeals are preferred by the assessee challenging the High Courts view.
709 In support of the appeals counsel for the assessee accepted the High Court 's view that no part of the expenditure (Rs. 80,000 under each of the two agreements) was on revenue account and the whole of it was of a capital nature but contended that both the Tribunal and the High Court had, on a misreading of the terms of the two agreements, held that rendering of the documentation service was incidental and that the payment of Rs. 1,60,000 did not mainly represent the purchase price of drawings, designs, charts, plans and other literature, etc.
According to counsel on a fair reading of the relevant clauses in the two agreements it was clear that the 'documentation service ' was the principal or the main service to be rendered by the foreign collaborator to the assessee for which mainly the payment of Rs. 1,60,000 was made as a result whereof the assessee acquired all the technical know how requisite for the purpose of manufacturing the instruments in question and in this behalf reliance was placed on clause 6 of both the arguments.
Counsel further urged that the High Court erroneously concluded that what was brought into existence was a non depreciable asset, inasmuch as the acquisition of a capital asset like the technical know how in the shape of drawings, designs, charts, plans.
Processing data and other literature should have been regarded as constituting a book falling within the inclusive definition of 'plant ' given in Sec.
43 (3) of the Income Tax Act, 1961.
In this behalf counsel relied on Commissioner of Income Tax, Andhra Pradesh vs Taj Mahal Hotel, and Commissioner of Income Tax, Gujarat vs Elecon Engineering Company Ltd., 96 I.T.R. 672.
On the other hand, counsel for the revenue pressed for our acceptance the view taken by the High Court that though the entire expenditure was of a capital nature it had brought into existence a non depreciable asset .
Having regard to the rival contentions that were urged before us it is clear that two questions really arise for determination in the case.
The first is whether the 'documentation service ' (supply of 5 complete sets of documents) agreed to be and actually rendered by the foreign collaborator to the assessee under the two agreements was incidental to the other services contemplated therein or whether it was the principal service for which mainly the payment of Rs. 1,60,000 was made by the assessee as a result whereof the assessee acquired all the technical know how requisite for the purpose of manufacturing the instruments in question? And secondly whether the said expenditure, which was entirely of a capital nature, brought into existence a depreciable asset? The answer to the former question depends upon the proper interpretation of the terms and conditions of the two 710 agreements while the answer to the latter depends upon whether a capital asset like the technical know how acquired in the shape of drawings, designs, charts, plans, processing data and other literature which formed the basis for the business of manufacturing the instruments in question would fall within the wide and inclusive definition of 'plant ' given in section 43(3) of the Income Tax Act, 1961.
Turning to the first question, having regard to the relevant terms of the two agreements we find it very difficult to accept the view concurrently expressed by the Tribunal and the High Court that the 'documentation service ' undertaken to be rendered by the foreign collaborator to the assessee was incidental or that the payment of Rs. 1,60,000 could not be regarded as being mainly for and by way of purchase price of the drawings, designs, charts, plans and all the documents comprised in 'documentation service ' specified in clause 3 of the agreements.
Such a view as will be shown presently runs counter to the express language contained in clauses 3 and 6 of the agreements.
The agreement dated 15.3.1961 relates to theodolites while the other dated 31.3.1961 relates to microscopes and it was not disputed before us that the terms and conditions of both are almost identical.
Clauses l and 2 thereof clearly set out the object and intendment of the two agreements; the object was to enable the purchaser (assessee) to manufacture the instruments of certain specifications and in that behalf under clause 2 the foreign collaborator was to grand to the assessee and the assessee was to acquire from the foreign collaborator the right to manufacture in India under the purchaser 's (assessee 's) trade mark and name, yet with indication of the Hungarian collaboration name S.E.H. under licence MOM Hungary the instruments of certain specifications and design and subsequent changes and modifications to this design introduced during the validity of the agreement and the right to sell these in India.
Under Clause 3 the foreign collaborator had to render to the assessee 'documentation service ' by supplying complete set of documents specified therein.
Clause 4 enjoined the foreign collaborator to train and impart the knowledge of the know how technique of the manufacturing of the instruments and for that purpose to accept two employees of the assessee at any one time for such period as may be desired by the assessee at the MOM Works at Budapest and give them full instructions concerning the manufacturing processes of the instruments covered by the agreements, the expenses in respect whereof were to be borne by the assessee, as also to depute to the assessee 's works suitable expert technicians not exceeding two in number for such period as 711 may be desired by the assessee up to half a year, the expenses in respect whereof (inclusive their travelling cost, salaries, lodging, boarding, etc.) were to be borne by the assessee.
Clause 5 provided for imparting technical assistance to the assessee relating to all matters falling within the scope of the agreement and in sub clause (c) thereof it was provided that if the assessee designed any new model or type of the instrument to suit the circumstances in India the assessee was entitled to have the supply of components being manufactured in Hungary and suiting the purpose on such terms and conditions as may be mutually agreed upon.
Clause 6 dealt with payment to be made by the assessee and the manner thereof to which we will refer in detail later.
Clause 10 indicated a five year 's period commencing from a certain date during which the agreements were to remain in force.
The rest of the Clauses dealing with assignability and other topics are not material.
On the issue under consideration Clauses 3 and 6(a) are very material and they run thus : "3.
Supplies : Vendor shall supply to Purchaser in accordance with the terms laid down in Clause 6 hereunder : (a) One complete set of up to date, correct and legibly reproducible manufacturing drawings and full processing documents of all components of the instrument and lists of parts in metric system in English language, this full documentation will comprise of; one complete list of up to date, correct and legibly reproducible drawings in metric system and English language of all jigs, fixtures, special tools, special guage and special machine used and built by MOM for manufacture, assembly inspection and testing of the component parts of the theodolites.
(b) One complete and up to date list, including complete specifications of raw material, required for the component parts of the theodolites covered by this agreement.
(c) One complete set of up to date layouts of all manufacturing operations and inspection performed by MOM works in Budapest during the manufacture and assembly of all components parts of the above Theodolite and containing all operational timings, details and know how for the economic production of the components.
712 (d) One complete set of up to date, correct and legibly reproducible assembly drawings with one set of the assembly instruction of the theodolites giving all tolerance for the final adjustment during assembly.
(e) One complete set of up to date, correct and legibly reproducible castings drawings for all cast component parts for the theodolites covered by this agreement.
(f) Delivery term of the above documentation will be six months after the payment of Rs. 10,000 according to clause 6/a has been effected in favour of vendor.
Payment : In consideration of the grand of these manufacturing and sales rights and the training and imparting of thorough and up to date total know how techniques of manufacturing theodolites type 17 S purchaser shall make the following payments to vendor.
(a) Lumpsum of Rs. 80,000 (Rupees eighty thousand only) for giving services defined as documentation listed as per clause 3 In the following manner.
(Emphasis supplied).
(Here follow sub clauses indicating various instalments and the manner of their payment, etc.) Reading clauses 3 and 6(a) together lt will appear clear that the rendition of documentation services specified in Clause 3 was really the main service to be rendered by the foreign collaborator to the assessee and the Clause 6(a) categorically states that the lumpsum payment of Rs. 80,000 (Rs. 1,60,000 under the two agreements) was for rendition of such service.
There is also a reference to this aspect of the matter at the end of Clause 5(c) where it has been stated that the purchaser is to pay the value of the full documentation in question namely Rs. 80,000 according to the stipulation of the present agreement. ' In fact the other services mentioned in clauses 4 and 5 appear to be incidental as some of these were undertaken to be rendered as and when desired by the assessee and for which the assessee had agreed to bear and pay the expenses separately.
The tenor of the agreements clearly shows that the various documents such as 713 drawings, designs, charts, plans, processing data and other literature included in documentation service, the supply whereof was undertaken by the foreign collaborator, more or less formed the tools by using which the business of manufacturing the instruments was to be done by the assessee and for acquiring such technical know how through these documents lump sum payment was made.
In other words, the payment of Rs. 80,000 under each of the agreements was principally for rendition of 'documentation service '.
It is, therefore, clear that this expenditure was incurred by the assessee as and by way of purchase price of the drawings, designs, charts, plans, processing data and other literature, etc.
comprised in 'documentation service ' specified in Clause 3.
The expenditure, therefore, was undoubtedly of a capital nature as a result whereof a capital asset of technical know how in the shape of drawings, designs, charts, plans, processing data and other literature, etc.
was acquired by the assessee.
The next question is whether the acquisition of such a capital asset is depreciable asset or not? Under section 32 depreciation allowance is, subject to the provisions of section 34, permissible only in respect of certain assets specified therein, namely, buildings, machinery, plant and furniture owned by the assessee and used for the purpose of business while section 43(3) defines 'plant ' in very wide terms saying "plant includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purpose of the business".
The question is whether technical know how in the shape of drawings, designs, charts, plans, processing data and other literature falls within the definition of 'plant '.
Counsel for the assessee urged that the expression 'plant ' should be given a very wide meaning and reference was made to a number of decisions for the purpose of showing how quite a variety of articles, objects or things have been held to be 'plant '.
But it is unnecessary to deal with all those cases and a reference to three or four decisions, in our view, would suffice.
The classic definition of 'plant ' was given by Lindley, L.J. in Yarmouth vs France, , a case in which it was decided that a cart horse was plant within the meaning of section 1(1) of Employers ' Liability Act, 1880.
The relevant passage occurring at page 658 of the Report runs thus : "There is no definition of plant in the Act: but, in Hits ordinary sense, it includes whatever apparatus is used by a business man for carrying on his business".
714 not his stock in trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business .
In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business.
In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton vs Maden & Ireland Ltd., , knives and lasts having an average life of three years used in manufacturing shoes were held to be plant.
In C.I.T. Andhra Pradesh vs Taj Mahal Hotel, , the respondent, which ran a hotel installed sanitary and pipeline fittings in one of its branches in respect whereof it claimed development rebate and the question was whether the sanitary and pipe line fittings installed fell within the definition of plant given in sec.
10(5) of the 1922 Act which was similar to the definition given in Sec.
43(3) of the 1961 Act and this Court after approving the definition of plant given by Lindley L.J. in Yarmouth vs France as expounded in Jarrold vs John Good and sons Limited, C.A. , held that sanitary and pipe line fittings fell within the definition of plant.
In Inland Revenue Commissioner vs Barly Curle & Co. Ltd., , the House of Lords held that a dry dock since it fulfilled the function of a plant must be held to be a plant.
Lord Reid considered the part which a dry dock played in the assessee company 's operations and observed : It seems to me that every part of this dry dock plays an essential part.
The whole of the dock is I think, the means by which, or plant with which, the operation is performed.
Lord Guest indicated a functional test in these words: In order to decide whether a particular subject is an 'apparatus ' it seems obvious that an enquiry has to be made as to what operation it performs.
The functional test is, therefore, essential at any rate as a preliminary 715 In other words the test would be: Does the article fulfil the function of a plant in the assessee 's trading activity Is it a tool of his trade with which he carries on his business? If the answer is in the affirmative it will be a plant.
If the aforesaid test is applied to the drawings, designs, charts, plans, processing data and other literature comprised in the 'documentation service ' as specified in Clause 3 of the agreement it will be difficult to resist the conclusion that these documents as constituting a book would fall within the definition of 'plant '.
It cannot be disputed that these documents regarded collectively will have to be treated as a 'book ', for, the dictionary meaning of that word is nothing but a a number of sheets of paper, parchment, etc.
with writing or printing on them, fastened together along one edge, usually between protective covers; literary or scientific work, anthology, etc., distinguished by length and form from a magazine, tract, etc.
(vide Webster 's New World Dictionary).
But apart from its physical form the question is whether these documents satisfy the functional test indicated above.
Obviously the purpose of rendering such documentation service by supplying these documents to the assessee was to enable it to undertake its trading activity of manufacturing the theodolites and microscopes and there can be no doubt that these documents had a vital function to perform in the manufacture of these instruments; in fact it is with the aid of these complete and upto date sets of documents that the assessee was able to commence its manufacturing activity and these documents really formed the basis of the business of manufacturing the instruments in question.
True, by themselves these documents did not perform any mechanical operations or processes but that cannot militate against their being a plant since they were in a sense the basic tools of the assessee 's trade having a fairly enduring utility, though owing to technological advances they might or would in course of time become obsolete.
We are, therefore, clearly of the view that the capital asset acquired by the assessee, namely, the technical know how in the shape of drawings, designs charts, plans, processing data and other literature falls within the definition of 'plant ' and therefore a depreciable asset.
Counsel invited our attention to the decision in Commissioner of Income Tax, Gujarat vs Elecon Engineering Co. Ltd., , where the Gujarat High Court has, after exhaustively reviewing the case law on the topic, held that drawings and patterns which constitute know how and are fundamental to the assessee 's manufacturing business are 'plant '.
We agree and approve the said view.
716 Having regard the aforesaid discussion the question framed A at the commencement of this judgment is answered in favour of the assessee to the effect that the payment of Rs. 1,60,000 made by the assessee to the foreign collaborator was attributable wholly towards the acquisition of a depreciable asset.
We allow the appeals but in the circumstances direct the parties to bear and pay their respective costs.
S.R. Appeal allowed.
| A conspiracy to commit criminal breach of trust in respect of the funds of a company by utilising the same to purchase the controlling block of shares of the company itself for the benefit of the appellants was alleged to have been entered into between December 1, 1948, and January 31, 1949.
It was the prosecution case that the modus operandi was to screen the utilisation of these funds by showing them as having been advanced for legitimate purposes and invested on proper security but in fact utilising the same for payment to the appellants.
One of the main issues was whether the loans by way of advance of the funds of the company on January 20, I949, were genuine transactions or bogus or makebelieve, and the question was whether the evidence relating to the further transactions entered into outside the period of the conspiracy in 1949 and I950 with a view to the screening of the original transactions, was admissible in law.
Held: (1) In relation to the main purpose of the prosecution viz., proof of the bogus character of the transactions of January, I949, the transactions of I949 and I95o entered into outside the period of conspiracy must, having regard to the ramifications, be taken to be integrally connected and relevant to make out their bogus character, though such evidence may necessitate reference to and narration of the acts of the conspirators beyond the period of conspiracy.
(2) The conduct of each individual co conspirator including his acts, writings and statements irrespective of the time to which it relates can be relied on by the prosecution to show the criminality of the intention of the individual accused with reference to his proved participation in the alleged conspiracy to rebut a probable defence that the participation, though proved, was innocent.
Such evidence is admissible under section 14 Of the Indian Evidence Act.
Makin vs The Attorney General for New South Wales, L. R. ; , relied on.
162 Per Jagannadhadas J.
Under section 10 of the Indian Evidence Act the evidence of acts, statements or writings of a co conspirator either under trial or not on trial but outside the period of conspiracy would not be admissible against the other conspirators in proof of the specific issue of the existence of the conspiracy on the authority of Mirza Akbar vs The King Emperor, (1940) L.R. 67 I.A. 336.
|
N: Criminal Appeal No. 749 Of 1980.
Appeal by special leave from the judgment and order dated the 5th March, 1980 of the Delhi High Court in Criminal Misc.
(Main) No. 501 of 1974.
B.P. Maheshwari for the Appellant.
896 V.S. Desai and Arvind Minocha for the Respondents.
The Judgment of the Court was delivered by PAZAL ALI, J.
This appeal by special leave is directed against a judgment dated 5.3.1980 of the Delhi High Court by which the High Court quashed the proceedings taken by the Municipal Corporation of Delhi against respondent Nos.
I to 11.
This is a case where the facts are almost identical with the facts of Criminal Appeal No. 701 of 1980 which we have decided today, with a vital difference which we shall point out hereafter.
In this case also, Shri M.M. Gupta, Food Inspector in the Municipal Corporation of Delhi purchased a sample of milk toffees from shop of Jagdish Chander Mehta situate at Lajpat Nagar, New Delhi.
The milk toffees which were purchased by the food inspector were found to be adulterated by the Public Analyst.
The toffees in this case were manufactured by Hindustan Sugar Mills, Sl, Mahatma Gandhi Road, Bombay.
A complaint was filed before the Metropolitan Magistrate against accused Nos.
I to 12 under sections 7116117 of the Prevention of Food Adulteration Act mentioning the facts stated above.
The High Court was of the view that the complaint did not disclose any offence and adopting a similar line of reasoning, as in criminal appeal No. 701 of 1980, quashed the proceedings against respondent Nos.
I to 11.
We have already dealt with the law on the subject in our decision in criminal appeal No. 701 of 1980, a copy of which is placed on the file of this case The relevant allegations against the accused respondents are to be found in para S of the complaint which may be extracted thus: "5, That accused Ram Kishan Bajaj is the Chairman, accused R.P. Neyatia is the Managing Director and accused Nos. 7 to 12 are the Directors of the Hindustan Sugar Mills Ltd. and were incharge of and responsible to it for the con duct of its business at the time of commission of offence.
" Unlike the other case, para S of the complaint of this case gives complete details of the role played by the respondents and the extent of their liability.
It is clearly mentioned that Ram Kishan Bajaj is the Chairman and R.P. Neyatia is the Managing Director and respondents 7 to 11 are the Directors of the Mill and were incharge of 897 and responsible for the conduct of its business at the time of the commission of the offence whereas in the other case the complaint has merely drawn a presumption without any averment.
In the instant case, a clear averment has been made regarding the active role played by the respondents and the extent of their 1 liability.
In this view of the matter, it cannot be said that para 5 of the complaint is vague and does not implicate respondents I to 11.
As to what would be the evidence against the respondents is not a matter to be considered at this stage and would have to be proved at the trial.
We have already held that for the purpose of quashing the proceedings only the allegations set forth in the complaint have to be seen and nothing further.
From a perusal of the various clauses of the complaint, including para 5, it is quite clear that a prima facie case for summoning the accused has been made out and the High Court was absolutely wrong in holding that the allegations made in para S are vague.
The High Court failed to consider that the allegations were quite clear and explicit so as to be sufficient for taking cognizance of the offence against the accused.
Further details would have to be given in the shape of evidence when the trial proceeds and in view of the clear allegations made in para 5 of the complaint, we are not in a position to agree with the High Court that it is a fit case in which it should have exercised its discretion under section 482 of the Code of Criminal Procedure, 1973 in order to quash the proceedings against the accused respondents.
For these reasons, therefore, we allow this appeal, set aside the judgment of the High Court and restore that of the Metropolitan Magistrate as a result of which all the accused will now be summoned and placed for trial in accordance with law.
H.L.C. Appeal allowed.
| The facts of this case were almost identical with that of Municipal Corporation of Delhi vs Ram Kishan Rohtagi and Ors.
(the case reported immediately before this one).
However Paragraph 5 of the complaint filed in this case was in the following terms: "That accused Ram Kishan Bajal is the Chairman, accused R.P. Neyatiya is the Managing Director and accused Nos.
7 to 12 are the Directors of the Hindustan Sugar Mills Ltd. and were incharge of and responsible to it for the conduct of its business at the time of commission of offence.
" Adopting a line of reasoning similar to the one adopted by it in the earlier case, the High Court had quashed the proceeding against the accused (respondents here).
After pointing out that the law on the subject had been dealt with in the earlier case and allowing the appeal, ^ HELD: In this case a clear averment has been made in Para 5 of the complaint regarding the active role played by the respondents and the extent of their liability and a prima facie case for summoning the accused has been made out.
It cannot therefore be said that Paragraph 5 of the complaint is vague and does not implicate the respondents.
As to what would be the evidence against the respondents is not a matter to be considered at this stage and would have to be proved at the trial.
The High Court went wrong in holding that tho allegations made Paragraph 5 were vague.
[891 B D]
|
vil Appeal Nos. 9 15 of 1986 etc.
From the Judgment and Order dated 4.9.1985 of the Andhra Pradesh High Court in W.P. Nos.
8120, 8121, 7932, 8095, 8032, 8107 and 8 109 of 1984.
B. Datta, Additional Solicitor General, P.P. Rao, C.V. Subba Rao, R.P. Srivastava, B. Parthasarthi, K.V. Sreekumar, D. Vidyanandam, M.K.D. Namboodary, T.V.S.N. Chaff, Ms. V. Grover, Ms. Anita, W.A. Qadri, A. Subba Rao, A.T.M. Sampath, R. Venkataramani, R.A, Perumal, S.M. Garg and section Markandeya for the appearing parties.
The Judgment of the Court was delivered by CHINNAPPA REDDY, J.
The question raised in these appeals is whether an 'establishment in the public sector ' or an 'establishment in the private sector ' as defined in the may make appointments to posts to which the Act applies, of persons not sponsored by the Employment Ex changes? A further question is whether the Act covers Gov ernment establishments also? A Division Bench of the High Court of Andhra Pradesh has held that the Act has no appli cation to Government establishments, that the Act casts no obligation either on the public sector establishment or on the private sector establishment to make the appointments from among candidates sponsored by the 913 Employment Exchanges only and that any insistence that candidates sponsored by the Employment Exchanges alone should be appointed would be contrary to the right guaran teed by articles 14 and 16 of the Constitution.
The learned Additional Solicitor General appearing for the Union of India argued that the object and the scheme of the Employ ment Exchanges (Compulsory Notification of Vacancies) Act and the instructions issued by the Government of India from time to time left no option to the employers but to confine their field of choice to candidates sponsored by the Employ ment Exchanges.
It was argued that such insistence that appointments should be made from candidates sponsored by the Employment Exchanges only did not offend articles 14 and 16 of the Constitution.
He also argued that the Act was applicable to Government Establishments also.
We may refer to the provisions of the Employment Ex changes (Compulsory Notification of Vacancies) Act, 1959 without further ado.
The title of the Act itself suggests that the compulsion is in regard to notifying of vacancies only and nothing more.
The preamble to the Act, like the title of the Act, also does not 'suggest any compulsion in the making of appointments, but only in the notifying of vacancies.
The preamble says "An Act to provide for the compulsory notification of vacancies to employment ex changes." Section 2(e), (f) and (g) defines "establishment", "establishment in public sector" and "establishment in private sector" as follows: "(e) "establishment" means (a) any office, or (b) any place where any industry, trade, business or occupation is carried on; (f) "establishment in public sector" means an establishment owned, controlled or managed by (1) the government or a department of the Government; (2) A Government company as defined in section 617 of the ; (3) A corporation (including a cooperative society) established by or under a Central, Provincial or State 914 Act, which is owned, controlled or managed by the Government; (4) A local authority; (g) "establishment in private sector" means an establishment which is not an estab lishment in public sector and where ordinarily twenty five or more persons are employed to work for remuneration;" The High Court thought that the definition of "establishment in public sector" as meaning an establishment owned, con trolled or managed by the Government or a Department of the Government indicated that an establishment in public sector was something different from the Government or a Department of Government and did not include the Government or Depart ment of the Government.
It had to be something which could be owned, controlled or managed by the Government or a department of the Government.
The High Court also thought that the expression 'public sector ' was used in contradic tion to 'private sector ' and that it could not include offices of the Government.
The expression would only take in an agency or instrumentality of the State, but not the State itself.
We are unable to agree with the conclusion of the High Court on this part of the case.
If the definition of 'establishment ' which includes an 'office ' is read alongside the definition of 'establishment in public sector ', it will be clear that Government offices are also included in the expression 'establishment in public sector '.
That is the interpretation which the Government itself is advancing before us and that is how the Government has always under stood the provision during these three decades as will be evident from the instructions issued by the Government from time to time to which we shall be referring later in the course of our judgment.
We are unable to agree with the view of the High Court that the Act is not applicable to Govern ment establishments.
Section 3 of the Act specifies posts, vacancies to which the Act does not apply.
Section 4 provides for the notifica tion of vacancies to employment exchanges.
It is desirable to extract the whole of sec.
4 which is as follows: "4.
(1) After the commencement of this Act in any State or area thereof, the employer in every establishment in public sector in that State or area shall, before filling up any vacancy in any employment in that establish ment, 915 notify that vacancy to such employment ex changes as may be prescribed.
(2) The appropriate Government, may, by notification in the Official Gazette, require that from such date as may be speci fied in the notification, the employer in every establishment in private sector or every establishment pertaining to any class or category of establishments in private sector shall, before filling up any vacancy in any employment in that establishment notify that vacancy to such employment exchanges as may be prescribed, and the employer shall thereupon comply with such requisition.
(3) The manner in which the vacancies referred to in subsection (1) or sub section (2) shall be notified to the employment exchanges and the particulars of employments in which such vacancies have occurred or are about to occur shall be such as may be prescribed.
(4) Nothing in sub sections (1) and (2) shall be deemed to impose any obligation upon any employer to recruit any person through the employment exchanges to fill any vacancy merely because that vacancy has been notified under any of the sub sections.
" Section 5 deals with the duty of the employers to furnish information and returns in prescribed forms.
Section 6 provides for official access to records and documents.
Section 7 provides for penalties.
Section 8 deals with cognizance of offences.
Section 9 provides for protection of action taken is good faith.
Section 10 vests the rule making power in the Central Government.
It is evident that there is no provision in the Act which obliges an employer to make appointments through the agency of the Employment Exchanges.
Far from it, sec.
4(4) of the Act, on the other hand, makes it explicitly clear that the employer is under no obligation to recruit any person through the Employment Exchanges to fill in a vacancy merely because that vacancy has been notified under sec.
4(1) or sec.
In the face of sec.
4(4), we consider it utterly futile for the learned Additional Solicitor General to argue that the Act imposes any obligation on the employ ers apart from notifying the vacancies to the Employment Exchanges.
The learned Additional Solicitor General invited our attention to the speech of the Minister of Labour and 916 Employment and Planning (Shri Nanda) made at the time of the introduction of the Employment Exchanges (Compulsory Notifi cation of Vacancies) Bill.
Far from being of any assistance to the learned Addititional Solicitor General, the speech appears to be against his submission.
In his speech, the Minister quoted from the report of the Training and Employ ment Services Organisation Committee and observed that the recommendation of the Committee offered a full explanation of the provisions of the Bill.
The recommendation of the Committee which he quoted was, "Though we have not, for the present, recommended compulsion on private employers to recruit through the employment exchanges, we recommend that they be required on a compulsory basis to notify to the Exchanges all vacancies, other than vacancies for unskilled categories, vacancies of very temporary duration and vacan cies proposed to be filled through promotion.
" The Minister further said, "The main thing is that an obligation is being placed that after this legislation becomes operative, from that date, the employer in every establishment in the public sector shall, before filling up any vacancy in any employ ment in that establishment, notify that vacancy to such Employment Exchanges as may be prescribed.
And so far as the private sector is concerned, there is this further qualifi cation that the Government concern may specify by notifica tion that the employer in every establishment in private sector or every establishment pertaining to any class or category of establishments in private sectors shall, before filling up any vacancy in any employment in that establish ment, notify that vacancy to such Employment Exchanges as may be prescribed.
This is the kernel of this provision.
This is the main object, that is, an obligation placed on the employer to notify the vacancies that may occur in their establishment before filling these vacancies.
" The Minister was conscious that there was a likelihood of the Bill being misunderstood as compelling the employers to make appoint ments through the Employment Exchanges only.
He clarified the position saying, "The misunderstanding is as if this Bill gives power to the Government to compel the employers to recruit only such persons as are submitted by the employ ment exchanges.
That is not so.
This compulsion extends only to notification of vacancies.
Naturally the employer has to consider the names which are submitted by the employment exchanges but there is no compulsion that they must restrict to the choice only to the least that is submitted to them.
Of course, there is also the objection from the other side that it may not go far enough.
We believe that even this will make things very much better.
In any case, when the Committee reported, they also suggested this much advance.
At present, they said, we should have only compulsory noti fication, but, not compel the emp 917 loyers to recruit only out of the least that is sent by the employment exchanges.
" As we said the speech of the Minister, at the time of the introduction of the Bill, is totally destructive of the contention of the learned Additional Solicitor General that the employers arc under an obligation to recruit persons for appointment through the Employment Exchanges only.
The learned Additional Solicitor General requested us to give a purposive interpretation to the provisions of the Act and insist that employers, in making appointments, should re strict their field of choice to candidates sponsored by the employment exchanges.
We are unable to appreciate the argu ment since there is no provision of the Act which requires interpretation by us and which we may reasonably interpret as compelling the employer to appoint persons sponsored by the employment exchanges.
On the other hand, we have already referred to sec.
4(4) which is explicit that there is no such obligation on the part of the employer.
We also notice that the object of the Act is not to restrict the field of choice in any particular manner, but to enlarge the field of choice.
That is why in his introductory speech, the Minister said," . . a large number of employers, particularly in similar industrial establishments and in construction works, do not employ any scientific method, but depend for their supply of labour on agents or recruit in a haphazard manner from amongst these assembled at factory gates or at works sites.
The methods adopted are not always dictated by a consideration of efficient service, but as more a matter of bestowing patronage and favour.
This applies in varying degrees to a large number of employers.
" The Minister dis cussed the existing position and anticipated position in the following words: "The Act of notification of vacancies has important consequences.
In the first place, so far as the employer is concerned, he will be placed in a position to have a much wider choice for the purpose of selection.
Now, what is the present position? Any person knocks at the gate of the factory or the mill or other establishment and from those few who are there they choose.
Now it would be possible for them to have a wider area of selection.
The names of so many others who may not be able to go and knock at every gate, can be submitted and out of them, the best can be selected.
So far as the quoting of selection is concerned, it should improve because of the wider range of choice.
On the side of the worker certainly it means a more equitable distribu 918 tion of employment opportunities.
It should not be necessary for a person to be all the day moving from place to place.
It should be sufficient for him to register at a place, give all the particulars about his qualifica tions and then he should be sure that at any rate, his name will be considered along with other names and there will be some regard for fitness in the choice of people who enter these new places for employment.
" It is, therefore, clear that the object of the Act is not to restrict, but to enlarge the field of choice so that the employer may choose the best and the most efficient and to provide an opportunity to the worker to have his claim for appointment considered without the worker having to knock at every door for employment.
We are, therefore, firmly of the view that the Act does not oblige any employer to employ those persons only who have been sponsored by the employment exchanges.
The next question for consideration is whether the instructions issued by the Government from time to time have the effect of compelling the employers to restrict their field of choice to candidates sponsored by the employment exchanges.
We may straightaway rarer to some of the instruc tions on which reliance was placed by the learned Additional Solicitor General.
In O.M. No. 14/11/64 Estt.
(D) dated March 21, 1964, the Ministry of Home Affairs addressed all the Ministries regarding recruitment of staff through the agency of the National Employment Service and the utilisa tion of Employment Exchanges by quasi government institu tions and statutory organisations.
It is enough if we ex tract paragraphs 1, 4 and 5 of this communication which are as follows: "1.
The undersigned is directed to say that in paragraph 6 of this Ministry 's office Memoran dum No. 71/40 DGS (Apptts) dated the 11th December, 1949 (copy enclosed) it was laid down that all vacancies in Central Government Establishments, other than those filled through the Union Public Service Commission should be notified to the nearest Employment Exchange and that no Department or office should fill any vacancy by direct recruitment unless the Employment Exchanges certified that they were unable to supply suitable, candi dates.
Subsequently in this Ministry 's Office Memorandum Nos.
71/49 DGS (Apptts) dated 30th January, 1951 and 71/222/56 CS(C) dated the 919 14th December, 1956 (copy enclosed).
The Ministry of Finance etc. were requested to issue immediate instructions to all quasi Government institutions and statutory Organi sations with which they were concerned asking them to fall in line, as far as possible, with the Central Government establishments in the matter of recruitments, by suitably amending their recruitment rules or adopting Resolu tions to achieve this object if necessary.
The Ministries were also requested to impress upon these institutions that it was in their own interest as well as in the interest of the country as a whole that recruitment should be made through the Employment Exchanges, as a large number of experienced and trained hands were available on their registers and the need for tapping other sources of recruitment should arise only if the Employment Exchange has certified that they were unable to nomi nate suitable recruits from their registers.
. . . . . . . . . . . . . . . . . 4.
Under the EE (CNV) Act, recruitment of staff through the Employment Service is volun tary so far as the private sector is con cerned.
Even so, efforts are made by the Employment Service to persuade the private sector to accept candidates sponsored by the Employment Exchanges.
The Directorate General of Employment and Training are placed in a very embarrassing situation when they have to approach the State Governments and establish ments in the private sector to utilise the Employment Service in filling up the vacan cies, when some establishments in the public sector do not recognise the Employment Service as the normal channel of recruitment.
It is accordingly requested that the Minis try of Finance etc., may issue instructions to all quasi Government institutions and Statuto ry Organisations with which they are concerned requiring them to notify vacancies in the manner and form prescribed in Rule 4 of the EE(CNV) Rules 1960 to the prescribed Employ ment Exchange and to fall in line with the Central Government Departments in the recruit ment of staff through the agency of the Em ployment 920 service.
The need for issuing advertisements for inviting applications or tapping other sources of recruitment should be considered only if the Employment Exchanges issue non availability certificates.
A copy of the instructions issued by the Ministry of Finance etc., may kindly be endorsed to the Ministry of Home Affairs and the Directorate General of Employment and Training.
" It will be noticed that in order to give effect to such instructions in the case of quasi Government institutions and statutory organisations, it would be necessary to suit ably amend the recruitment rules or adopt resolutions to achieve that object.
This is so mentioned in para 1.
In Office Memorandum No. 14/22/65 Estt.
(H) dated June 12, 1968, the Ministry of Home Affairs informed all the other Ministries: "The undersigned is directed to say that in paragraph 6 of this Ministry 's O.M. No. 71/49/DGS (Apptt) dated the 11th December, 1949, it was laid down that all vacancies in Central Government Establishments, other than those filled through the Union Public Service Commission, should be notified to the nearest Employment Exchange and that no Department or Office should fill any vacancy by direct recruitment unless the Employment Exchange certified that they were unable to supply candidates." In office Memorandum No. 14024/2/77 Estt(D) dated April 12, 1977, the Department of Personnel addressed all the Minis tries/Departments and said, "As the Ministry of Agriculture and Irrigation, etc. are aware, in accordance with the instructions issued by the Central Govern ment (vide marginally noted communications), all vacancies arising under Central Government Offices/establishments (including quasi Gov ernment institutions and statutory organisa tions), irrespective of the nature and dura tion (other than those filled through the Union Public Service Commission), are not only to be notified to, but also to be filled through, the Employment Exchange alone and other permissible sources of recruitment can be tapped only if the Employment Exchange concerned issued a non availability ' certifi cate.
There can be no departure from this recruitment procedure unless a different arrangement in this regard has been previously 921 agreed to in consultation with this Department and the Ministry of Labour (Directorate Gener al of Employment and Training).
Similar in structions are also in force requiring vacan cies against posts carrying a basic salary of less than Rs.500 p.m. in Central Public Employment Exchanges.
" It is clear that it is the desire of the Government of India that all Government Departments, Government Organisa tion and statutory bodies should adhere to 'the rule that not merely vacancies should be notified to the Employment Exchanges, but the vacancies should also be filled by candi dates sponsored by the Employment Exchanges.
It was only when no suitable candidates were available, then other sources of recruitment were to be considered.
While the Government is at perfect liberty to issue instructions to its own departments and organisations provided the instruc tions do not contravene any constitutional provision or any statute, these instructions cannot bind other bodies which are created by statute and which function under the authori ty of statute.
In the observation of any statutory prescrip tion the statutory authority may however adopt and follow such instructions if it thinks fit.
Otherwise, the Govern ment may not compel statutory bodies to make appointments of person from among candidates sponsored by employment ex changes only.
The question, of course, does not arise in the case of private employers which cannot be so compelled by any instructions issued by the Government.
The further question is whether the instruction issued by the Government that in the case of Government Departments the field of choice should, in the first instance, be re stricted to candidates sponsored by the employment exchanges offend articles 14 and 16 of the Constitution.
Shri P. Parmesh wara Rao, learned counsel appearing for some of the respond ents strenuously urged that such a restriction would offend the equality clauses of the Constitution, namely, articles 14 and 16.
He urged that when Parliament had gone into the question and decided that there should be no compulsion in the matter of appointment by way of restriction of the field of choice, it was not open to the Government to impose such compulsion.
He argued that it would be unreasonable to restrict the field of choice to these sponsored by the employment exchanges.
In a country so vast as India, in a country where there was so much poverty, illiteracy and ignorance, it was not fight that employment opportunities should necessarily be channelled through the employment exchanges when it is not shown that the network of employ ment exchanges is so wide, that it reaches all the 922 corners of this vast country.
He argued that it is futile to expect that persons living in distant places could get themselves registered with employment exchanges situated far away.
The submission of Shri Parmeshwara Rao is indeed appealing and attractive.
Nonetheless, we are afraid we cannot uphold it.
The object of recruitment to any service or post is to secure the most suitable person who answers the demands of the requirements of the job.
In the case of public employment, it is necessary to eliminate arbitrari ness and favouritism and introduce uniformity of standards and orderliness in the matter of employment.
There has to be an element of procedural fairness in recruitment.
If a public employer chooses to receive applications for employ ment where and when he pleases, and chooses to make appoint ments as he likes, a grave element of arbitrariness is certainly introduced.
This must necessarily be avoided if articles 14 and 16 have to be given any meaning.
We, therefore, consider that insistence of recruitment through employment exchanges advances rather than restricts the rights guaran teed by articles 14 and 16 of the Constitution.
The submission that employment exchanges do not reach every where applies equally to whatever method of advertising vacancies is adopted.
Advertisement in the daily Press, for example, is also equally ineffective as it does not reach everyone desiring employment.
In the absence of a better method of recruitment, we think that any restriction that employment in Government Departments should be through the medium of employment exchanges does not offend articles 14 and 16 of the Constitution.
With this modification of the judgment of the High Court, the appeals and the special leave petitions are disposed of.
No orders are necessary in the writ petition.
P.S. S Appeals dis posed of.
| The predecessor in interest of the appellants, namely, Babulal, purchased a house in the year 1947 from the sons of one Mannulal.
The appellants and the respondents No. 6 to 8 are the sons of the other three brothers of Mannulal.
In the year 1976 the respondents Nos. 2 to 5 started reconstructing or renovating their house and in the course of digging the plinth a treasure consisting of gold and silver ornaments and currency notes was found.
They intimated the discovery of the treasure to the Collector, who issued a notification under section 5 of the Indian Treasure Trove Act, 1878.
Respond ents Nos. 2 to 5, the appellants and the respondents Nos.
6 to 8 flied claims before the Collector.
The Collector held that the respondents Nos. 2 to 5, the finders of the treas ure, are the owners of the house from where the treasure was found and permitted them under section 8 to institute a suit to establish their right before February 22, 1979.
The respondents Nos. 2 to 5 instituted a suit for decla ration of their title to the treasure without making the other claimants before the Collector parties to the suit.
On an application filed under Order I, Rule 10 of the Code of Civil Procedure by the appellants and respondents Nos.
6 to 8, the District Judge made them defendants in the suit.
Thereafter, they filed their written statement, denying the claim 01 ' the respondents Nos. 2 to 5 to the treasure and claimed the title thereof to them.
After the filing of the written statement, the appel lants flied a counter claim claiming title to the treasure.
The respondents Nos. 2 to 5 156 filed an application praying that the counter claim should be dismissed contending that it was barred by limitation as prescribed in section 14 of the Act and that it was also not maintainable under Order VIII, Rule 6A(1) of the Code 01 ' Civil Procedure.
The District Judge dismissed the counter claim holding that it was barred by section 14 of the Act.
In the Revision, the High Court upheld the order of the District Judge and further held that the counter claim having been filed after the filing of the written statement, was not maintainable under Order VIII, Rule 6A(1) of the Code of Civil Procedure.
Allowing the Appeal to this Court, HELD: 1.
The order of the District Judge and the Judg ment of the High Court are set aside.
The District Judge is directed to proceed with the hearing of the suit and the counter claim in accordance with law.
[164F G] 2.
Under the scheme of the Indian Treasure Trove Act, 1878 two kinds of suits can be filed at two stages, namely, one under section 8 and the other under section 14.
Section 8 provides that if the Collector has reason to believe that the treas ure was hidden by any person appearing before the Collector within one hundred years or by some other person under whom such person claims, the Collector shall adjourn the hearing for such period as he deems sufficient to allow the claimant to institute a suit to establish his right to the treasure.
[161G H; 162A] 3.
On the other hand, the question of filing a suit under section 14 will not arise unless the Collector makes a declaration under section 9 that the treasure is ownerless.
Such a declaration under section 9 will be made by the Collector if he sees no reason to believe that the treasure was not hidden within one hundred years or if no suit is instituted under section 8 within the period for which the hearing is adjourned by the Collector or if the plaintiff 's claim is rejected.
[162B] 4.
If no such contingencies as mentioned in section 9 take place, the Collector will have no jurisdiction to make a declaration that the treasure is ownerless.
If, however, any of such contingencies happens and the Collector makes a declaration under section 9 and two or more persons have appeared before the Collector each claiming the ownership of the place where such treasure was found or the finder of the treasure disputes the right of any person who has so ap peared and claimed, the Collector shall make an order under section 13 staying the proceedings with a view to the matter being enquired into by a Civil Court.
157 5.
The object of an enquiry as to the ownership of the place by the Civil Court is necessary inasmuch as section 10 of the Act provides that when a declaration has been made in respect of any treasure under section 9, such treasure shall either be delivered to the finder or be divided between him and the owner of the place in which it has been round.
[162F] 6.
A suit under section 14 relates to the establishment of the ownership of the place where the treasure was found for the purpose of division of the treasure between the finder and the owner of the place and that such a suit has to be filed within one month from the date of such order to obtain a decree declaring his right after the Collector had de clared the treasure to be ownerless under section 9 after making a claim before the Collector under section 13.
The words "such order" in section 14, refer to the order passed by the Collector under section 13.
[163B] 7.
Section 8 and section 13 and section 14 contemplate two differ ent situations.
While under section 8 the suit has to be filed within the period during which the hearing stands adjourned, the suit under section 14 has to be filed within one month of the order of the Collector under section 13 of the Act.
[163C D] 8.
To hold that suits under section 8 and section 13 are both governed by the limitation prescribed by section 14, will be to do violence to the provisions of the Act and the clear intention of the Legislature as indicated in the provisions.
[163E] 9.
In the instant case, as the respondents Nos. 2 to 5 have instituted the suit within the period during which the hearing before the Collector stood adjourned under section 8, the question of making a declaration by the Collector under section 9 of the Act does not arise and, consequently, there is no scope for filing any suit under section 14 of the Act.
Thus section 14 has no manner of application to a suit filed under section 8 of the Act.
[163G H; 164A] 10.
Rule 6A(1) of Order VIII of Code of Civil Procedure does not bar the filing of a counter claim by the defendant after he had filed the written statement.
What is laid down under Rule 6A(1) is that a counter claim can be filed, provided the cause of action had accrued to the defendant before the defendant had delivered his defence or before the time limited for delivering his defence has expired, whether such counter claim is in the nature of the claim for damages or not.
[164B C] 11.
The High Court has misread and misunderstood the provision of Rule 6A(1) in holding that as the appellants had filed the counter 158 claim after the filing of the written statement, the coun ter claim was not maintainable.
Under Article 113 of the , the period limitation of three years from the date the right to sue accrues, has been provided for any suit for which no period of limitation is provided elsewhere in the Schedule.
in the instant case, the counter claim has been filed by the appellants within three years and as the cause of action for the counter claim had arisen before the filing of the written statement, the counter claim was, therefore quite maintainable.
[164C E]
|
L JURISDICTION: Writ Petitions NOS.
1297 98, 1407 of 1979, 4995 97 of 1980 and 402 of 1981.
375 (Under Article 32 of the Constitution of India.) F.S. Nariman, K.N. Bhat, B. Veerbhadrappa, H.S. Renuka Prasad, Vijay Kumar Verma, Nanjappa Ganpathy and P.K Manohar for the Petitioners in W.P. Nos.
1297 98, of 1979.
K Chennabasappa, S.S. Javali and B.R. Agarwal for the Petitioners in W.P. No. 1407 of 1979.
K.K Venugopal and C.S. Vaidyanathan for the Petitioners in W.P. Nos.
4995 97180 & 402 of 1981.
R.K. Garg and A.V. Rangam, for the Respondents in W.P. Nos.
4995 97180 and 402 of 1981.
P.H. Parekh and Gautam Philip, for the Intervener Akhil Bharat Anusuchit Jati in W.P. Nos.
1297 98 of 1979.
L3 L.G. Havenur, K.M.K. Nair and Narayana Nettar for the Intervener President Karnataka Legislative in W.P. No. 1407 of 1979.
K Rajendra Chaudhury for the Intervener Dravida Kazhagam in W.P. No. 402 of 1981.
KM.K. Nair for the Intervener All India Nayaka Sangh in W.P. No. 1297 98 and 1407 of 1979.
The following Judgments were delivered: CHANDRACHUD, C.J. : My learned Brethren have expressed their respective points of view on the policy of reservations which, alas, is even figuratively, a burning issue to day.
We were invited by the counsel not so much as to deliver judgments but to express our opinion on the issue of reservations; which may serve as a guideline to the Commission with the Government of Karnataka proposes to appoint, for examining the question of affording better employment and educational opportunities to Scheduled Castes, Scheduled Tribes and other Backward Classes.
A somewhat unusual exercise is being undertaken by the Court in giving expression to its views without reference to specific facts.
But, institutions profit by well meaning innovations.
The facts will appear before the Commission and it 376 will evolve suitable tests in the matter of reservations.
I cannot resist expressing the hope that the deep thinking and sincerity which has gone into the formulation of the opinions expressed by my learned Brethren will not go waste.
The proposed Commission should give its close application to their weighty opinions.
Mine is only a skeletal effort.
I reserve the right to elaborate upon it, but the chances of doing so are not too bright.
I would state my opinion in the shape of the following pro positions: 1 The reservation in favour of scheduled castes and scheduled tribes must continue as at present, there is, without the application of a means test, for a further period not exceeding fifteen years.
Another fifteen years will make it fifty years after the advent of the Constitution, a period reasonably long for the upper crust of the oppressed classes to overcome the baneful effects of social oppression, isolation and humiliation.
The means test, that is to say, the test of economic backwardness ought to be made applicable even to the Scheduled Castes and Scheduled Tribes after the period mentioned in (1) above.
It is essential that the privileged section of the underprivileged society should not be permitted to monopolise preferential benefits for an indefinite period of time.
In so far as the Other Backward Classes are concerned, two tests should be conjunctively applied for identifying them for the purpose of reservations in employment and education: One, that they should be comparable to the Scheduled Castes and Scheduled Tribes in the matter of their backwardness; and two, that they should satisfy the means test such as a State Government may lay down in the context of prevailing economic conditions.
The policy of reservations in employment, education and legislative institutions should be reviewed every five years or so.
That will at once afford an oppor 377 tunity (i) to the State to rectify distortions arising out of particular facets of the reservation policy and (ii) to the people, both backward and non backward, to ventilate their views in a public debate on the practical impact of the policy of reservations.
DESAI, J `India embraced equality as a cardinal value against a background of elaborate, valued, and clearly perceived inequalities. '(l) 'article 14 guaranteed equality but the awareness of deep rooted inequality in the society reflected in article 15 and 16.
Fifteen months of the working of the Constitution necessitated amplification of article 15(3) so as to ensure that any special provisions that the State may make for the educational, economic or social advancement of any backward class citizen, may not be challenged on the ground of being discriminatory. '(`2) Sec. 2 thereof provided for addition to sub Art (4) of article 15 For a period of three and a half decades, the unending search for identifying socially and educationally backward classes of citizens has defied the policy makers, the interpreters of the policy as reflected in statutes or executive/administrative orders and has added a spurt in the reverse direction, namely, those who attempted to move upward/(Pratilom) in the social hierarchy have put the movement in reverse gear so as to move downwards (Anulom) in order to be identified as a group or class of citizens socially and educationally backward.
As the awareness of concessions and benefits grows with consequent frustration on account of their non availability confrontation develops amongst various classes of society.
The Constitution promised an egalitarian society.
At the dawn of independence Indian Society was a compartmentalised society comprising groups having distinct and diverse life styles.
It was a caste ridden stratified hierarchical society.
Though this is well accepted, the concept of caste has defied a coherent definition at the hands of jurists or sociologists.
Tn the early stages of the functioning of the Constitution, it was accepted without dissent or dialogue that caste furnishes a working criterion for identifying socially and educationally backward class of citizens for the purpose of article 15(4).
'This was predicated on a realistic appraisal that caste as a principle of social order has persisted over millennia if much more (1) Marc Galanter Competing Equalities 1980.
(2) Objects and Reasons Statement of the Constitution (First Amendment) Act, 1951.
378 disorderly and asymmetrical in practice than classical Hindu socio legal theory depicted it '.(1) Language of article 15(4) refers to 'class ' and not caste.
Preferential treatment which cannot be struck down as discriminatory was to be accorded/to a class, shown to be socially and educationally backward and not to the members of a caste who may be presumed to be socially and educationally backward.
How do we define, ignoring the caste label, class of citizens socially and educationally backward.
As we are not writing on a clean slate, let us look at judicial intervention to give shape and form to this concept of a class of citizens who are socially and educationally backward so as to merit preferred treatment or compensatory discrimination or affirmative action.
A brief survey of decisions bearing on the subject would reveal the confusion and the present state of malaise.
This review is necessary because a serious doubt is now nagging the jurists, the sociologists and the administrators whether caste should be the basis for recognising the backwardness.
There has been some vacillation on the part of the Judiciary on the question whether the caste should be the basis for recognising the backwardness.
Therefore, a bird 's eye view of the decisions of the Court may first be taken to arrive at a starting point as to whether the Judiciary has univocally recognised caste as the basis for recognition of the backwardness, In State of Madras vs Srimathi Champakam Dorairajan & Anr.
,(2) this Court struck down the classification in the Communal G.O. founded on the basis of religion and caste on the ground that it is opposed to the Constitution and constitutes a clear violation of the fundamental rights guaranteed to the citizen.
The decision was in the hey day of supremacy of fundamental rights over Directive Principles of State Policy.
The Court held that article 46 cannot override the provisions of article 29(2) because the Directive Principles of State Policy have to conform to and run as subsidiary to the Chapter of Fundamental Rights.
In M.R. Balji & Ors.
vs State of Mysore(3) it was observed that though caste in relation to Hindus may be a relevant factor to (1) Hutton Caste in India: Its nature, function and Origin 1961.
(2) ; (3) [1963] Supp.
I S.C.R. 439.
379 consider in determining the social backwardness of groups or classes of citizens, it cannot be made the sole or dominant test.
Social A backwardness is in the ultimate analysis the result of poverty to a very large extent.
The classes of citizens who are deplorably poor automatically become socially backward.
The problem of determining who are socially backward classes, is undoubtedly very complex, but the classification of socially backward citizens on the basis of their castes alone is not permissible under article 15(4).
The Court could foresee the danger in treating caste as the sole criterion for determining social and educational backwardness.
The importance of the judgment lies in realistically appraising the situation when it uttered the harsh but unquestionable truth that economic backwardness would provide a much more reliable yardstick for determining social backwardness because more often educational backwardness is the outcome of social backwardness.
The Court drew clear distinction between 'caste ' and 'class '.
The attempt at finding a new basis for ascertaining social and educational backwardness in place of caste reflected in this decision.
Clairvoyance in this behalf displayed in our opinion is praiseworthy.
In T. Devadesan vs The Union of India & Anr.(l) the petitioner challenged the carry forward rule in the matter of reserved seats in the Central Secretariat Service as being violative of article 14 and 16 of the Constitution.
The majority accepting the petition observed that the problem of giving adequate representation to members of the backward class enjoined by article 16(4) of the Constitution is not adequate by framing a general rule without bearing in mind its reflections from year to year.
What precise method should be adopted for this purpose is a matter for the Government to decide.
The Court observed that any method to be evolved by the Government must strike a reasonable balance between the claims of the backwardness and claims of other employees as pointed out in Balaji s case.
In R. Chitralekha & Anr.
vs State of Mysore & Ors.(2) the majority held valid the orders made by the Government of Mysore in respect of admissions to engineering and Medical Colleges, and observed that a classification of backward classes based on economic conditions and occupations is not bad and does not offend article 15(4).
(1) ; (2) ; 380 The caste of a group of citizens may be a relevant circumstance in A ascertaining their social backwardness and though it is a relevant factor to determine social backwardness of a class, it cannot be the sole or dominant test in that behalf.
If in a given situation caste is excluded in ascertaining a class within the meaning of article 15(4) it does not vitiate the classification if it satisfied other tests.
The Court observed that various provisions of the Constitution which recognised the factual existence of backwardness in the country and which make a sincere attempt to promote the welfare of the weaker sections thereof should be construed to effectuate that policy and not to give weightage to progressive sections of the society under the false colour of caste to which they happen to belong.
Under no circumstances a 'caste ' though the caste of an individual or group of individuals may be a relevant factor in putting him in a particular class.
In Triloki Nath & Anr.
vs State Or Jammu & Kashmir & Ors.(1) reservation of 5() per cent of the Gazetted posts to be filled by promotion was in favour of Muslims of Jammu & Kashmir.
The Court held that inadequate representation in State services would not be decisive for determining the backwardness of the section.
The Court accordingly, gave directions for collecting further material relevant to be subject.
After the material as directed earlier was collected the matter was placed before the court and the decision is reported in Triloki Nath & Anr.
vs State of Jammu & Kashmir & Ors.(1) The Court observed that the expression 'backward class ' is not used as synonymous with 'backward caste ' or 'backward community '.
The members of an entire caste or community may, in the social, economic and educational scale of values at a given time, be backward and may, on that account be treated as a backward class, but that is not because they are members of a caste or community, but because they form a class.
In its ordinary connotation, the expression 'class ' may mean a homogeneous section of the people grouped together because of certain likenesses or common traits, and who are identifiable by some common attributes such as status, rank, occupation, residence in a locality, race, religion and the like, but for purpose of article 16(4) in determining whether a section forms a class, a test solely based on caste, community, race, religion, sex, descent, place of birth or residence cannot be adopted because it would directly offend the Constitution.
The caste as the basis for determining backwardness received a rude jolt.
(1) ; (2) ; 381 In A. Peeriakaruppan etc.
vs State of Tamil Nadu(1) this Court after referrening to earlier decisions especially in Balaji 's case and Chitralekha 's case observed that there is no gain saying the fact that there are numerous castes in this country which are socially and educationally backward.
To ignore their existence is to ignore the realities of life.
It is difficult to make out whether the court accepted caste as the sole basis for determining social and educational backwardness.
In State of Andhra Pradesh & Ors.
vs U.S.V. Balram etc.(2) a list of backward classes which was under challenge prima facie appeared to have been drawn up on the basis of caste.
The Court on closer examination found that the caste mark is merely a description of the group following the particular occupations or professions exhaustively referred to by the commission.
Even on the assumption that the list is based exclusively on caste, it was clear from the materials before the Commission and the reasons given by it in its report that the entire caste is socially and educationally backward and therefore, the inclusion of sub caste in the list of Backward Classes is warranted by article 15(4).
The caste remained the criterion for determining social and educational backwardness.
The assumption that all the members of a given caste are socially and educationally backward is wholly unfounded and lacks factual support obtained by survey.
In Janki Prased Parimoo & Ors etc.
vs State of Jammu & Kashmir & Ors.
(8) it was observed that mere poverty cannot be a test of backwardness because in this country except for a small percentage of the population, the people are generally poor some being more poor, others less poor.
In the rural areas some sectors of the population are advancing socially and educationally while other sectors are apathetic, Applying this yardstick, priestly classes following a traditional profession was held not to be socially and educationally backward.
Cultivators of land designated as backward measured by the size of the holding was held to be impermissible on the ground that placing economic consideration alone above other considerations, is erroneous to determine social and educational backwardness.
(1) [1971] 2 S.C.R. 430.
(2) ; (3) ; 382 In State of Uttar Pradesh vs Pradip Tandon & Ors.(1) reservations in favour of rural areas was held to be unsustainable on the ground that it cannot be said as a general proposition that rural areas represents socially and educationally backward classes of citizens.
Poverty in rural areas cannot be the basis of classification to support reservation for rural areas.
In State of Kerala & Anr.
vs N.M. Thomas & Ors.(2) the constitutional validity of Rule 13A giving further exemption of two years to members belonging to Scheduled Tribes and Scheduled Castes in the service from passing the tests referred to in r. 13 or r. 13A, was questioned.
The High Court struck down the rule.
Allowing the State appeal, Mathew, J. in his concurring judgment held that to give equality of opportunity for employment to the members of Scheduled Castes and Scheduled Tribes, it is necessary to take note of their social, educational and economic backwardness.
Not only is the Directive principles embodied in article 46 binding On the law makers as ordinarily understood, but it should equally inform and illuminate the approach of the court when it makes a decision as the court also is State within the meaning of article 12 and makes law even though interstitially.
Existence of equality depends not merely on the absence of disabilities but on the presence of disabilities.
To achieve it differential treatment of persons who are unequal is permissible.
This is what is styled as compensatory discrimination or affirmative action.
In a concurring judgment, Krishna lyer, J. Observed that the genius of Arts 14 and 16 consists not in literal equality but in progressive elimination of pronounced inequality.
To treat sharply dissimilar persons equally is subtle injustice.
Equal opportunity is a hope, not a menace.
In Kumari K.S. Jayasree & Anr.
vs The State kerala & Anr.(3) it was held that the problem of determining who are socially and educationally backward classes is undoubtedly not simple.
Dealing with the question whether caste can by itself be a basis for determining social and educational backwardness, the court observed that it may not be irrelevant to consider the caste of group of citizens claiming to be socially and educationally backward.
Occupations, place of habitation may also be relevant factors in determining who are socially and educationally backward classes.
(1) ; , (2) ; (3) ; 383 In Akhil Bharatiya Soshit Karamchari Sangh (Railway) represented by its Assistant General Secretary on behalf of the Association vs A Union of India & Ors.(l) this Court upheld reservation of posts at various levels and making of various concessions in favour of the members of the Scheduled Castes and Scheduled Tribes.
Krishna Iyer, J. extensively quoting from the final address to the Constituent Assembly by Dr. Ambedkar held that the political democracy was not the end in view of the struggle for freedom but a social democracy was to be Set up by which it was meant the social fabric resting on the principle of one man one value.
Translated functionally, it means 'total abolition of social and economic inequalities. ' This brief review would clearly put into focus, the dithering and the vacillation on the part of the Judiciary in dealing with the question of reservation in favour of Scheduled Castes, Scheduled Tribes as well as other socially and educationally backward classes.
Judiciary retained its traditional blindfold on its eyes and thereby ignored perceived realities.
A perceptive viewer of judicial intervention observed that the courts turned out to be more limited as a vantage point then I naively assumed at the outset.
They act as a balance wheel channelling compensatory policies and accommodating them to other commitments, but it is the political process that shapes the larger contour of these policies and gives them their motive force.
Official doctrine judicial pronouncements or administrative regulations proved insufficient guide to the shape of the policies in action and the result they produced. '(2) The Indian social scene apart from being disturbing presented the picture of stratified society hierarchically fragmented.
At the lowest rung of the ladder stand Scheduled Castes and Scheduled Tribes and any preferential treatment in their favour has more or less ment with judicial approval.
But when it came to preferential treatment or affirmative action or what is also called compensatory discrimination in favour of socially and educationally backward classes of citizens, the caste ridden society raised its ugly face.
By its existence over thousands of years, more or less it was assumed that caste should be the criterion for deter mining social and educational backwardness.
In other words, it was said, look at the caste, its traditional functions, it position in relation to upper castes by the standard of purity and pollution, pure and not so pure occupation, once these questions are satisfactorily answered without anything more, those who belong to that (1) ; (2) Marc Galanter Compoting Equalities, 1980 p. XVIII.
384 caste must be labelled socially and educationally backward.
This A over simplified approach ignored a very realistic situation existing in each caste that in every such caste whose members claim to be socially and educationally backward, had an economically well placed segments.
But that may wait.
We are at present concerned with the judicial response to the attempt of the Executive to accord preferential treatment to socially and educationally backward classes of citizens.
The litigation which came to the court was more often by those who relied on meritocracy and complained that the merit is crucified at the altar of the mirage of equality.
The outcome of judicial intervention against preferred treatment is summed up as under: "Summing up, we may surmise that the gross effect of litigation on the compensatory discrimination policy has been to curtail and confine it.
Those who have attacked compensatory discrimination schemes in court have compiled a remarkable record of success, while those seeking to extend compensatory discrimination have been less successful. ' '(1) The controversy now has shifted to identifying socially and educationally backward classes of citizens.
The expression 'back ward classes ' is not defined.
Courts have more or loss in the absence of well defined criteria not based on caste label has veered round to the view that in order to be socially and educationally backward classes, the group must have the same indicia as Scheduled Castes and Scheduled Tribes.
The narrow question that the being examined here is whether cast label should be sufficient to identify social and educational backwardness? Number of Commissions have attempted to tackle this complex problem.
However, both Mandal Commission of Karnataka and Bakshi Commission of Gujrat have finally accepted caste as the identifying criterion for determining social and educational backwardness, thought will be presently pointed out that Mandal Commission had serious reservations about caste criterion.
Most of these Commissions and the Government orders based their recommendations used communal units to discriminate the backward class.
Rane Commission of Gujrat has chalked out a different path, rejecting caste as the basis for ascertaining social and educational backwardness.
The question we must pose and (1) Marc Gallanter , Competing Equalities, p. 511.
385 answer is whether caste should be the basis for determining social and educational backwardness.
In other words, by what yardstick, groups which are to be treated as socially and educationally backward are to be identified? To simplify the question: should membership of caste signify a class of citizens as being socially and educationally backward ? If 'caste ' is adopted as the criterion for determining social and educational backwardness does it provide a valid test or it would violate article 15(1) which prohibits discrimination against any citizen on grounds of religion, race, caste, sex, place of birth or any of them.
What then is a caste ? Though caste has been discussed by scholars and jurists, no precise definition of the expression has emerged.
A caste is a horizontal segmental division of society spread over a district or a region or the whole State and also sometimes outside it.
( ') Homo Hierarchicus is expected to be the central and substantive element of the caste system with differentiate it from other social systems.
The concept of purity and impurity conceptualises the caste system.
Louis Dumont asserts that the principle of the opposition of the pure and the impure underlies hierarchy, which is the superiority of the pure to the impure, underlies separation because pure and the impure must be kept separate and underlies the division of labour because pure and impure occupations must likewise, be kept separate.(2) There are four essential features of the caste system which maintained its homo hierarchicus character: (1) hierarchy (2) commensality: (3) restrictions on marriages; and (4) hereditary occupation.(3) Most of the caste are endogamous groups.
Intermarriage between two groups is impermissible.
But 'Pratilom ' marriages are not wholly unknown.
Similarly with the onward movement of urbanisation, members of various castes are slowly giving up, traditional occupations and the pure and impure avocations is being frowned upon by developing notion of dignity of labour As the fruits of independence were unequally distributed amongst various segments of the society, in each caste there came into existence a triple division based on economic resurgence amongst the members of the caste.
Those who have become economically well off have acquired an upper class status (class consciousness) and the one on the step below is the middle class and the third one belongs to poorer section (1) I.P. Desai: Should 'caste ' be the Basis for Recognising Backwardness [1985].
(2) Louise Dumont Home Hierachicus [1970] (3) Caste in Contemporary India: G. Shah [1985].
386 of the caste.
This led to the realisation that caste culture does not help economic interest.
In fact the upper crust of the same caste is verily accused of exploiting the lower strata of the same caste.
It is therefore, rightly argued that the basis of the caste system namely, purity and pollution is slowly being displaced by the economic condition of the various segments of the same caste.
It is recognised on almost all hands that the important feature of the caste structure are progressively suffering erosion.
The new organisation, the so called caste organisation, is substantially different from the traditional structure and caste councils.
Economic differentiation amongst the members of the caste has become sharp, but not so sharp as to bury caste sentiments and ties.
If the transformation of the caste structure as herein indicated is realistically accepted, should the caste label be still accepted as the basis for determining social and educational backwardness.
In a recent paper by the noted sociologist Shri I.P. Desai (Alas, he is no more), it has been ably argued that not a caste but the class or the social group should be examined with a view to determining their social and educational backwardness.
Caste in rural society is more often than not mirrored in the economic power wielded by it and vice versa.
Social hierarchy and economic position exhibit an undisputable mutuality.
The lower the caste, the poorer its members.
The poorer the members of a caste, the lower the caste.
Caste and economic situation, reflecting each other as they do arc the Deus exMachina of the social status occupied and the economic power wielded by an individual or class in rural society.
Social status and economic power are so woven and fused into the caste system in Indian rural society that one may without hesitation, say that if poverty be the cause, caste is the primary index of social backwardness, so that social backwardness is often readily identifiable with reference to a person 's caste.
Such we must recognize is the primeval force and omnipresence of caste in Indian Society, however, much we may like to wish it away.
So Sadly and oppressively deep rooted is caste in our country that it has cut across even the barriers of religion.
The caste system has penetrated other religious and dissentient Hindu sects to whom the practice of caste should be anathema and today we fined that practitioner of other religious faiths and Hindu dissentients are some times as rigid adherents to the system of caste as the conservative Hindus .
We find Christian harijans, Christian 387 Madars, Christian Reddys, Christian Kammas, Mujbi Sikhs, etc.
In Andhra Pradesh there is a community known as Pinjaras or Dudekulas (known in the North as 'Rui Pinjane Wala '): (Professional cotton beaters) who are really Muslims, but are treated in rural society, for all practical purposes, as a Hindu caste.
Several other instances may be given.
Shared situation in the economic hierarchy, caste gradation, occupation, habitation, style of consumption, standard of literacy and a variety of such other factors appear to go to make towards social and educational backwardness.
In some situations and indeed quite often, social investigator may easily be able to identify a whole caste group as a socially and educationally backward class; he may readily recognise people living in certain areas, say mountainous, desert a fresh lease of life.
In fact there is a mad rush for being recognised as belonging to a caste which by its nomenclature would be included in the list of socially and educationally backward classes.
To illustrate: Bakshi Commission in Gujrat recognised as many as 82 castes as being socially and educationally backward.
On the publication of its report, Government of Gujrat received representations by members of those castes who had not made any representation to the Bakshi Commission for treating them as socially and educationally backward.
This phenomenon was noticed by Mandal Commission when it observed: "whereas the Commission has tried to make the State wise lists of OBCS as comprehensive as possible, it is quite likely that severally synonymy of the castes listed backward have been left out.
Certain castes are known by a number of synonymy which vary from one region to the other and their complete coverage is almost impossible.
Mandal Commission found a p way out by recommending that if a particular caste has been treated as backward then all its synonyms whether mentioned in the State lists or not should also be treated as backward.(1) Gujrat Government was forced to appoint a second commission known as Rane Commission Rane Commission took note of the fact that there was an organised effort for being considered socially and educationally backward castes.
Rane Commission recalled the observations in Balaji 's case that 'Social backwardness is on the ultimate analysis the result of poverty to a very large extent. ' The Commission noticed that some of the castes just for the sake of being considered as socially and educationally backward, have degraded (1) Mandal Commission Report Vol.
XII p. 55. 388 themselves to such an extent that, they had no hesitation in attributing different types of vices to and associating other factors indicative of backwardness, with their castes.
The Commission noted that the malaise requires to be remedied.
The Commission therefore, devised a method for determining socially and educationally backward classes without reference to caste, beneficial to all sections of people irrespective of the caste to which they belong.
The Commission came to an irrefutable conclusion that amongst certain castes and communities or class of people, only lower income groups amongst them are socially and educationally backward.
We may recall here a trite observation in case of N.M.Thomas which reads as under: "A word of sociological caution.
In the light of experience, here and elsewhere, the danger of 'reservation ', it seems to me, is three fold.
Its benefits, by and large, are snatched away by the top creamy layer of the 'backward ' caste or class, thus keeping the weakest among the week always weak and leaving the fortunate layers to consume the whole cake.
Secondly, this claim is over played extravagntly in democracy by large and vocal groups whole burden of backwardness has been substantially lightened by the march of time and measures of better education and more opportunities of employment, but wish to weak the 'weaker section ' label as a means to score over their near equals formally categorised as the upper brackets.
" A few other aspects for rejecting caste as the basis for identifying social and educational backwardness may be briefly noted.
If State patronage for preferred treatment accepts caste as the only insignia for determining social and educational backwardness, the danger looms large that this approach alone would legitimise and perpetuate caste system.
lt does not go well with our proclaimed secular character as enshrined in the Preamble to the Constitution.
The assumption that all members of some caste are equally socially and educationally backward is not well founded.
Such an approach provides an oversimplification of a complex problem of identifying the social and educational backwardness.
The Chairman of the Backward Classes Commission, set up in 1953, after having finalised the report, concluded that 'it would have been better if we could determine the criteria of backwardness on principles other than 389 caste. '(1) Lastly it is recognised without dissent that the caste based reservation has been usurped by the economically well placed section in the same caste.
To illustrate, it may be pointed that some years ago, I came across a petition for special leave against the decision of the Punjab and Haryana High Court in which the reservation of 2 1/2" for admission to Medical and Engineering College in favour of Majhabi Sikhs was challenged by none other than the upper crust of the members of the Scheduled Castes amongst Sikhs in Punjab, proving that the labelled weak exploits the really weaker.
Add to this, the findings of the Research Planning Scheme of Sociologists assisting the Mandal Commission when it observed: 'while determining the criteria of socially and educationally backward classes, social backwardness should be considered to be the critical element and educational backwardness to be the linked element though not necessarily derived from the former. '(2) The team ultimately concluded that 'social backwardness refers to ascribed status and educational backwardness to achieved status, and it considered social backwardness as the critical element and educational backwardness to be the linked though not derived element. ' 'The attempt is to identify socially and educationally backward classes of citizens.
The caste, as is understood in Hindu Society, is unknown to Muslims, Christians, Parsis, Jews etc Caste criterion would not furnish a reliable yardstick to identify socially and educationally backward group in the aforementioned communities though economic backwardness would.
Therefore, a time has come to review the criterion for identifying socially and educationally backward classes ignoring the caste label.
The only criterion which can be realistically devised is the one of economic backwardness.
To this may be added some relevant criteria such as the secular character of the group, its opportunity for earning livelihood etc.
but by and large economic backwardness must be the load star.
Why I say this ? Chronic poverty is the bane of Indian Society.
Market economic and money spinning culture has transformed the general behavior of the Society towards its members.
Upper caste does net enjoy the status or respect, traditional, voluntary or forced any more even in rural areas what to speak of highly westernised urban society.
(1) Backward Classes Commission Report Vol.
(2) Part 3 Appendix XIII, p. 99 of the Report of the Team.
390 The bank balance, the property holding and the money power deter mine the social status of the individual and guarantee the opportunity to rise to the top echelon.
How the wealth is acquired has lost significance.
Purity of means disappeared with Mahatama Gandhi and we have reached a stage where ends determine the means.
This is the present disturbing situation whether one likes it or not.
Rane Commission on the evidence before it and after applying the relevant tests and criteria observed as under: "We have found on applying relevant tests and on the basis of the evidence on record, that there()re certain castes/communities or classes of people which are backward, but, only lower income groups amongst them are socially and educationally backward.
In order to ensure that, no ambiguity remains in regard to the above aspect, we may add that, the above observations hold good even in respect of those classes which are identified as socially and educationally backward without reference to any caste.
"(1) Reservation in one or other form has been there for decades.
If a survey is made with reference to families in various castes considered to be socially and educationally backward, about the benefits of preferred treatment, it would unmistakably show that the benefits of reservations are snatched away by the top creamy layer of the backward castes.
This has to be avoided at any cost.
If poverty is to be the criterion for determining social and educational backwardness, we must deal with a fear expressed by sociologists.
It is better to recapitulate these aspects in the words of a sociologist: "Now, if the government changes the criteria of reservation from caste to class, persons from the upper strata of the lower castes who are otherwise not able to compete with the upper strata of the upper castes despite the reservations will be excluded from the white collar jobs.
And the persons from the lower strata of lower castes will not be able to compete with their counterpart of the upper castes.
They too will be excluded.
This (1) Report of Rane Commission Chapter XII prge 12.1.
391 will bridge the gap which is otherwise widening between the rich and the poor of the upper castes and it will strengthen their caste identity.
It will wipe out the small poor strata of the upper castes at the cost of the poor strata of lower castes, and in the name of secularism.
In course of time the upper caste will also become the upper class.
Such a process would hamper the growth of secular forces.
"(1) This fear psychosis is effectively answered by an eminent academic.
He says that 'if the poor can be operationally defined, categorised and sub categorised and reservation benefits be stratified accordingly, would the scenario still haunt use? I think not.
He recognised that this point is valuable in terms of alerting everyone to the need for further refinement of the notions of poor strata.
He recognised that the State is, with all its limitations and resources, to direct and plan social transformation.
(The non revolutionary) choice is between reinforcing 'caste ' or reinforcing the extant constitutional values ' (2) Let me conclude.
If economic criterion for compensatory discrimination or affirmative action is accepted, it would strike at the root cause of social and educational backwardness, and simultaneously take a vital step in the direction of destruction of destruction of caste structure which in turn would advance the secular character of the Nation.
This approach seeks to translate into reality the twin constitutional goals: one, to strike at the perpetuation of the caste stratification of the Indian Society so as to arrest progressive movement and to take a firm step towards establishing a casteless society; and two, to progressively eliminate poverty by giving an opportunity to the disadvantaged sections of the society to raise their position and be part of the mainstream of life which means eradication of poverty.
Let me make abundantly clear that this approach does not deal with reservation in favour of Scheduled Castes and Scheduled Tribes.
Thousands of years of discrimination and exploitation cannot be wiped out in one generation.
But even here economic criterion is worth applying by refusing preferred treatment to those amongst (1) G. Shah IPW January 17, 1983.
(2) Upendra Baxi, Vice Chanceller, South Gujarat University, in 'Caste, Class and Reservations: A Rejoinder to Ghansham Shah.
392 them who have already benefitted by it and improved their position.
And finally reservation must have a time span otherwise concessions tend to become vested interests.
This is not a judgment in a lis in adversary system.
When the arguments concluded, a statement was made that the Government of State of Karanataka would appoint a Commission to determine constitutionally sound and nationally acceptable criteria for identifying socially ar d educationally backward classes of citizens for whose benefit the State action would be taken.
This does not purport to be an exhaustive essay on guidelines but may point to some extent, the direction in which the proposed Commission should move.
CHINNAPA REDDY, J. Over three decades have passed since we promised ourselves "justice, social, economic and political" and "equality of status and opportunity".
Yet, even today, we find members of castes, communities, classes or by whatever name you may describe them, jockeying for position, trying to elbow each other out, and, viewing with one another to be named and recognised as 'socially and educationally backward classes ', to quality for the 'privilege ' of the special provision for advancement and the provision for reservation that may be made under article 15(4) & 16(4) of the Constitution.
The paradox of the system of reservation is that it has engendered a spirit of self denigration among the people.
Now here else in the world do castes, classes or communities queue up for the sake of gaining the backward statue.
Nowhere else in the world is there competition to assert backwardness and to claim 'we are more backward than you '.
This is an unhappy and disquieting situation, but it is stark reality.
Whatever gloss one may like to put upon it, it is clear from the rival claims in these appeals and writ petitions that the real contest here is between certain members of two premier (population wise) caste community classes of Karnataka, the Lingayats and the Vokkaligas, each claiming that the other is not a socially and educationally backward class and each keen to be included in the list of socially and educationally backward classes.
To them, to be dubbed a member of the socially and educationally back ward classes is a passport for entry into professional colleges and State services; so they jostle with each other and in tho bargain, some time they keep out and some times they usher in some of those entitled to legitimate entry, by competition or by reservation.
Commissions have been appointed in the past to identify the backward classes, Governments have considered the reports of the commissions, and Courts have scrutinised the decisions of Governments, Case s have reached the Court too, then and now again.
Once more we are told 393 that the State of Karnataka is ready to appoint another commission and they have asked us will you kindly lay down some guidelines?" Ours is a country of great economic, social and cultural diversity.
Often we take great pride in the country 's cultural diversity.
While cultural diversity adds to the splendor of India, the others add to our sorrow and shame.
The social and economic disparties are indeed despairingly vast.
The Scheduled Castes, the Scheduled Tribes and the other socially and educationally backward classes, all of whom have been compendiously described as 'the weaker sections of the people ' have long journeys to make society.
They need aid; they need facility; they need launching; they need propulsion.
Their needs are their demands.
The demands are matters of right and not of philanthropy.
They ask for parity, and not charity.
The days of Dronacharya and Ekalavya are over.
They claim their constitutional right to equality of status and of opportunity and economic and social justice.
Several bridges have to be erected so that they may cross the Rubicon.
Professional education and employment under the State are thought to be two such bridges.
Hence the special provision for advancement and for reservation under articles 15(4) and 16(4) of the Constitution.
Before we attempt to lay down any guidelines for the benefit of the Commission proposed to be appointed by the Karnataka Government, will do well to warn ourselves and the proposed Commission against the pitfalls of the traditional ' approach towards the question of reservation for Scheduled Castes, Scheduled Tribes and other backward classes which has generally been superior, elitist and, therefore, ambivalent.
A duty to undo an evil which had been perpetrated through the generations is thought 'to betoken a generosity and farsightedness that are rare among nations '.
So a superior and patronising attitude is adopted.
The result is that the claim of the Scheduled Castes and Scheduled Tribes and other backward classes to equality as a matter of human and constitutional right is forgotten and their rights are submerged in what is described as the 'proferential principle ' or 'protective or compensatory discrimination ', expression borrowed from American jurisprudence Unless we get rid of these superior, patronising and paternalist attitudes, what the French Call Le mentalite hierarchique, it is difficult to truly appreciate the problems involved in the claim of the Scheduled Castes, Scheduled Tribes and other backward classes for their legitimate share of the benefits arising out of their belonging to humanity and to a country 394 whose constitution preaches justice, social, economic and political and equality of status and opportunity for all.
One of the results of the superior, elitist approach is that the question of reservation is invariably viewed as the conflict between the meritarian principle and the compensatory principle.
No, it is not so.
The real conflict is between the class of people, who have never been in or who have already moved out of the desert of poverty, illiteracy and backwardness and are entrenched in the oasis of convenient living and those who are still in the desert and want to reach the oasis.
There is not enough fruit in the garden and so those who are in, want to keep out those who are out.
The disastrous consequences of the so called meritarian principle to the vast majority of the under nourished, povetity stricken, barely literate and vulnerable people of our country are too obvious to be stated And, what is merit ? There is no merit in a system which brings about such consequences.
Is not a child of the Scheduled Castes, Scheduled Tribes or other backward classes who has been brought up in an atmosphere of penury, illiteracy and anti culture, who is looked down upon by tradition and society, who has no books and magazines to read at home, no radio to listen, no T.V. to watch, no one to help him with his home work, who goes to the nearest local board school and college, whose parents are either illiterate or so ignorant and informed that he cannot even hope to seek their advice on any matter of importance, a child who must perforce trudge to the nearest public reading room to read a newspaper to know what is happening in the world, has not this child got merit if he, with all his disadvantages is able to secure the qualifying 40% or 50% of the marks at a competitive examination where the children of the upper classes who have all the advantages, who go to St. Paul 's High School and St. Stephen 's College, and who have perhaps been specially coached for the examination may secure 70, 80 or even 90% of the marks? Surely, a child who has been able to jump so many hurdles may be expected to do better and better as he progresses in life.
If spring flower he cannot be, autumn flower he may be.
Why than, should he be stopped at the threshold on an alleged meritarian principle? The requirements of efficiency may always be safeguarded by the prescription of minimum standards.
Mediocrity has always triumphed in the past in the case of the upper classes.
But why should the so called meritarian principle be put against mediocrity when we come to Scheduled Castes, Scheduled Tribes and backward classes? 395 Efficiency is very much on the lips of the privileged whenever reservation is mentioned.
Efficiency, it seems, will be impaired if the total reservation exceeds 50 per cent; efficiency, it seems, will suffer if the 'carry forward ' rule is adopted; efficiency, it seems, will be injured if the rule of reservation is extended to promotional posts.
from the protests against reservation exceeding 50 per cent or extending to promotional posts and against the carry forward rule, one would think that the civil service is a Heavenly Paradise into which only the archangels, the chosen of the elite, the very best may enter and may be allowed to go higher up the ladder.
But the truth is otherwise.
The truth is that the civil service is no paradise and the upper echelons belonging to the chosen classes are not necessarily models of efficiency.
The underlying assumption that those belonging to the upper castes and classes, who are appointed to the non reserved castes will, because of their presumed merit, 'naturally ' perform better than those who have been appointed to the reserved posts and that the clear stream of efficiency will be polluted by the infiltration of the latter into the sacred precincts is a vicious assumption, typical of the superior approach of the elitist classes.
There is neither statistical basis nor expert evidence to support these assumptions that efficiency will necessarily be impaired if reservation exceeds 50 per cent, if reservation is carried forward or if reservation is extended to promotional posts.
Arguments are advanced and opinions are expressed entirely on an ad hoc presumptive basis.
The age long contempt with which the 'superior ' or 'forward ' castes have treated the 'inferior ' or 'backward ' casts is now transforming and crystalising itself into an unfair prejudice, conscious and sub conscious, ever since the 'inferior ' casts and classes started claiming their legitimate share of the cake, which naturally means, for the 'superior ' castes parting with a bit of it.
Although in actual practice their virtual monopoly on elite occupations and posts is hardly threatened, the forward castes are nevertheless increasingly afraid that they might lose this monopoly in the higher ranks of Government service and the profession.
It is so difficult for the 'superior ' castes to understand and rise above their prejudice and it is so difficult for the inferior castes and classes to overcome the bitter prejudice and opposition which they are forced to face at every stage.
Always one hears the word efficiency as if it is sacrosanct and the sanctorum has to be fiercely guarded. 'Efficiency ' is not a mantra which is whispered by the Guru in the Sishya 's ear.
The mere securing of high marks at an examination may not necessarily mark out a good 396 administrator.
An efficient administrator, one takes it, must be one A who possesses among other qualities the capacity to understand with sympathy and, therefore, to tackle bravely the problems of a large segment of populating constituting the weaker sections of the people.
And, who better than the ones belonging to those very sections? Why not ask ourselves why 35 years after independence, the position of the Scheduled Castes, etc.
has not greatly improved? Is it not a legitimate question to ask whether things might have been different, had the District Administrators and the State and Central Bureaucrats been drawn in larger numbers from these classes? Courts are not equipped to answer these questions, but the courts may not interfere with the honest endeavours of the Government to find answers and solutions.
We do not mean to say that efficiency in the civil service is necessary or that it is a myth.
All that we mean to say is that one need not make a fastidious fetish of it.
It may be that for certain posts, only the best may be appointed and for certain courses ! of study only the best may be admitted [f so, rules may provide for reservations for appointment to such posts and for admission to such courses.
The rules may provide for no appropriate method of selection.
It may be that certain posts require a very high degree of skill or efficiency and certain courses of study require a high degree of industry and intelligence.
If so, the rules may prescribe a high minimum qualifying standard and an appropriate method of selection.
Different minimum standards and different modes of selection may be prescribed for different posts and for admission to different courses of study having regard to the requirements of the posts and the courses of study.
No one will suggest that the degree t of efficiency required a cardiac or a neuro surgeon is the same as the degree of efficiency required of a general medical practitioner.
Similarly no will suggest that the degree of industry and intelligence expected of a candidate seeking admission to a research degree course need be the same as that of a candidate seeking admission to an ordinary arts degree course.
We do not, therefore, mean to say that efficiency is to be altogether discounted.
All that we mean to say is that it cannot be permitted to be used as a camouflage to let that upper classes take advantage of the backward classes in its name and to monopolise the services, particularly the higher posts and the professional institutions.
We are afraid we have to rid our minds of many cobwebs before we arrive at the core of the problem.
The quest for equality is self elusive, we must lose our illusions, though not our faith.
It is the dignity of man to pursue the quest for equality.
It will be advantageous to quote at this juncture R.H. Tawney in his classic work equality where he says.
397 "The truth is that it is absurd and degrading for me to make much of their intellectual and moral superiority to each other and still more of their superiority in the arts which bring wealth and power, because, judged by their place in any universal scheme, they are infinitely great or infinitely small .
The equality which all these thinkers emphasise as desirable is not equality of capacity or attainment, but of circumstances, and institutions, and j manner of life.
The equality which they deplore is not the inequality of personal gifts, but of the social and economic environment.
Their views, in short, is that, because men are men, social institutions property rights, and the organisation of industry, and the system of public health and education should be planned, as far as is possible to emphasise and strengthen, not the class differences which divide but the common humanity which unite, them. " But the controversy between the meritarian and the compensatory principals cannot be allowed to cloud the issues before us.
An intelligible consequence of the fundamental rights of equality before the law, equal protection of the laws, equality of opportunity, etc., guaranteed to all citizens under our Constitution is the right of the weaker sections of the people to special provision for their admission into educational institutions and representation in the services.
Appreciating the realities of the situation.
and least there by any misapprehension, the Constitution has taken particular care to specially mention this right of the weaker sections of the people in articles 15(4) and 16(4) of the Constitution.
In view of articles 15(4) and 16(4) the so called controversy between the meritarian and compensatory principles is not of any great significance, though, of course, we do not suggest efficiency should be sacrificed.
The question really is, who are the scheduled castes, scheduled tribes and backward classes, who are entitled to special provision and reservation in regard to admission into educational institutions and representation in the services.
So far as Scheduled Castes and Scheduled Tribes are concerned, the question of their identification stands resolved by the notifications issued by the President under Part XVI of the Constitution.
The problem is only in regard to the identification of the other socially and educationally backward classes.
The question really is how to identify these backward classes to entitle them to entry through the doors of articles 15(4) and 16(4).
And, the further question, naturally, is about the limits of reservation.
398 We are afraid the courts are not necessarily the most competent to identify the backward classes or to lay down guidelines for their identification except in broad and very general way.
We are not equipped for that; we have no legal barometers to measure social backwardness.
We are truly removed from the people, particularly those of the backward classes, by layer upon layer of gradation and degradation.
And, India is such a vast country that conditions vary from State to State, region to region, district to district and from one ethnic religious, linguistic or caste group to another.
A test to identify backward classes which may appear appropriate when applied to one group of people may be wholly inappropriate and unreasonable if applied to another group of people.
There can be no universal test; there can be no exclusive test; there can be no conclusive test.
In fact, it may be futile to apply any rigid tests.
One may have to look at the generality and the totality of the situation.
We do generally understand what we mean when we talk of the richer classes, the poorer classes, the upper middle class, the lower middle classes, the ruling class, the privileged class, the working class, the exploited classes, etc.
In what senses the word 'classes ' used in article 15(4) and in article 16(4) of the Constitution? What is the meaning of the expression 'socially ' and 'educationally backward classes '? What does backwardness consist in? To have a clear understanding of what is meant by 'backwardness ', 'backward classes ' and 'socially and educationally backward classes ', we must have an idea of what social inequality is about.
Max Weber gives us a three dimensional picture of social inequality.
According to Weber, the three dimensions are class, status and power.
A person 's class situation, in the Weber sense, is what he shares with others, similarly placed in the process of production, distribution and exchange, a definition of class which is very near to that of the Marxist conception The inequality of class depends primarily on inequality of income and to some extent on an equal opportunity for upward mobility.
persons class, according this definition, is his shared situation in the economic hierarchy.
Status, the second of Weber 's three dimensions is generally determined by the style of consumption, though not necessarily by the source or amount of income.
An impoverised aristocrat is sometimes sought after by the nouveau riche.
A desk worker considers himself superior to a manual worker.
A professional like a doctor or a lawyer is thought to be of superior status than those belonging to several other walks of life.
Status seems to 399 depend on social attributes and styless of life, including dress, speech, I occupation, etc., on what R.H. Tawney describes as 'the tedious A vulgarities of income and social position. ' Similarly, class and status are not contemporeaneous with power, though power and class can often be sen to be closely connected.
Power is participation in the decision making process but those who wield power are not necessarily the best paid nor the most respected.
But, it is now obvious even to the most superficial observer that social and political power is wielded in innumerable unseen ways by those who control economic power.
Political power is remorselessly manipulated by economic power.
We, therefore, see that everyone of the three dimensions propounded by Weber is intimately and inextricably connected with economic position.
However, we look at the question of 'backwardness ', whether from the angle of class, status or power, we find the economic factor at the bottom of it all and we find poverty, the culprit cause and the dominant characteristic Poverty, the economic factor brands all backwardness just as the erect posture brands the homosapiens and distinguishes him from all other animals, in the eyes of the beholder from Mars.
But, whether his racial stock is Caucasian, Mongoloid, Negroid, etc., further investigation will have to be made.
So too the further question of social and educational backwardness requires further scrutiny.
In India, the matter is further aggravated, complicated and pitilessly tyrannised by the ubiquitous caste system, a unique and devastating system of gradation and degradation which has divided the entire Indian and particularly Hindu society horizontally into such distinct layers as to be v destructive of mobility, a system which has penetrated and corrupted the mind and soul of every Indian citizen.
It is a notorious fact that there is an upper crust of rural society consisting of the superior castes, generally the priestla, the landlord and the merchant castes, there is a bottom strata consisting of the 'out castes ' of Indian Rural Society, namely the Scheduled Castes, and, in between the highest and the lowest, there are large segments of population who because of the law gradation of The caste to which they belong in the rural society hierarchy, because of the humble occupation which they pursue , because of their poverty and ignorance are also condemned to backwardness, social and educational, backwardness which prevents them from competing on equal terms to catch up with the upper crust Any view of the caste system, class or cursory, will at once reveal the firm links which the caste system has with economic power.
Land and learning, two of the primary sources of economic power in 400 India have till recently been the monopoly of the superior castes.
Occupational skills were practised by the middle castes and in the economic system prevailing till now they could rank in the system next only to the castes constituting the landed and the learned gentry.
The lowest in the hierarchy where those who were assigned the meanest task, the out castes who wielded no economic power.
The position of a caste in rural society is more often than not mirroned in the economic power wielded by it and vice versa.
Social hierarchy and economic position exhibit an undisputable mutuality.
The lower the caste, the poorer its members.
The poorer the members of a caste lower the caste.
Caste and economic situation, reflecting each other as they do are the Deus ex Machina of the social status occupied and the economic power wielded by an individual or class in rural society.
Social status and economic power are so woven and fused into the caste system in Indian rural society that one may without hesitation, say that if poverty be the cause, caste is the primary index of social backwardness, so that social backwardness is often readily identifiable with reference to a person 's caste.
Such we must recognised is the primeval force and omnipresence of caste in Indian Society, however, much we may like to wish it away.
So Sadly and oppressively deep rooted is caste in our country that it has out across even the barriers of religion.
The caste system has penetrated other religious and dissentient Hindu sects to whom the practice of caste should be anathema and today we find that practitioner of other religious faiths and Hindu dissentients are some times as rigid adherents to the system of caste as the conservative Hindus.
We find Christian harijans, Christian Madars, Christian Reddys, Christian Kammas, Mujbi Sikhs, etc.
In Andhra Pradesh there is a community known as Pinjaras or Dudekulas (known in the North as 'Rui Pinjane Wala '): Professional cotton beaters) who are really Muslims, but are trated in rural society, for all practical purposes, as a Hindu.
caste Several other instances may be given.
Shared situation in the economic hierarchy, caste gradation, occupation, habitation, style of consumption, standard of literacy and a variety of such other factors appear to go to made towards social and educational backwardness.
In some situations and indeed quite often, social investigator may easily be able to identify a whole caste group as a socially and educationally backward class; he may readily recognise people living in certain areas, say mountainous, desert or forest regions, as socially and educationally backward classes; he may freely perceive those pursuing certain 'Lowly ' accusations as socially and educationally backward classes: he may, without difficulty, distinguish the very poor and the destitute as socially and educationally 401 backward classes.
The social investigator may be able to do all this by field reasearch.
study, observation, collection and interpretation of data, application of common though not rigid standards.
We will refer to these aspects of the question later in our judgment.
With these prefatory, general observations, we may now refer to the relevant Constitutional provisions.
Part XVI of the Constitution concerns itself with "Special provisions relating to certain classes".
The classes in regard to which the constitution makers thought fit to make special provision are the Scheduled Caste, the Scheduled Tribes, the Anglo Indian community and the socially and educationally backwardness classes Articles 330 and 332 provide for reservation of seats for Scheduled Castes and Scheduled Tribes in the House of the People and the Legislative Assembles of the State.
Articles 331 and 333 provide for representation of the Anglo Indian Community in the House of the People and the Legislative Assemblies of the States.
Article 334 provides that the reservation and special representation are to cease after 30 years.
There is no reservation or special representation for socially and educationally backward classes either in the House of the People or in the Legislative Assemblies of the State.
Article 335 imposes a constituently obligation to take into consideration the claims of members of the Scheduled Castes and Scheduled Tribes, in the making of appointments to the services and posts in connection with the affairs of the Union or of the States, consistently with the maintenance of efficiency of administration.
Articles 336 and 337 make certain special provisions for the Anglo Indian Community in certain services and with respect to educational grants for the benefit of that community.
Article 341 empowers the President, with respect to any State (after consultation with the Governor) or Union Territory, to specify, by public notification, the castes, the races or tribes or parts or groups within castes, races or tribes which shall, for the purposes of the Constitution, be deemed to be Scheduled Castes in relation to that State or Union Territory as the case may be.
A notification so issued by the President is not to be varied by any subsequent notification, but may only be varied by law, made, by Parliament.
Article 342 makes a similar provisions with respect to Scheduled Tribes.
Article 340 empowers the President to appoint a commission to investigate the conditions of socially and educational 402 ly backward classes within the territory of Indian and the difficulties under which they labour and to make recommendations as to the steps that should be taken by the Union to remove such difficulties and to improve their conditions and as to the grants that should be made for that purpose by the Union or by the State.
The report of the Commission which is to set out the facts and make recommendations is required to be laid before each House of Parliament, together with a memorandum explaining the action taken thereon.
Article 338 enjoins the appointment of a special officer for the Scheduled Tribes by the President whose duty is to investigate all matters relating to the safeguards provided for the Scheduled Castes and Schedule Tribes under the Constitution and to report to the President upon the working of those safeguards at such intervals as may be directed by the President.
The reports are to be laid before each House of Parliament.
Article 338(3) expressly provides that n under article 338 references to the Scheduled Castes Scheduled Tribes shall be construed as in including references to such other backward classes as the President may on receipt of the report of a Commission appointed under article 34a(1).
specify and also the Anglo Indian community.
Thus, while there is a special provision for reservation of seats for Scheduled Castes and Scheduled Tribes in the House of the People and the Legislative Assemblies of the States and a provision for the representation of the Anglo Indian Community in the House of the People and the Legislative Assemblies of the States, there is no such provision for reservation of seats for or reservation socially and educationally backward classes in the House of the People or the Legislative Assemblies of the States.
Again, while under article 335, there is a constitutional obligation to consider the claims of the members of the Scheduled Castes and Scheduled Tribes in the making of appointments to services and posts in connection with the affairs of the Union and the States and there is a special provision for the Anglo Indian Community in certain services for a limited period.
There is no corresponding provision for the socially and educationally backward classes.
But there is a provision under article 340 of the Constitution for the appointment of a Commission to investigate the conditions of socially and educationally backward classes and to recommend the steps to be taken to ameliorate such conditions.
403 Article 14 of the Constitution, stated in positive language, guarantees to every person equality before the law and equal protection of the laws, Article 15(1) prohibits the State from discriminating against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.
Article 22(2) similarly prohibits the denial of admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.
While article 15(3) States that nothing in article 15 shall prevent the State from making any special provision for women and children, article 15(4) provides, "Nothing in this Article or in clause (2) of article 29 shall prevent the State from making and special provision for the advancement of any socially, educationally backward classes of citizens or for the Scheduled Castes or Scheduled Tribes.
" article 16 deals with equality of opportunity in matters of public employment.
article 16(1) provides that there shall be equality of opportunity in matters relating employment or appointment to any office under the State, and article 16(2) prohibits discrimination on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them.
article 16(4) States, "nothing in this Article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the "that, is not adequately represented in the services under the State.
We are primarily concerned in this case with the question as to who are socially and educationally backward classes of citizens mentioned in article 15(4) and the backward class of citizens, not adequately represented in the services under the State mentioned in article 16(4).
We see that while article l 5(4) contemplates "special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes", article 16(4) speaks of 'provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State is not adequately represented in services under the State" Now, it is not suggested that the socially and educationally backward classes of citizens and the Scheduled Castes and the Scheduled Tribes from whom special provision for advancement is contemplated by Art 15(4) are distinct and separate from the backward classes of citizens who are adequately represents in the services under the State for whom reservation of posts and appointments is contemplated by article 16(4). 'The backward classes of citizens ' referred to in article 16(4), despite the short description, are the same 404 as the socially and educationally backward classes of citizens and the A scheduled castes and the Scheduled Tribe ', 90 fully described in article 15(4): Vide Trilokinath Tiku vs State of Jammu and Kashmir and other cases.
However, for the purposes of article 16(4) it is further necessary that the Backward classes should not be adequate in the services.
Again, and quite obviously, 'special provision for advancement ' is a wide expression and may include many more things besides 'mere reservation of seats in colleges. ' It may be by way of financial assistance, free medical, educational and hostel facilities, scholarships, free transport, concessional or free housing, exemption from requirements insisted upon in the case of other classes al so on.
We are not, for the time being, concerned with the mode advancement, other than reservation of seats in college, we observe that under article 16(4), reservation is to be made to benefit those backward classes, who in the opinion of the Government are not adequately represented, in the services.
Reservation must, therefore, be aimed at securing adequate representation.
It must follow that the extent of reservation must match the inadequacy of representation.
There is no reason why this guideline furnished by the Constitution itself should not also be adopted for the purposes Or article 15(4) too.
For example, the extent of reservation of seats in professional colleges may conveniently be determined with reference to the inadequacy of representation in the various profession.
Similarly, the extent of reservation in other colleges may be determined with reference to the inadequacy in the number of graduates, etc.
Naturally, if the lost ground is to be gained.
the extent of reservation may even have to be slightly higher than the percentage of population of the backward classes.
Since these questions are not altogether res integra, it will be useful to refer to a few of the earlier opinions of this Court touching upon this question.
Until Thomas(1) came on the scene, Balaji(2) was considered by many as the magnum opus on reservations.
Balaji was also a case from Karnataka.
The very first sentence of the judgment of a Gajendragadkar, J. is a revelation of the frustrating task that the Government of Karnataka has been undertaking these several years.
The first sentence says: "Since 1958, the State of Mysore has been (l) ; (2) [1963] Suppl.
I S.C.R,4 39 405 endeavouring to make a special provision for the advancement of the socially and educationally backward classes af citizens in the State A of Mysore under article 15(4) of the Constitution and every time when an order is passed in that behalf, its validity has been challenged by writ proceedings.
Four previous orders passed in that behalf were challenged by writ proceedings taken against the State under article 226".
Balaji was concerned with the question of the validity of the reservation made under article 15(4) of the Constitution in regard to admission to the medical colleges of the Mysore and Karnataka Universities.
28 per cent of the seats were reserved for Backward Classes so called, 20 percent for more Backward classes, 15 per cent for Scheduled Castes and 3 per cent for Scheduled Tribes, making a total of 68 per cent of the seats available for the reserved category only and 32 per cent for the general category, described in the judgment as "merit pool".
The reservation was generally made on the basis of the report of the Nagan Gowda Committee appointed by the State Government.
The court found that the Committee approached the problem of enumerating and classifying these socially and educationally backward communities on the basis that social backwardness depended substantially on the caste to which the community belonged, though it recognised that economic condition may be a contributing factor.
according to the court, the Committee virtually equated 'classes ' with castes '.
The court observed that in dealing with the question as to whether any class of citizens were socially backward or not, it might not be irrelevant to consider the caste of the said citizens but the importance of caste should not be exaggerated.
rt was observed that caste could not be made the sole or dominant test to determine the social backwardness of group or classes of citizens.
It was noted that social backwardness was in the ultimate analysis the result of poverty, to a very large extent.
It was also noticed that the occupation of citizens might also contribute to make classes of citizens socially backwardness.
As the Nagam Gowda Committee had adopted the caste test as the predominant test, if not the sole test, without regard to the other factor which were undoubtedly relevant, the court expressed the vice the classification made by the Committee of socially backward communities was invalid.
In passing, at one place, it was remarked that the Backward Classes of citizens for whom special provision was authorised to be made, were treated by article 15(4) itself, as being similar to the Scheduled Castes and Tribes.
It was observed that the Backward Classes were in the matters of their backwardness comparable to Scheduled Castes and Tribes.
Based on these observations and the juxta 406 position of the expressions Scheduled Castes, Scheduled Tribes and A socially and educationally backward classes in article 15 and article 338, it was suggested by the learned counsel for the petitioner that the socially backward classes of people were those whose status and standard of living was very much the same as those of the Scheduled Castes and Scheduled Tribes.
We do not think that these observations were meant to lay down any proposition that the socially Backward Classes were those classes of people, whose conditions of life were very nearly the same as those of the Scheduled Castes and Tribes.
We say so first because of the inappropriateness of applying the ordinary rules of statutory interpretations to interpret constitutional instruments which are sui generies and which deal with situations of significance and consequence.
It is not enough to exhibit a Marshallian awareness that we are expounding a Constitution; we must also remember that we are expounding a Constitution born in the mid twentieth century, but of an anti imperialist struggle, influenced by Constitutional instruments, events and revolutions elsewhere, in search of a better world, and winded to the idea of justice, economic, social and political to all.
such a Constitution must be given a generous interpretation so as to give all its citizens the full measure of justice promised by it.
The expositors of the Constitution are to concern themselves less with mere words and arrangement of words than with the philosophy and the prevading 'spirit and sense ' of the Constitution, so elaborately exposed for our guidance in the Directive Principles of State Policy and other provisions of the Constitution.
Now, anyone acquainted with the rural scene in India would at once recognise the position that the Scheduled Castes occupy a peculiarly degraded position and are treated, not as persons of caste at all, but as outcastes.
Even the other admittedly backward classes shun them and treat them as inferior beings.
It was because of the special degradation to which they had been subjected that the Constitution itself had to come forward to make special provision for them.
There is no point in attempting to determine the social backwardness of other classes by applying the test of nearness to the conditions of existence of the Scheduled Castes.
Such a test would practically nullify the provision for reservation for socially and educationally Backward Classes other than Scheduled Castes and Tribes.
Such a test would perpetuate the dominance of the existing upper classes.
Such a test would take a substantial majority of the classes who are between the upper classes and the Scheduled Castes and Tribes out of the category of backward classes and put them at a permanent disadvantage.
Only the 'enlightened ' classes of body will capture all the 'open ' posts and seats and the reserved posts and 407 seats will go to the Scheduled Castes and Tribes and those very near the Scheduled Castes and Tribes.
The bulk of those behind the 'enlightened ' classes and ahead of the near Scheduled Castes and Tribes would be left high and dry, with never a chance of imposing themselves .
Earlier we mentioned that poverty was regarded by the Court as the prime cause of social backwardness.
It was said at page 460, "Social backwardness is on the ultimate analysis the result of poverty, to a very large extent.
The classes of citizens who are deplorably poor automatically become socially backward.
They do not enjoy a status in society and have, therefore, to be content to take a backward seat.
It is true that social backwardness which results from poverty is likely to be aggravated by considerations of caste to which the poor citizens may belong, but that only shows the relevance of both caste and poverty in determining the backwardness of citizens".
We only add that there is an overpowering mutuality between poverty and caste on the Indian scene.
Again, referring to some scheme formulated by the Maharashtra Government for financial assistance the Court observed, "However, we may observe that if any State adopts such a measure, it may afford relief to and assist the advancement of the Backward Classes in the State, because backwardness social and educational, in ultimately and primarily duties for proverty".
Recognising poverty as the true source of the evil of social and economic backwardness and caste as a relevant factor in determining backwardness, the Court also noticed occupation and habitation as two other important contributing factors and finally stressed the need for a penetrating investigation.
It was said, "The occupations of citizens may also contribute to make classes of citizens socially backward.
There are some occupations which are treated as inferior according to conventional beliefs and classes of citizens who follow these occupations are apt to become socially backward.
The place of habitation also plays not a minor part in determining the backwardness of a community of persons.
In a sense, the problem of social backwardness is the problem of Rural India and in that behalf, classes of citizens occupying a socially backward position in rural area fall within the purview of article 15(4).
The problem of deter mining who are socially backward classes is undoubtedly very complex.
Sociological, social and economic considerations come into play in solving the problem and 408 evolving proper criteria for determining which classes are A socially backward is obviously a very difficult task.
It will need an elaborate investigation and collection of data and examining the said data in a rational and scientific way".
The Balaji Court then proceeded to consider the question of educational backwardness.
The Nagan Gowda Committee had dealt with the question on the basis of the average of the student population in the last three High school classes of all High Schools in the State in relation to a thousand citizens of that community.
The Committee was of the view that all castes whose average was less than the State average should be regarded as Backward communities and those whose average was less than 50 per cent of the State average should be regarded as More Backward.
The Court took the view that the adoption of the test of the last three High School classes might be a little high.
but even if it was not considered high, it was not right to treat communities which were just below the State average as backward.
There can be divergence of views on this question.
Where the State average itself is abysmally low, there is no reason why classes of people whose average was slightly above, or very near, or just below the State average, should be excluded from the list of Backward Classes.
The adoption of the State average or the 50 per cent of the State average test might lead to quite arbitrary results and This surely cannot be a matter in which the court should try to impose its views.
In fact while observing: "if the test has to be applied by a reference to the State average of student population, the legitimate view to take would be that the classes of citizens, whose average is well or substantially below the State average, can be treated as educationally backward," the court also observed, ' On this point again we do not propose to lay down any hard and fast rule; it is for the State to consider the matter and decide in a manner which is consistent with the requirements of article 15(4)".
It was also observed in Balaji that the sub classification made by the reservation order between Backward Classes and More Back ward Classes did not appear to be justified under article 15(4) as it appeared to be a measure devised to benefit all the classes of citizens who were less advanced when compared with the most advanced classes in the State, and that was not the scope of article 15(4).
A result of the sub classification was that nearly 90 per cent of the 409 population of the State was treated as backward.
The propriety of such a course may be open to question on the facts of each case, but A we do not see why on principle there cannot be :3 classification into Backward Classes and More Backward Classes, if both Classes are not merely a little behind, but far far behind the most advanced classes In fact such a classification would be necessary to help the More Backward Classes; otherwise those of the Backward Classes who might be a little more advanced than the More Backward Classes might walk away with all the seats, just as, if reservation was confined to the More Backward Classes and no reservation was made to the slightly more advanced Backward Classes the most advanced Classes would walk away with all the seats available for the general category leaving none for the Backward Classes.
All that we can say is that sub classification may be permissible if there are classes of people who are definitely far behind the advanced classes but ahead of the very backward classes.
One may say the same thing about the adoption of the average of the student population in the last three High School Classes of all High Schools in the State in relation to a thousand citizens of that community as the basis for assessing relative Backwardness.
Balaji thought it was a little high but surely other views are possible.
In fact considering the wide spread of elementary education, one would think the basis should be pushed up higher.
Having regard to the availability of elementary schools in rural areas, more and more boys of the backward Classes may become literate.
But it is a long way from ceasing to be educationally backward.
As one goes up class by class it as a notorious fact that there are more 'drop outs ' from the boys of the backward classes than from the boy of the forward classes.
The adoption of a lower basis to assess educational backwardness may give a wholly false picture.
After all, if one is considering the question of admission to professional colleges or of appointment to posts, the basis possibly should be the average number of students of that community who have passed the examination prescribed as the minimum qualification for admission to professional colleges, say in the last three years, and perhaps the average number of persons of that community who have graduated is the last three years, since graduation is generally the minimum qualification for most posts possibly, the extent of reservation may even vary with reference to the class of post.
This is a matter for evaluation by experts.
410 The Balaji Court then considered the question of the extent of the special provision which the State would be competent to make under article 15(4).
Here the Court brought in the so called meritarian principle and thought that large reservation would inevitably affect efficiency.
We may perhaps, mention here what a noted sociologist had to say: "So the leading anti reservationists by hand to find nationalizations for their campaigns.
A favourite one is to conjure up the image of a phoney juxtaposition; on one side is 'merit ' shown up by candidates on the open list, on the other side is 'incompetence ', represented b those on the reserved list Hence so the argument runs if reservations are maintained, standards in the medical professions (or in other professions and senior Government posts) will be deleted.
Indeed (it is claimed) there is serious risk that patients will die if they are treated by (backward ' doctors who have reached their positions through reservations.
(Such allegations are constantly repeated although they are patently false; in the final at the postgraduate level, the minimum qualifying marks are identical for all candidates, irrespective of their origin.)"( ') We should think that is a matter for experts in management and administration.
There might be posts or technical courses for which only the best can be admitted and others might be posts and technical courses for which minimum qualification would also serve.
The percentage of reservations is not a matter upon which a court may pronounce with no 1 material at hand.
For a court to say that reservations should not exceed 40 per cent, 50 per cent or 60 per cent, would be arbitrary and the Constitution does not, permit us to be arbitrary.
Though in the Balaji case, the court thought that generally and in a broad way a special provision should be less than 50 per cent, and how much less than 50 per cent would depend upon the relevant prevailing circumstances in each case, the court confessed.
"In this matter again, we are reluctant to say definitely what would be a proper provision to make.
" All that the court would finally say was that in the circumstances of the case before them, a reservation of 68 per cent was inconsistent with article 15(4) of the Constitution.
We are not prepared to read Balaji as arbitrarily laying down 50 per cent as the outer limit of reservation.
What precisely was decided by Balaji has been summed up by the Court itself at page 471 of the S.C.R. in the following words: (1) Ruth Glass: Divided and degraded: the downtrodden people of India, (Monthly Review July August) 1982.
411 "We have already noticed that the impugned order in the present case has categorised the Backward Classes on the sole basis of caste A which, in our opinion, is not permitted by article 15(4): and we have also held that the reservation of 68 per cent made by the impugned order is plainly inconsistent with the concept of the special provision authorised by article 15(4).
therefore, it follows that the impugned order is a fraud on the Constitutional power conferred on the State by article 15(4)".
We must repeat here, what we have said earlier, that there is no scientific statistical data or evidence of expert administrators who have made any study of the problem to support the opinion that reservation in excess Or 5() percent may impair efficiency.
It is a rule of thumb and rules of the thumb are not for judges to lay down to solve complicated sociological and administrative problems.
Sometimes, it is obliquely suggested that excessive reservation is indulged in as a mere votecatching device.
Perhaps so, perhaps not.
One can only say 'out of evil cometh good ' and quicker the redemption of the oppressed classes, so much the better for the nation.
Our observations are not intended to show the door to genuine efficiency.
Efficiency must be a guiding factor but not a smokes cream.
All that a Court may legitimately say is that reservation may h not be excessive.
It may not be so excessive as to be oppressive; it may not be so high as to lead to a necessary presumption of unfair exclusion of everyone else.
In R. Chiralekha vs State of Mysore,( ') the Supreme Court upheld that classification of socially and educationally backward classes made on the basis of economic condition and occupation, without reference to caste.
According to the Government order, a family whose income was Rs. 1200 per annum or less and persons or classes following occupations of agriculture petty business, inferior services crafts or other occupations involving manual labour, were in general, socially and educationally backward.
The Government listed the following occupations as contributing to social backwardness; (1) actual cultivators; (2) artisan; (3) inferior services (i.e. Class IV in Government Services and corresponding class or service in private employment) including casual labour; and (4) any other occupation involving manual labour.
Th is criteria was adopted by the Government as a temporary measure pending further detailed study.
The order did not take into consideration as a criterion for backwardness the caste of an applicant.
Relying heavily on Balaji, (1) [1964] 6 S.C.R.368.
412 the Mysore High Court held that the scheme adopted by the Government was most imperfect as in their opinion in addition to the occupation and poverty tests, the study should have adopted the caste test as well as the "residence" test in making the classification.
It also observed that the decision in the Balaji case said that the caste basis was undoubtedly a relevant, nay an important basis in deter mining the classes of backward Hindus but it should not be made the sole basis.
Subba Rao, J., speaking for this Court, explained how the Mysore High Court had misunderstood Balaji and observed: "While this Court said that caste is only a relevant circumstance and that it cannot be the dominant test in ascertaining the backwardness of a class of citizens, the High Court said that it is an important basis in determining the class of backward Hindus and that the Government should have adopted caste as one of the test.
As the said observations made by the High Court may lead to some confusion in the mind of the authority concerned who may be entrusted with the duty of prescribing the rules for ascertaining the backwardness of classes of citizens within the meaning of article 15(4) of the Constitution, we would hasten to make it clear that caste is only a relevant circumstance in ascertaining the backwardness of a class and there is nothing in the judgment of this Court which precludes the authority concerned from determining the social backwardness of a group of citizens if it can do so without reference to caste.
While this Court has not included caste from ascertaining the backwardness of a class of citizens, it has not made it one of the compelling circumstances affording a basis for the ascertaining of backwardness of a class.
To put it differently, the au thority concerned may take caste into consideration in ascertaining the backwardness of a group of persons; but, if it does not, its order will not be bad on that account, if it can ascertain the backwardness of a group of person on the basis of other relevant criteria.
" Later he further proceeded to explain: "This interpretation will carry out the intention of the Constitution expressed in the aforesaid Article.
It helps the really backward classes instead of promoting the interests of individuals or groups who, though they 413 belong to a particular caste a majority where of si socially and educationally backward, really belong to a class A which is socially and educationally advanced.
To illust rate, take a caste in a State which is numerically the largest therein.
It may be that though a majority of the people in that caste are socially and educationally backward, an effective minority may be socially and edu cationally for more advanced than another small sub caste the total number of which is far less than the said minority.
If we interpret the expression "Classes" as "caster ', the object of the Constitution will be frustrated and the people who do not deserve any advertitious aid may get it to the exclusion of those who really deserve.
This anomaly will not arise if, without equating caste with class, caste is taken as only one of the considerations to ascertain whether a person belongs to a backward class or not.
On the other hand, if the entire sub caste, by and large, is backwardness, it may be included in the Scheduled Castes by following the appropriate procedure laid down by the Constitution".
Evidently recognising the difficulty be setting any attempt by a Court to lay down inflexible criteria, he pointed out: 'We do not intend to lay down any inflexible rule for the Government to follow.
The laying down of criteria for ascertainment of social and educational backwardness of a class is a complex problem depending upon many circumstances which may vary from State to State and even from place to place in a State.
But what we l? intend to emphasize is that under no circumstances a "class" can be equated to a "caste", though the caste of an individual or a group of individual may be considered along with other relevant factors in putting him in a particular class.
We would also like to make it clear that if in a given situation caste is excluded in ascertaining a class within the meaning of article 15(4) of the Constitution, it does not vitiate the classification if it satisfied other tests.
" In Rajendran vs State of Madras(l) Ramaswami, J. took care to say, (1) [1968] I S.C.R. 721. 414 ". if the reservation in question had been based A only on caste and had not taken into account the social and educational backwardness of the caste in question, it would be violative of article 15(1) But it must not be for gotten that a caste is also a class of citizens and if the caste as a whole is socially and educationally backward reservation can be made in favour of such a caste on the ground that it is a socially and educationally backward class of citizens within the meaning of article 15(4) .
It is true that in the present cases the list of socially and educationally backward classes has been specified by caste.
But that does not necessarily means that caste was the sole consideration and that person belonging to these castes are also not a class of socially and educationally backward citizens.
" In State of Andhra Pradesh vs P. Sagar,(l) Shah, J. Observed, "In the context in which it occurs the expression "class" means a homogeneous section of the people ground together because of certain likeness or common traits and who are identifiable by some common attributes such as status, rank, occupation, residence in a locality, race, religion and the like.
In determining whether a particular section forms a class, caste cannot be excluded altogether.
But in the determination of a class a test solely based upon the caste or community cannot also be accepted . . . . . . . . . .
Reservation may be adopted to advance the interests of weaker sections of society, but in doing so, case must be taken to see that deserving and qualified candidates are not excluded from admission to higher educational institutions.
The criterion for determining the backwardness must not be based solely on religion, race, caste, sex or place of birth, and the backwardness being social and educational must be similar to the backwardness from which the Scheduled Castes and the Scheduled Tribes suffer".
(1) 415 In Tirloki Nath vs State of Jammu & Kashmir,(l) the Court held that while it was open to the State to make a provision for reservation of appointments or posts in favour of socially and educationally backward classes, it could not distribute the number of posts or appointments on the basis of community or place or residence.
An order of the Government of Jammu and Kashmir reserving 50 per cent of the vacancies for the Muslims of Kashmir (entire State), 40 per cent for the Jammu Hindus and 10 per cent for the Kashmiri Hindus was struck down.
It was pointed out that the expression "backward class" was not used as synonymous with backward caste or backward community but it was noticed, "The members of an entire caste or community may in the social, economic and educational scale of values at a given time be backward and may on that account be treated as a backward class, but that is not because they are members of a caste or community, but because they form a class".
The Court further said: In its ordinary connotation the expression "class" means a homogeneous section of the people grouped together because of certain likenesses or common traits, and who are identifiable by some common attributes such as status, rank, occupation, residence in a locality, race, religion and the like.
But for the purpose of article 16(4) in determining whether a section forms a class, a test 1 solely based on caste, community, race, religion, sex descent, place of birth or residence cannot be adopted, because it would directly offend the Constitution".
In A. Peeriakatuppan vs State of Tamil Nadu,( ') the Court observed: "A caste has always been recognised as a class.
there is no gain saying the fact that there are numerous castes in this country which are socially and educationally backward.
To ignore their existence is to ignore the facts of life.
" In State of Andhra Pradesh vs Balaram(3), the order of the Government of Andhra Pradesh enumerating the socially and (1) ; (2) [1971] 1 S.C.C.38.
(3) A.l.
R. 416 educationally backward classes for the purpose of admission into the A medical colleges of the State had been struck down by the High Court on the ground that the Government Order was based on the report of the Backward Classes Commission which had adopted caste as the main basis to determine who were backward classes and this was contrary to the decision of the Court in Balaji.
It had also been held by the High Court that the Commission had committed a mistake in adopting the average of student population per thousand of a particular class or community in the 10th or 11th classes with reference to the State average for the purpose of determining educational backwardness.
Even so the percentage of literacy of some groups included in the list of backward classes was well above the State average.
The High Court had further held that the Commission had ignored the principle that the social and educational backwardness of persons classified in the list should be comparable or similar to the Scheduled Castes and Scheduled Tribes The Commission had committed a further mistake in subdividing the groups into more backward and less backward classes.
It was urged before this Court that the principles thought to have been laid down in Balaji, Chitralekha and Sagar that article 15(4) was to be read as a proviso to articles 15(1) and 29(2) and that in the matter of backwardness that backward classes must be comparable to Scheduled Castes and Scheduled Tribes, were wrong and required to be re considered.
The Court found that it was not necessary for them to consider this aspect of the matter as in the particular case before them, they were factually satisfied that classes enumerated as backward, were really socially and educationally backward.
The Court however took care to say: "It must be pointed out that none of the above decisions lay down that social and educational backwardness must be exactly similar in all respects to that of Scheduled Castes and Scheduled Tribes.
" The contention that backward classes were classified on the basis of caste was met with the following observation: "No doubt, we are aware that that any provision {I made under this clause must be within the well defined limits and should not be on the basis of caste alone.
But it should not also be missed that a caste as such may be socially and educationally backward.
If after collecting 417 the necessary data, it is found that the caste as a whole is socially and educationally backward, in our opinion, A the reservation made of such persons will have to be up held notwithstanding the fact that a few individuals in that group may be both socially and educationally above the general average.
There is no gain saying the fact that there are numerous castes in the Country, which are socially and educationally backward and therefore a suitable provision will have to be made by the State as charge in Article 15(4) to safeguard their interest. . . . . . . . . . . . . . . . the members of an entire caste or community may in the social economic, and educational scale of values, at a given time be backward and may on that account be treated as backward classes, but that is not because they are members of a caste of community but because they form a class.
Therefore, it is clear that there may be instances of an entire caste or a community being socially and educationally backward for being considered to be given protection under article 15(4). . . . . . . . . . . . . .
To conclude, though prima facie the list of Backward Classes which is under attack before us may be considered to be on the basis of caste, a closer examination will clearly show that it only a description of the group following the particular occupations or professions, exhaustively referred to by the Commission.
" The Court then proceeded to observe that the question before them was whether the Backward Classes Commission had relevant data and material before it for enumerating the classes of persons to be included in the list of backward classes was a real question and not whether the Commission was scientifically accurate in conclusion.
The Court expressed its satisfaction that there was sufficient relevant material to justify the Commission 's conclusion and added: "No doubt there are a few instances where the educational average is slightly above the State average, but that circumstance by itself is not enough to strike down the entire list.
In fact, even there it is seen that when the whole class in which that particular group is included, is considered the average works out to be less 418 than the State average.
Even assuming there are a few A categories which are a little above the State average, in literacy, that is a matter for the State to be taken note of and review the position of such categories of persons and take a suitable decision.
" Referring to the observations in Balaji regarding the test of average student population in the last three High Court School classes it was said: "These observations made by this Court in the above decisions have, in our opinion, been misapplied by the High Court to the case in hand.
lt has proceeded on the basis that it is axiomatic that the educational average of the class should not be calculated on the basis of the student population in the last three high school classes and that only those classes whose average is below the State average, that can be treated as educationally back ward.
This Court has only indicated the broad principles to be kept in view when making the provision under article 15(4)." In Janki Prasad Parimoo vs State of Jammu & Kashmir the Court noticed the link between economic backwardness and social and educational backwardness and observed "In India, social and educational backwardness is further associated with economic backwardness and it is observed in Balaji 's case referred to above that backwardness, socially and educationally is ultimately and primarily due to poverty." Having said this the Court was not prepared to lay down poverty as the exclusive test on the ground that a large proportion of the population in India was poverty stricken and if poverty was made the sole test for reservation, a resourceless situation might arise.
It was said, "But if poverty is the exclusive test, a very large proportion of the population in India would have to be regarded as socially and educationally backward and if reservations are made only on the ground of economic 419 considerations, an untenable situation may arise because even in sectors which are recognised as socially and educationally advanced, there are large pockets of poverty.
In this country except for a small percentage of the population, the people are generally poor some being more poor, others less poor.
Therefore, when a social investigator tries to identify socially and educationally backward classes he may do it with confidence that they are bound to be poor.
Though the two wards, 'Socially ' and 'educationally ' are used cumulatively for the purpose of describing the backwardness class, one may find that if a class as a whole is educationally advanced, it is generally also socially advanced because of the reformative effect of education on that class.
The words "advanced" and "backward" are only relative terms there being several layers or strata of classes, hovering between "advanced" and "backward", and the difficult task is which class can be recognised out of these several layers as being socially and educationally backward.
" The State of Jammu & Kashmir had declared six classes of citizens as socially and educationally backward.
They were (1) persons whose traditional occupation was one of the sixty two mentioned; (2) persons belonging to 23 social castes; (3) small cultivators (4) low paid pensioners; (5) residents in areas adjoining the cease fire line; (6) persons belonging to "bad pockets".
The court found that some of the sixty two enumerated occupations were not traditional occupations at all and that that list required review.
The court also found that 19 out of the 23 castes had been identified by the Committee as suffering from social disabilities and also educationally and economically backward.
In the case of the remaining four castes, there was nothing to indicate that they were backward classes.
Referring to the third category of small cultivators, it was observed that they could not be said to be 'a homogeneous social section of the people with common trades and identifiable by some common attributes '.
All that could be said about them was that they cultivated or lived on land.
Similarly in regard to the fourth category, it was observed that they also do not belong to a homogeneous section of the people, the only thing common between them being that they had retired from Government service.
In regard to the fifth and sixth category the court observed that lack of communication, inaccessibility, lack 420 of material resources, primitive living conditions and such considerations made the people living in those areas socially and educationally backward.
In State of Uttar Pradesh vs Pradeep Tandon,(1) the Court recognised poverty as a relevant factor but observed that it was not the determining factor discovering poor socially and educationally backward classes.
Even so the backwardness of the hill and Uttrakhand areas in Uttar Pradesh was sustained on economic basis.
It was said, "The Hill and Uttrakhand areas in Uttar Pradesh are instances of socially and educationally backward classes of citizens for those reasons.
Backwardness is judged by economic basis that each region has its own measurable possibilities for the maintenance of human numbers, standards of living and fixed property.
From an economic point of view the classes of citizens are backward when they do not make effective use of resources.
When large areas of land maintain a sparse, disorderly and illiterate population whose property is small and negligible the element of social backwardness is observed.
When effective territorial specialisation is not possible in the absence Of means of communication and technical processes as in the hill and Uttrakhand areas the people are socially backward classes of citizens.
Neglected opportunities and people in remote places raise walls of social backwardness of people." "Educational backwardness is ascertained with reference to those factors.
Where people have traditional apathy for education on account of social and environ mental conditions or occupational handicaps, it is an illustration of educational backwardness.
The hill and Uttrakhand areas are inaccessible.
There is lack of educational institutions and educational aids.
People in the hill and Uttrakhand areas illustrate the educationally backward classes of citizens because lack of educational facilities keep them stagnant and they have neither meaning and values nor awareness for education." (1) , 421 The Court struck down the reservation for candidates from rural areas on the ground that rural population which constituted 80% of A the population of the State could not be a homogeneous class.
Some people in the rural areas might be educationally backward, some might be socially backward, there may be few who were both socially and educationally backward but it could not be said that all citizens residing in rural areas were socially and educationally backward.
The Court while noticing the difficulty of defining the expression 'socially ' and 'educationally ' backward classes of citizens allowed itself to make the observation, "the traditional unchanging occupations of citizens may contribute to social and educational backwardness.
The place of habitation and its environment is also a determining factor in judging the social and educational backwardness.
" In K.S. Jayasree vs State of Kerala,(l) what was in question was a Government Order specifying that only citizens who were members of families which had an aggregate income of less than Rs. 6,000 per annum and which belonged to the caste and community mentioned in the annexures to the Government Order would constitute socially and educationally backward classes for the purposes of article 15(4).
The Court upheld the order and held: "In ascertaining social backwardness of a class of citizens it may not be irrelevant to consider the caste of the group of citizens.
Caste cannot however be made the sole or dominant test.
Social backwardness is in the ultimate analysis the result of poverty to a large extent.
Social backwardness which results from poverty is likely to be aggravated by considerations of their caste.
This shows the relevance of both caste and poverty in determining the backwardness of citizens.
Poverty by itself is not the determining factor of social backwardness.
Poverty is relevant in the context of social backwardness.
The commission found that the lower income group constitutes socially and educationally backward classes.
The basis of the reservation is not income but social and educational backwardness determined on the basis of relevant criteria.
If any classification of backward classes of (1) ; 422 citizens is based solely on the caste of the citizen, it will A perpetuate the vice of caste system.
Again, if the classification is based solely on poverty, it will not be logical. . . . . . . . . . . . . .
Social backwardness which results from poverty is likely to be magnified by caste considerations.
Occupations, place to habitation may also be relevant factors in determining who are socially and educationally backward classes.
Social and economic considerations came into operation in solving the problem and evolving the proper criteria of determining which classes are socially and educationally backward. . . . . . . . . . . . . . . . . .
The problem of determining who are socially and educationally backward classes is undoubtedly not simple.
Sociological and economic considerations come into play in evolving proper criteria for its determination.
This is the function of the State.
The Court 's jurisdiction is to decide whether the tests applied are valid. . . . . . . . . . . . . . . . . . . . .If the classification is based solely on caste of the citizen, it may not be logical.
Social backwardness is the result of poverty to a very large extent.
Caste and Poverty are both relevant for determining the backwardness.
But neither caste alone nor poverty alone will be the determining tests . . . . . . . . . . . . . . . . . . . . . .
Therefore, socially and educationally backward classes of citizens in Article 15(4) cannot be equated with castes.
In R. Chitralekha vs State of Mysore ; this Court said that the classification of backward classes based on economic conditions and occupations does not offend Article 15(4).
" State of Kerala vs N.M. Thomas(1) is a very important case decided by a bench of seven judges consisting of Ray, C.J., Khanna, Mathew, Beg.
Krishna Iyer, Gupta and Murtaza Fazal Ali, JJ.).
The question was about the exemption given to members of the Scheduled Caste and Scheduled Tribes, for a limited period, from passing a (1) ; 423 certain departmental test to qualify for promotion from the post of Lower Division Clerk to the post of Upper Division Clerk.
The rule A providing for the exemption was attacked on the ground that it was violative of article 16(1).
One of the arguments in support of the attack was that the result of application of the rule would be to enable the members of the Scheduled Castes and Scheduled Tribes to claim more than 50% of the posts immediately available for promotion.
The rule was upheld by Ray, C.J., Mathew, Beg, Krishna Iyer and Murtaza Fazal Ali, JJ. and struck down by Khanna and Gupta, JJ.
Ray, C.J. Observed that the equality of opportunity took within its fold "all stages of service from initial appointment to its , termination including promotion".
Articles 14 and 16(1) would not be violated by the rule which would ensure equality of representation in the services for unrepresented classes, after satisfying the basic needs of efficiency of administration.
A rule giving preference to an underrepresented backward community would not contravene articles ]4, 61(1) and 16(2).
Article 16(4) merely removed any doubt in that respect.
The classification of employees belonging to Scheduled Castes and Scheduled Tribes for allowing them an extended period of two years for passing the special tests for promotion was a just and reasonable classification having rational nexus to the object of providing equal opportunity for all citizens in matters relating to employment or appointment to public office.
All legitimate methods were available to strive for equality of opportunity in service under article 16(1).
Article 16(4) enacted one of the methods for achieving equality embodied in article 16(1).
Dealing with the arguments that the rule exceeded the permissible limits of the resulting preference shown to Scheduled Castes.
Ray, C.J. Observed: "The High Court was wrong in basing its conclusion that the result of application of the impeached Rule and the orders are excessive and exorbitant namely that out of 51 posts, 34 were given to the members of the Schedule led Castes and Scheduled Tribes.
The promotions made in the service as a whole are no where near 50 per cent of the total number of posts.
The Scheduled Castes and Scheduled Tribes constitute 10 per cent of the State 's population.
Their share in the gazetted service of the State is said to be 2 per cent 184 out of 8,700.
Their share in the non gazetted appointments is only 7 per cent namely 11,437 out of 1,62,784.
It is, therefore, correct that Rule 13A and the orders are meant to implement 424 not only the direction under article 335, but also the Directive principal under article 46." One other important statement in Ray, CJ. 's judgment is worth noticing.
He said, "Scheduled Castes and Scheduled Tribes are not a caste within the ordinary meaning of caste".
He referred Bhaiyalal vs Harikishan Singh were it had been held that an enquiry was not permissible into the question whether a particular caste was a Scheduled Caste or not in view of the provision of article 341.
Mathew, J. who agreed with the conclusions of Ray, CJ., observed that resort to some sort of proportionate equality was necessary in many spheres to achieve justice.
Equality of opportunity was not simply a matter of legal equally, it depended not merely on the absence of disability but on the presence of abilities.
The Government has an affirmative duty to eliminate inequalities and to provide opportunities for the exercise of human rights and claims.
The Government has an affirmative responsibility for elimination of inequalities, social, economic or otherwise.
There was no reason for the court not to require the State to adopt a standard of proportional equality which took account of the differing conditions and circumstances of a class of citizens whenever those conditions and circumstances stood in the way of their equal access to the enjoyment of basic rights and claims.
article 16(4) was not an exception of article 16(1).
It was an emphatic way of putting the extent to which the equality of opportunity could be carried, viz., even up to the point of making reservation.
The state was entitled to adopt by measure which would ensure an adequate representation of the members of the Scheduled Castes and Scheduled Tribes and justify it as a compensatory measure to ensure equality of opportunity provided the measure did not dispense with the acquisition of the minimum basic qualification necessary for the efficiency of administration.
Beg, J. expressly agreeing with the conclusions of Ray, CJ., Mathew, Krishna Iyer and section M. Fazal Ali, JJ, added that the protection of article 16 continued through out the period of service.
He distinguished Devasana and Balaji on the ground that if the overall position and picture was taken into account by taking the number of employees in all Government departments, the so called favoured class of employees would be less than 50 per cent of the number of posts.
Beg, J., however, thought that article 16(4) was designed 'to reconcile the conflicting pulls of article 16(1) representing the dynamics 425 of justice, conceived of as equality in conditions under which candidates actually compete for posts in Government service, and of articles A 46 and 335 embodying the duties of the State to promote the interest of the economically, educationally and socially backward so as to release them from the clutches of social injustice '.
According to Beg, J. the encroachments on the field of article 16(1) could only be permitted to the extent they were warranted by article 16(4) and to read broader concept of social justice and equality into article 16(1) might stultify the provision itself and make article 16(4) otiose.
We must straight away demur.
There is no reason whatever to narrow the concept of equality in article 16(1) and refuse to read into it broader concepts of social justice and equality.
In fact, it is necessary to read article 16(1) so as not to come into any conflict with articles 46 and 335.
A constitutional document must be read as to synthesis its provisions and avoid disharmony.
To say that equality also means that unequals cannot be treated equally is merely to say what is self evident and common place.
article 14 implies it and we do not see why it is not implied in article 16(1) also.
True, on a first glance, article 16(4) appears to save the power of the State to make provision for the reservation of appointments and posts in favour of any backward class of citizens, but a second look shows that it really recognises a pre existing power and expresses the recognition in an emphatic way lest there should be any doubt caste upon that power.
Such a device is not unknown to legislatures and constitution making bodies.
article 16(4) is more in the nature of a rule of interpretation to guide the construction of Aft.
16(1).
The possibility of interpreting Art 16(1) so as to promote the narrower equality rather than the greater equality is excluded by article 16(4).
Krishna Iyer, J., while upholding the validity of Rule 13AA made it quite clear that article 16(4) was to be viewed not as a saving clause but as a clause inserted in article 16 due to the over anxiety of the draftsman to make matters clear beyond possibility of doubt.
He was emphatic that article 16 applied to appointments and pro motions as well.
He expressed his agreement with Fazal Ali, J. that arithmetical limit of 50 per cent in one year set by some earlier rulings could not be pressed too far and that overall representation in a department did not depend on the recruitment in a particular year, but the total strength of a cadre He also agreed with Fazal Ali, J 's construction of article 16(4) and his view about the 'carry forward ' rule.
But we must point out that Krishna Iyer, J. also made certain observations indicating that he too fell into the elitist 426 trap of viewing the question as one of 'protective discrimination '.
A The question to which he addressed himself was 'Is Rule (13AA) valid as protective discrimination to the Heartiness '.
Viewing the question in that light, he proceeded to utter some words of purported caution about the fills of reservation.
He aid, A word of sociological caution.
In the light of experience, here and elsewhere the danger of 'reservation ', it seems to me, is three fold.
TLC benefits, by and large, are snatched away by the top creamy layer of the 'back ward ' caste or class, thus keeping the weakest among the weak always weak and leaving the fortunate layers to consume the whole cake.
Secondly, this claim is over played extravagantly in democracy by large and vocal groups whose burden of backwardness has been substantially lightened by the march of time and measures of better education and more opportunities of employment but wish to wear the 'weaker section ' label as a means to score over their near equals formally categorised as the upper brackets.
Lastly, a lasting solution to the problem comes only from improvement of social environment, added educational facilities and cross fertilisation of castes by inter caste and inter class marriages sponsored as a massive State programme, and this solution is calculatedly hidden from view by the higher 'backward ' groups with a vested interest in the plums of backwardness.
But social science research, not judicial impressionism, will alone tell the whole truth and a constant process of objective re evaluation of a progress registered by the 'under dog ' categories is essential lest a once deserving 'reservation ' should be degraded into 'reverse discrimination '.
" One cannot quarrel with the statement that social science research and not judicial impressionism should form the basis of examination, by Courts, of the sensitive question of reservation for backward classes.
Earlier we mentioned how the assumption that efficiency will be impaired if reservation exceeds 50 per cent, if reservation is extended to promotional posts or if the carry forward rule is adopted, is not based on any scientific data.
One must, however, enter a caveat to the criticism that the benefits of reservation are often snatched away by the top creamy layer of backward class or caste.
That a few of the seats and posts reserved for backward classes are 427 snatched away by the more fortunate among them is not to say that reservation is not necessary.
This is bound to happen in a competitive society such as ours.
Are not the unreserved seats and posts snatched away, in the same say, by the top creamy layer on society itself ? Seats reserved for the backward classes are taken away by the top layers amongst them on the same principle of merit it on which the unreserved seats are taken away by the top layers of society.
How can it be bad if reserved seats and posts are snatched away by the creamy layer of backward classes, if such snatching away of unreserved posts by the top creamy layer of society it self not bad? This is a necessary concomitant of the very economic and social system under which we are functioning.
The privileged in the whole of society snatch away the unreserved prizes and the privileged among the backward classes snatch away the reserved prizes, This does not render reservation itself bad.
But it does emphasis that mere reservation of a percentage of seats in colleges and a percentage of posts in the services is not enough to solve the problem of backwardness.
Developmental facility and opportunity must be created to enable the really backward to take full advantage of reservations.
It indicates that the ultimate solution lies in measures aimed firmly at all round economic and social development.
There is, of course, the danger that it engenders self denigration and backwardness may become a vested interest.
The further real danger is not reservation but reservation without general all round social and economic development.
The result of such reservation is that all the young men of merit belonging to the Scheduled Castes and Backward classes are literally 'gobbled up ' by the civil services leaving very few educated young men of those classes to make their cause on the social, economic and political fronts.
The very constraints of office restrain those who have become civil servants from championing the cause of their brethern.
There is also the historical truth that oppressed persons who improve their lot, in an effort to forget an unhappy past, often, rush to join the elite and imitate their ways, habits and thoughts.
In the process they tend to forget their less fortunate brethern.
Fazal Ali, J. expressed his satisfaction that the classification made by the Government by Rule 13(AA) was fully justified by article 16 of the Constitution He held that article 16(4) was not to be read in isolation or as an exception to Art 16(1), but was to be read as part and parcel of Art 16(1) and (2).
Dealing with the question of the COCKADED excessive reservation, he emphatically observed, 428 "This means that the reservation should be within A the permissible limits and should not be a cloak to till all the posts belonging to a particular class of citizens and thus violate article 16(1) of the Constitution indirectly.
At the same time clause (4) of article 16 does not fix any limit on the power of the Government to make reservation.
Since clause (4) is a part of article 16 of the Constitution it is manifest that the State cannot be allowed to indulge in excessive reservation so as to defeat the policy contained in article 16(1).
As to what would be a suitable reservation within permissible limits will depend upon the facts and circumstances of each case and no hard and fast rule can be laid down, nor can this matter be reduced to a mathematical formula so as to be adhered to in all cases.
Decided cases of this Court have no doubt laid down that the percentage of reservation should not exceed 50 per cent.
As t read the authorities, this, is, however, a rule of caution and does not exhaust all categories.
Suppose for instance a State has a large number of back ward classes of citizens which constitute 80 per cent of the jobs for them, can it be said that the percentage of reservation is bad and violates the permissible limits of clause (4) of article 16 ? The answer must necessarily be in the negative.
The dominant object of this provision is to take steps to make inadequate representation adquate.
" Fazal Ali, J. mext considered the validity of the 'carry forward ' rule and upheld that rule also.
He said that if in fact the carry forward rule was not allowed to be adopted, it might result in inequality to the backward classes of citizen.
Thus, we see that all five judges who constituted the majority were clear that article 16 applied to all stages of the service of a civil servant, from appointment to retirement, including promotion.
Four out of seven judges Ray C.J., Beg, Krishna Iyer and Fazal Ali JJ., were also of the clear view that the so called fifty percent rule would apply to the total number of posts in the service and not to the number of posts filled up at different times on different occasions.
The reservation in appointments made on any single occasion might well exceed 50 per cent.
Four out of seven judges, Ray, CJ., Mathew, Krishna Iyer and Fazal Ali, JJ., further expressed the view that article 429 16(4) was not an exception to article 16(1) and it was merely an emphatic way of stating that reservation was one of the modes of A achieving equality for the backward class of citizens.
In Akhil Bharativa Soshit Karamchari Sangh vs Union of India & Ors.
,(l) the Court had to consider the question of reservation of posts under the State in favour of Scheduled Castes and Scheduled Tribes and the 'carry forward rule.
The reservation and the rule were upheld by the court.
One of the arguments vigorously advanced was the usual plea that efficiency would suffer.
Krishna Iyer, J. meeting the argument observed: "The sting of the argument against reservation is that it promotes inefficiency in administration, by choosing sub standards candidates in preference to those with better mettle.
Competitive skill is more relevant in higher posts, especially those where selection is made by competitive examinations.
Lesser classes of posts, where promotion is secured mechanically by virtue of seniority except where the candidate is unfit.
do not require a high degree of skill as in the case of selection posts.
(See [1968] I SCR p. 721 at 734).
It is obvious that as between selection and non selection posts the role of merit is functionally more relevant in the former than in the latter.
And if in Rangachari reservation has been held valid in the case of selection posts, such reservation in non selection posts is an afortiori case.
If, in selecting top officers you may reserve posts for SC/ST with lesser merit, how can you rationally argue that for the posts of peons or lower division clerks reservation will spell calamity? The part that efficiency plays is far more in the case of higher posts than in the appointments of the lower posts.
On this approach Annexure K is beyond reproach." "Trite arguments about efficiency and inefficiency are a trifle phoney because, after all, at the higher levels the heartiness harijans girijan appointees are a microscopic percentage and even in the case of Classes III and II posts they are negligible.
The preponderant majority coming from unreserved communities are presumably efficient and the dilution of efficiency caused by the minimal induction of (1) 430 a small percentage of 'reserved ' candidates, cannot affect the over all administrative efficiency significantly.
Indeed, it will be gross exaggeration to visualise a collapse of the Administration because 5 to 10 per cent of the total number of officials in the various classes happen to be sub standard.
Moreover, care has been taken to give in service training and coaching to correct the deficiency.
" While we agree that competitive skill is relevant in higher posts, we do not think it is necessary to be apologetic about reservations in posts, higher or lower so long as the minimum requirements are satisfied.
On the other hand, we have to be apologetic that there still exists a need for reservation.
Earlier we extracted a passage from Tawney 's Equality where he bemoaned how degrading it was for humanity to make much of their intellectual and moral superiority to each other.
Krishna Iyer, J. Once again emphasised that article l 6(4) was one facet of the multi faceted character of the central concept of equality.
One of us (Chinnappa Reddy, J.), in the same case, explained how necessary it was to translate the constitutional guarantees given to the Scheduled Castes, Scheduled Tribes and other backward classes in to reality by necessary State action to protect and nuture those classes of citizens so as to enable them to shake off the heart crushing burden of a thousand years ' deprivation from their shoulders and to claim a fair proportion of participation in the administration.
It was pointed out that article 16(4) in truth flowed out of article 16(1).
It was said, "article 16(4) is not in the nature of an exception to article 16(1).
It is a facet of article 16(1) which fosters and furthers the idea of equality of opportunity with special reference to an under privileged and deprived class of citizens to when egalite do droit (formal or legal equality) is not egalite de fait (practical or factual equality).
It is illustrative of what the State must do to wipe out the distinction between egalite de droit and egalite de fait, It recognises that the right to equality of opportunity includes the right of the under privileged to conditions comparable to or compensatory of those enjoyed by the privileged Equality of opportunity must be such as to yield 'Equality of Results ' and not that which simply enables people, socially and economically better placed, to win against the less fortunate, even when the competition is itself otherwise equitable.
John Rawls in 'A, 431 Theory of Justice ' demands the priority of equality in a distributive sense and the setting up of the Social System "so that no one gains or loses from his arbitrary place in the distribution of natural assets or his own initial position in society without giving or receiving compensatory advantages in return.
" His basic principle of social justice is: "All social primary goods liberty and opportunity, income and wealth, and the bases of self respect are to be distributed equally unless an unequal distribution of any or all these goods is to the advantage of the least favoured." One of the essential elements of his conception of social justice is what he calls the principle of redress: "This is the principle that undeserved inequalities call for redress, and since inequalities of birth and natural endowment are underserved, these inequalities are somehow to be compensated for".
Society must, therefore, treat more favorably those with fewer native assets and those born into less favorable social positions.
" The statement that equality of opportunity must yield equality of results was the philosophical foundation of the fulfillment of article 16(1) in article 16(4).
So we have now noticed the historical and sociological background of Class and Caste, the philosophy, the reason and the rhetoric behind reservation and anti reservation, the Constitutional provisions and the varying judicial stances.
What emerges from these three decades of Parliamentary, Executive, Judicial, Political, and practical wisdom? Clearly there exist large sections of people who are socially and educationally backward, who stand midway between the such as forward classes the landed, the learned, the priestly and the trading classes on the one side and the out caste and depressed classes, i.e. the Scheduled Castes and the Scheduled Tribes on the other.
Poverty, Caste, occupation and habitation are the principal factors which contribute to brand a class as socially backward.
The customs which they honour and observe, the rituals which they fear and practice the habits to which they adapt and conform, the festivals which they enjoy and celebrate and even the Gods that they revere and worship are enlightening elements in recognising their social gradation and backwardness For instance, it may be possible 432 to demonstrate that amongst very many classes, castes or communities, considered socially inferior, Child marriage persists to this day despite the Child Marriage Restraint Act and the Hindu Marriage Act.
Despite the wisdom of legal pandits and learned text books on Hindu Laws proclaiming that Saptapadi is essential to a vaid Hindu Marriage, most of the socially inferior classes rarely follow the rule; they have their own customs and rituals.
Long before the Hindu Widows ' Re marriage Act permitted widows to remarry, long before the Hindu Marriage Act permitted divorce, the custom of the several so called socially inferior classes or communities permitted re marriage of widows and divorce.
The divorce was not by decree of a Court of Law but was granted by a Caste Panchayat.
The Caste Panchayat divorce was impermissible and remarriage of widows was also impermissible among the socially superior classes who used to look down upon these customs as primitive.
The socalled inferior classes did not and do not have recourse either to Purohits to perform marriages or the Courts to dissolve them.
Dress habits also throw light, while it is difficult to imagine, persons belonging to upper caste or occupational groups going about their daily work bare lacked it is not an uncommon right to see persons belonging to lower caste or occupational groups so going about, Work habits also given an indication.
Women belonging to higher social groups would not generally care to serve in other people 's homes or fields.
Again children of lower social groups take to domestic and field work quite early in their lives.
There are certainly good economic reasons for all these factors.
As we said economic situation and social situation often reflect each others.
We mentioned earlier that even the Gods that they worship give occasional clues.
While the Hindu Gods proper, Rama, Krishna, Siva etc. are worshipped by all Hindus generally there are several local Gods and Goddesses in each village worshipped only by the inferior castes.
In Andhra Pradesh, for example, in every village the socalled inferior castes worship the goddesses Sunkalamma, Gangamma, Polimeramma (the Goddess guarding the village boundary), Yellamma (another Goddess guarding the vi11age limits).
They celebrate Hindu festivals like Dasara, Deepawali etc.
but also other festivals in which the upper classes do not participate.
There are many other customs, rituals or habits of significance which if one only cares to study them mark out the socially back ward classes.
The weight to be attached to these factors depends 433 upon the circumstances of the case which can only be revealed by thoughtful, penetrating investigation and analysis.
It cannot be done A by means of mathematical formulae but only by looking in the round or taking a look at the entire situation.
Sometimes it may be possible to readily identify certain castes or social groups as a whole as socially forward or socially backward classes.
Poverty, of course, is basic, being the root cause as well as the rueful result of social and educational backwardness.
But mere poverty it seems is not enough to invite the Constitutional branding, because of the vast majority of the people of our country are poverty struck but some among them are socially and educationally forward and others backward.
In a country like India where 80% of the people live below the bread line, even the majority of the so called socially forward classes may be poor.
For example no one will think of describing Brahmins anywhere in the land as socially and educationally backward however, poor they might be.
The idea that poor Brahmins may also be eligible for the benefits of Articles 15(4) and 16(4) is too grotesque even to be considered.
Similarly no one can possibly claim that the patels of Gujarat, the Kayasthas of Bengal, the Reddys and Kammas of Andhra Pradesh are socially backward classes, despite the fact that the majority of them may be poor farmers and agricultural laborers.
In the rural, social ladder they are indeed high up and despite the economic backwardness of sizeable sections of them, they can not be branded as socially backward.
On the other hand, there are several castes or other social groups who have only to be named to be immediately identified as socially and economically backward classes, identified as socially backward classes.
Again illustrating from rural Andhra Pradesh, one can easily identify caste groups, such as, Kommaras (who traditionally carry on the occupation of black smiths), Kummaris (who traditionally carry on the occupation of potters), Vadderas (who traditionally carry on the occupation of Stone breaking), Mangalis (who traditionally carry on the occupation of Barbers) and Besthas (who traditionally carry on the occupation of Fisher folk), etc.
as backward classes by the mere mention of their castes.
True, a few members of those caste or social groups may have progressed far enough and forged ahead so as to compare favourably with the leading forward classes economically, socially and educationally.
In such cases, perhaps an upper income ceiling would secure the benefit of reservation to such of those members of the class who really deserve it.
But one is entitled to ask what is to happen to the poorer sections of the forward classes? The State will have to and it is the duty of the State so to do to 434 discover other means of assisting them, means other than reservations A under articles 15(4) and 16(4).
All this only emphasises that in the ultimate analysis, attainment of economic equality is the final and the only solution to the besetting problems.
There is also one danger in adopting individual poverty as the criterion to identify a member of the backward classes, which needs to be pointed out.
How is one n to identify the individuals who are economically backward and, therefore, to be classified as socially and educationally backward? Are all those who produce certificates from an official or a legislator or some other authority that their family incomes are less than a certain figure to be so classified? It should be easy to visualise who will obtain such certificates? Of course, the rural elite, the upper classes of the rural areas who don 't pay any income tax because agricultural income is not taxed.
Who will find it difficult or impossible to obtain such certificates? Of course, the truly lower classes who need them most. Class poverty, not individual poverty, is therefore the primary test.
Other ancillary tests are the way of life, the standard of living, the place in the social hierarchy, the habits and customs, etc. etc.
Despite individual exceptions, it may be possible and easy to identify socially backwardness with reference to caste, with reference to residence, with reference to occupation or some other dominant feature.
Notwithstanding our antipathy to caste and sub regionalism, these are facts of life which cannot be wished away.
If they reflect poverty which is the primary source of social and educational backwardness, they must be recognised for what they are along with other less primary sources There is and there can be nothing wrong in recognising poverty wherever it is reflected as an identifiable group phenomena whether you see it as a caste group, a sub regional group, an occupational group or some other class.
Once the relevant conditions are taken into consideration, how and where to draw the line is a question for each State to consider since the economic and social conditions differ from area.
Once the relevant conditions are taken into consideration and the backwardness of a class of people is determined, it will not be for the court to interfere in the matter.
But, lest there be any misunderstanding, judicial review will rot stand excluded .
SEN, J.
In view of the importance of the question involved, would like to add a few words of my own.
435 The real question raised is not of excessive reservation for the advancement of socially and educationally backward classes of citizens or for the Scheduled Castes and Scheduled Tribes under article 15(4) or for reservation of appointments or posts in favour of any backward classes of citizens under article 16(4) which, in the opinion of the State, is not adequately represented in the services under the State but the question is as to the identification of the socially and educationally backward classes of citizens for whose advancement the State may make special provisions under article 1 '(4) like those for the Scheduled Castes and Scheduled Tribes.
Conceptually, the making of special provisions for the advancement of backward classes of citizens under article 15(4) and the system of reservation of appointments or posts as envisaged by article 16(4) as guaranteed in the Constitution, is a national commitment and a historical need to eradicate age old social disparities in our country.
But unfortunately the policy of reservation hitherto formulated by the Government for the upliftment of such socially and educationally backward classes of citizens is caste oriented while the policy should be based on economic criteria.
Then alone the element of caste in making such special provisions or reservations under articles 15(4) and 16(4) can be removed.
At present only the privileged groups within the backward classes i.e. the forwards among the backward classes reap all the benefits of such reservation with the result that the lowest of the low are stricken with poverty and therefore socially and economically backward remain deprived though these constitutional provisions under articles (15(4) and 16(4) are meant for their advancement.
After 37 years of attainment of independence it cannot be seriously disputed that poverty is the root cause of social and economic backwardness.
The problem is about identification of the backward classes for whose benefit the State may make special provisions under article 15(4).
Or for reservation of appointments or posts under article 16(4).
In view of the widespread public unrest in the State of Madhya Pradesh and Gujarat in recent days, the Government at the Centre must have a second look at the whole system of reservation.
It is true that mere economic backwardness would not satisfy the test of educational and social backwardness under article IS(4) but the question is as to the criteria to be adopted.
Economic backwardness is only one of the tests to determine social and educational backwardness.
If that test were to be the sole criterion of social and educational backwardness, the reservation for the advancement of such classes to special treatment under article 15(4) would fail.
436 In retrospect, the answer to the question as to who are the A members of socially and educationally backward classes for whose advancement the State may make special provisions under article 15(4) still eludes us.
Why should not the expression 'backward classes ' be treated as synonymous with the weaker sections of the society? Does the word 'class ' denote a caste or sub caste among Hindus so far as Hindus are concerned, or a section or a group so far as Muslim, Christian or other religious communities and denomination are concerned? In my considered opinion.
the predominant and the only factor for making special provisions under article 15(4) or for reservations of posts and appointments under article 16(4) should be poverty, and caste or a sub caste or a group should be used only for purposes of identification of persons comparable to Scheduled Castes or Scheduled Tribes, till such members of backward classes attain a state of enlightment and there is eradication of poverty amongst them and they become equal partners in 8 new social order in our national life.
In this context, I must point out that the adequacy or otherwise of representation of the backward classes in the services has to be determined with reference to the percentage of that class in the population and the total strength of the service as a whole.
The representation does not have to exactly correspond to the percentage of that class in the population; it just to be adequate.
Moreover, in the case of services the extent of representation has to be considered by taking into account the number of members of that class in the service, whether they are holding reserved or unreserved posts.
I cannot overemphasize the need for a rational examination of the 17 whole question of reservation in the light of the observation made by us.
The State should give due importance and effect to the dual constitutional mandates of maintenance of efficiency and the equality of opportunity for all persons.
The nature and extent of reservations must be rational and reasonable.
It may be, and often is difficult for the Court to draw the line in advance which the State ought not to cross, but it is never difficult for the Court to know that an invasion across the border, however ill defined, has taken place.
The Courts have neither the expertise nor the sociological knowledge to define or lay down the criteria for determining what are 'socially and educationally backward classes of citizens ' within the meaning of Art 15(4) which enables the State to make 'special provisions for the advancement ' of such classes notwithstanding the command of article 15(2) that the State shall not discriminate against and citizens on the 437 ground only of religion, race, caste, descent, place of birth, residence or any of them.
article 340 provides for the appointment of a Commission to 'investigate the conditions of socially and educationally backward classes within the territory of India and the difficulties under which they labour and to make recommendations as to the steps that should be taken by the Union or any State to remove such difficulties and to improve their condition.
The state of backwardness of any class of citizens is a fact situation which needs investigation and determination by a fact finding body which has the expertise and the machinery for collecting relevant data.
The Constitution has provided for the appointment of such a Commission for Backward Classes by the President under article 340 to make recommendations and left it to the State to make special provisions for the advancement of such backward classes.
The Court is ill equipped to perform the task of determining whether a class of citizens is socially and educationally backward.
This Court has, however, a duty to interpret the Constitution and to see what it means and intends when it makes provision for the advancement of socially and educationally back ward classes.
In considering this situation then, we must never forget that it is the Constitution we are expounding.
Except for this the Court has very little or no function.
Questions as to the validity or otherwise of reservations have been agitated several times before this Court and resolved.
The frequency and vigour with which these questions are raised is a disturbing indication of the tension and unease in society in regard to the manner in which article 15(4) and article 16(4) are operated by the State.
The Preamble to our Constitution shows the nation 's resolve to secure to all its citizens: Justice Social, economic and political.
The State 's objective of bringing about and maintaining social justice must be achieved reasonably having regard to the interests of all.
Irrational and unreasonable moves by the State will slowly but surely tear apart the fabric of society.
It is primarily the duty and function of the State to inject moderation into the decisions taken under articles 15(4) and 16(4), because justice lives in the hearts of men and growing sense of injustice and reverse discrimination, fuelled by unwise State action, will destroy, not advance, social justice.
If the State contravenes the constitutional mandates of article 16(1) and article 335, this Court will of course, have to perform its duty.
The extent of reservation under article 15(4) and article 16(4) must necessarily vary from State to State and from region to region within 438 a State, depending upon the conditions prevailing in a particular A State or region, of the Backward Classes.
r do feel that the Central Government should consider the feasibility of appointing a permanent National Commission for Backward Classes which must constantly carry out sociological and economic study from State to State and from region to region within a State.
The framers of the Constitution by enacting article 340 clearly envisaged the setting up of such a high powered National Commission for Backward classes at the Centre.
These problems can never be resolved through litigation in the Courts.
I wish to add that the doctrine of protective discrimination embodied in articles 15(4) and 16(4) and the mandate of article 29(2) cannot be stretched beyond a particular limit.
The State exists to serve its people.
There are some services where expertise and skill are of the essence.
For example, a hospital run by the State serves the ailing members of the public who need medical aid.
Medical services directly affect and deal with the health and life of the populace.
Professional expertise, term of knowledge and experience, of a high degree of technical knowledge and operational skill is required of pilots and aviation engineers.
The lives of citizens depend on such persons.
There are other similar fields of governmental activity where professional, technological, scientific or other special skill is called for.
In such services or posts under the Union or States, we think there can be no room for reservation of posts; merit alone must be the sole and decisive consideration for appointments.
Reasons for this decision will follow.
VENKATARAMIAH, J.
The constitutional validity of certain Government orders issued by the Government of the State of Karnataka making provisions for reservation of some seats in technical institutions and some posts in the Government services respectively under Article 15(4) and Article 16(4) of the Constitution of India for being filled up by students, `candidates, as the case may be, belonging to certain castes, tribes and communities which in the opinion of the State Government constituted backward classes (other than the Scheduled Castes and the Scheduled Tribes) is questioned in these petitions.
The questions involved in these cases fare delicate ones and have, therefore, to be tackled with great caution.
The issues raised here and the decision rendered on them are bound to have a great 439 impact on society.
They are indeed highly sensitive issues.
A superficial approach to the problem has, therefore, to be avoided.
A The questions have to be tackled with sympathy for persons who are really in need of the benign assistance at the hands of the State and with due regard to the interests of the general public.
"India 's vast and unparalleled experiment with 'protective ' or 'compensatory ' discrimination in favour of 'backward sections ' of her population betokens a generosity and farsightedness that are rare among nations.
The operation of such a preferential principle involves formidable burdens of policy making and administration in a developing nation.
It also places upon the judiciary tasks of great complexity and delicacy.
The courts must guard against abuses of the preferential principle while at the same time insuring that the government has sufficient leeway to devise effective use of the broad powers which the Constitution places at its disposal".
These are the wise words of Marc Galanter, a member of the faculty on social Sciences, University of Chicago, who has made a special study of the problem of the Indian backward classes.
The very fact that the governmental agencies and 'above all the courts have been obliged to examine the constitutional principles in the light of the egalitarian pressures has in its turn opened up hardly foreseen complexities that had lain buried in the doctrine of equality '.
The society which cherishes the ideal of equality has to define the meaning and content of the concept of equality and the choices open to it to bring about an egalitarian society would always be political.
But the courts have been forced to scrutinise a variety of choices, while the society for which they have to answer has been issuing a proliferation of demands.
What is 'coming about, in short, is a transformation of consciousness which is tinged with sensations of in justice and exploitation '.
Many inequalities in the past seemed almost to have been part of the order of nature. 'The categories of equality can thus in a sense be seen to correspond to levels of awareness.
Perhaps not all inequalities can ever be rectified and it is certain that some can be rectified only by creating new inequalities and new grievances.
It is this that has made the judiciary the fulcrum of such continuous tension for it is the judiciary and above all the Supreme Court which has the duty of mediating these conflicting demands back to society through the prism of constitutional interpretation '.
The courts, however, deal with the problems that society presents. 'Levels of awareness and corresponding senses of grievance have arisen at different times for particular historical reasons often tend 440 ing to differentiate among the categories of equality rather than unifying them.
Inequalities of class, race, religion and sex have presented themselves at different periods as primary grievances '.
Equality of opportunity revolves around two dominant principles (1) the traditional value of equality of opportunity and (2) the newly appreciated not newly conceived idea of equality of results. 'Social justice may demand and political interests may make expedient a policy of correction in favour of individual members of minorities or communities.
But at this point whenever any action was taken the principle of individual equality of opportunity lost its direction.
Such affirmative action played off not one individual of one group against another of another group, but the present against the past.
In past many privileged persons of mediocre ability had benefited from the indulgence of a system that unquestionably biased in favour of higher castes. ' 'Individual aspirations claim the protection of society 's rules.
But they are not always in harmony and sometimes conflict with the same society 's broad interest in achieving certain kinds of racial or group balance. ' But rectification of imbalance also sometimes tends towards inequality. 'Societies do not work on absolute rationality, excess of rationality often tends to dehumanise human relations '.
The courts are also reminded that for those who are suffering from deprivation of inalienable rights, gradualism can never be a sufficient remedy because as Ralph Buoche observed 'inalienable rights cannot be enjoyed posthumously '.
Ours is a 'struggle for status, a struggle to take democracy off parchment and give it life '. 'Social injustice always balances its books with red ink '.
Neither the caprice of personal taste nor the protection of vested interests can be stand as reasons for restricting opportunities of any appropriately qualified person.
These are the considerations which sometimes may be conflicting that should weigh with the courts dealing with cases arising out of the doctrine of equality.
It should, however, be remembered that the courts by themselves are not in a position to bring the concept of equality into fruitful action.
They should be supported by the will of the people, of the Government and of the legislators.
There should be an emergence of united action on the part of all segments of human society.
This is not all.
Mere will to bring about equality under the existing economic level might worsen the situation.
There should be at the same time a united action to increase the national resources so that the operation of equality will be less burdensome 441 and every member of the society is carried to a higher social and economic level leaving nobody below a minimum which guarantees all the basic human needs to every member of the society.
If there is no united action the pronouncements by courts would become empty words as many of the high principles adumberated in the chapter on the Directive Principles of State Policy in the Constitution have turned out to be owing to several factors which need not be detailed here.
We shall proceed to consider this case against this background.
In this case, the Court is called upon to resolve the conflict between 'the meritarian principle and the compensatory principle ' in the matter of admissions into institutions imparting higher education and of entry into Government service in the State of Karnataka.
All the contestants depend upon one or the other clauses of the Constitution in support of their case.
Hence the problem is rendered more difficult.
Those who argue in support of merit contend that the State should remove all man made obstacles which are in the way of an Individual and allow him to attain his goal in an atmosphere of free competition relying upon his own natural skill and intelligence.
Those who argue for compensatory principle contend that in order that the competition may be 'fair and not just free ' it is the duty of the State to take note of the unequal situation of the individuals concerned which has led to unequal capacities amongst them and to reduce the rigours of free competition which may, unless looked into by the State, lead to perpetual denial of equality of opportunity to the weak and the neglected sections of society.
This argument is based on the well founded assumption that unequal conditions of cultural life at home cause unequal cultural development of children belonging to different strata of society.
The need for social action is necessitated by the environment factors and living conditions of the individuals concerned.
The application of the principle of individual merit, unmitigated by other considerations, may quite often lead to inhuman results.
The following illustration given by Bernard Williams establishes the above statement: "Suppose that in a certain society great prestige is attached to membership of a warrior class, the duties of which require great physical strength.
This class has in the past been recruited from certain wealthy families 442 only ; but egalitarian reforms achieve a change in the rules, by which warriors are recruited from all sections of the society, on the results of a suitable competition, The effect of this, however, is that the wealthy families still provide virtually all the warriors, because the rest of the populage is so under nourished by reason of poverty that their physical strength is inferior to that of the weal thy and well no nourished.
The reformers protest that equality of opportunity has not really been achieved; the wealthy reply that in fact it has, and that the poor now have the opportunity of becoming warriors it is just bad luck that their characteristics are such that they do not pass the test. 'We are not, ' they might say, 'excluding anyone for being poor, we exclude people for being weak, and it is unfortunate that those who are poor are also weak. ' This answer would seem to most people feeble and even cynical This is for reasons similar to those discused before in connection with equality before the law; that the supposed equality of opportunity is quite empty indeed, one may say any that it does not really exist unless it is made more effective than this.
For one knows that it could be made more effective: one knows that there is a casual connection between being poor and being under nourished, and between being undernourished and being physically weak.
One suppose further that something could be done subject to whatever economic conditions obtain in the imagined society to alter the distribution of wealth.
All this being so, the appeal by the wealthy to the 'bad luck ' of the poor must appear as disingenuous.
" The former princely State of Mysore which now forms part of the State of Karnataka is one of the earliest States in the country in which the system of reservation for backward classes in public ser vices was introduced.
In 1918, the Government of His Highness the Maharaja of Mysore appointed a committee under the chairmanship of Sir Leslie C. Miller, Chief Justice of the Chief Court of Mysore to investigate and report on the problem of backward classes.
The questions referred to that Committee were (i) changes needed in the then existing rules of recruitment to public services; (ii) special 443 facilities to encourage higher and professional education among the members of backward classes and (iii) any other special measures which might be taken to increase the representation of backward communities in the public services without materially affecting the efficiency, due regard being paid also to the general good accruing to the State by a wider diffusion of education and feeling of increased status which will thereby be produced in the backward communities.
It is significant that the expression 'backward classes ' and 'backward communities ' were used almost interchangeably and that the idea contained in Article 335 of the Constitution that any reservation made should not impair efficiency was anticipated more than three decades before the Constitution was enacted.
The Committee submitted its report in 1921 containing its opinion that all communities in the State other than Brahmins should be understood as backward communities regarding whom it made certain recommendations.
The Government orders issued on the basis of that Report continued to be in force till 1956 i.e. the reorganisation of States which brought together five integrating units the former State of Maysore (including Bellary District), Coorg, four districts of Bombay, certain portions of the State of Hyderabad and the district of South Kanara and the Kollegal Taluk which formerly formed part of the State of Madras.
There were different lists of backward communities in the five integrating units and they were allowed to continue for sometime even after the reorganisation of States In order to bring about uniformity the State Government issued a notification containing the list of backward classes for the purpose of Article 15(4) of the Constitution at the beginning of 1959.
The validity of that notification and of another notification issued thereafter on the same topic which according to the State Government had treated all persons except Brahmins.
Banias and Kayasthas as backward communities was challenged before the High Court of Mysore in Rama Krishna Singh vs State of Maysore.(l) The two notifications were struck down by the HighCourt.
The High Court held that inasmuch as the impugned notifications contained a list of backward classes including 95% of the population of the State and all Hindu communities other than Brahmins, Banias and Kayasthas and all other non Hindu communities in the State except Anglo Indians and Parsees had been treated as backward classes it resulted more in a discrimination against the few excluded communities consisting of about 5% of the total population rather than making provision for socially and (1) A.I.R. 1960 Mys.
444 educationally backward classes.
The High Court held that making A provision for communities which were slightly backward to the so called forward communities did not amount to making provision for the communities which really needed protection under Article 15(4) of the Constitution.
The argument of the petitioners in that case that socially and educationally backward classes can in no case be determined on the basis of caste was, however, rejected.
After the above decision was rendered by the High Court, the State Government constituted a Committee OD January 8, 1960 under the Chairmanship of Dr. R. Nagan Gowda for the purpose of determining the criteria for the classification of backward classes in the State with the following terms of reference: ( I) to suggest the criteria to be adopted in determining which sections of the people in the State should be treated as socially and educationally backward and (2) to suggest the exact manner in which the criteria thus indicated should be followed to enable the State Government to determine the persons who should secure such preference as may be determined by Government in respect of admissions to technical institutions and appointment to Government services.
The said committee submitted its Interim Report on February 19, 1960.
On the basis of the Interim Report of the Committee, the State Government passed an order dated June 9, 1960 regarding admissions to professional and technical institutions reserving 22% of seats for backward classes, 15% for Scheduled Castes and 2% for Scheduled Tribes and the remaining 60% of seats were allowed to be filled upon the basis of merit.
The above Government order was, challenged before the High Court of Mysore in S.A. Partha & Ors.
vs The State of Mysore & Ors.(l) The High Court found that the direction contained in the Government order to the effect that if any seat or seats reserved for candidates belonging to the Scheduled Castes and Scheduled Tribes remained unfilled, the same shall be filled by candidates of other backward classes was unconstitutional.
It also gave some directions regarding the manner in which the calculation of the quota of reservation should be made.
Thereafter the Final Report was submitted by the Nagan Gowda Committee on May 16, 1961 After taking into consideration the recommendations made in the said Report, the State Government issued an order for the purpose of Article 15 (4) of the Constitution on July 10, 1961.
By that order, the State Government specified 81 classes of people as backward classes and 13 S classes of people as more backward classes and reserved 30% of (1) A.I.R. 1961 Mys.
445 seats in the professional and technical institutions for backward and more backward classes.
15% and 3% of the seats were reserved for Scheduled Castes and Scheduled Tribes respectively and the remaining 52% of the seats were allowed to be filled up on merit.
The above order was superseded by a fresh Government order made on July 31, 1962 for the purpose of Article 15 (4).
By this new order, 28% of the seats were reserved for the backward classes, 22% for the more backward classes, 15 per cent for the Scheduled Castes and 3 per cent for the Scheduled Tribes.
Thus 68 per cent of the seats were reserved under Article 15 (4) of the Constitution and only 32 per cent of the seats became available for being filled up on the basis of merit.
This order was challenged before this Court under Article 32 of the Constitution in M.R. Balaji and Ors.
vs State of Mysore.(1) In the decision rendered in that case which is considered to be land mark in the constitutional pronouncement made by this Court, Gajendragadkar, J. (as he then was) explained the meaning of the term 'socially and educationally backward classes ' appearing in Article 15 (4) of the Constitution at pages 459 461 thus: "The backwardness under article 15 (4) must be social and educational.
It is not either social or educational but it is both social and educational; and that takes us to the question as to how social and educational backwardness has to be determined.
Let us take the question of social backwardness first.
By what test should it be decided whether a particular class is socially backward or not ? The group of citizens to whom Article 15 (4) applies are described as 'classes of citizens ', not as castes of citizens.
A class, according to the dictionary meaning, shows division of society according to status, rank or caste.
In the Hindu social structure, caste, unfortunately plays an important part in determining the status of the citizen.
Though according to sociologists and Vedic scholars, the caste system may have originally begun on occupational or functional basis, in course of time, it became rigid and inflexible.
The history of the growth of caste system shows that its original functional and occupational basis was later over burdened with considerations of purity based on ritual (1) [1963] Supp.
S.C.R. 439, 446 concepts and that led to its ramifications which introduced inflexibility and rigidity.
This artificial growth inevitably tended to create a feeling of superiority and inferiority and to foster narrow caste loyalties.
Therefore, in dealing with the question as to whether any class of citizens is socially backward or not, it may not be 13 irrelevant to consider the caste of the said group of citizens.
In this connection, it is, however, necessary to bear in mind that the special provision is contemplated for classes of citizens and not for individual citizens as such, and so, though the caste of the group of citizens may be relevant, its importance should not be exaggerated.
If the classification of backward classes of citizens was based solely on the caste of the citizen, it may not always be logical and may perhaps contain the vice of perpetuating the castes themselves.
Besides, if the caste of the group of citizens was made the sole basis for determining the social backwardness of the said group, that test would inevitably break down in relation to many sections of Indian Society which do not recognise castes in the conventional sense known to Hindu Society.
How is one going to decide whether Muslims, Christians or Jains, or even Lingayats are socially, backward or not ? The test of castes would be inapplicable to those groups, but that would hardly justify the exclusion of these groups in to from the operation of article 15 (4).
It is not unlikely that in some States some Muslims or Christians or Jains forming groups may be socially backward.
That is why we think that though castes in relation to Hindus may be a relevant factor to consider in determining the social backwardness of groups or classes of citizens, it cannot be made the sole or the dominant test in that behalf.
Social backwardness is on the ultimate analysis the result of poverty, to a very large extent.
The classes of citizens who are deplorably poor automatically became socially backward.
They do not enjoy a status in society and have, therefore, to be content to take a backward seat.
It is true that social backwardness which results from poverty is likely lo be aggravated by considerations of caste to which the poor citizens may belong, but that 447 only shows the relevance of both caste and poverty in determining the backwardness of citizens.
A The occupations of citizens may also contribute to make classes of citizens Socially backward.
There are some occupations which are treated as inferior according to conventional beliefs and classes of citizens who follow these occupations are apt to become socially backward.
The place of habitation also plays not a minor part in determining the backwardness of a community of persons.
In a sense, the problem of social backwardness is the problem of Rural India and in that behalf, classes of citizens occupying a socially backward position in rural area fall within the purview of article 15 (4) The problem of determining who are socially backward classes is undoubtedly very compleat Sociological, social and economic considerations come into play in solving the problem and evolving proper criteria for determining which classes are socially backward is obviously a very difficult task; it will need an elaborate investigation and collection of data and examining the said data in a rational and scientific way.
That is the function of the State which purports to act under Art 15 (4).
All that this Court is called upon to do in dealing which the present petitions is to decide whether the tests applied by the impugned order are valid under article 15 (4).
If it appears that the test applied by the order in that behalf is improper and invalid, then the classification of socially back ward classes based on that test will have to be held to be inconsistent with the requirements of article 15 (4).
" Dealing with the question of determination of the classes which were educationally backward, Gajendragadkar, J. (as he then was) observed in the same case at pages 463 464 thus: "It may be conceded that in determining the educational backwardness of a class of citizens the literacy test supplied by the Census Reports may not be adequate; but it is doubtful if the test of the average of student population in the last three High School classes is appropriate in determining the educational backwardness.
Having regard to the fact that the test is intended to determine who are educationally backward classes, it may 448 not be necessary or proper to put the test as high as has been done by the Committee.
But even assuming that the test applied is rational and permissible under article 15 (4), the question still remains as to whether it would be legitimate to treat castes or communities which are just below the State average as educationally backward classes.
If the State average is 6.9 per thousand, a community which satisfies the said test or is just below the said test cannot be regarded as backward.
It is only communities which are well below the State average that can properly be regarded as educationally backward classes of citizens.
Classes of citizens whose average of student population works below 50 per cent of the State average are obviously educationally backward classes of citizens.
Therefore, in our opinion, the State was not justified in including in the list of Backward Classes, castes or communities whose average of student population per thousand was slightly above or very near, or just below the State average." (underlining by us) Applying the above rule the Court held that the inclusion of members of the Lingayat community in the list of backward classes was erroneous.
On the question of extent of reservation that can be made, this Court observed in the aforesaid case at pages 469 471 thus: "The learned Advocate General has suggested that reservation of a large number of seats for the weaker sections of the society would not affect either the depth or efficiency of scholarship at all, and in support of this argument, he has relied on the observations made by the Backward Classes Commission that it found no complaint in the States of Madras, Andhra, Travancore Cochin and Mysore where the system of recruiting candidates from other Backward Classes to the reserve quota has been in vogue for several decades.
The Committee further observed that the representatives of the upper classes did not complain about any lack of efficiency in the offices recruited by reservation (p. 135).
This opinion, however, is plainly inconsistent with what is bound to be the inevitable consequence of reservation in higher university education.
If admission to professional and technical colleges is unduly liberalist it would be idle to contend 449 that the quality of our graduates will not suffer.
That is not to say that reservation should not be adopted; A reservation should and must be adopted to advance the prospects of the weaker sections of society, but in providing for special measures in that behalf care should be taken not to exclude admission to higher educational centres to deserving and qualified candidates of other communities.
A special provision contemplated by article 15 (4) like reservation of posts and appointments contemplated by article 16 (4) must be within reasonable limits.
The interests of weaker sections of society which are a first charge on the States and the Center have to be adjusted with the interests of the community as a whole.
The adjustment of these competing claims is undoubtedly a difficult matter, but if under the guise of making a special provision, a State reserves practically all tho seats available in all the colleges, that clearly would be subverting the object of article 15 (4).
In this matter again, we are reluctant to say definitely what would be a proper provision to make.
Speaking generally and in a broad way, a special provision should be less than 50 per cent; how much less than 50 per cent would depend upon the relevant prevailing circumstances in each case.
In this particular case, it is remarkable that when the State issued its order on July 10, 1961, it emphatically expressed its opinion that the reservation of 68 per cent recommended by the `Nagging Gowada Committee would not be in the larger interests of the State.
What happened between July 10, 1961 and July 31, 1962, does not appear on the record.
But the State changed its mind and adopted the recommendation of the Committee ignoring its earlier decision that the said recommendation was contrary to the larger interests of the State.
In our opinion, when the State makes a special provision for the advancement of the weaker sections of society specified in article 15 (4), it has to approach its task objectively and in a rational manner.
Undoubtedly, it has to take reasonable and even generous steps to help the advancement of weaker elements; the extent of the problem must be weighed, the requirements of the community at large must be borne in mind and a formula must be evolved which would strike a reasonable balance between the several relevant considerations.
Therefore, 450 we are satisfied that the reservation of 68 per cent directed by the impugned order is plainly inconsistent with article 15 (4).
" (Emphasis added) The petition was thus allowed by this Court.
Then came the Government order dated July 26, 1963 which directed that 30 per cent of the seats in professional and technical colleges and institutions should be reserved for backward classes as defined in that order and that 18 per cent of the seats should be reserved for the Scheduled Castes and Scheduled Tribes.
The criteria laid down in that order for determining social and economic backwardness were two fold income and occupation.
It stated that those who followed occupations of agriculture, petty business, inferior service, crafts or other occupations involving manual labour and whose family income was less than Rs. 1,2001 per annum were to be treated as belonging to backward classes.
This order was questioned before the High Court in G. Viswanath vs Govt.
of Mysore and Ors.(l) by some petitioners on various grounds.
While dismissing the said petitions, the High Court observed that the determination of the backward classes without reference to caste altogether was not correct and it expressed the hope that the State would make a more appropriate classification lest its bonafides should be questioned.
In the appeal filed against this judgment in R. Chitralekha and Anr.
vs State of Mysore and Ors.
,(2) the correctness of the above observation was questioned.
Dealing with that question Subba Rao, J. (as he then was), who spoke for the majority, said that the observations of the High Court referred to above were inconsistent with the decision in Balaji 's case (supra).
After referring to the relevant observations made by this Court in Balaji ' case (supra), Subba Rao, J. (as he then was) observed at pages 386 387 thus: "Two principles stand out prominently from the said observations, namely, (i) the caste of a group of citizens may be a relevant circumstance in ascertaining their social backwardness; and (ii) though it is a relevant factor to determine the social backwardness of a class of citizens, it cannot be the sole or dominant test in that behalf.
(1) A.I.R. 1964 Mys. 132.
(2) ; 451 The observations extracted in the judgment of the High Court appear to be in conflict with the observations Of A this Court.
While this Court said that caste is only a relevant circumstance and that it cannot be the dominant test in ascertaining the backwardness of a class of citizens, the High Court said that it is an important basis in determining the class of backward Hindus and that the Government should have adopted caste as one of the tests As the said observations made by the High Court may lead to some confusion in the mind of the authority concerned who may be entrusted with the duty of prescribing the rules for ascertaining the backwardness of classes of citizens within the meaning of article 15 (4) of the Constitution, we would hasten to make it clear that caste is only a relevant circumstance in ascertaining the backwardness of a class and there is nothing in the judgment of this Court which precludes the authority concerned from determining the social backwardness of a group of citizens if it can do so without reference to caste.
While this Court has not excluded caste from ascertaining the backwardness of a class of citizens, it has not made it one of the compelling circumstances according a basis for the ascertainment of backwardness of a class.
To put it differently, the authority concerned may take caste into consideration in ascertaining the backwardness of a group of persons; but, if it does not, its order will not be bad on that account, if it can ascertain the backwardness of a group of persons on the basis of other relevant criteria." (Underlining by us) Proceeding further, Subba Rao, J. (as he then was) observed at pages 388 389 thus: "The important factor to be noticed in article 5(4) is that it does not speak of castes, but only speaks Or classes.
If the makers of the Constitution intended to take castes also as units of social and educational backwardness, they would have said so as they have said in the case of the Scheduled Castes and the Scheduled Tribes.
Though it may be suggested that the wider expression "classes" is used in cl.
(4) of article 15 as there are communities without castes, if take intention was to equate classes with castes, 452 nothing prevented the marks of the Constitution from A using the empression "backwarded classes or castes".
The juxtaposition of the expression "backward classes" and "Scheduled Castes" in article 15(4) leads to a reasonable inference that the empression "classes" is not synonymous with castes.
It may be that for ascertaining whether a particular citizen or a group of citizens belong to a backward class or not, his or their caste may have some relevance, but it can not be either the sole or the dominant criterion for ascertaining the class to which he or they belong.
This interpretation will carry out the intention of the Constitution expressed in the aforesaid Articles.
It helps the really backward classes instead or promoting the interests of individuals or groups who, though they belong to a particular caste a majority whereof is socially and educationally backward, really belong to a class which is socially and educationally advanced.
To illustrate, take a caste in a State which is numerically the largest therein.
It may be that though a majority of the people in that caste are socially and educationally backward, an effective minority may be socially and educationally far more advanced than another small sub caste the total number of which is far less then the said minority.
If we interpret the empression "classes" as "castes" the object of the Constitution will be frustrated and the people who do not deserve any adventitious aid may get it to the exclusion of those who really deserve.
This anomally will not arise if, without equating caste with class, caste is taken as only one of the considerations to ascertain whether a person belongs to a backward class or not.
On the other hand, if the entire sub caste, by and large, is backward, it may be included in the Scheduled Castes by following the appropriate procedure laid down by the Constitution".
In 1972, tho State Government appointed the Karnataka Backward Classes Commission under the chairmanship of Shri L. G. Havanur which after an elaborate enquiry submitted its Report on November 19, 1975 in four massive volumes, the first volume containing two parts.
rt is stated that the commission counted a socio economic survey of 378 villages and town/city blocks in their entirety covering more than 3,55,000 individuals belonging to 453 171 castes and communities with the help of more than 425 investigators and supervisors.
About 365 witnesses were examined by A the Commission.
The Report of the Commission is full of tabular statements and it refer to a number of writings by sociologists, demographers, jurists and persons will versed in social sciences.
The work of the Commission deserves to be commended as such an extensive investigation into the conditions of backward classes had not been conducted in the State so far Perhaps till than in no other part of India, such on elaborate investigation had been carried out with reference to so many minute details.
The commission recommended that persons belonging to backward classes for purpose of Article 15(4) of the Constitution should be divided into three groups (a) backward communities consisting of 15 castes, (b) backward castes consisting of 128 castes and (c) backward tribes consisting of 62 tribes.
For purposes Or Article 16(4) of the Constitution, the Commission divided the backward classes into (a) backward communities consisting of 9 castes.
(b) backward castes consisting of 115 castes and (c) backward tribes consisting of 61 tribes.
According to the Commission, backward communities were those castes whose student average of students passing section section L. C. examination in 1972 per thousand of population was below the State average (which was 1.69 per thousand) but above 50 per cent of the State average and backward castes and backward tribes were those castes and tribes whose student average was below 50 per sent of the State average except in the case of Dombars and Voddars and those who were Nomadic and de notified tribes.
The total population of these backward classes (other then Scheduled Castes and Scheduled Tribes, according to the Commission, was about 45 per cent of the total population of the State.
The difference between the two lists one under Article 15(4) and the other under Article 16(4) of the Constitution was due to the exclusion of certain communities, castes and tribes which were socially and educationally backward but which had adequate representation in the services from the list prepared for the purpose of Article 16(4).
The Commission recommended both for purpose of Article 15(4) and Article 16 4) the following percentage of reservations: (i) Backward communities 16 percent (ii) Backward castes 10 percent (iii) Backward tribes 6 percent Total: 32 percent 454 The above reservation of 32 per cent along with 18 per cent reserved for Scheduled Castes and Scheduled Tribes together amounted to 50 per cent of the total seats or posts, as the case may be.
The Commission further recommended that if seats/posts remained unfilled in the quota allotted to backward tribes, they should be made over to backward communities and backward castes.
Similarly if seats/posts remain unfilled in the quota allotted to backward castes, they should be made over to backward communities and backward tribes.
If, however, seats/posts remain unfilled in the quota allotted to any of those three categories, they should be made over to Scheduled Castes and Scheduled Tribes.
In the event of seats/posts remaining unfilled by any of these categories, they should be transferred to the general pool.
After considering the Report of the Backward Classes Commission, the State Government issued an order dated February 22, 1977 the material part of which read as follows: "1 After careful consideration of the various recommendations made by the Commission, Government are pleased to direct as follows: I. The Backward Communities, Backward Castes and Backward Tribes as mentioned in the list appended to this Order shall be treated as Backward Classes for purposes of Article 15(4) and Article 16(4) of the Constitution of India.
Only such citizens of these Backward Classes whose family income per annum from all sources is Rs. 8,000 , (Rupees eight thousand only) and below shall be entitled to special treatment under these Articles.
The following five categories of citizens shall be considered as a special group and such citizens of this Special Group whose family income is Rs. 4,800 (Rupees Four Thousand eight Hundred only) and below per annum shall be eligible for special treatment under these Articles: (i) an actual cultivator; (ii) an artisan; (iii) a petty businessman; 455 (iv) one holding an appointment either in Government service or corresponding services under A private employment including casual labour; and (v) any person self employed or engaged in any occupation involving manual labour.
Note : Family income under sub paras I and II above means income of the citizen and his parents and if either of the Parents is dead, his legal guardian.
To fix the reservation for purposes of Articles ] 5(4) and 16(4) of the Constitution in respect of the Backward Classes and the Special Group of citizens at 40 per cent, the allocation being as follows: (a) Backward Communities 20 (twenty per cent) (b) Backward Castes 10 (ten per cent) (c) Backward Tribes 5(five per cent) (d) Special Group 5(five per cent) E In the list of Backward communities mentioned in the Government order, the State Government included 'Muslims ' thus making a total of 16 backward communities In the list of backward castes, there were 129 castes including converts into Christianity from Scheduled Castes/Scheduled Tribes up to second generation and 62 Schedules Tribes.
The reservation for backward classes was 40 per cent and taken along with 18 per cent for Scheduled Castes and Scheduled Tribes, the total reservation of seats/posts came to 58 per cent leaving only 42 per cent for merit pool.
By an order dated May 1, 1979, the reservation for backward communities was reduced to 18 per cent for purposes of Article 16(4).
By an order dated June 27, 1979, the State Government modified the Government order dated February 22, 1977 by increasing the reservation for 'Special Group ' from 5 per cent to 15 per cent both for purposes of Article 15(4) and Article 16(4) of the Constitution.
Thus as on date, the total reservation for purposes of Article 15(4) in 68 per cent and tor purposes of Article 16(4) is 66 per cent.
There are only 32 per 456 cent seats in professional and technical colleges and 34 per cent posts in Government services which can be filled up on the basis of merits.
In these writ petitions filed under Article 32 of the Constitution the above Government orders dated February 22, 1977 as modified by the Government orders dated May 1, 1979 and June 27, 1979 are challenged.
It should be stated here that the Government orders dated February 22, 1977 and another notification dated March 4, 1977 issued for purposes of Article 16(4) had also been challenged in a number of writ petitions filed under Article 226 of the Constitution before the High Court of Karnataka in S.C. Somashekarappa & Ors.
vs State of Karnataka & Ors.(l) The High Court allowed the writ petitions in part.
It quashed the inclusion of 'Arasu ' community in the list of 'Backward Communities ' both for purposes of Article 15(4) and Article 16(4).
It also quashed inclusion of the (i) Balaji,(ii) Devadiga, (iii) Gangia, (iv) Nayiada, (v) Rajput and (vi) Satani in the list of backward communities and the inclusion of (1) Banha, (2) Gurkha, (3) Jat, (4) Konga, (5) Kotari, (6) Koyava, (7) Malayali, (&) Maniyanani or (Muniyani), (9) Padarti, ( 10) Padiyar, (11) Pandavakulam, (12) Raval and (13) Rawat in the list of Backward Castes for purposes of Article 16(4) of the Constitution.
Reservation of 20 per cent made for Backward Communities in the State Civil Services under Article 16(4) was quashed reserving liberty to the State Government to determine the extent of reservation in accordance with law.
The classification and reservation in other respects was upheld.
S.L.P. (Civil) No. 6656 of 1979 is filed against the said judgment of the High Court under Article ] 36 of the Constitution.
The two Government orders dated May 1, 1979 and June 27, 1979 referred to above modifying the earlier Government orders were passed after the judgment of the High Court was pronounced, as stated above.
Volumes have been written on the caste system prevailing in India.
The caste (varna) has its origin in antiquity.
We find reference to it in the vedic lore and in the great epics, in the Smritis and in the Puranas.
Purusha Sukta refers to the prevalence of the four Varnas (caste) (See Rig Veda X 90 12).
The Lord says in the (1) Writ Petition No. 4371 of 1977 and connected writ petitions disposed of on April 9, 1979.
457 Bhagavadgita (lV 13) that the fourfold caste was created by him by the varying distribution of guna and karma.
Varna Dharma is extold in many ancient treaties.
However laudable the division of society into different castes at the commencement might have been, during the several centuries that followed these castes became petrified making mobility from one caste to another almost impossible.
The caste of a person was known by his birth.
There arose in course of time a social hierarchy built upon the caste system.
The stigma of low caste was attached to a person during his whole life with all the attendant disadvantages.
Karua, the tragic hero of the Mahabharata though born of a Kshatriya princess had to suffer ignominy during his entire life time as he came to be known as the son of a charioteer (Suta) belonging to a low caste.
He was made to say 'I may be a charioteer or a charioteer 's son.
I may be anybody.
What does it matter ? Being born in a (high) caste is God 's will but valour belongs to me. ' (See Veni Samhara by Bhatta Narayana).
There were many sub castes of different degrees in the hierarchy.
Some were even treated as untouchables.
People of low castes became socially backward and they in their turn neglected studies.
Thus they became socially and educationally backward.
This part of the Indian history is dismal indeed.
A page of history is worth a volume of logic.
We are aware of the meanings of the words caste, race, or tribe or religious minorities in India.
A caste is an association of families which practice the custom of endogamy i.e which permits marriages amongst the member.
belonging to such families only.
Caste rules prohibit its members from marrying outside their caste.
There are subgroups amongst the castes which sometimes inter marry and sometimes do not.
A caste is based on various factors, sometimes it may be a class, a race or a racial unit.
A caste has nothing to do with wealth.
The caste of a person is governed by his birth in a family.
Certain ideas of ceremonial purity are peculiar to each caste.
Sometimes caste practices even led to segregation of same castes in the villages Even the choice of occupation of members of castes was predetermined in many cases, and the members of a particular caste were prohibited from engaging themselves in other types of callings, professions or occupations Certain occupations were considered to be degrading or impure.
A certain amount of rigidity developed in several matters and many who 458 belonged to castes which were lower in social order were made to A suffer many restrictions, privations and humiliations.
Untouchability was practised against members belonging to certain castes.
Inter dining was prohibited in some cases.
None of these rules governing a caste had anything to do with either the individual merit of a person or his capacity.
The wealth owned by him would not save him from many social discriminations practised by members belonging to higher castes.
Children who grew in this caste ridden atmosphere naturally suffered from many social disadvantages apart from the denial of opportunity to live in the same kind of environment in which persons of higher castes lived.
Many social reformers have tried in the last two centuries to remove the stigma of caste from which people born in lower castes were suffering.
Many laws were also passed prohibiting some of the inhuman caste practices.
Article 15 (2) of the Constitution provides that no citizen shall on grounds only of religion, race, caste, sex, place of birth or any of them be subject to any disability, liability, restriction, or condition with regard to (a) access to shops, public restaurants, hotels and places of public entertainment or (b) use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated to the use of the general public.
Article 16 (2) declared that no person shall be ineligible to hold any civil post on grounds of religion, race, caste or descent.
Article 17 abolished 'untouchability ' and its practice in any form.
Yet the disadvantages from which many of the persons who belonged to various lower castes were suffering are still persisting notwithstanding the fact that some of them have progressed economically.
socially and educationally.
Pandit Jawaharlal Nehru writes on the social problems created by tho caste system which is peculiar to India in those terms: "The conception and practice of caste embodied the aristocratic ideal and was obviously opposed to democratic conceptions.
It had its strong sense of noblesse oblige, provided people kept to their hereditary stations and did not challenge the established order.
India 's success and achievements were on the whole confined to the upper classes; those lower down in the scale had very few chances and their opportunities were strictly limited.
These upper classes were not small limited groups but large in numbers and there was a difusion of power, authority and influence.
Hence they carried on successfully 459 for a very long period.
But the ultimate weakness and failing of the caste system and the Indian social structure were that they degraded a mass of human beings and gave them no opportunities lo get out of that condition educationally, culturally, or economically.
That degradation brought deterioration, all along the line including in its scope even the upper classes.
It led to the petrification which became a dominant feature of India 's economy and life.
The contrasts between this social structure and those existing elsewhere in the past were not great, but with the changes that have taken place all over the world during the past few generations they have become far more pronounced.
In the context of society today, the caste system and much that goes with it are wholly incompatible, reactionary, restrictive and barriers to progress.
There can be no equality in status and opportunity within its framework nor can there be political democracy and much less economic democracy.
Between these two conceptions conflict is inherent and only one of them can survive." (Jawaharlal Nehru: 'The Discovery of India ' 1974 Edn.
Chapter VI at pp.
256 257).
An examination of the question in the background of the Indian social conditions shows that the expression 'backward classes used in the Constitution referred only to those who were born in particular castes, or who belonged to particular races or tribes or religious minorities which were backward.
It is now necessary to ascertain the true meaning of the expression 'backward classes ' found in Articles 15, Article 16, Article 338 (3) and Article 340 of the Constitution.
Article 338 and Article 340 are in Part XVI of the Constitution entitled 'special provisions relating to certain classes '.
The corresponding part in the Draft Constitution was Part XIV entitled special provisions relating to minorities which contained nine Articles, Articles 292 to 301.
Article 292 of the Draft Constitution referred to reservation of seats for minorities in the House of the People, the minorities being, the Muslim community and the Scheduled Castes, certain Scheduled Tribes and the Indian Christian community.
Article 293 of the Draft Constitution made special provision regarding the representation of the Anglo Indian community in the House of the People.
Article 294 of the Draft Constitution dealt with reservation 460 of seats for the Muslim community, Scheduled Castes, certain A Scheduled Tribes and the Indian Christian community in the State Legislatures.
Article 295 of the Draft Constitution authorised the Governor to nominate a representative of the Anglo lndian community to a State Legislature in certain cases.
Article 296 of the Draft Constitution required the Union and the States to appoint members belonging to all minority communities in the State services consistently with the maintenance of efficiency of administration.
Article 297 of the Draft Constitution required the Union to appoint members of the Anglo lndian community in certain services as stated therein and Article 298 of the Draft Constitution provided for certain educational concessions to the Anglo Indian community over a certain specified period.
Article 299 of the Draft Constitution required the President to appoint a Special Officer for minorities for the Union and the Governor to appoint a Special Officer for minorities for a State.
Administration of Scheduled areas and welfare of certain Scheduled Tribes were entrusted to the President by Article 300 of the Draft Constitution and it made provision for appointment of a commission for that purpose.
Article 301 of the Draft Constitution authorised the President to appoint a commission to investigate the conditions of socially and educationally backward classes.
It read as follows: "301.
(1) The President may by order appoint a Commission consisting of such persons as he thinks fit to investigate the conditions ' of socially and educationally backward classes within the territory of India and the difficulties under which they labour and to make recommendations as to the steps that should be taken by the Union or any State to remove such difficulties and to improve their condition and as to the grants that should be given for the purpose by the Union or any State and the conditions subject to which such grants should be given, and the order appointing such Commission shall define the procedure to be followed by the Commission.
(2) A Commission so appointed shall investigate the matters referred to them and present to the President a report setting out the facts as found by them and making such recommendations as they think proper.
461 (3) The President shall cause a copy of the report so presented, together with a memorandum explaining the A action taken thereon to be laid before Parliament.
" The Constituent Assembly after considering the report of the Advisory Committee appointed on July 24, 1947 for the purpose of making its recommendations on the provisions contained in Part XIV of the Draft Constitution referred to above adopted a resolution moved by Sardar Vallabhbhai Patel which read as follows: "Resolved that the Constituent Assembly do proceed to take into consideration the Report dated the 11th May 1949 on the subject of certain political safeguards for minorities submitted by the Advisory Committee appointed by the resolution of the Assembly on 24th January 1 47.
Resolved further (i) that notwithstanding any decisions already taken by the Constituent Assembly in this behalf, the provisions of Part X[V of the Draft Constitution of India be so amended as to give effect to the recommendations of the Advisory Committee contained in the said report; and E (ii) that the following classes in East Punjab, namely, Mazhbis, Ramdasias, Kabirpanthis and Sikligars be included in the list of Scheduled Castes for the Province so that they would be entitled to the benefit of representation in the Legislatures given to the Scheduled Castes".
(Vide 'the Framing of India 's Constitution by B. Shiva Rao, Vol.
IV p. 606).
In the Revised Draft Constitution which was introduced in the Constituent Assembly on November 3, 1949, the provisions relating t minorities were incorporated in Part XVI and the title of that Part read as 'Special Provisions Relating to Minorities ' and it contained thirteen Articles, Article 330 to Article 342.
Article 330 provided for reservation of seats for Scheduled Castes and certain Scheduled Tribes in the Lok Sabha and Article 332 provided for reservation for them in the Legislative Assemblies of States.
Article 331 and Article 333 dealt with domination of representatives of the 462 Anglo Indian community respectively to the Lok Sabha and the A Legislative Assemblies of States.
Article 334 fixed the period during which reservations and nominations could be made under the above said Articles.
Article 335 required the Union and the States to recognise the claims of members of the Scheduled Castes and the Scheduled Tribes consistently with the maintenance of efficiency of administration in the making of appointments by the Union or the States, as the case may be.
Article 336 contained special provision for the Anglo Indian community in certain services during the first two years after the commencement of the Constitution and Article 337 contained special provision with respect to educational grants for the benefit of the Anglo lndian community during a certain period after the commencement of the Constitution.
Article 338 required the President to appoint a Special Officer for Scheduled Castes and Scheduled Tribes.
Article 338(3) stated that references to Scheduled Castes and Scheduled Tribes in Article 338 should be construed as references to such other backward classes as the President might on receipt of the report of the Commission appointed under Article 340 by order specify and also to the Anglo Indian community.
Article 340 provided for the appointment of a Commission by the President to investigate the conditions of socially and educationally backward classes and the difficulties under which they labour, Article 341 and Article 342 explained what the terms 'Scheduled Castes ' and 'Scheduled Tribes ' meant.
The above Articles (article 330 to article 342 of the Revised Draft of the Constitution) were finally passed by the Constituent Assembly with the amendment that for the word 'minorities ' wherever it occurred in Part XVI, the words 'certain classes ' be substituted The heading of the Part was, therefore, changed to 'Special Provisions Relating to certain Classes '.
It is significant that the expression 'backward classes used in Part XVI of the Constitution and the particular in Article 338(3) is used along with the Scheduled Castes, the Scheduled Tribes and the Anglo Indian Community.
In the original Draft Constitution, the Muslim community and the Indian Christian community also had been referred to in Part XVI.
In the course of the debates, the question of the members of the Sikh community was along considered along with these communities.
The meaning of backward classes has, therefore, to be deduced having regard to the other words preceding it.
It is a rule of statutory construction that where there are general words following particular and specific words, the general words must be confined to things of the same kind as those specified.
It is true that this rule which is called as the ejusdem generies rule or 463 the rule noscitur a socis cannot be carried too far.
But it is reasonable to apply that rule where the specific words refer to a distinct A genus or category.
The Scheduled Castes are those castes, races and tribes or parts of or groups within the castes, races and tribes which are specified in the Public Notification issued by the President under Article 341(1).
Similarly Scheduled Tribes are those tribes or tribal communities or parts of or groups of within tribes or tribal communities which are specified in the Public Notification issued by the President under Article 342(1).
This is clear from the definitions of 'Scheduled Castes ' and 'Scheduled Tribes ' in Article 366(24) and Article 366(25).
The notifications issued under Article 341 and Article 342 can be modified only by a law made by the Parliament (Vide Article 341(2) and Article 342(2).
It is thus seen that Part XVI of the Constitution deals with certain concessions extended to certain castes, tribes and races which are Scheduled Castes and Scheduled Tribes and to the Anglo Indian community.
In the above context if Article 338(3) and Article 340 are construed, the expression 'backward classes ' can only refer to certain castes, races, tribes or communities or parts thereof other than Scheduled Castes, Scheduled Tribes and the Anglo Indian community, which are backward.
Thus view also gains support from the resolution regarding the aims and objects of the Constitution moved by Pandit Jawaharlal Nehru in the Constituent Assembly on December 13, 1946.
He sid: E "I beg to move: (1) This Constituent Assembly declares its firm and solemn resolve to proclaim India as an Independent Sovereign Republic and to draw up for her future governance a Constitution; (2) Where in the territories that now comprise British India, the territories that now form the Indian States.
and such other parts of India as are outside British India at the States as well as such other territories as are willing to be constituted into the Independent Sovereign India, shall be a Union of them all; and (3) Where in the said territories, whether with their pre sent boundaries or with such others as may be determined by the Constituent Assembly and there after according to the Law of the Constitution, shall 464 possess and retain the status of autonomous Units, together with residuary powers, and exercise all powers, and exercise all powers and functions as are vested in or assigned to the Union, or as are inherent or implied in the Union or resulting therefrom; and (4) Wherein all power and authority of the Sovereign Independent India, its constituent parts and organs of government, are derived from the people; and (5) Wherein shall be guaranteed and secured to all the people of India justice, social, economic and political; equality of status, of opportunity, and before the law, freedom of thought, expression, belief, faith, worship, vocation, association and action, subject to law and public morality; and (6) Wherein adequate safeguards shall be provided for minorities, Backward and tribal areas, and depressed and other backward classes; and (7) Wherein shall be maintained the integrity of the territory of the Republic and its sovereign rights on land, sea, and air according to Justice and the law of civilised nations: and (8) this ancient land attains its rightful and honoured place in the world and make its full and willing contribution to the promotion of world peace and the welfare of mankind." (Underlining by us) Clause (6) of the above resolution which was later adopted by the Constituent Assembly pledged to make adequate safeguards in the Constitution for 'minorities, backward and tribal areas and depressed and other backward classes ' The above resolution and the history of the enactment of Part XVI of the Constitution by the Constituent Assembly lead to the conclusion that backward classes are only those castes, races, tribes or communities, which are identified by birth, which are backward.
It is, therefore, difficult to hold that persons or groups of persons who are backward merely on account of poverty which is traceable to economic reasons can also be considered as backward classes for purposes of Article 16(4) and Part XVI of the Constitution.
465 The word 'backward ' was not there before the words 'class of citizens ' in Article 10(3) of the original draft of the Constitution (the personal Article 16(4)).
The Drafting Committee presided over by Dr. B.R. Ambedkar deliberately introduced it.
Dr. Ambedkar gave the reason for introducing that term as follows: "Supposing, for instance, reservations were made for a community or a collection of communities, the total of which came to something like 70 per cent of the total posts under the State and only 30 per cent are retained as the unreserved, could anybody say that the reservation of 30 per cent as open to general competition would be satisfactory from the point of view of giving effect to the first principle, namely that there shall be equality of opportunity? It cannot be in my judgment.
Therefore the seats to be reserved, if the reservation is to be consistent with sub clause (1) of Article 10, must be confined to a minority of seats.
It is then only that the first principle could find its place in the Constitution and effective (sic) in operation.
If Honourable Member under stand this position then we have to safeguard two things, namely, the principle of equality of opportunity and at the same time satisfy the demand of communities which have not had so far representation in the state, then, I am sure they will agree that unless you use some such qualifying phrase as "backward ' the exception made in favour of reservation will ultimately eat up the rule altogether Nothing of the rule will remain." (Vide Constituent Assembly Debates, 1948 1949, Vol.
VII, pp. 701 702).
F The Drafting Committee by qualifying the expression classes of citizens ' by 'backward ' in Article 16(4) of the Constitution tried to reconcile three different points of view and produced a workable proposition which was acceptable to all, the three points of view being (1) that there should be equality of opportunity for all citizens and that every individual qualified for a particular post should be free to apply for that post, to sit for examinations and to have his qualifications tested so as to determine whether he was fit for the post or not and that there ought to be no limitations, there ought to be no hindrance in the operation of the principle of equality of opportunity; (2) that if the principle of equality of opportunity was to be operative the Ought to b no reservations of any sort for any class or 466 community at all and that all citizens if they are qualified should be A placed on the same footing of equality as far as public services were concerned and (3) that though the principle of equality of opportunity was theoritically good there must at the same time be a provision made for the entry of certain communities which have so far been outside the administration.
The whole tenor of discussion in the Constituent Assembly pointed to making reservation for a minority of the population including Scheduled Castes and Scheduled Tribes which were socially backward.
During the discussion, the Constitution (first Amendment) Bill by which Article 15(4) was introduced, Dr. Ambedkar referred to Article 16(4) and said that backward classes are 'nothing else but a collection of certain castes ' (Parliamentary Debates 1951, Third Session, Part Ir Vol.
Xll at p. 9007).
This statement leads to a reasonable inference that this was the meaning which the Constituent Assembly assigned to classes ' at any rate so far as Hindus were concerned.
In Balaji 's case (supra) and in Chifralekha 's case (supra) this Court exhibited a lot of hesitation in equating the expression 'class ' with 'caste ' for purposes of Articles 15(4) and Article 16(4) of the Constitution.
It observed, as stated earlier, that while caste might be a relevant circumstance to determine a backward class, it could not, however, be dominant test.
One of the reasons given for not accepting caste insofar as Hindu community in which caste system was prevalent was concerned as a dominant test for determining a backward class was that as there were communities without castes, nothing prevented the makers of the Constitution to use the expression 'backward classes or castes '.
The juxtaposition of the expression 'backward classes ' and 'Scheduled Castes ' in Article 15 of the Constitution, according to the above two decisions, led to a reasonable inference that expression 'classes ' was not synonymous with 'caste '.
The Court while making these observations did not give adequate importance to the evils of caste system which had led to the backwardness of people belonging to certain castes and the debates that preceded the enactment of Part XVI and Article 15(4) and Article 16(4) of the Constitution What was in fact overlooked ! was the history of the Indian social institutions.
The makers of the Il Indian Constitution very well knew that there were a number of i castes the conditions of whose members were almost similar to the conditions of members belonging to the Scheduled Castes and to the Scheduled Tribes and that they also needed to be given adequate protection in order tide over the difficulties in the way of their 467 progress which were not so much due to poverty but due to their birth in a particular caste.
As mentioned elsewhere in the course of this judgement.
the word 'classes ' was substituted in the place of the word 'communities ' by the Constituent Assembly just at the last moment.
The word community meant a caste amongst Hindus or Muslims, or Indian Christians or Anglo Indians.
Part XVI was not enacted for the purpose of alleviating the conditions of poorer classes as such which was taken care of by the provisions of Part IV of the Constitution and in particular by Article 46 and by Article 14, article 15(1) and article 16(1) of the Constitution which permitted classification of persons on economic grounds for special treatment in order to ensure equality of opportunity to all person.
It is of significance that the views expressed by this Court, however, stood modified by the decisions of this Court in Minor P. Rajendran vs State of Madras & Ors.
,(l) State of Andhra Pradesh & Anr.
vs P. Sagar,(2) Triloki Nath & anr.
vs State of Jammu Kashmir & Ors.(s) A. Peeriakaruppan etc.
vs State of Tamil Nadu & Ors.(4) and State of Andhra Pradesh & Ors.
vs U.S.V. Balram etc.(5) In Rajendran 's case (supra) while holding that the allocation of seats in Medical Colleges on the basis of the district to which a candidate belonged was not warranted by article 15(4), the Court observed that a caste was also a class of citizens and if the caste as a whole was socially and educationally backward reservation could be made in favour of such caste under article 1 5(4) In Sagar 's case (supra) reservation of seats was done solely on the basis of caste or community.
There appeared to be no determination of the fact whether members belonging to such castes or communities were in fact socially and educationally backward.
The court struck down the reservation as being outside Article I C(4) of the Constitution.
The Court.
however, observed at page 600 thus: ' In the context in which it occurs the expression "class" means a homogeneous section of the people grouped together because of certain likeness or common traits and who are identifiable by some common attributes such as status, rank, occupation residence in a locality, race, (1) ; (2) [1968] 3 S.C.R.595 (3) ; (4) [1971] 2 S.C.R. 430.
(5) ; , 468 religion and the like, In determining whether a particular section forms a class, caste cannot be excluded altogether.
But the determination of a class a test solely based upon the caste or community cannot also be accepted.
By cl.
(1), article 15 prohibits the State from discriminating against any citizens on grounds only of religion, race, caste, sex, place of birth or any of them.
By cl.
(3) Of article 15 the State is, notwithstanding the provisions contained in Cl.
(1), permitted to make special provision for women and children.
By cl.
(4) a special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and Scheduled Tribes is outside the purview of cl.
But cl.
(4) is an exception to cl.
Being an exception, it cannot be extended so as in effect to destroy the guarantee of cl.
The Parliament has by enacting cl.
(4) attempted to balance as against the right of equality of citizens the special necessites of the weaker sections of the people by allowing a provision to be made for their advancement.
In order that effect may be given to cl.
(4), it must appear that the beneficaries of the special provision are classes which are backward socially and educationally and they are other than the Scheduled Castes and Scheduled Tribes, and that the provision made is for their advancement.
Reservation may be adopted to advance the interests of weaker sections of society, but in doing so, care must be taken to see that deserving and qualified candidates are not excluded from admission to higher educational institutions.
The criterion for determining the backwardness must not be based solely on religion, race, caste, sex, or place of birth, and the backwardness being social and educational must be similar to the backwardness from which the Scheduled Castes and the Scheduled Tribes suffer." (emphasis added) In Triloki Nath 's case (supra) which was a case in which Article 16(4) came up for consideration, a Constitution Bench of this Court observed at page 105 thus "Article 16 in the first instance by cl.
(2) prohibits discrimination on the ground, inter alia, of religion, race, caste, place of birth, residence and permits an exception to be 469 made in the matter of reservation in favour of backward classes of citizens.
The expression "backward class" is not used as synonymous with "backward caste" or "back ward community".
The members of an entire caste or community may in the social, economic and educational scale of values at a given time be backward and may on that account be treated as a backward class, but that is not because they are members of a caste or community, but because they form a class In its ordinary connotation the expression "class" means a homogenous section of the people grouped together because of certain likenesses or common traits, and who are identifiable by some common attributes such as status, rank, occupation, residence in a locality, race religion and the like.
But for the purpose or article 16(41 in determining whether a section forms a class, a test solely based on caste, community, race, religion, sex, descent, place of birth or residence cannot be adopted, because it would directly offend the Constitution.
" (emphasis added) In Peeriokaruppan 's case (supra) Hegde.
J. Observed at page 443 thus; "A caste has always been recognised as a class.
In construing the expression "classes of His Majesty 's subjects" found in section 153 A Or the Indian Penal Code, Wassoodew, J. Observed in Narayan Vasudev vs Emperor A I.R. "In my opinion ' the expression 'classes of His Majesty 's subjects ' in Section 153 A of the Code is used in restrictive sense as denoting a collection of individuals or groups bearing a common and exclusive designation and also possessing common and exclusive characteristics which may be associated with their origin, race or religion, and that the term 'class ' within that section carries with it the idea of numerical strength so large as could be grouped in a single homogeneous community," In Paragraph 10, Chapter V of the backward Classes Commission 's Report, it is observed: 470 "We tried to avoid caste but we find it difficult to A ignore caste in the present prevailing conditions.
We wish it were easy to dissociate from social backwardness at the present juncture.
In modern times anybody can take to any profession.
The Brahman taking to tailoring, does not become a tailor by caste, nor is his social status lowered as a Brahman.
A Brahman may be a seller of boots and shoes, and yet his social status is not lowered thereby.
Social backwardness, therefore, is not today due to the particular profession of a person, but we cannot escape caste in considering the social backwardness in India" Paragraph 11 of that Report it is stated: "It is not wrong to assume that social backwardness has largely contributed to the educational backwardness of a large number of social groups.
" Finally in Paragraph 13, the Committee concludes with following observations: "All this goes to prove that social backwardness is mainly based on racial, tribal, caste and denominationals differences.
" The learned Judge then proceeded to state at page 444: "There is no gainsaying the fact that there are numerous castes in this country which are socially and educationally backward.
To ignore their existence is to ignore the facts of life.
Hence we are enable to uphold the contention that impugned reservation is not in accordance with article 15(4).
But all the same the Government should not proceed on the basis that once a class is considered as a backward class it should continue to be backward class for all times.
Such an approach would defeat the very purpose of the reservation because once a class reaches a stage of progress which some modern writers call as take off stage then competition is necessary for their future progress.
The Government should always keep under review the question of reservation of seats and only the classes which 471 are really socially and educationally backward should be allowed to have the benefit of reservation.
Reservation of A seats should not be allowed to become a vested interest.
The fact that candidates of backward classes have secured about 50 per cent of the seats in the general pool does show that the time has come for a de novo comprehensive examination of the question.
It must be remembered that g the Government 's decision in this regard is open to judical review.
" In Balaram 's case (supra) the State was the appellant.
it had come up in appeal against the judgment of the High Court of Andhra Pradesh which had struck down its order making reservation of seats of seats under Article 15(4).
This Court allowed the appeal upholding the Government order, Vaidialingam, J. in the course of his judgment observed at page 280 thus: "article 15(4) will have to be given effect to in order to assist the weaker sections of the citizens, as the State has been charged with such duty.
No doubt, we are aware that any provision made under this clause must be within the well defined limits and should not be on the basis of caste alone.
But it should not also be missed that a caste is also a class of citizens and that a caste as such may be socially and educationally backward.
If after collecting the necessary date, it is found that the caste as a whole is socially and educationally backward, in our opinion, the reservation made of such persons will have to be upheld notwithstanding the fact that a few individuals in that group may be both socially and educationally above the general average.
There ii no gainsaying the fact that there are numerous castes in the country, which are socially and educationally backward and therefore a suitable provision will have to be made by the State as charged in article 15(4) to safeguard their interest.
" The learned Judge felt that the Backward Classes Commission on the basis of whose Report the Government order had been passed had given good reasons in support of its recommendations.
Accordingly the Government order was upheld.
472 If we depart from the view that caste or community is an important relevant factor in determining social and educational backwardness for purposes of Article 15 (4) and Article 16 (4) of the Constitution, several distortions are likely to follow and may take us away from the sole purpose for which those constitutional provisions were enacted.
Several factors such as physical disability, poverty, place of habitation, the fact of belonging to a freedom fighter 's family, the fact of belonging to the family of a member of the armed forces might each become a sole factor for the purpose of Article 15 (4) or Article 16 (4) which were not at all intended to be resorted to by the State for the purpose of granting relief in such cases.
While relief may be given in such cases under Article 14, Article 15 (1) and Article 16 (1) by adopting a rational principle of classification, Article 15 (4) and Article 16 (4) cannot be applied to then.
Article 15 (4) and Article 16 (4) are intended for the benefit of those who belong to castes/communities which are 'traditionally disfavoured and which have suffered societal discrimination ' in the past.
The other factors mentioned above were never in the contemplation of the makers of the Constitution while enacting these clauses.
In D.N. Chanchala vs State of Mysore and Ors.
etc.(1) a classification based on some of these factors was upheld but not under Article 1 5 (4).
The observation made in State of Kerala vs Kumari T.P. Roshana and Anr.(2) that 'the principle of reservation with weightage for the geographical area of Malabar District has our approval in endorsement of the view of the High Court ' is outside the scope of Article 15 (4) even though it may be sustained under Article 14.
While caste or community is a relevant factor in determining the social and educational backwardness, it cannot be said that all members of a caste need be treated as backward and entitled to reservation under Article 15 (4) or Article 16 (4).
Caste cum means test would be a rational test in identifying persons who are entitled to the benefit of those provisions.
This principle has received acceptance at the hands of this Court in Kumari K.S. Jayasree and Anr.
vs The State of Kerala and Anr.
,(2) In that case a Commission appointed by the Government of the State of Kerala to enquire into the social and economic conditions of the people of that State and (1) [1971] Supp.
S.C.R. 60 (2) ; (3) ; 473 to recommend as to what sections of the people should be extended the benefits under Article 15 (4) of the Constitution found that only the rich amongst certain castes or communities were enjoying the benefit of reservations made earlier.
It, therefore, recommended adoption of a means cum caste/community test for determining the sections of the people who should be given the benefit under the relevant constitutional provisions.
The State Government accordingly stipulated that applicants who were members of certain castes or communities and whose family income was less than Rs. 1(),000 per year were only entitled to reservation under Article 15 (4).
The petitioner in the above case who belonged to one such community but whose family income was above Rs. 10,000 per year questioned the order before the Kerala High Court on the ground that the imposition of the ceiling of family income was unconstitutional.
The learned Single Judge who heard the ' petition allowed it.
The Division Bench of the Kerala High Court, however, reversed the decision of the learned Single Judge and dismissed the petition.
On appeal, the Court while affirming the decision of the Division Bench in the above case on the question of social backwardness observed at pages 199 200 thus: "In ascertaining social backwardness of a class of citizens it may not be irrelevant to consider the caste of the group of citizens.
Caste cannot however be made the sole or dominant test.
Social backwardness is in the ultimate analysis the result of poverty to a large extent.
Social backwardness which results from poverty is likely to be aggravated by considerations of their caste.
This shows the relevance of both caste and poverty in deter mining the backwardness of citizens.
Poverty by itself is not the determining factor of social backwardness.
Poverty is relevant in the context of social backwardness.
The Commission found that the lower income group constitutes socially and educationally backward classes.
The basis of the reservation is not income but social and educational backwardness determined on the basis of relevant criteria.
If any classification of backward classes of citizens is based solely on the caste of the citizens it will perpetuate the vice of caste system.
Again, if the classification is based solely on poverty it will not be logical.
The society is taking steps for uplift of the people.
In such a task groups or classes who are socially and 474 educationally backward are helped by the society.
That A is the philosophy of our Constitution.
It is in this context that social backwardness which results from poverty is likely to be magnified by caste considerations.
Occupations, place of habitation may also be relevant factors in determining who are socially and educationally backward classes.
Social and economic considerations come into operation in solving the problem and evolving the proper criteria of determining which classes are socially and educationally backward.
That is why our Constitution provided for special consideration socially and educa tionally backward classes of citizens as also Scheduled Castes and Tribes.
It is only by directing the society and the State to offer them all facilities for social and educational uplift that the problem is solved.
It is in that context that the Commission in the present case found that income of the classes of citizens mentioned in Appendix VIII was a relevant factor in determining their social and educational backwardness.
" When once the relevance of caste is not adhered to several difficulties might arise as can be seen from the decision in the State of Uttar Pradesh vs Pradip Tandon and Ors.
,(1) In that case the Court had to examine the validity of a Government order which had made reservation of seats under Article 15 (4) in favour of two classes of students (1) those who came from rural areas and (2) those who came from hill areas and Uttrakhand.
The High Court of Allahabad upheld the said reservations in Subhash Chandra vs The State of U.P. and ors.(2) but struck them down in a later case in Dilip Kumar vs The Government of U.P. and Ors.(3) without noticing its earlier decision in Subash Chandra 's case (supra) When the same question came before this Court in an appeal preferred by the State Government, the State Government attempted to justify the classification of students for admission into medical colleges as stated above on the ground that it was a notorious fact that rural, hill and Uttrakhand areas were socially backward because of extreme poverty; that those areas were backward educationally because the (1) ; (2) A.l.R. 1973 All.
(3) A.I.R. 1973 All.
475 standard of literacy was poor and there was lack of educational facilities and that there was dearth of doctors in the said areas.
A The geographical, territorial, historical and the economic conditions in the said areas were emphasised to support the classification.
In the State of Uttar Pradesh vs Pradip Tandon 's case (supra) Court first rejected the plea that party could be a basis of classification for purposes of article I (4) in these terms at page 7 "In Balaji 's case (supra) the Court said that social backwardness is on the ultimate analysis the result of poverty to a large extent and that the problem of back ward classes is in substance the problem of rural India.
Extracting these observations the Attorney General contended that poverty is not only relevant but is one, of the elements in determining the social backwardness.
We are unable to accept the test of poverty as the determining factor of social backwardness.
" D Then it held that reservation for rural areas on the ground of poverty was unconstitutional.
In doing so it observed at page 769 thus: "The reservation for rural areas cannot be sustained on the ground that the rural areas represent socially and educationally backward classes of citizens.
This reservation appears to be made for the majority population of the State.
80 per cent of the population of the State cannot be a homogeneous class.
Poverty in rural areas cannot be the basis of classification to support reservation for rural areas.
Poverty is found in all parts of India.
In the instructions for reservation of seats it is provided that in the application form a candidate for reserved seats from rural areas must submit a certificate of the District Magistrate of the District to which he belonged that he was born in rural area and had a permanent home there, and is residing there or that he was born in India and his parents and guardians are still living there and earn their livelihood there.
The incident of birth in rural areas is made the basic qualification.
No reservation can be made on the basis of place of birth, as this would offend Article 15.
" 476 But it upheld the reservations made in favour of the hill and A Uttrakhand areas with these observations at page 767: "The hill and Uttrakhand areas in Uttar Pradesh are instance of socially and educationally backward classes for these reasons.
Backwardness is judged by economic basis that each region has its own measurable possibilities for the maintenance of human numbers, standards of living and fixed property.
From an economic point of view the classes of citizens are back ward when they do not make effective use of resources.
When large areas of land maintain a sparse, disorderly and illiterate population whose property is small and negligible the element of social backwardness is observed.
When effective territorial specialisation is not possible in the absence of means of communication and technical processes as in the hill and Uttrakhand areas the people are socially backward classes of citizens.
Neglected opportunities and people in remote places raise walls of social backwardness of people.
Educational backwardness is ascertained with reference to these factors.
Where people have traditional apathy for education on account of social and environ mental conditions or occupational handicaps, it is an illustration of educational backwardness.
The hill and Uttrakhand areas are inaccessible.
There is lack of educational institutions and educational aids People in the hill and Uttrakhand areas illustrate the educationally backward classes of citizens because lack of educational facilities keep them stagnant and they have neither meaning and values nor awareness for education.
" The reading of the above passages shows that there is inherent inconsistency between one part of the decision and the other.
The Court could not have arrived at the two divergent conclusions set out above since many of the reasons urged by the State Government were almost identical.
This is due to the earlier approach adopted by the Court to the question.
If caste had been taken into consideration as a relevant test which could not be ignored in determining the classes entitled to the benefit of Article 15 (4) and article 16 (4), there would have been no room for the above inconsistency.
477 Article 14 of the Constitution consists of two parts.
It asks the State not to deny to any person equality before law.
It also asks A the State not to deny the equal protection of the laws.
Equality before law connotes absence of any discrimination in law.
The concept of equal protection required the State to meet out differential treatment to persons in different situations in order to establish an equilibrium amongst all.
This is the basis of the rule that equals should be treated equally and unequals must be treated unequally if the doctrine of equality which is one of the corner stones of our Constitution is to be duly implemented.
In order to do justice amongst unequals, the State has to resort to compensatory or protective discrimination, Article 15 (4) and Article 16 (4) of the Constitution were enacted as measures of compensatory or protective discriminations to grant relief to persons belonging to socially oppressed castes and minorities.
Under them, it is possible to provide for reservation of seats in educational institutions and of posts in Government services to such persons only.
But if there are persons who do not belong to socially oppressed castes and minorities but who otherwise belong to weaker sections, due to poverty, place of habitation, want of equal opportunity etc.
the question arises whether such reservation can be made in their favour under any other provision of the Constitution such as Article 14, Article 15 (1), Article 16 (1) or Article 46.
The decision in State of Kerala and Anr.
vs N.M. Thomas and Ors.(l) which was rendered by 15 a Bench of seven learned Judges of this Court attempted to deal with the above question.
The facts of that case were these: Rule 13 (a) of the Kerala State Subordinate Service Rules, 1958 provided that no person would be eligible for appointment to any service or any post unless he possessed such special qualifications and had passed such special tests as might be prescribed in that behalf in the Ir Special Rules.
For promotion of a lower division clerk to the next higher post of upper division clerk, the Government prescribed certain departmental tests.
By Rule 13A which was introduced later on temporary exemption was given for a period of two years.
That Rule also provided that an employee who did not pass the unified departmental tests within the period of two years from the date of introduction of the tests would be reverted to the lower post and further stated that he would not be eligible for appointment under that Rule.
Proviso (2) to this Rule gave temporary exemption for an extended period of two years in the case of candidates belonging (1) [1976] I S.C.R 906.
478 to Scheduled Castes and Scheduled Tribes.
When the Government A found that a large number of candidates belonging to Scheduled Castes and Scheduled Tribes were facing reversion under that Rule, on a representation made on their behalf, it gave exemption to them for a further period of two years by promulgating Rule 13A.
As a result of this Rule, respondent No. I in the above case who had passed the special test in 1971 was not promoted but some candidates belonging to Scheduled Castes or Scheduled Tribes who had not passed the tests were promoted.
Respondent No. I there fore challenged the validity of Rule 13A before the High Court of Kerala on the ground that it violated Article 16 (1) of the Constitution.
The High Court struck down the Rule holding that it was outside the scope of Article 16 (4) and therefore was violative of Article 16 (1) of the Constitution The State Government questioned in the above case before this Court the correctness of the decision of tho High Court.
From the facts narrated above, it is obvious that the case did not concern itself with reservation of posts in the higher cadre as such but only involved the classification of employees of Government into two groups those belonging to Scheduled Castes and Scheduled Tribes and those who did not belong to Scheduled Castes and Scheduled Tribes for purposes of given exemption from possessing one of the minimum qualifications i.e. from passing the prescribed tests during a further period of two years 13 Ray, C.J. upheld the Rule by upholding the classification under Article 14 and Article 16 (1).
The learned Chief Justice observed at page 933 thus: "All legitimate methods are available for equality of opportunity in services under Article 16 (1).
Article 16 (4) is affirmative whereas Article 14 is negative in language.
Article 16 (4) indicates one of the methods of achieving equality embodied in Article 16 (1).
Article 16 (1) using the expression "equality" makes it relatable to all matters of employment from appointment through promotion and termination to payment of pension and gratuity.
Article 16 (1) permits classification on the basis of object and purpose of law or State action except classification involving discrimination prohibited by Article 16 (2).
Equal protection of laws necessarily involves classification.
The validity of the classification must be adjudged with reference to the purpose of law.
The classification in the present case is justified because 479 the purpose of classification is to enable members of Scheduled Castes and Tribes to find representation by A promotion to a limited extent.
From the point of view of time a differential treatment is given to members of Scheduled Castes and Tribes for the purpose of giving them equality consistent with efficiency".
Khanna, J. who upheld the judgment of the High Court was of the view that since the impugned Rule did not get the protection of Article 16 (4) which was the only provision under which preferential treatment could be given to members belonging to backward classes, Scheduled Castes and Scheduled Tribes, the Rule could not be upheld on the basis of classification under Article 14 and Article 16 (1) of the Constitution.
The learned Judge observed at pages 939 940 thus; "It has been argued on behalf of the appellants that equality of treatment does not forbid reasonable classification.
Reference in this context is made to the well accepted principle that Article 14 of the Constitution forbids class legislation but does not forbid classification.
Permissible classification, it is equally well established, must be founded on an intelligible differential which distinguishes persons or things that arc grouped together from others left out of the group and the differential must have a rational relation to the object sought to be achieved by the statute in question.
It is urged that the same principle should apply when the court is concerned with the equality of opportunity for all citizens in matters P relating to employment or appointment to any office under the State.
In this respect I may observe that this Court has recognised the principle of classification in the context of clause (1) of article 16 in matters where appointments are from two different sources, e.g. guards and station masters, promotees and direct recruits, degree holder and diploma holder engineers.
[See All India Station Masters and Asstt.
station Masters ' Assn.
and Ors.
vs General Manager, Central Railway and Ors.
[1960) 2 S.C.R. 311, S.G. Jaisinghani vs Union of India and Ors.
[1967] 2 S.C.R. 703 and State of Jammu & Kashmir vs Triloki Nath Khesa and Ors.
[1974] I S.C.R. 771.) The question with which we are concerned, however, is 480 whether we can extend the above principle of classification so as to allow preferential treatment to employees on the ground that they are members of the scheduled castes and scheduled tribes.
So far as this question is concerned I am of the view that the provision of preferential treatment for members of backward classes, including scheduled castes and scheduled tribes, is that contained in clause (4) of article 16 which permits reservation of posts for them.
There is no scope for spelling out such preferential treatment from the language of clause (1) of article 16 because the language of that clause does not warrant any preference to any citizen against another citizen.
The opening words of clause (4) of article 16 that "nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of backward class of citizens ' indicate that but for clause (4) it would not have been permissible to make any reservation of appointments or posts in favour of any backward class of citizens.
" Khanna, J. proceeded to observe at page 944 thus: "The matter can also be locked at from another angle.
If it was permissible to accord favoured treatment to members of backward classes under clause (1) of article 16, there would have been no necessity of inserting clause (4) in article 16.
Clause (4) in Article 16 in such an event would have to be treated as wholly superfluous and redundant.
The normal rule of interpretation is that no provision of the Constitution to be treated as redundant and superfluous.
The Court would, therefore, be reluctant to accept a view which would have the effect of rendering clause (4) of Article 16 redundant and superfluous".
Mathew, J. more or less agreed with Ray, C.J. He said at pages 954 955 thus: "It is said that Article 16 (4) specifically provides for reservation of posts in favour of backward classes which according to the decision of this Court would include the power of the State to make reservation at the 481 stage of promotion also and therefore Article 16 (1) cannot include within its compass the power to give any adventitious aids by legislation or otherwise to the back ward classes which would derogate from strict numerical equality.
If reservation is necessary either at the initial stage or at the stage of promotion or at both to ensure for the members of the Scheduled Castes and Scheduled Tribes equality of opportunity in the matter of employment, l see no reason why that is not permissible under Article 16 (1) as that alone might put them on a parity with the forward communities in the matter of achieving the result which equality of opportunity would produce.
Whether there is equality of opportunity can be gauged only by the equality attained in the result.
Formal equality of opportunity simply enables people with more education and intelligence to capture all the posts and to win over the less fortunate in education and talent even when the competition is fair.
Equality of result is the test of equality of opportunity".
Beg, J. (as he then was) agreed with the view of Khanna, J. that the principle of classification could not be extended to cases of this nature but upheld the Rule as squarely falling within the scope of Article 16 (4) itself.
He observed at page 959: "Strictly speaking, the view adopted by my learned brother Khanna, that the ambit of the special protection of "equality of opportunity in matters relating to public service", which can be made available to members of backward classes of citizens, is exhausted by Article 16 (4) of the Constitution, seems inescapable.
Article 16 is, after all, a facet of the grand principles embraced by Article 14 of our Constitution.
It guarantees: "Equality of opportunity in matters of public appointment".
It does so in absolute terms.
It is a necessary consequence and a special application of Article 14 in an important field where denial of equality of opportunity cannot be permit ted.
While Article 16 (1) sets out the positive aspect of equality of opportunity in matters relating to employment by the State, Article 16 (2) negatively prohibits discrimination on the grounds given in Article 16 (2) in the area covered by Article 16 (1) of the Constitution.
If 482 Scheduled Castes do not fall within the ambit of Article 16 (2), but as a "backward class" of citizens, escape the direct prohibition it is because the provisions of Article 16 (4) make such an escape possible for them.
They could also avoid the necessary consequences of the positive mandate of Article 16 (1) if they come within the only exception contained in Article 16 (4) of the Constitution.
I respectfully concur with my learned brother Khanna and Gupta that it would be dangerous to extend the limits of protection against the operation of the principle of equality of opportunity in this field beyond its express constitutional authorisation by Article 16 (4) '.
Beg, J. (as he then was) proceeded to hold at page 961 thus: "Members of a backward class could be said to be discriminated against if severer tests were prescribed for them.
But, this is not the position in the case before us.
All promotees, belonging to any class, caste, or creed, are equally subjected to efficiency tests of the same type and standard.
The impugned rules do not dispense with these tests for any class or group.
Indeed, such tests could not be dispensed with for employees from Scheduled Castes, even as a backward class, keeping in view the provisions of Article 335 of the Constitution.
All that happens here is that the backward class of employees is given a longer period of time to pass the efficiency tests and prove their merits as determined by such tests.
It has been, therefore, argued that, in this respect, there is substantial equality.
In other words, the argument is that if Article 16 (1) could be interpreted a little less rigidly and more liberally the discrimination involved here will not fall outside it.
Even if this was a tenable view, I would, for all the reasons given here, prefer to find the justification, if this is possible, in the express provisions of Article 16 (4) because this is where such a justification should really lie." Krishna Iyer, J. after recording the statement of the Advocate General for Kerala that the Rule could not be sustained under Article 16 (4) upheld it under article 14 and Article 16 (1) as it 483 related to members belonging to the Scheduled Castes and Scheduled Tribes.
Perhaps he would have struck down the Rule if the benefit A of the Rule had been extended to other backward classes as can be seen from the following passage occurring at page 981: "If article 14 admits of reasonable classification, so does article 16(1) and this Court has held so.
In the present case, the economic advancement and promotion of the claims of the grossly under represented and pathetically neglected classes, otherwise described as Scheduled Castes and Scheduled Tribes, consistently with the maintenance of administrative efficiency, is the object, constitutionally sanctioned by articles 46 and 335 and reasonably accommodated in article 16(1).
The differentia so loudly obtrusive, is the dismal social milieu of harijans.
Certainly this has a rational relation to the object set out above.
I must repeat the note of caution earlier struck.
Not all caste backwardness is recognised in this formula.
To do so is subversive of both article 16(1) and (2).
The social disparity must be so grim and substantial as to serve as a foundation for benign discrimination.
If we search for such a class, we cannot find any large segment other than the Scheduled Castes and Scheduled Tribes.
Any other caste, securing exemption from article 16(1) and (2), by exerting political pressure or other influence, will run the high risk of unconstitutional discrimination.
If the real basis of classification is caste masked as backward class, the Court must strike at such communal manipulation.
Secondly, the Constitution recognizes the claims of only harijans (article 335) and not of every backward class.
The profile of article 46 is more or less the same.
So, we may readily hold that casteism cannot come back by the back door and, except in exceptionally rare cases, no class other than Harijans can jump the gauntlet of 'equal opportunity ' guarantee.
Their only hope is in article 16(4)".
(Emphasis supplied).
Gupta, J. agreed generally with Khanna, J. and upheld the judgment of the High Court.
Gupta, 1.
after referring to Article 335 observed at page 986 thus: H "This Article does not create any right in the members of the Scheduled Castes and the Scheduled Tribes which 484 they might claim in the matter of appointments to services A and posts; one has to look elsewhere, Article 16(4) for instance, to find out the claims conceded to them.
Article 335 says that such claims shall be considered consistently with administrative efficiency, thus is a provision which does not enlarge but qualify such claims as they may have as members of the Scheduled Castes or Scheduled Tribes.
Article 335, it seems clear, cannot furnish any clue to the understanding of Article 16(1)".
Fazal Ali, J. also upheld the impugned Rule under Article 16(1).
The learned Judge said at page 1001 thus: " "Article 335 of the Constitution contains a mandate to the State for considering the claims of the members of tho Scheduled Castes and the scheduled tribes consistently with the maintenance of efficiency of administration.
By giving the special concessions to the promotees this man date is sought to be obeyed by the Government.
Mr. T.S. Krishnamoorthy Iyer, counsel for the respondent No. I submitted that the mandate given in article 335 is violated because by granting exemption to the members of the scheduled castes and tribes the standard of efficiency of the services would be impaired.
We are, however, unable to agree with the argument.
Both the respondent No. I and the promotees were members of the same service and had been working as Lower Division Clerks for a pretty long time.
The promotees were members of the scheduled castes and tribes are admittedly senior to respondent No. I and have gained more experience.
Further the rule does not grant complete exemption to the promotees from passing the test; it only provides for grant of extension of time to enable them to clear the test.
In these circumstances it cannot be held that the State 's action in incorporating r. 13 AA in any way violates the mandate contained in article 335.
In these circumstances, therefore, I am clearly satisfied that the concesion given in r. 13 AA amounts to a reasonable classification which can be made under article 16(1) of the Constitution and does not amount to the selection of the respondent No. 1 for hostile discrimination so as to be violative of article 16(1) of the Constitution of India" 485 But Fazal Ali, J. was, however, of the view that Article 16(4) of the Constitution was a complete code so far as reservation of posts A was concerned.
The learned Judge observed at page 1002 thus: "Clause (4) of article 16 of the Constitution cannot be read in isolation but has to be read as part and parcel of article 16(1) & (2).
Suppose there are a number of backward classes who form a sizable section of the population of the country but are not properly or adequately represented in the services under the State the question that arises is that can be done to enable them to join the services and have a sense of equal participation.
One course is to make a reasonable classification under article 16(1) in the manner to which I have already adverted in great detail.
The other method to achieve the end may be to make suitable reservation for the backward classes in such a way so that the inadequate representation of the backward classes in the services is made adequate.
This form of classification which is referred to as reservation, is, in my opinion, clearly covered by article 16(4) of the Constitution which is completely exhaustive on this point.
That is to say clause (4) of article 16 is not an exception to article 14 in the sense that whatever classification can be made can be done only through clause (4) of article 16.
Clause (4) of article 16, however, is an explanation containing an exhaustive and exclusive provision regarding reservation which is one of the forms of classification.
Thus clause (4) of article 16 deals exclusively with reservation and not other forms of classifiable which can be made under article 16(1) itself.
Since clause (4) is a special provision regarding reservation, it can safely be held that it overrides article 16(1) to that extent and no reservation can be made under article 16(1)".
(Emphasis added) The result is that at least according to four learned Judges Khanna; Beg, Gupta and Fazal Ali, JJ.
no reservation of posts can be made in Government services for backward classes including Scheduled Castes and Scheduled Tribes under Article 14 or Article 16(1).
According to Krishna Iyer, J. preferential treatment as was done in this case on the basis of classification ordinarily could be given under Article 16(1) to the Scheduled Castes and Scheduled Tribes only.
Other backward classes could not, except in exceptionally rare cases be extended the same benefit and their only hope was Article 16(4) of the constitution, 486 Now reverting to the power of the Government to make reservations under Article 15(4) and Article 16(4) of the Constitution, we may state thus: The determination of the question whether the members belonging to a caste or a group or a community are backward for the purpose of Article 15(4) and Article 16(4) of the Constitution is no doubt left to the Government.
But it is not open to the Government to call any caste or group or community as backward according to its sweet will and pleasure and extend the benefits that may be granted under those provisions to such caste or group or community.
The exercise of uncontrolled power by the Government in this regard may lead to political favouritism leading to denial of the just requirements of classes which are truly backward.
The power of the Government to classify any caste or group or community as backward has to be exercised in accordance with the guidelines that can be easily gathered from the Constitution.
It is now accepted that the expressions 'socially and educationally backward classes of citizens ' and 'the Scheduled Castes and the Scheduled Tribes ' in Article 15(4) of the Constitution together are equivalent to backward classes of citizens ' in Article 16(4).
Dealing with the question whether any particular caste or group or community could be treated as socially and educationally backward for purposes of Article 15(4), the Court observed in Balaji 's case (supra) at page 465 thus: "Therefore, we are not satisfied that the State was justified in taking the view that communities or castes whose ave rage of student population was the same as, or just below, the State average, should be treated as educationally back ward classes of citizens.
If the test has to be applied be a reference to the State average of student population, the legitimate view to take would be that the classes of citizens whose average is well or substantially below the State average can be treated as educationally backward.
" This was further explained by Shah, J. (as he then was) in Sagar 's case (supra) when he observed that the criterion for deter mining the backwardness must not be based solely on religion, race, caste, sex or place of birth and the backwardness being social and educational must be similar to the backwardness from which the Scheduled Castes and the Scheduled Tribes suffered.
A Constitution, Bench of this Court reiterated the above principle in Janki Prasad Parimoo & Ors.
vs State of Jammu & Kashmir & Ors.
in which it was observed at page 252 thus: (1) ; 487 "That accounts for the raison d 'etre of the principle explained in Balaji 's case which pointed out that backward classes for whose improvement special provision was contemplated by Article 15(4) must be comparable to Scheduled Castes and Scheduled Tribes who are standing examples of backwardness socially and educationally".
This view is in conformity with the intention underlying clause (6) of the resolution regarding the aims and objects of the Constitution moved by Jawaharlal Nehru on December 13, 1946 which asked the Constituent Assembly to frame a Constitution providing adequate safeguards for minorities, backward and tribal areas and depressed and other backward classes and also with the provisions of Article 338 and Article 340 of the Constitution.
Unless the above restriction is imposed on the Government, it would become possible for the Government to call any caste or group or community which constitutes a powerful political lobby in the State as backward even though in fact it may be an advanced caste or group or community but just below some other forward community.
There is another important reason why such advanced castes or groups or communities should not be included in the list of backward classes and that is that if castes or groups and communities which are fairly well advanced and castes and groups and communities which are really backward being at the rock bottom level are classified together as backward classes, the benefit of reservation would invariably be eaten up by the more advanced sections and the really deserving sections would practically go without any benefit as more number of children of the more advanced castes or groups or communities amongst them would have scored higher marks than the children of more backward castes or groups or communities.
In that event the whole object of reservation would become frustrated.
It is stated that it was with a view to avoiding this anomalous situation, the Government of Devaraj Urs had to appoint the Havanur Commission to make recommendations for the purpose of effectively implementing the objects of Article 15(4) and Article 16(4).
Hence as far as possible while preparing the list of backward classes, the State Government has to bear in mind the above principle as a guiding factor.
The adoption of the above principle will not unduly reduce the number of persons who will be eligible for the benefits under Article 15(4) and Article 16(4) of the Constitution since over the years the level of the Scheduled Castes and Scheduled Tribes is also going up by reason of several remedial 488 measure taken in regard to them by the State and Central Government.
At the same time, it will also release the really backward castes, groups and communities from the strangle hold of many advanced groups which have had the advantage of reservation along with the really backward classes for nearly three decades.
It is time that more attention is given to those castes, and groups communities who have been at the lowest level suffering from all the disadvantages and disabilities (except perhaps untouchability) to which many of the Scheduled Castes and Scheduled Tribes have been exposed but without the same or similar advantages that flow from being included in the list of the Scheduled Castes and the Scheduled Tribes.
Since economic condition is also a relevant criterion, it would be appropriate to incorporate a 'means test ' as one of the tests in determining the backwardness as was done by the Kerala Government in Jayasree 's case (supra).
These two tests namely, that the conditions of caste or group or community should be more or less similar to the conditions in which the Scheduled Castes or Scheduled Tribes are situated and that the income of the family to which the candidate belongs does not exceed the specified limit would serve as useful criteria in determining beneficiaries of any reservation to be made under Article 15(4).
For the purpose of Article 16(4) however, it should also be shown that the backward class in question is in the opinion of the Government not adequately represented in the Government services.
There is one other basis on which a classification made for purposes of Article 15 (4) or Article 16 (4) of the Constitution has received the approval of this Court in Chitralekha 's case (supra).
In that case the Court was concerned with a list of backward classes prepared on the basis of economic condition and occupation.
According to that Government order, persons whose family income was Rs. 1,200 per annum or less and who were engaged in occupations such as agriculture.
petty business, inferior services, crafts or other occupations involving manual labour were treated as belonging to backward classes.
The petitioner who had filed the petition in the High Court did not challenge the validity of the said classification.
But on a submission made on behalf of the State Government, the Court expressed its general approval to the method of classification.
Even in the case before us now, there is a reservation of 15 per cent of seats of posts in favour of members falling under a classification styled as 'special group ' which is based on similar 489 occupation cum income considerations.
Even here no serious objection is taken by any party to the said classification treating A persons who satisfied the prescribed tests as being eligible for reservation.
It is apparent that this 'special group ' is a creature of social, economic and political necessity.
Since a classification made on the above said basis has received the approval of a Constitution Bench of equal strength and its correctness is not challenged before us, we treat this classification as a valid one even though a criticism of this kind of classification was made, not unjustifiably as we now see, by the Mysore High Court in D.G. Viswanath 's case.(1) This classification would include persons of all castes, groups and communities provided the two tests namely, occupation test and income test are satisfied.
Next comes the vexed question relating to the extent of reservation that can be made under article 15 (4) and article 16 (4) of the Constitution.
In Balaji 's case (supra) this Court took the view that since Article 15 (4) is an exception to Article 15 (1) and Article 16 (4) is an exception to Article 16 (1) and (2) any reservation made under Article 15 (4) and Article 16 (4) should not exceed 50 per cent of the total number of seats or posts, as the case may be.
The Court held that reservation of 68 per cent of seats under Article 15 (4) which was a special provision was invalid.
The Court further held that 'speaking generally and in a broad way a special ID provision should be less than 50 per cent, how much less than 50 per cent would depend upon the relevant prevailing circumstances in each case '.
This statement was understood by a Constitution Bench of this Court in T. Devadasan vs The Union of India and Anr.(2) as laying down the rule that reservation under Article 15 (4) or Article 16 (4) could not be more than 50 per cent of seats or posts.
In that case Mudholkar, J. speaking for the majority said at page 698: "Even if the Government had provided for the reservation of posts for Scheduled Castes and Tribes a cent per cent reservation of vacancies to be filled in a particular year or reservation of vacancies in excess of 50 per cent would, according to the decision in Balaji 's case, not be constitutional".
(1) A.I.R. 1964 Mys. 132.
(2) ; 490 But in the State of Kerala and Anr.
vs N.M. Thomas and Ors.
(supra) the question relating to the permissible extent of reservation arose for consideration.
Ray, C.J. came to the conclusion that taking into consideration the entire Government service, there was no excessive concession shown to the employees belonging to the Scheduled Castes and Scheduled Tribes.
Beg, J. (as he then was) was also of the same view.
Fazal Ali, J. Observed at page 1005 thus: "This means that the reservation should be within the permissible limits and should not be a cloak to fill all the posts belonging to a particular class of citizens and thus violate article 16 (1) of the Constitution indirectly.
At the same time clause (4) of article 16 does not fix any limit on the power of the Government to make reservation.
Since clause (4) is a part of article 16 of the Constitution it is manifest that the State cannot be allowed to indulge in excessive reservation so as to defeat the policy contained in article 16 (1).
As to what would be a suitable reservation within permissible limits will depend upon the facts and circumstances of each case and no hard and fast rule can be laid down, nor can this matter be reduced to a mathematical formula so as to be adhered to in all cases.
Decided cases of this Court have no doubt laid down that the percentage of reservation should not exceed 50 per cent.
As I read the authorities, this is, however, a rule of caution and does not exhaust all categories.
Suppose for instance a State has a large number of backward classes of citizens which constitute 80 per cent of the population and the Government, in order to give them proper representation, reserves 80 per cent of the jobs for them, can it be said that the percent age of reservation is bad and violates the permissible limits of clause (4) of article 16 ? The answer must necessarily be in the negative.
The dominant object of this provision is to take steps to make inadequate representation adequate.
" Krishna Iyer, J. in the same case observed at page 981 thus: "I agree with my learned brother Fazal Ali, J. in the view that the arithmetical limit of 50 per cent in any one 491 year set by some earlier rulings cannot perhaps be pressed too far.
Overall representation in a department does not depend on recruitment in a particular year, but the total strength of a cadre.
I agree with his construction of article 16 (4) and his view about the 'carry forward ' rule.
" After carefully going through all the seven opinions in the above case, it is difficult to held that the settled view of this Court that the reservation under Article 15 (4) or Article 16 (4) could not be more than 50 per cent has been unsettled by a majority of the Bench which decided this case.
I do not propose to pursue this point further in this case because if reservation is made only in favour of those backward castes or classes which are comparable to the Scheduled Castes and Scheduled Tribes, it may not exceed 5() per cent (including 18 per cent reserved for the Scheduled Castes and Scheduled Tribes and 15 per cent reserved for 'special group ') in view of the total population of such backward classes in the State of Karnataka.
The Havanur Commission has taken the number of students passing at S S.L.C. examination in the year 1972 as the basis for determining the backwardness.
The average passes per thousand of the total population of the State of Karnataka was 1.69 in 1972.
The average in the case of the Scheduled Castes was 0 56 and in the case of Scheduled Tribes was 0.51.
Even if we take all the castes, tribes and communities whose average is below 50 per cent of the State average i.e. below .85 per cent for classifying them as backward, large chunks of population which are now treated as backward would have to go out of the list of backward classes.
Consequently the necessity for reservation which would take the total reservation under Article 15 (4) and Article 16 (4) beyond 50 per cent of the total number of seats/posts would cases to exist.
The present arrangement has been worked for more than five years already.
It is now necessary to redetermine the question of backwardness of the various castes, tribes and communities for purposes of Article 15 (4) and Article 16 (4) in the light of the latest figures to be collected on the various relevant factors and to refix the extent of reservation for backward classes.
The reservation of 15 per cent now made under Article 15 (4) and Article 16 (4) but which may be traced to Article 14 and Article 16 (1) to 'special group ' based on occupation cum income can in any event be availed of by members of all communities and castes.
At this stage it should be made clear that if on a fresh determination some castes or communities have to go out of the list of 492 Backward classes prepared for Article 15 (4) and Article 16 (4), the Government may still pursue the policy of amelioration of weaker sections of the population amongst them in accordance with the directive principle contained in Article 46 of the Constitution.
There are in all castes and communities poor people who if they are given adequate opportunity and training may be able to compete success fully with persons belonging to richer classes The Government may provide for them liberal grants of scholarships, free studentship, free boarding and lodging facilities, free uniforms, free mid day meals etc.
to make the life of poor students comfortable.
The Government may also provide extra tutorial facilities, stationery and books free of cost and library facilities.
These and other steps should be taken in the lower classes so that by the time a student appears for the qualifying examination he may be able to attain a high degree of proficiency in his studies.
The State Government shall now proceed to redetermine the whole question of reservation of seats/posts under Article 15 (4) and Article 16 (4) of the Constitution in this judgment.
| In the pre independent period, the former princely State of Mysore which now forms part of the State of Karnataka is one of the earliest States in the country in which the system of reservation for backward classes in public services was introduced.
In 1918, the Government of His Highness the Maharaja of Mysore appointed a committee under the chairmanship Or Sir Leslie C. Miller, Chief, Justice of the Chief Court of Mysore to investigate and report on the problem of backward classes.
The questions referred to that Committee were (i) changes needed in the then existing rules of recruitment to the public services; (ii) special facilities to encourage higher and professional education among the members of backward classes and (iii) any other special measures which might be taken to increase the representation of backward communities in the public service without materially affecting the efficiency, due regard being paid also to the general good accruing to the State by a wider diffusion of education and feeling of increased status which will thereby be produced in the backward communities.
The expressions 'backward classes ' and 'backward communities, were used almost interchangeably and that the contained in Article 335 of the Constitution that any reservation made should not impair efficiency was anticipated more than three decades before the Constitution was enacted.
The committee submitted its report in 1921 containing its opinion that all communities in the State other than Brahmins should be understood as backward communities regarding whom it made certain recommendations.
The 353 Government orders issued on the basis of the Report continued to be in force till 1956 i.e. there organisation of States which brought together five integrating A units the former State of Mysore (including Bellary District), Coorg, four districts of Bombay, certain portions of the State of Hyderabad and the district of Sough Kanara and the Kollegal Taluk which formerly formed part of the State of Madras.
There were different lists of backward communities in the five integrating units and they were allowed to continue for sometime even after the reorganisation of States.
In order to bring about uniformity the State Government issued a notification containing the list of backward classes for the purpose of Article 15(4) of the Constitution at the beginning of 1959.
The validity of that notification and of another notification issued thereafter on the same topic which according to the State Government had treated all persons except Brahmins, Banias and Kayasthas as backward communities was challenged before the High Court of Mysore in Rama Krishna Singh vs State of Mysore, AIR The two notifications were struck down by the High Court holding (a) in as much as the impugned notifications contained list of backward classes including 55 per cent of the population of the State and all Hindu communities other than Brahmins, Banias and Kayasthas and all other non Hindu communities in the State except Anglo Indians and Parsees had been treated as backward classes it resulted more in a discrimination against the few excluded communities consisting of about 5 per cent of the total population rather than making provision for socially and educationally backward classes; (b) making provision for communities which were slightly backward to the so called forward communities did not amount to making provision for the communities which really needed protection under Article (15(4) of the Constitution; (c) socially and educationally backward classes can in some cases be determined on the basis of castes.
Therefore, the State Government constituted a Committee on January 8, 1960 under the Chairmanship of Dr R. Nagan Gowda for the purpose of determining the criteria for the classification of backward classes in the State with the following tern s of reference: (i) to suggest the criteria to be adopted in determining which sections of the people in the State should be treated as socially and educationally backward and (ii) to suggest the exact manner in which the criteria thus indicated should be followed to enable the State Government to determine the persons who should secure such preference as may be determined by Government in respect of admissions to technical institutions and appointment to Government services.
The said committee submitted its Interim Report on February 19, 1960.
On the basis of the Interim Report of the Committee, the State Government passed an order dated June 9, 1960 regarding admissions to professional and technical institutions reserving 22 per cent of seats for backward classes, 15 per cent for Scheduled Castes and 3 per cent for Scheduled Tribes and the remaining 60 percent of seats were allowed to be filled upon the basis of merit.
The order of the Government was challenged before the High Court of Mysore in S.A. Partha & Ors.
vs The State of Mysore & Ors.
A.J.R. 1961 Mys.
The High Court found that the direction contained in the Government order to the effect that if any seat or seats reserved for candidates belonging to the Scheduled Castes 354 and Scheduled Tribes remained unfilled, the same shall be filled by candidates A of other backward classes was unconstitutional.
It also gave some directions regarding the manner in which the calculation of the quota of reservation be made.
Thereafter the Final Report was submitted by the Nagan Gowda Committee on May 16, 1961.
After taking into consideration the recommendations made in the said Report, the State Government issued an order for the purpose of Article 15 (4) of the Constitution on July 10, 1961.
By that order, the State Government specified 81 classes of people as backward classes and 135 classes of people as more backward classes and reserved 30 percent of seat professional and technical institutions for backward and more backward classes.
15 per cent and 3 per cent of the seats were reserved for Scheduled Castes and Scheduled Tribes respectively and the remaining 52 per cent of the seats were allowed to be filled up on merit.
This order was challenged before the Supreme Court under Article 32 of the Constitutions in M. R. Balaji & Ors vs State of Mysore [1963] Supp.
1 SCR 439.
In this land mark decision of the Supreme Court, the meaning of the term "socially and educationally backward classes" appearing in Article 15(4) was explained as "The backwardness under Article 15(4) must be social and educational.
It is not either social or educational but it is both social and educational." After explaining as to how social and educational backwardness has to be determined, and the question of determination of the classes which were educationally backward, the court held that the inclusion of the members of the Lingayat community in the list of backward classes was erroneous.
On the question of extent of reservation that can be made the Court held that speaking generally and in a broad way, a special provision should be less then 50 per cent; how much less than 50 per cent should depend upon the relevant prevailing circumstances in each case.
" and thus allowed the petition Thereafter, the Government passed another order dated July 26, 1963 which directed that 30 per cent of the seats in professional and technical colleges and institutions should be reserved for backward classes as defined in that order and that 18 per cent of the seats should be reserved for the Scheduled Castes and Scheduled Tribes.
The criteria laid down in that order for determining social and economic backwardness were two fold income and occupation.
It stated that those who followed occupations of agriculture, petty business, inferior service, crafts or other occupations involving manual labour and whose family income was less than Rs. 1,200 per annum were to be treated as belonging to backward classes.
This order was questioned before the High Court in D.G. Viswanath vs Government of Mysore & Ors.
R. 1964 Mys.
132 by some petitioners on various grounds.
The High Court dismissed the petitions observing that the determination of the backward classes without reference to caste altogether was not correct and it expressed the hope that the State would make a more appropriate classification lest its bonafides should be questioned.
In the appeal filed against this judgment in R. Chitralekha & H. Anr.
v State of Mysore & Ors [196416 SCR 368 the Supreme Court explained the inconsistency between the High Court judgment with the decision in Balaji 's case and observed that "Two principles stand out prominently from 355 Balaji, namely, (i) the caste of a group of citizens may be a relevant circumstance in ascertaining their social backwardness; and (ii) though it is a relevant A factor to determine the social backwardness of class of citizens, it cannot be the sole or dominant test in that behalf casts is only a relevant circumstance in ascertaining the backwardness of a class and there is nothing in the judgment of the Supreme Court which precludes the authority concerned from determining the social backwardness of a group of citizens if it can do so without reference to caste." While this Court has not excluded caste from ascertaining the backwardness of a class of citizens, it has not made it one of compelling circumstances, affording a basis for the ascertainment of backwardness of a class.
Thereafter the State Government appointed the Karnataka Backward Classes Commission under the Chairmanship of Sri L.G. Havanur which after an elaborate enquiry submitted its report in four massive volumes on November 19,1975.
The Commission recommended that person belonging to backward classes for purposes of Article 15(4) of the Constitution should be divided into three groups (a) backward communities consisting of 15 castes (b) backward castes consisting of 128 castes and (c) backward tribes consisting of 62 tribes.
For purposes of Article 16(4) of the Constitution, the Commission divided the backward classes into (a) backward communities consisting of 9 castes(b) backward castes consisting of 115 castes and (c) backward tribes consisting of 61 tribes.
According to the Commission, backward communities were those castes whose student average of students passing SSLC examination in 1972 per thousand of population was below the State average (which was 1.69 per thousand) but above 50 per cent of the State average and backward castes and backward tribes were those castes and tribes whose student average was below 50 per cent of the State average except in the case of Dombars and Voddars and those who were Nomadic and de notified tribes.
The total population of these backward classes (other than Scheduled Castes and Scheduled Tribes), according to the Commission, was about 45 per cent of total population of the State.
The difference between the two lists one under Article 15(4) and the other under Article 16(4) of the Constitution was due to the exclusion of certain communities, castes and tribes which were socially and educationally backward but which had adequate representation in the services from the list prepared for the purpose of Article 16(4).
The Commission recommended both for purposes of Article 15(4) and Article 16(4) the percentage of reservations: (i) Backward communities 16 per cent; (ii) Backward Castes 10 per cent; and (iii) Backward Tribes 6 per cent and total 32 per cent.
The reservation of 32 per cent along with 18 per cent reserved for Scheduled Casts and Scheduled Tribes together amounted to 50 per cent of the total seats or posts, as the case may be.
The Commission further recommended if seats/posts remained unfilled in the quota allotted to backward tribes, they should be made over to backward communities and backward castes Similarly if seats/posts remain unfilled in the quota allotted to backward castes, they should be made over to backward communities and backward tribes If, however, seats/posts remain unfilled in the quota allotted to any of those three categories, they should be made over to Scheduled Castes and Scheduled Tribes.
In the event of seats/posts remaining unfilled by any of these categories they should be transferred to the general pool.
356 After considering the said Report, the State Government issued an order A dated February 22,1977 whereunder it listed the Backward communities.
Backward Castes and Backward Tribes who shall be treated as Backward classes for purposes of Articles 15(4) and 16(4) of the Constitution of India.
The order clarified, (a) that only such citizens of these Backward Classes whose family income per annum from all sources if Rs. 8000 (Eight thou sands only) and below shall be entitled to special treatment under these Articles and (b) that five categories, namely; an actual cultivator, an artisan, a petty businessman, one holding an appointment either in Government service or corresponding services under private employment including casual labour; and any person self employed or engaged in any occupation involving manual labour" of citizens shall be considered as a special group such citizens of this special group whose family income is Rs. 4,800 (Rupees four thousand and eight hundred only) and below per annum shall be eligible for special treatment under the two Articles.
The order further noted that (i) Family income means income of the citizen and his parents and if either of the parents is dead, his legal guardian; and (b) to fix the reservation for purposes of Articles 15(4) and 16(4) of the Constitution in respect of the Backward classes and the special group of citizens at 40 per cent, the allocation being Backward Communities (20 per cent), Backward castes (10 per cent, Backward Tribes (5 per cent), and special group (5 per cent).
In the list of backward communities mentioned in the Government order, the State Government included ' Muslims ' thus making a total of 16 backward communities.
In the list of backward castes there were 129 castes including converts into Christianity from Scheduled Castes/Scheduled Tribes upto second generation and 62 Scheduled Tribes.
The reservation for backward classes was 40 percent and taken along with 18 per cent for Scheduled Castes and Scheduled Tribes, the total reservation of seats/posts came to 58 per cent leaving only 42 per cent for merit pool.
The Government order dated February 22, 1977 and another notification dated March 4, 1977 issued for purposes of Article 16(4) had also been challenged in a number of writ petitions filed under Article 226 of the Constitution before the High Court of Karnataka in S Somashekarappa & Ors.
v State of Karnataka & Ors (Writ Petition No 43;1 of 1977 and connected writ petition disposed of on April 9, 1979).
Allowing the petitions; the High Court quashed (i) the inclusion of `Arasu ' community in the list of 'Backward Communities ' both for purposes of Article 15(4) and Article 16(4); (ii) the inclusion of the (a) Balija (b) Devadiga (c) Ganiga (d) Nayinda (e) Rajput and (f) Satani in the list of backward communities and the inclusion of (a) Banna (b) Gurkha (c) Jat (d) Konga (e) Kotari (f) Koyava (g) Malayali (h) Maniyanani or (Muniyani) (i) Padatti (j) Padiyar (k) Pandavakul (l) Raval and (m) Rawat in the list of backward classes for purposes of Article 16(4) of the Constitution; and (iii) reservation of 20 percent made for Backward communities in the State Civil Services under Article 16(4), reserving liberty to the State Government to determine the extent of reservation in accordance with law.
The classification and reservation in other respects was upheld.
Special Leave Petitions (Civil) No. 6656 of 1979 and 985411979 are filed against the said Judgment of the High Court under Article ] 36 of the Constitution.
357 After the said judgment of the High Court, by an order dated May 1, 1979, the reservation for backward communities was reduced to 18 per cent A for purposes of Article 16(4).
By an order dated June 27, 1979, the State Government modified the Government order dated February 22, 1977 by increasing the reservation for 'Special Group ' from 5 per cent to 15 per cent both for purposes of Article 15(4) and Article 16(4) of the Constitution.
Thus as on date, the total reservation for purposes of Article 15(4) is 68 per cent and for purposes of Article 16(4) is 66 per cent.
There are only 32 per cent seats in professional and technical colleges and 34 per cent posts in Government services which can be filled up on the basis of merit.
These writ petitions filed under Article 32 of the Constitution of India, seek to challenge the Constitutional validity of the State Government orders dated February 22,1977 as modified by the Government orders dated May ],1979 and June 27,1979.
Disposing of the petitions and the appeals by Special Leave, the Court expressed their following opinions, Per Chandrachud, C.J. The following propositions on the issue of reservation may serve as a guideline to the Commission which the Government of Karnataka proposes to appoint, for examining the question of affording better employment and educational opportunities to Scheduled Castes, Scheduled Tribes and other Backward Classes which problem is a burning issue to day.
The reservation in favour of scheduled castes and scheduled tribes must continue as to present, there is, without the application of a means test, for a further period not exceeding fifteen years.
Another fifteen years will make it fifty years after the advent of the Constitution, a period reasonably long for the upper crust of the oppressed classes to overcome the baneful effects of social oppression, isolation and humiliation.
[376 C D] 2.
The means test, that is to say, the test of economic backwardness ought to be made applicable even to the Scheduled Castes and Scheduled Tribes after the period mentioned in (1) above.
It is essential that the privileged section of the underprivileged society should not be permitted to monopolise preferential benefits for an indefinite period of time.
[376E F] 3.
In so far as the Other Backward Classes are concerned, two tests should be conjunctively applied for identifying them for the purpose of reservations in employment and education: One, that they should be comparable to the Scheduled Castes and Scheduled Tribes in the matter of their backwardness; and two, that they should satisfy the means test such as a State Government may lay down in the context of prevailing economic conditions.
[376 F G] 4.
The policy of reservations in employment, education and legislative institutions should be reviewed every five years or so.
That will at once afford an opportunity (i) to the State to rectify distortions arising out of particular facts of the reservation policy and (ii) to the people, both backward and, non 358 backward, to ventilate their views in a public debate on the practical impact of A the policy of reservations.
[376 H; 377 Al Per Desai J For a period of three and half decades, the unending search for identifying socially and educationally backward classes of citizens has defined the policy makers, the interpreters of the policy as reflected in statutes or executive administrative orders and has added a spurt in the reverse direction, namely, those who attempted to move upward (Pratilom) in the social hierarchy have put the movement in reverse gear so as to move downwards (Anulom) in order to be identified as a group or class of citizens socially and educationally backward.
The Constitution promised an egalitarian society; it was a caste ridden stratified hierarchical society.
Therefore, in the early stages of the functioning of the Constitution it was accepted without dissent or dialogue that caste furnishes a working criterion for identifying socially and educationally backward class of citizens for the purpose of Article 15(4).[377 D G] The language of Article 15(4) refers to 'class ' and not caste.
Preferential treatment which cannot be struck down as discriminatory was to be accorded a class, shown to be socially and educationally backward and not to the members of a case who may be presumed to be socially and educationally backward.
[378 A B] It is clear from the decisions of the Supreme Court that same vacillation on the part of the judiciary on the question whether the caste should be the basis for recognising the backwardness.
Judiciary retained its traditional blindfold on its eyes and thereby ignored perceived realities.
The expression `backward classes ' is not defined.
Courts, therefore have more or less in the absence of well defined criteria not based on caste label has veered round to the view that in order to be socially and educationally backward classes, the group must have the same indicia as Scheduled Castes and Scheduled Tribes.
[378 E; 384 E F] State of Madras vs Srimathi Champakam Dorairajad & Anr ; ; M R. Balaji & Ors v State of Mysore [1963] Supp.
1 SCR 439; T. Devadesan v The Union of India & Anr [19641 4 SCR 680; R. Chitralekha & Anr.
v State of Mysore & Ors.
; ; Triloki Nath & Anr vs State of Jammu State of Jammu & Kashmir & Ors [1969] I SCR 103; A. Peeriakaruppan etc.
vs State of Tamil Nadu [1971] 2 SCR 430, State of Andhra Pradesh & Ors.
vs U.S.V. Balram etc [19721 3 SCR 247; Janki Prasad Parimoo & Ors etc etc v State of Jammu & Kashmir & Ors.
[ ; ; State of Uttar Pradesh v Pradip Tandon & Ors ; State of Kerala & Anr v N M Thomas & Ors.
11976l 1 SCR 906; Kumari K S Jayasree & Anr v The State of Kerala & Anr.
; ; and Akhil Bhartiya Soshit Karamchari Sangh (Railway) represented by its Assistant General Secretary on behalf of the Association v Union of India & Ors. ; , referred to.
A caste is a horizontal segmental division of society spread over a district of a region or the whole State and also sometimes outside it.
The 359 concept of purity and impurity conceptualises the caste system.
There are four essential features of the caste system which maintained in homo hierarchicus character; (i) hierarchy (ii) commensality (iii) restrictions on marriage and (iv) hereditary occupation.
Most of the caste are endogamous groups.
Inter marriage between two groups is impermissible.
But `Pratilom ' marriages are not wholly unknown.
Similarly with the onward movement of urbanisation, members of various castes are slowly giving up, traditional occupations and the pure impure avocations is being frowned upon by developing notion of dignity of labour.
As the fruits of independence were unequally distributed amongst various segments of the society, in each caste there came into existence a triple division based on economic resurgence amongst the members of the caste.
Those who have become economically well off have acquired an upper class status (class consciousness) and the one on the step below is the middle class and the third one belongs to poorer section of the caste.
This led to the realisation that caste culture does not help economic interest.
In fact the upper crust of the same caste is verily accused of exploiting the lower strata of the same caste.
Therefore, the basis of the caste system namely, purity and pollution is slowly being displaced by the economic condition of the various segments of the same caste.
It is recognised on almost all hands that the important feature of the caste structure are progressively suffering erosion.
The new organisation, the so called caste organisation, is substantially different from the traditional caste structure and caste councils.
Economic differentiation amongst the members of the caste has become sharp, but not so sharp as to bury caste sentiments and ties.
In the face of this transformation of the caste structure, caste label can not be accepted as the basis for determining social and educational backwardness, but the class or the social group should be examined [385 C H; 386 A D] Caste in rural society is more often than not mirrored in the economic power wielded by it and vice versa.
Social hierarchy and economic position exhibit an undisputable mutuality.
The lower the caste, the poorer its members.
The poorer the members of a caste, the lower the caste.
Caste and economic situation, reflecting each other as they do are the Deus ex Machina of the social status occupied and the economic power wielded by an individual or class in rural society.
Social status and economic power are so woven and fused into the caste system in Indian rural society that one may, without hesitation, say that if poverty be the cause, caste is the primary index of social backwardness, so that social backwardness is often readily identifiable with reference to a person 's caste So sadly and oppressively deep rooted is caste in our country that it has cut across even the barriers of religion.
The caste system has penetrated other religious and dissentient Hindu sects to whom the practice of caste should be anathema and today we find that practitioner of other religious faiths and Hindu dissentients are some times as rigid adherents to the system of caste as the conservative Hindus.
[386 E H] Shared situation in the economic hierarchy, caste gradation, occupation, habitation, style of consumption, standard of literacy and a variety of such other factors appear to go to make towards social and educational backwardness.
Thus there is a mad rush for being recognised as belonging to a caste 360 which by its nomenclature would be included in the list of socially and A educationally backward classes.
Certain castes are known by a number of synonymy which vary from one region to the other and making their complete coverage almost impossible.
The only way out would in such a situation is to treat, if a particular caste has been treated as backward, all its synonyms whether mentioned in the State lists or not as backward.
Again, some of the castes just for the sake of being considered socially and educationally backward, have degraded themselves to such an extent that they had no hesitation in attributing different types of vices to and associating other factors indicative of backwardness, with their castes.
The only remedy for such a malaise is to devise a method for determining socially and educationally backward classes without reference to caste, beneficial to all sections of people irrespective of the caste to which they belong.
[387 B H; 388 A] A few other aspects for rejecting caste as the basis for identifying social and educational backwardness are: (i) If State patronage for preferred treatment accepts caste as the only insignia for determining social and educational backwardness; the danger looms large that this approach alone would legitimise and perpetuate caste system.
It does not go well with our proclaimed secular character as enshrined in the Preamble to the Constitution.
The assumption that all members of some caste are equally socially and educationally backward is not well founded.
Such an approach provides an over simplification of a complex problem of identifying the social and educational backwardness: (ii) it is recognised reservation has been usurped by the economically well placed section in the same caste; and (iii) the caste is, as is understood in Hindu Society unknown to Muslims, Parsis, Jews etc.
As such, caste criterion would not furnish a reliable yardstick to identify socially and educationally backward group in the aforesaid communities though economic backwardness would.
[388 P G; 389 A;F] Therefore, the only criterion which can be realistically devised is the one of economic backwardness.
To this may be added some relevant criteria such as the secular character of the group, its opportunity for earning livelihood etc, but by and large economic backwardness must be the load star.
[389 F] Chronic poverty is the bane of Indian Society.
Market economy and money spinning culture has transformed the general behaviour of the society towards its members.
Upper caste does not enjoy the status or respect, traditional, voluntary or forced any more even in rural areas what to speak of highly westernised urban society.
The bank balance, the property holding and the money power determine the social status of the individual and guarantee the opportunities to rise to the top echelon.
How the wealth is acquired has lost significance.
Purity of means disappeared with Mahatma Gandhi and we have reached a stage where ends determine the means.
This is the present disturbing situation whether one likes it or not.
[389 G H; 390 A B] Reservation in one or other form has been there for decades.
If a survey is made with reference to families in various castes considered to be socially and educationally backward, about the benefits of preferred treatment, it would 361 unmistakably show that the benefits of reservations are snatched away by the top creamy layer of the backward castes.
This has to be avoided at any cost.
[390 E] If economic criterion for compensatory discrimination or affirmative action is accepted, it would strike at the root cause of social and educational backwardness, and simultaneously take a vital step in the direction of destruction of caste structure which in turn would advance the secular character of the Nation.
This approach seeks to translate into reality the twin constitutional goals: one, to strike at the perpetuation of the caste stratification of the Indian Society so as to arrest progressive movement and to take a firm step towards establishing a casteless society; and two, to progressively eliminate the disadvantageous sections of the society to raise their position and be part of the mainstream of life which means eradication of poverty.
However, this does not deal with reservation in favour of Scheduled Castes and Scheduled Tribes.
Thousands of years of discrimination and exploitation cannot be wiped out in one generation.
But even here economic criterion is worth applying by refusing preferred treatment to those amongst them who have already benefited by it and improved their position.
And finally reservation must have a time span otherwise concession tend to become vested interests.
[391 E H; 392 A] Per Chinnappa Reddy .r.
The paradox of the system of reservation that may be made under Articles 15(4),16(4) read with 29(2) of the Constitution is that it has engendered a spirit of self denigration among the people.
Nowhere else in the world do castes, classes or communities queue up for the sake of gaining the backward status.
Nowhere else in the world is there competition to assert backwardness and to claim 'we are more backward than you '.
This is an unhappy and disquieting situation, but it is stark reality.
[392 E F] 2.
The Scheduled Castes, the Scheduled Tribes and other socially and educationally backward classes, all of whom have been compendiously described as 'the weaker sections of the people ', have long journeys to make unsociety.
They need aid; they need facility; they need launching; they need propulsion.
Their needs are their demands.
The demands are matters of right and not of philanthropy.
They ask for parity, and not charity.
They claim their constitutional right to equality of status and of opportunity and economic and social justice.
Several bridges have to be erected, so that they may cross the Rubicon.
Professional education and employment under the State are thought to be two such bridges.
Hence the special provision for advancement and for reservation under Articles 15(4) and 16(4) of the Constitution.
[393 C D] 3.
Courts are not necessarily the most competent to identify the backward classes or to lay down guidelines for their identification except in a broad and very general way.
Courts are not equipped for that; Courts have no legal barometers to measure social backwardness and are truly removed from the people, particularly those of the backward classes, by layer upon layer of gradation and degradation.
And, India is such a vast country that conditions 362 vary from State to State, region to region, 'district to district and from one A ethnic religious, linguistic or caste group to another.
A test to identify back ward classes which may appear appropriate when applied to one group of people may be wholly inappropriate and unreasonable if applied to another group of people.
There can be no universal test; there can be no exclusive test; there can be no conclusive test.
In fact, it may be futile to apply and rigid tests.
One may to look at the generality and the totality of the situation.
[398 A C] 4.
Before attempting to lay down any guideline for the purpose of determining the methods to be adopted for identifying the socially and educationally backward classes one should guard against the pitfalls of the traditional approach to the question, which has generally been superior, elitist and, therefore, ambivalent.
The result is that the claim of the Scheduled Castes and Scheduled Tribes and other backward classes to equality as a matter of human and constitutional right is forgotten and their rights are submerged in what is described as the "Preferential principle" or "protective or compensatory discrimination".
Unless these superior, patronising and paternalist attitudes are got rid off.
It is difficult to truly appreciate the problems involved in the claim of the Scheduled Castes, Scheduled Tribes and other backward classes for their legitimate share of the benefits arising out of their belonging to humanity and to a country whose constitution preaches justice, social, economic and political and equality of status and opportunity for all.
[393 E H] 5.
There is neither statistical basis nor expert evidence to support the assumption that efficiency will necessarily be impaired if reservation exceeds 50%, if reservation is carried forward or if reservation is extended to promotional posts.
The word 'efficiency ' is neither sacro sanct nor is the sanctorum has to be fiercely guarded. 'Efficiency ' is not a Mantra which is whispered by the Guru in the Sishya 's ear.
The mere securing of high marks at an examination may not necessarily mark out a good administrator.
An efficient administrator, one takes it, must be one who possesses among other qualities the capacity to understand with sympathy and, therefore, to tackle bravely the problems of a large segment of population constituting the weaker sections of the people.
This does not mean that efficiency in civil service is unnecessary or that it is a myth.
However, one need not make a fastidious fetish of it.
It may be that for certain posts, only the best may be appointed and for certain courses of study only the best may be admitted.
If so, rules may provide for reservation for appointment to such posts and for admission to such courses.
The rules may provide for an appropriate method of selection.
It may be that certain posts require a very high degree of skill or efficiency and certain courses of study require a high degree of industry and intelligence.
If so, the rules may prescribe a high minimum qualifying standard and an appropriate method of selection.
Different minimum standards and different modes of selection may be prescribed for different posts and for admission to different courses of study having regard to the requirements of the posts and the courses of study.
But, efficiency cannot be permitted to be used as a camouflage to let the upper classes monopolise the services, particularly the higher posts and the professional institutions.
In view of Articles 15(4) and 16(4), the so called 363 controversy between the moratorium and compensatory principles is not of any significance.
[395 D; G H; 396 C G; 397 F] 6.
The three dimensions of social inequality are class, status and power.
Everyone of these three dimensions are intimately and inextricably connected with economic position.
Viewed from any of these three dimensions it is clear that the economic factor is at the bottom of backwardness and poverty is the culprit cause and the dominant characteristic.
The economic power has firm links with the castes system, land and learning, two of the primary sources of economic power in India have been the monopoly of the superior castes.
Social status and economic power are so woven and fused into the caste system in Indian rural society that one may, without hesitation, say that if poverty be the cause, caste is the primary index of social backwardness, so that social backwardness is often readily identifiable with reference to a person 's caste.
Shared situation in the economic hierarchy, caste gradation, occupation, habitation, style of consumption, standard of literacy and a variety of such other factors appear to go to make towards social and educational backwardness.
[398 F; 399 C H 400 G H] 7.
" The backward classes of citizens" referred to in Article 16(4), despite the short description, and the same as 'the socially and educationally backward classes of citizens and the scheduled castes and the scheduled tribes ' so fully described in Article 15(4).
Again the ' special provision for advancement ' is a wide expression any may include many more things besides 'mere reservation of seats in colleges It may be by way of financial assistance, free medical, educational and hostel facilities, scholarships, free transport, concessional or free housing, exemption from requirements insisted upon in the case of other classes and so on.
Under Article 16(4), reservation is to be made to benefit those backward classes, who in the opinion of the Government are not adequately represented, in the services.
Reservation must, therefore, be aimed at securing adequate representation.
It must follow that the extent of reservation must match the inadequacy of representation.
There is no reason why this guideline furnished by the Constitution itself should not also be adopted for the purposes of Article 15(4) too.
The reservation of seats in professional colleges may conveniently be determined with reference to the inadequacy of representation in the various professions.
Similarly, the extent of reservation in other colleges may be determined with reference to the inadequacy in the number of graduates, etc.
Naturally, if the lost ground is to be gained, the extent of reservation may even have to be slightly higher than the percentage of population of the backward classes.
[403 H; 404 A F] 8.
The ordinary rules of statutory interpretations cannot be applied to interpret constitutional instruments which are sui generis and which deal with situations of significance and consequence.
The Constitution must be given a generous interpretation so as to give all its citizens, the full measure of justice promised by it.
[406 D E] There is no reason whatever to narrow the concept of equality in Article 16(1) and refuse to read into it broader concepts of social justice and equality.
In fact it is necessary to read Article 16(1) so as not to come into any conflict 364 with Articles 46 and 335.
A constitutional document must be read so as to synthesise its provisions and avoid disharmony.
To say that equality means that unequals cannot be treated equally is merely to say what is self evident and common place.
Article implies it and it is not implied in Article 16(1) also.
True, on a first glance, Article 16(4) appears to save power of the State to make provision for the reservation of appointments and posts in favour of any backward class of citizens, but a second look shows that it really recognises a pre existing power and expresses the recognition in an emphatic way lest there should be any doubt caste upon that power.
Such a device is not unknown to legislatures and constitution making bodies.
Article 16(4) is more in the nature of a rule of interpretation to guide the construction of Article 16(1).
The possibility of interpreting Article 16(1) so as to promote the narrower equality rather than the greater equality is excluded by Article 16(4).
[425 CE] 9.
The test of nearness to the conditions of existence of the Scheduled Castes would practically nullify the provision for reservation for socially and educationally Backward Classes other then Scheduled Castes and Tribes, would perpetuate the dominance of existing upper classes, and would take a substantial majority of the classes, who are between the upper classes and the Scheduled Castes and Tribes out of the category of backward classes and put them at a permanent disadvantage.
Only the 'enlightened ' classes of body will capture all the 'open ' posts and seats and the reserved posts and seats will go to the Scheduled Castes and Tribes and those very the Scheduled Castes and Tribes.
1 he bulk of these behind the 'enlightened ' classes and ahead of the near Scheduled Castes and Tribes would be left high and dry, with never a chance of improving themselves.
[406 G H; 407 A) 10.
On principle, there can be a classification in to Backward Classes and More Backward Classes, if both classes are not merely a little behind but far behind the most advanced classes.
In fact such a classification would be necessary to held the More Backward Classes; otherwise those of the Backward Classes who might be a little more advanced than the More Backward Classes might walk away with all the seats, just as, if reservation was confined to the More Backward Classes and no reservation was made to the slightly more advanced Backward Classes, the most advanced Classes would walk away with all the seats available for the general category leaving none for the Backward Classes.
[409 A D] 11.
As to the adoption of the test average student population in the last three High School Classes of all High Schools in the State in relation to a thousand citizens of that community as the basis for assessing relative backwardness, the adoption of a lower basis may give a false picture.
After all, if one is considering the question of admission to professional colleges or of appointment to posts, the basis possibly should be the average number of students of that community who have passed the examination prescribed as the minimum qualification for admission to professional colleges, say in the last three years and perhaps the average number of persons of that community who have graduated in the last three years, since graduation is generally, the mini mum extent qualification for most posts possibly, the extent of reservation may even vary with reference to the class of post.
[490 D H] 365 12.
The percentage of reservation is not a matter upon which a Court may pronounce with no materials at hand.
For a Court to say that reservations should not exceed 40 per cent, 50 per cent or 60 per cent would be arbitrary and the Constitution does not permit us to be arbitrary.
[410 E F] 13.
From the historical and sociological background of caste and class the philosophy, the reason and the rhetoric behind reservation and anti reservation, the Constitutional provisions and the varying judicial stances, the following emerges; (a) clearly there exist large sections of people who are socially and educationally backward who stand midway between the forward classes such as the landed, the learned, the priestly and the trading classes on one side and the out caste and depressed classes, i.e. the Scheduled Castes and the Scheduled Tribes on the other;(b) Poverty, Caste, occupation and habitation are the principal factors which contribute to brand a class as socially backward.
The customs which they honour and observe, the rituals which they fear and practice the habits to which they adapt and conform, the festivals which they enjoy and celebrate and even the Gods that they revere and worship are enlightening elements in recognising their social gradation and backwardness; (c) Amongst very many classes and communities considered socially inferior, child marriage persists, the rule of Saptapadi is not followed; divorces are granted by a caste panchayat; (d) dress and work habit is yet another indication that economic situation and social situation often reflect each others; (e) there are many other customs, rituals or habits of significance mark out the socially backward class; (f) the weight to be attached to these factors depends upon the circumstances of the case which can only be revealed by thoughtful, penetrating investigation and analysis.
It cannot be done by means of mathematical formulae but only by looking in the round or taking a look at the entire situation.
Sometimes it may be possible to readily identify certain castes or social groups as a whole as socially forward or socially backward classes.
Poverty, of course, is basic, being the root cause as well as the rueful result of social and educational backwardness But mere poverty it seems is not enough to invite the constitutional branding because of the vast majority of the people of our country are poverty struck but some among them are socially and educationally forward and others backward.
In a country like India where 80 per cent of the people live below the breadline, even the majority of the so called socially forward classes may be poor.
In the rural social ladder they are indeed high up and despite the economic backwardness of sizeable sections of them, they cannot be branded as socially backward.
On the other hand, there are several castes or other social groups who have only to be named to be immediately identified as socially and economically backward classes, identified as socially backward classes.
[431 F H; 432 A F; 433 A E] R. Chitralekha vs State of Mysore, ; ; Rajendran vs State of Madras,1968] I SCR 721; State of Andhra Pradesh vs P. Sagar, [1968]3 SCR 595; Triloki Nath vs State of Jammu & Kashmir, ; ; A. Peeriakaruppan vs State of Tamil Nadu.
1197]] 1 8CC 38; State of Andhra Pradesh vs Balram ; ; State of Uttar Pradesh vs Pradeep Tandon 11975l 2 SCR 761; X.S. Jayasree vs State of Kerala ; ; State of Kerala vs N.M. Thomas [1976] I SCR 906; Akhil Bhartiya Soshit Karamchari Sangh v Union of India & Ors.
referred to.
366 (g) True, a few members of those caste or social groups may have progressed far enough and forged ahead so as to compare favourably with the leading forward classes economically, socially and educationally.
In such cases, per haps and upper income ceiling would secure the benefit of reservation to such of these members of the class who really deserve it; (h) In the cases of poorest sections of the forward classes, the State will have to and it is the duty of the State to do to discover means of assisting them means other than reservations under Article 15(4) and 16(4).
[433 G H] 14.
In the ultimate analysis, attainment of economic equality is the final and the only solution to the besetting problems.
There is also one danger in adopting individual property as the criterion to identify a member of the backward classes.
The truly lower classes who need the certificate most to prove their poverty will find it difficult to get the certificate from the official or the legislator or any named person [434 B C] 15.
Class poverty, not individual poverty, is therefore the primary test.
Other ancillary tests are the way of life, the standard of living, the place in the social hierarchy, the habits and customs, etc. etc.
Despite individual exceptions, it may be possible and easy to identify social backwardness with reference to caste, with reference to residence, with reference to occupation or some other dominant feature.
notwithstanding our antipathy to caste and sub regionalism, these are facts of life which cannot be wished away.
If they reflect poverty which is the primary source of social and educational backwardness, they must be recognised for what they are along with other less primary sources.
There is and there can be nothing wrong in recognising poverty wherever it is reflected as an identifiable group phenomena whether you see it as a caste group, a sub regional group, an occupational group or some other class.
Once the relevant factors are taken into consideration, how and where to draw the line is a question for each State to consider since the economic and social conditions differ from area to area.
Once the relevant conditions are taken into consideration and the backwardness of a class of people is determined, it will not be for the court to interfere in the matter.
But certainly, judicial review will not stand excluded.
[334 D G] Per A.P. Sen, J. 1.
Conceptually, the making of special provisions for the advancement of backward classes of citizens under article 15(4) and the system of reservation of appointments or posts as envisaged by article 16(4) as guaranteed in the Constitution, is a national commitment and a historical need to eradicate age old social disparities in our country.
But unfortunately the policy of reservation higher to formulated by the Government for the upliftment of such socially and educationally backward classes of citizens is caste oriented while the policy should be based on economic criteria.
Then alone the element of caste in making such special provisions or reservations under articles 15(4) and 16(4) can be removed.
[435B D] 2.
It is true that mere economic backwardness would not satisfy the rest of educational and social backwardness under Article 15(4), and is only 367 One of several tests to be adopted.
The predominant and the only factor for making special provisions under Article 15(4) or for reservations of posts and appointments under article 16(4) should be poverty, and caste or a sub caste or a group should be used only for purposes of identification of persons comparable to Scheduled Castes or Scheduled Tribes, till such members of backward classes attain a state of enlightenment and there is eradication of poverty amongst them and they become equal partners in a new social order in our national life.
[435 H; 436 C D] 3.
The adequacy or otherwise of representation of the backward classes in the services has to be determined with reference to the percentage of that class in the population and the total strength of the service as a whole.
The representation does not have to exactly correspond to the percentage of that class in the population; it just has to be adequate.
Moreover, in the case of services the extent of representation has to be considered by taking into account the number of members of that class in the service, whether they are holding reserved or unreserved posts.
[436 E F] 4.
The State should give due importance and effect to the dual constitutional mandates of maintenance of efficiency and the equality of opportunity for all persons.
The nature and extent of reservations must be rational and reasonable.
The state of backwardness of any class of citizens is a fact situation which needs investigation and determination by a fact finding body which has the expertise and the machinery for collecting relevant data.
The Constitution has provided for the appointment of such a Commission for Backward Classes by the President under article 340 to make recommendations and left if to the States to make special provisions for advancement of such backward classes.
It may be, and often is, difficult for the Court to draw the line in advance which the State ought not to cross, but it is never difficult for the Court to know that an invasion across the border, however ill defined, has taken place.
The Courts have neither the expertise nor the sociological knowledge to define or lay down the criteria for determining what are 'socially and educationally backward classes of citizens ' within the meaning of article 15(4) which enables the State to make 'special provisions for the advancement ' of such classes notwithstanding the command of article 15(2) that the State shall not discriminate against any citizens on the ground only of religion, race, caste, descent, place of birth, residence or any of them.
The Supreme Court is ill equipped to perform the task of determining whether a class of citizens is socially and educationally backward, but, however a duty to interpret the Constitution and to see what it means and intends when it makes provision for the advancement of socially and educationally backward classes.
In considering this situation then, Courts must never forget that it is the Constitution they are expounding.
Except for this, the Court has very little or no function.
[436 G H; 437 A D] 5.
The Preamble to our Constitution shows the nation 's resolve to secure to all its citizens: Justice Social, economic and political.
The State 's objective of bringing about and maintaining social justice must be achieved reasonably having regard to the interests of all.
Irrational and unreasonable moves by the State will slowly but surely tear apart the fabric of society.
It is primarily the 368 duty and function of the state to inject moderation into the decisions taken under articles 15(4) and 16(4), because justice lives in the hearts of men and a growing sense of injustice and reverse discrimination, fueled by unwise State action, will destroy, not advance, social justice.
If the State contravenes the constitutional mandates of article 16(1) and article 335, the Supreme Court will of course, have to perform its duty.
[437 F G] 6.
The extent of reservation under article 15(4) and article 16(4) must necessarily vary from State to State and from region to region within a State, depending upon the conditions prevailing in a particular State or region, of the Backward Classes.
Since the problems pertaining in reservation can never be resolved through litigation in the Courts, the Central Government should consider the feasibility of appointing a permanent National Commission for Backward Classes which must constantly carry out sociological and economic study from State to State and from region to region within a State.
The framers of the Constitution by enacting article 340 clearly envisaged the setting up of such a high powered National Commission for Backward Classes at the Centre.
[437 H; 438 A B] 7.
The doctrine of protective discrimination embodied in articles 15(4) and 16(4) and the mandate of article 29(2) cannot be stretched beyond a particular limit.
The State exists to serve its people.
There are some services where expertise and skill are of the essence.
Medical services directly affect and deal with the health and life of the populace.
Professional expertise, born of knowledge and experience, of a high degree of technical knowledge and operational skill is required of pilots and aviation engineers.
The lives of citizens depend on such persons.
There are other similar fields of governmental activity where professional, technological, scientific or other special skill is called for.
In such services or posts under the Union or States, there can be no room for reservation of posts; merit alone must be the sole and decisive consideration for appointments.
[438 C E] Per Venkataramiah, J. 1.
Equality of opportunity revolves around two dominant principles (i) the traditional value of equality of opportunity; and (ii) the newly appreciated not newly conceived idea of equality of results.
The Society which cherishes the ideal of equality has to define the meaning and consent of the concept of equality and the choices open to it to bring about an egalitarian society would always be political.
But the Courts have been forced to scrutinise a variety of choices, while society for which they have to answer has been issuing a proliferation of demands.
Many inequalities in the past seemed almost to have been part of the order of nature.
The Courts, however deal with the problems that society presents.
`Levels of awareness and corresponding senses of grievance have arisen at different times for particular historical reasons often tending to differentiate among the categories of equality rather than unifying them.
Inequalities of class, race, religion and sex have presented themselves at different periods as primary grievances '.
The Courts must remind themselves that for those who are suffering from deprivation of inalienable rights, gradualism can never be a sufficient remedy.
Ours is a 'struggle for status, a struggle 369 to take democracy off parchment and give it life. ' 'Social injustice always balances its books with red ink '.
Neither the caprice of personal taste nor the protection of vested interests can stand as reasons for restricting opportunities of any appropriately qualified person.
These are the considerations which sometimes may be conflicting that should weigh with the courts while dealing with cases arising out of the doctrine of equality.
It should, however, be remembered that the courts by themselves are not in a position to bring the concept of equality into fruitful action.
They should be supported by the will of the people of the Government and of the legislators.
These should be an emergence of united action on the part of all segments of human society.
This is not all.
Mere will to bring about equality under the existing economic level might worsen the situation.
There should be at the same time a united action to increase the national resources so that the operation of equality will be less burdensome and every member of the society is carried to a higher social and economic level leaving nobody below a minimum which guarantees all the basic human needs to every member of the society.
If there is no united action the pronouncements by courts would become empty words as many of the high principles adumberated in the chapter on the Directive Principles of State Policy in the Constitution have turned out to be owing to several factors.
[440 B H; 441 A] 2.
The need for social action is necessitated by the environmental factors and living conditions of the individuals concerned.
The application of the principle of individual merit, unmitigated by other considerations may quite often lead to inhuman results 1441 G] 3.
An examination of the question of the background of the Indian Social conditions caste ridden atmosphere shows that the expression "backward classes" used in the Constitution referred only to those who were born in particular castes, or who belonged to particular races or tribes or religious minorities which were backward.
This is so because a caste is based on various factors, sometimes it may be a class, a race or a racial unit and the caste of a person is governed by his birth in.
the family.
[459 E; 457 F] It is significant that the expression "backward classes" used in Part XVI of the Constitution and in particular in Article 338(3) is used along with the Scheduled Castes, the Scheduled Tribes and the Anglo Indian Community.
The meaning of "backward classes" has, therefore, to be deduced along with the other words preceding it.
[462 G] It is a rule of statutory construction that where there are general words following particular and specific words, the general words must be confined to things of the same kind as those specified.
It is true that this rule which is called as the ejusdem generise rule or the rule noscitur a sociis cannot be carried too far.
But it is reasonable to apply that rule where the specific words refer to a distinct genus or category.
[462 H; 463 A] Part XVI of the Constitution deals with certain concessions extended to certain castes, tribes and races which are Scheduled Castes and Scheduled Tribes and to the Anglo Indian community.
In the context if Article 338(3) and 370 Article 340 are construed, the expression 'backward classes ' can only refer to A certain castes, races tribes or communities or parts thereof other than Scheduled Castes, Scheduled Tribes and the Anglo Indian community, which are backward.
Clause (6) of the resolution regarding the aims and objects of the Constitution moved by Pandit Jawaharlal Nehru on December 13, 1946 and the history of the enactment of Part XVI of the Constitution by the Constituent Assembly lead to the conclusion that backward classes are only those castes, races, tribes or communities, which are identified by birth, which are backward.
It is, therefore,difficult to hold that persons or groups of persons who are backward merely on account of poverty which is traceable to economic reasons can also be considered as backward classes for purposes of Article 16(4) and Part XVI of the Constitution.
[463 C D; 466 G H] The Drafting Committee by qualifying the expression "class of citizens" by "backward" in Article 16(4) of the Constitution tried to reconcile three different points of view and produced a workable proposition which was acceptable to all, the three points of view being (i) that there should be equality of opportunity for all citizens and that every individual qualified for a particular post should be free to apply for that post to sit for examinations and to have his qualifications tested so as to determine whether he was fit for the post or not and that there ought to be no limitations, there ought to be no hindrance in the operation of the principle of equality of opportunity; (ii) that if the principle of equality of opportunity was to be operative there ought to be no reservations of any sort for any class or community all and that all citizens if they qualified should be placed on the same footing of equality as far as public services were concerned; and (iii) that though the principle of equality of opportunity was theoretically good there must at the same time be a provision made for the entry of certain communities which have so far been outside the administration.
The whole tenor of discussion in the Constituent Assembly pointed to making reservation for a minority of the population including Scheduled Castes and Scheduled Tribes which were socially backward.
[465 G H; 466 A B] 4.
In Balaji 's case and in Chitralekha 's case, the Supreme Court exhibited a lot of hesitation in equating the expression 'class ' with 'caste ' for purposes of Article 15(4) and 16(4) of the Constitution.
The juxtaposition of the expression 'backward classes ' and 'Scheduled Castes ' in Article 15 of the Constitution, according to the above two decisions, led to a reasonable inference that expression 'classes ' was not synonymous with 'caste '.
The Court while making these observations did not give adequate importance to the evils of caste system which had led to the backwardness of people belonging to certain castes and the debates that preceded the enactment of Part XVI and Article 15(4) and Article 16(4) of the Constitution.
What was in fact over looked was the history of the Indian social institutions.
The makers of the Indian Constitution very well knew that there were a number of castes the conditions of whose members were almost similar to the conditions of members belonging to the Scheduled Castes and to the Scheduled Tribes and that they also needed to be given adequate protection in order to tide over the difficulties in the way of their progress which were not so much due to poverty but due to their birth in a particular caste.
Part XVI was not enacted for the 371 purpose of alleviating the conditions of poorer classes as such which was taken care of by the provision of Part IV of the Constitution and in particular by Article 46 and by Article 14, Article 15(1) and Article 16(1) of the Constitution which permitted classification of persons on economic grounds for special treatment in order to ensure equality of opportunity to all persons The views expressed by the Supreme Court, however stood modified by the later decisions.
[466 D H; 467 A B] Minor P. Rajendran vs State of Madras & Ors.
[19681 2 SCR 786; State of Andhra Pradesh & Anr.
vs P. Sagar ; Triloki Nath & Anr.
vs State of Jammu & Kashmir & Ors.
[19691 I SCR 103; A. Peeriakaruppan etc.
vs State of Tamil Nadu & Ors.
11971] 2 SCR 430; State of Andhra Pradesh & Ors.
vs U.S.V. Balram etc.
; referred to.
If the view that caste or community is an important relevant factor in determining social and educational backwardnesses for purposes of Articles ]5(4) and 16(4) of the Constitution, is departed from several distortions are likely to follow and may take away from the sole purpose for which these constitutional provisions were enacted.
Several factors such as physical disability, poverty, place of habitation, the fact of belonging to a freedom fighter 's family, the fact of belonging to the family of a member of the armed forces might each become a sole factor for the purpose of Article 15(4) or Article 16(4) which were not at all intended to be resorted to by the State for the purpose of granting relief in such cases.
While relief may be given in such cases under Article 15(1) and Article 16(1) by adopting a rational principle of classification, Article 14, Article 15(4) and Article 16(4) cannot be applied to them.
Article 15(4) and Article 16(4) are intended for the benefit of those who belong to castes/communities which ale 'traditionally disfavoured and which have suffered societal discriminations ' in the past.
The other factors mentioned above were never in the contemplation of the makers of the Constitution while enacting these clauses.
[472 A D] D.N. Chanchala vs State of Mysore & Ors. etc.
[1971] Supp.
SCR 608; State of Kerala vs Kumari T.P. Roshana & Anr. ; ; Kumari M.S. Jayasree & Anr.
vs State of Kerala & Anr.
[1977] 1 SCR ]94; State of Uttar Pradesh vs Pradip Tandon & Ors. ; ; Subhash Chandra vs The State of U.P. & Ors.
AIR 1973 All. 295; Dilip Kumar vs The Government of U.P. & Ors.
AIR 1973 All. 592 referred to.
Article 14 of the Constitution consists of two parts.
It asks the State not to deny to any person equality before law.
It also asks the State not to deny the equal protection of the laws.
Equality before law connotes absence of any discrimination in law.
The concept of equal protection required the State to meet out differential treatment to persons in different situations in order to establish an equilibrium amongst all.
This is the basis of the rule that equals should be treated equally and unequals must be treated unequally if the doctrine of equality which is one of the corner stones of our Constitution is to be duly implemented.
In order to do justice amongst unequals, the State has to resort to compensatory or protective discrimination.
Articles 15(4) and 16(4) of the Constitution were enacted as measures of compensatory or protective 372 discrimination to grant relief to persons belonging to socially oppressed castes and minorities.
Under them, it is possible to provide for reservation of seats in educational institution and of posts in Government services to such persons only.
But if there are persons who do not belong to socially oppressed castes and minorities but who otherwise belong to weaker sections, due to poverty, place of habitation, want of equal opportunity etc.
the question arises whether such reservation can be made in their favour under any other provision of the Constitution such as Article 14, Article 15(1), Article 16(1) or Article 46.
According to Thomas 's case, (a) no reservation of posts can be made in Government services for backward classes including Scheduled Castes and Scheduled Tribes under Article 14 or Article 16 1), and (b) preferential treatment as was done in this case on the basis of classification ordinarily could be given under Article 16(1) to the Scheduled Castes and Scheduled Tribes only.
Other backward classes could not, except in exceptionally rare cases be extended the same benefit and their only hope was Article 16(4) of the Constitution.
[477 A E; 485 G H] 7.
As to the power of the Government to make reservations under Article 15(4) and 16(4) of the Constitution: The determination of the question whether the members belonging to a caste or a group or a community are backward for the purpose of Article 15(4) and Article 16(4) of the Constitution is not open to the Government to call any caste or group or community as backward according to its sweet will and pleasure and extend the benefit that may be granted under those provisions to such caste or group or community.
The exercise of uncontrolled power by the Government in this regard may lead to political favoritism leading to denial of the just requirements of classes which are truly backward.
The power of the Government to classify any caste or group or community as backward has to be exercised in accordance with the guidelines that can be easily gathered from the Constitution.
It is now accepted that the expressions 'socially and educationally backward classes of citizens ' and the Scheduled Castes and the Scheduled Tribes ' in Article 15(4) of the Constitution together are equivalent to `backward classes of citizens ' in Article 16(4).
[486 A D] Further the criterion for determining the backwardness must not be based solely on religion, race, caste, sex or place of birth and the backwardness being social and educational must be similar to the backwardness from which the Scheduled Castes and the Scheduled Tribes suffered.
This view is in conformity with the intention underlying clause 6 of the resolution regarding the aims and objects of the Constitution moved by Jawaharlal Nehru on December 13,1946 which asked the Constitution Assembly to frame a Constitution providing adequate safeguards for minorities, backward and tribal area and depressed and other backward classes and also wish the provisions of Article 338 and Article 340 of the Constitution.
Unless the above restriction is imposed on the Government, it would become possible for the Government to call any caste or group or community which constitutes a powerful political lobby in the State as backward even though in fact it may be an advanced caste or group or community but just below some other forward community.
[486 H; 487 C D] 373 There is another important reason why such advanced castes or groups or communities should not be included in the list of backward classes and that A is that if castes or groups and communities which are fairly well advanced and castes and groups and communities which are really backward being at the rock bottom level are classified together as backward classes, the benefit of reservation would invariably be eaten up by the more advanced sections and the really deserving sections would practically go without any benefit as more number of children of the more advanced castes or group or communities amongst them would have scored higher marks than the children of more backward castes or groups or communities.
In that even the whole object of reservation would become frustrated.
[487 D F] Hence as far as possible while preparing the list of backward classes, the State Government has to bear in mind the above principle as a guiding factor.
The adoption of the above principle will not unduly reduce the number of persons who will be eligible for the benefits under Article 15(4) and Article 16(4) of the Constitution since over the years the level of the Scheduled Castes and Scheduled Tribes is also going up by reason of several remedial measures taken in regard to them by the State and Central Government.
At the same time, it will also release the really backward castes, groups and communities from the strangle hold of many advanced groups which have l ad the advantage of reservation along with the really backward classes for nearly three decades.
It is time that n ore attention is given to those castes, groups and communities who have been at the lowest level suffering from all the disadvantages and disabilities (except perhaps untouchability) to which many of the Scheduled Castes and Scheduled Tribes have been exposed but without the same or similar advantages that flow from being included in the list of the Scheduled Castes and the Scheduled Tribes.
[487 H; 488 A B] Janki Prasad Parimoo & Ors. etc.
vs State of Jammu & Kashmir & Ors. ; referred to.
Since economic condition is also a relevant criterion, it would be appropriate to incorporate a 'means test ' as one of the tests in determining the backwardness as was done by the Kerala Government.
These two tests namely, that the conditions of caste or group or community should be more or less similar to the conditions in which the Scheduled Castes or Scheduled Tribes are situated and that the income of the family to which the candidate belongs does not exceed the specified limit would serve as useful criteria in determining beneficiaries of any reservation to be made under Article 15(4).
For the purpose of Article 16(4) however, it should also be shown that the backward class in question is in the opinion of the Government not adequately represented in the Government services.
[488 C i] 9.
The classification styled as 'special ' group which is based on occupation cum income considerations and which has received the approval in Chitralekha s case; is yet another valid and useful test which can be adopted for the purpose of reservation which can be more legitimately traced to article 14 and not to article 15(4) and article 16(4).
[491 H] 374 10.
From a careful consideration of all the seven opinions in the A Thomas s case it cannot be said that the settled view of the Supreme Court that the reservation under Article 15(4) or Article 16(4) could not be more than 50 per cent has been unsettled by a majority on the Bench which decided this case.
[491 B] 11.
If reservation is made only in favour of those backward castes or clauses which are comparable to the Scheduled Castes and Scheduled Tribes, it may not exceed 50 per cent (including 18 per cent reserved for the Scheduled Castes and Scheduled Tribes and 15 per cent reserved for 'special group ') in view of the total population of such backward classes in the State of Karnataka.
The Havanur Commission has taken the number of students passing at SSLC examination in the year 1972 as the basis for determining the backwardness.
The average passes per thousand of the total population of the State of Karnataka was 1.69 in 1972.
The average in the case of the Scheduled Castes was 0.56 and in the case of Scheduled Tribes was 0.51.
Even if we take all the castes, tribes and communities whose average is below 50 per cent of the State average i.e. below 85 per cent for classifying them as backward, large chunks of population which are now treated as backward would have to go out of the list of backward classes.
Consequently the necessity for reservation which would take the total reservation under Article 15(4) and 1(,(4) beyond 50 per cent of the total number of seats/posts would cease to exist.
The present arrangement has been worked for more than five years already.
It is now necessary to redetermine the question of backwardness of the various castes, tribes and communities for purposes of Article 15(4) and Article 16(4) in the light of the latest figures to be collected on the various relevant factors and to refix the extent of reservation for backward classes.
The reservation of 15% now made under Article 15(4) and Article 16(4) but which may be traced to Articles 14 and 16(1) to 'special group ' based on occupation cum income can in any event be availed of by members of all communities and castes.
[491 C G] 12.
However, it should be made clear that if on a fresh determination some castes or communities have to go out of the list of backward classes prepared for Articles 15(4) and 16(4), the Government may still pursue the policy of amelioration of weaker sections of the population amongst them in accordance with the directive principle contained in Article 46 of the Constitution.
There are in all castes and communities poor people who if they are given adequate opportunity and training may be able to compete success fully with persons belonging to richer classes.
The Government may provide for them liberal grants of scholarships, free studentships, free boarding and lodging facilities, free uniforms, free mid day meals etc.
to make the life of poor students comfortable.
The Government may also provide extra tutorial facilities, stationery and books free of cost and library facilities.
These and other steps should be taken in the lower classes so that by the time a student appears for the qualifying examination he may be able to attain a high degree of proficiency in his studies.
|
Appeal No. 86 of 1959.
Appeal by special leave from the judgment and order dated March 27, 1957, of the Patna High Court in Appeal from Original Decree No. 359 of 1948.
A. V. Viswanatha Sastri and section P. Varma, for the appellant.
882 H. N. Sanyal, Additional Solicitor General of India, R. Ganapathy Iyer and T. M. Sen, for the respondent.
July, 24.
The Judgment of the Court was delivered by SHAH, J.
Bikhraj Jaipuria hereinafter called the appellant is the sole proprietor of a grocery business conducted in the name and style of "Rajaram Vijai Kumar" in the town of Arrah in the State of Bihar.
In the months of July and August, 1943, the, Divisional Superintendent, East Indian Railway under three " 'purchase orders ' agreed to buy and the appellant agreed to sell certain quantities of food grains for the employees of the East Indian Railway.
The 'following table sets out the purchase prices, the commodities, the dates of purchase orders, the quantities and the rates and the method of supply.
Purchase Date of Kinds Quantity Rates.
Order purchase of of No. orders.
commo commo dity.
dities.
(1) (2) (3) (4) (5) 69.
20 7 1943.
Gram 1st 1000 mds. @ Rs. 15/ quality.
per md.
(plus cost of new bags not exceeding Rs. 75/ per 100 bags) F.O.R. any E.I.Rly.
sta tion in Bihar.
:4 7 1943.
Rice 1000 mds.
@ Rs. 22 8 0 Dhenki (plus cost of Medium bags not ex quality.
ceeding Rs.75 883 (1) (2) (3) (4) (5) per cent) per md.
F.O.R. any station on the division.
Wheat 5000 mds.
@ Rs. 20 8 0 white per md.
with as per bags F.O.R. sample.
any station on E.I.R. on the Division.
24 8 1943.
Rice 15000 mds. @ Rs. 24/ medium per md.
with quality.
out bags F.O.R. E.I. Rly.
station in Bihar.
Purchase orders Nos. 69 and 76 were signed by S.C. Ribbins, Personal Assistant to the Division at Superintendent and purchase order No. 106 was signed by the Divisional Superintendent.
Under the purchase orders delivery of grains was to commence within seven days ' of acceptance and was to ' be completed within one month.
The appellant delivered diverse quantities of foodgrains from time to time but was unable fully to perform the contracts within, the period stipulated.
Between July.), 20, 1943 and August of 4, 1943, he supplied 3465 maunds of rice and between September 1, 1943 and September 19, 1943 he supplied 1152 maunds 35 seers of wheat.
In exercise of the powers conferred by cl.(b) of Sub r.
(2) of r.81 of the Defence of India Rules, the Government of Bihar by notification No. 12691 P.C. dated September 16, 1943 directed that commodities named in column I of the schedule shall not, from and including September 20, 1943 and until further notice, be sold at any primary source of supply or by the proprietor, manager or employee of any mill in the Province of Bihar at prices exceeding those 884 specified in the second column of the schedule.
The controlled rat . of rice (medium) was Rs. 18/ per standard maund, of wheat (red) Rs. 17/ , of wheat (white) Rs. 18/ and of gram Rs. 12 8 0.
The Sub Divisional Magistrate, District Arrah issued on September 21, 1943, a price list of controlled articles fixing the same prices as were fixed for wheat, rice and gram by the notification issued by the Government of Bihar.
By cl.
(2) of the notification, a warning was issued that in the event of the dealers selling controlled articles at rates exceeding those fixed or with holding stocks of such articles from sale, "they will be liable to prosecution under r.81 (1) of the Defence of India Rules.
" By a telegraphic communication dated Sep. tember 28, 1943, the Divisional Superintendent informed the appellant that under the purchase orders, foodgrains tendered for delivery will not, unless despatched before October 1, 1943, be accepted, and barring a consignment of 637 maunds 20 seers accepted on October 7, 1943, the Railway Administration declined to accept,delivery of food grains offered to be supplied by the appellant after October 1, 1943.
The appellant served a notice upon the Divisional Superintendent coraplaining of breach of contract and sold between February la and February 23, 1944 the balance of foodgrains under the purchase orders which were lying either at the various railway stations or in his own godowns.
The appellant then called upon the Railway Administration to pay the difference between the price realised by sale and the contract price and failing to obtain satisfaction, commenced an action (Suit No. 359/48A) in the court of the First Additional Subordinate Judge, Patna for a decree for Rs. 2,89,995 15 3 against the Dominion of India.
The appellant claimed Rs. 2,32,665 12 0 being the difference between the contract price and the price realised, Rs.42,709 10 3 as interest and Rs. 14,620 9 0 as freight, wharf.
885 age, cartage, price of packing material, labour charges and costs incurred in holding the sale.
The appellant submitted that under the terms of the purchase orders, supply was to commence within seven days of the date of receipt of the orders and was to be completed within one month, but it was not intended that time should be of the essence of the contract, and in the alternative that the Railway Administration had waived the stipulation as to time in the performance of the contracts and therefore he was entitled, the Railway Administration having committed breach of ,the contracts, to recover as compensation the difference between the contract price and the price for which the grains were sold.
The suit was resisted by the Dominion of India contending inter alia that the appellant had no cause of action for the claim in the suit, that the contracts between the appellant and the Divisional Superintendent Dinapur were not valid and binding upon the Government of India and that the contracts were liable to be avoided by the Government, that time was of the essence of the contracts, that stipulations as to time were not waived, and that no breach of contract was committed by the East Indian Railway Administration and in any event, the appellant had not suffered any loss as a result of such breach.
By the written statement, it wag admitted that the East Indian Railway through the Divisional Superintendent, Dinapur had by three orders set out in the plaint agreed to buy and the appellant had agreed to sell the commodities specified therein, but it was denied that the Divisional Superintendent had been ""given complete authority to enter into contracts for the supply of foodgrains.
" The trial court held that time was not of the essence of the contracts and even if it was, breach of the stipulation in that behalf was waived.
It further_held that the plea that the contracts were void because they were not in accordance with the 886 provisions of section 175 (3) of the Government of India Act, 1935, could not be.permitted to be urged, no such plea having been raised by the written statement.
Holding that the Divisional Superintendent was authorised to enter into the contracts for purchase of foodgrains, and that he had committed breach of contracts the trial Judge awarded to the appellant Rs. 1,29,460 7 0 with interest thereon at the rate of 6% per annum from October 1, 1943, to the date of the institution of the suit and further interest at 6% on judgment.
Against that decree, an appeal was preferred by the Union of India to the High Court of Judicature at Patna and the appellant filed cross objections to the decree appealed from.
The High Court held that time was of the essence of the contracts, but the Railway Administration having a accepted the goods tendered after the expiration of the period prescribed thereby, the stipulation as to time was waived.
The High Court further held that by the notification under r. 81 of the Defence of India Rules, performance of the contracts had not been rendered illegal but the Divisional Superintendent had no authority to enter into contracts to purchase food grains on behalf of the Railway Administration and that in any event, the contracts not having been expressed to be made by the Governor General and not having been executed on behalf of the Governor General by an officer daily appointed in that behalf and in manner prescribed, the contracts were unenforceable.
The High Court also held that the appellant was not entitled to a decree for compensation because he had failed to prove the ruling market rate on the date of breach viz, October 1, 1943.
The High Court also observed that the trial court erred in awarding interest prior to the date of the suit and in so holding, relied upon the judgment of the Privy Council in Bengal Nagpur Railway Co., Ltd. vs Ruttanji Ramji and others (1).
(1) L. R. (1938) 65 J. A. 66. 887 In this appeal by the appellant, two questions fall to be determined, (1) whether relying upon the purchase orders signed by the Divisional Superintendent which were not made and executed in the manner prescribed by s.175 (3) of the, Government of India Act 1935, the appellant could sue the Dominion of India for compensation for breach of contract, and (2) whether the appellant has proved the ruling market rate on October 1, 1943 for the commodities in question.
, The finding that the Railway Administration had waived the stipulation as to the performance of the contracts within the time prescribed though time was under the agreement of the essence, is not challenged before us on behalf of the Union of India.
If the finding as to waiver is correct, manifestly by his telegraphic intimation dated September 28, 1943, that the foodgrains not despatched before October 1, 1943, will not be accepted the Divisional Superintendent committed a breach of the contract.
Section 175 (3) of the Government of India Act as in force at the material time provided : "Subject to the provisions of this Act, with respect to the Federal Railway Authority, all contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor General, or by the Governor of the Province, as the case may be, and all such contracts and all assurances of property made in the exercise of that authority shall be executed on behalf of the Governor General or Governor by such persons and in such manner as he may direct or authorise.
" The Federal Railway Authority had not come.
into being in the year 1943: it was in fact never set up.
The contracts for the supply of foodgrains were undoubtedly_ made in the exercise of executive 888 authority of the Federation.
The contracts had therefore under section 175(3), (a) to be expressed to be made by the Governor General, (b) to be executed on behalf of the Governor General, and (e) to be execrated by officers duly appointed in that behalf and in such manner as the Governor General may direct or authorise.
But no formal contracts were executed for the supply of foodgrains by the appellant : he had merely offered to supply foodgrains by letters addressed to the Divisional Superintendent and that officer had by what are called "purchase orders" accepted those offers.
These purchase orders were not expressed to be made in the name of the Governor General and were not executed on behalf of the Governor General.
The purchase orders were signed by the Divisional Superintendent either in his own hand or in the hand of his Personal Assistant.
In the first instance it has to be considered whether the Divisional Superintendent had authority to contract on behalf of the Railway Administration for buying foodgrains required by the Railway Administration.
By Ex.
M 2 which was in operation at the material time, all instruments relating to purchase or hire, supply and conveyance of materials, stores, machinery, plant, telephone lines and connections, coal etc. could be executed amongst others by the Divisional Superintendent; but contracts relating to purchase of foodgrains are not covered by that authority.
Under item 34 which is the residuary item, all deeds and instruments relating to railway matters other than those specified in items 1 to 33 may be executed by the Secretary of the Railway Board.
It is common ground that there is no other item which specifically authorises the making and execution of contracts relating to purchase of foodgrains; deeds and instruments relating to purchase of food grains therefore fall within item 34.
The Secretary to the Railway Board had not executed these purchase orders : but the trial Court held 889 that the Divisional Superintendent was authorised to enter into contracts with the appellant for the supply of foodgrains.
In so holding, the trial judge relied upon the evidence of Ribbins, Grain Supply Officer and Personal Assistant to the Divisional Superintendent, Dinapur.
The High Court disagreed with that view.
The High Court observed that the authority of the officer acting on behalf of the Governor General "must be deduced from the express words of the Governor General himself expressed by rules framed or by notification issued, under section 175(3).
No notification has been produced in this case showing that the Divisional Superintendent had been authorised by the Governor General to execute such contracts on his behalf, nor has any rule been produced which conferred authority upon the Divisional Superintendent to make such contracts.
" After referring to paragraph 10 of the notification, exhibit M 2 items 1 to 34, the High Court observed: "Therefore this notification rather shows that the Divisional Superintendent had no authority to execute the contracts for the purchase of food grains." In our view, the High Court was in error in holding that the authority under section 175(3) of the Government of India Act, 1935 to execute the contract could only be granted by the Governor General by rules expressly promulgated in that behalf or by formal notifications.
This court has recently held that special authority may validly be given in respect of a particular contract or contracts by the Governor to an officer other than the officer notified under the rules made under section 175(3).
In The State of Bihar vs M/s. Karam Chand Thapar and Brothers Ltd.(,), Venkatarama Aiyar J. speaking for the court observed : (1) ; 890 It was further argued for the appellant that there being a Government notification of a formal character we should not travel outside it and find authority in a person who is not authorised thereunder.
But section 175 (3) does not prescribe any particular mode id which authority must be conferred.
Normally, no doubt, such conferment will be by notification in the Official Gazette, but there is nothing in the section itself to preclude authorisation being conferred ad hoc on any person, and when that is established, the requirements of the section must be held to be satisfied." In that case, an agreement to refer to arbitration on behalf of the Government of Bihar was executed by the Executive Engineer whereas by the notification issued by the Government of Bihar under s.175 (3) all instruments in that behalf had to be executed by the Secretary or the Joint Secretary to the Government.
This Court on a consideration of the correspondence produced in the case agreed with the High Court that the Executive Engineer had been specially authorised by the Governor acting through his Secretary to execute the agreement for reference to arbitration.
Section 175 (3) in terms does not provide that the direction or authority given by the Governor General or the Governor to a person to execute contracts shall be given only by rules or by notifications, and the High Court was in our judgment in error in assuming that such authority can be given only by rules expressly framed or by formal notifications issued in that behalf.
In para 5 of the plaint, the appellant pleaded: " 'That for the purposes and under the authority conferred as noted in the para 3 above in July and August, 1943 the said E. 1.
through its then Divisional Superintendent, Dinapur, by three diverse orders agreed to buy and the plaintiff agreed to sell the following commodities at the rates mentioned against them, 891 By para 3 of the written statement, the Dominion of India accepted the allegations made in para 5 of the plaint.
It is true that by paragraph 1, the authority of the Divisional Superintendent to enter into contract with, trading firms dealing in foodgrains for the supply of foodgrains was denied and it was further denied that the Divisional Superintendent "was invested with complete authority to enter into contracts for the purchase of food supplies and to do all that was necessary in that connection.
" There was some inconsistency between the averments made in paragraphs 1 and 3 of the written statement, but there is no dispute that the purchase orders were issued by the Divisional Superintendent for and on behalf of the East Indian Railway Administration.
Pursuant to these purchase orders, a large quantity of foodgrains was tendered by the appellant: these were accepted by the Railway Administration and, payments were made to the appellant for the grains supplied.
Employees of the Railway Administration wrote letters to the appellant calling upon him to intimate the names of the railway stations where grains will be delivered and about the date when the supply.
will commence.
They fixed programmes for inspection of the goods, kept 'wagons ready for accepting delivery, held meetings on diverse occasions for settling programmes for the supply of grains, rejected grains which were not according to the contract, entered into correspondence with the appellant about the return of empty bags accepted bills and railway receipts and made pay ments, returned certain bills in respect of the grains tendered beyond the period of contract and did diverse other acts in respect of the goods which could only be consistent with the contracts having been made with the authority of the Railway Administration granted to the Divisional Superintendent.
There is also the evidence of Ribbins which clearly supports the vie* that the agreements to purchase foodgrains by the Divisional 892 Superintendent were part of a. scheme devised by the Railway Administration at the time of the, serious famine in 1943 in Bengal.
In cross examination, Ribbins stated: "When the Bengal famine arose in April May 1943, the (necessity for a scheme of) arrangement of supplying foodgrains to E. I. Railway employees arose .
A scheme was drawn up for carrying out this work in writing.
In other words orders were received from Head Office Calcutta about it.
The Deputy General Manager, Grains, Calcutta issued the necessary orders .
The agent or General Manager as he is called appropriated the above functionary.
He must have done so presumably under orders .
The entire scheme did subsequently get the assent of the Railway Board.
From time to time order came with instruction from Head Office.
All such directions should be in the office of D. Supdt., Dinapur.
Some posts had to be created for carrying out this scheme.
Originally one post of Asstt.
Grain Supply Officer was created.
Subsequently, two posts were created one on a senior scale and the other as Asstt.
in Dinapur Dv.
staff had to be appointed to be in charge of the grain shops.
They were exclusively appointed to work the grain shop Organisation.
The Railway made some arrangement in some places for accommodation and additional storage.
Grain shops were located At these places when accommodation was made for additional storage.
" Ribbins was for some time a Grain Supply Officer under the East Indian Railway and he admitted that orders similar.to the purchase orders in question in this litigation were drawn up in cyclostyled forms "as per orders from the Head Office.
" The witness stated that the instructions of the Head Office were "in the office file".
None of these documents were, however, produced or tendered in evidence by the Railway Administration. 893 The evidence on the whole establishes that with a view to effectuate the scheme devised by the Railway Board for distributing foodgrains to their employees at concessional rates, arrangements were made for procuring foodgrains.
This scheme received the approval of the Railway Board and Railway Officers were authorised to purchase, transport and distribute foodgrains.
If, in the implementation of the scheme, the foodgrains were received by the Railway Administration, special wagons were provided and goods were carried to different places and distributed and payments were made for the foodgrains received by the Railway Administration after testing the supplies, the inference is inevitable that the Divisional Superintendent who issued the purchase orders acted with authority specially granted to him.
The evidence of Ribbins supported by abundant docu mentary evidence establishes beyond doubt that the Divisional Superintendent though not expressly authorised by the notification exhibit M 2 to contract for the purchase of foodgrains, was specially authorised to enter into these contracts for the purchase of foodgrains.
The question still remains whether the purchase orders executed by the Divisional Superintendent but which were not expressed to be made by the Governor General and were not executed on behalf of the Governor General, were binding on the Government of India.
Section 175(3) plainly requires that contracts on behalf of the Government of India shall be executed in the form prescribed thereby ; the section however does not set out the consequences of non compliance.
Where a statute requires that a thing shall be done in the prescribed manner or form but does not set out the consequences of non compliance, the question whether the provision was mandatory or directory has to be adjudged in the light of the intention of the legislature as disclosed by the 894 object, put pose and scope of the statute.
If the statute is mandatory, the thing done not in the manner or form prescribed can have no effect or validity : if it is directory, penalty may be incurred for non compliance, but the act or thing done is regarded as good.
As observed in Maxwell on Interpretation of Statutes 10th Edition p. 376 : "It has been said that no, rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequences in its disregard, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope.
and object of the enactment.
It may perhaps be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is, in the main governed by considerations of convenience and justice, and when that result would involve general inconvenience or injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real aim and object of the enactment such an intention is not to be attributed to the legislature.
The whole scope and purpose of the statute under consideration must be regarded.
" Lord Campbell in Liverpool Borough Bank vs Turner(1) observed "No universal rule 'can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience.
It is the duty of Court of justice to try to get at the real intention of the Legislature by carefully attending to the whole scope of the statute to be construed.
" It is clear that the Parliament intended in enacting the provision contained in section 175(3) that (1) ; 895 the State should not be saddled with liability for unauthorised contracts and with that object provided that the contracts must show on their face that they are made on behalf of the State, i. e., by the Head of the State and executed on his behalf and in the manner prescribed by the person authorised.
The provision, it appears, is enacted in the public interest, and invests public servants with authority to bind the State by contractual obligations incurred for the purposes of the State.
It is in the interest of the public that the question whether a binding contract has been made between the State and a private individual should not be left open to dispute and litigation ; and that is why the legislature appears to have made a provision that the contract must be in writing and must on its face show that it is executed for and on behalf of the head of the State and in the manner prescribed.
The whole aim and object of the legislature in conferring powers upon the head of the State would be defeated if in the case of t contract which is in form ambiguous, disputes are permitted to be raised whether the contract was intended to be made for and on behalf of the State or on behalf of the person making the contract.
This consideration by itself would be sufficient to imply a prohibition against a contract being effectively made otherwise than in the manner prescribed.
Itm is true that in some cases, hardship may result to a person not conversant with the law who enters into a contract in a form other than the one prescribed by law.
It also happens that the Government contracts ,ire sometimes made in disregard of the forms prescribed ; but that would not in our judgment be a ground for holding that departure from a provision which is mandatory and at the same time, salutary may be permitted.
There is a large body of judicial opinion in the High Courts in India on the question whether 896 contracts not ill form prescribed by the Constitution Acts are binding upon the State.
The view has been consistently expressed that the provisions, under the successive Constitution Acts relating to the form of contract between the Government and the private individual are mandatory and not merely directory.
In Municipal Corporation of Bombay vs Secretary of State (1), the true effect of section 1 of Si. 22 and 23 Vic.
c. 41 fell to be determined.
The Governor General of India in Council and the Governors in Council and officers for the time being entrusted with the Government were, subject to restrictions prescribed by the Secretary of State in Council, empowered to sell and dispose of real and personal estate vested in Her Majesty and to raise money on such estate and also to enter into contracts within.
the respective limits for the purposes of the Act.
it was provided that the Secretary of State in Council.
may be named as a party to such deed, contract, or instrument and the same must be expressed to be made on behalf of the Secretary of State in Council by or by the order.
of the Governor General in Council or Governor in Council, but may be executed in other respects in like manner as other, instruments executed by or on behalf of him or them respectively in his or their official capacity, and may be enforced by or against the Secretary of State in Council for the time being.
In a suit between the Government of Bombay and the Municipal Corporation of Bombay, the latter claimed that it was entitled to remain in occupation on payment of a nominal rent, of an extensive piece of land because of a resolution passed by the Government of Bombay sanctioning such user.
Jenkins C. J. in delivering the judgement of the Court observed.
"I think that a disposition in 1865 of Crown ' (1) I. L. R. 897 lands by the Governor in Council was dependent for its validity on an adherence to the forms prescribed, and that therefore the Resolution was not a valid disposition of the property for the interest claimed.
" In Kessoram Poddar and Co. vs Secretary of State for India (1), it was held that in order that a contract may be binding on the Secretary of State in Council., it must be made in strict conformity with the provisions laid down in the statute governing the matter and if it is not so made, it is not valid as against him.
The same view was expressed in section C. Mitra and Co. vs Governor General of India in Council (2), Secretary of State vs Yadavgir Dharamgir(3), Secretary.
of State and another vs G. T. Sarin and, Company U. P. Government vs Lala Nanhoo Mal Gupta Devi Prasad Sri Krishna Prasad Ltd. vs Secretary of State (6), and in section K. Sen vs Provincial P. Way D. State of Bihar(7).
But Mr. Viswanatha Sastri on behalf of the appellant contended that this court in Chatturbhuj Vithaldas Jasanth vs Moreshwar Parashram (8) has held that a contract for the supply of goods to the Government which is not in the form prescribed by article 299 (1) of the Constitution which is substantially the same form as section 175 (3) of the Government of India Act, 1935) is not void and unenforceable.
In that case, the election of Chatturbhuj Jasani to the Parliament was challenged on the ground that he had a share or interest in a contract for the supply of goods to the Union Government.
It was found that Jasani was partner of a firm, which had entered into contracts with the Union Government for the supply of goods and these contracts subsisted on November 15, 1951 and (1) I.L.R. I.L.R. , (3) I.L.R. I.L.R. (1930) 11 Lah.375.
(5) A.I.R. (1960) All.
(6) I.L.R. (1941) All. 741 (7) (7) A.I.R. (1960) Pat.
(8) ; 898 February 14, 1952 respectively the last date for filing nominations and the date of declaration of the results of the election.
This court held that Jasani was disqualified from being elected by virtue of the disqualification set out in section 7 (b) of the Representation of the People Act 43 of 1951.
The contracts in that case were admittedly not in the form Prescribed by article 299 (1) of the Constitution, and relying upon that circumstance, it was urged that the contracts were void and had in law no existence.
In dealing with this plea, Bose J. speaking for the court observed : "We feel that some reasonable meaning must be attached to article 299(1).
We do not think the provisions were inserted for the sake of mere form.
We feel they are there to safeguard Government against unauthorised contracts.
If in fact a contract is unauthorised or in excess of authority it is right that Government should be safeguarded.
On the other hand, an officer entering into a contract on behalf of the Government can always safeguard himself by having recourse to the proper form.
In between is a large class of contracts, probably by far the greatest in numbers, which though authorised, are for one reason or other not in proper form.
It is only right that an innocent contracting party should not suffer because of this and if there is no other defect or objection we have no doubt Government will always accept the responsibility.
If not, its interests are safeguarded as we think the Constitution intended that they should be.
" The learned Judge also observed: "It would, in our opinion, be disastrous to hold that the hundreds of Government officers who have daily to enter into a variety of contracts, often of a petty nature, and sometimes in an emergency, cannot contract orally or through correspondence and that every petty contract must be effect ed by a ponderous legal document couched in a particular form." 899 The rationale of the case in our judgment does not support the contention that a contract on behalf of a State not in the form prescribed is enforceable against 'the State.
Bose J. expressly stated that the "Government may not be bound by the contract, but that is a very different thing from saying that the contract ",as void and of no effect, and that it only meant the principal (Government) could not be sued; but there will be nothing to prevent ratification if it was for the benefit of the Government.
" The facts proved in that case clearly establish that even though the contract was not in the form prescribed, the Government had accepted performance of the contract by the firm of which Jasani was a partner, and that in fact there subsisted a relation between the Government and the firm under which the goods were being supplied and accepted by the Government.
The agreement between the parties could not in the case of dispute have been.enforced at law, but it was still being carried out according to its terms : and the Court held that for the purpose of the Representation of the People Act, the existence of such an agreement which was being carried out in which Jasani was interested disqualified him.
It was clearly so stated when Bose J. observed: "Now section 7 (d) of the Representation of the People Act does not require that the contracts at 'which it strikes should be enforceable against the Government ; all it requires is that the contracts should be for the supply of goods to the Government.
The contracts in question are just that and so are hit by the section".
Reliance was also placed by counsel for the appellant upon cases decided under s.40 of the Government of India Act, 1915, which was continued in operation.
even after the repeal of the Act, 1915, by the 9th schedule to the Government of India Section 40 prescribed the manner in which the business of the Governor General in Council was to be conducted.
It provided that all orders and other proceedings of the Governor General in Council shall be expressed to be made by the Governor General in Council and shall be signed by a Secretary to the Government of India or otherwise as the Governor General in Council may direct and shall not be called in question in any legal proceeding on the ground that they were not duly made by the Governor General in Council.
In J.K. Gas Plant Manufacturing Co., (Rampur) Ltd., vs King Emperor (1), certain persons were accused of offences committed by them in contravention of cls.
(5) and (8) of the Iron and Steel (Control of Distribution) Order, 1941, which order was not expressed to be made by the Governor General in Council as required by section 40(1) of the 9th schedule to the Constitution Act.
The Federal Court held that the scope and purpose of the Act did not demand a construction giving a mandatory rather than a directory effect to the words in section 40: for, in the first instance, the provision that all orders of the Governor General in Council shall be expressed to be made by the Governor General in Council did not define how orders were to be made but only how they are to be expressed; it implied that the process of making an order preceded and was something different from the expression of it.
Secondly, it was observed, the provision, was not confined to orders only and included proceedings and in the case of proceedings, it was still clearly a method of recording proceedings which had already taken place in the manner prescribed rather than any form in which the proceedings, must take place if they are valid.
Thirdly, it was observed, that the provision relating to the signature by a Secretary to the Government of India or other person indicated that it was a provision as (1) 901 to the manner in which a previously made order should be embodied in publishable form, and it indicated that if the previous directions as to the expression of the order and proceedings and as to the signature were complied with, the order and proceedings shall not be called in question in a court of law on one ground only.
The rule contained in section 40 (1) was in the view of the court one of evidence which dispensed with proof of the authority granted by the GovernorGeneral in respect of orders or proceedings which complied with the requirements prescribed : the making of the order or the proceedings was independent of the form of the order or proceedings expressing it.
But it cannot be s aid that the making of the contract is independent of the form in which it is executed.
The document evidencing the contract is the sole repository of its terms and it is by the execution of the contract that the liability ex contracti of either party arises.
The principle of J. K. Gas Plant Manufacturing Co. 's case has therefore no application in the interpretation of section 175 (3) of the Government of India Act, 1935.
Reliance was also placed upon Dattatreya Moreshwar Pangarkar vs The State of Bombay (1) and The State of Bombay vs Purshottam Jog Naik(2).
In both these cases, orders made by the Government of Bombay under the Preventive Detention Act were challenged on the ground that the orders did not comply with the requirements of article 166 of the Constitution.
Article.
166 substantially prescribes the same rules for authentication of the orders of the Governor of a State as section 40 to the 9th schedule of the Government of India Act, 1935 prescribed for the authentication of the orders of the Governor General and the Governors.
In the former case, this court observed that (1) ; (2) ; 902 the Preventive Detention Act contemplates and requires the taking of an executive decision for confirming a detention order under section 11 (1) and omission to make and authenticate that decision in the form set out in article 166 will not make the decision itself illegal,for the provisions in that arti cle are merely directory and not mandatory.
In the latter case, an order which purported to have been made in the name of the Government of Bombay instead of the Governor of Bombay as required by article 166 was not regarded as defective and it was observed that in any event, it was open to the State Government to prove that such an order was validly made.
The court in those cases therefore held that the provisions of article 166 are directory and not mandatory.
, These cases proceed on substantially the same grounds on which the decision in J. k. Gas Plant and Manufacturing Co. 's case , proceeded, and have no bearing on the interpretation of section 175 (3) of the Government of India Act, 1935.
Reliance was also placed upon the State of U.P. vs Manbodhan Lal Srivastava(1) in which case this court held that the provisions of article 320 el.
(3) (e) of the Constitution relating to the consultation with the Public Service Commission before discharging at public servant are merely directory.
The fact that certain other provisions in the Constitution are regarded as merely directory and not mandatory, is no ground for holding that the provisions relating to the form of contracts are not mandatory.
It maybe said that the view that the provisions in the Constitution relating to the form of contracts on behalf of the Government are mandatory may involve hardship to the unwary.
But a person who seeks to contract with the Government must be deemed to be fully aware of (1) ; 903 statutory requirements as to the form in which the contract is to be made.
In any event, inadvertence of an officer of the State executing A contract in manner violative of the express statutory provision, the other contracting party acquiescing in such violation out of ignorance or negligence will not justify the court in not giving effect to the intention of the legislature, the provision having been made in the interest of the public.
It must therefore be held that as the contract was not in the form required by the Government of India Act, 1935, it could not be enforced at the instance of the appellant and therefore the Dominion of India could not be sued by the appellant for compensation for breach of contracts.
We are also of the view that the High Court was right in holding that the appellant failed to prove that he was entitled to compensation assuming that there was a valid and enforceable contract.
The appellant claimed that he was entitled to the difference between the contract price and the price realised by sale of the foodgrains offered after October 1,1943 but not accepted by the Railway Administration.
The High Court rightly pointed out that the appellant was, if at all, entitled only to compensation for loss suffered by him by reason of the wrongful breach of contract committed by the State, such compensation being the difference between the contract price and the ruling market rate on October 1,1943, and that the appellant had failed to lead evidence about the ruling market rate on October 1,1943.
The trial judge held that the "control price list xxx was reliable for ascertaining the measure of damages in the case".
This document was a notification relating to the controlled rates in operation in the district of Arrah, by which the sale of foodgrains at prices exceeding the rates prescribed was made an offence.
The appellant had obviously the option of delivering foodgrains at an railway station F. O. R. in the Province of 904 Bihar, and there is no evidence on the record whether orders similar to exhibit
M 2 were issued by the authorities in other districts of the Bihar State.
But if the grains were supplied in the district of Arrah, the appellant could evidently not seek to recover price for the goods supplied and accepted on and after October 1, 1943, at rates exceeding those fixed by the notification; for, by the issue of the control orders, on the contracts must be deemed to be superimposed the condition that foodgrains shall be sold only at rates specified therein.
If the grains were to be supplied outside the district of Arrah, the case of the appellant suffers from complete lack of evidence as to the ruling rates of the foodgrains in dispute on October 1, 1943.
The High Court was therefore right in declining to award damages.
On the view taken by us, this appeal must stand dismissed with costs.
Appeal dismissed.
| On a complaint by one L, the Magistrate convicted the two appellants of an offence under section 380 of the Indian Penal Code for having removed a printing press alleged to have belonged to L to whom it was sold in 1955 by one R once a declared keeper of the said press under section 4 of the Press Act, 1867.
The defence was that the Press originally belonged to one G.
In 1947 transferred it to N by exhibit D 2 wherein R joined formally, as declaration of keeper stood in his name.
N sold the Press to the second appellant and another, but R 's name continued as a printer and keeper of the press In 1956 the second appellant leased out the press to the first appellant.
According to the appellants, the second appellant was the owner in law and fact of the press and the first appellant was the lessee and had removed the press in the bonafide exercise of his right as lessee.
The case of the prosecution hinged upon the evidence of R and that of the appellants rested upon the proof of the signature of R on exhibit D 2 which R denied.
The handwriting expert stated categorically that exhibit D 2 bore the signature of R. The Judge of the High Court who heard the appeal against the acquittal order, passed by the Additional District and Sessions Judge, said nothing about exhibit D 2 and considered the declaration of R under section Of the Press Act which continued unchanged, as sufficient to prove an offence of theft.
According to him, the removal of the Press amounted to theft even though the appellants removed it under a bonafide claim of right.
^ Held, that where a bonafide claim of right exists, it can be a Good defence to a prosecution for theft.
An act does not amount to theft, unless there be not only no legal right but no appearance or colour of a legal right.
For the purpose of criminal law on the present case the evidence prima facia pointed to a transfer of the press by R and to N.
The evidence prima facie also established that the appellants had taken possession of the press under a 9 bonafide claim of right and there was some doubt about the right of R to transfer the press to L and further the defence that the appellants took possession of the press under bonafide claim of right was a good defence entitling them to an acquittal.
|
minal Appeal No. 155 of 1961.
Appeal by, special leave from the judgment and order date April 10, 1961 of the Kerala High Court in Criminal Appeal No. 143 of 1960.
B. R. L. Iyengar and T. section Venkataraman, for the appellant.
V. Narayana Menon and Sardar Bahadur, for.
the respondent.
December 5.
The judgment of the Court was delivered by SUBBA RAO J.
This appeal by special leave is preferred against the Judgment of the High Court of Kerala, confirming that of the Special judge, ,Trivandrum, convicting the accused under section 5(2), read with section 5(1)(d) of the Prevention of Corruption Act, 1947,(2 of 1947), hereafter called the Act, and sentencing; him; to pay a fine of Rs. 1,0001 , or in default to undergo simple imprisonment for four months.
The appellant was, a Special Revenue Inspector for land assignment at Manantoddy in Wynad Taluk in the old Malabar district.
726 The case of the prosecution was that he, by abusing his position as a public servant,, got 4 acres and 80 cents of Government land in R section No 376/2 of Tavinhal village assigned in the name of his brother in law P. V. Gopinathan Nambiar without revealing the fact that he was his brother in law and by making false entries in the relevant records showing that the said land contained only 97 trees valued at Rs. 165/ , whereas the land had actually 150 trees worth Rs. 1450/ .
The suppression of the fact that the assignee was his brother in law and the underestimate of the value of the land were dishonestly made to circumvent the rules governing the assignment of lands to landless poor.
The Special judge and on appeal the High Court held that the appellant dishonestly underestimated the extent and the value of the trees in the said land with a view to help his brother in law and thereby committed an offence under section 5(2), read with section 1(4) of the Act.
Hence the appeal.
Learned counsel for the appellant raised before us 2 points : (1) Section 5(1)(a) of the Act does not apply to a case of wrongful loss caused to Government by a public servant who by deceit induced it to part with its property : (2) The High Court acted erroneously in relying upon a report dated April 5, 1961, made by the district Forest Officer, Kozhikode, filed by the public prosecutor after the appeal was reserved for judgment without giving an opportunity to the appellant to file objections thereto or contesting the correctness of the valuation given therein.
As the first contention turns upon, the provisions of section 5(1), it will be convenient to read the same, 5.
(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty (a) if he habitually accepts or obtains or 727 agrees to accepts to obtain from any person for himself if or for any other person, gratification (other than legal remuneration) as a motive or reward such as is mentioned in section 161 of the, Indian Penal Code, or (b) if he habitually accepts or obtains or ' agrees to accept or attempts to obtain for himself or for any other person, any valuable thing without consideration or for a consideration which he knows to be inadequate, from any person whom he knows to have been or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted.
by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or From any ' person whom he knows to be interested in or related to the person so concerned, of (c) if he dishonestly or fraudulently mis appropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or (d) if he, by, corrupt or illegal means or by otherwise abusing his position as public servant obtains for himself or for any other person any Valuable thing or pecuniary advan tage.
We are concerned in this case with 5(1)(d) of the act Under that" clause it a public servant by corrupt or illegal means or by otherwise abusing his position as public servant obtains for, himself or for any other person valuable thing, or pecuniary advantage, he will be guilty of Criminal misconduct, punishable under section 5(2) of the Act with imprisonment for a term which shall not be less than one year and which may extend to 7 years, and shall also be liable to fine.
728 The learned counsel contends that clause (d) being a penal provision, shall be strictly construed and that if so construed, it would only take in cases of direct benefit obtained by a public servant for himself or for any other person from a third party in the manner described therein and does not cover a case of a wrongful loss caused to the Government by abuse of his power.
This conclusion, the argument proceeds, flows from three circumstances.
(1) The benefit obtained in clause (b) must be similar to that provided for in clauses (a) & (b) 14 e., benefit obtained from a third party; (2) The case of wrongful loss to the Government is provided by clause (c) and any other loss which does not fall within that clause is outside the scope of the section; (3) Though the word "obtains ' has a wide meaning in the setting in which it appears in clause (d) but in view of the fact that the same word used in a limited sense in is used in a limited sense in clauses (a) & (b), it should be given a limited meaning, namely, "gets a benefit from a third party".
It takes colour from the same word used in clauses (a) & (b).
He finally contends that the construction he is seeking to put forward for our acceptance fits in the general scope and scheme of the Act and that the Legislature intended to leave the losses caused to the Government by the deception caused by its public servant to be dealt with in accordance with the provisions of the Indian Penal Code or other appropriate laws.
At the outset we may say that the argument is rather subtle but on a deeper scrutiny of the provisions and the clear phraseology used therein, we find that the contention is not sound.
Before we construe the, relevant provisions of the section in the light of the criticism levelled by the learned counsel, it will be useful and convenient to know briefly the scope and the object of the Act.
The long title of the Act reads: 729 'An Act for the more effective prevention of bribery and corruption '.
The preamble indicates that the Act was passed as it was expedient to make more effective provision for the prevention of bribery and corruption.
The long title as well as the preamble indicate that the Act was passed to put down the said social evil i. e. bribery and corruption by public servant.
Bribery is a form of corruption.
The fact that in addition to the word "bribery" the word " 'corruption" is used shows that the legislation was intended to combat also other evils in addition to bribery.
The existing law i.e. Penal Code was found insufficient to eradicate or even to control the growing evil of bribery and corruption corroding the public service of our country.
The provisions broadly include the existing offences under sections 161 & 165 of the Indian Penal Code committed by public servants and enact a new rule of presumptive evidence against the accused.
The Act also creates a new offence of criminal misconduct by public servants though to some extent it overlaps on the pre existing offences and enacts a rebuttable presumption contrary to the well known principles of Criminal Jurisprudence.
It also aims to protect honest public servants from harassment by prescribing that the investigation against them could be made only by police officials of particular status and by making the sanction of the Government or other appropriate officer a precondition for their prosecution.
As it is a socially useful measure conceived in public interest, it should be liberally construed so as to bring about the desired object.
i.e. to prevent corruption among public servants and to prevent harassment of the honest among them.
A decision of the judicial Committee in Dyke vs Elliot, (1) cited by the learned counsel as an aid for construction neatly states the principle and therefore may be extracted : Lord justice James speaking (1) (1872) L. R. ,191.
730 for the Board observes at P. 191 "No doubt all penal Statutes are to be construed strictly, that is to say, the Court must see that the thing charged as an offence is within the plain meaning of the words used, and must not strain the words on any notion that there has been a slip, that there has been a casus omissus, that the thing is so clearly within, the mischief, that it must have been intended to be included and would have been included if thought of.
On the other hand, the person charged has a right to say that the thing charged, although within the Words, is not within the spirit of the enactment.
But where the thing is brought within the words and within the spirit, there a penal.
enactment to be construed, like any other instrument, according to the fair common sense meaning of the language used, and the Court is not to find or make any doubt or ambiguity in the language of a penal statute, where such doubt or ambiguity would clearly not be found or made in the same language in any other instrument.
" In our view this passage, if we may say so, restates the rule of construction of a penal provision from A correct perspective.
As we will presently show the case of the appellant on the facts found clearly falls not only within the words of clause (d) but also within 'its spirit.
Indeed if his argument be accepted not only we will be doing violence to the language but also to the spirit of the enactment.
First taking the phraseology used inthe clause, the case of a public servantcausing wrongful loss; to the Government be benefiting a thirdparty squarely falls within it.
Let us look at the clause "by otherwise abusing the position of a public servant ', for the argument mainly turns upon the said clause.
The phraseology is very comprehensive.
It covers acts done " 'otherwise" than by corrupt or illegal means by an officer 731 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 1.
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 innocuous acts will not be covered by the said clause.
The juxtaposition of the word or otherwise ' with the words "corrupt or illegal means" and the dishonesty implicit 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; nor can the word 'obtains ' be sought in aid to limit the express words of the section. 'Obtain ' means acquire or get.
If a corrupt officer by the said means obtains a valuable thing or a pecuniary advantage, he can certainly be said to obtain the said thing or a pecuniary advantage; but it is said that in clauses () & (c) the same word is used and in the context of those clauses it can only mean getting from a third party other than the Government and therefore the game meaning must be given to the said word in clause (d).
"Obtains ' in clause 732 (a) & (b) in the context of those provisions may mean taking a bribe from a third party, but there is no reason why the same meaning shall be given to that word used in a different context when that word is comprehensive enough to fit in the scheme of that provision.
Nor can we agree that as dishonest misappropriation has been (c), the other cases of wrongful loss caused Government by the deceit practiced by a public officer should fall outside the section.
There is no reason why when a comprehensive statute was passed to prevent corruption, this particular category of corruption should have been excluded therefrom because the consequences of such acts are equally harmful to the public as acts of bribery.
On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself, or for any other person, by abusing his position as a public servant falls within the mischief of the said clause.
Coming to the spirit of the provision, there cannot be two views.
As we have expressed earlier, the object of the Act was to make more effective provision for the prevention of bribery and corruption.
Bribery means the conferring of benefit by one upon another, in cash or in kind, to procure an illegal or dishonest action in favour of the giver.
Corruption includes bribery but has a wider connotation.
It may take in the use of all kind of corrupt practices.
The Act.
was brought in to purify public administration.
When the Legislature used comprehensive terminology in section 5(1)(d) to achieve the said purpose, it would be appropriate not to limit the content by construction when particularly the sipirit of the statute is in accord With the words used therein, Two decisions of this court cited at the Bar indicate that a wide construction was placed by this Court ' on the provisions of section 5(1)(d) of the Act.
733 In Ram Krishan vs The State of Delhi, (1) the appellants were prosecuted for offering bribe to a Railway Officer for hushing up the case against them.
In that context, section 5 (1)(d) was construed by this court.
At p. 188 Chandrasekhara Ayyar, J., speaking for the court made the following observation: "Apart from 'corrupt and illegal means ', we have also the words 'or by otherwise abusing his position as a public servant.
If a man obtains a pecuniary advantage by the abuse of his position, he will be guilty under sub clause (d).
Sections 161, 162 & 163 refer to a motive or a reward for doing or forbearing to do something, showing favour or disfavour to any person, or for inducing such conduct by the exercise of personal influence.
It is not necessary for an offence under clause (d) to prove all this.
It is enough if by abusing his position as a public servant a man obtains for himself any pecuniary advantage, entirely irrespective of motive or reward for showing favour or disfavour." This Court again in Dhaneshwar Narain Saxena vs The Delhi Administration.
(2) pointed the wide net cast by this provision in order to put down corruption.
There the appellant was an Upper Division Clerk in the office of the Chief Commissioner of Delhi.
He knew one Ram Nara who was a fireman serving in Delhi FireBrigade, The latter sought the assistance of the aappellant who had nothing to do with the issuing of licences of fire arms which was done by the 'Office of the Deputy Commissioner, Delhi.
The appellant took a bribe in order to get the licence for him.
It was argued that as it was not the duty of the appellant to issue licences or do something in connection therewith, he, did not commit any offence within the meaning of section 5 (1)(d) of the Act.
This (1) ; (2) ; 734 Court rejected his contention.
Sinha, C.J., speaking for the Court observed at p. 198: "The legislature advisedly widened the scope of the crime by giving a who, holding public office and taking advantage of their position obtain any valuable thing or pecuniary advantage.
" The observations made by this Court in the above two cases though made in a different context show the comprehensive nature of the said provision.
We therefore hold that the accused in order to assign the land to his brother in law underestimated the value of the said land to conform with the rules and thereby abused his position as a public servant and obtained for him a valuable thing or a pecuniary advantage within the meaning of the said clause and therefore is guilty of an offence under sub.
section
(2) thereof.
It is next contended that the said finding was vitiated by the fact that the High Court in arriving at the finding relied upon a valuation list prepared by the District Forest Officer and filed into court without giving an opportunity to the appellant to canvass its correctness '.
The admitted facts relevant to the argument may be stated.
The arguments in the appeal were concluded on March 22, 1961.
On April 6, 1961, the Public Prosecutor filed a Valuation list purporting to have been made by the District Forest Officer, Kozhikode.
No notice of this list was given to the appellant and therefore he did not file any objections.
On April 10, 1961, the High Court delivered the judgment basing its finding on the said Valuation list and rejecting the appeal.
Before the Special Leave was granted by this court, a report was called for from the High Court with regard to the said facts.
The report sent by the Registrar is as follows : "The learned Counsel for the appellant contended before the High Court that the 735 method of calculation adopted by P.W. 15 in assessing the value of the timber was not correct and that the following method should have been adopted viz., in the case of timber trees to calculate the value of each tree at the rate given in the Madras Forest Manual for that particular species, and for fuel trees, to calculate the value at the official rate for cart load fixed by the Government. ' Thereupon the Court directed in open court that a statement showing the value of the timber calculated by the above method may be submitted by either of the parties.
No statement was filled by the appellant 's ounsel and on 6 4 1961 the State filed a statement.
Since the statement was meant only to assist the Court in calculating the correct value of the timber along the lines suggested by the appellant 's counsel the matter was not posted for further argument.
" The appellant denied in his affidavit filed before us that any direction was given by the court before the judgment was reserved but the Public Prosecutor filed an affidavit to the effect that such a statement was made in the open court.
We have no reason to reject the report of the Registrar and the affidavit filed by the Public Prosecutor.
Even so, the fact remains that the learned judge acted upon a document filed by the respondent without given an opportunity to the appellant to file objections or to contest its reliability.
We think the principles of natural justice require that no court shall give a finding whether on fact or law and particularly on facts without giving an opportunity to all the con;testing parties.
As that principle has been violated in this case, we have no option but to set aside the finding of the learned judge on the question of the valuation of the trees on the plot assigned to the appellant 's brother in law.
We therefore set aside 736 this finding and request the High Court to submit a revised finding on the said question within two months from the receipt of the record.
The respondent may file a further statement if I e so chooses to explain or even to correct the valuation list already filed by it.
Thereafter an opportunity will be given to the appellant to file his objections.
The objections filed by the appellant in this Court may be also considered by the High Court.
The High Court will submit the finding on the evidence already on record including the said objections and statements.
The parties may file objections to the finding within two weeks from the date the said And is received.
The appeal will be posted as early as possible after objections are filed or after the expiry of the time given for filing the objections.
Case remitted for submission of fresh finding.
| The respondent, A Central Government servant, who was the Secretary of the Civil Accounts Association of non Gazetted Staff, was departmentally proceeded against under rr.
4(A) and 4(B) of the Central Civil Services (Conduct) Rules, 1955, for participating in demonstrations in preparation of a general strike of Central Government employees and for refusing to dissociate from the Association after the Government had withdrawn its recognition of it.
He impugned, the validity of the said rules on the ground that they infringed his fundamental rights under article 19 of the Constitution.
The High Court held that r. 4(A) was wholly valid but quashed the proceeding under r. 4(B) which it held to be invalid.
Rule 4(A) provided that no Government servant shall participate in any demonstration or resort to any form of strike in connection with any matter pertaining to his conditions of service and r. 4(B) provided that no Government servant shall join or continue to be a member of any services Association which the 790 Government did not recognise or in respect of which recognition had been refused or withdrawn by it.
Held, that in view of the decision of this Court that r. 4(A) of the Central Civil Services (Conduct) Rules, 1955, in so far as it prohibited any form of demonstration was violative of the Government servants ' fundamental rights under article 19(1) (a) and (b), the High Court was in error in holding that the rule was wholly valid.
Kameshwar Parsad vs The State of Bihar, [1962] supp.
3 S.C.R. 369, referred to.
Participation in demonstration organised for a strike and taking active part in preparation for it cannot, either in law or fact, mean participation in the strike.
The respondent could not, therefore, be said to have taken part in a strike as such and the proceeding against him under section 4(A) being based on that part of it which was invalid must also be invalid.
It was clear that r. 4(B) of the said Rules imposed res triction on the undoubted ' right of the Government Servants under article 19 which were neither reasonable nor in the interest of public order tinder article 19(4).
The rules clearly showed that in the granting or withdrawing, of recognition, the Government right be actuated by considerations other than those of efficiency or discipline amongst the services or public order.
The restriction imposed by r.4 (B), therefore, infringed article 19(1) (c) and must be held to be invalid.
The Super tenant, Central Prison, Fatehgarh vs Dr. Ram Manohar Lohia, ; and Rex vs Basudev, , referred to.
|
Appeal No. 22 of 1960.
Appeal by special leave from the judgment and order dated March 19, 1958, of the Allahabad High Court in F. A. No. 62 of 1954.
section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
G. section Pathak, section K. Kapur, B. N. Kirpal and Ganpat Rai, for the respondent.
April 27.
The Judgment of the Court was delivered by section K. DAs, J.
This is an appeal by special leave granted by this Court on December 8, 1958.
On July 19, 1950, Satya Deo Gupta, respondent before us, made an application under a. 14 of the (Act V of 1940) (hereinafter referred to as the Act) for registration of the trade name of a biochemical medicinal preparation, commonly known as 'Laksbmandhara ', in Class 5 of the Fourth Schedule to the Trade 486 Marks Rules, 1942.
The application was made by the respondent as the sole proprietor of Rup Bilas Company situate, at Dhankutti in Kanpur.
The averments made in the application were that the said medicinal preparation had been in use by the name of "Lakshmandhara ' since 1923 and was sold throughout the length and breadth of India as also in some foreign markets; the mark or name 'Lakshmandhara ' was said to be distinctive to the article, and it was stated that the approximate annual turnover was Rs. 40,000/ .
Notice of the application was given by the Registrar of Trade Marks, Bombay, and the Amrit dhara Pharmacy, a limited liability company and appellant before us, filed an application in opposition.
In this application the appellant stated that the word 'Amritdhara ' was already registered as a trade name for the medicinal preparation of the appellant, and that medicinal preparation was introduced in the market so far back as in the year 1901; on account of its great popularity many people advertised similar medicines with slight variations of name to pass off their goods as 'Amritdhara '.
It was averred that the composite word Lakahmandhara ' was used to denote the same medicine as Amrit, dhara '; and the single word dhara , it was stated, was first used in conjunction with 'Amritdhara ' to denote the medicine of the appellant and the medicine 'Lakahmandhara ' being of the same nature and to quality could be easily passed off as 'Amritdhara ' to the ultimate purchaser.
The appellant contended that as 'Amritdhara ' was already registered and 'Lakshmandhara ' being a similar name was likely to receive the public, registration should be refused.
On behalf of the respondent a counter affidavit was made in which it was stated that "Amritdhara ' and Lakshinandhara ' were two distinctly different names and no one could pass off one for the other.
487 It was further stated that during the long period of introduction and sale of Lakshmandhara ' since 1923, no objection was ever raised from any quarter, from the appellant or anybody else, to the use of the name 'Lakshmandhara '.
It was denied by the respondent that the composite word 'Lakshmandhara ' was likely to deceive the public or could by any stretch of imagination be taken or mistaken for 'Amritdhara '.
The respondent further alleged that the single word 'dhara ' had no particular significance in relation to the medicine, nor did that word mean or convey any special or exclusive meaning or effect in relation to the medicine.
It was also stated that apart from the difference in name, the phial, label and packing of 'Lakshmandhara ' had exclusive designs of their own and were not likely to be confused with 'any other medicine of similar nature, least of all with 'Amritdhara ' whose packing was distinctly different in colour, design and layout.
The Registrar of Trade Marks dealt with the application and the opposition thereto by his order dated September 10, 1953.
It appears that apart from the affidavits filed, no other evidence was led on behalf of either party; but certified copies of certain decisions in earlier cases (to which the respondent was not, however, a party) given in favour of the appellant in support of its claim of infringement of its registered trade mark 'Amritdhara ' were filed.
A list of such cases has been printed as annexure 'A '.
These cases showed that a number of medicines with the word 'Amrit ' or 'dhara ' as part of their names had been introduced in the market since 1947; and the appellant 'successfully took action against them for infringement of its trade mark.
Even in the Trade Marks Registry the appellant successfully opposed the introduction of names which contained the word 'dhara ' as part of the,trade name.
A question has 488 been raised before us whether the Registrar of Trade Marks was justified in taking into consideration the decisions in those cases.
To that question we shall advert later.
The Registrar found that in 1901 Pandit Thakur Datta Sharma commenced to do business at Lahore in a particular ayurvedic medicine which was meant for alleviation for of headaches, diarrohea, constipation and other complaints.
This medicine was first sold under the mark 'Amrit Ki Dhara ', but in 1903 the name was changed to "Amritdhara ', Pandit Thakur Datta Sharma formed a limited liability company in 1942 and the name 'Amritdhara ' became a well known popular name for the medicine.
The sale of the medicine went up to about Re. 4 lacs a year.
The business was done in Lahore but when partition came in 1947, the appellant established its business in Dehradun.
The Registrar expressed the view that if the matter had rested on section 8 and section 10(1) of the Act, he world have no hesitation in allowing the opposition and dismissing the application.
This could only mean that the Registrar was of the view that the name 'Lakshmandhara ' so nearly resembled the trade mark 'Amritdhara ' that it was likely to deceive the public or cause confusion to the trade.
We are saying this because the High Court through that the Registrar did not express his own opinion whether the name 'Lakshmandhara ' was likely to cause deception to the public or confusion to the ' trade.
The respondent, however, relied also on two other circumstances, viz. (a) honest concurrent user of the name 'Lakshmandhara ' since 1923, and (b) acquiescence on the part of the appellant in the user of the name Lakshmandhara '.
The respondent contended that these two circumstances brought the case With in the meaning of special circumstances ' in A. 10(2) of the Act, which permitted the registration by more than one Proprietor of trade marks which are identical or 489 nearly resemble each other, subject to such condition and limitations, if any, as the Registrar might think fit to impose.
On the point of honest concurrent user the Registrar found in favour of the appellant.
As to acquiescence he, however, found in favour of the respondent and expressed his finding in these words.
"In the case before me it is not disputed that the applicant commenced his user in a small way in 1923 and it may even be said that up to about 1942 the applicant 's user was insignificant.
In paragraph 12 of the appli cant 's affidavit dated the 30th March, 1953 he has given details of advertisements in directories, pamphlets, newspapers etc.
in which both the applicant 's and the opponents ' marks were advertised.
The facts given in the affidavit go to show that from 1938 right up to the date of the applications by the applicant he has been advertising through mediums which were common to both the applicant and the opponents.
Here we have a case in which Pandit Thakur Datta Sharma states that he had no notice of the applicant 's mark.
He has, however, admitted that he had about 12 persons in his factory which constituted the clerical staff and amongst them were persons who were in charge of advertising the opponents mark.
It seems to me that the opponents and their agents were well aware of the advertisements by the applicant and did not raise any protest till the applicant 's mark was advertised in the Trade Mark Journal.
In other words the opponents stood by and, allowed the applicant to develop his business and, as I have shown, from small beginning he began to sell these medicines to the extent of about Rs. 43,000/ in 1949.
In my opinion, this is 490 acquiescence which would come under, the phrase 'or other special circumstances ' in section 10(2) of the and, that appears to me to be fatal to the case of the opponents.
" Before the Registrar it was admitted on behalf of the respondent that his goods were sold mainly in, Uttar Pradesh and there were, at the most, only sporadic sales in other States.
Taking that circumstance into consideration the Registrar passed an order allowing registration of 'Lakshmandhara ' for sale in the State of Uttar Pradesh only.
From the decision of the Registrar two appeals were referred to the High Court of Judicature at Allahabad under section 76 of the Act: one appeal Was referred by the respondent and ' the other by the appellant.
The respondent complained of the registration being limited to Uttar Pradesh only and the appellant pleaded that registration should: have been refused altogether, The learned Judges of the High Court held that the words 'Amrit ' and 'dhara ' were common, words in the Hindi language and the combined word 'Amritdhara ' meant current of nectar ' or the flow of nectar '; the two words 'Lakshman ' and 'dhara 'were also well known common words and combined, together they meant "current or flow of Lakshman '.
The learned Judges, then said: "There is no possibility of any Indian confusing the two ideas.
Even phonetical differences are wide enough not to confuse anybody.
The claim of the Amritdhara pharmacy that both the words Amrit and dhara ' have become so associated with their goods that the use of each part separately or in any combination is ' likely to mislead is an, untenable claim.
The whole phrase 'Amritdhara ' had been registered and the Monopoly ' has to be 491 confined only to the use of the whole word.
The words of common language like "Amrit ' and 'dhara ' cannot be made the monopoly of any individual.
We, therefore see no reason to disallow registration of the trade mark "Lakshmandhara '.
" As to honest concurrent user from 1923 to 1942 the learned Judges again held in favour of the respondent.
But on the point acquiescence they held against the respondent and found in favour of the appellant.
They said that from the fact that both the medicines were being advertised in the same journals or periodicals it did not, following that the attention of the appellant was, drawn to@ the use of the word 'Lakshmandhara ' by the respondent.
In view, however, of their finding that the two names were not likely to cause any confusion and that the ' respondent had been an honest concurrent user from 1923 onwards, they held that there was no justification for refusing registration to the trade mark 'Lakshmandhara ' for the whole of India.
They accordingly allowed the appeal of the respondent and dismissed that of the appellant by their judgment dated March 19, 1958.
The appellant then obtained special leave from this Court and the present appeal has been filed in pursuance of the leave granted by this court.
Two points have been agitated before us.
The first point is whether the name 'Lakshmandhara ' was likely to deceive the public or cause confusion to trade within the meaning of section 8 and section 10 (1) of the Act.
The second point is whether there was Such, acquiescence on) behalf of the appellant in the use of the name 'Lakshmandhara ' in the.
State of Uttar Pradesh as to bring it within the, expression 'special circumstances ' mentioned in sub section
10 of the Act.
We shall deal with these two points in the order in which we have stated them, 492 We may first read the relevant sections of the Act, viz.s. 8 and 10. 8.
Prohibition of registration of certain matter.
No trade mark nor part of a trade mark shall be registered which consists of, or contains, any scandalous design, or any matter the use of which would. (a) by reason of its being likely to deceive or to cause confusion or otherwise, be disentitled to protection in a Court of justice ; or (b) be likely to hurt the religious susceptibilities of any class of the citizen of India or (c) be contrary to any law for the time being in force, or to morality.
Prohibition of registration of identical or similar trade mark. (1) Save as provided in sub section (2), no trade mark shall be registered in respect of any goods or description of goods which is identical with a trade mark belonging to a different proprietor and already on the register in respect of the same goods or description of goods or which so nearly resembles such trade mark as to be likely to deceive or cause confusion.
(2) In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do he may permit the registration by more than one proprietor of trade marks which are identical or nearly resemble each other in respect of the same goods or description of goods, subject to such conditions and limitations if any, as the Registrar may think fit to impose.
(3) 493 It will be noticed that the words used in the sections and relevant for our purpose are "likely to deceive or cause confusion.
" The Act does not lay down any criteria for determining what is likely to deceive or cause confusion.
Therefore, every case must depend on its own particular facts, and the value of authorities lies not so much in the actual decision as in the tests applied for determining what is likely to deceive or cause confusion.
On an application to register, the Registrar or an opponent may object that the trade mark is not registerable by reason of cl.
(a) of section 8, or sub section
(1) of section 10, as in this case.
In such a case the onus is on the applicant to satisfy the Registrar that the trade mark applied for is not likely to deceive or cause Confusion.
In cases in which the tribunal considers that there is doubt as to whether deception is likely, the application should be refused.
A trade mark is likely to deceive or cause confusion by the resemblance to another already on the Register if it is likely to do so in the course of its legitimate use in a market where the two marks are assumed to be in use by traders in that market.
In considering the matter, all the circumstances of the case must be considered.
As was observed by Parker, J. in Pianotist Co. s Application (1), 'which was also a case of the comparison of two words "You must take the two words.
You must Judge them, both by their look and by their sound.
You must consider the goods to which they are to be applied.
You must consider the nature and kind of customer who would be likely to buy those goods.
In fact you must consider all the surrounding circumstances and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks (1) ,777.
For deceptive resemblance two important questions are: (1) who are the persons whom the resemblance must be likely to deceive or confuse, and (2) what rules of comparison are to be.
adopted in judging whether such resemblance exists.
As to confusion, it is perhaps an appropriate description of the state of mind of a customer who, on seeing a mark thinks,that it differs from the mark on goods which ' he has previously bought, but is doubtful whether that impression is Dot due to imperfect recollection.
(See Kerly on Trade Marks, 8th edition, p. 400.) Let us apply these tests to the facts of the case under our consideration.
It is not disputed before use that the two names 'Amritdhara ' and 'Lakahmandhara ' are in use in respect of the same description of goods, namely, a medicinal preparation for the alleviation of various ailments, Such medicinal preparation will be purchased mostly by people who instead of going to a doctor wish to purchase a medicine for the quick alleviation of ;their suffering, both villagers and townsfolk, literate as well as illiterate.
As we said in Corn Products Refining Co. vs Shangrila Food Products Ltd (1); the question has to be approached from the point of view of a man of average intelligence and imperfect recollection.
To such a man the overall structural and phonetic similarity of the ,two names 'Amritdhara ' and 'Lakshmandbara ' is, in our, opinion likely.
t o deceive or ; cause confusion.
We must consider, the overall similarity of the two composite words 'Amritdhara ' and 'Lakshman dhara '.
We do not think that the learned Judges of the High Court were right in Paying that no Indian would mistake one 'for the other.
An unwary purchaser of average intelligence and imperfect recollection would not, as the High Court supposed, split the name into its component parts and consider the etymological meaning thereof or 495 even consider the meanings of the composite words as 'current of nectar ' or current of Lakshman '.
He. would go more by the overall structural and phonetic similarity and the nature of the medicine he has previously purchased, or has been told about, or about which has other vise learnt and which he wants to purchase.
Where the trade relates to goods largely sold to illiterate or badly educated persons, it is no answer to say that a person educated in the Hindi language would go by the entymological or ideological meaning and, see the difference between 'current of nectar ' and current of Lakshman '. 'Current of Lakshman in a literal sense has no meaning to give it meaning one must further make the inference that the 'current or stream ' is as pure and strong as Lakshman of the Ramayana.
An ordinary Indian villager or townsmen will perhaps know Lakshman, the story of the Ramayana being familiar to him but we doubt if he would etymologine to the extent of seeing the so called ideological difference between 'Amritdhara 'and 'Lakshmandhara '.
He would go more by the similarity of the two names in the context of the widely known medicinal preparation which he wants for his ailments.
We agree that the use of the word 'dhara ' which literally means 'Current or stream ' is not by itself decisive of the matter.
What we have to consider here is the overall similarity of the composite words, having regard to the circumstance that the goods bearing the two names are medicina l preparations of the same description.
We are aware that the admission of a mar is not to be refused, because unusually stupid people, "fools or idiots", may be deceived.
A critical comparison of the two names may disclose some points of difference.
but an unwary purchaser of average intelligence and imperfect recollection would be deceived by the overall similarity of the two names having regard 496 to the nature of the medicine he is looking for with a somewhat vague recollection that he had purchased a similar medicine on a previous occasion with.
a similar name.
The trade mark is the whole thing the whole word has to be considered a the case of the application to register 'Erectiks ' (opposed by the proprietors of the trade mark 'Erector ') Farwell, J. said in William Bailey (Bir mingham) Ltd.8 Application (1) : "I do not think it is right to take a part of the word and compare it with a part of the other Word; one word must 'be considered as a whole and compared with the other word as a whole. . .
I think it is a danger ous method to adopt to divide the word up, and seek to distinguish a portion of it from a portion of the other word".
Nor do we think that the High Court was.
right in thinking that the appellant was claiming a. monopoly in the common Hindi word 'dhara '.
We do not think that is quite the position here.
What the appellant is claiming is its right under section 21 of the Act, the exclusive right to the use of its trade mark, and to oppose the registration of a trade mark which go nearly resembles its trade mark that it is likely to deceive or cause confusion.
A large number of decisions relating to the use of composite words, such as Night Cap and RedCap, Limit and Summit, Rito and Lito, Notrate and Filtrate, etc. were cited in the High Court.
Some more have been cited before us.
Such deci sions, examples of deceptive resemblance arising out of contrasted words, have been summarised at page 429 to 434 in Karly on Trade Marks, 8th Edition.
No useful purpose will be served by referring to them all.
As we have said earlier, each case must be decided or its own fact.
What degree of ' (1) 497 resemblance is necessary to deceive or cause confusion must the nature of things be incapable of definition a priori.
As to the decisions in annexure 'A ', it has been argued before us that they were not at all admissible by reason of sections 40 to 43 of the .
On behalf of the appellant it has been contended that they were admissible under section 13 of the Evidence.
Act as showing the particular instances in which the appellant claimed its right under section 21 of the Act.
We consider it unnecessary to decide this question for the purposes of this case because those decisions even if they are admissible under section 13 do not throw any light on the question whether 'Amritdhara ' and 'Lakshmandhara ' so nearly resemble each other as to cause deception or confusion.
That is a, question which we must determine as a case of first impression and irrespective of the earlier decisions.
On a consideration of all the circumstances, we have come to the conclusion that the overall similarity between the two names in respect of the same description of goods was likely to cause deception or confusion within the meaning of section 10(1) of the Act and Registrar was right in the view he expressed.
The High Court was in error taking a contrary view.
We know go the second question, that of acquiescence.
Here again we are in agreement with the Registrar of Trade Marks, who in a paragraph of his order quoted earlier in this judg ment has summarised the facts and circumstances on which the plea of acquiescence was based.
The matter has been put thus in Halsbury 's Laws of England, Vol.
32 (second edition) pages 659 657, paragraph 966.
" If a trader allows another person who is acting in good faith to build up a reputa 498 tion under a trade name or mark to which he has rights, he may lose his right to complain, and may even be debarred from himself using such name or work.
But even long user by another, if fraudulent, does not affect the plaintiff 's right to section final injunction on the other hand prompt warning or action before.
the defendant has built up any good will may materially assist the plaintiff 's case".
We do not think that there was any fraudulent user by the respondent of his trade name 'Lakshmandbara '.
The name was first used in 1923 in a small way in Uttar Pradesh.
Later it was more extensively used and in the same journals the two trade marks were publicised.
The finding of the Registrar is that the appellant and its agent were well aware of the advertisements of the respondent, and the appellant stood by and allowed the respondent to develop his business till it grew from a small beginning in 1923 to an annual turnover of Rs. 43,000/ in 1946.
These circum stances establish the plea of acquiescence and bring the case within sub section
(2) of section 10, and in view of the admission made on behalf of the respondent 'that his goods were sold mainly in Uttar Pradesh, the Registrar was right in imposing the limitation which he imposed.
For these reasons, we would allow the appeal, set aside the Judgment and order of the High Court, and restore those of the Registrar of Trade Marks, Bombay, dated September 10. 1953.
In the circumstances of this case, there will be no order for costs.
Appeal allowed.
| The respondent applied for registration of the trade name "Lakshmandhara" in relation to the medicinal preparation manufactured by him at Kanpur since 1923.
It was admitted that the respondent 's product was mainly sold in the State of Uttar Pradesh.
The appellant opposed the registration on the ground that it had an exclusive proprietary interest in the trade mark "Amritdhara" in relation to a similar medicinal preparation which had acquired considerable repu tation since 1903 and that the respondent 's trade name "Lakshmandhara" was likely to deceive and cause confusion and therefore the registration was prohibited by section 8 of the Trade Marks Act.
The Registrar of Trade Marks held that there was sufficient similarity between "Amritdhar 'a ' and "Lakshamandhara" so as to cause confusion and it was likely to deceive the public, but the acquiescence of the appellant in the use of the trade name "Lakshmandhara" by the respondent in the relation to his product for a long period to the knowledge of the appellant was special circumstance under section 10(2) entitling the respondent to have his name registered along with the appellant 's trade name.
He, however, confined the registration to sales with the State of Uttar Pradesh.
Both the appellant and the respondent appealed to the High Court which allowed the respondent 's appeal holding that the words "Amrit" and "dhara" were common words in the Hindi language as also the words "Lakshman" and "dhara" and that there was no possibility of any Indian confusing the two ideas.
The High Court further held there had been honest concurrent user by the respondent.
,, On the question of acquiescence it held against the respondent.
On appeal by special leave.
Held, that the question whether a trade name is likely to deceive or cause confusion by its resemblance to another al.
ready registered is a matter of first impression and one for decision in each case and has to be decided by taking an over.
all view of all the circumstances.
The standard of comparison to be adopted in judging the resemblance is from the point of 485 view of a man of average intelligence and imperfect recollection.
Pianotist Co. 's Application, , referred to.
Corn Products Refining Co., vs Shangrila Food Product8 Ltd., , referred to.
Held, further, that the two names as a whole should be considered for comparison and not merely the component words thereof separately.
William Bailey (Birmingham) Ltd. '8 application, (1935) 52 R. P. C. 137, referred to.
Held, also, that in the present case the similarity in the two name in respect of the same description of goods was likely to deceive or cause confusion; but the facts found by the Registrar established the plea of acquiescence so a to bring the case within sub s.(2) of section 10, and the Registrar was right in imposing the limitation which he imposed.
|
ivil Appeal No. 3534 of 1986.
From the Judgment and Order dated 17.2.
1986 of the Patna High Court in C.W.J.C. No. 6215 of 1985.
Govind Mukhoty, S.K. Bhattacharya and U.S. Prasad for the Appellant.
Jaya Narain, R.P. Singh, B.P. Singh and Ranjit Kumar for the Respondent.
The Judgment of the Court was delivered by PATHAK, CJ.
This appeal by Special Leave is directed against the Judgment and Order of the High Court of Patna dismissing a Writ Petition filed by the appellant.
The appellant is an Additional Subordinate Judge in the Bihar Judicial Service.
Disciplinary proceedings were taken against him and ended in an order imposing the punishment of censure, the withholding of annual increments for two years, postponement of his case for promotion for a like period and the denial of emoluments in excess of the subsistence allow ance for the period of suspension.
The appellant filed a Writ Petition in the High Court challenging the order of punishment on several grounds but did not succeed.
He urged also that the appeal filed by him to the Governor against the order of punishment should not have been withheld by the High Court but should have been despatched to the State Government for consideration.
The High Court held that no appeal lay to the State Government and therefore rejected the plea.
On 16 September, 1986 this Court granted special leave to the appellant confined to the question whether an appeal lay to the Governor against the order of the High Court.
That is the sole question for consideration before us.
To support his claim to a right of appeal the appellant relies on 525 the Civil Services (Classification, Control and Appeal) Rules 1930.
It is pointed out that these Civil Services Rules of 1930 have been kept in force by the State Govern ment by notification No. III/RI/10 1/63 8051A dated 3 July, 1963 issued under the proviso to Article 309 of the Consti tution.
The submission of the appellant is that the right of appeal is saved by Article 235 of the Constitution.
Article 235 of the Constitution provides that the control over District Courts and Courts subordinate thereto, including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of the State and holding any post inferior to the post of District Judge shall be vested in the High Court but that nothing in that Article may be construed as taking away from any such person any right of appeal which he may have under the law regulat ing the conditions of service.
The question is whether the appellant is governed by the Civil Services Rules of 1930, Rule 14 classifies the Public Services in India into a number of categories, and one such category is constituted of the Provincial Services.
Rule 18 declares that the Provincial Services shall consist of such services under the administrative control of the Local Government of a Governor 's Province as the Local Government may from time to time declare, by notification in the local official Gazette, to be included in the Provincial Services of that Province.
Rule 49 specifies the penalties which could be imposed upon members of the Services specified in Rule 14.
Rule 56 confers a right of appeal on a person belonging to any of the classified Services specified in Rule 14 against an order imposing any of the penalties specified in Rule 49.
Rule 57(5) provides: "A member of a Provincial Service . . may appeal to the Governor from an order passed by the Local Government".
We enquired of learned counsel for the parties whether a Notification had been issued designating the Subordinate Judicial Service, of which the appellant is a member, as one of the Provincial Services specified in Rule 14.
Neither counsel was able to refer to any Notification in that be half.
In the absence of positive material providing that the Subordinate Judicial Service can be regarded as having been brought within the scope of the Civil Services Rules of 1930, it is not open to the appellant to rely on the right of appeal created by those Rules.
Our attention has been drawn to the fact that the Civil Services Rules of 1 '930 were continued with effect from 22 December 1956, by 526 Notification No. III/RI/101/63 8051 A dated 3 July, 1963.
That does not advance the case of the appellant any further because the Notification can take effect in respect of such Service only as has already been brought within the scope of those Rules.
Before leaving this case, we must give expression to our great disappointment that neither party was able to indicate what were the Rules which governed the Judicial Service to which the appellant belonged.
If no Notification was issued applying the Civil Service Rules of 1930 to such Judicial Service, there must surely be some other body of Rules which does apply.
And if there is none, it is time that such body of Rules was framed.
The present regrettable state of confu sion must be ended.
It would certainly be a matter of grati fication for the Judicial officers of the State of Bihar to know where they stand.
In the result, the appeal fails and is dismissed but in the circumstances we make no orders as to costs.
A.P.J. Appeal dis missed.
| An officer in the Army filed a complaint before a Magis trate alleging that another officer has assaulted him, that the Commanding Officer to whom he had complained earlier had failed to take satisfactory action and thus both of them had committed offences under the Indian Penal Code.
The Magis trate examined the complainant under section 200 Cr.
P.C., took cognizance of the offences under section 190(A) and, on being satisfied of the existence of a prima facie case, issued summons under section 204(A) for the appearance of the accused.
Upon applications being made by the appellants urging that the case be handed over to the Military Authorities for disposal, the Magistrate made an order directing that the case be transferred to the Army Authorities for disposal in accordance with the provisions of the after trial by a Court Martial at any place within the jurisdic tion of his Court and that the progress of the case be reported to him at intervals of two months.
Upon the appel lants making further applications praying for review of the said order on the ground that under the and the Army Rules, it was not mandatory that all disciplinary cases against military personnel should culminate in a trial by Court Martial and submitting that the disciplinary action against the officers concerned would be initiated after an investigation of the alleged offences, the Magistrate, pointing out that the judicial process for ascertaining the prima facie existence of a case had already been completed, held that the trial of the accused by Court Martial was mandatory under section 475 Cr.
P.C. and, 457 therefore, it was not permissible for the Army Authorities to hold a preliminary investigation.
However, having regard to section 127 of the , the Magistrate directed that the progress of the case be intimated at intervals of four months.
in the Revision filed by the appellants, the High Court interfered with the order of the Magistrate insofar only that it deleted the direction requiring the Army Au thorities to inform the Magistrate of the progress of the case 'at intervals of four months and directed instead that the result of the Court Martial proceeding be communicated to the Magistrate, as soon as may be, in accordance with r. 7 of the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1978.
Dismissing the appeal by Special Leave, HELD: The Army Authority is not entitled to ignore the proceeding taken by the Magistrate and to invoke the provi sions of r. 22 and related rules of the Army Rules.
The Magistrate having held that there is a case for trying the two accused officers and having directed their appearance, the Army Authority must proceed to hold a Court Martial for their trial or take other effectual proceedings against them as contemplated by the law.
[468G H] (i) It is open to a Magistrate under sections 200 203, Cr.
P.C. to inquire into a complaint of an offence alleged to have been committed by a military person, where it falls within his jurisdiction and to take proceedings for trial of the accused.
Likewise, a duly constituted Army Authority has power under the provisions of r. 22 onwards of the Army Rules to investigate into a charge against a military person accused of an offence triable under the , and after such hearing to decide whether his trial by a Court Martial should be ordered.
The provisions of the Army Rules run parallel to the provisions in the Cr.
P.C. Inasmuch as there is always a possibility of the same offence being triable either by a Criminal Court or by a Court Martial, section 475, Cr.
P.C. empowers the Central Government to make rules as to cases in which persons shall be tried by a Court to which the Code applies or by a Court Martial, and the section provides that whenever a person is brought before a Magis trate and charged with an offence for which he is liable to be tried either by a Court to which the Code applies or by a Court Martial, such Magistrate must have regard to such rules and must, in proper cases, deliver the person together with a statement of the offence of which he is accused, to the Commanding Officer of the unit to which he belongs for the purpose of being tried by a Court Martial.
The language used in section 475 is significant.
It refers to a person 458 who "is brought before a Magistrate and charged with an offence." In other words, he must be a person respecting whom the Magistrate has taken the proceedings envisaged by sections 200 to 204 of the Cede.
He will be a person in respect of whom the Magistrate has found that there is a case for trial.
It is for that reason that section 475 goes on to say that when such person is delivered to the Commanding Officer of the unit to which he belongs, it will be "for the purpose of being tried by a Court Martial".
When he is so delivered, a statement of the offence of which he is accused will also be delivered to the Commanding Officer.
The relevance of deliv ering such statement can be easily understood, for it is to enable the Army Authority to appreciate the circumstances in which a Court Martial is required by the law.
[464C D; 465E H] (ii) It is clear from r. 7(1) of the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1978 framed under section 475 of the Cr.
P.C. that when the accused is made over by the Magistrate under section 5 or 6 thereof to the competent military or other authority, it is for the purpose of trial by a Court Martial or other "effectual proceedings" to be taken or ordered to be taken against him inasmuch as the competent authority must, as soon as may be, inform the Magistrate, whether the accused has been tried by a Court Martial or other effectual proceedings have been taken or ordered to be taken against him and the communication of such information is mandatory.
When the Magistrate is in formed that the accused has not been tried or other effectu al proceedings have not been taken or ordered to be taken against him, he is obliged to report the circumstances to the State Government and the State Government, in consulta tion with the Central Government, may take appropriate steps to ensure that the accused person is dealt with in accord ance with law.
The policy of the law is clear.
Once the Criminal Court determines that there is a case for trial, and pursuant to the aforesaid rule, delivers the accused to the competent military or other authority, the law intends that the accused must either be tried by a Court Martial or some other effectual proceedings must be taken against him.
[467B E] (iii) The policy of our Constitutional Polity is that no person should be regarded as being above the law.
Military, navel or air force personnel are as much subject to the law as members of the civil population.
It is significant that r. 8 of the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1978 empowers the Magistrate, on coming to know that a person subject to the military, naval or air force law or any other law relating to the Armed Forces has committed an offence and proceedings in respect of which ought to be instituted 459 before him and that the presence of such person cannot be procured except through military, navel or air force author ities, to require the Commanding Officer of such person either to deliver such person to a Magistrate for being proceeded against according to law or to stay the proceed ings against such person before the Court Martial if since instituted, and to make a reference to the Central Govern ment for determination as to the Court before which the proceedings should be instituted.
[467G H; 468A B] (iv) Section 127 of the provides that a person convicted or acquitted by a Court Martial, may, with the previous sanction of the Central Government, be tried against by a Criminal Court for the same offence or on the same facts which is an exception to the rule contained in article 20 of the Constitution that no person shall be prose cuted and punished for the same offence more than once.
It is to enable the operation and application of section 127 of the Act that r. 7(1) of the Criminal Courts and Court Martial (Adjustment of Jurisdiction) Rules, 1978 requires the compe tent military or other authority to inform the Magistrate whether the accused has been tried by a Court Martial or other effectual proceedings have been taken against him.
[468B D] (v) Section 125 of the , which provides that when a Criminal Court and a Court Martial have each juris diction in respect of an offence, it will he in the discre tion of the Commanding Officer of the accused to decide before which Court the proceedings shall he instituted, is of no assistance in deciding whether it is open to the Army Authority to take proceedings for determining prima facie whether there is substance in the allegations made against the accused and decline to try him by a Court Martial or take other effectual proceedings against him even where a Magistrate has taken cognizance of the offence and finds that there is a case for trying the accused.
[468E F] (vi) There is nothing in the provisions of the Army Rules relating to Courts of Inquiry which can support the contention that notwithstanding the proceeding taken by the Magistrate it is open to the Army Authority to hold a Court of Inquiry and determine whether there is any case for trying the accused by a Court Martial.
If, it is not open to the Army Authority to have recourse to r. 22 of the Army Rules and investigate the charge directed against the ac cused officer in this case, for the same reason, it is not open to it to hold a Court of Inquiry and supersede the proceeding already taken by the Magistrate.
[469B D] 460
|
Civil Appeal No. 3133 of 1979 Appeal by special leave from the judgment and order dated the 30th July, 1979 of the Allahabad High Court in Sales Tax Revision No. 573 of 1979.
150 G.L. Sanghi, Bharat Ji Aggarwal, Naresh Kumar Sharma and Vineet Kumar for the appellant.
S.C. Manchanda and Mrs. Sobha Dixit for the respondent.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
The short point for consideration in this appeal is whether the expression 'cooked food ' used in certain notifications issued under the U.P. Sales Tax Act, 1948 (U.P. Act XV of 1948) (hereinafter referred to as 'the Act ') can be construed as including within its meaning 'biscuits ' also.
The assessee, the appellant herein, is a registered firm engaged in the business of manufacture and sale of biscuits intended for human consumption.
The assessee is a registered dealer under the Act.
During the assessment proceedings under the Act for the year 1972 73 the assessee claimed that the turn over relating to biscuits manufactured and sold by it amounting to Rs. 35,09,920.38 P. was liable to be taxed at two per cent which was the rate prescribed by a notification issued by the State Government for cooked food contending that 'cooked food ' included 'biscuits ' also.
The notification relied on was one issued on October 6, 1971 under subsection (2) of section 3 A of the Act in supersession of an earlier notification dated July 1, 1969.
In both the notifications the tax was fixed at two per cent of the turn over payable at all points of sale in the case of cooked food.
The Assistant Commissioner (Tax Assessment) Sales Tax, Kanpur who was the assessing authority rejected the contention of the assessee that cooked food included biscuits also and imposed tax at the rate of three and a half per cent on the turn over relating to biscuits treating the same as an unclassified commodity.
An appeal filed against the order of the assessing authority before the Deputy Commissioner Sales Tax and a further appeal before the Judge (Appeal) Sales Tax, Lucknow were unsuccessful.
The High Court of Allahabad also declined to interfere with the said order.
This appeal by special leave is filed against the order of the High Court under Article 136 of the Constitution.
The only ground urged before us is that biscuits should have been treated by the authorities under the Act and by the High Court as cooked food and sales tax should have been levied on the turnover of biscuits at the rate prescribed in respect of cooked food under the notification referred to above.
The argument urged on 151 behalf of the appellant is that biscuit which was consumed by human being for nourishment is food and since it is prepared by baking which is a kind of cooking process it should be treated as cooked food.
Relying on some foreign English dictionaries it is contended that cooking means preparation of food by application of heat as by boiling, baking, roasting, broiling etc.
and biscuit should therefore be treated as cooked food.
What is of significance in this case is that the Hindi version of the notification issued uses the expression cooked food (pakaya hua bhojan) for 'cooked food ' found in the notification in English language.
It is a well settled rule of construction that the words used in a law imposing a tax should be construed in the same way in which they are understood in ordinary parlance in the area in which the law is in force.
If an expression is capable of a wider meaning as well as narrower meaning the question whether the wider or the narrower meaning should be given depends on the context and the background of the case.
In Hinde vs Allmond the question was whether tea was an "article of food" within the meaning of an Order designed to prohibit the hoarding of food namely Food Hoarding Order of 1917.
The learned judges held it was not even though in some other decisions it had been held to be an "article of food".
Shearman, J. one of the judges said that he rested his judgment on the common sense interpretation of the word 'food ' in the Order, apart from its meaning in any other statute '.
It is interesting to note that in a case before the Allahabad High Court in Annapurna Biscuit Manufacturing Co. vs State of U.P. the assessee had contended that biscuit was an article of confectionery and that contention was negatived.
It is relevant to note, as we have mentioned earlier, that when the Hindi text of the notification was issued contemporaneously with the English version, the words ( 'pakaya hua bhojan ') were used as the equivalent of the words 'cooked food '.
It may be that biscuit is served at tea time and in its wider meaning 'cooked food ' may include biscuit.
But ordinarily biscuit is not understood as cooked food.
If a person goes to a hotel or restaurant and asks for some cooked food or cooked food ( 'pakaya hua bhojan ') certainly he will not be served with biscuits in Uttar Pradesh.
While it is not necessary to state in the present case as to what all items may be called as cooked food, we can definitely say that in the context and background of the notification biscuit cannot be treated as cooked food.
152 The High Court of Allahabad has in an earlier case in Commissioner of Sales Tax vs Jassu Ram Bakery Dealer held that biscuit was not cooked food.
The High Court of Madhya Pradesh has also taken the same view in Commissioner of Sales Tax Madhya Pradesh vs Shri Ballabhdas Iswardas.
We approve of the views expressed in the aforesaid decisions.
There is no ground to interfere with the orders under appeal.
In the result, this appeal fails and is dismissed.
No costs.
S.R. Appeal dismissed.
| In his suit under section 13(1)(g) of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 seeking the eviction of the respondent defendant from the suit premises, the plaintiff appellant claimed that after having been displaced from Uganda on account of political upheaval in that country he intended to settle down in his native town and that therefore, he reasonably and bonafide required the suit premises under the defendant 's occupation for setting up his business.
In replication the defendant claimed that he, a man of slender means, had built up his goodwill by running a business from the premises over the years and his eviction from the premises would put greater hardship on him than on the plaintiff.
In support of his case he pleaded that section 13(2) of the Act makes it incumbent on the Court to refrain from passing an order of eviction under section 13(1)(g) if it is satisfied that it causes greater hardship to the tenant than to the landlord.
The court of first instance, and in appeal the District Judge, negatived the defendant 's claim of comparative hardship to him because the defendant himself was not in actual possession of the premises but had in fact inducted another person who had his own business elsewhere in the town but used the suit premises as a mere godown.
On appeal the High Court declined to pass an order of eviction under section 13(1)(g).
It held that the defendant, who in his old age was receiving some maintenance from the licensee for the use of the premises, would be deprived of his only source of livelihood were he evicted from the premises and that secondly the fact that the plaintiff had gone back to Uganda showed that he was not sure whether to settle down in India or go back to Uganda.
Allowing the appeal.
^ HELD: Section 13(2) seeks to strike a just balance between the landlord and tenant.
In considering the question of greater hardship the Court would have to take into account the circumstances which would tilt the balance of hardship either way.
The existence of alternative accommodation on both sides is an important though not a decisive factor.
On the terms of section 13(2) 154 the question whether or not there would be greater hardship to the tenant by passing the decree cannot turn on mere burden of proof but the parties must lead evidence.
[157 A D] The High Court erred in non suiting the plaintiff.
There is enough evidence to show that he came from Uganda as a result of political upheaval in that country, that he had considerable business experience in that country and that he had the requisite wherewithal to carry on business.
In contrast the defendant was not in actual possession of the suit premises but had given possession of the premises to another person who had a separate shop of his own, who only used the premises as his godown.
The mere circumstance that the defendant was aged and infirm and that the licensee paid him some amount regularly would not imply that a decree under section 13(1)(g) would cause greater hardship to the defendant.
Section 13(2) would have been relevant had the defendant himself been in possession of the premises.
In any event the defendant having died the question of greater hardship to him under section 13(2) would not arise.
[158 A F] Although the jurisdiction exercisable by the High Court under the Act is wider than its jurisdiction under section 115 C.P.C. its revisional jurisdiction under the Act could only be exercised for the limited purpose of satisfying itself that the decision of the Courts below was according to law.
So long as the finding of the Courts below was not perverse or erroneous the High Court cannot, on a reappraisal of the evidence, substitute its own finding for the one reached by the Courts below.
[157 E F] In dealing with the question of comparative hardship the Court is only concerned with the hardship of the landlord and the tenant but not of a complete stranger.
[157 F G]
|
ition Civil Nos.
999 of 1988 and 1043 of 1989.
(Under Article 32 of the Constitution of India).
R.K. Jain, Rakesh K. Khanna, Ms. Sangeeta Mandal, Surya Kant and R.P. Singh, (NP) for the Petitioners.
106 section Hegde, Additional Solicitor General, Ms. A. Subha shini, Ms. Uma Jain and R.K. Mehta for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Both these are applications under article 32 of the Constitution, the first one by three peti tioners and the second by one.
The respondent All India Institute of Medical Sciences has been set up under a Cen tral Act of that name of 1956.
Section 13 of the Act pro vides the objects of the Institute which are: "(a) to develop patterns of teaching in udergraduate and post graduate medical education in all its branches so as to demonstrate a high standard of medical education to all medical colleges and other allied institutions in India; (b) to bring together in one place educational facilities of the highest order for the training of personnel in all important branches of health activity; and (c) to attain self suffi ciency in post graduate medical education.
" Section 14 of the Act lays down the functions of the Institute and, inter alia provides in cls.
(a) and (b): "14.
With a view to the promotion of the objects specified under section 13, the Institute may (a) provide for undergraduate and post graduate teaching in the science of modern medicine and other allied sciences including physical and biological sciences; (b) provide facilities for research in the various branches of such sciences"; Petitioners have alleged that ever since its inception the Institute has taken up various research projects and has made valuable contribution to the updating of medical knowl edge and building up coordinated research activity.
For the purposes of carrying out such research programme in conjunc tion with the world Health Organisation, the Indian Council of Medical Research and other celebrated organisations both national and international research projects are undertaken by the Institute by employing researchers.
For the carrying out of the assignments of research projects the petitioners were employed more than a decade ago and their assertion to the effect that 107 they have continuously worked for more than 10 15 years has not been disputed.
Petitioners have also asserted that they have worked to the satisfaction of the authorities and the guides and there is no denial of that fact too.
It is the case of the petitioners that by working for such a long period continuously and in different projects under differ ent guides, they have picked up the requisite expertise which would be useful in carrying out any normal research project.
Petitioners allege that there is work in the hands of the Institute but petitioners ' employment excepting in the case of Dr. Jasbir Kaur Dhawan (Kochhar), petitioner No. 3 in the first writ petition, as Researchers have now been terminated.
They contend that having worked for a long period in the Institute they have reached an age in life where they are no more entitled to enter into Government service or any other suitable public employment.
While they have gathered the requisite expertise and are useful for the purpose of assisting research programme with the deprivation of their employment and faced with the ban of over age for any public employment they are deprived of the source of sustenance and the nation is deprived of their useful serv ice.
The Institute, the Union of India in the Ministry of Health and the Indian Council of Medical Research have responded to the notice on the petition.
A common affidavit has been filed purporting to be on behalf of the respondents by the Director of the Institute.
It has been stated therein that the Institute is assigned projects and the Project Guides pick up Researchers depending upon suitability.
The employment is project wise and once the project is complete, the job comes to an end.
The fact that there has been con tinuous engagement available to the petitioners does not change the nature of employment and the fortuitous circum stance of continuity does not confer any right in the peti tioners to be continued in employment even when the Insti tute does not have any research project in hand.
It has been specifically pleaded that the services of the petitioners are not required any longer in the absence of any research project with the Institute where their services would be suitable.
The other two respondents being the Union of India and the Indian Council of Medical Research have not filed any counter affidavit of their own.
The Institute and the Union of India appeared through separate Advocates at the time of hearing.
Mr. Hegde, learned Additional Solicitor General indicat ed his sympathy to the cause of the petitioners and took an adjournment from the Court to explore the possibility of offering a solution to the 108 problem and returned to tell us that though there was a human problem, no solution could be worked out.
The Institute set up by statute is intended to carry on research in a continuous way to improve the level of medical knowledge.
Under the Act the Institute is an autonomous body though the Chairman thereof is no other than the Union Minister of Health.
It is true that the Institute is en trusted from time to time with research projects by the World Health Organisation, the Indian Council of Medical Research and other government and semi government bodies.
It is appropriate that a scheme should be evolved by the Insti tute in coordination with the Health Ministry and the Indian 2Council of Medical Research so that a team of researchers is built up to meet the general requirements of research.
It is quite possible that certain projects would require spe cialised hands and on such occasions a special team could be set up on casual basis by drawing the competent hands from different institutions for a period but to keep up the tempo of research if a team of researchers is built up, it would be convenient for the Institute for purposes of discipline and control as also for efficiency.
The Health Ministry must also sponsor continuous research projects in the field of medicine and health and for such purpose several projects should be listed out from time to time and entrusted to the respondent Institute as also a similar Institute at Chandi garh and to institutes as and when set up elsewhere.
This would assist in updating relevant medical information and knowledge, apart from building up a scientific tone and temper for general circulation.
We commend that the Insti tute initiates seriously action in this regard without delay and we suggest that the Ministry of Health and the Indian Council of Medical Research collaborate with the Institute to work out the same.
Respondent no.3 Indian Council of Medical Research has not chosen to appear separately before us inspite of service of notice.
Since we have been told that the respondent Institute has immediately no scope to employ the petitioners excepting the one that we have named above, we direct that the remaining three petitioners in these two petitions should be provided employment either as Researchers or in any suitable alternative employment until their inclusion in a team of researchers is considered.
The Indian Council of Medical Research shall take appropriate steps to offer adequate employment to the three petitioners within two months hence.
If the question of funding becomes necessary, we direct the Ministry of Health to cooperate and place adequate funds at the disposal of the Indian Council of Medical Research.
109 These two petitions are disposed of with the aforesaid directions and without any order for costs, with liberty to the petitioners to apply, with the fond hope that all con cerned will appreciate the spirit of the order and implement the direction in the proper way as stipulated.
N.P.V. Petitions disposed of.
| The Petitioners were employed by the respondent Insti tute for carrying out assignments of research projects undertaken by the Institute.
The employment of three of the four petitioners was terminated.
The petitioners filed Writ Petitions in this Court alleging that they were continuously employed for more than 10 15 years and had reached an age in life where they were no more entitled to enter into Govern ment service or any other suitable employment and, with the deprivation of their employment they were deprived of the source of sustenance and the nation of their useful service, as they had picked up requisite expertise which would be useful in carrying out any normal research project.
In the common affidavit filed on behalf of the respond ents, the respondent Institute stated that the employment was project wise,.and once the project was complete, the job came to an end, and the services of the petitioners were no longer required in the absence of any research project, and that the fortuitous circumstances of continuous engagement did not confer any right on the petitioners to be in contin ued employment even when no research project was in hand.
Disposing of the petitions, this Court, HELD: The All India Institute of Medical Sciences set up by 105 statute is intended to carry on research in a continuous way to improve the level of medical knowledge.
The Institute is entrusted from time to time with research projects by the World Health Organisation, the Indian Council of Medical Research and other government and semigovernment bodies.
Therefore, a scheme should be evolved by the Institute in coordination with the Health Ministry and the Indian Council of Medical Research so that a team of researchers is built up to meet the general requirements of research.
Certain projects would quite possibly require specialised hands and on such occasions a special team could be set up on casual basis by drawing the competent hands from different institu tions for a period but to keep up the tempo of research if a team of researchers is built up, it would be convenient for the Institute for purposes of discipline and control as also for efficiency.
[108B C] The Health Ministry must also sponsor continuous re search projects in the field of medicine and health and for such purpose several projects should be listed out from time to time and entrusted to the respondent Institute as also a similar Institute at Chandigarh and to Institutes as and when set up elsewhere.
This would assist in updating rele vant medial information and knowledge, apart from building up a scientific tone and temper for general circulation.
[108D E] The Institute should initiate seriously action in this regard without delay and the Ministry of Health and Indian Council of Medical Research should collaborate with the Institute.
[108E] Since the respondent Institute has immediately no scope to employ the petitioners, excepting the one already re tained, the remaining three petitioners should be provided employment either as Researchers or in any suitable alterna tive employment until their inclusion in a team of research ers is considered.
The Indian Council of Medical Research should take appropriate steps to offer adequate employment to the three petitioners within two months hence.
If neces sary, the Ministry of Health should cooperate and place adequate funds at the disposal of the Indian Council of Medical Research.
[108F H]
|
N: Criminal Appeal No. 119 of 1971.
Appeal by Special Leave from the Judgment and Order dated the 17th February, 1971 of the Bombay High Court in Criminal Appeal No. 1371 of 1969.
F. section Nariman, K. J. John and Shri Narain of M/s J. B. Dadachanji & Co. for the appellant.
section B. Wad and M. N. Shroff for the respondent.
The Judgment of the Court was delivered by BEG, J.
The appellant was charged in the Court of Presidency Magistrate of Bombay as follows: "That you on 3 12 1968 at 8 a.m. at Bandra, in contravention of provisions of Section 2(1)(f) and 7(i) of the Prevention of Food Adulteration Act, sold 450 grams of Til seeds to the Food Inspector and that the Til seeds were unfit for human consumption, and thereby committed an offence under sec. 16(1)(a)(1) of the same Act and within my cognizance".
The two witnesses produced to support this charge were D. P Tambe and section P. Gaydhani.
D. P. Tambe (P.W. 1), a businessman, said that he had gone.
to "a shop to make purchases", without giving either the name of the shop or approximate date or time of his visit.
Under cross examination, he said that he did not know whether it was a foodgrain shop.
He said that he saw the complainant pick up a jar, open it.
and look at its contents.
He deposed that there was "some talk" between the complainant and the accused The complainant was 329 then said to have come up to and told this witness that he would be taking "some commodity from the jar" which would be sent for analysis.
After that, the complainant, it was alleged, asked for some Til seeds.
Thereupon, according to this witness, "some persons in the shop found Til seeds in three plastic bags and gave the bags to the Inspector".
He said that the Inspector (i.e. the complainant) sealed the packets and that the witness signed the packets.
He deposed: "Cash Memo was prepared by some persons in the shop.
Inspector paid money to accused No. I. Accused No. I was with the Inspector all the while".
His cross examination showed that he could remember nothing material.
He did not even remember who made the cash memo and whether anyone signed it in his presence.
He said he only thinks that he signed it.
To almost every question under crossexamination his answer was that he does not remember.
Even after making every possible allowance for a memory which could fade with lapse of time, his version was extra . ordinarily nebulous and noncommittal.
The principal witness in the case was section P. Gayadhani, P.W 2 the prosecuting Food Inspector? who stated that, after having gone into the grocery shop at 731 Hill Road, Bandra, he disclosed his identity to the accused and demanded 450 grams of Til seeds for which he paid Rs. 1.35.
He said that he himself divided this quantity into 3 parts each of which was put into a separate plastic bag and then sealed and labelled by him.
He claimed to have obtained the signatures of the accused in the presence of Tambe whom he described as "the independent witness Tambe".
Under crossexamination.
He said that he took the signatures of Tambe on the cash memo but not on the packets, although he had deposed in his examination in chief that Tambe had signed the sealed packets also Incidentally, the seals of the packets were found broken due to what the Inspector described as 'handling".
He admitted that no signature of the witness was obtained on the counterfoil of the cash memo.
He stated: "Black Tils can be used for human consumption.
It is not correct to say they are used only for Pooja.
It is not true that the accused told me that he had only black Tils used for Pooja.
It is not true that the accused told mc that he will write on the cash memo the purpose for which black Tils are sold".
The accused appellant denied the presence of Tambe and asserted that the had clearly told the Food Inspector that the black Tils in his shop were only meant for Pooja and not for human consumption.
Apparently, as the Inspector wanted to buy these til seeds despite this information given to him, the accused sold them to him and signed the necessary papers.
The accused produced no witness in defence.
The real dispute on facts revolves round the question whether the black Tils were sold to the Food Inspector specifically for the purpose of Pooja after the accused had told him that they were not meant for human consumption, or, they were sold without giving such information to the Food Inspector.
In order to judge whether the 330 Food Inspector 's version or the accused 's explanation was more credible, it became necessary to examine the evidence of the only witness produced to corroborate the food Inspector.
We have considered the question whether it actually corroborates or contradicts the Food Inspector 's account.
It seems to us that there is such vagueness and apparent contradiction in the pictures conveyed by Tambe and the Food Inspector that Tambe 's testimony tends to demolish more than to corroborate the version of the Food Inspector on points of fact in issue.
k indicates that Tambe was probably not present at the time when the seeds were sold by the appellant to the Food Inspector.
The Presidency Magistrate, after examining the whole evidence,had concluded that the version of the appellant, that there was a tall; about the actual purpose for which the Til seeds at his shop were meant, was more probable because it was supported by what the appellant had written on the cash memo when he sold these Til seeds 'o the Food Inspector.
After all, the appellant, who had a grain shop, must have known that the Food Inspector could prosecute him if he kept adulterated foodstuffs for sale for human consumption.
If, as the analyst 's report showed, these black Til seeds were full of cocoons, visible to the naked eye, nobody could be expected to purchase them for consumption as food.
The learned Magistrate, after finding that it was more probable that there was talk about the purpose for which the Til seeds were kept in the accused 's shop.
despite the Food Inspector 's denial about such talk, held that the purpose for which the.
Til seeds were kept was quite immaterial.
It is true that mens rea in the ordinary or usual sense of this term is not required for proving an offence defined by Section 7 of the hereinafter referred to as 'the Act ').
It is enough if an article of adultered food is either manufactured for sale, or stored, or sold or distributed in contravention of any provision of the Act or of any rule made there under.
Nevertheless, the prosecution has to prove, beyond reasonable doubt, that what Was stored or sold was `food '.
The charge was that the Til seeds sold were unfit for human consumption.
This necessarily meant that it was part of the prosecution case that the Til seeds with which we are concerned were meant for human consumption.
Recently, this Court has held in Bhagwan Das vs Delhi Administration,(1) that, although mens rea, in the ordinarily understood sense, may not be needed to be proved in such cases, yet, the purpose for which articles of food covered by the Act are manufactured, distributed or sold was that they `.should reach the consumer to be used as food".
Thus, the use` the article sold was not entirely irrelevant.
It is more correct to say that it is presumed from the nature of the article itself or the circumstances and manner of offering it for sale.
Where circumstances raise a genuine doubt on the question whether what was kept by a seller was "food" at all, this must be resolved (1) A. 1.
R. # 1318 331 by evidence in the case.
After all, if what is stored or sold in a shop was neither "food" nor meant to be so used could a person be prosecuted on the ground that he sold it in an adulterated condition ? It was contended on behalf of the appellant that the whole object of the Act was to prevent adulteration of "food" meant for Human consumption.
Our attention was invited to a passage from Pyare Lal etc.
v, New Delhi Municipal Committee & Anr(1), where this Court said: ``The object of this Act WAS to ensure that food which the public could buy was inter aha prepared, packed, and stored under sanitary condition so as not to be injurious to the health of the people consuming it".
Section 2.
sub.s.(v) of the Act lays down: "(V) 'food ' means any article used as food or drink for human consumption other than drugs and water and includes (a) any article which ordinarily enters into,or is used in the composition of preparation of human food, and (b) any flavouring matter or condiments"; Hence, where Section 7 prohibits manufacture,sale or storage or distribution of certain types of food` ', it necessarily denotes articles intended for human consumption as food.
It becomes the duty of the prosecution to prove that the article which is the subject matter of an offence is ordinarily used for human consumption as food whenever reasonable doubts arise this question.
It is self evident that certain articles, such as milk, or bread, or butter, or foodgrains are meant for human consumption as food.
These are matters of common knowledge.
Other articles may be presumed to be meant for human consumption from representations made about them or from circumstances in which they are offered for sale.
What is the position in this respect about black Til seeds with which we are concerned here? It is submitted that it is a matter of common knowledge that black Til seeds are not used as food.
Even if this be true, it is not so widely known a fact that we could take judicial notice of it.
It is also urged that, when the case of the appellant, supported by his cash memo, is that the particular black '`Til" seeds where meant to be sold only for pooja for being burnt like incense or thrown into fire in the course of pooja.
it cannot be said that this case had been repelled by the mere statement of the Food Inspector that they can be used as food also.
Such a statement amounted at least to a partial admission that they arc used for Pooja.
Therefore, it is urged, they could have been kept for the purpose of being sold 11 only as a substance used for pooja and not as human food.
It is pointed out that there is nothing in evidence on this .question, to (1) ; @ 755.
332 dislodge the statement of the accused.
We find no evidence on record to show the actual manner in which such seeds are used in the course of Pooja.
Therefore, the view of the High Court that they could be consumed by people after the performance of pooja rests on bare conjecture.
There had to be credible evidence to show that black; til seeds are ordinarily used as food.
If that were so, the burden would have shifted on to the shoulders of the accused to prove that what he had stored was not really food meant for human consumption but an article kept for a special use.
We are left in doubt on this question on the evidence in this case.
We think that the appellant must get the benefit of that doubt.
As already indicated above, we are not impressed by the nature of the evidence led by the prosecution.
We cannot entirely ignore the fact that the signatures of Tambe are absent on all those documents on which they would have been present if Section 10(7) of the Act had been strictly complied with.
We think that it is more likely, for the reasons already given by us, that Tambe was not there ll at all to witness the occurrence.
If that be so, the evidence of the prosecuting Food Inspector, who said that Tambe was there, cannot be implicitly relied upon in this case.
It is quite unsafe to base the appellant 's conviction on such shaky foundations.
Accordingly, we allow this appeal, set aside the conviction and sentence of six months ' rigorous imprisonment and fine of Rs. 1,000/ , and in default, further rigorous imprisonment for two months, imposed upon the appellant.
the appellant who is on bail need not surrender.
His bail bonds are discharged.
The fine, if realised.
shall be refunded to him.
P.M.P. Appeal allowed.
| On the question, whether when a domestic inquiry held by an employer was found by the labour court as violative of the principles of natural justice there Was any duty cast upon that court to give an opportunity to the employer to adduce evidence afresh before it and whether failure to do so would vitiate its ^ HELD: When a case of dismissal or discharge of an employee is referred for industrial adjudication the labour court should first decide as a preliminary issue whether the domestic enquiry has violated the principles of natural justice.
When there was no domestic enquiry or defective enquiry is admitted by the employer, there will be no difficulty.
But when the matter is in controversy between the parties that question must be decided as a preliminary issue.
On that decision being pronounced it will be for the management to decide wether it will adduce any evidence before the labour court.
If it chooses not to adduce any evidence, it will not be thereafter permissible in any proceeding to raise the issue.
Three will be no justification for any party to stall the final adjudication of the dispute by the labour court by questioning it, decision with regard to the preliminary issue when the matter, if worthy, can be agitated even after the final award.
It will be legitimate for the High Court to refuse to intervene at this stage.
[368C E] Workmen of Motipur Sugar Factory (private) Limited vs Motipur Sugar Factory ; Management of Northern Railway Cooperative Society Ltd. vs industrial Tribunal Rajasthan, Jaipur and Anr. ; ; Management of Ritz Theatre (P) Ltd. vs Its workmen ; State Bank of India vs R. K. Jain & OrS. , 777; Delhi Cloth & General Mills Co. vs Ludh Budh Singh and Workmen of Messrs Firestone Tyre & Rubber Company of lndia (P) Ltd. vs Management & Others, , referred to.
|
AL APPELLATE JURISDICTION: Criminal Appeal No. 450 of 1987 From the Judgment and order dated 26.3.1987 of the Allahabad High Court in Habeas Corpus Petition No. 17849 of 1986.
D.K. Garg for the Appellant.
Dalveer Bhandari for the Respondents.
The Judgment of the Court was delivered by B.C. RAY, J.
Special leave granted.
Arguments heard.
This appeal by special leave is directed against the judgment and order of the High Court of Allahabad dated 26th March, 1987 in Habeas Corpus Petition No. 17849 of 1986 dismissing the writ petition and confirming the order of detention passed against the appellant by the District Magistrate, Allahabad.
The respondent No. 2, District Magistrate, Allahabad clamped upon the appellant an order of detention under section 3(2) of the and the appellant was detained at Central Jail, Naini on October 10, 1986.
On the same day the grounds of detention were served on the appellant.
Two grounds of detention mentioned in the grounds of detention are stated hereinbelow: (1) That the appellant on 2.10.1986 threatened the shopkeepers of Khalasi Line locality in order to extort money anc} was saying that appellant could not come for the last auction because the police were present on that occasion and that the shopkeepers bad not given the appellant the money received in the above auction.
Further that the shopkeepers should collect money and give it to the appellant or else the appellant would shoot all of them.
As a result of this the place was terror stricken and the shops and houses closed down.
A report of this incident was made by the picket employed at police station Kydganj, i.e. report No. 38 time 20.
10 dated 2. 10.86.
This was investigated by Dev Shankar, S.I. Of police station Kydganj and the details written in report No. 2 time 00.30 dated 3.
10.86 in the general diary as Case crime No. 248/86, Section 307 I.P.C. and case crime No.249/86, Section 4/5 Explosives Act, Police Station, Kydganj, Allahabad.
131 (2) On 3. 10.
1986, the appellant armed with illegal bombs went towards Uttam Talkies.
Kydganj, Allahabad with the intention of committing serious offence.
On information being received, the police went to arrest the appellant.
That the appellant with the intention to kill lobbed a bomb but the police party escaped it by a hair 's breadth and the bomb exploded.
As a result of this there was a stampede in the public, the doors and windows of the houses and shops closed down, the traffic stopped and the people were terror stricken.
The police arrested appellant on the spot and recovered 3 illegal bombs from the appellant.
The appellant has also been supplied with a copy of a confidential letter written by the Superintendent of Police, Allahabad to District Magistrate, Allahabad dated 9.10.1986.
The said letter was written by the Superintendent of Police on the recommendation of the Station officer, Kydganj, Allahabad on 5.
The appellant has also been supplied with the copy of the report No. 38 in which it is alleged that the appellant threatened the shopkeepers of Khalasi Line in an attempt to extort money.
He was also supplied with the copy of the report which was registered as case crime No. 248 of 1986 under section 307 I.P.C. and case crime No. 249 of 1986 under section 4/5 of the Explosives Act.
The appellant made representation against the grounds of detention before the authorities concerned but his representation was rejected and the order of detention was confirmed.
E The appellant challenged the order of detention by a writ of Habeas Corpus before the High Court of Allahabad on the ground inter alia that the grounds of detention are absolutely vague and there is complete non application of mind by the detaining authority in coming to the subjective satisfaction, that the order of detention passed on the appelant while he was in custody is wholly arbitrary and unwarranted and the two cases disclosed in the grounds of detention relate to law and order problem and not to the disturbance of public order.
The criminal proceedings pending in respect of the case should not have been by passed by taking recourse to the order of detention of the appellant who is already in custody and there was no likelihood nor any possibility of his indulging in activities prejudicial to the maintenance of public order as the appellant has not made any application for bail in the said case.
The detention order has, therefore, been assailed as illegal and bad and so the same is invalid in law.
The High Court after hearing the appellant, by its judgment and H 132 order dated 26th March, 1987 dismissed the writ petition No. 17849 of 1986 holding that the order of detention passed by the detaining authority while the appellant was in jail could not be held to be illegal in the facts and circumstances of the case.
Aggrieved by the said order the instant appeal by special leave was filed in this court.
An affidavit in counter verified by one O.P. Ojha, Station officer, Police Station, Kydganj, Allahabad has been filed.
It has been stated in paragraph 4(iii) of the counter affidavit that the appellant 's history starts from 1955 and he involved himself in a large number of criminal cases.
His name in the history sheet was included by the police.
It has been further stated that out of fear the shopkeepers of the village dare not disclose their names and the people of Khalasi Line dare not depose against the appellant since he is a goonda of the locality and people are afraid of him.
It has been further stated that this is the reason for non appearance of the shopkeepers and others as witnesses.
The first incident dated October 2, 1986 was registered in G.D. No. 38 of the said date and the second incident which occurred on October 3, 1986 was registered as case crime No. 368 of 1986 under section 302/307/120 B, I.P.C.
It has been further stated that these two incidents created terror to the shopkeepers and the people of the locality.
This resulted in a great problem of public order.
It has been stated further that after being convinced of the gravity of the situation created by the appellant and his accomplice, the District Magistrate after fully satisfying himself about the state of affairs, passed the order of detention of the appellant.
It has also been stated that the detention order was passed mainly on the basis of two criminal acts committed by the appellant on October 2 and 3, 1986.
Before passing the detention order the District Magistrate fully satisfied himself of all the conditions for passing a detention order under the .
It has also been stated that it is wrong that the allegations made in the reports dated October 2 and 3, 1986 are false.
The District Magistrate fully satisfied himself after perusing all the records before he passed the order of detention against the appellant.
The cases which have been reported on October 2 and 3, 1986 are pending trial before the Court.
It has also been stated that the order of detention was passed by the District Magistrate on the basis of the information gathered by him from the reports submitted by the police.
It has also been stated that the appellant has already applied for bail in crime case No. 248/86 under section 307 I.P.C. and crime case No. 249/86 under section 4/5 of Explosives Act.
Notices of bail applications in connection with these 133 two cases were served on the State Government prior to the passing of the detention order by the District Magistrate.
The District Magistrate passed the detention order dated October 10, 1986 when the appellant was already in jail on the apprehension that the appellant is likely to be released on bail in the near future and that if the appellant is bailed out, the public order problem will become worse.
The detention order was passed with the object of preventing the appellant from acting in a manner prejudicial to the maintenance of public order.
Hence the detention order is legal in all respects.
The history sheet of crime cases against the appellant has been annexed to the said affidavit.
Before proceeding to consider the case on merits it is relevant to quote the provisions of Section 3 sub section (2) of National security Act, 1980.
3(2):The Central Government or the State Government may, if satisfied with respect to any person that with a view to preventing him from acting in any manner prejudicial to the security of the State.
Or from acting in any manner prejudicial to the maintenance of public order or from acting in any manner prejudicial to the maintenance of supplies and services essential to the community it is necessary so to do, make an order directing that such person be detained.
On a plain reading of Section 3(2) of the said Act it becomes clear that the Central Government or the State Government or the District Magistrate authorised by the State Government in writing may pass an order of detention against a person on being satisfied that with a view to preventing him from acting in any manner prejudicial to the maintenance of public order, it is necessary to make an order directing that such person be detained.
In the instant case the order of detention has been made by respondent No. 2, District Magistrate, on the basis of two criminal cases in respect of two incidents which occurred on October 2 and 3, 1986.
So far as the case being G.D. No. 38 is concerned, allegation was that the appellant was threatening the traders of Khalasi Line who participated in the auction at the fort and he was saying that he could not collect money from them on the last occasion because the police were posted there but in case they did not collect money and give it to him he would shoot all of them.
Because of this terror the shopkeeprs closed the doors and windows of their shops and houses.
The report of 134 this incident was made by the picket employed at police station, Kydganj.
It appears from this report that there are no particulars about the shopkeepers who have been terrorised and threatened for payment of money nor the names of any of the witnesses in whose presence the threat or terror was given and money was demanded, are mentioned at all.
The report is absolutely vague and it is not possible for the detenu to give an effective representation against the aforesaid ground which is one of the constitutional requirement enjoined in Article 22(5) of the Constitution of India.
The second ground which leads to crime case No. 248/86 under section 307 I.P.C. and case crime No. 249 under section 4/5 of Explosives Act and which occurred on October 3, 1986 at about 10 A.M.
On the complaint of Sub Inspector Yatendra Singh through special court, Allahabad also does not disclose any particulars as to the shopkeepers in whose presence the alleged bombs were thrown by the appellant and his associate and who were terrified and panic stricken and put down their shutters, nor the names of any of the witnesses have been mentiond in respect of the said incident.
The meaning of the word 'public order ' has been determined by this Court in the case of Kanu Biswas vs State of West Bengal.
[1972] 3 SSC 83 1.
In this case it has been held that the question whether a man has only committed a breach of law and order or has acted in a manner likely to cause a disturbance of the public order is a question of degree and the extent of the reach of the act upon the society.
Public order is what the French call "order publique" and is something more than ordinary maintenance of law and order.
In the case of Haradhan Saha vs The State of West Bengal and others, [19751 3 SCC 198 this Court has observed that the following principles emerge from the judicial decisions: First: merely because a detenu is liable to be tried in a criminal court for the commission of a criminal offence or to be proceeded against for preventing him from committing offences dealt with in Chapter VIII of the Code of Criminal Procedure would not by itself debar the Government from taking action for his detention under the Act.
Second: the fact that the Police arrests a person and later on enlarges him on bail and initiates steps to prosecute him under the Code of Criminal Procedure and even lodges a first information report may be no bar against the District Magistrate issuing an order under the preventive detention.
135 Third: where the concerned person is actually in jail custody at the time when an order of detention is passed against him and is not likely to be released for a fair length of time, it may be possible to contend that there could be no satisfaction on the part of the detaining authority as to the likelihood of such a person indulging in activities which would jeopardise the security of the State or the public order.
Fourth: the mere circumstance that a detention order is passed during the pendency of the prosecution will not violate the order.
Fifth: the order of detention is a precautionary measure.
It is based on a reasonable prognosis of the future behaviour of a person based on his part conduct in the light of the surrounding circumstances.
This has been followed in Kanchanlal Meneklal Chokshi vs State of Gujarat and others, [ ; wherein it has been observed that: "The ordinary criminal process is not to be circumvented or short circuited by ready resort to preventive detention.
But, the possibility of launching a criminal prosecution is not an absolute bar to an order of preventive detention.
Nor is it correct to say that if such possibility is not present to the mind of the detaining authority the order of detention is necessarily bad.
However, the failure of the detaining authority to consider the possibility of launching a criminal prosecution may, in the circumstances of a case, lead to the conclusion that the detaining authority had not applied its mind to the vital question whether it was necessary to make an order of preventive detention.
Where an express allegation is made that the order of detention was issued in a mechanical fashion without keeping present to its mind the question whether it was necessary to make such an order when an ordinary criminal prosecution could well serve the purpose, the detaining authority must satisfy the Court that question too was borne in mind before the order of detention was made.
If the detaining authority fails to satisfy the Court that the detaining authority so bore the question in mind the Court would be justified in drawing the inference that there was no application of the mind by the detaining authority to the vital question whether it was necessary to preventively detain the detenu.
" 136 In the case of Dr. Ram Manohar Lohia vs State of Bihar and others, [1966] l SCR 709 it has been observed by this Court that: "The contravention of law always affects order but before it can be said to affect public order, it must affect the community or the public at large.
There are three concepts according to the learned Judge (Hidayatullah, J) i.e. ' 'law and order ' ', "public order" and "security of the State ' .
It has been observed that to appreciate the scope and extent of each of them, one should imagine three concentric circles.
The largest of them represented law and order, next represented public order and the smallest represented the security of the State.
An act might affect law and order but not public order just as an act might affect public order but not the security of the State. ' ' As observed in the case of Arun Ghosh vs State of West Bengal, "Public order is the even tempo of the life of the community taking the country as a whole or even a specified locality.
Disturbance of public order is to be distinguished from acts directed against individuals which do not disturb the society to the extent of causing a general disturbance of public tranquility.
It is the degree of disturbance and its effect upon the life of the community in a locality which determines whether the disturbance amounts only to a breach of law and order.
Take for instance, a man stabs another.
People may be shocked and even disturbed, but the life of the community keeps moving at an even tempo, however much one may dislike the act.
Take another case of a town where there is communal tension.
A man stabs a member of the other community.
This is an act of a very different sort.
Its implications are deeper and it affects the even tempo of life and public order is jeopardized because the repercussions of the act embrace large sections of the community and incite them to make further breaches of the law and order and to subvert the public order.
An act by itself is not determinant of its own gravity.
In its quality it may not differ from another but in its potentiality it may be very different.
" This has been followed in the case of Nagendra Nath Mondal vs 137 State of West Bengal; , and Nand Lal Roy alias Nonda Dulal Roy vs State of West Bengal, [ Thus from these observations it is evident that an act whether amounts to a breach of law and order or a breach of public order solely depends on its extent and reach to the society.
If the act is restricted to particular individuals or a group of individuals it breaches the law and order problem but if the effect and reach and potentiality of the act is so deep as to affect the community at large and or the even tempo of the community that it becomes a breach of the public order.
In the case of S.K. Kedar vs State of West Bengal, this Court has observed that : "The question whether a person has only committed a breach of law and order or has acted in a manner likely to cause a disturbance of the public order is one of degree and the extent of the reach of the act upon the society.
An act by itself is not determinative of its own gravity.
In its quality it may not differ from another but in its potentiality it may be very different.
Similar acts in different contexts affect differently law and order on the one hand and public order on the other.
It is always a question of degree of the harm and its effect upon the community.
Public order is the even tempo of the life of the community taking the country as a whole or even a specified locality.
It is the degree of disturbance upon the life of the community which determines whether the disturbance amounts only to a breach of the law and order." This Court has further observed in the case of Ashok Kumar vs Delhi Administration, [ while dealing with the distinction between 'public order ' and 'law and order ' to which one of us is a party that: "The true distinction between the areas of 'public order and 'law and order ' lies not in the nature of quality of the act, but in the degree and extent of its reach upon society.
The distinction between the two concepts of 'law and order ' and 'public order ' is a fine one but this does not mean that there can be no overlapping.
Acts similar in nature but committed in different contexts and circumstances might cause different reactions.
In one case it might affect specific individuals only and therefore touch the problem of law and order.
The act by itself therefore is not determinant of its own gravity.
It is the potentiality of the 138 act to disturb the even tempo of the life of the community which makes it prejudicial to the maintenance of public order.
" On a conspectus of all these decisions it has been observed by this Court in the case of State of U.P. vs Hari Shankar Tewari, [ ; that conceptually there is difference between law and order and public order but what in a given situation may be a matter covered by law and order may really turn out to be one of public order.
One has to turn to the facts of each case to ascertain whether the matter relates to the larger circle or the smaller circle.
An act which may not at all be objected to in certain situations is capable of totally disturbing the public tranquility.
When communal tension is high, an indiscreet act of no significance is likely to disturb or dislocate the even tempo of the life of the community.
An order of detention made in such a situation has to take note of the potentiality of the act objected to.
Thus whether an act relates to law and order or to public order depends upon the impact of the act on the life of the community or in other words the reach and effect and potentiality of the act if so put as to disturb or dislocate the even tempo of the life of the community, it will be an act which will affect public order.
In the present case so far as the first incident which occurred on 2.
10.1986 is concerned, the ground is vague in as much as neither the names of the witnesses in whose presence the threat was given and the incident occurred, have been mentioned.
As regards the second incident which occurred on 3.
10.1986, case crime No. 248 86 under Section 307 I.P.C. and No. 249/86 under Section 4/5 Explosives Act respectively are pending trial.
It is also pertinent to remember in this connection that a case crime No. 200 of 1986 under section 323/504/506/426 I.P.C. read with section 2 3 of the U.P. Gangsters and Anti Social Activities Act No. 4 of 1986 by the police of the police station, Naini, a copy of which was annexed as annexure I to this appeal, was registered against the appellant.
The said case was challenged by an application under section 482 Cr.
P.C. in the High Court.
The said application was admitted on 2.6.1986 and it is pending as Criminal Misc.
Application No. 6638 of 1986.
The High Court while admitting the case had granted stay of arrest of the appellant.
Furthermore, the appellant was taken in custody and he was in jail as an under trial prisoner on October 10.
1986 when the impugned order of detention was clamped upon him by the detaining authority, the respondent No. 2.
The appellant has 139 stated in his appeal before this Court that till date he had not applied for bail in case crime No. 248 1986 under section 307 I.P.C. and case crime No. 249 1986 under section 4/5 of the Explosives Act as well as the case registered in report No. 38 dated October 2, 1986 at police station, Kydganj.
The question is whether there is possibility of the detaining authority to be satisfied that the appellant is likely to indulge in activities prejudicial to the maintenance of public order as there is no likelihood of his being released from jail custody immediately.
This specific question arose in the case of Masood Alam vs Union of India, AIR 1973 (SC) 897 wherein it has been observed that: "The order of detention served upon the detenu while he was in jail is not invalid rendering the petitioner 's detention as void.
There is no legal bar in serving an order of detention on a person who is in jail custody if he is likely to be released soon thereafter and there is relevant material on which the detaining authority is satisfied that if freed, the person concerned is likely to indulge in activities prejudicial to the security of the state or maintenance of public order.
" In the case of Rameshwar Shaw vs District Magistrate, Burdwan & Anr., [ 1 it has been observed that: "The first stage in the process is to examine the material adduced against a person to show either from his conduct or his antecedent history that he has been acting in a prejudicial manner.
If the said material appears satisfactory to the authority, then the authority has to consider whether it is likely that the said person would act in a prejudicial manner in future if he is not prevented from doing so by an order of detention.
If this question is answered against the petitioner, then the detention order can be properly made.
It is obvious that before an authority can legitimately come to the conclusion that the detention of the person is necessary to prevent him from acting in a prejudicial manner, the authority has to be satisfied that if the person is not detained, he would act in a prejudicial manner and that inevitably postulates freedom of action to the said person at the relevant time.
If a person is already in jail custody, how can it rationally be postulated that if he is not detained, h would act in a prejudicial manner? At the point of time when an order of detention is going to be 140 served on a person, it must be patent that the said person would act prejudicially if he is not detained and that is a consideration which would be absent when the authority is dealing with a person already in detention.
The satisfaction that it is necessary to detain a person for the purpose of preventing him from acting in a prejudicial manner is thus the basis of the order under section 3(1)(a), and this basis is clearly absent in the case of the petitioner.
" In the instant case there is nothing to show that in consideration of his previous conduct and acts there.
is a likelihood of the appellant indulging in activities prejudicial] to the maintenance of public order if he is set free and/or released from custody.
It has been observed in the case of Merugu Satyanarayana etc.
vs State of Andhra Pradesh and others, [ ; by this Court that before making an order of detention in respect of a person already confined to jail "it must be present to the mind of the detaining authority that keeping in view the fact the person is already indetention a preventive detention order is still necessary.
The subjective satisfaction of the detaining authority must comprehend the very fact that the person sought to be detained is already in jail or under detention and yet a preventive detention order is a compelling necessity.
If the subjective satisfaction is reached without the awareness of this very relevant fact the detention order is likely to be vitiated.
But as stated by this Court it will depend on the facts and circumstances of each case.
It has further been observed as follows: "We are completely at a loss to understand how a Sub Inspector of Police can arrogate to himself the knowledge about the subjective satisfaction of the District Magistrate on whom the power is conferred by the Act.
If the power of preventive detention is to be conferred on an officer of the level and standing of a Sub Inspector of Police, we would not be far from a Police State.
Parliament has conferred power primarily on the Central Government and the State Government and in some specific cases if the conditions set out in sub section (3) of section 3 are satisfied and the notification is issued by the State Government to that effect, this extra ordinary power of directing preventive detention can be exercised by such highly placed officers as 141 District Magistrate or Commissioner of Police.
In this case the District Magistrate, the detaining authority has not chosen to file his affidavit.
The affidavit in opposition is filed by a Sub Inspector of Police.
Would this imply that Sub Inspector of Police had access to the file of the District Magistrate or was the Sub Inspector the person who influenced the decision of the District Magistrate for making the detention order? From the very fact that the respondents sought to sustain the order by filing an affidavit of Sub Inspector of Police, we have serious apprehension as to whether the District Magistrate completely abdicated his functions in favour of the Sub Inspector of Police.
" In a recent case of Ramesh Yadav vs District Magistrate, Etah and others, AIR 1986 (SC) 3 15 it has been observed that: "It is clear that the order of detention was passed as the detaining authority was apprehensive that in case the detenu was released on bail he would again carry on his criminal activities in the area.
If the apprehension of the detaining authority was true, the bail application had to be opposed and in case bail was granted, challenge against that order in the higher forum had to be raised.
Merely on the ground that an accused in detention as an undertrial prisoner was likely to get bail an order of detention under the should not ordinarily be passed.
We are inclined to agree with counsel for the petitioner that the order of detention in the circumstances is not sustainable and is contrary to the well settled principles indicated by this Court in series of cases relating to preventive detention.
The impugned order, therefore, has to be quashed.
In the instant case the detaining authority, respondent No. 2 has not come forward to file an affidavit stating whether he has taken into consideration the fact that the appellant was already in judicial custody and on considering his past activities he was subjectively satisfied that if set free or released from jail custody on bail, there was likelihood of the appellant indulging in criminal activities endangering public order.
On the other hand, the Station officer of the Police Station, Kydganj, Shri O.P. Ojha has filed a counter stating that the District Magistrate passed the impugned detention order when the appellant was already in jail on the apprehension that the appellant is likely to be released on 142 bail in the near future and if the appellant is bailed out, the public order problem will become worse.
This clearly goes to show that the Sub Inspector has arrogated to himself the knowledge about the subjective satisfaction of the District Magistrate on whom the power is conferred by the Act.
The District Magistrate, the detaining authority in this case has not chosen to file his affidavit.
The affidavit in opposition filed by the Station officer of Police implies that he has access to the file of the District Magistrate or he influenced the decision of the District Magistrate for making the detention order.
This is also clear from the confidential report submitted by the Senior Superintendent of Police, Allahabad to the District Magistrate, Allahabad as well as from the report of the Sub Inspector of Police annexed with the said report wherein it has been specifically stated that it was apprehended that the appellant, Gulab Mehra who is at present in Naini jail and who has applied for bail, if enlarged on bail, public order will be disturbed.
There is nothing to show that there was awareness in the mind of the District Magistrate, the detaining authority of the fact that the appellant was in jail at the time of clamping of the order of detention, and the detaining authority was satisfied in considering his antecedents and previous criminal acts, that there is likelihood of his indulging in criminal activities jeopardizing public order if he is enlarged on bail and that there is every likelihood that the appellant will be released on bail within a short time.
On this ground alone, the order of detention is invalid.
It may also be stated in this connection that the respondents can very well oppose the bail application when it comes for hearing and if at all the appellant is released on bail the respondents are not without any remedy.
They can also file application in revision for cancellation of the bail application.
In such circumstances, we cannot but hold that the passing of the order of detention of the appellant who is already in custody is fully bad and as such the same is invalid in law.
We have already said hereinbefore that the respondents can very well proceed with the criminal case under section 307 of I.P.C., execute it against the appellant and can get him punished if the case is approved beyond doubt against the appellant.
It is pertinent to mention in this connection the case of Abdul Gaffer vs State of West Bengal, AIR 1975 (SC) 1496 wherein the order of detention was passed in respect of three cases registered against the petitioner.
These are as follows: (1) The petitioner along with his associates on 18.7.1971 being armed with deadly weapons like daggers etc.
committed thefts in respect of D.O. plates from the railway yard and on being challenged, pelted stones causing injury to the R.P.F. party.
The R.P.F. party had 143 to open fire but the petitioner and his associates fled away.
A (2) On 25.11.1971 the petitioner along with his associates being armed with deadly weapons committed theft in respect of batteries from empty rakes standing on the railway track.
Being challenged by the R.P.F. party the petitioner and his associates pelted stones.
The R.P.F. party fired two rounds whereby one of his associates was injured and arrested at the spot.
(3) On 20.2.
1972, at Howrah Goods Yard near Oriapara Quarters, the petitioner along with his associates being armed with deadly weapons viz. bombs, iron rods etc.
committed theft of wheat bags from a wagon and on being challenged by the R.P.F. party the petitioner and his associates pelted stones and hurled bombs.
As a result of this act train services on Howrah Burdwan line was suspended for a considerable period.
Three cases were registered in respect of these offences and order of detention was made by the District Magistrate.
The detaining authority, however, did not file an affidavit but his successor in office in response to Rule Nisi issued by the High Court filed the counter.
It has been observed firstly that the detaining authority has not filed the counter affidavit and the return filed in his place by his successor in office does not satisfactorily explain why the prosecution of the petitioner for the substantive offence in respect of which he was arrested and named in the F.I.R. was not proceeded with.
According to the counsel the so called explanation given in the counter that the witnesses being afraid were not coming forward to give evidence was too ridiculous to be believed by any reasonable person.
The Sub Inspector of Police who made the panchnama could certainly not be afraid of giving evidence.
The other material witnesses who could give evidence were the members of the R.P.F. party.
It is a para police organisation.
The bald but sweeping allegation in the counter that these witnesses were also afraid of giving evidence in court against the petitioner is a version which is too incredulous to be swallowed even by an ultra credulous person without straining his credulity to the utmost.
The order of detention was therefore held invalid.
In the instant case the police officers who withnessed the hurling of bombs and the Sub Inspector of Police who recorded the F.I.R. can come forward to give the evidence.
Therefore, in such circumstances, the open statement made in the affidavit of the Sub Inspector of Police that the witnesses are afraid of disclosing their names and coming H 144 forward to give evidence is wholly incredulous and it cannot be accepted.
The prosecution of the appellant for the substantive offences can be properly proceeded with in this case In the case of Sudhir Kumar Saha vs Commissioner of Police, Calcutta & Anr., ; the petitioner along with his associates committed various acts of crime on three occasions.
On the first occasion he attacked the people of a locality with a knife and by hurling bottles at them.
On the other two occasions he attacked the people of another locality, by hurling bomes at them.
It was held that the incidents were not interlinked and could not have prejudiced the maintenance of public order.
On considering these decisions, we are constrained to hold that the clamping of the order of detention is not in accordance with the provision of the Act.
Furthermore, the history sheet does not at all link to the proximity of the two incidents on the basis of which the o order of detention was made.
It has been vehemently urged before us by the learned counsel appearing for the appellant that in none of the cases mentioned in the history sheet the appellant has been convicted and moreover these cases related to a period much earlier than the period in which the two cases have occurred.
It has also been submitted in this connection by the learned counsel for the appellant that the appellant had not been convicted in any of the cases and the submission of the Sub Inspector of Police that the witnesses are afraid of disclosing their names and coming forward to give evidence is wholly incorrect and false in as much as witnesses in fact gave the evidence in a criminal case which ended in acquittal.
It has also been submitted by the learned counsel that the shopkeepers of the locality where the alleged hurling of bombs took place have made an application in this case that no such incident occurred on the said dates.
In the premises, aforesaid, we hold that the impugned order of detention is illegal and invalid and we allow the appeal setting aside the judgment and order of the High Court without any order as to costs.
S.L. Appeal allowed.
| HELD: The order of detention was passed by the respondent No. 2.
District Magistrate, on the basis of two Criminal Cases in respect of two incidents which had occurred on October 2 and 3, 1986.
So far as the case being G.D. No. 38 was concerned, the report of this incident was made by the picket employed at police station, Kydganj.
It appeared from this report that there were no particulars about the shopkeepers who had been terrorised and threatened for payment of money, as alleged in the grounds of detention, nor were mentioned at all the names of any of the witnesses in whose presence the threat or terror was used and money was demanded.
The report was absolutely vague and it was not possible for the detenu to give an effective representation 127 against the ground, which is one of the Constitutional requirements enjoined in Article 22(5) of the Constitution of India.
The second ground, which led to crime case No. 248/86 under section 307, I.P.C., and crime case No. 249/86 under section 4/5 of the Explosives Act and which occurred on October 3, 1986, registered on the complaint of Sub/Inspector Yatendra Singh through special court, Allahabad, also did not disclose any particulars as to the shop keepers in whose presence the bombs alleged were thrown by the appellant, and who were terrified and panic stricken, etc., nor were mentioned the names of any witnesses in respect of the said incident.
[133F, 134A D] The question whether a man has only committed a breach of law and order or has acted in a manner likely to cause a disturbance of the public order, is a question of degree and the extent of the reach of the act upon the Society, as held by this Court in Kanu Biswos vs State of West Bengal, ; , while determining the meaning of 'public order '.
Public order is what the French Call "order Publique" and is something more than ordinary maintenance of law and order.
From the observations of this Court made in many cases, it is evident that whether an act amounts to a breach of law and order or a breach of public order, solely depends upon its extent and reach to the society.
If the act is restricted to particular individuals or a group of individuals, it breaches the law and order problem, but if the effect and reach and potentiality of the act are so deep as to affect the community at large and/or the even tempo of the community, then, it becomes a breach of the public order.
An act, which may not at all be objected to in certain situations is capable of totally disturbing the public tranquillity.
When communal tension is high, an indiscreet act of no significance is likely to disturb or dislocate the even tempo of the life of the community.
An order of detention made in such a situation has to take note of the potentiality of the act objected to.
Thus, whether an act relates to law and order or the public order depends upon the impact of the act on the life of the community, or, in other words, the reach and effect and potentiality of the act, if so put as to disturb or dislocate the even tempo of the life of the community, it will be an act which will affect the public order .
[134D E,137A B. 138B D] In this case, so far as the first incident which occurred on 2.10.1986 was concerned, the ground was vague inasmuch as the names of the witnesses in whose presence the threat was given and the incident occurred, had not been mentioned.
As regards the second incident which occurred on 3.
10.1986, the Crime Case No. 248/86 under section 307, I.P.C. and the Crime Case No. 249/86 under section 4/5 of the Explosive Act, were pending trial.
[138E F] 128 A case crime No. 200 of 1985 under sections 323/504/506/426, l.
P.C., read with section 2/3 of the U.P. Gangsters and Anti Social Activities Act No. 4 of 1986 was registered against the appellant by the police.
That case was challenged by an application under section 482 Cr.
P.C. in the High Court.
The said application was admitted on 2.6.1986 and had been pending.
The High Court had, while admitting the case, granted stay of arrest of the appellant.
The appellant had been taken into custody and was in jail as an undertrial prisoner on October 10, 1986, when the impugned order of detention was clamped upon him.
The appellant stated in this Appeal that till date he had not applied for bail in case crime No. 248/86 and case crime No. 249/86 as well as the case registered in report No. 38 dated October 2, 1986 at the police station Kydganj.
The question was whether there was a possibility of the detaining authority to be satisfied that the appellant was likely to indulge in activities prejudicial to the maintenance of public order as there was no likelihood of his being released from the jail custody immediately.
There was nothing in the case to show that in consideration of his previous conduct and acts, there was a likelihood of the appellant 's indulging in activities prejudicial to the maintenance of public order if he was set free and/or released from custody.
[138F H, 139A B, 140B C] The detaining authority District Magistrate respondent No. 2, had not filed an affidavit stating whether he had taken into consideration the fact that the appellant had already been in the judicial custody and on considering his past activities he had been subjectively satisfied that if set free or released from jail custody on bail, there was a likelihood of his indulging in criminal activities endangering public order.
On the other hand, the Station officer of Kydganj police station, had filed a counter stating that the District Magistrate had passed the impugned detention order when the appellant was already in jail, on the p apprehension that the appellant was likely to be released on bail in the near future and if he was bailed out, the public order would become worse.
This clearly showed that the police officer had arrogated to himself the knowledge about the subjective satisfaction of the District Magistrate on whom the power is conferred by the Act.
The affidavit filed by the station officer of police implied that he had access to the file of the District Magistrate or he influenced the decision of the District Magistrate for making the detention order.
There was nothing to show that there was awareness in the mind of the District Magistrate, the detaining authority, of the fact that the appellant was in jail at the time of the clamping of the order of detention, and the detaining authority was satisfied, in considering his antecedents, that there was a likelihood of his indulging in criminal activities, jeopardising public order if he 129 was released on bail and that there was every likelihood of his being A enlarged on bail within a short time.
On this ground alone, the detention order was invalid.
It might be said in this connection that the respondents could very well oppose the bail application when it came up for hearing, and if at all the appellant was released on bail, the respondents were not without a remedy.
They could file an application for cancellation of the bail.
In the circumstances, it could not but be held that the passing of the order of detention of the appellant who was already in custody was fully bad and invalid in law.
The respondents could very well proceed with the criminal case under section 307, I.P.C., and get the appellant punished if the case was proved beyond doubt against him.
The police officers, who witnessed the hurling of the bombs and the Sub Inspector of police who recorded the F.I.R., could come forward to give evidence.
In the circumstances, the open statement in the affidavit of the Sub Inspector that the witnesses were afraid of disclosing their names and giving evidence, was wholly incredulous and could not be accepted.
[141G H, 142A G, 143G 144A] The clamping of the order of detention was not in accordance with the provisions of the Act.
The history sheet did not at all link to the proximity of the two incidents on the basis of which the detention order had been passed.
[144C D] The impugned order of detention was illegal and invalid.
[144G] E Kanu Biswas vs State of West Bengal, [1972] 3 S.C.C. 831; Haradhan Saha vs The State of West Bengal and Anr. ; ; Kanchanlal Maneklal Chokshi vs State of Gujarat & ors.
; , ; Dr. Ram Manohar Lohia vs State of Bihar & ors.; , ; Arun Ghosh vs State of West Bengal, ; Nagendra Nath Mondal vs State of West Bengal, 11972] 1 S.C.C. 498; Nand Lal Roy alias Nonda Dulal Roy vs State of West Bengal, ; S.K. Kedar vs State of West Bengal, ; Ashok Kumar vs Delhi Administration, ; State of U.P. vs Hari Shankar Tewari, ; ; Masood Alam vs Union of India, A.I.R. 1973 S.C. 897; Rameshwar Shaw vs District Magistrate Burdwan State of Andhra Pradesh & ors.
; , ; Ramesh Yadav vs District Magistrate, Etah and others, A.I.R. 1986 S.C. 315; Abdul Gaffer vs State of West Bengal, A.I.R. 1975 S.C. 1496 and Sudhir Kumar Saha vs Commissioner of Police, Calcutta, ;
|
ION: Criminal Appeal No. 63 of 1960.
Appeal by special leave from the judgment and order dated October 9, 1959, of the Bombay High Court in Criminal Reference No. 94 of 1959.
A. V. Viswanatha Sastri, section N. Andley and Rameshwar Nath, for the appellant.
R. Ganapathy Iyer and R. H. Dhebar, for respondent.
October 27.
The Judgment of Kanpur an Dayal, JJ., was delivered by Dayal J. Subba Rao, J., delivered a separate Judgment.
RAGHUBAR DAYAL, J.
This appeal, by special leave, is directed against the order of the High Court of Bombay, rejecting, the reference made by the additional Sessions Judge, Nasik, and confirming the conviction of the appellant under section 92 of the factories Act, 1948 (Act LXIII of 1948), hereinafter called the Act.
The appellant is the owner and occupier of "Jay Parkash Sudhir Private Ltd., a factory which manufactures bidis.
Pandurang Trimbak Londhe, hereinafter called Pandurang, rolled bidis in that factory for a number of days in 1957.
He ceased to do that work from August 17, 1957.
It was alleged by the prosecution that the appellant terminated Pandurang 's services by a notice put up on August 12, 1957.
The appellant, however, admitted the putting up of such a notice, but denied that Pandurang, the labourer, had left his service of his own accord.
252 Inspector Shinde, P.W.I, visited this factory August on 22, 1957.
He found from the weekly register and the wages register of the Factory that Pandurang worked for 70 days and earned 4 days T. leave.
Pandurang, however, did not enjoy that leave and was therefore entitled to be paid wages for that period i.e., for 4 days ' leave.
He was not paid those wages, and therefore, the appellant contravened the provisions of section 79(11) of the Act.
He consequently submitted a complaint against the appellant to the Judicial Magistrate, First Class, Sinnar.
It was contended for the accused before the Magistrate that Pandurang was not a worker within the meaning of that expression, according to s.2(1) of the Act and that therefore no leave could be due to him and the appellant could not have committed the offence of contravening the provisions of s.79(11).
The learned Magistrate did not agree with the defence contention and held Pandurang to be a worker and convicted the appellant of the offence under 8.
92 read with section 79(11) of the Act and sentenced him to a fine of Rs. 10.
It may be mentioned that this case was a test case.
Similar cases against the appellant with respect to the non payment of leave wages to other workers were pending in the Court.
The appellant went in revision to the Court of the learned Additional Sessions Judge, Nasik.
The Sessions Judge was of the opinion that Pandurang was not a worker and that the conviction of the appellant was bad.
He accordingly referred the case to the High Court.
The High Court, however did not agree with the view of the Sessions Judge and, holding that Pandurang was a worker, rejected the revision and confirmed the conviction and sentence.
It is against this order that this appeal has been filed.
Two points have been raised on behalf of the appellant.
One is that Pandurang was not a 253 worker within the meaning of that expression in the Act.
The other is that even if Pandurang was a worker, he was not entitled to any leave wages under section 80 of the Act.
The first contention is based on the established facts of the case which, it is submitted, do not make out the relationship of master and servant between the appellant and Pandurang, inasmuch as they indicate that the appellant had no supervision and control over the details of the work Pandurang did in the factory.
The following are the established facts: (1) There was no agreement or contract of service between the appellant and Pandurang.
(2) Pandurang was not bound to attend the factory for the work of rolling bidis for any fixed hours of work or for any filed period.
He was free to go to the factory at any time he liked and was equally free to leave the factory whenever he liked.
Of course, he could be in the factory during the hours of working of the factory.
(3) Pandurang could be absent from work on any day he liked.
He could be absent up to ten days without even informing the appellant.
If he was to be absent for more than ten days he had to inform the appellant, not for the purpose of taking his permission or leave, but for the purpose of assuring the appellant that he had no intention to give up work at the factory.
(4) There was no actual supervision of the work Pandurang did in the factory.
(5) Pandurang was paid at filed rates on the quantity of bidis turned out.
There was however no stipulation that he had to turn out any minimum quantity of bidis in a day.
(6) Leaves used to be supplied to Panduarng for being taken home and cut there.
254 Tobacco to fill the bidis used to be supplied at the factory.
Pandurang was not bound to roll the bidis at the factory.
He could do so at his place, on taking permission from the appellant for taking tobacco homes.
The permission was necessary in view of Excise Rules and not on account of any condition of alleged service.
(7) At the close of the day, the bidis used to be delivered to the appellant and bidis not up to the standard, used to be rejected.
The second contention is based on the inapplicability of the provisions of sections 79 and 80 of the Act to the case of the appellant, inasmuch as it is not possible to calculate the number of days he worked or the total full time earnings for the days on which he worked during the relevant period mentioned in section 80.
On behalf of the respondent State, it is submitted that the appellant had the right to exercise such supervision and control over the work of Pandurang as was possible with respect to the nature of Pandurang 's work which was of a very simple kind and that therefore Pandurang was a worker.
It is further urged that there is no difficulty in calculating the number of working days or the total full time earnings contemplated by section 80 of the Act.
We have given very anxious consideration to this case, as the view taken by the Court below in this case had been stated to be the right view in the decision of this Court in Shri Birdhichand Sharma.
The first Civil Judge, Nagpur (1), on which reliance is placed by the respondent.
The fact of that case are distinguished and only some of the facts of that case are similar to some of the facts of this class.
The similar facts are only these: Pandurang as well as the workers in that case could go to the factory (1) ; 255 at any time and leave it at and time, within the filed hours of work and they were paid at piece rates and the bidis below the standard were rejected.
It is to be noticed that the decision in that case is based on facts which do not exist in the present case.
That decision, therefore, is distinguishable and the opinion about the view of the High Court in the present case to be correct, appears to have been expressed without noticing that the facts of this case are different in material respects from the facts of the case this court was deciding.
The decision of that case it based really on the following facts: (1) The alleged workers had to work at the factory.
(2) Their attendance was notes.
(3) If they came to the factory after mid day, they were not given any work and they thus lost wages.
(4) The management had the right to remove them if them stayed away for a continuous period of eight days.
In the present case, Pandurang could work at the house if the appellant permitted tobacco to be taken home.
There is nothing on record to show the attendance is noted.
Of course, the days Pandurang worked could be found out from the work register.
It is not the case here that no work was to be given to Pandurang if he want to the factory after mid day.
There is no allegation that the appellant had the power to remove him, as a result of continued absence for a fixed number of days.
We are therefore of opinion that the decision in Birdhichand 's Case (1) is distinguishable on facts and cannot be applicable to the facts of this (1)[1961] 3 section C.K. 161.
256 The one essential ingredient which should exist to make a person come within the definition of 'worker ' in cl.
(1) of section 2 of the Act is that he be employed in one of the processes mentioned in that Clause.
There is no dispute that the work which Pandurang did came within one of such processes.
The sole question for determination then is whether Pandurang can be said to be employed by the appellant.
This Court, in Shri Chintaman Rao vs The State of Madhya Pradesh (1), said: "The concept of employment involves three ingredients: (1) employer (2) employee and (3) the contract of employment,.
The employs is one who employs, i.e., one who engaged the services of other persons.
The employee is one who works for another for hire.
The employment is the contract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his control and supervision.
" Employment brings in the contrast of service between the employer and the employed.
We have mentioned already that in this case there was no agreement or contract of service between the appellant and Pandurang.
What can be said at the most is that whenever Pandurang went to work, the appellant agreed to supply him tobacco for rolling bidis and that Pandurang agreed to roll bidis on being paid at a certain rate for the bidis turned out.
The appellant exercised no control and supervision over Pandurang.
Further section 85 empowers the State Government to declare that certain provisions of the Act would apply to certain places where a manufacturing process is carried on, notwithstanding the persons therein are not employed by the owner (1) ; , 1346,1349,1350, 1351.
257 thereof but are working with the permission of or under agreement with such owner.
This provision draws a distinction between the person working being employed by the owner and a person working, with the permission of the owner or under agreement with him.
We are of opinion that the foots of this case strongly point to Pandurang 's working with the permission of or under agreement with the owner and not on any term of employment by the owner.
Further, the facts of the case indicate that the appellant had no control and supervision over the details of Pandurang 's work.
He could not control his hours of work.
He could not control his days of work.
Pandurang was free to absent himself and was free to go to the factory at any time and to have it at any time according to his will.
The appellant could not insist on any particular minimum quantity of bidis to be turned out per day.
He could not control the time spent by Pandurang on the rolling of a bidi or a number of bidis.
The work of rolling bidis may be a simple work and may require no particular supervision and direction During the process of manufacture.
But there is nothing on record to show that any such direction could be given.
In this connection reference may again be made to the observation at page 1349 in Shri Chintaman Rao 's Case.
The Court was considering whether the Sattedars were workers or were independent contractors Sattedars used to receive tobacco from the management and supply them rolled bidis.
They could manufacture bidis outside the factory and should also employ other labour.
It was in these facts, that it was said: "The management cannot regulate the manner of discharge of his work.
" In the present case too, Pandurang used to be supplied tobacco.
He could turn out as many bidis (1)[1958] section C. R. 1340, 1346, 1349, 1350, 1351.
258 as he liked and could deliver them to the factory when he wanted to cease working.
During his period of work, the management could not regulate the manner in which he discharged his work.
He could take his own time and could roll in as many bidis as he liked.
His liability under the daily agreement was discharged by his delivering the bidis prepared and the tobacco remaining with him unused.
The appellant could only order or require Pandurang to roll the bidis, using the tobacco and leaves supplied to him, but could not order him as to how it was to be done.
We are therefore of opinion that the mere fact that the person rolling bidis has to roll them in a particular manner can hardly be said to give rise to such a right in the management as can be said to be a right to control the manner of work.
Every worker will have to turn out the work in accordance with the specifications.
The control of the management, which is a necessary element of the relationship of master and servant, is not directed towards providing or dictating the nature of the article to be produced or the work to be done, but refers to the other incidents having a bearing on the process of work the person carries out in the execution of the work.
The manner of work is to be distinguish.
ed from the type of work to be performed.
In the present case, the management simply says that the labourer is to produce bidis rolled in a certain form.
How the labourer carries out the work is his own concern and is not controlled by the management, which is concerned only with getting bidis rolled in a particular style with certain contents.
Further, this Court, in Shri Chintaman Rao 's Case (1)examined the various provisions of the Act and then said: "The scheme of the aforesaid provisions indicates that the workmen in the factory are under the direct supervision and control of the management.
The conditions of service (1) , 1346, 1349, 1350, 1951.
259 are statutorily regulated and the management is to conform to the rules laid down at the risk of being penalised for dereliction of any of the statutory duties.
The management obviously cannot fix the working hours, weekly holidays, arrange for night shifts and comply with other statutory requirements, if the persons like the Sattedars, working in their factories and getting their work done by others or through coolies, are workers within the meaning of the Act.
It is well high impossible for the management of the factory to regulate their work or to comply with the mandatory provisions of the Act.
The said provisions, therefore, give a clear indication that a worker under the definition of the Act is a person who enters into a contract of service under the management and does not include an independent contractor or his coolies or servants who are not under the control and supervision of the employer.
" It can be said, in the present case too, that the appellant could not fix the working hours or weekly holidays or asked arrangements for night shifts and comply with other statutory requirements, if Pandurang be held to be a worker within the meaning of the Act.
We are therefore of opinion that Pandurang was not a worker.
It is true, as contended for the State, that persons engaged to roll his on job work basis could be workers, but only such persons would be workers who work regularly at the factory and are paid for the work turned out during their regular employment on the basis of the work done.
Piecerate workers can be workers within the definition of 'worker ' in the Act, but they must be regular workers and not workers who come and work according to their sweet will.
It is also true, as urged for the State that a worker, within the 260 definition of that expression in the Act, need not be a whole time worker.
But, even then, the worker must have, under his contract of service, an obligation to work either for a fixed period or J. between fixed hours.
The whole conception of service does not fit in well with a servant who has full liberty to attend to his work according to his pleasure and not according to the orders of his master.
We may say that this opinion further finds support from with we hold on the second contention.
If Pandurang was a worker, the provisions about leave and leave wages should apply to him.
We are of opinion that they do not and what we may in that connection reinforces our view that Pandurang was not a worker as the three criteria and conditions laid down in Shri Chintaman Rao 's Case (1) for constituting him as such are not fulfilled in the present case.
Before discussing the provisions of ss.79 and 80 of the Act.
which deal with leave and wages for leave, we would like to state that the terms on which Pandurang worked, did not contemplate any leave.
He was not in regular employ.
He was given work and paid according to the work he turned out.
It was not incumbent on him to attend to the work daily or to take permission for absence before absenting himself.
It was only when he, had to absent himself for a period longer than ten days that he had to inform the management for administrative convenience, but not with a view to take leave of absence.
Section 79 provides for annual leave with wages and section 80 provides for wages during leave period.
It is on the proper construction of the provision of these sections that it can be said whether the appellant contravened the provisions of sub section
(11) of 8. 79 of the Act and committed the offence under s.92 of the Act.
(1) ; , 1346, 1349,1350, 1351.
261 Sub section (1) of section 79 reads: "(1) Every worker who has worked for a period of 240 days or more in factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of (1) if an adult, one day for every twenty days of work performed by him during the previous calendar year; (ii) if a child, one day for every fifteen days of work performed by him during the previous calendar year.
Explanation 1.
For the purpose of this sub section (a) any days of lay off, by agreement or contract or as permissible under the standing orders, (b) in the case of a female worker, maternity leave for any number of days not exceeding twelve weeks; and (c) the leave earned in the` year prior to that in which the leave is enjoyed; shall be deemed to be days on which the worker has worked a factory for the purpose of computation of the period of 240 days or more, but shall not earn leave for these days.
Explanation 2.
The leave admissible under this sub section shall be exclusive of all holidays whether occurring during or at either end of the period of leave.
" It is clear that this applies to every worker.
If it does not apply to any type of person working in the factory, it may lead to the conclusion that the person does not come within the definition of the word 'worker '.
262 The worker is to get leave in a subsequent year when he has worked for a period of 240 days or more in the factory during the previous calendar year.
Who can be said to work for a period of J. 240 days? According to cl.
(e) of 8. 2, 'day ' means a period of twenty fore hours beginning at mid night.
Section 51 lays down that no adult worker shall be required or allowed to work in a factory for more than forty eight hours in any week, and, according to section 54, for not more than nine hours in any day.
Section 61 provides that there shall be displayed and correctly maintained in every factory a notice of periods of work for adults showing clearly for every day the periods during which adult worker may be required to work and that such periods shall be fixed beforehand and shall be such that workers working for those periods would not be working in contravention of any of the provisions of sections 51, 52, 54, 55, 56 and 58.
Section 63 lays down that no adult worker shall be required or allowed to work in any factory otherwise than in accordance with the notice of periods of work for adults displayed in the factory.
A 'day ', in this context, would mean a period of work mentioned in the notice displayed.
Only that worker can therefore be said to work for a period of 240 days, whose work is controlled by the hours of work he is required to put in, according to the notice displayed under section 61.
Pandurang was not bound to work for the period of work displayed in the factory and therefore his days of work for the purpose of section 79 could not be calculated.
It is urged for the State that each day on which Pandurang worked, whatever be the period of time that he worked, would count as one day of work for the purpose of this section.
We do not agree with this contention.
When the section provides for leave on the basis of 263 the period of working days, it must contemplate a definite period of work per working day and not any indefinite period for which a person may like to work on any particular day.
Section 80 provides for the wages to be paid during the leave period and its sub s.(1)reads: "For the leave allowed to him under section 79, a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the confessional sale to the worker of foodgrains, and other articles.
" The question is how the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave is to be calculated.
It is necessary for the calculation of the rate of wages on leave, to know his, total 'full time earnings, ' for the days he had worked during the relevant month.
What does the expression 'total full time earnings ' mean? This expression is not defined in the Act.
It can only mean the earnings he earns in a day by working full time of that day, full time to be in accordance with the period of time given in notice displayed in the factory for a particular day.
This, is further apparent from the fact that any payment for overtime or for bonus is not included in computing the total full time earnings Full time ', according to Webster 's International Dictionary, means the amount of time considered the normal or standard amount or working during a given period, as a day? week or month '.
264 In Words & Phrases, Permanent Edition, published by West Publishing Co., Vol. 17, with regard to the expression 'Full time ' it is stated: In an industrial community, term 'full time ' has acquired definite significance recognized by popular usage.
Like terms 'part time ' and 'over time ' it refers to customary period of work; and all these terms assume that a certain number of hours per day or days per week constitute respectively a days or week 's work within a given industry or factory.
" It is also stated at page 791: " 'Full time ' as basis for determination of average weekly wages of injured employee means time during which employee is offered employment, excluding time during which he has no opportunity to work.
" We are therefore of opinion that there can be no basis for calculating the daily.
average of the worker 's total full time earnings when the terms of work be as they are in the present case and that therefore the wages to be paid for the leave period cannot be calculated nor the number of days for which leave with wages can be allowed be calculated in such a case.
It does not appear from the record, and it is not likely, that any period of work is mentioned in the notice displayed under section 61, with respect to such workers who can come at any time they like and go at any time they like and turn out as much work as they like.
For the reasons stated above, we are of opinion that the conviction of the appellant for an offense under section 92; read with section 79(11) of the Act is wrong.
We accordingly set aside the order of the Court below and acquit the appellant.
Fine, if paid, will be refunded.
265 SUBBA RAO, J. I have had the advantage of perusing the judgment Prepared by my learned brother day, J. I regret my inability to agree.
The question raced in this appeal is directly covered by the judgment of this Court in Birdhi Chand, Sharma vs First Civil Judge, Nagpur (1).
As my learned brother has taken a different view, I propose to give reasons for my conclusion.
This appeal by special leave is directed against the judgment of the High Court of Bombay in Criminal Reference No. 94 of 1955 made by the Additional Sessions Judge.
Nasik, under section 438 of the Code of Criminal Procedure, and it raises the question of interpretation of some of the provisions of the (63 of 1948), (hereinafter referred to as the Act).
The appellant is the owner of a factory named ' 'Jay Parkash Sudhir Private Ltd." engaged ill the manufacture of bidis.
He engaged 60 persons for the work of rolling bidis in his factory.
On August 12, 1267, the appellant issued a notice to the said persons terminating their services with effect from August 17, 1957.
On August 22, 1957, the Inspector of Factories paid a visit to the factory found that one of the said persons by name Pandurang Trimbak had worked for 70 days in the factory and had earned leave for 4 days which he had not enjoyed nor was he paid wages in lieu of the leave before his discharge.
It is not disputed that the position in regard to the other 59 persons is also similar.
The Inspector of Factories filed 60 complaints against the appellant in the Court of the Judicial Magistrate, First Class, Sinnar, For infringing the provisions of section 79(2) of the Act.
The Magistrate found to appellant guilty and convicted and sentenced him to pay a fine of Rs. 10 On revision, the learned Additional Sessions Judge, Nasik, taking the view that the convection should be quashed.
referred the matter (1) ; 266 to the High Court under section 438 of the Code of Criminal Procedure.
A division bench of the a High Court, on a consideration of the facts found the material provisions of the Act and the relevant decisions cited, come to the conclusion that a person rolling bidis in a factory is a "worker" within the meaning of B. 2(1) of the Act and on that basis upheld the order of conviction and sentence passed by the learned Magistrate.
Hence this appeal.
Learned counsel for the appellant contends that the persons rolling bidis in the factory are not "workers" within the meaning of the Act, as the said persons can come any day they like, work as they like and, therefore, they cannot be said to by employed by the manufacturer under the Act.
Alternatively he argues that even if they were ' 'workers", section 79 of the Act, which deals with the question of leave with wages, cannot apply to a worker who is paid wages according to the quantity of work done by him and not per day or par week.
At the outset it would be convenient to ascertain exactly how these persons rolling bidis are engaged by the appellant and how they work ill the factory.
Admittedly, Pandurang Trimbak and other 59 persons were engaged by the appellant for rolling bidis in his factory.
The registers maintained by the factory, namely, weekly register and wages register, had on their rolls the names of the said persons as labourers for doing the said work.
It is also common case that the said persons attend the factory and roll bidis in the premises of the factory during the working hours of the factory.
Leaves are supplied to the labourers on the previous day, which they cut in their houses after dipping them in water, and on the neat day, when they go to the factory, tobacco is given to them.
After they make the bidis the matter verifies whether they are according to the sample.
Those that are not according to the sample are rejected.
Thereafter the quantity of 267 bidis rolled by each labourer is entered in the bidi map register maintained by the factory.
D. W. 1 is a gumasta and general supervisor in the factory.
He supervises the work of the man who supplies tobacco.
He enters the quantity of bidis rolled by each labourer against his name in the register and if a labourer is absent, his absence is noted against his name in the said register.
The labourers are paid at the rate of Rs. 2 2 O, or such other rate as agreed by them, per thousand bidis rolled.
So far there is no difference between a labourer working in the appellant 's factory and a labourer working in any other factory.
Just like any other manufacturer, the appellant engages the labour, allots work for them and extracts work from them and pays them wages for the work so done.
Now let us look at the differences between the labourers in a bidi factory and those in other factories on which much emphasis is laid by learned counsel for the appellant.
P. W. 1, the Inspector of Notified Factories, says that during their working in the factory, there, is no supervision over them.
P. W. 2, Pandurang Trimbak, admits in the cross examination that during the factory hours he used to work in the factory of the appellant at any time and go at any time.
He further states that they can sit at any compartment of the factory and there is no compulsion on the labourer to do a minimum quantity of work every day and that the permission of the master is required only if a labourer wants to absent for more than ten days or when he wants to bind bidis in his house.
D. W. 1, the gumasta and supervisor in the factory, also says that a labourer can leave the factory in the midst of work after giving the finished product and after returning the tobacco.
He says that at the time of receiving the finished goods, he verifies whether the goods are according to sample and then makes the requisite entries in 268 the register.
What emerges from this evidence is that there in no supervision in the sense that nobody regulary watches their work from start to finish giving directions, if and when required.
But the labourers understand that the bidis to be rolled in by them shall accord with the sample and, therefore, they roll the bidis to accord with that sample.
The names of persons that are absent, the quantity of tobacco issued to each of the labourer, and the number of bidis rolled by each of them are entered in the appropriate registers.
The rejected bidis are given way to the labourers; it cannot obviously mean that dereliction of duty is rewarded but it only shows that the rejected bidis are insignificant in number.
In short, the appellant engages a labourer, extracts work from him, pays him wages in accordance with the quantity of bidis rolled by him, and exercises a right of supervision as the nature of the work requires.
With this background let us look at the definition of "worker ' in section 2(1) of the act ' 'Worker" is defined to mean ' 'a person employed, directly or through agency, whether for wages or not in any manufacturing process.
"Under this definition, a person employed in a manufacturing process in a worker.
The question raised in this case turns upon the interpretation of the word 'employed" in the definition.
This Court in Chintaman Rao vs State of Madhya Pradesh ( '1A) defined the word ' 'employed" thus: "The concept of employment involves three ingredients: (1) employer (2) employee and (3) the contract of employment.
The employer is one who employs, i.e., one who engages the services of other persons.
The employee is one who works for another for hire.
The employment is the contract of (1A) ; , 1346.
269 service between the employer and the employee whereunder the employee agrees to s serve the employer subject to his control and supervision.
" In making out the distinction between an employer and an independent contractor, this court in the above case quoted the following observations of Bhagwati J, in Dharangadhara Chemical Works Ltd .
vs State of Saurashtra (1): "The test which is uniformly applied in order to determine the relationship is the existence of a right of control in respect of the manner in which the work is to be done.
" The some view was reiterated.
by this Court in The State of Kerala vs V.M. Patel (2).
That was a case where 23 persons were employed in the process of garbling pepper and packing them in bags.
Hidayatullah, J."speaking for the Court stated: "It was observed that, to determine whether a person was a '"worker", the proper test was to see whether or not the "employer" has control and supervision over the manner in which the work was to be done".
Adverting to the distinction between an independent contractor and a servant, the learned Judge proceeded to state: "An independent contractor is charged with a work and has to produce a particular result; but the manner in which the result is to he achieved left to him.
A servant, on the other hand may also be charged with the work and asked to produce a particular result, but is subject to the directions of the matter as to the manner in which tho result is to be achieved." (1) [1957] S.C.R.152,157.
(2) Criminal Appeal No. 42 of 1959 decided on 12 10 60.
270 This decision also emphasized that a right to control or supervise is one of the tests for determining the relationship of master and servant.
In this context a judgment of the Madras High Court in Palaniappa vs Court of Additional First Class Magistrate, Kulitalai (1) is strongly relied upon on behalf of the appellant.
There, the petitioner was the owner of a weaving concern at Karur.
He had put up a thatched shed where he had installed a certain number of handlooms and where towels and bed sheets were manufactured.
His office consisted of only two clerks, who were this permanent members of his establishment.
Some of the residents of the village, most of whom were agriculturists, but who knew waving used to go to the petitioner 's shed when they had e, and when they felt inclined to do to and they were supplied with yarn.
These, they wove into bed sheets and towels and they were paid at certain rates for the articles they wove.
These persons came in and went out when they liked.
On those facts, Balakrishna Ayyar, J., held that they were not "workers" within the definition of the word '"worker" in the .
After considering the relevant decisions cited and after distinguishing the cases arising under the Industrial Disputes Act, the learned Judge proceeded to state thus: "An examination of these decision confirms what one was inclined to suspect at the outset, viz., that "employed" is a word with a varying content of meaning and that it signifies different things in different places . . .
On the other hand, when we say that X is employed by Y we ordinarily imply that Y remunerates X for his services and that he has a certain measure of control over his time and skill and labour.
But the degree and extent of conrlto may be nominal or extensive . . . . (1) I.L.R. , 1009, 1010.
271 In between lie infinite grades of control and supervision.
But a certain amount of supervision or control is necessarily implied in the connotation of the word `employed '.
" Having said that, the learned Judge graphically describes the relationship between the parties thus: "The worker can come any day he likes, work as long as he likes or as short as he likes and go away.
He may work fact or he may work slow.
The petitioner cannot tell him that he should work on towels and not on bed sheets or vice versa. . . .
And, more important of all the petitioner cannot prevent anybody from working for a competing manufacturer.
Come when you like, go when you like, work when you like, stop when you like, work as fast as you like, work as slow as you like, work on what you like or not at all, that the position of the workers vis a vis the petitioner.
Such persons cannot, in my opinion, be said to be 'employed ' by the petitioner within the meaning of clause (1) of section 2 of the .
" It is not necessary to express our opinion whether the conclusion of the learned Judge on the facts of that case is correct or not.
But the principle accepted by him, namely, that a certain amount of supervision or control is necessarily implied in the connotation of the word "employed", has been accepted by this Court in earlier decisions and this decision is only an application of that principle to a different set of facts.
The present case falls to be decided on its peculiar facts.
As we have pointed out, though there is some laxity in the matter of attendance, it cannot be said that the appellant has no right of supervision or control over the labourers working in the factory or does not supervise to the extent required having regard to the nature of the 272 work done in the factory.
All the necessary 'ingredients of the word "employed" are found in the case.
The appellant engages the labourers, he entrusts them with work of rolling bidis in accordance with the sample, insists upon their working in the factory, maintains registers giving the particulars of the labours absent, amount of tobacco supplied and the number of bidis rolled by each one of them, empowers the gumasta and supervisor, who regularly attends the factory, to supervise the supply of tobacco and leaves and the receipt of the bidis rolled.
The nature and pattern of bidis to be rolled is obviously well understood, for it in implicit in requirement that the rolled in bidis shall accord with the sample.
The rejection of bidis found not in accord with the sample is a clear indication of the right of the employer to dictate the manner in which the labourers shall manufacture the bidis.
Supposing a worker uses more quantity of tobacco than a bidis is, expected to contain, it cannot be suggested that the supervisor cannot tell him that he shall not do to.
If he spoils the leaves, which he in not expected to do, it cannot be said that the labourer cannot be pulled up in the direction.
So too, the supervisor can certainly compel the labourers to work in a specified portion of the factory or direct them to keep order a rid discipline in the course of the discharge of their duties.
The fact that they cannot take the tobacco outside the factory without the leave of the management shows that they are subject to the supervision of the management.
The circumstance that they cannot absent them selves for more than 10 days without the permission of the appellant also is a pointer in that direction.
That a labourer is not compelled to work throughout the working hours is not of much relevance, because, for all practical purpose, a labourer will not do so since his wage depends upon the bidis he rolls, and, as he cannot roll them outside the factory, necessarily 273 he will have to do so in the factory.
If he absents himself, it is only at his own risk.
For all the aforesaid reasons I hold that all the ingredients of the word " 'employed", as laid down by this Court are present in this case, and therefore the labourers are workers within the meaning of section 2(1) of the Act.
The next contention of learned counsel for the appellant was that even if the labourers in the factory were workers within the meaning of the Act, section 79 thereof would not apply to them and, therefore, there could not have been any contravention of that section.
The material part of section 79 of the Act reads: "Every worker who has worked for a period of 240 days or more in a `factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of (1) if an adult, one day for every twenty days of work performed by him during the previous calendar year;. ".
Section 80 says, (1) "For the leave allowed to him under section 79,a worker shall be paid at a rate equal to the daily average of his total full time earnings for the days on which he worked during the month immediately preceding his leave, exclusive of any overtime and bonus but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of foodgrains and other articles " The argument is that SS. 79 and 80 have to be read together and that 8. 79 cannot be applied to a worker to whom section 80 does not apply.
Section 80, the argument proceeds, entitles a worker for 274 leave allowed to him under section 79 to be paid at a rate equal to the daily average of his total full time earnings for the days for which he worked during the month immediately preceding his leave and that as the workers in question had the option to work for the full day or part of the day, the words "full time earnings" would not apply to them.
This argument, though at first blush appears to be plausible, on a deeper scrutiny reveals that it is unsound.
The following words stand out in section 80(1) full time earning and (ii) days.
"Day" has been defined in section 2(e) to mean '"a period of twenty four hours beginning at midnight".
It cannot be suggested, and it is not suggested, that " 'full time earnings" for a day means earnings made during all the twenty four hours.
Such a contention cannot be raised for the reason that the provision of the restrict the number of hours of work during the day of twenty four hours.
Under section 51 of the Act, '"No adult worker shall be required or allowed to work in a factory for more than forty eight hours in one week", and under a 54, "Subject to the provisions of section 51, no adult worker shall be required or allowed to work in a factory for more than nine hours in any day".
A combined reading of these two sections indicates that subject to the maximum period of working hours fixed for a week, no worker shall be allowed to work for more than a hours a day.
For the purpose of calculation of wages during the leave period under section 80, the full time earnings for a day can be taken to mean the amount earned be a worker for the daily hours of work field for a factory.
In the instant case it is admitted that the working hour for the factory are filed and the workers are entitled to work throughout the working hours, though they can leave the factory during those hours if they choose to do so.
But they cannot be prevented from working for all the hours fixed for the factory and they are entitled 275 to be paid their wages on the basis of the number of bidis rolled by them.
The wages earned by them during the working hours of the factory would be their full time earnings for the day.
If so, there cannot be any difficulty for the management to ascertain the rate under B. 80 of the Act for the payment of wages during the leave period, for under that section the management would have to pay at a rate equal to the daily average of their total full time earnings for the days they worked.
The factory registers would show the total full time earnings of each worker for the days during the month immediately preceding his leave.
The average shall be taken of the earnings of those days and the daily average of those earnings would be the criterion for fixing the wages during the leave period.
I cannot, therefore, say that section 79 of the Act by its impact on section 80 thereof makes it inapplicable to a worker of the category with which we are now concerned.
This argument, therefore, is rejected.
No other question was raised before us.
In the result, the appeal fails and is dismissed.
By Court.
In accordance with the opinion of the majority the appeal is allowed, the order of the Court below set aside and the appellant acquitted.
Fine, if paid, will be refunded.
Appeal allowed.
| The respondents carried on business of extraction of oil from oil seeds.
The appellant Municipality charged octroi duty at Rs. 4 11 0 percent ad valorem under item 44 of the schedule of goods attached to the Rules framed by the Municipality.
The respondent 's case was that they were liable to pay octroi under item 4 of the said Rules at the rate of 2 as.
per maund.
The schedule consisted of eight classes with 67 items of goods, the serial number running consecutively.
Class I was headed "Articles of food or drink or use for men or animals".
Item 4, which was in that class, read "oil seeds every description not specifically mentioned else where".
Class V was headed "Drugs, spices and gums, toilet requisites and perfumes" and item 44 which was in that class read "betel nuts, gums, spices, sarso etc.
and known as kirana" (groceries). 'I`he single Judge who heard the matter in the first instance held in favour of the appellant but the court of appeal held in favour of the respondent.
^ Held, that the view taken by the Court of appeal must be upheld.
The words not specifically mentioned elsewhere" in item 4 of the Schedule must mean mention as an oil seed.
The words "known as Kirana" in item 44 clearly indicated that sarso fell within its ambit only as a spice or as Kirana and not as an oil seed.
Although there could be no doubt that sarso as an oil seed was the same thing as Kirana, but the intention behind the bye law to charge oil seeds at a lesser rate was clear and must be given effect to.
|
Appeal No. 517 of 1958.
Appeal from the judgment and order dated October 31, 1957, of the Kerala High Court in O. P. No. 215 of 1957.
G. B. Pai and Sardar Bahadur, for the appellant.
Hardyal Hardy and D. Gupta, for the respondents.
November 29.
The Judgment of the Court was delivered by SHAH, J.
C. A. Abraham hereinafter referred to as the appellant and one M. P. Thomas carried on business in food grains in partnership in the name and style of M. P. Thomas & Company at Kottayam.
M. P. Thomas died on October 11, 1949.
For the account years 1123, 1124 and 1125 M.E. corresponding to August 1947 July 1948, August 1948 July 1949 and August 1949 July 1950, the appellant submitted as a partner returns of the income of the firm as an unregistered firm.
In the course of the assessment proceedings, it was discovered that the firm had carried on transactions in different commodities in fictitious names and had failed to disclose substantial income earned therein.
By order dated November 29, 1954, the Income Tax Officer assessed the suppressed income of the firm in respect of the assessment year 1124 M.E. under the Travancore Income Tax Act and in respect of assessment years 1949 50 and 1950 51 under the Indian Income Tax Act and on the same day issued notices under section 28 of the Indian Income Tax Act in respect of the years 1949 50 and 1950 51 and 767 under section 41 of the Travancore Income Tax Act for the year 1124 M.E., requiring the firm to show cause why penalty should not be imposed.
These notices were served upon the appellant.
The Income Tax Officer after considering the explanation of the appellant imposed penalty upon the firm, of Rs. 5,000 in respect of the year 1124 M. E., Rs. 2,O00 in respect of the year 1950 51 and Rs. 22,000 in respect of the year 1951 52.
Appeals against the orders passed by the Income Tax Officer were dismissed by the Appellate Assistant Commissioner.
The appellant then applied to the High Court of Judicature of Kerala praying for a writ of certiorari quashing the orders of assessment and imposition of penalty.
It was claimed by the appellant inter alia that after the dissolution of the firm by the death of M. P. Thomas in October, 1949, no order imposing a penalty could be passed against the firm.
The High Court rejected the application following the judgment of the Andhra Pradesh High Court in Mareddi Krishna Reddy vs Income Tax Officer, Tenali (1).
Against the order dismissing the petition, this appeal is preferred with certificate of the High Court.
In our view the petition filed by the appellant should not have been entertained.
The Income Tax Act provides a complete machinery for assessment of tax and imposition of penalty and for obtaining relief in respect of any improper orders passed 'by the Income Tax authorities, and the appellant could not be permitted to abandon resort to that machinery and to invoke the jurisdiction of the High Court under article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Tribunal.
But the High Court did entertain the petition and has also granted leave to the appellant to appeal to this court.
The petition having been entertained and leave having been granted, we do not think that we will be justified at this stage in dismissing the appeal in limine.
On the merits, the appellant is not entitled to relief.
The Income Tax Officer found that the appellant had, with a view to evade payment of tax, (1) 768 deliberately concealed material particulars of his income.
Even though the firm was carrying on transactions in food grains in diverse names, no entries in respect of those transactions in the books of account were posted and false credit entries of loans alleged to have been borrowed from several persons were made.
The conditions prescribed by section 28(1)(c) for imposing penalty were therefore fulfilled.
But says the appellant, the assessee firm had ceased to exist on the death of M. P. Thomas, and in the absence of a provision in the Indian Income Tax Act whereby liability to pay penalty may be imposed after dissolution against the firm under section 28(1)(c) of the Act, the order was illegal.
Section 44 of the Act at the material time stood as follows: "Where any business,. carried on by a firm. has been discontinued . every person who was at the time of such discontinuance . a partner of such firm,. shall in respect of the income, profits and gain of the firm be jointly and severally liable to assessment under Chapter IV for the amount of tax payable and all the provisions of Chapter IV shall, so far as may be, apply to any such assessment.
" That the business of the firm was discontinued because of the dissolution of the partnership is not disputed.
It is urged however that a proceeding for imposition of penalty and a proceeding for assessment of income tax are matters distinct, and section 44 may be resorted to for assessing tax due and payable by a firm business whereof has been discontinued, but an order imposing penalty under section 28 of the Act cannot by virtue of section 44 be passed.
Section 44 sets up machinery for assessing the tax liability of firms which have discontinued their business and provides for three consequences, (1) that on the discontinuance of the business of a firm, every person who was at the time of its discontinuance a partner is liable in respect of income, profits and gains of the firm to be assessed jointly and severally, (2) each partner is liable to pay the amount of tax payable by the firm, and (3) that the provisions of Chapter, so far as may be, apply to such assessment.
The liability declared by section 44 is 769 undoubtedly to assessment under Chapter IV, but the expression "assessment" used therein does not merely mean computation of income.
The expression "assessment" as has often been said is used in the Income Tax Act with different connotations.
In Commissioner of Income Tax, Bombay Presidency & Aden vs Khemchand Ramdas (1), the Judicial Committee of the Privy Council observed: "One of the peculiarities of most Income tax Acts is that the word "assessment" is used as meaning sometimes the computation of income, sometimes the determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer.
The Indian Income tax Act is no exception in this respect. . ".
A review of the provisions of Chapter IV of the Act sufficiently discloses that the word "assessment" has been used in its widest connotation in that chapter.
The title of the chapter is "Deductions and Assessment".
The section which deals with assessment merely as computation of income is section 23; but several sections deal not with computation of income, but determination of liability, machinery for imposing liability and the procedure in that behalf.
Section 18A deals with advance payment of tax and imposition of penalties for failure to carry out the provisions there in.
Section 23A deals with power to assess individual members of certain companies on the income deemed to have been distributed as dividend, section 23B deals with assessment in case of departure from taxable territories, section 24B deals with collection of tax out of the estate of deceased persons; section 25 deals with assessment in case of discontinued business, section 25A with assessment after partition of Hindu Undivided families and sections 29, 31, 33 and 35 deal with the issue of demand notices and the filing of appeals and for reviewing assessment and section 34 deals with assessment of incomes which have escaped assessment.
The expression "assessment" used in these sections is not used merely in the sense of computation of income and there is in our judgment no ground for holding (1) 770 that when by section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof.
Nor has the expression, "all the provisions of Chapter IV shall so far as may be apply to such assessment" a restricted content: in terms it says that all the provisions of Chapter IV shall apply so far as may be to assessment of firms which have discontinued their business.
By section 28, the liability to pay additional tax which is designated penalty is imposed in view of the dishonest contumacious conduct of the assessee.
It is true that this liability arises only if the Income tax Officer is satisfied about the existence of the conditions which give him jurisdiction and the quantum thereof depends upon the circumstances of the case.
The penalty is not uniform and its imposition depends upon the exercise of discretion by the Taxing authorities; but it is imposed as a part of the machinery for assessment of tax liability.
The use of the expression "so far as may be" in the last clause of section 44 also does not restrict the application of the provisions of Chapter IV only to those which provide for computation of income.
By the use of the expression "so far as may be" it is merely intended to enact that the provisions in Ch.
IV which from their nature have no application to firms will not apply thereto by virtue of section 44.
In effect, the Legislature has enacted by section 44 that the assessment proceedings may be commenced and continued against a firm of which business is discontinued as if discontinuance has not taken place.
It is enacted manifestly with a view to ensure continuity in the application of the machinery provided for assessment and imposition of tax liability notwithstanding discontinuance of the business of firms.
By a fiction, the firm is deemed to continue after discontinuance for the purpose of assesment under Chapter IV.
The Legislature has expressly enacted that the provisions of Chapter IV shall apply to the assessment of 771 a business carried on by a firm even after discontinuance of its business, and if the process of assessment includes taking steps for imposing penalties, the plea that the Legislature has inadvertently left a lacuna in the Act stands refuted.
It is implicit in the contention of the appellant that it is open to the partners of a firm guilty of conduct exposing them to penalty under section 28 to evade penalty by the simple expedient of discontinuing the firm.
This plea may be accepted only if the court is compelled, in view of unambiguous language, to hold that such was the intention of the Legislature.
Here the language used does not even tend to such an interpretation.
In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any: the court must interpret the statute as it stands and in case of doubt in a manner favourable to the tax payer.
But where as in the present case, by the use of words capable of comprehensive import, provision is made for imposing liability for penalty upon tax payers guilty of fraud, gross negligence or contumacious conduct, an assumption that the words were used in a restricted sense so as to defeat the avowed object of the Legislature qua a certain class will not be lightly made.
Counsel for the appellant relying upon Mahankali Subbarao vs Commissioner of Income Tax (1), in which it was held that an order imposing penalty under section 28(1)(c) of the Indian Income Tax Act upon a Hindu Joint Family after it had disrupted, and the disruption was accepted under section 25A(1) is invalid, because there is a lacuna in the Act, submitted that a similar lacuna exists in the Act in relation to dissolved firms.
But whether on the dissolution of a Hindu Joint Family the liability for penalty under section 28 which may be incurred during the subsistence of the family cannot be imposed does not fall for decision in this case: it may be sufficient to observe that the provisions of section 25A and section 44 are not in pari materia.
In the absence of any such phraseology in section 25A as is used in section 44, no real analogy between the content of that section and section 44 may be assumed.
Undoubtedly, (1) 772 by section 44, the joint and several liability which is declared is liability to assessment in respect of income, profits or gains of a firm which has discontinued its business, but if in the process of assessment of income, profits or gains, any other liability such as payment of penalty or liability to pay penal interest as is provided under section 25, sub section
(2) or under section 18A sub sections
(4), (6), (7), (8) and (9) is incurred, it may also be imposed, discontinuation of the business notwithstanding.
In our view, Chief Justice Subba Rao has correctly stated in Mareddi Krishna Reddy 's case (supra) that: "Section 28 is one of the sections in Chapter IV.
It imposes a penalty for the concealment of income or the improper distribution of profits.
The defaults made in furnishing a return of the total income, in complying with a notice under sub section
(4) of section 22 or sub section
(2) of section 23 and in concealing the particulars of income or deliberately furnishing inadequate particulars of such income are penalised under that section.
The defaults enumerated therein relate to the process of assessment.
Section 28, therefore, is a provision enacted for facilitating the proper assessment of taxable income and can properly be said to apply to an assessment made under Chapter IV.
We cannot say that there is a lacuna in section 44 such as that found in section 25A of the Act.
We are unable to agree with the view expressed by the Andhra Pradesh High Court in the later Full Bench decision in Commissioner of Income Tax vs Rayalaseema Oil Mills (1), which purported to overrule the judgment in Mareddi Krishna Reddy 's case (supra).
We are also unable to agree with the view expressed by the Madras High Court in section V. Veerappan Chettiar vs Commissioner of Income Tax, Madras (2).
In the view taken by us, the appeal fails and is dismissed with costs.
(1) Appeal dismissed.
| An agreement for a lease, which a lease is by the Indian declared to include, must be a document which effects an actual demise and operates as a lease.
It must create present and immediate interest in land.
Where a litigation between two persons A and B who claimed to be tenants under C was settled by a compromise decree the effect of which was to create a perpetual underlease between A and B which was to take effect only on condition that A paid Rs. 8,000 to C within a fixed period: Held, that such a contingent agreement was not "a lease" within el.
(a) of section 17 (t) of the Indian , and even though it was covered by cl.
(b) of the said sec tion it was exempt from registration under el.
(vi) of subs.
(2) of section 17.
Hemanta Kumari Debi vs Midnapur Zamindari Co. (I P.C.) relied on.
|
Appeal No. 730 of 1962.
Appeal from the judgment and decree dated February 19, 1959, of the Mysore High Court in Regular Appeal No. 208 of 1961 62.
S.K. Venkatarangaiengar and A.G. Ratnaparkhi, for the appellants S.T. Desai and Naunit Lal, for respondent No. 1.
K.K. Jain, for respondent No. 2.
The Judgment of the Court was delivered by Mudholkar, J.
This is an appeal by defendants Nos. 3 to 8 from a decision of the High Court of Mysore passing a decree in favour of respondent No. 1 who was defendant No. 1 in the trial court, for possession of half the property which was the subject matter of the suit and also allowing future mesne profits.
The relevant facts are briefly these: The plaintiff who is the eider sister of the first defendant instituted a suit in the court of the District Judge, Bangalore for a declaration that she.is the owner of half share in the properties described in the schedule to the plaint and for partition and separate possession of half share and for mesne 285 profits.
According to her the suit property was the absolute property of her mother Puttananjamma and upon her death this property devolved on her and the first defendant as her mother 's heirs.
Since,according to her, the first defendant did not want to join her as coplaintiff in the suit, she was joined as a defendant.
It is common ground that the property was in the possession of the second defendant R.S. Maddanappa, the father of the plaintiff and the first defendant and Gargavva, the second wife of Maddanappa and her children.
Maddanappa died during the pendency of the appeal before this Court and his legal representatives are the other defendants to the suit.
Briefly stated his defence, which is also the defence of defendants other than defendant No. 1 is that though the suit properties belonged to Gowramma, the mother of Puttananjamma, she had settled them orally on the latter as well as on himself and that after the death of Puttananjamma he has been in possession of those properties and enjoying them as full owner.
He further pleaded that it was the last wish of Puttananjamma that he should enjoy these properties as absolute owner.
The plaintiff and the first defendant had, according to him, expressly and impliedly abandoned their right in these properties, that his possession over the properties was adverse to them and as he was in adverse possession for over the statutory period, the suit was barred.
Finally he contended that he had spent more than Rs. 46,000 towards improvements of the properties which met partly from the income of his joint ancestral property and partly from the assets of the third defendant.
These improvements, he alleged, were made by him bona fide in the belief that he had a right to the suit properties and consequently he was entitled to the benefit of the provisions of Section 51 of the Transfer of .Property Act.
The first defendant admitted the claim of the plaintiff and also claimed a decree against the other defendants in respect of her half share in the suit properties.
The other defendants, however, resisted her claim and in addition to what the second defendant has alleged in his written statement contended that she was estopped by her conduct from claiming any share in the properties.
The trial court decreed the claim of the plaintiff but held that the first defendant was estopped from claiming possession of her half share in the properties left by her mother.
The first defendant preferred an appeal before the High Court challenging the correctness of the decision of the trial court.
The other defendants also flied an appeal before the High Court challenging the decision of the trial court in favour of the plaintiff.
It would appear that the plaintiff had also preferred some cross objections.
All the matters were heard together in the High Court, which dismissed the appeal preferred by defendants Nos.
2 to 8 as well as the crossobjections lodged by the plaintiff but decreed the appeal preferred by the first defendant and passed a decree in her favour for possession of her half share in the suit properties, and future mesne profits 286 against the remaining defendants.
Defendants Nos. 2 to 8 applied for a certificate from the High Court under Articles 133(1)(a) and 133(1)(c) in respect of the decree of the High Court in the two appeals.
The High Court granted the certificate to defendants Nos. 2 to 8 in so far as defendant No. 1 was concerned but refused certificate in so far as the plaintiff was concerned.
We are therefore, concerned with a limited question and that is whether the High Court was right in awarding a decree to the first defendant for possession of her half share and mesne profits.
Mr. Venkatarangaiengar, who appears for the appellants accepts the position that as the certificate was refused to defendants Nos. 2 to 8 in so far as the plaintiff is concerned, the only points which they are entitled to urge are those which concern the first defendant alone and no other.
The points which the learned counsel formulated are as follows: (1) It is not open to a court to award future mesne profits to a party who did not claim them in the suit; (2) No decree can be passed in favour of a defendant who has not asked for transposition as plaintiff in the suit.
(3) That the first defendant was estopped by her conduct from claiming possession of her alleged half share of the properties.
We will consider the question of estoppel first.
The conduct of the first defendant from which the learned counsel wants us to draw the inference of estoppel consists of her attitude when she was served with a notice by the plaintiff, her general attitude respecting Bangalore properties as expressed in the letter dated 17th January, 1941 written by her to her step mother and the attestation by her and her husband on 3 10 1944 of the will executed on 25th January, 1941 by Maddanappa.
In the notice dated 26th January, 1948 by the plaintiff 's lawyer to the first defendant it was stated that the plaintiff and the first defendant were joint owners of the suit properties which were in the possession of their father and requested for the co operation of the first defendant in order to effect the division of the properties.
A copy of this notice was sent to Maddanappa and he sent a reply to it to the plaintiff 's lawyers.
The first defendant, however, sent no reply at all.
We find it difficult to construe the conduct of the first defendant in not replying to the notice and in not co operating with the plaintiff in instituting a suit, for obtaining possession of the properties as justifying the inference of estoppel.
It does not mean that she impliedly admitted that she had no interest in the properties.
It is true that in exhibit 15, which is a letter sent by her on 17 1 1941 to her step mother she has observed thus: "I have no desire whatsoever in respect of the properties which are at Bangalore.
Everything belongs to my father.
He has the sole authority to do anything .
We give our 787 consent to anything done by our father.
We will not do anything." But even these statements cannot assist the appellants because admittedly the father knew the true legal position.
That is to say, the father knew that these properties belonged to Puttananjamma, and that he had no authority to deal with these properties.
NO doubt, in his written statement Maddanappa had set up a case that the properties belonged to him by virtue of the declaration made by Puttananjamma at the time of her death, but that case has been negatived by the courts below.
The father 's possession must, therefore, be deemed to have been, to his knowledge, on behalf of the plaintiff and the first defendant.
There was thus no possibility of an erroneous belief about his title being created in the mind of Maddanappa because of what the first defendant had said in her letter to her step mother.
In so far as the attestation of the will is concerned, the appellants ' position is no better.
This 'will ' purports to make a disposition of the suit properties along with other properties by Maddanappa in favour of defendants Nos.
3 to 8.
The attestation of the will by the first defendant and her husband, would no doubt affix them with the knowledge of what Maddanappa was doing, but it cannot operate as estoppel against them and in favour of defendants Nos.
3 to 8 or even in favour of Maddanappa.
The will couId take effect only upon the death of Maddanappa and, therefore, no interest in the property had at all accrued to the defendants Nos. 3 re, 8 even on the date of the suit.
So far as Maddanappa is concerned, he, as already stated, knew the true position and therefore, could not say that an erroneous belief about his title to the properties was created in his mind by reason of the conduct of the.
first defendant and her husband in attesting the document.
Apart from that there is nothing on the record to show that by reason of the conduct of the first defendant Maddanappa altered his position to his disadvantage.
Mr. Venkatarangaiengar, however, says that subsequent to the execution of the will he had effected further improvements in the properties and for this purpose spent his own moneys.
According to him, he would not have done so in the absence of an assurance like the one given by the first defendant and her husband to the effect that they had no objection to the disposition of the suit properties by him in any way he chose to make it.
The short answer to this is that Maddanappa on his own allegations was not only in possession and enjoyment of these properties ever since the death of Puttananjamma but had made improvements in the properties even before the execution of the will.
In these circumstances, it is clear that the provisions of Section 115 of the Indian Evidence Act, which contain the law of estoppel by representation do not help him.
Mr. Venkatarangaiengar, however, wanted us to hold that the law of estoppel by representation is not confined to the provisions 288 of section 115 of the Evidence Act, that apart from the provisions of this section there is what is called "equitable estoppel" evolved by the English Judges and that the present case would come within such "equitable estoppel".
In some decisions of the High Courts reference has been made to "equitable estoppel" but we doubt whether the court while determining whether the conduct of a particular party amounts to an estoppel, could travel beyond the provisions of Section 115 of the Evidence Act.
As was pointed out by Garth C.J. in Ganges Manufacturing Co. vs Saurjmull(1) the provision of s 115 of the Evidence Act are in one sense a rule of evidence and are rounded upon the well known doctrine laid down in Pickard vs Sears(2) in which the rule was stated thus: "Where one by his word or conduct wilfully causes another to believe for the existence of a certain state of thing and, induced him to act on that belief so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the first, time.
" The object of estoppel is to prevent fraud and secure justice between the parties by promotion of honesty and good faith.
Therefore, where one person makes a misrepresentation to the other about a fact he would not be shut out by the rule of estoppel, if that other person know the true state of facts and must consequently not have been misled by the misrepresentation.
The general principle of estoppel is stated thus by the Lord Chancellor in Cairncross vs Lorimer(3): "The doctrine will apply, which is to be found, I believe, in the laws of all civilized nations that if a man either by words or by conduct has intimated that he consents to an act which has been done, and that he will offer no opposition to it, although it could not have been lawfully done without his consent, and he thereby induces others to do that from which they otherwise might have abstained, he cannot question the legality of the act he had so sanctioned, to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct.
I am of opinion that, generally speaking, if a party having an interest to prevent an act being done has full notice of its being done, and acquiesces in it, so as to induce a reasonable belief that he consents to it, and the position of others is altered by their giving credit to his sincerity, he has no more right to ' challenge the act to their prejudice than he would have had if it had been done by his previous license.
" It may further be mentioned that in Carr vs London & N.W. Ry.
Co.(4)four propositions concerning an estoppel by conduct (1) I.L.R. 5 cal., 669.
(2) ; (3) (4) ; 289 were laid down by Brett, j. (afterwards Lord Reher) the third which runs thus: "If a man either in express terms or by conduct makes a representation to another of the existence of a certain state of facts which he intends to be acted upon in a certain way, and it be acted upon in the belief of the existence of such a state of facts, to the damage of him who so believes and acts, the first is estoppel from denying the existence of such a state of facts.
" This also shows that the person claiming benefit of the doctrine must show that he has acted to his detriment on the faith of the representation made to him.
This was quoted with approval in Sarad vs Gopal(1).
It will thus be seen that here also the person who sets up an estoppel against the other must show that his position was altered by reason of the representation or conduct of the latter and unless he does that even the general principle of estoppel cannot be invoked by him.
As already stated no detriment resulted to any of the defendants as a result of what the defendant No. 1 had stated in her letter to her step mother or as a result of the attestation by her and her husband of the will of Maddanappa.
Mr. Venkatarangaiengar then tried to urge before us that it was a case of family settlement by the father with a view to avoid disputes amongst his heirs and legal representatives after his death and, therefore, the actions of defendant No. 1 can be looked at as acquiescence in the family settlement effected by the father.
A case of family settlement was never set up by the defendants either in the trial court or in the High Court and we cannot allow a new case to be set up before us for the first time.
Finally on this aspect of the case the learned counsel referred to the observations of Lord Cranworth in Ramsden vs Dyson(2) which are as follows: "If a stranger begins to build on my land supposing it to be his own and I (the real owner) perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a court of equity will not allow me afterwards to.
assert my title to the land, on which he has expended money on the supposition, that the land was his own.
It considers that when I saw the mistake in which he had fallen, it was my duty to be active and to state his adverse title; and that it would be dishonest in me to remain wilfully passive on such an occasion in order afterwards to profit by the mistake which I might have prevented.
The doctrine of acquiescence cannot afford any help to the appellants for the simple reason that Maddanappa who knew the true state of affairs could not say that any mistaken belief was caused (1) L.R. 19 I.A. 203.
(2) L.R.I. H. L. App.
129, 140. 290 in his mind by reason of what the first defendant said or did.
According to the learned counsel, even if the first defendant 's claim to the half share in the suit property cannot be denied to her she must at least be made to pay for the improvements effected by Maddanappa, according to her proportionate share in the suit property.
As already stated the appellant was in enjoyment of these proportion after his wife 's death and though fully aware of the fact that they belonged to the daughters he dealt with them as he chose.
When he spent moneys on those properties he knew what he was doing and it is not .open to him or to those who claim under him to say that the real owners of the properties or either of them should be made to pay for those improvements.
No man who, knowing fully well that he has no title to property spends money on improving it can be permited to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not effected with the consent of that person.
In our view, therefore, neither was defendant No. 1 estopped from claiming possession of half share of the properties nor can she be made liable to pay half the costs of improvements alleged to have been made by the second defendant.
Now regarding the second point, this objection is purely technical.
The plaintiff sued for partition of the suit properties upon the ground that they were inherited jointly by her and by the first defendant and claimed possession of her share from the other defendants who were wrongfully in possession of the properties.
She, also alleged that the first defendant did not co operate in the matter and so she had to institute the suit.
The first defendant admitted the plaintiff 's title to half share in the properties and claimed a decree also in her own favour to the extent of the remaining half share in the properties.
She could also have prayed for the transposition as a co plaintiff and under Order I, rule 10(2) C.P.C. the Court could have transposed her as a co plaintiff.
The power under this provision is exercisable by the Court even suo motu.
As pointed out by the Privy Council in Bhupender vs Rajeshwar(1) the power ought to be exercised by a court for doing complete justice between the parties.
Here both the plaintiff and the first defendant claim under the same title and though defendants 2 to 8 had urged special defences against the first defendant, they have been fully considered and adjusted upon by the High Court while allowing her appeal.
Since the trial court upheld the special defences urged by defendants 3 to 8 and negatived the claim of the first defendant it may have thought it unnecessary to order her transposition as plaintiff.
But the High Court could, while upholding her claim, well have done so.
Apparently it either over looked the technical defect or felt that under O. XLI, rule 33 it had ample power to decree her claim.
However that may be, the provisions of section 99 would be a bar to interfere here with the High Court 's decree upon a ground such as this.
(1) L.R. 58 I.A. 228.
291 The only other question for consideration is whether the High Court was justified in awarding mesne profits to the first defendant even though she was not transposed as a plaintiff.
According to the learned counsel mesne profits cannot be awarded to a successful party to a suit for possession unless a claim was made in respect of them.
The learned counsel is right in so far as mesne profits prior to the suit are concerned but in so far as mesne profits subsequent to the date of the institution of the suit, that is future mesne profits are concerned, the position is governed by Order XX, rule 2, C.P.C. which is as follows: "(1) Where a suit is for the recovery of possession of immovable property and for rent or mesne profits, the Court may pass a decree (a) for the possession of the property; (b) for the rent or mesne profits which have accrued on the property during a period prior to the institution of the suit or directing an inquiry as to such rent or mesne profits; (c) directing an inquiry as to rent or mesne profits from the institution of the suit until: (i) the delivery of possession to the decreeholder, (ii) the relinquishment of possession by the judgment debtor with notice to the decree holder through the Court, or (iii) the expiration of three years from the date of the decree, whichever event first occurs.
(2) Where an inquiry is directed under clause (b) or clause (c) a final decree in respect of the rent or mesne profits shall be passed in accordance with the result of such inquiry.
" The learned counsel, however, relied upon the decision of this Court in Mohd. Amin and others vs Vakil Ahmed and others(1).
That was a suit for a declaration that a deed of settlement was void and for possession of the property which was the subject matter of the settlement under that deed.
The plaintiffs had not claimed mesne profits at all in their plaint but the High Court had passed a decree in the plaintiff 's favour not only for possession but also for mesne profits.
In the appeal before this Court against the decision of the High Court one of the points taken was that in a case of this kind, the court has no power to award mesne profits.
While upholding this contention Bhagwati J. who delivered the judgment of the Court has observed thus: "The learned Solicitor General appearing for the plaintiffs conceded that there was no demand for mesne profits as such but urged that the claim for mesne profits would be included within the expression 'awarding (1) ; ,1144 B(N)3SCI 6 292 possession and occupation of the property aforesaid together with all the rights appertaining thereto.
We are afraid that the claim for mesne profits cannot be included within this expression and the High Court was in error in awarding to the plaintiffs mesne profits though they had not been claimed in the plaint.
The provision in regard to the mesne profits will therefore have to be deleted from the decree.
" In order to satisfy ourselves whether these observations related to the award of past mesne profits or to the award of future mesne profits we sent for the original record of this Court and we found that the High Court had awarded past as well as future mesne profits.
Mr. S.T. Desai, appearing for the respondent No. 1 stated.
that a Full Bench in Babburu Basavayya and four others vs Babburu Garavayya and another (1) following the decision of the Judicial Committee in Fakharuddin Mohomed Ahsan vs The Official Trustee(2) has held that even after the passing of the preliminary decree, it is open to the court to give appropriate directions, amongst other matters regarding future mesne profits either suo motu or on the application of the parties in order to prevent multiplicity of litigation and to do complete justice between the parties.
This decision has been followed in a large number of cases.
In Bachepalli Atchamma vs Yerragupta Rami Reddy(3) Simma Krishnamma vs Nakka Latchumanaidu and others(4) Kasibhatla Satyanarayana Sastrulu and others vs Kasibhatla Mallikarjuna Sastrulu(5) and Ponnuswami Udayar and another vs Santhappa(6) the decision of this Court was cited at the Bar and has been considered.
The learned Judges have said that the authority of the decision in Babburu Basavayya and four others vs Babburu Guravayya(1) is not shaken by what this Court has said.
One of the grounds given is that the former relates to a suit for partition while the latter to a suit for possession simpliciter.
It is not necessary for us to consider whether the decision of this Court can be distinguished upon this ground, but we feel that when a suitable occasion arises it may become necessary to reconsider the decision of this Court as to future mesne profits.
In the present case the plaintiff did claim not only partition and separate possession of her half share of the properties but also past mesne profits.
The defendant No. 1 admitted the plaintiff 's claim and in substance prayed for a similar decree in her favour.
The decision of this Court would, therefore, not apply to a case like the one before us.
In the result therefore we uphold the decree of the High Court and dismiss the appeal with costs.
Appeal dismissed.
(1) I.L.R. 1952 Madras 173.
(2) 8 cal 178 (P. C.).
(3) A.I.R. 1957 A.P. 52.
(4) A.I.R. 1958 A.P. 520.
(5) A.I.R. 1960 A.P. 45.
(6) A.I.R. 1963 Mad. 171.
| The plaintiff instituted the suit for possession of her half share in the suit properties and for mesne profits.
The first defendant, who was the plaintiff 's sister, admitted the plaintiff 's claim and herself claimed a decree against the other defendants in respect of her half share in the suit properties.
The second defendant was their father and the suit properties were in his possession.
He and the other defendants, who were his second wife and children by her, contested the suit.
The trial court decreed the plaintiff 's claim, but held that the first defendant was estopped from claiming possession of her share.
On appeal by the first defendant, the High Court passed a decree in her favour also for possession of her half share in the suit properties, and for past and future mesne profits.
On appeal to this Court against the decree in favour of the first defendant, it was contended on behalf of the other defendants: (i) that the first defendant was estopped by her conduct from claiming possession of her half share of the properties because (a) she had not replied to a notice from the plaintiff to join with her in the suit for obtaining possession and division of the suit properties; (b) 'she had written a letter to her step mother stating that she wished to have no interest in the suit properties then in her father 's possession; (c) she and her husband had attested a will executed by the father 25 1 1941 which covered the disposition of the suit properties; and (d) ' that the first defendant 's conduct was either covered by section 115 Evidence Act or fell within the principle of "equitable estoppel" ' (ii)even if the first defendant 's claim to the half share in the suit properties could not be denied, she must be made to pay for half the cost of various improvements of those properties effected by the second.
defendant in the bona fide belief that the properties belonged to him as she had acquiesced in the expenditure being incurred; (iii) that no, decree can be passed in favour of a defendant who has not asked for transposition as plaintiff in the suit; and (iv) that it is not open to a court to award future mesne profits to a party who did not claim them in the suit.
HELD: (i) The first defendant was neither estopped from claiming possession of her half share of the properties nor could she be made liable to pay half the costs of improvements alleged to have been made by the second defendant; (a) It cannot be implied from the conduct of the first defendant in not replying to the notice given b the plaintiff that she had admitted that she had no interest in the properties; (b) The second defendant 's case that the properties belonged to him having been negatived, there was no possibility of an erroneous belief being created in the mind of the second defendant that he had title to the property because of what the first defendant, had said in her letter to her step mother; (c) The attestation of the will by the first defendant and her husband, by which the second defendant purported to make a disposition of the suit properties in favour of the other defendants could not operate as an estoppel, as 284 no interest had accrued in favour of those defendants on the date of the suit.
As far as the second defendant was concerned, he knew, the true legal position and could not say that an erroneous belief was created in his mind by reason of the first defendant and her husband attesting the will.
[286 G H; 287 C; 287 F] Quaere: Whether the Court, while determining whether the conduct of a particular party amounts to an "equitable estoppel" could travel beyond the provisions of section 115 of the Evidence Act.
[288 B] Case law reviewed.
(ii) No man who knowing fully well.
that he has no title to property, spends money on improving it, can be permitted to claim payment for improvements which were not effected with the consent of the true owner.
[290C] Ramsden vs Dyson, L R.I.H.L.App.
129, 140 distinguished.
(iii) Both the plaintiff and the first defendant claimed under the same title and though the other defendants had urged special defences against the first defendant, they had been fully considered and adjudicated upon by the High Court while allowing her appeal.
The High Court could, while upholding her claim, have transposed her as a plaintiff.
It either over looked the technical defect or felt that under Order XLI rule 33, it had ample power to decree her claim.
However that may be, the provisions of section 99 C.P.C., would be a bar to interference by the Supreme Court with the High Court 's decree upon such a ground.
[290 G H] Bhupendra vs Rajeshwar, 58 I.A. 228, referred to.
(iv) Though mesne profits prior to the suit cannot be awarded to a successful party unless a claim is made in respect of them, the position regarding future mesne profits is governed by O. XX, r. 2, C.P.C. The decree awarding mesne profits to the first defendant must be upheld because the first defendant admitted the plaintiff 's claim and in substance prayed for a similar decree in her favour.
[291 B; 292 G H] Mohd. Amin and Ors.
vs Vakil Ahmed and Ors.
; , distinguished.
|
Appeal No. 1947 of 1975.
Appeal by Special Leave from the Judgment and Order dated 9 10 1975 of the Gujarat High Court in Special Civil Application No. 1339/75.
V.M. Tarkunde, P.H. Parekh, Miss Manju Jatley and (Miss) Mardk Tarkunde, for the Appellants.
D.V. Patel and M.N. Shroff, for Respondent No. 1.
K.L. Hathi and P.C. Kapur, for Respondent No. 2. 879 The Judgment of the Court was delivered by GUPTA, J.
The first appellant is an association of the manufacturers of Mangalore pattern roofing tiles in south Gujarat area, the other appellant, a partnership firm, is a member of the association.
The question that falls to be determined in this appeal by special leave is whether entry 22 added by the Gujarat Government by notification dated March 27, 1967 to Part 1 of the Schedule to the covers Mangalore pattern roofing tiles.
Entry 22 reads as follows; "Employment in potteries Industry.
Explanation: For the purpose of this entry potteries industry includes the manufacture of the following articles of pottery, namely: (a) Crockery (b) Sanitary appliances and fittings (c) Refractories (d) Jars (e) Electrical accessories (f) Hospital ware (g) Textile accessories . (h) Toys (i) Glazed Tiles" We may also refer to certain other provisions of the Minimum wages Act which3 provide the context to the question arising for decision.
Section 2(g) defines "scheduled employment" as meaning "any employment specified in the Schedule or any process or blanch of work forming part of such employment".
The schedule is in two parts.
which relates to employment in agriculture only As not relevant for the purpose of this appeal.
Section 3 authorises the appropri ate Government to fix or revise the minimum rates of wages payable to employees in scheduled employments.
Section 5 prescribes the procedure for fixing and revising minimum wages.
In fixing minimum rates of wages in respect of any scheduled Section 5 prescribes the procedure for fixing and revising minimum wages.
In fixing minimum rates of wages in respect of any scheduled.
employment for the first time or in revising the rates so fixed, the appropriate Government must either appoint committees to hold, neces sary enquiries and advise it in this regard, or publish its proposals in the matter for the information of persons .likely to be affected thereby.
The Government will fix or revise the minimum rates of wages after consid ering the advice of the committees or the representations received in regard to the proposals published, as the case may be.
Section 7 empowers the appropriate Government also to appoint an advisory board for coordinating the work of the committees appointed under section 5, and advising the Government generally in the matter of fixing and revising minimum rates of wages.
Section 19 880 authorises the Government to appoint Inspectors for the purposes of the Act, Sections 22 and 22 A lay down the penalties for paying to an employee any amount less than what is due to him under the Act, or contravening any provi sion of the Act or any rule or order made thereunder; the punishment may extend to imprisonment for six months with a fine of Rs. 500/ .
Under section 27 the appropriate Gov ernment after giving by notification in the official gazette not less than three months ' notice of its intention to add to either Part of the Schedule any employment in respect of which it is of opinion that minimum rates of wages should be fixed, add such employment to the schedule by another notification and the schedule in its application to the State concerned shall be deemed to be amended accordingly.
Before proceeding to consider the rival contentions, we may briefly state the facts in the background.
On November 13, 1966 the Gujarat Government issued a notification under section 27 declaring its intention to add "employment in potteries industry" with an 'Explanation ' to of the Schedule to the Minimum wages Act, and by notification dated March 27, 1967 the entry was added as entry No. 22.
Later a committee was appointed under sec tion 5 (1 ) to fix minimum rates of wages in potteries industry.
The committee submitted its recommendations some time in 1968.
It appears from the letter dated July 10, 1968 addressed to the Government by the advisory committee forwarding its report that the Committee had not taken into consideration roofing tiles in the recommendations made.
By a notification dated January 8, 1969 the Government fixed the minimum rates of wages in respect of potteries industry on the basis of the committee 's report.
On March 25, 1970 a proceeding was started against the second appellant on the complaint of an Inspector alleging that the partners of the firm had failed to.
produce for his examination the muster roll and the wages Register.
The appellant was acquitted by the magistrate who held that entry 22 did not cover roofing tiles and as such the Act was not applicable to the industry of the accused.
The State preferred an appeal to, the High Court against the order of acquittal.
The High Court affirmed the acquittal on merits but observed that the manufacture of roofing tiles was included in entry 22.
In 1974 the Gujarat Government appointed another committee under section 5 ' of the Act to revise the minimum wages in potteries industry.
This time the committee treated the manufacture of roofing tiles as included in item 22 and sent its report to the Government.
On May 12, 1975 the State Government issued a notification accepting the recommenda tions of the committee and gave effect to the revised rates from the next day, i.e. May 13, 1975.
The appellants filed a writ petition in the Gujarat High Court challenging the validity of the notification dated May 12, 1975.
By its order dated October 9, 1975 the High Court dismissed the writ petition on the view that "Mangalore pattern roofing tiles manufactories would be covered ' within the entry".
This is how the scope of entry 22 arises for consideration in this appeal.
The question turns on a true construction of the Explanation to entry 22 which says that for the purpose of this entry potteries industry "includes" the manufacture of the nine "articles of pottery" 881 specified therein.
Pottery in a wide sense will take in all objects that are made from clay and hardened by fire, from crude earthen pots to delicate porcelain.
Mr. Patel appear ing for the respondent, State of Gujarat, contends that the Explanation indicates that potteries industry in entry 22 is intended to cover all possible articles of pottery includ ing Mangalore pattern roofing tiles.
Referring to the well known use of the word 'include ' in interpretation clauses to extend the meaning of words and phrases occur ring in the body of the statute, Mr. Patel submits that the Explanation, when it says that potteries industry 'in cludes ' the nine named objects, what is meant is that it includes not only these objects but other articles of pot tery as well.
It is true that 'includes ' is generally used as a word of extension, but the meaning of a word or phrase is extended when it is said to include things that would not properly fall within its ordinary connotation.
We may refer to the often quoted observation of Lord Watson in Dilworth vs Commissioner of Stamps, (1) that when the word 'include ' is used in interpretation clauses to enlarge the meaning of words or phrases in the statute "these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include".
Thus where 'includes ' has an extending force, it adds to the word or phrase a meaning which does not naturally belong to it.
It is difficult to agree that 'includes ' as used in the Explanation to entry 22 has that extending force.
The Explanation says that for the purpose of entry 22, potteries industry includes the manufacture of the nine "articles of pottery" specified in the Explanation.
If the objects specified are also "articles of pottery", then these objects are already comprised in the expression "potteries industry".
It hardly makes any sense to say that potteries industry includes the manufacture of articles of pottery, if the intention was to enlarge the meaning of potteries industry in any way.
We are also unable to.
agree with Mr. Patel that the articles specified in the Explanation may have been men tioned out of abundant caution to emphasize the comprehen sive character of the entry, to indicate that all rarities of pottery are included therein.
argument, though more plausible, does not also seem acceptable '.
It is possible that one might have doubts.
whether things like refractories or electrical or textile accessories would pass under the description pottery as that word is used in common parlance, but the Explanation also mentions crockery and toys regarding which there could be hardly any doubt.
The inclusion in the list of objects which are well recognised ' articles of pottery makes it plain that the Explanation was added to the entry not by way of abundant caution.
The contention of Mr. Tarkunde for the appellants is that the articles mentioned in the Explanation were intend ed to be exhaustive of the objects covered by entry 22.
According to Mr. Tarkunde if the legislature wanted to bring within the entry all possible articles of pottery then there was hardly any point in mentioning only a few them by way of Explanation.
To this Mr. Patel 's reply is that it (1) (1899) A.C. '105 106. 882 is well known that where the legislature wants to exhaust the significance of the term defined, it uses the word 'means ' or the expression 'means and includes ', and that if the intention was to make the list exhaustive, the legisla ture would not have used the word 'includes ' only.
We do not think there could be any inflexible rule that the word 'include ' should be read always as a word of extension without reference to the context.
Take for instance entry 19 in the schedule which also has an Explanation .containing the .word 'includes '.
Entry 19 is as follows: "Employment in any tobacco processing establishment, not covered under entry No. 3.
Explanation.
For the purpose of this entry, the expression "processing" includes packing or unpacking, breaking up,.
sieving, thrishing, mixing, grading, drying, curing or otherwise treating the tobacco (including tobacco leaves and stems) in any manner.
" Entry 3 to which entry 19 refers reads: "Employment in any tobacco (including bidi making) manufactory.
" It is clear from the Explanation to entry 19 that there could be no other way or manner of "processing" besides what is stated as included in that expression.
Though include ' is generally used in interpretation clauses as a word of enlargement, in some cases the context might sug gest a different intention.
Pottery is an expression of very wide import, embracing all objects made of clay and hardened by heat.
If it had been the legislature 's inten tion to bring within the entry all possible articles of pottery, it was quite unnecessary to add an Explanation.
We have found that the Explanation could not possibly have been introduced to extend the meaning of potteries indus try or the articles listed therein added ex abundanti caute la.
It seems to us therefore that the legislature did not intend every thing that the potteries industry tums out to be covered by the entry.
What then could be the purpose.
of the Explanation ? The Explanation says that, for the purpose of entry 22, potteries industry 'includes ' manufac ture of the.
nine articles of pottery named therein.
It seems to us that the word 'includes ' has been used here in the sense of 'means ', this is the only construction that the word can bear in the.
context.
In that sense it is not a word of extension, but limitation; it is exhaustive of the meaning which must be given to potteries industry for the purpose of entry 22.
The use of the word 'includes ' in the restrictive sense is not unknown.
The observation of Lord Watson in Dilworth vs Commissioner of Stamps,(1) which is usually referred to on the use of 'include ' as a word of extension, ' is followed by these lines: "But the word 'i nclude ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expres sions defined.
It may be equivalent to 'mean and include ', and in that case it may afford an ( 1899)A.C. 105 106 883 exhaustive explanation of the meaning which, for the pur poses of the Act, must invariably be attached to these words or expressions".
It must therefore be held that the manufac ture of Mangalore pattern roofing tiles is outside the purview of entry 22.
The appeal is allowed with costs against respondent No. 1, dated May 12, 1975 in so far as it applies to the Manga lore pattern roofing tiles is quashed.
The members of the first appellant are permitted to withdraw any sum they had deposited in the Gujarat High Court pursuant to the order of this Court made on April 2, 1976.
M.R, Appeal allowed.
| Section 4 of the Andhra Pradesh (Andhra Area Electricity Supply Undertaking (Acquisition) Act, 1954, empowered the Government to declare that an electricity undertaking of the licensee Municipal Council shall vest in Government on a specified date.
Section 5 provides for compensation to be paid on one of three alternative bases, A, B or C set out in the Act.
Where compensation is on the basis 'C ',, it in cludes under section 5(3)(vi) the book value of all intangible assets to the extent such value has not been written off in the books of the licensee; and section 6(2)(a) mentions the items that would vest in the State Government.
Section 6(2)(a)(iii) relates to all the rights, liabilities and obligations of the licensee under any other contract entered into bona fide, not being a contract relating to the borrowing or lending for money.
Section 10(2) (b)(iii) lays down that the Government may deduct from the compensation all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date, in so far as they have not been paid over by the licensee to the Government, less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied to such consumers before that date.
In the present case, the State Government made a decla ration regarding the vesting of the Electricity Undertaking of the appellant in the State Government, and transferred its rights to the respondent Electricity Board.
Certain amounts were shown in the books of the appellant as due to it from consumers.
The respondent claimed those amounts and flied a suit against the appellant for their recovery.
The trial court dismissed the suit, but the High Court allowed the appeal.
In appeal to this Court, it was contended that past dues from the consumers would not vest in the respondent as they were not specifically mentioned in section 6(2)(a); and that under section 10(2)(b)(iii) the appellant was entitled to deduct and appropriate the amounts due from consumers for supply of electricity from their security deposits.
Dismissing the appeal to this Court, HELD: (1) The explicitly wide language used in section 6(2)(a)(iii) dispenses with the need to specify all items which are covered by it; and, arrears of dues from consumers are covered by the wide language of the clause.
[850 A] (2)(a) Section 10(2)(b)(iii) is meant for security deposits and arrears of interest due on them which are generally held in trust by the licensee so as to be ulti mately returned to the consumers,.
if the dues of the con sumers have been met without resorting to the amounts depos ited.
They are used for a deduction of dues from deposits where these have not been paid.
If these deposits have not been made over by the licensee to the Government, they will be claimable by the depositors, and, therefore, they are deducted from the compensation.
If however, there are any amounts due shown in the books of the licensee as duo from the consumers of energy they would become realisable by the Government under section 6(2)(a)(iii).
It is for this reason that the deduction of security 847 deposit from compensation is reduced by the amounts which are due from consumers to the Undertaking for energy sup plied by the Undertaking before the date of vesting as they become the claims realisable by the successor in interest of the Undertaking.
An exclusion from an item of deduction from compensation could only indicate that this was being done because this was an item which is covered by the compensation provided for and to be paid.
[850 A] (b) In .the present case, the only contention of the appellant was that the right to appropriate the amount of dues did not vest in the respondent but that the amount had vested in the appellant.
It was not argued on behalf of the appellant that what was vested in the Government was only the right to realise the dues from the consumers and not to recover from the appellant the amount which the appellant had actually realised or could have realised.
(3) The High Court 's interpretation of section 10(2)(b)(iii) must be accepted as a correct interpretation because it is in harmony with the meaning of the terms of section 5(3)(vi) read with section 6(2)(a) of the Act.
[851C]
|
Civil Appeals Nos.
814 815 of 1968.
From the Judgment and Order dated 7th September.
1966 of the Andhra Pradesh High Court in Writ Appeal Nos. 71 and 72 of 1964 respectively.
R. V. Pillai, for the appellant.
P Ram Reddy and C. N. Rao, for the respondents.
The Judgment of the Court was delivered by KRISHNA IYER J.
A forest contractor the appellant who had allegedly excess felled trees beyond the permitted number under two contracts entered into by him with the State of Andhra Pradesh, was directed by the Conservator of Forests the firs, respondent to suffer two.
levies.
One item represented the loss sustained by the State on account of the illicit cutting and the other was a penalty imposed under r. 29 of the Forest Contract Rules (for short, the Rules) issued in exercise of the powers conferred under sections 44 and 79 of the Hyderabad Forest Act, 1355F (for short, the Act).
The factual story out of which the legal controversy springs may be narrated in simple terms.
Admittedly, the appellant was granted two forest contracts to fell and remove a specific number of trees from government forest, in accordance with the Act and the Rules.
The Contracts were of two years ' duration ending with 31st December 1960.
It was found by the Forest officers that the appellant contractor had felled more trees and so he was given a notice calling for his explanation about this detected breach of condition.
In C.A. 814 of 1968 such notice was issued on June 25, 1960 but no explanation was forthcoming.
So the Conservator determined the amount representing the loss caused by the unauthorised cutting of trees.
On July 22, 1960 the District Forest officer informed the appellant that the Conservator of Forest, who is the appropriate authority under the Rules, had fixed Rs. 11,426/ as representing the loss sustained by Government and Rs.11,250/ as penalty under r. 29.
The contractor.
thereupon, prayed for re enumeration of the 772 trees cut from the forest by his application, dated July 30, 1960.
He was informed by the forest authorities, by communication dated August '24, 1960 to check the stumps in the coupe as desired by the petitioner before September 15, 1960.
This opportunity was also not availed of by the appellant.
Consequently, the Conservator levied a penalty, as earlier proposed.
Thus there were two items (1) the loss caused by illicit cutting; (ii) the penalty imposed under the rules for breach of conditions of the contract.
There were three small amounts of fine also, all together resulting in a sum of Rs. 23,088.00.
Eventually, the contract was terminated on December 28, 1960 under r. 30 of the Rules.
Long later, in January 1962, the amount stated above was sought to be realised by revenue recovery process by the Tahsildar, `by his attachment order, dated January 8, 1962.
Thereupon a writ petition was filed by the appellant challenging the demand.
He succeeded before the learned Single Judge but a Division Bench, in appeal carried by the State, reversed this order and the appellant has invoked the jurisdiction of this Court under article 133(1) (a) and (b) of the Constitution.
In C.A. 815 of 1968 a similar excess felling by the same contractor was detected by the concerned officials and notice was issued to the appellant to explain how he had felled 255 trees in excess of the contractual figure.
The appellant denied the illicit felling whereupon a date was fixed for checking the coupe in his presence, as requested by him.
The contractor however did not avail himself of the opportunity so afforded despite a second date for inspection being fixed to suit his convenience.
Eventually the Conservator of Forests fixed the loss sustained by government on account of the illicit felling of trees and also the penalty for breach of the conditions of the contract.
This was done on October 16, 1960 and the appellant was asked to pay the sum by notice.
dated October 28, 1960.
On the same date, the lease was also terminated.
Long later, on January 9, 1962 proceedings for realisation of the amounts were initiated by the Tahsildar.
This step drove the contractor to move a writ petition, which shared the fate, at the single Judge 's level and in appeal, of the sister writ petition already adverted to.
In the same manner he has moved this Court in appeal, by certificate.
Two points were urged by Mr. R V. Pillai, learned counsel for the appellant, one relating to the loss assessed and sought to be realised by the State under the two contracts on account of excess felling, the other relating to the imposition of penalty under r. 29 and its validity.
The first point does not survive because in both the writ petitions which were disposed of together by a common judgment the learned Single Judge rejected the contention with the observation 'I find no substance in the arguments advanced in this behalf .
No provision was brought to any notice which disentitles the government to collect those items '.
If the appellant had been aggrieved by the negation of his plea under this head he should have challenged it in appeal which he did not.
Thus the matter has become final and he` cannot, in this Court, revive it at all.
There is only a single question that therefore deserves our consideration.
773 Was the penalty in the two cases imposed validly ? The learned Single Judge held, on a study of rr. 29 and 31 that the impost was illegal for reasons which we find difficult to accept.
The Division Bench, in appeal, disagreed with the learned Single Judge for reasons which are unclear although our conclusion concurs with theirs.
The rules regulating the consequence of a breach of the conditions of forest contracts were originally promulgated in Urdu in the Hyderabad State but we have been handed up the Manual of Civil Laws, Andhra Pradesh, which contains those rules in English.
Rule 29(3) reads slightly obscurely but, in the absence of the original Urdu rules, we have to make do with the English version.
There are two types of penalties which we may conveniently designate as 'major ' and 'minor ', in the contemplation of the Forest Rules Rule 29 deals with the major penalties while r. 31 relates to minor penalties.
Where the breach of the conditions of the contract committed by the forest contractor is serious, the contract itself is to be terminated and a substantial penalty is to be imposed which 'shall not exceed one quarter of the total consideration paid by the contractor '.
If the branch is of lesser significance, then the authority may not propose to terminate the contract on account thereof but may recover a portion of the 'whole penalty provided for in r. 29 ' not exceeding Rs. 100/ .
In short, if the contravention is grave, the contract is cancelled and a heavy penalty imposed but if the breach is inconsequential the contract continues but a lighter penalty is imposed.
In the present case it is apparent that the authorities terminated the contract and it is equally clear that the breach was serious.
Rule 31 which deals with trivial breaches and lighter penalties is inapplicable.
The only question then is whether the exercise of the power to impose a penalty under r. 29 has been (a) in compliance with natural justice; and.
(b) in fulfilment of the conditions precedent for the exercise of the power.
The facts we have set out earlier make it clear that an opportunity had been afforded in the case of both the contracts before finally quantifying the penalty to be levied but, the contractor did not avail himself of the opportunity.
While it is clear that in the absence of a statutory exclusion of natural justice any exercise of power prejudicially affecting another must be in conformity with the rules of natural justice, we are satisfied that in the present case there is no foundation for the grievance of the petitioner on this score.
The substantial issue is as to whether the termination of the contract for breach of conditions should precede the impost of penalty.
According to Shri Pillai, that is the meaning of r. 29 read in the light of r. 30(3).
There is seeming varbal support for this contention but n closer scrutiny pricks the bubble.
Rule 29 may well be read at this stage '29.
(1) Penalty on termination of a contract for breach of conditions.
Every forest contract shall be in writing in the form annexed hereto and shall contain a provision whereby the 774 forest contractor binds himself to do all the duties and acts A required to be done by or under the contract, and covenants that he and his servants and agents shall abstain from all the acts forbidden by or under such contract.
(2) The sums to be mentioned in a forest contract as payable in case of a breach of any such stipulation shall not exceed one quarter of the total consideration to be paid by the contractor, and shall be recoverable in accordance with the provisions of the Hyderabad Forest Act 1355 F and of this rule: Provided that where such consideration is not an ascertained amount the forest officer executing the contract shall make an estimate of the total amount that would be payable if the contract were fully complied with, and such estimate shall be deemed to be., for the purpose of this sub rule, the total consideration to be paid by the contractor.
(3) This sum shall be realized from the contractor if the contract has been duly terminated in accordance with the provisions of rule 30, and then only under the written order of the forest officer executing the contract." Shri Ram Reddy, for the respondent, urges that ascertaining the amount which is to be levied as a penalty need not be preceded by the termination of the contract.
Indeed, according to him, it is only` if there is an investigation of the nature of the breach, the quantum of loss inflicted on the State and other circumstances that a decision as to whether the contract should be terminated or not can be taken.
If it is found that the breach of condition be willful and the damage substantial, the penalty will be imposed under r. 29 and a decision will be taken for termination of the contract.
However, the sum fixed as penalty shall not be realised from the contractor until the contract has been duly terminated in accordance with the provisions of r. 30.
This is because you cannot keep a contract alive and claim that a grave breach of conditions has been committed.
That would be too inconsistent a stance for the State to adopt.
It is true that the termination of the contract under r. 30 is a condition precedent to realisation of the penalty from the contractor but realisation is different from imposition.
The forest authorities quantify and impose the penalty.
The revenue authorities as well as the forest authorities adopt the various steps prescribed in r. 30(3) for realisation of the sum In the present case it was the Tehsildar who sought to realise the penalty and he did this after the contract was terminated.
Indeed, r. 30(3) uses the expression 'recover ' which is in consonance with 'realise ' in r. 29(3) .
We think that the true meaning of rr. 29 and 30, read together, is that the forest authorities must move from stage to stage in the following manner.
Once they detect a breach, they must investigate to understand and estimate, the nature and degree of damage caused by the breach.
If it is serious, they must proceed to ascertain the 775 sum to be fixed as penalty.
In doing this, a reasonable opportunity must be given to the affected party.
After that the penalty shall be quantified and the contract shall be terminated, in the event of the authorities coming to the decision that the breach is grave enough for that drastic step.
Once the contract is terminated, the last procedure is realisation which can in no case be before the termination of the contract.
The realisation of the penalty may be in one or other of the was set out for recovery under r. 30.
Of course, if the breach is of a venial nature, r. 31 is attracted, the contract is continued and only a small portion of the penalty envisaged in r. 29 is collected.
The view we have taken of the scheme of the rules leaves us in no doubt that the order of penalty is right and the judgment of the Division Bench is correct in the conclusion and the appeals, in the result, must fail.
The circumstances are such that the litigation is purely induced by the obscure official translation of r. 29 from Urdu to English with an obvious omission of 'not '.
This and the other attendant features of the case persuade us to direct that the parties shall bear their costs throughout.
V.M.K. Appeals dismissed.
| The appellant & Forest Contractor felled trees in excess of the permitted number authorised by the contract entered into by him with the State of Andhra Pradesh Certain penalty was imposed on the appellant under rule 29 of he Forest Contract Rules framed in exercise of the powers conferred by Hyderabad Forest Act The Forest Officer found that the appellant felled more trees and therefore, gave a show cause notice to the appellant The appellant prayed for re enumeration of the trees given from the forest.
He was given an opportunity which was not availed by him to check the stumps in the coupe as desired by him Consequently, a penalty was levied.
Thereafter, the contract was terminated After the termination of the contract the process for recovery of the penalty was started Rule 29 reads as under: (1) Penalty on termination of a contract for breach of conditions: Every forest contract shall be in writing in the form annexed hereto and shall contain a provision whereby the forest contractor binds him self to do all the duties and acts required to be done by or under the contract, and convenants that he and his servants and agents shall abstain from all the acts forbidden by or under such contract (2) The sums to be mentioned in a forest contract as payable in case of a breach of any such stipulation shall not exceed one quarter of the total consideration to be paid by the contractor, and shall be recoverable in accordance with the provisions of the Hyderabad Forest Act 1355 and of this rule Provided that where such consideration is not an ascertained amount the forest officer executing the contract shall make an estimate of the total amount that would be payable if the contract were fully complied with, and such estimate shall be deemed to be for the purpose of this sub rule the total consideration to be paid by the contractor.
(3) This sum shall be realized from the contractor if the contract has been duly terminated in accordance with the provisions of rule 30, and then only under the written order or the forest officer executing the contract" The appellant filed a Writ Petition in the High Court challenging the validity of the imposition of the penalty.
The learned Single Judge allowed the Writ Petition but the Division Bench allowed` the appeal filed by the State In an appeal by certificate, it was contended by the appellant before this Court that the termination of the contract for breach of conditions mentioned in rule 29 should precede the impost of penalty.
It was further contended that the principles of natural justice were violated The respondent contended that ascertaining the amount which is to be levied as a penalty.
need not be preceded by the termination of the contract.
Dismissing the appeal, ^ HELD: 1 It is clear that in the absence of a statutory exclusion of natural justice any exercise of power prejudicially affecting another must be in conformity with the rules of natural justice.
In the present case.
we are satisfied 771 that there is no foundation for the grievance of the appellant on the score of natural justice since an opportunity was afforded to the appellant before finally quantifying the penalty to be levied but the appellant did not avail himself of the opportunity.
[773 E F] 2.
On a true construction of rule 29 once a Forest Authority detects a breach it must investigate the extent and estimate, the nature and degree of damage caused by the breach, If it is serious they must proceed to ascertain the sum to be fixed as penalty.
In doing this, a reasonable opportunity must be given to the affected party.
After that, the penalty shall be quantified and the contract shall be terminated in the event the authorities come to the conclusion that the breach is grave enough for that drastic step.
Once the contract is; terminated the last procedure is realisation which can in no case be before the termination of the contract.
[774H, 775 A B.]
|
Criminal Appeal No. 191 of 1962.
Appeal by special leave from the judgment and order dated April 9, 10 and 12 of 1962 of the Gujarat High Court in Criminal Appeal No. 426 of 1961.
A. section R. Chari, and R. A. Gagrat, for the appellants.
H. R. Khanna, R. H. Dhebar and B. R. G. K. Achar, for the respondent.
The Judgment of the Court was delivered by Subba Rao J.
This appeal by special leave raises an interesting question involving the construction of section 34, read with section 301 of the Indian Penal Code.
The appellants who are 11 in number were accused Nos. 1 to 10 and 12 in the Sessions Court, Mehsana.
The case of the prosecution may be stated thus : In the village of Aithor there are about 300 houses of Kadva Patidars and about 15 to 20 houses of Leva Patidars.
On January 16, 1961, at about 8 P.m. seven persons, who are Leva Patidars, came to the chowk where there is a pan shop cabin of Girdhar Shanker.
These seven persons were, Rama Bhupta, Lakha Madha, Hira Punja, Jetha Nagar, Parshottam Prabhuva, Manor Madha and Gova Shiva.
At the same time the 12 accused also came to that place.
Accused 1 to 6 were each armed with a muzzle loading gun; accused 7, 288 8, 11 and 12 were armed with sticks; accused 9 and 10 were armed with dharias.
Accused I to 4 fired their guns and Rama Bhupta fell down and died near the door of the cabin of Girdhar.
Accused 5 and 6 fired their guns and Lakha Madha was injured.
Accused I fired his gun again and Jetha Nagar received injuries.
Accused 5 and 6 fired again and Hira Punja was injured.
Accused 7 to 12 were inciting accused 1 to 6 to kill all these persons.
Other specific acts were attributed to some of the accused.
The learned Sessions Judge held that Rama Bhupta was killed as a result of the firing by accused 1 to 4, that Lakha Madha was injured by the firing by accused 5 and 6, that Jetha Nagar was injured by the firing by accused 1, that Hira Punja was injured by the firing by accused 5 and 6, that accused 12 caused stick injuries to Lakha and that accused 8 caused injury on the tongue of Parshottam Prabhuva.
The Sessions Judge also held that the 12 accused constituted an unlawful assembly, but their common intention was not to kill Rama Bhupta but only Madha who was not present in the chowk.
He acquitted all the accused under section 302, read with section 149, of the Indian Penal Code, but convicted accused I to 4 under section 302, read with section 34, of the Indian Penal Code and sentenced them to imprisonment for life and to a fine of Rs. 2,000 each; lie convicted all the accused under section 324, read with section 149, of the Indian Penal Code for causing injuries to Hira Punja and others.
Accused 5 to 12 were also convicted under section 326, read with section 34, and section 324, read with section 149 and section 148, of the Indian Penal Code and they were sentenced to various periods of imprisonment and fine.
The accused preferred different appeals against their convictions and sentences and the State of Gujarat filed appeals against the acquittal of accused 5 to 12 under section 302, read with section 149, of the Indian Penal Code.
The State of Gujarat also filed a criminal revision for enhancing sentences passed against all the accused, but it did not file any appeal against the acquittal of accused I to 4 on the charge under section 302, read with section 149, of the Indian Penal Code.
The High Court convicted accused I to 4 under section 302, read with sections 301 and 34, of the Indian Penal Code and confirmed the sentence of life imprisonment passed on them, but set aside the fine imposed on them.
So far as the other accused i.e., accused 5 to 12, are concerned, they were convicted under section 302, read with sections 301 and 34, of the Indian Penal Code and also under section 302, read with section 149, of the said Code.
In the result, the High Court sentenced all the accused to imprisonment for life for the said offences.
289 It is common case that if the conviction of accused 1 to 4 tinder section 302, read with section 34 and section 301, of the Indian Penal Code, was set aside, all the accused would have to be acquitted in regard to the major offences.
It is also not disputed that if the conviction of accused I to 4 under the said sections was confirmed, the appeal filed by the other accused would fail.
The only question, therefore, is whether the conviction of accused I to 4 under section 302, read with sections 34 and 301, of the Indian Penal Code, was correct.
In the appeal Mr. Chari, learned counsel for the appellants, contends that accused I to 4 could not be convicted under section 302, read with section 34, of the Indian Penal Code, as there was no common intention to kill Rama, but Rama was killed under the mistake that he was Madba.
l A mistake by one or other of the accused, the argument proceeds, cannot possibly be "in furtherance of the common intention" of the accused.
He further argues that the provisions of section 301 of the Indian Penal Code cannot be invoked in the circumstances of the case.
To appreciate the argument of the learned counsel it would be convenient at this stage to note exactly the finding given by the High Court.
The High Court found that the common intention of the accused was to kill Madha, that accused 1 to 4 shot at Rama mistaking him for Madha, as Rama had dressed himself in the habiliments similar to those in which Madha used to dress himself and, therefore, the accused shot at Rama under the mistaken belief that be was Madha.
Section 34 of the Indian Penal Code reads "When a criminal act is done by several persons, in furtherance of the common intention of all, each of such persons is liable for that act in the same manner as if it were done by him alone." Section 34 was subject of judicial scrutiny in innumerable cases.
The expression "in furtherance of the common intention of all" was not in the original section, but was inserted in the section by section 1 of Act XXVII of 1870.
The Judicial Committee in Barendra Kumar Ghosh vs Emperor(1) defined the expression "criminal act" in the said section thus: "A criminal act means that united criminal behaviour which results in something for which an individual (1) Cal.
197 (P.C.) : L.R. 52 I.A. 40 290 would be punishable if it were all done by himself alone,that is, in a criminal offence.
" The Judicial Committee in Mahbub Shah vs King Emperor(1) laid down the following 'conditions for its application: "To invoke the aid of section 34 successfully, it must be shown that the criminal act complained against was done by one of the accused persons in the furtherance of the common intention of all; if this is shown, then liability for the crime may be imposed on any one of the persons in the same manner as if the act were done by him alone.
This being the principle, it is clear to their Lordships that common intention within the meaning of the section implies a pre arranged plan, and to convict the accused of an offence applying the section it should be proved that the criminal act was done in concert pursuant to the pre arranged plan.
As has been often observed, it is difficult, if not impossible, to procure direct evidence to prove the intention of an individual; in most cases it has to be inferred from his act or conduct or other relevant circumstances of the case.
" It is, therefore, clear that the criminal act mentioned in section 34 of the Indian Penal Code is the result of the concerted action of more than one person; if the said result was reached in furtherance of the common intention, each person is liable for the result as if he had done it himself.
The question is what is the meaning of the expression "in furtherance, of the common intention".
The dictionary meaning of the word "furtherance" is "advancement or promotion".
If four persons have a common intention to kill A, they will have to do many acts in promotion or prosecution of that design in order to fulfill it.
Some illustrations will clarify the point.
Four persons intend to kill A, who is expected to be found in a house.
All of them participate in different ways.
One of them attempts to enter the house, but is stopped by the sentry and he shoots the sentry.
Though the common intention was to kill A, the shooting of the sentry is in furtherance of the said common intention.
So section 34 applies.
Take another illustration.
If one of the said accused enters the room where the intended victim usually sleeps, but somebody other than the intended victim is sleeping in the room, and on a mistaken impression he shoots him.
The shooting of the wrong man is in furtherance of the common intention and so section 34 applies.
Take (1) L.R. 72 I.A. 148, 153.
291 a third variation of the illustration.
The intended victim has a twin brother who exactly resembles him and the accused who is entrusted with the part of shooting the intended victim, on a mistaken impression, shoots the twin brother.
The shooting of the twin brother is also in furtherance of the common intention.
Here also section 34 applies.
If that much is conceded we do not see any justification why the killing of another under a mistaken impression of identity is not in furtherance of the common intention to kill the intended victim.
When the accused were shooting at Rama believing him to be Madha, they were certainly doing a criminal act in furtherance of the common intention which was to kill Madha.
They killed Rama because they believed that they were shooting at Madha.
Mr. Chari argues, how can a mistake committed by one of the accused be in furtherance of a common intention ? For it is said that to commit a mistake was not a part of the common intention of the accused.
But the question is not, as we have pointed out, whether the committing of a mistake was a part of the common intention, but whether it was done in furtherance of the common intention.
If the common intention was to kill A and if one of the accused kills B to wreak out his private vengeance, it cannot possibly be in furtherance of the common intention for which others can be constructively made liable.
But, on the other hand if he kills B bona fide believing that he is A, we do not see any incongruity in holding that the killing of B is in furtherance of the common intention.
We, therefore, hold that without the aid of section 301 of the Indian Penal Code it can be held that when accused I to 4 shot at Rama they shot at him in furtherance of their common intention to kill Madha.
Now let us see the impact of section 301 of the Indian Penal Code on section 34 thereof.
Section 301 reads: "If a person, by doing anything which he intends or knows to be likely to cause death, commits culpable homicide by causing the death of any person, whose death he neither intends nor knows himself to be likely to cause, the culpable homicide committed by the offender is of the description of which it would have been if he had caused the death of the person whose death he intended or knew himself to be likely to cause.
" This section deals with a different situation.
It embodies what the English authors describe as the doctrine of transfer of malice or the transmigration of motive.
Under the section if A intends to kill B, but kills C whose death he neither intends nor knows himself to be likely to cause, the intention to kill C is by law 292 attributed to him.
If A aims his shot at B, but it misses B either because B moves out of the range of the shot or because the shot misses the mark and hits some other person C, whether within sight or out of sight, under section 301, A is deemed to have hit C with the intention to kill him.
What is to be noticed is that to invoke section 301 of the Indian Penal Code A shall not have any intention to cause the death or the knowledge that he is likely to cause the death of C.
In the instant case this condition is not complied with.
The accused shot at a particular person with the intention of killing him though under a misapprehension of his identity.
In that case, all the ingredients of sections 299 and 300 of the Indian Penal Code are complied with.
The aid of section 301 of the Indian Penal Code is not called for.
We are, therefore, of the opinion that section 301 of the Indian Penal Code has no application to the present case.
For the foregoing reasons we hold that all the accused are liable under section 302, read with section 34, of the Indian Penal Code.
If we reach this conclusion, it is conceded that no other point arises in this appeal.
The appeal fails and is dismissed.
Appeal dismissed.
| Where four persons shot at the deceased with the intention of killing him but under a misapprehension that he was some one else they could be found guilty of an offence under section 302 of the Indian Penal Code, read with section 34 of the Code.
It would be a case of killing the deceased in furtherance of their common intention to kill the other, and there would not be any necessity to invoke section 301 of the Code to find them guilty.
In fact that section would apply only to cases where there was, no intention to cause the death, or knowledge that death was likely to be caused, of the deceased.
[291D E, H; 292A B].
Barendra Kumar Ghosh vs Emperor, L.R. 52 I.A. 40 and Mahbub Shah vs King Emperor, L.R. 72 I.A. 148 referred to.
|
Criminal Appeal No. 385 of 1991.
From the Judgment and Order dated 18.4.1988 of the Andhra Pradesh High Court in Crl.
Revision Petition No. 41 of 1987.
M.C. Bhandare and Ms. C.K. Sucharita for the Appellants.
C.N. Sreekumar and G. Prabhakar (for the State) for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Leave is granted.
Appeal is taken oj board for final hearing by consent of parties.
The 1st appellant and the 1st respondent were married ar Tirupati on February 27, 1975.
They separated in July 1978.
The 1st appellant filed a petition for dissolution of marriage in the Circuit of St. Louis Country Missouri, USA.
The 1st respondent sent her reply from here under protest.
The Circuit Court passed a decree for dissolution of marriage on February 19, 1980 in the absence of the 1st respondent.
826 2.
The 1st appellant had earlier filed a petition for dissolution of marriage in the Sub Court of Tirupati being O.P. No. 87/86.
In that petition, the 1st appellant filed an application for dismissing the same as not pressed in view of the decree passed by the Missouri Court.
On August 14, 1991 the learned sub Judge of Tirupati dismissed the petition.
On November 2, 1981, the 1st appellant married the 2nd appellant in Yadgirigutta, 1st respondent filed a criminal complaint against the appellants for the offence of bigamy.
It is not necessary to refer to the details of the proceedings in the said complaint.
Suffice it to say that in that complaint, the appellants filed an application for their discharge in view of the decree for dissolution of marriage passed by Missouri Court.
By this judgment of October 21, 1986, the learned Magistrate discharged the appellants holding that the complainant, i.e., the 1st respondent had failed to make out a prima facie case against the appellants.
Against the said decision, the 1st respondent preferred a Criminal Revision Petition to the High Court and the High Court by the impugned decision of April 18, 1987 set aside the order of the magistrate holding that a photostat copy of the judgment of the Missouri Court was not admissible in evidence to prove the dissolution of marriage.
The Court further held that since the learned Magistrate acted on the photostat copy, he was in error in discharging the accused and directed the Magistrate to dispose of the petition filed by the accused, i.e., appellants herein for their discharge, afresh in accordance with law.
It is aggrieved by this decision that the present appeal is filed.
It is necessary to note certain facts relating to the decree of dissolution of marriage passed by the Circuit Court of St. Louis Country Missouri, USA.
In the first instance, the Court assumed jurisdiction over the matter on the ground that the 1st appellant had been a resident of the State of Missouri for 90 days next preceding the commencement of the action and that petition in that Court.
Secondly, the decree has been passed on the only ground that there remains no reasonable likelihood that the marriage between the parties can be preserved, and that the marriage is, therefore, irretrievably broken ' '.
Thirdly, the 1st respondent had not submitted to the jurisdiction of the Court.
From the record, it appears that to the petition she had filed two replies of the same date.
Both are identical in nature except that one of the replies begins with an additional averment as follows: ``without prejudice to the contention that this respondent is not submitting to the jurisdiction of this hon 'ble court, this respondent sub 827 mits as follows ' '.
She had also stated in the replies, among other things, that (i) the petition was not maintainable, (ii) she was not aware if the first appellant had been living in the State of Missouri for more than 90 days and that he was entitled to file the petition before the Court, (iii) the parties were Hindus and governed by Hindu Law, (iv) she was an Indian citizen and was not governed by laws in force in the State of Missouri and , therefore, the Court had no jurisdiction to entertain the petition, (v) the dissolution of the marriage between the parties was governed by the and that it could not be dissolved in any other way except as provided under the said Act, (vi) the Court had no jurisdiction to enforce the foreign laws and none of the grounds pleaded in the petition was sufficient to grant any divorce under the .
Fourthly, it is not disputed that the 1st respondent was neither present nor represented in the Court passed the decree in her absence.
In fact, the Court has in terms observed that it had no jurisdiction ``in personam ' ' over the respondent or minor child which was born out of the wed lock and both of them had domiciled in India.
Fifthly, in the petition which was filed by the 1st appellant in that Court on October 6, 1980, besides alleging that he had been a resident of the State of Missouri for 90 days or more immediately preceding the filing of the petition and he was then residing at 23rd Timber View Road, Kukwapood, in the Country of St. Louis, Missouri, he had also alleged that the 1st respondent had deserted him for one year or more next preceding the filing of the petition by refusal to continue to live with the appellant in the United States and particularly in the State of Missouri.
On the other hand, the averments made by him in his petition filed in the court of the Subordinate Judge, Tirupati in 1978 shows that he was a resident of Apartment No. 414, 6440, South Claiborn Avenue, New Orleans, Louisiana, United States and that he was a citizen of India.
He had given for the service of all notices and processes in the petition, the address of his counsel Shri PR Ramachandra Rao, Advocate, 16 11 1/3, Malakpet, Hyderabad 500 036.
Even according to his averments in the said petition, the 1st respondent had resided with him at Kuppanapudi for about 4 to 5 months after th marriage.
Thereafter she had gone to her parental house at Relangi, Tanuka Taluk, West Godawari District.
He was, thereafter, sponsored by his friend Prasad for a placement in the medical service in the United States and had first obtained employment in Chicago and thereafter in Oak Forest and Greenville Springs and ultimately in the Charity Hospital in Louisiana at New Orleans where he continued to be emp 828 loyed.
Again according to the averments in the said petition, when the 1st respondent joined him in the United States, both of them had stayed together as husband and wife at New Orleans.
The 1st respondent left his residence in New Orleans and went first to Jackson, Texas and, thereafter, to Chicago to stay at the residence of his friend, Prasad.
Thereafter she left Chicago for India.
Thus it is obvious from these averments in the petition that both the 1st respondent and the 1st petitioner had last resided together at New Orleans, Louisiana and never within the jurisdiction of the Circuit Court of St. Louis Country in the State of Missouri.
The averments to that effect in the petition filed before the St. Louis Court are obviously incorrect.
Under the provisions of the (hereinafter referred to as the ``Act ' ') only the District Court within the local limits of whose original civil jurisdiction (i) the marriage was solemnized, or (ii) the respondent, at the time of the presentation of the petition resides, or (iii) the parties to the marriage last resided together, or (iv) the petitioner is residing at the time of the presentation of the petition, in a case where the respondent is, at the time, residing outside the territories to which the Act extends, or has not been heard of as being alive for a period of seven years of more by those persons who would naturally have heard of him if he were alive, has jurisdiction to entertain the petition.
The Circuit Court of St. Louis Country, Missouri had, therefore, no jurisdiction to entertain the petition according to the Act under which admittedly the parties were married.
Secondly, irretrievable breakdown of marriage is not one of the grounds recognised by the Act for dissolution of marriage.
Hence, the decree of divorce passed by the foreign court was on a ground unavailable under the Act.
Under Section 13 of the Code of Civil Procedure 1908 (hereinafter referred to as the ``Code ' '), a foreign judgment is not conclusive as to any matter thereby directly adjudicated upon between the parties if (a) it has not been pronounced by a Court of competent jurisdiction; (b) it has not been given on the merits of the case; (c) it is founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable; (d) the proceedings are opposed to natural justice, (e) it is obtained by fraud, (f) it sustains a claim founded on a breach of any law in force in India.
As pointed out above, the present decree dissolving the marriage passed by the foreign court is without jurisdiction according to the Act as neither the marriage was celebrated nor the parties last 829 resided together nor the respondent resided within the jurisdiction of that Court.
The decree is also passed on a ground which is not available under the Act which is applicable to the marriage.
What is further, the decree has been obtained by the 1st appellant by stating that he was the resident of the Missouri State when the record shows that he was only a bird of passage there and was ordinarily a resident of the State of Louisiana.
He had, if at all, only technically satisfied the requirement of residence of ninety days with the only purpose of obtaining the divorce.
He was neither domiciled in that State nor had he an intention to make it his home.
He had also no substantial connection with the forum.
The 1st appellant has further brought no rules on record under which the St. Louis Court could assume jurisdiction over the matter.
On the contrary, as pointed out earlier, he has in his petition made a false averment that the 1st respondent had refused to continue to stay with him in the State of Missouri where she had never been.
In the absence of the rules of jurisdiction of that court, we are not aware whether the residence of the 1st respondent within the State of Missouri was necessary to confer jurisdiction on that court, and if not, of the reasons for making the said averment.
Relying on a decision of this Court in Smt.
Satya vs Teja Singh, it is possible for us to dispose of this case on a narrow ground, viz., that the appellant played a fraud on the foreign court residence does not mean a temporary residence for the purpose of obtaining a divorce but habitual residence or residence which is intended to be permanent for future as well.
We remain from adopting that course in the present case because there is nothing on record to assure us that the Court of St. Louis does not assume jurisdiction only on the basis of a mere temporary residence of the appellant for 90 days even is such residence is for the purpose of obtaining divorce.
We would, therefore, presume that the foreign court by its own rules of jurisdiction had rightly entertained the dispute and granted a valid decree of divorce according to its law.
The larger question that we would like to address ourselves to is whether even in such cases, the Courts in this country should recognise the foreign divorce decrees.
The rules of Private International Law in this country are not codified and are scattered in different enactments such as the Civil Procedure Code, the Contract Act, the Indian Succession Act, the Indian Divorce Act, the Special Marriage Act etc.
In addition, some rules have also been evolved by judicial decisions.
In matters of status or legal capacity of natural persons, matrimonial disputes, custody of 830 children, adoption, testamentary and intestate succession etc.
the problem in this country is complicated by the fact that there exist different personal laws and no uniform rule can be laid down for all citizens.
The distinction between matters which concern personal and family affairs and those which concern commercial relationships, civil wrongs etc.
is well recognised in other countries and legal systems.
The law in the former area tends to be primarily determined and influenced by social, moral and religious considerations, and public policy plays a special and important role in shaping it.
Hence, in almost all the countries the jurisdicational procedural and substantive rules which are applied to disputes arising in this area are significantly different from those applied to claims in other areas.
That is as it ought to be.
For, no country can afford to sacrifice its internal unity, stability and tranquility for the sake of uniformity of rules and comity of nations which considerations are important and appropriate to facilitate international trade, commerce, industry, communication, transport, exchange of services, technology, manpower etc.
This glaring fact of national life has been recognised both by the Hague Convention of 1968 on the Recognition of Divorce and Legal Seperations as well as by the Judgments Convention of the European Community of the same year.
Article 10 of the Hague Convention expressly provides that the contracting States may refuse to recognise a divorce or legal separation if such recognition is manifestly incompatible with their public policy.
The Judgments Convention of the European Community expressly excludes from its scope (a) status or legal capacity of natural persons, (b) rights in property arising out of a matrimonial relationship, (c) wills and succession, (d) social security and (e) bankruptcy.
A separate convention was contemplated for the last of the subjects.
We are in the present case concerned only with the matrimonial law and what we state here will apply strictly to matters arising out of and ancillary to matrimonial disputes.
The Courts in this country have so far tried to follow in these matters the English rules of Private International Law whether common law rules or statutory rules.
The dependence on English Law even in matters which are purely personal, has however time and again been regretted.
But nothing much has been done to remedy the situation.
The labours of the Law Commission poured in its 65th Report on this very subject have not fructified since April 1976, when the Report was submitted.
Even the British were circumspect and hesitant to apply their rules of law in such matters during their governance of this country and had left the family law to be governed by the customary rules of the diffe 831 rent communities.
It is only where was a void that they had stepped in by enactments such as the Special Marriage Act, Indian Divorce Act, Indian Succession Act etc.
In spite, however, of more than 43 years of independence we find that the legislature has not thought it fit to enact rules of Private International Law in this area and in the absence of such initiative from the legislature the courts in this country their inspiration, as stated earlier, from the English rules.
Even in doing so they have not been uniform in practice with the result that we have some conflicting decisions in the area.
We cannot also lose sight of the fact that today more than ever in the past, the need for definitive rules for recognition of foreign judgments in personal and family matters, and particularly in matrimonial disputes has surged to the surface.
Many a man and woman of this land with different personal laws have migrated and are migrating to different countries either to make their permanent abode there or for temporary residence.
Likewise there is also immigration of the nationals of other countries.
The advancement in communication and transportation has also made it easier for individuals to hop from one country to another.
It is also not unusual to come across cases where citizens of this country have been contracting marriages either in this country or abroad with nationals of the other countries or among themselves, or having married here, either both or one of them migrate to other countries.
There are also cases where parties having married here have been either domiciled or residing separately in different foreign countries.
This migration, temporary or permanent, has also been giving rise to various kinds of matrimonial disputes destroying in its turn the family and its peace.
A large number of foreign decrees in matrimonial matters is becoming the order of the recognition of the foreign judgments in these matters.
The minimum rules of guidance for securing the certainty need not await legislative initiative.
This Court can accomplish the modest job within the framework of the present statutory provisions if they are rationally interpreted and extended to achieve the purpose.
It is with this intention that we are undertaking this venture.
We aware that unaided and left solely to our resources the rules of guidance which we propose to lay down in this area may prove inadequate or miss some aspects which may not be present to us at this juncture.
But a begining has to be made as best as one can, the lacunae and the errors being left to be filled in and corrected by future judgments.
832 12.
We believe that the relevant provisions of Section 13 of the Code are capable of being interpreted to secure the required certainty in the sphere of this branch of law in conformity with public policy, justice, equity and good conscience, and the rules so evolved will protect th sanctity of the institution of marriage and the unity of family which are the corner stones of our societal life.
Clause (a) of Section 13 states that a foreign judgment shall not be recognised if it has not been pronounced by a court of competent jurisdiction.
We are of the view that this clause should be interpreted to mean that only that court will be a court of competent jurisdiction which the Act or the law under which the parties are married recognises as a court of competent jurisdiction to entertain the matrimonial dispute.
Any other court should be held to be a court without jurisdiction unless both parties voluntarily and unconditionally subject themselves to the jurisdiction of that court.
The expression ``competent court ' ' in Section 41 of the has also to be construed likewise.
Clause (b) of Section 13 states that if a foreign has not been given on the merits of the case, the courts in this country will not recognise such judgment.
This clause should be interpreted to mean (a) that the decision of the foreign court should be on a ground available under the law under which the parties are married, and (b) that the decision should be a result of the contest between the parties.
The latter requirement is fulfilled only when the respondent is duly served and voluntarily and unconditionally submits himself/herself to the jurisdiction of the court and contests the claim, or agrees to the passing of the decree with or without appearance.
A mere filing of the reply to the claim under protest and without submitting to the jurisdiction of the court, or an appearance in the Court either in person or through a representative for objecting to the jurisdiction of the Court, should not be considered as a decision on the merits of the case.
In this respect the general rules of the acquiescence to the jurisdiction of the Court which may be valid in other matters and areas should be ignored and deemed inappropriate.
The second part of clause (c) of Section 13 states that where the judgment is founded on a refusal to recognise the law of this country in cases in which such law is applicable, the judgment will not be recognised by the courts in this country.
The marriages which take place in this country can only be under either the customary or the statutory law in force in this country.
Hence, the only law that can be applicable 833 to the matrimonial disputes is the one under which the parties are married, and no other law.
When, therefore, a foreign judgment is founded on a jurisdiction or on ground not recognised by such law, it is a judgment which is in defiance of the Law.
Hence, it is not conclusive of the matters adjudicated therein and therefore, unenforceable in this country.
For the same reason, such a judgment will also be unenforceable under clause (f) of Section 13, since such a judgment would obviously be in breach of the matrimonial law in force in this country.
Clause (d) of Section 13 which makes a foreign judgment unenforceable on th ground that the proceedings in which it is obtained are opposed to natural justice, states no more than an elementary principle on which any civilised system of justice rests.
However, in matters concerning the family law such as the matrimonial disputes, this principle has to b extended to mean something more than mere compliance with the technical rules of procedure.
If the rule of audi alteram partem has any meaning with reference to the proceedings in a foreign court, for the purposes of the rule it should not be deemed sufficient that the respondent has been duly served with the process of the court.
It is necessary to ascertain whether the respondent was in a position to present or represent himself/herself and contest effectively the said proceedings.
This requirement should apply equally to the appellate proceedings if and when they are file by either party.
If the foreign court has not ascertained and ensured such effective contest by requiring the petitioner to make all necessary provisions for the respondent to defend including the costs of travel, residence and litigation where necessary, it should be held that the proceedings are in breach of the principles of natural justice.
It is for this reason that we find that the rules of Private International Law of some countries insist, even in commercial matters, that the action should be filed in the forum where the defendant is either domiciled or is habitually resident.
It is only in special cases which is called special jurisdiction where the claim has some real link with other forum that a judgment of such forum is recognised.
This jurisdiction principle is also recognised by the Judgments Convention of this European Community .
If, therefore, the courts in this country also insist as a matter of rule that foreign matrimonial judgment will be recognised only it it is of the forum where the respondent is domiciled or habitually and permanently resides, the provisions of clause (d) may be held to have been satisfied.
The provision of clause (e) of Section 13 which requires that the 834 courts in this country will not recognise a foreign judgment if it has been obtained by fraud, is self evident.
However, in view of the decision of this Court in Smt.
Satya vs Teja Singh, (supra) it must be understood that the fraud need not be only in relation to the merits of the mater but may also be in relation to jurisdictional facts.
From the aforesaid discussion the following rule can be deduced for recognising foreign matrimonial judgment in this country.
The jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under which the parties are married.
The exceptions to this rule may be as follows: (i) where the matrimonial action is filed in the forum where the respondent is domiciled or habitually and permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married; (ii) where the respondent voluntarily and effectively submits to the jurisdiction of the forum as discussed above and contests the claim which is based on a ground available under the matrimonial law under which the parties are married; (iii) where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties.
The aforesaid rule with its stated exceptions has the merit of being just and equitable.
It does no injustice to any of the parties.
The parties do and ought to know their rights and obligations when they marry under a particular law.
They cannot be heard to make a grievance about it later or allowed to bypass it by subterfuges as in the present case.
The rule also has an advantage of rescuing the institution of marriage from the uncertain maze of the rules of the Private International Law of the different countries with regard to jurisdiction and merits based variously on domicile, nationality, residence permanent or temporary or ad hoc forum, proper law etc.
and ensuring certainty in the most vital field of national life and conformity with public policy.
The rule further takes account of the needs of modern life and makes due allowance to accommodate them.
Above all, it gives protection to women, the most vulnerable section of our society, whatever the strata to which they may belong.
In particular it frees them from the bondage of the tyrannical and servile rule that wife 's domicile follows that of her husband and that it is the husband 's domicilliary law which determines the jurisdiction and judges the merits of the case.
Since with regard to the jurisdiction of the forum as well as the ground on which it is passed the foreign decree in the present case 835 is not in accordance with the Act under which the parties were married, and the respondent had not submitted to the jurisdiction of the court or consented to its passing, it cannot be recognised by the courts in this country and is, therefore, unenforceable.
The High Court, as stated earlier, set aside the order of the learned Magistrate only on the ground that the photostat copy of the decree was not admissible in evidence.
The High Court is not correct in its reasoning.
Under Section 74(1)(iii) of the (Hereinater referred to as the "Act") documents forming the acts or records of the acts of public judicial officers of a foreign country are public documents.
Under Section 76 read with Section 77 of the Act, certified copies of such documents may be produced in proof of their contents.
However, under Section 86 of the Act there is presumption with regard to the genuineness and accuracy of such certified copy only if it is also certified by the representative of our Central Government in or for that country that the manner in which it has been certified is commonly in use in that country for such certification.
Section 63(1) and (2) read with Section 65(e) and (f) of the Act permits certified copies and copies made from the original by mechanical process to be tendered as secondary evidence.
A photostat copy is prepared by a mechanical process which in itself ensures the accuracy of the original.
The present photostat copies of the judicial record of the Court of St. Louis is certified for the Circuit Clerk by the Deputy Clerk who is a public officer having the custody of the document within the meaning of Section 76 of the Act and also in the manner required by the provisions of the said section.
Hence the Photostat copy per se is not inadmissible in evidence.
It is inadmissible because it has not further been certified by the representative of our Central Government in the United States as required by Section 86 of the Act.
The expression "certified copy" of a foreign judgment in Section 14 of the Code has to be read consistent with the requirement of Section 86 of the Act.
While, therefore, holding that the document is not admissible in evidence for want of the certificate under Section 86 of the Act and not because it is a photostat copy of the original as held by the High Court, we uphold the order of the High Court also on a more substantial and larger ground as stated in paragraph 14 above.
Accordingly, we dismiss the appeal and direct the learned Magistrate to proceed with the matter pending before him according to law as expenditiously as possible, preferably within four months from now as the prosecution is already a decade old.
T.N.A. Appeal dismissed.
| The respondents are manufacturers of high strength spirit.
They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of U.P.
The excise duty on military rum for export was Rs.7 per L.P. Litre while the rate for consumption within the State was Rs.21 per L .P. Litre.
An allowance upto 0.5 per cent for wastage during transit by leakage, evaporation etc.
was provided.
Against a proper permit the respondents supplied rum to the Officer Commanding Rail Road Depot.
A.S.C., Pathankot at the distillery premises and the consignments were taken by the consignees under the seal of the railway authorities to their respective destinations.
By a notification dated March 26, 1979, issued in super session to earlier notification, the Governor was pleased to direct that with effect from April 1, 1970 duty shall be imposed on country spirit at the rates mentioned in the schedule and that the duty was payable before issue from the distillery or bonded warehouse concerned save in the case of issued under bond.
Accordingly a notice was issued to the respondents demanding Rs.4,295.55P on the wastage which was termed as "excess transit wastage" of rum calculated at the maximum rate of Rs.21 per L .P. Litre.
The representation against the demand having been rejected, they filed a writ petition before the High Court challenging the validity of the orders and praying for a mandamus commanding the State of U.P. not to realise or adjust any amount of duty towards wastage from the respondents ' advance duty account and restraining them from giving effect to the impugned orders.
The High Court allowed the respondents ' writ petition holding that the State of U.P. and the Excise authorities were not entitled to levy 169 excise duty on the wastage of liquor in transit.
Hence this appeal by the State.
On the question, whether differential duty is leviable.
under the Act and the Rules.
Allowing the appeal, this Court, HELD: The Act having provided for fixed wastage allow ance also in effect provided that the excess above the allowable wastage will be taxed.
It cannot therefore be said that no such charging up of excise duty on the excess wast age in transit could be validly made.
[179E] Absolute equality and justice is not attainable in taxing laws.
Legislature must be left to decide the State policy within constitutional limitations.
[179F] Rules 636 and 814 are of regulatory character and they are precautionary against perpetration of fraud on the excise revenue of the exporting State.
A statute has to be construed in the light of the mischief it was designed to remedy.
[180D] In the instant case, the military rum was obtained for the purpose of export and the lower export duty was paid and only when the rum did not result in export the question of imposing the differential duty arose.
The notion of the excise duty being changed or cancelled on account of what transpires later is not foreign to excise law.
[182H] Drawback means the repayment of duties or taxes previ ously charged on commodities, from which they are relieved on exportation.
[183B] The system of charging up the duty on the subsequent event of non export cannot, therefore, be said to be irre spective of production or manufacture.
[183C] In the instant case, if it is proved to the satisfaction of the appropriate authorities that counter vailing duty had been paid on the entire consignment irrespective of the wastage then the question would arise as to whether the wastage could be ignored altogether by the exporting State as was done by the importing State.
[183D] A.B. Abdulkadir vs State of Kerala, ; ; Bimal Chandra Banerjee vs State of Madhya Pradesh, 467; State of Mysore & Ors.
vs M/s. D. Cawasji and Co., ; ; M/s. Mohan Meakin Breweries Ltd. vs Excise M/s. Mc Dowell and Co. Ltd. vs Commercial Tax Officer, VII Circle, Hyderabad, ; ; Kalyani Stores vs State of Orissa and Ors., ; ; Excise Commissioner, U.P. vs Ram Kumar, and State of Madhya Pradesh vs Firm Gappulal, ; , referred to.
Ajudhia Distillery Rajaka, Sahaspur vs State of U.P. and Anr., [1980] Taxation Law Repons 2262, overruled.
|
Appeal No. 180 of 1962.
Appeal by special leave from the judgment and decree dated January 28, 1959, of the Calcutta High Court from original Decree No. 226 of 1952.
B. Sen and section N. Mukherjee, for the appellant.
Hem Chandra Dhar, section section Khanduja and Ganpat Rai, for the respondent.
The Judgment of the Court was delivered by Mudholkar, J.
This appeal, like Satyabrata Ghose vs Mugnee ram Bangur & Co. and another(1) relates to the effect of requisitioning orders made by the Government during the last war under which they took possession of land belonging to the appellant company which had been divided into building plots by them in pursuance of what is known as the Lake Colony Scheme, by constructing roads and drains.
The plaintiff respondent was one of the various persons who had entered into contracts with the company for purchase of plots, in pursuance of the public offers made by the company.
This he did by addressing the following letter to the company and paying Rs. 202/ by way of earnest money. "To Mugneeram Bangur and Company Land Department.
Russa Road, South, Tollygunge, Calcutta.
No. 499, Phone: South 135.
Through Babu Re : Plots Nos.
New Nos.
245 and 246 on 30 feet road in the premises No. Lake Colony Scheme No. 1, Northern: Block.
Area measuring 10 ks.
x sqr.
ft more or less.
(1) ; 632 Dear Sir, I am willing to purchase the above plot of land from you at the average rate of Rs. 1,075/ (Rupees one thousand and seventyfive only) per katta irrespective of the condition of the soil and I am ready to deposit Rs. 202/ of the actual value as an earnest money at once.
I undertake to complete the transaction within one month from the date on(?) (of) completion of road on payment of the balance of the consideration money and time must be deemed as essence of the contract.
If I fail to do so within the said period the earnest money deposited by me will be forfeited and you will be free to resell the land and I shall be liable for all damages that may result thereby.
I also agree to sign a formal agreement in the form required by you if you so desire.
Yours faithfully, Name, Gurbachan Singh, Address: 48/ 1, Chakraberia Road, North.
Dated the 19 .
Witness : (Illegible) Address . . .
N.B. I agree to pay half of the value at the time of registration of the deeds and the balance within 6 years bearing interest at the rate of 6 per cent per annum with half yearly rests and the said plots Nos : 245 and 246 purchased by me shall remain charged for the payment of the balance of the purchase money in manner as aforesaid and the necessary security deed charged should be executed and registered by me at my own cost.
Name: Gurbachan Singh Address : Witness (Illegible) 4, Baktiar Shah Road, Tollygunge.
The letter does not bear any date; but probably it was written on May 14, 1941 which is the date on which the company issued a receipt in his favour.
Different portions of the land covered by the scheme were requisitioned by Government between November 12, 1941 and July 25, 1944.
The plots which the respondents had contracted to purchase are said to form part of the land which was requisitioned by virtue of an order made by the Government on February 18, 1944.
633 According to the company, on December 24, 1943, a circular notice was sent to all those persons who had entered into contracts for purchase of plots from them stating that a considerable portion of the land comprised in the Lake Colony Scheme area had been requisitioned under the Defence of India Rules and was taken into possession by the Government.
It was not possible to say how long the Government would continue to be in possession and, therefore, it was not possible for the company to carry on the work of the construction of roads and drains during the continuance of the war and possibly for many years even after the termination of the war.
The circular then proceeded to state as follows : "In these circumstances we have decided to treat the agreement as cancelled and give you the option of taking of the refund of the earnest money deposited by you within one month from the receipt of this letter.
In the event of your refusal to treat the contract as cancelled, we are offering you, in the alternative, to complete the registration of the conveyance of the sale deed within one month from the receipt of this letter.
In such a case you have to take the lands as it is now, the road and drain will be made by us as soon as circumstance will permit after the termination of the War.
If you do not exercise your option in any of the two ways mentioned above the agreement will be deemed to have been cancelled and your earnest money forfeited.
" On May 8, 1946 the respondent 's attorneys, acting under instructions, wrote to the company saying that the respondent had learnt from the company 's office that the government would be de requisitioning lands taken over by them and inquiring of the company as to when it would be possible for the company to deliver possession of the plots to the respondent.
In reply to that letter the company wrote on May 29, 1946 drawing his attention to their circular letter and said that by reason of the failure of the respondent to exercise the options given by them therein the agreement stood cancelled and the earnest money had been forfeited.
On June 13, 1946, the respondent 's attorneys expressed sur prise at the company 's reply and stated that the respondent had not received the circular referred to in the company 's reply and ended by saying as follows : "That my said client, therefore, now hereby asks you as to when you are going to complete the roads, so that he may do the needful for completion of the conveyances 634 within one month from such date of completion of the roads.
That my said client hereby calls upon you to intimate to him within seven days from date the expected exact date of completion of roads to enable him to complete the conveyance as per agreement, failing which he will be forced to take legal steps against you in the matter as he may be advised in the matter, without further reference which please note.
" Apparently the company did nothing with the result that the present suit was instituted by the respondent on August 8, 1946 in the court of the Second Subordinate Judge at Alipore.
The company resisted the suit on various grounds but only two are material for the purpose of this appeal because Mr. Sen has confined his argument only to those matters.
One is that the contract has been discharged by reason of frustration and the second is that the suit was premature.
The suit was decreed and that decree was upheld by the High Court in appeal.
A certificate that the case was fit for appeal to this Court having been refused by the High Court the company sought and obtained from this court special leave to appeal.
That is how the matter comes up before us.
This case would really appear to be covered by the decision of this court to which we have referred at the outset.
Mr. Sen, however, points out that the question as to whether the contract could be said to have been discharged because of the fact that its performance was rendered unlawful as a result of the requisitioning orders made by the Government which was sought to be raised before this Court in that case was not permitted to be raised by it and has been left open.
He admits that certain observations made by this Court towards the concluding portion of the judgment would indicate that this Court was not prepared to accept the con tention sought to be urged before it.
But, Mr. Sen says that as the contention was not permitted to be raised, the observations of this Court could be said to have been made merely in passing and at best be regarded as a tentative expression of its views.
We think Mr. Sen is right in the sense that the question has been actually left open by this Court.
But even so, we will have to consider whether the grounds upon which the previous decision rests would not be relevant for consideration in connection with the argument advanced by Mr. Sen. 635 In so far as discharge of contract by reason of frustration is concerned there is no question of implying a term in the contract a term fundamental for its performance, as is done by the courts in England because we have here the provisions of section 56 as well as those of section 32 of the Contract Act.
This is what was held by this Court in the earlier case and that decision binds us.
No doubt, a contract can be frustrated either because of supervening impossibility of performance or because performance has become unlawful by reason of circumstances for which neither of the parties was responsible.
In the earlier case this Court has held that where the performance of an essential condition of the contract has become impossible due to supervening circumstances the contract would be discharged.
This Court has further held that the impossibility need not be an absolute one but it is sufficient if further performance becomes impracticable by some cause for which neither of the parties was responsible.
It, however, held that the mere fact that the performance of an essential term of the contract that is to say, of undertaking development of the area under the scheme could not be undertaken because the land had been requisitioned, did not have the effect of frustrating the contract.
For though the term regarding development was an essential term of the contract, the requisitioning of the land was only for a temporary period.
Further the parties had deliberately not placed any time limit within which roads and drains had to be made apparently because they were aware of the difficulties in carrying on the work on account of scarcity of materials and the various restrictions which the Government had placed on such activities.
This Court also pointed out: "Another important thing that requires notice in this connection is that the war was already on, when the parties entered into the contract.
Requisition orders for taking temporary possession of lands for war purposes were normal events during this period." (pp. 326 327).
Though these observations were made while dealing with the argument that the contract has been frustrated by reason of impossibility of performance they would not be wholly out of place while considering the argument based upon the ground that continued performance of the contract had been rendered unlawful.
What section 56 speaks of is a contract, the performance of which has become unlawful.
Now, it is true that no order was made under the Defence of India Rules prohibiting the company from carrying on the work of construction of roads and drains.
The 636 actual order served upon the company, among other things, provides : "The owner/occupier of the said land: (a) shall place the said land at the disposal and under the control of the Military Estates Officer Bengal Circle on and from the 14th November, 1941 at 1 P.M. Bengal time until six months after the termination of the present war unless relinquished earlier." In consequence of this order the company lost possession of the land and automatically lost access thereto.
Without getting on to the land the company could not carry out its obligation to the purchasers of constructing the roads and drains.
If, in disobedience of this order, the company 's servants, agents or contractors were to carry on the work of construction of the roads and drains by entering on the land of which the possession was with the government, they would have been liable to punishment under sub r. (7) of r. 75 (a) of the Defence of India Rules and also the company.
We were informed that the land was used by the Government for military purposes.
It is, therefore, possible that the land might have been declared as a protected place under r. 7 of the Defence of India Rules.
Even, however, without such a declaration, we agree with Mr. Sen that it would not have been possible for the company, its agents, servants or contractors to go on the land during the continuance in force of the order of requisition without being rendered liable at law.
Even so it is clear that all that had become unlawful was to construct roads and drains while the land was bound to be given up by the Government sometime or other and, therefore, in essence the activities which were rendered unlawful were not forbidden for all time but only temporarily.
It may be that the duration of the embargo was uncertain but not permanent.
It would, therefore, be relevant to enquire whether a contract could properly be held to be frustrated because for a certain period of time its performance has become unlawful.
According to Mr. Sen the moment it became unlawful for one of the parties to the contract to continue with the performance, the contract was discharged and in this connection he referred us to certain observations of Lord Wright in Denny Mott & Diskson Ltd. vs james B. Fraser & Co. Ltd.,() and certain other portions of the report.
We put to him the question as to what would be the.
effect of a requisitioning, say, for a period of one month.
Would that operate as &charge of the (1) ; , 274.
637 contract ? To that his answer was in the negative and we think that the answer was right.
The question then would be : would it make any difference if unlawfulness would attach to the performance of the contract for an indeterminate period ? In our judgment if time is of the essence of the contract or if time for performance is set out in the contract it may be that the contract would stand discharged even though its performance may have been rendered unlawful for an indeterminate time provided unlawfulness attached to the performance of the contract at the time when the contract ought to have been performed.
Thus, where the performance of a contract had been rendered unlawful by reason of some subsequent event the contract would stand discharged but such discharge will take place not necessarily from the date on which the further performance was rendered unlawful, unless further performance was rendered unlawful for all time.
If the performance of the contract is rendered unlawful either for a determinate period of time or for an indeterminate period of time the contract would not stand discharged unless the ban on its performance existed on the day or during the time in which it has to be performed.
Here it is pointed out by Mr. Sen that the respondent had made time the essence of the contract but that only applies to the grant of conveyance after the completion of the roads and drains.
As already pointed out, parties were wholly silent as to the time within which the roads and drains were to be completed.
Therefore, in so far as this aspect of the contract is concerned time was in no sense made the essence of the contract.
According to Mr. Sen, however, where the parties have failed to specify in the contract time within which it has to be performed section 46 of the Contract Act comes in and the parties may be presumed to have agreed that the contract will be performed within reasonable time.
To that the answer would be the same as that given in the earlier case, that is, the parties when they entered into the contract, knew the prevailing circumstances and must have home in mind the possibility that something like what actually happened may happen and, therefore, did not specify the time within which the land had to be developed.
In other words, the parties intended to exclude from the computation of reasonable time such time as was taken up in procuring the necessary material which was not easy to obtain and such as may be taken up if the land were requisitioned by government.
Thus, in our view it cannot be said that because of the requisitioning orders which had the effect of making the entry by or on behalf of the company on the land illegal during the subsistence of the period of requisitioning the contract stood discharged.
p.55 7 638 Then remains the other point argued by Mr. Sen. He said that the suit for specific performance was premature because under the agreement the respondent did not get a right to obtain a sale deed till after the development of the land comprised in the scheme was completed.
That is perfectly true.
But the fact remains that this work had been completed when the appeal was heard by the High Court.
The Court would in such a case be justified in taking notice of subsequent events in moulding its relief accordingly.
In our judgment the courts below were right in upholding the respondent 's claim.
The apeal is dismissed with costs.
Appeal dismissed.
| The appellant company made a claim under section 5 of the Income tax (Double Taxation Relief) (Indian States) Rules, 1939, for refund of the income tax paid by it in an Indian State.
The claim was rejected by the Income tax Officer as time barred.
The Commissioner of Income tax and the Central Board of Revenue refused to interfere and the appellant sought no further legal remedy against their orders.
Subsequently on certain tax demands being made by the Income tax Officer, the appellant made representation that the amounts in respect of which application had earlier been made under r. 5 should be set off against the demand as provided by section 49E of the Indian Income tax Act, 1922.
The Income tax authorities having rejected this claim also, the appellant went to the High Court under article 226 of the Constitution.
The High Court held that the expression found to be due" in section 49E clearly meant that there must be, prior to the claim of set off, an adjudication whereunder an amount is found due by way of refund to the person claiming set off.
Since there was no such adjudication in the appellant 's favour, the writ petition was dismissed.
However a certificate of fitness under article 133(1) (c) was granted to the appellant.
HELD : (i) It is not necessary that there should be a prior adjudication before a claim can be allowed under section 49E.
There is nothing to debar the Income tax Officer from determining the question whether a refund is due or not when an application is made to him under section 49E.
The words "is found" do not necessarily lead to the conclusion that there must be a prior adjudication.
[419 D E] (ii) The set off under section 49E must however be "in lieu of payment ' which expression connotes that payment is outstanding i.e. there is a subsisting obligation on the Income tax Officer to pay.
If a claim to refund is barred by a final order, it cannot be said that there is a subsisting obligation to make the payment.
[419 F G] Stubbs vs Director of Public Prosecutions , relied on.
(iii) In the present case the orders of the Commissioner and the Central Board of Revenue rejecting the appellant 's claim under r. 5 of the Indian State Rules had become final.
They were not challenged even in the petition under article 226.
There was thus no subsisting obligation on the part of the Income tax Officer to make payment to the appellant, and the claim of the appellant under section 49E must therefore, fail.
[419 G H]
|
Appeal No. 352 of 1958.
Appeal by special leave from the judgment and order dated July 27, 1956, of the Labour Appellate Tribunal of India, Bombay, in Appeal (Bom.) No. 72 of 1956.
G. section Pathak, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellant.
D. section Nargoulkar and K. R. Choudhuri, for the respondent No. 1.
B. P. Maheshwari, for the Interveners.
December 16.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an industrial matter.
The appellant owns two sugar mills.
There was a dispute between the appellant and its workmen with respect to the employment of contract labour in the two mills.
Consequently, a notice of change under section 42 (2) of the Bombay Industrial Relations Act, No. XI of 1947, (hereinafter called the Act) was given to the appellant by the union re.
presenting the workmen.
Thereafter the union, which is the respondent in the present appeal, made two references to the industrial court, one with respect to each mill, under section 73A of the Act, and the main demand in the references was that "the system of employing contractors ' labour should be abolished and the strength of the employees of the respective departments should be permanently increased sufficiently 344 and accordingly".
The appellant raised two main contentions before the industrial court, namely, (i) that the industrial court had no jurisdiction to decide the dispute as the matter was covered by item (6) of Sch.
III of the Act, which is within the exclusive jurisdiction of a labour court; and (ii) that any award directing abolition of contract labour would contravene the fundamental right of the appellant to carry on business under article 19(1)(g) of the Constitution.
The industrial court decided both the points against the appellant; on the question of jurisdiction it held that the matter was covered by item (2) of Sch.
11 of the Act and therefore the industrial court would have jurisdiction, and on the second point it held that there was no contravention of the fundamental right conferred on the appellant under article 19(1)(g).
It may be mentioned that the second point arose on the stand taken by the appellant that the workmen of the contractors were not the workmen of the appellant.
The industrial court then dealt with the merits of the case and passed certain orders, with which we are however not concerned in the present appeal.
It may be mentioned that there were cases relating to a number of other sugar mills raising the same points, which were decided at the same time by the industrial court.
In consequence, there were a number of appeals to the Labour Appellate Tribunal by the mills and one by one of the unions (though not by the respondent union).
All these appeals were heard together by the appellate tribunal, where also the same two points relating to jurisdiction and contra vention of the fundamental right guaranteed by article 19(1)(g) were raised.
The Appellate Tribunal did not agree with the industrial court that the references were covered by item (2) of Sch.
11 to the Act.
It, however, held that the word "employment" in item (6) of Sch.
III to the Act had to be given a restricted meaning.
It pointed out that the three Schedules did not exhaust the comprehensive provisions of section 42(2) and the subject matter of dispute, namely, the abolition of contract labour was a question of far reaching and important change which could not have 345 been intended to be dealt with in a summary way by a labour court, which is the lowest in the hierarchy of courts established under the Act.
It therefore held that the industrial court had jurisdiction to decide the matter.
On the question of contravention of the, fundamental right, the appellate tribunal took the view that the question whether the restriction imposed was reasonable depended upon the facts of each case and therefore was a matter outside its power as a court of appeal It then considered the merits of the matter and came to the conclusion that the approach of the industrial court to the questions raised before it was not correct and therefore it found it difficult to support the award.
Eventually it set aside the award and remanded the matter for early hearing in the light of the observations made by it.
Further, it decided that in the interest of justice the entire award should be set aside, even though there was no appeal before it by the unions in most of the cases.
The appellant then came to this Court and was granted special leave; and that is how the matter has come up before us.
Mr. Pathak on behalf of the appellant has raised the same two points before us.
We shall first deal with the question of jurisdiction.
Reliance in this connection is placed on item (6) of Sch.
III of the Act, which is in these terms: "Employment including (i) reinstatement and recruitment; (ii) unemployment of persons previously employed in the industry concerned.
" It is not in dispute that matters contained in Sch.
III are within the jurisdiction of a labour court and an industrial court has no jurisdiction to decide any matter in a reference under section 73A of the Act which is within the jurisdiction of a labour court.
Mr. Pathak contends that item (6) of Sch.
III speaks of "employment" and includes in it two matters which might otherwise not have been thought to be included in it.
Therefore, according to him, employment as used in item (6) is wider than the two matters included in it 44 346 and the question whether contract labour should be employed or not would be a matter of employment within the meaning of that word in item (6) of Sch.
We do not think it necessary for purposes of this appeal to consider what would be the ambit of employment as used in item (6) of Sch. 111.
The scheme of the Act shows that under sections 71 and 72 the jurisdiction of a labour court and an industrial court is concurrent with respect to any matters which the State Government may deem fit to refer to them; but under section 73A reference by a registered union which is a representative of employees and which is also an approved union, can only be made to an industrial court, subject to the proviso that no such dispute can be referred to an industrial court where under the provisions of the Act it is required to be referred to the labour court for its decision.
78 of the Act provides for jurisdiction of labour courts and matters specified in Sch.
11 are not within their ordinary jurisdiction.
Therefore, when a registered union wishes to refer any matter which is contained in Sch.
11 of the Act such reference can be made by it only to the industrial court.
It follows in consequence that whatever may be the ambit of the word "employment" used in item (6) of Sch.
III, if any matter is covered by Sch.
11 it can only be referred to the industrial court under section 73A.
Now the question whether contract labour should be abolished (on the assumption that contract labour is not in the employ of the mills) immediately raises questions relating to permanent increase in the number of persons employed, their wages including the period and mode of payment, hours of work and rest intervals, which are items (2), (9) and (10) of Sch.
Therefore, a question relating to abolition of contract labour is so inextricably mixed up with the question of permanent increase in the number of persons employed, their wages, hours of work and rest intervals that any dispute relating to contract labour would inevitably raise questions covered by Sch.
Therefore, a dispute relating to contract labour if it is to be referred under section 73A by a registered union can only be referred to an industrial court as it immediately 347 raises matters contained in items (2), (9) and (10) of Sch.
Mr. Pathak urges however that matters relating to permanent increase in the number of persons employed due to the abolition of contract labour, their wages, hours of work and rest intervals were not really disputed at all by the appellant.
It appears that in the written statements of the appellant, these points were not raised; but the decision of the appellate tribunal shows that one of the contentions raised before it by the sugar mills was that the workmen concerned were not employees of the sugar mills.
Therefore, as soon as this contention is raised a dispute as to permanent increase in the number of persons employed, their wages, hours of work and rest intervals would immediately arise.
It must therefore be held that a question relating to the abolition of contract labour inevitably raises a dispute with respect to these three items contained in Sch.
In the circumstances we are of opinion that the industrial court had jurisdiction to deal with the matter.
In particular, we may point out that in their petitions the unions had raised at least the question as to the permanent increase in the number of persons employed and that would immediately bring in item (2) of Sch.
It is true that the question of permanent increase in the number of persons employed, their wages, hours of work and rest intervals would only arise if contract labour is to be abolished; but in our opinion these are matters so inextricably mixed up with the question relating to abolition of contract labour that they must be held to be in dispute as soon as the dis pute is raised about the abolition of contract labour, (assuming always that the employer does not accept contract labour as part of its labour force).
The contention about jurisdiction must therefore be rejected.
This brings us to the second contention raised by Mr. Pathak.
He bases his argument in this behalf on section 3(18), which defines an " industrial matter " as meaning any matter relating to employment, work, wages, hours of work, privileges, rights or duties of employers or employees, or the mode, terms and 348 conditions of employment.
Mr. Pathak urges that the definition of " industrial matter " contravenes the fundamental right guaranteed under article 19(1)(g), when it provides that the mode of employment is also included within it.
Reference is also made to section 3(17) which defines an "industrial dispute" as any dispute or difference which is connected with any industrial matter.
Mr. Pathak therefore urges that reading the two definitions together the industrial court is given the power to decide disputes as to the mode of employment and that contravenes the fundamental right guaranteed under article 19(1)(g), for it enables an industrial court to adjudicate on the mode of employment and thus interfere with the right of the employer to carry on his trade as he likes subject to reasonable restrictions.
Now assuming that the mode of employment used in section 3(18) includes such questions as abolition of contract labour, the question would still be whether a provision which enables an industrial court to adjudicate on the question whether con tract labour should or should not be abolished is an unreasonable restriction on the employer 's right to carry on his trade.
We cannot see how the fact that power is given to the industrial court, which is a quasi judicial tribunal to decide whether contract labour should be abolished or not would make the definition of "industrial matter" in so far as it refers to the mode of employment, an unreasonable restriction on the fundamental, right of the employer to carry on trade.
The matter being entrusted to a quasi judicial tribunal would be decided after giving both parties full opportunity of presenting their case and after considering whether in the circumstances of a particular case the restriction on the mode of employment is a reasonable restriction or not.
The tribunal would always go into the reasonableness of the matter and if it comes to the conclusion that the mode of employment desired by labour is not reasonable it will not allow it; it is only when it comes to the conclusion that the mode of employment desired by labour in a particular case is a reasonable restriction 349 that it will insist on that particular mode of employment being used.
Take, for example, the case of contract labour itself.
The tribunal will have to go into the facts of each case.
If it comes to the conclusion that on the facts the employment of contract labour is reasonable and thus doing away with it would be an unreasonable restriction on the right of the employer to carry on trade, it will permit contract labour to be carried on.
On the other hand if it comes to the conclusion that employment of contract labour is unreasonable in the circumstances of the case before it it will hold that it should be abolished, the reason being that its abolition would be a reasonable restriction in the circumstances.
Therefore the decision whether the mode of employment in a particular case is a reasonable restriction or unreasonable one is in the hands of a quasi judicial tribunal.
In the circumstances it cannot be said that by providing in section 3(18) that an "industrial matter" includes also the mode of employment, there is any contravention of the fundamental right of the employer to carry on trade.
If the argument on behalf of the appellant were to be accepted it would mean that judicial and quasi judicial decisions could be unreasonable restrictions on fundamental rights and this the Constitution does not envisage at all.
We are therefore of opinion that this contention also fails.
Finally, Mr. Pathak draws our attention to sections 3(13) and 3(14) of the Act and submits that the appellant never said that contract labour employed in its mills was not in its employment.
3(13) defines the word "employee" and includes in it any person employed by a contractor to do any work for him in the execution of a contract with an employer within the meaning of sub cl.
(e) of cl.
3(14) defines the word "employer" in an inclusive manner and in cludes "where the owner of any undertaking in the course of or for the purpose of conducting the undertaking contracts with any person for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the undertaking, the owner of the undertaking".
It is urged that in view 350 of these definitions, the employees of the contractors are the employees of the mills and the mills are the employers of these employees of the contractors.
Therefore, Mr. Pathak urges that there is no necessity of abolishing contract labour and that the industrial court may, if it so chooses, give the same wages and hours of work and rest intervals and other terms and conditions of employment to the employees of the contractors as are provided for comparable direct employees of the appellant and in such circumstances it would not be necessary to abolish the contract system so long as the employees of contractors are to be in the same position as the direct employees of the appellant as to their terms and conditions of service.
This was not however the manner in which the case was contested before the industrial court or the appellate tribunal.
All that we need therefore say is that when the matter goes back before the industrial court as directed by the appellate tribunal, the industrial court may take this submission of the appellant into account and may consider whether it is necessary to abolish the contract system, provided the appellant is able to assure the industrial court that employees of the contractors who are deemed to be its employees within the meaning of section 3(13) and section 3(14) would have the full benefit of the same terms and conditions of service as its comparable direct employees.
The appeal fails and is hereby dismissed with costs.
Appeal dismissed.
| The appellant, a non resident Banker incorporated under the National Bank Act of the United States of America with its Head Office in America, was assessed under Business Profits Tax Act, 147.
Under the Treasury Rules of the United States of America and Instructions for preparation of reports of conditions by the National Banking Association certain sums had to be specifically allocated under section 5211 of the Revised Statute of the United States, and the appellant bank was required to keep a certain sum of money under the head " undivided profits " and that was an integral part of tile capital structure.
The reason for the existence of this fund was that when losses occurred according to the practice they could be charged against " undivided profits ", i.e., profits set apart after provision for expenses and taxes etc.
for continuous use in the business of the Bank.
The appellant contended that in computing the amount for the purpose of " abatement " it was entitled to include the undivided profits " which fell within the word " reserves ".
The question was whether the large sum of money shown as " undivided profits " was a part of the reserves.
Held, that the amount designated as " undivided profits was a part of the reserves and had to be taken into account when computing the capital and reserves within Rule 2(1) of Sch.
II of the Business Profits Tax Act, 1947.
|
Appeal No.4375 OF 1991.
From the Judgment and Order dated 3.9.1990 of the Karna taka Administrative Tribunal, Bangalore in Application No. 2564 of 1989.
M.K. Ramamurthy, section Ravindra, K.V. Mohan and S.R. Bhat for the Appellant.
Raju Ramachandran, M. Veerappa and Kh.
Nobin Singh (N.P.) for the Respondents.
The Judgment of the Court was delivered AHMADI, J.
Special leave granted.
The controversy which we are required to resolve in this appeal by special leave is regarding the appellant 's senior ity vis a vis respondents Nos.3 to 7.
The factual background which has given rise to this controversy, briefly stated, is as under: In the year 1966 posts of Junior Engineer (Mechanical) were created in the Department of Mines and Geology (Ground Water Surveys and Drilling Unit) of the State of Karnataka.
The appellant who was then working as a Rigman in the Drill ing Unit of the Department was appointed Junior Engineer (Mechanical) in the scale of Rs. 200 375 on one of the said posts by an order dated 14th August, 1967 issued by the Director of the department.
Subsequently, he was regularly recruited through the State Public Service Commission in the said post w.e.f. 4th May, 1970.
However, even though the Director had requested the State Government to frame Re cruitment Rules for the newly created post immediately after its creation, the Recruitment Rules were not finalised till the issuance of a Notification dated 26th June, 1973.
Before the appellant was regularly recruited through the State Public Service Commission in the year 1970 the Director had apprised the Government of the action which he proposed to 602 take to fill up the post.
The appointment order was issued after the Public Service Commission had advertised the post and had selected persons for appointment to the said posts.
The appellant was initially appointed on probation for one year and on his satisfactorily completing the probation period he was continued in service and was later confirmed in the said post by an order dated 13th June, 1974 w.e.f. 29th September, 1972.
Respondents Nos. 3 to 7 entered service as Drillers in 1964 65.
The appellant and the respondents Nos.
3 to 7 were promoted as Assistant Drilling Engineers by the Director 's order dated 16th December, 1974.
The Office Order No.676/74 75 shows that the appellant and one another were working as Junior Engineers at the relevant time whereas respondents Nos.
3 to 7 were working as Drillers before their promotions as Assistant Drilling Engineers.
The State Government did not approve of the Director 's action in promoting the appellant since he was a local candidate and directed that he be reverted.
However, no such reversion took place.
The State Government also did not take any further action.
The appellant was shown senior to respond ents Nos. 3 to 7 in the said cadre of Assistant Drilling Engineers.
The appellant was subsequently promoted by the State Government to the next higher post of Drilling Engi neer in 1980 and further as Chief Drilling Engineer in 1984 which post he was holding at the date when his seniority came to be disturbed.
The appellant was throughout shown senior to respondents Nos.
3 to 7 till the revised provi sional seniority list in regard to the cadre of Assistant Drilling Engineers was published on 31st December, 1987.
Since objections were invited the appellant objected to his being shown junior to respondents Nos.3 to 7 but to no avail.
Even in the final seniority list dated 4th May, 1989 he was shown junior to respondents Nos. 3 to 7.
Respondents Nos.3 to 7 were shown in both the provisional and final seniority list at Serial Nos.1 to 5 whereas the appellant was shown at Serial No.6.
Thus, for the first time, since his regular appointment in the year 1970, he was shown junior to respondents Nos. 3 to 7 under the provisional seniority list issued in 1987 and the final seniority sen iority list issued in 1989.
The appellant, therefore, chal lenged the provisional seniority list as well as the final seniority list by an Application No. 2564 of 1989 preferred to the Karnataka Administrative Tribunal.
The Tribunal by its order dated 3rd September, 1990 rejected his application holding that his initial entry into service as a Junior Engineer was itself irregular and since he did not have the requisite experience of three years as a regular incumbent he was not qualified to be promoted to the next higher post of Assistant Drilling Engineer because his regular employ ment could only be related from the date of framing of the Recruitment Rules for the adre which came to be notified on 23rd August, 1973.
In this view of 603 the matter, the Tribunal held that the service of the appel lant from 4th May, 1970 to 23rd August, 1973 could not be taken into consideration for the purpose of determining his inter se seniority vis a vis respondents Nos. 3 to 7.
The appellant feeling aggrieved by the dismissal of his applica tion, has approached this Court under Article 136 of the Constitution.
The appellant contends that the order of the Tribunal suffers from a number of fallacies, namely, firstly, the Tribunal has failed to realise that the appellant was re cruited as a regular employee on selection by the State Public Service Commission pursuant to an advertisement issued in this behalf and, therefore, the appellant 's em ployment was regular in nature and not that of a mere local candidate; secondly, the post to which he was appointed was a regularly created post and was a higher than that of respondents Nos. 3 to 7 even during the period there existed no recruitment rules and in any case after his confirmation w.e.f.
29th September, 1972 it was not open to the Tribunal to hold that his appointment was irregular and thirdly, the Tribunal had erred in overlooking the guideline issued by the state Government on 5th July, 1976 which specifically provided that 'all appointments made by the Government or under specific authority of Government either by direct recruitment or by promotion or on or after 1st November, 1956 but prior to the commencement of the Rules regarding recruitment to such cadres may be treated as regular '.
The appellant contends that in pursuance of this guideline issued by the State Government even if it is assumed that his initial appointment was irregular it had to be treated as regular throughout.
The appellant, therefore, contends that the Tribunal 's order suffers from certain patent in firmities and deserves to be set aside.
It appears that before the Tribunal respondents Nos.1, 2, 4, 6 and 7 did not file any counter challenging the appellant 's claim to sen iority but respondents Nos. 3 and 5 contested the appel lant 's claim while the State Government avoided entering into the arena by filing a counter but instead presented the relevant files to the Tribunal.
So far as respondents Nos. 3 and 5 are concerned, they supported the action taken by the state Government in preparing both the impugued provisional as well as the final seniority lists.
They contended that since they were regular employees and had entered service before the appellant and were promoted to the post of As sistant Drilling Engineers along with the appellant they were clearly senior to 'the appellant and the State Govern ment was, therefore, justified in showing them at Serial Nos.1 to 5 and the appellant at Serial No. 6 in the seniori ty list.
They, therefore, contend that this 604 appeal is without substance and needs to be dismissed.
We have heard counsel for the rival contestants.
Counsel of the State Government submitted that they had prepared the seniority list for reasons already stated but they would not like to take sides and would abide by the decision of this court.
In order to appreciate the controversy, it is necessary to refer to the Karnataka Civil Services (Classification, Control and Appeal) Rules, 1957.
According to Rule 5, the Civil Services of the State of Karnataka are classified into Class I, Class II, Class II and Class IV posts.
Class I and Class II are gazetted Posts whereas Class III and Class IV consist of non gazetted Posts.
So far as Class III posts are concerned the initial appointments have to be made by the authorities mentioned in Column 2 of Schedule II appended to the Rules.
In regard to the posts of Junior Engineers the lind Schedule makes the Director the Appointing Authority.
There can, therefore, be no doubt that the initial appoint ment of the appellant was by an authority competent to appoint.
It is indeed true that at the time when the appel lant was selected by the State Public Service Commission and appointed as Junior Engineer w.e.f.
4th May, 1970 there were no specific Recruitment Rules in existence for the post in question.
As stated earlier, the posts were created for the first time in 1966 and since then the Director had been in correspondence with the State Government for framing of the Recruitment Rules for the said posts.
Since the Recruitment rules were not framed for one reason or the other, in 1969 the Director wrote a letter to the State Public Service Commission to advertise the vacancies and select candidates for appointment.
Simultaneously, he wrote a letter informing the State Government of the action taken by him in request ing the State Public Service Commission to advertise the posts and select candidates for appointment.
Pursuant to the requisition sent by him the Commission selected candidates and forwarded the list to the Director who was the Appoint ing Authority under the Karnataka Civil Service (Classifica tion, Control and Appeal) Rules, 1957.
The Director who was competent to make the appointment by virtue of Rule 7 issued a letter of appointment dated 24th April, 1970 whereapon the appellant took charge w.e.f. 4th May, 1970.
It, therefore, becomes apparent that the posts were regularly created sometime in 1966 and the appellant was duly selected by the State Public Service Commission and appointed to the post in question in 1970.
The appellant being an engineering gradu ate was qualified for appointment to post in question.
The state Government 's approach while sliding down the appellant in seniority vis a vis the respondents Nos.
3 to 7 may be briefly noticed.
605 After the recruitment rules for Junior Engineers (Mechani cal) were framed and brought into effect w.e.f.
23rd August, 1973, it was felt that the two posts of Junior Engineers were filled by direct recruitment contrary to the said rules which provided a ratio of 50% by promotion from the cadre of Drillers and 50% by direct recruitment.
Since both the posts were filled by direct recruitment, it was felt that this ratio was violated.
The date of the appellant 's seniority was, therefore, reckoned from 23rd August, 1973 and since the appellant had not acquired experience of three years he was held ineligible for promotion to the next higher post of Assistant Drilling Engineer.
His entry into the promo tional post was, therefore, pushed down to 23rd August, 1976 and accordingly respondents Nos. 3 to 7 were placed above him in the seniority list.
The Tribunal concurred with this approach.
The Tribunal held that the initial appointment of the appellant as Junior Engineer (Mechanical) by the Direc tor was not supported by any rules and the Director not being the appointing authority for the said posts in 1970, the appellant 's appointment was not regular.
Secondly, the Tribunal concurred with the Government that the appellant 's entry into the cadre of Assistant Drilling Engineer must be assumed to be w.e.f.
23rd August, 1976 and hence respondents nos.
3 to 7 were clearly senior to him.
In short the Tribu nal approved of the Government 's approach in With respect we find it difficult to approve of the said approach.
As pointed out earlier, the posts were sanc tioned in 1966.
Initially the appellant was appointed as a local candidate but later the Director requested the State Public Service Commission to advertise the said two posts and select candidates for appointment to the said posts.
Pursuant to the advertisement so issued the appellant ap plied, was found qualified and was selected for appointment.
The Director, therefore, made the appointment as he was the appointing authority for Class III posts under the Karnataka Civil Services (Classification, Control & Appeal) Rules, 1957, vide Rule 7(2) read with Column 2 of Schedule II thereto.
That rule clearly shows that the Director is the appointing authority for Junior Engineers, a Class III post.
The Tribunal was, therefore, not right in holding that the appointment made was irregular as it was not by the appoint ing authority.
The Tribunal was wrong in holding that the Director was not the appointing authority for Junior Engi neers.
Strictly speaking, that was not the approach of the Government.
The Government held the appointment irregular as in its opinion it had exceeded the quota of 50% for direct recruits.
This view is based on the premise that the serv ices must be regularised applying the 1973 Rules retrospec tively.
Here there are two fallacies, firstly the appellant being senior of the two direct recruits appointed as Junior Engineers, he would fill the slot for the one post which 606 went to direct recruits on the 50% quota and secondly it was not permissible to question the appointment made in 1970 in 1987 when in the intervening period none had challenged the appellant 's appointment.
The objection which the Government had raised on his promotion to the next higher post was that he was a local candidate and not a regular appointee, an objection which was not pursued presumably on realising that he was selected by the State Public Service Commission before appointment.
Not only that the Government acquiesced in his appointment by promoting him to the next higher posts in 1980 and 1984.
Since the posts existed on the establish ment and selection for appointment was made by the State Public Service Commission and the Director was competent to make the appointment, it cannot be said that the absence of recruitment rules makes the appointment illegal or irregular when it is found that the appellant, a degree holder, was eligible for appointment to the post.
This is so also be cause irregular appointments were regularised by the Govern ment Memorandum dated 5th July, 1976, the relevant part whereof reads as under: "3(a).
All appointments made by Government or under specific authority of Government either by direct recruitment or by promotion on or after 1st November, 1956, but prior to the commencement of rules regulating recruitment to such cadres may be treated as regular".
This was clarified by the subsequent letter dated 17th September, 1977 as under: "Para 3(a) states that all the appointments made by Govern ment or under specific authority of Government either by direct recruitment or by promotion on or after 1.11.1956 and prior to the commencement of the Cadre and Recruitment Rules of the concerned cadre may be treated as regular, that is to say, the action taken by Government on other Appointing authorities in resorting either of the modes of recruitment is regular.
This para does not say that the appointment of local candidates as a stop gap arrangement is regular".
The Tribunal refused to place reliance on the above on the erroneous ground that the Director was not the appoint ing authority and the appellant was a local candidate.
Once both these are found to be erroneous there is no reason to brush aside the said guidelines.
It may also be appreciated that the services of local candidates in Class III cadre were regularised by Office Order No.177/71 72 dated 31s1 August, 1971 and had the 607 appellant not have been appointed as a regular candidate w.e.f. 4th May, 1970 his service would also have been regu larised as a local candidate.
From what we have discussed above it is obvious that the entire approach of the State Government and the Tribunal was erroneous.
Besides, the appellant was shown senior to re spondents Nos.
3 to 7 right from 1970 to 1987 when his seniority came to be disturbed.
During the said period of 17 years all attempts to disturb his seniority had 'failed.
No one successfully challenged it in Court.
The appellant 's seniority which had stabilised over a period of time and on the basis whereof he was granted promotions by the Govern ment could not be disturbed by doubting the.
regularity of the initial appointment after so many years.
It was not as if he had gained experience as an ad hoc employee in a stop gap arrangement that his experience as a Junior Engi neer could be overlooked.
We are, therefore, of the opinion that his seniority in the promotion post could not be upset on the ground that he did not possess the requisite experi ence till 23rd August, 1976.
In Direct Recruit Class H Engineering Officer 's Associa tion vs State of Maharashtra & Ors, ; , this Court held in paragraph 13 as under: "The principle for deciding inter se seniority has to conform to the principles of equality spelt out by Articles 14 and 16.
If an appointment is made by way of stop gap arrangement, without considering the claims of all the eligible available persons and without following the rules of appointment, the experience on such appointment cannot be equated with the experience of a regular appointee, because of the qualitative difference in the appointment.
To equate the two would be to treat two unequals as equal which would violate the equality clause.
But if the appointment is made after considering the claims of all eligible candidates and the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules made for regular substantive appointments, there is no reason to exclude the officiating service for purpose of seniority.
Same will be the position if the initial appoint ment itself is made in accordance with the rules applicable to substantive appointments as in the present case.
To hold otherwise will be discriminatory and arbitrary".
In the present case also the appellant 's appointment was made in 1970 after all eligible candidates were interviewed by the State Public Service Commission.
As pointed out earlier, the posts were borne on the establishment and the Director was the appointing authority who made the appoint ment pursuant to the selection made by the State Public Service Commission.
The appellant worked on that post unit erruptedly till he was 608 promoted to the next higher post along with respondents Nos. 3 to 7.
In these circumstances, his experience in the post of Junior Engineer (Mechanical) from 1970 till his promotion to the next higher post could not be ignored.
We are, there fore, of the opinion that the ratio laid down by the Consti tution Bench in the aforequoted paragraph applies with all force in the present case also.
In the result, we allow this appeal and set aside the order of the Tribunal.
We hold that the appellant 's seniori ty over respondents Nos.
3 to 7 as was obtaining before 31st December, 1987 when the provisional seniority list was published shall be restored and he shall be shown to be senior to respondents Nos.
3 to 7 by correcting the impugned final seniority list.
The appeal is allowed accordingly with no order as to costs.
T.N.A. Appeal allowed.
| The appellant landlord filed an application under Section 14(1)(b) of the Delhi Rent Control Act, 1958 for ejectment of the respondents and the three courts concurrently found that the respondent was the sole tenant.
Relying on an affidavit filed by tenant 's brother before Income Tax au thorities in which he claimed exclusive possession as ten ant, the Rent Controller and the Tribunal concluded that the admission made by the tenant 's brother was binding on the tenant as a result of which sub letting by tenant was proved and consequently allowed the landlord 's eviction petition.
But the High Court dismissed the eviction petition by holding that since the admission made by tenant 's brother was not binding on the tenant, the finding of sub letting by tenant was vitiated in law because it was based on inadmis sible evidence.
In appeal to this court it was contended on behalf of the landlord that (i) the admission made by tenant 's brother was binding on the tenant under section 18 of the Evidence Act; (ii) the High Court erred in interfering with the concurrent finding of fact.
Dismissing the appeal, this Court, 538 539 HELD: 1.
Section 18 of the Evidence Act postulates that statements made by a party to the proceeding, or by an agent to any such party, whom the Court regards, under the circum stances of the case, as expressly or impliedly authorised by him to make them, are admissions.
Equally statement made by a person who has any proprietary or pecuniary interest in the subject matter of the proceedings or persons having derivative interest make statements during the continuance of the interest also are admissions.
[540 H, 541 A B] 2.
In the instant case, admittedly, the respondent tenant was not a party to the affidavit signed by his broth er.
Therefore, the admission made by his brother that he is the tenant in exclusive possession of the demised premises does not bind the respondent tenant.
Once it is found that respondent alone is the tenant, his brother cannot claim to have any pecuniary or derivative interest in the demised premises.
He is not an agent of his tenant brother.
Since the admission made by tenant 's brother was inadmissible and not binding on the tenant, the High Court rightly held that the finding of sob letting or parting with possession of the premises in dispute was vitiated in law as it was primarily based on inadmissible evidence.
Consequently, it was open to the High Court to re examine and reappreciate the evidence on record.
[541 B E]
|
iminal Appeal No. 113 of 1965.
Appeal from the judgment and order dated October 26, 1964 of the Allahabad High Court in Criminal Revision No. 803 of 1963.
J. P. Goyal, for the appellants.
O. P. Rana and Atiqur Rehman, for respondent No.1.
section K. Mehta and K. L. Mehta, for respondent No., 2.
B. R. L. lyengar and B. R. G. K. Achar, for the Intervener.
The Judgment of the Court was delivered by Mudholkar, J.
The only point which falls to be decided in this appeal by certificate granted by the High Court at Allahabad is whether the District Judge has jurisdiction under section 24 of the Code of Civil Procedure to transfer a reference made by a Magistrate to a particular civil court under section 146 of the Code of Criminal Procedure to another civil court.
It arises this way.
Proceedings under section 145, Cr.
P.C. were initiated by a Magistrate on the basis of a report of a police officer to the effect that a dispute likely to cause a breach of the peace exists concerning a plot of land situate within the jurisdiction of the Magistrate between the parties mentioned in the report and praying for appropriate action under section 145 of the Code of Criminal Procedure.
The learned Magistrate upon being satisfied about the possibility of a breach of the peace made a preliminary order under section 145, Cr. P.C., attached the property to which the dispute related and called upon the parties to adduce evidence in respect of their respective claims.
In due course he recorded the evidence but he was unable to make up his mind as to which of the parties was in possession on the date of the preliminary order and within two months thereof.
He, therefore, referred the case under section 146(1) of the Cr. P. C. to a civil court for decision, as to which of the parties was in possession at the material point of time and in the meanwhile directed that the attachment of the Property shall continue.
The reference went to the court of the Munson within whose territorial jurisdiction the property was situate.
But thereafter one of the parties Brij Gopal Binani, respondent No. 2 before us, made an application to the District Judge under section 24, C.P.C. for transfer of the case to some other.
court.
The, ground given was that in the execution case out of which proceedings under section 145, Cr.
P.C. had arisen, the same Munsiff had.
made an order against him depriving him of costs.
The Munsiff having no objection to the transfer the District Judge ' transferred the case to the court of another Munsiff.
The opposite parties, that.
is, the appellants before us Ram Chandra Aggarwal and Kedar Prasad Aggarwal acquiesced in the order of transfer and did not raise any question as to the jurisdiction of the, transferee court to hear and decide the reference.
Eventually evidence was led by both sides ' and a finding given by the transferee court.
This finding was in favour 395 of the second respondent.
After receiving the finding the I Magistrate heard the parties and held that it was the second respondent who was in possession at the relevant date and passed an order under section 145(6), Cr.
P.C. pursuant thereto.
A revision application was preferred by the appellants before the court of Sessions in which the objection was taken for the first time that the decision of the civil court was a nullity because it had no territorial jurisdic tion over the subject matter of the dispute.
It was further contended that the District Judge had no jurisdiction to transfer the case and that consequently the ultimate order made by the learned Magistrate was a nullity.
The learned Additional Sessions Judge who heard the revision application rejected these contentions on the ground that they were not raised earlier.
The appellants then took the matter to the High Court in revision.
The appellants rested their revision application on the sole ground that section 24, C.P.C. was not available in respect of a reference under section 146(1) Cr.
P.C. and that, therefore, the proceedings subsequent to the transfer of the reference from the court of one Munsiff to that of another are a nullity.
The High Court permitted the point to be urged.
The attack was based upon two grounds: that the reference under section 146(1), Cr.
P.C. was to a persona designata and that the provisions of section 24, C.P.C. were not available with respect to it.
The second ground was that the proceeding before the civil court was not a civil proceeding within the meaning of section 141, C.P.C.
The High Court negatived both the grounds on which the contention was based.
On behalf of the appellants Mr. Goyal has reiterated both the contentions.
In fairness to Mr. Goyal it must be said that his attack on the order of the District Judge transferring the case under section 24, C.P.C. was based more on the ground that the reference under section 146(1) Cr.
P.C. is not a civil proceeding than on the ground that the reference was to a persona designata.
However, as he did not wish to abandon the other point we must deal with it even though Mr. B. R. L. Iyengar who appears for the State conceded that a reference under section 146(1) is to a constituted court and not to a persona designata.
In BalakrishnaUdayar vs Vasudeva Aiyar(1) Lord Atkinson has pointed out teh difference between a persona designata and a legal tribunal.
The difference is in this that the "determinations of a persona designata are not to be treated as judgments of a legal tribunal".
In the central Talkies Ltd. vs Dwarka Prasad(2) this 'Court has accepted the meaning given to the expression persona designata in Osborn 's Concise Law Dictionary.
4th edn.
p. 263 as eta person who is pointed out or described as an individual, as opposed to a person ascertained as a member of a class, or as filling a particular characters Section 146(1) Cr.
P.C. empowers a Magis 396 trate to refer the question as to whether any, and if so, which of the parties was in possession of the subject matter of dispute at.
the relevant point of time to a civil court of competent jurisdiction.
The power is not to refer the matter to the presiding Judge of a particular civil court but to a court.
When a special or local law provides for an adjudication to be made by a constituted court that is, by a court not created by a special or local law but to an existing court it in fact enlarges the ordinary jurisdiction of such a court.
Thus where a special or local statute refers to a constituted court as a court and does not refer to the presiding officer of that court the reference cannot be said to be to a persona designata.
This question is well settled.
It is, therefore, unnecessary to say anything more on this part of the case except that cases dealing with the point have been well summarised in the recent decision in Chatur Mohan vs Ram Behari Dixit.(1).
Now, as to the argument based on the ground that the pro ceeding before the civil court is not a civil proceeding, Mr. Goyal 's contention is that since the proceeding before the criminal court under section 145 is a criminal proceeding any matter arising out of it, including a reference to a civil court, does not lose its initial character of a criminal proceeding.
In support of his contention he has placed strong reliance upon the observations of Jagdish Sahai J., in Sri Sheonath Prasad vs City Magistrate, Varanasi.
(2) In that case the learned Judge was called upon to consider the meaning of the expression "civil court of competent jurisdiction" occurring in section 146(1) of the Code of Criminal Procedure.
It was contended before him that the competency of the court is to be determined not merely with respect to the territorial jurisdiction of the court but also with respect to its pecuniary jurisdiction.
The question arose because it was contended before him that the finding on a question of possession was recorded by a civil court which though it had territorial jurisdiction over the subject matter of the dispute the value of the subject matter was in excess of the pecuniary jurisdiction of the court.
In the course of his judgment the learned Judge has observed: "that a proceeding even on reference made to a civil court retains its old moorings and does not change its character from a criminal proceeding to a civil proceeding and does not become a proceeding in the suit.
" Then he went on to point out that the criminal court still retains its jurisdiction because it could withdraw the reference from the civil court at any.
time and also because the ultimate decision with the respect to the dispute between the parties was to be made by the Magistrate and not by the civil court.
All this, according to the learned Judge, would show that the proceeding even: before the civil court would not be a civil proceeding.and the idea of pecuniary jurisdiction of a court being foreign to the Code of Criminal Procedure it was not necessary to (1) 1964 All.
L. J. 256.
(2) A.I.R. 1959 All.
467. 397 ascertain whether the court to which a reference was made under section 146(1) Cr.
P.C. had pecuniary jurisdiction over the subject matter of the dispute or not.
This ' decision ignores the vast 'body of authority which is to the effect that when a legal right is in dispute and the ordinary courts of the country are seized of such dispute the courts are governed by the ordinary rules of procedure applicable to them.
Two of the decisions are Adaikappa Chettiar vs Chandrasekharca Theyar(1) and Maung Ba Thaw vs Ma Pin(1) and also a decision of this Court which proceeds upon the same view.
Thus in South Asia Industries (P) Ltd. vs section B. Sarup Singh(1) it was held that where a statute confers a right of appeal from the order of a tribunal to the High Court without any limitation thereon 'the appeal to the High Court will be regulated by the practice and procedure obtaining in the High Court.
We would also like to refer to the decision of this Court in Naravan Row vs Ishwarlal(1) in which it was held that there is no reason for restricting the expression "civil proceeding" only to those proceedings which arise out of civil suits or proceedings which are tried as civil suits.
Though this decision was concerned with the meaning of the words "civil proceeding" used in article 133(1)(c) of the Constitution the reasoning behind it sufficiently repels the extreme contention of Mr., Goyal that a proceeding stemming from a criminal matter must always bear the stamp of a criminal proceeding.
Then, according to Mr. Goyal, when a magistrate refers a question as to which: party was in possession at the relevant date what be does is to delegate that duty, initially resting upon him, to the civil court.
In performing that duty the civil court would, therefore, be acting as a criminal court just as the magistrate would be doing where he has to decide the question himself.
The two Privy Council decisions we have referred to sufficiently answer this contention.
No doubt, the Magistrate, while discharging his function under the Code of Criminal Procedure under section 145(1), would be exercising his criminal jurisdiction because that is the only kind of jurisdiction which the Code confers upon the magistrates but when the magistrate refers the question to a civil court he does not confer a part of his criminal jurisdiction upon the civil court.
There is no provision under which he can clothe a. court or a tribunal which is not specified in the Criminal Procedure Code with criminal jurisdiction We are, therefore, unable to accept the contention of Goyal.
Mr. Iyengar tried to put the matter in a somewhat different way.
In the first place.
according to him , if we hold that the proceeding before the civil court is a, civil proceeding then all the rules of procedure contained in the Civil Procedure Code,.
including those relating to appeals or revision would apply to the proceeding.
(1) 74 I.A. 264.
(2) 61 I.A. 158.
(3)[1966].2 S.C.R. 756.
(4) A.I.R. 1956 S.C.1818 398 he points out, would be contrary to the provisions of section 146(1 P) of Code of Criminal Procedure which bar an appeal,review or revision from any finding of the civil court.
From this he wants us to infer that the proceeding does not take the character of a civil proceeding even though it takes place before a civil court.
We are not, impressed by this argument.
If sub section
(1 D) had: , not been enacted (and this is really a new provision) an appeal or revision application would have been maintainable.
Now that it is there, the only effect of it is that neither an appeal nor a revision is any longer maintainable.
This consequence ensues because of the express provision and not because the proceeding, before the civil court is not a civil proceeding.
The next contention and it was the one pressed strenuously by him was that a proceeding upon a reference under section 146(1) entertained by a civil court not being an original proceeding the provisions of section 141, C.P.C. are not attracted and that, therefore.
those provisions of the Civil Procedure Code which relate to suits are not applicable to a proceeding undertaken by a civil court upon a reference to it under section 146(1) of the Code of Criminal Procedure.
A number of cases dealing with this point were brought to our notice either by him or by Mr. Goyal.
It seems to us, however, that those cases are not relevant for deciding the point which is before us.
In passing, however, we may mention the fact that a full bench of the Allahabad High Court has held in Maha Ram vs Harbans(1) that the civil court to which an issue on the quest ion of proprietary rights has been submitted by a revenue court under section 271 of the Agra Tenancy Act, 1926 has jurisdiction to refer,the issue to arbitration under paragraph I of Schedule II of the C.P C.
This decision is based upon the view that by virtue of section 141, C.P.C. the provisions relating to arbitration contained in the second schedule to the Code of Civil Procedure before the repeal of that schedule applied to a proceeding of this kind.
Similarly recently this Court has held in Munshi Ram vs Banwarilal(2) that under section 41 of the Arbitration Act and also under section 141, C.P.C. it was competent to the court before which an award made by an arbitration tribunal is filed for passing a decree in terms thereof to permit Parties to compromise their dispute under O. XXIII, r. 3, C.P.C.
Though there is no discussion, this Court has acted upon the view that the expression" 'civil proceeding" in section 141 is not necessarily confined to an original proceeding like a suit or an application for appointment of a gurdian etc.
but that it applies also to a proceeding which is not an original proceeding.
Thus, though we say that it is not an original to consider in this case whether.
the proceeding before the civil court is a civil proceeding as contemplated by section 141 or not there is good authority for saying that it is a civil Proceeding.
All that we are concerned with in this case is whether (1) I.L.R. [1941] All.193 (2) I.L.R. 1962 S.C.903.
399 the provisions.
of section 24(1)(b) of the Code of Civil Procedure are available with respect to a proceeding arising out of a reference ,,under section 146(1), Cr.
The relevant portion of section 24 may, therefore be set out.
It reads thus: "On the application of any of the parties and after notice to the parties and after hearing such of them as desired to be heard, or of its own motion without such notice, the High Court or the District Court may at any stage (a) (b) withdraw any suit, appeal or other proceeding pending in any Court subordinate to it, and (ii) transfer the same for trial or disposal to any Court subordinate to it and competent to try or dispose of the same; or III. . . . .
It plainly speaks of "other proceeding pending in any court subordinate to it" and not only to the civil proceeding pending before a subordinate court.
The decisions of the Privy Council and one decision of this Court which we have earlier quoted would warrant the application of the provisions of the Code of Civil Procedure generally to a proceeding before a civil court arising out of a reference to it by a Magistrate under section 146(1) of the Code of Crimi nal Procedure.
The expression "proceeding" used in this section is not a term of art which has acquired a definite meaning.
What its meaning is when it occurs in a particular statute or a provision of a statute will have to be ascertained by looking at the relevant statute.
Looking to the context in which the word has been used in section 24(1)(b) of the Code of Civil Procedure it would appear to us to be something going on in a court in relation to the adjudication of a dispute other than a suit or an appeal.
Bearing in mind that the term "proceeding" indicates something in which business.
is conducted according to a prescribed mode it would be only right to give it, as used in the aforesaid provision, a comprehensive meaning so as to include within it all matters coming up for judicial adjudication and not to confine it to a civil proceeding alone.
In a recent case Kochadai Naidu vs Nagavasami Naidu(1) Ramachandra lyer J., (as he then was) was called upon to consider the very question which arises before us.
The learned Judge held (1) I.L.R. 400 that a proceeding before a civil court arising out of a reference to it under section 146(1), Cr.
P.C. can be transferred by the High Court or District Court under section 24, C.P.C. because it is in any case a proceedings.
He has also considered this question from the angle of the nature of the proceeding and expressed the view that the proceeding was a civil proceeding to which the procedure for suits could, with the aid of section 141, C.P.C. be applied.
If indeed the term "proceeding" in section 24 is not confined to a civil proceeding there is no need whatsoever of taking the aid of section 141, C.P.C.
Upon this view we dismiss the appeal.
Appeal dismissed.
| The plaintiffs instituted a suit for partition of immovable property constituting two blocks and for rendition of accounts.
They claimed that the property was purchased with the capital of the partnership firm in which the plaintiffs and the defendant were Partners and that by two documents dated July 2, 1937 and July 16, 1937, the properties continued to remain in the ownership of the partnership firm, though the firm was dissolved in 1937.
The defendant contested the suit on various grounds and also alleged that he had invested Rs. 10,000/ for constructing a building on the land in one of the blocks.
The trial Court granted the plaintiffs a decree for most of the reliefs sought.
The High Court, in appeal, held that the plaintiffs were entitled to claim half share in the properties and that the defendant was liable to account for the income from the date of dissolution i.e. July 2, 1937 in the case of one block and from 1939 in the case of the other block and furthermore that the plaintiffs were liable to pay half the amount spent by the defendant in constructing the building on one of the blocks.
Upon a remand of the case to the trial Court a Commissioner was appointed to examine the accounts of rent realized by the defendant and on the basis of his report, the trial court granted the plaintiffs a decree for the amount payable to them as their half share, together with interest upto April 1957 and after deducting the plaintiffs ' share of the expenditure incurred by the defendant on the building.
In further appeals to the High Court by both the parties the decision of the trial court was substantially confirmed.
In the appeal to this Court by the defendant, it was contended, inter alia, on his behalf that the trial court and the High Court had erroneously decided that the defendant was liable to pay interest for the period prior to the institution of the suit on the half share of the rental income on the ground that the relationship between the par ties was in the nature of a trust under Section 90 of the Trusts Act, 1882.
On the other hand the contentions for the respondents were that interest prior to the date of institution of the suit could be paid to them under the Interest Act, 1839: that the defendant was in possession of the entire properties as as Owner after the dissolution of the partnership by the document dated July 16, 1937 and that as he 165 was realizing rents of the properties, he was in the position.
of a constructive trustee under section 95 of the Trusts Act and was liable therefore to pay interest on the plaintiffs ' share of rent under section 23 read with section 95 of the Act; and that he was in any event liable to pay interest under section 23(b) of the Trusts Act because there was unreason able delay in paying the trust money to the beneficiary.
HELD: Interest was only payable to the plaintiffs at the rate of 6% per annum from the date of the final decree on the amount found due to the plaintiffs.
It is well established that interest may be awarded for the period prior to the date of the institution of the suit if there is an agreement for the payment of interest at fixed rate or if interest is payable by the usage of trade having the force of law, or under the provisions of any substantive law as for instance under section 80 of Negotiable Instruments Act or section 23 of the Trusts Act.
It was admitted in the present case that the two agreements between the parties dated July 2,1937 and July 16,1937 did not provide for payment of interest on the rental reilised by the, defendant on the joint properties.
Nor was interest payable under any provision of law governing the case.
Under the Interest Act, 1839, the court may allow interest if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument but it was conceded that was not the position in the present case.
The provision in section 1 of the Interest Act that "interest shall be payable in all cases in which it is now payable by law," applied only to cases in which the Court of Equity exercised jurisdiction to allow interest.
[168 B D].
Bengal Nagpur Railway Co. Ltd. vs Ruttanji Ramji 65 I.A. 66, Thawardas Pharumal vs Union of India, Union of India vs Rallia Ram, ; and Union of India vs Watkins Mayor & Co. A.I.R. 1966 section C. 275, referred to.
There was no force in the contention that section 90 of the Trusts Act applied to this case.
A co owner in possession of all the joint properties does not become a trustee by the mere fact of his collection of the full amount of rent from the tenants.
If the co owner is to be clothed with the status of a trustee, itmust be shown that he has gained some advance in derogation ofthe other co owners interested in the property and that he gained such advantage by availing himself of his position as co owner.
In the present case, there was no allegation or finding by the trial court that the defendant had gained any such advantage.
[17O E] Even assuming that the defendant was in the position of a constructive trustee, he would be liable to pay interest under section 23 only if he committed a breach of trust and in the present case there was no question of any such breach on his part.
Furthermore, he was not liable to pay interest under section 23(b) as that provision contemplates cases where there is an obligation on the part of the trustee to pay the trust money to the beneficiary at fixed intervals or on demand.
[170 F].
Blogg vs Johnson., [1867] 2 Ch.
A 225, Silkstone and Haigh Moor Coal Co. vs Edey, ; Malland V. Gray and Guildrey vs Stevens , referred to.
|
Appeal No. 1164 of 1970.
(Appeal by Special Leave from the Order dated the 5th Sep tember 1969 of the Punjab & Haryana High Court in S.C.A. No. 197 of 1968) Naunit Lal, Girish Chandra and R.N. Sachthey, for the appel lant.
S.B. Wad, for respondent No. 1.
The Judgment of the Court was delivered by CHANDRACHUD, J.
The 1st respondent is a co operative transport society carrying on transport business at Kaithal, District Karnal, State of Haryana.
The Society terminated the services of respondents 3 and 4 who were working with it as conductor and driver, respectively.
The State of Punjab, on June 22, 1964 referred the dispute arising out of the dismissal of respondents 3 and 4, under section 10 of the Indus trial Disputes Act (14 of 1947) for the adjudication of the Labour Court, Rohtak.
That Court was then presided over by Shri Jawala Dass.
On Shri Dass 's retirement, Shri Hans Raj Gupta was appointed on June 4, 1965, as the presiding Officer of the Court.
The reference was thereafter heard by him and on April 16, 1966 he gave an award directing the reinstatement of respondents 3 and 4 with 50% backwages from the date of their dismissal until the date of reinstatement.
The Presiding Officer of the Labour Court is the 2nd re spondent to this appeal.
Being aggrieved by the award, the 1 st respondent filed Writ Petition No. 1575 of 1966 in the High Court of Punjab and Haryana under articles 226 and 227 of the Constitution, praying that the award given by the 2nd respondent be set aside on the ground, inter alia, that he was not qualified to hold the post of a Judge of the Labour Court, and, therefore, the award was without jurisdiction.
The Writ petition having been allowed by a Division Bench by its judgment dated March 26, 1968 the State of Haryana has filed this appeal by special leave.
The Presiding Officer of the Labour Court was impleaded to the Writ Petition as the 2nd respondent.
308 The only question for decision in this appeal is whether Shri Hans Raj Gupta who gave his award as the presiding Officer of the Labour Court was qualified for being appoint ed as a Judge of the Labour Court.
Section 7(1) of the provides that the appropriate Gov ernment may constitute one or more Labour Courts for the adjudication of Industrial disputes relating to any matter specified in the Second Schedule to the Act.
A Labour Court, under s.7(2), shall consist of one person only to be appointed by the Government.
Sub section (3) of section 7 reads thus: "(3 ) A person shall not be qualified for appointment as the presiding officer of a Labour Court, unless (a) he is, or has been, a Judge of a High Court; or (b) he has, for a period of not less than three years, been a District Judge or an Additional District Judge; or (c) he has held the office of the chairman or any other member of the Labour Appellate Tribunal constituted under the Industrial Disputes (Appellate Tribunal) Act, 1950 (48 of 1950), or of any Tribunal, for a period of not less than two years; or (d) he has held any judicial officer in India for not less than seven years; or (e) he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act for not less than five years".
It was common ground in the High Court that Shri Gupta did not satisfy the qualifications laid down in any of the clauses (a), (b), (c) and (e) of section 7(3).
It was, however, urged in the High Court, in the first instance, that Shri Gupta had held a judicial offical in India for not less than seven years and was, therefore, qualified for being appointed as a Judge of the Labour Court under clause (d) of s.7 (3 ).
This argument was made before the learned Chief Justice of the High Court who, while hearing the Writ Peti tion singly, felt that the question raised was of public importance.
He, therefore, referred the matter to a Divi sion Bench.
The contention that Shri Gupta was qualified to hold the office of a Judge of the Labour Court under clause (d) of s.7(3) was, however, given up by the State before the Division Bench.
Before us, the learned counsel for the appellant, the State of Haryana, rightly did not pursue the unstatable contention.
Shri Hans Raj Gupta was initially working as an Upper Division Clerk cure Head Clerk.
Thereafter, he worked from January 14, 1947 to October 19, 1954 as the Registrar to the Pensions Appeals Tribunal, Jullundur Cantonment.
After relinquishing that post, he was reverted as an Upper Divi sion Clerk cum Head Clerk, which office he held till Febru ary 17, 1957.
Subsequentiy, he was appointed as an Assistant Settlement officer in which post he worked fill September 1962.
It is obvious, and requires no clever argument to show, that Shri Gupta was holding clerical posts which, with some courtesy may 309 be described as posts calling for and furnishing administra tive experience.
As an Upper Division Clerk, even if the duties of that post were combined with those of the Head Clerk, Shri Gupta was nowhere in the shadow of a judicial office.
As a Registrar of the Pensions Appeals Tribunal, Jullundur Cantonment, he was admittedly discharging adminis trative functions.
A circumstance which seems to have blurred the perception of the State Government perhaps was that the Pensions Appeals Tribunal was a judicial or quasi judicial body and since Shri Gupta was closely associated with it, does not matter in what capacity, he could be said to hold a judicial office.
Administrative proximity with judicial work was regarded as an excuse good enough to elevate the administrator into a holder of judicial office.
This was a wholly misconceived approach to a matter of some moment for, were it so, many a judicial clerk would be qualified to be appointed to a judicial office.
Having never held any judicial office, Shri Gupta totally lacked judicial experience and was incompetent to discharge the functions of a Judge of the Labour Court.
His appointment was therefore illegal and his award without jurisdiction.
We are happy to note that the State Government did not take the time of the DiVision Bench of he High Court and of this Court in arguing an impossible proposition.
Nevertheless, the award given by Shri Gupta as the Presiding Officer of the Labour Court is defended by the State Government on the Plea that Shri Gupta 's appointment cannot be challenged in a collateral proceeding filed in the High Court for challenging the award.
Reliance is placed in support of this submission on the following passage in Cooley 's "A Treatise on the Constitutional Limitations" (8th edn; vol. 2; pages 1255 1358); "An officer de jure is one who, possessing the legal qualifications, has been lawfully chosen to the office in question, and has fulfilled any conditions precedent to the performance of its duties.
By being thus chosen and.
observing the precedent conditions, such a person becomes of right entitled to the pos session and enjoyment of the office, and the public, in whose interest the office is creat ed, is entitled of right to have him perform its duties.
If he is excluded from it, the exclusion is both a public offense and a private injury.
An officer de lure may be excluded from his office by either an officer de facto or an intruder.
An officer de facto is one who by some color of right is in possession of an office and for the time being performs its duties with public acquiescence though having no right in fact.
His color of right may come.
from an election or appointment made by some officer or body having colourable but no actual right to make it; or made in such disregard of legal requirements as to be ineffectual in law; or made to fill the place of an officer illegally removed; or made in favor of a party not having 310 the legal qualifications; or it may come from public acquiescence in the officer holding without performing the precedent conditions, or holding over under claim of right after his legal right has been terminated; or possibly from public acquiescence alone when accompa nied by such circumstances of official reputa tion as are calculated to induce people, without inquiry, to submit to or invoke offi cial action on the supposition that the person claiming the office is what he assumes to be.
An intruder is one who attempts to perform the duties of an office without au thority of law, and without the support of public acquiescence.
No one is under obligation to recognise or respect the acts of an intruder, and for all legal purposes they are absolutely void.
But for the sake of order and regularity, and to prevent confusion in the conduct of public business and in security of private rights, the acts of officers de facto are not suffered to be questioned because of the want of legal authority except by some direct proceeding instituted for the purpose by the State of by some one claiming the office de lure, or except when the person himself attempts to build up some right, or claim some privilege or emolument, by reason of being the officer which he claims to be.
In all other cases the acta of an officer de facto are as valid and effectual, while he is suffered to retain the office, as though he were an officer by right, and the same legal consequences will flow from them for the protection of the public and of third parties.
This is an important principle, which finds concise expression in the legal maxim that the acts of officers de facto cannot be questioned collaterally.
" Equally strong reliance was placed by the State Govern ment on a decision of the Ontario Supreme Court in Rs Toronto N. Co. City of Tornoto (1) in which, after an exami nation of several American and other decisions, Meredith, C.J.O., observed: "That it is not open to attack, in a collateral proceeding, the status of a de facto Judge, having at least a colourable title to the office, and that his acts are valid, is clear, I think, on principle and on authority, and it is also clear that the proper proceeding to question his right to the office is by quo warranto information." (PP.
551 552) Learned counsel for the State, Shri Naunit Lal, further drew our attention to a decision of the High Court of Tra vancore Cochin in Bhaskera Pillai and Ant.
State(2) which, relying upon the passage in Cooley 's Constitutional Limitations and the Canadian case, held that the appoint ment of the Chief Justice of that Court could not be ques tioned collaterally in a proceeding for leave.
to appeal to the Supreme Court against the decisions rendered by him.
Some sustenance was also sought to the same argument from a decision of a Full Bench of (1) 46 Dominion Law Report 547.
(2) (1950) 5, D.L.R. Travancore Cochin 382.
311 the Allahabad High Court in Queen Empress vs Garsa Sam(1) in which it was held that where a person had in fact been exercising all the functions of a Judge of the High Court, the appointment even if apparently ultra vires must never theless be presumed, in the absence of fuller information, to have been legally made in the exercise of some power, unknown to the Court, vested in the Secretary of State for India.
Broadly, the starting point and the primary basis of these decisions is the passage from Cooley 's Constitutional Limitations, which we have extracted above.
That passage says and means that the acts of officers de facto cannot be suffered to be questioned for want of legal authority except by some direct proceeding.
This important principle, according to Cooley, finds concise expression in the legal maxim that the acts of officers de facto cannot be allowed to be questioned collaterally.
Considering the nature and course of proceedings in the instant case, it seems to us impossible to hold that the challenge to Shri Gupta 's appointment was made in a collat eral proceeding.
That Shri Gupta 's appointment was not challenged in the very proceeding before him does not meet the point and in any case, if the proper mode to challenge the validity of an appointment to a public office is by a petition for the writ of quo warranto, the Labour Court over which Shri Gupta presided was hardly an appropriate forum for challenging the appoinment of its Presiding Officer.
The 1st respondent, the Haryana Co operative Transport Ltd., against whom Shri Gupta gave the award, filed a writ peti tion in the High Court of Punjab and Haryana to challenge the award on the ground that Shri Gupta was not qualified to hold the office of a Judge of the Labour Court and, there fore, the award given by him was without jurisdiction.
The challenge to Shri Gupta 's appointment having been made by a writ petition under articles 226 and 227 of the Constitution, to which Shri Gupta was impleaded as a partyrespondent, the challenge was made directly in a substantive proceeding and not collaterally.
The writ petition was filed mainly with a view to challenge Shri Gupta 's appointment on the ground that he was not qualified to fill the post to which he was appointed.
Having been impleaded to the writ peti tion he had a clear and rightful opportunity to defend his appointment.
The proceedings by way of a writ petition were taken not collaterally for attacking an appointment to a judicial office in a proceeding primarily intended for challenging a so called judicial decision, but the proceed ing was taken principally and predominantly for challenging the appointment itself.
None of the decisions, nor indeed the passage in Cooley 's Treatise, is therefore, any answer to the prayer that the award be declared to be ultra vires on the ground that the officer who gave it was not qualified to hold that post in the exercise of whose functions the award was given.
The mere circumstance that the 1st respondent did not in so many words ask for the writ of quo warranto cannot justi fy the argument that the appointment was being challenged collaterally in a proceeding takes to challenge the award.
Considering the averments in the writ petition, it seems to us clear that the main and real attack on the award (3) I.L.R. 16.
4 1546 SCI/76 312 was the ineligibility of Shri Gupta to occupy the post of a Judge of the Labour Court, in the discharge of whose func tions the award was rendered by him.
The relief of certio rari asked for by writ petition was certainly inappropriate but by clause (c) of paragraph 16, the High Court was invited to issue such other suitable writ, order or direc tion as it deemed fit and proper in the circumstances of the case.
There is no magic in the use of a formula.
The facts necessary for challenging Shri Gupta 's appointment are stated clearly in the writ petition and the challenge to his appointment is expressly made on the ground_ that he was not qualified to hold the post of a Judge of the Labour Court.
It must be mentioned that in the Canadian case of re Toronto vs City of Toronto (supra) the contention was that the Ontario Railway and Municipal Board was a "Superior Court" within the meaning of section 96 of the British North America Act and its members, not having been appointed by the Governor General, had no jurisdiction to exercise the powers conferred upon the Board by the Act by which it was created.
This argument was repelled firstly on the ground that the Board was not a Court but an administrative body and secondly on the ground that there was nothing to show that the members of the Board were not appointed by the Governor General.
In the Travancore Cochin case the Chief JustiCe whose appointment was challenged was qualified to hold that post since he had held the office of a Judge of the Madras High Court though he had retired from that office on attaining the age of 60.
The question really turned on the construc tion of article 376 (2) of the Constitution which confers power on the President is determine the period for which a Judge of a High Court in any Indian State corresponding to any State specified in part B of the First Schedule holding office immediately before the commencement of the Constitu tion may continue to hold that office.
Besides, the Chief Justice 's appointment was challenged collaterally in appli cations for leave to appeal to the Supreme Court against the judgments pronounced by him.
The Full Bench judgment of the Allahabad High) rested on the presumption, in the absence of fuller information, that the appointment must be deemed to have been made in the exercise of some power vested in the Secretary of State for India even if such power was unknown to the Court.
Deliver ing the judgment of the Court, Edge, C.J. observed at page 157: "Being in ignorance as to whether or not any power existed under which Mr, Justice Burkitt may have been lawfully appointed to act as a Judge of this court, we hold that the presumption that he was duly appointed, which arises from the fact of his having acted as a Judge of the Court since November 1892, has not been re butted.
This may seem to be a lame and impotent conclusion for a Court of Justice to arrive at concerning the validity of the appoint ment of one of its acting Judges, but our lack of necessary information,ion as to the appointment, coupled with the circumstances of the case, permits of our arriving at no other.
" Learned counsel for the State of Haryana contends that there is one more impediment in the Court holding that Shri Gupta was not 313 qualified under section 7(3) of the Act to be appointed as a Judge of the Labour Court.
Reliance is placed in support of this argument on section 9(I) of the Act which reads thus: "9.
Finality of orders constituting Boards, etc. (1) No order of the appropriate Government or of the Central Government appointing any person as the chairman or any other member of a Board or Court or as the presiding officer of a Labour Court, Tribunal or National Tribunal shall be called in ques tion in any manner; and no act or proceeding before any Board or Court shall be called in question in any manner on the ground merely of the existence of any vacancy in, or defect in the constitution of, such Board or Court.
" It is true that s.9(1) is worded so widely and generally that it could cover any and every challenge to the appoint ment to the particular posts therein mentioned.
But it is impossible to construe the provision as in derogation of the remedies provided by articles 226 and 227 of the Consti tution.
The rights conferred by those articles cannot be permitted to be taken away by a broad and general provision in the nature of s.9(1) of the Act.
The words "in any manner" which occur in s.9(1) must, therefore, be given a limited meaning so as to.
bar the jurisdiction of civil courts, in the ordinary exercise of their powers, to enter tain a challenge to appointments mentioned in the sub sec tion.
The High Court of Assam(1), Bombay(2) and Rajasthan(3) have taken, like the High Court of Punjab and Haryana in the instant case, a correct view of the scope and meaning of s.9(1) of the Act by limiting its operation to ordinary powers of the civil Courts.
The rights conferred by articles 226 and 227 can be abridged or taken away only by an appro priate amendment of the Constitution and their operation cannot be whittled down by a provision like the one con tained in s.9( 1 ) of the Act.
Accordingly, it is open to the High Courts in the exercise of their writ jurisdiction to consider the validity of appointment of any person as a chairman or a member of a Board or Court or as a presiding officer of a Labour Court, Tribunal, or National Tribunal.
If the High Court finds that a person appointed to any of these offices is not eligible or qualified to hold that post, the appointment has to be declared invalid by issuing a writ of quo warranto or any other appropriate writ or direction.
To strike down usurpation of office is the function and duty of High Courts is the exercise of their constitutional powers under articles 226 and 227.
In the result we affirm the judgment of the High Court and dismiss this appeal.
We are thankful,.
to Shri Wad for assisting the Court as amicus.
S.R. Appeal dismissed.
(1) Bozbarua (G.C.) vs Sate of Assam 1954 Assam 161.
(2) lagannath Vinayak Kale vs Ahmedi (1958) II L.L.J. 50 (Bom.) (3) Mewer Textile Mills Ltd. vs Industrial.
| The first respondent, a Co operative Transport Society terminated the services of respondent 3 and 4.
The State of Punjab referred the dispute arising out of the dismissal of respondents 3 to 4 under section 10 of the to the Labour Court that was presided over by Mr. Das.
On Mr. Das 's retirement Shri Hans Raj Gupta was ap pointed as the Presiding Officer of the Court.
Mr. Gupta gave an award directing the reinstatement of respondents 3 and 4 with 50 per cent back wages from the date of their dismissal until the date of reinstatement.
The first respondent being aggrieved by the award filed a writ petition in the High Court under Articles 226 and 227 of the Constitution praying that the award given by second respondent be set aside on the ground, inter alia, that he was not qualified to become the Presiding Officer under section 7(3) of the Act since he did not hold any judicial office in India for not less than 7 years.
The contention of respondent No. 2 was that he held such a judicial office because he worked as Upper Division Clerk cum Head Clerk, Assistant Settlemeat Officer and Registrar of the Pensions Appeals Tribunals.
The contention that he held judicial office was not pressed before the High Court and in this Court by the State.
The State Government, however. supported the award on the plea that Mr. Gupta 's appointment cannot be challenged in collateral proceedings filed in the High Court for challenging the award.
Re Toronto & Co. vs City of Toronto 46 Dominion Law Reports 547; Bhaskara Pillai and Anr.
vs State [1950] 5DLR Travailcore Cochin 382 and Queen Empress vs Ganga Ram ILR 16 All.
136 distinguished.
Dismissing the appeal, HELD: 1.
Considering the nature and course of proceedings in the instant it is impossible to hold that the challenge to Mr. Gupta 's appointment was made in a collateral proceeding.
The appointment of Mr. Gupta could not have been challenged before him.
The challenge to his appointment having been made by writ petition under Articles 226 and 227 of the Constitution to which Mr. Gupta was impleaded as a party respondent, the challenge was made directly in a substantive proceeding and not in a collateral proceeding.
Since he was impleaded in the writ petition he had a clear and right ful opportunity to defend kid appointment.
[311 C E] 2.
The mere circumstance that the first respondent did not in so many words ask for a writ of quo warranto cannot justify the argument that the appointment was being chal lenged collaterally in a proceeding taken to challenge the award.
On the averments in the writ petition it is clear that the main and real attack on the award was the ineligi bility of Shri Gupta to occupy the post of a Judge of a Labour Court in the discharge of whose functions the award was rendered by him.
[311 G H, 312A] 307 3.
The relief of certiorari asked for by the writ peti tion was certainly inappropriate but the High Court was also invited to issue such other suitable writ, order or direction as it deemed fit and proper in the circumstances of the case.
There is no magic in the use of a formula.
The facts necessary for challenging the appointment are stated clearly in the writ petition and the challenge to the ap pointment is expressly made on the ground that the officer was not qualified to hold the post.
[312A B] 4.
The finality of the orders of the Labour Court con templated by section 9(1) although widely worded must be given a limited meaning so as to bar the jurisdiction of civil courts in the ordinary exercise of their powers.
It is impossible to construe the provisions in derogation of the remedies provided by Article 226 and 227 of the Constitu tion.
[313D E] Bezparua (G.C.) vs State of Assam A.J.R. 1954 Assam 161, Jagannath Vinayak Kale vs Ahmadi [1958] II L.L.J. 50 (Bom.) and Mewar Textile Mills Ltd. vs Industrial Tribunal A.I.R. , approved.
|
iminal Appeal No.207 of 1969.
Appeal by special leave from the judgment and order dated September 11, 1969 of the Delhi High Court in Criminal Misc.
(Main) No. 53 of 1969.
V. A. Seyid Muhammad and section P. Nayar, for the appellant.
R. Jethamalani, Harjinder Singh, Kumar Mehta, H. K. Puri and Rameshwar Nath, for respondent No. 1.
Immediately after his arrest, he made a confession before a Magistrate.
Since then, he has been in custody part of the time under section 3 (2) (g) of the , part of the time as a convict in various offences for which he was convicted, and part of the time as an under trial prisoner.
The first regular case filed against him was under section 5 of the in which he was convicted on 29th January, 1965 and sentenced to undergo six month 's rigorous imprisonment after he had pleaded guilty.
While he was undergoing that sentence, a second case was filed against him for an offence under section 135 of the in which he was convicted and sentenced to nine months ' rigorous imprisonment and a fine of Rs. 2,000 again after he had pleaded guilty.
This conviction was recorded on 29th May, 1965.
After he had undergone this sentence, he was again put in detention under section 3 (2) (g) of the .
This detention was challenged by him by filing two writ petitions in the High Court of Punjab, and in this, Court, but both the writ petitions were dismissed.
Then, on 17th January, 1967, a case was filed in the Court of Miss K. Sen Gupta, S.D.M., New Delhi, for a substantive offence under section 135 of the , for an offence under section 120 B of the Indian Penal Code read with section 135 of the Customs ' Act and section 23 (1 ) (a) of the Foreign Exchange Regulations Act, and an offence under section 23 (1 ) (a) of the Foreign Exchange Regulations Act read with sections 109 and 114 of the Indian Penal Code.
The respondent again pleaded guilty, was convicted on 31st January, 1969, and was sentenced to undergo rigorous imprisonment for six months and to pay a fine of Rs. 2,000.
In this case, 17 other persons were prosecuted as his co accused.
114 During the pendency of this case,, another case was filed in the Court of Shri N. C. Jain, S.D.M., New Delhi, on 18th March, 1968 against the respondent and 45 other persons charging them with offences under section 120, I.P.C., read with section 135 of the , section 167(81) of the and section 23 (1 A) of the Foreign Exchange Regulations Act, as well as substantive offences under section 135 of the , section 167(81) of the , and section 23(1 A) of the Foreign Exchange Regulations Act.
Having already been convicted for some of the offences, particularly the offence of conspiracy in the earlier case, on the 31st January, 1969, the respondent moved a writ petition in the High Court on 4th April,, 1969, for quashing these last proceedings on the ground that, having been convicted for a conspiracy earlier, he could not be retried for the same conspiracy, so that this trial was invalid.
In the alternative, the respondent prayed that, in case the proceedings are not quashed, the proceedings against him be separated from other co accused, his plea of guilty be recorded, and he be convicted in? accordance with law.
Two other alternative prayers were that, in case the first two prayers were not accepted, the trial Court may be directed to record the plea of guilty of the respondent and convict him in accordance with law even in the joint trial, and, in the alternative, the trial Court be ordered to take up the proceedings day to day and a time limit may be fixed by which the complainant should furnish the evidence against the respondent before the Court.
The High Court, by its order dated 11th September, 1969, accepted the plea of the respondent, held that this second trial for the offence of conspiracy was barred as a result of the earlier trial in which the respondent had been convicted on 31st January, 1969, and, consequently, quashed the proceedings in respect of this offence.
The Court also quashed the proceedings in respect of specific offences under section 135 of the and section 23(1 A) of the Foreign Exchange Regulations Act insofar as they related to smuggling of 52 kilograms of gold into India on or about 8th May, 1964 on the ground that the respondent had already been convicted and sentenced in respect of these offences.
The High Court, however, added a sentence that, if the respondent is accused of any other specific acts of smuggling , there will be no bar against the continuation of prosecution proceedings in respect of them.
It is this order which has been challenged before us in this 'appeal by special leave.
In this case, it was very unfortunate that, when the writ petition was heard by the High Court, the very first confession made by the respondent, which was to a great extent the basis of the various prosecutions, was not placed before the High Court and was not brought to its notice.
Obviously, there was carelessness on the part of the prosecution in not bringing it to the notice of 115 the High Court.
At the same time, the respondent, who had challenged the prosecution, also owed a duty to bring that confession to the notice of the High Court as the burden lay on him to show that the prosecution going on against him was illegal and liable to be quashed; and he had moved the High Court to exercise its extra ordinary writ jurisdiction to obtain this relief.
In his writ petition, the respondent had offered to produce the copy of the confession for perusal of the Court, but the Court lost sight of this offer and proceeded to pass the order without examining the confession.
The importance of this omission lies in the fact that a reading of the confession itself makes it manifest that there were two different and separate conspiracies, one which was, headed by a person known as Abid Hussain, and the other by another person known as Allau din.
The respondent, in the confession, made statements which indicated that these two conspiracies were distinct and separate ones, though a few of the persons involved in the two conspiracies were common.
In fact, the confession showed that, at one stage, he was given in structions by the head of one of the conspiracies to see that his part in that conspiracy did not come to the knowledge of the head of the other conspiracy.
It is true that, at the initial stage, the customs authorities, even after, the confession, proceeded on the view that, very likely, there was one single conspiracy and that the respondent had incorrectly tried to show that there were two separate conspiracies in which he was involved.
That appears to be the reason why, at the early stages, in the various documents put forward before the courts, the authorities used language indicating that there was one single conspiracy in respect of which the respondent was being held in custody and was going to, be prosecuted.
It appears that it was much later, after detailed investigation, that the authorities became satisfied that there were two separate conspiracies and, consequently, came forward with a second prosecution of the respondent in respect of the conspiracy which was not the subject matter of the first complaint on the basis of which the respondent was convicted on 31st January, 1969.
That the authorities were under the impression that there was only one single conspiracy at the earlier stages is apparent from the facts stated in the complaint dated 5th April, 1965 in respect of the substantive offence under section 135 of the , and even later, in an affidavit filed on 5th January, 1966 by the Under Secretary to Government in reply to the habeas corpus petition filed by the respondent in the High Court, the allegations made out as if there was one single conspiracy which was engineered by a syndicate headed by Abid Hussain.
Even at the time of the prosecution for the first conspiracy on 17th January, 1967, the facts given in the complaint created the impression that there was one single conspiracy and that Allau din was one of the conspirators in that conspiracy and was not the head of that 116 separate conspiracy for which the respondent and 17 others were prosecuted.
These circumstances were partly explained in a later affidavit of H. K. Kochhar, Assistant Collector of Customs, sworn on 12th May, 1969, and filed in the High Court in reply to the petition under article 226 of the Constitution on which the High Court passed the present impugned order.
The High Court preferred to attach greater weight to the affidavit of the Under Secretary to Government and did not choose to act at all on the affidavit of H. K. Kochhar, considering that the former affidavit was by a senior officer on behalf of the Government, while the,, latter affidavit had been sworn by an Assistant Collector of Customs only.
In adopting this course, the High Court lost, sight of the.
circumstance that the affidavit of the Under Secretary was filed in January, 1966 when the investigation of the various facts was at a fairly early stage, while Kochhar 's affidavit was filed in May, 1969, by which time fuller investigation had been made by the authorities and they had discovered that their first impression that there was one single conspiracy was incorrect.
The position has been further clarified before us in the affidavit of the Collector of Customs, R. Prasad, filed in reply to the petition for revocation of special leave to appeal on the basis of which this appeal has 'been heard by us.
These facts made it clear that the High Court misdirected itself in accepting the plea of the respondent and in quashing the proceedings.
In fact, Mr. Jethmalani, counsel for 'the respondent, did not make any serious effort to justify the order of the High Court after we had gone through the confession of the respondent, so that it is obvious that the order of the High ,,Court quashing the proceedings was not justified.
Mr. Jethmalani, however, urged that, even though the order of the High Court may not be justified, the circumstances of this case do not require that this Court should exercise its special powers under article 136 of the Constitution to order a trial of the respondent and reopen the proceedings.
He drew our attention to two decisions of this Court K.V.Krishnamurthy Iyer and others vs The State of Madras(1), and The State of Bihar vs Hiralal Kejriwal and another(2) in which this Court declined to ,order a re trial in exercise, of its powers under article 136 of the ,Constitution even though the orders in which the trials had terminated were held to be incorrect and set aside.
In both the .,cases, the principle laid down was that public interest or th interest of justice did not require that there should be a fresh trial.
Reliance was also placed on the views expressed by 'Bombay High Court in Chudaman Narayan Patil vs State of Maharashtra(3).
On the basis of the views expressed in those (1) A.I.R. 1954 S.C. 406.
(2) [1960] 1 S.C.R. 726.
(3) A.I.R. 1969 Bom.
117 cases, he urged that, in this case, the respondent had been in. custody for a period of about six years since his arrest and was being harassed by prosecutions launched one after the other, while.
being kept in custody under section 3 (2) (g) of the .
during the period when he could not be detained either as a convict or as an under trial prisoner.
He also emphasised the frank confession of his part in the conspiracies and that, every time.
frank confession of his part in the conspiracies and that, everytime a case was brought up against him, he stuck to that confession.
and pleaded guilty in court.
He was also given the impression, when the earlier case of conspiracy was started on 17th January., 1967, that after the trial of that case, his woes will be over and.
he will not have to face any further trials.
We have considered these aspects, but we do not think that.
this is a fit case where we should uphold the order of the HighCourt quashing the proceedings which were validly started and which related to an entirely distinct and separate offence of cons piracy apart from the one for which the respondent has already been convicted.
The offences for which he is now being tried.
are of such a nature that they may have far reaching implications, and we do not think that it will be in the public interest that the trial should be given up merely because there has been delay in, sending up the case.
The case related to a conspiracy and we can very well appreciate that investigation of an offence of cons piracy is necessarily prolonged and requires considerable work by the investigating authorities, so that certain amount of delay is bound to take place in putting the case before the court.
In the present case, the matters appear to have been complicated by the fact that, at the earlier stages, the authorities were under the impression that there was one single conspiracy.
We are unable to find any material to suggest that the prosecution have deliberately prolonged the investigation or delayed bringing the case before the court.
We may also add that we are not impressed by the argument advanced by Mr. Jethmalani that the respondent could have been charged for this conspiracy even in the earlier case in which he was convicted on 3 1 st January, 1969 under the provisions of section 236 of the Code of Criminal Procedure, because the two conspiracies, according to the prosecution, are two entirely separate and distinct ones and are not based on allegations of identical acts having been committed by the offenders.
In this case, therefore, it appears to be appropriate that the respondent should be tried for the conspiracy on the basis of which proceedings are being taken which have been quashed by the High Court.
We, however, consider that, in view of the long delay and in view of the circumstance that the respondent has been pleading 118 guilty, his second alternative request in the writ petition is justified.
Merely because he is a co accused with 45 others there is no justification that he should be subjected to a prolonged trial, specially because we have been assured by the counsel for the respondent that the respondent is still sticking to his confession and will, very likely, plead guilty as soon as a charge is framed against him.
In the circumstances, while allowing the, appeal and setting aside the order of the High Court, we direct that the trial of the respondent shall be separated from all other 45 co accused and will be proceeded with separately.
Dr. Seyid Muhammad, counsel for the appellant, opposed this separation of the trial of .the respondent on the ground that, if there is a joint trial, the confession of the respondent can be taken into account by the court trying the case against his co accused which will not be permissible if the respondent is separately tried. '.
That is no ground for unnecessarily delaying the trial of the, respondent specially when, if the prosecution desire, they can either apply to the Court to make the respondent an approver or can even produce the respondent as a witness in the case against others after his ,conviction.
In fact, if any of these two alternative courses is adopted.
it will be fairer to the other co accused who will then have an opportunity of cross examining the respondent before his statement is taken in evidence against them.
On our enquiry, Dr. Seyid Muhammad stated that it will be 'possible for the prosecution to produce sufficient evidence to make out a prima facie case on the basis of which a charge can be framed by the court, if a period of two months is allowed to the prosecution to produce evidence in the trial.
On behalf of the respondent, a request was made that we.
should fix a timelimit for completion of the whole trial in view of the long delay.
We, however, consider that it is sufficient to make a direction that the Magistrate will allow a period of not more than two months to the prosecution to produce evidence to make out a prima facie case against the respondent, calculated from the date on which .the copy of our order is received by the trial Court.
On the expiry of the period of two months, the Court will proceed either to frame a charge or to discharge the respondent in accordance with his judgment whether the evidence produced does or does not make out a prima facie case to justify framing of a charge.
It is to this extent only that we are laying down a time schedule for the trial Court which we consider necessary to avoid possible harassment of the respondent.
| Agricultural income as defined in a. 2(1) of the Indian Income.
tat Act, 1922, signifies income proximately derived from direct association with land by a person who actually tills the land or 877 gets it cultivated by others.
Agricultural income does not mean income which can be ultimately or indirectly traced to have connection with agricultural operations.
Even though a tea company growing and manufacturing top gets an exemption of 60 per cent.
of the profits as agricultural income in accordance with rule 24 framed under section 59 of the Act, it must be held that the dividend of such company is not derived by the shareholder owing to his direct connection with the land in which be% is grown and such dividend is not agricultural income within the meaning of section 2(1) of the Act and hence is not exempted from income tax under section 4(3)(viii) of the Act.
The dividend of a shareholder is the outcome of his right to participate in the profits of the company arising out of the contractual relation between the company and the shareholder and this right exists independently of any declaration of the dividend though until such declaration the enjoyment of the profits is postponed.
The shareholder by purchase of the share does not acquire any interst in the assets 'of the company till after the company is wound up.
The position of a shareholder of a company is altogether different from that of a partner of a firm.
A company is a juristic entity distinct from the shareholders but the firm is a collective name or an alias for all the partners.
Decisions based on the peculiarities of Income tax law of England are hardly safe guides for determining the true meaning of the term "agricultural income" Under the Indian Income tax Act, 1922.
Chiranjit Lal Chowdhuri vs The Union of India [1950] S.C.R. 869) followed.
Commissioners of Inland Revenue vs Forrest (1924) 8 T.C. 704, Borland 's Trustee vs Steel Brothers & Co. Ltd. L.R. , Commissioner of Income tax, Bihar and Orissa vs Baia Bahadur Kamakshya Narayan Singh and Others , Premier Construction Co. Ltd. vs Commissioner of lncome tax, Bombay City and Maharaj kumar Gopal Saran Narain Singh vs Commissioner of Income tax, Bihar and Orissa referred to.
|
Appeal No. 674 of 1965.
Ml 7 Sup.
C. I/66 761 762 Appeal by special leave from the judgment and order dated March 14, 1962 of the Madras High Court in T. C. No. 209 of 1959.
B. Sen and R. N. Sachthey, for the appellant.
A. K. Sen, and R. Ganapathy Iyer, for the respondent.
The respondent is a public limited company incorporated under the Indian Companies, Act, 1913 in the year 1939 and was carrying on the business of manufacture of absorbent cotton wool.
In March 1955, the Board of Directors resolved to establish a new spinning unit under the name of Sudarsanan Spinning Mills for which a licence was obtained from the Government of India under the Industries (Development and Regulation) Act, 1951 in August 1955.
The respondent placed orders for purchase of necessary spinning machinery and plant in the months of January and February, 1956.
The construction of factory buildings was taken in hand in March, 1956, and these constructions were completed by December, 1957.
The erection of the spinning machinery and the plant in the buildings was completed in several stages commencing from June, 1957.
A licence from the Inspector of Factories for working the factory was obtained in June, 1958.
The statement of the case further mentioned that the time given to complete the project was extended by the Government up to 17th March, 1959.
The respondent was assessed to wealth tax for the assessment year 1957 58, and in that year the respondent claimed that, in computing the wealth on the valuation date which was 30th September, 1956, an amount of Rs. 1,43,727 should be deducted as being the amount laid out in setting up this new unit.
The Wealth Tax Officer disallowed the claim on the ground that the unit was set up prior to the date on which the Wealth Tax Act (hereinafter referred to as "the Act") came into force, i.e., 1st April 1957.
On the same basis, the Appellate Assistant Commissioner and the Income tax Appellate Tribunal upheld that order.
Thereupon, at the request of the respondent, the following question of law was referred for opinion of the High Court of Madras: "Whether the aforesaid asset of Rs. 1,43,727 is exempt under section 5(1)(xxi) read with the second proviso thereunder of the Wealth tax Act?" The High Court answered the question in favour of the respondent, and consequently, this appeal has been brought up to this Court by the Commissioner of Wealth Tax, Madras, by special leave.
The question that fell for determination depended on the interpretation of section 5(1)(xxi) of the Act read with the second proviso to that clause which are reproduced below: 763 .lm15 "5(1)(xxi) that portion of the net wealth of a company established with the object of carrying on an industrial undertaking in India within the meaning of the Explanation to clause (d) of section 45, as is employed by it in a new and separate unit set up after the commencement of this Act by way of substantial expansion of its undertaking: Provided that (a) (b) Provided further that this exemption shall apply to any such company only for a period of five successive assessment years commencing with the assessment year next following the date on which the company commences operations for the establishment of such unit.
" It has been urged before us by learned counsel for the Commissioner that the main provision of clause (xxi) should be interpreted in conjunction with the second proviso so as to give a harmonious construction to both parts of the provision with which we are concerned.
Relying on this principle, he urged that we should hold that a new and separate unit is set up only when the company commences operations for the establishment of such unit.
He relied on the principle stated by Maxwell in his book 'On Inter pretation of Statutes ' 11th Edn.
at P. 155 that there is no rule that the first or enacting part is to be construed without reference to the proviso.
"The proper course is to apply the broad general rule of construction, which is that a section or enactment must be construed as a whole, each portion throwing light, if need be, on the rest." "The true principle undoubtedly is that the sound interpretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and construed together is to prevail.
" The view taken by the High Court was challenged on the ground that the High Court had interpreted the principal clause without giving full effect to the language of the proviso.
The High Court held that unless a factory is erected and the plants and machinery installed therein, it cannot be said to have been set up.
The resolution of the Board of Directors, the orders placed for purchasing machinery, licence obtained from the Government for constructing the machinery, are merely initial stages towards setting up, however necessary and essential they may be to further the achievement of the end.
It is not, however, the actual functioning of the factory or its going into production that can alone be called setting up of the factory.
The setting up is perhaps a stage anterior to the commencement of the factory.
Thereafter, 764 the High Court referred to a decision of the Bombay High Court in Western India Vegetable Products, Limited vs Commissioner of Income tax, Bombay City,( ') and on its basis, concluded that the proper meaning to be assigned to the expression "set up" in section 5(1)(xxi) would be "ready to commence business.
" We are unable to agree with the learned counsel for the Commissioner that in arriving at this view, the High Court committed any error.
A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up.
It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing Organisation that it can be said that the unit has been set up.
The expression used in the proviso, under which the period for which the exemption is available is to be deter mined, is not the same as used in the principal clause.
In the proviso, the period of five successive years of exemption has to commence with the assessment year next following the date on which the company commences operations for the establishment of the unit.
Operations for the establishment of a unit, from the very nature of that expression, can only signify steps that have to be taken to establish the unit.
The word "set up" in the principal clause, in our opinion, is equivalent to the word "established", but operations for establishment cannot be equated with the establishment of the unit itself or its setting up.
The applicability of the proviso has, therefore, to be decided by finding out when the company commenced operations for establishment of the unit, which operations must be antecedent to the actual date on which the company is held to have been set up for purposes of the principal clause.
This is also the meaning that the Bombay High Court derived in the case of Western India Vegetable Products Ltd.(,) where that Court was concerned with the interpretation of the expression "set up" as used in section 2(l1) of the Income tax Act.
That Court held: "It seems to us that the expression 'settling up ' means, as is defined in the Oxford English Dictionary, 'to place on foot" or 'to establish ', and is contradistinction to 'commence. ' The distinction is this that when a business is established and is ready to commence business, then it can be said of that business that it is set up.
But before it is ready to commence business it is not set tip.
" This view was expressed when that Court was considering the difference between the meaning of the expression "setting up a business" and " commencing of a business.
" In the case before us, the proviso does not even refer to commencement of the unit.
The criterion for determining the period of exemption is based on the commencement of the operations for the establishment of the unit.
These operations for establishment of the unit cannot be simultaneous with the setting up of the unit, as urged on behalf of the Commis sioner, but must precede the actual setting up of the unit.
In fact, (1)26 I.T.R 15 1. 765 it is the operations for establishment of a unit which ultimately culminate in the setting up of the unit.
On this interpretation, it is clear that in this case, the claim put forward by the respondent for exemption has been rightly held to be allowable by the High Court.
In the statement of the case and in its appellate judgment, the Tribunal did not specifically record any finding as to the date when the unit was ready to go into business and to start production.
In the appellate order, it was mentioned that according to the respondent, the unit was set up only when the Inspector of Factories issued a licence to the respondent for working the factory, which was in June, 1958.
In the, statement of the case, the facts recited show that the construction of the factory buildings was completed by December, 1957 and the erection of the spinning machinery and plant was completed in several stages commencing from June, 1957.
On these facts, the High Court, and we consider rightly, proceeded on the basis that the unit was completed and became ready to go into business only after 1st April, 1957, when the Act had already come into force.
Consequently, the condition laid down in the principal clause of section 5(1)(xxi) was satisfied, and the company became entitled to exemption in respect of the value of the assets used up in setting up this unit.
Learned counsel for the Commissioner, however, challenged the right of the respondent to claim this exemption on another ground, viz., that the exemption was claimed in respect of money laid out in a period which was not covered by the period envisaged in the second proviso.
It was urged that if it be held that the unit was set up after the Act had come into force on the 1 st April, 1957, it must also be held that the operations for the establishment of the unit had been commenced by the company almost simultaneously with the unit having been set up, and that date would, therefore, be a date subsequent to the assessment year 1957 58 in which year the exemption was claimed.
This is a question which we do not think can be legitimately raised on behalf of the Commissioner at this stage.
The only contention before the Tribunal on behalf of the Commissioner was that the operations for the establishment of the unit had been commenced by the respondent before the Act came into force, and that it should be held that the unit was also set ;up at the same time when those operations were commenced.
There was no contention at any stage that the operations for the establishment of the unit were commenced at a subsequent stage.
In fact, it was only for the purpose of urging that the principal clause was not applicable to the case of the respondent that the position was taken up on behalf of the Commissioner that the operations for establishment of the unit had been commenced before 1st April, 1957, and the unit must be held to have been set up at the same time 766 when those operations were commenced.
That submission, as we have indicated above, has no force.
In any case, the judgments passed by all the Wealth tax Authorities show that it was at no stage in dispute that the operations for establishment of the unit had been commenced by the respondent prior to 1 st April, 1957.
Para 5 of the statement of the case mentions that the the wealth tax officer disallowed the claim on the ground that unit was set up prior to 1st April, 1957.
The Appellate Assistant Commissioner also in his judgment said: "In this view of the matter, the appellant set up the undertaking even prior to 1st April, 1957 as operations were carried out prior to that date for the establishment of the undertaking.
The operations consisted of the seeking of permission from the Government to install the unit, and placing of orders with manufacturers of machinery and advancing of moneys towards the purchase of machinery.
" The Tribunal also disallowed the claim on the basis that the respondent commenced operations for setting up the unit earlier than 1st April, 1957.
It does not appear to be necessary for us to express any opinion as to the particular stage at which it can be said that a company commences operations for the establishment of a unit.
In the present case, the Tribunal proceeded on the basis that, whatever be the exact date of commencement of the operations for establishment of this unit by the respondent, it was certainly before 1st April, 1957; and we consider that that fact, by itself, is sufficient to entitle the respondent to claim the exemption.
The Commissioner cannot, at this stage, be allowed to raise a new question and ask this Court to decide that the date of commencement of the operations for establishment of the unit by the respondent was different from that accepted by the Tribunal.
That question was not raised and dealt with by the Tribunal.
It is not even a question that might have been raised before the Tribunal and the Tribunal might have failed to deal with, nor is it a question which may not have been raised before the Tribunal and, yet, was dealt with by it.
On the principle laid down by this Court in Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co., Ltd.,( ') such a question could not be canvassed before the High Court and cannot be allowed to be raised in this Court.
The question referred to the High Court had to be answered on the basis that the respondent did commence operations for establishing this unit before 1st April, 1957; and the further finding of fact recorded by the Tribunal is that a sum of Rs. 1,43,727/ had been invested in setting up the unit by 30th September, 1956, which was the valuation date for the assessment year 1957 58.
The very first assessment year after the commencement of the operations for establishment of the unit was this assessment year 1957 58, In the Wealth Tax Act, assessment (1) ; I.T.R. 589.
767 year has been defined to mean the year for which tax is chargeable under section 3 of that Act.
Since the Act came into force on the 1st April, 1957, the financial year 1957 58 was the first assessment year for which tax became chargeable, and consequently, for purposes of the second proviso to section 5(1)(xxi), the assessment year following the commencement of operations for establishment of the unit in the case of any company which commenced the operations any time before the 1st April, 1957, will be the assessment year 1957 58.
Prior to the year 1957 58, there was no assessment year as defined under the Act, and consequently, the first assessment year for which exemption could be claimed was this assessment year 1957 58.
The respondent which had commenced operations for establishment of its new unit prior to 1st April, 1957, was rightly allowed exemption in respect of the amount that had been invested by it upto the relevant valuation date.
The answer returned by the High Court was, therefore, correct.
The appeal fails and is Appeal dismissed.
dismissed with costs.
| The petitioner who was the editor of a newspaper was detained by and order of the Central Government under r. 30(1)(b) of the Defence of India Rules, 1962, and the detention was continued by another order of the Central Government passed six months later, under r. 3OA(9).
The first order directed the petitioner 's detention with a view to preventing him from acting in any manner prejudicial to the defence of India, civil defence, public safety and the maintenance of public order, but the order continuing the detention set out only the defence of India and civil defence.
The petitioner challenged the second order of the following grounds: (i)the detention was punitive and not preventive, because his writings in is paper were the grounds of his original detention but that the paper had since become defunct; (ii) the two additional grounds given in the original order and omitted in the latter order must be held to have been non existent at the time of the original order, and therefore, the original order based on such non existent grounds was illegal, and could not be validly continued under r. 3OA(9); (iii) even if the Government was competent to continue the detention, the validity of the decision of the Government to continue the detention depended upon the existence of relevant circumstances which would necessitate the continuation and such circumstances were demonstrable; and (iv) the Minister who passed the second order should have filed a counter affidavit showing that he applied his mind to the material before he passed the order continuing the detention.
HELD : (i) Assuming that the petitioners writings in his paper were relied on for the purpose of passing the original order, they were not the only materials on which the original order and the order continuing the detention were based.
The authorities had taken into consideration the over all picture of all his anti Indian and pro Pakistani activities.
Therefore, the fact that his paper had since become defunct would make no difference because the jurisdiction to detain is not in respect of a mischief already committed but in anticipation.
that the person concerned may in future act prejudicially.
[436 H; 437 A B; 439 C D] (ii) The decision to continue the detention order was within the scope of r. 30A and was therefore sustainable.
[446 A B] Rule 30 A provides for a review of the order of detention, the procedure therefor,, the different reviewing authorities, the period within which such review has to be made and the obligation to decide whether the detention should be continued or cancelled after taking into account all the circumstances of the case.
Sub rule (9) provides that where a detention order is passed, by the Central or a State Government such order shall be reviewed at intervals of not more than six months by the Government which made the order and upon such review decide whether to continue or cancel the order.
The object of the review is to decide whether there is a necessity to continue the detention order or not in 434 the fight of the facts and circumstances including any development that has taken place in the meantime.
If the reviewing authority finds that such a development has taken place in the sense that the reasons which led to the passing of the original order no longer subsist or that some of them do not subsist that is not to say that those reasons did not exist at the time of passing the original order and that the satisfaction was on grounds which did not then exist.
There is no analogy between the provisions of review in the Defence of India Rules and in the and therefore, the decisions on that Act cannot be availed of by the petitioner.
[438 H; 439 B; 445 F H; 446 A B] (iii) The words used in r. 30(1) (b) and r. 30A are satisfaction in one case, and decision after taking into account all the circumstances of the case in the other.
Unlike r. 30(1)(b), the power to continue the detention after review is not dependent on the solution of the Government.
Under r. 30A the Government is enjoined upon to decide whether the detention should be continued or cancelled.
The substitution of decision instead of satisfaction is an indication that the criterion for continuing the detent on is the existence of those facts and circumstances which necessitate it.
The existence of such facts which is the determinant for the exercise of the power is demonstrable, and if they are shown not to exist the decision would not be a decision within the meaning of r. 30A and would be amenable on that ground to challenge.
The counter affidavit of the Deputy Secretary, on record, disclosed the anti national activities of the petitioner and that the decision under r. 30A that the petitioner had acted and was likely to act in a manner prejudicial to the defence of India and civil defence was arrived at by the Minister after an examination of all the materials before him.
So long as the decision was arrived at on such materials, since this Court does not sit in appeal against such a decision, it would not ordinarily examine the adequacy or the truth of those materials and would not interfere with the decision on the ground that if the Court had examined them it would have come to a different conclusion.
[440 C, 441 F H; 446 F G] Sadhu Singh vs Delhi Administration, ; referred to.
(iv) It was not a case of a mala fide exercise of power or a case of non application of mind by the authority concerned.
Since no allegation, , of malice or dishonesty have been made in the petition personally against the Minister., his omission to file a counter affidavit, by itself, could not be a ground to sustain the allegation of mala fides or non application of mind.
[446 D E]
|
ition No. 8991 of 1983.
(Under Article 32 of the Constitution of India.) Petitioner in person alongwith Mukul mudgal K. Parasran, Attorney General, K. G. Bhagat Addl.
Solicitor General, R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Shri Shiv Dayal Shrivastava, the petitioner before us in this application under Article 32 of the Constitution praying for a writ of mandamus to the Union of India, retired as Chief Justice of the Madhya Pradesh High Court with effect from February 28, 1978.
At the time of retirement he was drawing salary of Rs. 4,000 per month as provided under Constitution.
This Court in the case of Union of India vs Gurnam Singh(1) decided that under the ( 'Act ' for short), Judges were entitled to cash equivalent of leave salary in respect of the period of earned leave at their credit on the date of retirement as provided in Rule 20B of the All India Services (Leave) Rules, 1955 ( 'Leave Rules ' for short).
The Accountant General of Madhya Pradesh authorised the petitioner to draw cash equivalent of leave, salary amount as to Rs. 15,240 by his communication dated July 17, 1982.
The petitioner informed the Accountant General that he was drawing the amount as indicated in the communication without prejudice to his right to claim Rs. 24,000 to which sum under the law he was entitled.
On July 19, 1982, the petitioner was authorised to draw a further sum of Rs. 750 thus in all Rs. 15,990 only.
On February 2, 1983, the Union of India in the Ministry of Law, Justice & Company Affairs indicated to the several authorities including the Registrars of all the High Courts that while in view of the decision of this Court referred to above, the Central Government were advised that Judges of the High Courts were entitled to payment of cash equivalent of leave salary in respect of the period of earned leave at their credit, the expression 'earned leave ' does not occur in the Act.
On the analogy of the Leave Rules the cash equivalent of leave salary to be paid would be the cash equivalent of the unutilised leave due on 855 full allowances as defined in sections 3 and 9 (1) of the Act.
In making calculations of the cash equivalent of the leave salary the ceiling of five months mentioned in section 5 (3) of the Act would be applicable.
Relying on the aforesaid letter of the Central Government, the Accountant General of Madhya Pradesh on March 25, 1983, intimated the petitioner that he was entitled to payment of cash equivalent of unutilised earned leave subject to the ceiling of five months; leave and, therefore, he had been paid an excess sum of Rs. 2,220 which should be refunded.
That has led the petitioner to move this Court.
Rule nisi was issued to the Union of India and this Court directed separate notice to the Attorney General.
A return has been made to the rule by the Union of India.
No dispute has been raised to payability of the cash equivalent on the basis of Rule 20B of the Leave Rules Reliance has been placed on the provisions of the Act to justify the circular letter of February 18, 1983.
Learned Attorney General has been heard and he has furnished written submissions also.
The decision of this Court in Gurnam Singh 's case has been accepted by the Union of India and steps have been taken to implement the same.
In that case this Court held: ". . it must be regarded as a provision absorbed by rule 2 of the High Court Judges Rules, 1956, into the statutory structure defining the conditions of service of a Judge of a High Court.
We may observe that even as a right to receive pension, although accruing on retirement, is a condition of service, so also the right to the payment of the cash equivalent of leave salary for the period of unutilised leave accruing on the date of retirement must be considered as a condition of service".
Two questions require decision, viz., (1) whether in view of the provisions of section 5 (3) of the Act, the limit has to be confined to five months equal to 150 days and not 180 days as in Rule 20B; and (2) whether for calculating the equivalent of leave salary admissible to a Judge the provisions of section 9 (1) of the Act would apply ? We may now refer to rule 20B of the Leave Rules as also to the two provisions of the Act: 856 "20B Payment of cash equivalent of leave salary The Government shall suo motu sanction to a member of the service who retires from the service under sub rule (1) of rule 16 of the All India Services (Death cum Retirement Benefits) Rules, 1958, having attained the age of 58 years on or after the 30th September, 1977 the cash equivalent of leave salary in respect of the period of earned leave at his credit on the date of his retirement subject to a maximum of 180 days.
" Section 5 (3) of the Act reads: "5 (3).
Subject to the provisions of sub section (2) of section 5A, the maximum period of leave which may be granted at one time shall be, in the case of leave on full allowances, five months and in the case of leave with allowances of any kind, sixteen months.
" Section 9 (1) provides: "9 (1).
The monthly rate of leave allowances payable to a Judge while on leave on full allowances shall be for the first forty five days of such leave, a rate equal to the monthly rate of his salary, and thereafter two thousand two hundred and twenty rupees.
Provided that where leave on full allowances is granted to a Judge on medical certificate the monthly rate of leave allowances shall, for the first one hundred and twenty days, of such leave, be a rate equal to the monthly rate of his salary." Chapter II of the Act deals with leave.
Section 3 provides the kinds of leave admissible to a Judge.
Section 4 makes provision for a leave account to be maintained.
Section 5 deals with agree gate amount of leave which may be granted.
Section 5A make provision for commutation of leave on half allowances into leave on full allowances while sections 6, 7 and 8 deal with grant of leave of specific kinds.
These provisions in the Act deal with leave which has to be asked for and taken during the tenure of working as a Judge.
Leave necessarily implies authorised absence from duty or employment (see Webster 's Third New International Dictionary).
Rule 20B makes provision for payment of cash equivalent of leave 857 due under the appropriate provisions but subject to a maximum of 180 days.
We have already indicated that the ratio of Gurnam Singh 's case has not been disputed.
It would necessarily mean acceptance of the position that the Act did not make provision for payment of the retirement benefit contemplated under rule 20B; otherwise rule 20B could not have been applied.
The scheme in rule 20B is that the payment would be made suo motu and without any application for it.
Leave referred to under the Act is one which has to be asked for and is intended to meet a different situation.
For calculating the benefits under rule 20B, section 5 (3) of the Act is not relevant and in case in the leave account maintained under section 4 of Act leave is due, the benefit under rule 20B has to be worked out subject to the upper limit of 180 days, equal to six months.
The claim made by the petitioner that he was entitled to the benefit of six months is, therefore, justified subject, of course, to admissibility of leave to the extent of 180 days in the leave account.
No dispute was raised before us that as a fact petitioner had to his credit more than 180 days of leave.
Once we hold that the benefit under rule 20B is not controlled by Chapter II of the Act, the manner of calculation indicated in section 9 (1) of the Act would also apply.
The petitioner would thus become entitled to cash equivalent of six months ' salary which would work out at Rs. 24,000.
As he has been paid a sum of Rs. 15,990 he is entitled to Rs. 8,010.
A writ in the nature of mandamus be issued to the Union of India to pay him the said amount within one month from today.
Parties are left to bear their own costs before us.
We would like to add that it is manifest that in view of the enunciation of law by us in this judgment, the principles governing the cash equivalent of leave would apply not only to the petitioner but also to Judges who have already retired or who may retire hereafter, from the date from which this facility was made available to the members of the Central Services holding the rank of Secretary to the Government of India or its equivalent.
H.S.K. Petition allowed.
| In Union of India vs Gurnam Singh ; , this Court decided that under the Judges were entitled to cash equivalent of leave salary in respect of the period of earned leave at their credit on the date of retirement as provided under rule 20B of the All India Service (Leave) Rules, 1955.
The two question which arose for consideration in this petition under article 32 filed by a retired Chief Justice of Madhya Pradesh High Court were (1) whether in view of the provisions of section 5(3) of the Act, the limit has to be confined to five months equal to 150 days and not 180 days as in Rule 20B; and (2) whether for calculating the equivalent of leave salary admissible to a Judge the provisions of section 9 (1) of the Act would apply ? Allowing the petition and answering the questions in the negative. ^ HELD: The ratio of Gurnam Singh 's case has not been disputed.
It would necessarily mean acceptance of the position that the Act did not make provision for payment of the retirement benefit contemplated under rub 20B; otherwise rule 20B could not have been applied.
For calculating the benefits under rule 20B, section 5 (3) of the Act is not relevant and in case in the leave account maintained under section 4 of the Act leave is due, the benefit under rule 20B has to be worked out subject to the upper limit of 180 days, equal to six months [857 B C] Once it is held that the benefit under rule 20B is not controlled by Chapter II of the Act, the manner of calculation indicated in section 9 (1) of the Act would also not apply.
[857 E] The principles governing the cash equivalent of leave would apply not only to the petitioner but also to Judges who have already retired or who may retire hereafter, from the date from which this facility was made available to the members of the Central Services holding the rank of Secretary to the Government of India or its equivalent.
[857 E G] 854
|
ivil Appeal No. 232 of 1955.
Appeal under Article 132 (1) of the Constitution of India from the Judgment and Order dated November 24, 1954, of the former Travancore Cochin High Court in Original Petition No. 53 of 1954.
T.N. Subramania Iyer and R. Ganapathy Iyer, for the appellant.
K.S. Krishnaswamy Iyengar and Sardar Bahadur, for the respondent.
April 2.
The Judgment of the Court was delivered by BHAGWATI J.
This appeal with a certificate of fitness under article 132 (1) of the Constitution is directed against the order of the High Court of Travancore Cochin dismissing the Original Petition No. 53 of 1954 filed by the appellant under article 226 for quashing the order of the Sales Tax Officer, 2nd Circle, Quilon, assessing him to sales tax on a net assessable turnover of Rs. 7,54,144 8 4 for the year 1951 52 (1st April, 1951 to 31st March, 1952) and for issuing proper directions to the Sales Tax Authorities to assess the same according to law.
The appellant is a registered manufacturer of cocoanut oil and cake who has obtained a certificate of registration in Form VI as per sub r.
(i) of r. 20 of the Travancore Cochin General Sales Tax Rules, 1950.
The business of the appellant for the purposes of this appeal consisted in the ' purchase of copra, manufacture of cocoanut oil and cake and sale of the same to parties inside the State of Travancore Cochin and sale of the oil to parties outside the State.
In the year 1951 52, the appellant purchased copra of the value of Rs. 7,16,048 1 4 and after manufacturing oil therefrom in his oil mills he sold the oil partly in the State and partly outside the State and the cake 839 entirely within the State.
, The total value of the oil sold was Rs. 6,76,719 0 11 out of which the sales outside the State were of the value of Rs. 3,67,816 10 1 and the value of the cake sold in the State was Rs. 67,155 155.
The total gross turnover of the appellant was thus Rs. 14,59,923 1 8 and he claimed to deduct therefrom the whole of the purchase price of the copra under r. 7 (1) (k) read with r. 20.
The net turnover according to him was therefore only Rs. 7,43,875 0 4 and he claimed to deduct out of this a further sum of Rs. 3,67,816 10 1 being the sale price of oil in inter State transactions which could not be taxed under article 286 of the Constitution, thus showing a net assessable turnover of only Rs. 3,76 058 6 3.
The Sales Tax Officer, 2nd Circle, Quilon, however fixed the net assessable turnover of the appellant at Rs. 7,54,144 8 4.
He took the purchase value of the copra at Rs. 7,16,048 1 4 but added thereto Rs. 3,08,902 6 10 and Rs. 67,155 15 5 being the respective values of the oil and the cake sold inside the State, excluding the sale price of inter State sales of oil, namely, Rs. 3,67,816 10 1, from such computation.
Having thus excluded the sale price of inter State sales of oil, he deducted only the value of the copra corresponding to the oil sold inside the State namely, Rs. 3,35,216 0 0, as against the sum of Rs.7,16,048 1 4 deducted by the appellant.
He added a sum of Rs. 3,385 0 3 being the price of gum sold by the appellant and deducted a further sum of Rs. 6,130 15 6 being the sales tax collected by him.
He thus arrived at the net assessable turnover of Rs. 7,54,144 8 4 and assessed the appellant for sales tax on the same.
The appellant preferred an appeal to the Assistant Sales Tax Commissioner (S.T.A. No. 1480 of 1953 54) who dismissed the same by his order dated May 10, 1954.
A further petition to the Government for redress met with the same fate and the appellant thereupon filed the petition in the High Court of Travancore.
Cochin being O.P. No. 53 of 1954 with the result indicated above.
The decision of this appeal turns on the construction of the relevant provisions of the Travancore Cochin 340 General Sales Tax Act, 1125 (Act XI of 1125 M.E.) and the Travancore Cochin General Sales Tax Rules, 1950, made thereunder which may be conveniently set out here.
The preamble to the Act stated that it was enacted to provide for the levy of a general tax on the sale of goods in the United State of Travancore and Cochin.
Section 2 (j) defined a " sale " as under: " Sale " with all its grammatical variations and cognate expressions means every transfer of the property in goods by one person to another in the course of trade or business for cash or for deferred payment or other valuable consideration. . . .
Explanation (2) Notwithstanding anything to the contrary in the Sale of Goods Act for the time being in force, the sale or purchase of any goods shall be deemed for the purpose of the Act, to have taken place in the United State wherever the contract of sale or purchase might have been made.
" Section 2 (k) defined " turnover " as " the aggregate amount for which goods are either bought by or sold by a dealer, whether for cash or for deferred payment or other valuable consideration, provided that the proceeds of the sale by a person of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, shall be excluded from his turnover. " An explanation was added to this definition ' which is, however, not material for our purpose.
Section 3 was the charging section and it provided for levy of taxes on sales of goods in the terms following: " (1) Subject to the provisions of this Act;(a) every dealer shall pay for each year a tax on his total turnover for such year; and (b) the tax shall be calculated at the rate of three pies for every Indian rupee in such turnover. . . (3) A dealer whose total turnover in any year is less than ten thousand Indian rupees shall not be liable to pay any tax for that year under sub section_ (1) or sub section (2).
841 (4) For the purposes of this section and the other provisions of this Act turnover shall be determined in accordance with such rules as may be prescribed.
(5) The taxes under sub sections (1) and (2) shall be assessed, levied, and collected in such manner and in such instalments, if any, as may be prescribed.
Provided that: (i) in respect of the same transaction of sale, the buyer or the seller but not both, as determined by such rules as may be prescribed, shall be taxed; (ii) where a dealer has been taxed in respect of the purchase of any goods in accordance with the rules referred to in clause (i) of this proviso, he shall not be taxed again in respect of any sale of such goods effected by him." Section 4 enacted that the provisions of the charging section shall not apply to the sale of electrical energy and any goods other than arrack and foreign liquor on which duty is or may be levied under the Travancore or Cochin Abkari Act, or the Travancore or Cochin Opium Act.
Section 24 conferred upon the Government power to make rules to carry out the purposes of the Act.
The Act as originally enacted received the assent of the Rajpramukh on January 5, 1950.
After the advent of the Constitution, however, the Act was amended by the Travancore Cochin General Sales Tax (Amendment) Act, 1951, and section 26 was added thereto which ran as under: ' " Notwithstanding anything contained in this Act : (a) a tax on the sale or purchase of goods shall not be imposed under this Act (i) where such sale or purchase takes place outside the State of Travancore Cochin; or (ii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of, the territory of India ; (b) a tax on the sale or purchase of any goods shall not, after the 31st day of March, 1951, be imposed where such sale or purchase takes place in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide.
(2) The explanation to 842 clause (1) of article 286 of the Constitution of India shall apply for the interpretation of sub clause (i) of clause(a) of sub section (1).
" The Travancore Cochin General Sales Tax Rules, 1950, which were made by_the Government under the rule making power conferred upon it by sub sections 4 & 5 of section 3 read with section 24 of the Act laid down inter alia the provisions in regard to the determination of the total turnover of a dealer which was liable to be taxed.
Rule 4 provided for the determination of the gross turnover: " (1) Save as provided in sub rule (2) the gross turnover of a dealer for the purposes of these rules ,shall be the amount for which goods are sold by him.
(2) In the case of the undermentioned goods the gross turnover of a dealer for the purposes of these rules shall be the amount for which the goods are.
bought by him.
(a) Cocoanut, copra, ground nut and its kernel.
(b) Cashew, and its kernel.
Rule 7 provided that the tax or taxes under section 3 or 5 or the notification,or notifications under section 6 shall be levied on the net turnover of a dealer.
It further provided that in determining the net turnover, the amounts specified in cls.
(a) to (k) were, subject to the conditions specified therein, to be deducted from the gross turnover.
Clause (k) is relevant for our purpose.
It specified " all amounts which a registered manufacturer of cocoanut and/or groundnut oil and cake may be entitled to deduct from his gross turnover under Rule 20 subject to the conditions specified in the rule. " Rule 20 so far as it is material for our purpose provided: " 1.
Any dealer who manufactures cocoanut/ groundnut oil and cake from cocoanut and/or copra or groundnut and/or/kernel purchased by him may on application to the assessing authority having jurisdiction over the area in which he carries on his business, 843 be registered as a manufacturer of cocoanut/groundnut oil and cake and a certificate issued in Form VI. 2.
Every such manufacturer shall be entitled to a deduction under clause (k) of sub rule (i) of rule 7 equal to the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover.
" It is not necessary to refer to any other rule for the purposes of this appeal.
The main controversy between the parties centres on the method of calculation of the net turnover.
The appellant contends that in the calculation of such net turnover he is entitled to include the total value of the oil sold by him, viz., Rs. 6,76,719 0 11, irrespective of the fact whether these sales were effected inside the State or outside the State and deduct therefrom the total value of copra purchased by him from which the whole quantity of oil sold by him was manufactured, viz., Rs. 7,16,048 1 4.
The resultant figure, according to him, represents the net assessable turnover on which the Sales Tax Authorities would be entitled to assess him to sales tax if the position in law was as is stood before the amendment of the Act by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
He next contends that section 26 which was added to the Act by the Travancore Cochin General Sales Tax (Amendment) Act 1951, prohibits the levy amongst others of a tax on the sale or purchase of goods where such sale or purchase takes place in the course of inter State trade or commerce.
This is an overriding provision which, it is contended, entitled him to deduct the value of the oil sold outside the State, viz., Rs. 3,67,816 10 1, from the assessable turnover arrived at as above.
The result of this mode of calculation is that he claims to deduct from the gross turnover the whole of the purchase price of copra, viz., Rs. 7,16,048 1 4 and not the purchase price of copra which can be allocated to his sales of oil inside the State.
The Sales Tax Authorities on the other hand, contend that the appellant is not entitled to take into 844 computation at all his 'sales of oil outside the State and is also not entitled to deduct from his gross turnover the purchase price of copra allocated to the oil sold to persons outside the State.
They claim to lift the whole of these sales of oil outside the State inclusive of the purchase price of the copra which can be allocated to them out of the calculations of the net turnover because of the provisions of section 26 set out above, relying upon the non obstante provision contained therein, viz., "Notwithstanding anything contained in this Act, a tax on the sale or purchase of goods shall not be imposed under this Act where such sale or purchase takes place in the course of inter State trade or commerce.
" We have to decide which of these calculations of the net turnover is correct having regard to the relevant provisions of the Act and the rules made there under.
The definition of 'sale" contained in section 2 (j) is wide enough to include, the sales of oil manufactured by the appellant whether these sales are effected inside the State or outside the State.
The definition of " turnover " contained in section 2 (k) of the Act also makes no distinction between the sales inside the State and out,side the State.
The " turnover " is there defined as the aggregate amount for which goods are either bought or 3old by a dealer and, that definition comprises within its scope both these types of sales whether inside the State or outside the State.
This turnover of a dealer is under section 3, sub section
(4) to be determined in accordance with such rules as may be prescribed.
Rule 4 made by the Government under the rule making power prescribes that the gross turnover of a dealer for the purposes of the rules shall be the amount for which the goods are sold by him.
This rule also does not make any distinction between sales inside the State or outside the State.
After having thus provided for the inclusion of all sales within the gross turnover, r. 7 provides that the tax or taxes under section 3 (which is the charging section) shall be levied on the net turnover of a dealer.
Such net turnover is to be arrived at after deducting from the gross turnover various 845 amounts specified in cls.
(a) to (k) thereof and cl.
(k) provides that a registered manufacturer of cocoanut and/or groundnut oil and cake will be entitled to deduct from his gross turnover such amounts as are mentioned in r. 20 subject to the conditions specified therein.
The deduction under r. 20 is available to a dealer who manufactures cocoanut/groundnut oil and cake from cocoanut and " /or copra or groundnut and/or kernel purchased by him and he is entitled to deduct the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by him into oil and cake provided that the amount for which the oil is sold is included in his turnover.
Here also we find no distinction made between sales inside the State or outside the State.
On a prima facie reading of these provisions contained in the Act and the rules made thereunder it would appear that a manufacturer of cocoanut or groundnut oil and cake would be entitled to include in his gross turnover the total value of the oil sold by him Whether inside the State or outside the State and to deduct from such gross turnover the whole of the value of the copra purchased by him and converted into oil and cake irrespective of the fact whether such oil or cake was sold by him inside the State or outside the State.
The only thing which he had to do under r. 20, sub r.(2) was to include the amount for which the oil is sold in his turnover and he would then under r. 7(1)(k) be entitled to deduct from his gross turnover the whole of the price of the copra purchased and converted by him into oil and cake, again irrespective of the fact whether the same had been sold by him inside the State or outside the State.
This was certainly the position as it obtained prior to the addition of the section 26 to the Act by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
We have, therefore., to consider what is the impact of section 26 on the other provisions of the Act and the rules made thereunder.
The High Court decided against the appellant observing that the definitions given in section (2)(j) and (k) of the Act applied only in the absence of "anything 109 846 repugnant in the subject or context", and on a perusal of the relevant provisions of the Act and the rules made thereunder, it was of opinion that these definitions were clearly inapplicable for the following reasons: "There can be no doubt that what has been intended is a taxation of copra at the purchase point and the avoidance of sales tax in respect of the oil extracted by a registered manufacturer from such copra to the extent of the value of the copra used for the said manufacture in all those cases where but for the concession he would have been liable to pay both the purchase tax on copra and the sales tax on oil under the Travancore Cochin General Sales Tax Act, 1125.
In other words, the object is the avoidance of a double taxation by the State, one at the purchase point of copra and the other at the sale point of oil, and it is impossible to invoke the definition and say that the concession will be available to a registered manufacturer even in those cases where only one and not both the taxes can be realized from him under the provisions of the Act.
" The answer given by the learned counsel for the appellant to the above reasoning was that in fiscal statutes what you have got to look to is not the spirit of the statute but the letter of the law; and if you could not bring a particular tax within the letter of the law, the subject could not be made liable for the same.
Our attention was drawn in this connection to the observations of Lord Russell of Killowen in Inland Revenue Commissioners vs Duke of Westminster(1) : "I confess that I view with disfavour the doctrine that in taxation cases the subject is to be taxed if in accordance with a Court 's view of what it considers the substance of the transaction, the Court thinks that the case falls within the contemplation or spirit of the statute.
The subject is not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case." As Lord Cairns said many years ago in Partington vs The Attorney General (1): "As I understand the (1) , 24.
(2)(1869) , 122.
847 principle of all fiscal legislation it is this: if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be.
On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be.
" The passage was quoted with approval by the Privy Council in the Bank of Chettinad vs Income Tax Commissioner (1) and the Privy Council registered its protest against the suggestion that in revenue cases "the substance of the matter" may be regarded as distinguished from the strict legal position.
(See also F. L. Smidth & Co. vs F. Greenwood (2)).
It is no doubt true that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law.
If the Revenue satisfies the Court that the case falls strictly within the provisions of the law, the subject can be taxed.
If, on the other hand, the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
We must of necessity, therefore, have regard to the actual provisions of the Act and the rules made thereunder before we can come to the conclusion that the appellant was liable to assessment as contended by the Sales Tax Authorities.
It may be noted at the outset that the main bulk of the Sales Tax Acts enacted by the various Provincial Legislatures was enacted before the Constitution.
There were on the Statute Book various Sales Tax Acts enacted by the Provincial Legislatures, viz., Bihar Sales Tax Act, 1947, Bengal Finance (Sales Tax) Act, 1941, Madhya Pradesh Sales Tax Act, 1947, Madras Sales Tax Act, 1939, Mysore Sales Tax Act, 1948, Orissa Sales Tax Act, 1947, East Punjab General Sales Tax Act, 1948, and the Uttar Pradesh Sales Tax Act, (1) A.I.R. (1940) P.C. 183.
(2) VIII T.C. 193, 206, 348 1948, all of which levied sales tax on a more or less uniform basis bringing within their ken not only the sales which were actually effected within the territory but also sales where adopting the nexus theory eve1 one of the ingredients of sale was found to have taken place within the territory.
The Assam Sales Tax Act, 1947, and the Hyderabad General Sales Tax Act, 1950, also followed the same pattern.
When the Constitution came to be inaugurated on January 26, 1950, article 286(2) laid down restrictions on the State Legislatures to enact laws imposing or authorising the imposition of tax on the sale or purchase of goods in certain cases therein specified, so that after January 26, 1950, no State could impose a tax on the sale or purchase of goods falling within these categories.
The Sales Tax Acts enacted by the various Provincial Legislatures had, therefore, to be brought in line with this provision of the Constitution and various expedients were devised by the State Legislatures in order to effectuate this object.
This object was sought to be achieved in the main bulk of the Sales Tax Acts by adding towards the end of the Acts sections like section 26 of the Travancore Cochin General Sales Tax Act, 1125, incorporating therein the terms of article 286 of the Constitution.
The non obstante provision was thus enacted in the main bulk of the Sales Tax Acts which laid down: "Notwithstanding anything contained in this Act the tax on the sales or purchase of goods shall not be imposed under this Act where. . . (and the provisions of article 286 were in terms incorporated therein).
" A different expedient was adopted in the Assam Sales Tax Act, 1947 and the Hyderabad General Sales Tax Act, 1950.
The Assam Sales Tax Act, 1947, had incorporated therein an addition to the charging section (section 3 of the Act) and section 3 (1 A) which was inserted by section 3 of the Assam Sales Tax (Amendment) Act, 1947 (Assam Act IV of 1951) was to the following effect: "Nothing in sub section (1) shall,except in cases covered by the first proviso to sub section (12) of section 2 of this Act be deemed to render any dealer 849 liable to tax on the sale of goods where such sale takes place: (1) outside the State of Assam; (2) in the course of the import of the goods into, or export of the goods out of, the territory of India; or (3) in the course of inter State trade or commerce except in so far as Parliament may by law otherwise provide.
The Hyderabad General Sales Tax Act, 1950 had a similar provision incorporated in its definition of sale given in section 2 (k) of the Act.
The Explanation (2) which was substituted for the original Explanation (2) by section 2 of the Hyderabad General Sales Tax (Amendment) Act, 1950 (Hyderabad Act XXXII of 1950) read as under: Explanation (2) " Notwithstanding anything to the contrary in any other law for the time being in force, a transfer of goods in respect of which no tax can be imposed by reason of the provision contained in Article 286 of the Constitution, shall not be deemed to be "sale" within the meaning of this clause.
" A further expedient which was adopted in this connection may be noted in r. 5 of the Bombay Sales Tax Rules, 1952, enacted under the Bombay Sales Tax Act, 1952 (Bombay Act XXIV of 1952), which authorised the deduction of certain sales coming within article 286 of the Constitution while calculating the taxable turnover of a dealer.
We are not called upon to express any opinion as to whether the incorporation of the provisions of article 286 of the Constitution in the charging section as it was done in the Assam Sales Tax Act, 1947, or in the definition of "sale" as it was done in the Hyderabad General Sales Tax Act, 1950, or even in the rules in regard to the calculation of taxable turnover as it was done in the Bombay Sales Tax Rules, 1952, had the effect of taking the sales falling within the categories specified in article 286 out of the purview of the respective Sales Tax Acts, so that they would not be included at all within the calculation of the net turnover on which only the sales tax could be levied.
What was done in the instant case before us as in the bulk of the Sales 850 Tax Acts above noted was the incorporation of those provisions of article 286 of the Constitution therein by adding a non obstante provision at the end of the respective Sales Tax Acts in the manner above indicated.
The definition of "sale" was not amended nor was the charging section.
The rules as to the calculation of the net turnover also remained the same, without any deduction in regard to sales coming within article 286 of the Constitution being incorporated therein, with the result that the Sales Tax Authorities founded themselves upon the non obstante provision incorporated in the Act by the addition of section 26 therein by the Travancore Cochin General Sales Tax (Amendment) Act, 1951.
What, then, is the effect of this non obstante provision ? This Court in Aswani Kumar Ghosh vs Arabinda Bose (1) made the following observations in connection with the non obstante clause: "It should first be ascertained what the enacting part of the section provides on a fair construction of the words used according to their natural and ordinary meaning, and the non obstante clause is to be understood as operating to set aside as no longer valid anything contained in relevant existing laws which is inconsistent with the new enactment.
" The same ratio applies to the construction of the non obstante provision contained in section 26 of the Act with reference to all the other provisions of the Act that preceded the same.
In our opinion, section 26 of the Act, in cases falling within the categories specified under article 286 of the Constitution has the effect of setting at nought and of obliterating in regard thereto the provisions contained in the Act relating to the imposition of tax on the sale or purchase of such goods and in particular the provisions contained in the charging section and the provisions contained in r. 20 (2) and other provisions which are incidental to the process of levying such tax.
So far as sales falling within the categories specified in article 286 of the Constitution and the corresponding section 26 of the Act are concerned, they are, as it were, (1) ; , 21, 22.
851 taken out of the purview of the Act and no effect is to be given to those provisions which would otherwise have been applicable if section 26 had not been added to the Act.
If these provisions of the Act and the rules made thereunder do not apply to.
the sales falling within those categories, the value thereof cannot be included in the turnover of the dealer and no question would &rise of the applicability of r. 7 (1) (k) and r. 20 (2) at all to these cases.
The amount for which the oil is sold in inter State trade or commerce would not be lawfully included in the turnover of the dealer and if the amount for which such oil is sold cannot thus be included in his turnover no occasion would arise for the deduction under r. 7 (1) (k) of the value of the cocoanut and/or copra or groundnut and/or kernel purchased and converted by the dealer into such oil and cake.
A distinction was sought to be made between the inclusion of the value of such oil in the turnover of the dealer for the purpose of assessment and the levy of tax thereupon.
It was urged that the inclusion of such oil in the turnover for the purpose of assessment was quite distinct from the liability for tax which was the only thing prohibited by section 26 of the Act and therefore the value of such oil could be lawfully included in the turnover involving as a necessary consequence the deduction of the value of the copra purchased by the dealer and converted by him into such oil from such turnover, the resultant turnover being the net turnover for the purposes of assessment, the value of the oil sold in the course of inter State trade or commerce being further deducted therefrom by reason of the operation of section 26 of the Act, thus making in effect a distinction between assessable turnover and the taxable turnover.
Reliance was placed in support of this position on the observations of this Court in Messrs. Chatturam Horilram Ltd. vs Commissioner of Income Tax, Bihar and Orissa(1): " As has been pointed out by the Federal Court in Chatturam vs C.I.T., Bihar(,) (quoting from the (1) ; , 297.
(2) , 126.
852 judgment of Lord Dunedin in Whitney vs Commissioners of Inland Revenue (1) 'there are three stages in the imposition of a tax.
There is the declaration of liability, that is the part of the statute which determines what person in respect of what property are liable.
Next, there is the assessment.
Liability does not depend on assessment.
That, ex hypothesi, has already been fixed.
But assessment particularises the exact sum which a person liable has to pay.
Lastly, come the methods of recovery if the person taxed does not voluntarily pay" The appellant, however, forgets that the three stages in the imposition of a tax which are laid down here predicate, in the first instance, a declaration of liability as the starting point.
If there is a liability to tax, imposed under the terms of the taxing statute, then follow the provisions in regard to the assessment of such liability.
If there is no liability to tax there cannot be any assessment either.
Sales or purchases in respect of which there is no liability to tax imposed by the statute cannot at all be included in the calculation of turnover for the purpose of assessment and the exact sum which the dealer is liable to pay must be ascertained without any reference whatever to the same '.
There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non liability to tax or non imposition of tax on the other.
In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed.
In the latter case, the sales or purchases are exempted from taxation altogether.
The Legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition (1) 853 of tax.
If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the Act at all.
The very fact of their non liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed.
If this distinction is borne in mind, it is clear that section 26 of the Act enacts a provision with regard to nonliability of these transactions to tax and these transactions were therefore taken out of the purview of the Act.
We are therefore of opinion that the non obstante provision contained in section 26 of the Act has the effect of taking these transactions out of the purview of the Act with the result that the dealer is not required nor is he entitled to include them in the calculations of his turnover liable to tax thereunder.
This position is not at all affected by the provision with regard to registration and submissions of returns of the sales tax by the dealers under the Act.
The legislature, in spite of its disability in the matter of the imposition of sales tax by virtue of the provisions of article 286 of the Constitution, may for the purposes of the registration of a dealer and submission of the returns of sales tax include these transactions in the dealer 's turnover.
Such inclusion, however, for the purposes aforesaid would not affect the non liability of these transactions to levy or imposition of sales tax by virtue of the provisions of article 286 of the Constitution and the corresponding provision enacted in the Act, as above.
We are, therefore, of opinion that the conclusion reached by We are therefore therefore, of opinion that the conclusion reached by the High Court was correct; the calculations of the net turnover made by the Sales Tax Authorities were also correct; and this appeal must stand dismissed with costs.
Appeal dismissed.
| By these two petitions, the petitioner challenged the constitutional validity of the Bombay Land Requisition Act, 1948, as amended by the two amending Acts of 1950, and the enforceability of an order of requisition made by the Governor of Bombay under section 6 (4) (a) of the Act.
The petitioner as the widow of the tenant claimed to be in possession, while the case made on behalf of the Government was that the tenant had before his death vacated the premises and handed over possession to a lodger.
A copy of the order of requisition was affixed to the premises and the petitioner moved the High Court for a writ of mandamus, but the petition was dismissed.
The Act was passed by the State Legislature on April 11, 1948, and by the first amending Act its life was extended for two years and by the second the words " the purpose of the State or any other public purpose" were substituted for the words ,,any purpose" occurring in section 5 of the Act with retrospective effect from the date of the Constitution.
The Act came up for consideration in a previous decision of this Court and arguments were confined to grounds other than those specifically covered by that decision.
It was contended on behalf of the petitioner that the Act was in conflict with article 3I (2) and became invalid at the commencement of the Constitution and the amending Acts, for which the assent of the President had admittedly not been obtained, were ineffective under article 31 (3) of the Constitution.
It was further contended that sections 5 and 6 of the Act which made the relevant findings of the Government conclusive had the effect of impairing the powers of the Court, that it was nevertheless open to the Court to judge whether the facts found constituted vacancy in law and, lastly that the order in question was ineffective as the tenant was dead on the date it was made.
Held, that the contentions raised on behalf of the petitioner must be negatived.
93 722 The constitutional validity of the Act was no longer open to question under articles 19 (1) (f) and 31 (2) of the Constitution in view of the decision of this Court in State of Bombay vs Bhanji Munji (1955) 1 S.C.R. 777.
The Act, which did not obviously come within the mischief of cl.
(6) of article 31, fell within the saving clause, cl. 5 (a), of the Article and was an existing law within the meaning of the Constitution and, therefore, valid at the commencement of the Constitution, although it did not contain the expression " for a public purpose " as required by cl.
(2) of the Article.
Clause (3) of the Article, which in terms applied to laws made after the commencement of the Constitution, had no application to the amending Acts which were in no way concerned with the main substantive provisions of the Act already passed, and the want of the President 's assent in no way affected their validity.
As the Act was valid at the commencement of the Constitution and continued to be so thereafter, not being in any way inconsistent with the provisions of Part III of the Constitution so as to attract the operation of article 13, the Amending Acts were equally valid in law.
Held further, that although in a proper case the High Court or this Court in the exercise of their special jurisdictions under the Constitution had power to determine how far the provisions of the Act had or had not been complied with, the finding of the State Government under section 5 Of the Act that the tenant had not actually resided in the premises for a continuous period of six months immediately preceding the date of the order,and that under s.6, the premises had become vacant at about the time indicated in the order, are conclusive and not collateral so as to be liable to be re opened and could not, therefore, be questioned either in this Court under article 32 or in the High Court under article 226 of the Constitution.
Rai Brij Raj Krishna vs section K. Shaw, ; applied.
Hubli Electricity Co. Ltd. vs Province of Bombay, (1948) L.R. 76 I.A. 57, held inapplicable.
Mohsinali Mohomed Ali vs The State of Bombay, (1951) 53 Bom.
L.R. 94: A.I.R. 1951 Bom.
303, referred to.
The words " or otherwise " occurring in explanation (a) to section 6 of the Act could not be construed as ejusdem generis with the words immediately preceding them and must be held to cover all possible cases of vacancy due to any reason whatsoever.
Skinner & Co. vs Shaw & Co., (I893) , referred to.
An order of requisition passed under section 6 (4) (a) of the Act was not of the nature of an order passed in a judicial proceeding and the death of one of the parties could not make it wholly ineffective, the only consequence being that his name as one of 723 the parties to be served under section 13 Of the Act must be removed from the order.
|
Appeal No. 1560 of 1966.
Appeal by special leave from the judgment and decree dated September 11, 1961 of the Mysore High Court in Second Appeal No. (B) 43 o,f 1956.
R.B. Datar and S.N. Prasad, for the appellants.
R. Gopalakrishnan and D.P. Mohanty, for the respondent.
343 The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, by defendants 1 to 4, is directed against the judgment and decree, dated September 11, 1961 of the Mysore High Court, in S.A. (B) No. 43 of 1956, confirming the decrees of the two Subordinate Courts granting a decree for possession in favour of the plaintiff respondent.
The respondent instituted suit No. 1 of 1945, before the Second Class Sub Judge at Chinchali, for recovery of possession of the suit lands.
According to the plaintiff, the lands are Patilkiwatan Inam lands and he has been registered as 'Nawa Wala ' by order No. 68 dated March 30, 1927 of the Revenue Authorities of the then Kolhapur State.
The suit properties had gone in partition to one Maya Gouda, a member of the Patil family.
Maya Gouda died about 35 or 40 years ago.
and his widow Jakkawwa was in possession of the lands till the date of her death on August 16, 1943.
The plaintiff 's further case was that though Maya Gouda and Jakkawwa had a daughter Bayabai, the 7th defendant in the suit, the latter could not inherit the inam properties under the law obtaining in Kolhapur State.
Therefore the line of Maya Gouda has become extinct and the plaintiff, as Nawa Wala is entitled to.
get possession of the properties as per the Wat Hukum No. 26 of Fasli 1323.
Defendants 1 to 4, the appellants herein, contested the claim of the plaintiff on various grounds.
They pleaded that the plaintiff was not the senior most member of the senior branch of the family to which Maya Gouda belonged and that they were the nearest reversioners, under Hindu Law, to the properties of Maya Gouda.
They further pleaded that there was no extinction of the line of Maya Gouda as he had left a daughter, the 7th defendant, behind him.
They also.
claimed title by adverse possession.
The trial Court, by its Judgment and decree dated February 10, 1949 negatived the plea of adverse possession raised by the appellants.
It further held that the expression 'Nashtamsha ' in ' the relevant Wat Hukum means that there is no direct male descendant to inherit the properties of the deceased.
For this proposition, the trial Court relied upon a judgment of the Kolhapur High Court in S.A. No. 210 of 1947.
On this interpretation it held that the line of Maya Gouda had become extinct with regard to the Inam lands according to law, as the 7th defendant, the daughter, could not inherit the properties.
The trial Court further held that the plaintiff, defendants 1 to 4 and the deceased Maya Gouda, were members of one and the same family and that this fact had been admitted by both the parties.
In the end the trial Court decreed the claim of the plaintiff to get possession of 344 the suit properties and passed a decree to that effect against the defendants.
Defendants 1 to 4 filed an appeal before the District Judge, Kolhapur, which appeal was later transferred to.
the District Judge, Belgaum, in view of the merger of Kolhapur State with Bombay.
The said appeal, No. 403 of 1949, was disposed of by the Second Extra Assistant Judge, Belgaum, by his decree and judgment dated March 24, 1952.
The Assistant Judge was of the view that the suit will have to be remanded for fresh consideration and for this purpose certain issues were framed 'and parties given opportunity to adduce further evidence.
The plaintiff challenged this order of remand, passed by the Assistant Judge, before the High Court of Bombay.
The Bombay High Court, by its judgment dated July 21, 1953 set aside the remand order passed by the Assistant Judge of Belgaum 'and directed the District Court to dispose of the appeal according to law.
The Assistant Judge of Belgaum, by his judgment dated January 29.
1954 disposed of C.A. 403 of l 949, confirming the decree and judgment of the trial Court.
The .learned Judge held that the plaintiff had been registered 'as the Nawa Wala of the branch of the family consisting of himself, the defendants a.nd the deceased Maya Gouda and Jakkawwa with respect to the 8 annas ' share of the Maratha Patils.
He further held that the Civil Courts had no jurisdiction to go behind the order of the Revenue Authorities recognizing the plaintiff as Nawa Wala, in view of section 3 of the Kolhapur Revenue Jurisdiction Act.
On the question,n whether Maya Gouda 's branch has become Nashtamsha, as mentioned in the Wat Hukum, the learned Judge held that the Kolhapur Courts had consistently interpreted the said expression to mean that a branch became Nashtamsha with respect to Watan Properties when the deceased person left behind him no sons.
As authority for this proposition.
the Court relied upon the decision of the Kolhapur Supreme Court in Dada Babaji Patil vs Kalgonda Babgonda Patil(1).
The Court also referred to the later decision in S.A. 210 of 1947.
relied on by the trial Court.
On this interpretation, the Court held that in spite of Maya Gouda having left behind him his daughter, the 7th defendant, his line should be considered as Nashtamsha, so far as the Watan properties were concerned and in consequence, the plaintiff, as Nawa Wala was entitled to get possession of the properties.
The finding that the defendants had not completed title by adverse possession was accepted by the Court.
In this view, the appeal filed by defendants 1 to 4 was dismissed.
Defendants 1 to 4 filed a second appeal before the Bombay High Court, which appeal, on reorganisation of the States, was (1) (1945) Kol.
L.R. 541.
345 transferred to the Mysore High Court and registered as Second Appeal No. 43 (B) of 1956.
The Mysore High Court, by its judgment dated September 11, 1961, has confirmed the decisions of the Subordinate Courts accepting the claim of the plaintiff and dismissed the second appeal.
Mr. R.B. Datar, learned counsel for the appellants, urged two contentions: (1 ) The view of the High Court that the right to Watan properties goes along with the service to be performed by the person registered as Nawa Wala, is erroneous and is contrary to the Wat Hukum No. 26 of Fasli 1323.
(2) The view of the High Court and the two S.subordinate Courts that there is Nashtamsha in the line of Maya Gouda, is errcneous, as apart from there being the daughter, the 7th defendant, the appellants are also heirs, being the nearest reversioners and, as such, entitled to succeed.
We may deal with both the contentions together.
It is no doubt seen that the High Court has proceeded on the basis that the right to.
Watan properties goes along with the duty to perform the services and therefore prima facie, the person who is required to do the services, must be entitled to the property.
But a reference to the Wat Hukum No. 26 indicates that all the properties need not necessarily be with the person doing the service, and that the service is to be taken from persons in the eldest branch regarding Patils and that it is not to.
be taken by other sharers.
It further provides that as service is not to be taken from bhauband, local fund and judi of their share should be recovered by the village Officers along with Government land revenues to be credited to the Government for payment to the person registered as Nawa Wain.
In this case, though the plaintiff as the registered Nawa Wain was doing service, it is seen that the suit properties were in possession of Jakkawwa, the widow of Maya Gouda who died about 30 or 40 years ago.
That the property must go with the service, is only one of the reasons given by the High Court for holding against the appellants.
But this reasoning does not vitiate the conclusions arrived at by the learned Judges that the plaintiff was entitled to get possession of the properties as Nawa Wala under the Wat Hukum, as Maya Gouda 's branch had become Nashtamsha.
Mr. Datar further contended that the expression 'Nashtam sha ' occurring in the Wat Hukum means a total absence of heirs in the sense that there is nobody to succeed, under Hindu Law, to the estate of Maya Gouda.
As Maya Gouda had left a daughter.
the 7th defendant and as, in any event the appellants are the nearest reversioners entitled to succeed to the estate of Maya Gouda under Hindu Law, it cannot be stated that the line of Maya Gouda has become extinct so as to enable the plaintiff to 346 recover possession of the properties.
It is common ground that the Wat Hukum provides for the Nawa Wala taking possession of the properties if the family of a particular holder of Watan lands becomes Nashtamsha.
The expression 'Nashtamsha ' has come up for consideration 'before the Courts in Kolhapur.
The Supreme Court o,f Kolhapur, in Dada Patil 's Case (1) had to consider the question whether the expression 'Nashtamsha ' means complete and total absence.
of direct lineal heirs.
In that decision, after the death of the holder, his widow inherited the lands and remained in possession till her death.
On the death of the widow, the reversionary heirs of the deceased holder under Hindu Law entered into possession of the properties.
The plaintiff in that case, who had been registered as the Nawa Wala by the Revenue Authorities, sued to obtain possession of the lands and the claim of the plaintiff was allowed by the Court, holding that the existence of the reversionary heirs did not take the case out of 'Nashtamsha ' as provided in the Wat Hukum.
The above decision was also followed in the same Court, by Lokur, J., in S.A. 210 of 1947 who held that if there is no direct male descendant then that case should be considered as 'Nashtamsha '.
We have already referred to the fact that these two decisions have been followed by the trial Court as well as by the Assistant Judge on appeal.
From these decisions it follows that in the Kolhapur State, the succession to Watan properties was not governed by the ordinary Hindu Law, but by Wat Hukum No. 26 and on the interpretation placed by the Courts in that State, there will be 'Nashtamsha ' when a person dies without leaving behind him any sons.
That is the position in the case before us.
As pointed out earlier, Maya Gouda died leaving his daughter, the 7th defendant, but no sons.
The 7th defendant possibly could not inherit the Watan properties, according to the decision of the Courts in Kolhapur State.
The plaintiff 's specific claim was that under the law obtaining in Kolhapur State, the 7th defendant was only the daughter of Maya Gouda and could not inherit the properties and that he, as the Nawa Wala was entitled to recover possession of the properties.
On the other hand, defendants 1 to 4 specifically pleaded that the 7th defendant, the daughter of Maya Gouda, was entitled to inherit the properties.
All the Courts have accepted the plaintiff 's plea, and decreed his claim.
Mr. Datar, learned counseL, referred us to the decision of the Division Bench of the Bombay High Court in Shivgonda @ Appasaheb Virgonda Patil vs Champabai Bharatar Sidgonda @ Racsaheb Shidgonda Patil (2).
That judgment was delivered on (1) (1945) Kol.
L.R. 541.
(2) Appeal N9.
297 of 1957 from original decree, decided on 7 12 1962.
347 December 7, 1962 and a certified copy of the same has been placed before us.
The learned Judges have observed: "Whatever may have been the interpretation of the Vathukums in Kolhapur State, so far as this Court is concerned it is well settled that 'Nashtamsha ' does not mean a man dying without male issue 'but it means a man dying without leaving any heir.
Accordingly, therefore, unlike the authorities in Kolhapur State, this Court held that as long as there was a single heir, whether male or female, to the deceased, it does not result in 'Nashtamsha ' of the line." According to.
this decision, Maya Gouda 's branch cannot be considered to be 'Nashtamsha ' as he has left his daughter, the 7th defendant, as his heir, and she will be entitled to inherit the Watan properties.
We may also refer to a Division Bench decision of the Mysore High Court in Sambaii Ramachandra Kulkarni vs Gopal Govind Dattaward(1) wherein the Mysore High Court has not agreed with the view of the Bombay High Court, expressed in an earlier decision, similar to the view taken by the Bombay High Court in Shivgonda 's case(2), that the expression 'Nashtamsha ' has to be interpreted as meaning that a holder has left no heirs at all who can inherit his estate under the Hindu Law.
It is not necessary for us in this case to.
resolve the conflicting views noted above.
Whatever may be the interpretation, the appellants will not be entitled to inherit the properties of Maya Gouda.
Because, if the view of the Kolhapur Courts is accepted, the plaintiff, as the Nawa Wala, is entitled to get possession; and if the Bombay view is accepted, it is the 7th defendant, who will be entitled to inherit the watan properties of her father Maya Gouda.
In either case, the appellants cannot inherit the watan properties of Maya Gouda and thus they are out of the picture.
The 7th defendant, against whom also a decree for possession has been passed, did not contest the claim of the plaintiff.
Nor did she file any appeal against the decree of the trial Court.
It has to be further noted that even the appellants have not made her a party, either be,fore the first Appellate Court, or in the High Court, or even before this Court.
In the result, the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
(1) (2) Appeal No. 297 of 1957 from original decree, decided an 7 12 1962.
| The appellants gave kanta blows resulting in a number of injuries to a person.
Some of injuries were incised wounds, some contusions, and some abrasions.
All the incised4 injuries except one showed that the bones had been cut.
On the question whether the conviction of the appellants under section 326, I.P.C. for grievous hurt was justified or not; HELD: The conviction under section 326 was fully justified.
In order to.
justify conviction under section 326, the injuries must satisfy the requirements of cl. 7 Dr cl. 8 of section 320 of the Indian Penal Code, otherwise they will be treated as simple injuries.
Clauses 7 'and 8 of section 320 I.P.C., provide that an injury could only be designated as grievous if it is (1) a fracture or dislocation of a bone or tooth, or (2) any hurt which endangers life or which causes the sufferer to be during the space of twenty days in severe bodily pain, or unable to follow his ordinary pursuits.
Fracture has not been defined in the Penal Code.
It is not necessary that a bone should be cut through and through or that the crack must extend from the outer to the inner surface or that there should be displacement of any fragment of the bone.
If there is a break by cutting or splintering of the bone or there is a rupture or fissure in it, would amount to a fracture within the.
meaning of cl. 7 of section 320.
What has to be seen is whether the cuts in the bones noticed in the injury report are only superficial or do they effect a break in them.
[242 H; 243 D F] In the present case, some of the incised injuries show that they were bone deep and were described as cutting the underlying bone, which would show that they were fractures.
Apart from this the doctor said that the injuries were grievous.
These injuries were inflicted by Kantas which are dangerous weapons.
Observations contra in Po Yi Maung vs Ma E Tin, A.I.R. (1937) Rang.
253 and Mutukdhar Singh vs Emperor, A.I.R. (1942) Pat. 376, disapproved.
|
ing been subsequently filled in by introducing section 132A of the Act with effect from October, 1975, it will be open to the income tax authorities to approach the appropriate authorities to realise any amount of money or to recover any books of account or documents in accordance with the law.
[307D E] & CIVIL APPELLATE JURISDICTION: Civil Appeal No.1666 (NT) of 1974.
297 From the judgment and order dated 26th November, 1973 of the A Punjab & Haryana High Court in Civil Writ No. 3355 of 1972.
S.C. Manchanda, M.B. Rai and Ms. A. Subhashini for the Appellants.
Harbans Singh for the Respondents.
The Judgment of the Court was delivered by SABYASACHI MIJKHARJI, J.
This appeal is by special leave from a judgment and order of Punjab and Haryana High Court in an application under article 226 of the Constitution.
The judgment in question is reported in By a petition under articles 226 and 227 of the Constitution the order of the Income Tax Department dated 10th May, 1972, passed under section 132 of the Income tax Act, 1961 (hereinafter called the 'Act ') and Rule 112(II) of the Income tax Rules, 1962 (hereinafter called the 'Rules ') was challenged.
The division bench by the impugned judgment allowed the petition, quashed the search and seizure warrants and directed the Income Tax Department to return the moneys to the Customs authorities and gave certain consequential directions.
In order to appreciate the points involved, it is necessary to refer to certain facts as found by the High Court.
On 23rd August, 1970 the petitioner before the High Court, who is the respondent here, was travelling by car, alleged to be belonging to his brother from Ambala to Batala.
He was intercepted near the Beas river by the Customs officer and was forcibly taken along with the driver, Gurnam Singh, to the Customs House at Amritsar.
The said petitioner in that application was searched along with his driver and the Customs authorities took into possesion Rs.93,500 in Indian currency, 10 gold sovereigns and the car.
On the 24th August, 1970, the petitioner was produced before a Duty Magistrate at Amritsar and was granted bail.
In the meantime, the Customs department took proceedings under section 110(2) of the and extended the period of issuing of the show cause notice under section 124 of the .
These proceedings were challenged in the High Court by Writ Petition and the order of the Customs authority under section 110(2) was quashed by an order of the learned single judge of the High Court on 24th April, 1972.
The appeal against that decision was dismissed by the division bench along with this petition by the High Court.
After the said judgment of the learned single judge, the respondent had approached the Customs authorities for the return of H 298 the money and the car.
The gold sovereigns were not demanded be cause according to the said petitioner, these did not belong to him.
He had been directed to come on the following day to get back the currency notes and the car.
In the meantime on 12th May, 1972 the Income tax officer, had served the warrant of authorisation dated 10th May, 1972 issued under section 132 of the Act and rule 112(II) of the Rules on the respondent as well as on the Customs department, with the result that only the cash was taken possession of by the income tax authorities.
Thereafter, the respondent filed the petition under articles 226 and 227 of the Constitution before the High Court in respect of which the judgment impugned here was rendered.
It was submitted that the authorisation warrant was illegal, be cause the money was not in his possession but was in the possession of the Customs authorities.
It was secondly urged that the action taken by the Income tax authorities under section 132 of the Act militated the provisions of section 110(2) of the .
The High Court felt that so far as the first contention was concerned, it was concluded by the decision of the said High Court in The Commissioner of Income tax vs Ramesh Chander & Ors., The High Court relied on the following observations at pages 478 479 of the report: "I have come to the conclusion that the search and seizure warrants issued under sub section (1) of section 132 of the Income tax Act were illegal, firstly, because the search and seizure warrants were issued in the name of Ramesh Chander and he was in fact not in possession of either the currency notes or account books, and secondly, the income tax authorities could not seize the currency notes and account books from the police officer who is duty bound to proceed with the case property in accordance with the pro visions of the Code of Criminal Procedure.
" The High Court held that where the amount was seized by the Customs authorities and the seizure was held illegal by the Court, Customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the .
The Income tax authorities could not seize such an amount from the Customs authorities under section 132 of the Act.
Moreover, the authorisation was illegal if issued in the name of the person who did not have possession of the article, in respect of which it was issued.
The High Court further held that in the facts and circum 299 stances of the case the order under section 132 of the Act was not Justified.
Therefore, the High Court held that the search and seizure warrants were liable to be quashed and the money returned to the customs department.
The judgment of the High Court is reported in The validity of the judgment is impugned in this appeal.
It is necessary in order to appreciate the contentions urged in this case to refer to the relevant provisions of section 132 of the Act.
Sub section ( I) of section 132 provides as follows: "Search and Seizure (1) Where the Director of Inspection or the Commissioner [or any such Deputy Director of Inspection or Inspecting Assistant Commissioner as may be empowered in this behalf by the Board,] in consequence of information in his possession, has reason to believe that (a) any person to whom a summons under sub section (1) of section 37 of the Indian Income tax Act, 1922 (XI of 1922), or under sub section (1) of section 131 of this Act, or a notice under sub section (4) of section 22 of the Indian Income Tax Act, 1922, or under sub section (1) of section 112 of this Act was issued to produce or cause to be produced any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to any proceeding under the Indian Income tax Act, 1922 (XI of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property [which has not been, or would not be, disclosed] for the purposes of the Indian Income tax Act, 1922 (XI of 1922), or this Act H 300 (hereinafter in this section referred to as the undisclosed income or property), [then, (A) the Director of Inspection or the Commissioner, as the case may be, may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income tax officer, or (B) such Deputy Director of Inspection or Inspecting Assistant Commissioner, as the case may be, may authorise any Assistant Director of Inspection or Income tax officer, (the officer so authorised in all cases being hereinafter referred to as the authorised officer to ) (i) enter and search any [building, place, vessel, vehicle or aircraft] where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (iia)search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing;] (iii)seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place mark of identification on any books of ac count or other documents or make or cause to be made extracts or copies therefrom; 301 (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing; " The only other sub section to which reference need be made is sub section (3) which is as follows: B "The authorised officer may, where it is not practicable to seize any such books of account, other document, money bullion, jewellery or other valuable article or thing, serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub section.
" It is not necessary to refer to the other provisions for the present purpose.
But the procedure indicated that if necessary, force may be used for search seizure.
Rule 112 of the said Rules provides the manner in which such search and seizure should be conducted.
On a construction of the section; and the context, in which the words "search", "possession" and "seizure" have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority.
It is important to note that the expression "possession" has not been defined in the Act.
It may be noted that sub section (3) of section 132 of the Act uses the expression "who is in immediate possession or control thereof".
"Possession" is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense.
Reference may be made to Halsbury 's Laws of England, Vol. 35, 4th Edn.
articles 1111 11267 pages 617 627.
Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys.
It appears to us that when the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it would be improper to contend that possession as used in section 132 of the Act was still with the respondent.
The use of the expression "immediate possession" in sub section 302 (3) of section 132 does not detract from the meaning of possession in the popular sense.
This construction is not unmindful of the fact that in some of the sub sections of section 132 the expressions "retention" and "custody" have been used, but reading these expressions in the context these have been used, it cannot be said that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income tax Act, 1961.
In this connection, reference may be made to Burrows Words & Phrases Judicial Dictionary, 4th Edn.
page 306.
All these aspects were discussed by the Calcutta High Court (by one of us, Sabyasachi Mukharji, J singly) in Laxmipat Chororia vs K.K. Ganguli & ors., 82 l.
T.R. 306 (Cal).
This decision was affirmed on appeal and the bench decision of the said Court is reported in 93 I.T 'R. at p. 489.
This aspect of the matter has been clearly dealt with by a judgment of the division bench of the Allahabad High Court in Motilal and ors.
vs Preventive Intelligence officer, Central Excise and Customs, Agra and others, where the judgment was delivered by one of us (R.S. Pathak, J.).
There the Court held that the power conferred under section 132(1) of the Act was contemplated in relation to those cases where the precise location of the article or thing was not known to the Income tax department and therefore, a search was necessary for it, and where it would not be ordinarily yielded over by the person having possession of it.
The view that section 132(3) of the Act would include a case where the location of the article or thing was known and where ordinarily the person holding custody of it would readily deliver it up to the Income tax department was not correct, it was so held by the division bench of the Allahabad High Court.
It was further held that consequently goods in the custody of the Assistant Collector of Customs and Central Excise were not things which could be the subject of an order under section 132(3) of the Act.
Pathak, J. spoke for the division bench there at p. 422 of the report thus: "In my opinion, the power conferred under section 132(1) is contemplated in relation to those cases where the precise location of the article or thing is not known to the income tax department and, therefore, a search must be made for it, and where it will not be ordinarily yielded over by the person having possession of it and, therefore it is necessary to seize it.
If it is only such article or thing which 303 is contemplated by section 132(1) then it is such article or A thing alone which can be the subject of an order under section 132(3).
I am unable to accept the contention on behalf of the Income tax department that section 132(3) will include a case where the location of the article or thing is known and where ordinarily the person holding custody of it will readily deliver it up to the Income tax department.
Such article or thing, I think, requires neither search nor seizure. " Mr. S.C. Manchanda, learned advocate for the revenue, drew our attention to several decisions including the decision in Noor Mohd. Rahimatulla Gillani, vs The Commissioner of Income tax Vidrabha and Marathwada, Nagpur and another, 1976 Taxation Law Reports 688 (Bombay).
In that case, after referring to the views expressed by the division bench of Allahabad High Court and division bench of Punjab and Haryana High Court in the judgment under appeal and the Calcutta High Court, as indicated before, Chandurkar J. Of the Bombay High Court observed as follows: "We are not inclined to accept the submission that no valid authorisation to seize the amount Lying with the Collector of Central Excise and Customs, Nagpur could have been issued under Section 132(1).
The relevant provision in the instant case is to be found in Section 132(1) (c) of the Act and all that is required in order to issue an authorisation under Section 132(1) is that either the Director of Inspection or the Commissioner must have reason to believe that any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed for the purposes of the Act or the Income tax Act of 1922.
It is the character of money or assets as undisclosed income or property and their possession that gives jurisdiction to issue the authori risation.
Merely because some authority has seized that money or property, its character which is believed to be that of undisclosed income or property does not change.
The seizure of the cash amount of Rs.3.05.530 by the 304 Central Excise Authorities in the instant case no doubt transferred physical possession of that amount from the petitioner to the Central Excise Department, but the legal ownership of that money still continued to be with the petitioner.
As long as that amount was not confiscated or did not become the property of the Central Excise Depart ment by virtue of an order passed under the relevant provision of law if at all any order could be so passed the property or the money did not cease to be that of the petitioner.
Though the Collector of Central Excise and Customs was in possession of the money, since its alleged character of being undisclosed income or property remained unattended the Collector satisfied the description of "any person" being in possession of undisclosed income or property though the property represented the undisclosed income or property of the petitioner himself.
The words used in section 132(1) (c) are "any person".
Such a person may be a person who is in possession of his own undisclosed income or property or a person who is in possession of somebody else 's undisclosed income or property.
The fact that the Collector of Central Excise and Customs happened to be an officer of the Government of India was not relevant because the Income tax Authorities and the Central Excise Authorities were functioning under two separate enactments which created two different liabilities the enforcement of which was entrusted to independent authorities under the law.
Disagreeing, therefore, with the authorities relied upon by the 3 petitioner, we must hold that the authorisation issued even against the Collector of Central Excise and Customs enabling the Income tax officer to seize that amount was a valid authorisation.
In any case, in the instant case, a subsequent order under section 132(3) was already made and even by the order under section 132(5) that amount was directed to be released.
" It is true that the title was not transferred to the Customs authorities by seizure under the .
But in the context.
in which the expressions "possession" and "seizure" have been used, it p cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title Was with the respondent herein.
In this context, the physical posses 305 sion having regard to the language used is relevent and material.
Physical possession was with the Customs authorities when the seizure authorisation was passed.
Therefore, where the exact location of the property was known and there was no need to seize the money, the Income tax department could direct handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities.
In that view of the matter we are unable to sustain the view of Chandurkar, J. as the learned Chief Justice then was of the Bombay High Court.
Mr. Manchanda also drew our attention to the case of Pannalal vs Income Tax officer, B Ward, Chhindwara and ors.
, 93 I.T.R. p.480 (M.P.) where the division bench of the Madhya Pradesh High Court was of the view that an order under section 132(3) could only be passed after an authorisation for search and seizure had been made under section 132(1) of the Act.
The thing in respect of which the order is made must be one regarding which the conditions mentioned in clauses (a), (b) and (c) of section 132 are satisfied.
But there was nothing in the requirements of section 132 to support the view that if the Commissioner has definite knowledge that the books of account, documents, money, bullion, etc., sought to be searched and seized are in the possession of a particular person he cannot issue an authorisation for search and seizure of the same.
In our opinion.
it may be mentioned that if the location was certain, then there was nothing to search or look for.
Madhya Pradesh High Court, however, observed that the expression "has reason to believe" signified that the Commissioner has reason to be satisfied that the things to be searched are in the possession of a particular person.
The object of section 132 was according to the High Court, not merely to get information of the undisclosed income but also to seize the money, bullion, etc.
representing the undisclosed income and to retain.
them for purposes mentioned in section 132(5).
Section 132(1)(C) of the Act did not contain a condition either expressly or impliedly that the thing to be seized should not be in the possession of a person who may willingly part with his possession.
There is no obligation on any one, not even on Government officers of other department, to deliver anything to G the income tax authorities except when the law requires them to do so.
The person authorised by the Commissioner could enter and search any building, break open the lock of any door etc.
But that did not mean that in every case the person authorised by the warrant would have to exercise all those powers in making the search and seizing the thing, according to the High Court.
It was not necessary that an actual 306 search must precede an order under section 132(3) directing a person not to part with articles in his possession.
Section 132(1)(c) did not contemplate that the person who has not disclosed his income or property for the purposes of the Income tax Act should himself be in possession of money, bullion, etc.
representing such income.
Clause (c) spoke of "any person who is in possession" and it did not specifically refer to possession by the person who had not disclosed his income.
All that the clause required was that the money, bullion etc. should be such which represents either wholly or partly income or property which had not been disclosed for purposes of the Income tax Act and such money, bullion, etc.
should be in the possession of a person.
This construction was supported by the use of words "immediate possession" in section 132(3) of the Act.
This was the view of the High Court.
There an order under section 132(3) was passed by the Commissioner of Income tax on the Collector of Customs and Central Excise in respect of currency notes of the value of Rs.2,02.500 belonging to a firm, which the Collector was holding under the Gold Control Act and which, as no offence was committed under that Act, the Collector had ordered to be released.
It was also held by the High Court that the Collector was under a legal obligation to return the currency notes to the firm after the proceedings under the Gold Control Act had been finalised.
The power of the Collector was only to retain the currency notes for a limited period.
It could be held that the currency notes were held by the Collector for and on behalf of the firm and the order passed under section 132 was valid.
For the reasons mentioned hereinbefore, we are unable to sustain that view of the High Court.
As mentioned before though legal title might have been with the person whose income was sought to be taxed the physical possession was with the Customs authorities.
Our attention was drawn to a bench decision of the Madras High Court where similar view was taken in Gulab and Company and Anr.
vs Superintendent of Central Excise (Preventive) Trichy, and ors.
For the reasons we have indicated hereinbefore, we are also unable to sustain this view.
The Kerala High Court in the case of Assainar and Anr.
vs Income tax Officer, Calicut and on,., also accepted this view.
We are, for the aforesaid reasons, unable to sustain this view with respect.
The High Court observed that the word "search" has varied meanings and it should be given the general meanings "to look for" or "seek" which are also well known.
But in the context the expression "seizure" and in the context 307 the expression "search" where the location of the property was known A to the Government, we are of the opinion that it could not be said that one government department could search any other government department, and seize those documents.
Relying on the decision of the Allahabad High Court in Motilal 's case (supra) as well as the decision of the Calcutta High Court in Laxmipat 's case (supra), the learned single judge of the Punjab and Haryana High Court in Ramesh Chander vs Commissioner of Income Tax (supra) held that the word "seizure" implied forcibly taking from the owner or who has the possession and who was unwilling to part with the possession.
In that case custody was with the police and it would be inappropriate to accept the position that the income tax department which was another department of the Union of India had to be armed with authority to seize from the unwilling persons.
We are in agreement with these views of the learned single judge.
This view of the learned single judge has been confirmed in the judgment of the division bench, already referred to hereinbefore (reported in 93 I.T.R. p. 450).
The lacuna in law has subsequently been filled in by 132A of the Act with effect from October, 1975.
In the view of the law as it stood at the relevant time, we are unable to sustain the challenge to the order, impugned in this appeal.
The appeal, therefore, fails and is accordingly dismissed with the . observations that it will be open to the Income tax authorities to approach the appropriate authorities to realise any amount of money or to recover any books of account or documents in accordance with law.
In the facts and the circumstances of the case, parties will pay and bear their respective costs.
S.R. Appeal dismissed.
| On 23rd August, 1970, when the respondent was travelling by car, alleged to be belonging to his brother, from Ambala to Batala, the Customs officer intercepted him near the Beas river and forcibly taken along with the driver, Gurunam Singh to the Customs House at Amritsar.
The respondent along with the driver was searched and the customs authorities took into possession Rs.33,500 in Indian currency, 10 gold sovereigns and the car in which he travelled.
The Customs authorities, thereupon initiated departmental proceedings under section 110(II) of the and extended the period of issuing of the show cause notice under section 124 of the .
These proceedings were quashed by an order of the Learned Single Judge of the High Court of Punjab on 24th April, 1372 following an earlier decision of that Court.
After the said judgment, the respondent approached the customs authorities for the return of the money and the car on 11.5.1972.
The gold sovereigns were not demanded because ac cording to the respondent these did not belong to him.
He had been directed to come on the following day to get back the currency notes and the car.
On the next day, however the Income Tax officer served the warrant of authorisation dated 10th May, 1972 issued under section 132 of the Income Tax Act, read with Rule 112(II) of the Rules on the respondent as well as on the customs department with the result the cash was taken possession of by the Income Tax authorities.
Thereafter 295 the respondent filed another writ petition under Article 226 and 227 of A the Constitution.
The customs authorities also filed an appeal against the decision of the Single Judge dated 24th April, 1972.
The writ petition and the appeal were heard together by a Division Bench of the Punjab High Court.
Dismissing the appeal and allowing the writ petition the High Court held that where the amount was seized by the customs authorities and the seizure was held illegal by the Court customs authorities were bound to return the money to the person entitled to it under the relevant provisions of section 110 of the ; that the Income Tax authorities could not seize such an amount from the customs authorities under section 132 of the Income Tax Act and authorisation of search and seizure was illegal if issued in the name of the person who did not have possession of the Article in respect of which it was issued.
Hence this appeal by the revenue by special leave.
Dismissing the appeal, the Court, ^ HELD: 1.1 on a construction of section 132 of Income Tax Act, 1961 and the context, in which the words "search", "possession", and "seizure" have been used in the said section and the rules indicate that there cannot be any order in respect of goods or moneys or papers which are in the custody of another department under legal authority where the location of the property was known to the Government one government department could not search another department and seize them.
[301E F] 1.2 Sub Section (3) of section 132 of the Act uses the expression "who is in immediate possession or control thereof".
"Possession" is a word of ambiguous meaning and its legal senses do not always coincide with the popular sense.
Possession again may not always be synonymous with manual detention or physical retention of the goods or moneys.
When the physical custody of the moneys and goods were with the customs authorities, and that too by a legal sanction and authority to have that custody, it cannot be said that possession as used in section 132 of the Act was still with the respondent Tarsem Kumar.
[30 1F H] 1.3 Reading the expressions "retention" and "custody" in some of the sub sections of section 132 in the context these have been used, it cannot be said, that where an authority or a person has retention and custody with the legal sanction behind it, it was not the intention of the legislature to say that he was not in possession as contemplated in section 132 of the Income Tax Act, 1961.
[302A B] 296 The Commissioner of Income Tax vs Ramesh Chander & Ors.
, PunJab; Tarsem Kumar & Anr.
vs The Commissioner of Income Tax, Haryana, Himachal Pradesh & Delhi & ors.
, ; Laxmipat Chororia vs K.K. Ganguli Motilal and ors.
vs Preventive Intelligence officer, Central Excise and Customs, Agra & Ors., Allahabad, distinguished and partly overruled.
Noor Mohd. Rahimatulla Gillani vs The Commissioner of Income tax Vidrabha and Marathwada, Nagpurand Anr., [1976] Taxation Law Reports, 688, Bombay; Pannalal vs Income Tax officer, Ward.
Chhindwara and ors.
, 93 ITR p. 480 Madhya Pradesh; Gulab and Company and Anr.
vs Superintendent of Central Excise (Preventive) Trichy, and ors.
, Madras; Assainar and Anr.
vs Income tax officer, Calicut and ors.
, Kerala, overruled.
1.4 It is true that in the instant case, the title was not transferred to the Customs authorities by seizure under the .
But in the context, in which the expressions "possession" and "seizure" have been used, it cannot be considered to mean that the possession was where the legal title was, physical possession was with the Customs authorities, title was with the respondent herein.
In this context, the physical possession having regard to the language used is relevant and material.
Physical possession was with the Customs authorities when the seizure authorisation was passed.
Therefore, where the exact location of the property was known and there was no need to seize the money, the Income tax department could direct handing over the money to the Income tax authorities or take steps for such direction through appropriate authorities and not by resort to section 132 of the Income Tax Act.
This is so because if the location was certain then there was nothing to search or look for.
[304G H; 305A B]
|
ivil Appeal No. 1147 of 1990.
From the Judgment and Order dated 22.9.
1989 of the A.P. Administrative Tribunal; Hyderabad in Representation Peti tion No. 3843 of 1989.
T.V.S.N. Chari, Mrs. B. Sunita Rao and Ms. Manjula Gupta for the Appellants.
K. Madhava Reddy, D.R.K. Reddy, Vimal Dave, B. Rajeshwar Rao and Mudu Vijai for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This is an appeal by the A.P. Public Service Commission against the decision of the A.P. Administrative Tribunal dated September 22, 1989.
The appeal raises a question as to the scope of Rule 5 of the A.P. Police Service Rules, 1966.
The facts are not in dispute and may be stated as fol lows: The Public Service Commission issued an Advertisement/Notification No. 18/1983 inviting applications for selection in a Combined Competitive Examination to be held in November, 1983 at Anantapur, Guntur, Hyderabad, Kakinada, Tirupathi, Visakhapatnam and Warangal Centres for recruitment to the posts included in Grade I Services.
The 465 Notification was published in the Gazette dated August 25, 1983.
The post of Deputy Superintendent of Police was one of the posts for which applications were invited.
The respond ent applied to that post as well as to other posts.
The minimum age prescribed for selection to the post of Deputy Superintendent of Police was 21 years as on July 1, 1983, as against 18 years for other posts.
The respondent did not complete 21 years as on July 1, 1983.
He was short by 19 days and his case, therefore, was not considered for ap pointment to post of Deputy Superintendent of Police.
He was, however, considered to other posts since it was a combined selection for Grade I Services.
In 1984, the Public Service Commission conducted prelim inary examination for the eligible candidates.
In 1985, final examination was conducted.
In 1986, the candidates were called for interview.
On 27 March 1987, the list of selected candidates was prepared for appointment to differ ent categories of posts.
The respondent was selected as Deputy Registrar of Co operative Societies.
On 15 April 1989 i.e. about two years after the selec tion, the respondent approached the Andhra Pradesh Adminis trative Tribunal contending inter alia that the date 'for attaining the minimum age prescribed under the Notification was contrary to Rule 5 of the A.P. Police Service Rules, 1966.
He claimed that such date ought to be the date of preparation of the list of selected candidates and not any date anterior to it.
He accordingly sought a direction to the Public Service Commission to select him to the post of Deputy SUperintendent of Police since he had satisfied the required minimum age of 21 years as on the date of the select list.
The Tribunal has accepted that contention and issued a direction to the State Government to create an additional post as a special case and appoint the respondent as Deputy Superintendent of Police, if necessary by reducing the number of posts for recruitment for the next year.
The decision of the Tribunal has been challenged in this appeal by the Public Service Commission since the view expressed therein is likely to affect the appointment of a large number of candidates.
There is no dispute that the eligibility of a candidate as to age for appointment as Deputy Superintendent of Police should be determined according to Rule 5 of the A.P. Police Service Rules.
It is, therefore, necessary to look first at that Rule.
Rule 5 so far as is relevant provides: 466 "Rule 5.
Qualifications (A) No person shall be eligible for appointment as a Deputy Superintendent of Police, Category 2 by direct recruitment unless he (i) has completed the age of 21 years and had not completed the age of 26 years on the first day of July of the year in which the selection is made.
XXX XXX XXX The Rule prescribes the minimum as well as the maximum age for appointment as Deputy Superintendent of Police.
Minimum age is 21 years.
The candidate must have completed 21 years on the first day of July of the year in which the selection is made.
He should not have also completed 26 years as on that day.
The Tribunal while construing this Rule has observed: "According to the procedure the process of selection begins with the issue of the advertisement and culminates in for warding the list to the appointing authority.
The essence of the process lies in the preparation of the list.
A selection can be said to have been done only when the list is pre pared.
In this view the eligibility of the candidates as to age has to be determined at this stage.
" If the word 'selection ' is understood in a sense meaning thereby only the final act of selecting candidates with preparation of the list for appointment, then the conclusion of the Tribunal may not be unjustified.
But round phrases cannot give square answers.
Before accepting that meaning, we must see the consequences, anomalies and uncertainties that it may lead to.
The Tribunal in fact does not dispute that the process of selection begins with the issuance of advertisement and ends with the preparation of select list for appointment.
Indeed, it consists of various steps like inviting applications, scrutiny of applications, rejection of defective applications or elimination of ineligible candidates, conducting examinations, calling for interview or viva voce and preparation of list of successful candidates for appointment.
Rule 3 of the Rules of Procedure of the Public Service Commission is also indicative of all these steps.
When such are the different steps in the process of selection, the minimum or maximum age for suitability of a candidate for appointment cannot be allowed to depend upon any fluctuating or uncertain date.
If the final stage of selection is delayed and more often it happens for various reasons, the candidates who are 467 eligible on the date of application may find themselves eliminated at the final stage for no fault of theirs.
The date to attain the minimum or maximum age must, therefore, be specific, and determinate as on a particular date for candidates to apply and for recruiting agency to scrutinise applications.
It would be, therefore, unreasonable to con strue the word selection only as the factum of preparation of the select list.
Nothing so bad would have been intended by the Rule making authority.
The appeal therefore, is allowed setting aside the order of the Tribunal.
In the circumstances of the case, however, we make no order as to costs.
P.S.S. Appeal allowed.
| Rule 5 of the A.P. Police Service Rules, 1966 makes a person ineligible for appointment as Deputy Superintendent of Police unless he has completed the age of 21 years on the first day of July of the year in which the selection is made.
The appellant Service Commission notified on August 25, 1983 a combined examination for Grade I Services of the State, to be held in November, 1983 wherein the minimum age prescribed for selection to the post of Deputy Superintend ent of Police was 21 years as on July 1, 1983 as against 18 years for other posts.
The respondent who was 19 days short of 21 years as on July 1, 1983 was not considered for appointment to the post of Deputy Superintendent of Police.
He was, however, select ed as Deputy Registrar of Cooperative Societies.
He filed a petition before the State Administrative Tribunal seeking a direction to the appellant to select him to the post of Deputy Superintendent of Police, contending that the date for attaining the minimum age prescribed under the notifica tion was contrary to Rule 5 of the Police Service Rules in as much as it ought to be the date of preparation of the list of selected candidates and not any date anterior to it.
The Tribunal accepted that contention.
Allowing the appeal by the Service Commission, the Court, HELD: The word 'selection ' occurring in Rule 5 of the A.P. Police Service Rules, 1966 cannot be construed only as the factum of preparation of the select list.
[467B] The process of selection which begins with the issuance of 464 advertisement and continues through scrutiny of applica tions, rejection of defective applications or elimination of ineligible candidates, conducting examinations, calling for interview or viva voce, ends with preparation of the select list for appointment.
Rule 3 of the Rules of Procedure of the Public Service Commission is also indicative of all these steps.
When such were the different steps in the process of selection, the minimum or maximum age for suit ability of a candidate for appointment cannot be allowed to depend upon any fluctuating or uncertain date.
If the final stage of selection is delayed, and more often it happens for various reasons, the candidates who are eligible on the date of application may find themselves eliminated at the final stage for no fault of theirs.
The date to attain the minimum or maximum age must, therefore, be specific and determinate as on a particular date for candidates to apply and for recruiting agency to scrutinise applications.
[466F 467A]
|
ition No. 3727 of 1985 Under Article 32 of the Constitution of India.
M.C. Mehta (Petitioner in person).
B. Datta, Additional Solicitor General, R.P. Kapur, P.P Singh and Ms. A Subhashini for Respondent Nos. 2 and 3 R.A. Gupta for Respondent No. 87.
S.K. Dholakia, Deepak K. Thakur, Mukul Mudgal and P. Narasimhan for Respondent No. 89.
Miss Bina Gupta, B.P. Singh, S.R. Srivastava, Krishan Kumar, Vineet Kumar, R. Mohan, Mrs. Shobha Dikshit, A. Sharan, D. Goburdhan, Mrs. G.S. Mishra, Parijat Sinha, R.C. Verma, R.P. Singh, Ranjit Kumar, R.B. Mehrotra, Manoj Swarup & Co. Raj Birbal, J.B.D. & Co. S.S. Khanduja, B.P Singh, E.C. Aggrawala, Khaitan & Co., A.K. Srivastava, Swarup John & Co., Mehta Dave, R.S. Sodhi, Subodh Markandey, T.V.S.N. Chari, Ashok Grover, Narain and P.C. Kapur for the Respondents.
B.R.L. Iyenger and Surya Kant for the Intervener.
The Judgment of the Court was delivered by VENKATARAMIAH, J.
This is a public interest litigation The 284 petitioner who is an active social worker has filed this petition inter alia for the issue of a writ/order/direction in the nature of mandamus to the respondents other than Respondents 1, and 7 to 9 restraining them from letting out the trade effluents into the river Ganga till such time they put up necessary treatment plants for treating the trade effluents in order to arrest the pollution of water in the said river.
Respondent 1 is the Union of India, Respondent 7 is the Chairman of the Central Board for Prevention and Control of Pollution, Respondent 8 is the Chairman, Uttar Pradesh Pollution Control Board and Respondent 9 is the Indian Standards Institute.
Water is the most important of the elements of nature.
River valleys are the credles of civilization from beginning of the world.
Aryan civilization grew around the towns and villages on the banks of the river Ganga.
Varanasi which is one of the cities on the banks of the river Ganga is considered to be one of the oldest human settlements in the world.
It is the popular belief that the river Ganga is the purifier of all but we are now led to the situation that action has to be taken to prevent the pollution of the water of the river Ganga since we have reached a stage that any further pollution of the river water is likely to lead to a catastrophe.
There are today large towns inhabited by millions of people on the banks of the river Ganga.
There are also large industries on its banks.
Sewage of the towns and cities on the banks of the river and the trade effluents of the factories and other industries are continuously being discharged into the river.
It is the complaint of the petitioner that neither the Government nor the people are giving adequate attention to stop the pollution of the river Ganga.
Steps have, therefore, to be taken for the purpose of protecting the cleanliness of the stream in the river Ganga, which is in fact the life sustainer of a large part of the northern India.
When this petition came up for preliminary hearing, the Court directed the issue of notice under order 1 rule 8 of the Code of Civil Procedure treating this case as a representative action by publishing the gist of the petition in the newspapers in circulation in northern India and calling upon all the industrialists and the municipal corporations and the town municipal councils having jurisdiction over the areas through which the river Ganga flows to appear before the Court and to show cause as to why directions should not be issued to them as prayed by the petitioner asking them not to allow the trade effluents and the sewage into the river Ganga without appropriately treating them before discharging them into the river.
Pursuant to the said notice a large number of industrialists and local bodies have entered 285 appearance before the Court.
Some of them have filed counteraffidavits explaining the steps taken by them for treating the trade effluents before discharging t hem into the river.
When the above case came up for consideration before the Court on the last date of hearing we directed that the case against the tanneries at Jajmau area near Kanpur would be taken up for hearing first.
Respondents 14 to 87 and 89 are the tanneries near Kanpur.
Of them respondents 16 to 32, 34 to 36, 43, 47, 51, 52, 54, 55, 57, 58, 60 to 62, 64, 67 to 69, 72, 74, 75, 77 to 82, 85, 87 and 89 are represented by counsel.
The remaining tanneries did not appear before the Court at the time of the hearing nor were they represented by any counsel.
Before proceeding to consider the facts of this case it is necessary to state a few words about the importance of and need for protecting our environment.
Article 48 A of the Constitution provides that the State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country.
Article 51 A of the Constitution imposes as one of the fundamental duties on every citizen the duty to protect and improve the natural environment including forests, lakes, rivers and wild life and to have compassion for living creatures.
The proclamation adopted by the United Nations Conference on the Human Environment which took place at Stockholm from 5th to 16th of June, 1972 and in which the Indian delegation led by the Prime Minister of India took a leading role runs thus: "1.
Man is both creature and moulder of his environment which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth.
In the long and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology, man has acquired the power to transform his environment in countless ways and on an unprecedented scale.
Both aspects of man 's environment, the natural and the man made, are essential to his well being and to the enjoyment of basic human rights even the right to life itself.
The protection and improvement of the human environment is a major issue which affects the well being of peoples and economic development throughout the world; it is the urgent desire of the peoples of the whole world and the duty of all Governments.
286 3.
Man has constantly to sum up experience and go on discovering, inventing, creating and advancing.
In our time man 's capability to transform his surroundings, if used wisely, can bring to all peoples the benefits of development and the opportunity to enhance the quality of life.
Wrongly or heedlessly applied, the same power can do incalculable harm to human beings and the human environment.
We see around us growing evidence of man made harm in many regions of the earth; dangerous levels of pollution in water, air, earth and living beings; major and undesirable disturbances to the ecological balance of the biosphere; destruction and depletion of irreplaceable resources; and gross deficiencies harmful to the physical, mental and social health of man, in the man made environment; particularly in the living and working environment.
A point has been reached in history when we must shape our actions throughout the world with a more prudent care for their environmental consequences.
Through ignorance or indifference we can do massive and irreversible harm to the earthly environment on which our life and well being depend.
Conversely, through fuller knowledge and wiser action, we can achieve for ourselves and our posterity a better life in an environment more in keeping with human needs and hopes.
There are broad vistas for the enhancement of environmental quality and the creation of a good life.
What is needed is an enthusiastic but calm state of mind and intense but orderly work.
For the purpose of attaining freedom in the world of nature, man must use knowledge to build in collaboration with nature a better environment.
To defend and improve the human environment for present and future generations has become an imperative goal for mankind a goal to be pursued together with, and in harmony with, the established and fundamental goals of peace and of world wide economic and social development.
To achieve this environmental goal will demand the acceptance of responsibility by citizens and communities and by enterprises and institutions at every level, all sharing equitably in common efforts.
Individuals in all walks of life as well as organizations in many fields, by their values and the sum of their actions, will shape the world environ 287 ment of the future.
Local and National Governments will bear the greatest burden for large scale environmental policy and action within their jurisdictions.
International co operation is also needed in order to raise resources to support the developing countries carrying out their responsibilities in this field.
A growing class of environmental problems, because they are regional or global in extent or because they affect the common international realm, will require extensive co operation among nations and action by international organizations in the common interest.
The Conference calls upon the Governments and peoples to exert common efforts for the preservation and improvement of the human environment, for the benefit of all the people and for their posterity.
" The proclamation also contained certain common convictions of the participant nations and made certain recommendations on development and environment.
The common convictions stated include the conviction that the discharge of toxic substances or of other substances and the release of heat in such quantities or concentrations as to exceed the capacity of environment to render them harmless must be halted in order to ensure that serious or irreversible damage is not inflicted upon eco systems, that States shall take all possible steps to prevent pollution of the seas so that hazards to human health, harm to living resources and marine life, damage to the amenities or interference with other legitimate uses of seas is avoided that the environmental policies would enhance and not adversely affect the present and future development potential of development countries, that science and technology as part of their contributions to economic and social development must be applied with identification, avoidance and control of environmental risks and the solution of environmental problems and for the common good of mankind, that States have the responsibility to ensure that activities of exploitation of their own resources within their jurisdiction are controlled and do not cause damage to the environment of other States or areas beyond the limit of national jurisdiction, that it will be essential in all cases to consider the systems of values prevailing in each country and the extent of the applicability of standards which are valid for the most advanced countries but which may be inappropriate 288 and of unwarranted social cost and that man and his environment must be spared the effects of nuclear weapons and all other means of mass destruction.
These are only some of the statements of principles proclaimed by the Stockholm Conference.
(Vide Lal 's Commentaries on Water and Air Pollution Laws (2nd Edn. ) pages 6 7 Realising the importance of the prevention and control of pollution of water for human existence Parliament has passed the (Act 6 of 1974) (hereinafter referred to as 'the Act ') to provide for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water, for the establishment, with a view to carrying out the purposes aforesaid, of Boards for the prevention and control of water pollution, for conferring on and assigning to such Boards powers and functions relating thereto and for matters connected therewith.
The Act was passed pursuant to resolutions passed by all the Houses of Legislatures of the States of Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Madhya Pradesh, Rajasthan, Tripura and West Bengal under clause (1) of Article 252 of the Constitution to the effect that the prevention and control of water pollution should be regulated in those States by Parliamentary legislation.
The Act has been since adopted by the State of Uttar Pradesh also by resolutions passed in that behalf by the Houses of Legislature of the said State in the year 1975 (vide notification No. 897/ix 3 l00 74 dated 3.2.1975).
Section 24 of the Act prohibits the use of any stream or well for disposal of polluting matter etc.
It provides that subject to the provisions of the said section no person shall knowingly cause or permit any poisonous, noxious or polluting matter determined in accordance with such standards as may be laid down by the State Board to enter whether directly or indirectly into any stream or well or no person shall knowingly cause or permit to enter into any stream any other matter which may tend either directly or in combination with similar matters to impede the proper flow of the water of the stream in a manner leading or likely to lead to a substantial aggravation of pollution due to other causes or of its consequences.
The expression stream is defined by section 2(j) of the Act as including river, water course whether flowing or for the time being dry, inland water whether natural or artificial, sub terranean waters, sea or tidal waters to such extent or as the case may be to such point as the State Government may by notification in the official Gazette, 289 specify in that behalf.
Under the Act it is permissible to establish a Central Board and the State Boards.
The functions of the Central Board and the State Boards are described in section 16 and 17 respectively.
One of the functions of the State Board is to inspect sewage or trade effluents, works and plants for the treatment of sewage and trade effluents, and to review plans, specifications or other data relating to plants set up for the treatment of water, works for the purification and the system for the disposal of sewage or trade effluents. 'Trade effluent ' includes any liquid, gaseous or solid substance which is discharged from any premises used for carrying on any trade or industry, other than domestic sewage.
The State Board is also entrusted with the work of laying down standards of treatment of sewage and trade effluents to be discharged into any particular stream taking into account the minimum fair weather dilution available in that stream and the tolerance limits of pollution permissible in the water of the stream, after the discharge of such effluents.
The State Board is also entrusted with the power of making application to courts for restraining apprehended pollution of water in streams or wells.
Notwithstanding the comprehensive provisions contained in the Act no effective steps appear to have been taken by the State Board so far to prevent the discharge of effluents of the Jajmau near Kanpur to the river Ganga.
The fact that such effluents are being first discharged into the municipal sewerage does not absolve the tanneries from being proceeded against under the provisions of the law in force since ultimately the effluents reach the river Ganga from the sewerage system of the municipality.
In addition to the above Act, Parliament has also passed the Environment (Protection) Act, 1986 (29 of 1986) which has been brought into force throughout India with effect from November 19, 1986.
Section 3 of this Act confers power on the Central Government to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution. 'Environment ' includes water, air and land and the inter relationship which exists among and between water, air and land and human beings, other living creatures, plants, micro organism and property.
(Vide section 2(a) of the Environment (Protection) Act, 1986).
Under Section 3(2)(iv) of the said Act the Central Government may lay down standards for emission or discharge of environmental pollutants from various sources whatsoever.
Notwithstanding anything contained in any other law but subject to the provisions of the Environment (Protection) Act, 1986, the Central Government may under section S of the 290 Act, in the exercise of its powers and performance of its functions under that Act issue directions in writing to any person, officer or authority and such authority is bound to comply with such directions.
The power to issue directions under the said section includes the power to direct the closure, prohibition or regulation of any industry, operation or process or stoppage or regulation of the supply of electricity or water or any other service.
Section 9 of the said Act imposes a duty on every person to take steps to prevent or mitigate the environmental pollution.
Section 15 of the said Act contains provisions relating to penalties that may be imposed for the contravention of any of the provisions of the said Act or directions issued thereunder.
It is to be noticed that not much has been done even under this Act by the Central Government to stop the grave public nuisance caused by the tanneries at Jajmau, Kanpur.
All the tanneries at Jajmau, Kanpur which were represented by counsel, except respondent Nos. 87 and 89 have relied upon a common counter affidavit filed by them and their case is argued by Shri S.K. Dholakia and Shri Mukul Mudgal.
Respondent No. 87 is represented by Shri R.P. Gupta and respondent No. 89 is represented by Shri P. Narasimhan.
There is not much dispute on the question that the discharge of the trade effluents from these tanneries into the river Ganga has been causing considerable damage to the life of the people who use the water of the river Ganga and also to the aquatic life in the river.
The tanneries at Jajmau in Kanpur have themselves formed an association called Jajmau Tanners Pollution Control Association with the objects among others: (1) To establish, equip and maintain laboratories, workshop, institutes, organisations and factories for conducting and carrying on p experiments and to provide funds for the main objects of the Company.
(2) To procure and import wherever necessary the chemicals etc.
for the purpose of pollution control in tanning industries.
(3) To set up and maintain common effluent treatment plant for member tanners in and around Jajmau.
(4) To make periodical charges on members for the effluent treatment based on the benefit he/it derives from time to time to meet the common expenses for maintenance, replacement incurred towards effluent treatment.
291 In the Fiscal Plan for setting up common Effluent Treatment Plants for Indian Tanning Industry (March, 1986) prepared by the committee constituted by the Directorate General of Technical Development (Government of India) it is observed thus: "Leather industry is one of the three major industries besides paper and textiles consuming large quantities of water for processing of hides and skins into leather Naturally most of the water used is discharged as wastewater.
The wastewater contains putrescible organic and toxic inorganic materials which when discharged as such will deplete dissolved oxygen content of the receiving water courses resulting in the death of all acquatic life and emanating foul odour.
Disposal of these untreated effluents on to land will pollute the ground water resources.
Discharging of these effluents without treatment into public sewers results in the choking of sewers.
Realising the importance of keeping the environment clean, the Government of India has enacted the Water Pollution Control Act (Central Act 6 of 1974) and almost all the State Government have adopted the Act and implementing the Act by forming the Pollution Control Boards in their respective states.
The Pollution Control Boards have been insisting that all industries have to treat their effluents to the prescribed standards and leather industry is no exception to this rule.
Tanneries situated all over the country have been faced with the problem of treating their effluents.
Seized with the problem of finding out a solution, the Central Leather Research Institute, Madras has brought out a Management Investment Report (CLRI Core Committee Report) as early as 1976 which contains 14 flow sheets indicating the treatment technologies for various types of leather processing techniques, quantity of effluents etc.
including the cost of treatment.
" A monograph entitled 'Treatment Technology of Tannery Effluents ' prepared by section Rajamani, W. Madavakrishna and G. Thyagarajan of the Central Leather Research Institute, Adyar, Madras states that generally the wastewater from beam house process namely soaking, liming, deliming etc. are highly alkaline containing decomposing organic matter, hair, lime sulphide etc. and is nearly ten times as strong as domestic sewage and refers to the various methods 292 by which the effluents of the tanneries could be treated before their discharge into any river.
They recommend four types of wastewater treatment technology so far as the tanneries are concerned 1) segregation or mixing of suitable sectional waste water from different processes; (2) primary treatment; (3) secondary biological treatment; and (4) disposal of solid wastes from the treatment system.
The said monograph explains the work at the primary treatment unit thus: "The primary treatment units principally comprise of coarse screens, two numbers of settling tanks and sludge drying beds.
The settling tank, each of about 1 2 days capacity acts as an equalisation cum setting tank as well.
As an alternative, clarifier can be provided in place of settling tank for treating higher capacity effluents.
Depending on the quality of composite effluent, addition of neutralising chemicals like lime, alum, ferric chloride etc. would be required for effective precipitation of chromium and removal of suspended solids in the sedimentation process.
The sludge from the settling tanks and clarifier is removed and dried on sludge drying beds made up of filtering media gravel, sand and supporting masonary structure.
For operational reasons, sludge drying beds are divided into four or more compartments.
The dried sludge from the sludge drying beds can be used as manure or for landfill if it is vegetable tannery waste.
In case of chrome tannery waste, the dried sludge should be buried or disposed off suitably as per the directions of regulatory agencies and local bodies.
" The secondary treatment units are explained in the said monograph thus: "The pre treated effluent needs suitable secondary biological treatment to meet the pollution control standards.
The general biological treatment units which can be adopted under Indian conditions are anaerobic lagoon, aerated lagoon, extended aeration systems like oxidation ditch, activated sludge process etc.
Anaerobic lagoon is a simple anaerobic treatment unit suitable for effluents with high BOD like vegetable tannery (Raw to E. 1) wastewater.
In depth of the lagoon varies from 3 5 metres and detention time from l0 20 days 293 depending upon the pollutional load and atmospheric conditions.
This is an open type digester with no provision for gas collection.
No power is required for this system and its performance is proved to be efficient in South Indian conditions.
Anaerobic contract filter is also an anaerobic treatment unit.
This is a closed tank type unit made up of R.C.C. Or masonry structure filled up with media like broken granite stones etc.
This unit occupies less land area since the detention time is about 1 2 days only.
This system is reported to be efficient for treating high organic load, but the capital cost would be comparatively high.
Aerated lagoon is a shallow water tight pond of about 2 3 metres depth with a detention time of about 4 6 days.
Fixed or floating type surface aerators are provided to transfer oxygen from atmospheric air to the effluent for biological treatment using micro organisms under aerobic conditions.
The system is suitable for treating low organic load.
Extended aeration systems like 'activated sludge process ' and 'oxidation ditch ' are the improved aerobic biological treatment systems occupying less land area since the detention time/capacity would be only about 1 2 days.
These units require secondary settling tank and sludge recirculation arrangements.
Extended aeration systems are proved to be efficient.
The operational and maintenance cost is comparatively high for smaller installations, but economical for treatment capacity of 150 M3 and above per day.
" A study of the conditions prevailing at Jajmau, Kanpur was made by the Sub Committee on Effluent Disposal constituted by the Development Council for Leather and Leather Goods Industries along with the various tanneries situated in some other parts of India and in its report submitted in April, 1984, the Sub Committee has observed in the case of the tanneries at Jajmau, Kanpur thus: "In the case of Jajmau, Kanpur, the committee visited few tanneries where the effort has been made to have primary treatment of the effluent before it is dis 294 charged to the common drain/the river Ganges.
There are 60 tanneries in Jajmau which will be covered under joint effluent disposal.
The total production is to the tune of 12000 hides with a total discharge of 5 million litres per day.
The State Government has taken appropriate steps in preparation of the feasibility report under the guidance of U.P. Pollution Control Board.
This proposal was also supported by Central Pollution Board, Delhi by sharing the total fee of Rs.80,000 to be paid to the Public Health Engineering Consultancy, Bombay which has prepared the report with the help of IIT, Bombay.
The report suggests that each tannery should make arrangement for the primary treatment of their effluent and then it will be discharged into common treatment plant.
" There is a reference to the Jajmau tanneries in 'an Action Plan for Prevention of Pollution of the Ganga ' prepared by the Department of Environment, Government of India in the year 1985, which is as under: "1.1 The Ganga drains eight States Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar, West Bengal and the Union Territory of Delhi.
It is also the most important river of India and has served as the cradle of Indian Civilization.
Several major pilgrim centres have existed on its banks for centuries and millions of people come to bathe in the river during religious festivals, especially the Kumbhs of Haridwar and Allahabad.
Many towns on the Ganga, e.g., Kanpur.
Allahabad, Patna and Calcutta have very large populations and the river also serves as the source of water supply for these towns.
The Ganga is, however, being grossly polluted especially near the towns situated on its banks.
Urgent steps need to be taken to prevent this pollution and restore the purity of river water.
Sources of Pollution 2.1 The main sources of pollution of the Ganga are the following: Urban liquid waste (Sewage, storm drainage mixed with sewage, human, cattle and kitchen wastes carried by drains etc. ) 295 Industrial liquid waste A Surface run off of cultivated land where cultivators use chemical fertilisers, pesticides, insecticides and such manures the mixing of which may make the river water unsafe for drinking and bathing.
Surface run off from areas on which urban solid wastes are dumped Surface run off from areas on which industrial solid wastes are dumped . . . . . . . . 4.4.12 Effluent from industries: Under the laws of the land the responsibilty for treatment of the industrial effluents is that of the industry.
While the concept of 'Strict Liability ' should be adhered to in some cases, circumstances may require that plans for sewerage and treatment systems should consider industrial effluents as well.
Clusters of small industries located in a contiguous area near the river bank and causing direct pollution to the river such as the tanneries in Jajmau in Kanpur is a case in point.
In some cases, waste waters from some industrial units may have already been connected to the city sewer and, therefore, merit treatment along with the sewage in the sewage treatment plant.
It may also be necessary in some crowded areas to accept wastewaters of industries in a city sewer to be fed to the treatment plant, provided the industrial waste is free from heavy metals, toxic chemicals and is not abnormally acidic or alkaline.
In such circumstances, scheme proposals have to carefully examine the case of integrating or segregating industrial wastes for purposes of conveyance and treatment as also the possibilities for appointment of capital and operating costs between the city authorities and the industries concerned." (emphasis added) Appearing on behalf of the Department of Environment, (Government of India, Shri B. Dutta the learned Ist Additional H 296 Solicitor General of India placed before us a memorandum explaining the existing situation at Jajmau area of Kanpur.
It reads thus: "Status regarding construction of treatment facilities for treatment of wastes from Tanneries in Jajmau area of Kanpur.
About 70 small, medium and large tanneries are located in Jajmau area of Kanpur.
On an average they generate 4.5 MLD of waste water.
Under the existing laws, tanneries like other industries are expected to provide treatment of their effluents to different standards depending on whether these are discharged into stream or land.
It is the responsibility of the industry concerned to ensure that the quality of the wastewater conforms to the standards laid down 3.
From time to time, tanneries of Kanpur have re presented that due to lack of physical facilities, technical knowhow and funds, it has not been possible to install adequate treatment facilities.
Jajmau is an environmentally degraded area of Kanpur.
The location of numerous tanneries in the area is a major cause of the degradation.
Civic facilities for water supply, sanitation, solid waste removal etc. are also highly inadequate.
Because the area abuts the Ganga river, its pollution affects the river quality as well.
Accordingly, under the Ganga Action Plan an integrated sanitation project is being taken up for the Jajmau area.
Some aspects of the Plan relate to tannery wastes as follows: (i) The medium and large units will have to up pre treatment facilities to ensure that the standard of sewage discharged into the municipal sewer also conform to the standards laid down.
Scientific institutions such as Central Leather Research Institute are looking into the possibility of pretreatment including recovery of materials such as chromium.
The setting up of pre treatment facility in the respective units will be the responsibility of the individual units concerned.
The Ganga Project Directorate as part of the Ganga Action Plan, will play a facilitative role to 297 demonstrate application of modern technologies for cost A effective pre treatment which the small tanners can afford.
(ii) Since the wastes will be ultimately discharged into the river, the waste will have to further conform to the standards laid down for discharge into the stream.
For this purpose, it will be necessary to treat the waste further and as part of the Ganga Action Plan a treatment plant will be constructed for this purpose utilising some advanced processes.
It is also proposed to combine the domestic waste with the industrial waste conveyed through the industrial sewer which will then be treated in a treatment plant (iii) It is estimated that cost of this proposed sewage treatment facility which will treat the waste from the domestic sources and the pretreated wastes from tanneries will be about Rs.2.5 crores.
It will have a capacity of 25 MLD and the first demonstration module of about 5 MLD is expected to be installed in early 1988 89.
Necessary work for designing of the plant has already been initiated and the infrastructure facilities such as availability of land, soil testing etc.
have also been ensured.
Tender specifications are being provided and it is expected that the tenders will be floated sometime in October 87.
It is expected that in the combined treatment facility of 25 MLD, about 20 MLD will be from the domestic sources and 5 MLD will be from the tanneries after pretreatment in the region.
" In the counter affidavit filed on behalf of the Hindustan Chambers of Commerce, of which 43 respondents are members it is admitted that the tanneries discharge their trade effluents into the sewage nullah which leads to the municipal sewage plant before they are thrown into the river Ganga.
It is not disputed by any of the respondents that the water in the river Ganga is being polluted grossly by the effluent discharged by the tanneries.
We are informed that six of the tanneries have already set up the primary treatment plants for carrying out the pre treatment of the effluent before it is discharged into the municipal Sewerage which ultimately leads to the river Ganga.
About 14 of the tanneries are stated to be engaged in the construction of the primary treatment plants.
It is pleaded on behalf of the rest of the tanneries who are the members of the Hindustan Chambers of Commerce and three other tanneries represented by Shir Mukul Mudgal that if some time is given to them to establish the pre treatment plants they would H 298 do so.
lt is, however, submitted by all of them that it would not be possible for them to have the secondary system for treating wastewater as that would involve enormous expenditure which the tanneries themselves would not be able to meet.
It is true that it may not be possible for the tanneries to establish immediately the secondary system plant in view of the large expenditure involved but having regard to the adverse effect the effluents are having on the river water, the tanneries at Jajmau, Kanpur should, at least set up of the primary treatment plants and that is the minimum which the tanneries should do in the circumstances of the case.
In the counter affidavit filed on behalf of the Hindustan Chamber of Commerce it is seen that the cost of pretreatment plant for a 'A ' class tannery is Rs.3,68,000, the cost of the plant for a 'B ' class tannery is Rs.2,30,000 and the cost of the plant for 'C ' class tannery is Rs.50,000 This cost does not appear to be excessive.
The financial capacity of the tanneries should be considered as irrelevant while requiring them to establish primary treatment plants.
Just like an industry which cannot pay minimum wages to its workers cannot be allowed to exist a tannery which cannot set up a primary treatment plant cannot be permitted to continue to be in existence for the adverse effect on the public at large which is likely to ensue by the discharging of the trade effluents from the tannery to the river Ganga would be immense and it will outweigh any inconvenience that may be caused to the management and the labour employed by it on account of its closure.
Moreover, the tanneries involved in these cases are not taken by surprise.
For several years they are being asked to take necessary steps to prevent the flow of untreated wastewater from their factories into the river.
Some of them have already complied with the demand.
It should be remembered that the effluent discharged from a tannery is ten times noxious when compared with the domestic sewage water which flows into the river from any urban areas on its banks.
We feel that the tanneries at Jajmau, Kanpur cannot be allowed to continue to carry on the industrial activity unless they take steps to establish primary treatment plants.
In cases of this nature this Court may issue appropriate directions if it finds that the public nuisance or other wrongful act affecting or likely to affect the public is being committed and the statutory authorities who are charged with the duty to prevent it are not taking adequate steps to rectify the grievance.
For every breach of a right there should be a remedy.
It is unfortunate that a number of tanneries at Jajmau even though they are aware of these proceedings have not cared even to enter appearance in this Court to express their willingness to take appropriate steps to establish the pretreatment plants.
So far as they are concerned an order directing them to stop working their tanneries should be passed.
299 We accordingly direct M/s. Delight Tannery (respondent 14), M/s. Hindustan Tannery (respondent 15), M/s. Primer Allarmin Tannery (respondent 33), M/s. Mahaboob Tannery (respondent 37), M/s. Popular Tannery (respondent 38), M/s. Standard Tannery (respondent 39), M/s. Vikash Tarmery (respondent 40), M/s. New Golden Tannery (respondent 41), M/s. D.D. Tannery (respondent 42), M/s. Himalaya Tannery (respondent 44), M/s. Commercial Industry (respondent 45), M/s. Madina Tannery (respondent 46), M/s. Kanpur Tannery (respondent 48), M/s. New Jab Tannery (respondent 49), M/s. Famous Tannery (respondent 50), M/s. Glaxy Tannery (respondent 53), M/s. Bengal Tannery (respondent 56), M/s. Chhangal Tannery (respondent 59), M/s.
Nadari Tannery (respondent 63), M/s. Jajmau Tanners (respondent 65), M/s. International Tanning Industry (respondent 66), M/s. Poorwanchal Tanning Industry (respondent 70), M/s. Navratan Tanning (respondent 71), M/s. Haroou Tannery (respondent 73), M/s. Himalaya Tanners (respondent 76), M/s. R.A. Traders (respondent 79, M/s. Alam Tannery (respondent 83), M/s. G.T. Tannery (respondent 84), and M/s. Awadh Tannery (respondent 86) to stop the running of their tanneries and also not to let out trade effluents from their tanneries either directly or indirectly into the river Ganga without subjecting the trade effluents to a pretreatment process by setting up primary treatment plants as approved by the State Board (respondent 8) with effect from 1. l0.1987.
M/s. Indian Tanning Industry (respondent 30), the U.P. Tannery (respondent 19), M/s. Zaz Tannery (respondent 28), M/s. Super Tannery India Ltd. (respondent 21), M/s. Shewan Tannery (respondent 20), M/s. Pioneer Tannery (respondent 23), and M/s. M.K.J. Corporation (respondent 89) who have already put up the primary treatment plants may continue to carry on production in their factories subject to the condition that they should continue to keep the primary treatment plants established by them in sound working order.
Shri S.K. Dholakia, learned counsel for the other tanneries who are members of the Hindustan Chambers of Commerce and the other tanneries who have entered appearance through Shri Mukul Mudgal submits that they will establish primary treatment plants within six months and he further submits that in the event of their not completing the construction of the primary treatment plants as approved by the State Board (respondent 8) and bringing them into operation within the period of six months the said tanneries will stop carrying on their business.
We record the statement made by the learned counsel and grant them time till 31.3.1988 to set up the primary treatment plants.
If 300 any of these tanneries does not set up a primary treatment plant within 31.3.1988 it is directed to stop its business with effect from 1.4.1988.
We issue a direction to the Central Government, the Uttar Pradesh Board, established under the provisions of the and the District Magistrate, Kanpur to enforce our order faithfully.
Copies of this order shall be cent to them for information The case is adjourned to 27th October, 1987 to consider the case against the municipal bodies in the State of Uttar Pradesh having jurisdiction over the areas through which the river Ganga is passing.
SINGH, J.
I respectfully agree with every word what my learned brother Venkataramiah, J. has stated in the proposed order and the directions issued by that order.
However, I wish to add few words.
The river Ganga is one of the greatest rivers of the world, although its entire course is only 1560 miles from its source in Himalaya to the sea.
There are many rivers larger in shape and longer in size but no river in the world has been so great as the Ganga.
It is great because to millions of people since centuries it is the most sacred river.
It is called "Sursari" river of the Gods, 'Patitpawani ' purifier of all sins and 'Ganga Ma ' Mother Ganges.
To millions of Hindus, it is the most sacred, most venerated river on earth.
According the Hindu belief and mythology to bathe in it, is to wash away guilt, to drink the water, having bathed in it, and to carry it away in containers for those who may have not had the good fortune to make the pilgrimage, to it, is meritorious.
To be cremated on its banks, or to die there, and to have one 's ashes cast on its waters, is the wish of every Hindu.
Many P saints and sages have persued their quest for knowledge and enlightenment on the banks of the river Ganga.
Its water has not only purified the body and soul of the millions but it has given fertile land to the country in Uttar Pradesh and Bihar.
Ganga has been used as means of water transport for trade and commerce.
The Indian civilization of the Northern India thrived in the plains of Ganga and most of the important towns and places of pilgrimage are situated on its banks.
The river Ganga has been part of Hindu civilization.
Jawahar Lal Nehru who did not consider himself a devout Hindu gave expression to his feelings for the Ganga that is to be found in his Will and Testament, a short extract from which is as under: "My desire to have a handful of my ashes thrown into the 301 Ganga at Allahabad has no religious significance, so far as I am concerned.
I have no religious sentiment in the matter.
I have been attached to the Ganga and the Jamuna rivers in Allahabad ever since my childhood and, as I have grown older, this attachment has also grown.
I have watched their varying moods as the seasons changed, and have often thought of the history and myth and tradition and song and story that have become attached to them through the long ages and become part of their flowing waters.
The Ganga, especially, as the river of India, beloved of her people, round which are intertwined her racial memories, her hopes and fears, her songs of triumph, her victories and her defeats.
She has been a symbol of India 's age long culture and civilization, ever changing, ever flowing, and yet ever the same Ganga.
She reminds me of the snow covered peaks and the deep valleys of the Himalayas, which I have loved so much, and of the rich and vast plains below, where my life and work have been cast.
" The river Ganga is the life line of millions of people of India, Indian culture and civilization has grown around it.
This great river drains of eight States of India, Himachal Pradesh, Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar and West Bengal.
The Ganga has always been an integral part of the nation 's history, culture and environment.
It has been the source of sustenance of the millions of people who have lived on its banks from time immemorial.
Millions of our people bathe in the Ganga drink its water under an abiding faith and belief to purify themselves and to achieve moksha release from the cycle of birth and death.
It is tragic that the Ganga, which has since time immemorial, purified the people is being polluted by man in numerous ways, by dumping of garbage, throwing carcass of dead animals and discharge of effluents.
Scientific investigations and survey reports have shown that the Ganga which serves one third of the India 's population is polluted by the discharge of municipal sewage and the industrial effluents in the river.
The pollution of the river Ganga is affecting the life, health, and ecology of the Indo Gangetic Plain.
The Government as well as Parliament both have taken a number of steps to control the water pollution, but nothing substantial has been achieved.
I need not refer to those steps as my learned brother has referred to them in detail.
No law or authority can succeed in removing the pollution unless the people cooperate.
To my mind, it is the sacred duty of all those who reside or carry on business around 302 the river Ganga to ensure the purity of Ganga.
Tanneries at Jajmau area near Kanpur have been polluting the Ganga in a big way.
This Court issued notices to them but in spite of notice many industrialists have not bothered either to respond to the notice or to take elementary steps for the treatment of industrial effluent before discharging the same into the river.
We are therefore issuing the directions for the closure of those tanneries which have failed to take minimum steps required for the primary treatment of industrial effluent.
We are conscious that closure of tanneries may bring unemployment, loss of revenue, but life, health and ecology have greater importance to the people.
| A suit was filed by the appellants in the Court of the Assistant Collector seeking ejectment of the respondent tenant from his lands, under section 77(3) proviso 2(e) of the Punjab Tenancy Act, 1887 on the ground that he had defaulted in the payment of rent, and it was decreed.
In execution of the decree, the respondent was ejected from the suit land.
No appeal was filed from the said decree but the respondent filed a suit in the Civil Court against the appellants alleging that he was in fact a mortgagee in possession of the suit land and not a tenant and that the decree of ejectment passed by the Revenue Court was without jurisdiction and, therefore, a nullity, and claimed restoration of the possession of the suit land from which he had been wrongly ousted by the Revenue Court.
The suit was dismissed by the Subordinate Judge holding that the claim of the respondent to be a mortgagee in possession of the suit land was wrong and that the order of the Revenue Court was perfectly in order and within that court 's jurisdictional competence and that it was of a binding nature on the respondent and was not open to challenge in subsequent proceedings.
The appellant asserted that the claim by the respondent in the subsequent suit was barred by the principles of res judicata.
The suit was dismissed.
In appeal, the Additional District Judge reversed the findings of the trial court and decreed the suit of the respondent.
The appellants filed regular second appeals before the High Court.
94 A Single Judge of the High Court was of the view that, in view of the conflicting judgments on the points for determination in the case, the matter required to be referred to a larger bench.
The Full Bench, by a majority view, held that the decision of the Revenue Court under section 77 of the Punjab Tenancy Act upon the relationship of landlord and tenant between the parties would not operate as res judicata and it would be open to challenge in a subsequent suit or in other collateral proceedings between the parties, and remitted the matter back to the Single Judge for disposal in accordance with the above decision.
The question for consideration in the appeals by Special Leave before this Court was: as to how far an order of eviction of a person by the Revenue Court under section 77(3) of the Punjab Tenancy Act, 1887 operated as res judicata for a title suit filed by a person claiming to be a mortgagee and not a tenant of the alleged landlord.
Dismissing the appeals by special leave, this Court, ^ HELD: 1.
The High Court was right in holding that there was no res judicata so far as the second suit based on the assertion of the title of the respondent was concerned.
[105C D] 2.1 The overall scheme of the Act is to provide speedy remedies with regard to disputes between the landlords and tenants and also under what circumstances that relationship came to an end.
Sections 98 and 99 do not in any way affect the question whether the decision of the Revenue Court under the Revenue Act can operate as res judicata in certain cases.
The limits of the jurisdiction would be apparent by the fact that all suits by a landlord to eject a tenant do not encompass suits to decide whether a person was a tenant or not or whether the plaintiff was a landlord or not.
[98C; 99 F G] 2.2 ouster of jurisdiction of Civil Courts should not be inferred easily.
It must be clearly provided for and established.
If the dispute was as to the nature of the relationship of landlord and tenant between the parties, the Revenue Court under the Punjab Tenancy Act had no jurisdiction; when there was admitted position, the relationship of landlord and tenant was accepted, the remedies and rights of the parties should be worked out under the scheme of the Act.
[103C D] 2.3 A salutory and simple test to apply in determining whether the previous decision operated as res judicata or on principles analogous thereto was to find out whether the first court could go into the question 95 whether the respondent was a tenant in possession or mortgagee in A possession.
In view of the language of section 77 it is clear that it could not and, therefore, there was no res judicata.
The subsequent civil suit was.
therefore, not barred by res judicata.
[105B C] Raj Lakshmi Dasi and others vs Banamali Sen and others, ; Om Prakash Gupta vs Rattan Singh and another, ; Shri Raja Durga Singh of Solan vs Tholu; , ; Magiti Sasamal vs Pandab Bissoi, ; Lal Chand (dead) by Lrs.
and others vs Radha Kishan, [1977] 2 SCR 522 and State of Tamil Nadu vs Ramalinga Samigal Madam; , , referred to.
|
l Appeals No. 1834 and 1169 of 1968.
Appeals from the Judgment and order dated February 21, 22 1967 of the Calcutta High Court in Wealth Tax Reference No. 138 of 1962.
section T. Desai, section A. Aiyar, R.N. Sachthey and B. D. Sharma, for the appellant (in C.A. No. 1169/68 and the respondent (in C. A. No 1834 of 1968) A. C. Mitra, N. R. Khaitan, P. Khaitan, Krishna Sen and B.P. Maheswari for the respondent (in C. A. No. 1169.
of 1968 ) and the appellant (in C. A. No. 1834 of 1968. ) The Judgment of the Court was delivered by Grover, J.
These appeals have been brought from a judgment of the Calcutta High Court by certificate in a Wealth Tax Reference.
Civil Appeal No. 1834 of 1968 is of the assessee and the other appeal has been filed by the Commissioner of Wealth Tax, West Bengal.
It is necessary to deal with the appeal of the Commissioner of Wealth Tax as the other appeal shall also stand disposed of once the question is answered in the Commissioner 's appeal.
The assessee is a public limited company.
In the assessment year 1948 49 the assessee revalued its assets enhancing the existing book value by Rs. 1,45,00,0001which was credited to the capital reserve account.
In assessing the wealth tax payable by the assessee for the assessment year 1957 58 the relevant valuation date being March 31, 1957 the Wealth Tax Officer proceeded under section 7 (2) of the Wealth Tax Act, hereinafter called the 'Act ' and took the valuation of the assets at Rs. 5,10 40,897 as shown in the balance sheet on the relevant date.
The assessee claimed that a sum of Rs. 1,45,00,0001 by which 106 the book value of the fixed assets was enhanced in 1948 49 should be deducted in the computation of the net value.
It is not clear from the order of the Wealth Tax Officer, who rejected the claim, as to what was the ground taken for claiming this deduction.
Before the Appellate Assistant Commissioner it was contended on behalf of the assessee that the capital reserve was not out of profits and was only a notional reserve and therefore it should be excluded when global valuation of the assets was being made.
It was urged that the figure of reserve was purely artificial and had no relation to the working of the company and should not be taken into account in the valuation of the net assets.
The Appellate Assistant Commissioner did not accede to the contention and confirmed the assessment.
The Appellate Tribunal found that a similar point had come up for decision before a special bench of the Tribunal consisting of three members in Bombay ' and had been decided in favour of the assessee.
Following that decision the Tribunal allowed the appeal and held that the department was not justified in valuing the assets at the enhanced figure for the purpose of computation of the net wealth of the assessee.
The relevant question that was referred was as follows "Whether on the facts and in the circumstances of the case the Tribunal was justified in excluding the sum of Rs. 1,45,00,000/ from the net valuation of the assets as shown in the balance sheet of the assessee as on 31 3 57.
" The High Court was of the view that the Revenue had taken the stand before the Tribunal that the motive of the assessee in revaluing the assets at a higher figure was to declare the bonus share which, however, could not be so declared as the permission of the Central Government was withheld in that behalf.
According to the High Court there was a motive for revaluation of the assets and therefore the valuation in the balance sheet could not furnish the correct basis.
It was pointed out that the conduct of the assessee was "far from what was to be desired" because even in the successive balance sheets the revaluation figure appeared even after the assessee had failed to get the permission of the Central Government to issue bonus shares.
107 But according to the High Court an erroneous figure did not become a correct figure by lapse of time.
The following portion of the judgment of the High Court may be reproduced: "The Tribunal was, therefore, in a sense right in excluding a sum of Rs. 1,45,00,000/ from the net value of the assets as shown in the balance sheets of the assessee as on March 31, 1957.
We, however, make it clear that in answering question No. 1 in the affirmative we did not mean that the net value of the assets should be taken at the figure as appearing in the balance sheet reduced by Rs. 1,45,00,000/ .
What we mean to say is that in valuing the assets the addition of Rs. 1,45,00,000/ may not have been correctly made.
This does not, however, mean that the net value of the assets must be the balance sheet figure reduced by Rs. 1,45,00,000/ .
That net value will have now to be ascertained under section 7 (1) of the Wealth Tax Act, now that we have expressed the opinion that the balance sheet in the instant case has not found the unequivocal approval both of the assessee and of the Revenue authorities.
" It is quite clear that under section 7 (2) of the Act the Wealth Tax Officer may determine the net value of the assets of the business as a whole having regard to the balance sheet of the business as on the valuation date.
it must be remembered that under section 211 of the Indian , every balance sheet of a company must give a true and fair figure of the state of its affairs as at the end of the financial year.
If the assessee has shown the net value of the assets at a certain figure in the balance sheet the Wealth Tax Officer would be entitled to accept it on the footing that the assessee knew best what the valuation of the assets was.
It was, however, open to the assessee to satisfy the authorities that the said figure had been enhanced or increased or inflated "for acceptable reasons".
It was equally open to the Wealth Tax Officer not to accept the figure given by the assessee but to arrive at another figure if he was satisfied for good reasons that the valuation given in the balance sheet was wrong.
Theer 108 can be no doubt that section 7 (2) (a) of the Act contemplates that the book value in the balance sheet should be taken as the primary basis of valuation and if any adjustment is required it is open to the Wealth Tax Officer to make such an adjustment in the valuation as given in the balance sheet as may be necessary in the circumstances of the case.
(See Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth Tax (Central) Calcutta.(1) In the present case the sole reason which at the stage of the appeal before the Tribunal came to be disclosed for inflating the valuation by Rs. 1,45,00,000 in the assessment year 1948 49 was that the assessee contemplated issuing bonus shares for which the consent of the Central Government was necessary under section 3 of the .
The same was not granted.
The assessee, however, did not produce the order of the Central Government showing the reasons for which permission was declined to the issuance of bonus shares.
It continued to show the enhanced or inflated valuation in the balance sheet throughout.
The circumstances in which bonus shares are issued are well known.
A company may not require any new money but it may reasonably wish to bring the nominal amount of its issued share capital more into line with the true excess of assets over liabilities.
Unless it takes this step its annual profits will appear to be disproportionately high in relation to its nominal capital.
By means of issuing bonus shares the reserve or share premium account or some part of the same are capitalised or converted into share capital.
The capitalisation of free i.e. voluntary reserves merely means that undistributed profits have been permanently ploughed back and converted into share capital which cannot be returned to the members by way of dividend.
(vide Modern Company Law by L.C.B. Gower, p. 110).
It is quite clear that the main idea underlying the issue of bonus shares is to bring the nominal amount of the issued share capital of the company into line with the true excess of assets over liabilities.
This will involve a genuine and correct valuation of assets and not their under valuation or inflation.
It must be remembered that the power to (1) ; 109 issue shares for increasing the capital is of a fiduciary nature and must be exercised bona fide for the general advantage of the company.
No evidence in the shape of an affidavit or any other material was placed before the wealth tax.
authorities by the assessee demonstrating how it became necessary to inflate the valuation by Rs. 1,45,00,000 for the purpose of issuing bonus shares.
It was not even the case of the assessee that the value was inflated under expert acturial suggestion or under some misapprehension or mistaken advice.
In this situation the only possible conclusion can be that the assessee could not advance any convincing and acceptable reasons for the alleged inflation.
The Wealth Tax Officer could reject the figure given by the assessee in the balance sheet if he was, for sufficient reasons, satisfied that that figure was wrong.
The facts and circumstances which have been discussed above show that the Wealth Tax Officer was fully justified in accepting the figure which the assessee himself had given in the balance sheet as the correct figure and proceed to make the assess ment in accordance with that figure.
The High Court should have, therefore, answered the question in the negative and in favour of the Commissioner of Wealth Tax The appeal of the Commissioner of Wealth Tax i.e. C.A. 1169/68 is allowed and the question is answered accordingly.
The appeal of the assessee i.e. C. A. 1834/68 consequently becomes infructuous and must be dismissed in view of the answer returned in the other appeal.
The Commissioner will be entitled to the costs incurred in this Court (one hearing fee) as also in the High Court.
V.P.S. Appeal dismissed.
| The respondents were lessees of the appellants for a period of 5 years from March 1, 1943.
They were protected tenants under the Bombay Tenancy and Agricultural Lands Act, 1948.
They contended that the appellants landlords could not claim eviction, because, being protected tenants their lease was extended by statute up to February 28, 1953, and as a result of the amendment of section 5 of the 1948 Act by amending Act of 1952 the period of lease was further extended upto February 28, 1963.
On the question whether a protected tenant could claim the benefit of section 5 as amended by amending Act of 1952, HELD : Section 5 of the 1948 Act as amended in 1952 did not apply to protected tenancy.
The principal reason was that the tenancy of a protected tenant under the 1948 Act was of unlimited time.
Whereas a tenant other than a protected tenant had a security only for 10 years and it was only under section 5 as amended in 1952 that a tenant other than a protected tenant became entitled to renewal of the tenancy for a period of 10 years in succes sion as mentioned in the said section.
Any such renewal, for periods of ten years, of a protected tenancy, would be destructive of the protected tenant 's unlimited security as to duration of tenancy.
Secondly, if section 5 as amended in 1952 applied to protected tenants the manner of termination of tenancy mentioned in section 5, namely, by giving one year 's notice in writing before the end of each period of ten years would have been totally inconsistent with the manner of termination of tenancy of a protected tenant.
The tenancy of a protected tenant could be terminated by one year 's notice on the grounds mentioned in section 34 whereas the tenancy of one other than a protected tenant, could be terminated on the grounds mentioned in section 34(1) only at the end of each period of ten years.
Thirdly, if the word tenancy occurring in s.5as amended in 1952 related to protected tenancy the words "as if such atenant was a protected tenant in section 5(2) would not have been necessary".
And finally, section 5 as amended in 1952 was in Ch.
II which contained general provisions regarding tenancies and sections 31 and 34 of 1948 Act which related, to protected tenants occurred in Ch.
III of the 1958 Act.
[341 H 342 H] Trimbak Damodhar Rajpukar vs Assaram Patil, [1962] Supp.
1 S.C.R. 700, referred 'to.
|
iminal Appeal No. 93 of 1971.
L. M. Singhvi, P. N. Tewari, O. C. Mathur, J. B. Dadacharji and Ravinder Narain, for the appellant.
Niren De, Attorney General for India, Jagadish Swarup, Solicitor General of India, R. N. Sachthey and R. L. Mehta, for respondents Nos. 1 & 2.
Advocate General for the State of Jammu and Kashmir and R. N. Sachthey, for respondent No. 3.
The Judgment of the Court was delivered by Sikri, C.J.
This appeal, by special leave, is directed ,against the judgment of the Jammu & Kashmir High Court holding that the , (25 of 1946) was validly extended to the State of Jammu and Kashmir by the Jammu and Kashmir (Extension of Laws) Act, 1956 'here in after referred to as the Extension Act.
The High Court decided this question on a reference made by the Special Magistrate, under section 432 of the Code of Criminal Procedure, before whom the challan had been filed under the Ranbir Penal Code on November 29, 1967.
The only question involved in this appeal before us is as to the validity of the aforesaid extension.
In order to appreciate the contentions of the learned counsel in this respect, it is necessary to give an account of the constitutional provisions applicable to the State of Jammu and Kashmir.
On January 26, 1950 the Constitution of India came into force.
In exercise of the powers conferred by cl.(1) of article 370 of the Constitution of India, the President, in consultation with the Government of the State of Jammu & Kashmir, made the Constitution (Application to Jammu and Kashmir) Order, 1950.
This order was superseded by another order in 1954.
By that order, ,one of the entries on which Parliament could make laws was entry 413 80 of List I of the Seventh Schedule of the Constitution.
This entry reads as follows : "Extension of the powers and jurisdiction of members of a police force belonging to any State to any area outside that State, but not so as to enable the police of one State to exercise powers and jurisdiction in any area outside that State without the consent of the Government of the State in which such area is situated; extension of the powers and jurisdiction of members of a police force belonging to any State to railway areas out side the State.
" By the Extension Act, which received the assent of the President on September 25, 1956, the , was extended to the State of Jammu and Kashmir in the following manner.
Section 1(2) of the Extension Act provided that "it shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
" Section 2 provided as follows : "(1) The Acts and Ordinance mentioned in the Schedule and all rules, orders and regulations made thereunder are hereby extended to and shall be in force in, the State of Jammu and Kashmir.
(2) With effect from the commencement of this Act, the Acts and Ordinance mentioned in the Schedule shall be amended as specified therein.
" The Schedule which contained the Delhi Special Police Esta blishment Act, 1946, amended it by omitting the words "except the State of Jammu and Kashmir" from section 1.
A notification was issued appointing November 1, 1956, as the date for the coming into force of the Extension Act in the State of Jammu and Kashmir.
The effect of the notification and Sec.
2 mentioned above was that the , came into force in the State of Jammu and Kashmir from November 1, 1956.
The Constitution (Seventh Amendment) Act, 1956 also came into force on November 1, 1956.
The State of Delhi, which was a part 'C ' State immediately before the Seventh Amendment became a Union Territory.
A new article, article 372A, was also inserted in the Constitution enabling the President to adapt laws in force immediately before the commencement of the Constitution (Seventh Amendment) Act, 1956.
This article has no application to the State of Jammu and Kashmir and, therefore, any adaptations made by the President 414 in exercise of the powers under article 372A can have no application to the State of Jammu and Kashmir.
In view of these constitutional changes, it is contended on behalf of the appellant, that under entry 80 Parliament could only extend the powers and jurisdiction of members of the Police Force belonging to any State, and as Delhi became a Union Territory and ceased to be a State on November 1, 1956, Parliament had no jurisdiction to extend the to the State of Jammu and Kashmir.
It seems to us that the impugned Act was validly extended and our reasons for coming to this conclusion are as follows.
When the Extension Act was passed, Parliament had the competence to extend the impugned Act to the State of Jammu and Kashmir because the Delhi Special Police Establishment was a police force belonging to a Part 'C ' State.
The contention of the learned counsel that because Parliament could not extend the powers and jurisdiction of members of the Delhi Special Police Force after November 1, 1956, assuming it to be correct, does not invalidate the powers exercised earlier.
When the Extension Act was passed there is no doubt that the Parliament had the power.
The fact that the Parliament ceased to have power, as from Nov ember 1, 1956, does not make any difference. ' This Court had occasion to deal with a similar question in State of Assam vs Ka Brhyien Kurkalang.(1) In that case, para 19(b) of Schedule 6, Constitution of India, authorized the Governor to make regulations for the peace and good government of a district.
This power was vested in the Governor tin the setting up of a District Council for an autonomous district.
It was contended that because a District Council had been set up, the Governor could not exercise the power under the Regulation and apply laws.
The High Court had accepted the contention but this Court reversed the judgment of the High Court, and after referring to J. K. Gas Plant Manufacturing Co. Ltd. vs King Emperor; (2) Ram Kirpal vs State of Bihar;(3) and Cajee vs U. Jormanik Siem,(4) held that although the power of the Governor to legislate ended when the District Council was constituted, the power conferred under the regulation on the Governor to bring into force the laws set out in the Schedule continued and would continue so long as the regulation remained on the statute book.
The same principle applies here.
The Central Government could validly issue a notification under sub section
(2) of Sec. 1 appointing the date from which the Act would come into force, and as soon as this notification was made, by virtue of section 2, the (1) (2) (3) ; (4) ; 415 impugned Act came into force in the State.
The Constitution (Seventh Amendment) Act did not destroy the efficacy of sub section (2) of section 1.
The learned counsel contended that this principle conflicts with the general principle that executive power corresponds to legislative power and it could not have been intended that the extended law should operate when there was no corresponding legislative power.
In this connection he referred to article 73.
The general principle is subject to exceptions.
Article 73 itself opens with the words "subject to the provisions of this Constitution.
" This is one of the exceptions envisaged by the Constitution.
Other such exceptions are in article 277 and article 372.
Although legislative power may not exist to legislate on the subject of existing laws executive power would be exercised under the laws saved by article 277 and article 372.
No authority has been cited in support of the contention that executive power to execute a valid law ceases to exist if power to make that law has been transferred to another authority or ceases to exist.
It was next contended that the impugned Act was repugnant to and inconsistent with the Jammu and Kashmir Code of Criminal Procedure and Jammu and Kashmir Police Act, which were already in existence before the Delhi Special Police Act, 1946 came into force.
But in so far as the impugned legislation is a law with respect to entry 80, even if there is repugnancy it must override any laws repugnant thereto in Jammu and.
Kashmir.
article 246, as applicable to Jammu and Kashmir, reads thus "246(1) Notwithstanding anything in clause (2), Parliament has the exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"); (2) Parliament, and, subject to clause (1), the Legislative of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List") When the impugned Act was extended Parliament had no power to make laws with respect to any items in the Concurrent List, but the impugned law is fully covered by entry 80 and there is no need to rely on the Concurrent list.
Therefore, article 254 can have no application to the present case.
It was also contended that the impugned Act could not have been: validly extended by a notification dated October 10, 1956, 416 issued under the Extension Act which itself came into force only from November 1, 1956.
There is nothing in sub s.(2) of section 1 which makes it obligatory that the notification should issue simultaneously with the date of the coming into force of the Act.
On the contrary, notification must ordinarily issue earlier than the date of the coming into force of the law.
It seems to us clear that the notification could have been issued any time after the President had given his assent, and as soon as the notification was issued section 2 came into effect and all the Acts and Ordinance mentioned in the Schedule, stood automatically extended and came into force.
The learned counsel did not press the point regarding article 14 of the Constitution.
In the result the appeal fails and is dismissed.
V.P.S. Appeal dismissed.
| The appellant was convicted by a first class Magistrate under section 406, I.P.C., and was sentenced to two years regorous imprisonment, a fine of Rs. 2000/ and, in default to one year 's further rigorous imprisonment.
On the question of the period of imprisonment that could be imposed in default of payment of fine, HELD : Even if section 65, I.P.C., could be applied the period of imprisonment in default of payment of fine could not exceed nine months since an offence under section 406 I.P.C. is punishable with imprisonment up to three years.
But reading sections 32 and 33, Cr.
P.C. together the Magistrate could not have awarded more than six months imprisonment in default of payment of fine.
The terms section 33 Cr.
P.C. and section 65 I.P.C., must therefore be harmonised.
Hence it must be held that while a Magistrate 's power are specifically limited by section 33 Cr.
P.C. they must also be exercised so as not to contravene section 65 I.P.C. [908 D G] Therefore, just as a First Class Magistrate trying an offence punishable under section 406 I.P.C., cannot impose the maximum sentence of imprisonment prescribed by the section, because this powers of awarding imprisonment are Specifically limited to a term not exceeding two years by section 32, Cr.
P.C. so also necessary , by resorting to section 65 I.P.C., award a period of imprisonment in default of payment of fine, on the erroneous assumption that he has the power to award the maximum sentence prescribed by section 406 1 P C. [908 G H; 909 A] Hence, three sentence of imprisonment in default of fine cannot exceed six months.
Reg vs Muhammad Sahib, I.L.R. ; Queen Empress vs Venkatesagadu, 1.
L. R. and Empress of India vs Darba, I.L.R.
I All. 46.1, referred to.
|
Appeal No. 161 of 1954.
Appeal from the judgment and order dated, May 18, 1953, of the Calcutta High Court in Income tax Reference No. 72 of 1951.
N. A. Palkhivala, P. D. Himatsingka, J. B. Dadachanji, section N. Andley Rameshwar Nath and P. L. Vohra, for the appellant.
G. N. Joshi and R. H. Dhebar, for the respondent.
May 23.
The Judgment of the Court was delivered by KAPUR J.
This appeal brought on a certificate of the High Court raises a point of far reaching consequence as to the interpretation of sections 8, 10 and 24(2) of the Indian Income tax Act (hereinafter termed the Act).
The assessee (who is the appellant before us) claims that in the computation of its profits for the assessment year under review (1945 46), it is entitled to set off the carried over loss of the previous year against the profits of the year of assessment under section 24(2) of the Act.
The assessee is a Bank carrying on banking business.
For the assessment year its assessable income was computed by the Income Tax Officer at Rs. 14,95,826 "by splitting up" its income into 2 heads . . . . "interest on securities" and . . . . business income ".
" Interest on securities" in the year of assessment was Rs. 23,62,815 and under the head " business income " there was a 81 loss of Rs. 8,86,972.
After making the necessary adjust ments and deducting the business loss from " Interest on securities ", the net income was determined at Rs. 14,95,826.
In the previous year there was a loss of Rs. 3,21,929 which was computed by setting off the business loss against "interest on securities ".
Before the Income tax Officer the assessee made its claim on the basis that it was a part of " the business of the Bank to deal in securities. . . . . . and " that no distinction should be made between income from securities and income from business for the purpose of set off under section 24 ".
It also claimed that it carried on only one business, namely banking as defined by section 277F of the Indian Companies Act in the ' course of which the " Bank has to receive money on deposits and invest such deposits in securities, loans and advances " and therefore holdings of securities by it could not be treated as its separate business.
The Income tax Officer was of the opinion that, as there was a loss under the head " business " its claim could; not be sustained and hence it could not be set off under section 24(2) of the Act.
On appeal to the Assistant Commissioner of Income tax it was again contended that the assessee was a dealer in securities and that the two heads of income, " Interest on securities " and " profits and gains " in banking business could not be treated separately and were part of the same business of the assessee and therefore it could claim a set off under section 24(2) of the Act.
But this contention was repelled.
The matter was then taken to the Income tax Appellate Tribunal where again the contention was repeated that the business of the assessee could not be split up into two heads under " interest on securities " and banking business".
The Tribunal, however, held: " Reading sections 6, 8 and 10 it appears to us that the legislature wanted to keep the income from the two sources as separate.
We are therefore of the opinion that the Income tax Officer was right in splitting up the income of the appellant into two heads and in refusing the set off of the business loss brought forward 11 82 from last year against income from Govt.
securities earned this year.
" It therefore did not allow the loss of the previous year to be set off against the computed profits of the assessment year.
The assessee thereupon asked for a case to be stated to the High Court and inter alia raised two questions; (1) Whether interest on securities was a part of Bank 's income from business carried on by it.
(2) Whether the assessee was entitled to set off the carried over loss of the previous year against income during the assessment year.
The assessee contended that it was carrying on banking business in various towns in India, that " in the usual course of its business it invests moneys in Securities and receives interest thereon " and therefore it claimed that the loss of Rs. 3,21,929, carried forward from the previous year could be set off under section 24(2) of the Act.
The Tribunal stated the case and sought the opinion of the High Court on the following three questions; (1) " Whether on the facts and in the circumstances of this case, the assessee was entitled to set off the business loss of Rs. 3,21,929 brought forward from the preceding year against this year 's income from interest on securities held by the assessee.
(2) Whether on the facts and in the circumstances of this case the assessee was entitled under section 8 to deduct any part of the administrative expenses out of the income from interest on securities.
(3) Whether in the circumstances of this case, the assessee was entitled under the first proviso to section 8 of the Income tax Act to deduct any interest on money borrowed and utilised for investment in tax free securities.
" The High Court answered all the questions in the negative.
The learned Chief Justice during the course of his judgment said: 83 " It appears to me, therefore, that because the several heads under section 6 in the Indian Act are mutually exclusive and because under any Income tax Law, an item coming under an exclusive head cannot in any circumstances be charged under another head and also because the interest on securities in the hands of a banker cannot be treated as business income on the principles explained by Mr. Justice Rowlatt, I must hold that the contention of the asesssee. . . . . . must be rejected.
" We had the benefit of a full and able argument from counsel on both sides.
Counsel for the appellant has raised three points: (1)That sections 8 and 10 of the Act should be so read that "interest on securities", in cases where the true nature and character of the securities in the hands of an assessee is one of trading assets, would be excluded from the scope of section 8 and would fall under the head "business" within section 10 of the Act and alternatively even if sections 8 and 10 are read as specific heads then section 10, being more appropriate, should be applied to the facts of the present case ; (2)If sections 8 and 10 are equally applicable the assessee has the option to be taxed under that head which imposes a lighter burden on him; and (3)Lastly he contended that even if the heads of income were to be taken as mutually exclusive so that the "interest on securities" falls under section 8 and "business" under section 10 of the Act, the assessee would be entitled to a set off under section 24 (2) because "interest on securities" and "profits and gains" from business result from different operations of the same business, the two being different forms of the same business of the assessee.
We may now turn to the scheme of the Act.
Section 2(15) defines "total income" to mean "total amount of income, profits and gains. . . .computed in the manner laid down in the Act.
" Chapter I of the Act deals with "Charge of income tax".
It consists of two sections 3 & 4.
Section 3 provides that "income tax shall be charged for any year at any rate or rates in 84 accordance with and subject to the provisions of this Act.
" Section 4 provides ' that "the total income of any previous year of any person includes all income, profits and gains from whatever sources derived".
Chapter 3 deals with "Taxable income".
Section 6 enumerates the heads of income chargeable to incometax.
It says as under : section 6 "Save as otherwise provided by this Act, the following heads of income, profits and gains, shall be chargeable to income tax in the manner hereinafter appearing namely (i) Salaries.
(ii) Interest on securities.
(iii) Income from property.
(iv) Profits and gains of business, profession or vocation.
(v) Income from other sources.
(vi) Capital gains.
" The two relevant heads for the purpose of this appeal are (ii) & (iv), i.e., " interest on securities " and " profits and gains of business" which are dealt with under sections 8 and 10 of the Act respectively.
Section 8 provides that " the tax shall be payable by an assessee under the head " interest on securities " in respect of interest receivable by him on any security of the Central Government. . . . and in the provisos to this section are given the allowable deductions.
The amendment made in the proviso by the Act of 1955 is very relevant for the purpose of this appeal and we &hall advert to it at a later stage.
Section 10 provides: " The tax shall be payable by an assessee under the head " profits and gains of business, profession or vocation" in respect of the profits or gains of any business, profession or vocation carried on by him ".
The assessee contends that securities are a part of its trading assets and this position has throughout been accepted by the Department, and any income which accrues in respect of these assets in the form of interest 85 has the same characteristics as profits or gains of " business " and therefore must be treated as income falling under the head " business " under section 10 of the Act.
In other words the income of the assessee from its banking business which includes dealing insecurities is,really income from the same source and whatever accrues in the form of interest whether from securities or from any other source of investment would fall under section 10 and not section 8 because all the interest accrues from the business carried on by the assessee and this business is only one business.
The argument thus is that sections 8 & 10 have to be so construed as to harmonise with each other and the only way they can be harmonised is that income accruing in the form of "interest on securities" should be taken to be accruing from the business of the assessee because securities form part of its trading assets and thus fall within section 10 and not section 8, which must be restricted to capital investments only.
It is further contended that if the object of the legislature was to give a separate and exclusive identity to the income from " interest on securities", it would have made the language of section 8 of the Act as specific as it has made in the case of income from dividends from shares, which income by the addition of sub section
(I A) to section 12 has come to have a specific place under the head "other sources" and is no longer within the head "business" under section 10 of the Act and thus by statute its nature and character have undergone a change.
Reference is in this connection made to Commissioner of Income tax vs Ahmuty & co. Ltd. (1) where it was held by the High Court of Bombay that dividend income received by a dealer in shares is chargeable under section 10 and not under section 12 of the Act.
It is thus contended that in order to preserve the unity and oneness of the business of the assessee and to maintain the unity of its business income the applicability of section 8 should be circumscribed to "interest on securities" when they are not trading assets of the assessee.
According to the scheme of the Act discussed above income tax has to be charged in respect of the "total (1) (1955] 86 income" of the previous year of every assessee and "total income" is defined under section 2(15) to comprise all income, profits and gains from whatever source derived subject to certain exemptions.
Chapter 3 which is entitled "Taxable income" comprises sections 6 to 17 (both sections inclusive ).
Section 6 enumerates the various heads of income, profits and gains which are chargeable to income tax.
Each of these heads of income, profits and gains is dealt with under a separate section and these sections also give the details of allowances and exemptions in regard to each different head.
The argument raised by counsel for the Revenue is that according to the decision of the Privy Council in Probhat Chandra Barua vs The King Emperor (1) section 6 is the charging section and that the words of sections 7 to 12 show that the various heads of income are mutually exclusive and items which specifically fall under these various heads have to be charged under only that head and would fall under one of these several but appropriately specific sections.
It is true that the Privy Council in Probhat Chandra Barua vs The King Emperor (supra) did point out that section 6 was a charging section, but this was because sections 3 and 4 were then differently worded as pointed out by Kania, J., in B.M. Kamdar, In re (2 ) at p. 43 and by Chagla, J., in the, same case at p. 57.
The Federal Court in Chatturam and others vs Commissioner of Income tax, Bihar(3) said: The liability to pay the tax is founded on sections 3 and 4 of the Income tax Act which are the charging sections".
The judgment of the Privy Council in Wallace Brothers & Co. Ltd. vs Commissioner of Income tax (4) also shows section 3 to be the charging section.
It is then argued that section 6 of the Act being mandatory all items of income, from whatever source they arise, would fall only under one of the heads enumerated under section 6 and therefore one of the sections 7 to 12 would specifically apply and section 8 which relates to " interest on securities" must be held to apply to income from that source.
It is also contended by counsel for the (1) (1930) L.R. 57 I.A. 228, 238.
(2) (3) , 308.
(4) 87 Revenue that even if there is any overlapping between sections 8 and 10 "interest on securities" whether accruing from securities held as a capital asset or trading assets falls under section 8 alone and section 10 should be so read as to altogether exclude the income from " interest on securities".
Counsel for the Revenue has referred us to the form of the Return, prescribed under section 22(1) of the Act at the relevant time of the assessment under review.
The heads there shown are (1) Salary, (2) Interest on securities, (3) Property, (4) Business, profession or vocation, (5) other sources, and income from each source is to be shown in a separate column, in each one of which reference is made to a particular note relevant to that head of income.
In the column under the head "interest on securities" reference is made to note 9 which is in the following words: "Interest on securities" means interest on promissory notes or bonds issued by the Government of India or any other State Government or the interest on debentures or other securities issued by or on behalf of a local authority or company.
The gross amount before deduction of income tax should be entered.
Entries under this head should be accompanied by persons paying the interest under section 18(9) of the Act.
Deductions are allowable in respect of (a) Commission charged by a banker for collecting the interest.
(b) Interest payable on money borrowed for the purpose of investment in the securities except certain interest payable to persons abroad from which tax has not been deducted (see section 8 of the Act for details).
Full particulars (in a separate statement if necessary) should be given of any deduction claimed.
" This is a statutory form and it gives what is meant by " interest on securities ", what documents are to accompany the Return in order to entitle an assessee to claim refund and what deductions are to be made.
" The mandatory character of section 6 is indicated by the language employed in that section and the phraseology of all the sections following, i.e., 7 to 12, employing the words " the tax shall be payable under 88 the head. . . . in respect of " the different and distinct heads of income, profits and gains, salaries " Interest on securities ", and "property ", business etc.
is indicative of the intention of the legislature making the various heads of income, profits and gains mutually exclusive.
So every item of income, whatever its source, would fall under one particular head and for the purpose of computing the income for charging of income tax the particular section dealing with that head will have to be looked at.
The various sources of income, profits and gains have been so classified that the items falling under those heads become chargeable under sections 7 to 12 according as they are income of which the source is "salaries ') " interest on securities property business, profession or vocation ", " other sources or " capital gains ".
Looked at thus the contention of counsel for the Revenue that under the scheme of the Act and on a true construction of these relevant sections" interest on securities " by whomsoever and for whatever purpose held has to be taxed under section 8 and under no other section is well founded and must be sustained.
It being a specific head of chargeability of tax, income from " interest on securities " whether held as a trading asset or capital asset would have to be taxed under section 8 and not under section 10 of the Act.
The amendment made in the proviso to section 8 in the year 1955 allowing a deduction in respect of any remuneration paid to any person other than the banker for realising interest on behalf of the assessee, supports this interpretation.
Thus this proviso now provides that reasonable amount can be deducted by an assessee for commission paid to a Bank or remuneration paid to anybody else for realising interest on its behalf which clearly indicates the intention of the legislature that interest on securities specifically falls under section 8 and under no other section.
This amendment shows that even a Bank, if it buys securities as a part of its trading assets, is entitled to make a deduction for remuneration paid by it to any person for realising interest which postulates that "interest on securities" would fall under s, 8 of the Act, 89 This interpretation receives further support from the language of section 18 which deals with payment after deduction at source.
Section 18(3) requires a person responsible for paying " interest on securities " to deduct income tax on the amount of the interest payable at the maximum rate and the person so responsible is required, after deduction of the income tax, to pay to the account of the Central Government within 7 days of the deduction, the sum so deducted and under section 18(5) the maximum rate is to be charged for the year in which the the amount is paid and not at the rate of the assessment year.
A combined reading of sections 3,4,6, 8,10,18 and refund section, section 48, shows that income tax is to be charged at the rate or rates prescribed in the Finance Act on the total income of the assessee as defined in section 2(15) of the Act and computed in the manner given in as. 7 to 12 which are not charging sections but are provisions for the computation of " total income ".
In the words of Viscount Dunedin in Salisbury House Estate vs Fry(1): " Now, the cardinal consideration in my judgment is that the income tax is only one tax, a tax on the income of the person whom it is sought to assess, and that the different schedules are modes in which the Statute directs this to be levied ".
As has been pointed out in that judgment there are no separate taxes under the various schedules but only one tax.
But in order to arrive at the total income on which tax is to be charged " you have to consider the nature, the constituent parts, of his (assessee 's) income to see which schedule you are to apply.
" If these words may be used with reference to the language of the Indian Act, we have to look at the source of " income, profits and gains" and then see under what head it appropriately and specifically falls and if it falls under one particular head then computation is to be made under the section which covers that particular head of income.
We cannot treat any one of the sections from sections 7 to 10 to be general or specific for the purpose of any one particular source of income.
The (1) (1930)15 T.C.266,306.
90 language shows that they are all specific and deal with the various heads in which the item of income, profits and gains in the case of an assessee falls.
Sir George Rankin in Commissioner of Income Tax vs Chunilal B. Mehta(l) said: " The effect of section 6 is to classify profits and gains, under different heads for the purpose of providing for each appropriate rules for computing the amount; its language is " shall be chargeable in the manner hereinafter appearing.
" One of the heads is " business ", which as a head of income stands alongside salaries, interest on securities, professional earnings and other sources.
True, the classification of income is according to the character of the source But the list of " heads in section 6 is a list of sources not in the sense of attributing the income to one property rather than another, one business rather than another, but only in the sense of attributing it to property as distinct from employment, or business as distinct from investment. .
What is to be learnt from an examination of the language of sub section
(1) of section 4 income, profits and gains, described or comprised in section 6 from whatever source derived is that section 6 is intended as describing different kinds of profits In that case the question for decision was whether a resident carrying on business in India and controlling transactions abroad in the course of such business was liable to income tax on such transactions, it was held that the profits arising under such transactions do not arise or accrue in India merely because of control by the assessee in India.
The judgment of the Privy Council shows what section 6 of the Act means each head refers to income, profits and gains attributable to the source salary, interest on securities, property, business, profession etc.
This supports the contention of each head being separate, exclusive and specific.
Decided cases all support the contention of counsel for the Revenue that the various heads of income enumerated in section 6 of the Act and more particularly (1) , 529. 91 dealt with in sections 7 to 12 are exclusive heads and if an item of income falls under one of these heads then it has to be treated for the purpose of income tax under that head and no other.
In Salisbury House Estate Ltd. vs Fry (1) the assessee was a limited company which was formed for the express purpose of acquiring Salisbury House and utilising it.
In this building there were 800 rooms which were let to tenants.
The company also maintained a staff of servants to render various kinds of services to the occupants of the rooms.
The company was assessed to income tax under Sch.
A upon gross valuation of the premises and as the actual rent received was higher, the Revenue wanted to assess income again under Sch.
The company contended that so far as the proceeds of the property were concerned they had already been taxed under Sch.
A and could not again be brought "in computo" under Sch.
D. Viscount Dunedin at p. 306 observed: " Now, if the income of the assessee consists in part of real property you are, under the Statute, bound to apply Sch.
Lord Atkin at p. 319 said: " the dominance of each Sch.
A, B, C & E over its 'own subject matter is confirmed by reference to the Sections and Rules which respectively regulate them in the Act of 1842.
They afford a complete code for each class of income, dealing with allowances and exemptions, with the mode of assessment, and with the officials whose duty it is to make the assessments.
. . . . . . I find no ground for assessing the taxpayer under Sch.
D for any property or gains which are the subject matter of the other specific Schedules.
" At p. 320, he pointed out that Sch.
D is a residuary Schedule and all Schedules are mutually exclusive.
Referring to investments in securities he said: Income derived by a trading company from investments of its funds, whether temporary or permanent, in government securities must be taxed under (1) ; 92 Sch.
C, and cannot for the purposes of assessment under Sch.
D be brought into account.
" This shows that even though Sch.
D is residual all Schedules are mutually exclusive and if income falls under one Schedule, it must be assessed under that Schedule because the Schedules are a complete code for each class of income, dealing with, allowances and exemptions and with the mode of assessment.
A significant passage in the judgment of Lord Atkin (at p. 321) is: " I find it difficult to say that companies which acquire and let houses for the purposes of their trade, such as breweries in respect of their tied tenants, and collieries and other large employers of labour in respect of their employees, do not let the premises as part of their operation of trading.
Personally I prefer to say that even if they do trade in letting houses their income so far as it is derived from that part of their trading must be taxed under Sch.
A and not Sch. D." Thus even though the assessee was a company carrying on business or trade, income from the head " property " was taxed under Sch.
A and not Sch.
This case supports the contention that different Schedules being distinctly applicable to each individual head of income would exclude the applicability of any other head.
In Butler vs The Mortgage Company of Egypt Ltd. (1), a British company controlled in Egypt was carrying on business of lending money on mortgage of land in Egypt or on the security of debentures by mortgage of land.
In case of default the bank could take action in the Egyptian Courts either to sell the property or to take possession with a view to future sale.
The General Commissioners held that the acceptance of ,securities for money lent was only an incident of the company 's business and that income was not assessable under Case 4 of Sch.
D. The company claimed that the assessment should be under Case 5 of Sch.
D and not Case 4.
It was held that the Crown had the right to tax under Case 4 but even if the assessee satisfies (1) , 809, 810. 93 that Case 5 is also applicable it was still for the Crown to decide and tax under Case 4 provided both cases applied equally.
Rowlatt J. said: "A banker could never ask to be repaid the tax which had been deducted from the Government securities which he held, because he held them as a banker, the point being that when you have once got a security (we will say) the interest on which is taxed by the Act, you cannot get out of it because you say that you look a little further and see this is only embedded in a business." It means in terms of the Indian Statute that in the case of interest on securities if chargeable under a specific section, the assessee even though he is a banker cannot claim that they be treated as "business income." in Thompson vs The Trust and Loan Company of Canada (1), the respondent company carried on business as a loan and finance company.
During the material years the company bought treasury bonds cum coupons and on the same day sold bonds of the same nominal value retaining the coupons and received on encashment a half year 's interest under deduction of income tax.
The Crown contended that in computing the Company 's profits for assessment to income tax under Case I of Sch.
D there, should be included, as receipts, the amounts realised by the sale of bonds ex coupons and the net proceeds of the coupons and, as disbursements, the amounts paid by the company for the bonds cum coupons.
But it was held that the interest received by the company was income of the company taxed by deduction under Sch.
C and that no part of the proceeds of the coupons should be included in the computation of the company 's liability under Sch.
D. Rowlatt J. at p. 400 said: " The Crown cannot treat a transaction which has its own character for income tax purposes as if it were something of a different character. " and Lord Hanworth M.R. at p. 406 put the matter thus: (1) 94 Now in the present case it is plain that this subject matter of tax, government bonds and coupons payable out of the government funds, have got to be taxed under Sch.
C; they cannot be taxed anywhere else.
" In Volume I of Simon 's Income Tax (1948 Ed.) p. 54 the law is thus stated: " These Schedules are prima facie mutually exclusive and consequently if a particular kind of income is charged under one Schedule the Crown cannot elect to charge it under another.
" This is in accord with the decisions discussed above.
The Commercial Properties Ltd. vs Commissioner of Income tax, Bengal(1) was a case of a registered company whose sole object was to acquire lands,, build houses and let them to tenants, the sole business of the company being the management and collection of rents from the properties.
The assessment was made under section 9 of the Act but the company claimed that they were carrying on a business assessable under section 10 and not under section 9.
The Court held that the company was rightly assessed under section 9, its income being derived from its ownership of buildings.
Rankin C. J. said at p. 26: " In my judgment the words of section 6 and section 9 and section 10 must be read so as to give some effect to the contrast that is there made between income, profits and gains from " property " and from " business " and I entirely refuse my assent to the proposition that because it happens that the owner of a property is a company which has been.
incorporated for the purpose of owning such property, therefore the income derived from " property must be regarded as income derived from business ".
In my judgment, income derived from " property is a more specific category applicable to the present case".
The decision in this case shows that the ownership of the house property was not considered as "business" and that income derived from such source would more specifically and appropriately fall within the head "property".
(1) 95 The applicability of section 8 directly arose and was discussed in H. C. Kothari v, Commissioner of Income tax, Madras(1).
The assessees in that case had several sources of income, one of which was interest on securities.
The business of the assessees showed a loss but the assessees claimed earned income relief in respect of interest on securities on the ground that securities, which they had purchased and sold as part of their business, formed their stock in trade and the interest therefrom should be treated as "business" profits.
But section 8 of the Act was held applicable to the facts of that case.
Satyanarayana Rao, J. said " of the Act which deals with interest on securities is a separate and distinct head, and if an income is chargeable under that head, it is not open either to the assessee or to the department to change the head and claim to tax it under a different head.
It was also pointed out in this judgment following Commissioner of Income_tax vs Bosotto Bros. (2) that if income falls under more than one head the assessee has the option to choose the head which makes the burden on his shoulders lighter.
The following two cases were relied upon by the assessee: (1) Mangalagiri Sri Umamaheshwara Gin and Rice Factory Ltd. vs Guntur Merchants Gin and Rice Factory Ltd. (3) where a limited company incorporated for the purpose of milling rice leased out the buildings, plant, machinery etc., to another company for a fixed annual rent.
The lessees were to do the necessary repairs to keep the mill in good working condition and the lessors were to bear the loss of depreciation.
The assessee company claimed the allowances for depreciation under section 10(2) (vi) of the Act.
It was held that the company was carrying on the business of letting a rice mill and as such was entitled to a deduction for depreciation.
The judgment of Krishnan, J., shows that it was clear from the facts of the case that the company was carrying on business (1) , 587.
(3) (2) 96 of letting the mill for the purpose of being worked by lessees and it was under these circumstances that section 10 was held applicable.
The other case is Sadhucharan Roy Chowdhry, In re (1) the facts of which were similar to the facts of Mangalagiri Sri Umamaheshwara Gin and Rice Factory Ltd. vs Guntur Merchants Gin and Rice Factory Ltd. (supra).
It was held that letting of a Jute Press at rent was as much a business as the letting of a ship to freight or letting of motor car or any other kind of machines or machinery for hire, and therefore allowances for depreciation were allowed like in Mangalagiri 's case (supra).
Neither of these cases throws any light on the question now before us.
The appellant 's contention that looking at the real nature and character of the source of income arising from "interest on securities" in the case of the present assessee, the Bank, section 10 of the Act would apply and not section 8 can receive no support from the decision in Davies vs Braithwaite (2).
That was a case where an actress earned her living by accepting and fulfilling professional engagements, her activities being acting in stage plays in England and America, performing for the films and on the wireless and performing for gramophone companies.
These were held to fall under Sch.
D and not E as whatever contracts she made were nothing but incidents in the conduct of her professional career.
The use of the following words by Sir George Rankin in Commissioner of Income tax vs Chunilal B. Metha (3): But the list of "heads" in section 6 is a list of sources not in the sense of attributing the income to . . . one business rather than another but only in the sense of attributing it to business as distinct from investment.
" is no surer foundation for saying that " interest on securities " is severable into income from securities held as a capital investment and income from those held as trading assets.
The language of sections 6, 8 and 10 is destructive of any such contention.
(1) (2) (3) [1938] 6I.T.R. 521, 529.
97 Thus on a true construction of the various sections of the Act the income of an assessee is one and the various sections 7 to 12 are modes in which the Statute directs that income tax is to be levied and these sections are mutually exclusive.
The head of income of which the source is " interest on securities " has its ' characteristics for income tax purposes and falls under the specific head covered by section 8 of the Act, and where an item falls specifically under one head it has to be charged under that head and no other.
This interpretation follows from the words used in sections 6, 8 and 10 which must be read so as to give effect to the contrast between " income, profits and gains " chargeable under the head " interest on securities " and income, profits and gains " chargeable under the head business ".
Thus on this construction the various heads of " income, profits and gains " must be held to be mutually exclusive, each head being specific to cover the item arising from a particular source.
It cannot, therefore, be said that qua the assessee in the present case and for the purpose of securities held by it, section 8 is more specific and section 10 general or vice versa, and therefore no question of the applicability of the principle " generalia specialibus non derogant " arises.
This finds support from the decided cases which have been discussed above.
Thus both on precedent and on a proper construction, the source of income " interest on securities " would fall under section 8 and not under section 10 as it is specifically made chargeable under the distinct head " interest on securities " falling under section 8 of the Act and cannot be brought under a different head even though the securities are held as a trading asset in the course of its business by a banker.
In this view of the matter no question of exercise of option by the assessee or the Revenue arises.
Consequently Lord Shaw 's observation in The Liverpool and Land Globe Insurance vs Bennett (1): " It appears to me that this selection is not only justified in law but is founded upon the soundest and most elementary principles of business," (1) , 376.
98 will be inapplicable to the facts of the present case, and so also the rule as to choosing the head which imposes on the assessee 's shoulders burden which is highter as given in Commissioner of Income tax vs Bosotto Bros., (supra) and reiterated in H. C. Kothari vs Commissioner of Income tax, Madras (supra).
To the third point raised by counsel for the assessee that even if interest on securities falls under section 8 of the Act and not under section 10 the assessee is entitled to 'Yet a set off under section 24(2) of the Act, counsel for the Revenue has taken the objection that this plea is not available to the appellant because it was not placed before the Income Tax Appellate Tribunal for being referred to the High Court nor was it raised before the High Court.
How the question was specifically raised before the Income Tax Officer and the Appellate Assist.
ant Commissioner and also before the Income Tax Appellate Tribunal has already been mentioned.
In its application to the Tribunal for stating the case to the High Court the assessee specifically raised in two suggested questions its right to set off the business loss of Rs. 3,21,929 brought forward from the previous year against the income of the assessee in the assessment year.
It does not appear from the judgment of the High Court that the question was argued in the manner it has been debated in this court.
The appellant seems to have rested his case on the applicability of section 10 to the profits under the head "interest on securities" because of the securities being trading assets but this contention was repelled and the same question has been raised before us but the assessee now supports his case on an alternative argument that even if the securities fall under section 8 still the profits from that source are from an item of the assessee 's business and therefore the loss of the previous year from the banking business of the assessee can be set off against the profits of the assessment year whatever be the source of that profit.
The case is similar to the one in Commissioner of Income tax vs Messrs. Ogale Glass Works Ltd. (1).
The question framed by the Tribunal is a general one and what is to be determined is whether (1) , 196, 198.
99 the loss of the previous year can be set off against the income of the assessment year within the provisions of section 24(2) of the Act.
The question is wide enough to cover the point raised before us.
In the circumstances of this case the third point, raised by counsel for the assessee, is open to be canvassed before us.
Counsel for the Revenue contends that the words used in section 24(2) were " the same business " and therefore this set off would be allowable only against any profits or gains of the game business and no other business.
He further contends that the scheme of section 24(1) and (2) shows that profits and gains must be arising under section 10 and not under any other section because the expression used is profits or gains which goes with " business " under section 10 and cannot have reference to income, profits and gains arising from interest on securities " which are under section 8 of the Act.
Counsel for the assessee on the other hand submits that the use of the word " same " signifies the identity of the business in which the loss has occurred and has no reference to the head under which the profits are chargeable.
In other words interest does not cease to be profits and gains of the same business merely because for the purpose of chargeability it falls under a different head, i.e., under section 8 and not under section 10.
Section 24 of the Act deals with the set off of loss in computing the aggregate income.
He also contends that the business which the assessee was carrying on was the business of dealing in money and credit and that banking and dealing in securities constitute one and the same business.
He refers to section 277 F of the Indian Companies Act and relies on the Privy Council decision in Punjab Co operative Bank Ltd. vs The, Commissioner of Income tax, Punjab(1) in which it was pointed out that in the ordinary case 'of a bank the business consists in its essence of dealing with money and credit.
The banker has always to keep enough cash or easily realisable securities to meet any probable demand by depositors, and if some of the securities are realised to meet (1) 100 withdrawals by depositors, this is clearly a normal step in carrying on the banking business.
It is an act done in what is truly carrying on of the banking business.
In view of the order we propose to make, we do not find it necessary to express any opinion on the respective contentions raised by counsel for the parties.
In Punjab Co operative Bank 's case (supra) a finding had been given that the purchase and sale of securities was as much the assessee 's business as receiving deposits from clients and withdrawals by them.
In the case before us no such finding has been given and in the absence of such finding no opinion can be given as to whether the holding of securities out of which interest was derived formed part of the same business within section 24(2) or not.
The appeal would therefore, be allowed and the case remitted to the High Court for a fresh decision of the reference after getting from the Tribunal a fuller statement of facts about this part of the case, whether the securities in question were a part of the trading assets held by the assessee in the course of its business as a banker.
The costs of this appeal will be costs in the reference before the High Court.
Appeal allowed.
Case remitted.
| The petitioner was at one time the Ruler of an erstwhile princely State which ceded to the Dominion Government in 1948.
A Jagirdar, who was the owner of a half share in a Jagir of villages contained in that princely State, became entitled to compensation for the trees standing thereon under the provisions of the Bombay Merged Territories and Areas (Jagirs Abolition) Act, 1953.
Upon an application filed by the Jagirdar, the Jagir Abolition Officer awarded Rs.18,258 as compensation for all the trees standing on the jagir and directed that half of it was payable to the Jagirdar and that the other half would go to the former Ruler.
In appeal, the Gujarat Revenue Tribunal determined the total value of all the trees at Rs.68,039, of which half was payable to the Jagirdar.
In a writ petition the High Court held on July 23, 1975 that the total market value of the trees was Rs.1,70,540 and the Jagirdar would be entitled to the half share with interest thereon from August 1, 1954.
The petitioner never made any application for compensation on the abolition of the jagir and was not a party to the proceedings before the Jagir Abolition Officer and the Gujarat Revenue Tribunal.
During the pendency of the appeal by special leave by the State in this Court the application made by the petitioner to be impleaded as a respondent was allowed.
That appeal was disposed of in view of the decision in State of Gujarat & Ors.
vs Gujarat Revenue Tribunal & Anr. 100 ; The petitioner, thereafter, unsuccessfully persisted with the State authorities for payment to him of the half share in the compensation and ultimately filed the present Miscellaneous Petition claiming a sum of Rs.4,80,487.10.
It was contended for the State that the mere fact of being impleaded as a respondent in this Court did not entitle the petitioner to any part of the compensation awarded by the High Court, that there was no adjudication that the other half share belonged to the petitioner, and that since the jagir now stood vested in the State of Gujarat, the half share passed into the ownership of the State.
Dismissing the Miscellaneous Petition, the Court ^ HELD: 1.
The order impleading the petitioner as a respondent in the appeal did not amount to adjudication on the question whether he was the owner of the other half share of the compensation.
His presence in the array of respondents could not vest any right in him to any part of the compensation, for the special leave petition was filed by the State against the order of the High Court in a writ petition preferred by the Jagirdar, to which the petitioner was not a party.
There was no adjudication by High Court on any claim of the petitioner.
The entire controversy before it was between the Jagirdar and the State.
[105B D] 2.
When the valuation of the Jagirdar 's half share was determined by the High Court, the valuation of the other half share stood automatically determined, but there was nothing in that order determining the ownership of the other half share.
[105A B] 3.
The order disposing of the appeal did not confer any right on the petitioner in respect of the compensation payable on the abolition of the jagir.
If that appeal had been allowed in terms of the relief sought by the State, it would have resulted in a reduction of the quantum of compensation awarded to the Jagirdar and had it been dismissed, the quantum of compensation determined by the High Court would have stood affirmed.
[105D E] 4.
The petitioner will have to establish his title to a half share of the compensation in some other proceedings.
[105G]
|
Civil Appeal No. 2703 of 1981.
From the Judgment and Order dated the 23rd July, 1981 of the Delhi High Court in C.W. No. 1648 of 1981.
M.K. Ramamurthi, L.C. Goyal and Ms. Sumitra Goyal for the Appellant.
Lal Narain Sinha, M.C. Bhandare and P.P. Singh for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
Failure to adjust the antena to the operative channel and dipping the head like the proverbial ostrich in the sand so as not to view the changing kaleidoscope of the law can alone be said to be responsible for this trivial matter to be brought to this Court.
Respondent is the Project & Equipment Corporation of India Ltd. ( 'Corporation ' for short) since its formation in 1971 a wholly owned subsidiary company of State Trading Corporation ( 'STC ' for short), a Government of India Undertaking upto 1976 when it was separated and since then it functions as a Government of India undertaking.
The appellant A.L. Kalra joined as Upper Division Clerk in the STC on August 6, 1963.
On November 1, 1969, he came to be promoted as Assistant and earned a further promotion on May 22, 1974 as Accountant.
On the setting up of the Corporation, the appellant exercising his option came to be transferred as Accountant to the Corporation on November 9, 1976.
Under the relevant conditions of transfer, he continued to be governed in the matter of recruitment and promotion by the relevant rules of the STC.
He was promoted in an officiating capacity as Deputy Finance Manager Grade II on June 29, 1978 and he was put on probation after being promoted as Deputy Finance Manager Grade II on regular basis effective from February 5, 1979.
The appellant applied for and obtained an advance in the amount of Rs. 16,050 for purchasing a plot of land on April 4, 1979 for which he executed the requisite agreement on April 4, 1979.
The rules under which advance was obtained are styled as 'The Project and Equipment Corporation was India Ltd. House Building Advance (Grant & Recovery) Rules for House Building Advance ' for short) framed in exercise of the powers conferred upon the Board of Directors by the Articles of Association of the Corporation.
The appellant also applied for and obtained an advance in the amount of Rs. 11,000/ for purchase of a 654 new motor cycle on July 7, 1979.
This advance is governed by what are styled as the Projects & Equipment Corporation of India Ltd. Conveyance Advance (Grant & Recovery) Rules ( 'Conveyance Advance Rules ' for short).
In respect of the house building advance according to the respondent Corporation, in view of Rule 10 (1) (c) (i) the appellant was required to utilise the amount drawn by him for the purpose for which advance was granted within two months of drawal and submit the documents evidencing the purchase of plot within the prescribed time failing which he was liable to refund at once the entire amount together with interest to the Corporation.
The agreement dated April 4, 1979 executed by the appellant also obligated him to utilise the advance for the purpose for which the same was sanctioned and to produce the sale deed for verification by the Corporation failing which the whole of the advance had to be refunded with interest.
It was alleged that the appellant neither utilised the advance for the purchase of plot nor refunded the amount despite several reminders and ultimately on November 13, 1979 a memorandum was served upon him cautioning him that if he failed to refund the entire amount forthwith, disciplinary proceedings will be initiated against him.
As the appellant failed to comply with the request made in the memorandum, his salary from November 7, 1979 as a whole was withheld for adjusting the amount of advance and the interest payable thereon.
He was also charged penal interest for the default committed by him.
In respect of the conveyance advance, which was sanctioned on July 7, 1979, the appellant is alleged to have committed a default by not purchasing the motor cycle within a period of one month as required by Rule 10 of the Conveyance Advance Rules, and on November 13, 1979 he was advised to refund the amount by November 14, 1979 failing which he was threatened with disciplinary action.
It is, however, admitted that the appellant purchased a scooter in April, 1980 and submitted the documents which appear to have been accepted by the Corporation.
The balance of advance was also refunded.
A memorandum dated July 22, 1980 was served upon the appellant stating therein that the competent authority proposes to hold an enquiry against him under Rule 27 of the Project and Equipment Corporation of India Ltd. Employees ' (Conduct, Discipline & Appeal) Rules, 1975 ( '1975 Rules ' for short).
There were 655 two heads of charges in the charge sheet drawn up against the appellant on which disciplinary enquiry was proposed to be held.
These two heads of charges read as under : "Article I Shri A.L. Kalra while functioning as Deputy Finance Manager Grade II in the Finance Division of the PEC during April, 1979 applied and drew an advance of Rs. 16,050 for purchase of a plot of land at Faridabad.
The did not furnish the relevant documents in the office nor did he refund the amount of advance to the Corporation within two months of the date of drawal of the advance as required under Rule 10 (1) (c) (i) of PEC House Building Advance (Grant and Recovery) Rules.
Shri Kalra by his above act exhibited lack of integrity and conduct unbecoming of a public servant and violated Rule 4 (1) & (iii) and Rule 5 (5) of the PEC Employees ' (Conduct, Discipline & Appeal) Rules and Rule 10 (1) (c) (i) of PEC House Building Advance (Grant & Recovery Rules and thereby committed misconduct punishable under the PEC employees (Conduct, Discipline and Appeal) Rules.
Article II Shri, A.L. Kalra drew a conveyance advance of Rs. 11,000 in July, 1979 for purchasing a motor cycle, but did not utilise the amount for the above purpose and did not furnish cash receipt etc.
evidencing purchase of the vehicle within one month as required under Rule 8 of the PEC Conveyance Advance (Grant & Recovery) Rules.
Nor did he refund the amount of advance to the Corporation as required under Rule 10 (1) ibid.
Shri A.L. Kalra by his above act exhibited lack of integrity and conduct unbecoming of a Public servant and violated Rule 4 (1) (i) & (iii) and Rule 5 (5) of PEC Employees (Conduct, Discipline & Appeal) Rules and also violated Rule 8 and Rule 10 (is of the PEC Conveyance Advance (Grant & Recovery) Rules and thereby committed misconduct punishable under the PEC Employees ' (Conduct, 656 Discipline & Appeal) Rules, 1975.
" The appellant was also asked to submit his defence statement within 10 days from the date of the receipt of the memorandum.
The appellant by his letter dated February 13, 1980 requested for extension of time to file the defence statement.
It appears that he sought further extension of time by three weeks which request was declined by the memorandum dated Feb. 23, 1980.
The Committee of Management in exercise of the powers conferred by sub rule (4) of Rule 27 of the 1975 Rules appointed Shri A.S. Nangia, Chief Marketing Manager as the Enquiry Officer to enquire into the charges against the appellant submitted on June 13, 1980 a detailed statement pointing out that the inquiry was the outcome of malice for various reasons therein mentioned and also explaining why there was delay in refunding the advances and specifically pleaded that in view of the fact that the first advance was sought to be recovered by withholding his salary and adjusting the pay towards advance and charging penal interest and in the second case by accepting the document evidencing purchase of scooter, no misconduct could be said to have been committed by the appellant and the disciplinary enquiry was uncalled for.
Various other contentions were also raised in the defence statement.
The inquiry officer conducted the enquiry in respect of the aforementioned two charges.
One U.S. Aggarwal, Finance Manager of the Corporation appeared as Presenting Officer.
The appellant conducted his own defence.
In Para 4 of his report, the Inquiry officer states that the 'preliminary hearings of the inquiry was held on 3rd and 9th April, 1980 and then inquiry was held regularly on various dates from 23rd April 1980 to 22nd May, 1980 The appellant was called upon to submit his statement of defence which he had submitted on June 30, 1980.
The findings purported to have been recorded by the inquiry officer were the subject matter of a heated debate between the parties and therefore, the report of the Inquiry Officer may be broadly scanned here.
After recapitulating in paras 1 to 4 the various stages through which the enquiry progressed, in para 5, it is stated that at the 'preliminary hearing on 3rd April, 1980, Shri A.L. Kalra, (appellant) pleaded guilty to all the charges mentioned in Annexure I and also agreed to the statement of imputation of his misconduct in support of the articles of charges framed against him. ' In part 5 (3), the inquiry officer discussed the first head of charge in respect of the 657 house building advance.
It was found as a fact that the advance was taken for the purchase of a plot and that the appellant had negotiated for a purchase of a plot from Shri J.C. Chugh who was examined as a management witness and who admitted that he waited for six months to complete the transaction but after that he disposed of the plot.
Evidence of Shri J.C. Chugh revealed that the deal was delayed because Haryana Estate Officer demanded some additional amount and there was dispute between the appellant, the vendee and J.C. Chugh, the vendor as to who should bear the extra burden.
In paragraph 5.1.4 after recapitulating the reminders sent to the appellant to refund the advance, it is observed that it is not clear from the relevant rule as to which is the competent authority to grant extension of time for utilisation of the amount.
And then in paragraph 5.1.5 he recommended that the sanction of the competent authority should be taken before granting any extension.
There ends the discussion on the charge in respect of house building advance.
The inquiry officer then proceeded to examine the second head of the charge.
After recapitulating the fact about sanction of advance and drawal of the same, it was observed that the appellant drew the advance on July 9, 1979 and on April 7, 1980 he submitted the documents such as cash receipt in respect of purchase of a scooter, insurance certificate, receipt of balance amount deposited with the cashier, original insurance policy and registration book evidencing the purchase of scooter.
It is then observed that under the relevant rules motor cycle had to be purchased within one month from the date of the drawal of the advance or else he should have obtained fresh sanction for the purchase of a scooter instead of a motor cycle.
Then comes the particular observation which may be extracted : "He (appellant) did not obtain any fresh sanction for purchase of a scooter but simply submitted the papers for regularisation of the advance and although no specific letter for sanction of the purchase of a scooter was issued by the Personnel Division yet the fact that he was asked to refund the balance amount tantamounts to agreeing defacto sanction for the purchase of the same.
" The inquiry officer then proceeds to dispose of the contention of the appellant that in other cases of similar advance and default, no action was taken but he was singled out for a harsh treatment 658 for the reasons alleged by him but with which we are not concerned at this stage.
The inquiry officer then noticed that the full salary payable every month to the appellant was stopped by the Corporation from November 16, 1979 in addition to the inquiry under which disciplinary action was proposed to be taken.
The inquiry officer concluded his report as under : "While deciding the case, the fact that the salary was stopped from 16th November, 1979 may be kept in view as this may, I feel, tantamount to double punishment.
Normally even where an employee is suspended certain amount of subsistence allowance is granted whereas in this case the salary was completely stopped and nothing has been paid since then.
" What is referred to as the report of the enquiry which is minutely scanned in the preceding paragraphs merely seems to be the record of inquiry and recapitulation of allegations and explanation.
What is styled as findings of the inquiry officer are separately filed being Annexure M to the petition.
This is a bald document of two paragraphs in which the inquiry officer records that the appellant has contravened Rule 10 (1) (c) (i) of House Building Advance Rules and has thereby committed misconduct punishable under Rule 4 (1) (iii) of 1975 Rules.
In paragraph 2, it is stated that the appellant has committed breach of Rule 8 and Rule 10 (i) of the Conveyance Advance Rules and has thereby committed misconduct punishable under Rule 4 (1) (iii) of 1975 Rules.
By what process this conclusion is reached or what evidence appealed to him is left to speculation.
The reasons in support of the conclusion are conspicuous by their absence.
The findings are the ipse dixit of the inquiry officer.
Pursuant to this report of the inquiry officer the Executive Director for and on behalf of the Committee of Management of the Corporation made an Order No. PEC.P ; 5 (8)/77 dated February 4, 1981.
The heads of charges are reproduced in paragraph 1.
Paragraphs 2 and 3 are devoted to the stages through which the enquiry progressed.
In paragraph 4, the findings unsupported by reasons are reproduced.
In paragraph 5, it is stated that the Committee of Management agrees with the findings of the inquiry officer and imposes the punishment removal from service with effect from the date of the order.
The appellant preferred an appeal to the Appellate Authority being the Board of Directors of the Corporation on February 21, 659 1981.
One Anand Krishna claiming to act for and on behalf of the Board of Directors, Appellate Authority issued memorandum dated May 21, 1981, Annexure P to the petition in which it is stated that the appeal of the appellant was considered by the Appellate Authority and after going through the records of the case, the Appellate Authority has decided to uphold the decision of the authority and to confirm the penalty of removal imposed upon him.
The salient feature which flies into the face about the findings recorded by the inquiry officer and the order by the Disciplinary Authority as well as the Appellate Authority is that none of them made a reasoned order or speaking order and their conclusions are mere ipse dixit unsupported by any analysis of the evidence or reason in support of the conclusions.
The appellant approached the High Court of Delhi under article 226 of the Constitution questioning the correctness and validity of the findings of the inquiry officer and the decision of the Disciplinary Authority as well as the Appellate Authority inter alia on the ground that the enquiry was held in violation of the principles of natural justice and the quasi judicial authority failed to give reasons in support of its order and the action taken against the appellant was per se arbitrary and in violation of article 14 and article 16 of the Constitution inasmuch as the allegations contained in the heads of charges, even if unrebutted, do not constitute a misconduct within the meaning of the expression in 1975 Rules.
In order to sustain the maintainability of the writ petition, the appellant also contended that the respondent is an instrumentality of the State and is comprehended in the expression 'other authority ' in article 12 of the Constitution.
The writ petition came up for admission before a Division Bench of the Delhi High Court.
It was dismissed in limine observing that the writ petition is not maintainable on the facts presently set out in the petition.
Hence this appeal by special leave.
In order to obtain any decision on merits, the appellant will have to clear the roadblock about the maintainability of the writ petition in the High Court.
Happily this untenable contention was not pursued in this Court.
In para 2 (vi) of the counter affidavit filed by one Mahanand Khokher on behalf of the respondents it was unambiguously stated that the 'respondent Corporation is advised not to dispute the maintainability of the petitioner 's petition as 660 regards applicability of article 12 of the Constitution. ' Further in para 5.1 of the same affidavit, it was stated that as regards the assertion of the appellant that the respondent Corporation is an instrumentality of the Central Government and hence within article 12 of the Constitution, the respondent Corporation does not dispute the same.
This admission was reiterated in para 5.2.
Further in the written submissions dated September 30, 1983 filed on behalf of the respondent, it is conceded that the respondent is a State within the meaning of article 12 for the purposes of Part III of the Constitution, with this reservation that the employees of the respondent are not members of a civil service of the Union or all India civil service or a civil service of a state or holds the civil posts under the Union or the State and therefore, would not be entitled to the protection of Part XIV of the Constitution.
This concession absolves us from the obligation to examine the status and character of the respondent Corporation to determine whether it is an instrumentality of the State and therefore, comprehended in the expression 'other authority ' in article 12 of the Constitution.
Once it is conceded that the respondent Corporation is an instrumentality of the State and is therefore, comprehended in the expression 'other authority ' in article 12 of the Constitution, it is indisputable that it is amenable to the writ jurisdiction under articles 32 and 226 of the Constitution.
Apart from the concession, the tests collated in the decision of the Constitution Bench of this Court in Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc., for determining whether a particular body is an instrumentality of the State are fully satisfied and therefore on precedent and concession it is satisfactorily established that the respondent Corporation is an instrumentality of the State within the meaning of the expression 'other authority ' under article 12 of the Constitution and amenable to the writ jurisdiction.
The writ petition filed by the appellant in the High Court was thus maintainable.
Once when in this Court it was concluded that the respondent was amenable to the writ jurisdiction of the High Court, the question arose whether the matter should be remitted to the High Court as the High Court has rejected the writ petition in limine on the ground that the respondent was not amenable to the writ jurisdiction of the High Court.
Ultimately, in order not to protract the litigation involving livelihood of the appellant, the appeal was set down for final hearing on merits.
The respondent Corporation was accordingly directed to file its affidavit as also the documents on which it seeks to rely.
The appeal was thereafter heard on merits.
661 Before we deal with the contentions raised on behalf of the appellant, it is necessary to dispose of a contention having a flavour of a preliminary objection raised by Mr. Lal Narain Sinha on behalf of the respondent Corporation.
It was urged that in the absence of any specific pleading pointing out whether any one else was either similarly situated as the appellant or dissimilarly treated the charge of discrimination cannot be entertained and no relief can be claimed on the allegation of contravention of article 14 or article 16 of the Constitution.
It was submitted that the expression discrimination imports the concept of comparison between equals and if the resultant inequality is pointed out in the treatment so meted out the charge of discrimination can be entertained and one can say that equal protection of law has been denied.
Expanding the submission, it was urged that the use of the expression 'equality ' in article 14 imports duality and comparison which is predicated upon more than one person of situation and in the absence of available material for comparison, the plea of discrimination must fail.
As a corollary, it was urged that in the absence of material for comparative evaluation not only the charge of discrimination cannot be sustained but the executive action cannot be struck down on the ground that the action is per se arbitrary.
Proceeding along, it was urged that making law is a matter of legislative policy and the degree of reasonableness in every such law is equally a matter of policy and policy of the legislature is not judicially reviewable on the specious plea that it is either arbitrary or unreasonable.
It is difficult to accept the submission that executive action which results in denial of equal protection of law or equality before law cannot be judicially reviewed nor can it be struck down on the ground of arbitrariness as being violative of article 14.
Conceding for the present purpose that legislative action follows a legislative policy and the legislative policy is not judicially reviewable, but while giving concrete shape to the legislative policy in the form of a statute, if the law violates any of the fundamental rights including article 14, the same is void to the extent as provided in article 13.
If the law is void being in violation of any of the fundamental.
rights set out in Part III of the Constitution, it cannot be shielded on the ground that it enacts a legislative policy.
Wisdom of the legislative policy may not be open to judicial review but when the wisdom takes the concrete form of law, the same must stand the test of being in tune with the fundamental rights and if it trenches upon any of the fundamental rights, it is void as ordained by article 13.
662 The scope and ambit of article 14 have been the subject matter of a catena of decisions.
One fact of article 14 which has been noticed in E.P. Rayappa vs State of Tamil Nadu & Anr.
deserves special mention because that effectively answers the contention of Mr. Sinha.
The Constitution Bench speaking through Bhagwati, J. in concurring judgment in Royappa 's case observed as under: "The basic principle which, therefore, informs both articles 14 and 16 is equality and inhibition against discrimination.
Now what is the content and reach of this great equalising principle ? It is a founding faith, to use the words of pedantic or lexicographic approach.
We cannot 'countenance any attempt to truncate its all embracing scope and meaning, for to do so would be to violate its activist magnitude.
Equality is a dynamic concept with many aspects and dimensions and it cannot be "cribbed, cabined and confined" within traditional and doctrinaire limits.
From a positivistic point of view equality is antithetic to arbitrariness.
In fact equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch.
Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is therefore violative of article 14, and if is affects any matter relating to public employment, it is also violative of article 16.
articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment.
" This view was approved by the Constitution Bench in Ajay Hasia case It thus appears well settled that article 14 strikes at arbitrariness in executive/administrative action because any action that is arbitrary must necessarily involve the negation of equality.
One need not confine the denial of equality to a comparative evaluation between two persons to arrive at a conclusion of discriminatory treatment.
An action per se arbitrary itself denies equal of protection by law.
The Constitution Bench pertinently observed in Ajay Hasia 's case and put the matter beyond controversy when it said 'wherever therefore, there is arbitrariness in State action whether it be of the legislature or of the executive or of an "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action. ' 663 This view was further elaborated and affirmed in D.S. Nakara vs Union of India.
In Maneka Gandhi vs Union of India it was observed that article 14 strikes at arbitrariness in State action and ensure fairness and equality of treatment.
It is thus too late in the day to contend that an executive action shown to be arbitrary is not either judicially reviewable or within the reach of article 14.
The contention as formulated by Mr. Sinha must accordingly be negatived.
It must be conceded in fairness to Mr. Sinha that he is right in submitting that even if the respondent Corporation is an instrumentality of the State as comprehended in article 12, yet the employees of the Corporation are not governed by Part XIV of the Constitution Could it however be said that a protection conferred by Part III on public servant is comparatively less effective than the one conferred by Part XIV ? This aspect was examined by this Court in Managing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee where O. Chinnappa Reddy, J. in a concurring judgment has spoken so eloquently about it that it deserves quotation: "I find it very hard indeed to discover any distinction, on principle, between a person directly under the employment of the Government and a person under the employment of an agency or instrumentality of the Government or a Corporation, set up under a statute or incorporated but wholly owned by the Government.
It is self evident and trite to say that the function of the State has long since ceased to be confined to the preservation of the public peace, the exaction of taxes and the defence of its frontiers.
It now the function of the State to secure 'social, economic and political justice ', to preserve 'liberty of thought, expression, belief, faith and worship ', and to ensure 'equality of status and of opportunity '.
That is the proclamation of the people in the preamble to the Constitution.
The desire to attain these objectives has necessarily resulted in intense Governmental activity in manifold ways.
Legislative and executivity have reached very far and have touched very many aspects of a citizen 's life.
The Government, directly or through the Corporations, set up by it or owned by it, now owns or manages, a large number of industries and institutions.
It is the biggest builder in the country.
Mam 664 moth and minor irrigation projects, heavy and light engineering projects, projects of various kinds are undertaken by the Government.
The Government is also the biggest trader in the country.
The State and the multitudinous agencies and Corporations set up by it are the principal purchasers of the produce and the products of our country and they control a vast and complex machinery of distribution.
The Government, its agencies and instrumentalities, Corporations, set up by the Government under statutes and Corporations incorporated under the Companies Act but owned by the Government have thus become the biggest employers in the country.
There is no good reason why, if Government is bound to observe the equality clauses of the constitution in the matter of employment and in its dealings with the employees, the Corporations set up or owned by the Government should not be equally bound and why, instead, such Corporations could become citadels of patronage and arbitrary action.
In a country like ours which teems with population, where the State, its agencies, its instrumentalities and its Corporations are the biggest employers and where millions seek employment and security, to confirm the applicability of the equality clauses of the constitution, in relation to matters of employment, strictly to direct employment under the Government is perhaps to mock at the Constitution and the people.
Some element of public employment is all that is necessary to take the employee beyond the reach of the rule which denies him access to a Court to enforce a contract of employment and denies him the protection of articles 14 and 16 of the Constitution.
After all employment in the public sector has grown to vast dimensions and employees in the public sector often discharge as onerous duties as civil servants and participate in activities vital to our country 's economy.
In growing realization of the importance of employment in the public sector, Parliament and the Legislatures of the States have declared persons in the service of local authorities, Government companies and statutory corporations as public servants and extended to them by express enactment the protection usually extended to civil servants from suits and prosecution.
It is, therefore, but right that the independence and integrity of those employed in the public sector should be secured as much as the independence and integrity of civil servants.
" 665 There fore the distinction sought to be drawn between protection of part XIV of the Constitution and Part III has no significance.
And now to the facts.
The gravamen of the two heads of charges is that the appellant is guilty of misconduct as prescribed in Rule 4 (1) (i) and (iii).
It reads as under: "4 (1) Every employee shall at all times: (i) maintain absolute integrity; (ii) _______ __________ _______ (iii) do nothing which is unbecoming of a public servant.
" Rule 5 prescribes various misconducts for which action can be taken against an employee governed by the rules.
Rule 4 bears the heading 'General '.
Rule 5 bears in the heading 'misconduct '.
The draftsmen of the 1975 Rules made a clear distinction about what would constitute misconduct.
A general expectation of a certain decent behaviour in respect of employees keeping in view Corporation culture may be a moral or ethical expectation.
Failure to keep to such high standard of moral, ethical or decrous behaviour befitting an officer of the company by itself cannot constitute misconduct unless the specific conduct falls in any of the enumerated misconduct in Rule 5.
Any attempt ' to telescope Rule 4 into Rule 5 must be looked upon with apprehension because Rule 4 is vague and of a general nature and what is unbecoming of a public servant may vary with individuals and expose employees to vagaries of subjective evaluation.
What in a given context would constitute conduct unbecoming of a public servant to be treated as misconduct would expose a grey area hot amenable to objective evaluation.
Where misconduct when proved entails penal consequences, it is obligatory on the employer to specify and if necessary define it with precision and accuracy so that any ex post facto interpretation of some incident may not be camouflages as misconduct.
It is not necessary to dilate on this point in view of a recent decision of this Court in M/s Glaxo Laboratories (I) Ltd. vs Presiding officer, Labour Court, Meerut & Others where this Court held that 'everything which is required to be prescribed has to be prescribed with precision and no argument can be entertained that something not prescribed can yet be taken 666 into account as varying what is prescribed.
In short it cannot be left to the vagaries of management to say ex post facto that some acts of omission or commission nowhere found to be enumerated in the relevant standing or is nonetheless a misconduct not strictly falling within the enumerated misconduct in the relevant standing order but yet a misconduct for the purpose of imposing a penalty. ' Rule 4 styled as 'General ' specifies a norm of behaviour but does not specify that its violation will constitute misconduct.
In Rule 5, it is nowhere stated that anything violative of Rule 4 would be per as a misconduct in the sub clauses of Rule 5 which specifies misconduct.
It would therefore appear that even if the facts alleged in two heads of charges are accepted as wholly proved, yet that would not constitute misconduct as prescribed in Rule 5 and no penalty can be imposed for such conduct.
It may as well be mentioned that Rule 25 which prescribes penalties specifically provides that any of the penalties therein mentioned can be imposed on an employee for misconduct committed by him.
Rule 4 does not specify a misconduct.
Mr. Ramamurthi, learned counsel for the appellant further contended that the very initiation of the disciplinary enquiry and imposition of punishment of removal from service is thoroughly arbitrary and discloses a vindictive attitude on the part of the respondent Corporation.
It was urged that the two heads of charges per se do not constitute any misconduct and they can be styled as trumped up which even if held approved would not render the appellant liable for any punishment.
The two heads of charges have been extracted hereinbefore.
Charge No. 1 refers to the drawal of a House Building Advance and failure to comply with the requisite rules prescribed for House Building Advance.
According to the finding recorded by the inquiry officer, the failure of the appellant to refund the amount of advance to the respondent Corporation within two months of the date of the drawal would be violative of Rule 10 (I) (c) (i) of the House Building Advance Rules and it would constitute misconduct within the meaning of the expression in Rule 4(1) (iii) of 1975 Rules.
Rule 10 (I) provides that the advance shall be drawn in instalments as prescribed in various sub clauses.
The relevant sub clause in this case is sub cl.
(C) which provides that "when advance is required partly for purchase of land and partly for constructing a single storeyed new house thereon; (i) not more than 20% of the sanctioned advance on execution by the applicant employees an agreement in the required form for repayment of the advance.
The amount will be payable to the applicant only for purchasing a 667 developed plot of land on which construction can commence immediately and sale deed in respect thereof be produced for the inspection of CPM/RM within two months of the date on which 20% of the advance is drawn or within such further time as the CPM/RM may allow in this behalf failing which the employee shall be liable to refund at once the entire amount to the Corporation together with interest thereon.
" A bare reading of the relevant rule will show that in provides for obtaining advance which in this case was taken for purchasing a plot.
The inquiry officer accepts the evidence of Mr. Chugh that the appellant had negotiated with him for purchase of a plot but some dispute arose about some additional expenditure and the negotiations protracted over a period of six months.
Now para 1 sub cl.(C) confers on CPM/RM power to extend the time for finalising the deal or call upon the employee to refund the entire amount and he is liable to pay interest thereon.
This is the only consequence of taking advance and failure to keep to the time schedule.
The relevant rule is a self contained provision providing for the condition for grant of advance, time table for repayment and consequence of failure to keep to the time schedule.
The House Building Advance was drawn on April 4, 1979.
On November 13, 1979 the appellant was asked to refund the entire amount.
Immediately on November 16, 1979, an order was made withholding the entire salary of the appellant.
Even the inquiry officer was constrained to observe that the appellant was exposed to double jeopardy inasmuch as his salary as a whole was withheld and he was being removed from service.
It is also pertinent to note that the inquiry officer is not clear when he said 'that once the power to extend the time to repay the advance is conferred and penal interest is charged, is any rule violated. ' This is not an attempt to re appreciate evidence in the case but the entire thing is being analysed to point out that the action apart from being arbitrary is motivated and unjust.
If the rules for granting the advance themselves provided the consequence of the breach of conditions, it would be idle to go in search of any other consequence by initiating any disciplinary action in that behalf unless the 1975 Rules specifically incorporate a rule that the breach of House Building Advance Rules would by itself constitute a misconduct.
That is not the case here as will be presently pointed out.
Seeking advance and granting the same under relevant rules, is at best a loan transaction.
The transaction may itself provide for 668 repayment and the consequence of failure to repay or to abide by the rules.
That has been done in this case.
Any attempt to go in search of a possible other consequence of breach of contract itself appears to be arbitrary and even motivated.
However, the more serious infirmity in framing this head of charge is that according to the inquiry officer this failure to refund the advance within the time frame in which it was sanctioned constitutes violation of Rule 4 (1) (iii).
Let us turn to the charge sheet drawn up against the appellant.
Under the first head of charge it was stated that the appellant was guilty of misconduct as prescribed in Rule 4 (1) (i) and (iii).
Rule 4 (1) (i) provides that every employee shall at all times maintain absolute integrity.
How did the question of integrity arise passes comprehension.
The appellant applied for House Building Advance.
Inquiry officer says that the appellant had negotiated with Mr. Chugh for purchase of a plot.
There is not even negative evidence or evidence which may permit an inference that the house building advance was utilised for a purpose other than for which it was granted.
Therefore Rule 4 (1) (i) is not only attracted but no attempt was made before us to sustain it.
And as far as Rule 4 (1) (iii) is concerned, we fail to see how an advance not refunded in time where it was recovered by withholding the salary of a highly placed officer discloses a conduct unbecoming of a public servant.
Therefore, the first head of charge is an eye wash.
It does not constitute a misconduct if it can be said to be one even if it remains unrebutted.
The inquiry officer has not said one word how the uncontroverted facts constitute a conduct unbecoming of a public servant, or he failed to maintain absolute integrity.
Turning to the second head of charge, it is alleged that the appellant applied for and obtained a conveyance allowance of Rs. 11,000 on July 7,1979 but did not utilise the amount for the purpose for which it was granted and did not furnish cash receipt evidencing purchase of a vehicle within one month as required by Rule 8 of the Conveyance Advance Rules, nor did he refund the amount to the Corporation as required by Rule 10 (I).
It is not in dispute that the respondent applied for a motor cycle advance which was sanctioned and on being sanctioned he drew the same on July 9, 1979.
As required by the respondent, the appellant executed an agreement on July 6, 1979, a day preceding the sanction of the advance guaranteeing that if the motor cycle was not purchased and hypothecated within one month from the date of the drawal of the 669 advance, the whole of the advance together with the interest accrued thereon would become refundable.
As the appellant did not keep to the time schedule, memos dated August 20, September 24, November 12 and November 13, 1979 were served upon him calling upon him to either furnish the requisite documents or to refund the advance latest by November 14, 1979.
The inquiry officer in this connection, recapitulated the facts in paragraphs 5.2.
5.2.1, and 5.2.2.
Then he proceeded to record a finding that the appellant on April, 7, 1980 submitted the documents namely cash receipt in respect of purchase of a scooter, insurance certificate, receipt showing deposit of the balance of advance with cashier, original insurance policy and registration book for purchase of the scooter.
The report does not show the date of purchase which could have been ascertained with certainty from the insurance certificate as well as the cash receipt.
After recapitulating these undisputed facts, he stated that the fact that 'he (appellant) was asked to refund the balance amount tantamount to agreeing de facto sanction for the purchase of the same (scooter) '.
In the last paragraph, he has stated that a stoppage of the salary effective from November 16, 1979 in the opinion of the inquiry officer tantamounts to imposition of double punishments and this is compounded by not paying even a subsistence allowance.
We scanned the report minutely with the able assistance of the learned counsel for the respondent subjecting it to microscopic analysis to ascertain whether the inquiry officer recorded any finding in respect of this charge adverse to the appellant.
We found none.
On the contrary, a comprehensive reading of the report clearly indicates that the inquiry officer was satisfied that the delay in submitting the documents and purchasing a scooter instead of a motor cycle should not have been visited with such drastic punishment of stoppage of salary altogether and yet compelling the appellant to render service without quid pro quo.
Curiously, however, in a separate document recorded as finding, the inquiry officer has held that the appellant contravened Rule 10 (I) of the Conveyance Advance Rules which would constitute misconduct within the meaning of the expression in Rule 4 (I) (iii) of the 1975 Rules.
The report and the findings are wholly irreconcilable and left us guessing about the approach of the inquiry officer, his conclusion and his finding.
This aspect considerably troubled us because we would presently point out that the disciplinary Authority as well as the appellate authority have declined a peep into the working of their minds by making a reasoned or a speaking order.
The appellant appears to us to have been convicted sub silencio.
670 The first question we must pose to ourselves is whether taking the findings of facts as recorded by the inquiry officer and accepting for the present purpose that they are not open to a judicial review, do they constitute misconduct so as to invite penalty ? According to the inquiry officer, failure either to produce the documents or to refund the amount within a period of one month from the drawal of the conveyance advance constitutes contravention of Rule 10 (I) of the Conveyance Advance Rules.
Rule 10 reads as under: "10.
Where an employee after taking advance is unable to purchase the vehicle for any reason, he shall refund within one month of drawal of advance the full amount with interest thereon to the Corporation.
If he fails to do so, he shall be liable to disciplinary action for misconduct in addition to liability for payment of additional interest in accordance with Sub Rule (2).
(2) Where an amount of advance is retained by an employee beyond one month or where the employee fails to produce evidence of purchase, insurance policy of registration book, the normal rate of interest under Rule 5 will be charged for the first month and for the period in excess of one month in addition to the normal rate of interest, additional interest at a rate equivalent to difference between the borrowing rate of the Corporation and the normal rate chargeable under Rule 5 will be charged.
The additional rate of interest will be compound interest and it will be merged with the principal at monthly intervals for the purpose of calculating interest for subsequent periods.
" In this connection, our attention was drawn to Circular dated December 11, 1979 issued by the respondent Corporation which provides that henceforth a penal interest will be levied/charged 'on the total drawn amount under the Conveyance Advance Rules in cash vouchers or receipts are not produced to the Personnel Division within the prescribed period, or in case the amount drawn is refunded without utilisation. ' It thus transpires that drawal of the advance, if not utilised within the prescribed period or if not refunded within the same time, will expose the drawer to a liability to penal interest.
And in this case, it has been so charged.
Now if what is alleged as misconduct does not constitute misconduct not by analysis or appraisal of evidence, but per se under 1975 671 Rules the respondent had neither the authority nor the jurisdiction nor the power to impose any penalty for the alleged misconduct.
An administrative authority who purports to act by its regulation must be held bound by the regulation. 'Even if these regulations have no force of law the employment under these corporations is public employment, and therefore an employee would get a status which would enable him to obtain a declaration for continuance in service, if he was dismissed or discharged contrary to the regulations. ' [Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghuvanshi and Anr.] If thus it is satisfactorily established that the employment under such Corporation like the respondent which is an instrumentality of the State, is public employment it is difficult to entertain the submission of Mr. Sinha which did prevail for some time in the days gone by that contract of public service cannot be specifically enforced.
Mr. Sinha in this connection relied upon Sec.
14 of the and urged that where the origin of employment is in a contract the breach of it cannot be remedied by directing specific performance of a contract of personal service.
He also drew our attention to Western India Automobile Association vs Industrial Tribunal, Bombay and Ors.
Where a Constitution Bench of this Court has observed as under: "It is true that this Tribunal can do what no Court can, namely, add to or alter the terms or conditions of the contract of service.
Express power to do so is given by the regulation, while there are no words conferring a power to reinstate or revive a contract lawfully determined.
" Reference was also made to Dr. S.B. Dutt vs University of Delhi wherein it was held that an arbitrator appointed by the parties and functioning under the cannot by his award enforce a contract of personal service in contravention of the provisions of the and this discloses an error apparent on the face of the award.
But neither Sec. 14 nor the aforementioned two decisions can render any assistance to the respondent because it is well settled that in the matter of public employment if the termina 672 tion is held to be bad, in view of the latest decisions in Sukhdev Singh and Uttar Pradesh Warehousing Corporation 's cases a declaration can be granted that the man continues to be in service.
Mr. Ramamurthi on behalf of the appellant further contended that the order of removal from service is void as it is passed in violation of the principles of natural justice and at any rate an order imposing penalty by a quasi judicial tribunal must be supported by reasons in support of its conclusions.
It was urged that duty to give reasons would permit the court hearing a petition for a writ of certiorari to ex facie ascertain whether there is any error apparent on the record.) It was conceded that for the present submission adequacy or sufficiency of reasons is not questioned.
What is contended is that the inquiry officer has merely recorded his ipse dixit and no reasons are assigned in support of the findings.
The mental process is conspicuously silent.
A speaking order will at its best be reasonable and at its worst be at least a plausible one (M.P. Industries Ltd. vs Union of India & Others).
What prevents the authority authorised to impose penalty from giving reasons ? If reasons for an order are given, there will be less scope for arbitrary or partial exercise of power and the orders ex facie will indicate whether extraneous circumstances were taken into consideration by authority passing the order.
This view in Vedachala Mudaliar vs State of Madras was approved by this Court in Bhagat Raja vs Union of India and Others.
As pointed out earlier, the findings of the inquiry officer are merely his ipse dixit.
No reasons are assigned for reaching the finding and while recapitulating evidence self contradictory position were adopted that either there was no misconduct or there was some misconduct or double punishment was already imposed.
Rule 27 (19) casts an obligation upon the inquiry officer at the conclusion of the inquiry to prepare a report which must inter alia include the findings on each article of charge and the reasons therefor.
The report is prepared in contravention of the aforementioned rule.
The situation is further compounded by the fact that the disciplinary authority which is none other than Committee of Management of the Corporation while accepting the report of the inquiry officer which itself was defective did not assign any reasons for accepting the report of the inquiry officer.
After reproducing the findings of the 673 inquiry officer, it is stated that the Committee of Management agrees with the same.
It is even difficult to make out how the Committee of Management agreed with the observations of the inquiry officer because at one stage while recapitulating the evidence the inquiry officer unmistakably observed that appellant was subjected to double punishment and at other.
place, it was observed that granting extension of time and acceptance of documents and balance advance would tantamount to extending the time which would make the affair look wholly innocuous.
This shows utter non application of mind of the Disciplinary Authority and the order is vitiated.
A detailed appeal was submitted by the appellant to the Board of Directors running into about 8 pages.
The only order while dismissing the appeal brought to our notice is a communication by a gentleman Anand Krishna whose authority and designation are not stated, but who purported to act on behalf of the Board of Directors, that the appellate authority, after going through the records of the case, has decided to uphold the decision of the disciplinary authority and to confirm the penalty of removal from service imposed upon the appellant.
Rule 35 of 1975 Rules deals with appeals.
Sub rule (ii) of Rule 35 provides amongst others that the Appellate Authority shall consider whether the findings are justified or whether the penalty is excessive or inadequate and pass appropriate orders within three months of the date of appeal.
In order to ascertain whether the rule is complied with, the order of the appellate authority must show that it took into consideration the findings the quantum of penalty and other relevant considerations.
There is no material for showing that the appellate authority acted in consonance with its obligation under Rule 35.
However, in para 5.14 to 17 of the counter affidavit, it was stated that 'full inquiry report with annexure can be shown to the court at the time of hearing, if desired. ' If the respondent was anxious to sustain its action, it was obligatory upon it to disclose the full inquiry report.
Nothing was shown to us nor any attempt to show the proceedings of the appellate authority to disabuse our mind that the appellate authority was guilty of utter non application of mind and discharged its duty under Rule 35.
No attempt was made to urge that the three authorities had ever assigned reasons in support of their conclusions.
For this additional reason also, the initial order of the Disciplinary Authority as well as the Appellate Authority are liable to quashed and set aside.
To sum up the order of removal passed by Disciplinary Authority is illegal and invalid for the reasons:(i) that the action is thoroughly arbitrary and is violative of article 14, (ii) that the alleged 674 misconduct does not constitute misconduct within the 1975 Rules; (iii) that the inquiry officer himself found that punishment was already imposed for the alleged misconduct by withholding the salary and the appellant could not be exposed to double jeopardy; and (iv) that the findings of the inquiry officer are unsupported by reasons and the order of the Disciplinary Authority as well as the Appellate Authority suffer from the same vice.
Therefore, the order of removal from service as well as the appellate order are quashed and set aside.
The last question then is to what relief the appellant is entitled ? Once the order of removal from service is held to be illegal and invalid and the appellant being in public employment, the necessary declaration must follow that he continues to be in service uninterruptedly.
This aspect does, not present any difficult and the declaration is hereby granted.
When removal from service is held to be illegal and invalid, the next question is whether: the victim of such action is entitled to backwages.
Ordinarily, it is well settled that if termination of service is held to be bad, no other punishment in the guise of denial of back wages can be imposed and therefore, it must as a necessary corollary follow that he will be entitled to all the back wages on the footing that he has continued to be in service uninterruptedly.
But it was pointed out in this case that the appellant was employed as Factory Manager by M/s KDR Woollen Mills, A 90, Wazirpur Industrial Area, Delhi from where he resigned with effect from August 8, 1983.
It was also submitted that he was drawing a salary of Rs. 2500 per month.
Now if the appellant had procured an alternative employment, he would not be entitled to wages and salary from the respondent.
But it is equally true that an employee depending on salary for his survival when he is exposed.
to the vagaries of the court litigation cannot hold on to a slender distant hope of judicial process coming to his rescue and not try to survive by accepting an alternative employment, a hope which may turn out to be a mirage.
Therefore, the appellant was perfectly justified in procuring an alternative employment in order to keep his body and soul together as also to bear the expenses of litigation to vindicate his honour, integrity and character.
The submission of the respondent that the appellant had accepted employment with M/s KDR Woollen Mills may be accepted in view of the evidence tendered in the case.
Therefore, the appellant would not be entitled to salary for the period he was employed with M/s KDR Woollen Mills.
675 Even for the rest of the period, the conduct of the appellant cannot be said to be entirely in consonance with corporate culture.
As a highly placed officer he was bound to strengthen the corporate culture and he should have acted within the spirit of the regulations both for house building advance and conveyance advance, which are devised to help the employees.
There has been lapse in totally complying with these regulations by the appellant though it neither constitutes misconduct to attract a penalty nor substantially good enough for initiation of disciplinary inquiry.
Accordingly, having regard to all the aspects of the case, the appellant should be paid 50% of the back wages for the period since his removal from service upto his reinstatement excluding the period for which he had procured an alternative employment.
The respondent shall also pay the costs of the appellant quantified at Rs. 3000.
S.R. Appeal allowed.
| There were 464 workmen designated as handling Mazdoors for handling foodgrains at Siliguri Depot set up by the respondent Food Corporation of India in West Bengal.
Prior to January 2, 1973, the work of handling foodgrains at the said depot was entrusted by the respondent to a contractor who used to engage workmen and the workmen received their salaries or wages or remuneration from the contractor as determined by the contractor or as agreed between the Contractor and the workmen.
The respondent introduced direct payment system with effect from January 2, 1973 pursuant to an agreement arrived at between the parties and the intermediary contractor disappeared from the picture.
The method adopted was that the bills for the piece rate wages payable to handling Mazdoors were prepared by the Depot staff.
The work rendered by each workmen had to be entered into a muster roll register.
The respondent Corporation distributed the wages calculated on piece rate to each workman through Sardars/Mondals and each workman was required to be a party to the acquittance roll to be retained by the respondent.
The Sardars Mondals used to accept payment and sign bills on behalf of the aforesaid workmen.
The respondent changed this method of direct payment with effect from March 10, 1975 superseding the direct payment system and reintroducing contractor system and that too without giving any notice of change to the Workmen 's Union appellant herein as contemplated by section 9(A) of the (I.D. Act, for short) Consequently the respondent discontinued employment of the aforesaid 464 workmen and brought in the intermediary contractor and treated the workmen as the workmen employed by the contractor.
The appellant Union raised an industrial dispute as to whether the discontinuance of employment of 464 workers of their Siliguri Depot w.e f. 21st July 1974 by the respondent is lawful and justified and the same was referred to the tribunal which negatived the claim of the appellant union and held that the discontinuance of contractor system in the year 1973 and 1066 introduction a direct payment system did not bring about any change in the status of the workmen and therefore they never became the workmen of the respondent Corporation.
As a corollary, it further held that reintroduction of the contractor system in 1975 did not constitute discontinuance of the services of the affected workmen.
Hence this appeal by special leave.
The appellant Union contended (i) that oven though the workmen were initially engaged by the contractor when the work of handling food grains brought to Siliguri Depot was entrusted to a contractor, but subsequently at least from April 1973, the intermediary contractor was removed and they became the workmen directly employed by the Corporation and wore therefore, the workmen of the respondent; and unless their services were legally terminated, they cannot be discontinued from service of the Corporation and some other master imposed upon them.
(ii) that apart from being an unfair labour practice, the changeover was illegal and vindictive and malicious in character and that the respondent was legally bound to give a notice of the said change to the Union as contemplated section 9A of the I.D. Act.
On the other hand, the respondent Corporation argued (i) that even when the so called direct payment system was introduced after removing the contractor.
it was basically a spill over of the old contract system save and accept that the contractor was replaced by Sardars/Mondals to whom total payment on piece rate was made and who distributed the wages to the individual workmen, the rate of payment remaining the same as was in vogue at the time the contractor handled the work and therefore at no point of time, the concerned workman ever became the direct workmen of the Corporation and no question of giving a notice of change arose as required by section 9(A) of the I.D. Act Allowing the appeal, ^ HELD: (1) 'Workmen ' has been defined in the Industrial disputes Act to mean any person (including an apprentice) employed in any industry to do. ".
The expression employed has at least two known connotations but as used in the definition, the context would indicate that it is used in the sense of a relationship brought about by express or implied 1 ' contract of service in which the employee renders service for which he is engaged by the employer and the latter agrees to pay him in cash or kind as agreed between them or statutorily prescribed.
It discloses a relationship of command and obedience.
The essential condition of a person being a workman within the terms of the definition is that he should be employed to do the work in that industry and that there should be, in other words, an employment of his by the employer and that there should be a relationship between the employer and him as between employer and employee or master and servant.
Unless a Person is thus employed there can be no question of his being a 'workman ' within the definition of the term as contained in the I.D. Act.
[1075F H; 1076A B] Dharangadhara Chemical Works Ltd. vs State of Saurashtra, [l957] SCR 152; referred to.
1067 (2) No employer since the introduction of the I.D. Act, 1947 and A contrary to its Certified Standing Orders as statutorily required to be drawn up under the can dispense with the service of any workman without complying with the law in force Any termination of service contrary to the provisions of the Standing orders and the provisions of the I.D. Act, 1947 would be void.
It is not necessary to call in aid precedents to substantiate this too obvious and well established proposition.
Section 9A also makes it obligatory upon an employer who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule to give a notice of desired or intended change.
It cannot do so without giving to the workman likely to be affected by the change a notice in the prescribed manner of the nature of the change proposed to be effected and within 21 days of giving such notice.
[1080B C;1082H;1083A B] 3(i) It is nowhere suggested that Sardars/Mondals were contractors.
They were merely the agents of the Corporation for distributing the salary/ wages earned by each workman as set out in the register to be maintained in respect of each workman by his name and the wages earned by him at the piece rate.
Once the rate remained unchanged even after the removal Of the contractor, the qualitative change in the position of workmen consequently would be, that the workmen 's earnings at piece rate accelerated upward because the contractor 's commission whatever he retained unto himself became available to the workmen and they benefitted Therefore, the abolition of the contract system and the introduction of direct payment system brought about a basic qualitative change in the relationship between the Corporation and the workmen engaged for handling foodgrains in that on the disappearance of the intermediary contractor, a direct relationship of master and servant came into existence between the contractor and the workmen .
[ 1078D G] 3(ii) Moreover, it was obligatory for the Corporation to arrange for handling the bags of foodgrains.
The workmen handled the foodgrains for the Corporation and none else For this service rendered, the Corporation agreed to pay and paid wages at piece rate to each workman whose name appeared in the register to be maintained for the purpose as per the directions given by the District Manager.
If the pay packets were actually distributed by Sardars/Mondals, they can be said to be doing clerical work on behalf of the Corporation in the same manner as a clerk in the Accounts Department prepares and distributes pay packets for each employee of the Corporation month to month.
If the clerk cannot be said to be the employer, ipso facto the Sardars/Mondals could not be clothed with the status of the replaced contractor.
The intermediary screen having disappeared, the direct relationship came into existence and the conclusion is inescapable that since the introduction of the direct payment system, the workmen became the workmen of the Corporation and a direct master servant relationship came into existence.
[1079A C] 3(iii) The findings of the tribunal when it observed something contrary to record that the contractor system was not discontinued but it 1068 was really snatched away by the Mazdoors from the contractor apart from being perverse is contrary to record and overlooks two important letters dated January l8, 1973 and April 28, 1977 by which the Union and the Managing Director respectively affirmed the voluntary settlement arrived at between the parties, both for abolishing the contract system and introducing the direct payment system.
The tribunal feel into a serious error in overlooking relevant evidence and drawing surmises contrary to the record.
Therefore, the award of the Tribunal rejecting the reference and denying the benefit must be quashed and set aside and an award be made that the aforementioned 464 workmen who had become the workmen of the Corporation continued to be the workmen employed by the Corporation and shall be entitled to all the rights, liabilities, obligations and duties as prescribed for the workmen by the Corporation.
[1019D E; 1083G H] (4) When workmen working under an employer are told that they have ceased to be the workmen of that employer, and have become work men of another employer namely, the contractor in this case, in legal parlance such an act of the first employer constitutes discharge, termination of service or retrenchment by whatsoever name called and a fresh employment by another employer namely, the contractor.
If the termination of service by the first employer is contrary to the well established legal position the effect of the employment by the second employer is wholly irrelevant.
No attempt was made to justify the termination of service of the aforementioned workers of the Corporation by the subtle device of introducing a contractor so as to briny about a cessation of contract of employment between the workmen and the Corporation and a fresh contract of employment between the workmen and the contractor.
If what was intended to be done was retrenchment, ex facie the action is contrary to the provisions of Sec.
25F of the I Act, 1947.
Viewed from either angle, the action of introducing so as to displace the Contract of service between the Corporation and the workmen would be illegal and invalid and ab initio void and such action would not alter, change or have any effect on the status of the afore mentioned 464 workmen who have become the workmen of the Corporation.
[1080C F] (5) If the workmen likely to be affected by the change are persons to whom the Fundamental and Supplementary Rules, Civil Services (Classification, Control and appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules, Civil Service Regulations, Civilians in Defence Services (Classification Control and Appeal) Rules or the Indian Railway Establishment Code or any other rules or regulations that may be notified in this behalf by the appropriate Government in the Official Gazette, apply no notice of change would be necessary before effecting a change.
No attempt was made on behalf of the respondent Corporation to urge that any of the aforementioned rules would govern the conditions of service of the workmen involved in the dispute Now after introducing the direct payment system agreed to between the parties, if the Corporation of the employer wanted to introduce a change in respect of any of the matters set out in Fourth Schedule.
it was obligatory to give a notice of change.
Item 1 in the Fourth Schedule provides: 'wages, including the period and 1069 mode of payment '.
By cancelling the direct payment system and introducing the contractor, both the wages and the mode of payment are being altered to the disadvantage of the workmen.
Therefore, obviously a notice of change was must before introducing the change, otherwise it would be an illegal change.
Any such illegal change invites a penalty under Sec. 31 (2) of the I.D. Act, 1947.
Such a chance which is punishable as a criminal offence would obviously be an illegal change it must be held that without anything more such an illegal change would be wholly ineffective.
[1083C P] (6) The Food Corporation of India was set up under the The scheme of the would not permit the Corporation an instrumentality of the State, to act in a manner thoroughly arbitrary by first keeping a contractor, removing him and reinducting him without a semblance of consideration for the fate of the working for it or for its benefit or for some world connected with the functions of the Corporation.
Therefore, the scheme of the Act has hardly any relevance save and except that its action is likely to be struck down as arbitrary being violative of article 14, but it is not necessary to go so for because the relief under the is readily available to the workmen.
While the trend is in the direction of abolition of contract labour, this public sector undertaking appears to be completely oblivious to the trend and the pace setter as enacted by the Parliament in the .
The Act was enacted with a view to abolishing wherever possible or practicable, the employment of contract labour.
The Corporation attempted by its action to reverse that trend which does not credit to it.
Where the law helps, such anti labour practices must be thwarted or nipped in the bud [1081G H;1082C D]
|
ivil Appeal No. 2588 of 1966.
Appeal from the judgment and decree dated January 14, 1964 of the Patna High Court in First Appeal No. 572 of 1958.
D. Goburdhun and R. Goburdhun, for the appellants.
A. N. Sinha and P. K. Mukherjee, for respondent No. 1.
640 The Judgment of the Court was delivered by Mitter, J.
The only question involved in this appeal is, whether the direction of the High Court that the partition suit launched in 1943 should be allowed to proceed in view of the provisions of section 6 of the Bihar Land Reforms Act, 1950 which came into force on 25th September, 1950, is correct.
The suit had a chequered career.
It was instituted against a number of persons the main relief asked for being partition of four annas Milkiat interest in Touzi No. 702, Tappa Haveli, Pargana Maheshi, District Champaran, Bihar.
The Subordinate Judge of Motihari made a preliminary decree for partition declaring the first respondent 's share in the property as claimed by him.
The High Court in appeal modified the decree reducing the plaintiff 's share to Rs. 0 1 4 interest only.
In further appeal to these Court the trial court 's preliminary decree was upheld on 5th ,October 1953.
In the meanwhile the Bihar Land Reforms Act of 1950 effecting far reaching changes in the incidents of land tenure and land holdings had been passed.
The first appellant made an application to the trial court in June 1958 prayina that the proceedings for final decree be treated as having abated in view of the vesting of all estates in land in the State of Bihar.
This was accepted by the Subordinate Judge by an order dated July 12, 1958.
The High Court allowed the appeal with the direction above mentioned which the appellants now seek to have set.
aside.
The bone of contention between the parties is the extensive "bakasht ' lands in the aforesaid Mouza.
The appellants contend that under section 6 (1) of the Act all these lands vested in the State and came to be held by the persons in "khas possession" thereof as raiyats under the State.
To appreciate the plea it is necessary to make a brief reference to some of the provisions of the Act.
As is well known the object of the Act was to cause transference to the State of the interest of proprietors and tenure holders in land as also of the mortgagees and lessees of such interests including interests in trees, forests, fisheries, jalkars, ferries, hats, bazars, mines and minerals and to provide for certain consequences following there from and connected therewith.
section 3 of the Act ,enabled the State Government to declare by notification that the estates or tenures of a proprietor or tenure holder specified therein 'would pass to and become vested in the State.
The consequences ,of such vesting are set forth in section 4.
Under cl.
(a) : "Such estate or tenure including the interests of the proprietor or tenure holder in any building or part of a building comprised in such estate or tenure and used 641 primarily as office or cutchery for the collection of rent of such estate or tenure, and his interest in trees, forests, fisheries, jalkars, sairati interest as also his interest in all sub soil including any rights in mines and minerals whether discovered or undiscovered, or whether being worked or not, inclusive of such rights of a lessee of mines and minerals, comprised in such estate or tenure (other than the interests of raiyats or under raiyats) shall, with effect from the date of vesting, vest absolutely in the State free from all encumbrances and such proprietor or tenure holder shall cease to have any interest in such estate or tenure, other than the interests expressly saved by or under the provisions of the Act.
" section 6 of the Act provides for such saving and the relevant portion thereof runs as follows "(1) On and from the date of vesting all lands used for agricultural or horticultural purposes, which were in khas possession of an intermediary on the date of such vesting, including (a) (i) proprietor 's private lands let out under a lease for a term of years or under a lease from year to year. . . (ii) landlords privileged lands let out under a registered lease for a term exceeding one year or under ,a lease, written or oral, for, a period of one year or less, referred to in section 43 of the Chota Nagpur Tenancy Act, 1908, (b) lands used for agricultural or horticultural purposes and held in the direct possession of a temporary lessee of an estate or tenure and cultivated by himself with his own stock or by his own servants or by hired labour or with hired stock, and (c) lands used for agricultural or horticultural purposes forming ' the subject matter of a subsisting mortgage on the redemption of which the intermediary is entitled to recover khas possession thereof; shall. . . be deemed to be settled by the State with such intermediary and he shall be entitled to retain possession thereof and hold them as a raiyat under the State having occupying rights in respect of such lands subject to the payment of such fair and equit able rent as may be determined by the Collector in the prescribed manner.
642 The broad proposition which was advanced before the High Court and rejected by it and reiterated before us is that the consequence of section 6, was to put an end to the character of the possession of the bakasht lands to the malik by causing them to vest in the State and simultaneously creating a tenancy in favour of the person in khas possession thereof.
There is no dispute that bakasht lands fall under categories (b) and (c).
We are not here concerned with category (c) and have quoted it to appreciate some decisions relied on where there are references to that category.
This question has engaged the attention of the Patna High Court more than once and it would appear that the views expressed in different cases have not been uniform.
So far as the said High Court is concerned the point was settled by a decision of the Full Bench in Mahanth Sukhdeo Das.
vs Kashi Prasad Tewari and Shrideo Misra vs Ramsewak Singh(1).
The main questions before the Full Bench were whether on the vesting of an estate which was mortgaged at the material time the bakash lands therein which are deemed to be settled with the ex proprietor in khas possession would form substituted security for the purpose of the mortgage, and whether a co sharer proprietor not in actual possession of such lands had Any claim thereto on the basis of his constructive possession.
The High Court answered both the above in the affirmative.
One of the earliest cases in which this Court had to interpret section 6 of the Act was that of Surajnath Ahir vs Prithinath Singh (2 ) .
There the question which engaged the attention of this Court was whether the appellants who had originally gone into possession on the strength of a mortgage lost their right to continue in possession even if they claimed to be trespassers after the redemption of their mortgage by reason of the estate vesting in the State on the passing of the Act.
Although the case is not directly in point, it bears upon the identical provisions of law which have to be applied to the facts of the case before us.
The facts in that case were that the appellants had entered into possession of kasht lands of the mortgagors on the strength of a mortgage deed.
The mortgagors thereafter executed another mortgage with respect to their milkiat (proprietary) interest in favour of certain persons.
The plaintiff respondents bought the milkiat rights together with "kasht" lands from the mortgagors and entered into possession of the milkiat property and subsequently redeemed the mortgage deeds in 1943.
The appellants however did not make over possessions of the lands in dispute even after the redemption of the mortgage.
It was held by this Court that the respondents could not take advantage of section 6 (1) (c) of the Act as no mortgage subsisted on the date of vesting and the mere fact that the proprietor had a subsisting (1) I.L.R. 37 Patna 918.
(2) [1963] 3 S.C.R. 290 643 title to possession over certain land on the date of vesting could, ' not amount to that land being treated as under his "khas possession" for the purposes of the Act.
Referring to the definition of "Khas possession" in section 2(k) of the Act as meaning "the possession of such proprietor or tenure holder by cultivating such land or carrying on horticultural operations thereon himself with his own stock or by his own servants or by hired labour or with hired stock".
it was held that in order that the respondents could take advantage of the provision of section 6 (1 ) (c) of the Act they had to, establish a subsisting mortgage on the date of vesting which was inclusive, of the land subject to their right of redemption.
On the question of possession of the lands it was observed "On the date of vesting, the appellants were not in possession as mortgagees.
The mortgages had been redeemed in 1943.
Thereafter, the possession of the appellants was not as mortgagees.
It may be as trespassers or in any other capacity.
The land in suit, therefore, did not come within cl.(c) of section 6 of the Act.
" Rejecting the construction put on the expression 'khas possession by the High Court in Brijnandan Singh vs Jamuna Prasad(1) it was said : " The mere fact that a proprietor has a subsisting title to possession over certain land on the date of vesting would not make that land under his 'khas possession '.
" The Full Bench decision of the Patna High Court, came up for consideration by this Court in Ram Ran Bijai Singh vs Behari Singh alias Bagandha Singh(2).
There the appellants before this, Court were the plaintiffs who had filed a suit for a declaration that a certain plot of land was their zeraiti land and that the persons impleaded as the defendants 1st and 2nd parties had no right or title thereto and for recovery of possession of the said land by dispossessing them therefrom.
It was argued that in view of the concurrent findings of the courts below that the lands were the zeraiti lands of the plaintiffs they would not vest in the State because of the saving in section 6 of the Act and the appellant should be deemed to have been in khas possession of the land under section 6 (1) (c).
The respondents contended that it was not a case of a mortgagee remaining in possession after payment of the debt without anything more but of tenants who claimed to remain in possession by asserting a title which was as much against the mortgagors as against the mortgagees.
Reference was made in the (1) A.I.P. 1958 Patna 580.
(2) (3) I.L.R.37Pat.
644 course of arguments to the Full Bench decision in Sukhdeo Das 's case(3) and it was submitted that a mortgagee continuing in possession of the mortgaged property after payment of the :mortgage amount must hold the same on behalf of the mortgagor and in trust for him.
Counsel further relied on certain observations in the judgment of the Full Bench in aid of his proposition and submitted on the basis thereof that even the possession of a trespasser who had not perfected his title by adverse possession for the requisite period of time under the Limitation Act should be considered as in khas possession of the true owner.
Turning down this submission it was observed by this Court (p. 378) : "We consider that this equation of the right to possession with 'khas possession ' is not justified by principle or authority.
Besides this is also inconsistent with the reasoning of the Full Bench by which constructive pos session is treated as within the concept of khas possession.
" The Court went on to add that "The possession of the contesting defendants in the present case was in their own right and adverse to the plaintiffs, even on the case with which the appellants themselves came to court." Noting the statement of the plaintiffs in their plaint that the mortgagees had fulfilled their obligations and the obstruction to possession was put forward only 'by persons who claimed occupancy rights this Court concluded that, in the circumstances of the case, it was not possible for the appellants to contend that these tenants (defendants 1st and 2nd parties) were in possession of the property on behalf of the mortgagor or by virtue of any right through the mortgagor.
The case is not therefore an authority for the proposition that a co sharer 's constructive possession is to be ignored under section 6 (1) (c) of the Act.
Counsel for the appellants also referred us to a recent decision of this Court in section P. Shah vs B. N. Singh(1) in aid of his contention that the true effect of section 6 of the Act was to create a new right ,of tenancy in favour of the person in khas possession and consequently even if the plaintiff in the partition suit had a right to ask for demarcation of his Rs. 0 4 0 share of the bakasht lands before the passing of the Land Reforms Act, he could not pursue his claim by a prayer that he be considered a tenant along with those who were in actual khas possession.
In our view the above decision is no authority for this broad proposition.
In that case the appellants who were mortgagees of an estate including bakasht lands and other lands filed a suit on (1) ; 64 5 their mortgage and tried to follow up the preliminary decree which was obtained before the Act came into force by a petition for passing a final decree.
One of the questions before this Court was whether the mortgage decree had become unexecutable in view of the provisions of the Act.
It was held that the net effect of sections 3, 4 and 6 was that although on the vesting of the, lands in the State a settlement was deemed to be effected with the person in khas possession in law, there were two different transactions and the deemed settlement was in effect a separate transaction creating new rights.
The Court came to the conclusion that the only remedy open to the decree holders wag that provided in Chapter IV of the Act i.e. a claim under section 14 before the Claims Officer for determining the amount of debt legally and justly payable to each creditor in respect of his claim.
The Court was there dealing with the rights of the mortgage creditors after the Act had come into force.
Chapter IV of the Act made special provisions for dealing with the rights of secured creditors and section 4 (1) (d) expressly provided for the abatement of all suits and proceedings for the recovery of any money through proceedings which might be pending on the date of vesting arising out of securities created by mortgage or a charge on an estate or tenure.
Here however we are not dealing with the claims of mortgagees under Chapter IV.
In this case we have to consider whether the appellants had laid a claim which a co sharer could not put forward except by pleading ouster or any other independent ground.
Even if they were in actual khas possession within the meaning of section 2 (k) of the Act it must be held that the plaintiff who was a co sharer was in constructive possession through the appellants as "under the law possession of one co sharer is possession of all the co sharers".
We see no reason to hold that the observations of this Court to the above effect in P. L. Reddy vs L. L. Reddy(1) are not applicable to the case before us.
The appellants do not claim to be trespassers on the property neither did they claim any title to the lands adversely to the plaintiff respondent.
The deeming provision of section 6 must therefore enure for the benefit of all who in the eye of law would be regarded as in actual possession.
It follows that the plaintiff had not lost his share in the bakasht lands and had a right to them though not as tenure holder or proprietor but certainly as a raiyat under the provisions of the Land Reforms Act. ' The appeal must therefore be dismissed with costs.
V.P.S. Appeal dismissed.
(1) ; , 202.
| Serious allegations of corruption and malpractices had been made against the respondent, a member of the Indian Police Service, serving in the State of Bihar.
Inquiries made by the State Government revealed that there was a prima facie case made out against him.
He was suspended by an order which stated that disciplinary proceedings were contemplated against the respondent.
On the question whether the suspension of a member of the service can only be ordered after definite charges have been communicated to him in terms of r. 5(2) of the All India Services (Discipline and Appeal) Rules, 1955, or whether the Government is entitled to place him under suspension even before that stage has been reached after a preliminary investigation, HELD : (1) The fact that in other rules of service there is specific provision for an order of suspension even when disciplinary proceedings were contemplated, does not mean that a member of the All India Service should be dealt with differently.
It would not be proper to interpret the Rules, which from a self contained Code, by reference to the provisions of other rules even if they were made by or under the authority of the President of India.
[718 F G] (2) Rule 7 expressly provides for suspension of a member of the service, having regard to the nature of the charges, for the purpose of disciplinary proceedings.
The word 'charges ' in the rule means accusations or amputations against a member of the service.
If the disciplinary authority takes note of the allegation and is of the opinion after preli minary inquiries that the circumstances of the case justify further investigation to be made before definite charges can be framed it would not be improper to remove the officer from the sphere of his activity either by transfer or suspension inasmuch as it may be necessary to find out facts from people working under him or look into papers which are in his custody.
Ordinarily when serious imputations are made against the conduct of an officer, the disciplinary authorities cannot immediately draw up the charges and in some cases a considerable time may elapse before the superior authority can come to a conclusion that definite charges can be levelled against the officer.
Merely because the order mentions that the disciplinary proceedings were contemplated it cannot be held that the situation in the present case had not reached the stage which called for an order of suspension.
In substance, disciplinary proceedings can be said to have been started when complaints about the integrity of an officer are entertained, followed by a preliminary inquiry into them culminating 716 in the satisfaction of the Government that a prima facie case has been made out against him for the framing of charges.
When the order of suspension itself shows that the Government was of the view that such a prima facie case for launching departmental proceedings has been made out the fact that the order also mentions that such proceedings were contemplated makes no difference.
1721 B F; 723 G; 724 G H; 725 B C] section Govinda Menon vs Union of India, ; , followed.
|
: Criminal Appeal No. 36 of 1987.
From the Judgment and Order dated 1.9.1986 of the High Court of Madras in Crl.
Appeal No. 893 of 1985.
N. Natarajan, V. Krishnamurthi and V. Balachandran for the Appellants.
U.R. Lalit, A.V. Rangam, V.R. Venkataswami and L. Rajendran for the Respondents.
710 The Judgment of the Court was delivered by SEN, J.
Appellant No. 1, Laxmi Raj Shetty is under sentence of death on his conviction under section 302 of the Indian Penal Code, 1860 for having committed the murder of the deceased P.N. Gnanasambandam, Actg.
Manager of the Karnataka Bank, Main Branch, Madras by the First Additional Sessions Judge, Madras by his judgment and sentence dated October 28, 1985.
He has further been convicted under section 392 for having committed the offence of robbery of Rs.13,97,900 from the strong room of the Bank and also under section 449 for having committed house trespass with intent to commit the said robbery and murder.
He has been sentenced to undergo rigorous imprisonment for a period of seven years on each of these counts and the sentences are directed to merge in the sentence of death.
Appellant No. 2 Shivaram Shetty, father of appellant No. 1, a retired Sergeant Major of the Indian Air Force, re employed as Security Officer, Karnataka Bank, Main Branch, Mangalore has been convicted by the learned Additional Sessions Judge under section 212 for having harboured his son Laxmi Raj Shetty having known or having reason to believe that he had committed the murder of the Bank Manager and disappeared with a very large sum of money from the Bank and also under section 411 for having with dishonest intention retained possession of the huge sum of Rs.12,27,500 knowing the same to be stolen and sentenced to undergo rigorous imprisonment for a period of three years on both counts; the sentences have been ordered to run concurrently.
On a reference by the learned Additional Sessions Judge, a Division Bench of the High Court by its judgment dated September 1, 1986 has confirmed the sentence of death passed on appellant No. 1 Laxmi Raj Shetty under section 366 of the Code of Criminal Procedure, 1973 as also the conviction and sentences passed on him under sections 392 and 449 of the Indian Penal Code and those under sections 212 and 411 on his father Shiva Ram Shetty.
The Karnataka Bank has seven branches in the Metropolitan City of Madras, the main branch being at 171, Thambu Chetty Street.
In each branch there is a strong room for keeping the cash and other valuables.
The main Branch at 171, Thambu Chetty Street is on the first floor and the Regional Development Office at the second floor of the same building which belongs to the Bank, 711 the ground floor being used for a car park and godown.
The strong room in the main branch has a double locking system with two sets of keys.
One set of keys i.e. including the master key remained with the officer next to the Manager and the second set with the officer next to him.
The strong room could not be opened except by the use of both the keys.
The total cash in the strong room on May 20, 1983 as per the entry in the Double Lock Register Exh.P10, was Rs.14,26,113.70 in bundles of currency notes bearing the Bank seal MO 11 Series to MO 169 Series.
This is borne out by the Cash Scroll Register Exh.
The Cash Scroll Register was not kept under lock and key and used to remain on the table of PW 6 Smt.
Shasikala, Officer and she has testified that the total cash at the end of that day was Rs.14,26,113.70 and she handed over the amount to the Double Lock officer.
The assailant would therefore know by a look at the Cash Scroll Register as to the exact amount in the strong room on that day.
The topography of the Main Branch is given in the sketch plan Exh.
The Manager 's cabin is on the first floor at the north eastern corner.
The central hall in the middle is empanelled with different counters and there is a big lounge outside facing the Manager 's cabin.
The Bank officials used to sit in the central hall at their respective places while transacting the business of the Bank.
The bathroom and the W.C. where the murder was committed, are on the south western corner.
For going to the bathroom, one has to cross the central hall, get into a foyer where the water cooler is kept and beyond it is the bathroom and W.C.
Just across the foyer and opposite the bathroom is a flight of steps leading upto a mazzanine floor on which the strong room is located.
It appears that the accused Laxmi Raj Shetty, aged 24 years is a 6 feet tall, fair complexioned young man with curly hair.
He along with PW 9 Govindaraj was recruited as a trainee clerk at the Main Branch in the month of August 1982, placed on probation in October 1982 and thereafter confirmed in the month of April 1983.
It has come in evidence that the accused Laxmi Raj Shetty and the deceased Gnanasambandham were known to PW 18 from before as they both used to leave the Bank premises together at night around 9 or 9.30 p.m.
The accused was a karate expert and always attired in a red T shirt carrying a karate bag on his shoulder.
He was thus a 712 man with distinctive features and would naturally stand out in a crowd.
All the other witnesses examined by the prosecution to prove the various circumstances appearing in the case after the gruesome murder speak of the person involved being a tall, fair complexioned young man with curly hair, aged about 24 or 25 years.
The evidence also shows that PW 50 Deviasigamani, Inspector of Police who was investigating into the crime carried with him a photograph of the accused Laxmi Raj Shetty and when the witnesses were shown the photograph, they identified the accused to be the person in question.
According to the prosecution, on the fateful night i.e. On May 20, 1983 the deceased Gnanasambandham was, as usual, working in the Bank after the normal banking hours.
He used to sit on his table in the central hall next to the Manager 's cabin underneath a fan.
Being the seniormost officer, he had the custody of the first set of keys to the strong room, the second set of keys used to remain with the officer next to him PW 16 K. Chandrasekara Holla.
Apparently, at about 7.30 p.m. appellant No. 1 Laxmi Raj Shetty (hereinafter referred to as the accused), after doing physical exercises at Physical Development Institute, returned to the Bank premises.
The prosecution case is that during the probationery period, the accused used to work late in the evenings and gained the confidence of the deceased by helping him with the work.
They would both leave the Bank together after completing the day 's work roundabout 9 p.m.
The deceased would hand over the keys of the outer door and the shutter to the accused who would lock the same and hand back the keys to the deceased.
The accused would then accompany the deceased some way towards his house.
Shasikala as supported by the entry in the Cash Scroll Register Exh.
P 8 and that in the Double Lock Register Exh.
P10, was Rs.14,26,113.70 in bundles of currency notes of different denomina tions, all bearing Bank seals being Mo 11 Series to MO 169 Series.
From the testimony of PW 16 who had the custody of the second set of keys and was expected to take them home after the day 's business, it appears that he would instead lock the same in the cupboard of his table and take the key of the cupboard with him.
At times, out of forgetfulness, he would leave the key in one of the drawers.
713 On that day, unfortunately, PW 16 left the key of the cupboard on the table which sealed the fate of the deceased.
On the night the deceased was working in the Bank after the normal banking hours.
Presumably some time after 7.30 p.m. he left his seat in the central hall to go to the bathroom and when he was in the toilet he was struck on the head with the iron portion of one of the stitchers as a result of which he slumped.
Thereafter the assailant first roughed him up, then strangulated him with a twisted towel with a knot and stabbed to death by a pair of stitchers on both sides of his neck, ordinarily used as part of official stationery for stitching papers.
He had apparently been done to death to relieve himself of the first set of keys.
At bout 9 p.m. the accused was seen coming out of the building by PW 18 Smt.Kanaka, a flower vendor, sitting on the steps of the Bank.
The accused closed the outer door of the Bank and was seen by PW 18 going towards Burma Bazar.
He returned after some time with a light blue colour suitcase and re entered into the Bank premises.
After about half an hour he came out with a bag on his shoulder, the blue colour suitcase in one hand and a brief case which the deceased used to carry with him, in the other and placed the suitcase on the steps of the Bank.
He again went inside and brought out a large coffee coloured skybag and placed it beside the suitcase.
He then went towards Burma Bazar and came back with an auto rickshaw and with the help of PW 31 Venkatesan, auto rickshaw driver, placed the suitcase and the skybag in the autorickshaw and disappeared into the night.
The testimony of PW 18 is that she repeatedly queried whether the Periya Ayya, meaning the elderly person or the Manager Ayya thereby meaning the deceased had not come but the accused did not respond to her queries.
On the next morning i.e. on May 21, 1983 at about 8.15 a.m. PW 2 Mallaiya, the day watchman opened the Bank premises and when he switched on the lights, he found the fan over the table of the deceased still on and he switched it off.
He also found the Seiko watch of the deceased, his ball pen, pass book and other belongings along with an open ledger lying on the table.
He asked PW 1 Lakshmi, the sweeper, not to touch any of these articles and attend to her work.
His version is that he went out for a cup of tea but shortly thereafter PW 1 came out shouting that there was a dead 714 body lying in the toilet and in the meanwhile the members of the staff had started arriving.
PW 2 along with Venkataraj, Cashier and one Rajaiah went inside and saw the body of the deceased sprawled in the toilet.
He immediately contacted PW 3 P.T. Rajan, Chief Manager of the Bank and asked him to come at once.
PW 3 rushed to the Bank and saw the ghastly sight and got in touch with the police control room.
On the 21st morning which was a Saturday, the accused attended the Bank as usual presumably to allay suspicion.
He was present when the Investigating officer PW 47 Anandam, Inspector of Police, Esplanade, B 2 Police Station came to the Bank along with a Sub Inspector and a Police Constable on receipt of a message flashed by the police control room, as conveyed by PW 46 Manikkam, Sub Inspector of Police attached to B 1 North Beach Police Station.
On his arrival he took cognizance of the offence on the first information report Exh.
P3 lodged by PW 3 and started making investigation and made the usual seizures.
After holding an inquest over the dead body, he sent for the police photographer, the fingerprint expert and the police dog squad.
He also recorded the statements of PW 1 Lakshmi, PW 2 Mallaiya, PW 3 P.T. Rajan and PW 16 K. Chandrasekara Holla and one Ravi Shankar.
He did not interrogate the other Bank officials, including the accused.
The testimony of PW 3 is that immediately on arrival at the Bank he sent for PW 16 and asked for the second set of keys.
He came and told him that the key of his cupboard was missing and therefore it could not be opened.
It had then to be wrenched open and the second set of keys was also found missing.
PW 3 told PW 47 that he would get the duplicate set of keys from the Triplicane Branch and with the help of duplicate set of keys the strong room was opened at about 2.30 p.m. and a sum of Rs.13,97,900 was found missing.
A message was then transmitted by PW 3 to PW 10.
P. Raghuram, Chairman of the Karnataka Bank at the Mangalore Head office about the murder of the Actg.Manager and the theft of Rs.13,97,900 from the strong room.
PW 43 Dr. Cecilia Cyril, Associate Professor, Department of Forensic Medicine, Medical College, Madras performed an autopsy on the dead body of the deceased.
She found that the deceased had been strangulated by a dark colour twisted towel 36x7 c.m. long with knot which completely encircled his neck near the thyroid 715 cartilage.
She found several external injuries.
Underneath the towel there was a faint ligature mark 32x5 c.m. over the front side and back of the neck.
Apart from this, there were also several lacerations, bruises and abrasions on the upper part of the body, particularly on the face and the neck as also on both the hands.
The doctor also found two stitchers measuring 14 c.m. in length thrust into both sides of the neck in the front.
One of the stitchers had been thrust 5 c.m. deep and got stuck in the cartilage and the other was embedded 11 c.m. deep.
On dissection, she found extensive bruising of tissues over both sides of thyroid cartilage 7x5x1/4 c.m.
as also on the front of trachea 7x3x1/2 c.m.
According to the Doctor, each of injuries nos. 1, 2 and 3 was by itself sufficient in the ordinary course of nature to cause death.
She further opined that the cumulative effect of some of the injuries viz. nos.
1 3, 4 10 and 17 was necessarily fatal.
She stated that the blood marks on the walls of the toilet as well as on the floor could be due to sprouting and spillage of blood.
In her opinion, death was not caused by strangulation alone.
For quite a while, the police drew a blank.
At about 6 p.m. PW 47 Anandam, Inspector of Police accompanied by PW 46, Sub Inspector returned to the Bank and started making inquiries in the neighbourhood.
During the course of the inquiry he traced out one Ganesan, a plumber by profession, who used to sleep on the pavement near the Bank.
He furnished a valuable clue which ultimately led to the detection of the murderer.
He revealed that Smt.Kanaka, a flower vendor belonging to village Tharamani, whose husband Neerappan was employed as a cook at the nearby Krishna Bhawan Hotel on Errabalu Chetty Street, might disclose information about the murderer, if she were to be interrogated.
On getting this vital information PW 47 went to village Tharamani but found the house of Smt.Kanaka locked.
On enquiry he learnt that she had gone to the house of her sister at Vyasarpadi.
PW 47 obviously did not realise the importance of this witness.
He states that he did not go to Vyasarpadi that night although the place was only 7 kilo metres from the Police Station as it was very late.
Nor did he personally go to the nearby Krishna Bhawan Hotel, which was only two furlongs away, and instead sent a Sub Inspector to fetch Neerappan, husband of PW 18, but he was not there.
On the next morning i.e. the 22nd, under the orders of the Deputy Commissioner of Police, the case was transferred to the Crime Branch and 716 investigation was taken over by PW 48 Guruvandi, Inspector of Police (Crimes), M 1 Post Trust Police Station, without further progress.
He states that he had been to Tharamani in search of Smt.Kanaka but she was not there and learnt from the neighbours that she had gone to her sister 's house at Vyasarpadi but since her place at Vyasarpadi was not known, he did not proceed to Vyasarpadi and instead left a message that on her return she should report to the police.
He admits that he did not go himself to Krishna Bhawan Hotel but sent a Police Constable but he could not find Neerappan.
On the 23rd morning at 10 a.m. PW 50 Deviasigamani, Inspector of Police (Crimes), B2 Police Station who had taken over investigation in that morning, went to the Bank and further examined PW 2 Mallaiya, PW 3 P.T. Rajan and PW 12 Balasubramaniam, as also the nearby shopowners.
He then went to village Tharamani in search of PW 18 Smt.Kanaka but till then she had not returned from her sister 's house at Vyasarpadi.
He left a message that she should report to the Police Station on her return.
On that day he had also inspected all the relevant records including the attendance register and detected that apart from two others, the accused Laxmi Raj Shetty did not report for duty after the 23rd.
He accordingly went to the Christian Home where the accused was staying in Room No. 4 but found the room locked.
It was revealed that the main gate of the hostel used to be closed at 10.30 p.m. and till then the accused had not returned.
On the 21st morning at about 5 a.m. PW 27 saw the accused going up the stairs to his room.
After his bath he came down for breakfast but did not take any food complaining of stomach disorder and left after a cup of milk.
On the 24th at 11 a.m. PW 50 again went to the Bank and examined some of the Bank employees, namely, PW 5 Rangarajan, PW 6 Smt.Shasikala and PW 9 Govindaraj.
On that day at 4 p.m. he left for Vyasarpadi and remained there till 11 p.m. moving about in different localities making an extensive search in an effort to trace out Smt.Kanaka, but this was of no avail.
On the 25th he went to the Bank at 10 a.m. and further examined PW 16 Chandrasekara Holla and also recorded the statement of PW 17 Smt.Saraswathi Somasundar, an officer of the Bank.
At 4 p.m. PW 50 left for Tharamani where he found PW 18 Smt.Kanaka at her 717 house and recorded her statement which revealed the actual involvement of the accused Laxmi Raj Shetty in the commission of the murder and robbery; till then PW 50 treated him as a prime suspect.
After the disclosure by PW 18 Smt.Kanaka that she had seen the accused Laxmi Raj Shetty coming out of the Bank premises on the night in question after 9 p.m., locking the premises and of his suspicious movements thereafter, PW 50 directed all his energies in tracking down the accused.
He along with PW 49 Selvaraj, Inspector of Police and a police party left in the early hours of 26th morning at 1 a.m . by a police jeep for Mangalore in search of the accused.
They reached Mangalore at 9.30 p.m.
At 11.30 p.m. PW 50 called on the Deputy Superintendent of Police and requested for help of the local police.
With the local police headed by PW 40 Sundar Shetty, Sub Inspector of Police, State Intelligence, PW 50 raided the house of appellant No. 2 Shivaram Shetty at Kodial Bail.
Appellant No. 2 and his wife were present in the house but the accused Laxmi Raj Shetty was not there, he having in the meanwhile left for Madras by the West Coast Express.
The police carried on intensive search of the house till about 2 a.m. but nothing incriminating was found.
When they questioned appellant No. 2 he did not disclose that his son had already left for Madras by train.
As a result of this, the Madras police throughout on the 27th searched for the accused Laxmi Raj Shetty at Mangalore and neighbouring places but could not trace him out.
On the 27th night at about 9 p.m. PW 50 along with the police party left for Madras and reached there in the early hours of 29th morning at 1 a.m. At 7.30 p.m. PW 50 along with PW 49 and the police party went to the Aerodrome, Egmore Railway Station and the Madras Central in search of the accused Laxmi Raj Shetty.
At the Madras Central, PW 50 received information at about 1.45 p.m. that the accused was seen moving about in My Lady 's Park.
He accordingly with the police party rushed to the Park where he arrested the accused Laxmi Raj Shetty and recovered from his person currency notes in bundles of Rs.5 denomination marked MOs Nos. 198 and 199 bearing the Bank seals.
On the 30th morning at 7.15 a.m. PW 50 accompanied by the accused visited the Hotel Chola Sheraton but except for the receptionist the other witnesses were not present.
Apparently during investigation PW 50 derived information from the accused Laxmi Raj Shetty that the money stolen from the Bank was kept in his house at Mangalore.
At about 9.30 a.m. he accordingly went to the Madras Central presum 718 ably because he thought that appellant No. 2 Shivaram Shetty would be arriving by train but he could not be traced there.
At 2 a.m. he obtained police remand of the accused Laxmi Raj Shetty.
At 4.30 a.m. PW 50 along with PW 49 and the accused Laxmi Raj Shetty together with the police party left in a policy jeep for Mangalore.
However, on the way while the jeep was near the Madras Central, the accused Laxmi Raj Shetty pointed out his father Shivaram Shetty coming in a cycle rickshaw from the opposite direction.
PW 50 asked the rickshaw puller to stop and took appellant No. 2 Shivaram Shetty into custody.
Appellant No. 2 was carrying three boxes.
The police party returned to the Flower Bazar Police Station where the boxes were opened.
Of them, two of the boxes marked MOs 176 and 177 contained bundles of currency notes bearing the seal of the Bank totalling Rs.12,27,500 and the same were seized.
The case presents a feature which is rather disturbing and gave rise to a prolonged argument lasting over several days.
The Indian Express, Mangalore edition and the two regional newspapers Malai Murasu and Makkal Kural, both published from Madras bearing the date line 29th May and the regional paper Dina Thanthi, also published from Madras of the 30th, carried a news item that the entire amount stolen from the Bank had been recovered from the residence of appellant No. 2 at Mangalore and that both the accused had been taken into custody.
A similar news item appeared in the regional newspaper Dina Thanthi on the 30th.
If the news item published was true it would falsify the entire prosecution case about the alleged recoveries at Madras.
There is however nothing on record to substantiate the story appearing in the newspapers.
On the 30th, late M.G. Ramachandran, the then Chief Minister of Tamil Nadu, at a public function felicitated PW 18 Smt.Kanaka, the flower vendor, for the exemplary courage shown by her in coming forward to help the police in furnishing the vital clue in solving the crime and presented her with a cash reward of Rs.5,000.
The Hindu published from Madras in all its editions of 31st carried a news item about the function and reported that the Chief Minister used the occasion to caution the newspapers against the danger of conjectural reporting of such crimes during investigation, based on rumours unrelated to facts, which would not only prejudice the case but sometimes pave the way for the offender to escape.
He said that rumours were bound to sidetrack and mislead the public and even police officers concerned in solving the crime.
After the 719 function the Police Commissioner is reported to have told newsmen that the accused Laxmi Raj Shetty had been taken into custody on Sunday afternoon i.e. the 29th and had confessed that the cash removed from the strong room had been secreted out to Mangalore where his father lived.
He informed that a police party was already there and the father Shivaram Shetty was likely to be nabbed anytime.
In the meanwhile, the family of the appellants suffered a great tragedy.
On the 30th Smt.
Madhavi, wife of appellant No. 2, employed as a School Teacher at Mangalore and his daughter Kumari Usha Rani, an employee of the State Bank of Mysore, Hassan Branch out of the sheer shame could not bear the humiliation and committed suicide by walking into the Arabian Sea.
The Indian Express and the Hindu of the 31st carried the news of their suicide and it was reported that their bodies were washed ashore on the Someswar Ullal Beach on the outskirts of Mangalore.
The appellants abjured their guilt and denied the commission of the alleged offences.
When the accused were questioned about the facts and circumstances appearing against them, they denied their complicity in the crime.
Appellant No. 1 asserted that he had left for Mangalore on the 22nd as he was feeling unwell.
When he called upon PW 10, Chairman of the Bank, who enquired as to why he had come to Mangalore, he told him of his ailment.
On his advice he left for Madras to resume his duties.
His version is that on the 27th afternoon when the West Coast Express by which he was travelling, arrived at the platform at the Madras Central, he saw members of the staff of the Bank, namely, PW 9 Govindaraj, Padmanabhan and Ramesh.
When he went near them he was tapped on his shoulder by a stranger who asked him whether he was Laxmi Raj Shetty.
On his giving an affirmative answer he asked him to accompany him.
On his query he disclosed that he was a police officer.
By that time the other members of the staff had stopped him and they advised him to accompany the police.
Appellant No. 2 states that he had on 26th met the Chairman of the Bank and informed that his son had come to Mangalore and the Chairman wanted to speak to him.
He accordingly went with his son who enquired about his ailment and then directed him to proceed to Madras.
He admitted that there was a search made of his house on the night between 26th and 27th at Mangalore but the police did not find 720 anything.
His version is that on the next day i.e. 27th at about 9 p.m. PW 50 accompanied by the Assistant Commissioner of Police Sitaram and PW 10 and Thalithiya, Assistant General Manager visited his house and told him that his son had been arrested and they wanted him to go with them to Madras.
He was advised by PW 10 to accompany the police and he was first taken to the Chairman 's house and from there to the Blue Star Hotel at Mangalore.
Early next morning all of them left for Madras and reached the Flower Bazar Police Station the same evening at 6 p.m. where he was detained for the subsequent days and nights till he was produced before the Court along with his son on the 31st.
The learned Sessions Judge has relied upon the testimony of PW 18, Smt.Kanaka, the flower vendor and the other prosecution witnesses and come to the conclusion that the circumstances from which the conclusion of guilt is to be drawn have been fully established against both the accused and all the facts so established are consistent only with the hypothesis of their guilt and exclude every reasonable possibility of their innocence.
He accordingly convicted the accused with the commission of the offences with which they were charged and sentenced them as above.
Ratnavel Pandian, J. speaking from himself and Singaravelu, J. constituting the Division Bench, in a singularly well written judgment, has carefully marshalled the entire circumstantial evidence and come to the conclusion that the prosecution has established its case against both the accused beyond all reasonable doubt and accordingly maintained the conviction and sentences passed by the learned Additional Sessions Judge.
The prosecution case against the appellants rests purely on circumstantial evidence.
The circumstances relied upon by the prosecution against the principal accused for the charges of murder androbbery which were parts of the same transaction are:
(i) The fact that the accused Laxmi Raj Shetty was seen leaving the building on the fateful night at about 9 p.m. as testified by PW 18 Smt.Kanaka, the flower vendor, sitting on the steps of the Bank after finishing her day 's work and the fact that the deceased was not seen alive thereafter.
The accused had gained knowledge about the mode of operating the strong room in the first week of April 1983 when he entered the strong room along with PW 8 Ananthakrishnan, PW 9 Govindaraj and PW 12 P. Balasubramaniam and got his doubts cleared about the method of opening the strong vault where there were Godrej bureaus, in one of which the currency notes were kept.
The murder and robbery were obviously an inside job by a person who had knowledge about the 721 manner in which access could be had to the safety vault.
(ii) The accused had gained the confidence of the deceased as a sincere and loyal worker by attending to the work every day even after the banking hours and assisting the deceased, leaving the Bank at about 9 or 9.30 p.m. with the deceased as was clear from the evidence of PW 5 Rangarajan, PW 6 Smt.Shasikala, PW 9 Govindaraj, PW 12 P. Balasubramaniam and PW 18 Smt.Kanaka
(iii) The accused had the opportunity of knowing about the cash balance available in the Bank from the cash scroll register Exh.P 8 which was always kept open on the table of PW 6 Smt.Shasikala whose seat was adjacent to that of the accused as is clear from the testimony of PW. 6
(iv) The accused had knowledge about the availability of the first set of keys including the matter key with the deceased and the second set of keys with PW 16 Chandrasekara Holla while he worked in the Bank for a period of about nine months.
He also noticed that PW 16 was in the habit of leaving of second set of keys in the cupboard of his table and at times, used to leave the key of the cupboard in one of the drawers.
(v) The movement and conduct of the accused afterwards.
After he was seen coming out of the Bank premises on that night at 9 p.m., his act of going towards Burma Bazar and returning within half an hour with a light blue colour suitcase, then entering into the Bank, again coming out of the Bank half an hour thereafter with a bag on his shoulder and a suitcase in one hand and a brief case which the deceased used to carry with him in the other, placing the suitcase on the steps of the Bank where PW 18, the flower vendor, was sitting and thereafter bringing out a large coffee colour sky bag and placing the same beside the suitcase, closing the outer door and the shutter and locking the same, then proceeding along Errabalu Chettu Street towards Burma Bazar and bringing an auto rickshaw, placing the suitcase and the sky bag with the help of the auto rickshaw driver in the auto rickshaw and disappearing towards the High Court.
(vi) His act of not responding to the queries put by PW 18 about the deceased whom he used to accompany every night on closing the Bank.
(vii) His act of not returning to the Christian Home where he stayed and instead staying at Hotel Chola Sheraton on the night of 20th and the whole of 21st.
He obviously stayed at the five star hotel for reasons of safety as he was carrying the huge amount of about Rs.14 lakhs.
(viii) His visit to Christian Home early in the morning of 21st at 5 a.m., going to the room, taking bath, collecting his belongings and not taking breakfast saying that his stomach was upset.
(ix) His act of attending to his duties at the Bank on the 21st to allay suspicion, making reservation of a first class berth by train No. 27 and leaving Madras for Mangalore on the morning of the 22nd which was a Sunday (x) On reaching Mangalore 722 on the 23rd morning at 6 a.m., his act of not proceeding to the family house there but instead staying at Hotel Moti Mahal along with the suitcase and the bag containing the stolen money.
(xi) His act of disappearing from Madras on the 23rd morning and not returning till 27th afternoon.
(xii) The fact remains that the currency notes worth Rs,12,32,000 recovered from the accused bear the Bank seal and have been identified to be stolen.
We had the benefit of hearing Shri N. Natarajan, learned counsel for the appellants who argued the appeal with considerable perspicuity and resource and an equally forceful and realistic argument advanced by Shri U.R. Lalit, learned counsel appearing for the State Government.
Apart from questioning the credibility and trustworthiness of PW 18 Smt.Kanaka, the flower vendor, whom the learned counsel for the appellants characterised as a got up witness by the prosecution to furnish the missing links the chain of circumstances, as well as the alleged recoveries of Rs.4,500 effected by PW 50 Deviasigamani, Inspector of Police from the accused Laxmi Raj Shetty at My Lady 's Park, Madras on May 29, 1983 and of the amount of Rs.12,27,500 from appellant No. 2 Shivaram Shetty, he endeavoured to create doubts and difficulties as to the truthfulness of the entire prosecution case.
He contends that the prosecution case regarding the recovery of the stolen amount at Madras stands falsified by the news item carried in the Indian Express, Malai Murasu and Makkal Kural of the 29th and Dina Thanthi of the 30th showing that the entire amount had been recovered from the residence of appellant No. 2 Shivaram Shetty and both the accused had been taken into custody.
The learned counsel also brought out several improbabilities in the prosecuion case.
It was pointed out that the accused had left Madras by the West Coast Express on the 22nd morning and reached Mangalore on the next day i.e. on the 23rd.
If that be so, both the father and the son were freely moving about at Mangalore till the 26th evening.
On the 23rd they paid a visit to the clinic of PW 11 Dr. Madhava Bhandari as the accused was complaining of stomach disorder and thereafter on the 25th evening they called on PW 10 P. Raghuram, Chairman of the Bank who advised the accused to return to Madras at once.
It was not till 26th evening that the accused boarded the West Coast Express.
The learned counsel contends that if really PW 50 became aware from recording of the statement of PW 18 on the 25th evening at 4 p.m. that the accused was the person involved in the commission of murder and robbery, he would have at once flashed a message to the Mangalore police to intercept him particularly in view of the fact that a huge amount of about Rs.14 lakhs was stolen from the Bank.
On their own 723 showing, a police party consisting of PW 50 accompanied by PW 49 instead left for Mangalore in the early hours of 26th morning, reaching there at 9.30 p.m. and contacted the local police and thereafter conducted a raid at the house of appellant No. 2 in the early hours of the 27th at 1 a.m.
The police would necessarily have known from the railway reservation that the accused Laxmi Raj Shetty under the assumed name of his father Shivaram Shetty, had boarded the West Coast Express for Madras on the 26th.
They would have immediately contacted the Madras police and intercepted the accused on his arrival at the Madras Central on the 27th afternoon at 4 p.m.
The submission is that this lends credence to the testimony of PW 9 Govindaraj that the accused arrived by the West Bengal Coast Express on the 27th afternoon and was taken into custody by the police.
We are expected to believe, the learned counsel argues, that the accused was freely roaming about in Madras between the 27th and the 29th till he was taken into custody at My Lady 's Park.
It is therefore submitted that the prosecution evidence of the so called recovery of the incriminating currency notes worth Rs.4,500 from the accused Laxmi Raj Shetty could not be true.
As regards the testimony of PW 18 Smt.
If really PW 47 had derived knowledge from Ganesan, the plumber, that PW 18 might furnish a vital clue which would lead to the detection of the murderer, it was expected from PW 47 and PW 48, who took over the investigation from him, that they would make every effort to track down PW 18 or her husband.
Further, the learned counsel contends that the repeated visits made by PWs 47 and 48 to Tharamani when on their own showing they knew that PW 18 had gone to her sister 's house at Vyasarpadi, creates considerable doubt about his version.
Nor did they take the trouble to track down her husband Neerappan from the Krishna Bhawan Hotel which was just two furlongs from the police station.
According to the learned counsel, the cumulative effect of all these circumstances taken together renders it extremely unsafe to rely on the sole testimony of PW 18 unless it was corroborated in material particulars by evidence of an independent character.
In reply Shri U.R. Lalit, learned counsel for the respondent mainly contends that even if the prosecution evidence regarding the 724 recoveries were to be discarded, there was ample material brought on record which raises an inference of guilt of the appellants.
Broadly stated, the learned counsel, in substance, advanced a two fold submission, namely: (i) The course of investigation during which it was revealed that PW 18 Smt.Kanaka had information which might result in solving the murder, and (ii) The fact as deposed by PW 18 that the accused Laxmi Raj Shetty was the person last seen leaving the Bank premises after locking the front door and the shutter on the fateful night at about 9 p.m. taken in conjunction with the prosecution evidence regarding the conduct and movement afterwards, clearly show that he alone and no one else could have committed the murder because both he and the deceased were the persons working late in that night.
As regards the news item which appeared in the Indian Express and the other regional papers showing that the entire amount stolen from the Bank had been recovered on a search of the house of appellant No. 2 Shivaram Shetty at Mangalore and that they have both been taken into custody, the learned counsel contends that the news items has no evidentialy value and cannot be taken into consideration.
It is pointed out that the defence had not examined the reporters who had gathered the news appearing in the newspapers and authenticate the version though the reporters had been summoned.
Further, in a case of this nature, the Court cannot reject the oher reliable and credible evidence led in accordance with law merely on the publication of this kind of unauthenticated news item in the press.
It is said that if the Court were to act on such news item though not brought into evidence in accordance with law and were inclined to dispose of a case on such news item, then the Court had either to convict a person or acquit him on such publication of news item ignorning the overwhelming legal evidence brought on record.
There is in our opinion, considerable force in his submissions.
The law relating to the proof of a case based purely on circumstantial evidence has been settled by several authorities of this Court as well as of the High Court.
In Earabhadrappa vs State of Karnataka, ; it was observed: "In cases in which the evidence is purely of a circumstantial nature, the facts and circumstances from which the conclusion of guilt is sought to be drawn must be fully established beyond any reasonable doubt and the circumstances so es tablished should not only be consistent with the guilt of the accused but they must in their effect be such as to be entirely incompatible with the innocence of the accused and 725 must exclude a reasonable hypothesis with his innocence."
Shri Natarajan, learned counsel appearing for the appellants rightly points out that in such cases there is always the danger that 'conjecture or suspicion may take the place of legal proof ' and draws our attention to the caution administered by Baron Alderson to the jury in the oft quoted passage in Reg vs Hodge, where it was said: "The mind was 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 was it, considering such matters, to overreach 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.
" It is therefore well to remember that 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 intance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused.
Again, the circumstances should be of a conclusive nature and tendency 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 ground 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.
In spite of the forceful arguments addressed to us by the learned counsel for the appellants, we have not been able to discover any infirmity in the reasoning or the conclusions arrived at by the learned Additional Sessions Judge or the High Court.
Nor can it be said that they have just fallen into an error against which caution was administered by Baron Alderson in Reg vs Hodge.
The learned counsel began his address by stating that if we were to accept the conclusion arrived at by the learned Additional Sessions Judge and the High Court that there was nothing to impeach the credibility of PW 18 Smt.Kanaka, the flower vendor as a truthful witness and that her evidence was such as to accord with the ordinary course of events and human nature, it would 'tend to tilt the balance against the appellants. '
That really furnishes a key to the entire prosecution case.
We have therefore minutely been taken through the testimony of PW 18 Smt.Kanaka by learned counsel for the parties who presented their respective points of view with consummate skill, and after going through her evidence over and over again we have no doubt whatever that the Courts below were perfectly justified in reaching the conclusion that she was a witness of truth and there was no reason to discard her testimony or that of the other prosecution witnesses.
Once the version of PW 18 Smt.Kanaka that the accused was the person last seen leaving the Bank premises on the 20th night at 9 p.m. is accepted with all his subsequent movements, it would be seen that every other circumstance appearing from the evidence of the other prosecution witnesses fits in and it lends support to the irresistible inference drawn from the attendant facts and circumstances by the Courts below that the deceased Gnanasambandham was done to death by no one else except the accused Laxmi Raj Shetty and that both the accused were guilty of the offences with which they were charged.
We shall briefly enumerate the circumstances arising from the evidence adduced by the prosecution along with our findings thereon.
(1) The accused had occasion to learn the method of operating the safety vault.
It transpires from the evidence of PW 3 P.T. Rajan, Chief Manager and Regional Development Officer of the Bank that in that building the Regional Development Office was functioning on the second floor.
The Main Branch was on the first floor and the ground floor was used as a car park and godown.
The strong room was on a mezzanine floor over the first floor and reached by a flight of stairs.
The walls of the strong room were constructed with RCC.
There was an iron door fixed to that room supplied by Godrej company of the thickness of 3" having a dimension of 6 ft x 3 ft.
There was a rotating wheel fitted to the iron door.
It had to be turned to the right and then both the sets of keys inserted in the upper and lower key holes.
On the lever being released the iron door would open outside.
Inside there was another door with a lock attached and it would open inside.
The strong room was divided by a partition wall with a wooden door.
In one portion of the strong room there were safe deposit lockers.
In the other portion there were two Godrej bureaux, of which one was used for keeping currency notes and the other for keeping valuable documents viz. blank term deposit receipts, cheque books, drafts etc.
It is in evidence that there was no night watchman of the Bank.
It appears from the testimony of PW 8 Ananthakrishnan, PW 9 727 Govindaraj, PW 12 Balasubramaniam and PW 16 Chandrasekara Holla that the accused gathered knowledge about the manner in which the strong room could be operated.
It is clear from their evidence that access to the strong room could not be had except by a person acquainted with the manner in which it was operated.
According to these witnesses the accused got an opportunity when in the first week of April, the wife and children of PW 8 Ananthakrishnan, Bank Manager visited the Bank and evinced a desire to see how the safety vault was operated.
While he was going up the stairs along with the members of his family and PW 12 Balasubramaniam, attendant, the accused who was standing with PW 9, expressed a desire to come up and see the strong room.
Although taken aback at the unusual request, PW 8 permitted them to come up.
With his inquisitiveness the accused cleared all his doubts about the mode of operating the safety vault and gained sufficient knowledge.
From the evidence of PWs 5,6,9,12 and 16 it is amply clear that the accused Laxmi Raj Shetty gained the confidence of the deceased as a busy and hard working young man by remaining in the premises and continuing to work even after the banking hours and assisting the deceased in disposing of the day 's work.
He also had knowledge about the availability of the first set of keys of the strong room with the deceased and must have noticed that PW 16 Chandrasekara Holla, who had the custody of the second set of keys, was in the habit of leaving them in the cupboard of his Godrej table.
It appears from the evidence of PW 15 V. Kannan, Manager in the Physical Development Institute that on the 20th at about 6 p.m. the accused left the Institute within half an hour after doing some exercises.
P 8 which was kept open on the table of PW 6, which was adjacent to the table of the accused.
(2) The fact that the accused Laxmi Raj Shetty was last seen leaving the Bank premises.
Kanaka, the flower vendor, tends to show that after finishing the day 's work, she came and sat on the steps of the Bank.
At about 9 p.m. she saw the accused coming out of the Bank premises and locking the outer glass door.
She testifies that she used to sell flowers at the junction of Thambu Chetty Street and Errabalu Chetty Street, not far from the Bank.
According to her, she was originally residing at Vyasarpadi but six months prior to the occurrence she shifted her residence to village Tharamani.
Her version is that every day she used to begin selling 728 flowers in the day from 6 a.m. to 8 p.m. and thereafter return to her house but on Thursdays and Fridays due to rush of customers she was constrained to remain late upto 9 p.m. and since she could not get a bus at that hour, she used to sleep on the raised platform near the outer door of the Bank.
She knew the deceased Gnanasambandham who used to buy flowers from her, as well as the accused Laxmi Raj Shetty as they both used to come out of the Bank together at night.
The deceased would give the keys to the accused who would lock the outer glass door and thereafter pull down the shutters and lock the same and return the keys.
The deceased would then check the locks and thereafter both would leave the premises.
She distinctly remembered that on Friday prior to the incident the deceased while buying flowers enquired from her whether she used to sleep there and she had to explain that on thursdays and Fridays she could not go back home due to late hours as there was no connecting bus.
That was the last when she saw the deceased alive.
On the night in question while she was sitting on the steps of the Bank after finishing her day 's work she saw the accused Laxmi Raj Shetty coming out of the Bank premises alone by opening the glass door, closing the same and proceeding towards Errabalu Chetty Street.
After about half an hour the accused came out of the Bank by opening the glass door with the suitcase in one hand, a bag on his shoulder and the briefcase which the deceased used to carry, in the other.
He kept the suitcase on the steps of the Bank where she was sitting and re entered the premises and brought out a large coffee colour skybag and kept the same beside the suitcase, locked the glass door, pulled down the shutters and locked the same.
She states that when the accused pulled down the shutters she asked him whether the Periya Ayya, evidently referring to the deceased, had not come, the accused did not give any reply.
Thinking that he had not understood her words properly, she repeated the same query to which there was no response.
After locking the shutters the accused went towards Errabalu Chetty Street leaving the suitcase and the skybag on the steps of the Bank.
It was a festival day and the deity of Kaliamman Koil was passing along Thambu Chetty Street.
PW 18 was feeling unwell and wanted to offer camphor to the deity but could not leave the place because the accused had left the suitcases on the steps.
The deity was taken in a procession through the street, Thereafter, according to her, the 729 accused came in an auto rickshaw and with the help of the autorickshaw driver the accused carried and placed the suitcase and the skybag with some difficulty.
When she queried why had he left the suitcase when there were a large number of auto rickshaws passing that way, the accused did not give any reply.
She further states that as she was running temperature she slept on the steps of the Bank.
Early next morning at 6 a.m. she left for her house at Tharamani and from there she went to her sister 's place at Vyasariadi after informing her husband.
She returned to Tharamani 4 5 days later feeling better when the police examined her.
We have no doubt in our mind that PW 18 Smt.Kanaka is a natural witness and there is a ring of truth in her version.
Though she was subjected to a searching and incisive cross examination by learned counsel for the appellants, nothing was brought out to impeach her credibility as a truthful witness.
There was no reason for her to falsely implicate the accused Laxmi Raj Shetty particularly when the vital clue furnished by her led to the unravelling of the crime and recovery of the huge amount of money.
We are not impressed with the submission that merely because PW 18 was given a cash award of Rs.5,000 by the Chief Minister she was a got up witness and must be regarded as 'a witness who springs from a tainted source '.
It is not a phenomenon unknown in the world today for the Government to offer cash rewards to citizens for their act of courage and bravery by coming forward with vital information which results in the ultimate detection of the offender.
In such cases there is no question of impairing the testimonial fidelity of such person as a competent witness.
Learned counsel however drew our attention to the observations of this Court in Lingala Vijay Kumar & Ors vs Public Prosecutor, Andhra Pradesh; , where this Court viewed with concern the practice of offering cash rewards to prosecution witnesses when the case was sub judice.
We may say at once that the Court in that case did not discard the testimony of the prosecution witnesses on that account.
All it did in that case was to endorse the expression of opinion of the learned Sessions Judge that such rewards for bravery may be euphemistic officialese but are apt to be construed by the accused as purchase price for testimonial fidelity and the Government ought not to prejudge the case and award any cash reward to a citizen for his exemplary civic sense since he may figure as a material witness.
We need not say anything more.
The learned Additional Sessions Judge and the High Court were fully aware of this aspect and have scrutinised the testimony of PW 18 with meticulous care and we agree with them 730 that merely because PW 18 was rewarded for her courage in coming forward to help the police her testimony should not be viewed with suspicion.
She withstood a close and searching cross examination but her veracity as a truthful witness remains unshaken.
(3) Purchase of a suitcase and a skybag from Burma Bazar: The testimony of PW 18 Smt.Kanaka finds support from PW 19 Ramaswami, a dealer in suitcases in Burma Bazar.
This witness states that at about 9 or 9.15 p.m. on 20th May a fair complexioned, tall and lean person aged about 24 25 years, meaning the accused, came to his shop and purchased a light blue colour suitcase for a sum of Rs.200 which amount be paid in currency notes of the denomination of Rs.20 and also wanted one skybag.
Since he had no stock he fetched a coffee colour skybag from his brother in law 's shop and showed it to the accused who purchased the same, also for Rs.200 and paid the price again in currency notes of the denomination of Rs.20.
According to him, half an hour later the same person came back and got into an auto rickshaw driven by PW 31 Venkatesan whom he knew.
The testimony of PW 31 Venkatesan, auto rickshaw driver, also corroborates PW 18.
According to him, on the night in question at about 10.15 p.m. a lean and tall person fair in complexion, meaning the accused, engaged his auto rickshaw to go to Hotel Chola Sheraton from Thambu Chetty Street.
He further states that when he had driven that person to Thambu Chetty Street he was asked to stop the auto rickshaw outside the Bank.
On the steps of the Bank there was a light blue colour suitcase together with a coffee colour skybag.
As the suitcases were heavy, he together with that person lifted the same and placed them in the auto.
Thereafter, he drove on straight to Hotel Chola Sheraton and reached there at about 11 p.m.
At the hotel, PW 21 Derick, bell boy placed the luggage in the trolley and took them inside the hotel accompanied by the accused.
PW 31 further states that the hire charges were fixed at Rs.15 and the accused gave him a 20 rupees currency note and he gave back Rs.5 and went away.
His version is supported by the entry in the trip sheet Exh.
It is contended that the evidence of PWs 19 and 31 with regard to the identification of the accused Laxmi Raj Shetty before the Court of Sessions for the first time without any prior test identification parade was not of any value but we are not impressed.
Later both these witnesses saw the photograph of the accused carried by PW 50 Deviasigamani and identified him to be the person involved.
In the world as a whole today, the identification by photographs is the only 731 method generally used by the interpol and other crime detecting agencies for identification of criminals engaged in drug trafficking, narcotics and other economic offences as also in other international crimes.
Such identification must take the place of a test identification.
Further, the evidence of PW 19 that the person concerned purchased a coffee colour skybag along with a light blue colour suitcase stands corroborated by the subsequent recovery of the coffee colour skybag from PW 33 Smt.Justin D 'Costa with whom the accused 's sister Km.Usha Rani used to stay, from a house at Hole Narsipur, District Hassan.
Similarly, the testimony of PW 31 finds support not only from the evidence of PWs 18 and 19 but also from the entry in the trip sheet as well as the entries in the Arrival and Departure register of Hotel Chola Sheraton.
(4) Stay at Hotel Chola Sheraton under the assumed name of Mohanraj: The fact that the accused checked into Hotel Chola Sheraton, a five star hotel, on the night of 20th, stayed the whole of the 21st and his departure therefrom on the 22nd morning at 9 a.m. is brought out from the testimony of PWs 20 25 as also from the hotel register which show that the accused stayed in the hotel under the assumed name of Mohanraj.
PW 21 Derick, bell boy at the hotel, states that a tall person about 6 feet in height with curly hair came to the hotel in an auto rickshaw that night carrying with him a light blue colour suitcase and a brown colour travellers bag.
He states that the luggage was heavy and therefore he brought a trolley and put the suitcase and the skybag in the trolley and took the same to the reception counter.
From there PW 22 Kalyanasundaram, another bell boy, took charge of the luggage.
PW 23 Elizabeth Mitra, receptionist, testifies that she gave him a registration card Exh.
P 24 and asked him to fill in the details.
When that person asked PW 23 to fill up the form she told him that as per the rules only the occupant concerned had to fill up the form.
So the accused filled it up and gave it to her.
He gave his name as 'Mohanraj '.
She allotted room No. 230 and when she wanted an advance of Rs.1,000 the accused told her that he would go up to the room and send the money.
According to her, PW 22 brought an amount of Rs.1,040 in currency notes of the denomination of Rs.20.
She credited Rs.1,000 towards advance and gave receipt for the same and returned the balance amount of Rs.40 to PW 22.
PW 22 went up to room No. 230 and found the accused standing outside.
He told him that the key to the door was inserted from inside and when he came out, the door got automatically locked.
PW 22 accordingly went to the receiptionist and brought the master key with which the room was opened.
He gave back Rs.40 out of which the accused gave him Rs.20 732 as tip.
This witness identified the accused in the Court as the occupant of the room.
When the accused checked out on the 22nd morning he made an entry in the hotel register to that effect.
The testimony of PW 23 is corroborated by the entry in the Arrival and Departure register Exh.
The relevant entry marked Exh.P 27 shows his arrival and Exh.P 28 shows his departure.
PW 24 Alexander Alwyn Fernandez, Cashier at the hotel approved the bill Exh.P 29 relating to Mohanraj who stayed in Hotel Chola Sheraton containing the details with regard to the room rent, advance payment, room service bills etc.
He states that he made the last two entries in Exh.P 29 at the time of departure of the said Mohanraj.
PW 25 Rocky Williams, Senior Lobby Attendant has produced the departure card prepared by him marked Exh.
It is true that they had identified the accused from the photograph shown to them by PW 50 and that was sufficient to lend support to their identification in Court.
Further, the fact remains that the person who came to Hotel Chola Sheraton on the night of the 20th at 11 p.m. and alighted with two heavy suitcases was the person brought by PW 31, auto rickshaw driver, from the Bank and he has been indentified and named by PW 18 as the accused.
P 24 the registration card of Hotel Chola Sheraton gives the address of the occupant of room No. 230 as Mohanraj, Hole Narsipur, Hassan.
The description given is of a 'tourist ' and the date of arrival as 20.5.83 at 23.05 on arrival from Bangalore.
The departure date is given as Bangalore on 22.5.83.
It is somewhat strange that the accused Laxmi Raj Shetty who was merely a Clerk in the Bank should have gone and stayed in Hotel Chola Sheraton, a five star hotel, on the night in question unless it was for purposes of safety as he was carrying the huge amount of about Rs.14 lakhs in the suitcase and the skybag.
There is evidence to show that the accused filled up the application form for reservation of a first class ticket Exh.
P 37 and signed the same as 'K.L.R. Shetty ' giving the name and address as Shivaram Shetty, Kodial Bail, Bangalore i.e. of his father.
The stay of the accused at Hotel Chola Sheraton at Madras on the night of the 20th, the whole of the 21st till his departure on the 22nd morning under the assumed name of Mohanraj, the act of leaving Madras on the 22nd morning by train in a first class compartment under the name of his father Shivaram Shetty, giving a wrong address of Kodial Bail at Bangalore which is not there, are facts which speak for themselves.
(5) Stay at Hotel Moti Mahal at Mangalore: There is unimpeachable evidence to establish that the accused Laxmi Raj Shetty on his 733 arrival at Mangalore by train on the 23rd morning at about 6 a.m.instead of proceeding to his father 's house checked into Hotel Moti Mahal with his luggage.
The testimony of PW 32 William Anchan, Receptionist is that on the 23rd morning a tall, fair complexioned person meaning the accused, came to the hotel and gave his name as 'Kiran Kumar ' and address as Hole Narsipur, Hassan District, saying that he was proceeding to Bangalore.
This is borne out from the entry in the Arrival and Departure register Exh.
The accused was allotted room No. 204 and he made an entry to that effect.
According to him, the said Kiran Kumar left the hotel on the 25th along with two suitcases.
PW 35 Padmanabhan, room boy testifies about the occupation of room No. 204 by the accused from the 23rd to 25th.
He states that the suitcases were heavy and that he carried them from the room and brought them down and put them in an autorickshaw in which the occupant left the hotel and identified the accused Laxmi Raj Shetty as the person who occupied the room.
This witness identified the suitcases M. Os.
176 and 177 which were subsequently seized on the 30th from appellant No. 2 Shivaram Shetty containing currency notes worth Rs.12,27,500 as the suitcases carried by him.
Again, these witnesses on being shown the photograph carried by PW 50 identified him to be the person involved.
Further, the testimony of PW 34 Surendran, Reservation Clerk, Mangalore Railway Station shows that the accused filled in the reservation slip Exh.
P 47 giving his name as Shivaram Shetty with address as Hole Narsipur, Hassan.
On a comparison of the handwriting appearing from the registration card Exh.
P 24 filled up by the accused when he checked into Hotel Chola Sheraton with that appearing on the reservation form Exh.
P 47, with the handwriting of the accused particularly the similarity in describing Bangalore as 'B 'lore ' and Mangalore as 'M 'lore ', the learned Judges have come to the conclusion that both the documents were writting by the one and the same person i.e. the accused Laxmi Raj Shetty.
Justin D 'Costa, the colleague and roommate of the deceased Kumari Usha Rani, sister of the accused Laxmi Raj Shetty.
She states that both of them were working in the State Bank of Mysore and staying together in a room at Hassan.
According to her, on the 21st, she along with Usha Rani and others went to Mangalore after attending to their duties at the Bank.
She states on their return on the 26th Usha Rani brought along with her a coffee colour skybag saying that it had been presented to her by her brother who was working in the Karnataka Bank, Main Branch, Madras.
She further states that on 734 the 29th May the Indian Express, Mangalore edition carried a newsitem relating to the Karnataka Bank, Main Branch 's Manager 's murder at Madras implicating the accused Laxmi Raj Shetty.
Usha Rani tried to contact her parents over the telephone but she could not get the line and thereafter, she told her that she was leaving for Mangalore but never returned.
PW 33 also states that on the 31st she read in the local Kannada newspaper that both Usha Rani and her mother had committed suicide by drowning themselves in the ocean.
On the 6th June, PW 50 came to her house and recovered the coffee colour skybag marked M.O. 175 from her possession.
Recovery of the stolen money belonging to the Bank: The recovery of Rs.4,500 in currency notes of the denomination of Rs.5 bearing the seal of the Bank from the accused Laxmi Raj Shetty on May 29,1983 at 2 p.m. when he was arrested at My Lady 's Park, and the remaining amount of Rs.12,27,500 in bundles of currency notes of the denominations of Rs. 100, 50, 20, 10 and 5 from appellant No. 2 Shivaram Shetty on the 30th opposite the Madras Central while he was on his way in a cycle rickshaw.
These recoveries have been proved by the Investigating Officer PW 50 Deviasigamani as well as the seizure witnesses PW 37 Neelakandan, PW 41 J. Kumar and one Sekar.
There is no reason to disbelieve their testimony particularly when it is an undisputed fact that the amount of Rs.12,32,300 belongs to the Karnataka Bank.
According to learned counsel for the parties, however, the truth of the prosecution case, particularly recoveries at Madras, are rendered improbable for two reasons: (i) The report in the Indian Express, Mangalore edition and the regional newspapers Malai Murasu and Makkal Kural on the 29th and Dina Thanthi on the 30th that both the accused had been taken into custody at Mangalore and the entire money stolen from the Bank recovered from the residence of appellant No. 2 Shivaram Shetty.
(ii) The admission of the prosecution 's own witness PW 9 Govindaraj that the accused Laxmi Raj Shetty arrived at Madras by the West Coast Express on the 27th afternoon at 4 p.m. and was taken into custody by the police at the platform.
Undoubtedly, each of these circumstances by itself was sufficient to falsify the entire prosecution case as regards the alleged recoveries at Madras and therefore we heard learned counsel for the parties at considerable length but nothing really turns on them.
735 Learned counsel for the appellants with consummate skill tried to create, as he was entitled as counsel for the defence, to break the chain of circumstances and to show that there are various missing links in an effort that the Court may give the accused benefit of doubt.
We are afraid, that is not a proper approach for the Court to adopt.
In the present case, the circumstances were closely linked up with one another and the Court would be misdirecting itself and commit serious error of law if it were to separately deal with each circumstance, rejecting the circumstances one by one and then acquitting the accused on the ground that the incriminating circumstances brought out were not consistent with the guilt of the accused.
There can be no doubt whatever that the circumstances enumerated above has been cogently and firmly established by the prosecution which, taken cumulatively, form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused Laxmi Raj Shetty and none else.
As to the first the accused Laxmi Raj Shetty was entitled to tender the newspaper report from the Indian Express of the 29th and the regional newspapers of the 30th along with his statement under section 313 of the Code of Criminal Procedure, 1973.
Both the accused at the stage of their defence in denial of the charge had summoned the editors of Tamil dailies Malai Mursau and Makkal Kural and the news reporters of the Indian Express and Dina Thanthi to prove the contents of the facts stated in the news item but they dispensed with their examination on the date fixed for the defence evidence.
We cannot take judicial notice of the facts stated in a news item being in the nature of hearsay secondary evidence, unless proved by evidence aliunde.
A report in a newspapers is only hearsay evidence.
A newspaper is not one of the documents referred to in section 78(2) of the Evidence Act, 1872 by which an allegation of fact can be proved.
The presumption of genuineness attached under section 81 of the Evidence Act to a newspapers report cannot be treated as proved of the facts reported therein.
It is now well settled that a statement of fact contained in a newspapers is merely hearsay and therefore inadmissible in evidence in the absence of the maker of the statement appearing in Court and deposing to have perceived the fact reported.
The accused should have therefore produced the persons in whose presence the seizure of the stolen money from appellant No. 2 's house at Mangalore was effected or examined the press correspondents in proof of the truth of the contents of the news item.
The question as to the admissibility of 736 newspaper reports has been dealt with by this Court in Samant N. Balakrishna vs George Fernandez & Ors.
,[1969] 3 SCR 603.
There the question arose whether Shri George Fernandez, the successful candidate returned to Parliament from the Bombay South Parliamentary Constituency had delivered a speech at Shivaji Park attributed to him as reported in the Maratha, a widely circulated Marathi newspaper in Bombay, and it was said: "A newspaper report without any further proof of what had actually happened through witnesses is of no value.
It is at best a second hand secondary evidence.
It is well known that reporters collect information and pass it on to the editor who edits the news item and then publishes it.
In this process the truth might get perverted or garbled.
Such news items cannot be said to prove themselves although they may be taken into account with other evidence if the other evidence is forcible.
" We need not burden the judgment with many citations.
There is nothing on record to substantiate the facts as reported in the newspapers showing recovery of the stolen amount from the residence of appellant No. 2 at Mangalore.
We have therefore no reason to discard the testimony of PW 50 and the seizure witnesses which go to establish that the amount in question was actually recovered at Madras on the 29th and the 30th as alleged.
As to the second, much emphasis was laid on the statement made by PW 9 Govindaraj showing that the accused Laxmi Raj Shetty was taken into custody at the Railway Station on the 27th when he arrived by the West Coast Express.
It was submitted that the admission of the prosecution 's own witness PW 9 about the arrest of the accused on the 27th was a serious infirmity which shows that the prosecution case about the alleged recoveries was concocted and untrue.
We have gone through the evidence of PW 9 with care.
It cannot be forgotten that this witness and the accused were appointed together as Probationary Clerks and obviously he is trying to help the accused.
We are satisfied that the Courts below were justified in not placing any credence on the statement made by this accused.
It is pertinent to mention that the alleged statement has been brought out during the cross examination of this witness by learned counsel appearing for appellant No. 2.
It would certainly have been better for the Public Prosecutor to have the witness declared hostile with a view to cross examine him and also called witnesses from the Bank to contradict him.
This was unfortu 737 nately not done but that would not have the effect of destroying the entire prosecution case having regard to the fact that the substantial portion of the stolen amount has been recovered from both the accused.
It is not disputed that the money recovered belongs to the Bank.
It is not suggested that such a large amount as Rs.12,32,000 bearing the seal of the Bank would have been planted on the accused.
In the premises, we are satisfied that the finding of guilt reached by the learned Additional Sessions Judge and the High Court after a proper and careful evaluation of the facts and circumstances appearing does not warrant any interference.
In the fact and circumstances of this particular case, we direct that the sentence of death passed on appellant No. 1 Laxmi Raj Shetty be commuted to one of imprisonment for life.
The evidence does not clearly indicate the exact manner in which the murder was committed.
It is noteworthy that appellant No. 1 had not taken with him any weapon for assaulting the deceased but used two stitchers lying in the Bank premises, indicating that the murder was not pre planned.
Looking to the nature of the weapon used, if seems to us that the accused acted under a momentary impulse.
In the circumstances, we direct that the death sentence passed on appellant No. 1 should be converted into one for life imprisonment.
Subject to this modification, the appeal fails and is dismissed.
The judgment and sentences passed on the appellants by the learned Additional Sessions Judge, as affirmed by the High Court in appeal, are upheld being appropriate.
| This appeal arose out of a case under the Kerala General Sales Tax Act.
The assessee firm (assessee) had been appointed as distributor by the Travancore Cochin Chemicals Ltd. (the "said company") to effect sale of their product under an agreement.
In the assessment of the assessee firm for the period 1967 68 under the Kerala General Sales Tax Act, final assessment was completed and the turnover as reported by the assessee was accepted and tax, levied on that basis.
Later, the assessing authority alleged that certain transactions in the aforesaid period had been wrongly excluded from the turnover reported by the assessee in the return and the turnover had escaped assessment.
The contention of the assessee that the transactions did not constitute sales by the said company to the assessee was rejected by the Assessing Officer and it was held that the said turnover was liable to be included in the taxable turnover as escaped turnover.
An appeal by the assessee to the Appellate Assistant Commissioner was dismissed.
In second appeal to the Tribunal, the Tribunal held that the transactions in question had taken place directly between the said company and the consumers and the assessee was merely an agent of the company, and allowed the appeal.
The High Court on revision held that the Tribunal was wrong in concluding that the assessee was acting only as an agent in respect of the said transactions between the said company and the consumers, and allowed the Revision Application.
The assessee firm appealed to this Court by special leave against the decision of the High Court.
Dismissing the appeal, the Court, ^ HELD: Both the parties proceeded on the footing that the transactions in question were effected pursuant to the agreement, sub clause (a) of clause 2 whereof provided that the distributor had the right of sale 880 of the product within the stipulated area.
Bulk supplies were effected in waggon load or lorry load by the said company direct to the consumer pursuant to orders booked by the assessee firm.
The distributor arranged the payment as per the agreement and also took the responsibility to bear entirely the resultant effects and risk from the said direct dispatches.
It was true that the price at which the goods were to be sold to the customers was fixed by the company but that did not lead to the conclusion that the assessee acted merely as an agent of the said company.
The mere fact that the manufacturer fixes the sale price by itself cannot lead to the conclusion that the distributor is merely an agent.
Under the agreement, what the distributor got was described as a "rebate" and not "Commission", as is normally expected in an agreement of agency.
This is a factor, by no means conclusive, but to a certain extent indicative of the relationship between the said company and the assessee.
More important, the supplies were made to the distributor against payment immediate or deferred as provided in the agreement, and even when the goods were destined directly to the customer, the distributor had to guarantee to arrange the payment, as per clause 8.
Where there was some time lag between the sending of the goods and the payment, the goods were to be insured at the cost of the assessee.
This circumstance clearly showed that in respect of the goods dispatched under orders placed by the distributors, the distributors really acted as purchasers of the goods which they in turn sold to the customers and did not merely act as agents of the said company.
In respect of the goods in question, despatched through public carriers, although the invoices were prepared in the names of the customers of the goods and the goods were consigned to the destination through public carrier booked to self, the bills were endorsed and delivered to the assessee.
In the light of the agreement, these circumstances clearly showed that in respect of these transactions the property in the goods dispatched passed to the distributors on the bills being endorsed and handed over to the distributors.
[884D H;885A D] Although the Court had referred to the assessee being described in the agreement as "distributor" and not as "agent" and to the fact that what they got was described as "rebate" and not "commission", the Court had not treated these circumstances as decisive.
But these descriptions considered in the light of the general tenor of the agreement and the circumstances surrounding the transactions between the parties showed that the assessee was not an agent but really a purchaser from the company in respect of the goods in question, and the transactions were liable to be included in the turnover of the assessee.
[885G H;886A] 881 The Bhopal Sugar Industries Ltd. vs Sales Tax Officer, Bhopal, ; ;and Pollack & Mulla 's Commentary on the Sale of Goods & Partnership Acts, 4th Edition, p. 114, referred to.
|
(Criminal)No.
1339 of 1991.
(Under Article 32 of the Constitution of India).
R.K: Jain, A. Mariarputham, Ms. Aruna Mathut, Udai Lalit, Shankar C. Ghosh and Ms. Chanchal Ganguli for the Petitioner.
The Judgment of the Court was delivered by K.N. SINGH, J.
Smt.
Shashi Nayar wife of Raj Gopal Nayar who has been awarded death sentence for offence under Sec tion 302 of the Indian Penal Code [ 'IPC ' for short] has approached this Court by means of this petition under Arti cle 32 of the Constitution challenging the constitutional validity of death penalty.
Raj Goapal Nayar, the petitioner 's husband was tried for offence under Section 302, IPC for having killed his father and step brother.
The Sessions Judge by his judgment and order dated 24.4.1986 convicted Raj Gopal Nayar and awarded sentence of death.
On appeal, the High Court confirmed the death penalty and dismissed Raj Gopal 's appeal against the order of the Sessions Judge.
Raj Gopal thereafter filed a special leave petition before this Court challenging the judgment and order of the Sessions Judge and the High Court, but the special leave petition was also dismissed by this Court.
Review petition filed by him was also dismissed.
Consequently, his conviction and the sentence of death stood confirmed by all the courts.
Thereupon, he filed mercy petitions before the Governor of Jammu & Kashmir and the President of India, but the same were rejected. 'He chal lenged the order of the President of India rejecting the mercy petition before this Court by means of a writ petition under Article 32 of the Constitution, but the same was also dismissed.
Another writ petition under Article 226 of the Constitution was filed before the Jammu & Kashmir High Court for quashing the sentence imposed on him but the same was also rejected.
As the legal proceedings before the court failed, he was to be hanged on 26.10.1991.
Shashi Nayar, the petitioner, thereupon filed the present petition under Article 32 of the Constitution before this Court challenging the validity of the capital punishment with a prayer for the quashing of the sentence awarded to Raj Gopal Nayar.
The petition was entertained by a Division Bench on 25.10.1991 and the matter was referred to the Constitution Bench for consideration, and meanwhile the execution of the condemned prisoner was stayed.
Mr. Ravi K. jain, learned counsel for the petitioner made the following submissions: 106 (1) Capital punishment is violative of Article 21 of the Constitution of India as the Article absolutely prohibits deprivation of a person 's life.
(2) Capital punishment does not serve any social purpose and in the absence of any study, the barbaric penalty of death should not be awarded to any person as it has no deterrent effect.
(3) The penalty of death sentence has a dehumanising effect on the close relations of the victims and it deprives them of their fundamental rights under Article 21 of the Constitution, to a meaningful life.
(4) The execution of capital punishment by hanging is barbaric and dehumanising.
This should be substituted by d some other decent and less painful method in executing the sentence.
The questions raised by Shri Jain have already been consid ered by this Court in detail on more than one occasion.
In Jagmohan Singh vs State of U.P.,[1973] 1 SCC 20 and in Bachan Singh vs State of Punjab, , this Court has on a detailed consideration, held that the capital punishment does not violate Article 21 of the Constitution.
In Bachan Singh 's case (supra), the court considered all the questions raised in this petition except question No.4, and the majority judgment rejected the same by a detailed rea soned order.
Since we fully agree with those reasons, we do not consider it necessary to reiterate the same.
Learned counsel further urged that the view taken in Jagmohan Singh 's and Bachan Singh 's cases (supra) is incor rect and it requires reconsideration by a larger Bench.
He, therefore, requested us to refer the matter to a larger Bench as the question relates to the life of a citizen.
He urged that the award of death penalty is a serious matter as it deprives a citizen of his life in violation of Article 21 of the Constitution and as such the court should consider the matter again.
We are fully conscious of the effect of the award of capital punishment.
But we are of the opinion that the capital punishment as provided by the law is to be awarded in rarest of the rare cases as held by this Court.
The procedure established by law for awarding the death penalty is reasonable and it does not in any way violate the mandate of Article 21 of the Constitution.
Since we agree with the view taken by the majority in Bachan Singh 's and Jagmohan Singh 's cases (supra), we do not find any valid ground to refer the matter to a larger Bench.
Learned coun sel urged that the majority opinion in Bachan Singh 's case (supra) was founded upon the 35th Report of the Law Commis sion submitted in 1967, which summarises the recommendations in the following words: 107 "Having regard, however, to the conditions in India, to the variety of the social upbringing of its inhabitants, to the disparity in the level of morality and education in the coun try, to the vastness of its area, to the diversity of its population and to the para mount need for maintaining law and order in the country at the present juncture India cannot risk the experiment of abolition of capital punishment." Shri Jain urged that the above Report indicates that in 1967 the Law Commission was of the opinion that the country should not take the risk of experimenting abolition of capital punishment.
However, since then much water has flown.
Further, there is no empirical study before the Court to show that the situation which prevailed in 1967 is still continuing.
Hence, the Court should reconsider the matter.
We do not find any merit in this submission.
The death penalty has a deterrent effect and it does serve a social purpose.
The majority opinion in Bachan Singh 's case (supra) held that having regard to the social conditions in our country the stage was not ripe for taking a risk of abolishing it.
No material has been placed before us to show that the view taken in Bachan Singh 's case(supra) requires reconsideration.
Further, a judicial notice can be taken of the fact that the law and order situation in the country has not only not improved since 1967 but has deteriorated over the years and is fast worsening today.
The present is, therefore, the most in opportune time to reconsider the law on the subject.
Hence the request for referring the matter to a larger Bench is rejected.
As regards the method of execution of the capital pun ishment by hanging, this Court considered the same in detail in Deena alias Deen Dayal & Ors.
etc., vs Union of India & Ors. etc.
, [1983] 4 SCC 645 and held that hanging by neck was a scientific and one of the least pain ful methods of execution of the death sentence.
We find no justification for taking a different view.
Shri Jain, howev er, brought to our notice that a learned Judge of this Court while sitting during vacation had issued notice to the State on the question as to whether the execution by hanging is a cruel and unusual procedure.
Hence, he urged that we should entertain this petition and reconsider the question.
Since the question of the mode of execution of capital punishment has already been considered in detail by this Court m Deen Dayal 's case (supra), we do not find any good reason to take a different view.
The question of reasonableness in the award of the capital punishment to Raj Gopal Nayar has been considered by the High Court and this 108 A Court at various stages and consistently it has been answered against the prisoner.
Hence the petition fails and is accordingly dismissed.
Interim relief order dated 25.10.
1991 is vacated.
V.P.R. Petition dismissed.
| The appellants ' lands were acquired under the Land Acquisition Act.
The appellants claimed land value at the rate of Rs. 10 per sq. yard, but the Land Acquisition Offi cer awarded compensation at the rate of Rs.0.88 per sq. yard.
On a reference the Sub Judge determined the market value at Rs. 11 per sq. yard on the basis of certain com parable transactions, but granted the compensation at the rate of Rs. I0 as the appellants themselves had claimed only at that rate.
On an appeal preferred by the Respondent State, the High Court determined the market value of the lands at the rate of Rs. 6.50 per sq. yard and reduced the total compensation, following the decision of this Court in Tribeni Devi vs Collector, Ranchi, AIR 1972 SC 141 that a deduction of 1/3 of the value is to be made when large extent of land is acquired under housing scheme.
Aggrieved by the High Court 's decision, the appellants preferred the present appeals, contending that the High Court had erroneously applied the principle laid down in Tribeni Devi 's case without properly appreciating the nature of the land in question and the purpose for which it had been acquired.
It was further contended that there was no justification for making any deduction since the land in question was fully developed and eminently suitable for being used as house sites.
Even in respect of the land acquired for the purpose of formation of the road, it was argued, the High Court wrongly proceeded on the basis that expenses have to be incurred for development.
On behalf of the Respondents, it was contended that the appellants ' lands form part of large tract acquired for the purpose of construction of 173 houses, that the other transaction based .on which compensa tion was decided by the Sub Judge, related to small plots of land which were fully developed and while comparing the transactions, it was necessary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that 1/3 of the value was rightly deducted.
Allowing the appeals, this Court, HELD 1.
The principle of deduction in the laud value covered by the comparable sale is adopted in order to arrive at the market value of the acquired land.
In applying the principle it is necessary to consider all relevant facts.
It is not the extent of the area covered under the acquisi tion, the only relevant factor.
Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position.
If smaller area within the large tract is already developed and suitable for building purposes and have in its vicinity roads, drainage, electricity, communications etc.
then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified.
[177 D].
Tribeni Devi vs Collector, Ranchi, ; , distinguished.
Kaushalya Devi vs Land Acquisition Officer, ; ; Administrator General of West Bengal vs Collector, Varanasi, ; ; Special Tahsildar, Land Acquisi tion, Vishakapatnam vs Smt, A. Mangala Gown, ; , relied on.
2 In the instant case, the lands involved are of even level and fit for construction without the necessity for levelling or reclamation.
Having found that the land is to be valued only as building sites and stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduction.
[177 F H] 3.
The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circum stances it would be permissible to take into account the price fetched by the small plots of land.
If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a 174 developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted.
With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possi ble to utilise the entire area in question as house sites.
In respect of the land acquired for the road, the same advantages are available and it did not require any further development.
[178 B,C).
|
Civil Appeal No. 1942 of 1974.
Appeal by Special Leave from the Judgment and Order dated the 20 5 1974 of the Punjab and Haryana High Court at Chandigarh in Civil Writ No. 2169 of 1972.
L. N. Sinha, Solicitor General and Naunit Lal for the Appellant.
Kapil Sibal and P. R. Ramesh for Respondent No. 1.
P. P. Rao for the Applicant Intervener.
The Judgment of the Court was delivered by KHANNA, J.
This appeal by special leave by the State of Haryana is directed against the judgment of Punjab and Haryana High Court whereby petition under articles 226 and 227 of the Constitution of India filed by Des Raj Sangar respondent was allowed and order dated July 13, 1972 of the Haryana Government abolishing the post of Panchayati Raj Election Officer and terminating the services of the said respondent was quashed.
Des Raj Sangar respondent (hereinafter referred to as the respondent) joined service as a clerk in the Panchayat Department of the then Punjab Government in 1942.
The respondent was in due course promoted and confirmed as Head Assistant.
In 1961 while the respondent was officiating as a Superintendent in the Panchayat Department, he was appointed Officer on Special Duty (Elections).
The post of Officer on Special Duty (Elections) was an ex cadre post, while that of Superintendent was included in the cadre.
With effect from November 1, 1961 the post of Officer on Special Duty was re designated as Panchayati Raj Election Officer.
The respondent held the post of Panchayati Raj Election Officer temporarily till 1964 when that post was made permanent.
The respondent was confirmed as Panchayati Raj Election Officer with effect from September 19, 1964.
The decision to confirm the respondent was taken with a view to ensure the lien of the respondent on that post as the respondent had been selected by the Government of India as Gram Panchayat Officer in the Indian Aid Mission, Nepal.
An undertaking was also obtained from the respondent at the time he was confirmed that this would not affect the seniority of B. N. Sharma, who was senior to the respondent and who was then holding the temporary post of Planning Officer.
On the reorganization of the erstwhile State of Punjab with effect from 1036 November 1, 1966 the post of Planning Officer held by B. N. Sharma was allocated to the State of Punjab, while that of Panchayati Raj Election Officer held by the respondent was allocated to the State of Haryana.
From November 1, 1966 till April 16, 1971 the respondent worked as Planning cum Panchayati Raj Election Officer in the Panchayat Department of Haryana Government.
On April 16, 1971 the Haryana Government created eight temporary posts of Deputy Directors in the Panchayat Department in the pay scale of Rs. 400 1100.
The post of the respondent was also re designated as Deputy Director Panchayat with effect from April 16, 1971.
A notification was subsequently issued on May 13, 1971 superseding the earlier notification and the respondent 's post was again designated as that of planning cum Panchayati Raj Election Officer.
On the same day instead of the eight temporary posts of Deputy Directors, nine posts of Deputy Directors were created.
Two of those Deputy Directors were to be posted at the headquarters, one to deal with land development work and the other to deal with legal work, while seven of the Deputy Directors were to work in the field.
These seven posts of Deputy Directors meant for the field work were subsequently abolished.
Another post of Officer on Special Duty (Planning) in the grade of Rs. 400 800 was created in October 1971.
A. N. Kapur, who was junior to the respondent but who had been confirmed as Superintendent, was appointed Officer on Special Duty (Planning).
On April 13, 1972 the impugned order was made and the same reads as under: ORDER The Governor of Haryana is pleased to order that in view of the extreme financial stringency the permanent post of the Panchayati Raj Election Officer in the Panchayat Department, Haryana, in the scale of Rs. 400 40 1000/50 1100 should be abolished with immediate effect.
Consequent upon the abolition of the post of the Panchayati Raj Election Officer the Governor of Haryana is further pleased to order that the services of Shri Des Raj Sangar who is holding the post of the Panchayati Raj Election Officer in a substantive permanent capacity should be dispensed with immediate effect.
He should relinquish the charge of his post immediately.
He is allowed three months ' emoluments i.e. pay and allowances as gratuity in lieu of three months notice in accordance with the provisions of rule 5.9 of the Civil Services Rules, Volume II.
He shall be entitled to pension/gratuity in accordance with the rules in Chapter VI of the Civil Service Rules, Volume II, as amended from time to time, but the pension shall not be payable for the period in respect of which he has been allowed gratuity in lieu of three months ' notice.
J. section Sarohia Secretary to Govt.
Haryana Chandigarh Development & Panchayat Department Dated: 13th July, 1972 1037 The respondent in his petition while assailing the impugned order levelled allegations of mala fide against Shri Shyam Chand, then Minister for Development and Panchayats, Haryana but the said allegations were not pressed at the time of arguments.
Following two contentions were advanced on behalf of the respondent: (1) The impugned order dated July 13, 1972 abolishing the post of Planning cum Panchayati Raj Election Officer held by the respondent and the consequent termination of his services was arbitrary and had no reasonable nexus with the object sought to be achieved, namely, meeting the financial stringency.
The impugned order was stated to be violative of articles 14 and 16 of the Constitution inasmuch as the respondent who was at all times selected for higher posts and got promotions from the lower posts in the cadre was being thrown out of the job on the pretext of the abolition of the post permanently held by him, whereas persons junior to him in rank and less meritorious were retained in service.
(2) In view of the provisions of rule 3.14 and other relevant rules of Punjab Civil Services Rules, the moment the post held by the respondent was abolished his lien got revived on the post of Head Assistant which he had held substantively before his promotion to the ex cadre post and therefore his services could not be terminated, and he was in any case entitled to the admittedly existing post of Head Assistant.
As against the above, it was urged on behalf of the State of Haryana that the Government was well within its rights to decide as to which posts should be abolished to effect economy to meet the financial stringency and that the court could not go into the matter and decide whether the abolition of the post was justified or not.
It was also stated that the respondent could not be reverted to the post of Head Assistant as his lien on the post had been terminated when he was confirmed against the permanent post of Planning cum Panchayati Raj Election Officer.
The learned Judges of the High Court held that the impugned order was arbitrary, unreasonable and violative of articles 14 and 16 of the Constitution.
The order as such was quashed.
In view of the above finding, the learned Judges did not go into the second contention advanced on behalf of the respondent on the basis of rule 3.14 of the Punjab Civil Services Rules.
In appeal before us learned Solicitor General on behalf of the appellant State has urged that it is for the State Government to decide as to which post should be abolished and in case the State Government so decides for administrative reasons, its order in this respect should not have been quashed by the High Court.
As against that, Mr. Sibal on behalf of the respondent has canvassed for the correctness of the view taken by the High Court.
There is, in our opinion, considerable force in the contention advanced on behalf of the appellant in this respect.
Whether a post should be retained or abolished is essentially a matter for the Government to decide.
As long as such decision of 1038 the Government is taken in good faith, the same cannot be set aside by the court.
It is not open to the court to go behind the wisdom of the decision and substitute its own opinion for that of the Government on the point as to whether a post should or should not be abolished.
The decision to abolish the post should, however, as already mentioned, be taken in good faith and be not used as a cloak or pretence to terminate the services of a person holding that post.
In case it is found on consideration of the facts of a case that the abolition of the post was only a device to terminate the services of an employee, the abolition of the post would suffer from a serious infirmity and would be liable to be set aside.
The termination of a post in good faith and the consequent termination of the services of the incumbent of that post would not attract article 311.
In M. Ramanatha Pillai vs The State of Kerala & Anr.(1) Ray C.J. speaking for the Constitution Bench of this Court observed: "A post may be abolished in good faith.
The order abolishing the post may lose its effective character if it is established to have been made arbitrarily, malafide or as a mask of some penal action within the meaning of article 311 (2).
" It was further observed: "The abolition of post may have the consequence of termination of service of a government servant.
Such termination is not dismissal or removal within the meaning of article 311 of the Constitution.
The opportunity of showing cause against the proposed penalty of dismissal or removal does not therefore arise in the case of abolition of post.
The abolition of post is not a personal penalty against the government servant.
The abolition of post is an executive policy decision.
Whether after abolition of the post, the Government servant who was holding the post would or could be offered any employment under the State would therefore be a matter of policy decision of the Government because the abolition of post does not confer on the person holding the abolished post any right to hold the post." According to the impugned order, the post of the Panchayati Raj Election Officer was abolished in view of the extreme financial stringency.
In support of the above order, Shri G. L. Bailpur, Secretary to the Government of Haryana, filed affidavit.
According to that affidavit, the post of Panchayati Raj Election Officer was created simply for the conduct of elections of the Panchayati Raj Bodies.
The other duties which were performed by the respondent were only as a measure of temporary arrangement.
In order to streamline the Department the Government felt that the Department should be reorganised and as a result of reorganisation those duties which had nothing to do with the job of the Panchayati Raj Election Officer were with drawn and given to separate Deputy Directors of Panchayats.
The 1039 duties pertaining to legal matters and complaints against Panchas, Sarpanches and the members of the Panchayat Samitis were of such nature that the same required a legal background and field experience by the officer handling the subject.
Those duties were, therefore, given to Deputy Director of Panchayat (Legal) who was a Law graduate and had a long field experience as Block Development and Panchayat Officer.
After the reorganisation of the Department, the only work left with the Panchayati Raj Election Officer was that of conducting elections of Panchayati Raj Bodies.
As this work was of a periodical nature, the Government thought it fit to abolish it.
It was also stated in another affidavit filed on behalf of the appellant State that the post of Panchayati Raj Election Officer and the seven posts of field Deputy Directors were abolished as an economy measure to meet financial stringency.
We see no cogent ground to question the averments made in the above affidavits.
The averments show that the decision to abolish the post of Panchayati Raj Election Officer was taken because of administrative reasons.
The question as to whether greater economy could have been brought about by adopting some other course is not for the court to go into, for the court cannot sit as a court of appeal in such matters.
It may be that some of the functions which were being previously performed by the respondent are now being performed by Deputy Directors whose posts have not been abolished, this fact would not show that the decision to abolish the post held by the respondent was not taken in good faith.
After the posts of Deputy Directors had been created and had been in existence along with the post of Panchayati Raj Election Officer for a number of months, the Government, it would appear, decided to abolish some of the posts to meet the financial stringency.
In taking the decision as to which post to abolish and which not to abolish, the Government, it seems, took into account the relative usefulness of each post and decided to abolish the seven posts of field Deputy Directors and the one post of Panchayati Raj Election Officer.
This was a matter well within the administrative discretion of the Government and as the decision in this respect appears to have been taken in good faith, the same cannot be quashed by the court.
The fact that the post to be abolished is held by a person who is confirmed in that post and the post which is not abolished is held by a person who is not permanent would not affect the legality of the decision to abolish the former post as long as the decision to abolish the post is taken in good faith.
We would, therefore, hold that the High Court was in error in quashing the order of the Government whereby the post of Panchayati Raj Election Officer had been abolished.
There appears to be, however, considerable force in the second contention advanced on behalf of the respondent that on the abolition of the post of Panchayati Raj Election Officer, his services should not have been terminated.
According to clause (a) (2) of rule 3.14 of Punjab Civil Services Rules Vol.
I Part I as applicable to Haryana State, a competent authority shall suspend the lien of a Government servant on a permanent post which he holds substantively if he is appointed in a substantive capacity to a permanent post outside the cadre on which he is borne.
According to clause (e) of that rule, a 1040 Government servant 's lien which has been suspended under clause (a) of that rule shall revive as soon as he ceases to hold a lien on the post of the nature specified in sub clauses (1), (2) or (3) of that clause.
The above provisions were considered by us in the case of T. R. Sharma vs Prithvi Singh & Anr.(1) and it was held that in the absence of a written request by the employee concerned, the lien on the post permanently held by him cannot be terminated.
It is nobody 's case that any written request was made by the respondent for terminating his lien on the post of Head Assistant.
As such, the lien of the respondent on the post of Head Assistant should be held to have immediately revived as soon as the post of Panchayati Raj Election Officer was abolished.
It has been pointed out by Mr. Sibal that officials who were junior to the respondent have in the meanwhile been promoted to higher posts.
It would be for the authorities concerned to take such consequential steps as may be necessary in accordance with the rules because of the revival of the lien of the respondent on the post of Head Assistant.
Mr. Sibal has also stated that the respondent may exercise his option of taking compensation pension in accordance with rule 5.2 of the Punjab Civil Services Rules Vol.
II because of the abolition of the post of Panchayati Raj Election Officer.
In case the respondent does so, it would be for the Government to pass appropriate orders in the matter.
Submission has further been made by Mr. Sibal that the respondent should not in view of the hardship suffered by him be compelled to make refund out of the salary which he has been drawing during the pendency of the appeal.
This again is a matter which is entirely for the Government to decide and we are sure that the Government would pass appropriate order keeping in view all the circumstances of the case.
We accordingly accept the appeal and set aside the judgment of the High Court.
We hold that the order of the Government abolishing the post of Panchayati Raj Election Officer does not suffer from any infirmity and as such is not liable to be quashed.
We further hold that on the abolition of that post, the lien of the respondent on the post of Head Assistant stood revived.
The parties in the circumstances shall bear their own costs throughout.
V.P.S. Appeal allowed.
| At the time of passing of the Madras Estates (Abolition and Conversion into Ryotwari) Act (Madras Act XXVI of 1948), a 15/16th portion of village Karuppur situated within the Zamindari of Ramanathapuram was hold by the inamdars under a pre settlement grant confirmed by the British Government, the estate being permanently settled in 1802.
The remaining one sixteenth portion was held by the holders of darmila or post settlement inams made by the proprietor of the estate.
In exercise of the powers conferred by section 1(4) of the Madras Act XXVI of 1948 the State of Madras issued a notification dated 22nd August 1949 bringing the Act into force as regards the Ramanathapuram estate from 7th September 1949, the latter Zamindari including one sixteenth part of Haruppur village.
The respondent the holder of the one sixteenth inam contended that under section 1(3) of the Madras Act XXVI of 1948 the State of Madras bad power to notify only what would be estates as defined in section 3(2) of the Madras Estates Land Act I of 1908 and that one sixteenth part of the village of Karuppur included in the notification was not an estate as defined in that section and the notification was therefore ultra vires.
Held (repelling the contention) that when the darmila inam does not relate to the entire village but only to a fraction of it, it must be held to retain its character as part of the estate in the hands of the inamdar and when the estate is notified under section 1(4) of the Madras Act XXVI of 1948 the inam will vest in the State under section 3(b) of the Madras Act XXVI of 1948 and therefore one sixteenth portion of the village of Karuppur forming a darmila inam will vest in the State.
Under the provisions of the Madras Act XXVI of 1948 the darmila minor inamdar is entitled to claim compensation for the transfer of his portion of the estate to the Government.
115 908 Darmila minor inam is not protected by section 20 of the Act.
Brahmayya vs Achiraju ([1922] I.L.R. and Nara yanaraju vs Suryanarayudu ([1939] 66 I.A. 278), referred to.
|
ivil Appeal Nos.
4339 4341 of 1990.
From the Judgment and Order dated 30.5.90 of the Allaha bad High Court in W.P. No. 1841 of 1990.
Kapil Sibbal, Satish Chandra, Ms. Shobha Dikshit, R.K. Virmani and N.D. Garg for the appearing parties.
The Judgment of the Court was delivered by RANGANATHAN, J.
These three petitions can be disposed of by a common order.
Since we have heard counsel at some length we grant special leave in these petitions and proceed to dispose of the appeals.
In the Moti Lal Nehru Medical College (M.L.N. College) at Allahabad there are 8 seats for a post graduate course in Obstetrics and Gynecology.
Of these, 6 seats are reserved for institutional candidates and two are reserved for exter nal candidates.
The principal of the college has filled up all the 8 seats by admitting institutional candidates and without considering the cases of any external candidate.
Among the institutional candidates Dr. Juhi Jain and Dr. Padma Panjwani, who had obtained the highest percentage of marks, have been admitted and Dr. Vandana Singh, who had applied for admission as an external candidate, was not considered.
Dr. Vandana Singh, therefore, approached the Allahabad High Court, which upheld her contention and held that the two seats in question should have been filled up in accordance with a notification published by the State Gov ernment on 26th April, 1986 (amending a previous notifica tion dated 15.12.
1982) which provided as follows: "In every speciality, seventy five percent seats in a par ticular medical college shall be reserved for the candidates who have passed the M.B.B.S examination from that college and against the remaining twenty five percent seats, candi dates who have passed M.B.B.S. examination from other Medi cal Colleges and are bona .fide resident of Uttar Pradesh.
shall be eligible for admission on the basis of merit along with the candidates who have passed the M.B.B .S. examina tion from that very college.
The court, therefore, set aside the admission of Dr. Juhi Jain and 877 Dr. Padma Panjwani and directed the principal of the Medical College to consider the cases of Dr. Vandana Singh and other external candidates, who were eligible for admission to the "open" twenty five per cent seats on merits and in accord ance with law.
The Principal of the Medical College, Dr. Juhi Jain and Dr. Padma Panjwani have preferred these appeals.
It has been submitted that the High Court has overlooked that the admis sions in question were to the second year or the post gradu ate degree course and were being considered under the terms of a residency scheme dated 22.8.89.
As per the terms of this scheme, 25% of the seats in the course (here, two seats) were to be filled in by candidates on the basis of an examination conducted by the All India Institute of Medical Sciences.
However, no such examination had been conducted by All India Institute and the college instead of leaving the seats vacant, decided to fill them up by internal candidates on the basis of merit.
In doing this, the principal of the college was only complying with the terms of a decision rendered by the Allahabad High Court in the case of Dr. R.P. Pandey, (Writ Petition No. 8181 of 1989) and a precedent approved by the Directorate General of Health Services, Medical Examination Cell, Nirman Bhavan, New Delhi, which in a letter to the principal of an Agra College, had, when unable to recommend candidates on the basis of an All India examination for a particular course released these seats in favour of internal candidates.
It has been submitted on behalf of Dr. Juhi Jain that, even assuming that the appli cation of Dr. Vandana Singh had to be considered, the High Court should have restricted itself to quashing the admis sion to one of the two seats and upheld the admission of Dr. Juhi Jain, who had secured higher marks than Dr. Padma Panjwani.
It is submitted on behalf of Dr. Padma Panjwani that even assuming that Dr. Vandana Singh 's application merited consideration, the interests of all the three candi dates could have been safeguarded by directing the State Government to create one additional seat and accommodate all the three candidates.
Reliance is placed in this respect on certain observations made by this Court in the case of one Mridula Avasthi; , Finally, it has also been submitted, on behalf of the appellants, that Dr. Vanda na Singh was not eligible for admission even on the terms of the notification dated 26.4.86 since she was not a bona fide resident of Uttar Pradesh.
It is stated that she had passed her M.B.B.S. examination from the State of Bihar and had also taken admission in a post Graduate Diploma Course in Gynecology and Obstetrics at Darbhanga Medical College, Laneriasarai, Bihar, a fact which she had concealed from her writ petition.
878 We have today passed a detailed judgment in regard to certain admissions made pending implementation of the resi dency scheme introduced by the State of U.P. in our judgment in a batch of appeals preferred by Dr. Harihar Prasad Singh & Ors.
as well as the State of Uttar Pradesh, [1990] 3 SCR 895 (Civil Appeal, Nos.
and, for reasons that will be appar ent later, the judgment in the present appeals will have to be read along with the judgment in the said appeals for a full and proper understanding of the issues involved.
That other decision 'turned on the interpretation of paragraph 5 of the residency scheme and also pertained to admissions to the second year of the post graduate degree course.
The scheme contained a transitory provision in para 5 in respect of certain persons who were house officers between 1987 and 1989.
the related batch of appeals raised a controversy pertaining to 75% of the seats in the second year of the post graduate courses which were reserved for institutional candidates.
Here the question arises in respect of the remaining 25% of the seats reserved for "external" candi dates.
To understand the point at issue, we shall briefly touch upon those aspects of the residency scheme which we had no occasion to consider in the batches of appeals above referred to but which are material for the purposes of these appeals.
By the notification dated 22.8.89 a scheme called the residency scheme was introduced, which dealt, inter alia, with the question of admission to post graduate specialities in medicinal courses.
These cases, like the other batches, have proceeded on the assumption that, so far as institu tional candidates are concerned, admissions to the second year of a degree course could be granted to persons like Dr. Juhi Jain and Dr. Padma Panjwani who had completed the M.B.B.S. degree examination, done one year of internship and had been working as house officers in the State of U.P. on 22.8.89.
There was a further controversy in those cases as to whether even persons who had been working as house offi cers since 1.8.1987 would be eligible for admission to this course and we have, by our judgment in the connected ap peals, answered this question in the affirmative.
That question would become relevant here only if we do not agree with the view taken by the High Court here.
We shall, there fore, keep that issue aside for the time being and shall deal with it later.
To continue the narration regarding the scheme, it provided for admission, to the three year post graduate course, of candidates who had passed the M.B.B.S. examina tion and completed one year 's internship.
Seventy five per cent of the admission to these courses was 879 to be available to institutional candidates on the basis of an entrance examination; the balance of twenty five per cent of the seats was to be filled up on the basis of an all India entrance examination.
This provision was in tune with certain directions given by this Court from time to time for regulating admission to medical colleges in various parts of the country.
This Court had in particular directed that while 75% seats in each medical college all over the country could be filled in by local or institutional candidates, the balance of 25% should be filled up on an all India basis.
Elaborate directions were also given by this Court to enable the All India Medical Institute (A.I.I.M.S.) to conduct a competitive test for selecting the candidates for these seats reserved on an all India basis.
The scheme obviously referred to the all India competitive entrance examination to be conducted by the A.I.I.M.S. every year.
Indeed such an examination had been held by he A.I.I.M.S. in January Febru ary 1989 and the candidates recommended had been taken into the medical colleges in U.P. as per the regulations then existing.
However, since the new scheme came into being in the middle of the year, there was no possibility of either a local entrance examination nor an all India examination being held to regulate the admissions to the new course.
C1.3(f) however provided that, for the 75 % institutional seats, competitive entrance examination shall be enforced from the fresh batch and that before its enforcement the admission to institutional seats in residency shall be done on the basis of the merit of the M.B.B.S. examination.
It was, however, silent in regard to the balance 25% seats.
The question arose, therefore, as to what was to be done in respect of the remaining 25% seats.
To meet the situation, the Direction of Medical Education issued directions, on 3.10.89, to the following effect: "Since there will be no admission of external students this year against 25 % open seats, therefore, after merging these open seats with 75% additional seats, the admission of students of 1982 supplementary batch and 1983 regular batch should be done against the entire 100% seats by making their combined merit.
" Accordingly, it seems admissions to 100% seats in the first year of the three year post graduate scheme was thrown open fully to internal candidates, the admissions being decided on the basis of their merit in the M.B.B.S. examination.
We are, however, not concerned with that issue here.
We are here concerned with admissions to the second year of the 880 residency scheme.
The scheme made a provision in the second sub para of para 5 for the adjustment of 'persons serving in U.P. as house officers by absorbing them into the second year of the residency scheme.
The provision has been set out and its implications discussed elaborately in our judgment in the allied batches of appeals and need not be repeated here.
It is not quite clear whether the second sub para of para 5 of the scheme covers all the seats in the second year of the course or only 75% thereof.
However, it is apparently understood only as pertaining to the 75% seats reserved for institutional candidates and, as there was no other provi sion in regard to the balance of 25% of the seats, it was decided that those seats should also be filled in only by institutional candidates.
However, in the meanwhile, an advertisement had been issued by the Principal of M.L.N. Medical College, Allahabad on 21.9.89.
This advertisement pertained only to the filling up of the seats comprising the 75% reserved for institutional candidates.
There was no advertisement regarding the rest Dr. Vandana Singh applied for admission to the second year of the degree course.
In this state of affairs it is perhaps possible to dispose of the matter before us by holding that the application of Dr. Vandana Singh can only be treated as one in response to the advertisement of 21st September, 1989 and so could not have been entertained as she was not an institutional candidate and that she has no locus standi, on the basis of that application, to challenge the admission of other institu tional candidates.
It is also possible to interpret the second sub para of para 5 of the scheme as covering the entirety of the seats for the second year of the course and not merely 75% of them.
In this view also, the application of Dr. Vandana Singh would have to be rejected.
It could, however, be argued that as the High Court has proceeded on the footing that para 5 pertains only to 75% of the seats, quite irrespective of the basis of her applica tion, Dr. Vandana Singh has a right to insist that under the scheme 25% of the seats should be thrown open for all India competition and that the admissions based on a different basis were rightly quashed.
If we assume this postulate to be correct and go strictly by the terms of the notification, admissions should be on the basis of an all India examina tion.
There was, however, no immediate possibility of any such examination being held for admission to the course for 1989 90.
In this state of affairs, one possible view which the High Court has taken is that these seats must be kept reserved for external candidates and the college must now take steps to invite external candidates in accordance with the terms contained in the notification dated 26.4.86 if that notification were applicable and select them in the order of merit.
The college, however, 881 took the view that since no all India candidates were avail able on the basis postulated in the scheme, it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In fact the State claims that this course of action has been approved by the decision of the High Court in the case of Dr. R.P. Pandey.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candi dates on the basis of merit.
If this be so, such advertise ment cannot be continued to persons who are residents of U.P. as was envisaged by the notification dated 26th April, 1986.
That notification had been issued at a time when the concept of all India reservation for 25% Of the seats had not been adumbrated by this Court.
Even if we assume that the High Court was right in saying that external candidates were eligible for admission, that eligibility cannot be restricted only to those who had already applied indeed, Dr. Vandana Singh appears to have been the only one who had applied to the course in the M.L.N. College but should be thrown open to all external candidates fulfilling the quali fications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for applica tion from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
In our opinion, the State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an all India examination, and such an examination is conducted by All India Institute of Medical Sciences every year for all medical colleges in India.
In our opinion, the decision taken by the State Government and the college was a practi cal one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a soli tary application from an external candidate.
For the reasons stated above, we are of the opinion that the High Court erred in quashing the admissions made on the grounds given by it, We uphold the rejection of Dr. Vandana Singh 's application.
In the view we have taken it is not necessary to express any opinion as to whether, even on the basis of the notification dated 26.4.86, Dr. Vandana Singh is eligible for consideration for admission to the course or she disqualified from such consideration for the reasons urged on behalf of the State, Dr. Juhi Jain and Dr. Padma Panjwani.
882 For the reasons mentioned above, we set aside the order of the High Court and hold that the application of Dr. Vandana Singh was rightly rejected by the college.
We should, however, like to point out that, in the connected batch of appeals, we have upheld that interpretation by the High Court of Para 5 of the scheme and held that the eligi bility for admission of institutional candidates is not confined to those who were on house jobs as on 22.8.89 but would also extend to those institutional candidates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifica tions and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as of Dr. Juhi Jain and Dr. Padma Panjwani to 25% of the seats had been made by excluding institutional candidates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selections of Dr. Juhi Jain and Dr. Padma Panjwani will be valid only if they come through successfully on merits on such reconsideration.
We have, therefore, to agree with the High Court that the admissions of Dr. Juhi Jain and Dr. Padma Panjwani should also be set aside but direct that the admissions be redone in the light of our observations in these two judgments.
These appeals are disposed of accordingly.
We, however, make no order as to costs.
| For the academic year 1989 90, the appellant College had 8 seats in the post graduate course in Obsterics and Gyne cology.
Of these, six were reserved for institutional candi dates, and two for external candidates.
The Principal filled up all the eight seats by admitting institutional candidates without considering the case of any external candidate.
One of the external candidates approached the High Court by way of a Writ Petition.
The High Court set aside the admission of two .institutional candidates who were admitted against the quota for external candidates, and directed the Princi pal to consider the case of the petitioner and other exter nal candidates who were eligible for admission to the 'open ' 25% seats on merits, in accordance with law.
Aggrieved, the Principal and the two institutional candidates whose admis sion was set aside by the High Court, have preferred these appeals, by special leave.
Disposing of the appeals, HELD 1.
The appellant College, took the view that since no All India candidates were available on the basis postu lated in the Residency Scheme it would be appropriate to throw open the entire 100% to institutional candidates.
It is not suggested that this proposal was actuated by any mala fides.
In that the State claims that this course of action has been approved by the decision of the High Court in a case before it.
It may be that this is not the only view possible and that it is also possible to take the view that the college should have advertised these posts and filled them up by external candidates on the basis of merit.
If this be so, such advertisement cannot be confined to persons who are residents of U.P. as was envisaged by the notifica tion dated 26th April, 1986.
That notification been issued at a time when the 875 concept of All India reservation for 25% of the seats had not been adumbrated by this Court.
Even if it is assumed that the High Court was right in saying that external candi dates were eligible for admission, that eligibility cannot be restricted only to those who had already applied but should be thrown open to all external candidates fulfilling the qualifications.
This process cannot be completed within two weeks, as directed by the High Court.
To call for appli cations from all external candidates and select them, either on the basis of an examination or otherwise, will be a very lengthy and time consuming process.
The State Government and the college cannot be faulted for having decided to fill up the vacancies by offering these seats also to institutional candidates.
This is a decision taken only for a transitional period, because, from 1990 onwards, admissions will be regulated on the basis of an All India examination, and such an examination is conducted by the All India Institute of Medical Sciences every year for all medical colleges in India.
The decision taken by the State Government and the college was a practical one to tide over a transitional difficulty and there is no justification to upset the same on the basis of a solitary application from an external candidate.
[881A F] 2.
On a proper interpretation of Para 5 of the Residency Scheme the eligibility for admission of institutional candi dates is not confirmed to those who were on house jobs as on 22.8.89 but would also extend to these institutional candi dates who have been in house jobs since 1.8.87.
The result of these two judgments read together will be that the entire 100% of the institutional seats should be filled up from out of all such applicants, subject to their fulfilling any other qualifications and requirements that may be in force.
Earlier, the admission of the six candidates to 75% of the seats as well as the admission of the two candidates to 25% of the seats had been made by excluding institutional candi dates who had completed their house jobs between 1.8.87 and 22.8.89.
This will need to be reviewed now.
The entire process of admission will now have to be redone in the light of these decisions.
The selection of the two institutional candidates in question will be valid only if they come through successfully on merits on such reconsideration.
The High Court was right in holding that their admissions should be set aside.
The admission be redone in the light of the observations in these two judgments.
[882B E] Dr. Harihar Prasad Singh & Ors.
vs Principal, Moti Lal Nehru Medical College & Ors.
, [1990] 3 SCR 895 referred to.
|
l Appeal No. 11 29 of 1965.
Appeal from the judgment and order dated April 15, 16, 17, 1963 of the Bombay High Court in Wealth Tax Reference No. 2 of 1961.
R.J. Kolah, N. D. Karkhanis and 0.
C. Mathur, for the appellant.
B. Sen, R. Ganapathy Iyer and R. N. Sachthey, for the res pondent.
769 The Judgment of the Court was delivered by Shah, J.
For the assessment year 1957 58 the appellant Company claimed in proceedings for assessment of wealth tax that the following four amounts be deducted in the computation of its net wealth: (1)Rs.
29,44,421 in, respect of income tax liability relating to the assessment year 1957 58.
This amount included Rs. 2,95,869 representing the last instalment of advance tax under section 18A in respect of which a notice of demand had been issued.
(2)Rs.
3,70,083 in respect of business profits tax liability.
(3) Rs. 20,23,500 in respect of proposed dividend.
(4) Rs. 25,02,675 "on account of accrued liability for gratuity to workmen and staff as per the award of Industrial Court and Labour Appellate Tribunal.
" The claim was rejected by the Wealth tax Officer.
The Appellate Assistant Commissioner accepted the claim of the appellant Company in respect of the last instalment of the advance tax for which a notice of demand had been issued, and rejected the claim in respect of the rest.
The Income tax Appellate Tribunal upheld the claim of the appellant Company in respect of the 1st, 2nd and the 4th items and rejected the claim in respect of the 3rd item.
At the instance of the Commissioner, the following four questions were referred to the High Court of Judicature at Bombay under section 27(1) of the Wealth tax Act 27 of 1957: "(1) Whether on the facts and circumstances of this case the last instalment of advance tax in the sum of Rs. 2,95,869 paid by the assessee after the valuation date in accordance with the notice of demand dated 20 10 1956 is an admissible deduction under Sections 7(2) and 2(m) of the Wealth tax Act for the purpose of computation of the net wealth of the assessee for the assessment year 1957 58 ? (2)Whether on the facts and circumstances of the case in computing the net wealth of the assessee under Section 7(2) read with Section 2(m) of the Wealth tax Act the liability for income tax and business profits tax could be allowed as a deduction? (3) Whether on the facts and circumstances of the case the liability in the sum of Rs. 25,02,675 which arose as a result of the awards dated 28 10 1948, 28 11 1956 and 17 10 1954 before the valuation date or any part thereof is allowable as a deduction in determining the net wealth of the assessee under Section 7(2) read with Section 2(m) of the Wealth tax Act ? (4)Whether on the facts and circumstances of the case of the sum of Rs. 20,23,500 being the provision made for dividends and shown as a liability in the balance sheet of the assessee company could be allowed as a deduction in computing the net wealth of the assessee company?" At the hearing before the High Court, the fourth question was not pressed by the appellant Company.
The High Court answered the first question in the affirmative, the second question in the affirmative insofar as it related to the estimated liability of business profits tax subject to verification by the Wealth tax Officer, and in the negative insofar as it related to the estimated liability of income tax.
The third question was answered in the negative.
In this appeal the Company challenges the correctness of the answers to the second part of the second question and the third question.
The second question insofar as it relates to estimated liability for payment of income tax needs no detailed consideration, for the answer thereto will be governed by the judgment of this Court in Kesoram Industries and Cotton Mills Ltd. vs Commissioner of Wealth tax (Central, Calcutta( ').
It was held by this Court in that case that liability to pay income tax was a present liability though the tax became payable after it was quantified in accordance with ascertainable data: there was therefore a perfected debt at any rate on the last day of the accounting year and not a contingent liability, and the amount of the provision for payment of income tax in respect of the year of account was a "debt owed" within the meaning of section 2(m) on the valuation date and was as such deductible in computing the net wealth.
The view expressed by the High Court on the second question insofar as it relates to provision for income tax cannot therefore be sustained and that part of the question should be answered in the affirmative.
There remains the third question.
Counsel for the Company had conceded before the High Court that the liability to pay gratuity to the employees whose services were not terminated in the relevant year of account was merely contingent, since it arose on the happening of certain events such as death, physical incapacity, voluntary retirement, or resignation, and was on that account not a debt within the meaning of section 2(m) of the Act.
But it was contended before the High Court that the present value of the liability for payment of gratuity was a permissible deduction in valuing the assets of the business of the assessee under section 7(2)(a) of the Act.
The (1)[1966] 2 S.C.R. 688 : ; 772 2.
On voluntary retirement or resignation of an employee After 15 years ' continuous service in the company 15 months ' salary.
On termination of his service by the Company (a)After 10 years ' continuous service but less than 15 years ' service in the company 3/4th of one month 's salary for each year of service.
(b)After 15 years ' continuous service in the company 5 months ' salary.
A gratuity will not be paid to any employee who is dismissed for dishonesty or misconduct.
" The right to obtain gratuity under the awards arises only when there is determination of employment and not before.
The liability does not exist hi praesenti: it is contingent upon the determination of employment.
This Court pointed out in Kesoram Industries & Cotton Mills ' case( ') at p. 703: 'debt is a sum of money which is now payable or will become payable in future by reason of a present obligation: debitum in praesenti, solvendum in futuro. ' The said decisions also accept the legal position that :a liability depending upon a contingency is not a debt in praesenti or infuturo till the contingency happened.
But if there is a debt the fact that the amount is to be ascertained does not make it any the less a debt if the liability is certain and what remains is only the quantification of the amount.
In short, a debt owed within the meaning of section 2(m) of the Wealth tax Act can be defined as a liability to pay in praesenti or in futuro an ascertainable sum of money.
" Observations made by the High Court of Gujarat in Commis sioner of Wealth tax, Gujarat vs Ajit Mills Ltd.,(2) that deduction for an amount claimed on account of liability for gratuity for workers and employees based on awards of the labour courts and agreements will be admissible deductions in the computation of the net wealth are plainly obiter, and in our judgment are not correct.
The decision of the House of Lords in Southern Railway of Peru Ltd. vs Owen (Inspector of Taxes) (3) that the assessee company (1) ; (3) ; : (2) 771 High Court rejected that contention.
Counsel for the Company has in this appeal contended that no such concession as is recorded in the judgment of the High Court was made, and in any event, the concession being on a question of law was not binding upon the appellant Company.
Section 2(m) at the material time provided: .lm15 " 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 this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than, (i)debts which under Section 6 are not to be taken into account; (ii)debts which are secured on, or which have been incurred in relation to any property in respect of which wealth tax is not chargeable under this Act; " By section 3 the wealth tax is charged for every financial year commencing on and from the first day of April, 1957 on 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.
Broadly speaking net wealth is the difference on the valuation date between the aggregate value computed in accordance with the provisions of the Act of the assets belonging to the assessee and the aggregate value of all the debts owed by the assessee.
If there is no debt owed on the valuation date, it can obviously not be deducted in determining the net wealth which is liable to tax under the Wealth tax Act.
Apart from the concession made by counsel for the Company there is little doubt on the plain terms of the awards that the liability to pay gratuity to the employees of the appellant Company on determination of employment is a mere contingent liability which arises only when the employment of the employee is determined by death, incapacity, retirement or resignation.
The relevant terms of the awards dated October 28, 1948, November 28, 1956 and October 17, 1954 are as follows: "Gratuity should be paid. . on the following, scale: 1.On the death of an employee, while in service of the company or on his becoming physically or mentally incapacitated for further service one month 's salary for each year of service . . . 773 was entitled to charge against each year 's receipts the cost of making provision for the retirement payments which would ultimately be payable as it had the benefit of the employees ' services during that year, provided the present value of the future payments could be fairly estimated, were a permissible deduction in the computation of income tax, have in our judgment no relevance in this case.
In Southern Railway of Peru Ltd 's case( ') under the legislation of Peru a Company operating a railway was bound to pay its employees compensation on the termination of their services.
The right to receive compensation arose on dismissal or on termination of the employment by the employer by proper notice, or on such termination by the death of the employee or on the expiry of the term of ' the employment.
The compensation was an amount equivalent to one month 's salary at the rate in force at the date of determination for every year of service.
The company claimed in the computation of taxable income, under the Income tax Act, 1918, to be entitled to charge against each year 's receipts the cost of making provision for the retirement payments which would ultimately 'be thrown on it, calculating what sum would be required to be paid to each employee if he retired without forfeiture at the close of the year and setting aside the aggregate of what was required in so far is the year had contributed to the aggregate.
It was held that the company was not entitled to make the deductions, but the company was entitled to charge against each year 's receipts the cost of making provision for the retirement payments which would ultimately be payable as it had the benefit of the employees ' services during that year, provided the present value of the future payments could be fairly estimated.
The question arose under the English Income tax Act of 1918.
Lord MacDermott observed at p. 345: say that, in computing his taxable profits for a particular year, a trader, who is under a definite obligation to pay his employees for their services in that year ail immediate payment and also a future payment in some subsequent year, may properly deduct, not only the immediate payment, but the present value of the future payment, provided such present value can be satisfactorily determined or fairly estimated.
" Similar observations were made in the judgment of Lord Radcliff.
But the House in that case was concerned to determine the deductibility of the present value of a liability which may arise in future in the computation of taxable profits for the relevant year under the Income tax Act.
The same considerations cannot, however, apply to a case under the Wealth tax Act, where the liability to pay wealth tax is charged upon the net wealth of an assessee.
; 774 In Commissioner of wealth tax, Gujarat vs New Rajpur Mills Ltd.( ') the assessee company claimed to deduct gratuity payable to employees under an agreement entered into with the labour associations before the valuation date.
The Court in that case observed that the liability was not a debt owed by the assessee on the valuation date since the gratuity was not payable on the valuation date, but was payable only on fulfilment of the ,contingencies set out in those agreements.
But the Court proceeded to observe that since contingent liabilities can be taken into account while computing the net wealth of the asseessee under section 7(2)(a) ,the liability for payment of gratuity under such agreements would 'have to be estimated and the estimated value of the contingent liability would be a permissible deduction in computing the net wealth of the assessee.
In our view the first observation of the Court :is correct, but the second is not.
We will presently set out the reasons for that view.
The alternative plea that under section 7(2)(a) of the Act the appellant Company is entitled to claim deduction even if it cannot do so ,under section 2(m) has, in our judgment, no force.
Section 7 deals with the manner of valuation of assets.
It provides insofar as it is material: "(1) The value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth tax Officer it would fetch if sold in the open market on the valuation date.
(2)Notwithstanding anything contained in subsection (1), (a)where the assessee is carrying on a business for which accounts are maintained by him regularly the Wealth tax Officer may, instead of determining separately the value of each asset held by the assessee in such business, determine the net value of the assets of the business as a whole having regard to the balance sheet of such business as on the valuation date and making such adjustments therein as the circumstances of the case may require;" Section 7 falls in Ch.
II which deals with the charge of wealth tax and assets subject to such charge: it is intended to provide machinery for determination of the value of assets.
It was observed in the minority judgment in Kesoram Industries & Cotton Mills ' case(2) at p.717 : "By the first sub section the Wealth tax Officer is authorised to estimate, for the purpose of determining the (1) (2) ; : ; 775 value of any asset, the price which it would fetch, if sold in the open market on the valuation date.
But this rule in the case of a running business may often be inconvenient and may not yield a true estimate of the net value of the total assets of the business.
The legislature has therefore pro vided in sub section (2)(a) that where the assessee is carrying on a business for which accounts are maintained by him regularly, the Wealth tax Officer may determine the net value of the assets of the business as a whole, having re gard to the balance sheet of such business as on the valua tion date and make such adjustments therein as the circum stances of the case may require.
But the power conferred upon the tax officer by section7(2) is to arrive at a valuation of the assets, and not to arrive at the net wealth of the assessee.
Section 7(2) merely provides machinery in certain special cases for valuation of assets, and it is from the aggregate valuation of assets that the net wealth chargeable to tax may be ascertained.
The power conferred upon the tax officer to make adjustments as the circumstances of the case may require is also for the purpose of arriving at the true valueof the assets of the business.
Sub section (2)(a) of section 7 contemplates the determination of the net value of the assets having regard to the balance sheet and after making such adjustment as the circumstances of the case may require.
It does not contemplate determination of the net wealth, because net wealth can only be determined from the net value of the assets by making appropriate deductions for debts owed by the assessee.
The argument raised by counsel for the assessee is that substantially section 7(2) is a definition section, which extends, for the purposes of the Act, the definition of the 'net wealth ' of assessees carrying on business.
There is no warrant for this argument in the language used in section 7(2).
Counsel was unable to suggest any rational explana tion why, if what he contends was the intention, Parliament should have adopted this somewhat roundabout way of incorporating a definition of net wealth in a section dealing with valuation of assets.
" The majority of the Court did not express any opinion on this question.
From the terms of section 2(m) it appears clear that the tax officer must first determine the aggregate value of all the assets belonging to the assessee on the valuation date, and then determine the aggregate value of all the debts owed by the assessee on the valuation date.
Excess of the aggregate value of the assets over the debts is the net wealth.
The aggregate value of the assets must be 776 computed in accordance with the provisions of section 7.
But in the aggregation of the value of all the debts owed by the assessee on the valuation date, section 7 has no operation.
In holding in New Rajpur Mills ' case() that a contingent liability can be taken into account while computing the net wealth of the assessee under section 7(2) (a), in our judgment, the true function of section 7(2)(a) of the Wealth tax Act was not appreciated.
Section 7 does not deal with the computation of net wealth.
It deals with the computation of the aggregate value of the assets.
Under section 7 the Wealth tax Officer is competent, where the assessee is carrying on business of which accounts are maintained regularly, to determine the net value of the assets of the business as a whole.
But in doing so he determines the value of the assets of the business as a whole, and not the net wealth of the business.
The appeal therefore is partially allowed.
Insofar as the claim relates to deduction of estimated income tax for the assessment year, the answer wilt be in favour of the appellant company, and in so far as the claim relates to deduction of gratuity payable to the employees of the company, the answer will be in the negative.
There will be no order as to costs in this appeal.
V.P.S. Appeal allowed in part.
| In the computation of the net wealth of the appellant company under section 2(m) of the Wealth Tax Act 1957, two deductions were claimed the company : (i) the amount of estimated income tax for the assessment year and (ii) the amount of gratuity payable by the company to its employees under certain industrial awards.
HELD : The first claim was allowable but not the second.
[776 D] Under section 2(m) of the Act, the Wealth Tax Officer must first determine the aggregate value of all the assets belonging to the assessee on the valuation date, and then determine the aggregate value of all the debts owed by the assessee on the valuation date.
Excess of the aggregate value of the assets over the debts is the net wealth.
But on the terms of the awards the liability to pay gratuity did not exist in present : it was contingent upon the determination of employment by death, incapacity, retirement or resignation of the employee, and not before.
Therefore, it was not a debt owned by the assessee on the valuation date.
[772 C D; 775 H] Nor could the appellant company claim the deduction under section 7(2)(a) of the Act.
The aggregate, value of the assets must be computed in accordance with the provisions of section 7.
But in the aggregation of the value of all the debts owned by the assessee on the valuation date, section 7 has not operation.
Section 7 does not deal with the computation of net wealth but only with the determination of the not value of the assets as a whole.
[776 A C] Kesoram Industries and Cotton Mills Lid.
vs Commissioner of Wealth Tax (Central) (Calcutta), ; , followed.
Observations Contra in Commissioner of Wealth Tax, Gujarat vs Ajit Mills Ltd. and Commissioner of Wealth Tax Gujarat vs New Rajpur Mills , disapproved.
Southern Railway of Peru vs Owen (Inspector of Taxes) ; , explained.
|
No. 1685 1691 of 1979 Under Article 32 of the Constitution of India.
Soli J. Sorabjee and K.C. Dua for the Petitioners.
V. Parthasarthy, Girish Chandra and C.V. Subba Rao for the Respondents.
The Order of the Court was delivered by THAKKAR,,J. The question raised in this Writ Petition under Article 32 of the Constitution of India as regards the determination of the market value of the goods manufactured by the petitioner company for the purposes of computation of the excise duty leviable on the same.
The petitioners (manufacturers) are manufacturing electrical goods under a contract with another company known as the Bajaj Electricals Ltd. (here after referred to as buyers).
The agreement between the parties provides for the buyers having the right to reject the 84 goods if the goods are not in accordance with the buyers ' specifications or do not come up to the stipulated standard of quality.
After the manufactured goods are tested, ap proved and accepted, by the buyers the manufacturers apply the label of the brand name of the buyers (in this case 'Bajaj ') on the manufactured goods.
The petitioners contend that the market value of the goods manufactured by the petitioners should be assessed at the price at which the goods are agreed to be sold under the agreement between the manufacturers and the buyers.
On the other hand the respond ent contents that the excise duty must be levied on the basis of the market value fetched by the sale of these goods by the buyers to their wholesalers.
The goods manufactured by the Petitioner Company, which are accepted by the buyers and to which the brand name label 'Bajaj ' is applied are sold by the manufacturers to the buyers at the stipulated price and to none else.
They are not at all sold in the open market by the manufacturers.
The right to sell these goods with the brand name is solely and exclusively that of the buyers having regard to the fact that they alone are the owners of the brand name 'Bajaj '.
The price fetched by the goods manufactured by the petitioner company is the price of the electrical goods 'sans ' the brand name.
And that should be the market value for the purposes of assessing the excise duty payable by the petitioner company which manufactures the excisable goods.
The enhancement in the value of the goods by reasons of the application of the brand name is because of the augmentation attributable to the value of the goodwill of the brand name which does not belong to the manufacturers and which added market value does not accrue to the petitioner company or go into its coffers.
It accrues to the buyers to whom the brand name belongs and to whom to fruits of the goodwill belong.
Excise duty is payable on the market value fetched by the goods, in the wholesale market at the factory gate manufactured by the manufacturers.
It cannot be assessed on the basis of the market value obtained by the buyers who also add to the value of the manufactured goods the value of their own property in the goodwill of the 'brand name ' The Petitioners are therefore right and the respondents wrong.
This point is covered by earlier deci sions of this Court, namely, (1) Union of India vs Cibatul Ltd., , (2) Joint Secretary to the Government of India vs Food specialities Ltd., and (3) Civil Appeal No. 1496 of 1977 disposed of by a Bench of three Judges of this Court by its judgment dated 3rd April, 1986.
The petition must therefore be al lowed.
The respondents shall levy excise duty on the basis of the price charged by the manufacturers to the buyers namely M/s. Bajaj Electricals Ltd. A word of caution is however called for.
Our decision must be understood correct ly not misunderstood conveniently.
We, there 85 fore, clarify that our pronouncement will not enable a manufacturer who manufactures and sells his goods under his own brand name or under a brand name which he has acquired a right to use.
In such a case the sale price fetched by sales effected by him under such brand name in wholesale will be the basis for computation of excise duty payable.
by him So also nothing said herein will come to the rescue of a brand name owner who himself is the manufacturer of goods or to sales effected in favour of 'related ' persons as defined by the Act.
The Central Excises & Salt Act, 1944.
The Bank guarantee, if any, furnished by the petitioners in the context of the present Writ Petition will stand discharged.
No Other point has been argued.
The petition is allowed and the Rule is made absolute to the aforesaid extent.
The Writ Petition is disposed of accordingly.
There will be no order as to costs.
Writ Petitions Nos.
1686 1691 of 1979 raise the same point in the context of other brand names.
These petitions will also stand disposed of in terms of this order with the same direction regarding computation of levy and discharge of guarantee bonds and with no order as to costs.
M.L.A. Petition al lowed.
| Rule 31(v) of the Indian Tourism Development Corporation (Conduct, Discipline and Appeal) Rules, 1978 provides that the services of an employee, who had completed his probationary period and who has been confirmed or deemed to be confirmed, may be terminated by giving him 90 days ' notice or pay in lieu thereof.
The services of the appellant, who was an employee of the respondent Corporation holding the post of Manager of a Hotel at the material time were terminated by Memorandum No. P B(OP) 22 dated 18th September, 1984, in exercise of the powers under the said rule by giving him pay for three months in lieu of notice.
Aggrieved by the said order the appellant filed a writ petition in the High Court assailing the constitutional validity of r. 31(v) of the said Rules, which was summarily dismissed.
Allowing the appeal by special leave, the Court, ^ HELD: 1.
The Indian Tourism Development Corporation is an 924 instrumentality of the State and, therefore, 'State ' within the parameters of Article 12 of the Constitution of India.
[927D E] Central Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr., applied.
2.1 Rule 31(v) of the Indian Tourism Development Corporation (Conduct, Discipline and Appeal) Rules, 1978, is unconstitutional and void, for such a rule which provides for termination of the services of the employees of the respondent Corporation simply by giving ninety days ' notice or by payment of salary for the notice period in lieu of such notice, cannot co exist with Articles 14 and 16(1) of the Constitution of India.
The fundamental right embedded in these Articles is not a mere paper tiger nor is it so ethereal that it can be nullified or eschewed by a simple device of framing a rule which authorises termination of the services of an employee by merely giving a notice of termination.
[930D E;928F;929F] 2.2 The tenure of service of a citizen who takes up employment with the State cannot be made to depend on the pleasure or whim of the competent authority unguided by any principle or policy, nor his services allowed to be terminated on an irrational ground arbitrarily or capriciously.
The authorities cannot be invested with uncontrolled discriminatory power to practise on considerations not necessarily based on the welfare of the organisation but possibly based on personal likes and dislikes, personal preferences and prejudices.
Provincialism, casteism, nepotism, religious fanaticism, and several other obnoxious factors may in that case freely operate on the mind of the competent authority in deciding whom to retain and whom to get rid of.
And these dangers are not imaginary ones.
They are very much real in organisations where there is a confluence of employees streaming in from different States.
Such a rule as in the instant case, is capable of robbing an employee of the dignity, and making him a supine person whose destiny is at the mercy of the concerned authority.
The impugned rule, therefore, deserves to be quashed.
[928H; 929A B; D F] Central Inland Water Transport Corporation Limited & Anr.
vs Brojo Nath Ganguly & Anr., ; State Electricity Board vs D. B. Ghosh, [1985] 2 S.C.R. 1014, referred to.
3.1 The Court has full discretion in the matter of granting relief to suit the needs of the matter at hand.
If satisfied that ends of justice so demand, the Court can certainly direct that the employer shall have the 925 option not to reinstate, provided the employer pays reasonable compensation as indicated by it.
[932G] 3.2 In the sphere of employer employee relations in public sector undertakings, to which Article 12 of the Constitution of India is attracted, it cannot be posited that reinstatement must invariably follow as a consequence of holding that an order of termination of service of an employee is void.
Though in regard to workmen and employees, reinstatement would be a rule, and compensation in lieu thereof a rare exception, as regards the high level managerial cadre the matter deserves to be viewed from an altogether different perspective.
[932A C] 3.3 The public sector needs to be managed by capable and efficient personal with unimpeachable integrity and the requisite vision, who enjoy the fullest confidence of the policy makers.
It is but in public interest that such undertakings or their Board of Directors are not compelled and obliged to entrust their managements to personnel in whom, on reasonable grounds, they have no trust or faith and with whom they are in a bonafide manner unable to function harmoniously as a team.
These factors have to be taken into account by the Court at the time of passing the consequential order.
[932E G] In the instant case, it cannot be said that the apprehension voiced by the respondent Corporation as regards the negative consequences of reinstatement is unreasonable.
The relations between the parties appear to have been strained beyond the point of no return.
The Trade Union of the employees has lodged a strong protest and even held out a threat of strike, in the context of some acts of the appellants.
Such unrest among the workmen is likely to have a prejudicial effect on the working of the undertaking which would prima facie be detrimental to the larger National Interest.
In such a situation neither the undertaking nor the appellant can improve their image or performance.
It is, therefore, a fit case for granting compensation in lieu of reinstatement.
[933A C] 4.
In the private sector the managerial cadre of employees is altogether excluded from the purview of the Industrial Disputes Act and similar labour legislations.
It can cut the dead wood and can get rid of a managerial cadre employee in case he is considered to be wanting in performance or in integrity.
Not so in the public sector under a rule similar to r. 31(v).
Public sector undertakings may under the circumstances be exposed to irreversible damage at the hands of an employee belonging to a high managerial cadre on account of the faulty policy 926 decisions or on account of lack of efficiency or probity of such an employee.
The very existence of the undertaking may be endangered beyond recall.
Such a situation can be remedied by enacting a regulation permitting the termination of the employment of employee belonging to higher managerial cadre, if the undertaking has reason to believe that his performance is unsatisfactory or inadequate, or there is a bonafide suspicion about his integrity, these being factors which cannot be called into aid to subject him to a disciplinary proceeding.
If termination is made under such a rule or regulation, perhaps it may not attract the vice of arbitrariness or discrimination condemned by Articles 14 and 16(1) of the Constitution of India, inasmuch as the factors operating in the case of such an employee will place him in a class by himself and the classification would have sufficient nexus with the object sought to be achieved.
[931A H] [Taking into account various factors, compensation equivalent to 3.33 years ' salary (including allowances as admissible) on the basis of the last pay and allowances drawn by the appellant was determined to be a reasonable amount to award in lieu of reinstatement, with statutory relief under section 89 of the Income tax Act, 1961 read with r. 21 A of the Income tax Rules, 1961.] [934C D; 936D E]
|
Appeal No. 581 of 60.
Appeal from the judgment and decree dated April 23.
1958, of the Punjab High Court (Circuit Bench) Delhi in Civil Regular First Appeal No. 32 D of 1953.
Naunit Lal and D. Gupta, for the appellant, 703 Gurbachan Singh and Harbans Singh, for the respondent.
May 1.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
This, appeal, on certificate granted by the Punjab High Court, arises in the following circumstances.
M/s. Radha Ram Sohan Lal of Calcutta consigned certain goods to self at Delhi.
of the consignment, certain articles were not delivered to M/s. Udho Ram & Sons, the plaintiffs, in whose favour the railway receipt had been endorsed by the consigner.
Having failed to receive the compensation for the loss suffered on account of the articles not delivered, the suit giving rise to this appeal was instituted.
There is now no dispute ' about the amount of loss, determined by the Court, as suffered by the plaintiffs.
The only dispute between the parties is whether the loss of goods in transit between Calcutta and Delhi was due to the misconduct and negligence of the railways or not.
The Union of India, the dependent, contended that the loss occurred due to circumstances beyond the control of the railway administration.
The trial Court found that the railway wagon in which the consignment was loaded bad been thereafter properly riveted and sealed at Howrah, that the seals and rivet of one door of the wagon were found open when the train which left Howrah at 1.
30 a. m. on October 1, 1949, reached Chandanpur Station at 3.15 a. m., the same night, the train having stopped for 14 minutes at the Howrah Burdwan Link for the home signal at 2.
05 a. m., and that the railway protection police escorted the train.
The High Court accepted these findings and they are not questioned.
704 The trial Court, however, found that the precaution taken of posting railway protection police in a good,; train, in view of the frequent thefts in running trains between Howrah and Chandanpur, amounted to the railways taking proper care of the goods delivered to them as carriers and that therefore the railways were not guilty of any negligence and misconduct.
It was of the view that the railway protection police which usually traveled in the guard 's van, could not possibly know what was happening in the wagons at the other and or in the middle of the train during the journey.
It therefore dismissed the suit.
On appeal, the High Court held the railways responsible for the loss which, in its view, was due to its negligence and misconduct inasmuch as there was no evidence on record that the railway protection police took any precautions to see that nobody interfered with the train when it halted for 15 minutes at the Howrah Burdwan Link at night.
There was no other arrangement for watch and ward at the Link.
There was no evidence as to what was the strength of the railway protection ,police or to show that it did stir out of the train see that the wagons were not interfered with.
It therefore concluded that the servants of the railway were negligent and did nothing to see that opportunities for theft were eliminated as far as possible, that the railway administration was responsible for the negligence of its employees as it could act through its employees and that therefore the lose of goods was due to the misconduct and negligence of the railways.
It therefore reversed the decree of the trial court and decreed the plaintiffs ' suit for the amount of loss hold suffered by the plaintiffs.
It is this decree against which the Union of India has obtained the certificate of fitness for appeal from the Punjab High Court and has preferred this appeal.
705 There is no evidence on record that the railway protection police which escorted the train was adequate in strength for the purpose of seeing that the goods were not interfered with in transit.
In fact, the defendants did not allege in their written statement that any railway protection police escorted the train.
The present of the railway protection police with the train was just deposed to by Chatterjee, D. W, 10, the then Assistant Station Master at Chandanpur Railway Station.
He did not mention that fact in any of his messages or memorandum in which he simply mentioned the presence of the railway protection police at the time of re sealing the wagon.
He stated in cross examination that he did not remember from memory the events of the occurrence at Chandanpur station on October 1, 1949, and was making his statement on the basis of the record before him.
However, both the Courts below have recorded the finding that railway protection police did escort the train.
There is no evidence as to why the police force could not see to the non interference with the wagons when the train halted at the Link where, according to the Courts below, the thieves probably get at the wagon and tampered with its seal and rivets.
In the absence of any evidence about the strength of the railway protection police, the contention of the appellant that the force was adequate cannot be accepted.
It may be true that any precautions taken may not be always successful against the loss in transit on account of theft,, but in the present case there is no evidence with respect to the extent of the precautions taken and with respect to what the railway protection police itself did at the place where the train had to stop.
We cannot accept the contention that the railway protection police could not have moved out of the guard 's van due to the uncertainly of the stoppage of the train at the 706 signal.
It was the job of its members to get down on every stoppage of the train and to keep an eye at the various wagons, as best as they could.
There could be no risk of the train leaving them on the spot suddenly.
They could climb up when the train was to move.
The wagon in which the plaintiffs ' goods were, was in the centre of the train.
It was the 29th marriage from the other end.
It must be taken to be the duty of railway protection police to get out of the guard 's van whenever the train stops, be it at the railway platform or at any other place.
In fact, the necessity to get down and watch the train when it stops at a place other than a station is greater than when the train stops at a Station, where at least on the station side there would be some persons in whose presence the miscreants would not dare to temper with any wagon and any tempering to be done at a station is likely to be on the off side.
The responsibility of the railways under section 72 of the Indian Railways Act is subject to the provisions of section 151 of the Indian Contract Act.
Section 151 states that in all cases of bailment, the bailer is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstance, take of his own goods of the same bulk, quality and value as the goods bailed.
Needless to say that an ordinary person traveling in a train would be particular is keeping an eye on his goods especially when the train stops.
It is not therefore imposing a higaher standard of care on the railway administration when it is said that its staff, and especially the railway protection police specially deputed for the purpose of seeing that no loss takes place to the goods, should get down from the wagon and keep an eye on the wagons in the train in order to see that no unauthorised person gets at the goods.
707 We are therefore of opinion that the finding of the High Court that the loss took place due to the negligence of the railway servants and, consequently, of the railway administration, is justified.
We therefore dismiss the appeal with costs.
Appeal dismissed.
| Section 124A of the Indian Penal Code which makes sedition an offence is constitutionally valid.
Though the section imposes restrictions on the fundamental freedom of 770 speech and expression, the restrictions are in the interest of public order and are within the ambit of permissible legislative interference with the fundamental right.
There is a conflict on the question of the ambit of section 124A between decision of the federal Court and of the Privy Council.
The Federal Court has held that words, deeds or writings constituted an offence under section 124A only when they had the intention or tendency to disturb public tranquility.
to create public disturbance or to promote disorder, whilst the Privy Council has taken the view that it was not an essential ingredient of the offence of sedition under section 124A that the words etc, should be intended to or be likely to incite public disorder.
Either view can be taken and supported on good reasons.
If the view taken by the Federal Court was accepted section 124A would be use constitutional but if the view of the Privy Council was accepted it would be unconstitutional.
It is well settled that if certain provisions of law construed in one way would make them consistent with the constitution, and another interpretation would render them unconstitutional, the Court would lean in favour of the former construction.
Keeping in mind the reasons for the introduction of section 124A and the history of sedition the section must be so construed as to limit its application to acts involving intention or tendency to create disorder, or disturbance of law and order; or incitement to violence.
Niharendu Dutt Majumdar vs King Emperor, , followed.
King Emperor vs Sadashiv Narayan Bhalerao, (1947) L.R. 74 I.A. 89 and Wallace Johnson vs The King not followed.
Romesh Thapar vs The State of Madras.
(1050) S.C.R. 594.
Brij Bhushan vs The State of Delhi. ; and Ramji Lal Modi vs The State U.P. ; , referred to.
The Bengal Immunity Company Limited vs The State of Bihar, and R. M. D. Chamarbaugwala vs The Union of India, [1957] section C. R. 930 applied.
Each one of the constituent elements of the offence of making, publishing or circulating statements conducing to public mischief, punishable under section 505 of the Indian Penal Code, had reference to, and a direct effect on, the security of the State or public order.
Hence the provisions of section 505 were clearly saved by article 19(2). ^
|
N: Criminal Appeal Nos.
286 292 of 1981.
Appeals by special leave from the Judgment and Order dated the 24th April, 1980 of the Punjab & Haryana High Court in Criminal Misc.
Nos. 196, 198, 1565, 1567, 1569, 1571 and 1573 M/80.
D.D.Sharma for the appellant K.C. Dua for the Respondents (Not present) The Judgment of Court was delivered by VENKATARAMIAH.
The above Criminal Appeals by Special leave are filed against a common judgment delivered on April 24, 1980 by the High Court of Punjab and Haryana in Criminal Misc.
Nos. 196, 198, 1565, 1567, 1569, 1571 and 1573 M of 1980.
By its judgment under appeal the High Court has quashed certain criminal proceedings instituted in different Magistrates ' courts against different parties for violation of section 7 (i) of the (hereinafter referred to as 'the Act ').
Since the facts in all these cases are more or less the same, we shall briefly state the facts in one of them i.e. Criminal Misc.
No. 196 M of 1980 on the file of High Court filed by Daljit Vig.
Works Manager, Kishan Chand & Co. Oil Industry Ltd., Manufacturers of Vanaspati at Ludhiana in which he had prayed for quashing the criminal proceedings which had been initiated by a complaint filed by the Government Food Inspector, District Faridkot.
In that case the complainant alleged that when he visited the premises of Darshan Lal (Accused No. 1) on July 30, 1979 he found that Darshan Lal had in his possession for purposes of sale about twenty sealed tins each containing 16.5 K. G. of crown vanaspati and he demanded a sample of crown vanaspati by serving a notice on Darahan Lal in the form prescribed under the Prevention of Food Adulteration Rules, 1955 (hereinafter referred to as 'the Rules ').
Thereafter he purchased 1.5 K.G. of crown vanaspati after opening a sealed tin for analysis by paying him Rs. 15/ .
The sample was divided into three equal parts and put into three dry and cleaned bottles which were labelled and duly closed and sealed.
One of the bottles containing the sample was sent to the Public Analyst, Punjab in a sealed container, through a special messenger alongwith a memorandum (Form No. VII) containing the specimen of the seal and the 717 remaining two bottles were deposited with the Local Health Authority, Faridkot in accordance with the Rules.
He also seized the entire stock of vanaspati under section 10 (4) of the Act.
After the receipt of the Report of the Public Analyst dated August 24, 1979 he filed the complaint annexing the Report as an enclosure to it.
The said Report stated that on analysis he (the Public Analyst) found that the sample sent to him did not contain sesame oil at all whereas vanaspati was required to contain not less than 5% by weight of sesame oil.
The three accused named in the complaint were Darshan Lal, the vendor, M/s. Hem Raj Pawan Kumar, the dealers and Kishan Chand & Co., Oil Industry Ltd., the manufacturers of the vanaspati contained in the aforementioned sealed tons.
The complainant alleged that as the vanaspati in question did not satisfy the prescribed standard the accused were liable to be punished under section 16 (1) (a) (i) of the Act for having contravened the provisions of section 7 (i) of the Act.
The names of witnesses including the name of the person in the presence of whom the sample had been taken were furnished in the complaint.
When process was issued on the basis of the above complaint Daljit Vig, the Works Manager of the manufacturer of the vanaspati in question filed Criminal Misc.
No. 196 M of 1980 on the file of the High Court.
Criminal Misc.
No. 198 M of 1980 was filed by Pawan Kumar of M/s. Hem Raj Pawan Kumar.
In these two petitions they pleaded that the criminal proceedings initiated against them were liable to be quashed on various grounds.
They contended, inter alia, that because the complainant had taken the sample of vanaspati after opening a sealed tin, he had violated Rule 22 A of the Rules and that because under section 20 A of the Act, the dealer or a manufacturer could be proceeded against only after the vendor had set up a successful defence as contemplated under section 19 (2) of the Act, their prosecution alongwith the vendor was illegal.
In the connected cases which were disposed of by the common judgment under appeal, the grounds were more or less the same.
The High Court allowed all the petitions quashing all the criminal proceedings filed against the petitioners before it on the ground that where the food sold or stocked for sale or for distribution was in sealed containers having identical label declaration, the entire contents of one or more of such containers as may be required to satisfy the quantity prescribed in Rule 22 should be taken as a part of the sample in a sealed form and since the sealed container had been opened in each of these cases to draw the sample the prosecution was not tenable.
In the instant case it may by recalled that each of the sealed containers contained 16.5 K.G. of vanaspati and after opening one such sealed container the complainant had 718 taken 1.5 K.G. of vanaspati as sample.
The method adopted by the complainant was found by the High Court to be contrary to the relevant Rules.
These appeals by Special Leave are filed against the judgment and order of the High Court.
It may be stated here that the High Court following its decision in these cases quashed the proceedings against Darshan Lal, the vendor of the vanaspati in question, in Criminal Misc.
No. 2197 M of 1980 by its order dated June 17, 1980 against which a separate petition is filed before this Court in Special Leave Petition (Criminal) No. 2570 of 1980 which is also being disposed of today by a separate order.
Adulteration and misbranding of food stuffs are rampant evils in our country.
The Act is brought into force to check these social evils in the larger public interest for ensuring public welfare.
In certain cases the Act provides for imposition of penalty without proof of a guilty mind.
This shows the degree of concern exhibited by Parliament in so far as public health is concerned.
While construing such food laws Courts should keep in view that the need for prevention of future injury is as important as punishing a wrongdoer after the injury is actually inflicted.
Merely because a person who has actually suffered in his health after consuming adulterated food would not be before court in such cases, courts should not be too eager to quash on slender grounds the prosecutions for offences, alleged to have been committed under the Act.
Section 11 of the Act prescribes the procedure to be followed by the Food Inspectors in taking samples of food for analysis.
The quantity of sample to be sent to the Public Analyst for analysis is prescribed by Rule 22 of the Rules.
In the case of vanaspati 500 grams (approximately) should be sent to the Public Analyst under that Rule.
Rule 22 A states that where food is sold or stocked for sale or for distribution in sealed containers having identical lable declaration, the contents of one or more of such containers as may be required to satisfy the quantity prescribed in Rule 22 shall be treated to be a part of the sample.
This Rule is enacted apparently to get over the difficulty that may arise in taking sample and in dividing it into three parts as required by section 11 (1) (b) of the Act where each sealed container containing the food in question contains a quantity less than the required quantity to be taken as sample for the purposes of section 11 read with Rule 22.
Rule 22 A of the Rules was promulgated for the purpose of overcoming an objection to the effect that the contents of two or more different sealed containers 719 could not form the parts of the same sample.
Rule 22 A of the Rules does not state that where a sealed container contains a quantity larger than what is required for purposes of section 11 read with rule 22 the sealed container as such should be taken as sample and that no sample can be taken after opening the sealed container.
It may be stated here that the inevitable consequence of the acceptance of this argument of the accused which has appealed to the High Court is that where a manufacturer or distributor sells food stuffs in large sealed containers containing quantities much larger than what is required to be taken as sample under the law and the contents of only one such container are exposed for sale by a vendor after opening the container, a Food Inspector would not be able to take a sample at all for proceeding under the Act against the manufacturer, distributor or even the vendor.
We feel that any construction which would lead to such absurd result should be avoided while construing the provisions of the Act.
The precautions prescribed in section 11 of the Act which have to be observed while taking samples are indeed adequate to prevent effectively any false sample being sent to the Public Analyst.
If there is any prejudice caused to accused by any negligence on the part of the authorities concerned in taking or sending the true sample to the Public Analyst, the prosecution may have to fail.
But there is, however, no legal requirement which compels the Food Inspector to send the sealed container as such to the Public Analyst even though it contains a quantity much larger than what is required to be taken as sample under Rule 22.
Rule 22 A is only a corollary to Rule 22.
Rule 22 B sets at rest many doubts which were being raised prior to its promulgation.
It says : "22 B. Quantity of sample sent to be considered as sufficent.
Notwithstanding anything contained in Rule 22 quantity of sample sent for analysis shall be considered as sufficient unless the public analyst or the Director reports to the contrary.
" Even prior to the coming into force of Rule 22 B, the legal position was the same as what was attempted to be achieved by Rule 22 B of the Rules.
In State of Kerala etc.
etc vs Alaserry Mohammed etc.
(1) this Court held Rule 22 which prescribed the quantity of food that should be sent to the Public Analyst was only directory and that a prosecution could not fail merely on the 720 ground that the quantity sent to the Public Analyst was less than what was prescribed, provided the quantity which was actually sent was sufficient for purposes of analysis.
Untwalia, J. speaking on behalf of the five learned Judges who heard that case observed at page 828 thus : "It would thus be seen that the whole object of section 11 and Rule 22 is to find out by a correct analyis subject to further verification and tests by the Director of the Central Laboratory or otherwise, as to whether the sample of food is adulterated or not.
If the quantity sent to the Public Analyst, even though it is less than that prescribed, is sufficient and enables the Public Analyst to make correct analysis, then merely because the quantity sent was not in strict compliance with the Rule will not result in the nullification of the report and obliterate its evidentiary value.
If the quantity sent is less, it is for the Public Analyst to see whether it is sufficient for his analysis or not.
If he finds it insufficient, there is an end of the matter.
If, however, he finds it sufficient but due to one reason or the other, either because of further tests or otherwise, it is shown that the report of the Public Analyst based upon the short quantity sent to him is not trustworthy or beyond doubt, the case may fail.
In other words, if the object is frustrated by the sending of the short quantity by the Food Inspector to the Public Analyst, it is obvious, that the case may end in acquittal.
But if the object is not frustrated and is squarely and justifiably achieved without any shadow of doubt, then it will endanger public health to acquit offenders on technical grounds which have no substance.
To quote the words of Sir George Rankin, C.J. from the decision of the Calcutta High Court in Chandra Nath Bagchi vs Nabadwip Chandra Dutt and others A.I.R. 1931 Calcutta 476 at page 478, it would "be merely piling unreason upon technicality. ." In our considered judgment the Rule is directory and not mandatory.
But we must hasten to reiterate what we have said above that, even so, Food Inspectors should take case to see that they comply with the Rule as far as possible. . .
We may, in passing, note that the Rules have now been amended and Rule 22B has been added in 1977 . 721 In our opinion, the new Rule has been added for the purpose of clarifying the law and not by way of amending it.
The law, as we have enunciated it, was so even without Rule 22B and it is stated here to place it beyond any debate or doubt.
" It may be noted that in none of these cases has the Public Analyst expressed the opinion that the quantity of sample sent to him was inadequate for the purpose of analysing it and to make a report as required by the Act.
It is unfortunate that the High Court in deciding the cases before it failed to appreciate and follow the approach adopted by this Court in Alaserry Mohammed 's case (supra).
The decision of the High Court on the above point cannot, therefore, be sustained.
The other ground namely that the dealer, manufacturer or distributor cannot be prosecuted alongwith the vendor by impleading all of them initially as the accused in a prosecution under the Act is unsustainable in view of the decision of this Court in Bhagwan Dass Jagdish Chander vs Delhi Administration (1).
In that case after considering the effect of section 19 (2), section 20 and section 20 A of the Act, Court observed at pages 36 37 thus: "We are also unable to accept as correct a line of reasoning found in V. N. Chokra vs The State A. I. R. 1966 Punjab 421 and Food Inspector, Palghat Municipality vs Setharam Rice & Oil Mills (1974) F. A. C. P. 534 and P. B. Kurup vs Food Inspector, Malappuram Panchayat (1969) Kerala Law Times, P. 845 that in every case under the Act, there has to be initially a prosecution of a particular seller only, but those who may have passed on or sold the adulterated article of food the vendor, who is being prosecuted, could only be brought in subsequently after a warranty set up under section 19 (2) has been pleaded and shown to be substantiated.
Support was sought for such a view by referring to the special provisions of Section 20A and Section 19 (2) and Section 20 of the Act.
A reason for section 20A seems to be that the prosecution of a person impleaded as an accused under Section 20A in the course of a trial does not require a separate sanction.
Section 20A itself lays down that, where the Court trying the offence is itself satisfied 722 that a "manufacturer, distributor or dealer is also concerned with an offence", for which an accused is being tried, the necessary sanction to prosecute will be deemed to have been given.
Another reason seems to be that such a power enables speedy trial of the really guilty parties.
We are in agreement with the view of the Delhi High Court that these special provisions do not take away or derogate from the effect of the ordinary provisions of the law which enable separate as well as joint trials of accused persons in accordance with the provisions of the old.
Sections 233 to 239 of Criminal Procedure Code.
On the other hand, there seems no logically sound reason why, if a distributor or a manufacturer can be subsequently impleaded under Section 20A of the Act, he cannot be joined as a co accused initially in a joint trial if the allegations made justify such a course." (emphasis added) Before concluding we should observe that the High Court committed a serious error in these cases in quashing the criminal proceedings in different magistrates ' courts at a premature stage in exercise of its extraordinary jurisdiction under section 482 Criminal Procedure Code.
These are not cases where it can be said that there is no legal evidence at all in support of the prosecution.
The prosecution has still to lead its evidence.
It is neither expedient nor possible to arrive at a conclusion at this stage on the guilt or innocence of the accused on the material before the Court.
While there is no doubt that the onus of proving the case is on the prosecution, it is equally clear that the prosecution should have sufficient opportunity to adduce all available evidence.
We are of the view that on the facts and in the circumstances of these criminal proceedings, the High Court should not have interfered at this interlocutory stage.
These were not cases of that exceptional character where continuance of prosecution would have resulted either in waste of public time and money or in grave prejudice to the accused concerned.
On the other hand this undue interference by the High Court has been responsible for these prosecutions in respect of grave economic offences remaining pending for a long time.
In a similar case in State of Punjab vs Sat Pal decided by us on March 25, 1983 we have set aside the order of the High Court and remanded the case for disposal to the trial court.
723 Accordingly, we set aside the judgment and order of the High Court in each of these appeals and remand the cases to the respective magistrates ' courts for disposal in accordance with law.
All the other contentions are left open.
The appeals are accordingly allowed.
H.S.K. Appeals allowed.
| The appellant, Earabhadrappa hailing from village Mattakur, under the false name of Krishnappa and with a false address obtained employment of service as a domestic servant under PW 3 Makrappa, the husband of the deceased Bachamma, who was found murdered by strangulation on the night between March 21 22, 1979 after having been robbed of her jewellery, clothes, etc.
Based on circumstantial evidence, the appellant, who was found missing right from the early hours of the 22nd March, 1979 and who was apprehended a year later on March 29, 1980, was charged with and convicted for the offences under Sections 302, 392 IPC respectively.
He was sentenced to undergo rigorous imprisonment for a term of 10 years under section 392 IPC and to death under Section 302.
In appeal, the High Court confirmed both the conviction and sentences imposed upon him.
Hence the appeal by special leave.
Dismissing the appeal and modifying the sentence, the Court.
^ HELD: 1.1 To sustain a charge under section 302 of the Indian Penal Code,the mere fact that the accused made a statement leading to the discovery of the stolen articles under section 27 of the Evidence Act, by itself is not sufficient.
There must be something more to connect the accused with the commission of the offence.
The circumstances relied upon by the prosecution in the instant case led to no other inference than that of guilt of the accused as murder and robbery are proved to have been integral parts of one and the same transaction and therefore the presumption arising under illustration (a) to section 114 of the Evidence Act is that not only the accused committed the murder of the deceased but also committed robbery of her gold ornaments which formed part of the same transaction.
The prosecution had led sufficient evidence to connect the accused with the commission of the crime.
[561 G H] 553 1.2 For the applicability of section 27 of the Evidence Act, two conditions are pre requisite, viz: (1) Information must be such as has caused discovery of the fact, and (2) The information must "relate distinctly" to the fact discovered.
" Under section 27, only so much of the information as distinctly relates to the facts really thereby discovered is admissible.
The word "fact" means some concrete or material fact to which the information directly relates.
[549A, 550B C] Pulukuri Kottayya vs Emperor, LR [1947] IA 65; Jaffer Hussein Dastgir V. State of Maharashtra, [1970] 2 S.C.R.332, referred to.
2.1 The nature of presumption under illustration (a) to section 114 of the Evidence Act from recent and unexplained possession must depend upon the nature of the evidence adduced.
As to the meaning of "recent possession", it was observed: No fixed time limit can be laid down to determine whether possession is recent or otherwise and each case must be judged on its own facts.
The question as to what amounts to recent possession sufficient to justify the presumption of guilt varies according as the stolen article is or is not calculated to pass readily from hand to hand.
The fact that a period of one year had elapsed between the commission of the crime and the recovery of the ornaments on a statement made by the accused leading to their discovery under section 27 of the Evidence Act immediately upon his being apprehended by the police, cannot be said to be too long particularly when the accused had been absconding during that period and the stolen articles were such as were not likely to pass readily from hand to hand.
There was no lapse of time between the date of his arrest and the recovery of the stolen property.
The accused had no satisfactory explanation to offer for his possession thereof.
On the contrary, he denied that the stolen property was recovered by him.
The false denial by itself is an incriminating circumstance.
[56 H, 562 A E] 3.
In Bachan singh V. State of Punjab, , the Supreme Court, moved by compassionate sentiments of human feelings has ruled that sentence of death should not be passed except in the "rarest of rare" cases.
The result now is that capital punishment is seldom employed even though it may be a crime against the society and the brutality of the crime shocks judicial conscience.
The test laid down in Bachan Singh 's case is unfortunately not fulfilled in the instant case.
That being so, the Court is constrained to commute the sentence of death passed on the appellant into one for imprisonment for life.
[562 F H, 563 A] Observation of Dissent [A sentence or pattern of sentence which fails to take due account of the gravity of the offence can seriously undermine respect for law.
It is the duty of the court to impose a proper punishment depending upon the degree of criminality and desirability to impose such punishment as a measure of social necessity as a means of deterring other potential offenders.
Failure to impose death sentence in such grave cases where it is a crime against society particularly in cases of murders committed with extreme brutality will bring to naught the sentence of death provided under Section 302 of the Penal Code.] [563 A B] 554
|
Appeal No. 2476 of 1993.
From the Judgment and Order dated 21.2.1992 of the Orissa High Court in O.J.S. No. 4866 of 1991.
476 R. K. Mehta for the Appellants.
H.L. Aggarwal, S.K. Patri, Abhijat P. Medh, Ms. Kirti Mishra and A.K. Panda for the Respondents.
The following Order of the Court was delivered Service of the appellants employed in the school established in the year 1981 recognised in 1983 brought on grants in aid in 1988, were terminated in 1986.
Their termination was not approved by the Inspector of Schools.
Since the order not approving termination was not given effect to by the Institution the appellants approached the High Court by way of a writ petition for a mandamus to reinstate them and grant them their salaries from the date the school became an aided institution.
The High Court did not find any merit in the claim for various reasons.
Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector.
Use of the word 'aided institution ' is clear indication that the provisions of approval apply only to the aided schools.
Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval.
Consequently no right vested in the appellant which he could get enforced in a court of law.
The submission that the principle of Section 10 A being benevolent in nature should be extended to teachers of the institution once it has been granted recognition to avoid exploitation and undue harassment of those who are unequal in the bargain cannot be accepted.
Recognition of an institution for purpose of imparting education is different than bringing it on grants in aid.
To the former the regulatory provisions of the Education Act or the rules do not apply.
The Education Departments has no control either on admission of students or members of staff.
The High Court, therefore. did not commit any error of law in dismissing the writ petition.
The appeal accordingly fails and is dismissed.
But there shall be no order as Appeal dismissed.
| The services of the appellants were terminated by the Management of a recognised school.
The termination was not approved by the Inspector of Schools.
The appellants filed a writ petition before the High Court for reinstatement and salaries from the date the school became an aided institution.
The High Court having dismissed the writ petition, appellants preferred the present appeal.
Dismissing the appeal, this Court, HELD: Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector of Schools.
Use of the word 'aided institution ' is dear indication that the provisions of approval apply only to the aided schools.
Since on the date the services of the appellants were terminated the institution was recognised only and not aided, the Inspector could not have exercised the power of disapproval.
Recognition of a institution for purposes of imparting education is different than bringing It on grants in aid.
To the former the regulatory provisions of the Education Act or the rules do, not apply.
The Education Department has no control either on admission of students or members of staff.
(476 D F)
|
ition No. 3053 of 1980.
Under article 32 of the Constitution of India.
Dr. L.M. Singhvi, S.K Sinha, S.K Verma, A.M. Singhvi and Laxmi Kant Pandey for the Appellant.
D. Goburdhan for the Respondent.
The Judgment of the Court was delivered by DESAI, J.
A pensioner since 16 years is knocking at the doors of the court of justice and the executive in search of his hard earned pension and is being rebuffed by those who would meet the same fate by the passage of time and yet with his meagre resources, he has been dragged to the apex court for the second time after a lapse of 12 years during which abominably long period the mandamus of this Court has been treated as a scrap of paper.
What a pity, and what helplessness ? The facts relevant to the disposal or this petition under article 32 of the Constitution are set out in details in Deokinandan Prasad vs State of Bihar & Ors (1) and therefore, need not be recapitulated here.
A Constitution Bench presided over by the then Chief Justice Mr. Sikri issued a mandamus in the writ petition filed by the present petitioner which reads as under: "The order dated August 5, 1966 declaring under r. 76 of the Service Code that the petitioner has ceased to be in government employ is set aside and quashed.
The order dated June 12 1968 stating that under r. 46 of the Pension Rules, the Department is unable to grant the petitioner pension is also set aside and quashed.
As the petitioner himself claims that he has been retired from service on superannuation, a writ of mandamus will be issued to the respondents directing them to consider the claim of the petitioner for payment of pension according to law.
" 923 The opinion of the Court was rendered on May 4, 1971 and since then petitioner is being pushed from pillar to post by various departments of the State of Bihar ultimately compelling him to knock at the door of this Court.
It may be mentioned in passing that the petitioner joined service on September 1, 1928 and admittedly he has retired on superannuation on January 10, 1967.
He is entitled to pension under the Bihar Pension Rules, 1950.
The dispute is whether the petitioner is a member of the Bihar Education Service and what ought to be the method of computation of his pension ? on the first point, the matter is no more res integra because the Constitution Bench held that a reference to r. S of the Pension Rules shows that the officers mentioned therein are entitled to pension.
It was further held that there is no controversy that the petitioner is an officer in the Education Department of the Bihar Education Service, and this department is shown at item No. 3 of the Schedule to r. section Therefore, the controversy is concluded by decision between the parties that the petitioner is a member of Bihar Education Service and that under r. 5 of the Pension Rules, he is entitled to pension.
After the mandamus was issued by this Court, the petitioner approached amongst others the then Chief Minister of Bihar late Shri Kedar Pandey for implementing and giving effect to the mandamus, issued by the Supreme Court.
The Chief Minister directed that even though more than two years have elapsed since the issuance of the mandamus of the Chief Minister himself directed ten months prior to June 25, 1973 for payment of the claim of the petitioner as soon as possible and had insisted upon a weekly progress report on the processing of the file to be submitted to him, yet even the Chief Minister recorded his helplessness that he neither received the weekly report nor the mandamus has been implemented nor even the file was submitted to the Chief Minister for his perusal.
If this be plight of the Chief Minister of a popularly elected government what to talk of the lesser fly and what tears can be shed for a man in position of the petitioner who having rendered service for nearly 40 years was chasing the mirage for a paltry pension.
The Chief Minister apprehended that it is quite likely that not only the officers responsible for this mess but even the State Government may be called upon by the Supreme Court to explain the disregard of the mandamus.
He then made a peremptory order that the file be submitted to him for order.
924 Nothing moved as is the sad experience that nothing moves A unless like the law of inertia some outside force acts upon it and puts the file in motion.
What that outside force is we need not dilate.
Ultimately, the file reached the Chief Minister in 1974 on being called by him.
There is the long preamble setting out the history of litigation, the injustice done to the petitioner, the utter lethargy and aptly of the officers concerned and then the Chief Minister proceeded to dispose of the claim of the petitioner consistent with the mandamus issued by this Court.
The material portion which would help us in disposing of the present petition recites that the petitioner shall be treated in Class II posts of Bihar Education Service since his promotion and since 1.1.1952 he should be deemed to belong to Class I post of Selection Grade according to his seniority or from the date of direct appointment which derived the petitioner of equal opportunity, he was fully entitled to.
But the note is overgrowing with the courtesy of the Chief Minister in that he proceeded to request the Education Minister that for the ends of justice, a phraseology to which the courts are accustomed, the petitioner should be paid off his claim within a month for which any senior officer of the Education Department he made responsible.
Undue delay has been made in the implementation of the direction of the Hon 'ble Supreme Court and I would never like that Shri prasad be compelled again to go to Court. ' What a wishful thinking.
In that Mr. Prasad has been forced to come back to this Court and since then the then Chief Minister has left this world.
The resume the narration, petitioner received a letter dated February 6, 1976 3 years after the direction given by the Chief Minister that his pension case has been finalised and pension payment order of Rs. 156.55 p.m. and gratuity payment order of Rs. 5,850 are under issue.
It would appear at a glance that officers dealing with the pension case appears to have scant regard for the decision of the Supreme Court in that both the promotion to Class II and further promotion to Class I from deemed dates were ignored and pension was computed on the basis as if petitioner retired in Class III.
All the representation of the petitioner thereafter failed to evoke both a sympathetic response and a just decision and therefore the petitioner is back to square one.
The respondent State and all its officers are bound to compute pension of the petitioner not only on the footing that he is a member 925 Of the Bihar Education Service but also on the footing that he was promoted to Class II by the date mentioned in the earlier judgment A and from 1.1.1952 to Class I as rightly held by the Chief Minister.
Nothing was pointed out to us by Mr. Goburdhan to hold to the contrary nor can the State be permitted to play ducks and drakes with a solemn decision of the Constitution Bench of this Court.
To give effect to the mandamus of this Court, the respondent State shall proceed to compute the salary payable to the petitioner from the date he was promoted, to Class II Service and on the assumption that he was functioning in Class II in the salary scale then admissible to him equivalent to Class II Grade in Bihar Education Service.
This must commence from the date from which he was promoted as set out in the earlier judgment as Deputy Inspector of Schools at Seraikela.
In computing the salary for the purpose of computation Class II salary scale then prevalent for the post shall be taken up and the petitioner is deemed to have been put in that scale.
Yearly increments are added till 1.1.1952 when he must be deemed to have been promoted as admitted by the Chief Minister to Class I post in Bihar Education Service.
Same process is to be repeated by the respondent State in that the then prevalent Class I scale must be held admissible to the petitioner from January 1, 1952.
He must be 15 deemed to have been put in the scale and his annual increments to be worked out.
If in the process he is entitled to Selection Grade, the same must be worked out and this computation must be brought down to 10.1.1967 when the petitioner retired on superannuation from service.
On this computation of salary his pension shall be computed under the relevant rules of the Bihar Pension Rules as liberalised from time to time till 1967 and his pension must be determined as on 10.1.1967 on the aforementioned computation chart.
The State and the subordinate officers responsible for this work are directed by a writ of mandamus to complete this computation by July 31, 1983 and by that date pension payment order correct and consistent with the direction herein given shall be issued without fail to the petitioner.
The State is also directed by a mandamus of this Court to pay the arrears of pension on the afore mentioned computation within the same period with interest at 6% from 10.1.67.
As the officers of the State have harassed the petitioner which we 926 feel is intentional, deliberate and motivated, therefore, we are constrained to award exemplary costs quantified at Rs. 25,000 to be paid to the petitioner before July 31, 1983.
We propose to leave no one in doubt that the slightest failure or deviation in the time schedule in carrying out this mandamus will be unquestionably visited with contempt action.
H.L.C. Petition allowed.
| During the pendency of the ceiling appeal under the U.P. Imposition of Ceiling on Land Holdings Act, 1960, the sole appellant died on January 9, 1980, On October 25, 1980, his three sons applied for setting aside of abatement and condonation of delay and for substitution of their names as legal representatives of their deceased father.
The Additional District Judge dismissed the appeal on the view that there was no sufficient cause for condonation of delay and for vacating the abatement.
The High Court dismissed the appellants ' Writ Petition holding that Article 120 of the First Schedule of the was applicable and that therefore the petition for substitution should have been filed within 90 days from the date of death.
In appeal to this Court, it was contended that in view of the provisions of sections 38 and 42 of Act, the Code of Civil Procedure 1908 applied only for the disposal of appeals and the provisions of the , excepting sections 4, 5 and 12, were not applicable to proceedings under the Act.
Dismissing the appeal.
^ HELD: Section 38(1) of the Act clearly extends the procedure applicable to appeals under the Code to appeals under the Act.
The extension of the procedure available under the Code to appeals under the Act attracts the entire procedure of the Code relevant for the purpose of disposing of an appeal under the Act.
There is no substance in the contention that the principles of abatement and delay were not applicable to the instant case.
[738 C D] Under the Code.
when death occurs at an appellate stage, substitution is effected in accordance with the procedure laid down in Order XXII.
In terms of section 34(1) of the Act, if death occurred of one of the parties at the appellate stage of a ceiling appeal, substitution had also to be made according to the procedure laid down in O. XXII of the Code.
Rule 11 of Order XXII indicates that the provisions of the Code do apply to appeals.
[737 B] 735 Again under Rule 3(2) of Order XXII if no application is made under sub rule (1) within the time limited by law the suit shall abate.
Time has been limited by law in Article 120 of the First Schedule of the which provides that an application under the Code to have the legal representatives of the deceased appellant made a party has to be within 90 days from the date of death of the appellant and Article 121 provides 60 days period for the application for an order to set aside abatement from the date of abatement.[737 E G] If the Code and the applied at the time when the application for substitution was made, the legal representatives had to ask for substitution, setting aside of abatement and condonation of delay in term of rule 9(3) of Order XXII of the Code.
There is little room to dispute that if order XXII of the Code applies necessarily Articles 120 and 121 of the First Schedule of the would also apply.
[737 A] In the instant case the application for substitution of the legal representatives of the deceased appellant when made, was beyond 150 days from the date of his death and the High Court had rightly rejected the appellants ' application.
|
ion No. 1 of 1967.
Election Petition under Presidential and Vice Presidential Elections Act, 1952.
R.V.S. Mani, for the petitioners.
M.C. Setalvad, J.M. Mukhi and A.S. Nambiar, for respondent No. 1.
E. Udayaratnam, for respondent No. 6.
Janardan Sharma, for respondent NO. 10.
O.P. Varma, for respondent No. 12.
C.C. Patel and M.V. Goswami, for respondent No. 14.
Bhimsena Rao and R.A. Gupta, for respondent No. 17.
C.K. Daphtary, Attorney General, R.H. Dhebar and S.P. Nayar, for Election Petition of India and Returning Officer.
Presidential Election, New Delhi.
C.K. Daphtary, Attorney General, N.S. Bindra and R.H. Dhebar, for Attorney General for India.
The Judgment of the Court was delivered by Wanchoo, C.J.
The presidential election in India was held in May 1967.
In that election, 17 candidates were nominated.
The result of the election was declared on May 9, 1967, and Dr. Zakir Husain was declared elected.
The present petition is against 137 The election of Dr. Zakir Husain as President and has been filed under article 71 of the Constitution read with the Presidential and Vice Presidential Elections Act, No. 31, 1952 (hereinafter referred to as the Act) by 13 members of Parliament.
The attack on he validity of the election of Dr. Zakir Husain has been made on two grounds.
The first ground is that no oath was taken by Dr. zakir Husain before his nomination as required by article 84 read with article 58 of the Constitution.
In consequence he was not eligible for election as President and his election is liable to be set aside.
Curiously enough, however, the petitioners pray for a declaration that Sri Subba Rao, who received the second highest number of votes should be declared elected, though he (like Dr. Zakir Husain) also did not take the oath before his nomination.
The second ground on which the election of Dr. Zakir Husain s challenged is that the result of the election has been materially affected by reason of undue influence, thereat and in this connection reliance is placed on four matters to which reference will be made later.
The petition has been opposed on behalf of Dr. Zakir Husain.
It has been urged in reply that no oath was necessary under article 84 read with article 58 of the Constitution, and as such he was eligible to stand.
It has also been said on behalf of Dr. Zakir Husain that in case his nomination is invalid on that ground, Sri Subba Rao 's nomination is equally invalid as he also did not take the oath.
As to undue influence it is urged that no undue influence was exercised, nor was the result of the election materially affected by any exercise of undue influence.
Of the four matters urged in support of the attack on the ground of undue influence, the truth of one of them was not accepted.
But it is urged in the alternative that even accepting all that has been said by the petitioners in support of their case of undue influence, the allegations made by the petitioners do not in law amount to.
undue influence and therefore there could be no question of the result of the election being materially affected by the exercise of any undue influence.
On the pleading of the parties, the following issues were framed : 1.
Whether the acceptance of the nomination papers of respondents Nos. 1 to 17 by the Returning Officer was illegal and contrary to law for the reason that Respondents Nos. 1 to 17 did not subscribe to the oath required under Article 84(a) of the Constitution read with Article 58(1)(c) thereof; 2.
Whether the result of the election has been materially affected; L10Sup.(CI)/168 10 138 3.
Whether the acts and conduct alleged in para 12 of the petition and set out under heads A, B, C and D thereof amount to undue influence within the meaning of section 18(1)(b) of the Act.
Whether the allegations made under heads A, B, C and D in para 12 of the petition in so far as they are not admitted arc true; 5.
Whether the petition is entitled to any relief, and if so, to what relief.
It will be seen that issues Nos. 1 and 3 raise pure questions of law.
We made it clear to learned counsel that we would try this petition in two parts.
We shall first deal with the two issues of law, and then, if necessary, set the petition down for further hearing on evidence.
We also indicated that if issue No. 1 is decided in favour of the petitioners, the election would have to be set aside and then there would be no question of any further hearing on evidence.
We further indicated that if issue No. 3 is decided in favour of 1he petitioners, the petition would have to be set down for further hearing on evidence on matters of fact which were in dispute.
Lastly, we indicated that if both these issues were decided against the petitioners, the petition would fail and it would not be necessary then to set it down for further hearing on evidence.
We propose now to consider the two issues of law.
Issue No. 1.
In order to decide this issue, we have to see what the Constitution provided, before the Constitution (Sixteenth Amendment) Act, 1963 (hereinafter referred to as the Amendment Act).
This Act was passed on October 5.
Before that amendment article 58 (1) with which we are concerned in the present petition was in these terms : "(1) No person shall be eligible for election as President ', unless he (a) is a citizen of India, (b) has completed the age of thirty five years, and (c) is qualified for election as a member of the House of the People.
" Article 84, which is also relevant read thus "A person shall not be qualified to be chosen to fill a seat in Parliament unless he (a) is a citizen of India; (b) is, in/he case of d seat in the Council of States, not less than thirty years of age and, in the ease 139 of the House of the People, not less than twenty five years of age; (c) possesses such other qualifications as may be prescribed in that behalf by or under any law made by Parliament.
" The Representation of the People Act, No. 43 of 1951 provided some qualifications for membership of the House of the People, by section 4.
Besides that article 102 of the Constitution provided for certain disqualifications for membership of either House of Parliament and thus indirectly provided for qualifications necessary for being a member of either House of Parliament, and these were (1) that the person should not hold any office of profit under the Government of India or the Government of any State, other than an office declared by Parliament by law not to disqualify its holders; (2) the person should not be of unsound mind and should not have been so declared by a competent court; (3) the person should not be an undischarged insolvent; (4) the person should not have voluntarily acquired the citizenship of a foreign State, or be under any acknowledgement of allegiance or adherence to a foreign State; and (5) the person should not be disqualified by or trader any law made by Parliament.
A perusal of these provisions show that there was no requirement of taking an oath at the time of nomination by the presidential candidate in article 58.
Nor was there any requirement of taking any oath at the time of nomination by a candidate for election to the House of the People under article 84.
There were however provisions in the Constitution for taking an oath after election.
The oath of the President and its form was provided in article 60 while the oath for a member of the House of the People after 'election was provided in Schedule III to the Constitution.
which a member of Parliament had to take before taking his scat in the House of the People or the Council of States, as the case may be.
It is not disputed on behalf of the petitioners that this was the undoubted position in law before the Amendment Act.
Then came the Amendment Act, which came into force from October 5, 1963.
By that amendment, no change was made in article 58.
which stood as it was: a change was however made in Cl.
(a) of article 84, which after the Amendment Act read thus: "84.
Qualification for membership of Parliament A person shall not be qualified to be chosen to fill a seat in Parliament unless he (a) is a citizen of India, and makes and subscribes before some person authorised in that behalf by the Elec 140 tion Commission an oath or affirmation according to the form set out for the purposes in the Third Schedule;" The Third Schedule was also amended and provided the following form of oath to be taken by a member of Parliament who stands for election to Parliament, namely "I, A. B, having been nominated as a candidate to fill a seat in the Council of States do House of the People swear in the name of God that I will bear true solemnly affirm faith and allegiance to the Constitution of India as by law established and that I will uphold the sovereignty and integrity of India.
" At the same time amendment was made in the form of oath to be taken after election, the change being that the words "I will uphold the sovereignty and integrity of India" were added to the already existing oath to be taken by a member of Parliament after his election before he took his seat in the House of the People or the Council of States.
The contention on behalf of the petitioners is that because of this change in cl.
(a) of article 84 by which it became necessary to take.
oath for a person standing for election to either House of Parliament in the form prescribed in the Third SChedule, a person standing for election as President had also to take a similar oath because article 58(1)(c) requires that a person to be eligible for election as President must be qualified for election as a member of the House of the People.
It is urged that no one is qualified, after the amendment of cl.
(a) of article 84, for election as a member of the House of the People unless he makes and subscribes an oath in the form set out for the purpose in the Third Schedule, and therefore this provision applied to a person standing for election as President, for without such oath he would not be qualified to stand for election to the House of the People.
The argument looks attractive prima facie but must in our opinion be rejected.
The qualifications for eligibility to stand for election as President are to be found in article 58(1).
The main reliance on behalf of the petitioners is placed on cl.
(c) of article 58 (1), which lays down that a candidate standing for election as President has to be qualified for election as member of the House of the People.
A comparison however of article 58 with article 84 as it stood before amendment shows that el.
(a) of article corresponded to cl.
(a) of article 58(1), as both provided that the respective candidates should be citizens of India.
It was therefore not necessary to go to cI. (a) of article 84 for the purpose of finding out whether a person was eligible for election as President for 141 the purpose of citizenship for that part of cl.
(a) of article 84 was specifically provided for in cl.
(a) of article 58 (i).
Similarly, cl.
(b) of article 84 corresponded to cl.
(b) of article 58(1), with this difference that it provided a special qualification as to age and therefore one would not have to go to cl.
(b) of article 84 for the purpose of finding out the qualification as to age Cl.
(c) of article 38 (1) clearly corresponded to cl.
(c) of article 84 and reading them together it would follow that a person standing for election as President would require such qualifications as may be prescribed in that behalf by or under any law made by Parliament.
Further as cl.
(c) of article 58(1) lays down that a person standing for presidential election has to be qualified for membership of the House of the People, article 102 (which lays down disqualifications for members of Parliament) would also be attracted except in so far as there is a special provision contained in article 58(2).
Thus cl.
(c) of article 58(1) would bring in such qualifications for members of the House of the People as may be prescribed by law by Parliament, as required by article 84(c).
It will by its own force bring in article 102 of the Constitution, for that Article lays down certain disqualifications which a presidential candidate must not have for he has to be eligible for election as a member of the House of the People.
But it is clear to us that, what is provided in clause (a) and (b) of article 58(1) must be taken from there and we need not travel to cls.
(a) and (b) of article 84 in the matter of citizenship and of age of the presidential candidate.
Clauses (a) and (b) of article 58(1) having made a specific provision in that behalf in our opinion exclude cls.
(a) and (b) of article 84.
This exclusion was there before the Amendment Act and we are of opinion that there is nothing in the Amendment Act which makes.
any difference to that position.
The Sixteenth Amendment was introduced on the recommendation of the Committee on National Integration and Regionalism, which was greatly concerned over the preservation and maintenance of the integrity and sovereignty of the Union.
It therefore recommended that every candidate for the membership of a State legislature or Parliament, should pledge himself to uphold the Constitution and to preserve the integrity and sovereignty of the Union and for that forms of oath in the Third Schedule to the Constitution should be suitably amended.
It also recommended that every candidate for the membership of Parliament or State Legislature, Union and State Ministers, Members of Parliament and State Legislatures, Judges of the Supreme Court and High Court and the Comptroller and Auditor General of India should take oath to.
uphold the sovereignty and integrity of India.
In consequence of these recommendations, the sixteenth amendment was made and article 84 (a) as well as article 173 which provides for qualifications for membership of State legislature were suitably 142 amended.
Further two new forms were added in the Third Schedule, one relating to oath to be taken by candidates for elector to Parliament and the other relating to oath to be taken by candidates for election to State legislatures.
Further other forms of oath in the Third Schedule were also amended by adding therein the words "I will uphold the sovereignty and integrity of India.
" Now if the intention of Parliament was that an oath similar in form to the oath to be taken by persons standing for election 10 Parliament had to be taken by persons standing for election to the office of the President there is no reason why a similar amendment was not made in article 58(1)(a).
Further if the intention of Parliament was that a presidential candidate should also take an oath before standing for election, the form of oath should also have been prescribed either in the Third Schedule or by amendment of article 60, which provides for oath by a person elected as President before he takes his office.
But we find that no change was made either in article 58(1)(a) or in article 60 or in the Third Schedule prescribing the form of oath to be taken by the presidential candidate before he could stand for election.
This to our mind is the clearest indication that Parliament did not intend, when making the Amendment Act, that an oath similar to the oath taken by a candidate standing for election to Parliament had to be taken by a candidate standing for election to the office of the President.
So there is no reason to import the provision of article 84(a) as it stood after the Amendment Act into article 58(1)(a), which stood unamended.
That is one reason why we are of opinion that so far as the election to the office of the President is concerned, the candidate standing for the same has not to take any oath before becoming eligible for election as President.
Another reason which leads to the same conclusion is this.
We have already indicated that no change was made in article 60 by introducing the form of oath 'to be taken by a person standing for election as President; nor was there any change made m the Third Schedule by the introduction of a form of oath to be taken by a person standing for election as President.
In the absence of such a form, we fail to see how an oath would be necessary before a person could stand for election.
as President.
It is not as if a person standing for election as a member of Parliament can take any oath that he likes or that may be administered to him.
The particular oath which a person standing for election as a member of Parliament has to take has been prescribed in the Third Schedule to the Constitution, and it is only that oath which such a person has to take.
However no form of oath is prescribed for a person standing for election as President anywhere in the Constitution and in the absence of such form, it is impossible to hold that taking of oath before standing for election as President is a 143 necessary ingredient of eligibility for such election.
Further a comparison of the form of oath under article 60 for the President with form III B of the Third Schedule which prescribes the oath for a member of Parliament before he takes his seat shows that even after election the President is not required to swear that he will uphold the sovereignty and integrity of India.
The oath he takes is to preserve, protect and defend the Constitution and that he will devote himself to the service and well being of the people of India.
Clearly therefore the form of oath introduced by the sixteenth amendment for persons standing for election to Parliament and even after election was not considered suitable for a person standing for election as President or elected as President and that is why we find no form prescribed by Parliament.
It has been urged on behalf of the petitioners that, though no form of oath may be prescribed it was open to the Election Commission to prescribe an oath by making changes mutatis mutandis in form III A of the Third Schedule relating to candidates for election to Parliament, and that it was the duty of the Election Commission to appoint somebody to administer the oath in the form to be evolved by him by changing form III A in the Third Schedule mutatis mutandis.
Reliance in this connection has been placed on article 324 of the Constitution.
We are of opinion that there is no force in this contention.
Article 324 inter alia provides for "the superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament and to the Legislature of every State and of elections to the offices of President and Vice President".
These words do not in our opinion give any power to the Election Commission to introduce a form of oath to be taken by a candidate for election whether it be for election as President or as a member of Parliament or of a State legislature.
If an oath has to be taken by any.such person it has to be provided by law and the form thereof has also to be prescribed by law (we are using the word "law" in its broadest sense, including constitutional provisions) and that is what was done by the Sixteenth Amendment so far as election to Parliament and State legislatures was concerned.
But as already observed, Parliament did not think it fit when it brought in the Amendment Act to make any change in article 58 (1) (a) or to introduce a form in article 60 or in, the Third Schedule to the Constitution with reference to candidates standing for election as President.
If Parliament did not choose to do so, the Election,Commission cannot do so under the power it has been given under article 324 to superintendent, direct and control the preparation of the electoral rolls and the conduct of all elections.
That power is very different from the power to prescribe, an oath before a candidate can stand for election.
Such prescription can only be by law as indicated above.
The Amendment Act having not made any such provision with 144 respect to those standing for election to the office of the President, it cannot be open to the Election Commission to prescribe a form of oath for such persons by changing form III A mutatis mutandis.
Such power cannot be spelt out of article 324 on which reliance has been placed on behalf of the petitioners.
It follows therefore that no form whatsoever having been prescribed by Parliament when it made the sixteenth amendment for taking an oath by a presidential candidate, article 84 (a) when it prescribed for taking an oath for candidates for election to the.
House of the People has no application to candidates standing for election to Presidentship.
So far as these candidates are concerned we must look to article 58 (1) (a) only and need not go to article 84(a).
Another reason for coming to the same conclusion is that when article 58 (1) (c) lays down that a person standing for election as President has to be qualified for election as a member of the House of the People it only brings in qualifications other than those= which are specifically mentioned in article 58 (1) itself.
Now specific qualifications provided in article 58 (1) are that a candidate for presidential election has to be a citizen of India and he must have completed the age of 35 years.
So far as these qualifications are concerned, we need not go anywhere else in order to search for eligibility to contest election as President.
For example, the specific qualification in cl.
(b) of article 58.(1) is that the person concerned should have completed the age of 35 years.
On the other Hand, el.
(b) of article 84 lays down the age of 25 years for membership of the House of the People.
Therefore when one has to look for the qualification of age one must only go to article 58 (1) (b) for the purpose of presidential election and need not look elsewhere.
What is specifically provided for by article 58 (1) must be accepted as it stands and no addition can be made to that provision and no subtraction can be made therefrom.
It will be seen therefore that though there may be some qualifications which may be necessary for election to the House of the People, they need not necessarily apply to the election for the office of the President, where there is a specific provision in article 58 (1) itself.
We are therefore clearly of opinion that in view of the specific provision in article 58 (a) and (b) we cannot and should not apply clauses (a) and (b) of article 84, to persons standing for election as President.
This conclusion is reinforced if we look at article 58 (2) and compare it with article 102 (1) (a).
It is clear that when there is a specific provision with respect to an office of profit in article 58 (2); it is that provision which will apply and not article 102 (1) (a).
We therefore hold that the acceptance of the nomination papers of respondents 1 to 17 by the Returning Officer was neither illegal nor contrary to law on the ground that these respondents did not subscribe to an oath under article 84 (a) read with article 58(1)(c).
The issue is decided against the petitioners.
145 ISSUE No. 3.
The petitioners rely on four allegations on the question of undue influence.
Before we deal with those allegations it is necessary to understand what undue influence is in the context of the Act.
Section 18 (1 ) (b) lays down that if the result of the election has been materially affected by reason of undue influence at the election committed by any person other than the returned candidate or a person acting in connivance with the returned candidate, the election will be liable to be declared void.
Sub section (2) of section 18 lays down that undue influence would have the same meaning as in Chapter IX A of the Indian Penal Code.
Section 171 C of the Indian Penal Code defines what "undue influence" is in these terms : "(1) Whoever voluntarily interferes or attempts to interfere with the free exercise of any electoral right commits the offence of undue influence at an election.
(2) Without prejudice to the generality of the provisions of sub section (1), whoever (a) threatens any candidate or voter, or any person in whom a candidate or voter is interested, with injury of any kind, or (b) induces or attempts to induce a candidate or voter to believe that he or any person in whom he is interested will become or will be rendered an object of Divine displeasure or of spiritual censure, shall be deemed to interfere with the free exercise of the electoral right of such candidate or voter, within the meaning of sub section (1).
(3) A declaration of public policy or a promise of public action, or the mere exercise of a legal right without intent to interfere with an electoral right, shall not be deemed to be interference within the meaning of this section.
" It will be seen from the above definition that the gist of undue influence at an election consists in voluntary interference or attempt at interference with the free exercise of any electoral right.
Any voluntary action which interferes with or attempts to interfere with such free exercise of electoral right would amount to undue influence.
But even though the definition in sub section
(1) of section 171 C is wide in terms it cannot take in mere canvassing in favour of a candidate at an election.
If that were so, it would be impossible to run democratic elections.
Further sub section
(2)ors.
171 C shows what the nature of undue influence is though of course it does not cut down the generality of the provisions contained in sub section (1).
Where any threat is.
held out to any candidate or voter or any person in whom a candidate or voter is interested and 146 the threat is of injury of any kind, that would amount to voluntary interference or attempt at interference with the free exercise of electoral right and would be undue influence.
Again where a person induces or attempts to induce a candidate, or voter to believe that he or any person in whom he is interested will become or will be rendered an object of Divine displeasure or of spiritual censure, that would also amount to voluntary interference with the free exercise of the electoral right and would be undue influence.
What is contained in sub section
(2) of section 1771 C is merely illustrative.
It is difficult to lay down in general terms where mere canvassing ends and interference or attempt at interference with the free exercise of any electoral right begins.
That is a matter to be determined in each case; but there can be No. doubt that if what is done is merely canvassing: it would not be undue influence.
As sub section (3) of section 171 C shows, the mere exercise of a legal right without intent to interfere with an electoral right would not be undue influence.
We may in this connection refer to section 123(2) of the Representation of the People Act 1951 which also defines "undue influence".
The definition there is more or less in the same language as in section 171 C of the Indian Penal Code except that the words "direct or indirect" have been added to indicate the nature of interference.
It will be seen that if anything, the definition of "undue influence" in the Representation of the People Act may be wider.
It will therefore be useful to refer to cases under the election law to see how election tribunals have looked at the matter while considering the scope of the words "undue influence".
The earliest case to which reference may be made is R.B. Surendra Narayan Sinha vs Amulyadhone Roy & 43 Others.(1) There the question raised before the Election Tribunal was whether by issuing a whip on the day of election requesting members to cast their preferences in a particular order, the leader of a Party, who was also the Chief Minister, could be said to have exercised undue influence.
The Election Tribunal held that the leader the party was entitled to use his influence as a leader and he could not be deprived of that right because he happened to.
be a minister.
The issue of a whip of that kind was thus held to be no more than canvassing in.
favour of the candidates of the party to which the leader or the Chief Minister belonged.
In Linge Gowda vs Shivananjappa(2), the Election Tribunal held that a leader of a political party was entitled to declare to the public the policy of the party and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would not amount to undue influence under (1) 1940 Indian Election Cases by Sen and Poddar, Case No. XXX at p. 188.
(2) (1953) VI E.L.R. 288.
147 the Representation of the People Act.
The fact of that such a leader happened to be a Minister or Chief Minister of the State would make no difference.
It was further observed in that case that "the law cannot strike at the root of due influence and under the law of election, only undue influence is forbidden, and the leaders of ' a party will be deemed to exercise their due influence if they ask the electorate to vote for their party candidate, even if they happen to be Ministers." In Amirchand vs Surendra Lal Jha(1) it was held by the Election Tribunal that Ministers were prominent members.
of their party and in that capacity they were entitled to address meetings and to tell people what their party had done, and what its programme was and to ask them to vote for the candidate set up by their party, and such action of the Ministers could not be held amount to exercising undue influence.
It merely amounted to canvassing by the Ministers in favour of candidates belonging to their party.
In Mast Ram vs
section Iqbal Singh(2) it was held by the Election Tribunal that the legitimate exercise of influence by a political party or an association should not be confused with "undUe influence".
It was further held that "Ministers in their capacity as members of their party are entitled to address meetings and to tell people what their party had done and what its.
programme was and to ask them to vote for the candidate set up by their party.
Such action of the Ministers cannot be held to amount to 'exercising undue influence ' ".
It was further held ' that "if ' a political ' party passes a resolution of support to a candidate and asks its members to vote for him, it will be only a legitimate exercise of influence".
In Radhakrishna Shukla vs Tara Chand Maheshwar.(3) the Election Tribunal held that even where Ministers conducting an electioneering campaign promised people, who put their grievances before them during the campaign, generally to redress their grievances, it could not be held that there was exercise of undue influence and their promise merely amounted to a promise of public action, which would not be for the benefit of merely those who voted for candidates of their party but for the public as a whole.
The next case to which reference may be made is N. Sankara Reddi vs Yashoda Reddi(4).
In that case the Election Tribunal held that "a political party is entitled to issue a manifesto to the ' voters requesting them to vote only for the candidate, set up by the party.
The fact that the leader of the Congress Legislature Party who was also the Chief Minister of the State had written (1)(1954) X E L R 57.
(2) (1955) XII E.L.R.34 (3)(1956) XII E.L.R. 378.
(4) (1957) XIII E.L.R. 34.
148 letters to the members of the Congress Party to support the candidates set up by the party would not amount to undue influence within section 123(2) of the Representation of the People Act.
" It was added that it was only where a Minister abused his position for furthering the prospects of the candidate belonging to his party that undue influence might arise; but where a leader merely used his influence in the form of canvassing for candidates of his party there would be no question of undue influence.
In Dr. Y.S. Parmar vs Hira Singh Pal(1), the Judicial Commissioner of Himachal Pradesh held that "a leader of a political party is entitled to.
declare to the public the policy of the party, and ask the electorate to vote for his party without interfering with any electoral right and such declarations on his part would not amount to undue influence under section 123(2) of the Representation.
of the People Act.
" In Triloki Singh vs Shivrajwati Nehru(2) it was held by the Election Tribunal that "the right to canvass must be conceded to Ministers as leaders of a political party Just as they have a right to vote and to stand as a candidate, they also have a right to canvass for themselves and for the other candidates set up by their party.
" It was further held that though a Minister occupied a high position and commanded great influence, if he only solicited votes and tried to persuade the electors to vote for a candidate of his party and asked them not to vote for any other candidate or to remain neutral and did nothing more, he could not be said to interfere with the free exercise of the electoral right of the voters.
The last case to which reference may be made is Jayalakshmi Devamma vs Janardhan Reddi(3).
In that case the Andhra Pradesh High Court held that in a democratic set up where candidates contested elections on the basis of their affiliation to a particular political party, there was nothing intrinsically wrong in Ministers canvassing support for their party candidates.
It was further held that a Minister merely by reason of his office did not suffer from any disability in this behalf and had the same rights and obligations as any other citizen in the matter of canvassing.
It was also held that in their capacity as leaders of their party.
they had to explain to the electors the policies and programmes which they sought to enforce and one way of doing that was to ask the electors to vote for those who were pledged to support them and their policies.
It will be seen from the above review of the cases relating to undue influence that it has been consistently held in this country that it is open to Ministers to canvass for candidates of their party (1) (1958) 16 E.L.R.4 (2) (1958) XVI.E.L.R 234.
(3) (1959) XVII E.L.R. 302. 149 standing for election.
Such canvassing does not amount to undue influence but is proper use of the Minister 's right to ask the public to support candidates belonging to the Minister 's party.
It is only where a Minister abuses.
his position as such and goes beyond merely asking for support for candidates belonging to his party that a question of undue influence may arise.
But so long as the Minister only asks the electors to vote for a particular candidate belonging to his party and puts forward before the public the merits of his candidate it cannot be said that by merely making such request to the electorate the Minister.
exercises undue influence.
The fact that the Minister 's request was addressed in the form of what *is called a whip, is also.
immaterial so long as it is clear that there ' is no compulsion on the electorate to vote in the manner indicated.
It is in the light of these principles that we have to see whether the four allegations made in this case, assuming them to be correct, make out a case of undue influence.
The first allegation is that Shrimati Indira Gandhi, the Prime Minister, addressed a letter to all the electors in which she commended Dr. Zakir Husain and requested the electors to vote for him.
A copy of that letter has been produced, and we have been taken through it.
In our opinion there is nothing in that letter which may even remotely amount to undue influence.
Most of the letter is concerned with commending the qualities of Dr. Zakir Husain and it ends by saying that Dr, Zakir Husain 's long and meritorious service in the cause of national freedom and national re construction after Independence makes him a candidate richly deserving universal support.
It has been urged that the Prime Minister is a person of great influence and therefore Shrimati Indira Gandhi should not have written this letter because she was Prime Minister and the mere fact that she wrote this letter commending Dr. Zakir Husain 's election amounted to undue influence i.e. interference with the free exercise of the electoral right.
We can not agree with this contention.
Shrimati Indira Gandhi is certainly the Prime Minister, but she is also one of the leaders of the party to which Dr. Zakir Husain belonged.
As a leader of party she was entitled to ask the electors to vote for Dr. Zakir Husain and the fact that she is the Prime Minister makes no difference to her right to make an appeal of this nature.
It is said that the office of the President is a no party office and therefore an appeal of this nature should not have been made and must amount to undue influence.
It is true that the office of the President is not a party office meaning thereby that after his election the President is no longer a party man.
But that cannot take away the fact that in a democratic system, like ours, persons who stand for election are candidates sponsored by parties for without such support no one would have a chance of being elected, for the.
electors are mostly members of one party or other.
We have given 150 our earnest consideration to the letter written by Shrimati Indira Gandhi and have come to the conclusion that there is nothing in that letter which can be said to be improper or which can even remotely amount to interference with the free exercise of the electoral rights.
It cannot therefore be said that Shrimati Indira Gandhi even though she is the Prime Minister exercised any undue influence in this presidential election.
The next allegation is based on two letters written by Sri Ram Subhag Singh.
In these letters.
Sri Ram Subhag Singh signed himself as Chief Whip and they were addressed to all members of the Congress Party in Parliament.
The fact that he signed the letters as Chief Whip is in our opinion of no consequence; even if he had not done so all members of the congress party in Parliament must be knowing that he was the Chief Whip.
Just as a Minister has a right to canvass for support so has in our opinion the Chief Whip.
In the first letter he pointed out that the Presidential and Vice Presidential elections were to be held on May. 6, 1967.
He also pointed out that members of Parliament could vote for the presidential election at New Delhi or at State capitals but they had to come to Delhi in connection with the election of the Vice President.
He therefore added that as the two elections were to be held on the same day and voting for the Vice Presidential election could only be at Delhi, every member of the party must be present in Delhi to participate in the elections.
He finally requested the members of his party to reach New Delhi by May 4, 1967 and contact him on reaching.
New Delhi.
This letter merely explains to members of his party the situation with respect to the two elections which were to be held simultaneously and requested the members to come to Delhi, as otherwise they could not vote in the Vice Presidential election.
The fact that he asked the members to contact him after reaching Delhi could only be to know who had come and who had not and cannot give rise inference of undue influence from that fact alone.
In the second letter, Sri Ram Subhag Singh pointed out that the election to the office of the President would be in accordance with the system of proportional representation by means of single transferable vote.
He also invited the attention of the members of the Congress Party in Parliament to r. 19 of the Election Rules.
He then went on to say that it was their desire, i.e., of the congress party, that Dr. Zakir Husain should be returned with a thumping majority.
He therefore requested the members to place figure '1 ' opposite the name of Dr. Zakir Husain.
He also advised them not to mark the second or any other preference in favour of any other candidate.
As we read this letter we only find in it a request to members of the party to vote for Dr. Zakir Husain There is nothing in that letter to show that undue influence was being exercised thereby.
The two letters read together merely show 151 that Sri Ram Subhag Singh who happened to be the Chief Whip of the congress party was canvassing in favour of Dr. Zakir Husain.
It is however urged that his advice to the members not to mark their second or any other preference in favour of any other candidate amounted to interference with the free exercise of their electoral right.
We cannot agree with this contention.
Sri Ram Subhag Singh asked the members of his party to give the first preference to Dr. Zakir Husain.
He also asked them not to mark their second or any other preference, and that is a method to ensure that the candidate to whom the first preference is given should be in a strong position in case there is not a majority in the first counting.
In the present election there was apparently a majority in the first counting and therefore the marking of the second or any other preference was immaterial.
Apart from it.
we see nothing improper in members of the party being told in the course of canvassing that it would be better if they only marked their first preference and no other preference in a system where voting is by single transferable vote.
Such a request or advice does not in our opinion interfere with the free exercise of their electoral right for the electors still would be free to do what they desired in spite of the advice.
We cannot agree.
after going through the two letters written by Sri Ram Subhag Singh that there was any interference with the exercise of the electoral right by the electors.
The third allegation is that the Prime Minister had deputed certain senior members of her cabinet to the various States to make doubly certain that Dr. Zakir Husain was elected.
In consequence, Shri Fakhruddin Ali Ahmed was sent to Assam, Shri Y. B. Chavan to Bombay, Sri Jagjivan Ram to Bihar, Sri I.K. Gujral to Calcutta and Sri Dinesh Singh to Uttar Pradesh.
It is further urged that sending of the Ministers to various States was to influence the members of the electoral college there to vote for Dr. Zakir Husain or attempt to do so.
Such action it is urged.
would amount to undue influence.
We cannot agree with this contention.
Assuming that these Ministers were asked to go to various States it was obviously to canvass support for Dr. Zakir Husain so that he may be certain to be elected.
Even assuming that these Ministers canvassed support for Dr. Zakir Husain in various State capitals, their action cannot be said to amount to undue influence, for all that they can be said to have done was to canvass support for Dr. Zakir Husain and mere canvassing cannot possibly be; held to be undue influence.
There is nothing 'in the allegation in para 12 C of the petition to show that there was any interference with the free exercise of electoral right by the electors.
even if these Ministers were sent to.
the various State capitals to canvass support for Dr. Zakir Husain ,red did so.
Mere canvassing of support for a candidate can never amount to undue 152 influence, and all that para 12C shows is that there was mere.
canvassing in favour of Dr. Zakir Husain.
No case of undue influence can be made out on the basis of the allegations contained in para 12C of the petition.
The last allegation in support of the case of undue influence is that the Chief Minister of Maharashtra had briefed members of the Legislative Assembly on May 5, 1967 on how to vote and whom to vote for.
It is, urged that even if the leader of the party in the Maharashtra legislature could indicate the manner of voting the members of his party, he could not indicate to them whom they were to vote for, as that interfered with the free exercise of their electoral right.
It is said that such a request amounted to a command from a person in authority, like the Chief Minister, and would be exercise of undue influence.
We are of opinion that there is no substance in this contention either.
There can possibly be no objection if the leader of the party indicates to the members of his party how to vote in order to ensure that votes may not become invalid for want of knowledge of the procedure of voting.
Further if the leader of the party indicates to members of his party for whom to vote he is merely canvassing with his own party men to support the candidate of the party.
The mere fact that the person who, canvasses is a Chief Minister does not mean that he is exercising undue influence in the sense of interfering with the free exercise of the electoral right.
Once canvassing is permissible, and we have no doubt that in a democratic set up where ' parties put up candidates for election it is not only permissible but necessary, it follows that if a leader of the party asks members of his party for whom.
to vote he is merely canvassing.
The voting is after all secret and every elector is free to vote for whomsoever he likes, even though he may have been asked by the leader to vote for a particular candidate.
There is nothing in para 12 (D) of the petition to suggest that anything improper was.
done by the Chief Minister of Maharashtra, which could give rise to an inference that t.he free exercise of the electoral right was being interfered with.
On a careful consideration of paragraphs 12(A) to 12(D) of the petition we have come to the conclusion that there is nothing in those paragraphs which even remotely suggests that there was any undue influence exercised by anybody in connection with the Presidential election of May 6, 1967.
Our finding on the issue in question is that the acts.
and conduct alleged in paragraph 12 of the petition and set out in sub paras A to D thereof do not amount to undue influence within the meaning of section 18(1 )(b) of the Act.
The issue is decided against the petitioners.
As we have indicated already if both these issues of law are decided against the petitioners as we do decide them the petition 153 must fail and it is unnecessary to set it down for hearing on evidence with respect to other issues.
The petition is hereby dismissed but in the circumstances of the case we pass no order as to costs.
Y.P. Petition dismissed.
| As a result of the Presidential election held in May, 1967, respondent No. 1 was declared elected.
The petitioners challenged the election on the following two grounds, namely (i) article 58(1)(c) required that a person to be eligible for election as President must be qualified for election as a member of the House of People.
After the Sixteenth Amendment, under article 84(a), it was necessary for a person standing for election to either House of Parliament to take an oath in the form prescribed in the Third Schedule.
Therefore, a person standing for election as President had also to take a similar oath; since the respondent had not taken the oath he was not eligible for election.
(ii) As (a) the Prime Minister addressed a letter to all electors commending respondent No. 1 and requesting them to vote for him; '(b) the, Prime.
Minister deputed Ministers 1 various State Capitals to make doubly certain that respondent No. 1 was elected; (c) a Minister who was also the chief whip of the Congress party wrote two letters to all members of his party in Parliament and signed them as Chief Whip, explaining the situation with respect to the election and requesting them to come to Delhi and contact him and also requesting them to give the first preference to respondent No. 1 and not to mark the second or any other preference in favour of the candidates; and (d) the Chief Minister of Maharashtra had briefed members of the Legislative Assembly as to how and for whom to vote, the result of the election has materially been affected by undue influence.
HELD: The petition must be dismissed.
(i) The candidate standing for election to the office of the President had not to take any oath before becoming eligible for election as President.
A comparison of article 58 with article 84 as it stood before the amendment shows that el.
(a) of article 84, corresponded to el.
(a) of article 58(1), as both provided that the respective candidates should be citizens of India.
It was therefore, not necessary to go to cl.
(a) of article 84 for the purpose of finding out whether a person woks eligible for election as President for the purpose of citizenship for that part of el.
(a) of article 84 was specifically provided for in el.
(a) of article 58(1).
Similarly, el.
(b) of article 84 corresponded to el.
(b) of article 58(1).
with this difference that it provided a special qualification as to age and therefore 134 one would not have to go to cl.
(b) of article 84 for the purpose of finding out the qualification as to age.
Clause (c) of article 58(1) clearly corresponded to el.
(c) of article 84 and reading them together it would follow that a person standing for election as President would require such qualifications as may be prescribed in that behalf by or under any law made by Parliament.
Further as el.
(c) of article 58(1) lays down that a person standing for Presidential election has to be qualified for membership of the House of the People, article 102 (which lays down disqualifications for members of Parliament) would also be attracted except in so far as there is a special provision contained in article 58(2), Thus cI. (c) or article 58(1) would bring in such qualifications for members of the House of the People as may as prescribed by law by Parliament, as required by article 84(c).
It will by its own force bring in article 102 of the Constitution, for that Article lays down certain disqualifications which a presidential candidate must not have for he has to be eligible for election as a member of the House of the People.
But it clear that what is provided in cl.
(a) and (b) of article 58(1) must be taken from there and it is not necessary travel to cls.
(a) and (b) of article 84 in the matter of citizenship and of age of the presidential candidate.
Clauses (a)and (b) of article 58(1) having made a specific provision in that behalf exclude cls.
(a) and (b) of article 84.
There is nothing in the Amendment Act which makes any difference to that position, for.
if the intention of Parliament was that an oath similar in form to the oath for membership of Parliament had to be taken by persons standing for election to the office of the President there is no reason why a similar amendment was not made in article 58(1) (a) and why the form: of oath not also prescribed either in the Third Schedule or by amendment of article 60.
which provides for oath by a person elected as President before he takes his office.
[140H 141E; 142B C] The particular oath which a person standing for election as a member of Parliament has to take has been prescribed in the Third Schedule to the Constitution, and it is only that oath which such a person has to take.
However, no form of oath is prescribed for a person standing for election as President anywhere in the Constitution and in the absence of such form.
it is impossible to hold that taking of oath before standing for election as President is a necessary ingredient of eligibility for such election.
The Amendment Act having not made any such provision with respect to those standing for election to the office of the President, it cannot be open to the Election Commission to prescribe a form of oath for such persons by changing form III A mutatis mutandis.
Such power cannot be spelt out of article 324 under which the Election Commission is conferred power to superintend direct, and control the preparation of the Electoral Rolls and the conduct of elections.
[143G 144B] Further.
a comparison of the form of oath under article 60 for the President with form III B of the Third Schedule which prescribes the oath for a member of Parliament before he takes his seat.
shows that even after election the President is not required to swear that he will uphold the sovereignty and integrity of India.
The oath he takes is to preserve.
protect and! defend the Constitution and that he will devote himself to the service and well being of the people of India.
the form of oath introduced by the sixteenth amendment for persons standing for election to Parliament and even after election was not considered suitable for a person standing for election as President or elected as President and that is why no form is prescribed by Parliament.
[143A C] (ii) Any voluntary action which interferes with or attempts to interfere with the free exercise of electoral right would amount to undue 135 influence.
It cannot take in mere canvassing in favour of a candidate at an election.
If that were so, it would be impossible to run democratic elections.
It is difficult to lay down in general terms where mere canvassing ends and interference or attempt at interference to with the tree exercise of any electoral right begins.
That is a matter to be determined in each case; but there can be no doubt that if what is done is merely canvassing it would not be undue influence.
[145G 146C] (a) There was nothing in the fetter of the Prime Minister which even remotely amounted to undue influence.
As a leader of the party she was entitled to ask the electors to vote for respondent No. 1 and the fact that she is the Prime Minister makes no difference to her right make an appeal of this nature.
It is.
said that the office of the President is a no party office and therefore an appeal of this nature should not have been made and must amount to undue influence.
It is true that the office of the President is not a party office meaning thereby that after his election the President is no longer a party man.
But that cannot take away the fact that in a democratic system, persons who stand for election are candidates sponsored by parties for without such support no fine would have a chance of being elected.
for the electors are mostly members of one party or other.
[149G 1SOB] (b) Mere canvassing of support for a candidate can never amount to undue influence.
There was no interference with the free exercise of electoral right by the electors, even if the Ministers were sent to the various Sate capitals to canvass support for respondent, No 1.
[148H] (c) The fact that the Minister signed the letters as Chief Whip was of no consequence; even if he had not done so all members of the Congress party in Parliament must be knowing that he was the Chief Whip.
Just as a Minister has a right to canvass for support, so has the Chief Whip.
The fact that he asked the members to contact him after reaching Delhi could only be to know who had come and who had not and could not give rise to any inference of undue influence from the fact alone.
There was nothing in the second letter also to show that undue influence was being exercised thereby.
The two letters read together merely show that the Chief Whip of the Congress party was canvassing in favour of respondent No. 1.
There was nothing improper in members of the party being told in the course of canvassing that it would be better if they only marked their first preference and no other preference in a system where voting is by single transferable vote.
Such a request of advice does not interfere with the free exercise of their electoral for the electors still would be free to do what they desired inspite of the advice.
[150B 151D] (d) There can be no objection if the leader of the party indicates to the members of his party how to vote in order to ensure that votes may not become invalid for, want of knowledge of the procedure of voting.
Further if the leader of the party indicates to members of his party for whom to vote he is merely canvassing with his own party men to support the candidate of the party.
The mere fact that the person who canvasses is a Chief Minister does not mean that he is exercising undue influence in the sense of interfering with the free exercise of the electoral right.
Once canvassing is permissible, and in a democratic set up where parties put up candidates for election it is not only permissible but necessary.
it follows that if a leader of the party asks members of his party for whom to vote he is merely canvassing.
The voting is after all secret and every elector is free to vote for whomsoever he likes, even though he may have been asked by the leader to vote for a particular candidate.
[152C F] 136 It is open to Ministers to canvass for candidates of their party standing for election.
Such canvassing does not amount to undue influence but is proper use of the Minister 's right to ask the public to support candidates belonging to the Minister 's party.
It is only where a Minister abuses his position as such and goes beyond merely asking for support for candidates belonging to his party that a question of undue influence may arise.
But so long as the Minister only asks the electors to vote for a particular candidate belonging to his party and puts forward before the public the merit of his candidate it cannot be said that by merely making such request to the electorate the Minister exercises undue influence.
The fact that the Minister 's request was addressed in the form of what it called a whip is also immaterial so long as it is clear that there is no compulsion on the electorate to vote in the manner indicated [ 149A C] R.B. Surendra Narayan Sinha vs Amulyadhone Ray & 43 Ors. 1940 Indian Election Cases by Sen and Poddar, Case No. XXX at p. 188.
Linge Gowda vs Shivananjappa.
(1953) VI E.L.R. 288, Amirchand vs Surendra Lal Jha, (1954) X E.L.R. 57, Mast Ram vs
section lqbal Singh, (1955) XII E.L.R. 34, Radhakrishna Shukla vs Tara Chand Maheshwar, (1956) XII E.L.R. 378, N. Sankara Reddi vs Yashoda Reddi (1957) XIII E.L.R. 34, Dr. Y.S. Parmar vs Hira Singh Pal.
(1958) XVI E.L.R. 45.
Triloki Singh vs Shtvrajwati Nehru, (1958) XVI E.L.R. 234 and Jayalakshmi Devamma vs Janardhan Reddi, (1959) XVII E.L.R. 302, referred to
|
254 of 1954.
Under article 32 of the Constitution for the enforcement of fundamental rights.
The petitioner in Person.
M. C. Setalvad, Attorney General for India, (G. N. Joshi and P.G. Gokhale, with him) for the respondents.
The Judgment of the Court was delivered by BOSE J.
This is a petition under article 32 of Constitution and raises the same question on the merits as in the connected summons case in which we have just delivered judgment.
The facts will be found there.
In the present matter it is enough to say that no question arises about the breach of a fundamental right.
But as a matter touching the jurisdiction of the Bar Council Tribunal and that of the Bombay High Court was argued, we will deal with it shortly.
Mr. G 's first objection is that the proceedings before the Tribunal were ultra vires because there was no proper order.
of appointment.
At a very early stage he applied to the Registrar and also to the Prothonotary for a copy of the order of the Chief Justice constituting 502 the Tribunal.
He was told by the Prothonotary that the order was oral.
Mr. ' G ', put in two written statements before the Tribunal and did not challenge this statement of fact in either.
He contented himself with saying that the 'order was not "judicial" and so was not valid.
He took up the same attitude in the High Court.
The learned Judges said "The record clearly shows that when it came to, the notice of this Court it was decided to refer this case to the Bar Council under section 10(2) and accordingly a Tribunal was appointed under section 11(1) by the learned Chief justice of this Court.
" In his petition to this Court he did not challenge this statement of fact but again confined his attack to the question of the validity of the order.
It is evident from all this that the fact that an oral order was made was not challenged.
We cannot allow Mr. 'G ' to go behind that.
The next question is whether an oral order is enough: Bar Councils Act does not lay down any procedure.
All it says is Section 10(2): ". . . the High Court may of its own motion so refer any case in which it has otherwise reason to believe that any such advocate has been so guilty." and section 11 (2) says "The Tribunal shall consist of not less than three. . members of the Bar Council appointed for the purpose of the inquiry by the Chief Justice.
" We agree it is necessary that there should be some record of the order on the files but, in our opinion, the order itself need not be a written one; it can be an oral order given to a proper officer of the Court.
In the present case, the letter No. G 1003 dated 29th April, 1953, of the Prothonotary to the Registrar and the letter No. E. 41 09/53 dated the 1st May, 1953, of the Registrar to the Bar Council (office copies of which were retained on the files) are a sufficient record of the making of the order.
Mr. 'G ' was supplied with copies 503 of those letters and so was aware of the fact that orders had been issued.
As a matter of fact, we have seen the originals of the High Court 's office files and find that the names of the three members of the Tribunal are in the Chief Justice 's handwriting with his initials underneath.
That is an additional record of the making of the order.
We hold that an order recorded in the, manner set out above is sufficient for the purposes of sections 10(2) and 11(2) of the Bar Councils Act and hold that the Tribunal was validly appointed.
Mr. G 's next point is that there was no "complaint" to the High Court and so it had no jurisdiction to refer the matter to the Tribunal.
This ignores the fact that the High Court can refer a matter of this kind "of its own motion" under section 10(2) of the Bar Councils Act.
We have dealt with the merits in the connected case.
This petition is dismissed but, here again, we make no order about costs.
Petition dismissed.
| There was settlement entered into on December 23, 1964 between the Motor Industries Company Employees Association and the management of the company.
Under el.
5 of the agreement it was agreed inter alia that the workmen will not go on strike without at least four days ' notice.
How,ever on May 11, 1966 the workmen went on strike without notice as a protest against the suspension of one of the workmen.
Later in the day after discussions the workmen resumed work.
On May 18, 1966 the establishment officer submitted a complaint to the Chief Personnel Officer as a result of which charge sheets alleging stoppage of work, abandoning place of work and inciting clerks and officers to join the strike were served upon five of the workmen.
Against one of them the charge of disorderly conduct and intimidation was also made.
The enquiry officer held three of the charged workmen guilty of acts of misconduct under standing order 22(2), (3), (13) and (18).
The management passed orders of ,dismissal against the three workmen.
The industrial dispute thus arising was referred to, the Labour Court which held that the said enquiry was validly held and that the management were justified in passing the orders of dismissal.
In appeal by special leave the following contentions were raised on behalf of the workmen appellants : (i) that the said association not having given a call for the said strike the said charges were misconceived and the orders of dismissal were consequently not sustainable; (ii) that the said strike, which was spontaneously staged by the workmen, was not illegal under section 24 of the Industrial Disputes Act nor was it in contravention of any law as required by standing order 22(2) and (3); (iii) that the said disciplinary proceedings were in contravention of the agreement arrived at on May 11, 1966, and therefore, the dismissal following such disciplinary proceedings amounted to unfair labour practice; (iv) that the orders of dismissal were passed on charges including that of intimidation though the misconduct of intimidation was not found by the enquiry officer and hence the said orders were illegal; (v) that to punish only three workmen when a large number of workmen had taken part in staging the strike and in inciting others to join it constituted victimisation, (vi) that the finding of the enquiry officer were based on no evidence or were perverse in that no reasonable body of persons could have arrived at them on the evidence before him.
HELD : (i) Clause 5 of the settlement dated December 23, 1964 did not contemplate any dichotomy between the association and the workmen 305 as suggested on behalf of the appellants.
Such an interpretation is repugnant to the principle that a settlement once arrived at by the association must be regarded as one made by it in its representative character, and therefore binding on the workmen.
Therefore, although the settlement mentioned in cl. 5 the management, workmen and the association, the expression 'workmen ' therein was unnecessary, for without that expression also it would have been as efficaciously binding on the workmen as on the association.
This conclusion was strengthened by the fact that the settlement mentioned the management and the association on behalf of the workmen only as the parties thereto and the signatories thereto also were only the representatives of the two bodies.
[309 F H] Further, the appellants ' contention if accepted would lead to a surprising result, namely, that though a strike at the instance of the association required four days ' notice, a notice by the workmen without any call from the association would not require any such notice and that the settlement left complete liberty to the workmen to launch a sudden strike.
The first contention on behalf of the workmen had therefore to be rejected.
[309 D] (ii) Read in the context of the other provisions of Part I of the settlement of which it was part, cl. 5 was intended to prohibit (a) direct action without notice by or at the instance of the association and (b) strikes by workmen themselves without the approval of the association.
The words 'in no case ' used in the clause emphasized that direct action by either party without notice should not be resorted to 'for any reason whatsoever.
There could be no doubt that the settlement was one as defined by section 2(p) of the Industrial Disputes Act and was binding on the workmen under section 18(3) of the Act until it was validly terminated and was in force when the said strike took place.
The strike was a lightning one, was resorted to without notice and though it was not at the call of the association, it was in breach of cl. 5.
[311 A C] The strike was in the matter of suspension of one of the workmen pending a domestic enquiry against him, a matter which obviously was not one of the matters covered by the said settlement.
It was, therefore, not a strike illegal under section 24 read with section 23(c).
However being in con travention of cl. 5 of the said settlement and that settlement being binding on the workmen concerned and in, operation at the time was punishable under section 29 and therefore.
illegal under that section.
[312 F] The strike being illegal, standing order 22 would apply and participating in or inciting others to join such a strike would amount to misconduct for which the management was entitled to take disciplinary action.
The second contention on behalf of the workmen must also, therefore, fail.
[313 D] The Tata Engineering & Locomotive Co. Ltd. vs C. B. Mitter, C.A. No. 633/1963 dt.
2 4 1964, referred to.
(iii) The Labour Court on the evidence held that the association failed to prove that the management had agreed in order to end the strike on May 11, 1966, not to take action against any of the workmen in connection with the strike, though it may be that they might have agreed not to victimise any workmen for participating in the strike.
In fact the management did not impose any penalty against any workman for joining the strike, not even against the three concerned workmen.
This finding being purely one of fact and the Labour Court having given cogent reasons for it this Court would not interfere with it.
The contention alleging unfair labour practice must also therefore fail.
[313 G H] 306 (iv) Although in his report the enquiry officer did not use the expression 'intimidation ' the evidence which he accepted was that the workman in question thumped his hand on the table and used threatening words to .an officer of the company.
The Enquiry officer 's finding of disorderly behaviour must therefore be held to include acts of intimidation.
Accordingly the contention that the orders of dismissal were bad as they took to account the charge of intimidation of the company 's officers although the enquiry officer had found that charge was not proved, must be rejected.
13 14 B G] (V) The evidence showed that the three workmen concerned were in the forefront of the crowd which entered the premises of the company and committed and incited disorderly behaviour.
In taking action against them and not the rest of the workmen there was no discrimination and no victimisation.
[315 C] Burn & Co. Ltd. vs Workmen, , distinguished.
(vi) There was no substance in the contention that the findings of the enquiry officer were based on no evidence or were perverse.
|
Appeals Nos.
23 5 and 236 of 1967.
Appeals from the judgment and order dated March 21, 1966 of the Mysore High Court in Income tax Referred Case No. 19 of 1964.
Jagadish Swarup, Solicitor General, G. C. Sharma and B. D. Sharma, for the appellant (in both the appeals).
R. Gopalakrishnan, for the respondent (in both the appeals).
353 The Judgment of the court was delivered by Grover, J.
These appeals by certificate arise out of a common judgment of the Mysore High Court in references made with regard to the assessments relating to the assessment years 1953 54 and 1954 55.
For the assessment year 1953 54 the assessee was served with a notice under section 22(2) of the Income tax Act 1922, hereinafter called the "Act", on March 5, 1954.
A similar notice was served in respect of the assessment year 1954 55 on June 5,.1954.
The assessee failed to file any return in compliance with the notices.
Thereupon he was served with notices under section 22(4) for both the assessment years and was required to produce accounts on specified dates.
None appeared on any one of those dates but applications were submitted praying for adjournment on certain grounds.
The Income tax Officer was not satisfied with the reasons given for seeking adjournments and he proceeded to make the assessment under section 23 (4) of the Act.
The assessee moved the Income Tax Officer under section 27 to reopen the assessments on the grounds given in the applications filed in that behalf.
The Income Tax ' Officer appeared to be satisfied that there was sufficient cause for noncompliance with the notices issued under section 22(4) of the Act but he was of the view that the assessee had been a habitual defaulter inasmuch as he had not submitted the return under section 22 (2) even for several preceding years for which the assessments had to be completed under section 23(4) of the Act.
He declined to reopen the assessment under section 27.
Appeals to the Appellate Assistant Commissioner were filed.
According to the Appellate Assistant Commissioner sufficient cause for non compliance with one of the statutory notices i.e. the notice under section 22(4) could not constitute 'sufficient cause for non compliance with any other statutory notice (in this case the notice under section 22(2)).
The appellate tribunal dismissed the appeals filed by the assessee upholding the view of the departmental authorities.
On the tribunal having declined to refer the questions of law which were sought to be referred the High Court directed the Tribunal to state a case and refer the following questions of law "Whether the Income Tax Officer having recorded a finding that there was sufficient cause for non compliance with the notice issued under Section 22(4), was not bound to cancel the assessment made under Sec.
23(4) and to proceed to make a fresh assessment even though there was no sufficient cause for non compliance with the notice under Sec.
22(2) ?" 354 The High Court answered the question in favour of the assessee.
Section 27 of the Act is in the following terms : section 27.
"Cancellation of assessment when cause is shown.
Where an assessee within one month from the service of a notice of demand issued as hereinafter provided, satisfies the Income Tax Officer that he was prevented by sufficient cause from making the return re quired by section 22, or that he did not receive the notice issued under sub section (4) of section 22, or sub section (2) of section 23, or that he had not a reasonable opportunity to comply, or was prevented by sufficient cause from complying with the terms of the last mentioned notices, the Income Tax Officer shall cancel the assessment and proceed to make a fresh assessment in accor dance with the provisions of section 23.
" Section 22 provides for return of income.
Sub section ( 1 ) relates to a general notice to be given each year by the Income Tax Officer by publication in the press or in the prescribed manner.
Subsection (2) relates to an individual notice.
According to sub section
(4) the Income Tax Officer may serve on any person who has made a return under sub section
(1) or upon whom a notice has been served under sub section
(2) a notice requiring him on a date to be specified to produce or cause to be produced such account or documents as the Income Tax Officer may require or to furnish in writing and verified in the prescribed manner in such form and on such points or matters as may be required for the purpose of the section including, with the previous approval of the Commissioner, a statement of assets and liabilities not included in the accounts.
Under section 23 if the Income tax Officer is satisfied without requiring the presence of the assessee or the production by him of any evidence that a return made under section 22 is correct and complete he has to assess the total income of the assessee on the basis of the return filed by him [sub. section (1)].
If he is not so satisfied he must serve a notice requiring the person who has made the return to attend at his office or to produce or cause to be produced any evidence on which such person may rely in support of his return [sub. section (2)].
Under sub section
(3) the Income tax Officer after hearing such evidence as may be produced by the person making the return in response to the notice issued under sub section
(2) or such other evidence as the Income tax Officer may require to be produced on specified points has to assess the total income of the assessee.
It is provided by sub section
(4) "If any person fails to make the return required by any notice given under sub section (2) of section 22 and 355 has not made a return or a revised return under subsection (3) of the same Election or falls to comply with all the terms of a notice issued under sub section (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under sub section (2) of this section, the Income Tax Officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment. .
The High Court considered that the provisions of section 27 were not cumulative but disjunctive and so the assessee could claim cancellation of the assessment on one of the grounds on which such cancellation could be sought under the section.
According to the High Court it followed that even if there was no sufficient cause for noncompliance with a notice issued under section 22(2) so long as there was sufficient reason for non compliance with the notice issued under section 22(4) the assessee could ask for the cancellation of the assessment.
In our judgment the view of the High Court cannot be sustained.
The clear import of section 23(4) is that on committing any one of the defaults mentioned therein the Income tax Officer is bound to make the assessment to the best of his judgment.
In other words if a person fails to make the return, required by a notice under section 22(2) and he has further not made return or a revised return under sub 5.
(3) of the same section the Income tax Officer must make an assessment under section, 23(4).
Similarly if that person fails to comply with all the terms of the notice issued under section 22(4) or if he fails to comply with all the terms of the notice issued under section 23(3) the Income tax Officer must proceed to make an assessment to the best of his judgment.
Section 27 empowers the Income tax Officer to cancel the assessment when sufficient cause is shown but such causer has to be shown for each default.
For the sake of illustration, if an assessee makes a default under section 22(2) by not filing a return, pursuant to a notice received under that section and he also does not comply with the notice under section 22(4) he must show sufficient cause for non compliance with both the provisions and he cannot get the assessment cancelled merely by showing good cause for one of the two defaults.
Although the word "or" which is disjunc tive is used in section 27 it has to be read in a reasonable and harmonious way and in conjunction with section 23(4).
It is inconceivable that the legislature could ever intended that in case of ' multiple defaults for each one of which an ex parte best judgment.
assessment has to be made the assessee can ask for cancellation of ' the assessment by merely showing cause for one of such defaults.
In our opinion the Bombay High Court in Chiranjilal Tibrewala vs 356 The Commissioner of Income tax, Bombay City II(1) was right in holding that in circumstances similar to the present case the assessee cannot ask for cancellation under section 27 of an assessment made under section 23 (4).
In this view of the matter the judgment of the High Court has to be set aside, and the question has to be answered against the assessee and in favour of the appellant.
The appeals are accordingly allowed with costs One hearing fee.
V.P.S. Appeals allowed.
| Notices under section 22(2) of the Income tax Act, 1922, were not complied with by the respondent (assessee) and the Income tax Officer issued notices under section 22(4).
Since they were also not complied with the Income tax Officer made a best judgment assessment under section 23(4).
Thereupon, the assessee applied under section 27 for reopening the assessment.
The Income tax Officer found that there was sufficient cause for noncompliance with the notices under section 22(4), but, as there was no sufficient cause for non compliance with the notices under section 22(2), he declined to reopen the assessment.
The order was confirmed in ' appeal and by the Tribunal.
But the High Court held in favour of the assessee.
In appeal to this Court, HELD : Under section 23(4) on the assessee committing any of the defaults mentioned therein, namely, failure to make a return as required by a notice under section 22(2) or a revised return under section 22(3) or noncompliance with the terms of a notice under section 22(4) or failure to comply with the terms of a notice under section 23(2), the Income tax Officer is bound to make a best judgment assessment.
Section 27 empowers, the Income tax OfFicer to cancel the assessment when sufficient cause is shown; but, such cause has to be shown for each default.
Therefore, if the assessee makes default by not filing a return pursuant to a notice under section 22(2) and also does not comply with a notice under section 22(4) he must show sufficient cause for non compliance with both the provisions.
The Legislature could not have intended that in case of multiple defaults, for each one of which an ex parts best judgment assessment has to be made, the assessee can ask for cancellation of the assessment by merely showing cause for one of such defaults.
[355 D H] Chiranjilal Tibrewala vs Commissioner of Income tax, Bombay City H, , approved.
|
Civil Appeal Nos.
2254 & 2255 of 1968.
(From the Judgment and Order dated the 10 1 1967 of the Madhya Pradesh High Court in Misc.
First Appeal No. 12/64) Ram Panjwani, Rameshwar Nath, for the appellant in both the appeals.
A. G. Ratnaparkhi, for respondent No. 1 in CA 2254/68.
S.K. Gambhir, for respondent No. 1 in CA No. 2255/68.
The Judgment of the Court was delivered by GUPTA, J.
On June 23, 1961 a bus owned by the appellant which was going from Gwalior to Indore met with an accident as a result of which two of the passengers, Mrs. Usha Kotas thane, aged about 23 years, and her one year old son, died and several others received serious injuries.
Among the injured was one Sailesh Kumar, a boy of about four years.
Claims for compensation were filed before the Motor Acci dent Claims Tribunal at Gwalior.
The application for com pensation for the death of Mrs. Usha Kotasthane and her child was made by her husband Shri Sudhakar Kotasthane, and the claim in respect of the injury to minor Sailesh Kumar was made on his behalf by his guardian mother Shrimati Indubala Bhandari.
Sudhakar Kotasthane and Indubala Bhand ari were also travelling in the same bus and both sustained injuries and were awarded compensation by the tribunal, but these appeals do not concern their cases or the claim in respect of Kotasthane 's dead child.
The two appeals before us at the instance of the Madhya Pradesh State Road Trans port Corporation, on certificate granted by the Madhya Pradesh High Court, are against the common judgment of the High Court enhancing the quantum of damages awarded by the claims tribunal in respect of the death of Mrs. Usha Kotas thane and the injury sustained by Sailesh Kumar.
C.A. 2254 of 1968 relates to the award in Mrs. Kotasthane 's case and C.A. 2255 of 1968 to that in the case of Sailesh Kumar.
629 As regards the death of Mrs. Usha Kotasthane, the claims tribunal awarded Rs. 15000/ as damages to her hus band Sudhakar.
At the time of her death she was employed as a Physical Instructress in a school at Indore, getting a salary of Rs. 190/ per month, in the grade of Rs.150 10 250.
Admittedly Sudhakar remarried within a year of the death of his first wife.
This is how the tribu nal dealt with the claim: "In the present case, it is a case of the death of the wife.
The husband was not dependent on the earning of his wife.
He was himself earning independently.
The applicant has no where stated that on account of the death of his former wife, he has been deprived of her income, nor that he was dependant upon her.
It is true; that 'the wife of the appli cant was educated, healthy, employed, and earning.
As far as, the loss of companionship is concerned, it is again true that he faced this loss for nearly, 11 months, after which, he married for the second time.
No cross examination has been led by the non applicant on the point that the second wife is as accom plished, educated, and healthy as the former one was.
The death of the wife of the appli cant must have caused him mental shock, pain and inconvenient in his house hold.
The work in the house, which he could take from his wife in looking to the household was also not available to the applicant during this period of 11 month.
The advantage of established married life with a child in the lap, was also lossed to the applicant during this time.
Taking into consideration all these facts, in favour of the applicant, and the fact, against him that he was married again after 11 months, of the death of his wife, I think, it will be proper to award damages amounting to Rs. 15000/ for the loss of life of his wife, which resulted into conditions of inconven ience, suffering shock derangement in house and the life, for a period of nearly 11 months.
" Both sudhakar Kotasthane and Madhya Pradesh State Road Transport Corporation preferred appeals to the High Court from the decision of the tribunal.
The High Court proceeded as follows.
The "span of her earning life" was counted as 35 years taking 58 years as the age of superannuation.
For the first six years from the date of accident, the High Court took Rs. 200/ as the average monthly income, and for the remaining twenty nine years of service the average income per month was fixed at Rs. 250/ .
On this basis the High Court computed her total earning to be Rs. 96,000/ .
Giving allowance for her own expenses and also taking into account the promotions and consequently the increased salary she might have earned, the High Court thought that she could have "easily spread" half of this amount for the household and estimated the loss of income on account of her death in round figures, at Rs. 50,000/ .The High Court enhanced the compensation accordingly.
Regarding Sudhakar 's second, marriage the High Court observed: 630 "But even so the second marriage cannot be said to be a substitute for the ' first one.
The second wife is not an earning member of the family nor is it shown that Sudhakar has in any way benefitted from the second marriage financial ly.
Therefore the financial loss would be there despite the second marriage.
" On these findings the High Court allowed the appeal filed by Sudhakar Kotasthane and dismissed that preferred by the Madhya Pradesh State Road Transport Corporation.
The extract from the tribunal 's order quoted above suggests that in fixing the quantum of compensation the tribunal was under the impression that the applicant had made no claim on the ground of ' pecuniary loss resulting from his wife 's death.
In this the tribunal was clearly in error.
In paragraph 11 of the claim petition, Rs. 75,000/is claimed as compensation and the paragraph makes it clear, that the sum is computed on the deceased 's expected earn ings.
If there were no such claim the tribunal would have been hardly justified in awarding Rs. 15000/ as damages for the mental shock and inconvenience suffered by the applicant for a period of 11 months only, after which he remarried.
The High Court also does not seem to be right in estimating the damages at Rs. 50,000/ in the manner it did.
Whether the deceased 's average monthly salary is taken to be Rs. 200/ or Rs. 250/we find it difficult to agree that only half of that amount would have been sufficient for her monthly expenses till she retired from service, so that the remaining half may be taken as the measure of her husband 's monthly loss.
It is not impossible that she would have contributed half of her salary to the household but then it is reasonable to suppose that the husband who was employed at a slightly higher salary would have contributed his share to the common pool which would have been utilised for the lodging and board of both of them.
We do not therefore think it is correct to assume that the husband 's loss amounted to half the monthly salary the deceased was likely to draw until she retired.
If on an average she contributed Rs. 100/every month to the common pool, then his loss would be roughly not more than Rs. 50/ a month and, assuming she worked till she was 58 years, the total loss would not exceed Rs. 19,000/ .
But in assessing damages certain other factors have to be taken note of which the High Court over looked, such as the uncertainties of life and the fact of accelerated payment that the husband would be getting a lump sum payment which but for his wife 's death would have been available to him in driblets over a number of years Allowance must be made for the uncertainties and the total figure scaled down accordingly.
The deceased might not have been able to earn till the age of retirement for some reason or other, like illness or for having.
to spend more time to look after the family which was expected to grow.
Thus the amount assessed has to be reduced taking into account these imponderable factors.
Some element of conjecture is inevitable in assessing damages Pearce in Mallet v Mc Monagle, 1970 (A.C.) (H.L.) 166 Lord( 174)calls it "reson able prophecy"sTaking note of all the relevant factors, the sum of Rs.15000/ awarded by the tribunal appears to be a reasonable figure which h we do not find any reason to disturb.
631 A method of assessing damages, usually followed in England, as appears from Mallet vs Mc Monagle (supra), is to calculate the net pecuniary loss upon an annual basis and to "arrive at the total award b multiplying the figure as sessed as the amount of the annual "dependency" by a number of "year 's purchase" ", (p. 178) that is, the number of years the benefit was expected to last, taking into consid eration the imponderable factors in fixing either the multi plier or the multiplicand, The husband may not be dependant on the wife 's income, the basis of assessing the damages payable to the husband for the death of his wife would be similar.
Here, the lady had 35 years of service before her when she died.
We have found that the claimant 's loss reasonably works out to Rs. 50/ a month i.e. Rs. 600/ a year.
Keeping in mind all the relevant facts and contingen cies and taking 20 as the suitable multiplier, the figure come to Rs. 12,000/ .
The tribunal 's award cannot there fore ' be challenged as too low though it was not based on proper grounds.
In a decision of the Kerala.
High Court relied on by the appellant (P. B. Kader vs Thatchamma: AIR 1970 Kerala 241 ), to which one of us was a party, the same method of assessing compensation was adopted.
The other appeal (C.A. No. 2255 of 1968) relates to the injury sustained by a boy aged about four years.
He suf fered compound fracture of his right tibia and fabula lower third near the ankle joint with infection of the wound.
Skin grafting had to be done and the boy had to remain in hospital from June 25, to August 4, 1961.
AccOrding to the doctor who examined him, the child was likely to develop a permanent limp which might require another operation at the age of 16 years or so.
In any case, in the opinion of the doctor the deformity was certain to persist till the boy was 16 years when another operation might remove it.
The tribu nal awarded Rs. 10,000/as general damages and Rs. 890/ as special damages.
The High Court increased the general damages to Rs. 20,000/ .
It appears from the evidence that the boy comes from a well to do family.
Though the possibil ity was there of the deformity being removed by surgical operation when he grew up to be 16 years, the other possi bility cannot be altogether ruled out.
That being the position, we are not inclined to interfere with the sum awarded by the High Court.
In the result, appeal No. 2254 of 1968 is allowed, the judgment of the High Court is set aside and the award of the tribunal is restored; appeal No. 2255 of 1968 is dismissed.
There will be no order as to costs in either appeal.
C.A. 2254 of 1968 allowed.
S.R. C.A. 2255 of 1968 dismissed.
| Unless a statute either clearly or by necessary implica tion rules out mens rea as a constituent part of the crime, a person should not be found guilty of an offence against the criminal law unless he has got a guilty mind.
Clauses 22 and 25 of the Motor Spirit Rationing Order, 1941, read with the Defence of India Rules, 1939, do not rule out the necessity of mens rea.
Therefore, where the employees of the licensee of a petrol filling station supply petrol to a car owner without taking coupons and thus act in contravention of the provisions of the said clauses, the licensee, who was not present when the wrongful act was done and had no knowledge of it, could not be convicted for contravention of the said clauses under r. 81 (4) of the Defence of India Rules, 1939.
Clause 27 of the said Order is however differently worded and imposes a duty on the supplier to endorse or cause to be endorsed the registration or other identifying mark of the vehicle to which petrol is furnished and if these particulars are not endorsed by his employees on the petrol coupons against which petrol is supplied the supplier would be liable even if he had no knowledge of the wrongful act of his employees.
Srinivas Mall Bairolia vs King Emperor (I.L.R. 26 Pat.
46, P.C.) and Isak Solomon Macmull vs Emperor (A.I.R. referred to.
|
riminal Appeal No. 65N of 1968.
Appeal by special leave from the judgment and order, dated October 5, 1967 of the Allahabad High Court, Lucknow Bench in Criminal Revision No. 152 of 1966.
A.S.R. Chari, R.K. Garg, R.A. Gupta and S.C. Agarwal, for the appellant.
H.R. Khanna and O.P. Rana, for the respondent.
188 The Judgment of the Court was delivered by Mitter, J.
In this appeal by special leave the appellant challenges his conviction under section 3 of the Railway Stores (Unlawful Possession) Act, 1955.
The Act is a measure providing for punishment of persons in unlawful possession of railway stores who cannot satisfactorily account how they came by the same.
By section 2 "railway stores" are defined to mean any article (a) which is the property of any railway administration, and (b) which is used or intended to be used in the construction, operation or maintenance of a railway.
Section 3 defines the offence as also the measure of punishment therefore.
It reads: "If any person is found, or is proved to have been in possession of any article of railway stores reasonably suspected of being stolen or unlawfully obtained, and cannot account satisfactorily how he came by the same, he shall be punishable with imprisonment for a term which may extend to five years, or with fine, or with both.
" Before anyone can be charged with the offence under section 3 it must be shown that he was in possession of railway stores which by the definition of section does not include all articles which are ' the property of a railway administration but only those which are used or intended to be used in the construction, operation or maintenance of a railway.
Mere unlawful possession of the property of any railway administration is not an offence.
The prosecution must also prove that the articles were being actually used or were intended to be used for by the railway.
Thus any article which is the property of a railway administration but which has been discarded or rejected for further use would be outside the definition of railway stores.
Railway stores may be new or old and an offence may be committed in respect of stores of either kind.
If the railway administration has no further use of them be they new or old as in the case where they have become unserviceable or outmoded no person can be charged with an offence under section 3 in respect thereof.
It is only when the articles satisfy the definition of railway stores that the prosecution can be successfully launched against a person in unlawful possession thereof.
Even in such a case.
the prosecution must first adduce evidence to show that there was cause for reasonable suspicion of the stores being stolen or obtained unlawfully.
It is only when the burden in respect of this is discharged by the prosecution that the onus shifts to the accused to account satisfactorily of his possession of the same.
He may, for instance, show that he had purchased the property in open market where goods of this 189 kind are usually sold or that he had bought them from someone bona fide in the belief that the vendor had lawfully obtained the The facts in this case are as follows.
On the strength of some information received on 28th July, 1964 that some stolen railway property was being sent out of Lucknow through a motor transport agency, a Sub Inspector attached to the Railway Protection Force along with another Sub Inspector of Police searched the premises of the motor transport company at Lucknow the same night.
The search which took place in the presence of the appellant and the manager of the transport company revealed that a large number of parts of railway machinery (railway engines) bearing railway marks were contained in 23 bags of metal scrap booked the same day by the appellant for consignment to Jullunder.
The usual formality of preparing a recovery memo and the sealing of goods in bags in the presence of witnesses was gone through.
One Jaswant Singh, described as an expert of railway machinery parts and Foreman and Chief Inspector of N.E. Kotwali Chowk, Lucknow, examined the goods said to be railway stores and kept in 11 bags and made a report to the effect that they were all railway stores being parts of a railway engine.
It was the case for the prosecution that the appellant failed to offer any satisfactory explanation of his possession of the goods.
On the strength of the evidence adduced and principally on the report of Jaswant Singh along with his oral testimony the Magistrate found him guilty and sentenced him to imprisonment for two years.
The conviction was maintained by the Sessions Judge and the High Court.
The report made by Jaswant Singh shows that he had examined the material which he classified under 38 heads and described the same as unauctionable property.
Against each item he put a remark either "O" or "N", 'O ' signifying old goods and 'N ' meaning new ones.
The report seems to suggest that the goods being unauctionable a third party could not lawfully obtain possession of the same.
Curiously in his testimony before the court although he said that he had prepared ' the report and signed the same he made no statement to the effect that the contents of the report were correct.
His definite averment was: "Railway engine is auctioned in the market.
I cannot say if these articles were auctioned in the market.
I cannot say if these articles were auctioned Or not." In his cross examination he repeated the same averment in 'different words but only added that he had examined the articles 1Sup.
C.I./70 14 and they were parts of an engine and that railway articles were mixed with other goods in the bags.
From his deposition it is not possible to spell out any averment to the effect that the items mentioned in his report were used or intended to be used in the construction, operation or maintenance of a railway.
In our view there was no evidence before the courts to prove that the articles seized were railway stores within the meaning of section 2 of the Act.
Our attention was drawn to the case of Moyalal Rostagir vs The State(1) wherein it was held that in order to prove that the articles were railway stores it was necessary to establish that the articles in question were not only the property belonging to a railway administration but they were used or intended to be used for the construction or operation of a railway.
Counsel for the respondent however cited a decision of the Orissa High Court in Udaya Dalai vs The State(2).
The material seized in that case were tie bars and iron sleepers which were brand new.
According to the learned Judge of the Orissa High Court: " . section 2 of the Act does not require the prosecution to prove that the incriminating articles belonging to a particular railway.
From the evidence of P.W. 5 it can be reasonably inferred that as the seized articles were found to conform to the specifications of the Indian Railway Standards they held that they belonged to any of the railways in India.
His further evidence that they were 'brand new ' is also sufficient to show that they were intended to be used in the construction, operation or maintenance of the railway.
" In our view although the prosecution is not called upon to prove that the goods belong to any particular railway administration it has to establish that the articles were the property of a railway administration.
Evidence to the effect that the goods conformed to the Railway Standards fails short of such proof.
In most cases the burden of proof in this respect may be discharged by leading evidence about the identifying marks on the goods or some, peculiarity of the goods not to be found in cases of non railway goods.
Again the mere description of the goods as new would not fulfil the requirements of section 2(b).
Some evidence will have to be led to the effect that the goods of the kind were being actually used by a railway administration and that the goods were in a serviceable condition.
In the case of goods which had not been put to use evidence would have to be led to establish that they had been manufactured for such us,.
(1) (2) 30 Cuttack Law Tims, 275.
191 The evidence 'in the case before us did not establish that goods were railway stores within the meaning of section 2 of the Act and as such the question of punishment under section 3 did not arise.
The appeal will there be allowed and the bail bond of the appellant directed to be cancelled.
V.P.S. Appeal allowed.
| The appellant, the author of a short story and the printer and publisher of the story were convicted under section 292 I.P.C. on a charge of obscenity.
Setting aside the conviction this Court, HELD: It is the duty of the Court to consider the article, story or book by taking an overall view of the entire work and to determine whether the obscene passages are so likely to deprave and corrupt those whose minds are open to such influences and in whose hands the book is likely to fall; and in doing so the influence of the book on the social morality of our contemporary society cannot be overlooked.
Even so as the question of obscenity may have to be judged in the light of the claim that the work has a predominant literary merit, it may be necessary if it is at all required, to rely to a certain extent on the evidence and views of leading litterateurs on that aspect.
[82 D; 83 E G] To insist that the standard would always be for the writer to see that the adolescent ought not to be brought into contact with sex or that if they read any references to sex in what is written, whether that is the dominant theme or not, they would be affected, would be to require the authors to write books only for the adolescent and not for the adults What has to be seen is that whether a class, not an isolated case, into whose hands the book, article or story falls suffer in their moral outlook or become depraved by reading it or might have impure or lecherous thoughts aroused in their minds.
The charge of obscenity must, therefore, be judged from this aspect.
[88 D, G H] Ranjit D '.
Udeshi vs State of Maharashtra ; followed.
Applying the above tests the story read as a whole did not amount to its being pornography nor did it pander to the prurient interest.
[87 A B]
|
Civil Appeal No. 12 of 1955.
Appeal from the judgment and decree dated September 10, 1953, of the Calcutta High Court (Original Side) in I. T. Reference No. 8 of 1947.
C. K. Daphtary, Solicitor General for India, G. N. Joshi and B. H. Dhebar, for the appellant.
K. P. Khaitan, Rameshwar Nath, section N. Andley and J. B. Dadachanji, for the respondents.
April 24.
The Judgment of the Court was delivered by VENKATARAMA AIYAR J.
This appeal raises a question of importance as to whether amounts shown by an insurance company as reserves for unexpired risks on pending policies are liable to be deducted under r. 2 of Sch.
II to the Excess Profits Tax Act (XV of 1940) hereinafter referred to as the Act.
The respondent is a company carrying on life, fire, marine and general insurance business, and the present dispute relates to the assessment of excess profits tax on its income from business other than life insurance for the chargeable accounting periods ending December 31, 1940, and December 31, 1941.
To appreciate the contentions raised, it is necessary to state that the policies of insurance with which these proceedings are concerned, are, unlike life insurance policies, issued in general for short periods or ad hoc in relation to a specified voyage or event.
To take the most important of them, fire insurance policies, they are issued normally for one year, and the whole of the premium due thereon is received when the policies are actually issued.
In any given year, while the premiums due on the policies would have been received in full, the risks covered by them would have run only in part and a, part will be outstanding for the next year.
The companies have to prepare annual statements of profit and loss for the purpose of ascertaining their profits and distributing their dividends.
They have also to prepare revenue statements to be sent to the authorities under the provisions of the .
The method 1004 adopted by the respondent in preparing the above statements has been that while the premiums received are all of them included in the assets of the year, a certain proportion ' thereof, usually 40 per cent., is treated as the reserve for unexpired risks, and that is shown as a liability.
To take a concrete example, if in the year 1939 the respondent issued annual fire insurance policies and received a sum of Rs. 1,00,000 as premiums thereof, the whole of it would be shown as income in the statement for the year 1939, and a sum of Rs. 40,000 will be shown as a reserve for unexpired risks.
In the profit and loss statement, the former will be shown as part of the assets and the latter as liability, and it is only the balance that will be included in the net profits.
In 1940, the policies issued in 1939 would all of them have expired, and the sum of Rs. 40,000 shown as reserve in 1939 would be treated as part of the assets in 1940.
There will, of course, be fresh policies issued in 1940, and in the statement of that year, the premiums received on those policies would be shown as part of the income, and 40 per cent.
thereof would be set apart as reserve for unexpired risks.
This ' method of account keeping is what is 'usually adopted by insurance companies, and is in accordance with well recognised and approved practice of accountancy.
Now, the question is whether in the illustration given above, the sum of Rs. 40,000 which is set apart in 1939 as reserve for unexpired risks is liable to be deducted under r. 2 of Sch.
II to the Act from out of the capital employed in business for that year, which would, of course, include the whole of Rs. 1,00,000 received as premiums.
The contention of the appellant is that if all the premiums received are to be treated as capital under r. 1, Sch.
11, then the sums which represent the outstanding liability in respect of the unexpired period of the policies in the illustration given above, Rs. 40,000 should be deducted as a liability under r. 2 of Sch.
The respondent, while claiming that all the premiums received mu ,it be treated as capital, maintains that the provision for unexpired risks is a contingent liability, and that that 1005 is not within r. 2 of Sch.
The Tribunal decided the question against the respondent, but on reference under section 66(1) of the Indian Income tax Act read with section 21 of the Act, the High Court of Calcutta answered the question adversely to the appellant, but granted a certificate under section 66 A, and that is how the appeal comes before us.
The relevant statutory provisions may now be noticed.
Under section 4 of the Act, the charge is on the " amount by which the profits during any chargeable accounting period exceed the standard profits ".
I Standard profits ' are defined in section 6, sub section
(1), and the respondent having exercised his option under the second proviso thereto, they have to be calculated "by applying the statutory percentage to the average amount of capital employed in the business during such chargeable accounting period Schedule II enacts rules for the determination of the average capital employed.
Under r. 1(c), the capital employed will include the value of all assets "I when they became assets of the business ".
Rule 2(1) enacts that any borrowed money and debts shall be deducted from out of the value of the assets.
There is a further provision in r. 2(1), which is what is material for the purposes of the present appeal, and it runs as follows: " The debts to be deducted under this sub rule shall include any such sums in respect of accruing liabilities as are allowable as a deduction in computing profits for the purposes of excess profits tax ; and the said sums shall be deducted notwithstanding that they have not become payable.
" For this clause to apply, two conditions must be satis fied.
The sums to be deducted should be allowable as a deduction in computing the profits for the purposes of the Act, and further they should be in respect of accruing liabilities.
Rule 1 of Sch.
1 enacts that, " The profits of a business . . during any chargeable accounting period . . shall, subject to the provisions of this Schedule, be computed on the principles on which the profits of a business are computed for the purposes of income tax under section 10 of the Indian Income tax Act, 1922.
" 1006 Section 10(7) of the Indian Income tax Act provides that, " Notwithstanding anything to the contrary contained in sections 8, 9, 10, 12 or 18, the profits and gains of any business of insurance and the tax payable thereon shall be computed in accordance with the rules contained in the Schedule to this Act.
" Rule 6 of the Schedule provides: "The profits and gains of any business of insurance other than life insurance shall be taken to be the balance of the profits disclosed by the annual accounts, copies of which are required under the , to be furnished to the Controller of Insurance after adjusting such balance so as to exclude from it any expenditure other than expenditure which may under the provisions of section 10 of this Act be allowed for in computing the profits and gains of a business.
" It is common ground that the statements furnished to the Controller of Insurance by the respondent for the relevant periods did disclose 40 per cent.
of the premiums received as reserve for unexpired risks on the outstanding policies and that the same has been treated as a liability in its profits and loss statements and allowed in the assessment of income tax.
Thus, one of the conditions required by r. 2 has been satisfied.
The whole controversy between the parties relates to the other condition whether the reserve of 40 per cent.
can be regarded as a sum in respect of accruing liability.
The contention of the learned Solicitor General is that it must be so regarded, and his argument in support of it may thus be stated: A contract of insurance is complete as soon as the policy is issued.
From that time, the risk begins to attach to it, and there is a liability incurred.
Rule 2 does not require that the liability should have actually accrued; it is sufficient that it is accruing.
Liability under a policy must be held to be accruing so long as the policy is in force, because it can ripen into actual liability at any time during the life of the policy on the happening of the specified event.
When the assessee shows a certain amount as the value of that 1007 liability, it is a sum in respect of an accruing liability and must be deducted under r. 2.
In support of this contention, the decision in Sun Insurance Office vs Clark (1) was relied on.
The facts of that case were as follows: A fire insurance company which had been following the practice of entering in its annual statements 40 per cent.
of the total premium receipts as reserve for unexpired risks claimed a deduction therefor in the assessment of its annual profits.
The validity of the claim having been disputed, the question as to its admissibility was referred to the decision of the court.
Bray J., who heard the reference, held that the amounts reserved for unexpired risks should be deducted firstly on the ground that the premium which had been paid in respect of a risk for a whole year could not be said to have been wholly earned, when a portion of the period covered by the policy was still to run, and that the reserve therefore was not income earned, and secondly and in the alternative, on the ground that as the premium had been received burdened with a liability which had been only partially discharged in the year of account, the portion of the liability still outstanding should be valued on the analogy of unpaid price due in respect of property purchased and included in the trading assets.
This decision was taken in appeal, and was reversed by the Court of Appeal, the learned Judges holding that though the reasoning of Bray J. was sound, the question was concluded against the assessee by the decision of the House of Lords in The General Accident Fire and Life Assurance Corporation vs McGowan (2 ).
The case came on further appeal before the House of Lords which agreed with Bray J.that the deduction was admissible, and distinguished the decision in The General Accident Fire and Life Assurance Corporation vs McGowan (2 ) as one turning on the facts of that case and as not laying down that, as a matter of law, the deduction could not be made.
Lord Haldane stated the ground of his decision thus: ". . the case is analogous to one in which if goods are bought their value cannot be treated as (1) ; ; (2) 1008 profit without deducting the value of the liability to pay for them which the buyer has incurred." Lord Alverstone expressed the reasoning on which he based his conclusion as follows: "Premiums are not profits or gains, they are receipts which must be brought into account and out of which, after proper deduction for losses, profits will accrue." Lord Atkinson also rested his decision on the same ground, and observed: " That case (Gresham Life Assurance Society vs Styles) (1) clearly decided that the receipts of a business are not in themselves profit and gains within the meaning of the Income Tax Acts, but that it is what remains of those receipts after there has been deducted from them the cost of earning them which constitute the taxable profits and gains.
Now what is the service which a Fire Insurance Company renders to each insurer in consideration for the premium it receives ? It is only, by rendering this service in each case it earns these receipts.
The service consists in indemnifying the insurer against loss by fire during the continuance of his policy. .
Yet until that time has expired the service for which the Company has been paid has not been completely performed.
If the accounts of the Company are to be rendered before the date of expiry, then some division of the premium must be made, and the proportion to be appropriated to the service which is to be performed thereafter.
I think the description 'unearned premium ' which has been used to describe this latter portion is a very appropriate and accurate description.
" It is also material to note that one of the authorities relied on for the Crown was the decision in Scottish Union and National Insurance Company V. Smiles (2) wherein, discussing how the reserve for unexpired risk in fire policies is to be dealt with in computing the profits, the Lord President observed: " Seeing that fire insurance policies are contracts for one year only, the premiums received for the year (1) (2) 1009 of assessment, or on an average of three years, deducting losses by fire during the same period and ordinary expenses, may be fairly taken as profits and gains of the Company without taking into account or making any allowance for the balance of annual risks unexpired at the end of the financial year of the Company." Referring to this and to another decision, Lord Haldane observed that they " are not, when carefully examined in the light of what appears to be the true principle, reliable as authorities for the proposition which would run counter to the practice and good sense of the commercial community.
" On the strength of the observations quoted above, the argument has been advanced by the learned Solicitor General that the obligation which an insurance company contracts when it issues a policy is to be treated, in computing its profits for the purposes of taxation, as a liability in praesenti.
Mr. K. P. Khaitan, learned counsel for the respondent, disputes the correctness of this contention.
He argues that whatever the position under the English law, a contract of insurance is under the Indian Contract Act merely a contingent contract, that until the event specified in the policy happens, there is no enforceable liability, and that accordingly unexpired risks in pending policies cannot be treated as present liabilities.
He also urges a further contention based on the history of the enactment of r. 2 of Sch.
II to the Act.
That rule as originally passed mentioned only borrowed money and debts, and it was by section 10 of the Excess Profits Tax (Amendment) Act (XLII of 1940) that accruing liabilities were brought within that rule.
And when they were brought in, they did not come as something independent of and distinct from borrowed money and debts.
They came in under a provision, which enacted that the debts to be deducted under the rule included sums in respect of accruing liabilities.
Relying on this circumstance, counsel for the respondent contends that however liberally the expression " accruing liabilities " might be construed, it cannot be interpreted so as to take in liabilities which do not bear the character of debts, and that a liability under a contract of 130 1010 insurance where under risk had not materialised, cannot be held to be a debt, and is therefore not an accruing liability within the rule.
In support of this position, he relies on the decisions in Webb vs Stenton (1) and Israelson vs Dawson (Port of Manchester Insurance Co., Ltd., Garnishees) (2).
In Webb vs Stenton (1), the question was whether a sum which was payable to the judgment debtor under a trust deed but which had not become due could be attached in the hands of the trustees as a debt owing or accruing within 0. 45, R. 2 of the English Rules of Practice.
In holding that it could not be, Lindley L.J. observed: " I should say, apart from any authority, that a debt legal or equitable can be attached whether it be a debt owing or accruing; but it must be debt, and a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation, debitum in praesenti, solvendum in futuro.
An accruing debt, therefore, is a debt not yet actually payable, but a debt which is represented by an existing obligation.
" Israelson vs Dawson (Port of Manchester Insurance Co., Ltd., Garnishees) (2) was again a decision on 0. 45, R. 2, the Court holding that the amount which became payable under a policy as the result of the accident specified therein having occurred was, nevertheless, not a debt which could be attached under this rule, before the compensation had been determined by the arbitrator in accordance with the conditions of the policy.
The argument of the respondent based on the above decisions is that until the risk specified in the policy materialises and, consequent thereon, the compensation payable thereunder is ascertained, there is only a contingent liability and not a debt, and that such liability is not within r. 2 of Sch.
II to the Act.
In answer, the learned Solicitor General contends that the decisions quoted above are not in point, they having been given on a different statute, that the decision in (1) , 527.
(2) 1011 Sun Insurance Office vs Clark(1) which dealt with the question of assessment for purposes of taxation was directly applicable, and that according to that decision, the amounts reserved for unexpired risks would be sums in respect of accruing liabilities.
That a contract of insurance is a contingent contract does not admit of argument.
That is so under section 31 of the Indian Contract Act, and that is also the law in England where it is termed " conditional contract".
(Vide Pollock on Contracts, 13th Edn., p. 222).
This, however, is not material for the purpose of the present discussion which is how such contracts are to be dealt with in assessing, the taxable profits of an insurance company.
That is a matter which must be determined on the provisions of the taxing statutes and their application to the facts found with reference to the particular assessment.
And it is in this view that the decision in Sun Insurance Office vs Clark (1) becomes important.
Now, what is the ratio of this decision? The law is well settled that a liability which is purely contingent cannot be allowed as a deduction in computing the profits of a business.
And in holding that unexpired risks in respect of pending policies could be estimated and deducted out of the gross premium receipts, the House of Lords must be held to have decided that the obligation of an insurer under such risks was a liability in praesenti.
Reference might be made in this connection to the recent decision of the House of Lords in Southern Railway of Peru Ltd. vs Owen (2).
There, the appellant Company operated a railway in Peru under a statutory scheme under which its employees were entitled to receive from it a lump sum payment on retirement, death or other termination of service.
The Company claimed that it was entitled to value this liability in accordance with "accountancy practice" and to deduct the same from out of its annual profits.
And support for this contention was sought in the decision in Sun Insurance Office vs Clark (1).
In rejecting this claim it was observed by the House of Lords that the accountancy valuation was not necessarily the correct (1) ; ; (2) ; 1012 valuation for purposes of income tax, and that the real point for decision was whether the claim was to be regarded as an essential charge against the trade receipts during the year.
In distinguishing the decision in Sun Insurance Office vs Clark (1), Lord Oaksey made the following observations, which are pertinent to the present discussion: " Reliance was placed, during the argument, on Sun Insurance Office vs Clark (1), in which this House held that a percentage of the premium income of an insurance company might be deferred as a receipt to a future year because it was paid as consideration for future liability, but the principle of that decision is not, in my opinion, applicable to the present case.
The premium income was only deferred and would suffer tax in a future year, whereas, in the present case, if the appellant is permitted to deduct compensation, Which it has not paid and which it may never have to pay, that compensation will escape tax altogether.
There is, in my opinion, a fundamental distinction between a contingent liability and a payment dependent on a contingency.
When a debt is not paid at the time it is incurred its payment is, of course, contingent on the solvency of the debtor but the liability is not contingent.
Similarly, the liability in Sun Insurance Office vs Clark (1) was not, in my opinion, contingent but remained in force throughout the period of the insurance, though payment in pursuance of that liability might, or might not, have to be made.
" The decision in Sun Insurance Office vs Clark (1) and the observations in Southern Railway of Peru, Ltd. vs Owen(1) quoted above do support the contention of the appellant that in computing the profits of an insurance company for purposes of income tax, the unexpired risks are to be treated as a present liability.
But even so, on the footing that r. 6 in the Schedule to the Indian Income tax Act has adopted the law as laid down in Sun Insurance Office vs Clark (1), the question still, remains whether unexpired risk in an outstanding policy is an accruing liability within r. 2 of Sch.
II to the Act.
It is contended for the (1) ; (2) ; 1013 appellant that if that liability is a present liability for purposes of assessing the taxable profits for purposes of income tax, it must logically be the same for purposes of excess profits tax, and must therefore be deducted under r. 2 of Sch.
II to the Act.
That would be so, if the scheme and framework of the Excess Profits Tax Act were the same as those of the Income.
tax Act.
But the fact is that the Excess Profits Tax Act differs, in material respects from the Income tax Act, and the principles applicable in the assessment of profits under section 10 of the latter enactment cannot necessarily be held to be applicable in the ascertainment of the capital employed under rr.1 and 2 of Sch.
II to the former Act.
The object of the Excess Profits Tax Act is to tax profits of a business when they overflow a certain level.
That level is determined thus: A certain,period called the standard period is taken; the capital invested and the profits made in the business during that year are ascertained, and the standard profits are worked out in relation to those two factors.
Then, the capital actually employed in business during the chargeable accounting period is ascertained.
If the capital is the same as that employed in the standard period, then there is no further problem; but if it is more, then the standard profits are increased, and if it is less, they are reduced pro tanto.
Thus, the whole scheme of the Act is to tax profits above a certain level, and that level will move upwards or downwards as the capital employed may be more or less.
It is this that constitutes the distinguishing feature of the Excess Profits Tax Act, and it is the determination of the capital actually employed in business that forms one of the most important and arduous tasks in the ascertainment of taxable profits under the Act.
Rule 1 of Sch.
II to the Act enumerates three categories of properties, which are to be included in the computation of capital.
It is to be noted that this rule does not adopt any legalistic or conventional notion of what is technically termed 'capital '; but it proceeds on a factual basis to include whatever is utilised in business, :whether it be tangible property or intangible 1014 property.
The object of the provision is clearly to confer a benefit on the assessee by enabling him to retain at least in part the profits realised by him by investment of additional capital.
Then there is r. 2, which provides for certain deductions being made out of capital.
Omitting for the present "accruing liabilities", which form the subject of the present controversy, the other two items mentioned therein are borrowed money and debts, and the reasons for their exclusion from capital falling within r. 1 would appear to be this: Money borrowed and debts incurred for the purpose of the business must have been utilised in it, and would be included in the capital employed as defined in r. 1.
The policy of the law being to give some relief to an assessee who invests additional capital in his business, the reason of it requires that that should be limited to capital contributed by the assessee himself.
Otherwise, the benefit intended to be given to him might be abused, and the object of the legislation defeated by large scale employment of borrowed capital.
Borrowed money and debt are therefore to be deducted out of what is capital within r. 1.
We now come to the expression "accruing liabilities".
What does it precisely import ? To decide that, we must have regard to the scope and purpose of rr. 1 and 2 of Sch.
II to the Act and to the context and setting of the expression.
It has been already pointed out that the object of the Act is to tax profits which overflow a certain line indicated by what is termed " standard profits ", that the location of that line varies with the capital employed, that the scheme of r.
I is on a factual basis to treat as capital all assets tangible and intangible which are thrown into a business and contribute to the earning of profits and to exclude therefrom under r. 2 that part of it which came in as a result of borrowing.
Now, obviously.
a deduction under r. 2 can only relate to what is capital under r. 1, and that must be a really profit earning asset, whether tangible or not .
Borrowed money to be deducted under r. 2 is money borrowed for the purpose of the business, and which has gone to swell the capital under r. 1.
That is also the position as regards debts.
And 1015 accruing liabilities which are liable to be deducted under r. 2 must also be of the same character as borrowed money and debts with which they are associated on the principle of noscitur a sociis.
They must be such as can be said to have been utilised in the business and formed part of the really effective trading assets during the chargeable accounting period.
If that is the correct approach, as we conceive it is, the question to be considered is neither, on the one hand, whether the liability amounts in law to a debt for if it is capable of being utilised in business and is so utilised, it will fall under r. 2, even though it is not strictly speaking a debt; nor, on the other hand, whether it is a liability which has been treated as one for the purpose of assessing income tax.
In assessing income from business under section 10 of the Income tax Act, what is allowed as a deduction is any liability incurred solely and exclusively for the purpose of the business, and when that has not matured, its value is to be determined according to rules of accountancy and deducted.
But when a deduction is claimed under r. 2, what has to be seen is whether the obligation is such that it could be regarded as an asset used in the business, such as could conceivably contribute to its profits.
If that is not established, then it cannot be included as capital under r. 1, and cannot be deducted therefrom under r. 2 as an accruing liability.
It should not be overlooked that a deduction under section 10 of the Income tax Act and that under r. 2 of Sch.
11 to the Act proceed on totally different lines and have different objects in view.
Under section 10, the deduction is claimed by the assessee, and that has the effect, when allowed, of reducing the taxable profits.
Under r. 2, it is claimed by the department, and if allowed, it will enhance the liability of the assessee by reducing the capital under r. 1.
Incidentally, how inappropriate the principle laid down in Sun Insurance Office vs Clark (1) would be if it is applied for determining the question of capital employed in business for the purpose of Excess Profits Tax Act will be seen from (1) ; ; 1016 the fact that one of the grounds on which the decision therein was based was that 40 per cent.
of the premiums received and set apart as reserve for unexpired risks was unearned income, and could not therefore be regarded as profits for the purpose of the Act.
If that were the true position under the Excess Profits Tax Act, then the reserve could not be included in the capital of the business, and, indeed, that was one of the contentions urged by the learned Solicitor General.
But that was not the stand taken by the department before the Tribunal and that is directly opposed to the plain language of r. I of Sch.
II, under which all the premiums thrown into the business would be capital employed in the business.
That clearly shows how unsafe it will be to adopt the principles laid down for the purpose of assessing business profits under the Income tax Act to a determination of the question of the capital employed under the Excess Profits Tax Act.
In this view, is the reserve for unexpired risks an "accruing liability " within r. 2 ? The decision in.
Sun Insurance Office vs Clark(1) that it should be allowed as a deduction was based on two grounds.
One was that it should be regarded as " unearned income ", and for the reasons already stated, it cannot avail when the question is one of determining capital under the Act.
And the other was that the reserve represents a liability in the nature of unpaid price of property included in the trading assets.
But apart from the fact that we have to strain the analogy in applying it to the present situation, can that liability be held to be of the character contemplated by r. 2 ? Can it be said that the reserve for unexpired risk was, like borrowed money and debt, part of the real trading assets of the business ? The answer must clearly be in the negative.
The reserve liability could not factually be said to have contributed to the running of the business or the earning of profits.
It was some.
thing in the air, and could have had no effect in the working of the concern, during the chargeable accounting period.
It cannot therefore be held to be an is accruing liability " within r. 2 of Sch.
11 to the Act.
(1) ; ; 1017 A case very much in point is the decision in Northern Aluminium Co. Ltd. vs Inland Revenue Commissioners(1).
There, the question arose whether a conditional liability under a contract was an " accruing liability " within the corresponding provision in the English Excess Profits Tax Act.
The facts were that on December 16, 1939, an agreement was entered into between the Ministry of Aircraft Production and a company engaged in manufacturing aluminium products and supplying them to manufacturers of aircraft for the Government, wherein it was provided that the prices which the latter was then charging to its customers should be reduced for the period July 1, 1939, to June 30, 1940, and that the amount by which the prices paid to the company were in excess of the reduced prices should be paid by the company to the Ministry.
The agreement further provided that negotiations should be started not later than June 30, 1940, for determining the rates to be charged for the periods following June 30, 1940.
The agreement was, in fact, concluded only on October 12, 1942, whereby the prices to be charged by the company were fixed for the years 1941, 1942 and 1943.
In accordance with the agreement entered into on October 12, 1942, a sum of pound 2,743,469 was repaid by the company to the Ministry in 1943 being the difference between the price paid by the customers and that fixed in the agreement.
This amount was actually allowed as a deduction in the assessment of the business income for purposes of income tax, and the dispute related to the question whether it could be deducted in assessing the excess profits tax as an "accruing liability" of the company for the chargeable accounting period which was January 1 to December 31, 1941.
It was held by the Court of Appeal that there was, in fact, no agreement between the parties during the chargeable accounting period, and that therefore no liability was incurred.
In the alternative, it was held that even if the agreement dated December 16, 1939, could be construed as amounting to a conditional agreement for the period subsequent to June 30, 1940, the obligation created thereby could not be (1) , 554.
1018 regarded as an accruing liability within the rule in question.
Lord Greene M.R. stated the reason thus: " A purely conditional liability, which may or may not mature, is not one which falls within that language, for this reason: Quite apart from the actual words, it would be contrary to the whole conception underlying these capital provisions because a purely conditional liability, which may or may not eventuate, is not a thing which affects a company 's capital position, any more than a conditional receipt can affect its capital position.
A receipt which may or may not be received, according as some event does or does not happen, is not a thing with which you can earn profits.
It is the possibility of earning profits on your real capital that these capital provisions are concerned with.
Therefore, in my opinion, even if one could spell such a hypothetical and conditional contract out of these words, the result would not give rise to an accruing liability within the meaning of the section.
" This decision was taken in appeal to the House of Lords and was affirmed.
Vide Inland Revenue Commissioners vs Northern Aluminium Co. Ltd. (1).
This decision establishes that a conditional liability under a concluded contract it is on that footing that the second point arose for decision was not an accruing liability for the purposes of the Excess Profits Tax Act, as the same had no effect on the actual capital position of the company, and the fact that it was allowed for purposes of income tax did not affect the position under the Excess Profits Tax Act.
The learned Solicitor General sought to distinguish this decision on the ground that it did not relate to an insurance business, whereas it was contended that Sun Insurance Office vs Clark (2 ) directly dealt with the question now under consideration whether reserves for unexpired risks in pending policies were liabilities which could be deducted.
We do not see how it makes any difference in the construction of r. 2 of Sch.
II to the Act that the liability sought to be deducted arises under an insurance policy and not under some other contract.
(1) (2) ; ; , 1019 We are of opinion that the principles laid down in Northern Aluminium Co., Ltd. vs Inland Revenue Commissioners (1) and Inland Revenue Commissioners vs Northern Aluminium Co., Ltd. (2 ) are applicable to the decision of the present case, and that a contingent liability in respect of unexpired risk is not an "accruing liability" within r. 2 of Sch.
II to the Act.
The decision appealed from is correct, and this appeal must accordingly be dismissed with costs.
Appeal dismissed.
| The Collector validated certain transfers on the applications of appellants U/5.
6 of the M. P. Abolition Act 1950 but a revision was taken by the Commissioner section 50 of the M. P. Land Revenue Code 1959 (for short, the Code) against the order Or the Collector.
The appellants ' contention before the Commissioner that he had no jurisdiction or power to revise the order of the Collector was rejected.
The Board of Revenue in the revision and the High Court in a writ petition filed by the appellants confirmed the view of the Commissioner.
Hence this appeal.
The appellants contended (i) that the order of the Collector was not revisable under the Code because the Abolition Act was a Code or a law complete in itself and conferred no powers of revision or appeal outside the Abolition Act and therefore the Commissioner had no jurisdiction to entertain suo moto revision; (ii) that since there was a right of appeal under sec.
84 of the Abolition Act, no revisional power could be exercised either by Commissioner or by the Board of Revenue under the Code; and (iii) that even assuming that the Abolition Act and the Code were statutes in pari materia, they possess two clear cut and separate powers, that is to say, no suo moto revision could lie to the Revenue Officers unless a revision or appeal was Sled before the Commissioner by the party.
Dismissing the appeal, to this Court ^ HELD: (1) A perusal of the schemes of the Abolition Act and the Code clearly indicates that the two Acts were in pari materia and the revenue officers were exercising powers under both the Acts cognately.
There was no clearcut distinction between a Revenue Officer acting under the Abolition Act and acting under the Code.
This being the position, it is manifest that the revisional powers could be exercised by the Revenue Officers under section 50 of the Code and even under the Abolition Act as well.
[802D E] 801 (2) Under the provisions of, the Abolition Act as also the Code, both the Commissioner and the Board were appellate as also revisional authorities.
Thus, when two powers were conferred on the said officers in a sort of a combined capacity, it cannot be said that merely because the formality of filing a regular appeal before the Commissioner or the Board was not adopted, a suo moto revision would not lie [802H; 813A B] In the instant case, both the Commissioner and the Board of Revenue had appellate as also revisional powers Both these powers being conferred on the same authority, the difference between the exercise of a revision or appeal was a mere idle formality and was of no consequence [803C D]
|
Appeal No. 463/76.
(Appeal by Special Leave from the Judgment and Order dated 11/12 11 1975 of the Gujarat High Court in L.P.A. No. 113/74).
D.V. Patel, P.H. Parekh and Miss Manju Jetley for the Appellants.
M.C. Bhandare, S.P. Nayar and M.N. Shroff, for the, State of Gujarat.
R. K, Garg and S.C. Agarwala, for Respondents Nos.
5 6 and 8 11.
M.N. Shroff, for the State of Maharashtra.
The Judgment of the Court was delivered by KRISHNA IYER, J.
This is a typical 'service ' appeal, by special leave, which prompts the topical question: Is lit Wiser national policy to process disputes regarding seniori ty, promotion, termination and allied matters affecting the public services, through the docket bound, formalised, methodology of the judicature adopting its traditional, time consuming, tier upon tier system and handicapped by absence of administrative expertise, accessibility to criti cal information and other limitations on the mode and extent of relief, or, alternatively, through built in, high pow ered, but credibility wise less commanding, agencies of composite skills and processes and flexible remedial juris dictions ? 'Justice and Reform ' is a recurrent interroga tion.
Our civil services, if only the static and stratified system were transformed and the men properly oriented and activated, may well prove equal to the dynamic challenges of our times but for the pathetic phenomenon of numbers of officials being locked in long forensic battles.
This litigative pathology of the members of the public services deplorably diverts the undivided energies, sensitive under standing and people based disposition demanded of them for the fulfilment of the Nation 's Tryst with Destiny through implementation of massive 1040 and multiform developmental plans.
Hopefully, constructive thinking on impregnable, competent and quick acting (but not derobed or devalued) intra structures and procedures for improving and accelerating the system of justice to the public services is currently under way.
Now to the merits.
The briefs are big and the arguments long, but the factual matrix and the legal conflicts lend themselves to be condensed without detriment.
The competi tion between two categories of members borne on the cadre of Deputy Collectors of the State of Gujarat viz., direct recruits and in service promotees, on the issue of seniority inter se, with its futuristic career overtones, is the crunch question in this civil appeal.
The grey area of 'service jurisprudence ' covered before us encompasses sever al decisions and if 'by good disputing shall the law be well known ', there has been so much disputation of learned length at the bar that the legal points should have been more pellucid than the precedents read and re read made us feel. 'The aid of the purifying ordeal of skilled argument ' when too lapidary and finical reaches a point of no return, despite Megarry J to the contrary in Cordell vs Second Clanfield Properties Lid. (1).
Seven Deputy Collectors, arriving by direct recruitment in, and after 1963, claim to be ahead, in the gradation list, of their more numerous counterparts former mamlatdars, whose promotional incarnation as Deputy Collectors, dates back to the years 1960 63.
The title of these younger incum bents to be eider in the Civil List is primarily founded on a basic Resolution of Government of July 30, 1959 regulating recruitment to the Deputy Collectors ' cadre by the 'then Bombay State adopting a quota basis.
The Gujarat State, carved out of Bombay and formed on May 1, 1960, continued the system; and so, simplistically presented, the fate of the 'seniority ' struggle critically turns on the construc tion the Bombay Resolution of 1959 bears, the rival versions having been alternately frowned upon or favoured at the original and appellate docks of the High Court.
There are other matters of moment debated at the bar and we will pass on some of them at later stages.
In administrative and legal terms, this case is the projection of the common rivalry for promotional positions between fresh, young recruits and old, seasoned promotees, between alleged excel lence of talented youth and tasted experience of mellowed age.
Sympathies may sway either way and reasons often spring from sympathies.
To be captiously wise in retrospect may itself border on vice.
Even so, we are constrained to observe that when government orders, as here, have the flavour of law and impact upon the fundamental rights and equal opportunities of citizens, they have to be drafted with the case that legal orders deserves lest avoidable litigation should thrive for no better reason than that administrative orders or subsidiary legislation have been drawn up with a casual ness that betrays the skills of insoucience.
Law must be precise, simple, clear, comprehensive and (1) [1968] 3 All E.R. Ch.
1041 there is a duty on the law maker at every level not to injure the community by tengled webs of rules, orders and notifications whose meaning is revealed only through tran scendental meditation or constant litigation.
in a social istic pattern of society there is hardly any part of nation al life or personal life which is not affected by some legal rule or other.
When men have to look to the law from the cradle to the grave, making of even subsidiary laws demands greatest attention.
To begin with the legal beginning is best done with the Bombay Government Resolution of 1959 after giving a thumb nail sketch of the relevant service structure and other minimal particulars.
The composite Bombay State, for purposes of Revenue Administration, had been divided into Divisions which were separate units for promotional prospects, liability to transfer etc., of deputy collectors.
The routine source of recruitment to these posts used to be mamlatdars who were transferred as deputy collectors by promotion.
As early as 1939, a different recruitment policy had been evolved for picking suitable hands from the open market by direct nomi nation.
The inevitable concomitant of a plurality of recruitment categories is the evolution of a workable rule of inter se seniority.
So, by an order of 1941, the mode of determining seniority between 'nominees ' and 'promotees ' was settled.
Service, for seniority purposes, so far as direct recruits were concerned, was to run from the date of their appointment on probation and, in the case of promotee offi cers, such service was to begin with promotion in substan tive vacancies, if continued without break.
For reasons obscure, the direct recruitment scheme of infusion of fresh blood to use the usual validating vascular metaphor to invigorate the Administration, hibernated from 1950 until 1959.
However, the crucial government decision of July 30, 1959 not merely re activated the mode of direct recruitment but fixed the promotion in which recruitment from the two sources was to be made, referred to conveniently as the quota system.
The heart of the debate before us is whether a quota prescription, willy nilly, does postulate ex necessitate a rota process in practice.
We may here read the resolution itself: Deputy Collector: Recruitment of probationers GOVERNMENT OF BOMBAY REVENUE DEPARTMENT Resolution No. RTC.
1157/99153 D Sachivalaya, Bombay, 30th July 1959 Read Government Resolution No. 9313/45, dated the 6th Febru ary 1950.
Government Resolution No. 9313/45, dated the 24th July 1951.
1042 RESOLUTION: Government had for sometime under consideration the question of reviving the system of direct recruitment to the cadre of Deputy Collectors.
It has now been decided that in the interest of administration, the revival of .that system is quite necessary.
Government is accordingly pleased to cancel the orders contained in Government Resolution No. 9313/45, dated 6th February 1950 and those in Government Resolution No. 9313/45, dated the 24th July 1951, in so far as they relate to the recruitment of Bombay Civil Service Executive Branch Deputy Collectors (Upper Division) and to direct that, as far as practicable, 50 per cent of the substantive vacancies occurring in the cadre with effect from 1st January 1959 should be filled in by nomination of candidates to be selected in accordance with the Rules appended herewith.
x x x x x By order and in the name of the Governor of Bombay, G.L. Sheth Secretary to Government" We may also extract the portion from the ' annexed rules of recruitment pertinent to our purpose: "Appointment to the posts of Deputy Collector shall be made either by nomination or by promotion of suitable Mamlatdars: Provided that the ratio of appointment by nomination and by promotion shall, as far as practicable, be 50: 50." The raw materials government proceedings needed for our discussion will be complete if the 1941 Resolution also were read at this stage: "GOVERNMENT OF BOMBAY Political & Services Department Resolution No. 3283/34 Bombay Castle, 21st November, 1941.
x x x RESOLUTION: Government is pleased to direct that the following principles should be observed in determining the seniority of direct recruits and promoted Officers in the provincial services (except the Bombay services of Engineers, Class I) (i) In the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of their appointment on probation.
(ii) In the case of officers promoted to substantive vacancies, the seniority should be determined with reference to the (1 ) Date of their promotion to the (2) substantive vacan cies (3) provided there has 1043 been no break in service prior to their con firmation in those vacancies.
By order and in the name of the Governor of Bombay G.F.S. Collins Chief Secretary to the Govt.
of Bombay Political and Services Department" Flowing out of the fixation of the ratio between the two species of recruits and having a bearing on the issue of seniority is another Resolution of the Bombay Government (continued during the relevant period in Gujarat also by virtue of an omnibus circular of May 1, 1960) of February 3, 1960.
This step became primarily necessary on account of the Reorganisation of States and the abolition of Divisions.
The legal fiction of 'deemed dates of commencement of serv ice ' for the purpose of inter se seniority of personnel drawn from different pre Reorganisation States and from the Divisions within the State on conversion of the deputy collectors ' cadre into a State wide one has been crystal lised in this rule of February 1960.
One more clarificatory proceeding of Government, dated May 27, 1960 has loomed large in Shri Patel 's submissions, especially the Explanation portion thereof and, in a sense, it lends some push to the problematic conclusion.
We there fore read the relevant Government Circular right here: No. GSF 1060 F Government of Gujarat General Administration Department Sachivalaya, Ahmedabad, 27th May 1960 CIRCULAR Read: Government Circular No. GSF 1060, dated the 1st May 1960.
Doubts have arisen as respects the directions given under Government Circular No. GSF 1060 dated the 1st May, 1960 .
To remove any doubt in that behalf, therefore, Government is pleased to direct that the following Explanation shall be and shah be deemed always to have been added to the said circular, namely Explanation : Nothing herein shall apply to appointments of officers, authorities or persons or to the constitution of tribunals or other bodies which may be made by Government on or after the 1st May, 1960 and the condi tions of service of the officers, authorities or persons appointed or the members of the Tribunals or bodies so constituted.
By order and in the name of the Governor of Gujarat.
Sd/ V. Isvaran Chief Secretary to the Government.
" Reliance has been placed on the Explanation quoted above to emancipate Government from compliance with the Bombay rules 1044 regarding appointments of officers or their conditions of service, an aspect we will expand, if needed.
Prima facie, while we agree that the new State is not bound by adminis trative directions of the parent State and may free itself from it by appropriate steps, an unguided power is suspect and a carte blanche in doing what Government fancies with any of its servants is subversive of ordered societies.
We have no further probe to make into this Resolution in the present case and leave it at that.
The fact of the matter is that during 1959 62, no direct recruitments were made but many promotions were effected.
Afterwards, i.e., in 1963 and later, direct recruits were appointed who, contrary to their legal aspira tion, were not assigned seniority over earlier promotees of 1960 63 vintage, having regard to the factual position.
The further hope that for post 1963 recruits, dates of appoint ment, and running of service with effect therefrom, on the basis of a quota allocation and rota system telescoped into it, proved a plain dupe in the seniority list prepared by government.
The doubly chagrined direct recruits moved the High Court for relief, as stated earlier.
The anatomy, in outline, of the deputy collector 's cadre in the Gujarat Government and the grievances of the writ petitioners (respondents before us) thus emerge.
On a 50:50 basis the vacancies in the cadre are filled from two sources viz., direct recruitment and promotion from among mamlat dars.
Once appointed, their seniority gains saliency and turns on length of service, and though no specific provision to count commencement of service is made in the 1959 Resolu tion, it has been understood as set out in the 1941 Resolu tion earlier mentioned.
The contesting respondents plead for pushing down promotees, based on the strict roster system of 1: 1 going by each vacancy and demur to taking the year as a unit for adjustment of ratio.
Which view should prevail? Force, there may be, in the rival versions, indi vidual injustice there can be whichever view were accepted and precedential pushes and pressures may also be brought into play by either side if we surrender to scriptural literality of decisions of this Court and miss the thrust of the ratio therein.
In a liner sense, and within the frame of reference of leading precedents, each case has an individu ality and is a law unto itself.
Strictly speaking, the primary problem is one of fair interpretation of the basic government Resolution of 1959, illumined by the purposes and motivations of good government and unravelling the implications embedded therein, against the background of the administrative structure, service pattern and seniority principles, prevalent contemporane ously, as gleaned from the records of the case.
The milieu aids the meaning although lawyer 's law leans heavily, even lop sidedly, on judicialized lexicography.
Counsel natural ly took us through rulings bearing on the meanings of words and canons of construction which merely re stated time honoured principles and dictionary culls and did not make us any the wiser in coming nearer to a resolution of the conflict here.
Likewise, arguments galore on the connota tion of the quota system of recruitment, with abstractions, propositions and illustrations based on decided cases, were addressed to us, although we 'came out by the same door as in we went ' Common 1045 sense is the first aid in the art of interpretation.
The only sure approach that judges make when confronted by complexity in construction and necessity for rationalisation is on the lines justice Cardozo frankly stated :(1) "We may figure the task of the judge, if we please, as the task of a translator, the reading of signs and symbols given from without.
None the less, we will not set man to such a task, unless they have absorbed the spirit, and have filled themselves with a love, of the language they must read." Two groups, the promotees who came from the lesser stations of life and the direct recruits who have had better advan tages of higher education, fight for berths in the musical chair.
In such situations, while construing rules, sub conscious forces have to be excluded and objectification must be attempted.
Even so, the beautiful candour of Benjamin Cardozo whispers to us that we judges "are . ever and always listening to the still small voice of the herd, and are ever ready to defend and justify its instructions and warnings, and accept them as the nature results of our own reasoning.
This was written, not of judges specially, but of men and women of all classes.
The training of the judge, if coupled with what is styled the judicial temperament, will help in some degree to emancipate him from the suggestive power of individual dislikes and prepossessions .
" ( 2 ) Our effort in unlocking the meaning of the controversial Government Resolution of July 1959 and of other official notifications may inarticulately, minimally and unwittingly, be moulded by these broad under currents.
Other facts relevant for discussion of specific points urged and other legal issues germane to the grounds of attack and defense formulated by counsel may be filled in as and when those points are taken up by us, instead of inartistically clut tering up or en massee lugging together many government proceedings, sequences of events and clarification of difficulties following on the division of Bombay into Gujarat and Maharashtra, even at this preliminary stage.
The pivotal questions one an interpretative exercise and the other a facet of the fundamental right of equal opportunity around which revolve the other arguments may first be set out: (1) If the Gujarat Government has, by an administrative guideline or statutory rule directed that open market recruits and in service promotees will be ap pointed on a 50: 50 basis with the qualification that this principle shall be adhered to, as far as practicable, is Government free to ignore such a rule of conduct as if it were no inflexible directive, violation of which spells illegality on the appointments made, or does this clause obligate the State flatly to try and comply, but if surprise circumstances or insurmountable exigencies arise which make recourse to the rule impracticable, deviate from it without the risk of court branding such deviant appointments void? In short, how far can (1) Benjamin N. Cardozo: The Nature of the Judicial Proc ess: Yale University Press, P. 174.
(2) Cardozo (supra) pP. 175 176.
1046 administrative pragmatics influence, without invalidation, the recruitment mechanics where a narrow rider providing for imponderable exigencies written into the rule, provides for departure ? (2) Assuming there has to be a proportion of 50 50 as above indicated, how is it to be worked out ? On a rotational basis of the direct recruits inexorably getting the first, the third, the fifth and such like vacancies or as an entitlement to half the total number of vacancies arising in the cadre in a particular year or other conven tional period ? Again, does it further imply an imperative obligation on the part of Government to keep untilled all vacancies allocable to direct recruits so that they may be available to be filled up in later years with retroactive repercussions and, if such ear marked posts are, for admin istrative exigencies, filled regularly, not ad hoc, in sub stantive vacancies, not ex cadre posts by selection and promotion, they must be treated as provisional nationally filled by direct recruits who may arrive long later? And consequentially, in counting seniority, reckon their (i.e., direct recruits) deemed dates of entry as prior to those actually officiating promotee deputy collectors by importing a sort of legal fiction that the direct recruits must be allowed to count service from the date when the entitled vacancy for direct recruits arose? May be a diffusive, digressive discussion can be obviated and the focus turned on specific issues if we start with a formulation of the major points urged by Sri D. V. Patel, counsel for the appellant, hotly controverted, of course, by shri R.K. Garg for the contesting respondents.
Elimination of the minor clears the ring for the major bouts.
The appellants represent the group of promotee deputy collectors and the contestants are deputy collectors di rectly recruited.
The Gujarat State lines up with the former, more or less.
We now set out sequentially the six point propositional formulation made by Shri Patel, for the appellants, although salience suggests the third item as first and, if .we anticipate our conclusion, the last in importance.
The cornerstone of the case, as noted earlier, is the Bombay Government 's Resolution of 1959 fixing the proportion between direct recruits and promoted candidates, with an emergency escape route to jump out of the fixed ratio.
Shri Patel 's first point is that once the new State of Gujarat was formed, mere administration proceedings of he former government of Bombay State ceased to be in force proprio vigore unless Gujarat adopted or continued or otherwise modified them.
subject to statutory regulations and consti tutional limitations.
The State of Gujarat had plenary executive power, granted by the Constitution, to fill up administrative posts in any manner it chose.
The clarifi catory government Resolution of May 27, 1960 issued by the Gujarat Government becomes significant in this context as it contains in explanation which specifically provides that the adoption of the Bombay Government Resolution of 1959 does not, in any way, fetter the Gujarat Government in making appointments of officers on or after May 1, 1960 nor does the said 1959 Resolution in any manner restrict the condi tions of service of such officers.
Therefore, it is per fectly oven to the Gujarat Government to make fresh appoint ments to the posts of Deputy Collectors untremmelled by the ratio or other 1047 restrictive conditions which may be read into the Bombay Government Resolution of 1959.
In this view his clients cannot suffer even if the Bombay Resolution has been breached.
(2) Assuming that point No. 1 has no force, Shri Patel submits that the various government Resolutions of the Bombay and Gujarat Governments referred to by the parties are purely administrative directions and cannot have the binding status of statutory rules.
Therefore, no rights can be derived therefrom by the direct recruits or potential direct appointees and breach of such directives or rules cannot invalidate appointments made.
(3) On the further assumption that point No. (2) above is bereft of substance and the Government Resolutions referred to have statutory character, the very terms of the 1959 Government Resolution provide a sensible safely value, wisely anticipatory when we remember the pragmatic considerations and administrative exigencies that the slow moving apparatus of the Government of a newly formed State has to face or be puzzled with.
The 1959 Resolution which is the 'rounding document ' of the rights of the direct recruits itself states that the propor tion between the two categories is to be applied 'as far as practicable '.
Therefore, the rule is neither exception proof nor abstractly absolute but realistic and flexible true to life.
Rigidly to read the rule is surely to misread it.
Since it contemplates special situations of impracticability it is but right for the Court so to construe the Resolution, in the light of the explanation offered by the State for non recruitment directly until 1963, as to make it adminis tratively viable and reasonably workable If such an imagina tive and informed judicial insight plays upon the rule, the difficulties in making immediate recruitments from the open market by the Public Service Commission may sufficiently absolve the State from the supposed violation of Government Resolution of 1959 So viewed, the orders of promotion of the appellants are in order and unassailable.
(4) & (5) The mandate of equality ensconced in Arts 14 and 16 cannot handcuff justice by pushing down the promotees if the Sen iority List in the face of their actual service and legal appointment.
The attack based on article 16 that the roster method of filling up posts is integral to the quota system is baseless.
Quota without rotate is also reasonable and constitutional as much as quota plus rota.
The choice, both being permissible and fair, is left to the Administration, the Court not ferretting or dissecting to detect deadly traces of discrimination or unreasonableness.
(6) The assignment of "deemed dates ' of commencement of service is not unreasonable but is often adopted by Governments when integrating into a common cadre officers drawn from differ ent States or Departments or divisions.
Novel compulsions demand novel solutions and law accepts life 's expediency save where the public Vower has been obliquely exercised or unreasonableness is writ large on the face of the process.
Such a stigma being absent, the promotees cannot be dis lodged from their notches in the ladder.
We are mercifully absolved from making the discussional journey over a long mileage covering the poly pointed formu lation since two essential issues may virtually be decisive of the case.
Both sides have agreed to this abbreviation and the other grounds have dropped out of effective contest in the long course of arguments.
Enough upto the day! 1048 It is fair to state even at this stage that be the Bombay G.O. of 1959 merely administrative or really statuto ry, both the learned Single Judge and the Division Bench have head the Gujarat State bound by it.
The rule of law is tile enemy of arbitrary absolutism and the discretion to disobey is a doctrine of despotism and cannot be subscribed to by a Court merely because the state chooses to label a rule or conduct anecting the rights of others an administra tive regulation.
In a constitutional order governed by the rule of law, whim or humour, even if benignly motivated, masquerading as executive discretion is anathema to law.
When power is vested under the Constitution or other statute in the State to promulgate rules of conduct attracting oth ers, such rules must ordinarily govern the State and subject alike.
When there are service rules affecting the public services, they may either be in exercise of the executive power of the State under article 162 or rules with legislative colour framed under the proviso to article 309 of the Constitu tion.
It is fair for the Administration in a democratic system employing expanding armies of government servants, whose lot in life and career prospects will be governed by recruitment, conduct and disciplinary rules, to respect, beyond suspicion, the rule of law by exercising statutory power as distinguished from executive power, even where it has an option.
Of course, in exceptional situations, or sudden exigencies and for new experiments to be tried, the framing of statutory rules under article 309, proviso, may be postponed and executive orders immediately promulgated.
The best judge is the State Government exercising its power justly and efficiently.
For the art of government is beset with the perils of a journey through life 's jungle and textbook prescriptions can prove ruinous.
We may point to another problem.
It has often been difficult to discover whether a particular set of rules is framed under the provi so to article 309 or, in mere exercise of article 162, although it is desirable that the State makes it explicit.
We are, however, not called upon to investigate this perplexing aspect because, as stated earlier, the High Court has held that the State is bound by the Bombay G.O. of 1959.
Counsel for the appellants, Shri Patel, and counsel for the State, Shri Bhandare, have rightly acquiesed in that posi tion and proceeded with their arguments on that footing.
This point (which is the first) therefore, does not need our pronouncement.
The other points, pedentically capable of being sepa rately dealt with, highlight what we have earlier indicated as the two telling questions of law that settle the outcome of the appeal.
We will seek the tight of common sense to solve them and later test the conclusions with reference to binding rulings of this Court.
The first question that falls for considerations, there fore, is as to whether the 50:50 ratio 'as between direct recruits and promoted hands is subject to the saving clause 'as far as practicable '.
Can Government vary the ratio ? Ordinarily No. Is it permissible at all ? Probably, yes, given proof of the government 's case that it was not practicable for the State to recruit from the open market qualified persons through the specialised agency of the Public Service Commission.
The factual basis for this plea of extenuation will be examined presently but, according to Shri R.K. Garg, appearing for the contestants, 1049 even if the alibi of the State were true, it furnished no legal justification for deviation from the application of the rule.
He interpreted, 'as far as practicable ' occurring in the Government Resolution, in a very different way and submitted that to adopt the appellant 's view on this aspect was to subvert the substance and nullify the conscience of the binding Bombay Resolution of 1959.
Shri Garg argued that the language of the critical G.O. was peremptory, that for the high purpose of improving administrative efficiency a balanced mix of old experience (gained by long service) and young abilities (proved by competitive selection) was hit upon as half and half from each category and the Court could not fall for any construc tion of the words 'as far as practicable ' which would frus trate this goal of overall efficiency unless the semantic search left no other option.
Far from there being no alternative interpretation, the benignant purpose of the Resolution pressed forward to a reasonable meaning that 'as far as practicable ' related not to the tampering with the proportion of the mix but in permitting provisional varia tions or ad hoc solutions or emergency arrangements to meet a difficulty of the Administration without making formal or regular 'appointments ' to the posts meddling irrevocably with the proportion in the prescription.
Later, when direct recruits were secured, they would be entitled to their quota vacancies and commencement of seniority from the date of their appointment.
Logomachic exercises are the favourite of the forensic system but too barren to fascinate the Court and too luxuri ous, in our penury of time to indulge.
Should we chase decisions and dictionaries and finer verbal nuances with explorative industry ? The sense of the setting, the 'why ' the author whispers through his words and the warning 'not this.
not this ' that the objective understanding of the totality of the socially relevant scheme instils these light up the interpretative track alone the criss cross woods of case law and lexicons.
Led by that lodestar, we will eye the situation afresh.
In doing so, we must first set down the meaning Shri Patel suggests, and Shri Bhandare supports, and the manner in which these appellants claim that their appointments and seniority are sequestered by the saving words 'as far as practicable '.
What does 'as far as practicable ' or like expression mean, in simple anglo saxon ? Practicable, feasible, possi ble, performable, are more or less interchangeable.
A skiagraph of the 1959 Resolution reveals that the revival of the direct recruitment, method was motivated by 'the inter est of administration ' an overriding object which must cast the benefit of doubt if two meanings with equal persuasive ness contend.
Secondly, going by the text, 50% of the substantive vacancies occurring in the cadre should be filled in by selection in accordance With appended Rules. 'As far as practicable ' finds a place in the Resolution and the Rule.
In the context what does it qualify ? As far as possible 50% ? That is to say, if 50% is not readily forth coming, then less ? Within what period should be imprac ticabilitv to felt ? What is the content of impracticabi litv ' in the given administrative 'setting ? Contrariwise, can you not contend that impracticability is 1050 not a license to deviate, a discretion to disobey or a liberty with the ratio ? Administrative tone is too impor tant to be neglected but if sufficient numbers to fill the direct recruits ' quota are not readily available, substan tive vacancies may be left intact to be filled up when direct recruits are available.
Since the exigencies of administration cannot wait, expediency has a limited role through the use of the words 'as far as practicable '.
Thereby Government is authorised to make ad hoc appointments by promotion or by creation of ex cadre posts to be filled up by promotees, to be absorbed in the 50% portion falling to the promotional category in later years.
In short 'as far as practicable means, not interfering with the ratio which fulfils the interest of administration, but flexible provision clothing government with powers to meet special situations where the normal process of the government Reso lution cannot flow smooth.
It is a matter of accent and import which affords the final test in the choice between the two parallel interpretations.
We have given close thought to the competing contentions and are inclined to the view that the former is the better.
Certainly, Shri Garg is right that the primary purpose of the quota system is to improve administrative efficiency.
After all, the Indian administration is run for the service of the people and not for opportunities for promotion to a few persons.
But theories of public administration and experiments in achieving efficiency are matters of govern mental policy and business management.
Apparently, the State, having given due consideration to these factors, thought that a blended brew would serve best.
Even so, it could not 'have been the intention of government to create artificial situations, import legal fictions and complicate the composition of the cadre by deviating from the natural course.
The State probably intended to bring in fresh talent to the extent reasonably available but not at the sacrifice of sufficiency of hands at a given time nor at the cost of creating a vacuum by keeping substantive vacancies unfilled for long.
The straight forward answer seems to us to be that the State, in tune with the mandate of the rule, must make serious effort to secure hands to fill half the number of vacancies from the open market.
If it does not succeed, despite honest and serious effort, it qualifies for depar ture from the rule.
If it has become non feasible, imprac ticable and procrastinatory to get the requisite quota of direct recruits, having done all that if could, it was free to fill the posts by promotion of suitable hands if the filling up of the vacancies was administratively necessary and could not wait.
Impracticable cannot be equated with 'impossible ' nor with unplatable and we cannot agree with the learned judges of the High Court in construing it as colossally incapable of compliance.
The short test,there fore, is to find out whether the government, in the present case, has made effective efforts, doing all that it reasona bly can, to recruit from the open market necessary numbers of qualified hands.
We do not agree that the compulsion of the rule goes to the extreme extent of making government keep the vacancies in the quota of the direct recruits open and to meet the urgent needs of administration by creating ex cadre posts or making ad hoc appointments or resorting to other out of the way expedients.
The sense of the rule is that as far as possible the quota system must be kept up and, if not prac 1051 ticable, promotees in the place of direct recruits or direct recruits in the place of promotees may be inducted applying the regular procedures, without suffering the seats to lie indefinitely vacant.
The next question then is as to whether government has satisfied the Court that efforts had been made to secure direct recruits and failure to secure such hands is the explanation for resort to.
promotions of mamlatdars.
The reason for delay in making appointments of direct recruits during the year 1960, 1961 and 1962 has been set out by the State before us.
It appears that a requisition for 12 posts of deputy collectors was sent to the Gujarat Public Service Commission on October 31, 1960 but the Commission raised some linguistic queries 'regarding the requirement of ade quate knowledge of Marathi and Gujarati by the candidates.
Anyway, various points were raised from time to time in the correspondence between the Commission and Government and, eventually, the 'former held a competitive examination for the posts of deputy collectors in July 1962, declared the results in January 1963 and sent up ,its recommendations in the following February.
Government issued orders for ap pointment of the candidates so selected by the Public Serv ice Commission in May 1963.
This is a working explanation, prima facie good and not rebutted as got up.
If it is not necessary for the State Government to have recourse to recondite processes of ad hoc appointments and creation of ex cadre posts and if government has taken active steps in the direction of direct recruitment, the exception to the Government Resolution comes into operation.
Direct recruit ment ordinarily involves processing by the Public Service Commission, an independent body which functions at its own pace.
If Government had excluded the posts of Deputy Col lectors from the purview of the Public Service Commission with a view to achieve expeditious recruitment, it might have been exposed to the criticism that the normal method was being by passed with oblique motives.
Having looked at the matter from a pragmatic angle, we are ,convinced that the government did what it could and need not have done what it ordinarily should not have done.
Therefore the con clusion is inevitable although Shri Garg 's argument to the contrary is ingenious that the State had tried, as far as practicable, to fill 50% of the substantive vacancies from the open market, but failed during the years 1960 62 and that therefore it was within its powers under the relevant rule to promote mamlatdars who, otherwise, complied with the requirements of efficiency.
Now we move on to the more thorny question of quota and rota.
Shri Garg urges that the rotational mechanics is implicit in the quota system and the two cannot be delinked.
To shore up this submission he relies on what he propounds as the correct command of the rule of 'quota '.
In his view, 1: 1 simply means one direct recruit or promotee followed, vacancy by vacancy, by the other.
To maintain 'the propor tion in compliance with the quota fixture, Government must go by each post as it falls vacant and cannot circumvient this necessity by year war reckoning of vacancies and keep ing up the ratio.
The counter view put forward by Shri Parekh, for the appellant, is that 338SC1/76 1052 quota and rota are not indissolubly wedded and are separate and separable.
In the present case, according to him it is an error to import 'rota ' where the rule has spelt out only 'quota ' as a governing principle.
The Usual practice, sanctioned by rulings of this Court,is to go by the year as a unit for working out the quota.
Here a again we are not disposed to hold, having special regard to the recent decisions of this Court cited before us that 'quota ' is so the recent decisions of this where the former is expressly prescribed, interlocked with 'rota, that where the former is expressly prescribed, the latter is impliedly inscribed.
Let us logicise a little.
A quota necessarily postulates more than one source of recruitment.
But does it demand the manner in which each source is to be provided for after recruitment, especially in the matter of seniority ? Cannot quota stand independent of rota ? You may fix a quota for leach category but that fixes the entry.
The quota methodology may itself take many forms vacancy wise ratio, cadre composition wise pro portion period wise or numberwise regulation.
Myriad ways can be conceived of Rotational or roster system is a com monly adopted and easily understood method of figuring out the placement of officers on entry.
It is not the only mode in the code and cannot be read as an inevitable consequence.
If that much is logical, then what has been done here is legal.
Of course, Shri Garg 's criticism iS that mere 'qu ota ' is not viable without provision for seniority and, if nothing more is found in the rule, the quota itself must be understood to apply to each post as and when it falls to be filled.
If exigencies of administration demand quick post ing in the vacancy and one source (here, direct recruit ment) has gone dry for a while, then the proper course is to wait for a direct recruit and give him notional date of entry as of the quota vacancy and manage to keep the wheels of government moving through improvised promotions, express ly stripping such ad hocist of rights flowing from temporary occupancy.
We have earlier dealt with the same submission in a slightly different form and rejected it.
Nothing more remains to be said about it.
What follows and matters on entry into service is seniori ty which often settles the promotional destiny of the var ious brands of incumbents.
Naturally, the inter se struggle turns how best to bend the rules to one 's good account.
Shri Garg criticised the thoughtways apparent in the argu ment, backed by some rulings, that, quota being delinked from rota, annual intake is the unit for adjusting the seniority among candidates from the two sources.
This is an innovation dehors the rule, he says.
We do not think so.
The question is not whether the year being taken as the unit is the only course but whether there is anything in the rule prescribing Government taking it as the unit or prescribing some other specific unit.
It is obvious that the Resolution of 1959 is silent on how to allocate or reckon the quota as also on how to compute 'seniority and Government has a good alibi for taking the year as the unit and length of continu ous service as determining seniority.
The first is evident from the .reading of the 1959 Resolution in the light of some ruling of this Court and the second from the 1941 Resolution.
Moreover, there is nothing in the Resolution of 1959 preventing Government from treating a year as the unit.
1053 We therefore reach the following conclusions: 1.
The promotions of mamlatdars made by Government between 1960 and 1962 are saved by the 'as far as practicable ' proviso and therefore valid, Here it falls to be noticed that in 1966 regular rules have been flamed for promotees and direct recruits flowing into the pool of Deputy Collectors on the same quota basis but with a basic difference.
The saving provision 'as far as practicable ' has been deleted in the 1966 rules.
The conse quence bears upon seniority even if the year is treated as the unit for quota adjustment.
If any promotions have been made in excess of the quota set apart for the mamlatdars after rules in 1966 were made, the direct recruits have a legitimate right to claim that the appointees in excess of the allocable ratio from among mamlatdars will have to be pushed down to later years when their promo tions can be regularised by being absorbed in their lawful quota for those years.
To sim plify, by illustration, if 10 deputy collec tors ' substantive vacancies exist in 1967 but 8 promotees were appointed and two direct recruits alone were secured, there is a clear transgression of the 50: 50 rule.
The redun dancy of 3 hands from among promotees cannot claim to be regularly appointed on a permanent basis.
For the time being they occupy the posts and the only official grade that can be extended to them is to absorb them in the subsequent vacancies allocable to promotees.
This will have to be worked out down the line wherever there has been excessive representa tion of promotees in the annual intake.
Shri Parekh, Counsel for the appellants has fairly conceded this position.
The quota rule does not, inevitably, invoke the application of the rota rule.
The impact of this position is that if sufficient number of direct recruits have not been forthcoming in the years since 1960 to fill in the ratio due to them and those deficient vacancies have. been filled up by promotees, later direct recruits cannot claim 'deemed ' dates of appointment for seniority in service with effect from the time, according to the rota or 'turn, the direct recruits ' vacancy arose.
Seniority will depend on the length of contin uous officiating service and cannot be upset by later arrivals from the open market save to the extent to which any excess promotees may have to be pushed down as indicated earlier.
These formulations based on the commonsense understand ing of the Resolution of 1959 have to be tested in the light of decided cases.
After all, we live in a judicial system where earlier curial wisdom, unless competently over ruled, binds the Court.
The decisions cited 1054 before us start with the leading case in Mervyn Coutindo & Ors.
vs Collector of Customs, Bombay(1) and closes with the last pronouncement in Badami vs State of Mysore & Ors.
This time span has seen dicta go zigzag but we see no diffi culty in tracing a common thread of reasoning.
However, there are divergencies in the ratiocination between Mervyn Coutindo (Supra) and Govind Dattaray Kelkar & Ors.
vs Chief Controller of Imports and Exports & Ors.(3) on the one hand and S.G. Jaisinghani vs Union of India(4) .Bishan
Sarup Gupta vs Union of India,(5) Union of India & Ors.
vs Bishan Sarup Gupta(6) and A.K. Subbraman & Ors.
vs 'Union of India(7) on the other, especially on the rota system and the year being regarded as a unit, that this Court may one day have to harmonize the discordance unless Government wakes up to the need for properly drafting its service rules so as to eliminate litigative waste of its servants ' energies.
In Mervyn Coutindo the validity of the rotational system as applied in fixing the seniority inter se between promo tees and direct recruits fell for decision in the context of the specific rule applicable to Customs ' appraisers.
One of the principles in the circular which contained the rules related to the comparative seniority of the two categories. 'It provides ', says the Court in summarizing the rule, "that relative seniority of direct re cruits and promotees shah be determined ac cording to the rotation of vacancies between direct recruits and promotees which shall be based on the quota of reservation for direct recruitment and promotion respectively in the recruitment rules.
It was further explained that a roster should be maintained based on the reservation for direct recruitment and promotion in the recruitment rules.
Where, for example, the reservation for each method is 50 per cent, the roster will run as fol lows(1) promotion, (2) direct recruitment, (3) promotion, (4) direct recruitment, and so on.
Appointments should be made in accordance with this roster and seniority determined accordingly.
A question has been raised whether the circular of 1940 to which we have already referred survived after this circular of 1959; but in our opinion it is unnecessary to decide that question, for the circular of 1959 itself lays down that seniority shall be determined accordingly, i.e. in accordance with the rotational system, depending upon the quota reserved for direct recruitment and promotion respectively.
It is this circular which, according to the respondent, has been followed in determining the seniority of Appraisers in 1963".
, In the face of such a plain directive in the relevant rule regarding relative seniority for the solution of the problem that arises before us where such a seniority provision is absent and the relevant seniority (1) ; (2) [1976] 1 SCR 815.
(3) [1967] 2 SCR 29.
(4) ; (5) [1975] Supp.
SCR 491.
(6) ; (7) [1975] 2 SCR 979.
1055 provision is different, Mervyn Coutindo (supra) cannot be of any assistance.
That case is authority for the proposition it decides in the matrix of the special facts and rule therein.
In view of the words of the Circular 'that senior ity as between direct recruits and promotees should be determined in accordance with the roster which has also been specified . the inextricable interlinking between quota and rota springs from the specific provision rather than by way of any general proposition.
Mervyn Coutindo (Supra) cannot therefore rescue the respondents.
Nor does the refer ence to a 'service ' being divided into two parts, derived from two sources of recruitment, help Shri Garg 's clients.
The rule of 'carry forward ' struck down in T. Devadasan vs Union of India & Anr.(1) has no relevance ,to a situation where the whole cadre of a particular service is divided into two parts.
Apart from the fact that it is doubtful whether Devadasan 's case survives State of Kerala vs
N.M. Thomas & Ors.
(2) there is no application of the 'carry forward ' rule at all in fact situations where two sources of recruitment are designated in a certain proportion and shortfalls occur in the one or the other category.
In such a case, what is needed is conformity to the prescription of the proportion and No. question of carrying anything forward strictly arises.
It is true that Mervyn (Supra) does not support the year by year intake as the yardstick; but the reason is obvious the rule is specific.
Kelkar (Supra) also dealt with the ratio prescribed as between direct recruits and promotees.
Many grounds of attack were levelled there, one of which was that the rota tional system would itself violate the principle of equal opportunity enshrined in the Constitution (article 16(1) ).
The Court repelled this contention.
Of course, promotions made on an ad hoc basis confer no rights to the posts on the appointees, as was clearly pointed out in that decision.
In the instant case it is common ground that the appointments are not on a purely ad hoc basis but have been regularly made in accordance with the rules to fill substantive vacan cies except that the promotees have exceeded their quota, direct recruits being unavailable.
Kelkar (supra) stands on a different footing, and hardly advances the position advanced by Shri Garg.
Jaisinghani (Supra) which has had a die hard survival through Bishan Sarup Gupta vs Union of India(3) and Union of India & Ors.
vs Bishan Sarup Gupta(4) (if one may refer to.
the two cases flowing out of Jaisinghani (supra) in that fashion), has been referred to by both sides at the bar.
It was relied on by Mr. Garg for the strong observation of Ramaswami, J. that the absence of arbitrary power is the first essential of the rule of law upon which our constitu tional system is based.
He has also drawn attention .to the suggestion made in that decision 'to the ' government that for future years the roster system should be adopted by framing an appropriate rule for working out the quota be tween direct recruits and the promotees . '.
We may straightway state that our Constitutional system is very allergic to arbitrary power but there is nothing arbitrary made out in the present case against the government.
The second observation in (1) ; (2) ; (3) [1975] Supp.
SCR 491.
(4) ; 1056 Jaisinghani (Supra) is of a suggestion that for future years the roster system linking up quota with rota, may well be adopted by government.
It is not the interpretation of any existing rule nor laying down of a rule of law, so much so we cannot have any guideline therefrom to apply to the present case.
The Government could no doubt, if it so thought expedient, frame a specific rule incorporating the roster system so as to regulate seniority.
But we should not forget that seniority is the manifestation of official experience, the process of metabolism of service, over the years, of civil servants, by the Administration and, there fore, it is appropriate that as far as possible he who has actually served longer benefits better in the future.
More over, the search for excellence receives a jolt from the rule of equality and the State is hard put to it in striking a happy balance between the two criteria without impairment of administrative efficiency.
Broadly speaking, the Court has to be liberal and circumspect where the area is trickly or sensitive, since administration by court writ may well run haywire.
Moving on, we may start off with the statement that the last case Badami (Supra) lays down the incontrovertibly harmless principle that quotas that are fixed are inaltera ble according to governmental exigencies.
But there, unlike here, no saving provision 'as far as practicable ' existed and here post 1966 promotees have to suffer a push down where their appointments are in .excess of.
the promotee quota.
Nothing directly bearing on our controversy could be discerned by us in that decision.
Gupta I (Supra) an off shoot of Jaisinghani (Supra), proceeds on the assumption that the quota is for .a year.
Whether the rule stated so or not, that was probably the practice and there was nothing unreasonable in it.
Even if the rule as such had expired, it could, according to that decision, be followed as a guideline.
Government had to follow some guiding principle and not be led by its fancy, as each occasion arose.
Palekar, J. expressed the view of the Court thus: "When the rule is followed as a guideline and appointments made, a slight deviation from the quota would not be material.
But if there is an enormous deviation, other considerations may arise.
" In the present case, prior to 1963, there was departure from the quota system and that was sanctioned by the rule itself because of special circumstances.
For subsequent periods, if by taking the year as a unit there have been surplus promotees beyond their allocation even after taking into account impracticability of getting direct recruits upto 1966 when new statutory rules were enacted, then such spill overs, could and should, as indicated by this Court, be set off and absorbed in the later allocable vacancies, the pro tempore illegal appointments being thus regularised.
Of course, appointees on an ad hoc basis are never clothed with any rights and have to quit when the exit time arrives but here there are none.
In Gupta II(Supra) the Court ruled: 1057 "If there were promotion in any year in excess of the quota those promotions were merely invalid for that year but they were not invalid for all time.
They can be regularised by being absorbed in the quota for the later years.
That is the reason why this Court advisedly used the expression 'and onwards ' just to enable the Government to push down excess promotions to later years so that these promotions can be absorbed in the lawful quota for those years.
" Such is the essence of the two Gupta cases (Supra).
Law conceptualises anew every time life inseminates it with new needs and we have in Gupta the innovation of temporary invalidity of an appointment clinically dead but later resuscitated ? Jurisprudence burgeons from the left neces sities of society.
A.K. Subbaraman (Supra) relying on .Gupta 11 (Supra) and going further, has silenced the direct recruits with reference to the precise contention now urged by Shri Garg that rota being imbedded in the womb of the quota system their co existence could not be snapped.
While quota and rota may constitutionally co exist their separation is also constitutionally permissible, if some 'reasonable ' way, not arbitrary whim, were resorted to.
Even what is 'reasona ble ' springs from sort of reflexes manifesting social sub consciousness, as it were.
Nothing absolutely valid exists and rationality and justice themselves are relative.
Within these great mental limitations, the Court 'S observations in Subbaraman (Supra) have to be decided.
This brief and quick survey of decided cases, and the submissions considered by us in the judicial crucible, yield the following conclusions, leaving aside the question of 'confirmation ' in service which, in the Gujarat set up, leaves our controversy untouched: (a) The quota system does not necessitate the adoption of the rotational rule in practi cal application.
Many ways of working out 'quota ' prescription can be devised of which rota is certainly one.
(b) While laying down a quota when fill ing up vacancies in a cadre from more than one source, it is open to Government, subject to tests under article 16, to choose 'a year ' or other period or the vacancy by vacancy basis to work out the quota among the sources.
But once the Court is satisfied, examining for constitutionality the method proposed, that there is no invalidity, administrative tech nology may have free play in choosing one or other of the familiar processes of implement ing the quota rule.
We, as Judges, cannot strike down the particular scheme because it is unpalatable to forensic taste.
(c) Seniority, normally.
is measured by length of continuous, officiating service the actual is easily accepted as the legal.
This does not preclude a different prescription, constitutionally tests being satisfied.
1058 (d) A periodisation is needed in the case to settle rightly the relative claims of promotees and direct recruits.
1960 62 forms period A and 1962 onwards forms period.
B. Promotees regularly appointed during period A in excess of their quota, for want of direct recruits (reasonably sought but not secured and because tarrying longer would injure the administration) can claim their whole length of service for seniority even against direct recruits 'who may turn up in succeeding peri ods.
(e) Promotees who have been fitted into vacancies beyond their quota during the period B the year being regarded as the unit must suffer survival as invalid appointees acquir ing new life when vacancies in their quota fall to be filled up.
To that extent they will step down, rather be pushed down as against direct recruits who were later but regularly appointed within their quota.
On this basis, the judgment of the High Court stands substantially modified, but preparation of a new seniority list becomes necessitous.
We set aside the judgment under appeal but direct the State Government to draw up de novo a gradation list showing inter se seniority ' on the lines this judgment directs.
The subject has been pending so long that very expeditious administrative finalisation is part of justice.
Officials live in the short run even if Administra tions live in the long run.
We direct the State to act quickly.
Lack of adequate articulation of simple points regarding rotation and seniority, and the amber light shed by case law on the questions raised, warrant the direction that parties shall bear their costs throughout.
The unlovely impact of these protracted and legalistic proceedings makes us epilogue, an unusual step in a judg ment, but pathetically necessitous for the renovation of the judicial process.
Law is not a 'brooding omnipotence in the sky ' nor a sort of secretariat asoterica known only to higher officialdom.
But lengthy legal process, where administrative immediacy is the desideratum, is a remedy worse than the malady.
The fact that the present case has taken around 5 working days for oral arguments is a sad commentary on the system, which compels litigents to seek extra curial forums.
Judge Brian Mokenna was right (and the Indian judicial process needs systemic change 'since his wise words apply also to our judicature) when he said: "The fault is that the rules of our procedure which by their discouragement of written argument make possible extensively protracted hearings in open court.
Those re sponsible might think more of changing them.
In civil cases a written argument supplemented by a short oral discussion, would sometime 's save a great deal of time." To streamline and to modernise court management is a Cinderella subject in India, as elsewhere.
We conclude, by repeating what Chief 1059 Justice Warran Burger of the U.S. Supreme Court said, in 1970, in his address to the American Bar Association: "In the final third of the century we are still trying to operate the courts with fundamentally the same basic methods, the same procedures and the same machinery, Roscoe Pound said were not good enough in 1906.
In the super market age we are trying to operate the courts with craker barrel corner grocer methods and equipment vintage 1900.
" We too have miles to go for law and justice to meet.
P.H.P. Appeal allowed.
| The respondent firm was assessed to sales tax under the Uttar Pradesh Sales Tax Act 1948 for the assessment year 1958 59.
On an appeal filed by the respondent the quantum of tax was reduced.
On a revision filed by the respondent made various payments towards the amount of tax found due from time to time. 'the Revenue initiated proceedings for recovering the balance of the tax and realising interest at the rate of 18 per cent.
The Revenue did not issue any fresh notice of demand after the tax was reduced but origi nally demand notice for the entire sum for which the re spondent was assessed was issued.
In a Writ Petition filed by the assessee the High Court quashed the recovery proceedings on the ground that a fresh notice of demand should have been issued to the respondent in respect of the amount as reduced in appeal and the revi sion.
Allowing the appeal by special leave, HELD: (1) Section 8 of the Act was amended by adding sub section (9) thereto by U.P. Sales Tax Amendment Act (3 of 1971).
The said sub section provides that notwithstand ing any judgment, decree etc.
where any notice of assessment and demand in respect of any tax or other dues is served upon a dealer by an Assessing Authority and where as a result of appeal or revision filed by the assessee the amount of tax is reduced it shall not be necessary for the Assessing Authority to serve upon the dealer a fresh notice.
The High Court judgment was, therefore, erroneous.
[135F, H, 136 A E] Firm Parshuram Rameshwar Lal vs State of U.P. 33, STC 540 approved.
(2) Section 8(1A) of the Act provides for payment of interest at the rate of 18 per cent on the tax amount re maining due from the expiry of the time specified in the notice of demand, till the.
date of payment.
The court in Haji Lal Mohammad vs State of U.P. has held that the li ability to pay the interest under section 8(IA) is automatic and arises by operation of law and that it is not necessary to mention the amount of interest in the recovery certifi cate.
[134 E H, 135 A E] Haji Lal Mohd. Biri Works vs State of U.P., 32 STC 496 followed.
|
Appeal No. 358 of 1958.
645 Appeal by special leave from the judgment and order dated 8th March, 1956, of the former Bombay High Court in I.T.R. No. 55 of 1955.
A. N. Kripal and D. Gupta, for the appellant.
N. A. Palkhivala and B. P. Maheshwari, for the respondents.
November 24.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal by special leave against the judgment and order of the High Court of Bombay in Income tax Reference No. 55 of 1955, in which two questions of law were stated for opinion and both were answered in favour of the assessee and against the Commissioner of Income tax who is the appellant before us and the assessee is the respondent.
The facts of this case are these: The respondent is a registered firm carrying on business as commission agents in Bombay.
For purposes of its business it borrowed money from time to time from Banks on joint promissory notes executed by it and by others with joint and several liability.
On September 26, 1949, the respondent borrowed Rs. 1,00,000 from the Bank of India on a pronote executed jointly with one Kishorilal.
Out of this amount a sum of Rs. 50,000 was taken by the respondent for purposes of its business and the rest by Kishorilal.
Kishorilal however failed to meet his liability and became a bankrupt.
The respondent had therefore to pay the Bank the whole amount, i.e., Rs. 1,00,000 with interest.
Out of the amount taken by Kishorilal the respondent received in the accounting year, from the Official Assignee, a sum of Rs. 18,805 and claimed the balance, i.e., Rs. 31,740 as deduction.
The accounting year was from August 26, 1949 to July 17, 1950, the assessment year being 1951 52.
This claim was disallowed both by the Income tax Officer as well as the Appellate Assistant Commissioner.
On Appeal to the Income tax Appellate Tribunal this sum was allowed ,as an allowable deduction under section 10(2)(xv) of the Income tax Act and as business loss.
82 646 At the instance of the Commissioner a case was stated to the High Court of Bombay by the Income tax Appellate Tribunal.
In the statement of the case which was agreed to by both parties the Tribunal said: "For the purpose of his business, he borrows from time to time money on joint and several liability from banks.
The Commercial practice is to borrow money from banks on joint and several liability.
An illustration will explain what we mean.
A and B require Rs. 50,000 each.
They find that the Bank would not advance Rs. 50,000 to each on his individual security.
They however, find that the Bank would be prepared to advance Rupees one lach on their joint and several liability.
They take Rupees one lac on joint and several liability and then divide the money equally between themselves.
" It also found that the Banks advanced monies to some constituents on their personal security also but they had to pay a higher rate of interest than when the money was borrowed on joint and several responsibility; that Rs. 1,00,000 borrowed from the Bank was in accordance with the commercial practice of Bombay.
On these facts the following two questions of law were referred to the High Court: "(1) Whether the assessee 's claim is sustainable under section 10(2)(xv) of the Act? (2) Whether the assessee 's claim that the loss was a business loss and, therefore, allowable as a deduction in computing the profits of the assessee 's business is sustainable under law?" Both these questions were answered in favour of the respondent and against the appellant.
Counsel for the Commissioner challenged the findings of the Tribunal in regard to the existence of commercial practice in Bombay but this ground of attack is not available to him because not only did the Tribunal give this finding in its Order, but in the agreed statement of the case also this finding was repeated as is shown by the passage quoted above.
The High Court also has proceeded on the basis of this commercial practice.
In the judgment under appeal the learned Chief Justice said: 647 "The finding of the Tribunal is clear and explicit that what the assessee was doing was not something out of the ordinary, but in borrowing this money on joint and several liability he was following a practice which was established as a commercial practice.
Therefore, the transaction was clearly in the course of the business and incidental to the business and it is this transaction which resulted in a loss to the assesses, he having to pay the liability of the surety.
" Therefore this appeal has to be decided on the basis that a commercial practice of financing business by borrowing money on joint and several liability was established.
It was argued on behalf of the appellant that this court in Madan Gopal Bagla vs Commissioner of Income Tax, West Bengal (1) had decided against the allowability of such losses.
But the facts of that case when carefully scrutinised are distinguishable and the decision does not support the contentions of the appellant.
No doubt certain features of that case and the present one are similar but they differ in essential features.
In that case the assessee was a timber merchant who obtained a loan of Rs. 1 lac from the Bank of India on the joint security of himself and one Mamraj, which the assessee paid off.
Mamraj also obtained a loan of Rs.
I lac on the joint security of himself and the assessee.
Mamraj became an insolvent and the assessee had to pay the whole of the amount borrowed with interest thereon.
The assessee there received a certain amount of money by way of dividends from the Receiver and the balance he wrote off as bad debt in the assessment year and claimed it as an allowable deduction under section 10.
The High Court there held that the debt could not be said to be a debt in respect of the business of the assessee as he was not carrying on the business of standing surety for other persons nor was he a money lender, he being simply a timber merchant; that it had not been established nor was it alleged that he was in the habit of standing surety for other persons "along with them for purposes of securing loans for their use and benefit" and even if money (1) ; 648 had been so borrowed and there had been a loss the loss would have been a capital loss and not a business loss to the assessee.
This statement of the law was approved by this Court but there mutuality, as an essential ingredient of the custom established, was found to be lacking as is shown by the following passage from the judgment of the court.
"The custom stated before the Appellate Assistant Commissioner was that persons carrying on business in Bombay used to borrow monies on joint security from the Banks in order to facilitate getting financial assistance from the Banks and that too at lower rates of interest.
A businessman could procure financial assistance from the Banks on his own, but he would in that case have to pay a higher rate of interest.
He would have to pay a lower rate of interest if he could procure as surety another business man, who would be approved by the Bank.
This, however, did not mean that mutual accommodation by businessmen was necessarily an ingredient part of that custom.
A could procure B, C or D to join him as surety in order to achieve this objective, but it did not necessarily follow that if A wanted to procure B, C or D to thus join him as surety he could only do so if he in his own turn joined B, C or D as surety in the loans which B, C or D procured in their turns from the Banks for financing their respective businesses.
Unless that factor was established, the mere procurement by A of B, C or D as surety would not be sufficient to establish the custom sought to be relied upon by the appellant so as to make the transaction of his having joined Mumraj Rambhagat as surety in the loan procured by Mumraj Rambhagat from Imperial Bank of India, a transaction in the course of carrying on his own timber business and to make the loss in the transaction a trading loss or a bad debt of the timber business of the appellant.
" Continuing at page 558 it was observed: "There were thus elements of mutuality and the essential ingredient in the carrying on of the money lending business, which were elements of the custom 649 proved in that case, both of which are wanting in the present case before us." Mr. Palkhivala for the respondent rightly argued that Madan Gopal Bagla 's case (1) was decided against the assessee because the custom of persons standing surety for each other for borrowing money and the element of mutuality which was an essential ingredient in the case of Commissioner of Income Tax, Madras vs section A. section Ramaswamy Chettiar (2) was not proved.
In the latter case it was established that there was a well recognised custom amongst Chettiars of raising funds for their business of money lenders by the execution of joint pronotes and that if a loss was sustained by one of the executants having to pay the whole on account of inability of the other it was a deductible loss.
The appellant also relied on a judgment of the Madras High Court in Commissioner of Income Tax vs section R. Subramanya Pillai (3).
In that case the assessee was a book seller who from time to time jointly with another person borrowed money out of which he employed a portion in his business.
One of such amounts borrowed was Rs. 16,200 out of which the assessee took Rs. 10,450 for his business needs and the other debtor took the balance.
The latter became insolvent and the assessee had to pay the whole of the money borrowed and claimed it as allowable deduction under section 10(2)(xi) or section 10(2)(xv) of the Act or as business loss and it was hold that he was not entitled, because the loss sustained by the assessee was too remote from the business of book selling carried on by him and was not sufficiently connected with the trade and therefore fell outside the range of those amounts which could properly be brought into profit and loss account of the business.
The decision in Commissioner of Income Tax vs section A. section Ramaswamy Chettiar (2) was there distinguished on the ground that the decision must be confined to its own peculiar facts and did not apply to business as the one in Subramanya Pillai 's Case (3).
The following passage from (1) ; , (2) (3) 650 the judgment of Viswanatha Sastri, J., in that case is relevant: "But there the business was one of money lending and the Court found that according to the wellknown and well recognised mercantile custom of Nattukottai bankers, they were in the habit of raising 'funds which formed the stock in trade of their money lending business by the execution of joint promissory notes in favour of bankers.
That was apparently the usual technique of obtaining credit adopted by the Nattukottai Chetti community money lenders.
In the context this Court held that where a Nattukottai Chetti money lender paid off in their entirety the debts jointly due by him and another as a result of the latter 's inability to pay, the loss sustained as a result of this transaction was a loss of the moneylending business itself and therefore a deductible item in computing profits.
" In the instant case it has been found that there was a well recognised commercial practice in Bombay of carrying on business by borrowing money from Banks on joint and several liability.
It was also found that by so doing the borrower could borrow money at a lower rate of interest than he otherwise would have paid; that the respondent had, in accordance with the commercial practice, borrowed the money, the whole of which he had to return because the joint promisor Kishori Lal had become bankrupt; mutuality was also held proved.
It cannot be said that the essential feature of the case now before us is in principle different from that of the Commissioner of Income tax vs Ramaswamy Chettiar (1).
In both cases the finding is that there is mutuality and custom of borrowing money on joint pronotes for the carrying on of business.
In our opinion in the circumstances proved in the present case, and on the facts established and on the findings given, the respondent was rightly held to be entitled to deduct the loss which was suffered by him in the transaction in dispute.
Counsel for the assessee drew our attention to a (1) 651 Privy Council judgment Montreal Coke and Manufacturing Co. vs Minister of National Revenue (1) but that, case can have no application to the facts of the present case because it was found there as a fact that the assessees 's financial arrangements were quite distinct from the activities by which they earned their income and expenditure incurred in relation to the financing ' of their business was not expenditure in the earning of their income within the statute.
It was then contended that the loss of the respondent was a 0capital loss and for this again reliance was placed on the judgment of this Court in Madan Gopal Bagla 's case (2 ) and particularly on the observation at page 559 where Bhagwati, J., quoted with approval the observations of the High Court in the judgment but as we have pointed out the facts of that case are distinguishable and what was said there has no application to the facts and circumstances proved in the present case.
In our view the judgment of the High Court is right and we therefore dismiss this appeal with costs.
Appeal dismissed.
| For the purposes of its business the respondent borrowed a certain sum of money from the Bank of India on a pronote executed jointly by him and one Kishorilal in accordance with a commercial practice of carrying on business by borrowing money from Banks on joint and several liability.
The money was divided half and half between the respondent and Kishorilal but Kishorilal failed to pay off his liability as he became a bankrupt and the respondent had to pay the whole amount to the Bank.
The respondent, however, received from the Official Assignee a part of the sum taken by the Kishorilal leaving a balance still unpaid.
The respondent 's claim to deduct this unpaid balance under section 10(2)(XV) of the Income tax Act was refused by the Income tax Officer and the Appellate Assistant Commissioner but was allowed by the Income tax Appellate Tribunal on appeal.
On a reference made at the instance of the appellant the High Court decided the question in favour of the respondent assessee.
On appeal by the appellant by special leave, Held, that the view taken by the High Court was correct.
On the finding that there was a well establised Commercial practice of financing business by borrowing money on joint and several liability and by so doing the respondent could borrow at a lower rate of interest, and that there was mutuality between the borrowers for standing surety for each other for loans taken for business purposes, the respondent assessee in computing his business profits was entitled to deduct the loss suffered by him in paying the sum not paid by his co borrower.
Commissioner of Income tax vs Ramaswami Chettiar, , applied.
Madan Gopal Bagla vs Commissioner of Income tax, West Bengal, ; , Commissioner or Income tax vs section R. Subramanya Pillai, distinguished.
Montreal Coke and Manufacturing Co. vs Minister of National Revenue, [1945] 13 I.T.R. Supp. 1, not applicable.
|
iminal Misc.
Petition No. 1907 of 1976.
Application for Bail in Criminal Appeal No. 110 of 1974.
U. P. Singh for the Appellant.
O. P. Sharma for the Respondent.
J., This is an application for bail pending the hearing of an appeal by special leave.
The appellant was convicted by 386 the Sessions Court for an offence under section 323 of the Indian Penal Code and sentenced to suffer six months ' rigorous imprisonment.
There was also a charge against the appellant for an offence under section 302 of the Indian Penal Code but he was acquitted of that offence by, the Sessions Court and hence the State preferred an appeal against the order of acquittal to the High Court.
This appeal was allowed and the High Court set aside the order of acquittal and convicted the appellant of the offence under section 302 and sentenced him to suffer imprisonment for life.
The appellant, thereupon, preferred a petition for special leave to appeal to this Court and special leave was granted to, him on 28th February, 1974.
The, appellant filed an application for bail pending the hearing of the appeal, but the application was dismissed on 10th January, 1975.
Since the appeal did not reach hearing for a long time, the appellant preferred another application for bail and that is the application which is now being disposed 'of by this judgment.
The appellant contends in this application that pending the hearing of the appeal he should be released on bail.
Now, the practice in this Court as also in many of the High Courts has been not to release on bail a person who has been sentenced to life imprisonment for an offence under section 302 of the Indian penal Code.
The question is whether this practice should be departed from and if so, in what cir cumstances.
It is obvious that no practice howsoever sanctified by usage and hallowed by time can be allowed to prevail if it operates to cause injustice.
Every practice of the Court must find its ultimate justification in the interest of justice,.
bail a person whohas been sentenced to life imprisonment was evolved in the High Courts and in this Court on the basis that once a person has been found guilty and sentenced to life imprisonment, he should not be let loose, so long as his conviction and sentence are not set aside, but the underlying postulate of this practice was that the appeal of such person would be disposed of within a measurable distance of time, so that if he is ultimately found to be innocent, be would not have to remain in jail for an unduly long period.
The rationale of this practice can have no application where the Court is not in a position to dispose of the appeal for five or six years.
It would indeed be a travesty of justice to keep a person in jail for a period of five or six years for an offence which is ultimates found not to have been committed by him.
Can the Court ever compensate him for his incarceration which is found to unjustified ? Would it be just at all for the Court to tell a person : "We have admitted your appeal because we think you have a prima facie case, but unfortunately we have no time to hear your appeal for quite a few years and, therefore, ,until we hear your appeal, you must remain in jail, even though you may be innocent ?" What confidence would such administration of justice inspire in the mind of the public ? It may quite conceivably happen, and it has in fact happened in a few cases in this Court, that a person may serve out his full term of imprisonment before his appeal is taken up for hearing.
Would a judge not be overwhelmed with a feeling of contrition while acquitting such a person after hearing the appeal ? Would it not be an affront to his sense of justice ? Of what avail would the acquittal be to such a person who has already served out his term of impri 387 sonment or at any rate a major part of it ? It is, therefore, absolutely essential that the practice which this Court has been following in the past must be reconsidered and so long as this Court is not in a position to hear the appeal of an accused within a reasonable period of time, the Court should ordinarily, unless there are cogent grounds for acting otherwise, release the accused on bail in cases where special leave has been granted to the accused to appeal against his conviction and sentence.
Here in the present case, the appellant, after serving out the sentence 'of six months ' rigorous imprisonment for the offence under section 323 imposed upon him by the Sessions Court, was on bail throughout the duration of the appeal before the, High Court and since the appeal was allowed and he was convicted for the offence under section 302 and sentenced to life imprisonment, he surrendered before presenting his petition for special leave to appeal to this Court.
Since then, the appellant has been in jail and the total period he has spent in jail so far is about four and a half years.
The appeal is of 1974 ;and it is not likely to come up for hearing for at least another two years since.
this Court is at present hearing appeals preferred in the year 1972.The very fact that this Court has granted to the appellant specialleave to appeal against his conviction shows that, in the opinion of thisCourt, he has prima facie a good, case to consider and in the circumstances it would be highly unjust to detain him in jail any longer during the bearing of the appeal.
We, therefore, direct that the appellant be released on bail to the satisfaction of the Chief Judicial Magistrate, Patiala.
The appellant will report at the nearest police station once in a fortnight.
S.R. Appeal allowed.
| Order XXI Rule 64 of the C.P.C. lays down that "any court executing a decree may order that any property attached by it and liable to sale or such portion thereof as may seem necessary to satisfy the decree, shall be sold and that the proceeds of such sale, or a sufficient portion thereof shall be paid to the party entitled under the decree to receive the same.
" The 5th respondent/decree holder, S.P.R. Reddy obtained two decrees against the Judgment debtor Pujari Subbarayudu in two suits viz.; U.S. 15 of 1949 and O.S. 19 of 1953.
He filed execution proceedings No. 24 of 1953 in the trial Court for selling the properties belonging to the judgment debtor in Devanoor and Gudipadu villages in order to satis fy the decree in U.S. 15 of 1949.
He also applied for permission to bid at the auction sale.
In the auction sale held on March 2, 1955, the 5th respondent purchased the lands situated in village Devanoor for a sum of Rs. 16,880/ .
Despite the fact that the sale proceeds of the lands in village Devanoor alone was sufficient to satisfy the decretal amount mentioned in the warrant of sale and the proclamation of sale viz.; Rs. 16,715.50, The Court proceed ed to sell the properties of the judgment debtor in village Gudipadu which fetched Rs. 12,500/ and which were purchased by the appellant auction purchaser.
The judg ment debtor filed an application on March 31, 1955 to set aside the sale contending, inter alia, that once the sale of the properties in village Devanoor was sufficient to satis fy the amount mentioned in the sale proclamation, the Court should have stopped the sale as required by the mandatory provisions of Order XXI Rule 64 of the C.P.C.
The Trial Court rejected the said application; whereupon the decree holder on April 20, 1955 obtained an order from the court for rateable distribution of the sale proceeds.
In appeal the High Court accepted the plea of the judgment debtor regarding non compliance with the provisions of O.XXI Rule 64 C.P.C. and set aside the sale with respect to the proper ties situated in village Gudipadu.
Dismissing the appeal by certificate the Court, HELD: (1) The High Court rightly held that as the sale of the properties in village Devanoor fetched an amount mentioned in the sale warrant.
the Executing Court was not justified in proceeding with the sale of the properties in village Gudipadu and should have stopped the sale.
[694 F] (2) The logical corollary which flows from O.XXI Rule 64 of the Code is that where the amount specified in the proc lamation of sale for the recovery of which the sale was ordered is realised by sale of certain items, the sale of further items should be stopped.
[695 C D] (3) Under Order XXI Rule 64, the Executing Court derives jurisdiction to sell properties attached only to the point at which the decree is fully satisfied.
The words "necessary to satisfy the decree" clearly indicate that no s,de can be mentioned in the sale proclamation and is sufficient to satisfy the decree, no allowed beyond the decretal amount mentioned in the sale proclamation.
In other words.
where the sale fetches a price equal to or higher than the amount further sale should be held and the court should stop at that stage.
[695 E F] (4) In the facts and circumstances of the present case, there being nothing to show that the decree holder had approached the court for including the second decretal amount obtained in O.S. 19 of 1953 in the proclamation of sale, the 693 Executing Court was not justified in selling the properties situated in village Gudipadu.
The fact that the Judgment debtor did not raise an objection on this ground before the Executing Court rs not sufficient to put him out of court because this was a matter which went to the very root of the jurisdiction of the Executing Court to sell the properties and the non compliance with the provisions of O.XXI, Rule 64 of the Code was sufficient to vitiate the same so far as properties situated in village Gudapadu were concerned.
[695 G H, 696 A] (5) The Court remitted the matter to the Executing Court for an inquiry with the following directions: (i) The appellant will have to return the properties in village Gudipadu to the judgment debtor and he will be entitled to receive the value of improvements made by him during the time he was in possession of these properties, as determined by the Executing Court in addition to Rs. 12,500/ .
(ii) He will not he entitled to any interest on the value of the improvements, if he is found to be in posses sion of the property.
(iii) If the Executing Court finds that the auction purchaser was not in possession of the properties, the judgment debtor will have to refund the amount of Rs. 12,500/ to the appellant with interest at the rate of 12 per cent per annum from the date of sale upto the date of refund.
[696 B E]
|
Appeals Nos. 459 and 460 of 1957.
Appeals by special leave from the judgment and order dated the 30th November, 1956, of the Industrial Tribunal, Bombay, in Reference 1.
T. Nos. 10 and 13 of 1956.
R.H. Kolah, Dadachanji and section N. Andley, for the appellant.
930 C.L. Dudhia and I. N. Shroff, for the respondents in C. A. No. 459 of 1957.
A.S. R. Chari and 1.
N. Shroff, for the respondents in C. A. No. 460 of 1957.
May 5.
The Judgment of the Court was delivered by GAJENDRAGADKAR J.
These two appeals arise out of a demand for bonus made against the appellants by their workmen for the year 1953 54.
The Associated Cement Companies Ltd., Bombay, the Cement Marketing Company of India Ltd., Bombay and the Concrete Association of India, Bombay, were faced with a demand of their workmen employed in their offices at Bombay for bonus equivalent to seven months ' basic wages with dearness allowance.
The industrial dispute arising out of this demand was referred by the Government of Bombay for adjudication before the Industrial Tribunal, Bombay, under section 10 of the Industrial Disputes Act and it was numbered I. T. No. 10 of 1956.
The Associated Cement Companies Ltd., Dwarka Cement Works, Dwarka, was similarly faced with a demand of its workmen for bonus equivalent to 50% of total earnings or six months ' total earnings.
This dispute was referred to the same tribunal and was numbered 1.
T. No. 13 of 1956.
By consent of parties both the references were heard together and evidence was recorded and documents tendered in the first reference.
By its award delivered on November 30, 1956, the tribunal directed the companies to pay their workmen drawing a basic pay or wages up to Rs. 500 per month bonus equivalent to 1/3 of their basic wages or pay (less bonus already paid for the year 1953 54) subject to the conditions specified in the award.
It is against this award that the respective companies have preferred the two appeals by special leave.
In this judgment the said companies will hereafter be described as the appellant and their workmen as respondents.
The A. C. C. is the principal company concerned in the dispute.
The Cement Marketing Company of 931 India Ltd., (hereafter called the C. M. I.) has been separately registered under the Indian Companies Act as a Joint Stock Company; but it is a hundred per cent.
subsidiary of the A. C. C.
The C. M. I. are the Sales Managers of the A. C. C. while the Concrete Association of India (hereafter called the C. A. I.) is merely a department of the C. M. 1.
As a result of the agreement which came into operation from ' August 1, 1953, all financial transactions of the C. M. 1.
in relation to sales now find a place in the accounts of the A. C. C.
Similarly all of its fixed assets have been taken over and appear in the balance sheets of the A. C. C.
All the three concerns have a common staff in Bombay.
The A. C. C. had already paid to its employees bonus equivalent to three months ' basic wages for the year 1953 54 and so had the C. M. I. to its workmen.
It appears that the C. M. I., including the C. A. I., undertakes to pay to its employees the same amount of bonus as has been paid or awarded to the employees of the A. C. C.
There is no dispute that the A. C. C. is the biggest amongst the companies in India which manufacture cement.
It owns 15 cement factories at different places in India and 2 in Pakistan.
Out of the total quantity of cement despatched by all the cement factories in India in 1953 54 the A. C. C. despatched 55.46 %.
The A. C. C. came into existence in 1936 as a result of the merger of four important groups of companies engaged in the manufacture of cement.
These were F. E. Dinshaw, Tatas, Killick Nixon and Khatau, groups.
It appears that 11 companies in all merged with the A. C. C. Before the tribunal the case for the respondents was that the appellant held a position of monopoly in the cement industry and was easily in a position to pay the bonus claimed by them.
Their allegation was that the appellant had inflated the capital invested by the merging companies while taking them over in 1936; it had set up new factories out of the profits earned by it without raising fresh capital and thereby had used profits for the purpose of expansion.
In the year 195354 the appellant had capitalised the full amount 932 standing to the credit of the premium on shares account and had transferred a part of the reserves for taxation to the capital account thus increasing the aggregate capital.
The emoluments of the workers were inadequate and so they were entitled to the bonus claimed by them in order to fill up the gap between the actual wage paid to them and the living wage due to them.
The respondents also contended that the claim made by the appellant for rehabilitation and replacement in the dispute for the year 195152 included not only the amount required for rehabilitation and replacement but also expansion; and so, according to them, the appellant was not entitled to any amount for rehabilitation purposes in the year in dispute.
They also alleged that the appellant was not entitled to claim.
interest at more than 4% on paid up capital and 2 % on working capital.
Thus the respondents urged that if all the relevant facts are taken into account it would be found that the claim for bonus made by them in the two respective references was just and proper.
In support of their case the respondents filed several statements which, they claimed, had been prepared in accordance with the Full Bench formula, and they also cross examined Mr. Tongaonkar who gave evidence on behalf of the appellant.
This claim was resisted by the appellant.
It was urged on its behalf that the points raised by the respondents in the present references bad been heard and finally decided in the previous adjudication (Ref.
I. T. No. 115 of 1953) which dealt with their claim for bonus for the preceding year; and it was alleged that the respondents were barred from raising the same questions over again in the present adjudication.
The cement machinery, though heavy, is subject to rigours of extremely tough and heavy duties and the machinery has to run ceaselessly day and night throughout the year.
The appellant contended that, having regard to the special features of the cement industry, the machinery had to be kept on the highest standards of maintenance and needed frequent replacement and rehabilitation.
A cement factory is a very expensive industrial proposition.
The appellant denied that 933 it was in a monopolistic position and pleaded that its object was to deliver cement as cheaply as possible to the consumers.
The respondents ' allegation that there was " puffing up of block capital at the time of the merger in 1936 " was denied by the appellant and it was not admitted that ever since its inception it had steadily made huge profits.
The appellant also denied the allegation of the respondents that the profits, coming out of the business had been used in expanding its factories.
It had used all available resources including premium on issue of shares and depreciation fund for replacement, rehabilitation and modernisation.
It was not true that the appellant had built huge reserves and that the wages paid by the appellant to its employees were inadequate; on the contrary they compared very favourably with those in other comparable industries.
The appellant denied the statement of the respondents that no plant reinstatement reserve over and above the deprecia tion allowance was necessary in the current year and it urged that the calculations made by the respondents alleged to be in terms of the Labour Appellate Tribunal formula were inaccurate.
In its turn the appellant claimed more than 6% interest on paid up capital and more than 4% interest on working capital.
The appellant also emphasised that it had already paid to the respondents bonus for three months though the strict working out of the formula would show that there was no available surplus for the relevant year and so the respondents would not be entitled to any bonus at all.
In support of its case the appellant examined Mr. G. R. Tongaonkar, its controller of planning and development, and produced a statement (exhibit C 2) showing the original cost of the blocks to be replaced and the approximate replacement cost.
It also produced amongst other documents a statement (exhibit C 10) showing the cost of the assets of the merging companies on July 31, 1936, as taken over by the appellant and the statement (exhibit C 29) showing the capital expenditure from 1936 37 to 1953 54 on expansion, modernisation, rehabilitation, replacement, sundry capital jobs, etc.
934 In addition a statement was filed by the appellant (exhibit C 23) showing that the calculations made under the Full Bench formula would show a substantial deficit and that would support its case that there was no available surplus for the relevant year from which any bonus could be claimed by the respondents.
exhibit C 2 is a statement prepared by Mr. Tongaonkar showing the original cost of the block to be replaced and the approximate replacement cost.
This statement has been prepared on the basis that the approximate cost to the merging companies of their assets as on 31 7 1936 was 5.73 crores.
It is admitted that this statement has lumped together all the properties of the appellant including plant and machinery, as well as buildings, roads, bridges and railway sidings and has classified them into four categories.
The statement contains 9 columns.
The first column gives the year or years of purchase of machinery.
This could classifies the four categories of the blocks according to their respective years of purchase.
The first category consists of blocks purchased up to 1939, the second purchased between 1940 44, the third purchased between 1945 47 and the last purchased between 1949 54.
Column 2 gives the original cost of the said categories as on 31 7 1954.
Column 3 gives particulars of such portions of the blocks as have been discarded, scrapped or sold.
In this column the years in which the blocks were discarded, scrapped or sold are indicated and their original cost is me 935 figures mentioned in col. 5 for 1939 and 1940 44 blocks have been arrived at by reducing the corresponding figures given in col. 4 by 20%.
Column 6 gives the approximate present life of the machinery and plant mentioned in col. 4; col. 7 sets out the breakdown value of the machinery referred to in col. 4, whilst col. 8 gives the approximate cost of rehabilitation of machinery as shown in col. 5 less breakdown value as shown in col. 7.
The last column works out the annual requirements of the appellant in respect of the rehabilatation of the four categories of blocks.
The figures in this column are arrived at by dividing the amounts mentioned in col. 8 by the respective divisors mentioned in col. 6.
The total annual requirement of the appellant in respect of rehabilitation is shown as of the order of Rs. 3,29,61,752.
exhibit C 23 is a statement prepared by Mr. Tongaonkar to show the deficiency in profits in relation to payment of additional bonus claimed by the respondents for the accounting year 1953 54.
This statement has been prepared alternatively on the basis of statutory depreciation allowable by income tax authorities and also on the basis of straight computation at ordinary rates.
The first method results in a deficit of Its.
107.20 lakhs, while the second in a deficit of 97.86 lakhs.
In working out the provision for rehabilitation, this statement first takes the replacement cost of block up to 1939 as per exhibit C 2 to be Rs. 1601.19 lakhs.
From this amount the available reserves as on 1 8 1953 which are of tile order of Rs. 311 lakhs are deducted, leaving a balance of Rs. 1290.19 lakhs.
Then the replacement costs of the three remaining categories of blocks are taken into account and all the said amounts are divided by the appropriate divisors mentioned in col. 6 of exhibit C 2.
The result is the sum of Rs. 284.48 lakhs, and that is claimed by the appellant as the provision for rehabilitation under the formula.
In his evidence Mr. Tongaonkar has given reasons in support of the respective multipliers and divisors adopted by him in making his calculations in exhibit C 2. 119 119 936 He has also given several details on all the relevant and material points in support of the appellant 's case.
Naturally the respondents have cross examined him at length.
One of the questions in controversy between the parties in the present appeals centres round the appreciation of Mr. Tongaonkar 's evidence and the value to be attached to the statements prepared by him.
On the contentions raised by the parties before it the tribunal framed ten issues for determination and it has made its findings on them in the light of the evidence adduced before it.
It has held that the appellant had not inflated the capital invested by the merging companies while taking them over in 1936.
It has allowed 6% interest on the entire paid up capital of Rs. 1267.59 lakhs, and 4% interest on the working capital.
In regard to the claim for depreciation the tribunal has held that it was normal depreciation calculated according to the straight line method which should be allowed.
On the question of income tax, the tribunal has allowed the same at 83.4 pies in a rupee as claimed by the appellant on its net profits.
It has, however, rejected the appellant 's case that the income from investments in shares and securities received by it should be excluded for the purpose of bonus; while it has allowed the sum of Rs. 10 lakhs provided by the appellant as annual contribution to the reserve for gratuity, as also the expenditure on the cost of dismantling buildings, prospecting expenses, etc.
It did not accept the respondents ' case that the bonus paid by the appellant to its officers should be reduced or wholly disallowed for the purpose of calculations under the formula; and, on the question as to whether overtime payment should be included in the payment of bonus, it has upheld the respondents ' contention and allowed the inclusion of the said payment.
Having disposed of these minor issues, the tribunal examined at length the claim made by the appellant in regard to the provision for rehabilitation, replacement and modernisation.
Indeed this was the most controversial and the most important issue raised 937 before it.
The tribunal examined the evidence of Mr. Tongaonkar as well as exhibit C 2 and other documents produced by him, and came to the conclusion that " exhibit C 2 presents an incorrect and exaggerated picture of the A.C.C. 's requirements of rehabilitation and replacement" and so it cannot be relied upon.
According to the tribunal the multiplier 4.28 adopted by Mr. Tongaonkar was itself an inflationary figure; and it thought that " the consequence of applying it not to the original price but to its increased price paid by the A.C.C. would be to obtain an inflationary result.
It appears that the tribunal wag inclined to hold that 2.7 was a fair multiplier representing the price increase over the pre war base.
The tribunal was also not satisfied with Mr. Tongaonkar 's evidence in regard to the life of plant and machinery ; and so it held that the period of life given in col. 6 of exhibit C 2 cannot be accepted as correct.
While dealing with the question about the rise in prices, the tribunal has held that it was usual to take the average level of prices prevailing in a period of about five years in preference to the prices prevailing in a particular year as was done by Mr. Tongaonkar.
The tribunal subjected Mr. Tongaonkar 's evidence on the question of replacement, rehabilitation and modernisation to a close examination and held that the method adopted by Mr. Tongaonkar in distinguishing between modernisation and expansion was of a purely subjective estimate " which does not bear the scrutiny of an objective test ".
On the whole the tribunal was not prepared to accept Mr. Tongaonkar 's evidence at its face value and it was not prepared to treat exhibit C 2 and consequently exhibit C 23 as reliable.
It is relevant to point out at this stage that the tribunal has not made any finding about the life of the machinery nor has it recorded any conclusion as to a proper divisor.
In fact it has completely left out of consideration Exs.
C 2 and C 23 while determining the amount which should be allowed for the appellant 's claim for rehabilitation for the relevant year.
The tribunal then examined the principle underlying the Full Bench formula and held that, it was not 938 intended to be worked out as a rigid mathematical formula.
" We must make it ", says the tribunal, " as flexible as possible so as to do justice to everybody concerned in the earning of profits".
The general question, which it has considered in this connection, is how far and to what extent profits of a concern should contribute to the satisfaction of the claims of industry for replacement; rehabilitation and modernisation.
It was impressed by the argument that, where the requirements under these items are so huge as to be out of tune with the profits, it would be open to an industrial adjudicator to allow only a reasonable provision to be made out of the profits for the said items and leave the industry concerned to tap other resources to make up the balance.
In support of this conclusion it has referred to the observations made by F.R.M. de Paula in his "Principles of Auditing", the report of the Taxation Enquiry Commission and of the working party for the Cotton Textile Industry.
It has also relied on a part of the speech delivered by Mr. J. R.D. Tata in addressing the annual general meeting of the shareholders of the Tata Iron and Steel Company in August 1950.
In this connection the tribunal has expressed its apprehension that if all the money required for a continuous process of modernisation and expansion is to come out of the profits made by the concern, labour will rarely see a day when they will enjoy bonus granted to them out of profits; though it has hastened to add that it was far from its mind that a progressive concern like the A.C.C. should not keep pace with time and modernise its machinery; but it only wished that it should give a fair deal to the workers in the distribution of the profits.
Having hold that, if the claims for rehabilitation turn out to be huge and out of tune with the profits made by the industry, it would be open to the tribunal to grant the claim of the industry in that behalf only to the extent that it deems to be reasonable and fair, it proceeded to consider how far and to what extent the appellant 's claim should be allowed in the present proceedings.
It is necessary to mention that in dealing with this 939 question the tribunal was considerably influenced by the past conduct of the appellant.
It thought that for rehabilitation the appellant had claimed no more than Rs. 192 or 193 lakhs in the previous adjudication proceedings where the dispute for bonus had reference to the year 1951 52.
If the claim then made by the appellant was no more than Rs. 192 or 193 lakhs, the present claim for Rs. 284 lakhs, the tribunal thought, ' was obviously inflated and unreal.
Similarly the tribunal emphasised the fact that the programme earlier submitted by the appellant to the Tariff Commission was in turn more modest than the claim made in the said adjudication proceedings.
It appears that in the said programme the appellant had made out a case for the estimated expenditure of Rs. 18.36 crores to be spread over a period of ten years from 1 8 1952 to 31 7 1962 and that works out approximately at the figure of Rs. 184 lakhs per year.
It was on these facts that the tribunal held that " if the A.C.C. estimated its annual requirements of rehabilitation, replacement and modernisation at Rs. 192 lakhs per year during the period of ten years commencing from 1 8 1952, 1 do not think that it should be allowed to depart from it now".
In substance, according to the tribunal, the present claim for rehabilitation was very much inflated, it had no relation to realities, and so the appellant should not be allowed to make such a claim.
That is why it did not think it necessary to record any finding as to the proper divisor, and to determine, in the light of Mr. Tongaonkar 's evidence, what approximately would be a fair or reasonable amount for rehabilitation under the formula.
It is thus clear that in making its final calculations the tribunal has assumed that the claim made by the appellant for rehabilitation, replacement and modernisation must be taken to be no more than Rs. 192 or 193 lakhs, and on that assumption it has considered to what extent the claim should be allowed.
Ultimately the tribunal came to the conclusion that in the circumstances of the case it would be fair to allow the appellant about Rs. 165 to 170 lakhs as annual provision for the said items.
In support of this conclusion 940 the tribunal has relied on the fact that for the two years 1952 53 and 1953 54 the appellant had spent about Rs. 339.76 lakhs for the purpose of rehabilitation, replacement land modernisation and that works at the average of Rs. 170 lakhs per year.
The tribunal has then taken into account the fact that the appellant had a plant reinstatement reserve of Rs. 235 lakhs and a general reserve of Rs. 76 lakhs in the beginning of the year 1953 54.
If these amounts which would be available for rehabilitation are spread over the ten year period of the tentative programme planned by the appellant, the annual figure would come to Rs. 31 lakhs; and this amount would have to be deducted from Rs. 165 lakhs which the tribunal was inclined to grant in respect of the relevant item.
That is how the tribunal has made the appropriate calculations under the formula, and has shown that, even after the payment of one month 's additional bonus as directed by it, the appellant would still be left with a surplus of Rs. 23.48 lakhs.
That in brief is the nature and effect of the findings made by the tribunal.
Before dealing with the merits of the points raised in these appeals it would be convenient to refer to the genesis and the terms of the formula which has been evolved by the Full Bench of the Labour Appellate Tribunal in the case of The Mill Owners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh, Bombay (1) in 1950.
It appears that from 1940 A. D. onwards the claims for bonus made by the employees against their employers in different industries were dealt with on an ad hoe basis from case to case.
Sometimes the employers voluntarily paid bonus to their workmen; and where disputes arose they were decided by the tribunals in the light of the circumstances of each case without relying on any broad consideration of policy or without attempting to lay down any general principles.
In 1948 a bonus dispute arose between the Mill Owners Association, Bombay and its employees, and it was referred for adjudication to the Industrial Court.
In considering this dispute the Industrial Court went (1)(1950) L.L.J. 1247.
941 elaborately into the matter, laid down certain principles and awarded to the workmen bonus equivalent in amount to 3/8 of the total basic earnings of each workman subject to certain conditions.
In the subsequent year a similar dispute arose between the same parties; and it was again referred to the Industrial Court for adjudication.
The Court made its award on July 7, 1950, directing 55 mills of the Association to pay to their workmen, whether permanent or temporary, 1/6 of the basic earnings of each of them as bonus.
This award was challenged by the Association before the Labour Appellate Tribunal.
It was urged on behalf of the Association that the wage structure in the textile industry had been settled by standardisation and so bonus must be regarded as a gratuitous payment; and it was argued that at any rate grant of bonus cannot be made for the purpose of making up the deficiency between the actual and living wages.
These contentions were rejected by the Labour Appellate Tribunal and the question about the grant of bonus was considered on general principles on the basis of which a formula,, often described as the First Full Bench Formula, was ultimately evolved.
"As both capital and labour contribute to the earnings of the industrial concern ", observed the appellate tribunal, " it is fair that labour should derive some benefit if there is a surplus after meeting prior or necessary charges ".
The appellate tribunal was also of the view that where the goal of living wages had been attained, bonus, like profit sharing, would represent more as the cash incentive to better efficiency and production; but where the industry had not the capacity to pay a living wage bonus must be looked upon as the temporary satisfaction wholly or in part of the needs of the employee.
In other words, according to this decision, the award of bonus is based on a two fold consideration.
It is made in recognition of the fact that labour has made some contribution to the profit earned by the industry, and so it is entitled to claim a share in it; and it is also intended to help labour to bridge or narrow down the gap, as far as may be reasonably possible, between the living wage to which labour is entitled and the actual wage received by it.
942 Dealing with the problem from this point of view the appellate tribunal conceded that investment necessarily implies the legitimate expectation of the investor to secure recurring returns on the money invested by him in the industrial undertaking, and so it held that it was essential that the plant and machinery should be kept continuously in good working order for the purpose of ensuring that return.
Such maintenance of the plant and machinery would necessarily be to the advantage of labour because the better the machinery the larger the earnings and the brighter the chance of securing a good bonus.
On this consideration it was held that the amount of money that would be necessary for rehabilitation, replacement and modernisation of the machinery would be a prior charge on the gross profits of the year.
Since the depreciation allowed by the income tax authorities is only a percentage on the written down value the depreciation fund set apart on that basis would not be sufficient for the purposes of rehabilitation and an extra amount would have to be annually set apart nationally under the heading of 'reserves ' to make up the deficit.
This position was apparently not disputed by the employees.
The claim made by the industry that a fair return on the paid up capital must be secured and that ordinarily it should be paid at the rate of 6% per annum was also not disputed.
The employees, however, challenged the claim of the industry that reserves employed as working capital should carry any interest; but their objection was overruled and it was held that working capital also would be entitled to interest though at a much lower rate than that on the paid up capital.
Then the question of taxes was considered and it was agreed that a provision had to be made for taxes which would be payable on the amount determined after deducting depreciation from the gross profits less any bonus which may be awarded.
In the result the appellate tribunal laid down the manner and method in which the available surplus should be determined.
The notional accounting for this purpose starts with the figure of the gross profits which are 943 arrived at after payment of wages and dearness allowance, to the employees and other relevant items of expenditure.
Then a deduction for depreciation is made, and on the notional balance thus derived a provision for taxes payable is allowed.
Then follow the provisions for reserves for rehabilitation, return on paid up capital and return on reserves employed as working capital.
That gives the amount of surplus if ' any.
Whenever the working of this formula leaves an amount of available surplus, labour was held entitled to claim a reasonable share in this amount by way of bonus for the current year.
This formula is based on considerations of social justice and is intended to satisfy the legitimate claims of both capital and labour in respect of the profits made by the industry in a particular year.
It takes the particular year ' as a unit and makes all its notional calculations on the basis of the gross profits usually taken from the profit and loss account; in this particular case the available surplus determined by the application of the formula was found to be 2.61 crores; and out of this surplus 0.30 crores were awarded as bonus to clerks and other staff and 1.86 crores was awarded as bonus to the employees leaving a net notional balance of 0.45 crores.
This Court had occasion to consider the said formula in Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur (1).
The judgment in that case indicates that without committing itself to the acceptance of the formula in its entirety, this Court in general accepted as sound the view that since labour and capital both contribute to the earnings of the industrial concern, it is fair that labour should derive some benefit if there is a surplus after meeting the four prior or necessary charges specified in the formula.
It is relevant to add that in dealing with the concept of bonus this Court ruled that bonus is neither a gratuitous payment made by the employer to his workmen nor can it be regarded as a deferred wage.
According to this decision, where wages fall short of the living (1) ; 120 944 standard and the industry makes profit part of which is due to the contribution of labour, a claim for bonus can be legitimately made.
However, neither the propriety nor the order of priority as between the four prior charges and their relative importance nor their content was examined by this Court in that case; and though the formula has subsequently been generally accepted by this Court in several reported decisions (Baroda Borough Municipality vs Its Workmen (1), Sree Meenakshi Mills, Ltd. vs Their Workmen (2) and The State of Mysore vs The Workers of Kolar Gold Mines (3) ) the question about the adequacy, propriety, or validity of its provisions has not been examined nor has the general problem as to whether the formula needs any variation, change or addition been argued and considered.
It is for the first time since 1950 that, in the present appeals, we are called upon to examine the formula carefully and express our decision on the merits of its specific provisions.
As we have already indicated, in dealing with the present dispute the tribunal has held that, in working out the formula, it could relax its provisions even though the proposed relaxation may mean a material variation of the formula itself.
On behalf of the appellant Mr. Kolah has taken strong exception to this approach.
He has argued that, in the last eight years and more, on the whole the formula has worked fairly well in the interest of both capital and labour, and so the tribunal was not justified in departing from it in the present case.
This argument undoubtedly raises a question of considerable importance.
Before examining this argument, however, it is necessary to consider one preliminary point: Was the tribunal justified in holding that the appellant could not be allowed to add to its previous claim for rehabilitation ? The decision of the tribunal on this point seems to indicate that the tribunal thought that the appellant was estopped from making any such claim; and the correctness of this conclusion is challenged by the appellant.
(1)[1957] S.C.R. 33, 39.
(2) ; , 884.
(3) ; 945 It is true that, in the report submitted by the appellant before the Tariff Commission in April 1953, it had set out the details of its ten year programme which included, besides replacement, rehabilitation, modernisation and expansion, mechanisation of quarries as well as construction and improvement of houses for its labour staff.
The report of the Tariff Commission (p. 30) shows that the cost of the programme was ' estimated at Rs. 18.36 crores, excluding the cost of a new plant at Sindri, or about Rs. 184 lakhs per annum.
Subsequently in January 1954, when Mr. Tongaonkar gave evidence in the previous adjudication proceedings, he produced a statement (exhibit U 8) according to which the appellant 's annual requirements for rehabilitation would be of the order of Rs. 192 or 193 lakhs, whereas in the present proceedings the said claim is made at Rs. 284 lakhs.
A bare statement of these facts prima facie suggests that the appellant 's present claim for rehabilitation has been growing from stage to stage, and in its present form it is very much inflated; and that is what the tribunal has also assumed.
In our opinion this assumption is not wholly correct.
Mr. Tongaonkar 's evidence shows that in the report of the jobs submitted to the Tariff Commission the appellant had not included all relevant items of rehabilitation, replacement and modernisation.
The report merely gave a list of the jobs which the appellant had proposed to undertake during the ten year period ending July 31, 1962.
It was in no sense an exhaustive statement about the appellant 's requirements in regard to the rehabilitation of all its blocks.
In fact, having regard to the nature and scope of the enquiry before the Tariff Commission, the report made by the appellant had to be restricted to the urgent jobs which it wanted to undertake during the execu tion of its ten year programme; and so it would not be reasonable to hold that the figure of annual rehabilitation expenses which can be deduced from the said report has any relation to the claim for rehabilitation made by the appellant in terms of the working of the formula.
Then again the appellant 's claim for rehabilitation 946 in the earlier proceedings has also been satisfactorily explained by Mr. Tongaonkar.
The respondents have placed considerable reliance on the statement filed by Mr. Tongaonkar in the said proceedings (exhibit U 8).
This document has been produced by the respondents in support of their contention that it purports to make a claim for Rs. 192 lakhs per year 'for rehabilitation.
That no doubt is true ; but in terms the document purports to show the estimated expenditure required during the ten year period there specified; and as Mr. Tongaonkar has stated, it does not include a full statement of the claim in regard to the rehabilitation of all the blocks belonging to the appellant.
In considering the respondents ' argument on this point, it is necessary to bear in mind that in the earlier proceedings the appellant had filed a separate statement showing the amount to which it was entitled by way of rehabilitation under the formula; this statement was exhibit C 3 and it has been produced in the present case and exhibited as U 5.
It appears that in the earlier proceedings the tribunal did not attach any importance to the said document and virtually ignored it because, like the present tribunal, it held that " it does not appear to be necessary to plan further ahead than ten years and it is desirable to base calculations of rehabilitation on realities "(1).
Even so the Labour Appellate Tribunal found that the appellant 's contention that its workmen were not entitled to any additional bonus was not well founded even if its claim for rehabilitation was confined to Rs. 192 or Rs. 193 lakhs.
Besides, Mr. Tongaonkar has stated on oath that exhibit U 8 was not among the documents originally submitted by the appellant to the tribunal in 1954.
it was in fact prepared and submitted at a later stage at the instance of the tribunal itself.
It is, therefore, clear that exhibit U 8 was not intended to, and did not supply, the basis of the appellant 's claim in the earlier proceedings in accordance with the formula.
A study of the items contained in exhibit U 8 also supports the same conclusion.
Mr. Tongaonkar has (1) ,592.
947 stated that the total amount of the estimated expenditure shown in this document included only a small portion of the expenditure required for rehabilitation of the post 1944 block.
It is true that Mr. Tongaonkar 's statement that in the said total amount nearly Rs. 50 lakhs represent the amount for replacement or rehabilitation of post 1944 block is inaccurate.
The Chaibasa Cement Factory and the Sevalia Cement Factory for the rehabilitation of which Rs. 64.98 and 85.15 lakhs have been claimed in exhibit U 8 are undoubtedly parts of the post 1944 block and the amounts claimed for them are very much more than Rs. 50 lakhs.
It is nevertheless clear that 'the items in exhibit U 8 do not include a claim for rehabilitation for all the blocks of the appellant, and it is not surprising either, because a claim for the rehabilitation of all the blocks had been separately made by the appellant in the earlier proceedings under exhibit C 3.
Thus there can be no doubt that neither the report submitted by the appellant before the Tariff Commission nor the estimate given by exhibit U 8 was prepared under the formula; and so any disparity in the amounts claimed in the two earlier documents cannot be seriously pressed into service against the appellant when it seeks to make a claim for rehabilitation strictly in accordance with the formula.
We must, therefore, hold that the tribunal was in error in coming to the conclusion that by reason of its previous conduct the appellant could not be allowed to place its claim for rehabilitation at a figure higher than Rs. 192 lakhs in the relevant year.
In this connection it would be pertinent to remember that in dealing with the employer 's claim for rehabilitation the tribunal is called upon to assess respective values of the relevant factors on hypothetical and empirical considerations, and so it may generally not be useful or wise to take recourse to strict legalistic principles like estoppel in deciding this question and indeed all material questions in industrial adjudications.
Does the formula need to be revised, and should it be revised and reconstructed ? That is the question 948 which we must now consider.
It appears that some tribunals have taken the view that the rigid working of the formula may defeat its object of recognising the social justice of labour 's claim for bonus and so they have made suitable adjustments in its operation.
It is this approach which has raised the larger issue of principle in the group of appeals which have been placed for disposal before the Constitution Bench.
So we must examine this question in its broad aspects and if we decide not to change the formula we must state what, in our opinion is the content of the different items mentioned in the formula and how they should be calculated and mutually adjusted.
Let us first set out the case as it has been made for changing the formula.
It is 'urged that though the formula purports to recognise the principle of social justice on which labour 's claim for bonus is based, it does not accord to the said claim the high priority it deserves.
Social justice has been given a place of pride in the preamble to the Constitution and it has been enshrined in the Directive Principles under articles 38 and 43.
Since 1950, ideas about social and economic justice have made an appreciable progress and they require the readjustment of priorities prescribed by the formula in favour of the claim for bonus.
It is also contended that experience in industrial adjudication during the last eight years and more shows that employers are becoming increasingly more rehabilitation conscious and their appetite for the provision of rehabilitation is fast growing from year to year.
In the present case, for instance, though the appellant occupies a dominant position in its line of trade and though it makes large profits, it has made such a tall claim for rehabilitation that if the said claim is allowed the working of the formula leaves no available surplus from which bonus can be granted to labour.
The appellant has no doubt paid bonus for three months and it is unlikely that the appellant would depart from its practice of paying the said bonus even in future; but that does not affect the 949 position that in the light of the appellant 's claim for rehabilitation the working of the formula would not justify the grant of any bonus to labour.
This shows that the notional claim for rehabilitation which an employer can make under the formula tends to be completely divorced from the reality or actuality of the need of rehabilitation; and that needs to be corrected.
Besides, it is said, that the theory that the trading profits of the industry must provide for the whole of the rehabilitation expenses is not universall accepted by enlightened and progressive businessmen and economists.
In this connection reliance is placed on the observations of F. R. M. de Paula in his " Principles of Auditing " that " the object of depreciation is the replacement of original investment capital and that an increase in replacement cost is an important matter and means that additional capital is required in order to maintain the original earning capacity ".
It is also pointed out that the Institute of Chartered Accountants in England and Wales, in its recommendations made in 1949 under the heading " Rising price levels in relation to accounts " has pointed out that " the gap between historical and replacement costs might be too big to be bridged by a provision made for replacement spread over a period of years either by way of supplementing the depreciation charges or by setting up in lieu of depreciation a provision for renewals based on estimated replacement costs ".
It is therefore suggested that in revising the formula the claims for rehabilitation should be fixed at a reasonable amount and industry should be required to find the balance from other sources and if necessary from its share in the available surplus.
In this connection it is pointed out that when the Labour Appellate Tribunal evolved the formula it was dealing directly with the needs of the textile industry and there was no dispute that the plant and machinery of the textile industry had become old and obsolescent and needed immediate replacement, rehabilitation and modernisation.
It is doubtful whether, in giving priority to the claim for rehabilitation in the 950 context of the needs of the textile industry with which the appellate tribunal was concerned, it really intended that rehabilitation should be claimed 'by every industry on theoretical considerations whether or not the said claim was justified by its actual or practical need for rehabilitation.
In substance the argument is that the Full Bench of the Labour Appellate Tribunal evolved its formula in order that labour may get a reasonable share in the available surplus and may thereby receive assistance in filling up the gap between its actual wage and the living wage which it looks forward to receive in due course; and if it is found that, in working out the items which are treated as prior charges, in a majority of cases the formula leaves no available surplus, then its main object is frustrated and that is the justification for revising it and readjusting its priorities.
In support of this view reliance has also been placed on the recommendations of the Committee on 'Profit sharing '.
This Committee had been appointed in 1948 to advise the Government of India " on the principles to be followed for the determination of (a) fair wages to labour, (b) fair return to capital employed in the industry, (e) reasonable reserves for the maintenance and expansion of the undertaking, and (d) labour 's share of the surplus profits, calculated on a sliding scale normally varying with production, after provision has been made for (b) and (c) above ".
The Committee viewed its problem from three im portant angles, viz., " profit sharing as an incentive to production, profit sharing as a method of securing industrial peace, and profit sharing as a step in the participation of labour in management ".
The Committee recognised that putting back profits into the industry is one of the most useful forms of capital investment and this should be encouraged and it recommended that a figure of 20% for reserves should be generally aimed at, though it considered that, as a first charge, 10% of the net profits should be compulsorily set aside for reserves, leaving it to the good sense of the management to allocate the balance or more out of their own share of surplus profits.
In regard 951 to the labour 's share in the surplus profits, the Committee stated that, having due regard to the conditions prevailing in the industry selected for an experiment in profit sharing, it had come to the conclusion that labour 's share should be 50% of the surplus profits of the undertakings.
It is a matter of common knowledge that so far Government have not thought it desirable, expedient or possible to legislate in this matter in the light of the recommendations made by this Committee; but it is suggested that these recommendations afford a rational basis for reconstructing the formula.
It may be conceded that there is some force in some of the arguments urged in support of the plea that the formula should be revised and its priorities should be readjusted and redefined; but, on the other hand, we cannot ignore the fact that on the whole the formula has worked satisfactorily in a large number of industries all over the country.
Except for a few cases, particularly in Bombay, where some of the tribunals have taken the view that, in its rigid form, the formula has become unworkable from the point of view of labour, in a majority of cases industrial disputes arising between employers and their workmen in regard to bonus have been settled by tribunals on the basis of this formula; and it would not be unreasonable or inaccurate to say that by and large labour 's claim for bonus has been fairly and satisfactorily dealt with.
The main source of contest in the working of the formula centres round the industry 's claim for rehabilitation; but, as we shall presently point out, if this claim is carefully scrutinised and examined in the light of evidence which the employer has to produce in support of his claim, even the settlement of this item would, as it is intended to, invest the tribunal with sufficient discretion to make the working of the formula elastic enough to meet its two fold object of doing justice both to industry and labour.
It is true that in the working of the formula employers sometimes make an attempt to add items to the list of prior claims.
In The State of Mysore vs The 121 952 workers of Kolar Gold Mines (1), it was urged before this Court by the industry that it was a wasting industry and as such it needed special consideration.
The contention was that for the prosperity and longevity of the industry a special provision for the prospecting of new ore has to be made and that should be added as an additional item in the list of prior charges.
This argument was, however, rejected and it was held that the special features of the industry would be taken into account in determining the amount which could be reasonably claimed under rehabilitation.
This decision shows the reluctance of this court to vary or add to the formula which oil the whole has so far worked fairly satisfactorily.
The theory that the whole of the rehabilitation charges need not come out of the trading profits of the industry does not appear to be generally accepted.
As has been observed by Paula himself: " In the past the accepted principle has been that the main object of providing for the depreciation of wasting assets is to recoup the original capital invested in the purchase of such assets.
As part of the capital of the concern has been invested in the purchase of these assets, therefore, when their working life comes to an end, the earning capacity of these assets ceases.
Thus they will become valueless for the purposes of the business, and the original capital sunk in their acquisition, less any scrap value, will have been lost.
Hence, in order to keep the original capital of a business intact, if any part thereof is invested in the purchase of ' wasting assets, revenue must be held back by means of depreciation charges to profit and loss account, in order to replace the capital that is being lost by reason of the fact that it is represented by assets that are being consumed or exhausted in the course of trading or seeking to earn income It is also stated by the same author that " in all cases where One of the direct causes of earning revenue is gradually to consume fixed assets of wasting nature, the depreciation of such assets should be provided for out of revenue " (3).
It is true (1) ; (2) F.R.M. de Paula 's Principles of Auditing ', 1957, P. 136.
(3) Ibid, p. 138. 953 that the author recognises that " owing to the very considerable increase in the price level since the termination of the 1939 45 war, industry is finding its original money capital insufficient for its needs.
Thus the cost of replacement of fixed assets has greatly increased and in addition, further working capital is required to finance a given volume of production.
Many economists, industrialists, and accountants contend that provision should be made, in arriving at profits, for this increased capital requirement ".
Having noticed this view the author adds that " at the time of writing this matter is still being debated and final decisions have not yet been reached ", and he concludes that " until a final solution of this complex problem is reached it would be inadvisable for the auditor to act on any principle other than that recommended by the Institute "(1); and that principle appears to be that depreciation should be provided for out of revenue.
Besides, it must be borne in mind that, in adjusting the claims of industry and labour to share in the profits on a notional basis, it would be difficult to repel the claim of the industry that a provision should be made for the rehabilitation of its plant and machinery from the trading profits.
On principle the guaranteed continuance of the industry is as much for the benefit of the employer as for that of labour; and so reasonable provision made in that behalf must be regarded as justified.
The recommendations made by the Committee on Profit sharing ' cannot be of much assistance because they raise questions of policy and principle which Legislature can more appropriately consider.
If the Legislature feels that the claims for social and economic justice made by labour should be redefined on a clearer basis it can step in and legislate in that behalf.
It may also be possible to have the question comprehensively considered by a high powered commission which may be asked to examine the pros and cons of the problem in all its aspects by taking evidence from all industries and all bodies of workmen.
The plea for the revision of the formula raises an issue (1)F.R.M. de Paula 's Principles of Auditing ', 1957, P 80.
954 which affects all industries; and before any change is made in it, all industries and their workmen would have to be heard and their pleas carefully considered.
It is obvious that while dealing with the present group of appeals it would be difficult, unreasonable and inexpedient to attempt such a task.
That is why we think that labour 's claim for bonus should be decided by tribunals on the basis of the formula without attempting to revise it.
Whilst we are not prepared to accede to the argument that the formula should be revised, we wish to emphasise that the formula is elastic enough to meet reasonably the claims of the industry and labour for fairplay and justice.
In its broad features it recognises the claims of the industry and tabulates them under different items as prior charges, and then provides for the distribution of available surplus between the labour, the industry and the shareholders.
The items specified in the formula have to be worked out notion ally on theoretical grounds; in determining the content of each one of the items it is therefore essential to scrutinise and weigh carefully all the relevant and material facts.
If the content of each item is determined objectively in the light of all relevant and material facts, the tribunals would generally find it possible to make reasonable adjustments between the rival claims and provide for a fair distribution of the available surplus.
In this sense it is necessary to treat the formula as elastic and not rigid in working out detailed calculations under it.
We have no doubt that if the industry and labour genuinely desire to settle the disputes as to bonus without the intervention of the conciliator or the adjudicator, the formula would help them to arrive at a reasonable settlement.
If the employer does not make an unduly inflated claim under the items which safeguard industry 's interests, and if workmen do not make an exaggerated demand for bonus, it would normally not be beyond the co operative effort of the parties to arrive at a reasonable figure which should be paid to labour by way of bonus from year to year.
It is unnecessary to emphasise that industrial disputes 955 settled amicably are in the interest of both capital and labour.
Amicable settlements of such disputes lead to ' peace, harmony and co operation between capital and labour and that invariably helps more production which is a matter of great national importance at present.
But unfortunately, in many cases, both the industry and labour do not appear to be too keen on settling ' these disputes amicably, with the result that claims for bonus give rise to disputes year after year and inevitably the machinery under the Industrial Disputes Act is set in motion.
Conciliation efforts are made but they do not succeed; then reference is made under section 10 of the Act and the dispute is taken before the tribunal; since both the parties are not in a mood to co operate with each other, over statements are made on both sides, allegations are met by counter allegations and they are sought to be supported by evidence.
In such a case the tribunals must examine the rival contentions and scrutinise the evidence adduced by the parties objectively and in a judicial manner.
If proper evidence is led and it is judicially weighed, the tribunal would be able to work the formula in a reasonable manner and arrive at a result which would be substantially in conformity with the object underlying the formula.
It is obvious that, in making the relevant calculations under the items of prior charges specified in the formula, the tribunals should have a clear idea as to the content of each one of the said prior charges; and so it is necessary to examine carefully this aspect of the matter.
We have already noticed that the formula for awarding bonus to workmen is based on two considerations; first that labour is entitled to claim a share in the ' trading profits of the industry because it has partially contributed to the same; and second that labour is entitled to claim that the gap between its actual wage and the living wage should within reasonable limits be filled up.
The concept of labour 's contribution to the profits of the industry has reference to the contribution made by the employer and the workmen taken together as a class; and so it would 956 not be relevant to, inquire which sectionof labour has contributed to what share of the profits.
The board idea underlying this concept is that the capital invested by the employer and labour contributed by workmen jointly produce the profits of an industry.
This does not necessarily mean that, in theindustry in question, labour must actually manufacture or produce goods, though, in the case of manufacture and,production of goods contribution of labour.
is patent and obvious.
In the Burma Shell Oil Storage and Distributing Co., of India Pd.
vs Their, Workmen(1) the Labour Appellate Tribunal rejected the employers ' claim that, since workmen employed by them did not manufacture or produce any goods but merely assisted them in the distribution Of oil, they were not.
entitled to claim any bonus under the formula.
It is wrong to say ", observed the labour Appellate, Tribunal, that because the employees of these oil companies merely market the oil they have not earned the right to any bonus".
It was also Pointed out that the workmen had to perform :duties of various intensity for marketing an article of public.
utility,.
and in that sense they contribute to, production according to the concept of economists".
So were the clerks held entitled to bonus for,their duties in the, general business of the concern though, they had nothing to do with the physical act of marketing the commodity it was also emphasised that the other object of granting the bonus was to help the workmen to fill up the gap between their actual wages and the living wage.
Thus in dealing with the claim for bonus made by workmen the two fold basis of the formula must always be kept in mind.
The working of the formula begins with the figure of gross profits taken from the profit and loss account which are arrived at after,payment of wages and dearness allowance to the employees and other items of expenditure.
As a general rule the amount of gross profits thus ascertained is.
accepted without submitting the statement of the ' profit and loss 'account to a close scrutiny.
If, however, it appears that (1)(1953) 957 entries have, been made on the debit side, deliberately and mala fide to reduce the amount of gross profits, it would be open to the tribunal to examine the question and if it is satisfied that the impugned entries have been made mala fide it may disallow them.
This principle has been recognised by the Labour Appellate Tribunal when it observed, for instance, in M/s. J. K. Cotton Manufacturers Ltd., Kanpur vs Their Workmen (1) that if managing agents deliberately divert profits to the selling, agents with a view to deprive labour of their bonus and pay commission to the selling.
agents at high rates then certainly the matter must be taken into consideration in the determination of available surplus balance " It would likewise be open to the parties to claim the exclusion of items either on the credit or on the debit side on the ground that the impugned items are.
wholly extraneous and entirely unrelated to the trading profits of the year.
In considering such a plea the tribunal must resist the temptation of dissecting the balance sheet too minutely or of attempting to reconstruct it in any manner.
It is only glaring cases, where the impugned item may be plently and obviously extraneous that a plea for its exclusion should be entertained.
Where the employer makes profits in the course of carrying on his trade or business, it would be unreasonable to inquire whether each one of the, items of the said profit is related to the contribution made by labour.
In such matters, the tribunal must take an overall, practical and commonsense view.
Thus it ma be stated that as a rule the gross profits appearing at the foot of the statement of the profit, and loss account should be taken a,% the basic figure while working out the formula.
In, working out the formula the other important fact which should not be ignored is, that the formula proceed 's to deal with the labour 's claim for bonus on the basis that the relevant year for which bonus is claimed is a self sufficient unit and the appropriate accounts have, to.
be made on the notional basis in respect of the said, It is substantially because (1)[1954] L.A.C. 716, 745.
(Also vide , 421.) 958 of this basic assumption that if an employer receives during the bonus year a refund with respect to the excess profits tax paid by him in a previous year the amount of refund is not included on the credit side.
In Model Mills etc. ' Textile Mills, Nagpur vs The Rashtriya Mill Mazdoor Sangh (1) the Labour Appellate Tribunal observed that according to the.
formula, the income tax is to be deducted as a prior charge on trading results of the year just as much as the bonus is to be ascertained upon the trading results of the year.
The concession made by the income tax authorities in making a refund of the excess profits tax already paid by the employer is intended to aid a concern on account of past losses and so it has nothing to do with the formula.
The same principle governs cases where owing to a loss incurred in the previous year or years the employer is entitled to claim allowance for adjustment under section 24 (2) of the Income tax Act during the bonus year; and so it is held that the allowance for adjustment which the employer claims cannot be taken into account in determining the amount of income tax payable on the profits of the bonus year under the formula.
In Bennett Coleman and co., Ltd. vs Their Workmen (2) the Labour Appellate Tribunal rejected the contention raised by labour that since under section 24 (2) the employer would not be liable to pay tax during the bonus year no provision for payment of tax should be made in working out the formula.
The Labour Appellate Tribunal pointed out that the fact that the employer was not required to pay tax during the bonus year was the result of the adjustment of the previous year 's unabsorbed depreciation and losses against current year 's profit, and that had no relevance in determining the available surplus from the trading profits of the bonus year.
The same view has been taken in several other decisions to which the Labour Appellate Tribunal has referred.
In our opinion, once it is realised that in working out the formula the bonus year is taken as a unit self sufficient by itself, the decisions of the Labour Appellate Tribunal in regard (1) (1955) I J. 534, 540.
(2) (1955) I J. 60. 959 to the refund of excess profits tax and the adjustment of the previous year 's depreciation and losses against the bonus year 's profits must be treated as logical and sound.
Having ascertained the amount of gross profits, the first item of deduction relates to depreciation.
The propriety of this deduction was not questioned before the Labour Appellate Tribunal which evolved the formula; but the content of the item of depreciation became a matter of controversy subsequent to 1950.
After 1948, section 10 (2) (vi) of the Income tax Act has provided for initial and additional depreciation besides the statutory depreciation which was already admissible.
In other words, depreciation allowed under the Income tax Act now consists of what may be called the statutory normal depreciation calculated under r. 8 as well as initial depreciation and additional depreciation.
The allowance of these depreciations is an exception to the general rule that the income has to be taxed without reference to the diminution in the value of the capital.
Under the amended provision of section 10 (2) (vi) of the Income tax Act the employers began to claim that from the gross profits all the depreciations admissible under the Income tax Act should be debited; and this claim was upheld by some tribunals and rejected by others.
This conflict of decisions led to confusion; and so a Full Bench of the Labour Appellate Tribunal was constituted to decide this and other points in the case of the U. P. Electric Supply Co., Ltd., etc.
Electricity Supply Undertakings vs Their Workmen(1).
The Full Bench held that " the depreciation which should be deducted from the gross profits in working the formula is annual depreciation allowable under the provisions of the Income tax Act including the multiple shift depreciation; it also held that the initial depreciation and additional depreciation which were also allowed under the Income tax Act are abnormal additions to the income tax depreciation designed to meet particular contingencies and for a limited period; (1) (1955) II J. 431.
122 960 and so it would not be fair to the workmen that these two depreciations should be rated as prior charges before the available surplus is ascertained ".
Apparently some doubt arose as to what exactly was allowed to be deducted under this Full Bench decision; and two of the members of the Full Bench took occasion to clarify the position in Surat Electricity Co. 's Staff Union vs Surat Electricity Co., Ltd. (1).
This decision shows that what the Full Bench intended to treat as depreciation for the purpose of the formula was a notional amount of normal depreciation; in order to avoid any future doubt or confusion, the judgment in the case has set out the manner in which this notional normal depreciation has to be worked out.
Since this decision was pronounced it is the notional normal depreciation that is deducted from the gross profits in working the formula.
It seems to us that the view taken by the Full Bench is wholly consistent with the basic idea of social justice on which the original formula is founded.
The relevant provisions of the Income tax Act allowing further depreciation are based on considerations which have no relevance to the original formula; indeed, as the Full Bench has pointed out, if the said two items of depreciations are allowed to be deducted from the gross profits it would in a majority of cases defeat the object of the formula itself.
We would accordingly hold that the depreciation which has to be deducted from the gross profits should be the notional normal depreciation as explained in the case of Surat Electric Co., Ltd. (1).
The balance obtained after deducting depreciation from the gross profits is then taken as the amount on which calculations have to be made about the income tax payable for the bonus year.
This item gives rise to a controversy between the parties.
It is urged for the employers that in determining the amount payable by way of income tax on this balance the tribunal should not take into consideration allowances which are made under the relevant provisions of the Income tax Act.
There is no doubt that in taxing the employer for the bonus year the Income tax Act would (1)(1957) II L. L. J. 648.
961 make allowance not only for the normal depreciation but also for the initial and additional depreciations; but the argument is that the income tax should be determined nationally without reference to the said allowances.
In support of this argument it is further urged that though the employer may obtain credit for the two further depreciations for some years, later on the said allowances will not be made and his liability ' to pay tax would be correspondingly increased.
It is but fair, so the argument runs, that the employer should be allowed to create a fund of income tax reserve from which he would be able to bear his tax liability in future as and when it is bound to increase.
On the other hand it is contended on behalf of workmen that while determining the amount of tax payable for the bonus year the tribunal cannot ignore the concession given to the employer by the Income tax Act by making the allowance of two further depreciations.
What the employer claims is not the amount of tax payable during the bonus year but much more in addition in order to build up a reserve and this notion of building up a tax reserve for meeting future, though certain, increased tax liability is foreign to the basic idea of the formula.
For making calculations under the formula the bonus year is taken as a unit and all items specified in the formula should be worked out on that basis.
That is why the refund of the excess profits tax received in the bonus year is excluded from consideration and the right of the employer to adjust his previous year 's losses and depreciation against the trading profits of the bonus year is likewise ignored.
So too the fact that the employer may have to pay increased taxes in future years must be treated as irrelevant.
That in brief is the case for workmen.
In our opinion, having regard to the basis of the formula and the manner in which the other items of the formula are required to be worked out, it would not be reasonable to allow the employer to claim under the item of income tax an additional amount is respect of the two further depreciations which are expressly allowed to him under section 10(2)(vi) of the Income tax 962 Act.
It is clear that the amount determined under this item would not represent the actual tax which the income tax department will recover from the employer.
In that sense it would always be a notional amount ; but in calculating even this notional amount it would be unfair and unjust to ignore the concessions allowed to the employer by section 10(2)(vi).
The creation of a fund of income tax reserve may conceivably lead to unnecessary complications.
Besides, if on principle the further depreciations allowed by the Income tax Act are treated as inadmissible under the formula and so are excluded from consideration, it would be substantially inconsistent with the object of such exclusion to allow the employer to claim tax in respect of the said amounts of the two depreciations.
It is clear that even if the amount of income tax is determined after taking into account the concession given to the employer by section 10(2)(vi) it would work no hardship to the employer, for the simple reason that in future years when these concessions cease to be operative and his liability to pay the tax correspondingly increases, he would be entitled to claim the amount of income tax which would then be payable by him.
This method of calculating income tax is thus fair to both the parties and it has besides the merit of being consistent with the basic character of the formula.
It would be relevant in this connection to remember that, though in most of the industries workmen continue to be employed from year to year, nationally and on principle, the claim for bonus for a particular year is made on behalf of workmen employed during the said year; and in that sense, the relevant calculations have to be made with the bonus year as a unit.
That is why considerations of future tax liability of the employer are foreign to the calculation under the formula.
We would, therefore, bold that in calculating the amount of tax payable for the bonus year the tribunals should not take into account the concessions given by the Income tax Act to the employers under the two more depreciations allowed under section 10(2)(vi) of the Income tax Act.
This point has been considered by this Court in 963 Sree Meenakshi Mills, Ltd. vs Their Workmen (1) where has upheld the view taken by the Full Bench the Labour Appellate Tribunal in the case of the U. Electric Co., Ltd., etc., Electricity Supply Undertakings (2) and has directed that in determining amount of income tax payable during the bonus yea the further depreciations permissible under the income tax Act should be taken into account.
We would only like to add that in that case this Court had occasion to say what exactly the normal depreciation meant; but it is clear that the normal depreciation mentioned in the judgment was not intended to mean anything other than the notional normal depreciation as explained by the Labour Appellate Tribunal in the case of the Surat Electric Co., Ltd. (3 ).
The amount income tax thus determined has then to be deduct( as a prior charge.
The next step in the working of the formula related to the deduction of an appropriate amount in respect of the return on paid up capital as well as working capital.
We have already noticed that the formula provides generally for the payment of interest at 69 per annum on the paid up capital and at 2% on worldling capital.
Subsequent decisions show that the tribunals do not regard the said rates as inflexible and they have suitably modified them in the light of the relevant circumstances in each case.
We think that this is a correct approach and that it is necessary to fix the rates of interest on the two items of paid up capital and working capital according to the circumstances of each case.
In this connection it may be added that ordinarily industrial tribunals awards interest at the rate of 6% per annum on paid up capital.
In Workmen of Assam Co., Ltd. vs Assam Co., Ltd. this Court held that interest allowed by the tribunal a 7% on paid up capital and confirmed by the Labour Appellate Tribunal was justified because " an industry connected with agriculture like the tea industry is exposed to greater risks than any other industry such (1) ; (3) (2) (1955) II L.L.J. 431.
(4) 964 weather, pests in the plants and gradual deterioration of the soil ".
On the other hand, in Ruston and ornsby (India) Ltd. vs Their Workmen (1) the Labour appellate Tribunal allowed only 4% return on the art of paid up capital represented by bonus shares for the year in which such shares were issued and ,)served that ,for subsequent years no distinction between it and other paid up capital represented by paid up shares should be made ".
Similarly, in regard reserves or depreciation used as working capital interest has been allowed either at 4% or at 3% or ,Ten at 2% according to the relevant circumstances.
in the Mill Owners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh (2) the Labour Appellate Tribunal has observed that " as we have said before, there is no fixed rule as to the rates of such return (on capital) and each case must depend on its individual acts.
We have in appropriate cases given as high as % but in case of the mills the Full Bench has considered that the equivalent of 2% would be reasonable nd we propose to retain it at that level for the present ".
In Tea and Coffee Workers Union vs Brooke Bond (India) (Private) Ltd. (3) the Industrial Tribunal as considered the previous decisions on the question of the return on working capital and held that, in the case before it, it would be an adequate return on the working capital if 3% interest is allowed because there were no special reasons existing for allowing a higher ate.
In dealing with this aspect of the matter it is relevant to point out that no distinction has been made )y tribunals between reserves used as working capital and depreciation fund similarly used.
In the Mill Owners Association, Bombay vs The Rashtriya Mill Mazdoor Sangh (2) (page 523) when labour objected to the depreciation fund earning any return even if it was utilised in or about the business of the year, the labour Appellate Tribunal overruled the objection and observed that " no essential difference could be made between the depreciation fund and any other (1) (2) 522.
(3)(1958) 965 fund belonging to the company which could be invested so as to earn a return ".
It is thus clear that what is material is not the origin of the fund.
It is the fact that the fund in the hands of the concern has been used as working capital that justifies the claim for art adequate return on it.
We think it is commonsense that if the concern utilises liquid funds available in its hands for the purpose of meeting its working expenses rather than borrow the necessary amounts it is entitled to claim some reasonable return on the funds thus used.
It is of course necessary that the employer must show that the amount under the depreciation fund was in fact available and that it has actually been used as working capital during the relevant year.
What return should be allowed on such funds must inevitably be a question of fact to be decided by the tribunal in its discretion in each case in the light of the relevant circumstances.
It would thus be noticed that in working out these two items under the formula there is no fixed or rigid rule about the rate of interest which can be claimed and awarded.
It is also clear that if any fund is used by the employer for the purpose of expanding his business he is not entitled to claim any return on such fund under those items.
In the case of the U. P. Electric Supply Co., Ltd. etc.
Electricity Supply Undertakings (1) the Full Bench of the Labour Appellate Tribunal held that " considering all the factors presented to them they did not think that a case had been made out for giving a special prior charge in the shape of return on the reserves utilised for expansion ".
When the amounts awardable to the employer under these two items are determined they have to be treated as prior charges in the calculation of available surplus under the formula.
The original formula referred to replacement, rehabilitation and modernisation of the plant and machinery.
Soon after the formula was evolved a dispute arose as to whether the industry was entitled to claim rehabilitation for its buildings as well and it was held that " a claim for rehabilitation for buildings had to (1) (1955) II L.L.J. 431.
966 be treated as a prior charge just like the claim for the rehabilitation of plant and machinery " (1).
:This position is not disputed before us, and we think rightly.
That takes us to the item of rehabilitation and it is this item which poses a very difficult problem.
We have already noticed that the object of providing depreciation of wasting assets in commercial accounting is to recoup the original capital invested in the purchase of such assets; but the amount of depreciation which is allowed under the formula can hardly cover the probable cost of replacement.
That is why the formula has recognised the industry 's claim for rehabilitation in addition to the admissible depreciation.
Since the Second World War prices of industrial plant and machinery have registered a continuous upward rise and its inevitable consequence has been a proportionate rise in the claim for rehabilitation.
In considering the claim for rehabilitation it is first necessary to divide the blocks into plant and machinery on the one hand and other assets like buildings, roads, railway sidings, etc., on the other.
Then the cost of these separate blocks has to be ascertained and their probable future life has to be estimated.
Once this estimate is made it becomes possible to anticipate approximately the year when the plant or machinery would need replacement; and it is the probable price of such replacement on a future date that ultimately decides the amount to which the employer is entitled by way of replacement cost.
This problem can be considered item wise where the industry does not own too many factories and item wise study of the plant and machinery is reasonably possible; but if the industry owns several factories and the number of plants and machines is very large it would be difficult to make a study of the replacement costs item wise, and in such a case the study has to be blockwise.
In either case what the tribunal has to estimate is the probable cost of replacement of plant and machinery at the time when such replacement would become due.
It would be clear that the decision of this question would inevitably depend upon several uncertain (11) , 522.
967 factors.
The estimate about the probable life of the plant and machinery is itself to some extent a matter of guess work and any anticipation, however intelligently made, about the probable trend of prices during the intervening period would be nothing but a guess.
That is how, in the determination of this problem, several imponderables face the tribunals.
One of the points which raises a controversy in this ' connection is: What level of prices should the tribunal consider in making its calculations about the probable cost of replacement ? Would it be the price level prevailing during the bonus year or that prevailing at the time when the tribunal holds its enquiry ? Prima facie it may appear that it is the price level prevailing in the bonus year that should be treated as relevant; but if the relevance of the evidence about the price level is limited only to the bonus year, it may hinder rather than help the process of a satisfactory determination of the probable cost of replacement.
What the tribunal has to do in determining such cost is to project the price level into the future and this can be more satisfactorily done if the price level which has to be projected into the future is determined not only in the light of the prices prevailing during the bonus year but also in the light of subsequent price levels.
It seems to us that in order to enable the tribunal to make an estimate in this matter as near actualities or realities as possible it is necessary that the tribunal should be given full discretion to admit all relevant evidence about the trend in price levels.
The price level during the bonus year would no doubt be admissible; but that alone should not be taken as the basis for decision.
That is the view which the tribunals have taken in a majority of cases in dealing with the question of rehabilitation and we do not think that there is any justification for disturbing the usual practice in that behalf.
The problem of determining the probable cost of replacement itself is very difficult; but the difficulty is immeasurably increased when it is remembered that the claim for rehabilitation covers not only cases of 123 968 replacement pure and simple but of rehabilitation and modernisation.
In the context rehabilitation is distin guished from ordinary repairs which go into the working expenses of the industry.
It is also distinguished from replacement.
It is quite conceivable that certain parts of machines which constitute a block may need rehabilitation though the block itself can carry on for a number of years; and this process of rehabilitation is in a sense a continual process.
Unlike replacement, its date cannot always be fixed or anticipated.
So with modernisation; and all these three items are included in the claim for rehabilitation.
That is why we think it is necessary that the tribunals should exercise their discretion in admitting all relevant evidence which would enable them to determine this vexed question satisfactorily.
At this stage it is relevant to remember that the claim under this item is confined to rehabilitation, replacement and modernisation.
It is common ground that expansion of the plant and machinery is not included in this item; but in several cases it is not easy to distinguish between modernisation of the plant and machinery and its expansion.
It is urged that an expert can, if he so chooses, make an attempt to include expansion within what he may describe as modernisation by clever use of technical words and details, and that it is precisely this aspect of the matter which has to be carefully examined by the tribunal.
The industry sometimes claims that a plant may become obsolescent because it has become out of date and has to be substituted by a new modern plant.
Is the introduction of the new modern plant in such circumstances an item of expansion or mere modern isation ? It is difficult to lay down any general tests which would govern the decision of this question.
If it appears fairly on the evidence that the introduction of the modern plant or machine is in substance an item of expansion of the industry, expenses incurred in that behalf have to be excluded.
On the other hand, if the employer had to introduce the new plant essentially because the use of the old plant though capable of giving service was uneconomic and other 969 wise wholly inexpedient, it may be a case of modernisation.
Similarly, if by the introduction of a modern plant or machine the production capacity of the industry has appreciably increased, it would be relevant for the tribunal to consider in an appropriate case whether it would be possible to apportion expenses on the basis that it is a case of partial modernisation and partial expansion.
If, however, the increased production is not of a significant order it may be regarded as incidental to replacement or modernisation and the question of apportionment may not arise.
We have set out these considerations in order to emphasise the fact that in dealing with the problem of rehabilitation the tribunal must carefully examine the evidence and consider the employer 's claim in all its aspects before determining the amount which should be allowed by way of rehabilitation as a prior charge in the relevant year.
The decision on the question of the probable cost of rehabilitation is always reached by adopting a suitable multiplier.
This multiplier is based on the ratio between the cost price of the plant and machinery and the probable price which may have to be paid for its rehabilitation, replacement or modernisation.
Since there has been a continuous rise in the prices of industrial plant and machinery the older the plant which needs rehabilitation the higher is the multiplier.
That is why there is always a competition between industry and workmen on this point.
Industry is sometimes tempted to keep its old pre 1939 block alive with a view to claim a higher multiplier which gives it a larger amount of rehabilitation expenditure; whereas workmen urge that the old pre 1939 block has been nominally kept alive as a device and so press for a lower multiplier which would reduce the claim for rehabilitation.
Once a proper multiplier is adopted in respect of each one of the blocks the first step in determining the probable cost of rehabilitation can be easily taken.
It then becomes a matter of mere arithmetical calculation.
At this stage the divisor steps in.
The total amount required for rehabilitation which is determined by the 970 application of a suitable multiplier in respect.
of each block has to be divided by a suitable divisor in respect of each block in order to ascertain the annual requirement of the employer in that behalf year by year.
In the case of the divisor the employer seeks for a lower divisor whereas workmen claim a higher divisor and this contest has to be decided by the tribunal by reaching a fair conclusion on the evidence before it about the probable future life of the block in question.
It would thus be noticed that the adoption of a suitable multiplier and divisor plays a very important part in the decision of the vexed question about the employer 's rehabilitation claim.
Before actually awarding an appropriate amount in respect of rehabilitation for the bonus year certain deductions have to be made.
The first deduction is made on account of the breakdown value of the plant and machinery which is usually calculated at the rate of 5% of the cost price of the block in question.
Then the depreciation and general liquid reserves available to the employer are deducted.
The reserves which have already been reasonably earmarked for specific purposes of the industry are, however, not taken into account in this connection.
Last of all the rehabilitation amount which may have been allowed to the employer in previous years would also have to be deducted if it appears that the amount was available at the time when it was awarded in the past and that it had not been used for rehabilitation purposes in the meanwhile.
These are the broad features of the steps which have to be taken in deciding the employer 's claim for rehabilitation under the working of the formula.
" It would thus be clear that the decision of this major item in the working of the formula presents many difficulties; and in the last analysis its decision depends upon several hypothetical and empirical considerations.
It is, therefore, not surprising that in the case of Metal Box Co. of India, Ltd. vs Its Workmen (1) the Labour Appellate Tribunal has observed that " It is unfortunately too true that all (1) , 321. 971 our calculations as to rehabilitation may be disproved by subsequent events; it is impossible to say what the trend of world prices would be in the next fifteen years or which circumstances will intervene before that period to upset such calculations one way or the other, and no calculations of this kind are capable of mathematical accuracy.
We have to take a commonsense view of these matters and make an allowance ' for rehabilitation to the best of our ability and in accordance with our formula ".
It has also been observed by the Labour Appellate Tribunal that if an appropriate multiplier and divisor are determined " they are generally used because the tribunals take the view that the reconsideration of the said multiplier and divisor should not be hastily undertaken and could be justified only on the basis of a substantial change of a stable character extending or likely to extend over a sufficient number of years so as to make a definite and appreciable difference in the cost of replacement ".
(Vide: The Mill Owners Association Bombay vs The Rashtriya Mill Mazdoor Sangh (1) In dealing with the employer 's claim for rehabilitation tribunals have always placed the onus of proof on the employer.
He has to prove the price of the plant and machinery, its age, the period during which it requires replacement, the cost of replacement, the amount standing in the depreciation and reserve fund, and to what extent the funds at his disposal would meet the cost of replacement.
If the employer fails to lead satisfactory evidence on these points tribunals have on occasions totally rejected his claim for rehabilitation.
(Vide: Ganesh Flour Mills Co. Ltd., Kanpur vs Ganesh Flour Mills Staff Union, Kanpur (2); Bombay Gas Co. Ltd. vs Their Workmen (3); Dharangadhra Chemical Works Ltd. vs Its Workmen (4)).
If the tribunals are satisfied that the employer is deliberately and without a sufficient cause not taking any steps to rehabilitate, replace or modernise his machinery even though an appropriate allowance is made in that behalf from year to year, they may take into (1)(1952) (3)(1955) (2) (4) 972 account this conduct in determining the extent of such allowance in the bonus year in question.
Similarly if it appears that the employer has deliberately or mala fide refrained from rehabilitating or replacing his old machinery with a view to claim a higher multiplier in calculating the rehabilitating amount, the tribunals may take his conduct into account in determining the actual allowance of rehabilitation to him.
The main difficulty in deciding questions about reha bilitation arises from the fact that satisfactory evidence is not always placed before the tribunals and it is urged that the evidence given by the employers ' experts is interested and the workmen with their limited resources are not able to test the said evidence by adequate or effective cross examination.
In such a case the tribunal may, if it so desires and if it is possible, secure the assistance of assessors (vide section 38 of the Industrial Disputes Act).
It is therefore necessary that the tribunal should require the employer to give clear and satisfactory evidence about all the relevant facts on which it can make the requisite estimate.
The questions which the tribunal has to consider under this item are essentially questions of fact and its final decision on them is bound to be hypothetical, since it would be based on a fair evaluation of several circumstances which are by no means certain and which cannot be predicated with any amount of precision or even definiteness.
That is why it is of the utmost importance that all relevant and material evidence should be adduced by the employer and it should be properly tested by cross examination.
When that is done the tribunal must do its best to consider the said evidence objectively and reach its final decision in a judicial manner.
Once the amount of rehabilitation is thus determined the available surplus for the bonus year is ascertained and the final stage is reached when the tribunal has to give directions for the distribution of the said available surplus.
It is not seriously disputed that three parties are entitled to claim a share in this available surplus; labour claims bonus from it, the industry claims a share for the purpose of its expansion 973 and other needs, and share holders claim a share by way of additional return on the capital invested by them.
In the case of the Mill Owners Association, Bombay (1) where the formula was evolved, out of the available surplus of Rs. 2.61 crores 2.16 crores was distributed by way of bonus leaving a balance of 0.45 crores with the industry.
In the Trichinopoly Mills Ltd. vs National Cotton Mills Workers ' Union (2) the available surplus was found to be Rs. 34,660 and out of it Rs. 30,000 was ordered to be distributed as bonus to the workmen.
These two and other similar in stances, however, cannot be pressed into service for the purpose of evolving any general rule as to the ratio or proportion in which the available surplus should be distributed.
The ratio of distribution would obviously depend upon several facts: What are the wages paid to the workmen and what is the extent of the gap between the same and a living wage? Has the employer set apart any gratuity fund ? If yes, what is the amount that should be allowed for the bonus year ? What is the extent of the available surplus ? What are the dividends actually paid by the employer and what are the probabilities of the industry entering upon an immediate programme of expansion? What dividends are usually paid by comparable concerns ? What is the general financial position of the employer? Has the employer to meet any urgent liability such as redemption of debenture bonds ? These and similar considerations will naturally determine the actual mode of distribution of the available surplus.
In this connection labour 's claim to fill up the gap between the wage actually paid to it and the living wage has an important bearing on the decision of this point.
Industry 's claim for paying additional return on capital and for making additional provision for expansion would also have to be considered.
The fact that the employer would be entitled to a rebate of income tax on the amount of bonus paid to his workmen has to be taken into account and in many cases it plays a significant part in the final distribution.
Therefore, in our opinion once the (1) (2) 974 available surplus is determined, the tribunal should, in the light of all relevant circumstances, proceed to make an award directing the payment of a fair and just amount to labour by way of bonus.
If the formula is thus worked reasonably it would in a large majority of cases succeed in achieving its principal object of doing justice both to labour and industry.
Before we part with the question of working the formula it is necessary to observe that the practice adopted by some tribunals in giving the amount of bonus a priority in the calculations is not justified.
Logically it is only after all the prior charges have been determined and deducted from the gross profits that available surplus can be ascertained; and it is only after the available surplus is ascertained that the question of awarding bonus can be considered.
Some tribunals seem to work out nationally the amount of bonus which they think can be awarded and place that amount higher up in the process of making calculations before the income tax payable is determined.
The inevitable consequence of this procedure is to make the amount of tax proportionately less.
We wish to make it clear that this procedure should not be followed.
As we have already pointed out, in directing the distribution of the available surplus the tribunal has to take into account the rebate of income tax to which the employer is entitled on the amount of bonus paid to his workmen but that on principle is different from placing the amount of bonus immediately after depreciation in the working of the formula.
It has been urged before us by the respondents that the amount of rehabilitation as well as the amount of depreciation should be deducted from the gross profits before income tax payable is ascertained.
In this connection reliance is placed on the fact that in its judgment which evolved the formula the Labour Appellate Tribunal has at one place described rehabilitation as the first charge in priorities.
Having regard to the context in which the said statement is made it is clear that all that the Labour Appellate Tribunal wanted to emphasise was that the textile industry 975 with which it was directly concerned in the said case needed rehabilitation very urgently.
The final calculations made in the judgment give a clear indication as to how the formula has to be worked out.
We are, therefore, satisfied that rehabilitation cannot be given the high priority claimed for it by the respondents, We must now consider whether the tribunal was right in directing that overtime payment should be ' included in the calculation of the bonus which it has directed the appellant to pay.
Mr. Kolah contends that the direction to include overtime wages is contrary to the usual practice followed by industrial tribunals and it is also unsound on principle.
This dispute arises between the employer and the workmen in this acute form because the total amount of bonus is not determined logically after ascertaining the available surplus.
If the said amount is logically determined as indicated by us, then the question as to whether overtime wages should be included or not would really be a matter of dispute between workmen inter se because once the amount of bonus is determined, how it should be distributed between workmen inter se would cease to be a matter of direct concern to the employer.
Therefore we think that there would be no occasion for such a dispute between the employer and his workmen if the tribunals follow the logical method of determining the amount of bonus in the manner indicated by us.
On principle we do not think it would be fair to the workmen as a whole that overtime should be included in calculating the bonus which each workman should receive.
Workmen who do overtime get additional payment for such overwork.
If in addition to such payment they are allowed to include the said payment in their wages in calculating bonus to which they are entitled, obviously the gap between their actual wage and the living wage would be filled up to a larger extent than in the case of other workmen who do not receive such additional overtime payment.
Besides, if the payment of bonus proceeds on the broad consideration that it is due to the workmen for their contribution to the profits it would be unreasonable to make 124 976 a distinction between workmen and workmen on the ground that some have contributed more to the profit than others; and that is exactly what would follow if overtime workers are allowed to claim a larger amount of bonus than their other colleagues.
That is why we think that the tribunal was not justified in directing that the calculations of bonus should be made on the basis that overtime payments constituted a part of the basic wages of the employees.
The next point to consider relates to the return on paid up capital to which the appellant is entitled.
The tribunal has awarded to the appellant return at the rate of 6% on paid up capital and at 4% on the working capital.
The appellant claims a return at a higher rate on paid up capital whereas the respondents contend that the return should be paid on the paid up capital at a lower rate.
In support of its claim for a higher return the appellant has relied on the fact that it has consistently paid dividends at a reasonably low rate and it did not seek to make undue profits even during the years of war.
In this connection Mr. Kolah has invited our attention to a statement, exhibit C 1, showing the percentage of dividend to paid up capital and invested capital for the eighteen financial years 1936 37 to 1953 54 and he has asked us to contrast the low rates of dividend evidenced by it with dividends paid by other companies as shown by another document exhibit C 12.
He has also asked us to take into account the highest and the lowest quotation for the company 's shares in the Bombay Stock Exchange during the period 1949 55.
On the other hand Mr. Dudhia has urged that during the relevant year the appellant has capitalised Rs. 35.85 lakhs from the reserve fund and 175.45 lakhs from Premium on Shares Account by issuing one bonus share for every five shares held by the shareholders; and he argues that the tribunal was in error in allowing 6% on the paidup capital during the bonus year.
Incidentally Mr. Dudhia also relied, though halfheartedly, on the finding of the tribunal that the appellant had paid an inflated price for the pre 1939 block.
It is true that in one place the tribunal has made an observation to 977 this effect ; but it is clear that the said observation is inconsistent with its definite finding recorded earlier in the course of its judgment that it was not prepared to hold that the A. C. C. had inflated the capital invested by the merging companies by taking them over in 1936.
Therefore this part of Mr. Dudhia 's argument is invalid.
In our opinion, the question as to what return should be allowed to paid up capital in ' a given case must be left to be determined by the tribunal in its discretion having regard to all the relevant facts; and if the tribunal has in its discretion awarded 6% interest on the paid up capital we see no reason to interfere with its decisions It is clear that no question of principle or law is involved in the matter.
There is one more point which we must consider before we proceed to deal with the facts in the present case.
This point relates to the employer 's claim to treat the amount in the gratuity fund as a prior charge; and this claim has been allowed by the tribunal.
It appears that in M/S. Metro Motors vs Their Workmen (1) the Labour Appellate Tribunal observed that it was desirable in all cases to create a separate reserve fund for the payment of gratuity and it directed that the modest fund claimed by the employer for the year in question was a proper deduction from its profits.
The question which we have to decide is whether the allowance on this account should be treated as a prior charge in making the calculations under the formula.
There can be no doubt that, in a sense, the gratuity fund is created for the benefit of workmen and there should be no difficulty in recognising the appellant 's claim for the deduction of an appropriate amount on this account; but we think on principle it is desirable that no addition should be made to the list of prior charges recognised by the formula.
Even so when the available surplus is determined the tribunal ought to take into account the employer 's claim on account of the gratuity fund created for the benefit of his workmen and the amount which the tribunal may regard as a reasonable (1)(1952) II L.L.J. 205.
978 allowance in that behalf should be definitely borne in mind in finally deciding the amount which should be paid to the workmen by way of bonus.
This method will meet the employer 's claim adequately without making any addition to the list of priorities specified in the formula.
Mr. Dudhia contended that the tribunal should not have allowed Rs. 10 lakhs under this item but we do not think there is any substance in this contention.
Incidentally Mr. Dudhia has pointed out that in dealing with the appellant 's claim for a return on working capital the tribunal has made a mistake by including a further sum of 0.66 lakhs as return on investments.
Mr. Kolah has conceded that this is a mistake and so the return on the working capital would stand at 26.10 lakhs only.
It is now necessary to consider the evidence of Mr. Tongaonkar and decide the most controversial point of fact in dispute between the parties about the appellant 's requirements for rehabilitation.
Mr. Tongaonkar holds the Degree of Bachelor of Science of the London University, and he is also a Member of the Institution of Electrical Engineers, London.
He joined the appellant in November 1934, but before that he had nearly three years ' practical experience in England in various engineering firms; and on his return to India, he had joined the Dinshaw group of cement factories.
He continued to work with the said group until its merger with the appellant in 1936, when he was appointed by the appellant.
Mr. Tongaonkar is in charge of the department which deals with the construction of new cement factories, modernisation and extension of the existing cement factories, design and manufacture of cement machinery for A. C. C., and major engineering problems of the A.C.C. Since April 1956 he has been appointed the Controller of Planning and Development of the A. C. C.
He visits the A. C. C. factories very frequently and claims to be acquainted with the condition of the plant and machinery at all the A. C. C. factories.
There is no doubt that Mr. Tongaonkar is qualified to give evidence on the technical points which are relevant in 979 dealing with the question of rehabilitation.
Even so, in appreciating 'his evidence, it would not be unreasonable to bear in mind the fact that he is an officer employed by the appellant, and as such he is likely to be interested in supporting the claim for rehabilitation which the appellant has decided to make.
According to Mr. Tongaonkar, the average future life of the plant and machinery existing in 1939 would ' be approximately seven years from 1 8 1954.
Similarly, the approximate future life of the three other categories of blocks would be 13, 15 and 20 years respectively.
He has stated that in calculating the life of machinery, it is necessary to take into consideration, first the mechanical condition of the machinery, second whether it is efficient or has been rendered obsolete because new machinery of modern design with a considerably better efficiency has come into the market.
In other words, the probable useful life of the machinery may be prematurely determined by the emergence of more efficient machinery.
In support of this statement he has given some instances where the appellant 's plant or machinery had to be changed mainly for the reason that a new corresponding plant or machinery was more efficient and gave more satisfactory results.
However, stated generally,in the opinion of the witness, the average life of a cement plant taken as a whole would be 25 years if it is properly main tained.
Mr. Tongaonkar then gave evidence about the rise in prices of plant and machinery and he produced exhibit C 36 which is a statement showing the progressive increase in prices from pre war days up to 1955 56 of major items of machinery, gear boxes, motors and power plant used in cement factories.
He has stated that the said statement had been prepared on the basis of actual quotations which he had in his possession.
His evidence shows that between 1951 54 there has been a rise of 11%, whereas between 1954 56 there has been a rise of 7% in the prices of the relevant items of machinery.
He then sought to corroborate his evidence on this point by the expenditure actually incurred by the appellant while putting into commission 980 a new cement factory at Sindri in about 1955.
The calculations made by him in this behalf show that the cost of construction of a new factory is approximately 4.3 times the cost of construction of similar factory in 1939.
In regard to the life of buildings, Mr. Tongaonkar stated that first class buildings lived approximately for 40 years provided they are properly maintained and provided they are not in earthquake zone; but he added, that for the main unit of the cement plant it is usual to take the life of buildings at 25 years.
He also stated that in many cases the existing buildings have got to be either demolished or considerably modified when the main machinery whose life is 25 years has to be replaced by modern machinery which is of a different design and which would require buildings and foundations of different size and type.
Thus, for this special circumstance also, he was not prepared to give the buildings of the appellant an average life longer than 25 years.
In regard to the increase in the cost of constructing buildings, he produced two statements, C 6 and C 14.
exhibit C 6 shows the increase in prices of building materials since 1938 1954, whereas exhibit C 14 shows the continually increasing amount of expenditure incurred by the appellant for construction of labour quarters, etc.
It is on this evidence that Mr. Tongaonkar has adopted the respective multipliers and divisors in arriving at the figure of the amount required for rehabilitation.
As we have already pointed out, for the pre 1939 block he has taken 4.28 as the multiplier, whereas for the block purchased between 1940 44 he has taken 2.8 as the multiplier.
He has explained that the multiplier of 4.28 is really made up of two multipliers.
Certain portion of the plant and equipment which is obtained from abroad is estimated at 60% of the total cost and the expenditure on the remaining items is estimated at 40% of the total cost.
The multipliers of these two groups are estimated at 4.8 and 3.5 respectively, and by calculations it has been noticed that the average ratio comes to 4.28.
This is the 981 genesis of, and the justification for, the adoption of 4.28 as the multiplier.
He has also added that the proportion of 60% and 40% which he had mentioned was based on his experience of building a number of cement factories and of carrying out extension and modernisation of existing cement factories.
The multiplier was based, said the witness, on the state, of comparative quotations of plant and machinery received in 1939 and quotations received of similar machinery recently.
It would thus be clear that in devising the multiplier and divisor, Mr. Tongaonkar has drawn very largely on his experience and has drawn inferences which he thought were reasonable.
Besides in making the relevant calculations he has not dealt with the plant and machinery and the buildings and other assets separately, but has lumped them together under the respective blocks.
The approximate cost of the merging companies of their assets as on July 31, 1936, was 5.73 crores of rupees.
exhibit C 3 which is a certificate issued by the Chartered Accountants shows that " according to the blocks, the original cost of the block of fixed assets excluding goodwill and purchase of rights and land as at 31st July, 1954, of the appellant under the groups of years of acquisition", amounted to Rs. 19,41,38, 100.
Similarly, exhibit C 28 which is also a certificate issued by the Chartered Accountants, shows that the original cost of such portion of fixed assets excluding goodwill and purchase of rights and lands as have been discarded, scrapped or sold as on July 31, 1954, of the appellant companies under the groups of years of acquisition noted in the certificate, amounted to Rs. 1,70,91, 296.
The figures supplied by these two certificates are mentioned in cols.
2 and 3 respectively in exhibit C 2.
Under the method adopted by Mr. Tongaonkar the cost of discards is shown in the respective years when the portions of blocks were discarded; and the amounts spent on rehabilitation from year to year have gone with the blocks of the said respective years shown in col. 2.
The amount of rehabilitation has thus been calculated by the adoption of the multiplier and divisor selected by Mr. Tongaonkar.
The question 982 which calls for our decision is whether the multipliers and divisors adopted by Mr. Tongaonkar can be said to be appropriate.
As we have already mentioned, it is the multipliers and divisors that play a decisive part in the determination of the employer 's claim for rehabilitation in all bonus proceedings, Mr. Tongaonkar 's evidence has been severely criticised by the respondents and in fact, the tribunal does not appear to have been favourably impressed by it.
Before dealing with the criticism made against his evidence, it would be pertinent to observe that the witness has given exhaustive details on the points put to him in examination in chief, and his evidence, read as a whole, does make an imposing reading.
But sometimes the wealth of details given by experts is Apt to complicate the narrow points of dispute between the parties and to create doubt and confusion; the large number of technical details expressed in technical language may, in some cases, tend to cloud rather than clarify the points which the tribunal has to consider.
We feel inclined to hold that is what has happened to some extent in the present case.
But that by itself cannot obviously be said to introduce any infirmity in the evidence given by the expert or affect its credibility.
It only means the tribunal has to analyse his statements, examine them carefully in the light of his cross examination and decide how far it would be justified in acting on them.
It has been urged before us by the respondents that the claim made by Mr. Tongaonkar in regard to the rehabilitation of the pre 1939 block should be rejected.
The contention is that, this block must have been completely replaced before 1953 and no claim for its rehabilitation can be entertained.
This argument was based substantially on the assumption that a part of Rs. 997.42 lakhs must have been utilised for the purpose of replacing the said block.
Mr. Tongaonkar has stated that prior to 1 8 1954 the total amount spent on modernisation, replacement and rehabilitation and other sundry jobs, but excluding ' expansion, was approximately Rs. 9.97"crores, and in support of this 'statement he produced exhibit C 29, 983 which shows the said expenditure year by year.
According to this statement 78 lakhs had been spent on the construction of Rohri Works and Kistna Works, and Rs. 622 13 lakhs had been spent on the expansion during the post war period.
This gives the figure of Rs. 700.13 lakhs.
Deducting this amount from the total expenditure of Rs. 1697 55 lakhs, the balance of, Rs. 997.42 lakhs is shown as expenditure on modernisation, rehabilitation, replacement and other sundry capital jobs.
It is in respect of this amount of Rs. 997.42 lakhs that Mr. Tongaonkar was severely cross examined.
In cross examination he stated that he was not in a position to say whether out of the total expenditure of Rs. 997.42 lakhs shown in exhibit C 29 a major portion had been spent on rehabilitation and replacement of the pre 1939 block and 1940 44 block.
He admitted that the figures in exhibit C 29 had been prepared by the Accounts Department from the Financial Books so far as year to year total expenditure was concerned and he also stated that it was not possible for him to give details about the said expenditure.
These answers indicated that the amount of Rs. 997.42 lakhs had been ascertained mechanically by deducting from the total expenditure of Rs. 1697.55 lakhs incurred on all jobs up to 31 7 1954 the estimated expenditure of Rs. 700.13 lakhs which was treated as expenditure for expansion during the said period.
It is on these statements that the respondents placed reliance in support of their argument that the amount of Rs. 997.42 lakhs must have been utilised for completely replacing the pre 1939 block.
Thus presented, the argument no doubt appeared very plausible, and so we asked Mr. Kolah to give us a satisfactory explanation about the items of this expenditure.
Accordingly Mr. Kolah has filed a statement, exhibit I which gives a rough classification of the total capital expenditure of about Rs. 997 lakhs incurred up to 31 7 1954 on modernisation, replacement, rehabilitation and other sundry and miscellaneous jobs.
The several items of this expenditure are broadly indicated under eight heads, the last of which covering an 125 984 amount of Rs. 160 lakhs has in its turn been split up into five separate items by the statement 1(a).
There was some dispute before us about the admissibility of some of the said items under cl. 5 of this document 1(a).
But Mr. Kolah contends, and it is not disputed by the respondents either, that even if the whole of the disputed item 5 is excluded, the remaining items on exhibit 1 give a fairly satisfactory explanation about the work of rehabilitation, replacement and modernisation on which the bulk of Rs. 997.42 lakhs must have been spent.
In view of this statement we must hold that the assumption made by the respondents that the said amount of Rs. 997.42 lakhs must have been utilised for replacing the pre 1939 block is not well founded.
It is then contended that there is no justification for keeping the pre 1939 block still alive in view of the estimate made by Mr. Tongaonkar about the life of the cement plant and machinery.
The suggestion is that the oldest block is deliberately kept alive in order to enable the appellant to claim a higher multiplier in calculating the rehabilitation amount.
It cannot be said that there is no force at all in this criticism.
In fact Mr. Tongaonkar himself has admitted that a given portion of this block could have been discarded earlier, but he added, that a part of it had been rehabilitated as a temporary measure in order to carry on.
That is why that particular portion of the block had not been discarded so far.
According to him the pre 1939 block contains a portion whose useful life is already over, but the appellant would have to carry on with it until finances could be found for modernisation or reconstruction or entire replacement of the said block.
In our opinion, this explanation cannot be said to be wholly satisfactory.
If the useful life of the whole block had really expired, the appellant would have easily found it possible to replace the said block in due time having regard to its general financial position.
The next criticism made against Mr. Tongaonkar 's evidence is that admittedly he has not calculated the average life of the said block.
He stated that he had assessed the pre 1939 block by his personal visits to 985 the factory by observing to what extent it had been rehabilitated as a temporary measure and by considering what its present condition was.
It is possible that with his knowledge and experience Mr. Tongaonkar may be able to form a proper assessment about the life of the machinery in the manner deposed to by him.
But unfortunately, effective cross examination on this point has been stifled to some extent because ' we find that on some material points questions put to the witness were objected to by Mr. Kolah and the objection was upheld by the tribunal.
The witness was asked whether he could tell the tribunal with his wide experience, how many years on the average 1939 block had spent prior to 1939.
This question was clearly relevant and from the respondents ' point of view it was important.
If the witness was able to predicate about the future useful life of the machinery from his examination of the plant, it was suggested to him that it should be possible for him to give an estimate about the life already spent by it by the same process.
The object of this question obviously was to show that the machinery in question had lived much longer than its estimated life as deposed to by the witness.
This question having been disallowed, any further cross examination to test the claim of the witness that from the inspection and examination of the machinery he can predicate the period of its future useful life became impossible.
The witness was further asked to state whether it would be correct to assume that the said pre 1939 block had on an average spent more than 15 years of its life.
This question also was disallowed, and the respondents naturally make a serious grievance that they were not given an opportunity to show that Mr. Tongaonkar 's estimate about the life of the plant and machinery was a gross under statement.
The respondents have then objected to the inclusion of several items in the approximate cost of rehabilitation mentioned in col. 8 of exhibit C 2.
The new additional packing machine in regard to the factory at Banmore as well as the crane storage are, it is urged, not items of rehabilitation, but of expansion.
Similar 986 criticism is made in regard to the dust collector plants, coal handling plants, items in regard to the fluidification system, diesel engine shunting locomotive and similar other items.
The respondents ' grievance is that by including these items which are really matters of expansion, the amount of approximate cost of rehabilitation has been unduly increased.
We are unable to say if the grievance is justified.
In regard to the multiplier adopted by Mr. Tongaonkar, the criticism is that it is based on hypothetical considerations determined by him in a subjective manner.
It is also pointed out that the failure of the witness to take out the present day replacement cost of individual items of the pre 1939 block has introduced an additional element of uncertainty in the final calculations made by him in regard to the multiplier.
No doubt, the witness has stated that he has used the multiplier of 4.8 on a comparative study of the quotations received between 1939 and the present day, but dealing with the machinery blockwise is not a very satisfactory way of determining such a multiplier.
In support of this argument, reference is made to the statements made by the witness to the cost of 180 ton per day kiln, if manufactured by the appellant, would be lower than that of a 300 ton a day kiln.
The witness then added that the appellant does not manufacture a 180 ton a day kiln, and if such a kiln is imported from abroad its cost would be somewhat higher than that of a 300 ton a day kiln manufactured by the appellant under present day conditions.
He was then asked whether he had got a quotation of a 180 ton a day kiln, and he admitted that he had none, and that he had estimated it approximately at Rs. 11 1/2 lakhs.
The respondents urged that this estimate about the cost of an imported 180 ton a day kiln is purely notional and is not based on any material at all.
This part of the criticism is justified.
The next argument urged against the statements prepared by Mr. Tongaonkar is that he appears to have taken into account the prices prevailing in 1956 and has completely ignored the prices as they obtained in the previous years.
We have already observed that 987 in deciding the amount of rehabilitation by the adoption of an appropriate multiplier, the tribunal should take into account all relevant facts and these would not be confined to the price level prevailing in any one particular year.
When deciding the hypothetical question as to what would be the price in future when the plant and machinery would have to be replaced or rehabilitated, the tribunal has to take an overall picture of prices into account, and the argument is that concentration on the price level of 1956 alone has introduced an infirmity in the calculations made by the witness.
There is another infirmity in these calculations which has been criticised by the respondents.
Mr. Tongaonkar has lumped together the plant and machinery as well as buildings and other properties belonging to the appellant in col. 2 of exhibit C 2.
The more scientific and satisfactory method of dealing with the question of rehabilitation is to treat the plant and machinery separately from the buildings and other assets that need rehabilitation.
In fact we asked Mr. Kolah to give us a statement showing the cost of the plant and machinery and the buildings and other assets separately in order to enable us to have a clearer picture about the extent of the rehabilitation needs of the appellant.
He has accordingly filed a statement, exhibit F (a).
There is yet another point on which Mr. Tongaonkar 's evidence has been criticised by the respondents.
It is argued that this evidence shows that under his concept of modernisation several items of expansion can be included.
Mr. Tongaonkar has stated that by ' modernisation ' he meant 'a composite scheme comprising replacement of the part of the old machinery by new machinery, installation of additional machinery because the layout of the composite modernisation scheme is different from the previous layout and rehabilitation of the remaining machinery as a short term measure '.
By ' rehabilitation ' he ment 'alterations to a machine or machinery, installation for improving its mechanical performance, its technical efficiency or to extend its life by a further span '.
This would also 988 include what he compendiously describes as the removal of weak links.
According to him expansion can be divided into two groups, viz., Group No. 1 construction of the completely new factory solely for obtaining additional production; and Group No. 2 would cover the specific additional machines which are installed not for modernisation purposes as such, but with the primary object of obtaining additional production.
He concedes that in the 'modernisation of an existing factory ' expansion is only a part of the scheme.
This means that in the modernisation scheme ' there would be an element of ' expansion '.
It would thus be clear that the very broad and wide description of modernisation ' given by the witness would justifiably give rise to an apprehension in the minds of workmen that under the heading of 'modern isation ' items of expansion ' pure and simple are likely to creep in.
That is why evidence given by experts in such proceedings needs to be scrutinised carefully, with a view to exclude items of 'expansion ' properly so called from the relevant calculations.
Mr. Tongaonkar has stated that when plant or machinery is rehabilitated or replaced it may lead to increase in production.
But such an in Crease is purely incidental.
But what would be the position where, for instance, a 180 ton a day kiln is substituted by a 300 ton a day kiln by way of rehabilitation or replacement ? The employer is entitled to say that the first category of kilns is not available in the market or that the later category of kilns is more profitable Ind economically more useful.
That being so, if the first kiln is discarded and is substituted by the latter, that is an item of rehabilitation or replacement and not of expansion.
On the other hand, by the substitution of the latter kiln there would be such an appreciable increase in production that the workmen may be entitled to contend that some apportionment should be made and the rehabilitation part of the machinery should be separated from the expansion part which has crept into the transaction.
We confess that it would be very difficult to undertake the task of making any such apportionment.
989 Even so, tribunals may have to consider the workmen 's plea if they are satisfied that the steps taken by the employer by way of rehabilitation have led to a very large increase in production.
In this connection the respondents have relied on exhibit H. 0.
C 2 which, according to them, shows considerable increase in production, and that, it is urged, is the result of expansion and not of rehabilitation.
Mr. Tongaonkar has suggested in his evidence that it is the intention of the employer that decides the character of the transaction.
If the employer wants to instal new machinery solely with the object of expanding his business, that is expansion; but if he purchases new machinery for business reasons and not for the purposes of expansion, it would be rehabilitation notwithstanding the fact that the new machinery gives rise to increased production.
This approach, in our opinion, gives undue importance to the intention of the employer and we think that, on a proper occasion, the question may have to be considered by the application of some objective tests.
In this connection it would be relevant to bear in mind the fact that the steps taken by the appellant for rehabilitating, replacing or modernising its machinery are a part of its plan of expanding its business so as to meet the growing demand for cement in our country.
In deciding the question as to whether the claim as disclosed by the statements prepared by Mr. Tongaonkar is inflated or not, the respondents have asked us to consider the estimate made by the appellant 's Chairman in that behalf.
In his speech delivered on January 24, 1951, at the Fourteenth Annual General Meeting of the appellant company, the Chairman stated that most of the company 's pre war plant would be due for replacement in the course of the next ten years and he added that " at the present price levels, replacement will cost on an average 2 1/2 times the original cost.
This will involve an expenditure of about Rs. 8 crores over and above the provision already made for depreciation ".
The contention is that, considered in the light of this estimate, the pre,sent claim for rehabilitation is very much inflated.
990 When Mr. Tongaonkar was asked about this estimate he stated that the Chairman had not consulted him while drafting the annual report or while drafting the portion of the speech in regard to 'rehabilitation ' and he also added that he did not agree with the figures given by the Chairman regarding the replacement cost of plant and machinery in his report dated January 24, 1951.
This explanation may not be very satisfactory.
But we cannot ignore the fact that when the Chairman made his statement he did not purport to calculate the claim for rehabilitation in terms of the formula and so it would not be fair to test the evidence of the witness in the light of the estimate given by the Chairman in his speech.
We have so far considered the broad arguments urged against Mr. Tongaonkar 's evidence.
Unfortunately, the tribunal has contented itself merely with the observation that the multiplier of 2.7 would be adequate; and it has given no finding as to the suitable divisor.
That is why we must now proceed to adopt a suitable multiplier and divisor for deciding the question of rehabilitation.
We have already stated our conclusions in regard to some of the infirmities in the evidence of Mr. Tongaonkar and the statements prepared by him.
He has lumped together all assets of the appellant that need rehabilitation.
He has taken into account the prices prevailing only in 1956, and in the selection of an average multiplier he has probably been slightly generous to the appellant.
His estimate about the life of the plant and machinery has not been allowed to be sufficiently tested in crossexamination and, on the whole, it appears to err a little too much on the side of a conservative estimate ; and if that is so his divisor may need revision; it is also probable that in the items included by him under rehabilitation may have been included some which are more of the character of expansion than rehabilitation, replacement or modernisation.
Besides, it is not unlikely that the steps taken by the appellant ostensibly for rehabilitation, replacement and modernisation of the machinery have appreciably increased its production, and that may partly be due to the fact that the 991 general plan of expansion adopted by the appellant has been in operation for some time past.
It is in the light of these facts that we have to examine the appellant 's claim for rehabilitation.
In doing so, we have taken exhibit C 2, exhibit C 23 and exhibit F (a) as a basis for our calculations.
It is somewhat unfortunate that in making its claim for rehabilitation Mr. Tongaonkar did not make calculations separately in respect of plant and machinery as distinct from buildings, roads, bridges and railway sidings.
It is true that at our instance a statement exhibit F (a) has been filed before us; but if such a statement had been filed before the tribunal, the respondents would have had a better opportunity of testing the accuracy of the calculations made in it and the basis on which the respective multipliers and divisors are sought to be deduced from it.
We would, therefore, like to make it clear that the calculations which we now propose to make in regard to the item of rehabilitation should not be ,taken to be binding on the parties in subsequent years.
If, in the light of our decision on the principal points raised before us in the present appeals, the parties decide to settle their disputes about bonus for subsequent years there would be no occasion for the tribunal to deal with them on the merits.
If, however, these disputes have to be, settled by the tribunal, it would be open to the parties to lead evidence in support of their respective contentions.
The tribunal also would be at liberty to consider the matter afresh and come to its own conclusion on the merits.
Let us now proceed to make the relevant calculations.
The first step to take is to correct the figures in exhibit C 2 by excluding the cost of buildings, roads, ,bridges and railway sidings from the total cost mentioned in it against the several blocks.
This cost has been supplied to us by the appellant in exhibit F (a).
This is how the corrections work out.
In our calculations all figures are expressed in 'lakhs ': 126 992 Chart I. Period Original cost Less cost of Balance of block buildings etc.
(1) (2) (3) (4) Up to 1939 486.89 132.98 353.91 1940 44 59.91 22.38 37.53 1945 47 208.93 68.15 140.78 1948 54 1144.81 333.47 811.34 In exhibit F (a) the appellant has shown the respective average ratios in col. 5 in regard to items of property mentioned in col. 2.
We think, in making our calculations, it would on the whole be fair to adopt 3.5 as a suitable multiplier up to 1939, 2 from 1940.47 and 1 from 1948 54 (as in C 2) for replacement by part A.C.C. machinery.
We have not disturbed the divisors taken by C 2 though we feel inclined to hold that Mr. Tongaonkar has underestimated the probable life of machinery.
The amount of yearly requirement for rehabilitation for the total block minus buildings, etc., would then work out at Rs. 229.39.
This does not take into account the available reserves; that aspect is considered later on: Chart II.
Period Original cost of Multiplier Total Less Balance Life Yearly break of require down as machi ment in exhibit C 2 nery (in Yrs.) (1) (2) (3) (4) (5) (6) (7) (8) (approx.) UP to 1939 353.91 x3.5 1238.68 65.921172.767 167.54 1940 44 37.53 x2 75.06 4.66 70.40135.41 1945 47 140.78 x2 281.56 11.19 270.371518.02 1948 54 811.34 x1 811.34 42.84 768.502038.42 . .
Total 229.39 . .
Then we would deal with the buildings, roads, bridges and railway sidings.
, These may be given an average life of 30 years for all blocks in order to compensate for cases where they have to be demolished on account of modernisation.
According to the previous statements of the appellant the life of factory buildings was about 35 years and residential 993 areas 50 years.
Even so we propose to take the average life of 30 years in making our calculations in respect of these blocks.
The multipliers may be taken as 2.25 for pre 1939 blocks, 1.5 for 1940 47 blocks, 1 for 1948 54 blocks.
The Bombay block has been taken as in exhibit C 2: Chart III.
Period Cost Multi Total Less Balancelife Yearly plier break down require valued at 5% ment of cost (1) (2) (3) (4) (5) (6) (7) (8) UP to 1939 132.98 X 2.25 299.20 6.65 292.55 20 144.63 1940 44 22.38 x 1.5 33.57 1.12 32.45 25 1.29 1945 47 68.15 x 1.5 102.22 3.40 98.82 25 3.95 1948 54 333.47 x 1 333.47 16.67 316.80 30 10.56 Bombay office 40.83 50.28 .73 49.55 69 .71 block . . .
Total 31.14 . . .
Thus the total yearly requirement for rehabilitation of this block would come to 31.14 lakhs.
The appellant 's claim for rehabilitation can now be calculated on the basis of exhibit C 23 as corrected in the light of the three charts prepared by us.
As, the calculations in the chart show, we would hold that the appellant is entitled to an allowance of 216.10 lakhs for rehabilitation in the relevant year: Chart IV.
Replacement of pre 1939 block: Cost of machinery (Chart II) 1172.76 Deduct reserves 311.00 Balance 861.76 divided by 7: 123.11 Add for buildings (Chart III) 14.63 . . .
Total 137.74 Replacement cost of 1940 44 block Including buildings etc.
(5.41 plus 1.29) . 6.70 do for 1945 47 (18.02 plus 3.95) . 21.97 do for 1948 54 (38.42 plus 10.56) . 48.98 do for Bombay Office . 71 . . . . total . 216.10 994 Having decided that the total claim for rehabilitation admissible to the appellant is 216.10 lakhs for the relevant year, we must now proceed to determine whether on the working of the formula any surplus profit is available.
We have made the following calculations in the light of the principles laid down by us in this judgment: Chart V. Total profit excluding Bhupendra factory 428.71 Less notional normal depreciation (p. 428, Pt.
1) 100.22 Less income tax payable @ 7 as.
in the Rupee as per Note A below 115.16 Less 6% on paid up capital 76.06 Less 4% on working capital 26.10 . . . Total. 317.54 317.54 Balance. 111.17 Less provision for rehabilitation. 115.88** . . . Balance. 4.71 This is how we have calculated theincome tax payable for the relevant year: Note A. Gross profits 428.71 Less statutory depreciation 165.49 Balance 263.22 Income tax @ 7 as.
in the Rupee 115.16 **Provision for rehabilitation (vide Chart V): Total from Chart IV.
216.10 Less notional normal depreciation. 100.22 Balance. **115.88 995 We ought to add that in our calculations we have not taken into account the Bhupendra Factory because the relevant material for working out the figures in regard to this factory is not adequate or satisfactory.
However from such material as is available it appears that if the profits made by the said factory are included in the calculations and rehabilitation required by it is worked out, it would not materially affect the ' figure of rehabilitation amount determined by us.
The result is that there is no available surplus from which the respondents can claim any bonus for the relevant year.
It is true that the appellant has already paid the respondents 20.65 lakhs as bonus for the relevant year, and it is likely that it may continue to do so in future ; but that is a matter which is not governed by the formula.
In view of the fact that the working of the formula leaves no available surplus the appeal must be allowed and the award made by the tribunal set aside.
Since the appellant had come to this Court for the decision of the larger and more important question about the revision of the formula, we would direct that there should be no order as to costs.
Appeal allowed.
| The respondents, who were non residents carrying on business at Secunderabad within the territories of the Nizam of Hyderabad, were acting as agents of two firms in Bombay and Madurai, in British India, for the supply of certain goods to the Nizam 's Government.
In respect of the Commission due to the respondents by the firms the agreement between the parties was that the amounts were to be paid to the respondents in cash or by cheques at Secunderabad.
For these amounts cheques drawn by the firms on the Bombay and Madras branches, respectively, of the Imperial Bank of India, were sent by post at Bombay and Madurai to the respondents at Secunderabad, and when received, they were credited in their books of account, the cheques being sent to their banker there for collecting and crediting to their account.
For the assessment year 1945 1946 the Income tax Officer, Berhampur (in British India), assessed these sums as taxable income holding that the amount was received in British 869 India and not at Secunderabad.
The Appellate Tribunal found that all the cheques received at Secunderabad by the respondents were treated by them as payment.
The respondents claimed that in view of the agreement between the parties that the amount of commission should be paid at Secunderabad, when the cheques were sent by post, the post office was the agent of the debtor and not of the respondents, that the amount must be treated as having been received when the post office delivered the cheques to the respondents, and that, consequently, the amount cannot be treated as having been received in British India.
The Income tax authorities relied on the decision in Commissioner of Income tax vs Ogale Glass Works Ltd., [1955] I S.C.R. 185.
Held, that in the case of payment by cheques sent by post the determination of the place of payment would depend upon the agreement between the parties or the course of conduct of the parties.
If it is shown that the creditor authorised the debtor either expressly or impliedly to send a cheque by post the property in the cheque passes to the creditor as soon as it is posted.
But where, as in the present case, the agreement was that the amount was to be paid at Secunderabad, outside British India, when the cheques were received by the respondents there the amount must be deemed to have been received at that place, and, therefore, the amount was not liable to be taxed in British India.
Commissioner of Tncome tax vs Ogale Glass Works Ltd., , distinguished.
|
Appeal No. 1356 of 1956.
Appeal from the judgment and decree dated December 3, 1965 of the Calcutta High Court in Appeal from Original Decree No. 85 of 1965.
295 D.N. Mukherjee, for the appellant.
M.C. Bhandare, Pratap Singh and K. Rajendra Chaudhuri, for respondent No. 1.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by certificate from a judgment of the Calcutta High Court.
The facts may be briefly stated.
One Ratanamala Dassi who was governed by the Bengal School of Hindu Law as modified by the , hereinafter called the Act, died intestate in January 1964 leaving no issue or lineal descendants.
Her husband Monmotha Nath Dutt had predeceased her.
The said Ratnamala Dassi left her surviving the appellant and respondents 2 and 3, the brothers of her husband and respondent 1, Urmilla Sundari Dassi her husband 's sister.
In 1964 respondent No. 1 instituted a suit for a declaration that as an heiress of Ratnamala Dassi she had 1/4 share in the movable and immovable property left by her and that she be allotted her share by partition of those properties.
The appellant entered appearance and took up the plea in his written statement that under the Act he and respondents 2 and 3 being the brothers of the husband of the deceased Ratnamala Dassi were the heirs in preference: to respondent 1 who.
was the sister of the deceased 's husband.
The suit was tried on the original side by a learned Single Judge of the Calcutta High Court who granted a preliminary decree on December 23, 1964 in favour of respondent 1 holding that she had 1/4 share in the estate left by Ratnamala Dassi.
The appellant preferred an appeal to a division bench which was dismissed.
The sole point which has to be considered is whether, according to the order of succession as laid down in Class II of the Schedule to section 8 of the Act, brother would succeed in preference to the sister or whether the brother and sister would succeed .jointly having equal shares ? According to section 15(1 ) when a female Hindu dies intestate her property devolves according to the Rules set out in section 16.
Section 15 divides the groups of heirs of a female dying intestate into five categories described as Entries (a) to (e).
We are concerned, in the present case, with Entry (b) which is "secondly, upon the heirs of the husband".
Section 16 provides that the order of succession among heirs referred to in section 15 shall be and the distribution of the intestate 's property among those heirs shall take place according to the following Rules: Rule l: "Among the heirs specified in sub section (1 ) of section 15, those in one entry shall be preferred 296 to those in any succeeding entry, and those included in the same entry shall take simultaneously.
Rule 2 . . . . .
Rule 3.
The devolution of the property of the intestate on the heirs referred to in clauses (b), (d) and (e) of sub section (1) and in sub section (2) of section 15 shall be in the same order and according to the same rules as would have applied if the property had been the father 's or the mother 's or the husband 's as the: case may be, and such person had died intestate in respect thereof immediately after the intestate 's death.
" As the property in the present case was of the husband of Ratnamala Dassi we have to turn to section 8 to find out who would have been his heirs.
Section 8 reads: Section 8 "The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter : (a) firstly, upon the heirs, being the relatives specified in class 1 of the Schedule.
(b) secondly, if there is no heir of class 1, then upon the heirs, being the relatives specified in class 1I of the Schedule (c) thirdly, if there is no heir of any of the two classes, then upon the agnates of the deceased; and (d) lastly, if there is no agnate then upon ' the cognates of the deceased.
" The Schedule mentioned in section 8 to the extent it is material is reproduced below : CLASS 1 "Son; daughter; widow; mother; son of a predeceased son; daughter of a predeceased son; son of a predeceased daughter; daughter of a predeceased daughter; widow of a predeceased son; son of a predeceased son of a predeceased son; daughter of a predeceased son of a predeceased son; widow of a predeceased son of a predeceased son.
CLASS 11 I. Father.
297 II.
(1) Son 's daughter 's son, (2) son 's daughter 's daughter, (3) brother, (4) sister.
III . . . . VII . . . VIII . . . Explanation . . . " Section 9 lays down that among the heirs specified in the Schedule those in class 1 shall take simultaneously and to the exclusion of all other heirs and those m the first entry in class II shall be preferred to.
those in the second entry and so on.
Section 11 is to the effect that the property of an interstate shall be divided in any one entry in class II of the Schedule so that they share equally.
Before the High Court the contention raised on behalf of the appellant was that "brother" being prefixed by arabic numeral 3 came before "sister" which word had the numeral (4) before it and that the object of using the numerals within a particular group was to prescribe the order of precedence or preference.
It was also argued that the use of the arabic numerals in groups II, III and IV of Class II must have some meaning; otherwise the legislature would have used such numerals in respect of the heirs not only in class II but in class I as well.
The learned judges of the division bench felt that the use of the arabic numerals appeared to be redundant but "the combined effect of this section read with the others seems to.
be that the legislature intended that the heirs named after numerals II,III IV composed three entries only".
We are unable to accede to the argument that the use of arabic numerals is decisive of the point whether or not the heirs specified in entry II of class II succeed simultaneously and equally.
It is inconceivable that a matter of such importance should have been left to the employment of numerals alone.
If the intention of the legislature was that each class of relatives shown against the arabic numerals constituted an entry express and specific provisions to that effect would have been made in the substantive sections of the Act.
Indeed section Il says quite clearly that the property of an intestate shall be divided between the heirs specified in any one entry in class II of the Schedule so that they share equally.
That language would not be consistent with the view that file heirs shown against the arabic numerals constitute an entry within the meaning of section 11.
The Act was meant to lay down a comprehensive and uniform system of inheritance and its scheme is to 298 prescribe a set of rules for succession to the property of male and female Hindus dying intestate.
Sections 8 to 13 contain the general rules relating to succession to the property of a male Hindu including the matter of ascertainment of shares.
Sections 15 and 16 contain the general rules affecting succession to the property of a female Hindu.
The rules relating to preferential heirs are given in s.10.
If the intention was to give preference among the heirs in Class II according to.
arabic numerals treating the same as a separate entry some provision would undoubtedly have been made in s.11 for that purpose.
As noticed before it is that section which deals with the distribution of property among heirs in class II of the Schedule.
Indeed s.11 would be wholly unnecessary if each one of the heirs mentioned in each entry of class II were to take preference to the next one in the.
same entry.
It is also.
significant that in class 1 male and female heirs have been treated as equal.
There is no reason why any distinction should have been made among the heirs in class II on the ground of the heir being male or female.
For instance in entry II in class Il a brother would have preference over the sister and in his presence the later would succeed if the submission on behalf of the appellant is to.
be accepted.
No reason or justification has been suggested for making such a distinction.
Similarly on the appellant 's argument the son 's daughter 's son should have preference over the son 's daughter 's daughter.
That again would run counter to the whole scheme of the Act that male and female heirs should get equal treatment.
It must be remembered that the Act incorporated one of the principal reforms which had become a pressing necessity owing to the changed social and economic conditions in Hindu society that in succession there should be equal distribution between male and female heirs.
It is true that the draftsmen while employing the arabic numerals in entries Il to IV of class II only are likely to have something in mind but on the whole and in view of the reasons which have been given above no particular significance can be given to the use of the arabic numerals.
Generally speaking numbers or numerals are employed in a statute for the sake of convenient and easy reference but their use cannot override the statutory provisions.
Nor is it possible in the 'absence of any indication in the sections or in the Schedule itself to attribute such a radical departure from the general scheme of classification of heirs, as has been suggested, namely, that in case of three entries only in class 11 the legislature intended to create an order of preference and lay down the same by the use of arabic numerals.
There is no merit in this appeal which fails and it is dismissed with costs.
V.P.S. Appeal dismissed.
| Govan Brothers were since 1943, the managing agents of the Rampur Company.
In May 1964 criminal proceedings which are still pending were lodged against V.H. Dalmia, the managing director of Govan Brothers, pursuant to the report of the Bose Inquiry Commission that V.H. Dalmia was in the year 1946 47 guilty of grossly improper conduct in relation to several companies of which he was a director.
In September 1964 the company applied for approval under section 326 of the Companies Act of the reappointment of Govan Brothers as managing agents.
The Company Law Board approved the extension of the tenure for three years.
When approval was sought for another extension till 1970 the Board rejected the application.
In considering whether Govan Brothers were "fit and proper" within the meaning of section 326(2) (b) of the Act to be reappointed managing agents the Board restricted itself to the findings recorded by the Bose Commission relating 'to the dealings of V.H. Dalmia with the companies of which he was a director between the years 1945 and 1947.
The company moved the High Court by a Writ Petition for an order quashing the decision of the Board 'and for an order directing the Board to extend the managing agency till 1970.
The High Court set aside the Board 's order and directed it to take into consideration the entirety of the "acts and activities" of V.H. Dalmia in forming the requisite opinion under section 326(2) (b).
The Board and the company preferred appeals to this Court.
On the question: (i) whether the decision of the Board under the section based on its satisfaction is immune from the scrutiny of the court and (ii) whether the High Court should have given a direction to the Board to extend the period of the managing agency, HELD: Dismissing the appeals (i) By sub section
(2) of section 326., the Central Government is invested with power to decide whether it is against the public interest to allow the company to have 'a managing agent, whether the person proposed is fit and proper to be appointed managing agent, whether the conditions of the managing agency agreement proposed are fair and reasonable, and whether the managing agent proposed has fulfilled the conditions which the Central Government has required him to fulfill.
The scheme of the section implies investigation and a decision on the matters set out therein.
The power is a quasi judieial power and not administrative: it necessarily implies a duty arising from the nature of the act empowered to be done, the object for which it is to, be done, the conditions in which it is to be done and its repercussion upon the power of the company, the shareholders the creditors and the general public for whose benefit the power is to be 178 exercised.
The satisfaction contemplated by section 326 must therefore be the result of on objective appraisal of the relevant materials because, exercise of the power conferred upon the Central Government is restrictive of valuable rights of the company and of the proposed managing agent and severely restricts their liberty of contract.
The courts are not concerned with the sufficiency of the grounds on which the satisfaction is reached.
The enquiry before the court is whether the Central Government was satisfied as to the existence of the conditions in els.
(a), (b) and (c) of sub section
(2) of section 326.
The existence of the satisfaction cannot be challenged except probably on the ground that the authority acted mala fide.
But: if in reaching its satisfaction the Central Government misapprehends the nature of the conditions or proceeds upon irrelevant materials or ignores relevant materials the jurisdiction of the courts to examine the satisfaction is not excluded, [182 F H; 183 A E H; 184 A B] Barium Chemicals vs The Company Law Board.
[1966] Supp.
S.C.R. 311, Rohtas Industries vs
S.D. Aggarwal, A.I.R. 1969 S.C. 7Q7, referred to.
Ridge vs Baldwin, ; and Padfield vs Minister of Agriculture; , , applied.
The observations of the Judicial Committee in Nakuda Ali vs Jaya Ratne, that the duty to act judicially arises only from an express provision to that effect disapproved.
The section uses the present tense '.
The satisfaction must be with reference to the conditions existing in praesenti, but in adjudging whether a person is fit and proper to be appointed managing agent past actings and conduct cannot be ignored.
The Board is not restricted to a consideration of his acts, conduct 'and activities proximate to the date of the application; it has to consider his acts and activities past and present, the interest of the shareholders and the general interests of the public in allowing the management to be continued by the directors of the company and other circumstances which have a bearing on the question.
[181 G H; 182 A] (ii) In dealing with a petition against an order made by the Board under section 326 the High Court is not constitute.d a court of appeal.
The Court has merely to consider whether in arriving at its decision the Board has restricted itself to the enquiry contemplated to be made and has taken into consideration all the relevant circumstances and that its decision is not vitiated by irrelevant or extraneous matters.
[186 B D]
|
Appeal No. 446 of 1958.
Appeal from the judgment and order dated April 18, 1956, of the High Court of Judicature at Madras in Tax Revision Case No. 93 of 1955.
M. C. Setalvad, Attorney General of India, section Swaminathan and K. L. Mehta, for the appellants.
V. K. T. Chari, Advocate General of Madras, M. M. Ismail and T. M. Sen, for the respondent.
N. A. Palkhivala, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the Intervener (Tata Loco & Engineering Co. Ltd., Bombay).
March 28.
The Judgment of the Court was delivered by section K. DAB, J.
This is an appeal on a certificate granted by the High Court of Madras.
The firm of Messrs. Ashok Leyland Ltd., Ennore, is the appellant before us.
For brevity and convenience, we shall hereinafter refer to the firm as the assessee.
The State of Madras through the Commercial Tax Officer, Saidapet, is the respondent before us.
The assessee is a firm with its factory at Ennore in the State of Madras, where it manufactures, assembles and sells motor vehicles and spare parts and accessories thereof, through an elaborate organisation spread over several States.
It is, perhaps, necessary to indicate briefly the organisational set up in order to appreciate the point on which the case was heard in the High Court and argued before us.
The system of distribution of its motor vehicles, spare parts and 609 accessories at one uniform price to consumers in the various States which the assessee adopted, consisted of the appointment of a distributor (called a dealer) with a definite territorial jurisdiction, both inside and outside the State of Madras.
To every such dealer it granted the sole right of selling the products of the firm within the territory allotted to him.
If the territory of the dealer was outside the State of Madras, the agreement entered into by the dealer provided for the delivery of the products of the firm by consignment, by rail or steamer or road transport.
The agreement specifically stipulated that the dealer must not canvass or sell the products outside the territory allotted to him, and in the event of infringement or breach of the undertaking by the dealer, the assessee was entitled to terminate the agreement forthwith.
On such termination, the assessee reserved the right to call upon the dealer to return all or any of the products remaining unsold at the date of such termination.
The case set up by the assessee was that a substantial number of motor vehicles and accessories thereof were consigned to the dealers in other States either by rail or steamer; but due to want of such transport facilities, a number of vehicles were also transported by road.
In the year relevant to the assessment year 1952 53, the total turnover of the asaessee in respect of all its sales came to Rs. 1,43,67,007 odd.
The Deputy Commercial Tax Officer, Madras, computed the taxable turnover of the assessee for that year by excluding the sum of Rs. 1,12,21,707 odd which represented the value of vehicles, spare parts, etc., sold outside the State of Madras and consigned by rail or steamer or transported by road.
The balance of Rs. 31,45,299 odd was determined to be the net assessable turnover of the company.
The tax levied thereon was a sum of Rs. 1,45,655 13 3 and this sum was duly paid by the assessee.
Sometime thereafter, the Commercial Tax Officer, Madras, purporting to act under the powers of revision given to him by section 12 of the Madras General Sales 77 610 Tax Act, 1939 (Madras Act IX of 1939), hereinafter called the Act, called upon the assessee to produce its books of account for the purpose of satisfying himself as to the legality or propriety of the assessment made.
After scrutinising the accounts and other records produced by the assessee, the Commercial Tax Officer issued a notice proposing to revise the assessment by including a sum of Rs. 42,98,068 odd on the ground that the delivery of motor vehicles, etc., in respect of sales covered by the aforesaid sum was made within the State of Madras and was therefore liable to tax under the Act.
The assessee submitted its objection to the revision of the assessment and contended that on the sum of.
Rs. 42 lacs odd the assessee was not liable to pay sales tax as the transactions were in the course of inter State trade and commerce.
This objection was, however, overruled by the Commercial Tax Officer except to a very small extent.
From that decision of the Commercial Tax Officer, an appeal was taken to the Sales Tax Appellate Tribunal, Madras, and the assessee contended in that appeal that the revision of the assessment by the Commercial Tax Officer was without, jurisdiction and that the inclusion of Rs. 42 lacs odd in the taxable turnover was contrary to the provisions of article 286 of the Constitution.
The Tribunal rejected the plea of absence of jurisdiction, but held on merits that the sum of Rs. 12,48,403 odd representing the value of vehicles driven away on their own motive power through the assessee 's own drivers to the places of business of the non resident dealers was not liable to sales, tax.
The assessee then preferred a revision to the High Court of Madras under section 12B(1) of the Act and repeated the contention that the sales in question were in the course of inter State trade and commerce and not liable to sales tax by reason of the provisions of article 286(2) of the Constitution.
In the High Court the liability to tax was challenged by the assessee in respect of the following four items only: (1) A sum of Rs. 1,43,072 odd which represented the value of vehicles delivered ex factory to the 611 dealer 's drivers.
The vehicles were driven away by those drivers after temporary registration of the vehicles in the name of the dealer, outside the State of Madras.
(2) A sum of Rs. 28,01,357 odd which represented the value of vehicles delivered to the drivers of the dealers, which were driven away under the trade number of the dealers, outside the State of Madras.
(3) A sum of Rs. 7,866 odd which represented the value of spare parts or other accessories delivered along with the cars.
(4) A sum of Rs. 15,000 which represented the value of spare parts consigned to the dealers.
These were delivered to the dealers outside the State of Madras and the consignments were sent by rail or steamer.
The High Court repelled the contention of the assessee in respect of the first three item,,; aforesaid, holding that they fell outside the purview of the ban imposed by article 286(2) of the Constitution.
It modified the order of the Tribunal with respect to the fourth item, as in its view that item came within the scope of article 286(2).
The assessee then moved the High Court and obtained the necessary certificate under article 133 of the Constitution.
When the learned Attorney General appearing for the assessee opened the appeal, he submitted in the forefront of his argument that the High Court was in error in holding that the transactions coming under the three items (1), (2) and (3) above were outside the ban imposed by article 286(2) of the ' Constitution, and contended that the transactions were within the purview of the ban.
We then drew his attention to the Sales Tax Laws Validation Act, 1956 (hereinafter called the Validation Act), and asked him to consider the question whether the transactions in question came within the protection of the Validation Act, an aspect of the case which does not appear to have been considered in the High Court.
The argument before us then centered round the question whether the assessment in respect of the three items came within the protection of the Validation Act, and it was conceded by the 612 learned Attorney General that if it did, no other question would survive and it would be unnecessary to determine in this appeal the true scope and effect of article 286(2) of the Constitution and whether the transactions in question came within the ban imposed thereby.
On behalf of an intervener (Tata Locomotive & Engineering Co. Ltd,, Bombay) we have been pressed to decide, on merits, whether the transactions under consideration here come within the ban of article 286(2) of the Constitution, on the ground that such decision will be of assistance in a pending case to which the intervener is party.
We do not think that we can do so for the benefit of the intervener.
The intervener has no right to ask us to decide a question which does not fall for decision if the Validation Act applies; for it is conceded that if the Validation Act applies, that will be decisive of the whole appeal.
We must, therefore, reject the plea of the intervener.
We proceed now to consider the main point argued in this appeal, namely, whether the Validation Act applies to the transactions in question.
It is convenient to read here section 2, which is the relevant section, of the Validation Act: "Section 2.
Notwithstanding any judgment, decree or order of any court, no law of a State imposing or authorising the imposition of, a tax on the sale or purchase, of any goods where such sale or purchase took place in the course of interstate trade or commerce during the period between the 1st day of April, 1951, and the 6th day of September, 1955, shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter State trade or commerce; and all such taxes levied or collected or purporting to have been levied or collected during the aforesaid period, shall be deemed always to have been validly levied or collected in accordance with law".
It will be noticed at once that the transactions under consideration in the present appeal came within the period mentioned in the Validation Act.
being transactions of a period between April 1, 1951, and 613 March 31, 1952.
Indeed, this is not disputed before us.
It is also clear that the wording of a. 2 is general and wide enough to take in "the sale or purchase of any goods where such sale or purchase took place in the course of inter State trade or commerce during the period between the 1st day of April, 1951, and the 6th day of September, 1955.
" The section states in effect that notwithstanding any judgment, decree or order of any court, no law of a State imposing a tax on the sale or purchase of goods referred to therein shall be deemed to be invalid or ever to have been invalid merely by reason of the fact that such sale or purchase took place in the course of inter State trade or commerce.
The learned Attorney General has advanced two arguments in support of his contention that the Validation Act does not apply to the transactions under consideration here.
His first argument is that the Validation Act applies only when the law of the State imposes, in express terms, a tax on the sale or purchase of any goods in the course of inter State trade or commerce.
He emphasises the expression "where such sale or purchase took place in the course of inter State trade or commerce" occurring in the section and from that expression he has drawn the inference that the law must in express terms say that it is taxing transactions in the course of interState trade and commerce.
His second argument is that by reason of section 22 of the Act, inserted by the amending Act of 1957, being Madras Act I of 1957, the Act imposes no tax on transactions under consideration in this appeal; it merely imposes a tax on transactions which are generally known as Explanation sales referable to the Explanation to article 286(l)(a), such as were considered in the decision of this Court in M. P. V. Sundararamier & Co. vs The State Of Andhra Pradesh & Another (1).
We shall consider these two arguments one after the other.
It appears to us the first argument does not correctly reflect the true scope and effect of section 2 of the Validtion Act.
It is necessary, perhaps, to advert to the circumstances which led, to the enactment of (1) 1958 J.s.
S.C.R. 1422 614 the Validation Act.
The true meaning and scope of the Explanation to article 286(1) of the Constitution came up for consideration before this Court in The State of Bombay and Another vs The United Motors (India) Ltd and Others (1).
It was therein held by the majority that though the sales falling within the Explanation would, in fact, be in the course of interState trade.
they became intrastate sales by the fiction introduced by the Explanation and were liable to be taxed by the State within which the goods were delivered for consumption.
Then, came the decision in The Bengal Immunity Company Limited vs The State of Bihar and Others (2) where this Court held, again by a majority, that the sales falling within the Explanation being inter State in character, could not be taxed by reason of article 286(2) unless Parliament lifted the ban, that the Explanation to article 286(l)(a) controlled only that clause and did not limit the operation of article 286(2), and that the law in this respect had not been correctly laid down in the United Motors ' case (2).
The decision in The Bengal Immunity 's case (2) was rendered on September 6, 1955.
The Sales Tax Validation Ordinance No. III of 1956 was promulgated on January 30, 1956, and that was later replaced by the Validation Act.
The constitutionality of the Validation Act was challenged before this Court and in M. P. V. Sundararami 's case (3) this Court upheld its validity, though the sales referred to in the arguments in that case were Explanation sales.
The Validation Act is legislation by Parliament, and it lifts the ban imposed by article 286(2).
Clause (2) of article 286 as it stood before the Constitution (Sixth Amendment) Act, 1956, in these terms: "(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." In M. P. V. Sundraramier 's case(3) this court observed: (1) ; (2) [1955] 2 S.C.R.603 (3) 615 "Section 2 of the impugned Act which is the only substantive enactment therein makes no mention of any validation.
It only provides that no law of a State imposing tax on sales shall be deemed to be invalid merely because such sales are in the course of inter State trade or commerce.
The effect of this provision is merely to liberate the State laws from the fetter placed on them by article 286(2) and to enable such laws to operate on their own terms.
The true scope of the impugned Act is, to adopt the language of this Court in the decisions in the United Motors case (1) and The Bengal Immunity Company 's case (2), that it lifts the ban imposed on the States against taxing inter State sales and not that it vali dates or ratifies any such law.
" It should be obvious that in 1939, long before the coming into force of the Constitution, the Act could not have said in express terms that it was taxing sales in the course of inter State trade.
What we have to see is that the fetter under article 286(2) having been removed, does the Act operating on its own terms affect the transactions in question even though they be in the course of inter State trade? If it does, the assessment is no longer liable to challenge on the ground of the ban imposed by article 286(2).
This brings us to the second argument of the learned Attorney General.
One has merely to see the definitions of 'sale ' and 'turnover ' and section 3, the charging section, to come to the conclusion that the Act operating on its own terms makes the transactions under consideration in this appeal liable to sales tax.
Explanation (2) to the definition of 'sale ' says: "The sale or purchase of any goods shall be deemed, for the purposes of this Act, to have taken place in this State, wherever the contract of sale or purchase might have been made (a) if the goods were actually in this State at the time when the contract of sale or purchase in respect thereof was made, or (b) in the case the contract was for the sale on purchase of future goods by description, then, if the (1) ; (2) 616 goods are actually produced in this State at any time after the contract of sale or purchase in respect thereof was made.
" There can be no doubt that the Explanation brings the transactions in question within the definition of 'sale ' under the Act.
The point now is does section 22 of the Act make any difference ',? We are clearly of the opinion that it does not.
A little history of that section is necessary here.
Section 22 of the Act, as it stood before the amending Act of 1957, was inserted by the Adaptation of Laws (Fourth Amendment) Order, 1952, made by the President in exercise of the powers conferred on him by article 372(2) of the Constitution.
The section was then almost a verbatim reproduction of article 286(l) and (2) of the Constitution.
The effect of the section as it stood then, was considered in M. P. V. Sundararamier 's case (1) and it was held that it had a positive content and the Explanation in the context of section 22 (as it then stood) authorised the State of Madras to impose a tax on sales falling within its purview.
Then came the Validation Act in 1956, which lifted the ban imposed by article 286(2).
In 1957 new section 22 was inserted in the Act with restrospective effect from January 26, 1950, and old section 22 was repealed.
The new section reads: "Section 22.
Sale or purchase deemed to have taken place inside the State in certain cases (1) Any sale or purchase which took place on or before the 6th day of September, 1955, shall be deemed to have taken place inside the State if the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in the 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, and.
be subject to tax under this Act accordingly.
(2) The provisions of this section shall not affect the liability to tax of any sale or purchase under any other provision of this Act.
" The argument of the learned Attorney General is that (1)[1958] S.C.R. 1422.
617 the now section which operates retrospectively from January 26, 1950, talks of sales in which the goods are delivered for consumption in the State of Madras; in other words, of Explanation sales only; therefore, the Act does not operate on sales of an interState character other than Explanation sales.
We are unable to agree.
First of all, sub section
(2) of new section 22 makes it quite clear that the section does not affect the liability to tax of any sale or purchase under any other provision of the Act.
Secondly, after Parliament had lifted the ban imposed by article 286(2), it was unnecessary to repeat the provisions of that Article in the Act and old section 22 in so far as it repeated article 286(2) became otiose.
Therefore, new section 22 has not the effect of subtracting something from the power to tax conferred on the State by the charging section, section 3, read with the definition of 'sale ' in section 2(h).
To repeat what we have said earlier: after the removal of the fetter of article 286 (2), the Act operating on its own terms makes the transactions in question liable to tax, and new section 22 makes no difference to that position.
For these reasons, we are unable to accept as correct the arguments advanced on behalf of the assessee.
In our view, the Validation Act applies and the assessment on the transactions in question cannot now be challenged on the ground alleged by the assessee.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| Under the Bengal Land Revenue Sales Act (XI of 1859) if this Collector proposes to sell the entire estate where there art separate accounts for the several shares which constitute the estate, he has first to close the separate account or accounts or merge them into one demand and then he has to issue a notification for the sale of the entire estate under section 6 of the Act and it is only when the Collector has followed this procedure that he would have authority to bring to sale the entire estate.
Where a touzi was held in two shares in respect of which separate accounts were kept in the Collector 's records and, as the shares were in arrears a notification was issued putting up for sale the two separate units of the estate and showing the separate items of arrears due from each unit, and both the shares were sold: Held, that the sale cannot be treated as a sale of the entire estate even though the two shares constituted the whole estate, and the purchaser was not entitled to the privileges conferred on the purchaser of an entire estate by section 37 of the Bengal Land Revenue Sales Act, 1859.
The notification issued under section 6 of the Act was conclusive as to whether the subject matter of the sale was the entire estate or the separate shares constituting the estate.
|
N: Criminal Appeal Nos.
429 to 437 of 1981.
Appeals by Special leave from the Judgment and Order dated the 1st December, 1980 of the Punjab & Haryana High Court in Criminal Appeal Nos.
374 DB to 379 DB of 1980 and Murder Reference No. 5 of 1980 D. Mukherjee and R.L. Kohli, K. R. Nagraja, P. Krishna Rao and Arun Madan, for the Appellants, in Crl.
A. No. 431 of 1981.
Harbans Singh and D.D Sharma for the Respondent.
The Judgment of the Court was delivered by CHANDRACHUD, C.J.
Ten persons were tried by the learned Additional Sessions Judge, Ferozepur, for offences under section 302 read with sections 120B and 149 of the Penal Code 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 the 30th September 1978 in the village of Kaile.
Convicting nine out of these for the offences of conspiracy and murder, the learned Judge 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 life imprisonment.
Thus, in these appeals by special leave, we have before us five persons who are sentenced to death and two who are sentenced to imprisonment for life.
Buta Singh, the son of accused No, 1, was murdered in June 1977.
Certain members of the family of those who were murdered in the instant case were tried for the murder of Buta Singh, but they were acquitted in March 1978.
That is the background of the incident leading to the present crime and furnishes its motive.
Mohinder Singh (P.W. 15) who had a farm house in village Kaile, used to live therein with his family, including his brothers Jarnail Singh (since deceased) and Nirval Singh (P.W. 16).
On the 608 night between 29th and 30th September 1978, Mohinder Singh and the members of his family were sleeping in the courtyard of the farmhouse.
It is alleged that accused Nos.
3 to 10, most of whom were carrying firearms, entered the courtyard from the western side and fired at the persons who were sleeping in the courtyard Sohan Singh, a member of Mohinder Singh 's family, woke up and fired at the accused in self defence.
After he was hit by a shot fired by the accused, Mohinder Singh took his gun and fired at the accused, killing a person called Darbara Singh who belonged to the party of the accused.
As a result of the shots fired by the accused, Jarnail Singh, Amar Singh and Sher Singh died instantaneous deaths.
Wassan Singh died soon thereafter in the hospital, while Sohan Singh died early next morning after making a dying declaration.
Nirval Singh (P.W. 16) and Sant Kaur (P.W. 24) received gunshot injuries.
A bullock and calf also perished and a buffalo was injured in the incident.
Shortly after the occurrence, Tarlok Singh, the Sarpanch of the village, and a brother of his reached the place of occurrence.
Wassan Singh, Sohan Singh, Nirval Singh and Sant Kuar were removed to the hospital, while Mohinder Singh went to the Dharamkot Police Station and lodged his First Information Report, Exhibit PHH, at 2.30 a.m.
Accused No. 1 Darshan Singh alias Bhasuri, accused No.2 Joga Singh and accused No. 9 Sadha Singh were put under arrest after they surrendered themselves in October November 1978.
Accused No. 6, Bakhshish Singh, was arrested on October 20, 1978.
One SBBL boregun (Exh.
P 60) and four live cartridges were recovered from his person under the recovery memorandum exhibit P.GGG.
Accused Nos. 3 and 7, Sarbjit Singh and Manohar Singh, were arrested on the night between 22nd and 23rd October, 1978.
One SBBL 12 bore unlicensed gun (Exh.
P 76) and three live cartridges were seized from the person of accused No. 3 under the Memo Exh.
P. ZZZ.
A self loaded unlicensed rifle (Exh.
P. 73) loaded with 2 live cartridges along with 2 spare cartridges were recovered from Accused No. 7 under the Memo Exh.
P. XXX.
Accused No. 5, Darshan Singh was arrested on October 23, 1978.
An unlicensed 303 rifle (Exh. P.67) and 5 live cartridges were recovered from his person under the Memo Exh.
P. TTT.
Accused No. 4, Swaran Singh was arrested on October 24, 1978.
An unlicensed country made 315 pistol (Exh.
P. 80) and four live cartridges were seized from his person under the Memo Exh.
P. CC.
The empties which were recovered from the place of occurrence were sent for examination to the Forensic Science Laboratory.
609 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 however rests mainly on three categories of evidence : (1) the evidence of the three eye witnesses, Mohinder Singh (P.W.15), Nirval Singh (P.W.16); and Sant Kaur (P.W.24), (2) the dying declaration (Exh. PV) made by Sohan Singh; and (3) the recovery of firearms and cartridges from the possession of accused Nos. 3, 4, 5, 6 and 7.
The evidence of the Ballistic Expert Kumar (P.W. 53) shows that the empty shells and cartridges recovered from the place of occurrence were fired from the various weapons recovered from these accused.
On the question of conspiracy, the prosecution led the usual kind of puerile evidence, as for example, of someone over hearing something while on way to answering a call of nature.
Here the strain was changed by alleging that Suran Singh (P.W. 27) heard a most damaging conversation between the accused while he was negotiating the purchase of a tractor.
Evidence was also produced to show that a wallet was found at the scene of offence, containing a letter (exhibit P. 53) sent by one of the accused to another of them, discussing the threads of conspiracy.
The First Information Report lodged by Mohinder Singh (P.W. 15) mentions the names of accused Nos. 2, 3, 8 and 9 only.
The fact that the names of the other accused are not mentioned in the F.I.R. was at least a circumstance which the prosecution had to explain, though no rule of law stipulates that an accused whose name is not mentioned in an F.I.R. is entitled to an acquittal.
But 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 F.I.R, the High Court 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.
The High Court says : "Dying declarations is a sacred statement given by a dying man and it is settled law that much value is to be attached to a dying declaration, especially when it is corroborated by other independent evidence .
In fact, the shadow of immediate death is the best guarantee of the truth of the statement made by a dying man regarding the causes of circumstances leading to his death which are absolutely fresh in his mind and is unstinted or discoloured by any other consideration except speaking the truth." 610 The High Court, with respect, overlooked that the dying declaration itself is open to grave exception in this case.
It implicates accused Nos. 3 to 9 but the evidence of Dr. Birinder Pal (P.W. 2) who conducted the postmortem examination on the body of Sohan Singh shows that his vital organs like the peritoneum, stomach and spleen were "completely smashed" and that "there were remote chances of his remaining conscious after receipt of injury No. 3", that is to say, the injury on the left iliac fosa which caused the rupture of the spleen.
The incident took place at about midnight of the 29th and 30th while the dying declaration is alleged to have been made by Sohan Singh at 7 a.m., on the 30th.
If the vital organs of Sohan Singh 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, and we 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.
Therefore, his dying declaration cannot be relied upon for any purpose and has to be excluded from consideration.
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.
The evidence regarding conspiracy is as weak as the evidence about the dying declaration of Sohan Singh, Surat Singh (P.W. 27) speaks of a meeting between the co conspirators in the house of accused No. 1, Darshan Singh alias Bhasuri.
We cannot believe that in the presence of an utter stranger like Surat Singh, the conspirators would discuss their plans to commit these murders, throwing all caution to the winds.
The answer of the High Court is that the conspirators were taking liquor while discussing the conspiracy and, "When liquor is taken, then under its influence sometimes most secret things are divulged in the presence of a person who is not so intimately connected.
It is often said, when liquor goes in, truth comes out.
" This is somewhat artless.
Liquor is no life detector and we cannot assume that accused Nos. 1 and 2 were so drunk as to overlook the presence of a stranger in their midst yet not so drunk 611 so as to be unable to discuss the execution of their criminal design.
Besides, Surat Singh forgot all about the incident and was contacted by the police a few days later.
The learned Sessions Judge was right in holding that Surat Singh 's evidence suffers from certain infirmities, because of which one could not place implicit reliance upon him.
We would go further and say that his evidence is too unnatural to merit serious attention.
Apart from the evidence of motive, Surat Singh 's evidence in regard to the conspiracy is the only evidence against accused No. 1 Bhasuri and accused No. 2 Joga Singh.
It is on that evidence that these two accused have been convicted under section 120 B read with section 302 of the Penal Code, the former being sentenced to death and the latter, because of his young age, to life imprisonment.
The evidence of the three eye witnesses, Mohinder Singh (P.W. 15), Nirval Singh (P.W, 16) and Sant Kaur (P.W. 24) is broadly true and since that evidence has been accepted by both the courts, we will not scan it any further.
It is, however, necessary to state that these eye witnesses are not likely to have seen the specific part played by each one of the accused.
The night was dark, the time midnight and the witnesses, who were fast asleep, were woken up either by barking of the dogs or by the sound of gun shots.
There was a small lantern hanging a few feet away.
Mohinder Singh concealed himself behind a pillar and fired shots at the accused in self defence, killing a person on the side of the accused.
He has named accused 3, 5, 6 and 8 while Nirval Singh and Sant Kaur who received gun shots injuries have named accused 3 to 9.
The evidence of the last two witnesses in regard to the presence of accused 3 to 9 and their being armed appears to us to be open to no exception.
Shri Kohli who appears on behalf of accused No. 5 says that the name of that accused was not mentioned in the F.I.R., not even in the supplementary F.I.R., and that he was not involved in the conspiracy.
That is so, but the failure of Mohinder Singh to refer to everyone of the accused in the F.I.R., does not detract from the evidence of the two injured witnesses in regard to the presence of accused No. 5.
Hiding behind a pillar, Mohinder Singh was evidently not in a position to see the whole of the incident.
The evidence of these two eye witnesses is corroborated by the circumstances that fire arms and cartridges were recovered from the possession of accused Nos. 3 to 7 at the time of their arrest.
The evidence of the Ballistic Expert, Kumar (P.W. 53) shows that the 612 empty shells and cartridges recovered from the place of occurrence were fired from the various weapons recovered from these accused.
The result of this discussion is that in so far as accused Nos. 1 and 2 are concerned, there is no evidence on the basis of which they can be convicted, once Surat Singh is disbelieved and the story of conspiracy discounted.
Accused 1 and 2 were not present at the scene of occurrence and obviously, Mohinder Singh involved accused No. 2 on a surmise by naming him in the F.I.R. He corrected himself during his evidence in the court which he had to do since Accused 2 's presence at the scene of offence was impossible to accept.
In so far as the other accused are concerned, namely, accused Nos. 3 to 9, their presence and participation in the incident in question is proved beyond doubt.
Their conviction under section 302 read with section 149 of the Penal Code must therefore be upheld.
In so far as the death sentence imposed upon accused Nos. 1, 3, 5, 6 and 7 is concerned, accused No. 1 is entitled to an acquittal, as a result of which the death sentence imposed upon him has to be set aside.
The learned Sessions Judge did not impose death sentence upon accused No. 2 because he was young, that is, about 20 22 years of age.
We find that accused Nos. 3, 6 and 7 are much younger than accused No. 2: accused 3 and 6 were 19 while accused No. 7 was 18 years of age on the date of offence.
If age was a circumstance in favour of accused No. 2, it is even more so in the case of accused Nos. 3, 6 and 7.
Besides, 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.
Therefore, while upholding the conviction of accused 3, 6 and 7, we set aside the death sentence imposed upon them and sentence them to imprisonment for life.
Accused No. 5 was about 35 years of age but it makes no sense to sentence him to death for the reason merely that he is older than the others.
He was certainly not the leader of the gang as one could have said about accused No. 1, had he been present.
The death sentence imposed upon accused No. 5 must therefore be set aside which we hereby do.
We sentence him to life imprisonment.
In the result, accused Nos. 1 and 2 are acquitted and the order of conviction and sentence recorded against them is set aside.
They are entitled to be released forthwith.
We uphold the conviction of accused Nos. 3 to 9 but set aside the sentence of death 613 imposed upon accused Nos. 3, 5, 6 and 7 and sentence them to imprisonment for life.
The sentence of life imprisonment imposed upon accused 4 stands.
The conviction of accused Nos. 8 and 9 under section 302 read with section 149 of the Penal Code is upheld as also the sentence of life imprisonment imposed upon them.
S.R. Appeal partly allowed.
| An order of detention to prevent black marketing cannot be held to be illegal merely because in the grounds for such detention the detaining authority has referred only to the past activities of the person detained, inasmuch as in stances of past activities may give rise to a subjective mental conviction that it is necessary to detain such person to prevent him from indulging in black marketing in the future.
Under the Preventive Detention.
Act, 1950, the test as to whether an order of detention should be made is the subjective satisfaction of the detaining authority; the Court has no power to consider whether the grounds supplied by the authority are sufficient to give rise to such satis faction.
The establishment of the Advisory Board by the Amending Act of 1951 has not made the matter a justiciable one, and even after the Amending Act the Court has no power to consider whether the grounds supplied ' are sufficient for making an order of detention.
|
Civil Appeals Nos. 1848 and 1849 of 1974.
Appeals by Special Leave from the Judgment and Orders dated the 27 11 1973 & 23 5 74 of the Delhi High Court in L.P.A. No. 172/73 and Civil Writ No. 237 of 1974 respectively.
Hardyal Hardy, section K. Mehta, K. R. Nagaraja and P. N. Puri for the Appellants.
1062 Mrs. Shyamla Pappu and Girish Chandra for Respondents 1 3.
R. N. Sachthey for Respondents 4 5.
The Judgment of the Court was delivered by SARKARIA, J.
This judgment will govern the disposal of these two appeals which arise out of a common judgment of the High Court of Delhi dismissing the writ petitions filed by the appellants and others, under Article 226 of the Constitution.
On November 27, 1972, the Administrator of Delhi, made an order under section 5 of the Indian Telegraphs Act.
1885 (for short, the Act) authorising the Superintendent of Police, North District, to take temporary possession "until further orders" of certain specified telephones installed in rooms and cabins of the building known as Coronation Hotel, Fatehpuri, Delhi.
The order reads as under: "Whereas the Administrator of Delhi is satisfied that illegal forward trading (satta) in agricultural commodities is being practised on a large scale through the following telephones installed in the rooms/cabins in the premises of the Coronation Hotel, Fatehpuri, Delhi, thereby affecting adversely the price of the supply essential to the life of the community.
Whereas public emergency exists and the Administrator, Delhi is satisfied that the continuation of satta at the aforesaid premises through the telephones given above is prejudicial to public interest and as such it is necessary to take temporary possession of all the aforesaid telephones from the premises in question." Another order in similar terms was made on December 4, 1972 by the Administrator for taking over certain other telephones.
Four subscribers, who were affected by these orders challenged their validity by writ petitions in the High Court.
A Bench of the High Court allowed those petitions and quashed the orders in question on the ground that resort cannot be had to section 5(1) of the Act for taking temporary possession of the subscribers ' telephones.
The General Manager, Telephones, Delhi also, made orders on November 28, 1972 and December 5, 1972, purporting to act under Rule 422 of the Indian Telegraphs Rules, 1951, (for short, the Rules) for disconnecting the telephones and non exchange lines.
One of those orders, dated November 28, 1972, may be extracted as a specimen: "The Delhi Administration has certified vide order No. F5/20/72/C HG dated 27 11 1972 that public emergency exists and that continuation of "satta ' at the premises of Coronation Hotel Fatehpuri through the telephones is pre judicial to public interest.
1063 The undersigned in exercise of the powers conferred under rule 422 of Indian Telegraphs Rules, 1951 hereby orders to disconnect the telephones and Non exchange Lines mentioned in the list supplied by Delhi Administration (copy attached).
" Thereupon the appellants filed C.W. 470 of 1973 in the High Court praying for a writ to quash these orders of the General Manager and for restoration of their telephone connections.
This writ petition was heard by a learned Single Judge of the High Court who allowed the same and quashed the impugned orders and further directed that the telephones be restored to the appellants.
Aggrieved, the Union of India and other respondents carried a special appeal to the appellate Bench of the High Court.
Before the appellate Bench it was contended that the impugned action was bad because: (a) no prior notice in regard to the same was given to the appellants; (b) the Divisional Engineer did not apply his mind and record his own satisfaction about the existence of any emergency and as such there was a contravention of Rules 421 and 422 which had to be read together; (c) the reason given in the impugned order, to the effect, that the appellants were making illegal and improper use of their telephones inasmuch as they were transmitting messages and information in regard to satta business which had been banned, was irrelevant and extraneous to Rule 422 under which the impugned action has been purportedly taken; (d) the emergency contemplated by Rule 422 is not the same as a 'public emergency ' declared under s.5, but is an emergency arising out of the breakdown of the telecommunications due to a technical defect, labour trouble, vis major, fire or the like, the existence of which was to be established to the satisfaction of the Divisional Engineer and not any extraneous authority.
Stress was laid, in this connection, on the fact that the word "emergency" in Rule 422 is not qualified by the prefix "public", instead, the words used are "any emergency".
The High Court negatived these contentions.
In its opinion, the requirement of notice could be dispensed with under r. 422 if the General Manager, Telephones, was satisfied that the telephones were being used by the subscribers for illegal forward trading and that such use was contrary to public interest in view of the existence of "economic" emergency.
It further held that the words "any emergency" in Rule 422 include an 'economic emergency ', and on the basis of the certificate in regard to the existence of an "economic emergency" issued under section 5, by the Delhi Administration.
The Divisional Manager was competent in exercise of his powers under Rule 422 to pass the impugned orders.
In the result, it set aside the decision of the learned Single Judge and dismissed the writ petition with the observation that "the telephone authorities should treat these disconnections as temporary and allow the petitioners to get back their connections, if the General Manager is satisfied that the emergency caused by the shortage in supply of the commodities on which the forward trading was banned, was over".
1064 Hence these appeals.
The contentions canvassed before the High Court have been repeated before us.
Before dealing with the same, it will be worthwhile to have a look at the relevant statutory provisions.
Section 5 of the Act provides: "(1) On the occurrence of any public emergency, or in the interest of the public safety, the Central Government or State Government or any officer specially authorised in this behalf by the Central Government or a State Government may, if satisfied that it is necessary or expedient so to do, take temporary possession (for so long as the public emergency exists or the interest of the public safety requires the taking of such action) of any telegraph established, maintained or worked by any person licensed under this Act.
(2) On the occurrence of any public emergency or in the interest of the public safety, the Central Government or a State Government or any officer specially authorised in this behalf by the Central Government or a State Government may, if satisfied that it is necessary or expedient so to do in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States or public order or for preventing incitement to the commission of an offence, for reasons to be recorded in writing, by order, direct that any message or class of messages to or from any person or class of persons or relating to any particular subject, brought for transmission by or transmitted or received by any telegraph, shall not be transmitted, or shall be intercepted or detained, or shall be disclosed to the Government making the order or an officer thereof mentioned in the order: Provided that press messages intended to be published in India of correspondents accredited to the Central Government or a State Government shall not be intercepted or detained, unless their transmission has been prohibited under this sub section.
" The material rules are these: "421.
Disconnection of telephones.
Where the Divisional Engineer is satisfied for reasons to be recorded in writing that it is necessary to do so, he may, after giving the subscriber a notice in writing for a period which shall not except in emergent cases be less than 7 days, disconnect the telephone, and in such case, the subscriber shall be entitled to refund of rent for the unexpired portion of the period for which the connection or service was given.
1065 422.
Right of disconnection in emergency.
The Divisional Engineer may, in the event of any emergency, disconnect any subscriber, with or without notice.
In case such disconnection exceeds a period of seven days, the subscriber shall be entitled to proportionate refund of rent.
Illegal or improper use of telephones.
A subscriber shall be personally responsible for the use of his telephone.
No telephone shall be used to disturb or irritate any person or for the transmission of any message or communication which is of an indecent or obscene nature or is calculated to annoy any person or to disrupt the maintenance of public order in any other manner contrary to any provision of law." Section 5(1), if properly construed, does not confer unguided and unbridled power on the Central Government/State Government/Specially Authorised Officer to take possession of any telegraph.
Firstly, the occurrence of a 'public emergency ' is the sine qua non for the exercise of power under this section.
As a preliminary step to the exercise of further jurisdiction under this section the Government or the authority concerned must record its satisfaction as to the existence of such an emergency.
Further, the existence of the emergency which is a pre requisite for the exercise of power under this section, must be a 'public emergency ' and not any other kind of emergency.
The expression 'public emergency ' has not been defined in the statute, but contours broadly delineating its scope and features are discernible from the section which has to read as a whole.
In sub section (1) the phrase 'occurrence of any public emergency ' is connected with and is immediately followed by the phrase "or in the interests of the public safety".
These two phrases appear to take colour from each other.
In the first part of sub section
(2) these two phrases again occur in association with each other, and the context further clarifies, with amplification, that a 'public emergency ' within the contemplation of this section is one which raises problems concerning the interest of the public safety, the sovereignty and integrity of India, the security of the State, friendly relations with foreign States or public order or the prevention of incitement to the commission of an offence.
It is in the context of these matters that the appropriate authority has to form an opinion with regard to the occurrence of a 'public emergency ' with a view to taking further action under this section.
Economic emergency is not one of those matters expressly mentioned in the statute.
Mere 'economic emergency ' as the High Court calls it may not necessarily amount to a 'public emergency ' and justify action under this section unless it raises problems relating to the matters indicated in the section.
Rules 421 and 422 occur in serial order in a section of Part V under the group caption, "Telephone connections and other services".
Rule 421 requires the Divisional Engineer to record his satisfaction, supported by reasons, for the proposed disconnection of the telephone.
It further requires that authority to give a notice in writing to the subscriber.
Such notice shall ordinarily be of not less than seven 1066 days.
In emergent cases, the period of this notice can be less than seven days.
But even in emergent cases under this Rule, the notice cannot be dispensed with altogether.
Rule 422 empowers the Divisional Engineer to disconnect any subscriber 'in the event of any emergency ' with or without notice.
The existence of "any emergency" to the satisfaction of the Divisional Engineer, appears to be a necessary pre requisite to the exercise of the power under this rule.
It is significant that while section 5 speaks of the occurrence of a 'public emergency ', satisfaction with regard to the existence of which is to be recorded by the appropriate authority mentioned in that section, Rule 422 purports to empower the Divisional Engineer to take action thereunder in the event of "any emergency".
The scope of the words "any emergency" in Rule 422 is apparently wider than the expression "public emergency" used in section 5.
It follows that the satisfaction is regard to the existence of "any emergency" under Rule 422 is to be of the Divisional Engineer.
He has to arrive at such satisfaction rationally on relevant material which may include any certificate or report of the appropriate Government as to the occurrence of a 'public emergency '.
The requirement of recording such satisfaction by the Divisional Engineer, with reasons therefor, is implicit in the Rule.
That will be a minimal safeguard against arbitrary exercise of this drastic power.
In this connection, it will not be out of place to mention here, that sub section (2) of section 5 which made the Certificate of the Central/State Government conclusive proof as to the existence of a 'public emergency ', stood deleted and replaced by a different provision, at the time when the impugned action was taken in this case.
That is an additional reason for holding that it was the Divisional Engineer who had to form his own opinion as to the existence of an emergency, before taking action under r. 422.
Having heard the Counsel on both sides, we are of opinion, that the impugned Order suffers at least from one apparent defect of jurisdiction.
Assuming that the General Manager was competent to make an order under Rule 422, the power has been exercised mainly on a ground which is not a relevant consideration under this Rule.
This ground as recited in the Delhi Administration Notification of December 4, 1972 and reproduced in the impugned order of the General Manager, Telephones, is that illegal forward trading (satta) in agricultural commodities is being practised in a large scale through the telephones in question at the premises of Coronation Hotel, Fatehpuri.
In other words, the impugned action has been taken chiefly on the ground that the appellants have been making improper or illegal use of these telephones.
This being the position, the appropriate course to be followed was that laid down in Rule 427 read with Rules 416 and 421.
But this was not done.
It is well settled that where a power is required to be exercised by a certain authority in a certain way, it should be exercised in that manner or not at all, and all other modes of performances are necessarily forbidden.
It is all the more necessary to observe this rule 1067 where power is of a drastic nature and its exercise in a mode other than the one provided, will be violative of the fundamental principles of natural justice.
Now, in the present case, if the telephones of the appellants were to be disconnected on the ground of misuse, then they had to give, in consonance with the principles of natural justice, opportunity to the appellants to explain their conduct before taking action under Rule 427 read with Rules 416 and 421.
Resort to the wrong and more drastic course provided in Rule 422, on a ground which was not germane to an action under that Rule, vitiates the impugned order, particularly when it is manifest that in making the impugned order, the General Manager was influenced more by this ground and less, if at all, by the existence of 'public emergency ' certified by the Delhi Administration.
For the foregoing reasons we accept these appeals, allow the writ petitions, quash the impugned orders and direct the respondents to restore the telephone connections to each of these appellants.
However in the circumstances of the cases we make no order as to costs.
S.R. Appeals allowed.
| There is no presumption in Hindu Law that a business standing in the name of a member of the Hindu joint family is joint family business, even when that member is the manager or the father.
There is this difference between the position of the father starting a new business and a mere manager doing so that while the debts contracted by the father in such business are binding on the sons on the theory of a son 's pious obligation to pay his father 's debt, those contracted by the latter are not binding on the other 478 members of the family unless, at least, it can be shown that the starting of the business was necessary.
Ram Nath vs Chiranii Lal, ([1934] I.L.R. 57 All. 605), Chhotey Lal Chaudhury vs Dalip Narain Singh, ([1938] I.L.R. 17 Patna 386), Hayat Ali Shah vs Nem Chand (A.I.R. , referred to.
But this distinctive position of the father does not by itself make the new business started by him a joint business of the undivided family.
The question of benami is a question of fact and where there is evidence to support a finding that a person is a benamidar for another, the Supreme Court in a Special appeal will not interfere with it.
Consequently, in a case where an election was challenged on the ground that the candidate returned was interested in a contract entered into by his father, benami in the name of another, with the Government for felling trees and transporting timber and as such disqualified to stand for election under section 7(d) read with section 9(2) of the Representation of the People Act and the Tribunal found on evidence that the father was the real contracting party but without considering the evidence on the other point which, if believed, might sustain a finding that the father was meting on behalf of the family, presumed as a matter of law that the ion had interest in the contract and declared the election void, Held, that the Tribunal took an erroneous view of the law and made a wrong presumption, so its decision must be set aside, and as the findings are not sufficient for disposal of the matter the case must be remitted back for rehearing on the evidence on record.
|
erred Case No. 2 of 1991.
(Under Article 139 A(1) of the Constitution of India) Salman Khurshid, Madhan Panikkar, Mrs. Vimla Sinha and Gopal Singh for the Appellant.
Kapil Sibal and Arun Jaitley, Additional Solicitor Generals, Ms. Kamini Jaiswal and C.V.S. Rao for the Respond ents.
The Judgment of the Court was delivered by section RATNAVEL PANDIAN, J.
The above case has been regis tered in pursuance of our order dated 23.11.90 in Transfer Petition (Civil) No.546/90 transferring O.A.No.191 of 1990 under Article 139 (A) of the Constitution of India from the file of the Central Administrative Tribunal, Patna Bench, Patna.
the appellant 's prayer is to dispose of the above case along with Civil Appeal Nos.
5439 52/90 (arising out of SLP (Civil) Nos.
13525 38 of 1990).
The relief sought for by the appellant before the CAT, Patna Bench was similar to the one before the CAT, Principal Bench, Delhi that being to declare the second proviso to Rule 4 of C.S.E. as violative of Articles 14 and 16 of the Constitution of India.
On 29.8.90 the 114 Patna Bench in M.P. No. 36/90 granted an interim relief which reads thus: "Heard the learned counsel for the applicant.
The applicant may be allowed to appear at the Civil Services Main Examination, 1990, subject to result of the final orders in the original application.
The respondents are directed accordingly.
Copy be given to the parties today." Mr. Salman Khurshid appearing for the appellant submit ted that the interim direction given by the Patna Bench if covered by the directions given in paras 5(ii) and 6 of the order of CAT, Delhi he has no further submission to be made, and the implementation of those directions will satisfy his relief.
We in our order dated 7.12.1990 have clarified certain directions given by the CAT, Delhi with reference to the various interim orders passed by it in a number of OAs and finally gave the following direction: "Hence we permit all those candidates falling under Para Nos. 5 (ii), 6 and 7 to sit for the main examination subject to the condition that each candidate satisfies the Secretary, Union public Service Commission that he/she falls within these categories and that the concerned candidates have passed the preliminary exami nation of 1990 and have also applied for the main examination within the due date.
This permission is only for the ensuing examina tion.
, As we are now permitting those who have passed the preliminary examination of 1990 and have applied for the main examination on the basis of the unquestioned and unchallenged directions given under paras 5(ii), 6 and 7 of the judgment of the CAT, Principal Bench, New Delhi, the same benefit is extended to the other appellants also who satisfy those condi tions as mentioned under paras 5 (ii), 6 and 7.
" The above direction virtually confirms the direction given by the Patna Bench in M.P. No.36/90 allowing the appellant therein to sit for C.S.E. (Main) of 1990.
However, we have not subjected our direction with any rider in the sense that that direction will be subjected to the result of the appeals.
In fact, we have in the judgment rendered today in Civil Appeal Nos.
5439 52/90 and batches given a direction to the respondents inclusive of the Union Public Service Commission that "all those candidates who have appeared for the Civil Services (Main) Examination, 1990, pursuant to our permission given in the order dated 7.12.90 and who have 115 come out successfully in the said examination and thereby have qualified themselves for the interview, shall be per mitted to appear for the interview test and that if those candidates completely and satisfactorily qualify themselves by getting through the written examinations as well as the interview shah be given proper allocation and appointment on the basis of their rank in the merit list notwithstanding the restriction imposed by the second proviso and our present judgment upholding the validity of the said proviso since the respondents have not questioned and challenged the directions given by CAT, Principal Bench, Delhi in para graphs 5(ii), 6 and 7 of its judgment dated 20.8.1990.
We would like to make it clear that the unchallenged directions given by the CAT in its judgment as well as directions given by us in our order dated 7.12.90 are not.controlled by any rider in the sense that the said directions were subject to the result of the cases and hence those directions would be confined only to those candidates who appeared for CSE, 1990 and no further.
The seniority of those successful candidates in CSE, 1990 would depend on the service to which they have qualified.
The seniority of the left out candidates would be maintained in case they have joined the service to which they have been allocated on the result of previous CSE and such candidates will not be subjected to suffer loss of seniority as held by the CAT, Delhi in its judgment".
Therefore, we hold that this appellant is also entitled for the same above benefit.
In other respects, this trans ferred case is dismissed for the reasons mentioned in the main judgment in Civil Appeal Nos.
5439 52/90 and batches.
No order as to costs.
R.P. Appeal dismissed.
| The appellants along with another were tried of the charge of murder under Section 302, I.P.C., read with Sec tion 34, I.P.C. The prosecution case was that the appellants as well as the deceased 's brother and his son were residing in a vil lage.
The deceased came to the village on 6.7.1974.
On 8.7.1974 at about 10.30 a.m., the deceased 's brother along with his wife and his son had gone to the mango grove across the choe to collect mangoes to give to the deceased.
While they were returning home along the pathway, the deceased was seen coming in the opposite direction.
The two appellants along with another accused, emerged on the scene and at tacked the deceased.
Appellant No.1 had a datar and Appel lant No. 2 had a sua and their companion had a lathi.
After inflicting injuries with the weapons the appellants escaped.
The deceased was removed to the house of one Darbara Singh for being rushed to the hospital, but within a short time, he breathed his last.
The first information was lodged at the police station, around 7.00 P.M., and the crime was registered and investi gated and finally chargesheeted.
The post mortem examination of the dead body revealed that the deceased had sustained lacerated injuries and three stab wounds and that he died on account of the shock and hemorrhage as a result of the injuries.
The motive alleged was that there had been some grouse on account of the transfer of agricultural land that be longed to the family, among the 240 children of the three brothers.
The Sessions Judge acquitted the accused of the charge.
The High Court, in appeal preferred by the State convicted the appellants and sentenced them to undergo imprisonment for life, against which, this appeal under Section 2 of the Supreme Court (Enlargement of Criminal Appellate Jurisdic tion) Act, 1970 was filed.
The appellants contended that the view taken by the trial court was reasonable and there was no justification for upsetting the judgment even if a different view could have been taken by the appellate court on reappraisal of the evidence; that the High Court did not dislodge the various reasons given by the trial court for discarding the evidence and that the conclusion drawn by the High Court on the evidence on record was wrong.
Dismissing the appeal, this Court, HELD: 1.
The prosecution evidence in the case is wholly reliable and it leads to irresistible conclusion that the appellants had intentionally caused the death of the de ceased.
The occurrence took place in broad day light at a place close to the residence of the witnesses.
The appel lants are the near relations of the deceased and the wit nesses and it has happened in the background of the family rued.
The first information has been recorded within a few hours which in the circumstances of the case cannot be considered as unreasonably delayed.
The version given in the F.I.R. is substantially the same as the one spoken to by the witnesses before the Court.
[243 C D] 2.
The eye witnesses have given consistent account of the role played by each of the appellants.
There would not have been any difficulty for the witnesses to identify the appellants from a distance and across the reeds even if they could get only a glimpse of them in the course of their action, and the medical evidence is not Inconsistent.
[243 E F] 3.
The fact that the acquittal of the companion of the appellants had not been interfered with by the High Court cannot advance the case of the appellants.
The High Court has given him the benefit of doubt on the materials that emerged in the evidence.
That is no reason to discard the evidence of the witnesses so far as the appellants are concerned when such 241 evidence does not suffer from any serious infirmity; [243 H; 244 A]
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